Transcript Systems Support to Operations and Decision Making

Asper School of Business - MBA Program
MIS 6150 Management of
Information Systems & Technology
April-June 2009
Instructor: Bob Travica
Class 5
Systems Support Decision
Making
Updated May 2009
6150 Management of Information
Systems and Technology
Outline
• How We Usually Think about Decision Making/Problem Solving
(Rational, scientific model; our analytical model)
• How Decision Making Usually Happens (3 models)
• IT/IS Change and Decision Making
• Decision Making Systems (problem types, system types,
capabilities & limitations)
• Messages for change leadership
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How We Usually Think about Decision Making: Rational Model
1. Identify problem
? i
5. Evaluate/Adjust
solution
1
4. Implement
solution
%
%
2. Create optional
solutions
P
0
3. Select best solution
3
(Simon, 1950s)
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How Decision Making Usually Happens
Satisfycing decision making
•
Assumption: Decisional making made under significant constraints
•
Making a choice that is good enough
•
Simon supplanted Rational Model; necessary evil due to
human & organizational limitations ):
?
?
• Define the problem the best you can in the circumstances
• Consider some alternative solutions
• Select the first alternative that meets some important
evaluation criteria (“good enough”)
More
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Zig-Zag Decision Making (“Muddling Through”)
• Assumption: Politics key factor in decision making.
A
•
Lindblom; public organizations – different agendas, competition
for budgets, political coalitions)
B
C
A’
• What is the problem? Different things for different groups!
• Problem defining is a political process, result of maneuvering
• Alternative solutions defined tentatively
• Implement some part of one solution. If blocked, turn to
alternative solution; later might be back to the first one.
More
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Garbage Can Decision Making
• Assumption: Organizations as soap boxes of limitations
and opportunities.
Problems
(new & old)
Decision Makers
Resources
Opportunities
Solutions
(old & new)
Limitations
Blockages
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IT/IS Change and Decision Making
Obstructs existing decision makers
and promote new ones
(e.g., defeat of divisional
accountants by centralized
accounting with a new system)
Breaks against establishment
(e.g., EMR system in
Quebec hospitals)
IT/IS
Reinforces existing decision making power
(e.g., computerization of
American city administration)
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Decision Making Systems and Two Types
of Problems
Management Hierarchy
Ill-structured Problems:
Unstable context
Atypical, Discrete issues
Incomplete information
Ambiguous decision procedure
Well-structured Problems :
Stable context
Common, Repeatable issues
Most information accessible
Known decision procedure
Controlling inventory
Low
New product Planning
Uncertainty
6150 Management of Information Systems and Technology
R+D projects
High
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Management Hierarchy
Types of Systems for Decision Making
Executive
Management Executive
Support
Systems
Mid-Level Management –
Decision Support Systems
Supervisory Level –
Transactions Processing Systems &
Reporting Systems (old name: MIS)
Western Digital mini case – diagram of systems hierarchy
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Transaction Processing Systems (TPS)

Information foundation in organizations. Source for Reporting
systems and others up the hierarchy.

TPS records data on daily, routine activities (transactions, single
events) – data management via Database Systems (Ch. 7)

Examples: time at/out of work, purchases, sales, inventory
payroll, customer call…

TPS is indispensable for monitoring operations
Inventory
Sales
Purchases
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Reporting Systems
(old name: Management Information Systems)

Extends TPS, querying and reporting modules in databases
systems (information management)

RS delivers scheduled, summary reports or exception reports
(deviations from routine operations)

Examples: master case, Western Digital

RS focuses on what happened in organization

RS improves control, operational efficiency, and
operational planning
Inventory
Sales
Purchases
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Decision Support Systems
 Supports higher Mgmt levels, ill-structured problems; Fig. 12-1
 DSS uses data from RS, and external systems
 Model Component: Processes data using different
transformation methods (optimization, simulation, data mining –
Major Services Co., Harrah’s, Real-time CRM);
 DSS focus: Mid-range future, organization & environment
 DSS contributes to mid-range forecasting and planning and effectiveness in
decision making
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Executive Support Systems

Non-routine decision-making (strategic, long-range,
entrepreneurial decisions, disturbance handling)

Use visual information of key summary information (e.g., finance ratios)

Must be easy to use

Uses data from within organizations (RS, DSS) and outside (more than DSS)

ESS has drill-down capability to find what is behind summary information

Organization’s status reports (“dashboards” – Western Digital), environment
scans

ESS Contributes to executives’ effectiveness, right strategic moves
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Decision Making Cycle and Systems Support
1. Identify problem (collect information via RS &
via DSS, ESS for strategic decisions;
GDSS for locating/framing
problem)
? i
5. Evaluate/Adjust
solution
1
4. Implement
solution
%
%
2. Create optional
solutions (DSS, ESS)
P
0
3. Select best solution
(DSS, ESS)
3
• Decision making always requires human intelligence.
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Messages for Change Leadership
• Manage Obsolescence – do not let it manage you/your company.
• Make a change while you can manage the transition – not when
you reach a crisis.
• If a company pretends to be branded a technology innovator, it
needs to stay continually on the technology edge.
• Sometimes when a big technology change is due, one can’t
manage by consensus and must keep decisions at executive level.
• For transaction processing/reporting systems, consider broader
options – buy, buy/build/customize, outsource.
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Systems and Technology
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