Information and Decision Support Systems - Principles of Information Systems - page 394

As you read this chapter, consider the following:
•

How is an MIS used in the various functional areas of a business?

•

How do an MIS and DSS affect a company's business practices and its ability to compete
in a market?

You have seen throughout this topic how information systems can make you more
efficient and effective through the use of database systems, the Internet, e-commerce,
transaction processing systems, and many other technologies. The true potential of
information systems, however, is in helping you and your coworkers make more
informed decisions. This chapter shows you how to slash costs, increase profits, and
uncover new opportunities for your company using management information and
decision support systems. Transportation coordinators can use management infor-
mation reports to find the least expensive way to ship products to market and to solve
bottlenecks. A loan committee at a bank or credit union can use a group support
system to help them determine who should receive loans. Store managers can use
decision support systems to help them decide what and how much inventory to order
to meet customer needs and increase profits. An entrepreneur who owns and oper-
ates a temporary storage company can use vacancy reports to help determine what
price to charge for new storage units. Everyone wants to be a better problem solver
and decision maker. This chapter shows you how information systems can help. It
begins with an overview of decision making and problem solving.

Why Learn About
Information and
Decision Support
Systems?

As shown in the opening vignette, information and decision support are the lifeblood of
today's organizations. Thanks to information and decision support systems, managers and
employees can obtain useful information in real time. As discussed in Chapter 9, TPS and
ERP systems capture a wealth of data. When this data is filtered and manipulated, it can
provide powerful support for managers and employees. The ultimate goal of management
information and decision support systems is to help managers and executives at all levels
make better decisions and solve important problems. The result can be increased revenues,
reduced costs, and the realization of corporate goals. Many of today's information and
decision support systems are built into the organization's TPS or ERP systems. In other cases,
they are developed separately. No matter what type of information and decision support
system you use, a system's primary goal is to help you and others become better decision
makers and problem solvers.

DECISION MAKING AND PROBLEM SOLVING

Every organization needs effective decision making. The U.S. Coast Guard, for example, uses
a formal decision process called the Ports and Waterways Safety Assessment (PAWSA) model
to determine what resources it needs to secure the nation's coastlines and waterways. 1 As a
result of its formal decision-making process, the Coast Guard demonstrated it needed four
additional vessel-traffic centers.
In most cases, strategic planning and the overall goals of the organization set the course
for decision making, helping employees and business units achieve their objectives and goals.
Often, information systems also assist with problem solving, helping people make better deci-
sions and save lives. For example, an information system at Hackensack University Medical
Center ( www.humed.com ) in New Jersey analyzes possible drug interactions. In one case, an
AIDS patient taking drugs for depression avoided therapeutic medication that could have
dangerously interacted with the depression medication. The hospital has invested millions
of dollars into its information system.