Successes And Failures Of Executive Information Systems

The Executive Information Systems (EIS) was facing a high risk of failures, these estimates 70% of the failures. Organizational psychological, technological and educational issues make the implementation of the system difficult. Although it was an EIS but there were only little users of executives and the majority of the executives never rate the EIS advantages highly. The majority users of the system are middle management level. Based on this fact, implementation success cannot be taken for granted. The failure and success of other system cannot be applied to EIS. More organizations are using EIS and their derivatives and this make the system important. But there is less additional research about EIS although the model of critical success factors (CSF) for EIS already exists 10 years. There do not have any prove that show CSFs are universal in the application in different situation.

System success

There are some difficulties to define system success. Based on combination suggestions from many researchers, the article researchers had chosen 5 evaluation creations and introduce with the explanations.

Access : the EIS is made available and users are given access to the system

The development team should make the system available for the entire user.

Use : the EIS is used by the intended users

If the system cannot provide any benefit to the users, the system is facing failure. The development team also needs to make sure that EIS is using by the potential users.

Satisfaction : users are satisfied with the EIS

The satisfaction of user is important. If the user is satisfied with the system, it means the system successful.

Positive impact : the EIS has positive impact the executive and the organization

If the system can bring benefits to the user then the system is success.

Diffusion : the EIS tends to spread

The number of users also can show the successful of EIS. When an EIS user gains impact from the system, he will promote it to other colleagues. This will increase the number of users of EIS.

CSFs reviewed

Based on Rocket and DeLong (1988), they had mentioned that there are 8 areas that appear to be the important factors to EIS success. Other researches prove that the factors will influence the EIS success and the researchers add on two factors that will influence the EIS success.

Committed and informed executive sponsor

The committee that invests time and effort in development of EIS will have more understanding about the capability and limitation of the system.

Operating sponsor

They need to have operating sponsor to design the details of implementation from the user side to leverage the executive sponsor.

Appropriate IS staff

Senior executive need a quality staff to support the IS. This can make sure that the top management can interact with supporting staffs to make the system success.

Appropriate technology

The acceptance of system is based on the choice of hardware and software. The specifically designed product has solved the problem of lack of hardware and software.

Management of data

The internal and external sources, ability to access the data are the issues in system development. Some factors will block the implementation information systems (IS) for executives.

Clear link to business objectives

The system must have a clear link to business objective and clear benefits in using the technology. The system must provide something that other system does not have in order to add value to the data.

Management of organizational resistance

The political resistance is the factor that causes failure in using system. The reason is because executive can change information and shift the power inside the company.

Management of system evolution and spread

This is to fulfill the user’s demand and identifying all the needs of user and take it into account when expend the system.

Evolutionary development methodology

Evolutionary development methodology find the way on how the system can give value to the executive, and keep the executive hopefully and aware of the project.

Carefully defined information and system requirements

Fulfill the executive need is the key of successful system.

Methodology

This research studied the basic EIS success model. This model shows that CSFs will influence the system success. To get the 10 CFSs, the researchers study the six Hong Kong organizational cases. The researchers used face to face interview. They used a series of personal interviews with the key person in organizational. The questionnaires include open-end questions, and all the questionnaires send out before the interview. This was to make sure all the interviewee would provide more information. There are two sets of questionnaires; company still using the system and company stop using the system.

Results

After the results for all six organizations were analyzed, three success cases emerged (Major railway, international airline and health care provider companies), two failed cases (Utility and shipping companies) and one unresolved case (Large University).

The two failures cases are categories as true failures by the decision to terminate the EIS and deficiency of benefits derived by the firm. The unresolved case was happen where the system was actually used, but it has no met its initial expectation, only a small fraction of its functionally, the benefits were not conceive and that no future expansion plan were planned.

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There are ten CSFs. The first one is a committed and informed executive sponsor. In success cases, top management always ensures resources and political support, provide direction and feedback, keep constant pressure on EIS project team and communicate strong and put continuing interest to the EIS developers and data providers. In unresolved case the president applies hands off approach to manage EIS project but he ensures the resources support needed for EIS. However, the failed case never set deadlines for EIS project and faced loss on sponsorship after loss of interest and direction from top management.

The second CSFs are an operating sponsor. In success cases, operating manager have commit resources and time, participate and promote and help match business needs with technological capabilities. In unresolved cases, operating manager has handling day to day issues of development and translates users’ needs to design team. However, in failed cases, no clear single operating sponsor role are assign so the top management operating focus cannot be communicate to users.

The third CSFs are appropriate IS staff. In success cases, companies applied team approaches which include external consultants, sponsors and data providers. In unresolved cases, internal staff confronted problem after external consultant left, company not have enough competence internal staff. Companies cannot development new EIS to meet users new requirements. However, in failed cases, there are no inheritor after the departure of IS staff. Company staffs are lack experience with EIS development. External consultants are lack understanding of the executive environment.

The fourth CSFs are appropriate technology. In success cases, the capability, capacity and response time of technology are pleased with users. Vendor-supplied EIS software is used and a custom-built system is developed in management. The system supports for rapid screen design and maintenance. Users are pleased with it because this system is ease to use, always updated with new user needs and it is more flexible and faster. In unresolved case, users are facing the problem with accessing the system as there are complicated and slow response time. However, in failed cases, management felt difficult to write their own software as there is no prototype provided and need a long time to build the system.

The fifth CSFs are management of data. Data that produced by system is in novel format consists of hard and soft data, internal and external data which add value to existing reports. Data are timely, accurate, reliable and consistent. Manager will verify the feasibility of obtaining information before committing to incorporate into EIS. In unresolved cases, duplication of works is occurred. Data are not being updated and incomplete in system. Moreover, they do not provide external data too. In failed cases, manager unable or taken a long time to obtain information for EIS. Data are not provided on time and presented in desired formats. Duplication of works is occurred too.

The sixth CSFs are clear link to business objectives. For success cases, management is able to identify the key performance indicator, focus on business opportunity and then define the benefits by using EIS. They will define the critical success factors before the commencement of EIS project. For unresolved cases, value of EIS clearly defined and linked directly to users’ information needs. However, in failed cases, EIS do not have clear link to business objectives as executives are undervalued the importance of EIS. In succession, they do not convey clearly the objectives and benefits of EIS to users.

In the seventh CSFs, it discuss about management of organizational resistance. There are few reasons make the factors successes which are EIS developers report that organizational resistance is not significant, majority of users are willing to use the system also make the factors success, resistance is handled by education and negotiation and relief which make IT is an important tool to help staff achieve business objectives. On the other side, there are some reasons make the factors become unresolved case. First, resistance is found initially due to the unfriendly user interface and slow response time. Second, resistance is less since training is provided and the technology is enhanced. Then, the reasons make the factors fails are data providers and middle management do not cooperate with the EIS project manager. There is also no action to manage the resistance. Corporate culture is not ready for the EIS and reluctant to embrace the technology also make the factors fail.

After that, in the eighth CSFs which is good management of system evolution and spread. To be success in EIS new modules or refinements and enhancements are carried out following their comments. Then, new features and functions are added to meet increasing user requirements and also they are also encouraging user participation to express their needs. The reasons of no evolution due to the inadequate human resources and EIS cannot be enhanced quickly enough to capitalize on the newfound requirements make the case become unsolved. If there is no planning for EIS spread and evolution is not made to respond to user’s needs make the case fails.

In the ninth CSFs, it discuss about the evolutionary or prototyping approach. Without using evolution or prototyping approaching make the case become unresolved. If the user only using prototyping approach without using evolution approach then it would make the case fails.

Then in the tenth CSFs, it discusses about information and system requirements are carefully defined. The factors which help to achieve the EIS succeed are defined a view of what EIS is intended to achieve, review the existing management reports, interview executives and personnel who work for executives, the design is capable of meeting the requirements of different executives, arrange on-site meeting with EIS users at each output for meeting the information requirements of each output manager, ask personnel who support management and encourage users to devote time to try the EIS prototype. For some unsolved case, the users just review the existing reports to define information requirements and not carefully defined real user’s needs. Then, reasons like executive cannot devote time to the EIS project, information and system cannot be clearly defined, unable to articulate information requirements, users do not have time discuss with consultants and external consultants have problems to understand users’ needs because of a lack of familiarity with the business make the case fails also.

Discussion

The three success cases seem to manage the CSFs well but the other two cases fails to do so. A well-managed of meta-CSFs can either result in a good or bad way. However, without such CSFs, it increases the difficulty in identifying the success and failures in an EIS. It was uncertain to identify the meta-CSFs as only six cases are analyzed. However, based on the analysis, the unresolved case, even though that had well championship from executives and operating sponsors, they miss the fundamental factor. This refers to the resources of the people, financial and appropriate technology. Another factor that influenced the unresolved case is the link to business objectives. Executives have a strong orientation but limited time to search for benefits. System with clear benefits demonstrated, linked to business objectives, and has a higher user acceptance. Temporal consideration is reflected as strong sponsorship of resources before EIS is launched. Little usage is achievable if the system cannot establish clear benefits.

The two failure cases provide some evidence of the critical failure factors – yearning in failing the EIS, top management prefer informal personal reporting, fear of losing influence by the employees, uncooperative data provider and middle management with EIS project manager and unprepared corporate culture. Both failed organization apparently implemented the Chinese management system. The characteristic of this management is that all strategic and major personnel decision is made by the owners and direct supervision of work and personal reporting rather than formal information system. Critical failure factors are different from the CSFs “clear link to business objectives’ and ‘management of organization resistance”. Management system weighted the people’s experiences and beliefs rather than formal written rules for the sake of the organization, may be opposed to business objectives. Strong opposition causes the failure of the IS or vice versa. Mismatch of IS with the organization’s management system should be differentiated from “normal” organization resistance to avoid fear-based culture. However, in these two failure cases, the existence of letting the system fail is higher than the success of the system.

Conclusion

Understanding system failure and success is important. The on-line analytical processing (OLAP) associated with the EIS trend is a way of looking beyond transactions to forces driving them. It helps organization to have accurate forecast sales to have better planning in inventory, production, advertisement expenses and product pricing. In this study, Rockart and Delong’s application of the eight CSFs and the additional of two factors are confirmed. Hence, it is important to have championing, resources and system link to business objectives. Unsuccessful system may result from disagreement with management system. Organizations that translate the needed information with business goals to a good system are likely to success than solving problems with an IS.

Student Expectations

In this case, EIS is not function perfectly because there is limited functionality, high implementation costs, less reliable and less secure data.

IS project team should give pressure to the company as they are creating and maintaining the system, to receive resources that should have been received. This means that resources will be received at the time when it is needed and not after.

The encouragement by the IS staff is important after the system has been done (creating/maintaining) as they need to demonstrate the benefit in sense of it ease in accessing the system and so on. Less time is needed to produce information that is needed as time is gold to the executives.

Proper and specific training shall be given by external consultants to internal IS staffs, especially when a new system was created. This is to make sure that are a backup of the system in case external consultant leave.

Nowadays, there is a lot of business systems which are more useful compare with EIS. For example, International Business System (IBS), which is a leading provider of distribution management solutions. IBS focuses on industries such as automotive, electrical components, paper & packaging, pharmaceutical distribution and so on.