Chapter 6:
Information and
Decision Support
Systems
Topics:
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Decision Making and Problem Solving
Management Information Systems (MIS)
Decision Support Systems (DSS)
Group Decision Support Systems (GDSS)
Executive Support Systems (ESS)
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One Sentence Summary
 MIS’s support decision making for daily
operations while DSS’s support decision
making for specific unique and difficult
decisions.
MIS
DSS
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Chapter 6.1
Decision Making &
Problem Solving
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Key Terms
decision-making phase
intelligence stage
design stage
choice stage
problem solving
implementation stage
monitoring stage
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programmed decisions
nonprogrammed decisions
optimization model
satisficing model
heuristics
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Decision Making & Problem Solving
Decision
Making
Problem
Solving
Intelligence Stage
Potential Problems and
opportunities are identified
and defined
Design Stage
Alternative solutions to the
problem are developed
Choice Stage
Select a course of
action
Implementation
Solution put into
effect
Monitoring
Evaluate the
implementation
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Decision Types
 Programmed decisions
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a decision made using a rule, procedure, or
quantitative method.
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Easy to computerize using traditional information
systems
 Non-programmed decisions
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decisions that deal with unusual or
exceptional situations
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Not easily quantifiable
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Problem Solving Approaches
 Optimization Model
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find the best solution, usually the one that will
beset help the organization meet its goals
 Satisficing Model
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find a good (but not necessarily the best)
solution to a problem
Heuristics:
Commonly accepted guidelines
or procedures that usually find a
good solution
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Chapter 6.2
Overview of Management
Information Systems
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Key Terms
scheduled reports
key-indicator report
demand reports
exception reports
drill-down reports
financial MIS
marketing MIS
• human resource MIS
• accounting MIS
• geographic information system (GIS)
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MIS
 Supports programmed decision making
 Give companies a competitive advantage by
providing the right information to the right
people in the right format and at the right
time.
 Provides managers with information and
support for effective decision making and
provides feedback on daily operations.
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Sources of Managerial
Information
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Outputs of a Management
Information System
 Scheduled report: produced periodically, or on
a schedule
 Key-indicator report: summary of the previous
day’s critical activities
 Demand report: developed to give certain
information at someone’s request
 Exception report: automatically produced when
a situation is unusual or requires management
action
 Drill-down report: provides increasingly
detailed data about a situation
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Figure 10.4
Figure 10.4 cont’d
Functional Aspects of the MIS
 Most organizations are structured along
functional lines or areas
 The MIS can be divided along functional lines to
produce reports tailored to individual functions
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Functional Aspects of the MIS
Figure 6.5: The MIS is an
integrated collection of
functional information
systems, each supporting
particular functional areas.
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Financial Management
Information Systems
 Financial MIS: provides financial information to
all financial managers within an organization
 Profit/loss and cost systems
 Auditing
 Uses and management of funds
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Human Resource Management
Information Systems
 Human resource MIS: concerned with activities
related to employees and potential employees of
an organization
 Needs and planning assessments
 Recruiting
 Training and skills development
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Other Management Information
Systems
 Accounting MIS: provides aggregate
information on accounts payable, accounts
receivable, payroll, and many other applications
 Geographic information system (GIS):
capable of assembling, storing, manipulating,
and displaying geographic information
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Chapter 6.3
Overview of Decision
Support Systems
Key Terms
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ad hoc DSS
institutional DSS
highly structured problems
semistructured or unstructured problems
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An Overview of Decision Support
Systems
 A DSS is an organized collection of people,
procedures, software, databases, and devices
used to support problem-specific decision
making and problem solving
 The focus of a DSS is on decision-making
effectiveness when faced with unstructured or
semistructured business problems
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Support for Different Decision
Frequencies
 Ad hoc DSS
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Deals with situations or decisions that come
up only a few times during the life of the
organization
 Institutional DSS
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deals with situation or decisions that occur
more than once, usually several times a year
or more.
Usually repeated and refined over the years
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Support for Different Problem
Structures
 Highly structured problems
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Straightforward and require known facts and
relationships
 Semistructured of unstructured problems
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Relationships among the data are not always
clear
Data may be a variant of formats
Data is often difficult to manipulate or obtain
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Chapter 6.4
Components of a
Decision Support System
Key Terms
• dialogue manager
• model base
• model management software (MMS)
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Components of a Decision Support
System
 Model base: provides decision makers access
to a variety of models and assists them in
decision making
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Financial models
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Statistical analysis models
Graphical models
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Spreadsheets often used
Charts, Maps
Project management models
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Timeline tracking of resources and tasks
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Components of a Decision Support
System
 Database
 External database access
 Access to the Internet and corporate intranet,
networks, and other computer systems
 Dialogue manager: allows decision makers to
easily access and manipulate the DSS and to
use common business terms and phrases
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Model Management
Software (MMS)
 MMS
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The software that coordinates the use of
models in a DSS
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Components of a DSS
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Figure 6.11: Conceptual Model of a DSS
Chapter 6.5
Group Support Systems
Key Terms
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group support system (GSS)
delphi approach
brainstorming
group consensus approach
nominal group technique
decision room
• virtual workgroups
• executive support system (ESS)
• strategic planning
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Group Support Systems
 Group support system (GSS)
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Consists of most elements in a DSS, plus
software to provide effective support in group
decision making
Also called group decision support system or
computerized collaborative work system
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Group Support Systems Components
Figure 6.12: Configuration of a GSS
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Decision-Making Support
 Delphi Approach
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Group decision makers are geographically
dispersed throughout the country or world
encourages diversity among group members
fosters creativity and original thinking
 Brainstorming
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Often consists of members offering ideas “off
the top of their heads”
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Decision-Making Support
 Group consensus approach
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Forces members in the group to reach a
unanimous decision
 Nominal group technique
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Encourages feedback from individual group
members, and the final decision is made by
voting, similar to the way public officials are
elected
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GSS Software
 Often called groupware or workgroup software
 Helps with joint workgroup scheduling,
communication, and management
 Examples: Lotus Notes, Microsoft’s NetMeeting,
Microsoft Exchange, NetDocuments Enterprise,
Collabra Share, OpenMind, TeamWare
 Some transaction processing and enterprise
resource planning packages include
collaboration software
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Characteristics of a GSS
 Special design
 Ease of use
 Flexibility
 Decision-making support
 Anonymous input
 Reduction of negative group behavior
 Parallel communication
 Automated record keeping
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GSS Alternatives
Figure 6.13: GSS Alternatives
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GSS Alternatives
Decision Room
Figure 6.14: The GSS Decision Room
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GSS Alternatives
Wide Area Decision Network
 Virtual Workgroups
 Teams of people who are located around the world
working on common problems
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Executive Support Systems (ESS)
 ESS
 A specialized DSS that includes all hardware,
software, data, procedures, and people used to
assist senior-level executives with the
organization
 Easy to use
 Drill down capabilities
 Access to external data
 Can help when uncertainty is high
 Future-oriented
 Linked to value-added processes.
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Layers of Executive Decision Making
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Capabilities of an ESS
 Support for Defining an Overall Vision
 Support for Strategic Planning
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The process for determining long-term
objectives by analyzing the strengths and
weaknesses of the organization, predicting
future trends, and projecting the future
development of new product lines
 Support for Strategic Organizing & Staffing
 Support for Strategic Control
 Support for Crisis Management
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Review
 The decision making process.
 MIS provides feedback on daily operations.
 5 types of MIS reports.
 MIS is used in functional units of an
organization.
 DSS supports problem-specific nonprogrammed decision making.
 GDSS and ESS
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Questions?
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