1

CC6052 Management Support Systems

Week 8 Decision Support Systems

Last week
A brief outline of different types of MSS:
o Management Information Systems (MIS)
information reporting systems, databases

o Decision Support Systems (DSS)

DSS and Group DSS

o Executive Information Systems (EIS) o Business Intelligence (BI) o Expert Systems (ES)

This week
Decision support Systems (DSS)
o Definition (refined) o Emphases associated with MIS and DSS o Purpose, objectives (what support do DSS provide?) o Classifications o Structure (components) o Users (managers and staff specialists) o Development (including end-user development) o Benefits (and limitations)
3

Decision Support Systems (DSS)

Decision Support Systems

Computer-based IS that provide managers with information and tools to support semi-structured and unstructured decision-making

Decision Support Systems (DSS)

Decision Support Systems

o support decision making in all its phases o use data (similar to MIS), with significant analysis capabilities (e.g. using modelling techniques) o link intellectual resources of people with computing capabilities to improve decision quality o can support the process by helping to identify a range of valid solutions to a given problem

Decision Support Systems (DSS)

Decision support system o enhances decision-making in conditions of uncertainty

o evolves, structures and evaluates relationships and/or options

o systems take information as input, reconcile and combine inputs to form intelligence
6

Definition (refined)

Decision Support Systems (DSS)

o interactive o flexible o adaptable CBIS

specially developed for supporting the solution of a non-structured management problem for improved decision making
o uses data o easy user interface o incorporate the decision maker's own insights
7

Definition (refined)
Decision Support Systems

In addition, a DSS
o may use models o is built by an interactive process (often by end-users) o supports all phases of decision making

o may include a knowledge component

Turban (2001)
8

MIS versus DSS (1)

Created by Focus Time Scale Output Management Information Systems IT specialist/Business Analysts i) ii) internal control/budgeting efficiency Decision Support Systems Users/Business Analysts i) ii) planning effectiveness

Past and present i) ii) standard reports answer, information

Present and future i) user created, iterative and interactive reports ii) insight, learning, intelligence Discretionary Short
9

Usage Duration of use

Largely mandatory Long

Edwards & Finlay (1997)

MIS versus DSS (2)

Context Development Objectives Design perspective Situation Design methodology Management Information Systems Context independent On structured information flows and data structures Pre-specified Organisational Within fixed policies Classical systems approach and prototyping inputs and outputs Decision Support Systems Context dependent On flexibility, adaptability and quick response Ad hoc, contingent Individual/small group Within given scenarios Flexible trial and error
10

Edwards & Finlay (1997)

MIS versus DSS (3)

Management information systems (MIS)
o provide information to managers

Decision support systems (DSS)

o provide support to managers faced with semi-structured issues o provide help in information interpretation
Edwards & Finlay (1997)

11

Purpose, objectives (1)

DSS provide support to:
o decision makers in non-structured situations by bringing together
human judgement computerised information and analysis

o various managerial levels

strategic executives tactical management operational line managers (Turban, 2001)
12

Purpose, objectives (2)

DSS provide support to:
o individuals as well as groups
less structured problems may require several individuals from different departments and organisational levels

o several interdependent and/or sequential decisions o all phases of the decision-making process
(Turban, 2001)
13

Purpose, objectives (3)

Major characteristics of DSS support
o Main impact is on decisions in which there is sufficient structure for computer/analytic aids to be of value but where a managers judgement is essential
o Extends the range/capability of managers decision processes to improve effectiveness (accuracy, timeliness, quality) of decision making i.e. rather than efficiency (cost) of making decisions
(Turban, 2001)
14

Purpose, objectives (4)

Major

characteristics of DSS support

o Aim of DSS is to support not replace the decision-maker

o i.e. not to attempt to automate the decision process, predefine objectives or impose solutions
(Turban, 2001)

15

Examples of DSS
Organisation United Airlines DSS Application Flight scheduling and passenger demand forecasting

General Accident Customer buying patterns and fraud detection Insurance Bank of America Customer profiles Burlington Coat Factory KeyCorp Store location and inventory mix Targeting direct mail marketing customers

National Gypsum Corporate planning and forecasting Southern Railway Train despatching and routing
16

Laudon & Laudon (2004)

Example DSS
Choosing catalysts for a chemical process
Needs specialist knowledge to make final decision

17

Example DSS
Choosing catalysts for a chemical process
Choose upper catalyst from menu

18

Example DSS
Choosing catalysts for a chemical process
Choose middle catalyst from menu

19

Example DSS
Choosing catalysts for a chemical process
Choose lower catalyst from menu

20

Example DSS
Choosing catalysts for a chemical process
Different combinations will give different results

Run simulation

21

Example DSS
Choosing catalysts: results graph profile one

22

Example DSS
Choosing catalysts: results graph profile two

23

Example DSS
Choosing catalysts: results graph profile three

24

DSS classifications (1)

Model-driven DSS
o stand-alone system that uses some type of model to perform what-if? and other kinds of analyses

Data-driven DSS
o supports decision making by allowing users to extract and analyse useful information that was previously buried in large databases Laudon & Laudon (2004)

25

DSS classifications (2)

Holsapple & Whinston (1996) frameworks:
o o o o o o text-oriented database-oriented spreadsheet-oriented solver-oriented rule-oriented compound
(Turban, 2001 - chapter 3)
26

Other classifications
o Intelligent DSS o Institutional vs. ad hoc o Personal vs. group vs. organisational o Custom-made vs. ready-made
(Turban, 2001 - chapter 3)

Examples:
o Turban (2001) o Laudon & Laudon (2004), etc.

27

DSS Components
User

User Interface Subsystem

Data Management Subsystem

Model Management Subsystem

28

Turban (2001)

DSS components

Decision Support Systems consist of

o Data management sub-system
DSS Database; Database Management System (DBMS); Data directory; Query facility

o Model management subsystem

Model Base; Model Base Management System; Modelling Language; Model Directory; Model execution, integration and command processor

o User interface subsystem

User interface management system (UIMS); the user

and may contain

o Knowledge management subsystem
29

Data management sub-system (1)

DSS database
Contains data relating to all functions of the organisation: internal data from o finance o HR o marketing o production, etc. external data imported from various sources o competitors o exchange rates personal data o based on past cases

30

Data management sub-system (2)

Database management system (DBMS)

Usually a commercially available DBMS used for the creation and upkeep of the database

31

Data management sub-system (3)

Data directory
A directory of all the data kept in the database, together with a clear statement concerning the nature of the data

32

Data management sub-system (4)

Query facility
A means of accessing the database, via a query language, e.g. SQL (structured query language)

33

Data sources

Compare with:
o TPS databases, data marts, data warehouses, etc.

Example: Data collected for a decision about hospital expansion Internal

o Historical demand, projected demand, patient profiles, length of stay in hospital, employee profiles, financial information, etc.

External
o Competition, community growth pattern, availability of doctors, national trends of hospital occupancy, reimbursement rules, etc.

Personal
o Decision guidelines, assessments of specific data/situations, etc.
34

Model management sub-system (1)

Model Base

Contains routine and special quantitative models (statistical, financial etc.) to provide analytical capabilities, including model building blocks e.g. random number generators, regression analysis packages

35

Model management sub-system (2)

Model base management system (MBMS) High-level languages used to customise the DSS

36

Model management sub-system (3)

Modelling Language

Software designed to create models,

generate reports and edit the model base

37

Model management sub-system (4)

Model directory

Analogous to the database directory

Describes the models available

38

Model management sub-system (5)

Model execution, integration & command processor

39

Models

Spreadsheets: modelling often based on spreadsheets using

included functions or add-ins e.g. goal seek, solver simple programming, e.g. via standard functions and macros

Mathematical models: more complex modelling based on decision variables, parameters, algorithms, data, etc.
optimisation - e.g. linear programming statistical analysis - e.g. regression analysis

Data analysis: using OLAP Can be achieved in Excel with MS-Query (to retrieve data) and Pivot Tables

40

User interface sub-system

User Interface Management System (UIMS)

Software that manages the user interface providing:

GUI, colour, 3D graphs, etc., windows for multiple functions

storage of input & output data, interaction with input & output devices help capabilities, prompting, diagnostics, training by example, etc. flexibility and adaptability

Hardware
Input and output devices

The User
Managers and staff specialists...
41

Knowledge management sub-system

Some DSS contain intelligent / knowledge management component

Many non-structured problems are so complex that they require expertise for their solution as well as regular DSS capabilities Expertise is provided by an expert system or other intelligent system (e.g. artificial neural network)

Covered in later lectures...

42

DSS Users
Managers
Require user-friendly systems

Staff specialists
More detail-oriented, interested in computational capabilities, willing to use more complex systems o e.g. financial analysts, production planners, marketing researchers Outnumber managers 3 to 1; can be classified: o Staff assistant o Expert tool user o Business (system) analyst o Facilitator in Group DSS
43

DSS Development
Turban (2001) considers:
o traditional systems development e.g.
Planning Analysis Design Implementation

o other systems development approaches e.g.

RAD, prototyping, etc.

o end-user development
e.g. using MS-Excel end-users should be able to build and modify simple systems larger systems need specialist IS skills
44

Benefits (1)

DSS augment decision-makers innate knowledge handling abilities Decision-maker can use DSS to solve problems that would not be attempted alone or would consume too much time due to their complexity

45

Benefits (2)
For relatively simple problems, DSS may be able to reach solutions faster and/or more reliably Provide evidence to justify decision-makers position (e.g. to assist in securing agreement) Competitive advantage to organisation due to enhanced internal productivity
46

Benefits (3)

DSS

might be unable to solve a problem, but could stimulate thoughts about the problem e.g.
o exploratory retrieval o analysis o advice o solving a similar problem may trigger insight about present problem
(Holsapple & Whinston, 2000)
47

Benefits (4)
Activity of constructing DSS may reveal
new ways of thinking about decision domain formalize aspects of decision making
(Holsapple & Whinston, 2000)

48

Limitations

Unable to replicate / improve on some human skills/talents May be too specific

(how to co-ordinate many DSSs working on a single decision?)

May not match users mode of expression or perception Cannot overcome a faulty decision-maker
o

makes a poor selection from choices available cannot make decision without the system (Holsapple & Whinston, 2000)
49

Danger of over-dependence
o

References, further reading

Edwards, J.S. & Finlay, P.N. (1997), Decision Making with Computers: The Spreadsheet and Beyond, FT Prentice Hall

Holsapple, C. & Whinston, A., 2000, Decision Support Systems, Thomson Learning
Laudon, K. & Laudon, J., 2004, Management Information Systems, 8th ed., Pearson Prentice Hall

DSS: pages 349 - 359

Turban E. & Aronson J.E., 2001, Decision Support Systems and Intelligent Systems (6th edition), Prentice Hall Business Publishing DSS - an overview: chapter 3, pages 94 - 127

50