Decision Support System (DSS)
A decision support system is an integrated set of computer tools supporting a decision-maker to interact directly with a computer to retrieve information useful in making semi-structured and unstructured decisions.
Examples of these decisions include merger and acquisition decisions, plant expansion, new product decisions, portfolio management and marketing decisions.
Decision-making is a fundamental managerial activity. It may be conceptualised as consisting of four stages: intelligence, design, choice, and implementation.
Essential aspects of the Decision Support System
1) The most important consideration is the decision support system’s ease of use—its ability to allow non-technical people to deal with it directly. The single most significant and enduring problem with computers has been their inflexibility and incompetence to let the person who needs the data deal directly with the computer.
2) The ability to access information should not be restricted to only the part of an organisation or only specific managerial or professional groups. Instead, the resource should be allocated to all the people and parts of an organisation needing it without widespread access; the power of advanced distributed processing systems will go untapped as they typically have.
3) In sharp contrast to the previous method of designing applications, the ideal decision support system should not be a ‘system’ in the strict sense of the term. Rather, it should be a highly adaptive decision support generator that professionals can easily use to quickly design data support prototypes suited to each specific decision-making task.
This adaptive tool must allow quick design changes if the original design does not closely match a person’s information collection style or needs.
4) To adequately support the human element, this highly adaptive support capability must be able to provide access to operational data and as well as to summary data that already has been processed by application programs designed for other specific operational tasks.
Equally important, this tool must provide professional access to an organisation’s raw data. It must allow the access to be accomplished in one step using a single uncomplicated procedure or command without having to re-key non-summary data.
5) The organisations need to access original data sometimes because efficiency is related to how well the original data is organised in the system; the Decision Support Generator should be able to interface with a true DBMS. It should also be able to indirectly access standard ‘flat’ files using the power of the host computer to facilitate both the user interface and data access without changing existing files.
6) The Decision Support Generator should let the user decide whether information should be displayed on the CRT screen for immediate use or whether it should be printed for later use. A workstation is the best way to accomplish such a flexible data presentation.
The management or professional information workstation would incorporate a keyboard, display screen and an interface to a printer that could print everything from straight text to graphics like pie charts, bar charts and line charts.
7) The support tool must interface with several different systems and capabilities; it must be compatible with all of them; the tool must provide users with a single easily used language to access, manipulate and present data in a way that best supports the end-user.
8) To facilitate formatting and manipulating displayed data, the decision support generator should ideally be able to interface with word processing software. With this capability, the DSS becomes the critical link between data processing and office automation, integrating both functions in an easily-used, straightforward, extremely powerful system.
Decision-making characteristics in the Global Business Environment
Business Strategy/ Decision-Making Characteristics
Multinational: (decentralised federation) Decision-making is decentralised to subsidiaries, informal relationships between headquarters and subsidiaries
International: (coordinated federation) More vital decisions and knowledge in general developed at headquarters and transferred to subsidiaries
Global: (centralised federation) Decisions made at the centre knowledge developed and retained at the centre
Transnational: (integrated network) Decision making and knowledge generation distributed among units
Managers and Decision Support System
The daily work of a manager is hundreds of brief activities of great variety, requiring rapid shifts of attention from one issue to another, very often initiated by emerging problems. A manager maintains a complex web of contacts outside and inside the organisation. The onslaught of these activities does not swamp a successful manager: they maintain a personal agenda.
Role of DSS
Effective manager carves out, as it were, their informal structure within the corporate structure, and they use this network to keep themselves informed and influence others. It has been absorbed that proactive manager makes extraordinary efforts to develop a long-term view and long-term agenda.
The need for types of information produced by the decision support system has always been present. Decision support systems have become popular primarily because of their capability to fill this need. Nowadays, the availability of computer hardware, the advent of the Database Management System in the 1970s provided means for storing and managing a large amount of data, and a significant increase in some software packages incorporating the functions of a decision support system.
Finally, many MBAs trained in analytic techniques are now reaching corporations’ middle and upper levels. These individuals know how to use the decision support system’s tools. So in most organisations, managers use computer-based Data processing applications. This leads to developing the decision support system in the business world.
A widely held notion is that modern decision-making is a highly structured process. According to this view, management makes decisions by gathering and analysing all the relevant information, reviewing all possible alternatives, and then calmly and rationally choosing the course of action that provides maximum benefits at minimal risk.
Managers play three types of roles in carrying out their functions. Interpersonal roles are mainly based on face-to-face interactions; in some cases, computerised communications media may be employed. Informational and decision roles are supported by a variety of information system, which makes information available, assists in decision making and serve as means of communication.
All the managerial roles have an element of decision making: the decision roles are the ones where this is the crucial aspect. The manager brings together resources in a novel way. A decision support system assists an entrepreneur in considering options, selecting one and planning for its implementation. Handling disturbances is a part of managerial control. Resource allocation is the essence of planning, and decision support systems have become indispensable in many organisations for their purpose.
The manager is a problem solver, and the fundamental activity in problem-solving is decision-making. Decision-making is identifying a problem, developing an alternative solution and choosing and implementing one. An experienced manager recognises a problem as similar to one they have already encountered. The intuitive grasp of a problem often relies on the ability to establish an analogy. The systems approach to problem-solving helps to manage complexity.
The decision support system in the organisational environment
Organisations that have been the most successful in implementing DSS have much in common. They have well established, well-controlled and well-structured data processing system which provides transaction processing data necessary for DSS.
Such organisations have spent extra money and personnel necessary to maintain a research and development focus. All the departments in the organisation have communicated with major computer groups. The entire departments have sufficient confidence to initiate and manage systems projects.
The central computer groups have several staff members from all other departments. The organisations use education and training programs to build mutual understanding between departments and the computer group.
Capabilities offered by DSS
1) Support decision-making in ill-structured situations- in which, precisely owing to the lack of structure, problems do not lend themselves to full computerisation and yet require computer assistance to access and process the voluminous data.
2) Help obtain quantities of results needed to reach the decision rapidly.
3) Operate the ad hoc mode to suit the user’s current needs instead of operating in a scheduled fashion as a management reporting system does.
4) Support various stages of the decision-making process.
5) Foster high-quality decision-making by encouraging decisions based on integrating available information and human judgment.
6) Offer flexibility as opposed to a preordained pattern of use – making it easy to accommodate the particular decision-making style of individuals.
7) Facilitate the implementation of the decisions which frequently cut across department boundaries.
8) Support group decision-making, particularly through group DSS (GDSS).
9) allow managers to better understand their business by developing and working with models.
In the past several years, `computers have been used increasingly in financial management, production analysis, short-term planning and geographical analysis. In today’s business world, computers are used for the decision-making process as a Decision support system. A Decision Support System is a type of management information system whose principal objective is to support a human decision-maker when arriving at a decision.
The strength of DSS lies in supporting decision-making in situations where both human judgement and the power of the computer are required. DSS primarily supports strategic, tactical, and operational planning.
Properly designed and integrated, the DSS becomes a potent support tool that enhances the productivity of professionals at all organisational levels in all departments. It can effectively extend the organisation’s present staff by reducing its workload, thereby increasing productivity. Moreover, today’s technology and state-of-the-art software tools can bring us closer to bridging the chasms and operations reach worlds.
These features can offer today’s organisations pressed more than ever before to maximise efficiency while reducing costs and unprecedented benefits in utilising and managing both their human and computer resources.