1. Information Technology for Managerial Decision Making
Management Levels & Management Activities
Types of Decision Problems
Decision Making Process
What is a DSS?
The Role and Characteristics of DSS
Components of a DSS
What is an EIS?
Benefits of EIS

2. Anthony’s Management Activities Framework
Strategic Planning
top management
determines business goals & strategies and decides on required resources
Management Control
middle management
acquires and executes resources to achieve the goals and strategies
Operational Control
low-level management
manages day-to-day operations to ensure resources are properly used

3. Types of Decision Probelms
Well-structured decisions
routine, repetitive problems
there usually is a procedure to automate problem solving
Semi-structured decisions
half-way between well-structured and unstructured decisions
Unstructured decisions
‘novel’ problems
need to devise a new solution to a problem
there is uncertainty/risk in decision making

4. Simon’s Decision Making Process Model
Intelligence Stage
Design Stage
Choice Stage
Implementation Stage

5. What is a DSS? DSS refers to a decision support system
DSS is defined as a computer-based system that provides analytical modes and data to assist a manager to solve decision problems in an interactive manner
The system ‘supports’ the decision making process, but the user (or the manager) is responsible for making the decision using his/her insights and judgments.
DSS is typically suited to quantitative decisions
relieves the user of the computational/analytical burden, and improves the speed and accuracy of decision making

6. The Role and Purpose of DSS
The Role of a DSS
assists a manager in making semi-structured decisions
supports, not replace, managerial decision making
improves the effectiveness, rather than efficiency, of decision making
Efficiency vs. Effectiveness
Efficiency:
- saved time: cycle time, time-to-market, etc.
- saved cost: labor cost, production cost, raw materials cost, etc.
- most TPS focus on improving the operational efficiency
Effectiveness:
- directly linked to factors influencing the organizational
outcomes.
- e.g., market share, sales, profit, competitiveness, growth rate
- often the prime objective of a DSS

7. Components of a DSS User Interface Data Management Subsystem Model
Base
Model
Base

8. What is an EIS? EIS refers to executive information systems
EIS is defined as a computer-based system to provide executives with easy access to both internal and external information related to a company’s critical success factors (Watson et al. 1991)
What is a critical success factor(CSF)?
factors that the executives consider important in succeeding in their industry
e.g., CSF’s for automotive industry: style, dealer system, cost control, energy efficiency

9. Information Support for Executives
Quick information updates
Observation of internal and external environments
Data access
Strategic analysis
Use of decision models
Reduction of information overload
Data summarization

10. Without EIS With EIS Data and info. In business envir.
Top
Management
EIS
Marketing
Info.
System
Production
Info.
System
Financial
Info
Sysem
Marketing
Info.
System
Production
Info.
System
Financial
Info
Sysem
Data and info. In business envir.
Data and info. In business envir.

11. Characteritics of EIS typically tailored to the individual user
may extract, filter, focus, and organize business data
easy to use, and is used by the executive
supports the ‘management by exception’ functinos
have ‘drill-down’ capabilities
supports the need for external data
provides various types of information, including graphs, tables, text, etc.

12. Management by Exception Corporate Profitability by Division
Can compare actual performance against budgeted performance
EIS can highlight the areas of ‘exception’
Corporate Profitability by Division
As of June 30, 1994
Budget Actual Variance %Variance
Automotive
Electronics (179) (53.1)
Aerospace
Corporate (87) (3.9)

13. Drill-Down Function
Can adjust the level of detail in the information displayed
Information is presented hierarchically (cf. Hypercard)
Begins with a summary information, and then moves gradually into more specific information
Useful when exploring fundamental causes of a business problem

14. Factors Leading to EIS Failure
Lack of executive support
Undefined system objectives
Poorly defined information requirements
Inadequate support staff
Poorly planned evolution