Today I will talk about the benefits of using a DSS for banks and marketers. A DSS is a decision support system that is used to assist people in making better and calculated decisions through computer based software for various businesses and organizations. [1] Some general features of DSS software include the presentation of inventories of information assets, comparative sales figures, and projected revenue figures. [1]
It is obvious that DSS will be extremely beneficial in analyzing large quantities of qualitative and quantitative data. Ofcourse, this is great for the field of marketing where you need to analyze a plethora of different customer behaviors and patterns varying from different regions and demographics. "Due to the proliferation of information systems and technology, businesses increasingly have the capability to accumulate huge amounts of customer data in large databases. However, much of the useful marketing insights into customer characteristics and their purchase patterns are largely hidden and untapped. Current emphasis on customer relationship management makes the marketing function an ideal application area to greatly benefit from the use of data mining tools for decision support. A systematic methodology that uses data mining and knowledge management techniques is proposed to manage the marketing knowledge and support marketing decisions. This methodology can be the basis for enhancing customer relationship management." [2] DSS come especially in handy when used for data mining tasks. Data mining is a relatively young field of computer science which includes the process of extracting patterns from large data sets by combining methods from statistics and artificial intelligence with database management. [3] There are many ways in which data mining is useful to marketers. It gives them the ability to identify patterns in all sorts of customers such as market basket analysis for use in retail sales. "If a clothing store records the purchases of customers, a data mining system could identify those customers who favor silk shirts over cotton ones." [3] Another example of this could be finding out the zip codes of each customer and then analyzing which zip code the majority of their shoppers come from to target that location with ads in the mail etc. This type of data mining can also come to use in identifying "Alpha Consumers". Alpha consumers or early adopters are the consumers that are often known to first adopt a new product or service. It is important for marketers to find out who these Alpha Consumers are so that they can specifically target them when releasing a new product. They are usually found through analyzing population components and finding which locations contain those people that make use of a large portion of their disposable income to purchase goods and services. Alpha consumers tend to be interested in a high range of products from luxury items, trendy clothing, fashionable restaurants, and the latest technologies; therefore they are very important for companies to identify. [4]
DSS are also very efficiently utilized by banks. These DSS are often used in trading and investment which embeds different models to make trading and investment decisions. [5] Many large banks make the use certain DSS to aid in making decisions to do automatic trading and finding market opportunities. [5] "In summary, DSS are used in different levels by banks to achieve certain purpose. For trading and investment, the purpose is to make fast, real time decision to get maximum benefits; in retail banks the purpose is used in the operational and managerial level to improve customer satisfaction and also to reduce the operation costs for banks. [5].
It is clear that the use of DSS are crucial in the business environment as the world we live in today needs results immediately. The DSS give these businesses the ability to automate certain functions and make extremely fast decisions. A DSS has the ability to ultimately analyze and predict the amount of risk a business will be taking. Not only does it just help the businesses internally but it also functions to better serve the customer and give them what they want (customer service).
1. http://en.wikipedia.org/wiki/Decision_support_system
2. http://www.sciencedirect.com/science/article/pii/S0167923600001238
3. http://en.wikipedia.org/wiki/Data_mining
4. http://www.wisegeek.com/what-are-alpha-consumers.htm
5. http://www.scribd.com/doc/36262377/53/Risk-management-and-DSS
No comments:
Post a Comment