BUSINESS INFO SYSYTEMS Chapter 2.docx
DepartmentInformation Technology Management
Course CodeITM 102
BUSINESS INFO SYSYTEMS
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
2. People must make decisions quickly
Time is of the essence and people simply do not have time to sift through all the
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
Occurs in situations in which no procedures or rules exist to guide decision makers
toward the correct choice
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
How will a recession over the next year’s 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
5-year forecast planning
Managerial decision making
Employees evaluate company operations to identify, adapt to, and leverage change
Occur in situations in which a few established processes help to evaluate potential
solutions, but not enough to lead to a definite recommended decision
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
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?
Pricing & profitability
Sales analysis by region
Operational decision making
Employees develop, control, and maintain core business activities required to run the day-to-day
Situations where established processes offer potential solutions
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?
Training & development
Accounts payable & receivable
Employee record keeping
Metrics – Measurements that evaluate results to determine whether a project is meeting its goals
•Common Types -
–KPIs – Key Performance Indicators
–Efficiency and Effectiveness