Decision-Support System and Business Intelligence - Assignment Example

A decision support system is a computer based program that helps businesses or organizations in decision making activities, this program is usually used at the management, operation and planning levels of management where there is need to make quick and accurate decision within a short time frame. Decision support systems can be entirely operated through computers or can involve an amalgamation of computer and manual system. Decision support systems can be identified based on their characteristics, which include the following. One is that the decision support systems are targeted at the less elaborate and unclear problems that are faced by the management in the daily running of their organizations, secondly, in its applications it uses analytical techniques and data access possibilities to give out meaningful information. Decision support system put more emphasis on flexibility and adaptability to changes in the business environment. Decision support system can either be passive, active or cooperative, passive decision support systems helps the user in decision making but does not give suggestions or solutions to the problem. Active decision support systems go to an extent of offering the user with suggestions and solutions to the problems; cooperative decision support systems allow the user to modify and refine the suggestions that are given. Decision support systems are used in a variety of industries, for instance, the clinical decision support system that is used in health facilities for medical diagnosis, the system is also used in financial institutions to determine credit worthiness of customers, in engineering firms to determine viability of projects and in agriculture to increase production. 2. Business intelligence can be defined as a set of methodologies, theories and technologies that help an organization to transform huge volumes of unprocessed data in to meaningful information that can be used in decision-making. Business intelligence technology involve incorporating past current and predictive future views of the organization in to the decision making process Business intelligence can be applied in the following ways in a business; one is measurement, which involves a program that creates a ladder of performance measurements and benchmarking to give signals to the management on the progress of the organization towards achieving the company’s goals. Business intelligence can also be applied in analysis where it involves use of programs that help business to reach at the most optimal decisions for its operations. Enterprise reporting which involves a program that builds networks for strategic reporting which in turn helps in strategic management of an organization. Business organizations use business intelligence for collaboration through creating a collaboration platform that allow exchange of information both internal and external Business intelligence in an organization can only be successful if three critical requirements are met, that is if the senior management are committed to sponsor and ensure it is successful, whether there are business needs in the organization, which needs business intelligence and the amount and quality of data that is available. In order to access business intelligence applications, a business portal will be the first thing that a user will come in to contact with therefore they are made in such a way that they are usable, content rich, current, clean, interactive and value oriented. 3. Decision support system and business intelligence are related in one way or another since they are both used to increase the performance of organizations One of the ways in which Decision support system and business intelligence are related is that both of them are used by management to help in the decision making process. While decision support system uses data and the information available to the organizations to give suggestions and solutions to the management, business intelligence can use the same data to reveal information about the company, which can then be used by management to make decision. This similarity therefore means that the data that is required for business intelligence will be more or less the same as the one that will be used by decision support systems. Business intelligence involves methodologies, theories, architectures and technologies that transform raw data in to meaningful information that can be used to make decisions, this data that is generated by business intelligence can be fed in to the decision support systems to provide suggestions and solutions to the management. From the definition of decision support systems, it entails almost all features of business intelligence in it; this means that for it to be successful, it must have business intelligence. Therefore when making a decision support system, an organization must have developed an effective business intelligence which will translates in to an effective decision support system. 4. Management decision making can be viewed both as a science and as an art; management as a science can be traced to Fredrick Taylor and his theory of scientific management, which is based on four principles aimed at increasing the efficiency of the workers. The first principle states that in management, you should substitute the rule of the thumb work methods with methods based on systematic research of the jobs. This means that the methods that are to be used in performing certain work should not be based on approximations or assumption but rather on methods that have been proven to work. The second principle states that the management should scientifically pick, instruct and develop every employee to perform his work perfectly rather than inactively leaving them to coach themselves. The third principle of the scientific theory of management is that the managers should work together with the employees to make certain that the scientifically developed techniques are being followed. The fourth principle states that the work should be divided uniformly among managers and employees so that management can apply the scientific management principles in planning the job and the employees can then perform the job. Management as an art can be defined as a face of people’s conduct that is intuitive, flexible and creative. Managers can be viewed as artists who can be able to develop inimitable ideas about their organizations and implement them to produce excellent results; as artists, managers help improve collective performance in an organization and focus to the future. 5. Planners lab is a modelling language that can be used to solve mathematical and accounting problems, some of the features that it contains over excel is that a person can be able to construct models, and covey them to other people easily. Since it is a modelling language it is possible to use assumptions and English language in contrast with excel which uses cryptic formulas; using a planners lab model, excel spreadsheets can be created which are excellent for tabular reporting. Scenario manager is a tool that is available in excel for creating and comparing data, this tool is especially useful when you are running several forecasts since it is not easy to remember the results for each forecast. This tool is especially important compared to other Microsoft tolls as a goal seek and solver since with these other tools, every time the data set is changed, the previous results are lost but with this tool an individual can keep track of several what if scenarios. Goal seek feature in Microsoft excel allows users to alter data in cells or during what if analysis is that it does allow the user to safe results of previous analysis which makes it difficult to compare, in addition, this feature depends on the correctness of the formula in order to give accurate information. Solver is a toll that is found in excel and used to find optimal results for any form of analysis; the advantage of this tool is that it can be easy to understand, however, it does not store results for comparison once a dataset is erased. 6. The best method to analyse the case would be to use planners lab as it has huge benefits compared to excels, some of those benefits include the following. One is that planners lab is easy to use and the models used for analysis can be easily modified, in addition, it is easier to use graphs and see the effects of those changes more readily in comparison to excel thereof making it better to present financial ratios. Secondly, planners lab has a user-friendly interface compared to excel with its features such as drag and drop options, this makes it easier to create charts and add or remove values from the chats, in addition since the variables are in English language, it is easier to read the model. Using planners lab it is very easy to construct models since they are written in English language therefore making them easy to be understood, this is in contrast to scenario manager where one has to use formulas, which may not be easily understood by another person. Compared to planners lab, scenario manager is more tedious and time consuming especially when there are many variables since they have to be entered into the cells. The greatest benefit of planners lab over scenario manager is the ability to simulate, visualize and anticipate how assumptions about the future will affect future outcomes; this is because it was specifically designed for that purpose. Read More