Understanding Decision Support Systems

In a typical organization, decisions fall into one of these categories. Structured decisions, or programmable tasks, can be automated because a well-defined standard operating procedure exists for these types of decisions. Record keeping, payroll, and simple inventory problems are examples of structured tasks. Information technologies are a major support tool for making structured decisions.

Semistructured decisions are not quite as well defined by standard operating procedures, but they include a structured aspect that benefits from information retrieval, analytical models, and information systems technology. For example, preparing budgets has a structured aspect in calculating percentages of available funds for each department. Semistructured decisions are often used in sales forecasting, budget preparation, capital acquisition analysis, and computer configuration.

Unstructured decisions are typically onetime decisions, with no standard operating procedure pertaining to them. The decision maker’s intuition plays the most important role, as information technology offers little support for these decisions. Areas involving unstructured decisions include research and development, hiring and firing, and introducing a new product.

Semistructured and unstructured decisions are challenging because they involve multiple criteria, and often users have to choose between conflicting objectives. For example, a manager might want to give raises to employees to boost morale and increase employee retention but has been asked to reduce the total cost of production. These two objectives conflict, at least in the short run. Different types of information systems have been developed to support certain aspects and types of decisions.

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Thank you ❤ I am a novice UX Designer and I'm trying to build a DSS application in a product I am designing and this video is just the eye-opening one.