Enterprise Decision Support Systems CHAPTER 8 Enterprise Decision Support Systems

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 Exception reporting 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 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) Three Types of Decision Support Individual Group Organizational Hackathorn and Keen (1981)

Computer support is for 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) 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 Downsizing: Reduction in the number of human resources and hierarchical layers- Keys to ODSS: ODSS to act as knowledge filters and amplifiers ODSS to handle increased communication caused by an increase in the span of control ODSS to integrate the gaps created by the missing Management

Self-Managed Teams: This address the gaps. George, Nunamaker & Valacich, 1992: Classification of ODSS based on Key Issues Self-Managed Teams: This address the gaps. Need increased coordination tools: Groupware Need increased flexibility in decision making Need different types of people (for discussion)

George, Nunamaker & Valacich, 1992: Classification of ODSS based on Key Issues Outsourcing: Strategic versus tactical issues Coordination issues

Corporate Data,Model, Knowledge Bases, etc. The Internet EIS Data, Model, Knowledge Bases Internet Server User Interface Resident OLAP Tools Intranet Server

An EIS Architecture Environment Other group members Individual problem solvers Report writing software Mathematical Models GDSS software GDSS software RDB Decision support system Environment Data Communication Information Legend:

Decision Maker Views Cognitive Style Mental Models Cognitive Style The decision making- intrepretation process Cognitive Style Mental Models Cognitive Style Mental Models Infromation Sources Outcomes Links: relationships bewteen nodes New link Nodes: data, models, knowledge Hypertext Links

Management Decision Making Processess Intelligence Design Choice Consensus Generating Dialectical Inquiry Process Tools Strategy Formulation Planning & Budgeting Stakeholder Communications Performance Measure ment & Reporting Technical Infrastructure Building Human Resource Management

ESS Architecture Environmentally Collected & Scanned Information: Repository Repository-Based EIS Interface Development Tools GSS Interface Data Base Model Process Support GSS Structure Environmentally Collected & Scanned Information: Internal/External Target IS Problem & Opprotunity Data Base Problem Identification: Intelligence Normative Design Descriptive Decision Choice Implementation/Outcomes Process Tool Data Base Business Process Redesigns DeSanctis and Gallupe, 1985 Turban and Watson, 1989 Teng, Kettinger, and Guha, 1992 Chen, 1995 This paper

Strategies to Processes Business Strategy EIS ESS GSS DSS CMC Process Tool Data Base Process Selection Enabling Technology Process Vision Process Attributes Process Objectives Adapted from Davenport, 1993

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

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

Integrating the supply chain 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