Tuesday, 10 September 2013

Chapter Nine: Enabling the Organization - Decision Making

There are reason for growth of decision making information system :
  • people need to analyze large amount of information
  • people must make decision quickly
  • people must apply sophisticated analysis technique
  • people must protect corporate asset of organizational  information

Transaction Processing System

Moving up thru organizational pyramid users move from requiring transactional information to analytical information.

Decision Support System
Model information to support managers & business professionals during the decision-making process.

DSS used three quantitative models that are :- sensitivity analysis, what-if analysis and goal seeking analysis.

Interaction between DSS and TPS 


Executive Information System (EIS: a specialized DSS that supports senior level executives within the organization.

EIS offering capabilities :
1. consolidation
2. drill down
3. slice-and-dice


Interaction between TPS and EIS

Digital dashboard

~integrates info from multiple components and presents it in unified display 

example of dashboard

Artificial Intelligence (AI)
*ultimate goal is ability to build a system that can mimic human intelligence

*intelligent system - various commercial applications of artificial intelligence

*artificial intelligence - simulates human intelligence such as ability to reason and learn

Monday, 9 September 2013

Chapter Seven: Storing Organizational Information

Information is stored in databases

Database – maintains information about various types of objects (inventory), events (transactions), people (employees), and places (warehouses)

Database models include: 

Hierarchical database model – information is organized into a tree-like structure (using parent/child relationships) in such a way that it cannot have too many relationships

Network database model – a flexible way of representing objects and their relationships Relational database model – stores information in the form of logically related two-dimensional tables

Entity – a person, place, thing, transaction, or event about which information is stored
The rows in each table contain the entities
In Figure 7.1 CUSTOMER includes Dave’s Sub Shop and Pizza Palace entities

Attributes (fields, columns) – characteristics or properties of an entity class
The columns in each table contain the attributes
In Figure 7.1 attributes for CUSTOMER include Customer ID, Customer Name, Contact Name
Primary keys and foreign keys identify the various entity classes (tables) in the database.

Primary key – a field (or group of fields) that uniquely identifies a given entity in a table
Foreign key – a primary key of one table that appears an attribute in another table and acts to provide a logical relationship among the two tables

Database advantages from a business perspective include 

  • Increased flexibility
  • Increased scalability and performance
  • Reduced information redundancy
  • Increased information integrity (quality)
  • Increased information security

Increased flexibility

  • A well-designed database should:
  • Handle changes quickly and easily
  • Provide users with different views
  • Have only one physical view
  • Physical view – deals with the physical storage of information on a storage device
  • Have multiple logical views
  • Logical view – focuses on how users logically access information

Increased scalability and performance

A database must scale to meet increased demand, while maintaining acceptable performance levels
Scalability – refers to how well a system can adapt to increased demands
Performance – measures how quickly a system performs a certain process or transaction

Reduced information redundancy
Databases reduce information redundancy
Redundancy – the duplication of information or storing the same information in multiple places

Inconsistency is one of the primary problems with redundant information

Increase Information Integrity (Quality)

Information integrity – measures the quality of information

Integrity constraint – rules that help ensure the quality of information
Relational integrity constraint
Business-critical integrity constraint

Increased information security
Information is an organizational asset and must be protected

Databases offer several security features including:
Password – provides authentication of the user
Access level – determines who has access to the different types of information
Access control – determines types of user access, such as read-only access

Database Management Systems

Direct interaction –
The user interacts directly with the DBMS
The DBMS obtains the information from the database
Indirect interaction
User interacts with an application (i.e., payroll application, manufacturing application, sales application)
The application interacts with the DBMS
The DBMS obtains the information from the database

data-driven Web site is an interactive Web site kept constantly updated and relevant to the needs of its customers through the use of a database. Data-driven Web sites are especially useful when the site offers a great deal of information, products, or services. Web site visitors are frequently angered if they are buried under an avalanche of information when searching a Web site. A data-driven Web site invites visitors to select and view what they are interested in by inserting a query, which the Web site then analyzes and custom builds a Web page in real-time that satisfies the query. The figure displays a Wikipedia user querying business intelligence and the database sending back the appropriate Web page that satisfies the user’s request.

Data Driven Web Site Advantages

Development: Allows the Web site owner to make changes any time—all without having to rely on a developer or knowing HTML programming. A well-structured, data-driven Web site enables updating with little or no training.

Content management: A static Web site requires a programmer to make updates. This adds an unnecessary layer between the business and its Web content, which can lead to misunderstandings and slow turnarounds for desired changes.

Future expandability: Having a data-driven Web site enables the site to grow faster than would be possible with a static site.  Changing the layout, displays, and functionality of the site (adding more features and sections) is easier with a data-driven solution.

Minimizing human error: Even the most competent programmer charged with the task of maintaining many pages will overlook things and make mistakes. This will lead to bugs and inconsistencies that can be time consuming and expensive to track down and fix. Unfortunately, users who come across these bugs will likely become irritated and may leave the site. A well-designed, data-driven Web site will have ”error trapping” mechanisms to ensure that required information is filled out correctly and that content is entered and displayed in its correct format.

Cutting production and update costs: A data-driven Web site can be updated and ”published” by any competent data entry or administrative person. In addition to being convenient and more affordable, changes and updates will take a fraction of the time that they would with a static site. While training a competent programmer can take months or even years, training a data entry person can be done in 30 to 60 minutes.

More efficient: By their very nature, computers are excellent at keeping volumes of information intact. With a data-driven solution, the system keeps track of the templates, so users do not have to. Global changes to layout, navigation, or site structure would need to be programmed only once, in one place, and the site itself will take care of propagating those changes to the appropriate pages and areas. A data-driven infrastructure will improve the reliability and stability of a Web site, while greatly reducing the chance of ”breaking” some part of the site when adding new areas.

Improved Stability: Any programmer who has to update a Web site from ”static” templates must be very organized to keep track of all the source files. If a programmer leaves unexpectedly, it could involve re-creating existing work if those source files cannot be found. Plus, if there were any changes to the templates, the new programmer must be careful to use only the latest version. With a data-driven Web site, there is peace of mind, knowing the content is never lost—even if your programmer is.

Integrating Information
among Multiple Databases

Integration – allows separate systems to communicate directly with each other

Forward integration – takes information entered into a given system and sends it automatically to all downstream systems and processes

Backward integration – takes information entered into a given system and sends it automatically to all upstream systems and processes


Sunday, 7 July 2013

Chapter Four: Measuring The Success Of Competitive Initiative


Key performance indicator - measures that are tied to business drivers

Metrics - detailed measures that feed KPIs

Performance metrics - fall into the nebulous area of business intelligence that is neither technology, nor business centered, but requires input from both IT and business professionals


Efficiency IT metric - measure the performance of the IT system itself including throughout speed and availability

Effectiveness IT metric - measures the impact IT has on business processes  and activities including customers satisfaction conversion rates and self-through increases


Regardless or what is measured, how it is measured and whether it is for the sake of efficiency or effectiveness, there must be

Benchmarks – baseline values the system seek to attain

Benchmarking – a process of continuously measuring system results, comparing those results to optimal system performance and identifying to improve system performance


a) Efficiency IT metrics focuses on technology and includes :

Throughput - the amount of information that can travel trough a system at
any point

Transaction speed - the amount of time a system takes to perform a

System availability – the number of hours a system is available for users

Information accuracy – the extent to which a system generates the correct results when executing the same transaction numerous times

Web traffic – includes a host of benchmarks such as the number of page views, the number of unique visitors, and the average time spent viewing a Web page

Response time –the time it takes to respond to user interactions such as a mouse click

b) Effectiveness IT metrics focuses on an organization’s goals, strategies, and objectives and includes:

Usability – The ease with which people perform transactions and/or find information. A popular usability metric on the Internet is degrees of freedom, which measures the numbers of clicks required to find desired information.

Customer satisfaction – Measured by such benchmarks as satisfaction surveys, percentage of existing customers retained, and increases in revenue dollars per customer.

Conversion rates – The number of customers an organization “touches” for the first time and persuades to purchase its products or services. This is a popular metric for evaluating the effectiveness of banner, pop-up, and pop-under ads on the Internet.

Financial – Such as return on investment (the earning power of an organization’s assets), cost-benefit analysis (the comparison of projected revenues and costs including development, maintenance, fixed, and variable), and break-even analysis (the point at which constant revenues equal ongoing costs).

Security is an issue for any organization offering products or services over the Internet. It is inefficient for an organization to implement Internet security, since it slows down processing

a) However, to be effective it must implement Internet security

b) Secure Internet connections must offer encryption and Secure Sockets Layers (SSL denoted by the lock symbol in the lower corner of a browser) .

c) Web Site Metrics:

Abandoned registrations – Number of visitors who start the process of completing a registration page and then abandon the activity.

Abandoned shopping carts – Number of visitors who create a shopping cart and start shopping and then abandon the activity before paying for the merchandise.

Click-through – people who visit a site, click on an ad, and are taken to the site of the advertiser.

Conversion rate – potential customers who visit a site and actually buy something.

Cost-per-thousand (CPM) – sales dollar generated per dollar of advertising. This is commonly used to make the case for spending money to appear on a search engine.

Page exposures – average number of page exposure to an individual visitor.

Total hits – number of visits to a web site, many of which may be by the same visitor.

Unique visitor – number of unique visitors to a site in a given time. This is commonly used by Nielsen/Net ratings to rank the most popular Web site.


Back order – an unfilled customer order.

Customer order promised cycle time – the anticipated or agreed upon cycle time of a purchase order.

Customer order actual cycle time – to actually fill a customer’s purchase order.

Inventory replenishment cycle time – measure of the manufacturing cycle time plus  the time included to deploy the product to the appropriate distribution center.

Inventory turns ( inventory turnover ) – the number of times that a company’s inventory cycles or turns over per year.

   Customer relationship management metrics measure user satisfaction and interaction and includes :
-          Sales metrics
-          Service metrics
-          Marketing metrics

The balanced scorecard enables organizations to measures and manage strategic initiatives

Chapter Three: Strategic Initiatives For Implementing Competitive Advantages


Involves the management of information flows between and among stages in a supply chain to maximize total supply chain effectiveness and profitability.

1a) Four basic components of Supply Chain Management includes:

a) Supply chain strategy - strategy for managing all resources to meet customer demand.

b) Supply chain partner - partners throughout the supply chain that deliver finished products, raw    materials, and services.

c) Supply chain operation - schedule for production activities.

d) Supply chain logistic - product delivery process.

1b) Effective & Efficient SCM systems can enable an organization to:

a) Decrease the power of its buyers

b) Increase its own supplier power

c) Increase switching costs to reduce the threats of substitute products or services

d) Create entry barriers thereby reducing the threats of new entrants.

e) Increase efficiencies while seeking a competitive advantage through cost leadership


Involves managing all aspects of a customer's relationship with an organization to increase customer loyalty and retention and an organization's profitability. CRM is not just technology, but a strategy, process and business goal that an organization must embrace on an enterprisewide level.

CRM can enable an organization to:

a) Identify types of customers

b) Design individual customer marketing campaigns

c) Treat each customer as an individual

d) Understand customer buying behaviors


Business process: A standardized set if activities that accomplish a specific task, such as processing a customer's order.

Business process reengineering (BPR): The analysis and redesign of workflow within and between enterprises


Integrates all departments and functions throughout an organization into a single IT system so that employees can make decisions by viewing enterprisewide information on all business operations.

ERP systems collect data from across an organization and correlates the data generating an enterprisewide view.