Subject: Management Information Systems

1
Develop the Information Systems to reduce information overload
within your organization
☞ Case study
☞ Broadly speaking, employees spend on average 2.5 hours per
day looking for the information they need to do their jobs.

☞ Employees spend
on average one-
third of their time
trying to find the
information they
need to complete
their tasks

Trường Đại học Kinh tế - Tài chính 2

TP Hồ Chí Minh
Specify the need of organization

☞ Data overload is a common challenge for information systems,

especially as the volume and variety of data sources increase.
☞ Information systems are designed to integrate and streamline business
processes across different functions, such as finance, sales, inventory,
production, and human resources.
☞ However, if the data is not properly managed, it can lead to inefficiencies,
errors, conflicts, and missed opportunities.
☞ How can you manage data overload in an information system and make the
most of your data assets?

Trường Đại học Kinh tế - Tài chính 3

TP Hồ Chí Minh
Overview of Decision Support Systems (DSS)

☞ A DSS is an organized collection of people, procedures,

software, databases, and devices used to support problem-
specific decision making and problem solving
☞ The focus of a DSS is on decision-making effectiveness when faced
with unstructured or semistructured business problems

Trường Đại học Kinh tế - Tài chính 4

TP Hồ Chí Minh
Characteristics of Decision Support Systems

☞ Handle large amounts of data from different sources

☞ Provide report and presentation flexibility
☞ Offer both textual and graphical orientation
☞ Support drill-down analysis

Trường Đại học Kinh tế - Tài chính 5

TP Hồ Chí Minh
Suggest to intergrade DSS to Information System

☞ E.g. A decision support system for John Day Dam

Trường Đại học Kinh tế - Tài chính 6

TP Hồ Chí Minh
Enhancing Decision Making
for the Digital Firm
 OBJECTIVES (Continued)

• Assess how systems that support decision making can

provide value for the firm

• Identify the challenges posed by decision-support

systems, group decision-support systems, and
executive support systems and management solutions
 DaimlerChrysler Bremen Plant Case

● Challenge: Coordinate the daily arrival of 70

rail cars and 500 trucks to ensure just-in-time
delivery of car parts
● Solutions: Adopt Transportation Efficiency
Support System (TESYS) to synchronize the
deliveries with available loading docks and
production schedules
● Develop new business processes for
coordinating logistics with production needs
● Illustrates the how IT enhances decision
making and increases business process
efficiency in a manufacturing environment
 DECISION MAKING AND DECISION-SUPPORT SYSTEMS

Business Intelligence and Decision Support

Business intelligence enables firms to:

• Amass information

• Develop knowledge about operations

• Change decision-making behavior to achieve

profitability and other business goals
DECISION MAKING AND DECISION-SUPPORT SYSTEMS

Systems and Technologies for Business Intelligence

Figure 13-1
 DECISION MAKING AND DECISION-SUPPORT SYSTEMS

Business Decision Making and the Decision-Making Process

Decision-Making Levels:

• Senior management

• Middle management and project teams

• Operational management and project teams

• Individual employees
 DECISION MAKING AND DECISION-SUPPORT SYSTEMS

Information Requirements of Key Decision-Making Groups in a Firm

Figure 13-2
 DECISION MAKING AND DECISION-SUPPORT SYSTEMS

Types of Decisions
Unstructured decisions:

• Novel, non-routine decisions requiring judgment and

insights

• Examples: Approve capital budget; decide corporate

objectives
 DECISION MAKING AND DECISION-SUPPORT SYSTEMS

Types of Decisions (Continued)

Structured decisions:
• Routine decisions with definite procedures

• Examples: Restock inventory; determine special offers

to customers

Semistructured decisions:
• Only part of decision has clear-cut answers provided
by accepted procedures

• Examples: Allocate resources to managers; develop a

marketing plan
 DECISION MAKING AND DECISION-SUPPORT SYSTEMS

Systems for Decision Support

There are four kinds of systems that support the different levels and types of
decisions:
• Management Information Systems (MIS)

• Decision-Support Systems (DSS)

• Executive Support Systems (ESS)

• Group Decision-Support Systems (GDSS)

DECISION MAKING AND DECISION-SUPPORT SYSTEMS

Stages in Decision Making

Figure 13-3
 DECISION MAKING AND DECISION-SUPPORT SYSTEMS

Decision Making in the Real World

In the real world, investments in decision-support
systems do not always work because of

• Information quality: Accuracy, integrity, consistency,

completeness, validity, timeliness, accessibility
 DECISION MAKING AND DECISION-SUPPORT SYSTEMS

Decision Making in the Real World

(Continued)
• Management filters: Biases and bad decisions of
managers

• Organizational inertia: Strong forces within

organization that resist change
 DECISION MAKING AND DECISION-SUPPORT SYSTEMS

Trends in Decision Support and Business

Intelligence
The rise of client/server computing, the Internet, and Web
technologies made a major impact on systems that support
decision making.
Six Major Trends:

• Detailed enterprise-wide data

• Broadening decision rights and responsibilities

 DECISION MAKING AND DECISION-SUPPORT SYSTEMS

Trends in Decision Support and Business

Intelligence (Continued)

• Intranets and portals

• Personalization and customization of information

• Extranets and collaborative commerce

• Team support tools

 SYSTEMS FOR DECISION SUPPORT

The Difference between MIS and DSS

Management Information Systems:

• 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

Decision Support 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

Types of Decision-Support Systems

Model-driven DSS:

• Primarily stand-alone systems

• Use a strong theory or model to perform “what-if” and

similar analyses
 SYSTEMS FOR DECISION SUPPORT

Data-driven DSS:

• 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

Components of DSS
• 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

Model: An abstract representation that illustrates the

components or relationships of a phenomenon
• Statistical models

• Optimization models

• Forecasting models

• Sensitivity analysis (“what-if” models)

 SYSTEMS FOR DECISION SUPPORT

Overview of a Decision-Support System

Figure 13-4
SYSTEMS FOR DECISION SUPPORT

Sensitivity Analysis

Figure 13-5
 SYSTEMS FOR DECISION SUPPORT

Business Value of DSS

• Providing fine-grained information for decisions that

enable the firm to coordinate both internal and external
business processes much more precisely

• Helping with decisions in

• Supply chain management

• Customer relationship management

 SYSTEMS FOR DECISION SUPPORT

Business Value of DSS (Continued)

• Pricing Decisions

• Asset Utilization

• Data Visualization: Presentation of data in graphical

forms, to help users see patterns and relationships

• Geographic Information Systems (GIS): Special category

of DSS that display geographically referenced data in
digitized maps
 SYSTEMS FOR DECISION SUPPORT

A DSS for Customer Analysis and Segmentation

Figure 13-6
 SYSTEMS FOR DECISION SUPPORT

Web-Based Customer Decision-Support

Systems

• DSS based on the Web and the Internet can support

decision making by providing online access to various
databases and information pools along with software for
data analysis

• Some of these DSS are targeted toward management,

but many have been developed to attract customers.
 SYSTEMS FOR DECISION SUPPORT

Web-based Customer Decision-Support Systems

(Continued)

• Customer decision making has become increasingly

information intensive, with Internet search engines,
intelligent agents, online catalogs, Web directories, e-
mail, and other tools used to help make purchasing
decisions.

• Customer decision-support systems (CDSS) support

the decision-making process of an existing or potential
customer.
 MANAGEMENT OPPORTUNITIES, CHALLENGES AND DECISIONS

Management Opportunities:

• Decision-support systems provide opportunities for

increasing precision, accuracy, and rapidity of
decisions and thereby contributing directly to
profitability
 MANAGEMENT OPPORTUNITIES, CHALLENGES AND DECISIONS

Management Challenges:

• Building systems that can actually fulfill Executive

Information Requirements

• Changing management thinking to make better use

of systems for decision support

• Organizational resistance
 MANAGEMENT OPPORTUNITIES, CHALLENGES AND DECISIONS

Solution Guidelines:

Flexible Design and Development:

• Users must work with IS specialists to identify a

problem and a specific set of capabilities that will help
them arrive at decisions about the problem.

• The system must be flexible, easy to use, and capable

of supporting alternative decision options.
 MANAGEMENT OPPORTUNITIES, CHALLENGES AND DECISIONS

Solution Guidelines (Continued)

Training and Management Support:

• User training, involvement, and experience; top

management support; and length of use are the
most important factors in the success of
management support systems.
Trường Đại học Kinh tế - Tài chính
39
TP Hồ Chí Minh