13.1 © 2002 by Prentice Hall c h a p t e r 13 ENHANCING MANAGEMENT DECISION MAKING

13.2 © 2002 by Prentice Hall LEARNING OBJECTIVES DIFFERENTIATE DECISION- SUPPORT SYSTEMS (DSS) FROM GROUP DECISION-SUPPORT SYSTEMS (GDSS)DIFFERENTIATE DECISION- SUPPORT SYSTEMS (DSS) FROM GROUP DECISION-SUPPORT SYSTEMS (GDSS) DESCRIBE COMPONENTS OF DSS & GDSSDESCRIBE COMPONENTS OF DSS & GDSS*

13.3 © 2002 by Prentice Hall LEARNING OBJECTIVES DEMONSTRATE HOW DSS & GDSS ENHANCE DECISION-MAKINGDEMONSTRATE HOW DSS & GDSS ENHANCE DECISION-MAKING DESCRIBE CAPABILITIES OF EXECUTIVE SUPPORT SYSTEMS (ESS)DESCRIBE CAPABILITIES OF EXECUTIVE SUPPORT SYSTEMS (ESS) ASSESS BENEFITS OF ESSASSESS BENEFITS OF ESS*

13.4 © 2002 by Prentice Hall MANAGEMENT CHALLENGES DECISION-SUPPORT SYSTEMSDECISION-SUPPORT SYSTEMS GROUP DECISION-SUPPORT SYSTEMSGROUP DECISION-SUPPORT SYSTEMS EXECUTIVE SUPPORT SYSTEMSEXECUTIVE SUPPORT SYSTEMS*

13.5 © 2002 by Prentice Hall DECISION SUPPORT SYSTEMS (DSS) MANAGEMENT LEVEL COMPUTER SYSTEM COMBINES DATA, MODELS, USER - FRIENDLY SOFTWARE FOR SEMISTRUCTURED & UNSTRUCTURED DECISION MAKING *

13.6 © 2002 by Prentice Hall MODEL DRIVEN DSS: Uses models for what-if and other analysisMODEL DRIVEN DSS: Uses models for what-if and other analysis DATA-DRIVEN DSS: Allows extraction, analysis of information from databasesDATA-DRIVEN DSS: Allows extraction, analysis of information from databases* DECISION SUPPORT SYSTEM DECISION SUPPORT SYSTEM

13.7 © 2002 by Prentice Hall TPS EXTERNAL DATA DSS DATA BASE DSS SOFTWARE SYSTEM MODELS OLAPTOOLS DATAMININGTOOLS USER INTERFACE USER DECISION SUPPORT SYSTEM DECISION SUPPORT SYSTEM

13.8 © 2002 by Prentice Hall TPS: Transaction processing systemTPS: Transaction processing system MODEL: Representation of a problemMODEL: Representation of a problem OLAP: On-line analytical processingOLAP: On-line analytical processing USER INTERFACE: How user enters problem & receives answersUSER INTERFACE: How user enters problem & receives answers DSS DATABASE: Current data from applications or groupsDSS DATABASE: Current data from applications or groups* DECISION SUPPORT SYSTEM DECISION SUPPORT SYSTEM

13.9 © 2002 by Prentice Hall DATA MINING: Technology for finding relationships in large data bases for predictionDATA MINING: Technology for finding relationships in large data bases for prediction DSS SOFTWARE SYSTEM: Tools for data analysisDSS SOFTWARE SYSTEM: Tools for data analysis SENSITIVITY ANALYSIS: “What-if” questions about changes in model factorsSENSITIVITY ANALYSIS: “What-if” questions about changes in model factors* DECISION SUPPORT SYSTEM DECISION SUPPORT SYSTEM

13.10 © 2002 by Prentice Hall SUPPLY CHAIN MANAGEMENTSUPPLY CHAIN MANAGEMENT CUSTOMER RELATIONSHIP MANAGEMENTCUSTOMER RELATIONSHIP MANAGEMENT SIMULATING BUSINESS SCENARIOSSIMULATING BUSINESS SCENARIOS* DECISION SUPPORT SYSTEM DECISION SUPPORT SYSTEM APPLICATIONS:

13.11 © 2002 by Prentice Hall GEOGRAPHIC INFORMATION SYSTEM (GIS): Software to display digital mapsGEOGRAPHIC INFORMATION SYSTEM (GIS): Software to display digital maps WEB-BASED DSS: Available on Internet for decisions, information, softwareWEB-BASED DSS: Available on Internet for decisions, information, software CUSTOMER DSS (CDSS): System supports buying decisions of customersCUSTOMER DSS (CDSS): System supports buying decisions of customers* DECISION SUPPORT SYSTEM DECISION SUPPORT SYSTEM

13.12 © 2002 by Prentice Hall GENERAL ACCIDENT INSURANCE: Customer buying patterns, fraud detectionGENERAL ACCIDENT INSURANCE: Customer buying patterns, fraud detection BANK OF AMERICA: Customer profilesBANK OF AMERICA: Customer profiles FRITO-LAY: Price, advertising, promotion selectionFRITO-LAY: Price, advertising, promotion selection* DECISION SUPPORT SYSTEM DECISION SUPPORT SYSTEM EXAMPLES:

13.13 © 2002 by Prentice Hall BURLINGTON COAT FACTORY: Store location, inventory mixBURLINGTON COAT FACTORY: Store location, inventory mix KEYCORP: Targeting direct mail marketing customersKEYCORP: Targeting direct mail marketing customers NATIONAL GYPSUM: Corporate planning & forecastingNATIONAL GYPSUM: Corporate planning & forecasting* DECISION SUPPORT SYSTEM DECISION SUPPORT SYSTEM

13.14 © 2002 by Prentice Hall SOUTHERN RAILWAY: Train dispatching and routingSOUTHERN RAILWAY: Train dispatching and routing TEXAS OIL & GAS: Evaluating drilling sitesTEXAS OIL & GAS: Evaluating drilling sites UNITED AIRLINES: Flight scheduling, passenger demand forecastingUNITED AIRLINES: Flight scheduling, passenger demand forecasting* DECISION SUPPORT SYSTEM DECISION SUPPORT SYSTEM

13.15 © 2002 by Prentice Hall GROUP DECISION-SUPPORT SYSTEM (GDSS) INTERACTIVE COMPUTER-BASED SYSTEM FACILITATES SOLUTION OF UNSTRUCTURED PROBLEMS BY DECISION MAKERS WORKING AS GROUP *

13.16 © 2002 by Prentice Hall ALLOWS: Improved pre-planning Increased participationIncreased participation Open, collaborative atmosphereOpen, collaborative atmosphere Idea generation free of criticismIdea generation free of criticism Evaluation objectivityEvaluation objectivity Idea organization & evaluationIdea organization & evaluation* GDSS ENHANCED DECISION MAKING

13.17 © 2002 by Prentice Hall ALLOWS: Setting priorities & decision making Documentation of meetingsDocumentation of meetings Access to external informationAccess to external information Preservation of organizational memoryPreservation of organizational memory* GDSS ENHANCED DECISION MAKING

13.18 © 2002 by Prentice Hall TOOLS OF GDSS ELECTRONIC QUESTIONNAIRESELECTRONIC QUESTIONNAIRES ELECTRONIC BRAINSTORMINGELECTRONIC BRAINSTORMING IDEA ORGANIZERSIDEA ORGANIZERS QUESTIONNAIRE TOOLSQUESTIONNAIRE TOOLS TOOLS FOR VOTING, SETTING PRIORITIESTOOLS FOR VOTING, SETTING PRIORITIES*

13.19 © 2002 by Prentice Hall TOOLS OF GDSS STAKEHOLDER IDENTIFICATION & ANALYSIS TOOLSSTAKEHOLDER IDENTIFICATION & ANALYSIS TOOLS POLICY FORMATION TOOLSPOLICY FORMATION TOOLS GROUP DICTIONARIESGROUP DICTIONARIES*

13.20 © 2002 by Prentice Hall ELECTRONIC MEETING SYSTEM (EMS) COLLABORATIVE GDSS: Uses information technology to make group meetings more productive facilitates communication decision making COLLABORATIVE GDSS: Uses information technology to make group meetings more productive facilitates communication decision making*

13.21 © 2002 by Prentice Hall The Research Model for Electronic Meetings GROUP Individual Member Characteristics Group Size Group Size History History Formal/Informal Formal/Informal Ongoing/One-Time Ongoing/One-Time Experience Experience Cohesiveness Cohesiveness etc. etc. TASK Type of Task (e.g., Judgmental) Rational/Political Rational/Political Complexity Complexity etc. etc. CONTEXT Incentives and Reward Systems Organization Culture Organization Culture Environment Environment etc. etc. EMS Presence/Absence of EMS Tools Presence/Absence of EMS Tools Methods Design Methods Design Environmental Design Environmental Design etc. etc. PROCESS Degree of Structure Degree of Structure Number of Sessions Number of Sessions Anonymity Anonymity Leadership Leadership Participation Participation Conflict Conflict Non-Task Behavior Non-Task Behavior etc. etc. OUTCOME Satisfaction with Process and Outcome Satisfaction with Process and Outcome Outcome Quality Outcome Quality Time Required Time Required Number of Alternates Number of Alternates Number of Comments Number of Comments Consensus Consensus Confidence Confidence etc. etc.

13.22 © 2002 by Prentice Hall STRATEGIC INFORMATION SYSTEM DESIGNED FOR UNSTRUCTURED DECISION MAKING THROUGH ADVANCED GRAPHICS AND COMMUNICATIONS * EXECUTIVE SUPPORT SYSTEMS (ESS)

13.23 © 2002 by Prentice Hall EXECUTIVE SUPPORT SYSTEMS DRILL DOWN: ability to move from summary to lower levels of detailDRILL DOWN: ability to move from summary to lower levels of detail Designed for specific needs of CEODesigned for specific needs of CEO Extensive support staffExtensive support staff Executive has 24 hour per day ability to examine, control progress throughout organizationExecutive has 24 hour per day ability to examine, control progress throughout organization*

13.24 © 2002 by Prentice Hall EXECUTIVE SUPPORT SYSTEMS BENEFITS: FLEXIBILITYFLEXIBILITY ABILITY TO ANALYZE, COMPARE, HIGHLIGHT TRENDSABILITY TO ANALYZE, COMPARE, HIGHLIGHT TRENDS GRAPHICS HELP EXPLORE SITUATIONGRAPHICS HELP EXPLORE SITUATION MONITOR PERFORMANCEMONITOR PERFORMANCE TIMELINESS, AVAILABILITY OF DATA ALLOWS PROMPT ACTIONTIMELINESS, AVAILABILITY OF DATA ALLOWS PROMPT ACTION*

13.25 © 2002 by Prentice Hall EXECUTIVE SUPPORT SYSTEMS USES IN A DIGITAL FIRM: BUSINESS INTELLIGENCE: Info on salespeople, distributors, retailersBUSINESS INTELLIGENCE: Info on salespeople, distributors, retailers MONITORING BUSINESS PERFORMANCE: Balanced scorecard shows perspectives of customers, internal processes, learning, growthMONITORING BUSINESS PERFORMANCE: Balanced scorecard shows perspectives of customers, internal processes, learning, growth ENTERPRISE WIDE REPORTING & ANALYSISENTERPRISE WIDE REPORTING & ANALYSIS*

13.26 © 2002 by Prentice Hall c h a p t e r 13 ENHANCING MANAGEMENT DECISION MAKING