Transcript MIS

THE DIGITAL FIRM:
ELECTRONIC
COMMERCE AND
ELECTRONIC
BUSINESS
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Internet Technology and The Digital Firm
•
Information technology
infrastructure: Provides a universal
and easy-to-use set of technologies and
technology standards that can be
adopted by all organizations
•
Direct communication between
trading partners: Disintermediation
removes intermediate layers,
streamlines process
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Internet Technology and the Digital Firm
•
Round-the-clock service: Web sites
available to consumers 24 hours a day
•
Extended distribution channels:
Outlets created for attracting customers who
otherwise would not patronize
•
Reduced transaction costs: Costs of
searching for buyers, sellers, etc. reduced
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New Business Models and Value Propositions
Business Model:
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Defines an enterprise
•
Describes how the enterprise delivers a
product or service
•
Shows how the enterprise creates wealth
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The Changing Economies of Information
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Information asymmetry: One party in
a transaction has more information than
the other
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Increases richness: Depth and detail
of information
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Increases reach: Number of people
contacted
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Internet Business Models
• Information broker: Provide info on
products, pricing, etc.
• Transaction broker: Buyers view rates,
terms from various sources
• Online Marketplace: Concentrates
information from several providers
• Content provider: Creates revenue
through providing client for a fee, and
advertising
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Internet Business Models
• On-line service provider: Provides
service, support for hardware, software
products
• Virtual community: Chat room, on-line
meeting place
• Portal: Initial point of entry to Web,
specialized content, services
• Virtual storefront: Sells goods, services
on-line
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Internet Business Models
• Syndicator: Aggregate information from
several sources sold to other companies
• Auction: Electronic clearinghouse
products, prices, change in response to
demand
• Dynamic pricing: real-time interactions
between buyers and sellers determine
worth of items
• Banner ad: Graphic advertising display,
linked to the advertiser’s Web site
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ELECTRONIC COMMERCE
Categories of Electronic Commerce
• Business-to-customer (B2C): Retailing
of products and services directly to
individual customers
• Business-to-business (B2B): Sales of
goods and services among businesses
• Consumer-to-consumer (C2C):
Individuals use Web for private sales or
exchange
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ELECTRONIC COMMERCE
Business-To-Consumer
• Customer-centered retailing: Closer,
yet more cost-effective relationship with
customers
• Web sites: Provide information on
products, services, prices, orders
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ELECTRONIC COMMERCE
Business-To-Consumer
• Disintermediation: The removal of
organizations or business process layers
responsible for certain intermediary steps
in a value chain
• Reintermediation: The shifting of the
intermediary role in a value chain to a new
source
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ELECTRONIC COMMERCE
Benefits of Disintermediation to the Consumer
Cost/
Sweate
r
Manufacturer
Manufacturer
Manufacturer
Distributor
Retailer
Customer
$48.50
Retailer
Customer
$40.34
Customer
$20.45
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ELECTRONIC COMMERCE
Interactive Marketing and Personalization
Web personalization:
• Benefits of using individual sales people
• Dramatically lower costs
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ELECTRONIC COMMERCE
M-Commerce and Next Generation Marketing
Mobile commerce (m-commerce):
• Wireless devices used to conduct both
business-to-consumer and business-tobusiness e-commerce transactions over
the Internet
• Extend personalization by delivering new
value-added services directly to
customers at any time and place
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ELECTRONIC COMMERCE
Customer Personalization
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ELECTRONIC COMMERCE
Business-To-Business Electronic Commerce
Automation of purchase, sale transactions
from business to business
• Private industrial networks: Coordination
between companies for efficient supply chain
management and collaborative activities
• Electronic hubs: On-line marketplaces,
point-to-point connections, integrated
information
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ELECTRONIC COMMERCE
A Private Industrial Network
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ELECTRONIC COMMERCE
A Net Marketplace
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ELECTRONIC COMMERCE
Exchanges: Third-party net marketplace
• Primarily transaction oriented
• Connects buyers and suppliers for spot
purchasing
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ELECTRONIC COMMERCE
Electronic Commerce Payment Systems
SYSTEM
DESCRIPTION
CREDIT CARDS
SECURE SITE PRESERVES INFORMATION
ELECTRONIC CASH
DIGITAL CURRENCY USED FOR MICROPAYMENTS
PERSON-TO-PERSON
SEND MONEY TO SITES UNABLE TO USE CREDIT CARDS
DIGITAL WALLET
SOFTWARE STORES CREDIT CARD INFORMATION
ELECTRONIC CHECK
CHECK WITH ENCRIPTED DIGITAL SIGNATURE
SMART CARD
MICROCHIP STORES ELECTRONIC CASH
ELECTRONIC BILL PAYMENT
ELECTRONIC FUNDS TRANSFER
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ELECTRONIC COMMERCE
Electronic Commerce Information Flows
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ELECTRONIC BUSINESS AND THE DIGITAL FIRM
How Intranets Support Electronic Business
• Benefits
• Functional applications
• Supply chain management
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ELECTRONIC BUSINESS AND THE DIGITAL FIRM
Benefits of Intranets
• Connectivity: accessible from most computing
platforms
• Can be tied to internal corporate systems and
core transaction databases
• Can create interactive applications
• Scalable to larger or smaller computing
platforms
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ELECTRONIC BUSINESS AND THE DIGITAL FIRM
Benefits of Intranets
• Easy-to-use, universal Web interface
• Low start-up costs
• Richer, more responsive information
environment
• Reduced information distribution costs
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ELECTRONIC BUSINESS AND THE DIGITAL FIRM
Functional Applications of Intranet
• Finance and accounting
• Human resources
• Sales and marketing
• Manufacturing and production
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ELECTRONIC BUSINESS AND THE DIGITAL FIRM
Functional Applications of Intranets
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MANGEMENT CHALLENGES & OPPORTUNITIES
• Unproven business models
• Business process change requirements
• Channel conflicts
• Legal issues
• Security and privacy
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TELECOMMUNICATIONS
AND
NETWORKS
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THE TELECOMMUNICATIONS REVOLUTION
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Telecommunications: Communication
of information by electronic means
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The marriage of computers and
communications: The 1996
Telecommunications Deregulation and
Reform Act
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The Information Superhighway:
High-speed digital telecommunications
networks, accessible by the general
public
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COMPONENTS AND FUNCTIONS OF A TELECOMMUNICATIONS SYSTEM
Telecommunications System Components
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Computers to process information
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Terminals or any input/output devices
that send or receive data
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Communications processors
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Communications software
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COMPONENTS AND FUNCTIONS OF A TELECOMMUNICATIONS SYSTEM
Components of a Telecommunications System
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COMPONENTS AND FUNCTIONS OF A TELECOMMUNICATIONS SYSTEM
Functions of Telecommunications Systems
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Transmit information
Establish interface between sender and
the receiver
Route messages along most efficient
paths
Perform elementary processing of
information
Perform editorial tasks on data
Convert message speed or format
Control flow of information
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COMPONENTS AND FUNCTIONS OF A TELECOMMUNICATIONS SYSTEM
Types of Signals: Analog and Digital
Analog signal
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Continuous waveform
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Passes through communications medium
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Used for voice communications
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COMPONENTS AND FUNCTIONS OF A TELECOMMUNICATIONS SYSTEM
Types of Signals: Analog and Digital
Digital signal
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Discrete waveform
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Transmits data coded into two discrete
states as 1-bits and 0-bits
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Used for data communications
Modem
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Translates computer’s digital signals
into analog and vice versa
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COMPONENTS AND FUNCTIONS OF A TELECOMMUNICATIONS SYSTEM
Functions of the Modem
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COMPONENTS AND FUNCTIONS OF A TELECOMMUNICATIONS SYSTEM
Communications Channels
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Twisted wire: Telephone systems
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Coaxial cable: Cable television
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Fiber optics and optical networks:
Dense wave division multiplexing (DWDM)
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COMPONENTS AND FUNCTIONS OF A TELECOMMUNICATIONS SYSTEM
Communications Channels
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Wireless transmission: Microwave,
Satellites, Paging systems, Cellular
telephones, Personal communication
Services, Personal digital assistants,
Mobile data networks
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Transmission: Baud, bandwidth
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COMPONENTS AND FUNCTIONS OF A TELECOMMUNICATIONS SYSTEM
Frequency Ranges for Communications Media and Devices
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COMPONENTS AND FUNCTIONS OF A TELECOMMUNICATIONS SYSTEM
Amoco’s Satellite Transmission System
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COMPONENTS AND FUNCTIONS OF A TELECOMMUNICATIONS SYSTEM
Communications Processors and Software
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Front-end processor: Manages
communications for the host computer
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Concentrator: Collects and temporarily
stores messages
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Controller: Supervises communication
traffic
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Multiplexer: Enables single
communication channel to carry data
transmissions
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COMMUNICATIONS NETWORKS
Network Topologies
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Star Network: All computers and other
devices are connected to a central host
computer
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Bus Network: Links a number of
computers by a single circuit
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Ring Network: All computers are linked
by a closed loop
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COMMUNICATIONS NETWORKS
A Star Network Topology
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COMMUNICATIONS NETWORKS
A Bus Network Topology
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COMMUNICATIONS NETWORKS
A Ring Network Topology
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COMMUNICATIONS NETWORKS
Private Branch Exchanges, Local Area Networks (LANs), and Wide Area Networks (WANs)
Private Branch Exchanges
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Central switching system
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Handle firm’s voice and digital
communications
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COMMUNICATIONS NETWORKS
Private Branch Exchanges, Local Area Networks (LANs), and Wide Area Networks (WANs)
Local Area Networks
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Telecommunication network
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Require its own dedicated channels
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Encompass a limited distance
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Gateway, router, Network Operating
System (NOS), peer-to-peer
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COMMUNICATIONS NETWORKS
A Local Area Network (LAN)
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COMMUNICATIONS NETWORKS
Private Branch Exchanges, Local Area Networks (LANs), and Wide Area Networks (WANs)
Wide Area Networks (WANs)
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Telecommunication network
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Span large geographical distance
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Consist of variety of cable, satellite, and
microwave technologies
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Switched lines, dedicated lines
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COMMUNICATIONS NETWORKS
Network Services and Broadband Technologies
Value-Added Networks (VANs)
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Private, multipath, data-only, third-partymanaged network
Other Network Services
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Packet switching, Frame Relay,
Asynchronous transfer mode (ATM)
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Integrated Services Digital Network (ISDN),
Digital subscriber line (DSL), Cable modems,
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T1 line, Broadband
COMMUNICATIONS NETWORKS
Packed-Switched Networks and Packet Communications
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COMMUNICATIONS NETWORKS
Network Convergence
Converged network
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Network with technology
Enables voice and data to run over a
single network
Unified messaging
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System combining voice messages,
email, and fax
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Electronic Commerce and Electronic Business Technologies
Electronic Mail and Groupware
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E-mail: Eliminates telephone tag and
costly long-distance telephone charges
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Groupware: Enables work groups at
different locations to participate in
discussion forums and work on shared
documents and projects
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Electronic Commerce and Electronic Business Technologies
Voice Mail and Fax
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Voice mail: Digitizes spoken message
and transmits it over a network
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Fax: Digitizes and transmits documents
over telephone lines
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Electronic Commerce and Electronic Business Technologies
Teleconferencing, Data-conferencing, and Videoconferencing
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Teleconferencing: Ability to confer
with a group of people simultaneously
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Data conferencing: Two or more users
can edit and modify data files
simultaneously
•
Videoconferencing: Participants are
able to see each other over video
screens
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Electronic Commerce and Electronic Business Technologies
Digital Information Services, Distance Learning and E-Learning
• Distance learning: Education or
training delivered over a distance to
individuals in one or more locations
• E-learning: Instruction delivered
online using the Internet or private
networks
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Electronic Commerce and Electronic Business Technologies
Electronic Data Interchange (EDI)
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Direct computer-to-computer exchange
between two organizations of standard
business transaction documents
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Electronic Commerce and Electronic Business Technologies
Electronic Data Interchange (EDI)
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Enhancing Management
Decision Making for the Digital Firm
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Decision-Support Systems (DSS)
• Computer system at the management level
of an organization
• Combines data, analytical tools, and
models
• Supports semi-structured and
unstructured decision making
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Decision-Support Systems (DSS)
MIS and DSS
MIS
• Provides reports based on routine flow
of data
• Assists in general control of the
organization
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Decision-Support Systems (DSS)
MIS and DSS
DSS
• Emphasizes change, flexibility, rapid
response, models, assumptions, ad-hoc
queries, and display graphics
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Decision-Support Systems (DSS)
Types of Decision-Support Systems
Model-Driven DSS
• Primarily stand-alone
• Uses model to perform “what-if” and other
kinds of analysis
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Decision-Support Systems (DSS)
Types of Decision-Support Systems
• Data-driven DSS: Supports decision
making by allowing users to extract and
analyze useful information previously
buried in large databases
• Data-mining: Finds hidden patterns and
relationships in large databases to infer
rules from them and predict future
behavior
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Decision-Support Systems (DSS)
Cargo revenue optimization of Continental Airlines
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Decision-Support Systems (DSS)
Types of Decision-Support Systems
• Associations: Occurrences linked to a
single event
• Sequences: Events linked over time
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Decision-Support Systems (DSS)
Types of Decision-Support Systems
• Classification: Recognizing patterns
that describe the group to which an item
belongs
• Clustering: Similar to classification when
no groups have yet been defined.
Discovers different groupings within data
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Decision-Support Systems (DSS)
Overview of a decision-support system (DSS)
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Decision-Support Systems (DSS)
Components of DSS
• DSS Database: Collection of current or
historical data from a number of
applications or groups. Can be a small PC
database or a massive data warehouse
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Decision-Support Systems (DSS)
Components of DSS
• DSS Software System: Collection of
software tools used for data analysis,
such as OLAP tools, data-mining tools, or
a collections of mathematical and
analytical models
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Decision-Support Systems (DSS)
Components of DSS
• Model: Abstract representation
illustrating components or
relationships of a phenomenon
• Sensitivity Analysis: Models that ask
“what-if” questions repeatedly to
determine the impact of changes in
one or more factors on the outcomes
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Decision-Support Systems (DSS)
Sensitivity analysis
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Decision-Support Systems (DSS)
DSS Applications and the Digital Firm
Examples of Decision-Support
Systems
• General Accident Insurance: Customer
buying patterns and fraud detection
• Bank of America: Customer profiles
• Frito-Lay, Inc.: Price, advertising, and
promotion selection
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Decision-Support Systems (DSS)
DSS Applications and the Digital Firm
Examples of Decision-Support
Systems
• Southern Railway: Train dispatching and
routing
• Texas Oil and Gas Corporation: Evaluation
of potential drilling sites
• The Gap: Inventory stocking and
merchandising
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Decision-Support Systems (DSS)
DSS Applications and the Digital Firm
Examples of Decision-Support
Systems
• United Airlines: Flight scheduling,
passenger demand forecasting
• U.S. Department of Defense: Defense
contract analysis
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Decision-Support Systems (DSS)
DSS for Pricing Decisions
• By analyzing several years of sales data
for similar items, the software estimates a
“seasonal demand curve” for each item
and predicts how many units would sell
each week at various prices.
• The software uses sales history to predict
how sensitive customer demand will be to
price changes
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Decision-Support Systems (DSS)
DSS for Supply Chain Management
• Can help firms model inventory stocking
levels, production schedules, or
transportation plans
• Can provide firms with information on key
performance indicators such as lead time,
cycle time, inventory turns, or total supply
chain costs
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Decision-Support Systems (DSS)
DSS for customer analysis and segmentation
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Decision-Support Systems (DSS)
DSS for Customer Relationship Management
Predictive Analysis
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Use of data-mining techniques, historical
data, and assumptions about future
conditions to predict outcomes of events
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Decision-Support Systems (DSS)
Data Visualization and Geographic Information Systems (GIS)
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Data Visualization: Technology for
helping users see patterns and
relationships in large amounts of data by
presenting the data in graphical form
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Geographic Information System (GIS):
System with software that can analyze
and display data using digitized maps to
enhance planning and decision making
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Decision-Support Systems (DSS)
Web-Based Customer Decision-Support Systems
Customer Decision-Support System
(CDSS)
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System to support the decision-making
process of an existing or potential
customer
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Group Decision-Support Systems (GDSS)
What is a GDSS?
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Group Decision-Support System (GDSS):
An interactive computer-based system
to facilitate the solution to unstructured
problems by a set of decision makers
working together as a group
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Group Decision-Support Systems (GDSS)
Components of GDSS
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Hardware: Conference facility, electronic
hardware
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Software tools: Tools for organizing
ideas, gathering information, and
ranking and seeking priorities
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People: Participants, trained facilitator,
staff supporting hardware and software
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Group Decision-Support Systems (GDSS)
Components of GDSS
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Electronic questionnaires
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Electronic brainstorming tools
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Idea organizers
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Questionnaire tools
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Group Decision-Support Systems (GDSS)
Components of GDSS
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Tools for voting or setting priorities
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Stakeholder identification and analysis
tools
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Policy formation tools
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Group dictionaries
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Group Decision-Support Systems (GDSS)
Overview of a GDSS Meeting
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Each attendee has a workstation
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Workstations are networked and connected to
the facilitator’s console
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Data the attendees forward to the group are
collected and saved on a file server
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Facilitator projects computer images onto the
projection screen
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Group Decision-Support Systems (GDSS)
Group system tools
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Group Decision-Support Systems (GDSS)
How GDSS Can Enhance Group Decision Making
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Number of attendees can increase while
productivity increases
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More collaborative atmosphere
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Software tools follow structured
methods for organizing and evaluating
ideas and preserving the results of
meetings
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Group Decision-Support Systems (GDSS)
How GDSS Can Enhance Group Decision Making
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Increase the number of ideas generated
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Can lead to more participative and
democratic decision making
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Group Decision-Support Systems (GDSS)
How GDSS Can Enhance Group Decision Making
Organizational Memory
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Store learning from an organization’s
history that can be used for decision
making and other purposes
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Executive Support in the Enterprise
Executive Support Systems (ESS)
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Focus on the information needs of
senior management
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Combine data from internal and external
sources
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Create a generalized computing and
communications environment that can
be focused and applied to a changing
array of problems
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Executive Support in the Enterprise
Executive Support Systems (ESS)
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Monitor organizational performance
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Track activities of competitors
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Spot problems
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Identify opportunities
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Forecast trends
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Executive Support in the Enterprise
The Role of Executive Support Systems in the Organization
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Bring together data from the entire
organization
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Allow managers to select, access, and
tailor data
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Enable executive and any subordinates
to look at the same data in the same way
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Executive Support in the Enterprise
The Role of Executive Support Systems in the Organization
Drill Down
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The ability to move from summary data
to lower and lower levels of detail
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Executive Support in the Enterprise
The Role of Executive Support Systems in the Organization
Developing ESS
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Ease of use
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Facility for environmental scanning
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External and internal sources of
information to be used for environmental
scanning
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Executive Support in the Enterprise
Benefits of Executive Support Systems
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Analyze, compare, and highlight trends
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Provide greater clarity and insight into
data
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Speed up decision making
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Executive Support in the Enterprise
Benefits of Executive Support Systems
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Improve management performance
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Increase management’s span of control
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Better monitoring of activities
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Executive Support in the Enterprise
Executive Support Systems and the Digital Firm
ESS for Competitive Intelligence
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Identify changing market conditions
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Formulate responses
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Track implementation efforts
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Learn from feedback
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Executive Support in the Enterprise
Executive Support Systems and the Digital Firm
Balanced Scorecard
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Model for analyzing firm performance
that supplements traditional financial
measures with measurements from
additional business perspectives, such
as customers, internal business
processes, and learning and growth
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Executive Support in the Enterprise
Enterprise-Wide Reporting and Analysis
Strategic performance management
tools
for enterprise systems
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SAP: Web-enabled mySAP.com™,
Management Cockpit
PeopleSoft: Web-enabled Enterprise
Performance Management (EPM)
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Executive Support in the Enterprise
Enterprise-Wide Reporting and Analysis
Activity-Based Costing
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Model for identifying all the company
activities that cause costs to occur while
producing a specific product or service
so that managers can see which
products or services are profitable or
losing money and make changes to
maximize firm profitability
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End of Lecture
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