DecisionDecision Support Support SystemsSystems

Julie MullerJulie Muller

Lizzy VanHornLizzy VanHorn

Michael StocksMichael Stocks

What is a DSS?What is a DSS?

An information system that utilizes An information system that utilizes analytical modeling and helps analytical modeling and helps

executives make strategic decisionsexecutives make strategic decisions

DSS are user-driven and rely on the DSS are user-driven and rely on the knowledge possessed by its userknowledge possessed by its user

Structured or Unstructured?Structured or Unstructured?

SStrategic or Operational?trategic or Operational?

Strategic Management

Tactical Management

Operational Management

Decision Structure Information Characteristics

Unstructured

Semi-structured

Structured

Ad HocUnscheduledSummarized

InfrequentForward Looking

ExternalWide Scope

Pre-specifiedScheduled

DetailedFrequentHistorical

InternalNarrow Focus

Who in an organization do you Who in an organization do you think would use a Decision think would use a Decision

Support System??Support System??

Information FlowInformation Flow

Executive Information System

Executives

MIS

TPS

PCS

Operational Systems and Staff

DSSManagers

Enterprise C

ollaboration System

SystemInformationFlow

InformationExchange/Communication

Types of DSSTypes of DSS

Model-drivenModel-driven

Data-drivenData-driven

Communication-drivenCommunication-driven

Document-drivenDocument-driven

Knowledge-drivenKnowledge-driven

Why Use a DSS?Why Use a DSS?

Linear ProgrammingLinear Programming

Regression AnalysisRegression Analysis

Decision TreesDecision Trees

ForecastingForecasting

Content of Information?Content of Information?

AccurateAccurate CompleteComplete EconomicalEconomical FlexibleFlexible ReliableReliable RelevantRelevant

SimpleSimple TimelyTimely VerifiableVerifiable AccessibleAccessible SecureSecure

Most ImportantMost Important

AccurateAccurate CompleteComplete FlexibleFlexible RelevantRelevant TimelyTimely

DSS Reporting is produced through DSS Reporting is produced through Analytical ModelingAnalytical Modeling

Goal seekingGoal seeking

SensitivitySensitivity

What-If ScenariosWhat-If Scenarios

OptimizationOptimization

Analytical ModelingAnalytical ModelingType of Type of ModelingModeling

ExampleExample

What-if What-if analysisanalysis

If we raised our advertising budget If we raised our advertising budget by 15% of our employees, what by 15% of our employees, what would happen to sales?would happen to sales?

Sensitivity Sensitivity analysisanalysis

Continuously raise our advertising Continuously raise our advertising budget by 1% to monitor its budget by 1% to monitor its relationship to salesrelationship to sales

Goal-seeking Goal-seeking analysisanalysis

Increase our advertising budget Increase our advertising budget until sales reach $10 millionuntil sales reach $10 million

Optimization Optimization analysisanalysis

What number of advertisements What number of advertisements maximizes our overall profit?maximizes our overall profit?

Online Analytical Processing Online Analytical Processing (OLAP)(OLAP)

Corporate

Databases

Multi-Dimensional

Database

Client PCs OLAP Server

RECALL: RECALL: What is the difference between an What is the difference between an

MIS and a DSS?MIS and a DSS?

MIS- Shows past and present, tells problem but does not give a solution

DSS- Use forecasting and predictive models but human makes the end decision

MIS MIS

Provides information about the Provides information about the performanceperformance of an organization of an organization

Contains information, but does not Contains information, but does not help an executive determine the best help an executive determine the best decision to make decision to make

Generic & periodic reportsGeneric & periodic reports

DSSDSS

Explores possible Explores possible alternativesalternatives and and develops models to help predict develops models to help predict outcomes of situations. outcomes of situations.

Produces Produces flexibleflexible, adaptive reports , adaptive reports generated through an generated through an interactive interactive interface. interface. • May only be generated onceMay only be generated once• Customized, non-genericCustomized, non-generic

Fair IsaacFair Isaac Enterprise Decision ManagementEnterprise Decision Management

Business rulesBusiness rules Predictive modelsPredictive models Decision serviceDecision service

Normally total Normally total

$200,000 plus$200,000 plus

Fair Isaac’s SuccessFair Isaac’s Success• More than 5000 businesses in more than 80 countries

• 9 of the top 10 companies in the Fortune 500

• Multiple success stories of big and small companies