Improved Management Decision Making Essay

Managers at all levels of a business are required to make decisions constantly. Whether it be at an often low risk operational level, or at high importance strategic level, precise analysis is essential, failure on doing so could end in disaster in business’s unforgiving world. Evidence of this can be seen in the strategic level of Dell management in 2004. A poor decision to enter the market with their DJ.Ditty MP3 player, Dell failed to address any strong marketing campaign along with failure to analyse stronger substitute products concluded in Dell discontinuing the product two years later in 2006. The decision made in the development of the product were likewise poor as rival companies such as Apple and Zen’s product features far overpowered Dells weak product. (Laubacher 2011). Simple research into Information Systems tells us they are able to display information that can lead us to answer questions we are often queried with. But often management decisions are not j ust simple rhetorical answers but strategic procedures that will aid the business in specific ways. In this essay I will assess the different methods of how IT based systems through the means of Information systems can aid management decisions or, if they do at all. (C.Lucas 1994)In his book information systems concepts for management, defines an IS as â€Å"a set of organised procedures, that when executed, provides information to support organisation. The information is a tangible or intangible entity that serves to reduce uncertainty about some state or event.† (Oz, Jones and Gowthorpe 2009) Back this definition up stating an â€Å"IS system is a computer based set of hardware, software and telecommunications components, supported by people and procedures to process data and turn it into useful information. The information system can then be divided up into different subsystems with varying goals that help gear towards the organisations main goal†. It is clear that ISs are significant in the day to day operation of a business. The fact that ISs can answer question is indisputable, but the process in which they answer them and the form of answers they give can be debated. Synergy defines the combined resource output exceeding the total output of the same resources if they were employed separately (Oz, Jones and Gowthorpe 2009). This theory can be stretched as far as the four stages of processing that an information system goes through. Input is the first stage of this process which is entered by the human. The next three stages include the processing of the IS system, these include changing and manipulating the data, extracting the information out of the information system and finally storing the information that the IS system has administered. This is a great example of synergy, the IS system calculates the data at a quicker and cheaper cost than if a human were to do it, but the IS system first needs input from an event or scenario from a human, this evidence of synergy. (C.Luckem 2002) Theory on complex event processing relates to this very well. He defines each business action (be this internal with staffing decisions or external with customers through sales) taking several stages of events to reach a final state and in today’s technological driven domain ISs play a very Important role in each of these states. He relates to the use of ISs gathering and storing of data, sharing of information and the ability of systems to automate and often control components playing a vital part of CEP. ISs that relate to CEP are systems such as Supply Chain Management, according to (B.Handfield and L.Nichols 1999) â€Å"Is a set of approaches utilized to efficiently integrate suppliers, manufacturers, warehouses, and stores, so that merchandise is produced (often by computer aided design) and distributed at the right quantities, to the right locations, and at the right time, in order to minimize system wide costs while satisfying service level requirements† It is easy to see how this can be related to management decision making, at each stage of a process with the use of SCM managers can stop the process and analyse production rates, therefore using IS systems to make a decision, which In the case of SCM means utilising every process so that wastage is at a minimum and costs remain low throughout production . Luckem further expresses that the use of IS systems in CEP does not function with remotely one source but needs both the Human and IS system to work collectively for any form of process to work accordingly. Although(Bider 2010) argues the reliability of information processed by ISs. He states that human error can often be the cause of incorrect data. This is not uncommon; often as information is filtered through the information map from department to department human error can cause faults. So an argument could be formed that managers can often put great analysis into ISs, but decisions can be made using the wrong output from the system. In relation to the four stages of processing, this output can then be stored incorrectly meaning any future decisions based on this first problem will not aid the answer process as the information will be incorrect. There are other types of systems that can significantly aid decision making DSSs or Decision Support Systems are systems that aid making decisions through the use of built in models. (Turban 1995) Defines it as â€Å"an interactive, flexible, and adaptable computer-based information system, especially developed for supporting the solution of a non-structured management problem for improved decision making. It utilizes data, provides an easy-to-use interface, and allows for the decision maker’s own insights.† DSSs are comprised of three modules data management, model management and dialog management or in profit terms (actual prior, possible sales, possible revenue, and possible profit). Using these modules DSSs helps find an ideal course of action, able to analyse and finally answer questions that are often asked upon humans, ‘What if’ or ‘How will this action impact revenue’ are example. DSSs are able to process raw data, and draw comparisons to generate information to aid a business decision. Although (Jensen, B.Lowry and Jeffery 2011) argue that the now more wide spread use of Decision Support Systems due to the increase in technology used in business today should not replace the decision making of a human. They argue that although â€Å"It is often difficult for people to assess credibility correctly in face-to-face interactions† but argue the use of DSSs cannot be used as an absolute decision making process â€Å"The capability of face-to-face interactions is critical to effective communication and decision making†. Their views can be seen as somewhat old fashioned when relating to decision making. Similar to DSSs are Strategic information systems. The root of this system is based upon Michael E. porter’s Concept of competitive advantage. This concept analyses the strategic steps a business undergoes to gain an advantage over its competitors. According to (E.Porter 1998), SIS works by enhancing opportunities through analysing competitors, recording seller patterns, identifying potential substitute products and finally retrieving information on keeping a healthy share in the business’s market. All of these should aid a business to create a competitive advantage through the means of SISs. The storing of data and analysis of this data is what managers will use to make decisions. In both the DSSs and SISs the analysis will often plan out a possible route in which the business may take to achieve its aims. It is then up to management to take these recommendations on board through adopting the ideas or not. IS used in the hierachary of a business are important to assess, at an operational level Systems used will be Transactional Process systems are Electronic point of sale, both of these systems allow managers to analyse structured data and draw conclusions for themselves, examples of this maybe the management of stock ordering to improve on wastage, or assessing what product sells at an appropriate time. These systems can then be assessed by the tactical level that may use the means of DSSs to assess new pricing strategies to adapt to the operational level through the help of DSSs but on the evidence of data outputted by TPSs or EPOS. The next and final stage will be the use of the systems at a strategic level. Strategic level will use DSSs and Executive information systems (similar to DSSs but often seen as more precise and concentrated form of system) along with unstructured data which occurs through the means of meetings, conversations and emails .Furthermore strategic level generally have access to IS of all subordinates ISs to help make decisions as well as ISs linked together with external commercial services, such as the latest stock prices and general business news are also common. It is clear that ISs aid management decisions, but in context of this it is important to assess the characteristics of the managers, as well of the management styles. For example managers that adopt an autocratic style of management will be less interested in staff well-being which may affect their reaction to support they receive through IS systems, meaning they may adopt any plans a DSS comes up with whether or not it has a negative effect on staff. Democratic style managers may rely heavily on the data produced from systems of their subordinate. When assessing the improvement of decision making through the means of ISs, I feel it is important to assess manager characteristics, it is clear that there are systems that aid the decision making process but as (Bider 2010) stated there can be human error caused through the input of a system which may lead to poor decision making. I feel steady analysis through each stage of the input process will allow data to be used correctly, therefore being pivotal in decision making process and consequently improving them. Bibliography B.HANDFIELD, Robert and L.NICHOLS, Ernest (1999). Introduction to Supply Chain Management. vol.1. 1st ed., Prentice Hall. Business Using IS , BIDER, IIia (2010). Enterprise, Business-Process and Information Systems Modeling. vol.50. 1st ed., Queensland, Springer. 364213050X. C.LUCAS, Henry (1994). 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