2 Principles and Learning Objectives Good decision-making and problem-solving skills are the key to developing effective information and decision support systems. The management information system (MIS) must provide the right information to the right person in the right fashion at the right time. Decision support systems (DSSs) are used when the problems are unstructured. 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.

3 What do Managers Do?

4 Decision Making as a Component of Problem Solving Figure 6.1: How Decision Making Relates to Problem Solving

5 Programmed Versus Nonprogrammed Decisions Programmed decisions –___________ made using a rule, procedure, or quantitative method –Easy to computerize using traditional information systems Non- ___________ decisions –Decision that deals with unusual or exceptional situations –Not easily quantifiable

6 Programmed –How many workers to staff line A –What is the EOQ for raw material Z –How many turbines to power Lethbridge? Non-Programmed –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

7 Optimization, Satisficing, and Heuristic Approaches ___________ model: a process that finds the best solution, usually the one that will best help the organization meet its goals ___________ model: a process that finds a good— but not necessarily the best—problem solution Heuristics: commonly accepted guidelines or procedures that usually find a good solution

8 Management Information Systems in Perspective A management information system (MIS) provides managers with information that supports effective decision making and provides feedback on daily operations The use of MISs spans all levels of management

9 Management Information Systems in Perspective (continued) Figure 6.3: Sources of Managerial Information

10 Inputs to a Management Information System Internal data sources –TPSs and ERP ___________ and related databases; data warehouses and data marts; specific functional areas throughout the firm External data sources –Customers, ___________, competitors, and stockholders, whose data is not already captured by the TPS; the Internet; extranets

11 Outputs of a Management Information System ___________ 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 ___________ report: automatically produced when a situation is unusual or requires management action Drill-down ___________ : provides increasingly detailed data about a situation

12 Functional Aspects of the MIS Most organizations are structured along functional lines or areas The MIS can be divided along functional lines to produce reports tailored to individual functions

13 Functional Aspects of the MIS (continued) Figure 6.5: The MIS is an integrated collection of functional information systems, each supporting particular functional areas.

14 Financial Management Information Systems (continued) Figure 6.6: Overview of a Financial MIS

15 Manufacturing Management Information Systems (continued) Figure 6.7: Overview of a Manufacturing MIS

16 Marketing Management Information Systems (continued) Figure 6.8: Overview of a Marketing MIS – Peppers and Rogers

17 Human Resource Management Information Systems (continued) Figure 6.9: Overview of a Human Resource MIS

18 Other Management Information Systems ___________ MIS: provides aggregate information on accounts payable, accounts receivable, payroll, and many other applications ___________ information system (GIS): capable of assembling, storing, manipulating, and displaying geographic information –Customer AnalysisCustomer Analysis –Market AnalysisMarket Analysis –Site SelectionSite Selection –Risk AnalysisRisk Analysis –Territory ManagementTerritory Management –Facility/Property/Asset ManagementFacility/Property/Asset Management –Supply Chain ManagementSupply Chain Management –LogisticsLogistics

19 An Overview of Decision Support Systems A DSS is an ___________ collection of people, procedures, software, databases, and devices used to support problem-specific decision making and problem solving The focus of a DSS is on decision-making ___________ when faced with unstructured or semistructured business problems

20 Capabilities of a Decision Support System Support all problem-solving phases Support different decision frequencies –One of kind to continuous Support different problem structures –Structured to no structured Support various decision-making levels –All levels of decision making Pres-Dean-Prof

21 A Comparison of DSS and MIS Table 6.3: Comparison of DSSs and MISs

22 A Comparison of DSS and MIS (continued) Table 6.3: Comparison of DSSs and MISs (continued)

23 Components of a Decision Support System (continued) Figure 6.11: Conceptual Model of a DSS

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

25 Group Support Systems (continued) Figure 6.12: Configuration of a GSS

26 Characteristics of a GSS That Enhance Decision Making Special design Ease of use Flexibility Decision-making support Anonymous input Reduction of negative group behavior Parallel communication Automated record keeping

27 GSS Software Often called groupware or workgroup software Helps with joint workgroup scheduling, communication, and management Examples: Lotus Notes, Microsoft’s NetMeeting, Microsoft Exchange, NetDocuments Enterprise, Collabra Share, OpenMind, TeamWare Some transaction processing and enterprise resource planning packages include collaboration software

28 GSS Alternatives Figure 6.13: GSS Alternatives

29 GSS Alternatives (continued) Figure 6.14: The GSS Decision Room

30 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

31 Executive Support Systems in Perspective Tailored to ___________ executives Easy to use Drill-down capable Support the need for external data Can help when ___________ is high Future-oriented Linked to value-added processes

32 Capabilities of Executive Support Systems Support for defining an overall ___________ Support for strategic ___________ Support for strategic ___________ and staffing Support for ___________ control Support for ___________ management

33 Executive Support Systems ___________– integrates information from multiple components and present it in a unified display