Chapter 12 - Enhancing Decision Making

Every organization has different levels (strategic, management, operational) and with those levels are different decision making requirements.  Decisions can be structured, semi-structured and unstructured.  Structured decisions are usually at the operational level and unstructured are usually at the strategic level.  Decision making can be made by individual employees or by teams or groups.  Intelligence, design, choice and implementation are the four levels of decision making.  Despite their intent systems to support decision making don't always have better outcomes because of problems with information quality, management filters an organizational culture.

Classic models of managerial activities stressed the functions of organizing, planing, coordinating, controlling and deciding.  More modern research looks at the behavior of managers has found that the real daily activities of a manager are fragmented, brief in duration and variegated; and that is why many managers tend to avoid making grand game changing decisions.  IT provides new tools for managers to carry out their daily activities.  They are able to plan, forecast, monitor with better accuracy and speed than ever before.  IS is great for helping mangers disseminate information and allocate information but there is still some opportunity around supporting unstructured decisions.

Business intelligence and analytics guarantee accurate, almost real-time information for decision making.  A BI environment consists of information from the business environment, the BI infrastructure, a BA tool set, managerial users and methods and the user interface.  There are six analytic functionalities that BI systems deliver to achieve these ends: pre-defined production reports, parametrized reports, dashboards and scorecards, ad hoc queries and searches, the ability to drill down and the ability to model scenarios and create forecasts.

Business within organizations uses BI for monitoring the performance of their company.  Most of the decisions are somewhat structured and Management information systems are used to support the decision making.  For making unstructured decisions decision support systems are used, which include powerful analytics and modeling tools.  Group decision support systems (GDSS) help employees working together make decisions more efficiently.  GDSS feature special conference room facilities where people can contribute ideas, suggestions and solutions using networked computers and software tools for organizing ideas, making and setting priorities, gathering information and documenting meeting sessions. 

Chapter 11 - Managing Knowledge

Knowledge management is a set of processes to store, create, transfer and apply knowledge in the organization.  A large part of a companies value is dependent on the ability to manage and create knowledge.  There are three different types of knowledge management systems.  They are enterprise wide knowledge management systems, knowledge work systems and intelligent techniques.

The types of systems used for enterprise-wide knowledge systems are used company wide to collect, store, distribute and apply digital content and knowledge.  Enterprise content management systems provide tools for organizing as well as databases and tools for organizing semi-structured knowledge, like email or rich media.  Knowledge network systems give directories and other tools for locating employees.  Enterprise wide knowledge systems usually provide significant information if they are designed well and give employees the ability to share, locate and use knowledge more efficiently.

Knowledge work systems (KWS) back up the creation of new knowledge and integrate it into the organization.  KWS need east access to an external knowledge base, computer hardware that can support software with graphics, document management, analysis, communications and a user friendly interface.  Computer-aided design (CAD) systems, virtual reality systems and augmented reality applications create interactive simulations that act and look just like the real world.

There are many important business advantages to using intelligent techniques for knowledge management.  Artificial intelligence is just as it sounds, so it lacks the breadth, flexibility, and general human intelligence; but it can be used to extend organizational knowledge, codify and capture.  The expert systems capture tacit information from a limited domain of human expertise and express knowledge in the form of rules.  Expert systems are best for problems of classification or diagnosis.  Case-based reasoning models organizational knowledge that can be consistently updated and refined.  Fuzzy logic is a software technology that expresses knowledge in the form of rules that use approximate or subjective values.  Neural networks consist of hardware and software that try to mimic the thought processes of the actual human brain.  They are great for their ability to learn without programming and recognize patterns that can't be easily described by humans.  Thy are currently used in science, business and medicine to discern complicated patterns.  Genetic algorithms create solutions using genetically based processed like fitness, mutation and crossover.  Thy are typically used for process optimization, product design and monitoring industrial systems.  Intelligent agents are software programs with built in or learned knowledge bases that carry out repetitive, specific and predictable tasks for users, business processes and software applications.  Intelligent agents can be used to navigate through data to find important, useful information for the user.

Chapter 10 - E-Commerce: Digital Markets, Digital Goods

Chapter 10 starts by discussing some of the features that are unique to e-commerce, digital markets and digital goods.  E-Commerce includes digitally enabled commercial transactions between companies and people.  Ubiquity, global reach, universal technology standards, richness, information density and interactivity are all unique e-commerce features.  Digital markets tend to be more transparent and they have reduced information asymmetry, transaction and search costs as well as the ability to change prices based on market conditions.  Music, software, videos and books are all digital goods and can all be delivered over a digital network.  Digital products are great because once the original has been created the price of delivering the product is typically lower.

E-tailers, market creators, transaction brokers, content providers, community and service providers and portals are all e-commerce business models.  The main e-commerce revenue models are sales, advertising, free-freemium, subscription, affiliate and transaction fee.

E-commerce has transformed marketing by identifying marketers new ways of communication with millions of customers and at a low cost.  Companies use crowd sourcing to use the "wisdom of crowds" and improve product offerings and grow customer value.  Behavioral targeting techniques are also used to increase the effectiveness of rich media, banner and video ads.

Business to business transactions have also been affected by e-commerce.  It is used to enable companies to locate suppliers, place orders, solicit bids and track orders electronically.  Net marketplaces provide individual, digital marketplace for sellers and buyers.  Even more private industrial networks link a company with its suppliers and other strategic business partners and develop extremely efficient and responsive supply chains.

For location based applications like, finding local hotels and restaurants m-commerce is best suited.  Millions of people use mobile phones and other hand held devices to pay bills, banking, securities, music and games.  M-commerce does require wireless portals and digital payment systems.

Anytime you build an e-commerce website you must ensure that you have a clear understanding of the business objectives that must be achieved and the technology necessary to hit those goals.  E-commerce sites can be hosted locally or outsourced to external service providers.

Chapter 9 - Achieving Operational Excellence and Customer Intimacy: Enterprise Applications

Enterprise systems help businesses achieve operation excellence by collecting data and feeding into numerous applications that can support nearly all of an organizations internal business activities.  As new information is entered by one process the information is made available immediately to other business processes.  The enterprise systems support organizational centralization by enforcing uniform data standards and business processes throughout the company and a single unified technology platform.  The company-wide data generated by enterprise systems often helps managers evaluate company performance.

In order for supply chain management systems to coordinate planning, production and logistics with suppliers they must automate the flow of information among members of the supply chain so they can use it to make better decisions about how to much purchase and when and where to ship it.  The more accurate the information received the less likelihood of uncertainty and the impact of the bull whip effect.  Supply chain management software includes software for supply chain planning and for supply chain execution.  Internet technology supports the management of global supply chain information.  Better communication between the chain members also gains better customer response and movement toward a demand-driven model.

Customer relationship management (CRM) systems integrate and automate customer facing processes in sales, marketing and customer service which provides an enterprise-wide view of customers.  Many companies use this knowledge to enhance customer interactions and provide them with better service or the ability to provide new products and services.  The biggest customer relationship management software packages provide capabilities for both operational CRM and analytical CRM.  They typically include modules for managing relationships with selling partners and for employee relationship management.

As enterprise applications are difficult to implement there are challenges that arise.  Enterprise applications require extensive organizational change, big software investments and careful assessment of exactly how these systems will enhance organizational performance.  In order for the systems to enhance operations they must be integrated into systems that are not flawed, that and ensuring that all employees understand how to use systems and how they should work help enhance a successful roll out.  Training for all employees using the technology is necessary as well.

Service platforms integrate data and processes from the various enterprise applications and from legacy applications to create new and composite business processes.  The new services are driven through enterprise portals which can integrate applications so that information appears to come from a single source.  Mobile, cloud and open source versions of this are products that are becoming more and more readily available.

Chapter 8 - Securing Information Systems

Because the Internet is designed to be an open system and makes internal corporate systems more vulnerable to actions from outsiders; digital data is even more vulnerable to destruction, misuse, error, fraud and hardware or software failures.  Computer hackers can unleash denial of service (DoS) or penetrate corporate networks causing serious system disruption.  Wi-Fi networks can also be easily hacked by intruders.  Computer viruses and worms can also disarm networks and websites.  The spread out nature of cloud computing makes it difficult to track unauthorized activity or to apply controls from afar.  

The business value of security and control is huge.  Lack of good security and control can cause major problems down the line for any business or organization; and can lead to loss of sales and productivity.  Information assets, such as confidential employee records, trade secrets or business plans lose a lot of their value if they are revealed to company outsiders.  New laws such as HIPPA, the Sarbanes-Oxley Act and the Gramm-Leach-Bliley Act have made it mandatory for a company to have very strict electronics management policies.

In order for a company to have solid security and control it is necessary to establish a good set of both general and application controls for their IS.  Risk assessment evaluates information assets, identifies control points and control weaknesses and determines the most cost effective set of controls.  Organizations also have to develop a coherent corporate security policy and plans for continuing business operations in the event of a disaster or a major disruption to daily business operations.  The security policy should include policies for acceptable use and identity management; as well a comprehensive, systematic MIS auditing tool.

The most important tools for technologies regarding safeguarding information resources are firewalls, which prevent unauthorized users from accessing private networks.  Also intrusion detection systems monitor private networks from suspicious network traffic.  Tokens, passwords, biometric identification and smarts cards are all used to authenticate systems users.  Antivirus software is used to check computer systems for infections by viruses and worms and usually eliminate malicious software.  Encryption and digital certificates are also both often used to protect information resources.

Chapter 7 - Telecommunications, the Internet, and Wireless Technology

The principle components of telecommunications networks include computers, network interfaces, a connection medium, network operating system software and either a hub or switch.  The networking infrastructure for a large organization includes the traditional telephony system, mobile cellular communication, wireless local area networks, video-conferencing systems, a corporate website, intranets, extranets and a wide array of local and area wide networks, including the Internet.The rise of client/server computing, the use of packet switching and the adoption of the Transmission Control Protocol/Internet Protocol (TCP/IP) have all shaped contemporary networks.

The main telecommunications transmission media are twisted copper wire, coaxial cooper cable, fiber optic cable and wireless transmission.  Local area networks (LAN) connect PC's and other digital devices together within a 500 meter radius and are used today for many corporate computing tasks.  Network components may be connected together using a star, bus or ring topology.  Wide area networks (WANs) span broad geographical distances ranging from several miles to continents.  Digital subscriber lines (DSL) technologies, cable Internet connections and T1 lines are often used for high-capacity Internet connections.

The Internet is a world wide network of networks that used the client/server model of computing and the TCP-IP reference model.  Every computer that uses the Internet has a unique number associated with it (IP address).  Main Internet services include email, newgroups, chatting, instant messaging, Telnet, FTP and the Web.  Web pages are based on Hypertext Markup Language (HTML) and can display text, graphics, video an audio.  Companies have also started to realize economies by using VoIP technology for voice transmission and by using virtual private networks (VPNs) as low cost alternatives to WANs.

The principal technologies and standards for wireless networking, communication and Internet access are high speed, high bandwidth and digital packet switched transmission.  Broadband 3G networks are capable of transmitting data at speeds ranging from 144 Kbps to more than 2 Mbps.  4G networks capable of transmission speeds that could reach 1 Gbps are also starting to be released.  Code Division Multiple Access (CDMA) and Global Systems for Mobile Communications (GSM) are both common cellular standards.

Radio frequency identification (RFID) and wireless sensor networks are valuable for business because they provide powerful technology for tracking movement of goods by using tiny tags with embedded data about an item and its location.  RFID readers read the radio signals transmitted bt these tags and pass the data over a network to a computer for processing.  Wireless sensor network (WSNs) are networks of interconnected wireless sensing and transmitting devices that are embedded into the physical environment to provide measurements of many points over various large spaces.

Chapter 6 - Foundations of Business Intelligence: Databases and Information Management

Chapter 6 identified some of the problems associated with managing data resources in a traditional file environment and how are they solved by a database management system.  The typical file management techniques make it hard for firms to keep track of the pieces of data they use in a systematic way and to organize the data so that it can be easily accessed.  In order to develop their own files independently different functional areas and groups were created.  As time progressed the traditional file management environment created problems like data redundancy and inconsistency, program data dependence, poor security, inflexibility and lack of data sharing and availability.  Database management system (DBMS) helps solve these problems with software that permits centralization of data and data management so that businesses have a single consistent source for all their needs.

Some of the major capabilities of DBMS include data definition, data dictionary and a data manipulation language.  The data definition capability specifies the structure and content of the database.  The data dictionary is an automated or manual file that stores information about the data in the database, including names, definitions, formats and descriptions of data elements.  The manipulation language such as SQL, is a specialized language for accessing and manipulating data in the database.  The relational database is the primary method for organizing and maintaining data today in informational systems because it is so flexible and easily accessible.  

There are some important database design principles.  Designs should include both a logical and physical design.  The logical design should model the database from a business perspective.  The model should reflect an organizations main business processes and decision making requirements.  A well designed relational database will not include many-to-many relationships, and all attributes for a specific entity will only apply to that entity.  It should try to enforce the referential integrity rules to ensure that relationships between coupled tables will remain consistent.

Some principle tools and technologies for accessing information from databases to improve business performance and decision making are data warehouses. They consolidate current and historical data from many different operational systems in a central database designed for reporting and analysis.  Data warehouses support multidimensional data analysis, also known as online analytical processing (OLAP).   OLAP represents relationships among data as a multidimensional structure, which can be visualized as cubes of data and cubes of data within data, which enables more sophisticated data analysis.

When developing a database environment it is crucial to require policies for managing organizational data as well as a good data model and database technology.  A formal information policy should govern maintenance, distribution and use of information in the organization.  In larger companies a formal data administration function is responsible for the information policy.  Inaccurate, incomplete and inconsistent data creates a serious operational and financial problem.  Companies must take whatever steps necessary to ensure they have a high level of data quality.