Transcript Decision Support Systems

Decision Support Systems
Decision- Making and Senior
Managers
Complex, non-repetitive and significant in terms of the
organisational implications
Costs
Markets
Technology
Competition
Decision Making and Senior
Managers
Uncertain Fast Moving Business Environment
 Increased Velocity of Decision Making
 Short Feedback Loops
 Responsive Information Systems
Conflicting Objectives, Uncertainty of Outcome and Lack
of Comprehensive Information
Decision Making and Senior
Managers
• Dangerous to make a prior judgement as to the
information which a decision maker is likely to need.
• “ Since [systems developers] and to a large extent
managers themselves do not know how they make their
decisions ... it would seem sensible to allow the manager
more freedom to build up the information system on a
trial and error basis and to study these systems in the
light of their effectiveness”.
Critisms of Traditional Reporting
Approaches
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Dominated by Financial Control Considerations
Cyclical and Scheduled Reporting
Dominance of Internal Operational Information
Long Feedback loop
Short Termism
Absence of Non Financial Measures
Non Responsive Technologies & Technologists
Poor Support for Work Groups and Departmental
Systems
Critisms of Traditional Reporting
Approaches
• Failure to reflect Changing Corporate Strategy
• Lack of support for Flexible Organisational Structures
• Need to Support Planning, Direction Setting, and
Forecasting
• Existing Reporting Structures Rigid
• Cost Reduction Programmes
Decision Support Systems
• DSS - An attempt by computer professionals and
management scientists to make an important contribution
to the improvement of the managerial function within
organisations.
• A discipline which focuses specifically on supporting
managerial activities
• Components of DSS
– Decision Support Technology, Database, Modelbase and Interface
– Decision Support personnel
• Grew out of the perceived need to develop systems that
could cater for the demands of senior management
Definitions of a Decision
Support System
General definition - a system providing both problemsolving and communications capabilities for semistructured
problems
Specific definition - a system that supports a single
manager or a relatively small group of managers working as
a problem-solving team in the solution of a semistructured
problem by providing information or making suggestions
concerning specific decisions.
The Gorry and Scott Morton Grid
Management levels
Operational
control
Structured
Degree of
problem
structure
Semistructured
Unstructured
Management
control
Strategic
planning
Accounts
receivable
Budget analysis-engineered costs
Tanker fleet
mix
Order entry
Short-term
forecasting
Warehouse and
factory location
Inventory
control
Production
scheduling
Variance analysis-overall budget
Mergers and
acquisitions
Cash
management
Budget
preparation
New product
planning
PERT/COST
systems
Sales and
production
R&D planning
Characteristics of DSS
• Observed characterisitics of DSS which have evolved from
the work of Alter and others include:
• they tend to be aimed at the less well structured
underspecified problems that upper level managers
typically face;
• they attempt to combine the use of models or analytic
techniques with traditional data access and retrieval
functions;
• they specifically focus on features which make them easy
to use by noncomputer people in an interactive mode; and
• they emphasize flexibility and adaptability to accommodate
changes in the environment and the decision making
approach of the user.
Decision Support Systems
• decision focused, aimed at top managers and
executive decision makers
• emphasis on flexibility, adaptability and quick
response
• user initiated and controlled; and
• support for the personal decision making
styles of individual decision makers.
Millions
$12,000
$10,000
$8,000
$6,000
$4,000
$2,000
1992
1991
$0
ABC Corp.
Smith
Corp.
XYZ Inc. 1990
Alter’s DSS Types
Retrieve
information
elements
Little
Analyze
entire
files
Prepare
reports
from
multiple
files
Estimate
decision
consequences
Degree of
complexity of the
problem-solving
system
Propose
decisions
Make
decisions
Much
Degree
of
problem
solving
support
The DSS Focuses on Semistructured Problems
Computer
Solution
Structured
Manager + Computer
(DSS)
Solution
Semistructured
Manager
Solution
Unstructured
DEGREE OF PROBLEM STRUCTURE
Peter Keen Believes That
a DSS Should:
1. Assist in solving semistructured
problems
2. Support, not replace, the manager
3. Contribute to decision effectiveness,
rather than efficiency
DSS Components
DATABASE
Modelbase
User interface
Database Component
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the ability to combine a variety of data sources through
a data capture and extraction process;
the ability to add and delete data sources quickly and
easily;
the ability to portray logical data structures in user
terms so the user understands what is available and can
specify needed additions and deletions;
the ability to handle personal and unofficial data so the
user can experiment with alternatives based on personal
judgment; and
the ability to manage this wide variety of data with a full
range of data management functions.
Contents of the Database are Used
by Three Software Subsystems
• Report writers (including COBOL)
• Mathematical models
• GDSS -- contributes to communications
effectiveness
Model Base Component
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the ability to create new models quickly and
easily;
the ability to catalog and maintain a wide
range of models supporting all levels of
management;
the ability to interrelate these models with
appropriate linkages through the database;
the ability to access and integrate model
building blocks; and
the ability to manage the model base with
management functions analogous to database
management (e.g. for storing etc)
A DSS Model
Environment
Individual
problem
solvers
Report
writing
software
Other
group
members
GDSS
GDSS
software
software
Mathematical
Models
Database
Decision
support
system
Environment
Legend:
Data
Communication
Information
User Interface
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the ability to handle a variety of dialogue styles with
the ability to shift among them at the user's choice;
* the ability to accommodate user actions in a variety
of media;
* the ability to present data in a variety of formats and
media; and
* the ability to provide flexible support for the users'
knowledge base.
Decision Support People
• Interdisciplinary Team - Diverse
Backgrounds
• Strong Interpersonal Skills
• High Levels of Business Awareness &
Understanding
• Strong Modelling and Analysis
Capabilities
• Institutionalised and Ad hoc Analysis
Decision Support Technologies
• Microcomputer Based Modelling and Analysis
• Workgroup Local Area Networks
• "Scrubbing" of Larger Mainframe Based Datasets
• Graphics and Presentation Focus
Eastern
Region FE's
Central
Region FE's
Technical
Teams
Support
Engineers
Western
Region FE's
Decision Support Systems
Examples
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Aer Rianta International
Shell Tankers
Marshall
Waterford Crystal
Others
Long Run Decisions - Capital
Investment Appraisal
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Example: Aer Rianta International
Operations in Russia, Poland, Thailand, Bahrain etc
Turnover £100ml Revenues £7 ml
Airport management
Duty Free
Aer Rianta International
- EUROTUNNEL
Folstone
Calais
•Duty Free Concession until 2000
•10 Million Passengers p.a.
Aer Rianta International
- EUROTUNNEL
EuroTunnel
Passenger Numbers
Opening Hours
Size of outlet
Aer Rianta International
ARI
Personnel
Business Development
Unit
Suppliers
Margins
Lotus 1-2-3
Government
Regulations
Downtown
Outlets
Other ARI
Functions
Duties
Tariffs
Prices &
Volumes
Newspaer &
Journals
On Line
Databases
Short Run
Decision Making and Control
• Example :Shell International Tankers
– Biggest Fleet in the world
– Gas, Crude Oil, Product i.e. Naphtha, Gasoil, Jet Fuel
Shell International Tankers
Traders
Engineering
Superintendants
Performance
Analysis
Excel
Smart
Word
IVMS
Updated Performance
Parameters
Operations
Superintendants
Monthly Management
Accounting
• Example Waterford Crystal
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Profit and Loss
Overhead analysis
Margin Analysis
Cash Flow
Fifty Pages Financial & Non Financial
Other Functions
Quality
The Blue Book
BPCS
Manufacturing
System
Other Functions
Production
Lotus 1-2-3
Keypunch
Printed Trial
Balance
Other Functions
Personnel
Marshall
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Leaders in Servicing Transport Refridgeration
UK Wide Network
Large Market Share
Diverse Customer Needs
Standard Price Card
Details of the Vechiles
and
the Units customer
is running
Agreed
Fixed Price 4 yr
Contract Servicing
Price
Service history
of the units & work
carried out in the
past
Contract
Maintenance
Matrix
1995
Locations &
Estimates of
Travel
Costs
Lotus 1-2-3
Current costs of
Servicing
Servic e History of the
Types of \units Customer
is running
Database of 2,000
units
US Manufacturer
Estimates of lif
of Parts etc
Dept of Health
Analysis of Drug Costs etc
8000 Records
Excel
Quarterly
Updates on
Diskette
GMS Mainframe
Weekly Performance
Measurement
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Cross Functional Measures
Scrubbing of Large Databases
Cross Platform Links
Manual Inputs
Weekly Manufacturing
Report
Marketing
Financial
Performance
Personnel
Headcounts
Lotus 1-2-3
Inventory
Levels
Quality
Measures
BPCS Manufatcuring
System
Outstanding
Orders
General Ledger
System
Budgets
Hard Copy Input
Excel
Floppy Disks
Shared LAN
Files
Populate General
Ledger Budegt Codes
MAPS Market Analysis and Planning System
Demographic Profiles
Catchment Area Analysis
Direct marketing
Performance Evaluation
Others
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Securitisation of Mortages
Capital Investment Appraisal
Branch Profiling
Island Ferry Analysis
Conclusions
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Unsolicited Analysis
Core Business Understanding
Value Added Interpretation and Commentary
Provider of Modelling and Analysis Capabilities
Information Gatekeepers and Data Warehousing
Business Driven Responsive Information Systems
DSS - Multidimensional Activity
DSS - Ad Hoc and Institutionalised
Conclusions
• Formal Feedback mechanisms for DSS Process
• Awareness of Emerging Concepts, SIS, Groupware,
EIS
• Presentation and Interpersonal Skills
• Multidimensional Performance Measurement
• Improved Data Set handling
• Clarity of Role as DSS Personnel