DECISION SUPPORT SYSTEM 9
Adecision support system (DSS) refers to a computer program thatprovides assistance, analyzes business data and shows it in a waythat users can make decisions quickly. It uses statistical techniquesto assemble valuable information and applies rules to make choices(McCosh, 2011). The information that decision support systems analyzeinclude comparative revenue figures between different periods as wellas projected figures. DSS presents information in graphical form andincludes artificial intelligence.
Decision-makingis a complex process that is faced with rapid change and risks whileconsulting managers. The complexity involved requires electronicsupport of managerial decision making. In early 1990s, majority ofthe software developers invented decision support programs thathelped managers make decisions wisely (Holsapple et al., 2012).However, some of the vendors generalized these programs while othersregarded them as unrealistic. They continued to develop digitalsupport systems that have been of assistance to date.
Today,most of the businesses refer DSS as automated management informationsystems developed to assist managers solve issues concerning theorganization. Improved support systems lead to a smooth flow ofoperations. DSS has been identified as a valuable tool for most ofthe businesses (McCosh,2011).An organization should understand the structure and nature ofdecision support systems. There are numerous components to beobserved before discussing what these support systems will enhance.One of the key elements is data collected by managers that help inmaking decisions. The other element is the process used to analyzethe data and finally evaluation process (Holsappleet al., 2012).The process identifies whether data used is correct and if it isnecessary to change the method being used in order to come up withthe right decision. These elements should show similarities with thedecision made.
Decisionsmade by electronic support systems are categorized according to thelevel of structures used during the process. Official decisions aresupported by DSS. They are decisions in which all the elements data,process and evaluation are identified (Janakiraman& Sarukesi 2009).Formal decisions are made in day to day activities of theorganization, and they allow for comparison around the decisionmakers. In addition, they use a form to ensure that all the necessaryinformation is used in the process. It also assists in ensuring thatthe process runs efficiently without being affected by the absence ofany appropriate data. Most companies have established computerizedsupport programs that help correct any problem that may occur duringthe process. These programs assist in combining the data thusproviding high levels of consistency.
Theuse of computerized programs has to a greater extent reduced thechances of errors during the decision-making process (Holsappleet al., 2012).Organizations hiring workers without experience provides guidelinesand education to ensure that they are familiar with the programs. Theworkers are encouraged by ensuring that the decision-making processis flexible. Structured decisions ensure that the responsibility ofmaking decisions is shifted to the organization as a whole and not anindividual.
Theother type of decisions supported by decision support systems is theinformal decisions. The elements differ in nature, and each decisionmaker uses unique data and process. Unlike the structured,unstructured decisions have only a few experts who are responsiblefor decision-making. It does not allow the process of decision makinga flexible activity to all members of staff in the organization. Inmost cases, they are applicable in instances where the businessenvironments are complex. For example, making decisions related tocost of raw materials, customer response, introduction of newproducts and the marketing approach to adopt among others(Janakiraman& Sarukesi 2009).The primary focus is on personnel who make these decisions becausethey are considered of value to the organization due to theirexpertise and thus entrusted with the responsibility of makingdecisions. Today, these experts use computerized support systems thatmake their work easier and presentable.
Majorityof support systems have a series of questions relating to aparticular decision (McCosh,2011).After the systems are fed with appropriate information, the data isprocessed, and the results presented to decision makers with the bestpossible choice. The benefit of unstructured decisions is that theyprovide managers with the best decisions that have been evaluated byexperts. Decision support systems have been modified to solve complexbusiness issues such as marketing strategy, product planning as wellas portfolio management. They also document these processes forreview in the future.
Thethird conclusion supported by DSS is semi-structured decisions. Mostdecision makers consider this type of decision as the best. The threefundamentals elements data, process and evaluation are similar. Inaddition, they allow some level of individual judgment while makingdecision. They allow for adjustments in the processes and the dataused (Holsappleet al., 2012).While identifying the support system to adopt, manager`s limitationsto making the decisions should be considered. It includes evaluatingthe three elements. Research shows that both structured andsemi-structured decisions have more harm than good while used insmall organizations (Power,2012).This is due to technology limitation.
Smallbusinesses need tailored automated systems that best fits the qualityof their decisions. The workforce resources are limited and henceunstructured and semi-structured decisions are not applicable insmall companies. For instance, a car wash organization does not needa decision support system. It would be costly to invest in such aninvestment. Therefore, managers in these companies need DSS toolsthat do not demand much of their resources. In circumstances wheresmall companies adopt DSS in their operations, appropriate softwareshould be used (Power,2012).The software includes spreadsheets and quick books. The customizedelectronic support systems enable managers of small organizations tomanage their business through guidance. Further, they supportmanagerial decision making by proving systems that allow fasterprocessing of data.
Decisionsupport systems perform three vital functions. The first function isinformation management. It allows for data storage and reporting.Information is made available to users when needed (Janakiraman& Sarukesi 2009).The other function is data quantification. This is the process ofanalyzing information to come up with the best alternative. Modelmanipulation is the third feature of DSS. Research are conducted toanswers the “what if” questions as well as allowing foralternatives choices. There are numerous considerations that shouldbe in place when an organization commits to using DSS. First,businesses should ensure that they have established a decisionsupport system before purchasing software and computer systems(Janakiraman& Sarukesi 2009).The other consideration is whether employees are willing to puteffort in ensuring the success of these support systems in theiroperations. It is of no use having automated support systems in thebody, yet there are no experts to run them effectively.
Automatedsupports systems help make a decision in a wider perspective. One ofthe crucial premises of electronic support system is that they allowmanagers to make critical decisions. In addition, automated supportsystems assist managers in making decisions that are within thesystems (Holsapple et al., 2012). They improve the efficiency andeffectiveness of decisions in the organization. Research shows thatmost of the organizations have adopted these digital support systemsin their operations for example monitoring of activities in theorganization. Nowadays, managers use the programs to create reports,forecast the outcomes as well as presenting the results. Further, DSShas proved a success in allocation of resources, giving estimates andevaluating scenarios (Power, 2012). Scorecards are used by managersto track business activities and offering advice and guidance toworkers in the organization.
Theprocess of decision-making is complicated and the rate of makingthese decisions has increased. Information is bulky and by the timeit is needed for making necessary courses of action, it has alreadybeen distorted. Complex decisions call for sophisticated decisionsupport systems that help solve the issues in a simpler way as wellas giving fact-based decisions (Janakiraman & Sarukesi 2009).Research shows that correct electronic support systems enhance theefficiency of these decision-making processes. In particularcircumstances, managers require quick decision reports.
Electronicsupport systems help simplify data by making use of materials neededand thus timely decision reports (McCosh, 2011). Majority of theorganizations make use of the current technology that assist themmake relevant and meaningful decisions. Managers perform better whenthey use relevant information where it is needed. It means thatautomated support systems utilize and organizes knowledge. Managersact as independent contractors who are free to analyze and retrieveinformation in order to consolidate facts and make accurate decisionsfor the well-being of the company.
Despitethe success, there is the presence of decision-making bias thatrequires a decision support system. The primary objective of buildingdecision support systems is reducing these errors. The bias may arisewhen first-hand information is collected. Managers may misinterpretthe data when analyzing. They tend to use the current data collectedand ignoring the historical information. Decision-making environmentsneed to be changed and create improved decision support systems(Power, 2012). The decision-making errors can be reduced by creatingcomputerized systems that will help improve the quality of decisions.
Technologybecomes outdated fast. Electronic support systems use sophisticatedinformation that requires technological knowhow to understand thesesystems. It is also important to educate the members of staff on howto use these computers to enhance the cohesiveness in theorganization (Janakiraman & Sarukesi 2009). Technology skillswill help while feeding data into the computer and during processingwhere one uses specific software to get results. Employees should beable to operate their computing devices from their workstations atease. In addition, digital software is changing rapidly, and newimproved versions are developing now and then. Managers should befamiliar with the software that they use for their jobs. Decisionsupport systems are expanding globally and thus managers shouldensure that they are up to date with the technology advancement andassist in designing these systems (Holsapple et al., 2012).
Itis of importance to state that managers should be well informed onthe benefits and risks associated with implementing electronicdecision support systems in their organizations. The benefit ofsupport systems is that they can help solve problems (Power, 2012).Contrary, they can create problems in the organization. Decisionmakers should help support these systems, make decisions as well asimplementing choices. Managers are tasked to ensure that the membersof staff acquire new skill and knowledge to cope with the evolvinginformation technology.
Researchshows that organizations that use automated decision support systemsmake informed decisions. Some companies develop systems withoutputting into consideration the consequences of their actions. It isimportant to scrutinize the policies before implementing to ensurethat appropriate expertise is in place (Holsapple et al., 2012).Decision makers should understand the need for electronic support ofmanagerial decision making because they help workers perform theirroles better. In general, learning how, what and why use thesesystems is challenging to the team. The intentions and purpose ofthese digital support systems should be well explained to thedepartmental heads to ensure uniformity in operations within theorganization.
Managersshould understand the need for automatic support of managerialdecision making because there is a lack of clarity in theirapplication. It is important for all the employees in theorganization to familiarize with information technology to enhanceefficiency in decision making (Holsapple et al., 2012). Most of theinformation is lost while processing and majority of the decisionsare not fact based. These issues are addressed by employing andtraining people working in an organization with the required skilland knowledge. Moreover, the information needs have increased hencemanagers should be able to get and use available information in abetter way (Janakiraman & Sarukesi 2009).
InformationTechnology experts should ensure that they provide relevantinformation for management decision making. The information providedto managers using DSS allows for their independence. It means thatthey can formulate their reports by analyzing and interpreting it ina way that will help solve the issues in the organization (Power,2012). Further, due to globalization of business activities, it isimportant to automate support systems so as to make real and betterdecisions. Research shows that digital systems help organizeknowledge. This knowledge helps managers and decision makers tobetter understand the barriers and constraints related to thesesystems. It helps them develop more advanced support systems. Thestudies of decision support systems have better career opportunities.
Holsapple,C. W., Whinston, A. B., Benamati, J. H., & Kearns, G. S. (2012).Decisionsupport systems: A knowledge-based approach.Minneapolis: West.
Janakiraman,V. S., & Sarukesi, K. (2009). Decisionsupports systems.New Delhi: Prentice-Hall of India.
McCosh,A. (2011). Commentson ‘A Brief History of DSSemail to D. Power, Oct 3, 2011 Retrieved fromhttp://dssresources.com/history/dsshistory.html
Power,D. J. (2012). Decisionsupport systems: Concepts and resources for managers.Westport CT: Quorum Books.