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DSS News
D. J. Power, Editor
March 28, 2004 -- Vol. 5, No. 7
A Bi-Weekly Publication of DSSResources.COM
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Check the article by Tom Spradlin
"A Lexicon of Decision Making" at DSSResources.COM
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Featured:
* Ask Dan! - What type of DSS is X? or What type of DSS is a revenue
management application?
* What's New? at DSSResources.COM
* DSS News Releases
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DAMA International Symposium & Wilshire Meta-Data Conference
- Keynote Speaker Chris Date - May 2-6, 2004, Century Plaza
Hotel, Los Angeles. Details at
http://www.wilshireconferences.com/MD2004/index.htm
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Ask Dan!
by Dan Power
What type of DSS is X? or What type of DSS is a revenue management
application?
In my email, in consulting and teaching situations, and on the Free DSS
Forum at DSSResources.COM, the issue of "what type of DSS is X?" is
common and recurring. The message is getting out that all DSS are not
the same. DSS researchers have observed and recognized the differences
for years, but now managers, developers and vendors are realizing that
differentiation of DSS is important and "real". Classification of
objects, things, and artifacts is partly systematic analysis and partly
the application of specific criteria from a rubric that is linked to a
classification scheme. Many of us played the game 20 questions during
our youth or as parents with our children. The game is fun, low cost
and educational and it teaches classification skills. Often times the
player begins with a question like "Is it a plant, animal or mineral?"
The 20 questions elicit information about the object and help determine
what it is. When classifying DSS this approach can also be applied.
On March 05, 2004, Tommy Wiratama posted the following at
DSSResources.COM:
Dear Dr. Power,
I'm looking into existing revenue management technologies, especially
concentrating on IDeaS by IBM. According to your book DSS is divided
into five main categories. I'm struggling to determine into which
category or combination of categories this program would fall under.
Also I wanted to know what tools does such a program need in order to
operate. Thank you very much for your time.
Sincerely,
Tommy
My response to Tommy was "I'm not familiar with the IDeaS software.
Please describe it for us. Revenue management applications are generally
data-driven DSS ... but the application may include a model-driven,
budgeting DSS subsystem." I didn't hear back from Tommy and I got
curious so I used Google to gather more information on IDeaS and revenue
management systems (RMS). My knowledge is still limited (I want some
"test drives"), but I know much more now than I did on March 5, 2004
about RMS.
Well, Tommy, my current assessment is that some revenue management
applications are model-driven DSS and some are decision automation
systems and not DSS at all. IDeaS (Integrated Decisions & Systems, Inc.)
was founded in 1989 by Dr. Ravi Mehrotra and some colleagues. IDeaS is a
privately held venture financed company (cf., http://ideas.com). The
company initially developed revenue optimization and yield management
software for the Airline Industry and began marketing a solution for the
hospitality industry in 1996. The company claims it markets "automated
decision execution technology" and that "IDeaS technology is
fundamentally differentiated as true 'decision' technology, combining
analytics with scientific decision modeling." Those phrases indicate to
me IDeaS may not be a DSS at all. DSS keep a human decision maker in the
loop. If pricing is "automated" and the computer software makes the
decision rather than a pricer or a manager, then the software is better
classified as a decision automation system.
What is the claimed benefit of revenue and yield management in hotels?
According to Mehrotra (1999) "As a result of the yield management
system, it is anticipated that there will be a reduction in the number
of turn downs multi-night stays. And the proper overbooking of rooms
leads to a decrease in the amount of empty rooms on sold-out nights."
Yield management DSS have been important in the Airline Industry for 20
years.
In 1999, Joan Marsan had a review of Revenue Management Systems in
Hotels Magazine. Joan noted "In the earliest days of hotel revenue
management systems (RMSs), forecasting and optimization focused on
overall demand. If seasonal demand was predicted to be high, lower rate
categories were closed. If demand forecasts were grim, lower rate
categories opened. ... In the hotel market, advanced RMSs that handle
multiple properties with many room options can determine the cross-price
elasticity of demand when room options are opened and closed."
Technology advances have enabled software companies to develop products
to support and even make revenue management decisions. Joan notes "The
greatest enabler of RMS advancements has been the improvement of
interfaces between property management (PMS) and central reservation
systems (CRS)." RMS decision support subsystems or automated decision
systems can now use "live" data for forecasting and optimization
calculations.
What is revenue management? According to the optims.com website "Based
on real-time demand forecasting by market micro-segment and an
optimization model, Yield Management (also known as 'Revenue
Management' or 'Real-time pricing') is an economic technique to
calculate the best pricing policy for optimizing profits generated by
the sale of a product or service, based on real-time modeling and
forecasting of demand behavior per market micro-segment." All RMS are
not the same.
In addition to IDeaS, other RMS vendors include:
Manugistics Demand and Revenue Management (DRM) solutions,
http://www.manugistics.com
Optims S.A. http://optims.com
OPUS2 TopLine PROPHET yield management and forecasting solutions,
http://www.opus2.com
How does one know what type of DSS is being used in a specific
situation? Why is it important to be able to differentiate or
discriminate among types of DSS? Differentiating the type of DSS IS
IMPORTANT because it helps us communicate and understand! So what
questions can differentiate types of DSS? After you have gathered as
much information as possible on the vendor's product or the system that
is being used in a company that someone calls a DSS, then you can play
20 questions. The following list of questions is still under
construction. Your suggestions and comments are welcomed.
1. Is the computerized system intended to support decision making? If
YES, then possibly a DSS.
2. Does the computerized system have multiple identifiable subsystems?
If so, focus on only one subsystem at a time. Put a specific boundary
around a possible decision support subsystem.
3. Is the focal system a Decision Support System, a decision automation
system or a special decision support study? Check the 7 DSS criteria:
Facilitation, Interaction, Ancillary, Repeated Use, Task-oriented,
Identifiable, Decision Impact. For more information read Ask Dan! "What
are the characteristics of a Decision Support System?", March 30, 2003.
4. Does electronic communication provide the dominant decision support
functionality?
4.a. Does use of the DSS involve synchronous or asynchronous
communication and collaboration?
4.b. Are tools provided to facilitate communications about a specific
decision situation?
If all answers in Q4 group are YES, conclude --> Communications-driven
DSS.
5. Does the DSS include a large, structured store (database) of
historical data?
5.a. If so, can users query and interact with the data store?
5.b. Are real-time data updates an important component of the
application?
5.c. Are predefined screens (reports) available to users?
5.d. Is data displayed on a map or geographic representation?
5.e. Does the dominant functionality of the DSS come from rapid access
to and analysis of the data store?
If the answers to 5 and 5.e. are YES, and to some of 5.a. - 5.d.,
conclude --> Data-Driven DSS.
6. Does the DSS include a large database of unstructured documents?
6.a. If so, can users search, retrieve, summarize and sort documents for
decision support?
6.b. Are documents used in a work flow or decision process to present
information and record evaluations?
6.c. Do documents and document retrieval and analysis provide the
dominant functionality for the DSS?
If all answers in Q6 group are YES, conclude --> Document-Driven DSS.
7. Does the DSS store and codify knowledge or expertise?
7.a. Is human expertise stored using AI technologies?
7.b. Does the DSS provide recommendations or advice?
7.c. Does the provision of expert support provide the dominant
functionality for the DSS?
If all answers in Q7 group are YES, conclude --> Knowledge-Driven DSS.
8. Does the DSS include one or more quantitative models?
8.a. Can users manipulate the model and perform "What if?" and
sensitivity analysis?
8.b. Does the interactive model analysis provide the dominant
functionality for the DSS?
If YES, conclude --> Model-Driven DSS.
When in doubt collect more information and ask more questions.
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References
Marsan, Joan, "Smarter Revenue Management Systems," Hotels Magazine,
March 1999, http://www.hotelsmag.com/0399/0399tech.html
Mehrotra, R., "Yield Management System Measurement," IdeaS, Inc., June
1999, http://www.hotel-online.com/Trends/IDeaS/YieldMeasurement.html
Peregrine Systems, "Eye-on Yield [Revenue] Management: Revenue Revival,
Hospitality Technology, May/June 2000,
http://www.htmagazine.com/archive/MayJune2000/MayJune2000_8.shtml.
Power, D., "What are the characteristics of a Decision Support
System?" DSS News, Vol. 4, No. 7, March 30, 2003.
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DSS News - March 15 to March 26, 2004
Read them at DSSResources.COM and search the DSS News Archive
03/26/2004 Microsoft strengthens its presence in business intelligence
industry.
03/25/2004 IBM selects Corticon to provide a complete Business
Performance Management solution.
03/24/2004 COPLINK(R) launches interoperability certification program to
help law enforcement agencies leverage information technology
investments.
03/24/2004 Microsoft and Business Objects expand alliance.
03/24/2004 Oracle(R) provides business intelligence users powerful
metadata management through meta integration technology partnership.
03/24/2004 US Securities Industry's current high spending levels on
Business Continuity Planning (BCP) will plateau and begin decline by
2006.
03/23/2004 U.S. Navy selects Java(TM) System Application server standard
edition 7 for top command and control program.
03/22/2004 World’s largest casual dining company Darden Restaurants
expands deployment of MicroStrategy.
03/22/2004 The Council of the European Union chooses Intergraph
Solutions to support defence planning and operations.
03/22/2004 Intergraph continues interoperability advancement through
participation in Open GIS Consortium interoperability initiative.
03/22/2004 ADP expands its suite of risk management tools to include
intraday margin system.
03/22/2004 Microsoft releases MapPoint Location Server to mobilize
businesses with real-time location services.
03/18/2004 SAP unleashes business potential of real-time CRM Analytics
with intelligent software agents and high-speed search engine.
03/17/2004 Informatica partners with IBM to support new risk and
compliance offering.
03/16/2004 Cognos ReportNet scales to more than 190,000 named users in
real-world tests; offers proven performance in IBM environments.
03/16/2004 Cognos launches enterprise-proven Cognos ReportNet(TM) 1.1;
delivers industry's most comprehensive business intelligence.
03/16/2004 Cognos ReportNet(TM) 1.1 embraced by customers, partners
worldwide.
03/15/2004 GeoSpatial World 2004 exhibit hall offers attendees broad
spectrum of solutions and services.
03/15/2004 Meijer stores expands deployment with MicroStrategy report
services.
03/15/2004 Vitria to showcase vertical business process engineering
technologies at CeBIT 2004 in Hanover, Germany.
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DSS News is copyrighted (c) 2004 by D. J. Power. Please send your questions to
daniel.power@dssresources.com.
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