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Chapter 12 Enhancing Decision Making 505

The balanced scorecard framework is thought to be “balanced” because it
causes managers to focus on more than just financial performance. In this view,
financial performance is past history—the result of past actions—and managers
should focus on the things they are able to influence today, such as business
process efficiency, customer satisfaction, and employee training. Once a
scorecard is developed by consultants and senior executives, the next step is
automating a flow of information to executives and other managers for each of
the key performance indicators. There are literally hundreds of consulting and
software firms that offer these capabilities, which are described below. Once
these systems are implemented, they are often referred to as ESS.
Another closely related popular management methodology is business
performance management (BPM). Originally defined by an industry group in
2004 (led by the same companies that sell enterprise and database systems like
Oracle, SAP, and IBM), BPM attempts to systematically translate a firm’s strate-
gies (e.g., differentiation, low-cost producer, market share growth, and scope of
operation) into operational targets. Once the strategies and targets are identified,
a set of KPIs are developed that measure progress towards the targets. The firm’s
performance is then measured with information drawn from the firm’s enter-
prise database systems. BPM uses the same ideas as balanced scorecard but with
a stronger strategy flavor (BPM Working Group, 2004).
Corporate data for contemporary ESS are supplied by the firm’s existing
enterprise applications (enterprise resource planning, supply chain manage-
ment, and customer relationship management). ESS also provide access to
news services, financial market databases, economic information, and whatever
other external data senior executives require. ESS also have significant drill-
down capabilities if managers need more detailed views of data.
Well-designed ESS help senior executives monitor organizational performance,
track activities of competitors, recognize changing market conditions, and
i dentify problems and opportunities. Employees lower down in the corporate
hierarchy also use these systems to monitor and measure business performance
in their areas of responsibility. For these and other business intelligence
systems to be truly useful, the information must be “actionable”—it must be
readily available and also easy to use when making decisions. If users have
difficulty identifying critical metrics within the reports they receive, employee
productivity and business performance will suffer. The Interactive Session on
Management shows how Colgate-Palmolive addressed this problem and helped
its managers make more data-driven, actionable decisions.

GROUP DECISION-SUPPORT SYSTEMS (GDSS)

The DSS we have just described focus primarily on individual decision making.
However, so much work is accomplished in groups within firms that a special
category of systems called group decision-support systems (GDSS) has been
developed to support group and organizational decision making.
A GDSS is an interactive computer-based system for facilitating the solution
of unstructured problems by a set of decision makers working together as a
group in the same location or in different locations. Collaboration systems
and Web-based tools for videoconferencing and electronic meetings described
earlier in this text support some group decision processes, but their focus is
primarily on communication. GDSS, however, provide tools and technologies
geared explicitly toward group decision making.
GDSS-guided meetings take place in conference rooms with special hardware
and software tools to facilitate group decision making. The hardware includes

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