Information and Decision Support Systems

1
Information and Decision Support Systems

• Chapter 5

2
Introduction

• Information is an organizations core asset. TPS
  capture a large amount of data. MIS and DSS
  process and refine that data to provide vital
  information to decision makers and problem
  solvers. As organizations reengineer business
  processes, information systems designed for
  decision-making are no longer used solely by
  managers.
• To empower employees to make their own decisions
  and solve their own problems, organizations must
  provide employees at all levels of the enterprise
  with timely information provided by these
  systems.
• This chapter discusses information systems used
  for decision-making and problem solving in
  business, including management information
  systems and decision support systems.

3
Principles and Learning Objectives

• Good decision-making and problem-solving skills
  are the key to developing effective information
  and decision support systems.
• Define the stages of problem solving processes.

4
Principles and Learning Objectives

• The management information system (MIS) must
  provide the right information to the right person
  in the right fashion at the right time.
• Define the term MIS and clearly distinguish the
  difference between a TPS and an MIS.
• Discuss information systems in the functional
  areas of business organizations.

5
Principles and Learning Objectives

• Decision support systems (DSSs) are used when the
  problems are more unstructured.
• List and discuss important characteristics of
  DSSs that give them the potential to be effective
  management support tools.
• Identify and describe the basic components of a
  DSS.

6
Principles and Learning Objectives

• Specialized support systems, such as group
  decision support systems (GDSSs) and executive
  support systems (ESSs), use the overall approach
  of a DSS in situations such as group and
  executive decision making.
• State the goals of a GDSS and identify the
  characteristics that distinguish it from a DSS.
• Identify the fundamental uses of an ESS and list
  the characteristics of such a system.

7
Decision Making and Problem Solving
8
Decision Making as a Component of Problem Solving
9
Problem Solving Approaches

• Optimization find the best solution
• Satisficing find a good solution
• Heuristics rules of thumb

10
Problem solving approaches example

• Computerized decision support systems can usually
  be used for both optimization and satisficing
  modeling. An optimization model finds the best
  solution in relation to the constraints,
  assumptions, and goals it was given. For
  example, an optimization model can find the
  optimal labor cost to produce a particular
  product and meet a specific level of profit,
  subject to the cost of raw materials and
  machinery. Profit level is a goal and costs are
  a constraint in the model.
• A satisficing model finds a good, but not
  necessarily the best, solution. Satisficing is
  used when optimization is too difficult, costly,
  or complex. Satisficing looks only at solutions
  that are likely to produce a good solution and
  can thus be done more easily and quickly than
  optimization, which involves an exhaustive search
  of all possible solutions.
• Heuristics, or rules of thumb, are often used in
  decision making. Heuristics are generally
  accepted guidelines, or guidelines developed
  through experience, that usually find a good
  solution. For example, you might follow a
  heuristic of taking an umbrella if it is cloudy,
  windy, and humid when you leave the house. Your
  experience has shown you that generally this
  results in having an umbrella when it rains.
  However, this isnt an optimal solution since
  sometimes you carry an umbrella unnecessarily and
  sometimes it rains on days when you dont have
  an umbrella. But the cost of finding an optimal
  solution is far too great in terms of time and
  money.

11
Optimization, Satisficing, and Heuristic
Approaches
12
An Overview of Management Information Systems
MIS- provides managers with information -support
for effective decision making -provide feedback
on daily operations
13
Inputs to an MIS
14
Outputs of an MIS
15
Outputs of an MIS
16
Characteristics of an MIS

• Fixed format, standard reports
• Hard-copy or soft-copy reports
• Input -Uses internal data from db /external
• User-developed reports
• Users must request formal reports from IS
  department

17
Functional Aspects of the MIS
Each management information system is an
integrated collection of subsystems, often
organized along functional lines of an
organization.
18
Functional Aspects of an MIS
19
Example - Financial MIS
20
Example - Manufacturing MIS
21
Example - Marketing MIS
22
Human Resource MIS
23
Other MIS

• Accounting management information systems
• Geographic information systems (GIS)

http//earth.google.com/ http//earth.google.com/i
ndustries.html
While an organizations transaction processing
system captures accounting data, the accounting
MIS provides summary information on various
aspects of the accounting system, such as
accounts payable or accounts receivable. A
geographic information system can collect, store,
manipulate and display geographic information.
In a geographic information system, data are
displayed according to their locations. Has a
sales clerk ever asked you for your zip code as
you pay for a product? When a retail store or
restaurant chain is considering opening a new
location, they may use a geographic information
system to determine where their potential
customers are located. By displaying a map, with
zip codes color coded to show the number of
customers traveling to the current store
location, a business can place the new store
close to the area where most of them live.
24
An Overview of Decision Support Systems
25
Characteristics of Decision Support Systems

• Handle large amounts of data from various sources
• Provide report and presentation flexibility
• Offer both textual and graphical orientation
• Support drill down analysis

26
Characteristics of a DSS

• Perform complex, sophisticated analysis
• Optimization, satisficing, heuristics
• Simulation
• What-if analysis
• Goal-seeking analysis

27
Capabilities of a DSS

• Support all problem-solving phases
• Support different decision frequencies
• Support different problem structures
• Support various decision-making levels

28
Example of DSS Applications
29
Support for Various Decision-Making Levels
30
Comparison of DSSs and MISs
31
Comparison of DSSs and MISs
32
Components of a DSS
33
Components of a DSS
34
The Model Base

• Part of DSS that provides decision maker access
  to a variety of models and assists them in
  decision making
• Model Management Software (MMS) software that
  coordinates the use of models in a DSS. I.e
  financial, statistical analysis, graphical etc.

35
The Model Base
36
Group Decision Support Systems
37
Group Decision Support System
38
Characteristics of a GDSS

• Special design
• Ease of use
• Flexibility
• Decision-making support (brainstorming, delphi,
  group consensus, nominal group)
• Anonymous input
• Reduction of negative group behavior
• Parallel communication
• Automated record keeping

39
GDSS Alternatives
40
Groupware Category
Same Place (face to face)
Different Place (distance)
Voting, Presentation support Chat
room
Teleconferencing Peer-to-peer or
Workflow process, Shared computers
E-mail
Same Time
Different Time
41
The Decision Room
42
Executive Support Systems
43
Executive Support Systems
44
Executive Support Systems (ESS) in Perspective

• Tailored to individual executives
• Easy to use- colour and graphic
• Drill down capabilities
• Support need for external data
• Can help when uncertainty is high
• Future-oriented
• Linked to value-added processes

45
Capabilities of an ESS

• Support for defining an overall vision
• Support for strategic planning
• Support for strategic organizing staffing
• Support for strategic control
• Support for crisis management

46
Summary

• Management information system - an integrated
  collection of people, procedures, databases, and
  devices that provide managers and decision-makers
  with information to help achieve organizational
  goals
• Decision-making phase includes intelligence,
  design, and choice
• Problem solving also includes implementation and
  monitoring
• Decision approaches optimization, satisficing,
  and heuristic

47
Summary

• Decision support system (DSS) - an organized
  collection of people, procedures, software,
  databases, and devices working to support
  managerial decision making
• Group decision support system (GDSS) - also
  called a computerized collaborative work system,
  consists of most of the elements in a DSS, plus
  software needed to provide effective support in
  group decision-making settings
• Executive support systems (ESSs) - specialized
  decision support systems designed to meet the
  needs of senior management

48
Activity

• Explore Google earth and find your own hometown
  and university
• Differentiate between DSS and GDSS by showing and
  application of the system