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Chapter 1
Introduction to Decision Support
Systems
Mallach, 2000
Computer Science Centre
University of Indonesia
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Discussions
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•
•
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Definition
Evolution of DSS
DSS position in IS
How all IS can be used for decision
support
• Benefits of DSS
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History of DSS
• 1950: Electronic data processing (EDP)
• Transaction processing: repetitive
processing of common business events
• Information reporting system: manager
were given thick reports every week!
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Cont’d…
• Management Information System (MIS),
storing and process all firm’s data:
customers, orders, inventory,
production, employees, suppliers, etc
for non-technical managers.
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Cont’d…
• In 1970, manager saw that they do not
need the whole MIS report…
• Specific information systems were
developed, called DSS
• 1990 saw the birth of data warehouse
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Flow of transaction data to
DSS
Transaction User
Transaction
Processing Systems
Corporate
Database
Decision Support
Systems
Decision Maker
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Comparison of TPS and DSS
System
Characteristic
Transaction
Processing System
Decision Support
System
User
Clerical
Individual knowledge
worker & all
management levels
Reason for
development
Cost saving
Improve decision
making effectiveness
Processing efficiency
Yes
No
Ease of use
Low
High
Usage volume /
frequency
High
Moderate to low
Database use
Heavy updating, few
reading
Primarily read only
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All IS are DSS…?
• TPS: whether to reorder inventory today or
not
• Expert system: doctors in a hospital is given
several disease possibilities given a set of
symptoms
• Personal information manager: a worker must
prioritize what to do next using a To-Do-List
software
• Workgroup: a marketing team must decide
when to arrange meeting or vote on a
decision
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What is a DSS?
• Sprague’79, “IS featuring an integrated
system composed of decision models,
database and decision maker to support
decision making”
• Kroenke’92, “… a set of tools, data, models
and other resource that managers and
analyst use to understand, evaluate and
solve problems… in unstructured problem
domains.”
• Many others!
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Sprague’s DSS Characteristics
• Tent to be aimed to less structured
problems that typical managers face
• Combines the use models with data
retrievals
• Easy to use and interactive
• Emphasize in flexibility to accommodate
changes in decision making approach of
the user
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Mallach’s DSS Characteristics
• Common characteristics:
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–
–
–
Are information systems
Used by knowledge workers
Used in making decisions
Support but do not replace people
• Optional characteristics:
– Used in semi-structured decisions
– Incorporate models
– Incorporate database
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DSS are used by knowledge
workers
• Knowledge workers include nonmanagement staff such as stock
brokers, financial analyst, production
coordinators, city planners, etc.
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DSS is used for decision
making
• What products should we sell in the
future?
• How should we market and sell them?
• What is the best way to provide
customer satisfaction?
• How should we invest? How do we get
maximum return?
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Needs human!
• DSS is not a decision-making system!
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Lack of structure…
• Essentially we can not program a
computer to make a decision to our total
satisfaction in all cases.
• It requires human judgment
• If the computer can make the decision,
we do not need DSS!
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Models
• A computer representation of a real life system that
lets us investigate the impact of possible decision
affecting that system
• Forecast of the impact of several option of decision is
very useful…
• Example:
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–
–
–
–
Linear programming
Statistics
Simulation
Probability
Queuing
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Efficiency vs. Effectively
• Generally IS are used to reduce cost
• Example: accounting information
systems, academic information systems
• But DSS has high impact for
organization’s life in the future!
• It allows the organization to do strategic
moves…
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Who are the users?
Top
Executives
Middle Managers
Clerical workers
Executive
Inf. Sys.
DSS
TPS
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Benefits of DSS
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•
•
•
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Improving personal efficiency
Improving problem solving
Facilitating communication
Promoting learning or training
Increasing organizational control
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Improving personal efficiency
• Budgeting are still the same as 200
years ago
• Who wants to revert to manual
calculation when we have
spreadsheets?
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Improve problem solving
• DSS can make people solve a problem
better instead just faster
• Marketing manager who can see more
factors influencing sales & promotion,
surely outperforms “non-DSS”
managers
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Facilitate communication
• As tool for persuasion:
– Offensive use, to persuade certain actions
– Defensive use, to justify actions that were
already taken
• New form: groupware
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Promote learning
• Over time lets the DSS user see the
result of their previous decisions in
certain environment
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Increase organization control
• It also standardizes the way multiple
managers calculate things!
• Example: credit analysts in a bank,
making decision for a loan application
• Less corruption…