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Susan Coles: Manchester Metropolitan University, Crewe, UK
Jennifer Rowley: Edge Hill University College, Ormskirk, UK
Introduction
Spreadsheets have become a major tool for managers in the decision-making process. Spreadsheets are used as a desktop decision support system (DSS). Until recently most DSS were large mainframe-based systems which were often designed by information systems professionals and used by modelling experts. In this environment the designer and user could be expected to communicate and have a shared understanding of both the effective use of information technology and the mathematics associated with the model building process. Managers are potentially much closer to the key decisions that need to be made in order to ensure the future success of the business, but may be less confident and experienced in model-building and information technology skills. Increasingly easy-to-use software, particularly in the form of spreadsheet packages, has made it easier for managers to learn to make effective use of information technology. It is important that managers develop the skills to be able to use spreadsheets effectively in support of strategic decision making.
This article, then, considers the potential use of spreadsheets as DSS. It commences by considering the nature of DSS and the advantages and disadvantages of spreadsheets as DSS, and then proceeds to consider and illustrate some of the models that can be easily built with modern spreadsheet packages. Examples are developed using Excel, but most of the features described are also available in recent releases of other spreadsheet packages.
Effective spreadsheet model development
Although there is still a role for the organizational DSS, increasingly managers are seeking to build their own models. In this context there is a danger of ad hoc development of spreadsheet models. It is debatable how effectively business users apply spreadsheet models[1]. Many models are developed in a piecemeal fashion and as a result are badly structured, cumbersome and difficult to maintain. A survey of Institute of Management members carried out jointly by the Institute of Management and Microsoft in 1992[2] showed that about three-quarters of managers actually use computers, but that 92 per cent felt uncomfortable with the technology.
In this context there are two potential hazards to be negotiated.
Managers may not have a sufficient appreciation of how to develop a model appropriately....