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Multi-Layer Decision Support Model for Value and Cost Analysis of IT Solutions: Hierarchical Approach

Multi-Layer Decision Support Model for Value and Cost Analysis of IT Solutions: Hierarchical Approach
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Author(s): Tadeusz Krupa (Warsaw University of Technology, Poland) and Teresa Ostrowska (Warsaw University of Technology, Poland)
Copyright: 2007
Pages: 5
Source title: Managing Worldwide Operations and Communications with Information Technology
Source Editor(s): Mehdi Khosrow-Pour, D.B.A. (Information Resources Management Association, USA)
DOI: 10.4018/978-1-59904-929-8.ch021
ISBN13: 9781599049298
EISBN13: 9781466665378

Abstract

The article presents mechanisms of value and cost evaluation that accompany decision making processes in hierarchical systems, while performing complex IT projects. Every designing operation, performed in set deterministic or probabilistic conditions, is a decision making activity (selection activity) that initiates expected value and costs that occur with it. AIDA method has been selected as a starting point of the model’s structure. The scope of applying of this method has been extended to modeling of decision making process in a hierarchically structured organization. Deliberations has been limited to the deterministic model with the assumption that selection of every decision, from the finite set of variants, is evaluated in two categories: V – expected benefits and C – incurred costs. Making a decision “agreed” in many layers is crucial for hierarchic structures. It is necessary to assure its global realization ability and maximize the expected value in relation with estimated costs. Deliberations are exemplified with a decision making process that accompanies launching a new IT project with cost-based limitations.

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