IT can add value directly by reducing the costs associated with a given activity or subset of activities. Cost reduction usually occurs when IT enables the same activity or set of activities to be performed more efficiently. IT can add value indirectly by increasing revenues. The increase in revenues occurs when IT enables a firm to be more effective by increasing production and services without hiring more employees.

Companies can use decision support systems to analyze strategic decisions about future directions. In order for DSSs to be useful, IT needs to be aligned with the business.

To Prepare:

• Reflect on the importance of DSS in supporting strategic planning.
• Consider how DSS can support each of the main points and levels of strategic planning.

Submit by Day 7 a 2- to 3-page paper that presents an analysis of how an organization can use DSS as part of strategic planning. The paper should include the following:

• An explanation of the concept of business intelligence and its use in business
• An explanation of the importance of alignment of IT and business strategy
• A description of each of the four main points and three levels of strategic planning
• An explanation of how each of the four main points and three levels of strategic planning can be supported by DSS