Decision Support and Management Information Systems - Essay Example

Decision support systems & Management Information System By Affiliation Introduction With the help of modern and up-to techniques of information technology the corporate business people are trying to improve the overall corporate working and operational environment. The main intention behind the development and implementation of the modern and up-to-date techniques of information technology in the business and corporate structures is to improve the overall corporate performance and enhance management of the business data. The implementation of management information systems is excellent use of information technology. The implementation of information systems has become essential for every organization that handles business information and management process. This paper will present detailed analysis of two most popular business information systems. These systems are management information systems and decision support systems. Decision support systems According to (Turban, Leidner, McLean, & Wetherbe, 2005, p. 18), an information system collects, performs operations on collected data, stores, evaluates, and distributes information for a particular function. Similar to any other system, an information system consists of inputs (such as instructions and data) and outputs (reports, calculations) (Turban, Leidner, McLean, & Wetherbe, 2005, p. 18). And a decision support system (DSS) is an application or use of an information system that offers the users (management) with decision-oriented information when a decision-making state of affairs appears (Whitten, Bentley, & Dittman, 2000, p. 47). Below is a classical case of effectively implementation of DSS at Exxon Mobil Corporation, which took place long ago, (below case study) (Turban, Leidner, McLean, & Wetherbe, 2005, p. 550). This case outlines various key characteristics of a DSS. The risk investigation carried out first was based on the decision maker’s preliminary description of the circumstances, making use of a management science view. After that, the executive vice president, utilizing his knowledge, finding, and perception, thought that the model should be customized. The preliminary model, however mathematically accurate, was deficient. With a usual simulation system, an alteration to the computer program would have taken enough time; however the DSS offered a rapid analysis. Additionally, the DSS was elastic and approachable sufficient to facilitate managerial perception and finding to be included into the investigation (Turban, Leidner, McLean, & Wetherbe, 2005, p. 550): Table 1Case Study: Implementation of DSS IT at work USING A DSS TO DETERMINE RISK Exxon Mobil Corporation which is an oil and minerals organization located in Houston, Texas. This company is a worlds most reputed publicly traded worldwide oil and gas company, offering energy that assist support rising economies and develop living standards around the globe. ExxonMobil has a long history of management in the petroleum and petrochemical sector. The regulation and loyalty they apply in the implementation of their business strategies have led to sustainable competitive edge. ExxonMobil holds an industry-leading inventory of world oil and gas resources. They are the world’s major marketer and refiner of petroleum products. And their organization is counted among the world’s best organizations. However, they are also a technology corporation, applying principles of science and innovation to discover improved, dirt free and safer methods to distribute the energy according to the world demand. Daily, workers at ExxonMobil are dedicated and devoted to the chase of functional brilliance. They achieve this by presenting harmless, consistent operations, improving energy effectiveness, and maintaining well-built business controls. They consider that maximizing the worth of resources through closely controlled investments, implementing advance technologies, modernizing operations, and incorporated operations create the most advantage for resource owners, civilization, and their partners (EXXONMobil, 2009). The company was assessing a suggested joined venture with a petrochemicals company to build a chemical plant. EXXONMobil’s executive vice president in charge for the decision needed analysis of the risks encompassing different attributes such as prices supplies and demand. Bob Sampson, who is a manager of planning and administration, and his developers developed a decision support system in short time using a specific planning language. The output forcefully recommended that the projects should be approved. Afterward, it was time for the actual test. However, the managerial vice president approved and validated the strength and worth of the output; but he was concerned about the possible negative aspect of the project, the possibility of a disastrous result. Sampson clarifies that the managerial vice president said something this way: “I understand the amount of work you have already completed; also I am 99% certain about it. However I would be happy to see this in a different light. I recognize we have no more time and we have to inform our partners whether we accept this project or reject.” Sampson answered that the vice president could have the risk assessment he required in less than one hour. As Sampson clarified, “It took less than 20 minutes, there in the executive boardroom; we were determining the output of his what-if questions. Those outcomes took us to the final dismissal of the project, which we otherwise would almost certainly have taken or approved.” Figure 1DSS for Exxon Mobil Corporation Management Information Systems A management information system (MIS) is an information system that produces correct, on time, and structured information, so management can make decisions, supervise activities, solve problems, and follow development (development of projects) (Shelly, Cashman, & Vermaat, 2005, p. 727). Also according to (Whitten, Bentley and Dittman 47), a management information system is a function or use of information system that offers for management oriented reporting. These reports are typically developed or produced on a predetermined schedule and come out in a prearranged structure (Whitten, Bentley, & Dittman, 2000, p. 47). For this section I will discuss the case of Wal-Mart which is a large business. The Wal-Mart is a huge size business and an incredible power and economic king. The first store of Wal-Mart was founded by Sam Walton in 1962. It was integrated into stores in 1969. Wal-Mart established its head office in 1970. It became top organization of US in 1990 and World’s largest private employer in 2007 (Kalita, 2008). It has driven lesser retailers out of commerce; forced companies to be well-organized, frequently leading these suppliers to move industrial jobs overseas; and changed the method that up till now large and established businesses do. Wal-Mart has existence over all the customer supplies industries that survive in the US, for the reason that it is the number-one supplier-retailer of the majority of customer goods, not only toys, clothes, and shoes but home applications, sporting products, electronic goods, food, bicycles, groceries (Smith, 2008; Stair & Reynolds, 2009, p. 363). Wal-Mart is one of the worlds biggest companies, and its stores exist in approximately 175 nations. If Wal-Mart could be a nation it would have been ranked 22nd in the world as a consequence of its elevated GDP putting just behind Belgium (McIntyre, 2008). According to conventional trade distribution models, manufacturers set the conditions of sale for their prices, schedules, quantities, goods, and displays, while sellers accepted these orders managed as best as probable. Wal-Mart only changed this active away from the previous “push” scheme and in the direction of a “pull” system in which the seller tells the producer what to manufacture and how much (Smith, 2008). According to (Kalita, 2008), annual sales of Wal-Mart are around 288.2 billion US dollars and it has more than 2100000 employees (Kalita, 2008). The implementation of management information systems at Wal-Mart was very necessary. A management information system for Wal-Mart is a collection of different information systems that helps Wal-Mart management to collect, systematize, and evaluate information concerning a workgroup, department, and whole organization. These Wal-Mart management information systems are designed and developed to meet the requirements of three diverse classes of managers, executives, middle managers, and front line managers by creating an assortment of scandalized reports drawn from the Wal-Mart’s organizational database. Wal-Mart’s management information systems summarize huge amount of business’s data into information that is functional to each type of manager. Moreover Wal-Mart marketing, finance, and additional useful areas are maintained by management information systems and connected through a central database (Laudon & Laudon, 1999; Stair & Reynolds, 2009). Figure 2- MIS The main need and application of the Wal-Mart management information systems is to improve the business performance through the implementation of the one time and effective business decisions. Almost 3,800 vendors get daily sales data straightforwardly from Wal-Mart stores. And 1,500 have the same decision and analysis software that Wal-Marts own buyers use to check how a product performs in various markets (Prentice-Hall, Inc., 1999). Wal-Mart use management information systems to transform data into information that is really helpful and functional for business decision making. In addition, Wal-Mart management information systems offer helpful job in that they can gather into consistent business reports from the huge and uncontrollable capacity of data that would otherwise be insignificant to Wal-Mart business or organizational decision makers. Wal-Mart Management information systems can as well utilize these raw business data to run simulations and other theoretical situations that answer a variety of ‘what if’ questions concerning modifications in business or organizational strategy. Management information systems not only facilitate in the collation of huge amounts of Wal-Mart’s organizational/business data, however they save time that is the main advantage to the business personnel. It helps in Wal-Mart planning, facilitates in reducing business information overload, supports decentralization, brings co-ordination, and makes control easier (Stair & Reynolds, 2009, p. 363; Kalita, 2008; Prentice-Hall, Inc., 1999). Conclusion The world has become a global village and in this ever increasing competitive world organizations need rapid and correct decisions to survive in the markets. Therefore, the development of decision support systems and management information systems has turned out to be the most essential component of almost every organization (no matter what is size of organization small, medium and large). This paper has presented detailed analysis of two business technology implementation at two well known business and corporate structures. As we discussed in this paper, a decision support system (DSS) is a best use of an information system that provides the users with decision-oriented information when a decision-making state of affairs appears and a management information system is a use of information system that provides management oriented reporting. I hope this research will offer an insight into overall business and IS technology operational and application areas. Bibliography EXXONMobil. 2009. about us. Available at: http://www.exxonmobil.com/Corporate/about.aspx [Accessed 17 December 2009]. Kalita, A., 2008. Information Systems in Wal-Mart. Available at: http://www.scribd.com/doc/11796980/Information-Systems-at-Walmart-Inc [Accessed 17 December 2009]. Laudon, K. C., & Laudon, J. P., 1999. Management Information Systems, Sixth Edition. New Jersey: Prentice Hall . McIntyre, D. A., 2008. Wal-Mart (WMT): Better Gauge Of The Economy Than GDP. Available at: http://247wallst.com/2008/05/13/wal-mart-wmt-be/ [Accessed 17 December 2009]. Prentice-Hall, Inc., 1999. Information systems: Useful cases. Available at: http://www.prenhall.com/divisions/bp/app/alter/student/useful/ch1walmart.html [Accessed 17 December 2009]. Shelly, Cashman, & Vermaat., 2005. Discovering Computers 2005. Boston: Thomson Course Technology. Smith, C., 2008. Is Walmart Really That Big? Available at: http://www.masterthebusiness.com/blogs/walmart_really_big [Accessed 17 December 2009]. Stair, R. M., & Reynolds, G. W., 2009. Principles of Information Systems 9th Ed. Cource technology US. Steiger, D. M., 2006. Using non-traditional approaches to statistical classification and regression in DSS model analysis. Springer Netherlands, pp. 269-276. Turban, E., Leidner, D., McLean, E., & Wetherbe, J., 2005. Information Technology for Management: Transforming Organizations in the Digital Economy . New York: Wiley. Whitten, J. L., Bentley, L. D., & Dittman, K. C., 2000. Systems Analysis and Design Methods 5th Edition. New York: Irwin/McGraw-Hill. Read More