Information Systems & Enhancing Decision Making for the Digital Firm Rashedul Hasan.
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Transcript of Information Systems & Enhancing Decision Making for the Digital Firm Rashedul Hasan.
Information Information Systems & Systems & Enhancing Enhancing
Decision Making for the Decision Making for the Digital FirmDigital Firm
Rashedul Hasan
Business Decision Making and the Decision-Making Process Business Decision Making and the Decision-Making Process
• Senior management
• Middle management and project teams
• Operational management and project teams
• Individual employees
Decision-Making Levels:
DECISION MAKING AND DECISION-SUPPORT SYSTEMS
Management Information SystemsManagement Information SystemsChapter 13 Enhancing Decision Making for the Digital Firm Chapter 13 Enhancing Decision Making for the Digital Firm
Management Information SystemsManagement Information SystemsChapter 2 Information Systems in the EnterpriseChapter 2 Information Systems in the Enterprise
MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS
Types of Information Systems
Figure 2-1
Management Information SystemsManagement Information SystemsChapter 2 Information Systems in the EnterpriseChapter 2 Information Systems in the Enterprise
MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS
Different Kinds of Systems
1. Operational-level systems: support operational managers, keeping track of the elementary activities and transactions
2. Management-level systems: serve the monitoring, controlling, decision-making, and administrative activities
3. Strategic-level systems: help senior management tackle and address strategic issues
Three main categories of information systems servedifferent organizational levels:
DECISION MAKING AND DECISION-SUPPORT SYSTEMS
Information Requirements of Key Decision-Making Groups in a Firm
Figure 13-2
Management Information SystemsManagement Information SystemsChapter 13 Enhancing Decision Making for the Digital Firm Chapter 13 Enhancing Decision Making for the Digital Firm
Unstructured decisions:
Types of Decisions
DECISION MAKING AND DECISION-SUPPORT SYSTEMS
Management Information SystemsManagement Information SystemsChapter 13 Enhancing Decision Making for the Digital Firm Chapter 13 Enhancing Decision Making for the Digital Firm
• Novel, non-routine decisions requiring judgment and insights
• Examples: Approve capital budget; decide corporate objectives
Structured decisions:
DECISION MAKING AND DECISION-SUPPORT SYSTEMS
Management Information SystemsManagement Information SystemsChapter 13 Enhancing Decision Making for the Digital Firm Chapter 13 Enhancing Decision Making for the Digital Firm
• Routine decisions with definite procedures
• Examples: Restock inventory; determine special offers to customers
Semi-structured decisions:
• Only part of decision has clear-cut answers provided by accepted procedures
• Examples: Allocate resources to managers; develop a marketing plan
Types of Decisions (Continued)
Management Information SystemsManagement Information SystemsChapter 2 Information Systems in the EnterpriseChapter 2 Information Systems in the Enterprise
MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS
Major Types of Systems
• Transaction Processing Systems (TPS)
• Management Information Systems (MIS)
• Decision-Support Systems (DSS)
• Executive Support Systems (ESS)
Management Information SystemsManagement Information SystemsChapter 2 Information Systems in the EnterpriseChapter 2 Information Systems in the Enterprise
MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS
The Four Major Types of Information Systems
Figure 2-2
Stages in Decision Making
Figure 13-3
Management Information SystemsManagement Information SystemsChapter 13 Enhancing Decision Making for the Digital Firm Chapter 13 Enhancing Decision Making for the Digital Firm
DECISION MAKING AND DECISION-SUPPORT SYSTEMS
Management Information SystemsManagement Information SystemsChapter 2 Information Systems in the EnterpriseChapter 2 Information Systems in the Enterprise
MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS
Transaction Processing Systems (TPS)
• Basic business systems that serve the operational level
• A computerized system that performs and records the daily routine transactions necessary to the conduct of the business
Management Information SystemsManagement Information SystemsChapter 2 Information Systems in the EnterpriseChapter 2 Information Systems in the Enterprise
MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS
A Symbolic Representation for a Payroll TPS
Figure 2-3
Management Information SystemsManagement Information SystemsChapter 2 Information Systems in the EnterpriseChapter 2 Information Systems in the Enterprise
MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS
Typical Applications of TPS
Figure 2-4
Management Information SystemsManagement Information SystemsChapter 2 Information Systems in the EnterpriseChapter 2 Information Systems in the Enterprise
MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS
Management Information Systems (MIS)
Management level
• Inputs: High volume transaction level data
• Processing: Simple models
• Outputs: Summary reports
• Users: Middle managers
Example: Annual budgeting
Management Information SystemsManagement Information SystemsChapter 2 Information Systems in the EnterpriseChapter 2 Information Systems in the Enterprise
MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS
Management Information Systems (MIS) (continued)
Figure 2-5
Management Information SystemsManagement Information SystemsChapter 2 Information Systems in the EnterpriseChapter 2 Information Systems in the Enterprise
MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS
Management Information Systems (MIS) (continued)
Figure 2-6
A sample MIS report
Management Information SystemsManagement Information SystemsChapter 2 Information Systems in the EnterpriseChapter 2 Information Systems in the Enterprise
MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS
Decision-Support Systems (DSS)
Management level
• Inputs: Transaction level data
• Processing: Interactive
• Outputs: Decision analysis
• Users: Professionals, staff
Example: Contract cost analysis
Management Information SystemsManagement Information SystemsChapter 2 Information Systems in the EnterpriseChapter 2 Information Systems in the Enterprise
MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS
Decision-Support Systems (DSS) (Continued)Voyage-estimating decision-support system
Figure 2-7
Management Information SystemsManagement Information SystemsChapter 2 Information Systems in the EnterpriseChapter 2 Information Systems in the Enterprise
MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS
EXECUTIVE SUPPORT SYSTEMS (ESS):
• Inputs: Aggregate data
• Processing: Interactive
• Outputs: Projections
• Users: Senior managers
Example: 5 year operating plan
Management Information SystemsManagement Information SystemsChapter 2 Information Systems in the EnterpriseChapter 2 Information Systems in the Enterprise
MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS
Model of a Typical Executive Support System
Figure 2-8
Management Information SystemsManagement Information SystemsChapter 2 Information Systems in the EnterpriseChapter 2 Information Systems in the Enterprise
MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS
EXECUTIVE SUPPORT SYSTEMS (ESS) (Continued)
• Top Level Management
• Designed to the individual senior manager
• Ties CEO to all levels
• Very expensive to keep up
• Extensive support staff
Management Information SystemsManagement Information SystemsChapter 2 Information Systems in the EnterpriseChapter 2 Information Systems in the Enterprise
MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS
Relationship of Systems to One Another Interrelationships among systems
Figure 2-9
Management Information SystemsManagement Information SystemsChapter 2 Information Systems in the EnterpriseChapter 2 Information Systems in the Enterprise
MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS
Relationship of Systems to One Another
In contemporary digital firms, the different types of systems are closely linked to one another. This is the ideal. In traditional firms these systems tend to be isolated from one another, and information does not flow seamlessly from one end of the organization to the other. Efficiency and business value tend to suffer greatly in these traditional firms
• Primarily address structured problems
• Provides typically fixed, scheduled reports based
on routine flows of data and assists in the general
control of the business
SYSTEMS FOR DECISION SUPPORT
The Difference between MIS and DSS The Difference between MIS and DSS
Management Information SystemsManagement Information SystemsChapter 13 Enhancing Decision Making for the Digital Firm Chapter 13 Enhancing Decision Making for the Digital Firm
Management Information Systems:
• Support semistructured and unstructured problems
• Greater emphasis on models, assumptions, ad-hoc queries, display graphics
• Emphasizes change, flexibility, and a rapid response
SYSTEMS FOR DECISION SUPPORT
Management Information SystemsManagement Information SystemsChapter 13 Enhancing Decision Making for the Digital Firm Chapter 13 Enhancing Decision Making for the Digital Firm
Decision Support Systems:
Model-driven DSS:
SYSTEMS FOR DECISION SUPPORT
Types of Decision-Support Systems Types of Decision-Support Systems
Management Information SystemsManagement Information SystemsChapter 13 Enhancing Decision Making for the Digital Firm Chapter 13 Enhancing Decision Making for the Digital Firm
• Primarily stand-alone systems
• Use a strong theory or model to perform “what-if” and similar analyses
• DSS database: A collection of current or historical data from a number of applications or groups
• DSS software system: Contains the software tools for data analysis, with models, data mining, and other analytical tools
• DSS user interface: Graphical, flexible interaction between users of the system and the DSS software tools
SYSTEMS FOR DECISION SUPPORT
Components of DSS Components of DSS
Management Information SystemsManagement Information SystemsChapter 13 Enhancing Decision Making for the Digital Firm Chapter 13 Enhancing Decision Making for the Digital Firm
Data-driven DSS:
SYSTEMS FOR DECISION SUPPORT
Management Information SystemsManagement Information SystemsChapter 13 Enhancing Decision Making for the Digital Firm Chapter 13 Enhancing Decision Making for the Digital Firm
• Integrated with large pools of data in major enterprise systems and Web sites
• Support decision making by enabling user to extract useful information
• Data mining: Can obtain types of information such as associations, sequences, classifications, clusters, and forecasts
SYSTEMS FOR DECISION SUPPORT
Management Information SystemsManagement Information SystemsChapter 13 Enhancing Decision Making for the Digital Firm Chapter 13 Enhancing Decision Making for the Digital Firm
• Statistical models
• Optimization models
• Forecasting models
• Sensitivity analysis (“what-if” models)
Model: An abstract representation that illustrates the components or relationships of a phenomenon
Overview of a Decision-Support System
Management Information SystemsManagement Information SystemsChapter 13 Enhancing Decision Making for the Digital Firm Chapter 13 Enhancing Decision Making for the Digital Firm
Figure 13-4
SYSTEMS FOR DECISION SUPPORT
Sensitivity Analysis
Management Information SystemsManagement Information SystemsChapter 13 Enhancing Decision Making for the Digital Firm Chapter 13 Enhancing Decision Making for the Digital Firm
SYSTEMS FOR DECISION SUPPORT
Figure 13-5