decision support system by simulation model (ajarn chat chuchuen) 1 chapter 8 enterprise decision...

Decision Support System by Simulation Model (Ajarn Chat Chuchuen)

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Chapter 8

Enterprise DecisionSupport Systems


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DSS to provide enterprise-wide support Executives Many decision makers in different locations Enterprise Resource Planning (ERP)

systems

Enterprise Decision Support Systems


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Evolution of Executive and Enterprise Information Systems

DSS and ODSS 1980s: Top execs get Executive

Information Systems 1995+’s: Move to everybody’s information

systems and enterprise information systems

Definitions follow


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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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The Decision Making Process of Executives (Decision Role)

External environment Internal environment

Evaluation of information

Qualitative analysis Quantitative analysis

Interpretation:Is there a problem

(opportunity)?

Decision: What to doabout the problem

(opportunity)

YesInput for decision making

Scanning

No

Scanning

Phase I

Phase II


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Methods for Finding Information Need 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


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Quality of information User interface Technical capability provided Benefits

Characteristics and Benefits


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Drill down Critical success Factors (CSF) Status access Analysis Exception reporting Colors and audio Navigation of information Communication

Characteristics


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Critical Success Factors (CSF)

1. Key problem narratives2. Highlight charts3. Top-level financials4. Key factors (key performance indicators

(KPI))5. Detailed KPI responsibility reports

Monitored by five types of information


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Typical Key Performance Indicators

Profitability Profitability measures for each department, product, region, comparisons among departments and products and with competitors

Financial Financial ratios, balance sheet analysis, cash reserve position, ROI

MarketingMarket shares, advertisement analysis, product pricing, weekly sales results

Critical Success Factors (CSF)


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Comparing and Integrating

Tables 8.2 and 8.3 compare the two systemsTable 8.2 - DSS definitions related to EISTable 8.3 - Comparison of EIS and DSS

EIS is part of decision support

EIS and DSS


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Integrating

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

EIS and Group Support Systems


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Traditional EIS Software

Major Commercial EIS Software VendorsComshare Inc. (www.comshare.com) Pilot Software Inc. (www.pilotsw.com)

Application Development Tools In-house components Comshare Commander toolsPilot Software’s Command Center Plus and

Pilot Decision Support Suite


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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

Fuzzy Unofficial Intuitive Subjective Nebulous Implied Vague

Soft information is


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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%)


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Soft Information Enhances EIS Value Intelligent Agents New Feeds

Including Soft Information in EIS


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Organizational DSS (ODSS)

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

Hackathorn and Keen (1981)


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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)

Definitions


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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)

Definitions


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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

Common Characteristics (George, 1991)


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Supply chain: (originally) flow of materials from sources to

internal use Demand chain:

flow from inside to customers

Supply and Value Chains and Decision Support


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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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Supply Chain Management (SCM)

Reduction in uncertainty and risks in the supply chain

Positively affect inventory levelscycle timeprocessescustomer service

Increase profitability

Benefits


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Supply Chain

Upstream Internal supply chain Downstream

Involves product life cycle activitiesExample (Figure 8.2)

Components


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Supply Chain

Related to the Value Chain Model (Porter) Value chain is a series of activities that inclu

des Inbound logisticsWarehousing & storageProductionFinished inventory storageOutbound logisticsMarketing & salesCustomer service


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The Value Chain of a Manufacturing Company


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Supply Chain

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

Problems


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Supply Chain

Outsourcing Buy, not make Configure optimal shipping plans Optimize purchasing Strategic partnerships with suppliers Just-in-time delivery of purchases

Solutions to Problems


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Supply Chain

Reduce intermediaries Reduce lead times/use EDI Use fewer suppliers Improve the supplier-buyer relationships Build-to-order Accurate demand by working with

suppliers

Solutions to Problems


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Computerized System

MRP ERP SCM

Integrating the supply chain


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Enterprise Resource Planning (ERP)

integrate all departments and functions across an organization into a single computer system that can serve the entire enterprise’s needs

Objective


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SAP Baan PeopleSoft Oracle J.D. Edwards Computer Associates

Software Vendors


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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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ASP: software vendor who leases ERP-based

applications Outsourcing Now via the Web

Application Service Providers and ERP Outsourcing


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Corporate (Enterprise) Portals and EIS

Integrates internal applications with external applications

Generally via the Web Can include

groupware technologiespresentation and customizationpublishing and distributionsearchcategorization 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 Serves business managers such as line

managers, sales executives and call center representatives

Provides the right questions to ask the location of needed data metrics suggested actions

decision support system by simulation model (ajarn chat chuchuen) 1 chapter 8 enterprise decision...

Documents

executive information

s information systems

timely information

holistic information

decision makers

enterprise information

computerbased system

information flow figure