THE SPECIALIST WITH A UNIVERSAL MIND

ANDREW VAZSONYI, Feature Editor, McLaren School of Business, University of San Francisco

The Information Revolution And Alternate Realities

The special 1994 bonus issue of (May 18, 1994) ``The Information Revolution,'' is of particular interest to decision scientists. The issue includes the impact of the information revolution on management, and focuses on the following five areas.

ORGANIZATION. New electronic systems are breaking down old corporate barriers, allowing critical information to be shared instantly across functional departments or product groupsþand even with workers on the factory floor.

OPERATIONS. Manufacturers are using information technology to shrink cycle times, reduce defects, and cut waste. Likewise, service firms are using electronic data interchange to streamline ordering and communication with suppliers and customers.

STAFFING. New systems and processes are eliminating management layers and cutting employment levels. Meanwhile, companies are using less costly computers and communication devices to create ``virtual offices'' from workers in far-flung locations.

NEW PRODUCTS. The information ``feedback loop'' is collapsing development cycles. Companies are electronically feeding customer and marketing comments to product-development teams so that they can rejuvenate product lines and target specific consumers.

CUSTOMER RELATIONS. No longer simply an ``order entry'' job, customer-service representatives are tapping into company-wide databases to solve callers' demands instantly, from simple changes of address to billing adjustments.

Note that there is no mention of the impact on decision making, and in particular on decision sciences and management sciences. Is this because the impact is essentially negligible? If you review our textbooks, you may be inclined to agree with . Granted, that computer-based optimization techniques are covered, still our students leave knowing word processing and playing games with PCs, but not with a true grasp of the advent of the information age.

The central concept of the decision and management sciences is to provide models to decision makers, to facilitate decision making. Models should play an important part in any or all of the areas mentioned by . Recall that originally decision sciences focused on replacing verbal models by mathematical models and by optimizing; today our approach to models is changing. We recognize the necessity of verbal models; we extend them by mathematical models and/or by computer models. We are moving into an era where computerized models provide alternate models of reality; managers can experiment with WHAT-IF scenarios and choose the satisficing decision that appears to be the ``best.''

diverges from business as far as medicine, and points out that medical student will get a leg up on anatomy class with ``data gloves'' and virtual cadavers. We need to teach our students that computer-based alternate realities are not only good to don helmets and play games in arcades, but to analyze and resolve real-life business situations. We need to understand clearly how traditional thinking and decision making is done. Cognitive scientists tell us that there are four steps:

• Translation of external data and processes into internal representation in terms of words, numbers, graphs, pictures, and images.
• Derivation of other symbols by some sort of inferential process.
• Retranslation of these symbols into external symbols and messages.
• Converting external representations into decision making. Management science extends the fabric of traditional thinking by adding more formal symbols, and mathematical and/or computer based models.

There is, however, a significant difference between what our students need to know about computers and what medical students need. The human body is given, models of anatomy can be programmed in advance, and all the student needs to know is how to manage the model. But a business is a dynamic object, and the student needs to learn how to develop, adjust, and communicate models to decision makers. This means that the student needs to learn how to translate external data and processes into internal computer representation, that is, into computer programs.

Unfortunately, programming became a nasty word. The language most suitable for decision making, BASIC, was awkward and difficult to use. We replaced BASIC by spreadsheets, an easier, and more popular language in the real world. However, the new Visual BASIC, particularly as a macro language associated with spreadsheets, is reviving BASIC, and offers a vastly expanded scope for the practical application of spreadsheets.

We need to provide a framework for modeling, in words, math, or computer programs, that answers such questions as:

• What is the model?
• Why use models?
• What features characterize practical models?
• What aspects of real-life processes are represented by the model?
• What is the relationship between real-life processes and the model?
• What real-life processes can be represented by the same model?
• How do we compare two models of the same real-life process?

Summary and Conclusions

We must augment our approach to model development by further development and application of computer-based alternate realities. The principal tools are spreadsheets, and extensions by macros such as Visual BASIC. My hope is that one of these days will have a sixth entry:

DECISION MAKING. New computer-based models provide managers with alternate realities so thay can conduct WHAT-IF experiments, and find better ``solutions'' to their problems.

Write, call, or fax to my home:
ANDREW VAZSONYI
156 Oak Island Dr.
Santa Rosa, CA 95409
(707) 539-0272
Fax (707) 537-1833