Marketing Decision Support System

Decision Support System (DSS):

A decision support system (DSS) is an information system that supports business or
organizational decision-making activities. DSSs serve the management, operations and planning
levels of an organization (usually mid and higher management) and help people make decisions
about problems that may be rapidly changing and not easily specified in advance—i.e.
unstructured and semi-structured decision problems. Decision support systems can be either fully
computerized or human-powered, or a combination of both.
While academics have perceived DSS as a tool to support decision making process, DSS users
see DSS as a tool to facilitate organizational processes. Some authors have extended the
definition of DSS to include any system that might support decision making and some DSS
include a decision-making software component; Sprague (1980) defines a properly termed DSS
as follows:

1. DSS tends to be aimed at the less well structured, underspecified problem that upper
level managers typically face;
2. DSS attempts to combine the use of models or analytic techniques with traditional data
access and retrieval functions;
3. DSS specifically focuses on features which make them easy to use by non-computer-
proficient people in an interactive mode; and
4. DSS emphasizes flexibility and adaptability to accommodate changes in
the environment and the decision making approach of the user.
DSSs include knowledge-based systems. A properly designed DSS is an interactive software-
based system intended to help decision makers compile useful information from a combination
of raw data, documents, and personal knowledge, or business models to identify and solve
problems and make decisions.
Typical information that a decision support application might gather and present includes:

 inventories of information assets (including legacy and relational data sources, cubes, data
warehouses, and data marts),
 comparative sales figures between one period and the next,
 projected revenue figures based on product sales assumptions.

Marketing Decision Support System (MKDSS):

A marketing decision support system (sometimes abbreviated MKDSS) is a decision support
system for marketing activity. The system is used to help businesses explore different scenarios
by manipulating already collected data from the past events. It consists of information
technology, marketing data, systems tools,and modeling capabilities that enable the it to provide
predicted outcomes from different scenarios and marketing strategies. MKDSS assists decision
makers in different scenarios and can be a very helpful tool for a business to take over their
competitors.

 Example
 A MKDSS is used to support the software vendors’ planning strategy for marketing
products. It can help to identify advantageous levels of pricing, advertising spending, and
advertising copy for the firm’s products.[5] This helps determine the firm's marketing
mix for product software.

History:

The concept of decision support has evolved mainly from the theoretical studies of
organizational decision making done at the Carnegie Institute of Technology during the late
1950s and early 1960s, and the implementation work done in the 1960s. DSS became an area
of research of its own in the middle of the 1970s, before gaining in intensity during the
1980s. In the middle and late 1980s, executive information systems (EIS), group decision
support systems (GDSS), and organizational decision support systems (ODSS) evolved from
the single user and model-oriented DSS.
 According to Sol (1987) the definition and scope of DSS has been migrating over the
years: in the 1970s DSS was described as "a computer-based system to aid decision
making"; in the late 1970s the DSS movement started focusing on "interactive computer-
based systems which help decision-makers utilize data bases and models to solve ill-
structured problems"; in the 1980s DSS should provide systems "using suitable and
available technology to improve effectiveness of managerial and professional activities",
and towards the end of 1980s DSS faced a new challenge towards the design of
intelligent workstations.[4]
 In 1987, Texas Instruments completed development of the Gate Assignment Display
System (GADS) for United Airlines. This decision support system is credited with
significantly reducing travel delays by aiding the management of ground operations at
various airports, beginning with O'Hare International Airport in Chicago and Stapleton
Airport in DenverColorado.[5] Beginning in about 1990, data warehousing and on-line
analytical processing (OLAP) began broadening the realm of DSS. As the turn of the
millennium approached, new Web-based analytical applications were introduced.
 The advent of more and better reporting technologies has seen DSS start to emerge as a
critical component of management design. Examples of this can be seen in the intense
amount of discussion of DSS in the education environment.
 DSS also have a weak connection to the user interface paradigm of hypertext. Both
the University of Vermont PROMIS system (for medical decision making) and the
Carnegie Mellon ZOG/KMS system (for military and business decision making) were
decision support systems which also were major breakthroughs in user interface research.
Furthermore, although hypertext researchers have generally been concerned
with information overload, certain researchers, notably Douglas Engelbart, have been
focused on decision makers in particular.
Taxonomies:
Using the relationship with the user as the criterion,
Haettenschwiler differentiates passive, active, and cooperative DSS. A passive DSS is a system
that aids the process of decision making, but that cannot bring out explicit decision suggestions
or solutions. An active DSS can bring out such decision suggestions or solutions. A cooperative
DSS allows for an iterative process between human and system towards the achievement of a
consolidated solution: the decision maker (or its advisor) can modify, complete, or refine the
decision suggestions provided by the system, before sending them back to the system for
validation, and likewise the system again improves, completes, and refines the suggestions of the
decision maker and sends them back to them for validation.
Another taxonomy for DSS, according to the mode of assistance, has been created by Daniel
Power: he differentiates communication-driven DSS, data-driven DSS, document-driven
DSS, knowledge-driven DSS, and model-driven DSS.

 A communication-driven DSS enables cooperation, supporting more than one person

working on a shared task; examples include integrated tools like Google Docs or Microsoft
Groove.
 A data-driven DSS (or data-oriented DSS) emphasizes access to and manipulation of a time
series of internal company data and, sometimes, external data.
 A document-driven DSS manages, retrieves, and manipulates unstructured information in a
variety of electronic formats.
 A knowledge-driven DSS provides specialized problem-solving expertise stored as facts,
rules, procedures, or in similar structures.
 A model-driven DSS emphasizes access to and manipulation of a statistical, financial,
optimization, or simulation model. Model-driven DSS use data and parameters provided by
users to assist decision makers in analyzing a situation; they are not necessarily data-
intensive. Dicodess is an example of an open source model-driven DSS generator.
Using scope as the criterion, Power differentiates enterprise-wide DSS and desktop DSS.
An enterprise-wide DSS is linked to large data warehouses and serves many managers in the
company. A desktop, single-user DSS is a small system that runs on an individual manager's PC.
Components:
Three fundamental components of a DSS architecture are:[6][7][11][12][13]

1. the database (or knowledge base),

2. the model (i.e., the decision context and user criteria)
3. the user interface.
The users themselves are also important components of the architecture.
Development Frameworks:
Similarly to other systems, DSS systems require a structured approach. Such a framework
includes people, technology, and the development approach.
The Early Framework of Decision Support System consists of four phases:

 Intelligence – Searching for conditions that call for decision;

 Design – Developing and analyzing possible alternative actions of solution;
 Choice – Selecting a course of action among those;
 Implementation – Adopting the selected course of action in decision situation.
DSS technology levels (of hardware and software) may include:

1. The actual application that will be used by the user. This is the part of the application that
allows the decision maker to make decisions in a particular problem area. The user can
act upon that particular problem.
2. Generator contains Hardware/software environment that allows people to easily develop
specific DSS applications. This level makes use of case tools or systems such as
Crystal, Analytica and iThink.
 3. Tools include lower level hardware/software. DSS generators including special
languages, function libraries and linking modules
An iterative developmental approach allows for the DSS to be changed and redesigned at various
intervals. Once the system is designed, it will need to be tested and revised where necessary for
the desired outcome.

Classification:
There are several ways to classify DSS applications. Not every DSS fits neatly into one of the
categories, but may be a mix of two or more architectures.
Holsapple and Whinston classify DSS into the following six frameworks: text-oriented DSS,
database-oriented DSS, spreadsheet-oriented DSS, solver-oriented DSS, rule-oriented DSS, and
compound DSS. A compound DSS is the most popular classification for a DSS; it is a hybrid
system that includes two or more of the five basic structures.[14]
The support given by DSS can be separated into three distinct, interrelated categories: Personal
Support, Group Support, and Organizational Support.
DSS components may be classified as:

1. Inputs: Factors, numbers, and characteristics to analyze

2. User knowledge and expertise: Inputs requiring manual analysis by the user
3. Outputs: Transformed data from which DSS "decisions" are generated
4. Decisions: Results generated by the DSS based on user criteria
DSSs which perform selected cognitive decision-making functions and are based on artificial
intelligence or intelligent agents technologies are called intelligent decision support
systems (IDSS)
The nascent field of decision engineering treats the decision itself as an engineered object, and
applies engineering principles such as design and quality assurance to an explicit representation
of the elements that make up a decision.
Decision support system:
The concepts involved in DSS were first expressed in the early 1970s by Scott Morton. These
systems are used to help solve complex problems by using computer technology and can help
businesses with decision making. DSS has progressed since it was first developed in the 70's.
The main areas of research that DDS has developed from are theoretical and technological.
There are three types of DSS available: 1. available as a software application, 2. bespoke and 3.
user-developed.
DSS have many tools that contain different functions such as; sophisticated database
management capabilities with access to internal and external data. information, and knowledge;
powerful modeling functions accessed by a model management system; powerful, yet simple
user interface designs that enable interactive queries, reporting, and graphing functions.
Although DSS have many different functions, they are very user friendly and easy to use,
flexible and have strong graphic capabilities.
Use of Decision support system:
DSS are used mainly used before a company invests their money into something. One of DSS's
biggest benefits is its ability to predict the outcome of different scenarios, it can help businesses
to save money by preventing failures and put them towards a better cause.
Decision support systems can help businesses to save time as well. They would not have to waste
even a minute in planning and trying to create something which is not going to succeed.
Satisfication:
MDSS would totally satisfy marketing businesses as it would improve the effectiveness of
decision making, reduce costs by eliminating completely unsuitable and useless decisions.
DSS helps and improves the performance of decision makers by using a computer system.
One of the most important and useful things about a system like this is that it lets the business
look forward instead of being stuck and trying to examine the past to get answers to complex
questions.
Applications:
DSS can theoretically be built in any knowledge domain.
One example is the clinical decision support system for medical diagnosis. There are four stages
in the evolution of clinical decision support system (CDSS): the primitive version is standalone
and does not support integration; the second generation supports integration with other medical
systems; the third is standard-based, and the fourth is service model-based.
DSS is extensively used in business and management. Executive dashboard and other business
performance software allow faster decision making, identification of negative trends, and better
allocation of business resources. Due to DSS all the information from any organization is
represented in the form of charts, graphs i.e. in a summarized way, which helps the management
to take strategic decision. For example, one of the DSS applications is the management and
development of complex anti-terrorism systems. Other examples include a bank loan officer
verifying the credit of a loan applicant or an engineering firm that has bids on several projects
and wants to know if they can be competitive with their costs.
A growing area of DSS application, concepts, principles, and techniques is in agricultural
production, marketing for sustainable development. For example,
the DSSAT4package, developed through financial support of USAID during the 80s and 90s, has
allowed rapid assessment of several agricultural production systems around the world to
facilitate decision-making at the farm and policy levels. Precision agriculture seeks to tailor
decisions to particular portions of farm fields. There are, however, many constraints to the
successful adoption on DSS in agriculture.
DSS are also prevalent in forest management where the long planning horizon and the spatial
dimension of planning problems demands specific requirements. All aspects of Forest
management, from log transportation, harvest scheduling to sustainability and ecosystem
protection have been addressed by modern DSSs. In this context the consideration of single or
multiple management objectives related to the provision of goods and services that traded or
non-traded and often subject to resource constraints and decision problems. The Community of
Practice of Forest Management Decision Support Systems provides a large repository on
knowledge about the construction and use of forest Decision Support Systems.
A specific example concerns the Canadian National Railway system, which tests its equipment
on a regular basis using a decision support system. A problem faced by any railroad is worn-out
or defective rails, which can result in hundreds of derailments per year. Under a DSS, the
Canadian National Railway system managed to decrease the incidence of derailments at the same
time other companies were experiencing an increase.