The Executive Information System/Executive Support System (EIS/ ESS) is a relatively new decision-facilitating technology. EIS/ESS has emerged in response to the emerging dynamic situation where the top executives are bombarded with the massive amount of data, effectively leading to “information overload” with the resultant understandable confusions and dilemma. EIS/ESS emerged, indeed the emergence became imperative, due to various factors, both internal and external, in the corporate operating environment worldwide.
According to Watson and others, EIS/ESS has become imperative due to certain internal and external factors as enumerated below.
1. Internal factors
• Need for timely information.
• Need for improved communications.
• Need for access to operational data.
• Need for rapid status updates on various business activities. • Need for access to the corporate database.
• Need for more accurate information.
• Need for an ability to identify historical trends.
2. External factors were Increasing and intensifying global competition.
• Rapidly changing business environment.
• Need to be more pro-active.
• Need to access the external database.
• Increasing Government regulations (though active Government role is shrinking).
Executive information system is developed to support decision-making actions/processes at the top executive/ management level. EIS/ESS is used by the top executives as they require specialized support when/while making strategic decisions. EIS/ ESS is required and used at fairly senior level including members of the board of directors and executives with the titles of Chief Executive Officer (CEO), Chief Operating/Operations Officer (COO), Chief Finance Officer (CFO) and the like. While, earlier, most of the top executives were reluctant users of Information Technology, the new generation of tech-savvy top executives is not only open to, but expects support from computer-based information systems like EIS/ESS.
EIS/ESS is, in a way, specialized DSS that includes all hardware, software, data, procedures, and people used to assist senior/top-level executives within the organization. The primary goal of EIS/ESS is to obtain data from a variety of sources, integrate and aggregate that data and display the resulting information in an easy-to-use comprehensible
Executive information system definition
An EIS is “a computer-based system that serves the information needs of top executives. It provides rapid access to timely information and direct access to management reports. It is very user-friendly and is supported by graphics, providing exception reporting and drill-down capabilities. It can also be easily connected with online information services and electronic mail”. (Drill-down capability is an important capability that enables the users to break down data in details. It enables users to identify both problems and opportunities). An EIS is “a computer-based information system that combines the decision-makers imagination and judgment with the computer’s ability to store, retrieve, manipulate, compute and report internal and external information”.
Executive support system definition
An ESS is “a comprehensive executive support system that goes beyond the EIS to include communications, office automation, analysis support and intelligence”.
Broadly, for the sake of convenience, the characteristics could be divided into three categories:
1. Informational characteristics
• Flexibility and ease of use.
• Provides timely information with short response time and quick retrieval.
• Produces correct information.
• Produces relevant information.
• Produces validated information.
2. User interface/orientation characteristics
• Contains sophisticated “self-help”, user-friendly interfaces
including Graphic User Interface (GUI).
• Facilitates access from many places.
• Provides secure, reliable and confidential access and access procedure.
• Customised/tailor-made to suit the management style of individual executives.
3. Managerial executive characteristics
• Provides support for defining overall vision, mission, and strategy as it has a strategic/futuristic orientation.
• Includes support for strategic management (strategic planning/ organizing/controlling/staffing, etc.).
• Can help with situations that have a high degree of risk/uncertainty.
• Is linked to value-added business processes.
• Supports the need/access to/to the external data/databases.
• Has capabilities like “drill-down,” “exception reporting” and
“critical success factors” identification.
• Has a high result/performance orientation.
1. It provides access to aggregated/macro/global information.
2. It enables the user to use external data extensively.
3. It allows addressing ad-hoc queries/analysis.
4. It incorporates graphic and text in the same display to provide the better view.
5. It shows trends, ratios, and deviations.
6. It provides access to historical as also the latest data.
7. It highlights problem indicators and supports open-ended problem explanation with written interpretations.
8. It is organized around critical success factors and provides “Management By Exception” Reports.
9. The information can be presented in a hierarchical structure, thereby facilitating detailed information at various levels, along with drill-down Capabilities.
10. It filters, compresses and tracks critical data and also provides forecasting capability.
11. It can utilize hypertext and hypermedia.
12. It provides a generalized computing and telecommunications capacity that can be applied to a changing array of problems.
With the type of capabilities, as mentioned earlier, the EIS/ESS confers lots of benefits upon the users both individual and corporate. The benefits of
EIS/ESS can be summarised as follows:
1. Facilitates the attainment of organizational objectives.
2. Facilitates access to information by integrating many sources of data and provides broad, highly aggregated information. This, in turn, promotes broad, aggregated “perspective” and “context.”
3. Improves the users’ “productivity” by enabling more effective decision-making.
4. Allows the anticipation of problems/opportunities and facilitates pro-active rather than a reactive response.
5. Increases communication capability and quality.
6. Facilitates better strategic planning and control.
7. Facilitates finding the cause of a problem in a “root-cause analysis” mode rather than “fix-it” mode.
8. Meets the needs of the executives in time-effective and time-efficient Manner.
9. According to Rockart and Treacy, executive information system also helps in providing answers to questions like:
a. What business should the organization be in?
b. What are the competitors doing?
c. What new acquisitions/activities would protect the organization from business cycles/business swings?
d. Which units should the organization divest/spin-off to raise cash for further expansion/diversification/ acquisition?
10. The executive information system provides the competitive advantage.
11. The most important benefit, of course, is that executive information system encourages the development of a more open and active information culture, as EIS/ESS improves the use of the strategic information resource that is at the disposal of the organization for working out both strategic and tactical decisions.