Decision Support Systems

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Information and Organizations

Decision Support Systems

Decision Support Systems (DSS) are interactive computer-based systems intended to help decision makers utilize data to identify and solve problems and make decisions. Offer potential to assist in solving both semistructured and unstructured problems
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The Managers Job and Decision Making

Managers have three basic roles (Mintzberg 1973) Interpersonal roles Informational roles Decisional roles

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The Managers Job & Decision Making

(continued)

Decision refers to a choice that individuals and group make among two or more alternatives. Decision making is a systematic process composed of three major phases: intelligence, design and choice (Simon 1977) Implementation phase was added later.
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Decision Making as a Component of Problem Solving

Intelligence
Decision making

Design Problem solving

Choice

Implementation Monitoring
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Decision Making Process

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Why Managers Need IT Support

The number of alternatives to be considered constantly increases. Decisions must be made under time pressure. Decisions are more complex Decision makers can be in different locations and so is the information.
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A Framework for Computerized Decision Analysis

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Problem Structure
The first dimension deals with the problem structure, where does the decision making processes fall along the continuum ranging from highly structured to highly unstructured decisions. Structured Unstructured Semistructured
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The Nature of Decisions

The second dimension of decision support deals with the nature of decisions Operational control Management control Strategic planning

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Solution Types
Optimization model Finding the best solution Satisficing model Finding a good -- but not necessarily the best - solution to a problem

Heuristics Commonly accepted guidelines or procedures

that usually find a good solution
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Problem Solving Factors

Multiple decision objectives Increased alternatives Increased competition The need for creativity Social and political actions International aspects Technology Time compression
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Characteristics of a DSS (1)

Handles large amounts of data from different sources Provides report and presentation flexibility Offers both textual and graphical orientation

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Characteristics of a DSS (2)

Supports drill down analysis Performs complex, sophisticated analysis and comparisons using advanced software packages Supports optimization, satisficing, and heuristic approaches

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Characteristics of a DSS (3)

Performs different types of analyses What-if analysis
Makes hypothetical changes to problem and
observes impact on the results

Simulation
Duplicates features of a real system Goal-seeking analysis Determines problem data required for a given result
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Goal Seeking Example

You know the desired result You want to know the required input(s) Example: Microsoft Excels Goal Seek and Solver
functions

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Excel demo

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9.2 Decision Support Systems (DSS)

Decision support systems DSS capabilities Sensitivity analysis What-if analysis Goal-seeking analysis

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BI, Multidimensional Data Analysis, Data Mining, and DSSs

Business Intelligence (BI) Two types of BI Systems: Those that provide data analysis tools
Multidimensional data analysis (or online analytical
processing) Data mining Decision support systems

Those that provide information in structured

format Dashboards
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Capabilities of a DSS (1)

Supports Problem solving phases Different decision frequencies
Merge with another company? How many widgets should I order?

low Frequency
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high
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Capabilities of a DSS
Highly structured problems Straightforward problems, requiring known
facts and relationships.

Semi-structured or unstructured problems Complex problems wherein relationships

among data are not always clear, the data may be in a variety of formats, and are often difficult to manipulate or obtain
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Decision Making Levels

Strategic Tactical Operational High Operational-level managers involved with daily decisions

Strategic-level managers involved with long-term decisions

Low Decision Frequency

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Integration of TPS, MIS, and DSS

In many organizations they are integrated through a common database Separation of DSS transactions in the database from TPS and MIS transactions may be important for performance reasons

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Web-Based Decision Support Systems

Web-based decision support systems Decision support system software provides
business intelligence through web browser clients that access databases either through the Internet or a corporate intranet. Tools such as Brio, SPSS, Cognos can be used as front ends to provide business intelligence reports.

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Group Decision Support System

Group Decision Support Systems (GDSS) - An interactive, computer-based system that facilitates solution of unstructured problems by a set of decisionmakers working together as a group. It aids groups, especially groups of managers, in analyzing problem situations and in performing group decision making tasks.
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Group Decision Support System

Group Decision Support System (GDSS)
to provide effective support in group decisionmaking settings

Contains most of the elements of DSS plus software

Groupware is the hardware and software which

supports and augments group work. Groupware applications are not meant to replace people in an interactive situation.They are special software such as: E.g., Lotus Notes people located around the world work on the same
project, documents, and files, efficiently and at the same time
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Similarities Between GDSS and DSS

Both use models, data and user-friendly software Both are interactive with what-if capabilities Both use internal and external data Both allow the decision maker to take an active role Both have flexible systems Both have graphical output
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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.

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Characteristics of a GDSS
Special design Ease of use Flexibility Decision-making support Delphi approach (decision makers are geographically

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dispersed) Brainstorming Group consensus Nominal group technique

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Characteristics of a GDSS
Anonymous input Reduction of negative group behaviour Parallel communication Automated record keeping Cost, control, complexity factors

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GDSS Time/Place Environment

Same-Time Same-Place
(Most widely used GDSScomputers with projectors, voting tools)

Same-Time Different-Place
(team room, tools, audio conferencing, screen sharing, chat)

Different-Time Same-Place
(audio/video conferencing, document sharing)
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Different-Time Different-Place
(voice mail, email, bulletin boards)

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Advantages of GDSS
Anonymity drive out fear leading to better decisions from a diverse hierarchy of decision makers Parallel Communication eliminate monopolizing providing increased participation, better decisions Automated record keeping no need to take notes, theyre automatically recorded Ability for virtual meetings only need hardware, software and people connected Portability - Can be set up to be portable laptop Global Potential - People can be connected across the world No need for a computer guru although some basic experience is a must
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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 lowerlevel employee who may leak information to peers Technical Failure 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 Training learning curve is present for users, varies by situation Perception of messages lack of verbal communication could lead to misinterpretation
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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
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Executive Support System

Characteristics A specialized DSS that
includes all the hardware, software, data, procedures, and people used to assist senior-level executives within the organization
Board of directors

President

Function area vice presidents

Function area managers ITEC 1010

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Characteristics of ESSs
Tailored to individual executives Easy to use Drill down capabilities Support the need for external data Help with situations with high degree of uncertainty Futures orientation (predictions, forecasting) Linked with value-added business processes
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Capabilities of an ESS
Support for defining overall vision strategic planning strategic organizing and staffing strategic control crisis management

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Data Mining
Searching for valuable business information in a large database or data warehouse. Data mining performs two basic operations: Predicting trends and behaviors Identifying previously unknown patterns and
relationships

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