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Instructor’s Manual to

Management
Information
Systems

M. P. Jaiswal and Monika Mital


Management Development Institute, Gurgaon
Jaipuria Institute of Management, Lucknow

© Oxford University Press 2004. All rights reserved. Not for sale or further circulation. Photocopying
prohibited. For restricted use by faculty using Management Information Systems as a text in the classroom.
Chapter 1

Core Concepts in Information Systems

Teaching Note

This being the first chapter and hence also the first session in the course on MIS, the instructor
need to cover various aspect of MIS such as its definition, need in business, trends etc.
However the teaching plan for this topic can be divided in to two sections as described
below. The first section is about the MIS concepts. The second section elaborates the
strategic use of MIS through a case study: Passenger Reservation Information Systems
(PRS) at Indian Railways.

The pedagogy for the session should be more of discussions and presentations. The PowerPoint
or OHP slides to be used to depict the diagrams and tables on MIS concepts. The
instructor must insure that all the participants/ students have come prepared with the
chapter and case study. The session may begin with the quiz for about 5 minutes on the
concepts/ case study.

The initial discussions should be focused on clarifying the need, characteristics and evolution of
MIS in organizations. It should be followed by numerous examples on MIS applications
and issues from Indian organizations. At the end the case study: PRS at Indian Railways
to be discussed and analyzed. Hence the entire session may be divided into two parts as
described below.

Hints have been provided to concept review questions, critical thinking exercises, project
assignments, and case questions to most chapters.. For the remaining chapters,
instructors are advised to encourage students to work out the review questions, exercises,
assignments, and questions on their own and arrive at solutions in the class.

The instructor begin the session by raising the following questions for discussions:
Q. What is MIS all about and how critical is it for an organization?
Students will highlight various aspects of MIS, including that of what described in the chapter
initial pages. Effort should be made to make all of them agree on some common points such as
that MIS is an integral part of organization and should not be looked merely from information
technology context.
While discussion progresses enough emphasis to made on understanding the role of MIS in
organizations. Students should be asked to list out the role of MIS in organization.
In order to understand the role of MIS in organization, the following questions may be raised for
discussion.
Q. Is MIS mainly play the role of report generation? If yes then illustrate with examples.
This can be a point of discussion and students may be asked to explain it with examples.
Q. If the answer to the above question is no then students should be asked to list out other
roles of MIS.
The other roles of MIS such as computerized business transactions, business intelligence,
decision support, cross functional as well as inter-organizational coordination etc. should be
brought out in the discussions.
Q. What are the types of Information Systems?
The following types of IS can be discussed using PPT slide and examples.
• Transaction oriented information systems
• Reporting and Measurement information systems
• Executive information systems
• Knowledge information systems
• Strategic information systems
Q. Is there any difference between IT and IS? Is IT part of IS or IS part of IT or both are same?
This need discussion as often IS is considered as part of IT.
Q. Discuss on the recent IT revolution and its impact on business.
PPT on IT revolution and IT resources to be used. Apart the recent trends business models due to
IT such as ITES, BPO, e-Services to be discussed.
Case Study: Passenger Reservation Information Systems at Indian Railways
This case is about one of the largest transaction oriented information systems in the country. The
organization is Indian railways and its primary business is logistic services for passenger as well
as freight. The passenger reservation information systems called PRS has been implemented over
a vast communication network covering almost every part of the country. The case need to be
discussed from different perspective such as to clarify the concept of MIS, its role in
organization, type of MIS etc. There can be following different points for discussion.
• What has been the impact on Indian railways business operations due to PRS?
• What kind of new services PRS has created for Indian Railways as well as for
passengers?
• Is PRS a transaction oriented IS or a strategic IS?

Solutions
Hints to concept review questions
1. Information system deals with flow and control of information among different users as well as
devices, whereas IT deals with the technology such as hardware, software, networks etc. IT is one
of the channel of information flow, however IT now plays critical role in IS.
2. In earlier days IS used to play the role of data processing and management reporting. Then it
shifted to transaction processing such as inventory and financial accounting. In 90’s the
emergence of integrated systems such as ERP played a vital role in terms of integrating different
business functions spread over vast geographical spread. The business process reengineering
became popular in late 90’s. Now with the use of intelligence information systems its strategic
role is realized and hence information systems have become a basic infrastructure to run any
business enterprise.
3. Data Processing Systems Transactional Information Systems
Data entry is not synchronized with the Data entry is synchronized with the business
business transactions transactions

Business applications are used through IT Business applications are used directly by
professionals functional departments
4. The strategic IS deal with the use of IS for planning and scenario analysis for top management
whereas strategic use of IS emphasis more towards strategic role of IS such as providing
competitive advantage, creating new business process, new business etc.
5. Information is about the processed data, whereas knowledge is about the processed information
using set of rules or pattern.
6. MS Windows 2000 is an operating system, whereas MS office is application software.
7. The business process reengineering (BPR) is about redesign of business processes while
exploiting the power of IT to achieve dramatic improvements in cost, quality, and service. It
emphasis that organizations should reengineer their business processes while exploiting the
power of IT and should not merely automate their existing processes.
8. The IT enabled business transformation is about the change in organization’s processes,
structure and people due to IT applications.
9. The following are the impact on business processes.
• Automation of cross functional business processes
• Elimination of non value adding business processes
• Simplification of complicated business processes
• Reengineering of obsolete business processes and business practices
The following are the impact on organization structure
• Reduction of layers in hierarchy
• Cross functional team orientation
• Moving towards virtual team
• Decentralization as well as centralization of structure co-exits
The following are the impact on workflow management
• Work flow automation along with integrated electronic document management
• Collaborative workflow
• Transparent workflow
The following are the impact on people
• Improved productivity
• Informed decision making
• Flexibility in work in terms of location and time
• Improved transparency in decision making
10. Information Technology that enables the business by improving the quality of service is IT
enabled services. Examples are BPO, call centre, web services etc.
Chapter 2

Information Systems Infrastructure

Teaching Note

The topic of ISI is to be discussed from concepts as well as practice aspects. The teaching plan
described below is divided into two sections. The first section is about the ISI concepts,
its importance in organisations and managerial challenges in its implementation. The
second section elaborates the practical issues of ISI planning and implementation through
a case study:
IS in New Holland Tractors. The pedagogy for the session should be more of discussions and
analytical presentations. The PowerPoint or OHP slides to be used to depict the diagrams
on IS architecture. The instructor must insure that all the participants/ students have come
prepared with the chapter on ISI and case study. The session may begin with the quiz for
about 5 minutes on the concepts/ case study.
The initial discussions should be focused on clarifying the need, characteristics and evolution of
various elements associated with that of ISI. It should be followed by numerous examples
on ISI practices and issues from Indian organisations. At the end the case study: IS in
New Holland Inc. to be discussed. Hence the entire session may be divided into three
parts as described below.

The instructor begins the session by raising the following questions for discussions:
Q. What is ISI all about and how critical is it for an organisation?
Students will highlight various aspects of ISI, including that of what described in the chapter
initial pages. Effort should be made to make all of them agree on some common points
such as that ISI is about building shared technological, human, and organisational
capabilities to provide the foundation for ICT based business application systems. ISI
should not be looked from merely technological perspective.
The softer elements of ISI such as business processes, organisational structure and human
capabilities also need to be looked into while designing ISI. While discussion progresses enough
emphasis to made on understanding the critical role of ISI in organisations. Students should be
asked to list out the role of ISI in organisation. In order to understand the technological aspects of
ISI the following questions need to be raised.
Q.How does different IS computing architectures such as main frame, client-server and
distributed component functions. Illustrate with examples.
This can be explained with PPT or OHP slides with the content details taken from the chapter.
Students can be asked to draw the architecture for messaging systems such as hot mail vs
MS*Exchange/ Outlook. Students may also be asked to draw the architecture for SAP R/2, SAP
R/3, mySAP.com and IFS products to explain the functioning of various IS architectures.
Q. What are various options for network and data centre infrastructure?
The emphasis for the discussion should be more on design of network architecture. Should the
company go for a centralised or distributed data centre? Where should the data centre be located?
What are the options for communication media, protocols and topology? How to ensure the
security of data and network? Communication bandwidth may come out to be one of the major
constrains in developing countries such as India and hence some specific solutions such as
CITRIX technology need to be deployed.
The instructor then discusses managerial challenges and examples from Indian
organisations on ISI
Q. What are the managerial challenges in building ISI? Illustrate with examples
from Indian organisations.
Changes in business processes as well as in organisation structure coupled with pressure
on human capabilities may bring challenges for organisations that need to be managed
accordingly. Students should be asked to illustrate examples from Indian organisations on
such issues.
Q. What are the constrains that are typical in India or in developing countries in
building world class ISI?
Telecommunications, process reengineering, organisational capabilities in terms of adopting
world class practices may be some constrains.
The instructor finally anlyses the case Study: ISI in New Holland Tractors Inc.
This case is about building ISI for green field site of a MNC in India. The company is in the
business of tractors manufacturing and its marketing and distribution. However the company’s
USP seems to be customer’s satisfaction through value added services and products. The
customers happened to be farmers. The other critical success factors for business are supply chain
management, work flow management and product design and engineering. IT and IS were
identified as the major business drivers for the company.
It decided to implement ERP systems to adopt the best global management practices. The other
IT infrastructure includes communication network, work flow automation systems, CAD
software, and business intelligence systems. The entire IS/IT projects not only become
technologically challenging but also pose problems associated with cultural change. It would be
interesting to discuss the case from IT and as well as organizational change and capabilities
aspects. Students may be asked to draw ISI for the case company and open for discussion in
terms of its flexibility, standards, openness, security, business processes, systems integration and
effectiveness etc.

Solutions
Hints to concept review questions
1. Since it is based on propriety technology and centralised computing resources, limited use for
end users and managerial decision making. Apart it is expensive and need a specialized technical
manpower for its operations and maintenance.
2. In file server computing architecture in case of any data query commend the entire data base
file moves over network creating network congestion. In case of client-server only the requisite
queried data moves over network from server to client as part of processing is performed by
server and part by client machine.
3. In 2 tier client-server the data as well as applications software are locked –in, whereas in case
of 3 tier no such issues. Apart in case of 2-tier, there is batch access to legacy systems.
4. The distributed component architecture is based on object oriented technology whereas web
enabling client server is based on traditional procedure oriented technology.
5. The data center is where the entire corporate data resides and are accessed by distributed
clients through network. The security and access controls are some of challenges.
6. The deployment of workflow and data base technology over network demands for cross
functional business processes and therefore most of the enterprise systems such as ERP, CRM
and SCM demands for BPR.
Hints to project work assignments
Collect the systems design information for the project company and analyse its effectiveness
through secondary data (balance sheet).
• Collect the primary data in terms of its flexibility, openness, business functionality’s,
and users feedback.
• Provide your comments by analysing the different aspects and suggest for its possible
improvements.
Chapter 3

Telecommunications and Computer Network for Business

Teaching Note

The telecommunications and computer networks for business is to be discussed from two broad
aspects: one from the business opportunities that telecommunications has created for
organizations and the other from the technology components. Teaching this topic to
business students is full of challenge as majority of those students who do not have
engineering background may find difficulty in grasping technology components.
Therefore it would essential that instructor must emphasis students to come prepared well
in advance so as the to maximize the learning on applications aspects of
telecommunications in the class room. This topic should be covered in two sessions, the
first session may focus on the technological components and the second session to be
focused on business opportunities and management aspects of telecommunications. The
quiz for the first session may be taken towards the end of the session, whereas the quiz
for the second session may be taken in the beginning of the session. The PPT to be
extensively used in the first session covering most of the technological components. The
second session should be more discussion oriented apart from class room exercises and
group presentations on case study. Hence the entire topic my be divided in to three parts
spread over two sessions as described below.
Technology components of telecommunication networks.
The instructor begin the session by raising the following questions for discussions:
Q. What are the technical building blocks of an organizations telecommunication/ computer
network infrastructure? Draw the schematic diagram to depict the same.
Students should be asked to write the answer in their notebook and some selected students should
be asked to explain it in the board. The instructor may summarize it using PPT showing the
technical building blocks such as transmission media, server, workstations/nodes, transmission
technology, Switches, network standards and protocols.
Q. How is LAN different from that of MAN and WAN?
PPT to be used to explain this. Also different types of LAN topology such as bus, ring, star, mesh
etc. should be discussed using PPT or diagrams in the board. Students should be actively involved
in discussion. May be they should be asked to illustrate with examples.
Q. Explain the functioning of seven layers OSI model.
Students should be asked to list out all the seven layers staring from applications layers to
physical layers. The Students can be divided into seven groups and each group should be asked to
explain the functioning of different layers. At the last PPT can be shown to summarize the OSI
model.
Q. Briefly explain the differences between circuit switching and packet switching.
This can be discussed with examples and diagrams in the board. Why analog telephone systems
uses packet switching while digital networks uses packet switching technology? What are the pro
and cons of both the technology?
Q. What is IP addressing all about?
This should be done starting from IP addressing scheme, classifications in to A, B, C and D
classes, subnetting network design etc. This can be explained more effectively through class
exercise and examples.
Business opportunities and management challenges of telecommunication network.
The advent of modern telecommunications and computer networks such as LAN, WAN and
Internet has not only reshaped the ways of business but also provided opportunities for new
businesses. Some of the prominent examples include railways reservation systems, anywhere
banking systems, IT enabled services etc. Students should be asked to bring out issues related
with the business opportunities and management challenges associated with that of
telecommunications. Apart the following questions may be raised in the class.
Q. List out any 10 examples of business applications from manufacturing/ service
sector that can be managed effectively without the use of telecommunications.
(please list out in 5 minutes time)
Q. Explain how telecommunications network can be used to reduce undesirable
inventories by a large manufacturing cum distribution corporations such as
Indian Oil Corporations (IOC) or Hindusthan Liver Limited (HLL).
Inventory information can be shared over dispersed geographical locations over wide area
networks. Even new method of inventory such as vendor managed inventory can also be
introduced due to telecommunication network.
Q. Explain the impact of telecommunications on MIS.
The following impact on MIS due to telecommunications.
• The role of MIS has changed from that of report generator to decision support
• The MIS is not merely confined to intra organization but also inter organization as
well as inter industry
Q. How to design and implement telecommunication infrastructure for an
organization?
Please refer to table 3.9 in the chapter. This may also be taken as a group project.
Case Study- IP addressing for a Metro Area Network
This case is about designing IP based network for a group of school dispersed over metro area.
The students in different groups should be asked to carry out the network requirement analysis
and accordingly design the network. The case has the following design assumptions and hence
should be taken care in the solution proposed.
• The network must be designed using private IP address
• The structured IP address to be preferred so as to improve manageability of network
• The use of dynamic routing protocols should be avoided
• The above design concerns must be discussed so as to justify the same as per the scenario in
the case. It is quite likely that different groups may suggest different solutions and each
solution to be discussed. The best solution design to be identified.

Solutions
Hints to concept review questions
1. How is broadcast network different from that of point to point?
In point to point network each pair of nodes have separate communication channels whereas in
the broadcast network there is a single communication channel shared by all nodes.
2. Explain the functioning of network protocol.
The network protocols are the set of rules that allow devices to communicate.
3. What is latency?
Latency or delay is the time that a packet takes to make its way through a network end to end. In
telephony terms, it is the measure of time it takes the talker's voice to reach the listener's ear
4. Explain the difference between circuit switching and packet switching with examples.
In the circuit switching, the network establishes a physical path during the message transfer
period, whereas in the packet switching no such physical path is required to establish. The circuit
switching is generally used in voice telephony. The computer networks deploy the packet
switching.
5. List out all the seven layers of OSI reference model and explain the functioning of any two
layers.
Please refer to the chapter.
6. Discuss why ATM might replace Frame relay in coming years?
ATM and Frame relay both are packet switched networks. However ATM provides following
differences from frame relay:
• ATM uses fixed length packet of 53 bytes, which makes it more suitable for voice
transmission
• ATM is scalable and bandwidth on demand services becomes possible
7. What is the role of router in network?
The router is used to connect two or more network with same or different data link protocols, but
the same network protocols. Router operates at the network layer and used to route the messages
based on the routing table algorithm.
8. List out any five-performance parameters for network design.
• Response Time
• Latency
• Bandwidth
• Network availability
• Reliability
9. What are the nine steps in network design and management?
• Business and Technical Need Analysis
• Network Design Plan
• Understand the Existing Network (if exist)
• Defining the New Network Requirements
• Network Security Design
• Designing Network Configurations
• Selection of products, vendors and implementers
• Implementing the Network
• Managing the Network
10. How does firewall function in network security?
The firewall filters the incoming as well as outgoing messages in the network based on security
policy with respect to source/destination IP address.
Chapter 4

Database Management

Teaching Note
Step 1.
Starts the session with bringing before the students the importance of data for decision making.
All processes in a business are either creating or using some data. For example the HR function
creates and stores data related to employees personal details, qualification and skills history.
Similarly, the projects on which an employee has worked and their performance history and the
sales function, captures data related to customers, distributors, sales person performance etc.
And the inventory function captures data related to product inventories, their suppliers and cost of
product. It is important for the students to understand the organization of data in a database
management system , how data is stored in various DBMS formats and how this data can be
converted into information through queries , reports and functions. This part of the chapter
stresses on the creation and manipulation of databases in various DBMS formats like
MS-EXCEL , MS-ACCESS, ORACLE etc.
Step 2.
Once the students understand how data is captured through transaction processing systems and
stored in DBMS formats, they need to understand the importance of sharing of data all over the
organization. Here it is important to discuss the concept of converting of data from one DBMS
format to another. For example a database made in MS-EXCEL should be convertible to MS-
ACCESS format, and a database made in MS-ACCESS should be accessible in ORACLE format.
Under this section it is important to bring forth to the students the concept of export and import
utilities in various database management systems.
Step 3.
Once the students understand the concept of data conversion from one DBMS format to another,
then the concept of the distributed information systems architecture and composite information
systems should be discussed. Both DIS and CIS work on the principle of separation of database
from the application that creates or manipulates the database. At this stage the role of data
integration can be brought forth with a real world case study of DIS, CIS or data integration
efforts made by some of the Indian Businesses, some examples of the same being ICICI ,
Mahindra and Mahindra etc.
Solutions
Hints to concept review questions
1. Data stored in a traditional file environment is program dependent and can be used only within
the same application. A DBMS environment supports sharing of data between applications.
2. The architecture of a database management system is divided into two parts 1) creation of
databases i.e. Data definition language 2) querying of databases i.e. data manipulation language.
Refer to the book for drawing a diagram of DMS architecture.
3. External schema refers to the database design as viewed by business users or functions.
Conceptual schema refers to the database design at the organizational level. Internal schema
represents the database design at the physical storage level.
4. The various types of databases are: transaction databases, operational databases,
multidimensional databases, unstructured databases. Data is stored in the form of rows and
columns in a structured databases. These databases are generally used for storing of transactional
databases. Unstructured databases are used for storing of data in the form of pictures,
photographs, drawings etc.
5. Normalization refers to breaking up of a single table into a set of related tables. De-
normalization stands for combining the related tables to form a single table once again.
Normalization is used for data storage whereas de-normalization is used for data retrieval or data
mining.
6. In today’s business environment, the databases are distributed all over the organization. These
databases although created and stored in one location should be usable at multiple locations. A
distributed database management system supports this kind of business computing environment.
7. In a distributed database environment the databases are stored where they are created i.e. with
the application, while in a composite information system environment the database is stored in a
different location from the location of the application.
8. Data integration entails combining data from several data sources and storing it in a central
data warehouse.
9. In the data staging area, the data is extracted from the transactional databases and stored in a
data warehouse. In the data presentation area, the data stored in the data warehouse is used for
mining and decision making.
10. Meta data is a data dictionary which stores the information about where data is being created,
where is it being used, what is the format of the data etc.
Hints to project work assignments
1. Create a database in MS-Excel with fields order number, customer name, customer address,
sales person ID, product number, product description, quantity, price per unit, total amount. Use
criteria (formula for calculating the sales incentive and function for calculating the monthly total
sales figure for a sales person), to calculate the sales incentive every month for each employee at
the rate of 15% of sales amount. Use another criteria (function) to find out the sales representative
who reported the highest sales.
2. Create a database in MS-ACCESS with tables for employee details, a percentage table (to store
the values of DA, HRA , TA and PPF deduction percentages). The Salary slip report is created
from the data returned from a query (which takes the relevant data from the two tables, performs
calculations and totals and then returns the data to the report). In the property sheet of the salary
slip report, the design view is set to the name of that query. A salary sip report is created for
each row of data. The monthly salary report uses the results from the same query but the report
shows all the rows of the query on the same sheet. The various percentages are: DA is 49% of
basic, HRA is 12% of (Basic+DA), TA is Rs. 800, CCA is Rs. 240, EPF is 12% of (Basic + DA)
SALARY STATEMENT
Total Income gross
S.No. pf_ac_no Basic DA CCA HRA TR_allow Salary EPF _ tax salary
MM/20011/ 10981.0
1 307 22400 8512.00240 3360.00800 35312.00 3709.001000 0
UP/1087/30 19825.0
2 3 13875 5272.50240 2081.25800 22269.00 2298.002500 0
UP/10871/3 14959.0
3 09 13500 5130.00240 2025.00800 21695.00 2236.002000 0
UP/10871/3 16948.0
4 17 13125 4987.50240 1968.75800 21121.00 2173.002000 0
SALARY SLIP FOR THE MONTH OF SEPTEMBER

Name: Prof. Deewakar Pf_ac_no : 20011/307


Designation: Director Scale_of_pay: 22400-600-26000
Date_of_joi 16-Jul-1995 Increment Month: Jul

EARNINGS Rs. DEDUCTIONS Rs.


Basic 22400.00 Provident Fund 3709.00
DA: 8512.00 Income tax 1000.00
CCA: 240.00 PF loan repayment 5000.00
HRA 3360.00 Advances 0.00
Transport Allowance 800.00 Others 0.00
arrear 0.00
Others 0.00
TOTAL 35312.00 TOTAL 9709.00

Net salary payable : 25603.00


Medical Reimbursement: 5378.00
Gross Amount Payable : 30981.00

A sum of 30981.00 only has been credited to your S/B Account --


of -----------

ACCOUNTS OFFICER

Hints to case study questions


1. To achieve visibility for controlling the business, it was necessary to integrate the operations,
different applications and leverage the knowledge base it had generated during various processes
for efficiency and overall asset productivity. The integration and seamless flow of real-time
information has enabled faster decision- making and a quicker response to the customer. Also, the
advanced process control and optimisation system have helped BPCL in optimisation of
resources and inventories as well as efficient credit and treasury management.
2. It is possible to integrate the legacy applications through distributed information systems or
composite information systems architecture. The legacy applications could be based on different
software platforms, storing data in different database management systems formats and could be
geographically displaced from each other. In fact the concept of composite information systems
came into being as a result phased out implementation of multi-platform applications like ERP,
E-business, Knowledge management, SCM, HRIS etc. to support business processes. The data
from all these sources need to be integrated for better business performance.

3. A data warehouse can be considered one of the organisations important resource, which stores
historical data. It can help in understanding certain trends and patterns, which are otherwise very
unperceivable. A data warehouse can also act as a central source of organizations data. The data
marts which support operations are made out the data warehouses. A data warehouse can prove to
be an important asset for decision making and creating a learning organization.
Chapter 5

Information Systems for Sales and Marketing

Teaching Note

The Information Technology revolution started with the automation of the manufacturing
processes (CAD/CAM) in the 1970s and 1980s but the application of computers in other
functional areas the rest of the organization was almost negligible. In the non-manufacturing side
of business, computers were mainly deployed in the finance and accounting departments to be
used as programmed calculators, and the stress was on saving space through storage of data on
computers. With the advancement in technology, the application of information technology has
changed from just data storage in electronic media to try and extract information from the data to
enable the other business processes besides manufacturing. This chapter details the use of
information systems in the field of sales and marketing. In the earlier days data was keyed and re-
keyed at different points in the marketing process, for example a purchase order was made on a
computer, then a printout was sent to the central office, at the central office the purchase order
data was again keyed into the computer. Thus the same data was keyed into the computer again
and again. This resulted in problems like data anomalies, redundancy of data, mismatching of
data etc. The process oriented approach that we take in the chapter highlights the importance of
capturing every piece of data once and that too at the point of origination, and then using that data
to take better business decisions based on the latest and authentic data. There are a wide range of
information technology applications which the organizations can use alone or in combination to
enable the marketing process.
To extract the maximum benefit out of Information systems applications there are three
important steps:
Step 1: Identify all the points where transaction data is being generated for example orders,
invoice, shipment data, daily inventory, daily sales reports, etc. This data can be captured using
any of the application packages like, MS-Access, Oracle, Db2 can be exported/imported amongst
each other. There is compatibility among various software packages and the stress is towards
interoperatibility. The telecommunications infrastructure provides an effective means to transmit
the data from one point to the other through the private Intranet or the cost-effective public
Internet with equal ease. The transaction capturing system helps in capturing transaction data at
various points in the marketing cycle. This data can be captured using any of the Database
Management Systems (DBMS) like Access, Excel, Foxpro, Oracle, DB2 etc. The data captured in
any one of these DBMS can be exported to any other DBMS through ODBC (Other Data Base
Connectivity) administrator.
Step 2: The data is created only once but can be used at many places. For example, a purchase
order carries customer and sales person related information to be used by the sales department,
cost and amount related information to be used by the finance department, the product and
features related information to be used by the manufacturing department, and the product and
quantity related information to be used by the inventory. This necessitates the storage of data at
some central location where it can be accessed by the respective departments on need basis. The
Intranet and the Internet technology with respective software applications like browsers, EDI can
enable the transmission of data from remote far off sites, as well as the business partners site to
the central location. Using HTML, Active server pages, VBscript, Javascript etc data can be
posted in the database located in the central location from where it can be accessed by all
departments.
Step 3: Once the data is available in a central location in a standard format it can be accessed by
local as well as remote users. Local users can extract information through the database using any
of the querying tools like MS-Query, MS-Access, SQL (Structured Query Language) etc. To help
remote users extract information from the central database, the users need to have an Intranet or
the Internet access. Software like Active Server Pages, Vbscript, and Javascript can enable
searching and querying of remote databases. One can extract information using simple querying
tools but to further take the benefit of this data to analyse, simple analysis tools like co-relation
functions, regression functions are available in most of the DBMS. Then there are more complex
OLAP (Online Analytical Processing) tools to help users generate patterns out of transaction data
on the basis users can understand certain unpredictable situations better. There are datamining
tools like SPSS, SAS etc. which can be used to generate information based on historical
transaction data. The third category is to try and use the data to make business decisions for
which a variety of software packages like DSS (Decision Support Systems) generators are
available in the market. Thus we see that Information Systems enable the proper collection,
timely transmission and finally the analysis of data all along the marketing process to enable
better business decisions based on authentic transaction data.
Solutions
Hints to critical thinking exercises

Exercise 1: Flow of information is from the retailer to dealer to distributor to warehouse to


production unit to supplier. Information systems can greatly support this flow of information
along the chain and reduce the order placement cycle from a few days to a few minutes with little
or almost negligible manual intervention. Information systems in this manner can help in just-in-
time manufacturing and also lead to savings in inventory costs. Flow of goods is from the
supplier to production unit to warehouse to distributor to dealer to retailer. Since products of the
white good category are tangible and require physical transportation , information systems can
only add value to the logistics management and information tracking process of the supply chain.

Exercise 2: Create an online form using MS-frontpage or HTML , a database using MS-Access.
Make an ODBC for Access. Make a connection between the form in HTML and the database
through VB Script or ASP programming.

Exercise 3: Create the form using HTML. The form should send the data to a database through
ODBC and the internet. The sales manager can query the data posted in the database to analyze
the performance of the sales executives using SQL or Access or MS-Query.

Exercise 4: Sales order processing, inventory , online buying and selling, sales reporting, claims
processing, customer complaint handling etc. are some of the marketing activities which can be
web enabled. Find out some more.

Hint to project work assignment

Draw the supply chain as shown in figure 5.8. The Internet can be used to transmit the order for
the raw material by the franchises spread all over the country to a central database using forms in
HTML and database connectivity. Daily online data will make demand forecasting more accurate
and thus reduce wastage and overstocking.

Hints to case study questions

1. E-SCM integrates the supply chain from the supplier to the retailer end thus increasing the
effectiveness of the supply chain and at the same time lowering the cost of operations.
Information plays a very important role in distribution and logistics management. When the
transmission of this information became electronic the company was able to decide which of its
manufacturing unit could match production levels better to demand. When taking customer
orders, distributors now can check Bay Networks' inventory status to see how many routers are
available for immediate shipping, for example, and how many will be available within a week.
2. Some problems associated with the proper implementation of E-SCM are:
• It was necessary for Bay to look inside its partners' ordering systems so as to
devise a well-integrated E-SCM solution. Distributors tracked their sales weekly,
not daily. Moving from weekly to daily sales reports required distributors to do
some order-system recoding. They were a little hesitant to do the extra work and
as a result cajoling distributors to them data back was a major hurdle.
• When you're giving outsiders access to sensitive data such as production
schedules for the first time, security is a major concern.
• Not all of Bay Networks' business partners are equipped with SAP. Those that
aren't require a mechanism for translating Bay Networks' R/3 data protocol to
their own.
Chapter 6

Information Systems for Human Resource, Accounts and Finance

Teaching Note

Step1: The chapter starts with bringing before the students the importance of storing, organizing
or disseminating Human Resources related information within the HR function and with the
employees of the organization. Information Systems play a key role in the Personnel/ People
Development/ HR departments of companies. A sophisticated HRIS will simplify transactions,
automate administrative tasks, and minimize paperwork. It is important for the students to
understand that HRIS is an interactive and knowledge-based HR system which would enable an
employee to become self-sufficient and have direct communication with the concerned authority.
The first half of the chapter deals with the importance of information systems in the
transformation of an HR organization from an administrative to a strategic management focus.
The HR process comprises of the following steps: recruitment , training , performance appraisal ,
compensation and benefits administration etc. At each and every step information systems play a
very important role as discussed in the chapter. Information systems help transform the HR
function from labor intensive to information intensive. It discusses the importance of storing the
HR data in a common HR database and how this data can enable managers to devise more
effective training and development programmes, provide online training, self development
programmes, link performance appraisal to automatic incentive and promotion administration
increasing the visibility of the HR programmes and policies within the organization. It also
discusses the role of the internet and the web in the field of e-commerce with the later half of the
section discussing the importance of and e-HR website and how to effectively implement the
web-based self service model for HR as done successfully by many Indian companies.
Step 2: The second half of the chapter discusses the role of information systems in the field of
Accounting and Finance. As the accounting function transforms itself from mere automation of
the accounting procedures to more strategic finance functions like corporate valuation and
financial health analysis of an organization, the information systems change from management
accounting systems (MAS) like Tally and MAS 90 to more strategic IS applications like ERP
(Finance )or expert systems for finance. The chapter starts with the discussion of the various
types of accounting data input formats and how MS- EXCEL can be used effectively to automate
some of the accounting procedures. Some Exhibits such as Monthly Bank Reconciliation using
Excel-2000, Cash Flow Budget Worksheet in Excel-2000 etc. are discussed in the chapter. These
worksheets can be stored as templates to be used as blank forms and filled and transmitted
electronically. Then further in the chapter it is discussed how the data stored using EXCEL or any
other DBMS package can be later used to quickly report and analyze their consolidated results
across many dimensions. Time periods, customers, products, or anything else can be isolated or
consolidated to gain the visibility necessary for financial integrity.

Solutions
Hints to concept review questions
1. Information systems enable the collection of data at various points in the HR function ( HR
databases) and using computerized tools for making information available for effective decision
making.Information systems play an important role in streamlining processes, co-ordination and
work flow management. Web based Self service implementation for ensuring quality and
timeliness of HR services.

2. Applicant tracking systems are most suitable for recruitment and selection. Resume scanning
applications, On-line testing and assessment tools , initial interviewing are some of the features of
an application tracking system. It allows you to keep an extensive database of all applicants you
have considered for a position, which can be used as an ongoing source of pre-qualified
applicants for other positions that open up within your company.
3. An Online Performance Management System helps gather a large amount of performance
feedback in a very short time frame and facilitates the execution of the otherwise cumbersome
process of multi-rater or 360 degree feedback and analysis. Information systems help in the
analysis of the information from other HR modules and to identify the strengths and
weaknesses of employees. Based on these , the Development Plans can include a wide variety of
activities such as formal training, on-the-job training, special assignments, writing papers,
mentoring, etc. To facilitate the creation of Development Initiatives, links to other relevant
information (e.g. job descriptions, organizational competencies, etc) is easily possible.
4. Internet serves as the vehicle to implement the web-based self service model for the HR
function. The internet also helps to increase the visibility of the HR programmes and policies in
an organization with offices spread all over the globe.
5. E-HR is a single point of access, available anywhere, to all the information and resources
employees need to do their jobs. E-HR provides tools that help teams collaborate, content
providers publish and maintain information, and employees personalize their access to corporate
resources.
6. The top objective of the HR self-service, collaboration and community solution deployment is
to improve services to employees and managers. With self-service technology simplifying and
speeding administrative tasks, HR is able to focus on becoming more strategic, by expanding
services, aligning HR activities with business strategies and attracting and retaining key talent to
support the business direction.
7. Information Systems help reduce the cost of finance through efficient transaction transaction
processing and also provide decision makers at all levels with the right information, when and
where they need it .
8. The various reporting processes in the field of finance are balance sheet , income and expense
account , operational reports, financial statements, budget etc.
9. Information systems help in the financial planning process by enabling consolidation . The
Consolidation process automatically collects data from general ledgers and other sources—
including spreadsheets—and unites it into a single source to provide an accurate, consistent view
of enterprise finances.The Consolidation module also enables ready access and distribution of
financial information throughout your organization.
10. Financial intelligence helps automate and decentralize the planning process while building
proactive budgets based on integrated, accurate and predictive information. It also helps to
Understand the costs and profitability of products, suppliers, channels, partners and customers.
Use this information to create more accurate forecasts, budgets and simulations. Some
applications of financial intelligence are in the field of mutual funds pricing , automatic approval
of loan applications , stock market pricing etc.
Hints to project work assignments
1. Collect the different types of reports used by the HR function. They can be daily, weekly,
monthly reporting formats for employees . See the reports carefully and try to find out the fields
on which data is required and from which department/SBU/location is that information required.
Also compare the different formats to find out the common data fields in the different reports. In
case there are some common information in the different reporting formats then in that case the
storing of data in an RDBMS (chapter 4) would be a good solution. Also discuss whether an
intranet or the internet would be a better medium for sharing of information across the enterprise
and suggest a solution. Also bring forth the difference in the traditional processes viz- a –viz the
current processes in terms of effectiveness, efficiency, speed, comfort, and better employee
relations.
2. Collect the different types of reporting formats for the finance function. Discuss the traditional
processes and the type of software used for storing the financial data. Discuss the advantages of
using information systems for consolidation (combining) of data from different worksheets to
derive a financial analysis worksheet. Also try and make the different reports in EXCEL and try
and combine data from multiple sheets to make a consolidated worksheet. For example General
Ledger is the central location where all accounting transactions are received, summarized,
adjusted and balanced, yielding comprehensive financial statements. The entries in the general
ledger are a combination from a number of different sources like the order processing, inventory
management, and purchasing controls.
3. Construct an E-HR website using the MS-Frontpage application. The web based self service
application should have features like notifying for change of address, birth of a child , income tax
return form , applying for LTA , reimbursement of medical claims, guest house bookings etc.
through the intranet/internet.
4. Exercise 4 will be done exactly like the exercise 2. Some ready worksheets are already shown
in the chapter ( Exhibit 7,8,9,10 ).
Hints to case study questions
1. The software will provide management with flexibility to better streamline the operational
process of human resource data processing, collecting more data at the source and finalizing the
data at consolidated processing centers. Such data includes skills, competencies, performance,
developmental needs, and compensation. The Enterprise Human resource System will be the
vehicle for conducting transactions and collecting information on the workforce, including time
and labor tracking, performance management and planning, compensation, skills and
competencies, training, personal demographics and residence information, security clearance
information, etc. The main aim of the system is to collect of data at various points in the HR
function (HR databases) and using computerized tools for making information available for
effective decision making and to develop and improve intranet based applications for
streamlining processes, co-ordination and work flow management.
2. The current disparate systems are not capable of supporting the integrated data and processing
needs and, therefore, do not support the mandates for human capital and financial management.
By integrating ORACLE Financials and Human Resources into a single instance significant cost
savings will be realized. The software will provide management with flexibility to better
streamline the operational process of human resource and financial management data processing,
collecting more data at the source and finalizing the data at consolidated processing centers. The
new system will integrate employee data and employee costing information that is used to fully
support the many different HR processes and functions, thus improving the efficiency and
effectiveness with which our human capital is managed.
3. Information systems should be used to streamline the HR processes and enable workflow
management, reduce geographical barriers and increase the visibility of the HR efforts all over
the organization. It also helps in measuring the strategic value of human capital investments. The
main aim of information systems for HR is to align people, processes and technology around
common goals and to provide benchmarks for measuring best practices. Information Systems are
already being used by the finance function for automating the finance function and procedures
like for general ledger, budgeting, cashflow management etc. The importance of information
systems for the field of finance is not only in storing large amounts of financial data and making
automated calculations but also in applying financial intelligence tools like neural networks for
corporate health evaluation, risk management etc.
Chapter 7

Enterprise Information Systems

Teaching Note
Enterprise systems are packaged application solutions that are deployed by most of the
organization worldwide with an objective to streamline their information flow and business
processes so as to improve the decision making. Enterprise systems started out as enterprise
resource planning (ERP) and later extended to cover supply chain management (SCM), e-
procurement and customer relationship management (CRM). This chapter covers all the three
major systems i.e. ERP, SCM and CRM and hence may be taught in 3 sessions. Therefore the
teaching plan is organized in to following 3 sections.
ERP -The instructor begin the session by raising the following questions for discussions
Q. What is an ERP system all about? What way it is different from that of in-house
developed integrated information system?
This can be a point of discussion and students may be asked to explain it with examples. The
following aspects may be covered in the discussion.
• Evolution of ERP from MRP, MRP II, ERP to ERP II
• Evolution of computing architecture from main frame to client-server, web and component
technology
• Comparison between in-house developed IS and ERP
Q. Why most of the companies are replacing its in house developed IS with that of ERP
systems? What are the expected benefits from ERP?
Q. Which are the major ERP vendors and what way their product differ from each
other?
Q. What are the roles of consultant in ERP project? What are the implementation
issues/ challenges in ERP project?
E-Business- the following aspects to be discussed in this part.
Q. How is an E-Business information system different from that of an inter-
organizational information system? Also compare with that of extended ERP
systems.
Q. Is e-Procurement system part of an extended ERP system?
Q. What are the different e-auction models? Explain the functioning of reverse
auction with an example.
Case 1: Extended ERP System at HLL
This case is about innovative deployment of enterprise information systems in a large FMCG
enterprise HLL. The HLL has uniquely extended its ERP system to establish transactional and
relationship oriented business network and has achieved significant improvement in business
performance for all partners in network. It has achieved significant reductions in inventory,
improvements in cash management and a negative working capital due to improved information
flows across the network and implementation of policies such as VMI. Simultaneously it has
improved its Telecom infrastructure and re-designed the inter-organizational processes to support
these information flows. This case exhibit that how the adoption of enterprise systems across the
network along with a re-design of business network can improve and contribute significantly the
value to end consumers.
e-CRM – The following aspects to be discussed
Q. How is e-CRM different from that of ERP in terms of systems architecture?
PPT to be used to discuss this questions.
Q. Does e-CRM create value to the organization or to the customer or both? Explain
using analytical framework.
Students may come out with different approaches and hence scope of discussion.
Q. What are the main sub systems of e-CRM?
• Sales Force Automation
• E-Market
• E-Service
Case Study 2: e-CRM product selection in HECL
The case is about selection of e-CRM product for a telecom service company. The case provides
details on the criteria of product evaluation such as flexibility, analytical capabilities, architecture,
integration, price and flexibility. The following discussion points may be brought out in the class.
• Selection criteria as per company’s requirements
• Comparative analysis among all 3 options
• Design a evaluation framework and so select the product

Solutions
Hints to concept review questions
1. The following points may be used to compare
• Business Process reengineering vs Automation
• Adoption of best business practices
• Total cost of ownership (TCO)
• Cross functional integration
• Global IS Infrastructure
2. MRP II was based on main frame computing architecture whereas ERP is based on client
server architecture
• MRP II was limited to manufacturing, finance and MM whereas ERP covers all the
business functions of an organization
3. PPT may be used
4. Refer chapter for details.
5. The following critical factors are in ERP implementation
• Top Management support
• Users involvement
• Change management
• Minimum customization
• Etc.
6.
• English forward auction
• Dutch Auction
• English reverse auction
• Sealed bid auction
• Vickery auction
7.
• The reduced inventory due to reduced procurement lead time.
• The reduced cost of procurement material
• The reduced administrative cost of procurement
8. The supply chain management systems focuses on forecasting and optimization of demand/
supply gapes. The extended ERP is about transactional information systems across organizations.
9. Refer the chapter for detail
10. Refer the chapter for detail

Chapter 8

Intelligent Information Systems

Teaching Note
Step 1
The chapter starts with the discussion on the role of business intelligence in the fields of
marketing, human resource and finance. For ages IS analysis tools have been used as part of
decision support systems or stand alone to understand the trends and behavior in the business
environment. The location of the decision support tools is at the desktop of the higher end
managers. In today’s competitive business scenario, it becomes imperative that the decision
support tools are accessible to even the line managers so as to enable them to judge the day to day
scenario and make their decisions accordingly. The business intelligence tools are very user
friendly data discovery tools which can help line managers with little knowledge of information
systems and almost no knowledge of quantitative analysis. Although sophisticated packages like
ERP , CRM , E-commerce , SCM are being used by most of the organizations today, the data
collected through these software packages keeps historical data in the tape drives and other
permanent storage devices as junk. In the information age when data and information is
considered a key resource, this costly resource goes waste. This daily transaction data can be put
to good use by trying to understand business behavior. For example, a retail store may keep
detailed information about the purchases made by each customer every day but still have
difficulty pinpointing many subtle buying patterns like products which are often bought together.
Similarly, an insurance firm may keep detailed historical information about claims that have been
filed, and still have difficulty isolating some of the likely indicators of fraud. Firms in a number
of industries -- including retail, finance, healthcare and insurance -- routinely maintain enormous
amounts of data about the activities and preferences of their customers. Implicit within this data
are patterns that reveal the typical behaviors of these consumers -- behaviors that can help firms
fine-tune their marketing strategies, reduce their risks, and effectively improve their bottom line.
For example, retailers often wish to know what products typically sell together. Advances in a
field of business intelligence and data mining are helping customers leverage their data more
effectively and obtain insightful information that can give them a competitive edge. Simply put,
business Intelligence and data mining software enables customers to discover previously
undetected facts present in their business-critical data -- data that may consume many gigabytes
or terabytes of storage, may reside in files or various DBMS-managed databases, and may be
stored on a variety of operating system platforms. Accuracy, efficiency, and an open architecture
are important requirements of such data mining software. Before understanding business
intelligence, it is imperative for the students to understand how historical data is organized in a
data warehouse as discussed in detail in Chapter 4, Database Management Systems. Then the
students need to understand the various applications of business intelligence. The next step is to
understand the business intelligence loop.
Step 2
The latter half of the chapter discusses the various business intelligence tools and algorithms and
which algorithm would be best suited to what kind of problems. The business intelligence
algorithms discussed in the chapter are clustering, decision trees and neural networks. Clustering
is the method by which like records are grouped together. Clustering is sometimes used to mean
segmentation - which most marketing people will tell you is useful for coming up with a birds eye
view of the business. A decision tree is a predictive model that makes a prediction on the basis of
a series of decisions. A decision tree is a predictive model that, as its name implies, can be
viewed as a tree. Specifically, each branch of the tree is a classification question and the leaves
of the tree are partitions of the dataset with their classification. Decision tree algorithms tend to
automate the entire process of hypothesis generation and then validation much more completely
and in a much more integrated way than any other data mining techniques. They are also
particularly adept at handling raw data with little or no pre-processing. True neural networks are
biological systems (like a brain) that detect patterns, make predictions and learn. The artificial
ones are computer programs implementing sophisticated pattern detection and machine learning
algorithms on a computer to build predictive models from large historical databases. Artificial
neural networks derive their name from their historical development which started off with the
premise that machines could be made to “think” if scientists found ways to mimic the structure
and functioning of the human brain on the computer. Thus historically neural networks grew out
of the community of Artificial Intelligence rather than from the discipline of statistics. Neural
networks are used in a wide variety of applications. They have been used in all facets of business
from detecting the fraudulent use of credit cards and credit risk prediction to increasing the hit
rate of targeted mailings. They also have a long history of application in other areas such as the
military for the automated driving of an unmanned vehicle at 30 miles per hour on paved roads to
biological simulations such as learning the correct pronunciation of English words from written
text.
Solutions
Hints to concept review questions
1. Business analytics software enables organizations to monitor, capture and analyze the vast
amounts of data generated by various applications and provide management and staff at all levels
with tools necessary to optimize these processes through strategic and tactical decisions. The five
steps of business intelligence are: track (capture data), analyze (discover trends in data),
model (convert the patterns into a hypothesis or a rule ), decide (make a decision based on the
hypothesis) and monitor (train the model).
2. BI technology is designed to help businesses discover hidden patterns in their data -- patterns
that can help them understand the purchasing behaviour of their key customers, detect likely
credit card or insurance fraud, predict probable changes in financial markets, etc and create
business intelligence.
3. Retail/Marketing: identify buying behavior patterns from customers. Find associations among
customer demographic characteristics. Predict which customers will respond to mailing. Banking:
detect patterns of fraudulent credit card usage. Identify "loyal" customers. Predict customers that
are likely to change their credit card affiliation, determine credit card spending by customer
groups. Find hidden correlations between different financial indicators. Identify stocks trading
rules from historical market data. Insurance and Health Care: claims analysis - determine which
medical procedures are claimed together, predict which customers will buy new policies, identify
behavior patterns of risky customers, identify fraudulent behavior.

4. The data mining technology converts details from customer data into competitive intelligence
that companies use to predict trends and behaviours and thus understand the needs and the tastes
of their customers better.

5. Transaction capturing systems or operational systems capture data, which is later transformed,
integrated and loaded into a data warehouse. Yet despite this wealth of data, many companies
have been unable to fully capitalize on its value. This is because information that is implicit in the
data is not easy to discern. Business Intelligence and data mining software enables customers to
discover previously undetected facts present in their business-critical data -- data that may
consume many gigabytes or terabytes of storage, may reside in files or various DBMS-managed
databases, and may be stored on a variety of operating system platforms.
6. When customer psycho-graphic data collected about how satisfied are they with the ATM
facility provided by bank was analyzed using factor analysis, it was found that customers
associate convenience and spread of ATM location. It was also found that they prefer
accessibility of banking facility to manual interaction with the bank employees. Thus we see that
business analysis software’s can help businesses understand their customers better and provide
them with the most preferred products and services.

7. Discovery is finding out patterns in data. Prediction is making a decision based on the found
pattern.

8. Pattern is a group of similar records. The patterns are converted to if then rules. After a number
of predictions have been made on the basis of these rules the data is analyzed to find out how
many times the prediction turned out be true. It defines the confidence.
9. Clustering is the method by which like records are grouped together. A decision tree is a
predictive model that makes a prediction on the basis of a series of decisions. A decision tree is a
predictive model that, as its name implies, can be viewed as a tree. Specifically each branch of the
tree is a classification question and the leaves of the tree are partitions of the dataset with their
classification. Neural networks are like biological systems (like a brain) that detect patterns, make
predictions and learn. The artificial NN are computer programs implementing sophisticated
pattern detection and machine learning algorithms on a computer to build predictive models from
large historical databases. They have been used in all facets of business from detecting the
fraudulent use of credit cards and credit risk prediction to increasing the hit rate of targeted
mailings.
10. Decision Support Systems (DSS) are a class of computerized information systems that
support decision – making activities. For example, a decision like how to respond when a
customer calls in to indicate that she wishes to cancel her credit card. At the individual level, in
order to meet certain retention goals or targets for the month, the customer service agent may
simply be motivated to keep the customer from leaving at all costs. Alternatively from the
perspective of maximizing earnings and growth and lower costs, it may only make sense to retain
the customer if she is a profitable customer and her projected lifetime customer value exceeds a
certain level.
Hints to critical thinking exercises
1. MS-SQL server-2000has an inbuilt data mining package. Go through the tutorial to learn how
the package works and apply it to the problem in hand.
2. The various stages of a customer are prospect (demographic data), responder (campaign
results), new customer (initial purchase data), established customer (cross-sell campaigns),
former customer (cancellation data or not bought for a long time).
3. In a manner similar to the customer lifecycle it is possible to draw the employee lifecycle.
4. Use MS-SQL server 2000 to cluster the existing customer data. Based on the cluster
characteristics a product can be designed and a focused cross-sell campaign can be implemented
for those customers.
Hints to project work assignments
1. Collect point of sale data. Draw a cross tab. From the cross tab you can find out the
combinations of products sold together with maximum frequency. Once you the products which
sell well together, you can devise your marketing campaigns accordingly. For example at a pizza
store, if you find that whenever a family of four come together they always buy two medium
pizzas, one pan pizza and cold drinks and you want to offer them some scheme, you can
encourage the families to go in for a family package by offering them a discount on the package.
Then they would have to pay less than if they bought each product separately.
2. Collect the call usage data. Combine it with the demographic data. Use MS-SQL server 2000
clustering tool to find out the characteristics of different groups. So depending upon
characteristics such as a certain age group( teenage)of people using telephones during a particular
timing ( 4:00 P.M to 6:00 P.M) makes them a customer for a subsidized mobile telephone
connection with lesser call rate during that duration.
3. The customer undergoes a transformation from a prospect, new customer, old customer and
then a churned customer. When a prospect becomes a customer, personal details of the customer
are collected by the organization. As long as the person stays a customer the organization keeps
tack of the buying history of the customer. This buying history data and business intelligence
tools can enable organizations to look for patterns, which can identify probable churners. Now
the organizations can use different CRM techniques to woo the probable churners and thus help
in reducing churn.
4. Visit an airline company and collect the air travel data of its customers. Using any BI tool,
analyze the data and find out a list of customers who are loyal to the company on the basis of
certain predefined characteristics of loyal customers. Then based on the profile of these
customers work out a promotion scheme to the benefit of these customers (something like the
frequent flier miles offered by most airline companies) and to encourage the other customers to
fly more often with this company.
Hints to case study questions
1. It is important to collect pieces of information about each customer at various points of the
customer lifecycle so that this data can be analyzed to understand the customer behavior better
and to understand the needs of the customer before he spells it out. This would not only increase
the sales but also decrease the customer churn. Also this data can be used for target marketing
campaigns and cross-sell campaigns also.
2. The direct response modeling process will predict the probability that a customer will sign up
for a mortgage with your company. Ranking the customers by their predicted probability will
enable you to identify the best prospects for your mortgage products.
3. Mass customization means understand the needs of a group of similar (traits and
characteristics) people and create a specific product for that group.
4. Marketing campaign is a method which takes a set of offers and a set of customers, along with
the characteristics and constraints of the campaign, and determines which offers should go to
which customers over which channels at what time. The offers optimization process takes into
account a number of financial and non-financial characteristics such as cost per offer, total
response etc.
5. The scoring model would be most suitable for predicting the prospective buyers. Using a
classification tool the customers can be classified as high, medium and low probability. The
results from a classification tool will enable us to determine the characteristics of the various
classifications . When a new customer comes in , we will match his demographic and psycho-
graphic characteristics with that of highly probable customers and give a score .
Chapter 9

Information Systems Planning and Development

Teaching Note
Step 1
The first half of the chapter discusses the need for business systems planning. Information
Systems have been used in organizations extensively for the last two decades. The result is an
organization with islands of incompatible computers which work fine stand-alone but are unable
to share the data across the enterprise between functions, and even if sharing is possible, choosing
and re-formatting the data for a particular function becomes a long and a tedious process with lots
of technical expertise requirement. The main purpose of business information systems planning is
to treat the data created anywhere in the organization as a unique entity (A particular piece of data
is created only once within an enterprise) and to create all its business information infrastructure
around that data. The data, which is created at one place is of use at many places in the
organization. Business is an information sharing entity and the sharing of information between
functions has been going on for ages, so it would be wrong to say that business information
systems came into being only after the information technology revolution. The information
technology revolution only enabled the flow of this information in a more effective and less
cumbersome manner. So the chapter discusses the need of a business information systems map
before going in for any information systems development technology. The initial part of the
chapter also discusses the various approaches to information systems planning applied by
different organizations with case studies.
Step 2
The second half of the chapter discusses the methodology for information systems planning,
which starts with requirements analysis and results in data flow diagrams and entity relationship
diagrams. Requirements analysis is the most important step of information systems planning and
is also part of business systems mapping. This step determines the information requirements of
each and every business process/function. The means of requirements analysis are interviews
with users, line managers etc. Also the different formats of reporting and filling up of data forms
also form an important part of requirements analysis planning. The next step is to draw a context
diagram, which can also be called a process map. The context diagram represents the entire
system under investigation. This diagram should be drawn first, and used to clarify and agree the
scope of the investigation. The context diagram represents the entire system under investigation.
This diagram should be drawn first, and used to clarify and agree the scope of the investigation.
The context diagram clearly shows the interfaces between the system under investigation and the
external entities with which it communicates. From the context diagram evolves our data flow
diagram. Starting with the processes defined in the context diagram, the information flows
between them and between these processes and external entities are then identified and added to
the diagram. A dataflow diagram consists of external entities (represented by rectangles),
processes (represented by either rounded rectangles or circles), data stores (represented by either
an open rectangle or two parallel lines) and dataflows (represented by arrows). The latter half of
the chapter discusses entity relationship diagrams. Entity Relationship Diagrams are a major data
modelling tool and will help organize the data in your project into entities and define the
relationships between the entities. This process has proved to enable the analyst to produce a
good database structure so that the data can be stored and retrieved in a most efficient manner.
Solutions
Hints to concept review questions
1. Information Systems Planning helps in the graphical representation of the way the business
operates permits easy identification of processes and the information flows within an
organization. The information systems development capabilities provide high quality designs for
the IT systems that are related with the business process designs, thus delivering high quality
requirements definitions and functional specifications for IT teams within the business. The
various approaches to system planning are business systems planning, business/enterprise
modeling and the critical success factors approach.
2. In this methodology the firm recognizes its business mission, objectives and functions and how
these determine its business processes. Under the BSP approach, data is seen as a valuable
corporate resource, as million of dollars are invested in capturing, storing and preserving data.
The processes are analyzed for their data needs, and data classes are then identified.
3. Critical success factors support the attainment of organizational goals, and if results in these
areas are satisfactory, the organization is competitive. The CSF method focuses on individual
managers and on each manager’s current information needs.
4. Establishing an enterprise wide architecture is a structured approach to help a corporation
establish an information system plan at a high enough level of abstraction to model the primary
business sub-systems and applications. This approach involves the identification of the major
business processes, their associated data classes, and the applications to which the business
processes and data classes belong
5. The Information Engineering Methodology (IEM) is a rigorous architectural approach to
planning, analyzing, designing, and implementing applications within an enterprise. The
transition from planning to analysis under the process-oriented approach has traditionally
decomposed business processes into business activities and then decomposed the latter into
business tasks. The analysis phase extends from the creation of business activities to the
development of the subject databases and on to the development of the conceptual schema and
the logical model.
6. RAD techniques must be used within an infrastructure designed for rapid evolution of
integrated systems. RAD tools generally help for easy-to-maintain, component-based application
development.
7. Traditional SDLC methodologies sometimes fall short in the new object oriented environment.
In response to traditional approaches to software development (often viewed as cumbersome and
bureaucratic), new lightweight methodologies like prototyping and RAD have appeared. Some
advantages of prototyping are: an interactive/visual user interface design tool, easy connection of
user interface components to underlying functional behaviour, easy to learn and use
implementation language (i.e. Basic), modifications to the resulting software are easy to perform.
8. Data flow diagrams can be used to provide a clear representation of any business function. The
technique starts with an overall picture of the business and continues by analyzing each of the
functional areas of interest.
9. Entity Relationship Diagrams are a major data modeling tool and will help organize the data in
your project into entities and define the relationships between the entities. This process has
proved to enable the analyst to produce a good database structure so that the data can be stored
and retrieved in a most efficient manner.
10. The Requirements Planning stage consists of a review of the areas immediately associated
with the proposed system and produces a broad definition of the system requirements in terms of
the functions the system will support.
Hints to project work assignments
1. Find out the various information flows in the order placement process. Some information flows
are: pre-order placement information to the customer, price negotiation, finally placing an order
by filling up a form, order tracking and payment information etc. Once the information flows are
determined draw the context diagram and then convert the context diagram to a data flow
diagram by representing external entities by rectangles, processes by either rounded rectangles or
circles, data stores by either an open rectangle or two parallel lines and data flows by arrows.
2. Some critical success factors for a marketing firm can be, pre-order placement information,
customer service, order tracking, order delivery time, etc. Electronic means of information flows
can affect all these critical success factors in a positive manner.
3. Draw the data flow diagram for the examination system. Visual Basic has various objects like
forms, reports, and database. Design a database using Visual Basic, design all the forms for
assessment and finally design the various reporting formats like, mark sheets, diplomas, result
declaration sheets etc.
4. Find out the various information flows during the student enrolment and registration process.
Once a student is enrolled, he/she is given an enrolment number, which remains the same till he
completes the course and gets the final marksheet. So the student enrolment process can be
combined with the examination system on the student enrolment number field.
Hints to case study questions
1. The Business Process Diagrams can enable Kodak to analyze and report on the end-to-end
process in a variety of ways to reveal process relationships and opportunities for improvement.
The diagramming environment of Visio provides an easy way to collect, share, analyze, simulate,
design, and communicate enterprise business process information with the help of the employees
who are closest to the process.
2. An activity shape is dragged onto the drawing page, the Activity Properties dialog box appears,
in which the user can enter data for that shape's custom properties, such as the activity name, the
role of the person performing the activity, the system used to perform the activity, and the hourly
cost of performing the activity. This data is stored with the shape and diagram. Later, the data is
imported into the enterprise hub, analyzed, and used to generate reports, such as process costing
and timing or process resource reports.
3. As ProActivity process analysts submit business process fragments, they populate the
enterprise hub with individual fragments of a process. ProActivity Enterprise Hub for Visio links
these fragments by matching the inputs in one process fragment to the outputs in another. Then, it
integrates all the fragments into a comprehensive, end-to-end process model, which enables
organizations like Kodak to successfully take on large, complex streamlining efforts.
Chapter 10
Information Systems Leadership

Teaching Note
The chapter discusses the role of Information Systems leadership in an organization. Traditionally
Information Systems has always occupied a backseat and has been a support function. But with
the expenditure on Information Systems infrastructure increasing day- by day whilst showing
minimal improvements in productivity and profitability, it has become imperative for
organizations to be able to justify and control the expenditure made on information systems while
at the same time keeping up with the industry trends in information systems use and application
The role of the CIO is moving from technical planning and implementation to strategic planning.
The current role of the CIO appears to be more tactical than broadly strategic. CIOs tend to focus
on the planning and implementation of specific information technologies, rather than on long-
term company strategy. The relatively limited vision of the IT function will need to be expanded,
as knowledge management is recognised by the CEO and board as a central component of
strategic planning. This change in orientation will have an important impact on the future training
and recruitment of CIOs. The CIO will increasingly become an important voice in strategic
planning. Currently, the CIO is not active in top levels of corporate planning and decision
making. Leading the transformation of the CIO role is an important human resource challenge for
companies. This will mean rethinking the skill set associated with the CIO function, including the
way companies use the CIO, the CIO's relation to the senior officers, the performance
expectations and evaluation process, and performance incentives and remuneration. The ideal
qualifications for the CIO are changing as the IT function becomes more central to business
planning. The ideal resume of the CIO will come to include both technical/engineering
qualifications, plus a background in finance, marketing and strategic planning. Thus it is
imperative for the students to understand how there has been a shift from information systems as
a backend entity to information systems as a frontoffice strategic tool and how the CIO leads this
transformation. The CIO is a visionary and a dreamer, who guides the organization to try out new
and more competitive strategies fortified with information systems tools .

Solutions
Hints to concept review questions
1. Some of the problems of the IS organization which a board level position can help solve are:
increasing expenditure in IT , justifying the IT expenditure , new IT applications , developing an
IS infrastructure for the organizaton, spokesman and visionary for the IS organization.
2. The CIO plays the following important roles in an IS organization: entrepreneur , spokesman ,
leader , liaison , monitor , resource allocator , visionary etc.
3. Liaison role: The CIO is responsible for developing a working relationship between IT and the
Business Units that fits the organization’s objectives, management style, and culture. The IS
manager must communicate with the external environment including exchanging information
with the IS suppliers , customers , buyers , market analysts and the media.
4. The following is the game plan of the CIO: Survey the business, Evaluate the budget and
priorities , Initiate portfolio management , Analyze IT operations , Measure performance using
appropriate metrics , Communicate performance and value , Benchmark against peers , Act as a
visionary.
5. Cost savings and productivity gains alone no longer give companies a strategic advantage;
generating revenue and offering innovative business solutions do. Instead of remaining a cost
center—and ultimately a liability—IT must think about remaking itself as a revenue generator by
proactively identifying and acting on opportunities to accelerate business strategy. The visionary
role of the CIO is to become partners with their internal customers, sharing in setting corporate
direction and seizing growth opportunities.
6. Most business executives measure the value of their business in terms such as market share,
debt-to-equity ratio and inventory turns, but in IS that isn’t the case. The key here is to find the
right things to measure, and modify targets based on experience and benchmarking.
7. Underlying SLAs should be some sort of charge-back system with business units, particularly
when it comes to apportioning staff time. If IS is now providing a service, they need to
understand where the service is being used to be properly recompensed so as to demonstrate
where the value is.
8. This role incorporates activities that require the IS manager to extend organizational contacts
outside the department to other areas of the organization. Frequently, he or she must cross the
traditional departmental boundaries and become involved in affairs of production, distribution,
marketing and finance. It has been shown that keeping in touch with top executives as well as
with key users is critical. The spokesman role demands that an Is manager acts as an information
disseminator and politician, ensuring that the IS department is properly connected to the top level
of the organization and to the key decision-makers in other departments.
9. The Internet and personal computers changed and moved IT from being a back-office, personal
productivity tool into a business tool. The IT leader is no longer relegated to looking after the IT
department but has become a strategic business partner, actively involved in moving the business
into the future. Today, the CIO is expected to conceive and execute the company-wide initiatives
that are the basic building blocks of launching a company into market leadership. All this has to
happen seamlessly, without failure, and with precious few dollars to get it done. This is only
possible if technology and business are properly aligned.
10. CIOs (Chief Information Officer) are senior executives responsible for all aspects of their
companies' information technology and systems. They direct the use of IT to support the
company's goals. With knowledge of both technology and business process and a cross-functional
perspective, they are usually the managers most capable of aligning the organization's technology
deployment strategy with its business strategy. CIOs oversee technology purchases,
implementation and various related services provided by the information systems department.
Hints to case study questions
1. Some of the problems of the IS organization which a board level position can help solve are: increasing
expenditure in IT, justifying the IT expenditure, new IT applications, developing an IS infrastructure for the
organization, spokesman and visionary for the IS organization. The CIO plays the following important
roles in an IS organization: entrepreneur, spokesman, leader, liaison, monitor, resource allocator, visionary
etc. The CIO is responsible for developing a working relationship between IT and the Business Units that
fits the organization’s objectives, management style, and culture. The IS manager must communicate with
the external environment including exchanging information with the IS suppliers, customers, buyers,
market analysts and the media.
2. In today’s competitive business environment organizations are finding out newer and more
productive ways of doing business using information systems tools. The CIO can guide the
organization to shelve old norms and adopt newer ways of doing business by making the business
managers see the IS vision and how information systems is going to benefit them in the near
future. He can also make them understand their role in making the IS vision complete.
Traditionally the business managers feel that the IS vision is for the technical people and they
need not concern themselves with it. A CIO can also guide an informed change management
effort.
3. It is a good business practice to manage IT as a portfolio of applications. By understanding
where in the portfolio their investments fall, CIOs can align their goals with business priorities.
The portfolio management model divides IT projects into categories of ascending risk and
potential value. The portfolio management model also helps in justifying the investment made in
IT and laying down the service level agreements.
Chapter 11

Information Security Management

Teaching Note
The topic on information security management is to be discussed from two broad aspects: one
from the security technology perspective and the other from the management perspective.
The PPT to be extensively used in the first part covering most of the technological
components. The second part should be more discussion oriented apart from class room
exercises and group presentations on case study. Hence the entire topic may be divided
in to two parts as described below. However, a quiz covering the technological
components of IS security is desired to be taken in the beginning of the session.
Technology components of information security
The instructor begins the session by raising the following questions for discussions:
Q. What are the aspects of information security?
The following aspects to be discussed
• Confidentiality of Information
• Authentication of Information
• Integrity of Information
• Non repudiation of Information
Q. What are the technological solutions to the above problems?
The following points to be discussed here using PPT.
• Symmetric Encryption such as DES
• Asymmetric Encryption such as RSA
• PKI
• Digital Signature
Q. Discuss the Internet security problems and associated network security technology
solutions.
The Internet Security Problems are.
• Virus
• IP Spoofing
• Network Sniffing
• Web Hacking
• Password Sniffing
The following technology solutions may be discussed using PPT
• Firewall
• Network Scanner
• Intrusion Detection Systems (IDS)
• Subnetting
• One-Time Password
Management aspects of information security
The following aspects need to be discussed.
• What are the management tools for managing information security
• Risk Management Approach
• BS 7799 Standards
• Security Audit Standards
Case Study : Citibank India
The case is about information security in a large retail bank: Citibank India. The case
may be discussed from IS security architecture as well as business need perspective. The
following discussion points may be brought out in the class room discussion.
• What is the IT Strategy of the bank?
• What security threads are envisaged due to IT enabled business operations and
customer services?
• Comment on the security policy of the bank
• Analyze the IS security architecture and security policy using some structured
framework such as BS 7799 or risk management approach?
• Any improvement suggested?
Solutions
Hints to concept review questions
1. It may be both, management as well as technology. The problems related with information
security are more of management, although created due to technological tools. For example
security problems such as virus, hacking, spoofing etc happens due to advancement in networking
technologies. However their solutions requires a management approach using various
technologies, procedures and policies.
2. The BS7799 is a British standard but has almost become an international standard for
information security evaluation and certification. In order to evaluate and get information security
certified against the BS7799 standard, an organization needs to compliance the following five
phases.
• Establishing an information security policy
• Identification of the target of evaluation
• Identification of security target
• Evaluation
• Certification
3. Preventive controls attempt to avoid the occurrence of unwanted events, whereas detective
controls attempt to identify unwanted events after they have occurred. Preventive controls inhibit
the free use of computing resources and therefore can be applied only to the degree that the users
are willing to accept. Effective security awareness programs can help increase users’ level of
tolerance for preventive controls by helping them understand how such controls enable them to
trust their computing systems. Common detective controls include audit trails, intrusion detection
methods, and checksums.
4. The limitations of this system are as following.
• Lack of auditing
• Lack of strong authentication
• The complexity of the access control list used to filter IP packets can grow and hence can
degrade network performance
5. The proxy server firewall offer session oriented filtering by using proxy applications
corresponding to some specific network services such as HTTP, Telnet and FTP. True proxy
servers are undoubtedly the safest, but impose a severe overhead in heavily loaded networks.
The architecture given in the chapter as well in PPT
6. The advantages are as following.
• Extremely efficient requiring minimum processing to either encrypt or decrypt the message
• Simple to use
• Low cost
The limitations are as following
• Key management becomes complex for large number of users
• Recommended to be used for non classified data
• Can not be use for digital signature
7. The PKI enables users of a basically unsecured public network such as the Internet to securely
and privately exchange data and money through the use of a public and a private cryptographic
key pair that is obtained and shared through a trusted third party / certificate authority.
The main components of PKI are as following
• The Public Key Crypto systems
• Certifying Authority
• Registration Authority
8. The digital signature as per IT act 2000 of government of India is based on the public key
cryptosystems technology. Digital signatures are created and verified by cryptography, the branch
of applied mathematics that concerns itself with transforming messages into seemingly
unintelligible forms and back again. The public key cryptography, which employs an algorithm
using two different but mathematically related keys; one for creating a digital signature or
transforming data into a seemingly unintelligible form, and another key for verifying a digital
signature or returning the message to is original form.
Digital certificates are electronic documents issued by third party such as certificate authority
that certify the identity of user and proof of identification associated with the presentation of a
public key.
9. The One-time passwords are never repeated and are valid only for a specific user during the
period that each is displayed. In addition, users are often limited to one successful use of any
given password. One-time password technologies significantly reduce unauthorized entry at
gateways requiring an initial password.
10. The S-HTTP enables the encryption of individual web messages between client and server
across the Internet. The SSL enables the encryption of individual web as well as non web
messages such as FTP, Telnet, SMTP.
11. The Information security control centre of an organization identified the following 5 areas of
electronic security breach. For each of the following security breach, recommend one detective
and one preventing practice to minimize security breaches.
SN Security Breach Detective Preventive

1. IP Spoofing Network Scanner Firewall

2. Password Sniffing Network Scanner One-Time Password

3. Integrity of Authentication Intrusion detection systems PKI

4. Repudiation from Users None Digital Signature

5. Hacking of sensitive data Intrusion detection systems Proxy Server Firewall,


Encryption
Chapter 12

Information Systems for Business Effectiveness

Teaching Note
Step1: The chapter starts with the discussion about the reasons for deploying information systems
This chapter should talk about the so called intangible benefits like customer satisfaction , job
satisfaction, improved communications ,arising from information systems applications . The first
half of the chapter also talks about the reasons why most of the enterprise wide information
system initiatives are considered a failure. It needs to be discussed whether this view is reality,
paradox or faulty evaluation techniques.
Step 2: The second half of the chapter should bring forth the question about defining ‘returns’ .
In this light it is important to discuss the concept of business value, options, benchmarking ,
performance improvement as a result of information systems , and their long as well as short
term impact on business survival , competitiveness and market leadership with examples from the
business world .
Step 3: Identify the metrics for evaluating the effect of information systems on business
processes. Evaluation of returns from any investment or expenditure in a business is generally
done on the basis of financial metrics like Return on Investment , earnings per share , book
value per share , profit after tax etc. It is important for the students to understand the concept of
metrics in the enterprise and IT domains . Enterprise metrics are related to benefits as perceived
by the business process and business functions. It is very difficult to achieve gains in financial
metrics but small gains in a number of enterprise metrics can effect the performance and
productivity of an organization. The main aim is to understand the impact of information systems
applications on the enterprise metrics.
Solutions
Hints to concept review questions
1. The main aim of any organization is to earn profits by investing in the business. Any
investment made in business should yield positive results and profits. Since the investment made
in Information Systems is large, it is but natural for any organization to try and understand the
impact and returns from information systems investments.
2. Traditionally capital budgeting models like Net Present Value and Break- Even- Analysis are
the methods used to understand the profitability of an Information Systems investment.
3. Measuring returns from IS investments is a difficult task because Firstly, IS is an infrastructure
expenditure to be used by many departments and processes. Secondly, IS yield intangible results
in the form of customer satisfaction, process effectiveness , understanding the customer better ,
employee retention , better service.
4. The various approaches to measuring returns from IS investments are: The business value
approach , The IT chargeback approach , The balanced scorecard approach , The benchmarking
approach , The options approach .
5. The theory of production states that any business takes inputs from its environment and
converts the input into output . The conversion function is known as the production function. The
difference in the cost of inputs and the outputs is known as profits for the organization and value
for the customer. The aim of any business is to optimize the inputs to get more and better quality
output.
6. The Balanced scorecard technique seems to be an effective tool for judging the impact of IS on
business effectiveness because rather than relying just on financial tools for measurement it also
takes into consideration the other very important aspects of business effectiveness;, the processes,
the customer , creativity and innovation.
7. The impact of IS on organizations is more when they are able to use IS for interacting and
communicating with their business partners : the distributors , the suppliers ; collaborators. Any
business exists in this mini ecology . So for any business to be able to reap the profits from IS the
whole web or mini ecology of the business should use IS for interaction and communication.
8. The returns from IS are proportionate to the proliferation of computers in the organization and
its environment. When the application of IS are restricted to specific functions the results is an
increase in productivity of individuals in that specific functional line ., when the application are
cross functional and inter-organizational , the result is business value and better processes.
9. Customer satisfaction, faster process as a result of IS are metrics in the enterprise domain.
These metrics are dependent on the IT metrics like information delivery time, order processing
time , order tracking time etc. The enterprise metrics result in financial metrics like earnings per
share , return on sales etc. Thus it is possible to convert the intangibles; customer satisfaction and
better process to tangible financial returns.
10. A rule tree constructs a logical relation between the IT , Enterprise and Financial metrics and
is a useful tool for conversion of intangible results to tangible financial metrics .
11. A business connection rule model is a software which converts all the enterprise domain
metrics specified by each function in an organization and finally calculates the financial results
on the basis of these combined impacts.
12. Metrics dictionary is a combined store of all the different measures of profitability and results
specified by the various departments , functions and processes all over the organization , in all the
three domains; financial , enterprise , IT.
Hints to critical thinking exercises
1. Improvement in internal communication as a result of IT is an IT metric . The first step is to
identify the enterprise metric that would benefit as a result of this IT metric. For example,
information delivery time, order bagging time etc. are some of the enterprise metrics, which
would improve with reduction in communication time. The second step is to create a business
connection model and a rule tree.
Sales training using information systems would lead to reduction in costs (financial metric) of
training and development for sales employees as well as create a more satisfied sales force
(enterprise HR metric ) and employee retention (enterprise HR metric).
A cost effective IS solution could be an Internet or Intranet based solution for better accessibility
to centralized information resources and remotely located people.
2. A database of customers can help the sales people to understand and predict the buying
behavior patterns of its customers and help in cross-selling of products. This would improve
customer satisfaction and lessen customer churn. A centralized database could be of great help for
a remotely located sales force.
The database of customers could also be treated as a product and sold to complementary
industries as well as to business partners. For Eg. Airlines industry and the Tourism industry are
complementary players. They could both share the same customers and would benefit from a
common database of customers.
3. It is important for the Indian bank to understand and compare its stage of IS implementation
with the banking industry as a whole . It should list down its options of investing and not
investing in IS . If the market share of banks who profusely deploy IS is increasing day by day
while of the banks who earlier were the market leaders is either constant or decreasing then
investing in information technology would definitely be a good option.
4. Since an ERP system is a Cross functional and inter-organizational system , its benefits spread
out to various functions , processes and the customers also. The Balanced scorecard technique
would be most suited to justifying the ERP implementation.
Hints to case study questions
1. A business intelligence solution would impact the customer, the employees the processes of the
organization as well as some of the financial parameters such as inventory carrying costs. So, a
Balanced Scorecard approach would be best suited to identify the financial, enterprise and IT
metrics for this organisation. Inventory carrying cost is an example of the financial metric,
employee morale is an enterprise metric while better communication and information availability
are IT metrics.
The business value approach could also be used to justifying how better processes and better
decision-making could create business value and as a result could impact the book value per share
or earnings per share for the organization. An organization that creates business value also creates
book value for its stakeholders.
2. Since any enterprise wide information Systems application like a business intelligence solution
has to be supported by an enterprise wide IS infrastructure, like an organizational Intranet, the
amount of investment to be made in IS is very high . Any organization would be interested in
knowing the benefits that would result from this investment and would also like to put a financial
measure for these benefits.
3. Ascertaining the benefits from any Information Systems application is not an easy task but it is
also not an impossible task. It is not an easy task because IS yields tangible as well as intangible
results. It is not an impossible task because now-a – days we have software’s which help in
converting the intangible benefits to tangible financial results. SAP, EDS are some of the
organizations which provide such solutions
Chapter 13

Implementation of Information Systems: Critical Success Factors

Teaching Note
The topic of Information systems implementation is to be discussed from theory as well as
practice aspects. The teaching plan described below is divided into two sections. The first
section is about the IS success models such as Technology Acceptance Model (TAM),
DeLone-McLean Model (DMM), Seddon Model (SM) and Organization Transformation
Model (OTM). The second section elaborates the practical issues of IS planning and
implementation through a case study: IS Implementation at Arvind Mills Limited. The
pedagogy for the session should be more of discussions and analytical presentations. The
PowerPoint or OHP slides to be used to depict the diagrams on IS success models. The
instructor must insure that all the participants/ students have come prepared with the
chapter as well as case study. The session may begin with the quiz for about 5 minutes on
the theory/ case study. The initial discussions should be focused on clarifying the need,
characteristics and evolution of various elements associated with that of IS success
models. It should be followed by numerous examples on best practices on successful IS
implementation from Indian organizations. The entire session may be divided into three
parts as described below.
The instructor begin the session by raising the following questions for discussions:
Q. How do you define IS success or failure?
Students will highlight various aspects of IS success and failures, including that of what described
in the chapter initial pages. Effort should be made to make all of them agree on some common
points such as that IS success is not merely confined to systems quality and information quality.
The functional users with perceived satisfactions should use it. While discussion progresses
enough emphasis to made on understanding the critical issues in IS implementation such as
change management and BPR.
In order to discuss the IS implementation success, various models on IS success to be discussed.
Q. What are different IS success models such as TAM, DMM, and SM and what are its
shortcomings?
This can be explained with PPT or OHP slides with the content details taken from the chapter.
Students can be asked to draw the model and explain it including shortcomings.
Q. Explain OTM with respect to packaged IS implementation.
The emphasis for the discussion should be more on organization transformation rather then just
automation due to IS. Should the company go for BPR and change management first and then
implement IS or other way round.
Managerial Challenges and Examples from Indian organisations on ISI
Q. What are the CSF for IS implementation? Illustrate with examples from Indian
organizations.
Top management commitment to bring organization wide transformation through implementation
of IS enabled best business practices and process would be essential in IS success. Students
should be asked to illustrate such examples from Indian organizations.
Q. What are the constrains that are typical in government sectors in implementing IS
enabled best business practices and processes?
Discussion may focus around change management and BPR issues.
Case Study: IS Implementation at Arvind Mills Limited.
This case is about implementing packaged IS in a large private textile firm in India. The
company is in the business of textile manufacturing and its marketing and distribution. The
company decided to implement new state of the art IS to cater the following business factors.
• To support the market information systems
• To support the modern production systems
• To integrate the entire enterprise with single IS
• To improve customer relationship management
• To implement supply chain management
It decided to implement SAP R/3 based IS to fulfill the above business requirements. The entire
IS projects not only become technologically challenging but also pose problems associated with
cultural, structural and process change. It would be interesting to discuss the case using different
IS success models. The students in different groups may be asked to analyze the case using
different IS success models such as TAM, DMM, SM and OTM and open for discussion in terms
of its success and failures.
Solutions
Hints to concept review questions
1. Discuss some of the problems with Information System implementation. Discuss the solution
to these problems.
The following are the most common problems in IS implementation faced by organizations.
• poorly documented and redundant data
• incompatible system and file formats
• discrepancy between the capabilities and expectations of the user community and
organizations managing IS resources
Solutions to these problems
• top management commitment
• IS teamwork and composition
• change management
• business process reengineering
2. A principal difference between Seddon’s and DeLone and McLean’s model is in the definition
and placement of IS Use. Seddon model considers IS Use to be behavior that reflects an
expectation of net benefits from using an information system and therefore consider IS Use a
resulting behavior of IS success. Therefore IS Use as behavior is separated out from the IS
Success Model, and IS related behavior is modeled as caused by IS success.
3. The time and budget overruns for any IS implementation is quite common like any other
projects. The major reasons for this are lack of proper requirement analysis in terms of functional
specifications and lack of user’s preparedness. These can be avoided by taking help of
professional consultant for carrying out requirement analysis and documentation. The key
functional users should be made part of the IS implementation team. Organization wide change
management programs should be organized before IS implementation. Consequential costs
include the costs of both planned and unplanned downtime, which are often hefty and difficult to
quantify, but can include lost revenue opportunities, the cost of capital wasted in idle
productivity, or the cost of damaged business relationships with partners and customers. Another
consequential cost can be categorized as the cost of success — if a project is successful, will the
technology platform scale to support growth? Or will applications need to be migrated to a
different platform? Consequential costs vary greatly between different businesses, IT
organizations and projects, but as the largest potential cost category, they should be considered in
any serious analysis of TCO.
4. Business process optimization (BPO) is the review of business processes, and a redesign of
those that are inefficient, ineffectual, or flawed so they can best take advantage of desired
technological functionality. The BPO may be done before IS implementation so as to avoid any
kind of automation of obsolete business processes.
5. If the systems are developed without user involvement and top management commitment, the
IS implementation are most likely to fail.