Outline Managing a Business or Organization Information Technology to Support Managerial Decision Making

The Traditional Functions of a Manager Managers seek to accomplish organizational goals. Information technology supports managerial functions.

The Traditional Roles of a Manager Managers may need to perform all three roles at one time.

Types of Management Decisions Managers use several methods to solve different types of problems in a variety of situations.

Levels of Management

Information Requirements of a Manager Organizational goal: Provide the right information at the right time in the right form. Example: semistructured decision about a marketing plan. Historical sales data Future-oriented sales data

Dimensions and Characteristics of Information: Time Timeliness Currency Frequency Time period

Dimensions and Characteristics of Information: Content Accuracy Relevance Completeness Scope

Dimensions and Characteristics of Information: Form Clarity Detail Order Presentation Media

Information and Management Levels

Information Technology and Managerial Communication Information technology can: Increase the number of messages transmitted to more people Ensure messages go only to those who need the information Eliminate unnecessary time delays Vary the form of the message with multimedia.

Communication Concepts Communication is the expression of an idea. Communication is sent through a channel. Communication requires a receiver. Feedback clarifies garbled messages.

Collaborative Work

Office Automation Evolution Mainframes were used for accounting and payroll. Personal computers with office application software became popular. Power struggles often occurred between mainframe and PC supporters.

Office Automation Evolution Today companies network PCs, mainframes and thin clients together. Groupware allows sharing calendars, documents and messages among workers.

Distributed Computing Today companies may have PCs, mainframes, workstations and thin clients networked together. Workers may access mainframe database using their PC or terminal. Workers may use Web browser to access data on company intranet. May not even know where the data is stored.

Paperless Office Computers now deliver more mail messages than postal carriers. The volume of on-line publishing is rapidly growing. The amount of paper used is not decreasing as much as once predicted, but we do use paper differently.

Information Technology and Decision Making Decision making involves: Understanding the problem Identifying possible solutions Selecting the most desirable solution Implementing the decision.

Types of Decision Making Models Mental model: how a person’s beliefs, assumptions, and interpretation of reality are organized. Mathematical/quantitative model: reality represented as numerical relationships among key variables (e.g., budget spreadsheet).

Types of Decision Making Models Analog model: pictorial representation of a situation (e.g., organizational chart, stock market graph). Iconic model: physical replica of reality (e.g., CAD developed scale model of a product).

Individual Decision Styles Reflect how individuals: Emphasize certain phases of decision making Use certain types of models Use information in unique ways Emphasize certain beliefs and values.

Individual Decision Styles Rational Satisficing Systematic Intuitive Bureaucratic Political Garbage can

Supporting Decision Makers with Technology Information systems that effectively support decision making will be flexible and adaptable enough to support a variety of individual and organizational styles.

Management Information Systems (MIS) Managers use the system to access corporate business process information.

Management Information Systems (MIS) Give managers the information needed to make decisions about operational activities. Provide three types of reports: detailed, summary and exception. Typically provided to managers as scheduled reports.

Decision Support Systems (DSS) Managers can use the system interactively to analyze data.

Decision Support Systems (DSS) Useful for non-routine decisions Managers manipulate information Three major components: Data management Model management Dialog management.

Group Decision Support Systems (GDDS) Groups of managers use the system interactively to analyze data.

Group Decision Support Systems (GDDS) Physical configuration: Room with appropriate computers DSS database and modeling software Local area network connections Large-screen projections of computer output for group viewing Communication-oriented software tools for idea generation and sharing.

Group Decision Support Systems (GDDS) Prior to the meeting, managers can use the GDDS software to perform sensitivity analysis. During the meeting, managers can: Show their earlier work to others Use GDDS software tools to brainstorm and organize their ideas.

Geographic Information Systems (GIS) Special type of DSS designed to work with map and other spatial information including: Mapping and analytic software Databases of map images, geographic and demographic data User interface allowing queries and results shown on a map.

Uses of a GIS A GIS can be used to: Identify the best location for a new retail store Analyze customer preferences in a given geographical area Plan delivery and service routes Assist governmental employees such as city planners or law enforcement personnel.

Executive Information Systems (EIS) Used to monitor important economic and social trends affecting the company and corporate performance.

Executive Information Systems (EIS) An EIS has similar design components to a DSS Data management component provides interactive access to data on the company’s critical success factors Model management component includes analytical models to identify and study trends in critical success factors Dialog management components provides a variety of output formats.

Executive Information Systems (EIS) An executive can use the EIS to drill down through the available information to the level of detail needed. Access to up to data internal and external information makes an EIS particularly helpful during the intelligence phase of decision making.

Expert Systems (ES) Expert answers are provided to a user’s questions in an interactive process.

Expert Systems (ES) An expert system supports decision making by providing managers with access to computerized expert knowledge. Such systems are based on years of artificial intelligence research.

Knowledge Bases for Expert Systems Researchers have had little success at developing systems with broad, shallow knowledge such as known by children. Researchers have had success when the knowledge base is restricted to narrow, deep domains.

Knowledge Base Information A knowledge base may contain 200 to 10,000 if-then rules, which incorporate uncertainty as “fuzzy” rules. Example from MYCIN, a medical expert system: If (1) the infection is primary-bacteremia, and (2) the site of the culture is one of the sterile sites, and (3) the suspected portal of entry of the organism is the gastrointestinal tract, then there is suggestive evidence (.7) that he identify of the organism is bacteriodes.

Expert Systems in Perspective An expert system can: Help train new employees Reduce the number of human errors Take care of routine tasks so workers can focus on more challenging jobs

Expert Systems in Perspective Provide expertise when no experts are available Preserve the knowledge of experts after those experts leave an organization Combine the knowledge of several experts Make knowledge available to more people at different locations.

Expert Systems in Perspective Limits of expert systems: Difficult to build, particularly the knowledge base component Poorer at planning strategies than human experts Less creative than human experts Powerless outside their narrow, deep domain of knowledge.

Comparison of System Design Features

Information Systems in Perspective Information systems often do not fit neatly into one of the five information systems discussed (automated office systems, MIS, DSS, EIS, ES). The design features incorporated into an information system should be based on the communication and decision making needs of users.

Information Systems in Perspective These tools provide information and advice, with some risks. Poor system design limits decision quality. Managers may feel overwhelmed with information. User training is essential. A system cannot totally replace the human communication and decision-making skills necessary for successful management.

After reading this chapter, you should be able to: Describe several aspects of management, the information needs of managers, and the types of decisions managers make Explain several basic communications concepts

After reading this chapter, you should be able to: Discuss several ways that information technology is used to help managers collaborate and communicate more effectively Explain several decision-making concepts

After reading this chapter, you should be able to: Describe several ways that information technology is used to help managers make decisions more effectively Discuss the issues that should be included in an organization’s information code of ethics

TYPES OF INFORMATION SYSTEMS DATA WORKERS KIND OF SYSTEM GROUPS SERVED STRATEGIC LEVEL SENIOR MANAGERS MANAGEMENT LEVEL MIDDLE MANAGERS OPERATIONAL OPERATIONAL LEVEL MANAGERS KNOWLEDGE LEVEL KNOWLEDGE & SALES & MANUFACTURING FINANCE ACCOUNTING HUMAN RESOURCES MARKETING

MAJOR TYPES OF SYSTEMS Executive support systems (ESS) Decision support systems (DSS) Management information systems (MIS) Knowledge work systems (KWS) Office automation systems (OAS) Transaction processing systems (TPS) *

TYPES OF INFORMATION SYSTEMS DATA WORKERS KIND OF SYSTEM GROUPS SERVED STRATEGIC LEVEL SENIOR MANAGERS MANAGEMENT LEVEL MIDDLE MANAGERS OPERATIONAL OPERATIONAL LEVEL MANAGERS KNOWLEDGE LEVEL KNOWLEDGE & ESS DSS MIS KWS OAS TPS

TPS DATA FOR MIS APPLICATIONS MIS FILES SALES DATA UNIT PRODUCT COST PRODUCT CHANGE DATA EXPENSE DATA REPORTS MANAGERS TPS Order Processing System Materials Resource Planning System General Ledger ORDER FILE PRODUCTION MASTER FILE ACCOUNTING FILES

INTERRELATIONSHIPS AMONG SYSTEMS ESS TPS KWS OAS DSS MIS

SUPPLY-CHAIN MANAGEMENT-AN EXAMPLE OF PROCESS ALIGNED SYSTEM CUSTOMERS PLANNING & FORECASTING ORDER PROCESSING SUPPLIERS INTRANET PRODUCTION PROCUREMENT ACCOUNTING LOGISTICS SERVICES SHIPPING INVENTORY DISTRIBUTORS