Executive Support System [ESS]

Unit 2, from the chapter“ Kinds of information Systems”

BY,

ROMEO. BFirst Year, First Semester , “MBA” ‘B’ SectionSJBIT, Bangalore.

Traditional View of Systems

ESS

Flow of Information in Organization

Scenario

How do you make business decisions?

If you’re like most executives, then you probably have one of those enormous Excel spreadsheets, a dozen tabs wide, with data from various departments.

• It is painstaking to build and update a spreadsheet with figures from every department of your organization.

• The data always needs to fit together nicely and there is a high risk for human error.

• Even if all the numbers are keyed in correctly, when analyzing the data, the sharpest CEO will often miss a reoccurring pattern or red flag amongst their KPIs.

• The opportunity costs of this kind of manual process are also staggering.

• Crunching numbers in spreadsheets leaves executives, or the staff developing these reports, with very little time and energy to then analyze that data and create forecasts that positively influence business decisions.

What is ESS/EIS ?

Executive Support System (ESS) is a reporting tool (software) that allows you to turn your organization's data into useful summarized reports. These reports are generally used by executive level managers for quick access to reports coming from all company levels and departments such as billing, cost accounting , staffing, scheduling, and more.

In addition to providing quick access to organized data from departments, some Executive Support System tools also provide analysis tools that predicts a series of performance outcomes over time using the input data. This type of ESS is useful to executives as it provides possible outcomes and quick reference to statistics and numbers needed for decision-making.

Architecture of ESS

What Happens without ESS/EIS ?

What Happens when use of ESS/EIS ?

INSIDE THE ORGANISATION

Without ESS: A Re-Active Business Decision A CEO receives a call from an online advertising company offering an incredible

rate on pay-per-click ads, but for a limited time.

Now it’s up to the CEO to quickly figure out which products will yield the most

return on the advertising investment.

First the executive logs into an online advertising dashboard to compare costs,

response rates and return from previous campaigns.

Then he gets on the phone with a warehouse account manager, or logs into an

inventory management database.

From the warehouse, he finds out the cost to ship each product, the list price of

each product and which products have been sitting on the shelves the longest or

accruing the most storage fees.

With all of this data and information in place, the executive can figure out which

product will likely yield the highest return and finally respond to the advertising

offer before the deadline expires.

With ESS: A Pro-Active Business DecisionNow let’s work backwards from that example, but with an ESS in place.

The ESS sends an alert to the company CEO that product “X” was stored for “X” number

of days, or that the warehouse storage costs for product “X” have exceeded a certain

total dollar amount.

Working from that report, the executive alerts his sales and marketing employees to

research the most cost-effective ways to move product “X” off the shelves.

Here the CEO is not scrambling to reply to an outside call from an advertising company.

The ESS alert put him in the driver’s seat and gave the sales and marketing team lead

time to find the best

Features of ESS Contemporary ESS bring together data from all parts of the firm and

enable managers to select, access, and tailor them as needed using easy-to-use desktop analytical tools and online data displays.

Through their ESS, many managers have access to public data, such as news services, financial market databases, and economic information.

ESS has the ability to drill down, moving from a piece of summary data to lower and lower levels of detail.

Well-designed ESS also have some facility for environmental scanning.

A key information requirement of managers at the strategic level is the ability to detect signals of problems in the organizational environment that indicate strategic threats and opportunities.

Ability to analyze, compares, and highlight trends.

The easy use of graphics enables the user to look at more data in less time with greater clarity and insight than paper-based systems provide.

Problems are handled before they become too damaging; opportunities are also identified earlier.

Immediate access to so much data also enables executives to better monitor activities of lower units reporting to them.

That very monitoring ability enables decision making to be decentralized and to take place at lower operating levels.

SummaryExecutive Support Systems meet the needs of corporate executives by providing them with vast amounts of Information quickly and in graphical form to help them make effective decisions.

ESS must be flexible, easy to use, and contain both internal and external sources of information.