Computer Science Centre University of Indonesia Chapter 1 Introduction to Decision Support Systems...
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Computer Science Centre University of Indonesia Inform ation M anagem ent R ESEA R C H G R O U P Chapter 1 Introduction to Decision Support Systems Mallach, 2000
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Transcript of Computer Science Centre University of Indonesia Chapter 1 Introduction to Decision Support Systems...
Computer Science CentreUniversity of Indonesia
In fo rm ationM anagem entR E S E A R C H G R O U P
Chapter 1
Introduction to Decision Support Systems
Mallach, 2000
In fo rm ationM anagem entR E S E A R C H G R O U P
Discussions
• Definition• Evolution of DSS• DSS position in IS• How all IS can be used for decision
support• Benefits of DSS
In fo rm ationM anagem entR E S E A R C H G R O U P
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 Processing Systems
Transaction Processing Systems
Decision Support Systems
Decision Support Systems
CorporateDatabase
Decision Maker
Transaction User
In fo rm ationM anagem entR E S E A R C H G R O U P
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
In fo rm ationM anagem entR E S E A R C H G R O U P
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
In fo rm ationM anagem entR E S E A R C H G R O U P
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!
In fo rm ationM anagem entR E S E A R C H G R O U P
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
In fo rm ationM anagem entR E S E A R C H G R O U P
Mallach’s DSS Characteristics• Common characteristics:
– 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 non-management 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!
In fo rm ationM anagem entR E S E A R C H G R O U P
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:– 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…
In fo rm ationM anagem entR E S E A R C H G R O U P
Who are the users?
TopExecutives
Middle Managers
Clerical workersExecutiveInf. Sys.
DSS
TPS
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Benefits of DSS
• 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…
