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A decision support system (DSS) is a system that is intended to aid in the making of business decisions, taking into account all the relevant data available. At times, the term is identified specifically with software programs capable of importing data from a number of sources and collating it into some sort of useful format that is used in decision making. Whether the system is designed to make extensive use of computer technology or relies on older methods of assimilating data, the role of decision support systems in the life of any company is significant.
One key role of decision support systems is the actual organization of data itself. Using some sort of knowledge-based system of bringing information together from various sources makes it much easier to relate all aspects of that data. For example, assimilating information on sales generated for a given period with the actual receivables for that same period and comparing those figures to the cost of production can provide some valuable insights into how to manage company resources to best advantage in an upcoming period. Having a central repository for the data that is not merely a dumping ground but a well-organized snapshot of the business can make it much easier to understand where the company is today.
Aiding in the process of moving into the future is another important role of decision support systems. After the data is assembled and organized into a cohesive and useful body of information, it is much easier to evaluate various strategies for the future, and to project the outcome of those decisions. By providing a sound basis for crafting those projections, owners and managers have the chance to determine if a given approach is worth the investment of time and resources in relation to the anticipated returns, or if a different approach should be considered.
The role of decision support systems can even have some impact on how a business is organized internally. Bringing all relevant data together can sometimes make it apparent that some degree of waste is occurring at different levels within the business, with the effects of that waste seen elsewhere in the business operation. From this perspective, a competent DSS can be the tool that makes it possible to restructure internally so that waste is minimized, a move that allows the business to lower costs and increase the bottom line even if there is no increase in the production of finished goods.
While the exact role of decision support systems will vary slightly in different companies, there is no doubt that systems of this type can quickly offset any costs involved in their implementation. By providing a foundation for the decision-making process that is based on fact and provides easy access to all relevant data, time can be saved in making decisions. Above and beyond the time savings related to making decisions, a reliable DSS also makes it easier to sidestep actions that could create short-term or even long-term adverse circumstances for the company, a benefit that increases the chances of the business remaining viable for many more years.