Decision Support Systems
Companies across all industries rely on decision support tools, techniques, and models to help them assess and resolve business questions. One example of this is a decision support system (DSS) . A DSS is a computer-based information system that helps businesses or organizations make better decisions by providing a flexible tool for analysis. With supporting software and hardware, this tool collects data that helps an organization gather and interpret relevant business information. It then converts the information into a basis for marketing action.
Example of a DSS
This is an example of a decision support system.
Decision support systems enable managers to obtain and manipulate information as they are making decisions. In addition to helping management, DSSs also serve the operations and planning levels of an organization by helping them make decisions, which may be rapidly changing and not easily specified in advance. Decision support systems can be either fully computerized, human, or a combination of both.
A key component to any DSS is business intelligence reporting tools, processes, and methodologies. DSSs also include knowledge-based systems and an interactive software-based system intended to help decision makers compile useful information from a combination of raw data, documents, personal knowledge, or business models.
Typical information that a decision support application might gather and present includes:
- Comparative sales figures between one period and the next
- Projected revenue figures based on product sales assumptions
Decision support systems can be developed to support the types of decision-making faced by managers in specific industries such as the airline and real estate industry. For example, American Airlines produced a DSS that helps to decide how much to overbook and how to set prices for each seat so that a plane is filled and profits are maximized. Decision support systems have become critical and useful across all types of business. In today's global marketplace, it is imperative that companies respond quickly to market changes. Companies with comprehensive decision support systems have a significant competitive advantage.
The top benefits of decision support systems include:
- Speeding up the process of decision making
- Increasing organizational control
- Speeding up problem solving in an organization
- Helping automate managerial processes
- Improving personal efficiency
- Eliminating value chain activities