BIS4225.

9
Decision Support
Systems

1
 Reading Materials
Laudon & Laudon (2002)
Chap 1, 2, 13.
Sauter (1997) Chap 1, 2, 3,
10, 12.

2
 What is a DSS?
An interactive computer-
based system which helps
decision makers utilise
data and models to solve
unstructured problems.

3
 What is a DSS?
Structured Unstructured
problems problems
Routine Non-routine
Repetitive Novel
Decision rules No decision
rules
Note that some decisions are
semi-structured.
4
 What is a DSS?
ORGANIZATIONAL LEVEL
TYPE OF DECISION Operational Knowledge Management Strategic

Structured

Semi-structured

Unstructured

L&L(2002, 82) 5
 What is a DSS?
(Based on past experiences
and assumptions)
Repetitive Specialized
Linear Logic Heuristics
Regular Reports Systems Makes Decisions
No Support of Decisions No Regular Reports

MIS/TPS DSS EIS ES

S (1997, 13) 6
 What is a DSS?
It uses internal information
from TPS and MIS,

but it often brings in

external information.

L&L (2002, 43) 7

 What is a DSS?
A DSS is more likely to be
used by middle and senior
management.
Examples of Commercially-
available DSS:
Analytica 2.0 (from Lumina)
Investment Technology Solutions (from Vestek)
QPR Management Software (from QPRSoftware)

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 Origins of DSS
Systems that were
efficient in handling
structured problems were
not able to handle
unstructured problems.

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 Requirements of a DSS
Managers handle several tasks at any
moment, so they need to switch
between them.
A DSS needs:
Rapid response (incl support)
Highly intuitive HCI (with little
technical assistance)
Sophisticated data analysis and
modelling tools.
10
 Types of DSS
Two Basic Types:
Model-Driven DSS: Primarily
standalone (not under IS
control).
Data-Driven DSS: Analyzes
large pool of data from TPS;
Can use OLAP and data mining.
L&L (2002, 406) Online Analytical Processing 11
 Components of a DSS
Database Management
System (DBMS)
Modelbase Management
System (MBMS)
User Interface
Mail Management System
12
 Components of a DSS
Database: collection of current or
historical data from several
applications or groups.
Model: Abstract representation
that ilustrates components or
relationships of a phenomenon
(e.g. statistical models, sensitivity
models for what-if analysis)
L&L (2002, 407) 13
 Components of a DSS
Database Management System
(DBMS): Gets or merges data in
a form that is appropriate for
analyses.
Modelbase Management System
(MBMS): Gets or links models
for analyses.
S (1997, 15-6) 14
Components of a DSS
USER
INTERFACE

DBMS MBMS MMS

Corporate
Models E-Mail
Database

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Managerial Decision-Making
Three Schools of Management
Technical-Rational School
Behavioural School
Cognitive School

All three agree that Decision-

Making is one of the most
challenging roles of a manager.

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Managerial Decision-Making
Problem Definition

Identification of Alternatives
Evaluation of Alternatives

Choice

Evaluation of Choice

L&L(2002, 83) 17
 Rationality
Rational decisions means
decisions based on, or
derived from reasoning.
It requires the ability to
reason logically.

S (1997, 23) 18
 Rationality
A solution to an unstructured
problem needs to be checked for:
Economic Rationality: economic
considerations (minimizing costs,
maximizing profits and returns).
Technical Rationality: if the options will
not work, they should not be
considered.
Legal Rationality: actions are within the
bounds of legality.
S (1997, 23-7) 19
 Rationality
(Continued)
Social Rationality: ethical nature of the
choice from the perspective of the
society.
Procedural Rationality: procedures that
are feasible for implementation.
Political Rationality: awareness of the
relationships between individuals,
departments, and organizations.

S (1997, 23-7) 20
 Example of Uses of DSS
DSS for
Supply Chain Management
Customer Relationship
Management
Simulating Business
Scenarios
L&L (2002, 410-3) 21
 Data and Information
Data are facts found through
observation of the world around
us.
The human brain is an excellent
filter for relevant data.
Information are facts relevant to
the situation facing the decision-
maker.

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 Data and Information
Three strategies for DSS
(Sauter):
Normative Approach:
Subjective Approach:
Realistic Approach:

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 Data and Information
Characteristics of Information:
Timeliness: update and made
available
Sufficiency: whether it is adequate
to support decision-making
Level of Detail
Understandability

S (1997, 52-9) 24
 Data and Information
Characteristics of Information:
Freedom from Bias
Relevance: defined as a function of
choices and alternatives available
to decision-makers.
Comparability: whether it can be
compared to other relevant
information.
S (1997, 52-9) 25
 Data and Information
Characteristics of Information:
Reliability: accurate
Redundancy: repeated elsewhere
for rebuilding purposes
Cost Efficiency
Quantifiability
Appropriateness of Format

S (1997, 52-9) 26
 Data and Information
Characteristics of Information
(Sauter):
Timeliness
Sufficiency
Level of Detail
Understandability
Freedom from
Bias
Relevance
S (1997, 53) 27
 Implementation of a DSS
Involves:
interpreting designs into
executable code
ensuring access to
databases
creating and populating
model bases
28
 Implementation of a DSS
There is no universally
appropriate development
process.

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 Implementation of a DSS
Ensure that the system does
what it is supposed to do, the
way it is supposed to do it.
Interviewing and User
Involvement.
Prototypes.
Keep the solution simple.
S (1997, 332-9) 30
 DSS Evaluation
Technical Appropriateness: If the
technical requirements of decision-
makers are not met, the system will
not be used.
Organizational Appropriateness: It
must be a component of the entire
system and support the decision
styles of the users over time.
S (1997, 346-53) 31
 Group Decision-Making
Drawbacks:
Takes longer time than
individual decisions
Group dynamics
Groupthink

S (1997, 359) 32
 Group Decision-Making
Early DSS focussed on
individual decision-making.
However, much work today
is carried out in groups.
Group Decision Support
Systems (GSS)
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 Group Decision-Making
Examples:
Groupware
Web-based tools (video
conferening, electronic
meetings)

L&L (2002, 415) 34

 Group Decision-Making
Examples of GDDS
Software Tools:
Electronic Questionnaires
Electronic Brainstorming
Idea Organizers
Tools for Voting or Setting
Priorities
L&L (2002, 417) 35
 Group Decision-Making

L&L (2002, 416) 36

Executive Support Systems
(Executive Information
Systems (EIS))
To monitor events and trends.
DSS without the Modelbase.
Provides Summary data and
lower levels of detail.

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Executive Support Systems
They draw summarized
information from MIS and DSS.
They are not designed primarily
to solve specific problems.
They make use of less analytical
problems.

L&L (2002, 45) 38

Executive Support Systems

L&L (2002, 46) 39