Improving the effectiveness of strategic decision making using an integrated decision support system HOSSEIN BIDGOLI and MOHSEN ATTARAN Abstract: Decision support systems (DSSs) are used in many types of business. However, which type is suitable for a specific purpose? How do expert systems help DSS? This paper analyses the popular DSS packages on the market and offers a general overview about their use now and in the future. Keywords: software development, decision support systems, expert systems. T he variety and complexity of decision making at all levels of the organization, particularly at the strategic level, have increased significantly. There are several reasons for such a change. Severe national and international competition, rapid changes in technology, and frequent changes in business environment are among some of the reasons. For the past forty years, different applications of computers have helped decision makers to make more effective decisions. In recent years, much has been written on decision support systems (DSSs) and their applications in areas such as manufacturing, marketing, human resource management, accounting, small business, strategic planning, etc. Decision support systems capabilities are also present in expert systems. Using a general definition of DSS, expert systems are classified as special models of DSS. It appears that decision support systems present some clues for improving decision making in different functional areas. The ever decreas- ing cost of decision support systems software and significant improvement in the quality of this software have made the design and implementation of DSS a more viable option. However, many questions still remain. How and why are these systems suitable for strategic planning? How are these systems different School of Business and Public Administration, California State University, Bakersfield, CA 93309, USA from electronic data processing and management information systems? What are expert systems and what are their roles in the DSS environment? What are the ingredients of DSS? For what types of analysis are the different types of support systems suitable? What software is available on the market for implementation of these systems? And finally, what are the criteria for selecting DSS software? This paper attempts to answer these questions in an integrated fashion. What is strategic planning? Strategic planning is a tool to aid management in strategic decision making. The purpose of strategic planning is thus to accomplish a sufficient process of innovation and change in the firm. As such, strategic planning involves the following general tasks: • Formulation of long term goals and objectives. • Selection of strategies to achieve goals and objec- tives. • Balancing of internal competencies and resources to take advantage of external opportunities or reduce the impact of external threats. Strategic planning within the business should, at the very least, include the functional areas of marketing, production, finance, and personnel. Within each functional area certain decisions must be made with a high degree of effectiveness and efficiency. Table 1 summarizes the major functional areas and strategic decisions within each area. The typical EDP or MIS, as we will see in the next section of this paper, are not quite suitable for most strategic decision making activities. Decision support systems, with their 'user friendliness' and 'ad hoc' operations, present a better alternative. The essence of the ideal strategic decision making process is timely and integrated information, readily accessible to those decision makers who need it. Table 2 presents the information requirements for strategic decision making. 278 0950-5849/88/050278-07503.00 O 1988 Butterworth& Co (Publishers) L t d . information and software technology