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Contents

Totalcompensation fallsfor ChiefInformationOfficers

PSR finds aneasy way tomeasure qualityof EISand DSS

Forecast for theNationalInformationSystemsMarket

Total compensation fallsfor Chief InformationOfficersRecently released 1995 CompensationSurvey reveals the recession's impacton the bottom line for ClO's

Total compensation for Chief InformationOfficers in largebusiness organi-zations fell byover sevenpercent between1993 and 1994.After years ofrecession, PSR'scompensationsurvey resultsindicate that CIObase compensa-tion has declinedsignificantlywith a higherproportion of theCIO's totalcompensation

e 1995 Copyright Positive Support Review. Inc. Al.l. RIGHTS RESERVED

PSR finds an easy way tomeasure quality of EISand DSSMany EISs and DSSs imprison thedata, failing to provide the answer toeven the simplest business question

After years in development, many organizationsstill find that it is close toimpossible to get quickanswers to simplebusiness questions fromtheir Executive Informa-tion Systems (EIS) andDecision Support Sys-tems (DSS). We havefound that basic conceptsin the development of anEIS/Decision SupportSystem are often over-looked or missed com-pletely.

Republicans look great but it still is ajungle out there and only time will tell

I (X)% Recycled Paper

package now tied tostrict company performance requirements.

Base compensation for middle level and othertop level positions in mid-sized and largeorganizations increased on average by about 3%,while total compensation remained relativelyflat. In conjunction with this modest increase,the ranks of middle level managers has declinedsignificantly. When comparing organizationsresponding to both the 1994 and 1995 compen-sation survey, middle level management posi-tions in large companies have declined byalmost 8%. This reduction is a reflection of thedown-sizing/right-sizing of Information Servicesdepartments over the past year, indicating therecession was still in full force in SouthernCalifornia during 1994.

The survey also revealed an overall 4% reduc-tion in staff level positions. This reduction didnot translate into significant increases forremaining personnel with salaries remainingrelatively flat for "traditional" IS positions (such

(continued on page 2)

Take for example the caseof a large financialservices organization,

marketing a variety of different products inhundreds of different markets. After almosteighteen months in development, their informa-tion systems management was the proud parentof a database design, comprising data forseveral million customers, ready and waiting toanswer those critical business questions. Yet toanswer the simple question, "What is theprofitability of the 'young affluent' customersegment?" Required the developers to write aSQL statement with 13 joins and took overtwenty seven hours to process. Was the valueof the information worth that effort? Especiallywhen you take into account the fact it took overfive days to get the answer to the question to theexecutives that needed the information. Withthat amount of time a retailer can miss a trendand lose a sale. Is that what happened to I.Magnin and the score of retailers that haveclosed their doors in the last several years.What is needed is a quicker and better way tomeet the needs of any enterprise.

(continued on page 2)

PSR Reviews - Vol. V No. 1ISSN 1080-2975

March/ April 1995Page 1

Total Compensation falls for ChiefInformation Officers

(continued from page 1)

as Computer Operators, and Applications and SystemsProgrammers/Analysts).

Client/Server technology implementations are definitely onthe rise resulting in a shortage of qualified individuals withthe skills sets necessary to design, implement and maintainLAN and WAN environments. PSR survey results supportthis observation. Positions involved in the design, implemen-tation, support and maintenance of client/server environ-ments, such as Network Specialists, received a whopping11.3% average increase over last years base and total com-pensation ranges.

Some other interesting observations that were made include:

• New technical skills were most often hired into anorganization rather than developed within it;

• Staffing for most support functions has decreasedwithout a noticeable loss of quality;

• Focus on new areas has led to a loss of the besttechnical resources to the new technologies and themore highly skilled individuals leaving the organiza-tions they had supported; and

• Retirement of top professionals has started to occurwithin many of the better and larger organizations.As a result some of these individuals have taken overCIO positions in smaller firms to supplement theretirement income that they have;

• Many data processing professionals continue tounder invest in themselves. As firms have cut backon training and conference budgets many IS profes-sionals have stopped learning — a fatal flaw;

• Data processing activities are beginning to be re-centralized after years of decentralization anddistribution of the function. Costs have escalated tothe point that many firms want to put it all in oneplace so that these costs can be better understood andcontrolled; and

• Most non data processing senior executives are nolonger intimidated by the technology.

The 1 995 Compensation Survey was conducted in the lastquarter of 1 994. The compensation survey was sent to arepresentative number of Southern California business in avariety of different industries. Responses were received froma total of 41 companies representing 12 industries. Salaryinformation was collected on a total of 4,046 IS professionalsin 36 different IS positions. Responses are categorized bysize of company, concentrating on mid-sized (50MM-500MM in gross revenue) and large (over 500MM in grossrevenue) companies."©-

PSR finds an easy way to measurequality of EIS and DSS _

(continued from page I)

Where the IS staffers failed was in the design of the Informa-tion Warehouse database model. Their DBA used the entity-relationship modeling techniques in developing the databasemodel and was proud that the database was normalized toFifth Normal Form. Many of us have learned how to useentity relationship modeling techniques. However, utilizationof these techniques is like trying to repair a child's toy withscotch tape, it may look good but it will soon crumble whenused.

Entity-relationship modeling is used to achieve high perfor-mance in an on-line transaction processing (OLTP) environ-ment. A EIS and DSS requires an on-line analytical process-ing (OLAP) environment. In an OLAP environment manyrecords are accessed for distinguishing trends within the data.Seldom is there a user requirement to update the data. AnOLTP environment accesses individual records for thepurpose of recording updates or changes, such as a specificcustomer deposit balance.

The key to development of an on-line analytical processingenvironment is call Dimension modeling. Dimension model-ing is a technique that is subject-oriented as opposed toapplication-segmented. Dimension modeling is a databasemodeling methodology that incorporates two different typesof tables, Subject tables and Dimension tables. A Subjecttable is a very large time oriented table that contains the"facts" of a given subject, such as customer or product.Surrounding this table are Dimension tables that contain theillustrative dimensions of the business that users will easilyrecognize, such as account type.

Don't panic, if your EIS or DSS is supported by an entity-relationship structured database, it can be converted into aDimensional model. Since we already know that it is imprac-tical to run extensive queries against a high-volume transac-tional database, rearrange the data into a Dimensional modelwhen extracting the data from your OLTP database.

Before developing a Dimensional model, four businessaspects must be identified:

• Subjects - Basis of system

• Dimensions - Range of Information

• Frequency - Timing of Data

• Abridgment - Level of Summarization

Subjects

As mentioned earlier, operational systems are applicationsegmented (i.e. for a financial services organization, amortgage or demand deposit accounting system), while EISsand DSSs are subject oriented. Subjects for the same finan-cial services organization would be customer or product.

PSR Reviews - Vol. V No. 2ISSN 1080-2975

March/April1995Page 2

—

TIMEDescription

Calendar/FiscalPeriod

MARKETDescription

RegionDistrictBranch

Demographics

TIME

PRODUCT

MARKET

PROMOTION

DollarsUnitsFeeCost

PRODUCTDescription

TypeTerm

Maturity

PROMOTIONDescription

RateDiscount

Media

Subject tables capture the relevant facts that relate to thesubject. They contain counts and other numerical measure-ments routinely used to measure the organization's perfor-mance. Subject tables are traditionally very large (i.e. manyrow deeper) than Dimension tables. For example, in afinancial institution, there are many more deposits thanbranches in the organization.

Dimensions

Dimensions are the relevant qualifications of the Subjectwithin the business. This is one of the primary things that hasto be understood in order to use this approach. It varies notonly by industry but also by firm within that industry. Theyrepresent the natural dimensions of the business organizationsand basically define the characteristics of the Subject. Theyare usually easily recognized by the user. As shown in theexhibit, the Dimension table for market consists of theorganizational hierarchy. It may also be defined by demo-graphics, through such concepts as the Claritas Prizm pro-files.

Frequency

Within the Subject tables, the frequency of the data capturedmust be identified. This varies for most industries and firmsbased on the particular business needs versus the cost ofcapture, transmission and processing. For example, it is veryexpensive to capture sales by individual transaction in a retail

store or deposits in a financial institution. Given the ancillaryprocessing needs such as credit card and frequent purchasingprograms this may be required. In the case of a retail organi-zation this also is impacted by the time of year and thedemands of the merchandising function within the organiza-tion. To do so would recreate the production system. Manyfirms feel it is more reasonable to capture sales (or deposits)by product each hour, or each day. Essentially, this is thelevel of summarization of data in the Subject table.

•••••••••I ^^^^^^^MMIM^^HH^M^HBMaMB^^^H^HM^^HMiMMM

Abridgment

Abridgment refers to the level of summarization within theSubject table as it relates to the Dimension tables. Dimensiontables are commonly shared by multiple Subject tables andmay be hierarchical in nature, such as Company District,Region, Branch and Route in a distribution firm. It may bedesirable to maintain a Customer Subject table down to theroute level. However, it may be desirable to "abridge" orsummarize the Product Subject table at the branch level.

Remember, OLTP and EISs and DSSs are difficult to imple-ment together unless you have the right resources - people -allocated to the effort. Although success of the businessorganization is not a certainty if Dimension modeling isemployed when developing an EIS or DSS, failure is whenemploying traditional entity relationship modeling techniquesdo not meet the needs of business and the executives who payfor all of this wonderful technology.-©-

1995 Salary Survey

• Defines compensation for Information System professionals

• Ranks IS professionals in other similar organizations

• Encompasses over 60 Information Systems positions for

large (over $500MM in annual revenue), and

medium ($50MM to $500MM) and

• Costs $395.00 which includes IS Position Descriptions HandiGuide18

HandiGuide is a registered trademark of Positive Support Review, Inc. - Sanua Monica, CA

PSR Reviews - Vol. V No. 1ISSN 1080-2975

March/April 1995Page 3

Forecast for the NationalInformation Systems MarketTimes are good. Many are moving to new andbetter places. The question remains do you have tomove to succeed?

by M. Victor JanulaitisInternet address janumv@ix.netcom.com

Things are moving along great right now.The "Contract with America" is starting totake shape and the economy is on a greatupswing. As I fly across the country signsof recovery are everywhere. Even inDetroit, which has had several years of badluck, it is difficult to get a good hotelroom and rental car in the middle of theweek. Planes are much fuller with peopleflying on full fares and few seats are left infirst class as upgrades are used by sea-soned travelers.

Washington and the Belt Way are nowunderstanding what down-sizing willmean to the government and public sectororganizations. There will be feweropportunities to get Federal grants andbudgets for the organizations that focus onthe public market.

On the technology side a number of CIOsof large East Coast companies are outlooking for new jobs. It seems that thewholesale replacement of executives thattook place on the West Coast is nowhappening there. This only foreshadowsthe next move which is a significantdislocation of second and third levelmanagers in many of those same organiza-tions.

In Europe the market is softening andcompanies that had bet on the internationalmarket are now starting to lick their

Published by:

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(310) 453-6100 Extension 101

FAX (310)453-6253

wounds. This is one of the driving forcesin the cutbacks that are not being felt fromChicago to New York. Those organiza-tions that kept in touch with the domesticmarket while expanding to Europe willnot have to make as many cuts.

Another phenomenon that is occurring iscases where individuals who have notmanaged in that complex environment arenot put into those roles. These individualsoften do not have the experience anddepth of understanding of the businessnecessary to make the right tactical muchless strategic directions.

Key signs to watch for identifying thosewho are over their heads are:

O "Shooting from the hip" -They feel the need to makerapid decisions with a limitedamount of information. Theproblem is that many of theseindividuals do not have thedepth and breath of experienceto make a good business guessversus a shot in the dark.

O "Hire only cronies" -They tend to hire people withwhom they have worked withbefore and do this to such anextreme that they have no outof the box thinking. They lock

themselves into their own set oflimited experiences of the past.

d> "Locked into a vendor" -Every vendor has good refer-ences — and bad ones if youlook far enough. A long timeago, an executive at a restaurantchain had an interestingquestion he would ask - ""How many hamburgers wouldhe have to sell to pay for awrong vendor choice?"

£T> "Everything before is bad -The business did run, and inmany case, profitably with theapproaches that are now beingquestioned. New executivesneed to see why somethingstopped working.

As a side note, I have found that themean time to fire or quit for a new CIOnow is 14 months.

As organizations look ahead they needto know that no matter how good thingsare today they will get worse. At thesame time no matter how bad things arenow they will get better. This is fromsomeone that survived the George Bushrecession, the Malibu fire storm, theNorthridge quake and is now enjoyingthe benefits of a great economic recov-ery."®*

Location

Northeast

Mid-Atlantic

Southeast

South

Midwest

Southwest

West

Pacific Northwest

Best Location

ProspectsShort Term

Excellent

Good

Good

Good/Excellent

Good

Good

Good/Excellent

Good

West

ProspectsLong Term

Excellent

Good

Good/Poor

Good

Good/Poor

Good

Excellent

Good

West

PSR Reviews - Vol. V No. 2ISSN 1080-2975

March/Aprin 995Page 4