How do DSS differ from TPS?

by Daniel J. Power
Editor, DSSResources.COM

excerpted from Power, D. (2002, pp. 8-9)

Development of Decision Support Systems (DSS) is one of the rapidly changing frontiers in the application of computers in organizations. One reason we study DSS is to understand how they differ from other systems. We have successfully implemented computer-based Transaction Processing Systems (TPS), but knowledge of building these operational systems is not adequate to create effective DSS. So if DSS are to be successfully designed, developed, and implemented, then both managers and many MIS professionals need a more sophisticated technical and philosophical understanding of DSS.

Technology is creating new decision support capabilities, but much learning and discussion needs to occur to successfully exploit the technological possibilities. DSS differ in many ways from operating systems that process business transactions. For example, a popular system that has been widely implemented is called Enterprise Resource Planning (ERP). ERP is not a Decision Support System even though the term suggests that decision making and planning will be improved. In general, ERP is an integrated TPS that facilitates the flow of information between the functional areas of a business. Recently, DSS have been built that help managers analyze data from ERP systems. The implementation of ERP systems has made it much easier to create a enterprise-wide data-driven DSS.

A major difference between TPS and DSS is the general purpose of each type of system. TPS are designed to expedite and automate transaction processing, record keeping, and simple business reporting of transactions. DSS are intended to assist in decision making and decision implementation. Transaction processing is, however, related to the design of DSS because transaction databases often provide data for decision-oriented reporting systems and data warehouses.

Transaction Processing Systems usually provide standard reports on a periodic basis and support the operations of a company. DSS are used on demand when they are needed to support decision making. A manager typically initiates each instance of DSS use, either by using the DSS herself or by asking a staff intermediary to use a DSS. Clerical employees, and some managers, use TPS to support operations. Line managers and support staff are the primary users of DSS. TPS record current information and maintain a database of transaction information. DSS generally use historical internal and external data for analysis. DSS may focus on quantitative analysis and modeling current and future scenarios. TPS emphasize data integrity and consistency; and although both of these qualities are important in every system, the primary emphasis for a DSS is on flexibility and on conducting analyses and retrieving decision relevant information and knowledge.

One can draw many distinctions between TPS and DSS, but analysts and managers need to stay focused on the phrase “decision support” in the term “Decision Support System.” DSS are intended to improve and speed up the processes by which people make and communicate decisions. Thus, the emphasis in building a DSS is on increasing individual and organizational decision-making effectiveness rather than on increasing efficiency in processing operating data.


Power, Daniel J., "Decision Support Systems: Concepts and Resources for Managers," Quorum Books (2002). Faculty Book Gallery. 67.

Last update: 2020-11-07 09:57
Author: Daniel Power

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