Decision Support,

Analytics, and
Business Intelligence
Decision Support,
Analytics, and
Business Intelligence
Third Edition

Daniel J. Power and Ciara Heavin

Decision Support, Analytics, and Business Intelligence, Third Edition

Copyright © Business Expert Press, LLC, 2017.

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 Abstract
The rapidly changing nature of technology is impacting organizations
large and small. New phenomena such as mobile, cloud, Internet of
Things (IoT), and “Big Data” are driving forces in organizational d ­ igital
transformation. Subsequently, decision support and decision support
systems are no longer specific to senior management. Increasingly com-
puterized decision support, in the form of data analytics and business
intelligence, is available to knowledge workers across the business. Today
business professionals need to learn about and understand computerized
decision support. For organizations to succeed, a business-first approach
is essential. This means that the business opportunity/problem is well
understood and the most appropriate computerized decision support
technology is obtained.
This introductory text is targeted to busy managers and MBA students
who need to grasp the basics of computerized decision support, includ-
ing: What is analytics? What is a decision support system? What is “Big
Data”? What are the “Big Data” business use cases? Overall this resource
addresses 61 fundamental questions relevant to understanding the rapidly
changing realm of computerized decision support and analytics.
In a short period of time, readers can “get up to speed” on decision
support, analytics, and business intelligence. The text then provides a
quick reference to important recurring questions.

Keywords
analytics, basic concepts, big data, business applications, business intel-
ligence, computerized support, data, decision making, decision support
systems, decision support, innovative DSS, knowledge management,
knowledge, types of decision support
 Contents

Acknowledgments�����������������������������������������������������������������������������������ix
Introduction������������������������������������������������������������������������������������������xi

Chapter 1 Modern Decision Support�������������������������������������������������1

Chapter 2 Decision Support Concepts���������������������������������������������21
Chapter 3 Recognizing Types of Decision Support���������������������������35
Chapter 4 Using Big Data for Decision Support�������������������������������55
Chapter 5 Business Intelligence and Data-Driven DSS���������������������75
Chapter 6 Predictive Analytics and Model-Driven Decision Support���95
Chapter 7 Decision Support Benefits and Trade-Offs���������������������119
Chapter 8 Identifying Decision Support Opportunities������������������137

List of Questions with Links to Answers������������������������������������������������151

Glossary���������������������������������������������������������������������������������������������155
Notes�������������������������������������������������������������������������������������������������163
Bibliography���������������������������������������������������������������������������������������169
Index�������������������������������������������������������������������������������������������������177
 Acknowledgments
Many people over the years have contributed to the ideas and advice
developed in the three editions of this book—our students, readers of
Decision Support News, faculty colleagues, friends in various s­oftware
companies, and friends associated with the BeyeNETWORK, a
TechTarget company. Also, DSSResources.com has been a vehicle to
­communicate ideas and to get feedback. It provides “comprehensive
resources for business intelligence and data warehousing professionals.”
The actual production of this improved and expanded third edition is
the result of the efforts of many people. Thanks to Laura Lynch in BIS,
University College Cork and to everyone at Business Expert Press (BEP)
and affiliated organizations.
Last, and most importantly, we want to acknowledge the invaluable
help and support of our families. Dan thanks his wife Carol and sons
Alex, Ben, and Greg. Ciara sends thanks to her husband Finian, sons
Oisin and Ronan, and to her Mum and Dad.
Our families motivated us to make this contribution toward improv-
ing decision making in organizations.
 Introduction
Decision makers need better, faster, more accurate data/information to
make decisions. The volume, availability, and speed of real-time data
continue to be an ongoing challenge for organizations coming to grips
with their data needs. Further, businesses are increasingly focused on the
opportunities arising from valuable data insights. In this environment,
managers and other business professionals need to adopt information
technology solutions that provide a decision-making edge.
Today decision makers require extensive knowledge about informa-
tion technology solutions, especially computerized decision support and
data analytics. Rapid technology change and innovation make this task
challenging, but managers have an obligation to shareholders to learn
about and understand data analytics, business intelligence, mobile BI,
and decision support. This book is a knowledge resource targeted to busy
business professionals, including managers and MBA students who want
to learn the basics of decision support and analytics.
Professionals should buy and read this primer on analytics, business
intelligence, and decision support because it provides an overview of fun-
damental concepts related to computer support for decision making and
answers to questions about using technology in a range of roles in recur-
ring and semistructured decision situations. There is a real need to contin-
ually adapt to competitive challenges and find ways to use technology to
act faster, to act smarter, and to engage customers and stakeholders. Deci-
sion making is speeded up and the information available is overwhelming.
No longer do we have large, uninterrupted blocks of time to contemplate
and reflect; rather, judgments are often hurried and information is incom-
plete. In this period of change and turmoil, technology not only causes
information overload problems that decision makers encounter, but also
provides tools to filter and manage information to provide more relevant
and useful information to decision makers when they need it and want
it. We have come to expect that information and communications tech-
nologies are typically always part of the solution to business problems.
xii Introduction

Some topics covered in subsequent chapters include: What is business

intelligence (BI)? What is a decision support system (DSS)? What is deci-
sion automation? What do managers need to know about computerized
decision support? What are best practices for BI reports? How does big
data impact decision support and analytics? What are characteristics of
a “good” data scientist? Are there strategic decision-making big data use
cases? The goal in assembling this resource has been to address fundamen-
tal questions that are relevant to understanding computerized decision
support, analytics, and business intelligence.
In a few hours of reading and skimming, most decisions makers can
enhance their understanding of decision support, data analytics, and
business intelligence. Following familiarization with the content, this
book then serves as a quick reference for answers to important recur-
ring questions. Questions are arranged in a logical order with a mix of
both general and more specialized questions of interest to managers and
future managers. Decision support basics are fundamental definitions,
facts, and principles about using information technologies to assist in
decision-making processes.
Understanding the basics can help business professionals better realize
their decision-making needs and evaluate software vendor claims and can
facilitate implementation of computerized decision support. In general,
achieving the benefits of decision support capabilities advertised by a soft-
ware vendor is a function of (a) technology fit to the business problem
or need (b) the software purchased, (c) implementation activities, and
(d) knowledge and training of technology staff and users.
It is easy for software vendors and system integrators to promise ben-
efits from decision support, but often much harder to deliver them. DSS
have been in use for many years, so it is likely that some readers have been
involved with decision support, some may have taken relevant courses,
and some have been on decision support project teams. Over the years,
various experiences have convinced us that decision technology solutions
can help make better decisions, and help organizations operate better and
compete more effectively.
We want to make better decisions and to adapt to changing needs of
business and the external environment. By communicating in a common
language that is meaningful for both business and technology people, we
 Introduction xiii

can use decision support and data analytics to find new ways to promote
flexibility in our organizations and to compete more effectively. Meet-
ing these goals is only possible today if we use more and better comput-
ing and information technologies in novel ways to gather and process
relevant data or information and disseminate it to decision makers in
a timely manner. Computers and more recently mobile computing, the
global Internet, and wireless communications dominate the technology
environment of 21st century businesses and organizations.
An organization’s future is impacted by many internal and external
factors and changes, but managers also initiate change and can build
and embed decision support capabilities that help meet real business
needs. There are many benefits of analytics, BI, and decision support,
but informed users can support the systems technologists to build and
implement better solutions, and knowledgeable managers can help iden-
tify obsolete or poorly designed legacy systems. Managers with knowl-
edge of decision support technologies can intelligently discuss potential
applications and perceived needs with technology specialists. Knowledge
about decision support and analytics concepts and practice are rapidly
changing, so this book is a progress report and not a final record made
after a completed journey.
Decision support has been useful and companies and managers will
realize even greater benefits from modern decision support, analytics,
and business intelligence. Subsequent chapters provide our perspective
about how computers and information technology can assist business
professionals in decision making.
 CHAPTER 1

Modern Decision Support

Managers must make decisions in an increasingly complex, rapidly
changing, volatile, and ambiguous environment. This environmental tur-
bulence and the challenges of global digitalization increase the risks for
managers and organizations. To help reduce and manage risk, now is an
opportune time to implement more and better computerized decision
support. Managers should implement or update systems to provide better
business intelligence (BI), analytics, big data, and other types of com-
puterized decision support. This turbulent environment should motivate
managers to evaluate computerized decision support projects to ensure
they are serving the purpose for which they were intended. What has
changed? Modern decision support is more useful and more sophisticated
and decision support technology has become very sophisticated.
In the past 35 years, software vendors have regularly used new terms
for capabilities associated with decision support. For some vendors, leg-
acy terms such as decision support system (DSS) were rejected as too
general, while for others legacy terms reminded potential customers of
failed projects or unrealistic expectations. Terms such as analytics and big
data provided a new way to sell decision support capability. Despite the
changing terminology, managers continue to want and need computer-
ized information systems to support their decision making.
Decision support does not ensure correct decisions. One hopes ven-
dors have realized it is important to identify and better manage customer
expectations. Decision support applications differ widely depending
upon the purpose of the system and perceived need. Current technolo-
gies can support a wide range of decision-making tasks. Decision support
consultants, designers, and researchers have learned much about using
information technology (IT) solutions to support decision making and
that knowledge can benefit managers and their organizations.
2 DECISION SUPPORT, ANALYTICS, AND BUSINESS INTELLIGENCE

Prior research and experience support two fundamental premises

associated with computerized decision support. First, computers and IT
can improve the timeliness, accuracy, completeness, and availability of
information. Subsequently, this can help people make better decisions.
Second, computerized decision support keeps people at the center of
the decision-making process by assisting and supporting managers in
their role as organizational decision makers. The overriding goal of com-
puterized decision support developers is unchanged—improve human
decision-making effectiveness and efficiency with IT solutions.
Many organizations have integrated computerized decision support
into day-to-day operating activities and use systems for performance
monitoring. Frequently, managers download and analyze sales data, cre-
ate reports, and analyze and evaluate forecasting results. DSS can help
managers perform tasks, such as allocating resources, comparing budget
to actual results, drilling down in a database to analyze operating results,
projecting revenues, and evaluating scenarios. Data warehouses were
initially created as large clearing houses for transaction processing and
routine reporting, providing the organization with a “single version of
the truth” or a unified single view of their data. More recently, data ware-
houses are used with sophisticated predictive models and analytic tools
for advanced ad hoc querying and sophisticated data analytics.
Decision support research began in the 1960s and the concepts of
decision support, decision support systems, and the acronym DSS remain
understandable, intuitively descriptive, and even obvious in meaning.
Related terms such as analytics, BI, knowledge management (KM),
and big data are of more recent origin and are interpreted in different ways
by vendors and consultants. Decision support is a broad concept that pre-
scribes using computerized systems and other tools to assist in individual,
group, and organization decision making. One goal in this and succeeding
chapters is to make some sense out of the decision support jargon.
The eight questions included in this chapter discuss the need for deci-
sion support, the theory behind decision support, a characterization of
organizational decisions, the importance of framing decisions, the typical
features and users of a modern DSS, and the technology skills and the
knowledge needed by managers and targeted users. The final question
examines why some managers resist DSS.
 Modern Decision Support 3

What Is the Need for Decision Support?

Today decision making is more difficult: the need for decision-making
speed has increased, overload of information is common, and there is
more distortion of information. The rapidly changing pace of technol-
ogy and the exponential increase in the speed and volume by which data
is generated on a daily basis have compounded the challenges faced by
decision makers. On the positive side, there is a greater emphasis on fact-
based decision making. A complex decision-making environment creates
a need for computerized decision support. Research and case studies pro-
vide evidence that a well-designed and appropriate computerized DSS can
encourage fact-based decisions, improve decision quality, and improve
the efficiency and effectiveness of decision processes. Most managers want
more and better analyses and fact-based decision-relevant reports quickly.
Managers do have many and increasing information needs. The goal of
many DSS is to create and provide decision-relevant information. There
is a pressing need to use technology to help make decisions better. Deci-
sion makers perform better with the right information at the right time.
In general, computerized decision support can help acquire, codify, and
store data and information and transfer and organize information and
knowledge. Effective decision support provides managers with more
independence to retrieve and analyze data and information in the form
of documents, and more recently rich media such as audio and video, as
they need them.
From a different perspective, we need decision support because we
have decision-making biases. Biases distort decisions. Reducing human
decision-maker bias has been a secondary motivation for decision sup-
port, but it is an important one. Most managers accept that some people
are biased when making decisions, but doubt a computerized solution
will significantly reduce bias. Evidence shows information presentation
and information availability influence and bias a decision maker’s think-
ing both positively and negatively. Evidence shows system designers can
reduce the negative bias. Also, evidence shows decision makers “anchor”
on the initial information they receive and that influences how they inter-
pret subsequent information. In addition, decision makers tend to place
the greatest attention on more recent information and either ignore or
4 DECISION SUPPORT, ANALYTICS, AND BUSINESS INTELLIGENCE

forget historical information.1 Good decision support software can reduce

these and other biases such as confirmation bias, that is, a decision mak-
er’s overreliance on positive cases to inform a decision, overestimating
the likelihood of being right, and overgeneralizing from too little or
minimum available information.
Managerial requests for more and better information, today’s fast
paced and technology-oriented decision environments, and significant
decision-maker limitations create the need for more and better comput-
erized decision support. Managers should strive to provide computer-
ized decision support when two conditions associated with a decision
situation are met: (a) good information is likely to improve the quality
of a decision and subsequently the decision outcome, and (b) poten-
tial users recognize a need for and want to use computerized support in
that situation.
Introducing more and better decision support in an organization does
create changes and challenges for managers. For example, mobile com-
puting, using smart phones with decision support applications or tablet
devices connected to the Internet and corporate databases is a big change.
The pervasive use of these technologies requires managers to have new
skills and new knowledge. The increased focus on sensor technology and
the growth of the Internet of Things (IoT), which, with heightened per-
vasive connectedness, is morphing into the Internet of Anything (IoA),
has opened the door for new types of applications and services, including
new opportunities for computerized decision support. These technologies
are beginning to fundamentally change the way we do things. Far from
the single unified view of data in a traditional data warehouse, mobile
and IoT are pushing managers and organizations to take a more holistic
view of the availability, processing, and analysis of data/information in an
increasingly global digital ecosystem.

What Is the Theory of Computerized Decision Support?

Past practice and experience often guide computerized decision support
development more than theory and general principles do. Some develop-
ers have concluded each decision situation is different so no theory is pos-
sible. Some academics argue that we have conducted insufficient research
 Modern Decision Support 5

to develop theories. For these spurious reasons, a theory of decision sup-

port has received limited discussion in the literature. Nobel Laureate
Economist Herbert Simon’s writings provide a starting point for a theory
of decision support. From his classic book, Administrative Behavior,2 are
derived three propositions:

Proposition 1: If information stored in computers is accessible when

needed for making a decision, it can increase human rationality.
Proposition 2: Specialization of decision-making functions is largely
dependent upon developing adequate channels of communication
to and from decision centers.
Proposition 3: When a particular item of knowledge is needed repeat-
edly in decision making, an organization can anticipate this need
and, by providing the individual with this knowledge prior to deci-
sion making, can extend his or her area of rationality. Providing this
knowledge is particularly important when there are time limits on
decisions.

From Simon’s article3 “Applying Information Technology to Organi-

zation Design” are three additional propositions:

Proposition 4: In a postindustrial society, the central problem is not

how to organize to produce efficiently, but how to organize to make
decisions—that is, to process information. Improving efficiency will
always remain an important consideration.
Proposition 5: From the information processing point of view, division
of labor means factoring in the total system of decisions that need to
be made into relatively independent subsystems, each one of which
can be designed with only minimal concern for its interactions with
the others.
Proposition 6: The key to the successful design of information systems
lies in matching the technology to the limits of the attention of
users. In general, an additional component, person or machine, for
an information-processing system will improve the system’s perfor-
mance when it:
1. has a small output in comparison with its input, so that it conserves
attention instead of making additional demands on attention
6 DECISION SUPPORT, ANALYTICS, AND BUSINESS INTELLIGENCE

2. incorporates effective indexes of both passive and active kinds.

Active indexes automatically select and filter information; they
promote the rapid discovery of data/information.
3. incorporates analytic and synthetic models, using datasets, vari-
ables, and business assumptions and mathematical algorithms,
that are capable of solving problems, evaluating solutions, and
making decisions. Models are built to replicate real-world sce-
narios and should be based on business manager’s perceptions
and understanding of reality.

In summary, computerized decision support is potentially desir-

able and useful when there is a high likelihood of providing relevant,
high-quality information to decision makers when they need it and
want it.

What Are The Characteristics of Decisions?

Managers make many decisions and the characteristics of each decision
determine if analytics and decision support are appropriate, and if so,
what support is most useful. Decisions are made as part of processes and
decisions result in outcomes. A decision may involve assessing and eval-
uating alternatives using data sets, variables, and algorithms. The quality
of a decision is often impacted by the type of process or path that is pur-
sued in making and implementing a decision. Organizational decision
environments are typically characterized by a rational decision-making
approach. Rationality is “the quality of being consistent with or based
on logic.” Some definitions also assert rationality is “the state of having
good sense and sound judgment.” So rational thinkers base decisions on
logic and have good sense and sound judgment. Managers and responsi-
ble decision makers attempt to be rational, wise, and thoughtful in their
decision making.
Decisions vary widely in structure and complexity; see Table 1.1.
Some decisions are characterized by their concise, clear, well-defined, and
structured nature. These are typically known as operating or function-spe-
cific decisions. This type of decision is usually routine, occurring regularly
and frequently, that is, daily or weekly. Tactical decisions are typically
 Modern Decision Support 7

Table 1.1  Fundamental characteristics of decisions

Decision Decision
maker type Frequency Characteristics Data source
Operational Operational Routine i.e. Well defined, con- Internal
Management daily, weekly cise, structured
Middle Tactical Monthly, Often part of Typically internal
Management performance ­problem has clear-cut although external
reporting answer provided by sources such as
accepted procedure, suppliers can
semistructured come into play
Senior Strategic Ad-hoc, Complex, difficult to Internal and
Management strategic define, information External—wide
decision may be unknown variety of data
making or unavailable, sources, types and
­unstructured. formats
­Decision making
judgement and
­intuition is required

semistructured in nature—this means that some but not all of the infor-
mation necessary to make the decision is available. These decisions are
mostly internally focused and may even be specific to an individual busi-
ness function. Other decisions are more complex. Some variables may
not be well understood, often information required to make the decision
may be unavailable or incomplete, and in some cases information may be
known to be inaccurate. Classified as strategic decisions, these are usu-
ally complex, unstructured decisions involving many different and con-
nected parts. These decisions usually involve a high degree of uncertainty
about outcomes. If implemented, strategic decisions often result in major
changes in an organization.
The characteristics of decisions go beyond the attributes outlined
in Table 1.1 to include other aspects, such as risk and the anticipated
amount of management consideration or management discussion. Evalu-
ating the level of these characteristics can assist in determining if comput-
erized decision support will be useful in a decision process. Simon (1960)4
identified three stages in a decision process: (1) Intelligence—informa-
tion gathering and problem identification, (2) Design—creating or iden-
tifying alternative courses of action, (3) Choice—selecting a course of
action. Decision support may be appropriate in all, one, or none of the
8 DECISION SUPPORT, ANALYTICS, AND BUSINESS INTELLIGENCE

stages. Now let’s briefly consider three characteristics models proposed

by Snyder (1958),5 Hage (1980),6 and the Bradford Group, Astley et al.
(1981).7 Identifying characteristics of a decision can help to better under-
stand organizational decisions and decision processes.

Snyder Model

Snyder (1958) developed a decision-making approach for studying polit-

ical phenomena. His major contribution is a typology of decision situa-
tions. Snyder argues that three key variables, in addition to the decision
situation, explain decision-making behavior: (1) spheres of competence,
including specialized functions, authority relations, the basis of participa-
tion, and reciprocal expectations; (2) communication and information;
and (3) motivation of the decision makers, including personality of deci-
sion makers. Snyder’s analysis emphasizes the interaction of the decision
maker with the various elements of the situation.

Hage Model

According to Hage (1980) the process by which decisions are made can
be predicted, even if it appears to be a highly unique phenomenon. Hage
defines 13 characteristics of a single decision trajectory, listed in Table 1.2.
For high-risk decisions, Hage hypothesizes that high risk of the deci-
sion issues is positively related to intensity of information search, amount
of discussion, and stability of coalitions. Low-risk decisions, according to
Hage, have different decision processes that are determined by the fre-
quency of occurrence of the decision issue.

The Bradford Group Model

Astley et al. (1981), a group of researchers at the University of Brad-

ford, argue that there are two fundamental factors that explain the nature
of decision making: (1) the task complexity of the decision and (2) the
political cleavage of the interests involved. The Bradford Group define
complexity as the extent to which the topic of the decision-making pro-
cess is made up of multiple considerations and is difficult to evaluate.
 Modern Decision Support 9

Table 1.2  Characteristics of a decision trajectory (Hage 1980)

(1) Degree of routinization is the extent to which specified steps in the process are
defined and used;
(2) Degree of delegation is the extent to which the bulk of the process occurs at lower
echelons;
(3) Duration is the length of time between the first proposal and final decision
outcome;
(4) Intensity of participation is the amount of effort each interest group expends;
(5) Amount of discussion is the amount of time spent considering verbally the
decision issues;
(6) Extensity of participation is the number of interest groups involved;
(7) Amount of information search is the extent to which the interest groups seek
facts relative to a decision issue;
(8) Stability of coalition refers to the extent of change in the combination of people
governing the organization;
(9) Amount of joint creation is the extent to which the final decision outcome is the
product of the ideas of various interest groups and/or individuals;
(10) Amount of negotiations is the amount of time spent bargaining;
(11) Amount of deliberate delay is the amount of time spent in avoiding a final
decision;
(12) Amount of conflict is the extent of disagreement among the interest groups; and
(13) Duration of conflict is the amount of time the disagreement continues.

Astley et al. think that complexity may be measured by a combination

of indicators; (1) by the rarity or novelty of a topic, (2) by the precision
or specificity of the criteria for evaluating a topic, and (3) by the clarity
of the definition of the topic. They define cleavage, a concept taken from
the political science literature, as the extent to which interested parties to
the decision tend to split apart. Astley et al. note that the two concepts of
complexity and cleavage are related and that they interact. The Bradford
Group hypothesize that complexity and cleavage explain the content or
activities of the decision-making process.
Decision making is central to all managerial activity. By exploring the
characteristics of decisions, our aim is to help managers begin to unpack
the complexity of organizational decisions. The three characteristics mod-
els considered here are relevant and useful for evaluating decision pro-
cesses. However, it is clear that they lack consensus. So managers need to
exercise caution when selecting a characteristics model, as similar deci-
sions in different companies or across industries are likely to have dif-
ferent characteristics. Nonetheless, these decision characteristics models
should be used to understand context-specific decision making, with a
10 DECISION SUPPORT, ANALYTICS, AND BUSINESS INTELLIGENCE

view to developing organizational decision support and decision evalua-

tion capabilities in the future.

When Is a Decision Framed Properly?

Decisions occur in the context of a situation. Placing boundaries or creat-
ing a frame for a decision in terms of who the decision maker(s) is (are),
the time period for making a decision, the objectives relevant to making
the decision, and other factors can help us provide any needed decision
support. A poorly framed decision results in bad decisions. Poor fram-
ing can lead to choosing inappropriate decision support and may make
the consequences of a bad decision worse. Both managers and decision
support staff need to know a decision is properly framed.
The first issues that must be resolved are: what is a decision “frame”
and what does it mean to “frame” a decision? A frame in terms of a deci-
sion can be quite abstract, but if we think of a picture frame or a door
frame or the frame for a house, the metaphor becomes more meaningful.
A frame creates a boundary or a border. We want to focus on what the
frame encloses. The frame also is a structure and the structure has form
and function. So a picture frame may be made of wood and have beveled
edges and yet it continues to serve its function and enclose a photo. Also,
framing is a process whether we are framing a house or framing a deci-
sion. Processes have steps and purposes. Each step in a process may have
outputs or results. Explaining the frame metaphor can perhaps improve
our ability to frame decisions.

Some questions to assist in framing a decision:

1. What problem or problems need to be resolved?

2. What constraints, if any, limit alternatives?
3. What is the timing for making this decision?
4. Is this decision part of a sequence of decisions? Do other decisions
need to be made prior to making this decision?
5. What are the negative consequences of making the wrong decision?
6. Who is/are the decision maker(s)?
7. What information is needed? What information do we have?
 Modern Decision Support 11

8. Who will be impacted by this decision?

9. What factors, if any, are flexible? are fixed?
10. What objectives are relevant to making the decision?
11. How will the effectiveness of the decision be determined or mea-
sured?

Framing is done using language. People can perceive the same deci-
sion situation and frame it differently. Conceivably multiple frames can
be appropriate and useful in understanding a complex decision situation.
Arguably, the more important the decision or the more frequently it is
made the greater the need to understand whether the decision is well-
framed and correctly formulated.
According to Stephen Barrager (2015),8 a strategic decision is prop-
erly framed when we have identified four elements: (1) a decision hierar-
chy, (2) a strategy table, (3) a decision diagram, and (4) scenarios.

1. A Decision Hierarchy helps to define and focus the decision and

explains how it relates to other decisions in the organization.
2. A Strategy Table illustrates and documents the main logical and
alternate paths possible in a decision situation.
3. A Decision Diagram is a depiction of the relationship between a
decision and relevant decision goals and objectives.
4. A Scenario depicts uncertainties related to a decision and helps con-
sider “what-if ” questions.

These four tools are only some of the techniques that may be used to
help managers explicitly articulate the scope and boundary of a decision
and subsequently operationalize the appropriate decision-making process.
Essentially, these four are candidate tools. The wide range of tools high-
lights the importance of decision framing or problem formulation. Most
importantly, the notion of a formal decision-framing activity is integral
to the success of the decision and to selecting appropriate decision sup-
port. Often DSS projects do not allocate enough resources to explicitly
support framing the decision and creating a shared vision of the decision
situation, including the level of uncertainty involved and how the future
is perceived.
12 DECISION SUPPORT, ANALYTICS, AND BUSINESS INTELLIGENCE

Concluding that a frame is appropriate and useful results from asking

and answering questions.

Some questions to evaluate a decision frame:

1. Are we focused on the right problem(s)?

2. How well defined is the scope of the problem?

Answering these questions is an important step to ensure that a Type

III error is reduced, that is, we want to reduce “the probability of hav-
ing solved the wrong problem when we should have solved the right
problem,” (cf. Mitroff and Featheringham 1974).9
Framing influences choices (Tversky and Kahneman 1974).10 A deci-
sion frame provides the window to gather intelligence, generate alterna-
tives, make choices, and implement a decision. Proper framing increases
the likelihood of good decisions.

What Is Typical of Modern Decision Support?

Modern decision support started to evolve in about 1995 with the spec-
ification of HTML, expansion of the World Wide Web in society, and
the introduction of handheld computing. Web 2.0 technologies, mobile
integrated communication and computing devices, and improved soft-
ware development tools have revolutionized decision support user inter-
faces. Additionally, company decision support data stores are growing in
size and contain varied, extensive, and typically unstructured big data.
The fourth generation of computerized decision support is maturing.
We need to recognize that analytical systems often have multiple
capabilities. Attributes of contemporary analytical and decision support
systems typically include the following:

1. Access capabilities from any location at any time.

2. Access very large historical data sets almost instantaneously.
3. Collaborate with multiple, remote users in real time using rich media.
4. Receive real-time structured and unstructured data when needed.
5. View data and results visually with excellent graphs and charts.
 Modern Decision Support 13

Change is accelerating. Where is the current leading edge and what

technologies are on the horizon that can be exploited to build more
advanced decision support? New data management technologies like
Hadoop, Hive, and Pig have been popularized by the allure of big data
analytics and the promise of improved decision-making capabilities. In
terms of data storage, NoSQL or “not only SQL” databases like Cassan-
dra, MongoDB, and CouchDB are heralded as DBs of choice to store and
manage unstructured big data. Though the adoption of relational data-
base systems (RDBMs) for decision support has slowed, it they continue s
to dominate the paid database market with market leader Oracle RDBMs
claiming approximately 40 percent. Data visualization software like Tab-
leau and Qlik and visual simulation modeling tools continue to grow in
popularity. These technologies are used to support the accessibility and
availability of new business insights to key decision makers. Software such
as R is widely used for sophisticated statistical modeling, while new lead-
ing-edge open-source business intelligence and modeling tools provide
rich features, advanced decision support, and enterprise data analytics.
Modern BI and DSS have more functionality than systems built prior
to the widespread use of the Internet and the World Wide Web. Manag-
ers are choosing to implement more decision automation with business
rules and more sophisticated knowledge-driven decision support. Current
systems are changing the mix of computing and decision-making skills
needed by managers in organizations. Managers are realizing that better
computerized decision support is crucial for competing in a global busi-
ness environment. New software and hardware technologies make it pos-
sible to innovate and develop DSS with new uses. There is an opportunity
to identify real unmet needs and new requirements for innovative DSS
2.0 applications. Technology developments seem to lead opportunistic
DSS innovation. New technologies enable innovative decision support
application developments.

Who Uses Computerized Decision

Support and Analytics?
Traditionally, many researchers and consultants have treated computer-
ized decision support as something that is important to senior managers
14 DECISION SUPPORT, ANALYTICS, AND BUSINESS INTELLIGENCE

involved in areas such as financial services and manufacturing. The trend

toward data-centric organizations has heightened the need for comput-
erized decision support, BI, and analytics tools in the form of PC-based,
online, and mobile systems. In line with this trend, the availability and
use of these tools outside of senior management roles has increased. Many
people use computerized decision support for work and in recent years to
aid personal decision making. Identifying the targeted or intended users
for computerized decision support helps to refine, focus, and differentiate
the specific system. Knowing who does or will use a decision capability
helps to inform the content and design of the application.
Let us review examples of targeted users for decision support, BI, and
analytic systems.
In 1978, Keen and Scott Morton11 described six diverse systems
and targeted user groups. These included: (1) a DSS to help investment
managers with a stock portfolio, (2) a DSS used by the president of a
small manufacturing company to evaluate an acquisition prospect, (3)
an interactive DSS used by product planners for capacity planning, (4) a
model-driven DSS used by a brand marketing manager for making mar-
keting allocations, (5) the geodata analysis and display system (GADS)
used to redesign police beats, and (6) a DSS to explore and define alter-
native school district boundaries. These innovative unique DSS pro-
vided previously unavailable data and information in new formats to
key decision makers; however, these technologies were siloed and highly
domain-specific in focus.
Almost 40 years later, the “Age of the Customer” and the development
and use of sophisticated digital applications has redefined business deci-
sion support needs and opportunities in areas such as financial services,
retail, aviation, medicine, sports, and hospitality. With an increasing
focus on customer-based insights, DSS are used as a means of building
relationships with customers and disrupting customer engagement. Cus-
tomer-facing organizations are building and buying DSS, BI, and data
analytics capabilities to better understand their customers, partners, and
competitors while creating new revenue streams.
In financial services, managers and staff implement and use analytics,
particularly predictive analytics, in credit scoring, underwriting, collect-
ing past due accounts, increasing customer retention and up-selling, and
 Modern Decision Support 15

for detecting cybercrime and fraud. According to Sarah Murray (2016)

Financial Times columnist, clothing retail firms continue to make signifi-
cant investment in DSS, BI, and data analytics to harness the valuable data
they acquire in-store, online, and via mobile and social media sources.12
For digital marketing staff, clothing designers, and store managers, the
focus is on building an improved understanding of customer behavior to
make more timely predictions about upcoming fashion trends ahead of
the competition.
Professional sports teams commonly use decision support and data
analytics.13 Team sports marketers and ticket brokers need DSS to bet-
ter understand their customer base by asking questions such as—How
long has a customer been a ticket holder? Has this customer actually
attended a game? Coaches use analytics to select players and create the
“best” team.
Companies such as Verisk Analytics Inc.14 and Fico15 are one-stop-
shops for business DSS, BI, and data analytics. Verisk Analytics pro-
vides decision support capability and data analytics to insurance, natural
resources, health care, financial services, and government and risk man-
agement in areas such as insurance underwriting, claims, catastrophe and
weather risk, global risk analytics, natural resources intelligence, and eco-
nomic forecasting. While Fico.com cites many uses of predictive analyt-
ics, they use data analytics to solve problems in business, government,
economics, and science.
In health care, clinical decision support systems (CDSS) continue to
revolutionize the global health care ecosystem. Clinical decision support
users are varied. They include: patients, consultants, general practitioners
or physicians, nurses, pharmacists, and laboratory managers. CDSS data
sources are diverse ranging from Electronic Health Records (EHRs) and
disease registries to insurer databases. Clinical decision support software
is powered by sophisticated algorithms used to analyze individual and
population data in order to better understand patient and population
health patterns, diagnose specific illnesses, and devise customized patient
care management plans.
Though many CDSS are targeted at health care professionals, there
is a growing trend in the use of personalized mobile CDSS to support
individual consumers (or patients). These applications provide insights
16 DECISION SUPPORT, ANALYTICS, AND BUSINESS INTELLIGENCE

on alternative treatments and courses of action for those with diabetes,

obesity, or asthma. Further, CDSS have been implemented in the com-
munity to facilitate and support patient-centered care. These applications
are often remote patient-monitoring solutions. Positive tangible benefits
have been observed; positive results include reduced time to make clinical
decisions and reduced duration of mean hospitalization time. Decision
support is also widely used as part of medical evidence–based training and
evaluation for physicians, nurses, and consultants.
Mobile devices and applications have transformed the availability
of decision support. CDSS are widely used to underpin mobile health
(mHealth) in the context of developing countries. For example, low-cost
mobile CDSS are being evaluate as part of feasibility studies in countries
such as Malawi, Nigeria, and Burkina Faso. With limited or minimal
medical training and limited access to medical resources, health care prac-
titioners in urban and rural communities use mobile CDSS to support
child and adult health assessments. This use of CDSS promotes adherence
to health assessment guidelines which, over time, should improve patient
health outcomes and resource allocation.
Emergency response units, including medical experts, first responders,
and the defense forces, use DSS to support decision making in the event
of mass flooding, road collision, and explosions and in mountain, air, and
sea rescue scenarios. DSS are used for air traffic monitoring. Also, a DSS
is used by staff to facilitate manpower planning for the U.S. Marines.
So who uses computerized decision support including analytics and
BI systems? DSS are used by the vast spectrum of managers, senior man-
agement teams, and knowledge workers in a variety of context-specific
scenarios such as law enforcement, agriculture, and medicine. Decision
support users include internal and external stakeholders of an organiza-
tion. Ultimately, any individual or group that has access to a connected
device and makes decisions is a potential user of a computer-based deci-
sion support application.

What DSS Skills and Knowledge Do Managers Need?

Technology skills become obsolete quickly. Concepts and theoretical
knowledge have a much longer “half-life.” Managers need to master the
 Modern Decision Support 17

what, when, who, and why of computerized decision support. Man-

agers need less knowledge about the how-to of computerized decision
support, analytics, and BI systems. The concept of decision support has
broadened over the past 50 years to encompass a wide variety of infor-
mation technologies that support decision making. The basic philoso-
phy of decision support is that technology and software positively impact
decision making.
Analytics, BI, and DSS use sophisticated information hardware and
software technologies, and therefore, the advantages and limitations asso-
ciated with these must be well understood by managers. Essentially, man-
agers need the relevant computing and software knowledge to appreciate
how they can best leverage these technologies to better support individual
and organizational decision making. In addition, there is an increasing
need for managers to provide input to hardware and software choices. At
a minimum, in today’s business environment, a manager needs to be able
to operate the software environment of personal computing devices (e.g.,
PC, laptop, or mobile device such as tablet and smartphone).
Our hardware and software environment is rapidly changing (i.e.,
new versions of Microsoft Office, new options for data storage vis-à-vis
Cloud, new Google products, new hardware devices, and new intracom-
pany web-based applications are introduced). In addition, managers often
need to master software products relevant to the job. In some situations,
it may be necessary to develop small-scale budgeting or cost-estimating
applications or dashboards of information using MS Excel or Crystal
Reports or, alternatively, using open-source software such as Jaspersoft or
Pentaho. There is a growing need for “end-user” development of small-
scale DSS and preparation of special decision support and analytic studies
outside of mainstream enterprise software.
Networks and enterprisewide systems are expanding globally. Manag-
ers and knowledge workers are the primary users of enterprisewide DSS.
Managers must understand and be involved in designing and building
these systems. Managers need to develop the skills and knowledge to
think about IT solutions, including defining a problem, formulating a
solution, and implementing a solution.
Managers need to understand the benefits, costs, and risks of build-
ing a specific IT decision support capability. Decision support, analytics,
18 DECISION SUPPORT, ANALYTICS, AND BUSINESS INTELLIGENCE

BI systems and big data technologies solve problems and create new prob-
lems. Managers need broad knowledge of technology to help them make
informed decision support implementation choices.
Computing and IT knowledge needs and skills are constantly evolving.
We all need to learn continuously about new concepts and new skills. Some
new decision support requirements build on previously learned materials;
others are disruptive and force us to change our thinking dramatically.

Why Do Some Managers Resist Using DSS?

Opposing change, especially technology change, is common and often-
times misguided. Rational opposition to change is needed, however,
and is desirable. Given that most DSS have positive benefits, why do
some managers resist using them? Is the resistance to DSS rational? Can
­resistance to the system be reduced and overcome? Let us examine seven
possible explanations for resistance to building or using DSS.
First, managers may have insufficient IT training. Because managers
are receiving more training, and new managers are quite sophisticated in
their use of computer software and hardware, the magnitude of this prob-
lem seems to be decreasing. Providing relevant, useful IT training should
be part of the DSS implementation plan.
Second, some managers may be concerned that using a DSS will
diminish their control and status and force them to do more admin-
istrative-type work. Using a DSS is not the job of an administrator or
­personal assistant. Today, companies cannot afford to pay an assistant to
help ­managers use a computer to do their job. Resistance based on status
is counterproductive and raises business costs.
Third, using a DSS may be resisted because it does not fit a given
manager’s problem-solving style. Not all managers are fact-based, ana-
lytical problem-solvers and decision makers. Some managers rely heav-
ily on intuition rather than analysis. While this is true, managers should
use both analysis and intuition in solving problems. A good DSS can
­support managers who rely on intuition to make a final decision to get
and ­consider the facts.
Fourth, using a DSS does not fit with the manager’s work habits of ver-
bal and nonverbal problem-solving in face-to-face meetings. DSS should
 Modern Decision Support 19

not and cannot replace face-to-face meetings. Communications-driven

DSS are an adjunct to traditional meetings, and other DSS can often be
used to enhance and facilitate improved effectiveness and efficiency of
face-to-face meetings.
Fifth, DSS models, interfaces, and systems are sometimes poorly
designed. Poor design is a problem, but not an inherent problem. In an
era where user experience (UX) is paramount and user expectation of
user interface design is heightened through the increasing use of mobile,
clinical, and web-based customer service interfaces, user interface design
in DSS must be optimal. Managers need to be involved in building DSS,
and more resources need to be focused on DSS design and development.
Sixth, some managers argue that building and using a DSS is expen-
sive, unnecessary, and time-consuming. Using a DSS does not need to
be time-consuming or tedious or difficult. DSS can actually save manag-
ers time and speed up decision processes. This message needs to be well
defined and clearly articulated to managers.
Seventh, information overload is a major problem for people. Man-
agers already receive too much information, and some DSS increase the
overload. Although this can be a problem, DSS can help managers orga-
nize and use information. DSS can actually reduce and manage the infor-
mation load of a user. A good design reduces the cognitive load.
Many of the seven reasons cited earlier for resisting a DSS are excuses
and rationalizations rather than meaningful objections. To gain advan-
tages from DSS, project champions and DSS developers need to over-
come the objections of managers who resist the use of DSS.
Finally, companies must determine whom they want a proposed
DSS to support and what result they want from using the new DSS. For
example, an interorganizational DSS should offer customers value. Value
might be defined in terms of tangible and intangible benefits to the orga-
nization; these could be improved service, new products, lower product
or service costs, or customization. Often these benefits come from an
increase in short-term costs to the DSS provider, but this is better than
allowing a competitor to lead in technology innovation and jeopardize an
organization’s market share in the long term.
In general, managers and DSS analysts are more effective in introduc-
ing DSS when they have an understanding of why people resist change.
20 DECISION SUPPORT, ANALYTICS, AND BUSINESS INTELLIGENCE

Understanding the dynamics of change allows us to plan strategies to

reduce irrational resistance. We should always encourage reasoned, ratio-
nal questions about a proposed system.

Summary
Decision support and BI systems serve varied purposes and targeted
users and are implemented with a variety of technologies. Analysis
and interpretation of data from computerized sources has become a
very important skill for managers and knowledge workers. Contempo-
rary decision-making environments create a need for more, and better,
computerized decision support.
There are new opportunities in computerized decision support with
significant advances in mobile hardware and software, artificial intelli-
gence (AI) in the area of decision automation, augmented reality (AR),
data and sensor analytics, and IoT. These innovations provide challenges
and opportunities in the area of organizational decision support and com-
puterized decision support applications. Nobel Laureate Herbert Simon’s
ideas continue to provide a theoretical rationale for building computer-
ized DSS and using analytics. Computerized decision support and ana-
lytics can expand the rationality of decision makers. Managers should
adopt decision support capabilities when it is likely that significant bene-
fits will be realized. Modern decision support assists decision makers and
helps them make better, timely decisions by exploiting new technologies
and expanding capabilities. Modern decision support helps knowledge
workers and managers.
 Index
Amount of conflict, 9
Amount of deliberate delay, 9
Amount of discussion, 9
Amount of information, 9
Amount of joint creation, 9
Amount of negotiations, 9
Analytical processing, 97–99
Analytic applications, 96–97
Analytics
definition of, 24
features of, 25
types of, 24
Apache Hadoop, 69–72
Automated decision process, 36–37
Big data
definition of, 57–59
impact decision support and
analytics, 59–61
organizations harnessing, 63–66
overview of, 55–57
strategic decision-making, 72–74
technologies, 69–72
utility for managers, 61–63
Bradford group model of decision,
8–10
Business intelligence
best practices for, 79–82
current trends, 113–115
definitions of, 26–28
ETL software, 88–89
mobile, 91–93
operational, 28–30
questions to be asked for, 78–79
Communications-driven DSS
definition of, 38
features of, 43–45
Computerized decision support, 4–6,
13–16, 127–132
Data analytics, 113–115
Data complexity, 58
Data context, 58
Data-driven DSS
data sources for, 86–88
definition of, 38
features of, 46–47
method for building, 84–88
parallel database technology, 89–91
Data extraction software, 88
Data Scientist characteristics, 66–69
Data value, 58
Data variability, 58
Data variety, 58
Data velocity, 58
Data veracity, 58
Data visualization, 58
Data volume, 58
Data warehouse (DW)
architecture, 77–78
characteristics of, 76
definition of, 76
Decision
Bradford group model of, 8–10
characteristics of, 6–8
framing, 10–12
Hage model of, 8
Snyder model of, 8
Decision automation, 36–37
Decision process audit, 140–141
Decision support
benefits for, 119–122
competitive advantage, 122–126
computerized, 4–6, 13–16
current possibilities, 35–36
feasibility study, 145–147
modern, 12–13
need for, 3–4
planning, 139–140
Decision support concept map, 33
Decision support spectrum, 36
Decision support systems (DSS)
advantages and disadvantages,
132–134
178 Index
big data. See Big data
categorizing, 53
characteristics of, 40–43
common language, 22–23
communications-driven, 38
components of, 24
data-driven, 38
definition of, 23–25
document-driven, 38–39
expanded framework, 41
impact decision outcomes,
126–127
implementation risk, 147–149
knowledge-driven, 39
model-driven, 39–40
reengineering, 142–145
resisting, 18–20
skills and knowledge, 16–18
system/subsystem, 54
types of, 38
user experience design, 137–138
Decision trajectory characteristics, 9
Degree of delegation, 9
Degree of routinization, 9
Digital analytics, 64
Document-driven DSS
definition of, 38–39
features of, 47–49
DSS. See Decision support systems
Duration, 9
Duration of conflict, 9
DW. See Data warehouse
ETL software, 88–89, 104–105
Extensity of participation, 9
Framing decision, 10–12
Hage model of decision, 8
Intensity of participation, 9
Knowledge-driven DSS
definition of, 39
features of, 49–51
Knowledge management, 30–32
Mobile analytics, 63
Mobile business intelligence and
analytics, 91–93
Model-driven DSS
definition of, 39
ETL software, 104–105
features of, 51–52
multiuser visual simulations,
110–111
rules for building, 111–113
sensitivity vs. what-if analysis,
105–107
simulation for, 108–110
Modern decision support, 12–13
Multiuser visual simulations, 110–111
Only Humans Need Apply (Davenport
and Kirby), 37
Operational business intelligence,
28–30
Parallel database technology, 89–91
Predictive analytics
definition of, 99
support decision making, 99–102
Process-mediated data, 62
Reengineering DSS, 142–145
Sales forecasting software, 96
Sensitivity analysis, 105–107
Sensor analytics, 63
Simulation, 108–110
Snyder model of decision, 8
Social media analytics, 63
Spreadsheet-based DSS, 102–104
SQL knowledge, 82–83
Stability of coalition, 9
User experience design, 137–138
What-if analysis, 105–107