CHAPTER 8

Enterprise Decision Support Systems

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

Enterprise Systems: Concepts and Definitions

Executive information systems (EIS)

Executive support systems (ESS)

Enterprise information systems (EIS)

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

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

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

Executives’ Role and Information Needs

Decisional Executive Role (2 Phases)1. Identification of problems and/or opportunities2. 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)

Methods for Finding Information Needs

IBM’s Business Systems Planning Rockart’s Critical Success Factors

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

Business Systems Planning (BSP)

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

Critical Success Factors (CSFs)

Sources of CSFs– Industry– Company– Environment– Temporal – not previously important but are

now Use CSFs to examine information needs

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

Do the EIS, ESS, etc. have appropriate information for executives/managers?

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

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    

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”

Integrating EIS and Group Support Systems

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

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

Including Soft Information in EIS Soft information is fuzzy, unofficial,

intuitive, subjective, nebulous, implied, and vague

May be especially important to senior executives

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

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

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

Supply Chain Management (SCM)

To deliver an effective supply chain and do it effectively

To plan, organize, and coordinate the supply chain’s activities

SCM Benefits Reduction in uncertainty and risks in the

supply chain Positively affect

– inventory levels– cycle time– processes– customer service

Increase profitability

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 activitiesExample (Figure 8.2, p. 325)

Supply Chain

Supply Chain

Related to the Value Chain Model (Porter)

Primary activities– Inbound logistics– Outbound logistics– Operations– Marketing and sales– Service

Porter’s Value Chain

Supply Chain

Support activities– Firm’s infrastructure (accounting, finance,

etc.)– Human resource management– R&D– Procurement

Supply Chain Problems

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

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

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

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

ERP Software Vendors

SAP Baan PeopleSoft Oracle J.D. Edwards Computer Associates

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

Application Service Providers and ERP Outsourcing

ASP: software vendor who leases ERP-based applications

Outsourcing

Now via the Web

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