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What is a decision support system?

By Edited Jun 21, 2015 0 0

            A decision support system, or DSS, is an information-driven computer solution for organizations that has evolved from the Management Information Systems of the 1970's and the subsequent executive information systems of the 1980's. The primary purpose of a DSS is to assist with decision making and analysis by transforming raw data into useful information. A DSS is made up of four main parts.

             The foundation of a decision support system  is the data warehouse,  which stores historical and current data that is available to end users for decision support in real-time. The next component is business analytics. Business analytics facilitate the viewing and manipulation of information stored in a data warehouse and are divided into two groups. Reports and queries make up the first category and the second consists of data, text, Web mining, and various statistical applications. The third element of a DSS is business performance management. Also referred to as corporate performance management, BPM is an evolving group of performance indicators and feedback tools. BPM is closely tied to the reports and queries side of business analytics. The remaining component is the user interface which is usually in the form of a dashboard or corporate portal.

            The primary advantage offered by a decision support system is fast and accurate access to vital business information on demand. Important executive decisions are shaped by the quality and robustness of the DSS available to them. Trends can be identified long before they begin to impact an organization. Long term planning becomes a simpler matter with the capacity for prediction enabled by a decision support system. The most attractive feature for executives is probably the competitive edge gained by using a DSS. While most of the benefits decision support provides are not new or impossible without such a system, the difference is the speed and confidence that they deliver. Companies can adapt to the changing marketplace faster than ever before.

            Management that makes use of a DSS has greater control of their organization. Massive retailers such as Wal-Mart depend on decision support to determine what to stock, how much to sell merchandise for, the most efficient routes for resupply, and countless other administrative factors. Training and education can be streamlined by a DSS and is particularly beneficial for organizations that require precise methods of communicating information, such as medical residency programs. Complex problems resulting from a myriad of conflicting objectives can be broken down into priorities to arrive at an optimal solution when a decision support system is employed. Environmental problems present a good example of such complexity that is being mitigated by organizations using a DSS at the local level all the way up to the Environmental Protection Agency.

            Essentially, a DSS brings greater understanding of the organization to users that rely on it. Having access to a thoroughly fleshed out model along with integrated knowledge extraction, model analysis, and model management results in difficult choices becoming easier to sort out. These powerful tools are a mainstay of information-based organizations and are steadily being adopted by companies of all kinds that wish to remain competitive. Decision support offers growth and improvement to virtually every domain.

            Because of the promise and power of decision support, it is vital that these tools be accessible to the users who stand to profit from them. Managers need to be able to use their organization's DSS with ease to reap the benefits of rapid decision-making. Executives who depend on decision support need it to be adaptable to specific situations that may be unique to their company. Additionally, a DSS must be capable of responding to changes in an organization that stem from growth or innovation. Such innovation and increase will often come about as a result of the use of the DSS and should be accounted for by an agile system.

            Management requires usable information that is self-explanatory. A visual view of a corporation's performance is frequently the optimal method of presenting key performance indicators. A visual interface, such as a dashboard, allows users to quickly understand the relevance and context of information presented by graphs and simulations. A valuable DSS is one that simplifies the process of understanding problems and reaching meaningful solutions. A decision support system should act as a substitute for a human consultant by aiding with comprehension of data as well as offering insight for effective decisions with none of the limitations of a human being.

            Decision support systems have demonstrated their value for decades. Corporations will remain aggressively competitive, leading to innovation of current DSS applications. Advancements in artificial intelligence, forecasting, and analysis will likely result in creative DSS solutions to keep pace with new capabilities. Although much about the future of these systems is unknown, one thing is certain. Decision support is here to stay.



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