Chapter No.

3
Decision Support Systems

Prepared by
Dr. Shriprakash Soni

Contents of the Chapter

3.1 Decision Support Systems
3.2 Data Warehousing
3.3 Data Mining
3.4 Business Intelligence and Analytics
3.5 Group Decision Support Systems
3.6 Executive Information Systems
3.7 Executive Support Systems
3.8 Geographical Information Systems
3.9 Knowledge Based Expert Systems/ Expert Systems
3.10 Artificial Intelligence

Decision Support Systems

A) Meaning :
Decision Support System is a computer based information
system that supports organizations decision making activities.
B) Definitions :
1) Little :
DSS is a Model-based set of procedures for processing data
and judgments to assist a manager in his decision making.
2) Scott Morton :
DSS are interactive computer-based systems, which help
decision makers utilize data and models to solve unstructured
problems.
3) Mann and Watson :
DSS is an interactive system that provides the user with easy
access to decision models and data in order to support semistructured and unstructured decision making tasks.

Decision Support Systems

Decision support systems have three basic components:
1) Data Management:
It basically interprets the command given by users and also searches
relevant information and saves it in selected model. This component
performs the function of storing and maintaining the information that
company wants in Decision Support System to use. The information
manager use in Decision Support System comes from one or more of
three sources:
a) Organizational Information
b) External Information
c) Personal Information
2) Model Management Component:
In this stage the basic DSS task to select a model. Model is nothing but
the database structure or types in which the output is basically required.
3) Dialogue Management Component:
Dialogue management is the stage where the user language is basically
converted into machine language and vice versa.

Decision Support Systems

Advantages:
Supporting the decision.
Future forecast of the effects of the decision.
Graphical analysis of the decision.
Data analysis
No decision manipulation
Disadvantage:
It only supports the decision, but doesnt take any
decision by itself for management.

Data Warehousing
Meaning:
A data warehousing is a process of storing data in
a data warehouse.
Data warehousing arises in an organizations need
for reliable, consolidated unique and integrated
reporting and analysis of data at different levels
of aggregation.
It is a system used for reporting and data analysis.
Data warehouses are central repositories of
integrated data from one or more disparate
sources.

Data Warehousing
Definitions:
1) W. H. Inmon:
A database warehouse is a subject-oriented,
integrated, time-varying and non-volatile collection
of data in support of managements decision making
process.
2) Ralph Kimpball:
A database warehouse is a copy of transaction data
specifically structured for query and analysis.

Data Warehousing
Examples:
Transaction record is maintained for the future
references.
Employees data recorded.
Bank has more than 10 years of customer data.
An MNC saves data for 10 or more years for
future references.

Characteristics of Data Warehousing

1)

2)
3)
4)
5)
6)

Subject Oriented: Information is presented according

to specific subjects or areas of interest, not simply as
computer files.
Integrated: Data warehousing is a single source of
information for understanding multiple areas of interest.
Non- volatile: Stable information that doesnt change
each time when an operational process is executed.
Time Variant: The data warehousing contains history as
well as current information.
Accessible: The primary purpose of a data warehouse is
to provide readily accessible information to end-users.
Process-Oriented: It is important to view data
warehousing as a process for delivery of information.

Components of Data Warehouse

1)
2)
3)

Central Data Depository: is the place where all

data have been stored initially.
Data Mart: Data is bifurcated as per the different
criteria and uses.
Metadata: is data about data.

Merits of Data Warehousing

It collects data from multiple sources into a single

database.
It avails appropriate and required data to the end-users.
It saves time by providing faster data as input.
It provides relevant data to the end-user for decisionmaking.
It provides correct, accurate and relevant data which
enhances data quality and consistency.
It avoids uncertainties.
It increases productivity of corporate decision-makers.
More cost-effective and provides historical intelligence.

Demerits of Data Warehousing

It needs huge storage capacity.

Threat of theft of data from data warehouse.
Chances of wrong data feeding.
Required data not captured.
Maintaining and updating the data house is a
tedious job.
Extra reporting work.
Long implementation time.
High maintenance cost.
Lack of flexibility.
There is no backup system.

Data Mining
Data mining process is the process to extract
information from a huge database and
transform it into understandable structure for
further use.
It allows users to analyse data from different
dimensions or angles, categorize it, and
summarize the relationships identified.
In short, it is the process of analyzing data from
different perspectives and summarizing it into
useful information. It is the process of
examining large databases in order to generate
new information.

Data Mining Examples

Share market is based on the trend of
companies.
Weather report is an example of data
mining.
Sites that do the evaluation of performance
of players.
A shopping site identifies shopping trends
of people.

Data Mining

Merits & Demerits of Data Mining

Merits:
Help in decision making.
Improve company revenue and lower costs.
Market analysis.
Demerits:
High cost at implementation stage.
Possible misuse of information i.e privacy issues.
Security issues.
Possible in accuracy of data.

Difference between Data Warehousing & Data

Mining
Data Warehouse

Data Mining

Extracting data from different

sources.

Examine or explore the data using

queries.

Process of centralizing data

from multiple sources into
single repository.

Data Mining is process of

extracting data from different
databases.

Cleaning the data and storing it Queries can be fired on the data
in the warehouse.
warehouse.
Method for comparing large
Normally used for models and
amounts of data for the purpose forecasting.
of finding patterns.
E.g. Cloud, ERP system.

E. g. Web crawler, Search Engine.

A web crawler (also known as a web spider or web robot) is a program or

automated script which browses the World Wide Web in a methodical, automated
manner. This process is called Web crawling or spidering.

Data Warehousing & Data Mining

Conclusion:
Data Warehouse is used to store data at central
location whereas Data Mining is the process
from which user can get the required data.

Business Intelligence
Meaning:
The
term Business Intelligence was
originally coined by Richard Millar Devens.
Business Intelligence (BI) is the set of theories,
methodologies,
processes,
architecture,
techniques and tools that converts raw data into
meaningful and useful information for business
analysis purposes.

Business Intelligence
Definitions:
Business Intelligence (BI) refers to skills,
processes, technologies, applications and
practices used to support decision making.
Business Intelligence is a broad category of
applications and technologies for gathering,
storing, analysing, and providing access to data
to help clients make better business decisions.

Business Intelligence
Uses:
1. Helps in evaluating business operations and
reporting.
2. Guide for business planning and
forecasting.
3. Helps in predictive analysis.
4. To find correlation.
5. Focuses upon developing new insights and
understanding of business performance.

Business Intelligence
Merits:
1. Authorize employees
2. Unite people to access data successfully
3. Simplify teamwork
4. Examine and increase insight
Demerits:
1. Cost
2. Complexity
3. Limited use
4. Time consuming implementation

Technologies involved in B.I.

1) DBS Database System
2) DBI Data Base Integration (An integration
database is a database which acts as the data
store for multiple applications, and thus
integrates data across these applications)
3) DW Data Warehouse
4) DM Data Mining
5) ERP Enterprise Resource Planning
6) DSS Decision Support System

B.I. Applications
1)
2)
3)
4)
5)
6)
7)

Product Life Cycle / Product Profitability

Sales Analysis
Supply Chain Management/Logistics Analysis
Performance Analysis
Market Research/Analysis/Segmentation
Enterprise Reporting
Productivity/Efficiency Analysis

Business Analytics
Meaning:
Business Analytics builds on business intelligence
solutions and involves analyzing and interpreting
organizational data with advanced methods to
improve decision making and optimize business
processes.
Definition:
Business Analytics refers to the skills, technologies,
applications and practices for continuous exploration
and investigation of past business performance to
give insight and drive business planning.

Business Analytics
Applications:
Measurement
Analysis
Knowledge Management
Merits :
Performance Measurement
Business Planning
Faster and better decision making
Demerits :
Big Data
Time
Complexity

Examples of B.I.
1) Identify most profitable customers, clients and
offer them the right place.
2) Accurate product innovation.
3) Optimize supply chain.
4) Identify true drivers of financial performance.

Business Intelligence & Business

Analytics
Business Intelligence
Business Analytics
It answers the questions?
What happened?
When?
Who?
How many?

It answers the questions?

Why did it happen?
Will it happen again?
What will happen if we
change?
What else does the data tells
us?

Business Intelligence, at its

inception, is the way to
transform data into
meaningful information.

Business Analyticsis the broad

analysis techniques such as
statistics, economics, operations
research and computer science.

Business Intelligence is
needed to run the business.

Business Analytics are needed to

change the business.

Business Intelligence
traditionally focuses on
using a consistent set of
metrics to measure past
performance and guide
business planning.

Business Analytics goes beyond

Business Intelligence by using
sophisticated modeling techniques
to predict future events or
discover patterns which cannot be
detected otherwise.

Business Intelligence & Business

Analytics
Examples:
Online

store, there are several items

available so were shown on online store
and if the items are not there then it
shows out of stock.
Shopping malls displays all the available
items.
Companies like Mu-sigma Deloitte use
business intelligence, to link sales and
customers databases and behavior.
Bank one uses business analytics to
match customer characteristics.

Business Intelligence & Business

Analytics
Conclusion:
From this information we come to know the
concept of Business Intelligence and Business
Analytics, but not many in the industry
understand that.
Monitoring and tracking metrics in the form of
reports is BUSINESS INTELLIGENCE but making
sense of those metrics, co-relating them with
other factors that influence them, understanding
the trends and using statistical data to predict
outcomes is where needed is BUSINESS
ANALYTICS.
Hence,
BI = Gathering, Storing, Accessing, Analyzing
Data + Decision Making.

Group Decision Support Systems

A) Meaning:
It is an Interactive computer based system that helps
the team of decision makers to solve problem and
make choices these systems are targeted to
supporting groups and analyzing problem situation &
in performing group decision making task.
A GDSS is any kind of computer network that is
used to help professionals to communicate
ideas during meeting.
B) Definition:
A Group Decision Support System (GDSS) is an
interactive, computer-based system that helps a team
of decision-makers solve problems and make choices.
GDSS are targeted to supporting groups in analyzing
problem situations and in performing group decisionmaking tasks. The name is very descriptive. A GDSS

Working of GDSS

It uses special computer software.

First agenda of the meeting is made which is
projected on big screen then the participants
type simultaneously their ideas of the topic of
discussion on their individual micro comp.
The computer then sort the ideas.
Then participants vote and comment on which
ideas they like or dislike.
In the course of the meeting GDSS stores
categorizes and prints all the ideas, comments
and vote, so that each meeting participants
will get a summary of the meeting when it
ends.

Merits & Demerits of

Merits
GDSS
Group synergy
Automated record keeping
More structure
Demerits:
Slow Communication
Not all Tasks are Amenable to GDSS

Example of GDSS
Video Conferencing
A very interesting example about how GDSS
can help in communication issues due to
distance can be taken by Hewlett Packard.
HP's human-factors engineers work in
different countries and cities all over the
world and they meet only once a year.
GDSS help them have frequent ongoing
meetings, through electronic conferences,
to discuss about professional and company
issues. Final decision making is done with
the aid of GDSS.

Difference between GDSS &

GDSS focusesDSS
on group decisions
while DSS focuses on individual
decisions.
DSS relies to a knowledge base to
some degree while a GDSS does
not.
GDSS
requires
a
working
connection between users while
DSS does not.
GDSS
is applicable to every
situation while DSS is not.

Executive Information System

An Executive Information System
(EIS) is a specialized information
system used to support senior-level
decision making.
It provides easy access to internal and
external
information
relevant
to
organization goals.
It includes various hardware, software,
data, procedure and the people.
With the help of all this, the top level
executives get a great support in taking
and performing the various types of
decisions.

Executive Information System

Characteristics:
Flexibility and ease to use.
Produces the correct information.
Can be used from many places.
It has high result/performance
orientation.
Provides support to the management.

Executive Information System

Advantage
Easy for upper level
s

executives to use.
Ability to analyze
trends.
Easy access to
existing information.
Better understanding
of enterprise
operations.
Reduces time for
finding and
integrating
information.

Disadvanta
Limited functions so
ges
cant perform
complex
calculations.
Executives may
encounter
information
overload.
May lead to less
reliable or insecure
data.
Small companies
may encounter

Executive Information System

Example of maintaining an airplane.
There are numerous critical parts to an
airplane that have to be carefully inspected
after a certain number of flight hours. A DSS
could be used to assist safety inspectors in
making sure no critical parts get missed and
that any issues that come up are dealt with
appropriately.
Senior
management is not specifically
interested in the one-time inspection of a
single plane. They are interested, however, in
making sure the company has an outstanding
safety record, and they need to know that the
inspection program is working effectively. So
the safety inspection program as one unit
would be part of an EIS, but the details on

Executive Information System

Example:
Online
analysis
of
business
performance: the EIS holds and
shows the critical data describing a
business' performance, and it usually
incorporates a range of tools for
viewing and analyzing that data.
Conclusion:
EIS is the information system which
helps higher authority peoples for
taking decision for their business

Executive Support System

Executive Support System (ESS) is
a reporting tool (software) that
allows
you
to
turn
your
organization'sdatainto
useful
summarized reports.
These reports are generally used
by executive level managers for
quick access to reports coming
from all company levels and
departments such as billing, cost
accounting , staffing, scheduling,

Components of Executive
Support System

Hardware

Telecommunicat
ion

Software

User Interface

ESS

Executive Support System

Merits
Improved personal efficiency.
Automation of the managerial processes.
Improves tracking information.
Increased organizational control.
Competitive advantage over competitors.
Demerits:
System dependent.
Limited functionality, by design.
High implementation costs.
System may become slow, large, and hard
to manage.
Need good internal processes for data
management.
May lead to less reliable and less secure
data.

Executive Support System

Executive

Support Systems meet

the needs of corporate executives
by providing them with vast
amounts of Information quickly
and in graphical form to help them
make effective decisions.

ESS

must be flexible, easy to use,

and contain both internal and
external sources of information.

Geographical Information System

Meaning:
It
captures,
stores,
analyzes,
manages, and presents data that
refers to or is linked to location.
Integrates hardware, software, and
data
for
capturing,
managing,
analyzing, and displaying all forms of
geographically
referenced
information.
GIS process location data and provide

Geographical Information System

Definition:
Geographic Information System (GIS)
are a special type of DSS that use
data visualization technology to
analyze and display data for planning
and decision making in the form of
digitized maps

Geographical Information System

Merits:
The user could find the shortest
path for his destination.
User could be able to find contacts
and appointments for needful
places.
User can easily analyze and
identify the expected Location.
User can visualize information
spatially using map.

Geographical Information System

Demerits:
It requires an enormous amount of data
inputs to be practical for some tasks
and the more data that is put in, the
more likely that there will be errors.
Since it takes many maps to gather
different types of data there is often
discrepancies from one map to another.
Another limitation to GIS is that the
earth is round and geographic error is
increased as you get into a larger scale.
The system is quiet expensive,
especially the GIS software.

Geographical Information System

Examples:
Crime mappingis used by analysts inlaw enforcement
agenciesto map, visualize, and analyze crime incident
patterns.
Crime analysts use crime mapping and analysis to help law
enforcement management to make better decisions, target
resources and formulate strategies.
New York Citydoes this through theCompStatapproach.
Other Examples :
Choosing best locations for new stores.
Road networking.
Can help a housing developer determine where to invest.
Environmental scientists.
Land use planners.
Health data (birth rate, weight information etc.)
Census data.
Demographic data (such as income).

Geographical Information System

Conclusion:
User can get path from source to
destination.

User can print and save the image

of the required map.

User
can
view
different
parameters of particular area.

Artificial Intelligence

The Algorithm and development of

computer systems able to perform
tasks
normally
requiring
human
intelligence, such as visual perception,
speech recognition, decision-making,
and translation between languages.
Think & reason.
Learn & understands from the problem.
Acquire & apply knowledge.
Exhibit creativity & imagination.

Examples of
A.I.

Expert Systems. Eg. ATM

Natural Language Processing (NLP). Eg.
Human Language to Machine Language.
Speech Recognition / Understanding. Eg.
Speech Translation Software (House of
Parliament Loksabha)
Computer Vision and Scene Recognition. Eg.
Google maps.
Robotics and Sensory Systems. Eg. car
doors, dryer system in washroom
Automatic
Programming:
Intelligent
Computer-Aided
Instruction,
Neural
Computing. Eg, neurology computing.

Artificial Intelligence
Merits:
Learns from experience & apply the
knowledge acquired from experience.
Solve
problems
when
important
information is missing.
Determine what is important.
Handle critical situations.
Understand visual images.
High accuracy & efficiency.

Artificial Intelligence
Demerits:
Programming is difficult.
Still
cannot
match
human
intelligence.
No emotional understanding.
Lacks the human touch.
Can be misused leading to mass
scale destruction.

Knowledge Based Expert

Systems/ Expert Systems

An Expert System is a system that

employs
human
knowledge
captured in a computer to solve
problems that ordinarily require
human expertise.

ES imitate the experts reasoning

processes
to
solve
specific
problems.

Three Major ES
Components
User Interface

Inference
Engine

Knowledge
Base

Knowledge Base

The knowledge base contains the knowledge

necessary for understanding, formulating, and
solving problems.

Two Basic Knowledge Base Elements:

1. Facts
2. Special heuristics, or rules that direct the
use of knowledge
.Knowledge is the primary raw material of ES.
.Incorporated knowledge representation.

Inference Engine:
The brain of the ES.
The control structure (rule
interpreter).
Provides methodology for
reasoning.
User Interface:
Language processor for friendly,
problem-oriented
communication.

Difference between
Artificial Intelligence &
Expert Systems

AI

AI

ES

is a study of how Expert systems is a

to make computers
type of AI.
do things at which, Expert systems are
at the moment,
basically systems
people are better
specifically created
AI deals with all
for a expertise
sort of intelligence
of machine

Examples
Artificial Intelligence:
1. Face recognition.
2. Robot.
3. Application that plays world-class
game of chess.
4. Used in militaries.
Knowledge Based Expert Systems /
Expert Systems:
5. Speech recognition.
6. Diagnose human illness.
7. Route to driving vehicles.
8. Make financial forecasts.

Conclusion
AI & ES is an integral part of
human life.
Core effect on human life.