CHAPTER 12 ENHANCING DECISION MAKING

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CHAPTER 12 ENHANCING DECISION MAKING
Roadmap

• DECISION MAKING AND INFORMATION SYSTEMS
• Business Value of Improved Decision Making
• Types of Decisions
• The Decision-Making Process
• Managers and Decision Making in the Real World
• SYSTEMS FOR DECISION SUPPORT
• Management Information Systems (MIS)
• Decision-Support Systems (DSS)
• Business Value of DSS
• Data Visualization and Geographic Information
  Systems (GIS)
• Web-Based Customer Decision-Support Systems
• EXECUTIVE SUPPORT SYSTEMS (ESS)
• The Role of Executive Support Systems in the Firm
• Business Value of Executive Support Systems
• Executive Support Systems and the Digital Firm
• GROUP DECISION-SUPPORT SYSTEMS (GDSS)
• What is a GDSS?
• Overview of a GDSS Meeting

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LEARNING OBJECTIVES

• Are there any special systems that can facilitate
  decision making among senior managers? Exactly
  what can these systems do to help high-level
  management?
• What benefits can systems that support management
  decision making provide for the organization as a
  whole?

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LEARNING OBJECTIVES

• Building information systems that can actually
  fulfill executive information requirements
• Create meaningful reporting and management
  decision-making processes

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MANAGEMENT CHALLENGES

• Building information systems that can actually
  fulfill executive information requirements
• Create meaningful reporting and management
  decision-making processes

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DECISION SUPPORT SYSTEMS (DSS)

• Computer system at the management level of an
  organization
• Combines data, analytical tools, and models
• Supports semistructured and unstructured
  decisionmaking

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Management Information Systems

• MIS
• Provides reports based on routine flow of data
• Assists in general control of the organization

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DSS vs. MIS
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DECISION SUPPORT SYSTEM

• MODEL DRIVEN DSS Uses models for what-if and
  other analysis
• DATA-DRIVEN DSS Allows extraction, analysis of
  information from databases
• DATAMINING
• Finds hidden patterns and relationships in large
  databases to infer rules
• Knowledge discovery

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DECISION SUPPORT SYSTEM
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DECISION SUPPORT SYSTEM

• DATA MINING Technology for finding relationships
  in large data bases for prediction
• DSS SOFTWARE SYSTEM Tools for data analysis
• SENSITIVITY ANALYSIS What-if questions about
  changes in model factors

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DECISION SUPPORT SYSTEM
APPLICATIONS

• SUPPLY CHAIN MANAGEMENT
• CUSTOMER RELATIONSHIP MANAGEMENT
• SIMULATING BUSINESS SCENARIOS

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DSS for Customer Relationship Management

• Uses data mining to guide decisions
• Consolidates customer information into massive
  data warehouses
• Uses various analytical tools to slice
  information into small segments

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DSS in Supply Chain Management

• Comprehensive examination of supply management
  chain
• Searches for most efficient and cost-effective
  combination
• Reduces overall costs
• Increases speed and accuracy of filling customer
  orders

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DECISION SUPPORT SYSTEM

• GEOGRAPHIC INFORMATION SYSTEM (GIS) Software to
  display digital maps
• WEB-BASED DSS Available on Internet for
  decisions, information, software
• CUSTOMER DSS (CDSS) System supports buying
  decisions of customers

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GROUP DECISION-SUPPORT SYSTEM (GDSS)

• INTERACTIVE COMPUTER-BASED SYSTEM FACILITATES
  SOLUTION OF UNSTRUCTURED PROBLEMS BY DECISION
  MAKERS WORKING AS GROUP

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GDSS ENHANCED DECISION MAKING

• ALLOWS Improved pre-planning
• Increased participation
• Open, collaborative atmosphere
• Idea generation free of criticism
• Evaluation objectivity
• Idea organization evaluation

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GDSS ENHANCED DECISION MAKING

• ALLOWS Setting priorities decision making
• Documentation of meetings
• Access to external information
• Preservation of organizational memory

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TOOLS OF GDSS

• ELECTRONIC QUESTIONNAIRES
• ELECTRONIC BRAINSTORMING
• IDEA ORGANIZERS
• QUESTIONNAIRE TOOLS
• TOOLS FOR VOTING, SETTING PRIORITIES

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TOOLS OF GDSS

• STAKEHOLDER IDENTIFICATION ANALYSIS TOOLS
• POLICY FORMATION TOOLS
• GROUP DICTIONARIES

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ELECTRONIC MEETING SYSTEM (EMS)

• COLLABORATIVE GDSS Uses information
  technology to make group meetings more productive
  facilitates communication decision making

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How GDSS can Enhance Group Decision-Making

• Improved preplanning
• Increased participation
• Open, collaborative meeting atmosphere
• Criticism-free idea generation
• Evaluation objectivity

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EXECUTIVE SUPPORT SYSTEMS (ESS)

• STRATEGIC INFORMATION SYSTEM DESIGNED FOR
  UNSTRUCTURED DECISION MAKING THROUGH ADVANCED
  GRAPHICS AND COMMUNICATIONS

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EXECUTIVE SUPPORT SYSTEMS

• DRILL DOWN ability to move from summary to lower
  levels of detail
• Designed for specific needs of CEO
• Extensive support staff
• Executive has 24 hour per day ability to examine,
  control progress throughout organization

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EXECUTIVE SUPPORT SYSTEMS

• BENEFITS
• FLEXIBILITY
• ABILITY TO ANALYZE, COMPARE, HIGHLIGHT TRENDS
• GRAPHICS HELP EXPLORE SITUATION
• MONITOR PERFORMANCE
• TIMELINESS, AVAILABILITY OF DATA ALLOWS PROMPT
  ACTION

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EXECUTIVE SUPPORT SYSTEMS

• USES IN A DIGITAL FIRM
• BUSINESS INTELLIGENCE Info on salespeople,
  distributors, retailers
• MONITORING BUSINESS PERFORMANCE Balanced
  scorecard shows perspectives of customers,
  internal processes, learning, growth
• ENTERPRISE WIDE REPORTING ANALYSIS

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ESS for business intelligence

• Identifies changing market conditions
• Formulates responses
• Tracks implementation efforts
• Learns from feedback

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So What?

• Managers are responsible for creating support
  systems to help them
• Know which type of support system will be best
  for you and what information you will need
• Use the appropriate methodology