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Transcript of CHAPTER 8 Enterprise Decision Support Systems. Enterprise Decision Support Systems n DSS to provide...
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CHAPTER 8
Enterprise Decision Support Systems
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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
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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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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
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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
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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
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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)
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Methods for Finding Information Needs
IBM’s Business Systems Planning Rockart’s Critical Success Factors
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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
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Business Systems Planning (BSP)
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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
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Critical Success Factors (CSFs)
Sources of CSFs– Industry– Company– Environment– Temporal – not previously important but are
now Use CSFs to examine information needs
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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
Do the EIS, ESS, etc. have appropriate information for executives/managers?
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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
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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
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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
More “enterprise” orientation today, as opposed to “executive”
Integrating EIS and Group Support Systems
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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
• 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
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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
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Including Soft Information in EIS Soft information is fuzzy, unofficial,
intuitive, subjective, nebulous, implied, and vague
May be especially important to senior executives
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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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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
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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– 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)
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Supply Chain
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Supply Chain
Related to the Value Chain Model (Porter)
Primary activities– Inbound logistics– Outbound logistics– Operations– Marketing and sales– Service
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Porter’s Value Chain
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Supply Chain
Support activities– Firm’s infrastructure (accounting, finance,
etc.)– Human resource management– R&D– Procurement
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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 and MRP II– 1960s and later– Integrated parts of supply chain but not all
ERP– 1990s– More complete integration of 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 HUGE ORGANIZATIONAL
COMMITMENT
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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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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