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MBUS 302 Chapter 2 notes

by: Aimee Castillon

MBUS 302 Chapter 2 notes MBUS 302

Aimee Castillon
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Lecture notes for Chapter 2. The red font indicates that I got the information from the textbook
Managing information in a global environment
Class Notes
businessminor, information
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This 11 page Class Notes was uploaded by Aimee Castillon on Thursday September 22, 2016. The Class Notes belongs to MBUS 302 at George Mason University taught by Majumdar in Summer 2016. Since its upload, it has received 2 views. For similar materials see Managing information in a global environment in Minor In Business at George Mason University.

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Date Created: 09/22/16
        GMU        Aimee Castillon  Managing Information Systems  MBUS 302  • Fall 2016     Heading: 9/20/16  Notes: Chapter 2­ Decisions and Processes  Learning Outcomes:  Section 2.1­ Decision Support Systems  ­ Explain the  ­ Making business decisions  importance of decision  ­ Managerial decision­making challenges  making for managers  ­ Analyze large amounts of information (think about how many  at each of the three  text messages are sent every day)  primary organization  ­ Apply sophisticated analysis techniques  levels along with the  ­ Make decisions quickly  associated decision  ­ The decision­making process  characteristics  ­ Six steps  ­ Define critical success  ­ Problem identification  factors (CSFs) and  ­ I.e. Processes falling short?  key performance  ­ Data collection  indicators (KPIs), and  ­ source is important (fact­based vs. vague)  explain how managers  ­ Solution generation  use them to measure  ­ Solution test  the success of MIS  ­ Solution selection  projects  ­ Solution implementation  ­ Classify the different  ­ Decision­making and problem­solving occur at each level of  operational support  organization  systems, managerial  support systems, and  strategic support  systems, and explain  how managers can  use these systems to  make decisions and  gain competitive  advantages  ­ Describe artificial  intelligence, and  ­ identify its five main  ­ Operational decision making ( ​ i.e. first­level  types  managers)­ employees develop, control, and maintain    core business activities required to run the day­to­day  Think about the metrics  operations  when you buy a new car?  ­ Structured decisions­ ​  situations where  ­ Reliability, fuel  established processes offer potential solutions  efficiency, mileage,  ­ Managerial decision making ( ​ i.e. mid­ to­ senior  price, etc.   level)­ employees evaluate company operations to    identify, adapt to, and leverage change    ­ Semistructured decisions​ occur in situations    in which a few established processes help to    evaluate potential solutions, but not enough to    lead to a definite recommended decision    ­ Strategic​ (i.e. CEOs)­ managers develop overall,    strategies, goals, and objectives    ­ Unstructured decisions o ​ ccurs in situations    in which no procedures or rules exist to guide    decision makers toward the correct choice    ­ Metrics: measuring success    ­ Project­  ​ temporary activity a company undertakes to create a unique    product, service, or result    ­ Metrics​­ measurements that evaluate results to determine whether a    project is meeting its goals    ­ Critical success factors (CSFs)​­ the crucial steps companies make    to perform to achieve their goals and objectives and implement    strategies    ­ Create high­quality products    ­ Retain competitive advantages (i.e. Oakland baseball team    uses stats)    ­ Reduce product costs (don’t go below the company’s “bottom    line”)    ­ Increase customer satisfaction (Customer Satisfaction Index)    ­ Hire and retain the best professionals    ­ Key performance indicators (KPIs)​­ the quantifiable metrics a    company uses to evaluate progress toward critical success factors    ­ I.e. turnover rates of employees, number of product returns,  Benchmarking is done when  number of new customers, and average customer spending  the first version of product is  ­ External KPI  created  ­ Market share­ ​  portion of the market a firm captures    ­ Internal KPI    ­ Return on investment (ROI) i​ ndicates the earning  A catalyst causes a company  power of a project  to re­benchmark their  products  ­ Feedback is also  important    ­ ­ Efficiency and effectiveness metrics  ­ Efficiency MIS metrics­ ​  measure the performance of MIS  itself, such as throughput, transaction speed, and system  availability  ­ Effectiveness MIS metrics­ ​  measures the impact MIS has  on business processes and activities, including customer  satisfaction and customer conversation rates  ­ Interrelationship between efficiency and effectiveness metrics  ­   ­ Benchmark­ ​  baseline values the system seeks to  attain  ­ Benchmarking­ ​  process of continuously measuring  system results, comparing those results to optimal  system performance (benchmark values), and  identifying steps and procedures to improve system  performance  ­ Support: enhancing decision making with MIS  ­ Model​­ a simplified representation or abstraction of reality  ­ Models help managers to  ­ Calculate risks  ­ Understand uncertainty  ­ Change variables  ­ Manipulate time to make decisions   ­   ­ Operational support systems  ­ Transaction processing system ( ​ TPS) (i.e. airline  reservations)­ basic business system that serves the  operational and assists in making structured decisions  ­   ­ Online transaction processing  ​ (OLTP) (I.e. Amazon)­  capturing of transaction and event information using  technology to process, store, and update  ­ Source document­ ​  the original transaction record  ­ Managerial support systems  ­ Online analytical processing (OLAP)­ ​  manipulation of  information to create business intelligence in support of  strategic decision making  ­ Decision support system (DSS)­ ​  models information to  support managers and business professionals during the  decision­making process  ­   ­ Four quantitative models used by DSS include  ­ What­if analysis​­ checks the impact of a  change in a variable or assumption on the  model  ­ Sensitivity analysis­  ​ study of impact on other  variables when one variable is changed  repeatedly  ­ Goal­seeking analysis­  ​ finds input necessary  to achieve a goal such as a desired level  output  ­ Optimization analysis​­ extension of  goal­seeking analysis, finds optimal value for a  target variable by repeatedly changing other  variables, subject to specified constraints  ­   ­ Strategic support systems  ­   ­ Executive information system (EIS)­ ​  specialized DSS that  supports senior level executives within the organization  ­ Granularity­ r ​ efers to the level of detail in the model  or the decision­making process  ­ Visualization­ p ​ roduces graphical displays of patterns  and complex relationships in large amounts of data  ­ Digital dashboard­ t ​ racks KPIs and CSFs by  compiling information from multiple sources and  tailoring it to meet user needs  ­   ­ Most EIS offering the following capabilities  ­ Consolidation­ a ​ ggregation of data from  simple roll­ups to complex groupings of  interrelated information  ­ Drill­down­ ​enables users to view details of  information  ­ Slice­and­dice ( ​ i.e. comparing sales by  segments)­ look at information from different  perspectives  ­ The future: artificial intelligence  ­ Artificial information (AI)​­ simulates human intelligence such as the  ability to reason and learn (i.e. Manchester Airport cleaning robot)  ­ Intelligent system​­ various commercial applications of artificial  intelligence  ­ 5 most common AI categories  ­ Expert system­ ​  computerized advisory programs that imitate  the reasoning processes of experts in solving difficult  problems  ­ Neural network­ ​  attempts to emulate the way the human  brain works  ­ Fuzzy logic­ ​  mathematical model of handling  imprecise or subjective information  ­ Genetic algorithm​­ AI system that mimics the evolutionary,  survival­of­the­fittest process to generate increasingly better  solutions to a problem  ­ Shopping bot­ ​  software that will search several  retailer websites and provide a comparison of each  retailer’s offerings including price and availability  ­ Intelligent agent­ ​  special­purpose knowledge­based  information system that accomplishes specific tasks on behalf  of its users   ­ Virtual reality​ (i.e. Google Glass, VR Box)­  computer­simulated environment that can be a simulation of  the real world or an imaginary world  Section 2.2­ Business Processes  ­ Evaluating business processes  ­ Businesses gain a competitive edge when they minimize costs and  streamline business processes    ­ Customer facing process­ r ​ esults in a product or service that’s  received by an organization’s external customer  ­ Business facing process­ i​ nvisible to the external customer but  essential to the effective management of the business  ­   ­ Models: measuring performance  ­ Business processing modeling/mapping­ ​  activity of creating a  detailed flowchart or process map of a work process showing its  inputs, tasks, and activities, in a structured sequence  ­ Business processing model­  ​ graphic description of a process,  showing the sequence of process tasks, which is developed for a  specific purpose  ­ As­Is process model­ r ​ epresents the current state of  operation that has been mapped, without any specific  improvements or changes to existing processes  ­ To­Be process model­ ​  “What do we need to do to improve?”  ­   ­   ­   ­   ­ ­ Support: enhancing business processes with MIS  ­ Workflow​ includes the tasks, activities, and responsibilities required  to execute each step in a business process  ­   ­   ­   ­ Types of change an organization can achieve, along with the  magnitudes of change and the potential business benefit  ­ Improving operational business processes­ automation  ­ Customers are demanding better products and services  ­ Business process improvement­ a ​ ttempts to understand  and measure the current process and make performance  improvements accordingly  ­ Automation­ t ​ he process of computerizing manual tasks  ­ ­ Improving managerial business processes­ streamlining  ­ Streamlining​­ improves business process efficiencies by  simplifying or eliminating unnecessary steps  ­ Bottleneck o ​ ccurs when resources reach full capacity and  cannot handle any additional demands  ­ Redundancy­ ​  task or activity is unnecessarily repeated  ­ Improving managerial business processes­ reengineering  ­ ­ Business process reengineering (BPR)  ­ A company can improve the way it travels the road by  moving from foot to horse and then horse to car  ­ BPR looks at taking a different path, such as an  airplane which ignores the road completely  ­   ­ The future: business process management  ­ Business process management (BPM)­ ​  focuses on evaluating and  improving processes that include both person­to­person workflow  and system­to­system communications    Proctor and Gamble­ measuring ROI  ­ Not used traditionally  ­ Define training, cost  ­ Goal­located model  ­ Reduce costs  ­ Measuring ROI normally: profit  ­ Save $ rather than overall profit  ­ Huge difference in cost savings 


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