Week No. 6, 7-Topic 8-Management Information Systems and DSS.pptx

Chapter 08: Management Information and Decision Support Systems Stair, Reynolds and Chesney: Principles of Business Information Systems, Fourth edition (9781473774605) © Cengage Learning 2021 Principles • Good decision-making and problem-solving skills are the key to developing effective informat...

Chapter 08: Management Information and Decision Support Systems Stair, Reynolds and Chesney: Principles of Business Information Systems, Fourth edition (9781473774605) © Cengage Learning 2021 Principles • Good decision-making and problem-solving skills are the key to developing effective information and decision support systems. • A management information system (MIS) must provide the right information to the right person in the right format at the right time. • Decision support systems (DSS) support decision-making effectiveness when faced with unstructured or semi-structured business problems. • Specialized support systems, such as group support systems (GSS) and executive support systems (ESS), use the overall approach of a DSS in situations such as group and executive decision making. For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning Decision making and Problem solving • Every organization needs effective decision making • In most cases, strategic planning and overall goals of the organization set the course for decision making For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning 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: requires selecting a course of action. • Problem solving: goes beyond decision making to include implementation and monitoring stages • Implementation stage: a solution is put into effect • Monitoring stage: decision makers evaluate the implementation For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning Programmed Versus Non-programmed Decisions • Programmed decision – Decision made using a rule, procedure, or quantitative method – Easy to computerize using traditional information systems. • Non-programmed decision – Decision that deals with unusual or exceptional situations – Not easily quantifiable For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning Optimization, Satisficing, and Heuristic approaches • Optimization model: find the best solution, usually the one that will best help the organization meet its goals. • Satisficing model: find a good – but not necessarily the best – problem solution. • Heuristics: commonly accepted guidelines or procedures that usually find a good solution For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning Organizational Decision-Making Levels » Most businesses have three levels of management: • The executive management includes top-tier management focused on long-term strategic business decisions such as how to compete, price versus quality, and what countries to do business in. • Middle or tactical management is focused on running the organization to meet the strategic goals, and typically has a management time frame of 3 to 12 months. • Operational employees and management perform the dayto-day work of the organization, making decisions on a dayby-day basis. For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning Organizational Decision-Making Levels: Executive/Strategic Level For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning Organizational Decision-Making Levels: Managerial/Tactical Level For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning Organizational Decision-Making Levels: Operational Level For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning An Overview of Management Information Systems • Management information system (MIS) – Integrated collection of people, procedures, databases, and devices provides managers and decision makers with information to help achieve organizational goals. – Can give the organization a competitive advantage. – Providing the right information to the right people in the right forma and at the right time. – Provides managers with information that supports effective decisio making and provides feedback on daily operations For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning Inputs to an MIS • There are tow types of inputs ( sources ) for MIS. • 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 – Internet – Extranets For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning Outputs from an MIS • Scheduled report: produced periodically, or on schedule, such as daily, weekly, or monthly. • Key-indicator report: summary of 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 reports: provide increasingly detailed data about a situation For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning Organizational Functions and Functional Levels • A functional area represents a discrete area of an organization that focuses on a specific set of activities. • For example, people in the marketing function focus on the activities that promote the organization and its products in a way that attracts and retains customers. For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning Functional Area Information Systems • Common functional area information systems • Financial MIS • Manufacturing MIS • Marketing MIS • Human resource MIS • Accounting MIS For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning Decision Support Systems • A DSS is an organized collection of people, procedures, software, databases, and devices used to help make decisions that solve problems. • Components of DSS: • Database • Model base • Dialogue manager • Access to the Internet, networks, and other computerbased systems For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning Components of DSS For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning Components of DSS • Database management system – Allows managers and decision makers to perform qualitative analysis on data stored in company’s databases, data warehouses, and data marts – Can also be used to connect to external databases • Model base: • provides decision makers with access to a variety of models and assists them in decision making For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning Components of DSS • The User Interface or Dialogue Manager • Allows users to interact with the DSS to obtain information • Assists with all aspects of communications between user and hardware and software that constitute the DSS For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning Decision Support Systems (DSS) • A DSS is an organized collection of people, procedures, software, databases, and devices used to help make decisions that solve problems • Focus of a DSS is on decision-making effectiveness regarding unstructured or semi-structured business problems • Used by managers at all levels For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning Summary • Decision-making phase: includes intelligence, design, and choice stages. • Problem-solving process: includes decision-making phase, and implementation and monitoring stages. • Management information system (MIS): provides managers with information that supports effective decision making and provides feedback on daily operations. • Financial MIS: provides financial information to executives and others For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning