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Role of Decision Support System For Decision-Making Process in Global Business Environment

Decision Support System:

A Decision Support System is an integrated set of computer tools allowing a decision maker to interact directly with computer to retrieve information useful in making semi structured and unstructured decisions. Example of this decisions include such things as merger and acquisition decisions, plant expansion, new product decisions portfolio management and marketing decisions.

Decision making is a fundamental managerial activity. It may be conceptualized as consisting of four stages: intelligence, design, choice and implementation.

Important aspects of the Decision Support System:

1) The most important consideration is the Decision Support System’s ease of use – its ability to allow non -technical people to deal with it directly. The single greatest and most enduring problem with computers has been their inflexibility, their inability to let the person who actually needs the data to deal directly with the computer.

2) The ability to access information should not be restricted to only the part of an organization or to only certain managerial or professional groups. Instead the resource should be distributed to all of the people and part of an organization needing it without widespread access; the power of advanced Distributed Processing System will go untapped as they typically have in the past.

3) The ideal Decision Support System in sharp contrast to previous method of designing applications should not be a ‘system’ at all in the strict sense of the term. Rather, it should be a highly adaptive decision support generator that can easily be used by professionals to quickly design data support prototypes suited to each specific decision-making task. This adaptive tool must allow quick design changes if the original design does not closely match a person’s information gathering style or needs.

4) To adequately support the human element, this highly adaptive support capability must be able to provide access to operational data and as well as to summary data that already has been processed by application programs designed for other specific operational tasks. Equally important this tool must provide the professional with access to an organization’s raw data and it must allow the access to be accomplished in one step using a single uncomplicated procedure or command and without having to re-key non summary data.

5) The organizations need to access original data sometimes because efficiency is related to how well the original data is organized in the system; the Decision Support Generator should be able to interface with a true DBMS. It should also be able to access standard ‘flat’ files indirectly using the power of the host computer to facilitate both the user interface and data access without changing existing files.

6) The Decision Support Generator should let the user decide whether information should be displayed on the CRT screen for immediate use or whether it should be printed for later use. The best way to accomplish such flexible data presentation is through a work station. The management or professional information workstation would incorporate a keyboard, display screen and an interface to a printer which could print everything from straight text to graphics like pie charts, bar charts and line charts.

7) The support tool must interface with several different systems and capabilities, it must be compatible with all of them, the tool must provide users with a single easily used language to access manipulate and present data in a way that will best support the end-user.

8) To facilitate formatting and manipulating displayed data, the decision support generator should ideally be able to interface with word processing software. With this capability, the DSS becomes the critical link between data processing and office automation, integrating both functions in an easily-used, straight forward, extremely powerful system.

Decision making characteristics in the Global Business Environment:

Business Strategy/Decision Making Characteristics

Multinational: (decentralized federation) Decision making decentralized to subsidiaries, informal relationships between head quarters and subsidiaries

International: (coordinated federation) More vital decision and knowledge in general developed at head quarters and transferred to subsidiaries

Global: (centralized federation) Decisions made at the center knowledge developed and retained at the center

Transnational: (integrated network) Decision making and knowledge generation distributed among units

Managers and Decision Support System:

The daily work of a manager, as hundreds of brief activities of great variety, requiring rapid shifts of attention from one issue to another, very often initiated by emerging problems. A manager maintains a complex web of contacts outside and inside of the organization. A successful manager is not swamped by onslaught of these activities: he or she maintains a personal agenda. Effective manager carve out as it were, their own informal structure within the corporate structure and they use this network to keep themselves informed and influence others. It has been absorbed that proactive manager make special efforts to develop a long-term view and long-term agenda.

The need for types of information produced by decision support system has always been present. Decision support systems have become popular primarily because of their capability to fill this need. Nowadays availability of the computer hardware, the advent of the Database Management System in the 1970’s provided means for storage and management of large amount of data, large increase in number of software packages incorporating the functions of a decision support system. Finally many MBAs who were trained analytic techniques are now reaching the middle and upper levels of corporations .These individuals know how to use the tools that decision support system provide. So in most of the organization, managers used the computer based Data processing applications. This leads to develop the decision support system in business world.

A widely held notion is that modern decision -making is a highly structured process. According to this view, management makes decisions by gathering and analyzing all the relevant information, reviewing all possible alternatives and then calmly and rationally choosing the course of action that provides maximum benefits at minimal risk.

Managers play three types of roles in carrying out their functions. Interpersonal roles are mainly based on face-to-face interactions; through in some cases computerized communications media may be employed. Informational and decision roles are supported by variety of information system, which make information available, assist in decision making and serve as means of communication.

All the managerial roles have an element of decision making: the decision roles are the ones where this is the crucial aspect. The manager brings together resources in a novel way. Decision support system assists an entrepreneur in considering options, selecting one and planning for its implementation. Handling disturbances is a part of managerial control. Resource allocation is the essence of planning and decision support systems have become indispensable in many organizations for their purpose.

The manager is a problem solver, and the fundamental activity in problem solving is decision making. Decision making is the process of identifying a problem, developing alternative solution and choosing and implementing one of them. An experienced manager recognizes a problem as similar to one he or she has already encountered. The intuitive grasp of a problem most often relies on such an ability to establish an analogy. The systems approach to problem solving helps to manage complexity.

Decision support system in the organizational environment:

Organizations that have been the most successful in the implementing DSS have much in common. They have well established, well controlled and well structured data processing system which provides transaction processing data necessary for DSS. Such organizations have spent extra money and personnel necessary to maintain a research and development focus. All the departments in the organization have communicated with central groups of computer. The entire departments have sufficient confidence to initiate and manage systems projects. The central computer groups have several people on its staff that either came from all other departments’. Education and training programs are used by the organizations to build mutual understanding between departments and the computer group.

Capabilities offered by DSS:

1) Support decision making in ill-structured situations- in which ,precisely owing to the lack of structure, problem do not lend themselves to full computerization, and yet require computer assistance for access to and processing of voluminous amount of data.

2) Help to rapidly obtain quantities results needed to reach the decision.

3) Operate the ad hoc mode to suit the current needs of the user, as opposed to operating in a generally scheduled fashion as management reporting system do.

4) Support various stages of the decision making process.

5) Foster high-quality decision making by encouraging decisions based on the integration of available information and human judgment.

6) Offer flexibility as opposed to a preordained pattern of use – making it easy to accommodate the particular decision making style of an individuals.

7) Facilitate the implementation of the decisions which frequently cut across department boundaries.

8) Support group decision making particularly through group DSS (GDSS).

9) Give managers the opportunity to gain a better understanding for their business by developing and working with models.

Conclusion:

With in the past several years, `computers have been used increasingly in areas of financial management, production analysis, short-term planning and geographical analysis.Today’s business worlds, Computers are used for decision making process as a Decision support system. Decision Support System is types of management information system whose principal objective is to support a human decision maker during the process of arriving at decision. The strength of DSS lies in supporting decision making in situations where both human judgment and the power of the computer are required. DSS primarily support for strategic, tactical and operational planning.

Properly designed and integrated, the DSS becomes a very powerful support tool that enhances the productivity of professionals’ at all organizational levels in all departments. It can effectively extend the organization’s present staff by reducing its workload, thereby increasing productivity. And with today’s technology and state of the art software tools, it can bring us even closer to bridging the chasms and operations reach worlds. These features can offer today’s organizations pressed more than ever before to maximize efficiency while reducing costs unprecedented benefits in the utilization and management of both their human and computer resources.

Reference:

1) “Management Information System” by Viladimir Zwass

2) “The nature of Organizational Decision Making and the Design of Decision Support System” by George .P Huber.

3) “Introduction to Business Data Processing” by Lawrence S. Orillia

4) “Management Information System” by James O. Hicks JR


Source by Uma V Devi