Managing Organizations Informed decision making as a prerequisite for success

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Managing OrganizationsInformed decision making
as a prerequisite for success
Vision
Mission
Values, Purpose, Structure, Politics,
Environment, etc.
Givens
Strategic Direction
Policies, Goals, and Objectives
What should be done ?
Decision Making
Analytics, Decision Making
When and how ??
Implementation
Project Management
Action
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Managerial Decision MakingInformation Technology
Solutions for Improving Effectiveness
Structuring Relationships Problem
Representation Generation of Alternatives
Variables (Measures and Estimates) Probabilities
and Estimates
Spreadsheet Models for managing complex
relationships and detail
Decision Analysis and Influence Diagrams for
Visualizing Models and Choices
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Modeling Decision SituationsProcess for
Developing Meaningful and Robust Models
Fundamental and Means Objectives (feasible?)
Values, Goals, Strategies, etc
Objective Hierarchies
Decision, Intermediate, and Outcome Variables
Data, Probabilities, Distributions
Variables and Measures
Influence Diagrams and Decision Trees
Situation Structuring
Spreadsheet Modeling Statistical, OR, Financial,
Acctg. Models
Modeling Relationships
Testing and Validation
DSS
Implementation and Use
Analyze Synthesize
Communicate
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The Decision Analysis ProcessTools for
Visualizing and Evaluating Alternatives
Identify decision situation and understand
objectives
Decision, Chance, and Consequence Variables Arcs
and Relationship Formulas
Model Representation
Identify alternatives
Tornado Diagrams N-way Sensitivity
Deterministic Analysis

• Decompose and model
• problem structure
• uncertainty
• preferences

Uncertainty Assessment Risk Profiles
Probabilistic Analysis
Sensitivity Analyses
Choose best alternative
Evaluation of Alternatives
EMV, NPV, etc.
Implement Decision
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Model Management SystemsTools for transforming
data into information
Creates models easily and quickly, either from
scratch or from existing models or from building
blocks.   Allows users to manipulate the models
so that they can conduct experiments and
sensitivity analysis ranging from "what-if" to
"goal seeking".   Stores and manages a wide
variety of different types of models in a logical
and integrated manner.   Accesses and integrates
the model building blocks.   Catalogs and
displays the directory of models for use by
several individuals in the organization.   Tracks
models, data, and application usage.   Interrelate
s models with appropriate linkages through the
database.   Manages and maintains the model base
with management functions analogous to database
management store, access, run, update, link,
catalog, and query.
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Types of ModelsTools for transforming data into
information

• Accounting/financial models, most business models
  are described by accounting and financial
  relationships.
• Optimization, such as linear/quadratic
  programming, used when there is a
• set of constraints that must be considered before
  the objective is optimized through a solver.
• Statistical models for forecasting, used to take
  historical data and derive relationships in order
  to predict probabilistic future experience. Used
  for modeling uncertain relationships.
• Analog models - simplification of reality.
  Examples include pie charts, speedometers, and
  road maps.
• Symbolic models include Simulation, Algebraic,
  and Spreadsheet models. These feature easy
  manipulation and modification, difficult
  underlying comprehension, however high ease of
  interpretation.