DECISION SUPPORT SYSTEMS: AN OVERVIEW AND ITS ROLE IN BUSINESS Working Definition of DSS

A Decision Support System (DSS) is an interactive computer-based system or subsystem intended to help decision makers use communications technologies, data, documents, knowledge and/or models to identify and solve problems, complete decision process tasks, and make decisions. Decision Support System is a general term for any computer application that enhances a person or groups ability to make decisions. Also, Decision Support Systems refers to an academic field of research that involves designing and studying Decision Support Systems in their context of use. A DSS is an interactive, flexible, and adaptable CBIS, specially developed for supporting the solution of a non-structured management problem for improved decision making. It utilizes data, it provides easy user interface, and it allows for the decision makers own insights . DSS may utilize models, is built by an interactive process (frequently by end-users), supports all the phases of the decision making, and may include a knowledge component.

A Brief History
Academic Researchers from many disciplines has been studying DSS for approximately 40 years. According to Keen and Scott Morton (1978), the concept of decision support has evolved from two main areas of research: the theoretical studies of organizational decision making done at the Carnegie Institute of Technology during the late 1950s and early 1960s, and the technical work on interactive computer systems, mainly carried out at the Massachusetts Institute of Technology in the 1960s. It is considered that the concept of DSS became an area of research of its own in the middle of the 1970s, before gaining in intensity during the 1980s. In the middle and late 1980s, Executive Information Systems (EIS), group decision support systems (GDSS), and organizational decision support systems (ODSS) evolved from the single user and model-oriented DSS.

Beginning in about 1990, data warehousing and on-line analytical processing (OLAP) began broadening the realm of DSS. As the turn of the millennium approached, new Web-based analytical applications were introduced.

History of DSS

Why DSS?
Increasing complexity of decisions Technology Information: Data, data everywhere, and not the time to think! Number and complexity of options Pace of change Increasing availability of computerized support

 Inexpensive high-powered computing Better software More efficient software development process Increasing usability of computers

Characteristics and Capabilities of DSS

DSS provide support in semi-structured and unstructured situations, includes human judgment and computerized information. Support for various managerial levels; Top level, Middle level and Low level. Support to individuals and groups. Support to interdependent and/or sequential decisions Support all phases of the decision-making process Support a variety of decision-making processes and styles Are adaptive. Have user friendly interfaces. Goal: improve effectiveness of decision making. The decision maker controls the decision-making process. End-users can build simple systems. Utilizes models for analysis. Provides access to a variety of data sources, formats, and types. Decision makers can make better, more consistent decisions in a timely manner.

A Summary of Commercial DSS

A summary of commercial DSS system show seven types of DSS: File Drawer Systems: It is a data oriented type of DSS that provide access to the data items as and when required. Data Analysis systems: It allows manager to work with single file and when work with one file is completed, he can switch to other file. Analysis Information systems: This type of DSS gives access to many

databases and small models. For eg Sales analysis system will provide manager information about sales, customer information etc. Accounting and financial models: It is a model oriented type of DSS that calculates the consequences of possible actions. Representational model: It helps managers to predict results of alternative decisions that estimates the consequences of actions based on simulation models. Optimization models: This type of DSS provides optimal solution to a problem and is based on mathematical data about costs, sales etc Suggestion models: This is a model oriented model of DSS that perform the logical processing to a specific suggested decision for a task.

Classification
Communication-driven DSS A communication-driven DSS uses network and communication technologies to

facilitate collaboration on decision making. It supports more than one person working on a shared task. Examples include integrated tools like Microsoft's NetMeeting or Groove (Stanhope 2002), Vide conferencing. It is related to group decision support systems.

Data-driven (retrieving) DSS A data-driven DSS or data-oriented DSS emphasizes access to and manipulation of a time series of internal company data and, sometimes, external data. Simple file systems accessed by query and retrieval tools provides the elementary level of functionality. Data warehouses provide additional functionality. OLAP provides highest level of functionality. Examples: Accessing AMMIS data base for all maintenance Jan89-Jul94 for CH124 Accessing INTERPOL database for crimes by . Accessing border patrol database for all incidents in Sector ...

Document-driven DSS A document-driven DSS uses storage and processing technologies to document retrieval and analysis. It manages, retrieves and manipulates unstructured information in a variety of electronic formats. Document database may include: Scanned documents, hypertext documents, images, sound and video. A search engine is a primary tool associated with document drivel DSS.

Knowledge-driven DSS A knowledge-driven DSS provides specialized problem solving expertise stored as facts, rules, procedures, or in similar structures. It suggests or recommend actions to managers. MYCIN: A rule based reasoning program which help physicians diagnose blood disease.

Model-driven DSS A model-driven DSS emphasizes access to and manipulation of a statistical, financial, optimization, or simulation model. Model-driven DSS use data and parameters provided by users to assist decision makers in analyzing a situation; they are not necessarily data intensive. Dicodess is an example of an open source model-driven DSS generator (Gachet 2004). Other examples: A statistical forecasting model An optimum routing model

DSS ARCHITECTURE
Three fundamental components of DSS: the database management system (DBMS), the model management system (MMS), and the dialog generation and management system (DGMS). The Data Management Component stores information (which can be further subdivided into that derived from an organization's traditional data repositories, from external sources such as the Internet, or from the personal insights and experiences of individual users); The Model Management System handles representations of events, facts, or situations (using various kinds of models, two examples being optimization models and goalseeking models); and The User Interface Management Component is of course the component that allows a user to interact with the system.

Typical Architecture TPS: transaction processing system MODEL: representation of a problem OLAP: on-line analytical processing USER INTERFACE: how user enters problem & receives answers DSS DATABASE: current data from applications or groups DATA MINING: technology for finding relationships in large data bases for prediction DSS Model base.

Model base It is a software component that consists of models used in computational and analytical routines that mathematically express relations among variables.

Examples: Linear programming models, Multiple regression forecasting models Capital budgeting present value models Applications.

There are theoretical possibilities of building such systems in any knowledge domain: Clinical decision support system for medical diagnosis. a bank loan officer verifying the credit of a loan applicant an engineering firm that has bids on several projects and wants to know if they can be competitive with their costs. DSS is extensively used in business and management. Executive dashboards and other business performance software allow faster decision making, identification of negative trends, and better allocation of business resources. A growing area of DSS application, concepts, principles, and techniques is in agricultural production, marketing for sustainable development. A specific example concerns the Canadian National Railway system, which tests its equipment on a regular basis using a decision support system. A DSS can be designed to help make decisions on the stock market, or deciding which area or segment to market a product towards.

MIS vs DSS

ROLE OF DSS
Goal-Seeking It helps in setting a target value for a variable and then repeatedly change other variables until the target value is achieved Optimization Goal of DSS is to find the optimum value for one or more target variables given certain constraints. One or more other variables are changed repeatedly until the best values for the target variables are discovered What-if Analysis End user makes changes to variables, or relationships among variables, and observes the resulting changes in the values of other variables

Sensitivity Analysis Value of only one variable is changed repeatedly and the resulting changes in other variables are observed

Risk analysis Risk is the important factor which affects the business enterprise.

DSS allows managers to assess the risks associated with various alternatives. Decisions can be classified as low risk, medium risk and high risk. A DSS is particularly useful in medium risk and high risk environments. Model building DSS allows decisions markets to identify the most appropriate

model for solving the problems. It takes into account input variables; inter relationship among the variables problem assumptions and constraints. For example a marketing manager of a television manufacturing company is charged with the responsibility of developing a sales forecasting model for colour TV sets. Graphical analysis This helps managers to quickly digest large volumes of data and visualize the impacts of various courses of action. They recommend the use of graph when:a) Seeking a quick summary of data. b) Forecasting activities. c) Detecting trends over time. d) Composing points and patterns at different variables.

BUSINESS AND DECISION SUPPORT

To succeed, companies need information systems that can support the diverse information and decision-making needs of their managers and business professionals.

Information, Decisions, & Management The type of information required by decision makers is directly related to the level of management and the amount of structure in the decision situations.

Information Quality Timeliness Provided WHEN it is needed Up-to-date when it is provided Provided as often as needed Provided about past, present, and future time periods as necessary

 Content Free from errors Should be related to the information needs of a specific recipient for a specific situation Form Provided in a form that is easy to understand Can be provided in detail or summary form Can be arranged in a predetermined sequence Can be presented in narrative, numeric, graphic, or other forms Can be provided in hard copy, video, or other media. Provide all the information that is needed Only the information that is needed should be provided Can have a broad or narrow scope, or an internal or external focus Can reveal performance

Decision Structure Structured decisions Involve situations where the procedures to be followed can be specified in advance Unstructured decisions Involve situations where it is not possible to specify most of the decision procedures in advance. Semi structured decisions

Some decision procedures can be specified in advance, but not enough to lead to a definite recommended decision

Amount of structure is typically tied to management level Operational more structured Tactical more semi structured Strategic more unstructured

DECISION SUPPORT TRENDS The growth of corporate intranets, extranets and the Web has accelerated the development and use of executive class information delivery & decision support software tools to virtually every level of the organization. Ingredients for DSS Success or Failure For DSS Success Management Support Users Involved in Design & Development Early Benefits Shown For DSS Failure Lack of Management Support Users Ignored in Design & Development No Early Benefits Shown

DSS AT PEPSI CO.

PepsiCo and Sedgwick James Inc, the world second largest insurance broker, developed a risk management DSS to help minimize PepsiCos losses from accident, theft and other causes. Every week, Sedgwick loads the latest casualty claims data from the nations leading insurance carriers into a DSS database resident on IBM RS /6000 server in the PepsiCo intranet. The database is then accessed by managers and analysts using desktop PCs and remote laptops equipped with the INFORM risk management system. Both the RS/6000 server and local PCs use information builders middleman to provide PepsiCo mangers and business analysts with transparent data access from a variety of hardware/software configuration. EXPERT SYSTEM An expert system is a computer program that simulates the thought process of a human expert to solve complex decision problems in a specific domain. An expert system is a knowledge based information system that uses its knowledge about specific area. ES acts as an expert to end users and it can be used at each and every level of an organization. Expert system provides answers to questions by making conclusions using knowledge contained in knowledge base. An expert system operates as an interactive system that responds to questions, asks for clarification, makes recommendations, and generally aids the decision-making process. Expert systems provide expert advice and guidance in a wide variety of activities, from computer diagnosis to delicate medical surgery. An expert system may be viewed as a computer simulation of a human expert. Expert systems are part of a general category of computer applications known as artificial intelligence . To design an expert system, one needs a knowledge engineer, an individual who studies how human experts make decisions and translates the rules into terms that a computer can understand. An expert system may be viewed as a computer simulation of a human expert

CHARACTERISTICS OF EXPERT SYSTEMS

DOMAIN SPECIFICITY Expert systems are typically very domain specific. For example, a diagnostic expert system for troubleshooting computers must actually perform all the necessary data manipulation as a human expert would. The developer of such a system must limit his or her scope of the system to just what is needed to solve the target problem. Special tools or programming languages are often needed to accomplish the specific objectives of the system. SPECIAL PROGRAMMING LANGUAGES Expert systems are typically written in special programming languages. The use of languages like LISP and PROLOG in the development of an expert system simplifies the coding process. The major advantage of these languages, as compared to conventional programming languages, is the simplicity of the addition, elimination, or substitution of new rules and memory management capabilities.

COMPONENTS OF AN EXPERT SYSTEM

The knowledge base is the collection of facts and rules which describe all the knowledge about the problem domain. The knowledge base, which is a collection of domain specific knowledge usually represented as rules based on IF-THEN logic The inference engine is the part of the system that chooses which facts and rules to apply when trying to solve the users query. The user interface is the part of the system which takes in the users query in a readable form and passes it to the inference engine. It then displays the results to the user. Most user interfaces are menu driven and have a number of display and reporting features.

STRUCTURE OF AN EXPERT SYSTEM

BENEFITS OF EXPERT SYSTEMS

Increase the probability, frequency, and consistency of making good decisions. Help distribute human expertise. Facilitate real-time, low-cost expert-level decisions by the non expert. Enhance the utilization of most of the available data.

 Permit objectivity by weighing evidence without bias and without regard for the users personal and emotional reactions. Permit dynamism through modularity of structure. Free up the mind and time of the human expert to enable him or her to concentrate on more creative activities. Encourage investigations into the subtle areas of a problem. Heuristic reasoning: It allows the expert to arrive at a good solution quickly and efficiently. Expert systems base their reasoning process on symbolic manipulation and heuristic inference procedures that closely match the human thinking process. Data Uncertainties: Expert systems are capable of working with inexact data. An expert system allows the user to assign probabilities, certainty factors, or confidence levels to any or all input data.

APPLICATIONS OF EXPERT SYSTEM

Diagnosis and Troubleshooting of Devices and Systems of All Kinds

This class comprises systems that deduce faults and suggest corrective actions for a malfunctioning device or process. There are probably more diagnostic applications of ES than any other type.

Planning and Scheduling

Systems that fall into this class analyze a set of one or more potentially complex and interacting goals in order to determine a set of actions to achieve those goals, and/or provide a detailed temporal ordering of those actions, taking into account personnel, materiel, and other constraints. Configuration of Manufactured Objects from Subassemblies

Configuration applications were pioneered by computer companies as a means of facilitating the manufacture of semi-custom minicomputers

The technique has found its way into use in many different industries, for example, modular home building, manufacturing, and other problems involving complex engineering design and manufacturing. Financial Decision Making

The financial services industry has been a vigorous user of expert system techniques. Advisory programs have been created to assist bankers in determining whether to make loans to businesses and individuals. Insurance companies have used expert systems to assess the risk presented by the customer and to determine a price for the insurance. A typical application in the financial markets is in foreign exchange trading Knowledge Publishing

The two most widely distributed expert systems in the world are in this category. The first is an advisor which counsels a user on appropriate grammatical usage in a text. The second is a tax advisor that accompanies a tax preparation program and advises the user on tax strategy, tactics, and individual tax policy. Process Monitoring and Control

Systems falling in this class analyze real-time data from physical devices with the goal of noticing anomalies, predicting trends, and controlling for both optimality and failure correction. Examples of real-time systems that actively monitor processes can be found in the steel making and oil refining industries.

EXAMPLES OF EXPERT SYSTEM ES FOR AGRICULTURE

Cuptex: An Expert System for Cucumber Crop Production Citex: An Expert System for Orange Production Neper Wheat: An Expert System for Irrigated Wheat Management Tomatex: An Expert System for Tomatoes

Limex: A Multimedia Expert System for Lime Production

EXPERT SYSTEMS IN REAL ESTATE PRACTICE ES helps in the preparation of real estate documentation such as leases, contracts and forms. Expert systems can help the user prepare better documents by guidinjg them through the process and brining attention to issues that might other wise have been missed, as well as improving phrasing and structure. The costing of buildings and development projects. This requires a combination of data mining and rule based methods (or case based reasoning) to bring together the expert knowledge of quantity surveying, engineering and construction with current cost estimates. Property and facilities management problems where the ES can be used by both clients and property

GDSS GROUP DECISION SUPPORT SYSTEMS

Group Decision Support Systems (GDSS) It is an interactive computer-based system used to facilitate the solution of unstructured problems by a set of decision makers working together as a group. It aids groups, especially groups of managers, in analyzing problem situations and in performing group decision making tasks. FOUR MAIN COMPONENTS OF GDSS: Hardware (conference facility, audiovisual equipment, etc.) Software tools (Electronic questionnaires, brainstorming tools, voting tools, etc.) People (Participants, trained facilitator, support staff) Procedures

OVERVIEW OF A GDSS MEETING In a GDSS electronic meeting, each attendee has a workstation. The workstations are networked and are connected to the facilitators console, which serves as the facilitators workstation and control panel, and to the meetings file server. All data that the attendees forward from their workstations to the group are collected and saved on the file server. The facilitator is able to project computer images onto the projection screen at the front of the room. Many electronic meeting rooms have seating arrangements in semicircles and are tiered in legislative style to accommodate a large number of attendees. The facilitator controls the use of tools during the meeting.

Why Use GDSS? High level managers can spend 80% of their time making decisions in groups. Applied correctly, GDSS can reduce this time, arriving at a better decision faster. GDSS provides the hardware, software, databases and procedures for effective decision making.

ADVANTAGES OF GDSS
Anonymity GDSS drive out fear leading to better decisions from a diverse hierarchy of decision makers Parallel Communication It eliminate monopolizing and thus provides increased participation, better decisions. Automated record keeping There is no need to take notes, theyre automatically recorded Ability for virtual meetings Only need hardware, software and people for connection. Portability - Can be set up to be portable laptop. Global Potential - People can be connected across the world. No need for a computer guru To work with GDSS no high computer knowledge is required although some basic experience is a must.

DISADVANTAGES OF GDSS
Cost Infrastructure costs to provide the hardware and software/room/network connectivity can be very expensive. Security especially true when companies rent the facilities for GDSS; also, the facilitator may be a lower-level employee who may leak information to peers

Technical Failure Various technical failure can occur like power loss, loss of connectivity, relies heavily on bandwidth and LAN/WAN infrastructure properly setup system should minimize this risk

Keyboarding Skills Reduced participation may result due to frustration Perception of messages lack of verbal communication could lead to misinterpretation

TYPICAL GDSS PROCESS 1) Group Leader (and Facilitator?) select software, develop agenda 2) Participants meet (in decision room/Internet) and are given a task. 3) Participants generate ideas brainstorm anonymously 4) Facilitator organize ideas into categories (different for user-driven software) 5) Discussion and prioritization may involve ranking by some criteria and/or rating to the facilitators scale 6) Repeat Steps 3, 4, 5 as necessary 7) Reach decision 8) Recommend providing feedback on decision and results to all involved Examples of GDSS One example of implementation of GDSS is at IBM. They, as well as many other corporations, initiated GDSS to improve group meetings. A specific case involved a plant manager not being able to identify the cause of problems with shop floor control. After having a meeting for two hours with plant personnel all that resulted was arguments and bad feelings. So after meeting with the company's GDSS facilitator, the manager decided to have ten plant employees, he, and two junior analysts participate in a GDSS program. They would use electronic brainstorming and voting to resolve the shop floor control problem.

The manager and the facilitator decided the topic would be "What are the key issues in improving shop floor control?" After brainstorming for 35 minutes and compiling 645 lines of suggestions, ideas and comments on how to improve shop floor control, the manager found that he had gotten useful information about the issue for the first time. A list was compiled of the comments and then the members of the group ranked them in order of importance. The results were displayed and a discussion occurred for ten minutes. The manager thanked the participants and was given a printout of all the discussion and results of the group vote (Aiken 3). FUTURE IMPLICATIONS OF GDSS GDSS will incorporate Artificial Intelligence and Expert Systems the software will learn and help the users make better decisions Decreasing cost will allow more organizations to use GDSS Increasing implementation of GDSS with the customer Customer voice their needs in non-threatening environment

GDSS may play a large role in the future of the virtual companies GDSS can help the virtual companies do business in the global business environment

EXECUTIVE INFORMATION SYSTEM

An EIS is a special type of DSS designed to support decision making at the top level of an organization. An EIS may help a CEO to get an accurate picture of overall operations, and a summary of what competitors are doing. These systems are generally easy to operate and present information in ways easy to quickly absorb (graphs, charts, etc.). Executive Information Systems (EIS) Provide critical information for executives and managers Example: easy access to actions of competitors.

CHARACTERISTICS OF AN EIS It provides immediate and easy access to information EIS cut across the functional areas. It helps in taking decisions at all levels. Generate o/p in the form of reports and graphics. It is easy to use. It combine both internal & external information Includes future & current data

EIS Components Basic components are: Hardware: An EIS requires no specific or unique hardware. A key issue is to be sure that the EIS components optimize and conform to the organizations computing resources. The system must be configured so that the resources are well-matched to the executives using them. Software: In contrast to hardware, software is usually highly specialized to the problem domain. This specialization is often achieved by using off-the-shelf components for the EIS backbone, and customized modules to meet specific needs. Lotus Notes is a good example. It can be used alone, or can accommodate third-party plug-in modules. Database Output

BUSINESS VALUE OF EXECUTIVE SUPPORT SYSTEMS Enables executive to review more data in less time with greater clarity than paper-based systems Increases upper managements span of control Increases executives ability to monitor activities of lower units reporting to them

EIS increases managers productivity EIS can convert information into other formats

ADVANTAGES: Easy for upper-level executives to use. Provides timely delivery of company summary information. Information that is provided is better to understand Filters data for management. Offers efficiency to decision makers.

DISADVANTAGES Information overload for some managers. Benefits hard to quantify. High implementation costs. System may become slow, large, and hard to manage. Need good internal processes/support for data management. May lead to less reliable and less secure data.

APPLICATIONS: Manufacturing : Manufacturing operational control focuses on day-to-day operations, and the central idea of this process is effectiveness and efficiency. Marketing : EIS provides an approach to sales forecasting, which can allow the market executive to compare sales forecast with past sales.

Financial : An EIS is a responsibility-oriented approach that integrates planning or budgeting with control of performance reporting, and it can be extremely helpful to finance executives.

The EIS of Tomorrow The intelligent EIS: advances in AI technology will be deployed in the EIS The multimedia EIS: multimedia databases will allow future integration of text, voice and image The informed EIS: future EISs will make wider use of data external to the company The connected EIS: high-bandwidth communication allows greater interconnectivity