Ch. 2
Gaining Competitive Advantage with DSS

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In many organizations, managers and MIS professionals have worked together to create important transaction-oriented strategic information systems. These information systems have significantly improved the processing of business transactions. In some organizations, the search for other strategic technology opportunities remains focused on enhancing business transaction processing. This focus on operations is too narrow. Although business transactions can involve managerial decision-making, redesigning a transaction processing system creates advantages that are very different from those that can result from building an innovative Decision Support System. DSS meet a different need and serve a different purpose. Managers need to recognize that strategic decision support applications can provide substantial opportunities for targeting sales efforts and improving profits. Information technology is creating new DSS capabilities that can and should be used to build innovative, specific Decision Support Systems that yield competitive advantage for an organization.

You may be asking: Can a Decision Support System really provide a competitive advantage to a business? Yes, a DSS can be a strategic information system and a specific Decision Support System can create a competitive advantage. Managers need to know when, how and why DSS are and can be competitive weapons.

Evidence indicates managers can now use sophisticated Data-Driven and Document-Driven DSS to obtain information that was buried for many years in filing cabinets or archived on computer tapes. Model-Driven DSS can reduce waste in production operations and improve inventory management. Knowledge-Driven DSS can analyze cash register transaction data and help managers find relations in consumer buying behavior that increases sales and inventory turnover. Group decision support systems and Communications-Driven DSS can support teams working all over the world. Inter-Organizational DSS can support a company’s suppliers and customers. An Inter-Organizational DSS can reduce stock-outs and inventory carrying costs, and increase the number of happy customers.

This chapter provides additional examples of how various types of Decision Support Systems can enhance and improve managerial decision making processes and provide an organization with a competitive advantage. The major sections discuss technology trends, gaining competitive advantage, how DSS can provide a competitive advantage, examples of Strategic DSS, characteristics of Strategic Decision Support Systems, identifying opportunities and Information Systems planning, and DSS risks and benefits.