Chapter 7:Enabling the Organization - Decision Making

Decision Support Systems

•Decision support systems (DSS)

–Offer potential to assist in solving both semi-structured and unstructured problems

Solution Types

•Optimization model

–Finding the best solution

•Satisficing model

–Finding a good -- but not necessarily the best -- solution to a problem

•Heuristics

–Commonly accepted guidelines or procedures that usually find a good solution

Problem Solving Factors

•Multiple decision objectives 

•Increased alternatives 

•Increased competition 

•The need for creativity 

•Social and political actions 

•International aspects 

•Technology 

•Time compression

Characteristics of a DSS (1)

•      Handles large amounts of data from different sources

•      Provides report and presentation flexibility

•      Offers both textual and graphical orientation

•      Performs different types of analyses

–     “What-if” analysis

•      Makes hypothetical changes to problem and observes impact on the results

–     Simulation

•      Duplicates features of a real system

–     Goal-seeking analysis

•      Determines problem data required for a given result

•      Supports drill down analysis

•      Performs complex, sophisticated analysis and comparisons using advanced software packages

•      Supports optimization, satisficing, and heuristic approaches

Goal Seeking Example

•      You know the desired result

•      You want to know the required input(s)

•      Example:

–     Microsoft Excel’s “Goal Seek” and “Solver” functions

Capabilities of a DSS (1)

•      Supports

–     Problem solving phases

–     Different decision frequencies

•      Highly structured problems

–     Straightforward problems, requiring known facts and relationships.

•      Semi-structured or unstructured problems

–     Complex problems wherein relationships among data are not always clear, the data may be in a variety of formats, and are often difficult to manipulate or obtain

Integration of TPS, MIS, and DSS

•      In many organizations they are integrated through a common database

•      Separation of DSS transactions in the database from TPS and MIS transactions may be important for performance reasons

Web-Based  Decision Support Systems

•      Web-based decision support systems

–     Decision support system software provides business intelligence through web browser clients that access databases either through the Internet or a corporate intranet

Components of a DSS

•      Model management software (MMS)

–     Coordinates the use of models in the DSS

•      Model base

–     Provides decision makers with access to a variety of models

•      Dialogue manager

–     Allows decision makers to easily access and manipulate the DSS

Model Base

•      Model Base

–     Provides decision makers with access to a variety of models and assists them in decision making

•      Models

–     Financial models

–     Statistical analysis models

–     Graphical models

–     Project management models

Advantages and Disadvantages of Modeling

–     Advantages

•      Less expensive than custom approaches or real systems.

•      Faster to construct than real systems

•      Less risky than real systems

•      Provides learning experience (trial and error)

•      Future projections are possible

•      Can test assumptions

–     Disadvantages

•      Assumptions about reality may be incorrect

•      Accuracy of predications often unreliable

•      Requires abstract thinking

Group Decision Support System

•      Group Decision Support System (GDSS)

–     Contains most of the elements of DSS plus software to provide effective support in group decision-making settings

Characteristics of a GDSS (1)

•      Special design

•      Ease of use

•      Flexibility

•      Decision-making support

–     Delphi approach (decision makers are geographically dispersed)

–     Brainstorming

–     Group consensus

–     Nominal group technique

•      Anonymous input

•      Reduction of negative group behavior

•      Parallel communication

•      Automated record keeping

•      Cost, control, complexity factors

Components of a GDSS and GDSS Software

•      Database

•      Model base

•      Dialogue manager

•      Communication capability

•      Special software (also called GroupWare)

•      E.g., Lotus Notes

–     people located around the world work on the same project, documents, and files, efficiently and at the same time

Decision Room

•      Decision Room

–     For decision makers located in the same geographic area or building

–     Use of computing devices, special software, networking capabilities, display equipment, and a session leader

–     Collect, coordinate, and feed back organized information to help a group make a decision

–     Combines face-to-face verbal interaction with technology-aided formalization

Wide Area Decision Network

•      Characteristics

–      Location of group members is distant

–      Decision frequency is high

–      Virtual workgroups

•      Groups of workers located around the world working on common problems via a GDSS

Executive Support System

•      Characteristics

–     A specialized DSS that includes all the hardware, software, data, procedures, and people used to assist senior-level executives within the organization

Characteristics of ESSs

•      Tailored to individual executives

•      Easy to use

•      Drill down capabilities

•      Support the need for external data

•      Help with situations with high degree of uncertainty

•      Futures orientation (predictions, forecasting)

•      Linked with value-added business processes

Capabilities of an ESS

•      Support for

–     defining overall vision

–     strategic planning

–     strategic organizing and staffing

–     strategic control

–     crisis management