Decision Support Systems

Contents -
  • Introduction, Definition of Decision Support Systems.
  • Components of Decision Support Systems.
  • Functions / Activities of Decision Support Systems.
  • Characteristics of Decision Support Systems.
  • Advantages and Disadvantages of Decision Support Systems.

What is Decision Support Systems ?

Decision support system (DSS) is a specific class of MIS system that helps the manager at all stages of decision-making like problem identification, selection of relevant data, picking up the right approach and examining alternatives.
Decision support system is a mixture of computer applications and human component which can go through large amount of data and come up with solutions. Many companies have adopted DSS as a part of their daily operations activities instant of considering it is as a specialized part of business.

Many companies are constantly download and analysis data, budget sheet and forecasts to constantly update their strategy. This decision support system is static in business but it's result are dynamic or constantly changing.
A system which supports the process of decision making is known as decision support system (DSS). This helps in supporting only and not automating the process of decision making.

With the help of decision support system, decision maker can retrieve the information and find the alternate solutions in the process of problem solving.
DSS aids in quality decision based on model data. Correct decision making in business is usually dependent on quality and analysis of data and is used to find trends, which helps in creating solutions and strategies.

Example of DSS :
  1. Logistic System 
  2. Financial Planning System
  3. Group Decision Support System (GDSS)
  4. Computer Supported Co-operative Work (CSCW)

Definition of Decision Support Systems

According to Scott Morton :
"Decision support system (DSS) is interactive computer based system, which helped decision-makers utilize data and models to solve unstructured problems".

Components of Decision Support Systems

The components of decision support system are as follows :

1. Data Management Sub-System -
Data management sub-system comprises of a database that contains appropriate data related to the situation and is managed by the database management system (DBMS) software. The data management sub-system can be connected to this corporate data warehouse. A corporate data warehouse refers to the library of corporate relevant decision-making data. The data is stored and accessed by database web server. The element of data management sub-system are as follows :
i) Database management system
ii) Query facility
iii) DSS database
iv) Data directory

2. User Interface Sub-System -
The intensive interaction between the computer and decision maker has led to unique contribution of DSS. This sub-system helps the user to communicate with the DSS. A user friendly reliable graphical user interface structure is offered by the web browser for most of the DSS.

3. Model Management Sub-System -
Model management sub-system includes modelling languages that are used for building custom models. It can be related to corporate or external storage of models. Model base management system refers to a software package that includes statistical, financial, management science or other quantitative models that offer the analytical capabilities of system and suitable software management. It can be related to corporate or external storage models. MBMS solution is implemented and run on application servers.
Model management sub-system comprises of the following elements :
i) Model directory
ii) Model base
iii) Model base management system
iv) Modelling language
v) Model execution, integration and command processor

4. Knowledge Based Management Sub-System -
This sub-system easily integrates with the other DSS components. Knowledge based management sub-system can act as a independent component or can provide support to any other sub-system. It enhances the decision-makers intelligence. The knowledge is provided via web browsers. It can be inter-related with the organisation knowledge base which is a part of the knowledge management system.

Functions / Activities of Decision Support Systems

1. Model Building -
DSS aids in the decision-making process by identifying the most appropriate model for solving problems. It considers the input variables, inter relationship among the variables, problem assumption and constraints to design a suitable model.
For example : A television manufacturing company has given the responsibility to its marketing manager to develop a sales forecasting model is for colour TV sets.

2. Risk Analysis -
DSS especially helpful while taking medium or high risks decision. Decision can be low, medium or high risks. DSS helps in assessment of risks of various alternatives by managers in a business enterprise which helps in making decisions.

3. Goal Oriented -
This activity refers to the procedure of determining the value of input that is required to succeed a particular goal.
For example : While deciding to buy a house, a person first calculate the equated monthly installments that she or he can afford and for how long.

4. Graphical Analysis -
It provides large volume of data in graphical format to visualise it easily and quickly. Managers can also view the impact of various courses of action. The use of graph is recommended when :
i) Forecasting
ii) Detecting Trends over time 
iii) A quick summary of data is required 
iv) Composing points and patterns at different variables

5. What-if Analysis -
If this activity, an end user will make changes to variables or relationship among them to notice the resulting changes in other variables.
For example : If advertising cost is cut by 10% what would be the corresponding impact on sales ?

Characteristics of Decision Support Systems

1. Performs Complex, Sophisticated Analysis and Comparisons Using Advanced Software Packages -
There are several programs (part of DSS) used by various methods that analyse the raw data.
For example : A market research survey can be analysed by different standalone analytical programs associated with DSS. It is DSS which then integrates these programs to come up with comparative studies.

2. Provides Report and Presentation Flexibility -
This information gathered with the help of DSS may be displayed on the computer screen or can be printed according to the need of the decision makers. Managers get access to different kinds of reports in formats that fit to their requirement.

3. Provides Rapid Access to Information -
Continuous and Rapid access of information is offered by DSS.
For example : The metres on the dashboard of a vehicle are used to keep a watch on how the vehicle is running.

4. Supports Drill-Down Analysis -
DSS helps the manager in going through details of the project by drilling down through data.
For example : When reviewing the total project cost, the manager can easily break it down to estimate the cost for each phase, activity or task.

5. Handles Large Amounts of Data from Different Sources -
DSS has the ability to accumulated data from different databases which are stored on different computer systems or networks. It can also source data from the internet.

6. Offers both Textual and Graphical Orientation -
DSS can produce information in a wide variety of text and graphics such as plain texts, tables, Pie Charts, Trends Lines, line drawings etc. All of these provide a better understanding of a situation to managers and help them to communicate the same to others.

Advantages of Decision Support Systems 

1. Facilitating Communication -
DSS helps in indicating when a particular action should be adopted in future or why a particular action was acceptable in the past. The DSS facilitates interpersonal communication and hence it is used as a tool for benefit of business.

2. Increasing Organisational Control -
DSS control this information, which is in turn used by the managers in assessing the productivity of an individual in the quantity and quality of their decision making ability. Some DSS can evaluate the individual's decision making skills.

3. Improving Personal Efficiency -
DSS aids in improving personal efficiency. Although it does not do any work in actual but it aids in doing any work a bit faster and with greater efficiency.
For example : Budgets where earlier prepared manually before spread sheets software was discovered but DSS helps to make work faster with less changes of error.

4. Promoting Learning or Training -
DSS helps people to learn more about computer and software packages that are present in it. Although, this was never the motive of DSS but it promotes learning as well.

5. Improving Problem Solving -
DSS helps a personal or a group of people in solving problem at a much faster pace with accuracy. When probably applied, it increases the efficiency of a task. It aids in solving the problem as a whole.

Disadvantages of Decision Support Systems

1. Limited Storage Capability -
DSS has computation limitations because of its small memory and limited storage capacities.

2. Difficult -
It is difficult to understand inter-dependency of functions within the system. Monitoring of consequences of DSS function usage in relation to decision scenerio and integrity of database is complex.

3. Slow -
The speed of DSS is much slower than large mainframes.

4. Limited Information Sharing -
Decision support system's are mostly designed for individual use but when they are designed for multiple accesses by several computers, DSS provides only limited sharing of it's information.

5. Translation Problems -
The translation problems can occur at the time when users interact with DSS databases because these databases in turn are made up to different data models, which may face translation problems while interfacing with one another.

6. Confliction -
As users have to constantly work on several decision scenarios at the same time, they have to simultaneously monitor the decisions taken.

7. Require Extensive Knowledge -
There are applications which need extensive technical knowledge.