Essentials of Management Information Systems PDF

Essentials of Management Information Systems Fourteenth Edition, Global Edition Chapter 11 Improving Decision Making and Managing Artificial Intelligence...

Essentials of Management Information Systems Fourteenth Edition, Global Edition Chapter 11 Improving Decision Making and Managing Artificial Intelligence Copyright © 2020 Pearson Education Ltd. Learning Objectives 11.1 What are the different types of decisions, and how does the decision-making process work? 11.2 How do business intelligence and business analytics support decision making? 11.3 What is artificial intelligence (AI)? How does it differ from human intelligence? 11.4 What are the major types of AI techniques and how do they benefit organizations? Copyright © 2020 Pearson Education Ltd. Business Value of Improved Decision Making Possible to measure value of improved decision making Decisions made at all levels of the firm – Some are common, routine, and numerous – Although value of improving any single decision may be small, improving hundreds of thousands of “small” decisions adds up to large annual value for the business Copyright © 2020 Pearson Education Ltd. Table 11.1 Business Value of Enhanced Decision Making Example Decision Value Decision # of Annual Estimated Annual Maker Decisions Value to Firm Allocate support to most Accounts 12 $100,000 $1,200,000 valuable customers manager Predict call center daily demand Call Center 4 150,000 600,000 management Decide parts inventory level Inventory 365 5,000 1,825,000 daily manager Identify competitive bids from Senior 1 2,000,000 2,000,000 major suppliers management Schedule production to fill Manufacturin 150 10,000 1,500,000 orders g manager Copyright © 2020 Pearson Education Ltd. Types of Decisions Unstructured – Decision maker must provide judgment to solve problem – Novel, important, nonroutine – No well-understood or agreed-upon procedure for making them Structured – Repetitive and routine – Involve definite procedure for handling them so do not have to be treated as new Semi-structured – Only part of problem has clear-cut answer provided by accepted procedure Copyright © 2020 Pearson Education Ltd. Figure 11.1 Information Requirements of Key Decision-Making Groups in a Firm Copyright © 2020 Pearson Education Ltd. The Decision-Making Process 1. Intelligence – Discovering, identifying, and understanding the problems occurring in the organization 2. Design – Identifying and exploring various solutions 3. Choice – Choosing among solution alternatives 4. Implementation – Making chosen alternative work and monitoring how well solution is working Copyright © 2020 Pearson Education Ltd. Figure 11.2 Stages in Decision Making Copyright © 2020 Pearson Education Ltd. What Is Business Intelligence? Infrastructure for managing data from business environment – Warehousing – Integrating – Reporting – Analyzing Hadoop, O LA P, analytics Products defined by technology vendors and consulting firms Copyright © 2020 Pearson Education Ltd. Figure 11.7 The Balanced Scorecard Framework Copyright © 2020 Pearson Education Ltd. Decision Support for Senior Management (2 of 2) Business performance management (BPM) – Management methodology based on firm’s strategies – Translates strategies into operational targets – Uses set of KPIs to measure progress toward targets ESS combine internal data with external – Financial data, news, etc. Drill-down capabilities Copyright © 2020 Pearson Education Ltd. Artificial Intelligence Techniques Artificial intelligence: Grand vision vs. narrow definition Evolution of AI – Big data databases – Reduction in the price of processors – Expansion in capacity of processors – Refinement and explosion of algorithms – Large investments in IT and AI Progress in image recognition and natural language – E.g.: Siri, Alexa, facial recognition Copyright © 2020 Pearson Education Ltd. What Are the Major Types of AI Techniques and How Do They Benefit Organizations? (1 of 5) Expert systems – Capture human expertise in a limited domain of knowledge – Express expertise as a set of rules in a software system – Knowledge base – Inference engine Copyright © 2020 Pearson Education Ltd. Figure 11.8 Rules in an Expert System Copyright © 2020 Pearson Education Ltd. What Are the Major Types of AI Techniques and How Do They Benefit Organizations?(2 of 5) Machine learning – Computers improving performance by using algorithms to learn patterns from data and examples Neural networks – Find patterns and relationships in very large amounts of data – Sensoring and processing nodes – “Deep Learning” neural networks Copyright © 2020 Pearson Education Ltd. Figure 11.9 How a Neural Network Works Copyright © 2020 Pearson Education Ltd. What Are the Major Types of AI Techniques and How Do They Benefit Organizations?(4 of 5) Natural language processing – Software that can process voice or text commands using natural human language Computer vision systems – Emulate human visual system to view and extract information from real-world images Robotics – Design and use of movable machines that can substitute for humans Copyright © 2020 Pearson Education Ltd. What Are the Major Types of AI Techniques and How Do They Benefit Organizations?(5 of 5) Intelligent Agents – Software programs that imitate humans and perform tasks on command – The agent uses a limited built-in or learned knowledge base – Accomplish tasks or make decisions on the user’s behalf, e.g. chatbots finding cheap fares, routing calls in a call center Copyright © 2020 Pearson Education Ltd.