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McGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter 2 CHAPTER TWO OVERVIEW Chapter 2 • SECTION 2.1 - DECISION-MAKING SYSTEMS Decision Making Transaction Processing Systems Decision Support Systems Executive Information Systems • SECTION 2.2 – BUSINESS PROCESSES Understanding the Importance of Business Processes Business Process Improvement Business Process Reengineering Business Process Modeling Business Process Management 2-2 DECISION MAKING Chapter 2 • Model – a simplified representation or abstraction of reality • IT systems in an enterprise 2-3 TRANSACTION PROCESSING SYSTEMS Chapter 2 • Moving up users move from requiring transactional information to analytical information 2-4 DECISION SUPPORT SYSTEMS Chapter 2 • Decision support system (DSS) – models information to support managers and business professionals during the decision-making process • Three quantitative models used by DSSs include: 1. Sensitivity analysis 2. What-if analysis 3. Goal-seeking analysis 2-5 EXECUTIVE INFORMATION SYSTEMS Chapter 2 • Executive information system (EIS) – a specialized DSS that supports senior level executives within the organization • Most EISs offering the following capabilities: • Consolidation; Drill-down ; Slice-and-dice Digital dashboard – a common feature of EIS that integrates information from multiple components 2-6 ARTIFICIAL INTELLIGENCE (AI) Chapter 2 Artificial intelligence (AI) – simulates human intelligence such as the ability to reason and learn Four most common categories of AI include: • • • Expert system Neural Network Genetic algorithm Intelligent agent Data-mining systems sift instantly through information to uncover patterns and relationships, and include many forms of AI such as neural networks and expert systems 2-7 UNDERSTANDING THE IMPORTANCE OF BUSINESS PROCESS Chapter 2 • Business process – a standardized set of activities that accomplish a specific task, such as processing a customer’s order Customer facing process - results in a product or service that is received by an organization’s external customer Business facing process - invisible to the external customer but essential to the effective management of the business 2-8 BUSINESS PROCESS IMPROVEMENT Chapter 2 • Business process improvement model 2-9 BUSINESS PROCESS REENGINEERING Chapter 2 • Business process reengineering (BPR) - analysis and redesign of workflow within and between enterprises 2-10 BUSINESS PROCESS MODELING Chapter 2 • Business process modeling (or mapping) - the activity of creating a detailed flow chart or process map of a work process showing its inputs, tasks, and activities, in a structured sequence • Business process model - a graphic description of a process, showing the sequence of process tasks, which is developed for a specific As-Is process model To-Be process model 2-11 BUSINESS PROCESS MANAGEMENT Chapter 2 • Business process management (BPM) - integrates all of an organization’s business process to make individual processes more efficient 2-12