Broadly defined, a decision support system (DSS) is a computer-based information system that combines models and data in an attempt to solve semistructured and some unstructured problems with extensive user involvement.But the term decision support system (DSS), like the terms MIS and MSS, means different things to different people. DSSs can be viewed as an approach or a philosophy rather than a precise methodology. However, a DSS does have certain recognized characteristics, which we will present later. First, let us look at a classical case of a successfully implemented DSS, which occurred long ago, yet the scenario is typical.
The case demonstrates some of the major characteristics of a DSS. The risk analysis performed first was based on the decision maker’s initial definition of the situation, using a management science approach. Then, the executive vice president, using his experience, judgement, and intuition, felt that the model should be modified. The initial model, although mathematically correct, was incomplete. With a regular simulation system, a modification of the computer program would have taken a long time, but the DSS provided a very quick analysis.
Many companies are turning to DSSs to improve decision making. Reasons cited by managers for the increasing use of DSSs include the following: New and accurate information was needed; information was needed fast; and tracking the company’s numerous business operations was increasingly difficult. Or, the company was operating in an unstable economy; it faced increasing foreign and domestic competition; the company’s existing computer system did not properly support the objectives of increasing efficiency, profitability, and entry into profitable markets. Other reasons include: the IS department was unable to address the diversity of the company’s needs or management’s ad-hoc inquiries, and business analysis functions were not inherent within the existing system. For a brief history of DSS.
In many organizations that have adopted a DSS, the conventional information systems, which were built for the purpose of supporting transaction processing, were not sufficient to support several of the company’s critical response activities, especially those that require last and/or complex decision making. A DSS, on the other hand, can do just that.
Another reason for the development of DSS is the end-user computing movement. With the exception of large-scale DSSs, end users can build systems themselves, using DSS development tools such as Excel.