4 Basic Concepts of Artificial Intelligence 4 Components of a Decision Support System (DSS) 4 Major Components of Business Intelligence (BI)

1. Machine Learning • Database Management Subsystem • Data Warehouse

2. Deep Learning • Model Management Subsystem • Business Analytics
3. Neural Networks • User Interface Subsystem • Business Performance Management (BPM)
4. Cognitive Computing • Knowledge-Based Management Subsystem • User Interface

4 types of Organizational Decisions

A collection of tools for manipulating, mining, and analyzing A process by which organization goals are achieved by using
• High-risk decisions data in the data warehouse resources
• Cross-cutting decisions
• Ad hoc decisions Business Analytics Management
• Decisions delegated to small groups

AI focused on augmenting and improving human cognitive

A simplified representation or abstraction of reality Aims to determine what is likely to happen in the future.
abilities
Model Predictive Analytics
Augmented Intelligence

An umbrella term that combines architectures, tools, Another type of Business Analytics which aims to uncover
An evolution of decision support concepts over time
database analytical tools, applications, and methodologies reasons behind events
Business Intelligence (BI)
Business Intelligence (BI) Diagnostic Analytics

Are AIs that are fully adaptive and have an extensive ability Are based on the fact that, given some parameters, there is a Belong to the family of Machine Learning algorithms and
to learn and retain past experiences way to combine them to produce a specific result. are inspired by the functioning of neurons in the human brain

Theory-of-mind AI Neural Networks Neural Networks

Business Environment Factors

Consists of systems that take on tasks or make specific
decisions as assistants or substitutes for people, as they can
• Markets Descriptive Analytics is also known as
handle ambiguity and vagueness, and have a high degree of
• Consumer Demand autonomy within their area of knowledge
• Technology Reporting
• Societal Cognitive Computing
 Four-step process in Decision-Making

1. Define the problem Have emerged to aid individuals and organizations in Helps transform data to information, to decisions, and then
2. Construct a model that describes the real-world making informed and effective decisions. finally, to action
problem
3. Identify & evaluate possible solutions Computerized Decision Support Framework Business Intelligence (BI)
4. Compare, choose, and recommend a potential solution

Interactive computer-based systems, which help decision

In this phase, the decision maker examines reality and Involves defining long-range goals and policies for resource
makers utilize data and models to solve unstructured
identifies the problem allocation
problems
Intelligence Phase Strategic Planning
Decision Support System (DSS)

Involves the acquisition and efficient use of resources in the Is an AI, that as the name suggests, becomes sentient and
Is AI that works only in narrow domains
accomplishment of organizational goals aware of its own existence
Assisted Intelligence
Managerial Control Self-aware AI

Is defined as
Is the type of knowledge that is not easily expressed in
• Technology that can learn to do things better over time Is one of the most important activity in organizations of all words or formalized. It is highly personal, context-specific,
• Technology that can understand human language kinds and often rooted in personal experiences, insights, and
• Technology that can answer questions intuitions.
Decision Making
Tacit Knowledge
Artificial Intelligence

Its goal is to recognize what is going on as well as the likely

It helps aid in complex decision-making by providing Learning based on both labeled and unlabeled training data,
forecast and make decisions to achieve the best performance
insights and recommendations with the proportion of unlabeled data typically being larger
possible.
Decision Support Systems (DSS) Semi-Supervised Learning
Prescriptive Analytics

Learning by observing, understanding, and abstracting Learning by receiving a lot of labeled training data that Learning from experience through trial-and-error & reward-
patterns directly from information allows generalizing in new cases. punishment

Unsupervised learning Supervised Learning Reinforcement Learning

 Mintzberg's 10 Managerial Roles

Interpersonal

1. Figurehead
2. Leader
3. Liaison

Informational
Phase wherein the actual decision and the commitment to Phase which includes the selection of a proposed solution to
1. Monitor follow a certain course of action is made the model
2. Disseminator
Choice Phase Choice Phase
3. Spokesperson

Decisional

1. Entrepreneur
2. Disturbance Handler
3. Resource Allocator
4. Negotiator

Predictive Analytics Process

Possible influences/factors in Decision-Making
• Problem Definition
• Political • Data Collection Problem ownership is established in this phase
• Economic • Data Preprocessing
• Sociological/Psychological (regarding • Model Development Design Phase
employee/customers) • Model Evaluation
• Environmental • Model Deployment
• Monitoring & Maintenance

Quain's (2018) steps in Decision-Making

1. Understand the decision you have to make. Refers to knowing what is happening in the organization and
2. Collect all the information. Refers to the efficient and effective execution of specific
understanding some underlying trends and causes of such
3. Identify the alternatives. tasks
occurrences.
4. Evaluate the pros and cons.
5. Select the best alternative. Operational Control
Descriptive Analytics
6. Make the decision.
7. Evaluate the impact of your decision
 Simon's Process (1977) - Four Major Phases

Rely on Neural Networks for cascading data processing Selecting the best solution from two or more alternatives • Intelligence
• Design
Deep Learning Decision-Making • Choice
• Implementation

The idea that systems can learn from data, identify patterns The idea that systems can learn from data, identify patterns, The person who stated that managerial decision making is
and make decisions with minimal human intervention and make decisions with minimal human intervention synonymous with the entire management process

Machine Learning Machine Learning Simon (1977)

The process of developing actionable decisions or

The user communicates with and commands the DSS This phase begins with the identification of organizational
recommendations for actions based on insights generated
through this subsystem. goals and objectives related to an issue of concern
from historical data
User Interface Subsystem Intelligence Phase
Analytics

This subsystem includes a database that contains relevant

This phase involves finding or developing and analyzing This subsystem can support any of the other subsystems or
data for the situation and is managed by software called the
possible courses of action act as an independent component
database management system (DBMS)
Design Phase Knowledge-Based Management Subsystem
Database Management Subsystem

This subsystem is the component that includes financial,

This subsystem provides intelligence to augment the
statistical, management science, or other quantitative models This type of knowledge can be codified, documented, and
decision maker’s own or to help understand a user’s query so
that provide the system’s analytical capabilities and easily transferred in the form of data, facts, or information
as to provide a consistent answer
appropriate software management.
Explicit Knowledge
Knowledge-Based Management Subsystem
Model Management Subsystem

Type of Analytics which answers the questions

Type of AI that can adapt to past experiences or update itself Type of AI that uses algorithms to optimize outputs based on
based on new observations or data a set of inputs • What happened?
• What is happening?
Limited Memory AI Reactive AI
Descriptive
 Type of Business Analytic which deals with
Type of Analytics which answers the questions Type of Analytics which answers the questions
• Business Reporting
• What should I do? • What will happen? • Dashboards
• Why should I do it? • Why will it happen? • Scorecards
• Data Warehousing
Prescriptive Predictive
Descriptive

Type of Business Analytics which deals with Type of Business Analytics which deals with
Type of Business Analytics
• Data Mining • Optimization
• Descriptive • Text Mining • Simulation
• Predictive • Web/Media Mining • Decision Modeling
• Prescriptive • Forecasting • Expert Systems
• Diagnostic
Predictive Prescriptive

Type of Business Analytics which outlines accurate Type of Business Analytics which outlines the best possible Type of Business Analytics which outlines well-defined
projections of future events and outcomes business decisions and actions business problems and opportunities

Predictive Prescriptive Descriptive

Types of Control (Gory & Scott-Morten, 1971) Types of Decisions (Gory & Scott-Morten, 1971)

Who coined the term Business Intelligence (BI)?

• Operational Control • Structured
• Managerial Control • Semistructured Gartner Group (mid-1990s)
• Strategic Planning • Unstructured

Who created the Decision Support Framework?

Gorry & Scott Morton