Mgt 20600: Mgt 20600: IT Management & ApplicationsIT Management & Applications

Decision Support SystemsDecision Support Systems

ThursdayThursday

November 17, 2005November 17, 2005

RemindersReminders ReadingReading

Fundamentals text, Chapter 6, Information and Decision Fundamentals text, Chapter 6, Information and Decision Support SystemsSupport Systems

Homework 5Homework 5– Covers decision support systemsCovers decision support systems– Will post tomorrowWill post tomorrow– Due by 5pm 11/28/05 (Monday after Thanksgiving break)Due by 5pm 11/28/05 (Monday after Thanksgiving break)

ScheduleSchedule– Next Thursday, 11/24, Thanksgiving!Next Thursday, 11/24, Thanksgiving!– Thursday, 12/1, Exam 3Thursday, 12/1, Exam 3– Thursday, 12/8, classes have ended!Thursday, 12/8, classes have ended!

Exam 3Exam 3– Worth 50 pointsWorth 50 points– Covers decision support systemsCovers decision support systems

ReadingReading HomeworkHomework LectureLecture

Management Information Management Information Systems in PerspectiveSystems in Perspective

A management information system A management information system (MIS) provides managers with (MIS) provides managers with information that supports effective information that supports effective decision making and provides decision making and provides feedback on daily operationsfeedback on daily operations

The use of MISs spans all levels of The use of MISs spans all levels of managementmanagement

Management Information Management Information Systems in PerspectiveSystems in Perspective

Sources of Managerial InformationSources of Managerial Information

Inputs to a Management Inputs to a Management Information SystemInformation System

Internal data sourcesInternal data sources– TPSs and ERP systems and related TPSs and ERP systems and related

databases; data warehouses and data databases; data warehouses and data marts; specific functional areas marts; specific functional areas throughout the firmthroughout the firm

External data sourcesExternal data sources– Customers, suppliers, competitors, and Customers, suppliers, competitors, and

stockholders, whose data is not already stockholders, whose data is not already captured by the TPS; the Internet; captured by the TPS; the Internet; extranetsextranets

Outputs of a Management Outputs of a Management Information SystemInformation System

Scheduled report: Scheduled report: produced periodically, or on produced periodically, or on a schedulea schedule

Key-indicator report: Key-indicator report: summary of the previous summary of the previous day’s critical activitiesday’s critical activities

Demand report: Demand report: developed to give certain developed to give certain information at someone’s requestinformation at someone’s request

Exception report: Exception report: automatically produced when automatically produced when a situation is unusual or requires management a situation is unusual or requires management actionaction

Drill-down report: Drill-down report: provides increasingly provides increasingly detailed data about a situationdetailed data about a situation

Functional Aspects of the MISFunctional Aspects of the MIS

Most organizations are structured Most organizations are structured along functional lines or areasalong functional lines or areas

The MIS can be divided along The MIS can be divided along functional lines to produce reports functional lines to produce reports tailored to individual functionstailored to individual functions

Functional Aspects of the MISFunctional Aspects of the MIS

The MIS is anThe MIS is an

integrated collection ofintegrated collection of

functional informationfunctional information

systems, each supportingsystems, each supporting

particular functional particular functional areas.areas.

Financial Management Financial Management Information SystemsInformation Systems

Financial MIS: Financial MIS: provides financial provides financial information to all financial managers information to all financial managers within an organizationwithin an organization– Profit/loss and cost systemsProfit/loss and cost systems– AuditingAuditing– Uses and management of fundsUses and management of funds

Financial Management Financial Management Information SystemsInformation Systems

Overview of a Financial MISOverview of a Financial MIS

Manufacturing Management Manufacturing Management Information SystemsInformation Systems

The manufacturing MIS subsystems and The manufacturing MIS subsystems and outputs monitor and control the flow of outputs monitor and control the flow of materials, products, and services through materials, products, and services through the organizationthe organization– Design and engineeringDesign and engineering– Production schedulingProduction scheduling– Inventory controlInventory control– MRP (material requirements planning)MRP (material requirements planning)– Process controlProcess control– Quality controlQuality control

Manufacturing Management Manufacturing Management Information SystemsInformation Systems

Overview of a Manufacturing MISOverview of a Manufacturing MIS

Marketing Management Marketing Management Information SystemsInformation Systems

Marketing MIS: Marketing MIS: supports supports managerial activities in product managerial activities in product development, distribution, pricing development, distribution, pricing decisions, promotional effectiveness, decisions, promotional effectiveness, and sales forecastingand sales forecasting– Marketing researchMarketing research– Product developmentProduct development– Promotion and advertisingPromotion and advertising– Product pricingProduct pricing

Marketing Management Marketing Management Information SystemsInformation Systems

Overview of a Marketing MISOverview of a Marketing MIS

Human Resource Management Human Resource Management Information SystemsInformation Systems

Human resource MIS: Human resource MIS: concerned with concerned with activities related to employees and activities related to employees and potential employees of an organizationpotential employees of an organization– Needs and planning assessmentsNeeds and planning assessments– RecruitingRecruiting– Training and skills developmentTraining and skills development– Scheduling and assignmentScheduling and assignment– Employee benefitsEmployee benefits– OutplacementOutplacement

Human Resource Management Human Resource Management Information SystemsInformation Systems

Overview of a Human Resource MISOverview of a Human Resource MIS

Other Management Information Other Management Information SystemsSystems

Accounting MIS: Accounting MIS: provides provides aggregate information on accounts aggregate information on accounts payable, accounts receivable, payable, accounts receivable, payroll, and many other applicationspayroll, and many other applications

Geographic information system Geographic information system (GIS): (GIS): capable of assembling, capable of assembling, storing, manipulating, and displaying storing, manipulating, and displaying geographic informationgeographic information

Decision Making as a Decision Making as a Component of Problem Solving Component of Problem Solving

How Decision Making Relates to Problem SolvingHow Decision Making Relates to Problem Solving

Decision Making as a Decision Making as a Component of Problem SolvingComponent of Problem Solving

Decision-making phase: Decision-making phase: first part first part of problem-solving processof problem-solving process– Intelligence stage: Intelligence stage: potential problems potential problems

or opportunities are identified and or opportunities are identified and defineddefined

– Design stage: Design stage: alternative solutions to alternative solutions to the problem are developedthe problem are developed

– Choice stage: Choice stage: a course of action is a course of action is selectedselected

Decision Making as a Decision Making as a Component of Problem SolvingComponent of Problem Solving

Problem solving: Problem solving: a process that a process that goes beyond decision making to goes beyond decision making to include the implementation stageinclude the implementation stage

Implementation stage: Implementation stage: a solution a solution is put into effectis put into effect

Monitoring stage: Monitoring stage: decision makers decision makers evaluate the implementationevaluate the implementation

Programmed Versus Programmed Versus Nonprogrammed DecisionsNonprogrammed Decisions

Programmed decisionsProgrammed decisions– Decisions made using a rule, procedure, or Decisions made using a rule, procedure, or

quantitative methodquantitative method– Easy to computerize using traditional information Easy to computerize using traditional information

systemssystems– Example?Example?

Nonprogrammed decisionsNonprogrammed decisions– Decision that deals with unusual or exceptional Decision that deals with unusual or exceptional

situationssituations– Not easily quantifiableNot easily quantifiable– Example?Example?

Optimization, Satisficing, and Optimization, Satisficing, and Heuristic ApproachesHeuristic Approaches

Optimization model: Optimization model: a process that finds a process that finds the best solution, usually the one that will the best solution, usually the one that will best help the organization meet its goalsbest help the organization meet its goals

Satisficing model: Satisficing model: a process that finds a a process that finds a good—but not necessarily the best—good—but not necessarily the best—problem solutionproblem solution

Heuristics: Heuristics: commonly accepted commonly accepted guidelines or procedures that usually find guidelines or procedures that usually find a good solutiona good solution

An Overview of Decision An Overview of Decision Support SystemsSupport Systems

A DSS is an organized collection of A DSS is an organized collection of people, procedures, software, people, procedures, software, databases, and devices used to databases, and devices used to support problem-specific decision support problem-specific decision making and problem solvingmaking and problem solving

The focus of a DSS is on decision-The focus of a DSS is on decision-making effectiveness when faced making effectiveness when faced with unstructured or semistructured with unstructured or semistructured business problemsbusiness problems

Capabilities of a Decision Capabilities of a Decision Support SystemSupport System

Support all problem-solving phasesSupport all problem-solving phases Support different decision Support different decision

frequenciesfrequencies Support different problem structuresSupport different problem structures Support various decision-making Support various decision-making

levels levels

Capabilities of a Decision Capabilities of a Decision Support System (continued)Support System (continued)

Decision-Making LevelDecision-Making Level

A Comparison of DSS and MISA Comparison of DSS and MIS

Comparison of DSSs and MISsComparison of DSSs and MISs

A Comparison of DSS and MIS A Comparison of DSS and MIS (continued)(continued)

Comparison of DSSs and MISsComparison of DSSs and MISs

Components of a Decision Components of a Decision Support SystemSupport System

Conceptual Model of a DSSConceptual Model of a DSS

Components of a Decision Components of a Decision Support SystemSupport System

DatabaseDatabase External database accessExternal database access Access to the Internet and corporate intranet, Access to the Internet and corporate intranet,

networks, and other computer systemsnetworks, and other computer systems Model base: Model base: provides decision makers access to provides decision makers access to

a variety of models and assists them in decision a variety of models and assists them in decision makingmaking

Dialogue manager: Dialogue manager: allows decision makers to allows decision makers to easily access and manipulate the DSS and to use easily access and manipulate the DSS and to use common business terms and phrasescommon business terms and phrases

Intelligence Phase Support: Intelligence Phase Support: Data MiningData Mining

Online retailer Overstock.com Inc. has begun connecting Online retailer Overstock.com Inc. has begun connecting users to a real-time data warehouse it completed last users to a real-time data warehouse it completed last monthmonth

The project's goal is to help employees gain insight into the The project's goal is to help employees gain insight into the effectiveness of the company's online and e-mail effectiveness of the company's online and e-mail advertising campaigns. advertising campaigns.

Overstock is using transactional data management tools Overstock is using transactional data management tools from GoldenGate Software Inc. to pull information directly from GoldenGate Software Inc. to pull information directly from its business systems into the data warehousefrom its business systems into the data warehouse

Now the data warehouse receives Web site clickstream Now the data warehouse receives Web site clickstream data in real time, financial and product-sales data every 15 data in real time, financial and product-sales data every 15 minutes and other information hourly. minutes and other information hourly.

"When we launch campaigns now, we can look within five "When we launch campaigns now, we can look within five minutes and see if they are producing lift or revenue that minutes and see if they are producing lift or revenue that would not normally have happened," Garcella said. would not normally have happened," Garcella said.

"You can't wait until the next day or three hours later to get "You can't wait until the next day or three hours later to get that data." that data."

Intelligence Phase Support: Intelligence Phase Support: Excel and AccessExcel and Access

ExcelExcel– List capabilities: Sorting, filteringList capabilities: Sorting, filtering– Pivot tablesPivot tables– ChartingCharting

AccessAccess– QueriesQueries– ReportsReports

Design Phase Support: ExcelDesign Phase Support: Excel

ExcelExcel– What if analysisWhat if analysis

Data tablesData tablesScenario managerScenario manager

Stages of the Decision Making Stages of the Decision Making Process: ChoiceProcess: Choice

Selecting a course of actionSelecting a course of action– ExcelExcel

SolverSolver

– Expert systemsExpert systems Intended to perform at the level of a human Intended to perform at the level of a human

expert in a particular domainexpert in a particular domain

– Decision Tree AnalysisDecision Tree AnalysisAdd-in to Excel that facilitates construction Add-in to Excel that facilitates construction

of decision treesof decision trees

Common Expert System Common Expert System ArchitectureArchitectureUser

Knowledge Engineer

UserInterface

Inference Engine

Knowledge Base

User Environment Development Environment

Blackboard

DocumentedKnowledge

ExpertKnowledge

Decision Tree Analysis OutputDecision Tree Analysis Output

Group Support SystemsGroup Support Systems

Group support system (GSS)Group support system (GSS)– Consists of most elements in a DSS, plus Consists of most elements in a DSS, plus

software to provide effective support in software to provide effective support in group decision makinggroup decision making

– Also called group decision support Also called group decision support system or computerized collaborative system or computerized collaborative work systemwork system

Characteristics of a GSS That Characteristics of a GSS That Enhance Decision MakingEnhance Decision Making

Special designSpecial design Ease of useEase of use FlexibilityFlexibility Decision-making supportDecision-making support Anonymous inputAnonymous input Reduction of negative group behaviorReduction of negative group behavior Parallel communicationParallel communication Automated record keepingAutomated record keeping

GSS SoftwareGSS Software Often called groupware or workgroup Often called groupware or workgroup

softwaresoftware Helps with joint workgroup Helps with joint workgroup

scheduling, communication, and scheduling, communication, and managementmanagement

Examples: Lotus Notes, Microsoft’s Examples: Lotus Notes, Microsoft’s NetMeeting, Microsoft Exchange, NetMeeting, Microsoft Exchange, NetDocuments Enterprise, Collabra NetDocuments Enterprise, Collabra Share, OpenMind, TeamWareShare, OpenMind, TeamWare

GSS AlternativesGSS Alternatives

GSS AlternativesGSS Alternatives

GSS AlternativesGSS Alternatives

The GSS Decision RoomThe GSS Decision Room

Group Support System ExampleGroup Support System Example

Meeting, Brainstorming, and DecisionMeeting, Brainstorming, and Decision Making Tools for groups Making Tools for groups

Executive Support SystemsExecutive Support Systems

Executive support system (ESS): Executive support system (ESS): specialized DSS that includes all specialized DSS that includes all hardware, software, data, hardware, software, data, procedures, and people used to procedures, and people used to assist senior-level executives within assist senior-level executives within the organizationthe organization

Executive Support Systems in Executive Support Systems in PerspectivePerspective

Tailored to individual executivesTailored to individual executives Easy to useEasy to use Drill-down capableDrill-down capable Support the need for external dataSupport the need for external data Can help when uncertainty is highCan help when uncertainty is high Future-orientedFuture-oriented Linked to value-added processesLinked to value-added processes

Capabilities of Executive Capabilities of Executive Support SystemsSupport Systems

Support for defining an overall visionSupport for defining an overall vision Support for strategic planningSupport for strategic planning Support for strategic organizing and Support for strategic organizing and

staffingstaffing Support for strategic controlSupport for strategic control Support for crisis managementSupport for crisis management

Executive Support SystemsExecutive Support Systems

– XcelsiusXcelsius– Executive DashboardExecutive Dashboard

Identify, track, trend, and correct problems Identify, track, trend, and correct problems as managers evaluate the health of key as managers evaluate the health of key areas of their organizationareas of their organization

Identify operational efficienciesIdentify operational efficienciesProactively identify and apply corrective Proactively identify and apply corrective

measuresmeasures

Executive Dashboard Executive Dashboard FeaturesFeatures

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.