Alexandria University

Faculty of commerce-Information Systems and Computers Department Sheet (1)

Decision Support Systems

Chapter 1
Data Analytics & Intelligence

 Companies are moving aggressively to computerized support of their operations.

Business Pressures–Responses–Support Model
• Business Pressures is a result of today's competitive business climate.
• Responses to counter the pressures.
• Support to facilitate the process better.

Business Environment Factors (Pressures)

FACTOR DESCRIPTION
Market - Strong competition
- Expanding global markets
- Blooming electronic markets on the Internet
- Innovative marketing methods
- Opportunities for outsourcing with IT support
- Need for real-time, on-demand transactions
Consumer - Desire for customization
demand - Desire for quality, diversity of products, and speed of delivery
- Customers getting more powerful and less loyal
Technology - More innovations, new products, and new services
- Increasing obsolescence rate
- Increasing information overload

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Alexandria University
Faculty of commerce-Information Systems and Computers Department Sheet (1)
Decision Support Systems

- Social networking, Web 2.0, and beyond

Societal - Growing government regulations and deregulation
- The workforce is more diversified, older, and composed of more
women.
- Necessity of Sarbanes-Oxley Act (United States federal law that
mandates certain practices in financial record keeping and reporting
for corporations) and other reporting-related legislation
- Increasing social responsibility of companies
- Greater emphasis on sustainability

Organizational Responses
- Being Reactive, Anticipative, Adaptive, and Proactive
Approach Key Focus When Action is Nature of Example
Taken Action
Reactive Responding to After the event Response- Fixing a
events after driven, short- problem after it
they occur term arises (e.g.,
crisis
management).
Anticipative Before the event Prediction- Investing in
(based on based, planning disaster
Preparing for
predictions) for expected recovery
expected future
changes solutions before
events
a storm based
on forecasts.
Adaptive Adjusting to During or after the Flexible, real- Altering product
changes and change time adjustment design based on
learning from based on customer
experience feedback feedback or
market changes.
Taking Before the event Launching
Initiative-
initiative and preventive
driven, long-
preventing maintenance
Proactive term planning
future problems programs to
to shape
avoid equipment
outcomes
failures.

- Managers may take actions, such as

o Employ strategic planning.
o Use new and innovative business models.
o Restructure business processes.

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 Alexandria University
Faculty of commerce-Information Systems and Computers Department Sheet (1)
Decision Support Systems

o Participate in business alliances.

o Improve corporate information systems.
o Improve customer service and relationships
o Move to electronic commerce (e-commerce)
o Move to make-to-order production and on-demand manufacturing and services
o Use new IT to improve communication, data access (discovery of information),
and collaboration
o Respond quickly to competitors' actions (e.g., in pricing, promotions, new
products and services)
o Automate certain decision processes
o Improve decision-making by employing analytics

 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 through which organizational
goals are achieved using resources.
 Decision-making is selecting the best solution from two or more alternatives.

Decision-Making Process
Managers usually make decisions by following a four-step process:
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.

Computerized DSS can facilitate decision via:

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Alexandria University
Faculty of commerce-Information Systems and Computers Department Sheet (1)
Decision Support Systems

- Speedy computations
- Improved communication and collaboration
- Increased productivity of group members
- Improved data management
- Overcoming cognitive limits
- Quality support; agility support
- Using Web; anywhere, anytime support

A Decision Support Framework:

• Degree of Structuredness:
- Decisions are classified as
o Highly structured (a.k.a. programmed)(automated decision making)
o Semi-structured
o Highly unstructured (i.e., non-programmed)
• Types of Control
- Strategic planning (top-level, long-range)
- Management control (tactical planning)
- Operational control

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Alexandria University
Faculty of commerce-Information Systems and Computers Department Sheet (1)
Decision Support Systems

 DSS- interactive computer-based systems, which help decision-makers utilize data and
models to solve unstructured problems
 Decision support systems couple the intellectual resources of individuals with the
computer's capabilities to improve the quality of decisions.
 DS as an Umbrella Term
 Evolution of DS into Business Intelligence

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Alexandria University
Faculty of commerce-Information Systems and Computers Department Sheet (1)
Decision Support Systems

Questions
1) MCQ
1. Which of the following is an organizational response to a business environmental
factor?
A) customer demand
B) government regulations
C) new business models
D) globalization
2. One of the major objectives of ________ 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.
A) business alliances
B) customer relationships
C) business models
D) computerized decision support
3. Management is a process by which organizational goals are achieved by using
resources. The resources are considered ________, and the attainment of goals is
viewed as the ________ of the process.
A) expenses; profits
B) inputs; output
C) pressures; opportunities
D) scarce; success
4. Mintzberg's (1980) classic study of top managers suggests that managers perform ten
major roles that can be classified into three major categories. Each of the following is
one of those major categories except
A) relational
B) interpersonal
C) decisional
D) Informational
5. Today's computerized systems possess capabilities that can facilitate decision support
in a number of ways, including each of the following except:
A) Increased productivity of group members
B) Improved communication and collaboration
C) Agility support
D) Reduced environmental pressures
6. Numerous types of business ________ result from today's business climate.
A) decisions

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 Alexandria University
Faculty of commerce-Information Systems and Computers Department Sheet (1)
Decision Support Systems

B) responses
C) support
D) pressures
7. According to Mintzberg's ten managerial roles, a ________ is responsible for the
motivation and activation of subordinates.
A) leader
B) figurehead
C) liason
D) spokesperson

2) T/F
1. The first phase in the decision-making process is design which involves inventing,
developing, and analyzing possible alternative courses of action or solutions.
2. One of the major objectives of computerized decision support is to minimize the gap
between the current performance of an organization and its desired performance.
3. Computerized systems enable people to overcome their cognitive limits by quickly
accessing and processing vast amounts of stored information.
4. Accounts receivable and accounts payable processes are highly structured, which makes
them easy to program.
5. Research and development (R & D) planning and social responsibility planning are
unstructured decisions, which cannot be supported by computerized decision support
systems.
6. When faced with a turbulent business environment, organizations are best able to survive
or even excel by minimizing changes until the environment stabilizes.
7. Automated decision systems (ADS) are rule-based systems that provide solutions to
repetitive managerial problems, usually in one functional area (e.g., finance, manufacturing)
8. Government regulations, political instability, competition, and changing consumer
demands cause uncertainty that makes it difficult to predict the consequences of a decision.

Answer
1. C
2. D
3. B
4. A
5. D
6. D

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Alexandria University
Faculty of commerce-Information Systems and Computers Department Sheet (1)
Decision Support Systems

7. A
1. FALSE
2. TRUE
3. TRUE
4. TRUE
5. FALSE
6. FALSE
7. TRUE
8. TRUE