Blog: Dan Power

How does decision support processing differ from transaction processing?

Sun, 22 Jan 2012 06:50:55 -0700

by Dan Power

Editor, DSSResources.com

Information systems can be categorized in many ways, but historically business information systems began as tools to record and process transactions. It is still useful

to distinguish between informational decision support and transaction processing systems. Transaction processing is divided into individual, indivisible operations, called

transactions. More specifically, a transaction is a discrete unit of work that must be completely processed by a computer system or it fails. For example, entering a customer order is an example of a transaction. Decision support or informational systems summarize and report on transactions.

Continue reading at

http://dssresources.com/faq/index.php?action=artikel&id=241

What is Hadoop?

Wed, 11 Jan 2012 07:32:56 -0700

Data-driven DSS may need to access and process very large data sets to support decision-making. One way to provide this capability is with Hadoop. Apache Hadoop is an open source Java framework for processing, storing and querying large amounts of data distributed on clusters of commodity hardware. Hadoop is a top level Apache project that Yahoo! initiated. The Hadoop project (http://hadoop.apache.org/) develops open-source software for reliable, scalable, distributed computing. continue reading at http://dssresources.com/faq/index.php?action=artikel&id=235 .

What is mobile business intelligence?

Tue, 20 Dec 2011 14:58:14 -0700

Mobile business intelligence refers to data-driven decision support applications on mobile devices like smartphones and tablet computers. Mobile BI uses wireless devices to support data transfer and operations decision making. Mobile BI applications exist for Android, Blackberry, iPhone/iPad, and Windows Mobile operating systems. In general, the phrase refers to a rapidly emerging decision support application area. More applications are becoming available from start-ups and traditional BI vendors for innovative dashboards, live reports, CRM and performance monitoring.

Please continue reading at http://dssresources.com/faq/index.php?action=artikel&id=229

Next stage BI -- Not!

Tue, 19 Oct 2010 17:44:40 -0700

Charles Phillips (the former Oracle copresident) is featured in the September/October 2010 Oracle Magazine in an article titled "The Next Stage in Business Intelligence." I always looked at Phillips as an acquisition specialist and not a technical or conceptual guy. So no surprise he is providing platitudes. Mark Hurd does know something about Business Intelligence, we'll see what he does in coming months.

So what did Phillips say in his July 7, 2010 speech in London?

"We've taken the idea of an integrated suite and applied that to business intelligence because there are a lot of ways to extract information out of systems, but you need the information to be consistent."

"We architected this system so you have common metadata across all datasources, all calculation engines, all rules, all workflow."

If only the architecture would do this. People introduce the problems.

Supposedly BI 11g "... solves some of the largest problems IT faces, which don't go away just by hoping everyone works together," Phillips said. "They have to be engineered that way."

So now we are engineering away people problems associated with metadata. No chance.

Decision Automation Nightmare

Fri, 07 May 2010 08:15:33 -0700

Programmed trading is partly responsible for the extreme market instability of Thursday, May 6, 2010. According to Matt Goldstein, "High-speed trading, which uses sophisticated computer algorithms based on specific scenarios to automate transactions at speeds in the millionths of a second, now accounts for about 60 percent of U.S. equity volume." In one 10 minute span, the Dow Jones average fell 700 points. Some stocks lost 30% or more.

What is happening? Traders develop rules that are monitored by software and then executed automatically using trading systems. Let's say I create a rule that "if the price of stock X falls to $20, then sell 10000 shares." Because the market moves so fast a person does not review the sell order and confirm, rather it executes automatically. That is fine unless a panic occurs and then the programmed trading magnifies the panic. What about counter trades? For example, "if the price of stock X falls to $20, then buy 10000 shares." Market makers are facilitating trades but there is risk aversion on the part of traders that results in stop loss rules that seem to cause and magnify the downward spiral.

Can programmed trading be better regulated? Should it be regulated? Do traders make errors when they create trading scenarios and develop trading rules? YES. The easiest solution is to require human confirmation of all trades. Will this solve all the problems? NO. Some human decision makers will push "OK" without monitoring what is happening in the market and will fail to look at the reasonableness of the trade. Is requiring human authorization in real time better than automated? YES, a human will be more directly responsible for the consequences and results of the trade. Decision support is better than decision automation.

References

Goldstein, M., "Stock plunge raise alarm on algo trading," Reuters, May 7, 2010, URL http://www.reuters.com/article/idUSTRE64631Y20100507 .

H. C. Hoover and H. A. Wallace

Sun, 14 Mar 2010 14:07:23 -0700

During the past 3 months I have been systematically reading books by and about Herbert Clark Hoover and Henry Agard Wallace. Why? you might ask. What do the writings of 2 dead politicians have to do with decision support? What do we learn about decision making from political biographies?

Some of you know I am an Iowa boy, born a few miles from where I now live. Both Hoover and Wallace have Iowa roots. Also, as I grew up in the late 50s and 60s, Hoover especially often returned to Iowa and I went to his Presidential Library dedication and memorial service in West Branch. My parents looked at both events as important in restoring Hoover's reputation. My maternal grandfather was a long time Democrat and Wallace had always done well with the Iowa small businessmen and farmers. By the end of the 1950s people whispered about Wallace more than shouted his praises because of rumors he was a communist. The red scare had hurt his reputation, even in Iowa.

Hoover and Wallace both wrote extensively about their ideals, values and beliefs and their decision making. Both served in the radio era of politics, especially Wallace. Hoover was a transitional figure and also a progressive (of the conservative sort). Wallace was a rousing speaker, Hoover less so. Both served as Secretary of Commerce. Hoover for 8 years, Wallace 18 months. Also, Wallace served as Secretary of Agriculture for 8 years and Vice President with Roosevelt for 4 years. Both were very smart men and neither fits your traditional image of a politician. Philosopher Kings would be a better analogy for describing their leadership orientation. Each was a paradox and a shy, curious good man.

One was an engineer, the other a largely self taught scientist and geneticist. Both were very successful financially. Hoover created a global engineering consultancy and made profitable investments. Wallace created hybrid corn and helped found Pioneer Hybrid seed corn company. Hoover was an orphan at age 9, but Wallace also had a childhood of hard work on the farm Hoover the dandy and gentleman; Wallace always the barefoot farm boy. Both are great examples of the American dream of hard work, creativity and merit leading to success.

What am I learning about decision making? The rational, more analytical approaches of both men were often thwarted by political and self-interest decision making. Both men had high integrity and strong religious beliefs and thought out values. Neither was very sensitive to the emotional side of decision making. Yet based on their records it is appropriate to call them farsighted geniuses of the first order. Despite, or because of, their brilliant minds both failed to deal with the conniving, self interest and bigotry that got in the way of making their ideas a reality.

Today one can look at their ideas and especially there ideals and still find a solid anchor for action. Many of the solutions of both men over their political lifespan have been adopted. Some policies and programs were adopted many years following their deaths.

I will continue my research, but clearly computerized decision support would not have helped either man be more successful. Both made decisions based upon principles that were deeply felt and not upon political expediency. They kept the facts in their heads and had outstanding memories and excellent analytical capabilities. Critical thinking, within the context of values and facts, was their decision support.

DSS for Small Businesses

Fri, 01 Jan 2010 07:28:56 -0700

A staff member at the local business magazine approached me about writing an article on decision support for managers in small businesses. I hesitantly agreed and now my deadline is approaching.

I am contemplating discussing small scale applications built using tools like MS Excel and MS Access and hosted applications like Salesforce.com. Also, in some lines of business you can find packaged applications with some decision support capabilities.

The big problem is that in 800-1000 words it is easy to overstate the need and the possibilities. My limited experience with small businesses has focused on cost estimating applications for small manufacturing companies, bid generators for catering companies, and construction cost estimators for residential.

Customer relationship management and improved data-driven forecasting are also promising applications for many small businesses.

I'll give this some additional thoughts in the new year. Comments, suggestions appreciated.

Chrome and Windows 7

Tue, 24 Nov 2009 17:06:06 -0700

I am a regular user of the Chrome browser from Google and I have been reading about the Chrome OS. I have also been trying Windows 7.

I like the speed and clean look of the Chrome browser. I also like seeing my most frequently used pages when I add a browser tab.

What does the browser and operating system innovation mean for decision support?

1) expanded capabilities in the user interface. I have always liked touch screen applications.

2) more focus on computing in "the cloud" and web-based applications.

3) more emphasis on mobility and computing "anytime and anywhere"

Have a Happy Thanksgiving.

Decision Support and Chaos Theory

Fri, 06 Nov 2009 13:08:03 -0700

Recently, I reread Jurassic Park, a 1990 science fiction novel, written by Michael Crichton. Blog readers may recall from the book or film that mathematician and chaos theorist, Ian Malcolm, forecasted the failure of the amusement park that showcased dinosaurs recreated from DNA in fossils and in mosquitoes captured in amber.

Malcolm provides a layman's explanation of chaos theory. In Wikipedia, "Chaos theory is a branch of mathematics which studies the behavior of certain dynamical systems that may be highly sensitive to initial conditions. This sensitivity is popularly referred to as the butterfly effect. As a result of this sensitivity, which manifests itself as an exponential growth of error, the behavior of chaotic systems appears to be random. That is, tiny differences in the starting state of the system can lead to enormous differences in the final state of the system even over fairly small timescales."

Reading Crichton again and thinking about unpredictability has lead me to ponder what chaos theory means for business forecasting. What dynamical business systems do or might behave as a chaotic system? Are production and economic systems inherently chaotic and unpredictable?

My current thinking is that long supply chains are the primary dynamical systems we need to be concerned about for computerized decision support. The current efforts to produce and distribute H1N1 vaccine suggest the unpredictability of multilevel, long time horizon supply chains. Are there other dynamical systems of interest? Perhaps mortgage lending, derivatives, risk related systems??

http://en.wikipedia.org/wiki/Chaos_theory

Preview Decision Support Basics

Mon, 19 Oct 2009 11:41:39 -0700

The printed version of my new book, Decision Support Basics, should be available November 10, 2009 for USD $25. You can preview the front materials and first 12 pages at http://businessexpertpress.com/books/decision-support-basics .

The E-Book is available now for USD$15.

Power, D.J. Decision Support Basics, Business Expert Press, 2009.

Because of increasing complexity, rapid change and risk, managers have an obligation to shareholders to learn about and understand computerized decision support systems (DSS). Managers must know much more about information technology solutions and especially computerized decision support. This book is targeted to busy managers and MBA students who need to grasp the basics of computerized decision support. Some of the topics covered include: What is a DSS? What do managers need to know about computerized decision support? And how can managers identify opportunities to create innovative DSS? Overall the book addresses 35 fundamental questions that are relevant to understanding computerized decision support.

In a short period of time managers can "get up to speed" on decision support, analytics and business intelligence. The book then provides a quick reference to important recurring questions. The questions are arranged in a logical order from more general questions to more specific, including specialized questions of interest to managers and future managers.

Goodbye SL

Sun, 11 Oct 2009 07:39:43 -0700

A few months ago I stopped participating in Second Life. I still feel the withdrawal pangs, but my first life is much better because of the change. I am exploring the open sim project for decision support projects so my interest continues in visual simulations. The fantasy and social aspects of Second Life are now gone for me and that is good. I will no longer be writing about that venue.

DSSResources.com 10th Anniversary

Tue, 08 Sep 2009 08:24:19 -0700

The DSS Research Resources home page started during late summer 1995 as a way of organizing the vast amounts of information on decision support systems (DSS) found during Webcrawler and Alta Vista searches for DSS-related web sites.

From October 2, 1995 to January 1, 1997, the DSS Research Resources website transmitted more than 300,000 files to visitors in more than 50 countries. In 1997, almost 1500 files per day were transmitted from a Quarterdeck WebStar server running on an Apple Macintosh IIci at http://power.cba.uni.edu/ and from a SUN Sparc 4 workstation running Netscape Commerce server at URL http://dss.cba.uni.edu. By 1997, the DSS Research Resources home page had been transmitted to more than 12000 visitors.

The name of the site was changed to DSS Resources in Spring 1998. The domain name dssresources.com was registered at that time with InterNIC. In late 1998 and early January 1999 DSS Resources moved to a second generation design with a new logo and format. The revised DSS Resources home page was posted January 15, 1999.

My son Alex and I activated the DSSResources.COM web site on 09/28/1999.

DSSResources.com is available 24-hours-a-day, 7-days-a-week. It serves thousands of people world-wide. Help us build and maintain this site.

Next-Gen BI?

Thu, 03 Sep 2009 14:56:26 -0700

The cover story for the Aug. 31, 2009 Information Week is titled "Next-Gen BI Is Here" by Doug Henschen.

What does Doug think is next-gen BI?

more timely data and more future oriented analysis

He sees the following driving factors:

1. predictive analytics

2. stream processing technologies for real-time performance monitoring

3. in-memory apllications for faster analysis

4. software as a service (SaaS)

These technology developments will enhance operational BI. Historical data warehouses or classic BI is still needed and important. So improved technology, but not next-gen BI.

Doug is the editor of IntelligentEnterprise.com.

Boiling Frogs

Wed, 08 Jul 2009 19:28:54 -0700

According to Charles Handy in The Age of Unreason, "People think they are clever at adapting to the changing world; however, people must do more than just adapt to change. They must jump out of their changing world and take charge of it if they are not to be boiled alive while they sleep."

With data warehousing we need to jump out of the relational database model. Moving normalized data to a data warehouse sets us up for failure. The data warehouse needs to be as carefully planned as the transaction database. Now is the time to stop relying on historical, normalized data from transaction databases to build a data warehouse. To stop the reliance on insufficient, convenient data, companies need to start collecting data specifically for decision support.

What do we need to know to make decisions in each decision process that is important to our firm? Ask that question, then get and store the data.

We have relied too much on convenient historical operating data. We will suffer the fate of the frog!

Decision Support Basics contents

Mon, 18 May 2009 11:40:54 -0700

I promised to list the 35 fundamental questions related to decision support discussed in my upcoming book, Decision Support Basics .

Chapter 1: Decision support systems revisited

1. What is the need for decision support?
2. What technology skills do managers need?
3. What is the history of computerized decision support?
4. What is the theory of computerized decision support systems?
5. What is different about modern decision support systems?

Chapter 2: Decision support concepts and key terms

6. What is a decision support system?
7. Do we (still) need Executive Information Systems?
8. What is business intelligence?
9. What is operational business intelligence?
10. Are BAM and BPM decision support systems?
11. What is knowledge management?

Chapter 3: Recognizing types of decision support

12. What is decision automation?
13. What is a computer supported special study?
14. What are the different types of DSS?
15. What are basic characteristics of a decision support system?
16. What are the features of a communications-driven DSS?
17. What are the features of a data-driven DSS?
18. What are the features of a document-driven DSS?
19. What are the features of a knowledge-driven DSS?
20. What are the features of a model-driven DSS?
21. What type of DSS is it?

Chapter 4: Decision support benefits and tradeoffs

22. What are potential benefits of decision support?
23. Can DSS provide a competitive advantage?
24. Can DSS impact decision outcomes?
25. What are substitutes for computerized decision support?
26. What are possible disadvantages of building and using DSS?

Chapter 5: Identifying decision support opportunities

27. What is decision support planning?
28. What is a decision process audit?
29. Is reengineering necessary to build an effective DSS?
30. What is a decision support system feasibility study?
31. What factors influence DSS implementation risk?
32. What are tradeoffs of outsourcing enterprise-wide DSS?

Chapter 6: Looking forward to innovative DSS

33. Do you need formative or summative evaluation?
34. What are ethical issues associated with DSS?
35. Can project champions reduce resistance to a new system?