1. Kingdom Of Saudi Arabia
Al-Imam Muhammad Ibn Saud Islamic University
College of Computer and Information Sciences
Information System Department
2nd semester, 2010 – 2011
IS 332: Decision Support Systems
Decision Support Systems And
Business Intelligence
Chapter 1 in “DECISION SUPPORT AND BUSINESS INTELLIGENCE
SYSTEMS”
T. Hala AL-Rumaih 1

2. Introduction
• Organizations feel increasing pressures that force them to
respond quickly to changing the way they operate.
• Making such decisions may require relevant data,..
• Processing these, must be done quickly, frequently, in real
time and requires computerized support.
• This course will taking about using business intelligence
as a computerized support for decision making.
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3. Changing Business Environments and
Computerized Decision Support
• To understand why companies are embracing
computerized support, a model has been developed
called the Business Pressures-Responses-Support
Model.
• The Business Pressures-Responses-Support Model:
1. The business environment
• Business environment factors divided into four
categories: markets, consumer
demands, technology, and societal.
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4. Changing Business Environments and
Computerized Decision Support (cont.)
2. Organizational responses: be
reactive, anticipative, adaptive, and proactive
• Employ strategic planning
• Use new and innovative business model
• Restructure business process
• Use new IT to improve communication.
•:
•:
3. Computerized support
• It used to facilitate closing the gap between the
current performance and the desired performance
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5. Changing Business Environments and
Computerized Decision Support (cont.)
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6. Managerial Decision Making
• Management is a process by which organizational goals
are achieved through the use of resources
(people, money, energy, materials, space, time).
• These resources are considered to be inputs, and the
attainment of the goals is viewed as the output of the
process.
Measuring success: Productivity= output/input
Orgnizational and managerial performance
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7. Managerial Decision Making (cont.)
• The Nature of Managers’ Work
• Managers perform 10 major roles can be classified into
three major categories:
1. Interpersonal: figurehead, leader, liaison.
2. Informational: monitor, disseminator, spokesperson.
3. Decisional: entrepreneur, disturbance handler, resource
allocator, negotiator.
• To perform these rolles, managers need information and
computerized support.
Management is decsion making
The manager is decsion maker
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8. Managerial Decision Making (cont.)
• The process of decision making:
1. Defining the problem (i.e., a decision situation that
may deal with some difficulty or with an opportunity)
2. Constructing a model that describes the real-world
problem
3. Identifying possible solutions to the modeled
problem and evaluating the solutions
4. Comparing, choosing, and recommending a
potential solution to the problem
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9. Managerial Decision Making (cont.)
• Factors Affecting Decision-Making:
• Environmental factors make the evaluation process
difficult for the following reasons:
1. New technologies and better information distribution
have resulted in more alternatives for management.
2. Increasing governmental regulation coupled with
political destabilization have caused great uncertainty.
3. Other factors are the need to make rapid
decisions, the frequent and unpredictable
changes, and the potential costs of making mistakes.
4. These environments are growing more
complex, making decision today is indeed a complex
task.
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10. Computerized Support For Decision
Making
• Computer applications have moved from transaction
processing and monitoring activities to problem analysis
and solution applications.
• BI tools such data warehousing, data mining, online
analytical processing,……, are the cornerstones of
today’s modern management.
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11. Computerized Support For Decision
Making (cont.)
• Why We Use Computerized Decision Support Systems?
• Speedy computations
• Improved communication and collaboration
• Increased productivity of group members
• Improved data management
• Managing giant data warehouses
• Quality support
• Agility Support
• Overcoming cognitive limits in processing and storing
information
• Using the Web
• Anywhere, anytime support
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12. Steps of the Decision Making
REALITY Examination Intelligence Phase

Verification of the
Model
Design Phase
Verification, Testing of
 Proposed Solution
Choice Phases
SUCCESS
Implementation
of Solution

FAILURE

13. Steps of the Decision Making (cont.)
• Intelligence phase
• Organizational objectives
• Search and scanning procedures
• Data collection
• Problem identification
• Problem classification
• Problem statement
Result:
Reality is examined
The problem is identified and defined
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14. Steps of the Decision Making (cont.)
• Design phase
• Formulate a model (Assumption)
• Set criteria for choice
• Search for alternative
• Predict and measure outcomes
Result:
Representative model is constructed
The model is validated and evaluation criteria are set
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15. Steps of the Decision Making (cont.)
• Choice phase
• Sensitivity analysis
• Selection of Best (Good) alternative
• Plan for implementation
Result:
Proposed solution is included to the model
If reasonable, move to implementation phase.
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16. Steps of the Decision Making (cont.)
• Implementation phase
• Put solution into action
Result:
Solution to the original problem
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17. An Early Framework for
Computerized Decision Support
Type of Control
Type of Operational Managerial Strategic Planning
Decision: Control Control
Structured Accounts Budget analysis, Investments,
(Programmed) receivable, short-term warehouse locations,
accounts payable, forecasting, distribution centers
order entry personnel reports
Semistructured Production Credit evaluation, Mergers and
scheduling, budget preparation, acquisitions, new
inventory control project scheduling, product planning,
rewards systems compensation, QA,
HR policy planning
Unstructured Buying software, Negotiations, R&D planning,
(Unprogrammed) approving loans, recruitment, technology
help desk hardware development, social
purchasing responsibility plans
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18. An Early Framework for Computerized
Decision Support (cont.)
• Three Types of Decision or Structuredness:
1. Structured problems (programmed): are routine problems for
which standard solution method exist.
• All phases are structured.
• Procedure for obtaining the best solution are known
2. Unstructured problems (nonprogrammed): are fuzzy, complex
problem for which there are no cut-and direct solution methods.
• None of the four phases is structured
• Depend on human judgment.
3. Semi-structured problem: is a decision problem in which some
but not all phases are structured.
• In between solve with standard solution procedure and human judgment
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19. An Early Framework for Computerized
Decision Support (cont.)
• Three Types of control:
1. Strategic planning
• the long-range goals & policies for resource
allocation;
2. Management control
• the acquisition & efficient utilization of resources in
the accomplishment of organizational goals
3. Operational control
• the efficient & effective execution of specific tasks.
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20. An Early Framework for Computerized
Decision Support (cont.)
• The Decision Support Matrix:
• The initial purpose of previous matrix was to suggest
different types of computerized support to different cells
in the matrix:
• For semi-structured decisions and unstructured
decisions:
• conventional MIS and MS tools are insufficient ;
• BUT Decision support systems (DSS) are used.
• For structured decisions:
• Management science (MS) or operations research (OR) are
used .
• Automated decision systems (ADS) is used.
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21. An Early Framework for Computerized
Decision Support (cont.)
• Management science (MS) or operations research
(OR):
• The application of a scientific approach and
mathematical models to the analysis and solution of
managerial decision situations
(e.g., problems, opportunities)
• It adds new step 2 to the process of decision
making, that is classify the problem into standard
category.
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22. An Early Framework for Computerized
Decision Support (cont.)
• Automated decision systems (ADS) :
• New approach to support decision making, also known
as decision automation system.
• A rules-based system that uses provides a solution
usually in one functional area to a specific repetitive
managerial problem (such as pricing).
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23. An Early Framework for Computerized
Decision Support (cont.)
• The Benefits of Computerized Decision Support:
1. Competition
2. E-commerce.
3. Accurate information is needed
4. Higher decision quality is needed
5. The company desires improved communication
6. The company want to reduce costs
7. ………
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24. The Concept of Decision Support
Systems (cont.)
• Decision support systems (DSS) are “interactive
computer-based systems, which help decision makers
utilize data and models to solve unstructured problems”.
• DSS are used to make business decision often based
on data collected by On-Line-Analytical-Processing
system (OLAP)
• DSS as an Umbrella term: Describes any computerized
system that supports decision making in an organization
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25. The Concept of Decision Support
Systems (cont.)
• The Architecture of DSS
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26. A Framework for Business Intelligence
• Business intelligence (BI)
• An umbrella term that combines
architectures, tools, databases, applications, and methodologies
• BI’s major objective:
• Enable interactive access to data
• Enable manipulation of data
• Give the ability to conduct appropriate analysis.
• Enable to make more informed and better decisions
BI = data  information decisions  actions
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27. A Framework for Business Intelligence (cont.)
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28. A Framework for Business Intelligence (cont.)
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29. A Framework for Business Intelligence (cont.)
• Data warehouse
• Originally, included historical data that were organized
and summarize, so end users could easily view or
manipulate data and information
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30. A Framework for Business Intelligence (cont.)
• Business analytics
• Reporting and queries
• Advanced analytics
• Data, text and Web mining and other sophisticated
mathematical and statistical tools
• Data mining
A process of searching for unknown relationships or
information in large databases or data warehouses, using
intelligent tools such as neural computing, predictive analytics
techniques, or advanced statistical methods.
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31. A Framework for Business Intelligence (cont.)
• Business performance management (BPM)
An advanced performance measurement and analysis
approach that embraces planning and strategy
• BPM extends the monitoring, measuring, and
comparing of sales, profit, cost, profitability, and other
performance indicators by introducing the concept of
“management and feedback
• BPM provides a top-down enforcement of corporate-
wide strategy
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32. A Framework for Business Intelligence (cont.)
• Benefits of BI
• Faster, more accurate reporting
• Improved decision making
• Improved customer service
• Increased revenue
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