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Chapter 8Chapter 8Models and Decision SupportModels and Decision Support
The StrategicManagement of
InformationTechnology
Transaction Processing Transaction Processing SystemSystem
Input OutputProcess
Information
Communication
Systems Development
Software Design
ModelModel Specific Way of Looking at the World
– specific and concrete– mathematical equations– subjective descriptions– financial models– consumer models– management models
Assist in Understanding More Complex Issues– enable comparison between model and actual results
Some Processes Defy Modeling– Too much variability or complexity
Uses of ModelsUses of Models
Optimization Prediction Description Simulation
Dangers of ModelsDangers of Models
Number of Alternatives Expense Time Difficulty to Mirror Reality
Biases in Decision-MakingBiases in Decision-Making
Acquisition (input) Processing Output Feedback
Re-EngineeringRe-Engineering
Analyze and Model the Entire Company Make Major Changes to the Operation
of the Business Small Changes over Time can Actually
cause a business to be misaligned with its Target
Object-Oriented ModelsObject-Oriented Models Specify Attributes and Functions of Each Object
– Add New Attributes to Portray Actual Movement Capacity Time Required to Complete a Job Cost
Physical Objects– Customer– Order Entry Department– Inventory– Shipping
Data Objects– Purchase Orders– Routing Slips– Parts Lists– Shipping Schedules– Invoices
Operations ProblemsOperations Problems
Operations Problems– Well-Defined, Easy to Solve– Transaction Processing Systems Collect
the Data– Decision Affects Business for a Day or Two
Decision Support SystemsDecision Support Systems Database
– Collects Model
– Evaluates
– Model should Directly Access Database
– Different Brands of Software are Used for Each Component
Output
– Produces
– Graphs
Input and Output VariablesInput and Output Variables Input Variables
– To Receive Data
– Quantities of Raw Materials
– Labor Hours
– Money Invested in Capital Equipment
– Identified by Statistical Techniques Process Data Output Variables
– Profit
– Quantity Produced
– Quality Ratings
Software and ModelsSoftware and Models
Generic Modeling Tools SPSS or SAS Decision Support System Database Management System Spreadsheets
GroupWareGroupWare
Group Decision Support System Lotus Notes Executive Information System
– connected to transaction processing system
Enterprise WideEnterprise WideDecision Support SystemsDecision Support Systems
Data Warehouse– focuses on single large server or mainframe that
provides consolidation point for enterprise data from diverse production systems
– architecture, usually based on relational database management system, used to maintain historical data that has been extracted from the operational data store
Data Mart– focuses exclusively on serving a distinct community
of knowledge workers
Steps to a Data WarehouseSteps to a Data Warehouse Determine needs of end users and model data that the data
warehouse should contain Identify necessary data sources from among the many corporate
data sources Analyze corporate data sources in depth, documenting functions and
processes Use information about corporate data sources to decide the
transformation/integration logic Develop the metadata, which identifies the source data, describes
the transformation and integration, and defines the data model Construct the physical data-warehouse database; populate
Warehouse from various sources Generate necessary end-user applications
Data WarehouseData Warehouse
Not Repositories for all Corporate Data Not Separate, Read-Only Data Stores Do not Require Relational Databases Not always big
Four Processes for the Delivery Four Processes for the Delivery of Decision Support Dataof Decision Support Data
Extract all data relevant to the business decision-making processes of groups of knowledge workers for the specific production systems responsible for capturing that information.
Store the resulting data sets in one location: the data warehouse.
Develop a unique cut or series of cuts of the data warehouse for each knowledge worker community.
Supply the decision-support tools appropriate to the knowledge workers’ style of computing.
OODBMS
An object oriented database management system, (OODBMS), is the integration of the object oriented paradigm and database management systems.
OODBMS The integration of the object oriented
paradigm and database management systems:– In programming languages, where the object
oriented concepts evolved from encapsulation and information hiding of abstract data types.
– In artificial intelligence within Minksy’s “frame” concept in knowledge representation.
– In databases, where research in semantic data models led to object oriented concepts.
Objects and Classes Each real world entity is modeled by an
“object.” Each object has existence independent of its value and is assigned an object identifier, (concept of “object identity”). Each object has a set of instance attributes (instance variables) and methods. Flow control in object oriented systems comes from sending messages between objects. Data abstraction prevents an object’s data from being directly manipulated.
ClassesClassesClass Inheritance: A “class” is a group of objects that share the
same structure and behavior.
Overloading: In overloading the same operator is allowed
to present multiple operations on different data types.
Overriding: An operation of most general type is defined
in the hierarchy lattice, but redefined in some subclasses, overriding the default inheritance of the general type.
– The integration of the object oriented paradigm and database management systems:
– First, in programming languages, where the object oriented concepts evolved from encapsulation and information hiding of abstract data types.
– Then, in artificial intelligence with Minksy’s “frame” concept in knowledge representation.
– Lastly, in databases, where research in semantic data models led to object oriented concepts.
Object-Oriented Database Management System
Class Inheritance: A “class” is a group of objects that share the
same structure and behavior.
Overloading: In overloading the same operator is allowed
to present multiple operations on different data types.
Overriding: An operation of most general type is defined
in the hierarchy lattice, but redefined in some subclasses, overriding the default inheritance of the general type.
Management Processes
Feedback
• Long feedback cycles•Limited understanding of relationships among measures•Sequential & functional •Incomplete feedback; limited to no feedforward
Personnel Control Action Control Results Control
• Rigid contracts with suppliers•Rigid job descriptions, hiring criteria & standardized performance appraisals for employees
•Process & job segmentation•Rigid procedures & policies•Direct supervision
•Primarily financial •Internally oriented•Functional
Management ProcessesFeedback
•Short feedback cycles•Relationships among measures preserved•Interactive & interfunctional
Process ControlInformation-Enabled•Process & work integration•Real-time access to a broad set of process performance•Interfunctional & interorganizational measuresBoundaries and Values•Clearly defined and communicated•Consistently enforced•Early warning systems •Action control for high risk operations
Output Control
•Broad set of internal & external measures•Benchmarking•Interfunctional & interorganizational
Feedforward
•Improved understanding of relationships among inputs, process, and outputs•Predictive models/causal models•Interactive scenario planning
Input Control(includes Personnel Control)
•Supplier certification•Employee certification (advanced degrees, professional) & performance monitoring•Formal business intelligence systems
Management ProcessesFeedback
•Short feedback cycles•Relationships among measures preserved•Interactive & interfunctional
Process ControlInformation-Enabled•Process & work integration•Real-time access to a broad set of process performance•Interfunctional & interorganizational measuresBoundaries and Values•Clearly defined and communicated•Consistently enforced•Early warning systems •Action control for high risk operations
Output Control
•Broad set of internal & external measures•Benchmarking•Interfunctional & interorganizational
Feedforward
•Improved understanding of relationships among inputs, process, and outputs•Predictive models/causal models•Interactive scenario planning
Defining Direction Executing and Adapting Sustaining Value
Environmental context and resources
Purpose, core values, and core competencies
Strategy
Organizational context, resources,
and leadership
Coordinating mechanisms
Units, groupings
Incentives
Formal and informal power
Authority
Information
Boundary systems
Management processes
Operating processes
People
Technology
Work
Control
Values and Behavior
Process Performance •Time •Quality•Cost•Flexibility•Innovation potentialStakeholder Satisfaction•Employees/partners•Customers•Shareholders•SocietyBenchmarks•Best of class•Best of breed•ReputationOther•Sustainability•Resiliency•Flexibility
?
Hierarchy(Control)
Entrepreneurial(Autonomy)
Complex
Organization
Simple
Stable Certain
Environment
Dynamic Uncertain
SCOPE OF CHANGEIncremental Change to a Process or
Function
Intrafunctional Interfunctional Interorganizational
Radical Change to Organizational or Interorganizational Strategy, Structure, Process, and Culture
LOW
Urgency of Stimulus
HIGH
Episode #3
1991-1993Team-based Organization Redesign
1988-1991Business Process Redesign Within Plant
Episode #2
1985-1988Corporatewide Reorganization
Episode #1
SCOPE OF CHANGEIncremental Change to a Process or
Function
Intrafunctional Interfunctional Interorganizational
Radical Change to Organizational or Interorganizational Strategy, Structure, Process, and Culture
LOW
Urgency of Stimulus
HIGH
Episode #21988-1990Quality Mgmt.
Episode #3
1991-1992Business Process Reengineering
1992-1993Bus. Unit #1 Restructuring
1991-1992SBU Restructuring
Episode # 11986-1988Focused Redesign/Key Leveraged Areas
1985Post-takeover Restructuring
SCOPE OF CHANGEIncremental Change to a Process or
Function
Intrafunctional Interfunctional Interorganizational
Radical Change to Organizational or Interorganizational Strategy, Structure, Process, and Culture
LOW
Urgency of Stimulus
HIGH
1978-1980Ideal Sales Org. Study & Ideal Mfg. Org. Study
1983-1986Redesign of Field Sales, Distribution & Mfg. (separate initiatives)
Episode # 1
1991-1992EDI Initiatives
1987-1988Business Process Redesign
1990-1993Area Business Team Reorganized
Episode # 2
Episode # 3