Decision Support for the IT ManagerDecision Support for the IT Manager

John H. Saunders, Ph.D.John H. Saunders, Ph.D.

AgendaAgenda

Roles and Decision Processes of the IT Roles and Decision Processes of the IT ManagerManager

Cognitive Limitations and BiasesCognitive Limitations and Biases Aides/Tools/Techniques for the Decision Aides/Tools/Techniques for the Decision

MakerMaker Exercise in Technology SelectionExercise in Technology Selection

But first – a quiz!But first – a quiz!

Role of the CIO Must manage semi-structured and Must manage semi-structured and

unstructured problems: unstructured problems: MissionMission BudgetBudget Politics & approvalsPolitics & approvals Skills & TrainingSkills & Training ContractorsContractors TechnologyTechnology

High Level Project ManagementHigh Level Project Management

All involve evaluation!All involve evaluation!

The process of decision-making

Intelligence Intelligence Design,Design, ChoiceChoice ImplementationImplementation

Unaided decision-making is often reduced Unaided decision-making is often reduced to “satisfising”to “satisfising”

Source: Herbert SimonSource: Herbert Simon

Tools are available for each stage

Do managers need support for making decisions?

Cognitive LimitsCognitive Limits OverconfidenceOverconfidence Perceptual LimitationsPerceptual Limitations Framing LimitationsFraming Limitations

Decision environment:Decision environment: Number of alternatives is Number of alternatives is increasingincreasing,, Time pressure is Time pressure is increasingincreasing,, Need for analysis is Need for analysis is increasingincreasing,, Remote access is Remote access is increasingincreasing..

I’m good at m

aking decisions. I know

wh

at I’m talkin

g abou

t.I’m

good at making decisions. I kn

ow w

hat I’m

talking ab

out.

Bootstrapping - decision supportBootstrapping - decision support

Intuitive Bootstrap ObjectiveAcademic perf of gradstudents .19 .25 .54Life expectancy ofcancer patients -.01 .13 .35Changes in stock prices

.23 .29 .80Mental illness usingpsych tests .28 .31 .46Grades & attitudes inpsych course .48 .56 .62Business failures usingfinancial ratios .50 .53 .67

Source:Source: Decision Traps Decision Traps

Managers have IT support

For the For the intelligenceintelligence phase of phase of decision-making:decision-making: e-mail,e-mail, internet access,internet access, spreadsheets,spreadsheets, Executive Information Systems (EIS), Executive Information Systems (EIS), portals,portals, dashboards,dashboards, data mining,data mining, model managementmodel management

Digital Dashboards

Portals

Visualization

Analysis paralysis/Information OverloadAnalysis paralysis/Information Overload

MoreMoreInfoInfo

BetterBetterDecisionDecision

An Effective Decision Process focuses on what is important,focuses on what is important, is logical and consistent,is logical and consistent, acknowledges acknowledges subjectivesubjective & & objectiveobjective factors, factors, requires minimal information and analysis,requires minimal information and analysis, guides the gathering of relevant information,guides the gathering of relevant information, is straightforward yet flexible.is straightforward yet flexible.

Source: Source: Smart ChoicesSmart Choices

Technologies for decision supportTechnologies for decision support

TechniqueTechnique Functional Economic Functional Economic

AnalysisAnalysis Cost-benefit analysisCost-benefit analysis Project managementProject management Linear ProgrammingLinear Programming Analytic Hierarchy Analytic Hierarchy

ProcessProcess

Purpose(s)Purpose(s) resource allocationresource allocation business process business process

improvementimprovement capital planningcapital planning save time,$ save time,$ semi-structured & semi-structured &

unstructured problemsunstructured problems

How?How? Create a Hierarchy of Goals and ObjectivesCreate a Hierarchy of Goals and Objectives Insert Possible Solutions, Uncertainties, Decision MakersInsert Possible Solutions, Uncertainties, Decision Makers Evaluate through pairwise or other comparative methodsEvaluate through pairwise or other comparative methods Synthesize the ResultsSynthesize the Results Perform Sensitivity AnalysisPerform Sensitivity Analysis

Why? - It provides:Why? - It provides: Qualitative and Quantitative EvaluationQualitative and Quantitative Evaluation Relative comparisonsRelative comparisons A Measure of inconsistencyA Measure of inconsistency Implemented in softwareImplemented in software

Expert Choice, Criterium, othersExpert Choice, Criterium, others Many proven usesMany proven uses

shows flexibilityshows flexibility

A Generic Tool - Analytic Hierarchy Process

For detail seeFor detail see::http://mdm.gwu.edu/forman/

Where has AHP been used?Where has AHP been used?

IBM Benchmarking for Baldridge AwardIBM Benchmarking for Baldridge Award IBM A/S 400 ConfigurationIBM A/S 400 Configuration Boeing Supercomputer SelectionBoeing Supercomputer Selection Digital Outsourcing Vendor SelectionDigital Outsourcing Vendor Selection U.S. Army Base ClosingsU.S. Army Base Closings U.S. Navy CVX PlatformU.S. Navy CVX Platform Israeli Air Force Fighter SelectionIsraeli Air Force Fighter Selection THOUSANDS of other examples THOUSANDS of other examples

http://www.expertchoice.com/testimonials/

Which PDA should the our College adopt, pick Which PDA should the our College adopt, pick any 3, e.g.any 3, e.g. Casio Cassiopeia E-15Casio Cassiopeia E-15 Palm Vx Palm Vx Handspring Visor DeluxeHandspring Visor Deluxe

A ChallengeA Challenge

Only strict requirement is that the price should be under $400. For information on these options go to CNET (URL below) and click on handhelds http://computers.cnet.com/

An ExerciseAn Exercise Objectives:

To provide a mechanism for understanding the theoretical concepts behind To provide a mechanism for understanding the theoretical concepts behind individual decision technologyindividual decision technology

To provide hands-on experience in the evaluation of a similar issue facing many To provide hands-on experience in the evaluation of a similar issue facing many members of the CIO communitymembers of the CIO community

Methodology: 1) We will first work individually and create a simple model - selecting a car.1) We will first work individually and create a simple model - selecting a car. 2) You will then be divided into a group - each containing 3 members. 2) You will then be divided into a group - each containing 3 members. 3) Your Goal is to: “Select a PDA Tool”3) Your Goal is to: “Select a PDA Tool” 4) You may receive a demonstration of the Next Generation Tools – e.g. a) Jornada 4) You may receive a demonstration of the Next Generation Tools – e.g. a) Jornada

b) Palm c) Handspringb) Palm c) Handspring 5) Your group should create four criteria necessary to judge selection5) Your group should create four criteria necessary to judge selection 6) One person in your group, with the aid of the others should start up & create the 6) One person in your group, with the aid of the others should start up & create the

hierarchial model using Expert Choice, hierarchial model using Expert Choice, 7) As a group you would do the evaluation using the WhatIF feature.7) As a group you would do the evaluation using the WhatIF feature. 8) If time allows your group will present its results to the class and justify the 8) If time allows your group will present its results to the class and justify the

rationale for its decisionrationale for its decision

Summary

There is a need for improved decision-making,There is a need for improved decision-making, The environment dictates improved methods.The environment dictates improved methods. The information infrastructure is being developed.The information infrastructure is being developed. Improved decision-making can be an acquired Improved decision-making can be an acquired

skill.skill.

ApplicationsApplications ERP Software SelectionERP Software Selection Steers the Direction for Special Warfare Training Steers the Direction for Special Warfare Training Ford Drives Ahead Ford Drives Ahead AHP Helps San Diego Padres Reach World Series AHP Helps San Diego Padres Reach World Series Streamlines Clinical IS Acquisition Streamlines Clinical IS Acquisition AHP in Environmental Impact Evaluations (EIE) AHP in Environmental Impact Evaluations (EIE) Decisions in Offshore Development Projects Decisions in Offshore Development Projects Measuring and Interpreting Information Measuring and Interpreting Information Budget Allocation at Woods Hole Fisheries Budget Allocation at Woods Hole Fisheries Selecting Working Fluids - An Engineering Application Selecting Working Fluids - An Engineering Application Managing National Park Service Resources Managing National Park Service Resources Formulating Policies for the Sea of Japan Formulating Policies for the Sea of Japan AHP and CASEAHP and CASE Internal Control Judgments by EDP Auditors Internal Control Judgments by EDP Auditors Multicriteria Decision Making with SAS Software Multicriteria Decision Making with SAS Software Application of AHP to Quality ManagementApplication of AHP to Quality Management Budget AllocationBudget Allocation Management in Non-Profit Organizations Management in Non-Profit Organizations Expert Military Judgments Expert Military Judgments Ranking Architecture Alternatives for the FAARanking Architecture Alternatives for the FAA Using the AHP to Develop and Disseminate Medical Guidelines Using the AHP to Develop and Disseminate Medical Guidelines Optimizing Quality Costs Through Expert Choice Optimizing Quality Costs Through Expert Choice Selection of Water-Supply Projects Under Drought Selection of Water-Supply Projects Under Drought Investment Analysis Application Investment Analysis Application New Bridge to Environmental Application New Bridge to Environmental Application Choosing the Lunar Lander Propulsion System Choosing the Lunar Lander Propulsion System Police Officers Evaluation Police Officers Evaluation

Downsizing Military Facilities Downsizing Military Facilities Patient versus Physician Preferences Patient versus Physician Preferences Selection of Flood Control Projects Selection of Flood Control Projects Management Reorganization Management Reorganization Productivity in Software Development Productivity in Software Development How to Get Funds How to Get Funds Marines Step Smartly Marines Step Smartly Tactical R&D Project Prioritization Tactical R&D Project Prioritization Assessing the Risks of an FAA Emergency CommunicationsAssessing the Risks of an FAA Emergency Communications Accounting Research using the AHP Accounting Research using the AHP Strategic Planning in the Military Strategic Planning in the Military Expert Choice and Strategy Implementation Expert Choice and Strategy Implementation Selecting Teams to Respond in Medical Disasters Selecting Teams to Respond in Medical Disasters Promoting Shared Health Care Decision Making Promoting Shared Health Care Decision Making Developing a Merit Compensation Plan in an Academic Setting Developing a Merit Compensation Plan in an Academic Setting Prioritizing Telecommunications for Long Range R & D PlanningPrioritizing Telecommunications for Long Range R & D Planning Easing the Traffic in Istanbul – At What Price? Easing the Traffic in Istanbul – At What Price? Deciding Which Navy Master Jet Bases to Close Deciding Which Navy Master Jet Bases to Close Customer And Company Values Count in Value-Based Analysis Customer And Company Values Count in Value-Based Analysis Banks Place Their Bets on Technology Banks Place Their Bets on Technology Fantastico! Says Argentine Congress Fantastico! Says Argentine Congress Expert Choice software is the choice of B.C. Ferries! Expert Choice software is the choice of B.C. Ferries! Expert Choice Software Helps Make Green Decisions on Environment and Bottom Line Expert Choice Software Helps Make Green Decisions on Environment and Bottom Line Inter-American Development Bank Checks Expert Choice Software with Interest and Approval Inter-American Development Bank Checks Expert Choice Software with Interest and Approval Expert Choice Software helps PECO make Powerful Decisions Expert Choice Software helps PECO make Powerful Decisions Expert Choice Aids Decision Making to keep Savannah River Site Remediation Flowing Expert Choice Aids Decision Making to keep Savannah River Site Remediation Flowing

http://www.expertchoice.com/testimonials/