Decision Support Systems

3/28/2013

The Managers Job & Decision Making

Decision refers to a choice that individuals and group make among two or more alternatives. Decision making is a systematic process composed of three major phases: intelligence, design and choice (Simon 1977).

3/28/2013

Simons model of decision making

3/28/2013

Decision Making as a Component of Problem Solving

Intelligence
Decision making

Design Problem solving

Choice

Implementation Monitoring

3/28/2013

Types of decisions

Structured or programmed decisions: It is routine and repetitive and is made within the framework of organizational policies and rules. Such decisions are made by managers at comparatively lower levels where the factors affecting decision making are static and well-structured.

3/28/2013

Unstructured decision

Also known as Non-programmed decisions, Is relevant for solving unique/unusual problems in which various alternatives cannot be decided in advance. They are novel and nonrecurring and therefore readymade solutions are not available. They are usually taken by managers at higher levels in the organization.
3/28/2013 6

semi structured decision

These decisions are partially programmable, but still requires human judgment. Decisions of this type are characterized as having some agreement on the data, process, and/or evaluation to be used, but are also typified by efforts to retain some level of human judgment in the decision making process.

7 3/28/2013

MODERN CLASSIFICATION OF DSS

Model-driven DSS A model-driven DSS emphasizes access to and manipulation of financial, optimization and/or simulation models. Data-driven DSS In general, a data-driven DSS emphasizes access to and manipulation of a time-series of internal company data and sometimes external and real-time data. Simple file systems accessed by query and retrieval tools provide the most elementary level of functionality. Communications-driven DSS Communications-driven DSS use network and communications technologies to facilitate decision-relevant collaboration and communication.
3/28/2013 8

Document-driven DSS
A document-driven DSS uses computer storage and processing technologies to provide document retrieval and analysis. Large document databases may include scanned documents, hypertext documents, images, sounds and video.
3/28/2013

Knowledge-driven DSS
Knowledge-driven DSS can suggest or recommend actions to managers. These DSS are person-computer systems with specialized problem-solving expertise. The "expertise" consists of knowledge about a particular domain, understanding of problems within that domain, and "skill" at solving some of these problems .

Working Definition of DSS

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 makers 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.

3/28/2013

10

Problem Solving Factors

Multiple decision objectives Increased alternatives Increased competition The need for creativity Social and political actions International aspects Technology Time compression

3/28/2013

11

Characteristics of a DSS
Handles large amounts of data from different sources Provides report and presentation flexibility Offers both textual and graphical orientation

3/28/2013

12

Characteristics of a DSS
Supports drill down analysis Performs complex, sophisticated analysis and comparisons using advanced software packages Supports optimization, satisficing, and heuristic approaches

3/28/2013

13

Solution Types

Optimization model
Finding the best solution

Satisficing model
Finding a good -- but not necessarily the best -- solution to a problem

Heuristics
Commonly accepted guidelines or procedures that usually find a good solution

3/28/2013

14

Characteristics of a DSS

Performs different types of analyses

What-if analysis
Makes hypothetical changes to problem and observes impact on the results

Simulation
Duplicates features of a real system

Goal-seeking analysis
Determines problem data required for a given result

3/28/2013

15

Capabilities of a DSS

Highly structured problems

Straightforward problems, requiring known facts and relationships.

Semi-structured or unstructured problems

Complex problems wherein relationships among data are not always clear, the data may be in a variety of formats, and are often difficult to manipulate or obtain
3/28/2013 16

Support for various managerial levels Support to individuals and groups Support to interdependent and/or sequential decisions Support all phases of the decisionmaking process Support a variety of decision-making processes and styles

3/28/2013

17

Decision Making Levels

Strategic Tactical Operational High Operational-level managers involved with daily decisions

Strategic-level managers involved with long-term decisions

Low Decision Frequency

3/28/2013

18

Integration of TPS, MIS, and DSS

In many organizations they are integrated through a common database Separation of DSS transactions in the database from TPS and MIS transactions may be important for performance reasons

3/28/2013 19

Web-Based Decision Support Systems

Web-based decision support systems

Decision support system software provides business intelligence through web browser clients that access databases either through the Internet or a corporate intranet

3/28/2013

20

Components of a DSS

Model management software (MMS)

Coordinates the use of models in the DSS

Model base
Provides decision makers with access to a variety of models

DBMS Dialogue manager

Allows decision makers to easily access and manipulate the DSS

3/28/2013

21

Database

Model base

DBMS

MMS

Access to the internet, networks, and other computer systems

External database access

External databases

Dialogue manager

3/28/2013

22

Model Base
Model

Base

Provides decision makers with access to a variety of models and assists them in decision making
Models

Financial models Statistical analysis models Graphical models Project management models
3/28/2013 23

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

3/28/2013

24

DSS Software

The Brain Analytica Decision Explorer DSS Vendor List Integrated Decision Support Corporation Load Planner For Advanced Logistics Management Management Sciences Associates Meetings Works IBM Rational SAP's BI Solution SAP's Business Objects SAS Analytics SAS Business Intelligence PlanningDSS.COM Spreadsheet Spatial Decision Support System (SDSS) ThinkTank

25

3/28/2013

Group Decision Support System

Group Decision Support System (GDSS)

Contains most of the elements of DSS plus software to provide effective support in group decision-making settings

3/28/2013

26

Databases

Model base

GDSS processor

GDSS software

Access to the internet and corporate intranet, networks, and other computer system

Dialogue manager

External database access

External databases

Users

3/28/2013

27

Characteristics of a GDSS
Special design Ease of use Flexibility Decision-making support

Delphi approach (decision makers are geographically dispersed) Brainstorming Group consensus Nominal group technique

3/28/2013

28

Characteristics of a GDSS
Anonymous input Reduction of negative group behaviour Parallel communication Automated record keeping Cost, control, complexity factors

3/28/2013

29

Group Results Matrix

3/28/2013

30

Components of a GDSS and GDSS Software

Database Model base Dialogue manager Communication capability Special software (also called GroupWare) E.g., Lotus Notes

people located around the world work on the same project, documents, and files, efficiently and at the same time
3/28/2013 31

GDSS Alternatives
high
Decision frequency Local area Wide area decision network decision network

Decision room low close

Teleconferencing

distant

Location of group members

3/28/2013 32

Decision Room

Decision Room
For decision makers located in the same geographic area or building Use of computing devices, special software, networking capabilities, display equipment, and a session leader Collect, coordinate, and feed back organized information to help a group make a decision Combines face-to-face verbal interaction with technology-aided formalization

3/28/2013

33

3/28/2013

34

Wide Area Decision Network

Characteristics
Location of group members is distant Decision frequency is high Virtual workgroups
Groups of workers located around the world working on common problems via a GDSS

3/28/2013

35