An executive information system (EIS) is a management support system that facilitates and supports the decision-making requirements of an organization’s senior executives. Hence, it is also called an “executive support system (ESS).”
As a decision-making tool, it gives top executives easy access to internal and external information relevant to their organizational goals. As such, it is also considered a specialized decision support system (DSS).
Contents
- What Are the Characteristics of an Ideal Executive Information System?
- What Are the Components of an Executive Information System?
- What Are the Benefits of Using an Executive Information System?
- What Are the Disadvantages of Using an Executive Information System?
- How Does an Executive Information System Differ from a Decision Support System?
- Key Takeaways
Read More about an Executive Information System
Because its target users are typically busy people who often travel, an EIS must be easy to use and can be accessed anytime and anywhere.
What Are the Characteristics of an Ideal Executive Information System ?
Not all company executives are tech-savvy. As such, an ideal EIS should have a graphical display that has an easy-to-use interface. Executives should be able to see all the variables and trends needed to make sound business decisions in a single dashboard. That way, they can make comparisons and projections to ensure growth.
Note, too, that each executive specializes in a particular business area. As such, an ideal EIS should have drill-down capabilities that will enable them to zoom in on areas that fall under their responsibility.
What Are the Components of an Executive Information System ?
An EIS has four major components, which are:
- Hardware
- Software
- User interface (UI)
- Telecommunications capability
Hardware
An EIS’s hardware should include input devices that executives can use to enter, check, and update data; a central processing unit (CPU) that controls the entire system; data storage for saving and archiving useful business information; and output devices (e.g., monitors, printers, etc.) that show visual representations of the data executives need to keep or read.
Software
An EIS’s software should be able to integrate all available data to provide cohesive results. It should be capable of handling text and graphics; be connected to a database that contains all relevant internal and external data; and have a model base that performs routine and special statistical, financial, and other quantitative analyses.
User Interface
This component should be capable of producing scheduled reports, FAQs, and other information. It would be best if it’s menu-driven, too, allowing executives to pick from predetermined choices for their needs. And since not all executives are tech-savvy, it’s ideal for the UI to accept inputs and produce outputs using programming (i.e., for the tech-savvy) and natural language (i.e., for the not tech-savvy).
Telecommunications Capability
Since most executives often travel, an EIS should have telecommunications capability. That way, it remains accessible regardless of location.
What Are the Benefits of Using an Executive Information System ?
Using an EIS provides the following benefits:
- Easy for any executive to use
- Provides the ability to analyze trends
- Augments an executive’s leadership capabilities
- Enhances personal thinking and decision-making
- Makes strategic control flexible
- Enhances an organization’s market competitiveness
- Creates better reports
- Improves consensus building and communication
- Enables office automation
- Reduces time required to find information
- Enables company performance predictions
- Allows detailed examinations of critical success factors
What Are the Disadvantages of Using an Executive Information System ?
Despite providing several advantages, EIS usage has cons, too, such as:
- Limited functionality
- Hard to quantify the benefits
- Possible information overload on an executive’s part
- System may become slow over time
- May lead to system insecurities
- May be too expensive for small companies
How Does an Executive Information System Differ from a Decision Support System?
An EIS is considered a specialized DSS because it has a few differences from the latter. They specifically differ in focus, typical users, primary goal, applications, decision-making support capability, information provided, user adaptability, graphic ability, ease of use, information processing capability, and supporting information provided. Look at the following table for a blow-by-blow comparison of the two.
| CHARACTERISTIC | EIS | DSS |
| Focus | Overall status that can be drilled down into specific components | Specific data analysis for decision-making support |
| Typical users | Company executives | Professionals, analysts, and managers |
| Primary goal | Expediency | Effectiveness |
| Applications | Performance evaluation, environmental/market/industry scanning, and problem and opportunity identification | All areas that require managerial decisions |
| Decision-making support capability | Indirectly supports high-level and unstructured decisions and policies | Supports unstructured and nonprogrammed/ad hoc decisions |
| Information provided | News, customer information, event/incident data, competitor information, external environment data, and scheduled and on-demand internal reports | Specific incident/event information |
| Principal use | Tracking, identifying, and managing opportunities | Planning, organizing, staffing, and management |
| User adaptability | Customizable to fit the decision-making style of executives and offers several output alternatives | Permits individual judgments and has what-if capabilities |
| Graphic capability | Must have | Nice to have |
| Ease of use | Must have | Nice to have |
| Information processing capability | Tracks critical data and filters and compresses information | EIS generates questions for DSS to answer and send back to EIS |
| Supporting information provided | All supporting data required for summaries is readily available | All supporting data is obtainable but not readily available |
The two systems also differ in model base, construction, hardware, software, and nature of the information provided. For instance, a model base is a DSS must-have but is only nice to have in an EIS. An EIS is built by vendors or information system (IS) specialists, while a DSS is developed by its users.
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While EIS usage can significantly benefit companies, its popularity has declined with business intelligence availability. That is not to say, however, that other information systems meant for executive use will be discontinued. In fact, the global customer information system market’s size is expected to reach US$1.75 billion in 2025.
Key Takeaways
- An EIS, also known as an “ESS,” is a management support system that facilitates and supports the decision-making requirements of an organization’s senior executives.
- An ideal EIS should be able to produce graphical representations of data on a single dashboard and have drill-down capabilities for users with specific requirements.
- An EIS has four major components—hardware, software, a UI, and telecommunications capability.
- The EIS usage pros include being easy for any executive to use, providing the ability to analyze trends, augmenting an executive’s leadership capabilities, and more.
- The EIS usage cons, meanwhile, include limited functionality, hard-to-quantify benefits, possible information overload on an executive’s part, and others.
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