1. Chapter 12 Decision Support Systems
Management Information Systems, 4th Edition

2. Learning Objectives List and explain the steps in decision making
Articulate the difference between structured and unstructured decision making
Describe the typical software components that decision support systems comprise
Describe the typical elements of geographic information systems
Identify business situations in which decisions can be supported by geographic information systems
Management Information Systems, 4th Edition

3. Decision Support Aids
Organization’s success depends on quality of managers’ decisions
When decisions involve large amounts of information and processing, computer-based systems can make the process effective and efficient.
Applications now called business analysis tools or business intelligence applications
Management Information Systems, 4th Edition

4. The Decision-Making Process
Three decision-making phases
Intelligence
Design
Choice
Models to analyze data
Maps, mathematical equations of variables
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5. The Decision-Making Process (Cont.)
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6. Structured and Unstructured Problems
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7. Structured Problems Proven set of steps for solution
Algorithm
Parameters
Most mathematical and physical problems are structured
Programmable problems: feasible to write a program to solve them
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8. Unstructured Problems
No algorithm to follow to reach optimal solution
Multiple potential solutions
Unstructuredness is closely related to uncertainty
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9. Semistructured Problems
Neither fully structured nor totally unstructured
Managers and Semistructured Problems
Most common type of problem for managers
Task is to choose one alternative that will bring about the best outcome
Often rely on decision support applications to select the best course of action
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10. Decision Support System (DSS)
Computer-based information systems that help managers select one of many solutions
Automates some of decision-making process
Sophisticated and fast analysis
Used at all management levels
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11. Decision Support System (DSS) Components
Three Major Components
Data management module
Model management module
Dialog management module
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12. Decision Support System (DSS) Components (Cont.)
Together, DSS modules:
Help enter request conveniently
Search vast amounts of data
Use data in desired models
Present results in readable manner
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13. The Data Management Module
Gives user access to databases or data warehouses
Allows decision maker to conduct intelligence phase of decision making
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14. Decision Support System Components (Cont.)
Management Information Systems, 4th Edition

15. Decision Support System Components
Closely intertwined with other organizational systems
Data warehouses
Data marts
ERP systems
Draw relevant data for decision-making
Management Information Systems, 4th Edition

16. The Model Management Module
Selects appropriate model to analyze data
Linear regression model
May be built by the organization based on accumulated knowledge
Trade secrets
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17. The Model Management Module (Cont.)
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18. The Model Management Module (Cont.)
Creating New Models
Data mining techniques do not rely on predetermined models
No hypothesis on relationships of data required
Software looks for the relationships
Results in a new model or set of relationships
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19. The Dialog Module Interface between user and other modules
Prompts user to select a model
Allows database access and data selection
Lets user enter/change parameters
Displays analysis results
Textual, tabular, and graphical displays
Management Information Systems, 4th Edition

20. The Dialog Module (Cont.)
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21. Types of Decision Support Systems
Personal Decision Support Systems
Individual Knowledge worker uses in daily work
Raw data entered into a program either by user or drawn from other sources
Tax preparation software is an example
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22. Types of Decision Support Systems (Cont.)
Group Decision Support Systems
Promote brainstorming and group decision making
Located in conference room or on networked computers
Weigh votes to overcome impasses
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23. Types of Decision Support Systems (Cont.)
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24. Sensitivity Analysis
Tests degree to which result is affected by change in parameters
What-if analysis
Can change multiple parameters at once
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25. Executive Information Systems
Alleviate information overload for executives
Select most relevant data for analysis
Drilling down
Consolidate and summarize data
Display data graphically
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26. Effective EIS features
An easy-to-use and easy-to-learn graphical user interface
On-request “drill-down” capability
On-demand financial and other ratios, and other indicators
Easy-to-use but sophisticated tools to allow navigation in databases and data warehouses
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27. Effective EIS Features (Cont.)
Statistical analysis tools
The ability to respond to ad hoc queries and sensitivity analyses
Access to external data pools
The ability to solve diverse business problems
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28. Developing Decision Support Systems
When Should a DSS Be Built?
What is the type problem and how structured is it?
Are the required data available in databases and data warehouses?
How often do managers encounter the problem?
Who will use the system?
Can the prospective users spare adequate time for the development process?
Management Information Systems, 4th Edition

29. The Electronic Spreadsheet: A DSS Tool
Provide two facilities for building DSS
Preprogrammed functions
Ability to use IF-THEN statements
Most widely used tool
Inexperienced users can use to develop DSSs
Management Information Systems, 4th Edition

30. Geographic Information Systems
Decision aid for map-related decisions
Typical GIS contains:
database of quantitative and qualitative data
database of maps
program to display information on maps
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31. Ethical and Societal Issues Decisions by Machines
Automated decisions can affect individuals
Mortgage companies, credit card companies, employers, banks, etc.
European Protection
“Automated Individual Decisions” Directive
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32. Ethical and Societal Issues Decisions by Machines
Who Needs Protection
Determining creditworthiness
Efficient
Effective
Hidden Injustice
Mistakes on records
Decisions final
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33. Summary
Decisions are made in three steps: intelligence, design, and choice
Structured and unstructured are two types of decision-making techniques and are based on the type of problem to be solved
Decision support systems have typical components
Geographic information systems use certain elements
Management Information Systems, 4th Edition