13.1 © 2002 by Prentice Hall c h a p t e r 13 ENHANCING MANAGEMENT DECISION MAKING

13.13.11 © 2002 by Prentice Hall

c h a p t e r

1313 ENHANCING ENHANCING

MANAGEMENT MANAGEMENT DECISION DECISION MAKINGMAKING


LEARNING OBJECTIVESLEARNING OBJECTIVES

• DIFFERENTIATE DECISION-DIFFERENTIATE DECISION-SUPPORT SYSTEMS SUPPORT SYSTEMS (DSS)(DSS) FROM FROM GROUP DECISION-SUPPORT GROUP DECISION-SUPPORT SYSTEMS SYSTEMS (GDSS)(GDSS)

• DESCRIBE COMPONENTS OF DSS & DESCRIBE COMPONENTS OF DSS & GDSSGDSS

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LEARNING OBJECTIVESLEARNING OBJECTIVES

• DEMONSTRATE HOW DSS & GDSS DEMONSTRATE HOW DSS & GDSS ENHANCE DECISION-MAKINGENHANCE DECISION-MAKING

• DESCRIBE CAPABILITIES OF DESCRIBE CAPABILITIES OF EXECUTIVE SUPPORT SYSTEMS EXECUTIVE SUPPORT SYSTEMS (ESS)(ESS)

• ASSESS BENEFITS OF ESSASSESS BENEFITS OF ESS

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MANAGEMENT CHALLENGESMANAGEMENT CHALLENGES

• DECISION-SUPPORT SYSTEMSDECISION-SUPPORT SYSTEMS

• GROUP DECISION-SUPPORT GROUP DECISION-SUPPORT SYSTEMSSYSTEMS

• EXECUTIVE SUPPORT SYSTEMSEXECUTIVE SUPPORT SYSTEMS

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DECISION SUPPORT DECISION SUPPORT SYSTEMS (DSS)SYSTEMS (DSS)

MANAGEMENT LEVEL COMPUTER MANAGEMENT LEVEL COMPUTER SYSTEM SYSTEM COMBINES DATA, COMBINES DATA, MODELS, USER - FRIENDLY MODELS, USER - FRIENDLY

SOFTWARE FOR SEMISTRUCTURED SOFTWARE FOR SEMISTRUCTURED & UNSTRUCTURED DECISION & UNSTRUCTURED DECISION

MAKINGMAKING**


• MODEL DRIVEN DSS:MODEL DRIVEN DSS: Uses models Uses models for what-if and other analysisfor what-if and other analysis

• DATA-DRIVEN DSS:DATA-DRIVEN DSS: Allows Allows extraction, analysis of information extraction, analysis of information from databasesfrom databases

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DECISION SUPPORT DECISION SUPPORT SYSTEMSYSTEM


TPSEXTERNAL

DATADSS DATA

BASE

DSS SOFTWARE SYSTEMMODELS

OLAP TOOLS

DATAMINING TOOLS

USERINTERFACE

USER



• TPS:TPS: Transaction processing systemTransaction processing system

• MODEL:MODEL: Representation of a problemRepresentation of a problem

• OLAP:OLAP: On-line analytical processingOn-line analytical processing

• USER INTERFACE:USER INTERFACE: How user enters How user enters problem & receives answersproblem & receives answers

• DSS DATABASE:DSS DATABASE: Current data from Current data from applications or groupsapplications or groups

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• DATA MINING:DATA MINING: Technology for finding Technology for finding relationships in large data bases for relationships in large data bases for predictionprediction

• DSS SOFTWARE SYSTEM:DSS SOFTWARE SYSTEM: Tools for data Tools for data analysisanalysis

• SENSITIVITY ANALYSIS:SENSITIVITY ANALYSIS: “What-if” “What-if” questions about changes in model factorsquestions about changes in model factors

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• SUPPLY CHAIN MANAGEMENTSUPPLY CHAIN MANAGEMENT

• CUSTOMER RELATIONSHIP CUSTOMER RELATIONSHIP MANAGEMENTMANAGEMENT

• SIMULATING BUSINESS SIMULATING BUSINESS SCENARIOSSCENARIOS

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APPLICATIONS:APPLICATIONS:


• GEOGRAPHIC INFORMATION SYSTEM GEOGRAPHIC INFORMATION SYSTEM (GIS):(GIS): Software to display digital maps Software to display digital maps

• WEB-BASED DSS:WEB-BASED DSS: Available on Internet Available on Internet for decisions, information, softwarefor decisions, information, software

• CUSTOMER DSS (CDSS):CUSTOMER DSS (CDSS): System System supports buying decisions of customerssupports buying decisions of customers

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• GENERAL ACCIDENT INSURANCE:GENERAL ACCIDENT INSURANCE: Customer buying patterns, fraud Customer buying patterns, fraud detectiondetection

• BANK OF AMERICA:BANK OF AMERICA: Customer Customer profilesprofiles

• FRITO-LAY:FRITO-LAY: Price, advertising, Price, advertising, promotion selectionpromotion selection

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EXAMPLES:EXAMPLES:


• BURLINGTON COAT FACTORY:BURLINGTON COAT FACTORY: Store location, inventory mixStore location, inventory mix

• KEYCORP:KEYCORP: Targeting direct mail Targeting direct mail marketing customersmarketing customers

• NATIONAL GYPSUM:NATIONAL GYPSUM: Corporate Corporate planning & forecastingplanning & forecasting

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• SOUTHERN RAILWAY:SOUTHERN RAILWAY: Train Train dispatching and routingdispatching and routing

• TEXAS OIL & GAS:TEXAS OIL & GAS: Evaluating drilling Evaluating drilling sitessites

• UNITED AIRLINES:UNITED AIRLINES: Flight scheduling, Flight scheduling, passenger demand forecastingpassenger demand forecasting

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GROUP DECISION-SUPPORT SYSTEM GROUP DECISION-SUPPORT SYSTEM (GDSS)(GDSS)

INTERACTIVE COMPUTER-BASED INTERACTIVE COMPUTER-BASED SYSTEM FACILITATES SOLUTION SYSTEM FACILITATES SOLUTION OF UNSTRUCTURED PROBLEMS OF UNSTRUCTURED PROBLEMS BY DECISION MAKERS WORKING BY DECISION MAKERS WORKING

AS GROUPAS GROUP

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ALLOWS:ALLOWS: Improved pre-planning Improved pre-planning• Increased participationIncreased participation• Open, collaborative atmosphereOpen, collaborative atmosphere• Idea generation free of criticismIdea generation free of criticism• Evaluation objectivityEvaluation objectivity• Idea organization & evaluationIdea organization & evaluation

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GDSS ENHANCED DECISION GDSS ENHANCED DECISION MAKINGMAKING


ALLOWS:ALLOWS: Setting priorities & decision Setting priorities & decision makingmaking

• Documentation of meetingsDocumentation of meetings• Access to external informationAccess to external information• Preservation of organizational memoryPreservation of organizational memory

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GDSS ENHANCED GDSS ENHANCED DECISION MAKINGDECISION MAKING


TOOLS OF GDSSTOOLS OF GDSS

• ELECTRONIC QUESTIONNAIRESELECTRONIC QUESTIONNAIRES

• ELECTRONIC BRAINSTORMINGELECTRONIC BRAINSTORMING

• IDEA ORGANIZERSIDEA ORGANIZERS

• QUESTIONNAIRE TOOLSQUESTIONNAIRE TOOLS

• TOOLS FOR VOTING,TOOLS FOR VOTING, SETTING PRIORITIESSETTING PRIORITIES

**


TOOLS OF GDSSTOOLS OF GDSS

• STAKEHOLDER IDENTIFICATION & STAKEHOLDER IDENTIFICATION & ANALYSIS TOOLSANALYSIS TOOLS

• POLICY FORMATION TOOLSPOLICY FORMATION TOOLS

• GROUP DICTIONARIESGROUP DICTIONARIES

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ELECTRONIC MEETING SYSTEM ELECTRONIC MEETING SYSTEM (EMS)(EMS)

COLLABORATIVE GDSS:COLLABORATIVE GDSS: Uses Uses information technology to make information technology to make group meetings more productive group meetings more productive facilitates communication decision facilitates communication decision makingmaking

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The Research Model for Electronic The Research Model for Electronic MeetingsMeetings

GROUPGROUP• Individual Individual MemberMember Characteristics Characteristics• Group SizeGroup Size• HistoryHistory• Formal/InformalFormal/Informal• Ongoing/One-Ongoing/One-TimeTime• ExperienceExperience• CohesivenessCohesiveness• etc.etc.

TASKTASK

• Type of Task (e.g.,Type of Task (e.g., Judgmental) Judgmental)• Rational/PoliticalRational/Political• ComplexityComplexity• etc.etc.

CONTEXTCONTEXT

• Incentives andIncentives and Reward Systems Reward Systems

• Organization Organization CultureCulture

• EnvironmentEnvironment

• etc.etc.EMSEMS

• Presence/Absence Presence/Absence ofof EMS Tools EMS Tools

• Methods DesignMethods Design

• Environmental Environmental DesignDesign

• etc.etc.

PROCESSPROCESS

• Degree of StructureDegree of Structure

• Number of SessionsNumber of Sessions

• AnonymityAnonymity

• LeadershipLeadership

• ParticipationParticipation

• ConflictConflict

• Non-Task BehaviorNon-Task Behavior

• etc.etc.

OUTCOMEOUTCOME

• Satisfaction with Satisfaction with ProcessProcess and Outcome and Outcome

• Outcome QualityOutcome Quality

• Time RequiredTime Required

• Number of AlternatesNumber of Alternates

• Number of CommentsNumber of Comments

• ConsensusConsensus

• ConfidenceConfidence

• etc.etc.


STRATEGIC INFORMATION SYSTEM STRATEGIC INFORMATION SYSTEM DESIGNED FOR UNSTRUCTURED DESIGNED FOR UNSTRUCTURED

DECISION MAKING THROUGH DECISION MAKING THROUGH ADVANCED GRAPHICS AND ADVANCED GRAPHICS AND

COMMUNICATIONSCOMMUNICATIONS

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EXECUTIVE EXECUTIVE SUPPORT SYSTEMS (ESS)SUPPORT SYSTEMS (ESS)


EXECUTIVE EXECUTIVE SUPPORT SYSTEMSSUPPORT SYSTEMS

• DRILL DOWN:DRILL DOWN: ability to move from ability to move from summary to lower levels of detailsummary to lower levels of detail

• Designed for specific needs of CEODesigned for specific needs of CEO• Extensive support staffExtensive support staff• Executive has 24 hour per day ability to Executive has 24 hour per day ability to

examine, control progress throughout examine, control progress throughout organizationorganization

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BENEFITS:BENEFITS:• FLEXIBILITYFLEXIBILITY• ABILITY TO ANALYZE, COMPARE, ABILITY TO ANALYZE, COMPARE,

HIGHLIGHT TRENDSHIGHLIGHT TRENDS• GRAPHICS HELP EXPLORE SITUATIONGRAPHICS HELP EXPLORE SITUATION• MONITOR PERFORMANCEMONITOR PERFORMANCE• TIMELINESS, AVAILABILITY OF DATA TIMELINESS, AVAILABILITY OF DATA

ALLOWS PROMPT ACTIONALLOWS PROMPT ACTION

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USES IN A DIGITAL FIRM:USES IN A DIGITAL FIRM:• BUSINESS INTELLIGENCE:BUSINESS INTELLIGENCE: Info on Info on

salespeople, distributors, retailerssalespeople, distributors, retailers• MONITORING BUSINESS PERFORMANCE:MONITORING BUSINESS PERFORMANCE:

Balanced scorecard shows perspectives of Balanced scorecard shows perspectives of customers, internal processes, learning, customers, internal processes, learning, growthgrowth

• ENTERPRISE WIDE REPORTING & ANALYSISENTERPRISE WIDE REPORTING & ANALYSIS

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c h a p t e r

1313 ENHANCING ENHANCING

MANAGEMENT MANAGEMENT DECISION DECISION MAKINGMAKING

Documents

13.1 © 2002 by Prentice Hall c h a p t e r 13 ENHANCING MANAGEMENT DECISION MAKING