Lecture-10

Information Systems Management/Management Information System,

(ISM/MIS)
 What is Decision?
 Why decision making is important?

 Why Business Intelligence is important for decision

making?
 What type of decisions are taken at various levels of
management?
 What are stages in decision making process?

 The relevance of information in decision making?

WHAT IS DECISION?
 A decision is an act of selection or choice of one action
from several alternatives.
 Innumerable decisions are taken in day to day life and in
business both.
 Decisions are made at all levels of the firm.

 Some decisions are very common and routine but

exceptionally valuable.
 Although the value of improving any single one of these
decisions seems to be small but collectively these small
decisions adds up to a large annual value in the long run.
WHY DECISION MAKING IS
IMPORTANT?
 Decision making is an important function of
management.
 To solve a single problem when we have multiple
alternatives, decision making here plays an important
role.
 Decision making is a problem solving approach.

 Decision making can be defined as the process of

selecting a right and effective course of action from two
or more alternatives for the purpose from two or more
alternatives for the purpose of achieving a desired result
or the goal.
WHY BUSINESS INTELLIGENCE IS
IMPORTANT FOR DECISION MAKING?
 High-quality decision making is important , so firms use
business intelligence systems that focus on delivering
information to support management in decision making.
 Business Intelligence systems are more data-driven.
Focus on extracting useful information from massive
quantities of data.
 Business intelligence addresses the decision-making
needs of all levels of management.
 These systems work with specialized systems for
management decision making and proves to be profitable
for firms.
WHAT TYPE OF DECISIONS ARE TAKEN AT
VARIOUS LEVELS OF MANAGEMENT?
 Decisions are classified according to type:
 Unstructured decisions are those in which the decision
maker must provide judgment, evaluation , and insights into
the problem definition.
 Structured decisions,- they are repetitive and routine, and
decision makers follow a definite procedure for handling
them to be efficient.
 Semi structured decisions are those in which only part of the
problem has a clear-cut answer provided by an accepted
procedure.
WHAT TYPE OF DECISIONS ARE TAKEN AT
VARIOUS LEVELS OF MANAGEMENT?
 Senior executives face many unstructured decision
situations, such as establishing the firm’s 5 or 10 year
goals or deciding new markets to enter.
 Middle management faces more structured decision
scenarios but their decisions may include unstructured
components.
 Operational management and lower level employees
tend to make more structured decisions which are
repetitive in nature,
WHAT ARE STAGES IN DECISION
MAKING PROCESS?
 Making decisions consists of several different steps
 Simon in 1960 described 4 different stages in decision
making:
 Intelligence
 Design
 Choice
 Implementation
STAGES IN DECISION MAKING PROCESS
 Intelligence consist of discovering, identifying and
understanding the problems occurring in the
organization- why is there a problem, where, and what
effect is it having on the firm. Traditional MIS that
deliver a wide variety of detailed information that can
help identify problems, especially if the system report
exceptions.
 Design involves identifying and exploring various
solutions to the problem. Decision support systems
(DSS) are ideal in this stage for exploring alternatives
because they poses analytical tools for modelling data,
enabling users to explore various options quickly.
STAGES IN DECISION MAKING PROCESS
 Choice consists of choosing among solution alternatives.
Here DSS with access extensive firm data can help
managers choose the optimal solution.
 Implementation involves making the chosen alternative
work and continuing to mmonitir how well the solution
is working. MIS provides managers with routine reports
on the progress of a specific solution.
WHAT WILL HAPPEN WITHOUT
RELEVANT INFORMATION
 Without accurate and timely information, business
managers probably make decision based on forecast, best
guesses and luck, a process that results in over and
under-production of goods, raising costs, and the loss of
customers,
THE RELEVANCE OF INFORMATION IN
DECISION MAKING?
 If the required and correct information is provides for
decision –making to the particular level of management
at right time, it can lead to higher ROIs.
 Internet, Information systems, business intelligence and
latest technologies enable these days firms to get right
information at the right time to make an informed
decision.
 Information plays a vital role in taking correct decision
and within the given time period.
CONTINUE..
 Accuracy, integrity, consistency, completeness, validity,
timeliness and accessibility are the essential seven
dimensions of the information which makes it worth for
any organization.
 Information which is relevant is essential for
organizations to deal with changes in global economics
and the business enterprise.
 Relevant information can transform the traditional
business world as managers get access to the really
important information they need for accurate and timely
decisions.
CONTINUE…
 So relevant information is important today to take
correct and timely decision for business by the different
levels of management in today’s competitive business
environment.
 Relevant information proves to be most helpful to
managers to provide support to take various decisions at
different levels to improve the organizational
performance.
 Relevant information should be used by the decision
maker in evaluating the alternatives and in making
decisions.