Reporting
1 Management reporting systems
Information
systems support all levels of management, from those in charge of short-term
schedules and budgets for small work groups to those concerned with long-term
plans and budgets for the entire organization. Management reporting systems
provide routine, detailed, and voluminous information reports specific to each
manager‘s areas of responsibility. These systems are typically used by
first-level supervisors. Generally, such reports focus on past and present
activities, rather than projecting future performance. To prevent information
overload, reports may be automatically sent only under exceptional
circumstances or at the specific request of a manager.
2 Decision support systems and business
intelligence
All
information systems support decision making, however indirectly, but decision
support systems are expressly designed for this purpose. As these systems have
been developed to analyze massive collections of data, they have also become
known as business intelligence applications. The two principal varieties of
decision support systems are model-driven and data-driven.
In a
model-driven decision support system, a preprogrammed model is applied to a
relatively limited data set, such as a sales database for the present quarter.
During a typical session, an analyst or sales manager will conduct a dialog
with this decision support system by specifying a number of what-if scenarios.
For example, in order to establish a selling price for a new product, the sales
manager may use a marketing decision support system. Such a system contains a
model relating various factors the price of the product, the cost of goods, and
the promotion expense in various media to the projected sales volume over the
first five years on the market. By supplying different product prices to the
model, the manager can compare predicted results and select the most profitable
selling price.
The primary
objective of data-driven business intelligence systems is to analyze large
pools of data, accumulated over long periods of time in data warehouses, in a
process known as data mining. Data mining aims to discover significant
patterns, such as sequences (buying a new house, followed by a new dinner
table), clusters, and correlations (large families and van sales), with which
decisions can be made. Predictive data mining attempts to forecast future
outcomes based on the discovered trends. Data-driven decision support systems
include a variety of statistical models and may rely on various artificial
intelligence techniques, such as expert systems, neural networks, and machine
learning. In addition to mining numeric data, text mining is conducted on large
aggregates of unstructured data, such as the contents of social media that
include social networks, wikis, blogs, and micro blogs. As used in electronic
commerce, for example, text mining helps in finding buying trends, targeting
advertisements, and detecting fraud.
An
important variety of decision support systems enables a group of decision
makers to work together without necessarily being in the same place at the same
time. These group decision systems include software tools for brainstorming and
reaching consensus.
Another
category, geographic information systems, can help analyze and display data by
using digitized maps. Such data visualization supports rapid decision making.
By looking at a geographic distribution of mortgage loans, for example, one can
easily establish a pattern of discrimination.
3 Executive information systems
Executive
information systems make a variety of critical information readily available in
a highly summarized and convenient form, typically via a graphical digital
dashboard. Senior managers characteristically employ many informal sources of
information, however, so that formal, computerized information systems are only
of partial assistance. Nevertheless, this assistance is important for the chief
executive officer, senior and executive vice presidents, and the board of
directors to monitor the performance of the company, assess the business
environment, and develop strategic directions for the future. In particular,
these executives need to compare their organization‘s performance with that of
its competitors and investigate general economic trends in regions or
countries. Often individualized and relying on multiple media formats,
executive information systems give their users an opportunity to ―drill down‖
from summary information to increasingly focused details.
4 Acquiring information systems and services
Information
systems are a major corporate asset, with respect both to the benefits they
provide and to their high costs. Therefore, organizations have to plan for the
long term when acquiring information systems and services that will support
business initiatives. On the basis of long-term corporate plans and the
requirements of various individuals from data workers to top management,
essential applications are identified and project priorities are set. For
example, certain projects may have to be carried out immediately to satisfy a
new government reporting regulation or to interact with a new customer‘s
information system. Other projects may be given a higher priority because of
their strategic role or greater expected benefits.
Once the
need for a specific information system has been established, the system has to
be acquired. This is generally done in the context of the already existing
information systems architecture of the firm. The acquisition of information
systems can either involve external sourcing or rely on internal development or
modification. With today‘s highly developed IT industry, companies tend to
acquire information systems and services from specialized vendors. The
principal tasks of information systems specialists involve modifying the
applications for their employer‘s needs and integrating the applications to
create coherent systems architecture for the firm. Generally, only smaller
applications are developed internally. Certain applications of a more personal
nature may be developed where the programming environment supports simple
end-user enhancement.
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