Presentation is loading. Please wait.

Presentation is loading. Please wait.

Information Technology for Managerial Decision Making

Similar presentations


Presentation on theme: "Information Technology for Managerial Decision Making"— Presentation transcript:

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


Download ppt "Information Technology for Managerial Decision Making"

Similar presentations


Ads by Google