Question #2 in FINAL

1) Decision Support Systems (DSS) are a specific class of computerized information system that supports business and organizational decision-making activities. A properly-designed DSS is an interactive software-based system intended to help decision makers compile useful information from raw data, documents, personal knowledge, and/or business models to identify and solve problems and make decisions.


2) Management Information System (MIS) is a subset of the overall internal controls of a business covering the application of people, documents, technologies, and procedures by management accountants to solving business problems such as costing a product, service or a business-wide strategy. Management Information Systems are distinct from regular information systems in that they are used to analyze other information systems applied in operational activities in the organization. While the Decision Support Systems (DSS) are the one of the example of MIS commonly used to refer to the group of information management methods tied to the automation or support of human decision making. One of the most common vendor claims for DSS built using business intelligence tools, business performance management software, data mining tools, quantitative models and data warehouses is that any organization that implements the system will gain a competitive advantage. This claim is rarely tempered with words like may, can or even should. Such technology optimism creates unrealistic expectations and in some cases it contributes to technology cynicism.


3) Decision Support Systems of all types create a competitive advantage when three criteria are met. First, once a DSS is implemented it must become a major or significant strength or capability of the organization. Second, the DSS must be unique and proprietary to the organization. Third, the advantage provided by the DSS must be sustainable for at least a few years to insure an adequate return on the investment. Even with rapid technology change a 3 year payback is a realistic goal. Managers who are searching for strategic investments in information technology for decision support need to keep these three criteria in mind.
DSS can potentially help a firm create a cost advantage. DSS can provide many benefits including improving personal efficiency and reducing staff needs, expediting problem solving and increasing organizational control. Managers who want to create a cost advantage should search for situations where decision processes seem slow or tedious and where problems reoccur or solutions are delayed or unsatisfactory.

Finally, DSS can be used to help a company better focus on a specific customer segment and hence gain an advantage in meeting that segment’s needs. MIS and DSS can help track customers and DSS can make it easier to serve a specialized customer group with special services. Some customers won’t pay a premium for targeted service or larger competitors also target specialized niches using their own DSS.