Decision Support Systems

Decision Support Systems (DSS) are a specific class of computerized information system that supports business and organizational decision-making activities

As companies migrate towards responsive    e-business models, they are investing in new data driven decision support application frameworks that help them respond rapidly to changing market conditions and customer needs.

These are interactive computer based information systems that use decision models and specialized databases

DSS provide managerial end users with information in an interactive session on an ad-hoc (as needed) basis, with analytical modeling, simulation, data retrieval and information presentation capabilities

A properly-designed DSS is an interactive software-based system intended to help decision makers compile useful information from raw data, documents, personal knowledge, and/or business models to identify and solve problems and make decisions

DSS are different from MIS (which focus on providing managers with pre-specified information that can be used to help them make effective, structured types of decisions)

Typical information that a decision support application might gather and present would be

1)   an inventory of all of your current information assets (including legacy and relational data sources, cubes, data warehouses, and data marts),

2)   comparative sales figures between one week and the next,

3)   projected revenue figures based on new product sales assumptions;

4)   the consequences of different decision alternatives, given past experience in a context that is described.

Benefits

1)   Improves personal efficiency

2)   Expedites problem solving

3)   Facilitates interpersonal communication

4)   Promotes learning or training

5)   Increases organizational control

6)   Generates new evidence in support of a decision

7)   Creates a competitive advantage over competition

8)   Encourages exploration and discovery on the part of the decision maker

9)   Reveals new approaches to thinking about the problem space

Types

Status inquiry systems

The number of decisions in the operational management and some at the middle management are such that they are based on one or two aspects of decision making situation. It does not call for any elaborate computations, analysis, choice etc... for decision making. If the status is known, the decision is automatic, i.e., the status and solution is unique in relation.

Data analysis systems

These DSS are based on comparative analysis, and use a formula or an algorithm. But, these processes are not structured and therefore vary. The cash flow analysis, the inventory analysis and the personal inventory systems are the examples. The use of simple data processing tools and business rules are required to develop this system.

Information analysis systems

The data is analyzed and the reports are generated. The reports might be having exception as feature. The decision makers use these reports for assessment of the situation for decision making. The sales analysis, the accounts receivables systems, the market research analysis, the MRP systems are the examples.

Accounting systems

These are nor necessarily for decision making but they are desirable to keep track of major aspects of a business or a function. The contents of these systems are more data processing leading to formal reporting with exception if necessary. These systems account the items such as cash, inventory, personnel and so on and relate it to a norm or norms developed by the management, for control and decision.

Model based systems

These are simulation models or optimization models for decision making. These decisions generally, are one time and infrequent and provide general guidelines for operation or management. The product mix decision, the material mix, the job scheduling rules, and the resource or asset or facilities planning systems are the examples.