1.

Decision Making and Information Systems

Each of us makes hundreds of decisions every day. If just a fraction of those decisions could be improved
through better and more information and better processes, we'd all be delighted. Businesses feel the
same way. Customers would be happier, employees would be more motivated, and managers would
have an easier job. Most of all, businesses could improve their profitability to the benefit of all.

Business Value of Improved Decision Making

Table 4.1 provides a few examples of the dollar value that enhanced decision making would give to
firms.

Table 4.1: Business Value of Enhanced Decision Making

Do not be misled into thinking that an improved decision-making process's dollar value is limited to
managers. As more businesses flatten their organizational structures and push decision making to lower
levels, better decisions at all levels can lead to increased business value.

Types of Decisions

 The three classifications of decisions are closely tied to the levels of management in an organization:

 
  Unstructured: requires judgment, evaluation, and insight into non-routine situations. Usually
made at senior management levels where decisions are based on internal business information
and often external industry and social changes; decisions affect long-term and strategic goals
and the firm's objectives.

 Structured: repetitive, routine, with definite procedures for making the decision. Usually made
at the operational management level and by project teams. These decisions affect subunits and
individual employees regarding the resources, schedules, and personnel decisions for specific
projects. Individual employees may also make structured decisions that affect specific vendors,
other employees, and most importantly, the customer.

 Semistructured: A combination of the two. These decisions are usually made by middle
managers and affect resource allocation, short-range plans, and the performance of specific
departments, task forces, teams, and special project groups

The Decision-Making Process

The book by Laudon and Laudon describes the four stages of decision making:

 Intelligence: discovering, identifying, and understanding the problem

 Design: identifying and exploring solutions to the problem

 Choice: choosing among solution alternatives

 Implementation: making the chosen alternative work and monitoring how well the solution is
workin

These four stages are not always consecutive and may well be concurrent or repetitive.

High-Velocity Automated Decision Making

What if your friend asked you to find a copy of the lyrics to the Beatles hit song "Hey Jude?" How long
do you think it would take you if Internet-based search processes were not available? Days? Weeks? A
Google search for the information takes less than five seconds. That is the power of high-velocity
automated decision making in today's world. Humans simply cannot match a computer's speed and
accuracy for making some decisions.

Computer programmers use the same four-step decision-making process we have discussed before
when they create algorithms that help make these kinds of lightning-fast decisions: identify the
problem, design a method for finding a solution, define a range of acceptable solutions, and implement
the solution. They just have to be careful that the algorithms are written correctly to ensure computers
make proper decisions, or you may end up getting a profile of Jude Law, the actor.

Quality of Decisions and Decision Making

 

The title of this topic refers to improved decision making. Whether a decision is better is often a
judgment call. Table 4.2 in the book provides you six dimensions by which you can decide if decisions
are better, worse, or about the same. Are decisions accurate, comprehensive, fair, quick and efficient,
coherent, and follow due process? As information systems expand to help us make decisions, the speed
dimension is quite often the most important.

Table 4.2: Qualities of Decisions and the Decision-Making Process 

Bottom Line:

Everyone makes decisions at all levels of an organization. The goal is to match the four decision-
making organizational levels and the three types of decisions to the appropriate kind of decision
support system. Well-built decision support systems help managers and employees make better
decisions by increasing the quality of decisions.

2. Business Intelligence in the Enterprise

Business intelligence and business analytics provide managers with a systematic way of making sense of
the vast amounts of data collected on customers, suppliers, employees, business partners, and the
external business environment.

 What Is Business Intelligence?

All of us collect information from our surroundings, try to understand it, and then act on it intelligently.
Businesses are no different from the fact that they have much more data to collect, process, store, and
disseminate.

 
A whole new industry has sprung up that helps businesses create an infrastructure to warehouse,
integrate, report, and analyze data. This is where the databases, data warehouses, and data marts that
we discussed in the previous topic come back into the picture. Business intelligence describes how
businesses collect, store, clean, and disseminate useful information to executives, managers, and
employees.

On the other hand, business analytics are the tools and techniques businesses use to analyze and
understand the data in a meaningful way. It is one thing to read a report that says sales are ten percent
ahead of last year. Business analytic tools, such as data mining, help managers understand that part of
the cause is an increased focus on marketing to middle-aged women with two children

The Business Intelligence Environment

Let us review six hardware, software, and management capabilities that are included in the business
intelligence environment:

 Data from the business environment: integrating and organizing structured and unstructured
data from different sources that people can analyze and use

 Business intelligence infrastructure: database systems that process relevant data stored in

transactional databases, data warehouses, or data marts

 Business analytics toolset: software tools that managers use to analyze data, produce reports,
respond to questions, and track their progress using key performance indicators (KPI)

 Managerial users and methods: business performance management and balanced scorecard

methods that help managers focus on key performance indicators and industry strategic
analyses. Requires strong executive oversight to ensure managers are focusing on the right
issues and not just producing reports and dashboard screens because they can.

 Delivery platform—MIS, DSS, ESS: all the information from MIS, DSS, and ESS are integrated and
delivered to the appropriate level of management

 User interface: BI and BA systems make it easy to visually display data, thereby making it easy to
understand information on a variety of computing devices quickly

Figure 4.1 helps you understand how these six elements work together in business intelligence and
business analytics systems.

 
Figure 4.1: Business Intelligence and Analytics for Decision Support

Business Intelligence and Analytics Capabilities

The days of receiving static reports that are out of date—meaning more than 30 days or even 30
minutes old—containing meaningless data are over. Business intelligence systems help correct that
situation in five different ways:

 Production reports: predefined reports based on industry-specific requirements.

 Parameterized reports: pivot tables help users filter data and isolate impacts of parameters
chosen by users.

 Dashboards/scorecards: visual reports that present performance data chosen by users.

 Ad hoc query/search/report creation: users create their own reports based on the data they
choose.

 Drill down: users initially receive high-level data summaries and then drill down to more specific
data.

 Forecasts, scenarios, models: user can perform linear forecasting, what-if scenario analysis, and
analyze data using standard statistical tools.

Table 4.3 below gives you examples of predefined production reports commonly found in many
businesses.
 

Table 4.3: Examples of Business Intelligence Pre-Defined Production Reports

Predictive Analytics

Most times, customer behavior is very predictable if you are looking at and understanding the right
data. Companies use business analytic software to figure out ahead of time how reliable certain
customers are regarding credit extensions, how customers will respond to changes in prices or services,
or how successful new sales locations will be. Those are the kinds of questions predictive analytics can
answer more quickly and more easily than humans. Predictive analytics helps managers ask and answer
the right questions to make their company more successful.

Over the last few years, many retailers have drastically reduced the number of catalogs they send in
snail mail to potential customers. With rising postal fees and many people using the Internet to make
purchases, fewer and fewer are waiting for the mail catalog. Using predictive analytics, companies can
weed out people who are unlikely to make catalog purchases and concentrate on those who will. That
decreases marketing costs while increasing the ratio of catalogs to purchasing customers.

Big Data Analytic

You are shopping on a major retailer's Web site when, all of a sudden, you see a sweater that you simply
cannot live without. Alongside the sweater's display are pictures of a pair of pants or skirt that,
combined, will make the perfect outfit. The pants and skirt are labeled, "You might also like …" or "What
other customers purchased when they purchased this sweater…."

Those extra items were not put there by chance but more due to big data analytics that we discussed in
earlier topics. Rather than requiring you to thumb through pages and pages of skirts and pants, the
retailer will do it for you and, in the meantime, increase the chances of making an extra sale. Those
recommendations likely are a result of what other customers purchased. The retailer captures all of its
sales data, analyzes it, and includes data from social media streams to create the customized
recommendations.
Location Analytics and Geographic Information Systems (GIS)

Many executive decisions depend on the availability of information, internal and external. For instance,
a company that ships most of its products on trucks needs data about interstate highway access and
traffic patterns to help control shipping costs and make it easier for drivers to access its warehouses.
Some company policies limit business locations to high-traffic areas such as malls and similar densely
populated areas. Other executive decisions revolve around data about current and potential customers
and their geographic location.

Location analytics enable companies to gain insight from the location component of data, including data
from mobile phones, wireless sensors, scanning devices, location-based cameras, and maps. The data
may help businesses solve problems, attract more customers, or improve services.

Geographic information systems (GIS) rely heavily on demographic data from the U.S. Census Bureau.
This type of decision-support system helps managers visualize geographic information more easily and
make better decisions based on digitized maps. GIS data can be coupled with an organization's internal
data to allocate better resources, money, people, time, and material.

Business Intelligence Users

The audience for business intelligence and business analytic tools and techniques has unique
characteristics depending on their management level and how they use the systems:

 Casual users: rely largely on production reports

 Senior executives: monitor organization activities using dashboards and scorecards

 Middle managers and analysts: enter queries; slice and dice data along different dimensions

 Operational employees, customers, suppliers: mostly use prepackaged reports

Figure 4.2 tells you how each division of the business intelligence audience uses the capabilities of these
systems.
 

Figure 4.2: Business Intelligence Users

Support for Semistructured Decisions

Decision-support systems help executives make better decisions by using historical and current data
from internal information systems and external data sources. Combining massive amounts of data with
sophisticated analytical models and tools, and making the system easy-to-use, provide a much better
source of information to use in the decision-making process.

Because of the limitations of hardware and software, early DSS systems provided executives only limited
help. With the increased power of computer hardware and the sophisticated software available today,
DSS can crunch lots more data, in less time, in greater detail, with easy-to-use interfaces. The more
detailed data and information executives have to work with, the better their decisions can be.

The "what-if" decisions most commonly made by executives use sensitivity analysis models to help
them predict what effect the decisions will have on the organization. Executives do not make decisions
based solely on intuition. The more information they have, the more they experiment with different
outcomes in a safe mode, the better their decisions. That is the benefit of the models used in the
software tools.

Common spreadsheet software such as Microsoft's Excel helps managers review data in two dimensions
rather than just one using pivot tables. They can decipher patterns in the information and help them
allocate resources better. Managers using pivot tables can develop better strategies because they will
gain a better sense of correlating data points. Figure 4.3 shows you a typical screen used in a Microsoft
Excel pivot table.

 
Figure 4.3: A Pivot Table that Examines Customer Regional Distribution and Advertising Source

Decision Support for Senior Management: Balanced Scorecard and Enterprise Performance
Management

Executive support systems (ESS) are used primarily by senior management whose decisions are usually
never structured and could be described as "educated guesses." Executives rely as much, if not more, on
external data than they do on data internal to their organization. Decisions must be made in the context
of the world outside the organization. The problems and situations senior executives face are very fluid,
so the system must be flexible and easy to manipulate.

Executive support systems do not provide executives with ready-made decisions. They provide the
information that helps them make their decisions. Executives use that information, along with their
experience, knowledge, education, and understanding of the corporation and the business environment
as a whole, to make their decisions.

Using a balanced scorecard method, executives combine their company's internal financial

information with additional perspectives such as customers, internal business processes, and learning
and growth. By focusing on key performance indicators (KPIs) in each of these areas, executives gain a
better understanding of how the organization is performing overall. After senior management
establishes KPIs for each area, then and only then can the flow of information be established. Figure 4.4
depicts the framework for a balanced scorecard.

Figure 4.4: The Balanced Scorecard Framework

Business performance management (BPM) is yet another tool for executives to systematically translate
the strategy they have developed for their company into operational targets. BPM methods use KPIs to
help users measure the organization's progress toward the targets. BPM is similar to the balanced
scorecard approach but with a stronger strategic viewpoint than an operational viewpoint.

Executives often face information overload and must be able to separate the chaff from the wheat in
order to make the right decision. On the other hand, if the information they have is not detailed enough,
they may not be able to make the best decision. An ESS can supply the summarized information
executives need and yet provide the opportunity to drill down to more detail if necessary.

As technology advances, ESSs can link data from various internal and external sources to provide the
amount and kind of information executives find useful. As common software programs include more
options and executives gain experience using these programs, they turn to them as an easy way to
manipulate information.

Because of the trend toward flatter organizations with fewer layers of management, companies are
employing ESS at lower levels of the organization. Flatter organizations also require managers to access
more information about a wider range of activities than in the past. This requirement can be
accomplished with the aid of a good ESS. Executives can also monitor the performance of their own
areas and of the company as a whole.
Group Decision-Support Systems (GDSS)

You have been there: a meeting where nothing seemed to get done, where some people dominated the
agenda and others never said a word, and it dragged on for hours. When it was all over, no one was sure
what was accomplished, if anything. But the doughnuts and coffee were good!

More and more, companies are turning to groups and teams to get work done. Hours upon hours are
spent in meetings, in group collaboration, in communicating with many people. To help groups make
decisions, a new category of systems was developed: the group decision-support system (GDSS).

In a GDSS, the hardware includes more than just computers and peripheral equipment. It also includes
the conference facilities, audiovisual equipment, and networking equipment that connect everyone.
Meeting facilitators and staff may be necessary to keep the hardware operating correctly. As the
hardware becomes more sophisticated and widely available, many companies bypass specially equipped
rooms in favor of having the group participants "attend" the meeting through their individual desktop
computers.

Many of the software tools and programs discussed in previous chapters can also be used to support
GDSS. Some of these software tools are being reworked to allow people to attend meetings through
intranets or extranets.

Instead of wasting time in meetings, people will know ahead of time what is on the agenda. All of the
information generated during the meeting is maintained for future use and reference. Because the input
is anonymous, ideas are evaluated on their own merit. Moreover, for geographically separated
attendees, travel time and dollars are saved. Electronic meeting systems make these efficiencies
possible.

All is not perfect with GDSS, however. Face-to-face communication is critical for managers and others to
gain insight into how people feel about ideas and topics. Body language can often speak louder than
words. Some people still may not contribute freely because they know that all input is stored on the file
server, even though it is anonymous. Furthermore, the system itself imposes disciplines on the group
that they may not like.

Bottom Line:

Business intelligence systems meet organizational needs by integrating all the information streams
into a single, coherent enterprise-wide set of data. Modeling, statistical analysis, and data mining
tools help managers make sense of the data and help all employees make more effective decisions.
Dashboards must be flexible, easy-to-use, and contain both internal and external sources of
information. Using group decision-support systems, comprised of hardware, software, and people,
helps streamline group meetings and communications by removing obstacles and using technology to
increase the effectiveness of the decisions.
3. Intelligent Systems for Decision Support

Many people believe that artificial intelligence (AI) is all about computers taking over the world and
turning on their human inventors. That is not true; they cannot replace humans. Many of the systems
under the AI umbrella are useful tools for capturing, storing, and disseminating human knowledge and
intelligence. Intelligent techniques include expert systems, neural networks, and genetic algorithms, to
name a few.

Expert Systems

Expert systems are a common form of artificial intelligence. They are used to assist humans in the
decision-making process, but they do not replace humans. Many of the decisions we make are based on
past experience, but we have the added benefit of reasoning and intuition. Expert systems ask
questions, then give you advice and reasons why you should take a certain course of action based on
hard data, not on hunches. Again, they do not make the final decision.

Most of the problems an expert system helps resolve can, in fact, be solved by a human. But because
the computer is faster or safer, businesses choose to use them instead of a person.

How Expert Systems Work

Expert systems rely on a knowledge base built by humans based on their experiences and knowledge.
The base requires rules and knowledge frames in which it can process data. When you think about it,
humans work the same way. You look out the window to see if it is raining. If it is, then you grab your
umbrella. If it is not raining, then you do not. There you have it, a rule base.

Yes, we used a very simplified example. Most expert systems require thousands of rules and frames in
which to operate in a rule-based expert system. The knowledge must be specific. In the example above,
you would not take any action if the only information you had was "It rains 350 days a year in the
Amazon rain forest." Neither would an expert system.

The AI shell (the programming environment of an expert system) uses rules, frames, and an inference
engine to accomplish its tasks. The inference engine moves through the rules and frames until it finds an
appropriate one and then uses it.

If you understand that expert systems can only do so much, you will be just fine. If you understand that
they are not people with the powers of reasoning and intuition, and therefore they cannot make every
decision, you will know when to override the system and when to go with its output. Remember that
everything in an expert system is based on IF this, THEN that. We know not everything is black and
white, and there are many gray areas.

Case-Based Reasoning
 

So far, we have concentrated on capturing individual knowledge in an expert system. Through practical
experience, you have realized that "two heads are better than one." Very seldom will only one individual
work on a project. Alternatively, perhaps one individual works on the candy bar ad campaign while
another works on the breakfast cereal campaign. They have different and yet similar experiences. What
if you could tap into each person's experience and knowledge on a collective basis? Take the best of the
best from each one and apply it to your needs. Then you give your knowledge to someone else who will
combine it with knowledge from others and continue building on "the best of the best." That is what
a case-based reasoning (CBR) system does best.

The Help files you find in most desktop software applications are built on a case-based reasoning model.
The technical support staff combines thousands of customer queries into a single database of problems
and solutions and refines that information into a series of IF this is the problem, THEN try this. Access
the Help files in your desktop software and try it. Figure 4.5 gives you an excellent overview of how a
case-based reasoning system works.

Figure 4.5: How Case-Based Reasoning Works

 
 

Fuzzy Logic Systems

Okay, one more time, back to our umbrella. If it is only cloudy outside, how do you know whether to
take the umbrella? "It depends on how cloudy it is," you say. If it looks like rain, you know to take the
umbrella; there is a strong possibility that it will pour buckets. If it is only a little cloudy and does
not look like rain, you will take the chance that you will not get wet and leave the umbrella at home.
That is fuzzy logic!

Fuzzy logic, a relatively new rule-based advance in AI, is based on approximate values and ambiguous
data. A fuzzy logic system will combine various data into a range of possibilities and then help solve
problems that we could not solve before with computers.

Neural Networks

This type of knowledge system is as close to emulating the human ability to learn as we have been able
to come. Let us return to our umbrella example. How do you know to take an umbrella when it is
raining? You probably got wet a few times without one. Then you tried using one when it rained and
discovered that you did not get wet. You learned that when it rains, an umbrella will keep you dry. That
is basically how neural networks work.

You give a neural network data for which you already know the output so that it has a base of correct
information upon which it can build. When you give it new, different data, the computer will compare it
with the previous data to determine what the correct outcome of the situation should be. If the data do
not fit, it figures out why. It adds that information to its current database of knowledge and then keeps
taking in more data. It eventually learns the right outcome. The more data it takes in, and the more
situations it gets right, the better it becomes at knowing the right answer to the next set of decisions.

Figure 4.6 shows how a neural network operates.

Figure 4.6: How a Neural Network Works

 
The Difference Between Neural Networks and Expert Systems

 Expert systems emulate human decision-making.

 Neural networks learn human thought processes and reasoning patterns.

 Expert systems use rules and frames in which to make their decisions.

 Neural networks adjust to inputs and outputs.

 Expert systems require humans to update their database of information.

 Neural networks continue to expand their own base of information.

Another type of neural network that's gaining popularity is based on machine learning. Computers
formulate information by extracting rules and patterns from massive databases. Machine learning
makes active use of data-mining techniques by using computation and statistical methods.

Genetic Algorithms

We have evolved as a human race through genetics. We are made up of many combinations of
generations of humans. That is how genetic algorithms work. The system examines solutions to
problems. The best solution is retained for future use, whereas the worst solutions are discarded. The
solutions that are retained are used to help provide better solutions to future problems. They are
combined and changed the next time they are used.

Businesses often need to solve problems that are dynamic, complex, and have many variables. Very few
problems are clear-cut, black-and-white. Genetic algorithms are good systems for businesses to use
because it is almost like having millions of people coming at a problem from all directions.

Intelligent Agents

Jump on the Web and find the best price for computer printer supplies. Simply typing the words
"computer printer supplies" into your favorite search engine will result in thousands of pages with more
than just price information. You can find specific information on prices much faster using an intelligent
agent. These software programs learn your personal preferences to accomplish simple tasks and take
the drudgery out of repetitive, specific work. Figure 4.7 demonstrates intelligent agent technology at
work in P&G's supply-chain network.

 
Figure 4.7: Intelligent Agents in P&G's Supply-Chain Network

Businesses can use intelligent agents to help train users on new systems, schedule appointments, or
monitor work in progress. By far, though, the most popular use of this nifty little software program is as
a "shopping agent" that surfs the Web for you looking for specific items to purchase or the lowest prices
on a particular item.

If you would like to try a shopping bot yourself, try http://www.mysimon.com. The Web site explains its
service this way "Our secret is a team of helpers built with patent-pending software. The Virtual
Learning Agentä technology creates 'intelligent agents' trained by our own team of shopping experts to
collect information from any online store." It is fun and fast.

Bottom Line:

Businesses are interested in artificial intelligence to preserve their employees' intelligence and
knowledge and use it to their competitive advantage. Expert systems emulate humans in the decision-
making process but cannot replicate the intuition and reasoning that still require the human touch.
Many new technologies can help humans solve difficult problems or take advantage of new
opportunities. Neural networks learn how to make decisions. Fuzzy logic uses ranges of possibilities
instead of giving black-and-white, yes–no answers. Intelligent agents take much of the drudgery out
of searching dozens of Web sites.

4. Systems for Managing Knowledge

Creating and using knowledge is not limited to information-based companies; it is necessary for all
organizations, regardless of industry sector. It is not enough to make good products. Companies must
make products that are better, less expensive to produce, and more desirable than those of
competitors'. Using corporate and individual knowledge assets wisely will help companies do that.

Looking back at all your computer classes before, you may have known by now the difference between
computer literacy and information literacy. It should be pointed out that there is more to information
than just bits and bytes. The next step up from information literacy is knowledge. An organization must
transform the information it gathers and put it into meaningful concepts that give it insight into ways of
improving the environment for its employees, suppliers, and customers. Organizations must
employ knowledge management concepts in the same manner as they manage all other resources.

Enterprise-Wide Knowledge Management Systems

Knowledge exists throughout the enterprise in three basic forms:

 Structured text documents such as reports and PowerPoint presentations

 Semistructured such as emails, brochures, pictures, and graphics

 Tacit knowledge that resides inside people's minds and is mostly undocumented

The goal of enterprise-wide knowledge management systems is to capture these three kinds of
knowledge as much as possible. Once it is captured, the system must provide an easy way to store the
knowledge, make it accessible to all employees, and allow them to apply it to any situation.

Enterprise Content Management Systems

With so many sources of information and knowledge available, how does an organization collect, store,
distribute, and apply all of it? That is what we will investigate in this section.

Traditionally, knowledge was not considered a corporate resource. Many systems were built without the
necessary infrastructure for gathering, storing, and retrieving knowledge. That started changing in the
late 1980s and early 1990s when companies started realizing how much knowledge was lying dormant
in text documents and reports. The structured knowledge systems were the first attempts to capture
this type of knowledge and make it easily available to a wider range of people inside the organization.

Corporations have realized over the years that most problems or situations are not entirely brand-new
to the organization. Rather, they are mutations of previously experienced difficulties. By
creating enterprise content management systems, employees old and new can research how the
problem was solved before and capture best practices that can be adapted to the current situation. That
saves time, money, and frustration. It also allows the corporation to glean the best information and re-
use it instead of creating brand-new solutions every time.

For those firms whose knowledge is contained in objects other than simple documents, digital asset
managements systems help them collect, store, and process knowledge contained in photographs,
graphic images, videos, and audio files.

Knowledge Network Systems

Because it is simply too expensive and too time-consuming to reinvent the wheel continually,
corporations are turning to knowledge networks in an attempt to link those who hold the knowledge
with those that need the knowledge. Employees who have tacit knowledge about a product or project in
their head are easily connected through these kinds of networks with employees who need to know the
information. Corporations save time and money by placing data pertaining to the subject matter experts
in a directory that all employees can access. Users are easily connected to the experts through these
networks and can communicate and collaborate on various subjects. Knowledge networks then are not
a nice-to-have system but a must-have if companies want to reduce costs and maximize profits.

Collaboration Tools and Learning Management Systems

If you thought that blogs, wikis, and social networking sites were only for kids or twenty-somethings that
want to gossip and share their innermost thoughts and feelings, you would be wrong. Companies are
discovering the power of using these tools for collaboration among and between employees—especially
teams, customers, suppliers, and business partners. They are easy to use and often do not require any
help from the IT staff to set up or support. And they sure are easier to search and organize than
thousands and thousands of emails.

As you surf through the Web and find news articles, videos, pictures, or soundtracks that you want to
track or share with others, you can use social bookmarking techniques to tag the information with
keywords. You store the shared bookmarks in folksonomies so that your friends or co-workers can easily
find the bookmarks.

Because business processes and work methods are constantly changing, organizations must devise ways
to make learning less expensive and easier to deliver. By using a learning management system to
provide the necessary tools for delivering, tracking, and assessing employee learning, companies can
reduce costs and ensure employees receive the right training at the right time. A company can make
these systems even more productive if used in conjunction with Web-based multimedia systems.
Regardless of where the employee and educator are located, they can collaborate together whenever
necessary.

Businesses are tapping into various learning sources for their employees, including massive open online
courses (MOOCs). MOOCs are easily accessed through the Internet and the Web and provide a greater
variety of courses to choose from than perhaps local sources can provide. The MOOCs can be tailored to
an individual company or can be available to many people. In many cases, those taking the courses can
attend class on their individual schedules improving their probability of completing the course.

 
Knowledge Work Systems

New corporate knowledge is being discovered every day. Products and processes are continually being
invented or reinvented by a multitude of employees. Knowledge work systems help employees capture
the knowledge as it is being created and integrate it into the business.

Requirements of Knowledge Work Systems

A KWS must provide knowledge workers with the following necessary tools:

 Graphics tools

 Analytical tools

 Communication tools

 Document management tools

 User-friendly interface

Figure 4.8 shows the required elements of a KWS.

Figure 4.8: Requirements of Knowledge Work System

Examples of Knowledge Work Systems

Pick up any business or technology magazine, or watch the news channels and you will find numerous
examples of how companies are using knowledge work systems to re-create their core processes, create
new products or services, or improve old ones.

Design engineers use Computer-aided design (CAD) applications to build new products or improve old
ones. It used to take three to four years and millions of dollars to design a new car. With improved CAD
systems, automobile manufacturers have reduced the time to 18–24 months and cut the cost by millions
of dollars.

Virtual reality systems have sophisticated imagery that makes you feel like you are "right there!" You
may have seen this system on TV shows or in the movies. You are usually required to wear special
equipment that feeds your reactions back to the computer so that it can plan its responses to your
input.

Augmented reality allows you to keep one foot in the real world and put one foot in an enhanced
computer-generated imagery world. If you have ever watched a professional football game, you have
experienced augmented reality. You know, that yellow line across the field that shows you where the
team has to get to for a first down. With every set of downs, the augmented reality line moves to a
different location. It is so real some people are surprised that it only appears on televised broadcasts of
football games. Marketers are especially enamored with the idea of interacting with customers in new
and different ways. The technology has a bright future as people become more used to the idea that
they can experience a myriad of services in new, more fun, and better ways.

VRML (Virtual Reality Modeling Language) is a set of specifications for interactive 3-D modeling on the
Web. Many companies are putting their training systems right on the Internet to have access to the
latest information and use it when they need it. Some Web sites use Java applets to help process the
programs on the local workstation.

How would you like to make investment decisions based on information that is 90 days old or older?
Would you have very much faith in a system that told you only how the company did financially last
year, or would you also like to know how the company performed last quarter? That is the idea
behind investment workstations. They combine information about internal and external companies,
new and old, to advise clients on the best use of their investment dollars. The amount of data is massive
and must be processed quickly to keep up with the changing market conditions and the changing nature
of the industries themselves.

Bottom Line:

Information and knowledge are key business assets that must be nurtured, protected, grown, and
managed for the entire organization's benefit. Enterprise-wide knowledge management systems
capture structured, semistructured, and tacit knowledge, making it available throughout the
organization. Knowledge work systems create and manage knowledge using computer-aided design
systems, virtual reality systems, and VRML.