Decision Support System

Benefits of DSS
Decision Support System
Executive involvement in development of DSS
Translating DSS into work is a challenge
May fail if do not meet individual need of executive
Managers are still forced to conform to technology capability
rather than being able to tailor it to their own need (Mintzberg)
To many IS has been developed except for executives
EISs are designed to meet the executive needs
Some EIS have worked well
Issues about DSS
Decision Support System
Why a company should switch to ISS if traditional
system have worked for years ?
ESS gives immediate access to needed information
Rosabeth Moss Kanter:
Information quality requires focusing on whats
important, not whats available
Stored information represent potential, but is useless
Unless it can be actively communicated to those
who need it
Why of DSS
Decision Support System
Begin 1983, sponsored by corp. chief of staff Paul Allaire
Kenneth Soha: director of IS group
David T. Kearns (Xerox CEO)
IT has major role in reducing cost of staff at HQ
and increase effectiveness
Become the executive sponsor of ESS
Hired a consultant, Jim Carlisle, to build their
own system
ESS built in 1983, serve 400 people in corporate HQ
Xerox: Started at the Top
Decision Support System
Links strategic planning with e-mail
Changing the way in communication
By 1988, annual budged for ESS operation
$1 million
Evolutionary development
Start at the top, to prove how it can help executive
to do their job
Technology is cheap than people
Xerox: Started at the Top
Decision Support System
Estimation: reduce 5 % of HQ staff in three years
Key of Success
ESS improve communication and planning process
Extended management meeting monthly:
Material is prepared and can be analyzed earlier
Management data book:
Information about sales,,personnel, finance,etc.
ESS support the executive to perform better task
Improve planning process and reduce time
Contain new resource management statement a
summary of each business units plan
Benefits of ESS at Xerox
Decision Support System
Develop the business priority list
Not fewer meetings, but more productive
Information become available before the meeting
Benefit for executive that must travel:
access and communicate
Flow of information between people in
the company
Benefits of ESS at Xerox
Decision Support System
William Smithburg, CEO Quaker Oats:
Enhance information flow to enhance decision making
All business live and die with information
Begin in 1982 : Dow Jones service and The Source
To pick up all needed information
The problem : executive wants to describe the end result
Involvement of executive in the design and determine
the kinds of information
Vision and Knowledge at Quaker
Decision Support System

Use ESS more for environmental scanning than for
Management and control
Features of ESS:
Compression of information : to focus on the broad
issues
Freshness of information: financial data
Benefits
Increase productivity
Reduce time to get needed information
Improve working relationship between operating units
Make the data talk : through presentation, super chart
Vision and Knowledge at Quaker
Decision Support System
Better information = competitive asset, become part
of the company culture
The better executives understand the system and
the better IS understand the executives,
the better they can work together
Investment on decision:
To get what useful and necessary
Dont need a Roll Royce to go to the grocery store
Benefits of ESS at Quaker
Decision Support System
Finn Carpersen, CEO at Beneficial
Send back a hard copy memo
Trickledown and trickleup ESS implementation
was unacceptable
Personal used of ESS by all companys executives
is key for functioning ESS
Speed up of communication
CEO jobs:
Maintain communication with individual in the company
Move decision through committees, meeting
Implement decision
A Million Dollar Saving at Beneficial
Decision Support System
Increase reliability and accuracy of information
SM for senior management
Rare used outside the office due connection problem
Useful in unanticipated way
Information from a broker: multiple people can be reached
Instant response
How It works ?
Make a better decision using Lexis and Nexis on-line
Eliminate the wasting time, unproductive meeting
Meeting become more effective due to ESS
A Million Dollar Saving at Beneficial
Decision Support System
Soft dollar benefits: increase effectiveness and
professionalism
Change the way of company operate, organize or
structure their important function
In many instances only automated activities others
fundamentally
Increase executives productivity tremendously
Some executives have the system at home
Improve access of information and communication
between executives
ESS at Beneficial: How It Works ?
Decision Support System
Real saving
Decrease the number of secretaries
Deloitte Haskin & Sell:
1 Million Dollar saving in the 1st year
A nine-month pay back for ESS investment

Expand the system: Bencom III
Will change the way to do business in the company
Old fashion persuasion is still necessary
To push manager to adopt the system even faster
Opponent learned to use it effectively
ESS at Beneficial: How It Works ?
Decision Support System
ASSESSING EIS
BENEFITS
Decision Support System
Industry
Finance, insurance and real estate
Manufacturing
Government agencies
Transportation, communication, utilities
Services (hotel, personal, utilities)
Mining
Agriculture, forestry, fishing
Other
Total
Percent
28.8
25.8
13.7
12.1
4.6
1.6
1.6
12.1
100.0
Responding Company by Industry
72 companies
Decision Support System
Expected
Benefits
Realized
Benefits
More timely information
Faster access to information
More accurate information
More relevant information
More concise information
Better access to soft information
Improved communication
Improved access to external data
Better environmental scanning
More competitive information
Improved executive performance
Save executive time
4.58
4.79
3.81
3.85
3.94
2.48
3.67
2.42
1.83
2.27
3.31
3.74
3.98
4.29
3.53
3.40
3.67
2.36
3.10
2.34
1.56
2.03
2.61
2.98
Expected and Realized Benefits of EIS
Scale 1 to 5
Benefit
Decision Support System
Expected
Benefits
Realized
Benefits
Increase span of control
Improved planning
Improved decision making
Better problem understanding
Better development of alternatives
Improved presentation of data
Cost saving
Less paper
Support TQM program
More responsive to changing customer needs
Support downsizing of organization
2.56
3.39
3.97
3.75
2.89
4.22
2.44
3.42
2.23
2.55
1.95
2.19
2.60
3.03
2.92
2.41
4.05
2.60
3.17
1.98
2.11
1.79
Expected and Realized Benefits of EIS
Scale 1 to 5
Benefit
Decision Support System
Prior
implementation
After
Implementation
Costs and hard benefits were determined
Cost and intuitive feeling for the benefits
were determined
Costs only were determined
Benefits only were determined
Neither costs nor benefits were determined
Benefits/ Costs total

13.8

58.5
3.4
5.2
19.0
100.0

7.4

40.7
5.6
5.6
40.7
100.00
Benefit/ Cost Analysis
Percent
Analysis method
Decision Support System
A comprehensive evaluation can renew interest
and support for IES
A comprehensive evaluation can identify which
application deliver value and where enhancement
or new application are needed
Both usage statistics and user interviews are needed
Focus attention on mission-critical applications
EIS benefit should be assessed at the level at which
they occur
Quantity benefits as much as possible and record
intangible benefits

Conocos : Lesson Learned
Decision Support System
Discount benefits by an amount commensurate to
their degree of uncertainty
Do not confuse the size or complexity of an
application with its significance
The assessment should be as open and objective
as possible
Keep the interview structure relatively open
The interview should be conducted by people who
Understand the business
A comprehensive assessment requires considerable
time and effort
The assessment should be on-going process
There is no single way to evaluate an EIS

Conocos : Lesson Learned
Decision Support System
A committed senior executive sponsor
Involvement of management in the creation
Provide encouragement for the development
Carefully defined system requirements
Tailored to meet information needs of user
Ease to use, Fast response time
Updating: easy and quick
Carefully defined information requirements
Relevant information
Adding, modifying, deleting displays as needed
KEYS TO THE SUCCESS
MIDS
Decision Support System
A team approach to system development
Combination of staff background,
Complementary, synergy
An evolutionary development approach
Expanded and evolved according to the
information needs
Careful computer hardware and software selection
Early stage: develop software in-house
Later stage: use commercial software
KEYS TO THE SUCCESS
MIDS
24


Augment decision makers knowledge management
abilities
Allow decision maker to solve larger and more
complex problems
Make decision making faster and more reliable
Stimulate decision makers thoughts about a problem
& reveal new ways of thinking
Support decision makers decision/position with
computational evidence
Organizational competitive advantage
DSS Benefits
25


DSS do not replace human creativity and experience
DSS is constrained by the knowledge in its databases
DSS is constrained by the models and processes in its
model base and programming
DSS is limited by its computer platform
Decision makers are required to communicate with
the DSS in its language or interface mode
DSS are often narrow in their area of application

DSS Limitations
Decision Support System
END