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Decision Support System (DSS): Know How It Gives An Edge To Your Business

A decision support system is a computer-based software that, harnessing the power of artificial intelligence (AI), helps the decision-makers to make an informed decision.

The decision-makers here could either be business owners, executives, managers, team leaders, and/or any decision-making authority in an organization or company.

But remember, this application or program doesn’t necessarily give a decision itself.

Now the question is how this software supports decision-making. Well, it’s as simple as that.

Decision support system helps a decision-maker to retrieve data and test alternative solutions during the process of problem-solving.

Let me make you understand it through an example:

A bank office (a decision-making authority) is visited by a customer with a loan application.

Now the office has to decide whether or not the customer should be given the required loan.

To verify whether the customer is eligible or not for the loan, the officer will use a decision support system to retrieve the customer’s data and test alternative solutions.

After analyzing the customer’s previous and existing credit score, monthly earnings, and his/her capabilities to determine whether or not he/she will be able to repay the loan, the bank officer (the deciding authority here) decides whether the customer should be sanctioned the required loan or not.

So, since the customer approached the bank officer with a loan application until the final decision, the bank officer took the help of a decision support system in his/her computer system.

Based on the alternative solutions obtained after analyzing the customer’s data, the officer decides whether or not the customer should be given the required loan.

Here DSS supports the bank officer (who is a decision-maker) in deciding whether or not the customer should be given a loan, based on his/her retrieved data.

Examples of a few decision support system (DSS) are:

  1. Oracle Performance Management Applications
  2. IBM Decision Optimization for Watson Studio
  3. Paramount Decisions
  4. DecisionTools Suite

But a DSS could either be a fully computerized system or a human-powered system (meaning, it may need human power for its operation) or a combination of both.

How does decision support system work?

Well, there are three main components of a decision support system, on which it works.

Organizational data: To understand it, let’s again take the bank loan case. In this case, the bank must have data (for example, relevant information and knowledge) related to the customer who has approached for a loan. Data must be there because, in its absence, the bank officer will not be able to retrieve, analyze and verify the customer’s data.

The retrieved data will help the deciding authority (here the bank officer) whether or not the customer has taken any loan. If he/she did take, could he repay the EMIs?

Whether the customer has regular income or monthly income. Is the customer able to pay the loan?

In case, the DSS has no data about the customer, it will be very difficult to make any decision.

Model: A model means any such formula whereby data of the customer is analyzed. It

Remember, the bank can give a loan only after thoroughly analyzing the customer data.

User interface: a user interface here means a dashboard, which has buttons, text, and images.

This means that DSS must attune with model construction and model analysis by allowing for a properly structured user interface.

Remember, all officers are not technical. Hence, the user interface needs to be very easy to use so that even a fully non-technical person can understand and use it easily.

So, based on the above study, a DSS is – a computer application – which analyzes the data in the storage – and after analyzing the data – it brings a result in front of the decision-maker – based on the result, the decision-maker decides what he/she has to do.

This is the process of a digital support system, but one of the most important things is the data.

And if it is not there, there will be no result and thus no decision by the decision-maker.

This also means that when you opt for any decision support system (DSS) to solve your problem, or to solve any organization’s problem, in that case, it is important to consider whether or not the decision support system has that relevant information or data.

Or, the DSS that you have chosen will support the data (that you want to put in that system.

The data that you want to store in the DSS may be in the form of an image/audio/video or text.

So, before selecting any decision support system for you, verify the above types of data.

“A decision support system can be defined as an interactive computer-based system, which helps decision-makers in utilizing the available data and model to make a decision.”

What are the key features of a DSS?

  • It performs complex, sophisticated, and comparisons using advanced software packages.
  • It can manage a significant amount of data from different sources.
  • It allows for report and presentation flexibility.
  • It helps with rapid access to information.
  • It supports drill-down analysis.

How does DSS help businesses stay at the forefront of competition?

Shorter decision making cycle

  • It significantly reduces the time spent studying and comparing the feasible courses of action.
  • It helps a company to quickly make an effective decision by analyzing its pros and cons.
  • It shortens the decision time cycle.
  • It simplifies things and saves time.

Increased data accuracy

  • It eliminates the need for any human bias that used to exist before a decision support system.
  • It analyses the existing data without any bias and brings it in its accurate form.
  • It augments the chances of improved decision-making.

Strategic significance

  • It considers economical factors along with present & past trends to ensure the profits and costs and the overall value.
  • It suggests different courses of action that are economically distinct and offer different values.
  • It provides the best course of action to generate higher value at a lower cost.
  • Overall, it changes the way companies operate their businesses.

Direction and nimbleness

  • It provides estimated revenue figures and anticipated market changes in the time ahead.
  • It helps companies move in the right direction right from the very beginning.
  • It helps organizations quickly respond to the ongoing market changes.
  • It helps businesses stay ahead of their competitors.
  • It eliminates the need for manual data processing.
  • It keeps organizations proactive and agile.
  • It defeats the entire idea of nimbleness.


If a real estate company wants to sell its apartments and gain more and more profits, the decision support system helps the company in deciding how to fix the prices for each apartment.

Reduced cost of decision making

  • It reduces the cost of gathering, sorting, processing, and analyzing data.
  • It isn’t confined to some hierarchical levels or departments.
  • It, thus, curtails the cost of decision-making.

What are the key advantages of a decision support system?

  • It Improves communication between people through brainstorming sessions, meetings, etc.
  • It helps save time by speeding up the process of decision-making.
  • Reports generated by a DSS can be used as evidence.
  • It helps in automating processes.
  • It helps reduce costs.

Finally, a decision support system takes care of the entire decision-making process in a structured way and assists the decision-makers of an organization (such as managers, executives, CEO, and business owners) to find out the best acceptable solution for a specific problem. But remember, it doesn’t give any decision itself.

After reading the article about how a digital support system (DSS) helps your business gain a competitive age,  we hope that you would like to know more about the company that can help you with the deployment of DSS

If you have any questions about this application or need some experts’ advice to implement the same, we would be happy to answer them in the comment section below.

Serge Janssen Daalen
I love business operations and the magic of great tools. How we can improve the quality of the work and pleasure doing it.

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