Chapter 6 Executive Decision


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CHAPTER 6


Enterprise Decision Support Systems

  • DSS to provide enterprise-wide support

  • Executives

  • Many decision makers in different locations

  • Enterprise Resource Planning (ERP) systems



Enterprise Systems: Concepts and Definitions

  • Executive information systems (EIS)

  • Executive support systems (ESS)

  • Enterprise information systems (EIS)



Evolution of Executive and Enterprise Information Systems

  • DSS and ODSS

  • 1980s: Top execs get Executive Information Systems

  • 1995+’s: Move to everybody’s information systems and enterprise information systems

  • Definitions follow



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



Executive Support System (ESS)

  • Comprehensive support system that goes beyond EIS to include

  • Communications

  • Office automation

  • Analysis support

  • Intelligence





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



Executives’ Role and Their Information Needs

  • Decisional Executive Role (2 Phases)

    • 1. Identification of problems and/or opportunities
    • 2. The decision of what to do about them
  • Flow chart and information flow (Figure 8.1)

  • Use phases to determine executives’ information needs





Methods for Finding Information Needs

  • Wetherbe's Approach

  • 1. Structured Interviews

    • IBM's Business System Planning (BSP)
    • Critical Success Factors (CSF)
    • Ends/Means (E/M) Analysis
  • 2. 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



Characteristics of EIS

  • Drill down

  • Critical success Factors (CSF)

  • Status access

  • Analysis

  • Colors and audio

  • Navigation of information

  • Communication



Critical Success Factors (CSF)

  • Monitored by five types of information

    • 1. Key problem narratives
    • 2. Highlight charts
    • 3. Top-level financials
    • 4. Key factors (key performance indicators (KPI))
    • 5. Detailed KPI responsibility reports


Critical Success Factors



Characteristics and Benefits of EIS (Table 8.1)

  • Quality of information

  • User interface

  • Technical capability provided

  • Benefits





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







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



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 Software’s Command Center Plus and Pilot Decision Support Suite


EIS

  • EIS

  • Data access

  • Data warehousing

  • OLAP

  • Multidimensional analysis

  • Presentations

  • Web



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



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.)



Including Soft Information in EIS

  • Soft information is fuzzy, unofficial, intuitive, subjective, nebulous, implied, and vague



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%)

  • Soft Information Enhances EIS Value



Organizational DSS (ODSS)



Organizational decision support focuses on an organizational task or activity involving a sequence of operations and actors

  • 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


Definitions of ODSS

  • 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)



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)

  • 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)



Common Characteristics of ODSS (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

















George, Nunamaker & Valacich, 1992: Classification of ODSS based on Key Issues



George, Nunamaker & Valacich, 1992: Classification of ODSS based on Key Issues



George, Nunamaker & Valacich, 1992: Classification of ODSS based on Key Issues























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



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



Supply Chain Management (SCM)

  • To deliver an effective supply chain and do it effectively

  • To plan, organize, and coordinate the supply chain’s activities



SCM Benefits

  • Reduction in uncertainty and risks in the supply chain

  • Positively affect

    • inventory levels
    • cycle time
    • processes
    • customer service
  • Increase profitability



Supply Chain Components







Supply Chain Related to Porter’s (1985)Value Chain

  • 1. Inbound logistics (inputs)

  • 2. Operations (i.e manufacturing)

  • 3. Outbound logistics (i.e. storage, distribution)

  • 4. Marketing and Sales

  • 5. Service



Supply Chain Problems

  • Uncertainty in the demand forecast

  • Uncertainty in delivery times

  • Quality problems

  • Poor customer service

  • High inventory costs

  • Low revenue

  • Extra costs



Solutions to Supply Chain Problems

  • Outsourcing

  • Buy, not make

  • Configure optimal shipping plans

  • Optimize purchasing

  • Strategic partnerships with suppliers

  • Just-in-time delivery of purchases

  • Reduce intermediaries

  • Reduce lead times (EDI)

  • Use fewer suppliers

  • Improve the supplier-buyer relationships

  • Build-to-order

  • Accurate demand by working with suppliers



Computerized Systems

  • MRP

  • ERP

  • SCM

  • Integrating the supply chain



Enterprise Resource Planning (ERP)

  • Objective: integrate all departments and functions across an organization into a single computer system that can serve the entire enterprise’s needs



ERP Software Vendors

  • SAP

  • Baan

  • PeopleSoft

  • Oracle

  • J.D. Edwards

  • Computer Associates



ERP

  • Very (VERY!) expensive

  • 2nd generation: doing better

  • Early 2000: moving to Web

  • Will fail if an organization’s business processes do not fit the ERP system’s model



Application Service Providers and ERP Outsourcing

  • ASP: software vendor who leases ERP-based applications

  • Outsourcing

  • Now via the Web



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


Frontline Decision Support Systems

  • Process of automating decision processes and pushing them down into the organization and even partners

  • Includes empowering employees





Future of Executive and Enterprise Support Systems

  • Toolbox for customized systems

  • Multimedia support

  • Better access (via PDFs and cell phones)

  • Virtual Reality and 3-D Image Displays

  • Merging of analytical systems (OLAP / multidimensional analysis)) with desktop publishing

  • Client/server architecture

  • Web-enabled EIS

  • Automated support and intelligent assistance

  • Integration of EIS and Group Support Systems

  • Global EIS

  • Integration and deployment with ERP products




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