08-Unit8 - Business Intelligence and Tools Unit 8 Unit 8...

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Unformatted text preview: Business Intelligence and Tools Unit 8 Unit 8 Enterprise Information Systems Structure 8.1 8.2 8.3 8.4 Introduction Objectives Overview of an EIS 8.2.1 Definition of an EIS 8.2.2 Significance of EIS 8.2.3 Evolution of EIS 8.2.4 Benefits of an EIS Self Assessment Question(s) (SAQs) Information Needs of Senior Managers 8.3.1 Activities of the Senior Executives 8.3.2 Types of Information and their Attributes 8.3.3 Methods for Determining the Executive Information Needs Self Assessment Question(s) (SAQs) Architecture and Components of EIS 8.4.1 Hardware 8.4.2 Software 8.4.3 Interface 8.4.4 Telecommunications Self Assessment Question(s) (SAQs) 8.5 EIS Applications 8.5.1 Financial 8.5.2 Marketing 8.5.3 Manufacturing Self Assessment Question(s) (SAQs) 8.6 Future Trends in EIS 8.6.1 The Intelligent EIS 8.6.2 The Multimedia EIS 8.6.3 The Informed EIS 8.6.4 The Connected EIS 8.7 Summary Sikkim Manipal University Page No. 178 Business Intelligence and Tools 8.8 Terminal Questions (TQs) 8.9 Unit 8 Multiple Choice Questions (MCQs) 8.10 Answers to SAQs, TQs, and MCQs 8.10.1 Answers to Self Assessment Questions (SAQs) 8.10.2 Answers to Terminal Questions (TQs) 8.10.3 Answers to Multiple Choice Questions (MCQs) 8.1 Introduction To survive in the scenario of increased global competition, the CEOs of the organizations are required to keep monitoring large amounts of information. In this context, Executive Information Systems (EIS) emerged as a unique and powerful interface to a variety of information sources to address the specific information needs of a CEO and other senior managers. This Unit focuses on the information requirements of top-level executives, the architecture of the EIS to fulfill the information needs, and the future trends of EIS. Objectives: The objectives of the Unit are to make you understand: The purpose of Executive Information Systems (EIS)) in an Organization Information requirements of senior executives The design requirements of an EIS Applications of EIS Future trends of EIS 8.2 Overview of an EIS An Enterprise Information System (EIS) is an information interface system that is specially designed to facilitate the analysis of critical information for operating an organization. These systems provide tools that support the strategic decision making needs of the top executives of the organization. Sikkim Manipal University Page No. 179 Business Intelligence and Tools Unit 8 For instance, an EIS may assist the CEO of an organization by providing not only the operational performance of an organization, but also the activities of its competitors, suppliers, customers, etc. 8.2.1 Definition of an EIS In simple terms, an EIS can be defined as a computer-based system intended to facilitate and support the information and decision making needs of senior executives of an enterprise by providing easy access to both internal and external information relevant to meeting the strategic goals of the organization. These systems act as organizational-wide Decision Support Systems to help top-level executives analyze, compare, and highlight the trends and patterns of the important variables. Also, these systems emphasize on graphical displays, easy-to-use user interfaces and offer strong reporting capabilities. 8.2.2 Significance of EIS An EIS provides the summarized or detailed data of the strategic information at the convenience of the senior executives of an organization. An EIS performs all these functions by constantly monitoring the internal and external events and trends. For instance, an executive can use EIS to view the sales functioning categorized by product, region, month, etc. Similarly, the executive can also monitor the sales performance of the organization’s competitors. Based on the snapshot provided by the EIS, the executive can drill down into the organization’s data warehouse to display greater level of details and to explore the current and past data patterns and trends. This process can be continued till the executive reaches a single transaction level and thus EIS provides the executive with the information that explains the variance and helps in deciding a course of action. The tools offered by EIS are programmed to provide canned reports or briefing books to top-level executives. Today these tools allow ad-hoc querying against a multi-dimensional database, and most offer analytical Sikkim Manipal University Page No. 180 Business Intelligence and Tools Unit 8 applications along functional lines such as sales or financial analysis. But an organizational EIS cannot become a substitute for other forms of information technologies and computer-based systems viz., Management Information Systems (MIS), Transaction Processing Systems (TPS), and Decision Support Systems (DSS). Today, the application of an EIS is not only in typical corporate hierarchies, but also at personal computers on a local area network. These systems now cross computer hardware platforms and integrate information stored on mainframes, personal computer systems, and minicomputers. As some client service companies adopt the latest enterprise information systems, executives can use their personal computers to get access to the company’s data and decide which data are relevant for their decision making. This arrangement enables all users to customize their access to the proper company’s data and provide relevant information to both upper and lower levels in companies. 8.2.3 Evolution of EIS Traditionally, EIS was developed as mainframe computer-based programs to package an organization’s data for the key decision makers who are not necessarily well acquainted with the using of computers. The term, Executive Information System was coined at Massachusetts Institute of Technology (MIT) in the late 1970s. “The CEO Goes On-Line,” an article written by Rockart in Harvard Business Review (1982) vividly describes the emergence of the executive information systems to assist the top management of the organization in making decisions. By the mid-1980s, several vendors viz., Pilot Software (Command Center), Comshare (Commander EIS) had started providing relatively easy application environment for EIS that includes easy screen design, preprogrammed access to new sources and flexible interface design. One of the important factors behind the adoption of both large-scale data Sikkim Manipal University Page No. 181 Business Intelligence and Tools Unit 8 warehouses and ERP systems will be the ability to easily feed the real-time data to an organizational EIS. Thus it is not a matter of surprise that wherever you find an ERP system, you also find a mission-critical EIS. But the real support for EIS technology grew in later decades, say 1980s and 90s. New vendors have come out with emerging products that have increased the scope of available information sources. Thus the modern EISs contain a wide-variety of data, including mission-critical business processes, research and development efforts, customer-centric information and the external data to support the necessary environmental scanning activities. 8.2.4 Benefits of an EIS The advantages that an EIS brings to the organization are: Provides tools to select, extract, filter, and track the critical information of organization in an organized manner Enables the top-level executives to use the system with ease (extensive computer experience is not required) Provides timely delivery of the organization-wide summary of information highlighting the major deviations of the information wherever they arise Provides a wide range of reports including the status reports, trend analyses, drill down investigation, ad hoc queries. Presents the information in graphical, tabular, and/or text formats The organizational EIS is not a substitute for other information technologies and computer-based systems. The other decision support systems are still vital in bringing relevant information to the various levels of a modern organization. The EIS feeds off the various information systems within an organization for its internal information needs and then attaches itself to the external sources as and when necessary to provide a macro view of business. Sikkim Manipal University Page No. 182 Business Intelligence and Tools Unit 8 However, executives face the following limitations with the Executive Information Systems: Cost of establishing an EIS is relatively high and so may not be economically viable for small companies Functions are limited and so the systems may not perform complex calculations Depends on the other information technologies in the organization to gather the organization’s internal data Difficult to keep the current data as it focuses on historical data Self Assessment Question(s) (SAQs) For Section 8.2 1. Discuss the significance of an EIS in an organization and its role in assisting the top executives of an organization? 8.3 Information Needs of Senior Managers Typically, the information needs of the executives in an organization are based on their position in an organizational hierarchy. The information needs of a senior manager is quite different from that of a junior manager. Senior mangers are involved in making strategic decisions and the junior managers are involved in making operation related decisions. Thus the designing of an Enterprise Information System will need to focus on the decision-making requirements of the senior managers. To understand the information requirements of the senior managers, we need to understand the common traits of the senior managers. Typically the traits of the senior managers in an organizational set up are as follows: They are responsible for the business of the entire organization/ strategic business unit / autonomous business entity They are enterprise-oriented in terms of their thinking Sikkim Manipal University Page No. 183 Business Intelligence and Tools Unit 8 Their actions are future market oriented and focus on strategic horizons rather than day-to-day activities Their decisions will have considerable financial, human and business consequences They involve in strategy formulation and preparation of policy guidelines They possess a wider span of control in the organization 8.3.1 Activities of the Senior Executives The activities carried out by the senior executives include al managerial functions; planning, organizing, staffing, directing and controlling. The nature of work at the top executive levels involves more time on planning and supervising the other levels of business. According to several surveys done in this regard, an executive carries out the following activities: Entrepreneurial activities: These are the strategic planning tasks that are usually triggered by real or perceived changes in the external environment. The executives focus their attention on understanding the market dynamics and changes in the global business environment. The top executives are expected to identify the opportunities in the market and come out with the plans for effective implementation. Disturbance management: These activities require the immediate attention of the executives and deployment of the resources to unexpended occurrences. The managers need to be very careful in dealing with these activities as mismanaging of these activities will have a severe negative impact on financial health of an organization. Allocation of resources: Top executives possess the authority for the deployment of the resources and so they act on allocating the organizational resources where the returns could be high. Practical implementation of this task is very difficult as the demand for resources is generally greater than their availability. Sikkim Manipal University Page No. 184 Business Intelligence and Tools Unit 8 Negotiation: The senior executive represents the organization in both internal and external policy matters. They are involved in the resolution of conflicts and in getting highly profitable contracts. 8.3.2 Types of Information and their Attributes According to the various studies undertaken, the types of information needed by the senior executives include: Cost accounting systems that relate revenues and expenses to specific functional areas Information obtained from the external sources viz., markets, suppliers, customers, competitors Subjective and objective assessment of several internal and external issues Information that has spread over across several computer systems Based on the activities performed by the senior executives, the differences in the attributes of the information required for the senior managers compared to those of other executives are provided in Table 8.1. Attribute of the Information Top executives Other executives Accuracy Average level High level Time horizon Future oriented Past and present oriented Summarization High Low Level of details Low High Scope Broad Narrow Orientation Both internal and external Internal Table 8.1: Differences in information attributes between senior executives and others Based on the above discussion, the type of information system to be developed for senior executives needs to be different from those of the other executives as provided in Table 8.2. Sikkim Manipal University Page No. 185 Business Intelligence and Tools Unit 8 Subject System for Top executives System for other executives Data structures Multidimensional data structures Complex data structures Volume of data Large volume (Historical data) Small volume of data Workload AD-HOC Queries Pre-defined operations Duplicated data De-normalized DBMS Normalized DBMS Derived data and Aggregates Common Rare Number of users Few in number Many in number Table 8.2: Characteristics of the Information systems for Senior and other executives 8.3.3 Methods for Determining the Executive Information Needs Given the unique characteristics of the executive information needs, the methods of determining those needs are as follows: 8.3.3.1 By-Product Method Under this method, various information regarding by-products of the current operations of the organization are summarized and aggregated through use of the traditional TPSs and other MISs that are being used in the organization. Using this method, exception highlighting is limited to those areas with pre-defined ranges of values or summarized historical data. The delivery mechanism of this method is mainly through generation of online and/or hard copy reports. 8.3.3.2 Null Method This method assumes that the information needs of senior executives are so dynamic and fluid that the pre-defined reports generated by the typical information systems are not very useful. Thus the method involves the informal collection of mostly subjective information from trusted sources via ‘word of mouth’. This method relies on the instantaneous exchanges and discoveries that take place during the informal meetings of an organization. Sikkim Manipal University Page No. 186 Business Intelligence and Tools Unit 8 8.3.3.3 Key Indicator Method In this method, the top executives monitor only that information which emerges from an extra ordinary condition. Whenever such an extra ordinary condition emerges, the top executives may gather further information intended to set right the condition. 8.3.3.4 Total study method According to this approach, the information is gathered from a few of top executives in the organization considering the totality of their information needs. However, this method is more comprehensive in nature and is expensive as well. 8.3.3.5 Critical Success Factors (CSF) Method Under this approach, the critical success factors of an organization are identified. The CSFs should be accurate if the organization wants to be successful. Similar to the key indicators method, this method requires gathering of the information on the identified CSFs and the information is supplied to the top executives. But identifying the right CSFs is very crucial in this approach. In order to come out with an appropriate set of CSFs, the organization can consider taking structured opinions from the top executives of the organization. Self Assessment Question(s) (SAQs) For Section 8.3 1. The attributes of the information required for the senior executives is quite different from those of the other executives in an organization. Comment. 2. Discuss various methods that are in practice to determine the information needs of top-executives of an organization? Sikkim Manipal University Page No. 187 Business Intelligence and Tools Unit 8 8.4 Architecture and Components of EIS Now, many organizations are evolving from their “big iron” days of mainframe to the more flexible and functional Client/server environment. On several occasions, this evolution enables easier development and implementation of computer-based decision support technologies. The Client/Server architecture allows rapid additions and modifications to business applications and facilitates widespread access and dissemination of databases located through out the world. Most of the early EIS products were originally developed for use in a highpowered computing environment, but almost all the current products target the Client/Server platform and are designed to be deployed in a wide variety of settings; local, mobile, internet access, etc. The Client/Server architecture of a typical EIS (Refer Fig 8.1) is depicted below. SQL Server Data Warehouse Groupware Server Web Server EIS File Server Executive Workstation 1 Executive Workstation 2 Executive Workstation 3 Fig. 8.1: The Architecture of an EIS Sikkim Manipal University Page No. 188 Business Intelligence and Tools Unit 8 The components of an EIS can typically be classified as: 8.4.1 Hardware The basic computer hardware required for a typical EIS includes the following four components: Input data-entry devices to allow the executive to enter, verify, and update data immediately The central processing unit (CPU), which is the kernel as it controls the other computer system components Data storage files through which an executive can save useful business information, and also easily to search historical business information. Output devices that provide a visual or permanent record for the executive to read or save. With the advent of local area networks (LAN), the EIS products became available for networked workstations. These systems require less support and are less expensive in terms of the hardware requirements. Also, there is an increased access of the EIS information for several users within a company. 8.4.2 Software The basic software needed for a typical EIS includes four components: Text base software (usually the type of documents) Database that includes heterogeneous databases residing on a range of vendor-specific and open computer platforms so as to help executives have access in providing both internal and external data Graphic base as graphics to turn volumes of text and statistics into visual information so that executive can easily understand the same. These graphic types may include time-series charts, scatter diagrams, maps, sequence charts, and bar charts Sikkim Manipal University Page No. 189 Business Intelligence and Tools Unit 8 Model base as the EIS models contain routine and special statistical, financial, and other quantitative analysis. Easy to use, ready response to executives' requests, and price are the important considerations in the selection of appropriate software. Further, one has to confirm that the software considered runs on existing hardware. 8.4.3 Interface An EIS can retrieve the relevant data for decision makers only if the interface is effective. Several types of interfaces that are available to the EIS structure include scheduled reports, questions/answers, menu driven, command language, natural language, and input/output. Also, the interface designed must fit the decision maker’s decision-making style. The more comfortable the EIS is the more efficient it becomes for an executive. However, the ideal interface for an EIS would be uses friendly highly flexible, consistent in performance, and ability to reflect the executive’s world. 8.4.4 Telecommunications Transmitting data from one location to another location is very crucial for establishing a reliable network. Thus telecommunications within an EIS can accelerate the need for access to distributed data. As decentralization is the current trend in the organizations, these telecommunications play an important role in networked information systems. Self Assessment Question(s) (SAQs) For Section 8.4 1. Mention the components in a typical Executive Information System (EIS) and elaborate the role of each of these components. Sikkim Manipal University Page No. 190 Business Intelligence and Tools Unit 8 8.5 EIS Applications Unlike the presentations and reports provided by the traditional management information systems, EIS can distinguish between vital and seldom-used data, and also can track different key critical activities for executives. Thus the executive information systems enable executives to find the data according to user-defined criteria and promote informationbased insight and understanding. Some of the benefits offered by the EIS in several functional areas of the organization are as follows: 8.5.1 Financial An EIS offers an approach to integrate planning or budgeting with control of performance reporting, and it can be extremely useful to finance executives. The EIS focuses on accountability of financial performance and it recognizes the importance of cost standards and flexible budgeting in developing the quality of information provided for all executive levels. It provides various types of financial data to the executives like financial ratios, cash flow analysis and it also helps the executives to estimate the trends and make capital investment decisions. 8.5.2 Marketing EIS can be effectively applied to assist marketing executives in making effective marketing decisions. The EIS can provide an approach to sales forecasting, which will enable the executives to compare sales forecast with past sales. Also, EIS offers an approach to make product pricing by evaluating various alternative prices through establishing the relationship between the variables; sales volume and price per unit. Similarly, the executives are benefited through use of EIS by obtaining the data on the exiting market trends, competitor’s strategies, and changing customer interests, demands, and preferences. Sikkim Manipal University Page No. 191 Business Intelligence and Tools Unit 8 8.5.3 Manufacturing To bring in meaningful managerial and operational information and for controlling the manufacturing operations, the executive is expected to make so many decisions and study several decision variables that affect the decision. For instance, consider the purchasing activity in a manufacturing functional area. In this regard, EIS provides the data required for the executives to carry out an effective evaluation of the vendors and buyers, evaluation of purchased materials, and analyze the critical purchasing areas. Thus the executive can oversee and review purchasing operations effectively through use of the EIS. In addition, the use of EIS can be extended to other areas of manufacturing viz., production planning and control, quality control and management. Self Assessment Question(s) (SAQs) For Section 8.5 1. Discuss the application of EIS in executing various functions of an organization? 8.6 Future Trends in EIS The future of EIS will not be bound by mainframe computer systems. The systems smoothen the existing decision-making processes. The future systems will become diverse because of integrating potential new applications and technology into the systems, such as incorporating artificial intelligence and integrating multimedia characteristics and ISDN technology into an EIS. However, the EIS of tomorrow would be intelligent, multimedia friendly, informed and connected as discussed below. 8.6.1 The Intelligent EIS The amount of data provided to an executive is overwhelming and the potential for information overload is constant even with an EIS. Thus Artificial Intelligence (AI) can perform some of the data screening for the Sikkim Manipal University Page No. 192 Business Intelligence and Tools Unit 8 executive and thereby reduce the amount of time spent in searching for the relevant data. Another branch of AI is Expert Systems (ESs). An ES can be used within an EIS to assist the user with appropriate model selection to analyze a problem. Based on the rules provided to the system, the ES can instruct the user on the appropriate model that would best fit the problem context. 8.6.2 The Multimedia EIS A multimedia database management system can increase the future EIS user’s resources to manipulate text, voice and images effectively within an integrated database structure. These database systems offer the benefits like voice concatenation, transformation of information, scaling of objects, rotation of images, and merging of various data types. 8.6.3 The Informed EIS In this EIS, the data access tools are well-integrated so that the EIS can systematically find and organize the necessary information for the executive from various data stores and deliver it to the EIS desktop in a manner that allows it to be easily understood and readily used. 8.6.4 The Connected EIS With the wide spread availability of high-bandwidth communications media, this EIS will serve as a valuable resource for improving relationship building and maintenance. 8.7 Summary An External Information System (EIS) is a computer-based system intended to facilitate and support the information and decision making needs of senior executives of an enterprise by providing easy access to both internal and external information relevant to meeting the strategic goals of the organization. As these systems are mainly intended for the senior managers Sikkim Manipal University Page No. 193 Business Intelligence and Tools Unit 8 of an organization, we need to under stand how the role of senior executives is different from that of other executives. The senior executives are mainly involved in making strategic decisions and the impact of the decision on the organization is very high. More than the information from the internal sources, the senior executives are expected to have information from the external sources as well. Thus EIS plays a vital role in terms of providing the right information on right time covering both internal and external sources. Also, organizations may adopt any of the following methods for determining the information needs of the senior executives; By-Product method, null method, key indicator method, total study method, and critical success factors (CSF) method. Today the Client/Server architecture is becoming more popular as it allows rapid additions and modifications to business applications and facilitates the widespread access and dissemination of databases located through out the world. This is the reason the modern EIS products are also being made to use the Client/Server platform. The basic components involved in an EIS include hardware (input data-entry devices, the central processing unit (CPU), data storage files, and output devices), software (text base software, databases, graphic base, and model base), interface systems, and telecommunications. The application of EIS can be extended to all functional areas of the organization viz., manufacturing, finance, and marketing. However, the EIS of tomorrow would be intelligent, multimedia friendly, informed and connected and will surely succeed in deriving more benefits for the organizations and the executives. 8.8 Terminal Questions (TQs) 1. What is an EIS and describe how an EIS brings in benefits for senior executives of an organization? 2. The information requirements of the senior executives are different from the other executives of the organization. Keeping this statement in mind, Sikkim Manipal University Page No. 194 Business Intelligence and Tools Unit 8 discuss the activities carried out by the senior executes of an organization. 3. Write a note on typical applications of an Executive Information System (EIS) in an organization? 8.9 Multiple Choice Questions (MCQs) 1. EIS stands for __________. a. Enterprise Information Systems b. Executive Information Systems c. Enterprise Intelligence Systems d. Executive Intelligence Systems 2. The target users of the Executive Information Systems are ______. a. Top-level executives b. Middle- level executives c. Junior-level executives d. All the above 3. Which of the following statements is wrong with regard to an Executive Information System (EIS)? a. These systems are designed to facilitate the analysis of critical information to run an organization b. These systems collect the information from both internal and external sources of an organization. c. These systems provide a wide-range of reports viz., sales analyses, drill down investigation, ad hoc queries. d. These systems can effectively replace the other information technologies in the organization. Sikkim Manipal University Page No. 195 Business Intelligence and Tools Unit 8 4. Which of the following is a characteristic(s) of an Executive Information System (EIS)? a. Provides access to the data from a broad range of internal and external sources. b. Presents the information in graphical, tabular, and/or text formats c. Focuses on supporting the senior-level management decisions. d. All the above 5. The term Executive Information System (EIS) was coined in 1970s at _____________. a. Harvard Business School b. Stanford University c. Massachusetts Institute of Technology d. North Carolina State University 6. Which of the following statements is true with respect to the null method of determining the information needs of the senior executives? a. the method focuses only the business and market facts and there is no place for subjective information. b. the method involves the informal collection of subjective information from the trusted sources c. the method includes the data collected from the market surveys conducted on random basis d. the method prioritizes the information provided by the executives of the organization according to their position in the organization’s hierarchy. 7. Which of the following is the benefit derived by the organizations through use of the Client/Server architecture? a. this architecture allows rapid additions and modifications to business applications b. this architecture facilitates the widespread access and dissemination of databases located through out the world c. Both (a) and (b) d. None of the above Sikkim Manipal University Page No. 196 Business Intelligence and Tools Unit 8 8. Which of the following approaches gathers information from a few of senior executives to understand the complete information needs of the senior managers in an organization? a. Total study method b. Key indicator method c. By person method d. Critical success factors method 9. Telecommunications has become an important component of EIS because _____________. a. there is a decentralization trend in the organizations in terms of making decisions b. there is a centralization trend in the organizations in terms of making decisions c. the number of executives in the organizations are growing on continuum basis d. None of the above 10. Which of the following is not a characteristic of future EIS? a. Intelligent EIS b. Automated EIS c. Informed EIS d. Connected EIS 8.10 Answers to SAQs, TQs, and MCQs 8.10.1 Answers to Self Assessment Questions (SAQs) Section 8.2 1. An EIS is a computer-based system intended to facilitate and support the information and decision making needs of senior executives of an enterprise by providing easy access to both internal and external information relevant to meeting the strategic goals of the organization. Sikkim Manipal University Page No. 197 Business Intelligence and Tools Unit 8 An EIS provides the summarized or detailed data of the strategic information at the convenience of the senior executives. Also, it performs various functions by constantly monitoring the internal and external events and data trends. Also, the executives can drill down into the organization’s data warehouse to display a greater level of details and to explore the current and past data patterns and trends on the basis of the snapshot provided by the EIS. The tools offered by EIS also provide canned reports or briefing books to top-level executives. These are discussed in detail in Sections 8.2.1 and 8.2.2. Section 8.3 1. The information requirements of the senior executives are quite different from those of the other managers. This is because the activities carried out by the senior executives are strategic in nature and the consequences of the decisions taken by them will have a larger impact on the financial conditions of the organization. Thus the attributes of the information that the senior executives seek for, is different from those of the other managers. The attributes of the information for the senior managers include high level of summarization will low levels of details, broader scope in nature, and the time horizon is of future-orientation with an average level of accuracy. Also, the sources of information includes both internal and external to the organization. 2. As the information needs of the senior executives are unique in nature, identification of these needs is to be done carefully. Some of the methods determining these information needs are as follows. As per the ‘By-Product method’, the information by products are summarized and aggregated. Another approach, ‘Null method’ deals with the informal gathering of the vital information from the trusted sources. Sikkim Manipal University Page No. 198 Business Intelligence and Tools Unit 8 In the ‘Key Indicator method’, the senior executives monitor only that information where the information is out-of-nominal condition. The ‘Total study method’ gathers information from a few of top executives in the organization concerning the totality of their information needs. The ‘Critical Success Factors (CSF) Method’ aims at gathering the information on continuous basis on the identified CSFs. Since each of these methods have their advantages and limitations, one has to carefully identify an appropriate method of determining the information needs of the senior executives. These methods are discussed in detail in Section 8.3.3. Section 8.4 1. The components of EIS include hardware (input data-entry devices, the central processing unit (CPU), data storage files, and output devices), software (text base software, databases, graphic base, and model base), interface systems, and telecommunications. Section 8.5 1. The EIS brings in various benefits in all functional areas of an organization. These are discussed in detail in Section 8.5. 8.10.2 Answers to Terminal Questions (TQs) 1. An EIS is a computer-based system intended to facilitate and support the information and decision making needs of senior executives of an enterprise by providing easy access to both internal and external information relevant to meeting the strategic goals of the organization. The advantages that an EIS brings to the senior executives of an organization are discussed in Section 8.2.4. 2. The senior executives are involved in making strategic decisions and the impact of these decisions is very high on the whole organization. Also, Sikkim Manipal University Page No. 199 Business Intelligence and Tools Unit 8 the senior managers do not confine themselves to an individual functional area and the kind of activities they are involved are divergent in nature. Thus the information needs of senior executives are quite different from those of the other managers. The important activities carried out by the senior managers of an organization are provided in Section 8.3.1. 3. The application of EIS can be observed in all functional areas of the organization including manufacturing, finance, and marketing. The application of EIS in these functional areas is discussed in Section 8.5. However, some of the common features offered by the modern EIS across the functional areas are as follows: Status access, drill down, exception reporting, trend analysis, ad hoc query handling and report generation Multiple user interfaces, graphic user interface navigation Multi-dimensional data mining and data visualization Multiple search engines and algorithms Data management capabilities Wide spread access to external databases and information repositories 8.10.3 Answers to Multiple Choice Questions (MCQs) 1. Ans: b 2. Ans: a 3. Ans: d 4. Ans: d 5. Ans: c 6. Ans: b 7. Ans: c 8. Ans: a 9. Ans: a 10. Ans: b Sikkim Manipal University Page No. 200 ...
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