Enterprise manage information systems 6th by laudon ch12

What value can systems to support management decision making provide for the organization as a whole?.?. • Data-driven DSS: Supports decision making by allowing users to extract and an

Enhancing Management Decision Making

for the Digital Firm

1 How can information systems help individual

managers make better decisions when the

problems are nonroutine and constantly

changing?

2 How can information systems help people

working in a group make decisions more

efficiently?

3 Are there any special systems that can facilitate

decision making among senior managers?

Exactly what can these systems do to help

high-level management?

4 What value can systems to support

management decision making provide for the

organization as a whole?

1 Building information systems that can

actually fulfill executive information

requirements

2 Create meaningful reporting and

management decision-making processes

• Computer system at the management level

• Emphasizes change, flexibility, rapid

response, models, assumptions, ad-hoc

queries, and display graphics

MIS and DSS

• Data-driven DSS: Supports decision making

by allowing users to extract and analyze

useful information previously buried in

large databases

• Datamining: Finds hidden patterns and

relationships in large databases to infer

rules from them and predict future

Types of Decision-Support Systems

Data Drive Customer Care at Intrawest

• How does this customer care DSS help

Intrawest make decisions?

• How has it provided value for the firm?

Window on Organizations

Cargo revenue optimization of Continental Airlines

• Associations: Occurrences linked to a single

event

• Sequences: Events linked over time

Types of Decision-Support Systems

• Classification: Recognizing patterns that

describe the group to which an item

belongs

• Clustering: Similar to classification when no

groups have yet been defined Discovers

different groupings within data

Types of Decision-Support Systems

Overview of a decision-support system (DSS)

Figure 12-2

• DSS Database: Collection of current or

historical data from a number of

applications or groups Can be a small PC

database or a massive data warehouse

Components of DSS

• DSS Software System: Collection of software

tools used for data analysis, such as

OLAP tools, datamining tools, or a

collections of mathematical and analytical

models

Components of DSS

• Model: Abstract representation illustrating

components or relationships of a phenomenon

• Sensitivity Analysis: Models that ask “what-if”

questions repeatedly to determine the impact of

changes in one or more factors on the outcomes

Components of DSS

Sensitivity analysis

Figure 12-3

Examples of Decision-Support Systems

• General Accident Insurance: Customer

buying patterns and fraud detection

• Bank of America: Customer profiles

DSS Applications and the Digital Firm

Examples of Decision-Support Systems

potential drilling sites

DSS Applications and the Digital Firm

Examples of Decision-Support

Systems

• United Airlines: Flight scheduling,

passenger demand forecasting

• U.S Department of Defense: Defense

DSS Applications and the Digital Firm

• By analyzing several years of sales data

for similar items, the software estimates a

“seasonal demand curve” for each item

and predicts how many units would sell

each week at various prices.

• The software uses sales history to predict

how sensitive customer demand will be to

price changes

DSS for Pricing Decisions

• Can help firms model inventory stocking

levels, production schedules, or

transportation plans

• Can provide firms with information on key

performance indicators such as lead time,

cycle time, inventory turns, or total supply

DSS for Supply Chain Management

A DSS Makes Subaru More Parts-Savvy

• How does the Servigistics system provide

value for Subaru of New England?

• How did it change the way the company

ran its business?

Window on Technology

DSS for customer analysis and segmentation

Predictive Analysis

• Use of datamining techniques, historical

data, and assumptions about future

conditions to predict outcomes of events

DSS for Customer Relationship Management

• Data Visualization: Technology for

helping users see patterns and

relationships in large amounts of data by

presenting the data in graphical form

• Geographic Information System (GIS):

System with software that can analyze

and display data using digitized maps to

Data Visualization and Geographic Information Systems (GIS)

Customer Decision-Support System (CDSS)

• System to support the decision-making

process of an existing or potential

customer

Web-Based Customer Decision-Support Systems

• Group Decision-Support System (GDSS):

An interactive computer-based system to

facilitate the solution to unstructured

problems by a set of decision makers

working together as a group

What is a GDSS?

• Hardware: Conference facility, electronic

hardware

• Software tools: Tools for organizing

ideas, gathering information, and ranking

and seeking priorities

• People: Participants, trained facilitator,

staff supporting hardware and software

Components of GDSS

• Tools for voting or setting priorities

• Stakeholder identification and analysis

tools

• Policy formation tools

• Group dictionaries

Components of GDSS

• Each attendee has a workstation

facilitator’s console

collected and saved on a file server

Overview of a GDSS Meeting

Group system tools

Figure 12-5

• Number of attendees can increase while

productivity increases

• More collaborative atmosphere

• Software tools follow structured methods

for organizing and evaluating ideas and

preserving the results of meetings

How GDSS Can Enhance Group Decision Making

• Increase the number of ideas generated

• Can lead to more participative and

democratic decision making

How GDSS Can Enhance Group Decision Making

Organizational Memory

• Store learning from an organization’s

history that can be used for decision

making and other purposes

How GDSS Can Enhance Group Decision Making

• Focus on the information needs of senior

management

• Combine data from internal and external

sources

• Create a generalized computing and

communications environment that can be

focused and applied to a changing array of

problems

Executive Support Systems (ESS)

• Monitor organizational performance

• Track activities of competitors

• Spot problems

• Identify opportunities

Executive Support Systems (ESS)

• Bring together data from the entire

organization

• Allow managers to select, access, and

tailor data

• Enable executive and any subordinates

to look at the same data in the same way

The Role of Executive Support Systems in the Organization

Drill Down

• The ability to move from summary data

to lower and lower levels of detail

The Role of Executive Support Systems in the Organization

Developing ESS

information to be used for environmental

scanning

The Role of Executive Support Systems in the Organization

• Analyze, compare, and highlight trends

• Provide greater clarity and insight into

data

• Speed up decision making

Benefits of Executive Support Systems

• Improve management performance

• Increase management’s span of control

• Better monitoring of activities

Benefits of Executive Support Systems

ESS for Competitive Intelligence

Executive Support Systems and the Digital Firm

Executive Support Systems and the Digital Firm

Balanced Scorecard

• Model for analyzing firm performance

that supplements traditional financial

measures with measurements from

additional business perspectives, such

as customers, internal business

processes, and learning and growth

Enterprise-Wide Reporting and Analysis

Strategic performance management tools

for enterprise systems

• SAP: Web-enabled mySAP.com™,

Management Cockpit

• PeopleSoft: Web-enabled Enterprise

Enterprise-Wide Reporting and Analysis

Activity-Based Costing

• Model for identifying all the company

activities that cause costs to occur while

producing a specific product or service

so that managers can see which products

or services are profitable or losing money

and make changes to maximize firm

profitability

Harrah’s and Mohegan Sun: A Tale of Two Casino DSS

1 Analyze Harrah’s and Mohegan Sun

using the competitive forces and value

chain models.

2 Compare the business strategies of

Harrah’s and Mohegan sun What role do

customer reward systems play in these

strategies? How are they similar? How

Harrah’s and Mohegan Sun: A Tale of Two Casino DSS

Harrah’s and Mohegan Sun develop? How are

they related to their business strategy?

Which casino is more successful? Why? Can its

competitive advantage be sustained? Why or

why not?

casinos’ use of customer data? Explain your

response.