12-1 copyright © 2013 pearson canada inc. enhancing decision making oleh : kundang k juman...
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12-1Copyright © 2013 Pearson Canada Inc.
Enhancing Enhancing Decision Decision MakingMaking
Oleh : Kundang K JumanOleh : Kundang K Juman
Enhancing Enhancing Decision Decision MakingMaking
Oleh : Kundang K JumanOleh : Kundang K Juman
CHAPTER TWELVE
12-2Copyright © 2013 Pearson Canada Inc.
Management Information SystemsManagement Information SystemsChapter 12 Enhancing Decision MakingChapter 12 Enhancing Decision Making
LEARNING OBJECTIVES
After reading this chapter, you will be able to answer the following questions:
1. What are the different types of decisions and how does the decision-making process work?
2. How do information systems support the activities of managers and management decision making?
3. How do business intelligence and business analytics support decision making?
Continued …
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Management Information SystemsManagement Information SystemsChapter 12 Enhancing Decision MakingChapter 12 Enhancing Decision Making
LEARNING OBJECTIVES (continued)
4. How do different decision-making constituencies in an organization use business intelligence?
5. What is the role of information systems in helping people working in a group make decisions more efficiently?
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Management Information SystemsManagement Information SystemsChapter 12 Enhancing Decision MakingChapter 12 Enhancing Decision Making
What to Sell? What Price to Charge? Ask the Data
• Problem: Chain retailers such as Starbucks, Duane Reade, need to determine what products will sell at what prices at different locations
• Solutions: Business analytics software to analyze patterns in sales data, create pricing profiles and buyer profiles for different regions, locales, even times of day
• Demonstrates the use of business intelligence and analysis systems to improve sales and profits
• Illustrates how information systems improve decision making
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Management Information SystemsManagement Information SystemsChapter 12 Enhancing Decision MakingChapter 12 Enhancing Decision Making
Decision Making and Information Systems
• Business Value of Improved Decision Making
• Types of decisions
• The decision-making process
• Managers and decision making in the real world
• Managerial roles
• Real-world decision making
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Management Information SystemsManagement Information SystemsChapter 12 Enhancing Decision MakingChapter 12 Enhancing Decision Making
Types of Decisions• Unstructured Decisions
• Novel, non-routine decisions requiring judgment and insights
• Examples: Approve capital budget; decide corporate objectives
• Structured Decisions• Routine decisions with definite procedures• Examples: Restock inventory; determine special offers to
customers
Continued …
Decision Making and Information Systems
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Management Information SystemsManagement Information SystemsChapter 12 Enhancing Decision MakingChapter 12 Enhancing Decision Making
Types of Decisions (continued)• Semistructured Decisions
• Only part of decision has clear-cut answers provided by accepted procedures
• Examples: Allocate resources to managers; develop a marketing plan
Decision Making and Information Systems
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Management Information SystemsManagement Information SystemsChapter 12 Enhancing Decision MakingChapter 12 Enhancing Decision Making
Decision Making and Information Systems
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Management Information SystemsManagement Information SystemsChapter 12 Enhancing Decision MakingChapter 12 Enhancing Decision Making
The decision-making process1. Intelligence
• Discovering, identifying, and understanding the problems occurring in the organization
2. Design• Identifying and exploring solutions to the problem
3. Choice• Choosing among solution alternatives
4. Implementation• Making chosen alternative work and continuing to
monitor how well solution is working
Decision Making and Information Systems
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Management Information SystemsManagement Information SystemsChapter 12 Enhancing Decision MakingChapter 12 Enhancing Decision Making
Decision Making and Information Systems
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Management Information SystemsManagement Information SystemsChapter 12 Enhancing Decision MakingChapter 12 Enhancing Decision Making
Managers and Decision Making in the Real World
• Managerial Roles• Classical Model of Management• Behavioural Models of Management
• Interpersonal Roles• Informational Roles• Decisional Roles
Continued …
Decision Making and Information Systems
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Management Information SystemsManagement Information SystemsChapter 12 Enhancing Decision MakingChapter 12 Enhancing Decision Making
Managers and Decision Making in the Real World (continued)
• Real-World Decision Making1. Information quality
• High-quality decisions require high-quality information
2. Management filters• Managers have selective attention and have variety of
biases that reject information that does not conform to prior conceptions
3. Organizational culture• Strong forces within organizations resist making decisions
calling for major change
Decision Making and Information Systems
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Management Information SystemsManagement Information SystemsChapter 12 Enhancing Decision MakingChapter 12 Enhancing Decision Making
What is Business Intelligence?• Infrastructure for collecting, storing, analyzing
data produced by business• Databases, data warehouses, data marts
• Business analytics• Tools and techniques for analyzing data• OLAP, statistics, models, data mining
• Business intelligence vendors• Create business intelligence and analytics
purchased by firms
Business Intelligence in the Enterprise
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Management Information SystemsManagement Information SystemsChapter 12 Enhancing Decision MakingChapter 12 Enhancing Decision Making
Six elements in the business intelligence environment
1. Data from the business environment
2. Business intelligence infrastructure
3. Business analytics toolset
4. Managerial users and methods
5. Delivery platform – MIS, DSS, ESS
6. User interface
Business Intelligence in the Enterprise
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Management Information SystemsManagement Information SystemsChapter 12 Enhancing Decision MakingChapter 12 Enhancing Decision Making
Business Intelligence in the Enterprise
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Management Information SystemsManagement Information SystemsChapter 12 Enhancing Decision MakingChapter 12 Enhancing Decision Making
Business Intelligence and Analytics Capabilities
• Production Reports
• Formalized Reports
• Dashboards/scorecards
• Ad hoc/query/search/report creation
• Drill Down
• Forecasts, scenarios, models
Business Intelligence in the Enterprise
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Management Information SystemsManagement Information SystemsChapter 12 Enhancing Decision MakingChapter 12 Enhancing Decision Making
Business Intelligence in the Enterprise
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Management Information SystemsManagement Information SystemsChapter 12 Enhancing Decision MakingChapter 12 Enhancing Decision Making
Business Intelligence in the Enterprise
Examples of BI applications– Predictive analytics
• Use patterns in data to predict future behavior• E.g. Credit card companies use predictive
analytics to determine customers at risk for leaving
– Data visualization• Help users see patterns and relationships that
would be difficult to see in text lists
– Geographic information systems (GIS)• Ties location-related data to maps
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Management Information SystemsManagement Information SystemsChapter 12 Enhancing Decision MakingChapter 12 Enhancing Decision Making
Business Intelligence in the Enterprise
Management Strategies for Developing BI and BA Capabilities
One-stop integrated solution– Hardware firms sell software that run optimally on
their hardware
– Makes firm dependent on single vendor – switching costs
Multiple best-of-breed solution– Greater flexibility and independence
– Potential difficulties in integration
– Must deal with multiple vendors
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Management Information SystemsManagement Information SystemsChapter 12 Enhancing Decision MakingChapter 12 Enhancing Decision Making
How Can You Close the Deal with Donors?
Read the Window on Organizations, and then answer the following questions1.Identify and describe the problem discussed in the case.2.How do business intelligence systems provide a solution to this problem? What are the inputs and outputs of these systems?3.What management, organization, and technology issues have to be addressed by this solution?4.How successful is this solution? Explain your answer.5.Should all not-for-profits use such a data-driven approach to fundraising? Why or why not?
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Management Information SystemsManagement Information SystemsChapter 12 Enhancing Decision MakingChapter 12 Enhancing Decision Making
Decision Support for Operational and Middle Management
• Support for Semistructured Decisions• Decision Support Systems (DSS)• Sensitivity Analysis
Business Intelligence Constituencies
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Management Information SystemsManagement Information SystemsChapter 12 Enhancing Decision MakingChapter 12 Enhancing Decision Making
Business Intelligence Constituencies
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Management Information SystemsManagement Information SystemsChapter 12 Enhancing Decision MakingChapter 12 Enhancing Decision Making
Business Intelligence Constituencies
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Management Information SystemsManagement Information SystemsChapter 12 Enhancing Decision MakingChapter 12 Enhancing Decision Making
Decision Support for Senior Management: • Balanced Scorecard
• Key Performance Indicators• Enterprise Performance Management
Models
Business Intelligence Constituencies
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Management Information SystemsManagement Information SystemsChapter 12 Enhancing Decision MakingChapter 12 Enhancing Decision Making
Business Intelligence Constituencies
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Management Information SystemsManagement Information SystemsChapter 12 Enhancing Decision MakingChapter 12 Enhancing Decision Making
Group decision support systems (GDSS)• Interactive system to facilitate solution of unstructured
problems by group of decision makers
• Hardware – computer and networking hardware, overhead projectors, display screens
• GDSS software collects, documents, ranks, edits and stores participant ideas, responses
• May require facilitator and staff
• Enables increasing meeting size and increasing productivity
• Promotes collaborative atmosphere, guaranteeing anonymity
• Follow structured methods for organizing and evaluating ideas and preserving meeting results
Business Intelligence Constituencies
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Management Information SystemsManagement Information SystemsChapter 12 Enhancing Decision MakingChapter 12 Enhancing Decision Making
Piloting Valero with Real-Time Management
Read the Window on Management, and then answer the following questions:1.What management, organization, and technology issues had to be addressed when developing Valero’s dashboard?2.What measures of performance do the dashboards display? Give examples of several management decisions that would benefit from the information provided by Valero’s dashboards.3.What kinds of information systems are required by Valero to maintain and operate its refining dashboard?
Continued …
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Management Information SystemsManagement Information SystemsChapter 12 Enhancing Decision MakingChapter 12 Enhancing Decision Making
Piloting Valero with Real-Time Management
Read the Window on Management, and then answer the following questions (cont.)
4.How effective are Valero’s dashboards in helping management pilot the company? Explain your answer.5.Should Valero develop a dashboard to measure the many factors in its environment that it does not control? Why or why not?
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Enhancing Enhancing Decision Decision MakingMaking
Enhancing Enhancing Decision Decision MakingMaking
CHAPTER TWELVE