Components & Types of a Decision Support System, Advantages & Disadvantages (MIS 03.06.2021)

Components of a Decision Support System

The three main components of a DSS framework are:

 1. Model Management System

The models are used in decision-making regarding the financial health of the organization and forecasting demand for a good or service.

 

2. User Interface

The user interface includes tools that help the end-user of a DSS to navigate through the system.

 

3. Knowledge Base

The knowledge base includes information from internal sources (information collected in a transaction process system) and external sources (newspapers and online databases).

 

Types of Decision Support Systems

1. Communication-driven: Allows companies to support tasks that require more than one person to work on the task. It includes integrated tools such as Microsoft SharePoint Workspace and Google Docs.

 

2. Model-driven: Allows access to and the management of financial, organizational, and statistical models. Data is collected, and parameters are determined using the information provided by users. The information is created into a decision-making model to analyse situations.

 

3. Knowledge-driven: Provides factual and specialized solutions to situations by using stored facts, procedures, rules, or interactive decision-making structures like flowcharts.

 

4. Document-driven: Manages unstructured information in different electronic formats.

 

5. Data-driven: Helps companies to store and analyse internal and external data.

 

Advantages of a Decision Support System

1. A decision support system increases the speed and efficiency of decision-making activities. It is possible, as a DSS can collect and analyse real-time data.

 

2. It promotes training within the organization, as specific skills must be developed to implement and run a DSS within an organization.

 

3. It automates monotonous managerial processes, which means more of the manager’s time can be spent on decision-making

 

4. It improves interpersonal communication within the organization.

 

Disadvantages of a Decision Support System

1. The cost to develop and implement a DSS is a huge capital investment, which makes it less accessible to smaller organizations.

 

2. A company can develop a dependence on a DSS, as it is integrated into daily decision-making processes to improve efficiency and speed. However, managers tend to rely on the system too much, which takes away the subjectivity aspect of decision-making.

 

3. A DSS may lead to information overload because an information system tends to consider all aspects of a problem. It creates a dilemma for end-users, as they are left with multiple choices.

 

4. Implementation of a DSS can cause fear and backlash from lower-level employees. It is because many of them are not comfortable with new technology and are afraid of losing their jobs to technology.