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Executive Information Systems: An Overview Of Development

Robert H. Reck and James R. Hall
(Adapted from original submission to Journal of Information Systems Management, Fall 1986)

Technological advances have resulted in such a profusion of information that sifting through reams of data to find relevant management information has become almost impossible using traditional MIS tools. The executive information system concept represents a total break from traditional DP design and a means to gather and assess relevant management information. This article provides an overview of executive information systems for the MIS manager who will be contending with executive information systems more and more.

Not long ago, although business information distilled for executives was inaccessible or difficult to extract, managers usually had enough time to gather and evaluate reams of MIS-supplied data. Managers still needs this information, but now organizations are larger and more complex, and decision time frames are shorter (see Exhibit 1). In addition, increased economic uncertainty, broadened competitive pressures, a larger quantity of collecting and analyzing this data combine to make the information gathering process both more difficult and more crucial.

Attempts to use MIS concepts to provide this kind of information have failed repeatedly. Because the MIS approach was designed to monitor transaction-oriented systems involving financial or manufacturing control, the data provided by those systems does not meet the needs of managers who require information oriented toward the business as a whole.

The tools managers need to isolate and obtain appropriate information are now available. Matching computer hardware with the correct software enables managers, their staffs, and MIS departments to use systems tailored to larger business problems. One set of such systems delivers only information critical to managers and is user- or business-problem driven. The systems in this set are known as executive information systems (EIS).

This MIS manager must understand the requirements this new set of users has and how systems should be designed to meet those requirements. This article describes executive information systems and their development, both of which represent a radical departure from traditional data processing.

The EIS filters voluminous data to provide information that managers consider crucial to the achievement of business goals and objectives. An EIS can be tailored to the needs and style of a senior-level executive or management team, allowing it to analyze only the information most pertinent to the decision at hand, thereby eliminating the need to sort through piles of paper and corporate staff reports.

The EIS approach is a subset of the new information systems called management support systems (MSSs) (see Exhibit 2). Technologies supporting MSSs include information centers, personal computers, and spreadsheet and graphics software. Organizations that understand how MSS and EIS concepts differ from the traditional MIS approach and manage their MSS activities accordingly can derive the full potential of this new generation of information systems.

The tools to gather and manipulate information provide users with the ability to see, model, analyze, or hypothesize about a particular corporate or divisional situation. An EIS combines the manager's imagination and judgment with the computer's ability to store, retrieve, manipulate, and compute data.

An EIS provides three distinct functions. In order of increasing sophistication, they are data access ("What is it?" information), data manipulate for analysis ("What does it mean?" information), and structured data manipulation for modeling and stimulation ("What if?" information). Exhibit 3 represents a conceptual EIS model. The functions are in the shaded area of the model. An EIS can enable managers to obtain detailed transaction-level data (e.g., information on a particular customer account) and can refer special questions to staff analysts. A communications capability provides an output channel for the managers to disseminate information after they have determined a solution to a problem.

The area that managers should focus on in defining their EIS depends on the critical business functions to be analyzed and the type of information needed (see Exhibit 4). Although the capabilities of EISs vary widely among organizations, managers usually emphasize one of the following business functions more than the others: discovery, planning, execution, and monitoring and control.

An EIS can be tailored to the needs of the management team, thereby eliminating the need to sort through piles of staff reports.

The first stage of EIS implementation is usually the development of a data access capability because managers must determine the status of key variables before formulating an action plan. If managers are limited to the data access function during initial use, they have a chance to become familiar with the computer and explore the system's capabilities at their own pace. Many organizations provide only data access to mangers, leaving data manipulations to professional information managers.

Most managers, however, require data analysis and manipulation. Such personalized analysis requires that managers work with the system designers to interpret the information provided. Although interpretation differ among managers, the important point is to review and analyze the information on which important decisions about the business with be based.

Sophisticated modeling is a powerful management tool using internal and external data bases for economic simulations. Modeling combines information and analysis to improve the decision-making process, enabling managers to address the most relevant issues quickly and incisively.

Defining the issues that determine successful achievement of business objectives is the first step toward implementing an EIS. Information is valuable only if it addresses the issues that are most relevant to the manager and the business. Managers must therefore determine the best opportunities for applying an EIS.

Information requirements for an EIS can be determined by asking the following questions:

• What are the primary business objectives?



• What factors are most instrumental in achieving these objectives?



• What indicators best track the behavior of each factor?

The critical success factor (CSF) methodology can be used to separate primary business objectives into specific factors critical to the success of the organization.

Modeling combines information and analysis to improve the decision-making process, enabling managers to address the most relevant issues quickly and incisively.

An EIS prototype should be used to develop and test the preliminary collection, manipulation, interpretation, and communication of data. Using a prototype allows managers to experiment with the approach, review its benefits and costs, and assess its tangible results in a relatively risk-free environment.

By using a prototype, management develops a system based on the experience gained while initially attempting to use the system. The prototyping concept recognized that managers, like other experienced business personnel, find it difficult to articulate their complete information support needs in one preliminary requirements definition.

Using prototypes requires that managers identify the problem or issue to be addressed, the initial project team, and a test environment (e.g., one product line, sales region, or part of a problem). When an environment is chosen, the prototype is built, used, and modified until it meets the full set of executive needs. Often, however, a prototype can provide valuable insight into business problems from its inceptions.

For example, one sales executive used an EIS that provided sales forecast information. Before long, this system was replaced by one that also provided information on production and product installation

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Archive Articles (below)

• Designing Executive Information Systems
• Executive Information Systems: An Overview of Development
• Implications of Transition From an Industrial Era to One of Information
• Critical Success Factors Techniques can Apply to Team Management, Too
• Decision Scenarios Ensure Information System Meets Business Needs
• Critical Success Factors : Helping IS Managers Pinpoint Information Needs
• Combining Quality and Reengineering for Operational Superiority
• Steering IS Committees Straight
• Internal Consultants and a Consultative Approach
• EIS Plays Critical Role in Reengineering
• Rapid Software Selection

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