Information Systems and Decision-Making in Business

Information Systems and Decision-Making

Introduction

An information system encompasses all elements involved in managing, processing, transporting, and distributing information within an enterprise. Decision-making is the process of choosing between alternatives to solve problems. At the individual level, decision-making involves using reasoning and thinking to choose a solution.

Types of Decisions

• Scheduled Decisions: Frequent, routine choices.
• Unscheduled Decisions: Infrequent choices for uncommon problems, requiring a structured solution process.

Decision-Making Process

• Evaluating Alternatives: Detailed study of each potential solution, considering advantages and disadvantages.
• Evaluating Results: Assessing the outcome of the decision and making adjustments as needed.

Functions of Administration

• Planning: Setting goals, strategies, and policies based on the organization's vision and mission, using tools like SWOT analysis and strategic maps.
• Organizing: Determining who will perform tasks, designing organizational charts, and defining responsibilities.
• Directing: Influencing individuals through leadership to achieve objectives, using logical and intuitive decision-making models.
• Controlling: Measuring performance against objectives, detecting deviations, and taking corrective actions at strategic, tactical, and operational levels.

Key Decision-Making Factors

• Future Effects: The long-term impact of the decision.
• Reversibility: How easily a decision can be reversed.
• Impact: The extent to which other areas are affected.
• Quality: Considerations of labor relations, ethics, legal aspects, company image, etc.
• Frequency: How often the decision needs to be made.

Sampling in Various Fields

• Politics: Voter opinions and candidate support.
• Education: Student test scores and program effectiveness.
• Industry: Product quality control.
• Medicine: Patient data and drug efficacy.
• Agriculture: Crop yields and fertilizer effectiveness.
• Government: Public opinion on welfare and national security.

System Analysis and Design

Context Diagram

A context diagram illustrates the system's overall function and details its main inputs and outputs.

Project Goals

Defining clear goals is crucial for identifying optimal solutions, addressing problems, and finding opportunities for organizational growth.

Feasibility Studies

• Operational Feasibility: Determines the likelihood of a new system being used effectively.
• Technical Feasibility: Evaluates the availability of hardware and software, and the necessary technical skills.
• Economic Feasibility: Analyzes the costs and benefits of each project alternative.

Determining Requirements

Determining requirements involves studying a system to understand its workings, assess interactions with current methods, and identify necessary adjustments. A requirement is a feature that the new system must include, typically specified by users.

Activities in Requirements Determination

• Advance Order: Predicting system features based on prior experience.
• Research Requirement: Studying and documenting the current system using fact-finding techniques, data flow analysis, and decision analysis.
• Requirement Specification: Analyzing system data to evaluate performance, identify requirements, and develop strategies for fulfillment.
• Requirement Identification: Pinpointing improvements to be delivered by the new system by comparing current performance with desired objectives.

Operational Improvements

• Faster processing
• Improved reliability and consistency
• Enhanced information interaction
• Reduced processing costs

Techniques for Gathering Requirements

Interviews

Interviews involve asking questions to gather information from individuals within and outside the organization.

• Open Questions: Encourage opinions and detailed responses.
• Closed Questions: Restrict answers for quicker, more focused data collection.
• Inquiries: Follow-up questions to gain deeper insights.

Questionnaires

Questionnaires collect information about attitudes, characteristics, and behaviors related to system management.

• Open Questionnaires: Allow free-form answers.
• Closed Questionnaires: Provide specific answer choices.

Questionnaires can reach larger populations than interviews due to time constraints.

Measurement types in questionnaires include nominal, ordinal, interval, and ratio.

Types of Requirements

• Functional Requirements: Describe what the system should do.
• Non-Functional Requirements: Specify system qualities, such as performance and reliability.

External Constraints

External factors, like software compatibility and legal regulations, can indirectly influence the product.

Software Tools for Requirements Determination

• Prototypes: Interactive system models for iterative development and user feedback.
• Joint Application Design (JAD): Structured workshops with users, managers, and analysts to define requirements.
• CASE Tools: Computer-aided software engineering tools for increased productivity and communication.
• Groupware: Software designed for collaborative project work.