A NARRATIVE REPORT OF

PAULIN, LANIE S. MPA 610

Professor: DR. AMELIA GIRLY L. ARANAS

Chapter 16- Decision Support System and Management Information

System

Decision support system is a computer-based software application system

where the business data is analyzed in the form of information and presents

to the user so that the user can take the meaningful business decisions more

easily to help managers in decision making by accessing large volume of of

information produced from various information systems involved in

organizational business processes. Such as office automation system,

transaction processing system and etc.….

Decision support system uses the summary information, exceptions, patterns,

and trends using the analytical models. A decision support system helps in

decision making but does not necessarily give a decision itself. The decision

makers compile useful information from raw data, documents, personal

knowledge or business models to identify and solve problems and make

decisions.
Typically, information that a decision support application might gather and

present would, (a.) accessing all information assets including legacy and

relational data sources; (b.) comparative data figures; (c.) projected figures

based on new data or assumptions; (d.) consequences of different decision

alternatives, given past experience in a specific context.

A decision support system helps overcome the barriers to a good decision

making including;

 Lack of experience

 Biasness

 Storage of time

 Wrong calculation

 Not considering alternatives

What are five types of Decision Support System?

 Communication Driven DSS are targeted at internal teams, including

partners. Its purpose is to help conduct a meeting or for users to

collaborate. The most common technology used to deploy the DSS is a

web or client server. Ex. Chats and instant messaging software’s,

online collaboration and net meeting system.

 Data Driven DSS document driven DSSs are targeted at managers,

staff, and also product/service suppliers. It is used to query a database

or data warehouse to seek specific purposes. It is deployed via a main

 frame system, client/ server link, or via web. Ex. Computer based

databases that have a query system to check including the

incorporation of data to add value to existing databases.

 Document Driven DSS are more common, targeted at a broad base

of user groups. The purpose of a DSS is to search web pages and find

documents on a specific set of keywords.

 Knowledge Driven DSS they are known a catch all category covering

a broad range of system covering users within the organization setting

up, but may also include the interacting organization. Ex. Consumer of

a business, it is essentially used to provide management advice or

choose the products/services. The typical deployment used to set up

system could be silent server or software running on standalone PCs.

 Model Driven DSS is a complex system that helps analyze decision

between different options. These are used by managers and staff

member of a business who interact with the organization for a number

of purposes depending on how the model is set up scheduling. These

DSS can be deployed via software.

 Web page DSS is considered the most sophisticated decision support

system that extend it capabilities by making use worldwide web and

internet. The evolution continues with advancement in internet

technology.
Categorization/ Classification of DSS

 File drawer system it provides information useful or making a specific

decision. It works like a file drawer where different types of information

are stored under different names.

 Data analysis system these decision support systems are based on a

formula and used to make comparative analysis. These make user of

simple data processing tools such as inventory analysis.

 Information analysis system this decision support system analyzes

the different sets of data to generate information reports that can be

used to asses a situation for decision making.

 Accounting and financial support system this type of support

system is based on to keep track of cash and inventory.

 Representation or solver model it represents the decision making in

a particular domain or for specific problem. It calculates and compare

the outcomes of different support paths. The decision maker can

conduct a ‘what if’ analysis and make an informed decision basis on

the outcomes generated.

 Optimization model is based on stimulated models providing

guidelines for operation management. It focuses on providing optimal

solution on job scheduling, product mix and material mix decisions.

 Suggestion system it suggests the optimal decision for a particular

situation by assisting in collecting and structuring data.

Attributes of a Decision Support System (DSS)

 Adaptability and flexibility

 High level of interactivity

 Ease of use

 Efficiency and effectiveness

 Complete control by decision

 Ease of development

 Extendibility

 Support for modelling and analysis

 Support for data access

 Standalone, integrated and web- based

The characteristic and capabilities of Decision Support System (DSS)

 Support for decision makers in semi- structured and unstructured

problems.

 Support for managers at various managerial levels, ranging from top

executive to line managers.

 Support for individuals and groups. Less structured problems often

require the involvement of several individuals from different

departments and organization level.

 Support interdependent or sequential decisions.

  Support for intelligence, design, choice, and implementation.

 Support for variety of decision processes and styles.

The benefits of Decision Support System

 Improves efficiency and speed of decision-making activities.

 Increases the control, competitiveness and capability of futuristic

decision making of the organization.

 Facilitates interpersonal communication.

 Encourages learning or training.

 Since it is mostly used in non-programmed decisions, it reveals new

approaches and set up new evidences for an unusual decision.

 Has the capacity to automate managerial processes.

The components of Decision Support System is the following;

 Database Management System (DBMS) is to solve a problem the

necessary data may come from internal or external database. In an

organization internal data are generated by a system such as TPS and

MIS. External data come from a variety of sources such as newspaper,

online data services, databases (financial, marketing, human

resources.)

 Model management System it stores and accesses models that

managers use to make decisions. Such models are used for designing
 manufacturing facility, analyzing the financial health of an organization,

forecasting demand of a product or services.

 Support tool is like the computer software online help, pulls down

menus, user interfaces, graphical analysis, error correction

mechanism, facilitates the user of interactions with the system.

What are the classifications of Decision Support System?

 Text oriented decision support system it contains textually

formatted information that could have a bearing on decision. It helps to

allow the documents created electronically, revised and viewed as

needed.

 Spreadsheet oriented it is the information that contains in

spreadsheet to allow in creating, viewing, modifying procedural

knowledge and instruct the system to execute self-contained

instruction.

 Database oriented it plays a major role here it contains an organized

and highly instructed data which helps in making decision easily.

 Solver oriented it is based on a solver, which is in form of an

algorithm or procedure that is written to perform specific calculation

and particular program type.

 Rules oriented these are the rules that follow certain procedure that

are adopted in rules-oriented decision support system is the example.

  Compound decision support system it is built using two more of the

five structures.

The Advantages of Decision Support System

 Difficulty in quantifying all the data

 Unaware of assumptions

 System design failure

 Difficulty in collecting all the required data

 Lack of technology knowledge in users.

The Disadvantages of Decision Support System

 Information overload

 Too much dependence on DSS

 Devaluation of subjectivity

 Overemphasis on decision making

 Cost of development

Resistance in using Decision Support System

While a number of organizations have already incorporated DSS into

business decision making are still resistant to integrate it. There may be a

number of factors why they are still hesitant in adopting a DSS, these may

include:
  Fear of learning; almost of us have some level fear instilled in us. We

are afraid of exploring and learning new things. In fact, we fear of

admitting that we lack technological knowledge required to use a DSS.

This attitude make makes an organization resistance to use a decision-

making system.

 Getting out of comfort zone: its only the fear of learning that stops

companies from adopting a DSS. Its about getting out of comfort zone

and laying hands on to new things that may require some extra effort

on their part. They don’t want to shed their age-old practices and admit

that technology if used correctly, actually turns things in their favor.

 Fear of implementation of new technology: technology can be scary

for many individuals. They are not comfortable with the idea of doing

things using the latest technology. They fear undergoing training or

participating in workshop geared towards providing functional skills.

What is Management Information System?

The Management Information System is a concept of the last decade. It

has been understood and described in a number of ways. It is also known as

the Information System, the Information and Decision System, the computer-

based information system.

MIS has more than one definition some of which are given below:
  MIS is defined as a system which provides information support for

decision making in the organization.

 MIS is defined as an integrated system and machine for providing

the information to support the operations, the management and the

decision-making function in the organization.

 MIS is defined as a system based on the database of the

organization evolved for the purpose of providing information to the

people in the organization.

Management Information System is the study of people, technology,

organizations and the relationship among them. MIS professionals helps firm

realize maximum benefits from investment in personnel, equipment, and

business processes. MIS is a people-oriented field with an emphasis on

service through technology. MIS professionals create information system for

data management (i.e., storing, searching and analyzing data). In addition,

they manage the various information system to meet the needs of manager,

staff and customer.

Management Information System (MIS) Concept

The concept of the MIS has evolved over a period of time comprising many

different facets of the organizational functions. MIS is necessity in all the

organization. The initial concept of MIS was to process the data available in

the organization and present in the form of reports at regular intervals. The
system was largely capable of handling the data from collection to

processing. It was more impersonal, requiring each individual to pick and

choose data and use it for requirements. This concept was further modified

when a distinction was made between data and information. Information is a

product of an analysis of data, that data can be analyzed in a number of

ways, producing different shades and specifications of the information as a

product.

A common misconception that MIS only concerns programming. However,

programming is just a small part of the MIS curriculum. While programming

concepts represent some of the founding concepts and information system

development, implementation and use. A large portion of the MIS degree

focuses on data analysis, teamwork, leadership, project management,

customer service and underlying business theories. These aspects of the

degree are what set the MIS professional apart from a computer science

specialist.

 Do you enjoy working with people?

 Would you enjoy the chance to work on global problem with people

from all over the world?

 Do you enjoy analyzing and solving problems?

 Do you want to create innovative, cutting edge technology solutions?

  Do you want to learn how to make business more efficient, effective

and competitive?

What kind of people pursue MIS degrees?

The profiles of MIS professional are varied, but in general such individuals

possess many of the following traits?

 Good problem-solving skills

 Ability to effectively manage time and resources

 A clear vision of the “big picture” as well as the “small details”

 A desire to work closely with other people

 Excellent communication skills

 Ability to think strategically about technology

 A desire to take responsibility for developing and implementing their

own ideas

Why should I choose to major in MIS?

 Job satisfaction

 High placement rate

 High salaries

 Exciting field

 Challenging field

 Hands on problem solving

  Innovation and creativity

 Global opportunities

 Great chance for advancement

 You can have an impact

History of MIS

Kenneth C Laudon and Jane Laudon identify the five eras of MIS evolution

corresponding to the five phases in the development of computing

technology: 1) Mainframe and minicomputer computing, 2) Personal

computers, 3) clients/ server networks,4) Enterprise computing and 5)

Cloud computing.

The 1st era (mainframe and minicomputer computing) was ruled by IBM.

These computers would often take up whole rooms and require teams to run.

IBM was supplied the hardware and software, as technology advanced, these

computers were able to handle greater capacities and therefore reduce their

cost.

The 2nd era began in 1965 as microprocessors started to compete with

mainframe and accelerated the process of decentralizing computer power

from large data to center to smaller offices.

As a technological complexity increased and decreased, the need to share

information within enterprise grew, giving rise to third era in which computer

on a common network access shared information on a server. The fourth era

enabled by high speed network tied all aspects of the business enterprise

together offering rich information access encompassing the complete

management structure.

The 5th era is the latest and employs networking technology to deliver

application as well as data storage independent of the configuration, location

or nature of the hardware. Alon g with high speed cell phone led to new levels

of mobility which managers access the MIS remotely.

Physical view of MIS

The physical view of MIS can be seen as an assembly of several subsystem

based on the databases in the organization. The subsystem ranges from data

collection, transaction processing and validating, analyzing and storing the

information in databases. The subsystem could be at a functional level. The

information evolved through them for an operational management and it

provides the information.

Therefore, MIS is dynamic concept subject to change time and again with a

change in business management process. It continues interacts the internal

and external environment and provides a corrective mechanism in the system

so that the changed need information are met effectively. MIS is a dynamic

design, the primary objective of which is to provide the information for

decision making and it is developed considering the organizational fabric,

giving due regard to the people in the organizational the management

functions and the managerial control.

Differences between the Management Information System and Decision

Support System

Management Decision Support

Parameter
Information System
System (MIS) (DSS)

Develop certain tools

Identifies information for using decision
Main task
requirement. process.

Main stress is on Main stress is on

Main stress efficiency. effectiveness.
Uses corporate
Type of database used Uses special database.
database.
Data storage is of great Main emphasis is on
Data related task importance. data manipulation.
Dependent on
Very much dependent
management
Dependency on on computer
judgement.
Indirect access of data Management enjoy
Access to data by provided. direct access.
 Principal use is
Principal use is control. planning, staffing,
Principal use
decision making.

Constructed by vendors
Created by users alone
or information
Created/ developed or with specialists.
specialist.
Middle level, lower
level, sometimes senior Analysts, professionals,
Types of user
executive. managers.
Focuses on information Focuses on decision
Main focus processing. support analysis.

Management

Management information system can be used by any and every level of

management, the decision of which system to implement generally falls upon

the chief information officer (CIO) and chief technology officer (CTO). These

officers are generally responsible for the overall technology strategy of an

organization including evaluating how new technology can help their

organization. They act as decision makers in the implementation process of

new MIS.

Once decision have made, IT directors including MIS director are

charge in of the technical implementation of the system. They are also in

charge of implementing the policies passed down. It is also their role to

ensure the availability of data and network services as the security of the data

involved by coordinating IT activities. Upon implementation the assigned

users will have the appropriate access to relevant information. It is a common

practice to have inputs to MIS be inputted by non-managerial employees

though they rarely have access to the reports and decision support platforms

offered.

Management Information System consists the following pillars

 Management is the art of getting things done through and with the

people of in formally organized groups.

 Information is data that have a meaning with context, where the data

is raw facts about an entity. (entity is the object of interest)

 System a set of inter related components with a clearly defined

boundary working together to achieve a common goal.

The role of Management Information System in an Organization

The role of MIS in an organization it can be compared to the role of heart and

body. The information is the blood and MIS is the heart plays the role of

supplying pure blood to all the elements including the brain. The heart works

faster and supplies more blood when needed.

MIS plays exactly the same role in the organization. The system ensures that

an appropriate data is collected from the various source, processed, and sent

further to all needy destinations. The system is expected to fulfil the

information needs of an individual, a group of individuals, the managers and

the top management. MIS satisfies the diverse needs through a variety of
system such as query system, analysis system, modeling system and DSS

and help in strategic planning, management control, operational control and

transaction processing.

MIS help the clerical personnel in the transaction processing and answer their

queries on the data pertaining to the transaction, the status of a particular

record and references on a variety of documents. MIS help the junior

personnel by providing the operational data for planning, scheduling, and

control and helps them further in decision making at the operations level to

correct an out amount of control situation.

MIS help the middle management in short them planning, target setting and

controlling the business functions. It is supported by the use of the

management tools of planning and control. MIS help the top management in

goal setting, strategic planning and evolving the business plans and their

implementation. It plays the role of information generation, communication,

problem identification and helps in the process of decision making, therefore

plays a vital role in the management, administration and operations of an

organization.

Impact of Management Information System on the organization

Since the MIS plays a very important role in organization, it creates an impact

on the organization, functions, performance and productivity. With good

support, the management of marketing, finance, production, and personnel

become more tracking and monitoring of the functional target becomes easy.

The functional manager is informed about the progress, achievements and

shortfall in the probable trends in the various aspects of business. This help in

forecasting and long-term perspective planning. The managers attention is

brought to a situation which is exceptional in nature, inducing to take an

action or a decision in the matter. A disciplined information reporting system

creates a structured data and a knowledge base for all the people in the

organization. The information is available in such a form that can be used

straight away or by blending analysis.

Advantages of Management Information System

 Improve an organization operational efficiency, add value to existing

products, engender innovation and new product development and help

managers make better decision.

 Companies are able to identify their strengths and weaknesses due to

the presence of revenue reports, employee performance records,

identifying the aspect that can help a company improve its business

processes and operations.

 It facilitates integration of specialized activities by keeping each

department aware of problem and requirements of other department.

 It serves as a link between managerial planning and control that

improves the ability of management to evaluate and improve

performance.

 Giving an overall picture of the company.

 Acting as a communication and planning tool.

 The availability of customer data and feedback can help the company

to align its business processes. The effective management of customer

data can help the company to perform direct marketing and promotion

activities.

 Can help a company gain a competitive advantage.

 Reports can help with decision making as well as reduce downtime for

actionable items.

Disadvantages of Management Information System

 To rigid and difficult to adapt.

 Resistance in sharing internal information between department can

reduce the effectiveness.

 Hard to quantity benefit to justify implementation of Management

Information System.

 Quality output of a Management Information System is directly

proportional to quality of input and processes.

  Retrieval and dissemination are extended on technology hardware and

software.

 Potential for inaccurate information.

Key points
This research explores the extent to which management information system

implemented to make successful decision at two selected financial

organization. The management process executed through a variety of

decisions taken at each step. Management aids in decision making if the

management is able to spell out the decision required to be taken. It provides

information for a decision support in the process of management. It helps in

such a way that the decision goals are achieved in the most efficient manner.

Since decision making is not restricted to a particular level, Management

Information System is expected to support all the levels of the management in

conducting the business operators. Unless, Management Information System

becomes a management aid, it is not useful to the organization.

Ten guide questions on Decision Support System and Management

Information System

1. What is Decision Support System?

2. What are the different types of Decision Support System?

3. What are the qualification of Decision Support System?

4. Enumerate the classification of Decision Support System?

5. Identify the five ERAS of Management Information System?

6. What is management Information System?

7. What is the characteristic of Management Information System?

8. What are the five main types of Management Information System?

9. What are the objectives of Management Information System?

10. What is MIS in business?