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CHAPTER 6

Executive Decision

Support Systems

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Enterprise Decision Support Systems

DSS to provide enterprise-wide support

Executives

Many decision makers in different locations

Enterprise Resource Planning (ERP) systems

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Enterprise Systems: Conceptsand Definitions

Executive information systems (EIS)

Executive support systems (ESS)

Enterprise information systems (EIS)

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DSS and ODSS

1980s: Top execs get Executive Information Systems

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

Definitions follow

Evolution of Executive and Enterprise Information Systems

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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

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Executive Support System (ESS)

Comprehensive support system that goes beyond EIS to include

Communications

Office automation

Analysis support

Intelligence

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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 Approach1. 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

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Characteristics of EIS

Drill down

Critical success Factors (CSF)

Status access

Analysis

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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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

Integrating EIS and Group Support Systems

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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

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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

Internet Server

Intranet Server

EIS Data, Model,

Knowledge Bases

Corporate Data,Model,

Knowledge Bases, etc.

User

Interface

Resident

OLAP

Tools

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Report

writing

software

GDSS

softwareMathematical

Models

Other

group

members

RDB

GDSS

software

Environment

Individual

problem

solvers

Decision

support

system

Environment

Legend: Data InformationCommunication

An EIS Architecture

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Decision Maker Views

Hypertext Links

Cognitive Style

Mental ModelsInfromation Sources

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Column 1 Column 2 Column 3 Column 4

Row 1 Row 2 Row 3 Row 4

Column Title

Y1 Title

Row Title

TitleSubtitle

Note: This is the footnote

Outcomes

Cognitive Style

Mental Models

Nodes: data, models, knowledge

Links: relationships

bewteen nodes

The decision making-

intrepretation process

New link

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Management Decision Making Processess

0

10

20

30

40

50

60

70

80

90

1st Qtr 2nd

Qtr

3rd

Qtr

4th

Qtr

East

West

North

Intelligence

Design

Choice

Consensus

Generating

Dialectical

Inquiry

Strategy Formulation

Planning & Budgeting

Stakeholder

Communications

Performance

Measure ment &

Reporting

Technical Infrastructure Building

Human Resource Management

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MD

Data Base

Legacy

Systems

R DB’s SQL

GroupWare/GSS

Business

Processess

Business Forecasting

Organizational Structures

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Environmentally

Collected & Scanned Information:

Internal/External

Problem &

Opprotunity

Data Base

Process

Tool Data Base

Business

Process

Redesigns

Problem

Identification:

Intelligence

Normative

Design

Descriptive

Design

Decision

Choice

Implementation/Outcomes

Target IS

ESS Architecture

DeSanctis and Gallupe, 1985

Turban and Watson, 1989

Teng, Kettinger, and Guha, 1992

Chen, 1995

This paper

Repository

Repository-Based EIS

Interface

Development Tools

GSS

Interface

Data

Base

Model

Base

Process

Support

GSS Structure

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Business Strategy

Process SelectionProcess Tool

Data Base

Process Vision

Process ObjectivesProcess

Attributes

Enabling Technology

EIS

ESS

GSS

DSS

CMC

Strategies to

Processes

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 chain’s 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 ChainRelated 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

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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 enterprise’s 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 organization’s business processes do not fit the ERP system’s model

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Application Service Providers and ERP Outsourcing

ASP: software vendor who leases ERP-based 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