1. MIS MANAGEMENT SUPPORT SYSTEMS IDEO COKE vs.NEW COKE CHAPTER 12
This chapter begins by summarizing types of decisions and phases in the decision- making process. Next, you learn about a decision support system ( DSS), its components and its capabilities, and see how it can benefit an organization. In addition, you learn about other management support systems used in decision making: executive information systems ( EISs), group support systems ( GSSs), and geographic information systems ( GISs). This chapter concludes with an overview of guidelines for designing a management support system.
LO1 Define types of decisions and phases of the decision-making process in a typical organization.
LO2 Describe a decision support system.
LO3 Explain an executive information system’s importance in decision making.
LO4 Describe group support systems, including groupware and electronic meeting systems.
LO5 Summarize uses for a geographic information system.
LO6 Describe guidelines for designing a management support system.
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2. What do Managers Do? They make decisions
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What do Managers Do?
They make decisions
Better decisions = better managers
The amount of information people must understand to make decisions, solve problems, and find opportunities is growing exponentially
Use choice of spouse or school for an example of a decision that is unstructured
How did you go about deciding to choose your spouse?

3. Types of Decisions in an Organization
Structured decisions
Well-defined standard operating procedure exists
Also called programmable tasks
Can be automated
Semistructured decisions
Not as well-defined by standard operating procedures
Include a structured aspect that benefits from information retrieval, analytical models, and information systems technology
• Structured decisions— Structured decisions, or programmable tasks, can be automated because a well- defi ned standard operating procedure exists for these types of decisions. Record keeping, payroll, and simple inventory problems are examples of structured tasks. Information technologies are a major support tool for making structured decisions
Semistructured decisions include a structured aspect that benefi ts from information retrieval, analytical models, and information systems technology.

4. Types of Decisions in an Organization (cont’d.)
Unstructured decisions
Unique; typically one-time decisions
Does not rely on standard operating procedure
Decision maker’s intuition plays the most important role
Information technology offers little support for these decisions
Management support systems (MSSs)
Different types of information systems have been developed to support certain aspects and types of decisions
• Unstructured decisions— Unstructured decisions are typically one- time decisions, with no standard operating procedure pertaining to them. The decision maker’s intuition plays the most important role, as information technology offers little support for these decisions. Areas involving unstructured decisions include research and development, hiring and fi ring, and introducing a new product.
Management support systems ( MSSs) are the diff erent types of information systems that have been developed to support certain aspects and types of decisions. Each type is designed with unique goals and objectives.

5. Types of decisions Structured Unstructured COKE vs.NEW COKE
How many workers to staff line A
What is the EOQ for raw material Z
How many turbines to power Lethbridge?
Unstructured
What are the benefits of merging with XYZ
How will consumer react if we lower the price by 10%
What are the benefits of MacDonald's opening up Hotels
Programmed Versus Nonprogrammed Decisions
Programmed decisions are made using a rule, procedure, or quantitative method. These decisions are easy to computerize using traditional information systems. Some decisions, however, are difficult to quantify. These decisions, called nonprogrammed decisions, deal with unusual or exceptional situations.

6. Phases of the Decision-Making Process
Herbert Simon
Winner of the 1978 Nobel Prize in economics
Defines three phases in the decision-making process:
intelligence,
design,
choice
Fourth phase, implementation, can be added
Three parts
First: determine what the reality is
Second: get a better understanding of the problem by collecting data and information about it
Third: gather data and information needed to define alternatives for solving the problem

7. The Intelligence Phase
Decision maker examines the organization’s environment for conditions that need decisions
Data is collected from a variety of sources and processed
Decision maker can discover ways to approach the problem
Ex Faculty enrollment has declined for two consecutive years
For example, an organization has noticed a decrease in total sales over the past six months. To pinpoint the cause of the problem, the organization can collect data from customers, the marketplace, and the competition.
After the data has been processed, analysis can suggest possible remedies. Information technologies, particu-larly database management systems, can help in this analysis. In addition, many third- party vendors, such as Nielsen and Dow Jones, specialize in collecting data about the marketplace, competition, and the general status of the economy. The information they collect can support the intelligence phase of decision making.

8. The Design Phase Objective
Define criteria for the decision
Generate alternatives for meeting the criteria
Define associations between the criteria and the alternatives
Defining associations between alternatives and criteria involves understanding how each alternative affects the criteria
Information technology doesn’t support this phase of decision making much
In the design phase, the objective is to define criteria for the decision, generate alternatives for meeting the criteria, and defi ne associations between the criteria and the alternatives.

9. U of L faculty of Management
Problem ( intelligence) – How to cut $12 milliion or 7% from budget
Criteria or objectives (design) 1 2
Alternatives (design)
1 raise tuitiion
2 fees
3 cut wages
4 fund raise
5 increase classes

10. The Choice Phase Best and most effective course of action is chosen
Analyze each alternative and its relationship
Decision support system (DSS) can be particularly useful in this phase
Best and most effective course of action is chosen
From the practical alternatives
Analyze each alternative and its relationship
To the criteria to determine whether it’s feasible
Decision support system (DSS) can be particularly useful in this phase

11. The Implementation Phase
Organization devises a plan for carrying out the alternative selected in the choice phase
Obtains the resources to implement the plan
DSS can do a follow-up assessment on how well a solution is performing

12. Decision Support Systems
Decision support system (DSS)
Interactive information system
Consisting of hardware, software, data, and models (mathematical and statistical)
Designed to assist decision makers in an organization

13. Decision Support Systems (cont’d.)
Requirements:
Be interactive
Incorporate the human element as well as hardware and software
Use both internal and external data
Include mathematical and statistical models
Support decision makers at all organizational levels
Emphasize semistructured and unstructured tasks

14. DSS Capabilities What-if analysis Goal-seeking Sensitivity analysis
“ If the advertising budget increases by 2 percent, what’s the effect on total sales?”
Goal-seeking
how much to advertise a product to increase total sales to $ 50,000,000.
Sensitivity analysis
how much the interest rate has to go down for you to be able to afford a $ 100,000 house with a monthly payment of $ 700.
Exception reporting analysis
such as pinpointing the region that generated the highest total sales
More capabilities, such as:
Graphical analysis, forecasting, simulation, statistical analysis, and modeling analysis
What- if analysis— This shows the effect of a change in one variable, answering questions such as “ If labor costs increase by 4 percent, how is the fi nal cost of a product affected
• Goal seeking— This is the reverse of what- if analysis. It asks what has to be done to achieve a p
articular goal— for example, how much to charge for a product in order to generate $ 200,000 profi t,
Sensitivity analysis— This enables you to apply different variables, such as determining the maximum price you could pay for raw materials and still make a profi t or determining

15. Costs and Benefits of Decision Support Systems
Benefits of a DSS:
Increase in the number of alternatives examined
Fast response to unexpected situations
Ability to make one-of-a-kind decisions
Cost savings
Better decisions
More effective teamwork
Time savings
Making better use of data resources
Increase in the number of alternatives examined
Fast response to unexpected situations
Ability to make one-of-a-kind decisions
New insights and learning
Improved communication
Improved control over operations
Cost savings from being able to make better decisions and analyze several scenarios (what-ifs) in a short period
Better decisions
More effective teamwork
Time savings
Making better use of data resources

16. Executive Information Systems
Interactive information systems that give executives easy access to internal and external data
Typically include:
“Drill-down” features
Digital dashboard
Ease of use
EIS designers should focus on simplicity when developing a user interface
Executive information systems ( EISs), branches of DSSs, are interactive information systems that give executives easy access to internal and external data and typically include “ drill- down” features and a digital dashboard for examining and analyzing information.
A digital dashboard integrates information from multiple sources and presents it in a unifi ed, understandable format, often charts and graphs. It off ers up- to- the minute snapshots of information and assists decision makers in identifying trends and potential problems.

17. Executive Information Systems (cont’d.)
Require access to both internal and external data
So that executives can spot trends, make forecasts, and conduct different types of analyses
Should also collect data related to an organization’s “critical success factors”

18. Reasons for Using EISs EIS increases managers’ productivity
EIS can convert information into other formats
EIS can spot trends and report exceptions
Factors that can lead to a failed EIS:
Corporate culture isn’t ready
Organizational resistance to the project
Project is viewed as unimportant
Management loses interest or isn’t committed
Objectives and information requirements can’t be defined clearly
System doesn’t meet its objectives
System’s objectives aren’t linked to factors critical to the organization’s success
Project’s costs can’t be justified

19. Group Support Systems (cont’d.)
Assist groups in:
Communicating, collaborating, and coordinating their activities
Intended more for teamwork than for decision support
Use computer and communication technologies to formulate, process, and implement a decision-making task
Useful for:
Committees
Review panels
Board meetings
Task forces
Decision-making sessions that require input from several decision makers
Use computer and communication technologies to formulate, process, and implement a decision-making task
Considered a kind of intervention technology that helps overcome the limitations of group interactions
Reduce communication barriers
Introduce order and efficiency into situations that are inherently unsystematic and inefficient
Assist groups in:
Communicating, collaborating, and coordinating their activities
Intended more for teamwork than for decision support

20. Groupware (cont’d.) Some capabilities of groupware include:
Audio and video conferencing
Automated appointment books
Brainstorming
Database access
Online chat
Scheduling
To-do lists
Workflow automation
Enable decision makers in different locations to participate in a group decision-making process
Include:
Real-time computer conferencing
Video teleconferencing
Desktop conferencing

21. Advantages and Disadvantages of GSSs
Costs as well as stress are reduced due to decreased travel
More time to talk with each other and solve problems
Shyness isn’t as much of an issue in GSS sessions
Increasing collaboration improves the effectiveness of decision makers

22. Advantages and Disadvantages of GSSs (cont’d.)
Lack of the human touch
Unnecessary meetings
Security problems
Costs of GSS implementation are high

23. Geographic Information Systems
Captures, stores, processes, and displays geographic information
Uses spatial and nonspatial data
Common example of a GIS:
Getting driving directions from Google Maps
User-friendly interface that helps you visualize the route
After you make a decision, you can print driving directions and a map
Education planning
Urban planning
Government
Insurance
Marketing
Real estate
Transportation and logistics
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24. Summary IDEO Different types of decisions
Phases of decision making in a typical organization
DSS:
Components, capabilities, key players, and costs and benefits
Executive information systems
Group support systems
Geographic information systems