Decision support systems (DSS) are interactive software-based

systems intended to help managers in decision-making by

accessing large volumes of information generated from various
related information systems involved in organizational business
processes, such as office automation system, transaction
processing system, etc.

DSS uses the summary information, exceptions, patterns, and

trends using the analytical models. A decision support system helps
in decision-making but does not necessarily give a decision itself.
The decision makers compile useful information from raw data,
documents, personal knowledge, and/or business models to
identify and solve problems and make decisions.

Programmed and Non-programmed Decisions

There are two types of decisions - programmed and non-
programmed decisions.

Programmed decisions are basically automated processes, general

routine work, where −

 These decisions have been taken several times.

 These decisions follow some guidelines or rules.

For example, selecting a reorder level for inventories, is a

programmed decision.

Non-programmed decisions occur in unusual and non-addressed

situations, so −

 It would be a new decision.

 There will not be any rules to follow.
 These decisions are made based on the available information.
 These decisions are based on the manger's discretion,
instinct, perception and judgment.

For example, investing in a new technology is a non-programmed

decision.

Decision support systems generally involve non-programmed

decisions. Therefore, there will be no exact report, content, or
format for these systems. Reports are generated on the fly.
Attributes of a DSS
 Adaptability and flexibility
 High level of Interactivity
 Ease of use
 Efficiency and effectiveness
 Complete control by decision-makers
 Ease of development
 Extendibility
 Support for modeling and analysis
 Support for data access
 Standalone, integrated, and Web-based

Characteristics of a DSS
 Support for decision-makers in semi-structured and
unstructured problems.
 Support for managers at various managerial levels, ranging
from top executive to line managers.
 Support for individuals and groups. Less structured problems
often requires the involvement of several individuals from
different departments and organization level.
 Support for interdependent or sequential decisions.
 Support for intelligence, design, choice, and implementation.
 Support for variety of decision processes and styles.
 DSSs are adaptive over time.

Benefits of DSS
 Improves efficiency and speed of decision-making activities.
 Increases the control, competitiveness and capability of
futuristic decision-making of the organization.
 Facilitates interpersonal communication.
 Encourages learning or training.
 Since it is mostly used in non-programmed decisions, it
reveals new approaches and sets up new evidences for an
unusual decision.
 Helps automate managerial processes.

.
Components of a DSS
Following are the components of the Decision Support System −

 Database Management System (DBMS) − To solve a problem the

necessary data may come from internal or external database.
In an organization, internal data are generated by a system
such as TPS and MIS. External data come from a variety of
sources such as newspapers, online data services, databases
(financial, marketing, human resources).
 Model Management System − It stores and accesses models that
managers use to make decisions. Such models are used for
designing manufacturing facility, analyzing the financial
health of an organization, forecasting demand of a product or
service, etc.
Support Tools − Support tools like online help; pulls down
menus, user interfaces, graphical analysis, error correction
mechanism, facilitates the user interactions with the system.

Classification of DSS
There are several ways to classify DSS. Hoi Apple and Whinstone
classifies DSS as follows −

 Text Oriented DSS − It contains textually represented

information that could have a bearing on decision. It allows
documents to be electronically created, revised and viewed
as needed.
 Database Oriented DSS − Database plays a major role here; it
contains organized and highly structured data.
 Spreadsheet Oriented DSS − It contains information in spread
sheets that allows create, view, modify procedural knowledge
and also instructs the system to execute self-contained
instructions. The most popular tool is Excel and Lotus 1-2-3.
 Solver Oriented DSS − It is based on a solver, which is an
algorithm or procedure written for performing certain
calculations and particular program type.
 Rules Oriented DSS − It follows certain procedures adopted as
rules.
 Rules Oriented DSS − Procedures are adopted in rules oriented
DSS. Export system is the example.
  Compound DSS − It is built by using two or more of the five
structures explained above.

Types of DSS
Following are some typical DSSs −

 Status Inquiry System − It helps in taking operational,

management level, or middle level management decisions,
for example daily schedules of jobs to machines or machines
to operators.
 Data Analysis System − It needs comparative analysis and
makes use of formula or an algorithm, for example cash flow
analysis, inventory analysis etc.
 Information Analysis System − In this system data is analyzed
and the information report is generated. For example, sales
analysis, accounts receivable systems, market analysis etc.
 Accounting System − It keeps track of accounting and finance
related information, for example, final account, accounts
receivables, accounts payables, etc. that keep track of the
major aspects of the business.
 Model Based System − Simulation models or optimization
models used for decision-making are used infrequently and
creates general guidelines for operation or management.

Overview of DSS
A decision support system (DSS) is a computerized information system used to help

in decision-making activities in an organization or a business by analyzing large

datasets. It compiles the information that can be used to solve problems and make

better decisions.

It proposes using the theory of options to systematically analyze, understand, and

quantify flexibility systematically through DSS use to a class of decision-making

scenarios. The flexibility derived from this application is conceived as an options

portfolio change in value. Anecdotal evidence of DSS value reported in the MIS

literature is compared with the information provided by options theorization. Provide

education and support to University members who provide support to disabled

students.

Components of DSS
There are 3 main fundamental architectural components which are as follows:

The Users
The main component of the Decision Support System is the user. As DSS uses are

normally managers, policymakers, etc., who may not qualified computer expert;

hence DSS should provide easy to use interfaces and some guidance for using DSS

and also interaction with the model, such as getting recommendations from it.

ADVERTISEMENT

Learning Paths @ $19 Most Popular Learning Paths in

Finance, Financial Modeling and Excel just for $19 5 to 30+ Courses |
20 to 100+ Hours of Videos | Certificates for each Course Completed

The main goal of DSS is to make sure that the users are utilizing and get benefitted

from DSS.
Database Management System (DBMS)
A DBMS acts as a data bank for the DSS. It stores large quantities of data collected

from different sources. It provides logical data structures for user interaction. Inputs

and outputs are stored in The database. All the processing is done in the database.

DBMS should inform the system user about how to access the database and the

different types of data available.

Model-based Management System (MBMS)

This system’s function is to fetch the data and from DBMS and transform that data

into information that helps for proper decision making. It should also provide proper

assistance to the user for model development.

Components of DSS
Components of DSS can be categorized as:

1. Inputs: Records, Data factors, numbers, and characteristics for analyzing.

2. User Knowledge and Expertise: To run the proper functioning and provide inputs,

the user must know how to use the system.

3. User Interface: DSS should support model construction and model analysis by

providing a well-structured user interface.

4. Decisions: Based on user requirements, results are generated by the Decision

Support System.
Types of Decision Support System
There are various types of decision support system, which are classified as:

1. Data-driven
Decision Support System includes file drawer systems, data analytics systems,

analytical information systems, data storage systems and emphasizes access and

manipulation of large structured data databases.

2. Model-driven
Decision Support System model comes from a variety of fields or specialties and

could include accounting models, financial models, representative models,

optimization models, etc.

3. Knowledge-driven
This Knowledge-driven focuses on knowledge and advise managers to take action on

the basis of a certain knowledge base analysis. Predefined facts, Stored procedures,

rules, and limitations are also referred to solve problems. It also has special expertise

in problem-solving and is closely associated with data mining.

4. Document-driven
This system helps managers obtain and manage unstructured documents and web

pages by integrating a range of storage and processing technologies to provide a

complete review of documents and analysis.

5. Communication -driven
This is also called group decision support systems (GDSS). Communication driven

DSS includes more than one person working to solve complex problems. It helps

executives and managers work together to come to the final solution to solve

problems. Technology can be used for Communication driven DSS like Microsoft’s

NetMeeting, Groove, etc.

Advantages of a Decision Support System

 It Saves Time by speeding up the process of decision making.

 It Improves communication between people through meetings, brainstorming

sessions, etc.

 Reports generated by the Decision Support System can be used as evidence.

 It helps to automate processes.

 Reduction of cost

Disadvantages of a Decision Support System

 Overload Information

 Reduction of status

 Unanticipated effects

 Cost in Monetary

 Too much DSS dependency

Where Can We Use DSS?
There are so many ways where we can use DSS. We can use the Clinical decision

support system for medical diagnosis. The bank loan officer can use DSS to verify the

credit of a loan applicant or an engineering company that is working on various

projects and wants to make sure if they can be competitive with their expenditures.

DSS is mostly used in business and management, which helps for the identification of

negative trends, and better allocation of business

DSS is no longer limited to large, bulky mainframe computers as technology

continues to move forward. DSS is basically a software application; hence it can be

loaded with laptops, Tabs. Also, some DSS applications can be accessed via mobile

devices. For the user who travels commonly, DSS flexibility is extremely beneficial.

This allows you to be always well informed, which allows you to make the best

decisions at all times for your business and clients. The ideal systems are able to use

and analyze information to make user choices. DSS includes data focuses on the

target or forecast revenue and sales, time periods, sales figures, and other

inventories.