In businesses, managers see information as power in their hands. With the advent of computer based management information systems (MIS), managers have been better able to take correct decisions based upon integrated information. ERP and DSS are two of the commonly implemented information systems that have many similarities and have nearly same objectives too. However there are differences that will be highlighted in this article for the benefit of managers.
It is obvious that managers can take better decisions at the right time when armed with complete information that when they have inaccurate or incomplete information about the organization. In any big company, a huge amount of data is generated with sales, inventories and number of clients going up with passage of time. All this information needs to be categorized systematically so as to be useful for decision makers. The use of computers helps greatly in this endeavor as it breaks down data and compiles summarized information on the basis of which it is easy for managers to take real time decisions.
ERP stands for Enterprise Resource Planning. It is software that tries to integrate all external as well as internal information about different departments in an organization with the aim to allow free flow of information between accounting, finance, marketing, manufacturing etc while at the same time managing information about customer profile and preferences also. While in the earlier period, ERP focused on the back office functions and data pertaining to customers was left for customer relationship management to manage. However, in its later models such as ERP II, all functions were integrated and ERP emerged as a successful means to tackle the problem of integration of information in an organization. An effective ERP system, if installed properly can help in enhanced tracking and forecasting. It can lead to improved efficiency, performance and productivity levels. ERP also helps in better customer service and satisfaction.
DSS is called a decision support system that relies on computer generated information with the intention of helping in decision making process. Its main role is at the level of planning and operations where decisions keep changing all the time and it is not easy to anticipate in advance. Some instances where DSS proves helpful are in medical diagnosis, examining loan applications, bidding process of an engineering firm and so on. DSS is made heavy use of in many industries and has proved to be very successful for management in taking appropriate decisions. DSS can be model driven, communications driven, data driven, document driven, or knowledge driven. DSS are used to collect data, shape and analyze it, and to make sound decisions or construct strategies from this analysis. Though computers and AI is at help, it is ultimately that formulates the data into a usable strategy.
In large enterprises, it is a common practice to have an MIS that makes use of both ERP and DSS by integrating them to obtain the best possible results.