Decision Support Systems (DSS) - Make every decision count
Having to make decisions that affect the way your company conducts business can be nerve-wracking. Have all the variables that need be considered been factored in and will the changes that are being made be valuable and long lasting. Think about the hundreds of decisions that are made within your own organization. While many are probably small in nature, all these hundreds of decisions add up. How can your company stack the deck, so to speak, to improve decision making to achieve an overall net positive effect? You may want to consider employing a Decision Support System (DSS).
Decision support systems can provide companies with the analytics and frameworks to make better business decisions. They can exist as a manual process system but typically they are computer-based due to the quantities of data that are involved. A DSS can consolidate and synthesize large and disparate amounts of information enabling decision makers to more rapidly access and interpret critical data. As “intelligent” as these systems may be however, they can’t do all the thinking and human knowledge is key. It’s this knowledge that determines and identifies the parameters of what kind of data is captured and analyzed by the system.
Collected data forms the transactional information that moves from each “node” or “touch point” in an end to end. As a product or service moves from one area to the next, the information is time and location stamped. Even numerous low level details can be used for trend analysis. As one item is reviewed, the activity can be measured relative to other items. These systems are commonly known as knowledge based systems and have the capability to combine raw data, documents and personal knowledge to identify and solve problems to make decisions. Typically this type of information is used to provide historical comparatives (between time periods or key operational metrics such as sales and profitability), current inventories of information and projective analysis.
You’re probably wondering how data collected during the decision support process is actually synthesized so one can more easily interpret and make sense of it. While it might seem like magic, it actually involves computational algorithms such as Monte Carlo simulations and process simulation and optimization.
Monte Carlo simulations rely on repeated random sampling of historical information and are particularly important because by analyzing results companies can more easily calculate potential risk exposure to the business based on probability. These types of simulations can help promote optimization and integration of information across several systems as well as allow for probability distribution.
Process simulation and optimization is an analysis technique that can be used to develop a concept to increase capacity and throughput. It can help determine how and what to do to achieve an effective result.
Another way decision support systems aid decision making is by employing user-friendly data warehousing and decision dashboards. Data warehousing allows critical data to be accessed and retrieved with greater ease and dashboards are designed to provide an intuitive interface for users of the system.
More effective decision making can lead to increased profitability and a higher ROI. While a DSS ultimately won’t make the decision for you it can be a valuable tool to use to enhance overall decision making. Businesses strive for proactive rather than reactive decision making and decision support systems can help facilitate this.
RSVP for Change: Look at your current processes and reports. Do you know where the information is coming from? It’s not just about the specific system it came from but how the information fits in with and supports the end to end process.
Management Insight: Once you have made a significant investment in a system (ERP or CRM), you need to leverage the information it contains. Adding a DSS can assist in synthesizing this data ensuring that it’s used to its full potential. This in turn can provide benefits in areas such as customer service, smart pricing and overall program efficiency. Can you sit on your laurels and let the opportunity to effectively leverage this information pass you by?
Linda Craig (@LindaCraigRSVP)
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