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Describe GE Real Estate's business goals and their general processes/operations. Did they satisfy with their business situation? Identify the needs that GE Real Estate improves its business performance and expansion. Describe the business operations and information that need to support by computerized systems. Analyze the requirements for decision making in the business operations.
- GE Real Estate's business goals:
- Getting more profit along with business growth.
- Manage the business through real estate cycles
- Establish a deeper presence in large, underserved countries, including Mexico and in Eastern Europe.
- GE Real Estate's in emerging markets, particularly in India and China.
- GE Real Estate's general processes/operations:
- The Needs of GE Real Estate to improve its business performance and expansion:
- The Business operations and information that need to support by computerized systems:
- The Requirements for decision making in the business operations:
GE Real Estate's main process is to invest and lend loans based on pricing deals. It means providing loans to applicants who want to construct their own building, and investing money on different construction business. So they have to approve and reject loans based on the customer profitability, the security provided by the customer and payback time. They also have to do some Risk Analysis.
Due to the wide spread business all around the world the company should have a good knowledge of the profitability of customers. Also they need to work on to estimate the profit of the customers, local economic conditions and macro economic conditions. To work on different possible scenarios they can work on sensitivity analysis. These things will help to make clear indication of whether to approve or reject loans.
They needed a fast, efficient, accurate way to track the performance of the properties they were financing. So the CEO decided to develop a DSS.
As mentioned earlier there are two process of GE Real Estate's business, approving and rejecting loans. Both these processes can be done with the help of computerized systems. The loan applications can be reviewed using computer technology much faster. The latest technology is used to have more detailed information of customer's profile. Also the while processing the loan the GE Real Estate can have a track of the past performance of their customer's in graphical view which might be easier to predict the future of the company. Also Business analytics tools can be used to analyze different cases like comparing the new cases with similar type of old cases.
To make a good reliable decision GE Real Estate needs to have a complete profile of the customers like the salary, their business background, the economic situation of the country, global business environment, etc., Some computerized decision support for risk management practices. A tool to do sensitivity and what -if analysis for better decisions. It should also be faster and on real time basis.GE Real Estate with a DSS
Describe the characteristics and capabilities of the DSS offered to GE Real Estate. The benefits brought to the company. Identify the type of the DSS for GE Real Estate. Identify the DSS functionalities that can support for 3 levels of decision problems.
- The characteristics and capabilities of the DSS offered to GE Real Estate:
- The Benefits of DSS:
- The current type of DSS used by GE Real Estate:
- What are the DSS functionalities which support the three levels of decision problems?
The Present DSS of GE Real Estate is a web based system mapped to the Data warehouse which contains the details of the customers and the economical situation through the time which helps to analyze the risk associated with each loan application and to evaluate the loan applicants in terms of profitability. The users of the present DSS are a) Risk sector b) Sales Sector c)Property management d)Finance sector e)Marketing sector where a, b, c are the primary users and d, e are the secondary users.
Risk and Sales sector gain by knowing the profitability of a loan whereas the Property management uses to track the existing loans and inspect the potential threats. Finance department uses the system for forecasting the future profitability and the Marketing department uses the existing DSS finding new markets and the opportunities.
The operational data source used in this DSS gets the data from the business transactions normalizes it and then transforms into the Data Warehouse through star schema. The current Database used by GE Real Estate is DB2, since it has the capabilities to store legacy data, Oracle 11g is offered to GE Real Estate as an update in the software. Ab Initio can be used as a tool for managing data during ETL process.
Dozens of reports are generated in which the most common is the Portfolio review which looks at company holdings in a given market. Portfolio Review highlights trends in occupancy and rental rates, both within the properties and within their overall markets. Another widely used report is Tenant Reporting, which uses publicly available information on large tenants within our properties to identify potential risks/opportunities. There is also a broad ad hoc analytic capability, which is used by our Risk team when analyzing individual loan proposals.
The Present DSS has both concrete and subtle benefits. The Vital benefit is rapid and better decision making. For each requests some costs are saved by avoiding costs on individual manual research. It responds rapidly for the business opportunities and better risk management and property management with better market analysis.
The current DSS used by GE Real Estate is communication driven DSS. Since it uses the Data Warehouse, it can be used only for the internal purposes. The use of this DSS is to conduct meeting, chatting, and instant messaging software within the organization.
- Risk management support by estimating the probability whether it is profitable or not profitable for each individual loan under the present situation.
- Tracking the present approved loan performance and scrutinizing the atmosphere for the fresh upcoming opportunities in the future.
- The Present DSS supports the sensitivity analysis by appraising various situations under potential unconventional situations.
3. You need to help the CEO of GE Real Estate's European division for making decisions. Describe the phases for making the following decision and identify the data, models and technologies needed to support during the process.
"a telemarketing company in Geneva was going out of business, vacating five floors of a building on which GE holds a $US10 million note, the loan is might be at risk, what CEO should do next?"Decision making processes for GE Real Estate:
As relating to Simon's phases of decision making the four main phases of decision making are;
Intelligence phase, Design phase, Choice phase and Implementation phase.
GE Real Estate can be categorized to three major categories:-
- Decisions in order to approve or reject a loan
- Decisions relating to the property management issues and track approved loan requests and also scanning environment for possible threats and opportunities in the future.
- Decisions about pricing different deals as well to determine the interest rate for each loan based on the payback period and also the risk factor involved with it.
In this phase all conditions which relates to decision making along with the information needed for decision making is collected and analyzed.
In this case GE is required to gather more information about the general economical conditions in Geneva, along with relevant information about the company's internal situation itself.Organization objectives:
- Shortening the process of loan request, approving loan decision process and finally closing the contract.
- Providing detailed information.
- Optimize decision for business by making use of computerized support.
- Develop business intelligence data bases.
GE wanted to have a better look at the risk management process. They wanted to know how to maximize the profit from the loans under local and macro economic conditions. There were also some uncertain problems, but enough data was available which was examined through scientific procedures for decision making process.Procedures:
In the case of Telemarketing Company GE has to scan the local and macro Economic conditions. GE should know the seriousness of the risk management process. Under certain scenarios new cases need to be compared with the old cases to get a better solution or to make a suitable decision. For this a DSS with latest IT development is required.
A separate team was formed to achieve the goals. This team worked on managing the project, designing the project, developing the project, quality assurance and testing the project. The best procedures for decision making were taken and implemented through different phases of DSS.
Different types of data were collected for sensitivity analysis, analyzing under local economic condition and analyzing under macroeconomic condition. The data comprises of type of loan, type of property, location of the property, tax rates, customers economic condition etc,. With the support of IT and sales department the top management decided to initiate this project. Also the team needs to analyze the global environment conditions to collect detailed information.Problems related to Data:
Integration of data from various departments is the major problem. The terminology used by one department may be different from the terminology used by another department. Also different departments use different databases; it may affect the proper outcome from the Data Warehouse.Design Phase:
Three types of variables are used in design phase they are
Decision variables, Result variables and uncontrollable variables. These variables are explained in detail below:-
- Decision Variables:
- Result Variables:
- Uncontrollable Variables:
The decision variables which are used to make final decisions are 'yes' for approval of loan and 'no' for rejection of loan. Also there is an interval variable for interest rates imposed by applicants from 0 to 1.
The result variables used are Total profit, Return on Investment (ROI), Liquidity level (Risk management). These show the final outcomes of the GE Real Estate.
The uncontrollable variables are Tax rate, income growth, inflation, current exchange rate, Job growth etc.,
There are two factors which need to be considered while designing the variables, maximizing net profit and tolerating the risk. Result variables are dependent on both decision and uncontrollable variable.Choice Phase:
In this phase GE needs to select the loan requests which have the highest Rate of Return (ROR) and also with lowest risk. Also GE needs to concentrate on the Portfolio subject to the total amount of budget which has been allotted for loans. ROR and risk should be calculated using some techniques like Risk analysis, sensitivity analysis. They can also use probability and statistics theory for uncertainty tests.Sensitivity Analysis:
This technique is used for making decisions under uncontrollable situations. This model should be designed with current economic conditions. The What-If solution can also be used for sensitivity analysis. Highly computerized systems will be very helpful for doing these analyses.Implementation Phase:
Implementation phase is the final phase of the DSS project. This includes the development and outsourcing of all the components which is used for decision making. The model is implemented with it resources all the available resources along with the technology used to process the solution. Highly computerized support for sensitivity analysis and what-if analysis should also be available for the decision maker to make a decision under uncontrollable situation. Finally the reports are generated with summary of the procedures with final solution.
You are required to design a DSS to support GE Real Estate for making decisions. Currently there is DSS used for GE Real Estate. You can design your own DSS based on your justification and knowledge.
- Identifying the subsystems of the DSS for GE Real Estate (Ref. chap 3). You must describe the detailed content of each component. You need to indicate the required functions that each subsystem can provide.
- You need to identify the data and information required by the DSS. Identify the key issues and challenge related to the data quality, consistency and integration etc for the data warehouse.
- Suggestions on what models and tools will be used for analysis, forecast and supporting of the decision making processes.
- Identify users of the DSS.
- Exam user interface design issues and discuss User Interface styles and factors to be considered in DSS user interface design.
- Stating your designed system could be individual, multi-individual, or group DSS. Identifying any groupware will be required in the DSS if the DSS is a group decision support system.
To improve our present DSS with GE Real Estate, as a group we have amended few parts with the existing system and added a Knowledge based management system (Expert Systems). Our architecture for the proposed DSS as below:DBMS:
All Data and information which are needed for the decision making is captured, stored, analyzed and retrieved. It not only provides the data and information but also interacts with the Knowledge based management system which is Expert Systems. All day to day data which is said to be transactional date is collected by ODS from the operational database via ETL process and normalized after which with the help of dimensional modeling its stored in a data warehouse using STAR Schema. DBMS fetches data from the data warehouse and pass it to Model management sub system. It also interacts with our operational database.Required Data and Information for DSS:
- Macro Economic condition Data and information
- Local Economic condition data and information
- Information about historical similar deals.
In our proposed DSS these information is stored in a data warehouse and DBMS transfers data from data warehouse to Knowledge based management systems. In our scenario knowledge based management system is Expert Systems in our proposed DSS which estimates the values for the expected risk and return based on the procedure which was completed by experts in the past. DBMS collects these figure values on expected risk and return and pass it to the model management system which helps in future decision making.Data quality, consistency, integrity:
Relational database methodology is used to build the operational database which maintains the data consistency. Through web based communication technology all details (data and information) are collected from all GE offices and branches throughout the world. For Data quality and integrity we use Extraction Transformation and Load process which cleanse and combine the data to provide the needed information for each department. In previous DSS system GE CIO eradicated the inconsistency of data across different disciplines. But with our present system all disciplines agreed in a data definition where there will be no inconsistency as we use multi dimensional model database and the data is cleaned and integrated in the data warehouse which helps in rapid decision making in an easier manner.Models and tools for analysis forecast and support of decision making process:
In our proposed model we are using a mathematical model where it has Result variables, Decision variables and intermediate result variables where the result variable are total expected risk and total expected return, decision variables uses binary method, if 1 GE real estate accepts the loan and 0 rejects the loan request.
Expert system uses some calculation to estimate the expected return of risk and investment. It is used by senior management executives, Subject matter experts and consultants. Before the expert systems calculates the value, we use Delphi method which is systematic, interactive forecasting method which relies on a panel of experts and a web based technology supports these process. This is not considered to be the linear problem and hence it cannot be solved by the centre space software which is linear programming software, hence these should be converted to linear problems which can be done by software like O Matrix, R Lab, Free Mat.
After solution arrived the Risk management will perform the sensitivity analysis or what- if analysis on the uncontrollable variables and decision variables which inspects the sensitivity on the variables which helps in the appropriate decision making with respective to loan approval and rejection.Users:
Users are categorized into two types:
- Primary Users
- Secondary Users
- Risk discipline
- Sales discipline
- Property management discipline
- Finance department
- Marketing department
Web based interface is our proposed interface which helps GE real estate managers to communicate and insert, extract the data from various parts of the world. We have selected HTML as our user interface as it is amicable, instructive and logical.Required Groupware:
As GE Managers throughout the world communicates we need a central electronic environment which enables the experts and managers to post and exchange their thoughts in an effective manner more efficiently. For example dashboard in the IBM Lotus Notes where the project members from different part of the world exchange their views.
Specifying the technologies and hardware for supporting such type of DSS.
- Give the analysis on the hardware and software selection. Identify the software platform of the DSS for GE Real Estate. Choose the method of obtaining a DSS. You also can search from the Web for some appropriate real life vendors/software tools that may be used for integrating the DSS. This will be reflected by your prototype as well.
- Identifying a suitable approach for DSS development (e.g. Prototyping/SDLC etc) life cycle.
- Identifying the key roles in DSS development. (Who should be involved in the project or DSS development project participants?)
Hardware and Software selection
GE Real Estate's proposed DSS will use Oracle database and Teradata as Data warehouse, also for ETL processes we will be using Ab Initio tool. The main reason for choosing Oracle database as it is able to handle large volume of data. Another reason for choosing Oracle is its capability for supporting business intelligence applications our data warehouse is facilitated with a multi-dimensional design i.e. Star Schema and is supported by Oracle data warehouse too. The reason for using the tool Ab Initio is that it is graphical; intuitive it fits the best way GE Real Estate's Business works. Also we will be using Query language - PostgreSQL as is an object-relational database system. It has proven architecture that has earned it a strong reputation for reliability, data integrity, and correctness. It runs on all major operating systems, including Linux, UNIX (AIX, BSD, HP-UX, SGI IRIX, Mac OS X, Solaris, Tru64), and Windows. It is fully ACID compliant, has full support for foreign keys, joins, views, triggers, and stored procedures (in multiple languages). It includes most SQL: 2008 data types, including INTEGER, NUMERIC, BOOLEAN, CHAR, VARCHAR, DATE, INTERVAL, and TIMESTAMP. It also supports storage of binary large objects, including pictures, sounds, or video. It has native programming interfaces for C/C++, Java, .Net, Perl, Python, Ruby, Tcl, ODBC, among others, and exceptional documentation.
Apache, an open source Web server originally formed by taking all the 'patches' (bug fixes) to the NCSA Web server and creating a new server. Wireless Communication Devices - Wireless routers and mobile communication devices for transfer of information including real-time information.Software platform for proposed DSS
VB.Net platform has been chosen for supporting web-based interfaces because it is one of several code languages that can communicate with the framework and it is robust, secure and feasible for coding. Best part is the code, whatever language we use, gets compiled down into the same intermediate language (IL) which communicates with the .net framework.Obtaining proposed DSS
In order to obtain the proposed DSS, GE Real Estate should follow the flow shown in detail above. So in order to gain positive outcome all the components needs to be carefully developed. As indicated earlier Oracle database and Teradata as Data warehouse will be a good option for GE Real Estate. We will be using Apache, an open source Web server as it is the best choice in order to support the purpose. For developing this system we can follow different system analysis and design life cycles such as Software Development life cycle using Waterfall model or Joint application design/development or Rapid application design/development.Key roles in proposed DSS development
GE's senior management should be actively involved during the phase of this project. The GE's senior management, middle managers and GE's Subject matter experts, consultants should be involved in the expert system as experts.
Internal IT staff should be trained so that they are able to handle the new system easily.
A Project/Delivery manager is to be assigned in order for smooth progress for the new DSS System. System analysis is also needed in order to Research, plan, install, configure and troubleshoot the new DSS system. Lastly the users need to be trained in order to understand and use efficiently the new DSS system.
Provide a prototype of the DSS, it must show the interfaces of component data & models or optional components in the system. It should match with the architecture you have designed in item 3. It should provide corresponding information for the decision makers (not real data/information, each interface in the prototype can just describe what info/function can provide). Instructions on how to use the system (prototype) and what it can do.
Please find the attached file called DSS Prototype for the prototype and GE_AUD for the application understanding document.