MIS & Decision Making

By Arun Mishra

DECISION MAKING


Decision making is the developing concepts leading to the selection of a course of action among variations. Every decision making process produces a final choice It can be an action or an opinion. It begins when we need to do something but we do not know what e.g. Decision to raise a Purchase Order

Decision making in business and management

In general, business and management systems should be set up to allow decision making at the lowest possible level.
Several decision making models or practices for business include: SWOT Analysis - Evaluation by the decision making individual or organization of Strengths, Weaknesses, Opportunities and Threats with respect to desired end state or objective. Buyer decision processes - transaction before, during, and after a purchase
Corporate finance: The investment decision The financing decision The dividend decision working capital management decisions

Cost-benefit analysis - process of weighing the total expected costs vs. the total expected benefits

Types of Decisions
  

Unstructured/ Nonprogrammed Structured/ Programmed Semi-structured

Information Requirements of Key Decision-Making Groups in a Firm Decision-

The Decision-Making Process DecisionPhases of Decision Making Process

Intelligence Design Choice Implementation

Stages in Decision Making

Phases of Decision Making Process



Intelligence gathering
Definition of problem Data gathered on scope Constraints identified

 

Design phase
Alternatives identified and assessed

Choice
Selection of an alternative

Implementation
Testing the selected alternative.

Typical Inputs and Outputs

 

Inputs: Information from the TPS Outputs: hard and softcopy reports
Scheduled reports On-demand reports Key-indicator (business fundamentals) Exception reports

MIS Support to Decision Making Process

Functional Perspectives of MIS



Financial MIS Will integrate information from multiple sources Functions

Costing P&L reporting Auditing Funds management

Functional Perspectives of MIS



Manufacturing Design and Engineering Master Production Scheduling Inventory Control Materials Planning Manufacturing and Process Control Quality Control

Functional Perspectives of MIS



Marketing Market research

Web-based market research

Pricing

Functional Perspectives of MIS



 

Transportation and Logistics Route and schedule optimization Human Resources Accounting

Systems for Supporting Decisions

Management information systems (MIS) Decision-support systems (DSS) Executive support systems (ESS) Group-decision support systems (GDSS) Intelligent techniques

Management Information Systems (MIS)

Help managers monitor and control a business Produce regular reports on performance, such as monthly or annual sales Sometimes highlight exceptional conditions Reports often available online

Decision Support Systems (DSS)

Support semi-structured and unstructured problem analysis Characteristics
Data from multiple sources internal and external to organization Presentation flexibility Simulation and what-if capability Support for multiple decision approaches Statistical analysis

Components of DSS

DSS database DSS software system Models Sensitivity analysis DSS user interface

Examples of DSS

DSS for pricing decisions in FMCG & Pharma Companies. DSS for customer relationship management in Banks

Group Decision-Support Systems (GDSS) Decision 

Very interesting field How can information technology improve how decisions are made by groups? Interactive, computer-based systems that facilitates solving of unstructured problems by a set of decision makers Used in conference rooms with special hardware and software Support increased meeting sizes with increased productivity

Group Decision-Support Systems (GDSS) Decision

Applications
Where time is critical Where participants are geographically dispersed Where authority obstructs communication Military Business Government

Group Decision-Support Systems (GDSS) Decision

Common characteristics
Meeting moderation/facilitation Signed and anonymous comments Structured deliberations
Presentation period Comment period Automated collation of comments Voting

Face-to-face and remote

Executive Information Systems



  

What information does a chief executive of board member require? High level with drill down Key business and industry data Structured and unstructured information Structured: orders Unstructured: Industry newsfeed Graphical

Executive Information Systems

Give senior executives a picture of the overall performance of an organization Enable an executive to zoom in on details or zoom out for a broader view Drill down capability Digital dashboard

Intelligent Systems for Decision Support

Artificial intelligence (AI) Expert systems Case-based reasoning Intelligent agents

Intelligent Agents in P&Gs Supply Chain Network

Intelligent agents are helping Procter & Gamble shorten the replenishment cycles for products, such as a box of Tide.