Web-based technologies are ushering in a new era of public management by disseminating information to key decision makers through portals

known as executive information systems (EIS). This article describes the concept of EIS, identifies the features and functions of leading products, and discusses how EIS can promote strategic management in the public sector.

Dashboards and Scorecards: Executive Information Systems for the Public Sector
By Leo Yonghong Liang and Rowan Miranda
Understanding and managing attention is now the single most important determinant of business success. Thomas Davenport and John Beck (2001) The Attention Economy

ERPs Unmet Promises

Organizations have traditionally used financial systems for transaction processing and reporting. From the outset, mainframe software packages were strong in the area of high-volume transaction processing but weaker in their ability to query and produce custom reports on large databases. These legacy systems limited the quantity of data that could be retained. While the proliferation

rowth in the use of technologies such as enterprise resource planning (ERP) systems has exploded the volume of information that public managers must pay attention to. That ERP systems can reduce transaction costs through Exhibit 1 streamlined processes for citizens, supCFOS EXECUTIVE INFORMATION SYSTEM pliers, and employees is well known. That these systems are not delivering everything that they once promised is also grudgingly accepted. Then there is the nagging question in the minds of those thinking about investing in ERP in the public sector: Do ERP systems really improve executive-level decision making? Most organizations would concede that ERP systems have done more to increase the efficiency of transaction processing than they have done to improve the strategic management capabilities of managers and executives with enterprise-wide responsibilities. Because ERP systems are transaction based, they are not well suited to tackle issues of information summarization, analysis, display, and dissemination. That is, ERP systems do not provide dashboards and scorecards that executives need for strategic management. This article focuses on a new breed of Web-based executive information systems (EIS) that may pave the way to a new era of public management. 14
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of PCs improved information Exhibit 2 access for some individuals, the problems of organization-wide COMPARING ERP AND EIS access remained. Since the 1980s, ERP EIS mainframe systems have operated along side PCs, and significant staff Core Users Operational staff and managers Managers and executives effort has gone into exchanging System Objectives Process automation,transaction Process optimization, key data between the two. In recent processing, reporting, performance indicators, years, ERP systems and data waremostly internal focus reporting, internal and houses have risen to address the external focus data storage and retrieval limitations of mainframes, but the probTime Horizon Retrospective Retrospective and prospective lem of pushing out this informaAnalytical and Weak overall and limited to Extensivecost analysis, tion to executives, managers, and Visualization reporting functionality performance measurement, users in a format that meets their Capabilities and use of workflow for alerts diverse needs persists even today. As one analyst comments, ERP Sources of Data Limited largely to information Relies on information from systems are a goldmine for valuable collected within system varried sources that are internal business intelligence. Unfortuntransactions and external to the organization ately, ERP reports generally provide a fraction of the useful information in the system.1 Information from applications within a modern ERP system is Technology Features of EIS typically consolidated into a common relational software database. EIS attempts to present data in a form that is relevant for enterYet data from a host of other applications that are not encompassed prise-wide decisions (i.e., for shaping the big picture). While the by ERP sit in individual silos. The very data that executives need for idea of EIS is hardly new, only recently have both technology and strategic and tactical decision making often requires the combinapractice matured to make EIS a reality.4 The major technology feation of data from ERP and non-ERP application sources (e.g., cost tures of EIS are listed below. accounting information, efficiency indicators, customer information, performance measures, historical data for forecasting). Exhibit Online Analytical Processing (OLAP) Engine 2 provides a comparison of ERP and EIS. An OLAP engine is a query generator that provides users with the To summarize, ERP systems are transaction-processing focused ability to explore and analyze summary and detailed information and weak on analytics. Software firms have recognized that there is from a multi-dimensional database. To illustrate, consider a service a clear demand for technology solutions that can unlock, analyze, that requires collaboration by many divisions and that impacts difand visualize information from ERP and stand-alone systems, and ferent funds. Traditional relational database systems handle this sitthis has provided the motivation for a new niche in the application uation by using multiple spreadsheets connected by macros. In software marketplace. many cases, the spreadsheets become so complex that even the developer finds them difficult to maintain. OLAP overcomes this The Concept of EIS barrier by enabling users to analyze multi-dimensional data. EIS is a subset of a class of technology solutions that also are Managers can use an OLAP engine to slice and dice data by varireferred to in the industry as business intelligence (BI) software. EIS ous dimensions and then drill down into the source data. OLAP by seeks to provide a management information portal to support itself can only highlight the trends and patterns within the data that strategic activities such as goal setting, planning and forecasting, was requested. It will not discern unusual or hidden relationships, and tracking performance (Exhibit 3). EIS enhances the ability of which requires more powerful data mining tools. A recent study of organizations to establish a single version of the truth. Another organizations across the world revealed that in nearly one-third of objective of these systems is to gather, analyze, and integrate interthe sites, OLAP was used for financial applications such as budgetnal and external data into dynamic profiles of key performance ing and consolidation.5 indicators (KPIs). Tailored to each executives information needs, EIS can access both historical and real-time data through ad-hoc Data Mining Tools queries. EIS users can manage and manipulate multidimensional or Data mining tools are especially appropriate for large and comcube-like databases. In essence, managers at every level of government can have a customized Web portal that extracts information Exhibit 3 from disparate sources and summarizes it into meaningful indicators. By providing a single informational gateway, line managers SYSTEM INTERRELATIONSHIPS and executives can build dashboards and scorecards that summarize transactional and other data on a real-time basis. Legacy ERP Stand-alone External With the growth of Web-based technology and innovations in Systems Systems Systems Systems managerial methods, such as balanced scorecard and activity-based management, many public and private organizations are examining whether EIS is right for them.2 Although the public-sector EIS Reporting EIS Data Mining Querying Web Data Visualization installation base is still limited, the demand for such systems is foreDrill-Down Portal OLAP 3 casted to grow to nearly $5 billion by 2003 across all sectors. Among governments that are pursuing EIS projects are the State of Minnesota, State of Maryland, State of Utah, Texas Education Data Warehouse Agency, Maricopa County, City/County of San Francisco, City of Albuquerque, and City of Philadelphia.
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plex datasets. Through statistical or modeling techniques, data mining tools make it possible to discover hidden trends or rules that are implicit in a large database. As one analyst notes, the ERP data schema is extremely complex, containing thousands of tables with hundreds of columns, cryptically named, with relationships that are difficult to decipher.6 Data mining tools help overcome some of the limitations of ERP systems. Data Visualization Tools Data visualization tools provide a visual drill-down capacity that can help managers examine data graphically and identify complex interrelationships. Data visualization in some decision contexts may be overkill. However, for massive amounts of data or where complex data interrelationships exist, data visualization may be the only way to go. Data Warehouse A data warehouse collects and organizes data from both internal and external sources and makes it available for the purpose of analysis. ERP systems and data warehouse concepts can clash because of the focus on transaction processing in the former and decision support in the latter. One analyst notes that data warehousing comes as a complete culture shock to the ERP vendors. The rules of the road that have been carefully learned in doing transaction processing are all destroyed and turned upside down by the notion of data warehousing.7 The dynamic and constantly modified data from a host system (e.g., ERP) is organized based on the designed physical and logical structure of the data warehouse. Although a data warehouse can make it easier and more efficient to use the EIS, it is not required for an EIS to be deployed. Organizations can extract data directly from their host system database for their analysis and reporting purposes, which is a more realistic choice for many smaller governments.

ERP Packages ERP vendors also have started to offer analytical tools that help build EIS. ERP vendors may make the case that existing customers should choose their BI products because not doing so will raise the risk of acquiring disconnected applications. While the BI tools of ERP suites can offer higher levels of integration than stand-alone BI products, market share data on new entrants suggests that the first generation was not capable of meeting analytical and reporting needs. Driven by the growing demand for tools to consolidate and unlock data from different sources, leading ERP vendors have released a second generation of data warehouse and analytical applications. The performance of these products is expected to be superior to their predecessors. Best-of-Breed Packages Many organizations are examining the third-party best-ofbreed solutions. Because organizations can choose specific components and implement them at their own pace, many view this approach as low risk and economically attractive. As pointed out by a research firm, the reemergence of best-of-breed strategies is the direct result of single vendor integrated suites failing to deliver on the value that the investment promised. On top of that, businesses can no longer afford to wait for their ERP vendor to start delivering the functionality needed to help achieve business goals. Without arguing the merits of this strategy and the long-term implications on any multi-vendor initiative, it is a reality today and will only continue over the next few years.9 Application Service Providers (ASPs) Application service providers are also a potential mechanism for developing EIS. ASPs are basically service providers that rent out applications over the Internet.10 While many ASPs already offer operational applications such as ERP and CRM software, there is a growing demand for ASPs to provide BI and data warehousing services as well. Hosted services are particularly attractive to small and midsize governments with limited IT resources because ASPs are touted as being capable of delivering analytical capabilities in a fraction of the time and up-front costs that it would take an organization to otherwise build or purchase its own system. The major barriers to ASP solutions are the market/financial instability of providers as well as data security and ownership issues.

The Market for EIS Products

The market for EIS products has experienced rapid growth over the past several years. Data from ERP systems, customer relationship management (CRM) systems, supply chain management (SCM) systems, and stand-alone systems have increased the demand for EIS. The major players in the marketplace include large ERP firms, stand-alone business intelligence package solutions, statistical software firms, and database vendors. With the EIS concept and products still in the nascent stages, there is no single dominant vendor in the public-sector EIS marketplace today. Public-sector organizations considering EIS have many alternatives to choose from. The major alternatives are discussed below. Spreadsheets and Databases Spreadsheets and databases are probably the easiest and most economical approaches to EIS. However, these software solutions have well-known disadvantages, such as weak document management and workflow capabilities. These approaches may be difficult to utilize for large datasets. Spreadsheets and databases may permit an EIS in contexts where end-user groups are small and datasets are simple. Homegrown EIS Some organizations that have adequate IT resources can develop their own homegrown EIS solutions. While homegrown EIS can result in a tighter fit to the organizations needs, such systems have difficulty keeping pace with technological advances. One industry analyst firm estimates that the installation costs of packaged solutions in the EIS area will be 50 to 75 percent less for implementation services and 40 to 60 percent less for software than pursuing the homegrown approach.8

Criteria for Evaluating EIS

Industry analysts have estimated that there are as many as 100 companies that provide partial or comprehensive software that may be used for EIS (Exhibit 4). Like ERP, the track record for EIS projects is subject to debate. A recent study suggests several reasons for the murky view of EIS. Some 70 percent of the respondents said that their projects had largely or completely met business goals (with significant variation across product types). However, nearly 40 percent of the products purchased from the top 10 companies were shelved (i.e., purchased and paid for, but went unused).11 With no shortage of players and issues in sight, it is important that governments considering EIS establish rigorous criteria for evaluating these systems. In addition to the typical considerations in doing business with software companies (i.e., financial stability, customer base of live sites, customer satisfaction, maintenance and support), GFOAs own experience and research has identified several other evaluation criteria. These criteria are discussed below. Business Content EIS should not be viewed simply as a data repository. Instead, the expertise of implementation firms should be tapped for conceptualizing new data models, processes, and indicators that form the content of EIS. EIS should provide extensive understanding of the benchmarks that are useful to evaluate business processes.

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Exhibit 4
BEST-OF-BREED EIS SOFTWARE VENDORS AND PRODUCTS
Company Name and Product Adaytum, Inc. e.Planning Server Suport Windows NT/2000 Database Support Oracle, SQL Server Main Features e.Planning consists of three componentsAnalyst (for building and managing the financial model), Contributor (the end-user component), and Reporter (which relies on Business Objects OLAP product for reporting and analysis). Adaytum has a client-centric approach whereby the end users Web client downloads ActiveX controls for calculations and business rules. This architecture allows end users to perform budgeting activities independent of the server and network and then submit the changes for updating the centralized model. The Business Objects product suite consists of an integrated business intelligence (BI) toolset, a BI platform, and a suite of analytic applications. Products have both thin-client and Web-enabled full-client versions. Solutions use a simple browser as their interface. Users can perform sophisticated OLAP analysis, even when working offline. Users also can share data through the WebIntelligence Extranet Edition. An Excel add-in enables users to conduct analysis in spreadsheets. Some packaged applications are available. Comshare MPC comes with four modules for planning, budgeting, financial consolidation, and management reporting and analysis. All share a common database, so information is continually cycled throughout the enterprise in a closed-loop process that provides ongoing feedback and promotes collaborative decision making. Congos EBI Platform is a technology infrastructure. The platform features a multi-layer portal as a single point of access to organization-wide data from which users can access querying, analysis, and reporting facilities. Congos now offers several BI packaged applications. Essbase server focused on OLAP-server technology to leverage Excel and Lotus as the client interface instead of building its own. Hyperion partnered with other products such as Crystal Reports and Business Objects to design a complete solution. Planning is a new Web-based tool designed to leverage Essbase engine. The foundation of SAS Solutions is an integrated suite of information delivery and analysis tools. SAS Solutions offers a wide range of query, statistical analysis, and reporting capacities for the data warehouse, including EISs, data mining, data visualization, statistical analysis, and forecasting. SAS e-Intelligence can extract data from Web-based applications and organize it into the data warehouse so that the data can be analyzed with SAS analytic tools. OutlookSofts user interface is Microsoft Excel, which is delivered via the Web rather than relying on a locally installed instance of Excel. The product also includes a portal-like component for displaying financial information in a personalized format.

Business Objects, Inc. BusinessObjects 2000

Windows NT/2000, Unix

Oracle, SQL Server, Hyperion Essbase OLAP server, IBM DB2

Comshare, Inc. Windows Comshare MPC 4.0 NT/2000, Unix, IBM AS/400

Oracle, SQL Server, Hyperion Essbase OLAP server Oracle, SQL Server, Hyperion Essbase OLAP server Hyperion Essbase OLAP Server with the ability to interface with other dtabases Oracle, SQL Server, DB2

Congos Corp. Congos Enterprise Business Intelligence Platform Hyperion Solutions Corp. Hyperion Essbase Product family

Windows NT/2000, Unix, IBM AS/400 Windows NT/2000, Unix, IBM AS/400

The SAS Institute SAS System and Solutions

Windows NT/2000, Unix, MVS, VMS

OutlookSoft

Windows NT NT/2000

SQL Server

Note: The information is based on marketing material collected from vendor Web sites and brochures. GFOA has not validated the claims of these products.

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MINNESOTA DEPARTMENT OF FINANCE EXECUTIVE INFORMATION SYSTEM

Purpose: The State of Minnesota Department of Finance is developing a Web-enabled EIS that will allow users easy access to predefined views of data stored in major state systems. The purpose is to support better financial management by executive decision makers and seniorlevel managers in state agencies by putting information at their fingertips. Implementation Plan: The goal of Phase I is to provide senior-level management with easy access to information. Phase II will provide users with the ability to develop whatif scenarios and cost projections. In addition, Phase II will support workflow functions necessary to share and approve scenarios and optionally update statewide administrative systems to reflect changed plans. Requirements: The following are the Department of Finances requirements for EIS: ability to view reports from any browser refers to most current data when opened displays data in both graphical and tabular formats drill-down reporting for further detail exception reporting to highlight trouble spots security options to provide or limit access to information Data Warehouse: The data warehouse resides in an Oracle Relational Database Management System running on a UNIX platform. The data warehouse contains current and historical information from the Minnesota Accounting and Procurement System and the Statewide Employee Management System. Source: Statement of Work for Technology Projects: Executive Information System, issued by Minnesota Department of Finance, 2001.

nel, services, and processes, as well as new mandates, laws, and regulations requiring the capture of different types of data. Integration Integration features raise two types of issues: data integration and system integration. Data integration refers to the ability to consolidate data from many different systems. An EIS will be particularly effective if it can overcome the challenge of information fragmentation, allowing executives to measure features of business processes that cross organizational boundaries. System integration refers to two things: (1) the extent of EIS software integration within the product itself (e.g., the analysis and reporting capabilities are not separate modules) and (2) the systems ability to coexist with other enterprise solutions. Architecture Choices Although thin client (i.e., minimal software code on the PC) seems to be an industry-wide direction for many applications, users must bear in mind that there is a trade-off between functionality/performance and mobility. The performance of the applications based on thin-client architecture may depend on the robustness of the network. In addition, the totally thin-client approach may not meet the needs of all users. For example, users who expect to do in-depth analysis may need additional client capabilities such as the ability to run SQL queries against the data warehouse and then use the results of those queries in other applications. A system that has a variety of technology architecture options can provide the flexibility required to meet such needs. Scalability An EIS should be expandable to accommodate growth in the user population and changes to organizational structure. EIS also should allow contributed content to grow without a slowdown in performance. EIS should support a broad range of users with different skill sets and levels of technological sophistication. Maintainability The extent of system administration is another factor to keep in mind. Administrators should be able to quickly integrate new applications, build new data models, and schedule updates. EIS vendors must be committed to upgrading the software in order to keep pace with advances in information technology. Procedures to ease system administration also must be in place (e.g., common infrastructure, processing, and security). Risk Levels There are three main risks in deploying EISsystem design, data quality, and technology obsolescence. System design risks stem from poor conceptualization of an enterprises true business needs before the technology is deployed. Data quality risks relate primarily to whether or not data has been properly cleansed. Technology obsolescence refers to the failure on the part of the vendor to anticipate new technologies (e.g., wireless).

Benchmarks include financial performance, cost management, workforce analytics, supply chain analytics, and citizen satisfaction. Performance This feature typically refers to the response time that a system provides to its users. Most responses should range from a few seconds to a maximum of 30 seconds for routine queries. Studies show that at intervals beyond 30 seconds users often assume that the system has failed.12 Response times are contingent on the complexity of the database and the calculations being requested. Nevertheless, long response times will lead to sub-optimization of EIS. User Friendliness An EIS should be designed to allow workers who do not know query languages and complex analytical techniques a fast, easy, and understandable way to drill down into data and identify trends and patterns. Like any technology, complexity fosters under-utilization. EIS should permit the user interface to accommodate different degrees of technical knowledge. For example, analysts with greater expertise in programming should have a more sophisticated user interface than line managers. Flexibility Flexibility determines whether an EIS solution can continually adapt to changing business conditions after the system has gone live. An EIS should be able to accommodate changes in person18
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Conclusions
Given the relatively small sample of Web-enabled EIS in the public sector, the verdict on the value of EIS is hardly conclusive. But there are lessons from the installation of other enterprise technologies that are likely to carry over to EIS. First, it is important that EIS designers have clear business objectives in mind. Given the sheer amount of data generated by governments, it is important to identify the initial business content of EIS. Second, governments should rely on vendors that have a proven track record in providing solutions that coexist with either ERP or legacy administrative and financial systems. Finally, as the amount of data in ERP systems and/or data warehouses increases, user demands/requests on EIS

will become taxing on the software and hardware. For this reason, it is important to assess the robustness of the solution under consideration to support potential increases in the volume of data and user populations. Governments seek to develop and manage services, programs, and resources as efficiently and effectively as possible. Information systems seek to enhance the ability of decision makers to make informed choices. In the attention economy, it is especially important to use technology to extract information with the highest probability of influencing enterprise strategy. Information is power for forward-thinking governments. Traditional stovepipe solutions and early ERP products trickled information up to support executives. This article described a new breed of Web-based applications that may change the practice of public management over the next several years.
NOTES 1 Cecelia Bellomo, Unleashing the Power of ERP, DM Review, February 1999 (www.DMReview.com). 2 See Robert Kaplan and Richard Norton (2000), The Balanced Scorecard, and Robert Kaplan and Robin Cooper (1999), Cost and Effect. Both books published by Harvard University Press, Boston. 3 Henry Morris, Linking Analytic and Operational Applications, IDC, 2000. 4 A. Kaniclides and C. Kimble, A Framework for the Development and Use of Executive Information Systems, (proceedings of GRONICS 95, Groningen, The Netherlands, ed. T. Lourens, February 1995), 47-52. 5 Nigel Pendse, OLAP Market Review, DM Review, October 2001 (www.DMReview.com).

6 7 8 9 10

11 12

Kevin C. Wyderka, Unlocking Your ERP Data, DM Review, June 2001 (www.DMReview.com). Bill Inmon, ERP and the Data Warehouse: Reading Tea Leaves, DM Review, August 2000 (www.DMReview.com). Analytical Application: Buy IT or Build It? Giga, June 26, 2000. AMR Research 2000. Y. Liang, M. Madden, and R. Roque, Application Service Provider Models for Financial System Outsourcing, in ERP and Financial Management Systems: The Backbone to Digital Government, ed. Rowan Miranda (Chicago: GFOA, 2001), 171-180. Nigel Pendse, OLAP Market Review, DM Review, October 2001 (www.DMReview.com). Nigel Pendse, The OLAP Report: What is OLAP, September 6, 2001 (www.olapreport.com).

LEO YONGHONG LIANG is a policy analyst in GFOAs Research and Consulting Center. He conducts research and consults on technology for financial systems. He holds a masters degree in public policy (MPP) from the University of Chicagos Harris Graduate School of Public Policy Studies, with a finance concentration. Liang was the Harris Fellow of the Class of 2000. ROWAN MIRANDA is the director of GFOAs Research and Consulting Center. He is the editor of GFOAs newly released book, ERP and Financial Management Systems: The Backbone to Digital Government. He holds a Ph.D. from the University of Chicagos Harris Graduate School of Public Policy Studies and serves on its graduate faculty.

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