Chapter 8
Models and Decision Support
The Strategic
Management of
Information
Technology
Transaction Processing
System
Input Output Process
Information
Communication
Systems Development
Software Design
Model
? Specific Way of Looking at the World
– specific and concrete
– mathematical equations
– subjective descriptions
– financial models
– consumer models
– management models
? Assist in Understanding More Complex Issues
– enable comparison between model and actual
results
? Some Processes Defy Modeling
– Too much variability or complexity
Uses of Models
? Optimization
? Prediction
? Description
? Simulation
Dangers of Models
? Number of Alternatives
? Expense
? Time
? Difficulty to Mirror Reality
Biases in Decision-Making
? Acquisition (input)
? Processing
? Output
? Feedback
Re-Engineering
? Analyze and Model the Entire Company
? Make Major Changes to the Operation
of the Business
? Small Changes over Time can Actually
cause a business to be misaligned with
its Target
Object-Oriented Models
? Specify Attributes and Functions of Each Object
– Add New Attributes to Portray Actual Movement
? Capacity
? Time Required to Complete a Job
? Cost
? Physical Objects
– Customer
– Order Entry Department
– Inventory
– Shipping
? Data Objects
– Purchase Orders
– Routing Slips
– Parts Lists
– Shipping Schedules
– Invoices
Operations Problems
? Operations Problems
– Well-Defined,Easy to Solve
– Transaction Processing Systems Collect
the Data
– Decision Affects Business for a Day or Two
Decision Support Systems
? Database
– Collects
? Model
– Evaluates
– Model should Directly Access Database
– Different Brands of Software are Used for
Each Component
? Output
– Produces
– Graphs
Input and Output Variables
? Input Variables
– To Receive Data
– Quantities of Raw Materials
– Labor Hours
– Money Invested in Capital Equipment
– Identified by Statistical Techniques
? Process Data
? Output Variables
– Profit
– Quantity Produced
– Quality Ratings
Software and Models
? Generic Modeling Tools
? SPSS or SAS
? Decision Support System
? Database Management System
? Spreadsheets
GroupWare
? Group Decision Support System
? Lotus Notes
? Executive Information System
– connected to transaction processing
system
Enterprise Wide
Decision Support Systems
? Data Warehouse
– focuses on single large server or mainframe that
provides consolidation point for enterprise data
from diverse production systems
– architecture,usually based on relational database
management system,used to maintain historical
data that has been extracted from the operational
data store
? Data Mart
– focuses exclusively on serving a distinct
community of knowledge workers
Steps to a Data Warehouse
? Determine needs of end users and model data that
the data warehouse should contain
? Identify necessary data sources from among the
many corporate data sources
? Analyze corporate data sources in depth,
documenting functions and processes
? Use information about corporate data sources to
decide the transformation/integration logic
? Develop the metadata,which identifies the source
data,describes the transformation and integration,
and defines the data model
? Construct the physical data-warehouse database;
populate Warehouse from various sources
? Generate necessary end-user applications
Data Warehouse
? Not Repositories for all Corporate Data
? Not Separate,Read-Only Data Stores
? Do not Require Relational Databases
? Not always big
Four Processes for the Delivery
of Decision Support Data
? Extract all data relevant to the business decision-
making processes of groups of knowledge workers
for the specific production systems responsible for
capturing that information,
? Store the resulting data sets in one location,the data
warehouse,
? Develop a unique cut or series of cuts of the data
warehouse for each knowledge worker community,
? Supply the decision-support tools appropriate to the
knowledge workers’ style of computing,
OODBMS
? An object oriented database management
system,(OODBMS),is the integration of
the object oriented paradigm and
database management systems,
OODBMS
? The integration of the object oriented
paradigm and database management
systems,
– In programming languages,where the object
oriented concepts evolved from encapsulation and
information hiding of abstract data types,
– In artificial intelligence within Minksy’s,frame”
concept in knowledge representation,
– In databases,where research in semantic data
models led to object oriented concepts,
Objects and Classes
? Each real world entity is modeled by an
“object.” Each object has existence
independent of its value and is assigned an
object identifier,(concept of,object identity”),
Each object has a set of instance attributes
(instance variables) and methods,Flow
control in object oriented systems comes from
sending messages between objects,Data
abstraction prevents an object’s data from
being directly manipulated,
Classes
Class Inheritance,
? A,class” is a group of objects that share the
same structure and behavior,
Overloading,
? In overloading the same operator is allowed
to present multiple operations on different
data types,
Overriding,
? An operation of most general type is defined
in the hierarchy lattice,but redefined in some
subclasses,overriding the default inheritance
of the general type,
– The integration of the object oriented paradigm
and database management systems,
– First,in programming languages,where the object
oriented concepts evolved from encapsulation and
information hiding of abstract data types,
– Then,in artificial intelligence with Minksy’s,frame”
concept in knowledge representation,
– Lastly,in databases,where research in semantic
data models led to object oriented concepts,
Object-Oriented Database
Management System
Class Inheritance,
? A,class” is a group of objects that share the
same structure and behavior,
Overloading,
? In overloading the same operator is allowed
to present multiple operations on different
data types,
Overriding,
? An operation of most general type is defined
in the hierarchy lattice,but redefined in some
subclasses,overriding the default inheritance
of the general type,
Management Processes
Feedback
? Long feedback cycles
?Limited understanding of
relationships among
measures
?Sequential & functional
?Incomplete feedback;
limited to no feedforward
Personnel Control Action Control Results Control
? Rigid contracts with
suppliers
?Rigid job descriptions,
hiring criteria &
standardized performance
appraisals for employees
?Process & job
segmentation
?Rigid procedures
& policies
?Direct supervision
?Primarily financial
?Internally oriented
?Functional
Management Processes
Feedback
?Short feedback cycles
?Relationships among measures preserved
?Interactive & interfunctional
Process Control
Information-Enabled
?Process & work integration
?Real-time access to a broad set of process
performance
?Interfunctional & interorganizational measures
Boundaries and Values
?Clearly defined and communicated
?Consistently enforced
?Early warning systems
?Action control for high risk operations
Output Control
?Broad set of
internal & external
measures
?Benchmarking
?Interfunctional &
interorganizational
Feedforward
?Improved understanding of relationships among
inputs,process,and outputs
?Predictive models/causal models
?Interactive scenario planning
Input Control
(includes Personnel
Control)
?Supplier
certification
?Employee
certification
(advanced degrees,
professional) &
performance
monitoring
?Formal business
intelligence systems
Management Processes
Feedback
?Short feedback cycles
?Relationships among measures preserved
?Interactive & interfunctional
Process Control
Information-Enabled
?Process & work integration
?Real-time access to a broad set of process
performance
?Interfunctional & interorganizational measures
Boundaries and Values
?Clearly defined and communicated
?Consistently enforced
?Early warning systems
?Action control for high risk operations
Output Control
?Broad set of
internal & external
measures
?Benchmarking
?Interfunctional &
interorganizational
Feedforward
?Improved understanding of relationships among
inputs,process,and outputs
?Predictive models/causal models
?Interactive scenario planning
Defining Direction Executing and Adapting Sustaining Value
Environmental context
and resources
Purpose,core
values,and
core
competencies
Strategy
Organizational
context,resources,
and leadership
Coordinating
mechanisms
Units,
groupings
Incentives
Formal and
informal
power
Authority
Information
Boundary
systems
Management
processes
Operating
processes
People
Technology
Work
Control
Values and
Behavior
Process Performance
?Time
?Quality
?Cost
?Flexibility
?Innovation potential
Stakeholder
Satisfaction
?Employees/partners
?Customers
?Shareholders
?Society
Benchmarks
?Best of class
?Best of breed
?Reputation
Other
?Sustainability
?Resiliency
?Flexibility
Hierarchy
(Control)
Entrepreneurial
(Autonomy)
Complex
Organization
Simple
Stable Certain
Environment
Dynamic
Uncertain
SCOPE OF CHANGE
Incremental Change to a Process or
Function
Intrafunctional Interfunctional Interorganizational
Radical Change to Organizational
or Interorganizational Strategy,
Structure,Process,and Culture
LOW
Urgency
of
Stimulus
HIGH
Episode #3
1991-1993
Team-based
Organization
Redesign
1988-1991
Business Process
Redesign Within
Plant
Episode #2
1985-1988
Corporatewide
Reorganization
Episode #1
SCOPE OF CHANGE
Incremental Change to a Process or
Function
Intrafunctional Interfunctional Interorganizational
Radical Change to Organizational
or Interorganizational Strategy,
Structure,Process,and Culture
LOW
Urgency
of
Stimulus
HIGH
Episode #2
1988-1990
Quality Mgmt,
Episode #3
1991-1992
Business Process
Reengineering
1992-1993
Bus,Unit #1
Restructuring
1991-1992
SBU Restructuring
Episode # 1
1986-1988
Focused Redesign/Key
Leveraged Areas
1985
Post-takeover Restructuring
SCOPE OF CHANGE
Incremental Change to a Process or
Function
Intrafunctional Interfunctional Interorganizational
Radical Change to Organizational
or Interorganizational Strategy,
Structure,Process,and Culture
LOW
Urgency
of
Stimulus
HIGH
1978-1980
Ideal Sales
Org,Study &
Ideal Mfg,
Org,Study
1983-1986
Redesign of
Field Sales,
Distribution
& Mfg,
(separate
initiatives)
Episode # 1
1991-1992
EDI Initiatives
1987-1988
Business
Process
Redesign
1990-1993
Area Business
Team Reorganized
Episode # 2
Episode # 3
Models and Decision Support
The Strategic
Management of
Information
Technology
Transaction Processing
System
Input Output Process
Information
Communication
Systems Development
Software Design
Model
? Specific Way of Looking at the World
– specific and concrete
– mathematical equations
– subjective descriptions
– financial models
– consumer models
– management models
? Assist in Understanding More Complex Issues
– enable comparison between model and actual
results
? Some Processes Defy Modeling
– Too much variability or complexity
Uses of Models
? Optimization
? Prediction
? Description
? Simulation
Dangers of Models
? Number of Alternatives
? Expense
? Time
? Difficulty to Mirror Reality
Biases in Decision-Making
? Acquisition (input)
? Processing
? Output
? Feedback
Re-Engineering
? Analyze and Model the Entire Company
? Make Major Changes to the Operation
of the Business
? Small Changes over Time can Actually
cause a business to be misaligned with
its Target
Object-Oriented Models
? Specify Attributes and Functions of Each Object
– Add New Attributes to Portray Actual Movement
? Capacity
? Time Required to Complete a Job
? Cost
? Physical Objects
– Customer
– Order Entry Department
– Inventory
– Shipping
? Data Objects
– Purchase Orders
– Routing Slips
– Parts Lists
– Shipping Schedules
– Invoices
Operations Problems
? Operations Problems
– Well-Defined,Easy to Solve
– Transaction Processing Systems Collect
the Data
– Decision Affects Business for a Day or Two
Decision Support Systems
? Database
– Collects
? Model
– Evaluates
– Model should Directly Access Database
– Different Brands of Software are Used for
Each Component
? Output
– Produces
– Graphs
Input and Output Variables
? Input Variables
– To Receive Data
– Quantities of Raw Materials
– Labor Hours
– Money Invested in Capital Equipment
– Identified by Statistical Techniques
? Process Data
? Output Variables
– Profit
– Quantity Produced
– Quality Ratings
Software and Models
? Generic Modeling Tools
? SPSS or SAS
? Decision Support System
? Database Management System
? Spreadsheets
GroupWare
? Group Decision Support System
? Lotus Notes
? Executive Information System
– connected to transaction processing
system
Enterprise Wide
Decision Support Systems
? Data Warehouse
– focuses on single large server or mainframe that
provides consolidation point for enterprise data
from diverse production systems
– architecture,usually based on relational database
management system,used to maintain historical
data that has been extracted from the operational
data store
? Data Mart
– focuses exclusively on serving a distinct
community of knowledge workers
Steps to a Data Warehouse
? Determine needs of end users and model data that
the data warehouse should contain
? Identify necessary data sources from among the
many corporate data sources
? Analyze corporate data sources in depth,
documenting functions and processes
? Use information about corporate data sources to
decide the transformation/integration logic
? Develop the metadata,which identifies the source
data,describes the transformation and integration,
and defines the data model
? Construct the physical data-warehouse database;
populate Warehouse from various sources
? Generate necessary end-user applications
Data Warehouse
? Not Repositories for all Corporate Data
? Not Separate,Read-Only Data Stores
? Do not Require Relational Databases
? Not always big
Four Processes for the Delivery
of Decision Support Data
? Extract all data relevant to the business decision-
making processes of groups of knowledge workers
for the specific production systems responsible for
capturing that information,
? Store the resulting data sets in one location,the data
warehouse,
? Develop a unique cut or series of cuts of the data
warehouse for each knowledge worker community,
? Supply the decision-support tools appropriate to the
knowledge workers’ style of computing,
OODBMS
? An object oriented database management
system,(OODBMS),is the integration of
the object oriented paradigm and
database management systems,
OODBMS
? The integration of the object oriented
paradigm and database management
systems,
– In programming languages,where the object
oriented concepts evolved from encapsulation and
information hiding of abstract data types,
– In artificial intelligence within Minksy’s,frame”
concept in knowledge representation,
– In databases,where research in semantic data
models led to object oriented concepts,
Objects and Classes
? Each real world entity is modeled by an
“object.” Each object has existence
independent of its value and is assigned an
object identifier,(concept of,object identity”),
Each object has a set of instance attributes
(instance variables) and methods,Flow
control in object oriented systems comes from
sending messages between objects,Data
abstraction prevents an object’s data from
being directly manipulated,
Classes
Class Inheritance,
? A,class” is a group of objects that share the
same structure and behavior,
Overloading,
? In overloading the same operator is allowed
to present multiple operations on different
data types,
Overriding,
? An operation of most general type is defined
in the hierarchy lattice,but redefined in some
subclasses,overriding the default inheritance
of the general type,
– The integration of the object oriented paradigm
and database management systems,
– First,in programming languages,where the object
oriented concepts evolved from encapsulation and
information hiding of abstract data types,
– Then,in artificial intelligence with Minksy’s,frame”
concept in knowledge representation,
– Lastly,in databases,where research in semantic
data models led to object oriented concepts,
Object-Oriented Database
Management System
Class Inheritance,
? A,class” is a group of objects that share the
same structure and behavior,
Overloading,
? In overloading the same operator is allowed
to present multiple operations on different
data types,
Overriding,
? An operation of most general type is defined
in the hierarchy lattice,but redefined in some
subclasses,overriding the default inheritance
of the general type,
Management Processes
Feedback
? Long feedback cycles
?Limited understanding of
relationships among
measures
?Sequential & functional
?Incomplete feedback;
limited to no feedforward
Personnel Control Action Control Results Control
? Rigid contracts with
suppliers
?Rigid job descriptions,
hiring criteria &
standardized performance
appraisals for employees
?Process & job
segmentation
?Rigid procedures
& policies
?Direct supervision
?Primarily financial
?Internally oriented
?Functional
Management Processes
Feedback
?Short feedback cycles
?Relationships among measures preserved
?Interactive & interfunctional
Process Control
Information-Enabled
?Process & work integration
?Real-time access to a broad set of process
performance
?Interfunctional & interorganizational measures
Boundaries and Values
?Clearly defined and communicated
?Consistently enforced
?Early warning systems
?Action control for high risk operations
Output Control
?Broad set of
internal & external
measures
?Benchmarking
?Interfunctional &
interorganizational
Feedforward
?Improved understanding of relationships among
inputs,process,and outputs
?Predictive models/causal models
?Interactive scenario planning
Input Control
(includes Personnel
Control)
?Supplier
certification
?Employee
certification
(advanced degrees,
professional) &
performance
monitoring
?Formal business
intelligence systems
Management Processes
Feedback
?Short feedback cycles
?Relationships among measures preserved
?Interactive & interfunctional
Process Control
Information-Enabled
?Process & work integration
?Real-time access to a broad set of process
performance
?Interfunctional & interorganizational measures
Boundaries and Values
?Clearly defined and communicated
?Consistently enforced
?Early warning systems
?Action control for high risk operations
Output Control
?Broad set of
internal & external
measures
?Benchmarking
?Interfunctional &
interorganizational
Feedforward
?Improved understanding of relationships among
inputs,process,and outputs
?Predictive models/causal models
?Interactive scenario planning
Defining Direction Executing and Adapting Sustaining Value
Environmental context
and resources
Purpose,core
values,and
core
competencies
Strategy
Organizational
context,resources,
and leadership
Coordinating
mechanisms
Units,
groupings
Incentives
Formal and
informal
power
Authority
Information
Boundary
systems
Management
processes
Operating
processes
People
Technology
Work
Control
Values and
Behavior
Process Performance
?Time
?Quality
?Cost
?Flexibility
?Innovation potential
Stakeholder
Satisfaction
?Employees/partners
?Customers
?Shareholders
?Society
Benchmarks
?Best of class
?Best of breed
?Reputation
Other
?Sustainability
?Resiliency
?Flexibility
Hierarchy
(Control)
Entrepreneurial
(Autonomy)
Complex
Organization
Simple
Stable Certain
Environment
Dynamic
Uncertain
SCOPE OF CHANGE
Incremental Change to a Process or
Function
Intrafunctional Interfunctional Interorganizational
Radical Change to Organizational
or Interorganizational Strategy,
Structure,Process,and Culture
LOW
Urgency
of
Stimulus
HIGH
Episode #3
1991-1993
Team-based
Organization
Redesign
1988-1991
Business Process
Redesign Within
Plant
Episode #2
1985-1988
Corporatewide
Reorganization
Episode #1
SCOPE OF CHANGE
Incremental Change to a Process or
Function
Intrafunctional Interfunctional Interorganizational
Radical Change to Organizational
or Interorganizational Strategy,
Structure,Process,and Culture
LOW
Urgency
of
Stimulus
HIGH
Episode #2
1988-1990
Quality Mgmt,
Episode #3
1991-1992
Business Process
Reengineering
1992-1993
Bus,Unit #1
Restructuring
1991-1992
SBU Restructuring
Episode # 1
1986-1988
Focused Redesign/Key
Leveraged Areas
1985
Post-takeover Restructuring
SCOPE OF CHANGE
Incremental Change to a Process or
Function
Intrafunctional Interfunctional Interorganizational
Radical Change to Organizational
or Interorganizational Strategy,
Structure,Process,and Culture
LOW
Urgency
of
Stimulus
HIGH
1978-1980
Ideal Sales
Org,Study &
Ideal Mfg,
Org,Study
1983-1986
Redesign of
Field Sales,
Distribution
& Mfg,
(separate
initiatives)
Episode # 1
1991-1992
EDI Initiatives
1987-1988
Business
Process
Redesign
1990-1993
Area Business
Team Reorganized
Episode # 2
Episode # 3
