8. enhancing decision making

8/8/2019 8. Enhancing Decision Making

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ENHANCING DECISION MAKING



T YPES OF DECISIONS

Unstructured Decisions:

y In which the decision maker must provide

judgment, evaluation and insight to solve

the problem

y The decisions are novel, important andnonroutine

y There is no specified procedure to solve

themy Examples: A pprove capital budget; decide

corporate objectives



T YPES OF DECISIONS(CONTI..)

Structured Decision:y The decisions are repetitive and routine

y Involve definite procedure for handling

themy Examples: Restock inventory; determine

special offers to customers

Semistructured Decision

y Examples: A llocate resources to managers;

develop a marketing plan



DECISION MAKING LEVELS IN A FIRM



THE DECISION MAKING PROCESS

Stages:

1) Intelligence: Discovering, identifying and

understanding the problems occurring in

the organization(what is the problem)2) Design: Identifying and exploring various

solutions to the problem

3) Choice: Choosing among solutionalternatives

4) Implementation: Making the chosen

alternative work



DDECISIONECISION MM AKING AKING ININ THETHE RREALEAL W W ORLDORLD

Reasons that Information technology do not always

produce positive results:

y Information quality: High quality decisions

require high quality information (Information

quality dimensions are accuracy, integrity,consistency, completeness, validity, timeliness,

accessibility)

y Management filters: Biases and bad decisions

of managers

y Organizational inertia: Strong forces within

organization that resist change



DECISION SUPPORT S YSTEMS

Supports semistructured and unstructured problems

It provides analytical models or tools for analyzing

large quantities of data

ComponentsComponents of of DSSDSS::

y DSS database: A collection of current or historicaldata from a number of applications or groups

y DSS software system: Contains the software

tools for data analysis, with models, data mining,

and other analytical tools

y DSS user interface: Graphical, flexible

interaction between users of the system and the

DSSsoftware tools



BUSINESS V ALUE OF DSS

Provides fine-grained information for

decisions that enable the firm to coordinate

both internal and external business processes

much more precisely

Helping in decisions with:

y Supply chain management

y Customer relationship managementy Pricing Decisions

y A sset Utilization



Data Visualization: Presentation of data in

graphical forms, to help users see patternsand relationships

Geographic Information Systems(GIS):Special category of DSS that display

geographically referenced data in digitized

mapsEx: GIS might be used to help retail chains to

identify new store locations, helps banks to

decide where to locateA

TMs in the city



W EB-B ASED CUSTOMER DECISION-SUPPORT

S YSTEMS (CDSS)

They support the decision making process of

an existing or potential customers

Provide online access to various databases

and information

Tools used are: Internet search engines,intelligent agents, online catalogs, Web

directories, e-mail etc.



ROUP ECISION- UPPORT YSTEM

(GDSS)

Computer-based system used to facilitate thesolution of unstructured problems by a set of

decision makers working together as a group

Tools used by GDSS are:

Hardware (conference facility, audiovisual

equipment, etc.)

Software tools (Electronic questionnaires,brainstorming tools, voting tools, etc.)

People (Participants, trained facilitator, support

staff)



O VERVIEW OF A GDSS MEETING

In a GDSS electronic meeting, each attendeehas a workstation

The workstations are networked and areconnected to the facilitator·s pc

A ll data that the attendees forward fromtheir workstations to the group are collected

and saved on the file server



O VERVIEW OF A GDSS MEETING(CONTI«)

The facilitator is able to project computerimages onto the projection screen

The facilitator controls the use of toolsduring the meeting.



BUSINESS V ALUE OF GDSS

A llows a greater number of attendees

Enable collaborative atmosphere by

guaranteeing contributor·s anonymity

Enable nonattendees to locate organized

information after the meeting

Can increase the number of ideas generated

and the quality of decisions while producing

the desired results in fewer meetings Can lead to more participative and

democratic decision making



THE ROLE OF E XECUTIVE SUPPORT S YSTEMS

IN THE FIRM

Helps the executives with semistructured and

unstructured problems

Helps to monitor organizational performance,

track activities of competitors, forecast trend,environment scanning etc.

ESS can bring together data from all parts of the

firm and enable managers to select, access, and

tailor them as needed.

It tries to avoid the problem of data

overload(same data in many parts)



BUSINESS V ALUE OF E XECUTIVE SUPPORT

S YSTEMS

A bility to analyze, compare, and highlight trends

Graphical interface enables users to review data

more quickly and with more insight, speeding

decision making

Timeliness and availability of data enables more

timely decision making, helping businesses move

toward a ´sense-and-respondµ strategy

Increases upper management span of control, better

monitoring



M ANAGEMENT OPPORTUNITIES

Decision-support systems provide

opportunities for increasing precision,

accuracy, and rapidity of decisions and

thereby contributing directly to profitability



M ANAGEMENT CHALLENGES

Building systems that can actually fulfill

Executive Information Requirements

Changing management thinking to make

better use of systems for decision support

Organizational resistance



SOLUTION GUIDELINES

The system must be flexible, easy to use,

and capable of supporting alternative

decision options

Training of the users is required

Top management should provide enoughsupport to the implementation of the

system



THANK YOU

8. enhancing decision making

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