Principles of Information Systems - Chapter 10

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Principles of Information Systems Sixth Edition, Written by Ralph Star, George Reynolds

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  • Information is an organization’s core asset. Transaction processing systems capture a large amount of data. Management information systems and decision support systems process and refine that data to provide vital information to decision makers and problem solvers. As organizations reengineer business processes, information systems designed for decision-making are no longer used solely by managers. To empower employees to make their own decisions and solve their own problems, organizations must provide employees at all levels of the enterprise with timely information provided by these systems. Chapter 10 discusses information systems used for decision-making and problem solving in business, including management information systems and decision support systems. After studying this chapter, you should be able to address the objectives on the next 3 slides.
  • Principles of Information Systems - Chapter 10

    1. 1. Information and Decision Support Systems Chapter 10
    2. 2. Principles and Learning Objectives <ul><li>Good decision-making and problem-solving skills are the key to developing effective information and decision support systems. </li></ul><ul><ul><li>Define the stages of decision making. </li></ul></ul><ul><ul><li>Discuss the importance of implementation and monitoring in problem solving. </li></ul></ul>
    3. 3. Principles and Learning Objectives <ul><li>The management information system (MIS) must provide the right information to the right person in the right fashion at the right time. </li></ul><ul><ul><li>Define the term MIS and clearly distinguish the difference between a TPS and an MIS. </li></ul></ul><ul><ul><li>Discuss information systems in the functional areas of business organizations. </li></ul></ul>
    4. 4. Principles and Learning Objectives <ul><li>Decision support systems (DSSs) are used when the problems are more unstructured. </li></ul><ul><ul><li>List and discuss important characteristics of DSSs that give them the potential to be effective management support tools. </li></ul></ul><ul><ul><li>Identify and describe the basic components of a DSS. </li></ul></ul>
    5. 5. Principles and Learning Objectives <ul><li>Specialized support systems, such as group decision support systems (GDSSs) and executive support systems (ESSs), use the overall approach of a DSS in situations such as group and executive decision making. </li></ul><ul><ul><li>State the goals of a GDSS and identify the characteristics that distinguish it from a DSS. </li></ul></ul><ul><ul><li>Identify the fundamental uses of an ESS and list the characteristics of such a system. </li></ul></ul>
    6. 6. Decision Making and Problem Solving
    7. 7. Decision Making as a Component of Problem Solving
    8. 8. Programmed versus Nonprogrammed Decisions <ul><li>Programmed decisions </li></ul><ul><ul><li>Structured situations with well defined relationships </li></ul></ul><ul><ul><li>Quantifiable </li></ul></ul><ul><ul><li>Management information system </li></ul></ul><ul><ul><li>Easy to computerize </li></ul></ul><ul><li>Nonprogrammed decisions </li></ul><ul><ul><li>Rules and relationships not defined </li></ul></ul><ul><ul><li>Problem is not routine </li></ul></ul><ul><ul><li>Not easily quantifiable </li></ul></ul>
    9. 9. Problem Solving Approaches <ul><li>Optimization: find the best solution </li></ul><ul><li>Satisficing: find a good solution </li></ul><ul><li>Heuristics: rules of thumb </li></ul>
    10. 10. Optimization, Satisficing, and Heuristic Approaches
    11. 11. An Overview of Management Information Systems
    12. 12. Inputs to an MIS
    13. 13. Outputs of an MIS
    14. 14. Outputs of an MIS
    15. 15. Developing Effective Reports
    16. 16. Characteristics of an MIS <ul><li>Fixed format, standard reports </li></ul><ul><li>Hard-copy or soft-copy reports </li></ul><ul><li>Uses internal data </li></ul><ul><li>User-developed reports </li></ul><ul><li>Users must request formal reports from IS department </li></ul>
    17. 17. Functional Aspects of the MIS
    18. 18. Functional Aspects of an MIS
    19. 19. Financial MIS
    20. 20. Manufacturing MIS <ul><li>Design engineering </li></ul><ul><li>Process control </li></ul><ul><ul><li>Computer-assisted manufacturing (CAM) </li></ul></ul><ul><ul><li>Computer-integrated manufacturing (CIM) </li></ul></ul><ul><ul><li>Flexible manufacturing system </li></ul></ul><ul><li>Quality control and testing </li></ul>
    21. 21. Overview of a Manufacturing MIS
    22. 22. Master Production Scheduling and Inventory Control
    23. 23. Quality Control and Testing
    24. 24. Marketing MIS
    25. 25. Product Pricing
    26. 26. Product Pricing
    27. 27. Human Resource MIS
    28. 28. Other MIS <ul><li>Accounting management information systems </li></ul><ul><li>Geographic information systems (GIS) </li></ul>
    29. 29. Characteristics of Decision Support Systems <ul><li>Handle large amounts of data from various sources </li></ul><ul><li>Provide report and presentation flexibility </li></ul><ul><li>Offer both textual and graphical orientation </li></ul><ul><li>Support drill down analysis </li></ul>
    30. 30. An Overview of Decision Support Systems
    31. 31. Characteristics of a DSS <ul><li>Perform complex, sophisticated analysis </li></ul><ul><li>Optimization, satisficing, heuristics </li></ul><ul><ul><li>Simulation </li></ul></ul><ul><ul><li>What-if analysis </li></ul></ul><ul><ul><li>Goal-seeking analysis </li></ul></ul>
    32. 32. Characteristics of a DSS
    33. 33. Capabilities of a DSS <ul><li>Support all problem-solving phases </li></ul><ul><li>Support different decision frequencies </li></ul><ul><li>Support different problem structures </li></ul><ul><li>Support various decision-making levels </li></ul>
    34. 34. Selected DSS Applications
    35. 35. Support for Various Decision-Making Levels
    36. 36. Comparison of DSSs and MISs
    37. 37. Comparison of DSSs and MISs
    38. 38. Components of a DSS
    39. 39. Components of a DSS
    40. 40. The Model Base <ul><li>Financial models </li></ul><ul><ul><li>Cash flow </li></ul></ul><ul><ul><li>Internal rate of return </li></ul></ul><ul><li>Statistical analysis models </li></ul><ul><ul><li>Summary statistics </li></ul></ul><ul><ul><li>Trend projections </li></ul></ul><ul><ul><li>Hypothesis testing </li></ul></ul><ul><li>Graphical models </li></ul><ul><li>Project management models </li></ul>
    41. 41. The Model Base
    42. 42. Data-driven versus Model-driven DSS <ul><li>Data-driven DSS - primarily performs qualitative analysis based on the company’s databases </li></ul><ul><li>Model-driven DSS - primarily performs mathematical or quantitative analysis </li></ul>
    43. 43. Group Decision Support Systems
    44. 44. Group Decision Support System
    45. 45. Characteristics of a GDSS <ul><li>Special design </li></ul><ul><li>Ease of use </li></ul><ul><li>Flexibility </li></ul><ul><li>Decision-making support </li></ul><ul><li>Anonymous input </li></ul><ul><li>Reduction of negative group behavior </li></ul><ul><li>Parallel communication </li></ul><ul><li>Automated record keeping </li></ul>
    46. 46. GDSS Alternatives
    47. 47. The Decision Room
    48. 48. Executive Support Systems
    49. 49. Executive Support Systems
    50. 50. Executive Support Systems (ESS) in Perspective <ul><li>Tailored to individual executives </li></ul><ul><li>Easy to use </li></ul><ul><li>Drill down capabilities </li></ul><ul><li>Support need for external data </li></ul><ul><li>Can help when uncertainty is high </li></ul><ul><li>Future-oriented </li></ul><ul><li>Linked to value-added processes </li></ul>
    51. 51. Capabilities of an ESS <ul><li>Support for defining an overall vision </li></ul><ul><li>Support for strategic planning </li></ul><ul><li>Support for strategic organizing & staffing </li></ul><ul><li>Support for strategic control </li></ul><ul><li>Support for crisis management </li></ul>
    52. 52. Summary <ul><li>Management information system - an integrated collection of people, procedures, databases, and devices that provide managers and decision-makers with information to help achieve organizational goals </li></ul><ul><li>Decision-making phase: includes intelligence, design, and choice </li></ul><ul><li>Problem solving : also includes implementation and monitoring </li></ul><ul><li>Decision approaches: optimization, satisficing, and heuristic </li></ul>
    53. 53. Summary <ul><li>Decision support system (DSS) - an organized collection of people, procedures, software, databases, and devices working to support managerial decision making </li></ul><ul><li>Group decision support system (GDSS) - also called a computerized collaborative work system, consists of most of the elements in a DSS, plus software needed to provide effective support in group decision-making settings </li></ul><ul><li>Executive support systems (ESSs) - specialized decision support systems designed to meet the needs of senior management </li></ul>

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