Laudon

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CHAPTER 12. ENHANCING MANAGEMENT DECISION MAKING
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LEARNING OBJECTIVES

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

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LEARNING OBJECTIVES

• DEMONSTRATE HOW DSS GDSS ENHANCE
  DECISION-MAKING
• DESCRIBE CAPABILITIES OF EXECUTIVE SUPPORT
  SYSTEMS (ESS)
• ASSESS BENEFITS OF ESS

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MANAGEMENT CHALLENGES

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

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DECISION SUPPORT SYSTEMS (DSS)

• MANAGEMENT LEVEL COMPUTER SYSTEM COMBINES DATA,
  MODELS, USER - FRIENDLY SOFTWARE FOR
  SEMISTRUCTURED UNSTRUCTURED DECISION MAKING

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DECISION SUPPORT SYSTEM

• MODEL DRIVEN DSS Uses models for what-if and
  other analysis
• DATA-DRIVEN DSS Allows extraction, analysis of
  information from databases

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DECISION SUPPORT SYSTEM
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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

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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

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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

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DECISION SUPPORT SYSTEM
EXAMPLES

• AMERICAN AIRLINES Price route selection
• EQUICO CAPITAL CORPORATION Investment evaluation
• GENERAL ACCIDENT INSURANCE Customer buying
  patterns, fraud detection

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DECISION SUPPORT SYSTEM
EXAMPLES

• BANK OF AMERICA Customer profiles
• FRITO-LAY Price, advertising, promotion
  selection
• BURLINGTON COAT FACTORY Store location,
  inventory mix
• NATIONAL GYPSUM Corporate planning forecasting

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GROUP DECISION-SUPPORT SYSTEM (GDSS)

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

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TOOLS OF GDSS

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

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TOOLS OF GDSS

• STAKEHOLDER IDENTIFICATION ANALYSIS TOOLS
• POLICY FORMATION TOOLS
• GROUP DICTIONARIES

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ELECTRONIC MEETING SYSTEM (EMS)

• COLLABORATIVE GDSS Uses information technology
  to make group meetings more productive
  facilitates communication decision making

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HOW GDSS ENHANCED DECISION MAKING

• BENEFITS
• Improved pre-planning
• Increased participation
• Open, collaborative atmosphere
• Idea generation free of criticism
• Evaluation objectivity
• Idea organization evaluation

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HOW GDSS ENHANCED DECISION MAKING

• BENEFITS
• Setting priorities decision making
• Documentation of meetings
• Access to external information
• Preservation of organizational memory

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EXECUTIVE SUPPORT SYSTEMS (ESS)

• STRATEGIC INFORMATION SYSTEM DESIGNED FOR
  UNSTRUCTURED DECISION MAKING THROUGH ADVANCED
  GRAPHICS AND COMMUNICATIONS

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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

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EXECUTIVE SUPPORT SYSTEMS

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

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EXECUTIVE SUPPORT SYSTEMS

• EXAMPLES
• SUTTER HOME WINERY Business intelligence on
  salespeople, distributors, retailers
• ROYAL BANK OF CANADA Portfolio Query System
  provides risk information
• U.S. GENERAL SERVICES ADMINISTRATION Quick, easy
  view of assets

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Connect to the INTERNET
Laudon/Laudon Web site http//www.prenhall.co
m/laudon Additional Internet Resources related
to this chapter http//dssresources.com newsco
mp.databases.olap http//www.datawares.com
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CHAPTER 12. ENHANCING MANAGEMENT DECISION MAKING