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Book Contents

Ch. 12
Evaluating Decision Support Systems Projects

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The World-Wide Web has created a major opportunity to deliver more quantitative and qualitative information to decision-makers. To exploit these opportunities and successfully implement innovative DSS managers need to redesign business processes, integrate the technologies and associated information into decision-making processes, evaluate costs and benefits, and manage new types of business relationships. DSS projects must be evaluated in this broad context of corporate "readiness".

Learning enough to understand and evaluate an innovative DSS project is expensive. Managers and IS/IT staff need to do more than read a book. IS/IT staff should actually work with development tools prior to beginning a development project. The MIS unit may want to hire a consultant; staff should attend seminars and talk to vendors. The process of learning about innovative DSS opportunities will be time consuming and costly. Companies may need to spend a few hundred thousand dollars on a prototype or a departmental data mart and that is a significant investment. In firms with multi-million dollar IS/IT budgets, DSS prototype and data mart projects are needed and they should be viewed as "a learning experience". General managers need to spend enough money on DSS projects so that IS/IT managers and business managers can learn about the different types of DSS and can evaluate the costs and benefits.

In general, a detailed qualitative analysis of a proposed DSS at its initiation stage is the most that managers can reasonably expect. Although in some situations, financial analysis tools can be useful, in evaluating a major DSS project their use provides only the appearance of accuracy and precision. When making a DSS project decision, managers should generally ask, "What are the expected results and benefits?" rather than "What is the anticipated Return on Investment (ROI)?" Managers should examine the Return on Investment from a DSS project and they should examine the possible results from the project.

Justifying DSS projects with ROI and NPV is possible, but such an analysis does not accurately reflect the value of most Decision Support Systems. Costs and benefits of DSS ripple to other parts of the organization. In many ways the real benefits are created by changes in the organization, more than by the Decision Support System itself. Managers should not demand a positive ROI from Decision Support System projects, but they must demand positive results. Today, investigating innovative Decision Support System projects is a business necessity. Building DSS is an investment in improving the performance of a company and such projects are excellent employee and corporate development experiences.

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