Executive Information Systems have cast off their poor image of the 1980s. Now the debate is over who should use them, as Jane Bird discovers.
Running a business would be like flying an aeroplane if the computer industry had its way. Senior managers would sit at their desks viewing screens that would display charts and diagrams showing them exactly what was happening in every area of the business. Problems would be instantly recognisable thanks to brightly coloured special effects and the cause of the difficulty could be identified simply by pointing a finger at the appropriate part of the screen to explore further levels of detail.
This was the vision of the 1980s, when so-called Executive Information Systems (EIS) began to appear. At that time, senior executives were viewed as the final challenge for IT which had penetrated every other area of business from accounts, manufacturing and sales, to marketing and human resources. User-friendly EIS, with their snazzy graphics and touch-sensitive screens, were intended to give the top management team computer power at their fingertips.
But like so many other computer fashions, EIS failed to meet expectations. In the words of David Norton, president of Renaissance Strategy Group, a US-based management consultancy: 'EIS has a bad image with many senior executives, who feel that they have waited two or three years, spent millions of pounds, and still haven't got what they want.' One problem was that EIS were often conceived by senior managers to help themselves, without a thought as to how the information might be utilised by people lower down the organisation. Michael O'Brien, a principal consultant at PA, the technology consultancy, says: 'There is a tendency for managers to have the EIS developed in a self-centred way to enable them to control business.' This ties up development resources without helping to solve the problems it highlights. This does nothing to help those at the coalface resolve issues and fundamentally improve performance, O'Brien believes.
Take customer services, for example. The senior executive might want the EIS to track the volume of customer complaints. If they were too high, the executive would want the customer services manager to reduce them. But this task would be much easier if the system also provided data on the products or services to which the complaints related. Ideally, all the information systems in an organisation should be integrated and able to exchange information. Another problem cited by O'Brien is that organisations underestimate the effort that has to be put into changing their approach to issues such as quality improvement and empowerment if they are to realise the advantages of an EIS.
However EIS are beginning to change. The latest products can communicate with other information sources such as spreadsheets and databases. Increased processing power enables them to support the more numerically intensive quantitative analysis done by analysts and planners. And costs are plunging - prices are now in tens of thousands of pounds for a multiple-user licence rather than hundreds of thousands of pounds as they were in the late 1980s. When correctly designed, EIS are ideal for today's flatter management structures, decentralised organisations and cross-functional teams. They can deliver information to individuals to help make decisions and gain control of their costs.
anagers are becoming more generalist, points out Simon Rigden, sales and services director of IRI, one of the biggest EIS suppliers. 'They need to be able to access a variety of information in an ad hoc way. In future, their value will lie in their ability to think laterally and to be able to analyse information.' They will look increasingly to intuitive EIS-type tools to help them in this task, Rigden says.
The spread of PCs and networks is enabling EIS to become the window through which individuals view the organisation and communicate with colleagues. This has led some suppliers to rename their products Enterprise Information Systems and target them at the full spectrum of executives rather than just those at the top. They argue that the ease of use and functionality of EIS are as relevant to line managers and business professionals as they are in the boardroom. Some observers believe that the ultimate goal is for everyone in the organisation to have access to the EIS.
However, this view is not shared by Norton, keynote speaker at the EIS '94 conference sponsored by Management Today (see page 88). The crucial thing to bear in mind is that during the next decade most organisations will be in a state of transition, he points out. The role of the EIS will therefore be to monitor a changing situation - extending its scope makes this task difficult. An enterprise-wide system would tend to paint a fixed picture of an organisation whereas in reality it will be constantly changing with new customers, suppliers, and a myriad of relationships inside and outside the organisation.
An alternative approach is to allow users to work independently on information without worrying about its impact on others, especially in areas that are constantly being reviewed such as reports, proposals, project documents and policy statements.
So how can you decide how far your EIS should go and which areas it should concentrate on? Norton advocates a tight focus that mirrors the organisational strategy. The technique he has developed for doing this is based on the 'balanced scorecard', a method that helps you determine your organisation's priorities on the basis of four questions: how do customers see us; what must we excel at; can we continue to improve and create value; and how do we look to shareholders?
This approach proved invaluable to Marilyn Spearing, managing director of Global Electronic Banking at Barclays, when she set up the business in 1992. 'The balanced scorecard was a wonderful idea because it enabled us to define the key priorities and critical factors from the very start. It has been a marvellous tool,' she says.
Spearing agrees with Norton that the value of the EIS diminishes the wider it spreads. 'If you are not careful you can end up with legions of people whose job is just to manage the flows of information.' The whole system becomes slowed down as more and more people need to access it. 'It would be super if it could be done, but it's nirvana,' she says. 'An EIS should be for those executives at the top who are responsible for delivering the end result and making a return on investment.' Some organisations are extending their EIS to several hundred users, others are retaining for a select group at the top. But whatever your end goal, it makes sense to begin your EIS with a tight strategic focus for a small number of users. Then you can broaden the base. 'That way you will have a system that suits the business,' says Norton, 'rather than something designed for everyone that suits no one.'.