DSSpart-9

Decision Support System

Benefits of DSS


• Executive involvement in development of DSS• Translating DSS into work is a challenge• May fail if do not meet individual need of executive• Managers are still forced to conform to technology capability

rather than being able to tailor it to their own need (Mintzberg)• To many IS has been developed except for executives• EISs are designed to meet the executive needs

• Some EIS have worked well

Issues about DSS


• Why a company should switch to ISS if traditional system have worked for years ?

• ESS gives immediate access to needed information• Rosabeth Moss Kanter:

• Information quality requires focusing on what’s important, not what’s available• Stored information represent potential, but is useless Unless it can be actively communicated to those who need it

Why of DSS


• Begin 1983, sponsored by corp. chief of staff Paul Allaire• Kenneth Soha: director of IS group• David T. Kearns (Xerox CEO)

• IT has major role in reducing cost of staff at HQ and increase effectiveness• Become the executive sponsor of ESS• Hired a consultant, Jim Carlisle, to build their own system

• ESS built in 1983, serve 400 people in corporate HQ

Xerox: Started at the Top


• Links strategic planning with e-mail• Changing the way in communication• By 1988, annual budged for ESS operation $1 million

• Evolutionary development• Start at the top, to prove how it can help executive to do their job• Technology is cheap than people

Xerox: Started at the Top


• Estimation: reduce 5 % of HQ staff in three years• Key of Success

• ESS improve communication and planning process• Extended management meeting monthly:

• Material is prepared and can be analyzed earlier• Management data book:

• Information about sales,,personnel, finance,etc.• ESS support the executive to perform better task

• Improve planning process and reduce time• Contain new resource management statement a summary of each business unit’s plan

Benefits of ESS at Xerox


• Develop the business priority list• Not fewer meetings, but more productive• Information become available before the meeting• Benefit for executive that must travel: access and communicate• Flow of information between people in the company

Benefits of ESS at Xerox


• William Smithburg, CEO Quaker Oats:• Enhance information flow to enhance decision making

• All business live and die with information• Begin in 1982 : Dow Jones service and The Source• To pick up all needed information• The problem : executive wants to describe the end result• Involvement of executive in the design and determine the kinds of information

Vision and Knowledge at Quaker


• Use ESS more for environmental scanning than for Management and control• Features of ESS:

• Compression of information : to focus on the broad issues• Freshness of information: financial data

Benefits• Increase productivity• Reduce time to get needed information• Improve working relationship between operating units• Make the data talk : through presentation, super chart

Vision and Knowledge at Quaker


• Better information = competitive asset, become part of the company culture• The better executives understand the system and the better IS understand the executives, the better they can work together• Investment on decision:

• To get what useful and necessary• Don’t need a Roll Royce to go to the grocery store

Benefits of ESS at Quaker


• Finn Carpersen, CEO at Beneficial• Send back a hard copy memo• Trickledown and trickleup ESS implementation was unacceptable• Personal used of ESS by all company’s executives is key for functioning ESS• Speed up of communication

• CEO jobs:• Maintain communication with individual in the company• Move decision through committees, meeting• Implement decision

A Million Dollar Saving at Beneficial


• Increase reliability and accuracy of information• SM for senior management

• Rare used outside the office due connection problem• Useful in unanticipated way

• Information from a broker: multiple people can be reached• Instant response

How It works ?• Make a better decision using Lexis and Nexis on-line• Eliminate the wasting time, unproductive meeting• Meeting become more effective due to ESS

A Million Dollar Saving at Beneficial


• Soft dollar benefits: increase effectiveness and professionalism• Change the way of company operate, organize or structure their important function

• In many instances only automated activities others fundamentally• Increase executive’s productivity tremendously• Some executives have the system at home • Improve access of information and communication between executives

ESS at Beneficial: How It Works ?


• Real saving• Decrease the number of secretaries• Deloitte Haskin & Sell:

• 1 Million Dollar saving in the 1st year• A nine-month pay back for ESS investment

• Expand the system: Bencom III• Will change the way to do business in the company• Old fashion persuasion is still necessary• To push manager to adopt the system even faster• Opponent learned to use it effectively

ESS at Beneficial: How It Works ?


ASSESSING EIS BENEFITS


Industry•Finance, insurance and real estate•Manufacturing•Government agencies•Transportation, communication, utilities•Services (hotel, personal, utilities)•Mining•Agriculture, forestry, fishing•Other •Total

Percent28.825.813.712.1

4.61.61.6

12.1100.0

Responding Company by Industry

72 companies


ExpectedBenefits

Realized Benefits

•More timely information•Faster access to information•More accurate information•More relevant information•More concise information•Better access to soft information•Improved communication•Improved access to external data•Better environmental scanning•More competitive information•Improved executive performance•Save executive time

4.584.793.813.853.942.483.672.421.832.273.313.74

3.984.293.533.403.672.363.102.341.562.032.612.98

Expected and Realized Benefits of EIS

Scale 1 to 5

Benefit


ExpectedBenefits

Realized Benefits

•Increase span of control•Improved planning•Improved decision making•Better problem understanding•Better development of alternatives•Improved presentation of data•Cost saving•Less paper•Support TQM program•More responsive to changing customer needs•Support downsizing of organization

2.563.393.973.752.894.222.443.422.232.551.95

2.192.603.032.922.414.052.603.171.982.111.79

Expected and Realized Benefits of EIS

Scale 1 to 5

Benefit


Prior implementation

AfterImplementation

•Costs and hard benefits were determined•Cost and intuitive feeling for the benefits were determined

•Costs only were determined•Benefits only were determined•Neither costs nor benefits were determined•Benefits/ Costs total

13.8

58.53.45.2

19.0100.0

7.4

40.75.65.640.7100.00

Benefit/ Cost Analysis

Percent

Analysis method


•A comprehensive evaluation can renew interest and support for IES•A comprehensive evaluation can identify which application deliver value and where enhancement or new application are needed•Both usage statistics and user interviews are needed•Focus attention on mission-critical applications•EIS benefit should be assessed at the level at which they occur•Quantity benefits as much as possible and record intangible benefits

Conoco’s : Lesson Learned


•Discount benefits by an amount commensurate to their degree of uncertainty• Do not confuse the size or complexity of an application with its significance•The assessment should be as open and objective as possible•Keep the interview structure relatively open•The interview should be conducted by people who Understand the business•A comprehensive assessment requires considerable time and effort•The assessment should be on-going process•There is no single way to evaluate an EIS

Conoco’s : Lesson Learned


•A committed senior executive sponsor• Involvement of management in the creation• Provide encouragement for the development

•Carefully defined system requirements• Tailored to meet information needs of user• Ease to use, Fast response time• Updating: easy and quick

•Carefully defined information requirements• Relevant information• Adding, modifying, deleting displays as needed

KEYS TO THE SUCCESS MIDS


•A team approach to system development• Combination of staff background, • Complementary, synergy

•An evolutionary development approach• Expanded and evolved according to the information needs

•Careful computer hardware and software selection• Early stage: develop software in-house• Later stage: use commercial software

KEYS TO THE SUCCESSMIDS

2424

– Augment decision maker’s knowledge managementabilities

– Allow decision maker to solve larger and morecomplex problems

– Make decision making faster and more reliable– Stimulate decision maker’s thoughts about a problem

& reveal new ways of thinking– Support decision maker’s decision/position with

computational evidence– Organizational competitive advantage

DSS Benefits

2525

– DSS do not replace human creativity and experience– DSS is constrained by the knowledge in its databases– DSS is constrained by the models and processes in its

model base and programming– DSS is limited by its computer platform– Decision makers are required to communicate with

the DSS in its language or interface mode– DSS are often narrow in their area of application

DSS Limitations


END

DSSpart-9

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