Sunday, March 15, 2015



·       Decision support systems (DSS) are interactive software - based systems intended to help managers in decision - making by accessing large volumes of information generated from various related information systems involved in organizational business processes such as office automation system, transaction processing system, etc.

·       DSS uses the summary information, exceptions, patterns, and trends using the analytical models.

·       A decision support system helps in decision-making but does not necessarily give a decision itself.

·       The decision makers compile useful information from raw data, documents, personal knowledge, and business models to identify and solve problems and make decisions.

·       A number of people are involved in running and using the DSS.

·       The manager is the user -- the person who has to make the decision.

Types of DSS

Following are some typical DSSs:

§  Status Inquiry System: It helps in taking operational, management level, or middle level management decisions, for example daily schedules of jobs to machines or machines to operators.
§  Data Analysis System: It needs comparative analysis and makes use of formula or an algorithm, for example cash flow analysis, inventory analysis etc.
§  Information Analysis System: In this system data is analyzed and the information report is generated. For example, sales analysis, accounts receivable systems, market analysis etc.
§  Accounting System: It keeps track of accounting and finance related information, for example, final account, accounts receivables, accounts payables, etc. that keep track of the major aspects of the business.
§  Model Based System: Simulation models or optimization models used for decision-making are used infrequently and creates general guidelines for operation or management.

Attributes of a DSS

Ø Adaptability and flexibility
Ø High level of Interactivity
Ø Ease of use
Ø Efficiency and effectiveness
Ø Complete control by decision-makers
Ø Ease of development
Ø Extendibility
Ø Support for modeling and analysis
Ø Support for data access
Ø Standalone, integrated, and Web-based

Characteristics of a DSS

·       Support for decision-makers in semi-structured and unstructured problems.
·       Support for managers at various managerial levels, ranging from top executive to line managers.
·       Support for individuals and groups. Less structured problems often requires the involvement of several individuals from different departments and organization level.
·       Support for interdependent or sequential decisions.
·       Support for intelligence, design, choice, and implementation.
·       Support for variety of decision processes and styles.
·       DSSs are adaptive over time.

Components of a DSS

Ø Following are the components of the Decision Support System:

Ø Database Management System (DBMS): To solve a problem the necessary data may come from internal or external database. In an organization, internal data are generated by a system such as TPS and MIS. External data come from a variety of sources such as newspapers, online data services, databases (financial, marketing, human resources).
Ø Model Management System: It stores and accesses models that managers use to make decisions. Such models are used for designing manufacturing facility, analyzing the financial health of an organization, forecasting demand of a product or service, etc.
Ø Support Tools: Support tools like online help; pulls down menus, user interfaces, graphical analysis, error correction mechanism, facilitates the user interactions with the system.

Classification of DSS

There are several ways to classify DSS. Hoi Apple and Whinstone classifies DSS as follows:

Ø Text Oriented DSS: It contains textually represented information that could have a bearing on decision. It allows documents to be electronically created, revised and viewed as needed.

Ø Database Oriented DSS: Database plays a major role here; it contains organized and highly structured data.

Ø Spreadsheet Oriented DSS: It contains information in spread sheets that allows create, view, modify procedural knowledge and also instructs the system to execute self-contained instructions. The most popular tool is Excel and Lotus 1-2-3.

Ø Solver Oriented DSS: It is based on a solver, which is an algorithm or procedure written for performing certain calculations and particular program type.

Ø Rules Oriented DSS: It follows certain procedures adopted as rules.

Ø Rules Oriented DSS: Procedures are adopted in rules oriented DSS. Export system is the example.

Ø Compound DSS: It is built by using two or more of the five structures explained above.

Advantages of DSS

v Improves efficiency and speed of decision-making activities.
v Increases the control, competitiveness and capability of futuristic decision-making of the organization.
v Facilitates interpersonal communication.
v Encourages learning or training.
v Since it is mostly used in non-programmed decisions, it reveals new approaches and sets up new evidences for an unusual decision.

Disadvantages of DSS

v  Monetary cost 

v Overemphasize decision making

v Assumption of relevance

v  Transfer of power

v Unanticipated effects 

v Obscuring responsibility 

v  False belief in objectivity

v Status reduction

v  Information overload

Management information systems (MIS)

 Management information systems (MIS)

·         The MIS is defined as a system which provides information support for decision-making in the            organization.
·         The MIS is defined as an integrated system of man and machine for providing the information to support the operations, the management and the decision-making function in the organization.
·         The MIS is defined as a system based on the database of the organization evolved for the purpose of providing information to the people in the organization.
·         The MIS is defined as a computer-based information system.
·         MIS is a set of computer-based system and procedures implemented to help managers in their routine job of decision-making and planning, expansion and development.
Terms of MIS:-
MIS is the combination of three English letters:
M: Which stands for management.
I: Which stands for information.
S: Which stands for system.
·         Management has been define in process or activities that describe what managers do in the operation for their organization plan, organize, initiate and control operations.
·         They plan by setting strategies and goals and selecting the best course of action to achieve the goals. They organize the necessary tasks for the operational plan, set these tasks up into homogenous groups and assign authority delegation; they control the performance standards and avoiding deviation from standard.
·         The decision-making is a fundamental prerequisite of each of the foregoing process, the job of MIS is facilitating decisions necessary for planning, organizing and controlling the work and functions of the business so that specified goals of business are achieved.

·         INFORMATION: Data must be distinguished from information and the distinction is clear and important for present purpose. Data are facts and figures that are not currently being used in a decision-making process and usually are taken from the historical records that are recorded and filled without immediate intent to retrieve for decision-making.
·         Information consists of data that have been retrieved, processed or otherwise used for information or interference purpose, argument or as a basis forecasting or decision-making regarding any business unit. Information is knowledge that one derives from facts for effective functioning of systems placed in the right context with the purpose of reducing uncertainty regarding the alternative courses of action as they are based on description and measurement of attributes of various entities associated with the enterprise.
·         SYSTEM: The system can be described as a set of elements joined together for a common objective. A subsystem is a part of a larger system with which one is concerned. All systems for our purpose the organization is the system and the parts (divisions, departments, functions, unit etc) are the subsystem
·         The system concept of MIS is, therefore one of optimizing the output of the organization by connecting the operating subsystems through the medium of information exchange. .
v Roles of Management Information System:-
·         The MIS satisfies the diverse needs through variety of systems such as query system, analysis system, modeling system and decision support system.
·         The MIS helps in strategic planning, management control, operational control and transaction processing. The MIS helps in the clerical personal in the transaction processing and answers the queries on the data pertaining to the transaction, the status of a particular record and reference on a variety of documents.
·         The MIS helps the junior management personnel by providing the operational data for planning, scheduling and control , and helps them further in decision-making at the operation level to correct an out of control situation.
·         The MIS helps the middle management in short term planning, target setting and controlling the business functions. It is supported by the use of the management tools of planning and control.
·         The MIS helps the top level management in goal setting, strategic planning and evolving the business plans and their implementation.
·         The MIS plays the role of information generation, communication, problem identification and helps in the process of decision-making. The MIS, therefore, plays a vital role in the management, administration and operation of an organization
v Importance of MIS:-
·         MIS has assumed all the more important role in today’s environment because a manager has to take decisions under two main challenges:
·         First, because of the liberalization and globalization, in which organizations are required to compete not locally but globally, a manager has to take quick decisions, otherwise his business will be taken away by his competitors. This has further enhanced the necessity for such a system.
·         Second, in this information age wherein information is doubling up every two or three years, a manager has to process a large voluminous data; failing which he may end up taking a strong decision that may prove to be very costly to the company.
v Characteristics of MIS:-
      Following are the characteristics of an MIS.
·         It should be based on a long-term planning.
·         It should provide a holistic view of the dynamics and the structure of the organization.
·         It should work as a complete and comprehensive system covering all interconnecting sub-systems within the organization.
·         It should be planned in a top-down way, as the decision makers or the management should actively take part and provide clear direction at the development stage of the MIS.
·         It should be based on need of strategic, operational and tactical information of managers of an organization.
·         It should also take care of exceptional situations by reporting such situations.
·         It should create linkage between all sub-systems within the organization, so that the decision makers can take the right decision based on an integrated view.
·         It should allow easy flow of information through various sub-systems, thus avoiding redundancy and duplicity of data.
·         A central database is the backbone of a well-built MIS.
·         It should provide organized and relevant information for all levels of management: strategic, operational, and tactical.
·         It should aim at extreme flexibility in data storage and retrieval.
v Types of MIS:-
·         Decision support systems (DSS) are computer program applications used by middle and higher management to compile information from a wide range of sources to support problem solving and decision making. A DSS is used mostly for semi-structured and unstructured decision problems.
·         Executive information systems (EIS) is a reporting tool that provides quick access to summarized reports coming from all company levels and departments such as accounting, human resources and operations.
·         Marketing Information Systems are Management Information Systems designed specifically for managing the marketing aspects of the business.
·         Office automation systems (OAS) support communication and productivity in the enterprise by automating workflow and eliminating bottlenecks. OAS may be implemented at any and all levels of management.
·         School Information management systems (SIMS) cover school administration and often including teaching and learning materials.
·         Enterprise resource planning facilitates the flow of information between all business functions inside the boundaries of the organization and  manage  connections to outside stakeholders.
·                Functions   of   MIS:-
      Following are the basic functions of an MIS:-
·         Capturing Data: Capturing contextual data, or operational information that will contribute in decision making from various internal and external sources of organization.
·         Processing Data: The captured data is processed into information needed for planning, organizing, coordinating, directing and controlling functionalities at strategic, tactical and operational level. Processing data means:
o    making calculations with the data
o    sorting data
o    classifying data and
o    summarizing data
·         Information Storage: Information or processed data need to be stored for future use.
·         Information Retrieval: The system should be able to retrieve this information from the storage as and when required by various users.
·         Information Propagation: Information or the finished product of the MIS should be circulated to its users periodically using the organizational network.

·       Components of MIS:-
There are four components of MIS:
a.      Data gathering.
b.      Data entry.
c.       Data transformation.
d.      Data utilization.

Knowledge Management

Knowledge Management

Knowledge management has become one of the major strategic uses of information technology. Many companies are building knowledge management systems to manage organizational learning and business know-how.  The goal of KMS’s is to help knowledge workers create, organize, and make available important business knowledge, wherever and whenever it’s needed in an organization.  This includes processes, procedures, patterns, reference works, formulas, “best practices,” forecasts, and fixes.  Internet and intranet web sites, groupware, data mining, knowledge bases, discussion forums, and videoconferencing are some of the key information technologies for gathering, storing, and distributing this knowledge.

Knowledge Management has the following processes :-

· Define, capture, manipulate, store and develop.
· Develop information systems for knowledge creation.
· Design applications for improving organization’s effectiveness.
· Create knowledge set, i.e. intellectual capital to increase economic value   of the organization.
· Keep IC continuously on upgrade to use it as a central resource.
· Distribute to and share with the concerned.

Tools for Knowledge Management

KM deals with knowledge generation, knowledge codification and refinement and knowledge transmission. The tools are available to handle all these functions of knowledge management. The tools are:
· Database management tools
– For data management and seeking knowledge through SQL queries.
· Data warehousing, Data mart, Data mining tools.
– For business information creation and using Data Mining Tools, OLAP Tools to seek knowledge on different views and scenarios.
· Process modeling and Management tools.
– For recording standard process as an explicit knowledge for use in the organization.
· Work flow management tools.
– For recording the process of workflow as an explicit knowledge for group workers.
· Search engine tool.
– For locating specific information through search algorithms.
· Document management tools – like Lotus notes.
· These tools are known as database management tools for documents. They are useful to search and manipulate documents to create new knowledge.

Knowledge Management based on two categories :

1.   Tacit Knowledge Management,
2.   Explicit Knowledge Management,

1. Tacit Knowledge Management

Tacit knowledge is much more difficult to comprehend than explicit knowledge. Tacit knowledge is simply the “know-how contained in people’s heads”. Therefore, within an organization, tacit knowledge is made up of the collective “know-how” of all its employees. Tacit knowledge is widely accepted today as a key approach to sustaining an organization’s competitiveness. Tacit knowledge also plays a vital role in organizational learning and technological innovation. Organizations today are presented with quite a challenge in regards to benefiting from their tacit knowledge. In order for an organization to use tacit knowledge successfully, they must first recognize tacit knowledge and its importance. After recognition, organizations should then learn how to generate tacit knowledge, which must then be shared with individuals or groups that need this knowledge.

2. Explicit Knowledge Management :-

The effective organization of explicit knowledge enables better strategic decision making within a company by enabling decision makers to access data from all areas within the organization. By combining the process of gathering this information with the tools that enable efficient organization and retrieval organizations are able to provide decision makers with large amounts of relevant information. One respondent to our survey identified the company’s decision support environment as a key component of the company’s overall knowledge management strategy. This system is used to enhance employees’ decision making abilities on pricing, forecasting, sales organization and the development of marketing programs. Additionally, system aided in the organization’s shift from intuitive to fact based decision making in these areas.


Advantages and Disadvantages

·      Advantages of Knowledge Management\

1.  Increase availability of expert knowledge
2.  Efficient and cost effective
3.  Consistency of answers
4.  Explanation of solution
5.  Deal with uncertainty

·      Disadvantages of Knowledge Management

1.  Lack of common sense
2.  Inflexible, Difficult to modify
3.  Restricted domain of expertise
4.  Lack of learning ability
5.  Not always reliable