Executive Information System
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An executive information system (EIS), also known as an executive support system (ESS), is a type of management support system that facilitates and supports senior executive information and
decision-making In psychology, decision-making (also spelled decision making and decisionmaking) is regarded as the Cognition, cognitive process resulting in the selection of a belief or a course of action among several possible alternative options. It could be ...
needs. It provides easy
access Access may refer to: Companies and organizations * ACCESS (Australia), an Australian youth network * Access (credit card), a former credit card in the United Kingdom * Access Co., a Japanese software company * Access Healthcare, an Indian BPO se ...
to internal and external information relevant to
organization An organization or organisation (Commonwealth English; see spelling differences), is an entity—such as a company, an institution, or an association—comprising one or more people and having a particular purpose. The word is derived from ...
al goals. It is commonly considered a specialized form of
decision support system A decision support system (DSS) is an information system that supports business or organizational decision-making activities. DSSs serve the management, operations and planning levels of an organization (usually mid and higher management) and h ...
(DSS).Power, D. J., Decision Support Systems: Concepts and Resources for Managers, Greenwood/Quorum, 2002. EIS emphasizes graphical displays and easy-to-use
user interface In the industrial design field of human–computer interaction, a user interface (UI) is the space where interactions between humans and machines occur. The goal of this interaction is to allow effective operation and control of the machine f ...
s. They offer strong reporting and drill-down capabilities. In general, EIS are enterprise-wide DSS that help top-level executives analyze, compare, and highlight trends in important
variable Variable may refer to: * Variable (computer science), a symbolic name associated with a value and whose associated value may be changed * Variable (mathematics), a symbol that represents a quantity in a mathematical expression, as used in many ...
s so that they can monitor performance and identify opportunities and problems. EIS and
data warehousing In computing, a data warehouse (DW or DWH), also known as an enterprise data warehouse (EDW), is a system used for reporting and data analysis and is considered a core component of business intelligence. DWs are central repositories of integra ...
technologies are converging in the marketplace. The term EIS lost popularity in favor of
business intelligence Business intelligence (BI) comprises the strategies and technologies used by enterprises for the data analysis and management of business information. Common functions of business intelligence technologies include reporting, online analytical pr ...
(with the sub areas of reporting,
analytics Analytics is the systematic computational analysis of data or statistics. It is used for the discovery, interpretation, and communication of meaningful patterns in data. It also entails applying data patterns toward effective decision-making. It ...
, and digital dashboards).


History

Traditionally, executive information systems were
mainframe computer A mainframe computer, informally called a mainframe or big iron, is a computer used primarily by large organizations for critical applications like bulk data processing for tasks such as censuses, industry and consumer statistics, enterpris ...
-based programs. The purpose was to package a company's data and to provide sales performance or
market research Market research is an organized effort to gather information about target markets and customers: know about them, starting with who they are. It is an important component of business strategy and a major factor in maintaining competitiveness. Mark ...
statistics for
decision maker In psychology, decision-making (also spelled decision making and decisionmaking) is regarded as the cognitive process resulting in the selection of a belief or a course of action among several possible alternative options. It could be either rati ...
s, such as, marketing directors, chief executive officer, who were not necessarily well acquainted with computers. The objective was to develop computer applications that highlighted information to satisfy senior executives' needs. Typically, an EIS provides only data that supported executive level decisions, not all company data. Today, the application of EIS is not only in typical corporate hierarchies, but also at lower corporate levels. As some client service companies adopt the latest enterprise information systems, employees can use their personal computers to get access to the company's data and identify information relevant to their decision making. This arrangement provides relevant information to upper and lower corporate levels.


Components

EIS components can typically be classified as: * Hardware * Software * User interface * Telecommunications


Hardware

When talking about
computer hardware Computer hardware includes the physical parts of a computer, such as the computer case, case, central processing unit (CPU), Random-access memory, random access memory (RAM), Computer monitor, monitor, Computer mouse, mouse, Computer keyboard, ...
for an EIS environment, we should focus on the hardware that meets the executive's need. The executive must be put first and the executive's needs must be defined before the hardware can be selected. The basic hardware needed for a typical EIS includes four components: # Input data-entry devices. These devices allow the executive to enter, verify, and update data immediately # The central processing unit ( CPU), which is the most important because it controls the other computer
system A system is a group of Interaction, interacting or interrelated elements that act according to a set of rules to form a unified whole. A system, surrounded and influenced by its environment (systems), environment, is described by its boundaries, ...
components # Data storage files. The executive can use this part to save useful business information, and this part also helps the executive to search historical business information easily # Output devices, which provide a visual or permanent record for the executive to save or read. This device refers to the visual output device such as monitor or printer In addition, with the advent of local area networks ( LAN), several EIS products for networked workstations became available. These systems require less support and less expensive computer hardware. They also increase EIS information access to more company users.


Software

Choosing the appropriate software is vital to an effective EIS. Therefore, the software components and how they integrate the data into one system are important. A typical EIS includes four software components: # Text: handling software—documents are typically text-based # Database: heterogeneous databases on a range of vendor-specific and open computer platforms help executives access both internal and external data # Graphic base: graphics can turn volumes of text and statistics into visual information for executives. Typical graphic types are: time series charts, scatter diagrams,
map A map is a symbolic depiction emphasizing relationships between elements of some space, such as objects, regions, or themes. Many maps are static, fixed to paper or some other durable medium, while others are dynamic or interactive. Although ...
s, motion graphics, sequence charts, and comparison-oriented graphs (i.e.,
bar chart A bar chart or bar graph is a chart or graph that presents categorical data with rectangular bars with heights or lengths proportional to the values that they represent. The bars can be plotted vertically or horizontally. A vertical bar chart is ...
s) # Model base—EIS models contain routine and special statistical, financial, and other quantitative analysis


User interface

An EIS must be efficient to retrieve relevant data for decision makers, so the
user interface In the industrial design field of human–computer interaction, a user interface (UI) is the space where interactions between humans and machines occur. The goal of this interaction is to allow effective operation and control of the machine f ...
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 a trend in companies, telecommunications plays a pivotal role in networked information systems. Transmitting data from one place to another has become crucial for establishing a reliable network. In addition, telecommunications within an EIS can accelerate the need for access to distributed data. It can be both by scientific and business means.


Applications

EIS helps executives find data according to user-defined criteria and promote information-based insight and understanding. Unlike a traditional
management information system A management information system (MIS) is an information system used for decision-making, and for the coordination, control, analysis, and visualization of information in an organization. The study of the management information systems involves peop ...
presentation, EIS can distinguish between vital and seldom-used data, and track different key critical activities for executives, both which are helpful in evaluating if the company is meeting its corporate objectives. After realizing its advantages, people have applied EIS in many areas, especially, in manufacturing, marketing, and finance areas.


Manufacturing

Manufacturing Manufacturing is the creation or production of goods with the help of equipment, labor, machines, tools, and chemical or biological processing or formulation. It is the essence of secondary sector of the economy. The term may refer to a r ...
is the transformation of raw materials into finished goods for sale, or intermediate processes involving the production or finishing of semi-manufactures. It is a large branch of industry and of secondary production. Manufacturing operational control focuses on day-to-day operations, and the central idea of this process is effectiveness.


Marketing

In an organization,
marketing Marketing is the process of exploring, creating, and delivering value to meet the needs of a target market in terms of goods and services; potentially including selection of a target audience; selection of certain attributes or themes to emph ...
executives' duty is managing available marketing resources to create a more effective future. For this, they need make judgments about risk and uncertainty of a project and its impact on the company in short term and long term. To assist marketing executives in making effective marketing decisions, an EIS can be applied. EIS provides sales forecasting, which can allow the market executive to compare sales forecast with past sales. EIS also offers an approach to product price, which is found in venture analysis. The market executive can evaluate pricing as related to competition along with the relationship of product quality with price charged. In summary, EIS software package enables marketing executives to manipulate the data by looking for trends, performing audits of the sales data, and calculating totals, averages, changes, variances, or ratios.


Financial analysis

Financial analysis Financial analysis (also known as financial statement analysis, accounting analysis, or analysis of finance) refers to an assessment of the viability, stability, and profitability of a business, sub-business or project. It is performed by profes ...
is one of the most important steps to companies today. Executives needs to use financial ratios and cash flow analysis to estimate the trends and make capital investment decisions. An EIS integrates planning or budgeting with control of performance reporting, and it can be extremely helpful to finance executives. EIS focuses on financial performance accountability, and recognizes the importance of cost standards and flexible budgeting in developing the quality of information provided for all executive levels.


Advantages and disadvantages


Advantages of ESS

* Easy for upper-level executives to use, extensive computer experience is not required in operations * Provides strong drill-down capabilities to better analyze the given information. * Information that is provided is better understood * EIS provides timely delivery of information. Management can make decisions promptly. * Improves tracking information * Offers efficiency to decision makers


Disadvantages of ESS

* System dependent * Limited functionality, by design * Information overload for some managers * Benefits hard to quantify * High implementation costs * System may become slow, large, and hard to manage * Need good internal processes for data management * May lead to less reliable and less secure data * Excessive cost for small company


Future trends

This trend frees executives from learning different computer operating systems, and substantially decreases implementation costs. Because this trend includes using existing software applications, executives don't need to learn a new or special language for the EIS package. Interactive visualizations are trending. 3D visualizations in a VR/AR environment looks like a possibility already. Also,
predictive analytics Predictive analytics encompasses a variety of statistical techniques from data mining, predictive modeling, and machine learning that analyze current and historical facts to make predictions about future or otherwise unknown events. In busine ...
open the doors for (machine) learning what is going to be next based on data from the past. While the data processing can be done in many ways, learning is not completely unsupervised. There is still a good deal of classification using expert personnel analysis. In near realtime scenarios, latencies while doing ML can be a barrier. Optimizing data models, size and processing path/time are ongoing work. As more data is captured at different data stages in not only EIS apps but also other enterprise apps, audio and video tagging can catalyse data discovery.


See also

*
Enterprise performance management Enterprise performance management (EPM) is a field of business performance management which considers the visibility of operations in a closed-loop model across all facets of the enterprise. Specific to financial activities in the office of the c ...
* Enterprise architecture *
Management information system A management information system (MIS) is an information system used for decision-making, and for the coordination, control, analysis, and visualization of information in an organization. The study of the management information systems involves peop ...


References

* Thierauf, Robert J. Executive Information System: A Guide for Senior Management and MIS Professionals. Quorum Books, 1991 * Executive information systems (January 1994). Retrieved June 17, 2006, from https://web.archive.org/web/20060620081931/http://www.cs.ui.ac.id/staf/sjarif/eis.htm * Rockart, John F. and De Long, David W. (1988) ''Executive Support Systems: The Emergence of Top Management Computer Use,'' Business One Irwin, * Salmeron, Jose L. and Herrero, Ines. An AHP-based methodology to rank critical success factors of executive information systems. Computer Standards & Interfaces, Volume 28, Issue 1, July 2005, pp. 1–12. * Salmeron, Jose L. EIS Success: Keys and difficulties in major companies. Technovation Volume 23, Issue 1, 2003, pp. 35–38 * Salmeron, Jose L. EIS Evolution in Large Spanish Businesses. Information & Management Volume 40, Issue 1, 2002, pp. 41–50 * Salmeron, Jose L. EIS profitability, costs and benefits: An evolutionary approach. Industrial Management & Data Systems Volume 102, Issue 5–6, 2002, pp. 284–288 * Salmeron, Jose L. EIS data: Findings from an evolutionary study. Journal of Systems and Software Volume 64, Issue 2, 2002, pp. 111–114


External links


The development and use of Executive Information Systems
{{DEFAULTSORT:Executive Information System Information systems Decision support systems Business software Information technology management Management systems