c h a p t e r

13
ENHANCING
MANAGEMENT
DECISION MAKING

13.1 © 2002 by Prentice Hall

 LEARNING OBJECTIVES

• DIFFERENTIATE DECISION-
SUPPORT SYSTEMS (DSS) FROM
GROUP DECISION-SUPPORT
SYSTEMS (GDSS)
• DESCRIBE COMPONENTS OF DSS &
GDSS
*

13.2 © 2002 by Prentice Hall

 LEARNING OBJECTIVES

• DEMONSTRATE HOW DSS & GDSS

ENHANCE DECISION-MAKING
• DESCRIBE CAPABILITIES OF
EXECUTIVE SUPPORT SYSTEMS
(ESS)
• ASSESS BENEFITS OF ESS
*

13.3 © 2002 by Prentice Hall

 MANAGEMENT CHALLENGES

• DECISION-SUPPORT SYSTEMS
• GROUP DECISION-SUPPORT
SYSTEMS
• EXECUTIVE SUPPORT SYSTEMS
*

13.4 © 2002 by Prentice Hall

 DECISION SUPPORT
SYSTEMS (DSS)

MANAGEMENT LEVEL COMPUTER

SYSTEM COMBINES DATA,
MODELS, USER - FRIENDLY
SOFTWARE FOR SEMISTRUCTURED
& UNSTRUCTURED DECISION
MAKING
*

13.5 © 2002 by Prentice Hall

 DECISION SUPPORT
SYSTEM

• MODEL DRIVEN DSS: Uses models

for what-if and other analysis
• DATA-DRIVEN DSS: Allows
extraction, analysis of information
from databases
*

13.6 © 2002 by Prentice Hall

 DECISION SUPPORT
SYSTEM

DSS DATA EXTERNAL

TPS DATA
BASE

DSS SOFTWARE SYSTEM

MODELS
USER
INTERFACE OLAP TOOLS
DATAMINING TOOLS

USER
13.7 © 2002 by Prentice Hall
 DECISION SUPPORT
SYSTEM

• TPS: Transaction processing system

• MODEL: Representation of a problem
• OLAP: On-line analytical processing
• USER INTERFACE: How user enters
problem & receives answers
• DSS DATABASE: Current data from
applications or groups
*
13.8 © 2002 by Prentice Hall
 DECISION SUPPORT
SYSTEM

• DATA MINING: Technology for finding

relationships in large data bases for
prediction
• DSS SOFTWARE SYSTEM: Tools for data
analysis
• SENSITIVITY ANALYSIS: “What-if”
questions about changes in model factors
*

13.9 © 2002 by Prentice Hall

 DECISION SUPPORT
SYSTEM
APPLICATIONS:

• SUPPLY CHAIN MANAGEMENT

• CUSTOMER RELATIONSHIP
MANAGEMENT
• SIMULATING BUSINESS
SCENARIOS
*

13.10 © 2002 by Prentice Hall

 DECISION SUPPORT
SYSTEM
• GEOGRAPHIC INFORMATION SYSTEM
(GIS): Software to display digital maps
• WEB-BASED DSS: Available on Internet
for decisions, information, software
• CUSTOMER DSS (CDSS): System
supports buying decisions of customers
*

13.11 © 2002 by Prentice Hall

 DECISION SUPPORT
SYSTEM
EXAMPLES:
• GENERAL ACCIDENT INSURANCE:
Customer buying patterns, fraud
detection
• BANK OF AMERICA: Customer profiles
• FRITO-LAY: Price, advertising,
promotion selection
*

13.12 © 2002 by Prentice Hall

 DECISION SUPPORT
SYSTEM

• BURLINGTON COAT FACTORY:

Store location, inventory mix
• KEYCORP: Targeting direct mail
marketing customers
• NATIONAL GYPSUM: Corporate
planning & forecasting
*
13.13 © 2002 by Prentice Hall
 DECISION SUPPORT
SYSTEM

• SOUTHERN RAILWAY: Train

dispatching and routing
• TEXAS OIL & GAS: Evaluating drilling
sites
• UNITED AIRLINES: Flight scheduling,
passenger demand forecasting
*

13.14 © 2002 by Prentice Hall

 GROUP DECISION-SUPPORT SYSTEM
(GDSS)

INTERACTIVE COMPUTER-BASED
SYSTEM FACILITATES SOLUTION
OF UNSTRUCTURED PROBLEMS
BY DECISION MAKERS WORKING
AS GROUP
*

13.15 © 2002 by Prentice Hall

 GDSS ENHANCED DECISION MAKING
ALLOWS: Improved pre-planning
• Increased participation
• Open, collaborative atmosphere
• Idea generation free of criticism
• Evaluation objectivity
• Idea organization & evaluation
*

13.16 © 2002 by Prentice Hall

 GDSS ENHANCED
DECISION MAKING
ALLOWS: Setting priorities & decision
making
• Documentation of meetings
• Access to external information
• Preservation of organizational memory
*

13.17 © 2002 by Prentice Hall

 TOOLS OF GDSS

• ELECTRONIC QUESTIONNAIRES
• ELECTRONIC BRAINSTORMING
• IDEA ORGANIZERS
• QUESTIONNAIRE TOOLS
• TOOLS FOR VOTING,
SETTING PRIORITIES
*

13.18 © 2002 by Prentice Hall

 TOOLS OF GDSS

• STAKEHOLDER IDENTIFICATION &

ANALYSIS TOOLS
• POLICY FORMATION TOOLS
• GROUP DICTIONARIES
*

13.19 © 2002 by Prentice Hall

 ELECTRONIC MEETING SYSTEM
(EMS)

COLLABORATIVE GDSS: Uses

information technology to make
group meetings more productive
facilitates communication decision
making
*

13.20 © 2002 by Prentice Hall

 EXECUTIVE
SUPPORT SYSTEMS (ESS)

STRATEGIC INFORMATION SYSTEM

DESIGNED FOR UNSTRUCTURED
DECISION MAKING THROUGH
ADVANCED GRAPHICS AND
COMMUNICATIONS
*

13.21 © 2002 by Prentice Hall

 EXECUTIVE
SUPPORT SYSTEMS
• DRILL DOWN: ability to move from
summary to lower levels of detail
• Designed for specific needs of CEO
• Extensive support staff
• Executive has 24 hour per day ability to
examine, control progress throughout
organization
*

13.22 © 2002 by Prentice Hall

 EXECUTIVE
SUPPORT SYSTEMS
BENEFITS:
• FLEXIBILITY
• ABILITY TO ANALYZE, COMPARE, HIGHLIGHT
TRENDS
• GRAPHICS HELP EXPLORE SITUATION
• MONITOR PERFORMANCE
• TIMELINESS, AVAILABILITY OF DATA
ALLOWS PROMPT ACTION
*

13.23 © 2002 by Prentice Hall

 EXECUTIVE
SUPPORT SYSTEMS
USES IN A DIGITAL FIRM:
• BUSINESS INTELLIGENCE: Info on
salespeople, distributors, retailers
• MONITORING BUSINESS PERFORMANCE:
Balanced scorecard shows perspectives of
customers, internal processes, learning,
growth
• ENTERPRISE WIDE REPORTING & ANALYSIS
*

13.24 © 2002 by Prentice Hall

 c h a p t e r

13
ENHANCING
MANAGEMENT
DECISION MAKING

13.25 © 2002 by Prentice Hall