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COURSE CODE: ACC205

COURSE TITLE: MANAGEMENT INFORMATION SYSTEM

COURSE LECTURER: Albert. O. OSAZEVBARU

Learning Objectives
After treating this topic, the students should be able to:
i. know Decision Support System
ii. know the Types of Decision Support System
iii. Know the Decision Making Process
iv. Know the Components of Decision Support System

Introduction
For an organisation to function effectively, it requires informed decision making. Due to the rhe complexities
of activities that characterise the business environment, it is imperative to have decision support hence the
decision support system.

1. Decision Support System (DSS)

A decision support system (DSS) is an information system that improves a business in decision-making
activities that require judgment, determination, and a sequence of actions.

The DSS assists the middle and high-level management of an organisation by analysing huge volumes of
unstructured data and accumulating information that can help solve problems and help in decision-making. A
DSS is either human-powered, automated, or a combination of both.

A decision support system produces detailed information reports by gathering and analysing data. Hence, a
DSS is different from a normal operations application, whose goal is to collect data and not analyse it.
Theoretically, a DSS can be employed in various knowledge domains from an organization to forest
management and the medical field. One of the main applications of a DSS in an organization is real-time
reporting. It can be very helpful for organizations that take part in just-in-time (JIT) inventory management.

In a JIT inventory system, the organization requires real-time data of their inventory levels to place orders
“just in time” to prevent delays in production and cause a negative domino effect. Therefore, a DSS is more
tailored to the individual or organization making the decision than a traditional system.

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 analyze real-time data.
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2. It promotes training within the organization, as specific skills must be developed to implement and run a
DSS within an organisation.

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 organisation.

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. Many of them are not
comfortable with new technology and are afraid of losing their jobs to technology..

2. Types of Decision Support Systems

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.

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 analyze situations. An example of a model-driven DSS is Dicodess
– an open-source model-driven DSS.

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

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

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

3 Decision making process

the decision-making process involves using data and information provided by the system to identify
problems, analyse options, and make informed choices, ultimately leading to better organisational
performance. It can also be seen as the structured approach managers use to make informed decisions based
on the data and insights provided by the MIS. The following are the process involved in decision-making.

1. Problem Identification
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Recognize and define the problem or opportunity that requires a decision.

MIS helps by providing reports and alerts that highlight issues (e.g., declining sales, increased costs).

2. Data Collection

Gather relevant internal and external data.

MIS supports this step by collecting, processing, and organizing data from various sources (like transactions,
customer feedback, market trends).

3. Data Analysis

Analyse the data to uncover patterns, trends, or causes.

MIS tools like dashboards, decision support systems (DSS), and data analytics help managers interpret data
effectively.

4. Developing Alternatives

Generate possible courses of action or solutions.

MIS can simulate different scenarios or outcomes based on varying inputs.

5. Evaluating Alternatives

Assess the pros and cons of each alternative.

MIS provides forecasting, modeling, and what-if analysis tools to support evaluation.

6. Choosing the Best Alternative

Select the most appropriate decision based on analysis and objectives.

MIS ensures decisions are data-driven rather than purely instinct-based.

7. Implementation

Execute the chosen decision.

MIS can assist in planning and tracking the implementation process.

8. Monitoring and Feedback

Evaluate the results of the decision and make adjustments if necessary.

MIS provides performance metrics and feedback loops to inform continuous improvement.

4. Components of a Decision Support System

The three main components of a DSS framework are:

1. Model Management System

The model management system stores models that managers can use in their decision-making. The models
are used in decision-making regarding the financial health of the organisation 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)