Basic Concepts of Decision Support Systems

Decision Support Systems

Is it morning or evening?

Concepts from: A Framework for Management Information Systems by G. Anthony Gorry and Michael S. Scott Morton Sloan Management Review, 1971

Credited with coining the term decision support system

The most cited article ever published in Sloan Management Review

Stages of Decision Making (From Herbert Simon)

Intelligence (in the military sense of gathering information) Design (Identifying the alternatives, structuring how the decision will be made) Choice (Picking an alternative or making the judgment) [Implementation later added by other authors] [Evaluation]

Structured vs Unstructured Decision Stages

Each stage can be Structured (automated) or Unstructured Structured means that there is an algorithm, mathematical formula, or decision rule to accomplish the entire stage. The algorithm can be implemented manually or it can be computerized, but the steps are so detailed that no little or no human judgment would be needed. Any decision stage that is not structured is unstructured

Structured, Semi-structured, and unstructured decisions

In a structured decision all three stages are structured In a non-structured decision all three stages are unstructured A semi-structured decision is one in which part, but not all, of the decision is structured.

Key point:
The realm of Decision Support Systems is Semi-Structured and unstructured Decisionsthe type of decisions that can benefit from decision support but the human decision maker is still involved.

Thought questions:
How is a DSS different than a Transaction Processing System? (Power: last paragraph on page 8) What does the term MIS mean to you? How does the term MIS relate to DSS?

GSMs Framework
Managerial Activity (Anthony) Operational control Structured Decision Semitype structured (Simon Unstructured Management control Strategic planning

Some Organizing Frameworks and Examples of DSS

Alter (1977, 1980) Category File Drawer Data Analysis Example Equipment monitoring Budget analysis, variance monitoring Sales forecasting based on marketing data Features Simple query and reporting Many data warehouse apps. Capability focuses on Looking up data Looking up data and having it aggregated in some useful way Mathematical model (e.g., regression)

Analysis info. Sys.

DB + small models

Accounting and financial

Representational models

Estimating effect of decisions on financial statements

Risk analysis, production planning

What if

Letting you change inputs to see the effect on outputs

Decision maker providing assumptions to system, system generating a distribution of inputs, then generating a distribution of outputs Decision maker supplies assumptions and system generates best outcome DSS makes recommendation, but decision maker has final say

simulations

Optimization models

Truck route planning, material usage Credit scoring

Algorithms generate optimal solutions subject to constraints Structured processing steps

Suggestion models

Holsapple and Whinston (1996) Five types of DSS

Text oriented DSS DB-oriented Spreadsheet oriented Solver oriented Rule oriented

Hackathorn and Keen (1981)

Personal DSS Group DSS Organizational DSS

Specific problem/organization versus Can you say general DSS generator VISICALC?

General Categories of DSS (From Power, Chapter 1) I squeezed

Data driven Model driven Knowledge driven Document driven Communications driven and group DSS Function specific or general DSS Web Based

Alter to these 3!

DSS categorized by type of task (Jones)

Choice (pick one of several alternatives) Judgment (assessment or prediction) Ranking More complex problem (has multiple, often interrelated, parts) Diagnosis or scientific discovery (hypothesis generation and testing) Pattern identification, sense-making Your fave?

The Components of DSS

External Data

Database Component

Model Component

Internal Data

Communications Component

User Interface Component Users Source Power, Page 17, Figure 1.1

DSS Classification Viewed from three Directions

Decision Task

Technology

Decision Maker(s)