EXECTIVE INFORMATION SYSTEM & ITS

APPLICATIONS

MARIA JAVAID (3007) ASMA SALEEM (3015)

University of Education Okara Campus

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Executive Information Systems

Introduction:

An Executive Information Systems (EIS) is a type of management information system intended to facilitate and support the information and decision making needs of senior executives by providing easy access to both internal and external information relevant to meeting the strategic goals of the organization.

The Role of ESS in the Organization:

As technology advances, ESS are able to link data from various sources both internal and external to provide the amount and kind of information executives find useful.

Rationale:

They are commonly integrated with operational systems, giving managers thefacility to drill down to find out further information on a problem. It usually allowssummary over the entire organization and also allows drilling down to specific levels ofdetail. Thus they described as an MIS for executive use. 2

Types of Executive Information System

Corporate Management:Responsible for business and fiscal planning, budgetary control, as well as for ensuring the corporate information technology needs are met in a co-ordinated and cost effective manner. E.g., Management functions, human resources, financial data, correspondence, performance measures, etc. (whatever is interesting to executives)

Technical Information Dissemination:

For the purpose of disseminating the latest information on relevant technologies, products, processes andmarkets E.g., Energy, environment, aerospace, weather, etc. Executive Information System Components:

The components of an EIS can typically be classified as:

Hardware:

When talking about hardware for an EIS environment, we should focus on the hardware that meet executive’s needs. 3

(1) Input data-entry devices. These devices allow the executive to enter, verify, and update data immediately;

(2) The central processing unit (CPU), which is the kernel because it controls the other computer system components;

(3) Data storage files. The executive can use this part to save useful businessinformation, and this part also help the executive to search historical

business information easily;

Software:

Choosing the appropriate software is vital to design an effective EIS. Therefore, the software components and how they integrate the data

into one system are very important. The basic software needed for a typical executive information system includes four components:

1.Text base software. The most common form of text is probably documents;

2. Database. Heterogeneous databases residing on a range of vendor- specific and open computer platforms help executives access both

internal and external data; 4

3. Graphic base. Graphics can turn volumes of text and statistics into visual information for executives. Typical graphic types are: time series charts, scatter diagrams, maps, motion graphics, sequence charts, and comparison-oriented graphs (i.e., bar charts);

4. Model base. The executive information system models contain routine and special statistical, financial, and other quantitative analysis.

Interface: An EIS needs to be efficient to retrieve relevant data for decision makers, so the interface is very important. Several types of interfaces can be available to the EIS structure, such as scheduled reports, questions &answers, menu driven, command language, natural language, and input & output.

Telecommunication:

As decentralizing is becoming the current trend in companies, telecommunications will play apivotal role in networked information systems. Transmitting data from one place to another has becomecrucial for a reliable network. In addition, telecommunications within an EIS can accelerate the need for access to distributed data.

Example of Digital Dashboard 5

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Advantages and disadvantages of Exective Information System:

Advantages of Executive Information System; Executives use that information, along with their experience, knowledge, education, and understanding of the corporation and the business environment as a whole, to make their decisions.

Executives are more inclined to want summarized data rather than detailed data (even though the details must be available). ESS rely on graphic presentation of information because it's a much quicker way for busy executives to grasp summarized information

It provides timely delivery of company summary information.

It provides better understanding of information

It filters data for management.

It provides system for improvement in information tracking

It offers efficiency to decision makers.

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Disadvantages of Executive Information System;

• Functions are limited, cannot perform complex calculations. • Hard to quantify benefits and to justify implementation of an EIS. • Executives may encounter information overload. • System may become slow, large, and hard to manage. • Difficult to keep current data. • May lead to less reliable and insecure data. • Small companies may encounter excessive costs for implementation. • Highly skilled personnel requirement can not be fulfilled by the small business.

Executive Information System Features:

EIS are intended as decision support tools for senior managers. Since thesestrategic decisions are based on a wide range of input information, they always need to be wellintegrated with operational systems in a business.

Some important features of executive support system include the fact that:

• They provide summary information to monitoring of business performance. This is often achieved through measures known as ‘critical success factors’ or ‘key performance indicators’ (KPIs). • They are used mainly for strategic decision making, but may also provide 8

Features that relate to tactical decision making:

• They provide a drill-down feature which gives a manager the opportunity to find out more information necessary to take a decision or discover the source of a problem. • They provide analysis tools. • They must be integrated with other facilities to help manage the solving of problems and the daily running of the business.• They integrate data from a wide range of information sources, including company and external sources such as market and competitor. • They have to be designed according to the needs of managers who do not use computers frequently. They should be intuitive and easy to learn.

EIS Project Team:

The process of establishing organizational objectives and measures is intimately linked with the task of locating relevant data in existing computer systems to support those measures. Objectives must be specific and measurable, and data availability is critical to measuring progress against objectives.

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Factors influencing the functioning of Executive information systems:

Organizational setup;

The policies and procedures followed in an organization have a great impact in the manner management information systems are implemented in an organization. For e.g. If a company believes in centralization of authority and hesitates to delegate authority then EIS will be provided for the top most managers in the organization.

Other factors:

Internal and external factors;

The internal and external factors connected directly or indirectly with the organization will have their own say in establishing executive information systems in an organization. For e.g. if matters relating to compliance of tax, audit and other statutory matters are handled by the senior mangers only then EIS will be targeted to them alone. On the other hand if clerical labour is also involved in the same procedures EIS they will also be able to access EIS and render the necessary supporting functions to the senior managers.

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The success of executive information systems lies in two issues.

Firstly: the information should properly reach the concerned executives. Secondly: they should accord importance and act upon it. Above all whatever they say must be given due consideration by the decision making authority.

Executive Support System Applications : After realizing its advantages, people have applied EIS in many areas, especially, in manufacturing, marketing, and finance areas. Manufacturing; Basically, manufacturing is the transformation of raw materials into finished goods for sale, or intermediate processes involving the production or finishing of semi-manufactures.

Marketing; In an organization, marketing executives’ role is to create the future. Their main duty is managing available marketing resources to create

Financial; A financial analysis is one of the most important steps to companies today.EIS enables executives to focus more on thelong-term basis of current year and beyond.

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Government Executive Information Systems in government have been constructed to track data about Ministerial correspondence, case management, worker productivity, finances, and human resources to name only a few.

Transaction Processing System

EIS

Marketing IS

Production IS

Financial IS

Human Resources

IS

MIS

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Examples of ESS:

The Sutter Home Winery uses mostly external data,including information from the internet, in itsESS.It organized the information in order to help executives make decisions based on trends in themarketplace.The information includes data on competitors and information from market research,Sutter uses its system output to determine sales forecasts,marketing compains,and investmentplans.

Future Trends in Executive Information System :

The future of executive info systems will not be bound by mainframe computer systems. This trend allows executives escaping from learning different computer operating systems and substantially decreases the implementation costs for companies. Because utilizing existing software applications lies in this trend, executives will also eliminate the need to learn a new or special language for the EIS package. Future executive information systems will not only provide a system that supports senior executives, but also contain the information needs for middle managers.

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