Chapter 8 Enterprise Decision Support Systems Decision Support

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Chapter 8 Enterprise Decision Support Systems Decision Support System by Simulation Model (Ajarn Chat

Chapter 8 Enterprise Decision Support Systems Decision Support System by Simulation Model (Ajarn Chat Chuchuen) 1

Enterprise Decision Support Systems DSS to provide enterprise-wide support n Executives n Many decision

Enterprise Decision Support Systems DSS to provide enterprise-wide support n Executives n Many decision makers in different locations n Enterprise Resource Planning (ERP) systems n Decision Support System by Simulation Model (Ajarn Chat Chuchuen) 2

Evolution of Executive and Enterprise Information Systems DSS and ODSS n 1980 s: Top

Evolution of Executive and Enterprise Information Systems DSS and ODSS n 1980 s: Top execs get Executive Information Systems n 1995+’s: Move to everybody’s information systems and enterprise information systems n Definitions follow n Decision Support System by Simulation Model (Ajarn Chat Chuchuen) 3

Executive Information System (EIS) A computer-based system that serves the information needs of top

Executive Information System (EIS) A computer-based system that serves the information needs of top executives n Provides rapid access to timely information and direct access to management reports n Very user-friendly, supported by graphics n Provides exceptions reporting and "drilldown" capabilities n Easily connected to the Internet n Drill down n Decision Support System by Simulation Model (Ajarn Chat Chuchuen) 4

Executive Support System (ESS) Comprehensive support system that goes beyond EIS to include Communications

Executive Support System (ESS) Comprehensive support system that goes beyond EIS to include Communications n Office automation n Analysis support n Intelligence n Decision Support System by Simulation Model (Ajarn Chat Chuchuen) 5

Enterprise Information System Corporate-wide system n Provides holistic information n From a corporate view

Enterprise Information System Corporate-wide system n Provides holistic information n From a corporate view n Part of enterprise resource planning (ERP) systems n For business intelligence n Leading up to enterprise information portals and knowledge management systems n Decision Support System by Simulation Model (Ajarn Chat Chuchuen) 6

Executives’ Role and Their Information Needs n Decisional Executive Role (2 Phases) 1. Identification

Executives’ Role and Their Information Needs n Decisional Executive Role (2 Phases) 1. Identification of problems and/or opportunities 2. The decision of what to do about them n n Flow chart and information flow (Figure 8. 1) Use phases to determine executives’ information needs Decision Support System by Simulation Model (Ajarn Chat Chuchuen) 7

The Decision Making Process of Executives (Decision Role) External environment Internal environment Scanning Evaluation

The Decision Making Process of Executives (Decision Role) External environment Internal environment Scanning Evaluation of information Qualitative analysis No Phase II Quantitative analysis Interpretation: Is there a problem (opportunity)? Yes Input for decision making Decision: What to do about the problem Decision Support System by Simulation (opportunity) Model (Ajarn Chat Chuchuen) 8

Methods for Finding Information Need n Wetherbe's Approach 1. Structured Interviews n n n

Methods for Finding Information Need n Wetherbe's Approach 1. Structured Interviews n n n IBM's Business System Planning (BSP) Critical Success Factors (CSF) Ends/Means (E/M) Analysis 2. Prototyping n Watson and Frolick's Approach Asking (interview approach) Deriving the needs from an existing information system ¨ Synthesis from characteristics of the systems ¨ Discovering (Prototyping) ¨ ¨ n n Ten methods Other Methods Decision Support System by Simulation Model (Ajarn Chat Chuchuen) 9

Executive Information System (EIS) Characteristics and Benefits Quality of information n User interface n

Executive Information System (EIS) Characteristics and Benefits Quality of information n User interface n Technical capability provided n Benefits n Decision Support System by Simulation Model (Ajarn Chat Chuchuen) 10

Executive Information System (EIS) Characteristics Drill down n Critical success Factors (CSF) n Status

Executive Information System (EIS) Characteristics Drill down n Critical success Factors (CSF) n Status access n Analysis n Exception reporting n Colors and audio n Navigation of information n Communication n Decision Support System by Simulation Model (Ajarn Chat Chuchuen) 11

Critical Success Factors (CSF) Monitored by five types of information 1. 2. 3. 4.

Critical Success Factors (CSF) Monitored by five types of information 1. 2. 3. 4. Key problem narratives Highlight charts Top-level financials Key factors (key performance indicators (KPI)) 5. Detailed KPI responsibility reports Decision Support System by Simulation Model (Ajarn Chat Chuchuen) 12

Critical Success Factors (CSF) Typical Key Performance Indicators Profitability measures for each department, product,

Critical Success Factors (CSF) Typical Key Performance Indicators Profitability measures for each department, product, region, comparisons among departments and products and with competitors n Financial ratios, balance sheet analysis, cash reserve position, ROI n Marketing Market shares, advertisement analysis, product pricing, weekly sales results n Decision Support System by Simulation Model (Ajarn Chat Chuchuen) 13

Comparing and Integrating EIS and DSS n Tables 8. 2 and 8. 3 compare

Comparing and Integrating EIS and DSS n Tables 8. 2 and 8. 3 compare the two systems ¨ Table n 8. 2 - DSS definitions related to EIS 8. 3 - Comparison of EIS and DSS EIS is part of decision support Decision Support System by Simulation Model (Ajarn Chat Chuchuen) 14

Integrating EIS and Group Support Systems EIS vendors - easy interfaces with GSS n

Integrating EIS and Group Support Systems EIS vendors - easy interfaces with GSS n Some EIS built in Lotus Domino / Notes n Comshare Inc. and Pilot Software, Inc. Lotus Domino/Notes-based enhancements and Web/Internet/Intranet links n Decision Support System by Simulation Model (Ajarn Chat Chuchuen) 15

Traditional EIS Software n Major Commercial EIS Software Vendors ¨ Comshare Inc. (www. comshare.

Traditional EIS Software n Major Commercial EIS Software Vendors ¨ Comshare Inc. (www. comshare. com) ¨ Pilot Software Inc. (www. pilotsw. com) n Application Development Tools ¨ In-house components ¨ Comshare Commander tools ¨ Pilot Software’s Command Center Pilot Decision Support Suite Decision Support System by Simulation Model (Ajarn Chat Chuchuen) Plus and 16

Multidimensional Analysis Easy to develop an EIS in an OLAP system n Most are

Multidimensional Analysis Easy to develop an EIS in an OLAP system n Most are Web-ready n Can tap into data in a data warehouse via the Web n Use advanced visualization tools n Decision Support System by Simulation Model (Ajarn Chat Chuchuen) 17

Representative OLAP / Multidimensional Analysis Packages n n n n n Brio. Query (Brio

Representative OLAP / Multidimensional Analysis Packages n n n n n Brio. Query (Brio Technology Inc. ) Business Objects (Business Objects Inc. ) Decision Web (Comshare Inc. ) Data. Fountain (Dimensional Insight Inc. ) DSS Web (Micro. Strategy Inc. ) Focus Fusion (Information Builders Inc. ) Info. Beacon Web (Platinum Technology Inc. ) Oracle xpress Server (Oracle Corporation) Decision Support System by Simulation Pilot Internet Publisher (Pilot Software Inc. ) Model (Ajarn Chat Chuchuen) 18

Including Soft Information in EIS Soft information is Fuzzy n Unofficial n Intuitive n

Including Soft Information in EIS Soft information is Fuzzy n Unofficial n Intuitive n Subjective n Nebulous n Implied n Vague n Decision Support System by Simulation Model (Ajarn Chat Chuchuen) 19

Soft Information Used in Most EIS Predictions, speculations, forecasts, estimates (78. 1%) n Explanations,

Soft Information Used in Most EIS Predictions, speculations, forecasts, estimates (78. 1%) n Explanations, justifications, assessments, interpretations (65. 6%) n News reports, industry trends, external survey data (62. 5%) n Schedules, formal plans (50. 0%) n Opinions, feelings, ideas (15. 6%) n Rumors, gossip, hearsay (9. 4%) n Decision Support System by Simulation Model (Ajarn Chat Chuchuen) 20

Including Soft Information in EIS Soft Information Enhances EIS Value n Intelligent Agents n

Including Soft Information in EIS Soft Information Enhances EIS Value n Intelligent Agents n New Feeds n Decision Support System by Simulation Model (Ajarn Chat Chuchuen) 21

Organizational DSS (ODSS) Hackathorn and Keen (1981) Organizational decision support focuses on an organizational

Organizational DSS (ODSS) Hackathorn and Keen (1981) Organizational decision support focuses on an organizational task or activity involving a sequence of operations and actors n Each individual's activities must mesh closely with other people's work n Computer support is for n ¨ Improving communication ¨ Problem solving and coordination Decision Support System by Simulation Model (Ajarn Chat Chuchuen) 22

Organizational DSS (ODSS) Definitions n n A combination of computer and communication technology designed

Organizational DSS (ODSS) Definitions n n 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. Decision set Support of tools et al. , 1992) System by(Carter Simulation Model (Ajarn Chat Chuchuen) 23

Organizational DSS (ODSS) Definitions n n A distributed decision support system (DDSS). Not a

Organizational DSS (ODSS) Definitions n n 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) Decision Support System by Simulation Model (Ajarn Chat Chuchuen) 24

Organizational DSS (ODSS) Common Characteristics )George, 1991( n n n Focus is on an

Organizational DSS (ODSS) Common Characteristics )George, 1991( n n n 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 Decision Support System by Simulation Model (Ajarn Chat Chuchuen) 25

Supply and Value Chains and Decision Support n Supply chain: ¨ (originally) flow of

Supply and Value Chains and Decision Support n Supply chain: ¨ (originally) flow of materials from sources to internal use n Demand chain: ¨ flow from inside to customers Decision Support System by Simulation Model (Ajarn Chat Chuchuen) 26

Supply Chain The flow of materials, information, and services from raw material suppliers through

Supply Chain The flow of materials, information, and services from raw material suppliers through factories and warehouses to the end customers n Includes the organizations and processes that create and deliver value to the end customers n Decision Support System by Simulation Model (Ajarn Chat Chuchuen) 27

Supply Chain Management )SCM( To deliver an effective supply chain and do it effectively

Supply Chain Management )SCM( To deliver an effective supply chain and do it effectively n To plan, organize, and coordinate the supply chain’s activities n Decision Support System by Simulation Model (Ajarn Chat Chuchuen) 28

Supply Chain Management )SCM( Benefits Reduction in uncertainty and risks in the supply chain

Supply Chain Management )SCM( Benefits Reduction in uncertainty and risks in the supply chain n Positively affect n ¨ inventory levels ¨ cycle time ¨ processes ¨ customer service n Increase profitability Decision Support System by Simulation Model (Ajarn Chat Chuchuen) 29

Supply Chain Components Upstream n Internal supply chain n Downstream n Involves product life

Supply Chain Components Upstream n Internal supply chain n Downstream n Involves product life cycle activities Example (Figure 8. 2) Decision Support System by Simulation Model (Ajarn Chat Chuchuen) 30

Supply Chain Related to the Value Chain Model (Porter) n Value chain is a

Supply Chain Related to the Value Chain Model (Porter) n Value chain is a series of activities that includes n ¨ Inbound logistics ¨ Warehousing & storage ¨ Production ¨ Finished inventory storage ¨ Outbound logistics ¨ Marketing & sales ¨ Customer service Decision Support System by Simulation Model (Ajarn Chat Chuchuen) 31

The Value Chain of a Manufacturing Company Decision Support System by Simulation Model (Ajarn

The Value Chain of a Manufacturing Company Decision Support System by Simulation Model (Ajarn Chat Chuchuen) 32

Supply Chain Problems Uncertainty in the demand forecast n Uncertainty in delivery times n

Supply Chain Problems Uncertainty in the demand forecast n Uncertainty in delivery times n Quality problems n Poor customer service n High inventory costs n Low revenue n Extra costs n Decision Support System by Simulation Model (Ajarn Chat Chuchuen) 33

Supply Chain Solutions to Problems Outsourcing n Buy, not make n Configure optimal shipping

Supply Chain Solutions to Problems Outsourcing n Buy, not make n Configure optimal shipping plans n Optimize purchasing n Strategic partnerships with suppliers n Just-in-time delivery of purchases n Decision Support System by Simulation Model (Ajarn Chat Chuchuen) 34

Supply Chain Solutions to Problems Reduce intermediaries n Reduce lead times/use EDI n Use

Supply Chain Solutions to Problems Reduce intermediaries n Reduce lead times/use EDI n Use fewer suppliers n Improve the supplier-buyer relationships n Build-to-order n Accurate demand by working with suppliers n Decision Support System by Simulation Model (Ajarn Chat Chuchuen) 35

Computerized System MRP n ERP n SCM n Integrating the supply chain Decision Support

Computerized System MRP n ERP n SCM n Integrating the supply chain Decision Support System by Simulation Model (Ajarn Chat Chuchuen) 36

Enterprise Resource Planning (ERP) Objective n integrate all departments and functions across an organization

Enterprise Resource Planning (ERP) Objective n integrate all departments and functions across an organization into a single computer system that can serve the entire enterprise’s needs Decision Support System by Simulation Model (Ajarn Chat Chuchuen) 37

Enterprise Resource Planning (ERP) Software Vendors SAP n Baan n People. Soft n Oracle

Enterprise Resource Planning (ERP) Software Vendors SAP n Baan n People. Soft n Oracle n J. D. Edwards n Computer Associates n Decision Support System by Simulation Model (Ajarn Chat Chuchuen) 38

Enterprise Resource Planning (ERP) Very (VERY!) expensive n 2 nd generation: doing better n

Enterprise Resource Planning (ERP) Very (VERY!) expensive n 2 nd generation: doing better n Early 2000: moving to Web n Will fail if an organization’s business processes do not fit the ERP system’s model n Decision Support System by Simulation Model (Ajarn Chat Chuchuen) 39

Application Service Providers and ERP Outsourcing n ASP: ¨ software vendor who leases ERP-based

Application Service Providers and ERP Outsourcing n ASP: ¨ software vendor who leases ERP-based applications Outsourcing n Now via the Web n Decision Support System by Simulation Model (Ajarn Chat Chuchuen) 40

Corporate (Enterprise) Portals and EIS Integrates internal applications with external applications n Generally via

Corporate (Enterprise) Portals and EIS Integrates internal applications with external applications n Generally via the Web n Can include n ¨ groupware technologies ¨ presentation and customization ¨ publishing and distribution ¨ search ¨ categorization ¨ integration Decision Support System by Simulation Model (Ajarn Chat Chuchuen) 41

Frontline Decision Support Systems n n Process of automating decision processes and pushing them

Frontline Decision Support Systems n n 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) 42