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Information Systems and Decision Making

CHAPTER 1: INTRODUCTION TO DECISION SUPPORT SYSTEMS 1.1 HISTORY AND EVOLUTION OF DSS Early computer - used to automate repetitive calculation - processed numerical data (as in solving equation) Computer advances during World War II - calculate effective range of depth charges - calculate optimal trajectories for artillery shell 1950s: - electronic computers are used for commercial purpose - use to process business data (eg: processing corporate payroll) - such activities is known as: Electronic Data Processing (EDP)
Change to

Automatic Data Processing (ADP)

Shortened to

Data Processing (DP)

Change to

Transaction Processing Systems (TPS) Information Reporting Systems (IRS): arose when it is hard to obtain a single data element upon request managers request for a voluminous report containing every data element which could be relevant 1960s: - Management Information Systems (MIS) the idea was to store all forms data for access and correlation on demand by non-technical managers but it did not come true : distributed database were not yet available and the systems were not user-friendly. MIS then refer to commercially oriented information systems. 1970s: - Decision Support Systems (DSS) a more modest system (than MIS) to help make specific types of decision 1980s: evolution of DSS with easier end-user access to data. 1990s: data for DSS grown to data warehouse (close to early MIS concept to store all data) -

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1.1.1 Comparisons between TPS, IRS and DSS

Systems Characteristic User Community Usage Volume Database Usage Typical Software base Emphasis on ease of use Emphasis on processing efficiency Reason for development Transaction Processing Systems (TPS) Clerical & supervisory High Some reading, heavy updating Third Generation Language Low High Cost saving, customer service Information Reporting Systems (IRS) Supervisory & middle management Moderate Read-only Third-and fourth generation languages Moderate Moderate Reporting requirements, basic information for decision making Decision Support Systems (DSS) Individual knowledge workers, all management levels Moderate to low Primarily read-only Specialized languages, packages High Low Improved decisionmaking effectiveness

1.1.2 Other types of Information Systems (IS) Office information systems (OIS ) or Office automation systems (OAS) - improve the efficiency of handling information (words, images, schedules, etc) in an office. Executive information systems (EIS) - enable top managers of organization to obtain information to guide their decision Personal information systems - developed and used by one individual ( end-user computing) to improve personal productivity & efficiency. . Workgroup information systems - used to improve communication and coordination among members of a group who collaborate on a set of joint task. Expert Systems - follow rules that human use to make recommendation or conclusion from available data. Strategic information systems (SIS) - enable organization to gain competitive advantage.

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Information Systems and Decision Making

1.2 DEFINITION OF DSS Several definitions given to DSS HICKS-1993: - integrated set of computer tools allow decision maker to interact directly with computers to create useful information in making unanticipated semi-structured and unstructured decision. FREN-1996: - analytic model used to increase managerial or professional decision making by bringing important data to view. STAI-1997: - organized collection of people, procedures, software, database and devices - used to support problem-specific decision making. OZ-1998: - computer-based information systems design to help managers - select one of many alternate solutions to a problem. OBRI-1999: - computer-based information systems - provide interactive information support to managers - during the decision making process.

DECISION SUPPORT SYSTEM: Computer based information system whose primary purpose is to provide knowledge workers with information on which to based informed decision.

1.2.1 Characteristics of DSS: All DSS are.. Used by Used in making knowledge worker decisions

Information Systems

Support, but do not replace people

And some DSS are

Used in semistructured decision

Incorporate Models

Incorporate Database

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1.2.2 Benefits of DSS: Improving personal efficiency Improving Problem Solving Facilitating Communication Promoting learning or training Increasing organizational control 1.3 DATA AND MODEL MANAGEMENT Data = corporate asset must be managed 1.3.1 The Database: integrated collection of data, organized and stored in a manner that is easy to retrieve data are organize in logical hierarchy: - Database - Files - Records - Data elements Sources of data: a) Internal data - comes within the organization - normally from transaction processing system (TPS) - eg: payroll and salary data, sales data etc b) External Data - comes from the outside of organization - eg: industrial data, market research data, geopolitical economic data etc. - too many of them with internet and WWW (can get with no/little cost) c) Individual-level or private data - instance of used: decisions made, question asked, individual heuristics etc - tailoring the system to the needs of a specific user. 1.3.2 The Database Management System (DBMS): 2 responsibilities of DBMS: a) Coordinate tasks (store and access of information) and disseminating information (to users) b) Maintain logical independence between data and application.

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Functions of DBMS: a) Data Definition - provide a data definition language (DDL): allow users to describe the data entities and their associate attributes and relationship - allow for the interrelation of data from multiple sources b) Data Manipulation - provide users with a query language to interact with database - allows for capture & extraction of data - provides rapid retrieval of data for ad hoc queries and reports - allows for the construction of complex queries for retrieval and data manipulation c) Data Integrity - allows users to describe rules (integrity constraints) to maintain the integrity of the database - assist in the control of erroneous data entry based on defined integrity constraints d) Access Control - allows identification of authorized users - control access to various data elements and data manipulation activities within the database - track usage and access to data by authorized users e) Concurrency Control - provides procedures for controlling simultaneous access to the same data by more than one users f) Transaction Recovery - provides a mechanism for restart and reconciliation of the database in the event of hardware failure - records information on all transactions at certain points to enable satisfactory database restart. 1.3.3 The Model Base: modeling counterpart of the database contains various statistical, financial, mathematical, and other quantitative models used for analysis 1.3.4 Managing the Models (Model Based Management Systems (MBMS)): 2 responsibilities of MBMS: a) execution and integration of the models available to the DSS b) modeling of user preferences Functions of MBMS: a) Modeling Language - allows for the creation of decision models from scratch or from existing modules 5

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provides a mechanism for the linking or chaining of multiple models to allow for sequential processing and data exchange - allows the user to modify models to reflect specific preferences b) Model Library - Stores and manages all models and solver algorithms for easy access and manipulation - provides a catalog and organizational schema of stored models along with brief description of their individual functions or applications c) Model Manipulation - allows for management and maintenance of the model base with functions similar to those found in a DBMS (eg: run, store, query, delete, link, etc.)

1.4 DSS KNOWLEDGE BASE Each problem-solving need reasoning More structured decision require less reasoning and vice versa. Reasoning : process of deriving new information from a combination or combination of existing, or previously derived, information. Allow us to rely on information as fact (although unverified ones) Knowledge : rules, heuristics, boundaries, constraints, previous outcomes, and other knowledge that may have been programmed into DSS by its designer or acquired through repeated use of DSS. knowledge vs data vs model: - knowledge is a domain-specific construct, while data and models are useful across several domains or tasks Knowledge Base : where the knowledge of DSS is stored - contains information that is generally problem domain-specific DSS Knowledge base: all kinds of knowledge that might be use by a domain expert. Knowledge contains in knowledge base can be categorized into two groups: a) Fact : what we know to be true at a given time b) Hypothesis : rules or relationships that we believe exist between the fact.

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Knowledge Acquisition

Experts

- protocol analysis Knowledge - modeling + Engineer

- interviewing

Knowledge Base

How does all the knowledge get into the DSS?

Knowledge Retrieval

Inference Engine (IE) User

program module that activates all the domain knowledge that has been gathered & perform inferencing for a solution based on facts & relationship given

Knowledge Base

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1.5 USERS OF DSS

Top Executives

Executive Info. Systems

Middle Managers

Decision Support Systems

Individual Contributors

Transaction Processing Systems

1.6 CATEGORIES & CLASSES OF DSS Data-Centric and Model-Centric DSS - How far output system can be support the decision - Data-centric through data analysis or data achievement - Model-centric provide model technique like simulation or problem solving Institutional DSS vs. Adhoc DSS - Based on situation that the decision is made - Involve with repeated decision, can be developed time to time for problem solving especially operation control and management control problem - Solving specific problem and seldom to happen, like strategic planning and can be developed using multipurpose software Directed versus non-directed DSS or Individual and Group DSS - Directed means focus to individual whom doing the task, which is not, depends to other tasks - Non-directed means focused to group of man, who are, have related tasks and also focused to organization activities, which have related operation, organization function and also have many resources.

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Procedural and Nonprocedural Languages Systems - Procedural how to access data again and how to make calculation, for example: BASIC, COBOL, FOTRAN, PASCAL, C, and C++ - Non-procedural just needs to determine the needed output, like 4 th Generation Languages Software Custom-made System versus Ready-made System - Custom-made system have been developed for solve specific problem (nonroutine) - Ready-made system and can be adjust depends to situation for solve the problem.