Decision Support systems and

Business Intelligence
• Business environment is becoming more and
more complex and rapidly changing, making
decision making more difficult
• Must respond and adapt by making faster and
better decision.
• Intuition may not be enough, hence
computerised systems are required.
• "Business Intelligence is a set of methodologies,
processes, architectures, and technologies that
transform raw data into meaningful and useful
information used to enable more effective
strategic, tactical, and operational insights and
decision-making."[6]

• 1958 researcher conned this term intelligence,

IBMs hans peter Luhn "the ability to apprehend
the interrelationships of presented facts in such a
way as to guide action towards a desired goal."[4]
 Car company case scenario
• car company fictitious case:
• car logistics
• problem:increasing costs
• increasing issues, delays , data entry errors. some
issues resolved with data analysis
• more managers could see problems of overbilling
and delays
• sample indicates: multiple things: flow of
information, fast decisions, vast amounts of data,
collaboration:
 The Business Environment
• because of the modern factors, decision making is become complex requiring knowledge of
business, data, data representation; hence a computerized system is required.
Different actions taken by managers to counter
the pressure:
• Employee strategic planning
• Use new and innovative business models
• Restructure business processes
• Participate in business alliances
• Improve corporate information system
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• Improve partnership relationships
• Encourage innovation and creativity
• Improve customer service and relationships
• Move to electronic commerce(e-commerce)
• Move to make-to-order production and on-
demand manufacturing and services
• Use new IT to improve communication, data
access(discovery of information)
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• Respond quickly to competitor’s actions(e.g.
in pricing, promotion, new products and
services)
• Automate many tasks of white-collar
employees
• Automate certain decision processes,
especially those dealing with customers
• Improve decision making
 Why we use computerized Decision
Support System
• Speedy computations
• Improved communication and collaboration
• Increased productivity of group members
• Improved data management
• Managing giant data warehouses
• Quality support
• Agility support
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• Overcoming cognitive limits in processing and
storing information
• Using the web
• Anywhere, anytime support
Decision Support Frameworks(gory
and scott morton[1971]
Simon’s Decision Making Process
• Decision making
process:

Intelligence(sear
ching for
conditions
•
Design
•
Choice
•
Implementation
 Computerized Decision Support
• Computer support for Structured decision
-Automated Decision making(rule
based system, price determination; loan or
not, price optimsation)
• Computer support for unstructured decision
• Computer support for semi structured
problems
Automated Decision-Making
Framework
 Decision Support System(DSS)
• “Decision support system couple the
intellectual resources of individuals with the
capabilities of the computer to improve the
quality of decisions. It is a computer-based
support system for management decision
makers who deal with semi structured
problems”
-By Keen and Scott-Morton(1978)
Architecture of DSS
• Types of DSS
1.Model-oriented DSS
2.Data-oriented DSS

1 – model is quantitative
D- data oriented : adhoc
queries and reporting
 Framework for Business
Intelligence(BI)
What is BI?
• An umbrella that combines architectures, tools,
database, analytical tools, applications and
methodologies.
• Content-free expression
• Objective:1.To enable interactive access to data
2.To enable manipulation of data
3.To give managers & analyst the ability
to conduct appropriate analysis.
The Architecture of BI
 Components Of BI system
BI system has four major components:
• Data warehouse: Source data
• Business Analytics: a collection of tools for
manipulating, mining, and analyzing the data
in the data warehouse
• Business performance management: for
monitoring & analyzing performance
• User interface: Dashboard & other
information broadcasting tools
 Benefits of BI
The major benefits of BI:
• Faster, more accurate reporting
• Improved decision making
• Improved customer service
• Increased revenue
Apart from these, there are several other like-
• Time saving
• Single version of the “truth”
• Better strategies and plans
• More efficient process
• Cost saving
 Bperformance mgmt
• Adds management and feedback to core BI
• Top – bottm process
• Balanced scorecard and dashboards
 Summary
• Similar architecture because BI evolved from DSS.
• DSS are constructed to directly support specific
decision making while BI are for indirect support.
• BI has an executive & strategic orientation while DSS is
oriented toward analyst.
• BI are constructed with commercially available tools &
components while DSS is constructing solutions to
unstructured problems.
• DSS were mostly in the academic world.BI were
developed by software companies.
• Many of the tools that BI uses are also considered DSS
tools.
 Management Support System
• Combination of DSS and BI tools.
• Technology that supports managerial tasks in
general and decision making in particular.
• MSS use when the nature of the technology
involved is not clear, and use it interchangeably
with the combined term DSS/BI.
• Vendor names: Microstrategy, microsoft, IBM,
oracle, Hyperion, cognos, Business
objects,SAS,exsys,SAP
 Work system view
• Remove systems from DSS
• Improve decision making
• Alter(2004)
Process, particpants,
info,tech,product,customers.infra,environmen
t,strategy
• Case study on microstrategy
• Microsoft BI offering