Management Information System

Kinds of Information System

 Decision Support Systems[DSS]:-

Decision Support Systems are an application Herbert Simon Model. As

explained earlier, the model has three phases, viz. Intelligence, Design and Choice.
The decision support system basically helps the information system in the
intelligence phase where the objective is to identify the problem and then go the
design phase for solution. The choice of selection criterion varies from problem to
problem. It is, therefore, required to go through these phases again and again till a
satisfactory solution is found. In the use of three phase cycle, you may use either
inquiry, analysis and models or accounting systems to come to a rational solution.

The decision support system helps in making a decision and also in its
performance evaluation. These systems can be used to validate the decision by
performing sensitivity analysis on various parameters of the problem.

In decision making we have two types-

1. Programmable decision making – because of its rule base structure, can

be computerized, as inputs, processing methodology, analysis and choice
of decision making are predetermined.

2. Non-programmable decision making – the rules are not fixed or

predetermined, and requires every time the user to go through the
decision-making cycle.

Types of Decision Support System:-

1. Status Inquiry Systems:-

The number of decisions in the operational management and some at

the middle management are such that they are based on one or two
aspects of a decision-making situation. It does not call for any
elaborate computations, analysis, choice, etc. for deicison-making. If
the status is known, the decision is automatic, i.e., the status and
solution is unique relation.

2. Data Analysis Systems:-

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These decision systems are based on comparative analysis, and use of

formula or an algorithm. But, these processes are not structured and,
therefore, vary. The cashflow analysis, the inventory analysis and the
personal inventory systems are examples of the analysis systems. The
use of simple data processing tools and business rules are required to
develop this system.

3. Information Analysis Systems:-

In this system, the data is analyzed and information reports are

generated. The report might be having exceptions as a feature. The
decision makers use these reports for assessment of the MRP systems
and examples of this system.

4. Accounting Systems:-

These systems are not necessarily for decision-making but they are
desirable to keep track of the major aspects of the business or a
function. The contents of these systems is more data processing
leading to formal reporting, with exceptions, if necessary. These
systems account items such as cash, inventory, personnel and so on a
relate it to a norm or norms developed by the management, for control
and decision.

5. Model Based Systems:-

These systems are simulation models or optimization models for

decision models for decision making. These decisions, generally, are
one time and infrequent and provide general guidelines for operation
or management. The product mix decision, the material mix, the job
scheduling rules, and the resource or asset of facilities planning
system are the examples.

DSS Models:-

DSS
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BEHAVIOURAL MANAGEMENT OPERATIONS

MODELS SCIENCE MODELS RESEARCH MODELS
1. Behavioural Models:-

These models are useful in understanding the behaviour among the

business variables. These decision maker can make decisions giving due regard to
such behavioural relationships.

The trend analysis, forecasting, and the statistical analysis models

belong to this category. The trend analysis indicated how different variables
behave in trend setting in the past and hence in the future. These types of models
are largely used in process control, manufacturing, agricultural sciences,
medicines, psychology and marketing. The behavioural analysis can be used to set
the points for alert, alarm and action for the decision maker.

2. Management Science Models:-

These models are developed on the principles of business management,

accounting and econometrics. In many areas of management, the proven methods
of management control are available which can be used for the management
decisions. There are also several management systems, which are converted into
the decision support system models.

Production planning and control, scheduling and loading systems are the
examples in Production management. Manpower planning and forecasting is the
example in Personnel management.

3. Operations Research[OR] Models:-

The Research models are mathematical models. These models represent

a real life problem situation in terms of the variables, contents and
parameters expressed in algebraic equations. Since, the models are
mathematical, there are solutions to these problems. In arriving the solution,
methods of calculus, matrix algebra, probability, and set theory are used.
These models have a clarity to the extent that each of them has a set of

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assumptions which must be true in real life. Further, if the assumptions are
valid, the solutions offered are realistic and practical, the model represents
the real life problem situations.

Some problems do not precisely fall in the category of the standard

OR models. In such cases, the problems are solved by using a simulation
approach. This approach uses a random occurrence of a large number of
events, determines the status of the system and evaluates its cost of
operations. This simulation techniques helps to assess the quality of the
facility design before the investment is made in building such facility.

Overview of a Decision-Support System:-

External
TPS Date

DSS
Database

DSS Software System Models

OLAP Tools Data Mining Tools

User
Interface

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User
Advantages of DSS:-

• Designed to facilitate solving complex problems; for group decision making.

• Uses 3 types of management like dialog management, database management
model base management to solve specific problem.
• Supports semistructred or unstructured decision making.
• Provides users with a flexible set of tools and capabilities for analyzing
important blocks of data.

Disadvantages of DSS:-

• DSS are very costly.

• DSS are used only for specific applications.
• DSS system will not give the ultimate solution.

 Group Decision – Support Systems [GDSS]:-

The DSS we have just described focus primarily on individual decision

making. However, so much work is accomplished in groups within firms that a
special category of systems called group decision-support [GDSS] has been
developed to support group and organizational decision making.

What is a GDSS ?

A group decision-support system [GDSS] is an interactive, computer-based

system used to facilitate the solution of unstructured problems by a set of decision
makers working together as a group. Tools for collaboration and Web-based
conferencing described earlier in this text support some group decision processes,
but their focus is primarily on communication. GDSS, however, provide tools and
technologies geared explicitly toward group decision making and were developed
in response to a growing concern over the quality and effectiveness of meeting.
The underlying problems in group decision making have been the explosion of
decision-maker meetings, the growing length of those meetings, and the increased
number of attendees. Estimates on the amount of a manager’s time spent in
meetings range from 35 to 70 percent.

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Components of GDSS:-

GDSS make meetings more productive by providing tools to facilitate

planning, generating, organizing, and evaluating ideas; establishing priorities; and
documenting meeting proceedings for others in the firm. GDSS consist of three
basic element: hardware, software tools, and people. Hardware refers to the
conference facility itself, including the room, the tables, and the chairs. Such a
facility must be physically laid out in a manner that supports group collaboration.
It also must include some electronic hardware, such as electronic display boards, as
well as audiovisual, computer and networking equipment.

GDSS software tools were originally developed for meetings in which all
participants are in the same room but they also can be used for networked meetings
in which participants are in different locations. Specific GDSS software tools
include the following:

 Electronic questionnaires aid the organizers in premeeting planning by

identifying issues of concern and by helping to ensure that key planning
information is not overlooked.
 Electronic brainstorming tools enable individuals, simultaneously and
anonymously, to contribute ideas on the topics of the meeting.
 Idea organizers facilitate the organized integration and synthesis of ideas
generate during brainstorming.
 Questionnaire tools support the facilitators and group leaders as they gather
information before and during the process of setting priorities.
 Tools for voting or setting priorities make available a range of methods from
simple voting, to ranking in order, to a range of weighted techniques of
setting priorities or voting.
 Stakeholder identification and analysis tools use structured approaches to
evaluate the impact of an emerging proposal on the organization and to
identify stakeholders and evaluate the potential impact of those stakeholders
on the proposed project.
 Policy formation tools provide structured support for developing agreement
on the wording of policy statements.
 Group dictionaries document group agreement on definitions of words and
terms central to the project.

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People refers not only to the participants but also to a trained facilitator and
often to a staff that supports the hardware and software. Together, these elements
have led to the creation of a range of different kinds of GDSS, from simple
electronic boardrooms to elaborate collaboration laboratories.

Over view of a GDSS Meeting:-

In a GDSS electronic meeting, each attendee has a workstation. The

workstations are networked and connected to the facilitator’s workstation and to
the meeting’s file server. All data that the attendees forward from their
workstations to the group are collected and saved on the file server. Whiteboards
are visible on either side of the projection screen. Many electronic meeting rooms
have seating arrangements in semicircles and are tiered in legislative style to
accommodate a large number of attendees. The facilitator controls the use of tools
during the meeting.

Attendees have full control of their own desktop computers. During the
meeting, all input to the integrated screens is saved on the file server and
participants work is kept confidential. When the meeting is completed, a full
record of the meeting (both raw material and resultant output) is available to the
attendees and can be made available to anyone else with a need for access. Figure
12-9 illustrates the sequence of activities at a typical electronic meeting along with
the types of tools used and the output of those tools.

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Group System Tools:-

Brainstorming
Idea Topic
Generation Commenter
Group Outliner

Idea Idea Organizer

Organizatio Issue Analyzer
n Group Writer
Session
Planning
Vote Selection
Alternative
Prioritizing Eval.
Questionnaire
Session Group Matrix
Manager

Policy Policy
Developme Formation
nt Stakeholder ID

Enterprise Analyzer
Graphical Browser
Group Dictionary
Brief Case
Organizational Access to information
Memory Personal productivity

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Capabilities of GDSS:-

• Can update or manipulate the database and also select data from database.
• Create special reports in a desired format.
• Perform calculations and execute aggregation of data.
• Produce reports, memos, letters and resumes from information available in
the database.
• Signal exceptions.
• Construct simple mathe4matical models that describe a problem.
• Perform financial analysis.
• Conduct optimization.
• Perform simulation.

 Executive Support Systems[ESS] or Executive Information System[EIS]:-

Executive support systems [ESS], which we introduce in Chapter 2,

help managers with unstructured and semistructured problems by focusing on
the information needs of senior management. Combining data from internal and
external sources, ESS help senior executives monitor organizational
performance, track activities of competitors, spot problems, identify
opportunities, and forecast trends.

The role of Executive Support Systems in the firm:-

Use of ESS has migrated down several organizational levels so that the
executive and subordinates are able to look at the same data in the same way.
Today’s systems try to avoid the problem of data overload because the data can be
filtered or viewed in graphic format (if the user so chooses). ESS have the ability
to drill down, moving from a piece of summary data to lower and lower levels of
detail. The ability to drill down is useful not only to senior executives but also to
employees at lower levels of the firm who need to analyze data. OLAP tools for
analyzing large databases provide this capability.

A major challenge of executive support systems has been to integrate

data from systems designed for very different purposes so that senior executives
can review organizational performance from a firm-wide perspective. Today,
enterprise systems are able to provide managers with timely, comprehensive, and
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accurate firm-wide information. ESS based on such data can be considered logical
extensions of enterprise system functionality.

ESS need to have some facility for environmental scanning. A key

information requirement of managers at the strategic level is the ability to detect
signals of problems in the organizational environment that indicate strategic threats
and opportunities (walls et al., 1992). The ESS need to be designed so that both
external and internal sources of information can be use for environmental scanning
purposes.

Business value of Executive Support Systems:-

Much of the value of ESS is found in their flexibility and their ability to
analyze, compare, and highlight trends. The easy use of graphics enables the use to
look at more data in less time with greater clarity and insight than paper-based
systems provide. Executives are using ESS to monitor key performance indicators
for the entire firm and to measure firm performance against changes in the external
environment. The timeliness and availability of the data result in needed actions
being identified and carried out earlier than previously could have been done.
Problems can be handled before they become too damaging; opportunities can also
be identified earlier. These systems can thus help businesses move toward a
“Sense-and respond” strategy.

A well-designed ESS could dramatically improve management

performance and increase upper management’s span of control. Immediate access
to so much data increases executives’ ability to monitor activities of lower units
reporting to them. That very monitoring ability could enable decision making to be
decentralized and to take place at lower operating levels. Executives are often
willing to push decision making further down into the organization as long as they
can be assured that all is going well. Alternatively, executive support systems
based on enterprise-wide data could potentially increase management
centralization, enabling senior executives to monitor the performance of
subordinates across the company and to take appropriate action when conditions
change.

Advantages of ESS:-

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• Flexibility – ESS puts data and tools in the hands and executives who
are free to shape the problems.
• Can analyze, compare and highlight trends.
• Capabilities for drilling down and highlifting trends.
• Can monitor key performance successfully.
• It could increase management centralization to monitor subordinates
performance.

Disadvantages of ESS:-

• Initial cost and maintenance cost are high.

• Needs frequent changes as technology changes.
• Number of tools, models have to be designed for different executives
performance.

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