COMPONENTS OF DSS

In this lesson, we will discuss these components in detail:

1) The Data Management System (database)
2) The Models and Analytical tools
3) The User Interface
4) the DSS Users
5) Knowledge Engine

1. Data Management Systems

• It comprises of the database whose functions is to retrieve, store and organize

relevant data for a particular decision context.
• It also provides for various security functions, data integrity procedures, and
general administrative duties associated with DSS. Tasks are carried out within the
data management sub systems like DBMS, data repository, and data query facilities.

Data Warehouse
• Warehousing data is based on the premise that the quality of a manager's decisions
is based, at least in part, on the quality of his information. The goal of storing data in
a centralized system is thus to have the means to provide them with the right
building blocks for sound information and knowledge.
• Data warehouses contain information ranging from measurements of performance
to competitive intelligence.
• Data mining tools and techniques can be used to search stored data for patterns that
might lead to new insights. Furthermore, the data warehouse is usually the driver of
data-driven decision support systems (DSS).

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 • If properly designed and implemented, the goal of warehousing data is to drastically
reduce the time required in the decision making process. To do so, it employs three
tools, namely:
• Online Analytical Processing System (OLAP)
• Data Mining and
• Data Visualization

Online Analytical Processing System (OLAP)

OLAP allows three functions to be carried out.
• Query and reporting: Ability to formulate queries without having to use the
database programming language.
• Multidimensional analysis: The ability to carry out analyses from multiple
perspectives. Eg a product analysis that can be repeated for each market segment.
This allows for quick comparison of data relationships from different areas (e.g. by
location, time, etc.). This analysis can include customers, markets, products, and so
on.
• Statistical analysis: This function attempts to reduce the large quantities of data
into formulas that capture the answer to the query.
• OLAP is basically responsible for telling the user what happened to the organization.
It thus enhances understanding reactively, using summarization of data and
information.

Data Mining
• Data mining is a process used by companies to turn raw data from data warehouse
into useful information. By using software to look for patterns in large batches of
data, businesses can learn more about their customers to develop more effective
marketing strategies, increase sales and decrease costs.
• Data mining is a technique that is more suited for heterogeneous databases and data
sets.
• Data mining involves exploring and analyzing large blocks of information to gather
meaningful patterns and trends. It can be used in a variety of ways, such as
database marketing, credit risk management, fraud detection, spam Email filtering,
or even to discern the sentiment or opinion of users. Data miners find clusters of
information based on logical relationships or look at associations and sequential
patterns to draw conclusions about trends in consumer behavior.

Steps in Data Mining

The data mining process breaks down into five steps:
• Data Collection- Organizations collect data and load it into their data warehouses.
• Data Storage and Management- Data is stored and managed either on in-house
servers or the cloud.
• Data Access and Organization- Business analysts, management teams and
information technology professionals access the data and determine how they want
to organize it.
• Data Sorting- Application software sorts the data based on the user's results
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 • Data Presentation- The end-user presents the data in an easy-to-share format,
such as a graph or table.

Data Visualization
• This process involves representing data and information graphically so as to better
communicate its content to the user. It is a way to make data patterns more visible,
more accessible, easier to compare, and easier to communicate. Data visualization
includes graphical interfaces, tables, graphs, images, 3D presentations, animation,
and so on.

Functions of DBMS
• Data Definition-Describe data entities and relationships and attributes
• Data Manipulation- Queries
• Data Integrity-Control of erroneous data
• Access Control- Allows authentication of authorized users.
• Concurrency Control-Controls simultaneous access by different users
• Transaction Recovery- Provides mechanism for restart incase of hardware failure.

2. The Models and Analytical Tools

• A decision support system may comprise of different models where each model
performs a specific function. The selection of models that must be included in
a decision support system family depends on user requirements and the purposes of
DSS.
• Note that the DSS software contains the predefined models (or routines) using
which new models can be built to support specific type of decisions.
• The DSS software system contains the software tools that are used for data analysis.
It may contain various OLAP tools, data-mining tools, or a collection of mathematical
and analytical models that easily can be made accessible to the DSS user.
• A model is an abstract representation that illustrates the components or
relationships of a phenomenon. A model can be a physical model (such as a model
airplane), a mathematical model (such as an equation), or a verbal model (such as a
description of a procedure for writing an order).
• Each decision-support system is built for a specific set of purposes and makes
different collections of models available depending on those purposes.
• A model predicts the output in the basis of different inputs or different conditions
or finds out the combination of conditions and input that is required to produce the
desired output.
• Perhaps the most common models are libraries of statistical models. Such libraries
usually contain the full range of expected statistical functions, including means,
medians, deviations, and scatter plots. The software has the ability to project future
outcomes by analyzing a series of data.

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Statistical Modeling
• Statistical modeling software can be used to help establish relationships, such as
relating product sales to differences in age, income, or other factors between
communities.
• They contain a wide range of statistical functions, such as mean, median, mode,
deviations etc. These models are used to establish, relationships between the
occurrences of an event and various factors related to that event. It can, for example,
relate sale of product to differences in area, income, season, or other factors. In
addition to statistical functions, they contain software that can analyze series of data
to project future outcomes.

Optimization Analysis Models

• Optimization models, often using linear programming, determine optimal resource
allocation to maximize or minimize specified variables, such as cost or time. A
classic use of optimization models is to determine the proper mix of products within
a given market to maximize profits.
• They are used to find optimum value for a target variable under given
circumstances. They are widely used for making decisions related to optimum
utilization of resources in an organization. During optimization analysis, the
values for one or more variables are changed repeatedly keeping in mind the
specific constraints, until the best values for target variable are found. They can, for
example, determine the highest level of production that can be achieved by varying
job assignments to workers, keeping in mind that some workers are skilled and
their job assignment cannot be changed. Linear programming techniques and
Solver tool in Microsoft excel are mostly used for making such analysis.

Forecasting Models
• Forecasting models often are used to forecast sales. The user of this type of model
might supply a range of historical data to project future conditions and the sales
that might result from those conditions. The decision maker could vary those future
conditions (entering, for example, a rise in raw materials costs or the entry of a new,
low-priced competitor in the market) to determine how new conditions might affect
sales. Companies often use this software to predict the actions of competitors.

Sensitivity Analysis
• Sensitivity Analysis Models: These are used to provide answers to what-if
situations occurring frequently in an organization. During the analysis, the value of
one variable is changed repeatedly and resulting changes on other variables are
observed. The sale of product, for example, is affected by different factors such as
price, expenses on advertisements, number of sales staff, productions etc. Using a
sensitivity model, price of the product can be changed (increased or decreased)
repeatedly to ascertain the sensitivity of different factors and their effect on sales
volume. Excel spreadsheets and Lotus 1-2-3 are often used for making such analysis.

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 • Among the most widely used models are sensitivity analysis models that ask
―whatif questions repeatedly to determine the impact on outcomes of changes in
one or more factors.
• What-if-analysis—working forward from known or assumed conditions—allows
the user to vary certain values to test results to better predict outcomes if changes
occur in those values. What happens if we raise the price by 5 percent or increase
the advertising budget by $100,000? What happens if we keep the price and
advertising budget the same?
• Desktop spreadsheet software, such as Microsoft Excel or Lotus 1-2-3, is often used
for this purpose.

Backward Analysis Sensitivity Models:

• Also known as goal seeking analysis, the technique followed in these models is just
opposite to the technique applied in sensitivity analysis models.
• In place of changing the value of variable repeatedly to see how it affects other
variables, goal seeking analysis sets a target value for a variable and then repeatedly
changes other variables until the target value is achieved. To increase the
production level by 40 percent using the backward sensitivity analysis, for example,
first, the target value for the production level can be set and then the required
changes to made in other factors, such as the amount of raw material, machinery
and tools, number of production staff, etc., to achieve the target production level.
• If I want to sell 1 million product units next year, how much must I reduce the price
of the product?

3. User Interface
• It is an interactive graphical interface which makes the interaction easier between
the DSS and its users. It displays the results (output) of the analysis in various
forms, such as text, table, charts or graphics. The user can select the appropriate
option to view the output according to his requirement.
• A graphic, easy-to-use, flexible user interface supports the dialogue between the
user and the DSS. The DSS users can be managers or employees with no patience for
learning a complex tool, so the interface must be relatively intuitive.
• Many DSS today are being built with Web-based interfaces to take advantage of the
Web’s ease of use, interactivity, and capabilities for personalization and
customization. Building successful DSS requires a high level of user participation to
make sure the system provides the information managers need.
• A manager, for example, would like to view comparative sales data in tabular form
whereas an architect creating a design plan would be more interested in viewing the
result of analysis in a graphical format. The present-day decision support system
built using the Web-based interface provides its users some special capabilities like
better interactivity, facility for customization and personalization, and more ease of
use.

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Functions of DSS Interface
Communication Language
• Allows for interaction with the DSS in a variety of dialog styles.
• Identifies the form of input to enter requests into the DSS.
• Provides support for communication among multiple DSS users.
• Can be effected in a variety of formats including menu driven, question answer,
procedural command language, or natural command language.
• Can capture and analyze previous dialogs so that future interactions can be
improved.

Presentation Language
• Provides for the presentation of data in a variety of formats.
• Allows for detailed report definition and generation by the DSS user.
• Allows for the creation of forms, tables and graphics for data output.
• Can provide for multiple “windows” or “views” of the data to be available
simultaneously.

4. DSS Users
• The ultimate user of a DSS is the decision maker. User skill set, motivations,
knowledge domain, patterns of use, and role within the organization are important
characteristics of the user. However, the user may not actually run the system.
There are four usage patterns of a DSS.
• Terminal mode: The decision maker is the direct user of the system through online
access.
• Clerk mode: The decision maker uses the system directly but offline, preparing
input on a coding form. The primary difference between this mode and the terminal
mode is in technology employed (batch versus online).
• Subscription mode: The decision maker receives reports that are generated
automatically on regular basis. This is the typical mode of usage for management
reporting systems. Although some data analysis systems or accounting models
might be used in this ways, it is not typical for DSS.
• Intermediary mode: The decision maker uses the system through intermediaries,
who perform the analysis and interpret and report the results. The decision maker
does not need to know the intermediary used system to arrive at the requested
information.

5. Knowledge Engine
• The knowledge engine performs activities related to problem recognition and
generation of interim and final solutions as well as other functions related to the
management of the problem- solving process. The knowledge engine supplies the
brains of the system. The data and the model come together here to provide the user
with a useful application that supports the decision context.