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11.1
Management Information Systems 8/eManagement Information Systems 8/eChapter 13 Enhancing Management Decision-Making for the Digital FirmChapter 13 Enhancing Management Decision-Making for the Digital Firm1313
ENHANCINGENHANCING
MANAGEMENTMANAGEMENT
DECISION-MAKINGDECISION-MAKING
FOR THE DIGITAL FIRMFOR THE DIGITAL FIRM
Chapter
11.2
Management Information Systems 8/eManagement Information Systems 8/eChapter 13 Enhancing Management Decision-Making for the Digital FirmChapter 13 Enhancing Management Decision-Making for the Digital Firm
• How can information systems help How can information systems help individual managers make better individual managers make better decisions when the problems are non-decisions when the problems are non-routine and constantly changing?routine and constantly changing?
• How can information systems help people How can information systems help people working in a group make decisions more working in a group make decisions more efficiently?efficiently?
OBJECTIVES
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Management Information Systems 8/eManagement Information Systems 8/eChapter 13 Enhancing Management Decision-Making for the Digital FirmChapter 13 Enhancing Management Decision-Making for the Digital Firm
• Are there any special systems that can facilitate Are there any special systems that can facilitate decision-making among senior managers? decision-making among senior managers? Exactly what can these systems do to help high-Exactly what can these systems do to help high-level management?level management?
• What benefits can systems that support What benefits can systems that support management decision-making provide for the management decision-making provide for the organization as a whole?organization as a whole?
OBJECTIVES
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Management Information Systems 8/eManagement Information Systems 8/eChapter 13 Enhancing Management Decision-Making for the Digital FirmChapter 13 Enhancing Management Decision-Making for the Digital Firm
• Building information systems that can Building information systems that can actually fulfill executive information actually fulfill executive information requirementsrequirements
• Create meaningful reporting and management Create meaningful reporting and management decision-making processesdecision-making processes
MANAGEMENT CHALLENGES
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Management Information Systems 8/eManagement Information Systems 8/eChapter 13 Enhancing Management Decision-Making for the Digital FirmChapter 13 Enhancing Management Decision-Making for the Digital Firm
• Computer system at the management level of Computer system at the management level of an organizationan organization
• Combines data, analytical tools, and models Combines data, analytical tools, and models
• Supports semi-structured and unstructured Supports semi-structured and unstructured decision-makingdecision-making
DECISION-SUPPORT SYSTEMS (DSS)
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Management Information Systems 8/eManagement Information Systems 8/eChapter 13 Enhancing Management Decision-Making for the Digital FirmChapter 13 Enhancing Management Decision-Making for the Digital Firm
MISMIS
• Provides reports based on routine flow Provides reports based on routine flow of dataof data
• Assists in general control of the Assists in general control of the organizationorganization
DECISION-SUPPORT SYSTEMS (DSS)
MIS and DSS
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Management Information Systems 8/eManagement Information Systems 8/eChapter 13 Enhancing Management Decision-Making for the Digital FirmChapter 13 Enhancing Management Decision-Making for the Digital Firm
DSSDSS
• Emphasizes change, flexibility, rapid Emphasizes change, flexibility, rapid response, models, assumptions, ad hoc response, models, assumptions, ad hoc queries, and display graphicsqueries, and display graphics
DECISION-SUPPORT SYSTEMS (DSS)
MIS and DSS
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Management Information Systems 8/eManagement Information Systems 8/eChapter 13 Enhancing Management Decision-Making for the Digital FirmChapter 13 Enhancing Management Decision-Making for the Digital Firm
Model-driven DSSModel-driven DSS
• Primarily stand-alone Primarily stand-alone
• Uses model to perform “what-if” and other Uses model to perform “what-if” and other kinds of analysiskinds of analysis
DECISION-SUPPORT SYSTEMS (DSS)
Types of Decision-Support Systems
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Management Information Systems 8/eManagement Information Systems 8/eChapter 13 Enhancing Management Decision-Making for the Digital FirmChapter 13 Enhancing Management Decision-Making for the Digital Firm
Data-driven DSSData-driven DSS• Allows users to extract and analyze useful Allows users to extract and analyze useful
information from large databasesinformation from large databases
DataminingDatamining• Finds hidden patterns and relationships in Finds hidden patterns and relationships in
large databases to infer ruleslarge databases to infer rules• Knowledge discoveryKnowledge discovery
DECISION-SUPPORT SYSTEMS (DSS)
Types of Decision-Support Systems
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Management Information Systems 8/eManagement Information Systems 8/eChapter 13 Enhancing Management Decision-Making for the Digital FirmChapter 13 Enhancing Management Decision-Making for the Digital Firm
DECISION-SUPPORT SYSTEMS (DSS)
CargoBookingAgent Request
Cargo Size,Rate Data
CargoAvailabilityForecast
PassengerForecast Data
Confirm/Reject
1CARGO
RESERVATIONSYSTEM
2
FLIGHTSCHEDULE
SERVER
5
PASSENGERRESERVATION
SYSTEM
4
xxx
Availability/Minimum Price
PassengerBookingAgent
CARGOPROFREVENUE
MANAGEMENT SYSTEM
3
Figure 11-1
11.11
Management Information Systems 8/eManagement Information Systems 8/eChapter 13 Enhancing Management Decision-Making for the Digital FirmChapter 13 Enhancing Management Decision-Making for the Digital Firm
DECISION-SUPPORT SYSTEMS (DSS)
Overview of a Decision-Support System (DSS)
Figure 11-2
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Management Information Systems 8/eManagement Information Systems 8/eChapter 13 Enhancing Management Decision-Making for the Digital FirmChapter 13 Enhancing Management Decision-Making for the Digital Firm
DSS database: DSS database: ccollection of current or ollection of current or historical datahistorical data
DSS software system: DSS software system: ccollection of ollection of software tools/mathematical and analytical software tools/mathematical and analytical models models
User interface:User interface: easy interaction easy interaction
DECISION-SUPPORT SYSTEMS (DSS)
Components of Decision-Support Systems
11.13
Management Information Systems 8/eManagement Information Systems 8/eChapter 13 Enhancing Management Decision-Making for the Digital FirmChapter 13 Enhancing Management Decision-Making for the Digital Firm
ModelModel
• Abstract representation illustrating Abstract representation illustrating components or relationships components or relationships
Sensitivity analysisSensitivity analysis
• Asks “what-if” questions repeatedly to Asks “what-if” questions repeatedly to determine the impact of changedetermine the impact of change
DECISION-SUPPORT SYSTEMS (DSS)
Components of Decision-Support Systems
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Management Information Systems 8/eManagement Information Systems 8/eChapter 13 Enhancing Management Decision-Making for the Digital FirmChapter 13 Enhancing Management Decision-Making for the Digital Firm
DECISION-SUPPORT SYSTEMS (DSS)
Sensitivity Analysis
Figure 11-3
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Management Information Systems 8/eManagement Information Systems 8/eChapter 13 Enhancing Management Decision-Making for the Digital FirmChapter 13 Enhancing Management Decision-Making for the Digital Firm
• General Accident Insurance:General Accident Insurance: Customer buying patterns and fraud Customer buying patterns and fraud detectiondetection
• Bank of America:Bank of America: Customer profilesCustomer profiles
• Frito-Lay, Inc.:Frito-Lay, Inc.: Price, advertising, and Price, advertising, and promotion selectionpromotion selection
DECISION-SUPPORT SYSTEMS (DSS)
DSS Applications and the Digital Firm
11.16
Management Information Systems 8/eManagement Information Systems 8/eChapter 13 Enhancing Management Decision-Making for the Digital FirmChapter 13 Enhancing Management Decision-Making for the Digital Firm
• Burlington Coat Factory:Burlington Coat Factory: Store Store location and inventory mixlocation and inventory mix
• Keycorp:Keycorp: Targeting direct mail marketing Targeting direct mail marketing customerscustomers
• National Gypsum:National Gypsum: Corporate planning Corporate planning and forecastingand forecasting
DECISION-SUPPORT SYSTEMS (DSS)
DSS Applications and the Digital Firm
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Management Information Systems 8/eManagement Information Systems 8/eChapter 13 Enhancing Management Decision-Making for the Digital FirmChapter 13 Enhancing Management Decision-Making for the Digital Firm
• Comprehensive examination of supply Comprehensive examination of supply management chain management chain
• Searches for most efficient and cost-Searches for most efficient and cost-effective combinationeffective combination
• Reduces overall costsReduces overall costs
• Increases speed and accuracy of filling Increases speed and accuracy of filling customer orderscustomer orders
DECISION-SUPPORT SYSTEMS (DSS)
DSS for Supply Chain Management
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Management Information Systems 8/eManagement Information Systems 8/eChapter 13 Enhancing Management Decision-Making for the Digital FirmChapter 13 Enhancing Management Decision-Making for the Digital Firm
• Uses data mining to guide decisions Uses data mining to guide decisions
• Consolidates customer information into Consolidates customer information into massive data warehousesmassive data warehouses
• Uses various analytical tools to slice Uses various analytical tools to slice information into small segments information into small segments
DECISION-SUPPORT SYSTEMS (DSS)
DSS for Customer Relationship Management
11.19
Management Information Systems 8/eManagement Information Systems 8/eChapter 13 Enhancing Management Decision-Making for the Digital FirmChapter 13 Enhancing Management Decision-Making for the Digital Firm
DECISION-SUPPORT SYSTEMS (DSS)
DSS for Customer Analysis and Segmentation
Figure 11-4
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Management Information Systems 8/eManagement Information Systems 8/eChapter 13 Enhancing Management Decision-Making for the Digital FirmChapter 13 Enhancing Management Decision-Making for the Digital Firm
Geographic Information Systems (GIS)Geographic Information Systems (GIS)
• Software for analyzing and displaying data Software for analyzing and displaying data using digitized mapsusing digitized maps
• Enhances planning and decision-makingEnhances planning and decision-making
• Use data visualization technologyUse data visualization technology
DECISION-SUPPORT SYSTEMS (DSS)
DSS for Simulating Business Scenarios
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Management Information Systems 8/eManagement Information Systems 8/eChapter 13 Enhancing Management Decision-Making for the Digital FirmChapter 13 Enhancing Management Decision-Making for the Digital Firm
Customer Decision-Support Systems Customer Decision-Support Systems (CDSS)(CDSS)
• Support decision-making process of an Support decision-making process of an existing or potential customerexisting or potential customer
DECISION-SUPPORT SYSTEMS (DSS)
Web-Based Customer Decision-Support Systems
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Management Information Systems 8/eManagement Information Systems 8/eChapter 13 Enhancing Management Decision-Making for the Digital FirmChapter 13 Enhancing Management Decision-Making for the Digital Firm
• Interactive computer-based system Interactive computer-based system
• Facilitates solution to unstructured Facilitates solution to unstructured problems problems
• Set of decision makers working together Set of decision makers working together as a groupas a group
GROUP DECISION-SUPPORT SYSTEMS (GDSS)
What Is a GDSS?
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Management Information Systems 8/eManagement Information Systems 8/eChapter 13 Enhancing Management Decision-Making for the Digital FirmChapter 13 Enhancing Management Decision-Making for the Digital Firm
• Hardware: Hardware: Conference facility, electronic Conference facility, electronic hardwarehardware
• Software tools: Software tools: Tools for organizing ideas, Tools for organizing ideas, gathering information, and ranking and gathering information, and ranking and seeking prioritiesseeking priorities
• People: People: Participants, trained facilitator, Participants, trained facilitator, staff supporting hardware and softwarestaff supporting hardware and software
GROUP DECISION-SUPPORT SYSTEMS (GDSS)
Characteristics of GDSS
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Management Information Systems 8/eManagement Information Systems 8/eChapter 13 Enhancing Management Decision-Making for the Digital FirmChapter 13 Enhancing Management Decision-Making for the Digital Firm
• Electronic questionnairesElectronic questionnaires
• Electronic brainstorming toolsElectronic brainstorming tools
• Idea organizersIdea organizers
• Questionnaire toolsQuestionnaire tools
GROUP DECISION-SUPPORT SYSTEMS (GDSS)
GDSS Software Tools
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Management Information Systems 8/eManagement Information Systems 8/eChapter 13 Enhancing Management Decision-Making for the Digital FirmChapter 13 Enhancing Management Decision-Making for the Digital Firm
• Tools for voting or setting prioritiesTools for voting or setting priorities
• Stakeholder identification and analysis Stakeholder identification and analysis toolstools
GROUP DECISION-SUPPORT SYSTEMS (GDSS)
GDSS Software Tools
11.26
Management Information Systems 8/eManagement Information Systems 8/eChapter 13 Enhancing Management Decision-Making for the Digital FirmChapter 13 Enhancing Management Decision-Making for the Digital Firm
DECISION-SUPPORT SYSTEMS (DSS)
Figure 11-5
Group Interaction
SessionManager
SessionPlanning
IdeaGeneration
IdeaOrganization
Prioritizing
PolicyDevelopment
BrainstormingTopic Commenter
Group Outliner
Idea OrganizerIssue AnalyzerGroup Writer
Vote SelectionAlternative Eval.
QuestionnaireGroup Matrix
Policy FormationStakeholder ID.
Organizational Memory
Enterprise AnalyzerGraphical BrowserGroup Dictionary
Brief Case• Access to information
• Personal productivity
11.27
Management Information Systems 8/eManagement Information Systems 8/eChapter 13 Enhancing Management Decision-Making for the Digital FirmChapter 13 Enhancing Management Decision-Making for the Digital Firm
• Improved preplanningImproved preplanning
• Increased participation Increased 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
11.28
Management Information Systems 8/eManagement Information Systems 8/eChapter 13 Enhancing Management Decision-Making for the Digital FirmChapter 13 Enhancing Management Decision-Making for the Digital Firm
Executive Support Systems (ESS):Executive Support Systems (ESS):
• Information system at strategic level of an Information system at strategic level of an organizationorganization
• Addresses unstructured decision-making Addresses unstructured decision-making through advanced graphics and through advanced graphics and communicationscommunications
EXECUTIVE SUPPORT IN THE ENTERPRISE
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Management Information Systems 8/eManagement Information Systems 8/eChapter 13 Enhancing Management Decision-Making for the Digital FirmChapter 13 Enhancing Management Decision-Making for the Digital Firm
• Brings together data from the entire Brings together data from the entire organization organization
• Allows managers to select, access, and Allows managers to select, access, and tailor data tailor data
• Enables executive and any subordinates Enables executive and any subordinates to look at the same data in the same wayto look at the same data in the same way
GROUP DECISION-SUPPORT SYSTEMS (GDSS)
The Role of Executive Support Systems in the Organization
11.30
Management Information Systems 8/eManagement Information Systems 8/eChapter 13 Enhancing Management Decision-Making for the Digital FirmChapter 13 Enhancing Management Decision-Making for the Digital Firm
Developing ESS: Developing ESS:
• Ease of useEase of use
• Facility for environmental scanningFacility for environmental scanning
• External and internal sources of External and internal sources of information to be used for environmental information to be used for environmental scanning scanning
GROUP DECISION-SUPPORT SYSTEMS (GDSS)
The Role of Executive Support Systems in the Organization
11.31
Management Information Systems 8/eManagement Information Systems 8/eChapter 13 Enhancing Management Decision-Making for the Digital FirmChapter 13 Enhancing Management Decision-Making for the Digital Firm
• Analyzes, compares, and highlights trendsAnalyzes, compares, and highlights trends
• Provides greater clarity and insight into Provides greater clarity and insight into datadata
• Speeds up decision-makingSpeeds up decision-making
GROUP DECISION-SUPPORT SYSTEMS (GDSS)
Benefits of Executive Support Systems Benefits of Executive Support Systems
11.32
Management Information Systems 8/eManagement Information Systems 8/eChapter 13 Enhancing Management Decision-Making for the Digital FirmChapter 13 Enhancing Management Decision-Making for the Digital Firm
• Improves management performance Improves 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
11.33
Management Information Systems 8/eManagement Information Systems 8/eChapter 13 Enhancing Management Decision-Making for the Digital FirmChapter 13 Enhancing Management Decision-Making for the Digital Firm
ESS for business intelligence: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
11.34
Management Information Systems 8/eManagement Information Systems 8/eChapter 13 Enhancing Management Decision-Making for the Digital FirmChapter 13 Enhancing Management Decision-Making for the Digital Firm
Monitoring corporate performance: Monitoring corporate performance:
balanced scorecard systemsbalanced scorecard systems
• Model for analyzing firm performanceModel for analyzing firm performance
• Supplements traditional financial Supplements traditional financial measures with measurements from measures with measurements from additional business perspectivesadditional business perspectives
GROUP DECISION-SUPPORT SYSTEMS (GDSS)
Executive Support Systems and the Digital Firm
11.35
Management Information Systems 8/eManagement Information Systems 8/eChapter 13 Enhancing Management Decision-Making for the Digital FirmChapter 13 Enhancing Management Decision-Making for the Digital Firm
Strategic performance management tools Strategic performance management tools
for enterprise systemsfor enterprise systems
• SAP:SAP: Web-enabled mySAP.com™, Web-enabled mySAP.com™, Management CockpitManagement Cockpit
• PeopleSoft:PeopleSoft: Web-enabled Enterprise Web-enabled Enterprise Performance Management (EPM) Performance Management (EPM)
• Oracle:Oracle: Strategic Enterprise Management Strategic Enterprise Management
GROUP DECISION-SUPPORT SYSTEMS (GDSS)
Enterprise Wide Reporting and Analysis
11.36
Management Information Systems 8/eManagement Information Systems 8/eChapter 13 Enhancing Management Decision-Making for the Digital FirmChapter 13 Enhancing Management Decision-Making for the Digital Firm1313
ENHANCINGENHANCING
MANAGEMENTMANAGEMENT
DECISION-MAKINGDECISION-MAKING
FOR THE DIGITAL FIRMFOR THE DIGITAL FIRM
Chapter