Are repetitive and routine and they involve a definite handling procedure so that they do not have to be treated each time as if they were new?

Decision Making and Decision-Support Systems (DDS)

Because of the importance of high-quality decision making, firms are investing heavily in business intelligence systems, which consist of technologies and applications designed to help users make better business decisions. The major applications and technologies used for business intelligence include supply chain management, customer relationship management, and enterprise systems; systems for knowledge management; and technologies such as data mining and online analytical processing (OLAP) [Figure 13-1]

FIGURE 13-1 Systems and technologies for business intelligence Each of the major enterprise applications provides support for decision making or �business intelligence� at all levels of the firm in addition to processing daily transactions. Specialized systems such as MIS, DSS, and ESS described in this chapter work with these systems and technologies for data mining and online analytical processing (OLAP) to focus on the specific decision needs of managers and employees.

Decisions are made at all levels of the firm. Some decisions are very common and routine, but exceptionally valuable. Although the value of improving any single one of these decisions may be small, improving hundreds of thousands of these small decisions adds up to a large annual value. There are four different decision-making constituencies in a firm: (1) senior management; (2) middle management and project teams; (3) operational management and project teams; and (4) individual employees. [Figure 13-2]

FIGURE 13-2 Information requirements of key decision-making groups Various levels of management in the firm have differing information requirements for decision support because of their different job responsibilities and the nature of the decisions made at each level.

There are different types of decision-making at different levels. Decisions can be classified as structured, semistructured, and unstructured. Unstructured decisions are those in which the decision maker must provide judgment, evaluation, and insights into the problem definition. Structured decisions, by contrast, are repetitive and routine, and decision makers can follow a definite procedure for handling them to be efficient. Semistructured decisions are those in which only part of the problem has a clear-cut answer provided by an accepted procedure. In general, structured decisions are more prevalent at lower organizational levels, and unstructured decision making is more common at higher levels.

          There are four kinds of systems used to support the different levels and types of decisions: Management Information systems (MIS), decision-support systems (DSS); executive support systems (ESS); and group decision-support systems (GDSS).

          There are four different stages in decision making: intelligence, design, choice, and implementation. Intelligence consists of identifying and understanding a problem; design involves exploring various solutions; choice consists of choosing among available solutions; and implementation involves making the chosen alternative work and monitoring how the solution is working. [Figure 13-3]

FIGURE 13-3 Stages in decision making The decision-making process can be described in four steps that follow one another in a logical order. In reality, decision makers frequently circle back to reconsider the previous stages and through a process of iteration eventually arrive at a solution that is workable.

For some firms, investments in decision-support systems do not always work out successfully for three reasons: data quality, management filters, and organizational culture. High-quality decisions require high-quality information regardless of information systems. There are seven dimensions of information quality when designing decision-support systems: Accuracy, integrity, consistency, completeness, validity, timeliness, and accessibility. Even with timely, accurate information, some managers make bad decisions. Managers filter by turning off information they do not want to hear because it does not conform to their prior conceptions. Additionally, organizations are bureaucracies with limited capabilities and competencies for acting decisively. When environments change and new business models should be followed, strong forces within organizations resist making decisions calling for major change.

          There are six major trends in decision-support applications: (1) the production of detailed, enterprise-wide data; (2) the broadening of decision rights and responsibilities; (3) the use of intranets and portals; (4) the personalization and customization of information; (5) the use of extranets and collaborative commerce; and (6) the use of Web-based team support tools.

Which type of decision involve definite procedure for handling so they do not have to be treated each time as new?

What type of decision is routine and repetitive and often has well

What is structured and unstructured decision making?

What is unstructured decision making?