The Stream by River Logic

What Is a Decision Support System & Why do I Need One?

October 21, 2015 | By River Logic

First things first: what is a decision support system (also referred to as a DSS)? In short, it's a computer solution using decision logic and statistical data to help managers and operation planners overcome strategic deficiencies to implement streamlined, efficient solutions. DSS systems can be entirely optimized via computer, entirely human-powered or a hybrid of both.

The hybrid option is the most effective as computers will only follow operational parameters. Meanwhile, purely human means restrict a business from advantages that come from the application of big data (statistics on the order of terabytes and petabytes) in a solid DSS. So while full automation is foolish, controlled automation is ideal. The greatest amount of optimization via computer in concert with human oversight is desirable. For this reason, the overwhelming majority of DSS programming is aimed at people in upper-management that are not necessarily software whizzes.

Who Uses Decision Support Systems?

The people who are in a position to solve structuring errors are usually upper managers of some kind. With DSS, there's an extreme focus on solutions that are not only adaptable to changes in the environment but are flexible and facilitate easier decision making. Decision support systems help those in positions of authority compile enough information to make an informed decision about changes in policy, implementation and so forth. (As we know, exigencies of business are as diverse as businesses themselves are.) Data included in such a system usually covers things like inventory, projected cycles of revenue based on trends in sales and comparative figures in sales from one cycle to the next.

Many businesses have implemented a decision support system and seen it increase their effectiveness substantially. Lockheed Martin is famous for developing the SR-71 Blackbird, an airplane that can go as fast as 2000 mph while (barely) remaining in Earth's atmosphere. They started using an extremely early version of a decision support system all the way back in the 1970s. In the eighties, Wells Fargo and AT&T also jumped on the DSS bandwagon — of course, decision support systems at that time only had access to kilobytes and maybe megabytes; not terabytes and petabytes.

What Kind of Numbers Do DSS Systems Accommodate?

Let's get some perspective: a "byte" is a unit of data. A "kilobyte" is a thousand units of that data. A "megabyte" is a thousand kilobytes. A "gigabyte" is a thousand megabytes. So a "terabyte" is a thousand gigabytes, and a "petabyte" is a thousand terabytes. You see how the trend is positively exponential? A PDF document of 150,000 words ends up being just under two megabytes. At that rate, the Lord of the Rings (LOTR) trilogy would be about six megabytes. You could fit almost 167 copies of LOTR in one gigabyte. You could provide 167 million copies of LOTR in one petabyte.

Imagine 167 million times the data in LOTR regarding your business being analyzed and statistically interpreted in real time. In order for 167 million workers to get through one segment of data, it would take them the same amount of time it takes a single person to read the LOTR trilogy. That's a lot of hours! DSS systems, on the other hand, get through one segment of data instantaneously.

Potential Savings From DSS Implementation

It's easy to see why decision support systems are becoming the status quo for organizations that are serious about their business: they literally save millions of dollars. Let's do the math on those 167 million employees each reading through the LOTR trilogy to write a report which streamlines problems in a dataset as large as that trilogy's 455,000+ words. If each employee could read 10,000 words an hour, it would take them a little over forty-five-and-a-half hours to get through the dataset. At $10 an hour, that's $455; $455 multiplied by 167 million becomes just under 76 billion.

According to the UK Telegraph, The Industrial and Commercial Bank of China has $3.3 trillion in assets, and their yearly sales are $166.8 billion. 76 billion is just under half of that annual increase. If that Chinese Bank hadn’t already incorporated DSS, they might be able to increase their yearly profit by half via decision support system.

It's an almost ironclad certainty that this bank does have a DSS in place, and that likely leads into their profit. The point is, streamlining business through technology that transcends human ability — yet is still malleable to human hands — only stands to save money and increase a business's effectiveness throughout the marketplace.

Closing Thoughts

Large numbers have been used to illustrate the effect that a decision support systems can have on organizations. There aren't 67 million employees in a single corporation; those are government numbers. But if your organization has 10,000 people — and Fortune.com notes there are at least 36 such businesses — working a 45.5 hr/dataset job at $10/hour, you could save $4.55 million a year with a proper DSS system installation. The take-home point? Adopting a DSS deserves, at the very least, some serious consideration.

Optimization or Similation  

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