Enterprise Decision

1
Chapter 8

• Enterprise Decision
• Support Systems

2
Enterprise Decision Support Systems

• DSS to provide enterprise-wide support
• Executives
• Many decision makers in different locations
• Enterprise Resource Planning (ERP) systems

3
Evolution of Executive and Enterprise
Information Systems

• DSS and ODSS
• 1980s Top execs get Executive Information
  Systems
• 1995s Move to everybodys information systems
  and enterprise information systems
• Definitions follow

4
Executive Information System (EIS)

• A computer-based system that serves the
  information needs of top executives
• Provides rapid access to timely information and
  direct access to management reports
• Very user-friendly, supported by graphics
• Provides exceptions reporting and "drill-down"
  capabilities
• Easily connected to the Internet
• Drill down

5
Executive Support System (ESS)

• Comprehensive support system that goes beyond
  EIS to include
• Communications
• Office automation
• Analysis support
• Intelligence

6
Enterprise Information System

• Corporate-wide system
• Provides holistic information
• From a corporate view
• Part of enterprise resource planning (ERP)
  systems
• For business intelligence
• Leading up to enterprise information portals and
  knowledge management systems

7
Executives Role and Their Information Needs

• Decisional Executive Role (2 Phases)
• Identification of problems and/or opportunities
• The decision of what to do about them
• Flow chart and information flow (Figure 8.1)
• Use phases to determine executives information
  needs

8
The Decision Making Process of Executives
(Decision Role)
9
Methods for Finding Information Need

• Wetherbe's Approach
• Structured Interviews
• IBM's Business System Planning (BSP)
• Critical Success Factors (CSF)
• Ends/Means (E/M) Analysis
• Prototyping
• Watson and Frolick's Approach
• Asking (interview approach)
• Deriving the needs from an existing information
  system
• Synthesis from characteristics of the systems
• Discovering (Prototyping)
• Ten methods
• Other Methods

10
Executive Information System (EIS)
Characteristics and Benefits

• Quality of information
• User interface
• Technical capability provided
• Benefits

11
Executive Information System (EIS)
Characteristics

• Drill down
• Critical success Factors (CSF)
• Status access
• Analysis
• Exception reporting
• Colors and audio
• Navigation of information
• Communication

12
Critical Success Factors (CSF)
Monitored by five types of information

• Key problem narratives
• Highlight charts
• Top-level financials
• Key factors (key performance indicators (KPI))
• Detailed KPI responsibility reports

13
Typical Key Performance Indicators
Critical Success Factors (CSF)

• Profitability Profitability measures for each
  department, product, region, comparisons among
  departments and products and with competitors
• Financial Financial ratios, balance sheet
  analysis, cash reserve position, ROI
• Marketing Market shares, advertisement analysis,
  product pricing, weekly sales results

14
Comparing and Integrating
EIS and DSS

• Tables 8.2 and 8.3 compare the two systems
• Table 8.2 - DSS definitions related to EIS
• Table 8.3 - Comparison of EIS and DSS
• EIS is part of decision support

15
Integrating
EIS and Group Support Systems

• EIS vendors - easy interfaces with GSS
• Some EIS built in Lotus Domino / Notes
• Comshare Inc. and Pilot Software, Inc. - Lotus
  Domino/Notes-based enhancements and
  Web/Internet/Intranet links

16
Traditional EIS Software

• Major Commercial EIS Software Vendors
• Comshare Inc. (www.comshare.com)
• Pilot Software Inc. (www.pilotsw.com)
• Application Development Tools
• In-house components
• Comshare Commander tools
• Pilot Softwares Command Center Plus and Pilot
  Decision Support Suite

17
Multidimensional Analysis

• Easy to develop an EIS in an OLAP system
• Most are Web-ready
• Can tap into data in a data warehouse via the Web
• Use advanced visualization tools

18
Representative OLAP / Multidimensional Analysis
Packages

• BrioQuery (Brio Technology Inc.)
• Business Objects (Business Objects Inc.)
• Decision Web (Comshare Inc.)
• DataFountain (Dimensional Insight Inc.)
• DSS Web (MicroStrategy Inc.)
• Focus Fusion (Information Builders Inc.)
• InfoBeacon Web (Platinum Technology Inc.)
• Oracle xpress Server (Oracle Corporation)
• Pilot Internet Publisher (Pilot Software Inc.)

19
Including Soft Information in EIS
Soft information is

• Fuzzy
• Unofficial
• Intuitive
• Subjective
• Nebulous
• Implied
• Vague

20
Soft Information Used in Most EIS

• Predictions, speculations, forecasts, estimates
  (78.1)
• Explanations, justifications, assessments,
  interpretations (65.6)
• News reports, industry trends, external survey
  data (62.5)
• Schedules, formal plans (50.0)
• Opinions, feelings, ideas (15.6)
• Rumors, gossip, hearsay (9.4)

21
Including Soft Information in EIS

• Soft Information Enhances EIS Value
• Intelligent Agents
• New Feeds

22
Organizational DSS (ODSS)
Hackathorn and Keen (1981)

• Organizational decision support focuses on an
  organizational task or activity involving a
  sequence of operations and actors
• Each individual's activities must mesh closely
  with other people's work
• Computer support is for
• Improving communication and coordination
• Problem solving

23
Organizational DSS (ODSS)
Definitions

• A combination of computer and communication
  technology designed to coordinate and disseminate
  decision-making across functional areas and
  hierarchical layers in order that decisions are
  congruent with organizational goals and
  management's shared interpretation of the
  competitive environment (R. T. Watson, 1990)
• A DSS that is used by individuals or groups at
  several workstations in more than one
  organizational unit who make varied (interrelated
  but autonomous) decisions using a common set of
  tools (Carter et al., 1992)

24
Organizational DSS (ODSS)
Definitions

• A distributed decision support system (DDSS). Not
  a manager's DSS, but supports the organization's
  division of labor in decision making (Swanson and
  Zmud, 1990)
• Apply the technologies of computers and
  communications to enhance the organizational
  decision-making process. Vision of technological
  support for group processes to the higher level
  of organizations (King and Star, 1990)

25
Organizational DSS (ODSS)
Common Characteristics (George, 1991)

• Focus is on an organizational task or activity or
  a decision that affects several organizational
  units or corporate problems
• Cuts across organizational functions or
  hierarchical layers
• Almost always involves computer-based
  technologies, and may involve communication
  technologies
• Can Integrate ODSS with Group DSS and Executive
  Information Systems
• ODSS are an enterprise information system
  directly concerned with decision support

26
Supply and Value Chains and Decision Support

• Supply chain
• (originally) flow of materials from sources to
  internal use
• Demand chain
• flow from inside to customers

27
Supply Chain

• The flow of materials, information, and services
  from raw material suppliers through factories and
  warehouses to the end customers
• Includes the organizations and processes that
  create and deliver value to the end customers

28
Supply Chain Management (SCM)

• To deliver an effective supply chain and do it
  effectively
• To plan, organize, and coordinate the supply
  chains activities

29
Supply Chain Management (SCM)
Benefits

• Reduction in uncertainty and risks in the supply
  chain
• Positively affect
• inventory levels
• cycle time
• processes
• customer service
• Increase profitability

30
Supply Chain
Components

• Upstream
• Internal supply chain
• Downstream
• Involves product life cycle activities
• Example (Figure 8.2)

31
Supply Chain

• Related to the Value Chain Model (Porter)
• Value chain is a series of activities that
  includes
• Inbound logistics
• Warehousing storage
• Production
• Finished inventory storage
• Outbound logistics
• Marketing sales
• Customer service

32
The Value Chain of a Manufacturing Company
33
Supply Chain
Problems

• Uncertainty in the demand forecast
• Uncertainty in delivery times
• Quality problems
• Poor customer service
• High inventory costs
• Low revenue
• Extra costs

34
Supply Chain
Solutions to Problems

• Outsourcing
• Buy, not make
• Configure optimal shipping plans
• Optimize purchasing
• Strategic partnerships with suppliers
• Just-in-time delivery of purchases

35
Supply Chain
Solutions to Problems

• Reduce intermediaries
• Reduce lead times/use EDI
• Use fewer suppliers
• Improve the supplier-buyer relationships
• Build-to-order
• Accurate demand by working with suppliers

36
Computerized System

• MRP
• ERP
• SCM
• Integrating the supply chain

37
Enterprise Resource Planning (ERP)
Objective

• integrate all departments and functions across an
  organization into a single computer system that
  can serve the entire enterprises needs

38
Enterprise Resource Planning (ERP)
Software Vendors

• SAP
• Baan
• PeopleSoft
• Oracle
• J.D. Edwards
• Computer Associates

39
Enterprise Resource Planning (ERP)

• Very (VERY!) expensive
• 2nd generation doing better
• Early 2000 moving to Web
• Will fail if an organizations business processes
  do not fit the ERP systems model

40
Application Service Providers and ERP Outsourcing

• ASP
• software vendor who leases ERP-based applications
• Outsourcing
• Now via the Web

41
Corporate (Enterprise) Portals and EIS

• Integrates internal applications with external
  applications
• Generally via the Web
• Can include
• groupware technologies
• presentation and customization
• publishing and distribution
• search
• categorization
• integration

42
Frontline Decision Support Systems

• Process of automating decision processes and
  pushing them down into the organization and even
  partners
• Includes empowering employees
• Serves business managers such as line managers,
  sales executives and call center representatives
• Provides
• the right questions to ask
• the location of needed data
• metrics
• suggested actions