MIS

CHAPTER 12

MANAGEMENT SUPPORT
SYSTEMS
Hossein BIDGOLI

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 Chapter 12 Management Support Systems

learning outcomes
LO1 Define types of decisions and phases of the
decision-making process in a typical organization.
LO2 Describe a decision support system.
LO3 Explain an executive information system’s
importance in decision making.
LO4 Describe group support systems, including
groupware and electronic meeting systems.
LO5 Summarize uses for a geographic information
system.

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l e a r n i n g o u t c o m e s (cont’d.)
LO6 Describe guidelines for designing a management
support system.

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Types of Decisions in an Organization

• Structured decisions
– Well-defined standard operating procedure exists
– Also called programmable tasks
– Can be automated
• Semistructured decisions
– Not as well-defined by standard operating procedures
– Include a structured aspect that benefits from
information retrieval, analytical models, and
information systems technology

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Types of Decisions in an Organization (cont’d.)

• Unstructured decisions
– Unique; typically one-time decisions
– Does not rely on standard operating procedure
– Decision maker’s intuition plays the most important role
– Information technology offers little support for these
decisions
• Management support systems (MSSs)
– Different types of information systems have been
developed to support certain aspects and types of
decisions

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Phases of the Decision-Making Process

• Herbert Simon
– Winner of the 1978 Nobel Prize in economics
– Defines three phases in the decision-making process:
intelligence, design, and choice
– Fourth phase, implementation, can be added

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The Intelligence Phase

• Decision maker examines the organization’s
environment for conditions that need decisions
• Data is collected from a variety of sources and
processed
• Decision maker can discover ways to approach
the problem

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The Intelligence Phase (cont’d.)

• Three parts
– First: determine what the reality is
– Second: get a better understanding of the problem by
collecting data and information about it
– Third: gather data and information needed to define
alternatives for solving the problem

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The Design Phase

• Objective
– Define criteria for the decision
– Generate alternatives for meeting the criteria
– Define associations between the criteria and the
alternatives
• Defining associations between alternatives and
criteria involves understanding how each
alternative affects the criteria
• Information technology doesn’t support this
phase of decision making much
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The Choice Phase

• Best and most effective course of action is
chosen
– From the practical alternatives
• Analyze each alternative and its relationship
– To the criteria to determine whether it’s feasible
• Decision support system (DSS) can be
particularly useful in this phase

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The Implementation Phase

• Organization devises a plan for carrying out the
alternative selected in the choice phase
• Obtains the resources to implement the plan
• DSS can do a follow-up assessment on how well
a solution is performing

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Decision Support Systems

• Decision support system (DSS)
– Interactive information system
– Consisting of hardware, software, data, and models
(mathematical and statistical)
– Designed to assist decision makers in an organization

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Decision Support Systems (cont’d.)

• Requirements:
– Be interactive
– Incorporate the human element as well as hardware
and software
– Use both internal and external data
– Include mathematical and statistical models
– Support decision makers at all organizational levels
– Emphasize semistructured and unstructured tasks

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Components of a Decision Support System

• Three major components:
– Database
– Model base
• Includes mathematical and statistical models that
enable a DSS to analyze information
– User interface
• What users make use of to access the DSS
• DSS engine
– Manages and coordinates these major components

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Exhibit 12.2 Components of a DSS

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DSS Capabilities
• What-if analysis
• Goal-seeking
• Sensitivity analysis
• Exception reporting analysis
• More capabilities, such as:
– Graphical analysis, forecasting, simulation, statistical
analysis, and modeling analysis

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Roles in the DSS Environment

• Roles include:
– User, managerial designer, technical designer, and
model builder
• Users
– Most important role because they’re the ones using
the DSS
• Managerial designer
– Defines the management issues in designing and
using a DSS

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Roles in the DSS Environment (cont’d.)

• Technical designer
– Focuses on how the DSS is implemented
• Model builder
– Liaison between users and designers

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Costs and Benefits of Decision Support Systems

• Benefits of a DSS:
– Increase in the number of alternatives examined
– Fast response to unexpected situations
– Ability to make one-of-a-kind decisions
– New insights and learning
– Improved communication
– Improved control over operations
– Cost savings from being able to make better decisions
and analyze several scenarios (what-ifs) in a short
period

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Costs and Benefits of Decision Support Systems

(cont’d.)
– Better decisions
– More effective teamwork
– Time savings
– Making better use of data resources

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Executive Information Systems

• Branch of DSSs
• Interactive information systems that give
executives easy access to internal and external
data
• Typically include:
– “Drill-down” features
– Digital dashboard
• Ease of use
– EIS designers should focus on simplicity when
developing a user interface
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Executive Information Systems (cont’d.)

• Require access to both internal and external
data
– So that executives can spot trends, make forecasts,
and conduct different types of analyses
• Should also collect data related to an
organization’s “critical success factors”

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Executive Information Systems (cont’d.)

• Digital dashboard
– Integrates information from multiple sources and
presents it in a unified, understandable format
– Often charts and graphs
• Many digital dashboards are Web-based

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Exhibit 12.3 A Digital Dashboard

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Reasons for Using EISs

• EIS increases managers’ productivity
• EIS can convert information into other formats
• EIS can spot trends and report exceptions

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Avoiding Failure in Design and Use of EISs

• Factors that can lead to a failed EIS:
– Corporate culture isn’t ready
– Organizational resistance to the project
– Project is viewed as unimportant
– Management loses interest or isn’t committed
– Objectives and information requirements can’t be defined
clearly
– System doesn’t meet its objectives
– System’s objectives aren’t linked to factors critical to the
organization’s success
– Project’s costs can’t be justified

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Avoiding Failure in Design and Use of EISs (cont’d.)

– Developing applications takes too much time
– System is too complicated
– Vendor support has been discontinued
– Executives themselves
– Nature of executives’ work
– Nature of information the EIS provides

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EIS Packages and Tools

• Generally designed with two or three
components:
– Administrative module for managing data access
– Builder module for developers to configure data
mapping and screen sequencing
– Runtime module for using the system
• Some EIS packages provide a data storage
system

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EIS Packages and Tools (cont’d.)

• Tasks managers perform for which an EIS is
useful:
– Tracking performance
– Flagging exceptions
– Ranking, comparing, spotting trends
– Investigating/exploring

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Group Support Systems

• Use computer and communication technologies
to formulate, process, and implement a decision-
making task
• Considered a kind of intervention technology
that helps overcome the limitations of group
interactions
• Reduce communication barriers
• Introduce order and efficiency into situations
that are inherently unsystematic and inefficient

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Group Support Systems (cont’d.)

• Useful for:
– Committees
– Review panels
– Board meetings
– Task forces
– Decision-making sessions that require input from
several decision makers

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Groupware
• Assist groups in:
– Communicating, collaborating, and coordinating their
activities
• Intended more for teamwork than for decision
support

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Groupware (cont’d.)
• Some capabilities of groupware include:
– Audio and video conferencing
– Automated appointment books
– Brainstorming
– Database access
– E-mail
– Online chat
– Scheduling
– To-do lists
– Workflow automation
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Groupware (cont’d.)
• Examples of Web-based GSS tools:
– Microsoft Office SharePoint Server and IBM Lotus
Domino
• Other software used for e-collaboration:
– Electronic meeting systems, such as Microsoft
LiveMeeting, Metastorm, and IBM FileNet

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Electronic Meeting Systems

• Enable decision makers in different locations to
participate in a group decision-making process
• Include:
– Real-time computer conferencing
– Video teleconferencing
– Desktop conferencing

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Advantages and Disadvantages of GSSs

• Advantages:
– Costs as well as stress are reduced due to decreased
travel
– More time to talk with each other and solve problems
– Shyness isn’t as much of an issue in GSS sessions
– Increasing collaboration improves the effectiveness of
decision makers

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Advantages and Disadvantages of GSSs (cont’d.)

• Disadvantages:
– Lack of the human touch
– Unnecessary meetings
– Security problems
– Costs of GSS implementation are high

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Geographic Information Systems

• Captures, stores, processes, and displays
geographic information
• Uses spatial and nonspatial data
• Uses three geographic objects:
– Points
– Lines
– Areas

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Geographic Information Systems (cont’d.)

• Common example of a GIS:
– Getting driving directions from Google Maps
– User-friendly interface that helps you visualize the
route
– After you make a decision, you can print driving
directions and a map

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GIS Applications
• Education planning
• Urban planning
• Government
• Insurance
• Marketing
• Real estate
• Transportation and logistics

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Guidelines for Designing a Management Support

System
• Get support from the top
• Define objectives and benefits clearly
• Identify executives’ information needs
• Keep the lines of communication open
• Hide the system’s complexity and keep the interface
simple
• Keep the “look and feel” consistent
• Design a flexible system
• Make sure response time is fast
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Summary
• Different types of decisions
• Phases of decision making in a typical
organization
• DSS:
– Components, capabilities, key players, and costs and
benefits
• Executive information systems
• Group support systems
• Geographic information systems

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