The Background Of Decision Support System

Published Date: 02 Nov 2017

Decision support system aids the middle level management to enhance their decision making. The system has its input from the output generated by the operational level of management using the Management Information system.

The input for the Decision Support System is internal information and they are highly detailed. The middle level management is the one that intends to implement the strategic level decisions given the available resources. Decision support system is mainly used for the reporting purposes (McGraw, 2008). Middle level management make semi-structured decisions i.e. management decisions made using the decision support system is not structured compared to the operational level . They are used to make 'on the spot' , un-routine improved business decisions.

Decision support system relies on building scenarios in order to make its decisions. It uses a combination of models, scenarios and information to solve problems also to make its decisions. Information Processed (Output) from the Decision Support System (DSS) are usually less detailed, mainly summary, graphs, charts e.t.c. A functional decision Support system will aid an organization in gaining competitive advantage in its industry as relevant management decisions are made in a little span of time in a more efficient and effective manner, it will also help in efficient management of organizational resources.

Example of such system are spreadsheets and databases.

Example of what can be done with a Decision support systems in a retail business, it can be used to show a comparison of total monthly sales invoices to ensure that a report is produced or generated in order to show if sales target or profit is had been met or achieved, it can also be used to analyse total expenditure in comparison to the budget.

Executive Information System (EIS)

An Executive Information System (EIS) is an information system mainly used by top-level management which provides detailed and relevant information from both internal and external sources. They offer strong reporting capabilities which helps strategic management identify problems and make necessary decisions concerning them, it also help to monitor activities of subordinates at all level and departments

Output from the Executive Information System (EIS) is presented in a easily read and understandable form using the Graphical User Interfaces(GUIs) (Kaniclides & Kimble, 1994) .

The Executive Information System (EIS) brings together in a single system and view data from different departments within a company, different relevant sources (both internal and external). Executive Information System (EIS) gives executive the opportunity to clearly review more information in less time, it helps identify needed decisions and enable it to be carried out within a short period of time which in turns improves management performance

Executive Information System (EIS) also Increases upper management’s span of control as it Increases executives’ ability to monitor activities of the different levels of management. It also helps executives to obtain improved information faster

Expert System

The Expert System (ES) is an information system used by top-level management to aid their decision making process. The expert system is built by simulations of how an expert arrives at a decision. The knowledge bank is built and an interface engine is used to ask a series of questions and based on the answers given ( on the interface), it provides a solution. It helps management make complex decisions within a limited period of time without employing an expert, this in turn reduces the cost of business and increase efficiency and effectiveness in the overall business and decision making process which will in turn give a company competitive advantage in the industry where it operates.

Example of an expert system on a online retail store that deals in cloth making, the system ask specific questions about gender, height, body posture, size e.t.c. On answering these questions, the system brings out a suitable product/dress with will be an exact replica of what would be produced when the dress is made.

Banks use this system to assess mortgage loans, this system collect information from the customers, assess their credit based on the information supplied to the system, this is then used to determine the output based on defined criteria programmed in the system.

An example below shows how Expert system is Implemented in a health care system

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Fig 1.1: Medical Expert System

The main of this Health Expert system is to collect information using the interface through a network on the internet, based on the answers to questions entered into the system, the prediction module makes an expert prediction by going through the patients database to confirm his identify and then go through the patients disease database to match its prediction with previous ailment the after identifying the disease, it then loads the diagnosis module to get the medication and treatment to be used in curing the disease. The output is then gotten through the Interface. The expert system has done exactly what a medical professional would have identified the disease and prescribe treatment.

Enterprise Resource Planning Systems (ERP)

Enterprise Resource Planning Systems (ERP) is a computer system which integrate all information systems within a firm or organization in a singular entity. It is a system that comprises of all modules of operation used by all departments within the organization. Enterprise Resource Planning system (ERP) automates all the activities of a business enterprise in an integrated manner, information from a department that is needed by another department will be automatically available to them.

Enterprise Resource Planning system (ERP) makes the flow of information within departments in an organization or company possible, easy and automated.

Enterprise Resource Planning system (ERP) usually are developed using practice standards for each departmental Modules. Modules that deals with finance and accounting are developed in accordance with relevant accounting and financial standard e.g. The principle of double entry, asset liquidation, Depreciation and Appreciation in value of assets e.t.c. The same goes for the marketing , Customer relationship management, delivery, sales modules e.t.c.

Enterprise Resource Planning system (ERP) do not only handle information or relationship between functional departments within the boundaries of a specific company or firm, it also handles relationship with external stakeholders outside the organization e.g. Agents, Dealers, suppliers, customers, partner organizations, government, e.t.c. This is usually implemented using an extranet.

Enterprise Resource Planning system (ERP) works in real time, and operates a common database for all its applications. The interface of a ERP is always standard i.e. it is the same in all modules

An example of an Enterprise system in a retail business will have the Accounting module , Human resource, Marketing module, sales module, Supply chain management module, Quality control module and the customer relationship module.

The use of Enterprise Resource Planning Systems (ERP) in an organization will bring about fast flow of information within an organization's functional departments and between the organization and its stakeholders. This will speed up decision making process around the organization and will help in effective and efficient use of company resources which will help in reducing cost, save time and the overall efficiency of the entire business process which will in turn give Competitive advantage over competitors.

Management Information System

This is the information system used by lower level management which helps them in making efficiently and effectively decisions for running and performing the day- to - day activities of an organization or company in order to achieve management objectives and goals.

Lower level management deals with the operational processes within an organization, this deals with routine business processes, Data used by the Management Information System are usually Internal i.e. Internal.

The Processes handled by the management Information System are usually structured, they are processes that involves no risk in their decisions as they are structured.

Processed Output from the Management Information system are usually well detailed information, and are passed on to the middle level or tactical level management who handles the decision support system.

Operation of the Management Information are mainly Data entry

Example of a management information system in a Hospital. The system used to collect patients data, used to book and schedule doctor's appoints, used to send reminder mails to patients. e.t.c.