IT-Based Information Systems Leading to Improved Management Decision-Making

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Grant Robertson

Financial and Management information

Critically Evaluate the Proposition that IT based Information Systems have led to improved Management Decision Making


David Roberts

Critically Evaluate the Proposition that IT based Information Systems have led to improved Management Decision Making

Managers at all levels of a business are required to make decisions constantly. Whether it be at an often low risk operational level, or at high importance strategic level, precise analysis is essential, failure on doing so could end in disaster in business's unforgiving world. Evidence of this can be seen in the strategic level of Dell management in 2004. A poor decision to enter the market with their DJ.Ditty MP3 player, Dell failed to address any strong marketing campaign along with failure to analyse stronger substitute products concluded in Dell discontinuing the product two years later in 2006. The decision made in the development of the product were likewise poor as rival companies such as Apple and Zen's product features far overpowered Dells weak product. (Laubacher 2011). Simple research into Information Systems tells us they are able to display information that can lead us to answer questions we are often queried with. But often management decisions are not just simple rhetorical answers but strategic procedures that will aid the business in specific ways. In this essay I will assess the different methods of how IT based systems through the means of Information systems can aid management decisions or, if they do at all. (C.Lucas 1994)In his book information systems concepts for management, defines an IS as "a set of organised procedures, that when executed, provides information to support organisation. The information is a tangible or intangible entity that serves to reduce uncertainty about some state or event." (Oz, Jones and Gowthorpe 2009) Back this definition up stating an "IS system is a computer based set of hardware, software and telecommunications components, supported by people and procedures to process data and turn it into useful information. The information system can then be divided up into different subsystems with varying goals that help gear towards the organisations main goal". It is clear that ISs are significant in the day to day operation of a business. The fact that ISs can answer question is indisputable, but the process in which they answer them and the form of answers they give can be debated. Synergy defines the combined resource output exceeding the total output of the same resources if they were employed separately (Oz, Jones and Gowthorpe 2009). This theory can be stretched as far as the four stages of processing that an information system goes through. Input is the first stage of this process which is entered by the human. The next three stages include the processing of the IS system, these include changing and manipulating the data, extracting the information out of the information system and finally storing the information that the IS system has administered. This is a great example of synergy, the IS system calculates the data at a quicker and cheaper cost than if a human were to do it, but the IS system first needs input from an event or scenario from a human, this evidence of synergy. (C.Luckem 2002) Theory on complex event processing relates to this very well. He defines each business action (be this internal with staffing decisions or external with customers through sales) taking several stages of events to reach a final state and in today's technological driven domain ISs play a very Important role in each of these states. He relates to the use of ISs gathering and storing of data, sharing of information and the ability of systems to automate and often control components playing a vital part of CEP. ISs that relate to CEP are systems such as Supply Chain Management, according to (B.Handfield and L.Nichols 1999) "Is a set of...
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