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Fundamentals of Information Systems Fourth Edition

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Title: Fundamentals of Information Systems Fourth Edition


1
Fundamentals of Information SystemsFourth Edition
  • Chapter 6
  • Information and Decision Support Systems

2
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 decision making
  • Discuss the importance of implementation and
    monitoring in problem solving

3
Principles and Learning Objectives (continued)
  • The management information system (MIS) must
    provide the right information to the right person
    in the right format at the right time
  • Explain the uses of MISs and describe their
    inputs and outputs
  • Discuss information systems in the functional
    areas of business organizations

4
Principles and Learning Objectives (continued)
  • Decision support systems (DSSs) are used when the
    problems are 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

5
Principles and Learning Objectives (continued)
  • Specialized support systems, such as group
    support systems (GSSs) 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 GSS 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

6
Why Learn About Information and Decision Support
Systems?
  • True potential of ISs is to help employees make
    more informed business decisions
  • These systems can cut costs, increase profits,
    uncover new opportunities
  • Examples
  • Transportation coordinator can find least
    expensive way to ship products
  • Loan manager can determine creditworthiness
  • Store managers can better maintain inventory

7
Decision Making and Problem Solving Decision
Making as a Component of Problem Solving
  • Decision-making phase first part of
    problem-solving process
  • Intelligence stage identify and define potential
    problems or opportunities
  • Design stage develop alternative solutions to
    the problem
  • Choice stage select a course of action

8
Decision Making as a Component of Problem Solving
(continued)
Figure 6.1 How Decision Making Relates to
Problem Solving
9
Decision Making as a Component of Problem Solving
(continued)
  • Problem solving includes decision making and the
    implementation and monitoring stages
  • Implementation stage solution is put into effect
  • Monitoring stage decision makers evaluate the
    implementation

10
Programmed Versus Nonprogrammed Decisions
  • Programmed decision
  • Decision made using a rule, procedure, or
    quantitative method
  • Easy to computerize using traditional information
    systems

11
Programmed Versus Nonprogrammed Decisions
(continued)
  • Nonprogrammed decisions
  • Decision that deals with unusual or exceptional
    situations
  • Not easily quantifiable

12
Optimization, Satisficing, and Heuristic
Approaches
  • Optimization model process to find the best
    solution, usually the one that will best help the
    organization meet its goals
  • Satisficing model find a goodbut not
    necessarily the bestproblem solution
  • Heuristics commonly accepted guidelines or
    procedures that usually find a good solution

13
Optimization, Satisficing, and Heuristic
Approaches (continued)
Figure 6.2 Optimization Software
14
Sense and Respond
  • Sense and Respond (SaR) determining problems or
    opportunities (sense) and developing systems to
    solve the problems or take advantage of the
    opportunities (respond)
  • Requires nimble organizations with lines of
    authority that are flexible and dynamic

15
An Overview of Management Information Systems
  • Management information system (MIS) integrated
    collection of people, procedures, databases, and
    devices
  • Provides managers and decision makers with
    information to help achieve organizational goals
  • Can give companies a competitive advantage by
    providing the right information to the right
    people in the right format and at the right time

16
Management Information Systems in Perspective
  • MIS provides managers with information that
    supports effective decision making and provides
    feedback on daily operations
  • Use of MISs spans all levels of management

17
Management Information Systems in Perspective
(continued)
Figure 6.3 Sources of Managerial Information
18
Inputs to a Management Information System
  • Internal data sources
  • TPSs and ERP systems and related databases
  • Data warehouses and data marts
  • Specific functional areas throughout the firm
  • External data sources
  • Customers, suppliers, competitors, and
    stockholders whose data is not already captured
    by the TPS
  • The Internet
  • Extranets

19
Outputs of a Management Information System
Figure 6.4 An Executive Dashboard
20
Outputs of a Management Information System
(continued)
  • Scheduled report produced periodically, or on a
    schedule
  • Key-indicator report summary of the previous
    days critical activities
  • Demand report developed to give certain
    information at someones request
  • Exception report automatically produced when a
    situation is unusual or requires management
    action
  • Drill-down report provides increasingly detailed
    data about a situation

21
Outputs of a Management Information System
(continued)
Figure 6.5 Reports Generated by an MIS
22
Outputs of a Management Information System
(continued)
Table 6.1 Guidelines for Developing MIS Reports
23
Functional Aspects of the MIS
  • Most organizations are structured along
    functional lines or areas
  • MIS can be divided along functional lines to
    produce reports tailored to individual functions

24
Functional Aspects of the MIS (continued)
Figure 6.6 An Organizations MIS
25
Financial Management Information Systems
  • Financial MIS provides financial information not
    only for executives but also for a broader set of
    people who need to make better decisions on a
    daily basis
  • Profit/loss and cost systems
  • Internal and external auditing
  • Uses and management of funds

26
Financial Management Information Systems
(continued)
Figure 6.7 Overview of a Financial MIS
27
Manufacturing Management Information Systems
  • Manufacturing MIS subsystems and outputs monitor
    and control the flow of materials, products, and
    services through the organization
  • Some common information subsystems and outputs
    used in manufacturing
  • Design and engineering
  • Master production scheduling and inventory
    control
  • Process control
  • Quality control and testing

28
Manufacturing Management Information Systems
(continued)
Figure 6.8 Overview of a Manufacturing MIS
29
Marketing Management Information Systems
  • Marketing MIS supports managerial activities in
    product development, distribution, pricing
    decisions, promotional effectiveness, and sales
    forecasting
  • Subsystems for marketing MIS include
  • Marketing research
  • Product development
  • Promotion and advertising
  • Product pricing
  • Sales analysis

30
Marketing Management Information Systems
(continued)
Figure 6.9 Overview of a Marketing MIS
31
Marketing Management Information Systems
(continued)
Figure 6.10 Reports Generated to Help Marketing
Managers Make Good Decisions
32
Human Resource Management Information Systems
  • Human resource MIS concerned with activities
    related to employees and potential employees of
    an organization
  • Outputs of the human resource MIS include
  • Human resource planning
  • Personnel selection and recruiting
  • Training and skills inventory
  • Scheduling and job placement
  • Wage and salary administration
  • Outplacement

33
Human Resource Management Information Systems
(continued)
Figure 6.11 Overview of a Human Resource MIS
34
Other Management Information Systems
  • Accounting MIS provides aggregate information on
    accounts payable, accounts receivable, payroll,
    and many other applications
  • Geographic information system (GIS) capable of
    assembling, storing, manipulating, and displaying
    geographic information, i.e., data identified
    according to its location

35
An Overview of Decision Support Systems
  • DSS is an organized collection of people,
    procedures, software, databases, and devices used
    to help make decisions that solve problems
  • Focus of a DSS is on decision-making
    effectiveness when faced with unstructured or
    semistructured business problems

36
Capabilities of a Decision Support System
  • Support for problem-solving phases
  • Support for different decision frequencies
  • Ad-hoc, institutional
  • Support for different problem structures
  • Highly structured, semistructured, or
    unstructured
  • Support for various decision-making levels
  • Operational, tactical, strategic

37
Capabilities of a Decision Support System
(continued)
Figure 6.13 Decision-Making Level
38
A Comparison of DSS and MIS
Table 6.3 Comparison of DSSs and MISs
39
Components of a Decision Support System
  • Components of a decision support system are
  • Database
  • Model base
  • Dialogue manager
  • Access to the Internet, networks, and other
    computer-based systems

40
Components of a Decision Support System
(continued)
Figure 6.14 Conceptual Model of a DSS
41
The Database
  • Data-driven DSS
  • Primarily performs qualitative analysis based on
    the companys databases
  • Taps into vast stores of information contained in
    the corporate database, retrieving information on
    inventory, sales, personnel, production, finance,
    accounting, and other areas
  • Often uses data mining and business intelligence

42
The Model Base
  • Model base part of DSS that provides decision
    makers access to a variety of models and assists
    them in decision making
  • Allows managers and decision makers to perform
    quantitative analysis on both internal and
    external data
  • Model management software software that
    coordinates the use of models in a DSS

43
The User Interface or Dialogue Manager
  • User interface or dialogue manager allows users
    to interact with the DSS to obtain information
  • Assists with all aspects of communications
    between the user and the hardware and software
    that constitute the DSS

44
Group Support Systems
  • Group support system (GSS)
  • Consists of most elements in a DSS, plus software
    to provide effective support in group decision
    making
  • Also called group decision support system or
    computerized collaborative work system

45
Group Support Systems (continued)
Figure 6.15 Configuration of a GSS
46
Characteristics of a GSS That Enhance Decision
Making
  • Special design
  • Procedures, devices, and approaches for creative
    thinking and effective communication
  • Ease of use
  • Complex systems will seldom be used by groups
  • Flexibility
  • Takes different decision-making styles and
    preferences into account
  • Decision-making support for different approaches
  • Delphi, brainstorming, group consensus, nominal
    group

47
Characteristics of a GSS That Enhance Decision
Making (continued)
  • Anonymous input
  • Helpful in ranking performance of managers
  • Reduction of negative group behavior
  • Avoids dominance of one member, sidetracking, and
    groupthink
  • Parallel communication
  • Speeds meeting times and results in better
    decisions
  • Automated record keeping
  • Provides efficient voting, ranking, future
    review, and analysis

48
GSS Software
  • Often called groupware or workgroup software
  • Helps with joint work group scheduling,
    communication, and management
  • Examples Lotus Notes, Microsofts NetMeeting,
    Microsoft Exchange, IBMs Workplace, NetDocuments
    Enterprise, Collabra Share, OpenMind, TeamWare
  • Some transaction processing and enterprise
    resource planning packages include collaboration
    software

49
GSS Alternatives
  • GSS alternatives include
  • Decision room decision makers in same geographic
    area GSS is used occasionally
  • Local area decision network decision makers in
    same geographic area GSS is used frequently
  • Teleconferencing decision frequency is low
    location of group members is distant
  • Wide area decision network decision frequency is
    high location of group members is distant
  • Use virtual workgroups

50
GSS Alternatives (continued)
Figure 6.17 The GSS Decision Room
51
Executive Support Systems
  • Executive support system (ESS) specialized DSS
    that includes all hardware, software, data,
    procedures, and people used to assist
    senior-level executives within the organization

52
Executive Support Systems (continued)
Figure 6.18 The Layers of Executive Decision
Making
53
Executive Support Systems in Perspective
  • General characteristics of ESSs
  • Tailored to individual executives
  • Easy to use
  • Drill-down abilities
  • Support need for external data
  • Can help when uncertainty is high
  • Future-oriented
  • Linked with value-added business processes

54
Capabilities of Executive Support Systems
  • Support for defining an overall vision
  • Support for strategic planning
  • Determine long-term objectives based on analyzing
    current strengths and weaknesses, predicting
    future trends, and projecting development
  • Support for strategic organizing and staffing
  • Support for strategic control
  • Monitoring, managing, goal seeking
  • Support for crisis management
  • Strategic emergency plans

55
Summary
  • Decision-making phase of the problem-solving
    process includes three stages intelligence,
    design, and choice
  • Management information system (MIS) provides
    managers with information that supports effective
    decision making and provides feedback on daily
    operations
  • Financial MIS provides financial information not
    only for executives but also for a broader set of
    people who need to make better decisions on a
    daily basis

56
Summary (continued)
  • Manufacturing MIS subsystems and outputs monitor
    and control the flow of materials, products, and
    services through the organization
  • Marketing MIS supports managerial activities in
    product development, distribution, pricing
    decisions, promotional effectiveness, and sales
    forecasting
  • Human resource MIS activities related to
    employees and potential employees
  • Geographic information system (GIS) assembling,
    storing, manipulating, and displaying geographic
    information

57
Summary (continued)
  • Decision support system (DSS) organized
    collection of people, procedures, software,
    databases, and devices used to help make
    decisions that solve problems
  • Group support system (GSS) includes elements in
    a DSS, plus software to provide effective support
    in group decision making
  • Executive support system (ESS) specialized DSS
    that includes all hardware, software, data,
    procedures, and people used to assist
    senior-level executives within the organization
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