10 Decision Support Executive Information Systems

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Information Systems

Foundations of Information Systems

Vladimir Zwass

Decision Support & Executive Information Systems

First Edition

Irwin/McGraw-Hill

With Annotations by Wahono With Annotations by Wahono

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MS PowerPoint 4.0 Presentation

1. Discuss the types of problems that can be solved with the assistance of decision support systems (DSS).

2. Explain what are the models used in DSS.

3. Compare and contrast the “what-if” and goal-seeking modes of DSS use.

4. Explain the relationship among the three principal components of a DSS.

5. Relate the principal classes of DSS to the problems that call for DSS assistance.

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MS PowerPoint 4.0 Presentation

6. Specify three levels of DSS technology.

7. Identify and compare the three approaches to building a DSS.

8. Define group decision support systems (GDSS) and specify their main features.

9. Define executive information systems (EIS) and describe what can be accomplished using them.

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When Should You Use the Decision Support

Approach?

When Should You Use the Decision Support

Approach?

• Decision Support Systems (DSS)

– Interactive information systems

– Analytical Models

– Access to Databases

– These systems support the decision making process

– DSS are flexible

– Personal DSSs may be developed

» End User tools

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When Should You Use the Decision Support

Approach?

When Should You Use the Decision Support

Approach?

• The Problems that DSSs Help Solve

– The principal domain is support of decision making

» Semistructured problems

• Needing Computer Support

» Unstructured problems

• Providing factual grounding

» An ill-structured problem contains both elements of semistructured and unstructured problems

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Capabilities of Decision Support Systems

• A model is a representation

– Developed for a specific purpose

– An abstraction

– A simplification

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Intelligence

Design

Choice

Implementation

Look for Problem or Opportunity Define and Analyze the Problem to Be Solved

Develop Alternative Solutions

Select a Satisfactory Solution

Implement and Track the Solution Review

Previous Steps

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Capabilities of Decision Support Systems

• Scenario Generation and Goal Seeking With a DSS

1. What-If Mode- Developing scenarios for solution with the assistance of information systems (DSS) 2. Goal-Seeking Mode- Establishing the input

factors necessary to achieve specified goals (DSS)

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Capabilities of Decision Support Systems

• Using DSS in the Decision Making Process

1. Intelligence- A search of the environment is made to find and define the problem or an opportunity 2. Design- Several alternative solutions are

developed

3. Choice- Alternatives are compared

4. Implementation- Solution is implemented and tracked, and improvements made

• Note: Each of these steps may require backing up

to a preceding one to redefined the problem or select a better solution

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Capabilities of Decision Support Systems

• Features of DSS

1. Support decision making in ill-structured situations when problems are not able to be computerized

2. Help to rapidly obtain quantitative results needed to reach a decision

3. Operate in the ad hoc mode to meet the needs of the user

4. Support modification of the models 5. Foster high quality decision making

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Capabilities of Decision Support Systems

(Continued)

Capabilities of Decision Support Systems

(Continued)

6. Facilitate the implementation of decisions 7. Support group decision making

8. Be user friendly

9. Give managers the opportunity to better understand their business

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Capabilities of Decision Support Systems

• Limitations of Using Spreadsheets as DSS Models 1. Limited in data handling capabilities

2. Cannot work with large databases

3. Don not allow for the construction of more complex models

4. Modifications are difficult to keep updated when used by numerous people (Can lock the

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Components of DSS

1. Data Management Subsystem 2. Model Management Subsystem

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Components of DSS:

The Data Management Subsystem

Components of DSS:

The Data Management Subsystem

• Supplies data to which the models can be applied

• Database extract procedures are specified by a specialist

• Data warehouses support organizational DSS

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Components of DSS:

The Model Management Subsystem

Components of DSS:

The Model Management Subsystem

• Maintain the libraries of models

• Explore the influence of various factors on outcomes (a process known as sensitivity)

• What-if analysis

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Components of DSS:

The Dialog Management Subsystem

Components of DSS:

The Dialog Management Subsystem

• Supports the use in applying models to data

• Multiple forms of input and output

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Capabilities They Offer

Data

Management Data Management

for Retrieval Data Extraction from Internal and External Databases

Model Management

Creation,

Maintenance, and Use of Models Dialog Management Menus, Icons, Natural Language, Graphics

DSS on a Computer Platform

Human Decision Maker

Human Decision Maker User

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What DSS Can Do For You: Classification of DSS

1. Data access systems

• User friendly ad hoc access

• Open a database

2. Data analysis systems

• Analyze historical and current data, either on demand (ad hoc) or periodically

• Summarizing the firm’s performance

3. Forecast oriented data analysis systems

• Develop product plans, market segment forecasts, sales forecast, and analysis of competitive systems

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What DSS Can Do For You: Classification of DSS:

(Continued)

What DSS Can Do For You: Classification of DSS:

(Continued)

5. Systems based on representational models

• Dependence between a controllable variable and an outcome

• _{Probabilistic results} • _{Risk analysis models}

6. Systems based on optimization models

• _{Developed by management scientists to determine} optimal allocation of resources or best possible schedules

7. Systems with suggestion models

• Narrow domains of knowledge combined with DSS with an expert system

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Building a Decision Support System

1. Specific DSS

• Actual system that a manager works with during the decision process

• DSS must be customized to the environment with extensive modifications

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Building a Decision Support System (Continued)

2. DSS Generators

• A software package

• _{Capabilities are programmed into the generator}

3. DSS Tools

• Programming languages to access arrays of data, spreadsheet packages, statistical packages, and DBMS with a query facility

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Building a Decision Support System:

How a DSS is Developed

Building a Decision Support System:

How a DSS is Developed

• 1. The Quick Hit Approach

1. Most DSS come into being this way

2. Most DSSs are built for the personal use of decision maker

3. Initiative is from the individual manager making the DSS either built by the manager or a less

formal DSS group

4. Use a DSS generator- spreadsheets

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Building a Decision Support System:

How a DSS is Developed

Building a Decision Support System:

How a DSS is Developed

• 2. Traditional Life Cycle Development 1. Large software systems

2. Detailed system planning and analysis,

progressing through the design stages followed by coding and testing, and then implementation 3. Process is lengthy with no partial system to work

before the system is complete

4. Complex systems for many users with

informational requirements established early in the analysis process

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Building a Decision Support System:

How a DSS is Developed

Building a Decision Support System:

How a DSS is Developed

• 3. Iterative Development

1. Develop a prototype of the system

2. Creation of a prototype and its progressive refinement

3. The development of the system is completed the future user

4. The iterative, repetitive process of prototype refinement follows

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Problem Definition by Users and Developers

Development of Initial Prototype Prototype/DSS Evaluation Prototype/DSS Modification Validation and

Documentation of DSS Are Current

Requirements Satisfied? no

DSS Ready for Use Develop-ment Loop Adaptation Loop yes

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Group Decision Support Systems

• Designed to support group communication and decision processes within a group

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Group Decision Support Systems

• Creativity in Group Decision Making

– Brainstorming- A group decision making technique to generate ideas

– Synectics- A group decision making technique where only the best ideas are further considered

– Nominal Group Technique- Addresses the needs of groups in which there are opinions, defensive

arguments; participants work alone, and then circulate their ideas for evaluation

– Delphi Technique- A method for soliciting the opinions of a group of experts and arrive at a consensus of an anonymous process

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Group Decision Support Systems

• Capabilities of GDSS

– Share information

– Exchange ideas

– Compare alternative solutions with the use of models and data

– Vote and negotiate in order to arrive at a consensus

– Need software modules acting as tools

– _{Members of a group work simultaneously and}

anonymously

• Capabilities of GDSS

– Share information

– _{Exchange ideas}

– Compare alternative solutions with the use of models and data

– Vote and negotiate in order to arrive at a consensus

– Need software modules acting as tools

– Members of a group work simultaneously and anonymously

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Group Decision Support Systems

1. Level 1 GDSS- Facilitate communication among group members

– Technology to communicate- decision rooms, remote conferencing, or both

2. Level 2 GDSS- Communication capabilities and support

3. Level 3 GDSS- Research stage formalizing the desired patterns for group interaction including expert systems

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Group Decision Support Systems: Characteristics

1. Communication components including electronic mail, teleconferencing, or computer facilities

2. Facilities for prompting and summarizing the votes and ideas of participants

3. Features of anonymity of interactions, layout of the

decision rooms, the dialog subsystem, should encourage the formation of a cohesive group with active participation 4. Include models for group decision making processes

5. Obtain the protocol for group decision making processes for later analysis

6. Should support a facilitator for the orderly progress of a session

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Executive Information Systems

1. Provide internal and external information to top managers in a highly summarized and convenient form

2. EIS provide immediate and easy access to

information reflecting the key success factors of the company and its units.

3. “User seductive” or user friendly interfaces that present information through color graphics or video so that trends may be grasped at a glance

4. EIS provide access to a variety of databases, both internal and external through a uniform interface

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Executive Information Systems (Continued)

5. Both current status and projections should be available from EIS.

6. An EIS should allow tailoring to the preferences of the users

7. EIS should offer the capability to “drill down” into the data

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Executive Information Systems

1. EISs primarily assist top management in uncovering a problem or an opportunity.

2. Analysts can subsequently use a DSS to suggest a solution to the problem.

3. EIS relies on access to the data. EISs may work on the extraction principal, as DSSs do, or they may be given access to the actual corporate

databases or warehouses.

4. EISs can reside on personal workstations or servers.

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Executive Information Systems

• _{Developing EIS}

– Track Critical Success Factors (CSF)

» Vital indicators of performance

» _{Usinf the drill-down capability, more detailed information}

can be obtained

– Strategic Business Objectives

» _Identified

» _Prioritized

» Defined

» _Planned

» Report on CSFs

» Thereby an EIS is not too closely aligned to a particular

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Contrasting EIS and DSS

• DSS are primarily used by middle and lower level managers to project the future

• EIS primarily support the control needs of higher level management

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User Task Primary Support Areas

EIS Executive

Analyst/ Middle Manager

Flow of Problems

DSS

Problem/Opportunity Discovery and

Assessment

Seeking Problem Solution:

Decision-Making Process

Monitoring and Control,

Strategic Planning

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Key Terms in Chapter 10

Decision Support System (DSS)

Ill-Structured Problem Model

“What-If” (scenario) analysis Goal Seeking

Decision-Making Process

Data Management Subsystem Model Management Subsystem Dialog Management Subsystem Accounting Model

Representational Model Optimization Model

Suggestion Model DSS Generator

Decision Support System (DSS)

Ill-Structured Problem Model

“What-If” (scenario) analysis Goal Seeking

Decision-Making Process

Data Management Subsystem Model Management Subsystem Dialog Management Subsystem Accounting Model Representational Model Optimization Model Suggestion Model DSS Generator Quick-Hit Development Life-Cycle Development Iterative Development (Prototyping) Prototype

Group Decision Support System (GDSS)

Brainstorming Synectics

Nominal Group Technique Delphi Technique

Executive Information System (EIS)

Critical Success Factors (CSF) Strategic Business Objectives Methodology Quick-Hit Development Life-Cycle Development Iterative Development (Prototyping) Prototype

Group Decision Support System (GDSS)

Brainstorming Synectics

Nominal Group Technique Delphi Technique

Executive Information System (EIS)

Critical Success Factors (CSF) Strategic Business Objectives Methodology

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Executive Information Systems (Continued)

5. Both current status and projections should be

available from EIS.

6. An EIS should allow tailoring to the preferences

of the users

7. EIS should offer the capability to “drill down” into

the data

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Executive Information Systems

1. EISs primarily assist top management in

uncovering a problem or an opportunity.

2. Analysts can subsequently use a DSS to suggest

a solution to the problem.

3. EIS relies on access to the data. EISs may work

on the extraction principal, as DSSs do, or they

may be given access to the actual corporate

databases or warehouses.

4. EISs can reside on personal workstations or

servers.

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Executive Information Systems

• _{Developing EIS}

– Track Critical Success Factors (CSF)

» Vital indicators of performance

» _{Usinf the drill-down capability, more detailed information}

can be obtained

– Strategic Business Objectives

» _Identified » _Prioritized » Defined

» _Planned

» Report on CSFs

» Thereby an EIS is not too closely aligned to a particular sponsor

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Contrasting EIS and DSS

• DSS are primarily used by middle and lower level

managers to project the future

• EIS primarily support the control needs of higher

level management

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User

Task

Primary Support

Areas

EIS

Executive

Analyst/

Middle

Manager

Flow of Problems

DSS

Problem/Opportunity Discovery and

Assessment

Seeking Problem Solution:

Decision-Making Process

Monitoring and Control,

Strategic Planning

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Key Terms in Chapter 10

Decision Support System

(DSS)

Ill-Structured Problem Model

“What-If” (scenario) analysis Goal Seeking

Decision-Making Process

Data Management Subsystem Model Management Subsystem Dialog Management Subsystem Accounting Model

Representational Model Optimization Model

Suggestion Model DSS Generator

Decision Support System (DSS)

Ill-Structured Problem Model

“What-If” (scenario) analysis Goal Seeking

Decision-Making Process

Group Decision Support System (GDSS)

Brainstorming Synectics

Nominal Group Technique Delphi Technique

Executive Information System (EIS)

Critical Success Factors (CSF) Strategic Business Objectives Methodology Quick-Hit Development Life-Cycle Development Iterative Development (Prototyping) Prototype

Group Decision Support System (GDSS)

Brainstorming Synectics

Nominal Group Technique Delphi Technique

Executive Information System (EIS)

Critical Success Factors (CSF) Strategic Business Objectives Methodology