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 everybodys 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
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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
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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
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Other Methods

Characteristics of EIS

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

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Critical Success Factors

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Characteristics and Benefits of EIS

(Table 8.1)

Quality of information User interface Technical capability provided Benefits

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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

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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

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Traditional EIS Software

Major Commercial EIS Software Vendors

Comshare Inc. (www.comshare.com) Pilot Software Inc. (www.pilotsw.com) In-house components Comshare Commander tools Pilot Softwares Command Center Plus and Pilot Decision Support Suite

Application Development Tools

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EIS Data access Data warehousing OLAP Multidimensional analysis Presentations Web

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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
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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.)
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Including Soft Information in EIS

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

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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

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Organizational DSS (ODSS)

Three Types of Decision Support

Individual Group Organizational

Hackathorn and Keen (1981)

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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

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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)
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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)
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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
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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

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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)

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

Outsourcing:
Strategic versus tactical issues Coordination issues

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The Internet

Corporate Data,Model, Knowledge Bases, etc.

Internet Server

EIS Data, Model, Knowledge Bases

User Interface Resident OLAP Tools

Intranet Server

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An EIS Architecture
Environment Individual problem solvers Other group members

Report writing software

Mathematical Models

GDSS GDSS software software

RDB

Decision support system Environment Legend: Data Communication Information

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Decision Maker Views

The decision makingintrepretation process

N o te : T h is is th e fo o tn o te
Y 1 T i t l e

S u b title

T itle

50 45 40 35 30 25 20

Infromation Sources

Cognitive Style Cognitive Style Mental Models Mental Models

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C o lu m n 1

C o lu m n 2 C o lu m n 3 C o lu m n T i t l e

C o lu m n 4

R ow 1

Row 2
R o w T it l e

R ow 3

Row 4

Outcomes
Links: relationships bewteen nodes New link

Hypertext Links

Nodes: data, models, knowledge

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Management Decision Making Processess

ls s Too roces P

Strategy Formulation

Planning & Budgeting

Dialectical
90 80 70 60 50 40 30 20 10 0

Intelligence Design Choice

East W est N orth

Inquiry Consensus Generating

Stakeholder Communications

1 st Q t2 n d 3 rd r Q tr Q tr

4 th Q tr

Performance Measure ment & Reporting Technical Infrastructure Building Human Resource Management

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GroupWare/GSS

MD Data Base Business Forecasting Organizational Structures

Legacy Systems

R DBs

SQL

Business Processess

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Repository-Based EIS

ESS Architecture
Data

GSS Structure
GSS Model Base

Repository

Interface

Environmentally Collected & Scanned Information: Internal/External

Base

Development Tools

Target IS

Interface Process Support

Problem & Opprotunity Data Base

Problem Identification: Intelligence

Process Tool Data Base

Normative Design
DeSanctis and Gallupe, 1985 Turban and Watson, 1989 Teng, Kettinger, and Guha, 1992 Chen, 1995 This paper

Descriptive Design Business Process Redesigns Decision Choice

Implementation/Outcomes

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Strategies to Processes
Process Tool Data Base

Business Strategy EIS ESS Process Selection GSS DSS CMC Enabling Technology Process Vision

Process Objectives

Process Attributes

Adapted from Davenport, 1993

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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

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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

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Supply Chain Management (SCM)

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

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SCM Benefits
Reduction in uncertainty and risks in the supply chain Positively affect

inventory levels cycle time processes customer service

Increase profitability
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Supply Chain Components

Upstream Internal supply chain Downstream

Involves product life cycle activities Example (Figure 8.2)

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Supply Chain Related to Porters (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

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Supply Chain Problems

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

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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

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Computerized Systems
MRP ERP SCM

Integrating the supply chain

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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

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ERP Software Vendors

SAP Baan PeopleSoft Oracle J.D. Edwards Computer Associates

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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

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Application Service Providers and ERP Outsourcing

ASP: software vendor who leases ERPbased applications Outsourcing Now via the Web

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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
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Frontline Decision Support Systems

Process of automating decision processes and pushing them down into the organization and even partners Includes empowering employees

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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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