A SPECIFIC DECISION SUPPORT SYSTEM (SDSS) TO DEVELOP AN OPTIMAL PROJECT PORTFOLIO MIX UNDER UNCERTAINTY

A specific decision support system (SDSS) that can be used as a methodology for choosing an optimal portfolio mix of information systems projects is developed. An SDSS is developed by applying a number of well-known techniques in management science. A net present value (NPV) of the projects is maximized within limited resources and the solution of the model provides the optimal project start period, system development language, and staff size. The SDSS conducts a risk analysis on those variables that are deemed critical when determining the optimal solution. The final phase of the SDSS establishes the value of perfect information on these critical variables. To demonstrate the usefulness of the model, an example consisting of five information system (IS) projects are presented. It is shown that given the estimates of the exogenous parameters of the IS project environment, the model can determine when to begin the project development, which systems development language to use, and the number of systems development staff to assign to each project. Furthermore, the degree of the variability of the estimates of exogenous parameters is evaluated through empirical probability distributions. © 1990 IEEE