FAIRFIELD INSTITUE OF MANAGEMENT AND TECHNOLOGY

IMPACT OF EXECUTIVE INFORMATION SYSTEM IN AN ORGANIZATION

INFORMATION SYSTEM MANAGEMENT

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SUBMITTED TO: SUBMITTED BY:

Mr. Rajkumar Garg Komal Sharma

00751488819
Bcom (H)/5th Semester

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IMPACT OF

EXECUTIVE INFORMATION SYSTEM

IN AN ORGANIZATION

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 INDEX

S.NO. CONTENT PAGE NUMBER

1 Introduction 4

2 Objective 5

3 Components of EIS 6

4 Characteristics of EIS 7-8

5 Impact of EIS in an Organization 9

6 Importance of EIS 10-11

7 Conclusion 12

8 Bibliography 13

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 INTRODUCTION

An executive information system (EIS) is a decision support system (DSS) used to assist senior executives in the decision-making
process. It does this by providing easy access to important data needed to achieve strategic goals in an organization. An EIS normally
features graphical displays on an easy to use interface. Executive information systems can be used in many different types of
organizations to monitor enterprise performance as well as to identify opportunities and problems.

Early executive information systems were developed as computer-based programs on mainframe computers to provide a company’s
description, sales performance and/or market research data for senior executives. However, senior executives were not all computer
literate or confident. Moreover, EIS data was only supporting executive-level decisions but not necessarily supporting the entire
company or an enterprise.

Current EIS data is available company- or enterprise-wide, facilitated by personal computers and workstations on local area networks
(LANs). Employees can access company data to help decision-making in their individual workplaces, departments, divisions, etc. This
allows employees to provide pertinent information and ideas both above and below their company level.

The typical EIS has four components:

➢ Hardware
➢ Software
➢ User interface
➢ Telecommunication.

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 OBJECTIVE

➢ Explain concept of EIS

➢ Explain components of EIS
➢ Discuss characteristics of EIS
➢ Impact of EIS on organization

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 COMPONENTS OF EIS

▪ HARDWARE: Hardware refers to devices by which users give input, data processing and the output is received. Users may
give input via keyboard and mouse and CPU may be used for processing and output may be received on monitor or from
printer.

▪ SOFTWARE: Software is required for various calculations, providing graphical view to the management, storing data in the
form of Information, etc. Software allows user to get information in the form it is actually required.

▪ USER INTERFACE: User Interface allows the users to communicate with the EIS. User interface must be easy to use and
understand. Users should not be required to understand the complex query languages and other mathematical or statistical
formulas.

▪ TELECOMMUNICATION: In today’s world the most important thing is communication. Users may require transferring
information from one point to another point. The information might be a little confidential in nature. The secrecy of the
information should be well maintained.

▪ DATABASES AND DATA WAREHOUSES: This component is where the “material” that the other components work with
resides. A database is a place where data is collected and from which it can be retrieved by querying it using one or more
specific criteria. A data warehouse contains all of the data in whatever form that an organization needs.

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 ▪ HUMAN RESOURCES AND PROCEDURES: The final, and possibly most important, component of information systems
is the human element: the people that are needed to run the system and the procedures they follow so that the knowledge in the
huge databases and data warehouses can be turned into learning that can interpret what has happened in the past and guide
future action.

CHARACTERSTICS OF EXECUTIVE INFORMATION SYSTEM

• Informational characteristics
i. Flexibility and ease of use.
ii. Provides the timely information with the short response time and also with the quick retrieval.
iii. Produces the correct information.
iv. Produces the relevant information.
v. Produces the validated information.

• 2. User interface/orientation characteristics

i. Consists of the sophisticated self help.
ii. Contains the user friendly interfaces consisting of the graphic user.
iii. Can be used from many places.
iv. Offers secure reliable, confidential access along with the access procedure.
v. Is very much customized.
vi. Suites the management style of the individual executives.

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 • 3. Managerial / executive characteristics
i. Supports the over all vision, mission and the strategy.
ii. Provides the support for the strategic management.
iii. Sometimes helps to deal with the situations that have a high degree of risk.
iv. Is linked to the value added business processes.
v. Supports the need/ access for/ to the external data/ databases.
vi. Is very much result oriented in the nature.

EXECUTIVE INFORMATION SYSTEM / EXECUTIVE SUPPORT SYSTEM BENEFITS

• Achievement of the various organizational objectives.

• Facilitates access to the information by integrating many sources of the data.
• Facilitates broad, aggregated perspective and the context.

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 IMPACT OF EXECUTIVE INFORMATION SYSTEM IN AN ORGANIZATION

Managerial decision making is regarded as among the most important functions of senior managers. The presence of easily accessible,
reliable information contributes to effective decision making. Sources of information may be oral, written, or computer-based. The
computer-based information sources remain the least studied in the context of executive decision making because executives have
tended to use other managers and their own intuition as their primary information sources. Recently though, computer-based
information systems directly tailored for use by executives have begun to be implemented within organizations. Such systems,
referred to as Executive Information Systems, may help executives make faster and higher quality decisions, an increasingly important
requirement for executives given such trends as globalization and heightened competition. This study uses survey responses of 91 high
level managers to empirically examine the relationship of executive information system use by managers with decision making speed,
problem identification speed, information availability, and the involvement of subordinates in decision making. The study found that
when used frequently and over time, executive information systems are positively related to perceived problem identification and
decision making speed for senior and middle managers. Whether such effects lead to higher quality decisions are topics for further
study. In addition, the frequency of use of executive information systems is shown to be related to a perceived increase in information
availability although the length of time the system is in use is not related to perceived information availability. This suggests that the
information needs of senior and middle managers is malleable and systems designed to support the decision making of managers need
to be flexible to adapt to changing information needs.

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 IMPORTANCE OF EXECUTIVE INFORMATION SYSTEM IN AN ORGANIZATION

Managers must have relevant information that increases their knowledge of internal processes and external business environment. This
knowledge reduces the degree of uncertainty and makes managerial decisions more rational and practical. Without relevant
information most of the decisions made by managers will be like trial and errors, which in turns decrease the efficiency and
profitability and increase the uncertainty with in the organization. The main benefits if an information system can be discussed as
follows:

1 Economic Importance:

Even though the cost of installation and maintenance of an information system quite high (depends upon kind of system) in the
beginning, but in due course the costs drops and appears fair deal when compared to kinds of benefits enjoyed with the help of it. Also
with the passage of time cost of information systems tends to decrease, whereas, costs of its substitutes (for instance labour) has been
historically tends to rise (Laudon, 1990). Furthermore, information systems use networks, which help an organization to reduce the
transaction costs, by making it worthwhile for organization to contract external suppliers instead of using internal resources. For
instance, the Chrysler Corporation reduces costs by obtaining more than 70% of its parts from other supplier by using computer links (
Laudon and Laudon, 9th Ed. ).

2. Information Systems Improve Performance:

Information Systems are designed to improve the overall efficiency and effectiveness of a process. The information systems speed up
the process and reduce the time by removing non-value adding steps in the operation. For instance, Citibank developed the Automatic
Teller Machines and Bank Debit Cards in 1977( Laudon and Laudon 9th Ed.). It made financial transactions easy and was a huge
success. Further, banks continued to innovate and these days with the help of reliable and secure information systems from
TEMENOS, Infosys, Oracle etc, most of the customer can do majority of transaction from their home computer or even from mobile

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telephone. Moreover, information systems provide real time information which reduces the scope of errors, hence, increases the
quality of the output of the process.

3. Importance in Decision Making:

Information Systems provides the tools for managers enabling them to monitor, plan and forecast with more precision and speed then
ever before. They also enable managers to respond more rapidly and adapt swiftly to the fast changing business environment. The
Decision Support Systems can significantly improve results both on quantitative and qualitative fronts. For instance, there are around
142 million employees working in United States generating $12.2 trillion of Gross Domestic Products. If the decision making quality
of these employees could be improved by just 1% in a year the GDP might be expand substantially. “This implies for any organization
the ability of manager or employees to make right decision at right time with the help of right information can have extraordinary
business value” ( Laudon and Laudon 9th Ed.).

4. Organizational Behavior Change:

Behavioral researches illustrate that information systems facilitate flattening of hierarchies by broadening the distribution of
information to empower lower-level employees. It pushes the decision making rights to the lower level in the organization as the
lower level employees receives the information they need to make decisions eliminating the need of middle managers(Laudon and
Laudon 9th Ed.). This also leads to the reduction is the administrative costs of the organisation. For example, after installing ERP
system Knust-SBO Precision Machining1 of Texas, reduced the administrative staff by 50% and at the same time improved the
accuracy of on -time deliveries from56.5% to 95%.

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 CONCLUSION

The report on Management information systems reviews the role of information systems in an organization. It is a system through
which organization takes an effective decision which help to attain the overall objectives of an organization. A management
Information System is a system which consists of people, computers and procedures for collecting and organizing of information that
will help mangers to take decision in an organization. It aims as to provide information to the top level managers so that they can take
effective decisions in an organization.

Information system is a system which helps manager to make effective decisions for an organization. Information system can be
defined as a set of interrelated components that collect, process, store and distribute information to the management of an organization
for making effective decisions, to ensure coordination and control in an organization.

Information systems consist of information related to people, places and things in an organization or outside the organization .i.e. the
environment surrounding business.

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 BIBLIOGRAPHY

➢ https://www.researchgate.com
➢ https://www.researchleap.com
➢ Barber, P. 1993. Make the 'S' in EIS mean success. Computing Canada (January 18): 34

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