DSS SUMMARY

 Chapter one: Decision Support Systems and Business Intelligence

The business environment (climate) is constantly changing, and it is becoming more

and more complex. Organizations, private and public, are under pressures that force
them to respond quickly to changing conditions and to be innovative in the way they
operate. Such activities require organizations to be agile and to make frequent and
quick strategic, tactical, and operational decisions.
 Changing Business Environments and Computerized Decision Support

Companies are moving aggressively to computerized supports of their operations.

To understand why companies are embracing computerized.cd support, including
business Intelligence. We developed a model called the Business Pressure-
Responses-Support model.

 Explain business pressure-response model

The Business Pressures-Responses-Support model, as its name indicates, has three

components: and they are 1) Business pressures that result from today's business
climate, 2) Responses (actions taken) by companies to counter the pressures (or to
take advantage of the opportunities available in the environment), 3) Computerized
support that facilitates the monitoring of the environment and enhances the
response actions taken by organizations.
 Explain business environment and list four business environmental factors
The business environment is the environment in which organizations operate today
is becoming more and more complex. This complexity creates opportunities on the
one hand and problems on the other .Take globalization as an example. Today, you
can easily find suppliers and customers in many countries, which means you can buy
cheaper Materials and sell more of your products and services: great opportunities
exist. However, globalization also means more and stronger competitors.
Business environment factors can be divided into four major categories: markets,
customer demands, technology and societal.
 List some responses that managers take in order to reduce business pressure
 Employ strategic planning
 Use new and innovative business models
 Restructure business processes
 Participate in business alliances
 Improve corporate information systems

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 Improve partnership relationships

 Encourage innovation and creativity
 Explain Closing the Strategy Gap
One of the major objectives of computerized decision support is to facilitate closing
the gap between the current performance of an organization and its desired
performance, as expressed in its mission, objectives, and goals, and the strategy to
achieve them.
 Managerial decision making
Management is a process by which organizational goals are achieved by using
resources. The resources are considered inputs, and attainment of goals is viewed as
the output of the process. The degree of success of the organization and the manager
is often measured by the ratio of outputs to inputs.
Mintzberg's (2008) classic study of top managers and several replicated studies
suggest that managers perform 10 major roles that can be classified into three major
categories: interpersonal, informational, and decisional (see Table 1.2).

Managers usually make decisions by following a four-step process (a.k.a. the

scientific approach)
1. Define the problem (or opportunity)
2. Construct a model that describes the real-world problem
3. Identify possible solutions to the modeled problem and evaluate the solutions
4. Compare, choose, and recommend a potential solution to the problem.

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 Decision making is difficult because of the following reasons

 Technology, information systems, advanced search engines, and globalization
result in more and more alternatives from which to choose
 Government regulations and the need for compliance, political instability and
terrorism, competition, and changing consumer demands produce more
uncertainty, making it more difficult to predict consequences and the future
 Other factors are the need to make rapid decisions, the frequent and
unpredictable changes that make trial-and-error learning difficult, and the
potential costs of making mistakes.
 Explain computerized support for decision making
Computer applications have moved from transaction processing and monitoring
activities to problem analysis and solution applications, and much of the activity is
done with web-based technologies. BI tools such as data warehousing, data mining,
online analytical processing (OLAP), dashboards. and the use of the Web for
decision support are the cornerstones of today's modem management. Managers
must have high-speed, networked information systems (wire-line or wireless) to
assist them with their most important tasks.
 Why We Use Computerized Decision Support Systems
Today's computerized systems possess capabilities that can facilitate decision
support in a Number of ways. Including the following.
 Speedy of computations. A computer enables the decision maker to perform many
to perform quickly and at low cost.
 Improved communication and collaboration: many decisions are made today by
groups whose members may be in different locations .groups can collaborate and
communicate readily by using web-based tools.
 Increased productivity of group members: Assembling a group of decision
makers, especially experts, in one place can be costly. Computerized support can
improve the collaboration process of a group and enable its members to be different
locations.
 Improved data management: many decisions involve complex computations. Data
for these can be stored in different databases anywhere in the organization and even
possibly at websites outside the organization. The data may include text, sound,
graphics and video and it may be necessary to transmit data quickly from distant
locations.

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 Managing giant data warehouse: large data warehouse contain terabytes and even
petabytes of data. Computers can provide extremely greet storage capability for any
type of digital information. And this information can be accessed and searched very
rapidly.
 Quality support: computers can improve quality of decisions made. for example
more data can be accessed ,more alternatives can be evaluated ,forecasts can be
improved, risk analysis can be performed quickly and the views of experts can be can
be collected quickly and at reduced cost.
 Agility support: completion today is based not just on price but also on quality,
timeliness, customization of products and customer support. In addition
organizations must be able frequently and rapidly change their mode of operation,
reengineer processes and structures. Empower employees and innovate in order to
adapt their changing environments.
 Using Web; anywhere, anytime support.
 An early framework for computerized decision support

An early framework for computerized decision support includes several major

concepts that are used in forthcoming sections and chapters of this book. Gorry and
Scott-Morton created and used this framework in the early 1970s, and the
framework then evolved into a new technology called DSS.
Garry and Scott-Morton (1971) proposed a framework that is a 3-by-3 matrix. As
shown in Figure 1.2. Two dimensions are the degree of structuredness and the types
of control.

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Degree of structuredness: The left side of Figure 1.2 is based on Simon·s (1977)
idea that decision-making processes fall along a continuum that ranges from highly
structured (sometimes called programmed) to highly unstructured (i.e.,
nonprogmmmed)
Structured processes are routine and typically repetitive problems for which
Standard solution methods exist. Unstructured processes are fuzzy, complex
problems for which there are no cut-and-dried solution methods. Simon also
described the decision-making process with II three-phase process of intelligence,
design, and choice. Later, a fourth phase was added: implementation (see Chapter 2).
The four phases are defined as follows:
1. Intelligence. The phase involves searching for conditions that call for decisions.
2. Design. This phase involves Inventing, developing, and analysing possible
alternative courses of action (solutions).
3. Choice. This phase involves selecting a course of action from among that
available.
4. Implementation: This phase involves adapting the selected course of action to the
decision situation (i.e., problem solving or opportunity exploiting).
 Management Science Approach
Also referred to as Operation Research .In solving problems, managers should
follow the five-step MS approach.
1) Define the problem
2) Classify the problem into a standard category (*)
3) Construct a model that describes the real-world problem
4) Identify possible solutions to the modeled problem and evaluate the solutions
5) Compare, choose, and recommend a potential solution to the problem.
 Explain Automated Decision Making:
A relatively new approach to support decision making is called automated decision
system (ADS), sometimes also known as decision automation system.
ADS is a rule- based system that provides solution, usually in one functional area
(e.g. Finance, marketing) to specific repetitive managerial problem usually in one
industry. ADS initially appeared in the airline industry called revenue (or yield)
management (or revenue optimization) systems.

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 Computer Support for Unstructured Decisions

Unstructured problems can be only partially supported by standard computerized
quantitative methods; they often require customized solutions and alsoThey benefit
from data and information, Intuition and judgment may play a role.
Computerized communication and collaboration technologies along with knowledge
management are often used.
 Computer Support for Semi-structured Problems
Solving semi-structured problems may involve a combination of standard solution
procedures and human judgment.
MS handles the structured parts while DSS deals with the unstructured parts
With proper data and information, a range of alternative solutions, along with their
potential impacts.
 Explain in detail Concept of Decision Support Systems(DSS)
In the early 1970s, scott-Morton first articulated the major concepts of DSS. He
defined Decision support system (DSS) as '"interactive computer-based systems,
which help Decision makers utilize data and models to solve unstructured problems"
(Gorry and Scott-Morton, 1971).
Decision support systems couple the intellectual resources of individuals with the
capabilities of the computer to improve the quality of decisions. It is a computer-
based support system for management a decision maker who deals with semi-
structured problems (Keen and Scott-Morton, 1978).
 DSS as an Umbrella Term
The term DSS can be used as an umbrella term to describe any computerized system
that Supports decision making in an organization. An organization may have a
knowledge management system to guide all its personnel in their problem solving.
Another organization may have separate support systems for marketing, finance, and
accounting; a supply chain management system for production; and several expert
systems for product repair diagnostics and help desks. DSS encompasses them all.
 DSS as a Specific Application
Although DSS usually refers to the umbrella term, some use it in a narrower scope
to refer to a process for building customized applications for unstructured or semi-
structured problems. Others use the term DSS to refer to the DSS application itself.

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 List and describe components of DSS architecture

The components of DSS architecture are Data, Model, Knowledge/Intelligence,

User Interface (API and/or user interface). The DSS methodology recognizes the
need for data to solve problems. These data can come from many sources, including
the Web. Every problem that has to be solved and every opportunity or strategy to
be analysed requires some data. Data are the first component of the DSS
architecture. Data related to a specific situation are manipulated by using models.
These models which are the second component of DSS architecture can be standard
or customized. Some systems have a knowledge or (intelligence) component. This is
the third component of DSS architecture. Users are vital fourth component of
architecture. Interfacing with the system via a user interface is the fifth component
of the DSS architecture.
 List and explain types of DSS
The two major types of DSS are the model-oriented DSS and data-oriented DSS.
Model oriented DSS is quantitative models are used to generate a recommended
solution to a problem.
Data-oriented DSS is a model which supports adhoc reporting and queries.
 Evolution of DSS into Business Intelligence
Use of DSS moved from specialist to managers, and then whomever, whenever,
wherever and also Enabling tools like OLAP, data warehousing, data mining,
intelligent systems, delivered via Web technology have collectively led to the term
“business intelligence” (BI) and “business analytics.
 Explain Business Intelligence (BI)
BI is an umbrella term that combines architectures, tools, databases, analytical tools,
applications, and methodologies .Like DSS, BI a content-free expression, so it means
different things to different people. BI's major objective is to enable easy access to
data (and models) to provide business managers with the ability to conduct analysis.
BI helps transform data, to information (and knowledge), to decisions and finally to
action.
 A Brief History of BI
The term BI was coined by the Gartner Group in the mid-1990s
However, the concept is much older
 1970s - MIS reporting - static/periodic reports.

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 1980s - Executive Information Systems (EIS).

 1990s - OLAP, dynamic, multidimensional, ad-hoc reporting -> coining of
the term “BI”
 2005+ Inclusion of AI and Data/Text Mining capabilities; Web-based
Portals/Dashboards.
 2010s - Yet to be seen.
 Explain The Architecture of BI
A BI system has four major components.
A data warehouse, with its source data and also is a large repository of well-
organized historical data, Business analytics, which is a collection of tools for
manipulating, mining, and analyzing the data in the data warehouse, and are the
tools that allow transformation of data into information and knowledge, Business
performance management (BPM) for monitoring and analyzing performance and
user interface which allows access and easy manipulation of other BI components
(e.g., dashboard).
 Describe the Styles of BI
The architecture of BI depends on its application MicroStrategy, Corp. distinguishes
five styles of BI and offers tools for each
1. report delivery and alerting
2. enterprise reporting (using dashboards and scorecards)
3. cube analysis (also known as slice-and-dice analysis)
4. ad-hoc queries
5. Statistics and data mining.
 List The Benefits of BI
 Faster, more accurate reporting (81%)
 Improved decision making (78%)
 Improved customer service (56%)
 Increased revenue (49%)
 The DSS–BI Connection
First, their architectures are very similar because BI evolved from DSS
Second, DSS directly support specific decision making, while BI provides accurate
and timely information, and indirectly support decision making
Third, BI has an executive and strategy orientation, especially in its BPM and
dashboard components, while DSS, in contrast, is oriented toward analysts

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Fourth, most BI systems are constructed with commercially available tools and
components, while DSS is often built from scratch
Fifth, DSS methodologies and even some tools were developed mostly in the
academic world, while BI methodologies and tools were developed mostly by
software companies
Sixth, many of the tools that BI uses are also considered DSS tools (e.g., data mining
and predictive analysis are core tools in both).
 A Work System View of Decision Support
Work system: a system in which human participants and/or machines perform a
business process, using information, technology, and other resources, to produce
products and/or services for internal or external customers
 Describe Elements of a Work System.
1) Business process. Variations in the process rationale, sequence of steps, or methods
used for performing particular steps.
2) Participants. Better training, better skills, higher levels of commitment, or better
real-time or delayed feedback.
3) Information. Better information quality, information availability, or information
presentation.
4) Technology. Better data storage and retrieval, models, algorithms, statistical or
graphical capabilities, or computer interaction
5) Product and services. Better ways to evaluate potential decisions.
6) Customers. Better ways to involve customers in the decision process and to obtain
greater clarity about their needs.
7) Infrastructure. More effective use of shared infrastructure, which might lead to
improvements.
8) Environment. Better methods for incorporating concerns from the surrounding
environment.
9) Strategy. A fundamentally different operational strategy for the work system.

TOOL CATEGORY TOOLS AND THEIR ACRONYMS

Data management Databases and database management system (DBMS)
Extraction, transformation, and load (ETL) systems
Data warehouses (DW), real-time DW, and data marts
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Executive information systems (EIS)
Visualization Geographical information systems (GIS)
Dashboards, Information portals
 DSS SUMMARY

This figure shows Major Tool Categories for MSS

 Explain Hybrid (Integrated) Support Systems

The objective of computerized decision support, regardless of its name or nature, is
to assist management in solving managerial or organizational problems (and assess
opportunities and strategies) faster and better than possible without computer.
Every type of tool has certain capabilities and limitations. By integrating several
tools, we can improve decision support because one tool can provide advantages
where another is weak.

END

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