Decision Support System - Case Study Example

Decision Support System Decision Support System Decision Support System (DSS) is an information management system, which is objected to assist the business or organizational enterprise in making important decisions for effective operational activities. DSS is mostly applied in planning, management, and operational levels of a business enterprise to assist them in making decisions that aim to changing their organizational structure. The systems can be either humanized, computerized, or the combination of both aspects depending on its viability to the business structure. Moreover, DSS is perceived by several scholars of facilitating organizational processes and as a tool to support the processes of making decisions. Therefore, this paper aims to study the application of Decision Support System in the UAE including the analysis of its effectiveness on the business arena. The selected application is the Enterprise Resource Planning (ERP), which is an application that integrated both internal and external information of different departmental sections in an organization. The application is aimed to allow the flowing of information between marketing, accounting, finance, and manufacturing, whilst managing the customer preferences and profiles. In addition, the research study also exhibits the importance of the ERP in order to determine its viability into the competitive global market. An effective DSS is the computerized application that assists the decision makers in compiling important information from a mixture of documents, raw data, business models, and personal knowledge in order to make decisions that solves the underlying or predicted problems. The business information that a DSS may assist include preparation of inventories for assets, projecting revenue costs based on the sales assumptions, and comparing sales figures, among others (Power, 2002). However, there are different areas in UAE under which DSS can be applied including in construction modeling support, in school’s learning management system, in operational management to assist employees, and automating financial records in accounts and finance departments. Other areas include human resource systems to monitor employees’ performance and attendance, for security monitoring by signing the visitors in and out or verifying their documents. In other words, DSS can be used in several areas, although it must be interactive and effective to all management staff. The organization must ensure there is satisfaction of all employee levels in adopting a new DSS in order to ensure its functionality and reliability by all management staff. This is to ensure the decisions made based on the support system are understandable and agreed by all stakeholders. Specifically, this research study has selected to discuss one form of DSS in order to discuss exhaustively its functionality, effectiveness, and its performance on the business world. The selected application is the Enterprise Resource Planning (ERP). ERP is an application that integrated both internal and external information of different departmental sections in an organization. Its objectives are to allow the flowing of information between marketing, accounting, finance, and manufacturing, whilst managing the customer preferences and profiles (O’Leary, 2000). The old versions of ERP only focused on back office operations without a concern to customer information, as it was the task of customer relationship department. Fortunately, the ERP have been modernized and integrated to the latest versions. This made it a successful method of solving the problems of informational integration in a given business enterprise. The best and effective ERP system is the one that enhance proper tracking of business information and forecast on the future probabilities based on the data provided. According to Adam (2001), it can result to the improved levels of productivity, performance, and efficiency in an organization. The system can also enhance better delivery of services to the customers and their satisfaction. This is especially when the ERP integrates the data in specific categories or automatically updates each category simultaneously on the availability of market update of products and services. Such aspect creates a sense of reliability to the customer, hence steering business growth by profit maximization. However, the information supplied by the ERP is at some point processed by the decision support systems to generate an important ideology of improving the business operations. The ERP based DSS integrates various information technologies in a way that it creates new opportunities of strengthening each quality of particular technologies. In addition, it minimizes the weaknesses associated with these technologies by producing new qualities after combination of qualitative and quantitative technologies in a DSS. This expands the functions of computer systems by adding extra tasks in the computer-human dialog, thereby creating the fundamental tools that satisfy the needs of both human and systematic decision makers (Marakas, 1999). However, the decisions makers do not only need more information, but also need clear informational understanding on all categorical classification of informational supply. The ERP based DSS contains three components that make its functionality effective including analyzer, simulator, and communicator. The components interactively work together in order to ensure good decisions are made for business improvements. The analyzer ensures the business operations run in a continuous environment for easy identification or emergent issues that may require a decision to be made. The simulator in the ERP works as a discrete feature that relies only on understanding and supporting the decision making process in relation to pattern evolvement. On the other hand, the communicator is the repository source of knowledgeable functioning of the system that supports the user when using the support tools in the operational system. In operational perspective, the ERP systems support in making decisions on monitoring and planning for the profit maximization of the business, especially focusing on the operating costs budgeted. The system provides procedural elements for assessing operating costs including profit projections. The ERP systems also help the business enterprise in determining the strategic levels of decision made in order to provide relevant information of monitoring its position in the competitive market. The systems fundamentally assess the risks associated to the business in order to provide the relevant directions and making decisions for the business to prosper and become the market leader. The decision support tools in the ERP systems provide early warning to the organizations for each step monitored on its progress for easy identification of any threat to business. The threats may come from external or even internal environment of competitive market, where employees or departments compete to produce the best productive rate. The decision support applications such as the ERP introduced the notion of service standardization. However, ERP contributes to globalization benefits, although it requires many sacrifices for local capabilities. This is because it needs a lot of customization to meet the international demands since every societal region had its own methods of delivering such services in traditional forms. Such levels of customization to meet the local demands are risky, as it can lead to poor configuration of the system, hence poor or unwanted results. Therefore, such configurations should be achieved by due diligence and care, especially on implementing the system. According to Koch et al. (1999), the organization or other level of business, enterprises need to take an average of eight months after installation of new ERP system, in order to monitor its benefits on the business growth and development. The standardization of such decision support systems to the global level is much beneficial since it opens new opportunities for the experienced personnel or delivers their services to a larger competitive market. These notions of globalization and standardization are motivated greatly by the fact that ERP and the related decision support systems are open-source systems (Power, 2000). This means that they offer an open platform where users can share, store, or deliver information within the same tools or features. The philosophical aspects of decision support systems is comparable to automation philosophy of business processes since they both contribute the logical change of processes, technology, strategies, attitude, and the culture of the organization. Specifically, the ERP systems are of great importance to the businesses, as they standardize the human resource information, standardize the processes of manufacturing, and integrate the financial records and other relevant data to the accountancy of the business. The use of the single IT solutions offers a room for improvements, especially by innovating and strengthening the specific components that hinders the progress of the business. In conclusion, the establishment of the Decision Support Systems such as ERP is effective and good to run the organizational processes of the business, if it is correctly installed and configured. It contributes many benefits to the business enterprise such as integrating financial information, human resource records, and integrates the manufacturing processes. The use of ERP based DSS in an organization yields a lot of benefits to the organization since they are directly involved in automating several services such as accountancy. References Adam, F. (2001) ERP and its Impact on Decision Making. Journal of Decision Systems, Vol.10(1) Koch, C., Slater, D., Baatz , E. (1999). The ABC’s of ERP. CIO Magazine, Dec Issue Marakas, G. M. (1999). Decision support systems in the twenty-first century. Upper Saddle River, N.J., Prentice Hall. O’Leary, D. (2000). Enterprise Resource Planning Systems: Systems, Life Cycle, Electronic Commerce, and Risk. Cambridge: Cambridge University Press Power, D. J. (2000). Web-based and model-driven decision support systems: concepts and issues. In proceedings of the Americas Conference on Information Systems. California: Long Beach Power, D. J. (2002). Decision support systems: concepts and resources for managers. Westport, Conn., Quorum Books. Read More