Value Analysis Justifying Decision Support Systems

Cover Value Analysis Justifying Decision Support Systems
Value Analysis Justifying Decision Support Systems
Peter G W Keen
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The benefits of a DSS are the incentive for going ahead. The complex calculations of cost-benefit analysis are replaced in value analysis by simple questions that most managers naturally ask and handle with ease: 1) What exactly will I get from the system?
— It solves a business problem; — It can help improve planning, communication and control; — It saves time.
2) If the prototype costs $X, do I feel that the cost is acceptable?
-27- Obviously the manager can try out several alternatives; "If
...the prototype only accomplishes two of my three operational objectives, at a lower cost of $Y, would I prefer that?" The key point is that value and cost are kept separate and not equated. This is sensible only if the cost is kept fairly low. From case studies of DSS, it appears that the cost must be below $20, 000 in most organizations for value analysis to be applicable.
This first stage of value analysis is similar to the way in which effective decisions to adopt innovations are made. It corresponds to most managers' implicit strategy.


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