HSVJ 1 Z 5 Q3 K1438351440

NATIONAL OPEN UNIVERSITY OF NIGERIA
SCHOOL OF EDUCATION
COURSE CODE: LIB 810
COURSE TITLE: MANAGEMENT INFORMATION SYSTEM
LIBS 810 MANAGEMENT INFORMATION SYSTEM
COURSE TEAM----DEVELOPER-PROF ZAKARI MOHAMMED A B U Zaria

WRITER- DR NURUDEEN M MAIFATA A B U Zaria
EDITOR PROF ZAKARI MOHAMMED A B U Zaria
MODULE 1
UNIT 1: OVERVIEW OF MANAGEMENT INFORMATION SYSTEMS
UNIT 2: MEANING OF MANAGEMENT INFORMATION SYSTEM (MIS)
UNIT 3: INFORMATION TECHNOLOGY
UNIT 4: SYSTEMS CONCEPT
UNIT 5: INFORMATION SYSTEMS, ORGANIZATIONS AND STRATEGY
MODULE 2
UNIT 1: COMPONENTS OF MANAGEMENT INFORMATION SYSTEM
UNIT 2: TYPES OF MANAGEMENT INFORMATION SYSTEM
UNIT 3: INFORMATION TECHNOLOGY AND INFORMATION PROCESSING
UNIT 4: MANAGING DATA RESOURCES
MODULE 3
UNIT 1: KNOWLEDGE MANAGEMENT
UNIT 2: ARTIFICIAL INTELLIGENCE
UNIT 3: INFORMATION SYSTEMS IN GLOBAL BUSINESS TODAY
UNIT 4: ELECTRONIC COMMERCE
2
MODULE 4
UNIT 1: THE STRATEGIC ROLE OF INFORMATION SYSTEM AND INF.S.ORG
UNIT 2: DEVELOPING BUSINESS SYSTEMS
UNIT 3: IMPLEMENTING BUSINESS SYSTEMS
MODULE 5
UNIT 1: ETHICAL ISSUES AND FUTURE OF INFORMATION SYSTEMS
UNIT 2: TELECOMMUNICATIONS AND THE NEW INFORMATION ARCHITECTURE
UNIT 3: INFORMATION SYSTEMS SECURITY
MODULE 1
UNIT 1: OVERVIEW OF MANAGEMENT INFORMATION SYSTEMS
CONTENTS
1.0 Introduction
2.0
Objectives
3.0
Main Content
3.1
Management
3.1.1 Process
3.2
Managerial Functions
3.2.1 Planning
3.2.2 Organising
3.2.4 Controlling
3.3
Levels of Management
3.3.1 Top or Strategic Level of Management
3.3.2 Middle or Tactical Level of Management
3.3.3 Lower or Operational Level of Management
3.4
System
3.4.1 Open Systems
3.4.2 Close Systems
3.5
Data
3.5.1 Data Processing
3.5.2 Characteristic of Data
3.6
Information
3.6.1 Characteristics of Good Information
3.6.3 Functions of Information
4.0
Conclusion
5.0
Summary
6.0
Tutor Marked Assignment
7.0
References/Further Readings
1.0
INTRODUCTION
Management Information Systems are foundation for conducting business today. In many
organizations, survival and even existence is difficult without extensive use of information
technology. We must bear in mind that in the application of management information system in
organization, we are dealing with the concept of management and technology, and how we can
harmoniously use the duo to achieve effective medium for analyzing organizational information.
2.0
OBJECTIVES
At the end of this unit, you should be able to:
Define management, information and systems
List managerial levels and functions
Distinguish between data and information

4
Describe how data are processed to give information.

Identify the characteristics of good information and functions of information.
3.0
MAIN CONTENT
3.1
Management
The complexity of management is such that the word carries a number of acceptable meanings.
The term management may therefore, be applied in different ways, its meaning discernible from
content. McFarland (1974) defines management as that process by which managers create,
direct, maintain and operate purposive organizations through systematic coordinated cooperative
human effort. In their own way Brech et al (1972) say management is concerned with seeing
that jobs get done and done efficiently. While according Fayols in (Cole: 1986) he defined
management as: to forecast, plan, organize, command, coordinate and control.
In Fayols view to forecast plan mean to examine the future and drawing a plan of action. To
organize means building a structure of both material and human in an organization. To command
means maintaining activities among employees. To control means to ensure everything is in
conformity with the plan and standard.
From the above, it may be deduced that managerial action can direct and control to a great extent
the nature, degree and pace of change within the organization. It also shows that the process of
management is rooted in the action of people at work.
3.1.1 Process
A process is a systematic way of doing things, process management is the ensemble of activities
of planning and monitoring the performance of process. Hence, we define management as a
process because all managers regardless of their particular attitude or skills engage in certain
related activities in order to achieve their objectives. In order to achieve the objectives of the
organizations, there is need for assessing an organizations goals and creating a realistic, detailed
plan of action for meeting those goals and it is necessary to bring together all available resources
called Six Ms of management i.e. men, machine, material, methods, money and market. These
basic steps in the process which involve creating a road map that outlines that each task the
organization must accomplish to meet its overall objectives.
3.2
Managerial Functions
The major functions of management include the following:

3.2.1 Planning
In designing an environment for effective performance of individuals working together in
groups, the most essential task is to see that purposes and objectives, and method of attaining
objectives are clearly understood. If group effort is to be effective, people must know what they
are expected to accomplish. This is the planning function that is the basic of all the managerial
functions.
George (1964)defines planning as the selecting and relating of fats and the making and using of
assumptions regarding the future in the visualization and formulation of proposed activities
believed necessary to achieve desired results, this is to say, in planning, a manager uses facts,
reasonable premises and constraints and from all of these he visualizes and formulates what the
necessary activities are, how they will be conducted and what will be their contribution to
achieving desired results.
Effective planning is based on facts not emotions or wishes. Planning is intellectual in nature, it
is a mental work. Planning can also be simply put as the process of setting objectives and putting
up the necessary steps to achieve the objects.
3.2.2 Organizing
Hodgets m. Richard (1992), in Bagobirin and Kassah (2009)define organization as the process
of assigning duties and coordinating efforts among all organization personnel to ensure
maximum efficiency in the attainment of objectives. This implies that the jobs that need to be
done are grouped together into departments. This is done so that each employee would know
precisely what he should do and what is expected from him. Organizing can also be defined as
that part of managing that involves establishing an internal structure of roles for people in an
enterprise to fill.
In looking at organization as a process, several fundamental inputs must be considered which
Koontz and Weilrich(1984) in Bagobirin and Kassah (2009) outlined as follows:
(i)
The structure must reflect objectives and plans because enterprise activities are derived
from these.
(ii)
The structure must reflect the authority available to enterprise managers; this depends
upon such social institutions as private properly, representative government and sanctions
individuals in operating a business, a university or any group venture.
(iii)
Organization structure must reflect its environment. The structure must be designed to
work to permit contributions by members of a group and to help people gain objectives
efficiently in a changing future. In this sense a workable organization structure can never
be either mechanical or static.
(iv)
The organization must be staffed with people obviously, the activity groupings and
authority provisions of an organization structure must take into account peoples
limitations and customs, that is, the kind of people who are to be employed.
3.2.3 Coordination
Coordination is a process combining activities in a consistent and harmonious way to ensure
efficiency and effectiveness in an organization. George R. Terry (1964) defines coordinating as
the orderly synchronization of efforts to provide the proper amount, timing and directing of
execution resulting in harmonious and unified action to a stated objective. It can be viewed as
the effort to find the winning combination from the basic resources on hand.
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(i)
(ii)
(iii)
Coordination deals with unifying the effort of people and is concerned with:
The amount of these efforts, both as to quantity and quality.
The timing of these efforts.
The directing of or determining the causes of these efforts.
Coordination can also be seen as the process of integrating the objectives and activities of the
separate unit (departments or functional areas) of an organization in order to achieve
organizational goal efficiently.
3.2.4 Controlling
The real test of any manager is the result that he achieves. Nothing is accomplishing unless
efforts bring about results. To apply the real test to any manager necessitates a criterion by which
results can be evaluated and, if required corrective measures adopted. If the other fundamental
functions of management were performed perfectly, there would be little need for controlling.
However, very rarely, if ever, is perfect planning achieved, organizing above any possible
reproach and coordinating a hundred percent (100%) effective. Some mistakes, loss of efforts,
friction and misdirected effort, may results and make for deviations from the intended goals.
George (1964) defined controlling as determining what is being accomplished, that is, the
performance, evaluating the performance, and if necessary applying corrective measures so that
performance takes place according to plans.
Cole (1996) notes that if planning represented the route map for the journey, then organizing
represented the means by which one could arrive at the chosen destination. We can now add that
controlling ensured that the travelers know how well they are progressing along the route, how
correct their map is, and what deviations, if any, they need to make to stay on course.
SELF ASSESSMENT EXERCISE
Define the term management and vividly explain the functions of management.
3.3
LEVELS OF MANAGEMENT
Managers are classified by their levels within the organization. There are three basic
management levels: top managers, middle managers and first-line managers as shown in figure
1.1
Top Management
Middle Managers
First-Line Managers
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Fig. 1.1 Levels of Management

3.3.1 First-Line Managers
In general first-line manager are directly responsible for the production of good or services. They
may be called sales managers, section or production supervisors; depending on the organization.
This level of management is the link between the production or operations of each department
and the rest of the organization. However, first-line manager in most companies spend little time
with higher management or with people from other organizations. Most of their time is spend
side-by-side with the people they supervise.
3.2.2 Middle Manager
Middle managers received broad, general strategies and policies from top managers and translate
them into specific goals and plan for first-line-managers to implement. Middle managers
typically have titles such as department head, plant manager and director of finance.
3.3.3 Top Mangers
The overall direction and operations of an organization is the responsibility of top managers.
Typical titles of top managers are chief executive officer, president, chairman, division president
and executive vice president. Top managers develop goals, policies, and strategies for the entire
organization.
3.4
SYSTEM
Systems are composed of interrelated parts or sub-systems and the system can only be explained
as a whole. This is known as holism or synergy. Holism states that any whole is more than the
sum of its individual parts.
There are many definitions of the term system. A comprehensive one is that used by the Open
University:
A. System is an assembly of part where:
1.
The parts or components are connected together in an organized way.
2.
The parts or components are affected by being in the system (and are changed by leaving
it).
3.
The assembly does something.
4.
The assembly has been identified by a person as being of special interest (Carter et al
1984).
This definition contains the essential elements of parts, relationships and objectives. It is very
broad and can apply to any of the systems around us, such as: The university, railway, hospital,
manufacturing company etc. A system could be open or closed.
3.4.1 Open Systems

An open system is a system which interacts with it environment. It receives inputs and influences
from the environment and in turn, passes back outputs and influenced to the environment. All
social organizations are open systems. They that organization adapts to changes in the
environment is the key element in an organizations success and indeed its very survival.
Organizations as open systems attempt to monitor and anticipate environment disturbances.
3.4.2 Close Systems
A close system is the one that is isolated from its environment. Close systems are self-contained
so that the external environment does not influence the behavior of the system, nor does the
system influence its environment. The idea can only strictly be applied to mechanical and
physical systems as all social systems have some interaction with their environment.
Closed systems are required for stability and consistency, whereas open systems are required for
uncertain conditions. Closed systems are designed for efficiency, open systems for survival.
Inputs
Environment
Conversion or
Process
Outputs
Environment
Fig. 1.2 Model of an Open System

3.5
DATA
Data is unprocessed facts and figures. Plain collected data, as raw facts cannot help in decision
making. However, data is the raw material that is organized, structured and interpreted to create
useful information system.
Data is defined as groups of non-random symbols in the form of text, images, voice
representing qualities, action and objects.
3.5.2 DATA CHARACTERISTICS
a.
b.
c.
d.
They are facts obtained by reading, observation, counting, measuring and weighing etc.
which are then recorded
Data are derived from external and internal sources (activities with firm).
Data may be produced as an automatic by-product of some routine but essential operation
such as the production of an invoice or alternative a special counting or measuring
procedure must be introduced and the result recorded.
The source of data need be given considerable attention because if the sources of the data
flawed, any resulting information will be worthless.
3.5.1 Data Processing

Data or processing systems perform the essential role of collecting and processing the daily
transactions of the organizations. Data processing is necessary to ensure that the day-to-day
activities of the organization are processed, recorded and acted upon. Files are maintained which
provide both the current data for transaction, for example the amount invoiced and cash received
during the month for statement preparation, and which also serve as a basis for operational and
tactical control and for answering enquiries.
Data
Processes
Output
Fig. 1.3 Data Processing Systems

3.6
INFORMATION
Information is interpreted data; created from organized structured and processed data in a
particular context, information can be recorded as signs, or transmitted as signals. Information
is any kind of event that affects the state of a dynamic system that can interpret the information.
Conceptually, information is the message (utterance or expression) being conveyed. Therefore, in
a general sense, information is knowledge communicated or received concerning a particular
fact or circumstance.
SELF ASSESSMENT EXERCISE 2
1.
Define the following term:
(i)
Data
(ii)
Information
2.
List 4 characteristics of Data
3.6.1 Characteristics of Good Information

Good information is that which is used and which create value. Experience and research shows
that good information has numerous qualities which are:
1.
Relevance: Information must be relevant to the problem being considered. Too often
reports, messages, tabulations etc. contain irrelevant parts which most prevent the user of
the information to get the actual meaning of what the sender wants.
2.
Accuracy: Information should be sufficiently accurate for it to be relied upon by the
manager and for the purpose for which it is intended.
3.
Completeness: Ideally, all the information required for a decision should be available.
However, in practice, this is not often obtainable. What is required is that the information
is complete in respect of the key elements of the problem. This suggests that there should
be interaction between information provides and users to ensure that the key factors are
identified.
4.
Confidence in the source: For information to have value it must be used. For it to be
used managers must have confidence in the source. Confidence is enhanced:
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a.
b.
5.
The source has been reliable in the past

There is good communication between the information producer and the manager.
Communication to the right person: All persons have a defined sphere of activity and
responsibility and should receive information to help them carry out their designated
tasks. In practice this is not always as easy as it sounds. It is quite common for
information to be supplied to the wrong level in the organization. a superior may not pass
it on the person who needs it whilst subordinates may hold onto information in an attempt
to make themselves seem indispensable.
3.6.2 Functions of Information

a.
Reduction of Uncertainty: Uncertainty exist where there is less than perfect knowledge.
Rarely, if ever is there perfect knowledge but relevant information help to reduce the
unknown.
b.
And an aid to monitoring and control: By providing information about performance
and the extent of deviations from planned level of performance, management are better
able to control operation.
c.
As a means of communication: Managers need to know about developments, plans,
forecasts, impending changes and so on.
d.
As a memory supplement: By having historical information about performance,
transactions, results of past actions and decisions available for reference, personal
memories are supplemented.
e.
As an aid to simplification: By reducing uncertainty and enhancing understanding,
problems and situations are simplified and become more manageable.
4.0
CONCLUSION
MIS exists in organization in order to help them implement the organizational structure and
dynamics of the enterprise for the purpose of managing the organization in a better way and
capturing the potential of the information system for competitive advantage.
5.0
SUMMARY
Management Information System is seen as a way of evaluating, analyzing and processing an

organization data to produce meaningful and useful information from which the management can
take decision to ensure future growth and development of the organization.
6.0
TUTOR-MARKED ASSIGNMENT
1.
2.
2.
4.
What are the functions of information in an organization?

Distinguish between data and information?
Define management and explain its role in a modern organizations?
Discuss managerial levels and explain their functions?
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7.0
REFERENCES/FURTHER READINGS
Bagobiri, Y.E. and Kassah V. (2009) Principles of Management (2nd Ed.) Kaduna; Wonderful
Press.
Cole, G.A. (1986) Management Theory and Practice, (2nd Ed.) London: Menthen.
George R. Terry (1964) Principles of Management, Richard D. Irwin, Inc. Homewood Illinois,
USA. Ghost Prentice Hall, Plc.
Koslowski. P. (ed.), (2010) Elements of a Philosophy of Management and Organization, Studies
in Economic Ethics and Philosophy, Springer-Verlag Berlin Heidelberg.
Simon, H. A. (1960)The New Science of Management Decision. NewYork: Harper & Row.
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MODULE 1
UNIT 2: MEANING OF MANAGEMENT INFORMATION SYSTEM (MIS)
CONTENTS
1.0
2.0
3.0
4.0
5.0
6.0
7.0
Introduction
Objectives
Main Content
3.1
Definition of Management Information System (MIS)
3.2
Objectives of MIS
3.3
Characteristics of MIS
3.4
MIS Need for Information Systems
3.5
Planning/Design of MIS
3.6
Problems with MIS
3.7
Goals of MIS
3.8
Role of the MIS
3.9
MIS and Computer
3.10 The Challenges of Information
Conclusion
Summary
Tutor-Marked Assignment
Reference/Further readings
1.0
INTRODUCTION
This unit examines how management information systems can support management decision
making and it also dwells on the details of what management information systems in
organization encompass.
2.0
OBJECTIVES

1.
2.
3.
4.
Define Management Information Systems (MIS)

Mention Characteristics of MIS
Highlight Objectives of MIS
State the Problems with MIS
3.0
MAIN CONTENT
3.1
Management Information System
Lucey (2005) defined management information systems as: - a system using formalized
procedures to provide management at all levels in all functions with appropriate information
based on data from both internal and external sources, to enable them to make timely and
13
effective decisions for planning, directing and controlling the activities for which they are
responsible.
Management information systems can be described as tools that help managers organize and
make decisions from their data. More simply, effective MIS aids communication. Unsurprisingly,
its still true that people generally accomplish more together than they do apart, and the old
concept collaboration and communication is still at the core of business. Management
information systems strive to efficiently collect, format and communicate information to a wide
variety of people.
More so, Management Information System (MIS) is a computer-based system for collecting,
storing, processing and providing access to information used in the management of an
organization (Chartered Management Institute 2003).
3.2
OBJECTIVES OF MIS
Goals of an MIS are to implement the organizational structure and dynamics of the enterprise for
the purpose of managing the organization in a better way and capturing the potential of the
information system for competitive advantage.
Following are the basic objectives of an MIS:
1.
2.
3.
4.
5.
3.3
Capturing Data: Capturing contextual data, or operation information that will contribute
in decision making from various internal and external sources of organization.
Processing Data: The captured data is processed into information needed for planning,
organizing, coordinating, directing and controlling functional of strategies, tactical and
operational level.
Information System: Information or processed data need to be stored for future use.
Information Retrieved: The system should be able to retrieve this information from the
storage as and when required by various users.
Information Propagation: Information or the finished product of the MIS should be
circulated to its users periodically using the organizational network.
CHARACTERISTICS OF MIS
Following are the characteristics of an MIS
1.
2.
3.
4.
5.
It should be based on a long-term planning.

It should provide a holistic view of the dynamics and structure of the organization.
It should work as a complete and comprehensive system covering an interconnecting subsystem within the organization.
It should be planned in a top-down way, as the decision makers or the manager should
actively take part and provide clear direction at the development stage of the MIS.
It should be based on need of strategic, operational and tactical information of manager
of an organization.
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6.
7.
3.4
It should be able to make forecasts and estimates and generate advanced information, this
providing a competitive advantage. Decision makes can take actions on the basis of such
predictions.
It should create linkage between all subsystems within organization, so that the decision
makers can take the right decision based on integral view.
MIS NEED FOR INFORMATION SYSTEM
Managers make decisions. Decision making, generally takes a fourfold path:

1.
Understanding the need for decision or the opportunity.
2.
Preparing alternative course of actions
3.
Evaluating all alternative course of actions.
4.
Deciding the right path for implementation.
3.5
PLANNING FOR MIS
MIS design and development process has to address the following issues successfully:
1.
There should be effective communication between the developers and users of the
system.
2.
There should be synchronization in understanding of management, processes and IT
among users as well as the developers.
3.
Understanding of the information needs of manager from different functional areas and
combining the needs into a single integrated system.
4.
Creating a unified MIS covering the entire organization will lead to a more economical,
faster and more integrated system, however, it will increase in design complexity
manifold.
5.
The MIS has to be interacting with the complex environment comprising all other subsystems in the overall information system of the organization. So it is extremely
necessary to understand and define the requirements of MIS in the context of the
organization.
6.
It should keep pace with changes in environment, changing demands of the customers
and growing competition.
7.
It should take care of not only the users i.e. the managers but also other stakeholders like
employees, customers and suppliers.
Explain factors to be considered in planning MIS?
3.6
PROBLEM WITH MIS
There are abundant problems associated with MIS because the computer equipment used has had
relatively little success in providing management with the information it needs. The typical
reasons discovered for this include the following:
1.
Lack of management involvement with the design of MIS
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2.
3.
6.
Narrow and or inappropriate emphasis of the computer system

Undue concentration on low level data process applications particular in the accounting
area.
Lack of knowledge of computers.
Poor appreciation by information specialist of managements true information
requirement and organization problems
Lack of top management support.
3.7
GOALS OF MIS
4.
5.
An institution Management Information System (MIS) should be designed to achieve the

following goals:
1.
Enhance communication among the institution.
2.
Deliver complex material throughout the institution.
3.
Provide an objective system for recording and aggregating information
4.
Reduce expenses related to labour intensive manual activities.
5.
Support organizations strategic goals and direction. Because MIS supplies decision
makers with facts, it supports and enhances the overall attainment of organizational goals.
3.8
ROLE OF THE MANAGEMENT INFORMATION SYSTEMS (MIS)
The role of the MIS is an organization can be compared to the role of heart in the body. The
information is the blood and MIS is the heart. In the body the heart plays the role of supplying
pure blood to all the elements of the body including the brain. The heart works faster and
supplies more blood when needed. It regulates and controls the incoming impure blood,
processes it and sends it to the destination in the quantity needed. It fulfils the needs of blood
supply to human body in normal course and also in crisis.
The MIS plays exactly the same role in the organization. The system ensures that an appropriate
data is collected from the various sources, processed and sent further to all the needy
destinations. The system is expected to fulfill the information needs of an individual, a group of
individuals, the management functionaries; the managers and the top management.
The MIS satisfies the diverse needs through a variety of systems such as query systems, analysis
systems, modeling system and decision support systems, the MIS helps in strategic planning,
management control, operational control and transaction processing.
The MIS helps the clerical personnel in the transaction processing and answers their queries on
the data pertaining to the transaction, the status of a particular record and references on a variety
of documents. The MIS helps the junior management personnel by providing the operational data
for planning, scheduling and control, and help them further in decision making at the operational
level to correct an out of control situation. The MIS helps the middle management in short term
planning, target setting and controlling the business functions. It is supported by the use of the
16
management tools of planning and control. The MIS helps the top management in goal setting,
strategic planning and evolving the business plans and their implementation.
The MIS plays the code of information generation, communication, problem identification and
helps in the process of decision making. The MIS, therefore, plays a vital role in the
management, administration and operation of an organization.
3.9
MANAGEMENT INFORMATION SYSTEM AND COMPUTER
Translating the real concept of the MIS into reality is technically, an infeasible proposition unless
computers are used. The MIS relies heavily on the hardware and software capacity of the
computer and its ability to process, retrieve and communicate with no serious limitations.
The variety of the hardware having distinct capabilities makes it possible to design the MIS for a
specific situation. For example, if the organization needs a large database and very little
processing, a computer system is available for such a requirement. Support the organization has
multiple business location at long distances and if the need is to bring the data at one place,
process and then send the information to various location, it is possible to have a computer
system with a distributed data processing capability. If the distance is too long, then the computer
system can be hooked through a satellite communication system. The ability of the hardware to
store data and process it at a very fast rate helps to deal with the data volumes, its storage and
access effectively. The ability of the computer to sort and merge helps to organize the data in a
particular manner and process it for complex lengthy computations.
Since the computer is capable of digital, graphic, word image, voice and text processing, it is
exploited to generate information and present it in the form which is easy to understand for the
information user.
The ability of a computer system to provide security of data brings a confidence in the
management in the storage of data on a magnetic data in an impersonal mode. The computer
system provides the facilities such as READ ONLY where you cannot delete to UPDATE. It
provides an access to the selected information through a password and layered access facilities.
The confidence nature of the data and information can be maintained in a computer system. With
this ability, the MIS becomes a safe application in the organization.
The software, an integral part of a computer system, further enhances the hardware capability.
The software is available to handle the procedural and non-procedural data processing. For
example, if you want to use a formula to calculate a certain result, an efficient language is
available to handle the situation. If you are not to use a formula but have to resort every time to a
new procedure, the non-procedural languages are available.
The software is available to transfer data from one computer system to another. Hence, you can
compute the results at one place and transfer them to a computer located at another place for
some other use. The computer system being able to configure to the specific needs helps design a
flexible MIS.
The advancement in computers and the communication technology has the distance, speed,
volume and complex computing an easy task. Hence, designing the MIS for a specific need and
simultaneously designing a flexible and open system becomes possible, thereby saving a lot of
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drudgery of development and maintenance of the system. The concept of user-friendly systems
and the end user computing is possible, making information processing a personalized function.
However, the application of the management principles and practices in todays complex
business world is possibly only when the MIS is based on computer system support.
Give three reasons for using computer for MIS in the organization?
3.10
THE CHALLENGE OF INFORMATION SYSTEMS
Increasingly, information systems are bringing about changes in business goods, relationship
with customers and suppliers and internal operations. Building, operating and maintaining
information systems are challenging activities for a number of reasons. We believe there are five
key challenges that managers should heed;
1. In the Strategic Business Challenge: How can businesses use information technology to
design organizations that are competitive and effective?
Technical change moves much faster than humans and organizations are changing. The power of
computer hardware and software has grown much more rapidly than the ability of organization to
apply and use this technology. To stay competitive, many organizations actually need to be
redesigned. They will need to use information technology to simplify communication and
coordination, eliminate unnecessary work, and eliminate the inefficiency of out model
organization structures. If organization merely automates what they are doing, they are largely
missing the potential of information technology. Organization need to rethink and redesign the
way they design, produce, delivery and maintain goals and services.
2. The Globalization Challenge: how can firms understand the business and system
requirements of a global economic environment? The rapid growth in international trade and the
emergence of a global economy call for information systems that can support both producing and
selling goods in many different countries. In the past, each regional office of a multinational
corporation focused on solving its own unique information problems. Given language, cultural
and political differences among countries, this focus frequently resulted in chaos and the failure
of central management controls. To develop integrated multinational information systems,
business must develop global hard ware and communications standards and create cross-cultural
accounting and reporting structures (Roche, 1992; Buss, 1982).
3. The information Architecture: How can organizations develop an information architecture
that supports their business goals? While information technology can suggest some new ways of
doing business, firms still need to have a clear idea of their business goals and how these can
best be supported by information systems. Many organizations cannot meet their goals because
they are crippled by fragmented and incompatible computer hardware, software,
telecommunication networks and information system. Integrating these islands of information
into a coherent architecture is now a priority.
4. The Information Systems Investment Challenge: How can organization determine the
business value of information system? A major problem raised by the development of powerful
18
inexpensive computers involves not technology but rather management and organization. Its one
thing to use information technology to design, delivery and maintain new products. Its another
thing to make money doing it. How can organizations obtain a sizeable payoff from their
investment in information systems?
Engineering massive organizational and system changes in the hope of positioning a firm
strategically is complicated and expensive. Is this an investment that pays off? How can you tell?
Senior management can be expected to ask these question: Are we receiving the kind of return on
investment form our systems that should be? Do our competitors get more? While understanding
the costs and benefit of building a single system is difficult enough, it is daunting to consider
whether the entire system effort is wroth it. Imagine then, how a senior executive must think
when presented with a major transformation in information architecture a bold venture in
organizational change costing tens of millions of dollars and taking many years.
5. The responsibility and Control Challenge: How can organizations design systems that
people can control and understand? How can organizations ensure that their information systems
are used in an ethically and socially responsible manner?
Information systems are so essential business, government and daily life that organization must
take special steps to ensure that they are accurate, reliable and secure. Automated or semiautomated systems that malfunction or are poorly operated can have extremely harmful
consequences. A firm invites disaster if it uses systems that dont work as intended, that dont
deliver information in a form that people can interpret correctly and use, or that have control
rooms where control dont work or where instruments give false signals. The potential for
massive fraud, error, abuse and destruction is enormous.
Information systems are so essential to business, government and daily life that organizations
must take special steps to ensure that they are accurate, reliable and secure. Automated or semiautomated systems that malfunction or are poorly operated can have extremely harmful
consequences. A firm invites disaster if it uses systems that dont work as intended, that dont
deliver information in a form that people can interpret correctly and use, or that have control
rooms where controls dont work or where instruments give false signals. The potential for
massive fraud, error, abuse and destruction is enormous. Information systems must be designed
so that they function as intended and so that human can control the process.
4.0
CONCLUSION
In general MIS is an information system that evaluates analyzes and processes an organizations
data to produce meaningful and useful information on which the management will take right
decision to ensure future growth of the organization.
5.0
SUMMARY
In this unit you have learnt about the importance of MIS in an organization as well as the various
challenges of MIS.
19
6.0
1.
2.
3.
(a) What is Management Information System?

(b) Discuss the characteristics of MIS
What are key challenges to the success of MIS in organization?
Outline the objectives of MIS in an organization?
7.0
Bagobiri, Y.E and Kassah, V. (2009), Principle of Management (2nd Ed) Wonderful Press,
Kaduna.
Harsh, Stephen B., L. J. Connor, and G. D. Schwab. (1981). Managing the Farm Business.
Prentice-Hall, Inc., Englewood Cliffs, New Jersey.
House, William C. (1983). Decision Support Systems A Data-Based, Model-Oriented UserDeveloped Discipline. Petrocelli Books, Inc. New York, NY.
Landon, K.C. and Laudon J.P (1996) Management Information Systems: Organization and
Technology, (4th Ed.) Prentice Hall Inc, Upper Saddled River, New Jersey.
Lucey, T. (2005) Management Information Systems, 9th Ed. Thomson Learning, High Holborn,
50-51 Bedford Row, London
20
MODULE 1
UNIT 3: INFORMATION TECHNOLOGY
CONTENTS
1.0
Introduction
2.0
Objectives
3.0
Main Content
3.1
Definition of Information Technology
3.2
Application of IT in Information Systems
3.2.1 Data Processing/Transaction Processing System

3.2.2 Office Support System
3.2.3 End-User Computing
3.3
The Impact of IT on Organizations
3.4
Technology and Job Changes
4.0
Conclusion
5.0
Summary
6.0
7.0
1.0
INTRODUCTION
This unit helps you to see the connection between Information Technology (IT) and MIS in
business performance. The use of Information and Communication Technologies (ICT) by
individuals and organizations dominates the business world.
2.0
OBJECTIVES

1. Define Information Technology (IT)
2. Explain application of IT in information management.
21
3.0
MAIN CONTENT
3.1
INFORMATION TECHNOLOGY
Information Technology is the technology which supports the activities involving the creation,
storage, manipulation and communication of information with their related methods,
management and applications. Lucey (2005) supplied a useful definition given by the
Department of Trade and Industry: The acquisition, processing, storage and dissemination of
vocal, pictorial, textual and numeric information by a micro-electronics based combination of
computing and telecommunications. Information technology is a broad term which covers all
aspects of the use of computer technology.
In short, IT is the medium by which information is passed across to all levels of management
either internally or from external sources. Some of the IT facilities include computers of various
types, scanners, printers, servers and processors, photocopiers etc. and other devices for
information acquisition and dissemination such as teleconferencing/video conferencing, network,
Teletext, facsimile, internet, E-mail and voice mail etc.
3.2
APPLICATION OF IT IN INFORMATION SYSTEM
There are major areas of IT application in information system. The three areas are:
1.
Data processing (or transaction processing)
2.
Office support system.
3.
End user systems
3.2.1 Data Processing or Transacting Processing Systems

Data or transaction processing systems perform the essential role of collecting and processing the
daily transactions of the organization, hence the alternative term, transaction processing.
Typically these include all forms of ledger keeping, accounts, receivable and payable, invoicing,
credit control, rate demands and stock movement. Transaction processing is essential to keep the
operations of the organization running smoothly and provides the base for all other internal
information support.
Transaction processing is necessary to ensure that day-to-today activities of the organization are
processed, recorded and acted upon. Files are maintained which provide both the current data for
transactions, for example the amount invoiced and cash received during the month for statement
preparation, and which also serve as a basis for operational and tactical control and for answering
enquiries.
Transaction, processing can be sub-divided into:
a.
Current activity processing.
b.
Report processing
c.
Inquiry processing.
22
3.2.2 Office Support Systems

The type of office supports systems used influences information available for management.
Office support systems or office automation technologies are now used for virtually all everyday
information processing tasks in offices and business organizations. They enable people to
perform their own work, such as letters and report writing, store and process data through
databases and communicate through email. Office automation technologies include a wide array
of software application tools such as spreadsheets (e.g. excel), word processors (e.g. word) and
desktop publishing tools (e.g. publisher), presentation packages (e.g. PowerPoint) and database
systems (e.g. Microsoft Access).
These technologies also enable members of a group to interact with each other and organize their
work. They can communicate with each other through email, fax and teleconferencing and they
plan and coordinate their activities through schedules. As these technologies improve
communication and the sharing of information, they have enabled teleworking (the process
where staff work at locations other than the company office, usually at home) and video
conferencing to become a reality.
23
Microform systems,
disk storage, view
data/teletext
Word
processing,
copying, desktop
publishign
Office
Support
Systems
Electronic mail,
teleconferencing,
communicaiton,
networks, telephones,
data/facsimile
transmission
Telecommunications
Micros, VDUS,
disk storage
Computing
Fig. 1.4 ICT based Office Support Systems

3.2.3 End User Systems
These systems seek to provide management with direct assistance with their work. Examples
include: decision support systems, expert systems, executive information systems.
The introduction of personal computers, terminals, networks, user-friendly software, databases,
etc. has altered the position dramatically and has led to the growth of end-user computing and the
consequent availability of personalized information for management rather than oust the prespecified output of computer processing, important though these outputs often are;
End-user computing may be broadly defined as; The direct, hands on approach to computers by
users-non indirect use through systems professionals. Users may include managers, office staff,
sales people, production workers and others. With the spread of end-user computing,
employees and managers are able to access data and analyse it directly themselves in an
individual manner.
24
They are able to explore and investigate, carry out various types of analysis, obtain assistance in
decision making, monitor operations and results in more specific ways and generally enhance the
ways in which they carry out their work.
3.3
THE IMPACT OF IT ON ORGANIZAITONS
Technology, which includes ICT, influences organizations in a variety of ways. In summary,

technology alters the skills requirements for individuals and it changes jobs and the way they are
done. It can also alter relationships between individuals and departments within the organization
and may affect some relationships outside the organization, e.g. with customers, suppliers and
clients. It is likely to be major factor in determining the type of information available and how
the information is used and consequently how the organization operations.
3.4
TECHNOLOGY AND JOB CHANGES
Technology simplifies and reduces tasks needing manual skills and strength especially in
factories and all forms of production. Properly applied, it can increase productivity. The use of
reprogrammable robots for such tasks as welding, spraying, materials handling and others helps
to eliminate dirty or hazardous and repetitive work. Robots and Computer Aided Manufacturing
(CAM) as well as reducing costs, improve quality and consistency of finished products. The use
of technology requires enhanced problem-solving skills and the ability to interpret data and is
thus likely to lead to a widening gulf between skilled and unskilled workers. Routine tasks
requiring a low level of skill are disappearing fast. As an example, the copy typists has all but
disappeared from many offices. The availability of word processors, flexible printers and
photocopies have effectively eliminated copy typing.
4.0
CONCLUSION
Office support systems cover different types of aids including, word processing, electronic mail,
data transmission, microform system etc. Electronic transmission is supplementing traditionally
based communication.
5.0
SUMMARY
ICT systems affect how the organizations operates, how it is managed and its structure and
culture.
6.0
(1)
(2)
Outline some of the implications that ICT may have for organization?
What work do data processing/transaction processing system do?
25
7.0
Cole, G.A. (1986) Management Theory and Practices, 2nd Edition.

Laudon, K. & Laudon, J. (2006) Management Information Systems: Managing the Digital Firm,
9th ed. Prentice Hall.
Lucey, T. (2005) Management Information Systems, 9th Edition Thomson Learning, High
Holborn, 55-5, Bedford Row London.
26
MODULE 1
UNIT 4: SYSTEMS CONCEPTS
CONTENTS
1.0
2.0
3.0
3.1
3.2
3.3
3.4
3.5
3.6
4.0
5.0
6.0
7.0
Introduction
Objectives
Main Content
Definition of System
Features of the System
Closed Systems and Open Systems
Systems and Adaptability.
Shared and Overlapping System.
Socio-technical systems
Conclusion
Summary
Reference/Further Readings.
1.0
INTRODUCTION
The system approach is a method or framework which helps us to analyze and explore the
exploration and interactions which exist in the systems around us.
2.0
OBJECTIVES
At the end of this unit you should be able to:

(1)
define a system
(2)
know the main features of the systems approach
(3)
distinguish between open and closed systems.
3.0
3.1
MAIN CONTENT
DEFINITION OF SYSTEM
Systems are composed of interrelated parts or sub-systems and the system can only be
explained as a whole. This is known as holism or synergy. Holism states that any whole
is more than the sum of its individual parts.
A comprehensive definition of system is that used by the Open University:

A system is an assembly of part where:
1.
The part or components are connected together in an organized way.
27
2.
3.
4.
it).
1984).
broad and can apply to any of the systems around us such as: The university, railway, hospital,
manufacturing company, an information system, a local authority. In effect, any arrangement
which involves the handling, processing or manipulating of resource of whatever type can be
represented as a system.
3.2
FEATURES OF THE SYSTEMS APPROACH
The systems approach has many facets of which the following are the most important.
(a)
All systems are composed of interrelated parts or sub-systems and the system can only be
explained as a whole. This is known as holism or synergy. Holism states that any whole is
more than the sum of its individual parts. When the appropriate parts are combined,
properties appear from the whole which the parts alone do not possess. These are known
as emergent properties. Examples are:
Taste: A property of water not the constituent hydrogen and oxygen atoms.
Growth: A property arising from the combination of seeds and soy.
Obsolescence: likely to arise from consideration of financial, technical and personal

factors. A machine may still work but may be too expensive or dangerous to run or may
no longer be required for current production.
(b)
Systems are hierarchical in other parts of subsystems are made up of other smaller parts.
For example, the accounting systems of an organization may be a subsystem of the
information system which itself a subsystem of the planning system, which is a subsystem of the organization as a whole.
(c)
The parts of a system cannot be altered without affect the parts. Many organizational
problems stem from ignoring this principle. For example, a departmental procedure or
form might be changed without considering the ripple effects on the other departments
affected with dire consequences.
(d)
The sub-systems should work toward the goal of the higher systems and not pursue their
own objectives independently. Where sub-systems to pursue their own objectives to the
detriment of higher objectives, then a condition of sub-optionality is said to exist and, in
general, MIS designers seek to avoid sub-optimality wherever possible. Ideally, there
should be goal congruence between all the subsystems that make up the system as a
whole. Goal congruence simply means that the objectives of the subsystems should align
with the objectives of the system, or organization as a whole.
Three key features of a systems, namely the transformation process, system boundaries and the
environment of the systems.
28
3.2.1 The Transformation Process

All systems are composed of the same basic elements; inputs, processes and outputs.
Systems theory gives a much more embracing meanings to the terms inputs and outputs than
would normally be considered. For example, the inputs to a production system include; raw
materials, labour (skills, quantity) equipment and plant facilities, job specifications, standards of
all types, maintenance facilities, power supplies, etc. A similar, almost endless list could be given
for the output side of the system.
Fortunately, it is not usually necessary (or possible) to consider all possible inputs and outputs.
The usual procedure when analyzing systems is:
(a)
To choose those outputs with which we are concerned. These are usually those outputs
most relevant to the system objectives; and
(b)
To choose those inputs for examination and control which are considered to have
significant effects on the output considered important.
In all systems other than physical or mechanical ones, the transformation process is controlled by
information. In the simplest case, information on the output of the system is used as a basis for
control of the input of the system. This is known as feedback or information feedback.
3.2.2 System Boundaries
The features which define the extent of a system are its boundaries. In mechanical, physical and
biological systems, the boundaries are readily identifiable as they tend to arise naturally. With
any form of social organizations, boundaries are not obvious and often change to meet differing
demands. In social organizations, there are many transfer across boundaries of ideas, people,
materials and information within organizations boundaries are determined by management and
vary from organizations to organizations. For example, in one organization the sales department
may be responsible for invoicing whereas, in another, invoicing may be within the boundary of
the accounting department.
3.2.3 The Environment of Systems
In the widest sense, a systems environment is all those elements not in the system. The
environment can be defined as those external elements whose changes in attitudes, behavior or
properties affect the state of the system and those external elements which are changed by the
systems behavior. In effect, this means that the relevant environment of any system comprises
those elements with which it has some connotation or relationship.
3.3
Closed Systems and Open Systems
Open Systems
social organizations are open systems. The organization that adapts to changes in the
environment is the key element in an organizations success and indeed its very survival.
29

Closed Systems
A close system is the one that is isolated from its environment. Closed systems are self-contained
3.4
Systems and Adaptability
To be successful and to remain in existence organizations must be flexible and adapt to change.
This means change not only in the organizations relationship with the external environment but
also in its internal methods and structures. Successful organizations are characterized by their
internal openness and their readiness to accept that yesterdays methods and products are very
unlikely to be suitable for tomorrow. Recognizing the need for changing, initiating change and
managing change successfully are the hallmark of good quality management. Organizations do
not automatically adjust to change.
Adaptation only occurs as a result of management decision and action. Successful change is
change that is planned and considered, this means that the effects on the organization as a whole
must be considered when making a change to part of the organization.
3.5
Shared and Overlapping Subsystem
Sub-system can belong to more than one system and there is a need to recognize the overlap and
to design operations and processes accordingly. The recognition of overlap is particularly
important when changes are made in one of the systems which share the same sub-system.
An example of a shared subsystem is shown in figure 1.5
National Warehouse
system
The company system
The company warehouse

subsystem
The local
system
distribution
Fig. 1.5. Sub-system overlap

Overlap is often an efficient and economical management. For example, a central purchasing
subsystem used by various companies in a group may be able to obtain greater discounts and
may aid the standardization of parts and materials. A centralized computer facility may be shared
by all departments within an organization with a reduction in overall cost. However, such
overlaps are likely to increase communication difficulties and may have longer response times.
30
Because of the need to coordinate activities and to obtain numerous approach for change. Such
structures may be less flexible in rapidly changing condition.
Kate and Kahn; identified five sub-systems within organizations. These can be summarized as
follows:
1.
Production or technical sub-systems: These deals with the basic tasks of the
organization, i.e. the production of goods or the production of services.
2.
Supportive sub-systems. These maintain the relationship between the production
subsystem and the external environment, i.e. the procurement of inputs and the disposal
of outputs.
3.
Maintenance sub-systems. These provide the rules, rewards and roles of those who
work in the organization.
4.
Adaptive subsystems; whereas the above the subsystems are concerned with the present
organization, the adaptive sub-system is concerned with the future, i.e. new markets, new
products, new methods etc.
5.
Managerial subsystems. These consist of the controlling and coordinating activities
which govern all the subsystems which make up the total system. These include;
coordination, decision making, planning and control.
3.6
Socio-Technical Systems
The socio-technical view of organization was developed by Trust and the Tavistock Institute and
arose from consideration that any production system requires both a technical organization, i.e.
the equipment, processes, methods etc. and a work organization relating to those who carry out
the necessary tasks to each other, i.e. the social system. Based on this view on organization is not
just a technical or social system but is the structuring of human activities found various
technologies. The technologies involve determine the technical sub systems and very widely.
Consider, for example, the differing skills, procedures, machinery, equipment and the layout of
facilities required in an electronic company, a car manufacturer, a hospital or a computer bureau.
In addition to the technical subsystem, every organization has a social sub system which consists
of the aspirations, expectations, interactions and value systems of the members. The two subsystems-the technical and the social- cannot be looked at separately but must both be considered
interrelating within the organization. Socio-technical theory suggests that the organization
consists of four interrelated elements-tasks, people, structure and technology as shown in figure
1.6
31
Technology
Structure
People
Tasks
Fig. 1.6 Socio-Technical view of organizations
More traditional approaches to organizations and their problems have tended to concentrate on
one or other of the subsystems with little or no recognition of the other. For example, the
production engineering/management science approach to organizational problems concentrated
on the economic technical sub system and on fairly mechanistic techniques for quantifying
decision making, control and of planning production.
The human relations and behavioural schools concentrated on the social subsystem and
considered motivation, aspirations, group dynamics and other related factors with scant regard to
the technologies involved. The socio-technical view consider each of the primary subsystems and
its interrelationships and effects on each other and thus makes a genuine attempt at a
comprehensive understanding of the systems we call organizations.
4.0
CONCLUSION
Systems in the organization help in the analysis of a problem that the organization will try to
solve with an information system. Systems concepts help you understand technology,
application, development and management in organization.
5.0
SUMMARY
The systems view is that the whole is greater than the sum of the individual parts and all systems
comprises of inputs, processes and outputs. Parts or sub systems cannot be altered without other
parts.
32
6.0
1.
2.
3.
4.
5.
What are the key features of the system approach?

Give several alternative definitions of a system?
What is the transformation process?
What is an open system?
What is a socio-technical system?
8.0
REFERENCE/FURTHER READING
Lucey T. (2005) Management Information System, 9th Ed. Thomson learning, High Holborn, 5051 Bedford Row, London.
Laudon, K.C. and Laudon, J.P. (1996) Management Information Systems: Organization and
Technology, 4th Ed. Prentice-Hall Inc, Upper Saddle River, New Jersey. W
33
MODULE 1
UNIT 5: INFORMATION SYSTEMS, ORGANIZATIONS AND STRATEGY
CONTENTS
1.0
2.0
3.0
3.1
3.2
3.5
3.6
3.7
3.8
3.9
Introduction
Objectives
Main Content
Organizations and Information Systems
What is an Organization
3.2.1 Features of an organizations
How Information Systems Impact Organizations
3.3.1 Economic Impact
3.3.2 Organizational and Behavioural Impact
Using Information Strategies to Achieve Competitive Advantage
3.4.1 Porters Competitive Forces Model
Information Systems Strategies
Conclusion
Summary
1.0
INTRODUCTION
3.3
3.4
Information Systems are a part of organizations and it influence one another. Information
systems are built by managers to serve the interests of the organization.
2.0
OBJECTIVES

1.
Identify and describe important features of organizations that managers need to know
about.
2.
Evaluate the impact of information systems on organizations
3.
Assess the challenges posed by strategic information systems and management solution.
3.0
MAIN CONTENT
3.1
ORGANIZATIONS AND INFORMATION SYSTEMS
Information systems and organizations influence one another. Information systems are built by
managers to serve the interests of the business firm. At the same time, the organization must be
aware of and open to the influences of information systems to benefit from new technologies.
The interaction between information technology and organization is complex and is influenced
by many mediating factors, including the organizations structure, business processes, politics,
culture, surrounding environment and management decisions (see figure 1.7) you will need to
understand how information systems can change social and work life in your organization. You
34
will not be able to design new systems successfully or understand existing systems without
understanding your own business organization.
Organizations
Mediating factors
Environment
Culture
Structure
Business processes
Politics
Management decision
Information
Technology
Fig. 1.7 The interaction between information technology and organization
The complex two-way relationship is mediated by many factors, not the least of which are the
decisions mad-or not made-by managers. Other factors mediating the relationship include the
organizational culture, structure, politics, business processes and environment.
As a manager, you will be the one to decide which system will be built, what they will do, and
how they will be implemented. You may not be able to anticipate all of the consequences of these
decisions. Some of the changes that occur in business firms because of New Information
Technology (IT) investment cannot be foreseen and have results that may or may not meet your
expectations. Who would have imagined ten years ago, for instance, email and instant messaging
would become a dominant form of business communication and that many managers would be
inundated with more than 200 email messages each day (Walker, 2004)?
3.2
WHAT IS AN ORGANIZATION?
An organization is a stable, formal social structure that takes resources from the environment and
processes them to produce outputs. This technical definition focuses on three elements of an
organization. Capital and labour are primary production factors provided by the environment.
The organization (the firm) transforms these inputs into products and services in a production
function. The products and services are consumed by the environments in return for supply
inputs.
An organization is more stable than informal group (such as a group of friend that meets every
Friday or lunch) in term of longevity and routines. Organizations are formal legal entities with
internal rules and procedures that must abide by laws. Organizations are also social structures
35
because they are a collection of social elements, much as a machine has a structure-a particular
arrangement of values, canes, shafts and other parts.
A more realistic behavioural definition of an organization is that it is a collection of rights,
privileges, obligations and responsibilities that is delicately balanced over a period of time
through conflict and conflict resolution. In this behavioural view of the firm, people who work in
organization develop customary ways of working; they gain attachments to existing
relationships; and they make arrangement with subordinates and superiors about how work will
be done, the amount of work that will be done, and under what conditions work will be done.
Most of these arrangements and feelings are not discussed in any formal rule book.
How do these definitions of organizations relate to information systems technology? A technical
view of organizations encourages us to focus on how inputs are combined to create outputs when
technology changes are introduced into the company. The firm is seen as infinitely malleable,
with capital and labour substituting for each other quite easily. But the more realistic behavioural
definition of an organization suggests that building new information systems, or rebuilding old
ones, involves much more than a technical rearrangement of machine and workers-that some
information systems change the organizational balance of rights, privileges, obligations,
responsibilities and feelings that have been established over a long period of time.
Changing these elements can take a long time, be very disruptive and require more resources to
support training and learning. For instance, the length of time required to implement effectively a
new information system is much longer than usually anticipated simply because there is a lag
between implementing a technical system and teaching employees and managers how to use the
system.
Technological change requires changes in who owns and control information, who has the right
to access and update the information; and who makes decisions about whom, when and how.
This complex view forces us to look at the way work is designed and the procedures used to
achieve outputs.
3.2.1 Features of Organizations
All modern organizations have certain characteristics. They are bureaucracies with clear-cut
divisions of labour and specialization. Organizations arrange specialists in a hierarchy of
authority in which everyone is accountable to someone and authority is limited to specific
actions governed by abstract rules or procedures. These rules create a system of impartial and
universal decision making. Organization try to hire and promote employees on the basis of
technical qualifications and professionalism (not personal connections). The organization is
devoted to the principle of efficiency; maximizing output using limited inputs. Other features of
organization include; Business processes, organizational culture, organizational politics,
surrounding environments, structure, goals, constituencies and leadership styles. All of these
features effect the kinds of information systems used by organizations.
36
3.3
HOW INFORMATION SYSTEMS IMPACT ORGANIZATIONS
Information systems have become integral, online, interactive tools deeply involved in the
minute-to-minute operations and decision making of large organizations. Over the last decade,
information systems have fundamentally altered the economies of organizations and greatly
increased the possibilities for organizing work. Theories and concepts from economics and
sociology help us understand the changes brought about IT.
3.3.1 Economic Impact
From the point of view of economics, IT changes both the relative costs of capital and the costs
of information. Information system technology can be viewed as a factor of production that can
be substituted for traditional capital and labor. As the cost of information technologies decreases,
it substituted for labour, which historic lay has been a rising cost. Hence, information technology
should result in a decline in the number of middle managers and clerical workers as information
technology substitute for their labour (Laudon, 1990).
IT also obviously affects the cost and quality of information and changes the economics of
information. Information technology helps firms contract in size because it can reduce transition
costs-the costs incurred when a firm buys on marketplace what it cannot make itself.
Information Technology, especially the use of networks can help firms lower the cost of market
participation (transaction costs), making it worthwhile for firms to contract with external
suppliers instead of using internal sources.
3.3.2 Organizational and Behavioural Impacts
Theories based on the sociology of complex organizations also provide some understanding
about how and why firms change with the implementation of new IT applications.
IT flatters organization-large, bureaucratic organizations, which primarily developed before the
computer age are often inefficient, slow to change and less competitive than newly created
organizations. Some of these large organizations have downsized, reducing the number of
employees and the number of levels in their organizational hierarchies. Behavioural researchers
have theorized that information technology facilitates flattening of hierarchies by broadening the
distribution of information to empower lower-level employees and increased management
efficiency. IT pushes decision-making rights lower in the organization because lower-level
employees receive the information they need to make decisions without supervision. (This
empowerment is also possible because of higher educational levels among the workforce, which
give employees the capabilities to make intelligent decisions). Because managers now receive so
much more accurate information on time, they become much faster at making decisions, so fewer
managers are required. Management costs decline as a percentage of revenues and the hierarchy
becomes much more efficient.
37
3.4
USING
INFORMATION
SYSTEMS
TO ACHIEVE
COMPETITIVE
ADVANTAGE
In almost every industry you examine, you will find that some firms do better than most others.
Firms that do better than others are said to have a competitive advantage over others. They
either have access to special resources that others do not, or they are able to use commonly
available resources more efficiently-usually because of superior knowledge and information
assets. In any event, they do better in terms of revenue growth, profitability or productivity
growth (efficiency) all of which ultimately in the long run translate into higher stock market
valuations than their competitors.
3.4.1 Porters Competitive Forces Model
Arguably, the most widely used model for understanding competitive advantage is Michael
Porters Competitive forces model (See figure 1.8).
New Markets Entrants
Substitute products
The Firm
Competitors
Suppliers
Customers
Fig. 1.8 Porters Competitive Forces Model

In Peters competitive forces model, the strategic position of firm and its strategies determine not
only by competition with its traditional direct competitors but also by four forces in the
industrys environment: new market, entrants, substitute products, customers and suppliers.
1.
New market entrants: In a free economy with mobile labour and financial resources,
new companies are always entering the market-place. In some industries, there are very
low barriers to entry, whereas in other industries, entry is very difficult. For instance, it is
fairly easy to start a pizza business or just about any small retail business, but it is much
more expensive and difficult to enter the computer chip business, which has very high
capital costs and requires significant expertise and knowledge that is hard to obtain. New
companies have several possible advantages; they are not locked into old plants and
equipment, they often hire younger workers hw are less expensive and perhaps more
innovative, they are not encumbered by old, worn-out brand names, and they are more
hungry (more highly motivated) than traditional occupants of an industry.
2.
Substitute Product and Services: In just about every industry, there are substitute that
your customers night use if your prices become too high. New technologies create new
substitutes all the time. Even oil has substitutes: Ethanol can substitute for gasoline in
cars; vegetable oil for diesel fuel in trucks; and wind, solar cola and hydropower for
industrial electricity generation.
3.
Customers: A profitable company depends in large measure on its ability to attract and
retain customer (while denying them to competitors) and charge high prices. The power
of customers grows if they can easily switch to a competitors products and services, or if
38
4.
they can force a business and its competitors to compete on price alone in a transparent
marketplace where there is little product differentiation, and all prices are known
instantly (such as the internet). For instance in the used college textbook market on the
internet, students (customers) can find multiple suppliers of just about any current college
textbook. In this case, online customers have extraordinary power over used-book firms.
Supplies: The market power of suppliers can have a significant impact on firm profits,
especially when the firm cannot raise prices as fast as can suppliers. The more different
suppliers a firm has, the greater control it can exercise over suppliers in terms of price,
quality and delivery schedules. For instance, manufacturers of laptop PCs almost always
have multiple competing suppliers of key components, such as key boards, hard drives
and display screens.
3.5
Information Systems Strategies
There are four generic strategies, each of which often is enabled by using information technology
and systems: low-cost leadership, product differentiation, focus on market niche, and
strengthening customer and supplier intimacy. (Laudon, 2006).
1.
Low-Cost Leadership
Use information to achieve the lowest operational costs and the lowest prices.
2.
Product Differentiation.
Use information systems to enable new products and services, or greatly change the customer
convenience in using your existing products and services. For instance, google continuously
introduces new and unique search services on its website, such as google maps. Manufacturers
and retailers are using information systems to create products and services that are customized
and personalized to fit the precise specifications of individuals customers.
3.
Focus on Market Niche
Use information systems to enable a specific market focus, and serve this narrow target market
better than competitors. Information systems support this strategy by producing and analyzing
data fine-tuned sales and marketing techniques. Information systems enable companies to
analyze customer buying patterns, tastes and preferences closely so that they efficiently pitch
advertising and marketing campaigns to smaller and smaller target markets
4.
Strengthen Customer and Supplier Intimacy
Use information systems to tighten linkages with suppliers and develop intimacy with customers.
Chrysler Corporation uses information systems to facilitate direct access from suppliers to
production schedules, and even permits suppliers to decide how and when to ship suppliers to
Chrysler factories. This allows suppliers more lead time in producing goods. On the customer
side, Amazon.com keeps track of user preference for book and CD purchases, and can
recommend titles purchased be other to its customers. Strong linkages to customers and suppliers
increase switching costs (the costs of switching from one product to a competing product), and
loyalty to your firm.
5.0
CONCLUSION
Information systems often change the organization as well as its products, services and operating
procedures, driving organizations into new behavioural patterns. Successfully using information
39
systems to achieve a competitive advantage is challenging and requires precise coordination of

technology, organizations and management.
5.0
SUMMARY
Mangers need to understand certain essential feature of organizations to build and use
information systems successfully. All modern organizations are hierarchical, specialized and
impartial, using explicit routines to maximize efficiency. The introduction of a new information
system will affect organizational structure, goals, and work design, competition between interest
groups, decision making, and day to day behavior.
6.0
1(a)
(b)
2.
5.
What is an organization?
Compare the technical definition of organizations with the behavioral definition?
Identify and describe the features of organizations that help explain differences in
organizations use of information systems?
Describe the major economic theories that help explain how information systems affect
organization?
What is porters competitive forces model? And what does it explain about competitive
advantage?
What are four competitive strategies?
7.0
3.
4.
Cole, G.A. (1986) Management Theory and Practice, (2nd Ed.) London: Menthen.
Laudon, K.C and Laudon, J.P. (2006)Management Information Systems: Managing the Digital
Firm (10th Ed.) Pearson Prentice-Hall Inc,Upper Saddle River, New Jersey.
OBrien, J.A. (2004). Management Information Systems Managing Information Technology in
the Business Enterprise (6th Ed.). McGraw Hill Iriwin, Inc., New York.
40
MODULE 2
UNIT 1: COMPONENTS OF MANAGEMENT INFORMATION SYSTEM
CONTENTS
1.0
2.0
3.0
4.0
5.0
6.0
7.0
Introduction
Objectives
Main Content
3.1
Management
3.2
Information
3.3
System
Conclusion
Summary
References
1.0
INTRODUCTION
To the Managers, Management Information System is an implementation of the organization

systems and procedures
The three components in MIS gives a more complete and focused definition, where system
suggest integration and holistic view, information stands for processed data and management is
the ultimate user, the decision makers.
2.0
OBJECTIVES
At The end of this unit you should be able to:
(1)
State the three components of MIS
(2)
Define the three components of MIS
(a) Management
(b) Information
(c) Systems
3.0
MAIN CONTENT
3.1
MANAGEMENT
Management covers the planning, control and administration of the operations of a concern. The
top management handle planning; the middle management concentrates on controlling; and the
lower management is concerned with actual administration.
The complexity of management is such that the word carries a number of acceptable meanings.
The term management may therefore, be applied in different ways its meaning discernible from
content. McFarland (1974) defines management as that process by which managers create,
direct, maintain and operate purposive organizations through systematic coordinated cooperative
human effort. While according Fayols in (Cole: 1986) he defined management as: to forecast,
plan, organize, command, coordinate and control.
41
In Fayols view to forecast plan mean to examine the future and drawing a plan of action. To
organize means building a structure of both material and human in an organization. To command
means maintaining activities among employees. To control means to ensure everything is in
conformity with the plan and standard.
From the above, it may be deduced that managerial action can direct and control to a great extent
the nature, degree and pace of change within the organization. It also shows that the process of
management is rooted in the action of people at work.
3.2
INFORMATION
Information, in MIS, means the processed data that helps the management in planning,
controlling and operations. Data means all the facts rising out of the operations of the concern.
Information can be recorded as signs, or transmitted as signals. Information is any kind of event
that affects the state of a dynamic system that can interpret the information. Conceptually,
information is the message (utterances or expression) being conveyed. Therefore, in a general
sense, information is knowledge confiscated or received concerning a particular fact or
circumstance. Information cannot be predicted and resolves uncertainty.
3.2.1 Classification by Characteristic
Based on Anthonys classification of management, information used in business for decision
making is generally categorized into three types:
(1)
Strategic information: is concerned with long term policy decisions that define the
objectives of a business and checks how well these objectives are met. For example,
acquiring a new plant, a new product, diversification of business etc. comes under
strategic information.
(2)
Tactical information: is concerned with the information needed for exercising control
over business resources, like budgeting, quality control, service level, inventory level,
productivity level etc.
(3)
Operational Information: Is concerned with plant/business level information and is
used to ensure proper conduction of specific operational tasks as planned/intended.
Various operator specific, machine specific jobs for quality control check comes under
this category.
3.2.2 Classification by Application
In terms of applications, information can be categorized as:
(1)
Planning Information: These are information needed for establishing standard norms
and specifications in an organization. This information is used in strategic, tactical and
operational planning of any activity. Examples of such information are time standards,
design standards.
(2)
Control Information: This information is needed for establishing control over all
business activities through feedback mechanism. This information is used for controlling
attainment, nature and utilization important processes in a system. When such
information reflects a deviation from the established standards, the system should induce
a decision or an action lading to control.
42
(3)
(4)
(5)
(6)
Knowledge information: Knowledge is defined as information about information,

knowledge information is acquired through experience and learning and collected from
archival data and research studies.
Organizational information: organizational information deals with an organizations
environment, culture in the light of its objectives. Karl Weicks organizational
information that emphasizes that an organization reduce equivocality or uncertainty by
collecting, managing and using these information prudently. This information is used by
everybody in the organization; examples of such information are employee and payroll
information.
Functional/operational information: This is operation specific information. For
example, daily schedule in a manufacturing plant that refers to the detailed assignment of
jobs to machines or machine to operate. In a service oriented business, it would be the
duty roster of various Personnel. This information is mostly internal to the organization.
Database Information: Database information construes large quantities of information
that has multiple use and application. Such information is stored, retrieved and managed
to create databases. For example, material specification or supplier information is stored
for multiple users.
3.2.3 Quality of Information

Information is a vital resource for success of any organization. Future of any organization lies in
using and disseminating information wisely. Good quality information placed in right context in
right time tells us about opportunities and problems well in advance.
What is good quality information? Quality is a value that would vary according to the users and
uses of the information.
Acceding to Wang and Strong, following are the dimensions or elements of information quality;
Intrinsic: Accuracy, objectivity, believability, reputation.
Contextual: Relevancy, Value-Added, Timeliness, Completeness, and Amount of

Information.
Representational: Interpretability, format, coherence, compatibility,
Accessibility: Accessibility, Access security.
3.2.4 Uses of Information by Organizations

(1)
Planning: At the planning stage information is the most important ingredient in decision
making. Information at planning stage includes that of business resources, assets,
liabilities, plants and machineries, properties, suppliers, customers, competitors, market
and market dynamics, fiscal policy changes of the government, emerging technologies
etc.
(2)
Recording: Business processing these days involves recording information about each
transaction or event. This is information collected, stored and updated regularly at the
operational level.
(3)
Controlling: A business need to set up an information filter so that only filtered data is
presented to the middle and top management. This ensures efficiency at the operational
level and effectiveness at the tactical and strategic level.
43
(4)
(5)
Measuring: A business measure its performance metrics by collecting and analyzing

sales data, cost of manufacturing and profit earned.
Decision Makin: MIS is primarily concerned with managerial decision making, theory of
organizational behavior and underlying human behavior in organizational context.
Decision making information includes the socio-economic impact of competition,
globalization, democratization and effects of all these factors on organizational structure.
3.3
SYSTEMS
Systems are composed of interrelated parts or sub-systems and the system can only be explained
as a whole. This is known as holism or synergy. Holism states that any whole is more than the
sum of its individual parts.
There are many definitions of the term system. A comprehensive one is that used by the Open
University:
B. System is an assembly of part where:
1.
The parts or components are connected together in an organized way.
2.
it).
3.
4.
1984).
broad and can apply to any of the systems around us, such as: The university, railway, hospital,
manufacturing company etc. A system could be open or closed.
3.3.1 Open Systems
social organizations are open systems. The organization that adapt to changes in the environment
is the key element in an organizations success and indeed its very survival.
3.3.2 Closed Systems
A close system is the one that is isolated from its environment. Close systems are self-contained
44
Inputs
Environment
Conversion or
Process
Outputs
Environment
Fig. 2.1 Model of an Open System
4.0
CONCLUSION
Information is needed to survive in the modern competitive world and information is also needed
to create strong information systems and keeps these systems up to date.
5.0
SUMMARY
The three components in MIS gives a more complete and focused definition, where system
suggests integration and holistic view, information stands for processed data and management is
the ultimate user, the decision makers.
6.0
(1)
(2)
(3)
(4)
What is management?
Identify and describe three classification of information by characteristics?
What is good quality information?
Differentiate between open and closed systems?
7.0
REFERENCES/FURTHER READING
Bagobiri, Y.E. and Kassah, V. (2009) Principles of Management (2nd Ed.) Wonderful press,
Kaduna.
Laudon, K.C and Laudon, J.P. (2006)Management Information Systems: Managing the Digital
Firm (10th Ed.) Pearson Prentice-Hall Inc,Upper Saddle River, New Jersey.
Lucey T (2005) Management Information System (9th Ed) Thomson Learning, High Holborn, 5051 Belford Row, London.
45
MODULE 2
UNIT 2: TYPES OF MANAGEMENT INFORMATION SYSTEMS (MIS)
CONTENTS
1.0
Introduction
2.0
Objectives
3.0
Main Contents
3.1
Decision Support System
3.1.1 Programmed and Non-Programme Decisions
3.1.2 Arbitration of a DSS
3.1.3 Characteristics of DSS
3.1.4 Benefit of DSS
3.1.5 Components of DSS
3.1.6 Classification of DSS
3.1.7 Types of DSS
3.2
Executive Support Systems (ESS)
3.2.1 The Role of ESS in an Organization
3.2.2 Advantage of ESS
3.2.3 Disadvantage of ESS
3.3
Knowledge Management System (KMS)
3.3.1 Purpose of a KMS
3.3.2 Activities in Knowledge Management
3.4
Customer Relationship Management
3.4.1 What is Customer Relationship Management
3.4.2 Types of CRM Systems Software
3.4.3 Benefits of CRM Systems in an Organization
4.0
Conclusion
5.0
Summary
6.0
7.0
References/Further readings
1.0
INTRODUCTION
MIS refers broadly to a computer based system that provides mangers with tools for organizing,
evaluation and efficiently running their departments or organizations.
2.0
Objectives
At the end of the unit you should be able to:
(1)
Identify 4 types of MIS
(2)
Know the main characteristics of Decision Support systems (DSS)
(3)
Define knowledge management systems (KMS)
(4)
Know the merit and demerit of Execution Support System (ESS)
46
3.0
MAIN CONTENT
3.1
DECISION SUPPORT SYSTEMS (DSS)
Decision Support Systems are interactive software-based systems intended to help managers in
decision making by accessing large volume of information generated from various related
information systems involved in organizational business processes, like, office automation
system, transaction system etc. DSS uses the summary information, exceptions, patterns and
trends using the analytical models. Decision support systems helps in decision making but does
not always give a decision itself. The decision maker compile useful information from raw data,
document, personal knowledge, and/or business models to identify and solve problems and make
decisions.
3.1.1 Programmed and Non-Programmed Decisions
There are two types of decisions, programmed and non-programmed decision programmed
decisions are basically automated processes, general routine work where:
These decisions have been taken several times
These decisions follow some guidelines or rules.
For example, selecting a reorder level of inventories is a programmed decisions. Nonprogrammed decisions occur in usual and non-addressed situations, so:
It will be a new decision.
There will not be any rules to follow
These decisions are made based on available information
These decisions are based on the managers discretion, instinct, perception and judgment.
For example, investing in a new technology is a non-programmed decision.
3.1.2
Attributes to a Decision Support Systems (DSS)

Adaptability and flexibility
High level of interactivity
Ease of use
Efficiency and effectiveness
Complete control by decision-makers
Ease of development
Extendibility
Support for modeling and analysis
Support for data access
Standalone, integrated and web-based.
3.1.3 Characteristics of DSS
Support for decision makers in semi structural and unstructured problems.
Support for managers at various managerial levels ranging from top executive to line
managers.
Support for individuals and groups. Less structural problems often requires the
involvement of several individuals from different departments and organizational level.
47
Support for interdependent or sequential decisions.

Support for intelligence, design, choice and implementation.
Support for variety of decision processes and styles
DSS are adaptive over time.
3.1.4 Benefits of DSS
Improve efficiency and speed of decision making activities
Increase the control, competitiveness and the capability of futuristic decision making of
the organization.
Facilities interpersonal communication
Encourages learning or training
Helps automate managerial process.

3.1.5 Components of DSS
1.
Database Management Systems (DBMS): To solve a problem the necessary data may
come from internal or external database. In a organization, internal data are generated by
a system such as Transaction Processing System (TPS) and Management Information
Systems (MIS). External data comes from a variety of sources such as newspaper, online
data services, databases (financial, marketing, human resources).
2.
Model Management System: It stores and accesses models that managers use to make
decisions. Such models are used for designing manufacturing facility, analyzing the
financial health of an organization. Forecasting demand of a product or service etc.
3.1.6 Classification of DSS
There are several ways to classify DSS. Hoi Apple and Whinstone Classify DSS In following:
Text oriented DSS: It contains textually represented information that could have a bearing
on decision. It allows documents to be electronically created, revise and viewed as needed.
Database Oriented DSS: Database plays a major role here; it contains organized and highly
structured data.
Spreadsheet Oriented DSS: It contains information in spreads that allows create, view,
modify procedural knowledge and also instruct the system to execute self-contained
instructions. The most popular tool is Excel and Lotus 1-2-3.
Solver Oriented DSS: It is based on a solder, which is an algorithm or procedure written for
performing certain calculations and particular program type.
Rules Oriented DSS: It follows certain procedures as rules.
3.1.7 Types of DSS
(1)
Status Inquiry System: Helps in taking operational management level or middle level
management decisions, for example, daily schedules of jobs to machines to operators.
(2)
Data Analysis Systems: Needs comparative analysis and makes sue of formula or an
algorithm, for example, cash flow analysis, inventory analysis etc.
(3)
Information Analysis System: In this system data is analyzed and the information
report is generated. For example, sales analysis, accounts receivable systems, market
analysis etc.
48
(4)
(5)
Accounting System: Keep track of accounting and finance related information, for
example, final account, accounts receivables, account payable etc. that keep track of the
major aspects of the business.
Model Based System: Simulation models or optimization models used for decisionmaking used infrequently and creates general guidelines for operation or management.
3.2
EXECUTIVE SUPPORT SYSTEMS (ESS)
Executive support systems are intended to be used by the senior managers directly to provide
support to non-programmed decisions in strategic management.
Laudon (2006) executive support systems help mangers with unstructured and semi-structured
problems by focusing on the information needs of senior management. Combining data from
internal and external sources, ESSP help senior executives monitor organizational performance,
track activities of competitors, spot problems, identify opportunities and forecast trends.
3.2.1 The Role of ESS in the Organization
Use of ESS has migrated down several organizational levels so that the executive and
subordinates are able to look at the same data in the same way. Todays systems try to avoid the
problem of data overload because the data can be filtered or viewed in graphic format (if the user
so chooses). ESS have the ability to drill down, moving a piece of summary data lower and
lower levels of detail. The ability to drill down is very useful not only to senior executives but
also to employees at lower levels of the firm who need to analyze data. ESS are increasingly
being used by employees several levels below the senior executives. This has solved the problem
of members of executives staffs working from different data than the executive, and this is one
of the reasons use of these systems is spreading. Middle management will use the same data in a
somewhat different manner, focusing on their own area of responsibility and emphasizing planversus-actual analysis (variances between forecasts and actual results).
Contemporary ESS Include tools for modeling and analysis. With only a minimum of
experience, most managers find they can use these tools to create graphic comparisons of data by
time, regions, product, price range and so on. (Where as DSS use such tools primarily for
modeling and analysis in a fairly narrow range of decision situations, ESS use them primarily to
provide status information about organizational performance).
3.2.2
3.2.3
-
Advantages of ESS
Easy for upper level executive to use
Ability to analyze trend
Augmentation of managers leadership capabilities
Enhance personal thinking and decision making
Contribution to strategic control flexibility
Enhance organizational competitiveness in the market place.
Increased communication capacity and quality.
Disadvantage of ESS
Functions are limited
Hard to quantify benefits
49
Executive may encounter information overload

System may become slow
Difficult to keep current data
May lead to less reliable and insecure data
Excessive cost for small company.
3.3
KNOWLEDGE MANAGEMENT SYSTEMS (KMS)
Knowledge Management Comprises a range of practices used in an organization to identify,
create, represent, distribute and enable adoption to insight and experience. Such insight and
experience comprise knowledge, either embodied in individual or embedded in organizational
processes and practices.
OBrien (2004) the goal of knowledge management systems is to help knowledge workers
create, organize, and make available important business knowledge, wherever and whenever its
needed in an organization. This includes: processes, procedures, patents, reference works,
formula, best practices, forecasts and fixes.
Knowledge Management System facilitate organizational learning and knowledge creation. They
are designed to provide feedback to knowledge workers, encourage behavior changes by
employees, and significantly improve business performance. As the organizational learning
process continues and its knowledge base expands, the knowledge creating company works to
integrate its knowledge into its business processes, products and services. This helps the
company become a more innovative and agile provider of high-quality products and customers
services, and a formidable competitor in the market place.
3.3.1
-
Purpose of a Knowledge Management System (KMS) are:

Improved performance
Competitive advantage
Innovation
Sharing of knowledge
Integration and
Continues improvement by:o Driving strategy
o Starting newlines of business
o Solving problems faster
o Developing professional skills
o Recruit and retain talent.
3.3.2 Activities in Knowledge Management
Start with the business problem and the business value to be delivered first.
Identify what kind of strategy to pursue to deliver its value and address the KM problem.
Think about the system required from a people and process point of view.
Finally, think about what kind of technical infrastructure are required to support the
people and processes.
Implement system and processes with appropriate change management and iterative
staged release.
50
3.4
CUSTOMERS RELATIONSHIP MANAGEMENT (CRM)
CRM is an enterprise application module that manages a companys interaction with current and
future customers by organizing and coordinating sales and marketing, providing better customer
services along with technical support.
Customer Relationship Management is a comprehensive strategy and process of acquiring,
retaining and partnering with selecting customers to create superior value for the company and
the customer. It involves the integration of marketing, sales, customers service, and the supplychain functions of the organization to achieve greater efficiency and effectiveness in delivering
customer value. (AtulParvayier& Jadish N. SHeth).
3.4.1 What is Customer Relationship Management?
What kinds of information would you need to build and nature strong, long-lasting relationship
with customer? You had want to know exactly who your customers are, how the contact them
whether they are costly to service and sell to, what kinds of products and services they are
interested in, and how much more they spend on your company. If you could, you had want to
make sure you knew each of your customers as well, as if you were running a small-town. And
you had want to make your good customers feel special.
In a small business operating in a neighborhood, it is possible, for business owners and managers
to really know their customers on a personal, face-to-face basis. But in a larger business
operating on a metropolitan, regional, national or even global basis, it is impossible to know
your customer in this intimate way. In these, kind of business there are too many customers and
too many different ways that customers interact with the firm (over the web, the plane, fix, and
face-to-face). It becomes especially difficult to integrate information from all these sources and
to deal with the large numbers of customers. This is where customary relationship management
systems help in capture and integrate customer data from all over the organization consolidate
the data, analyze the data, and then distribute the results to various systems and customer touch
points across the enterprise. A touch point (also known a contact point) is a method of interaction
with the customer, such as telephone, e-mail, customer service desk, conventional mail website,
wireless device, or retail store.
Well-designed CRM systems provides a single enterprise view of customers that is useful for
improving both sales and customer service. Such systems likewise provide customers with a
single view of the company regardless of what touch point the customer uses (see figure 2.2)
51
Sales
Service
* Telephone
* Call center data
* Web sales
* Web self-service
* Retail store sales
* FIeld Sales
Custo
mer
* Wireless data
Marketing
* Campaign data
* Content
* Data Analysis
Fig. 2.2 Customer Relation Management
3.4.2 Types of CRM Systems Software

(1)
Sales Force Automation (SFA)
Sales force automation modules in CRM systems helps sales staff increase their productivity by
focusing efforts on the most profitable customers, those who are good candidates for sales and
services. CRM systems provide sales prospect and contact information, product information,
product configuration capabilities, and sales quote generation capabilities. Such software can
assemble information about a particular customers past purchases to help the sales person make
personalized recommendations. CRM software enables sales, marketing and delivery
departments to easily share customer and prospect information. It increases each sales persons
efficiency in reducing the cost per sale as well as the cost of acquiring new customers and
retaining old ones. CRM software also has capabilities for sales forecasting, territory
management and team selling.
(2)
Customer Service
Customer service modules in CRM systems provide information and tools to increase the
efficiency of call centres, help desks, and customer support staff. They have capabilities for
assigning and managing customer service requests. CRM systems may also include web-based
self-service capabilities. The company websites can be set up to provide inquiring customer
52
personalized support information as well as the option to contact customer service staff by phone
for additional assistance.
(3)
Marketing
CRM systems support direct-marketing campaigns by providing capabilities for capturing
prospects and customer data, for providing product and services information, for qualifying leads
for targeted marketing, and for scheduling and tracking direct marketing mailings or e-mail.
Marketing modules also include tools for analyzing marketing and customer data-identifying
profitable and unprofitable customers, designing products and services to satisfy specify
customer needs and interests, and identifying opportunities for cross-selling.
3.4.3 Benefit of CRM Systems in an Organization
Companies with effective customer relationship management systems realize many benefits,
including increased customer satisfaction, reduced direct-marketing costs, more effective
marketing and lower costs for customer acquisition and retention. Information from CRM
systems increase sales revenue by identifying the most profitable customers and segments for
focused marketing and cross-selling.
4.0
CONCLUSION
The enterprise application provide business-oriented tools supporting electronic commerce,
enterprise communication and collaboration and web-enabled business processes both within a
networked enterprise and with its customers and business partners.
5.0
SUMMARY
Basically, the applications intend to model the business process, i.e., how the entire organization
works. These tools work by displaying, manipulating and storing large amount of data and
automating the business processes with these data.
6.0
(1)
(2)
(3)
(4)
(5)
(6)
(7)
What is Decision Support System (DSS)?
What is the difference between Decision Support Systems (DSS) and Executive Support
Systems (ESS)?
Define and describe the capabilities of an ESS?
How do ESS enhance managerial decision making?
What is knowledge Management Systems (KMS)?
What is Customer Relationship Management? And why is CRM so important?
Identify and describe the three CRM systems software?
7.0
53
Lucey T. (2005) Management Information System, 9th Ed. Thomson learning, High Holborn, 5051 Bedford Row, London.
Technology, 4th Ed. Prentice-Hall Inc, Upper Saddle River, New Jersey. W
Laudon, K.C. and Laudon, J.P. (2006) Management Information Systems: Managing the Digital
Firm (10th Ed.) Pearson Prentice-Hall, Inc, Upper Saddle River, New Jersey.
OBrien, J.A. (2004) Management Information Systems: Managing Information Technology in
the Business Enterprise (6th Ed.) McGraw-Hill/Irwin, Inc. New York.
54
MODULE 2
UNIT 3: INFORMATION TECHNOLOGY AND INFORMATION PROCESSING
1.0
2.0
3.0
3.1
3.2
4.0
5.0
6.0
7.0
Introduction
Objectives
Main Contents
What is a Computer Systems?
The CPU, and Primary/Secondary Storage
3.2.1 The CPU
3.2.2 Primary Storage
3.2.3 Secondary Storage
The Evolution of Computer Hardware
3.3.1 First Generation
3.3.2 Second generation
3.3.3 Third Generation
3.3.4 Fourth Generation
Mainframes, Mini/Microcomputers, Workstations and Super Computers
3.4.1 Mainframes, Minis and Micros
3.4.2 Micro Computers and Workstations.
3.4.3 Supercomputer and Parallel Processing
Input and Output Devices
3.5.1 Input Devices
3.5.2 Output Devices
Information Technology Trends
3.6.1 Multimedia
3.6.2 Superchips
3.6.3 Fifth Generation Computers
Conclusion
Summary
1.0
INTRODUCTION
3.3
3.4
3.5
3.6
In this unit we describe the typical hardware configuration of a computer system, explaining how
computer works and how computer processing power and storage capacity are measured. We
then compare the capabilities of various types of computers and related inputs-output and storage
devices.
2.0
OBJECTIVES
1.
Identify the hardware components in a typical computer system.
2.
Describe how information is represented and processed in a computer system.
3.
Distinguish between generations of computers.
4.
Compare the major input and output devices and approaches to input and processing.
55
5.
Describe information technology trends.
3.0
MAIN CONTENT
3.1
WHAT IS A COMPUTER SYSTEM?
Computer System is an electronic device that stores, retrieves and processes data and can be
programmed with instructions.
Laudon (1996) A contemporary computer system consists of a central processing unit, primary
storage, secondary storage, input devices, output devices and communication devices. The
central processing unit manipulates raw data, into a more useful form and controls the other parts
of the computer system. Primary Storage temporarily stores data and program instructions during
processing, while secondary storage devices (magnetic and optical disk, magnetic tape) store
data and programs when they are not being used in processing. Input devices, such as keyboard
or the computer mouse convert data and instructions into electronic form for input into the
computer. Output devices, such as printers and video display terminals, convert electronic data
produced by the computer system and display it in a firm that people can understand.
Communications devices provide connections between the computer and communication
networks. Buses are paths for transmitting data and signals between the various parts of the
computer system.
3.2
THE CPU AND PRIMARY/SECONDARY STORAGE
The Central Processing Unit is the part of the computer system where the manipulation of
symbols, numbers and letters occurs, and it controls the other parts of the computer system. The
CPU consists of a control unit and an arithmetic-logic unit. Primary storage is located near the
CPU (sometimes called primary memory or main memory), where data and program instructions
are stored temporarily during processing. Three kinds of buses link the CPU, primary storage,
and the other devices in the computer system. The data bus moves data to and from primary
storage. The control bus transmits signals specifying whether to read or write data to or from
a given primary storage address, input device, or output device.
The Primary Storage

Primary storage has three functions. It stores all or part of the program that is being executed.
Primary storage also stores the operating system programs that manage the operations of the
computer. Finally, the primary storage areas holds data that are being used by the program. Data
and program are placed in primary storage before processing, between processing steps, and after
processing has ended, prior to being returned to secondary storage or released as outputs. Internal
primary storage is often called RAM, or random access memory. It is called RAM because it can
directly access any randomly chosen location in the same amount of time. The advantage of
electronic information storage is the ability to store information in a precise known location in
memory and to retrieve it from that same location.
56
The Secondary Storage

In addition to primary storage, where information and programs are stored for immediate
processing, modern computer systems sue other types of storage in order to accomplish their
tasks. Information systems needs to store information outside of the computer in a non-volatile
state (not requiring electric power) and to store volumes of data too large to fit into a computer of
any size today (such as a large payroll or the census data). The relatively long-term storage of
data outside the CPU and primary storage is called secondary storage.
Secondary storage is a non-volatile and retains data even when the computer is turned off. There
are many kinds of secondary storage; the most common are magnetic tape, magnetic disk and
optical flash drives. These media can be transferred large bodies of data rapidly to the CPU. But
since secondary storage require mechanical movement to gain access to the data, in contrast to
primary storage, it is relatively slow.
3.3
THE EVOLUTION OF COMPUTER HARDWARE
There have been four major stages, or computer generations in the evolution of computer
hardware, each distinguished by a different technology for the component that do the computers
processing work. Each generation has dramatically expanded computer processing power and
storage capabilities while simultaneously lowering costs.
1.
2.
3.
First Generation: Vacuum Tube Technology, 1946-1956. The first generation of

computers relied on vacuum tubes to store and process information. These tubes censured
a great deal of power, were short lived, and generated a great deal of heat. Colossal in
size, first generation computers had extremelylimited memory and processing capabilities
and were used for very limited scientific and engineering work. The maximum main
memory size was approximately 2000 bytes (2 kilobytes) with a speed of 10 kilo
instructions per second. Rotating magnetic drums were used for internal storage and
punched cards for external storage. Jobs such as running programmes or printing output
had to be coordinated manually.
Second Generation: Transistors, 1957-1963
In the second generation computer, transistors replaced vacuum tubes as the devices for
storing and processing of information. Transistors were much more stable and reliable
than vacuum tubes, they generated less heat, and they consumed less power. However,
each transistor had to be individually made and wired into a printed circuit board, a slow
tedious process. Magnetic core memory was the primary storage technology of this
period. It was composed of small magnetic doughnuts (about 1mm in diameter) which
could be polarized in one of two directions to represent a bit of data. Wires were strung
along and through these core to both write and read data. This system had to be
assembled by hand and therefore was very expensive. Second generation computers had
up to 32 kilobytes of RAM memory and speeds reaching 200,000 to 300,000 instructions
per second. The enhanced processing power and memory of second generation computers
enabled them to be used more widely for scientific work and for such business tasks as
automating payroll and billing.
Third Generation: Integrated Circuits 1964-1979
Third generation computers relied on integrated circuits, which were made by printing
hundreds and later thousands of tiny transistors on small silicon chips. These devices
57
4.
were called semiconductors. Computers memories expanded to 2 megabytes of RAM

memory, and speeds accelerated to 5 MIPS. This boost to processing power made it
possible to develop special software called operating systems that automated the running
of programs and communications between the CPU, printers and other devices. Third
generation computer technology introduced software that could be used by people
without extensive technical training, making it possible for computers to enlarge their
role in business.
Fourth Generation: Very large scale integrated circuit, 1980-present computers in the
period use very large-scale integrated circuits (VLSIC), which are parked with as many
as 200,000 to over 3 million circuits per chip. Costs have fallen to the point where
desktop and laptop computers are inexpensive and widely available for use in business
and everyday life. The power of computer that once took up a large room can now reside
on a small desktop, laptops and palmtop. Computer memory sides have mushroomed to
over 500 gigabytes in commercial machines; processing speeds have exceeded 200 IPS.
VLSIC technology has fueled a growing movement toward micro miniaturization- the
proliferation of computers that are so small, fast and cheap but they have become ubiquitous. For
instance, many of the intelligent, feature that have made automobile, stereos, toys, watches,
cameras, phones and other equipment easier to use are based on microprocessors.
3.4
MAINFRAMES, MINI/MICRO COMPUTERS, WORKSTATIONS AND

SUPERCOMPUTERS
Computer represents and process data the same way, but there are different classifications. We
can use size and processing speed to categorize contemporary computers as mainframe, mini
computers, microcomputers, work stations and super computers.
3.4.1 Mainframe, Minis and Micros
A main-frame is the largest computer, a power house with massive memory and extremely rapid
processing power. It is used for very large commercial, scientific or military applications where a
computer must handle massive amounts of data or many complicated processes. Largest category
of computer, classified as having 50 megabytes to over 1 gigabytes of RAM. A minicomputer is
a middle-range computer, about the size of an office desk, often used in universities, factories or
research laboratories. Minicomputer middle range with about 10 megabytes to over 1 gigabytes
of RAM.
A microcomputer is one that can be placed on a desktop or carried form room to room.
Microcomputers are used as personal machines as well as in business. Microcomputer desktop or
portable computer classified with 640 kilobytes to 64 megabytes of RAM.
3.4.2 Microcomputers and Workshops
Since workstations are desktop machines like microcomputers, what distinguishes a
microcomputer from a workstation? Workstations have more powerful graphics and mathematic
processing capabilities than microcomputers, and can easily perform several tasks at the same
time. They are practically used by scientists, engineers and other knowledge workers but are
spreading to the financial industry because they have the computer power to simultaneously
analyze portfolios, process securities, and trades and provide financial data and new services.
58
Workstations are especially usefully for computer-aided-design (CAD) and for complex
simulations and modeling. They can represent fully rendered multiple views of a physical
objects, such as an airplane wing, rotate the objects three dimensionally, and present design
history and cost factors. Workstations can easily integrate text and graphics, displaying multiple
tools, applications and types of data simultaneously. Workstations have at least 8 megabytes of
RAM, 32 bit microprocessors, and the capability to perform several computing tasks at the same
time. They come with high-resolution large-screen color monitors for detailed design work and
math co-processors to speed calculations.
3.4.3 Supercomputers and Parallel Processing
A supercomputer is one especially sophisticated and powerful type of computer that is used
primarily for extreme rapid and complex computation with hundreds or thousands of variable
factors. Supercomputers have traditionally been used for classified weapons research, weather
forecasting and petroleum and engineering applications, all of which use complex mathematical
models and simulations. Although extremely expensive, super computers are beginning to
employ in business, as the window in technology demonstrates.
Supercomputers can perform complex and massive computations, almost instantaneously
because they can perform billions and even hundreds of billions of calculations per second-many
times faster than the largest mainframes. Supercomputers do not process one instruction at a time
but instead rely on parallel processing. Parallel processing is multiple processing unit (CPUs)
breakdown a problem into smaller parts and work on it simultaneously. Some experimental
supercomputers use up to 64,000 processors.
3.5
INPUT AND OUTPUT DEVICES
Human beings interact with computer systems largely through input and output devices.
Advances in information system rely not only on the speed and capacity of the CPU but also on
the speed, capacity and design of the input and output devices. Input/output derives are often
called peripheral devices.
3.5.1 Input Devices
The traditional method of data entry has been by keyboarding. Today, most data are entered
directly into the computer using a data entry terminal and they are processed on-line. For
instance, on-line airline reservation and customer information systems have reservation clerks or
sales people enter transactions directly while dealing with the customer, and their systems are
updated immediately. In this manner, a business can eliminate a separate data entry staff and the
associated costs.
The following are some of the input devices or peripherals:
(a)
The Computer Mouse: The point-and-click actions of the computer mouse have made
it an increasingly popular alternative to keyboard and text-based commands. A mouse is a
hand-held device that is usually connected to the computer by a cable or wireless. The
computer user moves the mouse around on a desktop to control the position of the cursor
on a video display screen.
59
(b)
(c)
Touch screen: Are easy to use and are appealing to people who cant use traditional
keyboards. Users can enter limited amounts of data by touching the surface of a
sensitized video display monitor with a finger or a pointer. With colourful graphics,
sound, and simple menus, touch screens allow the user to make selections by touching
specific parts of the screen.
Source Data Automation: Captures data in computer-readable form at the time and
place they are created. Point-of-sale systems, optical bar-code scanners used in
supermarkets and other optical character recognition devices are examples of source data
automation. One of the advantages of source data automation is that the many errors that
occur when people use keyboards to enter data are almost eliminated. Bar code scanners
makesless than 1 error in 10,000 transactions. The principal source data automation
technologies are magnetic ink character recognition, optical character recognition, penbased input, digital scanners, voice input, and sensors.
3.5.2 Output Devices

The major data output devices are cathode ray tube (CRT) terminals (sometimes called video
display terminals, or UDTs and printers
(a)
The CRT is the most popular form of information output in modern computer systems. It
works much like a television picture, tube, with an electronic gun shooting a bean of
electrons to illuminate the pixels on the screen. The more pixels per screen, the higher the
resolution. CRT can be classified as monochrome or colour and by their display
capabilities. Some display only text, whereas others display both text and graphics.
Typical CRTs display 80 columns and 24 lines of text data.
(b)
Printers- produce a printed hard copy of information output. They include impact
printers (a standard typewriter or dot matrix) and non-impact printers (laser, inkjets and
thermal transfer printers). Printers working with microcomputers typically provide dot
matrix print at a speed of 60 to over 400 character per second. Much slower letter-quality
printers operate in the 10 to 50 characters per-second range. In general, impact printers
are slower than non-impact printers. Laser printers for microcomputers can print 4 to 8
pages per minute. Laser printers in large computer centres can print over 100 pages per
minute.
(c)
Other Devices: Microfilm and microfiche have been used to compactly store output as
microscopic filmed images, and they are used mainly by insurance companies or other
firms that need to output and store large number of documents. These media are
cumbersome to search through and will be replaced by optical disk technology.
3.6
INFORMATION TECHNOLOGY TRENDS
Advances in material sciences, manufacturing and concepts of computing promise to maintain
the historic growth pattern in hardware. Over the last 40 years, computing costs have dropped by
a factor of 10 each decade and capacity has increased by a factor of at least 100 each decade.
This momentum will most likely be maintained.
3.6.1 Multimedia
Multimedia is defined as the technologies that facilitates the integration of two or more types of
media, such as text, graphic, sound, voice, full motion video, still video or animation into a
computer based application. From the 1990s through the twenty first century, multimedia will be
60
the foundation of new consumer products and services, such as electronic books and newspapers,
electronic classroom presentation technologies, full motion video conferencing, imaging,
graphics, design tools and video electronic and voice mail
Dagah (2011) multimedia-this is the combination of audio, video, text and images into an
interactive computer environment. The aim of its system is to provide a creative and effective
way of producing, storing and communicating information. It has already become established in
such application areas as sales and marketing, training and education environment. Its
components are not particularly new or different in themselves. What is innovative about
multimedia is the combination of existing media. This comprises of such as, a small desktop
computer, or specialist computer unit to control the system. One or more high resolution
graphics, colour monitors, a stereo audio system, a CD-ROM disk units, video recording
equipment, video cameras and colour graphical printers and scanners.
3.6.2 Superchips
Semiconductor researchers have continued to find means of packaging circuits more densely, so
that millions of transistors can be packed onto a fingernail-sized silicon water.
Dagah (2011) chip-this is a piece of silicon with an electronic circuit embedded in it. However,
the word chip is often used as a slang term that refers to various components inside computer.
It typically describes an integrated circuit, or K, such as central processors or a graphics chip, but
may also refer to other components such as memory module.
While chip is a somewhat ambiguous term, it should not be confused with the term card. For
example, a laptop might have a graphics chips embedded in the moor board. While a desktop
computer may contain a graphics card connected to a PCI or AGP slot. A graphic card may
contain a chip, but the chip cannot contain a card. Similarly, CPU may contain a chip (the
processor) but it may also contain several other computers. Therefore, the term chip can be
used to refer to specific components, but should not to be described multiple components that are
grouped together.
3.6.3 Fifth-Generation Computers
Conventional computers are based on the von Neumann architecture, which processes
information serially, one instruction at a time. In the future, more computers will use parallel
processing and massively parallel processing to blend voice, images and massive pools of data
from diverse sources, using artificial intelligence and intricate mathematical models.
Massively parallel computers have huge networks of processor chips interwoven in complex and
flexible ways. Massively parallels systems are said to have cost and speed advantage of off-theshelf chips. They may be able to accomplish processing work for one-tenth to one-twentieth the
cost traditional mainframe or supercomputers.
Todays supercomputers can perform hundreds of billions of calculations per second. Now
supercomputer makers are racing to harness tens of thousands of microprocessors and memory
chips together to create super-supercomputers that can perform more than a trillion mathematical
calculations each second a teraflop. In the twenty-first century, teraflop machines could support
61
projects such as mapping the surface of planets, designing new computers, or testing the
aerodynamics of supersonic airplanes, where trillions of calculations would be required.
4.0
CONCLUSION
Computers and related information technologies will blend data, images and sound, sending
them coursing through cast networks that process all of them with equal ease. Potentially,
computer technology could be so powerful and integrated into daily experiences it would appear
essentially invisible to the user.
5.0
SUMMARY
The modern computer system has six major components: a central processing unit (CPU), priory
storage, input devices, output devices, secondary storage and communication devices. Computer
technology has gone through four generations with different sizes and processing power.
6.0
1.
2.
3.
4.
5.
6.
7.
8.
What are the components of a contemporary computer system?
Name the major components of CPU?
Describe how information is stored in primary memory?
Describe the major generation of computers and the characteristics?
What is the difference between primary and secondary storage?
List and describe the major input devices?
List and describe the major output devices?
What is multimedia? What technologies are involved?
7.0
REFERENCES/FURTHER READING
Dagah, Stephen (2011) Computer Dictionary (1st Ed) Joyce Graphic Printers and Publishers,
W16, Nasarawa Road, Kaduna.
Technology, 4th Ed. Prentice-Hall Inc., Upper Saddle River, New Jersey. W
Laudon, K.C. and Laudon, J.P. (2006) Management Information Systems: Managing the Digital
Firm (10th Ed.) Pearson Prentice-Hall, Inc., Upper Saddle River, New Jersey.
62
MODULE 2
UNIT 4: MANAGING DATA RESOURCES
CONTENTS
1.0
Introduction
2.0
Objectives
3.0
Main Contents
3.1
Data Resource Management
3.2
Foundation Data Concept
3.3
Types of Databases
3.4
Data Warehouses and Data Mining
3.5
Database Management Approach
3.5.1 Database Management Software
3.5.2 Database Maintenance
3.5.3 Other Major Database Resource Management
3.6
Challenges of Data Resource Management
4.0
Conclusion
5.0
Summary
6.0
7.0
1.0
INTRODUCTION
This unit will show you the managerial implications of using data resource management
technologies and methods to manage an organizations data assets to meet business information
requirements.
2.0
OBJECTIVES
(1)
Know the roles of database management, data administration and data planning play in
managing data as a business resource.
3.0
MAIN CONTENT
3.1
DATA RESOURCE MANAGEMENT
Data are a vital organization resource that need to be managed like other important business
assets. Todays e-business enterprises cannot survival or succeed without quality data about their
internal operations and external environment.
With each online mouse click, either a fresh it of data is created
or already-stored data are retrieved from all those business
websites. All thats on top of the heavy demand for industrialstrength data storage already in use by scores of big corporations.
Whats driving the growth is a crushing imperative for
corporations to analyze every bit of information they can extract
from their huge data warehouses for competitive advantage. That
63
has turned the data storage and management function into a key
strategic role of the information age. (OBrien, 2004).
3.2
FOUNDATION DATA CONCEPTS
A conceptual framework of several levels of data has been devised that differentiates between
different groupings, or elements of data. This data may be logically organized into character,
fields, records, files and databases, just as writing can be organized in letters, words, sentences,
paragraphs and documents.
(1)
Character: The most logical data element is the character, which consists of a single
alphabetic, numeric or other symbol. One might argue that the bit or byte is a mere
elementary data element, but remember that those terms refer to the physical storage
elements provided by the computer hardware. From a users point of view, a character is
the most basic element of data that can be observed and manipulated
(2)
Field: The next higher level of data is the field, or data item. A field consists of a
grouping of characters. For example, the grouping of alphabetic characters in a persons
name forms a name field, and the grouping of numbers in a sales amount forms a sales
amount field. Specifically, a data field represents an attribute (a characteristic or quality)
of some entity (object, person, place, or event). For example, an employees salary is an
attribute that is a typical data field used to describe an entity who is an employee of a
business.
(3)
Record: Related field of data are grouped to form a record. Thus, a record represents a
collection of attributes that describes an entity. An example is the payroll records for a
person, which consists of data fields describing attributes such as the persons name,
social security number and rate of pay. Fixed-length records contain a fixed number of
fixed-length data fields. Variable-length records contain a variable number of fields and
fields length.
(4)
File: A group of related records is a data file, or table. Thus, an employee file would
contain the records of the employee of a firm. Files are frequently classified by the
application for which they are primarily used, such as a payroll file or an inventory file or
the type of data they contain, such as document file or a graphical image files. Files are
also classified by the permanence, for example, a payroll master file versus a payroll
weekly transaction file. A transaction file, therefore would contain records of all
transactions occurring during a period and might be used periodically to update the
permanent records contained in a master file. A history file is an obsolete transaction or
master file retained for backup purposes or for long-term historical storage called archival
storage.
(5)
Database: A database is an integrated collection of logically related data element. A
database consolidates records previously stored in separate files into a common pool of
data elements that provide data for many applications. The data stored in a database are
independent of the application programs using them and of the type of storage devices on
which they are stored.
3.3
TYPES OF DATABASES
Continuing developing in information technology and its business applications have resulted in
the evolution of several major types of databases. Figure 3.4
64
(1)
(2)
(3)
(4)
3.4
Operational Databases: Operational databases store detailed data needed to support the
business processes and operators of a company. They also called subject area databases
(SADB), transaction databases and production databases. Examples are a customer
database, human resource data, inventory database and other databases containing data
generated by business operations. This include database of internet and electronic
commerce activity, such as click stream data describing the online behavior of customers
or visitors to a companys website.
Distributed Databases: Many organizations replicate and distribute copies or parts of
database to network servers at a variety of sites. This distributed databases can reside on
network servers on the World Wide Web, on corporate intranets or extranets, or on other
company networks. Distributed databases may be copies of operational or analytical
databases, hypermedia or discussion databases, or any other type of databases.
Replication and distribution of databases is done to improve database performance and
security. Ensuring that all of the data in an organizations distributed databases are
consistently and concurrently updated is a major challenge of distributed database
management.
External Databases: Access from wealth of information from external databases are
available for a fee from commercial online services, and with or without charge from
many sources on the internet, especially the World Wide Web. Websites provide an
endless variety of hyperlinked pages of multimedia documents in hypermedia databases
for you to access. Data are available in the form of statistics on economic and
demographic activity from statistical data banks. Or you can view or download abstracts
or complete copies of hundreds of newspapers, magazines, newsletters, researchers
papers and other published material and other periodicals from bibliographic and full text
databases.
Hypermedia Databases: The rapid growth of websites on the internet and corporate
intranets and extranets has dramatically increased the use of databases of hypertext and
hypermedia documents. A websites stores such information in a hypermedia databases
consisting of hyperlinked pages of multimedia (text, graphic and photographic images,
video clips, audio segments, and so on).
DATAWAREHOUSES AND DATA MINING
3.4.1 Dataware-house
A dataware-house stores data that have been extracted from the various operational, external, and
other databases of an organization. It is a central source of the data that have been cleaned,
transformed and catalogued so they can be used by managers and other business professionals
for data mining, online analytical processing, and other forms of business analysis, market
research, and decision support. Data warehouses may be subdivided into data marts, which hold
subsets of data from the warehouse that focus on specific aspect of a company, such as a
department or a business process.
34.2 Data Mining
Data mining is a major use of data warehouse databases. In data mining, the data in a data
warehouse are analyzed to reveal hidden patterns and trends in historical business activity. This
65
can be used to help managers make decisions about strategic changes in business operations to
gain competitive advantages in the market place.
Data mining can discover new correlations, patterns and trends in vast amounts of business data
(frequently several terabytes of data), stored in data warehouses.
3.5
THE DATABASE MANAGEMENT APPROACH
The development of databases and database management software is the foundation of modern
methods of managing organizational data. The database management approach consolidates data
records and objective into databases that can be accessed by many different application
programs. In addition, a database management system (DBMS) serves as a software interface
between users and databases.This help users easily access the data in a database. Thus, database
management involves the use of database management software to control how database are
created, interrogated and maintained to provide information needed by end users and their
organizations.For example, customer records and other common types of data are needed for
several different applications in banking, such as check processing, automated teller system,
bank credit cards, savings accounts and installment loan accounting.
3.5.1 Database Management Software
Database management software is a software tool that controls the creation, maintenance and use
of the database of an organization and its users. Database management packages are needed to
create, manage and use the databases of an organization. The three major uses of DBMS are
illustrated in figure 2.3.
Database
Management
Operating
System
Database
Management
System
Creates Database Development

Manager: Database Maintenance
Use:
Database
Interrogation
Application Development
Databases
Application
Programs
Fig. 2.3 Uses of Database Management Software

Source: OBrien, J.A. Management Information Systems, 2004).
3.5.2 Database Maintenance
The database maintenance process is accomplished by transaction processing systems and other
end users applications, with the support of DBMs. End users and information specialists can also
employ various utilities provided by a DBMS for database maintenance. The database of an
organization need to be updated continually to reflect new business transactions and other events.
66
Other miscellaneous changes must also be made to update and correct data, to ensure accuracy of
the data in the databases.
3.5.3 Other Major Database Resource Management Approach are:
(1)
Database Administration: Is an important data resource management function
responsible for the proper use of database management technology. Database
administration includes responsibility for developing and maintaining the organizations
data dictionary, designing and monitoring the performance of databases and enforcing
standards for database use and security. Database administrators and analyst work with
systems developers and end users to provide their expertise to major systems
development projects.
(2)
Data Planning: Is a corporate planning and analysis function that focuses on data
resource management. It includes the responsibility for developing an overall data
architecture for the firms data resources that ties in with the firms strategic missing and
plans, and the objectives and processes of its business unit Data planning is done by
organizations that have made a formal commitment to long-range planning for the
strategic use and management of their data resources.
(3)
Data Administration: Is another vital data resource management function. It involves
administering the collection, storage and dissemination of all types of data in such a way
that data becomes a standardized resources available to all end users in the organization.
The focus of administration is the support of an organizations business processes and
strategic business objectives. Data administration may also include responsibility for
developing policies and setting standards for corporate database design, processing and
security arrangements.
3.6
CHALLENGES OF DATA RESOURCE MANAGEMENT
The data resource management approach provides business managers and professionals with
several important benefits. Database management reduces the duplication of data and integrates
data so that they can be accessed by multiple programs and users. Software is not independent on
the format of the data or the type of secondary storage hardware being used. Business
professionals can use inquiry/response and reporting capabilities to easily obtain information
they need from databases, data warehouses or data marts without complex programming.
Software development is simplified, because programs are not dependent on either the logical
format of the data or their physical storage location. Finally, the integrity and security of data are
increased, since access data and modification of data are controlled by data management
software, data dictionaries and a data administration function.
The challenge of data resource management arises from its technological complexity and the vast
amounts of business data that need to be managed. Developing large databases of complex data
types and installing data warehouse can be difficult and expansive. More hardware capability is
required, since storage requirements for the organizations data, overhead control data, and the
database management or data warehouse software are greater. Finally, if organizations relies on
centralized databases, its vulnerability to errors, fraud and failure is increased. Yet problems of
inconsistency of data can arise if a distributed database approach is used. Therefore, supporting
67
the security and integrity of their databases and data warehouses is a major objective of the data
resource management.
4.0
CONCLUSION
Data resource management is a managerial activity that applies information systems technologies
like database management, data warehousing and other data management tools to the task of
managing an organizations data resources to meet the information needs of their business
stakeholders.
5.0
SUMMARY
Data resource management is a managerial activity that applies information system technology
and management tools to the task of managing an organizations data resources. It includes the
database administration function that focuses on developing and maintaining standards and
controls for an organizations databases. Data administration, support business functions and
strategic organizational objectives.
6.0
(1)
(2)
(3)
(4)
(5)
Define data resource management.
List and describe five foundation data concepts
Differentiate between operational database and distributed databases?
What do we mean by Date warehouse and explain data mining?
What are they challenges of data resource management?
7.0
French, C.S. (2004) Data Processing and Information Technology (10th Ed.) Thomson Learning,
High Holborn House, 50-51 Bedford Row, London.
OBrien, J.A (2004) Management Information Systems: Managing Information Technology in the
Business Enterprise 6th Ed. McGraw-Hill/Irwin, New York.
Laudon, K.C. and Laudon, J.P. (2006) Management Information System: Managing the Digital
Firm (10th Ed.) Pearson Prentice-Hall Inc., upper Saddle River, New Jersey
Laudon, K.C and Laudon, J.P. (1996) Management Information Systems: Organization and
Technology (4th Ed.) Prentice-Hall, Inc. Upper Saddle River, New Jersey.
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MODULE 3
UNIT 1: KNOWLEDGE MANAGEMENT
CONTENTS
1.0 Introduction
2.0 Objectives
3.0 Main Contents
3.1 The Knowledge Management Value Chain
3.2 Types of Knowledge Management Systems
3.3Knowledge Network Systems
3.3.1 Knowledge Workers and Knowledge Work
3.3.2 Requirementsof Knowledge Work Systems
3.4Capturing Knowledge: Expert Systems
4.0 Conclusion
5.0 Summary
6.0 Tutor-Marked Assignment
8.0
References/ Further Readings
1.0 Introduction
This unit will show you the Knowledge Management Value Chain, it types and Knowledge
Network System. The concepts of Knowledge Workers and Knowledge Work, Requirements of
Knowledge Work Systems and Capturing Knowledge/Expert Systems were equally discussed.
2.0 Objectives
1. Know the role of knowledge management and knowledge management programs in
business?
2. What types of systems are used for enterprise-wide knowledge management and how
do they provide value for businesses?
3. What are the major types of knowledge work systems and how do they provide value
for firms?
4. Identifythe business benefits of using intelligent techniques for knowledge
management?
3.0 Main Contents
3.1 The Knowledge Management Value Chain
Knowledge management refers to the set of business processes developed in an organization to
create, store, transfer, and apply knowledge. Knowledge management increases the ability of the
organization to learn from its environment and to incorporate knowledge into its business
processes.
Knowledge management comprises a range of practices used in an organization to identify
,create represent distribute and enable adoption to insight and experience .such insights and
experience comprise knowledge ,either embodied in individual or embedded in organizational
processes and practices.
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Knowledge Acquisition
Organizations acquire knowledge in a number of ways, depending on the type of knowledge they
seek. The first knowledge management systems sought to build corporate repositories of
documents, reports, presentations, and best practices. These efforts have been extended to
include unstructured documents (such as e-mail). In other cases, organizations acquire
knowledge by developing online expert networks so that employees can find the expert in the
company who has the knowledge in his or her head.
Knowledge Storage
Once they are discovered, documents, patterns, and expert rules must be stored so they can be
retrieved and used by employees. Knowledge storage generally involves the creation of a
database. Document management systems that digitize, index, and tag documents according to a
coherent framework are large databases adept at storing collections of documents. Expert
systems also help corporations preserve the knowledge that is acquired by incorporating that
knowledge into organizational processes and culture. Management must support the development
of planned knowledge storage systems, encourage the development of corporate-wide schemas
for indexing documents, and reward employees for taking the time to update and store
documents properly. For instance, it would reward the sales force for submitting names of
prospects to a shared corporate database of prospects where all sales personnel can identify each
prospect and review the stored knowledge.
Knowledge Dissemination
Portals, e-mail, instant messaging, wikis, social networks, and search engines technology have
added to an existing array of collaboration technologies and office systems for sharing calendars,
documents, data, and graphics. Contemporary technology seems to have created a deluge of
information and knowledge. How can managers and employees discover, in a sea of information
and knowledge, that which is really important for their decisions and their work? Here, training
programs, informal networks, and shared management experience communicated through a
supportive culture help managers focus their attention on the important knowledge and
information.
Knowledge Application
Regardless of what type of knowledge management system is involved, knowledge that is not
shared and applied to the practical problems facing firms and managers does not add business
value. To provide a return on investment, organizational knowledge must become a systematic
part of management decision making and become situated in decision-support systems.
Ultimately, new knowledge must be built into a firms business processes and key application
systems, including enterprise applications for managing key internal business processes and
relationships with customers and suppliers. Management supports this process by creating
based on new knowledgenew business practices, new products and services, and new markets
for the firm.
3.2 Types of Knowledge Management Systems
There are essentially three major types of knowledge management systems: enterprise-wide
knowledge management systems, knowledge work systems, and intelligent techniques:
1. Enterprise-wide knowledge management systems are general-purpose firm wide efforts to
collect, store, distribute, and apply digital content and knowledge. These systems include
70
capabilities for searching for information, storing both structured and unstructured data, and
locating employee expertise within the firm. They also include supporting technologies such as
portals, search engines, collaboration tools (e-mail, instant messaging, wikis, blogs, and social
bookmarking), and learning management systems. The development of powerful networked
workstations and software for assisting engineers and scientists in the discovery of new
knowledge has led to the creation of knowledge work systems such as computer-aided design
(CAD), visualization, simulation, and virtual reality systems.
Knowledge work systems (KWS) are specialized systems built for engineers, scientists, and
other knowledge workers charged with discovering and creating new knowledge for a company.
Knowledge management also includes a diverse group of intelligent techniques, such as data
mining, expert systems, neural networks, fuzzy logic, genetic algorithms, and intelligent agents.
These techniques have different objectives, from a focus on discovering knowledge (data mining
and neural networks), to distilling knowledge in the form of rules for a computer program (expert
systems and fuzzy logic), to discovering optimal solutions for problems (genetic algorithms).
ENTERPRISE-WIDE KNOWLEDGE MANAGEMENT SYSTEMS

Firms must deal with at least three kinds of knowledge. Some knowledge exists within the firm
in the form of structured text documents (reports and presentations). Decision makers also need
knowledge that is semi structured, such as e-mail, voice mail, chat room exchanges, videos,
digital pictures, brochures, or bulletin board postings. In still other cases, there is no formal or
digital information of any kind, and the knowledge resides in the heads of employees. Much of
this knowledge is tacit knowledge that is rarely written down. Enterprise-wide knowledge
management systems deal with all three types of knowledge.
ENTERPRISE CONTENT MANAGEMENT SYSTEMS
Businesses today need to organize and manage both structured and semi-structured knowledge
assets. Structured knowledge is explicit knowledge that exists in formal documents, as well as in
formal rules that organizations derive by observing experts and their decision-making behaviors.
But, according to experts, at least 80 percent of an organizations business content is semistructured or unstructuredinformation in folders, messages, memos, proposals, e-mails,
graphics, electronic slide presentations, and even videos created in different formats and stored in
many locations.
Enterprise content management systems help organizations manage both types of information.
They have capabilities for knowledge capture, storage, retrieval, distribution, and preservation to
help firms improve their business processes and decisions. Such systems include corporate
repositories of documents, reports, presentations, and best practices, as well as capabilities for
collecting and organizing semi-structured knowledge such as e-mail. Major enterprise content
management systems also enable users to access external sources of information, such as news
feeds and research, and to communicate via e-mail, chat/instant messaging, discussion groups,
and videoconferencing.
3.3
Knowledge Network Systems
Knowledge network systems, also known as expertise location and management systems,
address the problem that arises when the appropriate knowledge is not in the form of a digital
71
document but instead resides in the memory of expert individuals in the firm. Knowledge
network systems provide an online directory of corporate experts in well-defined knowledge
domains and use communication technologies to make it easy for employees to find the
appropriate expert in a company. Some knowledge network systems go further by systematizing
the solutions developed by experts and then storing the solutions in a knowledge database as a
best practices or frequently asked questions (FAQ) repository. Ask Me provides stand-alone
knowledge network software, and some knowledge networking capabilities can be found in the
leading collaboration software suites.
KNOWLEDGE WORK SYSTEMS
The enterprise-wide knowledge systems we have just described provide a wide range of
capabilities that can be used by many if not all the workers and groups in an organization. Firms
also have specialized systems for knowledge workers to help them create new knowledge and to
ensure that this knowledge is properly integrated into the business.
3.3.1 Knowledge Workers and Knowledge Work

Knowledge workers include researchers, designers, architects, scientists, and engineers who
primarily create knowledge and information for the organization. Knowledge workers usually
have high levels of education and memberships in professional organizations and are often asked
to exercise independent judgment as a routine aspect of their work.
For example, knowledge workers create new products or find ways of improving existing ones.
Knowledge workers perform three key roles that are critical to the organization and to the
managers who work within the organization: Keeping the organization current in knowledge as it
develops in the external worldin technology, science, social thought, and the arts. Serving as
internal consultants regarding the areas of their knowledge, the changes taking place, and
opportunities. Acting as change agents, evaluating, initiating, and promoting change projects
3.3.2 Requirements of Knowledge Work Systems
Most knowledge workers rely on office systems, such as word processors, voice mail, e-mail,
videoconferencing, and scheduling systems, which are designed to increase worker productivity
in the office. However, knowledge workers also require highly specialized knowledge work
systems with powerful graphics, analytical tools, and communications and document
management capabilities. These systems require sufficient computing power to handle the
sophisticated graphics or complex calculations necessary for such knowledge workers as
scientific researchers, product designers, and financial analysts. Because knowledge workers are
so focused on knowledge in the external world, these systems also must give the worker quick
and easy access to external databases. They typically feature user-friendly interfaces that enable
users to perform needed tasks without having to spend a great deal of time learning how to use
the system.
Examples of Knowledge Work Systems
Major knowledge work applications include CAD systems, virtual reality systems for simulation
and modeling, and financial workstations. Computer-aided design (CAD) automates the creation
and revision of designs, using computers and sophisticated graphics software.
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3.4
Capturing Knowledge: Expert Systems
Expert systems are an intelligent technique for capturing tacit knowledge in a very specific and
limited domain of human expertise. These systems capture the knowledge of skilled employees
in the form of a set of rules in a software system that can be used by others in the organization.
The set of rules in the expert system adds to the memory, or stored learning, of the firm.
Expert systems lack the breadth of knowledge and the understanding of fundamental principles
of a human expert. They typically perform very limited tasks that can be performed by
professionals in a few minutes or hours, such as diagnosing a malfunctioning machine or
determining whether to grant credit for a loan. Problems that cannot be solved by human experts
in the same short period of time are far too difficult for an expert system. However, by capturing
human expertise in limited areas, expert systems can provide benefits, helping organizations
make high-quality decisions with fewer people. Today, expert systems are widely used in
business in discrete, highly structured decision making situations.
Intelligent Agents
Intelligent agent technology helps businesses navigate through large amounts of data to locate
and act on information that is considered important. Intelligent agents are software programs that
work in the background without direct human intervention to carry out specific, repetitive, and
predictable tasks for an individual user, business process, or software application. The agent uses
a limited built-in or learned knowledge base to accomplish tasks or make decisions on the users
behalf, such as deleting junk e-mail, scheduling appointments, or traveling over interconnected
networks to find the cheapest airfare to California. There are many intelligent agent applications
today in operating systems, application software, e-mail systems, mobile computing software,
and network tools. For example, the wizards found in Microsoft Office software tools have builtin capabilities to show users how to accomplish various tasks, such as formatting documents or
creating graphs, and to anticipate when users need assistance. Of special interest to business are
intelligent agents for cruising networks, including the Internet, in search of information.
4.0 Conclusion
Knowledge management systems (KMS) support the creation of new knowledge and its
integration into the organization. KMS require easy access to an external knowledge base;
powerful computer hardware that can support software with intensive graphics, analysis,
document management, and communications capabilities; and a user-friendly interface.
5.0 Summary
Knowledge management is a set of processes to create, store, transfer, and apply knowledge in
the organization. Much of a firms value depends on its ability to create and manage knowledge.
Knowledge management promotes organizational learning by increasing the ability of the
organization to learn from its environment and to incorporate knowledge into its business
processes. There are three major types of knowledge management systems: enterprise-wide
knowledge management systems, knowledge work systems, and intelligent techniques.
1. What types of systems are used for enterprise-wide knowledge management and how do
they provide value for businesses?
73
2. What are the major types of knowledge work systems and how do they provide value for
firms?
7.0 References/Further Readings
French, C.S. (2004) Data Processing and Information Technology (10 th Ed.) Thomson Learning,
74
MODULE 3
UNIT 2: ARTIFICIAL INTELLIGENCE
CONTENTS
1.0 Introduction
2.0 Objectives
3.0 Main Contents
3.1 What is an Artificial Intelligence
3.1.1 Domains of Artificial Intelligence
3.1.2 Neural Networks
3.1.3 Fuzzy Logic Systems
3.1.3 Generic Algorithms
3.2 Virtual Reality
3.2.1 Virtual Reality Applications
3.2.2 Virtual Reality Limitations
3.2.3 Intelligent Agents
3.3 Expert Systems
3.3.1 Components of an Expert System
3.3.2Expert System Applications
3.3.3Benefits of Expert Systems
3.3.4Limitations of Expert Systems
4.0 Conclusion
5.0 Summary
1.0 Introduction
This unit introduces artificial intelligence and it major domains, highlights on virtual reality and
how intelligent agents are used in business were discussed.
2.0 Objectives
(1) Define artificial intelligence
(2) Identify three major domains of artificial intelligence
(3) Identify how neural networks, fuzzy logic, virtual reality and intelligent agents can be
used in business
(4) Give examples of several ways expert systems can be used in business decision-making
situations.
3.0 Main Contents
3.1 What is Artificial Intelligence?
Artificial intelligence (AI) is a field of science and technology based on discipline such as
computer science, biology, psychology, linguistics, mathematics and engineering. The
goal of AI is to develop computers that can think, as well as see, hear, talk and feel. A
major thrust of artificial intelligence is the development of computer functions normally
associated with human intelligence, such as reasoning, learning and problem solving
(OBrien, 2004).
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3.1.1 Domains of Artificial Intelligence

The major domains of artificial intelligence research and development are: cognitive
science, robotics, and natural interfaces, though these classifications do overlap each
other, and other classification can be used.
Attributes of Intelligence Behaviour
Think and reason
Use reason to solve problem
Learn or understand from experience
Acquire and apply knowledge
Exhibit creativity and imagination
Deal with complex or perplexing situations
Respond quickly and successfully to new situation
Recognize the relative importance of elements in a situation
Handle ambiguous, incomplete, or erroneous information
Fig. 3.1: Attributes of Intelligent Behaviour
Source: OBrien Management Information Systems 2004
Artificial Intelligence
Cognitive Science
Robotics
Applications
Expert Systems
Learning Systems
Fuzzy Logic
Generic Algorithms
Neural Networks
Intelligent Agents
Natural Interface
Applications
Visual perception
Tactility
Dexterity
Locomotion
Navigation
Application
Natural language
Speech Recognition
Multisensory Interfaces
Virtual Reality
Fig. 3.2: Major Application of Artificial Intelligence

Source: OBrien (2004) Management Information Systems
(1) Cognitive Science: This area of artificial intelligence is based on research in biology,
neurology, psychology, mathematics and many allied disciplines. It focuses on
researching how the human brain works and how humans think and learn. The result of
such research in human information processing are the basis for the development of a
variety of computer and applications in artificial intelligence. Applications in the
cognitive science area of artificial intelligence include the development of expert systems
and other knowledge-based systems that add a knowledge base and some reasoning
capability to information systems. Also included are adaptive learning systems that can
modify their behaviours based on information they acquired as they operate. Fuzzy logic
systems can process data that are incomplete or ambiguous, that is, fuzzy data. Thus, they
can solve unstructured problems with incomplete knowledge by developing approximates
interfaces and answers, as humans do. Neutral network software can learn by processing
76
sample problems and their solutions. As neutral nets start to recognize patterns, they can
begin to program themselves to solve such problems on their own. Generic algorithm
software was Darwinian (survival of the fittest), randomizing, and other mathematics
functions to simulate evolutionary process that can generate increasingly better solutions
to problems. And intelligent agents use expert system and other artificial intelligent
technologies to serve as software surrogates for a variety end user applications.
(2) Robotics: Artificial Intelligent, engineering and psychology are the basic disciplines of
robotics. This technology produces robot machines with computer intelligence and
computer controlled, human like physical capabilities. This area thus includes application
designed to give robots the powers of sight, or visual perception; touch, or tactile
capabilities; dexterity, or skill in handling and manipulation; locomotion or the physical
ability to move over any terrain; and navigation, or the intelligence to properly find ones
way to a destination.
(3) Natural Interfaces: The development of natural interfaces is considered a major area of
artificial intelligence applications and is essential to the natural use of computers by
humans. For example, the development of natural languages and speech recognition are
major thrust of this area of artificial intelligence. Being able to talk to computers and
robots in conversational human languages and have them understand us as easily as we
understand each other is a goal of artificial intelligent. This involves research and
development in linguistic, psychology, computer science, and other disciplines. Other
natural interface research applications include the development of multisensory devices
that use a variety of body movement to operate computers. This is related to the emerging
application area of virtual reality. Virtual reality involves using multisensory humancomputer interfaces that enable human users to experience computer-simulated objects,
spaces, activities, and words as if they actually exist.
3.1.2 Neural Networks
Are computing systems modeled after the brains mesh-like of interconnected processing
elements, called neurons. Of course, neural networks are a lot simpler in architecture (the
human brain is estimated to have over 100 billion neuron brain cells). However, like the
brain, the interconnected processes in a neural network operate in parallel and interact
dynamically with each other. This enables the network to learn from data it process.
That is, it learns to recognize patterns and relationships in the data it processes. The more
data examples it receives as input, the better it can learn to duplicate the results of the
examples it process. Thus, the neural network will change the strengths of the
interconnections between the processing elements in response to changing patterns in the
data it receives and the results that occur.
For example, a neural network can be trained to learn which credit characteristics result
in good or bad loans. Developers of a credit evaluation neural network could provide it
with data from many examples of credit applications and loan results to process, and
opportunities to adjust the signal strength between it neurons. The neural network would
continue to be trained until it demonstrated a high degree of accuracy in correctly
duplicating the result of recent cases. At that point it will be trained enough to begin
making credit evaluations of its own. Neural networks can be implemented on
microcomputers and other traditional computer systems by using software packages that
simulate the activity of a neural network. Specialized neural network coprocessor circuits
board for PCs are also available that provide significantly greater processing power. In
77
addition, special purpose neural net microprocessor chips are being in specific application
areas such as military weapons systems, image process and voice recognition. However,
most business applications depend primary on neural net software packages to
accomplish applications ranging from credit risk assessment to check signature
verification, investment forecasting, data mining, and manufacturing quality control
3.1.3 Fuzzy Logic Systems
Fuzzy logic systems represents a small, but serious and growing application artificial
intelligent in business. Fuzzy logic is a method of reasoning that resembles human
reasoning since its allows for approximate values and inferences (fuzzy logic) and
incomplete or ambiguous data (fuzzy data) instead of relying only on crisp data, such as
binary (yes/no) choices. Fuzzy systems process incomplete data and quickly provide
approximate, but acceptable solutions to problems that are difficult for other methods to
solve.
3.1.4 Generic Algorithms
The use of generic algorithms is a growing application of artificial intelligence. Generic
algorithm software uses Darwinian (survival of the fittest), randomizing and other
mathematical functions to simulate an evolutionary process that can yield increasingly
better solutions to a problem. Generic algorithms were first used to simulate millions of
years in biological, geological and ecosystem evolution in just a few minutes on a
computer. Now generic algorithm software is being used to model a variety of scientific,
technical and business processes.
Generic algorithms are especially useful for situation in which thousand solutions are
possible and must be evaluated to produce an optimal solution. Generic algorithm
software uses sets of mathematical process rules (algorithms) that specify how
combinations of process components or steps are to be formed. This may involve trying
random process combinations (mutation), combining parts of several goal processes
(crossover) and selecting good sets of process and discarding poor ones (selection) in
order to generate increasingly better solutions.
3.2 Virtual Reality
Virtual reality (VR) is a computer simulated reality. Virtual reality is a fast-growing area
of artificial intelligence that had its origins in efforts to build more natural, realistic,
multisensory human-computer interfaces. So virtual reality relies on multisensory
input/output devices such as tracking headsets with video goggles and stereo earphones, a
data glove or jumpsuit with fiber-optic sensors that track your body movement or your
feet. Then you can experience computer simulated virtual worlds three dimensionally
through sight, sound and touch. Thus, virtual reality is also called telepresence. For
example, you can enter a computer-generated world, look around and observe its
contents, pick up and move objects, and move around in it at will. This, virtual reality
allows you to interact with computer-simulated objects, entities, and environments as if
they actually exist.
3.2.1 Virtual Reality Applications
Current applications of virtual reality are wide ranging and include computer-aided
design (CAD), medical diagnostics and treatments, scientific experimentation in many
physical and biological sciences, flight simulation for training pilots and astronauts
products demonstration, employee training and entertainment, especially 3D video arcade
78
games. CAD is the most widely used industrial virtual reality application. It enables the
architects and other designers to design and test electronic 3-D models of products and
structures by entering the models themselves and examining, touching and manipulating
sections and parts from all angles. This scientific visualization capability is also used by
pharmaceutical and biotechnology firms to develop and observe the behavior of
computerized models of new drugs and materials, and by medical researchers to develop
ways for physicians to enter and examine a virtual reality of patients body.
Virtual reality designers are creating everything from virtual weather patterns and virtual
wind tunnels to virtual cities and virtual securities markets. For example, by converting
stock market and other financial data into three-dimensional graphic form, securities
analysts can use virtual reality systems to more rapidly observe and identify trends and
exceptions in financial performance. Also promising are applications in information
technology itself. This includes the development of 3-D models of telecommunications
network and databases. These virtual graphical representation of network and databases
make it easier for IS specialists to visualize the structure and relationship of an
organizations telecommunications networks and corporate databases, thus improving
their design and maintenance.
Virtual reality telepresence when users who can be anywhere in the world use virtual
reality systems to work alone or together at a remote site. Typically, this involves using a
virtual reality system to enhance the sight and touch of a human who is remotely
manipulating equipment to accomplish a task. Examples range from virtual surgery,
where surgeon and patient may be on either side of the globe, to be remote use of
equipment in hazardous environments such as chemical plants or nuclear reactors.
3.2.2 Virtual Reality Limitations
The use of virtual reality seems limited only by performance and cost of its technology.
For example, some virtual reality develop cyber sickness, such as eyestrain and motion
sickness, from performance problems in the realism of virtual reality system. The cost of
virtual reality system is another limitation. A virtual reality system consisting of a headset
with goggles and headphones, a fiber-optic data glove, motion sensing devices, and a
powerful engineering workstation with top quality 3-D modeling software. If your want
less cumbersome devices, more realistic displays, and a more natural sense of motion in
your virtual reality world, costs can escalate into several hundred thousand dollars. Cave
Automatic Virtual Reality Environments (CAVEs), virtual reality rooms that immerse you
in a virtual reality experience, cost several million dollars to set up.
However, the cost of highly realistic multisensory virtual reality systems is dropping each
year. In the meantime some virtual reality developers are using the Virtual Reality
Modeling Language (VRML) to develop 3-D hypermedia graphics and animation
products that provide a primitive virtual reality for PC users on the World Wide Web and
corporate intranets.
3.2.3 Intelligent Agents
Intelligent agents are growing in popularity as a way to use artificial intelligence routines
in software to help users accomplish many kinds of tasks in e-business and e-commerce.
An intelligent agent is a software surrogate for an end user or a process that fulfills a
stated need or activity. An intelligent agent uses its buses built in and learned knowledge
base about a person or process to make decision and accomplish tasks in a way that
fulfills the intentions of a user. Thus, intelligent agents (also called software robots or
79
3.3
(1)
(a)
(b)
(2)
bots) are special purpose knowledge-based information systems that accomplish

specific tasks for users.
One of the most well-known uses of intelligent agents in the wizards found in Microsoft
Office and other software suites. These wizards are built-in capabilities that can analyze
how an end user is using a software package and offer suggestions on how to complete
various tasks. Thus, wizard might help you change document margins, format
spreadsheet cells, query a database, or construct a graph. Wizards and other software
agents are also designed to adjust to your way of using a software package so that they
can anticipate when you will need their assistance.
The use of intelligent agent is growing rapidly as a way to simplify software use, search
websites on the internet and corporate intranets and help customers do comparison
shopping among the many e-commerce sites on the web. Intelligent agents are becoming
necessary as software packages become more sophisticated and as information sources
and e-commerce alternatives proliferate exponentially. In fact, some commentators
forecast that much of the future of computing will consist of intelligent agents performing
their work for users. So instead of using agents to help us accomplish computing tasks,
we will be managing the performance of intelligent agents as they perform computing
tasks for us.
Expert Systems
One of the most practical and widely implemented applications of artificial intelligence in
business is the development of expert systems and other knowledge-based information
systems. A knowledge-based information systems (KBIS) adds a knowledge based to the
major components found in other types of computer-based information systems. An
expert systems (ES) is a knowledge-based information systems that uses it knowledge
about a specific, complex application area to act as an expert consultant to end users.
Expert systems provide answers to questions in a very specific problem are by making
human like inferences about knowledge contained in a specialized knowledge base. So
expert system can provide decision support to end users in the form of advice from an
expert consultant in a specific problem area.
3.3.1 Components of an Expert System
The components of an expert system include a knowledge-based and software modules
that perform inferences on the knowledge and communicate answers to a users
questions.
The following components are:
Knowledge-base: The knowledge base of an expert system contains
Facts about a specific area (for example, John is an analyst) and
Heuristics (rules of thumb) that express the reasoning procedures of an expert on the
subject (for example, IF John is an analyst, THEN he needs a workstation). There are
many ways that such knowledge is represented in expert systems. Examples are rulebase, fame-based, object-based, and case-based methods of knowledge representation.
See Figure 5.3
Software Resources: An expert system software package contains an inference engine
and other programs for refining knowledge and communicating with users. The inference
engine program processes the knowledge (such as rules and facts) related to a specific
problem. It then makes associations and inferences resulting in recommended courses of
action for a user. User interface programs for communicating with end users are also
80
needed, including an explanation program to explain the reasoning process to a user if

requested.
3.3.2 Expert System Applications
Using an expert system involves an interactive, computer-based session in which the
solution to a problem is explored, with the export system acting as a consultant to an end
user. The expert system asks question of the user, searches its knowledge base for facts
and rules or other knowledge, explain its reasoning process when asked, and give expert
advice to the user in the subject area being explored.
Expert systems are being used for different types of applications, and they variety of
application is expected to continue to increase. However, you should realize that expert
systems typically accomplish one or more generic uses. Figure 5.4 outline give generic
categories of expert system activities with specific example of actual expert system
applications. As you can see expert systems are being used in many different fields,
including medicine, engineering, the physical sciences and business. Expert system now
help diagnose illness, search for minerals, analyze compound, recommend repairs, and do
financial planning; so from a strategic business standpoint, expert systems can and are
being used to improve every step of the product cycle of a business from finding
customers to shipping products to providing customer service.
3.3.3 Benefits of Expert Systems
An expert system captures the expertise of an expert or group of experts in a computerbased information system. Thus, it can outperform a single human expert in many
problem situations. That is because an expert system faster and more consistent, can have
the knowledge of several experts, and does not get tired or distorted by overwork or
stress. Expert system also helps preserve and reproduce the knowledge of experts. They
allow the company to preserve the expertise of an expert before she leaves the
organization. This expertise can then be shared by reproducing the software and
knowledge base of the expert system. This allows novices to be trained and supported by
copies of an expert system distributed throughout an organization. Finally, expert system
can have the same competitive advantages as other types of information technology; that
is, the effective use of expert systems can allow a firm of significantly improve the
efficiency of its business processes, or produce new knowledge based products and
services.
3.3.4 Limitations of Expert Systems
The major limitation of expert systems arises from their limited focus, inability to learn,
maintenance problems and developmental cost. Expert systems excel only in solving
specific types of problems in a limited of knowledge. They fail miserably in solving
problems requiring a broad knowledge-based and subjective problem solving. They do
well with specific types of operational or analytical tasks, but falter at subjective
managerial decision making. For example, an expert system might help a financial
consultant develop alternative investment recommendations for a client. But it could not
adequately evaluate the nuances of current political, economic and societal developments
or the personal dynamics of a session with a client. Expert systems may also be difficult
and costly to develop and maintain properly. The costs of knowledge engineers, lost
expert time, and hardware and software resources may be too high to offset the benefit
expected from some applications. Also, expert system cant maintain themselves.
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4.0 Conclusion
Artificial intelligence technology enables extraordinary array of applications that forge
new connections among people, computers, knowledge and the physical world.
5.0 Summary
The major application domains of artificial intelligence (AI) include a variety of
applications in cognitive science, robotics, and natural interfaces. The goal of artificial
intelligence is development of computer functions normally associated human physical
and mental capabilities.
(1) Can computer think? Will they ever be able to? Explain why or why not?
(2) What are some of the limitations or danger you see in the use of Artificial Intelligence
(AI) technologies such as expert systems, virtual reality and intelligent agents?
(3) What are the benefits and limitations of business intelligence software?
Lancaster, F. W. (Frederick Wilfred) & Beth .S. (1997) Technology and Management in Library
and Information Services. Champaign, Ill.: University of IllinoisGraduate School of
Library and Information Science.
Laudon, K. C. and Laudon, J. P. (2001). Essentials of ManagementInformationSystems:
Transforming Business and Management. Upper Saddle River,N.J.: Prentice
Hall.
O'Brien, J. A. (2002)Management Information Systems: Managing IT in the E-Business
Enterprise, 5th ed. Boston: Irwin McGraw-Hill.
Osborne, L. N. and Margaret .N. (2000) Systems Analysis for Librarians and
Information Professionals. 2nd ed. Englewood, Colo.: Libraries Unlimited.
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MODULE 3
UNIT 3: INFORMATION SYSTEMS IN GLOBAL BUSINESS TODAY
CONTENTS
1.0 Introduction
2.0 Objectives
3.0 Main Contents
3.1
The Role of Information Systems in Business Today
3.1.1 Whats New in Management Information Systems?
3.2
Strategic Business Objectives of Information Systems
3.3
Perspective on Information Systems
3.3.1 What is an Information System?
3.4
Dimensions of Information Systems
3.5
Contemporary Approaches to Information Systems
4.0 Conclusion
5.0 Summary
7.0 References/ Further Readings
1.0 Introduction
Information systems transform raw data into useful information through three basic activities:
input, processing, and output.From a technical perspective, an information system collects,
stores, and disseminates information from an organizations environment and internal operations
to support organizational functions and decision making, communication, coordination, control,
analysis, and visualization.
2.0
Objectives
1. Know how information systems transform business
2. Why are information systems so essential for running and managing a business today?
3. What exactly is an information system? How does it work? What are its management,
organization, and technology components?
4. Identify five strategic business objectives
5. What is a socio-technical systems perspective?
3.0 Main Content
3.1
The Role of Information Systems in Business Today
As managers, most of you will work for firms that are intensively using information systems and
making large investments in information technology. You will certainly want to know how to
invest this money wisely. If you make wise choices, your firm can outperform competitors.
If you make poor choices, you will be wasting valuable capital. This unit is dedicated to helping
you make wise decisions about information technology and information systems.
3.1.1 Whats New in Management Information Systems?
What makes management information systems the most exciting topic in business is the
continual change in technology, management use of the technology, and the impact on business
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success. New businesses and industries appear, old ones decline, and successful firms are those
who learn how to use the new technologies
In the technology area there are three interrelated changes: (1) the emerging mobile digital
platform, (2) the growth of online software as a service, and (3) the growth in cloud computing
where more and more business software runs over the Internet.
IPhones, iPads, BlackBerrys, and Web-surfing netbooks are not just gadgets or entertainment
outlets. They represent new emerging computing platforms based on an array of new hardware
and software technologies. More and more business computing is moving from PCs and desktop
machines to these mobile devices. Managers are increasingly using these devices to coordinate
work, communicate with employees, and provide information for decision making. We call these
developments the emerging mobile digital platform. Managers routinely use so-called Web
2.0 technologies like social networking, collaboration tools, and wikis in order to make better,
faster decisions.
The strength of cloud computing and the growth of the mobile digital platform allow
organizations to rely more on telework, remote work, and distributed decision making. This same
platform means firms can outsource more work, and rely on markets (rather than employees) to
build value. It also means that firms can collaborate with suppliers and customers to create new
products, or make existing products more efficiently.
3.2
Strategic Business Objectives of Information Systems
What makes information systems so essential today? Why are businesses investing so much in
information systems and technologies?
Information systems are essential for conducting day-to-day business in most advanced
countries, as well as achieving strategic business objectives.
Specifically, business firms invest heavily in information systems to achieve six strategic
business objectives: operational excellence; new products, services, and business models;
customer and supplier intimacy; improved decision making; competitive advantage; and
survival.
1.
Operational Excellence
Businesses continuously seek to improve the efficiency of their operations in order to achieve
higher profitability. Information systems and technologies are some of the most important tools
available to managers for achieving higher levels of efficiency and productivity in business
operations, especially when coupled with changes in business practices and management
behavior. Walmart, the largest retailer on earth, exemplifies the power of information systems
coupled with brilliant business practices and supportive management to achieve world-class
operational efficiency. In fiscal year 2010, Walmart achieved $408 billion in salesnearly onetenth of retail sales in the United Statesin large part because of its Retail Link system, which
digitally links its suppliers to every one of Walmarts stores. As soon as a customer purchases an
item, the supplier monitoring the item knows to ship a replacement to the shelf.
2.
New Products, Services, and Business Models
Information systems and technologies are a major enabling tool for firms to create new products
and services, as well as entirely new business models.
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A business model describes how a company produces, delivers, and sells a product or service to
create wealth.
3.
Customer and Supplier Intimacy
When a business really knows its customers, and serves them well, the customers generally
respond by returning and purchasing more.
This raises revenues and profits. Likewise with suppliers: the more a business engages its
suppliers, the better the suppliers can provide vital inputs. This lowers costs. How to really know
your customers, or suppliers, is a central problem for businesses with millions of offline and
online customers.
4.
Improved Decision Making
Many business managers operate in an information fog bank, never really having the right
information at the right time to make an informed decision. Instead, managers rely on forecasts,
best guesses, and luck. The result is over or underproduction of goods and services,
misallocation of resources, and poor response times. These poor outcomes raise costs and lose
customers. In the past decade, information systems and technologies have made it possible for
managers to use real-time data from the marketplace when making decisions.
5.
Competitive Advantage
When firms achieve one or more of these business objectivesoperational excellence; new
products, services, and business models; customer/supplier intimacy; and improved decision
makingchances are they have already achieved a competitive advantage. Doing things better
than your competitors, charging less for superior products, and responding to customers and
suppliers in real time all add up to higher sales and higher profits that your competitors cannot
match.
6.
Survival
Business firms also invest in information systems and technologies because they are necessities
of doing business. Sometimes these necessities are driven by industry-level changes. For
instance, after Citibank introduced the first automated teller machines (ATMs) in the New York
region in 1977 to attract customers through higher service levels, its competitors rushed to
provide ATMs to their customers to keep up with Citibank. Today, virtually all banks in Nigeria
have ATMs and link to national and international ATM networks, such as CIRRUS. Providing
ATM services to retail banking customers is simply a requirement of being in and surviving in
the retail banking business.
Firms turn to information systems and technologies to provide the capability to respond to these
challenges.
3.3
Perspective on Information Systems
So far weve used information systems and technologies informally in this unit without defining
the terms. Information technology (IT) consists of all the hardware and software that a firm
needs to use in order to achieve its business objectives. This includes not only computer
machines, storage devices, and handheld mobile devices, but also software, such as the Windows
or Linux operating systems, the Microsoft Office desktop productivity suite, and the many
thousands of computer programs that can be found in a typical large firm. Information systems
are more complex and can be best be understood by looking at them from both a technology and
a business perspective.
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3.3.1 What is an Information System?

An information system can be defined technically as a set of interrelated components that collect
(or retrieve), process, store, and distribute information to support decision making and control in
an organization. In addition to supporting decision making, coordination, and control,
information systems may also help managers and workers analyze problems, visualize complex
subjects, and create new products. Information systems contain information about significant
people, places, and things within the organization or in the environment surrounding it.
Three activities in an information system produce the information that organizations need to
make decisions, control operations, analyze problems, and create new products or services.
These activities are input, processing, and output. Input captures or collects raw data from within
the organization or from its external environment. Processing converts this raw input into a
meaningful form. Output transfers the processed information to the people who will use it or to
the activities for which it will be used.
Information systems also require feedback, which is output that is returned to appropriate
members of the organization to help them evaluate or correct the input stage.
Although computer-based information systems use computer technology to process raw data into
meaningful information, there is a sharp distinction between a computer and a computer program
on the one hand, and an information system on the other. Electronic computers and related
software programs are the technical foundation, the tools and materials, of modern information
systems. Computers provide the equipment for storing and processing information. Computer
programs, or software, are sets of operating instructions that direct and control computer
processing. Knowing how computers and computer programs work is important in designing
solutions to organizational problems, but computers are only part of an information system.
An information system contains information about an organization and its surrounding
environment. Three basic activitiesinput, processing, and outputproduce the information
organizations need. Feedback is output returned to appropriate people or activities in the
organization to evaluate and refine the input. Environmental actors, such as customers, suppliers,
competitors, stockholders, and regulatory agencies, interact with the organization and its
information systems.
3.4
Dimensions of Information Systems
To fully understand information systems, you must understand the broader organization,
management, and information technology dimensions of systems (see Figure 3.3) and their
power to provide solutions to challenges and problems in the business environment. We refer to
this broader understanding of information systems, which encompasses an understanding of the
management and organizational dimensions of systems as well as the technical dimensions of
systems, as information systems literacy. Computer literacy, in contrast, focuses primarily on
knowledge of information technology. The field of management information systems (MIS) tries
to achieve this broader information systems literacy. MIS deals with behavioral issues as well as
technical issues surrounding the development, use, and impact of information systems used by
managers and employees in the firm. Lets examine each of the dimensions of information
systemsorganizations, management, and information technology
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Fig. 3.3 Information Systems Cycle

Source: Laudon (2012)
Using information systems effectively requires an understanding of the organization,
management, and information technology shaping the systems. An information system creates
value for the firm as an organizational and management solution to challenges posed by the
environment.
1. Organizations
Information systems are an integral part of organizations. Indeed, for some companies, such as
credit reporting firms, there would be no business without an information system. The key
elements of an organization are its people, structure, business processes, politics, and culture.
Organizations have a structure that is composed of different levels and specialties. Their
structures reveal a clear-cut division of labor. Authority and responsibility in a business firm are
organized as a hierarchy, or a pyramid structure. The upper levels of the hierarchy consist of
managerial, professional, and technical employees, whereas the lower levels consist of
operational personnel.
Senior management makes long-range strategic decisions about products and services as well as
ensures financial performance of the firm. Middle management carries out the programs and
plans of senior management and operational management is responsible for monitoring the daily
activities of the business. Knowledge workers, such as engineers, scientists, or architects, design
products or services and create new knowledge for the firm, whereas data workers, such as
secretaries or clerks, assist with scheduling and communications at all levels of the firm.
Production or service workers actually produce the product and deliver the service.
An organization coordinates work through its hierarchy and through its business processes,
which are logically related tasks and behaviors for accomplishing work.
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2. Management
Managements job is to make sense out of the many situations faced by organizations, make
decisions, and formulate action plans to solve organizational problems. Managers perceive
business challenges in the environment; they set the organizational strategy for responding to
those challenges; and they allocate the human and financial resources to coordinate the work and
achieve success. Information technology can play a powerful role in helping managers design
and deliver new products and services and redirecting and redesigning their organizations.
3. Information Technology
Information technology is one of many tools managers use to cope with change.
Computer hardware- is the physical equipment used for input, processing, and output activities in
an information system. It consists of the following: computers of various sizes and shapes
(including mobile handheld devices); various input, output, and storage devices; and
telecommunications devices that link computers together.
Computer software- consists of the detailed, preprogrammed instructions that control and
coordinate the computer hardware components in an information system.
Data management technology- consists of the software governing the organization of data on
physical storage media.
Networking and telecommunications technology- consisting of both physical devices and
software links the various pieces of hardware and transfers data from one physical location to
another. Computers and communications equipment can be connected in networks for sharing
voice, data, images, sound, and video.
A network- links two or more computers to share data or resources, such as a printer.
The worlds largest and most widely used network is the Internet.
The Internet- is a global network of networks that uses universal standards to connect millions
of different networks with more than 1.4 billion users in over 230 countries around the world
(Laudon, 2012).
The World Wide Web- is a service provided by the Internet that uses universally accepted
standards for storing, retrieving, formatting, and displaying information in a page format on the
Internet. Web pages contain text, graphics, animations, sound, and video and are linked to other
Web pages.
All of these technologies, along with the people required to run and manage them, represent
resources that can be shared throughout the organization and constitute the firms information
technology (IT) infrastructure.
The IT infrastructure provides the foundation, or platform, on which the firm can build its
specific information systems. Each organization must carefully design and manage its IT
infrastructure so that it has the set of technology services it needs for the work it wants to
accomplish with information systems.
3.5
Contemporary Approaches to Information Systems
The study of information systems is a multidisciplinary field. No single theory or perspective
dominates. Figure 3.4 illustrates the major disciplines that contribute problems, issues, and
solutions in the study of information systems. In general, the field can be divided into technical
and behavioral approaches. Information systems are socio-technical systems. Though they are
composed of machines, devices, and hard physical technology, they require substantial social,
organizational, and intellectual investments to make them work properly.
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Fig. 3.4 Contemporary Approaches to Information Systems

Source: Laudon (2012)
The study of information systems deals with issues and insights contributed from technical and
behavioral disciplines.
1. Technical Approach
The technical approach to information systems emphasizes mathematically based models to
study information systems, as well as the physical technology and formal capabilities of these
systems. The disciplines that contribute to the technical approach are computer science,
management science, and operations research.
Computer science is concerned with establishing theories of computability, methods of
computation, and methods of efficient data storage and access.
Management science emphasizes the development of models for decision-making and
management practices. Operations research focuses on mathematical techniques for optimizing
selected parameters of organizations, such as transportation, inventory control, and transaction
costs.
2. Behavioral Approach
An important part of the information systems field is concerned with behavioral issues that arise
in the development and long-term maintenance of information systems. Issues such as strategic
business integration, design, implementation, utilization, and management cannot be explored
usefully with the models used in the technical approach. Other behavioral disciplines contribute
important concepts and methods. For instance, sociologists study information systems with an
eye toward how groups and organizations shape the development of systems and also how
systems affect individuals, groups, and organizations. Psychologists study information systems
with an interest in how human decision makers perceive and use formal information. Economists
study information systems with an interest in understanding the production of digital goods, the
89
dynamics of digital markets, and how new information systems change the control and cost
structures within the firm. The behavioral approach does not ignore technology. Indeed,
information systems technology is often the stimulus for a behavioral problem or issue.
But the focus of this approach is generally not on technical solutions. Instead, it concentrates on
changes in attitudes, management and organizational policy, and behavior.
3. Sociotechnical Approach
Throughout this course you will find a rich story with four main actors: suppliers (the
technologists); business firms making investments and seeking to obtain value from the
technology; managers and employees seeking to achieve business value (and other goals); and
the contemporary legal, social, and cultural context (the firms environment). Together these
actors produce what we call management information systems. The study of management
information systems (MIS) arose to focus on the use of computer-based information systems in
business firms and government agencies. MIS combines the work of computer science,
management science, and operations research with a practical orientation toward developing
system solutions to real-world problems and managing information technology resources. It is
also concerned with behavioral issues surrounding the development, use, and impact of
information systems, which are typically discussed in the fields of sociology, economics, and
psychology.
4.0 Conclusion
Information systems are a foundation for conducting business today. In many industries, survival
and the ability to achieve strategic business goals are difficult without extensive use of
information technology.
5.0 Summary
E-mail, online conferencing, and cell phones have become essential tools for conducting
business. Information systems are the foundation of fast-paced supply chains. The Internet
allows many businesses to buy, sell, advertise, and solicit customer feedback online.
Organizations are trying to become more competitive and efficient by digitally enabling their
core business processes and evolving into digital firms. New information system trends include
the emerging mobile digital platform, online software as a service, and cloud computing.
6.0
1. How are information systems transforming business?
2. Describe how information systems have changed the way businesses operate and their
products and services?
3. Identify three major new information system trends?
4. Why are information systems so essential for running and managing a business today?
5. What exactly is an information system? How does it work? What are its management,
organization, and technology components?
6. List and describe the organizational, management, and technology dimensions of
information systems?
7. Briefly explain socio-technical, technical and behavioural systems approach?
90

Lancaster, F. W. (Frederick Wilfred) & Beth .S. (1997)Technology and Management in Library
Hall.
91
MODULE 3
UNIT 4: ELECTRONIC COMMERCE
CONTENTS
1.0 Introduction
2.0Objectives
3.0Main Contents
3.1 E-Commerce Today
3.1.1 Why E-Commerce Is Different
3.2
Key Concepts in E-Commerce: Digital Markets and Digital Goods ina Global
Marketplace
3.3
E-Commerce: Business and Technology
3.3.1 E-Commerce Business Models
3.4
Web 2.0: Social Networking andthe Wisdom of Crowds
3.4.1 E-Commerce Marketing
3.5
The Mobile Digital Platform and Mobile E-Commerce
3.5.1 M-Commerce Services and Applications
4.0 Conclusion
5.0 Summary
1.Introduction
This unit discusses E-Commerce which is all about using Computing and Information
Technologies to transact business, while M-Commerce is all about the use of mobile devices as
primary device for accessing the Internet for business purpose.
2.0 Objectives
1. What are the unique features of e-commerce, digital markets, and digital goods?
2. What are the principal e-commerce business and revenue models?
3. How has e-commerce transformed marketing?
4. How has e-commerce affected business-to-business transactions?
3.0 Main Contents
3.1
What is E-Commerce
E-commerce refers to the use of the Internet and the Web to transact business. More formally, ecommerce is about digitally enabled commercial transactions between and among organizations
and individuals. For the most part, this means transactions that occur over the Internet and the
Web. Commercial transactions involve the exchange of value (e.g., money) across organizational
or individual boundaries in return for products and services.
3.1.1 Why E-Commerce is Different
Why has e-commerce grown so rapidly? The answer lies in the unique nature of the Internet and
the Web. Simply put, the Internet and e-commerce technologies are much more rich and
powerful than previous technology revolutions like radio, television, and the telephone. Table 3.1
describes the unique features of the Internet and Web as a commercial medium. Lets explore
each of these unique features in more detail.
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Ubiquity
In traditional commerce, a marketplace is a physical place, such as a retail store, that you visit to
transact business. E-commerce is ubiquitous, meaning that is it available just about everywhere,
at all times. It makes it possible to shop from your desktop, at home, at work, or even from your
car, using mobile commerce.
Global Reach
E-commerce technology permits commercial transactions to cross cultural and national
boundaries far more conveniently and cost effectively than is true in traditional commerce.
Universal Standards
One strikingly unusual feature of e-commerce technologies is that the technical standards of the
Internet and, therefore, the technical standards for conducting e-commerce are universal
standards. They are shared by all nations around the world and enable any computer to link with
any other computer regardless of the technology platform each is using.
Richness
Information richness refers to the complexity and content of a message. Traditional markets,
national sales forces, and small retail stores have great richness: They are able to provide
personal, face-to-face service using aural and visual cues when making a sale. The richness of
traditional markets makes them powerful selling or commercial environments.
Interactivity
Unlike any of the commercial technologies of the twentieth century, with the possible exception
of the telephone, e-commerce technologies are interactive, meaning they allow for two-way
communication between merchant and consumer. Interactivity allows an online merchant to
engage a consumer in ways similar to a face-to-face experience but on a massive, global scale.
Information Density
The Internet and the Web vastly increase information densitythe total amount and quality of
information available to all market participants, consumers, and merchants alike. E-commerce
technologies reduce information collection, storage, processing, and communication costs while
greatly increasing the currency, accuracy, and timeliness of information.
Personalization/Customization
E-commerce technologies permit personalization: Merchants can target their marketing messages
to specific individuals by adjusting the message to a persons name, interests, and past purchases.
The technology also permits customizationchanging the delivered product or service based on
a users preferences or prior behavior. Given the interactive nature of e-commerce technology,
much information about the consumer can be gathered in the marketplace at the moment of
purchase.
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TABLE 3.1 EIGHT UNIQUE FEATURES OF E-COMMERCE TECHNOLOGY

E-commerce Technology Dimension
Business Significance
Ubiquity. Internet/Web technology is available The marketplace is extended beyond traditional
everywhere: at work, at home, and elsewhere boundaries and is removed from a temporal
via mobile devices.
and geographic location. Marketspace
anytime, is created; shopping can take place
anywhere. Customer convenience is enhanced,
and shopping costs are reduced.
Global reach. The technology reaches across Commerce is enabled across cultural and
national boundaries, around the Earth.
national boundaries seamlessly and without
modification. The marketspace includes,
potentially, billions of consumers and millions
of businesses worldwide.
Universal standards. There is one set of With one set of technical standards across the
technology standards,
namely Internet globe, disparate computer systems can easily
standards.
communicate with each other.
Richness. Video, audio, and text messages are Video, audio, and text marketing messages are
possible.
integrated into a single marketing message and
consumer experience.
Interactivity. The technology works through Consumers are engaged in a dialog that
interaction with the user.
dynamically adjusts the experience to the
Individual, and makes the consumer a coparticipant in the process of delivering goods
to the market.
Information Density. The technology reduces Information
processing,
storage,
and
information costs and raises quality.
communication costs drop dramatically,
whereas currency, accuracy, and timeliness
improve greatly.
Information becomes
plentiful, cheap, and more accurate.
Personalization/Customization. The technology Personalization of marketing messages and
allows personalized messages to be delivered customization of products and services are
to individuals as well as groups.
based on individual characteristics.
Social technology. User content generation and New Internet social and business models
social networking.
enable user content creation and distribution,
and support social networks.
3.2 Key Concepts in E-Commerce: Digital Markets and Digital Goods ina Global
Marketplace
The Internet has created a digital marketplace where millions of people all over the world are
able to exchange massive amounts of information directly, instantly, and for free. As a result, the
Internet has changed the way companies conduct business and increased their global reach. The
Internet reduces information asymmetry. An information asymmetry exists when one party in a
transaction has more information that is important for the transaction than the other party. That
information helps determine their relative bargaining power. In digital markets, consumers and
94
suppliers can see the prices being charged for goods, and in that sense digital markets are said
to be more transparent than traditional markets.
Digital Goods
The Internet digital marketplace has greatly expanded sales of digital goods.
Digital goods are goods that can be delivered over a digital network. Music tracks, video,
Hollywood movies, software, newspapers, magazines, and books can all be expressed, stored,
delivered, and sold as purely digital products. Currently, most of these products are sold as
physical goods, for example, CDs, DVDs, newspapers, and hard-copy books. But the Internet
offers the possibility of delivering all these products on demand as digital products.
3.3
E-Commerce: Business and Technology
E-commerce is a fascinating combination of business models and new information technologies.
Lets start with a basic understanding of the types of e-commerce, and then describe e-commerce
business and revenue models.
TYPES OF E-COMMERCE
There are many ways to classify electronic commerce transactions. One is by looking at the
nature of the participants in the electronic commerce transaction.
The three major electronic commerce categories are business-to-consumer (B2C) e-commerce,
business-to-business (B2B) e-commerce, and consumer-to consumer (C2C) e-commerce.
1.
Business-to-consumer (B2C) electronic commerce involves retailing products and
services to individual shoppers. BarnesandNoble.com, which sells books, software, and music to
individual consumers, is an example of B2C e-commerce.
2.
Business-to-business (B2B) electronic commerce involves sales of goods and services
among businesses. Chem-Connects Web site for buying and selling chemicals and plastics is an
example of B2B e-commerce.
3.
Consumer-to-consumer (C2C) electronic commerce involves consumers selling directly
to consumers.
3.3.1 E-Commerce Business Models
Changes in the economics of information described earlier have created the conditions for
entirely new business models to appear, while destroying older business models. The following
are the business models types:
1. Portal
Portals such as Google, Bing, Yahoo, MSN, and AOL offer powerful Web search tools as well as
an integrated package of content and services, such as news, e-mail, instant messaging, maps,
calendars, shopping, music downloads, video streaming, and more, all in one place. Initially,
portals were primarily gateways to the Internet. Today, however, the portal business model
provides a destination site where users start their Web searching and linger to read news, find
entertainment, and meet other people, and be exposed to advertising.
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2. Content Provider
While e-commerce began as a retail product channel, it has increasingly turned into a global
content channel. Content is defined broadly to include all forms of intellectual property.
Intellectual property refers to all forms of human expression that can be put into a tangible
medium such as text, CDs, DVDs, or stored on any digital (or other) media, including the Web.
Content providers distribute information content, such as digital video, music, photos, text, and
artwork, over the Web. The value proposition of online content providers is that consumers can
find a wide range of content online, conveniently, and purchase this content inexpensively, to be
played, or viewed, on multiple computer devices or smartphones.
3. Transaction Broker
Sites that process transactions for consumers normally handled in person, by phone, or by mail
are transaction brokers. The largest industries using this model are financial services and travel
services. The online transaction brokers primary value propositions are savings of money and
time, as well as providing an extraordinary inventory of financial products and travel packages,
in a single location. Online stock brokers and travel booking services charge fees that are
considerably less than traditional versions of these services.
4. Market Creator
Market creators build a digital environment in which buyers and sellers can meet, display
products, search for products, and establish prices. The value proposition of online market
creators is that they provide a platform where sellers can easily display their wares and where
purchasers can buy directly from sellers.
5. Service Provider
While e-tailers sell products online, service providers offer services online.
Theres been an explosion in online services. Web 2.0 applications, photo sharing, and online
sites for data backup and storage all use a service provider business model.
6. Community Provider
Community providers are sites that create a digital online environment where people with similar
interests can transact (buy and sell goods); share interests, photos, videos; communicate with
like-minded people; receive interest-related information; and even play out fantasies by adopting
online personalities called avatars. The social networking sites Facebook, MySpace, LinkedIn,
and Twitter; online communities such as iVillage; and hundreds of other smaller, niche sites such
as Doostang and Sportsvite all offer users community-building tools and services.
3.4
Web 2.0: Social Networking
One of the fastest growing areas of e-commerce revenues are Web 2.0 online services. The most
popular Web 2.0 service is social networking, online meeting places where people can meet their
friends and their friends friends. Every day over 60 million Internet users in the United States
visit a social networking site like Facebook, MySpace, LinkedIn, and hundreds of others.
Social networking sites link people through their mutual business or personal connections,
enabling them to mine their friends (and their friends friends) for sales leads, job-hunting tips, or
new friends. MySpace, Facebook, and Friendster appeal to people who are primarily interested in
extending their friendships, while LinkedIn focuses on job networking for professionals.
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Social networking sites and online communities offer new possibilities for e-commerce.
Networking sites like Facebook and MySpace sell banner, video, and text ads; sell user
preference information to marketers; and sell products such as music, videos, and e-books.
Corporations set up their own Facebook and MySpace profiles to interact with potential
customers.
3.4.1 E-Commerce Marketing
While e-commerce and the Internet have changed entire industries and enable new business
models, no industry has been more affected than marketing and marketing communications. The
Internet provides marketers with new ways of identifying and communicating with millions of
potential customers at costs far lower than traditional media, including search engine marketing,
data mining, recommender systems, and targeted e-mail. The Internet enables long tail
marketing. Before the Internet, reaching a large audience was very expensive, and marketers had
to focus on attracting the largest number of consumers with popular hit products, whether music,
Hollywood movies, books, or cars. In contrast, the Internet allows marketers to inexpensively
find potential customers for which demand is very low, people on the far ends of the bell
(normal) curve.
3.5
The Mobile Digital Platform and Mobile E-Commerce
Walk down the street in any major metropolitan area and count how many people are pecking
away at their iPhones or BlackBerrys. Ride the trains, fly the planes, and youll see your fellow
travelers reading an online newspaper, watching a video on their phone, or reading a novel on
their Kindle. In five years, the majority of Internet users in the United States will rely on mobile
devices as their primary device for accessing the Internet. M-commerce has taken off.
3.5.1 M-Commerce Services and Applications
M-commerce applications have taken off for services that are time-critical, that appeal to people
on the move, or that accomplishes a task more efficiently than other methods. They are
especially popular in Europe, Japan, South Korea, and other countries with strong wireless
broadband infrastructures. The following sections describe some examples.
1. Location-Based Services
Wikitude.me provides a special kind of browser for smart phones equipped with a built-in global
positioning system (GPS) and compass that can identify your precise location and where the
phone is pointed.
Using information from over 800,000 points of interest available on Wikipedia, plus thousands
of other local sites, the browser overlays information about points of interest you are viewing,
and displays that information on your smartphone screen, superimposed on a map or photograph
that you just snapped.
2. Bank and Financial Services
Banks and credit card companies are rolling out services that let customers manage their
accounts from their mobile devices. JPMorgan Chase and Bank of America customers can use
their cell phones to check account balances, transfer funds, and pay bills.
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3. Games and Entertainment

Cell phones have developed into portable entertainment platforms. Smartphones like the iPhone
and Droid offer downloadable and streaming digital games, movies, TV shows, music, and
ringtones. Users of broadband services from the major wireless vendors can stream on-demand
video clips, news clips, and weather reports.
4.0
Conclusion
Digital markets are said to be more transparent than traditional markets, with reduced
information asymmetry, search costs, transaction costs, and menu costs, along with the ability to
change prices dynamically based on market conditions. Digital goods, such as music, video,
software, and books, can be delivered over a digital network. Once a digital product has been
produced, the cost of delivering that product digitally is extremely low.
5.0
Summary
E-commerce involves digitally enabled commercial transactions between and among
organizations and individuals. Unique features of e-commerce technology include ubiquity,
global reach, universal technology standards, richness, interactivity, information density,
capabilities for personalization and customization, and social technology.
6.0
1. What are the unique features of e-commerce, digital markets, and digital goods?
2. List and describe five unique features of e-commerce.
3. Define a digital market and digital goods and describe their distinguishing features.
4. How has e-commerce transformed marketing?
5. Explain how social networking help companies improve their marketing.
6. (a)what is the role of m-commerce in business, and what are the most important m-commerce
applications?
(b) List and describe important types of m-commerce services and applications.
Lancaster, F. W. (Frederick Wilfred) & Beth .S. (1997) Technology and Management in Library
Hall.
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MODULE 4
UNIT 1:THE STRATEGIC ROLE OF INFORMATION SYSTEM AND INF.S.ORG
1.0
Introduction
2.0
Objectives
3.0
Main Contents
3.1
What is a Strategic Information System?
3.2
The Changing Role of Information Systems
3.2.1 Information as a Paper Dragon
3.2.2 Information for Generation Support
3.2.3 Information for Management
3.2.4 Information as a Strategic Resource
3.3
How Information can be Used for Competitive Advantage
3.3.1 Competitive Force Model
3.3.2 Value Chain Model
3.4
Implications for Managers and Organizations
3.5
The Role of Managers in the Organizations
4.0
Conclusion
5.0
Summary
6.0
7.0
References/Further Reading
1.0 Introduction
In the last decades there has been a revolution in the way that organizations treat
information and information systems. Today, leading companies are using information
and information systems as tools for staying ahead of competitors.
2.0 Objectives
At the end of this nit you should be able to:
(1)
Explain why information is now considered a strategic resource
(2)
Define a strategic information system
3.0 Main Contents
3.1 What is a Strategic Information System?
Strategic information systems change the goals, operations, products, services or
environment relationships of organizations to help them gain an edge over competitors.
Systems that have the effects may even change the business of the organizations (Laudon,
1996). Strategic information systems often change the organization as well as its products
services and internal procedures, driving the organization into new behavior patterns.
Organizations may need to change their internal operations to take advantage of the new
information systems technology. Such changes often required new managers, a new
workforce and a much closer relationship with customers and suppliers.
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3.2 The Changing Role of Information Systems

Behind the growing of strategic uses of information systems is a changing conceptions of
the role of information in organizations. Organization now considers information a
resource, much like capital and labour. This was not always the case.
3.2.1 (1) Information as a Paper Design
In the past, information was often considered a necessarily evil associated with the
bureaucracy of designing, manufacturing and distributing a product or service.
Information was a paper design that could potentially strangle the firm and prevent it
from doing it real work (See Table 4.1). Information systems of the 1950s focused on
reducing the cost of routine paper processing, especially in accounting. The first
information systems were semi-automatic check processing, issuing and canceling
machines-so called electronic accounting machines (EAM). The term electronic data
processing (EDP) dates from this period.
3.2.2 Information for Generation Support
By the 1960s, organizations started viewing information differently, recognizing that
information could be used for general management support. The information systems of
the 1960s and 1970s were frequently called management information systems (MIS) and
were thought of as an information factory churning out reports on weekly production,
monthly financial information, inventory, accounts receivable, account payable and the
like. To perform these tasks, organization acquired general purpose computing equipment
that could support many functions rather than simply canceling checks.
3.2.3 Information for Management
In the 1970s and early 1980s, information and the systems that collected, stored, and
processed it-were seen as providing fine-tuned, special purpose, customized management
control over the organization. The information systems that emerged during this period
were called decision support systems (DSS) and executive support systems (ESS). Their
purpose was to improve and speed up decision making process of specific managers and
executives in a broad range of problems.
3.2.4 Information as a Strategic Resource
By the mid-1980s, the conception of information changed again. Information has since
then regarded as a strategic resource, a potential source of competitive advantage, or a
strategic weapon to defeat and frustrate competition. These changing conceptions of
information reflects advances in strategic planning and theory (Porter, 1985). The types
of systems been built to support this concept of information are called strategic systems,
and their purpose is to ensure the survival and prosperity of the organization in the near
future.
Strategic information systems should be distinguished from strategic level systems for
senior managers that focus on long-term decision making problems. Strategic information
systems can be used at all levels of the organization and are more far-reaching and deeprooted than the other kinds of systems we have described. Strategic information systems
fundamentally change the firms goals, products, services or internal and external
relationships. Strategic information systems profoundly alter the way a firm conducts its
business or the way business of the firm itself.
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Table 4.1: Changing concepts of information systems

Time
Conception
of Information systems
information
1950s-1970s
Necessary evil
Electronic accounting
Bureaucratic
machines (EAM)
requirement
A paper dragon
1960s-1970s
General-purpose
Management
support
information systems
(MIS)
Information factory
1970s-1980s
Customized
Decision
support
management control
systems (DSS)
Executive
support
systems (ESS)
1985-2000
Strategic
resource Strategic systems
competitive advantage
strategic weapon
Purpose
Speed accounting and
paper processing
Speed
general
reporting
requirements
Improved
customized
making
and
decision
Promote survival and

prosperity of the
organization
3.3 How Information systems can be used for Competitive Advantage

In order to use information systems as competitive weapons, you must first understand
where strategic opportunities for business are likely to be found. Two models of the firm
and its environment have been used to identify areas of the business where information
systems can provide advantages over competitors. These are the competitive forces
model and the value chain model.
3.3.1 Competitive Forces Model
To identify where information systems can provide a competitive advantage, you must
first understand the firms relationship to its surrounding environment. In the competitive
forces mode, which is illustrated in figure 1.1 (Porter, 1980), a firm faces a number of
external threats and opportunities; the threat of new entrants into its market; the pressure
from substitutes products or services; the bargaining power of customers; the bargaining
power of suppliers; and the positioning of traditional industry competitors. Competitive
advantage can be achieved by enhancing the firms ability to deal with customers,
suppliers, substitutes products and services, and new entrants to its market, which in turn
may change the balance of power between a firm and other competitors in the industry in
the firms favour. Business can use four basic competitive strategies to deal with these
competitive forces:
(1)
Product Differentiation: Firms can develop brand loyalty by creating unique new
products and services that can easily be distinguished from those of competitors, and that
existing competitors and that discourages potential new competitors.
(2)
Focused Differentiation: Business can create new market niches by identifying a
specific target for a product or service that it can serve in a superior manner. The firm can
provide a specialized product or service that serves this narrow target market better than
existing competitors and that discourages potential new competitors.
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(3)
(4)
Developing Tight Linkages to Customers and Suppliers: Firms can create ties to
customers and suppliers that lock customers into the firms products and that tie
suppliers into a delivery timetable and price structure shaped by the purchasing firm. This
raises switching costs (the cost for customers to switch to competitors products and
services) and reduces customers bargaining power and the bargaining power of suppliers.
Becoming the Low Cost Producer: To prevent new competitors from entering their
markets, businesses can produce goods and services at a lower price than competitors
without sacrificing quality and level of service.
Substitute
products and
services
New market
entrants
Traditional
The firm
competitor
s
Customers
Suppliers
Fig. 4.1: Competitive Forces Model
3.3.2 Value Chain Model

The value chain model highlights specific activities in the business where competitive strategies
can best be applied (Porter, 1985) and where information systems are most likely to have a
strategic impact. The value chain model can supplement the competitive forces model b
identifying specific, critical leverage points where a firm can use information technology most
effectively to enhance its competitive position. Exactly where can it obtain the greatest benefit
from strategic information systems-what specific activities can be used to create new products
and services, enhance market penetration, lock in customers and suppliers, and lower operational
costs? This model views the firm as a series of chain of basic activities that add a margin of
value to a firms products or services. These activities can be categorized as either primary
activities or support activities.
Primary activities are most directly related to the production and distribution of the firms
products and services that create value for the customer. Primary activities include inbound
logistics, operations, outbound logistics, sales and marketing, and service. Inbound logistics
include receiving and storing materials for distribution to production. Operations transform
inputs into finished products. Outbound logistics entails storing and distributing products.
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Marketing and sales includes promoting and selling the firms products. The service activity
includes maintenance and repair of the firms goods and services.
Support activities make the delivery of the primary activities possible and consist of organization
infrastructure (administration and management), human resources (employee recruiting, hiring
and training), technology (improving product and the production process), and procurement
(purchasing input). Organizations have competitive advantage when they provide more value to
their customers or when they provide the same value to customers at a lower price. An
information system could have strategic impact if it helped the firm provide products or services
at a lower cost than competitors or if it provided products and services at the same cost as
competitors but with great value.
3.4 Implications for Managers and Organizations
The strategic information systems that we have described leverage information systems
technology and technology impacts. Until recently, information systems played a relatively
minor role in the production, distributions and sales of products and services. Vast increases in
the productivity of information processing made relatively little difference in the firms
productivity or bottom-line balance sheet. Now, however, as the operation of an organization
have come to depend heavenly on information systems, and as these systems penetrate the
organization, increases in the productivity of information processing can have dramatic
implications for the overall productivity of the corporation (Lauden, 1996).
In general, strategic information systems provide significant, although generally temporary,
market advantages, principally by raising the entry cost of gains an advantage for five years can
utilize time and the additional resources that leadership brings to ensure that it maintains a
technological advantage for the next five years, and so on. Firms can thus build on their initial
successes and can develop a stream of innovative applications if they have the staff to support
their information systems and if they understand the strategic importance of information. For
instance, a company can parlay a series of innovation into a valuable market image of it as a
consistent leader at the cutting edge of technology. This image alone can help maintain the firms
market position.
Firms may also find that a single generic strategy such as cost leadership will not be sufficient to
combat competitors. The low cost of information systems technology has made it much easier for
new, opportunistic, and nimble competitors to finely tune their products and prices to win away a
firms customers base. Firms that pursue a strategy of being the low cost leader may find that
they also have to compete on quickly; to remain competitive they may have to implement
multiple strategies simultaneously (Clemons and Weber, 1994) in (Laudon, 1996).
3.5 The Role of Managers in the Organization
Information systems are too important t be left entirely to a small technical group in the
corporation. Managers must take the initiative to identify the types of systems that would
provide a strategic advantage to the firm.
Important questions managers should ask themselves are as follows:
(1)
What are some of the forces at work in the industry? What strategies are being used by
industry leaders?
(2)
How is the industry currently using information and communication technology? Which
organizations are the industry leaders in the application of information system
technology?
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(3)
(4)
(5)
(1)
(2)
(3)
(4)
What are the direction and nature of change within the industry? Where are the
momentum and change coming from?
Are significant strategic opportunities to be gained by introducing information systems
technology into industry?
What kinds of systems are applicable to the industry? Does it require systems to create
new products and services, suppliers systems and/or sales and marketing systems?
Once the nature of information systems technology in the industry is understood,
managers should turn to their organization and ask other important questions:
Is the organization behind or ahead of the industry in its application of information
systems?
What is the current strategic plan, and how does that plan mesh with the current strategy
for information services?
Have the information technologies currently in use provided significant payoffs to the
business? Do they largely support the business or drains its resources?
Where would new information systems provide the greatest value to the firm?
Once these issues have been considered, managers can gain a keener insight into whether
their firms are ready for strategic information systems (Laudon, 1996).
4.0 Conclusion
Information systems can so dramatically boost a firms productivity and efficiency that
businesses view information as a weapon against competition and strategic resource.
5.0 Summary
Strategic information systems change the goals, operations, products, services or
environmental relationship of organizations to help them gain an edge over competitors.
(1)
What is strategic information systems?
(2)
Identify four different conceptions of the role of information in organization?
(3)
Define and compare competitive forces and value chain models for identifying
opportunities for strategic systems?
(4)
What are the four basic competitive strategic?
(5)
How can managers find strategic applications in their firm?
104
105
MODULE 4
UNIT 2: DEVELOPING BUSINESSS SYSTEMS
CONTENTS
1.0
Introduction
2.0
Objectives
3.0
Main Contents
3.1
The Systems Approach
3.1.1 The Systems Development Cycle
3.1.2 Prototyping
3.2
Starting the Systems Development Process
3.3
Systems Analysis
3.3.1 Organizational Analysis
3.3.2 Analysis of the Present System
3.3.3 Functional Requirements Analysis
3.4
Systems Design
3.5
End User Development
4.0
Conclusion
5.0
Summary
6.0
7.0
1.0
Introduction
This unit will show you how the systems approach can be used to develop e-business
systems and applications that meet the business needs of a company and its employees
and stakeholders.
2.0
Objectives
(1) Describe and give examples to illustrate how you might use each of the steps of the
information systems development cycle develop and implement a business information
system.
(2) Explain how prototyping improves the process of systems development for end users and
its specialists.
3.0
Main Contents
3.1
The Systems Approach

The system approach to problem solving uses a systems orientation to define problems
and opportunities and develop solutions. Studying a problem and formulating a solution involves
the following interrelated activities:
1. Recognize and define a problem or opportunity using system thinking.
2. Develop and evaluate alternative system solution.
3. Select the system that best meets your requirements.
4. Design the selected system solution.
5. Implement and evaluate the success of the designed system.
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System Thinking
Using system thinking to understand a problem or opportunity is one of the most
important aspects of the systems approach. Management, Consultant and author Peter Senge
calls systems thinking the fifth discipline. Senge argues that mastering systems thinking (along
with the disciplines of personnel mastery; mental models, share vision, and team learning) is
vital to personal fulfillment and development/business success in a world of constant change.
The essence of the discipline of systems thinking is seeing the forest and the trees in any
situation by:
- Seeing interrelationships among systems rather than linear cause-and-effect claims
whenever events occur.
- Seeing processes of change among systems rather than discrete snapshots of change
whenever changes occur.
One way of practicing systems thinking is to try to find systems, subsystems and
component of systems in any situation you are studying. This is also known as using a systems
context or having a systematic view of a situation. For example, the business organization or
business process in which a problem or opportunity arises could be viewed as a system of input,
processing, output, feedback, and control components. Then to understand a problem and solve it
you would determine if these basic systems functions are being properly performed.
Example, the sales process of a business can be viewed as a system. You could then ask:
is poor sales performance (output) caused by inadequate selling effort (input), out-of-date sales
information (feedback), or inadequate sales management (control)? Figure 4.2 illustrates this
concept.
Feedback
Poor Sales
Management
Incorrect sales information
Inadequate selling
Out-of-date sales
Poor sales
effort?
procedures?
performance?
Input
Processing
Output
Fig. 4.2 Sales Process of Business Concept

An example of systems thinking; you can better understand a sales problem or
opportunity by identifying and evaluating the components of a sales system.
107
Understand the
business problem
or opportunity
Develop
information
system solution
Implementation
the information
system solution
Systems
investigation
product feasibility
study
Systems analysis
production
functional
requirements
Systems design
product system
specifications
Develop specifications for the hardware, software,

people, network and data resources, and the information
product that will functional requirement of the proposed
business information system
Systems
implementation
Product operation
system
Acquire (or develop) hardware and software

Test the system and train people to operate it and use it
Convert to new business system as needed
Systems
maintenance
product improved
system
Determine how to address business opportunity and priority

Conduct a feasibility study to determine whether a new or
improved business system is feasible solution
Develop a project management plan and obtain management
approval
Analyze the information needs of employees, customers

and other business stakeholders
Develop functional requirements of a system that can
meets business priority and need of all stakeholders
Use post implementation review process to monitor,

evaluate and modify the business system as needed
Fig. 4.3 Information Systems Development Cycle

3.1.1 The Systems Development Cycle
Using the system approach to develop information system solutions can be viewed as a
multistep process called the information systems development cycle, also known as the systems
development lifecycle (SDLC). Figure 4.3 what goes on in each stage of this process, which
includes the steps of (1) investigation (2) analysis (3) design (4) implementation (5) maintaining.
You should realize, however, that all of the activities involve are highly related and
interdependent activities can occur at the same time, in actual stages of the development cycle. In
addition, you and IS specialists may recycle back at any time to repeat previous activities in
order to modify and improve a system you are developing.
108
3.1.2 Prototyping
The systems development process frequently takes the form of, or includes, a prototyping
approach. Prototyping is the rapid development and testing of working models, or prototypes, of
new application in an interactive process that.
Identify an end users
business
requirements
Investigation/Analysis. End users identify their business

needs and assess the feasibility of several alternative
information system solution
Develop business
system prototypes
Analysis/Design: End user and/or is specialists use

application development tools to interactively design and
test prototypes of information system components meet
end user business needs
Revise the prototype

to better meet end
user requirement
Design/Implementation: The business system prototypes

are tested, evaluated and modified repeatedly until end
users find them acceptable
Use and maintain

business system
Implementation/Maintenance: The accepted business

system can be modified easily since most system
documentation is stored on disk
Prototyping
cycle
Maintain
cycle
Fig.4.4 Prototyping Process

The Prototyping Process
Prototyping can be used for both large and small application. Typically, large business system
still require using a traditional system development approach, but parts of such systems can
frequently be prototyped. A prototype of a business application quickly using a variety of
application development software tools. The prototype system is then repeatedly refined until it
is acceptable.
As figure 4.4 illustrate, prototyping is an interactive process that combine steps of the traditional
system development cycle. End users with sufficient experience with application development
tools can do prototyping themselves; alternatively, you could work with an IS specialist to
develop a prototype systems in a series of interactive sessions. For example, you could develop
test and prototype management report, data entry screen and out displays.
109
Usually, a prototype is modified several times before end users find it acceptable. Any program
modules that are not generated by application development software can then be coded by
programmes using conventional programming languages. The final version of the application
system is then turned over to its end users for operational use.
3.2 Starting the Systems Development Process
Do we have business opportunities? What are our business priorities? How can information
technologies provide information system solutions that address our business priorities? There are
the questions that have in the systems investigation stages. The first step is the systems
development process. This stage may involve consideration of proposal generated by a
business/IT planning process. This investigation stage also include the preliminary study of
proposed information system solutions to meet a company business priorities opportunities.
Feasibility Study
Because the process of development can be costly, the system investigation stage may require a
preliminary study called a feasibility study. A feasibility study is a preliminary study of proposed
information of prospective users and the resource requirements, cost, benefits and feasibility of a
proposed project are determined. Then you might formalized the findings of this study in a
written report that includes preliminary specification and a developmental plan for a proposed
business application. If management approves the recommendations of the feasibility study, the
development priorities and opportunities process can continue.
The goal of feasibility studies is to evaluate alternative system solutions and to propose the most
feasible and desirable business application for development. The feasibility of a proposed
business system can be evaluated in terms of four major categories. The focus of organizational
feasibility is on how well a proposed system support the strategic business priority of the
organization. Economic feasibility is concerned with whether expected cost saving, increased
revenue, increased profits.
Table 4.2:Organizational, economic, technical, and operational feasibility factors. Note that there
is more feasibility than cost savings or the availability of hardware and software.
Organizational Feasibility
Economic Feasibility
How well the proposed system support the Cost saving

business priorities of the organization
Increase revenue
Decreased investment requirements
Increase profit
Technical Feasibility
Operational Feasibility
Hardware, software and network capability,

reliability and availability
110
Employee, customer, supplier acceptance

Management support
Government or other requirement
Table 4.3: Example of how a feasibility study might measure the feasibility of a proposed ecommerce system.
Organizational Feasibility
Economic Feasibility
How well a proposed e-commerce system

fits the companys plans for developing
sales, marketing and financial e-business
system
Technical Feasibility
Saving in labour cost

Increased sales revenue
Decrease investment in inventory
Increase profit
Operational Feasibility
Capability, reliability and availability
Acceptance of employee
Management support
Customer and supplier acceptance
Reduction is required investment, and other types of benefits will exceed the costs of
developing and operating a proposed human resources cannot cover its development costs. It
wont be approved, unless mandated by government regulation or strategic business
consideration.
Technical Feasibility: Can be demonstrated if reliable hardware and software capable of
meeting the needs of a proposed system can be acquired or developed by the business in the
required time. Finally, operational feasibility is the willingness and ability of the management,
employees, customers, suppliers and others to operate use and support proposed system. For
example, if the software for a new e-commerce system is too difficult to use, customers or
employees may make too many errors and avoid using it. Thus, it would fail to show operation
feasibility. See Figure 6.
Cost/Benefit Analysis: Feasibility studies typically involved cost and benefit analysis if the cost
and benefit they quantified they are called tangible if not they are called intangible. Example
of tangible cost are the cost of hardware and software, employee salaries, and other quantifiable
costs needed to developed and implement an IS solution. Intangible costs are difficult to quantify
they include the loss of customer goodwill or employee morale caused by errors and disruption
arising from the installation of a new system.
Tangible benefit are favourable results, such as the decrease in payroll costs caused by
reduction in inventory, intangible benefits are harder to estimate such benefit better customer
service or faster and more accurate information for management fall into this category.
3.3
System Analysis
What is system analysis? Whenever you want to develop a new application quickly or are
involve in long term project you will need to perform several basic activities of system analysis,
many of these activities are an extension of those used in conducting a feasibility study.
However, system analysis is not a preliminary study, it is an indepth study of end user
information needs that product functional requirement that are used as the basis of the design of a
new information system. System analysis traditionally involved detail study of:
- The information need of a company and end user like yourself.
- The activities, resources and products of one or more of the present information system
used.
111
The information system capabilities required to meet the information needs, and those of
other business stakeholders that may use the system.
3.3.1 Organizational Analysis

An organizational analysis is an important first step in system analysis. How can anyone
improve an information system if they know very little about the organizational environment in
which that system is located? They cant. Thats why the members of development team have to
know something about the organization its management structure, its people, its business
activities. The environmental system it must deal with and its current information systems.
Someone on the team must know this information in more detail for specific business units or
end users work groups that will be affected by the new or improve information system being
proposed. For example, a new inventory control system for a chain of department stores cannot
be designed unless someone on a department team knows a lot about the company and the types
of business activities that affect its inventory. Thats why business end users are frequently added
to system development teams.
3.3.2 Analysis of the Present System

Before you design a new system, it is important to study the system that will be improved
or replaced (if there is one). You need to analyze how this system uses hardware, software,
network and people resources to convert data resources such as transaction data, into information
products, such as reports and displays; then output storage and control accomplished.
For example, you may evaluate the format, timing, input, output, volume and quality of
input and output activities. Such user interface are vital for effective interaction between end user
and computer-based system. Then, in the system design stage, you can specify what the
resources product and activities should be to support the user interface in the system you are
designing.
3.3.3 Functional Requirement Analysis
This step of system analysis is one of the most difficult. You may need to work as a team
with IS analysis and other end user to determine your specific business information needs. For
example, first you need to determine what type of information each business activity requires,
what its format, volume and frequency should be, and what response times are necessary.
Second, you must try to determine the information processing capability required for each
system activity (input, processing, output, storage, control) to meet these information needs. Your
main goal should be identify what should be done, not how to do it.
Finally, you should try to developed functional requirements. Functional requirement are
end user information requirement that are tied to the hardware, software, data and people
resources that end user presently use or might use in the new system that is left to the design
stage to determine.
3.4
System Design
System analysis describes what a system should do to meet the information needs of
users. System design specifies how the system will accomplish this objective. System design
consist of design activities produce system specifications satisfying the functional requirements
that were developed in the systems analysis process.
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A useful way to look at system design is illustrated in Figure 4.5. This concept focuses on
three major products, or deliverables that should result from the system design can be viewed as
the design of user interfaces, data and processes.
User interface
Design
Data Design
Process Design
Screen, form, report and dialogue design

Data element structure design
Program and procedure
Fig. 4.5 System Design
Design stage: In this frameworks, systems design it is the system component closest to
business end users and the one they will most likely help design. The users interface design
activity focuses on supporting the interactions between end users and their computer-based
application. Designers concentrate on the design of attractive and efficient form of user input and
output such as easy-to-use internet or intranet web pages.
As we mentioned earlier, user interface design is frequently a prototyping process, where
working models or prototypes of user interface methods are designed and modified several times
with feedback from end users. The user interface design process produce detailed design
specifications for information product such as display screens, interactive user/computer
dialogues (including the sequences or flow of dialogue), audio responses, forms, documents,
report.
3.5
End User Development

In traditional system development cycle, your role as a business end user is similar to that
of a customer or a client. Typically, you make a request for a new or improved system, answer
question about a specific information needs and information processing problems and provide
background information or your existing e-business systems. IS professional work with you to
analyze your problem and suggest alternative solutions; when you approve the best alternative, it
is designed and implementation team with IS specialists.
However, in end user development, is professional play a consulting role while you do
your own application development, Sometimes a staff of user consultants.
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Focus on Information System Activities

It is important to remember that end user development should focus on the fundamental
activities of any information system; input, output, storage and control.
Figure 4.6: Illustrate these system of component and the question they address.
End user development should focus on the basis information process activity, components
and question they address.
Control
What controls are needed to
protect against accidental loss or
damage? Is there need to control
access the data used by
application
Input
What data are available in what
form?
Processing
What operation on the inputs are
needed to produce the desired
output? What software can most
operatively support those
operations?
Output
What information is needed by
end user and in what form should
be output be presented?
Storage
Does the application use
previously stored data? Does it
create data that must be stored
for the future use by this or other
application?
Fig. 4.6: System of Component and the Question they address

In analyzing in potential application, you should focus first on the output to be produced by the
application, what information is needed and in what form should it presented? Next, look at the
input data to be supplied to the application. What data are available? From what sources? In what
form? Then you should examine the processing requirements. What operations or transformation
processes will be required to convert the available is able to use, which package can best perform
the operation required?
You may find that the desired output cannot be produce from the input that are available. If this
is the case, you must either make adjustments to the output expected, or find additional sources
of input data including data stored in files and databases from external sources. The storage
component will vary in importance in end user application. For example, some applications
required extensive use of stored data or the creation of data that must be stored for future use.
These are better suited for database management development projects than for spreadsheet
application.
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Necessary control measures for end user application vary greatly depending upon the
scope and duration of the users measure are needed to protect against accidental loss or damage
to end user files the most basic protection against this type of loss is simply to make backup
copies of application files on a frequent and systematic basis. Another example is the cell
protection feature of spreadsheets that protects key cells from accidental erasure by users.
4.0
Conclusion
Business end users and IS specialists may use a systems approach to help them develop
information system solutions to meet business opportunities.
5.0
Summary
System approach is all about recognizing and defining a problem or opportunity using system
thinking. It is equally about developing and evaluating alternative system solution that best meets
your requirements.
6.0
1. Describe System Approach?
2. Give examples to illustrate how you might use each of the steps of the information
systems development cycle?
3. Discuss System Thinking?
4. Explain how prototyping improves the process of systems development for end users
and its specialists?
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MODULE 4
UNIT 3: IMPLEMENTING BUSINESSS SYSTEMS
CONTENTS
1.0
Introduction
2.0
Objectives
3.0
Main Contents
3.1
Implementing New Systems
3.2
Evaluating Hardware, Software and Services
3.2.1 Hardware Evaluation Factors
3.2.2 Software Evaluation Factors
3.2.3 Evaluating IS Services
3.3
Other Implementation Activities
3.3.1 Testing
3.3.2 Documentation
3.3.3 Training
3.3.4 IS Maintenance
4.0
Conclusion
5.0
Summary
6.0
7.0
1.0
Introduction
This unit shows the processes involve in implementing new information system and factors
to be considered in system evaluation.
2.0 Objectives
(i)
Identify the activities involved in the implementation of new information systems.
(ii)
Describe several evaluation factors that should be considered in evaluating the
acquisition of hardware, software and IS services.
3.0 Main Contents
3.1 Implementing Business Systems
IMPLEMENTATION
Once a new e-business system has been designed, it must be implemented and
maintained. The implementation process we will cover in this section follows the investigation,
analysis and design stages of the system development cycle we discussed. Implementation is a
vital step in the deployment of information technology to support the business information
system developed by the company for employees, customers and other business stakeholders.
IMPLEMENTING NEW SYSTEMS
Figure 4.7: Illustrate that the system implementation stage involve hardware and software
acquisition, software development, testing of programs and procedures, development of
documentation and a variety of conversion alternatives. It also involve education and training of
end users and specialists who will operate a new system.
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An overview of implementation process implementation activities are needed to

transform a newly development information system into an operational system for end users.
Implementation
Activities
Acquisition of
hardware,
software and
services
Software
development
or
modification
End user
training
System
documentation
Conversion
Parallel
Phase
Plunge
Fig. 4.7: System Implementation Stage

Implementation can be difficult and time consuming process. However, it is vital in
ensuring the success of any newly developed system, for even well-designed system will fail if it
is not properly implemented.
3.2
EVALUATING HARDWARE SOFTWARE AND SERVICES

How do companies and select hardware, software and IT services, large companies may
require suppliers to present bids and proposals based on system specifications developed during
the design stage of system development minimum acceptable physical and performances
characteristics for all hardware and software requirement are established. Most large business
and all government agencies formalize these requirements by listing them in a document called
Request for Proposal (RFP) or Request for Quotation (RFQ). Then they send the RFP or RFQ to
appropriate vendors, who used it as the basis for preparing purchase agreement.
Companies may use scoring system of evaluation when there are several competing
proposals of hardware acquisition. They give each evaluation factor a certain number of
maximum possible points. Then they assign each competing proposal for each factor, depending
on how well it meets the users specification evaluation factors for several proposal help
organize and document the evaluation process. It also spotlight the strength and weaknesses of
each proposal.
Whatever the claims of hardware manufacturers and software suppliers, the performance
of software and hardware must be demonstrated and evaluated. Independent hardware and
software information services (such as datapro and Auerbach) may be used to gain detailed
specification and evaluations. Other users are frequently the best sources of information need to
evaluate the claims of manufacturers and suppliers. That is why the internet newsgroups
established to exchange information about software vendors or hardware vendors and their
product have become of the sources of obtaining up-to-date data about the experiences of users
of the product.
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Large companies frequently evaluate proposed hardware or software by requiring the

processing of special benchmark test programs and test data. Benchmarking simulate the
processing of typical jobs on several computers and evaluate their performance. Users can then
evaluate test results to determine which hardware device or software packages displayed the best
performance characteristics.
3.2.1 Hardware Evaluation Factors
When you evaluate the hardware needed by a new business application, you should
investigate the specific physical and performance characteristics of each computer system or
peripheral component to be acquired. Specific question may be answered concerning many
important factors. Ten of these hardware evaluation factors and question are summarize in table
4.4.Notice that there is much more to evaluating hardware than determine the fastest and
cheapest computing device. For example, the question of obsolesce must be address by making a
technology evaluation. The factors of ergonomics is also very important. Ergonomic factor
ensure that computer hardware and software are user friendly. That is safe, comfortable and easy
to use. Connectivity is another important evaluation factor, since so many network technologies
and bandwidth alternatives are available to connect computer system to internet, intranet and
extranet networks.
Table 4.4 Hardware Evaluation Factors
Hardware Evaluation Factors
Rating
Performance
What is its speed, capacity and throughput?
Cost
What is its lease or purchase price? What will be its cost of operation and
maintenance?
Reliability
What are the risk of malfunction and its maintenance requirement?
What are its error control and diagnostic feature?
Compatibility
It is compatible with existing hardware and software devices? It is compatible
with hardware and software provided by competing supplier?
Technology
In what year of it is produce lifecycle is it? Does it use a new untested
technology or does it run the risk of obsolesce?
Ergonomics
Has it been human factor engineered with the user in mind? Is it user friendly,
designed to be safe, comfortable and easy to use?
Scalability
Can it handle the processing demands of a wide range of end users?
Transaction, suppliers, queries and other information processing requirement?
Connectivity
Can it be easily connected to wide area and local area networks that use
different type of network technology and bandwidth alternatives?
Support
Are the services require to support and maintain it available?
Overall Rating
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3.2.2 Software Evaluation Factors

You should evaluate software according to many factors that may be similar to those used
in evaluation hardware. This, the factors of performance, cost, reliability, availability,
compatibility, modularity, technology, ergonomics and support should be used to evaluate
proposed software acquisitions. In addition, however, the software evaluation factors summarize
in table 4.5 must also be considered. You should answer the question may generated in order
properly evaluate software purchase. For example, some software packages are notoriously slow,
hard to use, bug filled, or poorly documented. They are not good choice even if offered attractive
prices.
Table 4.5 Software Evaluation Factors
Software Evaluation Factors
Rating
Quality
Is it bug free, or does it have many errors in program code?
Efficiency
Is the software a well-developed system of program code that does not use
much CPU time, memory capacity, or disk space?
Flexibility
Can it handle our e-business process easily, without major modification?
Security
Does it provide malfunction, errors and improper use control procedures?
Connectivity
Is it a web-enable so it can easily access the internet, intranet, and extranets on
its own by working with web browser or other network software?
Language
Is it written in programming language that is familiar with our own software
developers?
Documentation
Is it software documented? Does it include help screens and helpful software
agents?
Hardware
Does existing hardware have the feature required to best use in this software?
Other Factors
What is its performance, compatibility, reliability, modularity, technology,
ergonomics, and scalability and support characteristics?
Overall Rating
3.2.3 Evaluating Information System Services
Most suppliers of hardware and software product offered variety of IS services to end
users and organizations. Example include assistance during e-commerce website development,
installation or conversion of new hardware and software, employee training and hardware
maintenance. Some of these provided without cost of hardware and software suppliers.
Other types of IS services needed by a business can outsourced to an outside company for
a negotiated price. For example, system integrators take over complete responsibility for an
organizations computer facilities when organization outsource its computer operations. They
may also assume responsibility for developing and implementing large systems development
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project that involve many vendors and subcontractors. Value added sellers (VARS) specialize in
providing industry specific hardware, software and services from selected system design,
contract programming and consulting services. Evaluation factors and questions for IS services
are summarized in table 4.6.
Table 4.6 Evaluation Factors for IS Services
Evaluation Factors for IS Services
Rating
Performance
What has been their past performance in view of their past promises?
System Development
Are website and other e-business developers available? What are their quality
costs?
Maintenance
Is equipment maintenance provided? What is its quality and cost?
Conversion
What system development and installation service will they provide during the
conversion period?
Training
Is the necessary training of personnel provided? What are its quality and cost?
Backup
Are similar computer facilities available nearby for emergency backup
purposes?
Accessibility
Does the vendor provide local or regional site that offer sales, system
development, and hardware maintenance services? Is customer support centre at
the vendors website available? Is customer hotline provided?
Business Position
Is the vendor financial strong; with good industry market prospects?
Hardware
Do they provide of wide selection of compatible hardware devices and
accessories?
Software
Do they offer variety of useful e-business software and application package?
Overall Rating
3.3 Other Implementation Activities
3.3.1Testing
Testing documentation and training are important keys to successful implementation of a new
business system. System testing may involve testing website performance, testing and debugging
software and testing new hardware. An important type of testing is review of prototype of
displays, reports and other output. Prototypes should be reviewed by end users of the proposed
systems for possible errors of course, testing should not occur only during the systems
implementation stage, but throughout the systems development process. For example, you may
examine and critique prototypes of input documents, screen displays and processing procedures
during the systems design stage. Immediate end user testing is one of the benefits of prototyping
process.
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3.3.2 Documentation
Developing good users documentation is an important part of implementation process.
Sample data entry displays screen, forms, and reports are good example of documentation. When
computer aided system engineering method are used, documentation can be created and change
easily since it is stored and accessible on disk in a system repository. Documentation serves as
method of communication among the people responsible for developing, implementing and
maintaining a computer base system. Installing and operating newly designed or modifying an
established application required a detailed record of that system designed. Documentation is
extremely important in diagnosing errors and changes, especially if the end users or systems
analysts who developed a system are no longer with the organization.
3.3.3 Training
Training is a vital implementation activity. IS personnel, such as user consultants must be
sure that end user are trained to operate new e-business system or its implementation will fail?
Training may involve only activities like data entry, or it may also involve all aspect of the
proper use of new system. In addition, managers and end users must be educated in how the new
techn9ology impacts the companys business operation and management. This knowledge should
be supplemented by training programs for any new hardware devices, software packages and
their use for specific work activity.
3.3.4 Implementation System Maintenance
Once a system is fully implemented and is being used in business operations, the
maintenance functions begin, system maintenance is the monitoring, evaluating and modifying
of operational business systems to make desirable or necessary improvements for example, the
implementation of new systems usually result in phenomenon known as the learning curve.
Personnel who operate and use the system will make mistakes simply because they are not
familiar with it. Though such errors usually diminish as experience is gained with a new system,
they do point out area where the system may be improved.
Maintenance is also necessary for other failure and problems that arise during the
operation of a system. End users and information system then perform a troubleshooting function
to determine the causes of and solution to such problem.
The maintenance activity include post implementation review process to show that newly
implemented systems meet the business objectives established for them. Errors in the
development or use of a system must be corrected by the maintenance process. This includes a
periodic review or audit of a system to ensure that operating properly and meeting its objective.
This audit is in addition to continually monitoring a new system for potential problem or
necessary changes; maintenance also include making modifications to established system due to
changes in the business organization on new e-business environment.
4.0 Conclusion
For an Information system to succeed, Business professional should know all the
processes involve and how to evaluate the acquisition of information systems resources.
5.0 Summary
Implementation involves acquisition, testing, documentation, training, installation activities that
transform a newly designed business system into operational systems for end users.
7.0 Tutor Marked Assignment
1. Identify the activities involved in the implementation of new information systems?
2. Describe several evaluation factors that should be considered in evaluating:
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(a) acquisition of hardware

(b) software
(c) IS services.
8.0 References/Further Reading
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MODULE 5
UNIT 1: ETHICAL ISSUES AND FUTURE OF INFORMATION SYSTEMS
CONTENTS
1.0 Introduction
2.0 Objectives
3.0 Main Contents
3.1 Understanding ethical and social issues related to systems
3.1.1 A Model for Thinking about Ethical, Social and Political Issues
3.1.2 Five Moral Dimensions of the Information Age
3.2 Ethics in an information society
3.2.1 Basic Concepts: Responsibility, Accountability and Liability
3.3 Ethical analysis
3.4 The moral dimensions of information systems
3.4.1 Information Rights: Privacy and Freedom in the Internet Age
3.5 Property rights: Intellectual property
3.6Challenges to intellectual property rights
4.0 Conclusion
5.0 Summary
1.0 Introduction
This unit discusses issues pertaining to ethics, social and political as it affects information
systems, other areas covered includes privacy, copy and intellectual property issues.
2.0
Objectives
1. Discuss ethical, social, and political issues are raised by information systems?
2. Identify and describe steps in ethical analysis?
3. Mention the contemporary information systems technology and the Internet pose
challenges to the protection of individual privacy and intellectual property?
4. Explain how information systems affect everyday life?
3.0
Main Contents
3.1
Understanding Ethical and Social Issues Related to Systems
Ethics refers to the principles of right and wrong that individuals, acting as free moral agents, use
to make choices to guide their behaviors. Information systems raise new ethical questions for
both individuals and societies because they create opportunities for intense social change, and
thus threaten existing distributions of power, money, rights, and obligations. Like other
technologies, such as steam engines, electricity, the telephone, and the radio, information
technology can be used to achieve social progress, but it can also be used to commit crimes and
threaten cherished social values. The development of information technology will produce
benefits for many and costs for others.
Ethical issues in information systems have been given new urgency by the rise of the Internet
and electronic commerce. Internet and digital firm technologies make it easier than ever to
assemble, integrate, and distribute information, unleashing new concerns about the appropriate
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use of customer information, the protection of personal privacy, and the protection of intellectual
property.
Other pressing ethical issues raised by information systems include establishing accountability
for the consequences of information systems, setting standards to safeguard system quality that
protects the safety of the individual and society, and preserving values and institutions
considered essential to the quality of life in an information society. When using information
systems, it is essential to ask, What is the ethical and socially responsible course of action?
3.1.1 A Model for Thinking about Ethical, Social and Political Issues
Ethical, social, and political issues are closely linked. The ethical dilemma you may face as a
manager of information systems typically is reflected in social and political debate. One way to
think about these relationships is given in Figure 5.1. Imagine society as a more or less calm
pond on a summer day, a delicate ecosystem in partial equilibrium with individuals and with
social and political institutions. Individuals know how to act in this pond because social
institutions (family, education, organizations) have developed well-honed rules of behavior, and
these are supported by laws developed in the political sector that prescribe behavior and promise
sanctions for violations.
Figure 5.1 Relationships between Ethical, Social, and Political Issues in an Information
Society
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Source: Adopted in Laudon 2007 Management Information Systems

3.1.2 Five Moral Dimensions of the Information Age
The major ethical, social, and political issues raised by information systems include the
following moral dimensions:
Information rights and obligations. What information rights do individuals and organizations
possess with respect to themselves? What can they protect?
Property rights and obligations. How will traditional intellectual property rights be protected in a
digital society in which tracing and accounting for ownership are difficult and ignoring such
property rights is so easy?
Accountability and control. Who can and will be held accountable and liable for the harm done
to individual and collective information and property rights?
System quality. What standards of data and system quality should we demand to protect
individual rights and the safety of society?
Quality of life. What values should be preserved in an information- and knowledge-based
society? Which institutions should we protect from violation? Which cultural values and
practices are supported by the new information technology?
3.2
Ethics in an Information Society
Ethics is a concern of humans who have freedom of choice. Ethics is about individual choice:
When faced with alternative courses of action, what is the correct moral choice? What are the
main features of ethical choice?
3.2.1 Basic Concepts: Responsibility, Accountability and Liability
Ethical choices are decisions made by individuals who are responsible for the consequences of
their actions.
Responsibility- is a key element of ethical action. Responsibility means that you accept the
potential costs, duties, and obligations for the decisions you make.
Accountability- is a feature of systems and social institutions: It means that mechanisms are in
place to determine who took responsible action, and who is responsible. Systems and institutions
in which it is impossible to find out who took what action are inherently incapable of ethical
analysis or ethical action.
Liability- extends the concept of responsibility further to the area of laws. Liability is a feature of
political systems in which a body of laws is in place that permits individuals to recover the
damages done to them by other actors, systems, or organizations.
Due process is a related feature of law-governed societies and is a process in which laws are
known and understood, and there is an ability to appeal to higher authorities to ensure that the
laws are applied correctly.
These basic concepts form the underpinning of an ethical analysis of information systems and
those who manage them. First, information technologies are filtered through social institutions,
organizations, and individuals. Systems do not have impacts by themselves. Whatever
information system impacts exist are products of institutional, organizational, and individual
actions and behaviors.
Second, responsibility for the consequences of technology falls clearly on the institutions,
organizations, and individual managers who choose to use the technology. Using information
technology in a socially responsible manner means that you can and will be held accountable for
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the consequences of your actions. Third, in an ethical, political society, individuals and others
can recover damages done to them through a set of laws characterized by due process.
3.3
Ethical Analysis
When confronted with a situation that seems to present ethical issues, how should you analyze it?
The following five-step process should help:
Identify and describe clearly the facts. Find out who did what to whom, and where, when, and
how. In many instances, you will be surprised at the errors in the initially reported facts, and
often you will find that simply getting the facts straight helps define the solution. It also helps to
get the opposing parties involved in an ethical dilemma to agree on the facts.
Define the conflict or dilemma and identify the higher-order values involved. Ethical, social, and
political issues always reference higher values. The parties to a dispute all claim to be pursuing
higher values (e.g., freedom, privacy, protection of property, and the free enterprise system).
Typically, an ethical issue involves a dilemma: two diametrically opposed courses of action that
support worthwhile values.
Identify the stakeholders. Every ethical, social, and political issue has stakeholders: players in the
game who have an interest in the outcome, who have invested in the situation, and usually who
have vocal opinions. Find out the identity of these groups and what they want. This will be
useful later when designing a solution.
Identify the options that you can reasonably take. You may find that none of the options satisfy
all the interests involved, but that some options do a better job than others. Sometimes arriving at
a good or ethical solution may not always be a balancing of consequences to stakeholders.
Identify the potential consequences of your options. Some options may be ethically correct but
disastrous from other points of view. Other options may work in one instance but not in other
similar instances. Always ask yourself, What if I choose this option consistently over time?
3.4
The Moral Dimensions of Information Systems
In this section, we take a closer look at the five moral dimensions of information systems first
described in Figure 3-1. In each dimension, we identify the ethical, social, and political levels of
analysis and use real-world examples to illustrate the values involved, the stakeholders, and the
options chosen.
3.4.1 Information Rights: Privacy and Freedom in the Internet Age
1. Privacy is the claim of individuals to be left alone, free from surveillance or interference from
other individuals or organizations, including the state.
Claims to privacy are also involved at the workplace: Millions of employees are subject to
electronic and other forms of high-tech surveillance (Ball, 2001).
Information technology and systems threaten individual claims to privacy by making the
invasion of privacy cheap, profitable, and effective. The claim to privacy is protected in the U.S.,
Canadian, and German constitutions in a variety of different ways and in other countries through
various statutes.
2. Internet Challenges to Privacy
Internet technology has posed new challenges for the protection of individual privacy.
Information sent over this vast network of networks may pass through many different computer
systems before it reaches its final destination. Each of these systems is capable of monitoring,
capturing, and storing communications that pass through it.
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It is possible to record many online activities, including what searches have been conducted,
which Web sites and Web pages have been visited, the online content a person has accessed, and
what items that person has inspected or purchased over the Web. Much of this monitoring and
tracking of Web site visitors occurs in the background without the visitors knowledge. It is
conducted not just by individual Web sites but by advertising networks such as
Microsoft Advertising, Yahoo, and DoubleClick that are capable of tracking all browsing
behavior at thousands of Web sites. Tools to monitor visits to the World
Wide Web have become popular because they help businesses determine who is visiting their
Web sites and how to better target their offerings. (Some firms also monitor the Internet usage of
their employees to see how they are using company network resources.) The commercial demand
for this personal information is virtually insatiable.
Web sites can learn the identities of their visitors if the visitors voluntarily register at the site to
purchase a product or service or to obtain a free service, such as information. Web sites can also
capture information about visitors without their knowledge using cookie technology.
Cookies are small text files deposited on a computer hard drive when a user visits Web sites.
Cookies identify the visitors Web browser software and track visits to the Web site. When the
visitor returns to a site that has stored a cookie, the Web site software will search the visitors
computer, find the cookie, and know what that person has done in the past. It may also update the
cookie, depending on the activity during the visit. In this way, the site can customize its contents
for each visitors interests. For example, if you purchase a book on Amazon.com and return later
from the same browser, the site will welcome you by name and recommend other books of
interest based on your past purchases.
Web sites using cookie technology cannot directly obtain visitors names and addresses.
However, if a person has registered at a site, that information can be combined with cookie data
to identify the visitor. Web site owners can also combine the data they have gathered from
cookies and other Web site monitoring tools with personal data from other sources, such as
offline data collected from surveys or paper catalog purchases, to develop very detailed profiles
of their visitors.
There are now even more subtle and surreptitious tools for surveillance of Internet users.
Marketers use Web beacons as another tool to monitor online behavior.
Web beacons, also called Web bugs, are tiny objects invisibly embedded in e-mail messages and
Web pages that are designed to monitor the behavior of the user visiting a Web site or sending email. The Web beacon captures and transmits information such as the IP address of the users
computer, the time a Web page was viewed and for how long, the type of Web browser that
retrieved the beacon, and previously set cookie values. Web beacons are placed on popular Web
sites by third party firms who pay the Web sites a fee for access to their audience. Typical
popular Web sites contain 2535 Web beacons.
Other spyware can secretly install itself on an Internet users computer by piggybacking on
larger applications. Once installed, the spyware calls out to
Web sites to send banner ads and other unsolicited material to the user and it can also report the
users movements on the Internet to other computers
3.5
Property Rights: Intellectual Property
Contemporary information systems have severely challenged existing laws and social practices
that protect private intellectual property. Intellectual property is considered to be intangible
property created by individuals or corporations. Information technology has made it difficult to
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protect intellectual property because computerized information can be so easily copied or

distributed on networks. Intellectual property is subject to a variety of protections under three
different legal traditions: trade secrets, copyright, and patent law.
1.
Trade Secrets- Any intellectual work producta formula, device, pattern, or compilation
of dataused for a business purpose can be classified as a trade secret, provided it is not based
on information in the public domain. Protections for trade secrets vary from state to state. In
general, trade secret laws grant a monopoly on the ideas behind a work product, but it can be a
very tenuous monopoly.
Software that contains novel or unique elements, procedures, or compilations can be included as
a trade secret. Trade secret law protects the actual ideas in a work product, not only their
manifestation. To make this claim, the creator or owner must take care to bind employees and
customers with nondisclosure agreements and to prevent the secret from falling into the public
domain.
The limitation of trade secret protection is that, although virtually all software programs of any
complexity contain unique elements of some sort, it is difficult to prevent the ideas in the work
from falling into the public domain when the software is widely distributed.
2.
Copyright is a statutory grant that protects creators of intellectual property from having
their work copied by others for any purpose during the life of the author plus an additional 70
years after the authors death. For corporate-owned works, copyright protection lasts for 95 years
after their initial creation.
3.
A patent grants the owner an exclusive monopoly on the ideas behind an invention for 20
years. The congressional intent behind patent law was to ensure that inventors of new machines,
devices, or methods receive the full financial and other rewards of their labor and yet make
widespread use of the invention possible by providing detailed diagrams for those wishing to use
the idea under license from the patents owner.
3.6
Challenges to Intellectual Property Rights
Contemporary information technologies, especially software, pose severe challenges to existing
intellectual property regimes and, therefore, create significant ethical, social, and political issues.
Digital media differ from books, periodicals, and other media in terms of ease of replication; ease
of transmission; ease of alteration; difficulty in classifying a software work as a program, book,
or even music; compactnessmaking theft easy; and difficulties in establishing uniqueness.
The proliferation of electronic networks, including the Internet, has made it even more difficult
to protect intellectual property. Before widespread use of networks, copies of software, books,
magazine articles, or films had to be stored on physical media, such as paper, computer disks, or
videotape, creating some hurdles to distribution. Using networks, information can be more
widely reproduced and distributed.
The Internet was designed to transmit information freely around the world, including
copyrighted information. With the World Wide Web in particular, you can easily copy and
distribute virtually anything to thousands and even millions of people around the world, even if
they are using different types of computer systems. Information can be illicitly copied from one
place and distributed through other systems and networks even though these parties do not
willingly participate in the infringement.
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4.0 Conclusion
Contemporary data storage and data analysis technology enables companies to easily gather
personal data about individuals from many different sources and analyze these data to create
detailed electronic profiles about individuals and their behaviors.
5.0 Summary
Information technology is introducing changes for which laws and rules of acceptable conduct
have not yet been developed. Increasing computing power, storage, and networking
capabilitiesincluding the Internetexpand the reach of individual and organizational actions
and magnify their impacts.
The ease and anonymity with which information is now communicated, copied, and manipulated
in online environments pose new challenges to the protection of privacy and intellectual
property. The main ethical, social, and political issues raised by information systems center
around information rights and obligations, property rights and obligations, accountability and
control, system quality, and quality of life.
1. What ethical, social, and political issues are raised by information systems?
2. Explain how ethical, social, and political issues are connected and give some
Examples?
3. Differentiate between responsibility, accountability, and liability.
4. What specific principles for conduct can be used to guide ethical decisions?
5. List and describe the five steps in an ethical analysis.
6. Why do contemporary information systems technology and the Internet pose
challenges to the protection of individual privacy and intellectual property?
7. Define privacy and fair information practices?
8. Explain how the Internet challenges the protection of individual privacy and
intellectual property?
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MODULE 5
UNIT
2:TELECOMMUNICATIONS
ARCHITECTURE
CONTENTS
1.0 Introduction
2.0 Objectives
3.0 Main content
3.1 Telecommunication and Networking
3.1.1 Networking and Communication Trends
3.2 What Is a Computer Network?
3.3Key Digital Networking Technologies
3.4 Communication Networks
3.5 What Is The Internet?
3.5.1 Types of Networks
3.6 The Wireless Revolution
4.0 Conclusion
5.0 Summary
AND
THE
NEW
INFORMATION
1.0 Introduction
This unit explains the basic components of telecommunication network, network infrastructure
and transmission media. Issues of LAN topologies and how it provides business value were
highlighted.
2.0 Objectives
1. Explain the principal components of telecommunications networks and key networking
technologies?
2. Describe the features of a simple network and the network infrastructure for a large company.
3. Explain the main telecommunications transmission media and types of networks?
4. Define a LAN, and describe its components and the functions of each component.
a. Name and describe the principal network topologies.
5. Define the Internet, describe how it works, and explain how it provides business value.
3.0 Main content
3.1
Telecommunication and Networking
If you run or work in a business, you cant do without networks. You need to communicate
rapidly with your customers, suppliers, and employees. Until about 1990, businesses used the
postal system or telephone system with voice or fax for communication. Today, however, you
and your employees use computers and e-mail, the Internet, cell phones, and mobile computers
connected to wireless networks for this purpose. Networking and the Internet are now nearly
synonymous with doing business.
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3.1.1 Networking and Communication Trends

Firms in the past used two fundamentally different types of networks: telephone networks and
computer networks. Telephone networks historically handled voice communication, and
computer networks handled data traffic.
Telephone networks were built by telephone companies throughout the twentieth century using
voice transmission technologies (hardware and software), and these companies almost always
operated as regulated monopolies throughout the world. Telecommunications providers today,
such as AT&T and Verizon, offer data transmission, Internet access, cellular telephone service,
and television programming as well as voice service. Cable companies, such as Cablevision and
Comcast, now offer voice service and Internet access.
Computer networks have expanded to include Internet telephone and limited video services.
Increasingly, all of these voice, video, and data communications are based on Internet
technology.
3.2
What Is A Computer Network?
If you had to connect the computers for two or more employees together in the same office, you
would need a computer network. Exactly what is a network?
In its simplest form, a network consists of two or more connected computers.
Fig. 5.2 COMPONENTS OF A SIMPLE COMPUTER NETWORK

Illustrated here is a very simple computer network, consisting of computers, a network operating
system residing on a dedicated server computer, cable (wiring) connecting the devices, network
interface cards (NICs), switches, and a router. Source: Laudon (2012)
3.3
Key Digital Networking Technologies
Contemporary digital networks and the Internet are based on three key technologies: client/server
computing, the use of packet switching, and the development of widely used communications
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standards (the most important of which is Transmission Control Protocol/Internet Protocol, or

TCP/IP) for linking disparate networks and computers.
1.
Client/Server Computing
Client/server computing is a distributed computing model in which some of the processing
power is located within small, inexpensive client computers, and resides literally on desktops,
laptops, or in handheld devices. These powerful clients are linked to one another through a
network that is controlled by a network server computer.
The server sets the rules of communication for the network and provides every client with an
address so others can find it on the network.
Client/server computing has largely replaced centralized mainframe computing in which nearly
all of the processing takes place on a central large mainframe computer. Client/server computing
has extended computing to departments, workgroups, factory floors, and other parts of the
business that could not be served by a centralized architecture. The Internet is the largest
implementation of client/server computing.
2.
Packet Switching
Packet switching is a method of slicing digital messages into parcels called packets, sending the
packets along different communication paths as they become available, and then reassembling
the packets once they arrive at their destinations. Packet switching makes much more efficient
use of the communications capacity of a network. In packet-switched networks, messages are
first broken down into small fixed bundles of data called packets. The packets include
information for directing the packet to the right address and for checking transmission errors
along with the data. The packets are transmitted over various communications channels using
routers, each packet traveling independently.
3.
TCP/IP and Connectivity
In a typical telecommunications network, diverse hardware and software components need to
work together to transmit information. Different components in a network communicate with
each other only by adhering to a common set of rules called protocols. A protocol is a set of rules
and procedures governing transmission of information between two points in a network.
TCP/IP uses a suite of protocols, the main ones being TCP and IP. TCP refers to the Transmission
Control Protocol (TCP), which handles the movement of data between computers. TCP
establishes a connection between the computers, sequences the transfer of packets, and
acknowledges the packets sent. IP refers to the Internet Protocol (IP), which is responsible for the
delivery of packets and includes the disassembling and reassembling of packets during
transmission.
3.4
Communication Networks
Lets look more closely at alternative networking technologies available to businesses.
SIGNALS: DIGITAL VS. ANALOG
There are two ways to communicate a message in a network: either using an analog signal or a
digital signal.
An analog signal is represented by a continuous waveform that passes through a communications
medium and has been used for voice communication. The most common analog devices are the
telephone handset, the speaker on your computer, or your iPod earphone, all of which create
analog wave forms that your ear can hear.
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A digital signal is a discrete, binary waveform, rather than a continuous waveform. Digital
signals communicate information as strings of two discrete states: one bit and zero bits, which
are represented as on-off electrical pulses.
Computers use digital signals and require a modem to convert these digital signals into analog
signals that can be sent over (or received from) telephone lines, cable lines, or wireless media
that use analog signals.
Modem stands for modulator-demodulator. A modem is a device that translates digital signals
into analog form (and vice versa) so that computers can transmit data over analog networks such
as telephone and cable networks.
3.4.1 Types of Networks

There are many different kinds of networks and ways of classifying them. One way of looking at
networks is in terms of their geographic scope.
1.
Local Area Networks
A local area network (LAN) is designed to connect personal computers and other digital devices
within a half-mile or 500-meter radius. LANs typically connect a few computers in a small
office, all the computers in one building, or all the computers in several buildings in close
proximity. LANs also used to link to long-distance wide area networks and other networks
around the world using the Internet. Sometimes LANs are described in terms of the way their
components are connected together, or their topology. There are three major LAN topologies:
star, bus, and ring.
i. A star topology, all devices on the network connect to a single hub.
Figure 5.3 illustrates a simple star topology in which all network traffic flows through the hub. In
an extended star network, multiple layers of hubs are organized into a hierarchy.
ii. A bus topology, one station transmits signals, which travel in both directions along a single
transmission segment. All of the signals are broadcast in both directions to the entire network.
All machines on the network receive the same signals, and software installed on the client
computers enables each client to listen for messages addressed specifically to it. The bus
topology is the most common Ethernet topology.
iii. A ring topology connects network components in a closed loop. Messages pass from
computer to computer in only one direction around the loop, and only one station at a time may
transmit. The ring topology is primarily found in older LANs using Token Ring networking
software.
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Fig 5.3 NETWORK TOPOLOGIES

The three basic network topologies are the star, bus, and ring.
2. Wide Area Networks (WANs) span broad geographical distancesentire regions, states,
continents, or the entire globe. The most universal and powerful
WAN is the Internet. Computers connect to a WAN through public networks, such as the
telephone system or private cable systems, or through leased lines or satellites.
3. A Metropolitan Area Network (MAN) is a network that spans a metropolitan area, usually
a city and its major suburbs. Its geographic scope falls between a WAN and a LAN.
TABLE 5.1 TYPES OF NETWORKS
TYPE
Local Area Network (LAN)
Campus Area Network (CAN)
Metropolitan Area Network (MAN)
Wide Area Network (WAN)
AREA
Up to 500 meters (half a mile); an office or
floor of a building
Up to 1,000 meters (a mile); a college campus
or corporate facility
A city or metropolitan area
A transcontinental or global area
3.5
Internet
We all use the Internet, and many of us cant do without it. Its become an indispensable personal
and business tool. But what exactly is the Internet? How does it work, and what does Internet
technology has to offer for business?
Lets look at the most important Internet features.
What Is The Internet?
The Internet- is a global network of networks that uses universal standards to connect millions
of different networks with more than 1.4 billion users in over 230 countries around the world
(Laudon, 2012).
Internet Services
A client computer connecting to the Internet has access to a variety of services.
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These services include e-mail, electronic discussion groups, chatting and instant messaging,
Telnet, File Transfer Protocol (FTP), and the Web.
Table 5.2 provides a brief description of these services.
Each Internet service is implemented by one or more software programs. All of the services may
run on a single server computer, or different services may be allocated to different machines.
TABLE 5.2 MAJOR INTERNET SERVICES
E-mail
Person-to-person messaging; document
Sharing
Chatting and Instant Messaging
Interactive Conversations
Newsgroups
Discussion groups on electronic bulletin
boards
Telnet
Logging on to one computer system and
doing work on another
File Transfer Protocol (FTP)
Transferring files from computer to
Computer
World Wide Web
Retrieving,
formatting,
and displaying
information (including text, audio, graphics,
and video) using hypertext links
E-mail enables messages to be exchanged from computer to computer, with capabilities for
routing messages to multiple recipients, forwarding messages, and attaching text documents or
multimedia files to messages. Although some organizations operate their own internal electronic
mail systems, most e-mail today is sent through the Internet.
Instant messaging is a type of chat service that enables participants to create their own private
chat channels. The instant messaging system alerts the user whenever someone on his or her
private list is online so that the user can initiate a chat session with other individuals. Instant
messaging systems for consumers include Yahoo! Messenger, Google Talk, and Windows Live
Messenger.
3.6
The Wireless Revolution
If you have a cell phone, do you use it for taking and sending photos, sending text messages, or
downloading music clips? Do you take your laptop to class or to the library to link up to the
Internet? If so, youre part of the wireless revolution!
Cell phones, laptops, and small handheld devices have morphed into portable computing
platforms that let you perform some of the computing tasks you used to do at your desk. Wireless
communication helps businesses more easily stay in touch with customers, suppliers, and
employees and provides more flexible arrangements for organizing work.
Wireless technology has also created new products, services, and sales channels.
If you require mobile communication and computing power or remote access to corporate
systems, you can work with an array of wireless devices, including cell phones, smartphones,
and wireless-enabled personal computers.
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Cellular Systems
Digital cellular service uses several competing standards. In Europe and much of the rest of the
world outside the United Sates, the standard is Global System for Mobile Communication
(GSM). GSMs strength is its international roaming capability.
Earlier generations of cellular systems were designed primarily for voice and limited data
transmission in the form of short text messages. Wireless carriers now offer more powerful
cellular networks called third-generation or 3G networks, with transmission speeds ranging from
144 Kbps for mobile users in, say, a car, to more than 2 Mbps for stationary users. This is
sufficient transmission capacity for video, graphics, and other rich media, in addition to voice,
making 3G networks suitable for wireless broadband Internet access. Many of the cellular
handsets available today are 3G-enabled.
4.0 Conclusion
Contemporary networks have been shaped by the rise of client/server computing, the use of
packet switching, and the adoption of Transmission Control Protocol/Internet Protocol (TCP/IP)
as a universal communications standard for linking disparate networks and computers, including
the Internet.
5.0 Summary
A simple network consists of two or more connected computers. Basic network components
include computers, network interfaces, a connection medium, network operating system
software, and either a hub or a switch. Local area networks (LANs) connect PCs and other digital
devices together within a 500-meter radius and are used today for many corporate computing
tasks. Network components may be connected together using a star, bus, or ring topology. Wide
area networks (WANs) span broad geographical distances, ranging from several miles to
continents, and are private networks that are independently managed. Metropolitan area
networks (MANs) span a single urban area.
1. What are the principal components of telecommunications networks and key networking
technologies?
2. Describe the features of a simple network and the network infrastructure for a large company.
3. What are the main telecommunications transmission media and types of networks?
4. Define a LAN, and describe its components and the functions of each component.
a. Name and describe the principal network topologies.
5. Define the Internet, describe how it works, and explain how it provides business value.
136
Firm (10th Ed.) Pearson Prentice-Hall Inc, upper Saddle River, New Jersey
Laundon, K.C and Laudon, J.P. (1996) Management Information Systems: Organization and
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MODULE 5
UNIT 3: INFORMATION SYSTEMS SECURITY
CONTENTS
1.0 Introduction
2.0 Objectives
3.0 Main Contents
3.1 Security Vulnerability
3.1.1Why Systems are Vulnerable
3.2 Malicious Software: Viruses, Worms, Trojan Horses, and Spyware
3.3 Hackers and Computer Crime
3.3.1Hackers
3.3.2Computer Crime
3.3.3Software Vulnerability
3.4 Security and Control
3.4.1Electronic Evidence and Computer Forensics
3.5 Information Systems Controls
3.6 Risk Assessment
3.7 Disaster Recovery Planning and Business Continuity Planning
3.7.1The Role of Auditing
3.8 Technologies and Tools for Protecting Information Resources
3.8.1Firewalls, Intrusion Detection Systems, and Antivirus Software
4.0 Conclusion
5.0 Summary
6.0 Marked Tutor-Assignment
1.0 Introduction
This unit will help you see the connection between system destruction, error and abuse. System
security, safeguarding and control were equally brought to the fore.
2.0 Objectives
At the end of the unit you should understand;
1. Why information systems are vulnerable to destruction, error, and abuse?
2. What is the business value of security and control?
3. What are the components of an organizational framework for security and control?
4. What are the most important tools and technologies for safeguarding information
resources?
3.0 Main Contents
3.1
Security Vulnerability
Can you imagine what would happen if you tried to link to the Internet without a firewall or
antivirus software? Your computer would be disabled in a few seconds, and it might take you
many days to recover. If you operate a business today, you need to make security and control a
top priority.
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Security refers to the policies, procedures, and technical measures used to prevent unauthorized
access, alteration, theft, or physical damage to information systems.
Controls are methods, policies, and organizational procedures that ensure the safety of the
organizations assets; the accuracy and reliability of its records; and operational adherence to
management standards.
3.1.1 Why Systems are Vulnerable
When large amounts of data are stored in electronic form, they are vulnerable to many more
kinds of threats than when they existed in manual form. Through communications networks,
information systems in different locations are interconnected. The potential for unauthorized
access, abuse, or fraud is not limited to a single location but can occur at any access point in the
network.
In the multi-tier client/server computing environment, vulnerabilities exist at each layer and in
the communications between the layers. Users at the client layer can cause harm by introducing
errors or by accessing systems without authorization. It is possible to access data flowing over
networks, steal valuable data during transmission, or alter messages without authorization.
Radiation may disrupt a network at various points as well. Intruders can launch denial-of-service
attacks or malicious software to disrupt the operation of Web sites.
Systems malfunction if computer hardware breaks down, is not configured properly, or is
damaged by improper use or criminal acts. Errors in programming, improper installation, or
unauthorized changes cause computer software to fail. Power failures, floods, fires, or other
natural disasters can also disrupt computer systems.
Domestic or offshore partnering with another company adds to system vulnerability if valuable
information resides on networks and computers outside the organizations control. Without
strong safeguards, valuable data could be lost, destroyed, or could fall into the wrong hands,
revealing important trade secrets or information that violates personal privacy.
The popularity of handheld mobile devices for business computing adds to these woes.
Portability makes cell phones, smartphones, and tablet computers easy to lose or steal.
Smartphones share the same security weaknesses as other Internet devices, and are vulnerable to
malicious software and penetration from outsiders.
Internet Vulnerabilities
Large public networks, such as the Internet, are more vulnerable than internal networks because
they are virtually open to anyone. The Internet is so huge that when abuses do occur, they can
have an enormously widespread impact. When the Internet becomes part of the corporate
network, the organizations information systems are even more vulnerable to actions from
outsiders.
Vulnerability has also increased from widespread use of e-mail, instant messaging (IM), and
peer-to-peer file-sharing programs. E-mail may contain attachments that serve as springboards
for malicious software or unauthorized access to internal corporate systems. Employees may use
e-mail messages to transmit valuable trade secrets, financial data, or confidential customer
information to unauthorized recipients. Popular IM applications for consumers do not use a
secure layer for text messages, so they can be intercepted and read by outsiders during
transmission over the public Internets Instant messaging activity over the Internet can in some
cases be used as a back door to an otherwise secure network. Sharing files over peer-to-peer
(P2P) networks, such as those for illegal music sharing, may also transmit malicious software or
expose information on either individual or corporate computers to outsiders.
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3.2 Malicious Software: Viruses, Worms, Trojan Horses, and Spyware

Malicious software programs are referred to as malware and include a variety of threats, such as
computer viruses, worms, and Trojan horses. A computer virus is a rogue software program that
attaches itself to other software programs or data files in order to be executed, usually without
user knowledge or permission. Most computer viruses deliver a payload. The payload may be
relatively benign, such as the instructions to display a message or image, or it may be highly
destructivedestroying programs or data, clogging computer memory, reformatting a
computers hard drive, or causing programs to run improperly. Viruses typically spread from
computer to computer when humans take an action, such as sending an e-mail attachment or
copying an infected file. Most recent attacks have come from worms, which are independent
computer programs that copy themselves from one computer to other computers over a network.
(Unlike viruses, they can operate on their own without attaching to other computer program files
and rely less on human behavior in order to spread from computer to computer. This explains
why computer worms spread much more rapidly than computer viruses.) Worms destroy data
and programs as well as disrupt or even halt the operation of computer networks.
Worms and viruses are often spread over the Internet from files of downloaded software, from
files attached to e-mail transmissions, or from compromised e-mail messages or instant
messaging. Viruses have also invaded computerized information systems from infected disks
or infected machines. E-mail worms are currently the most problematic.
Malware targeting mobile devices is not as extensive as those targeting computers, but is
spreading nonetheless using e-mail, text messages, Bluetooth, and file downloads from the Web
via Wi-Fi or cellular networks.
The Trojan horse is not itself a virus because it does not replicate, but it is often a way for viruses
or other malicious code to be introduced into a computer system.
3.3
Hackers and Computer Crime
3.3.1 Hackers
A hacker is an individual who intends to gain unauthorized access to a computer system. Within
the hacking community, the term cracker is typically used to denote a hacker with criminal
intent, although in the public press, the terms hacker and cracker are used interchangeably.
Hackers and crackers gain unauthorized access by finding weaknesses in the security protections
employed by Web sites and computer systems, often taking advantage of various features of the
Internet that make it an open system that is easy to use. Hacker activities have broadened beyond
mere system intrusion to include theft of goods and information, as well as system damage and
cyber vandalism, the intentional disruption, defacement, or even destruction of a Web site or
corporate information system.
Spoofing and Sniffing
Hackers attempting to hide their true identities often spoof, or misrepresent, themselves by using
fake e-mail addresses or masquerading as someone else.
Spoofing also may involve redirecting a Web link to an address different from the intended one,
with the site masquerading as the intended destination. For example, if hackers redirect
customers to a fake Web site that looks almost exactly like the true site, they can then collect and
process orders, effectively stealing business as well as sensitive customer information from the
true site. We provide more detail on other forms of spoofing in our discussion of computer crime.
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A sniffer is a type of eavesdropping program that monitors information traveling over a network.
When used legitimately, sniffers help identify potential network trouble spots or criminal activity
on networks, but when used for criminal purposes, they can be damaging and very difficult to
detect. Sniffers enable hackers to steal proprietary information from anywhere on a network,
including e-mail messages, company files, and confidential reports.
3.3.2 Computer Crime
Identity Theft
With the growth of the Internet and electronic commerce, identity theft has become especially
troubling. Identity theft is a crime in which an imposter obtains key pieces of personal
information, such as social security identification numbers, drivers license numbers, or credit
card numbers, to impersonate someone else. The information may be used to obtain credit,
merchandise, or services in the name of the victim or to provide the thief with false credentials.
One increasingly popular tactic is a form of spoofing called phishing. Phishing involves setting
up fake Web sites or sending e-mail or text messages that look like those of legitimate businesses
to ask users for confidential personal data. The message instructs recipients to update or confirm
records by providing social security numbers, bank and credit card information, and other
confidential data either by responding to the e-mail message, by entering the information at a
bogus Web site, or by calling a telephone number.
Internal Threats: Employees
We tend to think the security threats to a business originate outside the organization. In fact,
company insiders pose serious security problems. Employees have access to privileged
information, and in the presence of sloppy internal security procedures, they are often able to
roam throughout an organizations systems without leaving a trace. Studies have found that user
lack of knowledge is the single greatest cause of network security breaches. Many employees
forget their passwords to access computer systems or allow co-workers to use them, which
compromises the system.
Malicious intruders seeking system access sometimes trick employees into revealing their
passwords by pretending to be legitimate members of the company in need of information. This
practice is called social engineering.
3.3.3 Software Vulnerability
Software errors pose a constant threat to information systems, causing untold losses in
productivity. Growing complexity and size of software programs, coupled with demands for
timely delivery to markets, have contributed to an increase in software flaws or vulnerabilities. A
major problem with software is the presence of hidden bugs or program code defects. Studies
have shown that it is virtually impossible to eliminate all bugs from large programs. Flaws in
commercial software not only impede performance but also create security vulnerabilities that
open networks to intruders. Each year security firms identify thousands of software
vulnerabilities in Internet and PC software. For instance, in 2009, Symantec identified 384
browser vulnerabilities: 169 in Firefox, 94 in Safari, 45 in Internet Explorer, 41 in Chrome, and
25 in Opera. Some of these vulnerabilities were critical (Symantec, 2010).
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3.4 Security and Control

Many firms are reluctant to spend heavily on security because it is not directly related to sales
revenue. However, protecting information systems is so critical to the operation of the business
that it deserves a second look. Companies have very valuable information assets to protect.
Systems often house confidential information about individuals taxes, financial assets, medical
records, and job performance reviews. They also can contain information on corporate
operations, including trade secrets, new product development plans, and marketing strategies.
Government systems may store information on weapons systems, intelligence operations, and
military targets. These information assets have tremendous value, and the repercussions can be
devastating if they are lost, destroyed, or placed in the wrong hands.
3.4.1 Electronic Evidence and Computer Forensics
Security, control, and electronic records management have become essential for responding to
legal actions. Much of the evidence today for stock fraud, embezzlement, theft of company trade
secrets, computer crime, and many civil cases are in digital form. In addition to information from
printed or typewritten pages, legal cases today increasingly rely on evidence represented as
digital data stored on portable floppy disks, CDs, and computer hard disk drives, as well as in email, instant messages, and e-commerce transactions over the Internet. E-mail is currently the
most common type of electronic evidence. In a legal action, a firm is obligated to respond to a
discovery request for access to information that may be used as evidence, and the company is
required by law to produce those data. The cost of responding to a discovery request can be
enormous if the company has trouble assembling the required data or the data have been
corrupted or destroyed. Courts now impose severe financial and even criminal penalties for
improper destruction of electronic documents.
Computer forensics is the scientific collection, examination, authentication, preservation, and
analysis of data held on or retrieved from computer storage media in such a way that the
information can be used as evidence in a court of law. It deals with the following problems:
Recovering data from computers while preserving evidential integrity
Securely storing and handling recovered electronic data
Finding significant information in a large volume of electronic data
Presenting the information to a court of law
Electronic evidence may reside on computer storage media in the form of computer files and as
ambient data, which are not visible to the average user. An example might be a file that has been
deleted on a PC hard drive. Data that a computer user may have deleted on computer storage
media can be recovered through various techniques. Computer forensics experts try to recover
such hidden data for presentation as evidence.
3.5
Information Systems Controls
Information systems controls are both manual and automated and consist of both general controls
and application controls.
General controls govern the design, security, and use of computer programs and the security of
data files in general throughout the organizations information technology infrastructure. On the
whole, general controls apply to all computerized applications and consist of a combination of
hardware, software, and manual procedures that create an overall control environment. General
controls include software controls, physical hardware controls, computer operations controls,
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data security controls, controls over implementation of system processes, and administrative
controls.
Application controls are specific controls unique to each computerized application, such as
payroll or order processing. They include both automated and manual procedures that ensure that
only authorized data are completely and accurately processed by that application. Application
controls can be classified as (1) input controls, (2) processing controls, and (3) output controls.
Input controls check data for accuracy and completeness when they enter the system. There are
specific input controls for input authorization, data conversion, data editing, and error handling.
Processing controls establish that data are complete and accurate during updating. Output
controls ensure that the results of computer processing are accurate, complete, and properly
distributed.
3.6
Risk Assessment
Before your company commits resources to security and information systems controls, it must
know which assets require protection and the extent to which these assets are vulnerable. A risk
assessment helps answer these questions and determine the most cost-effective set of controls for
protecting assets.
A risk assessment determines the level of risk to the firm if a specific activity or process is not
properly controlled. Not all risks can be anticipated and measured, but most businesses will be
able to acquire some understanding of the risks they face. Business managers working with
information systems specialists should try to determine the value of information assets, points of
vulnerability, the likely frequency of a problem, and the potential for damage.
3.7
Disaster Recovery Planning and Business Continuity Planning
If you run a business, you need to plan for events, such as power outages, floods, earthquakes, or
terrorist attacks that will prevent your information systems and your business from operating.
Disaster recovery planning devises plans for the restoration of computing and communications
services after they have been disrupted. Disaster recovery plans focus primarily on the technical
issues involved in keeping systems up and running, such as which files to back up and the
maintenance of backup computer systems or disaster recovery services.
Business continuity planning focuses on how the company can restore business operations after a
disaster strikes. The business continuity plan identifies critical business processes and determines
action plans for handling mission-critical functions if systems go down to coordinate plans
addressing loss of facilities, personnel, or critical systems so that the company can continue to
operate when a catastrophic event occurs.
3.7.1 The Role of Auditing
How does management know that information systems security and controls are effective? To
answer this question, organizations must conduct comprehensive and systematic audits. An MIS
audit examines the firms overall security environment as well as controls governing individual
information systems. The auditor should trace the flow of sample transactions through the system
and perform tests, using, if appropriate, automated audit software. The MIS audit may also
examine data quality. Security audits review technologies, procedures, documentation, training,
and personnel. A thorough audit will even simulate an attack or disaster to test the response of
the technology, information systems staff, and business employees.
The audit lists and ranks all control weaknesses and estimates the probability of their occurrence.
143
3.8
Technologies and Tools for Protecting Information Resources
Businesses have an array of technologies for protecting their information resources. They include
tools for managing user identities, preventing unauthorized access to systems and data, ensuring
system availability, and ensuring software quality.
1.
Identity Management and Authentication
Large and midsize companies have complex IT infrastructures and many different systems, each
with its own set of users. Identity management software automates the process of keeping track
of all these users and their system privileges, assigning each user a unique digital identity for
accessing each system. It also includes tools for authenticating users, protecting user identities,
and controlling access to system resources. To gain access to a system, a user must be authorized
and authenticated.
Authentication refers to the ability to know that a person is who he or she claims to be.
Authentication is often established by using passwords known only to authorized users. An end
user uses a password to log on to a computer system and may also use passwords for accessing
specific systems and files. However, users often forget passwords, share them, or choose poor
passwords that are easy to guess, which compromises security. Password systems that are too
rigorous hinder employee productivity. When employees must change complex passwords
frequently, they often take shortcuts, such as choosing passwords that are easy to guess or
writing down their passwords at their workstations in plain view. Passwords can also be sniffed
if transmitted over a network or stolen through social engineering. New authentication
technologies, such as tokens, smart cards, and biometric authentication, overcome some of these
problems. A token is a physical device, similar to an identification card, which is designed to
prove the identity of a single user. Tokens are small gadgets that typically fit on key rings and
display passcodes that change frequently. A smart card is a device about the size of a credit card
that contains a chip formatted with access permission and other data. (Smart cards are also used
in electronic payment systems.) A reader device interprets the data on the smart card and allows
or denies access.
Biometric authentication uses systems that read and interpret individual human traits, such as
fingerprints, irises, and voices, in order to grant or deny access. Biometric authentication is based
on the measurement of a physical or behavioral trait that makes each individual unique. It
compares a persons unique characteristics, such as the fingerprints, face, or retinal image,
against a stored profile of these characteristics to determine whether there are any differences
between these characteristics and the stored profile. If the two profiles match, access is granted.
Fingerprint and facial recognition technologies are just beginning to be used for security
applications, with many PC laptops equipped with fingerprint identification devices and several
models with built-in webcams and face recognition software.
3.8.1 Firewalls, Intrusion Detection Systems, and Antivirus Software
Without protection against malware and intruders, connecting to the Internet would be very
dangerous. Firewalls, intrusion detection systems, and antivirus software have become essential
business tools.
144
Firewalls
Firewalls prevent unauthorized users from accessing private networks. A firewall is a
combination of hardware and software that controls the flow of incoming and outgoing network
traffic. It is generally placed between the organizations private internal networks and distrusted
external networks, such as the Internet, although firewalls can also be used to protect one part of
a companys network from the rest of the network. The firewall acts like a gatekeeper who
examines each users credentials before access is granted to a network. The firewall identifies
names, IP addresses, applications, and other characteristics of incoming traffic. It checks this
information against the access rules that have been programmed into the system by the network
administrator. The firewall prevents unauthorized communication into and out of the network.
Intrusion Detection Systems
In addition to firewalls, commercial security vendors now provide intrusion detection tools and
services to protect against suspicious network traffic and attempts to access files and databases.
Intrusion detection systems feature full-time monitoring tools placed at the most vulnerable
points or hot spots of corporate networks to detect and deter intruders continually. The system
generates an alarm if it finds a suspicious or anomalous event. Scanning software looks for
patterns indicative of known methods of computer attacks, such as bad passwords, checks to see
if important files have been removed or modified, and sends warnings of vandalism or system
administration errors. Monitoring software examines events as they are happening to discover
security attacks in progress. The intrusion detection tool can also be customized to shut down a
particularly sensitive part of a network if it receives unauthorized traffic.
Antivirus and Antispyware Software
Defensive technology plans for both individuals and businesses must include antivirus protection
for every computer. Antivirus software is designed to check computer systems and drives for the
presence of computer viruses. Often the software eliminates the virus from the infected area.
However, most antivirus software is effective only against viruses already known when the
software was written. To remain effective, the antivirus software must be continually updated.
4.0 Conclusion
Firms need to establish a good set of both general and application controls for their information
systems. A risk assessment evaluates information assets, identifies control points and control
weaknesses, and determines the most cost-effective set of controls. Firms must also develop a
coherent corporate security policy and plans for continuing business operations in the event of
disaster or disruption. The security policy includes policies for acceptable use and identity
management. Comprehensive and systematic MIS auditing helps organizations determine the
effectiveness of security and controls for their information systems.
5.0 Summary
Digital data are vulnerable to destruction, misuse, error, fraud, and hardware or software failures.
The Internet is designed to be an open system and makes internal corporate systems more
vulnerable to actions from outsiders. Hackers can unleash denial-of-service (DoS) attacks or
penetrate corporate networks, causing serious system disruptions. Computer viruses and worms
can disable systems and Web sites.
145

1. Why are information systems vulnerable to destruction, error, and abuse?
2. List and describe the most common threats against contemporary information systems?
3. Define malware and distinguish among a virus, a worm, and a Trojan horse?
4. Describe the function of risk assessment and explain how it is conducted for information
systems?
5. What are the most important tools and technologies for safeguarding information resources?
6. Describe the roles of firewalls, intrusion detection systems, and antivirus software in
promoting security?
7.0 References/ Further Readings
Firm (10th Ed.) Pearson Prentice-Hall Inc, upper Saddle River, New Jersey
Laundon, K.C and Laudon, J.P. (1996) Management Information Systems: Organization and
146

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NATIONAL OPEN UNIVERSITY OF NIGERIA

COURSE CODE: LIB 810

COURSE TITLE: MANAGEMENT INFORMATION SYSTEM

LIBS 810 MANAGEMENT INFORMATION SYSTEM

COURSE TEAM----DEVELOPER-PROF ZAKARI MOHAMMED A B U Zaria

At the end of this unit, you should be able to:

Define management, information and systems

List managerial levels and functions

Distinguish between data and information

Describe how data are processed to give information.

The major functions of management include the following:

Fig. 1.1 Levels of Management

3.4.1 Open Systems

Fig. 1.2 Model of an Open System

3.5.1 Data Processing

Fig. 1.3 Data Processing Systems

3.6.1 Characteristics of Good Information

The source has been reliable in the past

3.6.2 Functions of Information

Management Information System is seen as a way of evaluating, analyzing and processing an

What are the functions of information in an organization?

At the end of this unit, you should be able to:

Define Management Information Systems (MIS)

Management Information System

Following are the characteristics of an MIS

It should be based on a long-term planning.

Managers make decisions. Decision making, generally takes a fourfold path:

PLANNING FOR MIS

PROBLEM WITH MIS

Narrow and or inappropriate emphasis of the computer system

An institution Management Information System (MIS) should be designed to achieve the

ROLE OF THE MANAGEMENT INFORMATION SYSTEMS (MIS)

MANAGEMENT INFORMATION SYSTEM AND COMPUTER

THE CHALLENGE OF INFORMATION SYSTEMS

(a) What is Management Information System?

Definition of Information Technology

Application of IT in Information Systems

3.2.1 Data Processing/Transaction Processing System

The Impact of IT on Organizations

Technology and Job Changes

At the end of this unit, you should be able to:

APPLICATION OF IT IN INFORMATION SYSTEM

3.2.1 Data Processing or Transacting Processing Systems

3.2.2 Office Support Systems

Fig. 1.4 ICT based Office Support Systems

THE IMPACT OF IT ON ORGANIZAITONS

Technology, which includes ICT, influences organizations in a variety of ways. In summary,

TECHNOLOGY AND JOB CHANGES

Cole, G.A. (1986) Management Theory and Practices, 2nd Edition.

At the end of this unit you should be able to:

A comprehensive definition of system is that used by the Open University:

FEATURES OF THE SYSTEMS APPROACH

Growth: A property arising from the combination of seeds and soy.

Obsolescence: likely to arise from consideration of financial, technical and personal

3.2.1 The Transformation Process

Closed Systems and Open Systems

Organizations as open systems attempt to monitor and anticipate environment disturbances.

The company warehouse

Fig. 1.5. Sub-system overlap

What are the key features of the system approach?

At the end of this unit you should be able to:

ORGANIZATIONS AND INFORMATION SYSTEMS

Fig. 1.7 The interaction between information technology and organization