CHAPTER 8

1. CHAPTER 8 Enterprise Decision Support Systems

2. Enterprise Decision Support Systems • DSS to provide enterprise-wide support • Executives and other senior level personnel • 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 • Monitoring and control • Very user-friendly, supported by graphics • Provides exceptions reporting • Drill down • Easily connected to the Internet

5. Executive Support System (ESS) Comprehensive support system includes EIS capabilities but goes beyond EIS to include • Communications • Collaborative support with other executives • Analysis support • “A DSS for Executives” • Intelligence • Search capabilities • Expert systems

6. Enterprise Information System • Corporate-wide system • What defines a “senior executive”? It’s evolving. • Provides holistic information • “the big picture;” a corporate view • Part of enterprise resource planning (ERP) systems • For business intelligence • Leading up to enterprise information portals and knowledge management systems

7. Executives’ Role and Information Needs • Decisional Executive Role (2 Phases) 1. Identification of problems and/or opportunities 2. The decision of what to do about them • EIS can do this well with its monitoring, i.e., exception reporting, and controlling capabilities • Flow chart and information flow (Figure 8.1) • Internal information • External information • Evaluation and analysis of information • Crucial for today’s competitive environment • Use phases to determine executives’ information needs • What info is needed to scan and interpret (Phase 1) and what to do (Phase 2)

8. Methods for Finding Information Needs • IBM’s Business Systems Planning • Rockart’s Critical Success Factors

9. Business Systems Planning • Business Systems Planning (BSP) • Early strategic planning effort by IBM • Examine business processes and classes of data which become the basis for information architecture (IA) • In turn, IA leads to applications • Top-down approach • Some relationship to BPR with its emphasis on processes

10. Business Systems Planning (BSP)

11. Critical Success Factors • Late 1970s by John Rockart from MIT • Senior managers not receiving information from computer systems they need • CSFs – few things in organization that must go right if organization is to succeed • CSF characteristics • Measurable • Have business value • Easily understood • Can change over time; priorities can change • Differ for persons in an organization and for organizations in an industry

12. Critical Success Factors (CSFs) • Sources of CSFs • Industry • Company • Environment • Temporal – not previously important but are now • Use CSFs to examine information needs

13. 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)) • Detailed KPI responsibility reports Do the EIS, ESS, etc. have appropriate information for executives/managers?

14. Characteristics of EIS • Drill down • Critical success Factors (CSF) • Status access • More up-to-date, perhaps realtime access to key indicator data • Analysis • with ESS capability/add-on • Intelligent agents • Exception reporting • Management by exception (MBO) • Colors and audio • Navigation of information • Intelligent agents • Communication with GSS capabilities integrated • Numerous benefits as shown in Table 8.1

15. EIS Issues/Pitfalls • Executive versus operating sponsor • Tie EIS/ESS to business, not to technology • More experienced users today • Users need IT that helps in a business sense • Use CSFs as an approach to identify executive information needs • Often difficult to specify information needs • Often executives may be unable to specify what information they want • May be unwilling to devote the time to this process • Other reasons why EIS can fail • Lack of commitment • Difficult to learn or use system • Does not satisfy executive needs • No sponsor • No follow through or expectations too high

16. 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 • More “enterprise” orientation today, as opposed to “executive”

17. Comparing and Integrating EIS and DSS • Tables 8.2 and 8.3 compare the two systems • Table 8.2 - DSS definitions related to EIS • Noticeable differences in terms of modeling, usage, type of problem solving • Table 8.3 - Comparison of EIS and DSS • Many differences, e.g., type of problems, modeling capabilities, nature of information • Yet, EIS is part of decision support • Alerting to a problem • Intelligence phase of decision making process

18. Multidimensional Analysis • 3 or more dimensions in analyzing data • 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 • Numerous SW packages listed in text

19. Including Soft Information in EIS • Soft information is fuzzy, unofficial, intuitive, subjective, nebulous, implied, and vague • May be especially important to senior executives

20. 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

21. 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, intranets, and ERP applications • Can Integrate ODSS with Group DSS and Executive Information Systems • ODSS are an enterprise information system directly concerned with decision support

22. 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

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

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

25. Supply Chain Components • Upstream • An organization’s various suppliers and their suppliers • Internal supply chain • Processes inside the organization; transforming from inputs to outputs • Downstream • Processes to deliver to the customers • Involves product life cycle activities Example (Figure 8.2, p. 325)

26. Supply Chain

27. Supply Chain • Related to the Value Chain Model (Porter) • Primary activities • Inbound logistics • Outbound logistics • Operations • Marketing and sales • Service

28. Porter’s Value Chain

29. Supply Chain • Support activities • Firm’s infrastructure (accounting, finance, etc.) • Human resource management • R&D • Procurement

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

31. 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

32. Computerized Systems • MRP and MRP II • 1960s and later • Integrated parts of supply chain but not all • ERP • 1990s • More complete integration of the supply chain

33. 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

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

35. 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 • HUGE ORGANIZATIONAL COMMITMENT

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

37. 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