Monday, November 12, 2007

IT Archaeology: Whatever Happened to SDS?

I've been digging through some ancient texts (in IT terms) over the past week or so, looking at the issue of IT governance and how it relates to the development of decision support systems. In doing so, I read again an article from 1971 in Sloan Management Review that first coined the term 'decision support system' written by two academics from MIT: Anthony Gorry and Michael Scott Morton.

In defining DSS, they also designed a second class of information system that I'd completely forgotten about, known as a 'structured decision system' (SDS). The term 'structured' comes from an adaptation of a model of decision-types by Nobel laureate Herbert Simon. In Gorry & Scott Morton's terms, decisions are either structured (well-understood, fairly easy to resolve, lend themselves to well-defined workflows or decision-rules), unstructured (difficult, high levels of ambiguity, no clear process for making the decision) or somewhere in-between (semi-structured).

Gorry & Scott Morton argued that such systems are designed to support semi- and un-structured decision problems. For structured decisions like inventory control, short-term forecasting and so on, they coined the term SDS.

This got me thinking. I had always seen today's BI systems as the inheritor of the DSS concept - basically the latest term in a long string of marketing names for systems designed to support managerial decision making. Now, I'm not so sure. In looking at Gorry & Scott Morton's definitions, most BI tools seem to be targetted more at structured, rather than unstructured decisions. Couple this with efforts by people like Howard Dresner to shift the BI concept more and more to enterprise reporting, and I reckon that BI is more about SDS than DSS.

Which is a problem.

There is a class of decisions that really need the support of systems that can help the decision-maker through the decision-making process by embedding principles of good decision-making in the system, and helping them make sense of the information they have. These decisions tend to be strategic and important, and the potential ROI for a system that can improve decision-making in this area goes way beyond being able to run an operational report that used to take hours in 30 seconds. In other words, there is a real need for the decision support systems that Gorry & Scott Morton described 36 years ago, and I don't think that BI tools are currently being used to build them.

This is not to say that they're not being built, of course. Instead, I think they tend to fly under the radar more, as individual strategic decision-makers throw together systems to answer specific questions in a way that they're comfortable with: witness the continued pervasion of Excel in the upper echelons of organisations despite the flash-wizardry of the latest 3D-pie-charting engine; skunk-works projects for individual managers; the explosion of independent data marts.

As I said above, the impact of the effective use of a DSS far outstrips that of a SDS because the decisions made fundamentally and directly affect the strategic direction of a firm. It's critical that good quality DSS are developed, and I don't think we're going about it in the right way at the moment. Excel can be dangerous if not used properly, but because everyone is focused on the highly-visible SDS-like BI projects, the DSS-needs of an organisation are often addressed in an ad hoc way.

It's a pity that we don't pay attention more to what was written in the past about IT. Not only do you realise that we keep making the same mistakes despite the changing technology, you come across interesting ideas that can change the way you perceive today's industry.