eis (executive information system

Executive information system



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An Executive Information System (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. It is commonly considered as a specialized form of a Decision Support System (DSS) ^[1]
The emphasis of EIS is on graphical displays and easy-to-use user interfaces. 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 variables so that they can monitor performance and identify opportunities and problems. EIS and data warehousing technologies are converging in the marketplace.
In recent years, the term EIS has lost popularity in favour of Business Intelligence (with the sub areas of reporting, analytics, and digital dashboards).

Contents [hide] 1 History 2 Components 2.1 Hardware 2.2 Software 2.3 User Interface 2.4 Telecommunication 3 Applications 3.1 Manufacturing 3.2 Marketing 3.3 Financial 4 Advantages and Disadvantages EIS 4.1 Advantages of EIS 4.2 Disadvantages of EIS 5 Future Trends 6 See also 7 References 8 External links

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[edit] History


Traditionally, executive information systems were developed as mainframe computer-based
programs. The purpose was to package a company’s data and to provide
sales performance or market research statistics for decision makers,
such as financial officers, marketing directors, and chief executive officers,
who were not necessarily well acquainted with computers. The objective
was to develop computer applications that would highlight information
to satisfy senior executives’ needs. Typically, an EIS provides data
that would only need to support executive level decisions instead of
the data for all the company.
Today, the application of EIS is not only in typical corporate hierarchies, but also at personal computers on a local area network.
EIS now cross computer hardware platforms and integrate information
stored on mainframes, personal computer systems, and minicomputers. 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 decide which data are relevant for their
decision makings. This arrangement makes all users able to customize
their access to the proper company’s data and provide relevant
information to both upper and lower levels in companies.
[edit] Components


The components of an EIS can typically be classified as:
[edit] Hardware


When talking about hardware
for an EIS environment, we should focus on the hardware that meet the
executive’s needs. The executive must be put first and the executive’s
needs must be defined before the hardware can be selected. The basic
computer hardware needed for a typical EIS includes four components:

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
   business information, and this part also help the executive to search
   historical business information easily;
   
4. Output devices, which provide a visual or permanent record for the
   executive to save or read. This device refers to the visual output
   device 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 access of the EIS information to many more users within a
company.
[edit] Software


Choosing the appropriate software is vital to design an effective EIS.^{[citation needed]}
Therefore, the software components and how they integrate the data into
one system are very important. The basic software needed for a typical
EIS includes four components:

1. Text base software. The most common form of text are 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;
   
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 EIS models contain routine and special statistical, financial, and other quantitative analysis.
   

Perhaps a more difficult problem for executives is choosing from a
range of highly technical software packages. Ease of use,
responsiveness to executives' requests, and price are all reasonable
considerations. Further, it should be considered whether the package
can run on existing hardware.
[edit] User Interface


An EIS needs to be efficient to retrieve relevant data for decision makers, so the user 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. It is
crucial that the interface must fit the decision maker’s
decision-making style. If the executive is not comfortable with the
information questions/answers style, the EIS will not be fully
utilized. The ideal interface for an EIS would be simple to use and
highly flexible, providing consistent performance, reflecting the
executive’s world, and containing help information.
[edit] Telecommunication


As decentralizing is becoming the current trend in companies, telecommunications
will play 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.
[edit] Applications


EIS enables executives to find those data according to user-defined
criteria and promote information-based insight and understanding.
Unlike a traditional management information system 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.
[edit] 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. 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 and
efficiency. To produce meaningful managerial and operational
information for controlling manufacturing operations, the executive has
to make changes in the decision processes. EIS provides the evaluation
of vendors and buyers, the evaluation of purchased materials and parts,
and analysis of critical purchasing areas. Therefore, the executive can
oversee and review purchasing operations effectively with EIS. In
addition, because production planning and control depends heavily on
the plant’s data base and its communications with all manufacturing
work centers, EIS also provides an approach to improve production
planning and control.
[edit] Marketing


In an organization, marketing executives’ role is to create the
future. Their main 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 an
approach to 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. All of
these sales analysis functions help marketing executives to make final
decisions.
[edit] Financial


A financial analysis is one of the most important steps to companies
today. The executive needs to use financial ratios and cash flow
analysis to estimate the trends and make capital investment decisions.
An EIS is a responsibility-oriented approach that integrates planning
or budgeting with control of performance reporting, and it can be
extremely helpful to finance executives. Basically, EIS focuses on
accountability of financial performance and it recognizes the
importance of cost standards and flexible budgeting in developing the
quality of information provided for all executive levels. EIS enables
executives to focus more on the long-term basis of current year and
beyond, which means that the executive not only can manage a sufficient
flow to maintain current operations but also can figure out how to
expand operations that are contemplated over the coming years. Also,
the combination of EIS and EDI
environment can help cash managers to review the company’s financial
structure so that the best method of financing for an accepted capital
project can be concluded. In addition, the EIS is a good tool to help
the executive to review financial ratios, highlight financial trends
and analyze a company’s performance and its competitors.
[edit] Advantages and Disadvantages EIS


[edit] Advantages of EIS

• Easy for upper-level executives to use, extensive computer experience is not required in operations
  
• Provides timely delivery of company summary information
  
• Information that is provided is better understood
  
• Filters data for management
  
• Improves to tracking information
  
• Offers efficiency to decision makers
  

[edit] Disadvantages of EIS

• 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
  
• System dependent
  

[edit] Future Trends


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. The future executive information systems will become
diverse because of integrating potential new applications and
technology into the systems, such as incorporating artificial intelligence (AI) and integrating multimedia characteristics and ISDN technology into an EIS.