mgt 20600: it management & applications decision support systems thursday november 17, 2005
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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.