KENYA METHODIST UNIVERSITY

MASTERS IN BUSINESS ADMINISTRATION

KARIUKI PATRICK MWAI

BUS-3-5647-1/2010

COURSE CODE: MBAD 504

MANAGEMENT INFORMATION SYSTEM

ASSIGNMENT

PRESENTED TO: MR.MAVINDU NOVEMBER 2010 1|Page

QUESTION 1: a) Why should Kasai systems be so concerned about the capabilities of Soft guides data processing? Kasai Systems should be concerned about data capabilities of Soft guides data processing since data processing capability forms the platform upon which the entire input, processing and output capacity of a system are gauged. Data processing capability could be expressed in terms of data entry, processing and output speed, size and also the nature of data processed. Data processing capabilities will enable Kasai systems to be able to perform the following processes efficiently and effectively: 1. Data capture and entry of handwritten information using unique combination of ICR/OCR scanning and data entry 2. Accuracy, fast turnaround and unprecedented customer service and tracking. 3. Receipts from multiple locations. 4. Accurate and detailed reporting by location. 5. Regularly process and track forms coming from various locations across the world. 6. Fast turnaround of high volume projects providing faster processing.

7. Handling peaks and valleys in production volumes and cycles and can handle projects of any size including large backlogs. 8. Scanning of high volume back logs 9. Conversion of paper, microfilm & microfiche to PDF 10. Bar Code Reading/Processing 11. Solutions that provide faster retrieval and security from fire and flood 12. Digital archives of publications, magazines, trade journals, etc.

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b) What competitive advantage to a training and consultancy services company may be provided by an Information system? Technology has taken the business environment by storm. Processes that used to be manual are now automated, and methods for communication have been transformed. The arrival of technology has completely transformed today's business practices. Information systems (IS) have been around for a while, but as they evolve, they are continually "new" and offer many possibilities. An IS system isn't just a collection of hardware and software, it's much more than that, it's a tool. This tool can be used in a number of ways, and the value of it really depends on how your business opts to utilize it. Many businesses today are still realizing the power their technology possesses, but once strategic knowledge is realized, the potential is endless. Installing automation simply for the sake of having it guarantees it'll be a just an ordinary (and expensive!) business possession, but grasping an understanding of the ways it can be used is the real value. Strategic planning in utilizing information systems is the key to gaining a competitive advantage. You don't want to purchase new systems for the upgrade unless you plan to maximize its capabilities. Don't think of your IS systems as a commodity, view them as assets and a means to gain a competitive lead in your industry. Ways you in which information systems can give competitive advantage to a training and consultancy system: 1. Enhance jobs. Implementing IS to make jobs more efficient frees your employees to move onto other important tasks. No longer does your staff have to spend valuable time sorting through statistics, data and other pertinent information because the system has ability to gather it for them. IS provides a cost-effective way to conduct transactions, significantly cutting down the time involved in processing. 2. Differentiation.

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IS allows you to strategically define your organization in a way that makes your business stand out from the competition. You can integrate IS in such a way where you can offer your customers something no one else does. With a unique design that makes the firms business appealing to do business with, the firm can easily increase its customer base. The firm can use the information systems to enable new products and services, or greatly change the customer convenience in using your existing products and services and also to customize, personalize products to fit specifications of individual consumers. 3. Coordination of supply and distribution. IS provides a terrific way to monitor and track inventory. Typically, managers will use information system to track goods and to manage their entire supply/chain management. If there's a problem, you can easily pinpoint and enact a solution before becoming a costly issue. 4. Customers. Integrating IS with the web is a great way to maximize your technology. You can generate efficiency, effectiveness and enhancement all at the same time. Employee burden is relieved and you can augment your customer's shopping experience at the same time. 5. Decision making. Information systems allow the vital element of providing "real-time" information. In today's competitive environment, a manager needs to make rapid decisions and to do this effectively; you'll need the most up to date information available. Properly designing your IS to custom fit your needs will enable you to accomplish this. You'll get fast action when you can quickly assess a situation. 6. Communication. The information systems possess ways to effectively and efficiently share information. Automated communication is a time and resource saver and can add tremendous value to your business.

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When implementing IS, technology standards are important, but inter-connectivity is essential. Providing a way to network within your own organization and with partners and customers is a vital component. If your company has the latest and greatest technology, even better than competitors and suppliers, it doesn't you much good in seclusion because you're left isolated from the others. Ultimately this ends up becoming less cost-effective and more time consuming which decreases the value of your IS. 7. Low-cost leadership The first step in using information systems to serve a firm is to make sure the IS objectives are lined up with the business objectives. The alignment of IS objectives with the business objectives leads to the lowest operational costs which can lead low priced services 8. Focus on market niche. The information systems will enable the Training and Consultancy Services Company to have a specific market focus, and serve narrow target market better than competitors. This can be achieved by analyzing customer buying habits, preferences and advertising pitches to smaller and smaller target markets. 9. Strengthen customer and supplier intimacy. By forming strong linkages to customers and suppliers the company can increase switching costs and loyalty by locking in customers and suppliers.
10. Establish high switching cost A company can gain advantage if it creates high switching costs; making is economically infeasible for customers to buy from competitors.

Great benefits come with utilizing management information systems. The business value in this investment are less redundancy (which saves on man-hours worked), efficiency, better data integrity, streamlining of processes - the possibilities are endless. With proper planning, your company can maximize profit while decreasing overhead costs. Implementing such a system will be costly initially, but if business requirements and processes are properly and accurately identified, the payoffs are vast. Investing in IS keep your business competitive and a strong ability to maintain status in the global economy. 5|Page

Many businesses who do not have a web presence or engage in e-commerce will probably find themselves being ousted by their competitors. Companies that do not implement information systems (IS) into their organizational structure will likely find themselves falling by the wayside. Today a networked presence is vital to your organization and implementing IS systems to help run your businesses processes. When exploring the value of IS from both a technical perspective and a competitive advantage perspective, Information Systems are a definitive and effective means to expand your business.

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QUESTION 2: a) What are the business benefits and limitations of Rick Matkims strategies? i. Embrace open source

Open source describes practices in production and development that promote access to the end product's source materials. Opening the source code enabled a self-enhancing diversity of production models, communication paths, and interactive communities. Subsequently, a new, three-word phrase "open source software" was born to describe the environment that the new copyright, licensing, domain, and consumer issues created. Open source software is the software where the source code is publicly available and the program licensed under one of the OSI approved licenses The open source model includes the concept of concurrent yet different agendas and differing approaches in production, in contrast with more centralized models of development such as those typically used in commercial software companies. A main principle and practice of open source software development is peer production by bartering and collaboration, with the end-product, source-material, "blueprints" and documentation available at no cost to the public. This is increasingly being applied in other fields of endeavor, such as biotechnology. Open sourcing have numerous benefits which include: y Innovation: Harness and fuel the energy and innovation of open source communities

Open source is a method of tapping a community of experts to develop useful things. It began in software, but applies broadly, and is anything but anti-capitalist. It can raise quality at reduced costs, and vastly expands opportunities for profit. In a sense, open source fuels innovation much the way science fuels technology. Science is created by communities of experts, whose fundamental discoveries are typically made available to all, including individuals and companies that are able to capitalize on the new knowledge in novel ways. y Enhancement: Capture, focus and translate open source innovation into value for our customers y Contribution: Become a strategic player in open source communities, both as a contributor and consumer of technology. Collaboration combines resources across IT vendors, universities and individuals Internet has enabled distributed collaboration

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Growth: Leverage open source to gain new users, enter new markets, and expand business opportunities

y ii.

Choice And Flexibility: Customers can benefit through increased choice and flexibility and lower costs Recognize when you have to spend to save

The strategy involves ensuring minimal spending and looking at the spending opportunity as a saving opportunity. Benefits of this strategy include:y y y iii. Reduced costs Increased efficiency Enhanced productivity of organizational resources.

Limitations include:Help your partners help you

In this strategy you cooperate with helpful partners where you have a stake just as your partner has a stake. Benefits include:y y y Mutual cooperation and relationship helps in enhanced productivity It reduces the costs by sharing platforms and other resources The customers will have integrated services within a single system. Limitations y The customer will be denied variety of integrated services and efficiency and quality of service. iv. Use a tight budget as an excuse to get creative

This is a strategy where the hands are tied by the budget and therefore any creative way must have been budgeted for. The business benefits of this strategy include: y y y Reduced costs since only budgeted expenditure are incurred. It helps in controlling unnecessary and spurious spending Ensures there is adequate budgetary control

The limitations to business include: y y It stifles creativity by limiting it to budgeted costs only. It may hold an idea that would have been greatly beneficial to the long term well being of the company.

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b) Why are business houses finding it difficult to keep costs down in fact of the fact that technology is getting cheaper? Most businesses think of the cost of computing as the cost of the computer and the software. Today, computers are assuming more important roles in business, governments and the military. We have entered the age when computing and information systems are strategic weapons, not a backroom overhead. The term mission critical3 system and strategic system have become popular. There are many examples of corporations growing faster than their competition because they had better information systems.

In cases, corporations have been put out of business by competition with better computing recourses. IT investments, like all business decisions, are based on economic value. Determining economic value includes weighing at least three factors: economic benefits, risks, and costs. The benefit and risk factors used to value IT investments vary from firm to firm and industry to industry. This article focuses on one important part of the overall value picture: cost.

Total Cost of Ownership (TCO) is a model that helps enterprises understand the direct and indirect costs associated with owning and using an Information Technology (IT) component throughout its lifecycle. You can think of TCO as the sum of all the little costs that go into acquiring, installing, managing computers, networks, applications and End user Cost (EUC). The collection of costs can be partitioned into a TCO Model and used with a management methodology to form a decision support tool. The combination of a TCO Model with a methodology provides an IS professional with the understanding of all costs associated with the computer systems, and a decision making tool on how to best to manage and improve the systems, delivering more value to the business from the IT investments. The total costs of technology can be explained by the TCO model below. This model is used to analyze direct and indirect costs to help determine the actual cost of owning a specific technology these costs include: Direct costs: hardware, software purchase costs Indirect costs: ongoing administration costs, upgrades, maintenance, technical support, training, utility, and real estate costs 9|Page

 Hidden costs: support staff, downtime, additional network management TCO can be reduced through increased centralization, standardization of hardware and software resources.

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Questions: a. What are the business benefits of the web portal? Make a critical assessment.

A web portal is a Web site or service that offers a broad array of resources and services, such as email, forums, search engines, and on-line shopping malls. A Web site "gateway" that provides multiple services, which could include Web searching capability, news, free-email, discussion groups, online shopping, references and other services. A more recent trend is to use the same term for sites that offer services to customers of particular industries, such as a Web-based bank "portal," on which customers can access their checking, savings and investment accounts.The business benefits of web portal include:i. Web Presence

Some businesses create several portal pages. This expands the website's presence across several domains. Portals are usually segmented into different areas of the business. For instance, if the business sells hair dryers, each portal page targets different hair dryer brands. This helps the business target keywords for each web portal. The portal contains links to the brand's page on the main website, which is the section of the domain where users can purchase the product. ii. Marketing

Portal pages help businesses market each product, so they can focus marketing campaigns online to lead visitors to the page. Portals provide a landing page for cost per click (CPC) marketing. The CPC ad is created and launched, which leads to the portal page. The portal page expands on the product and then leads users to the purchasing page on the main business domain. This helps marketing efforts for businesses with a large array of products, which is hard to target on only one domain. iii. Reporting

Portal pages help businesses with reporting and analyzing how each product is performing on the web. If the company targets keyword phrases to one business portal, high traffic helps businesses identify successful marketing. It can also identify when users are not interested in products, or

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search results that are not as popular. This type of analysis helps businesses identify what product gives a better return on investment. iv. Enable Customer and Employee Self-service

According to a study by Yankee Group, 82 percent of respondents cited employee self-service as a primary business driver for portal-based initiatives; 80 percent cited improving customer and partner self-service. Greater employee self-service was key for a leading global financial services firm. Following a merger, the firm had a corporate intranet environment residing on a wide range of technology architectures, featuring vastly different user interfaces, resulting in high total cost of ownership and poor communication among employees. Working with Accenture, it developed a common technology infrastructure to support the disparate content management and portal services, and managed the migration effort to the new, shared environment. The result is the largest financial services portal of its kind in the world, with more than 200,000 users processing up to 750,000 transactions each day. The benefits include employees having fast, easy access to information; the firm having unprecedented flexibility to update information and change functionality; and a reduction in both technology infrastructure and support costs. v. Enhance Business Processes and Services

Complex business processes, such as a highly integrated supply chain, require that many individuals, often across numerous organizational boundaries, coordinate their activities and respond appropriately to changing conditions, often in near real time. Portals are critical to providing up-to-the-minute data and instant response capabilities. With easier access to integrated current data, users have more time for data analysis and informed decision making. vi. Comply with Legislation

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Executives worldwide are concerned about complying with stringent new regulatory requirements, notably the Sarbanes-Oxley Act and Basel II. To be in compliance, companies must be able to integrate, access, analyze and store both the structured data (e.g., transactions) and the unstructured information (e.g., documents) that represent their operations. Sophisticated information technology is critical to supporting legislative compliance and portals are a key part of the solution. A well designed portal can ensure that the right information is captured, aggregated, presented to the appropriate user, and available for the analytical processes needed for compliance and risk management. In particular, as corporate risk or compliance officers assume ultimate responsibility for the compliance of their corporations, they benefit from having critical metrics readily available via a dashboard. b. What is the importance of content management for enterprise web portals?

Content management will be of importance for enterprise web portals by: y y y y c. Ensuring that information is updated as soon as it becomes redundant or obsolete It helps in locating and linking the internet to relevant sites It guides the site visitor through based on the relevance of the question. It helps in detecting any malpractices conducted at the site

Can a small business develop and maintain such a portal?

With the explosion of internet technology, the web portals are becoming more and more of a necessity rather than a luxury. With the applications to which internet (e-commerce) has been used such as e-ticketing, e-marketing-banking among others, it is vital that even small business has a portal or at least is hooked on one from which it can conduct its e-operations.

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An analysis of CASE 1 : Kasai Systems Inc. Withdraws Ksh. 100 Million Soft Guide Acquisition Offer.

INTRODUCTION

Kasai Systems has been struggling to find new ways to reduce costs while still developing and implementing the new or improved business systems. Kasai systems has the desire to diversify and expand its range of services to customers while at the same time maintaining the costs at a relatively low cost. This was the driving force of behind Kasai systems interest in acquisition of Soft Guide .The company declined the offer based on the acquisition cost and also other unconfirmed causes such as the data processing capability of Soft Guide and the sales staff turnover rate of 30%.

PROBLEMS FACING KASAI SYSTEM

The firm has not clearly aligned objective to the business objectives.

its Information Technology objectives business

y y

Kasai Systems has been struggling to find new ways to reduce costs Kasai systems is faced with the challenge to diversify and expand its range of service offerings to its customers.

The managers are not exerting appropriate leadership over the organization and monitoring organizational performance.

The nature of management decision-making is questionable since it appears only overzealous about cutting costs while it is not considering the consequences of some of its decisions like reducing staff and renegotiating vendor contracts which could be some of the contributing factors to the company crisis.

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It appears that the management has poor information synthesis since it is not clear what is causing the escalating costs especially since we are not told whether the revenues are dwindling.

The company it also appears that it did not conduct sufficient due diligence before it made its intentions known regarding the acquisition of soft guide.

SOLUTIONS PRESENTED

Amidst all these challenges and problems Kasai systems has attempted to address the stated problems by :

y y y y y

Reducing the back staff consolidating servers and storage equipment, rendering servers and storage equipment, renegotiating vendor contracts, and conducting selective outsourcing

All these initiatives undertaken only consider reduction of costs whilst the problem of increasing the range of services offered to the customers do not feature as part of their attempted solutions.

The strategies employed by the Chief Information Officer are:-

i.

Embrace open source

Open source is an approach to the design, development, and distribution of software, offering practical accessibility to softwares source code. Some consider open source as one of various possible design approaches, while others consider it a critical strategic element of their operations. Before open source became widely adopted, developers and producers used a variety 15 | P a g e

of phrases to describe the concept; the term open source gained popularity with the rise of the Internet, which provided access to diverse production models, communication paths, and interactive communities.

Software development costs in organizations have been touted as being approximately 15% of total costs. This indicates that the value of one over another development methodology is more of marketing decision (which customers and pricing models) as much as it is about the design of software. The open source model of operation and decision making allows concurrent input of different agendas, approaches and priorities, and differs from the more closed, centralized models of development. The principles and practices are commonly applied to the peer production development of source code for software that is made available for public collaboration. ii. iii. Recognize when you have to spend to save Help your partners help you

This is borne out of the concept of open sourcing where when you avail the open source software you continued global presence. iv. Use a tight budget as an excuse to get creative

BENEFITS OF OPEN SOURCE

y y

Innovation: Harness and fuel the energy and innovation of open source communities Enhancement: Capture, focus and translate open source innovation into value for our customers

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Contribution: Become a strategic player in open source communities, both as a contributor and consumer of technology. Collaboration combines resources across IT vendors, universities and individuals Internet has enabled distributed collaboration

Growth: Leverage open source to gain new users, enter new markets, and expand business opportunities

Choice And Flexibility: Customers can benefit through increased choice and flexibility and lower costs

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AN ANALYSIS OF CASE TWO:

INTRODUCTION The most challenging issue at Du Pont Co. was to do with content management. Having a worldwide presence, the company was spending enormous resources to try and reach its worldwide network of distributors. The use of hardcopy brochures, press releases, warranty information on products and general support content for their distributors and car repair body shops, it was causing the company a logistical nightmare over and above the bulkiness and the rate at which information was becoming obsolete.

It was on the above premise that the company chose to deliver the information through a webbased intranet/ extranet portal, using technology from Bow-street, a portal s/w and web development tools company.

PROBLEMS y The greatest challenge that was being experienced by the Du Pont company is that of content management. y The other problem was reaching the over 2500 distributors and repair shops worldwide from 4,000 different locations y y Salesmen driving around with obsolete literature. The hardcopies that were being circulated

ACHIEVEMENTS We are told that since the content capability was initiated, Du Ponts site has grown rapidly.

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y y y

The body shops can now get training, bench marketing tools, and can paint colour formulas via the portal. Job posting and resume services. And for the distributors, Du Pont is researching adding order-tracking and order accuracy capabilities soon.

Due to the implementation of a content management system Du Pont company will enjoy:y Decentralized maintenance

It is based on a common web browser so that editing can be done anywhere, anytime to removes bottlenecks.
y

Designed with non-technical content authors in mind Person from non technical field can also use CMS

Configurable access restrictions Authorized person can change, or do content editing.

Consistency of design is preserved

Because content is stored separate from design, the content from all authors is presented with the same, consistent design.
y

Navigation is automatically generated and adjusted

Menus are typically generated automatically based on the database content and links will point only to existing pages.
y

Content is stored in a database

Content can be reused in many places on the website and formatted for any device (web browser, mobile phone, print).
y

Dynamic content

Extensions like forums, polls, shopping applications, searching, news management are typically modules.
y

Cooperation

Encourages faster updates, generates accountability for authored content (logs) and cooperation between authors.

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REFERENCES Laudon, K.,Laudon,P,(2010),Essentials of MIS,9E,Prentice Hall

Obrien J.,(2009).Management Information System (SIE) 9E,Tata Mc graw Hill.

Ward, J, (1987). Integrating Information System into Business Strategies. Long Range Planning, Vol. 20 no 3.

Windey R. (1997). Strategic Management and Information Systems, FT Prentice Hall.

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