The model management subsystem

Question

What are the the advantages and disadvantages of the model management subsystem?

Answer

The model management subsystem is particularly advantageous in the way that it supports user decision-making. It does this by automating the formulation of models which represent organisational activities – models which can then be analysed. Furthermore, predictive models can be generated, determining the likelihood of certain parameters occurring in the future. For example, an organisation’s cash flow expectations could be predicted using a simulation-based approach to modelling. The range of algorithms available is such that there are few organisational activities which cannot be modelled, with users able to apply, amongst others, statistical, heuristic, and linear models, as required (Janakiraman and Sarukesi, 2008). However, where the model management subsystem is extremely useful in representing relationships between variables, success is significantly influenced by user-decisions. As the process is interactive, the “experience and judgement” (Maloszewski et al., 2012) of users remains critical. Thus, while the model management subsystem is often associated with analysis, it is in truth more of an approach to evaluation. Thus, the approach is only useful in identifying acceptable, as opposed to optimal, solutions. Furthermore, semi- and unstructured problems are unsuited to modelling, limiting the system to decision-making on factors which are structured. While certain approaches can adapt well to semi- and unstructured problems, the less structured a problem, the more human intervention is required.