TOPIC 7 - EXECUTIVE INFORMATION SYSTEMS (EIS) Flashcards
Describe five major features expected in an EIS.
a) Available Databases
An EIS usually accesses information from all the internal databases of the organisation. It includes information about vendors, production, customers and related financial data. EIS would also access databases available externally, particularly those that provide industry-related information and, if necessary, business-related news to the executives. EIS should be able to filter large amounts of external data in order to be relevant. For example, the Dow Jones News Retrieval allows its subscribers to filter what they want to read based on their preferences. In addition, there are also other alternatives such as having a dedicated team of public relations experts who will scan and review the relevant materials before it is entered into the EIS.
(b) Multidimensional Databases
Databases that can be organised in various ways and displayed using multidimensional views will make the EIS more effective. For instance, a sales database should be able to provide information presented in terms of groupings or categories according to customer types, shipping locations or product segments. The underlying databases directly influence the nature and type of queries that the EIS can make. In todayÊs business environment, the EIS also needs to be designed to run on different types of operating platforms and/or devices such as personal computers, iPads and smartphones. The different devices should be able to retrieve data from database systems that are different in terms of technology or platform. This is because todayÊs information systems are evolving continuously. They have evolved from single-vendor and closed systems to more open sourcing from multiple vendors.
(c) Timeliness
An important factor of the EIS is that it can display real-time and updated information. In fact, the best systems are expected to provide information up to the latest minute. However, this time-sensitivity of information requirement might vary on a case-by-case basis. In many instances, extracting data from a host database and subsequently downloading it to a special EIS database through a process carried out on an overnight batch platform is sufficient for most organisations. It must be noted that while operational managers use real- time data, it is crucial for the EIS to provide online and interactive updates on the information. This would allow managers to use the information for process intervention when the need arises.
d) Soft Information
Soft information refers to information that is imprecise such as estimates and approximations as well as non-numerical terms such as „generally within expectations‰, „fairly optimistic‰ or „a little low‰. There is an increasing trend towards using non-financial or soft information in EIS to report on any positive or negative implications. EIS are also increasingly obtaining soft information, leading to positive perception of the value of the system in general. This trend is driving most EIS developers to cover soft information, which includes forecasts, predictions, estimates and speculations, among others.
(e) Graphics
One of the major success contributors of early EIS was their user-friendly interfaces. With the addition of graphics, it was a huge jump in improvement from the more traditional, text-based systems. Graphic environments and interfaces are a lot more common today. Most EIS adopt a certain colour scheme to indicate the status of certain data. The use of graphic screens and menus is very common. You will notice that red is commonly used to depict danger or warning while green is commonly used to classify acceptability. A uniform colour scheme can help dispel areas of concern efficiently for the user.
(f) Natural Language
EIS commonly adopts the use of natural language, also known as fourth- generation language, to interact with the user. This means that the user does not need to know or remember complex or technical computer commands in order to request information or manipulate data. Similarly, technical staff also use natural language tools to enter commands into the system in order to build mathematical or statistical functions for the executives.
(g) Communication
Easy-to-use messaging in the EIS enables the executives to communicate with others within the system. EIS interface facilitates planning and strategising by enabling executives to quickly and efficiently exchange textual or graphical messages. Some EIS may integrate their messaging function with commonly used external messaging tools such as e-mail and mobile apps. Furthermore, it is very common for newer EIS packaged software to offer workgroup-oriented platforms that enable executives to have direct communication with the staff working on group projects. More recent EIS are contemplating to include the use of voice and video messages through their interfaces.
h) Drill Down
This is an analytical tool that enables the executives to start from a general or macro point of view before zooming into the details. Figuratively speaking, it is drilling down into the layers of data to obtain more specific analysis or to discover the underlying information. The EIS will usually facilitate such analysis using GUI or through integration with commonly used applications such as a spreadsheet.
(i) Decision Support Analysis
For analysis that is more sophisticated than those provided by standard spreadsheets, the EIS has the capability to perform this function by providing tools for time-series analysis, optimisation analysis using linear programming and higher level statistical analysis. As computer systems become more powerful, research into EIS is moving into the possibility of making the systems capable of discovering knowledge within its data sets. This will potentially blur the line between EIS and expert systems.
(j) Executive Information System Shells
EIS usually comes with a „shell‰ these days. It serves as a simplified development tool for executives to customise their own user interface, for example, in terms of GUI elements, appearance of windows, user prompts and input boxes as well as to specify their own codes and commands, menu or screen designs and report formats. It is called a shell because it is the user- facing outside layer that presents the EIS as an easy-to-use program while in reality it is hiding the actual complexity of the system in order not to appear imposing.
Describe the four components of MKIS.
These components are further explained in the following:
(a) Internal Records System
The internal records system is a source of information that is easily accessible. It is a very important component of the model and includes all the records used in marketing for a particular business. The system deals with processes which include collecting, analysing, interpreting and distributing the marketing information to the relevant departments in the organisation.
Sources of this information include records in the ordering system, the reporting system for sales, inventory control, sales and purchase operations, marketing staff, costing for marketing, past research as well as accounts receivable and payable. Computer technology would be used extensively to provide timely and accurate information.
Some organisations employ an internal MIS committee to manage the internal records system and to deal with the internal information from all aspects.
The roles of this committee would include:
(i) Attending to requests by managers for any information;
(ii) Identifying and determining the tools required to collect, evaluate and analyse information as well as the sources of data and information;
(iii) Handling information in terms of presentation, distribution and updates;
(iv) Handling employeesÊ complaints related to the information; and
(v) Carrying out any processes or functions required to manage the information.
The internal records system is expected to regularly circulate the information for operations across the organisation without incurring much expense or effort. The information regarding marketing operations and activities should be readily available for managers. Once the system is set up, it should be self- sustaining.
(b) Marketing Intelligence System
The marketing intelligence system enables marketing managers to obtain information regularly about the ongoing developments of the marketing industry. The system automatically curates and channels the information to the managers about the external environment. Sources of such information may include the following:
) Literature such as books, publications and newspapers;
(ii) Mass media such as television and radio as well as the Internet;
(iii) Communications with stakeholders such as customers and suppliers;
(iv) Communications with counterparts from other companies (their managers and employees);
(v) Contacts or officials in government agencies;
(vi) Professional sources that are related to the marketing industry; and
(vii) Professional agencies that provide marketing intelligence tasks.
An effective marketing intelligence system can be very useful. Among its functions include helping managers to take actions which could be reactive or proactive. For example, meeting the changing needs of its customers or reacting to a competitorÊs recent campaign.
(c) Marketing Research System
In MKIS, marketing research plays an important role. It is a powerful independent branch of the system. Managers sometimes need very detailed and very specific information on certain marketing-related issues. This would require a formal study on the problem and the related issues. The marketing research system is usually used to solve a non-routine problem. The system will collect information based on a certain need. In some ways it is treated as a separate subject or discipline.
In marketing research, primary and secondary data from various respondents are collected including from the aforementioned internal records and marketing intelligence system. This is done through various tools and methods carried out over time. The data is analysed using statistical tools and presented in a report form. In most cases, internal expert staff or external professionals are employed to carry out such exercises.
(d) Marketing Decision Support System (MDSS)
The purpose of the marketing decision support system (MDSS), also called the analytical marketing system in older MKIS, is to improve the efficiency of how the marketing information system is used. The MDSS is important as it helps managers in the decision-making process by providing interpretations of relevant information.
Generally, there are two subcomponents in the MDSS, namely the statistical and model banks. The former is used for marketing decision making and is mainly made up of quantitative tools known also as operations research (OR). The tools used in the analysis of data include:
(i) Basic forms of statistical techniques such as median and average;
(ii) Regression and multiple regression analysis;
(iii) Discriminant analysis;
(iv) Correlation analysis;
(v) Factor analysis;
(vi) Cluster analysis;
(vii) Input-outputanalysis;
(viii) Conjoint analysis; and
(ix) Multidimensional scaling.
On the other hand, model banks consist of models used in decision making. These models can be a series of variables that the program uses to represent certain real-life systems as well as how they interrelate with one another. In most cases, they are developed by OR researchers or scientists. Different models are adopted for different purposes. The better known ones are:
(i) New product pre-test model;
(ii) Queuing model;
(iii) The Markov-Process analysis;
(iv) Sales response model;
(v) Discrete choice model;
(vi) Differential calculus;
(vii) Mathematicalprogramming;
(viii) Statistical decision theory;
