Managing OrganizationsInformed decision making as a prerequisite for success

Action

Vision

Mission

Organizational

Context

Policies, Goals, and Objectives

Givens

Values, Purpose, Structure, Politics, Environment, etc.

What should be done ?

Analytics, Decision Making

When and how ??

StrategicDirection

DecisionMaking

Implementation Project Management

Managerial Decision MakingInformation Technology Solutions for Improving

Effectiveness

ComplexityWhat does it add up to?Uncertainty

What can happen?

INTELLIGENCE

CHOICE

DESIGN

DATAMODELS

Variables (Measures and Estimates)

Probabilities and Estimates

Structuring Relationships

Problem Representation

Generation of Alternatives

Decision Analysis and Influence Diagrams for Visualizing Models and Choices

Spreadsheet Models

for managing complex relationships and detail

Modeling Decision SituationsProcess for Developing Meaningful and Robust Models

Objective Hierarchies

Variables and Measures

Modeling Relationships

Situation Structuring

Testing and Validation

Implementation and UseDSS

Fundamental and Means Objectives (feasible?)

Decision, Intermediate, and Outcome Variables

Data, Probabilities, Distributions

Communicate

Influence Diagrams and Decision Trees

Spreadsheet Modeling

Statistical, OR, Financial, Acctg. Models

Values, Goals, Strategies, etc

Analyze & Synthesize

The Decision Analysis ProcessTools for Visualizing and Evaluating Alternatives

Identify decision situation

and understand objectives

Identify alternatives

Decompose and model

• problem structure

• uncertainty

• preferences

Choose best alternative

Sensitivity Analyses

Implement Decision

Model Representation

Deterministic Analysis

Probabilistic Analysis

Evaluation of Alternatives

Decision, Chance, and Consequence Variables

Arcs and Relationship Formulas

Tornado Diagrams

N-way Sensitivity

Uncertainty Assessment

Risk Profiles

EMV, NPV, etc.

Model Management SystemsTools for transforming data into information

Creates models easily and quickly, either from scratch or from existing models or from building blocks. Allows users to manipulate the models so that they can conduct experiments and sensitivity analysis ranging from "what-if" to "goal seeking". Stores and manages a wide variety of different types of models in a logical and integrated manner. Accesses and integrates the model building blocks. Catalogs and displays the directory of models for use by several individuals in the organization. Tracks models, data, and application usage. Interrelates models with appropriate linkages through the database. Manages and maintains the model base with management functions analogous to database management: store, access, run, update, link, catalog, and query.

Types of ModelsTools for transforming data into information

•Accounting/financial models, most business models are described by accounting and financial relationships.

•Optimization, such as linear/quadratic programming, used when there is a set of constraints that must be considered before the objective is optimized through a solver.

•Statistical models for forecasting, used to take historical data and derive relationships in order to predict probabilistic future experience. Used for modeling uncertain relationships.

•Analog models - simplification of reality. Examples include pie charts, speedometers, and road maps.

•Symbolic models include Simulation, Algebraic, and Spreadsheet models. These feature easy manipulation and modification, difficult underlying comprehension, however high ease of interpretation.