Professional Documents
Culture Documents
ASHRAF REHMAN
CFE
ACCA Paper
3.4
Business Information
Management
Summer 2006
3.4 BUSINESS INFORMATION MANAGEMENT
CHP 1 - ORGANIZATIONAL INFORMATION REQUIREMENTS
BY: Ashraf Rehman
INFORMATION
Basic concepts
- Data: raw information relating to facts, events and transactions, such as
numbers, descriptions, etc.
- Information: data processed in such a way that it is meaningful to the person
receiving it
- strategic level: topmost policy making level where the long term objectives and
direction of the Organization is decided upon (e.g. industry, new products, new markets)
- tactical level: level where decision is takes as to how the resources of the business
should be employed to achieve the business objectives
- operational level: level where day to day activities are planned, monitored and controlled
- structured decision: decision taken objectively, based on clearly defined procedures
- unstructured decision: decision taken subjectively, based on hunch, experience or
trial-error basis
- semi structured decision: a combination of structured and unstructured decision
- the cost of obtaining info and the benefit from using that info should be kept in
mind, but practically it is not easy to quantify the same
- internal users of info - directors, GMs, departmental heads, supervisors, staff, etc.
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Cost and benefit of a new information system
- costs of a new information system are as follows:
- equipment cost (hardware)
- installation cost (hardware installation, e.g. room. A/C, wiring)
- system development cost
- personnel cost (training cost, salaries)
- operating cost (maintenance cost, consumables)
- there are other 'intangible' costs and benefits of a new info system which cannot be
quantified in monetory terms, such as:
- cost: staff dissatisfaction, learning curve
- benefits: customer satisfaction, better decision making abilities
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Transaction Processing System (TPS)
- records basic transaction of the organization
Batch processing
- all data inputted is being saved in a temporary file, and will be processed after the
processing' command is given
- processing delays should be acceptable (I.e. response time is not immediate)
Real time / online processing
- data is processed as soon as it is inputted
- very fast response time
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Structured decisions
- based on pre-defined rules or formula
- clearly defined method of solving a problem
Un-structured decisions
- not based on pre-defined rules or formula
- involves subjectivity
- based on experience, sixth sense or 'educated guess'
Semi-structured decisions
- combination of structured and un-structured decisions
- some portion is objective (I.e. based on pre-defined rules / formula) and some
portion is subjective (I.e. based on experience or sixth sense)
Expert Systems
(discussed in chapter 3)
Security ??
- protection of data from
- accidental or deliberate threats
- which might cause unauthorized modifications, disclosure or destruction of data
AND
- protection of information systems from
- degradation or non-availability of services
Aspects covered:
- prevention - 100% prevention practically impossible
- detection - normally used in combination with prevention techniques, e.g. user logs
- deterrence - e.g. computer misuse could lead to termination of employee
- recovery procedures - taking regular backups
- correction procedures - introducing stricter controls
- threat avoidance - change the entire design of the system
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Types of controls
- security controls
un-controllable physical threats
fire , water, weather, lightning, terrorism, etc.
physical access controls:
personnel - guards
mechanical & electrical controls - swipe cards, PIN, password locks, etc.
bio-chemistry controls - hand prints, eye retina, etc.
logical controls:
- passwords:
- problems with passwords
- users may forget their password
- password may be very easy to guess
- users may share the password with colleagues / friends
- users may write the password somewhere
- recommended passwords arrangements includes:
- password to be changed on a regular basis
- password must not be told or written down
- password to be easy to remember
- password be hard to guess
- should not appear on the screen
- integrity controls
- to ensure CAV (completeness, accuracy, validity) of data at input, processing and
output stage
- input controls - field checks, sequence checks, control totals, range & limit checks
- contingency controls
- backup procedures
- contingency (disaster recovery) plans
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3.4 BUSINESS INFORMATION MANAGEMENT
CHP 2 - STRATEGIC ROLE OF IS
BY: Ashraf Rehman
STRATEGIC PLANNING
Strategic Planning
- Strategic Planning (SP) is a long term (L/T) plan to achieve set mission / goals.
The time horizon for this type of planning is 5-10 years
Types of strategy
- corporate: what type of business to do
- business: how to do the business
- functional / operational: grassroot departmental planning for day-to-day operations
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- Management's expectations
Challenges with IS
- lack of specialist knowledge
- lack of overall control and coordination
- pace of technology
- cost controls
- compatibility of systems
Use of IT
- planning and forecasting
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- recording transactions
- scenario building and decision making
- measuring and improving performance
- service improvement
- gaining competitive edge
Enterprise Analysis
- also known as Business Systems Planning
- involves examining Organization's entire
- structure
- process
- functions
- data elements
to identify the key elements and attributes of data and information
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- 3 different methods of carrying out enterprise analysis:
- bottom-up planning approach (infrastructure led): focuses on ensuring that
transaction systems are in place to provide basic operational information
- top-down planning approach (business led): focuses on the overall business
objectives of the Organization and then the underlying systems are put in
place to ensure compliance
- mixed approach: a combination of bottom-up and top-down
- advantage - gives a comprehensive view of the use of data, information and systems
- disadvantages:
- results in tooooo much data
- might be costly to review each and every process and functions
- focuses on existing information only and does not concentrate on future needs
- ignores external environment / factors
PEST ANALYSIS
PEST Analysis ??
P political
E economic
S social
T technical
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- task environment - factors directly relevant, e.g. customers, suppliers, competitors
- strategic planning has to take into account both the general as well as the task
environment
Economic is there economic stability and growth - otherwise no IT investment would be made
is your customers and suppliers technologically advanced
is the organization is flexible to change and fast changing technology
is the investment in IS/IT justified
Is system has ability to manage exchang,Inflation & interest rate
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uld be made
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3.4 BUSINESS INFORMATION MANAGEMENT
CHP 3 - KNOWLEDGE MANAGEMENT
BY: Ashraf Rehman
KNOWLEDGE MANAGEMENT
Definitions:
- knowledge: information within people's minds
- knowledge management: process of
- collecting
- storing, and
- using
the knowledge held within the Organization
- Knowledge Work Systems (KWS): info systems that facilitate the creation,
storing and usage of new knowledge
- knowledge workers: people whose primary job is creating new knowledge or products which
Organization may sell in future. E.g.. includes engineers, graphic designers, scientists, etc.
- data workers: people who processes and distributes information, e.g. accountants
GroupWare
- GroupWare is a term used to describe a software that provides functions for the
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use of collaborative groups
- widely dispersed group members can work together through GroupWare, e.g. project teams
- popular GroupWare are Lotus Notes, Microsoft Exchange, etc.
- features of a GroupWare includes:
- messaging (advanced e-mail facilities)
- conferencing (e.g. video, tele, etc.)
- specialized folders / project databases
- scheduler (electronic diaries)
- documentmanagement (everyone can update the same document)
- workflow management (keep track of task status of a project)
- journal (which keeps track of pre-specified important activities)
- jotter (for jotting down quick notes / reminders)
- others: to do list, hyperlinks, address books
Intranet
- a 'private' internet being used internally by the Organization, using web browser
- sort of a mini internet of an Organization, which uses firewall to protect it from outsiders
- potential applications includes
- company news letters
- online documents, e.g. policies & procedure manual
- employee pages / details
- objectives of intranet
- easy access to corporate information and reference materials (e.g. policies)
- decreased paper work
- creates sense of organizational unity
- ensures consistency across the organization
- benefit of intranet:
- low startup cost
- reduced distribution cost for information
- low training cost
- easy expansion
Extranet
- Extranet can also be used by authorized outsiders, through passwords (e.g. by
business partners and suppliers, etc.)
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- Virtual Reality Systems (VRS)
- VRS simulates realistic atmosphere which are very close to real sensations
- interactive software and hardware (e.g. headgear) are used
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- eliminates involvement of humans in routine tasks
- disadvantage of AI:
- expensive systems
- takes a long time to develop
Expert Systems
- consists of pre-feeded knowledge, facts and reasoning of a human expert, which is
used by the system to recommend a decision
- views, experience and decision making patterns of experts are feeded
- ES focuses more on reasoning rules (IF & THEN), as compared to DSS which
focuses more on computation and presentations of facts
- normally used in circumstances where there is incomplete information and experts
are not available to take an immediate decision
- ES normally consists of:
- knowledge database, where the experience, rules, facts are stored
- reasoning engine, which correlates the problem with the knowledge database
and recommends an appropriate decision
- explanation function, which explains as to how and why the recommended
decision was taken by the ES
- ES is normally used in
- legal advice
- tax advice
- investment decisions / forecasting
- education & training
- problems with ES
- long development time
- high cost
- only functions in those areas where rules can be applied to the knowledge
Neural Network
- modeled on the basis of biological process of a human brain
- it learns from the experiences
- more advanced from Expert Systems as Neural Network do not rely on a 'set of
pre-fed rules' but also develops a hidden layer of experience and logic
Fuzzy Logics
- traditional programming requires precise commands, such as 'yes' or 'no'
- fuzzy logics involves using more generic commands
- for e.g.
- traditional command: if room temperature is less than '60 degrees', raise
heater to 'high'
- fuzzy command: if room temperature is hot, increase the heater power
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Intelligent Agents
- software which are given specific tasks to undertake and then the programme is
left running and the human operator carries on with other tasks
- the programme reports back to the human operator at the end of the task or when
it requires further information in order to complete the task
- e.g. is intelligent search engines
INTRODUCTION TO DATABASES
Definition
- Database: a collection of data, which services many application softwares
- Database Management System (DBMS):
Software that creates and maintain a database and manages access of the application
softwares to the data
Software that allows for the organization, manipulation, processing, storing,
retrieval, and sorting of data held within a system
- Data independence: data is separate (i.e. independent) from the application softwares
- Data redundancy: duplication of data items
- Data integration: the ease at which application softwares accesses the data
- Data integrity: data is accurate, secure and reliable
Characteristics of a database
Shared different users access the same data, hence reducing data redundancy
Control enhances integrity and security of the data
Flexibility able to meet all sort of user requirements, I.e. evolutionary to future needs
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Factors considered when designing a database
- analysis of information needs (e.g. CSF monitoring, audit requirements, etc,)
- logical design of the database
- physical design and setup of the data base
- data entry and upkeep functions
- data retrieval and reporting functions
- monitoring, maintenance and security requirements
Elements of a DBMS
- Data Definition Language (DDL) - defines the form of each Data item in the database
e.g. defining input field checks for each data
- Data Manipulation Language (DML) - specialized language to manipulate data
within the data, e.g. of a DML is Structured Query Language (SQL)
- Data Dictionary - program used to organized and store the data and maintains a
directory of the stored data
Advantages of database
- unanimous and integrated data
- data integrity
- data security
- data independence
- minimum redundancy
- evolutionary capabilities, I.e. adopts changes in the Organizational requirements with ease
- flexibility - reports can be generated from the database in any format required
Disadvantages of database
- high security risks, as the entire data of the Organization is in one place
- initial development cost may be high
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- operational tasks includes:
- ensuring data integrity
- ensuring data security (including access rights to users)
- preparation and maintenance of data dictionary
- taking backups
DATABASE STRUCTURES
Introduction to database structures
- Logical data structure: defines the relationships of the data items with each
other which reflects the business requirements of the data
- Physical data structure: describes how the data is physically stored on the storage
media
- Logical design shows what the system will do and the physical design shows how
that would be done
Types of databases
- hierarchical - network - relational
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Relational Database Model
- designed to overcome some limitations of the above two models
- data items are stored in a series of two-dimensional tables consisting of a row
and a column which are then linked together via unique (primary) key
- a row represents a record
- a column represents a part of the record
- see diagram on pg. 84
- data from the tables are extracted and the desired report is formed, provided
that there is a common element between the two
- instead of pointers, following three operations can be used to extract data:
- select - creates a list of records (rows) that meet a given criteria (e.g. list
of customers of a particular product)
- join - combines elements from more than one table to provide additional
information not available from a single table
- project - create new tables containing only the required columns and removing
unnecessary fields
DATA WAREHOUSING
Introduction
- Data warehouse is a database that accumulates and stores the entire data taken
from various Transaction Processing Systems (TPS) in the Organization as well as
external data (e.g. competitor's prices)
- it is a combination of various operational databases of past many years
- data warehouse is used because operational data resides in many different types of
systems (e.g. financial accounting, stock systems, point of sale systems), I.e. scattered
- the data is consolidated to provide reports, analysis, reporting and query facilities
- data warehouse could be updated daily, weekly or monthly, depending on the
information needs of the Organization and availability of the information
- Data mart are alternatives to data warehouse, which focuses on small portions of
the entire data warehouse
- data marts contain data related to a particular function / areas, such as sales,
stocks, etc.
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Tools available to extract information
- various tools are available to extract information from data warehouse or data
marts, such as Online Analytical Programming (OLAP)
- these tools provides the following features:
- query and reporting tools - to generate simple queries and reports
- intelligent agents - try to discover any hidden pattern / relation between the
data, by using neural networks and fuzzy logics
- multi-dimensional analysis tools - through which information can be viewed
from various perspectives, e.g. pivot tables
DATA MINING
Introduction
- Data mining software looks for hidden patterns and relationships in large pools of data
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- the data mining process involves the following:
- identify clusters of useful and significant data from a huge and apparently
unimportant data
- finding hidden patterns
- finding the 'rules' of the hidden patterns
- finding possible dependencies
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3.4 BUSINESS INFORMATION MANAGEMENT
CHP 4 - SYSTEM THINKING AND BUSINESS SYSTEMS
BY: Ashraf Rehman
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SOFT SYSTEMS APPROACH
Introduction
- 'soft' is associated with the human or psychological aspects of the problems,
rather than physical or mechanical problems
- soft approach is hence more suitable to unstructured or 'fuzzy' problems / situations
- the purpose of SSM is to enhance the understanding of complex social situations
which entails many diversified views / requirements
- for e.g. Organization losing customers
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2- Situation expressed
- The problem is documented / expressed using 'rich picture' diagram
- Rich pictures are cartoon-like freehand pictorial representation of the situation
- see BPP diagram on pg. 107
4- Conceptual models
- CM documents key activities that needs to be performed to satisfy the root definition
- CM focuses 'what' activities needs to be done and not on 'how' activities are to be done
- CM provides a basis for discussions and stimulates 'in-depth' thinking and better
understanding for the proposed system
- see diagram on pg 104
- practice case e.g. on pg 103
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BUSINESS SYSTEMS
Definition
- System: a set of interacting components that operate together to accomplish a purpose
- Business System: collection of people, machine and methods to accomplish the
business objectives
Hierarchy of systems
- Corporate level: supports the Organization as a whole and includes strategic
outlook and relationships with external elements. System includes overall forecasting,
financial planning
- Divisional level: many organizations are divided into distinct sub-units operating in
different industrial sector or providing different goods & services. System includes
analysis of the concerned industry
- Department level: emphasis is on the implementation of Organizations strategies
System includes tactical analysis / MIS
- Operational level: emphasis is on the control of day-to-day operations. System
includes TPS
Socio-technical systems
- an organization consists of 3 sub-systems:
- structure
- technological systems (systems and facilities available)
- social systems (concerning with people, their thinking and styles)
Business rationalization
- streamlining of operating procedures to eliminate obvious inefficiencies
- rationalization usually involves automation
- the risk and reward of rationalization is low / medium
- IT based e.g.:
- integration - laptops
- shared database - TPS / MIS / EIS
- telecommunication links - ERPs
- intranet / extranet - data warehousing / minng
- EPOS
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BUSINESS PROCESS RE-ENGINEERING
BPR methodology
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- develop clear business vision and process objectives
- identify the processes to be redesigned
- understand and analyze the existing procedures
- review how IT could be built-in to achieve the process objectives in a better way
- design and build a prototype of the new process and share it with the users
- implement
- monitor results
IT and BPR
- using IT does not mean that a process as been re-engineered
- IT should be in line with the process requirements to meet the process objectives
- some aspects where IT has been used as a re-engineering tool:
- E-commerce - shared databases and integration
- virtual busines - wireless data communication
- AIs (expert systems, KWS, etc.)
- online services
- EFTs / EDIs
Advantages of BPR
- revolves around customers' needs
- provides cost advantages, resulting in a competitive edge
- encourages a long-term strategic view of the operational processes
- reduces organizational complexities by eliminating duplication / wasteful processes
Limitations of BPR
- often misunderstood as a narrow focused activity
- often seen as a cost cutting exercise, which is not the only case
- requires far-reaching and long term commitment by the management
- BPR enthusiasm may result in some 'good' practices being discontinued
- often taken as a 'fashionable cure-all' exercise
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Major reasons why BPR fails
- cost of BPR may exceed the benefits
- BPR has been done too late
- BPR reforms were not suitable for the culture or structure of the organization
- inherent risk with BPR is quite high
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3.4 BUSINESS INFORMATION MANAGEMENT
CHP 5 - BUSINESS CASE DEVELOPMENT & GAP ANALYSIS
BY: Ashraf Rehman
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- there are other 'intangible' costs and benefits which cannot be quantified, it
could just be expressed in the feasibility report as text. E.g. are
- cost:
- staff dissatisfaction
- learning time
- benefits
- customer satisfaction
- better decision making ability
- the following can be done with the intangible costs and benefits
- ignore them altogether
- assign quantitative values based on educated assumptions
- present them separately alongwith the financials
BUSINESS ANALYSIS
Introduction
- Business analysis: refers to the analysis of business processes, relationships and
performances (although there is no specific definition of business analysis)
- difference between business analysis (BA) and system analysis (SA)
- SA has a narrow focus than a BA
- SA focus on operations of the system and BA focuses on the surrounding
business issues
- BA reviews information system in light of the Organizations overall strategy
and position and SA on the users needs
Information Audit
- Aims to determine the info need of users and decide how these needs could me met
- 3 stages:
- info need analysis
- info analysis (existing info available)
- gap analysis
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SWOT Analysis
- Strength, Weakness, Opportunities, Threat analysis
- strength and weakness relates to internal environment
- opportunities and threats relates to external environment
- while carrying out SWOT analysis, the following aspects should be kept in mind:
- economic aspects
- industrial aspects
- stakeholders (customers, suppliers, government, etc.)
- employees
- e.g. of a SWOT analysis of a new computerized accounting system:
Strength Weakness
£ 1 million allotted limited staff experience
willing staff expectation of 'system will do everything'
Opportunities Threats
competitive edge vendor dependency
compatible with other systems system failure will be costly
e-commerce possible later on
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Sensitivity analysis
- business case development involves future uncertainties
- sensitivity analysis deals with uncertainties, based on 'what-if' approach
- key variables are identified and then they are amended by a x% to see the impact
on the bottomline
- this highlights those variables which are most likely to have a significant effect
on the bottomline (I.e. those which variable which are sensitive)
- after the sensitive variables are highlighted, the management can:
- try to obtain the best possible future estimates on them
- apply strict controls on them
- alter the plan to eliminate the sensitive variables altogether
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Earl's System Audit Grid
Current systems are plotted
TURNAROUND: STRATEGIC:
Str. Importance High expect in future to give comp edge
of PLANNED IS SUPPORT:
Low FACTORY
no str value
Low High
Str. Importance
of CURRENT IS
Low High
Market Share
- STARS:
- initial investment high but future return also high
- in IT, possible source for comp edge
- strategy: BUILD
- CASH COWS:
- stars will become cows gradually
- returns used to finance new stars
- strategy: HOLD
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- DOGS:
- ex cows
- IS/IT not strategically important
- strategy: DIVEST
- QUESTION MARKS:
- justifications to invest
- strategy: BUILD / HARVEST
GAP ANALYSIS
Introduction
- Gap analysis involves comparison of the desired positions with the actual
position and identification of ways to fill the gap
- Simple gap: the gap between current position and current expectation
- Continuous gap: the gap between predicted position and predicted expectation
- extrapolation: statistical technique to determine projections, based on historic trends
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Low Avoid
applications
Low High
PROJECTED RISK
Scoring Models
- allots scores to the relevant objectives of various available options
- see example 3.19 on pg. 130
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3.4 BUSINESS INFORMATION MANAGEMENT
CHP 6 - INFORMATION SYSTEMS & COMPETITIVE POSITION
BY: Ashraf Rehman
Integration process
- CSF is the link between the business strategy and the IS/IT strategy
- integration process is s follows:
- define business objectives (e.g. raise earnings per share)
- identify CSF (e.g. new customers, products)
- develop the IS/IT to support the CSF (e.g. customer database)
- IS strategy involves three components / architectures
- data architecture (logical layout-database structure)
- software architecture (application softwares)
- hardware architecture (equipment, networking, communications)
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Importance of linking business strategy with IS/IT strategy
- increasing dependency of business on IT
- IT influences business plans, e.g. E-Commerce, Virtual Business, globalization, etc.
- Without close link, both strategy will fail
Competitive Edge
- a gain or advantage that an organization has over its competitors
- could be in the form of good quality, cheaper price, better image in the eyes of
customers, new up-to-date products, etc.
- IT can contribute in competitive edge if the organization is 'information' intensive,
e.g. banking, airlines, etc. but no in 'less information' sensitive organizations
- As per Porter and Millar, IS/IT can impact industries in three ways
- change the industry structure
- create new business and industries
- create a competitive edge
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IS/IT CREATING COMPETITIVE EDGE - PORTER'S VALUE CHAIN
Porter's competitive strategies
- there are 3 generic strategies for achieving competitive advantages:
- industry-wise cost leadership
by reducing per unit production cost through better utiliztion of resources through IT
- industry-wise differentiation
through the product design and quality, marketing manner, etc.
- focus on certain segments and not entire industry
through customized products, segmental analysis of target customers, etc.
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Outbound logistics
- activities to distribute the product to the customer, including warehouses &
distribution channels
- IT system which can be used:
- sale order processing systems linked with inventory systems
- EPOS
- E-Commerce
- EFT
Marketing & sales
- activities to receive orders from customers + promotions, e.g. advertisement
- IT system which can be used:
- Customer Relationship Management modules (CRMs) (cookies)
- online order booking and tracking systems
- sale order processing systems linked with inventory systems
- E-commerce
Service
- activities to help retain product value, e.g. after sale service, installations, warranties
- IT system which can be used:
- Customer query / complaint tracking systems
SUPPORT ACTIVITIES:
Procurement
purchasing of necessary inputs
e.g.: Procurement Planning Modules, extranet, EDI
Technology Development
development of machines, computers, processes and systems
E.g.: Computer Aided Designs (CAD)
Infrastructure
overall management, financing, planning of the organization, e.g. top mgmnt
E.g.: intranet, groupware, MIS, EIS, ES, data mining
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IS/IT adding value to a product
- E.g. of areas where IS/IT can be used to add value to a product
- robotics - CADs
- machine / production / process control systems - EPOS / barcoding
- computer aided manufacturing processes (CAMs) - intranet / extranet
- Enterprise Resource Planning (ERPs) systems - online systems
- procurement / material planning (MRPs and JIT) systems- personnel / HR systems
- customer relationship management (CRM)
- KWS
- EDIs and E-commerce
- integration (shared databases, networking)
OUTSOURCING
Outsourcing
- Outsourcing is buying any service from outside, rather than employing own staff
and resources
- in IT, outsourcing means that an external Organization is carrying out the IT
functions for your Organization in lieu of a pre-agreed price
- normally done if the Organization does not have the expertise, support staff or time
- the term 'turn-key services' means that the vendor is providing all the services
from start to the end,, I.e. you only have to turn a key
- organizations involved in providing outsourcing services includes facilities management
consultancy companies, software houses, hardware maintenance companies, etc.
- when you outsource, the third party usually takes over the existing staff under
Transfer of Undertakings (Protection of Employment) Regulations, (TUPE).
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Types of outsourcing
Total outsourcing
- entire IT is outsourced to a single supplier
- IT is seen as a support service
- strategic control has to be retained within the organization
- organization can focus more on its core activities
- normally based on long-term contract
Incremental outsourcing
- starts with outsourcing smaller activities first and then go on increasing
- a cautious approach
Others
- adhoc outsourcing: short period temporary outsourcing (e.g. shortage in staff
during peak
- project outsourcing: entire project is outsourced (e.g. development of software)
- partial outsourcing - some activities are outsourced, e.g. hardware maintenance
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Advantages of outsourcing
- specialist staff / knowledge is available (particularly for small Organizations)
- organization can concentrate more on 'core' activities
- cheaper (in certain cases due to economies of scale for vendor)
- new skill and technological knowledge becomes available
- fixed price contracts makes budgeting easier
- cost beneficial in case of Legacy Systems
Disadvantages of outsourcing
- dependent on third person to provide you your own information
- confidential information are in hands of a third person
- if IS your strategic weapon, then you may lose your competitive edge
INSOURCING
- means recruiting IS/IT staff from other departments of the Organization, rather
than recruiting a new staff from outside
- develops a high degree of in-house expertise and specialization
- advantages of insourcing:
- reduced recruitment cost
- reduce cost in integrating the IT staff with the corporate culture and business needs
- increase staff retention and motivation
- disadvantage includes:
- business people may not have a through or advanced technical aptitude
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BESPOKE OR OFF THE SHELF SOFTWARE
Bespoke Software
- software is constructed keeping in mind the requirements of a specific
organization (I.e. tailor-made)
- it could be constructed either by the 'in-house' System Department or by a Software
House contracted for this purpose
Off-the-Shelf Software
-'ready to install and use' software available in the market
- sold to a wide range of users and intended to handle the most common requirements
- e.g. Microsoft Office 2000, Peachtree Accounting Software, etc.
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- it may prove costly in the long run as all new versions will also have to be
customized time and again
- customization may introduce bugs that do not exist in the standard versions
- in-house IT deptt might have to acquire additional skills to handle customized versions
Software license
- generally used for off-the-shelf software
- covers aspects such as
- number of users
- can it be modified without user's consent
- circumstances under which the license will be terminated
- limitation of liability (in case of fraud or malfunction)
- obligations to correct bugs
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Software piracy
- piracy means unauthorized copying / usage of software
- piracy may lead to a civil suit (case) and the employees / users might have to face
a criminal liability
- the most common piracy is Corporate Overuse, I.e. the software has been
installed in more machines than originally agreed
- installation of a software on a laptop and then using it offsite or at home is
normally not a piracy
LEGACY SYSTEMS
Legacy system
- a system which is now old (normally 10 yrs) and not adequately meeting the needs of the
Organization, but is still being used
- such a system is still being used because huge cost had been incurred on it
- since the systems are quite old and inflexible, they cannot interface with the current
softwares running in the Organization
- the cost of maintaining legacy systems is also high because you have to keep staff
trained for an outdated software
- problems to shift from legacy systems to new systems:
- it is very difficult to re-write the program codes as no system document available
- as it is a mega project in it self, it may not be viable in terms of time, resources
and costs
- many other systems may get effected if the core system is changed
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3.4 BUSINESS INFORMATION MANAGEMENT
CHP 7 - INTERNET AND E-COMMERCE
BY: Ashraf Rehman
INTERNET
Definitions
- internet: global network connecting millions of computer to send and receive information
- www (world wide web): a multi media facility, providing color screen, sounds,
graphics, etc. / system of internet servers that supports special format files (eg html)
- website: points within the internet network, created by individuals / companies
to provide information, entertainment, etc.
- http (hyper text transfer protocol): the language in which the information is retrieved
from the internet
- URL (universal resource locater): a unique address which describes the location of
a website
- browsers: interfacing Programmes used to access internet, e.g. internet explorer, Netscape
Characteristics of internet
- shifts powers from sellers to buyers as they are now very well informed or the
available choices
- reduces transaction costs
- enhances speed, range and accessibility of information
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Problems with internet
- growing rapidly, without any formal organization / control / law
- exposes the system to various security hazards, e.g. hacking, virus, etc.
- quality / authenticity of the information may be questionable
- consumes too much time as it is tempting and hard to resist
- speed and conectivity issues
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What can a website do ??
- answers frequently asked questions (FAQs)
- keyword search
- tells you the status of a particular process (say flight details, DHL parcels)
- e-mails
- bulletin boards / e-groups - transactions
Hackers
- hacking is unauthorized access to computer systems
- primary aim is to corrupt the data or make a copy
- hacking softwares could be used which enables rapid guessing using hundreds of
permutations and combinations per minute
- prevention measures includes:
- physical security of equipment
- effective password arrangements
- data encryption
- system logs
Viruses
- a piece of software which infects Programmes and data and possibly damages them
- viruses are generally placed in common software which are frequently used, e.g.:
- free software from internet
- pirated software (because they are cheap)
- games software (wide appeal)
- email attachments
- virus can also spread through common floppies
- the following are e.g. of the types of viruses
- file viruses (will destroy the file to which it is attached)
- trojan viruses (the file to which this virus is attached works normal, but at the
same time the virus is destroying other files)
- boot sector viruses (activates at the time computer is switched on)
- time bombs (activates on a certain date and time)
- logic bombs (activates upon the occurrence of a certain event, e.g. amount of hard
disk reaches certain capacity)
- worms (spreads through the entire computer by reproducing / multiplying itself)
- macros (activates when "macro" features of a S/W are run)
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- anti-viruses are software which detects and destroys viruses (e.g. Norton, mcafee)
- prevention steps against viruses:
- installation of powerful and updated anti virus software
- thoroughly testing external softwares
- usage of tested and marked diskettes
- very limited external floppy / CD drives on PCs and workstations
- thoroughly testing all incoming attachments being downloaded from internet
E-COMMERCE
Electronic Data Interchange (EDI)
- a form of computer to computer data transfer (mails, invoices, information)
- advantages:
- reduces transmitting delays
- avoids re-keying
- reduces costs
- facilitates shorter lead times
- provides opportunities to improve customer services
- disadvantages:
- compatibility problems - junk emails
- security risks (hacking, viruses, etc.) - decreases physical interaction
E-commerce
- E-commerce: conducting business electronically via communication links, I.e. the
process of trading on internet
- E-commerce facilitates the sales and distribution aspects of an Organization, as follows:
- reduced sale, marketing and distribution staff
- electronic marketing
- collecting information about customers (eg registration forms)
- click streams - keeping a track of which properties a user is clicking while he
is on the website
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- provides sophisticated market segmentation opportunities
- decreased transaction cost
- decreased use of cash
Setting up an E-business
- telecommunication infrastructure
- hardware
- software
- linking back office operations with web operations (e.g. linking of TPS)
- mechanism for order fulfillment (virtual supply chain)
- customer registration arrangements
- e-marketing
Disadvantages of e-commerce
- involves an unusual mix of persons (web designers and administrators, IT staff,
marketing staff, etc.)
- high development and interfacing costs
- slow payback period, I.e. profits will be realized after some time
- due to globalization, legal requirements of all countries have to be considered
- lack of trust of customers on e-business
- security issues related to internet
Virtual Company
- organization that uses IT to link people, assets, ideas
- global collaboration without meeting face to face
- no physical structure, hence organization can respond to changing global req quickly
- extensive uses of internet, intranet and extranet
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DEVELOPING STRATEGY FOR INTERNET AND E-COMMERCE
Development methodology
- strategy for internet and e-commerce should be developed considering the following:
- organizational culture
- systems and processes
- infrastructure and support requirements
- training of staff
- customers
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GLOBALIZATION
Advantages of globalization:
- access to global customers
- financial implications
- take advantage of global economic and fiscal differences (cheap labour, low taxes)
Disadvantages of globalization:
- legal complications
- dynamic global environment leads to rapid changes in strategies
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Global Information Strategy
- Centralized: all system development and operations is performed at one place (in
case of domestic exporter strategy)
- Decentralized: each country develops and operates its own systems (in case of
multinational strategy)
Centralized XX
Duplicated XX X
Decentralized XX X
Networked X XX
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3.4 BUSINESS INFORMATION MANAGEMENT
CHP 8 - IMPLEMENTING CHANGE
BY: Ashraf Rehman
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3Cs: Commitment, Coordination and Communication
- Commitment: this has to be from all stakeholders, but particularly from top
management, as they have to allocate resources to achieve the changes
- Coordination: ensuring that all involved are working in an efficient and effective
manner towards the common objectives. Requires planning and control
- Communication: right persons must communicate the right things at the right time in
the right way. Important in all phases, i.e. start, execution and end
PROJECTS
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Document used in project management
- project plan
- progress report
- completion report
- post-completion report
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User resistance
- there are three types of user resistance to a change in IS:
People Oriented:
- factors internal to users, for e.g. users may not wish to learn a new program or
amend their working practice
- this can be overcome by:
- user orientation to shoe the benefits of the new systems
- finding the 'internal' reasons and trying to address it
- persuasion or strict orders
System Oriented:
- factors related to the new system, for e.g. a poorly designed user interface will
lead to user resistance
- this can be overcome by:
- user involvement in the design stage
- user training of the system
- finding the reasons and trying to address it in the software
Interaction:
- caused by interaction of the users and the system, for e.g. user may fear that it
may take away some of their power or influence on the Organization, I.e. resistance is
cultural or political rather than system inefficiencies
- this can be overcome by:
- reorganize the organization structure before the implementing the system
- restructure incentive schemes which might be eliminated due to systems (e.g.
users will be afraid that overtime will finish due to systems)
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SYSTEMS DEVELOPMENT LIFECYCLES
Design stage
- lack of user input
- inflexible / incompatible design
- future needs cot considered
- no or insufficient Organization Impact Analysis (I.e. how the change will effect
the Organization's structure, operations, attitude, decision making and control)
Programming stage
- programmers supplied with inadequate / incomplete specifications
- insufficient time and resources allotted to programming stage
- program codes not documented
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Testing stage
- insufficient time and resources allotted to testing stage
- unorganized testing
- insufficient user involvement
Implementation stage
- lack of user training
- 'urgent' implementation
SSADM ?
- there are over 1,000 recommended methods through which systems can be developed,
such as waterfall method, spiral method, etc.
- SSADM refers to a structured approach to develop a system
- SSADM includes procedures, techniques, tools and documentation methods
- the following aspects are covered:
- functions - through Data Flow Diagrams
- data relationships - through Entity Relationship Models
- behavior characteristics - through Entity Life History Models
Waterfall Approach ??
- breaks the entire process into distinct sequential stages
- the output (results) of each stage is first validated & verified and then is used as
input of the next stage
- the term 'validation' is normally used for plans, I.e. whether the plan is in
accordance with the business objectives?
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- the term 'verification' is normally used when we check that the system
specifications have been met
- the term 'waterfall approach' is used to describe any approach which breakdowns
the entire process into distinct stages, regardless of the name given to the stages
- see diagram in 2.1 BPP Para 4.2 page 121 for 'waterfall approach'
Spiral model ??
- used for complex SDLC, where you cannot break down the process into distinct stages
- adopts an 'evolutionary' approach, I.e. carrying out the same activities over a
number of cycles in order to clarify requirements and solutions
- see diagram on 2.1 BPP page 123 for spiral model
- development process starts at the center, where the requirements are not that well defined
- system requirements are refined with each rotation around the spiral
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Advantages over Waterfall method
- enables objective setting and risk management at each development stage
- involves users throughout all phases of development
- advantages of CASE
- drawing and redrawing of diagrams is much easier and faster
- accuracy and logical relationship of diagrams is improved
- prototyping is made easier
- blocks of codes can be saved and reused (code libraries)
- provides documentation of various development and programming aspects
- introduces accurate, complete and consistent development techniques
- Examples of CASE
- Teamwork (for UNIX based operating software)
- SSADM (Windows based)
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FOURTH GENERATION LANGUAGES (4GL)
- computer only understands MACHINE LANGUAGE, which is in binary form (I.e. 0 or 1)
- a program is converted in machine code through the programming code
- previously, the language of the programming code was quite difficult
- over the passage of time, the language of the programming code is being made easier and
user friendly
- different generations refer to the passage through which the programming code is being
made easier and user friendly
- the following diagram shows the programming code refinement since inception
1st Generation: Programs were written in Machine code (using binary language (0, 1) )
2nd Generation: Programs were written in Assembly language (uses symbolic code,
e.g. ADD, SUB, MULT)
THE ABOVE TWO LANGUAGES ARE COLLECTIVELY REFERRED TO AS
LOW LEVEL LANGUAGES
- To overcome the difficulties of low level language, high level languages were developed,
which are 3rd and 4th generation languages
3rd Generation: Programming language which uses extensive english vocabulary . E.g.
COBOL, PASCAL, C, C++, JAVA
4th Generation: - Much easier than 3rd generation languages due to icons, help
facilities, pull-down menus and templates
- Accessible to people without formal programming skills. E.g. are
Informix and Powerhouse
Features of 4GL
- Graphical User Interface (GUI)
- easy to learn
- availability of online help facilities for users
- debugging facilities available (I.e. problem shooting can be done easily)
- best used for simple and common programming features
Advantages of 4GL
- users can develop Programs themselves, hence saving IT staff time
- creativity can be promoted
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Disadvantages of 4GL
- due to the ease and charm, IT deptt may get overburden in fulfilling training needs
of the interested users
- as programs are developed by the users, it might not be compatible with the
organizations overall IT setup, I.e. it might slow down the processing speeds of
other computers / Programs
PROTOTYPING
Prototyping?
- it is difficult for the users to specify in advance what they want from the system or they
may find it hard to visualize or determine if the system will solve their problem
- a model built to show the users early in the design process, how the system will look
- used to give users an 'early feel' of the outlook of the proposed software
- a prototype can be used for a small part of the system as well as for the full system
- 4GL has contributed to the popularity and awareness of prototyping
- e.g. = a prototyped screen layout of a programme, its color combinations, etc.
Advantages of prototyping
- a model is presented and discussed before substantial time and money is spent
- facilitates tailor made softwares
- does not necessarily have to be written in the same language as the main program
is planned to be executed
Disadvantages of prototyping
- may not really give a comprehensive model of the main programme, which
can be much more complex and sophisticated
- prototyping encourages users to try new and new models, which might consume
unnecessary time
USER INVOLVEMENT
Structured walk through
- system analysts introduce and explain the system design to the users
- structured walk through are done in shape of a formal meeting with the users,
in which the documentation produced during development process is reviewed
and checked by the users.
- users are used because their knowledge of the desired and existing system is
greater than the knowledge of the development personnel
- structured walk through are also known as USER VALIDATION
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Sign Offs
- at the end of each stage of development, the resulting output is presented to the
users for their approval
- there must be a formal sign-off at each completed stage of development
- this minimizes 'rework', as only the immediately preceding task has to be
reperformed and leaves very little room for later disputes
CHANGEOVER
Direct changeover
- old system completely replaced in one move
- normally done where there is significant difference b/w the old and the new system
- normally done at slack business hours, e.g. over weekend
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- advantages:
- quick changeover method
- less costly as compared to parallel running
- minimizes work load on staff
- disadvantage:
- high risk method
- methods to reduce the risk attached with direct changeover method:
- thorough system and user acceptance testing before the software is implemented
- well defined contingency plans and backup supports
- effective and timely training of users
Parallel running
- old and new system are runned together with the current data and the result /
output is matched
- following aspects are covered:
- for how long should the Parallel running be done
- how much data should be cross-checked (e.g. 100% or a sample size)
- advantages:
- safe and cautious approach, as the old system is still live
- testing on real data possible
- disadvantages:
- might be costly
- extra workload on staff
- difficult to identify if errors relate to the old system, new system or human tiredness
Pilot operation
- this method is between direct changeover and parallel running in terms of time and risk
- two types of pilot operations
- retrospective: old data is runned on the new system instead of current data
being runned parallerly
- restricted data running: instead of the 100% date being runned, sample data
group could be runned
Phased implementation
- means the changeover to the new system is made in distinct planned phases
- normally done for very large and complex projects
- the risk in this method is that any alteration made in ht later phases should be
eventually compatible with the overall system
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EVALUATION / PERFORMANCE REVIEWS
Evaluation ?
- a system should be periodically reviewed to ensure that it is achieving its desired results
- post implementation evaluation has similar aspects as that of feasibility study:
- technical review
- operational review
- social review
- economic review (including cost benefit review)
- all the above reviews are based on actual data and results as against predicted
data in a feasibility study
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Indirect Performance measures
- apart for direct performance measures such as metrics, there are other indirect
ways to review the performance of a system, as follows:
- are reports getting circulated in less number of days
- users are willing to pay for the use of the systems (in a charged mechanism)
- user surveys relating to their satisfaction on system performance
Improving output
- more value added output is obtained by the same input resources, e.g.
- more informative reports / analysis
- report available to more people
- output with little value can be eliminated, e.g.
- decrease frequency of the reports
- decrease wide distribution
- decrease the size of the report by eliminating unnecessary info
- improve timing of the reports e.g. immediate access to info
Improving inputs
- same amount of output can be achieved by fewer inputs
- networking will eliminate duplications and will enable 'input by one , used by many'
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3.4 BUSINESS INFORMATION MANAGEMENT
CHP 9 - THE IMPACT OF IT
BY: Ashraf Rehman
IMPACT OF IT ON ORGANIZATION
- vertical differentiation denotes how the employees are related to each other in the
organizational hierarchy (e.g. tall or flat structures)
- horizontal differentiation denotes how the various departments are linked with each other
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Other impacts of IT
- routine processing (bigger volume, greater speed, greater accuracy)
- digital information and record keeping
- high degree of reliance on IT
- new methods of communication
- improved customer services / satisfaction
IMPACT OF IT ON TECHNOLOGIES
Information overload
- IS/IT has led to capturing, analysis and transmission of over-whelming amount of
information, however only some relevant information is useful
- some of the ways to limiting the information overload on managers are:
- delegate some information to sub-ordinates
- eliminate sources of information through which duplicate information is being received
- use intelligent agent (IA) programs
- IA programs perform tasks such as retrieving and delivering information
and automating the repetitive tasks (suitable for internet / intranet activities)
- IA collates and manipulates information to meet the parameters set by the users
- subscribe to newsclipping service (finds information of interest on our behalf
and sends it to us, instead of we surfing the internet
- filtering e-mails (based on subject/content, sender, intended recipients, priority)
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Remote working or home working
- some organizations encourage home working based on the concept of 'free lance workers'
- home working is sometimes known as telecommuting
- advantages to employer:
- cost savings on office accommodation
- larger potential pool of employees
- flexibility (I.e. work only when required)
- disadvantages to employer:
- increased coordination requirements, particularly where close supervision is
required or there is a lack of trust on the employee
- advantages to employees:
- no time wasted in commuting (traveling to and from the office)
- work can be organized around other commitments
- may lead to less distractions than an office environment
- disadvantages to employees:
- no physical interaction with collegues
- low motivation and innovation levels
- no sense of organizational unity
- lack of goal congruence
Communication on e-mail
- advantages:
- speed of transition of messages
- people replies promptly
- forward and attachment options to a large group of people
- economical
- more secure than letters / courier
- disadvantages:
- may lead to unnecessary / over emailing
- decreases physical interaction amongst employees, which in some cases is desirable
- not appropriate for:
- interviews / confidential meetings
- interactive group discussions
- training sessions
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Sociotechnical design
- attempts to produce an information system that are technically efficient but also
takes into account organizational and staff needs
- sociotechnical design takes into account three sub-systems of an organization
- the formal structure
- technological systems (work to be done, machines, etc.)
- social systems (the way people think or interact with each other)
- sociotechnical design gives weightage to the human aspects of the organization as well
- human aspects includes:
- the required skills to use the system
- task variety (I.e. minimize or spread around the monotonous tasks)
- ergonomics, I.e HCI and user interface designs
OTHER IMPACTS
Consumer privacy
- privacy of consumers' information such as those gathered by marketing companies,
financing companies, insurance companies, etc.
- problems includes:
- leakage of the private data to an unauthorized person
- inaccurate or unupdated information
Employee privacy
- deals with the personal information of the employee alongwith with his work habits
and his performance / productivity
Ethical issues
- ethic is concerned with judgements whether human choices / behavior which are
morally right or wrong
- ethical aspects in IS/IT covers:
- rights, responsibility, accountability and liability of information
- privacy and personal information (Data Protection Act 1998)
- technological secrets
- copyrights and patents
- steps to be taken in case of an ethical situation
- identify the facts
- define the problem / dilemma
- identify the stake holders / affectees
- identify the options available
- identify the consequences of the options
- decide upon an option
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3.4 BUSINESS INFORMATION MANAGEMENT
SUMMARY / EXTRA THEORIES
BY: Ashraf Rehman
Earl's Grid
Page 34 (Q6 DEC05)
Talks about plotting current systems. Compares business value vs tech quality
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Applications Portfolio (Peppard Strategic Grid)
Page 34.1 (Q6 DEC03)
Talks about plotting impact of individual systems in an Org. Compares strategic importance
in current comp environment vs strategic importance in future comp environment
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Parson's 6 Generic IS Strategies
(Q6A DEC04)
1 Centrally planned
- IS strategy is developed keeping in mind the business strategy
- business and IS strategy are seen as closely linked
2 Leading edge
- IS strategy is developed keeping in mind that innovative technology can create
competitive advantage
- investment in unproven / new IT initiatives is justified
3 Free market
- IS strategy is developed keeping in mind the industry (market) norms and
competitors IS/IT standards
- IS viewed as a competitive business unit which should earn a return on investment
4 Monopoly
- IS strategy is developed keeping in mind that information is an asset of the
organization and has t be effectively controlled, just like any other resource
- strong focus on satisfying user requirements promptly
- directly opposite to free market strategy
5 Scarce resource
- IS strategy is developed keeping in mind the budgetary control
- as finance is limited, all new IT initiatives should be clearly justified (e.g. strict
Cost Benefit Analysis)
6 Necessary evil
- IS strategy is developed keeping in mind that IT is only required to operate in the
modern world
- believes that information is not a significant factor for achieving business objectives
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Development of IS Strategies - Earl's 3 Legs
(Q3 DEC02)
3 Mixed
- uses both the above approaches
- focuses on exploiting the current IT infrastructure (e.g. innovation using
existing resources) in order to achieve the business objectives
- Ethics refers to principles of right and wrong that can be used to guide behavior
- the following 5 moral dimensions of information society raises ethical issues:
1 Information rights and obligations
- refers to the rights and responsibilities Organizations (and individuals) have
with respect to information they hold
- focuses on the 'privacy' of the information, which is increasingly getting endangered
- Code of practice should include:
- policies relating to security of information
- policies relating to privacy of information
2 Property rights
- how can intellectual property rights be protected (e.g. pirated software / songs)
in a digital society in which reproduction is so easy
- deals with licenses, copyrights, patents, etc.
- Code of practice should include:
- policies relating to software licenses
- policies relating to ownership of own source codes, e.g. copyright
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3 Accountability and control
- who will be held accountable for any harm done to any individual, organization's
information or property rights
- for e.g. who would be responsible if someone prepares a bomb based on
instructions available on website
- Code of practice should include:
- policies relating to use of passwords (logical access controls)
- policies relating to clear areas of responsibilities within the organization
4 System quality
- what should be the 'ideal' quality of systems - subjective issue
- a quality system 5 years ago may today be obsolete!
- difficult to strike a balance between time, quality and money
- Code of practice should include:
- policies relating to adoption of SSADMs for system developments
- policies relating acceptable hardware and software characteristics
5 Quality of life
- technology has improved quality of life, e.g. e-commerce, faster info thru internet
- technology has also deteriorated quality of life for some people, e.g. unemployment
- access to unethical materials through internet
- Code of practice should include:
- policies relating to staff lay-offs due to automation
- policies relating to staff training
- policies relating to restrictions on visiting unethical sites
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