Decision Support Systems (DSS): Concepts, Types, and Applications

Decision Support Systems (DSS)

Overview

Decision Support Systems (DSS) are a class of information systems designed to assist in the process of decision-making within organizations. These systems combine data, sophisticated analytical models, and user-friendly software to support complex decision tasks, especially in situations where problems are unstructured or semi-structured.

• Key focus: Supporting managerial, tactical, and strategic decision-making.

• Components: Data, models, user interface, and supporting software/hardware.

• Applications: Business, healthcare, agriculture, project management, and more.

Key Terms

Definitions

• Problems: Undesirable real or perceived situations that prevent an organization from delivering efficient and effective services to customers.

• Decision: A conclusion or resolution reached after consideration.

• Inference: A judgment made about something after thoughtful examination of a matter.

• Decision Support: A process that uses information to aid decisions, often used in business to help managers make informed decisions. It can also refer to tools that help people with disabilities make choices.

• Decision Making: The process of selecting a particular course of action from those available, based on relevant information and resources. It involves identifying a decision, gathering information, and assessing alternative resolutions.

Humans and Computers: Complementary Strengths

Comparison of Capabilities

• Human Decision Makers:

  • Skilled at seeing patterns and working with incomplete (unstructured) problems.

  • Capable of subtle judgment and intuition.

  • Often unaware of how they perform complex tasks.

  • Good at integrating large numbers of cues.

  • Less efficient at tedious bookkeeping and complex calculations.

• Computers:

  • Superior at pattern recognition in messy, unstructured data.

  • Efficient at integrating large numbers of features.

  • Excellent at tedious bookkeeping and accurate at complex calculations.

Types of Information Systems

Classification and Functions

• Transaction Processing Systems (TPS): Systems that collect and process data about business transactions or events.

• Management Information Systems (MIS): Systems that provide summaries of decision-relevant information to managers.

• Expert System (ES): Computerized systems that exhibit expert-level problem-solving in a specific domain.

• Decision Support System (DSS): Systems that provide automated support for various phases of the decision-making process.

• Executive Information System (EIS): Specialized DSS for executives, focusing on high-level decision-making.

Introduction to DSS

What is a DSS?

• A computer-based information system that supports business or organizational decision-making activities.

• A collection of integrated software applications and hardware forming the backbone of an organization's decision-making process.

• Designed to help make decisions in rapidly changing and not easily specified environments.

• Any computer application that enhances a person or group's ability to make decisions.

Additional info:

• DSS are especially valuable in situations where problems are not routine and require analysis of large amounts of data or the use of complex models.

• They are not intended to replace human decision makers but to augment their capabilities.