1. Fundamentals of Information Systems Fourth 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
Fundamentals of Information Systems, Fourth Edition

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
Fundamentals of Information Systems, Fourth Edition

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
Fundamentals of Information Systems, Fourth Edition

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
Fundamentals of Information Systems, Fourth Edition

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
Fundamentals of Information Systems, Fourth Edition

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
Fundamentals of Information Systems, Fourth Edition

8. Decision Making as a Component of Problem Solving (continued)
Figure 6.1: How Decision Making Relates to Problem Solving
Fundamentals of Information Systems, Fourth Edition

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
Fundamentals of Information Systems, Fourth Edition

10. Programmed Versus Nonprogrammed Decisions
Decision made using a rule, procedure, or quantitative method
Easy to computerize using traditional information systems
Fundamentals of Information Systems, Fourth Edition

11. Programmed Versus Nonprogrammed Decisions (continued)
Decision that deals with unusual or exceptional situations
Not easily quantifiable
Fundamentals of Information Systems, Fourth Edition

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 good—but not necessarily the best—problem solution
Heuristics: commonly accepted guidelines or procedures that usually find a good solution
Fundamentals of Information Systems, Fourth Edition

13. Optimization, Satisficing, and Heuristic Approaches (continued)
Figure 6.2: Optimization Software
Fundamentals of Information Systems, Fourth Edition

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
Fundamentals of Information Systems, Fourth Edition

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
Fundamentals of Information Systems, Fourth Edition

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
Fundamentals of Information Systems, Fourth Edition

17. Management Information Systems in Perspective (continued)
Figure 6.3: Sources of Managerial Information
Fundamentals of Information Systems, Fourth Edition

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
Fundamentals of Information Systems, Fourth Edition

19. Outputs of a Management Information System
Figure 6.4: An Executive Dashboard
Fundamentals of Information Systems, Fourth Edition

20. Outputs of a Management Information System (continued)
Scheduled report: produced periodically, or on a schedule
Key-indicator report: summary of the previous day’s critical activities
Demand report: developed to give certain information at someone’s request
Exception report: automatically produced when a situation is unusual or requires management action
Drill-down report: provides increasingly detailed data about a situation
Fundamentals of Information Systems, Fourth Edition

21. Outputs of a Management Information System (continued)
Figure 6.5: Reports Generated by an MIS
Fundamentals of Information Systems, Fourth Edition

22. Outputs of a Management Information System (continued)
Table 6.1: Guidelines for Developing MIS Reports
Fundamentals of Information Systems, Fourth Edition

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
Fundamentals of Information Systems, Fourth Edition

24. Functional Aspects of the MIS (continued)
Figure 6.6: An Organization’s MIS
Fundamentals of Information Systems, Fourth Edition

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
Fundamentals of Information Systems, Fourth Edition

26. Financial Management Information Systems (continued)
Figure 6.7: Overview of a Financial MIS
Fundamentals of Information Systems, Fourth Edition

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
Fundamentals of Information Systems, Fourth Edition

28. Manufacturing Management Information Systems (continued)
Figure 6.8: Overview of a Manufacturing MIS
Fundamentals of Information Systems, Fourth Edition

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
Fundamentals of Information Systems, Fourth Edition

30. Marketing Management Information Systems (continued)
Figure 6.9: Overview of a Marketing MIS
Fundamentals of Information Systems, Fourth Edition

31. Marketing Management Information Systems (continued)
Figure 6.10: Reports Generated to Help Marketing Managers Make Good Decisions
Fundamentals of Information Systems, Fourth Edition

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
Fundamentals of Information Systems, Fourth Edition

33. Human Resource Management Information Systems (continued)
Figure 6.11: Overview of a Human Resource MIS
Fundamentals of Information Systems, Fourth Edition

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
Fundamentals of Information Systems, Fourth Edition

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
Fundamentals of Information Systems, Fourth Edition

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
Fundamentals of Information Systems, Fourth Edition

37. Capabilities of a Decision Support System (continued)
Figure 6.13: Decision-Making Level
Fundamentals of Information Systems, Fourth Edition

38. A Comparison of DSS and MIS
Table 6.3: Comparison of DSSs and MISs
Fundamentals of Information Systems, Fourth Edition

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
Fundamentals of Information Systems, Fourth Edition

40. Components of a Decision Support System (continued)
Figure 6.14: Conceptual Model of a DSS
Fundamentals of Information Systems, Fourth Edition

41. The Database Data-driven DSS
Primarily performs qualitative analysis based on the company’s 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
Fundamentals of Information Systems, Fourth Edition

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
Fundamentals of Information Systems, Fourth Edition

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
Fundamentals of Information Systems, Fourth Edition

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
Fundamentals of Information Systems, Fourth Edition

45. Group Support Systems (continued)
Figure 6.15: Configuration of a GSS
Fundamentals of Information Systems, Fourth Edition

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
Fundamentals of Information Systems, Fourth Edition

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
Fundamentals of Information Systems, Fourth Edition

48. GSS Software Often called groupware or workgroup software
Helps with joint work group scheduling, communication, and management
Examples: Lotus Notes, Microsoft’s NetMeeting, Microsoft Exchange, IBM’s Workplace, NetDocuments Enterprise, Collabra Share, OpenMind, TeamWare
Some transaction processing and enterprise resource planning packages include collaboration software
Fundamentals of Information Systems, Fourth Edition

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
Fundamentals of Information Systems, Fourth Edition

50. GSS Alternatives (continued)
Figure 6.17: The GSS Decision Room
Fundamentals of Information Systems, Fourth Edition

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
Fundamentals of Information Systems, Fourth Edition

52. Executive Support Systems (continued)
Figure 6.18: The Layers of Executive Decision Making
Fundamentals of Information Systems, Fourth Edition

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
Fundamentals of Information Systems, Fourth Edition

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
Fundamentals of Information Systems, Fourth Edition

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
Fundamentals of Information Systems, Fourth Edition

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
Fundamentals of Information Systems, Fourth Edition

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
Fundamentals of Information Systems, Fourth Edition