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Mgt 20600: IT Management & Applications Decision Support Systems

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1 Mgt 20600: IT Management & Applications Decision Support Systems
Thursday November 17, 2005

2 Reminders Reading Fundamentals text, Chapter 6, Information and Decision Support Systems Homework 5 Covers decision support systems Will post tomorrow Due by 5pm 11/28/05 (Monday after Thanksgiving break) Schedule Next Thursday, 11/24, Thanksgiving! Thursday, 12/1, Exam 3 Thursday, 12/8, classes have ended! Exam 3 Worth 50 points Homework Lecture

3 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

4 Management Information Systems in Perspective
Sources of Managerial Information

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

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

7 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

8 Functional Aspects of the MIS
The MIS is an integrated collection of functional information systems, each supporting particular functional areas.

9 Financial Management Information Systems
Financial MIS: provides financial information to all financial managers within an organization Profit/loss and cost systems Auditing Uses and management of funds

10 Financial Management Information Systems
Overview of a Financial MIS

11 Manufacturing Management Information Systems
The manufacturing MIS subsystems and outputs monitor and control the flow of materials, products, and services through the organization Design and engineering Production scheduling Inventory control MRP (material requirements planning) Process control Quality control

12 Manufacturing Management Information Systems
Overview of a Manufacturing MIS

13 Marketing Management Information Systems
Marketing MIS: supports managerial activities in product development, distribution, pricing decisions, promotional effectiveness, and sales forecasting Marketing research Product development Promotion and advertising Product pricing

14 Marketing Management Information Systems
Overview of a Marketing MIS

15 Human Resource Management Information Systems
Human resource MIS: concerned with activities related to employees and potential employees of an organization Needs and planning assessments Recruiting Training and skills development Scheduling and assignment Employee benefits Outplacement

16 Human Resource Management Information Systems
Overview of a Human Resource MIS

17 Other Management Information Systems
Accounting MIS: provides aggregate information on accounts payable, accounts receivable, payroll, and many other applications Geographic information system (GIS): capable of assembling, storing, manipulating, and displaying geographic information

18 Decision Making as a Component of Problem Solving
How Decision Making Relates to Problem Solving

19 Decision Making as a Component of Problem Solving
Decision-making phase: first part of problem-solving process Intelligence stage: potential problems or opportunities are identified and defined Design stage: alternative solutions to the problem are developed Choice stage: a course of action is selected

20 Decision Making as a Component of Problem Solving
Problem solving: a process that goes beyond decision making to include the implementation stage Implementation stage: a solution is put into effect Monitoring stage: decision makers evaluate the implementation

21 Programmed Versus Nonprogrammed Decisions
Decisions made using a rule, procedure, or quantitative method Easy to computerize using traditional information systems Example? Nonprogrammed decisions Decision that deals with unusual or exceptional situations Not easily quantifiable

22 Optimization, Satisficing, and Heuristic Approaches
Optimization model: a process that finds the best solution, usually the one that will best help the organization meet its goals Satisficing 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

23 An Overview of Decision Support Systems
A DSS is an organized 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 effectiveness when faced with unstructured or semistructured business problems

24 Capabilities of a Decision Support System
Support all problem-solving phases Support different decision frequencies Support different problem structures Support various decision-making levels

25 Capabilities of a Decision Support System (continued)
Decision-Making Level

26 A Comparison of DSS and MIS
Comparison of DSSs and MISs

27 A Comparison of DSS and MIS (continued)
Comparison of DSSs and MISs

28 Components of a Decision Support System
Conceptual Model of a DSS

29 Components of a Decision Support System
Database External database access Access to the Internet and corporate intranet, networks, and other computer systems Model base: provides decision makers access to a variety of models and assists them in decision making Dialogue manager: allows decision makers to easily access and manipulate the DSS and to use common business terms and phrases

30 Intelligence Phase Support: Data Mining
Online retailer Inc. has begun connecting users to a real-time data warehouse it completed last month The project's goal is to help employees gain insight into the effectiveness of the company's online and advertising campaigns. Overstock is using transactional data management tools from GoldenGate Software Inc. to pull information directly from its business systems into the data warehouse Now the data warehouse receives Web site clickstream data in real time, financial and product-sales data every 15 minutes and other information hourly. "When we launch campaigns now, we can look within five minutes and see if they are producing lift or revenue that would not normally have happened," Garcella said. "You can't wait until the next day or three hours later to get that data."

31 Intelligence Phase Support: Excel and Access
List capabilities: Sorting, filtering Pivot tables Charting Access Queries Reports

32 Design Phase Support: Excel
What if analysis Data tables Scenario manager

33 Stages of the Decision Making Process: Choice
Selecting a course of action Excel Solver Expert systems Intended to perform at the level of a human expert in a particular domain Decision Tree Analysis Add-in to Excel that facilitates construction of decision trees

34 Common Expert System Architecture
User Knowledge Engineer Interface Inference Engine Base User Environment Development Environment Blackboard Documented Expert Here we have a standard view of the main components of an expert system. Note the Knowledge Base, the Inference Engine, and the Blackboard. The knowledge base is specific to a particular problem domain associated with the ES. It contains the information elicited from the domain experts and from any other sources of expertise. The inference engine provides the mechanism for deciding which of the IF-THEN rules should fire at a given moment. The blackboard serves as a scratchpad for information related to the current focus of the system. When new knowledge comes from the environment or from the operation of a rule, the knowledge is added to the blackboard. The inference engine is always scanning the blackboard to see what new information has become available.

35 Decision Tree Analysis Output

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

37 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

38 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

39 GSS Alternatives GSS Alternatives

40 GSS Alternatives The GSS Decision Room

41 Group Support System Example
Meeting, Brainstorming, and Decision Making Tools for groups

42 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

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

44 Capabilities of Executive Support Systems
Support for defining an overall vision Support for strategic planning Support for strategic organizing and staffing Support for strategic control Support for crisis management

45 Executive Support Systems
Xcelsius Executive Dashboard Identify, track, trend, and correct problems as managers evaluate the health of key areas of their organization Identify operational efficiencies Proactively identify and apply corrective measures

46 Executive Dashboard Features
Dashboard Screen: The dashboard page displays the overall health of key performance indicators. Each box represents a key performance indicator (KPI) and the health for corresponding periods. The default executive dashboard shown can be unique to the individual logged in, or shared by the entire organization.

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