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Management Information Systems
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Structure: 10.1 Introduction Objectives 10.2
DSS and EIS
When should you use the decision support approach ? 10.2.1 10.2.2 10.2.3 10.2.4 Ill structured problems How DSS are Deployed Capabilities of DSS Self Assessment Questions (For Section 10.2)
10.3
Components of DSS 10.3.1 10.3.2 10.3.3 10.3.4 Data Management Subsystem The model Management Subsystem The Dialog Management Subsystem Self Assessment Questions (For Section 10.3)
10.4
Classification of DSS 10.4.1 10.4.2 10.4.3 10.4.4 10.4.5 10.4.6 Data Access Systems Data Analysis Systems Forecast-Oriented Data Analysis Systems Systems Based on Accounting Models Systems Based on Representational Models Systems Based on Optimization Models
10.5
Building a decision support system 10.5.1 10.5.2 10.5.3 10.5.4 10.5.5 DSS Technology Who builds a DSS How DSS are developed Developmental trends in DSS Self Assessment Questions (For Section 10.5)
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10.6 10.7 10.8 10.9
Executive Information Systems Organisational aspects of DSS and EIS Summary Terminal Questions
10.10 Multiple Choice Questions 10.11 Answers to SAQs, TQs and MCQs
10.1 Introduction
With this unit, we shall start with the concept of Decision support system. We begin by discussing how it supports the management and organization. We shall conclude by the organizational aspects of DSS and EIS. Objectives: At the end of this unit, you should be able to When DSS could be used in the organization What are the capabilities of DSS What are the various components of DSS How DSS are deployed How EIS differs from DSS
10.2 When should you use the decision support approach ?

Decision support systems offer managers a package of capabilities for prompt and flexible access to data and to models that work with the data to produce needed information. These systems vastly expand the abilities of knowledge workers to make decisions concerning ill-structured problems. The hallmark of DSS is flexibility. Decision support systems are a type of MIS that represent a distinct approach to computerized support of managerial decision making. The
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approach was articulated in the early 1970s by Michael Scott Morton and has since become a broad area of information system practice and research. As stressed by another pioneer in the area, Peter Keen, the use of DSS in a firm that previously relied only on management reporting systems is a form of innovation, since entirely new capabilities are now available. Decision support systems are interactive information systems that assist a decision maker in approaching ill-structured problems by offering analytical models and access to databases. The development of these systems arose from dissatisfaction with the rigidity of reporting systems that defined the early MIS environment; thus, their hallmark is (or should be) flexibility. Personal DSS should be easy to develop-end-user-oriented tools should be at hand for the purpose. An organizational DSS, used throughout an enterprise, should be developed in a disciplined fashion. All DSS should be easy to use in the way that best supports the cognitive style of the individual decision maker. We can therefore think of a DSS as a set of capabilities: within its area of application, such a system should give its user a way to use models and databases in an interactive session that best supports his or her way of thinking about the problem at hand. In a way, DSS steer a middle course between the severe limitations of management science models, where a number of unrealistic assumptions may have to be made, and management reporting systems, which make their user do most of the analysis and the relating of various items of information to each other. 10.2.1 Ill structured problems What type of management decisions need DSS support' Expanding Simon's categorization of problems that have to be dealt with by people in organizations, and following the work of Andrew Garry and Michael Scott Morton we arrive at the categories of problems shown in table below.
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TYPE OF PROBLEM
EXAMPLES OF PROBLEM AREAS
CHARACTERISTICS
HOW DECISIONS ARE MADE
Structured
Order validation Inventory reorder
Availability of an algorithm {standard operating procedure) Programmable aspects present
Fully computerized (TPS or MRS) Human decision maker supported by computer
Semistructured
Sales forecasting Budgeting Risk analysis Promotion of personnel Introducing new technology
Unstructured
No standard procedures or aspects available
Principally by a human, with some computer support
As we can see, the principal domain of DSS is support of decision making for semi structured problems, where parts of the decision process itself often require very significant computer support. This is so because a model (in some cases containing hundreds of equations) has to be applied against a database often comprising millions of data items, with human judgment injected at critical junctures. Unstructured problems, often stemming from leading and organizing activities, are in some cases supported by DSS in minor aspects; and in certain cases, a DSS may be employed for easy access to data. Decision making to solve unstructured problems is now also supported by expert systems, but within narrow domains such as, for example, a decision regarding loan approval. Other systems that do not support the decisional aspect of this process assist the organizational aspect by bringing the collective wisdom of a group to bear on the problem through office information systems. In ill structured both semi-structured and unstructured-problems, the exploration of alternative solutions cannot be completed before a choice
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must be made. Decision making in this problem environment is more typical in the work of middle and higher management; we should stress, however, that such problems occur at all three managerial levels, and therefore, the use of DSS applies to operational, tactical, and strategic organizational levels. When we say that one of a manager's principal tasks is to deal with ambiguity, we mean that he or she will be called upon to solve many illstructured problems. In the systems-theoretic sense, if an ill-structured problem is treated as structured and approached wholly with the aid of management science models without significant intervention from a human decision maker, then the open system being described is reduced to a closed or relatively closed system because most of the environmental factors are ignored. The use of a DSS makes it possible to include a variety of these environmental influences and thus ensures a more realistic open-system approach to problems. 10.2.2 How DSS are Deployed To make all this more tangible to you, let us consider a few brief examples of DSS application. Let us consider five different sample arenas of DSS application. These should give us insight into what a DSS can do for us. 1) Firestone Rubber & Tire Company of Akron, Ohio built a DSS to assess the best strategy for rolling out a new brand of tires. The system permits analysts to look for relationships between past financial results and external variables, such as total car production and gross national product, and thus build sales forecasting models. Using the system containing these models, the Firestone analysts were able to rapidly build for the corporate vice-president of technology a database on all 200 competitive brands of tires, including data on their construction, tread, volume, and sales estimates. The executive used
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this database to assist him in finding a competitive strategy. The system enabled the organization to integrate the technological and financial aspects of a product decision and thus create a basis for joint decision making by the company's various functional areas. The availability of this system conferred a competitive advantage on Firestone. 2) Houston Minerals Corporation was considering a joint venture with a petrochemicals company to build a chemical plant. Using a DSS generator-a system for building DSS-the planning staff of the company built ill a few days a DSS projecting the risks of the venture, taking prices, supply, and demand into consideration. The results suggested that the project would have a positive outcome . However, the executive vice-president responsible for the decision requested an answer to the question: "What is the chance that this project will result in a disastrous outcome'" In the words of the company's chief planner: "Within twenty minutes, there in the executive boardroom, we were reviewing the results of his "what-if" questions. Those results led to the eventual dismissal of the project, which we otherwise would probably have accepted. Thus, a DSS enabled the decision maker to bring his judgment to bear on the problem; this judgment was fully supported by the information made available by the DSS and by the insight of planners that went into the construction of the model. 3) A portfolio manager of a large pension fund is responsible for investing billions of dollars in assets. A huge variety of investment vehicles with varying degrees of risk and reward are available at all times, and the funds are at all times placed in a complex array of investments. The manager needs to make constant investment decisions consistent with
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the objectives of the fund, with a variety of environmental factors, and with her or his experience and informal information. Certain aspects of this work can be handled by expert systems that suggest decisions. However, overall risk analysis with the use of a DSS permits the manager to balance various forms of investment and spread the funds over a variety of investments. 4) A DSS for police-beat allocation was built for the city of San Jose, California. An officer could display a map on a VDT and call up for each zone the data showing police calls for service, service times, and activity levels. The officer could experiment with various alternatives involving the assignment of police patrols by interacting with the system. The system became a tool that helped its users to exercise their judgment. An experiment was run to compare an assignment made by an officer using the DSS with an assignment made by a linear programming model that did not rely on human judgment. The officer-DSS team arrived at a superior solution. 5) As the utilization of a DSS assisting the navigators of vessels on the lower Mississippi River increased, the number of accidents on this once extremely dangerous waterway decreased precipitously. The system simulates the traffic of the vessels in the area by dead reckoning; it updates the vessels' positions from their original locations by considering the direction and speed of their movement-with all the initial information radioed in by the ships' navigators. The Coast Guard personnel use the system by watching blips on their consoles, which resemble air traffic control displays. They alert navigators to developing situations of undue proximity to other vessels by radio communication, and accidents are thus prevented.
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10.2.3 Capabilities of DSS DSS have several features to offer in the general information system environment of an organization. Specifically, DSS can: 1) Support decision making in ill-structured situations-in which, precisely owing to the lack of structure, problems do not lend themselves to full computerization, and yet do require computer assistance for access to and processing of voluminous amounts of data. 2) Help to rapidly obtain quantitative results needed to reach a decision. We can construct a DSS model much faster than we can do modeling with other MIS components, and the model can be flexibly deployed with data as needed during the decision-making process. 3) Operate in the ad hoc (as needed) mode to suit the current needs of the user, as opposed to operating in a generally scheduled fashion as management reporting systems do. 4) Support easy modification of models, which increases the
organization's responsiveness to the changing environment both within and outside an organization. 5) Support various stages of the decision-making process, as we saw in the focus case, a DSS can help to find a problem. The creative generation of alternative solutions is expected of the human decision maker. The principal strong point of DSS is their support for the consideration of alternatives ("what-if" scenarios) and for the informed choice of the preferred solution. Since the system does not actually make a decision. A manager can employ it to arrive at a decision that is organizational desirable and that will be supported by others during the implementation stage. Decision implementation may also be facilitated by the continuing use of the model to track progress and provide visibility to the effort.
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6) Foster high-quality decision making by encouraging decisions based on the integration of available information and human judgment. DSS give decision makers a degree of confidence in their decisions unavailable to the decision maker who is wholly dependent on his or her judgment. 7) Offer flexibility-as opposed to a preordained pattern of use making it easy to accommodate the particular decision-making style of an individual. However, some systems are more restrictive than others: they may lack certain models or impose a certain sequence of operations and thus constrain the user's decision making. Restrictive systems may be simpler to use and may promote prescribed decisionmaking patterns. 8) Facilitate the implementation of decisions. which frequently cut across departmental boundaries. By creating and exercising common models, decision makers in the involved organizational units develop common assumptions and, in general, learn to communicate at a deeper level. This helps to fight the "not-invented-here" syndrome, so common in organizations, that leads to the adoption of suboptimal solutions so long as they are one's own. 9) Support group decision making, particularly through group DSS (GDSS). These systems, which we shall discuss later, permit several people with a variety of experiences and areas of expertise to bring them to bear on a decision, leading to more effective, higher-quality decision making. 10) Provide user-friendliness, a principal feature of well-designed DSS. User-friendliness can make computer-supported problem solving attractive to individuals at all levels of an organization. The user can work with the system in the style that best serves him or her. This
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helps managers, professionals, and other knowledge workers to perform better. It also enriches their jobs, particularly at the operational level. 11) Give managers the opportunity to gain a better understanding of their business by developing and working with models. 10.2.4 Self assessment Questions (Section 10.2) 1. Explain how DSS is deployed. 2. What are the capabilities of DSS?
10.3 Components of DSS

The three principal DSS subsystems and their principal capabilities are shown in figure 10.1. Various commercial systems support DSS development and package these DSS capabilities in a variety of ways by distributing them among a series of optional modules.
Data Management for Retrieval Data Extraction from Internal and External Databases
Data Management
Model Management
Creation, Maintenance, and Use of Models
Dialog Management DSS on a Computer Platform Human decision Maker User Fig. 10.1: Components of DSS
Menus, Icons, Natural Language, Graphics
10.3.1 Data Management Subsystem The data management subsystem of a DSS relies, in general, on a variety
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of internal and external databases. Indeed, we have said that the power of DSS derives from their ability to provide easy access to data. This is not to say that a simple, usually spreadsheet-based DSS for the personal use of a manager cannot rely on the manager's limited personal database. It is simply that maintaining the currency and integrity of a significant database of this kind is usually a daunting task. Proliferation of personal databases also contradicts the principles of information resource management.
Electronic Information Services Databases of Strategically Linked Companies
Marketing
Manufacturing
Finance
Personnel
External Database
Corporate Functional Database
Data Extraction
Personal and Workshop Databases
Database Management Data Retrieval Report Generation Update Model Management Subsystem
Deletion Dialog Management Subsystem
Fig. 10.2: Data Management Subsystem
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On the other hand, it is usually undesirable to provide a DSS with direct access to corporate databases. The performance of the transaction processing systems that access these databases, as well as the responsiveness of the DSS, would both be degraded. Usually, therefore, the database component of DSS relies on extracts from the relevant internal and external databases. The user is able to add to these data at will. This is shown in figure 10.2. The extraction procedure itself is generally specified by a specialist rather than an end user. The specialist needs to pay particular attention to data consistency across multiple decision support systems that extract data from the corporate databases. If extracts for the DSS serving the same functional area are made at different times, the extracted databases will differ and "battles of the printout" may result. 10.3.2 The Model Management Subsystem The power of DSS rests on the user's ability to apply quantitative, mathematical models to data. Models have different areas of application and come from a variety of sources. Software packages for developing DSS (socalled DSS generators) contain libraries of statistical models. These models include tools for the exploratory analysis of data-tools designed to obtain summarized measures such as mean and median values, variances, scatter plots, and so forth. Other statistical models help analyze series of data and forecast future outcomes by approximating a set of data with a mathematical equation, by extending the trend of a curve by extrapolation techniques, or by providing for seasonal adjustment. The capabilities of the model management component of DSS are summarized in figure 10.3. Other models help establish (or reject) causal relationships between various factors (for example, whether the drop in sales volume is caused by the aging of our target market segment). Market response models show how
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sales depend on such factors as price and promotion. Simulation models that generate input values randomly from a certain probability distribution (also called Monte Carlo models-after the city where the famous casino is, of course) are employed for waiting-line problems, such as establishing the number of operators needed for order taking or deciding on staffing levels for a service center.
Model Base Strategic, Tactical, Operational Level models Statistical, Management Science, Simulation Models Financial, Marketing, Transportation Models Building blocks for models Model Base Management Model Use Model Creation Model Maintenance Dialog Management Subsystem
Data Management Subsystem
Fig. 10.3: Model Management Subsystem
Optimization models, developed by management scientists, are available for use in DSS. These models aim to allocate resources to maximize profit or minimize cost or time. A number of such models are based on a linear programming technique. These include models that allocate input resources (labor, materials, capital) among various products; models that assign
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activities to personnel or equipment; and models that determine the best shipping schedules from several points of origin to several destinations. Other models optimize inventory levels or determine optimal network configurations. Specialized model libraries are available for financial modeling, risk analysis, or marketing. A particular advantage of DSS is the decision maker's ability to use a model to explore the influence of various factors on outcomes (a process known as sensitivity analysis). Two forms of such analysis are the what-if analysis and goal seeking. When doing what-if analysis, the decision maker creates multiple scenarios by assuming various realistic values for input data, Thus, the decision maker asks "What if these are the values of the inputs?" The model recomputes outputs for each case. Here are some examples of questions that can be directed toward appropriate models: What will be the cost of goods sold if the cost of raw materials increases by 10 percent? What will be the effects on the company bonus program if sales increase by 3 percent and direct expenses increase by 5 percent? When goal seeking, the decision maker works backward from the assumed results to the needed input values. Thus, the decision maker asks "What will it take to achieve this goal?" Some examples of questions asked in this mode are: What sales volume will be necessary to ensure a revenue growth of 10 percent next year? How many service center employees will it take to ensure that every order is handled within three minutes?
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What quarterly revenues will we need from each of our three products to generate the desired profits during these quarters?
The actual form in which these questions may be asked depends on the options offered by the dialog management subsystem of the DSS, which we shall discuss next. There is significant research interest in providing a degree of automated model management. The user would be able to present the problem in a system of this kind, and the system would automatically select an appropriate model or construct one from the existing models and "building blocks." 10.3.3 The Dialog Management Subsystem Along with DSS's ability to apply models to large volumes of data from a variety of sources, a single advantage of DSS is the user-friendly and flexible interface between the human decision maker and such a system. This stands in contrast to management reporting systems. The notable feature is support of multiple forms of input and output. By combining various input and output capabilities of a DSS, users can engage in the individual dialog styles that best support their decision-making styles. The field of artificial intelligence has made some notable contributions to dialog management, such as the ability to specify what is wanted in a subset of natural language or to activate the system by voice. The window capability enables the user to maintain several activities at the same time, with the results displayed in screen windows (the user employs a mouse to move between the windows). A variety of help and even training-by-example capabilities may be offered. Significant attention has been devoted by researchers to the effectiveness of computer graphics, as opposed to the tabular display of data. Gary Dickson and his colleagues found that, in
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general, one cannot claim an advantage (however intuitively appealing it may he) for graphics throughout all decision-related activities. They did find, however, that graphs outperform tables when a large amount of information must be presented and a relatively simple impression is desired. This is very often the case-and the main reason why executive information systems, discussed later in this chapter, rely heavily on graphics. By analyzing the results of research in this area, Ali Montazemi and Shuohong Wang, concluded that line graphics have time-saving effects on decision making for more complex decision tasks only, and are less defective at providing precise information. Color graphics were found to improve decision quality, but they did not reduce the time necessary to arrive at a decision. Graphic representation of quantitative information requires considerable care to prevent distorted perception; Edward Tufte gives a thorough and exciting presentation of the subject. Summarizing the uses of graphical presentation of business information, Richard Scovill tells us that most business graphs are designed to answer just four questions: 1. Who is the biggest? 2. How do circumstances change over time? 3. What is typical or exceptional? 4. How well does one fact predict another? In general, it has been established that different decision makers and tasks are best supported by different display formats. This again proves that the advantage of DSS in the area of dialog management lies in providing a variety of dialog styles.
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10.3.4 Self assessment Questions (For Section 10.3) 1. Write short note on : a. Data management subsystem b. Model Management Subsystem c. Dialog Management Subsystem
10.4 Classification of DSS

DSS can be broadly used throughout an organization. These systems can be classified by the management level they offer support to (operational, tactical, or strategic) or by the functional area they are used in (marketing, finance, and so forth). They can also be classified into personal and organizational systems. However, to obtain a thorough view of the variety of capabilities these systems can deliver, it is best to follow Steven Alter and consider a classification based on the degree to which the outputs of a given system can determine a decision. This classification yields an entire spectrum of systems ranging from the totally data-oriented to the more powerful modeloriented systems. Clearly, a given DSS often possesses a mix of these capabilities-in which case we would classify it with respect to its most powerful capability. However, the purpose of this categorization is to review the variety of capabilities offered by the DSS approach rather than to give you tags to put on a particular system. 10.4.1 Data Access Systems These systems (which Alter calls "file-drawer systems") can provide userfriendly ad hoc access to the database. This capability is equivalent to what is offered by most DBMS through a query language. However, such systems are frequently set up to allow shop floor personnel to continuously monitor the shop floor or a particular piece of machinery; thus they fulfill operational control purposes.
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10.4.2 Data Analysis Systems These systems help to analyze historical and current data, either on demand (ad hoc) or periodically. The portfolio analysis system we discussed earlier on belongs in this category. An airline uses a system of this type to compare its performance with that of its competitors. The system's database contains the data on the quarterly performances of all airlines, submitted to the Civil Aeronautics Board of the federal government in US. Data analysis systems are frequently oriented toward the consolidation (aggregation) of data, such as summarizing the performances of a firm's subunits and presenting the summaries in graphs. Only very simple models are employed. 10.4.3 Forecast-Oriented Data Analysis Systems These systems (which Alter calls "analysis information systems") generally assist in developing product plans, including market segment forecasts, sales forecasts, and analyses of competitive actions. Their operation is based on access to a variety of internal and external marketing and product databases, including series of historical data. Ad hoc use for planning purposes by a staff analyst or a marketing manager is typical. The systems in this category include only the simpler of the variety of marketing models, which show how existing trends in the marketplace will extend in the future if similar conditions prevail 10.4.4 Systems Based on Accounting Models These are used to consider alternative options for planning purposes, based on accounting definitions and relationships. Such systems typically produce estimated (pro forma) income statements, balance sheets, or other measures of financial performance. A system of this type accepts estimates of costs and revenues as inputs rather than forecasting them (for example, it would require a ready sales forecast). The "what-if" mode of operation is typically employed to compare alternatives.
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10.4.5 Systems Based on Representational Models These systems go beyond the use of ready standard formulas, such as those employed in systems that rely on accounting models. Rather, representational models show the dependence between a controllable variable, such as the price of a product, and an outcome, such as sales. These are frequently simulation models which yield probabilistic results. The market analyst at Parke-Davis, introduced in the focus case for this chapter, produced a representational model of customer response to promotional devices. Another example is a risk analysis model, which considers such key factors as costs of resources (labor, raw materials, and so on) and product demand. 10.4.6 Systems Based on Optimization Models Optimization models are developed by management scientists to determine optimal allocation of resources or best possible schedules. Using the techniques of linear programming, for example, one is able to establish the mix of products that must be produced to maximize an objective such as profit, subject to a variety of constraints. Using such a model, a company faced with temporary supply limitations was able to adjust the supply of raw materials it needed for its products to meet this temporary constraint. In a DSS setting, these models are used by a human decision maker to arrive at a solution that considers environmental factors not included in the model itself solutions within narrow domains of knowledge are more and more frequently based on expert system technology. Such a system may suggest product price, the rate of insurance renewal, or production volume. Data-oriented DSS (or DSS components) primarily support earlier phases of the decision-making process, in particular the intelligence phase involving discovery of a problem or opportunity. The design and choice phases are
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supported by model-oriented DSS. The implementation of a decision is facilitated if the future implementers were involved in arriving at the decision with the use of DSS, or even in constructing a model employed in it. In general, as an organization's sophistication in DSS use grows, a shift takes place toward model oriented DSS.
10.5 Building a decision support system

How does a manager acquire a DSS? As we shall see, this depends on the technology employed and on the nature of the decision task that needs support. 10.5.1 DSS Technology Three levels of DSS technology have been identified by Ralph Sprague. We shall consider them by progressing from the level closest to the actual DSS to the one most distant from it. 1. Specific DSS A specific DSS is the actual system that a manager works with during the decision process. Our examples of DSS for portfolio allocation, joint venture evaluation, or police-beat allocation were systems of this type. A specific DSS is constructed with the use of DSS generators or tools, which we shall later describe in more detail. There now exist a variety of specific DSS in the software marketplace; however, they require customization to the actual environment in which they are to be used. In some cases, elaborate customization may approach the complexity of using a DSS generator (which we discuss next). As we said, a DSS usually undergoes extensive modification as it is used. Therefore, any specific DSS may be expected to evolve as time passes.
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2. DSS Generators A DSS generator is a software package that provides capabilities for building specific DSS rapidly and easily. Capabilities of generators vary widely. Their common characteristic is that much of the processing and data accessing functionality needed in a specific DSS is already programmed into the generator and can be combined into the context of a specific DSS without much programming. Elaborate DSS generators, such as EXPRESS and pcEXPRESS of Information Resources (Chicago), incorporate a variety of tools for data analysis, financial modeling, and forecasting, combined with the capability of accessing multiple databases for querying and reporting; they also include comprehensive graphics packages. The first of these systems was designed for a mainframe environment, the second for personal workstations. Generators based on personal workstations generally offer the same capabilities as those based on minis or mainframes but impose various limitations (for example, on the number of variables that may be used in a model). Linkage between PCs and a mainframe is available for generator products of the same family. Spreadsheet packages, such as Lotus 1-2-3 (Lotus Development Corporation) or Excel (Microsoft), offer ever increasing capabilities for generating simpler DSS. Specialized templates (prewritten models for a specific area of application) and non-procedural languages are available to simplify the use of spreadsheets for DSS generation. Nonprocedural, fourth generation languages of various micro based DBMS, such as FOCUS, NOMAD2, or Ramis II, provide another avenue for generating a specific DSS. The capabilities of spreadsheets and DBMS are combined in integrated packages such as Framework, or Symphony (Lotus Development). The main distinction between simply using a spreadsheet and producing a DSS is that in the latter there is a clear separation of the data from the models.
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3. DSS Tools A variety of tools-such as a programming language with good capabilities for accessing arrays of data (for example, APL), a plain spreadsheet, a statistical package, or a DBMS with its query facility-may be employed as building blocks to construct a DSS generator or a specific DSS. Sometimes personal DSS are indeed built with APL. I have observed many an actuary do so and find the experience rewarding and stimulating. On the other end of the spectrum, a company may decide to build its own DSS generator, specialized for its individual application area, from the ground up, using these tools. Such a generator may become a source of competitive advantage. 10.5.2 Who builds a DSS Both end users and MIS professionals become involved in the development of DSS. Ralph Sprague analyzed the roles in DSS development related to the technologies we just discussed The technologies and the roles played by organizational actors are shown in figure 10.4.
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Fig. 10.4
Five roles involved in exploiting the DSS technologies can be identified: 1) The manager is the end user of a specific DSS: this is the knowledge worker who actually employs the system to make decisions. 2) In some cases, an intermediary assists the manager. This role may range from simply running the system in behalf of and on detailed instructions from the manager to the more substantive contribution of framing the problem for exploiting the capabilities of specific DSS and displaying the information in an appropriate fashion. Jack Hogue found
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that 95 percent of managers in his sample used intermediaries at least occasionally. 3) A DSS builder employs a DSS generator to build a specific DSS for the given end users. The builder is familiar with the business problem, as a business analyst would be, as well as with the capabilities of the generator. In some organizations, these professionals are members of a DSS group which supports the use of DSS technology throughout the enterprise. 4) The technical support specialist is usually a member of the information systems department who installs and maintains various modules of the generator package as they are needed. This person also ensures the linkages between the generator and other elements of the organizational computing environment, such as databases, personal workstations, and networks. 5) The toolsmith develops the building blocks employed by the generator (or, sometimes, directly in specific DSS). These technical experts usually work for software vendors. 10.5.3 How DSS are developed By its very nature, a decision support system has a more customized orientation than a TPS or an MRS: it is a collection of capabilities that support the decision making process of a certain individual or a relatively small group of people. As the needs of these people change, the DSS should change with them-DSS are truly built to be changed. We shall distinguish three prominent approaches to building DSS-even though a large spectrum of possibilities exists between the first two extremes. 1. The Quick-Hit Approach So dubbed by Sprague, the quick-hit approach is the way most DSS come into being. Indeed, most DSS are built for the personal use of a decision
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maker. The initiative usually comes from an individual manager, so the DSS are built either by the manager or by the builders from a more or less formal DSS group. Generally, a DSS generator is employed (frequently a spreadsheet with templates). The level of investment is very low and the payoff high. Unless it is used as a springboard to more advanced stages of DSS assimilation into the organization, this opportunistic approach results in little organizational learning. The risks associated with end-user computing, including lack of maintainability, frequently exist in these cases. In some organizations, however, the quick-hit approach is employed as an early stage in the process of technology assimilation, in which case it is later replaced by an orderly process of development for larger DSS. 2. Traditional Life-Cycle Development This process begins with detailed system planning and analysis, progresses through the design stages followed by coding and testing, and goes on to implementation this is the development life cycle. The process is lengthy, and there is no partial system to work with before the system is completed. This development methodology, as we shall see later, is suitable for complex systems, in particular those which affect many users and in which informational requirements can be established early through the analysis process. This is indeed the case when a DSS generator is to be built. Therefore, a DSS generator or a very large model-based organizational DSS that affects a number of functional units in an organization may be fruitfully built using such a methodology. But in the development of a specific DSS, such usage is the exception rather than the rule.
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3. Iterative Development In DSS practice, the future user or group of users generally do not know what they want from the system. Moreover, an analysis process is not likely to surface a clear set of requirements. As in many other activities in life, we learn what we want from an activity by starting to perform it. To do so in decision making with a DSS, we need a prototype of the system-a simple initial version used to experiment with and learn about the desired features of the system. Iterative (or evolutionary) development of DSS relies on the creation of such a prototype and its progressive refinement. The process begins when the future user and the DSS builder discuss the system for a few hours. They identify the most useful screens. The builder then constructs a simple version of the system, ignoring many of its aspects. To construct a DSS, all three of its components (database, model, and dialog) have to be built with the use of facilities offered by the DSS generator or with DSS tools. Particular attention is paid initially to the dialog component. Now the users have something to experiment with and react to. The iterative, repetitive process of prototype refinement follows. End users offer suggestions for modifying the current version of the system. Builders analyze these suggestions and modify the emerging DSS. The prototype, refined over several such iterations, is tested and documented and eventually becomes the DSS. The process of iterative development is shown in figure 10.5.
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Development of Initial Prototype
Prototype/DSS Evaluation
Development loop
Are Current Fig.10.5 Requirements Satisfied?
Yes
No
Validation and Documentation of DSS
Prototype/DSS Modification
DSS Ready for Use
Fig. 10.5
The use of the system engenders new iterations: decision problems evolve and the users' needs change. The DSS is modified to satisfy these changing requirements. Each successive modification may thus be thought of as another iteration during the total evolutionary process of keeping DSS current with user needs. As we can see, the process of iterative development tightly binds users and builders to ensure that the DSS satisfies actual user requirements (rather than what the users may think they want-until they work with the actual system).
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Iterative development of DSS is an example of the general prototyping technique broadly used in software engineering. In the version of the technique generally used for DSS development, the prototype becomes the actual system after an evolutionary process of refinement. By contrast, in the engineering of large software systems, the prototype often serves to clarify user requirements, after which it is discarded ("throwaway prototyping"). Hogue found that DSS development time varies considerably: from one week to four years in his sample of eighteen companies with multiple DSS. He also found that master plans for the organizational development of DSS were virtually nonexistent-a severe deficiency, considering the importance of this type of MIS. 10.5.4 Developmental trends in DSS Lively research in the area of decision support systems continues apace. Two prominent directions this research is taking are toward the integration of expert system technology into DSS and the development of group DSS (GDSS). Group Decision Support Systems (GDSS) Group decision support systems (GDSS) are expressly designed to support group communication and decision processes. We know from our analysis of the organizational environment in the information society that the volume of 'necessary decision making will continue to increase dramatically. Many decisions are complex and call for the participation of a number of experts. We also know from the previous chapter that a decision-making process may benefit significantly if people representing various political interests are explicitly brought into it. All of these factors, combined with the team orientation of the contemporary organizational design, lead us to believe
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that decision support systems that support group work will grow in importance. In contrasting the capabilities of GDSS with DSS, we may use the classification of decision types and their corresponding support systems offered by Peter Keen and Richard Hackathorn and summarized here in table below.
DECISION TYPE Independent Sequential Interdependent CHARACTERISTICS Decision maker makes a complete decision. Each decision maker individually makes a part of a decision and passes the results to the next decision maker. Decision makers interact and negotiate to arrive at a decision SUPPORT SYSTEM Personal DSS Organizational DSS
Pooled Interdependent
GDSS
A GDSS should support a process that brings together a group of decision makers to share information, exchange ideas, explore alternative solutions with the use of models and data, vote, and arrive at a consensus-among other possible interactions. More or less permanent groups, such as corporate boards, task forces, or teams of coworkers, increasingly form the basic work cells throughout an enterprise. When we discussed the decisionmaking process, we noted that dysfunctional behaviors may develop in a group's work. It is the objective of a GDSS to enable group members to bring their skills to bear on the decision process, while counteracting possible negative group dynamics. The anonymity of many GDSS interactions and the ability to work with the system rather than directly interacting with others playa role in preventing dysfunctional group behaviors. For example, interactions in a GDSS setting frequently encourage group members who would have otherwise kept their counsel, or
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perhaps deferred to others, to participate actively in the decision-making process. A group working with a GDSS is actually participating in a decision-related meeting. Settings for a GDSS session range from a face-to-face meeting for an executive planning group to a "meeting" of widely dispersed insurance company sales agents discussing possible new rates through their VDTs and a telecommunications network with the support of an electronic meeting system. Three levels of GDSS capabilities may be distinguished Level-1 GDSS facilitate communication among group members. They provide the technology necessary to communicate decision rooms, facilities for remote conferencing, or both. Level-2 GDSS contain the communication capabilities of the Level-1 GDSS and provide support for the decision-making process. Thus, they furnish DSS modeling capabilities and software that supports group decision processes. Level2 GDSS thus facilitate activities involving the Delphi technique, brainstorming, and the nominal group technique. Level-3 GDSS, which at this time are still at the research stage, would formalize group interaction patterns-possibly by including expert systems that would suggest rules to be applied during a meeting. These are the distinguishing characteristics of GDSS at their present stage of development: 1) Aside from the database, model, and dialog components of DSS, GDSS also contain a communication component. This component, which is implemented with the organization's local or wide area communication facilities, may include electronic mail, teleconferencing, or various computer conferencing facilities.
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The principal settings for GDSS use are: a) A face-to-face session in a decision room or a similar conference room, with terminals and a large public display screen. b) A teleconference session taking place in several decision rooms at the same time; these are connected with video and
telecommunication links. c) An interfaced session, in which participants work at remote terminals and do not see each other; such a session may be dispersed in time as well as place (the memories of the computers, in conjunction with the appropriate software, make asynchronous sessions possible). 2) Complete decision ("war") rooms are often provided and equipped in a fashion conducive to a group effort; a large common screen display is an essential facility. 3) GDSS should offer facilities for prompting and summarizing the votes and ideas of participants. 4) GDSS features, such as anonymity of interactions, the layout of the decision room, and the design of the dialog subsystem, should encourage both the formation of a cohesive group and the active participation of all its members. 5) GDSS expand the model base to include models supporting group decision-making processes. Models for voting, rating, and ranking should accompany other statistical models. It should be possible to run a Delphi session (with rounds of voting, anonymous opinion sharing, and arrival at a consensus) or a brainstorming session (eliminating redundant ideas and summarizing the results). 6) It should be possible with a GDSS to obtain the protocol of a session for later analysis. A collection of such protocols from the more important decision-making sessions may be preserved as a part of organizational memory.
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7) GDSS should support a facilitator to assist the orderly progress of a session; this person should be able, for example, to route individual screen contents to the large common display. Some sessions also profit from the presence of a leader.
10.5.5 Self assessment Questions (ForSection 10.5) 1. Explain the various level of DSS technology as identified by Ralph Sprague? 2. Explain the roles played by organisational actors in building a DSS? 3. What are the various approaches for developing DSS 4. Explain the concept of GDSS
10.6 Executive Information Systems

Executive information systems (EIS), are becoming the primary tools of toplevel control in some organizations. They can be best understood by contrasting them with DSS, which they complement. The feature of EIS is to access to a large variety of internal and external data, terse presentation of information with colorful graphics, the ability to "drill down" on more and more detailed data, and the ability to control the system in a very easy way. Speaking tersely: while DSS are primarily used by middle- and lower-level managers to project the future, EIS primarily serve the control needs of higher-level management. They help an executive to spot a problem, an opportunity, or a trend. EIS also have forecasting capabilities that can be used in an "automatic pilot" fashion; in addition to their other features, these capabilities make EIS a strategic planning tool. The relationship between these two types of information systems, EIS and DSS, is shown in figure 10.6.
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User
Task
Primary Support Areas
Problem/Opportunity
Control, Strategic Planning
Executive
EIS
Discovery and Assessment
Flow or Problems Seeking Problem Planning
Analyst/Middle Manager
DSS
Solution : Decision Making Process
Fig. 10.6
Seen in the light of the structure of a decision-making process, EIS primarily assist top management in uncovering a problem or an opportunity. Analysts and middle managers can subsequently use a DSS to suggest a solution to the problem. More recently, EIS-type applications are coming into use by middle managers as well At the heart of an EIS lies access to data. EIS may work on the data extraction principle, as DSS do, or they may be given access to the actual corporate databases. The first kind of EIS can fully reside on personal workstations; EIS of the second kind need the power of minis or mainframes to access corporate data. The technical problems of EIS data access pale in comparison with the problem of potential resistance from managers below the top level. Once an EIS has been set up, its executive users are able to obtain virtually instantly any information supported by the EIS data-unfiltered and unable to know their subordinates.
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In the design of EIS, developers frequently rely on the critical success factors (CSF) methodology developed by John Rockart of MIT. He defined CSFs as "those few critical areas where things must go right for the business to flourish." With the use of this methodology, executives may define just the few indicators of corporate performance they need. Many executives have already fallen into the habit of reviewing these indicators on a regular, sometimes daily, basis. With the drilldown capability, they can obtain more detailed data behind the indicators. An executive who is experienced with such a system can perceive a trend (and a problem) in seconds. As opposed to the CSF methodology, which relies on the individual critical success factors, the strategic business objectives methodology of EIS development takes a company-wide perspective. Following the identification of the strategic business objectives of a firm, the critical business processes are identified and prioritized, and then the information needed to support these processes is defined-to be obtained with the EIS that is being planned. This methodology avoids the frequent pitfall of aligning an EIS too closely to a particular sponsor. In the United States, Commander EIS (by Comshare of Ann Arbor, Michigan) and Pilot EIS (by Pilot Executive Software of Boston) lead the EIS field. RE SOLVE from Metapraxis (New York and of Kingston upon Thames, England) is a leader in Europe. All of these systems are actually EIS generators, which help to configure a specific EIS. In general, organizational DSS are conceptually more complex than the rather well-structured EIS, primarily due to the model-management component of DSS.
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10.7 Organisational aspects of DSS and EIS

Both DSS and EIS are proliferating in organizations in the private and public sectors. A single EIS is generally implemented in an organization, with more and more executives given access to it, and with the system playing an integrative role. Thus, as EIS use at the Mellon Bank of Pittsburgh expands from the top corporate level down to the departmental management level, it is expected that the system will provide a shared understanding of the business throughout the management structure. Multiple DSS, on the other hand, are in place in most of the medium-sized and larger firms. The introduction of DSS, treated as a technology, lends itself to the process of technology assimilation. In analyzing a number of companies, Richard Epich concluded that a successful integration of DSS into a company's computing environment is primarily dependent on top level commitment to the technology (as is the case with virtually all advanced information technologies) and the quality of the DSS support groups. The objective is to institutionalize the use of DSS. Institutionalization means that knowledge workers throughout the enterprise consider the merits of the DSS approach when appropriate and implement and use these systems, so that the DSS ultimately influence organizational processes (rather than only isolated individuals). Resistance to change should be expected; a process of organizational change should be conducted as a part of the general implementation process. The refreezing phase of the organizational change is especially important: users should actually feel committed to using their DSS and allow these systems to change their work lives. DSS groups are a resource that can play a crucial role in this change process. There are a variety of organizational arrangements for DSS groups. Most frequently, the DSS group is located either in an information
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center (with DSS computing considered an end-user activity) or in a staff analysis department in a functional area, such as the corporate planning department. Hugh Watson and his colleagues analyzed how organizations actually support their DSS efforts. They found that DSS groups in most organizations include five or fewer professional members. The support offered by the DSS groups ranges from acting as builders and promoters of DSS to providing consulting services, technical support, and training. As we have already seen, EIS have by their very nature a significant organizational impact. The organizational advantage of EIS lies in its support for a tight control from the top. This ability alone is also a potential source of resistance to EIS. A well-designed EIS can immensely increase the span of management of executives. EIS use has already made possible profound organizational changes. Since top management can easily track the performance of virtually any company subunit, company decision making may be decentralized-and controlled with the EIS. The CEO of Lincoln National Corporation has fourteen direct reports and no executive assistant-and he attributes his ability to maintain this span of management to the EIS and electronic mail. EIS have weighty political aspects: they could give a top executive the capability of probing into the work of any manager without the manager's knowledge. Combined with electronic mail, EIS give top executives the capability to bypass the chain of authority. Resistance to these systems, therefore, must be expected and managed. In particular, the role of an executive sponsor is critical. Executive information systems rely on databases, which need to be refreshed daily in many cases. EIS are no better than the data contained in their databases-and much resistance must be overcome from a variety of
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quarters to obtain this data on a regular basis. As analyzed by Rockart and David De Long, resistance is to be expected not only from the staff personnel who support the executives and middle managers, but also from the executives themselves, who in some cases feel that the information will be inadequate for their needs or that the system will be difficult to use. Application of CSF methodology and a superior interface design can go a long way toward allaying these apprehensions. Sometimes, organizational measures must be taken to ensure support for EIS. At Xerox, where the use of EIS pervades the work of high-level managers, top management has imposed a limit on drill-down depth; managers can drill down no deeper than three layers from the top. The availability of EIS as potent tools for top-level control will shape many organizational solutions in the future.
10.8 Summary
Decision support systems (DSS) are flexible interactive information systems that support managers in reaching decisions concerning ill-structured problems. Primarily applied in planning, DSS are used either directly or through intermediaries by all levels of management. Specific DSS that are actually employed by users are generally developed with DSS generators, though simpler DSS tools may also be deployed. Future DSS are expected to incorporate expert system technology for various aspects of their operation. Group DSS (GDSS) expressly support group decision processes, such as the Delphi technique or brainstorming. Executive information systems (ElS) support higher-level management control by making data regarding all aspects of corporate operations accessible in a timely and easily handled fashion.
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10.9 Terminal Questions

1. What do you understand by Executive information system? 2. Explain the organisation aspects of DSS and EIS
10.10 Multiple Choice Questions

1. EIS developers frequently rely on the ______ . A. ABC B. CAD C. CSF D. CDE 2. Software packages for developing DSS are called as A. DSS Programmers B. DSS generators C. DSS Writers D. DSS Scripter 3. Sales forecasting is an example for ____________ type of problem A. Semi structured B. Structured C. Unstructured D. All of the above
10.11Answers to SAQs, TQs and MCQs

Self Assessment Questions Section 10.2.4 1. This has been mentioned in section 10.2.2 2. This has been mentioned in section 10.2.3
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Section 10.3.4 1. a. This has been mentioned in section 10.3.1 1. b. This has been mentioned in section 10.3.2 1. c. This has been mentioned in section 10.3.3 Section 10.5.5 1. This has been mentioned in section 10.5.1 2. This has been mentioned in section 10.5.2 3. This has been mentioned in section 10.5.3 4. This has been mentioned in section 10.5.4 Terminal Questions 1. This has been mentioned in section 10.6 2. This has been mentioned in section 10.7 Multiple Choice questions 1. C 2. B 3. A
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References: 1. Management Information System Kumar N 2. Management Information System CSV Murthy 3. Management Information System Jane Laudon, Jane P. Laudon, Kenneth C. Laudon 4. Management Information System James A. OBrien 5. Management Information Systems for Information Age Amy Philips, Kaeve Cummings, Stephen Haag 6. Management Information System Zwass 7. Management Information System Gordon and Gordon 8. Management Information System Sadagopan
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Management Information Systems

DSS and EIS

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Management Information Systems

10.6 10.7 10.8 10.9

10.2 When should you use the decision support approach ?

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EXAMPLES OF PROBLEM AREAS

HOW DECISIONS ARE MADE

Order validation Inventory reorder

Availability of an algorithm {standard operating procedure) Programmable aspects present

Fully computerized (TPS or MRS) Human decision maker supported by computer

No standard procedures or aspects available

Principally by a human, with some computer support

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10.3 Components of DSS

Creation, Maintenance, and Use of Models

Menus, Icons, Natural Language, Graphics

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Corporate Functional Database

Personal and Workshop Databases

Deletion Dialog Management Subsystem

Fig. 10.2: Data Management Subsystem

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Data Management Subsystem

Fig. 10.3: Model Management Subsystem

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10.4 Classification of DSS

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10.5 Building a decision support system

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