ADMS2511 - Chapter 11 notes

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Department
Administrative Studies
Course
ADMS 2511
Professor
Cristobal Sanchez- Rodriguez
Semester
Fall

Description
Chapter 11 – Managerial Support Systems MANAGERS AND DECISION MAKING – management is a process by which organization achieves its goals through the use of resources. The resources are inputs and goals are the outputs. Managers’ success is the ratio between inputs and outputs which indicates his productivity. The Manager’s Job and Decision Making – managers have three basic roles - Interpersonal roles - Informational roles - Decisional roles Recently IS have been developed that support all three roles. A decision consists of intelligence, design, and choice. The intelligence phase examine a situation and identify the problem. In the design phase, a model is constructed to simplify the problem. And choice phase is selecting a solution. Why Managers Need IT Support – they need it to make a good decision and IT support ensures it. Decision making is affected due to the following trends: • The number of alternatives is increasing due to technology making it hard to explore relevant options. • Decisions are increasingly made under time pressure. Processing of information sometimes cannot be done fast enough • A sophisticated analysis needs to be conducted to make a good decision which also requires modelling. • While it is easy to communicate over large distances, bringing people together for decision-making could be hard. What Information Technologies Are Available to Support Managers? – These technologies are called business intelligence (BI) systems. They are related to data warehousing. A Framework for Computerized Decision Analysis – two major dimensions of BI systems are: • Problem structure – structured decisions are routine problems for which solutions exist, for e.g. minimizing costs. Unstructured decisions are ones that are complex and there are not simple solutions. Human intuition often plays the resolving role, for e.g. hiring, and choosing new offerings. Semi-structured problems are for which some processes are structured. Examples are evaluating employees, marketing budgets etc. • The nature of Decisions – these are be categorized into o Operational control – execution of tasks efficiently o Management control – acquiring and using resources efficiently o Strategic planning – long-range plans for growth and resource allocation • The Decision Matrix – the three classes of problems and three broad categories of the nature of decision can be combined to form a matrix. Lower-level managers perform the structured operations and middle and professionals are in charge of the unstructured ones. BUSINESS INTELLIGENCE – data that has been organized in data warehouses can be further analyzed. BI systems help make better business decisions. Vendors offer such software under BI software. BI applications provide data analysis tools and easily accessing information in a structured format. Organizations use BI application to improve their performance. Corporate performance management (CPM) is the area of business intelligence involved with monitoring and managing an organization’s performance according to key performance indicators. Multi-dimensional Data Analysis (Online Analytical Processing) – OLAP is analyzing complex data stored in data warehouses. Multidimensional analysis provides the analysts with a detailed view of a situation. This allows to quickly answer business questions. Data Mining – searching for valuable business information in a large database, warehouse or data mart. This can help to predict trends and identifying previously unknown patterns. While multi-dimensional analysis helps us understand what is happening, data mining helps us understand WHY it is happening and makes predictions about the future. For e.g. a stolen card used somewhere other than the normal places of shopping or not sending special offers to customer who have consistently not responded before etc. Decision Support Systems – DSS combine models and data to solve semi-structured and some unstructured problems. DSS employ mathematical models. Their capabilities are: • Sensitive analysis – study of the impact that change in one part of a decision making model has on other parts. Allows system to adapt to
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