Executive Information Systems
Definition: An Executive Information System (EIS) is a set of
management tools supporting the information and decision-making needs of
management by combining information available within the organisation with
external information in an analytical framework.
EIS are targeted at management needs to quickly assess the status of a business
or section of business. These packages are aimed firmly at the
type of business user who needs instant and up to date understanding of critical
business information to aid decision making.
The idea behind an EIS is that information can be collated and displayed
to the user without manipulation or further processing. The user can then
quickly see the status of his chosen department or function, enabling them to
concentrate on decision making. Generally an EIS is configured to display data
such as order backlogs, open sales,
purchase order backlogs, shipments, receipts
and pending orders. This information can then be used to make executive
decisions at a strategic level.
The emphasis of the system as a whole is the easy to use interface and the
integration with a variety of data sources. It offers strong reporting and data
mining capabilities which can provide all the data the executive is likely to
need. Traditionally the interface was menu driven with either reports, or text
presentation. Newer systems, and especially the newer
systems, which are replacing EIS, have a
dashboard or scorecard type display.
Before these systems became available, decision makers had to rely on disparate
spreadsheets and reports which slowed down the decision making process. Now
massive amounts of relevant information can be accessed in seconds. The two main
aspects of an EIS system are integration and visualisation. The newest method of
visualisation is the
Dashboard and Scorecard. The
Dashboard is one screen that
presents key data and organisational information on an almost real time and
integrated basis. The Scorecard is another one screen display with measurement
metrics which can give a percentile view of whatever criteria the executive
Behind these two front end screens can be an immense
infrastructure, or a couple of integrated
databases, depending entirely on the
organisation that is using the system. The backbone of the system is traditional
server hardware and a fast network. The EIS software itself is run from here and
presented to the executive over this network. The databases needs to be fully
integrated into the system and have real-time connections both in and out. This
information then needs to be collated, verified, processed and presented to the
end user, so a real-time connection into the EIS core is necessary.
Executive Information Systems come in two distinct types: ones that are data
driven, and ones that are model driven. Data driven systems interface with
databases and data warehouses. They collate information from different sources
and presents them to the user in an integrated dashboard style screen. Model
driven systems use forecasting, simulations and decision tree like processes to
present the data.
As with any emerging and progressive market, service providers are continually
improving their products and offering new ways of doing business. Modern EIS
systems can also present industry trend information and competitor behaviour
trends if needed. They can filter and analyse data; create graphs, charts and
scenario generations; and offer many other options for presenting data.
There are a number of ways to link decision making to organisational
performance. From a decision maker's perspective these tools provide an
excellent way of viewing data. Outcomes displayed include single metrics, trend
analyses, demographics, market shares and a myriad of other options. The simple
interface makes it quick and easy to navigate and call the information required.
For a system that seems to offer business so much, it is used by relatively few
organisations. Current estimates indicate that as few as 10% of businesses use
EIS systems. One of the reasons for this is the complexity of the system and
support infrastructure. It is difficult to create such a system and populate it
effectively. Combining all the necessary systems and data sources can be a
daunting task, and seems to put many businesses off implementing it. The system
vendors have addressed this issue by offering turnkey solutions for potential
clients. Companies like Actuate and Oracle are both offering complete out of the
box Executive Information Systems, and these aren't the only ones. Expense is
also an issue. Once the initial cost is calculated, there is the additional cost
of support infrastructure,
training, and the means of making the company data
meaningful to the system.
Does EIS warrant all of this expense? Green King certainly thinks so. They
installed a Cognos system in 2003 and their first few reports illustrated
business opportunities in excess of £250,000. The AA is also using a Business
Objects variant of an EIS system and they expect a return of 300% in three
years. (Guardian 31/7/03)
An effective Executive Information System isn't something you can just set up
and leave it to do its work. Its success depends on the support and timely
accurate data it gets to be able to provide something meaningful. It can provide
the information executives need to make educated decisions quickly and
effectively. An EIS can provide a competitive edge to business strategy that can
pay for itself in a very short space of time.