Decision Support Systems DSSsIntroduction

University of KhartoumFaculty of mathematical sciences

5th IT Lecture 2

Objectives

• Understand the role of information in decision making.

• Understand the essence of managerial activities.

• Understand the effect of technology in management decision making processes.

• Understand the decision phases.• Understand the role of DSS in making decisions.

Opening vignette: Decision support at Roadway Package System [RPS]

• From 3 hubs and 36 terminals to 21 hubs and over 300 terminals.

• How did RPS find a way in the competitive Business-Business small packages delivery.

• How information helped gain new insights into the business.

• Utilization of other systems as baseline for DSS platform.

The nature of Managers work

• Mintzberg’s 10 managers major roles classified in 3 categories:

A- Interpersonal:1- Figurehead.2- Leader.3- Liaison.

B- Informational4- Monitor.5- Disseminator.6- Spokesperson.

The nature of Managers work

C- Decisional7- Entrepreneur.8- Disturbance handler.9- Resource allocator.10- Negotiator.

Managerial decision making and Information systems

• Productivity is a measure of outputs to inputs.• The role of every business is to maximize

productivity.• All managers work revolve around decision

making.• The changing environment requires changes in

management ways of doing work.• (A good manager have the ability to make

prompt decisions rated first in surveys)

Factors affecting decision making

• Technology• Information/computers• Structural complexity• Competition• International markets.• Political stability.• Consumerism.• Government intervention.• Changes, fluctuations.

Factors affecting decision making

• Which has resulted in:– More alternatives to choose from.– Larger cost of marketing errors.– More uncertainty regarding the future.– Need for quick decisions.– Need for flexibility and agility.

The need for computerized decision support and the supporting technologies

• Some common reasons are:1. Speedy computations.2. Increased productivity.3. Technical support.4. Quality support.5. Competitive edge.6. Overcoming cognitive limits in processing and

storage.

Cognitive limits

• Individual problem solving capability is limited when diverse information and knowledge are required.

• Pooling several individuals may help, but the problem of coordination and communication may arise.

• Computers can help in individual and group decision making processes.

A Framework for Decision Support

• Gorry and Scott Morton (1977) combined simon’s(1971 )framework and Anthony (1965) suggest a framework based on both

• Structured, Semi-structured and unstructured.• Strategic planning, Operational Control,

Managerial Control.

A Framework for Decision Support

• Structured process are routine, and typically repetitive problems for which standard solution methods exists.

• Unstructured processes: are fuzzy, complex problems for which there are no direct solution methods.

• Simon describe the decision making process with [3/4] phases.

Simon Decision Making Phases

• Intelligence: Search for conditions that call for decisions.

• Design: Inventing, developing and analyzing possible courses of action.

• Choice: Selecting a course of action from those available.

• Implementation: Measurement and correction.

Categories of MSS that are used in Decision Framework

• Structured: MIS, OR [Management Sciences], OLTP.

• Semi-structured: DSS, IDSS, KMS• Unstructured: EIS, ES, NN, KMS.

Computer Support for Structured Decisions

• Structured and Semistructured decisions have been supported by computers since 1960s.

• Such problems have high level of structure therefore it is possible to abstract and analyze them and classify them into prototypes.– Make /buy decisions.– Procurement, planning and inventory control.

• When a prescribed solution exists using quantitative formulas or models this approach is called Management Sciences (MS) or Operation Research (OR).

Management Sciences

• Adopts the view that managers follow a fairly systematic process In solving problems.

• The systematic process involves the following:– Define the problem.– Classify the problem into standard category.– Construct a mathematical model that describe the real

world problem.– Finding a potential solutions to the modeled problem

and evaluating them.– Choosing and recommending a solution to the problem.

Concept of DSS

• DSS is defined as:– Interactive computer-based systems, which help

decision makers utilize data and models to solve unstructured problems – (Gorry and Scott Morton 1971).

– DSS couple the intellectual resources of individuals with the capabilities of a computer to improve the quality of decisions. It is a computer-based support system for management decision makers who deal with simi-structured problems – (Keen and Scott Morton 1978).

Why Use A DSS

• DSS is an umbrella term used to describe every computerized system used to support decision making in an organization.

Among DSS benefits are:– Higher decision quality.– Improved communication.– Cost reduction.– Increased productivity.– Time savings.– Improved customer and employee satisfaction.

Group Decision Support Systems

• Many major decisions in organizations are made by groups.

• Getting a group together in one place and at one time can be difficult and expensive.

• Traditional group meeting can take a long time, and resulting decisions may be questioned.

• OS Projects are available to aid in this area and research as well, however they are based on GDSS concepts.

DSS technology impact

• Executive information (Support) Systems.• Expert Systems and intelligent agents.• Artificial neural networks.• Knowledge management systems.• Hybrid support systems.