Business Information Systems Technology, Development and Management for the Modern Business, 6th edi

Instructor’s Manual Business Information Systems Technology, Development and Management for the E-Business Sixth edition

Paul Bocij Andrew Greasley Simon Hickie Compiled and edited by Andrew Greasley and Paul Bocij

Contents Chapters

Pages

Part 1

Introduction to Business Information Systems

4

1.

Basic concepts – understanding information

5

2.

Basic concepts: an introduction to business information systems

22

3.

Hardware and software

46

4.

Databases and analytics

78

5.

Networks, telecommunications and the Internet

87

6.

Enterprise and functional BIS

102

Part 2

Business Information Systems Development

111

7.

An introduction to acquiring and developing BIS

112

8.

Initiating systems development

138

9.

BIS project management

157

10.

Systems analysis

169

11.

Systems design

192

12.

System build, implementation and maintenance: change management

210

Part 3

Business Information Systems Management

220

13.

Information systems strategy

221

14.

Information systems management

230

15.

Managing information security

248

16.

End-user computing – providing end-user services

261

17.

Ethical, legal and moral constraints on information systems

271

3 .

PART 1

Introduction to Business Information Systems

4 .

CHAPTER 1

Basic concepts – understanding information Activities Activity 1.1 Data v. information From the point of view of a student at a university, which of the following might be examples of information? Which might be examples of data? (a) the date (data); (b) a bank statement (information); (c) the number 1355.76 (data); (d) a National Insurance number (data); (e) a balance sheet (information); (f) a bus timetable (information); (g) a car registration plate (data).

Most of the items listed are open to interpretation. It could be argued, for example, that a bus timetable is an example of data. However, if the timetable provides information concerning services to or from the campus, then it might be considered an example of information. The point of the activity is to emphasise the importance of context.

Activity 1.2 Tangible and intangible information When information is used effectively, it can bring about many of the improvements listed below. State and explain why each of the items listed illustrates a tangible or intangible value of information: (a) improved inventory control (tangible); (b) enhanced customer service (intangible); (c) increased production (tangible); (d) reduced administration costs (tangible); (e) greater customer loyalty (intangible); (f) enhanced public image (intangible).

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In simple terms, this activity is intended to emphasise the notion that the tangible benefits of information can often be measured in terms of financial value. Items (a), (c) and (d) might be considered tangible benefits since it would be possible to quantify the benefits realised. As an example, if an organisation acts on certain information, with the result that administration costs are halved, then we could suggest that the information has a value equivalent to half of the company’s administration costs.

Activity 1.3 Information value Using the Internet as a resource, find three case studies of the value of information in the context of a business organisation. As an example, you might locate a news story in Computer Weekly (www.computerweekly.com) describing the savings made as a result of implementing a new stock control system.

This activity is intended to reinforce the concept of the tangible/intangible value of information and the notion that value can often be measured in financial terms. In addition, the activity introduces students to a valuable resource (Computer Weekly is the leading magazine for IS/IT professionals). This activity might also be used as an introduction to the use of the Internet as an information resource.

Activity 1.4 Informal communication Consider the role of informal communication within an organisation such as a local government department or hospital.

1. In what ways can informal communication support the day-to-day activities of the organisation?

2. How important is the role of informal communication within the organisation?

Could the organisation function effectively if informal communication were restricted?

3. How can informal communication be controlled or harnessed for the benefit of the organisation?

4. What negative results might occur if overly strict controls are imposed on informal communication?

1. Students might be expected to arrive at quite lengthy lists of items in response to this question. Some examples of appropriate responses include the following: •

Can be used to find solutions to problems at a local level, for example, within a department.

•

Can help improve the overall efficiency of staff; for example, senior staff members might provide advice and guidance to new members of staff.

•

Allows information to be transmitted amongst members of staff quickly.

However, a disadvantage is that information can become distorted.

2. A strong case can be made for the argument that organisations require informal communication in order to function effectively. Informal communication enables 6 .

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the members of an organisation to respond to events quickly and appropriately.

Some appropriate examples include the following: •

In highly competitive industries, informal communication can be used to gather intelligence concerning rival organisations. A casual conversation with a supplier, for example, might reveal information concerning a rival’s products.

•

As more organisations adopt an approach based on centralising resources, more reliance is placed on informal means of communication. As an example, many banks and building societies now operate call centres, allowing customers to carry out transactions and make enquiries by telephone. Since the needs of customers are likely to vary a great deal, informal communication serves two purposes: it allows customers to express their individual needs and allows the organisation to provide a response tailored to the specific requirements of the customer.

•

New members of an organisation are often assigned mentors. The role of the mentor is to provide advice, guidance and information as the new staff member acclimatises to his/her new position. One of the reasons for assigning a mentor to a staff member is because much of the advice and information required by new staff members will not be found in formal company documents. For example, a company handbook would be unlikely to hold answers to every possible question a new employee might have.

3. Again, students might be expected to arrive at quite lengthy lists of items in response to this question. Some examples of appropriate responses include: •

Newsletters can be used as a forum for staff and management to express their opinions.

•

Many organisations allow employees to put forward suggestions for new products or improved services. As an example, Rolls-Royce encourages employees to approach supervisors and managers with suggestions as to how the company can improve its products and services. Prizes are awarded to employees who put forward an idea for a new product or a means of reducing costs.

•

Sales organisations often assign a member of staff to a specific group of clients in order to create and sustain good business relationships. Over time, the sales person will begin to learn about each client’s particular needs, enabling the organisation to offer a better service to individual clients. In turn, the client is likely to remain loyal to the company as all of his/her business needs are being met.

4. It is worth pointing out that it would be impossible to eliminate informal communication entirely from an organisation; for example, one could never prevent employees from meeting at lunchtimes or social events.

As the earlier questions should have helped getting a clear idea, the overall efficiency of the organisation may be reduced if informal communication is restricted. Although extreme, consider the example of a sales assistant in a supermarket needing to write a formal memo in order to find out the price of an item. In addition to reducing the efficiency of the organisation, this would also lead to a loss of customer satisfaction and a corresponding reduction in sales. This example should highlight an important point: attempts to restrict informal 7 .

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communication may impact on a wide variety of areas, ranging from customer satisfaction to productivity.

Although a great deal of research has been carried out in this area, common sense should also make it clear that human beings require some form of social contact with others. By reducing informal communication, one is likely to limit the contact that employees have with others. In turn, this is likely to reduce morale, which will almost certainly have an adverse effect on productivity.

As a final note for this question, it should be pointed out that organisations may sometimes need to place control over informal communication. As mentioned in the text of the book, informal communication can lead to inaccurate or incomplete information being transmitted to a large number of people. Unfounded rumours, for example, might easily harm staff morale or reduce public confidence in the organisation.

Activity 1.5 Information quality Visit the websites of two different online booksellers. For each example, assess whether the information provided about a particular book is of ‘good’ or ‘poor’ quality. Explain your reasoning with reference to the characteristics of information described in this chapter, in particular, in Table 1.1. Can you differentiate between the offerings of the companies using the information provided?

This activity shows how Table 1.1 can be applied to one example of decision-making.

It shows how, of all the elements of information quality in Table 1.1, only some will be relevant in all cases. Before looking at the websites, students should be encouraged to list which factors they think are important when selecting a book, for example, relevance, depth, clarity, price, recency and so on.

Suitable websites to look at are Amazon (www.amazon.com) and, in the UK, BOL (www.bol.com), WH Smith (www.bookshop.co.uk) and Streets Online (www.streetsonline.co.uk).

Students should then select one or two books and compare them across the sites for the criteria they have identified from Table 1.1.

Activity 1.6 What is knowledge?

Using the Internet, locate at least five definitions or descriptions of knowledge.

What do these definitions have in common and how do they differ from each other?

This is a research-based activity. A good way to approach this is by entering ‘define knowledge’ into Google. This will display an entry titled ‘web definitions for knowledge’. Students should find a number of common themes in the different definitions given. Some examples are as follows:

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•

Knowledge is made up (in part) of information, rather than data.

•

Knowledge involves elements such as reasoning, understanding, perception, etc.

•

Knowledge draws on experience.

•

Knowledge can help us to guide future actions.

•

There are different forms of knowledge.

Activity 1.7 Organisation-level decisions Classify the following decisions by type (structured, semi-structured and unstructured) and organisational level (strategic and tactical, operational). In addition, determine whether or not the decision-making process could be automated, and, if possible, describe the name or type of business information system (BIS) used. (a) At what level should we set the budget for the next year? (b) Does this customer qualify for a discount on a large order? (c) How should we deal with a takeover bid? (d) Should we employ more staff to cope with an urgent order? (e) Should we expand abroad? (f) Should we launch an advertising campaign? (g) Should we take a short-term loan to help our current cash flow position? (h) What new markets should we move into? (i) What should we do about a faulty machine? (a) Strategic (plus tactical elements): Can be partially automated by the use of spreadsheets and accounting figures from previous years. (b) Operational: Decision can be taken automatically, on the basis of their credit history and the size of the order. If it was a very large order then it might be reviewed manually, and it could be a tactical decision based on financial constraints. (c) Strategic issue: Could not be readily automated. (d) Operational issue: Could not be readily automated. (e) Strategic: Could not be readily automated. (f) Tactical: Could not be readily automated.

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(g) Operational or tactical: Could not be readily automated. (h) Strategic: Could not be readily automated. (i) Operational: Could not be readily automated.

The activity highlights the overlap between tactical and strategic decisions and that these types of decision are difficult to automate.

Case studies Case study 1.1: Link between tech and productivity is elusive 1.

Discuss the relationship between the use of Information Technology and productivity.

IT has been seen to raise productivity by improving efficiency and leading to faster and more accurate processing. It can also lead to better decisions based on data collected and processed. However, it can also limit flexibility, with people often being more flexible than IT systems such as ERP. IT systems can also be expensive to install and maintain and take up management time. In the UK, there is a debate about whether the use of cheap labour, often provided by immigration from the EU and other countries, has led firms to not make investments in technology that could raise productivity. There is also some debate that the true productivity rate is not being captured by the current measures.

Case study 1.2: Dealing with the data deluge 1.

Explain the social and technical issues involved in extracting personal information from the web.

In terms of social issues, two recent cases can be used as a discussion here: Google has implemented a new privacy policy despite warnings from the EU that it may violate European law. The change means private data collected by one Google service can be shared with its other platforms including YouTube, Gmail and Blogger.

But data regulators in France have launched a Europe-wide investigation after expressing doubts about the legality of the policy.

Google says it is establishing a service that will enable Europeans to ask for online links relating to their personal life to be removed from search results. The world’s biggest Internet search engine is expecting a barrage of requests after the European Court of Justice ruled that links to outdated or irrelevant data should be erased on request. Critics call it an alarming extension of online censorship.

In terms of technical issues, the approaches of the semantic web and analytics as mentioned in the case study can be discussed.

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Exercises Self-assessment exercises 1.

What are the three dimensions of information quality?

Time, content and form.

2.

How can the value of information be measured?

The value of information can be measured in two basic ways: •

By the improvements it brings to managerial decision-making (intangible value)

•

By attempting to place a financial value on the information (tangible value).

These points might be expressed with two simple formulae: •

(Tangible value) value of information minus cost of gathering information

•

(Intangible value) improvements in decision behaviour minus cost of gathering information.

3.

What are the functions of management?

A classic definition of the functions of management comes from Henri Fayol (1841– 1925): To manage is to forecast and plan, to organise, to command, to coordinate and to control.

Note that Fayol’s definition is often considered insensitive – nowadays, few people would appreciate being told that their managers ‘command’ them. Instead, it is more appropriate to place an emphasis on the notion that managers coordinate – or facilitate – the activities of staff.

In general, much of a manager’s work involves making decisions about the best ways to achieve the organisation’s objectives. It should also be noted that there is a direct link between a manager’s decision making and planning activities.

4.

What are the stages involved in making a decision?

Some models of decision making are based on four stages. Other approaches suggest that the evaluation of the decision is a fundamental part of the process. The stages of decision making are as follows: •

Intelligence

•

Design

•

Choice

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•

Implementation

•

Evaluation.

5.

How will a manager’s cognitive style affect the decisions he or she makes?

In general: •

A manager’s cognitive style will influence the type of information they require.

•

The analytical manager is suited to making regular, routine decisions where the rules governing the decision are clear (structured decisions).

•

The intuitive manager is more suited to unstructured decisions, where the rules governing the decision may not be clear.

The characteristics of analytical and intuitive managers can be summarised as shown in the table below.

Analytical

Intuitive

More suited to structured decisions

More suited to unstructured decisions

High level of analytical thought

Relies heavily on prior experience, judgement and intuition

Can provide detailed justifications for decisions

More willing to accept qualitative information

Prefers quantitative information and will often overlook qualitative information

Prefers qualitative information as quantitative information is not available

Examines situations at a high level of detail, but may overlook wider issues

Examines situations as a whole, taking a holistic view

6.

Explain how the concept of knowledge management (KM) relates to data and information.

Students should distinguish knowledge from information by explaining that data is transformed into information, but knowledge is required to interpret and act on the information.

The answer should distinguish between explicit knowledge (e.g. how to deal with a customer complaint) and tacit knowledge (e.g. what actions to take, given a set of sales figures).

7.

What differences in perspective about managerial decision-making are introduced by the e-business concept?

The e-business concept has led to top organisations providing an infrastructure for delivering good-quality (relevant, timely, in-depth and across the whole business environment) information for managerial decision-making. The e-business concept

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involves connecting an organisation with the whole of the business environment shown in Figure 1.2 (p. 8), that is, it provides more timely information flows about customers, suppliers, employees and external influences.

On a practical level, information is made available to employees through intranets, to suppliers through extranets and to customers through extranets and the public website.

This information is delivered through web browser or e-mail alerts/newsletters.

8.

In brief, what is knowledge?

From the text: Knowledge involves harnessing a person’s unique abilities, such as his/her perceptions, experiences, intuition and analytical skills. When these abilities are combined with the information a person holds, this represents knowledge. In other words, knowledge can be thought of as the combined result of a person’s experiences and the information they possess.

Discussion questions 1.

Some people argue that employees should be restricted in terms of the information they have access to in the course of their duties. Others argue that they are able to work more efficiently if they have access to all of an organisation’s information resources. Using relevant examples, make a case for one side of this argument.

Some of the points that might be raised are shown in the table below.

For open access

Against open access

•

It may not be possible to determine what information an employee might need. Preventing full access may hinder the employee when carrying out his/her duties.

•

•

Wider access to information may help the organisation to become more accountable to employees and shareholders.

Organisations have a duty to protect sensitive information; customers and clients would lose confidence in the organisation if it became aware that their privacy was not protected in some way.

•

•

Providing wider access to information can help employees to examine issues from a wider perspective. An improved understanding of the organisation may help them to foster innovation.

Allowing free/open access to all information might lead to abuses, for example, employees using information for personal gain.

•

Open/free access may harm the organisation’s competitive position since rivals may gain access to sensitive information.

•

Providing open/free access to information can make it harder to locate specific items. In addition, it might lead to unnecessary confusion.

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Some relevant examples that students might quote include: •

The late 1980s saw a great deal of public concern arise over the issue of ‘insider trading’ – the use of privileged stock exchange information for personal gain. Over the past decade, a number of public figures including high-ranking politicians and business people have become the subject of highly publicised investigations.

Access to confidential information has resulted in a number of cases where employees have attempted to defraud their employers of extremely large sums. For example, several cases are described briefly in Chapter 17.

•

Some people believe that access to the Police National Computer (PNC) is regularly abused by police officers seeking to gain information for personal reasons.

Commonly quoted examples include checking to see whether a potential boyfriend or girlfriend has a criminal record; checking whether a second-hand car has been reported stolen before buying it and locating addresses or telephone numbers on behalf of other people. In reality, however, there are extremely strict controls imposed on the use of the PNC. Genuine abuses of the system are infrequent and are at risk of some extremely severe penalties.

2.

It has been said that decision needs should determine information needs. Is this always true, or is there a case for an organisation gathering all available data and information?

Some of the points that might be raised are shown in the table below.

Gathering only relevant data

Gathering all data

•

May be difficult to identify precisely what information is needed.

•

•

Parameters of decision likely to be well defined and clear. Information not gathered until the circumstances of the situation are known and understood.

Expensive to collect, store and process information that may never be needed.

•

Less chance that important information may be overlooked.

•

More efficient – fewer resources used since only relevant information is collected.

•

May prove distracting – decision maker must sift through information to find relevant items.

•

Allows decision maker to focus more closely on specific area being considered.

•

Decision maker may find new alternatives or gain better understanding of the problem to be solved.

•

On balance, likely to lead to fastest decision being made.

•

Information gathered might be useful for other purposes, for example, used to support other decisions.

3.

Select an article of your choice from a newspaper, journal or magazine.

Analyse the information contained within the article using concepts related to the attributes of information quality. Use the web links provided at the end of this chapter to locate suitable articles.

Depending on the article chosen, students should be encouraged to make judgements about the qualities of information present in the article. As an example, students might make some of the following observations about a newspaper article: 14 .

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•

Timely – the newspaper is printed every day.

•

Concise – given the format in which it is presented.

•

Accuracy – some newspapers have a reputation for embellishing facts.

•

Reliable – some newspapers have a reputation for embellishing facts.

•

Frequency – we expect news to be provided daily.

•

Order – we expect the most ‘important’ news stories to be presented first.

4.

‘Knowledge management is nothing new, it is merely a repackaging of existing information management techniques’. Discuss.

A suggested structure for this answer is: •

Definition of knowledge management.

•

Explanation of concept of tacit and explicit knowledge.

•

Summary of what is new about KM, that is, focus on making use of information (applying intelligence that is part of managers’ experience and skill set). Use examples of applications (e.g. Hansen et al., 1999 article in chapter references). It is a structured rather than ad hoc approach to capturing and disseminating knowledge.

•

Assess whether or not it is repackaging using examples of applications and practice.

For example, information on best practice has always been shared, with or without the KM label.

•

To conclude, discuss whether or not KM has caused a change in practice or change in perspective, a combination of the two, but mainly in perspective.

Essay questions 1.

Select an organisation you are familiar with. Identify at least one major decision that the organisation has taken recently. Describe the decisionmaking process that took place, paying particular attention to the following points: (a) describe how managers became aware that a problem existed and that a decision was required; (b) describe what information was gathered so that managers could achieve a good understanding of the problem; (c) provide examples of any alternative solutions that were considered and explain why these were eventually rejected; (d) explain why the final solution was selected and describe how it was implemented;

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(e) discuss how the solution was evaluated and whether or not it was successful.

This type of essay question is normally used for diagnostic purposes and to help students learn how to produce structured papers. The notes below provide an indication of the contents of each section and identify areas where extra credit might be awarded. (a) A concise description of the organisation and the problem that arose and the mechanism by which problems are identified and prioritised should be described. In a sales organisation, for example, the existence of a problem can be found if the managers examined sales reports. The severity of the problem would help them to define what type of decision was required, what constraints existed and who should be responsible for solving the problem. In general, extra credit might be given if students identified the level at which the decision should be taken (strategic, tactical or operational) and the type of decision (structured, unstructured or semistructured). (b) In all cases, managers are likely to make use of a wide variety of information sources. The student’s response should reflect this by considering the diverse range of sources that a manager might make use of. For example, even when making a structured decision, a manager might use his/her own experience to help evaluate the likelihood of success for a given course of action. In order to earn extra credit, the student should describe the type of information (internal or external), its form (e.g. written report) and its characteristics (form, time and content dimensions) for each of the sources identified. Additional credit might be given if the student evaluates the information and offers a judgement as to its importance (in the context of the decision being taken). (c) It is important for the student to justify why a given approach was rejected. In describing the range of potential solutions considered, the student should structure his/her material carefully. A good answer will describe a set of criteria by which each solution was evaluated. The material should then show how these criteria were applied to each potential solution. (d) The description of the solution that was eventually chosen should refer back to the material in the previous section. The student should attempt to show how the chosen solution meets the selection criteria described earlier. In addition, a good answer will describe how this particular approach overcomes the shortcomings of the potential solutions considered earlier. (e) It is largely irrelevant whether or not the chosen solution was successful. However, if the solution was unsuccessful, the student should attempt to explain why this was the case. In addition, the student should try to identify which selection criteria are to blame. The evaluation of the decision should be structured carefully and (relevant) evidence should be used to justify any conclusions drawn. If the solution was successful, the student should describe how this judgement was reached. For example, in a sales organisation, increased sales would indicate that the solution chosen was the correct one. Extra credit should be given if the student shows that they realise that the successful solution may have been only one of a number of alternatives. Using the example of the sales organisation again, how do we know that a different solution would not result in even higher sales?

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2.

The survival of a large organisation depends upon access to high-quality information. Discuss this statement, providing relevant examples where necessary.

Essentially, this question asks students to describe the characteristics of information and apply this material in a practical manner. Students should recognise that ‘highquality information’ means that they are required to discuss the characteristics of information. Students are also required to make judgements based on the examples they give, determining whether a given piece of information is of ‘high’ or ‘poor’ quality.

These judgements should be supported by explaining the outcome of the situation described.

As an example, airlines often use sophisticated software applications to predict the demand for seats on particular flights. If the predicted demand is low, a variety of methods are used to sell tickets at discounted prices in order to ensure that the flight is fully booked. Success can be measured very simply: if there are any empty seats when the flight departs, then the actions taken are not entirely successful. In addition, if the airline finds that it needs to turn away passengers because the flight is full, they may have sold too many tickets at discounted prices. The ideal situation is a flight that is fully booked, with the smallest number of passengers travelling at discounted fares.

Clearly, in order to achieve this ideal situation, the airline must have access to information that is accurate and timely. In this way, we can demonstrate a direct link between quality of information and the success (or failure) of a given activity.

Extra credit might be given if a student provides a number of examples that demonstrate very clearly how the characteristics of the information used have an impact on a company’s activities. Students should also attempt to write in a structured manner, being consistent in the way in which they analyse the information described.

3.

The Microsoft Corporation is arguably one of the most successful companies in the world. Conduct any research necessary to complete the following tasks: (a) Provide an overview of the company and its activities. (b) Selecting appropriate examples, describe the company’s physical and conceptual resource bases. (c) Identify and describe some of the factors in the company’s business environment. Provide examples of factors that act either to support or obstruct the company’s activities.

(a) This section is a matter of research. Students should describe the overall structure of the company and outline its history. This material should also pay attention to factors such as the company’s stated objectives (mission statement) and its major sources of revenue. (b) Detailed research is likely to lead to a more comprehensive response. Areas that students might investigate include the following: •

Subsidiary companies owned by the organisation provide access to, or ownership of, key technology.

•

Microsoft owns a significant number of patents that protect revenues by restricting the actions of competitors.

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•

Employees or associates of the company have specialist expertise that enhances its activities.

•

In examining Microsoft’s business environment, students may choose to investigate certain areas in depth. Some possible avenues of research include: –

The actions of competitors, such as attempts by Netscape Corporation to regain control of the Internet browser market.

–

The company’s legal difficulties, such as patent disputes (such as disputes concerning the Java language originally developed by Sun) and the recent anti-trust action (started in 1998 following allegations that Microsoft enjoys an unfair advantage over competitors).

–

Strategic alliances, such as that formed between Microsoft and Intel.

(c) In this section, students should also attempt to describe how factors in the business environment act to influence Microsoft’s activities.

4.

Write a report on how knowledge management could enhance an organisation of your choice.

This question is intended mainly to mature students who have experience of a management role in an organisation.

The concept of knowledge management will need to be explained at the start.

A clear process will need to be demonstrated for introducing knowledge management (KM), for example, •

Audit of KM capture, dissemination, tools and process

•

Identification of weaknesses in tools, process and particular types of knowledge

•

Propose prioritised solutions for KM looking at tools and process separately.

There is a range of structures that could be used to assess current use and future potential of knowledge management in an organisation. For example, •

Management decision-taking levels, from strategic to operational

•

By department

•

By type of knowledge required by managers, for example, competitors, suppliers and employees

•

By decisions that need to be taken, for example, marketing budgets, recruitment, strategy and so on.

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Examination questions 1.

It is generally agreed that one of the key functions of management is decision making. Using specific examples, you are required to: (a) describe the types of decisions that managers are required to take; (b) explain the stages involved in making a decision; (c) describe the characteristics of decisions taken at different levels in an organisation.

(a) Students should indicate an understanding of structured, unstructured and semistructured decisions. In addition, they should describe some of the characteristics of business decisions including the level at which the decision is taken, information requirements, time scale and frequency. In terms of information requirements, students should describe factors such as frequency, scope and level of detail. (b) The student should describe an accepted model of decision making, such as the table below. Extra credit might be given if the student describes the significance of evaluation as part of the decision-making process. The student may also reproduce the table below.

Stage

Activities

Intelligence

Awareness that a problem exists Awareness that a decision must be made

Design

Identify all possible solutions Examine possible solutions Examine implications of all possible solutions

Choice

Select the best solution

Implementation

Implement the solution

Evaluation

Evaluate effectiveness or success of the decision

(c) The student should describe the characteristics of decisions taken at different levels in an organisation (see table below), expanding on any points made earlier. Clear distinctions should be made amongst decisions taken at each level in the organisation: strategic, tactical and operational. Extra credit should be given if relevant examples are given in support of the student’s response. Extra credit may also be given if the student reproduces the material given in Chapter 1 of the text.

Decision Management level

Type of decision

Timescale

Impact on organisation

Frequency of decisions

Strategic

Unstructured

Long

Large

Infrequent

Tactical

↨

Medium

Medium

↨

Operational

Structured

Short

Small

Frequent

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2.

An understanding of the nature of information is fundamental to the study of information systems. Using specific examples, you are required to: (a) define information; (b) describe the characteristics that will be present in information of high quality; (c) describe how the value of information can be determined.

(a) Students should supply one or more of the following definitions: Data that have been processed so that they are meaningful.

Data that have been processed for a purpose.

Data that have been interpreted and understood by the recipient.

Information acts to reduce uncertainty about a situation or event.

However, a more complete answer should be expected, where students attempt to make some or all of the following points. Information: •

Involves transforming data using a defined process

•

Involves placing data in some form of meaningful context

•

Is produced in response to an information need and therefore serves a specific purpose

•

Helps reduce uncertainty, thereby improving decision behaviour.

(b) Students should provide a list of information characteristics, ideally grouping them by category (time, form and content). Each of the characteristics listed should be accompanied by a brief description. Extra credit should be awarded if students provide relevant examples of each characteristic. (c) Students should distinguish between tangible and intangible value, ideally providing a relevant example of each. Although the formulae shown below need not be reproduced, students should still demonstrate an understanding of the two concepts they illustrate: (i) information may have a value that can be directly measured (in financial terms); (ii) information can have value if it helps improve decision-making.

Value of information minus cost of gathering information.

Improvements in decision behaviour minus cost of gathering information.

3.

Information can be transmitted via formal and informal means. Using specific examples, you are required to: (a) describe the advantages and disadvantages of each method; (b) discuss each method in terms of the attributes of information quality that are likely to be present.

(a) Students are encouraged to provide a relatively general description of formal and informal communication. A good response will link to managerial decision-making, covering areas such as cognitive style and type of decision (structured, unstructured

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and semi-structured). It may be appropriate for students to describe the advantages and disadvantages of each type of communication by using tables or brief lists. (b) Students should provide a brief description of the characteristics of information and then apply this to formal and informal communication. Extra credit may be given if the student makes several direct comparisons; for example, information provided via formal communication is likely to be highly accurate, while information provided via informal communication may not be accurate.

4.

In relation to the concept of knowledge management: (a) explain how knowledge differs from information; (b) describe two ways of classifying knowledge; (c) give an example of a business application for each of your answers in (b).

(a) The answer should highlight that knowledge is about how information is applied by managers as part of running a business. (b) For instance, two of •

explicit v. tacit;

•

by management need, for example, strategy, finance and marketing decisions;

•

level (strategic, tactical and operational);

•

by information type: customers, competitors, etc.

(c) Marks should be awarded for general technologies, for example, expert systems (ES), knowledge bases and intranets, but also for demonstrating how they can be applied.

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CHAPTER 2

Basic concepts: an introduction to business information systems Activities Activity 2.1 Example of information systems What information systems might be found in your newsagents? For each system identified, list the people, hardware, communications, software and data resources involved.

Examples of the kinds of systems that might be found include those indicated in the table below. Note that the lists given contain a limited number of examples and are not intended to provide a comprehensive solution.

Resource requirements needed for different systems in a newsagent: Resources

Billing system for newspaper deliveries

Stock control system for other items sold in store

National Lottery (Lotto) ticket sales system

Hardware Resources

Personal computer and printer

Personal computer and printer

Specialised terminal with integral printer and communications equipment (e.g. modem and leased telephone line)

Software Resources

Billing software (will include facilities for data entry and a variety of reports, e.g. account details for individual customers, summary reports and so on.) and backup software

Stock control software with facilities for recording sales and deliveries.

Software may also account for invoices paid and received.

Package will also produce a variety of reports, for example, stock for reorder, summary of sales and so on

National Lottery terminals use specialised software that produces tickets, records sales and carries out other functions, for example, ‘lucky dip’ tickets, where numbers are selected at random

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Data Resources

Supplier details, for Supplier data, for example, contact example, information, price newspapers and lists, stock magazines availability and so delivered each on. week. Customer information, for Records of sales. example new orders Records of current and cancellations. stock held. Financial Data from delivery data, for example, people, for example whether or not the customers who newsagent can have or have not afford to buy given paid items of stock

People Resources Newsagent, customers, delivery people, suppliers (i.e. distribution company) sales staff and suppliers of equipment (for support, etc.)

Suppliers, sales staff and suppliers of equipment (for support, etc.)

Time and date (restricts times when tickets can be sold).

Customers’ selections (of numbers).

Records of previous draws (for awarding prizes, etc.)

Sales staff and suppliers of terminal equipment (for support, etc.)

Activity 2.2 Online processing systems Using the Internet as a resource, locate at least two examples of the use of online processing systems in business. As an example, both Sainsbury’s and Boots use incentive programmes based around loyalty cards, where customers can redeem points against purchases using interactive kiosks.

This is a relatively simple task that is intended to make students appreciate the extent to which such systems are used. Some examples that students might identify include: •

The ATMs provided by banks and other financial institutions;

•

The electronic tills used by supermarkets that can accept payment by credit card or Switch;

•

Many retailers use inventory control systems that monitor stocks across a number of stores. These systems are capable of automatically reordering items when stocks fall below certain levels.

Activity 2.3 The Internet economy Consider the framework of the Internet economy developed by the CREC (Center for Research and Electronic Commerce) at the University of Texas. Give at least three examples of companies for each layer in the framework.

There are four layers in the framework. CREC describes these layers like this (see http://www. infotoday.com/searcher/sep00/friedman.htm): 23 .

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•

Internet infrastructure: including telecommunications companies, Internet backbone providers, Internet service providers (ISPs) and other last-mile access providers.

•

Internet applications infrastructure: principally, software required for Internet services, but also consulting and service companies hired to build websites.

•

Internet intermediary: economic activity at the intermediary level includes service provided by auction and aggregation providers – companies that package or provide a forum for economic activity, though they may not be involved in the activity itself.

•

Internet commerce: finally, the commerce layer includes companies that are engaged in sales and transactions over the Internet.

Typical examples of Internet infrastructure companies include: British Telecom (ISP and telecommunications), AT&T (Internet backbone providers), AOL (ISP and backbone provider) and Cisco Systems Inc. (hardware manufacturer).

Typical examples of applications infrastructure companies include: Microsoft (producers of operating systems and web server and Internet Information Services [IIS]), Apache Software Foundation (producers of Apache web server) and Sun Microsystems (developers of Java and other critical hardware/software).

Typical examples of Internet intermediaries include eBay (auction site), Expedia (online travel), CNET (content aggregators) and Google (portal and content aggregators).

Typical examples of Internet commerce include Amazon (e-tailer), Dell (hardware manufacturer selling online) and iTunes (online entertainment).

Activity 2.5 Benefits of e-business The approaches used by companies such as Argos, Dell and eBay restructure the relationship amongst manufacturer, retailer and customer to the benefit of all involved. Discuss this statement with reference to the e-business and e-commerce concepts described in this section.

This activity asks students to identify some of the key benefits of e-business. Some typical benefits students might be expected to identify are given below.

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Manufacturer

Retailer

Customer

Can achieve economy of scale even with niche products because more retailers to work with

Larger range of products to Larger range of products to offer customers choose from

Reduced production costs through better access to raw materials, larger choice of suppliers, etc.

Can reach customers almost anywhere; no physical restrictions

Can access products and services from almost anywhere, for example, UK buyer can buy from USA

Can reach customers directly; quick feedback on products, easier to provide support, etc.

Can provide customers with improved customer support through website, e-mail, etc.

Competition acts to reduce prices

Can sell directly to customers

Reduced costs through improved processes, for example, online payment systems

Easier to reach manufacturer for information and support

Case studies Case study 2.1: Domination dies hard in technology markets 1. Discuss the experience of Microsoft in terms of Porter’s five competitive forces.

It is very difficult for new entrants to compete with business software such as Microsoft Office as users have commitment training to its use.

The Windows O/S system is still dominant in PC computing but the move to mobile computing has allowed the entry of Android and Apple iOS. Microsoft develop their own software so that there is little threat from suppliers.

Customers have little choice in terms of Office applications and little chance of substitutions on Windows devices.

Competitors have found alternative large markets in mobile computing and so provided an alternative to the Windows O/S and so in turn the Office application.

Even though Microsoft have made strategic errors in missing the mobile market, they have still been able to increase profits by offering the Office application on the cloud and by leveraging their cloud computing platform.

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Exercises Self-assessment exercises 1.

Answer the following questions in relation to your college or university: (a) What are the institution’s objectives? (b) Identify a range of typical inputs, processes and outputs. (c) What feedback mechanisms are in place and what kinds of information do they produce? (d) What control mechanisms exist?

(a) The institution’s mission statement provides a summary of aims and objectives. As an example, the following statement – or one very much like it – is likely to be found in many college and university literature: The University of XXX exists to provide equal access to quality education for all students.

Such a statement can be broken down as follows: •

Although this may seem obvious, as a whole, the statement suggests that the primary purpose of the institution is to deliver education and training. However, this statement also suggests activities that the college or university will not undertake. In an established college or university, for example, such a statement would imply that research is considered secondary to teaching.

•

The term ‘equal access’ implies that one objective of the institution is to cater to the needs of all students, irrespective of gender, ethnicity, religious beliefs or age. Furthermore, the use of the word ‘access’ suggests a proactive approach towards recruiting students. In other words, the institution aims to create opportunities for students to study.

•

The term ‘quality education’ implies that the institution will seek to ensure that the highest standards of teaching and learning are maintained. Obviously, such a statement is made within certain constraints, such as budget.

(b) Students should be encouraged to take a methodical approach to the task and should attempt to link items together. Although the table below contains only a small set of examples, it illustrates the approach that should be taken.

Inputs and outputs for the different processes in a college or university are listed in the table below.

Process

Inputs

Outputs

Enrol students

Student information (e.g. individual names and choice of course) Course information (e.g. places available)

Record of all students enrolled on course Statistics for internal use Statistics for government use

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Student induction

Timetable for course Availability of facilities (e.g. rooms) Questionnaires for gathering information on students

Programme of induction events Feedback on induction programme

Join library

Student enrolment details Student course details

Student’s library account

A college or university will have a large range of feedback mechanisms relevant to the wide variety of processes that take place in a typical institution. Some examples are listed: •

Enrolment data will be processed so that managers can carry out tasks such as identifying courses for which the recruitment has not been good.

•

Student representatives will provide feedback information concerning individual modules and courses.

•

The National Union of students (NUS) will regularly provide feedback information to the institution concerning the welfare of students; for example, the NUS represents students with grievances against the institution.

•

All institutions will have internal quality committees that deal with issues ranging from the quality of teaching to the condition of the institution’s buildings.

There will also be a wide variety of different control mechanisms in place. Some examples include the following: •

Poor recruitment figures might be rectified by spending more on advertising, or altering the hours of the course (so that it becomes more accessible to certain groups).

•

Complaints concerning student grades might be dealt with via a course committee meeting, where a new marking scheme might be introduced, or additional cross-marking is recommended.

•

A need to repair buildings or acquire new equipment might be met by adjusting budgets.

(c) and (d) Ideally, students will come to link the answers to (b), (c) and (d) as shown in the example in the table below.

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Inputs and outputs for the recruit-students process related to feedback and control components Process

Inputs

Outputs

Recruit students Students (and Advertising student data) Enrolment figures Finance (for advertising, etc.)

Staff (for student guidance, etc.)

Rooms (for enrolment, etc.)

2.

Feedback

Control

Enrolment statistics Market research

Increase advertising Alter course times

In what ways can information systems support a manager’s activities?

At the simplest level, students should recognise that information systems help managers to make better decisions by providing information of high quality.

A more comprehensive answer might link the functions of management with managerial decision making and the attributes of information quality. An example is given below: Planning

3.

>>

Information systems can be used to plan projects by providing information for forecasts, etc.

However, the information will only be useful if it is relevant, accurate, timely, etc.

>>

Managers can make more effective decisions regarding how the project is structured, with the result that the project is more likely to succeed.

How can computer-based information systems help an organisation to achieve a strategic advantage over its competitors?

Students are asked to recall the basic competitive strategies of cost, leadership, product differentiation and innovation. However, a more thorough response will include this list: •

improving operational efficiency;

•

raising barriers to entry;

•

locking-in customers and suppliers;

•

promoting business innovation;

•

increasing switching costs;

•

leverage.

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4.

Match each term to the correct statement.

Solution: feedback

–

provides information concerning the performance of a system

interface

–

describes exchanges between the system and its environment

process

–

converts raw materials into a finished product

environment

–

contains everything outside of the system

boundary

–

defines the scope of the system

input

–

examples include raw materials, energy or labour power

output

–

examples include information, a product or service

control

–

adjusts the performance of the system

5.

What is the virtual value chain (VVC)?

The VVC extends Porter’s concept of value chain analysis to the Internet. Where Porter’s value chain generally deals with the production, marketing and supply of physical products, the VVC is concerned with producing and marketing non-physical products, such as subscription-based services.

Key concepts associated with the VVC are: •

The marketspace, the virtual equivalent of the marketplace

•

The argument that information can create new value for customers (i.e. it has more value/benefit than simply supporting primary/secondary activities)

•

A process whereby companies move through three phases when adopting the VVC, ultimately transforming them in fundamental ways. The phases are visibility, mirroring capability and new customer relationships. In brief, companies begin by examining and altering physical processes (visibility) before replacing them with virtual processes (mirroring capability) with a view towards using information to deliver value in new ways (new customer relationships).

6.

What are transaction costs?

Transaction costs describe all of the costs associated with carrying out business transactions. As an example, choosing and then paying for an item by debit card incurs a number of costs for the retailer. These might include the cost of maintaining a showroom, staffing, advertising, bank charges imposed for processing payments and so on. A typical transaction cost for making or receiving a payment via a debit card might be as much as 3% of the value of the transaction.

One of the key business benefits of the Internet is that it acts to reduce transaction costs.

It is also possible to pass some transaction costs onto customers. As an example, a retailer like Amazon has low transaction costs because it has no physical sales branches, no salespeople and so on. This allows the company to pass discounts on to customers.

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7.

Explain the reasons for the adoption of enterprise resource planning (ERP) systems by organisations.

ERP provides a single package that replaces a number of separate packages. This allows better integration between modules and simplified support and maintenance. The ERP system typically supports several functional areas or different parts of the value chain such as inbound logistics, manufacturing, distribution, sales and finance.

Discussion questions 1.

Can each of the following be described as a system? For each item, try to identify at least two inputs, processes and outputs. In addition, also try to identify what feedback and control mechanisms exist?

•

a human being;

•

a plant;

•

a house;

•

a country;

•

a computer.

The table below summarises the inputs, processes and outputs for the items listed in this question. The list is intentionally contentious – a great deal depends on how students interpret each item. Some examples of the points students might make are given in the accompanying table. Brief notes concerning each item are also given.

Inputs, processes and outputs for different systems Item

Inputs

Outputs

Processes

Feedback

Control

Human being

Food Water Oxygen

Carbon dioxide Waste products

Respiration Nourishment

Autonomic (body recognises need for more oxygen) Hunger pains

Increase breathing rate Ingest food

Plant

Water Minerals Sunlight

Oxygen Fruit/seeds

Photosynthesis Autonomic (plant Plant Hibernation recognises need orientates towards for nutrients) Autonomic (plant sunlight. Plant varies intake recognises changes in climate of nutrients and temperature) (for storage, etc.) and leaves shed (not required)

House

Utilities (gas, electricity, etc.)

People

Heat and light

Heating and lighting

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Lighting manual and heating by thermostat

Thermostat

Bocij, Greasley and Hickie, Business Information Systems, 6e, Instructor's Manual

Country

People Money Labour Produce

Computer Electricity Software Data

Money Foods

Directing resources Controlling population

Voting Opinion polls

Elections Legislation

Screen displays printed documents

Running a program Controlling performance

Messages from operating system Commands from user

Operating system User

•

Human being. Generally recognisable as a series of interconnected systems. The digestive system, for example, takes in food (input) in response to a sense of hunger (feedback). The food is digested (process), resulting in energy and waste products (output). The time when a person eats and the amount eaten (control) depend on the sense of hunger.

•

Plant. Generally recognisable as a series of interconnected systems. Some plants, for example, reproduce (process) by creating seeds (output) by making use of stored energy and minerals (input). The plant recognises the time to reproduce by changes in the weather (feedback) and other factors. The number of seeds produced (control) will vary according to the plant’s health and the availability of nutrients.

•

House. It is difficult to consider a house in terms of a system since feedback and control mechanisms cannot be easily identified. One would need to stretch several points in order to form an argument. For example, one could argue that an output might be ‘shelter’ and a process could be ‘provide shelter’. However, such an argument would be tenuous at best.

•

Country. Whether or not one considers a country to form a system depends heavily on how the task is interpreted. If a country is considered in terms of a society, then it is possible to form a convincing argument by considering processes such as managing the behaviour of the population.

•

Computer. A computer clearly possesses all of the components of a system.

Students often find it difficult to identify feedback and control elements and may need additional guidance. The examples given in the table may need a little more explanation in order for students to understand them fully.

•

Users form part of a feedback mechanism where they issue commands. As an example, when word processing, using a menu command or typing text represents feedback since the user is responding to one or more outputs from the wordprocessing software (and vice versa).

•

The operating system constantly provides feedback information to the computer; for example, messages will be sent each time a disk drive is accessed to inform hardware (and software) that data is about to be written or read.

•

Hardware devices also provide feedback. Modern computers often feature temperature control systems, where sensors constantly monitor the temperature of the microprocessor.

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It may also be appropriate to provide students with several examples of control mechanisms: •

In the case of temperature control systems, control activities can take several forms: a fan might be switched on automatically to reduce the temperature; the microprocessor may be set to ‘idle’ (slowing down the microprocessor acts to reduce its temperature) or the entire machine may be turned off automatically.

•

Users can also exert control over a computer system. Cancelling a task such as writing a file to a floppy disk, for example, is a method of control.

•

Operating systems perform a number of control activities. For example, all operating systems manage the computer’s resources, such as deciding how memory is allocated to a given task.

2.

A small company is considering the purchase of a computer and accounting software to help it keep track of its finances. In general, what are the benefits of processing by computer? What other benefits might the company gain by taking this step?

Students should recall these major benefits. In brief, these are: •

Speed. Computers can process millions of instructions each second, allowing the students to complete a given task in a very short time.

•

Accuracy. The result of a calculation carried out by a computer is likely to be completely accurate. In addition, errors that a human being might make, such as a typing error, can be reduced or eliminated entirely.

•

Reliability. In many organisations, computer-based information systems operate for 24 hours a day and are only ever halted for repairs or routine maintenance.

•

Programmability. Although most computer-based information systems are created to fulfil a particular function, the ability to modify the software that controls them provides a high degree of flexibility. Even the simplest personal computer, for example, can be used to create letters, produce cash-flow forecasts or manipulate databases.

In addition, a more comprehensive response will highlight some of the disadvantages of processing by computer.

Students should also refer to material on competitive advantage. Although this material should indicate how the company can gain a competitive edge, it should also indicate additional benefits to the company. For example, the material on cost leadership should suggest cost reduction as another benefit of computerisation.

3.

Locate an annual report or article that describes a large organisation, such as a supermarket chain. From the information contained in the annual report, identify and describe the information systems that the company might use.

For this type of question, the aim is for students to carry out a detailed and methodical analysis of a major organisation.

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Students should be able to identify specific kinds of information systems throughout the entire organisation. Example: In a supermarket chain, the analysis might begin with the electronic tills used in individual stores, moving through areas such as logistics (systems for stock control, deliveries, etc.) and ending with a discussion of the decision support systems used by top managers (e.g. modelling, simulation and so on).

Ideally, students should highlight and describe key areas of technology in order to demonstrate their understanding. Example: While considering a supermarket chain, one would expect a student to pay a great deal of attention to EPOS (electronic point of sale) technology.

Perhaps the most important areas for students to consider are the complex relationships and interdependencies amongst the information systems used. Example: In the supermarket chain, the implementation of EPOS (in the form of electronic tills) is of major importance to areas such as stock control, the management of cash flow and the selection of product lines. In more formal terms, the student should recognise that the outputs produced by the systems used on the shop floor (that is, the operational level) form the inputs for systems used in other parts of the organisation (the tactical and strategic levels).

A good response might also consider the attributes of information quality relevant to each of the systems examined. In the case of a supermarket chain, it should be obvious that the accuracy of information produced at the operational level has a major impact at the tactical and strategic levels of the organisation. If the information produced is inaccurate, this will influence the quality of any decisions taken at these levels.

4.

Discuss the following statement with reference to how an organisation should react to the Internet. ‘Is the Internet a typhoon force, a ten times force, or is it a bit of wind? Or is it a force that fundamentally alters our business?’ (Andy Grove, Chairman of Intel).

Suggested approach: This statement is useful in that it indicates that the impact of the Internet will vary according to the type of business that an organisation is in. Students should look at a range of industries from those where the impact is high, for example, media and information services to those where the impact is low, for example, retailer. The ES test can be used for consumer industries. Examples can be taken from those that have reacted, for example, easyJet or General Electric in comparison to those that haven’t.

The analogy may also be apt since the Internet phenomenon may be transitory. This can also be considered.

5.

‘Enterprise resource planning software is likely to replace packages used in a single area of the organisation, such as accounting, logistics, production and marketing’. Discuss.

ERP is likely to be restricted to larger organisations due to the cost of customisation of the software for the client. Mass-produced and, thus, cheaper, off-the-shelf packages are likely to be the most suitable option for the small organisation. Enterprise resource planning (ERP) software is a single system that gives applications for all the major business functions discussed in this chapter such as production, distribution, marketing and sales and finance and human resources management. It is normally purchased as an 33 .

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off-the-shelf package, with modules for each major business process or business function that are tailored by a consultant. A single package typically replaces many different previous packages. The benefits of this approach include: •

Reduced cost of buying from a single supplier

•

Better transfer of information within the organisation since all the modules of the system are compatible

•

Simplified support and maintenance through a single supplier

•

Use of ‘best of breed solutions’ employed by other companies.

The main disadvantage of the use of ERP systems seems to be the high costs charged by suppliers due to the demand for this type of system. This high demand has also given rise to skills shortages. The other disadvantage of ERP systems is shared with all off-the-shelf systems, namely, that the business often has to change its processes or way of working in order to fit the way the software works. This may not present a problem if a company is looking to re-engineer its processes since, then, the ERP software can provide a framework.

Owing to the high cost of ERP solutions, only large companies can afford the cost of the software and the consultants, which will often be measured in millions of pounds.

Smaller companies can take advantage of the features of integrated accounting packages that now provide modules beyond those of the basic accounting package.

In summary, there is overwhelming evidence that ERP will replace functional applications in large organisations. In smaller organisations, the role of ERP applications is likely to be assumed by integrated accounting packages with similar functions.

Essay questions 1.

Use the Internet to research the SABRE system produced by American Airlines. This system demonstrates how BIS can be used to gain strategic advantage. Provide an analysis of this system. Your response should include discussion of the following areas: (a) Describe how the overall approach adopted by American Airlines incorporated the basic competitive strategies of cost leadership, innovation and product differentiation. (b) In what ways did SABRE provide American Airlines with a competitive advantage? Your analysis should refer to concepts related to the strategic use of information systems, for example, entry barriers. (c) Although SABRE was undoubtedly successful, American Airlines was not able to maintain its competitive advantage beyond the late 1980s. What factors played a part in the erosion of the company’s lead over its competitors and how did the company react?

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(a) Some points that might be made include the following: •

Cost leadership. The use of an electronic booking system provides highly detailed and accurate information related to a wide variety of areas. For example, information concerning reservations can help the company to make the most efficient use of resources. The use of an electronic system also helped reduce transaction costs. For example, by allowing travel agents to deal with bookings, the company reduced costs related to activities such as issuing tickets and managing the number of available seats on each flight. The material given for Essay Question 2 in Chapter 1 is also of relevance here.

•

Innovation. It is clear that SABRE itself was an innovation in terms of handling airline reservations. In addition, providing the system free of charge was a bold step in terms of the established business practices used at the time.

•

Differentiation. The wide adoption of SABRE helped to differentiate the company’s products (flights) from those of its competitors. One can see that a travel agent’s use of SABRE implied endorsement for the company’s flights. In addition, since the company’s flights were always displayed first, this would tend to enhance its reputation.

(b) Some areas that might be considered include the following: •

Entry barriers. Few competitors would be able to afford the cost of developing a system to rival SABRE. Fewer still would have the resources needed to supply and install the system free of charge across the entire country. In addition, since many travel agents had already adopted SABRE, competitors would face the daunting task of convincing them to change to a new system.

•

Switching costs. As SABRE established a de facto standard for airline reservation systems, competing airlines would need to bear the cost of ensuring that their information systems were compatible. Similarly, travel agents would be reluctant to turn to a competing system since this would involve a great deal of expense. For example, in addition to expenses such as staff training, a travel company might suffer costs from reduced efficiency while the changeover took place.

•

Operational efficiency. As mentioned in a previous section, the detailed information available via SABRE could be used to reduce costs and improve operational efficiency in a variety of ways. The example was given earlier of reducing transaction costs by allowing travel agents to deal with the bulk of each business transaction.

•

Lock in customers and suppliers. Again, as mentioned in a previous section, the expense involved in adopting a new system acted to lock in the company’s customers (travel agents).

(c) This is a broad topic where students might propose a wide variety of possible explanations. Although it is difficult to pinpoint a specific cause, a fairly coherent argument can be made by considering a number of related points: •

It might be argued that American Airlines failed to invest sufficiently in the further development of SABRE and the systems produced afterwards. This allowed competitors to put forward alternatives to SABRE that seemed more attractive to travel agents.

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•

Reduced hardware and software costs enabled other companies to develop competing systems relatively quickly and cheaply.

•

As more and more competitors adopted sophisticated information systems, they were able to realise many of the benefits enjoyed by American Airlines, such as increased operational efficiency. This served to diminish the company’s competitive advantage.

•

It might be argued that the company focused efforts on its core business activities, failing to diversify enough to offset losses when the demand for flights diminished. In terms of competitive strategy, it can be suggested that the company was unable to maintain an advantage because of a reduced emphasis on business innovation.

In terms of how the company reacted to the changes it experienced, the following points are worth considering:

2.

•

Initially, it appeared that the company did very little to re-establish its competitive edge. It can be argued that the company became somewhat complacent and failed to react in time to the actions of competitors and changes in the market.

•

Although an improved bookings system was eventually developed, this did not have the same impact as the launch of SABRE. It can be argued that a number of factors, including those outlined earlier in this section, were responsible for this.

•

In the early to mid-1990s, American Airlines no longer held the competitive position it had enjoyed for almost a decade. Although still basically profitable, the company had a reduced size and no longer dominated the market.

•

Students should be encouraged to undertake a little research so that they can report the current position of American Airlines.

Select an organisation you are familiar with. You may choose a department within a large organisation, if you wish. Analyse the structure and behaviour of the organisation using systems concepts. Your response should include the following elements: (a) Identify and describe at least two examples of the following: inputs, processes, outputs, feedback and control. (b) Identify and describe two decisions that will be taken at the strategic, tactical and operational levels of the organisation. (c) For each of the decisions described, identify at least two items of information that may be required. Describe some of the characteristics that each item of information will have.

(a) This question is quite similar to Question 3 in the Discussion questions section. It may be worth using both questions together in order to reinforce understanding of the topics covered. The discussion question, for example, might be used in a tutorial session as a preparatory exercise prior to students tackling the essay.

For the purposes of this section, we will use a supermarket chain to provide suitable examples.

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The examples chosen should be clear and unambiguous (see table below). At this level, some fairly simplistic responses would be acceptable, providing they were logical and consistent.

Example 1

Example 2

•

Products

•

Demand for products

•

Pricing information

•

Stock levels

Process

•

Selling goods to customers

•

Managing stock held at branch

Outputs

•

Information on sales, for example, weekly totals

•

Orders for products with low stock

•

Profit realised after expenses

•

Details of products that are overstocked

•

Returns of faulty or inappropriate products

•

Demand for products

•

Stock checks

Inputs

Feedback

Control

•

Customer demand for certain products

•

Increased quality checks

•

Adjusting reorder levels

•

Sales and special offers to reduce stocks

•

Using alternative suppliers for certain products

(b) The examples chosen should be clear and unambiguous (see table below).

Decision 1

Decision 2

Operational

Daily staff levels for an individual branch

Price reductions for products that must be sold by a certain date

Tactical

Selection of suppliers for given products

Advertising (could also be operational or strategic, depending on scale)

Strategic

Whether to open one or more new branches in a given area

Diversification, for example, providing additional services such as banking facilities

Some responses may need to be clarified, and students should attempt to do this whenever required. As an example, the scale of the activity would need to be made clear in the ‘Advertising’ decision given in the table above. (c) Using the examples given for (b), any of the following items in the table would form an acceptable response:

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Decision 1

Decision 2

Operational •

Staff absences for the day

•

Quantity of item in stock

•

Availability of staff to cover for absence

•

Price of item

•

Profit margin (to determine lowest possible selling price)

Tactical

Strategic

3.

•

Minimum staffing levels needed for efficient operation

•

Reputation of supplier

•

Cost of advertising

•

Location of supplier

•

•

Supplier’s prices

Most effective medium for advertising

•

Details of offers, etc. to include in material

•

Location of competitors’ braches

•

Competitors’ plans

•

Market research information, for example, if customers likely to take up service

•

Set-up costs

•

Availability of land

•

Availability of local employees

•

Size of potential local market

Draw a diagram illustrating the subsystems occurring in a hospital. Label the inputs and outputs of each subsystem. Which subsystems are most closely coupled?

A hospital is similar to any other kind of organisation in that many of the same functions are performed. For instance, a hospital will recruit and train personnel, issue payments, order goods and so on. The diagram produced can take any form, providing that it is clear and easy to understand.

For the purposes of this question, students should be directed to focus on areas such as patient care. When identifying the subsystems that are likely to be most closely coupled, students might consider some of the following activities: •

Inventory control. As medical supplies are used up, new stocks must be ordered. As many medicines are perishable, care must be taken to order medicines and other supplies only when they are needed.

•

Blood bank. Similar to the previous point.

•

Staffing levels. The personnel department (or ‘function’) must ensure that adequate numbers of appropriately trained staff are available at all times.

•

Admissions. Medical staff may need to keep track of when patients are discharged or admitted so that they can admit new patients when necessary, making sure that enough beds are available at all times.

4.

Do you believe that the advantages of enterprise resource planning applications outweigh their disadvantages? Illustrate your answer with reference to company examples.

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The benefits of ERP include: •

Reduced cost of buying from a single supplier

•

Better transfer of information within the organisation since all modules of the system are compatible

•

Simplified support and maintenance through a single supplier

•

Use of ‘best-of-breed solutions’ employed by other companies.

The main disadvantage of the use of ERP systems seems to be the high costs charged by suppliers due to the demand for this type of system. This high demand has also given rise to skills shortages. The other disadvantage of ERP systems are shared with all off-the-shelf systems, namely, that the business often has to change its processes or way of working in order to fit the way the software works. This may not present a problem if a company is looking to re-engineer its processes since, then, the ERP software can provide a framework.

Owing to the high cost of ERP solutions, only large companies can afford the cost of the software and the consultants that will often cost millions of pounds. Smaller companies can take advantage of the features of integrated accounting packages that now provide modules beyond those of the basic accounting package.

In summary, for large companies, the advantages of ERP systems would appear to outweigh the disadvantages, but they are too costly for smaller companies.

Examination questions 1.

Information systems play a critical part in supporting a company’s activities.

Using specific examples, you are required to: (a) define an information system; (b) describe the categories of computer-based information systems, providing relevant business examples for each category identified; (c) explain how computer-based information systems can support managers at each level of an organisation.

(a) The definition given in the text (p. 42) is as follows: A business information system is a group of interrelated components that work collectively to carry out input, processing, output, storage and control actions in order to convert data into information products that can be used to support forecasting, planning, control, coordination, decision-making and operational activities in an organisation.

Students need not duplicate this definition, provided an acceptable alternative is offered. In addition, extra credit might be given if the student discusses aspects of the definition.

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(b) Here, students are expected to recall the two broad categories of information systems (operations information systems and management information systems) before describing the more specific subcategories. The categories are given in the text and the appropriate table is reproduced here: Typical operations and management information systems Operations information systems

Management information systems

Transaction processing systems (TPS) Decision support systems Process control systems Information reporting systems Office automation systems Executive information systems

The table below offers a brief description of each category and provides a suitable example. Note that this material is derived directly from the text.

Descriptions and examples of the different categories of BIS: Category

Description

Example

Transaction processing systems

Involves recording and processing the data that results from an organisation’s business transactions.

The production of bills for utilities and other services.

Process control systems

Used to support and control manufacturing processes.

The use of sensors for real-time monitoring of production processes.

Office automation systems

The application of Using a word processor to information technology to produce business many of the common tasks correspondence. carried out in a typical office.

Decision support systems

Provide managers with information needed to support semi-structured or unstructured decisions.

The use of spreadsheet software to carry out what if? questioning.

Information reporting systems

Produce reports containing the information required to support a manager’s day-to-day decision-making activities.

Production of on-demand reports, such as current stock levels for a particular item.

Executive information systems

Used by senior management to select, retrieve and manage information that can be used to support the achievement of an organisation’s business objectives.

Personal information managers (PIMs) can be used to schedule meetings, make notes, store information on contacts and organise other items of information, such as personal expenses.

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(c) Students should describe the kinds of information systems used at each level of the organisation. Extra credit should be awarded if Figure 2.7 (p. 43) is reproduced.

This is a fairly broad area to cover within the confines of an examination, but a good response would make the following points: At the bottom level of the organisation, information systems are often concerned with the automation of routine tasks. Transaction processing systems are commonly used to increase the speed and efficiency of tasks such as processing payments and invoices. In manufacturing organisations, process control systems help increase efficiency by automating much of the production process and by helping maintain quality and consistency of output. The information systems used support managers by helping them organise, manage and process large volumes of data. As an example, a manager overseeing a production process might examine quality control information in order to ensure the smooth running of the process. In some cases, many millions of precise measurements might be reduced to several relatively simple charts so that the manager can observe trends and make decisions accordingly.

Managers at the middle level of the organisation carry out many of the tasks performed by operational and strategic managers. For this reason, they will use many of the information systems found throughout the organisation.

At the topmost level of the organisation, information systems are commonly used to help determine the organisation’s overall strategy. Here, information systems support decision-making activities by gathering together a body of information often drawn from a wide variety of sources. This information is then summarised and presented in a form appropriate to the task being undertaken. As an example, consider formulating a long-term pricing policy. Information might be drawn from a number of sources: production costs, competitor pricing, predicted demand for product (via market research), predicted costs of raw materials and so on. A number of different information systems might be used to gather all the information needed.

For example, a database might be used to retrieve information held by the organisation itself, such as production costs, while Internet software might be used to retrieve information held externally, such as competitor prices. Once gathered together, the information might be entered into a spreadsheet package so that a model or simulation could be constructed.

At the strategic level, information systems are also commonly used to improve personal efficiency. The personal information manager (PIM), for example, can be used to help managers schedule meetings, manage personal expenses and produce prioritised lists of tasks.

2.

Computer-based information systems are critical to an organisation’s survival in the modern competitive environment. Discuss this statement with reference to the following: (a) Porter’s competitive forces model and the basic competitive strategies that can be used to gain advantage; (b) how computer-based information systems can support these strategies; (c) how an organisation’s information resources can be used to create information leadership.

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(a) Students should list Porter’s five forces and describe each in turn. The ‘five forces’ are as follows: •

The threat of new entrants

•

The bargaining power of suppliers

•

The bargaining power of customers

•

The threat of substitute products or services

•

Rivalry among existing competitors.

Having provided a description of these forces, the student should then describe the major competitive strategies that can be used to gain competitive advantage.

Wherever possible, this material should refer back to Porter’s model. Some of the points that might appear include the following: •

As new companies enter a particular market, an organisation’s share of that market is likely to be reduced. In order to prevent this, organisations attempt to create entry barriers that limit the number of new entrants to the market.

•

By attempting to reduce costs as far as possible, an organisation can attempt to gain cost leadership. This provides two major benefits. First, the organisation can choose to lower prices in an attempt to force competitors from the market.

Second, more of the organisation’s resources are freed up, allowing it to pursue other strategies, such as investing in research and development as a means of stimulating business innovation.

•

The organisation may focus on a particular segment of the available market by differentiating its products from those of its competitors. For example, a car manufacturer may emphasise the quality of its vehicles so that it can focus on the luxury car segment of the market. Many organisations use product differentiation as a means of consolidating their positions in the market.

(b) Students should describe common methods of using information systems to gain competitive advantage. Such methods include: •

Improving operational efficiency

•

Raising barriers to entry

•

Locking-in customers and suppliers

•

Promoting business innovation

•

Increasing switching costs

•

Leverage.

(c) A good answer might include the following points: •

A common way of locking-in customers and suppliers is by establishing standards for computer-based information systems. The example of SABRE (American Airlines) might be referred to here. This approach also has the benefit of increasing switching costs.

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3.

•

High levels of automation tend to raise entry barriers since new entrants to a given market must invest heavily in computer-based information systems if they wish to compete effectively.

•

High levels of automation also provide the possibility of gaining information leadership, since the organisation is in a good position to exploit fully the data it already owns. Data mining might be given as an example in support of this point. In addition, the ability to exploit the organisation’s information resources can help promote business innovation.

•

As organisations automate more and more of their routine tasks, they may be able to adopt a strategy based on cost reduction. The sharp growth in telephone banking services provides a good example of this. Many such organisations have been able to automate a large proportion of the services offered to customers with the result that only a relatively small number of staff based in a call centre are required to handle an organisation’s workload. In turn, this has allowed these organisations to reduce the number of branches they operate, leading to further reductions in costs. In addition, students might make the point that transaction costs are lowered significantly by allowing customers to handle the majority of business transactions by themselves.

Large retail organisations employ a wide variety of computer-based information systems in order to support their activities. Considering a large supermarket chain, such as Sainsbury’s, you are required to: (a) define the term ‘computer-based information system’; (b) identify the types of computer-based information systems that are likely to be found within a typical branch. Your response should describe the function of each system identified and the category to which it belongs; (c) selecting one of the systems identified in (a), describe the system in more detail, identifying the hardware, software, data and people resources it employs.

(a) This task might be attempted in two ways. First, students might offer a general definition of an information system and suggest that a computer-based information system is a form of information system that makes extensive use of ICT (information and communications technology). The preferred definition for an information system (as given on p. 40) is: A business information system is a group of interrelated components that work collectively to carry out input, processing, output, storage and control actions in order to convert data into information products that can be used to support forecasting, planning, control, coordination, decision-making and operational activities in an organisation.

Alternatively, students can suggest that computer-based information systems make use of people resources, hardware resources, software resources and data resources in order to create information products. Each resource should be described briefly and students should provide examples where relevant. (b) The material dealing with Question 3 of the Discussion questions section for Chapter 2 contains information concerning the computer-based information systems that might be found in a typical supermarket. Students should attempt to place each

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system identified within one of the categories described in the text. A summary of these categories is given in Question 1(b) of this section. (c) Students should provide a relatively structured response to this task. The example in the table below uses a typical stock control system that one might expect to find in a supermarket branch.

Resources needed for a stock control system Resources

Examples

People resources

•

Stock control staff

•

IT staff

•

Sales assistants (using electronic tills)

•

Barcode readers (for checking stock on shelves)

•

Electronic tills

•

Terminals (for checking stock levels, etc.)

•

Printers (for reports, etc.)

•

Stock control software

•

Database (holding supplier details, etc.)

•

Company documents (e.g. policy on setting reorder levels)

•

Supplier details

•

Pricing information

•

Stock levels

•

Sales data

Hardware resources

Software resources

Data resources

4.

Draw a diagram illustrating the main components of a generic system.

Students should reproduce Figure 2.2 from the text (p. 35). Additional credit should be given if the student discusses each of the components drawn.

5.

Explain why feedback and control are important in business information systems.

The response should recognise two important points: •

Feedback is used to monitor the overall performance of the system.

•

Control is used to adjust the performance of the system.

Both elements are required in order for the system to adjust its performance/behaviour so that it can continue to meet its purpose (objective). It is rare to find a system that does not provide feedback and control mechanisms since this assumes that the system will always function at optimum performance.

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6.

Define an enterprise resource planning application. Name two main disadvantages of this type of approach.

Enterprise resource planning software provides integrated applications for major business functions such as production, distribution, sales, finance and human resources management. It is normally purchased as an off-the-shelf package that is tailored by a consultant. A single package typically replaces many different previous packages.

The main disadvantage of the use of ERP systems seems to be the high costs charged by suppliers due to the demand for this type of system. This high demand has also given rise to skills shortages. The other disadvantage of ERP systems is shared with all off-the-shelf systems, namely, that the business often has to change its processes or way of working in order to fit the way the software works. This may not present a problem if a company is looking to re-engineer its processes since, then, the ERP software can provide a framework.

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CHAPTER 3

Hardware and software Activities Activity 3.1 Legacy systems Using the Internet as a resource, find a case study that illustrates some of the problems that can result when companies are forced to retain legacy systems.

Alternatively, find a case study that illustrates some of the benefits that can be achieved by replacing legacy systems. You may find an industry publication such as Computer Weekly (www.computerweekly.com) a useful source of information.

This is a research-based activity. The aim of the activity is to reinforce some key points related to legacy systems. The two most important points are as follows: •

It is sometimes not possible to move away from a legacy system because so much has been invested in it, or the costs of implementing a new system are prohibitive.

•

New systems tend to be based around cheaper and more powerful equipment that is easier to use. This often leads to large cost savings across a range of areas, for example, training, maintenance, insurance and so on.

Activity 3.2 Advantages and disadvantages What are some of the disadvantages of printed bar codes and what are some of the advantages of RFID tags? Use the Internet as a resource and try to find at least three examples of each.

Benefits: •

Decreasing cost.

•

Requires no line of sight between tag and reader.

•

Allows tracking and monitoring of virtually everything that moves.

•

Provides real-time information on movement of stock in supply chain permitting quick response.

Disadvantages: •

Costly compared to bar codes.

•

Limited range between tag and reader – a few metres.

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Activity 3.3 Selecting input devices Using the criteria described in this section, select the most suitable type of input device to perform these functions: •

entry of an application for a loan, received on a paper form, into an operational system for processing loan applications;

•

entry of details of a house into a system for estate agents;

•

entry of details collected in a ward visit by a hospital consultant;

•

a field map from a geologist’s survey into a mapping system.

The suitable devices for each of these functions are listed below: •

Entry of an application for a loan, received on a paper form, into an operational system for processing loan applications. An optical scanner should be used for scanning in forms. A barcode reader may also be used to identify details of the loan application.

•

Entry of details of a house for entry into a system for estate agents A manual keyboard will be typical for house details, with a digital camera used for photograph(s).

•

Entry of details collected in a ward visit by a hospital consultant A touch screen accepting information from a stylus is increasingly used in these applications.

•

A field map from a geologist’s survey into a mapping system An optical scanner would give a crude representation. A graphics tablet would be used for a more accurate representation.

Activity 3.4 Selecting output devices Using the criteria described in this section and using numerical specifications, select the most suitable type of screen output device and configuration to perform these functions: •

a business analyst involved in using a spreadsheet to model a company’s financial performance;

•

a student using a PC to produce assignments;

•

a website designer;

•

a personal assistant to the director.

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Note that Table 3.3 on p.123 may also be useful for this activity. The suitable devices for these functions are listed below: •

A business analyst involved in using a spreadsheet to model a company’s financial performance: A graphics card supporting a reasonably high resolution of 1200 by 768 pixels would be appropriate.

•

A student using a PC to produce assignments: For basic word-processed assignments, a standard resolution of 800 by 600 pixels will be adequate and is supported by all modern graphic cards.

•

A website designer: An SVGA monitor and card (1600 by 1200 pixels) supporting photorealism (16 million or 32 million colours).

•

A personal assistant to the director: Similar to those for the student using a PC to produce assignments.

Activity 3.5 Selecting printers Using the criteria described in this section, select the most suitable type of printer for these applications: •

a student on a business course with a limited budget;

•

a shared workgroup printer for ten people;

•

proofing magazines;

•

printing duplicate copies of invoices.

The suitable devices for each of these functions are listed below: •

A student on a business course with a limited budget: An inkjet printer will provide reasonable quality for assignments, will be relatively economical and the low print speed will not be a problem.

•

A shared workgroup printer for 10 people: A laser printer will be required for the throughput required.

•

Proofing magazines: A colour laser printer will be required.

•

Printing duplicate copies of invoices: An impact device such as a daisy wheel printer is required.

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Activity 3.6 Hardware selection Using the criteria described in this section, select the most suitable type of storage device (with numerical specifications) to perform these functions: •

a backup device for a student working on their dissertation;

•

a backup device for a designer transferring large files between their home and work offices;

•

a graphic designer who requires large graphics to be held in memory;

•

web pages on a web server.

The suitable devices for each of these functions are listed below: •

A backup device for a student working on their dissertation: A USB dongle (1GB) or a CD-Recordable or Rewritable (640 Mb capacity).

•

A backup device for a designer transferring large files between their home and work offices: A USB dongle (1GB) or a CD-Recordable or Rewritable (640 Mb capacity).

•

A graphic designer who requires large graphics to be held in memory: 256 Mb RAM minimum.

•

Web pages on a web server: Magnetic disk storage usually measured in gigabytes.

Activity 3.7 Selecting processors Since this book was published, the clock speed of processors will have increased significantly. Using a site that reviews hardware such as CNet (www.cnet.com) or ZDNet (www.zdnet.com), select the best processor specifications for: •

an entry-level (’cheap and cheerful’ basic) PC;

•

a high-end PC for a graphics designer;

•

a web server.

No solution required.

Activity 3.8 The interaction between hardware and software Develop an explanation for the purpose of an interaction amongst hardware, systems software and applications software to someone who is unfamiliar with them. To help the explanation use an example based on the creation of a 49 .

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spreadsheet to calculate wages based on hours worked, refer to Figure 4.2. Start your description with when the PC is first switched on.

When the PC is first switched on, the BIOS systems software will be activated from ROM hardware as part of the boot (start-up) process. The BIOS will start the operating system software (Windows, Linux, etc.) loading. The users will then select which applications software they want to use or the operating system may have been set up to load commonly used applications such as Microsoft Word on start-up. Both systems and applications software will be loaded from the disk storage and loaded into RAM memory. The users will then select their own documents to work on.

Activity 3.9 Internal and external documents Internal documents can include inter-office memos, reports and summaries, such as minutes of meetings. External documents can include invoices, sales brochures and correspondence. Using these examples, identify some of the other characteristics of internal and external documents. Are any of the characteristics identified common to both internal and external documents?

External documents are a method of formal communication. These documents will tend to have the following characteristics: •

Often used to support communications with customers and suppliers

•

Have an emphasis on presentation

•

Use formal language

•

Usually highly structured, for example, an invoice may be based on a standard template.

Internal documents are often used as a means of informal communication. Some typical characteristics of these kinds of documents include the following: •

Normally used to support internal communications, typically as a means of passing information from one part of the organisation to another

•

Comparatively little emphasis is placed on presentation

•

Tend to use less formal language

•

Tend to be less structured, although many organisations have a preferred format for certain documents, such as internal memos.

Students should also refer to the attributes of information quality described in Chapter 1.

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Activity 3.10 Word processing We have described some of the key features of a word processor. How should the owner–manager of a small business with 10 staff using word-processor software ensure they work efficiently to produce good-quality standard internal and external documents?

For external documents, the company will want to present a consistent, quality image.

To do this, the letters produced and sent out from the company should have some of the key aspects of information quality introduced in Chapter 1, namely, they should be: •

accurate – no spelling mistakes or factual errors;

•

complete – no omissions;

•

clear – unambiguous and well laid out.

To achieve this, layout and style standards can be enforced using a word processor such as Microsoft Word. For example, different types of letters such as invoice or dispatch notification to customer can each have their own Word template (.dot). Standard Word styles can be used for the company and a standard logo can be used. Each letter should be spelt or grammar checked before it is sent. Training or education is then needed to explain to staff that the templates are needed and checks would have to be periodically performed to check whether they were used. For internal documents, similar procedures can be used, for example, for minutes of meetings. More sophisticated tools for reviewing and annotating documents such as a budget could also be used.

Activity 3.11 E-mail What are the benefits of web-based e-mail services, like those offered by Yahoo! and MSN, for home users? Why are companies unlikely to use these services for business purposes?

Students are encouraged to think about the strengths and weaknesses of these services.

For home users: •

These services are usually free or available at very low cost.

•

E-mail can be accessed from any computer, enabling users to read or respond to messages in libraries, cybercafés, schools, universities, etc.

•

Most services are easy to use.

•

Most services offer enhanced features, such as automatic virus scanning.

Note that many free e-mail providers restrict the use of their services for business purposes. For business users: •

The service is not controlled by the company. This can lead to a wide variety of problems, for example, the company cannot monitor or control staff use of e-mail.

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•

The service may not be reliable. Many companies rely heavily on e-mail for internal and external communications. Service disruptions could result in significant losses through lost productivity, loss of customer confidence and so on.

•

The service may not be secure.

•

The service cannot be customised to meet the company’s needs. Even if it can, this may be very expensive.

•

The company’s image may be harmed by its use of ‘free’ services.

Activity 3.12 Web addresses Using the simple web page design tools included with packages such as Internet Explorer and Netscape Navigator, produce a simple web page containing your CV. If possible, make use of colour, different typefaces, graphics, horizontal lines, bullet points and other features. When you have created the page, save it and then view it from within the web browser. View the source for the web page so that you can see how the design of your page has been translated into HTML. No solution is required for this activity.

Activity 3.13 Web 2.0 1.

Find two examples for each of the rules proposed by Chris Anderson.

2.

List the advantages of Google AdWords for small businesses.

3.

‘The “long tail” is good for retailers and good for customers’. Discuss.

1. This activity is intended to test if students understand the principles behind the concept of the ‘long tail’.

Rule 1: Make everything available It is not always necessary to focus on retailing the most popular products; opportunities exist to generate revenues by supplying a wide variety of niche items. In other words, companies can choose to sell large quantities of a small range of items, or smaller quantities of a large range of items.

Examples of this rule include Amazon and iTunes. Amazon’s online catalogue allows customers to choose from hundreds of thousands of books. Customers can buy almost any title in print, including rare or difficult-to-find items. The iTunes Store operates on a similar principle. As well as supplying popular music tracks, such as chart singles and albums, iTunes also provides access to a back catalogue of hundreds of thousands of tracks.

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Rule 2: Cut the price in half. Now lower it.

Lower prices are needed to encourage customers to buy goods and services online.

Companies can offer such discounts to customers because retailing via the Internet reduces operating costs significantly. In addition, unlike physical products, goods and services supplied electronically cost little to produce. The cost of creating a copy of one or more MP3 music tracks, for instance, is negligible.

Examples of this rule include the iTunes Store and services such as British Telecom’s Vision On Demand or Channel 4 Television’s 4oD services. The iTunes Store allows customers to buy music tracks – including entire albums – for much less than the cost of a CD bought from a bricks-and-mortar store. Customers can ‘rent’ music or can make permanent copies by burning tracks to CD using their own equipment. Both British Telecom and Channel 4 provide a similar service in relation to movies, music videos and television shows. Customers select a programme to watch which is then downloaded to the hard disk of a PC or PVR (personal video recorder). Downloading a programme costs only a fraction of buying or renting a DVD and customers can choose to make a permanent copy of a favourite programme, if they wish.

Rule 3: Help me find it Offering a wide range of products raises the problem of helping customers to find the things they want or need. What good is iTune’s catalogue of six million songs, for example, if customers can’t locate the tracks they want to buy?

Amazon provides a range of tools aimed at helping customers find the books they want.

Some examples include: •

Lists of recommended books produced by other customers. As an example, fans of a particular author might create a list of their favourite books and add brief comments.

•

A tool that produces personalised recommendations based on previous purchases and other information, such as the customer’s likes and dislikes.

•

Lists of popular books sorted by genre, for example, crime, romance and thriller.

eBookers (www.ebookers.co.uk) is a site that helps customers find flights, hotels and package holidays. Like Amazon, the site has a specialised search tool that allows customers to search for holidays based on their specific requirements. The site also has other features intended to help people find suitable products, such as lists of themed holidays and last-minute bargains.

2. This activity is intended to get students thinking about new business models made possible by the Internet. AdWords and AdSense are good examples of innovations that have transformed the way in which products are marketed via the Internet.

Some examples of benefits related to AdWords and AdSense include: •

Advertising can be targeted with greater accuracy than ever before. This is because adverts are selected and displayed on the basis an individual user’s Google searches.

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•

Since advertising can be targeted more accurately, it becomes economically viable to market products and services to niche groups.

•

Companies have a high degree of control over the costs associated with an AdWord campaign. This makes it easy to set, monitor and control budgets.

•

Detailed information about the efficiency of an AdWords campaign can be collected (and even analysed) automatically. The information gathered is very rich, enabling the campaign to be ‘fine-tuned’ easily. Gathering information in this way is usually described as analytics.

•

Start-up costs for AdWords campaigns are very low, making them accessible to companies of any size.

•

Allows new ways of marketing, for example, use of affiliate marketing.

•

Spending on advertising is more closely linked with results (e.g. in affiliate marketing, affiliates get paid according to how many products they sell).

3. As before, this activity is intended to test if students understand the principles behind the concept of the ‘long tail’. Students are asked to identify some of the key benefits of the ‘long tail’. Some typical examples are as follows: Retailers

Customers

•

Can offer greater range of products, enabling diversification

•

Access to a wider range of products

•

Can reach more customers, including niche markets that were previously unprofitable

•

Increased competition leads to lower prices and better service

•

Easier to locate/source products, including rare/niche items

•

Physical location no longer important – can buy goods from anywhere in the world

•

Allows a shift away from stocking only the most popular products, helping to reduce competition

•

Offering more products that serve the customers better

•

Encourages innovation, for example, in finding new ways to market products

Activity 3.14 Different software types To check your knowledge of the different types of software introduced in this chapter (and Chapter 4), match the descriptions of software above with the specific types of software below.

Software descriptions 1. Allows you to create and edit company reports.

2. Finds information for an assignment from the World Wide Web.

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3. The use of icons, bars, buttons and other image displays to get things done.

4. Sends information to a computer user in another country.

5. Creates and displays a worksheet for analysis.

6. Manages and supports the maintenance and retrieval of structured data.

7. Manages and supports telecommunications on a network of computers.

8. Detects and removes viruses.

9. A program or set of programs that controls the computer hardware.

Software types (a) Spreadsheet; (b) graphical user interface (GUI); (c) operating system; (d) a search engine such as Google accessed through a web browser; (e) Norton AntiVirus Kit; (f) word processor; (g) e-mail package; (h) Novell Netware (a network operating system); (i) relational database management system (RDBMS) Solution: 1 (f), 2 (d), 3 (b), 4 (g), 5 (a), 6 (i), 7 (h), 8 (e), 9 (c).

Case studies Case study 3.1: Intel, Microsoft: too PC Discuss the future of the PC. Although sales are still high for Pcs, they have levelled off due to the rise of mobile devices. Microsoft profits have historically been made on the Windows for PC software and the associated business software such as Office which runs on Windows. Mobile computing has led to alternate operating systems such as Android and Apple iOS which has undermined Windows dominance. Intel is also tied to the PC as it has failed to develop market share in the chips for mobile devices.

However both companies have the potential to use their current size and expertise to develop markets in cloud computing and the IoT. The threat is developments such as AI accelerate the decline in PC use and thus reduce revenues before the new market areas have been fully developed.

Case study 3.2 Digital privacy is more than just opting in or out What are the potential benefits and problems with the use of personal data by Internet companies?

The benefit of the use of personal data is that customers can be targeted with products and services that they would be actually interested in. It also allows software such as Facebook to be available for ‘free’ to consumers.

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The problem is with the collection of personal data collated from a number of sources without the user being fully aware of what data is being collected. There is also the possibility that this data can then be sold on to third parties for various uses.

Exercises Self-assessment exercises 1.

In addition to ‘Smart Pause’, describe at least three other features offered by devices with eye tracking technology.

Eye tracking can tell whether users are looking at the screen, reading information or scanning information. It can also show the intensity of the user’s attention and can determine whether a user is searching for specific information.

2.

In terms of developing more powerful tablets, why are advances in battery technology just as important as advances in microprocessor technology?

Battery technology has a large effect on the size of the device and on the usage time of a device before it needs recharging. The battery also limits the amount of power that can be utilized by the microprocessing circuitry.

3.

Which type of printing technology is best suited to the production of the following documents? (a) a business letter (b) a program listing (c) a chart or diagram, printed in colour (d) an internal memorandum (e) an engineering diagram.

(a) Laser printer (or inkjet printer) (b) Dot-matrix printer (or inkjet printer) (c) Inkjet printer (or colour laser printer) (d) Inkjet printer, laser printer (or dot-matrix printer) (e) Plotter.

4.

Which input device is best suited to the following tasks? (a) entering the details of bank cheques; (b) entering data from multiple-choice test papers; (c) entering data from labels or price tags; (d) entering a diagram, picture or photograph; (e) entering the text of a letter.

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(a) Magnetic ink character recognition (MICR) (b) Optical mark reader (OMR) (c) Barcode reader (d) Optical scanner (e) Optical character recognition (via optical scanner).

5.

Describe some of the major characteristics of mainframes, minicomputers and personal computers.

The table below contains a number of general points concerning the major characteristics of mainframes, minicomputers and microcomputers: Mainframe

Minicomputer

Microcomputer

•

Large physical size.

•

Very powerful.

•

Small physical size.

•

Extremely powerful.

•

•

Relatively inexpensive.

•

Commonly used for large-scale data processing.

•

•

Considered expensive to purchase, maintain and operate.

Can be programmed using more modern and sophisticated tools than those available for mainframes.

Suitable for wide range of applications but considered unsuitable for largescale data processing.

•

Considered easier to use than mainframe or minicomputers.

•

Programming systems enable nontechnical users to develop their own applications.

•

•

Requires a carefully controlled environment.

•

In terms of physical size, smaller than mainframe computers but larger than microcomputers.

Less expensive than mainframes but still beyond the reach of most small organisations.

•

Little direct interaction with users; users work with terminals.

•

Programs written at low level, using punched cards etc.

6.

How can network computers help reduce the cost of ownership?

Students should first refresh their memories as to what is meant by ‘cost of ownership’.

From the text: ‘The cost of ownership describes a range of different expenses incurred by purchasing and maintaining a computer system. Such costs include the original cost of the hardware and software, upgrades, maintenance, technical support and training’.

The main ways by which network computers can help reduce the cost of ownership are as follows: •

Network computers are relatively inexpensive to buy, maintain and replace.

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•

The concept of zero administration considers that network computers can be configured and managed via a central network server. In this way, administration costs can be minimised to a point where they become almost negligible.

•

Network computers are normally used to service a small number of specific applications. In view of this, training and support costs can be reduced significantly.

7.

List at least three common pointing devices.

Some typical pointing devices include the mouse, the light pen and the trackball.

8.

What is the meaning of each abbreviation or acronym listed below? Provide a brief explanation for each of the items listed. (a) MICR (b) RAM (c) BIOS (d) CD-ROM (e) CPU (f) OCR (g) COM (h) PDA (i) ROM (j) DVD

MICR – magnetic ink character recognition: used to interpret characters printed in a special magnetic ink.

RAM – random access memory: the volatile, ‘working’ memory used by a computer system.

BIOS – basic input–output system: the BIOS contains software that controls all of the computer’s most basic activities.

CD-ROM – compact disc-read only memory: a computer storage device offering a relatively high capacity. Compact discs are read-only media.

CPU – central processing unit: a microprocessor that controls all of the computer’s main functions and enables users to execute programs or process data.

OCR – optical character recognition: in general, describes a type of software that is used in conjunction with an optical scanner. The software accepts a scanned document and attempts to interpret printed or written characters.

COM – computer output to microfilm: normally used to archive large amounts of information. Information is sent directly from a computer to a device that produces microfilm negatives. COM can also be used to refer to the serial (or communications) ports found on a typical personal computer system.

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PDA – personal digital assistant: can be considered equivalent to an electronic personal organiser.

ROM – read only memory: a form of non-volatile computer memory, making it an ideal means of storing the information needed for a device to function properly.

DVD – digital versatile disc: similar to CD-ROM but with higher storage capacities, typically between 4Gb and 7Gb, which is accessed at higher speeds than a CD-ROM. 9.

What are some of the benefits of flash drives?

Some of the benefits include the following: •

Very small size

•

No moving parts, so robust and unlikely to break down

•

Relatively cheap

•

High storage capacities compared with other media, such as floppy disks

•

Fast transfer speeds compared with other media, such as floppy disks

•

Devices can be locked so that data is not deleted accidentally

•

Does not need a power supply of any kind (draws power from computer when necessary)

•

Retains data for up to ten years

•

Can be connected to other devices easily (e.g. PDAs and other types of personal computer and compatible with both IBM PC and Apple Macintosh systems).

Does not need any special software to work with; automatically recognised by most personal computers.

10. Produce your own definitions of the following terms: (a) software (b) operating system (c) graphical user interface (d) productivity software (e) personal information manager. (a) Software can be defined as a series of detailed instructions that control the operation of a computer system. Software exists as programs that are developed by computer programmers. (b) The operating system interacts with the hardware of the computer at a very low level in order to manage and direct the computer’s resources. The basic functions of

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the operating system include: allocating and managing system resources, scheduling the use of resources and monitoring the activities of the computer system. (c) A graphical user interface (GUI) allows users to enter instructions using a mouse.

The mouse is used to issue instructions using menus and icons. The term WIMP (windows, icons, mouse and pull-down menus) is often used to describe this kind of environment. (d) General-purpose applications, often known as productivity software, aim to support users in performing a variety of common tasks. (e) A personal information manager can be thought of as an electronic personal organiser. The program allows users to store, organise and retrieve personal information such as appointments, personal expenses, telephone numbers and addresses, reminders and to-do lists. These programs help managers to make more effective use of their time by helping them to schedule appointments, organise meetings and record important information.

Discussion questions 1.

Will network computers and thin clients make personal computers obsolete?

Using relevant examples, make a case for one side of this argument.

Some of the arguments that might be discussed are given below: •

Network computers are the point at which computer technology and television converge. As interactive television becomes more popular, consumers will begin to see network computers in the same way as video recorders and satellite receivers.

•

Compared to a typical personal computer, network computers have limited functionality. Since there is sometimes only a small difference in cost, consumers are likely to opt for a more flexible and more powerful personal computer. This argument also applies to thin clients.

•

To date, network computers have failed to make an impression on the consumer electronics market. They are still considered expensive luxuries and have yet to deliver a ‘killer app’.

•

Network computers are able to deliver some services more effectively and at lower costs than other methods. Video telephony, for example, is awkward and expensive to provide via a personal computer. Such applications will ensure the success of network computers. This argument also applies to thin clients.

•

As technology progresses, it becomes possible to build dedicated devices that offer levels of power and sophistication similar to that of a personal computer. Since these devices are often multifunctional and are relatively cheap to buy, they are likely to replace the need for a personal computer for many people. A good example is the mobile telephone; recent models provide the ability to transmit pictures, access the Internet, manage appointments and so on. Although the primary purpose

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of the telephone is communication, it can also serve other purposes, such as allowing users to play games or access information services.

2.

You intend to purchase a personal computer to help with your studies. You have decided to create a weighted ranking table to help you choose a suitable system. What criteria should be used for selection and how should each item be weighted?

In the order of importance, some of the criteria that might be used include the following: •

Cost and purchasing options (e.g. finance)

•

Ease of use

•

Warranty and support

•

Compatibility with the institution’s systems

•

Availability of support materials, such as books.

3.

Despite still being functional, an obsolete computer system is of little value to a business organisation. Organisations should continually upgrade or replace systems in order to keep abreast of changes in technology. Make a case in favour of or against this argument.

Although this is a relatively complex area, students might consider some of the following points: •

All organisations undertake a cycle of improvement and replacement for their computer systems. In a college or university, for example, all of the institution’s hardware and software might be replaced or renewed during a five-year cycle. In view of this, it could be said that organisations already ‘.continually upgrade or replace systems in order to keep abreast of changes in technology’.

•

Changing an existing system or adopting a new one carries a number of risks; for example, a large financial outlay may be required to purchase the new system. Such risks are unacceptable when the potential gains to be made are unclear or uncertain.

•

Although the hardware and software used by an organisation may be obsolete, it would be difficult to prove that obsolescence automatically renders a given system worthless. A fully functional system, no matter how old, will have an intrinsic value to an organisation. Consider the following: what expense would be involved in carrying out a given set of tasks without the system? If the system performs such tasks more quickly, more accurately or less expensively, then it has a clear, quantifiable value.

•

Although a new system may carry out tasks more quickly or more accurately than an existing system, it may still not be viable in financial terms. The costs associated with implementation may be so high that they outweigh any benefits gained by adopting the system.

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•

New hardware and software often allow an organisation to maximise the use of its data resources. The ability to use data-mining software, for example, might allow the organisation to realise cost savings or identify new products and new markets.

•

In general, as technology moves forward, the expense involved in purchasing new hardware and software tends to decline. A system that might have cost many thousands of pounds five years ago may be available for just a few hundred pounds today. In many cases, it may be possible to adopt a new system for less than the cost of upgrading an existing one.

4.

‘The results from search engines cannot be relied upon’. Carry out any additional research you need in order to discuss whether or not you think this statement is true.

This question attempts to get students to learn a little about how search engines work and how the information they return can be influenced by advertisers and others. Some of the ideas students might expect to discuss include the following: •

Many search engines use meta-tags (special key words embedded in a web page) and the content of the index page (the first page on a website) to determine where the page or site should be listed and what ranking it should be given (position in the list of results). Manipulating these variables can affect the overall position of the page or website. This means that relevant and informative sites might appear far down the list of results because meta-tags are not used, or the index page is not indicative of the content of the site. In addition, people can make their pages appear higher in the list of results by adding suitable meta-tags or altering the content of the index page – even if the site is not relevant to the topic being searched for.

Adult websites often use this method to get listed in the results for even the most innocuous searches. A search for information on a celebrity, for instance, will often return links to sites containing pornography.

•

Some search engines accept a fee in order to highlight/emphasise a particular company or product. As an example, a search for ‘coffee’ might return a list of results where the entry for a particular company or brand is highlighted. In the past, companies paid to have their entries appear as the first item in a list of results.

However, this practice was frowned upon by the public and seems to have all but disappeared. Instead, companies now pay for sponsored links that are clearly marked and appear separately from the list of results.

Students should also pick up on some general points: •

Search engines need to update their records on a given site from time to time. This is often achieved by re-indexing the website at regular intervals. However, if too long a time is left before revisiting a site, the content of the site might have changed, or the site could even have disappeared completely.

•

The method used to index a website is important since this will influence whether or not it appears when a search is carried out for a particular word or phrase. If the criteria used to index sites are too liberal, the results of searches will contain lots of irrelevant items. On the other hand, if the criteria used are too strict, some sites may never appear at all. As users, it can be very difficult to judge whether or not a search engine has achieved an appropriate balance. After all, how do we know that the 62 .

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sites returned by a search are the most appropriate ones? It may well be that the most appropriate sites have not been indexed at all or were ignored by the search.

•

Some sites will not appear in search engine listings because the owners have chosen not to be listed. It is possible to include special tags in a web page that instruct the ‘robots’ used by search engines not to include the page or site.

•

Occasionally, a site will not be listed by a search engine because the content of the site is dynamic and changes often. On other occasions, the information held on the site may be almost constantly out of date because the site changes frequently.

All of these points should help convince students that search engines do not necessarily provide the most accurate and reliable information. As shown, many different factors act to manipulate search results.

Please note that the explanations given within these notes have been simplified to make them easier to follow. There are many different ways of manipulating search engine rankings and some involve very sophisticated techniques, such as profiling traffic to websites, or using lexical analysis to adjust the content of web pages.

5.

Why do you think XML is considered to be of great importance to business organisations?

This question invites students to list the advantages of XML and discuss a wide variety of issues, ranging from developments in the software industry to competitive strategy.

Some of the major benefits associated with XML are as follows: •

XML is supported by a wide range of existing applications. All modern web browsers, for example, support XML. This means that XML documents can be created and distributed without the need to purchase or install additional software.

•

A large number of development packages already feature support for XML. Such packages range from conventional programming languages, such as Visual Basic, to web-authoring software, such as Front Page.

•

XML is extremely flexible. If a feature does not exist, it can be created and added to the ‘core’ language. This enables XML to be used for an extremely wide range of purposes, from controlling the content of a web page to sophisticated database applications.

•

XML encourages users and developers to work in a structured way.

•

XML can be used across a wide range of technologies. In terms of information technology, XML can be used across different processors and operating systems with little difficulty. This means that the same basic material can be used on Windows computers, UNIX systems and even WAP mobile phones.

•

XML can be used to work with both existing and legacy data.

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use XML as the basis for their EDI systems. There are three main reasons for this rapid growth in the use of XML: first, it provides an efficient and simple way of ensuring compatibility across organisations and systems; secondly, the costs associated with using XML are considered relatively low and, finally, XML provides sufficient flexibility to meet a wide variety of requirements.

Organisations will need to move towards XML for several reasons: •

In order to ensure that systems remain compatible with those of customers and suppliers.

•

In order to remain competitive, organisations will need to match the actions of competitors by reducing costs, developing new services, and so on. Early adopters have already begun to see benefits obtained by adopting XML technology.

•

In order to meet the demand for new products and services, as an example, WAP technology has created a great deal of demand for personalised news and information services. XML offers a way of providing such content at relatively low cost.

Microsoft’s next generation of operating systems and applications software will be based around the use of XML. Users wishing to upgrade operating systems and applications software will need to migrate to XML technology (Microsoft calls this their .Net strategy). Given that Microsoft owns the majority of the markets for operating systems, development tools, office applications and Internet browsing software, the move towards XML will impact on most individuals and organisations.

Essay questions 1.

How is convergence communications?

affecting

home

entertainment

and

personal

This question is intended to encourage students to look at the ever-growing range of products and services that are starting to appear across Europe. In general, all of these new products and services have been made possible by drawing on advances made in the area of computing. In almost every case, computer technology has been used to enhance things that already exist rather than create completely new and innovative products. PVRs, for example, are basically sophisticated video recorders. Similarly, the MP3 player is little more than a variation on the original Sony Walkman introduced in the 1980s. Some of the areas students should discuss are listed below. Students should focus on the new and enhanced features/facilities offered and their benefits to users. A good answer will consider most or all of the following: •

The introduction of interactive television services, such as ‘live’ voting, interactive schedules (with reminders, etc.), news services (where viewers can select the news they want to watch) and so on.

•

Personal communications – for example, mobile phones with built-in Internet and e-mail access, GPRS (so that the phone’s location can be determined), streaming media (e.g. MP3 music and video), PDA functions (e.g. expenses and appointment

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scheduling), the inclusion of Bluetooth (allowing wireless hands-free kits, connection to a PC, etc.) and so on.

•

Media centre PCs that function as a PVR, DVD player, CD player and MP3 player.

These systems also offer the ability to connect to other computers or the Internet so that they can locate, download and play streaming media (such as movies, Internet radio, etc.).

•

The introduction of PVRs with sophisticated features, such as the ability to record every episode of a given program, even if the broadcast time is changed at short notice.

2.

You have been asked to produce a guide to buying a personal computer by a fellow student on your course. The student has a budget for hardware of £1000. Avoiding technical terms as far as possible, produce a guide that addresses the following: (a) Produce a detailed specification for a personal computer system. You should describe the system in terms of the input, output and storage devices needed. Justify any choices made and explain any technical terms used. (b) Select at least two computer systems that meet the requirements specified.

Evaluate each of the systems in turn and make a recommendation to the student. (c) Provide a realistic costing for the chosen system. Ensure that any ongoing costs are included.

(a) This first task is intended to demonstrate the student’s understanding of computer hardware. Students would be expected to carry out this task without resorting to technical jargon. Ideally, the student should explain each of the items listed in the specification. Although any explanations should be kept brief, they should describe what the item is, why it is needed and why they have selected the particular item listed. As an example, a student might list a hard disk drive with a 20 GB capacity.

An appropriate explanation might be as follows: ‘A hard disk drive is needed to store the programs and data that will be used by the computer. The capacity of a hard disk drive is measured in GB (gigabytes) – a gigabyte is equivalent to approximately 1,000 MB or the equivalent of one billion characters. Since the operating system and applications software used may take up as much as 2 GB of storage space, a drive offering 20 GB will provide additional space for data and new programs to be added in the future’.

Since new hardware products are launched at alarmingly frequent intervals, it is difficult to provide a sample specification for a computer system. However, at the time of writing, the table below would be appropriate for a typical computer system:

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Typical PC specification: Processor

1 GHz or higher (AMD or Intel)

Memory

256 Mb RAM

Hard Disk Drive

20 Gb

Monitor

17" digital

CD-ROM Drive

50 speed

Graphics Card

32 Mb ‘Accelerator’

Floppy Disk Drive

Standard 1.44 Mb

Sound Card

16-bit SoundBlaster-compatible

Keyboard

Windows 95 keyboard

Mouse

Standard serial mouse

A good response will consider a number of additional factors, such as the number of expansion slots available on the computer and whether or not a backup storage device (such as a CD-writer) is included. (b) In order to evaluate the systems selected, the student should identify a number of selection criteria and then apply these equally to both systems. Considering the needs of a typical student, some of the factors that should be considered include: •

Initial purchase cost

•

Ability to expand and upgrade the system in the future

•

Inclusion of appropriate software bundle with system

•

Inclusion of all necessary items, for example, a printer to print out assignments

•

Ongoing running costs

•

Compatibility with the hardware and software used at the institution they attend.

(c) The cost of the chosen computer system should be realistic in that it is within the means of an average undergraduate student. At the time of writing, a system costing between £500 and £1,000 would meet the needs of most students. This means that students should have no difficulty in locating a variety of systems within the (£1500) budget set.

Particular attention should be paid to the running costs associated with buying a personal computer since this will emphasise the concept of cost of ownership. Some of the areas that students might consider include the following: •

Printer ink or toner cartridges

•

Paper

•

Floppy disks

•

Repairs and maintenance

•

Increased insurance premiums

•

Training (for example, in the form of an evening class) 66 .

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•

Books, manuals or other training and reference materials

•

Electricity costs

•

Telephone charges (if a modem is used)

•

Cables and connectors (for example, if a printer is supplied without a suitable cable).

Ideally, students should mention the cost of the consumables used and estimate how often they will be purchased. It would be unrealistic, for example, for a student to suggest that they would need only a single ink or toner cartridge each year.

3.

Voice recognition systems have begun to gain popularity with both business and home users. However, such systems still suffer from a number of limitations that restrict their overall effectiveness. Conduct any research necessary to produce a report that addresses the following tasks: (a) Provide an overview of voice recognition technology and describe how such systems operate. (b) Provide a balanced view of the advantages, disadvantages, strengths and limitations of voice recognition systems. (c) Explain some of the uses to which voice recognition systems can be applied. Pay particular attention to the business applications for this technology.

(a) A description of current voice recognition technology need not be complicated. If necessary, students may base their responses on some of the commercial software packages currently available, such as IBM’s Via Voice.

Some of the areas that should be covered include the following: •

In addition to a personal computer system, the basic equipment needed for voice recognition includes the following: a high quality microphone that minimises distortion and does not pick up excessive background noise; a sound card to capture the user’s speech; voice recognition software that interprets spoken instructions and reacts accordingly.

•

If it is to be effective, voice recognition needs to be carried out in ‘real time’, that is, as a person actually speaks. Clearly, such an intensive task requires a relatively powerful computer system.

•

Voice recognition software works by comparing the user’s speech with material held in a dictionary of words. Special rules are used to identify the context of a word or phrase. For example, if the user said ‘give this to me’, the software should correctly identify the word ‘to’ and not substitute with ‘too’ or ‘two’.

•

Special command terms are used so that the software understands if text is to be entered into a document, if a command is to be performed or if the program should ignore the user’s speech temporarily. As an example, one particular program (VoicePad) uses the command term ‘listen to me’ to tell the recognition software that the user is about to issue a command or dictate text.

•

Voice recognition software often needs to be ‘trained’ so that it can respond to a specific individual’s way of speaking. The training process allows the software to account for regional or foreign accents, pronunciation and other differences.

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•

Voice recognition software is not considered reliable and accurate; even the most sophisticated packages have accuracy rates of below 95%. Since the dictionaries used by these programs seldom contain specialised or technical vocabularies, accuracy is often reduced further when professional or technical terms are used. However, it is possible to compensate for this to an extent by training the software further.

(b) Some of the advantages and disadvantages of voice recognition systems include the following: •

Until quite recently, even the simplest voice recognition system could cost several thousand pounds. Since the mid-1990s, however, the cost of the hardware and software needed for such systems has declined significantly.

Today, it is possible to acquire suitable software for use with a typical personal computer system for well below £100.

•

Many voice recognition systems are susceptible to problems caused by loud background noises and other forms of interference. As an example, it would be almost impossible to use current voice recognition systems in noisy environments, such as building sites or production lines.

•

Since most voice recognition packages require ‘training’ in order to improve accuracy, they are not suitable for applications where the voices of a number of people need to be recognised. Although it might be feasible to train the software to work with a relatively small number of people, this would not be possible in the case of an organisation such as a bank or supermarket. Despite this, voice recognition can be used in circumstances where only a limited number of words need to be recognised. British Telecom, for example, uses voice recognition to automate many of the services offered to customers. This is effective because customers use a very limited number of words when interacting with the system (numbers from one to ten and simple ‘yes’ or ‘no’ responses).

•

Since voice recognition involves a number of highly intensive processing tasks, such systems tend to limit the speed at which the user can issue instructions or dictate text. This means that users must learn to speak in slow, measured tones that can be difficult to achieve consistently.

•

In many cases, voice recognition systems make poor substitutes for human employees. In the case of dictating a letter, for example, a secretary using shorthand might be able to transcribe speech at speeds of 120 words per minute or more. A typical voice recognition package might be limited to a speed of 45– 60 words per minute.

•

The main requirements of voice recognition – a powerful computer system and large amounts of storage space for dictionaries and the software – make it difficult to use this technology within a variety of applications. In many cases, although it may be technically possible to implement voice recognition, it is simply too expensive to do so.

(c) Some examples of applications for voice recognition systems include: •

Telephone answering services. Typically, the telephone is answered automatically and users are offered a menu of numbered choices or asked a series of structured questions. Voice recognition is used to interpret the user’s responses. Banks, colleges and universities, insurance companies, telephone 68 .

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service providers, hardware manufacturers, software companies and a range of other organisations all make use of this kind of system.

4.

•

Prototypes of security systems based on voice recognition techniques already exist and commercial products are under development. Such systems attempt to match the unique aspects of an individual’s speech patterns to representative samples stored within a database. This kind of technology is relatively easy to implement in locking mechanisms, such as those found in cars and security doors.

•

Voice recognition technology is considered extremely important for those with disabilities, especially for those with learning disabilities or partial sight. As an example, voice recognition could be used to control a telephone dialer for someone with limited mobility.

•

Voice recognition may also have a place in the modern home, for example, as a means of controlling various household devices, such as lighting. This is not to be confused with voice activation, where sound is used to switch items on or off. With voice recognition, for example, different light levels might be set according to the user’s instructions. Alternatively, the voice recognition system might identify a user through his or her voice and set the level of lighting to correspond with that person’s own preferred settings.

Select two competing software packages as the basis for a detailed comparison. Produce a report that addresses the following tasks: (a) Using relevant examples, describe the major features of each package. (b) Considering the range of features offered by each package, indicate how these might be of benefit to a business organisation. (c) Which package would be more likely to meet the needs of a business organisation? Provide a detailed rationale for your choice.

(a) Students should select an application for which there is a relatively clear set of requirements. The basic requirements for an accounting package, for example, would be consistent across most companies. Having chosen a relevant area, students would be well advised to select the leading programs in this field, as this will help them in their research. Rather than attempting to describe every possible feature of a given software application, students should focus on a subset of features, taking care to select those considered more important. (b) In describing the range of benefits that might be gained from the use of the packages chosen, students should focus their attention on general issues. Some examples include the following: •

Time-saving. For example, many programs help users to enter data more quickly by providing drop-down lists or by completing entries automatically.

•

Improved accuracy. For example, many programs help prevent users from entering invalid data. In addition, some programs (such as accounting packages) are able to identify errors or discrepancies in data.

•

Automation of routine tasks. For example, word processors provide users with templates for commonly used documents, such as letters, reports and invoices.

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•

Compatibility. For example, some packages may be directly compatible with other leading programs. Word for Windows (word processor), for example, is fully compatible with Excel (spreadsheet) and Access (database). Since these represent the best-selling programs of their kinds, users would find it easier to exchange data files with others, such as customers or suppliers.

(c) Students should pay a great deal of attention to the rationale behind the selection of a given package. In many cases, there may be very little to distinguish between two similar packages. As an example, given that there is little to choose between the features of both programs discussed, one might select a given package on the basis that it is the best-selling program of its kind and therefore more likely to be used by customers and suppliers.

5.

Conduct any required research and produce a report that addresses the following tasks: (a) Provide an overview of how organisations can conduct business transactions over the Internet. (b) Discuss the advantages and disadvantages of using the Internet as a business tool. (c) Issues related to security are of great concern to many organisations.

Discuss the major security problems faced by organisations conducting business over the Internet.

(a) Students should conduct research so that their response reflects current events and developments. In addition, a good response will consider the major areas of online banking and e-commerce. In particular, a discussion of e-commerce should deal with areas such as secure credit card transactions and e-cash. (b) A good response will focus on two major areas: concerns over the security of transactions via the Internet and the significant cost savings that can be realised by minimising transaction costs. The case studies in Chapter 2 discuss transaction costs in greater detail.

Students might also discuss some of the ways in which common tasks, such as replying to customer enquiries, can be automated. However, the relevance of this material must be made clear, preferably by linking it to the concept of minimising transaction costs. A good response will also touch on the global aspects of electronic commerce, such as the ability of a company located in one country to conduct business with clients anywhere in the world or the effects of foreign competition. (c) This section of the essay should reflect current events and should refer to up-to-date examples. Having described concerns such as the risk of sensitive information being intercepted by unauthorised persons, a good response will examine some of the countermeasures available to companies, such as security certificates.

6.

As a student, you are required to produce essays and reports containing graphics, diagrams and charts. You may also be required to take part in seminars and presentations. As your course progresses, you are likely to recognise a need to store information obtained through research. Produce a report that addresses the following areas: 70 .

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(a) Considering the tasks described above, identify a range of applications software that can be used to support your studies. (b) Discuss the ways in which the applications you have identified can help improve your studies or enhance the quality of your work. (c) Identify and discuss any other ways in which the applications identified may be of benefit. (a) This is a straightforward task as shown in the table below.

Tasks and related software: Task

Applications Software

Produce essays and reports

Word processor Desktop publishing program (optional)

Contains graphics, diagrams and charts

Spreadsheet Drawing software (paint program) Diagramming software

Used in seminars and presentations

Presentation software

Stores information obtained through research

Database

(b) Students should refer to the material contained in the chapter to identify the features found in each type of software. From this, they should then be able to describe a wide range of benefits that might be gained from using such software. (c) Some examples that might be given by students include the following: •

Presentation of work. Work that has been word processed or produced by desktop publishing software will appear more attractive than handwritten material. The use of spelling and grammar checking tools will also help improve overall presentation.

•

Diagrams. The use of spreadsheets, diagramming software and other packages will allow students to include attractive illustrations within their work. In turn, this may help improve presentation and enhance the clarity of descriptions and arguments. Using a spreadsheet package to create graphs offers the benefit of creating charts that are more accurate than hand-drawn versions.

•

Organising materials. A database program will make it simpler and easier to store, organise and retrieve information. This can lead to significant time-saving and can help ensure that important information is not lost.

Some examples of the additional benefits that students might realise include the following: •

The use of database and spreadsheet programs allows a set of data to be analysed in many different ways. Since this can be done quickly and easily, students can carry out their work in more depth, experimenting with different methods and approaches.

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7.

•

Large quantities of information can be searched and analysed very quickly. For example, students could search an entire newspaper archive for key terms in a matter of seconds. Since relatively large collections of information can be purchased at low cost on CD-ROM, students can conduct research more quickly and to a higher standard than ever before. As an example, an encyclopedia containing many thousands of articles and illustrations can be obtained for as little as £10.00.

•

One of the major advantages of modern software packages is their ability to create outlines holding the basic structure of documents such as essays and reports. Such software allows students to refine their work over a period of time and provides guidance concerning the content and structure of the document.

Using this kind of software can help students to develop their writing skills and their ability to create structured, balanced arguments.

Discuss the use of specialised software for the Internet in terms of its value to business organisations. Refer to applications such as meta-search engines and intelligent agents in your response.

This question asks students to confirm their understanding of the material covered in the chapter. Essentially, students are asked to look at a range of software for the Internet and consider the business applications that become available once such software has been adopted. In addition to the applications listed below, students should also consider the use of specialised security software, such as firewalls, as a means of protecting valuable company assets.

Software

Applications

Meta-search tools

Business intelligence, Market research and Product development

Intelligent agents

Business intelligence, Marketing and Product development

Offline readers

Archiving of Internet information and Business intelligence

8.

What are the challenges and benefits of RFID technology for supermarkets?

Illustrate your response with appropriate examples.

The benefits are better control of inventory in the supermarket. RFID technology requires no line of sight between tag and reader, allows tracking and monitoring of virtually everything that moves and provides real-time information on movement of stock in supply chain permitting quick response.

Examination questions 1.

A small business organisation wishes to purchase a number of personal computers and has issued a tender document to a number of suppliers. Using relevant examples, provide an overview of the technical, support and cost issues that should be considered when evaluating supplier proposals.

The cost issues to be considered include initial costs and ongoing costs. Within the area of initial costs, students should discuss the methods of purchase that may be available.

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equipment. The support issues that should be considered include training, maintenance (including the issue of response time), implementation (including the conversion of data to a new system) and backup and recovery services.

The main technical issues to consider are performance and compatibility. A good response will also consider areas such as how performance can be measured (typically by benchmarking) and the potential to expand the system later on.

Other issues to consider include the physical location of the supplier, their reputation and whether or not the supplier can provide all the items required.

2.

A modern supermarket will make extensive use of technology to support all of its activities. Considering an organisation such as ASDA or Sainsbury’s, describe the range of input, output, storage and processing devices that might be used within a typical branch. For each item identified, provide a brief description of its purpose and any benefits gained from its use.

Much of the material required for a good response has already been covered in the following sections: •

Chapter 2, Discussion Questions 3

•

Chapter 2, Essay Questions 2

•

Chapter 2, Examination Questions 3.

In describing the range of devices used within a typical supermarket, students should demonstrate an understanding of key technologies, such as EPOS. A good response will not focus purely on items of hardware, such as barcode readers.

Instead, the student should demonstrate a broader knowledge and understanding of the use of technology within retailing applications.

In describing the benefits to be gained by adopting various devices, a good response will make the following general point: in terms of a supermarket chain, the primary motives behind the adoption of technology are to achieve cost reductions through increased efficiency and improved customer service.

3.

Considering a typical IBM-compatible personal computer; you are required to: (a) Identify the main components of a personal computer system. For each item identified, provide a brief description of its purpose. (b) Using relevant examples, describe some of the methods that can be used to assess the performance and quality of key components. (c) In addition to the initial cost of the personal computer itself, a number of other expenses are likely to be incurred. Using relevant examples, provide an overview of these additional costs.

(a) This section should use a clear structure, preferably grouping items under the categories of input devices, output devices and storage devices. The answer to

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Essay question 2 for this chapter contains additional information appropriate to this task.

An acceptable response will identify and describe the following components: •

Storage devices: memory (RAM), hard disk drive, floppy disk drive and CDROM drive

•

Input devices: mouse and keyboard

•

Output devices: monitor, printer and sound card

•

Other devices: CPU.

(b) A good response will suggest the use of benchmarks as a means of assessing the overall quality of individual components or a personal computer system as a whole.

With regard to individual components, students should suggest some or all of the following as a means of assessing performance and quality: •

Monitors: dot-pitch, resolution and refresh rates

•

Disk drives: seek time and transfer rates

•

Printers: cost per page, pages per minute and dots per inch (DPI)

•

Processors: clock speed and millions of instructions per second (MIPS)

•

Scanners: dots per inch (DPI)

•

Modems: bits per second or baud.

A good response will offer ‘good’ or ‘bad’ values for some of the items described.

As an example, a student might indicate that a printer capable of producing output at 600 dpi would be considered to be of high quality. (c) Additional expenses associated with owning a personal computer can include the following: •

Printing costs: paper, ink, etc.

•

Media costs: floppy disks, blank CD-Rs, etc.

•

Installation costs: for installing a cable to connect the computer to a network or the Internet, for example

•

Software costs: for upgrades, subscription to services, updates for development software and other such expenses

•

Insurance and maintenance costs: routine maintenance and repairs

Students should be awarded extra credit if they are able to provide further examples and information. Many companies provide figures describing the total cost of owning a personal computer for home and business users.

4.

Interest in commercial uses for the Internet has grown rapidly over the past five years. You are required to carry out the following tasks: (a) Using relevant examples, describe the range of business applications to which the Internet can be applied.

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(b) Using relevant examples, discuss the costs, technical problems and organisational issues associated with making use of the Internet as a business tool. (c) Using relevant examples, discuss the potential benefits to an organisation of using the World Wide Web as a business tool. (a) Readers should refer to Chapters 4, 5, 6 and 14 for additional information. The major business applications for the Internet include the following: •

Competitor research

•

Product research

•

Customer support

•

Commerce (e-commerce)

•

Advertising and promotion.

(b) Students should provide a brief description of each of these areas.

In brief, some of the areas that students may consider include the following: •

The area of costs includes issues such as hardware costs, costs associated with the development of an Internet site, maintenance costs (e.g. keeping information such as product descriptions up to date), training costs and support costs.

•

One of the major technical problems faced by companies is ensuring that all of the various standards used by the Internet are met. As an example, a number of different standards are used to control how e-commerce transactions are carried out. Other technical problems include the following: ensuring that materials published on the Internet are compatible with the range of hardware and software owned by users; maintaining the security of data and equipment through methods such as firewalls; and ensuring uninterrupted communications with visitors to a website, clients and suppliers.

•

Some of the organisational issues to be dealt with include the following: organising and delivering training; the redeployment of staff to new roles; and overcoming hostility towards new working methods.

(c) Some of the benefits to be gained by using the Internet as a business tool include the following:

5.

•

Access to global markets.

•

The possibility of reducing transaction costs by significant levels.

•

Increased control over product lines and stock levels.

•

The ability to automate common tasks, for example, a large proportion of requests for customer support might be dealt with through the use of autoresponder software.

You have been approached for advice by the manager of a small company.

The manager wishes to purchase a number of software packages in order to improve the productivity of staff. Prepare a guide that can be used by the manager when selecting appropriate applications.

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Question 2 of the Discussion section contains material relevant to this task. The selection criteria given in this section can be used to form the basis for an essay.

6.

Groupware improves productivity, enhances communication and reduces costs. Using relevant examples, provide a balanced discussion of this statement.

Some of the major points that might be made in favour of groupware applications include the following: •

The centralised management facilities provided by a network operating system can help reduce costs since common tasks, such as controlling access to the network system, can be performed automatically.

•

Groupware applications are created so that work can be organised and distributed amongst the members of a workgroup. The primary purpose of any groupware application is to facilitate collaborative working by providing effective tools for communication.

•

Previously, projects were completed in steps, where an individual would complete his/her allotted task and then pass materials on to the next member of the project.

Alternatively, work would be completed on an individual basis and then consolidated into a whole when each person’s contribution had been received.

Groupware enables a number of individuals to work on the same document or materials simultaneously. The task of managing individual contributions to the project is dealt with automatically by the application itself. In this way, enormous time-saving can be achieved.

•

Workflow management software can help improve productivity by ensuring that tasks are assigned to workgroup members in a way that means work is completed as quickly and efficiently as possible.

•

Scheduling software can help organise the work of an entire workgroup. Since the chore of scheduling tasks and meetings is automated, time-saving can be made and fewer scheduling errors are likely to occur.

It would be difficult to form an argument against the statement made in the question. It is to be expected that students will produce an argument largely in favour of the use of groupware applications. However, some problems with groupware include the following: •

Groupware applications are often difficult and expensive to implement. In general, such applications require a great deal of labour and technical knowledge to install, configure and maintain.

•

In order to make use of groupware applications, users will often require extensive training.

•

Using groupware applications may not be appropriate for very small or very large/complicated projects. In the case of the latter, it is often more efficient to create a number of smaller workgroups rather than attempt to monitor and control the activities of one, very large workgroup.

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•

The security of data can become an issue as the size of a workgroup increases.

Simply, the larger the number of people with access to sensitive or important data, the greater the chance of a security breach. Since data is normally held at a central location, the consequences of such a breach are likely to be greater than if work was being carried out on an individual basis.

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CHAPTER 4

Databases and analytics Activities Activity 4.1 Forms, queries and reports Using a package such as Microsoft Access, create a simple database that can be used to store the names and addresses of your friends and colleagues. Make sure that the database includes the following features: •

a simple data entry form that can be used to add, edit or delete records;

•

at least one query, for example, a query to list all people living in a certain city;

•

at least one report, for example, a report to show the telephone number of every person listed in the database.

No solution is required for this activity.

Case studies Case study 4.1: BP looks to big data to help weather weak oil price What actions are BP taking in order to harness the benefits of big data?

BP are sending real-time sensor data from oil wells to cloud-based storage system gaining total knowledge of operations. This helps predict problems before they occur, increasing reliability and safety. To handle this data, BP is increasing its data capacity by fivefold.

Case study 4.2: Inside Europe’s biggest data visualisation laboratory How does the use of data visualization or visual analytics enable decision-making from big data?

The size of display makes it easier to spot details in the data. Visualisation enables an overview of the data and the identification of trends.

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Exercises Self-assessment exercises 1.

In an electronic database, what are the differences between queries and filters?

Queries can be used to extract data from the database according to a set of conditions specified by the user. The results of a query can be stored in another part of the database so that the original data remains intact. Queries can also be used to make changes to the data held, for example, by performing calculations and storing the results. Filters, on the other hand, can be used to remove unwanted data from the screen, displaying only those records specifically required by the user. Filters do not alter or delete data but simply hide any unwanted items.

2.

Describe the major components of analytics.

Analytics is built upon various approaches to data driven analysis and can be viewed as the integration of Business Intelligence/Information Systems, Statistics and Modelling and Optimisation tools (Evans, 2017). While these individual areas have been in use for some time, the uniqueness of analytics lies in the tools that lie at their intersections. In terms of the practice of analytics, techniques can be categorised into three types: Descriptive analytics – answers the question of what has happened and what is happening through approaches such as business intelligence, web analytics and statistical techniques.

Predictive analytics – answers the question of what will be happening through approaches such as statistical techniques such as regression analysis, data mining and forecasting techniques.

Prescriptive analytics – answers the question of what should be happening – recommending course of action and the likely outcome of those actions – through approaches such as linear programming, decision trees and simulation.

3.

Describe the data warehousing process.

Figure 4.1 indicates the major steps in the data warehousing process. It can be seen that there are three main elements to the data warehousing process. Firstly, the data warehouse takes information from internal and external sources such as operational systems which record sales or transactions with customers. Data can come from sources such as legacy databases holding historical data (Chapter 3), operational systems such as enterprise resource planning systems (ERP) (see Chapter 6), electronic point-of-sale (EPOS) data from customer transactions (see Chapter 6), data from Electronic Data Interchange (EDI) systems (see Chapter 5) and RFID tags (see Chapter 5). Data is then extracted from these databases and transformed into a suitable form to be placed in the data warehouse using software known as ETL.

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Figure 4.1 The data warehousing process 4.

What is data mining and how can it bring benefits to a business organisation?

Data mining involves searching organisational databases in order to uncover hidden patterns or relationships in groups of data. Data-mining software attempts to represent information in new ways so that previously unseen patterns or trends can be identified.

In general, data mining can help an organisation to maximise the use of its data resources. Some of the benefits that might result from data-mining operations can include new products or services, improvements to existing products or services and the possibility of gaining competitive advantage through information leadership.

5.

Compare and contrast SQL and NoSQL databases

SQL Databases Structured Query Language (SQL) provides a standardised method for retrieving information from databases. Although traditionally used to manage large databases held on mainframes and minicomputers, it has become a widely used and popular tool for personal computer database packages. One of the reasons for this popularity is that SQL supports multi-user databases that operate across network systems.

NoSQL Databases NoSQL (Not Only SQL) databases have properties that differ from common and traditional database systems which were initially designed to manage transactions. Due to the use of Internet related technologies, there has been a growth of types of unstructured and semi-structured data such as video, audio, email, website HTML pages and social network messages that do not necessarily require a complex transactional database. There has also been a need to handle increased data volume and to be tolerant to local data failures in large distributed systems.

Discussion questions 1.

How is a data warehouse different from a database?

A database can be defined as a collection of related information. The information held in the database is stored in an organised way so that specific items can be selected and retrieved quickly.

The Inmon (2005) definition of a data warehouse outlines its main characteristics: •

‘Subject-oriented’ – examples of subjects that are commonly held in data warehouses for analysis are customers and products. Data is held by subject only containing information relevant for decision support.

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•

‘Integrated’ – an important principle of data warehouses is that information is collected from diverse sources within an organisation and brought together to enable integrated analysis. This means differences in aspects such as name and units definitions of data need to be addressed by the data warehouse.

•

‘Non-volatile’ – data are transferred from operational information systems such as sales order processing systems into a data warehouse where the information is static – it is not updated. Instead of the normal update procedure when data is changed, the old, obsolete data is removed from the database and the ‘changed’ data is recorded as new data.

•

‘In support of management’s decision-making process’ – this final point emphasises the purpose of the data warehouse. Thus a data warehouse does not necessarily contain current data that an operational database would be expected to require.

What a data warehouse does require is to hold data over points in time in order to allow analysis such as forecasting and other analysis of long-term relationships.

2.

What are the benefits of the Hadoop software platform?

The Hadoop Distributed File System (HDFS) is classed a distributed file system as data is stored in chunks across multiple servers in order that a task that would be performed on a single large machine can be subdivided into smaller chunks on multiple smaller machines. These smaller machines would then perform the task on their individual chunk of data and then the data is aggregated to produce the final result.

This duplication is to ensure data redundancy so that if one of the multiple servers fails then there is still a second or third copy available on an alternate server. To ensure that redundancy is assured, the replicated data blocks are placed on independent servers, or if storing in a data centre on servers on different server racks.

3.

Compare and contrast scorecards and dashboards.

A dashboard display is a graphical display on the computer presented to the decision maker which includes graphical images such as meters, bar graphs, trace plots and text fields to convey real-time information. Dashboards incorporate drill-down features to enable data to be interrogated in greater detail if necessary.

Although dashboards are generally considered to measure operational performance, scorecards provide a summary of performance over a period of time. Scorecards are also usually associated with the concept of the balanced scorecard strategy tool and examine data from the balanced scorecard perspectives of financial, customer, business process and learning and growth.

4.

What is clickstream analysis?

Clickstream analysis is the analysis of user behaviour gathered as they visit web pages.

Information on the background of users or when users visit a site can be used to target advertisements and marketing campaigns or to provide information for cross-marketing of alternative products. Sites such as Amazon and Expedia use information gathered on previous customer behaviour to recommend products and services that they might be interested in.

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5.

Identify applications for text analytics.

In survey research to analyse responses to open-ended questions. For example, to identify a certain set of words or terms that are commonly used by respondents to describe the benefits and disadvantages of a product or service.

•

To aid the automatic classification of emails and to ‘filter’ out automatically most undesirable ‘junk email’ based on certain terms or words that are not likely to appear in legitimate messages.

•

To analyse open-ended, textual information such as that found in medical forms.

This could be used to analyse open-ended descriptions by patients of their own symptoms which might yield useful clues for the actual medical diagnosis.

•

To automatically process the contents of web pages in a particular domain. For example, you could go to a web page, and begin ‘crawling’ the links you find there to process all web pages that are referenced. In this manner, you could automatically derive a list of terms and documents available at that site and hence quickly determine the most important terms and features that are described.

Essay questions 1.

Describe the elements of a dashboard.

A dashboard display is a graphical display on the computer presented to the decision maker which includes graphical images such as meters, bar graphs, trace plots and text fields to convey real-time information. Dashboards incorporate drill-down features to enable data to be interrogated in greater detail if necessary. Dashboards should be designed so that the data displayed can be understood in context. For example, sales figures can be displayed against sales figures for the previous time period or the same time period in the previous year. Figures can also be compared against targets and competitors. For example, quality performance can be benchmarked against best-inclass competitors in the same industry. The visual display of data can also be used to show the amount of difference between performance and targets both currently and the trend over time. Visual indicators such as traffic lights can be used to show when performance has fallen below acceptable levels (red light), is a cause for concern (amber light) and is acceptable (green light).

2. Describe the ETL process.

ETL software extracts data from one or more databases, transforms that data into a suitable format for the data warehouse and loads that data into the data warehouse. This involves processing the source data according to business rules defined within the data warehouse. These rules can include definitions of data attributes and calculation methods. Part of the advantage of the data warehouse approach is that rules can be applied to data in a consistent way within the enterprise data warehouse.

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3. Describe four alternative architectures for data warehousing.

Eckerson (2003) provides four options to build a data warehouse: •

Data Mart Centric – Data is linked to users through independent data marts. This provides a relatively easy implementation in technical and organisational terms but lacks an enterprise wide view of the organisation’s data and can lead to inconsistencies of data across data marts.

•

Virtual, Distributed and Federated – This consists of linking users directly to data sources through the use of middleware. Whilst providing integration of systems, there may be performance and data quality issues using this approach.

•

Hub-and-Spoke Data Warehouse – This is linking users to dependent data marts, which are then linked to an enterprise data warehouse which in turn is linked to organisational data sources. This provides the ability for customisation to user needs through the use of dedicated data marts but can lead to redundancy of data and relatively high operational costs of running both data marts and the data warehouse.

•

Enterprise Data Warehouse – This links users directly to a data warehouse which is linked in turn to data sources. This provides a single and thus consistent view of the data across the enterprise. It does require leadership from senior management in order to implement an enterprise-wide solution.

4. What is the role of machine learning as an analytic technique?

Machine learning can be defined in a general sense in terms of predicting future events based on historical data. Machine learning involves the implementation of various statistical techniques and has increased in popularity on the back of applications such as the Google’s PageRank algorithm and the use by Facebook of the collection of data at an individual level. There are two types of machine learning termed supervised and unsupervised.

Supervised machine learning involves predicting outcomes from labelled data that has a definite value. This can be achieved through approaches such as classification and regression.

Unsupervised machine learning is when we have datasets with unlabeled outcomes, and in this case, we are not attempting to predict outcomes but to determine which items are most similar to one another. This can be achieved through approaches such as clustering.

What could be considered the distinguishing feature of machine learning is that the outcome is not just based on statistical analysis but is verified by many data iterations to construct mathematical models that can be used to make predictions.

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Examination questions 1.

Critically assess the functions of a RDBMS.

The popularity of the relational database management system (RDBMS) approach grew from a need to share data resources across the entire organisation. In the past, it had been normal to concentrate resources in a small number of specific areas. For example, an organisation’s accounting and stock control functions often dealt with the largest number of business transactions and were seen as having the greatest need of the organisation’s information technology resources. In the same way, these functions were also seen as having the greatest need of the organisation’s data resources. However, as companies aimed to become more efficient and reduce costs, it became essential to ensure the widest possible access to organisational data resources. In addition, organisations were also beginning to receive increased demands for information from users and managers.

The RDBMS approach can be seen as an extension of the DBMS approach with the additional benefits to be gained by sharing data across an organisation and the ability to combine data from several different sources. As an example, it is possible to reduce stockholding costs by linking together an organisation’s production and stock control functions. Such an approach would allow stock levels to be adjusted continuously by examining production levels. In this way, stocks of raw materials can be increased or decreased according to actual usage. In the same way, production scheduling might be improved by inspecting stock levels at regular intervals.

2.

What are the benefits of data mining?

Data mining can be used for the following: •

Identifying associations This involves establishing relationships about items that occur at a particular point in time.

•

Identifying sequences This involves showing the sequence in which actions occur, for example, path or clickstream analysis of a website.

•

Classification This involves analysing historical data into patterns to predict future behaviour, for example, identifying groups of website users who display similar visitor patterns.

Classification is distinct from clustering in that at least some of the classes are previously known. Classification is often used to classify new data into previously defined classes by learning the pattern of the data within the current classes.

•

Clustering This involves finding groups of facts that were previously unknown, for example, identifying new market segments of customers or detecting e-commerce fraud.

Cluster analysis sorts attributes such as people or events into groups (i.e. clusters) in which the degree of association amongst the items within the cluster is strong and 84 .

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across clusters is weak. Cluster analysis can proceed from either placing all items in the analysis in one cluster and breaking this into separate clusters (divisive) or placing all items in separate clusters and joining the clusters together to make new clusters (agglomerative).

•

Modelling This involves using forecasting and regression analysis to predict sales, for example, using sales histories to forecast future sales.

3.

Critically assess the methods used by NoSQL database systems for processing unstructured and semi-structured data.

NoSQL database systems use a variety of methods: In-memory databases Traditionally, data held in databases was stored on disk but now data can be held in memory (RAM) for faster processing. This has led to the use of in-memory databases which take advantage of the reduction in cost of RAM to handle the complexity of managing increasing volumes of data such as web traffic. Examples of databases that offer in-memory capabilities include Redis and Apache Ignite.

Columnar databases Columnar databases are a method of storing data that permits faster querying of large volumes of data compared to the traditional row-based storage approach. In essence, rather than searching across each row in a large database by assuming each column of data that resides in an individual file, we can search by each search time individually.

Another advantage of columnar databases is the ability to add a third key (in addition to the row key and column key) to uniquely identify each cell of data in a record.

Document-oriented databases Document-oriented databases can hold unstructured as well as the structured data held in traditional RDMS databases in tabular format and queried using SQL software. One way of representing unstructured data is to use JSON (JavaScript Object Notation) which provides a means of representing data in a portable text-based key-value pair format (see figure 4.4). It is ideally when there are various arbitrary elements in the dataset, many of which are optional and many of which might contain multiple values.

Key-value databases Data is modified by generating what are known as key-value pairs which identify an entity and a value assigned to that entity. Key-value databases employ the principle of assigning unique keys to each record; this approach can be very powerful because the time to retrieve information corresponding to a key can be very fast as it is not necessary to search through a long list to identify a matching key.

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Object-oriented databases An object-oriented approach to database design employs the concept of reusable objects in order to develop sophisticated or complex applications. An object combines data structures with any functions needed to manipulate the object or the data it holds. As an example, an object called Employee might be created to store details of staff. The object would contain a data structure that allowed basic details such as name, address, age, etc. to be stored. In addition, the object would also contain facilities that allow various actions to be performed, such as changing an employee’s address.

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CHAPTER 5

Networks, telecommunications and the Internet Activities Activity 5.1 Transmission of data through different hardware and network components Describe the order in which a message passes from one piece of hardware to the next when a home user in the UK sends an e-mail via the Internet to someone in a large corporation in the USA. You should refer to the following terms: (a) mail server; (b) client PC; (c) modem; (d) hub; (e) network cable; (f) network card; (g) gateway server (telecommunications processor); (h) router.

Treat the Internet transmission as a single stage.

The order in which messages are passed is from: (b) client PC to (c) modem to. phone line connected to an Internet Service Provider (ISP) who will be connected to the Internet. The ISP will also contain many of the other devices referred to below that will be present in the corporation in the US, in particular, it will probably pass through (a) a mail server, (g) a gateway server and (h) a router. The Internet links will occur by the message being sent by many routers and over different media.

The Internet will be connected to a server in the corporation known as the: (g) gateway server that will be connected to the Internet and that will act as a firewall between the corporation and the Internet beyond. It may be connected to the mail server by

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(h) router (optional) and (e) network cable linked to (f) network card in the (a) mail server – this will be a separate server specifically used to process e-mail. (h) router – used to route the mail message in the organisation along the correct network segment (e) network cable (d) hub – this may be used to link a segment of the network directly to a PC (e) network cable, sometimes known as patch cable, connected to (f) network card in the (b) client PC.

Activity 5.2 Reintermediation in practice To provide an example of the services provided by ‘cybermediaries’ and explore their viability as businesses.

1. Kelkoo provides a price-comparison service. The desired product is typed in and a database is searched for suppliers who have this product. Different prices and other extras such as delivery and guarantees are then listed. Typically, the consumer will pick the supplier with the lower price.

2. The main revenue will come from commission for products bought. Kelkoo will be an affiliate of each of the e-tailers it is linked to. Payment options for affiliates typically include the following: (a) A small percentage of the product purchase price from the e-tailer from which the product is purchased (the normal affiliate model). (b) Payment for a lead or enquiry that does not necessarily result in sale. This is more favourable to the affiliate and this is the arrangement negotiated by Kelkoo because of its strength in comparison to e-retailers.

Other revenue models include general banner advertising on the site, together with advertisements from the manufacturers of products (e.g. book publishers) or from the e-tailers (a small banner ad may be placed by the e-tailer to establish its credibility).

3. A problem with the business model of such intermediaries is that only a small percentage is paid by the e-tailer to the intermediaries, so many transactions must occur. This is also a problem for the similar service from lastminute.com (www.lastminute.com). It is forecast that the next stage will be a shake-out as many of the cybermediaries and B2B marketplaces fail, leaving room for a handful of key players in each sector. As a consequence, intermediaries such as Kelkoo are 88 .

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spending a large proportion of their funding capital on advertising to build their market share.

Case Studies Case study 5.1: The internet of things: industry’s digital revolution Discuss the benefits and challenges for businesses wishing to use the Internet of Things.

Enables monitioring of systems to prevent failures and improve performance.

Challenges are that industry standards have not yet emerged for IoT products and services. Issue of losing security of key internal data and potentially losing the knowledge that gives them a competitive edge. Still requires people to apply knowledge to the data collected.

Case study 5.2: IBM is in a fight to keep up with big spending rivals in the cloud Discuss the implications of cloud computing for computing service providers.

Service providers need to provide low cost and fast access to cloud services. Cloud computing providers need to have scale in operation in order to achieve this.

Exercises Self-assessment exercises 1.

Distinguish between a local-area network (LAN) and a wide-area network (WAN).

The answer should stress the difference in scale, with the LAN used to connect computers within an organisation based on a single site and the WAN used to connect people on multiple sites. Note that the WAN can be used to connect users who are in different organisations such as suppliers and distributors of products.

2.

What are the main business benefits delivered by a local-area computer network?

•

Information sharing and collaboration amongst staff

•

Cost reduction through sharing of peripherals, such as printers and tape storage, and through sharing of information which will result in lower consumable costs such as printer toner and paper

•

A capability for new techniques of communication and control that are available through e-mail.

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Students could use the ‘6Cs’ framework (Chapter 8) to indicate benefits such as cost reduction, new capability, control by managers and improved communications.

3.

What are the main components of a telecommunications system?

The main component is the client access device, the remote device where the information is stored and transmitted (the server). In between the origin and destination of communications are the telecommunications processors such as routers which are used to select the best pathway for information and the physical media used to transmit information (the cables and other media such as satellite).

4.

What is the purpose of a network operating system?

The NOS is systems software (Chapter 4) that is used to manage the network. It controls the following: •

Security through the use of usernames and passwords

•

Sharing of information amongst users in different locations

•

Access to information according to the permission granted to different users

•

Communications and passing of data amongst different components on the network

•

Sharing of devices, enabling, for example, the backup to tape of data on the server or printer sharing.

5.

What is the difference between the Internet and the World Wide Web?

The Internet refers to the physical network that links computers across the globe. It consists of the infrastructure of network servers and communication links amongst them that are used to hold and transport information between the client PCs and web servers.

The World Wide Web is a method for storing (web servers), transmitting (the HTTP protocol) and displaying (through web browsers) information across the Internet. It is effectively the publishing mechanism.

Using the TV analogy, the Internet is the network for transmitting data globally, while the Web is the method of delivering the content (channels).

6.

Describe the two main functions of an Internet service provider (ISP). How do ISPs differ from applications service providers?

Internet Service Provider (ISP) – definition: A provider provides home or business users a connection to access the Internet (1).

They can also host web-based applications (2).

Application server – definition: An application server provides a business application on a server remote from the user.

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An ISP simply offers access and hosting; they do not typically provide access to specific business functions such as finance services, which are provided by software providers such as Microsoft and Oracle (although this may change as ISPs sell a wider range of software services).

7.

Distinguish amongst intranets, extranets and the Internet.

In summary, they refer to different levels of access – the Internet is public, the intranet is restricted to organisations and employees while an extranet is restricted access beyond the company.

Intranet – definition: A private network within a single company using Internet standards to enable employees to share information using e-mail and web publishing.

Extranet – definition: Formed by extending the intranet beyond a company to customers, suppliers and collaborators.

8.

Distinguish between the IoT and IoE.

While the IoT is about enabling devices to share data via the Internet, the Internet of Every-thing (IoE) is much broader. The Internet of Everything is about acting on all the information gathered from four main areas of Data, Things, Processes and People.

9.

Describe the standards involved when a web page is served from a web server to a user’s web browser.

Request page and deliver page (HTTP), transfer request and information (TCP/IP) and render page in the browser (HTML).

TCP/IP – definition: The Transmission Control Protocol is a transport layer protocol that moves data amongst applications. The Internet protocol is a network layer protocol that moves data amongst host computers.

HTTP (Hypertext transfer protocol) – definition: HTTP is a standard that defines the way information is transmitted across the Internet between web browsers and web servers.

HTML (Hypertext Markup Language) – definition: HTML is a standard format used to define the text and layout of web pages. HTML files usually have the extension .html or .htm.

10. What are the main benefits of cloud computing?

The advantages of cloud computing include the following:

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Cost – Cloud computing eliminates the expense of buying hardware and software and setting up and running on-site data centres – the racks of servers, the electricity for power and cooling and the IT experts needed for managing this infrastructure.

Speed – Most cloud computing services are provided as self-service and on demand, so even vast amounts of computing resources can be provisioned in minutes giving businesses a lot of flexibility and taking the pressure off capacity planning. The biggest cloud computing services run on a worldwide network of secure data centres, which are regularly upgraded to the latest generation of fast and efficient computing hardware Scalability – The benefits of cloud computing services include the ability to scale. In other words, to deliver the right amount of resource – for example, more or less computing power, storage and bandwidth – exactly when it’s needed.

Reliability – Cloud computing makes data backup, disaster recovery and business continuity easier and less expensive because data can be mirrored at multiple redundant sites on the cloud provider’s network.

Discussion questions 1.

Do you think that the introduction of client/server (C/S) systems has been worthwhile to businesses?

This question is a straight analysis of the business benefits compared to the disadvantages of client/server system. It is a specific instance of a general issue facing businesses with the introduction of any new technology. Client/server systems can be compared to a previous situation in a business where the PCs are not networked or more likely, a mainframe is used with character-based dumb terminals.

The key benefits of C/S are as follows: •

The cost reduction available through downsizing to lower-cost hardware and software

•

Improved flexibility for the end-users to deploy specialised applications and to write their own applications using tools such as MS Excel or Access

•

Improved ease of use on the client side since traditional applications tend to be character-based rather than using a WIMP interface (Chapter 4).

The main disadvantages are as follows: •

The cost-reduction argument is not clear. The experience of implementing client/server systems is that although the purchase price of hardware and software may be lower, the lifetime or total cost of ownership (TCO) may be higher. Much analysis of TCO has been conducted by the Gartner Group (www.gartner.com) and is briefly referred to in Chapter 16. The high TCO of C/S systems arises from the cost of supporting them since it is easy to modify the configuration; it is also possible to stop applications working. This problem is compounded by the range of networking drivers and software applications that are available from different

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vendors. In a traditional mainframe environment, the software would typically be sourced from a smaller number of vendors.

•

The stability or reliability of C/S system is questionable. There are many examples of C/S system failures mentioned in the UK trade papers such as www.computerweekly.co.uk and www.computingnet.co.uk. A recent example is that of the rollout of a UK-wide system for the National Westminster bank that is based on Windows NT. This rollout has experienced technical difficulties resulting from software incompatibilities.

•

The control and administration of traditional mainframe systems tend to be easier since they are more centralised, with less opportunity for the end-user to configure the software. This is similar to the TCO argument.

•

The security of C/S systems may be less robust than mainframe systems.

•

System designers are still learning about the best way to construct C/S systems.

Early implementations tended to be error prone and difficult to maintain since a two-tier architecture had been adopted in which the application logic and data access routines are mixed with the program code for interacting with the user.

Many of the disadvantages of C/S systems result from the relatively new introduction of C/S techniques in the late 1980s and 1990s. Mainframe technology has been in existence for 30 years and many of the mistakes currently being made with C/S systems have already been learned by companies and rectified for mainframes. This is true for many new technologies. For example, both UNIX and Windows NT operating systems can be used as a basis for developing C/S, but UNIX has a reputation for being more secure and reliable since it has existed longer. So it can be argued that some of the disadvantages of C/S systems are greater if the Windows NT environment is used for the implementation.

Since there is no clear cost-reduction argument either way, the overall balance in this discussion is governed by how important a business considers the improved usability and flexibility of C/S systems are in comparison to the likelihood of poorer reliability and control.

Students should consider figures on the adoption of C/S systems. Since many businesses have now adopted them, it could be argued that the business benefits are clear, but there are still many disadvantages inherent in deploying C/S systems.

2.

There are many possible benefits of company-wide networks. Is it possible for them to be achieved without changing working practices?

Discussion of this issue can be in two main parts – a brief review of the benefits and disadvantages of adopting networks. The benefits are mentioned in Essay question 1 below. The principal disadvantages are the cost and potential disruption during implementation and the need to change working practices. This discussion should focus on the disruption and the changed working practices.

The arguments in favour of the need to change working practices are based on taking advantage of the new technology. Gains to the business will not occur if existing bad

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practices are continued. Reasons for the need for change in practices include the following: •

New software systems will often be introduced as part of the installation of a network. This might include tools such as e-mail or groupware, or enterprise resource planning (ERP) software (Chapters 6 and 14). Such software will often require new working practices. For example, e-mail will only work effectively for a business if there are guidelines stating it is used in preference to paper or ensuring replies within a set period. This is particularly true for e-mails received from customers – a company could introduce a rule stating that each e-mail should be replied within two days. ERP software may require new business structures to be adopted as part of a business process redesign exercise (Chapter 14).

•

A network can be used to help a company move towards a ‘paperless office’. This will only occur if there is management commitment to this. If commitment does not occur, the advantages of the network may be wasted.

•

A network can also help promote teamwork in an organisation using groupware (Chapter 6) and intranets (Chapter 16). These help the staff to collaborate, communicate and work in new ways. For example, the need for travel to meetings can be reduced through the use of videoconferencing and discussion forums.

•

A change in purchasing policy is needed to buy shared devices such as printers, rather than them being purchased by individual departments.

Arguments against changing working practices are weak but could include the following: •

The cost of training and disruption

•

The risk of the new working practices being resented by staff.

3.

Discuss the merits and disadvantages of locating company e-business services inside a company, in comparison with outsourcing to an ISP or ASP.

Suggested approach: •

Select particular type(s) of e-business services to refer to in answering this question, for example, site hosting, e-mail management for questions and accounting packages.

•

Review the benefits of external location: maintenance costs, expertise and responsiveness to short-term problems, for example, a new virus and longer-term technological trends.

•

Review the benefits of internal location: control and security.

•

Assess the benefits and risks overall.

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4.

What are the main challenges to companies who wish to use the IoT?

One issue with these applications may be the volume and velocity of data generated from sensors and the ability to monitor this in real-time. This has led to the move to computing to the ‘edge’, often termed edge computing where data driven processes are undertaken by the devices closest to the action or the event. However, this can be difficult due to the limited processing capability of devices such as smartphones. A key issue with the IoT is the data management issues involved in storing and generating insights from the large volume of data generated. Here the concepts of big data and analytics are relevant and are covered in chapter 4.

5.

Assess the three main ways of deploying a cloud computing capability.

There are three main ways to deploy cloud computing resources: Public cloud – Public clouds are owned and operated by a third-party cloud service provider, which delivers computing resources such as servers and storage over the Internet. Microsoft Azure is an example of a public cloud. With a public cloud, all hardware, software and other supporting infrastructure are owned and managed by the cloud provider. You access these services and manage your account using a web browser.

Private cloud – A private cloud refers to cloud computing resources used exclusively by a single business or organisation. A private cloud can be physically located on the company’s on-site data centre. Some companies also pay third-party service providers to host their private cloud. A private cloud is one in which the services and infrastructure are maintained on a private network.

Hybrid cloud – Hybrid clouds combine public and private clouds, bound together by technology that allows data and applications to be shared between them. By allowing data and applications to move between private and public clouds, hybrid cloud gives businesses greater flexibility and more deployment options.

Essay questions 1.

You are a newly installed IT manager in a company with 100 staff. You want to convince the directors of the benefits of adopting a local-area network across the whole company. How would you present your case?

It is unlikely that any business of this size would not have any network facilities, but the use of networks may be variable across the company. Despite this, the essay should draw out the business benefits of local area networks.

How the case is presented would vary according to the requirements of the individual directors. The finance director would be most interested in the cost reductions that are available to the company through using the network. The sales and marketing director might be more interested in the opportunities the network could provide. The opportunities for the marketing director might include the following: •

Sharing information on customers and sales performance

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•

Using the network for electronic diaries which would make it easier to schedule sales conferences, client meetings and internal meetings

•

Collaborating on new promotional campaigns.

Given these different standpoints, the presentation should cover the full range of benefits. A suitable framework for justifying the benefits of any IS is provided by the ‘6Cs’. Each of the following headings should be expanded on: Competitive advantage Although IS can give a company the edge over its rivals, it is not clear in this instance exactly how this would be achieved. Competitive advantage can be obtained by any of the other methods mentioned below such as customer service or providing a new capability. A competitive advantage can only be obtained if their competitors do not already have a network. However, if their competitors do have a network, then there may an argument for purchasing a network to remain competitive.

Customer service Assuming that the company is a manufacturer of products, the network may help customer service since it will enable customer orders to be processed more efficiently.

It will also enable customers to query the status of their order.

Capability The new network could provide a new capability to achieve a facility that has not been possible previously. For example, the network could be used to share information using an intranet (Chapter 17). Without such a network, there will be ‘islands’ of information in the organisation that will make it difficult for the directors to analyse the performance of the business.

Communication Installing the network can be coupled with installing software to improve communication; e-mail is an obvious example of this. Groupware such as Lotus Notes and Domino or Microsoft Exchange could be purchased to provide tools for workers in different departments to collaborate.

Control Improved control will be delivered through better information delivery to managers.

The sales manager will be able to receive weekly reports on the performance of the sales force via the network and take corrective action if sales staff are non-performing.

Cost reduction Cost reduction can be achieved through introducing a network since it will reduce the need for duplicate equipment such as printers and faxes around the organisation.

Through reducing the use of paper by transmitting documents and reports electronically, the cost of paper and printing can be reduced.

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2.

Explain the benefits that a company deciding to downsize to a client/server architecture as part of its IT strategy could derive. What management initiatives will be necessary to ensure that the introduction of the new system is a success?

The principal benefits of downsizing are a combination of cost reduction and new capabilities provided as a result. The benefits can be described under the same headings as those for the network given in Essay question 1: •

Competitive advantage – this could be achieved through improved customer service and capabilities, but it will only occur if competitors are not adopting a similar approach.

•

Customer service – achieved through new software that provides more relevant information to customers and helps queries to be answered faster than was possible before.

•

Capability – the main capabilities provided by downsizing are for the users to select, develop and configure their own specialised applications, that is, to improve their control over what they use IT for.

•

Communication – downsizing is unlikely to provide greatly enhanced communication if a company already has a network. It may improve communication if the use of PCs provides users with e-mail or groupware facilities that are less readily available for mainframes.

•

Control – downsizing provides the end-user with more control over which applications they use and how they are configured. Less centralised control occurs.

•

Cost reduction – downsizing will reduce the cost of purchase, rental and maintenance of mainframe computers, and the software for PC-based systems also tends to be cheaper.

The issues involved with downsizing have also been described in Discussion question 1, which considers the introduction of client/server systems technology that is usually part of downsizing.

The management initiatives necessary to ensure the introduction of the new system is a success are covered in detail in Chapter 13 in the sections on managing implementation of new systems. They include the following: •

Education and training of the users, including an explanation of why the change is being made as well as hands-on training on the new software.

•

A competent project manager will be necessary to manage the technological and organisational changes associated with downsizing.

•

Careful analysis of the requirements of the new system to assess how it will impact users.

•

Appropriate testing of the new system to ensure it does not result in reduced customer service – downsizing can sometimes result in slower systems.

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•

Drawing up of new guidelines on working practices to ensure the new system is successful.

•

Support from management to ensure that the above actions are achieved.

3.

You are consultant to a small retailer interested in setting up a transactional e-commerce site. Create a summary guide for the company about the stages that are necessary in the creation of a website and the management issues involved.

A summary of the different tasks that need to be explained in the guide: •

Domain name registration – ensure that this is undertaken as soon as possible to avoid others taking the most suitable names.

•

Content and e-mail hosting – decide on the supplier where content will be hosted.

•

Define strategy – what are the aims of the online presence. What resources are used (financial and people) to manage the website.

•

Content development – decide on the content and design of the site to achieve its aims.

•

Promotion/launch of site to generate visitors to the site.

•

Response management – managing requests and support from the website.

•

Maintenance of the site.

Examination questions 1.

Name three ways in which installing a local area network can reduce costs.

Explain how this is achieved.

•

Reduced cost of printing. Reports and documents that were formerly printed before distribution around the organisation do not need to be printed since information can be viewed electronically.

•

Reduced cost of peripheral devices such as printers and tape streamers. If there is no network, then each group of PCs must have their own printer, perhaps shared by a printer sharer. With a network a central printer can be used.

•

An indirect cost saving is that staff time spent searching for information will be reduced since it can be searched for electronically.

2.

Which features would you need to specify for a company network for a company of 100 people working at a single site?

•

The server machine(s) used to control the network and host the network operating system.

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•

The media and network transport, for example, will Ethernet or fibre-optic cables be used?

•

The topology of the network, in other words, how it is arranged, for example, bus, star or token-ring.

•

The use of telecommunications processors to join the different parts of the network and manage the flow of data packets, for example, the hubs, bridges and routers.

•

The client machines (PCs) and how they will be connected using network interface cards.

3.

Computer networks exist on different scales. Distinguish amongst the following types: (a) local-area network; (b) wide-area network; (c) metropolitan-area network; (d) value-added network.

(a) Local area network: typically single site, single organisation and single network. (b) Wide area network: typically multiple site, one or several organisations and multiple interlinked networks. (c) Metropolitan area network: similar to a WAN, but is a managed service within a city, which connects many finance businesses, for example. (d) Value-added network: also similar to a WAN but here the WAN links are shared amongst many companies to reduce the cost of use.

4.

Explain, with the aid of diagrams, the difference amongst the following network topologies: (a) star; (b) bus; (c) ring.

(a) Star: used for larger networks, the star topology consists of each PC connected via a cable to a central location such as a hub or server. (b) Bus: this is a simple topology often used by small businesses. It consists of a serial or ‘daisy-chain’ arrangement of nodes. (c) Ring: in this topology, there is a continuous ring of network cable.

The topology of the network typically describes the layout of a LAN within a company.

Refer to Figure 5.4 on p. 174 for diagrams of these topologies.

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5.

Distinguish amongst the following different types of servers: (a) network; (b) applications; (c) database.

(a) Network: used to host the network operating system to permit user access to the system and to manage the sharing of resources such as files and printers. (b) Applications: stores programs such as general-purpose applications including word processors or specific business applications such as accounting systems that are then accessed by end-users. (c) Database: used to store data in a structured way and controls the insertion of new records, modification, deletion and querying of data. Performs these functions in response to requests from client PCs. 6.

What are the advantages of the following types of media? Is each more likely to be found in a local- or wide-area network? (a) copper cable; (b) fibre-optic; (c) satellite; (d) microwave.

(a) Copper cable: low cost, relatively good performance. LAN. (b) Fibre-optic: rapid speed. LAN or WAN. (c) Satellite: rapid, large-capacity transmission across large distances. WAN. (d) Microwave: rapid, large-capacity transmission across large distances. Cheaper than satellite. WAN. 7.

Networked communications in business occur through wide-area networks and local-area networks. (a) How do the two types of network differ? (b) What is the difference between a local-area network and an intranet?

(a) Difference of scale as described in Question 3 above. (b) An intranet describes a particular type of local area network that uses the technologies of the Internet such as TCP/IP data transfer and access to information via a web browser.

8.

You have been tasked with arranging Internet access for other employees in your company. Summarise the hardware and software needed.

Software: web browser, operating system and TCP/IP stack on each PC (part of the operating system to enable connectivity).

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Hardware: PC plus network card to connect to modem for each user and a gateway PC to connect to the Internet including a firewall for security reasons.

9.

How would you explain to a friend what they need to purchase to access the World Wide Web using the Internet? Explain the hardware and software needed.

Software: web browser, operating system and TCP/IP stack.

Hardware: PC plus router.

10. Explain the reasons why a business would use cloud computing.

Cloud Computing offers: Cost – Cloud computing eliminates the expense of buying hardware and software and setting up and running on-site data centres – the racks of servers, the electricity for power and cooling and the IT experts needed for managing this infrastructure.

Speed – Most cloud computing services are provided as self-service and on demand, so even vast amounts of computing resources can be provisioned in minutes giving businesses a lot of flexibility and taking the pressure off capacity planning. The biggest cloud computing services run on a worldwide network of secure data centres, which are regularly upgraded to the latest generation of fast and efficient computing hardware Scalability – The benefits of cloud computing services include the ability to scale. In other words, to deliver the right amount of resource – for example, more or less computing power, storage, bandwidth – exactly when it’s needed.

Reliability – Cloud computing makes data backup, disaster recovery and business continuity easier and less expensive because data can be mirrored at multiple redundant sites on the cloud provider’s network.

11. Explain the term ‘electronic data interchange’. What is its relevance to companies now that the Internet is widely used for data exchange?

Electronic Data Interchange (EDI) is the exchange, using digital media, of structured business information, particularly for sales transactions such as purchase orders and invoices between buyers and sellers.

It is still relevant since it can be used as a method of structured data transfer for purchasing across the Internet and has evolved as Internet EDI to support new standards such as XML.

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CHAPTER 6

Enterprise and functional BIS Activities Activity 6.1 Retail applications of TPS by Sainsbury’s 1.

Draw a diagram summarising the links amongst all the parties who access Sainsbury’s TPS. This diagram should be similar to Figure 6.10, with the following parties shown:

2.

•

Customers (possibly via the Internet or through checkout assistants)

•

Suppliers (direct and indirect via merchants)

•

Branch managers and departmental managers at each branch

•

Distribution and logistics managers at head office and regional distribution centres.

What benefits will Sainsbury’s gain compared to the time before the introduction of TPS? Benefits at different management levels include: Operational: •

Better customer service through better availability of products for customers and better quality of perishable products

•

Lower cost of managing supply chain through just-in-time ordering in response to fluctuations in demand.

Tactical: •

Analysis of customer buying behaviour in response to sales promotions and loyalty card schemes

•

Better matching of fluctuating demand and supply.

Strategic:

3.

•

Increased customer loyalty from card schemes and better customer service

•

Related services such as banking that can be tied into TPS

•

More choice of and competition amongst suppliers

•

Better cost management.

Can you think of any problems with using TPS so extensively? What can be done to counter these problems?

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could result. The solution lies in the careful testing of new systems and in building ‘fault tolerance’ into new systems. For example: •

Ensuring the system can deal with a power failure (extra generators)

•

Providing dual or mirrored servers or disks that can take over in the event of failure

•

Well-defined service levels with the IT and networking suppliers to agree that problems are resolved quickly

•

Ensuring that the local system is decoupled from the company network so that if the company network fails, the system in the branch can continue to operate.

Case studies Case study 6.1: ERP: Germany’s Mittelstand joins revolution in big data Explain the quote in the last line of the case study ‘But we see in the commercial area that the platforms get all the money, not the hardware producers’.

This relates to the move to servitization and the selling of services rather than simply product.

‘The future for manufacturing, industry analysts add, will not be selling machines but selling the output of the machines. An engine, for instance, can be leased, with the user paying for its availability or uptime. This gives the manufacturer an incentive to ensure it is always running, using sophisticated software that is increasingly becoming the differentiating factor v. rivals. Businesses that choose not to be involved could face an existential risk’.

Case study 6.2: 3D printing starts to gain traction in industrial tool kits Discuss the advantages and disadvantages of 3D printing as outlined in the case study.

Allows complex parts of many components to be made in one process eliminating the need for complex supply chain for parts.

Enables prototypes to be developed quickly.

Is expensive and often does not make economic sense to scale up into production.

Can be a lengthy process per unit to manufacture.

Quality can be an issue and only certain materials are suitable for 3D printing.

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Exercises Self-assessment exercises 1.

What is the difference between an enterprise system and an enterprise resource planning (ERP) system?

Enterprise systems and ERP can refer to the same concept. In this text, the term enterprise system refers to a collection of systems that aims to support business processes across functions within an organisation. ERP is one of these systems that deals with internal production, distribution and financial processes. Other enterprise systems include CRM, SCM, SRM and PLM. 2.

Evaluate the role of transaction processing systems in an organisation.

TPS perform routine transactions that serve the operational level of the organisation, for example, sales order processing. Although supporting routine transactions, TPS is often essential to the operation of the organisation.

3.

How can information systems support the manufacturing process?

Support for the manufacturing process includes the following: •

Production planning and materials management. Information is provided on the progress of work through the manufacturing system in relation to the due date for a customer order. Enables plans to be developed for resources (e.g. labour, materials and equipment) needed for production and to schedule order and quantity of components on a day-to-day basis. Materials management approaches include MRP, JIT and OPT.

•

Product/service design. A database of information required for aspects such as customer needs and material costing for the design process. CAD provides graphic design assistance.

•

Facility design. Software allows the use of the SPC technique for quality control.

•

CIM. Provides a range of facilities coordinated over a network system using the manufacturing automation protocol (MAP).

4.

Explain the aims of Industry 4.0

Industry 4.0 is based on the initiative ‘Industrie 4.0’ launched in Germany in 2011 around the idea of a fully integrated manufacturing industry. The term is also referred to as the Fourth Industrial Revolution enabled by digital transformation and the integration of information technology and automation systems in manufacturing. A major element of Industry 4.0 is cyber-physical systems (CPS) that allow the physical components of an industrial process such as machines, workers and robots to be integrated with the virtual network of the Internet of Things (IoT) (chapter 4). The goal is to have embedded computers and networks monitor and control the physical processes and enable information to be shared at the different stages of creating and manufacturing a product. This will enable the establishment of a self-adapting

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production system based on transparency of information and predictive power. Further key elements to Industry 4.0 are thus the infrastructure to store and manage the big data generated by cyber-physical systems and the use of analytics to provide the predictive analysis required.

5.

Explain how decision support systems can support different parts of an organisation.

Decision support systems can support the full range of organisational decisions from strategic through tactical to operational. We can draw on the following examples from different functions: •

Manufacturing – see Question 6 below

•

Marketing – see Question 8 below

•

Finance – identifying debtors.

6.

Describe the purpose of workflow management and groupware.

Both of these solutions are used to increase the efficiency of internal processes and are implemented as intranet/e-mail systems. The type of processes includes the following: •

Procurement – authorisation of new purchases

•

Production – alerts about problems

•

Marketing – managing customer interactions during purchase, managing product dispatch and managing new product development

•

Finance – integrating with procurement and marketing systems

•

Human resources – online systems for booking holidays and training courses (administrative workflow).

7.

Which information systems tools can be used to support the marketing function?

Marketing information systems include the following: •

Sales information systems. Employees involved in the sales area are required to identify potential customers, negotiate the sale of goods and services with those customers and provide a follow-up service. Systems are available to support each of these tasks. Prospect information systems provide lists of potential customers by categories such as product range or geographic area.

•

Distribution information systems. Speed of delivery is often an important aspect of service to the customer. In order to ensure this, it is important that tracking systems that can locate products during the distribution process are in place.

•

Sales order processing (SOP) systems. The sales order processing (SOP) system is usually based in the financial area and provides a variety of data that can be used 105 .

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for marketing purposes such as assessing the timing and value of orders from customers. These can be used for applications such as sales forecasting, which is a major input into the sales planning process. Other data supplied by the SOP system includes inventory levels. If inventory levels are high then this might trigger a discount programme for a particular product line.

•

Sales and campaign management information systems. The sales management information system provides information in support of decision-making at the tactical level. It will hold information on such aspects as sales performance by geographic area, by product group and by sales person. This information can be used to determine sales effort in different areas and products and level of bonus payments to an individual sales person. The data can also be used to investigate the strength of relationship amongst such factors as customer types and product sales.

This information can be used as the basis for a marketing plan based around an advertising and promotion scheme aimed at a particular customer segment (e.g. targeting designer label drinks at people in the 18–25 age range).

•

Product pricing information systems. The price of a product will be dependent on a variety of factors such as the cost of producing the product or providing the service, the required profit margin and the price of competitors’ goods. The price may also be affected by a marketing strategy to build market share by lowering the price. The product pricing information system will collate information on costs and predicted market demand at different price points and discounts in order to support the pricing decision. More sophisticated software in the form of a pricing model enables the user to input various market and product attributes and provides a suggested price on the basis of relationships formalised in the model.

•

Sales forecasting information systems. At a strategic level, it is necessary to provide sales forecast data in order to help form the long-range strategic plan. Sales forecast data is essential so that demand can be met and resource employed in the correct areas. For instance, marketing needs to inform other functions such as operations of predicted demand so they can organise their resources to meet this demand. The information system is required because of the range of data that goes into the forecast and the need to continually update the database in order that the forecast is as accurate as possible.

•

Marketing Research and analysis information systems. In order to ensure that there is a demand for the goods and services of the organisation, it is necessary to undertake market research. For a new product, this may include information on demographic changes and customer feedback from questionnaires and interviews that indicate customer preferences.

•

Competitive tracking. Knowledge of competitors’ prices, products, sales and promotions is an important factor in the development of a marketing strategy. For example, the organisation would need to consider its reaction to a competitor’s move to build market share.

•

Telemarketing software. This software is designed to dial potential customers automatically based on customer files maintained in a database. The software will also allow notes to be stored on customer requests, generate follow-up letters and

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display information gathered on the customer for reference as the call is taking place.

•

Geographical information systems (GIS). GIS are used to display information on maps. Performance of distribution channels such as branches can be shown by colour coding them. Colour-coded areas on the map can be used to show variation in the demand from customers for products or the characteristics of people living in different areas, such as average disposable income.

Discussion questions 1.

Discuss the concept of customer relationship management (CRM).

CRM covers the whole process by which relationships with customers are built and maintained. CRM systems are designed to integrate the range of information systems that contain information regarding the customer. These include applications such as customer details and preference databases, sales order processing applications and sales force automation. The idea is to acquire customers, retain customers and increase customer involvement with the organisation.

Common applications which would be integrated in a CRM system include the following: •

Customer data collection: This can include personal details such as age, sex and contact address, also a record of purchase transactions undertaken in terms of factors such as location, date, time, quantity and price. This information can be used by call centre staff to improve and tailor their services to individual customers.

•

Customer data analysis: The captured data allow the categorisation and targeting of customers according to criteria set by the firm. This information can be used to improve the effectiveness of marketing campaigns.

•

Salesforce automation: The entire sales cycle from lead generation to close of sale and after-sales service can be facilitated using CRM.

2.

Workflow systems are currently mainly in large organisations. This is likely to remain the case. Discuss.

To answer this question adequately requires a distinction between large-scale production workflow systems and smaller scale administrative and ad hoc workflow systems. The former tends to be for functions such as operational processing of customer services such as issuing a loan or processing an insurance claim – these tend to be the preserve of the large companies. The latter are e-mail–enabled administrative applications for purchase order processing or in travel claims, for example. These could be used by small companies since the expenditure will be justified by the cost. Given the above, the arguments against the first statement are weak, but there are stronger arguments against the second statement. As more small companies use e-mail and intranets and as the cost of administrative workflow falls, adoption in small companies will grow. This is less likely to be the case with production workflow that is likely to remain expensive for small to medium organisations.

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3.

Neural networks, fuzzy logic and genetic programming are some of the latest artificial intelligence ideas. Are they likely to remain lab-based products, or is there potential for their use in industry?

This question is difficult to answer since there are relatively limited applications of these technologies. Their development has tended to be in academic labs, albeit in partnership with companies. There are no examples of mass-market applications for these products rather they are used in niche markets such as assessing financial risk.

However, it is an oversimplification to suggest that they are solely lab-based – they are widely used within this and other niches. A full answer will review how each of the techniques can be used after reviewing what is meant by each.

•

Neural networks. Hardware or software that attempts to emulate the processing patterns of the biological brain.

•

Fuzzy logic. Rule-based AI that tolerates imprecision by using non-specific terms to solve problems.

•

Genetic Programming. Most widely used in industry; genetic algorithms are a relatively recent development.

Essay questions 1.

Evaluate the different levels of integration in supply chain management (SCM).

Organisations in a supply chain can have varying degrees of cooperation and integration. In order of increasing ownership, the options are a market relationship, strategic partnerships and alliances, virtual organisation and vertical integration.

One way of looking at supply chain integration decisions is to use the technique of value-chain analysis (Chapter 2) which views the decision in terms of which set of activities (e.g. design and assembly) should be undertaken, rather than from the viewpoint of products or services. This approach allows consideration of the fact that the outsourcing of one product or service may have cost implications for other products and services which are produced using the same resources. However, value chain analysis aims to configure activities in order to minimise cost, given a firms competitive strategy, and not specifically define where (i.e. inside or outside the firm) activities should occur. This decision will need to be made within the constraints of the financial resources available to the organisation in acquiring supply chain elements and the challenge of the coordination of activities within the supply chain. The different degrees of integration in the supply chain are as follows: Market Relationships: Here each purchase is treated as a separate transaction and the relationship between the buyer and seller lasts as long as this transaction takes.

Strategic Partnerships and Alliances: This involves a long-term relationship in which organisations work together and share information regarding aspects such as planning systems and development of products and processes.

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Virtual Organisation: An organisation in which e-business is used to outsource more and more supply chain activities to third parties so that the boundaries between and within organisations become blurred.

Vertical Integration: The amount of ownership of the supply chain by an organisation.

2.

Review the changing tools available for decision-making at a strategic level within the organisation. What does this mean for senior managers?

There is a move away from EIS to the use of OLAP to interrogate data warehouses.

Question 2 in the Discussion questions section discusses whether or not this represents a genuine change in facilities available to users. For senior managers, there is now a greater choice of tools available. The data warehouse provides the facility in a single system to analyse data from across an organisation and to drill-down to identify the source of problems. Such facilities were not always available in earlier generations of EIS. 3.

Was the promise of expert systems in the 1980s delivered in the 1990s? Justify your answer.

Expert systems have not widely replaced human experts in many fields as had been envisaged. It has been found difficult to match the flexibility of humans. Expert systems are most relevant to complex problems in a well-defined subject area, such as assessing the credit risk of a loan applicant. The justification is that ES are not used in the majority of businesses.

4.

How must transaction processing systems be managed, given their missioncritical role in many organisations?

TPS are usually essential for achieving sales and providing customer service. It is important that they perform well. This means the following: •

Availability throughout the time customers place orders

•

Good performance so that customer details cannot be accessed

•

Good quality data.

To achieve good availability: •

The network connections must be reliable

•

The software must be reliable

•

Good support arrangements with suppliers must be in place.

5. What are the potential benefits and drawbacks to the use of autonomous robots?

Autonomous robots can learn, adapt and evolve using capabilities like machine learning and computer vision. For example, robots equipped with gyroscopes and accelerometers, along with an on-board camera and laser scanner, can tell how and 109 .

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where they are moving, and they ‘know’ what tasks they are capable of covering. The robots can then autonomously evaluate a task, divide it amongst themselves and collaborate to complete it. For example, when an individual robot reaches the end of its battery charge, it will transmit its position to a fully charged unit that can take over while it recharges.

Examination questions 1.

How can workflow software and groupware assist in re-engineering an organisation?

Both technologies can support the restructured organisation that often occurs as a consequence of re-engineering. Groupware functions such as e-mail and document sharing can help communication. Workflow software can be used to support a process by managing the subtasks that make up a process. It can also manage routing of information amongst staff and provide statistics on the efficiency of a process.

2.

Evaluate the use of 3D Printing for new product development.

3D printing is ideal for NPD as it enables prototypes to be developed and tested quickly.

3.

What special precautions need to be taken when using IT for managing human resources?

It is important that security measures are taken for human resource IT systems to protect the privacy of such information as salary details.

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PART 2

Business Information Systems Development

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CHAPTER 7

An introduction to acquiring and developing BIS Activities There are no activities for this chapter.

Case studies Case study 7.1: How project management turned into a Scrum 1.

Why and how did the company use the Scrum approach?

Need to become agile to respond to change and deliver products faster.

2.

What are the risks and benefits of using the Scrum approach?

Benefit is that it can greatly increase the speed of operation. Some companies find it difficult to understand and implement.

Case study 7.2: Lascelles Fine Foods 1.

Which method(s) of business systems software acquisition would you recommend to Lascelles Fine Foods Limited (LFFL)? Explain and justify your answer.

2.

Assuming that LFFL decides to go down the route of purchasing off-the-shelf packages, what steps do you recommend it takes to ensure that the applications which are selected meet their requirements?

The questions have been based around the case study Lascelles Fine Foods Limited (LFFL). This is a fictitious organisation and is not intended to bear any similarity to an existing company, past or present.

1. The recommended acquisition method must satisfy the main feasibility criteria (economic, technical, operational and organisational). LFFL has very little expertise in the acquisition of information systems. There are no IS/IT specialists within the business and there is little practical experience in the development of computerised information systems by end-users (EUs). LFFL is also operating in a business with a relatively low level of uniqueness (i.e. the probability that a suitable information system can be purchased is quite high).

Each of the alternative acquisition methods can be evaluated against the feasibility criteria outlined above.

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(a) Bespoke development. This can be done either internally (in which case, specialist staff will need to be hired) or contracted out to a third party (a software house).

Each feasibility criterion will be taken in turn: •

Economic. This acquisition method is expensive, especially so for LFFL. Given the company’s turnover, it is unlikely that the benefits to be gained outweigh the costs.

•

Technical. There is no doubt that a solution can be developed by employing the services of a software house. Similarly, specialist staff can be recruited by LFFL either on a permanent or on a contract basis. With either acquisition method, however, it will be necessary for the IS/IT personnel to acquaint themselves very quickly with the way in which LFFL operates.

•

Organisational. It is very probable that a bespoke solution will fit in with the day-to-day practices within LFFL since the solution can be designed around them.

•

Operational. Similarly, a bespoke solution can be designed so that it conforms to the required speed, volume, usability and reliability parameters.

(b) End-user development.

•

Economic. While end-user development is good for developing personal or departmental applications more cheaply than a normal bespoke solution, there is still the opportunity cost of the ‘normal’ business activities that those personnel would normally carry out which must be undertaken by others.

•

Technical. Within LFFL, there is currently insufficient expertise to deliver the required solution. It will need to either employ additional staff with the necessary skills or train existing staff, or possibly both. In any event, costs will increase.

•

Organisational. End-user-developed solutions tend to be for personal or departmental use. It is possible, therefore, that this acquisition method may concentrate on local solutions at the expense of company-wide considerations.

•

Operational. There is a risk that, unless the end-user developer is particularly skilled, a solution developed in this way will not have the required performance characteristics.

(c) Purchase of an off-the-shelf package. Packages may come in standard or tailored form. While it may be useful to differentiate amongst them, the comments apply largely to both.

•

Economic. This acquisition method is the cheapest for any level of technical complexity when compared with an equivalent solution acquired by one of the alternative methods.

•

Technical. As mentioned above, there appears to be nothing so specialised or unique about LFFL’s business that a packaged solution is incapable of dealing with. It may be that some tailoring is required, in which case a vendor must be sought who will customise their own software.

•

Organisational. This is the greatest area of difficulty for this acquisition method. It may be that organisational practices will have to change to fit in with software if the required tailoring cannot be implemented.

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•

Operational. It is probable that off-the-shelf software will be written to conform to performance criteria that most organisations will find acceptable. The issue for LFFL is to assure itself that the selected solution conforms to its requirements.

The key objective for this question is to get the students thinking logically about the problem by constructing a framework for analysing the issues. An additional feature that could be incorporated into the above is the criteria outlined in the section ‘Factors affecting software acquisition’ in Chapter 7.

2. For this question, the students need to consider the relevant steps within the system’s development life cycle. At this stage, students will not have covered the more detailed aspects of analysis and design. However, it is still possible to come up with a broad explanation of what should be done.

The decision to select an off-the-shelf package implies that the feasibility study has already been completed. The steps that the company needs to follow are as follows: •

Analyse requirements. Fact-finding methods and documentation tools are examined in Chapter 11. The outcome from this process should be a requirements catalogue which contains the details of what the new system is to do.

•

Design. This is dealt with in more detail in Chapter 12. The important point here is for students to not be distracted by looking at design activities such as program and database design but to concentrate on identifying design elements that need to feature in the packages that are examined.

•

Build. The build stage for LFFL will differ from a bespoke solution because there will be no programming activity. However, the testing and conversion phases will still be needed (although in the case of LFFL, ‘conversion’ means converting paper-based records into computerised ones). Of particular importance will be user-acceptance testing to ensure that the software selected meets LFFL’s requirements.

LFFL may seek to use external consultancy services to assist in selecting the most appropriate software package. This is because it may be felt that it currently has insufficient expertise within the business to make an informed decision about what software to purchase.

Exercises Self-assessment exercises 1.

Explain what the main similarities and differences are between bespoke development and end-user development.

The answer should begin by explaining that both development methods are intended to produce solutions that are specific to the organisation developing them. The differences should include the scale of the development, the area of the organisation in which the application is likely to be used (departmental v. corporate) and the probable skill mix of the developer.

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2.

Why would a small business be more constrained in its choice of software acquisition method than a large one?

The answer should look at the various aspects of feasibility related to alternative acquisition methods and how these relate to organisations of different sizes. It should also be pointed out that smaller organisations are likely to have less well-developed IS/IT skills amongst their personnel and this would reduce the options in relation to bespoke and end-user development.

3.

What are the main differences between the analysis and design steps of the traditional waterfall model of systems development?

The answer requires students to emphasise that analysis is fundamentally about what the proposed system is to do, whereas design is about how it is going to do it. The difference is also about identifying requirements on the one hand and solutions on the other.

4.

What are the main components of the system build stage?

Students should be able to recall the three main components and say a little about each one.

•

Programming. The design specifications are converted into program code using appropriate programming languages. Mention of third- and fourth-generation languages is desirable.

•

Testing. The programs that have been written need to be tested, both individually and together. It would be useful if students could identify alternative aspects of testing including module, subsystem, system, volume, performance and useracceptance testing.

•

Conversion. The emphasis here should be on methods of converting data from old manuals or computer-based systems to the formats required in the new system. It is not appropriate here to talk about ‘cutover’ methods, such as parallel running or pilot cutover.

5.

Explain how the application of the waterfall model differs between (a) the purchase of an off-the-shelf package and (b) an end-user-developed application.

The danger here is of being drawn into the trap of treating end-user applications development in the same way as bespoke development by IS/IT professionals. In the case of the latter, the conventional approach is to follow each step of the model in a logical and systematic manner. In the case of the former, end-user developers are more likely to experiment and so the development process becomes more akin to iterative prototyping. In other words, the analysis and design and activities tend to become merged. It should also be pointed out by the student that the activities tend to be on a smaller scale with end-user development, with much shorter development times.

6.

Briefly review the main advantages and disadvantages of bespoke development when compared with off-the-shelf packages.

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One of the best ways for the student to present this is in the form of a two-by-two matrix, showing acquisition method on one axis and advantages and disadvantages on the other. Alternatively, you may prefer your students to look at various factors such as acquisition time, quality, flexibility, maintainability and cost and compare each acquisition method against these criteria.

Discussion questions 1.

‘The rise of rapid applications development is mainly a response to the failure of traditional systems development methodologies to deliver the right system at the right price and at the right time’. Discuss.

This question asks students to reflect on whether or not a traditional approach to systems development (such as systems development life cycle [SDLC]) is inevitably going to result in systems that take longer to develop (and are therefore more expensive) than alternative methods. The question also points to the assertion that since business requirements change much more rapidly today, development methods which are more long-winded may result in systems developers solving what has become yesterday’s problem rather than today’s or tomorrow’s. Students need to analyse whether or not methodologies such as systems development life cycle (SDLC) inevitably result in longer development times or if they can be modified to compete with alternatives such as dynamic systems development methodology (DSDM).

It should also be remembered that rapid applications development (RAD) looks at the whole life cycle of systems development, whereas many methods concentrate on analysis and design activities. With RAD, the distinction between analysis and design becomes blurred through the use of evolutionary prototyping. Not only is prototyping used as a means of refining further what users actually want from an information system but it is also used to identify the design requirements (input, output, processing etc.). Finally, prototypes are developed and refined (using 4GLs and application generators) so that they are implementable as the finished solution.

RAD is also characterised by the use of timeboxes (typically 90 days) where system products are delivered to end-users at the end of each timebox.

2.

‘End-user applications development would be far less popular if central IS/IT departments did not have such a large applications development backlog’.

Discuss.

This question requires two issues to be addressed. First, does an applications development backlog indeed exist, and if so, why? Secondly, are the kinds of applications developed by end-users those which might otherwise be developed by information systems professionals?

To take the first issue, it is generally accepted that there is a worldwide shortage of IS/IT professionals and this is reflected in high salary levels and rapid staff turnover. At the time of writing, an extensive amount of work is also going into millennium compliance projects. However, the applications development backlog is not just a recent phenomenon, having existed for several years as users’ expectations have risen and business information requirements developed.

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With respect to the second point, it is necessary to draw a distinction between company-wide information systems and those developed for personal and departmental use. The tendency is for organisations to concentrate systems developments on those applications that can be seen to benefit the organisation as a whole rather than a single functional area (or part of a functional area) within the business. Similarly, the launch and subsequent development of the PC and the associated software tools that can be used with it have created an opportunity for non-IS/IT personnel to develop applications using spreadsheets, databases and report generators.

The argument is, therefore, not so much that end-user applications development is taking place instead of corporate development, but rather that end-user development is in addition to the corporate development work that would still take place. Rather like national health services, the demand for information systems is something of a bottomless pit – even though many resources are pumped in, demand is still greater.

Self-help becomes the name of the game, and information systems are no different.

Essay questions 1.

What do you believe to be the main differences between large and small organisations in deciding the best approach for information systems acquisition?

As with similar questions above, the three primary issues are: •

economic – the ability of the two to finance IS/IT;

•

capability – the expertise within the organisations to make effective procurement decisions;

•

complexity – the degree of sophistication that the applications software needs in order to fulfil the organisation’s requirements.

With these and similar questions, it is advisable to ask students to give specific examples of cases from the computing press to illustrate their answers.

2.

In what circumstances do you think that rapid applications development would be (a) appropriate and (b) inappropriate when carrying out systems analysis and design?

This question runs very much along the same lines as the previous one since many of the issues are repeated. It may be desirable, therefore, to combine the two into a single question where both aspects can be analysed more efficiently. In addition to the above points, there are some additional ones.

•

System quality. There is a danger of RAD being perceived as a ‘quick and dirty’ approach to systems development. While this should not be the case, there is a risk if all staff (end-users and IS/IT professionals alike) are not committed to making RAD work. If full commitment does not exist, then an organisation may wish to consider a more traditional approach to system development.

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•

Staff expertise. To be effective, systems development staff need experience in running highly interactive development projects. There has been a tendency for IS/IT staff to speak the language of computing, while other staff speak the language of business. It is necessary, therefore, for staff to overcome the communications gap. Increasingly, it is staff with hybrid skills (i.e. both business and computing skills) who are able to overcome this gap and, arguably, play an important role in successful RAD projects.

3.

Is the end-user development approach to business software development something which you think should be encouraged, or do you believe that applications software for business is best left to information systems professionals?

As discussed above, it is important for students to differentiate amongst the types of information likely to be developed by end-users and IS/IT professionals. Many of these issues have been discussed in the analysis of Discussion question 2. However, this question goes further and is looking for analysis of the advantages and disadvantages of end-user development together with a look at how end-user development can be managed effectively.

Advantages of end-user development that are frequently cited include the following: •

Reduces (but may not eliminate) the need for professional analysts and programmers

•

Reduces communications overheads of users explaining requirements to IS professionals; also reduces risk of mistranslation of requirements

•

Frees IS professionals to concentrate on tasks requiring their expertise

•

Helps reduce the applications development backlog associated with completely centralised systems development

•

Allows applications to be developed more quickly – therefore the business can benefit more quickly (e.g. increased managerial effectiveness due to better decisionmaking)

•

Can encourage innovation and creativity in the use of IS/IT: removes bureaucratic barriers, resource constraints, time delays and political barriers

•

Allows end-users to feel a greater degree of control over their working environment (and encourages greater IS/IT proficiency amongst end-users).

However, there are also risks! These include the following: •

Using inaccurate specifications or assumptions about organisation activities

•

Applying incorrect formulas or models

•

Using incomplete information

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•

Using outdated information

•

Selecting untested or inappropriate software

•

Failing to follow standards or guidelines

•

Failing to test assumptions or models

•

Corruption of centrally held data by uploading erroneous data

•

Hazards of insecure systems open to accidental and deliberate damage

•

Hazards of truly personal systems which are unreadable, not documented and not transferable.

One possible solution to the problems posed by uncontrolled end-user development is the information centre.

The information centre concept was originally spread by IBM – a facility which would focus on delivering systems directly to users’ systems and intended to be smaller, cheaper and less formal than specialist developed systems. There is a range of services and functions offered by a typical information centre: •

Software advice – compatibility (hardware and software) and package availability

•

Application development – requires the skills of an analyst programmer; an emphasis on ‘quick and dirty’ solutions

•

Hardware consultancy – detailed specifications (possibly constrained by organisational hardware strategy)

•

Training – packages, general skills, etc.

•

Data supply – from central files and databases to the appropriate PC package (and possibly the other way)

•

End-user development management – to prevent the development of applications in an uncontrolled manner (this could lead to excessive data redundancy, incompatible data formats, reinvention of the wheel, poor hardware and software acquisition and poor standards of data integrity).

Finally, it is helpful to look at some recommendations which, if followed, can reduce the risks posed by end-user-developed information systems: •

Download data from the central database to the PC or workstation rather than rekey data as the data will already have been validated

•

Avoid user data entry to central databases except via applications especially written for the purpose by the IS department

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•

Set out standards for EU developed systems which are rigidly enforced (including clear data definitions, validation rules, backup and recovery routines and security measures)

•

Document the application, especially why the application was developed

•

Review and test user-developed software, for example, by IC personnel

•

Train end-users

•

Facilitate communication between user, for example, through user groups, newsletters, briefings and so on.

4.

Compare and contrast the traditional waterfall model with lean and agile approaches to software development with particular emphasis on the ability to deliver business value.

The best answers to this question might be structured on the following lines.

•

Explanation of the traditional waterfall model – philosophy, stages, sequential nature etc.

•

Explanation of typical agile methods characteristics – iterative nature, heavy emphasis on user involvement, timeboxing etc.

•

Business value aspects – comparison of each method with respect to the following: •

Timeliness a) Waterfall method may take longer – requirements may have changed b) Agile methods may enable software implementation in phases (critical parts first).

•

Cost a) Waterfall method may be more expensive but costs may be easier to predict/control b) Agile methods may be cheaper if required business solutions are reached more quickly (and benefits from system can be realised more quickly) c) Agile methods can stop development as soon as ‘enough’ of the system has been developed and implemented.

•

Quality a) Waterfall method may result in better documentation and better fit with specification but may be less fit for purpose if requirements have evolved b) Waterfall method may take better account of security and related issues c) Agile methods may result in better fit with business needs due to iterative nature of development and close user involvement.

As usual with an essay of this nature, it is expected that students will reference relevant academic journal articles and also case studies from trade-based publications such as Computing and Computer Weekly.

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Examination questions These examination questions are of the short answer form. As such, they are designed to encourage recall of essential concepts. For applied questions, please see the questions above that are associated with the LFFL case study.

1.

Explain the terms ‘bespoke development’, ‘off-the-shelf package’ and ‘enduser computing’. Illustrate your answer with some of the reasons cited in favour of each of these methods of application software acquisition.

The students should present an answer along with the following lines: Bespoke development occurs when either in-house IS/IT staff or a third party such as a software house develops applications software for a business. The software is tailored to the organisation’s specific requirements. Bespoke solutions are required where packaged software cannot be procured which offers the necessary functionality and/or would require changes in working practices that are unacceptable to the organisation.

An off-the-shelf package is a software product that has been written by a company with the intention of selling it to many customers. Benefits include the ability to purchase sophisticated software solutions at a much lower cost than bespoke development, the increased probability that the software will be free from bugs when implemented and access to upgraded versions of the software in return for an annual maintenance charge.

End-user computing occurs when non-IT professionals develop software solutions themselves, often using PC-based tools such as spreadsheet, database and report generator packages. These applications are usually for personal and departmental use, although, in the case of small businesses, the software may have organisation-wide use.

The benefits include the ability to produce tailored solutions without the expense of using IS/IT personnel, the freeing up of IS/IT professionals to concentrate on developing corporate information systems and also the sense of ownership that comes from having developed software oneself.

2.

Give three advantages usually associated with prototyping.

In answering this question, the student would be expected to do more than just produce a list of points. Each advantage should come with an explanation. For example: •

Throwaway prototyping where the prototype is developed during the early stages of the requirements process can be used to elicit knowledge about what the intended users of the information system want. It is argued that by working through sample screens and reports, both user and analyst can gain a better and quicker understanding of the users’ requirements.

•

Evolutionary prototyping has the benefit of helping develop information systems more quickly than traditional structured methods because the analysis, design and build processes are encapsulated into a single iterative process. This in turn means that the risk of developing solutions that do not meet business requirements is reduced, and faster development means that business benefits can accrue more quickly.

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Finally, regardless of which approach is taken, a very important aspect of prototyping is that extensive interaction between user and developer occurs. This means a reduced risk of mistranslation of users’ requirements, improved communication between technical and business personnel and a greater sense of ownership of the completed system by the user community.

3.

During a bespoke development project, the systems development life cycle will include a number of steps from requirements analysis, design and system.

Which of these steps is relevant to an off-the-shelf system? Which activities might be involved?

This question asks students to differentiate between the activities appropriate to purchasing a package as distinct from developing a bespoke solution. One approach is for students to look at each stage and identify the activities to be undertaken and the detail which is required: •

Initiation. This will happen, regardless of acquisition method.

•

Feasibility. One of the outcomes of this stage will be a ‘make or buy’ decision.

Buying a package implies that the bespoke solution has been dismissed because of either cost or other considerations. It will still be necessary to scrutinise the proposed package solution under the economic, technical, organisational and operational feasibility criteria.

•

Analysis. Regardless of the acquisition method, user requirements will still need to be determined. However, an option open to the procurers at this stage is to identify alternative packages and use the information gained from reviewing them to come up with a more informed decision about the real user requirements. It is still appropriate to carry out fact-finding and documentation exercises and a requirements catalogue still needs to be produced.

•

Design. A bespoke solution (developed using traditional methods) will require all aspects of the system designed, whereas the purchase of an off-the-shelf package will examine the design features that need to exist within the purchased software.

For example, certain reports may need to be produced and certain information about the business stored. In addition, the package must have the right ‘look and feel’ so that the intended users will not be deterred from using the system.

•

Build. Unless the package is to be tailored in some way, there will be no programming involved during this stage. With respect to testing, the intending purchaser will still have to be satisfied that the package will deliver the right level of performance and capacity to cope with the expected volume of transactions.

While module, subsystem and system testing will have been performed by the vendor, the purchaser must still be sure that the package will work within their organisation. User-acceptance testing is also required. Finally, data will still need to be converted from existing manual or computerised systems. This means that the purchaser may need special data entry screens or conversion programs to be written to convert data to the required format and structure.

•

Implementation. A package solution will still need implementing. The changeover method (parallel running, pilot, etc.) will still need to be selected. A difference here, though, is that, while a bespoke development can be maintained by the IS/IT staff if 122 .

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corrections are required, there is no such flexibility with the package solution. It is unlikely that the package vendor will amend the software if it does not seem to do exactly what it was thought it would do.

•

Post-implementation review. This has benefits, regardless of the software acquisition method. There are still lessons to be learned for future projects. It is also worth reflecting on whether or not the package solution has delivered the benefits that were envisaged, or if a bespoke solution would have been better.

4.

Explain how the spiral model of systems development which can be applied to RAD differs from the traditional waterfall model. Which do you believe represents the best method of developing information systems?

Students should identify the iterative nature of the spiral model when analysis, design and build can be repeated, distinct from the linear nature of the traditional approach.

The spiral model or any other iterative approach has the following advantages: •

Meets business requirements of end-users better through greater user involvement via prototyping

•

Errors more likely to have been identified during prototyping and removed

•

Usually faster and therefore less costly than other methods.

Additional Tutorial Exercises Tutorial Exercise 1 – Project Initiation: A role playing exercise Tutor’s Guide This exercise requires planning a week ahead. It is recommended that the tutorial group is split in two, one half being given the Sales Director Brief and the other the Finance Director Brief. Each side should have a week to read the material and prepare a case for their side of the argument. Each half tutorial group should select one of their numbers to present the case at the meeting – to be held in the following week’s tutorial. Those not taking part in the meeting should act as observers to note down the conduct and outcome of the meeting.

The two meeting participants should be encouraged to present a coherent case, backed up by appropriate evidence. Use of presentation aids should be encouraged.

Key learning points Meetings need to be properly constructed if they are not to end up as a disorganised slanging match. There are also real business issues to be explored in deciding whether information systems acquisition should be embarked upon.

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Sales director brief Your role You are the Sales and Marketing Director of a small manufacturing company (elite folding tables limited (EFTL)) which produces folding tables for use in schools, social clubs, etc. You completed an M.Sc. in Managing Information Technology two years ago and since then have become increasingly frustrated at the shortcomings inherent in the current information systems at EFTL. Your belief is that Anthony Jackson, the Finance Director (FD), is unwilling to commit the resources to acquire new systems because of an emotional attachment to the current system rather than for other reasons that he might suggest.

You have estimated the cost of the hardware and software required to be £175,000. You also believe that if a proper training program is put in place, the new systems can be implemented with minimal disruption. Indeed, you are convinced that the system improvements indicated below will mean that employee satisfaction will increase and that business costs will be reduced.

You are now preparing for a showdown meeting with Anthony Jackson who is prepared to resist the demand for new hardware and software for as long as possible.

Company brief Elite folding tables limited (EFTL)

1. Introduction EFTL is a long-established company operating in the furniture-manufacturing industry.

The company has its administrative headquarters in Mayfield, East Sussex, and has manufacturing premises on the same site. All customer deliveries are from the Mayfield-based warehouse using established national carriers. In addition, EFTL sell complementary products such as office chairs which have been purchased from other manufacturers.

The company has enjoyed steady growth over many years and is now seeking to develop markets overseas as well as taking advantage of new developments in electronic commerce. EFTL’s turnover was £5.9 million in the year to April 1998 with net profitability of 10.6% of turnover. The company has a reputation for producing high-quality products and already has BS5750 and ISO9001 accreditation. It is hoping to maintain this competitive edge by continuing to provide quality products which meet all present and anticipated quality standards. It is hoping to increase turnover by 10% per year after inflation over the next five years and increase net profitability to 12.5% of turnover over the same period.

2. Organisational structure EFTL is organised around two broad sets of activities: •

Office management (including sales, marketing and finance)

•

Manufacturing operations (including warehousing, purchasing and distribution).

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The overall management of the business is conducted by a team of four directors: Don Farmer

-

Managing Director

Anthony Jackson

-

Finance Director

John Wood

-

Production and Purchasing Director

You

-

Sales and Marketing Director

As EFTL is a small business, there is no HRM department. HRM issues are dealt with by the managing director. He also has responsibility for running the monthly payroll.

The Main Office is staffed by an office manager and five sales and administration assistants. The office is responsible for acting as the front line link with customers, processing customer orders, credit checking and processing customer payments. In addition to the six Main Office staff, there is an office cleaner (part-time) and an outworker who produces labels for the finished products.

In addition to the Main Office staff, there are two regional salespersons responsible for dealing with key account customers. There is a sales agent who covers the Scotland area and a sole distributor who covers the Irish Republic.

The Manufacturing operations area employs 22 shop floor operatives, an operations manager, four operations supervisors, a maintenance engineer, a development engineer and one full-time cleaner.

3. The product EFTL manufactures what is widely regarded as the ‘Rolls-Royce’ of lightweight folding tables. The product comes in four basic styles, 16 different colours and around a dozen different sizes (depending on the style). In total, there are some 3,178 variations available. All tables are manufactured to order with a typical lead time of three to four weeks. Urgent orders can be dealt with more quickly if necessary.

The key selling points for the table include the following: •

A unique leg locking mechanism which allows quick and easy erection and storage

•

Lightweight for ease of handling but also very strong

•

A very high level of stability, given their lightweight design

•

Very large combination of style, colour and size to cater for virtually any requirement

•

Ability to tailor the product to customer’s specific requirements.

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The table is available in four styles: Standard:

aluminium legs and smooth profiled table edging

Profile:

aluminium legs with contoured table edging

Profile Extra:

aluminium clad steel legs for extra strength and stability, plus contoured table edging

Executive:

aluminium clad steel legs plus unique polymer edging (especially useful in catering or health care applications where ease of cleaning is paramount).

Each model offers excellent value for money at its respective price point.

4. Customer and sales details Over 99% of EFTL’s business is in the United Kingdom with only a tiny proportion of output going to export. The market is made up of three broad areas.

Education. About 35% of EFTL’s business is with local education authorities who purchase tables for schools and colleges. EFTL also pay for entries in equipment suppliers catalogues to assist with their marketing in this area.

Trade Distributors. These include such organisations as Neat Ideas, Viking Direct and similar organisations. About 30% of EFTL’s business comes from these sources.

Private Direct. The remaining 35% of the company’s business is with private buyers who approach the company directly. EFTL deal with about 20 customers per week through this source. The company advertises in relevant magazines for the specific interest groups (such as Scouts and Guides, Church groups, etc.) who may be interested in their products.

EFTL have calculated that the average order size is 6.5 tables per order. EFTL process between 55 and 60 orders per day.

5. Manufacturing operations Each table is made up of a number of components. Some of these are bought in as a complete unit (such as the plastic leg retainer 5 unit and the plastic corner connectors), while others are fabricated within the factory from specified materials.

The manufacturing process is divided into four sets of activities, with batches of work flowing amongst processes.

Fabrication. These activities include the following: •

Cutting side and end extrusions to size

•

Cutting leg tubing to correct length

•

Drilling holes in middle sections to accommodate legs

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•

Inserting plastic leg retainers into middle sections

•

Inserting corner mouldings into ends of side extrusions.

Frame Assembly. The activities in this area include the following: •

Assembly of outer frame

•

Leg unit bending and assembly

•

Insertion of legs into middle sections

Top Production. Here the table tops are manufactured as follows: Formica laminates cut to size Laminates bonded to hardboard (sourced pre-cut to size from Portugal) Table-top edges routered to size.

Final Assembly. Activities include the following: •

Table tops inserted into frame assembly

•

Final cleaning and checking

•

Packaging

•

Barcoded label printing.

The customers’ orders are printed off from the sales order processing software and organised into batches. Each batch represents a week’s production for the manufacturing department and a copy of the order details is made available to each of the manufacturing areas at the start of the week.

Between 300 and 320 tables are produced every week with the manufacturing time for each table being 29 minutes from start to finish.

6. Information systems EFTL’s current information systems date from 1990. They are in the form of a single integrated software package that covers all the major functional areas of the business including: •

Sales order processing

•

Credit checking

•

Accounts receivable

•

Accounts payable

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•

Stock control (raw materials)

•

General (nominal) ledger

•

Payroll

•

Manufacturing operations.

The software was based originally on a general manufacturing package but has been extensively modified by the suppliers to fit in with EFTL’s evolving business needs.

The software supplier has performed this service for many of its customers with the result that it needed to support multiple different versions of the software. The software runs on a DEC mini-computer with dumb terminals attached. The company also has two stand-alone PCs for word processing and other general office work.

The current position is that the supplier is no longer able or prepared to modify the software further.

You have decided to commission an external consultant to identify the developments that must take place if the business is to prosper. The managing director is aware that you have done this, but Anthony Jackson is not. It has been suggested that the consultant may identify the following: •

Introduction of workflow monitoring software so that the status of each order can be tracked more effectively

•

A new clocking system for employee time keeping

•

Introduction of a materials requirements planning system to enable better planning of raw material supplies

•

Electronic links to main suppliers and customers to make business transactions more efficient

•

Creation of linkages from the main order processing system to their main carriers despatch system

•

Ability to create management reports from company data that already exists

•

Increased use of barcoding of raw materials to allow a ‘perpetual stock take’ to be implemented.

7. Other activities Marketing is your responsibility. Your responsibilities include the following: •

Liaison with an external graphic design agency to produce the company’s catalogue

•

Overall responsibility for the company’s website

•

Ensuring that entries are made into other suppliers’ catalogues

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•

Advertising in relevant private sector special interest publications

•

Arranging mail shots to existing and prospective customers.

The company also offers an aftersales service to its customers. While the product is a very durable and hard-wearing one, it is sometimes necessary to replace the leg retainer unit. This will typically be when a table is 10 or more years old.

On the HRM side, the MD has overall responsibility for hiring, firing, training and developing staff. EFTL also uses the services of a recruitment agency for securing contract employees and new full-time staff. When seeking to dismiss staff, the company will seek external advice on the correct procedures to adopt.

Purchasing is managed by John Wood on a day-to-day basis, with the overall strategic direction being set by the joint managing directors. John’s responsibility is to ensure that there is always a sufficient supply of the correct raw materials to allow production to take place. When any raw material item is running in short supply, a purchase order is raised with the appropriate supplier. EFTL’s suppliers include the following: •

Hydro Aluminium Century (aluminium extrusions)

•

Sapa Tibshelf (galvanised steel tubing)

•

B&S Mouldings (corner inserts and leg retainers)

•

Coutts packaging

•

Prior Packaging

•

Styropack (corner protectors for transit).

One of the company’s objectives is to improve their supplier links and move more towards just-in-time manufacturing methods.

EFTL have three main competitors: Samsonite (USA), Sico Europe and Lamata Contract Furniture. Their products tend to be heavier and stack rather than fold. EFTL have a new table in development which they hope will provide improved export opportunities by offering the same benefits as their normal range but with increased strength and stability.

Source: On the basis of the EFTL Case Study. © Simon Hickie, April 2005.

Financial director brief Your role You are the Financial Director of a small manufacturing company (EFTL) who produce folding tables for use in schools, social clubs, etc. You are also in overall charge of the IT provision and exercise tight control over systems procurement activities. In 1990, you had a major part to play in the acquisition of a new information system and felt at

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that time that you were acquiring state-of-the-art systems that would take you into the next century, subject to on-going update and modification.

You are aware that the Sales and Marketing director (Clare Butlin) is unhappy with the current position, especially so over the last two years since she completed her M.Sc. in Managing Information Technology. However, you are also aware that to replace the current information systems will cause disruption to business operations and cost EFTL about £175,000 to implement new systems. Your inclination is to check that the current system is millennium compliant and run with the system for another three years before making any changes. The money saved can then be used to update older manufacturing equipment and also to plough into new product development. You are also anxious about scrapping a system that has cost £500,000 over the last 8 years (including original purchase price plus ongoing maintenance and upgrading).

You are now preparing for a showdown meeting with Clare Butlin who is prepared to fight very hard for new hardware and software.

Company brief Elite folding tables limited (EFTL)

1. Introduction EFTL is a long-established company operating in the furniture-manufacturing industry.

The company has its administrative headquarters in Mayfield, East Sussex and has manufacturing premises on the same site. All customer deliveries are from the Mayfield-based warehouse using established national carriers. In addition, EFTL sell complementary products such as office chairs which have been purchased from other manufacturers.

The company has enjoyed steady growth over many years and is now seeking to develop markets overseas as well as taking advantage of new developments in electronic commerce. EFTL’s turnover was £5.9 million in the year to April 1998 with net profitability of 10.6% of turnover. The company has a reputation of producing highquality products and already has BS5750 and ISO9001 accreditation. It is hoping to maintain this competitive edge by continuing to provide quality products which meet all present and anticipated quality standards. It is hoping to increase turnover by 10% per year after inflation over the next five years and increase net profitability to 12.5% of turnover over the same period.

2. Organisational structure EFTL is organised around two broad sets of activities: •

Office management (including sales, marketing and finance)

•

Manufacturing operations (including warehousing, purchasing and distribution).

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The overall management of the business is conducted by a team of four directors: Don Farmer

-

Managing Director

You

-

Finance Director

John Wood

-

Production and Purchasing Director

Clare Butlin

-

Sales and Marketing Director

As EFTL is a small business, there is no HRM department. HRM issues are dealt with by the managing director. Don Farmer also has responsibility for running the monthly payroll.

The Main Office is staffed by an office manager and five sales and administration assistants. The office is responsible for acting as the frontline link with customers, processing customer orders, credit checking and processing customer payments. In addition to the six Main Office staff, there is an office cleaner (part-time) and an outworker who produces labels for the finished products.

In addition to the Main Office staff, there are two regional salespersons responsible for dealing with key account customers. There is a sales agent who covers the Scotland area and a sole distributor who covers the Irish Republic.

The Manufacturing operations area employs 22 shop floor operatives, an operations manager, four operations supervisors, a maintenance engineer, a development engineer and one full-time cleaner.

3. The product EFTL manufactures what is widely regarded as the ‘Rolls-Royce’ of lightweight folding tables. The product comes in four basic styles, 16 different colours and around a dozen different sizes (depending on the style). In total, there are some 3,178 variations available. All tables are manufactured to order with a typical lead time of three to four weeks. Urgent orders can be dealt with more quickly if necessary.

The key selling points for the table include the following: •

A unique leg locking mechanism which allows quick and easy erection and storage

•

Lightweight for ease of handling but also very strong

•

A very high level of stability, given their lightweight design

•

Very large combination of style, colour and size to cater for virtually any requirement

•

Ability to tailor the product to customer’s specific requirements.

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The table is available in four styles: Standard:

aluminium legs and smooth profiled table edging

Profile:

aluminium legs with contoured table edging

Profile Extra:

aluminium clad steel legs for extra strength and stability, plus contoured table edging

Executive:

aluminium clad steel legs plus unique polymer edging (especially useful in catering or health care applications where ease of cleaning is paramount)

Each model offers excellent value for money at its respective price point.

4. Customer and sales details Over 99% of EFTL’s business is in the United Kingdom with only a tiny proportion of output going to export. The market is made up of three broad areas.

Education. About 35% of EFTL’s business is with local education authorities who purchase tables for schools and colleges. EFTL also pay for entries in equipment suppliers catalogues to assist with their marketing in this area.

Trade Distributors. These include such organisations as Neat Ideas, Viking Direct and similar organisations. About 30% of EFTL’s business comes from these sources.

Private Direct. The remaining 35% of the company’s business is with private buyers who approach the company directly. EFTL deal with 20 customers per week through this source. The company advertises in relevant magazines for the specific interest groups (such as Scouts and Guides, Church groups, etc.) who may be interested in their products.

EFTL have calculated that the average order size is 6.5 tables per order. EFTL process between 55 and 60 orders per day.

5. Manufacturing operations Each table is made up of a number of components. Some of these are bought in as a complete unit (such as the plastic leg retainer unit and the plastic corner connectors), while others are fabricated within the factory from specified materials.

The manufacturing process is divided into four sets of activities, with batches of work flowing amongst processes.

Fabrication. These activities include the following: •

Cutting side and end extrusions to size

•

Cutting leg tubing to correct length

•

Drilling holes in middle sections to accommodate legs

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•

Inserting plastic leg retainers into middle sections

•

Inserting corner mouldings into ends of side extrusions.

Frame Assembly. The activities in this area include the following: •

Assembly of outer frame

•

Leg unit bending and assembly

•

Insertion of legs into middle sections.

Top Production. Here the table tops are manufactured as follows: •

Formica laminates cut to size

•

Laminates bonded to hardboard (sourced pre-cut to size from Portugal)

•

Table-top edges routered to size.

Final Assembly. Activities include the following: •

Table tops inserted into frame assembly

•

Final cleaning and checking

•

Packaging

•

Barcoded label printing.

The customers’ orders are printed off from the sales order processing software and organised into batches. Each batch represents a week’s production for the manufacturing department and a copy of the order details is made available to each of the manufacturing areas at the start of the week.

Between 300 and 320 tables are produced every week with the manufacturing time for each table being 29 minutes from start to finish.

6. Information systems EFTL’s current information systems date from 1990. They are in the form of a single integrated software package that covers all the major functional areas of the business including: •

Sales order processing

•

Credit checking

•

Accounts receivable

•

Accounts payable

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•

Stock control (raw materials)

•

General (nominal) ledger

•

Payroll

•

Manufacturing operations.

The software was based originally on a general manufacturing package but has been extensively modified by the suppliers to fit in with EFTL’s evolving business needs.

The software supplier has performed this service for many of its customers with the result that it needed to support multiple different versions of the software. The software runs on a DEC mini-computer with dumb terminals attached. The company also has two stand-alone PCs for word processing and other general office work.

The current position is that the supplier is no longer able or prepared to modify the software further.

7. Other activities Marketing is the responsibility of Clare Butlin. Her responsibilities include the following: •

Liaison with an external graphic design agency to produce the company’s catalogue

•

Overall responsibility for the company’s website

•

Ensuring that entries are made into other suppliers’ catalogues

•

Advertising in relevant private sector special interest publications

•

Arranging mail shots to existing and prospective customers.

The company also offers an aftersales service to its customers. While the product is a very durable and hard-wearing one, it is sometimes necessary to replace the leg retainer unit. This will typically be when a table is 10 or more years old.

On the HRM side, the MD has overall responsibility for hiring, firing, training and developing staff. EFTL also uses the services of a recruitment agency for securing contract employees and new full-time staff. When seeking to dismiss staff, the company will seek external advice on the correct procedures to adopt.

Purchasing is managed by John Wood on a day-to-day basis, with the overall strategic direction being set by the joint managing directors. John’s responsibility is to ensure that there is always a sufficient supply of the correct raw materials to allow production to take place. When any raw material item is running in short supply, a purchase order is raised with the appropriate supplier. EFTL’s suppliers include the following: •

Hydro Aluminium Century (aluminium extrusions)

•

Sapa Tibshelf (galvanised steel tubing)

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•

B&S Mouldings (corner inserts and leg retainers)

•

Coutts packaging

•

Prior Packaging

•

Styropack (corner protectors for transit)

One of the company’s objectives is to improve their supplier links and move more towards just-in-time manufacturing methods.

EFTL have three main competitors: Samsonite (USA), Sico Europe and Lamata Contract Furniture. Their products tend to be heavier and stack rather than fold. EFTL have a new table in development which they hope will provide improved export opportunities by offering the same benefits as their normal range but with increased strength and stability.

Source: On the basis of the EFTL Case Study (c) Simon Hickie, April 2005.

Tutorial Exercise 2 – Trust me, I’m a salesman Tutor’s Guide This exercise is designed to help students evaluate some of the issues relating to software acquisition alternatives, especially when an organisation has established, but outdated, information systems.

It is recommended that the tutorial be conducted as follows: 1. Give students case study to read 2. Split students into groups of four 3. Each group is to discuss case study and attempt to answer the questions 4. Each group is to present their answers: take each question in turn and summarise on the whiteboard 5. Draw conclusions – what do you think?!

Our Answers: (open to debate and disagreement!)

1. Go for standard off-the-shelf software – either AS/400 or PC-based is OK. 2. Personnel (limited expertise); incomplete requirements (at this stage); loss of sales and other opportunities (due to ineffective/inefficient systems).

3. Ditch Consoft and go for furniture-specific industry solution based on PC client– server or AS/400.

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Ron Smith Manufacturing (RSM) Ron Smith Manufacturing (RSM) is a company specialising in the manufacture of furniture components for the caravan trade and has an annual turnover of £1.6 million.

The company was bought out of receivership 10 months ago, complete with workshops, tools and other equipment. Profitability for the current year is unknown at this stage.

Included in the sale was an IBM System/36 (S/36) mini-computer serving 15 terminals.

Although the equipment is wholly owned, the company appears to have no license to run the installed software packages (although this is a matter of some dispute between RSM and the software company, Consoft Ltd). The company is at a critical stage in its recovery and is seeking to increase sales by a substantial amount.

The software packages installed are as follows: •

Sales Order Processing

•

Purchase Order Processing

•

Warehousing and Stock Control

•

Job Costing and Bill of Materials

•

Financial Ledgers

•

Payroll.

The company also has three PCs. One of these is used by the chief accountant to prepare the annual accounts as well as ad hoc management reports. There is no network link between the S/36 and the PCs so all data has to be rekeyed into Excel (spreadsheet). The other PCs are used for word processing.

The present S/36-based applications deliver around 60% of the required functionality, and it is recognised that the poor availability of accurate up-to-date information is beginning to hamper business operations. The payroll system is also in a critical situation because a new tax year has just begun but the dispute with Consoft means that the tax tables cannot be updated.

The company has no significant IT expertise beyond that enjoyed by the chief accountant and he admits that his knowledge is strictly limited. The other staff are proficient in using the existing S/36-based software packages but would be incapable of developing their own systems.

Consoft have suggested that RSM upgrade their S/36 to an IBM AS/400 running the latest version of the various packages. This will cost around £20,000 for the hardware and £40,000 for the software. The Managing Director, Chief Accountant and Operations Manager now have to decide what to do.

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Questions 1. Which of the alternative software acquisition methods would you recommend to RSM and why?

2. What would be your top three risks associated with this IS/IT project?

3. ‘Should they go for Consoft’s AS/400-based solution?’

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CHAPTER 8

Initiating systems development Activities Activity 8.1 Benefits of BIS Select a company or organisation with which you are familiar. Rank in order of importance the benefits that developing a new BIS, such as an e-commerce system, could deliver to the business or a particular department. You should give an explanation of why you have placed each benefit factor where you have. If you are completing as a class activity, you can compare the different systems by placing the benefits side by side on a whiteboard.

The best framework to apply here is the ‘6Cs’– although not all may be relevant. A typical order of importance might be the following: 1. Capability 2. Cost reduction 3. Customer service 4. Control 5. Competitive advantage 6. Communication.

It is also useful to consider both tangible and intangible importance.

For e-commerce sites, an alternative framework that works well with students is the ‘5Ss’ of Smith and Chaffey (2005). It is presented below, with example measures for each of the following: 1. Sell •

x direct sales

•

x indirect sales

•

x enquiries

2. Speak •

x site visitors

•

x site/e-newsletter registrations

•

x% conversion to sale

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3. Serve See Save 4. Save •

x% web self-service transactions

•

£x print cost savings

•

£x people cost savings

•

£x acquisition cost

5. Sizzle •

Brand impact

•

Value added

•

Customer satisfaction.

Smith, P.R. & Chaffey, D. (2005) E-marketing Excellence. At the Heart of E-business.

Elsevier, Butterworth-Heinemann. Oxford, UK. 2nd edition.

Activity 8.2 Critical success factors Suggest how Dell Computer may use BIS to: (a) collect and report the critical success factors (CSFs) and key performance indicators (KPIs) in Table 8.2; (b) achieve the business objectives and KPIs in Table 8.2. (a) BIS will be used to collect and report all of these metrics for efficiency reasons. To collect this data, customer satisfaction must be assessed for order fulfilment.

Systems to record errors and how long they take to fix will also be required. If Dell are using an enterprise resource planning system (See Chapter 6), then all the data may be available in a single system although it may be through different modules of such a system. To produce a management dashboard summarising all these metrics in a single report, some integration of data may be necessary through extracting data from different modules and then summarising it in a different application such as a spreadsheet. (b) To make use of the data collected in (a), a management control system must be put in place to review problems and act on them. Metrics are not of value unless they are actionable. Such a system must identify common problems to prevent them from recurring. The overall management process of a performance management system is: •

to identify key metrics;

•

to build systems to collect metrics;

•

a regular review of metrics;

•

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•

a corrective action to solve these problems;

•

a revision to metrics collection system to improve its efficiency.

Activity 8.3 Typical BIS costs and benefits The following are examples of costs and benefits: •

software purchase cost;

•

user resistance;

•

reduction in working hours;

•

improved decision-making;

•

hardware purchase cost;

•

new working practices;

•

sales increase;

•

broader planning horizons;

•

implementation costs;

•

disruption during implementation;

•

training costs;

•

reduction in customer complaints;

•

better data integration;

•

reduction in maintenance costs;

•

better data quality;

•

hardware and software maintenance and consumable costs;

•

reduction in inventory levels;

•

better cash flow.

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Assess where they should be in the grid below: Solution: Costs

Benefits

Tangible

Intangible

Tangible

Intangible

Software purchase cost

User resistance

Reduction in working Improved hours (i.e. less labour decision-making required to complete a given job)

Hardware purchase cost

Sales increase New working (although difficult to practices (These attribute to IS) may cause disruption – a cost, although longer term benefits should accrue)

Broader planning horizons

Implementation costs Disruption during implementation

Reduction in customer Better data complaints (a saving integration can be calculated for this)

Hardware and software maintenance and consumable costs

Reduction in maintenance costs

Better data quality

Reduction in inventory levels Better cash flow (difficult to directly attribute to IS)

Activity 8.4 A feasibility analysis for Lascelles Fine Foods This activity is based on Case Study 7.1 where acquisition alternatives were considered for this company. Produce a feasibility analysis of the alternative methods of acquiring application software as they relate to LFFL. You should pay particular attention to the operational, organisational, economic and technical feasibility of each one. You should conclude with a recommendation on how LFFL should best proceed to the next phase of the information systems acquisition process.

1. Identify risks, including their probabilities and impacts.

2. Identify possible solutions to these risks.

3. Implement the solutions, targeting the highest impact, most likely risks.

A plan for this answer can be developed by considering the table below, which is an amended version of that given in the text. The table below can be used to refer to the different types of feasibility and the restrictions imposed in LFFL.

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Differences amongst alternative acquisition methods: Acquisition option

Delivery time (Operational constraint)

Cost (Economic)

Quality: bugs (Operational or technical constraint)

Quality: fits business needs?

(Operational constraint)

Bespoke inhouse (not an option for LFFL – unless staff were recruited)

Poor

Poor

Poor

Good

Bespoke software house

Good

Very poor

Medium

Medium

End-user development (not an option for LFFL – unless staff were trained)

Poor

Medium

Poor

Good

Tailored offthe-shelf

Good

Good

Good

Medium

Standard offthe-shelf

Very good

Very good

Very good

Poor

Note that although end-user development could occur, it is not practical for a system of this scale, particularly since there is no indication that staffs have been trained for this.

It is also impractical for an IS department to develop the system. This leaves the options of the following: •

Bespoke software house

•

Tailored off-the-shelf

•

Standard off-the-shelf.

A review of the table shows that the decision will depend on a balance amongst the relatively low cost, better stability and faster implementation of the off-the-shelf solutions against the better fit to the needs of the business that would be provided by a bespoke option. The question will be resolved by how well a packaged system is likely to cope with the peculiarities of a food-producing company. It can be argued that for order processing, distribution, purchasing, warehousing and accounting, the company can readily use standard or tailored software. For the manufacturing process, some specific software may need to be written. Given this, the best recommendation is for standard off-the-shelf software with tailoring if necessary.

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Other notes: •

The case study does not suggest that time is an important factor.

•

There is no cost constraint, but the company will clearly want to implement the system for the minimum necessary outlay.

•

This case study assumes that the company has no current IS facilities; this is, somewhat unlikely although it is used for the purpose of simplicity. A more realistic situation is that of Elite folding tables limited where a new system is replacing an existing system.

Activity 8.5 Detailed weighted analysis of an ERP software decision Table 8.5 shows an analysis for three products from different suppliers that were compared across many factors to establish which was most suitable. This type of detailed analysis is usually conducted when a new system costs tens or hundreds of thousands of pounds. The grand total shows that supplier is the clear winner.

Table 8.5 Detailed weighted analysis for ERP software Weighting factor

Supplier 1 score

Supplier 2 score

Supplier 3 score

Receive information

70

60

60

60

Verify cut quantity

70

30

40

80

Schedule operations

80

56

56

56

Monitor schedule execution

80

40

40

68

Verify shop data input

80

64

64

64

Verify parts loss reporting

70

28

56

56

Detect labor variances?

60

30

36

42

Provide real-time status

60

24

19

43

Provide capacity planning?

70

56

40

50

Calculate incentive pay

70

30

25

35

Provide needed flexibility

80

65

50

55

Verify inventory data entry

60

42

42

42

Provide operation history

60

32

40

42

Provide security

90

30

36

36

A. Subtotal

1000

587

604

729

B. Technical considerations System reliability

100

56

56

56

Compatibility with other systems

100

56

56

56

Cross-module integration

100

45

70

65

Decision criteria A. General functionality

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Implementation time

100

45

70

65

Ease of customization

100

60

48

56

B. Subtotal

500

262

300

298

C. Other considerations Cost

60

36

48

54

Service and support

90

45

50

57

Vendor visio70

25

25

40

Confidence in supplier

80

35

45

65

C. Subtotal

300

141

168

216

Grand total

1800

990

1072

1243

Questions 1.

Review the different categories and the criteria within them. Do you think that the weighting factors are valid? Are there other factors that might apply for ERP software?

2.

Look in detail at the values for each product. Comment on the basis for deciding on individual scores.

3.

Given possible deficiencies in 1 and 2 above, comment on the suitability of this technique for making a decision. Would you use it and why? What would you do differently?

Activity 8.6 Comparing selection factors for different systems Referring to the eight key factors for selecting software, discuss in a group, the order of importance of these factors for each of these different types of business information system: •

an accounting system;

•

a system controlling a production line;

•

a system for booking customers on to coach trips;

•

a system to support investment in company shares;

•

an HR management system.

Create a table comparing the different factors for each system. Explain similarities and differences.

A typical answer for this activity is presented below – a suitable order can be discussed at length. It is evident that the importance of each factor differs according to the application. There are some common factors. This is a good activity to get different groups to present their different answers on the board:

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Accounting system

Production line

Booking customers

Investment

HR management system

Reliability – must be accurate.

Reliability

Performance

Functionality

Functionality

Security – must be available only to staff with ‘need to know’.

Performance

Reliability

Reliability

Ease of use

Support – once committed, do not want supplier to change.

Scalability

Ease of use

Performance

Reliability

Functionality – similar for many suppliers so less important. Ability to tailor is important.

Functionality/ adaptability

Functionality

Cost

Performance

Ease of use – less important since specialist staff will use.

Support

Support

Ease of use

Security (higher for salary details)

Extensibility

Ease of use

Security

Security

Support

Cost

Cost

Extensibility

Support

Cost

Case studies Case study 8.1 Recession reveals the dark side of advanced IT 1.

What lessons does the case study have for the initiation of an IT project in the organisation?

The case study outlines the risks inherent for organisations and societies relying on the operations and output of IT systems that are not understood or are simply too complex to be understood by any one person or even group of people.

One area that relates to the financial crisis is the use of mathematical models to estimate investment risk. These models simply projected recent historical performance of investments (which covered a period when those investments were performing well) into the future. Although the authors of the mathematical models were aware of their limitations, this (qualitative) information was not received by the eventual model users.

Thus IT systems using these models with their output based largely on quantitative outcomes led to over risky investments in property which was one of the main factors behind the crash of 2008.

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Organisations need to be aware of the limitations context of information produced by an IT system in order that the information can be assessed appropriately for decisionmaking.

Case study 8.2: Sedgemoor District Council Quick availability of information increases efficiency and reduces costs 1.

Given the intangible nature of some of the benefits from the new information systems, how might the council have gone about making the investment decision?

2.

Analyse the initiation part of the project in terms of the internal and external factors driving the systems acquisition process.

1. This question asks the students to consider approaches to investment appraisal. We suggest that alternative methods are considered and looked at with specific reference to the rather intangible nature of the benefits.

Standard financial methods: these may be of limited value since they require the identification of financial benefits as well as financial costs. While there may clearly be some financial benefits – and these should be quantified where possible – it is likely that the clearly identifiable financial benefits will not add up to more than the identifiable costs. This is not to say of course that over the longer term, greater financial benefits will not be realised – it’s just that they will not be easy enough to identify reliably.

Balanced scorecards: probably the most useful tool for the council. Financial methods can be incorporated into the financial element. However, the other three aspects of the scorecard can also be considered, thus enabling the council to assess, for example, the benefits of the system in offering a better service to local council tax payers.

Other methods such as information economics and cost-benefit analysis can also be used.

2. Internal factors: •

Dropping existing data management system – annual savings of £7000 on maintenance and server hardware

•

Reduced paper storage costs

•

Improved information lifecycle management

•

Making council reports, agendas and minutes available online.

External factors: •

Ability to comply with the Code of Connection requirements for connecting onto GCSx, (part of the Government Connect programme to provide a common infrastructure for secure electronic transactions between local and central government)

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•

Using Goss software in conjunction with electronic document and records management (EDRM) to ensure that the correct document versions are published online in each service area

•

The ability to make information readily available to support customer services through all access channels – the Internet, face to face and by telephone – thus being able to deliver on the e-government agenda.

Exercises Self-assessment exercises 1.

What is the purpose of the initiation phase of a project?

The purpose is to produce a response to an idea for a new system. This response is a feasibility study to assess the viability of the project. The study is summarised in a feasibility report that recommends the best method for developing a new system.

2.

What is meant by the terms ‘intangible’ and ‘tangible benefit’?

A monetary value can be calculated for a tangible benefit but not an intangible benefit.

3.

Identify each of the following as tangible or intangible benefits or costs: (a) purchase of a server for data storage with a new information system; (b) reduced waiting time for customers when querying the progress of an order; (c) disruption caused by installation of a new company network; (d) reduced inventory holding period resulting from a new stock management system.

(a) Tangible cost. (b) Intangible benefit. (c) Unclear – tangible or intangible cost. (d) Tangible benefit – a cost for the saving can be derived from the reduced time for which stock is held.

4.

Summarise the differences amongst economic, operational, technical and organisational feasibility.

Solution: •

Economic feasibility establishes whether or not the costs of a new IS outweigh its benefits. ‘Do the costs outweigh the benefits’?

•

Operational feasibility will determine the impact of the system on the existing working practices and will assess how the system will cope with the demands

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placed on it such as the number of transactions required per minute. ‘Is it suitable for the daily operations’? ‘What are its features’?

•

Technical feasibility assesses whether the system is appropriate for the problem that is being solved. ‘Will it work’?

•

Organisational feasibility assesses the impact of the introduction of the system on the people in the organisation. ‘What will the disruption be to the organisation’?

5.

What do you understand by the term ‘risk assessment’ and how can it be applied to assist an information systems development project?

Risk assessment is a review of the likely problems that may be experienced during the development, deployment and maintenance of an information system. It can be applied through: •

identifying risks;

•

assessing their likelihood and impact;

•

devising a plan to minimise the risk of the problems occurring, or coping with them if they do;

•

monitoring likely risks during the project and acting if they occur.

The final two steps are strictly risk management rather than risk assessment.

6.

What is the purpose and outline contents of a ‘request for proposal’ or ‘invitation to tender’ document?

This is a document or advert produced by a company who wants to introduce a new system intended for third-party system developers or suppliers. It invites them to produce a proposal to implement the system. It will typically detail: •

the business objectives the system must deliver expressed as detailed requirements or functions the system must deliver;

•

the technical requirements of the system such as which existing operating systems, hardware and applications it must interact with and performance restrictions;

•

management of the system implementation, indicating how the project management will operate;

•

constraints on the introduction of the system notably, cost and time.

7.

What are the key factors that a company will consider when choosing software from different suppliers?

•

Purchase cost and maintenance costs.

•

Suitability or functionality – does it have the appropriate features?

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•

Ease of use.

•

Other ancillary costs such as installation, training and support.

•

Compatibility (interoperability) with existing applications and operating systems.

•

Performance.

•

Stability – number and seriousness of expected bugs.

•

Scalability – will it support a large or increased number of users (see Chapter 12).

•

Suitability of the vendor for giving long-term support.

•

Extensibility – can the system be extended using programming tools or integrate with other products?

8.

What are the main items that should be specified in an information systems contract?

Those mentioned in the text are the following: Schedule 1. Product specification and acceptance Schedule 2. Input to project from client Schedule 3. Services to be supplied by contractor Each deliverable should be linked to a milestone and payment to help avoid slippage in the project. Milestones should include deliverables from both client and supplier.

Frequent monthly milestones should be set.

Schedule 4. Support of system and warranty A service-level agreement.

Schedule 5. Project plan Schedule 6. Payment method

Discussion questions 1.

To what extent is the failure of many information system projects a consequence of too little time being spent on the initiation stage?

This question suggests that many projects fail to deliver business benefits or overrun timescales and budget because the feasibility assessment is too brief or non-existent.

The counter-argument is that many projects fail because of inadequate project management during the project. It is relatively easy to demonstrate the poor record of project completion – see Chapter 10. It is less easy to directly link this to failures in

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initiation or project management during the project. However, the extent of the problem would suggest that there is a fundamental flaw in the way the feasibility of projects is assessed.

An approach to this question would be to look at the consequences of omitting different elements of the feasibility assessment such as the following: •

Economic (cost). The cost element of the cost–benefit relationship will naturally be considered by companies before the project is given the go-ahead. The purchase cost of hardware and software is easy to establish, but other costs such as training, implementation and maintenance are more difficult. If these elements are omitted in the initial budget, then there may be insufficient funds available for training, for example. This will then increase the likelihood of project failure.

•

Economic (benefit). Benefit is less straightforward to estimate in monetary terms. It would seem that some systems fail to deliver their benefits since they have not been quantified initially and targeted as business requirements of the system.

•

Operational. The most important aspect of this in terms of system success is that the business requirements of the system are well defined at the outset. The difficulty is that it is costly to define all the requirements at the start of the project – there may be thousands. If the requirements are not specified in detail, then the project may overrun and there may be insufficient time to implement some important requirements. This is an important reason why systems fail and suggests that more time should be spent on initiation. It should be noted that it is often difficult to specify requirements in detail without a prototyping exercise. Perhaps this should be part of initiation, or there should be a two-part initiation – a brief feasibility report to determine viability and then a more detailed initiation phase.

•

Organisational. This element of feasibility is probably neglected since the other aspects are more clearly necessary. If neglected, difficulties in managing the change associated with implementation may occur.

•

Technical. Assessing the suitability of the solution in terms of its performance and technical suitability is often difficult to establish on manufacturer’s figures alone.

This aspect of feasibility can only be done properly by benchmarking systems from rival suppliers or looking at reference sites where the system has already been implemented. This is a luxury that is only practical on large projects where the value of the contract is significant enough for suppliers and customer to want to do it.

•

Risk assessment. If this does not occur as part of the initiation, then the risk will not be identified and managed, and project failure is more likely to occur.

On the contrary, it can be suggested that even with the best feasibility study, a project can fail if it has a poor project manager. On the whole, it seems clear that a project is less likely to fail if a detailed feasibility assessment has occurred. Studies have shown that successful projects spend proportionately more time on the initiation phase than those that fail.

2.

‘The techniques that are available for comparing different software packages or systems from different suppliers must be applied rigorously’. Discuss.

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This question assesses the validity of the techniques used to compare applications. In answering this question, students could refer to the activity to give examples of how these tools can be misapplied. The main problems mentioned in the activity were the following: •

Much higher consideration was incorrectly applied to some factors in sections B and C, which would lead to a misleading result.

•

It is possible to omit some factors completely and then proceed with the decision.

For example, assessment of the change in working practices and implications of the hardware requirements of each product were missed.

•

The use of a numerical scheme can increase the ‘comfort factor’ in the decision even if the results are not clear-cut or based on sensible criteria.

Although these problems can occur, it is probably still better to use a structured technique than none at all.

Essay questions 1.

Examine the main consequences for an information systems project if the initiation stage is omitted.

This question involves looking at the causal factors for the failure of IS projects, which are evidenced by the following: •

Project time overruns

•

Budget overruns

•

Poor quality – bugs in the system

•

Poor quality – system not meeting the business requirements of users.

(These are the consequences referred to in the question.)

Each of these can then be related to preventative action that can be taken at the initiation stage to avoid these problems. Initiation can avoid project time and budget overruns and quality problems if: •

a detailed project plan is developed;

•

a quality plan to a standard such as BS5750 or ISO 9001 is developed stating how the development process will proceed to avoid errors;

•

a risk assessment occurs to identify and try to avoid risks;

•

a definition of anticipated business benefits and the requirements necessary in the software to fulfil them must also occur. Note that defining requirements in detail at the initiation stage will be time-consuming and probably not practical.

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2.

A company is intending to purchase accounting software for 100 staff and is considering three different packages. It is currently using a Microsoft Windows 2000-based application, but wants to move to using a Microsoft Windows XP Professional-based application. Give a full account of the factors it should consider when making the comparison. Which do you consider are the most important factors?

(This question is suitable as a long answer question in an exam).

The main factors have been referred to elsewhere, but here we attempt to rank them in order of importance: 1. Stability/reliability – number and seriousness of expected bugs. It is vital that accounting systems do not have errors resulting in financial discrepancies.

2. Ease of use – see comments under suitability.

3. Suitability or functionality – does it have the appropriate features? Although it must have the correct features, this is a competitive software sector, and rival offerings will have similar features. How they are implemented is the key factor, which is why ease of use is ranked higher.

4. Compatibility (interoperability) with existing applications and operating systems – clearly, the software chosen will have to run using Windows XP as the OS. Importantly, it must be easy to transfer data from the old system to the new system and set up links to any other existing software the new system must integrate with.

5. Suitability of the vendor for giving long-term support – this is clearly significant since support may be needed for three or more years.

6. Scalability – will it support a large or increased number of users? This is related to the next factor.

7. Performance – this is not a major issue, unless the software has particularly poor performance in which case it should be excluded. Adding new transactions to accounting software should be rapid, but care should be taken with the speed of the reporting functions, particularly for a business that has many transactions each day.

8. Purchase cost and maintenance costs – these are not the key factors, as it is pointless having a cheap system that is flawed in terms of its features, usability or stability, particularly since a company will probably want to use the system for 3 to 5 years.

9. Other ancillary costs – such as installation, training and support.

10. Extensibility – can the system be extended using programming tools or integrate with other products? This is not important unless the software does not have all the required features as standard. If it needs tailoring, this factor becomes more important.

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This ranking is consistent with the survey quoted in Chapter 6. A survey of 500 UK accountants in October 1995 by Interactive Software and The Hyperion group showed the following were the most important features: •

Reliability (45%)

•

Ease of use (19.5%)

•

Functionality (18.2%)

•

Performance (17.3%)

3.

Risk assessment is a valuable tool for the project manager. What does this technique involve and which future risks might be identified at different stages in a systems development project?

(This question is suitable as a long answer question in an exam.)

The first part of this question is straightforward. It can refer to text as follows: Risk assessment can be used at the start of a project to determine the level of risk and develop plans for reducing this risk. Risk management involves the following stages: •

Identify risks including their probabilities and impacts

•

Identify possible solutions to these risks

•

Implement the solutions targeting the highest impact, most likely risks.

Risk management aims to anticipate the future risks of an information systems project and to put in place measures to counter or eliminate these risks. The answer can then go on to consider causal factors of risks: •

Project size

•

Project complexity

•

People issues

•

Project control

•

Novelty

•

Requirements stability.

The subquestion asking which future risks will occur at different stages in the software project is more tricky. The main risks are if one of the important elements of the life cycle is omitted or not completed correctly. Let’s consider this in terms of the life cycle: •

Initiation – the risks at this stage are if all elements of feasibility and risk assessment are not considered. These have been explored in detail already.

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•

Analysis – the main risk is not listening to what the user’s requirements are or, conversely, trying to implement every feature required. There must be some prioritisation.

•

Design – there is a tendency in small projects to miss this stage completely and move straight to the programming. In larger projects, there is a tendency to concentrate on the systems’ design but make detailed design part of programming.

This can be a false economy.

•

Build: programming – this is a relatively low source of major risk since this stage must occur. It is important that programmers do not work too fast producing code that is error-prone or difficult to modify due to lack of documentation. Staff with the correct skills must be in place when required.

•

Build: testing – testing tends to be squeezed as a project progresses and insufficient time devoted to it. The consequences of omitting testing are clear (See Chapter 13).

•

Build and implementation: procurement – this is often left too late, causing delays.

•

Build and implementation: training – can be omitted completely or the education on the benefits of the system may be omitted.

•

Build and implementation: changeover – the wrong method may be chosen – see Chapter 13.

•

Maintenance – there is a risk if there is not a good reporting mechanism for identifying problems and then responding to them. A help desk is important to answer user’s questions also.

4.

Write a short feasibility or initiation report for a new e-commerce site or an enhancement to an existing site incorporating the elements of initiation referred to in this chapter. It can refer to a fictitious company, a small company you are familiar with, or a larger company whose sites you can visit.

Your answer should not be limited to exploring economic, operational, organisational and technical feasibility but should include all the aspects of initiation planning covered in this chapter.

Suggested answer: The six activities in Figure 8.1 form a good framework for answering this question.

They are as follows: 1. Identify problem 2. Assess feasibility Discuss issues of economic, operational, organisational and technical feasibility.

3. Define business objectives Refer to the 6Cs and CSFs (topic 6). Also see the 5Ss referred to in this Instructor’s Manual for the start of this chapter.

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4. Evaluate acquisition alternatives.

The make or buy decision covered in Chapter 7 (systems acquisition).

5. Decide to proceed if appropriate 6. Define detailed project plan Refer to project management unit (Unit 11).

Examination questions 1.

What is the purpose of establishing the following types of feasibility: (a) operational; (b) organisational; (c) technical; (d) economic.

(a) Is the proposed solution capable of delivering the functions needed? (b) How will it fit in with existing working practices? How will the change in the organisation be managed? (c) Is the proposed solution capable of delivering the performance and functions needed? (d) How will it ensure that, in the long term, costs will outweigh the benefits?

2.

Give three reasons for a company initiating an information systems project.

Give a brief example of each.

Students should mention any of the following with a brief explanation or example for each one: •

Capability

•

Cost reduction

•

Customer service

•

Control

•

Competitive advantage

•

Communication.

3.

Define information systems outsourcing.

If a company decides to use a third party to develop its information systems or provide other IS services, this is known as outsourcing. See Chapter 14 for further details.

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4.

Give examples of two tangible costs and two intangible costs that may be incurred during an information systems development project.

•

Tangible costs – software or hardware purchase, training or maintenance costs.

•

Intangible costs – disruption during implementation or resistance amongst users who then use other techniques resulting in a fall in productivity.

5.

What are the most important factors you would consider when comparing alternative software packages?

Since this question does not specify the type of application or other constraints, permit any reasons such as: •

functionality;

•

ease of use;

•

performance;

•

compatibility or interoperability;

•

security;

•

stability or reliability of product;

•

prospects for long-term support of product;

•

extensibility.

Students should not mention cost as the main factor unless they can justify it – function is usually the key consideration.

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CHAPTER 9

BIS project management Activities Activity 9.1 Project planning exercise (Project-planning exercise) You are required to construct a project plan for the following BIS development project. Your objective is to schedule the project to run in the shortest time possible. The plan should include all activities, the estimated, elapsed and effort time, and who is to perform each activity. In addition, it is necessary to indicate the sequence in which all the tasks will take place. The programs can be scheduled in any order, but for each program, the design stage must come first, followed by the programming and finally the documentation.

Within the context of the exercise, you can assume that the detailed systems analysis has already been carried out and that it is now necessary to perform the design, programming and documentation activities. For the purposes of this exercise, we will not include the testing and implementation phases.

Present your project plan in the form of a Gantt chart (see Figure 9.10 later) showing each task, the sequence in which tasks will be performed, the estimated effort and elapsed time and the resource allocated to each task.

We believe this is a good exercise for introducing students to project-planning issues.

Students may need a fair amount of guidance depending on their ability. We use it as part of a systems analysis and design course, but it could be made of more general relevance by changing the name of the activities.

There are two basic approaches: 1. The students produce a matrix of how long it will take different staff to complete different tasks (see table) based on the equation given relating work rate, availability and effort time to elapsed time. They then use the matrix as a lookup table for completing the Gantt chart (see accompanying Gantt chart in chapter).

2. The students produce a matrix based on work rate only (see table) and then allocate the staff on the Gantt chart using their availability as follows: •

100% means the worker can work full-time

•

60% means the worker can work 3 out of 5 days per week

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•

50% means the worker can work 21/2 days per week (or 2 days one week, 3 the next)

•

40% means the worker can only work 2 out of 5 days per week.

3. This second approach is used for the solution in the accompanying diagram. It gives a slightly better solution than the first approach.

The matrix below shows the length to complete different tasks based on the work rate and availability of the different staff (all figures in days).

Task

SD1 (Factor = 1)

SD2 (Factor = 1.67)

SD3 (Factor = 4)

Design easy program (1d)

1

1.67

4

Design moderate program (2d)

2

3.33

8

Design difficult program (4d)

4

6.66

16

P1 (Factor = 1.25)

P2 (Factor = 1)

P3 (Factor = 3.3)

1.25

1

3.3

Program moderate program (3d) 3.75

3

9.9

Program difficult program (6d)

7.5

6

19.8

TA1 (Factor = 1.6)

TA2 (Factor = 2)

TA3 (Factor = 1.25)

Document easy program (1d)

1.6

2

1.25

Document moderate program (2d)

3.2

4

2.5

Document difficult program (3d)

4.8

6

3.75

Program easy program (1d)

The matrix below shows how long it will take to complete different tasks based on the work rate only of the different staff (all figures in days).

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Task

SD1 (Factor = 1)

SD2 (Factor = 0.67)

SD3 (Factor = 2)

Design easy program (1d)

1

0.67

2

Design moderate program (2d)

2

1.33

4

Design difficult program (4d)

4

2.66

8

P1 (Factor = 0.5)

P2 (Factor = 1)

P3 (Factor = 2)

0.5

1

2

Program moderate program (3d) 1.5

3

6

Program difficult program (6d)

3

6

12

TA1 (Factor = 1)

TA2 (Factor = 2)

TA3 (Factor = 0.5)

Document easy program (1d)

1

2

0.5

Document moderate program (2d)

2

4

1

Document difficult program (3d)

3

6

1.5

ACTIVITY

5

Program easy program (1d)

1

Program 1 (D) Resource

3

4

6

SD1

Program 2 (E) Resource Program 3 (M) Resource

2

SD3

7

8

9 10 11 12 13 14 15 16

P2

P3

TA2

TA2

Program 4 (M) Resource Program 5 (D) Resource SD2

P1

2

TA1

SD2

SD1

P3

P3

P1

TA1

TA3

The sample Gantt chart for the project-planning exercise was produced using the table above. All tasks rounded up to 0.5 days.

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Some principles on using the Gantt chart to assign resources should be evident to students but may need reiterating the following: •

The same resource may not work at the same time

•

As soon as a resource has finished on one task, they may start on another

•

Not all resources need to be used continuously

•

Assume 5 days per working week only, with no overtime.

What the activity illustrates: 1. Different characteristics of staff working on a project.

2. Staff often working on more than one project. Can you give them one day per project, or split their time through the day? The former is probably more efficient.

3. The difference between elapsed and effort time.

4. It is best to put the best staff on the most difficult tasks and start these early.

5. Project planning in detail is not straightforward.

Activity 9.2 An assessment of PRINCE2 From the information given in the preceding section and using any relevant books, decide whether to use a formal project methodology such as PRINCE2 or IDEAL or a different approach. Justify your answer, giving a brief evaluation of what you perceive as the advantages and disadvantages of the methodology.

The question is intended to make students reflect on the need for a formal, structured approach to project management. Is a more informal arrangement sometimes more appropriate?

In this case study, the company is of a medium size and there is quite a serious problem of time and budget overruns, although the systems do meet the needs of the users quite well. Given that, it is important that any changes introduced are not too formal and become a barrier between the system developers and the users who seem to collaborate quite well currently.

In the view of the authors, while deploying a structured methodology such as PRINCE2 will improve control, it may not address political or soft issues which may be affecting project completions. Furthermore, a structured methodology may require more quality assurance staff on a project and may mean (initially at least) that projects take longer.

Some more practical changes may be more beneficial than introducing a methodology.

It could be recommended that the company implements these changes and then assesses whether or not further gains could be achievable through introducing a methodology.

A summary of the positive and negative features of a structured methodology is shown in the table.

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Advantages

Disadvantages

•

Clear aims and organisational responsibilities will be identified

•

•

Good framework for planning and change control, for example, need for change logging and exception plans

Tends to lead to a hierarchical bureaucracy with more ‘reviewing than doing’

•

Needs training of staff

•

•

May stifle flexibility and innovation

Provides a consistent way of conducting projects in a company thus reducing the likelihood of error

•

May sometimes be necessary to cut corners to meet deadline

•

Should lead to better quality systems as fewer ‘corners should be cut’

•

Does not fit with RAD philosophy – based more on a traditional lifecycle

Case studies Case study 9.1: Putting an all-inclusive price tag on successful IT 1.

Discuss the difficulties in estimating the costs and benefits of an IT project.

There is a need to consider the context of the IT project and thus the change required for a successful implementation and delivery. IT departments tend to focus on the technical costs of hardware, software and training but underestimate the costs of change. In the case study, these costs are stated as ensuring compliance with the business strategy; aligning the people with the processes the business is changing to; and ensuring that behaviours are commensurate with the required new ways of working.

There is also the traditional problem in that hardware and software costs estimates are relatively easy to calculate but more benefits tend to be more qualitative and difficult to express as a number.

Case study 9.2: Project management: lessons can be learned from successful delivery Discuss the delivery of the Olympic Park in terms of time, cost and quality performance objectives.

Quality Client (ODA) knew what it wanted and was consistent in keeping to the contract terms agreed on. The ODA served as a single government interface saving suppliers having to negotiate with many local bodies.

Cost The financial crisis did mean that some aspects could not be funded and so a contingency budget was used to do this. The contingency budget was the result of a very large increase in the overall estimate of the budget (from £2.4bn to £9.3bn). This

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was quite an unusual contingency (banking crisis), usually contingencies might involve unexpected extra work or failure of a supplier.

Time The deadline was not movable and so that gave a target to aim to.

Overall the time and quality targets were met. The cost target was also met but this was only after a very large increase in the budget from the original estimate!

Exercises Self-assessment exercises 1.

What are the main elements of the project management process?

The project management process includes the following main elements: •

Estimation which consists of identifying tasks and their duration

•

Schedule/plan when the tasks are sequenced and resources allocated

•

Monitoring and control during the project

•

Documentation for quality assurance

•

Post project review to improve the next project.

2.

What are the main project aims of the PRINCE2 methodology?

PRINCE2 is a project management methodology that has been developed to be compatible with the system development methodologies such as systems development life cycle (SDLC). PRINCE2 defines four main project aims: 1. To deliver the required end product(s) 2. To meet the specified quality 3. To stay within budget 4. To deliver on schedule.

3.

What information is required for the construction of a critical path diagram?

The following information is required for construction of a critical path diagram: •

Identification of project activities

•

Estimated duration for each activity

•

Relationship amongst project activities (i.e. their sequence).

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4.

What information do the Gantt chart and the PERT chart convey?

The Gantt chart conveys the timing of activity execution since the start and finish date for each activity are indicated. The PERT chart identifies the relationship between activities and will indicate the critical path more effectively than the Gantt.

5.

Define the term ‘critical path’.

Activities on the critical path are termed critical activities. Any delay in these activities will cause a delay in the project completion time.

6.

What is the difference between effort time and elapsed time?

Effort time is the total amount of work that needs to occur to complete a task. The elapsed time indicates how long in units of time (such as calendar days) the task will take, given the number of resources allocated to it. For example, 4 days’ effort time could be reduced to 2 days’ elapsed time if two resources were allocated to it.

Discussion questions 1.

Draw a Gantt chart for the following AON network (Figure 9.10).

A B

Task

C D E F G H

0

10

20

30

40

50

60

70

80

90

Time (days)

The bars indicate the earliest start and earliest finish times.

2.

‘One of the most difficult parts of project management is getting the estimates right’. Discuss.

This question balances the importance of estimation against the other project management activities that occur before a project commences such as scheduling, budgeting and resource allocations and those during the project. As an introduction to this issue, students should give examples of project failure for context (see start of chapter).

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Arguments for: Estimation is difficult since it is only possible to produce accurate estimates when all the features required are known at the outset. This is unusual and not encouraged in prototyping where the features are identified through recommendation. Without knowing the hundreds or thousands of features in a system for bottom-up estimation, a cruder top-down estimation will be needed where estimates are made for entire modules. Other reasons why initial estimation is difficult are: •

Changing requirements mean that initial assessments will be inaccurate until refined later in a project, but project managers tend to be held to their initial estimation.

•

Each project tends to be unique, so past estimates are of limited relevance.

•

Estimates based on lines of code are limited by the initial difficulty of estimating the lines of code.

•

IS projects may use new technologies and delays are caused by learning these or solving problems caused by them.

•

It may be difficult to evaluate the speed of different programmers, particularly if contractors are used.

Despite all the above, these authors believe that there are other factors that are, in total, more important (although not necessarily more difficult to achieve) to the success of a project. Before a project, the following factors are to be considered: •

Risk assessment – identifying what may go wrong and taking steps to prevent it

•

Setting up quality assurance or the use of a PRINCE2 style methodology

•

Producing an effective project plan.

During a project, effective monitoring and control are important since it is inevitable that no matter how good the estimates, problems will arise. These need to be identified quickly and then appropriate action taken to minimise the problem, such as putting more people on to a task that is overrunning.

Essay questions 1.

Explore the features of a project management computer package such as Microsoft Project. Evaluate its use in the project management process.

The package chosen should be reviewed against the general attributes of the software that should be taken into account when purchasing software as described in Chapter 8.

These include ease of use, reliability, performance and features. For features, the specific aspects of a project management software should be reviewed for its contribution in the areas of: •

estimation;

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•

scheduling – is this achieved through a PERT or Gantt view? How well is resource over allocation shown?

•

budgeting;

•

control – how well is ‘slippage’ shown? How good are the reporting facilities? How easy is it to monitor the budget?

Project management software such as Microsoft Project 98 has the following main features: •

creating project plans and tracking progress;

•

managing resources and costs;

•

working with the Internet;

•

sharing project information.

2.

Compare the different alternatives that are available for the critical path method of network analysis.

This answer should start with a brief example similar to the one in the chapter for each of the two main methods.

Historically, there has been a greater use of the Activity-on-Arrow (AOA) method, but the Activity-On-Node (AON) method is now being recognised as having a number of advantages including: •

Most project management computer software uses the AON approach.

•

AON diagrams do not need dummy activities to maintain the relationship logic.

•

AON diagrams have all the information on timings and identification within the node box leading to clearer diagrams.

3.

What is the most effective method of estimating the duration of an information systems development project?

The answer can be approached in two main different ways; a good answer will explore both.

1. Top-down v. bottom-up. Is the estimate built by producing broad estimates for each module and then refining them, or by considering the detailed tasks and then building up an overall estimate from the sum of these? It should be apparent that the second option is more time-consuming but more accurate.

2. Review of techniques such as construct cost model (COCOMO) which give estimates based on the number of lines of source code or function point analysis that considers the functions and numbers of inputs and outputs provided by the software. Both of these techniques can produce good answers but only when a good data set of similar past projects is available. They are probably both inferior to, but 165 .

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quicker than, a bottom-up estimate. Function point analysis tends to be more detailed and accurate than COCOMO.

Examination questions 1.

Evaluate the roles undertaken by people in a project organisation.

The phrase ‘project organisation’ is a specific term from the PRINCE methodology. It refers to the following types of groups and team members: •

Project steering team – which defines the feasibility of projects and then assesses their progress and suggests action to ensure that they stay on track

•

Senior users – departments where the new system is implemented

•

Senior technical role – an architect for the system

•

Project manager – coordinates project and ensures that management actions are taken

•

Quality assurance team – ensures that project follows appropriate stages and has the right reviews and controls.

2.

What are the main elements in the project management process?

The project management process includes the following main elements: •

Estimation which consists of identifying tasks and their duration

•

Schedule/plan when the tasks are sequenced and resources allocated

•

Monitoring and control during the project

•

Documentation for quality assurance

•

Post project review to improve the next project.

3.

Evaluate the use of the PRINCE2 project management methodology.

PRINCE2 is a project management methodology that has been developed to be compatible with the system development methodologies used in government IT projects such as systems development life cycle (SDLC). It has become the standard project management methodology used by the UK government and is also being increasingly used in commercial organisations in the UK. It will be evident that it offers a structure for a project which is only applicable to large projects involving teams of at least 10 people. Many of the inbuilt quality assurance checks are, however, appropriate to smaller projects.

The PRINCE2 methodology is built around the idea that a project is required to deliver a product(s) within the time, cost and quality constraints imposed. The products are defined not just in the sense of the technical product of the delivered IT system but 166 .

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include management products such as project plans and quality products such as quality reviews.

The planning process under PRINCE2 involves defining a list of products required to produce the end product of the project and defining the sequence in which these products must be produced. From this can be derived the activities required to generate these products in terms of management tasks, technical requirements and quality criteria. In order to ensure that the aims of cost, time and quality are met, PRINCE2 provides controls that enable the progress of the project management and product management activities to be monitored against plan.

In order to ensure user involvement in the project, PRINCE2 provides an organisational structure and set of job descriptions that define responsibility for activities in a project and ensure a user role in major decisions during the project.

4.

Explain the difference between portraying a project plan as a Gantt chart and as a PERT chart.

The Gantt chart conveys the timing of activity execution since the start and finish date for each activity are indicated. The PERT chart identifies the relationship amongst activities and will indicate the critical path more effectively than the Gantt.

5.

What is the importance of conducting monitoring and control when managing a project?

When a project is underway, the monitoring of the project objectives of cost, time and quality against targets must be closely monitored. This should occur daily for smallscale tasks or weekly for combined activities. Control or corrective action will occur if the performance measures deviate from plan. It is important to monitor and assess performance as the project progresses in order that corrective action can be taken before the project deviates from plan to a large extent. Milestones or events that need to happen on a particular date are defined, for which performance against objectives can be measured (e.g. end of analysis and production of the first prototype).

Computer project management packages can be used to automate the collection of project progress data and production of progress reports.

6.

Why is it difficult and often impossible for a software project manager to balance the three constraints of time, budget and quality? You should relate your answer to two different aspects of the quality of the delivered information system.

The project should be managed to achieve the defined objectives of time, cost and quality. The time objective is met by ensuring that the project is monitored in terms of execution of tasks within time limits. Corrective action is taken if a variance between actual and planned time is observed. The cost objective is achieved by monitoring the use of human resource and computing resource budgets and again variation between estimated and actual expenditure is noted and necessary corrective action is taken. To ensure that quality objectives are met, it is necessary to develop a quality plan which contains a list of deliverable items to the customer. Each of these will have an associated quality standard and procedure for dealing with a variance from the required quality level defined in the quality plan.

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It is difficult to reconcile achieving time, cost and quality objectives since to solve problems of time overruns, it will be necessary to add more staff which will increase cost. One way of decreasing the time and cost is to reduce the quality by (1) accepting a higher number of bugs (by reducing detailed design and testing time) or (2) not implementing some of the features required in the system.

7.

What is the difference between elapsed time and effort time? How are the two factors related in terms of the availability and work rate of different staff?

Describe this in words, or using an equation or an example.

Effort time is the total amount of work that needs to occur to complete a task. The elapsed time indicates how long in time (such as calendar days) the task will take, given the number of resources allocated to it. For example, 4 days effort time could be reduced to 2 days elapsed time if two resources were allocated to it.

Elapsed time is inversely proportional to the number of staff allocated to a task. In other words, the more people working on a task, the shorter time it should take (in theory).

Elapsed time will also increase as the availability of the staff decreases or if their work rate is poor. This can be expressed as:

Elapsed time = Effort time ×

100 100 × Availability % Work rate %

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CHAPTER 10

Systems analysis Activities There are no activities for this chapter.

Case studies Case study 10.1: IFD drawing – a student records system This case study does not have any questions since it takes students through the process of creating an information flow diagram (IFD).

Case study 10.2: ABC case study 1.

Using the ABC case study, produce an information flow diagram for the company by following the steps given earlier in the chapter. Does the diagram tell you anything about ABC’s operations that may need some attention (such as missing or superfluous information flows)?

2.

Using the ABC case study and the information flow diagram that you drew in answer to Question 1, produce a simple Level 1 dataflow diagram for the company by following the steps given earlier in the chapter. Compare your answer with that of one of your colleagues. Are the diagrams the same? If not, is it possible to say which is correct? If not, why not?

3.

Using the ABC case study, including the sample forms included below the main text, construct an entity relationship diagram for the company. Make sure that you do a cross-reference matrix before attempting to draw the diagram. When you have drawn your first-cut diagram, check for many-tomany relationships and eliminate any that you find by using the appropriate technique described earlier in the chapter.

1. The information flow diagram should have about six sources/destinations and about 10 information flows. It is sometimes useful to give students an idea about these numbers before they start constructing their diagrams. Students should also be encouraged to produce a list of information flows, their source and destinations before attempting to draw the diagram.

2. There is also a possibility that students will ‘invent’ information flows that they think should exist but do not appear in the case study. Before going on to the second part of the question, students should be challenged if they have come up with these! A sample information flow diagram is shown in the figure below.

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customer order

Customer

payment details

Sales

order rejected notice

valid sales order

Accounts

payment check result

Warehouse

new manufacturing order

Manufacturing

new purchase order

Supplier

From the diagram, there is one omission that is usually identified, namely, the lack of any information going back to the customer if the order is valid. This would normally take the form of a delivery note to accompany the customer’s products.

Students should note that goods going to the customer do not constitute an information flow but a materials flow and should not really appear on the diagram.

Another point concerns the payment to the supplier. It is a matter of some debate whether this constitutes a materials flow or an information flow. Bright students will argue that since the money transfer is actually electronic, it really is an information flow.

For this exercise, the students should attempt to draw their diagrams on a single sheet of A4 paper in a landscape orientation. The number of processes will vary between students (and lecturers) but should be no more that 10 to 12.

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A sample diagram is given below.

It should be noted that the diagram conforms to the rules set out in Chapter 10.

Especially important is the non-appearance of information flows directly amongst processes or datastores.

It is quite possible that students will have different interpretations of the case study.

However, the processes should be essentially the same amongst students. What will differ very much will be the placing of the elements of the diagram on the page.

Provided that the rules are followed and there are no crossed lines (except for the system boundary), differences should not be significant.

3. Students should tackle this question in four steps: •

Step one is to identify ‘facts about persons, places, things or events’ and about which data needs to be held. When some students come up with ‘ABC’ or the ‘Manufacturing Department’, they should be challenged to say what data they would hold about these entities. They are usually removed shortly afterwards.

•

Step two is to construct a cross-reference matrix showing which entities relate to each other. This is particularly difficult because at this stage, students will not have a particularly good understanding of relational databases and database design (especially primary and foreign keys). It is helpful, therefore, for students to consider the data items that each of their entities might contain and where common data between two entities exists to enable a relationship to exist (e.g. between customers and customer orders).

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•

Step three is to produce the first-cut entity relationship diagram (ERD). In the first instance, students should construct all relationships as 1:1, only adding the crow’s feet at the end.

•

Step four is to inspect the diagram for any many-to-many relationships and to introduce a linking entity to simplify the relationship into two one-to-many relationships. Students will not necessarily understand the importance of this at this stage. It is, therefore, important to return to this in the database design part of Chapter 12.

The sample solutions to each step are as follows.

Entities It is suggested that the following entities should be identified: •

customers;

•

sales orders;

•

sales clerks;

•

products;

•

manufacturing orders;

•

purchase orders;

•

suppliers;

•

supplier invoices.

Students may come up with additional ones, some of which may be perfectly reasonable (e.g. matched P/Os as identified from the dataflow diagram (DFD)).

Cross-reference matrix Invoice Supplier Purchase Order Manufacturing Order Product Sales Order Sales Clerk Customer

Customer Sales Clerk Sales Order Product Manufacturing Order Purchase Order Supplier Invoice

  x x x x x  x x x x x  x x x x    x x x x   

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First-cut ERD The relationships shown here assume certain enterprise or business rules. This is especially so in the case of the relationship between purchase orders and supplier invoices. It is possible to make different assumptions and come up with a different extent to the relationship (e.g. many-to-many, rather than one-to-many). The firstcut diagram is shown below.

The many-to-many relationships for the Sales Order–Product link and the Purchase Order–Product link are clear from the forms illustrated in the case study. What is less clear is the nature of the relationship between purchase orders and supplier invoices. Students should be encouraged to think through the implications of each alternative relationship in business terms.

Final ERD In the final version of the ERD, students need to remove all many-to-many relationships by introducing new linking entities (see diagram below).

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Exercises Self-assessment exercises 1.

What is the difference between the ‘funnel’ and ‘pyramid’ approaches to structuring an interview?

•

Pyramid structure. The interviewer begins with a series of specific questions and during the course of the interview moves towards general ones.

•

Funnel structure. The interviewer begins with general questions and during the course of the interview concentrates increasingly on specific ones.

2.

Why can closed questions still be useful in an interview?

Closed questions are designed to confirm the interviewer’s understanding of information obtained. They can also be used to obtain quantitative data.

3.

Assess the relative effectiveness of interviews v. questionnaires when attempting to establish user requirements.

Interviews have the following benefits: •

The ability to gather detailed information through a two-way dialogue

•

They allow candid, honest responses to be made

•

An open, spontaneous process that can lead to valuable insights, especially when open questions are used

•

Responses can be easily quantified, especially when closed questions are used

•

One of the best methods for gathering qualitative data such as opinions and subjective descriptions of activities and problems.

They can be ineffective in the following circumstances: •

The analyst’s findings are likely to be coloured by his or her perceptions of how other similar business operations work. Interviewers need to be especially skilled if this is to be avoided.

•

Interviewees may not cooperate with the interview process, either by not taking part or by giving vague and incomplete replies, if the development of a new information system is perceived as a threat through the risk of de-skilling, redundancy or a perceived inability to cope with change.

•

The interviewee tells the analyst what they think should happen in an existing situation rather than what actually happens.

•

Staff at lower organisational levels may not be capable of articulating their requirements with sufficient clarity.

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Questionnaires can be effective if: •

Information from a large number of people needs to be gathered – this will represent a more efficient use of time than interviewing

•

The information gained is used to check the findings obtained from alternative factfinding methods

•

Information that is to be gathered can be tabulated or easily structured.

On the other hand, questionnaires: •

Mean that respondents cannot go back to the analyst to seek clarification about what a question means

•

May make the collation of qualitative information difficult if the questionnaire contains open-ended questions – this would also be true of interviews, but there is likely to be a larger number of responses to collate from a questionnaire

•

Lack the ability to use verbal and non-verbal signals from the respondent as a sign to ask other or different questions

•

Often have low response rates, although this is not such a problem for internal staff.

4.

In an information flow diagram, why should we not record information flows that lie completely outside the system boundary?

In either an IFD or a DFD, we are only interested in information flows or data flows that are within the scope or context of the system under consideration. For example, in the ABC case above, we have no interest in any flows between our customers and suppliers – it is outside both the scope of the system and the business as a whole.

5.

What are the main differences between an information flow diagram and a dataflow diagram?

An IFD simply shows information sources, destinations and flows, whereas a DFD also shows processes where inputs are transformed into outputs of some kind and datastores are present to show where data is held within the system. In addition, information destinations are renamed ‘sinks’.

6.

What is meant by the term ‘levelling’ in dataflow diagrams?

Students need to understand that in a DFD, it is difficult to show all the processes relevant to a system unless the system under consideration is very small. Levelling, therefore, allows processes to be identified at a very high level (e.g. process customer order), and then each process can be decomposed into sub-processes and activities on subsequent diagrams. To be accurate and successful, it should be possible to identify clearly how the processes of a lower-level diagram can be aggregated to recompose the higher-level process that generated it.

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7.

In a sales order processing system, which of the following are not entities?

Customer, colour, size, product, telephone number, sales order, salesperson and order date.

In this question, students need to distinguish between data items (or attributes) and entities. An entity can be defined as a collection of data items that together describe a person, place, thing or event about which we wish to store data. The data items, therefore, are individual elements that carry part of the description for a particular occurrence of an entity.

Using these definitions we can look at each of the following: •

Customer: This will comprise a collection of data items such as name, address, telephone number, etc. that together can be used to identify individual customers; customer is, therefore, an entity.

•

Colour: This is an attribute that helps describe an occurrence of something (e.g. a garment); it is a data item.

•

Size: as with colour, it is a data item.

•

Product: This will normally be an entity since it describes the characteristics of something that a business might sell; colour might be one of the data items; also, students should not confuse product with product code or description.

•

Telephone number: As suggested above, a telephone number would be a data item and not an entity.

•

Sales order: This would contain details such as order date, customer number, delivery date, etc.; it is, therefore, an entity.

•

Salesperson: This can be interpreted both ways: if we are looking to store details about each sales person (sales this month, name, etc.), then this could be regarded as an entity; if we mean the person who took an order, then it could be interpreted as a data item.

•

Order date: As suggested above, this would constitute a data item and be a part of the sales order entity.

8.

Why might the construction of an ERD still be useful even if an off-the-shelf package was going to be purchased?

An ERD represents a logical data model for an organisation. Entities that contain data needed to support business activities are defined as the relationships amongst them. A packaged solution needs to be able to represent the data required by the business and with the appropriate relationships. How the package’s physical database is designed is a separate issue and should not affect the decision whether or not to buy a package provided that the relevant business operations can be supported according to the relevant enterprise or business rules. The ERD, therefore, can provide a conceptual framework with which to test the ability of the package to deliver what is required.

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Discussion questions 1.

Use a simple example with no more than five processes or ten information flows to examine the differences between the information flow diagram and the dataflow diagram. Which would be more effective for explaining deficiencies with an existing system to: (a) a business manager? (b) a systems designer?

Justify your reasoning.

With this question, it is helpful to give students some alternative examples around which to construct some sample questions. In addition to the illustrations in Chapter 11, consider the following possibilities: •

Student book loans from a university library

•

Recording and arranging employee training

•

A photographic developing and printing shop

•

A high street travel agency

•

A new car dealership.

It is not proposed to give solution examples here. However, you are advised to consult the relevant examples in Chapter 11 and the sample solutions for the ABC case study given above.

For a business manager, it is suggested that both the diagrams are beneficial. An IFD will allow easy inspection of the major information flows within the business and, as with ABC, omissions or oversights are easy to spot. A DFD also has the benefit of presenting to a business manager the processes that have been identified within existing information. This can be compared with a DFD of the required system to identify processes that are missing or those that do not add value to the business. Similarly, an IFD of the required system could also be constructed and compared with an IFD of the current system.

For a systems designer, although an IFD is useful in putting the system in context, a DFD adds the essential elements of business processes and data. This will assist greatly in the understanding of the existing business processes. DFDs also act as a good communication tool between designer and user. Finally, DFDs are useful as both a completion check and a consistency check. In this way, the risks posed from faulty analysis and, therefore, design are reduced.

2.

Compare the effectiveness of ‘soft’ methods of acquiring information such as interviews and questionnaires and ‘hard’ methods of gathering information such as document analysis and observation of staff. In which order do you think these analysis activities should be conducted and on which do you think most time should be spent?

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Students need to understand that, regardless of the fact-finding methods used, the object of the requirements determination exercise is to maximise the accuracy and relevance of the information gathered so that later stages of the systems development project are not subject to unnecessary remedial costs. It is also important to distinguish between finding out what happens in the current situation and determining what is needed in the new information system.

Current system. A mixture of methods is appropriate here. One possibility is to begin by reviewing documentation and observing staff at work before carrying out interviews or conducting questionnaires. In this way, it will be possible to make the interviewing exercise more productive because the analyst already has a base of information from which to work. Interviews and questionnaires can be used to confirm the accuracy of the findings from the observation and documentation review exercises. On the other hand, one or two initial interviews may also be helpful in ensuring that the observation and documentation review is more focused and on target.

Future system. Facts about the current system will already have been gathered. In looking at requirements for the future system, interviewing, meetings and brainstorming sessions are likely to yield most benefit, although the information gained from analysis of the current system is also a valuable input into this process.

3.

‘For producing a database, the only type of diagram from the analysis phase that needs to be produced is the entity relationship diagram. Dataflow diagrams are not relevant’. Discuss.

Students who agree with this question either do so because they don’t like drawing DFDs or because they have not made the connection between the datastores on a DFD and the logical database design that comes from an ERD. It is perfectly possible to construct an ERD without having first drawn a DFD. However, this requires the students to almost pluck out of thin air those things about which they think data needs to be held. The datastores within a DFD can be used as part of a first-cut ERD and using these helps in the first instance. However, it is possible that a DFD that only models existing processes may omit datastores that are needed in the required system. The question, therefore, almost becomes ‘Is it necessary to construct a DFD of the required system as well as that of the existing one?

Strictly speaking, then, while it is possible to construct an ERD without first of all having a DFD as a basis, the DFD is helpful in documenting some of the findings of the analysis process.

Essay questions 1.

Compare and contrast alternative fact-finding methods and analysis documentation tools as they might relate to bespoke software development and the purchase of off-the-shelf packages.

This question is asking students to analyse whether or not there are really any differences at all in the approach that should be taken to requirements analysis, depending on the type of acquisition method envisaged. A systematic approach could

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take a selection of fact-finding methods and documentation tools and look at each one from a bespoke development and a package perspective. What follows is a summary of some of the points that may be raised: Fact-finding methods

The assumption here is that in the case of the proposed purchase of a package, an IS/IT professional will be carrying out the fact-finding process. However, in the case of a small business, there may be no such staff within the organisation. Indeed, for smaller organisations, the formal analysis stage may almost be skipped completely by simply constructing a list of key requirements based on the understanding of the business by the system’s sponsor or owner (who may be the same person). The business may then move straight to the package selection task, using the requirements list as a checklist against which to measure what each alternative package offers.

The question arises as to whether or not larger organisations with IS/IT staff should still carry out a formal requirements analysis if packaged software is being purchased.

Unlike a bespoke solution, the analysis stage will not be providing a requirements catalogue from which the system will be designed from scratch. However, it will still be necessary to have a clear understanding of the requirements before software is purchased. The emphasis in the fact-finding stage should, therefore, be geared towards gaining a sufficient understanding of the requirements so that a list of appropriate packages can be constructed and a short-list produced.

For bespoke development, the analyst is free to use whatever fact-finding methods she/he feels to be appropriate to the situation under consideration.

Documentation tools

As has been suggested earlier, the purpose of documenting the findings will be different, depending on the system acquisition method. When a package is being purchased, a DFD of the current business situation is worth producing because it will illustrate the business processes that may need to be supported. An IFD is also useful because it will help to establish the scope of the system. As discussed above, an ERD can also be useful in ensuring that the package that is selected is capable of supporting the types of data and their relationships that relate to the business activities under consideration. Finally, a requirements catalogue is essential in order to provide a checklist against which package features can be assessed.

With a bespoke solution, the documentation of the analysis findings is an essential input into the design stage. Therefore, assuming traditional development methods, detailed IFD, DFD and ERD diagrams should be drawn.

2.

Errors in the analysis stage of a systems development project are far more costly to fix than those that occur later in the systems development life cycle.

Why do some organisations seem to devalue the analysis process by seeking to get to the system build as quickly as possible?

This question has two aspects: first, the legitimate shortening of the formal analysis process by employing RAD techniques and second, the desire by some managers (business and technical) to see physical evidence that systems development is actually happening by the production of programs (whether they work, do what is required or

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not). The former is perfectly acceptable provided that it is part of a properly constructed RAD project. The second is unacceptable because it fails to recognise the importance of the analysis process and the increase in fixing costs as and when the developed system fails to deliver what is required.

In answer to this question, students should be encouraged to identify systems development projects that have succeeded using formal methods (either RAD or more traditionally developed systems) and also projects that have failed because of poor or incomplete analysis of requirements.

3.

Compare and contrast the relative effectiveness of the use of information flow diagrams, dataflow diagrams and entity relationship diagrams by a business analyst to demonstrate inefficiency in a company’s existing information management processes. Use examples to illustrate your answer.

The aim of this question is to make students think about the purpose of the different diagrams and whether or not they can be applied separately or need to be used in unison. A good answer should highlight the differences amongst the techniques and it follows that for a complete picture of a problem or solution, a range of techniques is useful. Other techniques, such as flowcharts or context diagrams, may also be useful.

Summary of techniques: •

Information flow diagram – focus is on the flow of information amongst people in different departments of an organisation. Relatively simple technique that highlights inefficiencies such as duplication, bottlenecks and repetition. Limited information in relation to DFD.

•

Dataflow diagram – includes information flow, but the focus is on process and separate datastores for information. This detail is needed for systems designers but may be too complex to be understood by business users.

•

Entity relationship diagram – focus is logical grouping of information into entities.

Essential for database designers, may be less important to discuss with business users. This has a completely different purpose compared to the other techniques and so is a valid addition. Some overlap with datastores of DFD and entities of ERD.

The student should use a company case study and use the different techniques to highlight the differences between them.

Examination questions 1.

Briefly review the arguments for and against using interviewing as a means of determining system requirements.

The following points are taken directly from Chapter 11. Students would normally be expected to be able to recall about three points on each side.

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On the positive side they include: •

The ability to gather detailed information through a two-way dialogue

•

They allow candid, honest responses to be made

•

An open, spontaneous process that can lead to valuable insights, especially when open questions are used

•

Responses can be easily quantified, especially when closed questions are used

•

One of the best methods for gathering qualitative data such as opinions and subjective descriptions of activities and problems.

On the negative side, however, the following points can be made: •

The analyst’s findings may be coloured by his or her perceptions of how other similar business operations work. Interviewers need to be especially skilled if this is to be avoided.

•

The development of a new information system may represent a threat through the risk of de-skilling, redundancy or perceived inability to cope with change.

Interviewees may, therefore, not cooperate with the interview process either by not taking part or by giving vague and incomplete replies.

•

The interviewee may tell the analyst what they think should happen rather than what actually happens.

•

The interview at lower organisational levels may not yield as much information as some other methods if staff in this area are not capable of articulating with sufficient clarity.

2.

Explain the relationship between the initiation and analysis phases of the systems development life cycle.

The initiation phase occurs at the very beginning of the systems development process where it is envisaged that a new information system may allow an organisation to take advantage of a business opportunity, improve its capability, reduce costs or respond to external events.

The analysis phase will take place once it has been determined that the system as envisaged is feasible. Analysis will require a detailed review of the business requirements.

3.

Briefly explain (in one or two sentences) the purpose of each of the following diagramming methods: (a) information flow diagram; (b) context diagram; (c) dataflow diagram; (d) entity relationship diagram.

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(a) An IFD is designed to show a high-level view of the main information flows within a business. It does not attempt to show processes or datastores. (b) This is a simplified IFD showing as a single box the system under consideration together with the external elements to which it relates. (c) A DFD takes the basic IFD and adds to this processes (where inputs are transformed into outputs of some kind) and datastores (repositories of data that are used to support the business processes). (d) In an ERD, entities that will be used to define data used in the system under consideration are identified. Relationships (one-to-one, one-to-many and many-tomany) amongst the entities are shown and can be used to construct a physical database design (ensuring that tables contain the necessary foreign keys to allow data to be linked).

4.

Draw a diagram showing each of the following relationships on an ERD: (a) The customer places many orders. Each order is received from one customer. (b) The customer order may contain many requests for products. Each product will feature on many customer orders. (c) Each customer has a single customer representative who is responsible for them. Each customer representative is responsible for many customers.

In this question, students have to draw a simple ERD. Most students find that the hardest part is getting the crow’s foot on the right end. To help with this, we ask the students to imagine themselves in the role of the object by ‘standing in the box’. For example, as a sales representative will you deal with many customers? Yes. As a customer will many sales representatives be responsible for you? No. (a) The customer places many orders. Each order is received from one customer. (b) The customer order may contain many requests for products. Each product will feature on many customer orders. (c) Each customer has a single customer representative who is responsible for them.

Each customer representative is responsible for many customers.

A possible answer is shown in the diagram below.

Product

Sales Representative

Customer

Sales Order

Sales Order Item

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5.

The final examination question is based on a detailed case study for Megatoys and is to be found on the companion web site. (a) From the analysis of the case study, produce an information flow diagram that summarises the current information flows within the company relating to sales order processing. (b) From the information flow diagram produced in (a) identify problems in the current information flow. (c) Assuming that Megatoys decides on an in-house developed bespoke solution for an information system to replace the existing system: (i) Which suitable fact-finding techniques could be used to implement the system? You should state which are most appropriate and explain why. (ii) Explain how a dataflow diagram would be useful to the designers of the system. (d) Identify the main entities that would be necessary to store information to support the sales order process.

(a) The diagram below represents the information flow diagram for Megatoy case study; all flows are within system boundary.

(b) The main problem would seem to be the use of the interface files, which means that credit check requests may or may not reflect the status of current customer orders.

It should be pointed out to students that one of the weaknesses of IFDs is that they give no impression of the timing of an event. If the updating of the sales ledger, new orders and despatch was done in real time, (in other words, the interface files were really transaction files), the IFD would look very little different. (c) (i) The first factor to consider is the size of the company. With 230 employees, a strategy is required that will involve the maximum number of staff while at the same time allowing the fact-finding exercise to take place as quickly and efficiently as possible. An appropriate mixture is: •

Meetings and brainstorming sessions to secure widespread involvement

•

Interviews with key personnel and a selection of staff from the relevant functional areas.

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It is debatable if using questionnaires is appropriate in what is a medium-sized business, but they could be of use for distributors since they show problems in customer service resulting from an existing system. (ii) A DFD will allow analysts to construct a far more complete picture of the business than the simple IFD because processes and datastores will be added. It will become much clearer where processes that cause bottlenecks in the processing of data and decision making exist (the interface files, for example).

It would be a mistake, however, just to construct a DFD of the current system.

What is necessary is then to construct a DFD of the required system so that unnecessary processes can be removed and business decisions supported more effectively. The DFD of the required system will also serve as a very useful communication tool when explaining the functionality and benefits of the new system to the end-users. (d) We have seen much of this before! The kinds of entities (students should be very familiar with these by now) should include customers, sales persons, sales order header, sales order line, product, and sales accounts.

Additional Tutorial Exercises Tutorial exercise 1 – Interviewing skills Tutorial Plan

Split the tutorial group into pairs. Issue one member of each pair with interviewers brief document. Issue the other member of the pair with the vending machine company brief.

Allow 8–10 minutes for interviewers to prepare questions and for students with vending machine brief to digest main points.

Interviewer now spends 8–10 minutes to attempt to extract as much information as possible about the vending machine company.

Then roles swap. The other student in the pair gets the interviewers brief, while the person who did the first interview is given the dating agency brief. Again 8–10 minutes are given to prepare interview questions/digest main points in the case.

Interviewer now spends 8–10 minutes to attempt to extract as much information as possible about the dating agency company.

At the end of this process, try asking some questions that the interviewers should have the answers to. This will test the effectiveness of their interviewing efforts!

Key point

The tutorial exercise reinforces the importance of fact-finding in software acquisition and the importance of effective interviewing as a possible fact-finding technique regardless of the software acquisition method.

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Interviewers brief Scenario

You have been asked to conduct a fact-finding interview with a company at the last minute. You know absolutely nothing about the company but have to find out enough about it and its operations to be able to recommend an information system to meet its needs.

Your objective is not to make any recommendations at this stage but simply to find out as much as possible about the business.

You now have a maximum of 10 minutes to prepare for your interview. Use this time to come up with a questioning strategy and some questions that you need to ask. As a hint, start with broad questions and then focus on the detail afterwards. Be careful to take careful notes, as you will need these later.

Brief A – the dating agency You are the managing director of a well-known dating agency (you need to think of a suitable name!).

Your organisation does not have much in the way of information systems, so you have enlisted the help of an IT consultant from a small, local, but well-known local consultancy – the Derby Consulting Group (DCG). You are looking to computerise your current manual records system and set up a more efficient system for finding suitable partners for your clients. You are also keen to acquire some psychoanalytical software to help make better matches for your clients.

You are about to go into a meeting with the consultant so that she/he can perform a fact-finding exercise to determine your business processes and information system requirements. Unfortunately, the consultant assigned to you is unwell and another one has been sent. However, this consultant is a trainee and knows nothing about your business – not even its name (she/he only had the address and forgot to look at the sign above the front door). This has irritated you no end, and although you are prepared to see the trainee, you are not prepared to make life easy for them.

Your task is to answer the questions that the consultant puts, without volunteering any unnecessary or additional information. Therefore, they will only be able to use the information you have given them when they attempt to document the findings from the interview.

The business

The dating agency has been in existence since 1997 when a group of recent business graduates spotted a gap in the market. Your agency covers all age groups and relationship types but also offers a specialist executive service for upper-middle-class professionals and similar groups.

Your clients are drawn to your agency mainly through advertising in specifically targeted publications. However, your information systems are such that you have no historic data about which clients have been attracted from which publication. You

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normally negotiate advertising space three months in advance of the publication but occasionally book space up to six months ahead to take advantage of cheaper advertising rates.

The advertisements include a basic questionnaire and invite potential customers to submit their personal details and partner preferences.

There are two levels of service offered by the company, 3 star and 5 star service.

3 star service

When a potential client sends in one of the questionnaires from an advertisement, another more detailed questionnaire is sent to the customer together with an invitation to subscribe to the service. Once a questionnaire and subscription form is received, the information is analysed and recorded on a set of paper records. Each client has his/her own set of records and these are stored in a special filing system. In addition, an index of clients is created so that the more detailed records can be easily referenced. Clients pay for the service in the following way. In the first place, when clients initially register, they pay a flat fee. Clients also pay a monthly retention fee if they wish that the agency keeps their records on file. Finally, a further payment is required for every introduction that is made. When a new client is added to the register, existing records are analysed for potential matches. If any are found, the client is sent the details of the possible matches. If any are satisfactory, the agency arranges for a meeting between the two parties.

Client details are held on file for as long as a client wishes to pay the monthly retention fee.

5 star service

This service operates in a way that is similar to the 3 star service. However, rather than fill in a detailed questionnaire, potential clients are visited in their homes by an agency consultant. Similar types of information are gathered but in addition the consultant will gather further information about the client including their social relationships and standing, career development and other relevant personal data. The payments made by the clients operate in the same way, although the fees are higher because of the more personal nature of the service. The other main difference is that before making an introduction, additional research is undertaken to minimise the risk from an unsatisfactory introduction. Finally, the introduction process is managed in a more personal way with an agency consultant present during the first meeting.

Brief B – the snack vending machine company You are the managing director of a company that provides snack vending machines to businesses and other organisations. (You need to think of a suitable name!)

Your organisation does not have much in the way of information systems, so you have enlisted the help of an IT consultant from a small, local, but well-known local consultancy – the Derby Consulting Group (DCG). You are looking to replace your current manual accounting system and vending machine records system and set up a more efficient system for analysing the sales of your range of products in each vending machine location. You are also keen to develop your business further by setting up an 186 .

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Internet site to promote your organisation and also to facilitate better communication with suppliers and customers.

You are about to go into a meeting with the consultant so that she/he can perform a fact-finding exercise to determine your business processes and information system requirements. Unfortunately, the consultant assigned to you is unwell and another one has been sent. However, this consultant is a trainee and knows nothing about your business – not even its name (she/he only had the address and forgot to look at the sign above the front door). This has irritated you no end, and although you are prepared to see the trainee, you are not prepared to make life easy for them.

Your task is to answer the questions that the consultant puts, without volunteering any unnecessary or additional information. Therefore, they will only be able to use the information you have given them when they attempt to document the findings from the interview.

The Business

Many businesses and organisations are now using snack vending machines either instead of or to supplement other catering facilities. The vending machines are stocked with a variety of cold items including canned drinks, chocolate bars, crisps, pre-packed sandwiches, sausage rolls, pies, pasties and the so-called health bars.

The vending machines are rented from a local supplier and are then installed at the customer’s premises. Your company has to keep an inventory of the machines that you rent plus details of which customers’ premises they are stored at. You purchase the items to fill the machines from a variety of sources, including wholesalers and directly from manufacturers.

Machines come in two kinds: one for goods with a relatively long shelf life (canned drinks, chocolate bars, etc.) and one for perishable goods such as sandwiches, pies, etc.

Some customers just have the first kind of machine while others have both. At the moment, no customer has just a perishables machine.

The machines with the perishable goods are restocked on a daily basis. To do this, a number of delivery vehicles are used on a set round trip. Before deliveries can begin, however, it is necessary for your suppliers to deliver to you so that you can stock the delivery vehicles. The other type of machine is restocked on a less frequent basis, depending on the volume of sales at that customer. Sometimes, for example, during a period of hot weather, your company receives calls from the customers to stock up the machines more frequently. This means that you need to adjust the orders with both your suppliers and your pattern of customer deliveries.

Every machine has a counter for each ‘product bay’, and every time a machine is restocked, the details of how many items are sold are recorded. This allows you to analyse the best and worst selling lines. As a result of the analysis, you may adjust prices, the products sold in the machine or a combination of the two. For each customer, you are also able to build up a picture of their employee preferences and can, therefore, tailor the range of items stocked. These customer profiles are currently recorded manually and you would like to be able to computerise them. The hardest part of the operation is to get the stocking levels right for the most-perishable items. Out-of-

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date items have to be disposed of and any unsold inventory imposes substantial extra costs on the business.

Tutorial Exercise 2 – Drawing ERDs: Deringham Hospital Trust Tutor’s guide

This exercise can either be run in a classroom or given to students to do as an exercise in their own time. The scenario is pretty straightforward, but the skill comes in developing the ability to construct ERDs that look sensible and easy to follow. As a hint, we would recommend that students place the employee entity at the centre of their ERD since that is where most links to other entities occur.

The trickiest thing for students is to understand the need for the linking entities to remove many-to-many relationships (e.g. employee/skill). If this proves to be a stumbling block, ask students to think about how many skills an employee might have and how many employees might have those skills. Then look ahead to a possible database design and ask how the ‘employee’ and ‘skills’ could link.

Sample ERD:

Deringham Hospital Trust (DHT)

Deringham Hospital Trust (DHT) has a personnel department, which needs to keep a variety of details about their employees. The information that needs to be kept includes: basic personal details (such as name, address, date of birth, employment commencement date, salary, job function (RGN, surgeon ...), etc.) specialist skills (each staff member will have one or more specialist skills – these could include things such as counselling, neuro-rehabilitation, cancer treatment, clinical supervision, etc.)

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holidays and sickness information (entitlement, days of holiday taken, periods of sickness, etc. – there will be several of these for each employee) appraisal outcomes (including appraisal date, resulting pay award, etc. – each employee is appraised annually) training courses taken (including training course details, date taken, course result, etc.)

For the specialist skills, DHT have a code that uniquely identifies each skill. For example, a nurse with counselling skills might have the code N-COUN to describe this function. Each employee may possess a number of different skills.

On the training side, each course offered by DHT has a unique course code (e.g.

ENB998), and a particular course could be provided by a number of local organisations such as universities and training colleges. Over the course of a person’s employment, they may undertake several training courses.

Activity 1

You are required to construct an entity relationship diagram that covers the DHT case study. To help you, follow these steps.

1. List all the things about which you think data needs to be stored.

2. Construct a basic ERD (ignore for the moment whether the relationship is one-toone, one- to-many or many-to-many) 3. Add in the relationship.

4. Decompose any many-to-many into pairs of one-to-many relationships and redraw the diagram.

Activity 2

Tutors are encouraged to use this exercise as a follow-on activity once students have worked through Chapter 11. This is because the ERD from Activity 1 exercise can now be used as a basis for a database design exercise. The steps are as follows: 1. Using the ERD that you have constructed, define the tables for each entity.

2. Your table definitions should include field names, field length, data type for each field and validation rules for each field. It is recommended that the data types used are those from Microsoft Access.

3. For each table, identify the primary key (remember a primary key may be made up of more than one field) and any foreign keys that exist.

A sample design (not all fields or tables are complete, but a suitable selection) might be as follows:

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Deringham Hospital Trust – EXAMPLE DATABASE TABLES EMPLOYEE MASTER Employee No.

8

N

NI Number

9

Text

Forename

50

Text

Surname

50

Text

Title

50

Text

Gender

1

Text

Job Title

50

Text

Employee No.

8

N

Appraisal Date

8

date

Element 1

1

N

Element 2

1

N

Element 3

1

N

Overall Score

3

N

Employee No.

8

N

Must exist in employee table

Skills-code

6

Text

Must exist on skills table

Date acquired

8

date

Mr Mrs Miss Ms Rev, Professor.

EMPLOYEE APPRAISAL Must exist in employee table

EMPLOYEE SKILLS

SKILLS Skills-code

6

Text

Description

50

Text

EMPLOYEE ABSENCE Employee No.

8

N

Date from

8

Date

Absence type

2

Text

Number of days

4

N

Reason

50

Text

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ABSENCE TYPES Absence type

2

Text

Absence description

50

Text

Employee No.

8

N

Must exist in employee table

Course Code

6

Text

Must exist in training course table

Provider Code

6

Text

Must exist in provider table

Date taken

8

date

Course Code

6

Text

Course Description

50

Text

Level

1

N

Credits

2

N

6 6

Text Text

EMPLOYEE TRAINING

TRAINING COURSE

COURSE/PROVIDER Course Code Provider Code

Must exist in training course table Must exist in training provider table

TRAINING PROVIDER Provider Code

6

Text

Provider Name

50

Text

Address line 1

50

Text

Address line 2

50

Text

NOTE: List of fields for each table is not exhaustive – may well have others as well

All or part of this could be implemented. However, for simplicity, a database could be built using the employee, employee skills and skills entities. This would also help to reinforce the need for linking entities to resolve the problem of many-to-many relationships.

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CHAPTER 11

Systems design Activities Activity 11.1 Identification and removal of insertion, deletion and update anomalies 1.

Identify an insertion anomaly which might cause a problem when adding a new product to the range.

2.

Identify two deletion anomalies which would occur if Cheapo Toys cancelled its order and a record was removed.

3.

Identify an update anomaly if the product Silly Dog was renamed Fancy Dog.

4.

How could the table be split up to remove the anomalies? Define the fields which would be placed in each table and define the foreign keys which would be used to link the tables.

The unnormalised data for the activity is shown in the table on the next page.

1. If a new product is added to the range, it will be necessary to have associated order information for that record. When the new product is first added, there will not be any order information such as order number or customer name to add to the database. This insertion anomaly would not occur if the product related fields such as product code and description were stored in a separate table.

2. If the bottom record was deleted, the product information on the ‘Diplomat’ product would be lost. The details of this customer would also be lost.

3. The relevant records of order number 10001 and 13001 would be in error and would not indicate the product that was originally ordered.

192 .

Fred’s Toys

Fred’s Toys

Super Toys

Super Toys

Super Toys

Cheapo Toys 61 The Arcade

100

100

200

200

200

300

25 West Mall

25 West Mall

25 West Mall

7 High Street

7 High Street

7 High Street

Fred’s Toys

100

7 High Street

Customer address

Fred’s Toys

Customer name

100

Customer number

23201

13001

13001

13001

10001

10001

10001

10001

Order number

.

751

567

637

869

869

425

567

324

Product code

193

Diplomat

Silly Dog

Risky

Kiddy Doh

Kiddy Doh

Slimy Hand

Silly Dog

Action Man

Product description

24

2

3

12

4

12

6

3

Quantity ordered

5.15

32.76

17.42

0.68

0.68

1.39

5.15

13.46

Price per item

123.6

43.52

52.26

8.16

2.72

16.68

30.9

40.38

Total cost

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6/21/97

7/17/97

7/17/97

7/17/97

7/10/97

7/10/97

7/10/97

7/10/97

Order date

007

021

021

021

007

007

007

007

Sales person number

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4. Suggested solution Customer table

•

Customer number (primary key)

•

Customer name

•

Customer address.

Order table

•

Order number (primary key)

•

Order date

•

Customer number (foreign key linked to customer table)

•

Product number (foreign key linked to product table)

•

Quantity ordered

•

Sales person number

•

Price per item (this is placed in this table rather than the product table as it varies according to the price that has been negotiated for each order)

•

Total cost of order (this is inefficient as this is a duplicating field that could result in insertion anomalies).

Product table

•

Product code (primary key)

•

Product description

•

Quantity ordered.

For a more fully normalised table, the order table could be broken down further as follows: Order header table

•

Order number (primary key)

•

Order date

•

Customer number (foreign key linked to customer table)

•

Sales person number

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•

Total cost of order (this is inefficient as this is a duplicating field that could result in insertion anomalies).

Order line item table

•

Order line number (primary key – not used in other tables)

•

Order number (foreign key linked to order table)

•

Product number (foreign key linked to product table)

•

Quantity ordered

•

Price per item (this is placed in this table rather than the product table as it varies according to what has been negotiated for each order).

Activity 11.2 Database design exercise using the ABC case study 1.

Either: (a) Use normalisation to third normal form to identify tables and fields for an ABC database; or (b) Assume the following entities for the ABC database:

2.

•

customer details;

•

sales person details;

•

sales order header details;

•

sales order line details;

•

item details.

For each table in the database, define details of:

• table names; • primary and foreign key fields for each table; • name of each field; • data type of each field; • size of each field; • any validation rules which may apply to each field (e.g. a limit on maximum price or quantity). (a) It is not possible to provide a specimen answer for this question as students might identify and name a group of entities differently to those used by the authors. Readers should refer to (b) for a specific example that uses a number of fixed or named entities.

The answer to part (b) defines the third normal form tables for the ABC database. The answer could be extended by including these tables, but this tends to make the scale of the exercise too large: 195 .

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• Stock details • Supplier details • Invoice • Purchase order • Manufacturing order.

The tables below show the suggested answers.

Customer table: Field name

Field type

Field size

Validation rule Key?

Customer number (or code or ID)

Number

6 (allows for 999,999 customers

Mandatory, >0

Customer title

Text

10

Customer first name Text

30

Customer last name Text

30

Mandatory

Customer address line 1

Text

50

Mandatory

Customer address line 2

Text

50

Customer address line 3

Text

50

Customer address line 4

Text

50

Post code

Text

10

Mandatory

Phone number

Text (to allow spaces and brackets)

20

Mandatory

Fax number

Text

20

E-mail address

Text

50

Credit limit

Number

8.2 (up to 999,999.99)

Mandatory

Sales person number

Number

6

Mandatory, >0

Region number

Number

2

Restricted list from 1,2,3, etc.

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Foreign key in sales person table

Bocij, Greasley and Hickie, Business Information Systems, 6e, Instructor's Manual

Sales person table: Field size

Validation rule Key?

Field name

Field type

Sales person number

Number

6

Sales person title

Text

10

Sales person first name

Text

30

Sales person last name

Text

30

Mandatory

Phone number

Text (to allow spaces and brackets)

20

Mandatory

Fax number

Text

20

E-mail address

Text

50

Region number responsible for

Number

2

Mandatory, >0

Primary key

Restricted list from 1,2,3, etc.

Sales order header table: Field name

Field type Field size

Validation rule Key?

Sales order number

Number

6

Mandatory, >0

Date placed

Date

10

Mandatory

Customer number Number

6

Mandatory

Total order value

Currency

8.2 (up to 999,999.99)

Mandatory

Payment type

Text

10

Restricted choice of cash, cheque or credit

Primary key

Foreign key in customer table

Sales order line table: Field name

Field type

Field size

Validation rule Key?

Line item number

Number

6

Mandatory, >0

Primary key (Not used as foreign key in other table)

Sales order number

Number

6

Mandatory, >0

Foreign key in order header table

Product number

Number

6

Mandatory, >0

Foreign key in product table

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Item cost

Currency

Quantity ordered Number

6.2 (up to 9999.99)

Mandatory

3 (up to 999)

Mandatory

Product table: Field name

Field type

Field size

Validation rule

Key?

Product number

Number

6

Mandatory, >0

Primary key

Product name

Text

30

Mandatory

Product description

Text

100

Standard product cost Currency

6.2 (up to 9999.99)

As well as the validation shown, there will be an automatic check that the field is of the correct type, for example, text fields do not contain characters and that the data entered is less than the size shown.

Activity 11.3 Checksum digits example The checksum digit is calculated using the modulus of the weighted products of the number, as follows:

There is no solution for this activity – the worked example is shown in the text.

Case studies Case study 11.1: Beaverbrooks the Jewellers 1.

Read the case study and identify the main design elements that needed to be considered.

2.

Identify any design features that can be directly linked to specific business benefits.

1. The key design features that students should mention include: •

The need for ‘a central repository for documentation and a framework to enable company information and knowledge to be exchanged’.

•

The ability to use a ‘central data system extensively for stock enquires, placing special orders, sharing company information and making sure the merchandising in each branch conforms to the current company branding and directives’.

•

Collaboration facilitated through ‘KnowledgeWorker collaboration, search and workflow tools’ that ‘sit over the top of the data, which is accessed locally or remotely through a web browser interface’.

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So these design aspects relate to ‘accessibility’, ‘data/database design’, and ‘user interface design’.

2. The business benefits arising from the design features mentioned include: •

saving of staff time in progressing orders as a result of the centralised database system;

•

merchandising in each branch conforms to the current company branding and directives as a consequence of staff using the centralised system;

•

improved productivity as a result of improved methods of storing and sharing information;

•

developing more of a competitive edge as a result of ‘finding more activities the system can help us with’.

It is unclear whether the system is bespoke or packaged in nature. However, the last point demonstrates that a well-designed system is capable of delivering benefits beyond what might have been envisaged at the systems initiation or feasibility stages. What is perhaps interesting here is that if the investment decision had been based purely on the ‘intended benefits’, then it is possible that a decision not to proceed with the investment may be made, thus denying the business of the wider benefits that might be obtained.

Case study 11.2: Systems management: driving innovation should be the main objective 1.

Evaluate the approach to systems management discussed in the case study.

The case study suggests splitting the management of IT systems into two parts; infrastructure and innovation. The argument is that these two aspects need a difference focus and approach from people.

The infrastructure area of IT is focused on keeping existing systems working efficiently and updated. These systems, although critical, are not perceived as providing a competitive edge for the company and may well be outsourced to free people’s time to concentrate on more important aspects of the business.

The innovation area is the use of technology in new ways or the use of new technology to improve the performance of the business. These ideas may well provide a competitive edge for the company. Systems in this area are likely to focus on areas such as web-based apps.

One of the problems of this approach is that many of the innovative applications need to integrate with existing systems and so both the areas need to work closely together.

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Self-assessment exercises 1.

Define systems design.

The design phase of the life cycle defines how the finished information system will operate. This is defined in a design specification that sets out the best structure for the application and the best methods of data input, output and user interaction via the user interface. The design specification is based on the requirements collected at the analysis stage.

2.

What distinguishes systems design from systems analysis?

Systems analysis occurs before system design and involves finding out what the requirements of the users are. Design involves specifying how these requirements will be implemented through the structure of the system and detailed programming.

3.

Describe the purpose of validation and verification.

Validation is a test of the design to check that the design fulfils the requirements of the business users that are defined in the requirements specification.

Verification is a test of the design to ensure that the design chosen is the best solution and that it is error free.

4.

What are process modelling and data modelling? Which diagrams used to summarise requirements at the analysis phase are useful in each of these types of modelling?

Process modelling is involved with the design of the different modules of the system, each of which is a process with clearly defined inputs, outputs and a transformation process. Dataflow diagrams and flow charts are often used to define system processes.

The ultimate result of process modelling is the program code in the different user modules of a system.

Data modelling is involved with considering how to represent data objects within a system, both logically and physically. The entity relationship diagram is used to model the data and a data dictionary is used to store details about the characteristics of the data, which is sometimes referred to as metadata. The ultimate result of data modelling is a database and the module routines that are used to update and extract this data.

5.

Explain the client/server model of computing.

This describes a system architecture in which two separate types of computers are used to provide the service to the end-user. The first is end-user machines such as PCs (clients) that run applications while accessing data and possibly programs from a server. The second are the servers, which are more powerful computers that are used for storing and sharing programs and data. Dividing the work in this way results in an overall efficient system.

6.

What parts of the system need to be designed at the detailed design stage?

•

Detailed database design including multi-user access.

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•

Detailed user interface design.

•

Detailed input design (field validation and security design) and output design (how data will be displayed).

•

Detailed module design – the ways in which the program codes of each module will work will be discussed.

7.

Describe the purpose of normalisation.

Normalisation is intended to simplify the structure of a database to avoid duplication of data in order that anomalies do not occur when new information is added or old information is removed. It involves splitting up a database into different tables.

8.

Explain insertion, update and deletion anomalies.

These anomalies occur in poorly defined database tables. When information in the tables is changed, important information may be lost or it may be necessary to duplicate information. The different types of anomalies are as follows: •

Insertion anomaly – it is not possible to insert a new record into a table without having to insert other information that is unavailable.

•

Update anomaly – it is not possible to change a single occurrence of a field in a table without having to change others in order to maintain the correctness of data.

•

Deletion anomaly – it is not possible to delete a record from a table without also losing some other information that might still be required.

9.

What are the differences between the sequential and direct (random) file access methods? In which business applications might they be used? What is the purpose of a file index?

Sequential file access involves reading or writing each record in a file in a set order.

Random or direct file access allows any record to be read or written. A file index is an additional file that is used to ‘point’ to records in a direct access file for more rapid access.

10. Explain the difference between a batch and a real-time system. Which would be the more appropriate design for each of the following situations: (a) periodic updating of a data warehouse from an operational database; (b) capturing information on customer sales transactions?

A batch system involves processing of many transactions in sequence. This will typically occur sometime after the transactions have occurred. In a real-time system, processing occurs immediately, data is collected or processing follows each transaction. (a) A batch method is most appropriate since this is a periodic update that needs to occur at a time which minimises disruption to the end-users of the system. (b) A real-time method will be used to capture this data.

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11. What are the different types of input validation that must be considered in the design of a user input form?

•

Data type checking.

•

Data range checking.

•

Restricted value checking.

•

Input limits.

•

Multiple field validation.

•

Checksum digits.

12. Describe the main differences between the analysis and design phases within the systems development life cycle.

The differences are: •

the order in which they occur – analysis first, then design;

•

user involvement is high in the analysis stage and minimal in the design stage;

•

technical details such as database structure and system architecture are involved in the design phase, while analysis focuses on business requirements.

Discussion questions 1.

‘The client/server model of computing has many disadvantages, but these do not outweigh the advantages’. Discuss.

A similar question is also asked in Chapter 5 – see relevant section for more detail.

This question will need a brief definition of client/server (C/S) and can then list the main disadvantages that will be compared to the more traditional mainframe arrangement. These disadvantages potentially include: •

Cost – the total cost of ownership (TCO) of maintaining systems with PC-based clients is known to be higher than systems with simpler clients (see Chapter 16).

•

Performance and scalability – the speed of C/S can be poor since with downsizing, the processor power may be limited. There may also be a graphical user interface (GUI) which has a large programme that does not execute rapidly on a PC client.

•

Stability and reliability – C/S systems tend to be less reliable than mainframe systems since they are designed using components from a range of manufacturers, some of which may not be well tested. This contrasts with well-established mainframe systems from a more limited range of suppliers.

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•

Security – C/S usually have more entry points and use operating systems on the client such as Windows that make them less secure.

The performance and scalability arguments are reduced if a three-tier client arrangement is adopted.

The advantages are: •

lower cost of purchase associated with downsizing;

•

greater flexibility for end-users to develop, run or configure their own applications;

•

potential better performance from splitting the processing load amongst more computers.

On the basis of the balance of arguments, it would appear that the assertion is valid.

2.

‘The distinction between system design and detailed design is an artificial one since a bottom-up approach to design is inevitable’. Discuss.

(Note that the discussion of this question will be relatively brief compared to other essay and discussion questions. It is also difficult to support by literature or case studies. It does raise an aspect of system design that has not been explored elsewhere in the text.)

The answer will start with a brief definition of what is meant by system and detailed design and their relation to the design approach. System design involves specifying the structure of the IS at an overall level, before specifying the detailed design of the system. This implies a top-down approach in which the outline design of the system is specified and then broken down further. This contrasts with the assertion in the question that a bottom-up approach is inevitable. It is inevitable since it can be difficult to produce an overall design without considering the detail of the requirements and structures necessary at the module level. In reality, the approach that is used is a combination of top-down and bottom-up.

Essay questions 1.

Explain, using an example from a human resources management database, the normalisation process from unnormalised data to third normal form (3NF).

Essay plan (a) Explain what normalisation is and why it is necessary to avoid database anomalies (see Question 8 above). (b) Describe the unnormalised data elements for an HR database featuring details on, for example, employees, their training records and salary details. Give guidance to limit these to a sensible number of fields in these three areas – say 10–15 fields.

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Unnormalised data is: Employee (emp_no, emp_name, address, tel_no, dob, salary_grade, salary, course_code, course_prov, course_description, date_att). (c) First normal form. Transforming unnormalised data into its first normal form state involves the removal of repeating groups of data. If this data was stored in a single table, it would be necessary to repeat the salary grades and amounts and the training courses. To avoid this, the data will be split into two tables with primary keys (#) and foreign keys (*) as shown •

Employee (emp_no#, emp_name, address, tel_no, dob, salary_grade, salary);

•

Course (emp_no*, course_code#, course_prov, course_description, date_att).

(d) Second normal form. For a database to be 2NF ‘each attribute in a record (relation) must be functionally dependent on the whole key of that record’.

Removing the partial key dependency •

Employee (emp_no#, emp_name, address, tel_no, dob, salary_grade, salary);

•

Emp-Course (emp_no*, course_code#, date_att);

•

Course (emp_no*, course_code#, course_prov, course_description).

There is no change to employee since this has a single key field. (e) Third normal form (3NF). A record is in third normal form if each non-key attribute ‘depends on the key, the whole key and nothing but the key’.

Removing the non-key dependency gives

2.

•

Employee (emp_no#, emp_name, address, tel_no, dob, salary_grade*);

•

Emp-Course (emp_no*, course_code#, date_att);

•

Course (course_code#, course_prov, course_description);

•

Salary (Salary_grade# salary).

Table 11.7, from a relational database, contains a number of rows and columns. When data are entered into the table, all columns must have data entered. Information about product descriptions, prices, product groups and rack locations is not held elsewhere. Explain how, because of its design, the table contains the potential for insertion, update and deletion anomalies.

What is meant by these anomalies and what could be done to prevent them?

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Table 11.7 Table from a relational database Product Code

Product Product Group Cost description Group description

Retail Price

Rack location

Quantity

0942

Small Green

KD

Kiddy Doh

0.19

1.29

A201

16

0439

Large Red

KD

Kiddy Doh

0.31

1.89

W106

35

0942

Small Green

KD

Kiddy Doh

0.19

1.29

E102

0

0902

Small Green

KD

Kiddy Doh

0.19

1.29

J320

56

1193

Spinning Top

PS

Pre School

1.23

12.49

X215

3

2199

Burger Kit

KD

Kiddy Doh

3.25

17.75

D111

0

A brief explanation of these anomalies is given in self-assessment exercise, Question 8.

An example of each is given below: •

Insertion anomaly – when a new record is inserted, details must be available on both the product details and its position and number in the warehouse. Information on the warehouse location may not be available when the product is first put in the catalogue; it will only become available later. An insertion anomaly occurs if there is a space in any table.

•

Update anomaly – These occur when it is necessary to update more than one record when an item changes. If, for example, the product description or rack location changes, then it will be necessary to update this in three places. If this information was a single record in another table, it would only be necessary to increase it once.

•

Deletion anomaly – if information that occurs only once, such as a burger kit, is deleted, then we lose information on its rack location and number in stock.

To avoid these anomalies the following table structure should be adopted: Product (code#, description, group, group description, cost, retail price, rack location code*) Location (rack location code#, quantity) (#Primary key, *foreign or secondary key) 3.

A business-to-consumer company (B2C), a kitchenware retailer, wants to set up an e-commerce site but first wants to produce a prototype in Microsoft Access. The data analysis has been performed and is shown in the expanded entity relationship diagram in Figure 11.22. Produce this database in Access based on the ERD. Include 4 or 5 sample records for each table.

The database in Access should have four tables with the primary keys. The relationships should be set up using the View, Relationships option to link the tables.

The fields linking the table in the sample records should have consistent values.

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Examination questions 1.

Explain the difference between validation and verification. Why are they important elements of systems design?

Both validation and verification are involved with assessing the suitability of a design that has been created, but they differ in their context. Validation is checking that the design chosen is effective in delivering the requirements of the business. In other words, can the design achieve its intended purpose, once implemented. This is clearly important as a prime objective of any IS project.

Verification involves assessing whether or not the design is technically suitable – is it the most efficient design solution of those available. This is important as it could affect the ease of implementing the design or the performance and number of errors in the final system.

2.

What benefits does three-tier client/server offer over two-tier client/server?

Three-tier client/server involves separating out the application program code to display data and permit users to ask questions from the logic of the program. The separation of display code from business code can make it easier and cheaper to update applications as business operations change. Other benefits include better performance as a result of sharing the processing amongst more servers and since the client program is smaller.

This makes three-tier client/server more appropriate for large implementations.

3.

What are the main elements of system design?

The answer should include: •

The architecture or different combinations of software, hardware and networking are needed to build the IS

•

Details on structuring the IS, by separating the program into different modules and processes

•

The design of how data will be captured through input design and displayed in the interface in output design (includes security aspects)

•

The design of data storage or database design.

4.

Explain normalisation and how it can help remove different types of anomaly when modifying a database.

Normalisation is intended to simplify the structure of a database to avoid duplication of data in order that the anomalies do not occur when new information is added or old information is removed. It involves splitting up a database into different tables.

The anomalies occur in poorly defined database tables. When information in the tables is changed, important information may be lost or it may be necessary to duplicate information. The different types of anomalies are:

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•

Insertion anomaly – it is not possible to insert a new record into a table without having to insert other information that is unavailable.

•

Update anomaly – it is not possible to change a single occurrence of a field in a table without having to change others in order to maintain the correctness of data.

•

Deletion anomaly – it is not possible to delete a record from a table without also losing some other information that might still be required.

•

5.

Which criteria are important in deciding whether to use a batch or real-time system?

The decision is usually a balance between the criteria of the cost of the system and the need to process information immediately. Real-time systems tend to be more costly, but they do allow instant delivery of information to customers or managers. Other criteria are: •

ease of identifying errors – these can be notified immediately in a real-time system

•

ease of rectifying errors – major errors will cause a real-time system to fail and the service will be unavailable to customers; in a batch system, it is usually less vital to rectify the problem immediately.

6.

What are the important aspects of user interface design?

The most important aspects are as follows: •

Functionality. The main purpose of the user interface is to allow operators to complete their tasks effectively, quickly, easily and without frustration.

•

Consistency. Consistent systems are easier to learn and use because similar operations are performed in a similar manner in different modules. There needs to be consistency in both the presentation of information and operation. Microsoft Windows has consistency amongst applications that makes it easy to use new applications.

•

Navigation and control. The way in which the system works and the way in which tasks and information are structured should be clearly revealed to the user. Users should be guided through the interaction process in the quickest and most efficient manner.

•

Relevancy. It is important that only the relevant and useful information is displayed.

•

Visual clarity. Users need to be able to find the information they require easily in order to interact with the system quickly. Each screen needs to be easy to read, uncluttered and the user’s attention should be focused on the important information.

Important information needs to be highlighted to attract the user’s attention.

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•

Data input. The user must be able to enter information easily and quickly. Fields should be formatted to cue the user to the type of information required. This will minimise potential errors. Validation of data input should occur.

•

Error handling. The system should be designed to minimise the possibility of user error. All user input should be validated before processing. The system should clearly and promptly inform the user when an error is detected and include information which will enable the reason for the error to be traced.

7.

What different types of validation need to occur on data input to a system to ensure information quality?

•

Data type checking.

•

Data range checking.

•

Restricted value checking.

•

Input limits.

•

Multiple field validation.

•

Checksum digits.

8.

What are the four main attributes of information security which need to be attained in an information system?

(a) Authentication. Authentication ensures that the sender of the message, or the person trying to access the system, is who they claim to be. (b) Authorisation. Authorisation checks that the user has the right permissions to access the information they are seeking. (c) Privacy. In a security context, privacy equates to scrambling or encryption of messages, so they cannot be easily decrypted if intercepted during transmission. (d) Data integrity. Security is also necessary to ensure that the message sent is the same as the one received and that corruption has not occurred.

9.

What is meant by the terms ‘input design’, ‘output design’ and ‘database design’? Illustrate each of them with an example.

Input design includes the design of user input through onscreen forms and also other methods of data entry such as import by file, transfer from another system or specialised data capture methods such as barcode scanning, optical or voice recognition techniques.

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Output design involves specifying how production of onscreen reports and paper-based reports will occur. Output may occur to a database or file for storing information entered or also for use by other systems.

Database design involves designing the structure of a database by specifying the different tables and fields used for each table. For example, an HR database can be broken down into employee table, salary table, training table and departments table.

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CHAPTER 12

System build, implementation and maintenance: change management Activities Activity 12.1 Changing the culture for e-business 1.

The purpose of this activity is to identify appropriate cultural changes that may be necessary for e-business success. Review the four general categories of organisational cultural orientation summarised by Boddy et al. (2005) and take each as characterising four different companies and then suggest which will most readily respond to the change required for a move to an e-business.

State whether you think the cultures are most likely to occur in a small organisation or a larger organisation.

This question requires sweeping generalisations!

1. Survival (outward-looking, flexible) •

Well able to respond to change but not in a structured way – some opportunities may be missed and mistakes made (but these will be learnt from).

•

More typical of a small organisation (start-up company).

2. Productivity (outward-looking, ordered) •

Will respond in a structured way, once the importance of the issue is understood. May take a long time to respond compared to a less rigid organisation.

•

Typical of a large organisation.

3. Human relations (inward-looking, flexible) •

May not respond well because inward-looking. Will depend on key staff taking the initiative and convincing others.

•

More typical of a small company and/or one especially dependent on the quality of its staff for performance (e.g. management consultancy and ad agency).

4. Stability (inward-looking, ordered) 5. Slowest of all the types to respond •

More typical of an established or large organisation.

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Case studies Case study 12.1: Using simulation for business process management (BPM) 1.

Summarise the benefits for BPM discussed in the article.

Provides methods to automate and/or improve activities and tasks for particular business processes. Incorporates performance management which steers the organisation towards its corporate goals.

2.

Discuss the need for a concept such as BPM when all new information systems and information management initiatives are ultimately driven by process improvement.

BPM provides the framework within which processes can be designed, support by technology and used by people.

Case study 12.2: Digital option not for faint-hearted leaders How does the case study demonstrate the importance of organisational change when deploying IT systems?

Too much focus on technology, not enough on change management – that was what scuppered this initiative, according to an investigation by consultancy PwC. The programme, which was cancelled in May 2013 and resulted in an asset write-down of £100m, lacked an executive steering committee to assess progress against agreed measures of quality, time and cost.

The project ‘focused on technology risks and issues, rather than [driving] operational change to business practices in the BBC’, said PwC.

Exercises Self-assessment exercises 1.

What are the main activities that occur in the build and implementation phases of a systems development project?

Build – programming (implementation of design), testing by programmers and selected trained users, migration of data to new system and documentation.

Implementation – procurement of equipment for new system, installation of system, further training, testing by users, managing the changeover from old system to new system and its impact on staff.

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2.

What is the difference between unit and system testing?

Unit testing involves the validation of individual modules in the system, checking that their outputs are consistent with their inputs (‘black box’ testing). System testing involves the assessment of how well the different modules of the system interact – it tests the overall integrity of the system.

3.

How can resistance to change among staff affect a new information system?

Users may exhibit the following behaviour: •

Avoidance – they try to use existing paper-based or information systems

•

Projection – they may blame the system since they do not like the new way of working

•

Aggression – users may take action to stop the system working or generate errors.

4.

What are the most important factors in reducing resistance to change?

Training can help reduce resistance to change, in particular if staffs are told the reasons why the system is being introduced – to support the business and possibly safeguard their jobs. Hands-on training in use of the system can also help increase trust in the system, as can a help desk for staff. The business should be careful to set expectations at a realistic level. Involvement in the acquisition and implementation of the system can also help.

5.

Why is it important to manage software change requests carefully?

Software change requests are difficult to manage because of their volume. If a procedure for dealing with them is not established, some changes may be ignored or conversely time will be taken fixing problems that are relatively unimportant. The procedure should have a method for prioritising the requests so that only the pressing ones are dealt with.

6.

What is the difference between the direct changeover method and the parallel changeover method?

Direct changeover involves moving from an old IS to a new IS at a point in time while parallel running involves a period of overlap in which both systems are running.

7.

What is the best option for an end-user to program a system?

It is best to use a high-level tool such as an application generator or a 4GL that minimises the need for programming. A tool such as Microsoft Visual Basic for Applications that is integrated with standard desktop applications is also appropriate since users will already be familiar with tools such as MS Access or MS Excel.

8.

What is the purpose of a post-implementation review?

A review is intended to highlight problems with the management and implementation of a project in order to learn lessons for the future. It will also highlight the deficiencies

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identified in a system that can be targeted for a future release of the system. Action can be taken to change the way support is delivered to the users, if necessary. The frequency of such maintenance releases can be set in the review.

9.

What is the purpose of the concept of service-oriented architecture (SOA)?

SOA is an approach that incorporates reusable business aligned IT services that can be utilised in a manner that is independent of the underlying application and technology platforms. With SOA, you only have to make the business processes work together, not the applications. This is a benefit because it is easier to standardise business processes rather than applications or IT systems.

Discussion questions 1.

‘All the different project changeover methods are likely to be used on any large project’. Discuss.

This question is intended to show that it is often not a clear-cut decision as to which changeover method to use and each of the methods may be used in the course of the whole project. For example: •

During prototyping, there is likely to be the use of piloting in one area of the company or for one business function. On a larger scale, there will almost always be a pilot before a national rollout of a system.

•

During a project, even if it involves piloting, there is going to be a phased implementation with some modules available before others.

•

Parallel running occurs during all testing phases since the old system will still be running with the new nearly complete but not handling live data.

•

At some point in all projects, there is a decision to move entirely to the new system, with the parallel and phased approach; this will only occur once the development team is confident in the use of the software.

The argument against the above is that at the actual changeover point when the new system becomes live, there can only really be one changeover method.

2.

‘The most important aspect of software quality assurance is to make sure that bugs are identified during the testing phase’. Discuss

This question contrasts two approaches: •

The importance of finding as many bugs as possible at the testing stage, as if the bugs are not found at this stage, it will result in a poor quality system

•

Finding as many bugs as possible before testing or in other words identifying potential bugs before they are encountered in the analysis and design phases; the argument for this is that if bugs are prevented in this way, you do not have the time and expense of fixing them at a later stage.

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On balance, it can be said that the aim of software QA is to develop procedures that improve the quality of the whole development process; this implies that the second approach is correct. However, it can be argued that if the software development process is of poor quality, the most important subprocess to target is that of identifying and fixing bugs.

3.

Companies should aim to minimise the number of patch releases, provided that no serious system errors occur.

The argument for this statement is one of the cost and disruption of issuing patch releases. Patches may also have errors in them, which in some cases may be worse than the original release.

The argument against this statement is that if patches are not made, the users may have to continue using software with minor errors.

This question is posed since there is a tendency to release software and implement patches to business applications frequently. Owing to the problems mentioned above, this should be restricted to solving major problems only. Less major problems can be implemented in interim releases of the software that occur less frequently.

4.

‘The combination of BPM and SOA is more powerful than either is alone’.

Discuss.

The concept of SOA is to develop a number of reusable business aligned IT services that span multiple applications across the organisation. SOA defines the services in such a way as to be utilised in a manner that is independent of the underlying application and technology platform.

The philosophy of BPM recognises that business processes, and the way they are managed, are the key mechanisms that allow the organisation to deliver value to its customers. The approach thus entails an analysis of the structure of the organisation, the way people work together and the way technology is utilised. The focus of business process change will be provided by performance objectives for business processes that are derived from an analysis of how the company achieves its competitive advantage.

Thus SOA provides a way of implementing IT enabled business processes designed using BPM independent of the underlying application and technology platform. BPM in turn provides a framework for the design of IT services implemented using SOA.

Essay questions 1.

You are a business manager responsible for the successful implementation of a new information system. What problems would you anticipate from staff when the new system is introduced? What measures could you take to minimise these?

This is a straightforward question describing the problems summarised in selfassessment question 3 and the measures of self-assessment question 4.

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2.

Discuss the advantages and disadvantages of the different methods of changeover from an old system to a new one. Which is the optimal method?

An essay plan needs to summarise what is meant by changeover and then compare each method according to different factors. The answer could be summarised in a table, such as that given on the next page.

As is noted elsewhere, these options are not mutually exclusive. A pilot may be used before a national rollout using the direct method.

From the table, the optimal method is probably a combination of pilot followed by direct, possibly with phased modules being brought online. The parallel option may not be practical.

3.

Discuss the philosophy and describe the tools of BPM.

Business Process Management (BPM) is an important approach to process management that can be considered both in terms of a philosophy towards process change and as a supporting technology to process change in the form of tools for process design.

The philosophy of BPM recognises that business processes, and the way they are managed, are the key mechanisms that allow the organisation to deliver value to its customers. The approach thus entails an analysis of the structure of the organisation, the way people work together and the way technology is utilised. The focus of business process change will be provided by performance objectives for business processes that are derived from an analysis of how the company achieves its competitive advantage.

Due to the far reaching nature of the BPM approach, it is likely that in most organisations a significant degree of organisational change, including a change of culture, will be required. These aspects are covered in the later organisational culture section in this chapter.

Underpinning the philosophy of BPM are a number of process design tools that allow the approach to be put into operation. These tools include process maps, business process simulation, business activity monitoring and service oriented architecture.

Factor

Direct (Cutover)

Parallel

Phased

Pilot

1. Cost

Lowest

Highest

Medium–high

Medium

2. Time

Fastest

Slowest

Intermediate

Intermediate

3. Quality of new system after changeover

Highest risk of errors

Potentially best since the change to the new system is not made until its performance is satisfactory

Still has elements of direct – even if the whole system may not fail, parts can

Better than direct, not as certain as with parallel

4. Impact on customers

Minimal unless major errors encountered

Could reduce service if staff are confused about which system to use

Can still have problems in new modules

Limits effect to one or until system suitable for rollout

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5. Impact on employees

Lowest

More work required to run systems in parallel but does give confidence about new system

Lower risk than direct

Helps employee buyin since know system is tested

6. Technical issues

May only be practical method if systems are very different

May require two separate hardware platforms and operating systems to be run in parallel

Not always possible to integrate two systems

-

Examination questions 1.

Describe the direct changeover method. How does this differ from phased implementation?

Direct changeover involves the business changing from an old IS to a new IS at a single point in time, while a phased implementation involves the gradual introduction of different modules when the previous system is still in use. The phased implementation is likely to be more costly, but there is a lower risk of the business being adversely affected.

2.

What different classes of fault will a user be aiming to identify in a user acceptance test?

The following types of fault can be identified: •

Requirements from the analysis phase (or in the contract) that have not been implemented or wrongly implemented

•

Bugs which cause the system to fail

•

Other errors which are less critical but act an annoyance

•

Difficulties in using the software.

3.

What are the three classical signs of resistance to change by end-users?

The classical signs are: •

avoidance – they try to use existing paper-based or information systems;

•

projection – they may blame the system since they do not like the new way of working;

•

aggression – users may take action to stop the system working or generate errors.

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4. Distinguish between system testing and unit testing.

Unit testing involves the validation of individual modules in the system, checking that their outputs are consistent with their inputs (‘black box’ testing). System testing involves the assessment of how well the different modules of the system interact – it tests the overall integrity of the system.

5.

What different types of documentation implementation phase of a project?

will

be

used

during

the

The important documentation used at the testing stage is as follows: •

The requirements specification produced at the analysis stage. This is used in the user acceptance test to check that the correct features have been implemented.

•

The user manual will be used during testing and operational use of the system by business users.

•

The design specification will be used during system testing and during maintenance by developers.

•

The detailed design will be used in module testing and during maintenance.

•

The data dictionary or database design will be used in testing and maintenance by database administrators and developers.

•

Detailed test plans and test specifications will be used as part of developer and user testing.

•

Quality assurance documents such as software change request forms will be used to manage the change during the build and implementation phases.

6.

What elements of staff training should a new system receive?

The important aspects of training are education on why the system is to be introduced and training in hands-on use of the software.

7.

What is the purpose of volume testing?

Volume testing is intended to ensure that an IS will be able to cope with a large number of transactions per minute or querying thousands of records as the system becomes more widely used. Initially, a system may only have to cope with accessing a few hundred records; with time, this may increase to tens of thousands of records. Volume testing simulates the situation of many user transactions or large and complex queries to ensure that the performance of the system is adequate.

8.

Which criteria should be used to measure the successful outcome of a systems development project?

The system should be: •

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•

within budget;

•

of sufficient quality, that is, does it meet the requirements of the business and is the number of bugs at a sufficiently low level so as not to represent a problem.

9.

In the maintenance phase of the systems development life cycle, why might an information system need to be maintained?

Maintenance is necessary for two main reasons: •

to issue new releases of the software (‘patches’) which fix known errors in the software;

•

to monitor the performance of the system and gather information on design deficiencies or new features for the software that should be introduced at its next major release.

10. Briefly outline the considerations that a company needs to take into account in deciding between the two main methods of changeover to a new information system: direct and parallel running.

Brief explanation of two alternatives, then the main factors are: •

direct cost (of running two systems simultaneously);

•

indirect costs – impact on staff productivity through disruption;

•

impact on customers and other third parties such as suppliers and distributors;

•

risks of each alternative causing these types of problems – a system that has been implemented elsewhere will have a lower risk than a relatively untried system.

11. Evaluate the concept of BPM.

BPM provides the framework within which processes can be designed, supported by technology and used by people. Provides methods to automate and/or improve activities and tasks for particular business processes. It also incorporates performance management which steers the organisation towards its corporate goals.

12. How could BPS and BAM work together?

Business process simulation (BPS) is usually implemented using discrete-event simulation systems which move through time in (discrete) steps. BPS software is implemented using graphical user interfaces employing objects or icons that are placed on the screen to produce a model.

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Business activity monitoring (BAM) software provides an application that provides real time or fast response information to decision makers and can be seen as complementary to the periodic reports supplied to senior managers by database systems and business intelligence (BI) applications. The software is in response to the need to manage increasingly complex business processes that can occur at several different locations.

BAM software is designed to monitor, capture and analyse business performance data in real time and present them visually in order that rapid and effective decisions can be taken.

The two can work together in that simulation can be used periodically to run processes into the future and predict problems that may occur.

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PART 3

Business Information Systems Management

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CHAPTER 13

Information systems strategy Activities Activity 13.1 Why are environment influences important?

For each of the environment influences shown in Figure 1.3, give examples of why it is important as part of IS/IT strategy to monitor and respond in an information systems strategy context. Environmental influences are the clearest for a company operating an e-commerce service.

Figure 1.3 is on p. 17. The e-commerce service is referred to since this in a customer/external facing system. Some examples of the importance of each of the environmental influences are as follows: •

Customers – customer demand for e-commerce services will vary according to country and the type of product required (see Chapter 14). By monitoring and responding to customer demand for these services and their customer satisfaction, competitive advantage can be achieved.

•

Suppliers – integration with supplier systems as part of buy-side e-commerce can give substantial cost savings and increases in efficiency as suggested by the supply chain management systems of retailers such as Tesco.

•

Employee relations – providing adequate IS services and access to external information can significantly affect staff productivity, customer service and consequently job satisfaction.

•

Legislation – legislation on data protection and privacy are updated frequently. Any company processing customer information through computers must adhere to these principles.

Activity 13.2 Using Porter and Millar’s model to devise strategies for exploiting the Internet Using the Internet as an example of a new information technology, examine how a business could apply information technology to counter each of Porter and Millar’s competitive forces. Applications that you may wish to consider are: sales of existing products by electronic commerce to customers across the Internet; introducing new products available over the Internet; marketing of products across the Internet; reducing the cost and increasing the efficiency of dealing with suppliers through an extranet; and changes in the ease of switching and switching costs through using the Internet. Note that the new technologies may actually improve the power of the company you are dealing with in some instances. State where you feel this is the case.

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1. Threat of new entrants. The Internet has relatively low entry barriers due to the low cost and number of resources needed to create a website or an e-commerce facility.

This explains how a company such as Amazon or in the UK the Internet Bookshop can enter the market and be so successful in eroding the market share of the established competitors. The established companies have the strategic options of becoming early players in the new medium themselves, or taking over their Internet-based rivals before they become too large. For example, Waterstones and Blackwells set up Internet sites quite soon, but WH Smith bought the Internet Bookshop for £9 million in 1998. The threat of new entrants can also be countered by increasing the investment needed to be successful in a market by introducing more services.

2. Rivalry amongst existing competitors. The arguments given in (1) above are also valid here. Investment in IS can help offer a better service and customer experience than competitors. Techniques that IS can facilitate include lower prices (achieved through fewer high street presences), online customer service (‘web self-service’) and value-added facilities such as special interest communities and e-mailing customers when a new book by their favourite author becomes available.

3. Power of suppliers. The Internet has proved very effective in creating links to suppliers through extranets (Chapter 17). The Tesco TIE case study in Chapter 17 shows how Tesco has used the Internet to reduce its costs in the supply chain while increasing customer satisfaction through better-quality produce and a wider range of choices. The power of suppliers can be reduced since, through using an electronic system, the buyer is setting the agenda for how they operate and perhaps increasing dependence on the buyer. Through using technology, it may become straightforward for Tesco to change to another supplier (this is debatable).

4. Power of buyers. This is the opposite argument to (3). By using the Internet to order goods, it can be argued that the buyer becomes familiar with using a particular service and is then less likely to swap to a competitor since they will have a learning curve in using another company’s site and facilities.

5. Threat of substitutes. This argument is similar to the threat of new entrants.

Companies need to be aware that as well as the Internet offering alternative suppliers, it may also provide an opportunity for new products. For example, customers may read fewer books or purchase fewer paper reports because they are using the Internet as an information source. The strategic response by a company may be to offer these substitute products in addition.

Case studies Case study 13.1: Legacy systems are problems for boardrooms not computer geeks What are the reasons for problems with legacy systems and how can they be overcome?

There are broadly four reasons why legacy systems become unwieldy.

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First, separate approaches by business units or departments (such as product development or sales) creates a system where different bits do not fit together (for instance, Deutsche Bank operated a strategy of pitting teams against each other, leading to systems that were initially optimised for individual teams). Companies subsequently built multiple connections amongst systems for wider integration.

Second, mergers and acquisition integration can lead to multiple duplicated systems, such as customer files, accounting and manufacturing systems and so on, but each company’s practices and technologies are different, which adds further complexities.

The third reason is technology itself. The result of different departmental approaches, M&A, and inadequate IT strategy and governance leads to an assortment of diverse mainframes, servers, databases, computer languages and packages from multiple vendors. The resulting fragmented architecture – with thousands of interlinked subsystems – becomes costly to maintain and, as it ages, fewer people know how to work on it. Respondents to a 2013 Forrester Research survey of IT leaders at more than 3,700 companies estimated that they spent an average 72 per cent of their budgets on just such keeping-the-lights-on functions. In 2016, the US Government Accountability Office found that 5,233 of the government’s almost 7,000 IT projects systems were spending ‘all of their funds on operations and maintenance’.

Finally, in an ideal world, systems would be continuously refreshed bit by bit, but there is rarely an appetite to carry out work that is seen by executives as not adding value. As a result, the interwoven jumble becomes operationally unstable, cannot create new products or services, and is unresponsive to regulation changes and cyberattacks.

Problems can be overcome by the following: Retiring or consolidating old code is hard as it necessitates operational changes. High volume data migration from old diverse systems to new ones is time-consuming. A turf war can develop about which system should be kept. It is tempting to upgrade the chosen system to do everything the others did rather than streamline practices. But eventually someone must make hard choices.

Swapping old technology for new is somewhat easier. Expertise and tools for understanding old code, for breaking the monolithic into manageable chunks, and for migration amongst platforms are available. The choices for replacing old systems include a combination of judicious retirement of the old, upgrading to modern hardware and software and migrating to new platforms, primarily to those hosted remotely by third parties, or ‘in the cloud’. Cloud products have matured from basic offerings of computing power and storage to include operating systems and databases and now encompass Google Docs-type applications.

IT organisations are changing too. They are becoming nimbler by adopting agile delivery techniques, teaming people working on the new with those who support the old and by using more standard components.

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Case study 13.2: Next generation of clients forces pace of IT change 1.

What does the case study show about the strategic role of IT?

The case study outlines how the use of IT in services such as banking has moved from a support technology to one in which it can be used to offer improved customer services to the market. The case identifies younger customers in particular as a group which values the use of technology when dealing with the banking sector. In terms of implementation for smaller organisations with smaller budgets, one suggestion is to offer distinctive apps, which cost thousands of pounds to develop rather than millions to tailor the customers’ experience to individual needs.

Exercises Self-assessment exercises 1.

How do strategic systems differ from high-potential projects?

Strategic systems are critical to sustaining future business strategy, while high-potential projects either may or may not be important to the future success of the organisation. A high-potential project may become a future strategic system.

2.

Why do information systems projects fail?

These issues are also covered in Chapter 8. Students should identify some of the following: •

Technical failure. Stemming from poor technical quality, this is the responsibility of the organisation’s IS/IT function.

•

Data failure. Owing to (a) poor data design, processing errors and poor data management and (b) poor user procedures and poor data quality control at the input stage. The fault of the former lies with the IS/IT function, while the fault of the latter lies with the end-users themselves.

•

User failure. Users don’t use the system to its maximum capability – may be due to an unwillingness to train staff or user management failure to allow their staff full involvement in the systems development process.

•

Organisational failure. Where an individual system may work in its own right but fails to meet organisational needs as a whole (e.g. while a system might offer satisfactory operational information, it fails to provide usable management information – this results from senior management failure to align IS/IT to overall organisational needs.

•

Failure in the business environment. This can stem from systems that are inappropriate to the market environment, IS/IT not being adaptable to a changing business environment (often rapid change occurs), or a system not coping with the volume and speed of the underlying business transactions.

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3.

Explain the difference between project size and project complexity when evaluating information systems risk.

A project size of itself does not necessarily mean that the project will have a high level of risk, provided that a large project is straightforward. However, with higher levels of project complexity, risks are increased significantly. When taken together, large, complicated projects have the highest levels of risk.

4.

Why might the mechanistic approach to strategy formulation be considered inadequate?

The mechanistic approach to strategy formulation fails to allow for situations when the business environment is changing rapidly. This could be because of the changing nature of the market, or as a response to other external factors such as the influence of government policy. It also tends to stifle innovation.

5.

How might Porter’s five forces model be helpful in determining information systems requirements?

Students need to apply this model as a means of placing the business in its external environment. This means that the business can be looked at in terms of existing rivalry within the business – IS/IT can be used to increase the capability of the business by reducing costs or offering superior levels of service: •

The threat of new entrants – heavy IS/IT investment reduces the risk of new entrants being able to enter the industry because of potentially high start-up costs

•

Threat of substitutes – IS/IT allows more rapid product differentiation so that rival products become less perfect substitutes and therefore less attractive to most customers

•

The power of buyers – new information systems can be used to access new markets or sell into existing ones more effectively; this reduces the risk of a market dominated by a small number of buyers

•

The power of suppliers – external databases can be used to broaden the base of possible suppliers; this reduces the risk of being exposed to higher prices or lower quality of service as suppliers seek to increase profit margins.

6.

Explain how a fast-food restaurant may use Porter’s value chain analysis to help determine its information system needs.

Students should answer this question to decompose the business into its function business areas. Each area can then be examined to see how decision-making could be improved. Examples might include: •

Using IS/IT to target advertising and promotion more effectively

•

Making links with suppliers to optimise the delivery of consumables

•

Staff management – the industry has flexible staff needs and particular training requirements.

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7.

How might Nolan’s stage model be useful to an organisation that is struggling with spiralling IS costs?

The stage model suggests that after the initiation stage, there will be a rapid expansion of spending on IS/IT. The reaction to this is to exert increased control by: •

raising the profile of IS/IT within the organisation, thus reducing the ability of functional departments to ‘go it alone’;

•

centralising the management of IS/IT;

•

linking of projects to realisable business benefits.

8.

Identify three critical success factors for the maternity department of a busy hospital. How do those CSFs translate into key decisions and then information requirements?

CSFs include: •

Bed availability for standard and emergency admissions

•

Staff availability to cover all shifts (including midwife availability)

•

Inventory availability for drugs and other materials.

Taking each in turn, key decisions might include deciding on the number of beds to keep open to deal with anticipated and emergency admissions – information needs might include an analysis of past and anticipated bed occupancy trends. Key decisions on staff availability include which staff to put on which shift, when to allow holidays, staff training needs and employing the total number of staff required – information needs include general personnel data, training records, holiday records, etc. It is also necessary to decide when to order fresh supplies of drugs from the pharmacy and other materials from the NHS Regional Distribution Centre – this requires systems for inventory control and generation of drugs and materials requests.

Discussion questions 1.

The barriers relating to the relationship between business and IS/IT strategies mean that successful alignment is likely to be the exception rather than the rule’. Discuss

In this discussion, I would expect students to focus on the alignment model produced

by Weill and Broadbent along with their identification of expression barriers, specification barriers and implementation barriers.

While the model and barriers are clear, what remains an issue is whether successful alignment is the norm, or something relatively rare. As is often the case in this situation, the answer probably lies somewhere in between. What could be useful as a discussion activity is to discuss each of the three barriers identified by Weill and

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Broadbent and for the students to identify how they think each of the barriers might be overcome.

Essay questions 1.

Top-down and bottom-up approaches to formulating information systems strategy are fine as far as they go. However, is there a case for a more eclectic or selective approach to the strategy formulation process?

The top-down approach to IS/IT strategy formulation begins with broad business objectives and then drills down through several levels to IS/IT policies and their implementation. As such it can be regarded as somewhat mechanistic.

The bottom-up approach is infrastructure-led in that it is based around how IS/IT supports what the business currently does. The emphasis is on efficient and flexible IS/IT provision.

Alternatives to this approach include: •

inside-out planning where new business ideas can be delivered using the available IS/IT infrastructure;

•

multiple methods (Earl) where a combination of looking at business needs, technical opportunities and current capability are examined together.

Particularly, with reference to the latter, it is suggested that alternative approaches can allow for flexible thinking and a flexible response to changing business conditions and opportunities.

2.

Evaluate the importance of information systems knowledge amongst senior business managers in achieving successful alignment of business and IS/IT strategies.

This question evolved from a related question: namely that the main problem with successfully aligning business and IS/IT strategies is that IS/IT managers do not know enough about business management and business managers do not know enough about IS/IT. Therefore, I would expect answers to this question to identify whether in fact it is senior business managers who need to understand more about information systems strategy, or whether the responsibility lies more with IS/IT managers to be more strategic in their thinking and to articulate clearly the business issues and benefits associated with the applications, hardware and related technology portfolio.

Also relevant to this question is the structure of IS/IT management within organisations. For example, an IS/IT function that is a subset of, say, a finance department may have a very different approach to IS/IT strategy than one where the IS/IT manager reports at the same level as the most senior functional business managers.

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Similarly, organisation size is an issue. Larger organisations will inevitably have more specialist IS/IT management than smaller organisations where IS/IT may be subsumed into another business function. For smaller organisations, it may very well be the case that there is insufficient IS/IT knowledge for the broader strategic issues to be properly considered.

Generally speaking, those organisations that make a better job of integrating business and IS/IT strategies are those where the IS/IT function is managed from the perspective of maximising business benefits across all functional areas of business. In other words, IS/IT managers need to behave in an entrepreneurial manner, rather than a ‘technical specialist’ one.

Examination questions 1.

Explain the concept of Porter’s value chain and how it can be used to identify a company’s information needs.

Value chain analysis allows the functional areas of an organisation to be analysed logically and systematically. Each primary and secondary function can be analysed in terms of its critical success factors, decisions that are needed and information required to support the decision-making processes. It is also possible to look at how business processes are linked across functional areas and the information systems that are needed to make this possible.

2.

How can McFarlan’s strategic grid be used to define an information systems strategy for a company?

This model looks at the relationship between an organisation’s current and possible future information systems and their contribution or potential contribution to the business.

Applications are classified as follows: •

Support: these applications are valuable to the organisation but not critical to its success

•

Key operational: the organisation currently depends on these applications for success

•

High potential: these applications may be important to the future success of the organisation

•

Strategic: applications that are critical to sustaining future business strategy.

The model is useful because it allows the current applications portfolio to be analysed according to where the applications fit. It may also suggest where future development work should be concentrated. Finally, candidates for outsourcing may be selected (e.g. applications in the support category).

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3.

Explain the difference between a business-impacting and a business-aligning approach to a company’s IS strategy. Give examples of strategy tools that can help support each method.

Business-impacting techniques seek to analyse the business to see how IS/IT can be used to benefit the business. These include the following: •

Competitive forces analysis

•

Competitive strategies (in response to the business’ external environment)

•

Value chain analysis.

It is also suggested that any techniques used as part of a business process re-engineering (BPR) exercise apply as well. Business-aligning techniques seek to base the IS/IT strategy on the organisation’s existing business strategy. These include the following: •

Critical success factors analysis

•

Business systems planning (including information engineering).

4.

Using the potential business applications of the Internet show how Porter’s five forces model can help identify opportunities for deploying information systems.

The Internet can be used to affect how an organisation interacts with its external environment. Possibilities include: •

increasing the rivalry amongst other competitors by investing in Internet marketing activities, thus initiating the need for competitors to play ‘catch-up’;

•

reducing the threat of new entrants by establishing extranets with suppliers and key customers;

•

reducing the threat of substitute products by using the Internet to add information value to the products, thus differentiating them from competitor products;

•

reducing the power of buyers by using Internet marketing to reach potential new customers; also possible to lock customers in through an extranet facility;

•

reduce the power of suppliers by using the Internet’s information retrieval capability to seek new suppliers and obtain reliable pricing and product availability data.

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CHAPTER 14

Information systems management Activities Activity 14.1 Location of the IS function at Security Services Limited (SSL) This is an additional case study on the companion website. You should suggest an appropriate strategy for SSL, which is distributed over several sites in the UK.

The case study is also reproduced here, for convenience:

ACTIVITY – SECURITY SERVICES LIMITED (SSL) The case study ‘Security Services Limited’ (SSL) provides the basis for the questions that follow.

1. INTRODUCTION

SSL have grown over the last 30 years to be one of the main providers of private security services in the UK. Turnover for the financial year ended April 1995 was up 17% to £98.4 million from the previous year. Profitability has remained steady at around 9.2% of turnover for three successive financial years. SSL provides a wide range of services to companies, individuals and the public sector. The company has grown owing to a combination of factors including organic growth from the original core business, start-ups in associated areas of security and finally takeover of and merger with companies providing related services. The range of services offered include: •

Armoured transport for conveying substantial amounts of cash and cheques between businesses and banks, cash from banks to businesses for wages and conveyance of high-value items amongst various parties

•

Provision of security services for businesses – these will include security guards (day and/or night-time cover), analysis and installation of security devices and regular security sweeps of business premises

•

Provision of domestic security services – this includes the analysis of domestic security needs and the installation of appropriate security devices.

The most recent addition to the range of services has been the transfer of prisoners amongst police cells, the courts and prison. This is a contracted-out service sanctioned by the Home Office and carried out to Home Office standards.

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2. COMPANY ORGANISATION

Because of the way in which SSL has evolved, the present company structure does not necessarily represent the most effective or efficient way of doing business.

SSL has its corporate headquarters in Milton Keynes, Buckinghamshire. It also has four discrete divisions each of which represents a key area of the business. The divisions are geographically separate from the corporate headquarters and are organised as follows: •

The Private Transport Division (PTD) – based in Bedford, they also have offices in the county town of every county in England and Wales.

•

The Business Security Division (BSD) – based in Leicester, they too have offices in the county town of every county in England and Wales.

•

The Domestic Security Division (DSD) – based in Newcastle-upon-Tyne, they have similar provision of offices to the above two divisions.

•

The Home Office Services Division (HOSD) – this is based in Central London; the precise organisation of this division will be covered later.

None of the divisions shares its premises with any of the other divisions. This is in part due to the way in which the business has evolved (including takeovers and mergers).

However, it is also due the very separate operation of each division.

2.1

Divisional Responsibilities

The autonomous nature of the PTD, BSD and DSD divisions means that in effect it carries out all the activities associated with an individual business. The ways in which each division carries out its business activities varies from division to division.

2.1.1 Private transport division (PTD)

Sales section – these are charged for in two ways: (1) contract sales – these are negotiated for various periods and typically relate to regular transport of specific items between two or more locations; (2) one-off sales – these will be for single transportation tasks arranged by customers on an ad hoc basis.

The sales area is headed by a senior sales manager based at the divisional headquarters.

Each area office also has a sales coordinator, together with a number of sales executives.

Marketing section – this is performed by a small marketing department of two persons based at the divisional headquarters. Annual marketing spend is small – this division carries out core, well-established business operations, with limited scope for growth.

Transport section – this is the key area for this division: the business operations depend on scheduling the appropriate vehicle for the appropriate route and with the right security team. In addition, activities such as vehicle maintenance and staff duty rostering have to be managed.

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Information Systems section – this is a subpart of the Transport section; the division operates a network of three PCs running the following applications: •

Financial ledgers (Sage Sovereign)

•

Route planning (Autoroute)

•

Duty rostering (end-user developed spreadsheet).

Payroll processing is contracted out to Midwest Bank Business Services.

Job costing for new and renewed contracts is performed manually, as is one-off business. This is an area where a new information system may be useful.

The IS function in this division is managed by an ex-policeman who gained some IT experience while in the force but who is not an IT specialist. However, he has made judicious use of consultant support since his appointment.

2.1.2 Business security division (BSD)

This part of the business has experienced steady growth over the past five years. Recent developments have included a response to increased levels of computer theft in small to medium hi-tech companies. An objective of this division is to continue with this organic growth, while at the same time increase its profile in the hi-tech marketplace.

The management structure is well established and comprises the following: Sales – these are managed by a team of sales consultants based at each office. At office level, they are managed by a senior sales consultant. The senior sales consultants report to the Sales Director in Leicester. Sales data is recorded on a PC-based sales ledger and monthly sales figures are sent to Milton Keynes on floppy disk. This department also runs a separate stand-alone PC-based sales tracking and marketing system. A subsection of this department is an installations section that is responsible for supplying and fitting security equipment as ordered by the customers.

Marketing – there is no specific section dealing with this: marketing is perceived as being little more than advertising and leaflet drops in each geographic area and it is left to the sales force to accomplish this.

Finance section – this division has a separate finance function that runs a range of stand-alone PC-based financial ledgers. Purchase and General Ledger information is communicated to head office on hard copy – this is because the ledgers are incompatible with the systems used at head office. Payroll processing is also carried out in-house using the Pegasus payroll package on a stand-alone PC. Purchasing section – this is a subset of the finance section that deals with equipment procurement for the installations section. Manual purchase data is passed to the finance section for processing.

The IS function is now managed by a 24-year-old graduate in Business Computing who has just replaced a recently retired senior accountant.

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2.1.3 Domestic security division (DSD)

This is the most recently established division, having being created by the acquisition from the receivers of a nationwide chain of domestic security specialists within the last six months. They have inherited a sound infrastructure of local offices and a reasonable customer base and have been concentrating on turning round a business operation that failed principally because of inadequate financial controls.

The key issues for this division are to expand the customer base by (1) increasing the number of customers; (2) marketing new services (e.g. security audits); and (3) emphasising the need for ongoing maintenance of existing security systems.

This division is devolved down to area office level, with each office responsible for the local management of the sales activity, materials procurement and installation. Costs and revenues are, therefore, managed at the local level with little current coordination by the divisional head office in Newcastle-upon-Tyne. Currently, the divisional head office is responsible only for collecting financial data from each of the branches (provided by them manually and in a variety of different formats), which it then collates and then passes to SSL Headquarters, again in manual paper form. SSL realises that it has to do something about the whole setup in order to establish a strategic and operational direction for this division.

There is no IS investment and no specialist IS staff in this division.

2.1.4 Home office services division (HOSD)

This division was set up some three years ago as a result of a successful tender to manage the transportation of prisoners amongst police cells, the courts and the prison service. In addition to the divisional headquarters in Central London, there are six regional offices throughout England and Wales. From these offices, the transport of prisoners and deployment of staff are coordinated. In addition to staff in the transportation vehicles, a number of staffs are stationed permanently at police stations in each county.

The divisional headquarters is responsible for: •

the coordination of the regional offices;

•

ensuring that the contractual arrangements are adhered to;

•

accurately costing both the standard service provision plus any additional services offered;

•

processing the accounts payable and receivable and providing financial and management accounting information to SSL’s headquarters (manual hard copy only).

This division is the most well organised in computing terms: the divisional headquarters runs an IBM AS/400 minicomputer which has a set of financial ledgers, budgeting and costing software that has been purchased from KCB Ltd (a specialist in AS/400 financial systems); each regional office has a PC running, routing and rostering software; each regional PC is linked to the AS/400 over a WAN; the divisional 233 .

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headquarters also has a number of PCs running business productivity-type packages (e.g. spreadsheet), which are also linked to the AS/400 (thus allowing the download of data to the PCs for further analysis). The division’s computing is managed by a ‘hybrid’ manager with both financial and IT expertise. There is also one analyst/programmer and one operator/programmer.

3. SSL HEADQUARTERS

The company has yet to rise to the challenge represented by an increasingly diverse yet related range of business operations. Similarly, an historic underinvestment in IS has meant that the divisional areas can only send information in manual form only where it is rekeyed into relatively old mainframe-based financial systems.

The divisional nature of SSL means that the activities at headquarters are principally general and financial management orientated.

The IT department is somewhat old-fashioned and certainly less up to date than some of the divisions. In addition to a DP manager, there are six data entry clerks who are responsible for rekeying financial data from the divisions, three programmers, a systems analyst and two computer operator/systems programmers. The DP manager is about to retire, and SSL must consider how it wishes to manage IS both at headquarters and divisional level.

Questions

It is recommended that up to an hour should be spent on each question.

1.

Analyse how SSL may identify the value that it obtains from its current portfolio of information systems and evaluate the techniques that may be used in assessing future IS investments.

2.

In many parts of the company, it is clear that SSL does not have a coherent IS strategy. Analyse how it may construct an IS strategy that is supportive of its business strategy and the benefits it would derive from this.

3.

Analyse the strategic potential for greater investment in information systems and technology at SSL, both from divisional and company-wide perspectives.

Could business process re-engineering be a useful tool in maximising the potential of IS and IT within the company? Explain and justify your answers.

4.

Describe the current location of IS functions within SSL. Recommend the best location of IT services in the future.

Specimen Answers

The strategy can refer to any of these four areas below, which can be set as additional assignment questions.

It is recommended that students should spend up to an hour on each question.

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1.

Analyse how SSL may identify the value it obtains from its current portfolio of information systems and evaluate the techniques that may be used in assessing future IS investments.

In this question, students need to distinguish between the current and future IS/IT investments.

For the present systems, value will relate to the ways in which existing decision-making processes are supported by the IS/IT already in place. It is questionable if assessing the current value is a particularly worthwhile process in the first place. The systems already exist and there has been a past financial commitment as well as current and future commitments in terms of maintenance and other running costs. What needs to be done, therefore, is to assess the current and ongoing costs against the benefits that arise from current system usage. Assigning monetary values to the costs is relatively straightforward since many of the costs will be tangible in nature. The benefits are a different issue since many of them will be intangible. However, it may be possible to assess the additional costs of running the business if the current systems did not exist (e.g. by replacing computerised systems with manual paper based ones). Again, it is questionable whether or not this is a worthwhile exercise, especially where systems are classified as ‘key operational’ or strategic systems.

What will be useful is to take the existing portfolio of applications across the group as a whole and classify them according to the Ward and Griffiths matrix, designating current systems in the way they fall into the following categories: •

Support

•

Key operational

•

High potential

•

Strategic.

In this way, the strategic impact of the systems both in terms of current and future contributions can be classified.

For future applications, students need to analyse alternative methods of assessing the contribution of future systems development. They need to evaluate: •

hard financial methods (NPV, ROI, payback, etc.);

•

other methods (balanced scorecarding, information economics, etc.).

Students need to identify current practice amongst public and private organisations to illustrate their arguments. They also need to address whether or not: •

hard financial methods can guarantee sound investment decisions;

•

other approaches such as balanced scorecarding offer more informed decisionmaking;

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•

managers usually make investment decisions on a ‘leap of faith’, ‘gut feel’ or ‘entrepreneurial judgement’;

•

a portfolio of appraisal methods is needed.

2.

In many parts of the company, it is clear that SSL do not have a coherent IS strategy. Analyse how it may construct an IS strategy that is supportive of its business strategy and the benefits that it would derive from this.

To answer this question, students need to look at alternative approaches. Besides particular tools and techniques, they need to identify a framework within which the tools can be applied.

One of the most useful frameworks is ‘business impacting, v. business aligning’. As discussed in Chapter 14, it is useful to consider tools for strategy formulation and implementation in the context of whether they are intended to directly support an existing business strategy (business alignment) or indicate new opportunities that may impact positively on a business strategy (business impacting).

Within this framework, alignment techniques include the following: •

CSF analysis

•

Business systems planning

•

Strategy set transformation.

while impacting techniques include: •

Competitive forces models

•

Competitive strategies

•

Value chain analysis.

It is also desirable for students to consider possible planning process frameworks.

These include the following approaches: •

Top-down

•

Bottom-up

•

Innovative

•

Eclectic (selective)

•

Middle-out.

Finally, the balance of the applications portfolio can be distributed amongst the following categories: •

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•

External short-term

•

Internal long-term

•

Internal short-term.

The above framework together with the Ward and Griffiths matrix model can help guide an analysis of how the business might benefit. As seen in earlier chapters, business benefits can relate to: •

Capability – volume and nature of business transactions

•

Cost management – remove duplication of functions and replace expensive manual processes with more efficient computerised ones

•

Control – knowledge about business activities that can be easily communicated to the senior management team

•

Competitive advantage – by using IS/IT to create business opportunities, reduce costs, offer better service, etc.

3.

Analyse the strategic potential for greater investment in information systems and technology at SSL both from a divisional and company-wide perspective.

Could business process re-engineering be a useful tool in maximising the potential of IS and IT within the company? Explain and justify your answers.

As with the previous question, students need to construct a suitable framework for the answer. For the first part of the question, it is recommended that students use some of the tools relating to the impacting and aligning techniques described in the chapter. It is not proposed to come up with specific answers to this question. However, by looking at both Porter’s five forces model and value chain tools, it will be possible for students to analyse the opportunities both from an internal and an external perspective. The competitive forces model will allow SSL to look at how IS/IT can be used to: •

improve linkages with customers;

•

improve supply chain management;

•

create barriers to entry by potential competitors;

•

reduce the risk from substitutes by differentiating the product.

Similarly, by using the value chain model, it will be possible to identify how IS/IT can be used both within individual functional areas and amongst those areas. Examples might include: •

New systems in sales and marketing to present a unified product range and focus marketing activity more effectively

•

Rationalised accounting systems for the group as a whole to reduce costs and establish improved financial control

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•

Improved business operations by using IS/IT to improve workflow.

The second part of the answer should emphasise how BPR focuses on analysing business processes and how they add value to the business. Again, value chain analysis will allow the business to focus on the processes that exist between each functional area and how processes are linked across functional areas. Processes can then be analysed to see whether or not they can be: •

eliminated;

•

combined with other processes using systems to link them;

•

made more efficient by using IS/IT (by reducing manual effort or making them more transparent).

4.

Describe the current location of IS functions within SSL. Recommend the best location for IT services in the future.

The first part of this question is fairly mechanical and can be produced without too much effort. Students need to reflect on how the present IS/IT is distributed across the divisional areas with little central control or management. They also need to observe that the present structure stems from the way the company has evolved over recent years.

For the second part, students need to be clear about what needs managing in the first place. They also need to be clear that when we refer to the best location for IS/IT services, we are actually referring to where within the organisation specific elements should be located. The elements students need to consider include the following: IS strategy planning

•

Hardware platform

•

Network architectures

•

Systems development tools

•

Legacy systems – strategies

•

IS/IT staffing.

Operations management

•

Hardware architecture management

•

Capacity planning

•

Security (backups, access control, error detection and archiving)

•

Technical support (hardware and systems software).

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Telecommunications management

•

Distributed computing

•

Network availability

•

Network security.

Business systems development

•

Systems development centre administration

•

Migration and conversion strategy.

Database administration

•

Repository/data dictionary administration

•

Database management.

User support

•

Help-desk support

•

Information centre services – end-user computing

•

Training

•

Shared services – e-mail and collaborative work systems (e.g. Lotus Notes).

Quality assurance

The alternative locations discussed in Chapter 14 are mainly centralised v. decentralised and various considerations are given there. There will be a range of different approaches given by the students. The broad approach that is often given is: Centralised: •

IS/IT strategy formulation

•

Development of corporate information systems (including DBMS selection and management)

•

Infrastructure strategy and implementation.

Decentralised: •

Development of personal or specifically departmental systems

•

Localised help-desk support.

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Given the way the company has evolved, students often suggest that a high degree of centralisation is needed initially in order to establish control of the IS/IT function as it relates to all divisions of the business.

Activity 14.2 Reasons for outsourcing Examine Table 14.1 and assess which of the reasons for outsourcing would be important to the following: 1. Financial manager (chief finance officer (CFO)).

2. Information systems manager.

3. Managing director.

4. Departmental manager in human resources, marketing or production.

1. Financial manager (chief finance officer). The attitude of the CFO will depend on their view of IS. They may simply see IS as a means of reducing costs. However, if they are also responsible for managing IS, they will be concerned with its impact on customer service, so may see outsourcing as a way of improving this.

2. Information systems manager. As the IS manager, cost reduction would be a factor since the IS budget may not be increasing but demand for services is. The need for specialist expertise, perhaps related to e-commerce, may prove attractive, especially if it has proved difficult to attract staff in this area due to the salaries required.

3. Managing director. The fact that 21% see outsourcing as a strategic business decision suggests that managing directors are likely to be involved in this decision.

They may be looking to reduce the headcount or feel that this is the most effective way of getting ‘more bang for your buck’.

4. Departmental manager in human resources, marketing or production. These will mainly be concerned with the impact on quality of service for their users or customers. Since they are not likely to pay for IS services from their own budgets, they will be less concerned about the cost implications than managers of those departments responsible for the bill.

Case studies Case study 14.1: Outsourcing: beware false economies Discuss the economics of outsourcing.

The outsourcing company aims to use its economies of scale (by serving many clients) and improvements in efficiency to make a profit while offering the service at a lower cost than before. A number of factors have made this harder to achieve: •

Investment is required in the early years of a contract to take over legacy systems; funding for investment from banks is now more difficult to obtain.

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•

There are new choices for customers that can reduce costs using a pay as you go model such as cloud computing and software as a service.

•

The potential disruption to employees outweighs the potential limited cost savings.

From a customer perspective, the case outlines how the maximum economic benefit may be gained from an outsourcing strategy: •

If the contract cost is made too low, it may mean the outsourcing charges for all the extras or cuts back on resources affecting performance

•

Use performance measures such as time and cost to measure performance

•

Keep outsourcing providers to a minimum and get them to collaborate

•

The customer should take responsibility with the outsource provider for overall performance.

Exercises Self-assessment exercises 1.

When information systems costs are being considered, what kinds of costs would be considered development costs and what would be considered operations/maintenance costs?

Development costs would include the following: •

Package software and bespoke development costs

•

RDBMS acquisition

•

Initial hardware and infrastructure acquisition

•

Development tools.

Operations and maintenance costs include the following: •

Ongoing software licence costs

•

Legacy system maintenance

•

Telecommunications running costs

•

Help-desk support

•

Security management

•

Hardware technical support

•

Systems programming support.

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2.

How do strategic systems differ from high-potential projects?

Strategic systems are critical to sustaining future business strategy, while high-potential projects either may or may not be important to the future success of the organisation. A high-potential project may become a future strategic system.

3.

Why do information systems projects fail?

These issues are also covered in Chapter 8. Students should identify some of the following: •

Technical failure. Stemming from poor technical quality, this is the responsibility of the organisation’s IS/IT function.

•

Data failure. Owing to (a) poor data design, processing errors and poor data management and (b) poor user procedures and poor data quality control at the input stage. The fault of the former lies with the IS/IT function, while the fault of the latter lies with the end-users themselves.

•

User failure. Users don’t use the system to its maximum capability – may be due to an unwillingness to train staff or user management failure to allow their staff full involvement in the systems development process.

•

Organisational failure. Where an individual system may work in its own right but fails to meet organisational needs as a whole (e.g. while a system might offer satisfactory operational information, it fails to provide usable management information – this results from senior management failure to align IS/IT to overall organisational needs).

•

Failure in the business environment. This can stem from systems that are inappropriate to the market environment, IS/IT not being adaptable to a changing business environment (often rapid change occurs) or a system not coping with the volume and speed of the underlying business transactions.

4.

Explain the difference between project size and project complexity when evaluating information systems risk.

A project size of itself does not necessarily mean that the project will have a high level of risk, provided that a large project is straightforward. However, with higher levels of project complexity, risks are increased significantly. When taken together, large, complicated projects have the highest levels of risk.

5.

What are the main different types of outsourcing?

Generally, the alternative types relate to the scale of the outsourcing being undertaken.

These can include the following: •

Facilities management

•

Total outsourcing

•

Selective, targeted or partial outsourcing.

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Discussion questions 1.

‘The millennium bug has demonstrated that organisations, more often than not, take a short-term view in their approach to information systems rather than a strategic one’. Discuss.

Students should concentrate on applications software rather than other issues such as processor chips. They can centre their discussion around the following points: •

Some legacy systems in current use can date back to their original development at least two decades ago; the writers of these systems never envisaged that the software would still be running 20 or more years later. This suggests that the software falls at least into the ‘support’ or even the ‘key operational’ categories.

•

The legacy systems referred to above were built at a time when memory and disk space constraints were severe and developers took every possible step to reduce storage space for data and programs. It has been argued that running applications with full eight-digit dates would have been prohibitively expensive, thus putting off systems development and preventing businesses from gaining the benefits of computerisation. Similarly, the cost of fixing these systems is less than the benefits that have accrued over the life of the system.

•

There is evidence that systems developed as recently as six or seven years ago were not millennium compliant. It is much harder to argue the storage and memory costs issue here. Recently developed systems that use six-figure dates, therefore, do suggest that short-termism exists.

•

The failure of many companies to get up to speed with their millennium compliance activities also suggests that a degree of complacency exists (especially for those businesses with a turnover of between £1 and 50 million). Also, it is suggested that some public sector organisations are leaving things to the last minute. Both of these points suggests that, again, too many people are not taking the problem sufficiently seriously and are concentrating on short-term objectives.

2.

‘Public sector organisations such as the police and health service are incapable of delivering good-quality information systems because they are dominated by the need to demonstrate tangible benefits before any investment decisions are made’. Discuss.

This question was prompted by stories in the popular computing press over the last few years concerning a variety of public sector computing fiascos. Cases include the following: •

The London Ambulance Service disaster

•

Wessex Health Authority

•

The national police fingerprint recognition system.

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•

public sector budgeting that concentrates on 12-month budget periods, making it harder to take a longer term view of investment;

•

the emphasis on costing tangible benefits before making investment decisions rather than using more balanced investment appraisal methods.

It is expected that one group of students will stress the need to accurately appraise costs and benefits, while another group will stress the difficulty in putting monetary values on intangible benefits, thus deterring development of otherwise beneficial systems.

3.

Would you outsource the HRM or accounting functions of a company? If not, what is so different about IS/IT?

The issue here is to make a distinction between total and partial outsourcing. The question implies that all of a company’s HRM, accounting or IS/IT functions should or could be outsourced. However, the real issue is whether or not any aspects of those areas are candidates for outsourcing. Students, therefore, need to consider the potential for partial outsourcing or ‘rightsourcing’.

Students should also be guided by the observation that one should outsource commodities, not strategy.

Essay questions 1.

Why do many new information systems seem to deliver poor value for money?

Students need to revisit the section of the chapter on assessing information systems’ value. If poor value for money is being experienced, it suggests some or all of the following: •

Total system costs were not fully analysed

•

The benefits that were envisaged have not been realised

•

The system was poorly targeted

•

The user community was not sufficiently involved in the development process (due to errors or omissions)

•

Poor entrepreneurial vision – the wrong problem was being addressed.

As indicated above, cases need to be explored to support the arguments.

2.

It has been said that when making IS investment decisions, organisations are dominated by organisational politics. Is this really true or are there other, more important issues at stake?

This was another question prompted by experience both from the public sector and from highly politicised businesses.

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Again, Paul Strassmann has published views on this topic and relevant extracts from published work can be found on his website (see above).

The suggestion is that organisations’ IS/IT investment decisions are influenced to a large degree by the political processes within them. Resources in any organisation are finite and user departments can be involved in a bidding process to secure applications development work in their area. Depending on how well they are regarded by other key players in the organisation (especially the IS/IT manager or director), they may or may not receive favourable treatment in the bidding process. This is probably a difficult topic for students to find suitable cases on.

3.

What do you see as the main problems with outsourcing and how can they be overcome?

This is a very straightforward question, and experience has shown that when students are offered a choice between this or a similar question alongside others on different topics, the outsourcing question is the most popular. As above, students need to find suitable cases to support their arguments. Chapter 14 covers the basic points. Problems include the following: •

Loss of control of IS

•

Loss/degradation of internal IS services

•

Corporate security issues

•

Qualifications of outside personnel

•

Negative impact on employee morale

•

Cost reduction may not actually be achieved.

Overcoming the problems involve: •

ensuring that an outsourcing contract will work properly;

•

having an outsourcing strategy that is consistent with the business and information management strategy;

•

matching the level of outsourcing to what the business needs;

•

making sure that methods of retaining control and leverage over suppliers exist;

•

taking account of the human factors involved, particularly where staff may be displaced or made redundant;

•

using an independent specialist to assist in drawing up an outsourcing agreement;

•

allocating time and using measurement systems to manage the outsourcing contract.

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Examination questions 1.

What are the two main alternatives for a company’s location of its information systems? Summarise the benefits and disadvantages in terms of cost and control.

The two main alternatives are the following: •

Centralised

•

Decentralised or devolved.

Chapter 14 contains many of the relevant points.

For a centralised approach: •

achieve and control consistent IS/IT strategy;

•

coordinate IS/IT activities more easily;

•

implement simpler control systems;

•

allocate resources more efficiently;

•

achieve speedier strategic decision-making.

Against a centralised approach: •

competitive element for resources;

•

cumbersome overhead involved.

The decentralised approach also has advantages that counter possible criticisms of the centralised approach: •

rapid response to local problems;

•

improved motivation and commitment amongst staff to their information systems.

The disadvantages are: •

split responsibilities need to be defined carefully to avoid forgetting things;

•

ability of functional business areas can tend to adopt idiosyncratic approaches to IS resulting in higher costs and less efficiency across the business;

•

complicated control procedures, which make decision-making more difficult and time-consuming.

2.

What information systems management activities would occur with a total outsourcing contract?

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The activities would centre around the management of the outsourcing contract and the information systems strategy within the business. It would be necessary to: •

•

retain sufficient in-house management and technical expertise to: –

manage the OS vendor;

–

monitor contract performance;

–

keep strategic business and technical options under review.

have in place detailed measurement systems to allow: –

a detailed contractual agreement to be drawn up;

–

monitoring of the OS vendor’s performance.

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CHAPTER 15

Managing information security Activities Activity 15.1 Biometric security Devices employing biometric security measures are now within the reach of a typical computer user. Using the Internet, magazines, product catalogues and other sources, locate at least two examples of low-cost products that employ biometrics.

Numerous devices have started to appear on the market. Some good examples include the following: •

Software that uses a webcam to compare an image of someone’s face to a list of authorised users. Matching is carried out by creating what might best be described as a contour map of a user’s face. This is achieved by identifying and recording a number of distinct features, such as the size and position of the user’s eyes. The more features recorded, the more accurate recognition is likely to be. This kind of software is normally used to secure a computer while the owner/user is away.

•

Flash drives that incorporate a built-in fingerprint reader. These devices are now widely available and are relatively inexpensive.

It is possible to buy a hardware device that incorporates a fingerprint reader. The device locks a personal computer (usually by disabling the keyboard and mouse) so that it cannot be used until the user gives his/her fingerprint. These kinds of fingerprint readers are relatively inexpensive and offer a fair level of security.

Activity 15.2 Pretty Good Privacy (PGP) Using the Internet as a resource, locate information related to a well-known product called GNU Privacy Guard (GPGP, sometimes called GnuPG). Describe how GPGP works and explain why you think the system is so popular.

Students are expected to learn how public key encryption works. In brief, this form of encryption uses two keys to encrypt and decrypt data, a private key and a public key.

Anyone can access the public key and use it to encrypt a message. However, only the owner of the private key can decrypt the message. Since the public and private keys cannot be derived from one another, public key encryption offers a very high degree of security. Typically, a company (or individuals within a company) will create a public and a private key. The public key can be placed on a website, attached to e-mail messages or accessed via a trusted third party (often called a certificate authority).

Using the public key, other people can encrypt messages and send them to the company in the knowledge that only the intended recipient – who controls the private key needed

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to decrypt the message – will be able to read it. In order to ensure that encryption keys are not tampered with, trusted third party, called a certificate authority, can be used to create and issue encryption keys.

There are several reasons why public key encryption is popular, including: •

It provides a very secure way for people/companies to communicate.

•

It provides protection against messages being tampered with, as well as hiding the contents of the message.

•

Packages like GPGP are available free of charge as open-source software.

•

Once the system has been set up, it is quick and easy to use.

Activity 15.3 Computer viruses Using the Internet as a resource, find details of at least three major virus incidents over the past three years. For each incident, describe: 1.

where the virus originated and how it spread;

2.

how many machines were infected around the world;

3.

estimated losses resulting from the infection.

This is a research question intended to underline the serious threat posed by computer viruses.

Activity 15.4 Denial-of-service attacks Using the Internet as a resource, locate three examples of recent denial-of-service attacks. For each example, describe how the attack occurred and the losses suffered by the victim.

This is a research question.

Case studies Case study 15.1: Are you mentally prepared for a cyberattack?

Discuss the changing nature of cybercrime in terms of its cause and effect.

As cyber terrorists become more sophisticated, attempts to disrupt infrastructure could, in future, lead to loss of life – if, for instance, a train were derailed, or air traffic control systems compromised. Cybercrime would soon become a physical threat to our wellbeing, as critical infrastructure such as transport goes online and becomes vulnerable to manipulation.

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Case study 15.2: Connected devices create millions of cyber security weak spots Identify the security issues concerning devices connected to the Internet and how they might be addressed.

‘Security in the hardware industry is a decade behind where it is in the software industry’, he said. ‘Mirai was successful because so many webcams, digital video recorders, etc. have been produced with default passwords that have never been changed. A simple Internet scan identifies them and they can quickly be compromised’.

Cyber security experts have been warning about the risk of ‘Internet of Things’ devices for years, staging high profile hacks at their annual conference Def Con that show how everything from connected cars to insulin pumps could be hacked

Device makers should force users to change their default passwords as part of the setup process and issue security updates, just as they do on PCs, he said. Installing an agent that can monitor what the device is doing would have showed the ‘very anomalous’ behaviour when it was recruited to a botnet, he added.

Exercises Self-assessment exercises 1.

What are the two basic reasons for the need to control computer-based information systems?

The two basic needs for controls are the need to ensure the accuracy of the data held by the organisation and the need to protect against loss or damage.

2.

List some of the advantages and disadvantages of using passwords to protect equipment and sensitive data from unauthorised users.

From the text, some of the advantages of using passwords include the following: •

Access to the system can be divided into levels by issuing different passwords to employees based on their positions and the work they carry out.

•

The actions of an employee can be regulated and supervised by monitoring the use of their password.

•

If a password is discovered or stolen by an external party, it should be possible to limit any damage arising as a result.

•

The use of passwords can encourage employees to take some of the responsibility for the overall security of the system.

•

Password protection is relatively simple and inexpensive to implement.

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Some disadvantages include the following: •

In order to ensure the highest level of security, all users must take care to choose appropriate passwords and ensure that they are not disclosed to others.

•

By themselves, passwords do not provide an extremely high level of security. As shown in the relevant case study, there are many ways in which password protection can be circumvented.

•

Even when used on a comparatively small scale, passwords can dramatically increase the demands made on support staff. Lost or forgotten passwords, for example, represent one of the most common requests made to support staff.

3.

What types of controls can be used to protect a computer-based information system against vandalism, theft and unauthorised access?

The basic categories of controls are the following: •

Physical protection

•

Biometric controls

•

Telecommunications controls

•

Failure controls

•

Auditing.

4.

What are the advantages and disadvantages of an approach to controlling computer-based information systems that is based on containment?

Some advantages include the following: •

Such an approach provides a great deal of flexibility since a number of different techniques can be used in combination to increase the level of protection.

•

This approach is particularly suited to certain kinds of organisations. Large national or multinational organisations, for example, often have their IT resources dispersed across a large geographical area, making it easier to isolate specific resources or distribute important assets more widely.

Some techniques, such as encryption, are simple and inexpensive to implement.

Some disadvantages are as follows: •

The defences erected must be continually monitored and improved.

•

In some cases, isolating important systems or distributing data more widely can have an impact on the organisation’s effectiveness.

•

In general, a policy of containment is expensive to implement and maintain.

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5.

Describe some of the ways in which accidental damage can occur to a computer-based information system.

Some of the most common causes of accidental damage include the following: •

Inaccurate data entry

•

Attempts to carry out tasks beyond the ability of the employee

•

Failure to comply with procedures for the use of organisational information systems

•

Failure to carry out backup procedures or verify data backups.

6.

Explain why virus scanning software and anti-virus programs are often of only limited value in detecting and removing computer viruses.

Some of the reasons for this include the following: •

Virus detection programs must be continually updated otherwise they are unable to detect new types of computer virus.

•

Some types of computer virus, such as ‘polymorphic’ viruses, can alter their structure so that they are not easily detected.

•

Some types of computer viruses are engineered to evade detection by specific virus scanning programs.

•

In tests, no virus detection program has yet achieved a perfect score, meaning that no virus detection program is completely effective.

7.

What is malware?

This is a contraction of ‘malicious software’ and is a general term used to describe any software created for malicious purposes.

8.

What is the difference between spyware and adware?

Spyware is a general term used to describe any software intended to gather information without the knowledge or consent of users. Adware is a specific type of spyware; it is used to gather information on computer users so that companies can target their advertising more effectively.

9.

Why do some security specialists recommend the use of disk imaging software?

New forms of malware are capable of defeating firewalls, anti-virus software, etc.

Some programs are even capable of uninstalling security software or disabling it while giving the appearance that the software is working. Some malware can survive measures such as formatting the hard disk, immediately infecting the system again once new software is installed. Security specialists recommend the use of disk imaging software for three main reasons:

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•

Creating a disk image tends to be quick and easy. As an example, there is no need to select individual files to backup because the entire contents of the disk will be copied.

•

Restoring a disk image effectively carries out a low-level format of the hard disk and overwrites any data that was previously held. No known malware can survive this process.

•

Restoring a disk image is quick and easy. This means that a system can be restored to full working order in a matter of minutes.

10. What is phishing?

This describes attempts to gather confidential information from computer users through deception. One of the most common techniques involves creating a website that mimics the official site of a bank or other service provider. Computer users are then sent emails inviting them to visit the site. Once there, they are asked to enter security information in order to access various services. Of course, these services do not exist and any passwords or other sensitive information entered at the site is sent directly to the criminals responsible for fake site.

Discussion questions 1.

What motivates an individual or organisation to create a computer virus?

Some of the motives that students might wish to explore include the following: •

Revenge, for example, against a former employer

•

Financial gain, for example, through criminal acts such as extortion

•

Competitive reasons, for example, it is suggested that some people create viruses in order to ‘defeat’ the programmers of virus detection programs

•

It has been alleged that computer viruses are created as a means of industrial sabotage or as an act of terrorism.

2.

‘No computer-based information system can be considered completely secure – all organisations should base their control strategies on recovery’. Make a case in favour of or against this argument.

Students may wish to consider some of the following points: •

A policy based on recovery means that the organisation is willing to accept damage to valuable equipment and data. In the long term, this may be more expensive than attempting to prevent such damage in the first place.

•

Unless some form of action is taken to deter unauthorised access, companies will actually increase the severity of the problem.

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•

Ultimately, the security of a company’s hardware, software and data resources relies on the intelligence and skills of those charged with protecting them. There will always be at least one hacker that is more skilled and more intelligent than the company’s employees. This means that it is impossible to create a series of defences that provide complete security.

•

If a company’s defences will be breached anyway, there is no reason to waste time, money and other resources on creating ineffective barriers. Surely, it is more sensible to divert these resources towards recovering from a security breach? In this way, the company will be able to recover more quickly and more fully.

3.

‘An increased reliance on the Internet exposes organisations to increased risk in terms of threats to information systems security’. Make a case in favour of or against this argument.

Some of the issues that students should consider include the following: •

As soon as an information system becomes connected to the Internet, the level of threat is increased because the system is now prone to attack from outside the organisation.

•

Increased reliance on the Internet as a means of conducting business transactions means that potential losses may be larger if the organisation is deprived of its Internet services.

•

Increased reliance on the Internet increases the risk posed by threats such as denial of service attacks; such threats would cause little harm to an organisation that conducts most of its transactions offline.

•

Does an increased reliance on the Internet as a business tool also mean increased reliance on Internet security tools, such as firewalls? Just how good is Internet security? Is it likely that a firewall or intrusion detection package will be able to deflect every possible attack?

4.

How can companies reduce their vulnerability to social engineering attacks?

According to Kevin Mitnick, arguably the world’s best known hacker, social engineering exploits a number of human traits, such as the desire to be liked, or a desire to avoid punishment. The only way to protect against social engineering is to help people overcome these natural tendencies through training and the implementation of an extremely thorough information security policy. Mitnick’s ideas about what should be contained in an information security policy can be used to form the basis of a comprehensive and effective set of procedures applicable to a wide range of organisations.

This question is intended to encourage students to consider ways in which an attacker can gain access to confidential information and systems, then find appropriate responses. Students are not expected to identify dozens of different vulnerabilities.

Instead, they should focus on a smaller number of examples that can be applied to a variety of organisations and situations. Some examples include the following:

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•

Some attacks involve forging e-mail messages or other communications that ask for information to be forwarded to another location by e-mail, fax or other method.

This can be dealt with by creating a procedure for verifying e-mail messages, perhaps by following up requests with a telephone call, or simply prohibiting employees from forwarding information without the approval of a senior manager (who takes responsibility for verifying the identity of the person requesting the information).

•

Hackers often make a number of attempts to gather information needed in order to access a system. In attempting to learn a password, for instance, the hacker may need to contact a number of employees using some kind of pretext. If all unusual communications are logged centrally, it may be possible to detect this kind of activity and prevent any further security breaches. Often, the fact that a hacker spoke to a number of different employees in an attempt to gather information comes to light only after a serious security breach.

•

Hackers often pose as members of staff in order to gather the information they need in order to access a system. The identity of anyone requesting confidential information should be verified by telephoning the employee back using the number listed in the company’s internal directory. This prevents someone from pretending to be working away from his/her office.

Essay Questions 1.

Conduct any research necessary and produce a formal security policy governing student access to the computer systems at the institution that you attend. In addition to providing details of any controls already in place, your work must also address the areas listed below. For each of these areas, you should also justify any decisions or choices made: (a) what activities are considered acceptable; (b) what activities are considered unacceptable; (c) the sanctions that may be used against those failing to comply with the policy.

(a) Typically, an institution will describe a number of specific activities that are considered acceptable and will state that any activity not mentioned should be considered unacceptable. Some of the activities described are as follows: •

Use of applications software for activities related to academic study: word processing, spreadsheets, use of CD-ROM materials and so on

•

Use of the Internet for research purposes

•

Use of printing facilities for documents related to academic study

•

Use of e-mail software to contact academic staff and in support of academic research.

(b) In general, a number of specific items will be listed together with a more general statement of policy. The items listed may include the following:

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•

Students must not disclose their passwords or allow others to use their network accounts.

•

Students must not use the institution’s facilities in support of activities not related to the student’s course of study.

•

Students may not install or use leisure software (games).

•

Students may not view or download pornography, illegal software or games. In addition, students will be warned against copying or downloading copyrighted materials.

•

Students must not carry out any activity that causes harassment of any kind, including racial and sexual harassment.

•

Other prohibited activities may include theft, physical damage and attempts to view or modify confidential data held by the institution.

Institutions may also produce a more general statement that prohibits any activity considered illegal under the Data Protection Act or Computer Misuse Act. Such a statement will normally be accompanied by a list of the activities specifically mentioned by each piece of legislation. (c) Typically, the sanctions imposed against those in breach of the institution’s policies will include the following:

2.

•

A formal warning that may lead to further sanctions in the future

•

Temporary or permanent suspension of the student’s right to use the institution’s facilities

•

Temporary or permanent expulsion from the institution

•

Prosecution under criminal or civil law.

Select an organisation that you are familiar with, such as a university or bank.

Conduct any research necessary to address the following tasks: (a) Describe the potential impact of infection by computer viruses and other malware on the organisation’s computer-based information systems. (b) Consider the effectiveness of tools, methods and procedures designed to protect computer-based information systems from computer viruses and other malware. (c) Evaluate the level of risk posed to the organisation by computer viruses and other malware. Produce a set of recommendations that may assist the organisation in reducing this risk.

(a) In general, all organisations will suffer losses arising from the following three basic areas: •

Damage to important data

•

Loss of access to important hardware, software and data resources

•

Inability to carry out normal activities.

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(b) Students should consider a wide range of areas. Some of these areas may include the following: •

The effectiveness of any existing virus detection software used by the company

•

Whether company procedures work to reduce the risk of virus infections

•

How effective the company’s recovery plans are likely to be.

Students should relate their material to a general discussion of the effectiveness of virus detection software. (c) In general, the level of risk to all but the smallest companies remains high. A student’s response should recognise this and should use the figures and information provided in the text to support their arguments. This material can also be used to develop a series of recommendations that will act to reduce the level of risk to the company.

In particular, students should deal with issues such as ensuring that employees:

3.

•

Do not ‘carry’ computer viruses from personal computers to the company’s information systems.

•

Know how to recognise the signs of an infection by a computer virus.

•

Understand what action should be taken if a virus infection is discovered.

Outline some of the threats to information systems that arise as a result of doing business via the Internet. Illustrate your response with appropriate examples and indicate how the risks you identify can be mitigated.

Students should refer to the final part of the chapter for an overview of common threats faced by organisations that do business via the Internet. A good response will describe and discuss issues such as denial of service attacks, identity theft, brand abuse, fraud, cyberterrorism and cyberstalking.

In general, students should describe an approach to security that includes the following points: •

The use of appropriate software such as anti-virus packages, firewalls and intrusion detection software.

•

The implementation of a formal security policy that incorporates an acceptable use policy.

•

The use of regular audits to control activities such as the use of illegal software.

Audits can also be useful in detecting unauthorised access to data and attempts to carry out acts of fraud.

•

The introduction of various recovery methods intended to allow the organisation to resume its operations as quickly as possible. In the context of an organisation that relies on the Internet as a business tool, this might include access to backup servers so that essential administrative processes (e.g. e-mail) and e-commerce facilities (e.g. customer ordering facilities) are restored quickly.

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Examination questions 1.

Computer viruses represent a significant threat to the security of organisational computer-based information systems. Some sources have estimated that as many as 1,700 new computer viruses appear each month.

You are required to: (a) Provide a definition of the term ‘computer virus’. (b) Using relevant examples, describe the ways in which computer viruses can be transmitted. (c) Discuss some of the ways in which organisations can protect against computer viruses. Highlight some of the advantages and disadvantages of each method described.

(a) The text provides the following definition for a computer virus: A computer virus is a computer program that is capable of self-replication, allowing it to spread from one ‘infected’ machine to another. (b) The student’s response should deal with some or all of the following: •

Via software downloaded from the Internet

•

Via disks or other media used with an infected personal computer and then returned to the company’s information systems

•

Deliberately released into the company’s information systems, perhaps by a disgruntled employee

•

Via infected software distribution media

•

Via illegal (‘pirate’) software used on the company’s information systems without proper authorisation.

(c) The student’s response should discuss some or all of the following approaches:

2.

•

The installation of virus detection software

•

The introduction of formal policies, for example, a formal security policy

•

Education and training designed to alert employees to the threat posed by computer viruses and allowing them to recognise the signs of infection and react accordingly

•

Regular audits of software and company-wide scanning of software and data files

•

If not already implemented, a procedure for making regular backups of important data.

With regard to the control of computer-based information systems, answer the following: (a) Describe some of the common security threats facing organisational computer-based information systems.

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(b) Explain the four basic approaches to controlling computer-based information systems. Highlight the advantages and disadvantages of each approach. (c) ‘More effective protection for a computer-based information system can be achieved by employing a combination of the four basic approaches to control’. Using relevant examples, discuss this statement.

(a) The most common threats to information systems are the following: •

Accidents

•

Natural disasters

•

Sabotage (industrial and individual)

•

Vandalism

•

Theft

•

Unauthorised use (hacking)

•

Computer viruses.

(b) The four basic approaches to controlling computer-based information systems are as follows: •

Containment: attempting to control access to an information system.

•

Deterrence: using the threat of punishment to discourage potential intruders.

The overall approach is one of anticipating and countering the motives of those most likely to threaten the security of the system.

•

Obfuscation: hiding or distributing assets so that any damage caused can be limited.

•

Recovery: recognising that, no matter how well defended, a breach in the security of an information system will eventually occur. This approach attempts to ensure that the normal operation of the information system is restored as quickly as possible, with minimal disruption to the organisation.

(c) Students should demonstrate an understanding of the weaknesses of each approach described in (b). Using relevant examples, the student should attempt to demonstrate how a combination of the four basic control strategies would provide the highest level of protection against damage and unauthorised access.

3.

A formal security policy can provide an effective means of protecting an organisation’s computer-based information systems against theft, damage and other hazards. (a) Provide an overview of the areas that will be outlined by a typical formal security policy document. (b) Describe the ways in which a formal security policy can help protect an organisation’s computer-based information systems. (c) A number of factors will determine whether or not a security policy works effectively. Using relevant examples, provide a brief discussion of some of these factors.

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(a) A formal security policy document will typically contain the following basic sections: •

What is considered to be the acceptable use of the information system

•

What is considered to be the unacceptable use of the information system

•

The sanctions available in the event that an employee does not comply with the security policy

•

Details of the controls in place, including their form, function and plans for developing these further.

(b) Some of the areas that students might discuss include the following: •

Setting in place procedures, such as regular backups of data, which will help improve security

•

Helping ensure that users understand which actions are acceptable and which are not

•

Educating users so that they can recognise and respond to threats.

•

Setting out guidelines that help and educate employees so that they are able to use information systems safely and responsibly

•

Publicising the sanctions that will be used against those responsible for a breach of security.

(c) Some of the factors that will influence whether or not a policy is successful include the following: •

Whether the policy is comprehensive and deals with the majority of the issues relevant to the company

•

Whether managers support and enforce the rules and procedures set out in the policy.

•

Whether the sanctions available to managers are used consistently and responsibly

•

The way in which the policy is implemented, for example, publicity will be required to ensure that all employees understand that a policy exists.

•

Whether employees receive adequate training and guidance so that they understand the importance of the policy and their responsibilities.

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CHAPTER 16

End-user computing – providing end-user services Activities Activity 16.1 Controlling employee access to the Internet In this scenario, you are a senior manager at a company that currently limits employee access to the Internet. You are considering relaxing company restrictions on the personal use of company e-mail and Internet resources but are concerned about issues such as staff time-wasting and the need to monitor how staff use these facilities.

1. Prepare a list of advantages and disadvantages of enabling widespread employee access.

2. Make another list of actions you will need to take when you proceed with granting wider access.

1. Students need to provide a summary of advantages and disadvantages: Advantages

•

More rapid access to information such as competitive intelligence (Chapter 1) can enhance productivity and quality of decisions (a largely intangible benefit).

•

Increase in job satisfaction of staff.

Disadvantages

•

Non-productive time is the main risk either through personal use, or if using the Internet inefficiently to find work-related information.

•

Viewing of prurient content.

•

Reduced security of company information (can be passed on by e-mail more readily when there is reduced access).

2. Summary of possible actions: •

Education on why the facility is to be introduced (how it contributes to the business)

•

Training on using the Internet efficiently

•

Clear guidelines on what is and isn’t allowed in terms of times of access and type of content viewed – that is, clear ‘acceptable use policy’ and actions that will be taken when this is broken.

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A further discussion point:

Note that the access levels vary widely amongst countries (and in all probability amongst different organisations in the same country). Will this really lead to these countries or organisations losing competitive edge?

Case studies Case study 16.1: The 21st-century help desk You are a placement student who has joined the help-desk team as assistant manager in an organisation with 5,000 PCs and their users who require support.

To familiarise you with the business requirements of the help-desk team, your manager has asked you to prepare a report based on the article which summarises: 1. How the success of the IT Help desk can be measured.

2. Emerging trends in technology and practice in managing the IT help desk more effectively.

Use the article to identify alternatives under both of the headings above.

This is an excellent case study since it is a classic IT service management problem that has a significant impact in terms of cost and productivity. It can be improved through application of the right metrics and the appropriate tools and processes. It is also good since students can relate to it from their experience at university/in company.

1. The article suggests that, in the past, measurement was through completion of workflow tasks – what it refers to as a ‘log, follow-up and close’ mentality. These types of metrics are still important; examples would include: •

Average time to respond/follow-up and time to close by person

•

First-call fix, numbers of calls-to-fix

•

Maximum times

•

Reoccurrence of problem within a period.

This has now changed to a more service-oriented culture where measures are likely to include: •

Customer satisfaction with call-out

•

Perception of contact centre.

Financial metrics are also referred to. Cost to serve of each item is relatively straightforward and can be aggregated to give a total cost of ownership as discussed in the chapter. But to change the help desk from a cost centre to a profit centre requires placing a value on each problem solved, which is not suggested by the article.

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The success levels in preventing problems from occurring are also referred to; this can be done through benchmarking against other organisations to compare level of issues faced and also measuring the number of problems successfully solved.

2. In order referenced in case: •

Automated knowledge management software

•

Self-help software (diagnosis and recommendation engines)

Case study 16.2: Time to call the help desk?

1.

Why is it essential that calls to the help desk be dealt with as quickly and efficiently as possible?

2.

Why is it important to make sure that help desk staff are able to deal with the widest possible range of problems?

3.

What are the benefits of establishing a comprehensive knowledge base?

1. While users are waiting for assistance from the help desk, they are not being productive. In addition, the longer users wait for help, the more frustrated and dissatisfied they will become.

2. The case study states that between 54 and 75 per cent of requests for assistance should be dealt with at the first point of contact (the first-call resolution rate). It is important to deal with requests for assistance at the first point of contact so that fewer problems are passed on to more skilled members of staff. When a problem is passed on to the next level of support, it automatically becomes more expensive to resolve because it will be handled by more senior (and more highly paid) staff. In addition, there is likely to be a delay between the problem first being raised with the help desk and then being passed upwards. During this delay, staffs are unproductive and may become dissatisfied with the service they are receiving.

3. The case study suggests a number of potential benefits, some of which include: •

Staff can handle some incidents more quickly and efficiently by searching the knowledge base for information on similar incidents dealt with in the past.

•

New staff can be trained more quickly because knowledge can be transferred more easily.

•

Establishing a knowledge base can help deal with the problem of staff leaving the company and taking their knowledge with them.

•

The knowledge base can be used as the basis for a self-help portal (website), allowing users to solve some problems themselves. This reduces pressure on the help desk and can result in simple problems being dealt with more quickly.

•

The knowledge base can include details of second and third-level staff and their skills. This makes it quick and easy to route jobs to the right person.

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Exercises Self-assessment exercises 1.

What are the principal end-user services that must be provided by the information systems manager?

•

Access to shared company data across the network

•

Access to standardised company software through the desktop PC

•

Access security limitations and backup of data

•

Help desk and support with solving hardware and software problems

•

Support and training for end-user developed systems and standard systems.

2.

What is the significance of the total cost of ownership?

Total cost of ownership (TCO) is significant since it is up to three times the purchase price of a PC. By reducing TCO, a company can reduce its expenditure on IT significantly. Costs contributing to TCO include support costs and cost of upgrading software and hardware.

3.

What is the role of the network computer and other thin clients in reducing the total cost of ownership?

The network computer (NC) is designed to be simpler than a desktop PC with fewer options for the user to modify the configuration of the machine. For example, the NC will not have a hard disk on which programs and setup information is stored. This should reduce the chance of an end-user needing support to fix a problem.

4.

What is the difference between end-user computing and end-user development?

End-user computing is any use of computers by non-IS professionals, while end-user development refers specifically to writing of software by non-IS professionals, that is, it is a subset of end-user computing.

5.

What are the different types of end-user development?

•

Reports from a corporate database using standard enquiries defined by the IS/IT function

•

Simple ad hoc queries to databases defined by the user

•

What-if analysis using tools such as spreadsheets and models

•

Writing company information for a company intranet

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•

Development of applications such as a job-costing tool or production scheduling system using easy-to-use high-level tools such as application generators, PC database management systems such as Microsoft Access or Borland or visual programming environments such as Microsoft Visual Basic, Borland Delphi, Powerbuilder or Centura.

6.

What are the main reasons for the growth in end-user development?

•

The applications backlog, which meant that users had to wait a long time for their systems to be implemented.

•

Small-scale applications might never be implemented by the IS department.

•

The availability of easy-to-use tools such as Visual Basic.

•

The increased IT literacy of business users.

7.

Which activities in the software development life cycle are often omitted by end-users?

•

Feasibility study – Assessment of whether or not existing software is available may often be omitted.

•

Analysis – Users may have their own opinions of the features that the software should fulfil so they do not consult with other potential users.

•

Design – Users often progress straight on to programming since they do not have the design skills or are more interested in programming a solution.

•

Testing and documentation.

8.

What facilities can be provided to support end-user development?

•

Training facilities

•

Help desk support in using software tools or help in less clear areas of IS development such as analysis and design

•

Access to the company’s standard tools used in the IS department.

Discussion questions 1.

It has been argued that end-user computing has been driven by a failure of central information systems departments to develop applications quickly enough (the applications backlog). Is this statement true or is there an alternative explanation?

It is difficult to support this argument through industry statistics, but it seems inevitable that one driver or end-user computing (EUC) is the applications backlog.

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The role of the IS department must be balanced against the other factors that have contributed to the growth of end-user computing, that is: •

the availability of improved tools (software available on PCs);

•

the desire of some end-users to develop software.

It is also not only a matter of the IS departments developing applications too slowly.

They may not develop some applications since they are specialised departmental applications and it is more appropriate for them to concentrate on systems the whole organisation can use.

On balance, there are several alternative explanations and the failure of central IS departments is only one of these.

2.

Examine the reasons for the growth of end-user computing in companies of all sizes. You should consider the balance between practical necessity and strategic planning.

The reasons have been considered in the previous question and can be briefly reiterated.

The discussion concerns whether or not EUC had developed as a reaction to these factors or as part of a strategic plan. It is apparent from the nature of the reasons that initially EUC must have happened as a result of practical necessity. With time, however, its significance has grown in companies to the extent that it is necessary to control EUC as part of strategic planning. The need for a strategy can be highlighted by these elements of end-user computing strategy: •

Training

•

Suitability review

•

Standards for development

•

Guidance from end-user support personnel

•

Software and data audits

•

Ensuring corporate data security.

3.

What do you see as the future for end-user computing? Will the growth continue, or will there be a backlash against the problems experienced by some companies using this approach?

The growth of EUC will only continue if the benefits demonstrated continue. This suggests an immediate barrier to growth since the benefits have not been clearly demonstrated. The main benefit is the possibility of developing small-scale departmental applications, which are not possible given the applications backlog. Other fringe benefits are that it may improve staff training and motivation for some staff.

Other barriers to growth are the cost of supporting EUC that is evidenced by the total cost of ownership debate and the problem of supporting end-user applications when the staff member leaves. Given these barriers to growth, it is unlikely that the growth will continue, particularly since EUC may already be at saturation point.

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Essay questions 1.

End-user applications development poses a new set of management problems in companies that adopt this approach. Identify the nature of these problems and suggest measures to overcome them.

Management problems are mainly a consequence of end-users missing out part of the life cycle, viz.: •

Feasibility study – assessment of whether or not existing software is available may often be omitted

•

Analysis – users may have their own opinions of the features that the software should fulfil so they do not consult with other potential users

•

Design – users often progress straight on to programming since they do not have the design skills or are more interested in programming a solution

•

Testing and documentation.

Solutions include these aspects of EUC strategy: •

Training

•

Suitability review

•

Standards for development

•

Guidance from end-user support personnel

•

Software and data audits

•

Ensuring corporate data security.

2.

Intranets are now widely used by many companies. Examine the suitability of end-users for the control, development and maintenance of intranets.

This question will also need background information on intranets from Chapter 17. The essay should start with a brief explanation of intranets and figures showing the levels of usage in the UK and US. The answers should also note that the suitability would of course depend on the size of a company and the skills available. A suitable way of tackling the question will be to consider each of the aspects of the intranet mentioned: •

Control. The different aspects of control need to be specified. Strategy should be controlled by end-users but only in conjunction with an IS department advising on the technical feasibility of the approach. However, the users should have control on content but not how it is structured – as advice from the IS department on how to structure the intranet website is probably appropriate.

•

Development. Development of the content should be by end-users.

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•

Maintenance. Maintenance of the content is again suitable for end-users, but backing up of data and monitoring of information quality should be undertaken by the IS department.

3.

End-user computing can only be successful if users have knowledge of the software life cycle and the activities required to produce good-quality information systems. Which activities do you consider essential to achieving this, and which are likely to be omitted?

This answer can be based on an expansion of the table reproduced below, indicating the activities that are essential and the consequences of omitting them. In particular, the answer should focus on how the lifecycle activities affect the different aspects of IS quality that include: •

delivering on time and within budget;

•

does the system meet the needs of business;

•

does the system have an acceptable number of errors;

•

what are the prospects for long-term maintenance and availability of the end-user developed application.

Stage of SDLC

Typical problem

Initiation

Absent or limited feasibility study. If omitted, the user may be developing a system that is not required or solving a problem that has been solved before.

Insufficient review of cost-benefit and acquisition alternatives.

Other end-user software with the same function may be available elsewhere in the organisation. Off-the-shelf software may be available from elsewhere.

Analysis

Limited analysis. Since the end-users may know their own requirements, they may not consult others in the company, who may have a different perspective. This may alienate potential users and mean that the software is unsuitable for its application.

Design

Omitted completely! This stage is often omitted and programming will occur straight away. This may occur since users may not have the design skills or understand the importance of design.

This will adversely affect the usability, speed and security of the software.

Build

Programming will occur in the normal way, but the problem is that ancillary activities may be omitted. Documenting the work and testing are areas that should not be omitted but are omitted.

Implementation

Implementation becomes more difficult for large systems. For a stand-alone piece of end-user-developed software, there should not be too many problems.

Maintenance

Problems at this stage are minor compared to those that have passed before. Users may not keep an adequate list of problems that need to be fixed. There is a tendency to release updates to the software without good version control.

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4.

Imagine that you are the IS manager of a medium-to-large company with 500 staff. Explain the strategy you would develop to encourage end-user computing, while seeking to control any problems that may arise.

For a company of this size it would be necessary to have a strategy supporting end-user computing in order to avoid a waste of resources (minimise cost) and problems in supporting applications that were not developed professionally. The strategy should have a mission of supporting end-user computing. The strategy could have the following elements: Business relevance – To ensure this, applications of any size should be reviewed to check their value and feasibility. There may already be suitable applications in existence either internally or off-the-shelf.

Quality – To ensure the system is fit for its purpose, users should be trained to follow the necessary parts of the life cycle, such as analysis from business users, design, testing and documentation.

Dissemination – An audit of end-user-developed applications should be taken and then all programs documented so that they could be used and maintained by others.

Examination questions 1.

What are the main benefits provided by end-user computing?

•

Greater control over applications used by departmental staff

•

Shorter waiting times for software

•

Increased staff motivation and cross-skilling.

2.

Why are end-user-developed applications unsuitable for cross-enterprise applications?

End-users do not usually have the knowledge necessary to analyse and design systems that have the necessary performance, multi-user access and low number of bugs required by such a system.

3.

What factors contribute to the total cost of ownership? Why is it significantly higher than the purchase cost?

•

The cost of data backup.

•

The cost of consumables, such as paper and toner.

•

The cost of help desk support.

•

The cost of software and hardware upgrades.

•

The staff time lost in fixing or waiting for problems.

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The last three items are responsible for the high cost of TCO. 4.

How does the network computer differ from the personal computer? Why might this appeal to: (a) the IS manager; (b) the finance manager; (c) the end-user.

An NC is simpler and has a lower specification than a PC since it typically has no hard disk, no floppy disk, less memory and a less expensive processor. (a) The NC is easier to manage, control and upgrade – software upgrades can be done centrally. There are fewer alternatives for the user to alter the configuration of the software. (b) It will be cheaper to purchase and will have a lower TCO. (c) The limitations may not appeal to the end-user, but they will probably have less need for recourse to the support department. Ease of use may be improved.

5.

Name and explain three services that can be provided by an information centre.

•

Solving hardware and software problems that prevent users’ systems from working

•

Management of user data including controlling access to it and backing it up

•

Providing advice on how to develop applications.

6.

What is the applications backlog and how is end-user development significant in relation to this?

The applications backlog is the delay that builds up so that business users have to wait for IS developed by the IS department or outsourcing company. End-user development is related to this since it can reduce the backlog, by users developing applications themselves.

7.

Give three reasons why it is important for end-user computing to be part of a company’s overall IS strategy. Briefly justify each.

•

If EUD occurs on an ad hoc basis, then poor-quality applications may result that are undocumented and difficult to maintain.

•

Reviews of applications can occur to ensure that time is not being wasted on EUD when other applications already exist.

•

Appropriate support mechanisms such as a help desk can be set up to control and make EUD more effective.

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CHAPTER 17

Ethical, legal and moral constraints on information systems Activities Activity 17.1 Professional associations Using the Internet as a resource, locate some of the other professional associations that help regulate the activities of those employed in the IT industry. You should attempt to locate both national and international associations. In addition, you should try to compare what you locate in terms of entrance requirements, codes of conduct and the benefits offered to members.

No solution is provided since this is a research activity.

Activity 17.2 Personal privacy As mentioned in this section, it is estimated that a typical adult may be listed in as many as 200 computer files. (a) How many organisations hold data on you? List as many organisations as possible and describe the data held. (b) Imagine that you have access to all of this data and wish to build a profile of the characteristics of a person. Describe what such a profile would contain and what other assumptions could be made. (c) If a government department or commercial organisation were given access to all of this information, what uses could they put it to?

(a) In the United Kingdom, some or all of the following will hold data concerning a typical adult: •

DSS

•

Inland Revenue

•

Schools, colleges and universities

•

FHSA, hospitals and GPs (medical records)

•

County and national offices for births, marriages and deaths

•

Credit reference agencies

•

Banks and building societies

•

Employers

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•

Police, courts and solicitors

•

DVLC (driving licence information)

•

Insurance companies

•

City or county councils

•

Mail order and home shopping (catalogue) companies

•

Public utilities, for example, gas, electricity and telephone

•

Information given during market research interviews or from market research questionnaires (such as those often included with product guarantees)

•

Government census information

(b) Some of the assumptions that might be made concerning an individual could include those in the table below: Information

Assumption/conclusion

•

Payment history of utility bills

•

Credit reference history

Financial status, including debts, earnings, etc.

•

Bank and building society account information

•

Police records and prosecution details

•

DVLC

•

Insurance records (details of claims)

•

Medical records

•

Insurance records

•

Employment records (sick leave, etc.)

•

Bank transactions (especially Switch and credit card transactions)

•

Mail order and catalogue purchases

•

Insurance companies

Details of any valuable possessions, perhaps giving insight into hobbies, collections, etc.

•

Births, marriages and deaths

•

DSS

•

Inland Revenue

•

City or county councils

Details of all relatives including their age, gender, address, maiden name (if any) and so on. Entire ‘profiling’ process could then be repeated for each person.

Whether the individual is considered honest, violent, etc.

All health-related matters, for example, whether the individual smokes or consumes alcohol, even HIV status – create different assumptions depending on what is recorded.

Consumer habits, which products the individual likes to buy and could even trace the person’s movements around the country.

(c) Some potential uses for this information could be as follows: •

Targeting advertising or creating products to address specific sections of a market.

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•

Crime prevention and detection. For example, in the event of a burglary, possible suspects could be identified and monitored, for example, police might search for a person meeting several conditions: previous convictions for burglary, lives local to burglary site, has made large deposits at the bank recently.

•

Assessing possible responses to political acts, such as passing new laws. Market research information, social background (from census data) and details of income could all be used to predict likely voting behaviour or the likely reaction to an act, such as the passing of new legislation.

Activity 17.3 Copyright You are employed as a clerk in a large sales organisation. In your spare time, for example, during lunch breaks, you develop a computer program that could be of significant value to your employer. Your employer claims ownership of the program on two grounds: that the program is related to your normal activities as an employee and that you used their equipment when creating the program. You dispute this on the grounds that the work was carried out during your own time and that the majority of the work was completed at home, using your own personal computer.

1.

What legal, moral and ethical issues are involved in this case?

2.

Who owns the program?

1. There are wide number of issues involved here. Some of these issues include the following: •

An employee has a duty to help the company in achieving its aims. If the use of the software might bring benefits to the company, then it might be argued that the employee has a duty to make it available to the employer.

•

Since some of the work was carried out using the employer’s equipment (the case study says only that the majority of the work was carried out at home), the employer could claim theft of services. This means that the company was denied the use of its equipment during the times that the employee worked on the program. In addition, the employer could claim theft on the basis that the employee made use of the company’s electricity supply, caused wear and tear on equipment and so on. The employer might even use the Computer Misuse Act since one of the offences listed is given as ‘Preventing or hindering access to any program or data’.

•

The employee’s contract may contain one or more clauses that give the company ownership of any program, method or technology developed by the employee. In general, if the tasks performed by the program can be considered a part of the employee’s normal work, then the company would be able to claim ownership. This is perhaps one of the most controversial areas related to the employment of IS professionals. Many feel that employment contracts of this nature are simply unjust. After all, having carried out original work using one’s own resources, one would expect to have ownership of that work.

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2. Although the majority of the work was completed at home, some of it was carried out using the employer’s equipment and – possibly – during working hours.

Depending on the terms of the employee’s contract, the program is likely to belong exclusively to the employer or be owned on a joint basis.

Activity 17.5 The ASP software model A new approach to the distribution of software may help to reduce levels of software piracy whilst ensuring that legitimate users gain benefits such as improved support and access to the very latest applications. Using the Internet as a resource, locate information related to application service providers (ASP) and answer the following questions.

1.

How does this model of software distribution work?

2.

What are the benefits of ASP to business organisations?

3.

What are the benefits of ASP to software companies?

1. There are several common approaches to ASP software distribution. Some typical methods include the following: •

The organisation is supplied with a single copy of the software and installs it on the company network. Various mechanisms are used to ensure that only a fixed number of copies of the package can run at any given time. Typically, software installed on the server monitors and controls access to the software.

•

Users connected to the Internet or an intranet launch a ‘shell’ program that provides access to the required application; the application itself is downloaded to the user’s machine temporarily and removed once the user has finished working with it. Again, various mechanisms are used to ensure that only those entitled to access the software are able to do so.

•

The software is supplied to users under a contract that specifies the maximum number of times the application can run or sets a specific date on which the software will ‘time out’ (cease working). Each time a user launches the application, it connects to the Internet to verify the user’s licence information.

This is different from the previous method since the software itself is not downloaded to the user’s machine.

2. There are numerous business benefits in relation to the adoption of ASP. Some examples include: •

Reduced costs – the software is rented, rather than purchased.

•

The company is not locked-in to a particular product – they can change the software used quickly and with relatively little expense. In many cases, a company will not be locked-in to a particular supplier.

•

The company will always have access to the latest version of the software – this is particularly useful with regard to applications that require constant security patches, such as e-mail packages and operating systems.

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•

Support costs are reduced – companies can even adopt ‘pay as you go’ support, meaning that they pay only for the support actually requested.

3. There are several benefits to software companies. Some examples are included: •

Software distribution becomes simpler and less expensive. This can lead to dramatic cost savings since it no longer becomes necessary to produce countless CD-ROMs, manuals and other materials.

•

Revenues are guaranteed. The ASP model ensures that companies receive regular income from clients. This can take the form of annual, monthly or even ‘pay as you go’ fees.

•

It becomes easier to distribute important software updates. In many cases, updates will be deployed automatically and will reach clients more quickly than by other methods. As an example, an updated product can be placed on the company’s servers and, each time a client’s computer system connects to the server (to download the software, verify licence details, etc.), the update can be downloaded automatically. In this way, the company does not need to send updates out through the post, nor does it need to ‘chase’ clients.

Case studies Case study 17.1: Gap between gig economy’s winners and losers fuels populists Discuss the relationship between the digital economy and employment

Technology can empower but it can also enslave. Consider the daily work life of a typical taxi driver in New York, who might work for three or more companies at once Uber, Lyft and perhaps even an unlicensed cab firm.

Such people are essentially entrepreneurs working for themselves, with all the freedom that entails. But they also bear the burden of innovations like ‘surge pricing’, in which computerised algorithms drive fares up or down in order to get more people into cars and make more money. They have to deal with any number of other complexities, such as working for multiple employers at any given time yet possibly receiving benefits like healthcare or pension from none of them.

Compare this with the life of a freelance management consultant. He or she may charge $10,000 a day per client, using cloud computing, smartphones, social networking platforms and video conferencing to work anywhere, anytime, which makes it easy to, say, earn a high six- or even seven-figure salary in dollars while also spending several months a year jetting between resorts or vacation homes. The price of a virtual assistant based in India is negligible. High-end freelance work spaces that are now available via membership schemes in a variety of cities means that the cost of office space is wildly reduced.

Clearly, the advent of the high-tech gig economy means very different things to these two kinds of workers. For the driver, it may feel like a kind of neo-serfdom. But for highly educated, mobile professionals such as the consultant, it is a way to earn more money in less time, in ever more flexible ways.

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Case study 17.2: The digital divide over consumer data widens Discuss the relationship between the digital divide and personal privacy

Even putting aside principled arguments, there are clear dangers inherent in lax privacy and data protection laws in some emerging markets. One is the risk that reams of personal data are compromised through leaks. The collection of more information increases both the likelihood and cost of a hack. Meanwhile for western technology companies, the different regulatory regimes create an uneven playing field. Confidence in strong security often encourages the amassing of troughs of personal data. This confidence can be misplaced. The more information there is in any database, the more tempting a target it becomes. Collecting the minimum necessary information serves both privacy and safety concerns. If some companies can hone predictive algorithms on richer data supplied by lax privacy laws, they will gain an advantage over those hamstrung by better regulatory oversight. Data is the most valuable currency of the digital economy. The gulf opening up in the way emerging and advanced economies regulate it threatens to erode the competitiveness of companies in the latter. At the same time, in too many emerging economies, states have been slow to entertain the privacy concerns of citizens. To bridge this chasm and head off trouble, it is time to consider a multilateral approach with minimum global standards.

Exercises Self-assessment exercises 1.

Describe the offences covered by the Computer Misuse Act 1990.

The Computer Misuse Act lists five specific offences: 1. Unauthorised access to computer material.

2. Unauthorised access with the intention of carrying out or assisting others with the commission of further offences.

3. Unauthorised modification of computer material.

4. Impairing the operation of a program or the reliability of data.

5. Preventing or hindering access to any program or data.

2.

What is meant by computer monitoring?

Computer monitoring means the use of information technology to monitor the activities of individuals. As an example, a security firm may use a combination of computers, video cameras, sensors and other devices to maintain the security of a large building.

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3.

What are eight guiding principles of the Data Protection Act?

From the text, the eight principles of the Act are: 1. The information to be contained in personal data shall be obtained, and personal data shall be processed, fairly and lawfully.

2. Personal data shall be held only for one or more specified and lawful purposes.

3. Personal data held for any purpose or purposes shall not be used or disclosed in any manner incompatible with that purpose or those purposes.

4. Personal data held for any purpose or purposes shall be adequate, relevant and not excessive in relation to that purpose or those purposes.

5. Personal data shall be accurate and, where necessary, kept up to date.

6. Personal data held for any purpose or purposes shall not be kept for longer than is necessary for that purpose or those purposes.

7. An individual shall be entitled: (a) at reasonable intervals and without undue delay or expense (i) to be informed by any data user whether he holds personal data of which that individual is the subject; (ii) to have access to any such data held by a data user; (b) where appropriate, to have such data corrected or erased.

8. Appropriate security measures shall be taken against unauthorised access to, or alteration, disclosure or destruction of, personal data and against accidental loss or destruction of personal data.

4.

What are the most common types of computer crime?

The most common forms of computer crime are listed below: •

Theft

•

Theft of services

•

Software theft

•

Data theft

•

The destruction of data and software

•

Hacking.

5.

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(c) gaining unauthorised access to a computer-based information system; (d) vandalising computer hardware; (e) creating a computer virus; (f) placing an unauthorised computer program on a network system; (g) stealing a backup copy of a data file; (h) photocopying a software manual.

See the table below.

Action

Legislation

Distributing a computer virus

Computer Misuse Act

Making an unauthorised copy of a computer program

Copyright, Designs and Patents Act

Gaining unauthorised access to a computer-based information system

Computer Misuse Act

Vandalising computer hardware

Computer Misuse Act

Creating a computer virus

Not covered by legislation – it is only illegal to distribute a computer virus

Placing an unauthorised computer program on a network system

Computer Misuse Act

Stealing a backup copy of a data file

This could be subject to criminal law (an act of theft) or the Computer Misuse Act (preventing or hindering access to data)

Photocopying a software manual

Copyright, Designs and Patents Act

6.

For each of the following acts, state whether or not they are permissible under the Computer Misuse Act 1990 or Data Protection Act 1998: (a) storing inaccurate or misleading personal data; (b) damaging data held on offline storage media; (c) electronic eavesdropping; (d) preventing access to personal data held in manual files, such as microfilm; (e) software piracy; (f) accidental damage to hardware, software or data; (g) disclosing personal data without the permission of the individual; (h) preventing access to personal data.

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See the table below.

Action

Permissible?

Storing inaccurate or misleading personal data

Data Protection Act: Permissible but users have the right to make corrections

Damaging data held on offline storage media

Computer Misuse Act: Not directly covered by the Act, more likely to be covered by the Criminal Damage Act

Electronic eavesdropping

Computer Misuse Act: Not covered

Preventing access to personal data held in manual files, such as microfilm

Data Protection Act: Permissible as the Act deals only with computer data

Software piracy

Not directly covered by either Acts, more likely to be covered by Copyright, Designs and Patents Act

Accidental damage to hardware, software or data

Computer Misuse Act: Although this could be considered an offence, the law allows a power of discretion

Disclosing personal data without the permission of the individual

Data Protection Act: Permissible providing the conditions of the Act are met

Preventing access to personal data

Data Protection Act: Permissible under clauses allowing ‘exclusion’ or if the data refers to another individual

7.

What is reverse engineering?

Reverse engineering attempts to recreate the design of an item by analysing the final product. This can be compared to the ‘black box’ approach to systems analysis, where the outputs from the system are analysed in order to determine the inputs and processes involved.

8.

What is a professional code of conduct?

A professional association is entitled to set entrance requirements that govern minimum levels of experience and qualifications for new members. However, in return for membership of a professional association, the individual accepts a duty to meet certain standards of conduct and behaviour. The standards of conduct and behaviour expected by the association are described within a code of conduct that also sets out a number of the association’s principles.

Discussion questions 1.

You are given the responsibility of managing a technical project that may result in hundreds of job losses. Decide whether or not you should continue with the project and justify your decision on professional, moral and ethical grounds.

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The main aim of this task is to help students consider where the responsibilities of an IS professional lie. The majority of the discussion is likely to focus on two areas: •

The employee’s loyalty should lie with the employer. If, in the professional opinion of the employee, the most efficient way of completing the project will result in job losses, then so be it. Concerns over harming the livelihoods of other employees should have no effect on this employee’s professional behaviour and judgement. If this argument is accepted, the project should be continued.

•

The employee’s loyalty should lie with society. Many professional associations claim that members should seek to help society through the practice of their profession. In causing unemployment on such a large scale, the employee is acting against professional principles and is acting to harm the society in which she/he lives. If this argument is accepted, the project should be discontinued.

2.

Do the security services and government departments have the right to monitor personal communications, such as e-mail messages? Justify your answer.

There are two arguments that students might consider: •

In order to protect the public from harm, security services may often need to monitor communications such as calls made from mobile phones. Monitoring email communications is merely an extension to the powers the security services already have and simply takes into account new technology. If we accept that security services can, when justified, listen to telephone calls, then why should we make exceptions for e-mail and other new methods of communication?

•

The majority of the population has no involvement with criminal activity. Why, then, should the personal privacy of completely innocent individuals be violated in any way? The right to free speech also includes the right to communicate privately with friends, family members and business colleagues.

3.

‘The cost of software applications leaves some users no choice but to make illegal copies’. Make a case in favour or against this argument.

Some of the arguments that students might consider include the following: •

It is not true that individuals have no choice but to make illegal copies of software: there is always the choice to obey the law or carry out a criminal act.

•

Since software companies make many millions of pounds each year, the loss of a few sales will not harm them in any noticeable way.

•

If the individual would never have purchased the item of software in the first place, then the software company is not losing anything when the program is copied.

•

By depriving software companies of revenue, the development of new products is endangered. In this way, the acts of a few selfish individuals bring harm to all computer users.

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•

Copying software is an act of theft. This act endangers the livelihoods of the employees of software companies.

4.

Are file sharing services harming the music and entertainment industries?

Consider services that allow people to download music legally, as well as services associated with music, video and software piracy.

Some ideas to consider include: •

There is some evidence to show that online music services (both legal and illegal) act to increase sales of CDs and DVDs. A small number of surveys have found that online services do nothing to reduce sales and actually increase sales of certain products. This is because when people download several tracks from a particular artist, they are encouraged to buy the album. In addition, having watched a movie downloaded from the Internet, people buy DVDs in order to access the extra features, read the inserts and so on.

•

If people can download entire albums and movies, they will buy fewer CDs and DVDs. This reduces profits in the entertainment industry, jeopardising future productions.

•

Some artists have started legal action against online services and even individuals in order to prevent their music from being distributed illegally. Artists such as Metallica claim to have lost millions of dollars in sales because of services like Napster (the original service). If artists are unable to enjoy the rewards their work brings, there is no incentive to create music, make movies, etc.

•

Online services act to increase choice for consumers, benefiting the entertainment industry as a whole. Unsigned bands, for instance, are able to reach large audiences by distributing their music via P2P services. Even film-makers can take advantage of such services in order to create audiences for independent or low-budget productions. As an example, The Blair Witch Project was deliberately distributed via the Internet by its makers in order to generate public interest. Ultimately, this allowed a film that cost $30,000 to generate more than $300 million in revenues.

5.

Is there a digital divide?

It should take very little research to determine that, at present, some sections of society do not have access to technology. On a global scale, some of the poorest countries in the world have very limited access to the Internet. As an example, the text mentions that Somalia has only 200 Internet users from a total population of more than seven million. On a national level in the United Kingdom, it has been reported that only 60% of the population has access to the Internet from home. What of the other 40%; do they have Internet access at all?

However, as time passes, we see that access to technology seems to be improving somewhat. On a global scale, countries are beginning to invest in technology and training. Even the poorest nations have begun to receive help from their more affluent neighbours. On a local scale, various developments and government initiatives have begun to make an impact. As an example, the public can now gain access to the Internet through cybercafes, public libraries, local schools, evening classes and so on.

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In summary, there is sufficient evidence to argue that a digital divide exists on both a global and a local/national level. However, there is also evidence to suggest that steps are being taken to reduce this divide and that the action being taken seems to be having an effect, however limited.

Essay questions 1.

Discuss changes in employment patterns brought about by increased levels of automation and the introduction of computer-based information systems.

Some of the areas that students should consider when planning their essays include the following: •

De-skilling v. skilling. Some argue that increased automation and the use of information technology lead to the de-skilling of the workforce. Others argue that the adoption of new technology causes employers to provide staff with new skills and knowledge.

•

Shifts in employment patterns. The UK provides a particularly good example of the changes brought about by technology. Since the 1950s, for example, there has been a shift from manufacturing industries towards service industries. As a result, many of those in the workforce now require a range of new IT skills in addition to any professional or vocational training received. Additional information may be found in social science texts. Government statistics may also be of value since these are available in all large public libraries and university libraries.

•

Changes in levels of employment. In some industries, such as car manufacturing, employment levels have been reduced significantly as a direct result of automation.

In other areas, such as Internet and communications technology, employment levels have risen sharply over the past decade.

•

Changes in education. As new technology has become an essential part of the business environment, the structure of the education system has also undergone significant change. The skills required by today’s school leavers are very different from those needed two decades ago.

2.

What are some of the moral, ethical and professional issues faced by the managers of information systems? Illustrate your answer with relevant examples.

Students should research several recent and relevant examples of where the work expected of managers has conflicted with their professional codes of conduct. Suitable examples might include projects that have resulted in mass redundancies; projects that have failed when clients have made unreasonable demands or altered agreed objectives or projects where insufficient attention has been given to public safety.

3.

Using relevant examples, critically review the major pieces of legislation relevant to the ways in which organisations use computer-based information systems. Your discussion should refer to areas such as copyright, unauthorised access, the use of personal data and any other relevant issues.

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Students should base their response on the three major pieces of legislation reviewed in this section (e.g. Computer Misuse Act, Data Protection Act and Copyright, Designs and Patents Act).

Students should also take care to locate appropriate examples that can be used to support their arguments. The fact that creating a computer virus is not considered illegal represents a major flaw in existing legislation.

Examination questions 1.

The Data Protection Act 1988 regulates the ways in which organisations may gather, store, process and disclose personal information. You are required to: (a) describe the principles on which the Act is based; (b) discuss some of the responsibilities placed on organisations by the Act; (c) critically evaluate the strengths and weaknesses of the Act in terms of the right given to individuals to view and amend any personal data held on them.

(a) The eight principles of the Data Protection Act are listed in the answer to selfassessment section question 3. (b) The material given in the text provides an overview of the responsibilities faced by companies registered as data bureau. (c) A good response will pay particular attention to ‘exclusions’ under the Act and will also consider the rights of individuals in terms of gaining access to the data held on them.

2.

The ability of computer-based information systems to store, process and retrieve data quickly and efficiently raises concerns related to the privacy of individuals. You are required to: (a) explain the meaning of ‘personal privacy’; (b) describe some of the ways in which technology can allow an individual’s personal privacy to be invaded; (c) using relevant examples, discuss the moral and ethical issues involved in gathering, storing and making use of personal data.

(a) This is an extremely complicated concept for which a simple definition is neither adequate nor appropriate. A good response should take into account the following: Individuals have a basic right to privacy. In particular, they should be able to go about their daily business without their activities being routinely recorded and monitored; they should be able to communicate with others without fear that their communications will be intercepted or monitored without good cause; they should not be constantly observed as they carry out their work.

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(b) Students should provide several relevant examples and describe how such methods can interfere with an individual’s normal activities. Some examples include the following: •

Computer monitoring in the workplace

•

Unsolicited e-mail arising from the monitoring of Internet traffic (such as newsgroup postings)

•

The sharing or sale of personal data. As an example, it would be inappropriate for an insurance company to learn about a person’s religious and political beliefs by buying data from a market research company.

(c) Students should select several examples that illustrate some of the moral and ethical issues involved in making use of personal information. Each example should then be discussed in detail. Some examples might include the following:

3.

•

It has been alleged that some companies monitor the obituaries published in national and regional newspapers so that they can contact the relatives of a deceased person in order to offer them funeral services, such as providing headstones.

•

Insurance companies routinely request medical information from a person’s GP before issuing a life policy. It has been alleged that a person who has been tested for HIV will automatically be rejected as a client even if the test was negative.

•

It has been alleged that market research information is sometimes used to create a list containing the voting preferences of the people living in a given area.

Those in sympathy with the politics of the list owner are approached for donations. Those not likely to vote for the party involved are visited by campaigners in the hope of changing their opinions.

Members of associations such as the British Computer Society are required to abide by a professional code of conduct. (a) describe the areas that a professional code of conduct is likely to include; (b) using relevant examples, discuss some of the ways in which a manager’s ethical and professional responsibilities can conflict; (c) adopt a position in favour or against this argument: ‘An individual’s professional and legal obligations always take precedence over moral and ethical concerns’ and justify your response.

(a) The text describes the contents of a typical professional code of conduct and provides the example of the British Computer Society’s detailed code. (b) The text describes a manager’s ethical and professional responsibilities, providing several examples of where such responsibilities can conflict. (c) Students should provide a structured argument in support of their position and should provide relevant examples where appropriate.

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