Information Systems Analysis 488
Information Systems Analysis 488
Randall E. Louw
1074205
Fall 2002
Index
1. Introduction
o A brief history of Decision Support Systems
o Breeds of DSS
3. The DBMS
o Defining/refining requirements
o Evaluating alternatives
o Vendor selection
8. Conclusion
1. Introduction
DSS provides varying analysis without much programming effort and is usually
directed towards non-technical users/managers. Managers main uses for a DSS
includes searching, retrieving and analyzing decision relevant data to allow them to
summarize main points which assist them in making more informed and educated
decisions. Users often search for correlations between data without rewriting the
underlying MIS or software application and most DSS allows graphic capabilities,
which not only allows trend analysis and reporting for top executives, but also assists
managers in mapping out conjoint analysis and alternative scenarios to answer what
if queries. Consequently, DSS supports both tactical and strategic decisions and are
employed to leverage managers expertise in a certain field.
DSS varies in scope some are intended for multiple users (more common nowadays)
and other are stand-alone units (common in the past). In addition to that, DSS can
take on many different forms and can be used in many different ways, i.e. some DSS
focus on models, others on data and others on communications. 5 The better the
manager understands the different categories, scope and uses of DSS, the better he
will be able to specify requirements for a DSS that he wants to implement or buy.
Thus, in order to comprehend the intricate complexities of what services a DSS can
provide, we first have to look at the stand-alone units that supports the DSS. Although
DSS can be dissected into many different components, I will mainly concentrate on a
few important aspects of its design.
It is a common notion that information can be (and often is) misinterpreted, leading
to inaccurate conclusions which adversely affects the quality of the decision making
process inside an organization (as is humoristically depicted in figure 1).
Figure 1
Managers often postpone difficult decisions and request more information without
really attempting to comprehend the information that is already available to them.
They falsely rely on the assumption that information should give them guidance, in
stead of realizing that their understanding of relevant information will help them
formulate their own ideas, which should be based on both a intricate understanding of
the information, the necessary knowledge available around them and ultimately their
intuition that is develop based on experience. This curvilinear relationship between
information and comprehending information is depicted in figure 2*. The graph
suggests that the quantity of information is only useful up to a certain point,
afterwhich more information becomes redundant/obsolete.
Thus, the user should try to digest the current information available to him/her first
and resist the temptation to seek more information without first understanding the
current information. Only as the user gains new insightsand breakthrough
thinking, additional information should be sought where relevant. To make a good
decision, one needs not only information about the specific instance, but also an
understanding of the domain. In other words, one needs a set of principles, models,
templates or other abstractions. Better understanding enables the identification of what
information is relevant and consequently, less information is required because the
irrelevant components can be ignored. This not only decreases the complexity of the
decision process, but also decreases the processing load on the manager and leaves
him with more time to focus on critical and situation-relevant information segments.
Figure 2*
A successful business makes good decisions, implements them well - and then
learns from the experience and abstractions in order to do better next time. These
abstractions are then re-usable for making new decisions with different
information, facilitating the process of knowledge management and ultimately
enhancing the overall quality of decision making inside the organization.
Unlike information, which often relates only to specific instances, knowledge is
contend-rich and re-usable and should thus be captured whenever possible to
provide a point of reference for future similar scenarios.
Keeping the various distinctions and classifications of DSS in mind, a DSS should be
described in terms of:
The dominant technology component or model underlying the system
Targeted users
Specific purpose
Primary deployment of technology (mainframe, client/server LAN, web-based)
An example: a management team might want a document-driven, inter-
organizational, product design, web-based DSS
3. Database Management (DBMS)
Managerial Decision Systems4 are only as good as the underlying DB supporting it.
Users can manipulate data temporarily and needs special access and/or authorization
to manipulate data in underlying DBS
In order to provide the DSS with the right data, there should be a structure in place for
storage, access, manipulation and retrieval of large amounts of data. The database is
the feeder of the DSS and good database design is thus crucial in improving the
overall performance of the DSS. Database design and management is a complex and
often ill-conceived topic and extends well beyond the scope of this paper.
Consequently our discussion on databases will parsimonious at best. A good DBMS
ensures data integrity, reduces data redundancy, follows a logical sequence and are
consistent in its performance.
Relational databases are in most cases the system of choice when it comes to
designing a DSS. This is primarily because of the flexibility associated with a
relational DB but also because it allows normalization (reduction in data duplication),
which helps with maintenance of a large database. 7 The ability of these databases to
identify relationships between entities makes information analyzes an important
feature to the success of the DSS. Some hierarchical and network databases are still
being used today, but merely so because of the costs involved with migrating to a
totally new DB platform overshadows the maintenance costs of legacy systems even
this is gradually changing as more organizations are putting additional requirements
on their DSS, underscoring the need for a more suitable DB design.
Because the database constitutes such a vital link in the capabilities of any DSS its
structure and design should be carefully evaluated and implemented with due concern
of applications build on top of it. There seems to be a general trend in recent years, to
either migrate to web-based DSS, using a task specific search-engine, or to build the
DSS around a thin client fat server environment, using network and web-based
technologies. This is perhaps a further justification of the need for an advanced
database system since the Internet is the most comprehensive network of thousands of
interconnected databases and web pages.
Information uses and requirements differ at each managerial level. 6 Higher managerial
levels have a greater reliance on external environmental information and to some
degree, less reliance on internally generated information. Top management commonly
use information to make decisions about long term planning and thus analyze long
term trend information to make their decisions (Gore et al, 1984). 3 Also at top-level
decision-making, conjoint analysis are crucial and managers need more information
about risk and uncertainty, potential outcomes (and their likelihood/probability, etc.)
and possible actions to take. At lower management levels, information emphasis is
internally generated and relies on short-term goals. However, reports and analyses
generated by lower management teams are often used in decision-making efforts of
top management, and it is thus crucial that the DSS supports the lower management
just as much as it lends itself to top management. In short, the information needs for
different levels of management are directed towards supervisory functions for lower
management, tactical decision making for middle management and strategic decision
making for top management. See appendix 1 for a more elaborate outline of
information requirements of managers.
Moreover, because the DSS are employed to improve management control, it should
address the primary tasks of management control. These are:
Amongst the many benefits of using a Decision Support Systems, some of the
intangible advantages include:
i. Improved internal control
ii. Better management awareness of internal strength and weaknesses and
external threats and opportunities.
iii. Enhances long term profitability by improving quality of decision
making
iv. Faster response to changes in the business environment
v. Allows managers to record experience and use it in future for similar
scenarios that may arise within the organization. Recorded experience
becomes information once it is used in the managerial decision making
process7 and it is part of a bigger sub-category of MIS called knowledge
management.
Keeping these benefits in mind, it is not surprising that Decision Support Systems has
enjoyed widespread recognition and support over the last decade and are increasingly
being used in companies to enhance their strategic competitiveness within various
industries.
The DSS design and development process involves input from every aspect of the
business process that is going to be affected within the firm. Business executives and
managers should familiarize themselves with DSS so that they can more accurately
communicate their needs and requirements, making it easier for the formulation of
deliverables, outline of capabilities, outcomes, needs, and what decisions should be
supported by the proposed DSS.3 The following steps can be used as a methodology to
evaluate, design and implement a DSS:
1. Firms strategic focus
First and foremost, the organization wishing to deploy a DSS needs to clearly outline
its strategic focus within the industry, with relevant emphasis on future objectives and
the direction in which the firm is moving. This will in turn provide the basis for
information requirements and scalability of the DSS and will give a framework for the
project team charged with designing and implementing the system.
3. Defining requirements
The more the team know about DSS categories, the better they will be able to
fine-tune the specifications of the system and select the appropriate type of the
Decision Support Systems. A multi-disciplinary team approach is necessary
with feedback from all relevant stakeholders who are involved in the
implementation of the DSS. Team members should be made responsible to
communicate with other members of the organization who will be affected by
the selected DSS and they should try to express all the relevant needs from
different players in the firm. It is crucial to elicit buy-in from all individuals
who will use or will be affected by the Decision Support Systems since non-
compliance by some parties might dilute the strength of the system.
Issues to consider:
o What functions will managers perform, now and in the future, with
the DSS?
o What controls and security are needed?
o What are the operational performance requirements?
o What is the design concept
o How does it fit into the current architecture and network layout
Information
Management Level Information Use Requirements
1. External Information,
1. Goal setting e.g. competitor actions,
government regulation,
2. Long-range plans economic factors,
resource availability
Top Management
2. Internal Information e.g.
3. Strategy financial reports, key
exception reports, etc.
3. Long term trends
4. ROI
4. Conjoint analysis
(what if analysis)
1. Definition of objectives 1. Internal information
References