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Chapter 1 • An Overview of Business Intelligence, Analytics, and Decision Support 39

Managers usually make decisions by following a four-step process (we learn more
about these in Chapter 2):

1. Define the problem (i.e., a decision situation that may deal with some difficulty or
with an opportunity).
2. Construct a model that describes the real-world problem.
3. Identify possible solutions to the modeled problem and evaluate the solutions.
4. Compare, choose, and recommend a potential solution to the problem.
To follow this process, one must make sure that sufficient alternative solutions are
being considered, that the consequences of using these alternatives can be reasonably
predicted, and that comparisons are done properly. However, the environmental factors
listed in Table 1.1 make such an evaluation process difficult for the following reasons:

• Technology, information systems, advanced search engines, and globalization result
in more and more alternatives from which to choose.
• Government regulations and the need for compliance, political instability and ter-
rorism, competition, and changing consumer demands produce more uncertainty,
making it more difficult to predict consequences and the future.
• Other factors are the need to make rapid decisions, the frequent and unpredictable
changes that make trial-and-error learning difficult, and the potential costs of making
mistakes.
• These environments are growing more complex every day. Therefore, making deci-
sions today is indeed a complex task.
Because of these trends and changes, it is nearly impossible to rely on a trial-and-
error approach to management, especially for decisions for which the factors shown in
Table 1.1 are strong influences. Managers must be more sophisticated; they must use the
new tools and techniques of their fields. Most of those tools and techniques are discussed
in this book. Using them to support decision making can be extremely rewarding in
making effective decisions. In the following section, we look at why we need computer
support and how it is provided.

sectiOn 1.3 revieW QuestiOns

1. Describe the three major managerial roles, and list some of the specific activities in each.
2. Why have some argued that management is the same as decision making?
3. Describe the four steps managers take in making a decision.

1.4 inFormation systems support For deCision making
From traditional uses in payroll and bookkeeping functions, computerized systems have
penetrated complex managerial areas ranging from the design and management of auto-
mated factories to the application of analytical methods for the evaluation of proposed
mergers and acquisitions. Nearly all executives know that information technology is vital
to their business and extensively use information technologies.
Computer applications have moved from transaction processing and monitoring
activities to problem analysis and solution applications, and much of the activity is done
with Web-based technologies, in many cases accessed through mobile devices. Analytics
and BI tools such as data warehousing, data mining, online analytical processing (OLAP),
dashboards, and the use of the Web for decision support are the cornerstones of today’s
modern management. Managers must have high-speed, networked information sys-
tems (wireline or wireless) to assist them with their most important task: making deci-
sions. Besides the obvious growth in hardware, software, and network capacities, some

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