Better Decision Making through Expert Systems for Management

By Chau, Patrick Y. K. | SAM Advanced Management Journal, Autumn 1991 | Go to article overview

Better Decision Making through Expert Systems for Management


Chau, Patrick Y. K., SAM Advanced Management Journal


Computers have been tools used in managerial decision making for over 30 years. Electronic Data Processing (EDP) systems appeared in the mid-1950s, and Management Information Systems (MIS) followed in the '60s. Office Automation Systems (OAS) was developed mainly in the '70s, and Decision Support Systems (DSS) was introduced in the '70s and carried over into the '80s. Perhaps the hottest computerized decision aid in the '80s, however, was Expert Systems for Management (ESM). Many organizations, private and public, have been developing ESM to help their managers make better decisions (See sources 1, 3, 11, 12, 14, 15, 17).

This article presents an overview of ESM by discussing the following areas: * Basic concepts of ESM. * Appropriate tasks for ESM. * Major benefits of ESM to management. * Major steps and special computer facilities involved in building an ESM. * Barriers to building a successful ESM and remedies. * Points to be considered when planning to build an ESM.

Basic Concepts of ESM

An ESM is a software system designed to mimic the way human experts make managerial decisions. As shown in Figure 1, Expert Systems for Management belong to one of the three branches of Artificial Intelligence (AI). Early expert systems performed mainly medical diagnoses and geological prospecting. With the growing number of successful applications of expert systems in these areas, AI specialists began to think that this technology might also be used to help management make and implement decisions.

The basic idea behind an ESM is simple. The expertise of a human is transferred to a computer. Then, based on this vast body of task-specific knowledge stored in the computer, the system is able to make certain inferences and arrive at a specific conclusion. Moreover, the ESM usually explains the logic behind its conclusion.

An ESM has four key components: a knowledge base, an inference engine, a justifier, and a user interface (Figure 2). The knowledge base is derived form the expert's information and experience in the field and consists of two types of knowledge[9]. The first type, the "facts of domain," is knowledge shared and agreed upon among practitioners. The second type, heuristic knowledge, is a set of rules that directs the use of knowledge in solving specific problems. In other words, it is knowledge based on the practice and judgment the human expert has acquired over years of experience.

The second component, the inference engine, is the "brain'" of the ESM. Essentially, it is a computer program that provides a methodology for reasoning and formulating conclusions.[17] Simply put, it interprets the information in the knowledge base.

The third component of an ESM is the justifier.[6] It explains the actions of the system to the user, answering questions about why a particular conclusion was reached and why alternatives were rejected. It presents the whole chain of the decision-making process and the rules that were used to reach the conclusion. The final component is the user interface. It is the "mouth" of the ESM and covers all aspects of communication between user and the system. It normally operates through a dialogue--the system asks the user questions relating to the task. A "HELP" utility is usually provided to assist the user when he does not understand the question being asked. The interface is critical, as it directly influences how well the system will be accepted. If the interface is poorly designed, employees will use the system reluctantly, or not at all.

Appropriate Tasks for ESM

Not all tasks are appropriate for ESM. Tasks requiring creativity, discovery or innovation are not suitable, nor are managerial problems demanding everyday language or common sense. Since these tasks require human intelligence, they are too hard for ESMs. At the other extreme, tasks like recording and calculating payroll and basic tax returns, keeping inventory or doing simple statistical regression analysis do not justify the use of ESM. …

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