Transcript Decision Support Systems

Asper School of Business
9.614 Information Age Organizations
Part-Time MBA, April 2002
Instructor: Bob Travica
Class 5
Decision Support Systems
Chapter 12
9.614 Information Age Organizations
Instructor: Bob Travica
Outline
• Generic Problem Solving/Decision Making Model
• Specific Models
• IT/IS for Supporting Managerial Decision Making
• Organizational benefits
9.614 Information Age Organizations
Instructor: Bob Travica
Generic Decision Making Model
Define problem
Create possible solutions
(choices, options)
Select best solution)
Implement solution
More…
9.614 Information Age Organizations
Instructor: Bob Travica
Generic Decision Making Model
Define problem (what needs to be decided on, acted upon)
Define possible solutions (possible options of acting; information search, analysis)
Select solution (assess options on some criteria; compare, analyze past/future)
Implement solution (decide on related problems conducive to the
implementing the decision to start problem)
9.614 Information Age Organizations
Instructor: Bob Travica
Specific Decision Making Models
Scientific (“rational”; Simon):
• Define problem with certainty
• Define A & B options
• Select A or B so that the choice optimally meets criteria
• Implement the selection
The scientific (rational) model is close to the way we usually think
about decision making (go/no go decisions, optimal choices, etc.)
BUT…
Is it the way we always really make decisions?
More…
9.614 Information Age Organizations
Instructor: Bob Travica
Satisfycing decision making (Simon)
• Define problem with as much certainty as possible
• Create some optional solutions
• Evaluate options and pick the first option that meets most or
most important evaluation criteria (a “good enough” option)
• Cognitive, time & organizational limitations are reality
Incremental (doctors’ diagnosing; Etzioni):
• Define problem with some certainty
• Define A & optionally B
• Break A into pieces (A1…An);
• Implement A1, evaluate, implement A2,
• evaluate… maybe switch to B
9.614 Information Age Organizations
Instructor: Bob Travica
Specific Decision Making Models
Intuitive (“guts feeling”; less intensive information search than
in incremental):
• Define problem subjectively (certainty=?)
• Define A subjectively based on past experience
• Implement A
Zig-Zag (“muddling through”; Lindblom):
• Define problem with higher uncertainty
• Define tentatively A, B…n;
• Implement some A, if blocked some B, if blocked some A… n
9.614 Information Age Organizations
Instructor: Bob Travica
IT/IS for Supporting Decision Making
• Decision Support Systems (DSS; one instance is GDSS)
- support higher management levels
- problem definable with less certainty (“ill-structured”)
- build on Transaction Processing Systems (databases) &
Management Information Systems (reporting systems)
- beyond understanding past -- predict future
9.614 Information Age Organizations
Instructor: Bob Travica
DSS:
Data + Analysis Model + User Interface
•Database,
Datawarehouse/Datamart;
•Mostly internal sources
•Data format issues
•Mathematical formula
•Hybrid numerical+text
•Expert System (If-Then rules)
•Neural Nets
•Datawarehousing Analysis Tools
•Data Mining Tools
9.614 Information Age Organizations
Instructor: Bob Travica
•GUI, easy to use
•Graphing cap.
•Natural language
Executive Information Systems (EIS)
• Supports executives
• Special design features:
• Use more external information than DSS
• Drill-down capability (background of information)
Uses:
• Status Report (in/out of organization)
• Environmental Scanning (market trends, regulations…)
• Communications management
• Specialized tasks (e.g., longer range planning)
9.614 Information Age Organizations
Instructor: Bob Travica
Organizational Benefits
• Efficiency in decision making translates into
tangible operational benefit of savings on decision
makers work hours
• Effectiveness in decision making (quality of decision,
market responsiveness, competitive survival,
Accuracy of info for DM…) translates into strategic benefits
(tangible & intangible)
• Trade-offs between efficiency & effectiveness in DM
(e.g., perfecting info for DM increases effectiveness of DM
but decreases its efficiency)
9.614 Information Age Organizations
Instructor: Bob Travica