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8/8/2019 8. Enhancing Decision Making
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ENHANCING DECISION MAKING
8/8/2019 8. Enhancing Decision Making
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T YPES OF DECISIONS
Unstructured Decisions:
y In which the decision maker must provide
judgment, evaluation and insight to solve
the problem
y The decisions are novel, important andnonroutine
y There is no specified procedure to solve
themy Examples: A pprove capital budget; decide
corporate objectives
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T YPES OF DECISIONS(CONTI..)
Structured Decision:y The decisions are repetitive and routine
y Involve definite procedure for handling
themy Examples: Restock inventory; determine
special offers to customers
Semistructured Decision
y Examples: A llocate resources to managers;
develop a marketing plan
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DECISION MAKING LEVELS IN A FIRM
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THE DECISION MAKING PROCESS
Stages:
1) Intelligence: Discovering, identifying and
understanding the problems occurring in
the organization(what is the problem)2) Design: Identifying and exploring various
solutions to the problem
3) Choice: Choosing among solutionalternatives
4) Implementation: Making the chosen
alternative work
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DDECISIONECISION MM AKING AKING ININ THETHE RREALEAL W W ORLDORLD
Reasons that Information technology do not always
produce positive results:
y Information quality: High quality decisions
require high quality information (Information
quality dimensions are accuracy, integrity,consistency, completeness, validity, timeliness,
accessibility)
y Management filters: Biases and bad decisions
of managers
y Organizational inertia: Strong forces within
organization that resist change
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DECISION SUPPORT S YSTEMS
Supports semistructured and unstructured problems
It provides analytical models or tools for analyzing
large quantities of data
ComponentsComponents of of DSSDSS::
y DSS database: A collection of current or historicaldata from a number of applications or groups
y DSS software system: Contains the software
tools for data analysis, with models, data mining,
and other analytical tools
y DSS user interface: Graphical, flexible
interaction between users of the system and the
DSSsoftware tools
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BUSINESS V ALUE OF DSS
Provides fine-grained information for
decisions that enable the firm to coordinate
both internal and external business processes
much more precisely
Helping in decisions with:
y Supply chain management
y Customer relationship managementy Pricing Decisions
y A sset Utilization
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Data Visualization: Presentation of data in
graphical forms, to help users see patternsand relationships
Geographic Information Systems(GIS):Special category of DSS that display
geographically referenced data in digitized
mapsEx: GIS might be used to help retail chains to
identify new store locations, helps banks to
decide where to locateA
TMs in the city
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W EB-B ASED CUSTOMER DECISION-SUPPORT
S YSTEMS (CDSS)
They support the decision making process of
an existing or potential customers
Provide online access to various databases
and information
Tools used are: Internet search engines,intelligent agents, online catalogs, Web
directories, e-mail etc.
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ROUP ECISION- UPPORT YSTEM
(GDSS)
Computer-based system used to facilitate thesolution of unstructured problems by a set of
decision makers working together as a group
Tools used by GDSS are:
Hardware (conference facility, audiovisual
equipment, etc.)
Software tools (Electronic questionnaires,brainstorming tools, voting tools, etc.)
People (Participants, trained facilitator, support
staff)
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O VERVIEW OF A GDSS MEETING
In a GDSS electronic meeting, each attendeehas a workstation
The workstations are networked and areconnected to the facilitator·s pc
A ll data that the attendees forward fromtheir workstations to the group are collected
and saved on the file server
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O VERVIEW OF A GDSS MEETING(CONTI«)
The facilitator is able to project computerimages onto the projection screen
The facilitator controls the use of toolsduring the meeting.
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BUSINESS V ALUE OF GDSS
A llows a greater number of attendees
Enable collaborative atmosphere by
guaranteeing contributor·s anonymity
Enable nonattendees to locate organized
information after the meeting
Can increase the number of ideas generated
and the quality of decisions while producing
the desired results in fewer meetings Can lead to more participative and
democratic decision making
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THE ROLE OF E XECUTIVE SUPPORT S YSTEMS
IN THE FIRM
Helps the executives with semistructured and
unstructured problems
Helps to monitor organizational performance,
track activities of competitors, forecast trend,environment scanning etc.
ESS can bring together data from all parts of the
firm and enable managers to select, access, and
tailor them as needed.
It tries to avoid the problem of data
overload(same data in many parts)
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BUSINESS V ALUE OF E XECUTIVE SUPPORT
S YSTEMS
A bility to analyze, compare, and highlight trends
Graphical interface enables users to review data
more quickly and with more insight, speeding
decision making
Timeliness and availability of data enables more
timely decision making, helping businesses move
toward a ´sense-and-respondµ strategy
Increases upper management span of control, better
monitoring
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M ANAGEMENT OPPORTUNITIES
Decision-support systems provide
opportunities for increasing precision,
accuracy, and rapidity of decisions and
thereby contributing directly to profitability
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M ANAGEMENT CHALLENGES
Building systems that can actually fulfill
Executive Information Requirements
Changing management thinking to make
better use of systems for decision support
Organizational resistance
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SOLUTION GUIDELINES
The system must be flexible, easy to use,
and capable of supporting alternative
decision options
Training of the users is required
Top management should provide enoughsupport to the implementation of the
system
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THANK YOU