Improving Decision Making with Information Systems

Technology An theoretical approach

Dr. Sc. Mihane BERISHA-NAMANI, Mr. Sc. Albana QEHAJA
Abstract
Traditionally, information systems were used to support operational functions and to
reduce costs by automating many of business operations. As business has become more
aware of the importance of information systems, the role of information systems has
changed. From its conventional function of supporting business operations, today
information systems are used to reduce business risks and to ensure that correct
information is made available, so managers can make better decisions. The purpose of
this paper is to give an understanding how businesses are using information systems to
achieve their goals. It specifically addresses more closely the impact that information
systems have in improving the decision making. Althought limited this paper sets out to
explore the importance of information systems in decision making and concludes that
more attention should be paid to information systems usage for decision making
purposes. Finally, suggestions for further research are made.
Key terms: decision making, inorma!ion s"s!ems, !"#es o inorma!ion s"s!ems.
Introdction
$he %se o inorma!ion s"s!ems is o!en %nders!ood !o be changing !he &a" b%siness
and organisa!ions &ork as &ell as hel# !he #rocess o decision making. $he b%siness
%sage o inorma!ion s"s!ems ha'e e(#anded signiican!l" o'er !he "ears. )n!il *+,-s and
*+.-s !he role o inorma!ion s"s!ems &ere sim#le !ransac!ion #rocessing, record
kee#ing, acco%n!ing, and o!her da!a #rocessing a#lica!ion
*
. An im#or!an! role or
inorma!ion s"s!ems a##eard in *+/- and con!in%es in!o *++-. $his &as !he conce#! o a
s!ra!egic role o inorma!ion s"s!ems, some!imes called s!ra!egic inorma!ion s"s!ems. In
!his conce#! inorma!ion s"s!ems becomes in!egral #ar! o b%siness #rocesses, #rod%c!s
and ser'ices !ha! hel# a com#an" gain a com#e!i!i'e ad'an!age
0
.
$o&ards !he end o !he !&en!ie!h cen!r" man" organisa!ions reali1ed !ha! !he old &a"s
o organisa!ion s!r%c!%res &ere no longer a##ro#ria!e. $he !echnolog" dri'en com#anies
ha'e become kno&ledge dri'en com#anies and inorma!ion s"s!ems ha'e become cr%cial
!o !he %nc!ioning o modern organisa!ions and b%sinesses
2
. $he ra#id gro&!h o In!erne!,
in!rane!s and e(!rane!s and o!her in!erconnec!ed global ne!&orks drama!icall" changed
*
James A. 34Brien and 5eorge Marakas, Management Information ystems with MIource, /
!h
edi!ion,
0-**.
0
6enne!h 7a%don, and Jane 7a%don, !ssentials of Management Information ystems, +
!h
edi!ion, 0-**, #g.
*-8.
2
I! is im#or!an! !o recogni1e !ha! in !he s!%d" o inorma!ion s"s!ems &e consider ho& com#%!ers and o!her
inorma!ion !echnologies hel#, reinorce or resha#e, essen!iall" h%man and organi1a!ional ac!i'i!ies, no! 9%s!
&ha! !he com#%!ers !hemsel'es do or ho& !he" o#era!e. In !his &e are sa"ing !ha! an inorma!ion s"s!ems is
essen!iall" an organi1a!ional ra!her !han !echnological #henomenon.
*
!he ca#abili!ies o inorma!ion s"s!ems in b%siness. $oda", inorma!ion s"s!ems
!echnolog" is #la"ing a cri!ical role in b%siness &hich is cond%c!ed in a global
en'ironmen! and co%ld no! ser'e &i!ho%! inorma!ion s"s!ems
:
.
In addi!ion !o !radicional s"s!ems &hich assis! in !he da"-!o-da" b%siness o#era!ion,
inorma!ion s"s!em is #ro'iding s%##or! !o decision making. Se'eral s!%dies ha'e o%nd
and re#or!ed indings !ha! inorma!ion s"s!ems are #la"ing an increasingl" im#or!an! role
in organisa!ions o all !"#es. ;%r!hermore, mos! a%!hors agree !ha! inorma!ion s"s!ems
s%##or! decisions a! all le'els o !he organisa!ion. $he" no!ed !ha! inorma!ion s"s!ems
!echnolog" s%##or! b%siness o#era!ions in general and s#eciicall" decision making
#rocess
8
.
Along !his line o%r s!%d" ob9ec!i'e concen!ra!es on %sage o inorma!ion s"s!ems or
decision making #%r#oses. $he oc%s is !o sho& ho& organisa!ions can %se dieren! !"#es
o inorma!ion s"s!ems !o s%##or! decision making and hel# managers make be!!er
decisions. 3%r s!%d" is im#or!an! !o managers since i! hel# !hem !o %nder!sand ho&
inorma!ion !echnolog" can be %sed as a !ool !o s%##or! ma9or com#onen!s o b%siness
and decision making #rocess.
$he #a#er is organised as ollo&s< in !he ollo&ing sec!ion &e #ro'ide kno&ledge
abo%! desision making #rocess and &e !hen describe inorma!ion s"s!ems and i!s role in
decision making. $he ne(! sec!ion con!in%e &i!h !"#es o inorma!ion s"s!ems and
decision making le'els. 7as!l", &e concl%de o%r s!%d" &i!h a disc%ssion and s%gges!ions
!ha! !here is a recogni1ed need or more research in !his ield.
!" Decision making process
Decision making is a com#le( #rocess in'ol'ing man" 'ariables !ha! some!imes &e
do no! "e! %ll" %nders!and. Ho&e'er, !he scen!iic li!era!%re s%gges!s !ha! man" as#ec!s
o decision making #rocess are clear and decisions !ake #lace a! each le'el o
managemen! in an organisa!ion. In con!em#orar" decision making li!era!%re, decision
making means recogni1ing #roblems, genera!ing al!erna!i'e sol%!ions !o !he #roblems,
choosing among al!erna!i'es, and im#lemen!ing !he chosen al!erna!i'e
,
.
I! is %ni'ersall" agreed !ha! decision making is a ke" managerial ac!i'i!" and
managerial %nc!ion, mab"e !he ke" ac!i'i!" !ha! o!en decides !he a!e o organisa!ions.
Decision making is a cri!ical managerial %nc!ion
.
. Managers need inorma!ion !o si1e %#
!he #roblem, !o !ake decisions, b%! also in order !o ac! in a 'arie!" o managemen!
%nc!ions. $his !aks can #ro'e 'er" diic%l! and inorma!ion s"s!ems #la" an im#or!an!
role in s%##l"ing !he needed inorma!ion
/
. $he a!!en!ion o managers increase ra#idl"
rom one iss%e !o ano!her and &hen #roblem acc%res %s%all" !here is no! eno%gh !ime or
decision maker !o ge! dee#l" in'ol'ed in a &ide rang o iss%es. $hereore i! is %s%all" !ha!
:
James 3. Hicks, Jr.< Management Information ystems, A )ser =ers#ec!i'e, 2
rd
edi!ion, *++2, #g. .-/.
8
See< $err" 7%ce"< Management Information ystems, +
!h
edi!ion, 0--8, #g. 0+0> James 3.Hicks,
Jr.<
Management information systems, 2
rd
edi!ion, *++., #g. +-> 5ordon B. Da'is, and Margre!he H. 3lson<
Management Information ystems, ?once#!%al ;o%nda!ions, S!r%c!%re, and De'elo#men!, 0
nd
edi!ion,
*+/8, #g. ,,..
,
=a!rick Mc6eo&n< Information Technology and the "etworked !conomy, 0--+, #g. */*.
.
S. Sha9ahan and R. =ri"adharshini< Management Information ystems. A'ailable a!<
h!!#@@&&&.booksgoogle.com.
/
=a!rcik Mc6eo&n< Information Technology and the "etworked !conomy, 0--+, #g. */0.
0
inorma!ion #rocessed rom inorma!ion s"s!ems are reA%ired &hen organisa!ion gro&s
and managemen! %nc!ion is #erormed b" #eo#le &ho are s#eciali1ed !o make decision.
Decision making alls in!o one o !&o general ca!egories s"s!ems !ha! hel# %sers
+
!o
anal"1e a decision making sis!%a!ion and make some sor! o recommenda!ion
concernging ac!ion !o !ake
*-
. ?ra&or obser'ed !ha! gi'en !he na!%re o !he &ork, decision
makers !end !o rel" %#on inorma!ion !ha! is likel" !o be less acc%re !hen more ormal and
com#le( inorma!ion s"s!ems
**
.
$oda", decision making is ke" !o !he long B !erm s%r'i'al o organisa!ions. Making
good decisions isnC! s%icien!, !he organisa!ion m%s! make !hem A%ickl" as &ell. ;ail%re
!o reac! !o !he d"namic en'ironmen! o !he ne!&orked econom" and !o adeA%a!el" handle
!he increas! le'el o inno'a!ion risk can res%l! or a com#an" going o%! o b%siness.
Making a good decisions o!en reA%ires an inorma!ion s"s!ems !ha! can #ro'ide !he
decison maker &i!h da!a, inorma!ion and ans&er !o A%es!ions
*0
. Di!ho%! s%ch s%##or!
decisions ma" be based h%nches or bad inorma!ion.
Making a decision is a m%l!is!e# #rocess. A!er re'ie&ing !he dieren! models o
decision making #rocess, &e res!ric! o%r a!!en!ion and more s#eciicall" &e oc%s on !he
&ell kno&n model #ro#osed b" Herber! A. Simon &hich &ill be %sed as !he basis or
describing !he decision making #rocess. SimonCs model consis!s o !hree ma9or #hases<
in!elligence, design and choise
*2
b%! does no! go be"ong !he choice #hase. Some o!her
models o decision making incl%de im#lemen!a!ion #hase and eedback rom !he res%l!s
o !he decision
*:
. De consider !ha! i! is %se%l !o #resen! a rame&ork or e(#loring !he
na!%re od decision making !ha! incl%des an %nders!anding o se'en s!e#s o decision
making #rocess E;ig%re *F.
+
$he %ser is !he decision maker or anal"s! &ho seeks !he sol%!ion !o a #roblem.
*-
$err" 7%ce"< Management Information ystems, +
!h
edi!ion, 0--8, #g. *.0> S!e#hen Haag and Mae'e
?%mmings# Information ystems !ssentials, 0--,, #g. *22.
**
?ra&or, I.M.< Marketing $esearch and Informatoion ystems, Marke!ing and Agrib%siness, $e(!-:.
*++.. A'ailable a!< h!!#@@&&&ao.org@docre#@D20:*E@&20:*e-a.h!m
*0
=a!rcik Mc6eo&n< Information Technology and the "etworked !conomy, 0--+, #g. */-.
*2
5ordon B. Da'is and Margre!he H. 3lson< Management Information ystems, ?once#!%al
;o%nda!ions,
S!r%c!%re, and De'elo#men!, 0
nd
edi!ion, *+/8, #g. *,:.
*:
6enne!h 7a%don and Jane 7a%don< !ssentials of Management Information ystems, +
!h
edi!ion, 0-**, #g.
2,+.
2
Figure % & Model of decision making process
As ill%s!ra!ed in ;ig%re *, !he decision making #rocess begins &i!h !he deini!ion o
!he #roblem reA%iring a sol%!ion or decision. A!er deining !he #roblem &e ga!her
inorma!ion on !he #roblem. In !he ne(! #hase, &e iden!i" al!erna!i'es !o resol'e a
#roblem or !o e(ercise a com#e!i!i'e ini!ia!i'e. $he decision makers !han e'al%a!e !hese
al!erna!i'es in ligh! o cri!eria es!ablished b" !he organisa!ion. Ne(!, &e im#lemen! !he
selec!ed al!erna!i'e. Im#lemen!ing al!erna!i'e is o!en !he mos! diic%l! #ar! o decision
making and man" good decisions ha'e ailed !o sol'e !he original #roblem beca%se !he"
&ere no! s%ccess%ll" im#lemen!ed. ;inall", &e m%s! moni!or !he res%l!s o !he
im#lemen!a!ion !o #ro'ide eedback !o managemen! or re'i& o !he selec!ion cri!eria, !he
al!erna!i'es, and !he decision. An eec!i'e inorma!ion s"s!ems is necessar" !o carr" o%!
!hese ac!i'i!ies and !o #ro'ide !he inorma!ion necessar" or decision making
*8
.
#" Information systems and its role in decision making
In recen! decades !here has been an increasing recogna!ion o !he signiicance o
inorma!ion %nc!ions bo!h in organisa!ion and in econom" as a &hole. Modern
organisa!ion de'o!e a grea! deal o a!!en!ion !o ho& !ha" se! abo%! ca#!%ring, s!oring and
*8
James 3. Hicks, Jr.< Management Information ystems, A )ser =ers#ec!i'e, 2
rd
edi!ion, *++2, #g. 80.
:
#rocessing !he inorma!ion !ha! !he" %se in !heir o#era!ions and decision making
*,
.
;%r!hermore, i! has become &idel" acce#!ed !ha! inorma!ion, and inorma!ion s"s!ems
!ha! handle i!, are ke" reso%rces o an organisa!ion.
As no!ed earlier, inorma!ion !echnolog" is !echnolog" %sed !o s!ore, mani#%la!e,
dis!ib%!e or crea!e inorma!ion. 5rea!er %se o !hese !echnologies in organi1a!ion is o!en
associa!ed &i!h im#ro'ed a'ailabili!" o inorma!ion, #rod%c!i'i!", A%ali!" o &ork,
eec!i'eness and eicienc" in accom#lishing !asks, !he increase in eicienc" and
#rod%c!i'i!" as &ell as s%bseA%en! red%c!ion o cos!s bro%gh! abo%! b" inorma!ion
!echnolog" is leading !o !he crea!ion o ne& #rod%c!s, ne& ser'ices and dis!rib%!ion
channels &i!hin !radi!ional ind%s!ries, &i!h inno'a!i'e b%siness models and &hole ne&
ind%s!ries. Inorma!ion !echnolog" can con!rib%!e !o income genera!ion and #o'er!"
red%c!ion and enables #eo#le and en!er#rises !o ca#!%re economic o##or!%ni!ies b"
increasing #rocess eicienc", #romo!ing #ar!ici#a!ion in e(#anded economic ne!&orks
*.
.
$hro%gh !he %se o inorma!ion s"s!ems and rela!ed !echnologies organisa!ions can
im#ro'e b%siness decision making and ser'ice A%ali!" or increase eeciencies and
#rod%c!i'i!" and !hereb" increase #roi!. In ei!her case, eec!i'e %se o inorma!ion
s"s!ems !echnolog" in'ol'es changes !o !he organisa!ion. B%sinesses can red%ce
o#era!ional cos!s b" decreasing ma!erial, can also %se more and be!!er inorma!ion !o
im#ro'e !he 'al%e o !heir #rod%c!s, and can make be!!er decisions. $hese charac!ec!ics
s%gges!s !ha! inorma!ion s"s!ems !echnolog" has !he #o!en!ial !o be a #o&er%l enabler
o de'elo#men! o organisa!ions and b%sinesses.
According !o ?hae", Boci9, 5reasle" and Hickie, inorma!ion s"s!ems are !he means
b" &hich organisa!ions and #eo#le, %sing inorma!ion !echnologies, ga!her, #rocess, s!ore,
%se and dissemina!e inorma!ion
*/
. $he %se o inorma!ion !echnologies and inorma!ion
s"s!ems is o!en %nders!ood !o be changing !he &a" !ha! b%siness, go'ernmen! and
socie!" &ork and i! is a dominan! belie !ha! !he &ides#read de#lo"men! o inorma!ion
!echnolog" &ill lead !o benei!s or all as &ell as !here is some e'idence !ha! inorma!ion
!echnolog" has a signiican! eec! on !he s!r%c!%re o !he organisa!ion
*+
.
Dhen inorma!ion !echnolog" is %sed in organisa!ions, i! o!en goes b" !he name
inorma!ion s"s!ems
0-
. In !his #a#er !he !erm inorma!ion s"s!ems reeres !o s"s!ems !ha!
#rocess !he inorma!ion !ha! managers and o!her em#l"ees combine &i!h kno&ledge !o
make decisions. 3rganisa!ions %se inorma!ion s"s!ems in man" &a"s !o red%ce risks and
hel# managers make decisions. Mc6eo&n, obser'ed !ha! inorma!ion s"s!ems are %sed in
organisa!ions or !hree #%r#oses or %nc!ions< handling !he #resen!, remembering !he #as!
and #re#aring or !he %!%re E;ig%re 0F
0*
. Similarl", A'gero% and ?ornord, #oin!ed o%!
!ha! !he irs! domain o inorma!ion s"s!ems is concered &i!h adeA%a!e inorma!ion
handling !o s%##or! !he 'ario%s !asks o organisa!ion
00
.
*,
?hrisan!hi A'gero% and $on" ?ornord< 'eveloping Information ystems, ?once#!s, Iss%es and =rac!ice,
0
nd
edi!ion, *++/, #g. :0.
*.
h!!#<@@&&&.#o!-ini!.org@rame&ork@#ages@0.2.0.h!ml
*/
=a%l Boci9, Da'e ?hae", Andre& 5reasle" and Simon Hickie< (usiness Information ystems,
$echnolog", De'elo#men! and Managemen! or !he e-b%siness, 0
nd
edi!ion, 0--2, #g. :2.
*+
$err" 7%ce"< Management Information ystems, +
!h
edi!ion, 0--8, #g. *.0> S!e#hen Haag and Mae'e
?%mmings< Information ystems !ssentials, 0--,, #g. 02.-0:-.
0-
Inorma!ion s"s!ems %ses !echnolog" in !he orm o hard&are, so!&are and comm%nica!ions links.
0*
=a!rick Mc6eo&n< Information Technology and the "etworked !conomy, 0--+, #g. */-.
00
?hrisan!hi A'gero% and $on" ?ornord< 'eveloping Information ystems, ?once#!s, Iss%es and =rac!ice,
0
nd
edi!ion, *++/, #g. 00+.
8
Figure ) & The information systems cycle
$he main 9ob o decision maker is !o make decisions and inorma!ion #rocessed b"
inorma!ion s"s!ems is linked !o decision making. According !o Haag, Bal!1an, and
=hili#s, b%siness ac!i'i!ies can no! be reali1ed &i!ho%! !he %se o inorma!ion s"s!ems
!echnolog" and managers can no! make A%ali!" decisions
02
. $his im#lies a rela!ionshi#
be!&een inorma!ion s"s!ems and decison making #roces.
$o %nders!and !he rela!ionshi# be!&eeen inorma!ion s"s!ems and decision making
#rocess, &e m%s! look a! se'eral s!%dies o &ell kno&n and leading a%!hors on
inorma!ion s"s!ems &ho o%nd !ha! decision making is a com#le( #rocess and
inorma!ion s"s!ems can be %sed !o im#ro'e decision making
0:
. Similarl", 7%ce"
em#hasises !he decision oc%s o his deini!on o inorma!ion s"s!ems
08
. He obser'ed !ha!
Ginorma!ion s"s!ems is a s"s!em !o con'er! da!a rom in!ernal and e(!ernal so%rces in!o
inorma!ion and !o comm%nica!e !ha! inorma!ion in an a##ro#ria!e orm !o managers a!
all le'els in all %nc!ions !o enable !hem !o make !imel" and eec!i'e decisions or
#lanning and con!rolling !he ac!i'i!ies or &hich !he" are res#onsibleG. ;%r!hermore,
inorma!ion s"s!ems #la" an cr%cial role in s%##or!ing all !"#es o decisions< s!r%c!%red,
semis!r%c!%red and %ns!r%c!%red E$able *F
0,
.
Table %* Types of decision making
02
S!e#hen Haag, =aige Bal!1an and Amm" =hilli#s< (usiness 'riven Technology, 0--,, #g. ..
0:
See< 6ene!h 7a%don and Jane 7a%don< !ssentials of Management Information ystems, 0-**, #g. 2,.>
5ordon Da'is and Margre!he H. 3lson< Management Information ystems, ?once#!%al ;o%nda!ions,
S!r%c!%re, and De'elo#men!, *+/8, #g. 2,/.
08
$err" 7%ce"< Management Information ystems, +
!h
edi!ion, 0--8, #g. *.+.
0,
$able * com#ares s!r%c!%red and %ns!r%c!%red decisions in !erms o inorma!ion reA%ired, iden!iica!ion o
al!erna!i'es and selec!ion o al!erna!i'e.
,
Decisions can be #rogrammed or so called s!r%c!%red decisions and %n#rogrammed
also kno&n as %ns!r%c!%red Ead hocF decisions
0.
. According !o 7a%don and 7a%don
decisions are clasiied as s!r%c!%red, semis!r%c!%red and %ns!r%c!%red
0/
. $he ke" #oin!s
men!ioned so ar can also be o%nd in a s!%d" #%blished b" Da'is and 3lson
0+
. $he"
#oin!ed o%! !ha! s!r%c!%red decisions are made b" ollo&ing a se! o r%les, %s%all" on a
re#e!i!i'e basis. $he !"#e o #roblem adressed b" s!r%c!%red decisions is es#eciall"
amenable !o sol%!ionb" com#%!eri1ed ma!hema!ical models. In con!ras!, %ns!r%c!%red
decisions in'ol'e com#le( si!%a!ions and o!en m%s! be made on a once onl" basis %sing
an" a'ailable inorma!ion. No clear c%! sol%!ion me!ho!odologies e(is! or !hese
decisions, and !heir resol%!ion reA%ires a high degree o h%man in!i!ion and 9%dgemen!.
I! is o!en s!a!ed !ha! inorma!ion s"s!ems is a !ool !o hel# managers b" %sing
a'ailable inorma!ion or ac!ion and !o acili!a!e decision making and one o !he main
co%n!rib%!ions o inorma!ion s"s!ems has been !o im#ro'e decision making
2-
. Managers
&ho %nders!and &ha! inorma!ion s"s!em is, and &ha! inorma!ion s"s!em can and canno!
do, are in !he bes! #osi!ion !o hel# !heir organisa!ion s%cceed and make be!!er decisions
2*
.
Research o'er !he "ears has conirmed !he inl%ence o inorma!ion s"s!ems
!echnolog" on !he &a" ho& b%sinesses o#era!e. SriHa and S#remiH, em#hasi1e !ha!
inorma!ion s"s!ems can inl%ence no! onl" b%siness #rocess, b%! also decision making
#rocess
20
. Some a%!hors, ho&e'er, arg%e !ha! !ha! inorma!ion !echnolog"
22
has !he
#o!en!ial !o change !he s!r%c!%re and #erormance o organisa!ion and h%man
en!er#rises
2:
. 3n !he o!her hand 7%ce", #oin!ed o%! !ha! research o'er man" "ears has
conirmed a signiican! inl%ence o inorma!ion !echnolog" on !he s!r%c!%re o
organisa!ions and on !he &a" !he" o#era!e
28
. Indeed inorma!ion s"s!ems !echnolog" deals
&i!h !he inorma!ion reA%iremen!s o !he b%siness #rocesses o organisa!ion and has !he
#o!en!ial !o energise b%siness s"s!ems and e'en im#ro'e decision making.
0.
=a!rick Mc6eo&n< Information Technology and the "etworked !conomy, 0--+, #g. */0.
0/
6enne!h 7a%don and Jane 7a%don< !ssentials of Management Information ystems, +
!h
edi!ion, 0-**,
#g.2,/.
0+
5ordon B. Da'is and Margre!he H. 3lson< Management Information ystems, ?once#!%al
;o%nda!ions,
S!r%c!%re, and De'elo#men!, 0
nd
edi!ion, *+/8, #g. *,/.
2-
6enne!h 7a%don and Jane 7a%don< !ssentials of Management Information ystems, +
!h
edi!ion, 0-**, #g.
2*
S!e#hen Haag, =aige Bal!1an and Amm" =hilli#s< (usiness 'riven Technology, 0--,, #g. +8.
20
Ielimir SriHa and Mario S#remiH< Informaci+skom tehnologi+om do poslovnog uspeha, 0---. #g.
22
$echnologies are changing ra#idl" and rele'an! marke! bo%ndaries are l%id and diic%l! !o deine.
2:
See< 5ordon B. Da'is and Margre!he H. 3lson< Management Information ystems, ?once#!%al
;o%nda!ions, S!r%c!%re, and De'elo#men!, 0
nd
edi!ion, *+/8, #g. 2,/> James 3. Hicks, Jr.< Management
Information ystems, 2
rd
edi!ion, *++2, #g.+-.
28
$err" 7%ce"< Management Information ystems, +
!h
edi!ion, 0--8, #g. *--.
.
A##lica!ion o inorma!ion s"s!ems in decision making as &ell as in o!her orms o
b%siness bro%gh! ma9or changes in !he decision making #rocess. $he a##lica!ion o
inorma!ion s"s!ems in decision making in !oda"Cs com#le( b%siness &orld is #ossible
onl" &hen inorma!ion s"s!ems are based on a com#%!er s"s!em s%##or!. 6roenke and
Ha!ch, #oin!ed o%! !ha! !he ke" %nc!ions o inorma!ion s"s!ems can some!imes be
#erormed &i!ho%! !he %se o a com#%!er. B%!, !heir indings em#hasi1e !ha! com#%!ers
enhance o%r #rocessing abili!ies so m%!ch !ha! mos! inorma!ion s"s!ems do incl%de
com#%!ers
2,
.
$" Types of information systems and decision making
No do%#!, !he *+/-s &ere golden "ears in !he area o inorma!ion s"s!ems %sage in
decision making. As no!ed earlier, i! is almos! a %ni'ersal ass%m#!ion in !he li!era!%re !ha!
inorma!ion !echnolog" has made a signiican! im#ac! in decsion making and !he
e'ol%!ion o !he %sage o inorma!ion s"s!ems !echnolog" in organisa!ion or decision
making #%r#oses has been doc%men!ed. I! is im#or!an! !o reali1e !ha! inorma!ion s"s!ems
in !he real &orld are !"#icall" in!egra!ed combina!ions o se'eral !"#es o inorma!ion
s"s!ems.
$here are o%r !"#es o inorma!ion s"s!ems or s%##or!ing !he dieren! le'els o
decision making
2.
. Inorma!ion s"s!ems s#eciicall" designed !o hel# managers make
be!!er decisions incl%de a 'arie!" o !"#es o inorma!ion s"s!ems, &hich o!en go b"
dieren! names s%ch as< decision support systems EDSSF
2/
, group decision support
systems E5DSSF, Management Information ystems EMISF and executive support systems
EESSF. $his inorma!ion s"s!ems ha'e s#eciic roles in !he organisa!ion !ha! are o!en
asocia!ed &i!h 'ario%s managerial le'els. Inorma!ion s"s!ems !ha! s%##or! decision
making are commonl" reerred and gro%#ed !oge!her %nder !he broad !erm as decision
support systems
2+
.
3n !he o!her hand se'eral a%!hors agree !ha! 'ario%s inorma!ion s"s!ems became
a'ailable !o s%##or! managemen! and decision making, and enable organisa!ion !o
enhance !heir eicienc" and #rod%c!i'i!"
:-
. =erha#s more im#or!an!l", managemen!
inorma!ion s"s!ems EMISF deal &i!h #rocessing da!a !ha! alread" e(is! in o#era!ional
2,
Da'id 6roenke and Richard Ha!ch< (usiness Information ystems, An In!rod%c!ion, 8
!h
edi!ion, *++2, #g.
*+.
2.
6enne!h 7a%don and Jane 7a%don< !ssentials of Management Information ystems, +
!h
edi!ion, 0-**, #g.
2.*.
2/
$he !erm decision s%##or! s"s!em EDSSF, like managemen! inorma!ion s"s!ems EMISF and o!her !erms in
!he ield o inorma!ion s"s!ems, is a con!en! ree e(#ression !ha! means dieren! !hings !o dieren! #eo#le.
$hereore, al!ho%gh !here is no %ni'ersall" acce#!ed deini!ion o DSS, b" some is %sed as a s#eciic !ool
and b" o!hers as an %mbrella !erm !o describe an" com#%!eri1ed s"s!em !ha! s%##or! decision making in an
organisa!ion. ESee< Eraim $%rban, Ja" E. Aronson, J. and $ing =eng 7iang< 'ecision upport ystems and
Intelligent ystems, .
!h
Edi!ion, 0--8, #g. 2-+.F.
2+
=a!rick Mc6eo&n# Information Technology and the "etworked !conomy, 0--+, #g. */2.
:-
See< $err" 7%ce"# Management Information ystems, +
!h
edi!ion, 0--8, #g. *.+ > James 3. Hicks,
Jr.<
Management Information ystems, 2
rd
edi!ion, *++2, #g. 2-.> 5ordon B. Da'is and Margre!he H. 3lson<
Management Information ystems, ?once#!%al ;o%nda!ions, S!r%c!%re, and De'elo#men!, 0
nd
edi!ion,
*+/8, #g. :*-.
/
s"s!ems, in order !o im#ro'e !he managerial eicienc" o organisa!ion. Managemen!
inorma!ion s"s!ems EMISF ser'e !he managemen! le'el o !he organisa!ion, #ro'iding
managers &i!h re#or!s and o!en online access !o !he organisa!ionCs c%rren! #erormance
and his!orical records. MIS #ro'ide inorma!ion on organisa!ion #erormance !o hel#
managers moni!or and con!rol !he b%siness, o!en in !he orm o re#or!s based on da!a
s%mmari1ed rom transaction processing systems E$=SF, &hich record and #rocess da!a
res%l!ing rom b%siness !ransac!ions. $he basic !ransac!ion da!a rom $=S are com#ressed
and are %s%all" #resen!ed in long re#or!s !ha! are #rod%ced on a reg%lar sched%le. Mos!
MIS s%##or! s!r%c!%red decisions and some semis!r%c!%red decisions
:*
.
Table ). Types of information systems

$able 0 s%mmari1es !he ea!%res o !he o%r !"#es o inorma!ion s"s!ems. I! sho%ld be
no!ed !ha! each o !he dieren! s"s!ems ma" ha'e com#onen!s !ha! are %sed b"
organi1a!ional le'els and gro%#s o!her !han i!s main cons!i!%encies.
Decision s%##or! s"s!ems EDSSF are !he na!%ral #rogression rom !ransac!ion
#rocesing s"s!ems E$=SF and managemen! inorma!ion s"s!ems
:0
EMISF. Decision s%##or!
s"s!ems EDSSF also ser'e !he mamagemen! le'el o !he organisa!ion and hel# managers
make decisions !ha! are %niA%e, ra#idl" changing, and eas" s#eciied in ad'ance. DSS
combine da!a, anal"!ical models, !ools and %ser-riendl" so!&are in!o a #o&er%l s"s!em
and address #roblems &here !he #roced%re or arri'ing a! a sol%!ion ma" no! be %ll"
#redeined in ad'ance.
I! is im#or!an! !o no!e !ha! &hile managemen! inorma!ion s"s!ems EMISF are orien!ed
almos! e(cl%si'el" !o in!ernal, no! en'ironmen!al or e(!ernal so%rces, decision s%##or!
s"s!ems EDSSF %se in!ernal inorma!ion rom $=S and MIS and o!en bring in
inorma!ion rom e(!ernal so%rces. DSS are in!erac!i'e, com#%!er based inorma!ion
s"s!ems !ha! %se decision models and s#eciali1ed da!abase !o assis! !he decision making
#rocess o managerial %sers. DSS can s%##or! semis!r%c!%red or %ns!r%c!%red decision
making
:2
.
:*
6enne!h 7a%don and Jane 7a%don< !ssentials of Management Information ystems, +
!h
edi!ion, 0-**,
#g..0.
:0
Dimi!rios B%halis< eTourism, Information Technology for trategic Tourism Management, 0--2, #g. *2.
:2
5ordon B. Da'is and Margre!he H. 3lson< Management Information ystems, ?once#!%al
;o%nda!ions,
S!r%c!%re, and De'elo#men!, 0
nd
edi!ion, *+/8, #g. 2.-.
+
5ro%# decision s%##or! s"s!ems E5DSSF, is a generic !erm !ha! incl%des all orms o
collabora!i'e com#%!ing. 5DSS e'ol'ed a!er inorma!ion !echnolog" researchers
recogni1ed !ha! !echnolog" co%ld be de'elo#ed !o s%##or! !he man" ac!i'i!ies normall"
occ%ring a! ace-!o-ace mee!ings
::
. Al!ho%gh 5DSS s%##or! gro%# &ork #rocesses and
hel# #eo#le mee!ing !oge!her in a gro%# arri'e a! decisions, is s!ill considered a s#eciall"
designed inorma!ion s"s!em and since !he mid-*++-s man" o !he s#ecial ca#abili!ies o
5DSS ha'e been embedded in #rod%c!i'i!" !ools
:8
.
Figure ,* The four ma+or types of information systems
;ig%re 2 #ro'ides e(am#les o $=S, DSS, MIS, and ESS, sho&ing !he le'el o !he
organi1a!ion and b%siness %nc!ion !ha! each s%##or!s. Senior managers %se e(ec%!i'e
s%##or! s"s!ems EESSF. ESS are managemen! inorma!ion s"s!ems !ailored !o !he s!ra!egic
inorma!ion needs o !o# managemen! !o hel# !hem make decisions. $he" address
nonro%!ine decisions and are designed !o incor#ora!e da!a abo%! e(!ernal e'en!s, b%! !he"
also dra& s%mmari1ed inorma!ion rom MIS and DSS. ESS il!er, com#ress, and !rack
cri!ical da!a, dis#la"ing !he da!a o grea!es! im#or!ance !o senior managers. De sho%ld
em#hasi1e !ha! %nlike o!her !"#es o inorma!ion s"s!ems, ESS are no! designed !o sol'e
s#eciic #roblems. Ins!ead, ESS #ro'ide a generali1ed com#%!ing and comm%nica!ions
ca#aci!" !ha! can be a##lied !o a changing arra" o #roblems. ESS hel# senior managers
&i!h %ns!r%c!%red #roblems b" combining da!a rom in!ernal and e(!ernal so%rces
:,
.
::
Eraim $%rban, Ja" E. Aronson and $ing =eng 7iang< 'ecision upport ystems and Intelligent ystems,
.
!h
edi!ion, 0--8, #g. 2.+.
:8
;or e(am#le, Microso! Ne!Mee!ing is #ar! o Dindo&s, and mos! o 5DSS are eas" !o %se and #ro'ide
s%##or! or ac!i'i!ies like idea genera!ion, conlic! resol%!ion, and 'o!ing.
:,
6enne!h 7a%don and Jane 7a%don< !ssentials of Management Information ystems, +
!h
edi!ion, 0-**, #g.
2.+.
*-
%onclsion
De'elo#men! in inorma!ion !echnolog" in o%r age and e(#onen!ial gro&!h in %se has
bro%gh! im#or!an! changes in !he needs o organisa!ions and b%sinesses. In o%r #a#er &e
sho& !ha! !o&ards !he end o !he !&en!ie!h cen!r", inorma!ion s"s!ems !echnolog" has
!ransormed !he organisa!ion s!r%c!%re and im#ro'ed decision making #rocess. I! is
in!eres!ing !o no!e !ha! mos! a%!hors links inorma!ion s"s!ems !echnolog" %sage !o
decision making #rocess and conirmed !he inl%ence o inorma!ion !echnolog" on
organisa!ional s!r%c!%re
:.
. Also, li!era!%re sho&s !ha! !here is a recogni1ed need or more
research in !his ield in order !o rise o%r %nders!anding o %nc!ioning o modern
organisa!ions and b%sinesses. Addi!ionall", !oda" inorma!ion s"s!ems %sage !o s%##or!
decision making #rocess is im#era!i'e. 3rganisa!ions !ha! do no! kno& !he im#or!ance o
inorma!ion s"s!ems in decision making can be s%ccess%l in !he shor! !erm, b%! ne'er
gain s!ra!egic benei!s rom inorma!ion s"s!ems and i!s %se. As a concl%sion o !his
#a#er, i! is #ossible !o s!a!e !ha! more kno&ledge abo%! eec!i'e %se o inorma!ion
!echnolog" !o im#ro'e decision making is needed and more a!!en!ion sh%ld be #aid !o
%sage o inorma!ion s"s!ems or decision #%r#oses.
&eferences:
*. ?hrisan!hi A'gero% and $on" ?ornord< 'evelopment of Information ystems,
?once#!s, Iss%es and =rac!ice, 0
nd
Edi!ion, =algra'e, Ne& Jork, *++/.
0. ?ra&or, I.M. E*++.F Marketing $esearch and Information ystems, Marke!ing
and Agrib%siness, $e(!-:. A'ailable a!<
h!!#@@&&.ao.org@docre#@D20:*E@&20:*e-a.h!m
2. Da'id 6roenke and Richard Ha!ch< (usiness information systems, An
In!rod%c!ion, 8
!h
edi!ion, Ne& Jork, Mc 5ro& Hill, *++2.
:. Dimi!rios B%halis< eTourism, Information Technology for trategic Tourism
Management, =ren!ice Hall, Edinb%rg, England, 0--2.
8. Eraim $%rban, Ja" E. Aronson and $ing =eng 7iang< 'ecision upport ystems
and Intelligent ystems, .
!h
Edi!ion, =earson =ren!ice-Hall, Ne& Jerse", 0--8.
,. 5ordon Da'is and Margre!he H. 3lson < Management information systems,
?once#!%al ;o%nda!ions, S!r%c!%re and De'elo#men!, 0
nd
Edi!ion, Mc5ra& Hill-
Book ?o, )SA. *+/8.
.. h!!#<@@&&&.#o!-ini!.org@rame&ork@#ages@0.2.0.h!ml
/. James A. 3CBrien and 5eorge Marakas< Management Information ystems,
Mc5ra&-Hill, Ne& Jork. 0-**.
+. James 3. Hicks, Jr.< Management information ystems, A )ser =ers#ec!i'e, 2
rd
Edi!ion, )SA, *++2.
*-. 6enne!h 7a%don and Jane 7a%don< !ssentials of Management Information
ystems, +
!h
Edi!ion, =earson, Ne& Jerse", 0-**.
**. =a!rick Mc6eo&n< Information Technology and the "etworked !conomy, K%rich,
S&i!1eland, 0--+.
*0. =a%l Boci9, Da'e ?hae", Andre& 5reasle" and Simon Hickie< (usiness
Information ystems, $echnolog", De'elo#men! and Managemen! or !he e-
b%sinessG, 0
nd
Edi!ion, England, 0--2.
:.
6enne!h 7a%don and Jane 7a%don< !ssentials of Management Information ystems, +
!h
edi!ion, 0-**, #g.
7%ce"< Managemen! Inorma!ion S"s!ems, +
!h
edi!ion, 0--8, =a!rick Mc6eo&n< Information Technology
and the "etworked !conomy, 0--+, #g,
**
*2. S. Sha9ahan and R. =ri"adharshini< Management Information ystems, Ne& Age
In!erna!ional =%blishers, Ne& Delhi, ISBN-/*-00:-*8:+--. A'ailable a!<
h!!#@@&&&.booksgoogle.com.
*:. S!e#hen Haag and Mae'e ?%mmings< Information ystems !ssentials, Mc5ra&-
Hill, Ne& Jork. 0--,.
*8. S!e#hen Haag, =aige Bal!1an and Am" =hilli#s< (usiness 'riven Technology,
Mc5ra&-Hill, Ne& Jork. and ?%mmings, 0--,.
*,. $err" 7%ce"< Management Information ystems, +
!h
Edi!ion, $homson 7earning,
7ondon. 0--8.
*.. Ielimir SriHa and Mario S#remiH< Informaci+skom tehnologi+om do poslovnog
usp+eha, Sinergi9a, Kagreb, 0---.
*0