What companies have gained a competitive advantage by building a DSS?
The problem in answering this question is that firms want to maintain the advantage they gain and hence they are reluctant to release many details about strategic information systems. Also, DSS that provide an advantage at one point in time may seem dated or ordinary after only a few years has elapsed. The advantage can be fleeting and short-term (cf., Feeny and Ives, 1990).
Porter and Millar (1985) provided a major theoretical perspective on how information could provide competitive advantage. A number of other theories related to competitive advantage suggest that deployment of resources like innovative decision support systems can provide a sustainable business advantage.
DSS can be important and useful and necessary and yet not provide a competitive advantage. Many consulting firms and vendors focus on gaining competitive advantage from a data warehouse or a business intelligence system and that can happen. Many DSS projects don't however deliver such results and they probably weren't intended to create competitive advantage.
In a now classic study, Kettinger et al. (1994) identified a number of companies that had gained an advantage from Information Systems. Some of those systems were Decision Support Systems, but most were Transaction Processing Systems. The following DSS examples are from their article:
Air Products -- vehicle scheduling system
Cigna -- risk assessment system
DEC -- expert system for computer configuration
First National Bank -- asset management system
IBM -- marketing management system
McGraw Hill -- marketing system
Merrill Lynch -- cash management system
Owens-Corning -- materials selection system
Proctor & Gamble -- customer response system
Time and technology have had a negative impact on how some of the above systems are perceived. A major lesson learned is that a company needs to continually invest in a Strategic DSS to maintain any advantage.
INTERFACES Volume 13, No. 6, November-December 1983 had a number of DSS Case studies that have since then become classics. For example, Distribution of Industrial Gases at Air Products and Chemicals, the ASSESSOR Pre-Test Market Evaluation System, Southern Railway's Computer Aided Train Dispatching system.
Chapter 2 of my DSS Hyperbook further explores the question of gaining competitive advantage from DSS. In the chapter, my examples include decision support systems at Frito-Lay, L.L. Bean, Lockheed-Georgia, Wal-Mart and Mrs. Field's Cookies.
If a company is trying to develop a Decision Support System that provides a competitive advantage, managers and analysts should ask how the proposed DSS affects company costs, customer and supplier relations and managerial effectiveness. Managers should also attempt to assess how the proposed strategic system will impact the structure of the industry and the behavior of competitors.
References
Clemons, E.K. and Weber, B.W., "Strategic information technology investments: Guidelines for decision making," Journal of Management Information Systems, 1990, 7(2), 9-28.
Feeny, D.F. and Ives, B., "In search of sustainability: Reaping long-term advantage from investments in information technology," Journal of Management Information Systems, 1990, 7(1), 27-46.
Kettinger, W., Grover, V., Guha, S., and Segars, A., "Strategic Information Systems Revisited," MIS Quarterly, 1994, pp. 31-55.
Porter, M.E. and Millar, V.E., "How information gives you competitive advantage," Harvard Business Review, 1985, July-August.
The above response is from Power, D., What companies have gained a competitive advantage by building a DSS? DSS News, Vol. 2, No. 10,
Last update: 2005-08-06 21:34
Author: Daniel Power
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