11.1 © 2003 by Prentice Hall 11 ENHANCINGMANAGEMENTDECISION-MAKING FOR THE DIGITAL FIRM Chapter

11.2 © 2003 by Prentice Hall How can information systems help individual managers make better decisions when the problems are non- routine and constantly changing?How can information systems help individual managers make better decisions when the problems are non- routine and constantly changing? How can information systems help people working in a group make decisions more efficiently?How can information systems help people working in a group make decisions more efficiently? Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm OBJECTIVES

11.3 © 2003 by Prentice Hall Are there any special systems that can facilitate decision-making among senior managers? Exactly what can these systems do to help high-level management?Are there any special systems that can facilitate decision-making among senior managers? Exactly what can these systems do to help high-level management? What benefits can systems that support management decision-making provide for the organization as a whole?What benefits can systems that support management decision-making provide for the organization as a whole? OBJECTIVES Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm

11.4 © 2003 by Prentice Hall Building information systems that can actually fulfill executive information requirementsBuilding information systems that can actually fulfill executive information requirements Create meaningful reporting and management decision-making processesCreate meaningful reporting and management decision-making processes MANAGEMENT CHALLENGES Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm

11.5 © 2003 by Prentice Hall Computer system at the management level of an organizationComputer system at the management level of an organization Combines data, analytical tools, and modelsCombines data, analytical tools, and models Supports semi-structured and unstructured decision-makingSupports semi-structured and unstructured decision-making DECISION-SUPPORT SYSTEMS (DSS) Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm

11.6 © 2003 by Prentice Hall MIS Provides reports based on routine flow of dataProvides reports based on routine flow of data Assists in general control of the organizationAssists in general control of the organization DECISION-SUPPORT SYSTEMS (DSS) Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm MIS and DSS

11.7 © 2003 by Prentice Hall DSS Emphasizes change, flexibility, rapid response, models, assumptions, ad hoc queries, and display graphicsEmphasizes change, flexibility, rapid response, models, assumptions, ad hoc queries, and display graphics DECISION-SUPPORT SYSTEMS (DSS) Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm MIS and DSS

11.8 © 2003 by Prentice Hall Model-driven DSS Primarily stand-alonePrimarily stand-alone Uses model to perform “what-if” and other kinds of analysisUses model to perform “what-if” and other kinds of analysis DECISION-SUPPORT SYSTEMS (DSS) Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm Types of Decision-Support Systems

11.9 © 2003 by Prentice Hall Data-driven DSS Allows users to extract and analyze useful information from previous databasesAllows users to extract and analyze useful information from previous databasesDatamining Finds hidden patterns and relationships in large databases to infer rulesFinds hidden patterns and relationships in large databases to infer rules DECISION-SUPPORT SYSTEMS (DSS) Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm Types of Decision-Support Systems

11.10 © 2003 by Prentice Hall DECISION-SUPPORT SYSTEMS (DSS) Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm Overview of a Decision-Support System (DSS) Figure 11-1

11.11 © 2003 by Prentice Hall DSS database Collection of current or historical dataCollection of current or historical data DSS software system Collection of software tools/mathematical and analytical modelsCollection of software tools/mathematical and analytical models DECISION-SUPPORT SYSTEMS (DSS) Components of Decision-Support Systems Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm

11.12 © 2003 by Prentice Hall Model Abstract representation illustrating components or relationshipsAbstract representation illustrating components or relationships Sensitivity analysis Asks “what-if” questions repeatedly to determine the impact of changeAsks “what-if” questions repeatedly to determine the impact of change DECISION-SUPPORT SYSTEMS (DSS) Components of Decision-Support Systems Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm

11.13 © 2003 by Prentice Hall DECISION-SUPPORT SYSTEMS (DSS) Sensitivity Analysis Figure 11-2 Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm

11.14 © 2003 by Prentice Hall General Accident Insurance: Customer buying patterns and fraud detectionGeneral Accident Insurance: Customer buying patterns and fraud detection Bank of America: Customer profilesBank of America: Customer profiles Frito-Lay, Inc.: Price, advertising, and promotion selectionFrito-Lay, Inc.: Price, advertising, and promotion selection DECISION-SUPPORT SYSTEMS (DSS) DSS Applications and the Digital Firm Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm

11.15 © 2003 by Prentice Hall Burlington Coat Factory: Store location and inventory mixBurlington Coat Factory: Store location and inventory mix Keycorp: Targeting direct mail marketing customersKeycorp: Targeting direct mail marketing customers National Gypsum: Corporate planning and forecastingNational Gypsum: Corporate planning and forecasting DECISION-SUPPORT SYSTEMS (DSS) DSS Applications and the Digital Firm Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm

11.16 © 2003 by Prentice Hall Southern Railway: Train dispatching and routingSouthern Railway: Train dispatching and routing Texas Oil and Gas Corporation: Evaluation of potential drilling sitesTexas Oil and Gas Corporation: Evaluation of potential drilling sites United Airlines: Flight scheduling, passenger demand forecastingUnited Airlines: Flight scheduling, passenger demand forecasting DECISION-SUPPORT SYSTEMS (DSS) DSS Applications and the Digital Firm Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm

11.17 © 2003 by Prentice Hall U.S. Department of Defense: Defense contract analysisU.S. Department of Defense: Defense contract analysis DECISION-SUPPORT SYSTEMS (DSS) DSS Applications and the Digital Firm Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm

11.18 © 2003 by Prentice Hall Comprehensive examination of supply management chainComprehensive examination of supply management chain Searches for most efficient and cost- effective combinationSearches for most efficient and cost- effective combination Reduces overall costsReduces overall costs Increases speed and accuracy of filling customer ordersIncreases speed and accuracy of filling customer orders DECISION-SUPPORT SYSTEMS (DSS) DSS for Supply Chain Management Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm

11.19 © 2003 by Prentice Hall Uses data mining to guide decisionsUses data mining to guide decisions Consolidates customer information into massive data warehousesConsolidates customer information into massive data warehouses Uses various analytical tools to slice information into small segmentsUses various analytical tools to slice information into small segments DECISION-SUPPORT SYSTEMS (DSS) DSS for Customer Relationship Management Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm

11.20 © 2003 by Prentice Hall DECISION-SUPPORT SYSTEMS (DSS) DSS for Customer Analysis and Segmentation Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm Figure 11-3

11.21 © 2003 by Prentice Hall Geographic Information Systems (GIS) Software for analyzing and displaying data using digitized mapsSoftware for analyzing and displaying data using digitized maps Enhances planning and decision-makingEnhances planning and decision-making DECISION-SUPPORT SYSTEMS (DSS) DSS for Simulating Business Scenarios Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm

11.22 © 2003 by Prentice Hall Customer Decision-Support Systems (CDSS) Support decision-making process of an existing or potential customerSupport decision-making process of an existing or potential customer DECISION-SUPPORT SYSTEMS (DSS) Web-Based Customer Decision-Support Systems Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm

11.23 © 2003 by Prentice Hall Interactive computer-based systemInteractive computer-based system Facilitates solution to unstructured problemsFacilitates solution to unstructured problems Set of decision makers working together as a groupSet of decision makers working together as a group GROUP DECISION-SUPPORT SYSTEMS (GDSS) What Is a GDSS? Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm

11.24 © 2003 by Prentice Hall Hardware: Conference facility, electronic hardwareHardware: Conference facility, electronic hardware Software tools: Tools for organizing ideas, gathering information, and ranking and seeking prioritiesSoftware tools: Tools for organizing ideas, gathering information, and ranking and seeking priorities People: Participants, trained facilitator, staff supporting hardware and softwarePeople: Participants, trained facilitator, staff supporting hardware and software GROUP DECISION-SUPPORT SYSTEMS (GDSS) Characteristics of GDSS Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm

11.25 © 2003 by Prentice Hall Electronic questionnairesElectronic questionnaires Electronic brainstorming toolsElectronic brainstorming tools Idea organizersIdea organizers Questionnaire toolsQuestionnaire tools GROUP DECISION-SUPPORT SYSTEMS (GDSS) GDSS Software Tools Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm

11.26 © 2003 by Prentice Hall Tools for voting or setting prioritiesTools for voting or setting priorities Stakeholder identification and analysis toolsStakeholder identification and analysis tools GROUP DECISION-SUPPORT SYSTEMS (GDSS) GDSS Software Tools Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm

11.27 © 2003 by Prentice Hall Electronic Meeting System (EMS): Collaborative GDSSCollaborative GDSS Makes group meetings more productiveMakes group meetings more productive Supports meetingsSupports meetings Facilitates communication and decision- makingFacilitates communication and decision- making GROUP DECISION-SUPPORT SYSTEMS (GDSS) Overview of a GDSS Meeting Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm

11.28 © 2003 by Prentice Hall Improved preplanningImproved preplanning Increased participationIncreased participation Open, collaborative meeting atmosphereOpen, collaborative meeting atmosphere Criticism-free idea generationCriticism-free idea generation Evaluation objectivityEvaluation objectivity GROUP DECISION-SUPPORT SYSTEMS (GDSS) How GDSS can Enhance Group Decision-Making Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm

11.29 © 2003 by Prentice Hall Idea organization and evaluationIdea organization and evaluation Setting priorities and making decisionsSetting priorities and making decisions Documentation of meetingsDocumentation of meetings Access to external informationAccess to external information Preservation of “organizational memory”Preservation of “organizational memory” GROUP DECISION-SUPPORT SYSTEMS (GDSS) How GDSS can Enhance Group Decision-Making Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm

11.30 © 2003 by Prentice Hall Executive Support Systems (ESS): Information system at strategic level of an organizationInformation system at strategic level of an organization Addresses unstructured decision-making through advanced graphics and communicationsAddresses unstructured decision-making through advanced graphics and communications EXECUTIVE SUPPORT IN THE ENTERPRISE Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm

11.31 © 2003 by Prentice Hall Brings together data from the entire organizationBrings together data from the entire organization Allows managers to select, access, and tailor dataAllows managers to select, access, and tailor data Enables executive and any subordinates to look at the same data in the same wayEnables executive and any subordinates to look at the same data in the same way GROUP DECISION-SUPPORT SYSTEMS (GDSS) The Role of Executive Support Systems in the Organization Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm

11.32 © 2003 by Prentice Hall Developing ESS: Ease of useEase of use Facility for environmental scanningFacility for environmental scanning External and internal sources of information to be used for environmental scanningExternal and internal sources of information to be used for environmental scanning GROUP DECISION-SUPPORT SYSTEMS (GDSS) The Role of Executive Support Systems in the Organization Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm

11.33 © 2003 by Prentice Hall Analyzes, compares, and highlights trendsAnalyzes, compares, and highlights trends Provides greater clarity and insight into dataProvides greater clarity and insight into data Speeds up decision-makingSpeeds up decision-making GROUP DECISION-SUPPORT SYSTEMS (GDSS) Benefits of Executive Support Systems Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm

11.34 © 2003 by Prentice Hall Improves management performanceImproves management performance Increases management’s span of controlIncreases management’s span of control Better monitoring of activitiesBetter monitoring of activities GROUP DECISION-SUPPORT SYSTEMS (GDSS) Benefits of Executive Support Systems Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm

11.35 © 2003 by Prentice Hall ESS for business intelligence: Identifies changing market conditionsIdentifies changing market conditions Formulates responsesFormulates responses Tracks implementation effortsTracks implementation efforts Learns from feedbackLearns from feedback GROUP DECISION-SUPPORT SYSTEMS (GDSS) Executive Support Systems and the Digital Firm Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm

11.36 © 2003 by Prentice Hall Monitoring corporate performance: balanced scorecard systems Model for analyzing firm performanceModel for analyzing firm performance Supplements traditional financial measures with measurements from additional business perspectivesSupplements traditional financial measures with measurements from additional business perspectives GROUP DECISION-SUPPORT SYSTEMS (GDSS) Executive Support Systems and the Digital Firm Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm

11.37 © 2003 by Prentice Hall Strategic performance management tools for enterprise systems SAP: Web-enabled mySAP.com™, Management CockpitSAP: Web-enabled mySAP.com™, Management Cockpit PeopleSoft: Web-enabled Enterprise Performance Management (EPM)PeopleSoft: Web-enabled Enterprise Performance Management (EPM) Oracle: Strategic Enterprise ManagementOracle: Strategic Enterprise Management GROUP DECISION-SUPPORT SYSTEMS (GDSS) Enterprise Wide Reporting and Analysis Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm

11.38 © 2003 by Prentice Hall 11 ENHANCINGMANAGEMENTDECISION-MAKING FOR THE DIGITAL FIRM Chapter