Chapter 6 – Analyzing Information for Business Decision Making Information Systems, First Edition John Wiley & Sons, Inc by France Belanger and Craig Van Slyke Contributor: Brian West, University of Louisiana at Lafayette Copyright 2012 John Wiley & Sons, Inc.

Practice: Focus Story Discussion What role did information play in this decision? An electronic spreadsheet was very helpful in making this decision. What would have been different if spreadsheet software was not available? Copyright 2012 John Wiley & Sons, Inc.

Good decision making skills One of the skills that sets apart successful business professionals These skills are directly related to being able to make good decisions Copyright 2012 John Wiley & Sons, Inc.

Copyright 2012 John Wiley & Sons, Inc. Practice Learning Activity 6.1 (p. ) Suppose that you are in the market for a new apartment. How would you go about making the decision of which new apartment to choose? What information would you gather? What would be the consequences of making a bad decision? Copyright 2012 John Wiley & Sons, Inc.

Copyright 2012 John Wiley & Sons, Inc. Types of Decisions   Operational control Managerial control Strategic planning Structured Human resources reporting, short-term forecasting Investment analysis, distribution system analysis Semi-structured Compensation planning, Unstructured Cash management, project management Budget preparation, sales planning Figure 6.1 – Gorry and Scott-Morton’s Information Systems Framework Copyright 2012 John Wiley & Sons, Inc.

Copyright 2012 John Wiley & Sons, Inc. Practice Learning Activity 6.2 (p. ) You will face many different types of decisions throughout your business career. Some decisions are well defined, have clear alternatives and information requirements. Others are much less clear. For each decision, answer the following questions: What information would you need in order to make the decisions? How confident are you that you have accurately identified the needs? Why do you feel this way? Copyright 2012 John Wiley & Sons, Inc.

Decision Making Process Intelligence involves sensing conditions and predicting what conditions will require action Choice selects the most effective and efficient alternative Copyright 2012 John Wiley & Sons, Inc.

Expanded Decision Making Identify and clearly define the problem Identify alternatives Copyright 2012 John Wiley & Sons, Inc.

Copyright 2012 John Wiley & Sons, Inc. Identify the Problem The “5 Whys” Begin with the problem and ask “why?” Why are our sales declining? Why are costs rising? Keep asking “why” until you uncover the problem Copyright 2012 John Wiley & Sons, Inc.

Copyright 2012 John Wiley & Sons, Inc. Requirements Must have vs. Like to have Goals may conflict Original requirements sometimes are changed to like to haves Copyright 2012 John Wiley & Sons, Inc.

Copyright 2012 John Wiley & Sons, Inc. Practice Learning Activity 6.3 (p. ) Suppose that you are in the market for a new vehicle. Establish at least five requirements and goals (five combined). For each requirement and goal, determine one or more criteria. Copyright 2012 John Wiley & Sons, Inc.

Does the solution solve the problem? Make sure that it actually solves the original problem If the problem is poorly defined, you are likely to develop inappropriate requirements and goals Copyright 2012 John Wiley & Sons, Inc.

Copyright 2012 John Wiley & Sons, Inc. Practice Learning Activity 6.4 (p. ) “What grade will I get if I score a 75% on the final?” You have probably asked yourself a similar question. While you can certainly figure this out without a computer, a properly designed spreadsheet can make this much easier. Use the spreadsheet available on the book’s website to calculate your overall course grade under three different final exam scores. Copyright 2012 John Wiley & Sons, Inc.

Information retrieval and analysis tools Figure 6.6 – SAP Business Objects Screen Copyright 2012 John Wiley & Sons, Inc.

Copyright 2012 John Wiley & Sons, Inc. “What-if” Analysis Figure 6.7 – Spreadsheet Example Copyright 2012 John Wiley & Sons, Inc.

Scenario Manager Summary Figure 6.8 – Scenario Manager Summary Copyright 2012 John Wiley & Sons, Inc.

Copyright 2012 John Wiley & Sons, Inc. Results of Goal Seek Original After Goal Seek Figure 6.9 – Results of Goal Seek Copyright 2012 John Wiley & Sons, Inc.

Copyright 2012 John Wiley & Sons, Inc. Showing Formulas Figure 6.10 – Spreadsheet Showing Formulas Copyright 2012 John Wiley & Sons, Inc.

Data Visualization Software Figure 6.11 – Visualization Example Copyright 2012 John Wiley & Sons, Inc.

Copyright 2012 John Wiley & Sons, Inc. Practice Learning Activity 6.5 (p. ) Spreadsheets are used extensively to understand outcomes based on different levels of input variables. Go to the course website and click on the link for Learning Activity 6.4. Follow the instructions. Copyright 2012 John Wiley & Sons, Inc.

Copyright 2012 John Wiley & Sons, Inc. All rights reserved. Reproduction or translation of this work beyond that permitted in section 117 of the 1976 United States Copyright Act without express permission of the copyright owner is unlawful. Request for further information should be addressed to the Permissions Department, John Wiley & Sons, Inc. The purchaser may make back-up copies for his/her own use only and not for distribution or resale. The Publisher assumes no responsibility for errors, omissions, or damages caused by the use of these programs or from the use of the information herein. Copyright 2012 John Wiley & Sons, Inc.