WHAT IS A DSS ?

Gorry and Scott-Morton’s:

“A model based set of procedures for processing data and judgment to assist a manager in his decision making.”

According to them, to be successful, such system must be:

- Simple - Robust- Easy to control- Adaptive- Complete on important issues - Easy to communicate with

Implicit in the definition is the assumption that :

- The system is computer-based.- The system serves as an extension of the user’s problem solving capabilities.

Gorry and Scott-Morton’s definition was accepted throughout most of the 1970’s by practitioners and researchers.

Several other definitions emerged from the literature :

Alter (1980), Moore and Chang (1980), Bonczek, Holsapple, and Whinston (1980), Keen (1980)The tableau below provides a good summary of their various views:

Source DSS defined in term of________________________________________________________________________________________________________________________________________

Gorry and Scott-Morton Problem Type, System Function(support)

Little System Function, Interface Characteristics

Alter Usage Pattern, System Objectives

Moore and Chang Usage Pattern, System Capabilities

Bonczek et al System Component Keen Development Process

Working definition of an ideal DSS:

A DSS is an interactive, flexible, and adaptable CBIS that utilizes decision rules, models, and model base coupled with a comprehensive database and the decision maker own’s insights, leading to specific, implementable decisions in solving problems that would not be amenable to management science optimization models per se. Thus, a DSS supports complex decision making and increases its effectiveness.

Type of Control

Type of Decision OperationalControl

Managerial Control Strategic Planning Support Needed

Structured AccountsRecievable, OrderEntry

Budget Analysis,Short-termforecasting, personnelreports,Make-or-buy analysis

Financialmanagement(investment),warehouse location,distribution systems

MIS Operations,Research models,transactionprocessing

Semi –Structured

Productionscheduling,inventory control

Credit evaluation,budget preparation,plant layout, projectscheduling, rewardsystems design

Building new plant,mergers andacquisitions, newproduct planning,compensationplanning, qualityassurance planning

DSS

Unstructured Selecting a cover fora magazine, buyingsoftware, approvingloans

Negotiating, recruitingan executive, buyinghardware, lobbying

R&D planning, newtechnologydevelopment, socialresponsibilityplanning

DSS, ES, NeuralNetworks

SupportNeeded

MIS, Managementscience

Management science,DSS, ES, EIS

EIS, ES, NeuralNetworks

Reality

Intelligence Phase

Organizational Objectives

Search and scanning procedures

Data collection

Problem Identification

Problem classification

Problem statement

Design PhaseFormulate a model

Set criteria for choice

Search for alternatives

Predict and measure outcomes

Choice PhaseSolution to the model

Sensitive analysis

Selection of best alternative

Plan for implementation

Design of a control system

Examination

Validation of the model

Implementation of

solution

Failure

Verification, testing of proposed solution

Success

Some Characteristics and Capabilities of DSS-I

1. DSS provides support for decision makers mainly in unstructured and semi structured situations. DSS is different from EDP, TP and MIS.

2. Support is provided for various managerial levels

3. Support is provided to individuals as well as groups - GDSS.

4. DSS provides support for interdependent as well as sequential decisions

5. DSS supports all phases of decision making process : Intelligence design, choice and implementation

6. Support is provided for a variety of decision problems.

7. DSS must be adaptive over time

Some Characteristics and Capabilities of DSS - Contd.

8. DSS should be easy to use.

9. DSS improves the effectiveness of decision making (accuracy, timeliness and quality) rather than efficiency (computer time close form solution).

10. Decision maker has complete control over all steps of the decision making process in solving the problems.

11. DSS leads to learning.

12. Should be easy to construct (?) Should be easy to alter by its users.

Box 3.2: The Major Benefits of DSS1. Ability to support the solution of complex problems.2. Fast response to unexpected situations that result in changed conditions. A DSS enables a thorough, quantitative analysis in a very short time. Even frequent changes in a scenario can be evaluated objectively in a timely manner.3. Ability to try several different strategies under different configurations, quickly and objectively.4. New insights and learning. The user can be exposed to new insights through the composition of the model and an extensive sensitivity “what if” analysis. The new insights can help in training inexperienced managers and other employees as well.5. Facilitated communication. Data collection and model construction experimentations are being executed with active users’ participation, thus greatly facilitating communication among mangers. The decision process can make employees more supportive of organizational decisions. The “what-if” analysis can be used to satisfy skeptics, in turn improving teamwork.

Box 3.2: The Major Benefits of DSS-continued

6. Improved management control and performance. DSS can increase management control over expenditures and improve performance of the organization.7. Cost savings. Routine applications of a DSS may result in considerable cost reduction, or in reducing (eliminating) the cost of wrong decisions.8. Objective decisions. The decisions derived from DSS are more consistent and objective than decisions made intuitively.9. Improving managerial effectiveness, allowing managers to perform a task in less time and/or with less effort. The DSS provides managers with more “quality” time for analysis, planning, and implementation.

Support Provided by DSS DSS may provide several types of support. The following structure is based on Alter(1). Each level of support contains and adds on the previous level (but may also contribute to the previous level).

DSS Answers to

Provides Questions:

Raw data and status access What is . . . . . . ?

General analysis capabilities What is / Why . . . . .?

Representation models (financial What will be . . . . . .?

statements). Casual models (forecasting

diagnosis). What will be / Why . . . ?

Solution suggestions, evaluation What if . . . . . . . ?

Solution selection What is best / What is good

enough . . . . . . ?

DSS

Semi structured decisions For managers at

different levels

For groups andindividuals

Interdependent or sequential decisions

Support, intelligence,design, choice

Support variety of decision styles and processes

Adaptability andFlexibility

Evolutionaryusage

Humans controlthe machine

Effectiveness ,not efficiency Ease of

Use

Modeling

Ease of construction

Knowledge

12

3

4

5

6

7

5

8

9

10

11

12

13

14

Components of DSS

1. Data includes database(s) which contains all the relevant data for the problem and is managed by software called database management system.

2. Model Management The software package that includes financial statistical, management science, other quantitative models that provide the system analytical capabilities, and an appropriate software management.

3. Communication(Dialog) Subsystem The subsystem through which the user can communicate with and command DSS

These components contribute the software portion of the DSS. Also the manager(or user) is considered a part of the problem solving system.

Conceptual Model of DSS

Data: external and internal

Other computer -

based systems

Data

Management

Model

Management

Knowledge

manager

Dialog

management

Manager (user)

and tasks

The Capabilities of a DBMS in a DSS

- Capture/extracts data for inclusion in a database

- Quickly updates (adds, deletes, edits and changes)

- Quickly retrieves data from database for queries and reports

- Provides comprehensive data security ( protection from unauthorized access and recovery capability)

- Handles personal and official data query

- Performs complex retrieval and data manipulation tasks based on queries

- Tracks usage of data

The Data Management Subsystem

- DSS database

- Database management system

- Data directory

- Query facility

Database Management

System

•Retrieval

•Inquiry

•Update

•Report generation

•Delete

Internal data

sources

Other PersonnelProduction Marketing Finance

Private

personal data

Extraction Model

Management

Dialog

Management

External data

sources

Decision support

database

Knowledge

Management

Query

facility

Data

directory

On Data And Database System-I

- Data external, internal and personal sources- External data are a available on thousands of online commercial databases, dictionaries, directories, reports, etc.- Data for DSS needs to be frequently in the field using one of the several methods- Data for DSS may have problems such as: incorrect data, non timely data poorly measured and indexed data, too many data or no data- Large online databases such as CompuServe and Dow Jones Information service can be a major source of DSS data.- DSS can be programmed with third-generation languages , but it is usually programmed with fourth-generation languages.- Fourth-generation system include many integrated features for data management - Data are organized either in a relational, hierarchical or network architecture. For many MSS relational type is preferable.

-

On Data And Database System - Contd.

- SQL is a standard access to relational database- There is a trend to have DSS (and other MSS) distributed via networks - Distributed DSS provide the benefit of a PC and the power of a mainframe- Many DSS are being offered on client/server systems- Object-oriented databases are especially suitable for complex DSS such as those in computer integrated manufacturing- Object-oriented databases are easy to use and fast to access. They are especially useful in distributed DSS- Many companies are developing an enterprise-wide approach to data management. IBM’s Information Warehouse is an example

The model management subsystem

- Model base- Model base management system- Model execution , Integration and command

The ability to invoke run, change, combine and inspect models is a key capability of DSS which differentiates it from other CBIS.

The model base management system (MBMS)

MBMS is a software system with the following functions :

- Model creation- Using subroutines and other building block- Generation of new routines and reports - Model updating and changing - Data manipulation

The MBMS is capable of interrelating models with appropriate linkages through a database.

Data

Management

Dialog

Management

Knowledge

Management

Model execution, integration and command processor.

Model

Directory

Models (Model Base)

• Strategic, tactical, operational

• Statistical, financial, marketing, management

science, accounting, engineering, etc.

• Model building blocks

Model Base Management

• Modeling commands : creation

• Maintenance - update

• Database interface

• Modeling language

Examples of Components of Models

Area DecisionVariables

ResultVariables

Uncontrollable Variables and Parameters

Financial Investment Investment alternativesand amounts.Period and timing ofinvestment.

Total ProfitRate of returnEarnings per shareLiquidity

Inflation ratePrime rateCompetition

Marketing Advertising budgetProduct lines

Market shareCustomer satisfaction

Customer’s incomeCompetitor’s actions

Manufacturing Products and amountsInventory levelsCompensation program

Total costQuality levelEmployee satisfaction

Machine capacityTechnologyMaterials price

Accounting Use of computersAudit scheduleDepreciation schedule

Data processing costError rate

Computer technologyTax ratesLegal requirements

Transportation Shipments schedule Total transport cost Delivery distanceRegulations

Services Staffing levels Customer satisfaction Demand for services

The Model directory

- It is similar to the role of database directory.

- Contains the catalog of all models

- Contains models definitions

- Answers all questions about model’s capability and availability.

The Interface (Dialog) subsystem

The dialog component is the software and hardware that provides the user interface for DSS.

- Deals with the human-machine interactions- Uses action language to allow communication between user(s) and machine.- Uses presentation language - with graphic screen display…etc.- Uses knowledge base including information that the user must know.

Data Management

and DBMS

Knowledge

Management

Model Management

and MBMS

Dialog Generation and

Management System-DGMS

Natural Language Processor

Input Output

Action Display

Languages Languages

Terminal

Printers, Plotters

User

Dialog

1. Variety of output formats andDevices.

2. Variety of user input devices.

3. Variety of dialog styles and ability to shift.

4. Support communications among users and with builder.

5. Support knowledge of users.

6. Capture, store, analyze dialogs (tracking of dialogs)

7. Flexible and adaptive dialog support.

Data

1. Variety of data forms and types.

2. Extraction, capture, and integration.

3. Data access function : retrieval / query ; report / display ;

4. Database management function

5. Variety of logical data view available

6. Data documentation

7. Tracking of data

8. Flexible and adaptive data support

Models

1. Library of models to constitute a model base : many types; maintain, catalog, integrate; “canned” (preprogrammed) library.

2. Model building facility

3. Model – manipulation and use facility

4. Model base management function

5. Model documentation

6. Tracking of model usage

7. Flexible and adaptive support model

•Create variety of DSS quickly and easily

•Facilitate iterative design process

Overall Capabilities

General Capabilities

Ease of use Access to a variety of Access to a variety of analysis

For routine use, data source, types, and capabilities with some modification and formats for a variety of “suggestion” or guidance

construction of DSS problems and contexts. available.

Component Capabilities