Evolution of Executive Information and Support Systems

1. EXECUTIVE INFORMATION AND SUPPORT SYSTEM • EIS - A NEW TECHNOLOGY EMERGING IN RESPONSE TO • THE SITUATION FOR JUST THE NEED OF TOP MANAGERS. • EIS EMERGED STARTING 1982 - FROM INITIATIVE BY MIT’S • CIR. • INITIALLY, EIS WAS USED BY MORE THAN 50% IN 1989 BY • PEOPLE WITH TITLES LIKE : CEO, CFO, COO, etc. • THE TERMS EIS AND THE EXECUTIVE SUPPORT SYSTEM • (ESS) MEANS DIFFERENT THINGS TO DIFFERENT PEOPLE. • IN MANY CASES, THE TERMS ARE USED • INTERCHANGEABLY. • THE FOLLOWING ARE SOME DEFINITIONS TO DISTIGUISH • BETWEEN THE TWO :

2. EXECUTIVE INFORMATION SYSTEM • 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 REPORT. IT IS USER- • FRIENDLY, SUPPORTED BY GRAPHICS, AND PROVIDES • EXCEPTIONS’ REPORTING AND DRILL-DOWN • CAPABILITIES. IT IS ALSO EASILY CONNECTED WITH • ON-LINE INFORMATION SERVICES AND E-MAIL.

3. EXECUTIVE SUPPORT SYSTEM (ESS) • ESS IS A COMPREHENSIVE SUPPORT SYSTEM THAT • GIVES BEYOND EIS TO INCLUDE COMMUNICATION, • OFFICE AUTOMATION, ANALYSIS SUPPORT AND • INTELLIGENCE. • EIS SERVES ONLY THE TOP EXECUTIVES, IT DOES • LITTLE TO IMPROVE COORDINATION AND CONTROL • EXCEPT THROUGH THE INDIRECT EFFECT OF FOCUSING • ATTENTION THROUGHOUT THE ORGANIZATION ON THE • EXECUTIVE’S “CRITICAL SUCCESS FACTORS”. IT IS • ONLY MENT TO MAKE THE EXECUTIVE UNDERSTAND • WHERE THE ORGANIZATION IS TODAY.

4. EXECUTIVE SUPPORT SYSTEM (ESS) • IT DOES VERY LITTLE TO HELP THEM VISUALIZE • WHERE IT CAN BE IN THE FUTURE. • IT DELIVERS INFORMATION, BUT NOT INTELLIGENCE. • ESS SUPPORTS THE EXECUTIVES’ PLANNING, • ANALYSIS, AND COMMUNICATION NEEDS IN ADDITION • TO THEIR INFORMATION NEEDS.

5. UNCERTAIN FUTURE EIS DIMENSIONS DATA AND RELATIONSHIPS REPORT AND DISPLAY DIAGNOSIS AND EXPLANATION EIS ANALYSIS CAPABILITIES CERTAIN PAST

6. DSS SOFTWARE IS DESIGNED TO ADDRESS APPLICATIONS • SUCH AS STRATEGIC PLANNING AND OTHER ISSUES • WHICH DEAL WITH THE FUTURE OF THE ORGANIZATION. • DSS OFFERS SOPHISTICATED MODELING LANGUAGES AND • EXTENSIVE ANALYSIS FEATURES FOR FORECASTING AND • UNDERSTANDING THE EFFECTS OF CHANGES (WHAT IF • ANALYSIS). • AN ESS BASED ON DSS TECHNOLOGY CAN SUPPORT THE • EXECUTIVES’ INVESTIGATIONS OF THE FUTURE AND • OFFER A GREATER ABILITY TO ANALYZE AND TRULY • UNDERSTAND THE INFORMATION PRESENTED TO THEM.

7. UNCERTAIN FUTURE DATA AND RELATIONSHIPS DSS ESS ANALYSIS AND DIAGNOSIS REPORT AND DISPLAY EIS ANALYSIS CAPABILITIES CERTAIN PAST EIS/ESS/DSS DIMENSIONS

8. EXECUTIVE INFORMATION NEEDS • EXECUTIVE NEED DATA AND INFORMATION TO HELP • THEM ASSESS THEIR ORGANIZATION’S SUCCESS AND • THE PERFORMANCE OF INDIVIDUALS CRITICAL TO THE • SUCCESS. THEY ALSO NEED INFORMATION TO SUPPORT • TOP-LEVEL DECISIONS SUCH AS: • - SHOULD WE SPIN-OFF A MARGINALLY PROFITABLE • SUBSIDIARY? • - SHOULD WE OPEN ANOTHER MANUFACTURING PLANT? • - HOW MUCH LONG TERM DEBT CAN WE AFFORD TO • RISK? • INFORMATION IS COLLECTED FROM TWO MAJOR • SOURCES: INTERNAL AND EXTERNAL

9. EXTERNAL SOURCES • ON-LINE DATABASES, NEWSPAPERS • INDUSTRY NEWSLETTERS, GOVERNMENT • REPORTS • OTHER PERSONAL CONTACTS

10. INTERNAL SOURCES • FINANCIAL • ACCOUNTING • PERSONNEL • OTHER INTERNAL REPORTS

11. SUCH INFORMATION DEALS WITH NEW • TECHNOLOGIES • - CUSTOMERS • - MARKETS • - COMPETITORS • - LEGISLATION AND THE LIKE • ALL ARE ESSENTIAL COMPETITIVE TOOLS. THE • COLLECTION OF EXTERNAL DATA IS CALLED • ENVIRONMENTAL SCANNING.

12. EXECUTIVE ACTIVITIES AND INFORMATION SUPPORT _________________________________________________________ NATURE OF ACTIVITY (DECISION ROLE) PERCENTAGEOF SUPPORT _____________________________________________________________________________________ HANDLING DISTUBANCES. A DISTURBANCE IS SOMETHNG 42 THAT HAPPENS UNEXPECTEDLY AND DEMANDS IMMEDIATE ATTENTION, BUT IT MIGHT TAKE WEEKS OR MONTH TO SOLVE. ENTREPRENEURAL ACTIVITY. SUCH AN ACTIVITY IS INTENDED TO 32 MAKE IMPROVEMENTS THAT WILL INCREASE PERFORMANCE LEVELS. THEY ARE STRATEGIC AND LONG-TERM IN NATURE. RESOURCE ALLOCATION. MANAGERS ALLOCATE RESOURCES WITHIN 17 THE FRAMEWORK OF THE ANNUAL AND MONTHLY BUDGETS. RESOURCE ALLOCATION IS TIED WITH BUDGET AND ACTVITY PLANNING TASKS. NEGOTIATIONS. THE MANAGER ATTEMPTS TO RESOLVE CONFLICTS AND 3 DISPUTES, EITHER INTERNAL OR EXTERNAL TO THE ORGANIZATION. SUCH ATTEMPTS USUALLY INVOLVE COME NEGOTIATIONS OTHER 6

13. HOW TO FIND EXECUTIVES’ INFORMATION NEEDS __________________________________________________________ 1. ASKING SENIOR EXECUTIVES WHAT QUESTIONS THEY WOULD ASK WHEN THEY GO BACK FROM A THREE-WEEK VACATION. 2. USE THE CRITICAL SUCCESS FACTOR METHODOLOGY (DISCUSSED IN CHAPTER 2) 3. INTERVIEWING ALL SENIOR MANAGERS TO ASK WHAT DATA THEY THINK IS MOST IMPORTANT. 4. LIST THE MAJOR OBJCETIVES IN THE SHORT AND LONG TERM PLANS AND IDENTIFY THEIR INFORMATION REQUIREMENTS. 5. ASK THE EXECUTIVES THAT INFORMATION THEY WOULD LEAST LIKE FOR THEIR COMPETITION TO SEE. 6. EITHER THROUGH AN INTERVIEW OR THROUGH OBSERVATION, DETERMINE WHAT INFORMATION FROM CURRENT MANAGEMENT REPORTS ARE ACTUALLY BEING USED BY THE EXECUTIVE. 7. SIMPLY PROVIDE THEM MORE IMMEDIATE, ON-LINE ACCESS TO THEIR CURRENT MANAGEMENT REPORTS, AND THEN ASK THEM HOW YOU CAN BETTER TAILOR THE SYSTEM TO THEIR NEEDS. (EXECUTIVES ARE BETTER AT TELLING YOU WHAT IS WRONG WITH THAT YOU HAVE GIVEN THEM THAN TELLING YOU WHAT THEY NEED).

14. CHARACTERISTICS • DESIRED CHARACTERISTICS OF A SUPPORT SYSTEM • FOR EXECUTIVES: • - DESIGNED TO MEET THE INFORMATION NEEDS OF • TOP EXECUTIVES • - PRINCIPALLY USED FOR TRACKING AND CONTROL • - TAILORED TO THE MANAGEMENT STYLE OF THE • INDIVIDUAL MANAGER (EXTENSIVE) • - CONTAINS EXTENSIVE GRAHPICS CAPABILITIES SO • THAT INFORMATION CAN BE PRESENTED IN • SEVERAL WAYS (AND HIGHLIGHTS OF THE • IMPLICATIONS OF THE DATA PRESENTED ARE • GENERATED)

15. Exception Report Compensation Monthly Percent Variance vs Budget 10 0 Actual Budget $ Var % Var 2385 2330 55 2.4 2450 2360 90 3.8 2540 2360 180 7.6 N/A 2385 N/A N/A N/A 2400 N/A N/A N/A 2450 N/A N/A + + + 5 % -5 -10 Jan Feb Mar Apr Salaried Headcount Variance versus Budget Compensation % of Total Operating Cost 60 40 16 % 20 15 14 0 Jan Feb Mar Jan Feb Mar 85

16. - DESIGNED TO RAPIDLY PROVIDE INFORMATION FOR DECISION MADE UNDER PRESSURE, THAT IS, TIMELY INFORMATION IS A CRITICAL ATTRIBUTE. - TEXT AND TIME-SERIES INFORMATION HANDLING CAPABILITIES. - DESIGNED TO FIT THE CORPORATE CULTURE AND MANAGEMENT STYLE. - PROVIDED STATUS ACCESS -- RAPID ACCESS TO CURRENT INFORMATION. - PROVIDES “DRILL-DOWN” FOR QUICK ACCESS TO DETAILED INFORMATION BEHIND THE TEXT, NUMBERS OR GRAPHS. - INFORMATION IS ORGANIZED SO THAT MULTIPLE VIEWS OF THE DATA ARE POSSIBLE.

17. - FILTERS, COMPRESSED AND TRACKS CRITICAL DATA. - EASE-OF-USE IS CRITICAL FOR REDUCING INITIAL TRAINING. - SUPPORTS OPEN-ENDED PROBLEM EXPLANATION SINCE IT IS POSSIBLE TO ANTICIPATE MANY POSSIBLE CONTINGENCIES. - EXTENSIVE USE OF DATA ON THE ORGANIZATION’S ENVIRONMENT (COMPETITORS, CUSTOMERS, INDUSTRY, MARKETS, GOVERNMENT, INTERNATIONAL). - LINKAGE TO EXTERNAL DATABASES.

18. MOST OF THE CURRENT EIS REQUIRE A • DISTRIBUTED SYSTEM THAT INVOLVES AT LEAST • A PC WITH SPECIALIZED SOFTWARE. • THE COMMAND CENTER • - INCLUDES SOPHISTICATED COMMUNICATIONS • SOFTWARE ON BOTH MAINFRAME AND PCs. • - DOES NOT GENERALLY HAVE A MODEL BASE • - GOOD EIS PACKAGE WILL HAVE AN • INTERFACE THAT ALLOWS IT TO RECEIVE • AND TRANSMIT DATA TO AND FROM DSS, • FREE STANDING MODELS OR OTHER CBI. • EXECUTIVE EDGE IS AN ADVENCED EIS WHICH • INCLUDES EXTENSIVE MODELING CAPABILITIES.

19. HARDWARE • MAINFRAME -- GENERALLY INFLEXIBLE • PCs AND MAINFRAME OR PC AND • MINICOMPUTER • PCs ONLY, WITH INFORMATION DOWNLOADED • ONTO STAND ALONE LANs AND THEN • DELIVERED TO THE PCs • WORKSTATIONS, MORE TO COME IN THE FUTURE • ALL FOUR OPTIONS HAVE EXTENSIVE GRAPHICS • CAPABILITY

20. Data Bridge brings data from widely varying systems together into one executive database. It integrates commercial databases, on-line public databases and in house systems [including DSS models or4GL DBMS] COMMAND CENTER SOFTWARE ON MAINFRAME EXTERNALDATA INTERNALDATA DATA IMPORT EIS Database : A retrieval oriented relational database that handles both numbers and text, optimized for time-series data. It’s smart enough to continually re-organize itself based on patterns of usage. Menu Systems: Gives mouse or touch-screen driven operation, controlled from the host. Provides the user with the ease of use of a PC with the database power of a mainframe. Graphics : The PC graphics module create bar, line, scatter, cross-sectional charts, and missed text, and graphics from data and commands sent from the mainframe. Local Menu Storage : Menu screen can be stored on the PC so that they don’t have to be re-transmitted from the host. User Interface : Non-keyboard pointing devices such as a mouse or touch screen are used for menu selection. Keyboard access is an option. LANGUAGE ROCESSOR DATA BASE MENU SYSTEM COMMUNICATIONS Smart Communications : Provides error-correcting communications with the user’s PC in a protocol that produces rapid and accurate response. Also allows transfer of data from EIS database to1-2-3 readable PC files. COMMAND CENTER SOFTWARE ON PC COMMUNICATIONS GRAPHICS MENU SYSTEM USER INTERFACE

21. INTEGRATION EIS AND DSS • IN A GENERAL SENSE, EIS IS REALLY PART OF THE • THE DECISION SUPPORT FIELD. • EIS AND DSS ARE TWO DIFFERENT BUT • COMPLEMENTARY APPLICATIONS AND INDEED • COMPLEMENT EACH OTHER. • EIS FOR CONTINUOUS TRACKING OF • INFORMATION TO KEEP TOP MANAGER ABREAST • WITH WHAT IS HAPPENING. • EIS IS STRUCTURED. ITS MAJOR ROLE IS TO • PROVIDE INFORMATION - COMMUNICATION • DEVICE. • DSS IS SEMI OR UNSTRUCTURED. IT PROVIDES • ANALYSIS CAPABILITIES, CAN PROVIDE ANSWERS • TO “WHAT IF”, “WHY”.

22. AN EIS CAN BE INTEGRATED WITH A DSS. • EIS AND DSS CAN ALSO BE INTEGRATED WITH • AN EXPERT SYSTEM TO CONDUCT EVEN MORE • SOPHISTICATED ANALYSIS

23. EIS DSS DEVELOP PLAN REVIEW HISTORY DEVELOP PROJECTIONS “WHAT IS” “WHAT IF” ALTERNATIVES FINALIZE PLANS MONITOR PERFORMANCE TRACK PERFORMANCE (“WHAT IF”) AGAINST PLAN STRUCTURED ANALYSIS - CONTINUOUS - AUTOMATED COMPOSITE SUMMARIES INTERNAL AND EXTERNAL ANALYZE DYNAMICS SIMPLE ANALYSIS COMPLEX ANALYSIS (“WHY”) EXECUTIVE-DRIVEN ANALYST-DRIVEN LOGICAL ACCESS TECHNICAL ACCESS (FROM SUMMARIES RAW DATA TIME-SERIES VIEW UNSTRUCTURED STANDARD FORMAT) REVISE PLAN NEW PROJECTIONS NEW ALTERNATIVES NEW OPERATING PLANS