Daniel J.

Power

CONCEPTS
and
RESOURCES
for
MANAGERS
Decision
Support Systems
Concepts and Resources
for Managers

Daniel J. Power

Copyright © 2002 by Daniel J. Power

All rights reserved. No portion of this book may be

reproduced, by any process or technique, without the
express written consent of the author.
Decision
Support Systems
Concepts and Resources
for Managers

Daniel J. Power

Q
QUORUM BOOKS
Westport, Connecticut • London
 In order to keep this title in print and available to the academic community, this edition
was produced using digital reprint technology in a relatively short print run. This would
not have been attainable using traditional methods. Although the cover has been changed
from its original appearance, the text remains the same and all materials and methods
used still conform to the highest book-making standards.

Library of Congress Cataloging-in-Publication Data

Power, Daniel J.
Decision support systems : concepts and resources for managers / Daniel J. Power.
p. cm.
Includes bibliographical references and index.
ISBN 1-56720-497-X (alk. paper)
I. Decision support systems. 2. Decision making. I. Title.
HD30.2l3.P69 2002
658.4'03-dc2I 2001048807
British Library Cataloguing in Publication Data is available.
Copyright © 2002 by Daniel J. Power
All rights reserved. No portion of this book may be
reproduced, by any process or technique, without the
express written consent of the publisher.
Library of Congress Catalog Card Number: 200 I 048807
ISBN: 1-56720-497-X
First published in 2002
Quorum Books, 88 Post Road West, Westport, CT 06881
An imprint of Greenwood Publishing Group, Inc.
www.quorumbooks.com
Printed in the United States of America

s·
The paper used in this book complies with the
Permanent Paper Standard issued by the National
Information Standards Organization (239.48-1984).
p
Copyright Acknowledgments

The author and publisher gratefully acknowledge permission for use of the following material:
Material from DSSResources.COM used by permission of D. J. Power and C. E. Power.
Microsoft screen shots reprinted by permission from Microsoft Corporation.

.
Contents

TABLES AND FIGURES ix

PREFACE xi

ACKNOWLEDGMENTS xv

1 SUPPORTING BUSINESS DECISION MAKING 1

Introduction 1
A Brief History of Decision Support Systems 2
A Conceptual Perspective 5
Decision Support vs. Transaction Processing Systems 8
Categorizing DSS Applications and Products 9
An Expanded Decision Support System Framework 12
Building Decision Support Systems 16
Conclusions and Commentary 19

2 GAINING COMPETITIVE ADVANTAGE WITH DECISION

SUPPORT SYSTEMS 21
Introduction 21
Technology Trends 22
Gaining Competitive Advantage 23
How Can DSS Provide a Competitive Advantage? 26
What Companies Have Gained an Advantage with DSS? 27
Some Examples of Strategic DSS 27
vi Contents

Identifying Opportunities and Information Systems Planning 30

DSS Benefits, Limitations, and Risks 32
Resistance to Using Decision Support Systems 34
Conclusions and Commentary 35

3 ANALYZING BUSINESS DECISION PROCESSES 37

Introduction 37
Managerial Decisions 37
Decision-Making Context 41
Decision-Making Processes 43
“Good” Decision Making 48
Redesigning Decision Processes 50
Conclusions and Commentary 52

4 DESIGNING AND DEVELOPING DECISION SUPPORT

SYSTEMS 55
Introduction 55
Overview of Design and Development Issues 55
Decision-Oriented Diagnosis 57
Prepare a Feasibility Study 59
Choose a Development Approach 61
DSS Project Management 65
DSS Project Participants 67
Conclusions and Commentary 69

5 DESIGNING AND EVALUATING DSS USER INTERFACES 71

Introduction 71
User Interfaces: An Overview 72
User Interface Styles 73
ROMC Design Approach 75
Building the DSS User Interface 77
Comments on Design Elements 79
Guidelines for Dialog and User Interface Design 81
Factors Influencing User Interface Design Success 82
Conclusions and Commentary 84

6 UNDERSTANDING DSS ARCHITECTURE, NETWORKING, AND

SECURITY ISSUES 87
Introduction 87
DSS Architecture and IS/IT Infrastructure 88
Networking Issues 94
Improving Security for Decision Support Systems 97
Conclusions and Commentary 102
Contents vii

7 IMPLEMENTING COMMUNICATIONS-DRIVEN AND GROUP

DECISION SUPPORT SYSTEMS 103
Introduction 103
Key Terms 104
Group Decision Support Situations 105
Communication and Group Support Tools 107
A Managerial Perspective on Communications-Driven DSS 111
A Contingency Theory 112
Group Decision Support Systems Benefits 115
Virtual Organizations 116
Evaluating Communications and Group Support Tools 120
Conclusions and Commentary 120

8 BUILDING DATA AND DOCUMENT-DRIVEN DECISION

SUPPORT SYSTEMS 123
Introduction 123
Comparing Data and Document-Driven DSS 124
Data-Driven DSS Subcategories 125
Comparing DSS Data and Operating Data 130
An Interconnected Data-Driven DSS Architecture 133
Implementing a Data-Driven DSS 134
Finding Success 137
Conclusions and Commentary 138

9 BUILDING KNOWLEDGE-DRIVEN DSS AND MINING DATA 141

Introduction 141
Key Terms and Concepts 142
Characteristics of Knowledge-Driven DSS 144
Managing Knowledge-Driven DSS Projects 145
Knowledge-Driven DSS Examples 147
Data Mining and Creating Knowledge 149
Data Mining Examples 153
Evaluating Development Packages 154
Conclusions and Commentary 154

10 BUILDING MODEL -DRIVEN DECISION SUPPORT SYSTEMS 157

Introduction 157
Modeling Decision Situations 158
Accounting and Financial Models 161
Decision Analysis Models 165
Forecasting Models 167
Network and Optimization Models 169
Simulation Models 171
Modeling Languages and Spreadsheets 173
viii Contents

Model-Driven DSS Airline Industry Examples 176

Conclusions and Commentary 176

11 BUILDING WEB-BASED AND INTERORGANIZATIONAL

DECISION SUPPORT SYSTEMS 179
Introduction 179
Key Terms 180
Designing and Developing Web-Based DSS 181
Managing Web-Based and Interorganizational DSS 184
Examples of Web-Based DSS Development Software 186
Examples of Web-Based DSS 188
Companies with Web-Based DSS 189
Advantages and Disadvantages of Web-Based DSS 191
Conclusions and Commentary 192

12 EVALUATING DECISION SUPPORT SYSTEM PROJECTS 195

Introduction 195
DSS Project Evaluation Process 196
Evaluation Tools and Techniques 198
DSS Project Evaluation Criteria and Risk Factors 204
International and Cultural Issues 205
Ethics and Privacy Issues 207
Conclusions and Commentary 208

APPENDIX I: DECISION SUPPORT READINESS AUDIT 211

APPENDIX II: DSS USER-CENTERED DESIGN CHECKLIST 217

APPENDIX III: KEY DECISION SUPPORT SYSTEM TERMS 221

REFERENCES 237

INDEX 247
Tables and Figures

TABLES
1.1 Evolution of DSS Concepts 5
1.2 An Expanded DSS Framework 16
2.1 Categories of Strategic Relevance 25
4.1 A Decision Process Audit Plan 58
4.2 DSS Feasibility Study Outline 60
6.1 DSS Framework and Architecture Issues 90
7.1 Four Combinations of Group Decision Support 106
7.2 A Matrix of Task Types and Media Types 114
8.1 Comparing Operating and DSS Data 130
12.1 Summary of Evaluation Tools and Techniques 199

FIGURES
1.1 Traditional DSS Components 17
3.1 Categories of Organizational Decisions 38
3.2 Matching Decision Support to Decision Situations 39
3.3 A General Decision Process Model 46
4.1 A DSS Design and Development Hierarchy 61
4.2 Participants on a DSS Development Team 68
5.1 Examples of Icons 74
5.2 An Example of a Simple, Balanced Screen Design 78
5.3 Some Excel Chart Types 80
6.1 DSS Components 88
6.2 High-Level DSS Architecture 92
7.1 Communications-Driven DSS Architecture 109
8.1 An Example of a Multidimensional Data Cube 126
8.2 Star Schema Diagram 127
x Tables and Figures

8.3 Decision-Oriented Process for a Data-Driven DSS 135

9.1 Components of a Knowledge-Driven DSS 145
9.2 Neural Network Example 152
10.1 Break-Even DSS Developed in Microsoft Excel 162
10.2 A Hierarchical Representation 166
10.3 An Example Optimization Spreadsheet DSS 171
11.1 Web-Based DSS Architecture 182
11.2 JavaScript Decision Aid at DSSResources.COM 190
12.1 Ongoing DSS Project Evaluation Process 197
12.2 DSS Project Evaluator Decision Aid 201