Information Technology Reference
In-Depth Information
SUMMARY
Principle
Good decision-making and problem-solving skills are
the key to developing effective information and deci-
sion support systems.
Principle
The management information system (MIS) must pro-
vide the right information to the right person in the
right format at the right time.
Every organization needs effective decision making and prob-
lem solving to reach its objectives and goals. Problem solving
begins with decision making. A well-known model developed
by Herbert Simon divides the decision-making phase of the
problem-solving process into three stages: intelligence,
design, and choice. During the intelligence stage, potential
problems or opportunities are identified and defined. Infor-
mation is gathered that relates to the cause and scope of the
problem. Constraints on the possible solution and the prob-
lem environment are investigated. In the design stage, alter-
native solutions to the problem are developed and explored.
In addition, the feasibility and implications of these alterna-
tives are evaluated. Finally, the choice stage involves select-
ing the best course of action. In this stage, the decision
makers evaluate the implementation of the solution to deter-
mine whether the anticipated results were achieved and to
modify the process in light of new information learned during
the implementation stage.
Decision making is a component of problem solving. In
addition to the intelligence, design, and choice steps of deci-
sion making, problem solving also includes implementation
and monitoring. Implementation places the solution into
effect. After a decision has been implemented, it is monitored
and modified if necessary.
Decisions can be programmed or nonprogrammed. Pro-
grammed decisions are made using a rule, procedure, or
quantitative method. Ordering more inventory when the level
drops to 100 units or fewer is an example of a programmed
decision. A nonprogrammed decision deals with unusual or
exceptional situations. Determining the best training pro-
gram for a new employee is an example of a nonprogrammed
decision.
Decisions can use optimization, satisficing, or heuristic
approaches. Optimization finds the best solution. Optimiza-
tion problems often have an objective such as maximizing
profits given production and material constraints. When a
problem is too complex for optimization, satisficing is often
used. Satisficing finds a good, but not necessarily the best,
decision. Finally, a heuristic is a “rule of thumb” or commonly
used guideline or procedure used to find a good decision.
A management information system is an integrated collection
of people, procedures, databases, and devices that provides
managers and decision makers with information to help
achieve organizational goals. An MIS can help an organization
achieve its goals by providing managers with insight into the
regular operations of the organization so that they can con-
trol, organize, and plan more effectively and efficiently. The
primary difference between the reports generated by the
TPS and those generated by the MIS is that MIS reports
support managerial decision making at the higher levels of
management.
Data that enters the MIS originates from both internal and
external sources. The most significant internal sources of
data for the MIS are the organization's various TPSs and ERP
systems. Data warehouses and data marts also provide
important input data for the MIS. External sources of data for
the MIS include extranets, customers, suppliers, competitors,
and stockholders.
The output of most MISs is a collection of reports that are
distributed to managers. These reports include scheduled
reports, key-indicator reports, demand reports, exception
reports, and drill-down reports. Scheduled reports are pro-
duced periodically, or on a schedule, such as daily, weekly, or
monthly. A key-indicator report is a special type of scheduled
report. Demand reports are developed to provide certain
information at a manager's request. Exception reports are
automatically produced when a situation is unusual or
requires management action. Drill-down reports provide
increasingly detailed data about situations.
Management information systems have a number of com-
mon characteristics, including producing scheduled,
demand, exception, and drill-down reports; producing
reports with fixed and standard formats; producing hard-copy
and soft-copy reports; using internal data stored in organi-
zational computerized databases; and having reports devel-
oped and implemented by IS personnel or end users.
Increasingly, MIS reports are being delivered over the Internet
and through mobile devices, such as cell phones.
Most MISs are organized along the functional lines of an
organization. Typical functional management information
