MISK
MISK
INFORMATION SYSTEMS
MODULE 3
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CHAPTER 1
This is an organized grouping of components having certain interrelationships and working collectively to
achieve a set of objectives. The system approach is a method or framework which helps us to analyze and
explore the operations and interactions which exist in the systems around us.
Any given system possesses the follow characteristics or attributes:-
1. Organization – This is the arrangement of components that help to achieve objectives.
2. Central objective – Among the interacting components there has to be goals or objectives focused by all.
3. Interaction – This is the manner in which each component functions with other components of the
system.
4. Interdependence – This means that parts of the organization or system depend on one another.
5. Integration – This is concerned with how a system is tied together.
Elements of a System
1. INPUT – These are components that are required to be processed so as to give the output. This includes
raw materials, energy and human labor.
2. OUTPUT – This is the product of processing e.g. goods or a service.
3. PROCESSING – This is the transformation or conversion procedure of input into output. i.e. production
department or factory.
4. CONTROL – this element guides the system. In an organization this is the decision making body that
controls the pattern of activities, governs input, processing and output e.g the management of a
company.
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5. FEEDBACK – Control in a dynamic system is achieved by feedback which is the measure of output
against the standard.
6. ENVIRONMENT – This is the source of external elements that interact with the system or exert
pressure e.g. customers, suppliers, government policies and competition.
7. BOUNDARY – This are the limits that identity its components, processes and interrelationships when it
interfaces with another system e.g. in a company the invoicing function could be undertaken by the sales
department whereas in another it’s undertaken by the Account department.
Meaning of MIS
MIS consists of three words, that is Management, Information and System. On the basis of these three words
MIS can be defined as a system, which supplies information to Management. Actually, MIS is a process of
providing necessary information to management. It helps in planning, controlling and in taking different
managerial decisions. MIS is the structured, formal, systematic part of communication system. MIS is an
assemblage of personnel and facilities, organized into an integrated system by which relevant, adequate and
timely information is supplied to the executives.
It is to be mentioned that in respect of a large enterprise, MIS can be built around electronic computers. MIS is
not new, but only its computerization is new. Before the invention of computer, MIS techniques had existed to
supply operations. The computer has added one or more dimensions such as speed, accuracy and increased
volume of data.
According to Kennevans, MIS is an organised method of providing past, present and projection information
relating to internal operations and external intelligence.
According to Gordon B. Davis, MIS is an integrated man/machine system for providing information to support
the operations management and decision making functions of an organization.
According to Robert G. Mardick, goel E Ross and gomes R.Claggett, MIS is the System intended to provide
information for decision making, planning, organizing and controlling the operations of the subsystems of the
firm and to provide a Synergistic organization in the process.
Definition of MIS
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Any telecommunications and/or computer related equipment or interconnected system or sub-systems of
equipment that is used in the acquisition, storage, manipulation, management, movement, control, display,
switching, interchange, transmission or reception of voice and/or data, and includes software, firmware and
hardware.
Also, a MIS is an IS that provides information to the management to enable them plan,
coordinate, control monitor and make decision by providing routine, summarizes and
exceptional report.
The focus is on the design and operation of the MIS which means that the information system is viewed as a
means of processing data, i.e. the routine facts and figures of the organization, into information which is then
used for decision making. It is changes in decision behavior which distinguish data from information.
MIS
User
Data processes Decisions
Information processes
flows Flows
Figure 1.1
This means that MISs are qualitatively different from data processing systems and that management
involvement and interaction between information specialists and management are the key features of successful
MIS design.
Therefore, MIS can be defined as:
A system to convert data from internal and external sources into information and to communicate that
information, in an appropriate form, to managers at all levels in all functions to enable them to make timely
and effective decisions for planning, directing and controlling the activities for which they are responsible.
To be successful an MIS must be designed and operated with due regard to organization and behavioral
principles as well as technical factors. Management must be informed enough to make an effective contribution
to systems design and information specialists (systems analysts, accountants, operations researchers and others)
must become more aware of managerial functions and needs so that, jointly, more effective MISs are
developed.
Characteristics of MIS
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1) System approach: MIS is based on the System approach. It is a step by step approach to the study of
system and its performance. Performance is made in the light of the objective which has been constituted for
that purpose.
2) Management oriented: Under MIS, necessary information is provided to each manager at the right time,
in right form and a relevant one, which is required by the management by providing information in taking
effective managerial decision.
3) Future oriented: MIS is designed and developed keeping in view the future position of the business.
Therefore, MIS should provide useful information on the basis of projections based on which future action can
be taken.
4) Integrated: MIS is designed in taking a comprehensive view or looking at the complete picture of the
interlocking sub-systems that operate within the company. It considers all aspects of production, marketing,
accounting, financing, management etc.
5) Common-data followed: MIS deals with the common data that are available in the business. MIS
provides data and information for taking effective managerial decision, which must select the real picture of the
business.
6) Long term planning: MIS is prepared for long term planning of the business. So, the designer should
avoid the outdated data and information in designing and developing time of MIS. The designer should consider
the present situation and future trend of the business activities, when MIS is designed.
7) Control database: Another important characteristic of MIS is that it always based on centralized data and
information. It is because of this fact that MIS is to supply data and information in such a way so that the
management can take its important decision.
Functions of MIS
The main purpose of MIS is to provide the management with the necessary information for decision making. In
order to achieve this purpose MIS is to perform the following functions.
1) Collection of data: The first function of MIS is to collect necessary data from both internal and external
sources of the organization. The data of the organization which have already been gathered are kept in some
physical medium such as a paper form or entering it directly into computer system.
2) Processing data: After storing the data, the next important function of MIS is to process the same. In the
processing, the data are converted to require management information, calculating company, sorting, classifying
and summarizing etc. are the necessary activities to be done for processing the data.
3) Storage of information: Under the MIS, necessary data and information are carefully stored, so that it
can save time for searching the same. Generally, data and information are stored by reserving and organizing
them in the form of files, records and databases for future use
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4) Retrieval of information: Another function of MIS is to retrieve the information to meet the exact
management information demands. So retrieval should be done as per the requirement of the management
users.
5) Disseminating: Disseminating is the last function or finished product of MIS. By disseminating the data
and information are divided and distributed to the users in an organization. This can be done through reports or
outline through computer terminals periodically.
Components of MIS and their relationship
A management information system is made up of five major components namely people, business processes,
data, hardware, and software. All of these components must work together to achieve business objects.
People – these are the users who use the information system to record the day to day business transactions. The
users are usually qualified professionals such as accountants, human resource managers, etc. The ICT
department usually has the support staff who ensure that the system is running properly.
Business Procedures – these are agreed upon best practices that guide the users and all other components on
how to work efficiently. Business procedures are developed by the people i.e. users, consultants, etc.
Data – the recorded day to day business transactions. For a bank, data is collected from activities such as
deposits, withdrawals, etc.
Hardware – hardware is made up of the computers, printers, networking devices, etc. The hardware provides
the computing power for processing data. It also provides networking and printing capabilities. The hardware
speeds up the processing of data into information.
Software – these are programs that run on the hardware. The software is broken down into two major
categories namely system software and applications software. System software refers to the operating system
i.e. Windows, Mac OS, and Ubuntu, etc. Applications software refers to specialized software for accomplishing
business tasks such as a Payroll program, banking system, point of sale system, etc.
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• As a means of communication: managers need to know about developments, plans, forecasts, and
impending changes and so on.
• As a memory supplement: by having historical information about performance, transactions, results of
past actions and decisions available for reference, personal memories are supplemented.
• As an aid to simplification: by reducing uncertainty and enhancing understanding, problems and situations
are simplified and become more manageable.
Characteristics of good Management Information System
• The purpose of a management information system is to help executives of an organization make decisions
that advance the organization's goals. An effective MIS assembles data available from company
operations, external inputs and past activities into information that shows what the company has achieved
in key areas of interest, and what is required for further progress. The most important characteristics of an
MIS are those that give decision-makers confidence that their actions will have the desired consequences.
Relevance
• The information a manager receives from an MIS has to relate to the decisions the manager has to make.
An effective MIS takes data that originates in the areas of activity that concern the manager at any given
time, and organizes it into forms that are meaningful for making decisions. If a manager has to make
pricing decisions, for example, an MIS may take sales data from the past five years, and display sales
volume and profit projections for various pricing scenarios.
Accuracy
• A key measure of the effectiveness of an MIS is the accuracy and reliability of its information. The
accuracy of the data it uses and the calculations it applies determine the effectiveness of the resulting
information. The sources of the data determine whether the information is reliable. Historical performance
is often part of the input for an MIS, and also serves as a good measure of the accuracy and reliability of
its output.
Usefulness
• The information a manager receives from an MIS may be relevant and accurate, but it is only useful if it
helps him with the particular decisions he has to make. For example, if a manager has to make decisions
on which employees to cut due to staff reductions, information on resulting cost savings is relevant, but
information on the performance of the employees in question is more useful. The MIS has to make useful
information easily accessible.
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Timeliness
• MIS output must be current. Management has to make decisions about the future of the organization based
on data from the present, even when evaluating trends. The more recent the data, the more these decisions
will reflect present reality and correctly anticipate their effects on the company. When the collection and
processing of data delays its availability, the MIS must take into consideration its potential inaccuracies
due to age and present the resulting information accordingly, with possible ranges of error.
Completeness
• An effective MIS presents all the most relevant and useful information for a particular decision. If some
information is not available due to missing data, it highlights the gaps and either displays possible
scenarios or presents possible consequences resulting from the missing data. Management can either add
the missing data or make the appropriate decisions aware of the missing information. An incomplete or
partial presentation of information can lead to decisions that don't have the anticipated effects.
a). The pre-specific processing of day to day transactions ,known as data processing or
transaction processing and the production of regular reports analysis and information for
planning control and decision making directly by the computer.
b). the use of computers by the end –users themselves .They include managers,
accountants, office staff, sales people executive etc.
Both produce management information. The key difference is that the pre specified
systems supply pre- determined outputs and reports so there is less flexibility.
This means that great care must be taken in analyzing and determining management’s
real information .On the other hand, with the end user computing there is more flexibility
and interaction so that the emphasis becomes one of supporting the end user rather
than the production of a specified report.
That is, information systems that support managers at different levels of the
organization. This classifies IS as transaction processing systems (TPS, to support
operational level), management information systems (MIS, to support middle/tactical
level), and Executive information system (EIS, to support the senior level management).
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These are information systems that support operations and management of different
functions within an organization. They include: financial management systems, human
resource management systems, marketing management systems etc.
They are classified according to the support they provide. They include:
They are designed to help senior management make strategic decisions. An ESS gathers analyses and
summarizes the key internal and external information used in the business. ESS typically involves lots of
data analysis and modeling tools, such as "what-if" analysis, to help strategic decision-making.
A good way to think about an ESS is to imagine the senior management team in an aircraft cockpit, with
the instrument panel showing them the status of all the key business activities.
They are primarily concerned with internal sources of information. MIS usually take data from the
transaction processing systems (see below) and summarize it into a series of management reports.
Specifically designed to help management make decisions in situations where there is uncertainty about
the outcomes of those decisions.
DSS use tools and techniques to help gather relevant information and analyze the options and
alternatives. DSS often involves use of complex spreadsheet and databases to create "what-if" models.
Exist to help businesses create and share information. They are typically used in businesses where
employees create new knowledge and expertise, which can then be shared by other people in the
organization to create further commercial opportunities. Good examples include firms of lawyers,
accountants and management consultants.
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KMS are built around systems which allow efficient categorization and distribution of knowledge. For
example, the knowledge itself might be contained in word processing documents, spreadsheets,
PowerPoint presentations. Internet pages etc. To share the knowledge, a KMS would use group
collaboration systems, such as an intranet.
Try to improve the productivity of employees who need to process data and information.
Perhaps the best example is the wide range of software systems that exist to improve the productivity of
employees working in an office (for example, Microsoft Office XP), or systems that allow employees to
work from home or while on the move.
Social-technical Systems
The socio-technical view of organizations was developed by Trist and the Tavistock Institute and arose from
consideration that any production system requires both a technological organization, i.e. the equipment,
processes, methods, etc. and a work organization relating to those who carry out the necessary tasks to each
other, i.e. the social system. Based on this view an organization is not just a technical or social system but is the
structuring of human activities round various technologies.
The technologies involved determine the technical sub-systems and vary widely. Consider, for example, the
differing skills, procedures, machinery, equipment and the layout of facilities required in an electronics
company, a car manufacturer, a hospital or a computer bureau.
In addition to the technical sub-system, every organization has a social subsystem which consists of the
aspirations, expectations, interactions and value systems of the members. The two sub-systems - the technical
and the social -cannot be looked at separately but must both be considered as interrelating within the
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organization. Socio-technical theory suggests that the organization consists of four interrelated elements - tasks,
people, structure and technology as shown in Figure below:
Technology
Structure People
Tasks
More traditional approaches to Organizations and their problems have tended to concentrate on one or other of
the sub-systems with little or no recognition of the other.
Social-Technical View of IS
Contemporary Approaches to Information Systems
The study of information systems deals with issues and insights contributed from technical and behavioral
disciplines.
The technical approach emphasizes mathematically based, normative models to study information systems, as
well as the physical technology and formal capabilities of these systems. The behavioral approach, a growing
part of the information systems field, does not ignore technology, but tends to focus on non-technical solutions
concentrating instead on changes in attitudes, management and organizational policy, and behavior.
MIS combines the work of computer science, management science, and operations research with a practical
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orientation toward developing system solutions to real-world problems and managing information technology
resources. It is also concerned with behavioral issues surrounding the development, use, and impact of
information systems, which are typically discussed in the fields of sociology, economics, and psychology
In the sociotechnical view of systems, optimal organizational performance is achieved by jointly optimizing
both the social and technical systems used in production. Adopting a sociotechnical systems perspective
helps to avoid a purely technological approach to information systems.
Technology must be changed and designed, sometimes even "de-optimized," to fit organizational and individual
needs. Organizations and individuals must also be changed through training, learning, and planned
organizational change to allow technology to operate and prosper.
Information systems are sociotechnical systems. Although they are composed of machines, devices, and "hard"
physical technology, they require substantial social, organizational, and intellectual investments to make them
work properly. Since problems with information systems—and their solutions—are rarely all technical or
behavioral, a multidisciplinary approach is needed.
A Sociotechnical Perspective on Information Systems
In a sociotechnical perspective, the performance of a system is optimized when both the technology and the
organization mutually adjust to one another until a satisfactory fit is obtained.
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Systems And Adaptability
To be successful and to remain in existence, organizations must be flexible and adapt to change. This means change not
only in the Organization's relationship with the external environment but also in its internal methods and structures.
Successful Organizations are characterized by their internal openness and their readiness to accept that yesterday's
methods and products are very unlikely to be suitable for tomorrow. Recognizing the need for change, initiating change
and managing change successfully are the hallmarks of good quality management. Organizations do not automatically
adjust to change.
Adaptation only occurs as a result of management decisions and action. Successful change is change that is planned and
considered. This means that the effects on the Organization as a whole must be considered when making a change to part
of the Organization. It will be recalled that a key element of the systems approach is that changes in parts of a system
affect the system as a whole. Thus, to make successful changes one must be aware of the interactions which exist in the
Organization.
Systems theory recognizes that open systems can achieve their objectives in a variety of ways using varying inputs,
processes and methods. This is known as equifinality.
a) Holism or synergy- All systems are composed of interrelated parts or sub-systems and the system can
only be explained as a whole (Holism or synergy). This is known as holism or synergy. Holism states
that any whole is more than the sum of its individual parts. When the appropriate parts are combined,
properties appear from the whole which the parts alone do not possess. These are known as emergent
properties. Examples of emergent properties are:
• Taste: a property of water not the constituent hydrogen and oxygen atoms.
▪ Growth: a property arising from the combination of seeds and soil.
▪ Obsolescence (Uselessness): likely to arise from consideration of financial, technical and
personnel factors. A machine may still work but may be too expensive or dangerous to run or may no
longer be required for current production.
b) Systems are hierarchical in that the parts of sub-systems are made up of other smaller parts. For
example, the accounting systems of an organization may be a sub-system of the information system
which is itself a sub-system of the planning system, which is a sub-system of the organization as a
whole. Progressing down the hierarchy increases the detail but reduces the area whilst moving upwards
provides a successively broader view.
c) The parts of a system cannot be altered without affecting other parts. Many organizational problems
stem from ignoring this principle. For example, a departmental procedure or form might be changed
without considering the ripple effects on the other departments affected, with dire consequences.
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d) The sub-systems should work towards the goal of their higher systems and not pursue their own
objectives independently. If sub-systems pursue their own objectives to the determent
of higher objectives (organization), this condition is known as sub-optimally i.e.
they aren’t performing optimally.
e) Organizational systems contain both hard and soft properties. Hard properties are those that can be
assessed in some objective way. Examples are; the number of components in a storage bin, the amount
of PAYE tax a person will pay. The soft aspects of a system are a matter of individual values or taste.
They cannot be assessed by any objective standard or measuring process. Examples are: the appearance
of a product, the suitability of a person for a job, any problem containing a political element and so on.
Entropy
Entropy is the term for the disorder or chaos in a system. Totally closed systems naturally deteriorate
and the total entropy in a system, without inputs, always increases.
Entropy can be countered by bringing in information and other stimuli from the system’s environment.
This helps the system to adapt and lower its entropy. Such a process is known as introducing negative
entropy.
Interconnections
Each sub-system has many inputs and outputs resulting in several interconnections
within the same system. Such interconnection of interfaces increases the cohesion
between them. It thus increases the complexity of making it difficult to manage, co-
ordinate and modify e..g
Changing the system that products customer details may affect other sub-system
in the sales ledger module.
A system with 4 sub-systems will have 6 possible interconnections in the formula
n (n-1) where n is the number of sub-systems.
2
General formula to give number of interconnections where n is the number of sub-
system is given by N (N-1)
Decoupling:
This is the tight connection between sub-components e.g. resources and facilities
need to be finely balanced, parts and documentation must be available and there
must be good flow of information. The solution is to decouple or looser or reduce the
intensity of interactions so that the sub-systems can operate with a degree of
independence.
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Members of management use the information produced together with the information already within their
heads, called knowledge, to plan, control, and make decisions or to modify the produced information so as to
share the new knowledge with others in the organization. Knowledge management, which is the tools and tech-
niques for collecting, managing and disseminating knowledge within the organization, is of increasing
importance in today's high-technology business environment.
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To discover knowledge the processed data may go through a transformation that makes
them ready for analysis.
The analysis is done with data mining tools which looks for patterns and supports data
interpretation. The result of this is generated knowledge. This knowledge is then
presented to the user and is thus stored in a knowledge base.
Data Characteristics
Data are facts obtained by reading, observation, counting, measuring, weighing, etc., which are then recorded.
Frequently they are called raw or basic data and are often records of the day-to-day transactions of the
organization.
Data are derived from both external and internal sources and whilst most external data are in readily usable and
concrete forms.
Data Quality (DQ)
This is the quality of data that will determine its usefulness as well as the decisions.
There are various problems associated with data quality and can be categorized into the
following:-
(i) Intrinsic data quality
- Accuracy
- Objectivity
- Believability
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- Reputation
(ii) Accessibility data quality
- Accessibility
- Security
One of the major issues of DQ is data integrity. Older filing system may lack integrity i.e.
changes made in one file is one place may not be made in the file in another place or
department i.e. there is conflict of data.
• The purpose of a data warehouse is to establish a data repository that makes data
accessible and really acceptable.
• The data is organized within the warehouse as a relational database so that it’s easy
for users to access.
• The data are organized by subject such as the vendor, product and functional area.
• Adamant is a replicate subset of a data warehouse and is dedicated to a functional
or regional area e.g. many companies have marketing adamant or adamant for
foreign operations.
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profits calculated as a function of the sales revenue for each type of sales
channels (mode of distribution).
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Data mining:
It derives its name from the similarities between searching for value business
information in a large database and mining on a mountain for mineral ores. This is the
going via immerse volumes of data to generate business opportunities.
8. Because of the large amounts of data its sometimes necessary to use parallel
processing for data mining.
Data visualization refers to the representation of data by technologies such as
digital images; graphical user interfaces or animations visualization software
packages often use capabilities for self-guided exploration and visual analysis of
large amounts of data.
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What is information?
Information is data that have been interpreted and understood by the recipient of the message. It will be noted
that the user not just the sender is involved in the transformation of data into information. There is a process of
thought and understanding involved and it follows that a given message can have different meanings to different
people. It also follows that data which have been analyzed, summarized or processed in some other fashion to
produce a message or report which is conventionally deemed to be ‘management information’ only because
information is understood by the recipient.
In summary, information is knowledge and understanding that is usable by the recipient. It reduces uncertainty
and has surprise value. It must tell the recipient something not already known and which could not be predicted.
If a message or report does not have these attributes, as far as the recipient is concerned, it contains merely data
not information. This is a crucial point not always fully appreciated by information specialists.
Ideally, managers should be able to define the type of information they require and the MIS should be able to
supply it. In practice, of course, it does not happen like this and managers have to use whatever information is
available, from whatever source. As Drucker said:
"The manager will never be able to get all the facts he should have. Most decisions have to be based on
incomplete knowledge - either because the information is not available or it would cost too much in time
and money to get it. There is nothing more treacherous or alas, more common, than the attempt to make
precise decisions on the basis of coarse and incomplete information.
(Drucker, Management: Tasks, Responsibilities, Practices, 1993)
In spite of the difficulties of producing it, managers need relevant and timely information to assist them to plan,
to control and to make decisions. Relevant information is information which:
A. increases knowledge
B. reduces uncertainty
C. is usable for the intended purpose.
A worthwhile extension to the well-known adage that 'management get things done through people' would be
that, 'management get things done through people, by using relevant and timely information'.
Although all managers need information they do not all need the same type of information. The type of
information required is dependent on many factors including: the level of management, the task in hand,
confidentiality, urgency, etc.
Information classifications
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Information has many characteristics and can be classified in numerous ways
including: by source: e.g. internal, external, primary, secondary, Government
by nature: e.g. quantitative, qualitative, formal, informal
by level: e.g. strategic, tactical, operational
by time: e.g. historical, present, future
by frequency: e.g. continuous (real time), hourly, daily, monthly, annually
by use: e.g. planning, control, decision making
by form: e.g. written, aural, visual, sensory
by occurrence: e.g. at planned intervals, occasional, on demand
by type: e.g. detailed, summarized, aggregated, abstracted.
TALL FLAT
2. Specialization: This is the division of labor in an organization. Its usually based on
the different functions such as marketing, accounting, production and distribution.
GENERAL MANAGER
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Managers seek to change the culture of the organization. What they try to do is shape
the way people behave, feel, contribute, interact and perform as employees of the
organization. This is usually called leadership. They initiate debates and set priorities.
New polices, methods and roles are introduced to shape behaviors, encourage, promote
and require – to push certain expectations of performance in the business and thus to
control.
In other words culture is organizational terms is broadly the social and behavioral
manifestation and experiencing of whole range of issues such as:-
1) The way work is organized and experienced.
2) How authority is exercised and distributed.
3) How people are and feel rewarded organized and controlled.
4) The values and work orientation of the staff.
5) The degree of formalization, standardization and control through systems.
6) The value placed on planning, analysis, logic and fairness etc
7) How much initiative, risk taking, scope of individuality and expression is given.
8) Rules and expectations about such things as informality in interpersonal relations,
dressing etc.
9) Emphasis given to rules, procedures, specifications of performance and results,
team or individual working.
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The following factors have led to changes in the business environmental as a result of
information systems solution:
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appeals to loyalties to ensure the proper operation of the firm. For this to be
possible an organization requires powerful information systems.
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Chapter 2
Information system
Information system has been defined in terms of two perspectives: one relating to its function; the other relating
to its structure. From a functional perspective; an information system is a technologically implemented medium
for the purpose of recording, storing, and disseminating linguistic expressions as well as for the supporting of
inference making.
From a structural perspective; an information system consists of a collection of people, processes, data, models,
technology and partly formalized language, forming a cohesive structure which serves some organizational
purpose or function. The functional definition has its merits in focusing on what actual users - from a
conceptual point of view- do with the information system while using it. They communicate with experts to
solve a particular problem. The structural definition makes clear that IS are socio-technical systems, i.e.,
systems consisting of humans, behavior rules, and conceptual and technical artifacts.
An information system can be defined technically as a set of interrelated components that collect (or retrieve),
process, store, and distribute information to support decision making and control in an organization. In addition
to supporting decision making, coordination, and control, information systems may also help managers and
workers analyze problems, visualize complex subjects, and create new products.
Three activities in an information system produce the information that organizations need to make decisions,
control operations, analyze problems, and create new products or services. These activities are inputting,
processing and outputting. Input captures or collects raw data from within the organization or from its external
environment. Processing converts this raw input into a more meaningful form. Output transfers the processed
information to the people who will use it or to the activities for which it will be used. Information systems also
require feedback, which is output that is returned to appropriate members of the organization to help them
evaluate or correct the input stage.
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5. Procedures – This is a set of instructions about how to combine the above
components in order to process information and generate the desired output.
6. People – These are the individuals who work with the system or use its output
The main purpose of Information System is to provide the management the necessary information for decision
making. In order to achieve this purpose MIS is to perform the following functions.
Collection of data: The first function of MIS is to collect necessary data from both internal and external sources
of the organization. The data of the organization which have already been gathered are kept in some physical
medium such as a paper form or entering it directly into computer system.
(i) Processing data: After storing the data, the next important function of MIS is to process the same. In the
processing, the data are converted to require management information, calculating company, sorting,
classifying and summarizing etc. are the necessary activities to be done for processing the data.
(ii) Storage of information: Under the MIS, necessary data and information are carefully stored, so that it can
save time for searching the same. Generally, data and information are stored by reserving and organizing
them in the form of files, records and databases for future use.
(iii) Retrieval of information: Another function of MIS is to retrieve the information to meet the exact
management information demands. So retrieval should be done as per the requirement of the
management users.
(iv) Disseminating: Disseminating is the last function or finished product of MIS. By disseminating the data
and information are divided and distributed to the users in an organization. This can be done through
reports or outline through computer terminals periodically.
An Organization as a System
ENVIRONMENT Standard
• Customers Polices & decision
• Suppliers making
• Competitors Management
• Govt. Policies
Control
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CONTROL PRINCIPLES
Control is the process of ensuring that operations proceed according to plan and at the most basic level-this is
done by comparing the actual results or output of the system against a target and using any differences found to
adjust the input side of the system so as to bring activities in line with the target. In practice the target may be
termed a norm, a budget a standard, a performance or stock level and so on.
Types of Control Systems
There are basically two types of control system: the open loop system and the closed loop control systems.
This is a simple open loop control system. Its operation is very simple, when an input signal directs the control
element to respond, an output will be produced. Examples of the open loop control systems include washing
machines, light switches, gas ovens, etc.
The drawback of an open loop control system is that it is incapable of making automatic adjustments. Even
when the magnitude of the output is too big or too small, the system will not make the appropriate adjustments.
For this reason, an open loop control system is not suitable for use as a complex control system. Sometimes it
may even require monitoring and response from the user.
Sometimes, we may use the output of the control system to adjust the input signal. This is called feedback.
Feedback is a special feature of a closed loop control system. A closed loop control system compares the output
with the expected result or command status, and then it takes appropriate control actions to adjust the input
signal. Therefore, a closed loop system is always equipped with a sensor, which is used to monitor the output
and compare it with the expected result.
The diagram shows a simple closed loop system. The output signal is fed back to the input to produce a new
output. A well-design system can often increase the accuracy of the output.
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Feedback
This is the gathering of information on past performance from the output of a system,
department or process and using it to govern future performance by adjusting the input
size of the system.
One advantage of using the closed loop control system is that it is able to adjust its
output automatically by feeding the output signal back to the input.
In a closed loop control system, the controlled variable (output) of the system is sensed
at every instant of time, feedback and compared with the desired input resulting in an
error signal. This error signal directs the control elements in the system to do the
necessary corrective action such that the output of the system is obtained as desired.
The feedback control system takes into account the disturbances also and makes the
corrective action.
These control systems are accurate, stable and less affected by noise. But these control
systems are sophisticated and hence costly. They are also complicated to design for
stability, give oscillatory response and feedback brings down the overall gain of the
control system
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Feedback Loops
Low-level
Controller
Standard
Effector Comparator
1. SENSOR- This is the measuring and recording device for example automatic metering or some kind of
paper work.
2. COMPARATOR – This is he means by which comparisons of actual results and the plan are achieved
e.g. A clerk or a computer program.
3. EFFECTOR – This could be a manager or supervisor acting on the report to make adjustments.
The procedure outlined above, i.e. input - process - output - monitor and compare - adjustment, requires what is
known as a feedback control loop and such a loop is a common feature of many aspects of MIS, for example,
stock control, budgetary control, production control and so on. It will be realized that the basic system described
is relatively mechanistic and is therefore not necessarily suitable for all facets of the organization’s activities.
Feed Forward
Where a self-regulating feedback system is not able to control a process adequately it may be feasible to use
feed forward. This is where monitoring at some early stage of a system or process may indicate that an
adjustment should be made at a later stage of the process, prior to the final output. Feed forward is not an
automatic process and requires management intervention for it to operate successfully and, consequently, it does
not have the degree of 'automatic' control inherent in a feedback system.
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Timing of Control
Control is most effective when the time rank between the output and the corrective
action is minimal. The speed of control is influenced by organization structure and the
reporting period. Managers may be unable to effect control due to the following
reasons:-
1. The subject covered is outside manager’s control.
2. The information comes too late for effective action to be taken.
3. Insufficient details are provided.
4. The information that is provided is in a form that isn’t understood.
PLANNING
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1. Operational System
They monitor elementary activities and transactions of the organization e.g. sales,
receipts, cash deposits, payroll and flow of materials in the factory.
The main purpose of these systems is to answer routine questions and track the flow
of information in the organization. To answer this information must be available, it
should be current and accurate e.g. a bank deposit query from a bank A.T.M.
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the operations. They may focus on the less structures decisions for which information
requirements aren’t always clear and attempt to answer the ‘what if’ questions.
4. Strategic Level Systems
These support the long-range planning activities of the senior level management both
from the environment and internally. Their main concern is maintaining changes in
the external environment with the existing information and activities.
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TPS are central to an organization such that if there is a failure it can bring the
organization to a standard still. The information inputs for the TPS are in the form of
transactions and events. Processing involves sorting, listing, merging and updating.
The information output are detailed reports which are given to the operational staffs and
supervisors.
It provides the input data for many other systems. T.P.S is critical to the success of any
organization since they support the law level operations such as purchasing o raw
materials. Billing customers and preparing the payroll etc.
The objectives of T.P.S are:
1. To provide all information needed by law or by the organization policy to keep the
business running properly and efficiency.
2. Provide timely documents and reports.
3. Increase the competitiveness of the organization.
4. Provide necessary data for tactical and strategic systems e.g. the DSS.
5. To assure accuracy and integration of data and information.
6. To safeguard assets and security of information.
NB: T.P.S is the most likely candidates for re-engineering and usually yield the most
tangible benefits of I.T. investments.
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8. This system requires a high level of accuracy, data integrity and security.
5. Payroll
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This monitors the salaries and has the primary output as checks and pay slips to be
distributed to the employees and provides a payroll register which is a summary of
all the transactions.
6. Human Resources
This system gives the information about the employees for personnel planning
and government reporting and also the management of the company to benefit
from other programmes. These include information on the employee’s e.g. net
pay, deductions e.t.c.
7. General ledger
This is a record of the monetary transactions e.g. payment to suppliers, receipts
from customers and payments to employees. It will give financial statements such
as the trading and profit and loss account, the trial balance and the balance sheet.
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The processing includes routine reporting, simple modeling and low level analysis. The
outputs are summary and exceptional reports for middle managers.
Adhoc reports are reports that aren’t available immediately but can easily be generated
by specifying certain parameters at any given time.
Exceptional reports are the reports that give a deviation in controls within a certain
system e.g. payroll where employee’s way is listed those that have negative salary.
1. A detailed report.
Such a report is frequently used to verify that the transactions have been entered and processes
corrected. Such a report is however long and not good for reporting trends or problems
(progress).
Order Custom Sales Shipme Qty Item Amoun
no. er code person nt date t
2. Summary Report
Brings together one or more related transactions and shows the total results.
Whereas the detailed report would give all the sales made in the company within a
specified time period, the summary report will indicate the sales amount for all the
personnel in the sales department within the specified period.
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3. Exceptional Reports
These reports display data only about exceptional conditions. It records abnormal
cases e.g. customers who have exceeded their credit limit but are receiving their
goods or products and that their current credit limit is negative according to the
system.
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ESS
MIS DSS
KWS
or DAS TPS
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5. It has extensive analytical capabilities using logical and mathematical
manipulation of data.
6. It combines one internal and the external information so as to build its own
databases.
7. It has a graphic facility to portray the decision situation rather than the tabular
display or data.
COMPONENTS OF A D.S.S
Retrieval Extraction
of data from Internal
and External sources Dialogue management Menus, icons, natural
language and graphics
system
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ii) Simulation models – this generates input values randomly from probability
distribution e.g. to determine the number of operators or cashiers needed.
iii) Optimization models – these are developed by management scientists for the
allocation of resources to maximize profits or minimize costs and time. They are
usually based on linear programming.
Dialogue Management System (SUB-SYSTEM)
Since the D.S.S has the ability to apply models to large volumes of data from a variety
of sources, the advantage of a D.S.S is that the user finally and has a flexible
interface between the human decision maker and the computer system. These sub-
systems support multiple forms of input and output. A.I has improved on this by adding
the ability to specify what is required in a subset of national language on activate the
system by voice. The windows capability enables the user to maintain several activities at
the same time. Extensive computer graphics are also utilized and the kind of dialogue will
take the following form:-
a) Who is the biggest?
b) How do circumstances change over a given time?
c) How will one fact predict another?
d) What is typical or exceptional?
Classifications of DSS
They can be classified by the manager’s level i.e. operational tactical or functional area
e.g. marketing, finance and personal among others.
1. Data Access System
They provide a user friendly interface and adhoc access to the database. This is
similar to what is offered by database management through a quarry language.
These systems are meant for operational control.
2. Data Analysis System
They help to analyze historical and current data either on demand or periodically e.g.
comparing the performance with that of the competitors.
3. Forecast-oriented Data Analysis systems
They assist in developing product plans including market segment forecast, sales
forecast and analysis of competitive actions. Their operation is based on access to a
variety of internal and external sources, marketing and product databases including a
series of historical data.
4. Systems based on Accounting Models
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3. D.S.S. Tools – This programming language with good capabilities for accessing
arrays of data e.g. APL, a plain spreadsheet, a statistical package SPSS or SAS or
a DBMS with a Query facility which can be used as a building block to contract
a
D.S.S generator or A specific D.S.S.
DSS MIS
1. A DSS is more targeted. An MIS is more widely spread
2. They focus on specific They use routine flows of data to assist
decisions in the general control.
3. They are aimed at all They are largely dominated by
managers professional e.g. accountants and HR
experts.
4. They are continuously They follow a particular system
interactive development methodology.
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This involves detailed system planning, analysis, design, coding, testing and
implementing. This method is good for complex D.S.S. and D.S.S generator.
3. Iterative development (prototyping).
In DSS development users may not know what they what from the system. A
prototype, which is a simple initial version, is used to experiment with and learn about
the desired features of the system. This method of development relies on the creation
of such a prototype and its progressive refinement. The simple version consist of 3
elements i.e. the Database. The dialogue and the model sub systems.
Develop a Prototype
documentation of
DSS
No DSS is ready
for use
Prototype /DSS modification
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Industry trends √ √
Competitive analysis √ √
Consumer analysis √ √
4. Personnel
Performance data √ √ √
Availability of key √ √
personnel
5. Project status and promotional √ √
plans
Characteristics of E.I.S
• They provide immediate and easy access to information reflecting the key
success factors of the company and its subsidiaries.
• They use user-seductive interface e.g. color graphics and video which help the
user to grasp trends at a glance.
• Provide access to a variety of databases both from internal and external
sources through a uniform standard interface.
• Provide both the current status and the projection of data.
• Allow easy tailoring to the preferences of a particular user or group of users e.g.
Windows XP.
• They have the capabilities of drilling down the data.
• They create a generalized computing and communication environment rather
than providing any fixed application of a specific capability.
• They are designed to incorporate data about external event. e.g. new tax data
on competitors but also use summarized information from the DSS and the MIS.
• They filter/compress and track critical data emphasizing the reduction of time
and effort required to obtain executive information.
• Information is the average of internal and external data which are highly
summarized.
• The processing involves the production of graphics and simulations whereas the
information outputs are projections and responses to the queries of the senior
managers.
Developing E.I.S
Executive need change rapidly and so high level executive expect success the first time.
This implies that the developers of E.I.S must consider the following:-
1. Using prototyping techniques to develop a user-friendly system.
2. Including a facility for environmental scanning that uses internal and external data
to detect problems in organizational environment, strategic trends and
opportunities.
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6. Flexibility in their use in that they put the data and the tool in the hands of
executives without addressing specific problems or imposing solutions.
Decision making is an integral part of management and occurs in every function and at all levels. Naturally the
type of decisions taken varies enormously but all decision makers have to go through a similar process. All of
them must decide by some means to choose the outcome or outcomes which are considered necessary or
desirable to them and to do so after some form of appraisal of the situation.
H.A. Simon, a leading authority on management decision making, considers that decision making comprises
four principal phases: finding occasions for making decisions, finding possible courses of action (i.e.
alternatives), choosing among courses of action, and evaluating past choices.
Phase 4Review
It is important to realize that although there is a general flow from intelligence to design to choice to review, at
any time there could be a return to an earlier phase. For example, a decision maker in the choice phase, who
finds no suitable alternative among those currently available, would return to the design phase to develop more
alternatives. Decision making is an iterative process and although it is useful to separate out the various phases
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in order to discuss them, very few decisions are taken in this neat, logical sequence. There is feedback/
interrelationships between decisions; there is flair, intuition, judgment and creativity.
Decision making is based on information. Information is the trigger to knowing there is a problem. Information
is needed to define and structure the problem, to explore and choose between the alternative solutions and to
review the effects of the implemented choice.
Simons model of decision making
2. What are the alternatives? Design As you design you may make use of simulation and
prototyping which utilizes DSS and KWS
3. Which should you choose? This require “what if” simulation and uses DSS and
Choice other large models.
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These decisions are partly programmable and partly rely on decision maker judgment.
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Note: alternative terms for these two categories are structured and unstructured.
The two categories should be thought of as the extreme ends of a range of decision types with many decisions
containing elements of both categories. The terms programmed and non-programmed are not related to
computer processing. They refer to the nature of the decision process and to the extent that the process can be
pre-planned.
There is some relationship between the level of management and the decision type: broadly more programmed
decisions at lower levels and more unstructured decisions at higher levels, but this is not an absolute rule. Some
high level decisions contain structured elements, an example being a costly plant replacement decision which is
likely to be taken at the highest level and for which decision rules are available using replacement analysis and
investment appraisal techniques.
Levels of decision making
Decision making takes place at each level of management in an organization although there are markedly
different characteristics at each level. Each level has substantially different information requirements. The
figure below summarizes the main characteristics and information requirements of the various levels.
Tactical
Repetitive, short time scale, small-scale Largely internal, mainly historical,
resources, usually structured, clear detailed, often quantitative, high
Operational objectives and decision rules, little or precision, instant availability often
no discretion critical, narrow in scope, comprehensive
The tactical level of management occupies an intermediate position between the two extremes with some of the
characteristics of both. Much of the development of formal aids to decision making, such as,, for example,
optimizing models has been directed at the operational and tactical levels of management. At the strategic level,
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decision making is much more dependent on human factors and judgment. Such decision making is based on
guided trial and error and because of uncertainty and ambiguities, all possibilities cannot be explored. This type
of decision making is known as heuristic and is based on rules of thumb rather than explicit decision rules.
Figure below gives examples of decision making at the three levels with typical information requirements.
In practice, decisions should be taken at the level where they are most effective.
Managemen Decision examples Information requirements
t level
Strategic
Mergers and acquisitions, new product
Market and
planning,
economic
capital
forecasts,
investments,
political
financial
and social trends, legislative,
structuring. technological constraints and opportunities
Pricing, capacity planning,
budget preparation,
purchasing contracts. Production scheduling,
maintenance, reordering, credit approval.
Tactical Cost and sales analyses, performance measures,
summaries of operations/production, budget/actual comparisons, etc.
Sales orders, production requirements, performance measures, custom
deliveries, dispatches, etc.
Operational
Peter Drucker says decisions should be made at the lowest possible level which accords with their nature, and as
close to the scene of action as possible. They should always be taken at the level which ensures none of the
activities and objectives affected is forgotten.
There is increasing evidence that many decisions are being taken at lower levels in the hierarchy. Authority to
take decisions is being delegated down the line/ especially in modern service industries. This process is called
empowerment and means that the organization is able to answer queries and take a variety of decisions more
quickly thus providing a better and more flexible service. Empowerment is also one of the reasons why some
middle management jobs are disappearing.
Decision-making involves a number of steps which need to be taken in a logical manner. This is treated as a
rational or scientific 'decision-making process' which is lengthy and time consuming. Such lengthy process
needs to be followed in order to take rational/scientific/result oriented decisions. Decision-making process
prescribes some rules and guidelines as to how a decision should be taken / made. This involves many steps
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logically arranged. It was Peter Drucker who first strongly advocated the scientific method of decision-making
in his world famous book 'The Practice of Management' published in 1955. Drucker recommended the scientific
method of decision-making which, according to him, involves the following six steps:
1. Identifying the Problem: Identification of the real problem before a business enterprise is the first step in the
process of decision-making. It is rightly said that a problem well-defined is a problem half-solved.
Information relevant to the problem should be gathered so that critical analysis of the problem is possible.
This is how the problem can be diagnosed. Clear distinction should be made between the problem and the
symptoms which may cloud the real issue. In brief, the manager should search the 'critical factor' at work. It
is the point at which the choice applies. Similarly, while diagnosing the real problem the manager should
consider causes and find out whether they are controllable or uncontrollable.
2. Analyzing the Problem: After defining the problem, the next step in the decision-making process is to analyze
the problem in depth. This is necessary to classify the problem in order to know who must take the decision
and who must be informed about the decision taken. Here, the following four factors should be kept in mind:
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• Uniqueness of the decision.
3. Collecting Relevant Data: After defining the problem and analyzing its nature, the next step is to obtain
the relevant information/ data about it. There is information flood in the business world due to new
developments in the field of information technology. All available information should be utilized fully for
analysis of the problem. This brings clarity to all aspects of the problem.
4. Developing Alternative Solutions: After the problem has been defined, diagnosed on the basis of
relevant information, the manager has to determine available alternative courses of action that could be used
to solve the problem at hand. Only realistic alternatives should be considered. It is equally important to take
into account time and cost constraints and psychological barriers that will restrict that number of alternatives.
If necessary, group participation techniques may be used while developing alternative solutions as depending
on one solution is undesirable.
5. Selecting the Best Solution: After preparing alternative solutions, the next step in the decision-making
process is to select an alternative that seems to be most rational for solving the problem. The alternative
thus selected must be communicated to those who are likely to be affected by it. Acceptance of the decision
by group members is always desirable and useful for its effective implementation.
6. Converting Decision into Action: After the selection of the best decision, the next step is to convert the
selected decision into an effective action. Without such action, the decision will remain merely a declaration
of good intentions. Here, the manager has to convert 'his decision into 'their decision' through his leadership.
For this, the subordinates should be taken in confidence and they should be convinced about the correctness
of the decision. Thereafter, the manager has to take follow-up steps for the execution of decision taken.
7. Ensuring Feedback: Feedback is the last step in the decision-making process. Here, the manager has to
make built-in arrangements to ensure feedback for continuously testing actual developments against the
expectations. It is like checking the effectiveness of follow-up measures. Feedback is possible in the form of
organized information, reports and personal observations. Feed back is necessary to decide whether the
decision already taken should be continued or be modified in the light of changed conditions.
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CHAPTER 3
MANAGEMENT OF INFORMATION SYSTEM RESOURCES
The term "Information Resources" incorporates three broad categories of "information stuff" essential to the
modern business enterprise: the large mass of stored data (DATA); the huge volume of application system
program code (APPLICATION SOFTWARE); and the numerous networked hardware components, along with
the operating programming that makes it all work (TECHNOLOGY). These three components, working
together, allow the enterprise to produce and use the information required to effectively operate, compete, and
manage on a daily basis. The information resources of most large enterprises represent a significant cost factor,
yet interestingly, most enterprises do not manage these critical and expensive resources like they do all other
resources. All of the "Big Five" resources (human, financial, equipment, material, and facilities) have very
effective management discipline, based on several universal resource management principles:
• Responsibility and authority must be clearly designated to manage the limited resource on behalf of the
enterprise.
• The resource is not free; limitations must be recognized, and managed so there is enough when and
where needed, but waste and unused excess are costly mistakes.
• The resource must be controlled, and allocated so it is available when and where needed, and should
serve the highest priorities first.
• The resource must be constantly tracked: the enterprise must always know how much of the resource it
has, where it is located, what condition it is in, how to access it when needed, etc.
• The resource must be properly stored and maintained so that it is ready and usable when needed.
• The resource must be forecast - the enterprise must think and plan ahead to ensure it will have adequate
supply of the resource when needed.
So, the term "Information Resource Management" simply means changing the way typical IS/IT is implemented
within the enterprise, so that it manages the information resources (DATA, APPLICATION SOFTWARE, and
TECHNOLOGY) like any other enterprise resource - the principles of how to properly and effectively manage it
are exactly the same.
The enterprise must establish effective management control of the data resource, or it will never fully achieve
the payoff: faster, cheaper, better business operations, and significantly greater business flexibility, innovation,
and change. Data Resource Management (DRM) is a critical part of the IRM environment.
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Most enterprises today are critically dependent upon automated information for both daily operation and
management control. Today, information is the most important and highest-leveraged resource the enterprise
controls -- the means by which all other resources are managed. Yet, few businesses have begun to exploit the
enormous strategic potential of a well-integrated information environment. Most enterprises function at a small
fraction of their potential productivity with a set of terribly disintegrated, inconsistent, and often redundant
application systems, operating on an underlying redundant, inconsistent, and untimely data mess. The main
obstacles to exploiting the information resource are internal to the enterprise, and can be easily overcome - it is
truly a common sense proposition.
This informational (not skill-building) seminar targets senior management of the enterprise, and strikingly
contrasts the way we currently manage enterprise resources (human, financial, material, equipment, and
facilities), and the vastly different way we currently (mis)manage information resources of the enterprise. The
seminar also contrasts the IRM environment with the traditional "disintegrated application systems"
environment embraced by most enterprises today, and shows exactly how and why the IRM approach solves the
problems inherent in the "dis-integrated systems" approach. It shows how simple application of well-
recognized, time-proven, routinely-practiced management discipline to this stuff called "information" will
remedy the massive information messes so prominent today. An integrated information environment is a
strategic necessity today, and is not the result of accident nor random motion. The react-mode IS/IT
Organization within the enterprise today must be empowered to carefully plan, model, build/acquire, and
maintain this integrated information environment, not to just react to immediate need of the moment. The need
for the enterprise to change rapidly and affordably and the accelerating rate of change in computer technology
makes IRM not only a proactive, but a defensive necessity in today's economy. Ironically, any business or
government agency today would function significantly faster, cheaper, better, and more flexibly using less than
10% of the stored data that they currently attempt to manage, less than 10% of the existing program code
they've bought/built, and a fraction of the computer technology (hardware and operating software) they
currently manage. Integration means shaking it all down, pressing it together.
One of the dilemmas facing today's manager is that on the one hand they seem to be suffering from information
overload, yet on other hand, they often complain about shortage of information needed to make vital decisions.
Symptoms of overload are a growth of incoming information, including electronic mail, an explosion in the
volume of information sources. Symptoms of scarcity are the lack of vital information for decision making,
unexpected competitor moves and the inability to find the relevant 'needle in the haystack'
There is also the crucial problem of exploiting an organization’s proprietary information as a strategic asset.
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Underlying these problems is that of having "the right information, in the right place, in the right format, at the
right time".
Understanding Data
We've established that an information system is the combining of users, technology and processes to complete
a specific goal. A stakeholder isn't only a user but is someone who has any type of interest in a particular
process. These people utilize hardware and software, typically in a network format, to process raw data into
usable information.
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Data is one piece of a record. Individually, some of your datum might be your first name, middle name, last
name, address, city, state, zip, phone number and occupation. When put together, we see a record.
The components of the system you can physically touch - the system unit (tower, desktop, laptop), internal
devices and peripheral devices (keyboards and monitors) - are called hardware.
Specifics of peripheral devices are provided in many other ways, but think of them as hardware that surrounds
the system unit.
Few organizations have developed a comprehensive IRM strategy. Those that have started with some of its key
processes of information audit, and information mapping cite the following benefits:
• Identifies gaps and duplication of information
• Clarifies roles and responsibilities of owners and users of information
• Provide costs saving in the procurement and handling of information
• Identifies cost/benefits of different information resources
• Actively supports management decision processes with quality information
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information – the cost of a lost opportunity, of a poor product, of a strategic mistake – all risks that can be
reduced by using the appropriate information.
5. Assign Responsibility for Leading your IRM Initiative.
Developing value from information resources is often a responsibility that falls between the cracks of several
departments – the user departments in different business units, and corporate planning, MIS units or
librarians..
6. Develop Clear Policies on Information Resources
Develop policies for ascertaining information needs, acquiring and managing information throughout its life
cycle. Pay particular attention to ownership, information integrity and sharing. Make the policies consistent with
your organizational culture.
4. Conduct an Information Audit (Knowledge Inventory).
Identify current knowledge and information resources (or entities), their users, usage and importance. Identify
sources, cost and value. Classify information and knowledge by its key attributes. Develop knowledge maps.
5. Link to Management Processes.
Make sure that key decision and business process are supported with high leverage information. Assess each
process for its information needs.
6. Systematic scanning.
Systematically scan your business environment. This includes the wider environment - legal and regulatory,
political, social, economic and technological - as well as the inner environment of your industry, markets,
customers and competitors. Provide selective and tailored dissemination of vital signs to key executives. This
goes beyond the daily abstracting service provided by many suppliers.
7. Mix hard/soft, internal/external.
True patterns and insights emerge when internal and external data is juxtaposed, when hard data is evaluated
against qualitative analysis.
7. Optimize your information purchases.
You don't have to control purchasing, but most organizations do not know how much they are really spending
on external information.
8. Introduce mining and refining processes.
Good information management involves 'data mining', 'information refining' and 'knowledge editing'. You can
use technology such as intelligent agents, to help, but ultimately subject matter experts are needed to repackage
relevant material in a user friendly format. One useful technique is content analysis, whose methods has been
developed by Trend Monitor International in their Information Refinery, and is used in the analysis of services.
The classifying, synthesizing and refining of information combines the crafts of the information scientist,
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librarian, and business analyst and market researcher/analyst. Yet many organizations do not integrate these
disciplines.
9. Develop Appropriate Technological Systems
Continual advances in technology increase the opportunities available for competitive advantage through
effective information management. In particular, intranets, groupware and other collaborative technologies
make it possible for more widespread sharing and collaborative use of information. Advances in text retrieval,
document management and a host of other trends in knowledge management technologies have all created new
opportunities for providers and users alike.
10. Exploit technology convergence.
Telecommunications, office systems, publishing, documentation are converging. Exploit this convergence
through open networking, using facilities such as the World Wide Web, not just for external information
dissemination but for sharing information internally.
11. Encourage a Sharing Culture
Information acquires value when turned into intelligence. Market Intelligence Systems (MkIS) are human
expert-centered. Raw information needs interpretation, discussing and analyzing teams of experts, offering
different perspectives.
Information as a resource
Over the past 2 decades information has come to be recognized as another factor of
production. Businesses require information about their competitors, their suppliers,
customers and standard and market trends. Information is a resource on its own, as
well as an asset to other.
It falls within the resource hierarchy which starts with date, which leads to information,
coming together as knowledge and resulting in wisdom.
The final step is the integration of the knowledge into wisdom, which is information
which has been made useful by theory relating the bits of knowledge to each other.
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Its recognized that for specific purposes information may wear out but in general
the more we have, the more we use and the more useful it becomes.
2. Information is compressible
It’s possible to concentrate, integrate and summarize information for easier
handling.
3. Information is substitutable
Information can and does replace hand, labor and capital. It’s the use of computers
and telecommunication that aids in these phenomena.
4. Information is transportable
Information can be tapped into just about anywhere, this has led to the idea of
being remote as much more difficult to achieve since people and information can e
taken to the remotest of places.
5. Information is diffusive
These are the ability to information leek. This leakage allows us to have more and
more of us to have it.
6. Information is shareable
No exchange transaction of information can take place, only sharing transactions
and this leads to an entire sharing environment.
Information Society
Definition;
An information society is a society where the creation, distribution, uses, integration and manipulation of
information is a significant economic, political, and cultural activity. The aim of the information society is to
gain competitive advantage internationally, through using information technology (IT) in a creative and
productive way. The knowledge economy is its economic counterpart, whereby wealth is created through the
economic exploitation of understanding. People who have the means to partake in this form of society are
sometimes called digital citizens. This is one of many dozen labels that have been identified to suggest that
humans are entering a new phase of society.
The markers of this rapid change may be technological, economic, occupational, spatial, cultural, or some
combination of all of these. Information society is seen as the successor to industrial society.
The characteristics of information societies
Information societies have three main characteristics.
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1. Information is used as an economic resource. Organizations make greater use of information to increase
their efficiency, to stimulate innovation and to increase their effectiveness and competitive position, often
through improvements in the quality of the goods and services that they produce. There is also a trend towards
the development of more information- intensive organizations that add greater amounts of value and thus
benefit a country’s overall economy.
2. It is possible to identify greater use of information among the general public. People use information
more intensively in their activities as consumers: to inform their choices between different products, to explore
their entitlements to public services, and to take greater control over their own lives. They also use information
as citizens to exercise their civil rights and responsibilities. In addition, information systems are being
developed that will greatly extend public access to educational and cultural provision.
3. The development of an information sector within the economy. The function of the information sector is
to satisfy the general demand for information facilities and services. A significant part of the sector is concerned
with the technological infrastructure: the networks of telecommunications and computers.
Increasingly, however, the necessity is also being recognized to develop the industry generating the information
that flows around the networks: the information-content providers. In nearly all information societies, this
information sector is growing much faster than the overall economy.
The creation of individual information societies is taking place within a much greater, international process of
change. Partly this is because the developing information systems are global, or at least international, in their
reach: satellite broadcasting systems do not recognize national boundaries; telecommunication networks
provide connections between countries and continents, while the Internet is perhaps the ultimate example of a
global system.
Both developed and developing countries are being transformed into information societies. Most of them are
concerned to use information to improve their relative competitiveness or, at least, to retain their position in an
increasingly competitive global market. The development of information societies represents a series of
attempts to achieve more general economic and social advance.
There is a concern, however, that the shift towards information societies will increase the gap between the
developed and the developing countries. To counter this, the World Bank has recently launched its Information
for Development initiative.
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• It is proving very difficult to define and describe in quantitative terms information societies. We have
seen that it is possible to identify some common characteristics of information societies, but it is not at
all easy to go beyond generalized definitions, such as: an information society is one in which
information is used intensively as an aspect of economic, social, cultural and political life. This presents
a major problem for statisticians who have to collect the data that governments need for economic
management.
• It is more difficult, however, to define and measure the information activity that takes place within
organizations outside the information sector.
• The matter is further complicated by the intangible nature of information. It is a good that does not
easily fit into the economists’ scheme of things. Its value can vary widely, particularly over time, which
makes it very difficult for accountants to value it for company balance sheets. Also, the value of
information, unlike most other goods, does not decrease as it is consumed; indeed, the value may
increase as one piece of information is added to others.
• The globalization of the information sector poses further problems. Someone working in Africa can use
the Internet to obtain information about a firm operating in Europe that has been compiled by an
American-owned information company based in Switzerland using a database that was compiled by
Eurostat, the statistical arm of the European Commission. Who regulates the information? Under which
set of laws is it collected, compiled, delivered and consumed. If the user has to pay for the information,
where does the revenue go? Which governments are entitled to levy a sales tax on the information? To
which set of national accounts should the financial transactions be credited? It is possible to arrive at
answers to most of these questions, but in doing so we raise further questions about the ability of our
economic and statistical systems to cope with the changes that are taking place.
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CHAPTER 4
1. Strategic Planning;
The purpose of this planning is to develop long-term objectives for the entire
organization and for its major business units and more so to specify the general
strategies for acquisition of resources needed to accomplish these objectives.
It includes the following:-
a) The establishment of broad long-term objectives for an enterprise.
b) Accessing the company’s current position relative to these objectives and in
particular considering the threats and opportunities provided by the
environment.
c) Considering alternative strategies for reaching the objectives in the
competitive business environment.
d) Outlining the organizational structure and the total resources needed to
implement the plan.
e) The planning for the implementation process.
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This involves the prioritizing and laying out in detail the acquisition of hardware,
software and telecommunication equipment. This planning is expressed in terms of
the budgets which specify the resources committed to a given plan for a given project
or time period. Budgets can be fixed or flexible, and an organization can use
spreadsheet as the main budgeting tool.
Planning can be TOP-DOWNS whereby the process starts with the senior
management. This may ignore what is going on at the bottom.
It can also be BOTTOM-UP where the junior staffs are encouraged to come up with
their own departmental plans. However this may not align well with the strategic
objectives of the organization.
The role that information systems play in the planning process is to be used in
developing plans such as forecasting and identifying and comparing alternative
causes of action. There is need therefore to make use of financial ratios to justify our
various plans.
FINANCIAL RATIOS:
These are used to justify new systems, explain old systems and to develop quantitative
support for the adoption of various alternatives. The major limitation is to assume that all
the relevant alternatives have been examined and that all cost and benefits are known.
However in quantifying these in monetary terms, there are needed to classify whether
the cost and benefits are tangible or intangible.
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Year Net cash Unlawfu Net cash Commutati Net cash Cumulativ
0 (1500) l (1500) ve (1500) e
1 600 (1500) 400 (1500) 300 (1500)
2 500 (900) 500 (1100) 500 (1200)
3 400 (400) 600 (600) 400 (700)
4 (0) 0 300 (300)
5 300 0
6 300 300
600
Advantages
1. It’s simple to calculate and understand.
2. It uses the project cash flow rather than the accounting profit and hence its more
objectively used.
3. It favors quick return projects which may produce faster growth for the company
and enhance liquidity.
4. Tends to minimize the risks to a company related to time.
Disadvantages
1. It ignores the time value of money.
2. It ignores the cash flows after the payback period.
3. It ignores the profitability of project or system in the long run.
Future 1
P= R +¿ = Future Time
x R
(1+ ) (1+ )
¿ 100 100
= Future x Present value factor (Discount factor)
The value of present value factor are available from financial tables although they can
directly be manipulated from the formula e.g. considering the interest rate of 10% the
values can be determined as illustrated below:-
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1
= 10 t = 1
(
1 +
100 (1+0.1)t
1
=
(1.1)t
Time value
0 1
1
1 1 = 0.909
(1.1)
1 0.909 = 0.826
2 =
(1.1)2
1.1
1 0.826 = 0.751
3 =
(1.1)3
1.1
Consider the following example; an investment is being considered for which the net
cash flow has been estimated as follows (consider the interest rate to be 20%).
Year Net cash Discount factor Present value
0 (9500) 1.000 (9500) NNP > 0 ⟶ Invest
1 3000 0.833 +249.9 NPV = 0 ⟶ Breakeven Points
2 4700 0.694 +3261.8 NPV < 0 ⟶ A broad project
3 4800 0.579 +2779.2
4 3200 0.482 +1542.4
Advantages of N.P.V
1. It takes into account the time value of money
2. One can easily use the spreadsheet to calculate it.
3. It considers the whole project life and calculate the returns at expected times.
Advantages
1. It involves estimates of future returns and is thus subject to error.
2. It doesn’t set possible targets against which evaluations can be made.
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N 1 I 2 −N 2 T
IRR =
1
N 1−N 2
N1 N1 x−I 1
−N 2 = I 2−x
-N2
Average Income
AAR (ROI) = Average Investment x 100%
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YEAR X Y
1 40,000 60,000
2 50,000 40,000
3 30,000 50,000
4 10,000 30,000
5 20,000 20,000
6 30,000 18,000
7 15,000 14,000
8 10,000 8,000
9 5,000 3,000
10 30,000 30,000
40,000
Diving by 10 years 73,000
10 10
Average income = 4,000 7,300
= 100,000 = 100,000
4,000 7300
ARR = x 100% x 100%
100,000 100,000
= 4% = 7.3%
Example 2
Two Projects A and B with the following capital
expenditure Capital expenditure 75,000
75,000
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5 (10,000) 13,000
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12,000 2 2
AAR = 40,000 12,000 x 100
x 100 40,000
= 30% = 30%
Advantages of ROI/AAR
1. Uses available accounting information
2. It’s understood by managers
Disadvantages
1. It deals with accounting profits rather than the cash flow.
2. It doesn’t take into account the time value of money.
3. For different types of deprecation method doesn’t work well e.g. it only works well
in straight-line method because the depreciation is constant.
The next major step in planning process is the assessment of the organization from an information management
perspective.
During these steps the major processes that are necessary to accomplish the mission successfully are needed to
support the process. This can be done by the following:-
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5. Improve relationship between function and technique organization units.
Once the study has been conducted the following would be the benefit:-
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division division division division
Conduct study D
Plan project D M M
Design project M D M
Construct project M D M
Operate project D
Maintain project M M D
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7. Appendices of details architecture including application protocols and data structure.
The business system plan should be reviewed and approved by all functional managers in organization, once
approved the plan is then passed into the next step that is process re-engineering.
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CHAPTER 5
INFORMATION SYSTEM PROJECT MANAGEMENT
Project Management is a set of principles, methods and techniques for effective planning
of objective-oriented work, thereby establishing a sound basis for effective scheduling,
controlling and re-planning in the management of programs and projects.
In other words, it provides an organization with powerful tools that improve the
organization's ability to plan, organize, implement and control its activities and the ways
it uses its people and resources.
A project is a non-repetitive one-of-a-kind activity normally with discrete time, financial
and technical performance goals. Normally a complex effort, usually less than 3 years in
duration and it is made up of interrelated tasks performed by various organizations.
The project management tools and principles provide the means for;
❖ project breakdown into tasks and sub-tasks
❖ finding interdependencies between the tasks
❖ allocating resources, human and material and smoothing resources
❖ estimation for total project duration and budget
❖ monitoring more efficiently project progress
Project management ideas are equally applicable to small as well as very large projects
(with small and large number of tasks). However, the formal tools used are more
appropriate for rather large projects.
There are many tools available to assist with accomplishing the tasks and executing the responsibilities. Some
require a computer with supporting software, while others can be used manually. Project managers should
choose a project management tool that best suits their management style. No one tool addresses all project
management needs. Program Evaluation Review Technique (PERT) and Gantt Charts are two of the most
commonly used project management tools and are described below
PERT is a planning and control tool used for defining and controlling the tasks necessary to complete a project.
PERT charts and Critical Path Method (CPM) charts are often used interchangeably; the only difference is how
task times are computed. Both charts display the total project with all scheduled tasks shown in sequence. The
displayed tasks show which ones are in parallel, those tasks that can be performed at the same time. A graphic
representation called a "Project Network" or "CPM Diagram" is used to portray graphically the
interrelationships of the elements of a project and to show the order in which the activities must be performed.
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1. Identify the specific activities and milestones. The activities are the tasks of the project. The milestones
are the events that mark the beginning and the end of one or more activities.
2. Determine the proper sequence of activities. This step may be combined with #1 above since the activity
sequence is evident for some tasks. Other tasks may require some analysis to determine the exact order
in which they should be performed.
3. Construct a network diagram. Using the activity sequence information, a network diagram can be drawn
showing the sequence of the successive and parallel activities. Arrowed lines represent the activities and
circles or "bubbles" represent milestones.
4. Estimate the time required for each activity. Weeks are a commonly used unit of time for activity
completion, but any consistent unit of time can be used. A distinguishing feature of PERT is it's ability
to deal with uncertainty in activity completion times. For each activity, the model usually includes three
time estimates:
o Optimistic time - the shortest time in which the activity can be completed.
o Most likely time - the completion time having the highest probability.
o Pessimistic time - the longest time that an activity may take.
From this, the expected time for each activity can be calculated using the following weighted average:
This helps to bias time estimates away from the unrealistically short timescales normally assumed.
5. Determine the critical path. The critical path is determined by adding the times for the activities in each
sequence and determining the longest path in the project. The critical path determines the total calendar
time required for the project. The amount of time that a non-critical path activity can be delayed without
delaying the project is referred to as slack time.
If the critical path is not immediately obvious, it may be helpful to determine the following four times
for each activity:
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These times are calculated using the expected time for the relevant activities. The earliest start and finish
times of each activity are determined by working forward through the network and determining the
earliest time at which an activity can start and finish considering its predecessor activities. The latest
start and finish times are the latest times that an activity can start and finish without delaying the project.
LS and LF are found by working backward through the network. The difference in the latest and earliest
finish of each activity is that activity's slack. The critical path then is the path through the network in
which none of the activities have slack.
6. Update the PERT chart as the project progresses. As the project unfolds, the estimated times can be
replaced with actual times. In cases where there are delays, additional resources may be needed to stay
on schedule and the PERT chart may be modified to reflect the new situation. An example of a PERT
chart is provided below:
<="">
Gantt charts
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Gantt charts are used to show calendar time task assignments in days, weeks or months. The tool uses
graphic representations to show start, elapsed, and completion times of each task within a project. Gantt
charts are ideal for tracking progress. The number of days actually required to complete a task that reaches a
milestone can be compared with the planned or estimated number. The actual workdays, from actual start to
actual finish, are plotted below the scheduled days. This information helps target potential timeline slippage
or failure points. These charts serve as a valuable budgeting tool.
Sign of a failing information system project
◆ Lack of User Input
◆ Incomplete Requirements & Specifications
◆ Changing Requirements & Specifications
◆ Lack of Executive Support
◆ Technical Incompetence
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◆ Commitment to requirements and scope once specified
◆ More project management training
◆ Commitment to a stable project management method
◆ Alignment of IT project initiatives to business strategy
◆ Greater understanding of project management on the part of top management, project boards and clients
◆ Greater realism in setting targets. Several respondents railed against imposed rather than planned targets and
deadlines
◆ Establishment of a supportive project/programme office.
Implementation failures and success
Many systems that are implemented normally fail. The problems causing implementation
failure fall into multiple categories.
Design
Cost
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3. Cost– Some systems operate quite smoothly, but their cost to implement and run
on a production basis is way over the budget.
4. Operation – The system may not run well. The information isn’t provided in a
timely and efficient manner due to the result of breakdowns etc. The following
factor provides a measure of a system that is successful.
i. There is high level of system use
ii. User satisfaction with the system – this might include users opinion or
accuracy, timeliness and relevance of information and on the quality of
service and schedule of operations.
iii. Favorable attitude of users about I.S and the systems staffs.
iv. Achieved objectives, the extent to which the system meets is specified goals,
improved organizational performance and decision making resulting from the
use of the system.
v. Financial pay-offs of the organization i.e. by reducing cost or by increasing
sales.
b) Design
1. Users have no responsibility towards the design of inputs, outputs and the
processes. The design is reflecting the bias of the technical staff
2. The system is designed only to serve current needs.
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c) Programming
1. Amount of time and money required for software development is underestimated.
2. Programmes supplied with incomplete specifications.
3. Not enough time is devoted to the development of the program logic.
4. Programs don’t take full advantage of structured design (they do spaghetti
programming).
5. Programs adequately documented.
d) Testing
1. Amount of time and money required for proper testing is underestimated.
2. The project team doesn’t develop an organized test plan
3. Users aren’t sufficiently involved in testing (no-user acceptance testing).
4. The implementation team doesn’t develop appropriate acceptance tests for
managerial review.
e) Conversion
1. Insufficient time and money are budgeted for conversion activity.
2. The system is made operated before its fully ready.
3. Not all stakeholders are involved .e. during training.
4. The system and users documentation is inadequate.
5. There is no performance evaluation and standards hence no framework for
measurement.
6. Insufficient information systems personnel are trained to support the system and
to make maintenance changes.
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CHAPTER 6
Analyzing And Ranking MIS Applications; Based On The Benefits, Cost And Risks Criteria.
Each application should have a business case developed that provides the management
justification for the system. The business case should identify the organizational needs
that the application is meeting or proposes to meet, provide information on the benefits,
costs, and risks of the application and establish proposed project development time
frame and delivery schedule.
The organization should have an audit function that is responsible for verifying and
validating the various analyses including cost/benefit analysis and risk assessment. This
validation should include;-
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1. Accessing all the alternatives that were analyzed and determining whether others
should have been included.
2. Reviewing cost and benefit estimates to ensure that they are accurate and
realistic.
3. Evaluating risks identified and determine whether others may be applicable.
4. Evaluating the sensitivity analysis that was conducted.
The organization should have the management information system that collects all the
applications information. Their mechanism for collecting and maintaining applications
will also be essential during the control and evaluation phase in order to:-
1. Help assess whether projects are still aligned with mission needs and
organizational objectives.
2. Determine whether applications are meeting planned performance goals etc.
Decision should rarely be made based on only one factor such as the project cost. Using
an assortment of decision criteria an organization can compare a number of factors.
The organization may assign weight for each category inorder to help prioritize a
particular application.
An important point for an organization in developing such a scoring model or decision
support tool is to define the scoring elements such as:-
1. Very poor
2. Poor
3. Average
4. Good
5. Excellent
The decision making process should help address difficulties associated with using
different units of measure for analyzing different kinds of applications. No matter how
vigorous or structured the organization’s decision making process is, the decision to take
the particular application lies with the management. If managers select applications that
score low when compared to other projects e.g. high risk, high return profits, the
justification for this should be documented and the applications progress constantly be
monitored.
i.e. Risks
High Low
High
Benefits Continuous Evaluate and Implement
examine
Low
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Avoid Day
to
day
tas
k
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Hard Properties:
Characteristics
1. The problem can easily be defined.
2. The objective and data can be objectively addressed.
3. The problem is self-contained.
4. The information requirements are known.
5. The solution to a problem can be recognized.
6. Standard solution techniques are often available.
Soft Properties:
Characteristics
1. Often difficult to define the problem.
2. This involves taste, values, opinions and judgments.
3. The problem is fuzzy-edged (not clearly defined) i.e. we aren’t so sure of what the
solution will look like.
4. Its people oriented.
5. It requires soft system methodology approach (SSM).
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SSM involves a process of enquiring which eventually leads to an action. It has seven
steps.
1. The problem or situation must first be entered into.
2. The prevalent culture and power relations are used to express the problematic
expression.
3. This findings are represented in a set of predefined solutions i.e. systems that are
thought to be relevant to the particular problem.
4. Conceptual models are built where the verbal concepts previously defined are
logically structured.
5. The model and redelity are compared.
6. Possible changes to the real world are considered. One of the framework that is
used in SSM is the CATWOE definition which attempts to give root definitions of the
problem.
7. It deals with who is doing what, for whom they are answerable, what assumptions
are made and in what environment this is happening.
C – Customer – The who or people who benefit or suffer from the
system. A – Action – Who carries out the transformation process
T – Transformation – What is the conversion of input into output.
W – Welt a schaning – Assumption behind the root definition.
O – Owner – Who can stop the transformation.
E – Environment – What are to fixed elements outside the organization or
1. SDLC: This is a methodology for developing an information system that partitions the
system development process into formal stages that must be completed sequentially
with a very formal division of labor between the user and the specialists.
The characteristics of this method are;
i. The development is in stage.
ii. Its advantages for large organizational systems e.g. T.P.S.
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2. Prototyping: This is the provision of a model that is given to the users for them to
clarify their requirements and gain a measure of confidence in the general approach.
In some cases the prototype is upgraded through several iterations, thoroughly
undergoing testing and documentation. In some cases the prototype may be thrown
away once the user requirements have been captured.
Characteristics
1. Development by gradually modifying an initial prototype based on feedback
from the users.
2. It’s a relatively fast development with early availability of the first model of the
system (the first version).
3. Its advantageous when user requirements are uncertain.
4. It works well for project that are limited in size and for systems that are being
computerized for the first time. Typical application of this is the development of
DSS.
5. Unless precautions are taken it may evolve into a quick and dirty system
hampering maintenance.
Characteristics
i. It leads to increased user satisfaction and involvement.
ii. It reduces applications back-log (this is the queue of systems awaiting
implementation)
iii. It requires tools such as the fourth generation languages which are user
friendly.
iv. It leads to improve requirements determination.
v. It requires the involvement of information centers /helpdesk /hotlines.
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4. Off-the-shelf package
This is actually the purchase of a license to use the package. At times these packages
may have to be tuned to fit the needs of the user company. When purchasing an off-
the-shelf package, requests for proposals are sent to potential suppliers. This
document outlines the requirements of the organization and asks questions as to how
the vendor systems may satisfy them.
The selection is based on the characteristics of the software package and the
requirements that the user organization wants.
Characteristics
i. They are more reliable and have better documentation than internally produced
systems.
ii. They often need to adjust work within the organization to fit the needs of the
package.
iii. It may cost the company to forego competitive advantages, if this was done
internally.
iv. It satisfies most user requirements due to the fact that it has been developed
by experts.
v. Due to its mass production its relatively cheaper to buyer and that the
implementation is quick.
5. Outsourcing
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This is the hiring of external firms known as the software houses or system
integrators to develop and install systems that can easily be executed. They also
perform other services i.e. developing strategic plans to carryout organizational
functions. In the rather case we refer to this as facility management.
Outsourcing is necessary and appropriate in the following circumstances:-
1. When you want to reduce development cost.
2. Relief the firm from the burden of developing the system.
3. When the firms existing information systems capabilities are limited, ineffective or
technical inferior.
4. When the company needs to off-load some of pending workloads from the I.S.
department.
Problems of outsourcing
1. The firm may lose control over the I.S function i.e. No control over the type of
software or hardware being used.
2. There is total vendor dependency i.e. the firm may have to pay whatever the
vendor charges and accept whatever he does.
3. If the firm lacks expertise to negotiate a sound contractor, this dependency may
eventually lead to loose of control over the technical direction.
4. Trade secrets may leak to outsiders and the company may lose competitive
advantage.
Developers Management
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END-USERS:- It’s the function of the end-user to prepare their information requirement
and to ascertain the working environment of the system developed by making sure that
the system interfaces are proper.
M.I.S DEVELOPERS: - Their function is to implement system that satisfy user requirement
as well as the objectives of the management by establishing that they have adequate
resources, develop a quality system and meet the development constraints.
MANAGEMENT: - It’s the function of the management to control and allocate resources
that go in the development of the system and to approve the various stages in the
process.
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(CHAPTER 7)
ROLE OF INFORMATION SYSTEMS (IS) IN ORGANIZATION
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Application Of IS and Competitive Advantage in An Organization
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This model highlights the primary and support activities that add a margil of value to
products or services where information systems can be best applied to achieve
competitive advantage.
Primary activities would include:-
• Inbound logistics
• Operations
• Outbound logistics
• Sales and marketing
• Servicing
Support activities make to delivery of the primary activities of a firm possible e.g. the
organization infrastructure, human resource management, technology and procurement.
Competitive advantages when a company provides more value to a customer or when
they provide the same value at a lower cost. These can be achieved in the following way.
(i) A business can save money in the primary activities by having suppliers stick
to fight delivery schedules.
(ii) A company can make use of technologies such as CAD/CAM thus reducing the
cost of producing better goods in a manufacturing firm.
(iii) By having electronic scheduling and massaging systems or making use of
office automation technology to improve the company image.
(iv) By making use of information system in sales and marketing a company can
explore the capabilities existing on the internet.
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Firms can use 1.5 to differentiate their products and create brand loyalty by developing a
new and unique product or service that isn’t easily duplicated by the competitors. To
following products and services were created or the basis of information system.
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Bargaining
power of
supplier
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Threats of new Rivalry between
substitute
entrants to the traditional products or
MIS
market competitors
services
Bargaining
power of
customer
This is the model used to describe the interaction of the external influences, especially
threat sand opportunities that affect an organization strategy and the ability to compete.
Competitive advantage can be achieved by enhancing the firm’s ability to deal with
customers, supplier’s e.t.c. By working with other firms the organization can use I.T. to
develop and industry wide standard for exchanging information electronically which
forces all market participants to similar standards.
Network Economics
This is a model based on the concept of a network where adding another participants
entails a zero marginal cost but can create much longer marginal gain e.g. the larger the
number of subscribes to the interest the greater the value. Internet sites can be sued by
firms to build communities of users e.g. Microsoft Corporation uses I.T. to build a
community of software developers e.g. MSDN (Microsoft Developers Network) who help
in debugging, providing new application ideas and supplying customer with tips of the
new application.
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CHAPTER 8
INFORMATION SYSTEMS MAINTENANCE
Meaning and importance of information system maintenance
Systems maintenance involves cleaning, changing and enhancing the systems to make it
more useful in achieving users and organizational goals.
Maintenance is the process of modifying an information system to continually satisfy organizational and user
requirements. There is a vast difference between hardware and software maintenance in costs as well as in
objectives. This means changing the application to adapt to a new hardware or software environment.
In some cases an organization will encounter major problems that will involve re-
designing the entire system development process.
Importance of IS maintenance
Whether the computer is new or old problems can pop up at any time. By using regular IT servicing one can get
the jump on problems and make arrangements so that the business isn’t impacted. Using regular IT servicing
one can also help reduce IT support costs by fixing during scheduled maintenance windows where other work is
scheduled.
Viruses and malware are a pain to any business, virus writers actively seek to disrupt the business and access
files the network. When the computer is infected a number of symptoms may be felt, from annoying slowdowns
to popup messages or contacts emails about strange email you apparently sent them. If your IT system is
compromised the business could be used as a launching pad to infect other businesses, which can have
consequences as companies start black listing your email address.
If antivirus software is kept up to date then it greatly reduces the chance of a virus infection as commonly
known IT loopholes are closed to hackers and virus writers.
Over time, files that are stored on the computer can become disorganized and fragmented, this results in slow
loading times and delayed access to programs and files. By regularly running speed checks and smart
optimization, we can speed up the computers loading times and take care of those annoying pauses when one is
busy and need quick and efficient access to the files and software.
Antivirus software is vital and every PC should be protected but having antivirus software installed isn’t the end
of your IT security – it needs to be up-to-date and working as intended .
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Computers age and over time they start to slow down – software packages that performed quickly and
efficiently to begin with, can become sluggish and have a negative impact on productivity. Because this
slowdown has occurred over many years, the computer user may have grown used to the issue and may think
that it is normal. It's not normal. Regular checks should be done to ensure that the software is running to its
maximum efficiency – often the answer is just a slight hardware modification or a quick clean out of programs
that are no longer needed.
When it comes to making necessary changes, most companies modify their existing
programs instead of developing new ones. i.e. if new system needs are identified, then
the old programs are repeatedly modified to meet the even changing needs.
Over a period of time these modifications tend to interfere with the system overall
structure, reducing its efficiency and making it more difficult to modify future cases.
Types of maintenance
a) Adaptive maintenance refers to the changes made to a system to evolve its functionality to
changing business needs or technologies.
b) Corrective maintenance refers to changes made to a system to repair flaws in its design, coding, or
implementation.
c) Perfective maintenance refers to changes made to a system to add new features or to improve performance.
d) Preventive maintenance refers to changes made to a system to avoid possible future problems.
e) Predictive Maintenance: It pursues constantly know and report the status and operational capacity of the
installations by knowing the values of certain variables, which represent such state and operational ability.
To apply this maintenance, it is necessary to identify physical variables (temperature, vibration, power
consumption, etc.). Which variation is indicative of problems that may be appearing on the equipment. This
maintenance it is the most technical, since it requires advanced technical resources, and at times of strong
mathematical, physical and / or technical knowledge.
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f) Zero Hours Maintenance (Overhaul): The set of tasks whose goal is to review the equipment at scheduled
intervals before appearing any failure, either when the reliability of the equipment has decreased
considerably so it is risky to make forecasts of production capacity . This review is based on leaving the
equipment to zero hours of operation, that is, as if the equipment were new. These reviews will replace or
repair all items subject to wear. The aim is to ensure, with high probability, a good working time fixed in
advance.
g) Periodic maintenance (Time Based Maintenance TBM): the basic maintenance of equipment made by
the users of it. It consists of a series of elementary tasks (data collections, visual inspections, cleaning,
lubrication, retightening screws,…) for which no extensive training is necessary, but perhaps only a brief
training. This type of maintenance is the based on TPM (Total Productive Maintenance).
This is due to the malfunction or “bug” in the system where maintenance is urgent and usually calls for
immediate attention.
The malfunction is because it has not been tested completely, even though the system must have run perfectly
for months or even years. The information system user usually identifies the malfunction. Then a team of
analysts and programmers should rectify it if the malfunction is in computer program and caused by a system
input.
2. Routine Maintenance:
Routine Maintenance is required to keep systems performance in order as it reflects the organization
environment. The activities may be rewriting manual procedures, conducting training sessions, altering report
formats and contents and forming new processing logic for computer programs.
These are periodic requests for tactical and strategic management information, which does not come under
routine production. These special requests can be satisfied directly by a user with a database management
system and the analyst assists in preparing the necessary procedures for the request, e.g. A special report on
selected products during a sales promotion or a special analysis of a particular vendor’s delivery performance.
The system always undergoes continued modification due to various reasons. The application systems need
changes and sometimes it takes away half or more of an organization’s allocated resources and time. Thus,
many organizations have adopted the principle of setting a budget for maintenance and perform only the highest
priority maintenance work.
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The personnel working in the information system do not wish to spend most of their time maintaining or trying
to patch up systems designed and implemented years ago. In some organizations, the programmers are rotated
once in a year.
By this the programmers will have new assignments, the experience base of the personnel is broadened, better
ideas are being proposed and evaluation of the personnel and the performance of two or more persons and the
several project leaders can be compared.
Maintenance programming causes more failure than the developing programming. If the maintenance
programmer is not familiar with the program, the management should assign complex maintenance problems to
the most knowledgeable people to avoid failure.
If the documentation is poor and changes will result in serious failure and to overcome this, the management is
responsible to ensure that all programs are properly documented.
Extra training cost will go up maintaining for older applications that use outdated programming languages that
run under primitive operating systems. The situations like facing inadequate documentation, a variety of
incompatible hardware/software configurations, outdated equipment and procedures will give rise to
manageable conditions with severe problems of maintenance that continue indefinitely.
Maintenance Costs
Several factors influence maintenance costs. Three of these are very important:
▪ defects,
▪ customers, and
▪ Documentation quality.
The number of latent defects refers to the number of unknown errors existing in the system after it is installed.
Because corrective maintenance accounts for most maintenance activity, the number of latent defects in a
system influences most of the costs associated with maintaining a system. If there are no errors in the system
after it is installed, then maintenance costs will be relatively low. If there are a large number of defects in the
system when it is installed, maintenance costs will likely be high.
A second factor influencing maintenance costs is the number of customers for a given system. In general, the
greater the number of customers, the greater the maintenance costs.
A third major contributing factor to maintenance costs is the quality of system documentation. Without quality
documentation, maintenance efforts can increase exponentially.
Techniques of maintaining an information system
Software companies and many other organizations use the following 4 categories to
signify the amount of change. These would include;-
1. Slip steam maintenance
2. Patch
3. New release
4. A version
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A Slip Stream
This is a minor upgrade – Typically a code adjustment or a minor bug fix, not worthy
announcement. It usually requires recompiling of the code and in so doing it may create
entire new bugs. These practice accounts for the various variations that we notice on a
software that is running or similar machine.
A Patch
This is a minor change to correct a problem. It’s usually an addition to an existing
program i.e. the programming code representing the system enhancement fix is
usually patched into or added to the existing system code e.g. Microsoft releases
patches which they call service packs to correct the bugs that were in the internet
explorer and Windows 95.
In correcting the problem this opened a way for hackers and unscrupulous website
operators to read the contents of the files of the users.
A New Release
Is a significant program change that often requires changes in the documentation of the
software?
A new version
Is a major program change that brings many new features?
Depending on the organization policies, the people who perform system maintenance
vary. In some cases the team that designs and builds the system also performs
maintenance. This gives the designers and programmers incentives to build systems
right from the onset. If there are problems, the designer and programmer will have to fix
them. In other cases organizations have a spate maintenance team.
The team is responsible for modifying, fixing and updating existing hardware.
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High
Annual cost of maintenance
Low
In most cases, the worth the extra time and expense to design a good system. The need
for a good design goes beyond the cost. There is a real risk in ignoring small system
problems when they arise as these small problems become large in future.
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Hardware maintenance
This is relatively straight forward and may include;
a) Formulating a service contract with the vendor.
b) Insisting on warranty during the procurement of equipment’s and enforcing the
warranty if the equipment fails.
c) Creating a technical section within the I.T. department with the responsibility of
maintaining all the equipment. This would depend on factors such as availability of
staff, convenience, cost and complexity of the system e.t.c.
Database maintenance
It’s carried out by a database administrator whose functions generally include;-
1. Participating in the physical database design.
2. The operation and maintenance of the DBMS.
3. Monitoring the performance of DBMS
4. Monitoring the security aspect of the database.
5. Liaising with the users and development team.
6. Providing assistance to users in utilizing effectively the database potential.
7. Acting as the custodian of the data dictionary.
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CHAPTER 9
ROLE OF ICT IN ORGANIZATIONAL CHANGE
Organization Change
Organizations in both the public and private sectors are faced with an apparently ever-increasing rate of change
and must learn to cope with this problem. Change occurs in many ways: competitive pressures (e.g. a
competitor introduces a new model or reduces prices), legislative changes (e.g. the introduction of the National
Curriculum in UK schools), the operating environment (e.g. the challenge of online share dealing to traditional
stock brokers), changing client/consumer preferences (e.g. the desire for more leisure or more environmentally
friendly products), the introduction of new technology (e.g. computer networks, third generation telephones)
and many more. In addition to dealing with the change itself, management must cope with the resistance to
change often encountered from staff, clients, customers or trade unions.
Not all pressures for change come from outside the organization. Successful managers seek to anticipate market
or environmental movements by initiating change within the organization and thus adopt a pro-active rather
than a reactive approach. One means of making radical changes in organizations is by adopting what is called
Business Process Re-engineering (BPR). BPR moves away from the conventional emphasis on tasks and
structures in order to focus on business processes. In effect, BPR is a systematic method of lateral thinking
which forces people to think beyond normal boundaries and structures. BPR is dealt with in detail in the next
chapter.
Organizations do not automatically adjust to change. Adaptation only occurs as a result of management actions.
These may cause changes in the way the organization takes decisions, in the processes used, in the services or
products, or in the structure of the organization itself. Only one thing is certain: the organization that clings to
rigid, traditional methods in the midst of rapid change will be an unsuccessful organization.
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• Top management must support innovation in a personal way and must think interactively.
• The organization must be made 'flatter', i.e. unnecessary layers of hierarchy should be removed and staff
'empowered' by authority being pushed downwards.
• Communication should be improved, especially across the organization, and staff mobility encouraged.
• Achievements should be highlighted and a culture of pride cultivated.
• Company plans should be made known earlier and more widely to enable staff to make suggestions and
contribute before decisions are made.
• An alternative way of considering the problem of resistance to change is the force field framework first
suggested by Lewin and developed by other workers such as laslen and Platts.
• Lewin suggested that change, or the lack of it, is caused by the interaction of two sets of opposing
forces. One set is termed the driving forces i.e. the forces attempting to bring about change, the other set
being termed restraining forces which act in the opposite direction and seek to maintain the status quo.
According to this framework, any attempt to bring about change requires conscious attempts to overcome
resistance to change otherwise change will not occur because the forces resisting it will be too strong.
(a) Rationalization
Hammer and Champy describe processes as: 'A collection of activities that takes one or more kinds of input and
creates an output, that is of value to the customer/ typical processes include manufacturing, ordering, delivery
and invoicing. It will be seen that this way of looking at work is directly comparable to the systems approach.
Processes have 2 important characteristics i.e.
1. They have customer (internal or external)
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2. They cross organizational boundaries i.e. they occur across or between organizational sub-units.
One technique for identifying business processes is an organization is the value chain
proposed by porter. Processes are generally identified in terms of the beginning and end
points, interfaces and organizational units involved. Examples of process include
developing a new product, ordering goods form a supplier, creating a market plan and
processing and paying an insurance claim etc.
BPR has been, and is being, used by a number of organizations, e.g. the UK Treasury, Lloyds Bank, Ford Motor
Company and the New York Police Department, and many successes have been claimed for the approach. For
example, the New York Police Department claims that the substantial drop in crime in the 1990s was partly due
to the streamlining of the organization and the different approach to work which resulted from the use of BPR.
BPR seeks to rethink the process from scratch without regard to existing methods, structures and departments. It
is claimed that the re-engineering approach leads to numerous changes in the way work is done, how employees
behave and in the structures of the organization itself. Typical of these changes are:
• Individual jobs and tasks get combined with related jobs and tasks
• Jobs tend to become more multidimensional and comprise a range of tasks
• There is more emphasis on process teams rather than traditional functional departments.
• Empowerment of workers increases. More decisions are made by process teams, there is more flexibility
and less reliance on formal rules, there are fewer checks and controls.
• Work is performed where it is most sensible and efficient, i.e. normal boundaries and demarcations do
not apply.
• There needs to be more emphasis on education and understanding why the job is done rather than
merely basic training which concentrates mainly on how the job is done
• Organizational structures become flatter and less hierarchical.
• There are likely to be major differences in culture and attitudes, e.g. customers become much more
important, advancement will be based on ability, the focus for payment and performance will be based
on results measured in terms of value to the customer.
• Challenging traditional methods, structures, and ideas becomes a normal part of work.
Naturally enough, some of the more extravagant claims made for BPR have been challenged by other writers.
Coulson-Thomas, for example, thinks that much of what is termed BPR is only process simplification within
existing frameworks and is a cover for cost reduction and downsizing (i.e. reduction in staffing levels).
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The staffs that remain after BPR are pressurized and have to work much harder, other writers, such as Talwar,
think that much of BPR goes beyond the scope of work design and is more applicable to strategic management
and organizational change.
How Does BPR differ from TQM
Tengetal in 1994 stated that in the recent years increased attention to business
processes is largely due to the Total Quality Management.
Davenport observed that quality, specializes tend to focus on incremental change and
gradual improvement of processes, while proponent of re-engineering often seek radical
redesign and drastic improvement of processes.
TQM is a continuous process that refers to programs and initiatives that emphasis the
incremental improvement in work processes and outputs over an open ended period of
time. In contrast, re-engineering also known as business process re-design on process
innovation refers to the discrete initiatives that one intended to achieve radically
redesigned and improved work processes in a bounded time frame.
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technology. He
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Daverport and Short (1990) argues that BPR requires taking a broader of view of both I.T
and business activities and of the relationship between them.
I.T should be viewed as more than an automating or mechanizing force to fundamentally
reshape the way business is done. I.T capabilities should therefore support business
processes and the business processes should be in terms of the capabilities I.T can
provide. It’s this that is referred to as the Broader, responsive view of I.T and BPR as the
new industrial reengineering.
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BPR Methodology:
The following is a five step approach to BPR:
1. Develop the business vision and process objectives.
2. Identify the processes to be re-designed.
3. Understand and measure the existing processes.
4. Identify the I.T. enabler.
5. Design and build a prototype of the new process.
(c) AUTOMATION
FUNCTION DESCRIPTION
1. To communicate and This involves sending of E-mails
collaborate messages, transmission of documents
and the participation of electronic
conferences.
2. Access information The searching for documents and
databases and the reaching of electronic
brochures, manuals, book and adverts
and the access of library catalogues
3. Participate in One can joint interactive discussion
discussions groups and transmits voices
electronically.
4. Supply information This involves the transfer of computer
files, computer program, graphics,
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An intranet is an internal network based on the internet W.W.W standards. The principle
difference between the web and the intranet is that whereas the web is open to
everyone, the intranet is private and protected from the public using firewalls.
An extranet is a private intranet that is accessible to selected outsiders. Its used to link
organizations with customers, business partners and providers information or product
availability, pricing, shipment data and E.D.I ad E.F.T.
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Reebok International Customer services and support can be done online e.g. The Del
Computers use a Del newsgroup on the net to handle customers complains.
CASE STUDY:
• The internet has transformed the way many organizations work. This is
particular so with regard to business. The internet has been able to save
businesses money and also non-profit making bodies like charities.
• For large corporations the internet offers the chance to cut overheads by moving
various co-functions online such as recruitment, press relations, share-holders
information, educational resources and technical support online. At the other end
of the scale virtual organization can eliminate the used for expensive office space
and reduce the reliance on paper work.
• Service companies such as accountants and legal firms are creating virtual offices
with customers and staffs linked by the internet. For all organization online
procurement is possibly a way to save all large amount of money.
• Microsoft says its internet based procurement system saver its almost $3,000,000
a year handling over 250,000 transactions. It uses this online volume to negotiate
favorable process with suppliers of office equipment, books, computer and catering
services.
• The online system cuts administrative costs from $60 to $5 an order.
• Another US company Chryster i.e. a car maker and says that it saver 1.3M dollars a
year by not having to key in invoices previously send in by suppliers not using the
EDI but who now use the internet. The company is also getting components from
supplier’s up to 11 days faster than before. The reduction is cycle time reduces the
cost per transaction from 28 dollars to 7 dollars.
• One form of extranet is the courier tracking system operated by the federal
express (Fedex). Supermarket claim call Sainsbury is creating an extranet so flat
supplier can contact key personnel online, access information about stock, price
changes and sales forecast. And also find out how their products are selling.
• Many manufacturers like Xerox and BMW provide extensive produce details that
generate sales leads and offline sales via distributors. The internet is now the main
head generator for Toyota. Its website has overtaken Toyota’s 800 toll free
numbers in the U.S as its best source of lead.
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4. Internet based transactions aren’t recognized by law i.e. There is no legal backing.
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Henry Fayol and other writers classified the functions of a manager as follows:-
2. Planning
3. Organizing
4. Co-coordinating
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5. Decision making
6. Controlling
7. Leading
8. Communicating
9. Motivating
10. Staffing
1. Planning
This is a future based activity. It involves making decisions about organizational aims
or objectives. How the plan is to be carried out, with what kind of resources, what
policies are to be used and finally the methods of measuring the results.
It must be carried out against a background of external environment and the
organizational resources. I may be termed as a long, medium or short term.
2. Controlling
A method of measuring the systems progress against a previously set standard and
correcting any deviations that occur during the time span of the system. It requires
that a measurable standard is set at the stat of system and a means of measuring
progress against the standard is set up that would be operating during the time
span of the system.
It’s also a means whereby corrective action can be taken as appropriate.
3. Organizing
This may involve structuring an organization into sections, departments and divisions
and allocating tasks to each of them and delegating authority and responsibility. It’s
the coordination of human and material resources to carry out the work.
Organizing requires appropriate communicating channels to be set up.
4. Leading
This is the ability of a manager to influence human resources to follow instruction or
to do a job. A manager must understand the task, the term and the individual to be
an effective leader. The tasks and functions include; the planning of the tasks,
allocation of responsibility and setting standards of performance.
Team functions are directed, towards team building, motivation of the team
members, communication and discipline.
Individual maintenance functions are directed towards training, counseling,
motivation and development.
5. Communication
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6. Motivation
Influence on the human resource to strive willingness inorder to achieve the
organization’s objectives. Motivation can be materials wise or via intangible elements
such as recognition or a flexible working environment.
7. Staffing
This is the selection, training and appraisal of the human resources to work for an
organization. The management must know how to develop the staff.
8. Decision Making
This is selection of the best course of action among the several alternatives available.
Managerial Roles
These are the expectations of the activities that managers should perform in an
organization. They can be classified as follows:-
1. Interpersonal roles
Managers acts as figure heads for the organization when they represent their
company to the outside world and perform symbolic duties such as giving out
employees awards. They also act as leaders attempting to motivate or to council
and support subordinate.
The manager also acts as liaison between various levels of the organization
2. Information roles
Managers acts as the nerve centers of the organization receiving the most
concrete and up-to-date information and distributing it. As dissemination and
spokesman of the organization they are supposed by management information
systems, mail and office system.
3. Decisional roles
Managers acts as the entrepreneurs by initiating view activities. They handle
disturbances in the organization. They allocate resources and negotiate conflicts
and mediate between conflicting groups in the organization. There is no single
theory of management that is anniversary accepted, common theories include:-
i) The universal approach
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It states that the administration of all the organization require the same
rational approach. It assumes there is a core management process that
remains the same across the organization.
It emphasis on the division of labor, chain of command and authority.
v) Contingency Approach
Emphasis or the choice of an alternative cause of action depending on the
situation at hand. Management should be flexible and streamlined to adopt
quickly to the change.
NB: A manager can use any of the above approaches.
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CHAPTER 10
Ethics refers to the principles of rights and wrong that can be used by individuals acting
as free moral agents to make choices to guide their behavior. Information systems raise
new ethical questions for both individuals and society because they create opportunities
for intense social change and they threaten existing distribution of power, money, rights
and obligations. These issues have 5 dimensions.
1. Information rights and obligations – what rights do individuals and organization
posses with respect to information about themselves?
What can they protect?
What obligation do individuals and organization have a conceiving this
information?
2. Property rights – How will traditional property rights be protected in a digital
society in which trading and accounting for ownership is difficult and ignoring
such property rights is it so easy.
3. Accountability and control – who will be held responsible, accountable and reliable
for the harm done to individuals and their property rights.
4. System quality – what standards of data and system quality should we demand to
protect the individual rights and the safety of the society.
5. Quality of life – what values should be preserved in information and knowledge
based society?
What institution should we protect from violation?
What actual values and practices are supported by the new technology?
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banking records and police records. If properly mine this can reveal credit
information, living habits, tastes, association and political interests.
4. Advances in networking – this greatly reduces the cost of moving and accessing
large quantities of data and open the possibility of mining large pools of data
remotely using small desktop machines permitting and invasion of privacy.
The global digital superhighway communication network posse’s social and ethical
concerns such as:-
i) Who will account for the flow of information over the networks?
ii) Will you be able to trace information collected about you?
iii) What will these networks do to the traditional relationships, families, work
and leisure?
Ethical Principles:-
1) The golden rule – do unto other as you would have them do unto you.
2) Kant’s categorical imperative – if an action is not right for everyone to take then it’s
not right for anyone to take.
3) Descarte’s rule of change – if an action can’t be taken repeatedly, then it’s not right
to be taken at any time.
4) Utilization principle – take the action that achieves the higher or greater value.
5) Risks aversion principle – take the action that products the lease lewd on the least
potential cost.
6) No free lunch – virtually all tangible and intangible objects are owned by someone
unless there is a specific declaration otherwise.
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It has assumed responsibilities for education and training for public awareness and for
standards of quality and professionalism.
Its role is to set the professional standards of competence conduct and ethical practice in
the U.K. It’s an authoritative voice to the society government and industry or all aspects
of IS.
It influences legislation on data registration, safety, copyright and product liability. The
society has 3 degrees of members i.e associate, members and fellow.
Members at the 3 levels are accepted according to their qualification.
4. Mails messages – many firms claim the right to open mail because they own the
facility. They are intended for the business only and create this facility for a
business purpose.
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High
Factory Strategic
Low
Support
Turnaround
Any of the organization in existence has to fall in any of the above four quadrants.
1. Strategic quadrant – information systems planning is critical to the current and
future performance of the firm. I.S planning must be closely linked to corporate
planning.
2. Turn-round is – information systems planning is very importance to the future
performance of the firm, without I.S planning, performance will suffer significantly
in the long-run I.S planning must be closely linked to corporate planning.
3. Factory – I.S planning is needed for the information systems activity to be
coordinated and to run smoothly. It’s important to the current company
performance, but it’s not expressed to be a critical factor in the future.
4. Support – I.S planning is still needed for the I.S activity to be coordinated and to
run smoothly. It’s not critical to the current company performance and is very
unlikely to be of strategic importance in the future.
Example:
1. Support – this could be an organization that has developed a system to automate
some of the clerical procedures and it has no intention of investing in I.T in the
near future.
2. Factory – this could be an organization that has developed a network which is quite
useful in day-to-day running of company activities and has no intention further in
I.T.
3. Turnaround – are organizations that one currently not using I.T. for nay strategic
use but there future survival will involve I.T. a lot, such as a university that is
contemplating of having a virtual university i.e. African Virtual University (A.V.U).
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4. Strategic – e.g a Bank that has invested in ATMs and any future survival in
competing effectively is alighted to I.T. e.g. loan portfolio management.
Maslow qualified human wants into a hierarchy of needs. Each lower want or need must
be stratified before a worker will seek rewards at the next higher level. Consider the
levels starting with the most basic:-
1. Physiological needs – food, clothing and shelter. For the worker this means money.
Many workers are willing to work at relatively tedious jobs or at higher production
rates given sufficient monetary incentives.
2. Safety or security needs – for the worker this means overall job security. Also at
the work site, improving the safety environment will improve the working climate.
3. Social needs – worker seek “belonging” interms of work, this could mean having
friendly co-workers, comfortable interaction with management and being able to
participate in company’s committees.
4. Self –esteem – workers strive for competence, desire some respect and seek to
satisfy their egos. This could be provided by making the work more challenging,
adding more responsibility and providing greater variety.
5. Self-fulfillment – when all other needs are fulfilled people become satisfied with
life.
Computer crime
Identify the threats Some of the threats are due to human error, computer abuse,
natural and political disaster, hardware and software failure
Establish is control Ensure security, privacy and confidentiality via general and
application controls.
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Classes of threats
1. Human error – involves wrong input data, errors in program development or
maintenance and operator errors e.g. mislabeling the tapes.
2. Natural and political disasters – includes earthquakes, typhoons, tornados and
hurricanes.
3. Failure to hardware and software – e.g. network and power failures and software
maintenance.
4. Computer abuse and crime – using a computer to steal, sabotaging the system and
authorized access to a modification of data (hacking). Computer crime is any
illegal act in which a computer is used as a primary e.g. impersonification i.e.
giving access to a system by identifying oneself as one person and therefore
enjoys privileges of the legitimate user.
TROJAN HORSE method i.e. conspiring within an authorized programme are routine of
actions causing unauthorized actions.
LOGIC BOMB i.e. programme who placed a logic bomb in his companies personnel
system such that should his name be upset from the personal file the entire file is
erased.
• Computer viruses introduced deliberately.
• Data diddling i.e. changing of data during or before input often to change the
contents of the database.
• Salami technique – this is diverting small amounts from large number of accounts
maintained by a system.
• Super-zapping – using a system program that can by pass regular system controls
to perform unauthorized act e.g. the IBM super-zap utility.
Super-zaps are provided to handle emergencies in systems such as restoring
systems operations after a multifunction that can’t be handled with a regular
recovery method.
• Scavenging – its unauthorized access to information by searching via the residue
after the job has been run on the computer e.g. searching the waste paper basket
for printouts etc.
• Wire tapping or carves-dropping
• Spoofing – collecting of confidential information from unsuspecting visitors to
the website they visit.
Having defined controls as a set of policies, procedures and technological
measures that are put together an error or an attack of commuter systems from
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taking place detect the violation and correct the exceptional situation. These
controls can be categorized into general or application controls.
General controls:
1. Administrative – include separation of duties, constant supervision of staff,
thorough screening of new employees, published procedures and standards. These
can also include disaster recovery planning or contingency planning.
2. System development and maintenance control – systems should be secure and
auditable. Documentation should be maintained and should specify changes
made to the system.
3. Operational controls – involve controlling access to system, maintenance of
computer equipment and storage and the day to day running of the company
activities.
4. Physical protection of data centres – e.g. installation of air conditioning
equipments, fire extinguishers and UPS (uninterruptable power supply).
5. Controlling access to computer system and information e.g. identification,
authentification and encryption. This may use the user’s knowledge e.g. the name,
account number or password i.e. a smart card with a microprocessor or a biometric
control. This is the using of bodily features such as fingerprints, hand geometry
(chiromancy) , retrieval scanning and the signature.
6. Control as a last result e.g. adequate insurance for the residual risk or a disaster
recovery plan.
Application controls
Implemented specifically for a particular information system e.g. a payroll system,
account payable or order processing system. They include;
1. Input control – this is to ensure accuracy, completeness and validation of input.
2. Processing control – e.g. cross-checking two computation which can also include
reasonable checks and rounding off.
3. Database controls – these include backups, recovery, file handling and
authorization.
4. Communication controls – including encrypting and the use of digital signatures
which should also be encrypted.
5. Output controls .e.g. scheduling, handling and distribution.
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corporate financial statements and by internal auditors who work for the organization
itself.
Internal auditors also perform operational auditors to evaluate the effectiveness and
efficiency of MIS operations.
The principle behind the auditability of information systems is that every transactions
must reliably be traceable to the aggregate figures that it affects and each aggregate
figure must be traceable back to the transactions which gives rise to it i.e. An audit trail
must exist making it possible to trace the origin and verify the processing. Transactions
logs provides basic audit trail.
Types of IS audit
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1. System development audits: Audit staff advices members of pvy development team
to ensure that controls are embedded in the original design.
2. Operational audits – they are periodically conducted on an I.S to ensure that proper
system controls exists and that they are being followed. They involve checking
input data, processing and output.
3. Application audits – meant to validate the integrity of an I.S. It involves identifying
all the controls that govern individuals I.S and access their effectiveness. The
auditor needs a thorough understanding of the operations, physical facilities,
telecommunication control systems, data security objectives, personnel,
organizational structure and manual procedures and individual applications.
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3. Test plan – This includes drills and practices of what would happen in cases of
emergency. It tests the reliability of the back-up plans.
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