1.2. Gestión educativa
1.2.3. Tipos de gestión
1.2.4.3. Ámbito de la gestión de planificación
1.0 Introduction 2.0 Objectives 3.0 Main Content
3.1 History 3.2 Components 3.3 Applications
3.4 Advantages and Disadvantages 3.5 Contents of EIS
3.6 Future Trends 4.0 Conclusion
5.0 Summary
6.0 Tutor-Marked Assignment 7.0 References/Further Reading
1.0 INTRODUCTION
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 organisation. It is commonly considered as a specialised form of a Decision Support System (DSS).
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 analyse, 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).
2.0 OBJECTIVES
At the end of this unit, the students should be able to:
• define and understand the concept of executive information system (EIS)
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• evaluate the development and history of EIS
• identify the major components and contents of EIS
• outline the various applications of EIS in sectors of business
• answer the questions of advantages and disadvantages associated with EIS
• explain what the future holds for EIS.
3.0 MAIN CONTENT
3.1 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 caoppmlpicuatteior ns 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 al tchoempany.
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 customise tahcecierss to the proper company‘s data and provide relevant information to
both upper and lower levels in companies.
3.1 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 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 helps 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.
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 EIS 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;
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.
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
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interfaces can be available to the EIS structure, such as srecphoedrtus,led 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 utilised. 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.
Telecommunication
As decentralising 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 bcreuccoimale for establishing a reliable network. In addition,
telecommunications within an EIS can accelerate the need for access to distributed data.
3.3 Applications
EIS enables executives to find those data according to ucrsietre-rdiaefinaendd 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, which are helpful in evaluating if
the company is meeting its corporate objectives. After realising iatdsvantages, people have applied EIS in many areas, especially imnanufacturing, marketing, and finance areas.
Manufacturing
Basically, manufacturing is the transformation of raw materials ifnintoished 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 informationfor 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 centres, EIS also provides an approach to improve production planning and control.
Marketing
In an organisation, 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 company in the short 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.
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 recognises 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 analyse a company‘s performance and its
competitors.
3.4 Advantages and Disadvantages
AdvantagesSYSTEM
• 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 tracking of information Disadvantages
• 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
3.4 Contents of EIS
A general answer to the question of what data is
appropriate finocrlusion in an Executive Information System is "whatever is interesting
to executives." While this advice is rather simplistic, it does reflect the variety of systems currently in use. 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. Other sectors use EIS implementations to monitor information about competitors in the news
media and databases of public information in addition to the traditional revenue, cost, volume, sales, market share and quality applications.
Frequently, EIS implementations begin with just a few measures that are
clearly of interest to senior managers, and then expand in response to questions asked by those managers as they use the system. Over time,
the presentation of this information becomes stale, and the information
diverges from what is strategically important for the organisation. A
"Critical Success Factors" approach is recommended by many management theorists (Daniel, 1961, Crockett, 1992, Watson and Frolick, 1992). Practitioners such as Vandenbosch (1993) found that:
While our efforts usually met with initial success, we often
found that after six months to a year, executives were almost as bored with the new information as they had been with the old. A strategy we developed to rectify this
problem required organisations to create a report of the
month. That is, in addition to the regular information provided for management committee meetings, the CEO
was charged with selecting a different indicator to focus
on each month (Vandenbosch, 1993, pp. 8-9).
While the above indicates that selection of data for inclusion in an EIS is difficult, there are several guidelines that help to make that assessment.
A practical set of principles to guide the design of measures and indicators to be included in an EIS is presented below (Kelly, 1992b).
For a more detailed discussion of methods for selecting measures that reflect organisational objectives, see the section "EIS and Organisational Objectives."
EIS measures must be easy to understand and collect. Wherever possible, data should be collected naturally as part of the process of work. An EIS should not add substantially to the workload of managers
or staff.
EIS measures must be based on a balanced view of the organisation's
objective. Data in the system should reflect the objectives of the organisation in the areas of productivity, resource management, quality
and customer service.
Performance indicators in an EIS must reflect everyone's contribution in
a fair and consistent manner. Indicators should be as independent as possible from variables outside the control of managers.
EIS measures must encourage management and staff to share ownership of the organisation's objectives. Performance indicators must promote both team-work and friendly competition. Measures will be meaningful for all staff; people must feel that they, as individuals, can contribute to improving the performance of the organisation.
EIS information must be available to everyone in the organisation. The
objective is to provide everyone with useful information about the organisation's performance. Information that must remain confidential
should not be part of the EIS or the management system of tohreganisation.
EIS measures must evolve to meet the changing needs of the organisation.
3.6 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 utilising 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
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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.
4.0 CONCLUSION
An executive information system is an information system which gives the executive easy access to key internal and external data. EIS has been
made possible by the increasing cheapness and sophistication of microcomputer and network technology. An EIS is not only a tool for
analysis, but also a tool for interrogating data. The concept of EIS is the same as in the emerging concept of business intelligence.
5.0 SUMMARY
• 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.
• 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.
• As decentralising is becoming the current trend in companies, telecommunications will play apivotal role in networked information systems.
• Choosing the appropriate software is vital to design an effective EIS.
• When talking about hardware for an EIS environment, we should focus on the hardware that meets the executive‘s needs.
• In an organisation, 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 makejudgments about risk and uncertainty of a project and its impact on company in the short and long term.
• EIS enables executives to find those data according to user-defined criteria and promote information-based insight and understanding.
• A general answer to the question of what data is appropriate for inclusion in an Executive Information System is "whatever is
interesting to executives." While this advice is rather simplistic, it does reflect the variety of systems currently in use.
6.0 TUTOR-MARKED ASSIGNMENT
1. Briefly discuss software as a component of EIS 2. Mention 5 disadvantages of EIS7.0 REFERENCES/FURTHER READING
Thierauf, Robert J. (1994). Executive Information System: A Guide for Senior Management and MIS Professionals. Quorum Books.
(January 1994). Executive Information Systems.
Salmeron, Jose L. and Herrero, Ines (July 2005). An AHP-Based Methodology to Rank Critical Success Factors of Executive Information Systems, Computer Standards & Interfaces, Volume
28, Issue 1, pp. 1-12.
Salmeron, Jose L. EIS (2003). Success: Keys and Difficulties in Major Companies. Technovation Volume 23, Issue 1, pp. 35-38.
Salmeron, Jose L. EIS (2002). Evolution in Large Spanish Businesses.
Information & Management, Volume 40, Issue 1, pp. 41-50.
Salmeron, Jose L. (2002). EIS Profitability, Costs and Benefits: An Evolutionary Approach. Industrial Management & Data
Systems,Volume 102, Issue 5-6, pp. 284-288.
Salmeron, Jose L. (2002). EIS Data: Findings from an Evolutionary Study. Journal of Systems and Software, Volume 64, Issue 2, pp.
111-114.
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