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Lecture 2

BUSINESS INFO SYSYTEMS Chapter 2.docx


Department
Information Technology Management
Course Code
ITM 102
Professor
Ozgur Turetken
Lecture
2

Page:
of 7
BUSINESS INFO SYSYTEMS
CHAPTER TWO
Reasons for growth of decision-making information systems
1. People need to analyze large amounts of information
Improvements in technology itself, innovations in communication, and
globalization have resulted in a dramatic increase in the alternatives and
dimensions people need to consider when making a decision or appraising an
opportunity.
2. People must make decisions quickly
Time is of the essence and people simply do not have time to sift through all the
information manually.
3. People must apply sophisticated analysis techniques,
such as modeling and forecasting, to make good decisions
Information systems substantially reduce the time required to perform these
sophisticated analysis techniques.
Information Levels throughout an organization
Operational - people perform daily tasks such as processing transactions
Managerial - deal less with the details (“finer” information) and more with meaningful
aggregations of information (“coarser” information) that help them make broader
decisions for the organization
Strategic - Granularity refers to the extent of detail in the information (means fine and
detailed or “coarse” and abstract information)
Strategic decision making
Managers develop overall strategies, goals, and objectives
Unstructured decisions
Occurs in situations in which no procedures or rules exist to guide decision makers
toward the correct choice
Strategic Examples:
How will changes in employment levels over the next three years impact the company?
What industry trends are worth analyzing?
What new products and new markets does the company need to create competitive
advantages?
How will a recession over the next years impact business?
What measures will the company need to prepare for due to new tax laws?
What are some examples of types of systems or activities at the strategic level?
Sales trend forecasting
Budget forecasting
Profit planning
5-year forecast planning
Managerial decision making
Employees evaluate company operations to identify, adapt to, and leverage change
Semi-structured decisions
Occur in situations in which a few established processes help to evaluate potential
solutions, but not enough to lead to a definite recommended decision
Examples:
Who are our best customers by region, by sales representatives, by product?
What are the sales forecasts for next month? How do they compare to actual sales for last
year?
What was the difference between expected sales and actual sales for each month?
What was the impact of last month’s marketing campaign on sales?
What types of ad hoc or unplanned reports might the company require next month?
What are some examples of types of systems or activities at managerial level?
Sales management
Pricing & profitability
Contract analysis
Production costs
Sales analysis by region
Inventory
Audits
Operational decision making
Employees develop, control, and maintain core business activities required to run the day-to-day
operations
Structured decisions
Situations where established processes offer potential solutions
Operational Examples:
How many employees are out sick?
How many products need to be made today?
What are next week’s production requirements?
How much inventory is in the warehouse?
How many problems occurred when running payroll?
Which employees are on vacation?
What are some examples of types of systems or activities at Operational level?
Payroll
Training & development
Accounts payable & receivable
Employee record keeping
Scheduling
Order processing
Order tracking
Metrics – Measurements that evaluate results to determine whether a project is meeting its goals
Common Types -
KPIs – Key Performance Indicators
Efficiency and Effectiveness