5.3 Decision Support Systems (DSS)

5.3.1 Introduction to DSS

Decision support systems (DSS) are a type of a computer based information system that
provide interactive information support to the human decision maker during the process
of arriving at a decision. They are interactive systems that assist a decision maker when
faced with unstructured or semi structured business problems.

DSSs use analytical models, specialized databases, a decision makers own insights and
judgments and an interactive computer-based modeling process.

DSSs are designed to be ad hoc quick response systems that are initiated and controlled
by business decision makers.

In general DSS can perform the following functions.

• Handle large amounts of data from different sources – internal and external
databases
• Provide report and presentation flexibility
• Offer both textual and graphical orientation
• Support drill-down analysis
• Perform complex, sophisticated analysis and comparisons using advanced
software packages

5.3.2 Capabilities of a DSS

DSS can assist with problem solving phases, decision frequencies, and different degrees
of problem structure. DSS approaches can also help at all levels of decision making
process.

Support for problem solving phases:

Objective: assist decision makers with the phases of problem solving. The phases
include intelligence, design, choice, implementation and monitoring.
By supporting all types of decision-making approaches, a DSS gives the decision maker
a great deal of flexibility in getting computer support for decision making activities.

Support for different decision frequencies:

Decisions can range from one of a kind to repetitive decisions. One of a kind decisions
are typically handled by an ad hoc DSS. An ad hoc DSS is concerned with situations or
decisions that come up only a few times during the life of the organization; in small
businesses, they may happen only once.

Example: decision to invest on development of a new product.
Repetitive decisions are addressed by an institutional DSS. An institutional DSS handles
situations or decisions that occur more than once, usually several times a year or more.
An institutional DSS is used repeatedly and refined over the years.

Example: Production scheduling

Support for different problem structures:

Decisions can range from highly structured and programmed to unstructured and nonprogrammed.

Highly structured problems are straightforward, requiring known facts and relationships.
Semistructured or unstructured problems are more complex. The relationships among
the pieces of data are not always clear; the data may be in a variety of formats and the
data is often difficult to manipulate or obtain.

Support for various decision making levels:

DSSs can provide help for managers at different levels within the organization.
Operational managers can get assistance for daily and routine decision making. Tactical
decision makers can be supported with analysis tools to ensure proper planning and
control. At the strategic level, DSSs can help managers by providing analysis for long
term decisions requiring both internal and external information.

5.3.3 Basic Components of a DSS

Main components of a DSS include a database and a model base. In addition a typical
DSS contains a dialogue manager, which allows decision makers to easily access and
manipulate the DSS and to use common business terms and phrases.

Apart from the dialogue manager additional components include access to the internet,
networks and other computer-based systems. This allows the DSS to tie into other
powerful systems, including the TPS or function-specific subsystems.



The database

The database management system allows managers and decision makers to perform
qualitative analysis on the company’s vast stores of data in databases, data warehouses,
and data marts.

A data-driven DSS primarily performs qualitative analysis based on the company’s
databases. Data-driven DSSs tap into vast stores of information contained in the
corporate database, retrieving information on inventory, sales, personnel, production,
finance, accounting and other areas.

Data mining and business intelligence are often used in a data-driven DSS.

A database management system can also be connected to external databases to give
managers and decision makers even more information and decision support.

External databases can include the Internet, libraries, government databases, and more.
The combination of internal and external database access can give key decision makers
a better understanding of the company and its environment.

The Model base
DSSs rely on model bases as well as databases as vital system resources. A modeldriven
DSS primarily performs mathematical or quantitative analysis. The model base
allows managers and decision makers to perform quantitative analysis on both internal
and external data.

It is a software component that consists of models used in computational and analytical
routines that mathematically express relationships among variables. For example, a
spread sheet program might contain models to express relationships such as
sales value = product price x quantity

A DSS model base could include models and analytical techniques used to express
much more complex relationships. Examples are multiple linear programming models
and capacity budgeting models. The model base gives decision makers access to a
variety of models so that they can explore different scenarios and see their effects in
order to assist them in decision making.

Model management software (MMS) is often used to coordinate the use of models in a
DSS, including financial, statistical analysis, graphical, and project-management models.
DSS software typically contains built in analytical modeling routines and also enables
you to build your own models.

The dialogue manager

The dialogue manger allows users to interact with the DSS to obtain information. It
assists with all aspects of communications between the user and the hardware and
software that constitute the DSS

5.3.4 Comparison of MIS and DSS

A DSS differs from an MIS in numerous ways, including the type of problems solved, the
support given to users, the decision emphasis and approach, and the type, speed, output
and development of the system used. Following tables provide a outline of these
differences.





5.3.5 Group Support Systems (GSS)

Although DSS approach has resulted in better decision making for all levels of individual
users, it is considered as not suitable for group decision making.

A group support system (GSS), also called a group decision import system and a
computerized collaborative work system consists of most of the elements in the DSS,
plus software to provide effective support in group decision making settings.



Group support systems are used in most industries.

Architects: to collaborate with other architects and builders to develop the best plans and
to compete for contracts.

Manufacturing companies: to link raw material suppliers to their own company systems.

Engineers: use GSS called Mathcard Enterprise to create, share and reuse calculations.

Characteristics of a GSS

GSS developers utilize the advantages of individual support systems and add new
approaches unique to group decision making. Following are some of the characteristics
that improve and enhance decision making.

Special design: There are special procedures, devices and approaches needed in group
decision making settings. These procedures must promote creative thinking,
effective communications, and good group decision-making techniques.

Ease of use: GSS must be easy to learn and use

Flexibility: Support the different decision making styles of managers and find a way to
combine their different views into a common view of the task at hand.
Decision making support for different decision making approaches:
Delphi approach provides for geographically separated group decision makers
as follows.

Brainstorming- often consists of members offering ideas “off the top of their heads”.
Group consensus approach- force the members in a group to reach a unanimous
decision.

Nominal group technique-encourage feedback from individual group members and the
final decision is made by voting.

Anonymous Input:

Many GSSs support anonymous input. That is, the person giving an input is not
known to the other members. It allows to give same consideration to the input
from any level of employee.

Reduction of negative group behavior:

ability to suppress or eliminate group behavior
that is harmful to effective decision making. Procedures for effectively planning
and managing group meetings can be incorporated into the GSS approach.
Parallel communication: Speed up meeting times and result in better decisions by
providing facility to enter comments in the same time by entering into a PC.
These comments and issues are displayed on every group members PC
immediately.

Automated record keeping: Keeps detailed records of a meeting automatically.
Automatic voting and ranking features are available. After each group member
votes, the GSS records each vote and makes appropriate rankings.

GSS software

Often called groupware or workgroup software, helps with joint workgroup scheduling,
communication and management.

Example: Lotus Notes

GSS software allows ‘work teams’ to collaborate and come up with better decisionswithout
considering the geographical situation. GSS software is increasingly being
incorporated into existing software packages. Today, groupware can interact with
wireless devices.

Apart from groupware, GSSs use a number of tools including, email and instant
messaging (IM), video conferencing, group scheduling, project management and
document sharing.

5.3.6 Executive Support Systems (ESS)

ESSs are specialized DSSs developed to assist senior-level executives to make
strategic decisions. Sometimes it is also known as Executive Information Systems (EIS).
Although at first they were developed focusing on meeting the strategic information
needs of top management, now it is widely used by persons at middle levels in the
organizational structure. ESSs serve to indicate issues of importance to the organization,
indicate new directions the company may take, and help executives monitor the
company’s progress.

Some of the major decision making that can be supported through an ESS are, ability to
provide an overall vision, strategic planning and organizing, strategic control and crisis
management.

Although ESS is a special type of DSS, DSSs and ESSs are different in two important
ways. The modeling and analysis tools of a DSS allow users to answer questions. On
the other hand ESSs present structured information about aspects of the organisations
that is considered as important by the executives.

Characteristics of ESSs

Tailored to individual executives: An ESS is an interactive hands-on too, that allows an executive to focus, filter and organize data and information.

Easy to use: An ESS must be easy to learn and use and not very complex, in order to
save the time of top-level executives.

Have drill-down abilities: An ESS allows executives to drill down into the company to
determine how certain data was produced. Drilling down allows an executive to
get more detailed information if needed.

Support the need for external data: Information from competitors, the federal
government, trade associations and journals and consultants are required to
make effective top level decisions. An effective ESS is able to extract data useful
to the decision maker from variety of sources including the Internet and other
electronic publishing sources.

Help with uncertain situations: There may be a high degree of uncertainty with most
executive decisions. Handling these unknown situations using modeling and
other ESS procedures help top-level managers to measure the amount of risk in
a decision.

Have a future orientation: Executive decisions are future oriented; meaning those
decisions will have a broad impact for years or decades. The information sources
to support future- oriented decision making are usually informal.
Linked with value-added business processes: Like other information systems ESSs are
linked with executive decision making about value added business processes.

Capabilities of ESSs

An effective ESSs should have the capability to support executive decisions with
components such as strategic planning and organizing, crisis management etc. These
decisions are related to an organization’s overall profitability and direction.

Support for defining an overall vision: The vision includes the organization’s major
product lines and services, the types of businesses it supports today and in the
future, and its overriding goals. Providing a broad vision for the entire
organization is a key role of senior executives.

Support for strategic planning: Strategic planning involves determining long term
objectives by analyzing the strengths and weaknesses of the organization,
predicting future trends and projecting the developments of new product lines. It
also involves planning the acquisition of new equipment, analyzing major
possibilities, and making difficult decisions.

Support for strategic organizing and staffing: ESSs help top-levels executives to analyze the impact of; staffing decisions, changes in employee benefits, potential pay
raises, and new work rules.

Support for strategic control: Strategic control involves monitoring and managing the
overall operations of the organization. Effective ESS helps top-level managers
make the most of their existing resources and control all aspects of the
organization.

Support for crisis management: Strategic emergency plans can be put into place with the help of an ESS. These emergency plans help organizations recover quickly in the
event of an emergency or a disaster.