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CHAPTER 1
Subject Name: MANGEMENT INFORMATION SYSTEM
FOUNDATIONS OF IS
Subject Code:10IS72
Prepared By: Atul Talukder
Department: ISE
Engineered for Tomorrow
Date: 12 November
2014
Client
So & So Software Pvt.
Ltd
7/23/2014
Date
dd.mm.yy
Descriptor
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Consectetuer Adipiscing
UNIT 6
Decision Support Systems
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Introduction, Decision Support
Trends, DSS
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As companies migrate toward response e-business models, they are investing in new
data driven decision support application frameworks that help them respond rapidly to
changing
market
conditions
and
customer
needs.
Decision support systems are gaining an increased popularity in various domains,
including business, engineering, the military, and medicine. They are especially
valuable in situations in which the amount of available information is prohibitive for
the intuition of an unaided human decision maker and in which precision and
optimality are of importance. Decision support systems can aid human cognitive
deficiencies by integrating various sources of information, providing intelligent access
to relevant knowledge, and aiding the process of structuring decisions. They can also
support choice among well-defined alternatives and build on formal approaches, such
as the methods of engineering economics, operations research, statistics, and decision
theory . They can also employ artificial intelligence methods to address heuristically
problems that are intractable by formal techniques. Proper application of decisionmaking tools increases productivity, efficiency, and effectiveness and gives many
businesses a comparative advantage over their competitors, allowing them to make
optimal choices for technological processes and their parameters, planning business
operations, logistics, or investments.
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 The word decision is derived from the latin root decido meaning to cut off.
 The concept of decision therefore is settlement a fixed intention bringing to a
conclusive result a judgment and a resolution.
 A decision is the choice out of several options made by the decision maker to
achieve some objective in a given situation.
 Business decisions are those which are made in the process of conducting
business to achieve its objectives in a given environment.
The major characteristics of the business decision making are:
 Sequential in nature
 Exceedingly complex due to risks and tradeoffs
 Influenced by personal values
 Made in institutional settings and business environment.
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Information requirements of decision makers
Decision Structure
Information Characteristics
Unstructured
Strategic
Management
Executives and
Directors
Ad hoc
Unscheduled
Summarized
Infrequent
Forward looking
External
Wide Scope
Semi structured
Tactical Management
Business Unit Managers
and self-directed Teams
Operational Management
Structured
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Operating Managers and self- Directed Teams
Prespecified
Scheduled
Detailed
Frequent
Historical
Internal
Narrow Focus
DSS – Decision Support System
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 Decision Support Systems are computer-based information systems that
provide interactive information support to managers and business professionals
duringt he decision making process. Decision support systems use:
1) Analytical models
2) Specialized database
3) a decision maker’s own insights and judgments and
4) an interactive, computer based modeling process to support the making of
semi structured business decision.
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Legacy
Software
Web
browser
Other
Software
User Interface Functions
Hyperlinked Multimedia,3-d Visualization
Components
of a webenabled
marketing
DSS
Model Management Functions
Analytical Modeling, Statistical Analysis
Data Management Functions
Data Extraction, Validation, Sanitation ,Integration and Replication
Operational
Data
Market
data
Sales
data
Data Marts and Other Databases
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Customer
Account
data
MIS – Management Information System
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 Management Information Systems were the original type of information
system developed to support managerial decision making. MIS provide a
variety of information products to managers like:
1) Periodic Schedule Reports
2) Exception Reports
3) Demand Reports and Responses
4) Push Reporting
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OLAP– Online Analytical Processing
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 OLAP enables managers and analysts to interactively examine and
manipulate large amounts of detailed and consolidated data from many
perspective. OLAP involves several basic analytical operations, these are:
1) Consolidation
2) Drill down
3) Slicing and Dicing
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Using DSS
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 Using a DSS involves an interactive Analytical Modeling Process. Using
DSS involves four basic types of analytical modeling activities:
1) What-if Analysis
2) Sensitivity Analysis
3) Goal Seeking Analysis
4) Optimization Analysis
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EIS – Executive Information System
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 EIS are information systems that combine many of the features of
management information systems and decision support systems.
In an EIS, information is presented in forms tailored to the preferences of the
executives using the system.
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Enterprise Portals
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 Portals are for everyone not just for executives
 An Enterprise Information Portal (EIP) is Web-based interface
and integration of MIS, DSS, EIS and other technologies that
gives all internet users and selected extranet users access to a
variety of internal and external business applications and
services.
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Knowledge Management System
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 KMS helps to gather, organize and share business knowledge
within an organization. These knowledge frequently takes the
form of best practices, policies, and business solutions at the
project, team, business unit, and enterprise levels of the company.
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Business and Artificial Intelligence
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 AI technologies are being used in a variety of ways to improve
the decision support provided to managers and business
professionals in many companies.
 AI is a field of science and technology based on disciplines
such as computer science, biology, psychology, linguistics,
mathematics and engineering.
 The goal of AI is to develop computers that can simulate the
ability to think, as well as see, hear, walk, talk and feel.
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AI and Expert System
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 One of the most practical and widely implemented
applications of AI in business is the development of expert
systems and other knowledge based information systems. A
knowledge based information system (KBIS) adds a knowledge
base to the major components found in other types of computer
based information system. An expert system (ES) is a knowledge
based information system that uses its knowledge about a
specific, complex application area to act as an expert consultant
to end users.
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Components of an Expert System
 Knowledge Base
 Software Resources
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Engineered for Tomorrow
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