1. Information Systems & Enhancing Decision Making for the Digital Firm
Rashedul Hasan

2. Business Decision Making and the Decision-Making Process
Management Information Systems
Chapter 13 Enhancing Decision Making for the Digital Firm
DECISION MAKING AND DECISION-SUPPORT SYSTEMS
Business Decision Making and the Decision-Making Process
Decision-Making Levels:
Senior management
Middle management and project teams
Operational management and project teams
Individual employees

3. Types of Information Systems
Management Information Systems
Chapter 2 Information Systems in the Enterprise
MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS
Types of Information Systems
Figure 2-1

4. Different Kinds of Systems
Management Information Systems
Chapter 2 Information Systems in the Enterprise
MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS
Different Kinds of Systems
Three main categories of information systems serve
different organizational levels:
Operational-level systems: support operational managers, keeping track of the elementary activities and transactions
Management-level systems: serve the monitoring, controlling, decision-making, and administrative activities
Strategic-level systems: help senior management tackle and address strategic issues

5. Information Requirements of Key Decision-Making Groups in a Firm
Management Information Systems
Chapter 13 Enhancing Decision Making for the Digital Firm
DECISION MAKING AND DECISION-SUPPORT SYSTEMS
Information Requirements of Key Decision-Making Groups in a Firm
Figure 13-2

6. Unstructured decisions:
Management Information Systems
Chapter 13 Enhancing Decision Making for the Digital Firm
DECISION MAKING AND DECISION-SUPPORT SYSTEMS
Types of Decisions
Unstructured decisions:
Novel, non-routine decisions requiring judgment and insights
Examples: Approve capital budget; decide corporate objectives

7. Types of Decisions (Continued)
Management Information Systems
Chapter 13 Enhancing Decision Making for the Digital Firm
DECISION MAKING AND DECISION-SUPPORT SYSTEMS
Types of Decisions (Continued)
Structured decisions:
Routine decisions with definite procedures
Examples: Restock inventory; determine special offers to customers
Semi-structured decisions:
Only part of decision has clear-cut answers provided by accepted procedures
Examples: Allocate resources to managers; develop a marketing plan

8. Transaction Processing Systems (TPS)
Management Information Systems
Chapter 2 Information Systems in the Enterprise
MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS
Major Types of Systems
Transaction Processing Systems (TPS)
Management Information Systems (MIS)
Decision-Support Systems (DSS)
Executive Support Systems (ESS)

9. The Four Major Types of Information Systems
Management Information Systems
Chapter 2 Information Systems in the Enterprise
MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS
The Four Major Types of Information Systems
Figure 2-2

10. Stages in Decision Making
Management Information Systems
Chapter 13 Enhancing Decision Making for the Digital Firm
DECISION MAKING AND DECISION-SUPPORT SYSTEMS
Stages in Decision Making
Figure 13-3

11. Transaction Processing Systems (TPS)
Management Information Systems
Chapter 2 Information Systems in the Enterprise
MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS
Transaction Processing Systems (TPS)
Basic business systems that serve the operational level
A computerized system that performs and records the daily routine transactions necessary to the conduct of the business

12. A Symbolic Representation for a Payroll TPS
Management Information Systems
Chapter 2 Information Systems in the Enterprise
MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS
A Symbolic Representation for a Payroll TPS
Figure 2-3

13. Typical Applications of TPS
Management Information Systems
Chapter 2 Information Systems in the Enterprise
MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS
Typical Applications of TPS
Figure 2-4

14. Management Information Systems (MIS)
Chapter 2 Information Systems in the Enterprise
MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS
Management Information Systems (MIS)
Management level
Inputs: High volume transaction level data
Processing: Simple models
Outputs: Summary reports
Users: Middle managers
Example: Annual budgeting

15. Management Information Systems (MIS) (continued)
Chapter 2 Information Systems in the Enterprise
MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS
Management Information Systems (MIS) (continued)
Figure 2-5

16. Management Information Systems (MIS) (continued)
Chapter 2 Information Systems in the Enterprise
MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS
Management Information Systems (MIS) (continued)
A sample MIS report
Figure 2-6

17. Decision-Support Systems (DSS)
Management Information Systems
Chapter 2 Information Systems in the Enterprise
MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS
Decision-Support Systems (DSS)
Management level
Inputs: Transaction level data
Processing: Interactive
Outputs: Decision analysis
Users: Professionals, staff
Example: Contract cost analysis

18. Decision-Support Systems (DSS) (Continued)
Management Information Systems
Chapter 2 Information Systems in the Enterprise
MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS
Decision-Support Systems (DSS) (Continued)
Voyage-estimating decision-support system
Figure 2-7

19. EXECUTIVE SUPPORT SYSTEMS (ESS):
Management Information Systems
Chapter 2 Information Systems in the Enterprise
MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS
EXECUTIVE SUPPORT SYSTEMS (ESS):
Inputs: Aggregate data
Processing: Interactive
Outputs: Projections
Users: Senior managers
Example: 5 year operating plan

20. Model of a Typical Executive Support System
Management Information Systems
Chapter 2 Information Systems in the Enterprise
MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS
Model of a Typical Executive Support System
Figure 2-8

21. EXECUTIVE SUPPORT SYSTEMS (ESS) (Continued)
Management Information Systems
Chapter 2 Information Systems in the Enterprise
MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS
EXECUTIVE SUPPORT SYSTEMS (ESS) (Continued)
Top Level Management
Designed to the individual senior manager
Ties CEO to all levels
Very expensive to keep up
Extensive support staff

22. Relationship of Systems to One Another
Management Information Systems
Chapter 2 Information Systems in the Enterprise
MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS
Relationship of Systems to One Another
Interrelationships among systems
Figure 2-9

23. Relationship of Systems to One Another
Management Information Systems
Chapter 2 Information Systems in the Enterprise
MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS
Relationship of Systems to One Another
In contemporary digital firms, the different types of systems are closely linked to one another. This is the ideal. In traditional firms these systems tend to be isolated from one another, and information does not flow seamlessly from one end of the organization to the other. Efficiency and business value tend to suffer greatly in these traditional firms

24. The Difference between MIS and DSS
Management Information Systems
Chapter 13 Enhancing Decision Making for the Digital Firm
SYSTEMS FOR DECISION SUPPORT
The Difference between MIS and DSS
Management Information Systems:
Primarily address structured problems
Provides typically fixed, scheduled reports based on routine flows of data and assists in the general control of the business

25. Decision Support Systems:
Management Information Systems
Chapter 13 Enhancing Decision Making for the Digital Firm
SYSTEMS FOR DECISION SUPPORT
Decision Support Systems:
Support semistructured and unstructured problems
Greater emphasis on models, assumptions, ad-hoc queries, display graphics
Emphasizes change, flexibility, and a rapid response

26. Types of Decision-Support Systems
Management Information Systems
Chapter 13 Enhancing Decision Making for the Digital Firm
SYSTEMS FOR DECISION SUPPORT
Types of Decision-Support Systems
Model-driven DSS:
Primarily stand-alone systems
Use a strong theory or model to perform “what-if” and similar analyses

27. Management Information Systems
Chapter 13 Enhancing Decision Making for the Digital Firm
SYSTEMS FOR DECISION SUPPORT
Components of DSS
DSS database: A collection of current or historical data from a number of applications or groups
DSS software system: Contains the software tools for data analysis, with models, data mining, and other analytical tools
DSS user interface: Graphical, flexible interaction between users of the system and the DSS software tools

28. Support decision making by enabling user to extract useful information
Management Information Systems
Chapter 13 Enhancing Decision Making for the Digital Firm
SYSTEMS FOR DECISION SUPPORT
Data-driven DSS:
Integrated with large pools of data in major enterprise systems and Web sites
Support decision making by enabling user to extract useful information
Data mining: Can obtain types of information such as associations, sequences, classifications, clusters, and forecasts

29. Sensitivity analysis (“what-if” models)
Management Information Systems
Chapter 13 Enhancing Decision Making for the Digital Firm
SYSTEMS FOR DECISION SUPPORT
Model: An abstract representation that illustrates the components or relationships of a phenomenon
Statistical models
Optimization models
Forecasting models
Sensitivity analysis (“what-if” models)

30. Overview of a Decision-Support System
Management Information Systems
Chapter 13 Enhancing Decision Making for the Digital Firm
SYSTEMS FOR DECISION SUPPORT
Overview of a Decision-Support System
Figure 13-4

31. Sensitivity Analysis Management Information Systems Figure 13-5
Chapter 13 Enhancing Decision Making for the Digital Firm
SYSTEMS FOR DECISION SUPPORT
Sensitivity Analysis
Figure 13-5