DECISION SUPPORT SYSTEMS: AN OVERVIEW AND ITS ROLE IN BUSINESS Working Definition of DSS

A Decision Support System (DSS) is an interactive computer-based system or subsystem intended to help decision makers use communications technologies, data, documents, knowledge and/or models to identify and solve problems, complete decision process tasks, and make decisions. Decision Support System is a general term for any computer application that enhances a person or group’s ability to make decisions. Also, Decision Support Systems refers to an academic field of research that involves designing and studying Decision Support Systems in their context of use. A DSS is an interactive, flexible, and adaptable CBIS, specially developed for supporting the solution of a non-structured management problem for improved decision making. It utilizes data, it provides easy user interface, and it allows for the decision maker’s own insights . DSS may utilize models, is built by an interactive process (frequently by end-users), supports all the phases of the decision making, and may include a knowledge component.

A Brief History
  Academic Researchers from many disciplines has been studying DSS for approximately 40 years. According to Keen and Scott Morton (1978), the concept of decision support has evolved from two main areas of research: the theoretical studies of organizational decision making done at the Carnegie Institute of Technology during the late 1950s and early 1960s, and the technical work on interactive computer systems, mainly carried out at the Massachusetts Institute of Technology in the 1960s.   It is considered that the concept of DSS became an area of research of its own in the middle of the 1970s, before gaining in intensity during the 1980s. In the middle and late 1980s, Executive Information Systems (EIS), group decision support systems (GDSS), and organizational decision support systems (ODSS) evolved from the single user and model-oriented DSS.

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Beginning in about 1990, data warehousing and on-line analytical processing (OLAP) began broadening the realm of DSS. As the turn of the millennium approached, new Web-based analytical applications were introduced.

History of DSS

Why DSS?
• Increasing complexity of decisions  Technology  Information:  “Data, data everywhere, and not the time to think!”  Number and complexity of options  Pace of change • Increasing availability of computerized support

more consistent decisions in a timely manner. Support to interdependent and/or sequential decisions Support all phases of the decision-making process Support a variety of decision-making processes and styles Are adaptive. and types. • • • • • • • • • • • • • Support for various managerial levels. Middle level and Low level. Provides access to a variety of data sources. Inexpensive high-powered computing  Better software  More efficient software development process • Increasing usability of computers Characteristics and Capabilities of DSS • DSS provide support in semi-structured and unstructured situations. End-users can build simple systems. formats. The decision maker controls the decision-making process. . Have user friendly interfaces. Goal: improve effectiveness of decision making. Top level. Support to individuals and groups. Utilizes models for analysis. Decision makers can make better. includes human judgment and computerized information.

customer information etc.  Representational model: It helps managers to predict results of alternative decisions that estimates the consequences of actions based on simulation models. It supports more than one person working on a shared task. • Examples include integrated tools like Microsoft's NetMeeting or Groove (Stanhope 2002). sales etc  Suggestion models: This is a model oriented model of DSS that perform the logical processing to a specific suggested decision for a task.  Accounting and financial models: It is a model oriented type of DSS that calculates the consequences of possible actions. Classification Communication-driven DSS • A communication-driven DSS uses network and communication technologies to facilitate collaboration on decision making. Vide conferencing.  Data Analysis systems: It allows manager to work with single file and when work with one file is completed. • It is related to group decision support systems.  Analysis Information systems: This type of DSS gives access to many databases and small models. he can switch to other file. .A Summary of Commercial DSS • A summary of commercial DSS system show seven types of DSS:  File Drawer Systems: It is a data oriented type of DSS that provide access to the data items as and when required.  Optimization models: This type of DSS provides optimal solution to a problem and is based on mathematical data about costs. For eg Sales analysis system will provide manager information about sales.

• Accessing border patrol database for all incidents in Sector . • A search engine is a primary tool associated with document drivel DSS. sound and video. It manages. • Document database may include: Scanned documents.. • MYCIN: A rule based reasoning program which help physicians diagnose blood disease.. .Data-driven (retrieving) DSS • A data-driven DSS or data-oriented DSS emphasizes access to and manipulation of a time series of internal company data and. rules. OLAP provides highest level of functionality. external data. Knowledge-driven DSS • A knowledge-driven DSS provides specialized problem solving expertise stored as facts. retrieves and manipulates unstructured information in a variety of electronic formats. procedures. hypertext documents. images. sometimes. Document-driven DSS • A document-driven DSS uses storage and processing technologies to document retrieval and analysis. • Examples: • • Accessing AMMIS data base for all maintenance Jan89-Jul94 for CH124 Accessing INTERPOL database for crimes by ……. It suggests or recommend actions to managers. • Simple file systems accessed by query and retrieval tools provides the elementary level of functionality. Data warehouses provide additional functionality. or in similar structures.

• The Data Management Component stores information (which can be further subdivided into that derived from an organization's traditional data repositories. and  the dialog generation and management system (DGMS). they are not necessarily data intensive. • The Model Management System handles representations of events. Dicodess is an example of an open source model-driven DSS generator (Gachet 2004). or situations (using various kinds of models. or simulation model. Model-driven DSS use data and parameters provided by users to assist decision makers in analyzing a situation. and • The User Interface Management Component is of course the component that allows a user to interact with the system. or from the personal insights and experiences of individual users). • Other examples: • • A statistical forecasting model An optimum routing model DSS ARCHITECTURE • Three fundamental components of DSS:  the database management system (DBMS).  the model management system (MMS). two examples being optimization models and goalseeking models). facts. financial. optimization. . from external sources such as the Internet.Model-driven DSS • A model-driven DSS emphasizes access to and manipulation of a statistical.

Typical Architecture • • • • • • • TPS: transaction processing system MODEL: representation of a problem OLAP: on-line analytical processing USER INTERFACE: how user enters problem & receives answers DSS DATABASE: current data from applications or groups DATA MINING: technology for finding relationships in large data bases for prediction DSS Model base. .

marketing for sustainable development. identification of negative trends. .  a bank loan officer verifying the credit of a loan applicant  an engineering firm that has bids on several projects and wants to know if they can be competitive with their costs.  DSS is extensively used in business and management.  A growing area of DSS application. which tests its equipment on a regular basis using a decision support system.  A DSS can be designed to help make decisions on the stock market. and techniques is in agricultural production. principles. or deciding which area or segment to market a product towards. Executive dashboards and other business performance software allow faster decision making. • Examples:  Linear programming models.• Model base  It is a software component that consists of models used in computational and analytical routines that mathematically express relations among variables. and better allocation of business resources. • There are theoretical possibilities of building such systems in any knowledge domain:  Clinical decision support system for medical diagnosis.  A specific example concerns the Canadian National Railway system.  Multiple regression forecasting models  Capital budgeting present value models Applications. concepts.

or relationships among variables. and observes the resulting changes in the values of other variables .MIS vs DSS ROLE OF DSS • Goal-Seeking  It helps in setting a target value for a variable and then repeatedly change other variables until the target value is achieved • Optimization  Goal of DSS is to find the optimum value for one or more target variables given certain constraints.  One or more other variables are changed repeatedly until the best values for the target variables are discovered • What-if Analysis  End user makes changes to variables.

.• Sensitivity Analysis  Value of only one variable is changed repeatedly and the resulting changes in other variables are observed • Risk analysis  Risk is the important factor which affects the business enterprise. d) Composing points and patterns at different variables. medium risk and high risk. c) Detecting trends over time. They recommend the use of graph when:a) Seeking a quick summary of data. • Model building  DSS allows decisions markets to identify the most appropriate model for solving the problems. For example a marketing manager of a television manufacturing company is charged with the responsibility of developing a sales forecasting model for colour TV sets. inter relationship among the variables problem assumptions and constraints. A DSS is particularly useful in medium risk and high risk environments. • Graphical analysis  This helps managers to quickly digest large volumes of data and visualize the impacts of various courses of action. DSS allows managers to assess the risks associated with various alternatives. It takes into account input variables. b) Forecasting activities. Decisions can be classified as low risk.

companies need information systems that can support the diverse information and decision-making needs of their managers and business professionals. • Information. & Management  The type of information required by decision makers is directly related to the level of management and the amount of structure in the decision situations.BUSINESS AND DECISION SUPPORT To succeed. • Information Quality  Timeliness     Provided WHEN it is needed Up-to-date when it is provided Provided as often as needed Provided about past. and future time periods as necessary . present. Decisions.

Provide all the information that is needed Only the information that is needed should be provided Can have a broad or narrow scope. Content   Free from errors Should be related to the information needs of a specific recipient for a specific situation      Form      • Provided in a form that is easy to understand Can be provided in detail or summary form Can be arranged in a predetermined sequence Can be presented in narrative. video. numeric. or an internal or external focus Can reveal performance Decision Structure  Structured decisions  Involve situations where the procedures to be followed can be specified in advance  Unstructured decisions  Involve situations where it is not possible to specify most of the decision procedures in advance. or other media.  Semi structured decisions . graphic. or other forms Can be provided in hard copy.

but not enough to lead to a definite recommended decision  Amount of structure is typically tied to management level    Operational – more structured Tactical – more semi structured Strategic – more unstructured DECISION SUPPORT TRENDS The growth of corporate intranets. extranets and the Web has accelerated the development and use of “executive class” information delivery & decision support software tools to virtually every level of the organization. Ingredients for DSS Success or Failure • For DSS Success  Management Support  Users Involved in Design & Development  Early Benefits Shown • For DSS Failure  Lack of Management Support  Users Ignored in Design & Development  No Early Benefits Shown . Some decision procedures can be specified in advance.

developed a risk management DSS to help minimize PepsiCo’s losses from accident. PepsiCo and Sedgwick James Inc. EXPERT SYSTEM An expert system is a computer program that simulates the thought process of a human expert to solve complex decision problems in a specific domain. An expert system is a knowledge based information system that uses its knowledge about specific area. and generally aids the decision-making process.DSS AT PEPSI CO. An expert system may be viewed as a computer simulation of a human expert . the world second largest insurance broker. An expert system operates as an interactive system that responds to questions. Expert systems are part of a general category of computer applications known as artificial intelligence . from computer diagnosis to delicate medical surgery. Both the RS/6000 server and local PCs use information builders’ middleman to provide PepsiCo mangers and business analysts with transparent data access from a variety of hardware/software configuration. ES acts as an expert to end users and it can be used at each and every level of an organization. Expert systems provide expert advice and guidance in a wide variety of activities. An expert system may be viewed as a computer simulation of a human expert. makes recommendations. theft and other causes. Expert system provides answers to questions by making conclusions using knowledge contained in knowledge base. an individual who studies how human experts make decisions and translates the rules into terms that a computer can understand. Sedgwick loads the latest casualty claims data from the nation’s leading insurance carriers into a DSS database resident on IBM RS /6000 server in the PepsiCo intranet. one needs a knowledge engineer. Every week. asks for clarification. The database is then accessed by managers and analysts using desktop PCs and remote laptops equipped with the INFORM risk management system. To design an expert system.

The use of languages like LISP and PROLOG in the development of an expert system simplifies the coding process. elimination.  The major advantage of these languages. The knowledge base. as compared to conventional programming languages.  Special tools or programming languages are often needed to accomplish the specific objectives of the system.CHARACTERISTICS OF EXPERT SYSTEMS DOMAIN SPECIFICITY  Expert systems are typically very domain specific. a diagnostic expert system for troubleshooting computers must actually perform all the necessary data manipulation as a human expert would. . or substitution of new rules and memory management capabilities. For example.  The user interface is the part of the system which takes in the user’s query in a readable form and passes it to the inference engine. It then displays the results to the user.  The developer of such a system must limit his or her scope of the system to just what is needed to solve the target problem. COMPONENTS OF AN EXPERT SYSTEM  The knowledge base is the collection of facts and rules which describe all the knowledge about the problem domain. is the simplicity of the addition. SPECIAL PROGRAMMING LANGUAGES  Expert systems are typically written in special programming languages. Most user interfaces are menu driven and have a number of display and reporting features. which is a collection of domain specific knowledge usually represented as rules based on IF-THEN logic  The inference engine is the part of the system that chooses which facts and rules to apply when trying to solve the user’s query.

 Facilitate real-time.  Help distribute human expertise. low-cost expert-level decisions by the non expert.  Enhance the utilization of most of the available data. frequency. and consistency of making good decisions.STRUCTURE OF AN EXPERT SYSTEM BENEFITS OF EXPERT SYSTEMS  Increase the probability. .

An expert system allows the user to assign probabilities.  Free up the mind and time of the human expert to enable him or her to concentrate on more creative activities. and other constraints. or confidence levels to any or all input data. APPLICATIONS OF EXPERT SYSTEM • Diagnosis and Troubleshooting of Devices and Systems of All Kinds This class comprises systems that deduce faults and suggest corrective actions for a malfunctioning device or process.  Permit dynamism through modularity of structure. • Planning and Scheduling Systems that fall into this class analyze a set of one or more potentially complex and interacting goals in order to determine a set of actions to achieve those goals. • Configuration of Manufactured Objects from Subassemblies Configuration applications were pioneered by computer companies as a means of facilitating the manufacture of semi-custom minicomputers .  Heuristic reasoning: It allows the expert to arrive at a good solution quickly and efficiently. materiel.  Encourage investigations into the subtle areas of a problem. and/or provide a detailed temporal ordering of those actions. taking into account personnel. Permit objectivity by weighing evidence without bias and without regard for the user’s personal and emotional reactions. There are probably more diagnostic applications of ES than any other type. certainty factors. Expert systems base their reasoning process on symbolic manipulation and heuristic inference procedures that closely match the human thinking process.  Data Uncertainties: Expert systems are capable of working with inexact data.

predicting trends. tactics.The technique has found its way into use in many different industries. The first is an advisor which counsels a user on appropriate grammatical usage in a text. and individual tax policy. • Process Monitoring and Control Systems falling in this class analyze real-time data from physical devices with the goal of noticing anomalies. Advisory programs have been created to assist bankers in determining whether to make loans to businesses and individuals. Insurance companies have used expert systems to assess the risk presented by the customer and to determine a price for the insurance. and controlling for both optimality and failure correction. manufacturing. • Financial Decision Making The financial services industry has been a vigorous user of expert system techniques. for example. modular home building. The second is a tax advisor that accompanies a tax preparation program and advises the user on tax strategy. A typical application in the financial markets is in foreign exchange trading • Knowledge Publishing The two most widely distributed expert systems in the world are in this category. EXAMPLES OF EXPERT SYSTEM ES FOR AGRICULTURE • • • • Cuptex: An Expert System for Cucumber Crop Production Citex: An Expert System for Orange Production Neper Wheat: An Expert System for Irrigated Wheat Management Tomatex: An Expert System for Tomatoes . and other problems involving complex engineering design and manufacturing. Examples of real-time systems that actively monitor processes can be found in the steel making and oil refining industries.

especially groups of managers. FOUR MAIN COMPONENTS OF GDSS: • • • • Hardware (conference facility. It aids groups. etc. engineering and construction with current cost estimates. as well as improving phrasing and structure. brainstorming tools.) People (Participants.• Limex: A Multimedia Expert System for Lime Production EXPERT SYSTEMS IN REAL ESTATE PRACTICE • ES helps in the preparation of real estate documentation such as leases. in analyzing problem situations and in performing group decision making tasks. This requires a combination of data mining and rule based methods (or case based reasoning) to bring together the expert knowledge of quantity surveying. etc. trained facilitator. • Property and facilities management problems where the ES can be used by both clients and property GDSS – GROUP DECISION SUPPORT SYSTEMS Group Decision Support Systems (GDSS) –It is an interactive computer-based system used to facilitate the solution of unstructured problems by a set of decision makers working together as a group. audiovisual equipment. contracts and forms. support staff) Procedures .) Software tools (Electronic questionnaires. • The costing of buildings and development projects. voting tools. • Expert systems can help the user prepare better documents by guidinjg them through the process and brining attention to issues that might other wise have been missed.

• Many electronic meeting rooms have seating arrangements in semicircles and are tiered in legislative style to accommodate a large number of attendees. • The facilitator controls the use of tools during the meeting. • All data that the attendees forward from their workstations to the group are collected and saved on the file server.OVERVIEW OF A GDSS MEETING • • In a GDSS electronic meeting. . which serves as the facilitator’s workstation and control panel. The workstations are networked and are connected to the facilitator’s console. • The facilitator is able to project computer images onto the projection screen at the front of the room. and to the meeting’s file server. each attendee has a workstation.

GDSS can reduce this time. No need for a computer guru – To work with GDSS no high computer knowledge is required although some basic experience is a must.Why Use GDSS? • High level managers can spend 80% of their time making decisions in groups.Can be set up to be portable… laptop. also. software. Portability . Global Potential . • Security – especially true when companies rent the facilities for GDSS. Applied correctly. • Automated record keeping – There is no need to take notes. better decisions. software and people for connection. the facilitator may be a lower-level employee who may leak information to peers . DISADVANTAGES OF GDSS • Cost – Infrastructure costs to provide the hardware and software/room/network connectivity can be very expensive. ADVANTAGES OF GDSS • Anonymity – GDSS drive out fear leading to better decisions from a diverse hierarchy of decision makers • Parallel Communication – It eliminate monopolizing and thus provides increased participation. arriving at a better decision faster. they’re automatically recorded • • • • Ability for virtual meetings – Only need hardware. • GDSS provides the hardware. databases and procedures for effective decision making.People can be connected across the world.

relies heavily on bandwidth and LAN/WAN infrastructure – properly setup system should minimize this risk • • Keyboarding Skills – Reduced participation may result due to frustration Perception of messages – lack of verbal communication could lead to misinterpretation TYPICAL GDSS PROCESS 1) Group Leader (and Facilitator?) select software. . They would use electronic brainstorming and voting to resolve the shop floor control problem. 4. After having a meeting for two hours with plant personnel all that resulted was arguments and bad feelings. They. he. and two junior analysts participate in a GDSS program. develop agenda 2) Participants meet (in decision room/Internet) and are given a task. So after meeting with the company's GDSS facilitator. as well as many other corporations. 5 as necessary 7) Reach decision 8) Recommend providing feedback on decision and results to all involved Examples of GDSS “One example of implementation of GDSS is at IBM. loss of connectivity.• Technical Failure – Various technical failure can occur like power loss. initiated GDSS to improve group meetings. A specific case involved a plant manager not being able to identify the cause of problems with shop floor control. 3) Participants generate ideas – brainstorm anonymously 4) Facilitator organize ideas into categories (different for user-driven software) 5) Discussion and prioritization – may involve ranking by some criteria and/or rating to the facilitators scale 6) Repeat Steps 3. the manager decided to have ten plant employees.

the manager found that he had gotten useful information about the issue for the first time. etc. The manager thanked the participants and was given a printout of all the discussion and results of the group vote (Aiken 3). and a summary of what competitors are doing.). The results were displayed and a discussion occurred for ten minutes.The manager and the facilitator decided the topic would be "What are the key issues in improving shop floor control?" After brainstorming for 35 minutes and compiling 645 lines of suggestions. ideas and comments on how to improve shop floor control. charts. An EIS may help a CEO to get an accurate picture of overall operations. These systems are generally easy to operate and present information in ways easy to quickly absorb (graphs. A list was compiled of the comments and then the members of the group ranked them in order of importance. . Executive Information Systems (EIS) Provide critical information for executives and managers Example: easy access to actions of competitors.” FUTURE IMPLICATIONS OF GDSS • GDSS will incorporate Artificial Intelligence and Expert Systems – the software will “learn” and help the users make better decisions • • Decreasing cost will allow more organizations to use GDSS Increasing implementation of GDSS with the customer – • • Customer voice their needs in non-threatening environment GDSS may play a large role in the future of the virtual companies GDSS can help the virtual companies do business in the global business environment EXECUTIVE INFORMATION SYSTEM An EIS is a special type of DSS designed to support decision making at the top level of an organization.

It is easy to use. software is usually highly specialized to the problem domain. It can be used alone. This specialization is often achieved by using off-the-shelf components for the EIS backbone.CHARACTERISTICS OF AN EIS • • • • • • It provides immediate and easy access to information EIS cut across the functional areas. or can accommodate third-party plug-in modules. A key issue is to be sure that the EIS components optimize and conform to the organization’s computing resources. • • Database Output BUSINESS VALUE OF EXECUTIVE SUPPORT SYSTEMS • Enables executive to review more data in less time with greater clarity than paper-based systems • • Increases upper management’s span of control Increases executives’ ability to monitor activities of lower units reporting to them . Generate o/p in the form of reports and graphics. The system must be configured so that the resources are well-matched to the executives using them. and customized modules to meet specific needs. • Software: In contrast to hardware. It combine both internal & external information Includes future & current data EIS Components Basic components are: • Hardware: An EIS requires no specific or unique hardware. It helps in taking decisions at all levels. Lotus Notes is a good example.

DISADVANTAGES • • • • • • Information overload for some managers. and hard to manage. System may become slow. which can allow the market executive to compare sales forecast with past sales. Information that is provided is better to understand Filters data for management. APPLICATIONS: • Manufacturing : Manufacturing operational control focuses on day-to-day operations. High implementation costs. Offers efficiency to decision makers. May lead to less reliable and less secure data. Provides timely delivery of company summary information. Need good internal processes/support for data management. . • Marketing : EIS provides an approach to sales forecasting.• • EIS increases managers’ productivity EIS can convert information into other formats ADVANTAGES: • • • • • Easy for upper-level executives to use. large. Benefits hard to quantify. and the central idea of this process is effectiveness and efficiency.

and it can be extremely helpful to finance executives.• Financial : An EIS is a responsibility-oriented approach that integrates planning or budgeting with control of performance reporting. The EIS of Tomorrow • • The intelligent EIS: advances in AI technology will be deployed in the EIS The multimedia EIS: multimedia databases will allow future integration of text. voice and image • • The informed EIS: future EISs will make wider use of data external to the company The connected EIS: high-bandwidth communication allows greater interconnectivity .

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