Management support systems focus on managerial uses of information resources. These systems provide information to manage for planning and decision making. The information provided by these systems is based on both the internal and external data using various data analysis tools.
They also offer a choice to the user to select out of these tools for the purpose of data analysis. These systems serve the information needs of managers at middle and top levels in the managerial hierarchy.
There are three types of management support systems, namely:
- a) Decision Support Systems,
- b) Executive Information (support) Systems and
- c) Expert Systems.
Decision Support Systems:
Decision support systems (DSS) are designed to support the decision making process of managers to improve their effectiveness and thereby efficiency of the enterprise. They are based on the premise that managerial judgement cannot be replaced by any computer based solution. However, by offering the support of data and models, it is possible to improve the decision making process even in the case of semi-structured and unstructured problems.
The basic purpose of DSS is to extend the capability of a manager’s decision making process by supporting tools and data made available to him under his direct control. DSS neither presupposes specific information requirements and predefined tools for analysis for different types of decisions nor does it impose any solutions on a manager.
Thus, it gives flexibility to the manager to decide the input data, tool of analysis, depth of analysis and reliance on the outcome of Analysis for decision making. DSS offers an interactive environment for users and thus permits manager to experiment with data and models to develop the optimal decision making strategy in a given situation.
Executive Information Systems:
DSS are designed to cater to the information needs of managers at middle to top levels. They relate to rule-based work doing modelling and analysis of data in order to make it useful in decision making.
However, at the top of managerial level, there is a need to focus more on packaging and delivery of information than on generation of information. The top manager deserves better environment for information access than that provided by DSS.
The top executives need fast access to up-to-date, concise information and exception reports with facilities to personalised information and analysis. The information systems designed to cater to such needs of top executives are called Executive Information Systems (EIS) or Executive Support Systems.
These systems act as electronic briefing systems and offer tremendous flexibility in use. EIS uses internal as well as external information and offers an interactive and a user friendly operating environment.
The increasing complexities and dynamism in the emerging business environment require greater interaction of functional’ managers with the experts so as to get timely advice. These experts would not only sift information from vast pools of diverse information, but also use their expertise to offer advice.
Traditionally, the expertise available in an organisation has provided an important basis for achieving, improving and maintaining its competitive position. All other things being equal, firms without comparable expertise are at a disadvantage.
Human experts may not be able to cope with the new challenges, given the constraints of time and complexities of the new environment. Besides, there may not be uniformity and consistency of advice for a given decision situation over a period.
This is so because of the obvious inability of human beings to capture the impact of various decision variables all the time. The Information Fatigue Syndrome and the limitations of human experts in the changing business environment have resulted in increasing popularity of business expert systems (BES).
These systems simulate human activity and keep capturing and systematising business knowledge, extending the decision making capabilities of expensive and scarce human experts, so that others can use their decision experiences. They offer the advantage of flexibility in capturing and representing information of different types in diverse forms.
A business expert system receives a problem from the user, identifies its data requirements, analyses the relevant data against the decision rules (contained in a knowledge system). Once the problem is solved, the system through its inference engine reports the solution to the user and is also able to explain its line of reasoning in reaching that solution.
A business expert system can act as an aid to managerial effectiveness by providing advice. Its solutions/advices are always consistent, uniform, thorough and methodical. It functions as a standardised problem solver. The business expert system is able to explain the line of reasoning it uses for solving a problem.
A user can study the rationale and is free to accept, modify or reject the solution. Unlike other expert systems in the field of medicine, engineering, etc the objective of the business expert system is not to replace evaluation by human expert(s) by the computer program.
Rather, the objective is to acquire the expertise of the human expert and make it available in a standardised form to human expert(s) and others in the organisation. They work out strategies to use knowledge in the application areas so as to develop plausible solutions to the problems.
The typical areas of application of expert system in business include:
- Make or buy decisions
- New product launch decisions
- Determining credit limits
- Product development
- Investment counselling
- Performance evaluation
- Incentive systems
- Customer query
- Project evaluations
- Production scheduling
- Routing decisions