Student Publications


Author: Anthony Oduori Solo
Title: Management Information Systems Course

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MANAGEMENT INFORMATION SYSTEMS
Because there are different interest, specialties and levels in an organization, there are
different kinds of systems. No single system can provide all the information an
organization needs.
Kinds of Information Systems

Groups Served

Strategic level Senior Managers/Directors

Management Level Middle Managers

Operational Level Operational Managers

Production Sales
Finance Human Resource



Functional Areas
The above diagram illustrates one way to depict the kinds of systems found in an
organization.
In the above illustration the organization is divided into
a) Strategic
b) Management
c) Operational
The above is further divided into functional areas as indicated in the figure hence this show
that systems are built to serve different organizational interests.
a) Operational Level System
This supports operational managers by keeping track of the elementary activities and
transactions of the organization i.e. cash deposits, payroll, credit decisions sales, receipts
e.t.c
 

The principle purpose of systems at this level is to answer routine questions and track the
flow of transactions through the organization.(Example of Operational Level system is
record bank deposits from ATM and One that tracks the number of hours worked each day
by employees on a factory floor.
b) Management level systems
This serve's the monitoring, controlling, decision-making and administrative activities of
middle managers. The principle question addressed by such systems is (Are things working
well) Management level systems typically provide periodic reports rather than instant
information on operations. Mostly this systems show wherever actual costs exceed
budgets.
Some management level systems support non-routine decision making. They tend to focus
on less-structured decisions for which information requirements are not always clear. These
systems often answer "What-if" questions thus answers to these questions frequently
require new data from outside the organization, as well as data from inside that cannot be
easily drawn from existing operational level systems.
c) Strategic ­Level Systems
This system helps senior management tackle and address strategic issues and long-term
trends both in the firm and in the external environment. Their principle concern is matching
changes in the external environment with existing organizational capability.












 




ORGANIZATIONS, MANAGEMENT AND NETWORKED ENTERPRISE
Why Information Systems?
Ask managers to describe their most important resources and they'll list
a) Money b) Equipment
c) Materials c) People
It's very unusual for managers to consider information an important resource and yet it is.
We are in the midst of a swiftly moving river of technology and business innovation that is
transforming the global business landscape. An entirely new internet business culture is
emerging with profound implications for the conduct of business. This can be seen
everyday on how business people work using the high-speed internet connection for e-mail
and information gathering, portable computers connected to wireless networks, cellular
telephones connected to the internet and computing power to an increasingly mobile and
global workforce.
The emergence of internet business culture has set expectations that we all share. We
expect online services for purchasing goods and services, we expect friends and business
colleagues to be available by e-mail and cell-phone, and we expect to be able to
communicate with our vendors, customers and employees anytime of the day or night over
the internet.
Importance of Information Technology
1) Capital Management
2) Foundation of Doing Business
3) Productivity
4) Strategic Opportunity and advantage
1) Capital Management
Information Technology has become the largest component of capital investment for firms
globally.
Investment in information technology has doubled as a percentage of total business
investment and now accounts for more capital investment in the world.

 




2) Foundation of doing business
In many industries survival and even existence without extensive use of Information
systems is inconceivable hence all e-commerce is impossible without substantial IT
investments hence firms like Google, Amazon online universities i.e Atlantic International
University simply wouldn't exist
Today firms like Insurance, Finance, Real estate as well as personal services such as travel
and education can not operate without IT. Therefore Information Technology is the
foundation of business in the twentieth first century.
3) Productivity
IT is one of the most important tools along with innovation in organization and
management, infact these innovations need to be linked together hence IT plays a critical
role in increasing the productivity of firms, entire nations and the world.
In contemporary systems there is a growing interdependence between a firms information
systems and its business capability. Changes un strategy, rules and business processes
increasingly require changes in hardware, software, databases and telecommunications.
Often what the organization would like to do depends on what its systems will permit it to
do.
Organizations that invest wisely in information technology experience continued growth in
productivity and efficiency






Hardware













Business



Strategy

Software
Database

rules



process













Telecomm-


unication


ORGANISATION
INFORMATION SYSTEM


 


The above diagram show the interdependence between an organization information
systems and its business capability
4) Strategic Opportunity and Advantage
If you want to take advantage of new opportunities in markets, develop new products and
create new services chances are quite high you will need to make substantial investment in
IT to realize the new business opportunities. If you want to achieve a strategic advantage
over your rivals, to differentiate yourself from your competitors. IT is one avenue for
achieving such advantages along with changes in business practices and management.
Why IT?
A combination of information technology innovations and a changing domestic and global
environment makes the role of IT in business even more important than a few years year
ago.
There are five factors to consider when assessing the growing impact of IT in business
organizations.
a) Internet growth and technology convergence
b) Transformation of the business enterprise
c) Growth of a globally connected economy
d) Growth of knowledge and information based economies
e) Emergence of the digital firm
Internet and Technology Convergence
The internet is bringing about a convergence of technologies, roiling markets, entire
industries and firms in the processes. Traditional boundaries and business relationships are
breaking down.
Telephone networks are merging into the internet and cellular phones are becoming
internet access devices. The internet connected personal computer moving towards a role as
a home entertainment control center.
Traditional networking and the internet are nearly synonymous with doing business. Firms'
relationship with customers, employees, suppliers and logistic partners are becoming
digital relationships i.e. as a consumer you will increasingly interact with sellers in digital
environment, as an employer you will be interacting more electronically with your
employees and giving them new digital tools to accomplish their work.
Electronic Business/E-Business- it's the designate use of the internet and digital
technology to execute all of the activities in an enterprise. It includes activities for the
internal management of the firm and coordination with suppliers and other business
partners.
 




Electronic Commerce/ E-Commerce ­ It's the part of e-business that deals with buying
and selling of goods and services electronically with computerized business transaction
using the internet, networks and other digital technologies. It also includes activities
supporting those market transactions such as advertising, marketing, customer support,
delivery and payment.
Electronic Governments/E-Government ­ it's the application of the internet and related
technologies to digitally enable government and public sector agencies relationships with
citizens, businesses and other government arms. E-government can make government
operations more efficient and also empower citizens by giving them easier access to
information.
Transformation of the Business Enterprise
Along with rapid changes in markets and competitive advantage are changes in firms. The
internet and new markets are changing the cost and revenue structure of traditional firms
and are hastening the demise of traditional business models.
The internet and related technologies make it possible to conduct business across firm's
boundaries almost as efficiently and effectively as it is to conduct business within the firm.
This means that organizations are no longer limited by traditional boundaries or physical
locations in how they design, develop and produce goods and services. It's possible to
maintain close relationship with supplier and other business partners at a great distance and
also outsource work that organizations formerly did themselves to other companies' i.e
Cisco
Growth of a Globally Connected Economy
The success of firms today and in the future depends on their ability to operate globally.
Today information systems provide the communication and analytical power that
organizations need to conduct trade and manage business global scale. Controlling the far-
flung global corporation- communicating with distributors and suppliers, operating 24hours
a day in different national environments, coordinating global work teams and servicing
local and international reporting needs is a major challenge that requires powerful
information systems
Globalization and IT bring new threats to domestic businesses because of global
communication and management systems, customers now can shop in a worldwide market
place obtaining price and quality information 24 hours a day. To become competitive
participant in international markets organizations need powerful information and
communication systems.
 




Growth of Knowledge and Information Based Economies
In knowledge and information based economies the market value of firms is based largely
on intangible assets i.e. information, brands, unique business methods e.t.c.
Knowledge and information provide the foundation for valuable new products and services
such as worldwide reservations systems, credit cards. Knowledge and information intense
products i.e. computer games require a great deal of knowledge to produce and knowledge
is used more intensively in the production of traditional products as well.
Emergence of the Digital Firm
A Digital firm is one in which nearly all of the organizations significant business
relationships with customers, employees and suppliers are digitally enabled hence the core
business processes are accomplished through digital networks spanning the entire
organization.
Business processes refer to the set of logically related tasks and behaviors that an
organization develops over time to produce specific business results and the unique manner
in which these activities are organized and coordinated. Examples of business processes are
Generating and fulfilling an order, developing a new product, creating marketing plan,
hiring an employee.
The way an organization manages accomplishes their business processes can be a source of
competitive strength.
Digital firms sense and respond to their environment far more rapidly than traditional
firms, giving the more flexibility to survive in turbulent times. They do offer extraordinary
opportunities for more global organization and management. By digitally enabling and
streaming their work, digital firms have the potential to achieve unprecedented levels of
profitability and competitiveness. A full digital firm is still a vision than a reality to most
companies though this vision is driving them (companies) towards digital integration.
Firms are continuing to invest heavily in information systems that integrate internal
business processes and build closer link with suppliers and customers.
What Is an Information System?
(It's a set of interrelated components that collect (or retrieve), process, store and distribute
information to support decision making and control.
Most of us think only of hardware and software when we think of an Information System.
There is another component of the triangle that should be considered, and that's the people
side, or "persware." Think of it this way:
 


input, processing, output and feedback processes. Most important is the feedback process;
unfortunately it's the one most often overlooked. Just as in the triangle above, the hardware
(input and output) and the software (processing) receive the most attention. With those two
alone, you have computer literacy. But if you don't use the "persware" side of the triangle
to complete the feedback loop, you don't accomplish much. Add the "persware" angle with
good feedback and you have the beginnings of information literacy.
Information systems contain information about significant people, places and things within
the organization or the environment surrounding it.
Information ­ is data that have been shaped into a form that is meaningful and useful to
human beings.

Data ­ are streams of raw facts representing events occurring in organizations or its
physical environment before they have been organized and arranged into a form that can be
understood by people and used.

Business Perspective of information Systems

Business firms invest in information technology and systems because they provide real
economic value to the business. The decision to build /maintain an information system
assumes that the returns on this investment will be superior to other investments in
buildings, machines or other assets. These superior returns will be expressed as increase in
productivity, increase in revenues or perhaps a superior long term strategic positioning of
the firm in certain markets.

In some cases, firms are required to invest in information systems simply because such
investments are required to stay in business. For instance some small banks may be forced
to invest in automatic teller machines (ATM) networks or offer complex banking services
requiring large technology investments simply because it is a cost of doing business hence
its assumed that most information systems investments will be justified by favorable
results.

Every business has an information value chain, in which raw information is systematically
acquired and then transformed through various stages that add value to the that
information. The value of an information system to a business as well as the decision to
invest in any new information system is I large part determined by the extent to which the
system will lead to better management decision, more efficient business processes and a
 

higher firm profitability. Although there are other reasons why systems are built their
primary objective is to contribute to corporate value.

Dimensions of Information Systems
There are three dimensions of information systems namely
a) organization
b) Management
c) Information technology

a) Organization

Information systems are an integral part of organizations. The key elements of an
organization are its :

(i)
People
(ii)
Structure
(iii)
Business processes
(iv)
Politics
(v)
Culture
Organizations are composed of different levels and specialties. Their structures reveal a
clear-cut division of labor. Experts are employed and trained for different functions. The
major business functions or specialized tasks performed by business organization consist
of:
(i)
Sales and marketing
(ii)
Manufacturing and production
(iii)
Finance and accounting
(iv)
Human resources

An organization coordinates work through a structured hierarchy and through its business
processes. The hierarchy arranges people in a pyramid structure of rising authority and
responsibility. The upper levels of the hierarchy consist of

(i)
Managerial
(ii)
Professionals
(iii)
Technical employees

Whereas the lower levels consist of

(i) Operational Personnel
 


FUNCTIONS
PURPOSE
i
Sales and marketing
Selling the organization's products and
services
ii
Manufacturing and production
Producing products and services
ii
Finance and Accounting
Managing the organization's financial
assets and maintaining the
organization's financial records
iv
Human resource
Attracting, developing and maintaining
the organization's labor force,
maintaining employee records

Most organizations business processes include formal rules that have been developed over
a long time for accomplishing tasks. These rule guide employees in a variety of procedures
from writing an invoice to responding to customer complaints thus some of these
procedures have been formalized and written down but others are informal work practices
such as a requirement to return a telephone call from co-workers or customers these are
normally not documented

b) Management
Management's job is to make sense out of the many situations faced by organization's
make decisions and formulate action plans to solve organizations problems. The
Management perceives business challenges in the environment, they set the organization
strategy for responding to those challenges and allocate human and financial resources to
coordinate the work and achieve success. Throughout they must exercise responsible
leadership

The management must do more than manage what already exists hence they must also
create new products and services and even re-create the organization from time to time. A
substantial part of management responsibility is creative work driven by new knowledge
and information. Information technology can play a powerful role in re-directing and re-
designing the organization.

Its important to note that managerial roles and decision vary at different levels of the
organization. Senior managers make long-range strategic decisions about what products
and services to produce. While Middle managers carry out the programs and plans of
senior management. Operational managers are responsible for monitoring the firms daily
activities. All levels of management are expected to be creative, to develop novel solutions
to a broad range of problems thus each level of management has different information
needs and information system requirements.
 


c) Technology

Information Technology is one of many tools that managers use to cope with change.

Computer hardware is the physical equipment used for input, processing and output
activities in an information system. It consists of the following:

a) The Computer processing unit
b) various input, output and storage devices

c) Physical media to link these devices together


Computer Software consists of the detailed, preprogrammed instructions that control and
coordinate the computer components in an information system.

Storage technology includes both physical media for storing data, such as magnetic disk,
optical disc or tape and the software governing the organization of the data on these
physical media.

Communication technology consists of both physical devices and software, links the
various pieces of hardware and transfers data fro one physical location to another.
Computers and communications equipment can be connected in networks for sharing
voice, data, images, sound or even video hence a network links two or more computers to
share data or resources e.g. printer

The world's largest and most widely used network is the internet. The internet is an
international network of networks that are both commercial and publicly owned.

The internet has created a new "universal" technology platform on which to build all sorts
of new products, services, strategies and business models. This technology platform has
internal uses, providing the connectivity to link different systems and networks within the
form. Internal corporate networks based on internet technology are called Intranets and
private intranets extended to authorize users outside the organization are called extranets
and organizations use such networks to coordinate their activities with other firms for
making purchases, collaborating on design and other inter-organizational work.


The internet services (World Wide Web) is of special interest to organizations. The World
Wide Web is a system with universally accepted standards for storing, retrieving,
formatting and displaying information in a networked environment. All web pages
maintained by organizations/individuals are called Web site.







 

INFORMATION TECHNOLOGY INFRASTRUCTURE

IT infrastructure is a set of physical devices and software applications that are required to
operate the entire enterprise.

Business
Strategy
IT Services
Customer Services
IT
and
Supplier Services
Strategy
Infrastructure
Enterprise Services
Information
Technology

The services a firm is capable of providing to its customers, suppliers and employees are a
direct function of its IT infrastructure. This infrastructure should support the firm's
business and information system strategy. New information technologies have a powerful
impact on business and IT strategies as well as the services that can be provided to
customers


Levels of IT Infrastructure

Firm infrastructure is organized at three major levels

a) Public unit
b) Enterprise unit
c) Business unit

All firms are dependent on public IT infrastructure, which include the Internet, the Public
switches telephone network, Industry ­operated networks and other IT support facilities
such as Cable systems and cellular networks.

Enterprise ­ wide infrastructure includes services such as e-mail, a central corporate Web
site, corporate-wide intranets and an increasing array of enterprise-wide software
applications.

Business units also have their own infrastructure that s uniquely suited to their line of
business such as specialized production software and systems, customer and vendor
systems
 

INFRUSTRUCTURE COMPONENTS

IT infrastructure is composed of seven major components i.e.

Databases Management and Storage
Consultants and systems integrators
Networking/Telecommunications
Enterprise Software Applications
Operating Systems Platforms
Computer Hardware Platform
Internet Platforms


The above mentioned components must be coordinated to provide the firm with a coherent
IT infrastructure.


































 

ORGANIZATIONAL AND MANAGEMENT SUPPORT SYSTEMS FOR THE
DIGITAL FIRM

ENTERPRISE SYSTEMS

"Enterprise System also known as Enterprise Resource Planning System provide a single
information system for organization-wide coordination and integration of key business
processes. It collects data from various business processes in manufacturing and
production, finance and accounting, sales and marketing, human resources; and store the
data in a single ample data respiratory which help other part of business by providing
required information." An Enterprise Information System would typically be operated by
professional system administrators and be deployed on dedicated servers. It would typically
offer network connectivity and provide services that supported the operations carried out
by the enterprise.

Both the value and the challenge of enterprise systems can be found in the integration they
force on the firm's information and business processes. Enterprise software consist of a set
interdependent software modules that support basic internal business processes for finance
and accounting, human resources, production and sales and marketing.

The software enables data to be used by multiple functions and business processes for
precise organizational coordination and control


Finance and
Accounting
Human
Sales and
Centralized
Resources
Database
Marketing
Manufacture &
Production


Enterprise systems feature a set of integrated software modules and a central database that
enable data to be shared by many different business processes and functional areas
throughout the enterprise.

 

The software is built around thousands of predefined business processes

If the enterprise software does not support the way the organization does business,
companies can rewrite some of the software to support the way their business processes
work. However enterprise software is usually complex and extensive customization may
degrade system performance, comprising the information and process integration that are
the main benefits of the systems


Business Value of Enterprise Systems

Enterprise systems promise to integrate diverse internal business processes of a firm into a
single information architecture and that integration can have a very large payback if a a
company installs and use enterprise software correctly. Enterprise systems can produce
value both by increasing organizational efficiency and by providing firm wide information
to help Management make better decisions.

A More uniform organization
Companies can use enterprise systems to support organizational structure that were not
previously possible or to create a more disciplined organizational culture i.e Firms can
use enterprise systems to integrate the corporation across geographical or business unit
boundaries or create a more uniform organizational culture in which every one uses
similar processes and information. An enterprise enables organizations to do business
the same way worldwide.

More efficient operations and customer-driven business processes
Enterprise systems can help create the foundation for a more customer-driven organization.
By integrating discrete business in sales, production, finance and logistics the entire
organization more efficiently responds to customers request for products or information,
forecast new products and build and deliver them as demand requires.

Manufacturing is better informed about producing only what customers have ordered
procuring exactly the right amount of components or raw materials to fill actual orders,
staging production and minimizing the time that components/finished productions are in
inventory.


Firm wide information for improved decision making

In addition to monitoring operational activities such as tracking the status of orders and
inventory levels, enterprise systems also improve organization-wide reporting and decision
making. Enterprise systems create a single, integrated repository of data for the entire firm.
The data have common, standardized definitions and formats that are accepted by the entire
organization.

Performance figures mean the same thing across the company and can be provided
automatically without human intervention. Senior management can more easily find out at
any moment how a particular organizational unit is performing i.e enterprise systems might
 

help senior management immediately determine which products are most or least
profitable.

Enterprise system includes a variety of software's i.e. Supply chain Management Systems,
Customer Relationship Management systems

ENTEPRISE INTERGRATION TRENDS

Businesses are now pursuing even greater degrees of cross-functional process integration
than that supplied by the traditional enterprise applications. They want to make customer
relationship management, Supply chain management and enterprise systems work closely
together with each other and they want to link these systems tightly with those of
customers, suppliers and business partners. Businesses also want to obtain more value from
enterprise applications, web services and other integration technologies by using them as
platforms for new enterprise wide services.

Enterprise software has become more flexible and capable of integration with other
systems. The major enterprise software vendors have developed Web-enabled software for
customer relationship management, supply chain management, decision support, enterprise
portals and other business functional that integrate with the enterprise software.





























 


MANAGEMENT OPPORTUNITIES, CHALLENGES AND SOLUTIONS


Implementation of an enterprise application is above all a business decision rather than a
technology decision. Companies need to be sure that they are defining a problem that a
customer relationship management, Supply Chain Management or enterprise system can
solve. It's critical for an organization to know how much integration they want and what
the organization will look and feel like when it is achieved.

Management Opportunities

Both the peril and promise of enterprise applications lie in their power to fundamental
change the way the organization works.
Overtime most firms obtain extraordinary business value from enterprise applications
because of their power to improve process coordination and management decision making.
Promises of dramatic reductions in inventory costs, order to delivery time, as well as more
efficient customer response and higher product and customer profitability make these
applications very alluring.

Management Challenges

High Total Cost of Ownership

Enterprise systems, Supply chain management and Customer relationship management
systems are very expensive to purchase and implement. The total implementation cost,
including hardware, software, database tools, consulting fees, personnel costs and training
are usually very high (costly).Cost run even higher for organizations with global
operations, which must manage organizational and technology changes in many different
languages, time zones, currencies and regulatory environments.

Organizational Change Requirements

Enterprise applications require not only deep-seated technological changes but also
fundamental changes in the way the business operates. Business processes change
dramatically as do organizational structure and culture. Organizations that do not
understand the need for these changes or that are unable to make them will have problems
implementing enterprise applications and using them effectively.

Employees must accept new job functions and responsibilities. They will have to learn how
to perform a new set of processes and understand how the information they enter into the
system can affect other parts of the company. New organizational learning is required for
organizational embers to acquire complex new knowledge about new business rules and
business processes.

Organizations embracing CRM (Customer Relationship Management) systems need to
transform their focus from a product centric view to a customer centric view in which
retaining a customer is a priority. These changes require more interdepartmental
cooperation. If a firm's sales, marketing, support systems, back office systems and data
 

warehouses exist in isolation, the cross- functional information sharing, integration and
business intelligence to optimize the customer experience cannot occur

Supply Chain Management raises implementation hurdles because it extends beyond the
walls of the company. Business managers have accustomed to thinking about their firms ,
the best interests of their firms and business process improvements that benefit the entire
firm

Unless enterprise application investments are accompanied by improvements in the firms
business processes they are unlikely to improve the flow of information and goods.

Realizing Strategic Value

Companies may fail to achieve strategic benefits from enterprise applications if the generic
processes that had been sources of advantage over competitors. Enterprise systems promote
centralized organizational coordination and decision making, which may not be the best for
some firms to operate.


Management Solution Guidelines

Successful implementation of enterprise applications requires knowledge of how the
business works today as well as how it wants to work tomorrow it takes a lot of work to get
enterprise applications to work properly. Everyone in the organization must be involved.

Look at Business objectives

A customer relationship management, Supply Chain Management or enterprise systems
isn't merely a technology change it represents a fundamental change in the way the
company conducts its business. Any Company contemplating such systems focus too much
on the technology and not enough on business goals. The management must understand the
business objectives they want to achieve with enterprise applications before buying any
software. They must determine whether an enterprise application will actually help the
company meet these objectives. Identify the key business processes the company is trying
to improve and how much these processes must change with an enterprise application
should always.

Attention to data and data management

Enterprise applications require that information that was previously maintained in different
systems and different departments and functional areas be integrated and made available to
the company as a whole. Companies' implementing enterprise applications must develop
organization-wide definitions of data. Understanding how the organization uses its data and
how the data would be handled in a customer relationship management, supply chain
management or enterprise systems.




 

Senior Management Commitment and Employee Support

Support and backing from the CEO is critical for ensuring that all changes required by
enterprise applications will be adopted by the entire company. Employees/People are much
more willing to take on different job responsibilities or change the way they work if senior
management is firmly behind the effort. Support for the system can be encouraged by
clearly demonstrating the business value that comes with the enterprise application project
and how all can contribute to its success

Education and Training

Education and training are always essential for successful information system
implementation, but even more so for enterprise applications. Managers must learn how the
system can change key processes, organizational structure and information they use.

Employees will need to learn exactly how the system supports the work they perform and
how it affects the broader organization each time its used.
































 

BUILDING AND MANAGEMENT INFORMATION SYSTEMS

Systems as Planned Organizational Change

Building a new information system is one kind of planned organizational change. The
introduction of a new information system involves much more than new hardware and
software. It also includes changes in jobs, skills, management and organization. When we
design a new information system, we are re-designing the organization.

Linking Information Systems to the Business Plan

Deciding which new systems to build be an essential part of the organization planning
process. Organizations need to develop an information systems plan that supports their
overall business plan and in which strategic systems are incorporated into top-level
planning. Once specific projects have been selected within the overall context of a strategic
plan for the business and the systems are, an Information systems plan can be developed.

The plan serves as a road map indicating the direction of systems development (the purpose
of the plan), the rational, current systems/situation, new developments to consider, the
management strategy, the implementation plan and the budget.

The plan contains a statement of corporate goals and specifies how information technology
will support the attainment of those goals. The report shows how general goals will be
achieved by specific systems projects. It identifies specific target dates and milestones that
can be used later to evaluate the plan's progress in terms of how many objectives were
actually attained in the time frame specified in the plan. The plan indicates the key
management decisions concerning hardware acquisition, telecommunications,
centralization/decentralization of authority, data and hardware, and required organizational
change. Organizational changes are also usually described, including management and
employee training requirements, recruiting efforts, changes in business processes and
changes in authority, structure or management practices.

Establishing Organizational Information Requirements

To develop an effective information system plan , the organization must have clear
understanding of both its long and short term information requirements. Two principal
methodologies for establishing the essential information requirements of the organization
as a whole are:

Enterprise Analysis
Critical Success factors








 

ENTERPRISE ANALYSIS/BUSINESS SYSTEMS PLANNING

Enterprise Analysis: The firm's information requirements can be understood only by
examining the entire organization in terms of organization units, functions, processes and
data elements. Enterprise analysis can help identify the key entities and attributes of the
organization's data i.e.

1. Purpose of the plan
Overview of plan contents
Current business organization and future organization
Key business processes
Management strategy

2. Strategic Business Plan Rationale
Current situation
Current business organization
Changing environments
Major goals of the business plan
Firm's strategic plan

3. Current Systems
Major systems supporting business functions and processes
Current Infrastructure capabilities
Hardware
Software
Database
Telecommunications and internet
Difficulties meeting business requirements
Anticipated future demands

4. New Developments

New system projects
Project description
Business rationale
Applications role in strategy
New infrastructure capabilities required
Hardware
Software
Database
Telecommunications and internet

5. Management Strategy
Acquisition plans
Milestones and timing
Organizational realignment
Management controls
Major training initiatives
Personnel strategy
 


6. Implementation Plan
Anticipated difficulties in implementation
Progress reports

7. Budget requirements
Requirements
Potential savings
Financing
Acquisition cycle

STRATEGIC ANALYSIS OR SUCCESS FACTORS

The strategic analysis/critical success factor approach is an organizations information
requirements are determined by a small number of critical success factors of managers. If
these goals can be attained, success of the firm or organization is assured. Critical success
factor's (CSF's) are shaped by the industry, the firm, the manager and the broader
environment. New information systems should focus on providing information that helps
the firm meet these goals.

The principle method used in CSF analysis is personal interviews- three/four with a number
of top managers identifying their goals and the resulting CSF's. These personal CSF's are
aggregated to develop a picture of the firms CSF's. Then systems are built to deliver
information on these CSF's.

The strength of the CSF method is that it produces less data to analyze than does enterprise
analysis. Only top managers are interviewed and the questions focus on a small number of
CSF's rather than requiring a broad inquiry into what information is used in the
organization. This method explicitly asks managers to examine their environments and
consider how their analyses of them shapes their information needs. It is especially suitable
for top management and for the development of decision-support systems (DSS) and
executive support systems (ESS) unlike enterprise analysis; the CSF method focuses
organizational attention on how information should be handled.

The methods primary weakness is that the aggregation process and the analysis of the data
are art forms. There is no particular rigorous way in which individual CSF's can be
aggregated into a clear company pattern.

Systems Development and Organizational Change

Information technology can promote various degrees of organizational change, ranging
from incremental to far-reaching. The listed below shows four kinds of structural
organizational change that are enabled by information technology.

1) Automation
2) Rationalization

3) Re-engineering
4) Paradigm shifts

Each carries different rewards and risks
 


The most common form of IT-enable organizational change is automation. The first
applications of information technology involved assisting employees with performing their
tasks more efficiently and effectively. Calculating paychecks and payroll registers, giving
bank tellers instant access to customers deposit records this are all examples of automation.

A deeper form of organizational change one that follows quickly from early automation is
rationalization of procedures. Automation frequently reveals new bottlenecks in production
and makes the existing arrangement of procedures and structures painfully cumbersome.

Rationalization of procedures is the streamlining of standard procedures.

A more powerful type of organizational change is business process reengineering, in which
business processes are analyzed, simplified and redesigned. Using information technology,
organizations can rethink and streamline their business processes to improve speed, service
and quality. Business reengineering reorganizes work flows, combining steps to cut waste
and eliminating repetitive, paper intensive tasks. Its usually much more ambitious thank
rationalization of procedures, requiring a new vision of how the process is to be organized.

Rationalizing procedures and redesigning business processes are limited to specific parts of
a business. New information systems can ultimately affect the design of the entire
organization by transforming how the organization carries out its business or even the
nature of the business.

A more radical form of business change is called paradigm shift. Paradigm shift involves
rethinking the nature of the business and the nature of the organization.

In many instances firms seeking paradigm shift and pursuing reengineering strategies
achieve stunning, order or magnitude increases in their returns on investment




















 

Business Process Reengineering and Process Improvement

Many companies today are focusing on building new information systems that will
improve their business processes. Some of these systems projects represent radical
restructuring of business processes, whereas others entail more incremental process change.

Business process Reengineering

If organizations rethink and radically redesign their business processes before applying
computer power, thy can potentially obtain very large payoffs from investments in
information technology.

Work flow management

It's a process of stream lining business procedures so that documents can be moved easily
and efficiently.

Work flow and document management software automates processes such as routing
documents to different locations, securing approvals, scheduling and generating reports.
Two or more people can work on a document simultaneously, allowing much quicker
completion time. Work need not to be delayed because a file is out or document is in
transit. With a properly designed indexing system, users will be able to retrieve files in
many different ways, based on the content of the document.


Steps in Effective Reengineering

One of the most important strategic decisions that a firm can make is not deciding how to
use computers to improve business processes but rather understanding what business
processes need improvement.


When systems are used to strengthen the wrong business model or business processes the
business can become more efficient at doing what it should not do thus the company
becomes vulnerable to competitors.

Management must understand and measure the performance of existing processes as a
baseline. If, for example the objective of the process redesign is to reduce time and cost in
developing a new product or filling an order, the organization needs to measure the time
and cost consumed by the unchanged process.

The conventional method of designing systems establishes the information requirements of
a business function/process and then determines how they can be supported by information
technology. However information technology can create new design options for various
processes because it can be used to challenge long standing assumptions about work
arrangements that used to inhibit organizations.

Acc. Purity Kebs 14193661 Meter 71998

 

Today's digital firm environment involves much closer coordination of a firms business
processes with those of customers, suppliers and other business partners than in the past.
Organizations are required to make business process changes that span organizational
boundaries. These interorganizational processes such as those for supplying chain
management not only need to be streamlined but also coordinated and integrated with those
of other business partners

Process Improvement: Business Process Management, Total Quality Management and
Six Sigma

Business process reengineering is primarily a one time effort, focusing on identifying one
or two strategic business processes that need radical change. Business process
reengineering projects tend to be expensive and organizationally disruptive. Organizations
usually have many business processes and supportive processes that must be constantly
revised to keep the business competitive. Business process management and quality
improvement programs provide opportunities for more incremental and ongoing types of
business process change.

Business Process Management

Mergers and acquisitions, changes in business models, new industry requirements and
changing customer expectations all pose multiple process-related problems that continually
confront organizations. Business process management (BPM) enables organizations to
manage incremental process changes that are required simultaneously in many areas of the
business. It provides a methodology and tools for dealing with the organizations ongoing
need to revise and ideally optimize its numerous internal business processes and processes
shared with other organizations. It enables organizations to make continual improvement to
many business processes simultaneously and to use processes as the fundamental building
blocks of corporate information systems.

Business Process Management (BPM) includes work flow management, Business process
modeling, quality management, change management and tools for recasting the firm's
business processes into a standardized form where they can be continually manipulated.
Companies practicing business process management use process mapping tools to identify
and document existing processes and to create models of improved processes that can then
be translated into software systems. The process models might require entirely new systems
or could be based on existing systems and data. BPM software tools automatically manage
processes across the business, extract data from various sources and databases, and
generate transactions in multiple related systems.

BPM also include process monitoring and analytics. Organizations must be able to verify
that process performance has been improved and measure the impact of process changes on
key business performance indicators


Total Quality Management and Six Sigma

Quality management is another area of continuous process improvement. In addition to
increasing organizational efficiency, companies must fine tune their business processes to
 

improve the quality in their products, services and operations. Many are using the concept
of total quality management (TQM) to make quality the responsibility of all people and
functions within an organization. TQM holds that the achievement of quality control is an
end in itself. Everyone is expected to contribute to the overall improvement of quality.

Another quality concept that is being implemented today is six sigma. Six sigma is a
specific measure of quality, representing 3.4 defects per million opportunities. Most
companies cannot achieve this level of quality but use six sigma as a goal to implement a
set of methodologies and techniques for improving quality and reducing costs. Quality
improvements not only raise the level of product and service quality but they can also
lower costs.

HOW INFORMATION SYSTEMS SUPPORT QUALITY IMPROVEMENT

TQM and six sigma are considered to be more incremental than business process
reengineering. TQM typically focuses on making a series of continuous improvements
rather than dramatic bursts of change. Six sigma uses statistical analysis tools to detect
flaws in the execution of an existing process and make minor adjustments. Sometimes,
however processes may have to be fully reengineered to achieve a specified level of
quality. Information systems can/will help firms achieve their quality goals by helping
them simplify products or processes make improvements based on customer demands,
reduce cycle time, improve the quality and precision of design and production and meet
benchmarking standards

Benchmarking consist of setting strict standards for products, services and other activities
and then measuring performance against those standards.























 


REFERENCE

Graphins College International - Nairobi
Management Information Systems ­ Franklin Ochieng
Information Systems ­ Melvin Mallony
Management System ­ Mark Mackey
Management Information Systems ­ Peter C. Maxin
 

 
 
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