question - business intelligence

10 Part I • Introduction to Analytics and AI

the relationships among all the variables. The model is then validated, and criteria are de- termined in a principle of choice for evaluation of the alternative courses of action that are identified. Often, the process of model development identifies alternative solutions and vice versa.

The choice phase includes the selection of a proposed solution to the model (not necessarily to the problem it represents). This solution is tested to determine its viability. When the proposed solution seems reasonable, we are ready for the last phase: imple- mentation of the decision (not necessarily of a system). Successful implementation results in solving the real problem. Failure leads to a return to an earlier phase of the process. In fact, we can return to an earlier phase during any of the latter three phases. The decision- making situations described in the opening vignette follow Simon’s four-phase model, as do almost all other decision-making situations.

The Intelligence Phase: Problem (or Opportunity) Identification

The intelligence phase begins with the identification of organizational goals and objectives related to an issue of concern (e.g., inventory management, job selection, lack of or incorrect Web presence) and determination of whether they are being met. Problems occur because of dissatisfaction with the status quo. Dissatisfaction is the result of a difference between what people desire (or expect) and what is occurring. In this first phase, a decision maker attempts to determine whether a problem exists, identify its symptoms, determine its magnitude, and

Success

Organization objectives Search and scanning procedures Data collection Problem identification Problem ownership Problem classification Problem statement

Solution to the model Sensitivity analysis Selection to the best (good) alternative(s)

Plan for implementation

Formulate a model Set criteria for choice Search for alternatives Predict and measure outcomes

Assumptions

Simplification

Problem Statement

Alternatives

Validation of the Model

Verification, Testing of the Proposed Solution

Implementation of the solution

Failure

Intelligence

Design

Choice

Reality

FIGURE 1.1 The Decision-Making/Modeling Process.