Decision Support systems and Business

Intelligence
Changing Business Environments And
Computerized Decision Support
Changing Business Environments And
Computerized Decision Support
The business pressures-responses-support
model

• The business Environment

• Business environment factors divided into four
categories: markets, consumer demands, technology,
and societal.
Changing Business Environments And
Computerized Decision Support
Organizational responses: be reactive,
anticipative, adaptive, and proactive.
• Employ strategic planning
• Use new and innovative business model
• Restructure business process
• Use new IT to improve communication
•:
•:
Changing Business Environments And
Computerized Decision Support
Computerized support
• It used to facilitate closing the gap between the
current performance and the desired
performance
Management Support System (MSS)
Four major information technologies have
been successfully used to support managers
• DSSs: provide support primarily to analytical,
quantitative types of decisions.
• Executive (enterprise) support systems: support
the informational roles of executives.
• Group decision support systems: support
managers working in groups.
• Intelligence systems: provide multifunctional
support.
DSS Definition
Decision support system (DSS) are used to
make business decision often based on data
collected by On-Line-Analytical-Processing
(OLAP) system
• Example of data used for making decision:
• Retail sales transaction detail

DSS as an Umbrella term: Describe any

computerized system that support decision
making in an organization
Why Use of DSS
Why use decision support systems?
• Speedy computations
• Improve communication and collaboration
• Increased productivity of group members
• Improve data management
• Managing giant data warehouses
• Quality support
• Overcoming cognitive limits in processing and
storing information
• Using the Web
• Anywhere, anytime support
Decision Making and Management
Management is a process by which
organizational goals are achieved through
the use of resources (people, money,
energy, materials, space, time).
These resource are considered to be inputs,
and the attainment of the goals is viewed as
the output of the process.
Measuring success
Productivity = output/input
Management (decision making) – Manager
(decision maker)
Decision Making and Management
The nature of managers’ work
• Interpersonal : figurehead, leader, liaison/
• Informational : monitor, disseminator,
spokesperson.
• Decisional : entrepreneur, disturbance handler,
resource allocator, negotiator.
Decision Making and Management
Why Managers Need IT Support
• Processing information manually is growing
increasingly difficult
• Computerized modeling
• Examining numerous alternatives very quickly
• Providing a systematic risk analysis
• Being integrated with communication systems and
databases
• Being used to support group work
Phases of Decision Making
Phases of Decision Making
Intelligence phase
• Organizational objectives
• Search and scanning procedures
• Data collection
• Problem identification
• Problem classification
• Problem statement

Result:
• Reality is examined
• The problem is identified and defined
Phases of Decision Making
Design phase
• Formulate a model (Assumption)
• Set criteria for choice
• Search for alternative
• Predict and measure outcomes

Result:
• Representative model is constructed
• The model is validated and evaluation criteria are
set
Phases of Decision Making
Choice phase
• Solution to the model
• Sensitivity analysis
• Selection of Best (Good) alternative
• Plan for implementation
• Design of control system

Result:
• Proposed solution is included to the model
• If reasonable, move to implementation phase
Phases of Decision Making
Implementation phase
• Put solution into action

Result:
• Solution to the original problem
Decision Makers : Who are They?
Decision maker classification
• Individual decision makers can be single person
or a computer system
• Multiple decision makers can be:
• Team where members support a single decision maker
• Group where are members have a say in decision
• Organization where global agreement is needed
Framework for Computerized Decision Support
Framework for Computerized Decision Support
Three type of decision:
• Structured problem : are routine problems for
which standard solution method exist.
• Procedure for obtaining the best solution are known
• Objective are clearly defined
• Unstructured problem : are fuzzy, complex
problem for which there are no cut-and direct
solution methods
• Have no structure phase
• Often solve with human intuition
• Semi-structured problem : is a decision problem
in which some but not all phases are structured
• In between solve with standard solution procedure and
human judgment
Framework for Computerized Decision Support
Types of control in all managerial activities
• Strategic planning
• The long-range goals & policies for resource allocation
• Management control
• The acquisition & efficient utilization of resources in
the accomplishment of organizational goals
• Operational control
• The efficient & effective execution of specific tasks
Architecture of a Decision System

Model manipulate data as related to a specific situation

The user themselves are also important components of the
architecture
DSS and Data Warehouse
Data warehouse is a decision support
database
The data warehouse database that is :
• Integrated : centralized and consolidated
integrates data from entire organization
• Subject-oriented : arranged and optimized to
provide answer to question from diverse
functional area within a company
• Time-variant : represent the flow of data
through time
• Non-volatile : data are never removed
On-Line Analytical Processing (OLAP)
Element of DSS
Support ad-hoc querying for business analyst.
Multidimensional view of data is foundation of
OLAP
Framework for Business Intelligence (BI)
What is BI?
An umbrella that combines architectures,
tools, database, analytical tools,
applications and methodologies.
Content-free expression
Objective:
• To enable interactive access to data
• To enable manipulation of data
• To give managers & analyst the ability to conduct
appropriate analysis.
The Architecture of BI
Components Of BI system
BI system has four major components:
Data warehouse : Source data
Business Analytics : a collection of tools for
manipulating, mining, and analyzing the data
in the data warehouse
Business performance management : for
monitoring & analyzing performance
User interface : Dashboard & other
information broadcasting tools
The DSS-BI connection
The architecture is very similar since BI
evolved from DSS.
DSS directly support specific decision
making, while BI provides accurate and
timely information, and indirectly support
decision making
BI has an executive and strategy orientation
while DSS has been oriented toward
analysts
Many tools used by BI are also considered
DSS tools (e.g., data mining and predictive
analysis)
Case study
Find a case study and address the followings
Define the organization
Define business problems
Provide possible solution
Describe the result