Chapter 2: Strategic Decision Making
1. Benefits of Decision Making Strategies
a. Analyze large amounts of information
b. Make decisions quickly
c. Apply sophisticated analysis techniques
d. Protect the corporate asset of organizational information
2. Transactional Information: Encompasses all the information contained within a single business process or unit of work, and its
primary purpose is to support the performing of daily operational tasks.
3. Analytical Information: Encompasses all organizational information, and its primary purpose is to support the performing of
managerial analysis tasks.
a. Transaction processing system (TPS) - basic business system that serves the operational level
b. Online transaction processing (OLTP) – capturing of transaction and event information using technology
c. Online analytical processing (OLAP) – manipulation of information to create business intelligence in support of strategic
decision making
4. Decision support system (DSS) – models information to support managers and business professionals during the decision-
making process
5. Three quantitative models used by DSSs include:
a. Sensitivity analysis- the study of the impact the changes in one (or more) parts of the model have on other parts of the
model.
b. What-if analysis- checks the impact of a change in an assumption on the proposed solution.
c. Goal-seeking analysis- finds the imports necessary to achieve a goal such as a desired level of output.
6. Executive information system (EIS) – a specialized DSS that supports senior level executives within the organization
7. Most EIS's offering the following capabilities:
a. Consolidation- involves the aggregation of information and features simple roll-ups to complex groupings of interrelated
information.
b. Drill-down- enables users to view details, and details or details, of information.
c. Slice-and-dice- the ability to look at information from different perspectives.
8. Artificial intelligence (AI) – simulates human intelligence such as the ability to reason and learn
a. Expert Systems: imitates expert reasoning
b. Neural Network - Models human brain
c. Genetic Algorithm - Mimic evolution
d. Intelligent Agent - Special purposes, specialized tasks
9. Intelligent system – various commercial applications of artificial intelligence
10. Business process – a standardized set of activities that accomplish a specific task, such as processing a customer’s order
a. Customer facing process - results in a product or service that is received by an organization’s external customer
b. Business facing process - invisible to the external customer but essential to the effective management of the business
11. Business process improvement – attempts to understand and measure the current process and make performance
improvements accordingly
12. Business Process Model- Document “As-is”processes → Establish Measures → Follow Process → Measure Performance →
Identify and Implement improvements
13. Business process reengineering (BPR) - analysis and redesign of workflow within and between enterprises
a. Business Process Reengineering Model- Set project scope → Study competition → Create New Processes
→ Implement Solution
14. 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
15. Business process model - a graphic description of a process, showing the sequence of process tasks, which is developed
for a specification.
a. As-Is process model- Represent the current state of the operation that has been mapped, without any specific
improvements or changes to existing processes.
b. To-Be process models- Show the results of applying change improvement opportunities to the current (As-Is) process
model.
All Information above compiled from below reference
Gordon, B., & Ducham, P. (2011). Information Systems. New York: McGraw-Hill/Irwin.
a. Analyze large amounts of information
b. Make decisions quickly
c. Apply sophisticated analysis techniques
d. Protect the corporate asset of organizational information
2. Transactional Information: Encompasses all the information contained within a single business process or unit of work, and its
primary purpose is to support the performing of daily operational tasks.
3. Analytical Information: Encompasses all organizational information, and its primary purpose is to support the performing of
managerial analysis tasks.
a. Transaction processing system (TPS) - basic business system that serves the operational level
b. Online transaction processing (OLTP) – capturing of transaction and event information using technology
c. Online analytical processing (OLAP) – manipulation of information to create business intelligence in support of strategic
decision making
4. Decision support system (DSS) – models information to support managers and business professionals during the decision-
making process
5. Three quantitative models used by DSSs include:
a. Sensitivity analysis- the study of the impact the changes in one (or more) parts of the model have on other parts of the
model.
b. What-if analysis- checks the impact of a change in an assumption on the proposed solution.
c. Goal-seeking analysis- finds the imports necessary to achieve a goal such as a desired level of output.
6. Executive information system (EIS) – a specialized DSS that supports senior level executives within the organization
7. Most EIS's offering the following capabilities:
a. Consolidation- involves the aggregation of information and features simple roll-ups to complex groupings of interrelated
information.
b. Drill-down- enables users to view details, and details or details, of information.
c. Slice-and-dice- the ability to look at information from different perspectives.
8. Artificial intelligence (AI) – simulates human intelligence such as the ability to reason and learn
a. Expert Systems: imitates expert reasoning
b. Neural Network - Models human brain
c. Genetic Algorithm - Mimic evolution
d. Intelligent Agent - Special purposes, specialized tasks
9. Intelligent system – various commercial applications of artificial intelligence
10. Business process – a standardized set of activities that accomplish a specific task, such as processing a customer’s order
a. Customer facing process - results in a product or service that is received by an organization’s external customer
b. Business facing process - invisible to the external customer but essential to the effective management of the business
11. Business process improvement – attempts to understand and measure the current process and make performance
improvements accordingly
12. Business Process Model- Document “As-is”processes → Establish Measures → Follow Process → Measure Performance →
Identify and Implement improvements
13. Business process reengineering (BPR) - analysis and redesign of workflow within and between enterprises
a. Business Process Reengineering Model- Set project scope → Study competition → Create New Processes
→ Implement Solution
14. 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
15. Business process model - a graphic description of a process, showing the sequence of process tasks, which is developed
for a specification.
a. As-Is process model- Represent the current state of the operation that has been mapped, without any specific
improvements or changes to existing processes.
b. To-Be process models- Show the results of applying change improvement opportunities to the current (As-Is) process
model.
All Information above compiled from below reference
Gordon, B., & Ducham, P. (2011). Information Systems. New York: McGraw-Hill/Irwin.
