Gaining Competitive Advantage with Decision Support Systems

Over the last five decades, Decision Support Systems (DSS) have come a long way. They have transformed from automated systems for simplifying calculations into highly sophisticated arrangements combining hardware, software and human intelligence for handling large volumes of data, studying different outcomes, indentifying new opportunities and implementing strategies effectively. In fact, decision support systems seem to have overtaken human intelligence.

DSS, comes as an important tool that can quickly measure all the parameters, carry out an in-depth analysis, elicit future trends and suggest possible courses of action. This means that a modern-day DSS is capable of visualizing future trends in a given area, offering useful insights to businesses. And this is how it creates a competitive advantage for a business. Moreover, the advancements in computer, mobile and internet technologies have had a strong impact on the design of a DSS and its capabilities. Let’s take a look at what can be expected of decision support systems in future.

Technology Trends in DSS

Decision Support Systems are constantly evolving. The new technologies, new approaches and ever-changing business needs are responsible for their continuous evolution. In particular, technology has made the highest impact on their development.

Experts identify key developments or trends that you may see in this class of software systems in near future. These include:

  • GIS (Geographical Information System) is going to play a crucial role in a borderless business world in future. It’s a system designed to manage and analyze geographical data, assisting decision makers in planning location-based services or location-based manufacturing. GIS technology also coordinates with latitudes and altitudes of a region to determine its suitability for a plant or manufacturing unit. And when coupled with GPS, it will allow decision makers to adjust their product supply chain depending upon the behavior of consumers in a particular region.

  • The role of OR (Operational Research) methods is going to increase in building DSS, to provide more realistic picture in a given situation to the decision maker.

  • Internet technology has a strong impact on almost everything we do. The next-gen DSS, most likely, will meet search engine to quickly search and address a particular problem.

  • A future DSS may be able to determine the near-correct shelf life of a product. It may be intelligent enough to understand the emotional and psychological factors involved in purchase decisions.

  • A future DSS may be able to utilize cognitive features, intensively using visualization, memory, reasoning, attention and comprehension.

DSS for Strategic Decision Making

The speed at which DSS are evolving, it’s pretty clear that they are going to help companies in strategic or unstructured decision making. The next-gen smart DSS will be more capable of helping decision makers in making strategic decisions that affect the bottom line of a business in long run. Examples of strategic decision include:

  • Efforts required to design, manufacture and launch a new product
  • How to move towards the vision of a company faster and more effectively?
  • Which direction your company is headed in?
  • What are the best strategies to compete and stay ahead?
  • What can lead to stagnation of a business?

Decision support systems are going to be smarter with each passing year. Businesses can really look forward to computerized systems working alongside human cognition.

Decision Support Systems to Create a Competitive Advantage

Decision making process involves:

  • Utilization of resources
  • Identifying the impacts of various courses of action
  • Investigating the actions taken previously
  • Analyzing past and present trends to forecast future trends

Simple decisions can be made immediately without much consideration. But complex decisions are given more time and thought because they directly hit the bottom line of a business. Decision support system carry out the decision making process in a structured manner and helps decision makers identify the best acceptable solution for a specific problem. Let’s take an in-depth look at how a decision support system helps businesses remain at the forefront of competition:

  • Shorter Decision Making Cycle: Time plays a substantial role no matter which industry you operate in and what level you work at. Since inception, all categories of decision support systems are intended towards simplifying things and saving time. A DSS helps a business in quickly making an effective decision by analyzing its pros and cons. The time taken in studying data and comparing the possible courses of actions is significantly reduced. The decision time cycle gets shorter, allowing businesses to act speedily in a given situation, ultimately reducing the time-to-market.

  • Increased Data Accuracy: Businesses had several versions of truth before DSS came into existence. In fact, the problem still sustains for those who haven’t started using any type of decision support system. The reason is that analysis and interpretation of data involves human bias. Since each evaluator thinks differently, there can never be a universal truth. A decision support system analyzes data without any bias and presents it in its accurate form. This enhances the possibility of improved decision making.

  • Strategic Significance: Decision Support System changes the way businesses operate. An important concept that brings to light the role of computerized decision making is “value chain management”. A decision support system takes into account economical factors and past and current trends to determine the costs and profits and the overall value. It provides different outcomes or courses of actions that are economically distinct and offer different values. In short, it notifies the decision maker of the best course of action that creates higher value at the lower cost. Definitely, a business gains competitive advantage when it is successful and when the value it creates surpasses the cost incurred on it.

  • Direction and Nimbleness: Moving in the right direction as quickly as possible helps businesses stay ahead of the competition. In fact, this is what keeps organizations agile and proactive. It’s essential for them to quickly respond to market changes. Manual processing of data takes longer; thus, defeats the whole idea of nimbleness. A decision support system, using the available information, presents projected revenue figures and expected market changes in the times ahead. For example, a real estate company relies on a DSS to decide how to set the prices for each apartment so that maximum of them are sold and the profits reach the uppermost limit. In today’s global marketplace, it’s crucial that companies move in the right direction, from the beginning.

  • Reduced Cost of Decision Making: The deployment of a decision support system dramatically reduces the cost of gathering, sorting, processing and analyzing data. Managers have a growing awareness that automated decision support is no longer an exclusive territory. In fact, the cost of information storage, hardware and computer and internet technology is falling considerably. This means the cost of distributing decision-making technology even to the lower levels of hierarchy is decreasing. The application of DSS will no longer be restricted to the certain departments or hierarchical levels. The faster decision making at all levels of management will help businesses stand apart from the pack.


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