Business Intelligence and Analytics:

Systems for Decision Support

(10th Edition)
Business Intelligence and Analytics:
Systems for Decision Support
(10th Edition)
 PART I Decision Making and
Analytics: An Overview

► Chapter 1: An Overview of Business

Intelligence, Analytics, and Decision Support
► Chapter 2 : Foundations and Technologies for
Decision Making...

(Continued…)
 PART II Descriptive Analytics

► Chapter 3 Data Warehousing

► Chapter 4 Business Reporting, Visual Analytics,
and Business Performance Management

(Continued…)
 PART Ill Predictive Analytics

► Chapter 5 : Data Mining

► Chapter 6 : Techniques for Predictive Modeling
► Chapter7: Text Analytics, Text Mining, and Sentiment
Analysis
► Chapter 8: Web Analytics, Web Mining, and Social
Analytics

(Continued…)
 PART IV Prescriptive Analytics

► Chapter 9 : Model-Based Decision Making:

Optimization and MultiCriteria Systems
► Chapter 10: Modeling and Analysis: Heuristic Search
Methods and Simulation
► Chapter 11: Automated Decision Systems and Expert
Systems
► Chapter 12: Knowledge Management and
Collaborative Systems
(Continued…)
 PART V Big Data and Future Directions for
Business Analytics

► Chapter 13 : Big Data and Analytics

► Chapter14: Business Analytics: Emerging Trends
and Future Impacts

(Continued…)
 What is a Decision Support System
(DSS)?
► A Decision Support System (DSS) is a computer-based system that
helps in decision-making by collecting, processing, and presenting
relevant information. It doesn’t replace the decision-maker — it
supports and enhances human judgment.
► Key Point: DSS is used when decisions are complex,
semi-structured, and require analytical thinking.
► "Decision Support Systems are not just about technology — they're
about empowering people to make smarter, faster, and more
informed decisions. As future managers, entrepreneurs, and
analysts, understanding how to use and design these systems will
give you a competitive edge."
 Think critically about the following:

1. Where do you see Decision Support Systems in real life or in business?

o Example: Airline ticket pricing, loan approval systems, hospital patient
management.
2. How is DSS different from traditional reporting systems or databases?
o Hint: Think about interactivity, simulation, and "what-if" analysis.
3. Can technology always improve decision-making? Why or why not?
o Consider biases, over-reliance, or ethical challenges.
4. What are the risks of using DSS?
o Example: Wrong input data, model limitations, user dependency.
An Overview of Business Intelligence,
Business Intelligence
Analytics, and Support
and Decision Analytics:
Systems for Decision Support
th
CHAPTER -1
(10 Edition)
 Learning Objectives

► Understand today’s turbulent business environment

and describe how organizations survive and even
excel in such an environment (solving problems and
exploiting opportunities)
► Understand the need for computerized support of
managerial decision making
► Understand an early framework for managerial
decision making
► ... (Continued…)
 Learning Objectives

► Learn the conceptual foundations of the DSS

methodology
► Describe the BI methodology and concepts and
relate them to DSS
► Understand the various types of analytics
► List the major tools of computerized decision
support
 Opening Vignette…

Magpie Sensing Employs Analytics to Manage

a Vaccine Supply Chain Effectively and Safely
► Company background
► Problem
► Proposed solution and results
► Answer & discuss the case questions...
 Opening Vignette…

Questions for the Opening Vignette

1. What information is provided by the descriptive analytics employed
at Magpie Sensing?
2. What type of support is provided by the predictive analytics
employed at Magpie Sensing?
3. How does prescriptive analytics help in business decision making?
4. In what ways can actionable information be reported in real time to
concerned users of the system?
5. In what other situations might real-time monitoring applications be
needed?
 Changing Business Environment & Computerized
Decision Support

Why are Companies moving aggressively to computerized

support of their operations ?
► Business environment/ Pressures–> Responses–>
Support Model
• Business environment/ pressures : result of today's
competitive business
• Responses : Action taken to counter the pressures
• Support : Computerized support to facilitate the process
 The Business Environment
► The environment in which organizations operate today is
becoming more and more complex, creating
► opportunities, and problems.
► Example: globalization, competitions
► Business environment factors can be divided into four
categories
► markets, consumer demands, technology, and societal…
Business Environment Factors that create pressure on
organization
FACTOR DESCRIPTION
Markets Strong competition
Expanding global markets
Blooming electronic markets on the Internet
Innovative marketing methods
Opportunities for outsourcing with IT support
Need for real-time, on-demand transactions
Consumer Desire for customization
Demand Desire for quality, diversity of products, and speed of delivery
Customers getting powerful and less loyal
Technology More innovations, new products, and new services
Increasing obsolescence rate
Increasing information overload
Social networking, Web 2.0 and beyond
Societal Growing government regulations and deregulation
Workforce more diversified, older, and composed of more women Prime
concerns of homeland security and terrorist attacks Necessity of Sarbanes- Oxley Act
and other reporting-related legislationIncreasing social responsibility of companies
Greater emphasis on sustainability
 Organizational Responses
► Organization uses different actions to counter the pressure
► Be Reactive, Anticipative, Adaptive, and Proactive
► Managers may take actions, such as
► Employ strategic planning.
► Use new and innovative business models.
► Restructure business processes.
► Participate in business alliances.
► Improve corporate information systems.
► … more [in your book]
 Closing the Strategy Gap

One of the major objectives of computerized decision support

is to facilitate closing the gap between the current performance
of an organization and its desired performance, as expressed in
its mission, objectives, and goals, and the strategy to achieve
them.
In order to understand why Computerized support systems is
needed and how it is provided , especially for decision making
support , lets look at managerial decision making
 Managerial Decision Making
► Management is a process by which organizational goals are
achieved by using resources.
► Inputs: resources
► Output: attainment of goals
► Measure of success: outputs / inputs
► Management ≅ Decision Making ( Managers engage in a
continuous process of making decision. Decision making:
selecting the best solution from two or more alternatives )
 Decision-Making Process

Managers usually make decisions by following a four-step

process (scientific approach)

1. Define the problem (or opportunity)

2. Construct a model that describes the real-world problem.
3. Identify possible solutions to the modeled problem and evaluate
the solutions.
4. Compare, choose, and recommend a potential solution to the
problem.
An Early Decision Support Framework (by Gory
and Scott-Morten, 1971)
 An Early Decision Support Framework
► Degree of Structuredness (Simon, 1977)
► Decisions are classified as
► Highly structured ( programmed)
► Semi-structured
► Highly unstructured (i.e., nonprogrammed)
► Types of Control (Anthony, 1965)
► Strategic planning (top-level, long-range)
► Management control (tactical planning)
► Operational control
 THE DECISION SUPPORT MATRIX
Nine-cell decision support matrix was to suggest different types of computerized
support to different cells in the matrix
► Computer Support for Structured Decisions : Structured problems, which are
encountered repeatedly, have a high level of structure. It is therefore possible to
abstract, analyse, and classify them into specific categories. Computers have
historically supported structured and some semi-structured decisions,
especially those that involve operational and managerial control.
► Computer Support for Semistructured Problems : Solving semistructured
problems may involve a combination of standard solution procedures and human
judgment. Management science can provide models for the portion of a
decision-making problem that is structured. For the unstructured portion, a DSS
can improve the quality of the information on which the decision is based by
providing, for example, not only a single solution but also a range of alternative
solutions, along with their potential impacts.
 THE DECISION SUPPORT MATRIX

► Computer Support for Unstructured Decisions : Unstructured

problems can be only partially supported by standard computerized
quantitative methods. It is usually necessary to develop customized
solutions. However, such solutions may benefit from data and
information generated from corporate or external data sources.
Intuition and judgment may play a large role in these types of
decisions, as may computerized communication and collaboration
technologies, as well as knowledge management
 The Concept of DSS

In the early 1970s, Scott-Morton first articulated the major concepts of

DSS. He defined decision support systems (DSS) as "interactive
computer-based systems, which help decision makers utilize data and
models to solve unstructured problems.
The term decision support system, like management information system
(MIS) and other terms in the field of IT, is a content-free expression.
Therefore, there is no universally accepted definition of DSS.
Actually, DSS can be viewed as a conceptual methodology-that is, a
broad, umbrella term.
 27
DSS as a Specific Application

► In a narrow sense DSS refers to a process for building

customized applications for unstructured or semi-structured
problems
► Components of the DSS Architecture
► Data, Model, Knowledge/Intelligence, User, Interface.
► DSS often is created by putting together loosely coupled
instances of these components
 High-Level Architecture of DSS
28

❖Data can come from many sources. Data are the first component of DSS and relate
to specific situation manipulated by Models.
❖Knowledge is the third components.
❖User are the vital fourth components interfacing with the systems.
❖Interfacing with the system via a user interface is the fifth components
❖All components ‘glue’ them together to build DSS.
 Definition of BI

► BI is an umbrella term that combines architectures, tools, databases,

analytical tools, applications, and methodologies
► BI is a content-free expression, so it means different things to different
people
► Bi's major objective is to enable interactive access (sometimes in real
time) to data, to enable manipulation of data, and to give business
managers and analysts the ability to conduct appropriate analyses. By
analysing historical and current data, situations, and performances,
decision makers get valuable insights that enable them to make more
informed and better decisions. The process of BI is based on the
transformation of data to information, then to decisions, and finally to
actions.
 A Brief History of BI

► The term BI was coined by the Gartner Group in the

mid-1990s
► However, the concept is much older
► 1970s - MIS reporting - static/periodic reports
► 1980s - Executive Information Systems (EIS)
► 1990s - OLAP, dynamic, multidimensional, ad-hoc
reporting -> coining of the term “BI”
► 2010s - Inclusion of AI and Data/Text Mining capabilities;
Web-based Portals/Dashboards, Big Data, Social Media,
Analytics
► 2026s - yet to be seen
The Evolution of BI Capabilities
A High-Level Architecture of BI
 Components in a BI Architecture 33
► The data warehouse is a large repository of well-organized
historical data
► Business analytics are the tools that allow transformation of
data into information and knowledge
► Business performance management (BPM) allows
monitoring, measuring, and comparing key performance
indicators like sale, profit, cost, and others. It embraces
process planning, forecasting etc.
► User interface (e.g., dashboards) allows access and easy
manipulation of other BI components
The DSS–BI Connection 34

► First, their architectures are very similar because BI evolved

from DSS
► BI implies the use of a Data Warehouse, Where DSS may or may
not
► Second, DSS directly support specific decision making, while BI
provides accurate and timely information, and indirectly support
decision making
► Third, BI has an executive and strategy orientation, especially in
its BPM and dashboard components, while DSS, in contrast, is
oriented toward analysts
 The DSS–BI Connection – cont. 35
► Fourth, most BI systems are constructed with commercially
available tools and components, while DSS is often built
from scratch
► Fifth, DSS methodologies and even some tools were
developed mostly in the academic world, while BI
methodologies and tools were developed mostly by software
companies
► Sixth, many of the tools that BI uses are also considered DSS
tools (e.g., data mining and predictive analysis are core tools
in both)
 36
The DSS–BI Connection – cont.
► Although some people equate DSS with BI, these
systems are not, at present, the same
► some people believe that DSS is a part of BI—one of its
analytical tools
► others think that BI is a special case of DSS that deals
mostly with reporting, communication, and collaboration (a
form of data-oriented DSS)
► BI is a result of a continuous revolution and, as such, DSS is
one of BI's original elements
► In this book, we separate DSS from BI
 BUSINESS ANALYTICS OVERVIEW
37
Analytics represents the combination of computer technology, management science techniques, and
statistics to solve real problems. to understand what is happening, what will happen, and how to make
the best of it has also been encapsulated by INFORMS in proposing three levels of analytics. These
three levels are identified as descriptive, predictive, and prescriptive.
 BUSINESS ANALYTICS OVERVIEW

Descriptive or reporting analytics refers to knowing what is happening in the

organization and understanding some underlying trends and causes of such
occurrences.

Predictive analytics aims to determine what is likely to happen in the future. This
analysis is based on statistical techniques as well as other more recently developed
techniques that fall under the general category of data mining.

Prescriptive analytics. The goal of prescriptive analytics is to recognize what is

going on as well as the likely forecast and make decisions to achieve the best
performance possible. This group of techniques has historically been studied under
the umbrella of operations research or management sciences and has generally
been aimed at optimizing the performance of a system.
 Let's develop a comprehensive Business
Plan for your project/ Business and
integrate it with a Decision Support System
(DSS) to enhance strategic
decision-making."