2. INTRODUCTION
Decision making is an essence of management.
It can be said that whatever a manager does in an
organization, he/she done through decision- making.
The important factors and their effects on decision-making:
Factors Effect
More complexity in IT More alternatives
Increased organizational
complexity
High cost of wrong
decisions
Presence of Globalization, less
political stability, high
government interventions
More uncertainty
More changes, fluctuations Need for quick
decision
3. DECISION MAKING: A CONCEPT
Decision making has been taken from Latin word
‘decide’ which means to “to cut off” or “ to come to a
conclusion”.
Decision may be regarded as a ‘Choice’ or a
process of selecting one optimum alternative from
various alternatives.
Decision Final product Decision
making
process
4. SIMON’S MODEL OF DECISION MAKING
Intelligence: Decision-maker scans the environment
and identifies the problem or opportunity.
Decision making process involves
Problem searching Problem formulation
(Expected & Reality) (Solving of wrong problem)
Design: Decision maker has to explore various
alternatives creative activity
Choice: Methods for choosing alternatives
6. TYPES OF DECISIONS
Purpose of Decision- making
Strategic planning decision(to achieve objectives)
Management control decision(use of resources)
Operational control decision (day-to-day problems)
7. LEVEL OF PROGRAMMABILITY
o Programmed/Structured decision(well defined &
specified procedures & decision rule).
o Unprogrammed/unstructured decision(one-time
decision in case of crisis)
8. KNOWLEDGE OF OUTCOMES
Decision under certainty
Decision under risk
Decision under uncertainty
9. DECISION SUPPORT TECHNIQUES
Simulation- mathematical model of the situation is
created operated under different assumptions &
different conditions.
Optimization- optimization technique used to search
for optimal values of decision variables.
OLAP and Data mining
Expert systems- Expert view
Neural networks-
Fuzzy logic
Case-Based reasoning
Intelligent agents
10. DECISION MAKING & ROLE OF MIS
MIS plays its role in all three stages:
Intelligence Stage:
Provides internal(functional areas) as well as
external(Newspapers,TV,etc).
Design Stage:
The ability to make ad hoc queries for information in an
organization databases.
The ability to reach a decision in an interactive process.
Choice Stage:
Course of action is selected & feedback is collected on
the implemented decision.
Provides summarized & organized information to the
decision-maker.
11. DECISION SUPPORT SYSTEM
WHY ?
Fast computation- performs a large no. of computations
quickly at low cost.
Enhanced productivity- productivity/overall performance of
the support staff.
Data transmission-search, store & transmit data from
different locations quickly & economically.
Better decisions
Competitive edge-over competitors by changing their
operations quickly.
WHAT ?
A DSS is a specialized kind of information system, which is an
interactive system that supports in the decision-making
process of a manager in an organization, especially in semi-
structured & unstructured situations.
12. COMPONENTS OF DSS
Database- master files data from internal & from
external sources.
Model base-Libraries of models to manipulate &
analyze the data in the desired ways.
Dialogue box: User Interface
13. BUSINESS INTELLIGENCE
The term Business Intelligence (BI) refers to
technologies, applications and practices for the
collection, integration, analysis, and presentation of
business information.
The purpose of Business Intelligence is to support
better business decision making. Essentially,
Business Intelligence systems are data-driven
Decision Support Systems (DSS).
14. BI APPLICATIONS IN BUSINESS
Retailing
Customer relationship management
Credit card management
Insurance
Telecommunications
Telemarketing
Human resource management
15. KNOWLEDGE MANAGEMENT SYSTEM
KMS may be defined as a strategy, a framework
combination of activities, or a system that is
designed to help an organization create,
capture,analyze,apply and reuse knowledge to
improve its performance & to achieve competitive
advantage.
Knowledge are of two types:
Explicit – Transferable & tangible
Tactic- Untransferable – in the minds of people
16.
17. KMS STRATEGIES
What knowledge to share?(Quality knowledge)
With whom to share knowledge?(internal &
external audience)
How will knowledge be shared?
(face to face interaction)
Why will knowledge be shared? (for supporting
business)