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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: Concepts and 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

opportunities2. 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 narratives2. Highlight charts3. Top-level financials4. 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.

UserInterface

ResidentOLAPTools

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Report writing software

GDSS software

MathematicalModels

Other group

members

RDB

GDSSsoftware

Environment

Individual problem solvers

Decision support system

Environment

Legend: Data Information Communication

An EIS Architecture

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Decision Maker Views

Hypertext Links

Cognitive Style

Mental ModelsInfromation Sources

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C olum n 1 C olum n 2 C olum n 3 C olum n 4

R ow 1 R ow 2 R ow 3 R ow 4

C olum n Title

Y1 Title

R ow Title

TitleSub title

N o te : T h is is th e fo o tn o te

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

0102030405060708090

1st Qtr 2ndQtr

3rdQtr

4thQtr

EastWestNorth

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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MD

Data Base

Legacy

Systems

R DB’s SQL

GroupWare/GSS

BusinessProcessess

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