BUSINESS INFO.

SYSTEMS
Prepared by
Prashanth P
Asst. Professor
St.Mary’s College, Puthanangadi
Malappuram, Kerala
Contents
1. Classification of decision problems
2. Data transformation and management
3. Decision support systems (DSS)
4. Group decision support system (GDSS)
5. Executive Information system (EIS)
CLASSIFICATION OF DECISION
PROBLEMS
 1. Routine and non-routine problems

▪ Routine decisions are taken frequently and

repeatedly.
▪ The decision maker knows them well and is
familiar with the problem.
▪ The uncertainty level in dealing such
problems is very low and are usually easy to
handle.
▪ Non-routine decisions, on the other hand,
tend to be more difficult, bcoz there will be
lack of experience in dealing with such
problems.
▪ They do not occur again and again.
2. One-time or Recurring
▪ One time decisions are used in case when
one needs to find the best alternative.
▪ Therfore, it cannot be applied in another
case,i.e, such decisions occur only once.
▪ These decisions are complex and risky.
▪ Recurring decisions are regular in nature,
they happen more frequently.
▪ Here best alternative may not be selected,
instead, better options are selected.
▪ Routine problems may be repeated,
but not regular. But recurring
problems repeat regularly.
▪ Same in case of non-routine and
one time, non-routine problems
occur very rarely, but occur more
than once. But one time, as the
name indicates happens only once.
▪ Both classifications are almost
similar, but different in certain
bases.
3. Single attribute and multi-attribute
▪ This is classified on the basis of
number of criteria, while assessing
alternatives.
▪ Single attribute problems are those
which considers only single
criterion for evaluating alternative,
say, may be profit or income.
▪ For eg. studying the income groups
in the economy, we consider only
the personal income.
▪ Multiple attribute considers more
than one criterion for evaluating
alternatives.
▪ For eg., while making investment,
we consider factors like market
value, risk, rate of return etc.
4. Decision under uncertainty
▪ Uncertainty refer to a state of limited knowledge
so that something about it is unknown.
▪ It happens when external factors influence the
problem.
▪ On the basis of uncertainty factor, problems are
divided into three. They are as follows.
▪ a) Decision under certainty- Here decision
maker has all info. about the alternatives and its
consequences.
▪ b) decision under risk – Here the decision
maker has a risk of uncertain events, but is able
to quantify the level of risk up to an extent.
▪ c) decision under strict uncertainty- the decision
maker is completely unaware of the
consequences .
5. Individual and group decisions
▪ These are classified on the basis of
number of decision makers
▪ When decisions are conformed to a
single individual, it is called individual
decisions.
▪ A sole proprietor, department head, etc
follow such technique.
▪ When decisions are taken by group of
individuals, it is called group decision.
▪ Examples are decisions taken by Board
of Directors.
6. Based on nature of decisions

▪ Structured decisions – These have a well

defined decision making procedure. All
inputs, outputs and internal activities are
known. These are assigned to lower level.
▪ Semi-structured decisions – Here the
decision has some structured elements,
but not complete. Some elements of
input, output etc. are unknown. These
are assigned to middle level.
▪ Unstructured decisions – all
decision making are unknown. This
is bcoz decision is so complex.
Computers and expert systems can
help them up to an extent. Top level
mgt. is entitled to take such
decisions.
7. Based on levels of management

▪ Strategic decisions – It affects entire

organisation for a long period of time.
Taken by top level mgt.
▪ Tactical decisions – Affects a part of the
organisation for a limited period of time in
future. Usually taken by middle level.
▪ Operational decisions – Affects only
current activities of an organisation. It has a
very limited time impact. Taken by lower
level.
8. Single or multi-stage decisions

▪ Single decisions are those where only a key

decision is to be made for a problem.
▪ The individual decision could solve the entire
problem.
▪ In some cases, a decision may result in taking
further decisions in parallel.
▪ The decision taken may lead to take some
more actions further.
▪ Such decisions are called multi stage
decisions.
Data transformation and
management
▪ Data transformation is the process of
converting information or data from one
format to another.
▪ It may also involve converting programs from
one computer language to another in order to
allow the program to run on a specific
platform.
▪ Actual transformation needs to convert
different data formats into a common form.
▪ Data transformation is also known as Data
scrubbing or data cleansing.
▪ It the process of transforming data in
database into common architecture.
▪ Database, use of SQL (structured query
language) is used in this process.
Decision support systems
What is DSS?

▪ A DSS is a computer-based information

system that supports business or
organizational decision-making activities.
▪ A DSS is a collection of integrated software
applications and hardware that form the
backbone of an organization’s decision
making process and help to make decisions,
which may be rapidly changing and not easily
specified in advance.
 Definition

“A decision support system is a computer

system at the management level of an
organisation that combines data,
sophisticated analytical tools and user
friendly softwares to support semi
structured and unstructured decisions.”

Laudon and Laudon

Features
▪ Facilitation : DSS facilitate and support specific
decisionmaking activities and/or decision processes.
▪ Interaction : DSS are computer-based systems
designed for interactive use by decision makers or
staff users who control the sequence of interaction
and the operations performed.
▪ Ancillary : DSS can support decision makers at any
level in an organization. They are NOT intended to
replace decision makers.
▪ Repeated Use : DSS are intended for repeated use. A
specific DSS may be used routinely or used as
needed for ad hoc decision support tasks.
▪ Identifiable : DSS may be independent systems that
collect or replicate data from other information
systems OR subsystems of a larger, more integrated
information system.
▪ Task-oriented : DSS provide specific capabilities
that support one or more tasks related to decision-
making, including:
intelligence and data analysis; identification and
design of alternatives; choice among alternatives;
and decision implementation.
▪ Supports individual and group decision making :
It provides a single platform that allows all users to
access the same information and access the same
version of truth, while providing autonomy to
individual users and development groups to design
reporting content locally.
▪ Comprehensive Data Access : It allows users to
access data from different sources concurrently,
leaving organizations the freedom to choose the
data warehouse that best suits their unique
requirements and preferences.
Components of DSS
1. Database
2. Modelbase
3. DSS software
4. Human Resources
1. Database
▪ A DSS database is a collection of current or
historical data from a number of applications
or groups.
▪ Data or info. are entered into the database
from the firm’s environment.
▪ A database cannot create new data, but it
gives fresh data based on which managers
can take appropriate decisions.
▪ Usually a database will be protected from
outside access to ensure confidentiality for
the firm.
 2. Modelbase
▪ A modelbase includes a library of mathematical tools
and analytical techniques stored in different
programs, modules and files that can be made
available for DSS user.
▪ A model may be a physical model
that of a machine or a mathematical
like equation, graph, or a verbal
model describing a procedure.
▪ In business, firms use optimisation models like linear
programming to determine optimal allocation of
resources.
3. DSS Software
▪ It contains software tools that are used for data
analysis.
▪ DSS Software packages are called DSS
generators.
▪ It allows the user to interact with database and
modelbase.
▪ DSS softwares integrates the database and
modelbase to make the manager more
comfortable in decision making.
4. Human Resources

▪ The above components can be integrated

only with the help of experts humans.
▪ Managers may not be able to develop
such a complicated system.
▪ Therefore, it requires expert professionals
to built such models and database.
Functions of DSS
▪ Quick response : Every DSS provides
quick response for the queries with the
hepl of a computer system.
▪ Monitors and control functions : Since
DSS iis connected with every part of the
organisation, it can monitor each and
every part of it and can control its
activities.
▪ User interface : User gets support
through his terminal in the system. It is a
user-computer system relationship.
Types of DSS
▪ Communication-driven DSS : It supports
more than one person working on a shared
task; examples include integrated tools like
Microsoft's NetMeeting.
▪ Data-driven DSS : It emphasizes access to
and manipulation of a time series of internal
company data and, sometimes, external data.
▪ Document-driven DSS : It manages,
retrieves, and manipulates unstructured
information in a variety of electronic
formats.
▪ Knowledge-driven DSS : It provides specialized
problem solving expertise stored as facts, rules,
procedures, or in similar structures. It requires
specialised knowledge to deal with certain
situations.
▪ Model-driven DSS : It emphasizes access to
and manipulation of a statistical, financial,
optimization, or simulation model. Model
driven DSS use data and parameters provided
by users to assist decision makers in analyzing
a situation; they are not necessarily data
intensive.
Benefits or Advantages

▪ Time savings
▪ Enhance effectiveness
▪ Improve interpersonal communication
▪ Competitive advantage
▪ Cost reduction
▪ Increase decision maker satisfaction
▪ Promote learning
▪ Improves personal efficiency
Limitations or disadvantages

▪ Monetary cost.
▪ Assumption of relevance.
▪ Transfer of power.
▪ Unanticipated effects.
▪ Uncertain responsibility.
▪ False belief in objectivity.
▪ Information overload.
 GROUP DECISION SUPPORT
SYSTEM
“A group decision support system is an
interactive computer based system to
facilitate the solution to too unstructured
problem by a set of decision makers
working together as a group”

- De Sanctis and Gallupe

Features of GDSS

▪ High level of interaction

▪ Criticism-free idea generation
▪ Availability of information
▪ Stored information in other decision makers
▪ Decision on priorities
 COMPONENTS OF GDSS
▪ Decision makers
▪ Database and modelbase
▪ Groupware
1. Decision makers
▪ It is the main component of GDSS.
▪ Since decisions are made
collectively, it includes group of
decision makers.
▪ Each member contributes his
knowledge and experience in
arriving decisions.
▪ Therefore, this method gives strong
and wise decisions.
2. Database and Modelbase

▪ GDSS needs more use of database

and modelbase to analyse and
extract data.
 3. Groupware
▪ Software used in group decision
making is known as groupware.
▪ Such softwares may include all
facilities to generate and communicate
info. from one place to another.
▪ It may include e-mail, fax, video
conferencing, voice messaging etc.
 Techniques of GDSS

1. Brainstorming
2. Nominal Group Technique
3. Delphi method
1. Brainstorming
▪ It is a conference technique where a group
attempts to find a solution to a problem by
gathering all the ideas spontaneously
contributed by its members.
▪ It is a widely used technique to stimulate
idea generation in decision making.
▪ Here, group who discuss the problem meet
together.
▪ Problem is given to them for finding
solution.
● Every member can freely express his/her
ideas on solving the problem without
considering its merits and demerits.
● Criticisms on ideas expressed is strictly
prohibited.
● It allows a free flow of ideas.
● These ideas help them to solve complex
problems.
2. Nominal Group Technique

▪ Structured group meeting with restricted

verbal communication among members.
▪ Every member is asked to write their
opinion independently.
▪ After collecting all ideas, each idea is placed
for open discussion and evaluation.
▪ Every member ranks each ideas.
▪ The idea that gets the highest rank will be
selected.
3. Delphi method
▪ The Delphi method is a process used to arrive at a
group opinion or decision by surveying a panel of
experts.
▪ Experts respond to several rounds of questionnaires,
and the responses are aggregated and shared with the
group after each round.
▪ The experts can adjust their answer each round, based
on how they interpret the "group response" provided to
them.
▪ The ultimate result is meant to be a true consensus of
what the group thinks.
Benefits of GDSS

▪ Greater participation
▪ Open and free atmosphere
▪ No criticism
▪ Pooling of knowledge
▪ Personnel development
Limitations of GDSS
▪ Time consuming activity
▪ Costly
▪ Individual domination
▪ No responsibility
EXECUTIVE INFORMATION SYSTEM

“ An executive information system is an

info. system at the strategic level of an
organisation designed to address
unstructured decision making through
advanced graphics and communications ”

-
Laudon & Laudon
Features

▪ Meant for higher level mgt.

▪ Pervasive in nature (Affects entire organisation)

▪ Emphasis on external data

▪ Info. in summarised form

Components

▪ Hardware
▪ Software
▪ Models and Graphics
Benefits

▪ Flexibility
▪ Reduces info. overload
▪ Ability to analyse and compare
▪ Monitoring the performance
▪ Improve the performance