CHAPTER 9: ENABLING THE ORGANIZATIONS - DECISION MAKING

Organizational information

ü Employees must be able to obtain and analyze to many different levels, formats and granu larities of organizational information to make decision

ü Successfully collecting, compiling, sorting and analyzing information can provide tremendous insight into how an organization is performing

The value of timely information

ü Timeliness is an aspect of information that depends on the situation :

-         Real-time information – immediate up-to-date information

-         Real-time system – provides real-time information in response to query requests

The value of quality information

ü Business decisions are only as good as the quality of the information used to make the decisions

ü You never want to find yourself using technology to help you make a bad decision faster

ü Characteristic of high-quality information include :

-         Accuracy

-         Completeness

-         Consistency

-         Uniqueness

-         Timeliness

Understanding the cost of poor information

ü The four primary sources of low quality information include :

I.            Online customers intentionally enter inaccurate information to protect their privacy

II.            Information from different systems have different entry standards and formats

III.            Call centre operators enter abbreviated or erroneous by accident or to save time

IV.            Third party and external information contains inconsistencies, inaccuracies and errors

ü Potential business effects resulting from low quality information include :

-         Inability to accurately track customers

-         Difficulty identifying valuable customers

-         Inability to identify selling opportunities

-         Marketing to nonexistent customers

-         Difficulty tracking revenue due to inaccurate invoices

-         Inability to build strong customer relationship

·        Understanding the benefits of good information

ü High quality information can significantly improve the chances of making a good decision

ü Good decision can directly impact an organization’s bottom line

DECISION MAKING

Reasons for the growth of decision making information systems

-people need to analyze large amounts of information

-people must take decision quickly

-people must apply sophisticated analysis techniques, such as modelling and foresting, to make good decisions

-people must protect the corporate asset of organizational information

MODEL

A simplified representation or abstraction of reality

IT SYSTEMS IN AN ENTERPRISE

EXECUTIVES - EXECUTIVE INFORMATION SYSTEM (EIS)

MANAGERS - DECISION SUPPORT SYSTEMS (DSS)

ANALYSIS – TRANSACTION PROCESSING SYSTEMS (TPS)

TRANSACTION PROCESSING SYSTEMS

-Moving up through the organizational pyramid users move from requiring transactional information to analytical information

-Transaction processing system – the basic business system that serves the operational level (analysts) in an organization

-Online transaction processing (OLTP) – the capturing of transaction and event information using technology to (1) process the information according to defined business rules, (2) store the information, (3) update existing information to reflect the new information

-Online analytical processing (OLAP) – the manipulation of information to create business intelligence in support of strategic decision making

DECISION SUPPORT SYSTEMS

-Decision support systems (DSS) – models information to support managers and business professionals during the decision-making process

-Three quantitative models used by DSSs include :

1. Sensitively analysis – the study of the impact that changes in one (or               more) parts of the model have on other parts of the model

2. What-if analysis – checks the impact of a change in an assumption on the proposed solution

3. Goal-seeking analysis – finds the inputs necessary to achieve a goal such as a desired level of output

EXECUTIVE INFORMATION SYSTEMS

-Executive information system (EIS) – a specialized DSS that supports senior level executives within the organization

-most EISs offering the following capabilities :

1.consolodation– involves the aggregation of intelligent system that mimics the evolutionary, survival-of-the-fittest process to generate increasingly better solutions to a problem

2.drill-down – enables, users to get details and details of details, of information

3.slice-and-dice – looks at information from different perspectives

ARTIFICIAL INTELLIGENCE

-INTELLIGENT SYSTEM – various commercial applications of artificial intelligence

-ARTIFICIAL INTELLIGENCE (AI) – Simulates human intelligence such as the ability to reason and learn

-advantages: can check info on competitor

-the ultimate goal of AI is the ability to build a system that can mimic human intelligence

-Four most common categories of AI include :

1. expert system – computerized advisory programs that imitate the reasoning processes of expert in solving difficult problems

2. neural network – attempts to emulate the way the human brain works

-fuzzy logic – a mathematical method of handling imprecise or      subjective information

3. genetic algorithm – an AI system that mimics the evolutionary, survival-if-the-fittest process to generate increasingly better solutions to a problem

4. intelligent agent – special-purposed-knowledge-based information system that accomplishes specific tasks on behalf of its users

DATA-MINING

-data-mining software includes many forms of AI such as neural networks and expert system

-common forms of data-mining analysis capabilities include:

1. cluster analysis

2. association detection

3. statistical analysis

CLUSTER ANALYSIS

-CLUSTER ANALYSIS – To divide an information set into mutually exclusive groups such that the members of each group are as possible to one another and the different groups are as far apart as possible

-CRM systems depend on cluster analysis to segment customer information and identify behavioral traits

ASSOCIATION DETECTION

-Association detection reveals the degree to which variables are related and the nature and frequency of these relationships in the information

-Market basket analysis such items as Web sites and checkout scanner information to detect customers’ buying behavior and predict future behaviour by identifying affinities among customers’ choices of products and services

STATISTICAL ANALYSIS

STATISTICAL ANALYSIS performs such functions as information correlations, distributions, calculations and variance analysis

- forecast– predictions made on the basis of time-series information

- time-series information – time-stamped information collected at a particular frequency

CHAPTER 8 - DATA WAREHOUSE

Data warehouse.

 What is that ? Do you know about it ? maybe some of you think 'warehouse' that sells clothes right ? It's simple. Warehouse is place for storage of goods. So, automatically we can say it as place of storage of data. Get it ? Picture below shows you data warehouse 

It is a logical collection of information that gathered from many different operational databases that supports business activities & decision making start.

Data warehouse compiled information from internal or transactional/operational databases & external databases through extraction, transformation, and loading (ETL)
Data warehouse sends subsets of the information to data mart.
Information is multidimensional : contains layers of columns and rows
To present multidimensional information, a cube is used in common term.

Data mining is the process of analyzing data to extract information not offered by raw data alone and to  perform it, users need data mining tools such as query tools, reporting tools, statistical tools and intelligent agent. This tools use a variety of techniques to find patterns and relationship in large volume of information.

To  increase quality of organizational information and effectiveness, businesses must develop strategy to keep information clean. Information cleansing or scrubbing is process that weed out & fixes or discard inconsistent, incorrect or incomplete information.

In addition, business intelligence is information that people use to support their decision making efforts.
Principle BI enablers include technology, culture and people.

CHAPTER 7- STORING ORGANIZATIONAL INFORMATION DATABASES

What is databases ?

Maintain info about various types of objects (inventory), event (transaction),

people (employees) and places (warehouses).

For example UiTM student portal and facebook 

Relational Database Fundamental

Database models include :

• Hierarchical database model - information is organized into a tree-like structure (using parent/child relationships) in such a way that it cannot have too relationships. 
• Network database model - a flexible way of representing objects and their relationships
• Relational database model - stores information in the form of logically related two-dimensional tables

Entity and Attribute

• Entity - A person , place, thing, transaction, or event about which information is stored.

• Attributes (field, columns) - characteristics or properties of an entity class.

Keys and Relationships

Primary keys and foreign keys identify the various entity classes (tables) in the database

• Primary key - a field (or group of fields) that uniquely identifys a given entity in a table.
• Foreign key - a primary of one table that appears an attribute in another table and acts to provide a logical relationship among the two tables.

Relational Database Advantages

Database advantages from a business perspective include :

• Increased flexibility
• Increased scalability and performance
• Reduced information integrity (quality)
• Increased information redundancy
• Increased information security

Increased flexibility

A well-designed database should:

• Handle changes quickly and easily
• Provide users with different views
• Have only physical view - deals with the physical storage of information on a storage device
• Have multiple logical view

Increased Scalability and Performance

A database must scale to meet increased demand, while maintaining acceptable performance levels.

• Scalability : refers to how well a system can adapt tp increased demands
• Performance : measures how quickly a system performs a certain process or transaction 

Reduced Information Redundancy

• Databases reduce information redundancy - The duplication of information or storing the same information in the multiple places.
• Inconsistency is one of the primary problems with redundant information.

Increased Information Integrity (Quality)

• Information integrity : measures the quality of information
• Integrity constraint : rules that help ensure the quality of information

CHAPTER 6: VALUING ORGANIZATIONAL INFORMATION

ORGANIZATIONAL INFORMATION..

 Ø  Organizational information comes at different levels and in different formats and “granularities”.

 Ø  Information granularities refers to the extent of detail within the information (fine and detailed or coarse and abstract).

 Ø  Successfully collecting, compiling, sorting and finally analyzing information from multiple levels, in varied formats, exhibiting different granularity can provide tremendous insight into how an organization is performing

 Ø  After understanding the different levels, formats and granularities of information, it is important to look at a few additional characteristics that helps determine the value of information

 THE VALUE OF TRANSACTIONAL AND ANALYTICAL INFORMATION

 Ø  Transactional information encompasses all of the information contain within a single business process or unit of work, and its primary purpose is to support the performing of daily operational tasks

 Ø  Analytical information encompasses all organizational information, and its primary purpose is to support the performing of managerial analysis tasks

 Ø  It is also includes transactional information along with other information such as market and industry information

THE VALUE OF TIMELY INFORMATION

 Ø  Real-time information means immediate, up-to-date information

 Ø  This system provide real-time information in response to query request

THE VALUE OF QUALITY INFORMATION..

 Ø  Business decisions are only as good as the quality of the information used to make the decisions

 Ø  The five characteristics common to high-quality information:

Accuracy  

      Are all the values correct? For example, is the name spelled correctly? Is the dollar amount recorded properly?

      

Completeness  

      Are any of the values missing? For example, is the address complete including street,  city, state and zip code?

      

Consistency

   Is aggregate or summary information in agreement with detailed information? For  example, do all total fields equal the true total of the individual fields?

      

Uniqueness

       Is each transaction, entity and event represented only once in the information? For        example, are there any duplicate customers?

      

Timeliness

      Is the information current with respect to the business requirements? For example, is    information updated weekly, daily or hourly?

Chapter 5 Organisational Structure That Support Strategic Initiatives

Chief Information Officer (CIO)

• Serves as the company’s top technology infrastructure manager

• Runs the organization’s internal IT operations

• Works to streamline business processes with technology

• Focuses on internal customers (users and business units)

• Collaborates and manages vendors that supply infrastructure solutions

• Aligns the company’s IT infrastructure with business priorities

• Developers strategies to increase the company’s bottom line (profitability)

• Has to be a skilled and organized manager to be successful

Chief Technology Officer (CTO)

• Serves as the company’s top technology architect

• Runs the organization’s engineering group

• Uses technology to enhance the company’s product offerings

• Focuses on external customers (buyers)

• Collaborates and manages vendors that supply solutions to enhance the company’s product(s)

• Aligns the company’s product architecture with business priorities

• Develops strategies to increase the company’s top line (revenue)

• Has to be a creative and innovative technologist to be successful

Chief Security Officer (CSO)

• leader responsible for the development, implementation and management of the organization’s corporate security vision, strategy and programs. 

• They direct staff in identifying, developing, implementing and maintaining security processes across the organization to reduce risks, respond to incidents, and limit exposure to liability in all areas of financial, physical, and personal risk.

•  establish appropriate standards and risk controls associated with intellectual property and direct the establishment and implementation of policies and procedures related to data security.

Chief Privacy Officer (CPO)

•  responsible for managing the risks and business impacts of privacy laws and policies. 

•  created to respond to both consumer concern over the use of personal information, including medical data and financial information, and laws and regulations.

• evaluating legislative and regulatory proposals involving collection, use, and disclosure of personal information by the Federal Government. 

• conducting a privacy impact assessment of proposed rules of the Department or that of the Department on the privacy of personal information, including the type of personal information collected and the number of people affected.

• coordinating with the Officer for Civil Rights and Civil Liberties.

Chief Knowledge Officer (CKO)

• responsible for overseeing knowledge information within an organization. 

• The CKO's job is to ensure that the company profits from the effective use of knowledge resources. 

• Investments in knowledge may include employees, processes and intellectual property.

• CKO can help an organization maximize the return on investment (ROI) on those investments.

• Maximize benefits from intangible assets, such as branding and customer relationships.

• Repeat successes and analyze and learn from failures.

• Foster innovation.

• Avoid the loss of knowledge that can result from loss of personnel.

Chapter 4 MEASURING THE SUCCESS OF STRATEGIC INITIATIVES

Define metrics and describe the relationship between efficiency IT metrics and effectiveness IT metrics

• Efficiency IT metrics from the table is the important to monitor, do not always guarantee effectiveness
• For effectiveness IT metrics, it is determined according to an organization’s goals, strategies and objectives 

EFFICIENCY IT METRICS

Throughput                        

The amount of information that can travel trough system at                                                     any point

Transaction speed            

The amount of time a system takes to perform a transaction

System availability             

The number of hours a system is available for users…

Information security           

The extent to which a system generates the correct results                                                     when executing the same transaction numerous times

Web traffic                              

Includes a host of brenchmarks such as the number of                                                            pages views, the number of unique visitors and the                                                                  average time spent viewing a web page

Response time                      

The time it takes to respond to user interactions such as a                                                       mouse click

EFFECTIVENESS IT METRICS

Usability                                  

The ease with which people perform transactions and/or                                                          find information. A popular usability metric on the Internet                                                       is degrees of freedom,which measures the number of                                                               clicks required to find desired information

Customer satisfaction           

Measured by such branchmarks as satisfaction surveys,                                                        percentage of existing customers retained and increases                                                         in revenue dollars percustomer

Conversion rates                     

The number of customers an organization “touches” for                                                          the first time and persuades to purchase its products or                                                          services.This is a popular metric for evaluating the                                                                     effectiveness of banner, pop-up and pop-under ads on                                                           the Internet

Financial                                      

Such as return on investment (the earning power of an                                                             organization’s assets), cost-benefit analysis (the                                                                       comparisonof projected revenues and costs including                                                            development, maintenance fixed, and variable), and                                                                  break-even analysis (the point at which constant                                                                        revenues equal ongoing costs)

IT Effectiveness Matrix:

• Effectiveness is related to doing the right things.
• It is more to intangible which is not easy to see, touch, calculate, define, determine and realize.
• It also measure the impact IT has on business process and activities including customer satisfaction.
• How well the organization achieve its goals and objectives and ensuring they accomplished.

IT Efficiency Matrix:

• Efficiency is related to doing the things right.
• It is more to tangible which is easy to see,touch,calculate,define,determine and realize.
• It also measure the performance of the IT system itself including throughput, speed, availability and flexibility.
• How far the company can using their resources such as capital, assets, facilities or technology system to achieve it goals. 
• For example, a company already have a formal web and now they want to create news letter that can be generate everyday for their customers.