Explain the concept of decision support system. How does it differ from traditional management information system?
Explain the concept of decision support system. How does it differ from traditional management information system?
Ans.
Decision Support Systems
Decision support systems are computer-based information systems that provide interactive information support to managers and business professionals during the decision-making process. Decision support systems use (1) analytical models, (2) specialized databases, (3) a decision maker’s own insights and judgements, and (4) an interactive, computer-based modeling process to support the making of semi-structured and unstructured business decisions.
Comparing decision support systems and management information systems. The differences in the information and decision support they provide are shown in table:
| Management Information Systems | Decision Support Systems | |
| Decision support provided | Provided information about the performance of the organization | Provide information and decision support techniques to analyze specific problems or opportunities |
| Information form and frequency | Periodic, exception, demand and push reports and responses | Interactive inquiries and responses |
| Information format | Prespecified, fixed format | Ad hoc, flexible and adaptable format |
| Information processing methodology | Information produced by extraction and manipulation of business of business data | Information produced by analytical modeling of business data |
Sales managers typically rely on management information systems to produce sales analysis reports based on product line; salesperson, sales region, and so on. A decision support system, on the other hand, would also interactively show a sales manager the effects on sales performance of changes in a variety of factors (such as promotion expense and salesperson compensation).
Therefore, DSS are designed to be ad hoc, quick-response systems that are initiated and controlled by business decision makers.. Decision support systems are thus able to directly support the specific types of decision and the personal decision-making styles and needs of individual executives, managers and business professionals.
Unlike management information systems, decision support systems rely on model bases as well as databases as vital system resources. A DSS model base is a software component that consist of models used in computational and analytical routines that mathematically express relationships among variables. For example, a spreadsheet program might contain models that express simple accounting relationships among variables, such as Revenue Expenses = Profit.
DSS software packages can combine model components to create integrated models that support specific types of decisions. DSS software typically contains models that support specific types of decisions DSS software typically contains built-in analytical modeling routines and also enables you to build your own models.
Example of special-purpose DSS packages.
DSS Packages
Retail: Information Advantage and Unisys offer the Category Management Solution Suite, an OLAP decision support system and industry-specific data model.
Insurance: Computer Associates offers Risk Advisor, an insurance risk decision support system whose data model stores information in insurance industry specific tables designed for optimal query performance.
Telecom: NCR and SABRE Decision. Technology have joined forces to create the NCR Customer Retention program for the communications industry including data marts for telephone companies to use for decision support in managing customer loyalty, quality of service, network management, fraud and marketing.
