BTEC Level 3

Business: Unit 7
Business Decision
Making
B5 - Software Generated Information
for Decision Making in a Business
Learning Outcomes

● Identify how internal data systems can aid in effective

business decision making
● Analyse how key business decisions are made using planning
tools
● Evaluate the success of business decision making using key
data and planning tools
Management Information Systems
Management Information Systems (MIS) is used by upper
management to make key business decisions. MIS includes
many kinds of data, including;

● HR records (appraisals, performance data)

● Financial data (payment details, sales)
● Business specific data (college enrollments and
achievements, student attendance)

E.g. A college will use enrollment data to make strategic

plans (e.g staffing, construction work etc.) What are the
benefits and potential issues with MIS?
Project Management Tools
When a business takes the decision to embark on a large project, it
is important that the project is managed effectively from start to
finish. Businesses can use a variety of tools to manage a project.
We are going to focus on Gantt Charts and Critical Path Analysis
(CPA)
Gantt Charts

A Gantt chart is a useful planning tool that allows the business to view the
journey their campaign will take. To create a Gantt chart you need to
know the following information;

● The tasks that need to be completed

● How long the tasks will take to complete
● Which tasks need to be completed before others can begin.
● Your final desired outcome

What do you think the advantages and drawbacks of using Gantt charts
are?
Task

Your businesses wishes to launch a brand new product. You

currently operate within the mobile phone market. In groups,
create a Gantt chart for the product launch, listening the tasks
required and the estimated time scales for each task.
Critical Path Analysis

▪ Critical path analysis ("CPA") is a widely-used project management

tool that uses network analysis to help project managers to handle
complex and time-sensitive operations.

▪ Why do businesses use CPA? Think about the advantages and

disadvantages of CPA when we look at CPA in more detail
 ● Advantages of CPA

● Most importantly – helps reduce the risk and costs of complex

projects
● Encourages careful assessment of the requirements of each
activity in a project
Advantages of ● Help spot which activities have some slack ("float") and could
CPA therefore transfer some resources = better allocation of resources
● A decision-making tool and a planning tool – all in one!

● Provides managers with a useful overview of a complex project

● Links well with other aspects of business planning, including cash

flow forecasting and budgeting
Financial Tools

Financial data is highly important to consider when making key business

decisions, as projects often need large amounts of financial resources. Key
data may include;

● Net Present Value - how much the business is actually worth at the
time. This does not include any plans for future growth.
● Discounted Cash Flow - how much is money worth once it has been
invested into the business?
● Internal Rates of Return (IRR) - how much return will the business
receive based on the money invested?
Task

In groups, research an example of an expansion project undertaken

by a large business. Based on the information you find, comment
on the following;

● How do you think the project was managed? Was the project
successful?
● Was the project a financial success? What calculations may
have assisted the business in deciding to carry out the project?