Decision Support System: Challenges, Categories & Applications

“We may think that our decisions are guided purely by logic and rationality, but our emotions always play a role in our good decision making process.”

-Salma Stockdale

 

 

What is a Decision Support System (DSS)?

 

Decision Support System or in short DSS is a normal computer program that is used by companies to improve their decision making skills and capabilities. Using this application a huge volume of data can be analyzed and presented in a meaningful way so that decisions can be made. 

 

With the help of DSS companies can compile data from multiple areas and put it together. The stakeholders of the companies need data to make decisions. DSS helps to combine data and give so much more information to the stakeholders or the users apart from regular financial statements or reports. 

 

The following types of information can be generated using the decision support systems:

 

1. Prior period comparisons related to sales, purchases, profits and even trends.

 

2. Future projections related to sales, profits and demand.

 

3. Consequences of different decisions in the near future.

 

Let us talk about the features of DSS:

 

1. For all the unstructured or semi-structured problems, DSS is the perfect solution.

 

2. It also supports the managers in various managerial decision making. Be it top line managers or other executives, DSS acts as the best support system.

 

3. Be it any individual or a group, DSS helps in decision making. Every organization has groups or levels and they come across all types of problems.

 

4. Various decision styles and processes are supported.

 

5. DSS adapts with time and is flexible to make changes.

 

The Decision support system is not an operational program. It is informational. Informational programs are those that provide meaningful information to people using different sources of data that helps the users to base their decisions. On the other hand, operational programs are based on day to day activities and transactions done in any business. 

 

Components in a Decision Support System

 

There are 3 main components in a Decision support system and they are:

 

1. Knowledge Base

 

Knowledge base is a key component in the Decision support system. This component has information from internal and external sources. It is like a storehouse of information. 

 

It stores all the information of the Decision support system. The system of DSS uses information stored in the knowledge base to decide what the future steps will be.

 

2. Software

 

The software is the second component of the DSS. It is more like a simulation model which has to adapt based on the environment. The main aim of this component is to analyze and understand the overall working of the system and take corrective steps for improvement. 

 

These simulation models are used by companies to try how one decision will change the overall outcome for it.

 

3. User Interface

 

For best user experience and easy navigation a perfect interface is needed. The ultimate objective of a decision support system is to ensure that the user is able to extract the information contained in the system. Therefore, the DSS interface has a very simple window, navigation panels, languages and commands.

 

Also Read | Data Management: Types, Benefits and Challenges

 

Benefits of Decision Support System

 

Here are some benefits of using the Decision Support System:

 

1. It helps in improving the overall efficiency in decision making.

 

2. The control, competitiveness and habit of future decision making also increased with DSS.

 

3. The interpersonal communication skills are also enhanced through DSS as different departments have to communicate to ensure flow of information.

 

4. Unusual decisions are also sometimes made as DSS is used for non-programmed decisions. These unusual decisions can turn out to be the best.

 

5. The overall managerial automation also increased.

 

Challenges of a Decision Support System

 

There are so many challenges associated with the Decision Support System and its implementations. Some of the major ones are listed below:

 

1. Limited Capacity

 

The memory of DSS is limited and therefore storage and capacity issues will arise overtime. In order to remove these issues extra cost has to be invested.

 

2. Speed

 

We all know that large mainframes have good speed. The DSS is much slower than the mainframes. So speed issues will also arise.

 

3. Information Sharing

 

Basically, DSS is used by individuals and the information is shared according to that. But when multiple individuals are associated with a single DSS then the information sharing is also done accordingly. But unfortunately, DSS offers only limited sharing.

 

4. Conflicts

 

Several decisions have to be taken at once. So, using DSS for several decisions by multiple individuals can lead to conflicts. 

 

5. Extensive Information and Knowledge

 

DSS is a computer application so to operate it we need extensive knowledge. Not everyone is updated and has it. So, training and skill development courses have to be taken. It will not only increase the cost but also make other less knowledgeable people feel inferior to others.

 

6. Other Problems

 

There are models on which DSS is based (for example- simulations).  So, translation issues can also arise as understanding so many different models is definitely not easy.
 

Also Read | Steps involved in Decision Making Process

 

Categories of Decision Support System

 

“You may not control all the events that happen to you, but you can decide not to be reduced by them.”

-Maya Angelou

 

The first ever DSS was a model driven system that was used way back in the 1960s. Then with time more categories came. In the 1980s, spreadsheet based DSS was also implemented. 

 

Then in the 1990s knowledge and web based systems were implemented. So, based on the history of DSS we can categorize them into following types:

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Categories of Decision Support System

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1. Model Driven Decision Support System

 

This model was based on a quantitative model. It processes numbers and helps in financial modeling. It was used in making decisions related to production planning, management and scheduling of orders etc. It is basically prefered by manufacturing companies.

 

2. Data Driven Decision Support System

 

Data Driven DSS emphasized on processing data related to a specific task. It was more useful where time series data was available. Nonetheless, it also helped in basic functionalities of a business. Decision making became very easy using a Data driven system.

 

3. Communication Driven Decision Support System

 

Communication driven DSS primarily focused on communication related issues and networks for making decisions. Communication is the biggest point of difference between all the other models of DSS and this one. This model uses audio, videos and even video conferencing as a basis for making decisions.

 

4. Document Driven Decision Support System

 

Document driven as the name suggests compiles information from large document databases. This database contains all sorts of information like videos, texts, files, recordings, audios. 

 

This DSS can be used to compare figures, minutes, product specs and any other information. The document driven DSS also stores the information given above.

 

5. Knowledge Driven Decision Support System

 

The knowledge driven decision support system was first implemented in the mid 1990s and it works on problem solving. It helps to combine the machine and human cognitive ability to make more powerful and influential decisions. 

 

The main point here is that machines have expertise in one domain and by mixing it with human intelligence a much better outcome can be achieved.

 

6. Web Based Decision Support System

 

The web based decision support system is a more enhanced version of the old models of DSS. It uses the web and the internet to gather information and analyze it. It adapts and changes with the advancements in the technological world.

 

Also Read | Basics of Decision Intelligence

 

Applications of Decision Support System

 

“Great decision-making comes from the ability to create the time and space to think rationally and intelligently about the issue at hand.”

-Graham Allcot

 

A Decision Support System has numerous applications. There are so many day to day activities that are done with the help of DSS. The best example of it is- GPS. Apart from it you can see your computer usage. Whenever you open a browser and use the search engine you have used DSS. 

 

Some prominent business related applications of a Decision Support System are given below:

 

1. Agriculture

 

Agriculture is one of the areas in which DSS is used. It might sound impossible but there are many farmers that use DSS to understand the crop yield and the best time for plantations. It helps farmers to minimize their losses due to unplanned crop planting or loss of crops due to storms.

 

2. Education

 

Education industry is very big. Colleges, schools and industries have implemented the DSS to keep a tab on the students enrolled. 

 

It also helps the colleges and universities to predict how many students will enroll next year in a particular program. It will also help to estimate if the seats are sufficient or the students are sufficient for the program and costs.

 

3. Real Estate

 

For real estate comparing the prices of homes is important as customers will buy the property after comparing the prices only. With DSS, comparisons can be done.

 

4. Weather Forecasting

 

You must have seen news channels and apps that show weather predictions. All hazards, floods, earthquakes or any kind of potential disasters can be predicted using the DSS based on data analysis. All the historical data, past trends about disasters and potential damage can be determined.

 

5. Medicine

 

In medicine, using a DSS is called clinical DSS. In the field of medicine, we can do research work, preventive analysis and other follow up issues. Medicine related orders can also be determined using DSS. So, DSS is very useful in the medicine industry as well.

 

Also Read | How Business Analytics impacts Decision Making in Businesses

 

The Decision Support System has gained more popularity now than in earlier times. Now different sectors have implemented a DSS like military, defense, hospitals, security, manufacturing and even medicine. 

 

Everyone understands the importance of decision making in different situations. Therefore, companies are implementing a DSS based on their use. All the human deficiencies can be removed and covered using a computerized system. 

 

AI based systems can easily cater to the needs of managers and top level executives and give them a prediction and a blueprint about what the future course of action should be. But the ultimate decision making lies with the humans only. Machines and softwares can only assist you.