Executive information system
An executive information system (EIS) is one type of decision support system (DSS) and is often referred to by its more common name: the executive dashboard. As the name implies, the application is targeted at the senior executives of a corporation and is intended to give them information at a glance that they can use to aid them in their day-to-day strategic decision making. The goal is to provide the executive with a view of critical trending variables that reflect the performance of the entire organization and their responsibility domain in particular, and to identify strengths, weaknesses, opportunities, and threats quickly and accurately.
The primary components of an EIS are hardware, software, interface, and a telecommunication subsystem. Although early EIS systems were mainframe-based applications, they have long since migrated to the distributed network model. Most EIS systems today operate on the typical desktop or laptop used by executives.
As with most other business intelligence (BI) software, the EIS software set comprises a database, an analytic engine, and graphically-oriented user interface. The data used to drive this application is very likely the same data underlying an enterprise resource planning (ERP) system, and the analytics may overlap as well. EIS analytic models, however, must include routine and special statistical, financial, and other quantitative analysis capabilities.
The EIS brings to the table a simplified user interface that can display analysis results in an easy to see and assimilated format. A good system will also make it possible for the executive to drill down on some of the core data and analysis, and to output the results in a variety of formats (e.g., text documents, spreadsheets, graphs).
The design of the EIS interface is critical. The primary user is a key decision maker in the organization, but he/she may or may not have significant technical expertise. The EIS needs to be highly user friendly, and needs to make it possible for operators to tailor the interface to their decision making style or the system will not be used. For this reason, most EISs are graphically oriented and use simple display techniques like meters, graphs, and scatter charts.
A well designed EIS should be location independent. The executive should be able to access the information at any time from anywhere, and ideally from any device. The first two needs are met with an effective and well designed telecommunications environment. The latter is highly dependent on the software platform chosen and the ability of the platform to operate on laptops as well as handhelds.
Although an EIS might apply to any vertical market, it tends to be most used in manufacturing, marketing, and financial sectors. However, there is growing use of EIS in healthcare and retail verticals as well.
EIS Benefits and Disadvantages
The advantages of an EIS, or executive dashboard, are fairly easy to see. Most of these systems are easy to use, provide a timely information summary, can filter extraneous data and analyze meaningful data effectively, and provide an information tracking and trending capability. They can provide a historical view of performance and might even be able to provide some degree of forecasting capability.
The limitations of these systems should also be factored in, however. The EIS will only be as good as the information it has to work with. If the underlying data warehousing and mining infrastructure is not correctly implemented or used, or the wrong set of metrics is targeted, an EIS might provide a flawed view of the organizational health. Current EIS systems are also somewhat limited in their analysis capabilities.
It is also difficult to quantify the return on investment of these systems, and so justify the cost to implement them. More often than not, these applications stand or fall solely on the executive’s satisfaction with the information provided and the interface of the system. That is to say, the value is one of perception rather than measurable ROI.
Although the EIS is intended to provide a simplified view of operational health, it can lead to information overload if not correctly configured and extraneous data is not properly filtered. The EIS might provide such a detailed a view of corporate health that the executive is tempted to micromanage his/her employees as daily performance information trends slightly downward periodically.
Another disadvantage is that data currency can be a significant problem if the EIS is not linked to the live corporate information base. If no such base exists (e.g., there is no enterprise resource planning system), data is very likely being provided by individuals reporting to the executives, and maintaining data currency can become problematic. The EIS is yet another window into the corporate data, so information security is critical. This is not simply a matter of an effective network and device security policy, but is also a matter of training the executives on personal security issues (e.g., the executive should not use the EIS platform in crowded airport waiting areas where anyone can see vital corporate performance information).
These systems can be fairly expensive to implement. Coupled with the difficulty of establishing an ROI, this may be a show stopper in many organizations.