A Decision Support System is a computer based application that is used in the collection, organization, analysis and presentation data in a business organization hence useful in assisting easier decision making by top management. Some of the typical information the Decision Support System might gather and present includes: the businesses’ projected sales revenue based on assumptions, access to all the information reserves usually in a centralized database, comparative sales data based on decided intervals and the results of different decision alternatives. A properly designed decision support system may present information graphically and include artificial intelligence (Power, 2002). Such information is useful to business executives for easier decision making. Academicians usually perceive the decision support system as a tool for enhanced decision making process whereas its users see it as a tool to facilitate organizations processes.
A Management Information System, on the other hand, is a computerized system that continually gathers data from within and outside the business organization, processes, and stores it in a centralized database. The computerized database is then programmed in such a way it produces regular reports on every management level in the company. The Management Information System also helps top managers to view financial data such as daily revenues and expenses attributable to specific departments of the organization. Such reports are very essential to the top management as it enhances easier monitoring and strategic decision making of the company as a whole. Information does not only indicate the status of the business but also indicates why it is either improving or on the decline. For instance, a proper management information system ought to report performance in relation to cost.
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Differences between Information Management System (MIS) and a Decision Support System (DSS)
As much as both the Management Information System and Decision Support System are used for similar purposes in business management, they differ in a few aspects. For instance, the Management Information System is useful and assists in the communication between various departments in an organization the Decision Support System, on the other hand, is an improvement of the concept of Management Information System as it focuses more on leadership where senior management provides innovative mission for the firm
Another notable difference between the two is that Management Information System focuses more on the operational efficiency of the business organization as a whole whereas Decision Support System focuses more on effective decision making by management which is usually intended in helping the company do the right thing.
Notably, a Decision Support System is characterized by low data volume input, an interactive model characterized process, and an decision output analysis whereas a Management Support System is characterized by large data volume input, a simple model characterized process and an output of summary reports (Power, 2002). This usually results in a Decision Support System delivering a report that is flexible whereas a Management Information Systems report is usually not flexible.
Management Information System is all about a theory where data is collected from different places whereas, in a Decision Support System, data is collected from the various departments in the organization and involves practice and analysis of the same. This makes a Management Information System a basic level of decision making and a Decision Support System the main part that is the ultimate decision making tool (Power, 2002). For an organization to effectively manage its operations, both systems should be employed effectively.
Power, D. J. (2002). Decision support systems: Concepts and resources for managers . Westport, CT: Quorum Books.