Week 11- Chapter 9: Managerial Support Systems

1. Describe the decision-making process proposed by Simon.
The decision making process proposed by Simon consists of the following four steps:
a. Intelligence phase: which allows managers to examine a situation and identify and define the problem. This is a key element of the stage as the recognition of the problem allows the managers of the business to adequately devise plans to help combat the problem encountered.
b. Design phase: decision makers and managers create a model that simplifies the problem. This is commenced by making assumptions about the problem and to identify all of the variables surrounding the problem. These assumptions and variables that are identified are put to the test through the use of test data gathered by the organisation.
c. Choice phase: involves managers and key decision makers to test the devised solution from the test data retrieved. Upon its success, it is preceded to the next stage, implementation.
d. Implementation phase: allows managers to implement the strategy to combat the problem encountered by using the data and the research gathered in the previous stages. Success will flow if the recognition of the problem was accurate and will lead to the problem being resolved. If unsuccessful, the whole process will need to be completed again until the problem is resolved.

2. Why do managers need IT support?
Managers need Information Technology Support due to the extensive information collected and have been affected by the following trends:
- Numerous alternatives: innovations in technology, improved communications, and globalisation have allowed many methods and procedures to change the way firms do business. The capabilities of the internet and technology have created the need for IT support in the collection, dissemination and creation of new data to inform key business decision making.
- The degree of problems that are encountered by business’ need to be dealt with proactively. Due to the fluctuating nature of the business environment, information needs to be readily available to make informed decisions.
- New processes and methods need to be created to reduce or combat the complexities of the business environment.
- The information needs to be accessed rapidly, experts need to be consulted, collaborative decision making are available from all locations and departments of the firm. The need to bring all of these into one location quickly and inexpensively is a task which IT support is needed.

3. Describe the decision matrix.
The decision matrix is used to support the decision making process. It classes the problem structure and the three broad categories of the nature of decisions. The matrix consists of nine cells and establishes the roles low, middle and professional staff is required to do.
Lower-management usually perform the structured and operational control orientated tasks including accounts receivable, budgets and short term forecast reports and scheduling for production and inventory control.
Middle management are responsible for the financial management, warehouse location, distribution systems, budget preparations, project scheduling and establishing the finances for the operating of the firm.
Senior executives are responsible for activities including Research and Development, social responsibility planning negotiations, recruiting staff and merging and acquiring other firms in the same industry.

4. Describe the capabilities of data mining.
Data mining is the searching for valuable business information in a large database, data warehouse or data mart. It performs two basic functions of predicting trends and behaviours and identifying unknown patterns.
The capabilities of data mining include the following:
- Retail and sales: identifying sales, determining correct inventory levels and scheduling the distribution channel.
- Banking: forecasts expected expenditure, predicting customer spending patterns and trends and the amount of money that the customers require in a loan
- Manufacturing and production: accounting for the depreciation and usage of machinery and other equipment used in the manufacturing and production of the products.
- Insurance: determining the amount of insurance needed to cover workplace injuries and medical coverage for the firm’s employees and whether or not the customers will require the new insurance policies.
-Police work: determining trends in crime and criminal activity
- Health care: correlating the demographics of the patients with the types of illnesses that are suffered.

The business can then determine the relevant trends by identifying the symptoms and how it will be combated.
- Marketing: classifying the trends of the customers within a particular group and developing marketing strategies that can accommodate the changes in tastes.

5. What are some of the capabilities of digital dashboards?
A digital dashboard provides rapid access to timely information and the direct access to management reports.
Some of the capabilities of digital dashboards include:
- Drill down: which is the ability to go into detail at several levels which can be done by a series of menus on the computer using specific applications
- Critical success factors: are identified at each level of management, organisational level and by department and recognise the key factors for success.
- Key performance indicators: these are the specific measures of the critical success factors
- Status access: the latest data on the key performance indicators which are available in real time.
- trend analysis: identifies the short, medium and long term trends of the key performance indicators which are projected using various forecasting methods.
- Ad-hoc analysis: analyses made at anytime upon the demands of the firm that is relevant to particular factors or relationships of certain constructs.
- Exception reporting: recognises the deviations of plans that a firm aims to carry out.