Management Support System

Week 1 – Concept of Business

Intelligence, Analytics, and Decision
support
 Learning Objective
At the end of this semester, the student should
be able to:
• Using management support systems method
for structure and unstructured problems
 Sub Topics
• Computerized Decision Support
• Computerized Support for Decision Making
• An Early Framework For Computerized
Decision Support
• A Framework for Business Intelligence
• Business analytics overview
CHANGING BUSINESS ENVIRONMENTS AND
COMPUTERIZED DECISION SUPPORT
 Business Pressures–
Responses–Support Model
• Business Pressures–Responses–Support
Model
– Business pressures result of today's competitive
business climate
– Responses to counter the pressures
– Support to better facilitate the proces
 Business Pressures–
Responses–Support Model

(Sumber: Turban et al, 2014)

 Business Environment
Factor
• The environment in which organizations operate
today is becoming more and more complex,
creating:
– opportunities, and
– problems
– Example: globalization
• Business environment factors:
– markets, consumer demands, technology, and
societal…
 Business Environment
Factor

(Sumber: Turban et al, 2014)

 Organizational Response
• Expectation : Reactive, Anticipative, Adaptive and
Proactive
• What manager do :
– Employ strategic planning
– Use new and innovative business models
– Restructure business processes
– Participate in business alliances
– Improve corporate information systems
– Improve partnership relationships
– Encourage innovation and creative
– Improve customer service and relationships
– Move to electronic commerce (e-commerce)
– Move to make-to-order production and on-demand
manufacturing and services
– Use new IT to improve communication, data access (discovery
of information), and collaboration
– Respond quickly to competitors' actions (e.g., in pricing,
promotions, new products and services)
– Automate many tasks of white-collar employees
– Automate certain decision processes
– Improve decision making by employing analytic
COMPUTERIZED SUPPORT FOR
DECISION MAKING
 Computerized Support
for Decision Making
• Why use computerized decision support systems?
1. Speedy computations
2. Improved communication and collaboration
3. Increased productivity of group members
4. Improved data management
5. Managing giant data warehouses
6. Quality support
7. Agility support
8. Overcoming cognitive limits in processing and storing information
9. Using the Web: the web changed how decision makers are
supported.
10. Anywhere, anytime support: using wireless technology
 AN EARLY FRAMEWORK FOR
COMPUTERIZED DECISION SUPPORT
 Decision Support
Framework
(by Gory and Scott-Morten,1971)

(Sumber: Turban et al, 2014)

• Degree of Structuredness (Simon, 1977)
– Decision are classified as
• Highly structured (a.k.a. programmed) : routine and typically
repetitive problems for which standard solution exist.
• Semi-structured : fall between structured and unstructured
problems. Such as setting marketing budget for customer
product
• Highly unstructured (i.e., non-programmed) :complex
problems for which there are no cut-and-dried solution
methods.
• Types of Control (Anthony, 1965)
– Strategic planning (top-level, long-range)
– Management control (tactical planning)
– Operational control
 The decision Support
Matrix
• The initial purpose of this matrix was to
suggest different types of computerized
support to different cells in the matrix.
 Computer Support for
Structured Decision
• Structured problems: encountered repeatedly,
have a high level of structure
• It is possible to abstract, analyze, and classify
them into specific categories
– e.g., make-or-buy decisions, capital budgeting,
resource allocation, distribution, procurement, and
inventory control
• For each category a solution approach is
developed => Management Science
 Computer Support for
Unstructured Decision
• Unstructured problems can be only partially
supported by standard computerized quantitative
methods.
• Often require customized solutions
• They benefit from data and information
• Intuition and judgment may play a role
• Computerized communication and collaboration
technologies along with knowledge management is
often used
 Computer Support for
Semi-structured Decision
• Solving semi-structured problems may
involve a combination of standard solution
procedures and human judgment
• MS handles the structured parts while DSS
deals with the unstructured parts
• With proper data and information, a range of
alternative solutions, along with their
potential impacts
AN FRAMEWORK FOR BUSINESS
INTELIGENCE (BI)
 Concept of BI
• BI is an umbrella term that combines
architectures, tools, databases, analytical tools,
applications, and methodologies
• BI's major objective is to enable easy access to
data (and models) to provide business managers
with the ability to conduct analysis
• The process of BI is based on the transformation
of data to information, then to decisions, and
finally to actions.
 Evolution of BI

(Sumber: Turban et al, 2014)

 BI Architecture
4 major component of BI are :
– a data warehouse, with its source data
Its responsibility of technical staff
– business analytics, a collection of tools for
manipulating, mining, and analyzing the data in the
data warehouse;
– business performance management (BPM) for
monitoring and analyzing performance. Its use by top
manager.
– a user interface (e.g., dashboard)
A High-Level Architecture
of Business Intelegence

(Sumber: Turban et al, 2014)

 Style of Business
Inteligence
• MicroStrategy, Corp. distinguishes five styles of
BI and offers tools for each
1. report delivery and alerting
2. enterprise reporting (using dashboards and
scorecards)
3. cube analysis (also known as slice-and-dice
analysis)
4. ad-hoc queries
5. statistics and data mining
 BI Business Value

(Sumber: Turban et al, 2014)

 DSS and BI Connection
1. The architecture is very similar since BI evolved
from DSS
2. DSS directly support specific decision making,
while BI provides accurate and timely
information, and indirectly support decision
making
3. BI has an executive and strategy orientation,
especially in its BPM and dashboard components,
while DSS, in contrast, is oriented toward analysts
 DSS and BI Connection
(cont)
4. Most BI systems are constructed with
commercially available tools and components,
while DSS is often built from scratch.
5. DSS methodologies and even some tools were
developed mostly in the academic world,
while BI methodologies and tools were
developed mostly by software companies
 DSS and BI Connection
(cont)
6. many of the tools that BI uses are also
considered DSS tools (e.g., data mining and
predictive analysis are core tools in both)
BUSINESS ANALYTIC OVERVIEW
 3 Types of Analitics

(Sumber: Turban et al, 2014)

 References
• Turban, Efraim, Sharda, Ramesh, & Delen,
Dursun. (2014). Decision Support and
Business Intelligence Systems. 9th Edition.
Pearson. United States of America. ISBN: 1-
292-02426-7 or 978-1-292-02426-4
Thank You