Ch 12: Management Support Systems

Benefits of DSS

* Increase in the number of alternatives examined * Fast response to unexpected situations * Ability to make one-of-a-kind decisions * New insights and learning * Improved communication * Improved control over operations, such as controlling the cost of production * Cost savings from being able to make better decisions and analyze several scenarios (what-ifs) in a short period * Better decisions * More effective teamwork * Time savings * Better use of data resources

Structured decisions

Programmable tasks, can be automated because a well-defined standard operating procedure exists for these types of decisions

Implementation phase

The organization devises a plan for carrying out the alternative selected in the choice phase and obtains the resources to implement the plan

Groupware

assists groups in communicating, collaborating, and coordinating their activities. It is a collection of applications that supports decision makers by providing access to a shared environment and information.

Intelligence phase

A decision maker examines the organization's environment for conditions that need decisions. Data is collected from a variety of sources (internal and external) and processed. From this information, the decision maker can discover ways to approach the problem.

Decision Support System (DSS)

An interactive information system consisting of hardware, software, data, and models (mathematical and statistical) designed to assist decision makers in an organization. Its three major components are a database, a model base, and a user interface.

Education planning

Analyzing demographic data toward changing school district boundaries or deciding where to build new schools

Unstructured decisions

Are typically one-time decisions, with no standard operating procedure pertaining to them.

Group Support Systems (GSSs)

Assist decision makers working in groups. These systems use computer and communication technologies to formulate, process, and implement a decision-making task and can be considered a kind of intervention technology that helps overcome the limitations of group interactions.

A DSS should make the following requirements:

Be interactive, incorporate the human element as well as hardware and software, use both internal and external data, include mathematical and statistical models, support decision makers at all organizational levels, emphasize semistructured and unstructured tasks

Executive information system (EIS)

Branches of DSSs, are interactive information systems that give executives easy access to internal and external data and typically include "drill-down" features and a digital dashboard for examining and analyzing information.

Insurance

Combining data on community boundaries, street addresses, and zip codes with search capabilities to find information (some from federal and state agencies) on potential hazards, such as natural disasters, auto-rating variables, and crime rate indexes

Model base

Component includes mathematical and statistical models that, along with the database, enable a DSS to analyze information

Objectives and benefits are clearly defined

Costs are always in dollars, but benefits are qualitative

Managerial designer

Defines the management issues in designing and using a DSS. These issues do not involve the technological aspects of the system; they are related to management's goals and needs.

Choice phase

During this phase, the best and most effective course of action is chosen

Electronic meeting systems

Enable decision makers in different locations to participate in a group decision-making process.

Real estate

Finding properties that meet buyers' preferences and price ranges, using a combination of census data, multiple listing files, mortgage information, and buyer profiles

Technical designer

Focuses on how the DSS is implemented and usually addresses questions about data storage, file structure, user access, response time, and security measures

Design phase

In this phase, the objective is to define criteria for the decision, generate alternatives for meeting the criteria, and define associations between the criteria and the alternatives.

Semistructured decisions

Include a structured aspect that benefits from information retrieval, analytical models, and information systems technology

Digital dashboard

Integrates information from multiple components and presents it in a unified display

Government

Making the best use of personnel and equipment while dealing with tight budgets, dispatching personnel and equipment to crime and fire locations, and maintaining crime statistics

Transportation and logistics

Managing vehicle fleets, coding delivery addresses, creating street networks for predicting driving times, and developing maps for scheduling and routing deliveries

Marketing

Pinpointing areas with the greatest concentration of potential customers, displaying sales statistics in a geographic context, evaluating demographic and lifestyle data to identify new markets

Characteristics of an EIS

Tailored to meet management's information needs; can extract, compress, filter, and track critical data; provides online status access, trend analysis, and exception reporting; offers information in graphical, tabular, and text formats; includes statistical analysis techniques for summarizing and structuring data; retrieves data in a wide range of platforms and data formats; contains customized application-development tools; supports electronic communications, such as e-mail and video conferencing

Sensitivity analysis

This enables you to apply different variables, such as determining variables, such as determining variables, such determining the maximum price you could pay for raw materials and still make a profit, or determining how much the interest rate has to go down for you to be able to afford a $100,000 house with a monthly payment of $700

Goal seeking

This is the reverse of what-if analysis. It asks what has to be done to achieve a particular goal--for example, how much to charge for a product in order to generate $200,000 profit, or how much to advertise a product to increase total sales to $50,000,000

Exception reporting analysis

This monitors the performance of variables that are outside a defined range, such as pinpointing the region that generated the highest total sales or the production center that went over budget.

What-if analysis

This shows the effect of a change in one variable, answering questions such as "If labor costs increase by 4 percent, how is the final cost of a product affected?" and "If the advertising budget increases by 2 percent, what is the effect on total sales

Geographic Information System (GIS)

This system captures, stores, processes, and displays geographic information or information in a geographic context, such as showing the location of all city streetlights on a map

Urban planning

Tracking changes in ridership on mass-transit systems and analyzing demographic data to determine new voting districts among many other uses

DSSs include the following types of features to support decision making:

What-if analysis, goal seeking, sensitivity analysis, exception reporting analysis

Support from the top

Without a full commitment from top management, the system's chances of successes are low

Model builder

is the liaison between users and designers. He or she is responsible for supplying information on what the model does, what data inputs it accepts, how the model's output should be interpreted, and what assumptions go into creating and using the model.

Management Support Systems (MSSs)

the different types of information systems that have been developed to support certain aspects and types of decisions. Each type of MSS is designed with unique goals and objectives