Difinition DSS :

An interactive computer-based system which generates a number of alternatives to solve an

unstructured problem. These alternatives are being interpreted by the manager (decision-maker),
whereafter he decides which alternative is to be used to solve the problem

A decision support system (DSS) is a computer program application that analyzes business data
and presents it so that users can make business decisions more easily. It is an "informational
application" (to distinguish it from an "operational application" that collects the data in the
course of normal business operation).Typical information that a decision support application
might gather and present would be:

 Comparative sales figures between one week and the next

 Projected revenue figures based on new product sales assumptions
 The consequences of different decision alternatives, given past experience in a context
that is described

A decision support system may present information graphically and may include an expert
system or artificial intelligence (AI). It may be aimed at business executives or some other group
of knowledge workers.

A decision support system is a way to model data and make quality decisions based upon it. Making the
right decision in business is usually based on the quality of your data and your ability to sift through and
analyze the data to find trends in which you can create solutions and strategies for. DSS or decision
support systems are usually computer applications along with a human component that can sift through
large amounts of data and pick between the many choices.

While many people think of decision support systems as a specialized part of a business, most
companies have actually integrated this system into their day to day operating activities. For instance,
many companies constantly download and analyze sales data, budget sheets and forecasts and they
update their strategy once they analyze and evaluate the current results. Decision support systems have
a definite structure in businesses, but in reality, the data and decisions that are based on it are fluid and
constantly changing.

The key to decision support systems is to collect data, analyze and shape the data that is collected and
then try to make sound decisions or construct strategies from analysis. Whether computers, databases or
people are involved usually doesn't matter, however it is this process of taking raw or unstructured data,
containing and collecting it and then using it to help aid decision making.

It is important to note that although computers and artificial intelligence is at work or in play with data, it is
ultimately up to humans to execute these strategies or comprehend the data into a usable hypothesis.

It is important to note that the field of DSS does not have a universally accepted model, meaning that
there are many theories vying for supremacy in this broad field. Because of there are many working
theories in the topic of DSS, there are many ways to classify DSS.

For instance, one of the DSS models available is with the relationship of the user in mind. This model
takes into consideration passive, active and cooperative DSS models.

Decision support systems that just collect data and organize it effectively are usually called passive
models, they do not suggest a specific decision, and they only reveal the data. An active decision support
system actually processes data and explicitly shows solutions based upon that data. While there are
many systems that are able to be active, many organizations would be hard pressed to put all their faith
into a computer model without any human intervention.

A cooperative decision support system is when data is collected, analyzed and then is provided to a
human component which then can help the system revise or refine it. It means that both a human
component and computer component work together to come up with the best solution.

While the above DSS model takes the relationship of the user in mind, another popular DSS model takes
into consideration the mode of assistance as the underlying basis of the DSS model. This includes the
Model Driven DSS, Communications Driven DSS, Data Driven DSS, Document Driven DSS, and
Knowledge Driven DSS.

Model Driven DSS is when decision makers use statistical, simulations or financial models to come up
with a solution or strategy. Keep in mind that these decisions are based on models; however they do not
have to be overwhelming data intensive.

A Communications Driven DSS models is when many collaborators work together to come up with a
series of decisions to set in motion a solution or strategy. This communications driven DSS model can be
in an office environment or on the web.

A Data Driven DSS model puts its emphasis on collected data that is then manipulated to fit the decision
maker's needs. This data can be internal, external and in a variety of formats. It is important that usually
data is collected and categorized as a time series which is a collection of data that forms a sequence,
such as daily sales, operating budgets from one quarter to the next, inventory leels over the previous
year, etc.

A Document Driven DSS model uses documents in a variety of data types such a text documents,
spreadsheets and database records to come up with decisions a well as further manipulate the
information to refine strategies.

A Knowledge Driven DSS model uses special rules stored in a computer or used by a human to
determine whether a decision should be made. For instance, for many day traders a stop loss limit can be
seen as a knowledge driven DSS model. These rules or facts are used in order to make a decision.

You can also look at the scope in which decisions are made as a model of DSS. For instance, an
organizational wide decision, department decision or single user decision, can be seen in the scope wide
model

Computer system designed to provide assistance in determining and evaluating alternative courses of
action. A DSS (1) acquires data from the mass of routine transactions of a firm, (2) analyzes it with
advanced statistical techniques to extract meaningful information, and (3) narrows down the range of
choices by applying rules based on decision theory. Its objective is facilitation of 'what if' analysis and not
replacement of a manager's judgment.

Read more: http://www.businessdictionary.com/definition/decision-support-system-

DSS.html#ixzz14xifhE3k
Difinition of EIS :

An Executive Information System (EIS) is a set of management tools supporting the information and
decision-making needs of management by combining information available within the organisation with
external information in an analytical framework. EIS are targeted at management needs to quickly
assess the status of a business or section of business. These packages are aimed firmly at the type of
business user who needs instant and up to date understanding of critical business information to aid
decision making.

The idea behind an EIS is that information can be collated and displayed to the user without
manipulation or further processing. The user can then quickly see the status of his chosen department
or function, enabling them to concentrate on decision making. Generally an EIS is configured to display
data such as order backlogs, open sales, purchase order backlogs, shipments, receipts and pending
orders. This information can then be used to make executive decisions at a strategic level.

The emphasis of the system as a whole is the easy to use interface and the integration with a variety of
data sources. It offers strong reporting and data mining capabilities which can provide all the data the
executive is likely to need. Traditionally the interface was menu driven with either reports, or text
presentation. Newer systems, and especially the newer Business Intelligence systems, which are
replacing EIS, have a dashboard or scorecard type display.

Before these systems became available, decision makers had to rely on disparate spreadsheets and
reports which slowed down the decision making process. Now massive amounts of relevant information
can be accessed in seconds. The two main aspects of an EIS system are integration and visualisation. The
newest method of visualisation is the Dashboard and Scorecard. The Dashboard is one screen that
presents key data and organisational information on an almost real time and integrated basis. The
Scorecard is another one screen display with measurement metrics which can give a percentile view of
whatever criteria the executive chooses.

Behind these two front end screens can be an immense data processing infrastructure, or a couple of
integrated databases, depending entirely on the organisation that is using the system. The backbone of
the system is traditional server hardware and a fast network. The EIS software itself is run from here and
presented to the executive over this network. The databases needs to be fully integrated into the
system and have real-time connections both in and out. This information then needs to be collated,
verified, processed and presented to the end user, so a real-time connection into the EIS core is
necessary.

Executive Information Systems come in two distinct types: ones that are data driven, and ones that are
model driven. Data driven systems interface with databases and data warehouses. They collate
information from different sources and presents them to the user in an integrated dashboard style
screen. Model driven systems use forecasting, simulations and decision tree like processes to present
the data.

As with any emerging and progressive market, service providers are continually improving their products
and offering new ways of doing business. Modern EIS systems can also present industry trend
information and competitor behaviour trends if needed. They can filter and analyse data; create graphs,
charts and scenario generations; and offer many other options for presenting data.

There are a number of ways to link decision making to organisational performance. From a decision
maker's perspective these tools provide an excellent way of viewing data. Outcomes displayed include
single metrics, trend analyses, demographics, market shares and a myriad of other options. The simple
interface makes it quick and easy to navigate and call the information required.

For a system that seems to offer business so much, it is used by relatively few organisations. Current
estimates indicate that as few as 10% of businesses use EIS systems. One of the reasons for this is the
complexity of the system and support infrastructure. It is difficult to create such a system and populate
it effectively. Combining all the necessary systems and data sources can be a daunting task, and seems
to put many businesses off implementing it. The system vendors have addressed this issue by offering
turnkey solutions for potential clients. Companies like Actuate and Oracle are both offering complete
out of the box Executive Information Systems, and these aren't the only ones. Expense is also an issue.
Once the initial cost is calculated, there is the additional cost of support infrastructure, training, and the
means of making the company data meaningful to the system.

Not a piece of hardware or software, but an infrastructure that supplies to a firm's executives the up-to-
the-minute operational data, gathered and sifted from various databases. The typical information mix
presented to the executive may include financial information, work in process, inventory figures, sales
figures, market trends, industry statistics, and market price of the firm's shares. It may even suggest
what needs to be done, but differs from a decision support system (DSS) in that it is targeted at
executives and not managers

Read more: http://www.businessdictionary.com/definition/executive-information-system-

EIS.html#ixzz14xisvcDq

Why choice DSS

This question in various forms has been popular in the Ask Dan! email. For example, J. Maclearn asked
"What are the advantages and disadvantages of decision support systems?" On a related topic, Wong
Soon Chen asked me to justify the statement that "Managers need computerized decision support and
supporting technologies to do their jobs better" with relevant facts and figures. Mick Spain wrote "I'm
trying to do an academic literature review of decision support systems in general and measuring how
they benefit strategic decision making in particular." He requested my comments on the topic and
recent references. Lynn Oelke wrote asking "What are the benefits of using DSS for Health Care
Administrators?" Rosjalina asked "How can data warehouses benefit organizations?"

A number of Ask Dan! columns have addressed related questions, but now seems like a good
opportunity to summarize the advantages and disadvantages of computerized decision support. It is not
possible in an Ask Dan! column to cite all of the studies that support the following conclusions, but
interested readers are encouraged to check Alter (1980), Power (2002) and Udo and Guimaraes (1994)
and review articles that have been published in the Decision Support Systems journal (ISSN: 0167-9236,
imprint: NORTH-HOLLAND, began publication in 1985). Let's start with the advantages:

1) Time savings. For all categories of decision support systems, research has demonstrated and
substantiated reduced decision cycle time, increased employee productivity and more timely
information for decision making. The time savings that have been documented from using computerized
decision support are often substantial. Researchers have not however always demonstrated that
decision quality remained the same or actually improved.

2) Enhance effectiveness. A second category of advantage that has been widely discussed and examined
is improved decision making effectiveness and better decisions. Decision quality and decision making
effectiveness are however hard to document and measure. Most research has examined soft measures
like perceived decision quality rather than objective measures. For example, Hogue and Watson (1983)
reported the most important reason managers cited for using a DSS was to obtain accurate information.
Studies of model-driven DSS have examined this outcome more than research on other types of DSS (cf.,
Sharda, Barr, and McDonnell, 1988). Advocates of building data warehouses identify the possibility of
more and better analyses that can improve decision making.

3) Improve interpersonal communication. DSS can improve communication and collaboration among
decision makers. In appropriate circumstances, communications-driven and group DSS have had this
impact. Model-driven DSS provide a means for sharing facts and assumptions. Data-driven DSS make
"one version of the truth" about company operations available to managers and hence can encourage
fact-based decision making. Improved data accessibility is often a major motivation for building a data-
driven DSS. This advantage has not been adequately demonstrated for most types of DSS.

4) Competitive advantage. Vendors frequently cite this advantage for business intelligence systems,
performance management systems, and web-based DSS. Although it is possible to gain a competitive
advantage from computerized decision support, this is not a likely outcome. Vendors routinely sell the
same product to competitors and even help with the installation. Organizations are most likely to gain
this advantage from novel, high risk, enterprise-wide, inward facing decision support systems.
Measuring this is and will continue to be difficult. For more discussion of this issue read Ask Dan! (Vol. 6,
No. 17, July 31, 2005).

5) Cost reduction. Some research and especially case studies have documented DSS cost saving from
labor savings in making decisions and from lower infrastructure or technology costs. This is not always a
goal of building DSS.

6) Increase decision maker satisfaction. The novelty of using computers has and may continue to
confound analysis of this outcome. DSS may reduce frustrations of decision makers, create perceptions
that better information is being used and/or create perceptions that the individual is a "better" decision
maker. Satisfaction is a complex measure and often researchers measure satisfaction with the DSS
rather than satisfaction with using a DSS in decision making. Some studies have compared satisfaction
with and without computerized decision aids. Those studies suggest the complexity and "love/hate"
tension of using computers for decision support.

7) Promote learning. Learning can occur as a by-product of initial and ongoing use of a DSS. Two types of
learning seem to occur: learning of new concepts and the development of a better factual
understanding of the business and decision making environment. Some DSS serve as "de facto" training
tools for new employees. This potential advantage has not been adequately examined.

8) Increase organizational control. Data-driven DSS often make business transaction data available for
performance monitoring and ad hoc querying. Such systems can enhance management understanding
of business operations and managers perceive that this is useful. What is not always evident is the
financial benefit from increasingly detailed data. Regulations like Sarbanes-Oxley often dictate reporting
requirements and hence heavily influence the control information that is made available to managers.
On a more ominous note, some DSS provide summary data about decisions made, usage of the systems,
and recommendations of the system. Managers need to be very careful about how decision-related
information is collected and then used for organizational control purposes. If employees feel threatened
or spied upon when using a DSS, the benefits of the DSS can be reduced. More research is needed on
these questions.

Decision support systems should accomplish a purpose that is valued in an organization, but in addition
it is important to examine the impact of computerized decision support from individual, group and
organizational perspectives. I am a computerized decision support "evangelist". I have concluded based
upon experience and research that DSS when appropriately implemented and used can provide
individuals, groups and organizations with advantages and benefits. I have been spreading the word
about computerized decision support for more than 30 years, but I have tried to remain objective and
balanced in my writings and research. In that spirit, let's examine "the dark side", the disadvantages of
computerized decision support.

DSS can create advantages for organizations and can have positive benefits, but building and using DSS
can create negative outcomes in some situations. For example, some data-driven DSS development
efforts lead to power struggles over who should have access to data. Also, managers may have personal
motives for advocating development of a specific DSS that harms other managers or the organization as
a whole. My discussion of disadvantages builds upon the work of Klein and Methlie (1996, p. 172-181)
and Winograd and Flores (1986). The following are eight disadvantages:

1) Overemphasize decision making. Clearly the focus of those of us interested in computerized decision
support is on decisions and decision making. Implementing DSS may reinforce the rational perspective
and overemphasize decision processes and decision making. It is important to educate managers about
the broader context of decision making and the social, political and emotional factors that impact
organizational success. It is especially important to continue examining when and under what
circumstances DSS should be built and used. We must continue to ask if the decision situation is
appropriate for using any type of DSS and if a specific DSS is or remains appropriate to use for making or
informing a specific decision.

2) Assumption of relevance. According to Winograd and Flores (1986), "Once a computer system has
been installed it is difficult to avoid the assumption that the things it can deal with are the most relevant
things for the manager's concern." The danger is that once DSS become common in organizations, that
managers will use them inappropriately. There is limited evidence that this occurs. Again training is the
only way to avoid this potential problem.

3) Transfer of power. Building DSS, especially knowledge-driven DSS, may be perceived as transferring
decision authority to a software program. This is more a concern with decision automation systems
(check DecisionAutomation.com) than with DSS. I advocate building computerized decision support
systems because I want to improve decision making while keeping a human decision maker in the
"decision loop". In general, I value the "need for human discretion and innovation" in the decision
making process.

4) Unanticipated effects. Implementing decision support technologies may have unanticipated

consequences. It is conceivable and it has been demonstrated that some DSS reduce the skill needed to
perform a decision task. Some DSS overload decision makers with information and actually reduce
decision making effectiveness. I'm sure other such unintended consequences have been documented.
Nevertheless, most of the examples seem correctable, avoidable or subject to remedy if and when they
occur.
5) Obscuring responsibility. The computer doesn't make a "bad" decision, people do. Unfortunately
some people may deflect personal responsibility to a DSS. Managers need to be continually reminded
that the computerized decision support system is an intermediary between the people who built the
system and the people who use the system. The entire responsibility associated with making a decision
using a DSS resides with people who built and use the system.

6) False belief in objectivity. Managers who use DSS may or may not be more objective in their decision
making. Computer software can encourage more rational action, but managers can also use decision
support technologies to rationalize their actions. It is an overstatement to suggest that people using a
DSS are more objective and rational than managers who are not using computerized decision support.

7) Status reduction. Some managers argue using a DSS will diminish their status and force them to do
clerical work. This perceptual problem can be a disadvantage of implementing a DSS. Managers and IS
staff who advocate building and using computerized decision support need to deal with any status issues
that may arise. This perception may or should be less common now that computer usage is common and
accepted in organizations.

8) Information overload. Too much information is a major problem for people and many DSS increase
the information load. Although this can be a problem, DSS can help managers organize and use
information. DSS can actually reduce and manage the information load of a user. DSS developers need
to try to measure the information load created by the system and DSS users need to monitor their
perceptions of how much information they are receiving. The increasing ubiquity of handheld, wireless
computing devices may exacerbate this problem and disadvantage.

I briefly identified advantages and disadvantages of data warehouses in DSS News, Vol. 1, No. 7 in July
31, 2000. I have also discussed unintended negative consequences of DSS (Vol. 4, No. 8, April 13, 2003),
rational thinking (Vol. 5, No. 21, October 10, 2004), sustainable competitive advantage (Vol. 6, No. 17,
July 31, 2005), cognitive biases (Vol. 6, No. 20, September 11, 2005), and how use of a Communications-
Driven DSS impact a decision-making meeting (Vol. 7, No. 4, February 12, 2006).

As always, your comments and suggestions are welcomed.

References

Alter, S.L. Decision Support Systems: Current Practice and Continuing Challenge. Reading, MA: Addison-
Wesley, 1980.
Hogue, J.T. and H.J. Watson, "Managemt's role in the approval and administration of decision support
systems," MIS Quarterly, 7(2), June 1983, pp. 15-26.

Klein, M. and L. B. Methlie, Knowledge-based Decision Support Systems with Applications in Business.
Chichester, UK: John Wiley & Sons, 1995.

Power, D. J. Decision Support Systems: Concepts and Resources for Managers, Westport, CT:
Greenwood/Quorum Books, 2002, ISBN: 156720497X.

Power, D., "What are the advantages and disadvantages of Data Warehouses?" DSS News, Vol. 1, No. 7,
July 31, 2000.

Power, D., "Can using a DSS have unintended negative consequences?" DSS News, Vol. 4, No. 8, April 13,
2003.

Power, D., Do DSS builders assume their targeted users are rational thinkers? DSS News, Vol. 5, No. 21,
October 10, 2004.

Power, D., "Can DSS provide firms with a sustainable competitive advantage? If so, how?" DSS News,
Vol. 6, No. 17, July 31, 2005.

Power, D., "Can computerized decision support systems impact, eliminate, exploit, or reduce cognitive
biases in decision making?" DSS News, Vol. 6, No. 20, September 11, 2005.

Power, D., "How does the use of a Communications-Driven DSS impact a decision-making meeting?" DSS
News, Vol. 7, No. 4, February 12, 2006.

Sharda, R., S. Barr, and J. McDonnell, "Decision Support Systems Effectiveness: A Review and an
Empirical Test, Management Science, vol. 34, no. 2, 1988, pp. 139-159.

Simon, Herbert A. "Decision Making and Problem Solving." Research Briefings 1986: Report of the
Research Briefing Panel on Decision Making and Problem Solving. Washington, DC: National Academy
Press, 1986.
Udo, G. J. and T. Guimares. "Empirically Assessing Factors Related to DSS Benefits." European Journal of
Information Systems, July 1994.

Winograd, T. and F. Flores, Understanding Computers and Cognition, Reading, MA: Addison-Wesley,
1986.

Citation: Power, D., "What are the advantages and disadvantages of computerized decision support?"
DSS News, Vol. 7, No. 24, November 19, 2006.