Introduction

Information systems researchers and technologist have built and investigated decision
support systems for almost 40 years, meaning that the concept of an interactive computer
based system that helps companies make better business decisions has been around since
computers came into widespread use.
Decision support systems are created to help people make decisions by providing
access to information and analysis tools; its a way to model data and make uality
decisions based upon it. !hile many people think of decision support as a speciali"ed
part of a business, most companies have actually integrated this system into their day to
day operating activities. #any companies constantly download and analy"e sales data,
budget sheets and forecasts and they update their strategy once they analy"e and evaluate
the current results.
$ cooperative decision support system is when data is collected, analy"ed and
then is provided to a human component which can help the system revise or refine it. It
means that both a human component and computer component work together to come up
with the best solution. %eographic Information &ystems '%I&(, )nterprise Information
&ystems ')I&(, )*pert &ystems ')&(, +n,-ine $nalytical .rocessing '+-$.(, software
agents, knowledge discovery systems and group D&& can all be lumped into the category
of systems we call as D&&.
Definition of Decision Support Systems
In general, a decision support system 'D&&( is a computer,based information system that
supports business or organi"ational decision,making activities. D&&s serve the
management, operations, and planning levels of an organi"ation and help to make
decisions, which may be rapidly changing and not easily specified in advance.
!hile academics have perceived D&& as a tool to support decision making
process, D&& users see D&& as a tool to facilitate organi"ational processes. &ome authors
have e*tended the definition of D&& to include any system that might support decision
making. &prague '/010( defines D&& by its characteristics2
/. D&& tends to be aimed at the less well structured, underspecified problem that
upper level managers typically face;
3. D&& attempts to combine the use of models or analytic techniues with traditional
data access and retrieval functions;
4. D&& specifically focuses on features which make them easy to use by non,
computer people in an interactive mode; and
4. D&& emphasi"es fle*ibility and adaptability to accommodate changes in the
environment and the decision making approach of the user.
D&&s include knowledge,based systems. $ properly designed D&& is an interactive
software,based system intended to help decision makers compile useful information from
a combination of raw data, documents, personal knowledge, or business models to
identify and solve problems and make decisions.
5ypical information that a decision support application might gather and present
are2
Inventories of information assets 'including legacy and relational data sources,
cubes, data warehouses, and data marts(,
6omparative sales figures between one period and the ne*t,
.ro7ected revenue figures based on product sales assumptions.
5a*onomy for D&& has been created by Daniel .ower. 8sing the mode of assistance as
the criterion, .ower differentiates communication,driven D&&, data,driven D&&,
document,driven D&&, knowledge,driven D&&, and model,driven D&&.
$ communication,driven D&& supports more than one person working on a
shared task. 5his system also accommodates the support of some decision making
in a variety of tasks. )*amples include integrated tools like %oogle Docs or
%roove
$ data,driven D&& or data,oriented D&& emphasi"es access to and manipulation
of a time series of internal company data and, sometimes, e*ternal data.
$ document,driven D&& manages, retrieves, and manipulates unstructured
information in a variety of electronic formats.
$ knowledge,driven D&& provides speciali"ed problem,solving e*pertise stored
as facts, rules, procedures, or in similar structures.
$ model,driven D&& emphasi"es access to and manipulation of a statistical,
financial, optimi"ation, or simulation model. #odel,driven D&& use data and
parameters provided by users to assist decision makers in analy"ing a situation;
they are not necessarily data,intensive. Dicodess is an e*ample of an open source
model,driven D&& generator.
8sing scope as the criterion, .ower differentiates enterprise,wide D&& and desktop D&&.
$n enterprise,wide D&& is linked to large data warehouses and serves many managers in
the company. $ desktop, single,user D&& is a small system that runs on an individual
manager9s .6.
5hree fundamental components of D&& architecture are2
the database 'or knowledge base(, #anagement data collection is reuired either
from a database that contains internal data and e*ternal database that contains
data. 5hus, the function of components of the data as a provider of data reuired
by the D&& system. Data #anagement usually utili"e Data :ase #anagement
&ystem 'D:#&( on the market such as +racle or &;- &erver.
the model 'i.e., the decision conte*t and user criteria(, another e*ample is
#icrosoft )*cel with macros , iDecide , or program that is made to reali"e a
model . and
the user interface is used to interface between users and the D&& , balk to enter
information into the system and displays information to the user.
5he users themselves are also important components of the architecture.
Background of the company (Wal-Mart)
5he creator of !al,#art is &am !alton. <e got the idea from 7ust creating his own
variety store. <e reali"ed, after the booming success it brought, that he wanted to become
bigger. <e then created his very first !al,#art in /0=3. !al,#art grew to be the world9s
biggest variety store. 5hey have over /00,000 million products in their stores. $s a
worldwide store, they continue to grow every day. 5hey plan to go to bigger and better
things. &am possibly thought that the store wouldn9t grow as fast and as largely as it has.
5he growth of !al,#art increases rapidly every day.
It has been !al,#arts low,cost focus that has created a virtuous cycle whereby its
growing success among customers has allowed it greater economies of scale which in
turn have allowed it to provide even lower prices and greater savings for customers. 5he
companys e*treme growth did not occur without controversy. !al,#art has been
critici"ed for contributing to urban sprawl by forcing out of business local merchandisers,
many of whom were unable to compete with the companys economy of scale. 5he
company has /0,>>4 stores worldwide with 4,00? stores in the 8.&., =30 &am9s 6lub
stores and =,/41 !al,#art International stores. !al,#art Discount &tores average
/0>,000 suare feet, employ an average of 33? associates and offer /30,000 items. 5he
company said there are usually /?,000,?0,000 7ob openings available in the 8.&. at any
time. 5he company says more than 40,000 assistant managers earn an average of more
than @40,000 a year. #ore than 4,000 store managers earn an average of @/>0,000 a year.
>?A of store managers started out as hourly associates. In the 8.&., the average, full,time
hourly wage is @/3.14.
The kind of decision support system used by Wal-Mart
5he leading innovative progression of technology through !al,#art has been a key issue
to its success. 5he technology aspect of the retail giant has kept !al,#arts prices lower
than its competition. !al,#arts networks are cutting edge, communicating to every
employee in the company from the cashier to the 6I+.
B &trategic outsourcing
&trategically outsourcing their technical communication has allowed !al,#art to focus
on the business itself with efficient mobility and low prices. 5he biggest move !al,#art
has made to improve their system intelligence is outsourcing their databases to C6D
6orporation bringing their total disk storage to over >.? terabyte make it the largest
commercial database system in the world. 5he Ceo Eista 6ompany, providing !al,#art
with software which was tailored to match the reuirements of the database environment
makes a great collaboration with their C6D databases. 5he software provided by Ceo
Eista, )D. has helped management effectively communicate with other departments such
has accounting and human resources which is called Data,#ining. Data mining enables
any employee in !al,#art to access key information about any particular item sold in
real time.
B 6ommunication, driven D&&
5o help the communication, !al,#art has pioneered satellite system linking stores and
headuarters, but has switched to the frame relay method of transmitting data over
shared, publicly owned phone lines which is used on its D&4 network that runs at 44.>4=
#bps which virtual circuits connects multiple offices. $lthough from the :log one can
see how a Data,!are house is the foundation of Data,#ining, the incredible idea of
reaching the information from any location has been so innovative that it had brought
&upply 6hain #anagement a basis for any retailer.
B 5ype of interface !al,#art uses
5here are two types of network interfaces that can be used for both personal and
commercial computer. !al,#art use the commercial computers, they use an )thernet
card the most common type of network interface card. 5he )thernet card runs to a hub or
switch allow you to use cables with different wiring. ),<ealth article for the health
interface using Dossia software.
B Data !arehouse
+nline $nalytical .rocessing, the manipulation of information to support decision
making is currently being used by !al,#art. $ data warehouse is a logical collection of
information gathered from different operational databases and used to create business
intelligence that supports decision making tasks and business analysis activities. !al,
#art is known for having the biggest data warehouse used, which is larger than 4
.etabytes. !al,#art turned its data warehouse into an operational system for managing
daily store operations by refreshing the information its data warehouse holds every hour.
5he massive data warehouse is not 7ust a customer of 6D# systems but it also serves as
the base for !al,#arts Detail-ink support system. 5eradata is !al,#arts data
warehouse vendor.
B Data,#ining
Data,#ining tools are the software tools you use to uery information in a data ware,
house. 5hese data, mining tools support the concept of +-$.F the manipulation of
information to support decision, making. +-$. is an online application processing
uery. !al,#art uses a global leader in business intelligence software, <yperion. 5hey
use <yperion )ssbase +-$. technology to build an advanced merchandise planning and
reporting system. <yperion9s )ssbase technology will help !al,#art create a scalable
system that will deliver budgeting, forecasting and planning tools to international
operations. $nalysts at !al,#art look for increasing sales in some region.
What is the competitie edge for using decision support system!
!e are believed !al,#art has good competitive edge for using decision support system
in their business. 5hese activities implement the basic strategy of !al,#art always fit
with the strategy and are also mutually supportive.
/. Distribution capabilities
!al,#art distribution system is already in place 'see in $ppendi* /(. It is massive and
very difficult to replicate by competitors in particular when consider the electronic
linkage of sales and inventory information all around the country especially in 8.&.
Distribution capabilities following !al,#art9s uick response to supplying its stores is
the best. 5echnology and logistics are the foundations of !al,#art9s success. Deducing
inventory costs and keeping shelves stocked, with too good to be true bargains, is the
ultimate driver of high volume sales at !al,#art. GIn stockH means big business for the
world9s largest retailer and being out of stock is tantamount to being out of business. 5he
rallying cry at !al,#art for their store and distribution center operations is e*ecution,
!al,#art, and its manufacturers and suppliers, are renowned for their focus on
Goperational e*cellenceH, Ge*ceeding customer9s e*pectationsH and always striving to
continuously improving operations. )fficient distribution for e*ample, crosses docking,
predominance of !al,#arts own distribution centers and inside out location strategy.
)conomies of scale match volume base on strategy. 6ost saving from low inventory
levels and can translate into lower price and more customers satisfaction. )*pense,
reuired partnership relationship with supplier, reuired sophisticated I5 as competitive
edges of !al,#art for using decision support system.
"ppendi# $
Distribution system of !al,#art
3. .artnership relationship with suppliers
5he supplier partnership also constitutes a sustainable advantage edge for using decision
support system. 5his relationship is something that evolves over time and more time that
passes, the higher the level integration. !al,#art has already demonstrated its
commitment and seriousness in their operations so the relationship should prosper even
more over time. In addition, !al,#art beats the other discount retailers on compensation
paid to suppliers because its reaps cost savings in the operations area. !al,#art
integrated supplier Eia I5 and treats them well in term of pricing. 5hey are more partners
than value takers. Improves supply chain and lower distribution cost. $dditional cost
saving from elimination of manufacturer reps. !al,#art bases its relationships with their
suppliers on lawful, efficient and fair business practices. !al,#art selection of suppliers
made on the basis of ob7ective criteria, including uality, price, delivery, adherence to
schedules, product suitability, maintenance of adeuate sources of supply and !al,#arts
purchasing practices and procedures. !al,#art treats their suppliers with respect, fairness
and honesty and not takes undue advantage of a supplier by using !al,#arts business
influence. &o, it is part of competitive edge for using decision support system with
suppliers to make a good decision.
4. &trategies in the Iield of Information 5echnology 'I5(
, $dvanced data,mining and Barriers to Entry Strategy
!al,#art I5 systems are very advanced and even though their competitors will continue
to copy them.!al,#art is always one step behind. 5he company has developed e*pertise
in this issue, so it is able to constantly upgrade their decision support system. $ctive
collection and usage of customer purchase behavior info. 8seful data for suppliers,
improves customer satisfaction through more accurate forecasting of demand. -ower cost
through reduced inventory and shrinkage, improved matching of supply and demand
creates superior sales.
!al,#art has invested uite a lot in his I5 field. :ecause this is much help I5 managers
!al,#art in doing his 7ob, and it is the primary barrier for competitors who want to get
into this industry, because they have to compete with !al,#art
, &trategy Innovation and &aturation
!al,#art has a distribution center and a distance of about one day trip 'most distant(
from the stores they serve, and !al,#art will oversee any goods shipped from the
warehouse.
!al,#art store more than 10,000 items in stores and warehouses directly complete with
1? A of the inventory, as compared to their competitors that only ?0 A ,=? A. $s a
result, !al,#art only takes two days from the time of booking by computer into the
hands of the manager of the store compared to its competitors which takes ?,= days. 5his
will save time and fle*ibility of the system thus saving the cost of which is a separate
investment for !al,#art.
!al,#art9s I5 systems are also useful to transform raw data into useful data. !al,#art to
consolidate the details of 4,>00 store sales and forecast sales for each product in each
store with high accuracy. 5his will result in savings in persediaaan. !al,#art also
developed a system of DIID 'Dadio Ireuency Identify( in 300? to provide information
to retailers and suppliers.
4. !orkforce cultures
5he competitive edge of having motivated and proactive employees to create a culture is
an everyday effort on the part of management and it involved careful focus on the
interactions that occur in the company for using decision support system. It was a hard,
wired cultural belief shared by company leaders. &am !alton believed if we take care of
about employees, employees will take care of the customer and the business will take
care of itself because employee attitudes affect customer9s attitudes which impact
business performance. 6ustomer,oriented workforce motivated through generous
monetary participation and belief in !al,#art cultures. %ood customer service is not
compromised by self, service and low cost structure thereby improving customer loyalty.
&tores can respond more uickly fle*ibly to changing demand by workforce cultures.
6ontinuous improvement mindset. )*penses in term of benefits, reuires strong corporate
culture and employee enablement from sophisticated I5 to make decision.
?. )very day low price ')D-.(
#aintenance of G)very day low priceH is sustainable competitive edge with using
decision support system into the marketplace. 5he !al,#art approach, )D-. pricing
model seems to be common outcome many retailers rebranding efforts today. !al,#art is
the largest )D-. retailer in the world has announced today that is committing to lowering
its grocery prices by an additional @ / billion according to Duncan #ac Caughton at the
6I:6 retail conference. $pproach )D-. for using decision support system is scope
improves customer satisfaction through low price, it also matching volume driven
strategy, drives down cost through less advertising and steady price improve stability of
supply chain. 5he benefits competitive edge everyday low price is advertising cost are
not as high, inventory management is improved and stock outs are reduced, price wars
are less freuent and profit margin !al,#art is greater. !al,#art also e*cels in
cooperation with other companies. -ike the collaboration with . J % in terms of DIID.
#cDonalds, #ary Kate and $shley +lsen are selling clothes with their brand, 6on $gra
which makes products for !al,#art and it can cut operating costs of !al,#art.
!ith a computeri"ed system via satellite, !al,#art can control their warehousing
and inventory. &o that !al,#art will uickly respond to order supplies via the internet to
the supplier. 5herefore, !al,#art will never run out of stock, but also no stock piling.
5his is an advantage for !al,#art compared to its competitors.
$ccording to the data base of the 8.&. %lobal Iortune '6handran, 30042/(, !al,
#art is ranked first in financial income in 300?, 300> and 3001 'see $ppendi* 3(. !al,
#art is the largest retailer in the world who has an income of @ 3/0.0/0.000.000 'see
$ppendi* 4( .)ven !al,#art larger than its competitors in the 8.&., namely &ears
Doebuck, K , #art, L6 .enney and Cordstrom. !al,#art operates 4.?00 discount stores.
"ppendi# %
Wal-Mart&s reenue for %''(-%'')
Mear Devenue '@
milions(
.rofit
'@ milions(
Dating Description Iortune
?00 ' in terms of revenue(
300? 311./10,00 /0.3=>,00 /
300= 4/?.=?4,00 //.34/,00 3
300> 4?/./40,00 //.314,00 /
3001 4>1.>00,00 /3.>4/,00 /
3000 40?.=0>,00 /4.400,00 3

"ppendi# *
Devenue per year in the 8.&. according to company %lobal Iortune
Dank 6ompany Devenue '@ million (
+ank ,ompany +eenue (- million)
/ !al,#art stores 3/0.1/3
3 )**on #obil /0/.?1/
4 %eneral #otors />>.3=0
4 Iord #otor /=3.4/3
? )nron /41.>/1
,onclusion
D&& practice, research and technology continue to evolve. 5rends suggest that data,
driven D&& will use faster, real time access to larger, better integrated databases. #odel,
driven D&& will be more comple* and system built using simulations and their
accompanying visual displays will be increasingly realistic. 6ommunications,driven D&&
will provide more real,time video communications support. Document,driven D&& will
access larger repositories of unstructured data and the systems will present appropriate
documents in more useable formats. Knowledge,driven D&& will likely be more
sophisticated and more comprehensive.
6ompanies must continuously improve their information technology to gain and maintain
competitive advantage. 6ompanies that invest significant time and money to achieve an
advantage want a system that has sustainability. !hen competitors can uickly respond
with similar or better systems the result is a higher cost of doing business for everyone
involved. 5o create sustainability, an organi"ation can preempt its competitors by being
first to market. 5his creates surprise, respect, and time advantages. $lternatively,
sustainability may be achieved through intimidation. 6reating a system that is large,
comple*, or risky can ward off duplicators. 5rue sustainability can only be achieved
through continual development and enhancement of a strategic system. Detail -ink which
implement by !al,#art is less inventory in stores, more inventory of the right products at
the right time and place, improved revenues for both supplier and retailer, and better
partner relationships with suppliers.
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