DECISION SUPPORT SYSTEM

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.

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.

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.
Group Decision Support System (GDSS)

A group decision support system (GDSS) is an interactive computer-based system

that facilitates a number of decision-makers (working together in a group) in
finding solutions to problems that are unstructured in nature. They are designed in
such a way that they take input from multiple users interacting simultaneously with
the systems to arrive at a decision as a group.

The tools and techniques provided by the group decision support system improve

the quality and effectiveness of the group meetings. Groupware and web-based
tools for electronic meetings and videoconferencing also support some of the group
decision making processes, but their main function is to make communication
possible between the decision-makers.

In a group decision support system (GDSS) electronic meeting, each participant is

provided with a computer. The computers are connected to each other, to the
facilitator’s computer and to the file server. A projection screen is available at the
front of the room. The facilitator and the participants can both project digital text
and images onto this screen.

A group decision support system (GDSS) meeting comprises different phases, such
as idea generation, discussion, voting, vote counting and so on. The
facilitator manages and controls the execution of these phases. The use of various
software tools in the meeting is also controlled by the facilitator.

Components of Group Decision Support System (GDSS)

A group decision support system (GDSS) is composed of 3 main components,

namely hardware, software tools, and people.

 Hardware: It includes electronic hardware like the computer, equipment

used for networking, electronic display boards and audiovisual equipment. It
also includes the conference facility, including the physical set up – the
room, the tables, and the chairs – laid out in such a  manner that they can
support group discussion and teamwork.
 Software Tools: It includes various tools and techniques, such as electronic
questionnaires, electronic brainstorming tools, idea organizers, tools for
setting priority, policy formation tool, etc. The use of these software tools in
 a group meeting helps the group decision-makers to plan, organize ideas,
gather information, establish priorities, take decisions and document the
meeting proceedings. As a result, meetings become more productive.
 People: It compromises the members participating in the meeting, a trained
facilitator who helps with the proceedings of the meeting, and an expert staff
to support the hardware and software. The GDSS components together
provide a favorable environment for carrying out group meetings.

Features of Group Decision Support System (GDSS)

 Ease of Use: It consists of an interactive interface that makes working with
GDSS simple and easy.
 Better Decision Making: It provides the conference room setting and
various software tools that facilitate users at different locations to make
decisions as a group resulting in better decisions.
 Emphasis on Semi-structured and Unstructured Decisions: It provides
important information that assists middle and higher-level management in
making semi-structured and unstructured decisions.
 Specific and General Support: The facilitator controls the different phases
of the group decision support system meeting (idea generation, discussion,
voting and vote counting, etc.) what is displayed on the central screen and
the type of ranking and voting that takes place, etc. In addition, the
facilitator also provides general support to the group and helps them to use
the system.
 Supports all Phases of the Decision Making: It can support all the four
phases of decision making, viz intelligence, design, choice, and
implementation.
 Supports Positive Group Behavior: In a group meeting, as participants can
share their ideas more openly without the fear of being criticized, they
display more positive group behavior towards the subject matter of the
meeting.
Group Decision Support System (GDSS) Software Tools

Group decision support system software tools help the decision-makers in

organizing their ideas, gathering required information and setting and ranking
priorities. Some of these tools are as follows:

 Electronic Questionnaire: The information generated using the

questionnaires helps the organizers of the meeting to identify the issues that
 need immediate attention, thereby enabling the organizers to create a
meeting plan in advance.
 Electronic Brainstorming Tools: It allows the participants to
simultaneously contribute their ideas on the subject matter of the meeting.
As the identity of each participant remains secret, individuals participate in
the meeting without the fear of criticism.
 Idea Organizer: It helps in bringing together, evaluating and categorizing
the ideas that are produced during the brainstorming activity.
 Tools for Setting Priority: It includes a collection of techniques, such
as simple voting, ranking in order and some weighted techniques that are
used for voting and setting priorities in a group meeting.
 Policy Formation Tool: It provides the necessary support for converting the
wordings of policy statements into an agreement.

Information Vs Data

Data can be described as unprocessed facts and figures. Plain collected data as raw
facts cannot help in decision-making. However, data is the raw material that is
organized, structured, and interpreted to create useful information systems.
Data is defined as 'groups of non-random symbols in the form of text, images,
voice representing quantities, action and objects'.

Information/Data Collection Techniques

The most popular data collection techniques include −

 Surveys − A questionnaires is prepared to collect the data from the field.
 Secondary data sources or archival data: Data is collected through old
records, magazines, company website etc.
 Objective measures or tests − An experimental test is conducted on the
subject and the data is collected.
  Interviews − Data is collected by the system analyst by following a rigid
procedure and collecting the answers to a set of pre-conceived questions
through personal interviews.

Knowledge

 Personalized information
 State of knowing and understanding
 An object to be stored and manipulated
 A process of applying expertise
 A condition of access to information
 Potential to influence action

Sources of Knowledge of an Organization

 Intranet
 Data warehouses and knowledge repositories
 Decision support tools
 Groupware for supporting collaboration
 Networks of knowledge workers
 Internal expertise

KMS

A knowledge management system comprises a range of practices used in an

organization to identify, create, represent, distribute, and enable adoption to insight
and experience. Such insights and experience comprise knowledge, either
embodied in individual or embedded in organizational processes and practices.

Purpose of KMS

 Improved performance
 Competitive advantage
 Innovation
 Sharing of knowledge
 Integration
 Continuous improvement by −
o Driving strategy
 o Starting new lines of business
o Solving problems faster
o Developing professional skills
o Recruit and retain talent

MIS - Business Intelligence System

The term 'Business Intelligence' has evolved from the decision support systems and
gained strength with the technology and applications like data warehouses,
Executive Information Systems and Online Analytical Processing (OLAP).
Business Intelligence System is basically a system used for finding patterns from
existing data from operations.

Characteristics of BIS

 It is created by procuring data and information for use in decision-making.

 It is a combination of skills, processes, technologies, applications and
practices.
 It contains background data along with the reporting tools.
 It is a combination of a set of concepts and methods strengthened by fact-
based support systems.
 It is an extension of Executive Support System or Executive Information
System.
 It collects, integrates, stores, analyzes, and provides access to business
information
 It is an environment in which business users get reliable, secure, consistent,
comprehensible, easily manipulated and timely information.
  It provides business insights that lead to better, faster, more relevant
decisions.

Benefits of BIS

 Improved Management Processes.

 Planning, controlling, measuring and/or applying changes that results in
increased revenues and reduced costs.
 Improved business operations.
 Fraud detection, order processing, purchasing that results in increased
revenues and reduced costs.
 Intelligent prediction of future.

Business Intelligence Techniques

Analytics

Analytics is a business intelligence technique that involves the study of

available data to extract meaningful insights and trends. This is a popular BI
technique since it lets businesses deeply understand the data they have and
drive ultimate value with data-driven decisions. 

Predictive Modeling

Predictive modeling is a BI technique that utilizes statistical techniques to

create models that could be used in forecasting probabilities and trends. With
predictive modeling, it is possible to predict the value for a particular data item
as well as the attributes using multiple statistical models.

OLAP

Online analytical processing is a technique for solving analytical problems with

different dimensions. The most important value in OLAP is its
multidimensional aspect that lets users identify problems from different
perspectives. OLAP could be used to complete tasks such as budgeting, CRM
data analysis, and financial forecasting.
Data Mining

Data mining is a technique for discovering patterns in huge datasets and often
incorporates database systems, statistics, and machine learning to find these
patterns. Data mining is an integral process for data management as well as
the pre-processing of data since it ensures appropriate data structuring.

Model Visualization

The model visualization technique is used to transform the discovered facts

into histograms, plots, charts and other visuals that aid in proper interpretation
of the insights.