1 CHAPTER 6 Executive 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 Enterprise Systems: Concepts and Definitions Executive information systems (EIS) Executive support systems (ESS) Enterprise information systems (EIS)

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

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7 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

8 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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10 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

11 Characteristics of EIS Drill down Critical success Factors (CSF) Status access Analysis Colors and audio Navigation of information Communication

12 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

13 Critical Success Factors

14 Characteristics and Benefits of EIS (Table 8.1) Quality of information User interface Technical capability provided Benefits

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

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19 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

20 Traditional EIS Software Major Commercial EIS Software Vendors Comshare Inc. ( Pilot Software Inc. ( Application Development Tools In-house components Comshare Commander tools Pilot Software’s Command Center Plus and Pilot Decision Support Suite

21 EIS Data access Data warehousing OLAP Multidimensional analysis Presentations Web

22 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

23 Including Soft Information in EIS Soft information is fuzzy, unofficial, intuitive, subjective, nebulous, implied, and vague

24 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

25 Organizational DSS (ODSS) Three Types of Decision Support Individual Group Organizational Hackathorn and Keen (1981)

26 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

27 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)

28 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)

29 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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37 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

38 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)

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

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42 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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44 Report writing software GDSS software Mathematical Models Other group members RDB GDSS software Environment Individual problem solvers Decision support system Environment Legend: DataInformation Communication An EIS Architecture

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

46 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

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48 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

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

50 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

51 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

52 Supply Chain Management (SCM) To deliver an effective supply chain and do it effectively To plan, organize, and coordinate the supply chain’s activities

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

54 Supply Chain Components Upstream Internal supply chain Downstream Involves product life cycle activities Example (Figure 8.2)

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57 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

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

59 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

60 Computerized Systems MRP ERP SCM Integrating the supply chain

61 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

62 ERP Software Vendors SAP Baan PeopleSoft Oracle J.D. Edwards Computer Associates

63 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

64 Application Service Providers and ERP Outsourcing ASP: software vendor who leases ERP-based applications Outsourcing Now via the Web

65 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

66 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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68 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