Manajemen Komputer & Sistem Informasi

Fifteenth edition

Chapter 12
Enhancing Decision Making
 Learning Objectives
•
12-1 What are the different types of decisions, and how does the decision making process work?
•
12-2 How do information systems support the activities of managers and management decision making?
•
12-3 How do business intelligence and business analytics support decision making?
•
12-4 How do different decision-making constituencies in an organization use business intelligence, and what is
•
the role of information systems in helping people working in a group make decisions more efficiently?
 Video Cases
• Case 1: PSEG Leverages Big Data and Business Analytics Using
GE’s PREDIX Platform
• Case 2: FreshDirect Uses Business Intelligence to Manage Its
Online Grocery
• Case 3: Business Intelligence Helps the Cincinnati Zoo Work
Smarter
 Roche: Changing Medical Care with Mobile Technology
and Big Data (1 of 2)
• Problem
– Opportunities from new technology
– Aging population
• Solutions
– Healthcare monitoring your body’s vital signs in real time
– Cloud servers
– Big Data software analytics
– Smartphone connections to patients
 Roche: Changing Medical Care with Mobile Technology
and Big Data (2 of 2)
• The connected healthcare model collects data from smartphones and
sends it to a health facility that monitors in real time.
• Demonstrates IT’s role in providing information and business
intelligence that help organizations improve services
• Illustrates how information systems improve decision making
 What Are the Different Types of Decisions, and How Does
the Decision Making Process Work? (1 of 2)

• Business value of improved decision making

– Improving hundreds of thousands of “small” decisions adds up to large annual
value for the business
• Types of decisions
– Unstructured: Decision maker must provide judgment, evaluation, and insight
to solve problem
– Structured: Repetitive and routine; involve definite procedure for handling so
they do not have to be treated each time as new
– Semistructured: Only part of problem has clear-cut answer provided by
accepted procedure
 What Are the Different Types of decisions, and How Does
the Decision Making Process Work? (2 of 2)

• Senior managers
– Make many unstructured decisions
• Middle managers
– Make more structured decisions but these may include unstructured
components
• Operational managers and rank and file employees
– Make more structured decisions
Figure 12.1: Information Requirements of Key Decision-Making
Groups in a Firm

Copyright © 2018 Pearson Education Ltd.

 The Decision Making Process
• Intelligence
– Discovering, identifying, and understanding the problems occurring in the
organization
• Design
– Identifying and exploring solutions to the problem
• Choice
– Choosing among solution alternatives
• Implementation
– Making chosen alternative work and continuing to monitor how well
solution is working
Figure 12.2: Stages In Decision Making

Copyright © 2018 Pearson Education Ltd.

 Managerial Roles
• Information systems can only assist in some of the roles played
by managers
• Classical model of management: five functions
– Planning, organizing, coordinating, deciding, and controlling
• More contemporary behavioral models
– Actual behavior of managers appears to be less systematic, more
informal, less reflective, more reactive, and less well organized than
in classical model
 Mintzberg’s 10 Managerial Roles
• Interpersonal roles
– Figurehead
– Leader
– Liaison
• Informational roles
– Nerve center
– Disseminator
– Spokesperson
• Decisional roles
– Entrepreneur
– Disturbance handler
– Resource allocator
– Negotiator
 Real-World Decision Making
• Three main reasons why investments in IT do not always
produce positive results
– Information quality
• High-quality decisions require high-quality information
– Management filters
• Managers have selective attention and have variety of biases that reject
information that does not conform to prior conceptions
– Organizational inertia and politics
• Strong forces within organizations resist making decisions calling for major
change
 High-Velocity Automated Decision Making
• Made possible through computer algorithms precisely defining
steps for a highly structured decision
– Humans taken out of decision
• For example: High-speed computer trading programs
– Trades executed in 30 milliseconds
• Require safeguards to ensure proper operation and regulation
 What Is Business Intelligence?
• Business intelligence
– Infrastructure for collecting, storing, analyzing data produced by
business
– Databases, data warehouses, data marts
• Business analytics
– Tools and techniques for analyzing data
– OLAP, statistics, models, data mining
• Business intelligence vendors
– Create business intelligence and analytics purchased by firms
 The Business Intelligence Environment
• Six elements in the business intelligence environment
– Data from the business environment
– Business intelligence infrastructure
– Business analytics toolset
– Managerial users and methods
– Delivery platform—MIS, DSS, ESS
– User interface
• Data visualization tools
Figure 12.3: Business Intelligence and Analytics for Decision
Support

Copyright © 2018 Pearson Education Ltd.

Business Intelligence and Analytics Capabilities
• Goal is to deliver accurate real-time information to decision
makers
• Main analytic functionalities of BI systems
– Production reports
– Parameterized reports
– Dashboards/scorecards
– Ad hoc query/search/report creation
– Drill down
– Forecasts, scenarios, models
 Table 12.4: Examples of Business Intelligence Predefined
Production Reports
BUSINESS FUNCTIONAL AREA PRODUCTION REPORTS
Sales Forecast sales; sales team performance; cross-selling; sales cycle times
Service/call center Customer satisfaction; service cost; resolution rates; churn rates
Marketing Campaign effectiveness; loyalty and attrition; market basket analysis
Procurement and support Direct and indirect spending; off-contract purchases; supplier
performance
Supply chain Backlog; fulfillment status; order cycle time; bill of materials analysis
Financials General ledger; accounts receivable and payable; cash flow; profitability
Human resources Employee productivity; compensation; workforce demographics;
retention
 Predictive Analytics
• Uses variety of data, techniques to predict future trends and
behavior patterns
– Statistical analysis
– Data mining
– Historical data
– Assumptions
• Incorporated into numerous BI applications for sales, marketing,
finance, fraud detection, health care
– Credit scoring
– Predicting responses to direct marketing campaigns
 Big Data Analytics
• Big data: Massive datasets collected from social media, online
and in-store customer data, and so on
• Help create real-time, personalized shopping experiences for
major online retailers
• Smart cities
– Public records
– Sensors, location data from smartphones
– Ability to evaluate effect of one service change on system
 Operational Intelligence and Analytics
• Operational intelligence: Business activity monitoring
• Collection and use of data generated by sensors
• Internet of Things
– Creating huge streams of data from web activities, sensors, and other
monitoring devices
• Software for operational intelligence and analytics enable
companies to analyze their big data
Interactive Session: Technology: Singapore Sports Institute
Uses Analytics for SEA Games

• Class discussion
– What technologies are used by SSI? What is their purpose?
– To what extent was technology responsible for Team Singapore’s success at the SEA games?
Explain.
– Search the web for SimulCam and StroMotion. How can these tools be used for video analysis?
– Search the web for the role of big data in the German team’s 2014 World Cup victory and
compare it with Team Singapore’s success at the SEA Games.
Location Analytics and Geographic Information Systems

• Location analytics
– Ability to gain business insight from the location (geographic)
component of data
• Mobile phones
• Sensors, scanning devices
• Map data
• Geographic information systems (GIS)
– Ties location-related data to maps
– Example: For helping local governments calculate response times to
disasters
 Interactive Session: Britain’s National Health Service Jettisons
Choose and Book System
• Class discussion
– Clarify and describe the problems of the NHS Choose and Book System. What people,
organization, and technology factors were responsible for those problems?
– To what extent was Choose and Book a failure? Explain your answer.
– What was the economic and social impact of Choose and Book?
– Describe the steps that should have been taken to make Choose and Book more successful.
 Management Strategies for Developing BI and BA
Capabilities
• One-stop integrated solution
– Hardware firms sell software that run optimally on their hardware
– Makes firm dependent on single vendor
• Multiple best-of-breed solution
– Greater flexibility and independence
– Potential difficulties in integration
– Must deal with multiple vendors
• All BI and BA systems bring high switching costs
Figure 12.4: Business Intelligence Users

Copyright © 2018 Pearson Education Ltd.

 Support for Semistructured Decisions
• Decision-support systems
– Support for semistructured decisions
• Use mathematical or analytical models
• Allow varied types of analysis
– “What-if” analysis
– Sensitivity analysis
– Backward sensitivity analysis
– Multidimensional analysis / OLAP
• For example: pivot tables
Figure 12.5: Sensitivity Analysis

Copyright © 2018 Pearson Education Ltd.

Figure 12.6: A Pivot Table That Examines Customer Regional
Distribution and Advertising Source

Copyright © 2018 Pearson Education Ltd.

 Decision Support for Senior Management (1 of 2)
• ESS: decision support for senior management
– Help executives focus on important performance information
• Balanced scorecard method
– Measures outcomes on four dimensions
• Financial
• Business process
• Customer
• Learning and growth
– Key performance indicators (KPIs) measure each dimension
Figure 12.7: The Balanced Scorecard Framework

Copyright © 2018 Pearson Education Ltd.

 Decision Support for Senior Management (2 of 2)
• Business performance management (BPM)
– Translates firm’s strategies (e.g., differentiation, low-cost producer,
scope of operation) into operational targets
– KPIs developed to measure progress toward targets
• Data for ESS
– Internal data from enterprise applications
– External data such as financial market databases
– Drill-down capabilities
 Group Decision-Support Systems (GDSS)
• Interactive system to facilitate solution of unstructured
problems by group
• Specialized tools
– Virtual collaboration rooms
– Software to collect, rank, edit participant ideas and responses
• Promotes collaborative atmosphere, anonymity
• Cisco’s Collaboration Meeting Rooms Hybrid (CMR)
• Skype for Business