Chapter Decision Support Systems And Business Intelligence

The business pressure-responses-support model an be divided into three components: business pressure that result from today’s business environment, actions taken by company to response the pressures and computerized support that facilitates the monitoring of the environment and promote the response actions taken by organizations. Business environment factors,lunging markets,consumer demands,technology and societal factors, has created opportunities and threads for organizations which then will take different actions to be competitive.

These actions, facilitated by computerized ADDS, include employing strategic planning, using new business model, et al.

Making good sections mean managers can better perform their roles with assessable information and computer support. There is three major managerial roles within the organizations: interpersonal, informational and decisional. Interpersonal roles allow the manager to Interact with employees for organizational goals. Figurehead, leader and Laszlo are three roles that listed under Interpersonal roles.

The Informational roles are the roles that a manager can create and share knowledge to organization. These roles include monitor, dissemination and spokesperson.

The decisional roles involve the process of decision making by using information and include the entrepreneur, disturbance-handler, resources-locators. To make better decision, managers take four steps which Include define the problem,construct a model that describe the real world problem,leniently possible solutions to the modeled problem and evaluate the solutions and compare,choose,recommend a potential solutions to the problem.

The high penetration of computerized system in complex and wide managerial areas has made manager awarded of the importance of computerized support in decision making. Today’s computer application focuses on problem analysis and solution application.

Computer decision support system benefits session support through speedy computations, Improved communication and collaboration, et al. Thus, It enables the decision maker to make better, quicker and accurate decisions.

Gory and Scott Morton have created the classical framework of computerized decision support system with two dissensions-the degree of seductresses and the type if control. The different levels in an organization have different decision making. Decisions can be structured, constructed and unstructured. Structured decisions are the decision at the operational level of the organization and routine tasks, such as manufacturing. Unstructured decisions are at he problem are structured and others are unstructured. Strategic planning, management control and operational control are there elements of the framework.

Strategic planning involve defining long term goals and policies for resource allocation. Management control is the efficient use of resources to accomplish organizational goals,while operational control is the efficient and effective nonproliferation of specific tasks. To support decision making, automated decision system (ADS) is a new choice to provide solution to repetitive management problems. Take case 1 as an example, Again food stores apply ADS for price decision, allowing Again food stores to handle a large amount of data and automate pricing schemes.

Type of decision Computer support Structured decisions Standard computerized quantitative methods Unstructured decisions Constructed decisions Management science (MS) approach 1. Define the problem 2. Classify the problem into a granddad Gregory. 3. Construct a model that describes the real-world problem 4. Identify possible solutions to the rendered problem Inca evaluate the solutions. 5. Compare, choose, and recommend a potential solution to the problem. Decision support system is a computerized system to support decision making in an organization.

For instance, Galaxy Smith Kline, a global pharmaceutical company, employs decision support system to improve inventory decision through analyzing optimal satisfy stock level. The architecture of ADDS has four components, which are data, model that manipulate data related to specific situation, knowledge and user interface. Model-oriented ADDS and data oriented ADDS are types of ADDS. Model- oriented ADDS are used to create proper solution to a problem, while data oriented ADDS are used to support ad hoc reporting and queries.

Business intelligence is developed to enable interactive access to data, to enable manipulation of data, and to vive business, managers and analysts the ability to conduct appropriate analysis. By using various tools and technology to collect data, business intelligence is data anyways process for presenting information to help manager to make better business decisions. Similar to the architecture of ADDS, Bal architecture is make up of a authoresses, business analytics, business performance management and a user interface.

Authoresses store historical or current data that end users can access to with analytical tool. Furthermore, business performance management monitor key reference indicators, which then will be presented in dashboards or portals that can be accessed by users. Apart from this, Bal brings tangible and intangible benefit, such as timely providing accurate information that important for decision making. The similarities and differences between Bal and ADDS are summaries as follow.

Similarities and differences between Bal and ADDS ADDS Organization size Appropriate for large organizations Polarities to any type 01 organizations Architecture Authoresses,business analytics,business performance management and user interface Data, model that manipulate data related to specific situation, knowledge ND user interface Decision support Indirectly support decision making Directly support specific decision making System orientation Executive and strategy orientation Oriented toward analysts System construction Commercially available tools and components that are fitted to the needs of organizations Solutions to very unstructured problems The development of methodologies and tools Software companies Academy world Tools Similar to ADDS Similar to Bal 2. Decision making, systems, modeling, and support Decision making has several characteristics. Changing environmental factors may affect decision making quality by posing pressure to managers. Involving appropriate methodologies and tools to assist decision making is curial. In term of the contrast between decision making and problem solving,four phrase decision process is used to distinguish them.

The four phrase are intelligence,design,choice,and implementation. In addition, decision style, the manner in which manager make decision, is vital to consider in decision making process. Different decision styles require different computer supports. A decision made by group is more complicated and is appropriate to medium size to large organizations in which collaboration mongo individuals is more difficult. Hence, computer support should be provided at a board levels. Low managerial levels and small organizations often make individual decisions which will be automated finally. Web-based MS can support group and individual decision. A model is three dimensional and has three types that summarized as follow.

Model Characteristics Iconic models A physical replica of a system Three dimensional Analog models A symbolic representation of reality Mental models Descriptive representations of decision-making situations that people think about Mathematical models Perform numerically with mathematical or other quantitative models More abstract models Following decision making process is important and there are four phrases of the decision making process, including intelligence, design, choice, and implementation. In the intelligence phrase,decision makers began by identifying problem through data collection and analysis based on current situation. Problem then will be classified according to degree of structures. Complex problem even will be divided into subprograms which are easier to solve.

The authority to solve the problem will be assigned to someone or some group who have ability to solve. After defining the correct problem, understanding the problem and testing solution assist in building model to represent reality. A model representing the system is constructed based on the identified variable and their relationships. The model includes normative model and descriptive model. Normative model describe models in which the chosen alternative is the best of all possible alertness. To find the best alternative, optimization process is involved to test all alternatives and consider the impact of each alternative on the entire organization. However, the process may be time consuming, expensive and complicated.

Different to optimization process, subpopulation process aggregate other department into simple model components so that the decision is made without considering other part of the organization. In respect of the descriptive model, this model is a mathematical model that demonstrate the things as they are or as they are believed to be. The choice phrase will evaluate and introduce a proposed solution which will be applied to a model if it is reasonable. Many search approaches, such as analytical techniques, will be used to search for an appropriate solution. The implementation phrase will execute the elution to solve the real problem. Sacrificing is a form of subpopulation. Let is difficult to get a best solution with normative model or descriptive model.

Due to bounded rationality,humans rational thinking may not produce a solution that are rotational for real world problems. Phrase Computerized decision support Intelligence Data al Design Choice Management science,SEES,SEES,et al Implementation 3. Decision support systems concept, methodologies, and technologies:An overview Decision support system was originally developed to support the constructed and unstructured decision making. Its applications has their own databases and solve a ethos are applied to identify and report problem. Hence,model is critical to be included in ADDS. According to ASS SIGHS classification, ADDS is classified into the five categories. Different kinds of ADDS provide support for all phrases of decision making process.

ADDS Characteristics Communications-driven and group ADDS Use computer collaboration, and communication technologies Support groups in tasks that may or may not include decision making Data-driven Processing data into information and presenting the information to a decision maker Document-driven ADDS Rely on knowledge coding, analysis, search, and retrieval for decision support Knowledge-driven ADDS, data mining, and management SEES applications Involve the application of knowledge technologies to address specific decision support needs Model-driven ADDS Primarily developed around one or more optimization or simulation models Compound ADDS Includes two or more of the major cater- gorier Wholesale and Winston classified ADDS into six types, including text oriented ADDS, database oriented, spreadsheet oriented ADDS, solver oriented ADDS, rule-oriented ADDS, and compound ADDS.

Other ADDS categories are as following. Characteristics Nature of the decision-making problem Institutional ADDS al with decisions off recurring nature Ad hoc ADDS deal with specific problems that are usually neither anticipated nor recurring what level within the organization they support Personal support An individual user performing an activity in a discrete task or decision Group support a group of people,all of whom are engaged in separate but highly interrelated tasks Organizational support Organizational tasks or activities involving a sequence of operations, different functional areas,l possibly different locations, and mass- Sieve resources. Whether they support individual work or group work Individual support system pirate with all participants in the same room, at the same time deployed over the web and are designed to operate in anytime/anyplace mode how they are developed Custom made system Custom made for individual users and organization. Ready made system Build generic ADDS that can be used in several organization The components of decision support system are a data management subsystem,a model management subsystem, a user interface subsystem and a knowledge based management subsystem. The communication between components based on the internet technology. Web browser function as user interface. Components

Characteristics Data management subsystem A database that contains relevant data for the situation and is managed by software Model management subsystem A software package that includes financial, statistical or other quantitative models that provide the system’s analytical capabilities and appropriate software management User interface subsystem A system that the user communicates with and commands the ADDS knowledge based management subsystem Support any of the other subsystems or act as an independent component Data management subsystem include ADDS database, DB’S, data directory and query facility. ADDS database extract data from internal data, external data and private data. Database management system create, access and update database. It provides capabilities, such as update data records and files; trace data use with the ADDS, et al. The query facility access, manipulates, and query data while the directory is a catalog of all the data in a database.