Week 2 Management Support Systems MSS

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Week 2Management Support Systems (MSS)

• Management and Decision Making
• Decision support framework
• Decision support technologies

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DECISION MAKING AND COMPUTERIZED SUPPORT

• Management Support Systems (MSS)
• Objectives
• Support managerial work.
• Support decision making.

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Managerial decision making and information systems

• Management is a process by which organizational
  goals are achieved through the use of resources.
• Resources Inputs
• Goal Attainment Output
• Measuring Success
• Productivity Outputs / Inputs

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Managerial decision making and information systems

• There are 4 major functions of manager in
  management theory i.e. planning, organizing,
  directing and controlling.
• Managerial decision is getting more complex for
  some reasons
• larger alternative space for decision options due
  to improved modern technology and communication
  systems.
• cost of making errors can be very large because
  of the complexity and magnitude of operations,
  automation and chain reaction or even legal
  issues.
• continuous in fluctuating environment and more
  uncertainty in several impacting elements.

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System Effectiveness and Efficiency

• Two Major Classes of Performance Measurement
• Effectiveness is the degree to which goals are
  achievedDoing the right thing!
• Efficiency is a measure of the use of inputs (or
  resources) to achieve outputsDoing the thing
  right!
• MSS emphasize effectiveness.

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Computer Applications Evolvingfrom TPS and MIS?
Proactive Applications (DSS)

• New modern management tools in
• Data access
• Online analytical processing (OLAP)
• Internet / Intranet / Web for decision support

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Need for Computerized Decision Support and the
Supporting Technologies

• Speedy computations. A computer allows the
  decision maker to perfom large numbers of
  computations very quickly and at low cost. Timely
  decicions are critical for many situations,
  ranging from a physicians decision in an
  emergency room to that of a stock trader.
• Increrased productivity. Assembling a group of
  decision makers, especially experts, may be
  costly. Computerized support can reduce the size
  of the group and enable the group members to be
  at different locations (sasving travel cost).
  Also, the productivity of staff support (such as
  financial and legal analysts) may be incresed.

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Need for Computerized Decision Support and the
Supporting Technologies

• Technical support. Many decisions involve complex
  computations. Data can be store in different
  database and at Web sites possibly outside the
  organization. The data may include sound and
  graphics, and there may be need transmit them
  quickly from distant locations. Computers can
  search, store, and transmit needed data quickly
  and economically.
• Overcoming cognitive limits in processing and
  stroge. According to Simon (1997), the human mind
  is limited in its ability to process and
  information. Also, people may have difficulty in
  recalling information in an errorfree fashion
  when it is needed.

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Decision-making Process
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Three Phase Decision-making Process (Simon)

• Intelligence--searching for conditions that call
  for decisions
• Design--inventing, developing, and analyzing
  possible courses of action
• Choice--selecting a course of action from those
  available

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Decision Making Along a Continuum (Simon)
Highly Unstructured (Nonprogrammed) Decisions
Highly Structured (Programmed) Decisions
Semistructured Decisions
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Decision Making Problem (Simon)

• Unstructured problem has no structured phases
• problems often solved with human intuition
• Semistructured problem has some (or some parts
  with) structured phases
• solve with standard solution procedures and human
  judgment
• Structured problem has all structured phases
• procedures for obtaining the best solution are
  known
• objectives are clearly defined
• management support systems can be useful

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Decision Support Technologies

• Management Support Systems (MSS)
• Decision Support Systems (DSS)
• Group Support Systems (GSS)
• Enterprise (Executive) Information Systems (EIS)
• Enterprise Resource Planning (ERP) and
  Supply-Chain Management (SCM)
• Knowledge Management Systems
• Expert Systems (ES)
• Artificial Neural Networks (ANN)
• Hybrid Support Systems
• Intelligent DSS

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Decision Support Framework
Type of Control
Operational Managerial Strategic
Control Control Control
Type of Decision
Budget analysis, short-term forecasting,
personnel reports, make or buy
Accounts receivable, order entry
Financial management (investment), warehouse
location, distribution systems
Structured Semistructured Unstructured
Credit evaluation, budget preparation, plant
layout, project scheduling, reward system design
Building new plants, acquisition, new product
planning, compensation planning, quality
assurance planning
Production scheduling, inventory control
Selecting cover for magazines, buying software,
approve loans
Negotiating, recruiting an executive, buying
hardware
RD planning, new technology development, social
responsibility planning
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Types of decision The technology support
Type of Control
Operational Managerial Strategic Control
Control Control
Technology support needed
Type of Decision
Structured Semistructured Unstructured
MIS, TPS
DSS, KMS
IDSS, ES, ANN, FL, CBR
MIS, Management Science
Management Science, DSS, ES, EIS
EIS, ES, ANN, KMS
Technology support needed
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Typical Business Decision Aspects

• Decision may be made by a group
• Group member biases
• Several, possibly contradictory objectives
• Many alternatives
• Results can occur in the future
• Attitudes towards risk
• Gathering information takes time and expense
• Too much information
• What-if scenarios
• Trial-and-error experimentation with the real
  system may result in a loss
• Changes in the environment can occur continuously