CHAPTER 1

INFORMATION SYSTEM

Information System
There are so many definitions for information system and they all basically
describe the same concept.
“Information systems (IS) is the study of complementary networks of hardware
and software that people and organizations use to collect, filter, process, create,
and distribute data.”
“Information systems are combinations of hardware, software, and
telecommunications networks that people build and use to collect, create, and
distribute useful data, typically in organizational settings.”
“Information systems are interrelated components working together to collect,
process, store, and disseminate information to support decision making,
coordination, control, analysis, and visualization in an organization.”
As you can see, these definitions focus on two different ways of describing
information systems: the components that make up an information system and the
role that those components play in an organization. Ultimately, the most
appropriate definition would be that an information system is a solution to a
business need. It includes the tools and processes to address a series of business
requirements.

The Components of Information Systems

Many students understand that an information system has something to do with
databases or spreadsheets. Others mention computers and e-commerce. And they
are all right, at least in part: information systems are made up of different
components that work together to provide value to an organization.
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The first way I describe information systems to students is to tell them that they are
made up of five components: hardware, software, data, people, and process. The
first three, fitting under the technology category, are generally what most students
think of when asked to define information systems. But the last two, people and
process, are really what separate the idea of information systems from more
technical fields, such as computer science. In order to fully understand information
systems, students must understand how all of these components work together to
bring value to an organization.

Technology
Technology can be thought of as the application of scientific knowledge for
practical purposes. From the invention of the wheel to the harnessing of electricity
for artificial lighting, technology is a part of our lives in so many ways that we tend
to take it for granted. As discussed before, the first three components of
information systems – hardware, software, and data – all fall under the category of
technology. Each of these will get its own chapter and a much lengthier discussion,
but we will take a moment here to introduce them so we can get a full
understanding of what an information system is.

Hardware
Information systems hardware is the part of an information system you can touch –
the physical components of the technology. Computers, keyboards, disk drives,
iPads, and flash drives are all examples of information systems hardware. We will
spend some time going over these components and how they all work together.

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Software
Software is a set of instructions that tells the hardware what to do. Software is not
tangible – it cannot be touched. When programmers create software programs,
what they are really doing is simply typing out lists of instructions that tell the
hardware what to do. There are several categories of software, with the two main
categories being operating-system software, which makes the hardware usable, and
application software, which does something useful. Examples of operating systems
include Microsoft Windows on a personal computer and Google’s Android on a
mobile phone. Examples of application software are Microsoft Excel and Angry
Birds.
Data
The third component is data. You can think of data as a collection of facts. For
example, your street address, the city you live in, and your phone number are all
pieces of data. Like software, data is also intangible. By themselves, pieces of data
are not really very useful. But aggregated, indexed, and organized together into a
database, data can become a powerful tool for businesses. In fact, all of the
definitions presented at the beginning of this chapter focused on how information
systems manage data. Organizations collect all kinds of data and use it to make
decisions. These decisions can then be analyzed as to their effectiveness and the
organization can be improved.
Networking Communication
Besides the components of hardware, software, and data, which have long been
considered the core technology of information systems, it has been suggested that
one other component should be added: communication. An information system can
exist without the ability to communicate – the first personal computers were stand-
alone machines that did not access the Internet. However, in today’s hyper-
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connected world, it is an extremely rare occasion that computer does not connect to
another device or to a network. Technically, the networking communication
component is made up of hardware and software, but it is such a core feature of
today’s information systems that it has become its own category.

People
Steve Jobs and Bill Gates, when thinking about information systems, it is easy to
get focused on the technology components and forget that we must look beyond
these tools to fully understand how they integrate into an organization. A focus on
the people involved in information systems is the next step. From the front-line
help-desk workers, to systems analysts, to programmers, all the way up to the chief
information officer (CIO), the people involved with information systems are an
essential element that must not be overlooked.

Process
The last component of information systems is process. A process is a series of
steps undertaken to achieve a desired outcome or goal. Information systems are
becoming more and more integrated with organizational processes, bringing more
productivity and better control to those processes. But simply automating activities
using technology is not enough – businesses looking to effectively utilize
information systems do more. Using technology to manage and improve processes,
both within a company and externally with suppliers and customers, is the ultimate
goal. Technology buzzwords such as “business process reengineering,” “business
process management,” and “enterprise resource planning” all have to do with the
continued improvement of these business procedures and the integration of
technology with them. Businesses hoping to gain an advantage over their
competitors are highly focused on this component of information systems.
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Types of Information Systems
There are different types of information systems.
1. Manual (pen and pencil) information system
2. Informal (word to mouth) information system
3. Formal (written-based) information system
4. Computer-based information system
Data is the bloodstream of any business entity. Everyone in an organization needs
information to make decisions. An information system is an organized way of
recording, storing data, and retrieving information.
Manual Information System
A manual information system does not use any computerized devices. The
recording, storing and retrieving of data is done manually by the people, who are
responsible for the information system.
The following are the major components of a manual information system
 People –people are the recipients of information system
 Business Procedures –these are measures put in place that define the rules
for processing data, storing it, analyzing it and producing information
 Data –these are the recorded day to day transactions
 Filing system – this is an organized way of storing information
 Reports –the reports are generated after manually analyzing the data from
the filing system and compiling it.

The following diagram illustrates how a typical manual information system works

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Advantages and Dis-advantages of a manual information
system

Advantages:
The following are the advantages of manual information systems
 Cost effective – it is cheaper compared to a computerized system because
there is no need to purchase expensive equipment such as servers,
workstations, printers, etc.
 Flexible –evolving business requirements can easily be implemented into
the business procedures and implemented immediately

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Disadvantages:
The following are some of the disadvantages of a manual
information system.
 Time consuming –all data entries need to be verified before filing, this is a
time-consuming task when done by humans. Retrieving data from the filing
system also takes a considerable amount of time
 Prone to error – the accuracy of the data when verified and validated by
human beings is more prone to errors compared to verification and
validation done by computerized systems.
 Lack of security – the security of manual systems is implemented by
restricting access to the file room. Experience shows unauthorized people
can easily gain access to the filing room
 Duplication of data –most departments in an organization need to have
access to the same data. In a manual system, it is common to duplicate this
data to make it easy to accessible to all authorized users. The challenge
comes in when the same data needs to be updated
 Data inconsistency – due to the duplication of data, it is very common to
update data in one file and not update the other files. This leads to data
inconsistency
 Lack of backups – if the file get lost or mishandled, the chances of
recovering the data are almost zero.

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Computerized Information System
Computerized systems were developed to address the challenges of manual
information systems. The major difference between a manual and computerized
information system is a computerized system uses a combination of software and
hardware to record, store, analyze and retrieve information.

Advantages and Disadvantages of a computerized information system (MIS)

The following are some of the disadvantages of a computerized information
system.
Advantages:
The following are the advantages of computerized information systems
 Fast data processing and information retrieval – this is one of the biggest
advantages of a computerized information system. It processes data and
retrieves information at a faster rate. This leads to improved client/customer
service
 Improved data accuracy – easy to implement data validation and
verification checks in a computerized system compared to a manual system.
 Improved security – in addition to restricting access to the database server,
the computerized information system can implement other security controls
such as user’s authentication, biometric authentication systems, access rights
control, etc.
 Reduced data duplication – database systems are designed in such a way
that minimized duplication of data. This means updating data in one
department automatically makes it available to the other departments

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  Improved backup systems – with modern day technology, backups can be
stored in the cloud which makes it easy to recover the data if something
happened to the hardware and software used to store the data
 Easy access to information – most business executives need to travel and
still be able to make a decision based on the information. The web
and Mobile technologies make accessing data from anywhere possible.

Disadvantages:
 It is expensive to set up and configure – the organization has to buy
hardware and the required software to run the information system. In
addition to that, business procedures will need to be revised, and the staff
will need to be trained on how to use the computerized information system.
 Heavy reliance on technology – if something happens to the hardware or
software that makes it stop functioning, then the information cannot be
accessed until the required hardware or software has been replaced.
 Risk of fraud – if proper controls and checks are not in place, an intruder
can post unauthorized transactions such as an invoice for goods that were
never delivered, etc.

We are focused on the 4th type of information system. The type of information
system that a user uses depends on their level in an organization. The following
diagram shows the three major levels of users in an organization and the type of
information system that they use.

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Fig 1.1 levels of management
The diagram above reveals the levels of management, the type of information
system they use and the type of decisions they take.
1. Transaction Processing Systems (TPS)
This type of information system is used to record the day to day transactions of a
business. An example of a Transaction Processing System is a Point of Sale (POS)
system. A POS system is used to record the daily sales. These daily sales recorded
ends up in a database which can be amassed much later and used for decision
making through a process known as data mining.

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 2. Management Information Systems (MIS)
Management Information Systems are used to guide tactic managers to make semi-
structured decisions. The output from the transaction processing system is used as
input to the MIS system.

3. Decision Support Systems (DSS)

Decision support systems are used by top level managers to make semi-structured
decisions. The output from the Management Information System is used as input to
the decision support system. DSS systems also get data input from external sources
such as current market forces, competition, etc.

Features of Information System

1. People – this refers to people who use the information system. People have
an involvement in the capturing and the use of information, by highlighting the
value of the information that is being collected you can motivate those whose job it
is to collect this information. Those who use the information will analyse it and use
it to benefit factors like growth or the profit an organization makes in a period of
time.
2. Data – the data that the information system records. The data collected must
be as accurate as possible and stored in a logical manner. The data will then be
summarized to create information which will then be used by the different
functional departments in the organization like the purchasing department who will
use information on stock levels and trends to determine what and how much of a
product should be bought.
3. telecommunication – organisations use telecommunication to distribute and
receiving information from vendors and business partners. This is usually done
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over intranet or extranet and it is secured through the use of firewall. In some
cases, a separate and dedicated network is used to ensure complete security.
4. Hardware – these include servers, workstations, networking equipment,
printers, etc.
5. Software – these are programs used to handle the data. These include
programs such as spreadsheet programs, database software, etc.

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 Chapter 2
Overview of Management Information System
There exists a broad range of definitions of MIS in literatures. But on the other
hand, there is no standard or definite definition of MIS. Some authors use terms
MIS and IS interchangeably. A simple definition of MIS defines it as any
organized approach for obtaining relevant and timely information on which
managerial decision making is based. Nowadays the term MIS is almost
exclusively used and/or reserved for computerized systems. According to this fact,
MIS is a computer-based system that provides information and support for
managerial decision making. But on the other hand, common to various definitions
of MIS is that main purpose of the MIS is providing accurate and timely
information and thus supporting managerial decision making. This is due to the
fact, that manager could not perform decision activities effectively without relevant
information. The development and increased importance of MIS in business
practice is also due to the advancement of internet and information and
communication technology (ICT), which on the other hand make the foundation
for/of MIS (in broader sense). Another factor is also affordability of powerful
personal computers and other information technology equipment for almost every
organization. In modern business environment, organizations could not (anymore)
compete without accurate and timely information, which are in contemporary
organizations mainly provided by MIS.
An effective MIS must provide information with following characteristics:
- Timely and up-to date, outdated information is useless for decision making.
- Correct and accurate information.
- Concise/limited to the most necessary, due to the limited ability of manager to
absorb huge quantities of information at once.

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- Relevant, because in a given situation only a small portion of given data is useful
information.
- Complete information. Information characteristics should (and also must) be
viewed as a system.
Therefore, information which lack of one of above-mentioned characteristics could
reduce the quality of decision-making process and in turn affect (most likely
decrease) effectiveness and efficiency of an organization. Most of the typologies
classify information systems according to the main organizational levels (top,
middle, low and operations) with the focus on the functions they perform and the
people they serve in organization.
According to above presented cognitions about manager’s information need we
can therefore assume that there are clear differences in information requirements
between managers at different organizational levels (e.g. top manager and first line
manager). Therefore, MIS are not the same at all managerial levels in
organizations. Managers at different organizational levels have/use different MIS,
due to the different information needs of managers at different levels in
organization. In Fig. 2 below, one among several typologies of MIS is presented In
Fig 2.
Figure 2. Relationship of information systems to organizational level.

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According to Fig. 2 several type of information systems is used to provide
managers information they need. Management reporting systems help managers
monitor the operations and resources of an organization. Management reporting
system produces mainly detailed reports, summary reports, and exception reports.
A great proportion in management reporting systems are detailed reports, used
primarily by managers at operational level.
Summary reports are also used by middle and strategic management. A decision
support system is an information system which assists managers in evaluating the
impact of alternative decisions.
Therefore decision support system provides managers different models, analytic
tools, and the support for of ad-hoc queries. In that frame, decision support system
enable managers to analyze and/or predict the impact of current decisions on future
conditions. Manager can also model a complex set of circumstances and
manipulate various parameters in order to assess the impact of various solutions in

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diverse conditions. From Fig. 2 is evident that in the frame of decision support
systems we also have
executive support systems, which are designed specifically for managers on the
strategic management level.
From Fig. 2 is seen that MIS is supported by organization’s transaction processing
systems and by internal and external databases. Very commonly used transaction
processing systems in contemporary organizations are enterprise resource planning
systems which pull together various types of information from operations (i.e.
operational level of organization) in order to ensure data for MIS database.
Therefore, enterprise resource planning systems are a backbone of the MIS.
However, using MIS in organizations also has several disadvantages that must be
addressed.
Experiences from business practice show that sometimes despite the fact, that MIS
uses advanced computer equipment, MIS have had relatively little success in
providing needed information to managers. Main reasons are:
- Lack of management involvement (i.e. users)in the design of MIS which will be
implemented in organization.
- Poor appreciation of management’s information requirements by MIS designers,
due to the lack of cooperation in the designing phase of MIS with users of MIS.
- Too much emphasis on the computer system and other needed equipment instead
on MIS design/creation process.
- Lack of top management support. MIS implementation is an ongoing process of
organizational change. One important consideration must be pointed out, because
the injection of technology in organization (in this case MIS) is not sufficient in
order to improve the performance of organization. Researchers started to focus on
human and organizational factors that affect the success or failure of implementing
MIS.
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Since many MIS have not fulfilled manager’s information needs, MIS users’
involvement in creating and designing has become almost prerequisite for
successful implementation and usage of MIS. Issues about ensuring, that MIS
corresponds with manager’s information needs has been discussed heavily in
literature. In next chapter we make some suggestions how to more holistically
address the manager’s information needs in the frame of MIS design/creation
process in order to ensure that MIS will correspond with manager’s information
needs.

In a nutshell, MIS is a collection of systems, hardware, procedures and people that

all work together to process, store, and produce information that is useful to the
organization.
Put simply, MIS is the use of information technology, people, and business
processes to record, store and process data to produce information that decision
makers can use to make day to day decisions.

The system utilizes

• Computer hardware & software

• Manual procedures

• Models for analysis, planning, control, and decision

making, and
• A database
Components of MIS
The major components of a typical management information system
are;

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 1. People – people who use the information system
2. Data – the data that the information system records
3. Business Procedures – procedures put in place on how to record,
store and analyze data
4. Hardware – these include servers, workstations, networking
equipment, printers, etc.
5. Software – these are programs used to handle the data. These include
programs such as spreadsheet programs, database software, etc.

The Need for MIS

The corporate environment is dynamic involving uncertainties and risks. These
uncertainties and risks drive business organizations to take complicated decision to
survive in the market. Since the primary goal of any organization is to improve its
profitability and sustain in the long run. Hence, any business establishment cannot
afford to ignore the importance of MIS.
The following are some of the justifications for having an MIS system
1. Decision makers need information to make effective decisions. Management
Information Systems (MIS) make this possible.
2. MIS systems facilitate communication within and outside the organization –
employees within the organization are able to easily access the required
information for the day to day operations. Facilitates such as Short Message
Service (SMS) & Email make it possible to communicate with customers
and suppliers from within the MIS system that an organization is using.
3. Record keeping – management information systems record all business
transactions of an organization and provide a reference point for the
transactions.

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Application of MIS
MIS is applied differently at different managerial levels. This gave rise to different
types of IS or MISs.

As can be seen above, there is not a simple answer to this. Depending on how you
create your classification, you can find almost any number of different types of
information system. However, it is important to remember that different kinds of
systems found in organizations exist to deal with the particular problems and tasks
that are found in organizations. Consequently, most attempts to classify
Information systems into different types rely on the way in which task and
responsibilities are divided within an organization. As most organizations are
hierarchical, the way in which the different classes of information systems are
categorized tends to follow the hierarchy. This is often described as "the pyramid
model" because the way in which the systems are arranged mirrors the nature of
the tasks found at various different levels in the organization.

For example, this is a three-level pyramid model based on the type of decisions
taken at different levels in the organization.

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Three level pyramid model based on the type of decisions taken at different levels
in the organization

Similarly, by changing our criteria to the different types of data / information /

knowledge that are processed at different levels in the organization, we can create
a five-level model.

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Five level pyramid model based on the processing requirement of different levels
in the organization

Types of Information Systems

While there are several different versions of the pyramid model, the most common
is probably a four-level model based on the people who use the systems. Basing
the classification on the people who use the information system means that many
of the other characteristics such as the nature of the task and informational
requirements, are taken into account more or less automatically.

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Four level pyramid model based on the different levels of hierarchy in the
organization

A comparison of different kinds of Information Systems

Using the four-level pyramid model above, we can now compare how the
information systems in our model differ from each other.

1. Transaction Processing Systems

What is a Transaction Processing System?

Transaction Processing System are operational-level systems at the bottom

of the pyramid. They are usually operated directly by shop floor workers or

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front line staff, which provide the key data required to support the
management of operations. This data is usually obtained through the
automated or semi-automated tracking of low-level activities and basic
transactions.

Functions of a TPS

TPS are ultimately little more than simple data processing systems.

Functions of a TPS in terms of data processing requirements

Inputs Processing Outputs
Validation
Sorting Lists
Transactions Listing Detail reports
Events Merging Action reports
Updating Summary reports?
Calculation

Some examples of TPS

o Payroll systems
o Order processing systems
o Reservation systems
o Stock control systems
o Systems for payments and funds transfers

The role of TPS

o Produce information for other systems

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 o Cross boundaries (internal and external)
o Used by operational personnel + supervisory levels
o Efficiency oriented
2. Management Information Systems

What is a Management Information System?

For historical reasons, many of the different types of Information Systems

found in commercial organizations are referred to as "Management
Information Systems". However, within our pyramid model, Management
Information Systems are management-level systems that are used by middle
managers to help ensure the smooth running of the organization in the short
to medium term. The highly structured information provided by these
systems allows managers to evaluate an organization's performance by
comparing current with previous outputs.

Functions of a MIS

MIS are built on the data provided by the TPS

Functions of a MIS in terms of data processing requirements

Inputs Processing Outputs
Internal Transactions Sorting Summary reports
Internal Files Merging Action reports
Structured data Summarizing Detailed reports

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 Some examples of MIS

o Sales management systems

o Inventory control systems
o Budgeting systems
o Management Reporting Systems (MRS)
o Personnel (HRM) systems

The role of MIS

o Based on internal information flows

o Support relatively structured decisions
o Inflexible and have little analytical capacity
o Used by lower and middle managerial levels
o Deals with the past and present rather than the future
o Efficiency oriented?
3. Decision Support Systems

What is a Decision Support System?

A Decision Support System can be seen as a knowledge-based system, used

by senior managers, which facilitates the creation of knowledge and allow
its integration into the organization. These systems are often used to analyze
existing structured information and allow managers to project the potential
effects of their decisions into the future. Such systems are usually interactive
and are used to solve ill structured problems. They offer access to databases,
analytical tools, allow "what if" simulations, and may support the exchange
of information within the organization.

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Functions of a DSS

DSS manipulate and build upon the information from a MIS and/or TPS to
generate insights and new information.

Functions of a DSS in terms of data processing requirements

Inputs Processing Outputs
Modelling
Internal Transactions Summary reports
Simulation
Internal Files Forecasts
Analysis
External Information? Graphs / Plots
Summarizing

Some examples of DSS

o Group Decision Support Systems (GDSS)

o Computer Supported Co-operative work (CSCW)
o Logistics systems
o Financial Planning systems
o Spreadsheet Models?

The role of DSS

o Support ill- structured or semi-structured decisions

o Have analytical and/or modelling capacity
o Used by more senior managerial levels
o Are concerned with predicting the future
o Are effectiveness oriented?

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4. Executive Information Systems

Executive Information Systems are strategic-level information systems that

are found at the top of the Pyramid. They help executives and senior
managers analyze the environment in which the organization operates, to
identify long-term trends, and to plan appropriate courses of action. The
information in such systems is often weakly structured and comes from both
internal and external sources. Executive Information System are designed to
be operated directly by executives without the need for intermediaries and
easily tailored to the preferences of the individual using them.

Functions of an EIS

EIS organizes and presents data and information from both external data
sources and internal MIS or TPS in order to support and extend the inherent
capabilities of senior executives.

Functions of a EIS in terms of data processing requirements

Inputs Processing Outputs
External Data Summarizing Summary reports
Internal Files Simulation Forecasts
Pre-defined models "Drilling Down" Graphs / Plots

Some examples of EIS

Executive Information Systems tend to be highly individualized and are

often custom made for a particular client group; however, a number of off-
the-shelf EIS packages do exist and many enterprise level systems offer a
customizable EIS module.

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 The role of EIS

o Are concerned with ease of use

o Are concerned with predicting the future
o Are effectiveness oriented
o Are highly flexible
o Support unstructured decisions
o Use internal and external data sources
o Used only at the most senior management levels

Types of Report in MIS

The Summary Reports

These reports take data from different categories and aggregate it. It could be from
different products, or different business units or geographical regions or accounting
periods.

The information that is being aggregated in summary reports is usually

presented in such a way that management can make sense of i*t*. If it is an
inventory summary, then it will consider vital information like the value of
inventory in stock as well as the value of new purchases. If it is a sales summary,
then it will contain information about sales revenue as well as divisions for that
revenue in terms of geographical location, product category, and so on. No matter
what kind of management information system you are using, even if it is as simple
as a spreadsheet, it will allow you to specify the format in which you want the
report.

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The Trend Reports

Trend reports simply show trends, which allow you to compare how different

things perform and they also enable you to compare present performance with past
performance. A trend report of sales, for example, shows the performance of
a given product category or business unit over the course of, say, a year. That year
will then be broken down into months, weeks, and so on so that you can see how
well it did over different periods. You can also see how well a product category or
business unit is doing from one year to the next.

When management uses trend reports, they can pinpoint problem areas and figure
out how to correct them. A business unit that’s not doing well may need for the
leadership in it to be changed, so it can improve. A product category that is
suffering may need to either be improved or scrapped altogether.
The Exception Reports
An exception is anything outside of the norm. An exception report will collect
every single instance of these abnormal occurrences and then put them in one place
where management has easy access to it. An exception report
allows management to see what’s not going right and then prioritize
whatneeds to be solved immediately. If, for example, inventory levels are well
below the norm, then management can order more supplies. If a business unit is
making much less revenue than the norm, then management can take action.
On-Demand Reports
On-demand reports are produced on demand. The way they look and what is
contained in them depend on both the r*equirements of
the* manager that needs them and on the prevailing circumstances.

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The management information format can either be a standard format or a custom
one as required by the requester.
For example, the business owner might want a sales report for a specific product
category to see how well it is selling in a particular location during
a given holiday season, or at a specific price. A manager may want to know how a
change in the price of a product or service will affect the profitability of that
product or service.

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 Chapter 3
Management
Management can be defined as the process of administering and controlling the
affairs of the organization, irrespective of its nature, type, structure and size. It is
an act of creating and maintaining such a business environment wherein the
members of the organization can work together, and achieve business objectives
efficiently and effectively.
Management acts as a guide to a group of people working in the organization and
coordinating their efforts, towards the attainment of the common objective.
In other words, it is concerned with optimally using 5M’s, i.e. men, machine,
material, money and methods and, this is possible only when there are proper
direction, coordination and integration of the processes and activities, to achieve
the desired results.
Levels of Management

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Figure 3.1 Levels of management
1. Top-Level Management: This is the highest level in the organizational
hierarchy, which includes Board of Directors and Chief Executives. They
are responsible for defining the objectives, formulating plans, strategies and
policies.
2. Middle-Level Management: It is the second and most important level in
the corporate ladder, as it creates a link between the top and lower level
management. It includes departmental and division heads and
managers who are responsible for implementing and controlling plans and
strategies which are formulated by the top executives.
3. Lower Level Management: Otherwise called as functional or operational
level management. It includes first line managers, foreman, supervisors.
As lower level management directly interacts with the workers, it plays a
crucial role in the organization because it helps in reducing wastage and idle
time of the workers, improving quality and quantity of output.

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Functions of Management

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 Planning: It is the first and foremost function of management, i.e. to decide
beforehand what is to be done in future. It encompasses formulating policies,
establishing targets, scheduling actions and so forth.
 Organizing: Once the plans are formulated, the next step is to organise the
activities and resources, as in identifying the tasks, classifying them,
assigning duties to subordinates and allocating the resources.
 Staffing: It involves hiring personnel for carrying out various activities of
the organization. It is to ensure that right person is appointed to the right job.
 Directing: It is the task of the manager to guide, supervise, lead and
motivate the subordinates, to ensure that they work in right direction, so far
as the objectives of the organization are concerned.

34
 Controlling: The controlling function of management involves a number of
steps to be taken to make sure that the performance of the employees is as
per the plans. It involves establishing performance standards and comparing
them with the actual performance. In case of any variations, necessary steps
are to be taken for its correction.
 Coordination is an important feature of management which means the
integration of the activities, processes and operations of the organization and
synchronisation of efforts, to ensure that every element of the organization
contributes to its success.

Information Needs of Managers

Manager’s work is complex. In that context, information is necessary to
support managerial work and especially managerial decision making, which
is often considered as manager’s most challenging activity. Managers at
different organizational levels have diverse information requirements. In
order to efficiently do their work, most managers diagnose (i.e. know) their
information needs. In this chapter we are focusing especially on manager’s
information needs according to their managerial level in organization.
According to manager’s organizational level we can identify three main
levels of managerial decision making in organizations:
- Strategic decision making – most activities in strategic management are
dedicated mainly to establishing objectives for whole organization and
preparation of long-range plans for attaining those objectives (e.g. decision
where to build a new subsidiary).
- Tactical decision making – most activities are concerned with
implementation of decisions made at strategic organizational level.
- Operational decision making – main concern is to execute specific tasks
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in most efficient and effective manner.
In Table are summarized information characteristic at different levels of
decision making.

36
37
 Table 1. Several important information characteristics at different levels of
managerial decision making.

At all three levels of managerial decision making exist mainly two types of
decisions:
- Structured decisions – such decisions are repetitive, routine and have a
definite procedure for handling them. Therefore, structured decisions do not
have to be treated each time as if they were new. A great proportion of
structured decisions are at operational level in organization; and
- Unstructured decisions – decision maker must provide judgment,
evaluation, and insight into the problem. Since each of these decisions is
novel, important and nonroutine, there is no definite and/or agreed procedure
in advance for decision making.

Qualities of Information

Effectiveness: deals with information being relevant and pertinent to the

business process as well as being delivered in a timely, correct, consistent, and
usable manner.

Efficiency: concerns the provision of information through the optimal (most

productive and economical) usage of resources.

Confidentiality: concerns the protection of sensitive information from

unauthorized disclosure.

Integrity: relates to the accuracy and completeness of information as well as to

its validity in accordance with business values and expectations.

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Availability: relates to information being available when required by the
business process now and in the future. It also concerns the safeguarding of
necessary resources and associated capabilities.

Compliance: deals with complying with those laws, regulations, and

contractual obligations to which the business process is subject, i.e., externally
imposed business criteria.

Reliability of Information: relates to the provision of appropriate information

for management to operate the entity and for management to exercise its
financial and compliance reporting responsibilities.

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 Chapter Four

MIS Development Process and SDLC

Software is one of the major components of a management information system.

Some of the software used in a MIS system is off the shelf. These include packages
such as spreadsheet programs, database applications, etc.

However, there are times when off the shelf software does not meet the business
requirements. The solution to this problem is custom made software.

This section will focus on the methodologies used to develop custom software. 

In this chapter, you will learn:

 Information Systems Development Stakeholder

 MIS Systems Analysis and Design
 MIS Object oriented analysis and design
 MIS Systems Development Life Cycle (SDLC)
 Waterfall Model
 Agile Development
 Prototyping

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Information Systems Development Stakeholder

A typical information systems development usually has three (3) stakeholders

namely;

 Users – Users are the ones who use the system after it has been developed to
perform their day to day tasks.
 Project sponsors - this category of the stakeholders is responsible for the
financial aspect of the project and ensuring that the project is completed.
 Developers – this category is usually made up of systems analysts and
programmers. The system analysts are responsible for collecting the user
requirements and writing system requirements.

The programmers develop the required system based on the system

requirements that is developed by the system analysts.

The most important stakeholders in a project are users. For a project to be accepted
as being completed, the users must accept it and use it. If the users do not accept
the system, then the project is a failure.

MIS Systems Analysis and Design

Systems analysis and design refers to two closely related disciplines system

analysis and system design.

 System analysis is concerned with understanding the business objectives,

goals and developing business processes. The end product of systems
analysis is systems specifications.
 System design uses the output from system analysis as its input. The main
objective of system design is to interpret the system requirements into
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 architectural, logical and physical designs of how the information system is
to be implemented.

MIS Object oriented analysis and design

Object-oriented analysis and design (OOAD) is closely related to systems analysis

and design. The main difference between object-oriented analysis and design
(OOAD) and systems analysis and design is that OOAD uses objects to represent
real-world entities. Object oriented analysis and design uses visual modeling to
improve communication among all stakeholders and produce high-quality
products. An object is a representation of a real-world entity such as a customer, a
product, an employee, etc. Unified Modeling Language (UML) is a general-
purpose language used to create visual designs for a system.

The following image shows a sample UML diagram that shows users interacting
with a point of sale system

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MIS Systems Development Life Cycle (SDLC)

The system development life cycle refers to the process of planning, creating,
testing, and deploying an information system. The main objective of system
development life cycle is to produce high-quality information systems that meet or
exceed the expectations of the users within the stipulated budget and time frame.

SDLC uses a number of development methodologies to achieve this objective. The

next sections will discuss some of the most popular development methodologies.

Waterfall Model

The waterfall model uses a sequential design model. The next stage starts only
after the completion of the previous stage. The first stage is usually drawn on the
top and the subsequent stages below and to the left bottom. This forms a waterfall
like structure, and it's where the name came from.

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The main objective of the waterfall model is

 Planning
 Time scheduling
 Budgeting and
 Implementing an entire system at once

The waterfall model is ideal when the user requirements are clearly understood and
are not expected to change radically during the development of the information
system. The waterfall model is ideal in situations where a project has a fixed-
scope, fixed time frame, and fixed price.

The biggest challenge of the waterfall model is adoption to change. It is not easy to
incorporate new user requirements.

Agile Development

Agile development is an alternative methodology to traditional project

management which promotes adaptive planning, evolutionary development, early
delivery, continuous improvement, and encourages rapid and flexible response to
change. Agile development methodology is a type of software project management
process where demands and solutions evolve through the collaborative effort of
self-organizing and cross-functional teams and their customers.

The traditional development method, waterfall model is rigid and has no room for
a change in the agreed requirements. The software industry is a highly competitive
market due to the fact that software is something that can be continuously
upgraded. This means that developers need to constantly improve on their products

44
in order to keep up but the linear, sequential approach of the waterfall makes this
difficult.

Most times, at the end of the software development, users end up having something
to complain about. In 2001, a team of 13 developers created what is now known as
the Agile Manifesto. The agile manifesto is a declaration of the values and
principles expressed in Agile Methodology. It is made up of 4 foundational values
and 12 key principles. It aims to help uncover better ways of developing software
by providing a clear and measurable structure that promotes iterative development,
team collaboration, and change recognition.

The values and principles of the ‘Manifesto for Agile Software Development’ are:

Values

1. Individuals and interactions over processes and tools

2. Working software over comprehensive documentation
3. Customer collaboration over contract negotiation
4. Responding to change over following a plan

Principles

1. Customer satisfaction through early and continuous software delivery

2. Accommodate changing requirements throughout the development process
3. Frequent delivery of working software
4. Collaboration between the business stakeholders and developers throughout
the project
5. Support, trust, and motivate the people involved
6. Enable face-to-face interactions

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 7. Working software is the primary measure of progress
8. Agile processes to support a consistent development pace
9. Attention to technical detail and design enhances agility
10.Simplicity
11.Self-organizing teams encourage great architectures, requirements, and
designs
12.Regular reflections on how to become more effective

Those who apply any type of Agile methodology adhere to these values and
principles. The manifesto offers a good overview of what is expected when it
comes to the Agile development life cycle practices.

What is Agile project management?

Agile project management is a methodology that is commonly used to deliver

complex projects due to its adaptiveness. It emphasizes collaboration, flexibility,
continuous improvement, and high quality results. It aims to be clear and
measurable by using six main “deliverables” to track progress and create the
product.

The deliverables

1. Product vision statement: A summary that articulates the goals for the
product.
2. Product roadmap: The high-level view of the requirements needed to
achieve the product vision.
3. Product backlog: Ordered by priority, this is the full list of what is needed
to be done to complete your project.
4. Release plan: A timetable for the release of a working product.

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 5. Sprint backlog: The user stories (requirements), goals, and tasks linked to
the current sprint.
6. Increment: The working product functionality that is presented to the
stakeholders at the end of the sprint, and could potentially be given to the
customer.

There are various frameworks within Agile project management that can be used to
develop and deliver a product or service. While they each have their own set of
characteristics and terminology, they share common principles and practices.

A sprint in agile terms is a well-defined task to be accomplished within a given

time. Sprint goals and durations are set by the customers and development team.
All stakeholders must meet in person to get the feedback on the sprint before they
can move on to the next sprint if any.

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The following diagram illustrates how agile development methodologies are
implemented.

Prototyping

A prototype is a semi-functional simulation model of the actual system to be

developed. Prototyping development methodologies make use of prototypes.
Prototypes allow both developers and users to get feedback early.

Prototyping makes it easy for users to specify their requirements and developers
understanding the requirements of the users because of the prototypes. A
prototyping methodology stands with identifying the basics system requirements
especially the input and output from the system. These requirements are then used
to create a simulation model that users can interact with and provide feedback. The
user feedback is used to enhance the prototype and make other important decisions
such as project costing and feasible time schedules.

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The following diagram illustrate the stages of prototyping

Summary:

Information systems development refers to methodologies and steps involved in

developing a new information system or upgrading an existing system to meet the
evolving user requirements.

In a nutshell, a development methodology has to first identify and understand the

problem with the existing system and find a solution that solves the problem.

The methodology chosen depends on the nature of the project and user
requirements.

 The waterfall model is ideal when the project is not expected to change
much

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  While methodologies such as Agile, Prototyping, etc. are ideal when the
project is expected to change during the course of development and the
changes, have to be incorporated.

Ethical & Security Issues in Information System

Information systems have made many businesses successful today. Some

companies such as Google, Facebook, EBay, etc. would not exist without
information technology. However, improper use of information technology can
create problems for the organization and employees.

Criminals gaining access to credit card information can lead to financial loss to the
owners of the cards or financial institute. Using organization information systems
i.e. posting inappropriate content on Facebook or Twitter using a company account
can lead to lawsuits and loss of business.

This section will address such challenges that are posed by information systems
and what can be done to minimize or eliminate the risks.

In this section, you will learn:

 Cyber-crime
 Information system Security
 Information system Ethics
 Information Communication Technology (ICT) policy

Cyber-crime

Cyber-crime refers to the use of information technology to commit crimes. Cyber-

crimes can range from simply annoying computer users to huge financial losses

50
and even the loss of human life. The growth of smartphones and other high-
end Mobile devices that have access to the internet have also contributed to the
growth of cyber-crime.

51
Types of cyber-crime

Identity theft

Identity theft occurs when a cyber-criminal impersonates someone else identity to

practice malfunction. This is usually done by accessing personal details of
someone else. The details used in such crimes include social security numbers,
date of birth, credit and debit card numbers, passport numbers, etc.

Once the information has been acquired by the cyber-criminal, it can be used to
make purchases online while impersonating himself to be someone else. One of the
ways that cyber-criminals use to obtain such personal details is phishing. Phishing
involves creating fake websites that look like legitimate business websites or
emails.

For example, an email that appears to come from YAHOO may ask the user to
confirm their personal details including contact numbers and email password. If
the user falls for the trick and updates the details and provides the password, the
attacker will have access to personal details and the email of the victim.

If the victim uses services such as PayPal, then the attacker can use the account to
make purchases online or transfer funds.

Other phishing techniques involve the use of fake Wi-Fi hotspots that look like
legitimate ones. This is common in public places such as restaurants and airports.
If an unsuspecting user logon into the network, then cyber-crimes may try to gain
access to sensitive information such as usernames, passwords, credit card numbers,
etc.

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According to the US Department of Justice, a former state department employee
used email phishing to gain access to email and social media accounts of hundreds
of women and accessed explicit photos. He was able to use the photos to extort the
women and threatened to make the photos public if they did not give in to his
demands.

Copyright infringement

Piracy is one of the biggest problems with digital products. Websites such as the
pirate bay are used to distribute copyrighted materials such as audio, video,
software, etc. Copyright infringement refers to the unauthorized use of copyrighted
materials.

Fast internet access and reducing costs of storage have also contributed to the
growth of copyright infringement crimes.

Click fraud

Advertising companies such as Google AdSense offer pay per click advertising
services. Click fraud occurs when a person clicks such a link with no intention of
knowing more about the click but to make more money. This can also be
accomplished by using automated software that makes the clicks.

Advance Fee Fraud

An email is sent to the target victim that promises them a lot of money in favor of
helping them to claim their inheritance money.

In such cases, the criminal usually pretends to be a close relative of a very rich
well-known person who died. He/she claims to have inherited the wealth of the late

53
rich person and needs help to claim the inheritance. He/she will ask for financial
assistance and promise to reward later. If the victim sends the money to the
scammer, the scammer vanishes and the victim loses the money.

Hacking

Hacking is used to by-pass security controls to gain unauthorized access to a

system. Once the attacker has gained access to the system, they can do whatever
they want. Some of the common activities done when system is hacked are;

 Install programs that allow the attackers to spy on the user or control their
system remotely
 Deface websites
 Steal sensitive information. This can be done using techniques such
as SQL Injection, exploiting vulnerabilities in the database software to gain
access, social engineering techniques that trick users into submitting ids and
passwords, etc.

Computer virus

Viruses are unauthorized programs that can annoy users, steal sensitive data or be
used to control equipment that is controlled by computers.

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Information System Security

MIS security refers to measures put in place to protect information system

resources from unauthorized access or being compromised. Security vulnerabilities
are weaknesses in a computer system, software, or hardware that can be exploited
by the attacker to gain unauthorized access or compromise a system.

People as part of the information system components can also be exploited using
social engineering techniques. The goal of social engineering is to gain the trust of
the users of the system.

Let's now look at some of the threats that information system face and what can be
done to eliminate or minimize the damage if the threat were to materialize.

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Computer viruses – these are malicious programs as described in the above
section. The threats posed by viruses can be eliminated or the impact minimized by
using Anti-Virus software and following laid down security best practices of an
organization.

Unauthorized access – the standard convention is to use a combination of a

username and a password. Hackers have learnt how to circumvent these controls if
the user does not follow security best practices. Most organizations have added the
use of mobile devices such as phones to provide an extra layer of security.

Let's take Gmail as an example, if Google is suspicious of the login on an account,

they will ask the person about to login to confirm their identity using their android

56
powered mobile devices or send an SMS with a PIN number which should
supplement the username and password.

If the company does not have enough resources to implement extra security like
Google, they can use other techniques. These techniques can include asking
questions to users during signup such as what town they grew up in, the name of
their first pet, etc. If the person provides accurate answers to these question, access
is granted into the system.

Data loss – if the data center caught fire or was flooded, the hardware with the data
can be damaged, and the data on it will be lost. As a standard security best practice,
most organizations keep backups of the data at remote places. The backups are
made periodically and are usually put in more than one remote area.

Biometric Identification – this is now becoming very common especially with

mobile devices such as smartphones. The phone can record the user fingerprint and
use it for authentication purposes. This makes it harder for attackers to gain
unauthorized access to the mobile device. Such technology can also be used to stop
unauthorized people from getting access to your devices.

Information system Ethics

Ethics refers to rules of right and wrong that people use to make choices to guide
their behaviors. Ethics in MIS seek to protect and safeguard individuals and society
by using information systems responsibly. Most professions usually have defined a
code of ethics or code of conduct guidelines that all professionals affiliated with
the profession must adhere to.

57
In a nutshell, a code of ethics makes individuals acting on their free will
responsible and accountable for their actions. An example of a Code of Ethics for
MIS professionals can be found on the British Computer Society (BCS) website.

Information Communication Technology (ICT) policy

An ICT policy is a set of guidelines that defines how an organization should use
information technology and information systems responsibly. ICT policies usually
include guidelines on;

 Purchase and usage of hardware equipment and how to safely dispose them
 Use of licensed software only and ensuring that all software is up to date
with latest patches for security reasons
 Rules on how to create passwords (complexity enforcement), changing
passwords, etc.
 Acceptable use of information technology and information systems
 Training of all users involved in using ICT and MIS

Summary

With great power comes great responsibility. Information systems bring new
opportunities and advantages to how we do business but they also introduce issues
that can negatively affect society (cybercrime). An organization needs to address
these issues and come up with a framework (MIS security, ICT policy, etc.) that
addresses them.

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 Chapter 5
Systems and System Theory
In the Management Information Systems, the concept of the ‘Systems’ play a very
essential and a defining role and it can be surely referred to as the backbone of the
management Information Systems. The major concept of the systems involves
basically the pattern or a way in which one thinks about managing optimally. In
management Information Systems, it acts as the framework for the visualization
and the analysation of the internal as well as the external environments and the
factors that affect these particular environments in a very integrated way or pattern.
59
The word systems refer to as the arrangement or the way of organizing some
specific things in a particular way. So now a system can be defined as the regularly
interacting interdependent group of the items ultimately leading to the formation of
a united whole. Particularly for the management Information Systems, a system
consists of certain specific set of elements that can be identified as them belonging
together because of the common purpose, goal or the objectives.

The features defining the system usually act as its boundaries, so it can be said that
the system is inside the boundary and the environment is outside the boundary.
Each system is further made of the sub systems, which further consist of the other
subsystems and one very important point to be kept in mind here is that all of these
subsystems are defined specifically by its boundaries. Each subsystem itself
actually acts as the system. The Interconnections and the various interactions that
generally take place between the various subsystems are referred to as the
interfaces.
These interfaces are generally known to occur at the boundary and usually take the
form of the inputs and the outputs. A system is not at all arranged randomly but is
arranged with the help of certain logic, which are governed by the rules, the
regulations, the principles, the policies etc. Such an arrangement of a system is
generally influenced by the objective which the system always desires to achieve.

In the management Information Systems, the concept of the system is very much
important and one should have an in-depth knowledge of it as with the help of this,
one can easily have a look at the individual elements, subsystems in the larger
perspective of the whole system leading to the optimal solutions and the synergy.

60
There are different types of the system and are generally found to be present in all
the fields of the endeavor. There are systems like the social system, political
system, economic system, educational system, etc.
All the Systems must possess the following –
1. Goals
2. Components
3. Subsystems
4. Behavior
5. Boundaries
6. Life cycle

A system is a group of interrelated components working together towards a

common goal, by accepting inputs and producing outputs in an organized
transformation process.
The interrelated components which are systematically arranged to form a system
are called subsystems. In simple words, system is a set of elements which operate
together to accomplish an objective. Systems may be physical, like the sun and its
planets; biological like the human body; technological, like an oil refinery; and
socio-economic, like a business organization. System concepts underlie the field of
information systems.

The study of system concepts has three basic implications:

1. A system must be designed to achieve a predetermined objective.
2. Interrelationships and interdependence must exist among the components.
3. The objectives of the organization as a whole have a higher priority than the
objectives of its subsystems.
Characteristics of a system

61
1. Organization: It implies structure and order. It is the arrangement of
components that helps to achieve objectives.
2. Interaction: It refers to the manner in which each component functions with
other components of the system.
3. Interdependence: It means that parts of the organization or computer system
depend on one another. They are coordinated and linked together according to
a plan. One subsystem depends on the output of another subsystem for proper
functioning.
4. Integration: It refers to the holism of systems. It is concerned with how a
system is tied together.
5. Central Objective: A system should have a central objective. Objectives may
be real or stated. Although a stated objective may be the real objective, it is not
uncommon for an organization to state one objective and operate to achieve
another. The important point is that users must know the central objective of a
computer application early in the analysis for a successful design and
conversion.

Elements of a System
1. Outputs and inputs: A major objective of a system is to produce an output that
has value to its user. In order to get a good output, inputs to system must be
appropriate. It is important to point out here that determining the output is a first
step in specifying the nature, amount and regularity of the input needed to operate
a system.
2. Processors: It is the element of a system that involves the actual transformation
of input into output. It is the operational component of a system. Processors may
modify the input totally.
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Taxonomy of Systems
1. Deterministic systems: a deterministic system operates in a predictable manner.
The interaction among the parts is known with certainty. A deterministic system is
one in which the occurrence of all events is known with certainty. If the description
of the system state at a particular point of time of its operation is given, the next
state can be perfectly predicted.

2. Probabilistic systems: The probabilistic system can be described in terms of

probable behavior, but a certain degree of error is always attached to the
predication of what the system will do. A probabilistic system is one in which the
occurrence of events cannot be perfectly predicted. Though the behavior of such a
system can be described in terms of probability, a certain degree of error is always
attached to the prediction of the behavior of the system. 
3. Static systems: It is a system in which output at any instant of time depends on
input sample at the same time.
Example:
1) y(n) = 9x(n)
In this example 9 is constant which multiplies input x(n). But output at nth instant
that means y(n) depends on the input at the same (nth) time instant x(n). So, this is
static system.
2) y(n) = x2(n) + 8x(n) + 17
Here also output at nth instant, y(n) depends on the input at nth instant. So, this is
static system.

4. Dynamic systems: It is a system in which output at any instant of time depends

on input sample at the same time as well as at other times.
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Here other time means, other than the present time instant. It may be past time or
future time. Note that if x(n) represents input signal at present instant then,
1) x(n-k); that means delayed input signal is called as past signal.
2) x(n+k); that means advanced input signal is called as future signal.
Thus, in dynamic systems, output depends on present input as well as past or future
inputs.
Examples:
1) y(n) = x(n) + 6x(n-2)
Here output at nth instant depends on input at nth instant, x(n) as well as (n-2)th
instant x(n-2) is previous sample. So the system is dynamic.
2) y(n) = 4x(n+7) + x(n)
Here x(n+7) indicates advanced version of input sample that means it is future
sample therefore this is dynamic system.
Example:
Voltage drop across a resistor.
It is given by,
v(t) = i(t)*R

A system has three basic elements input, processing and output. The other
elements include control, feedback, boundaries, environment and interfaces.
Input: Input is what data the system receives to produce a certain output.
Output: What goes out from the system after being processed is known as Output.
Processing: The process involved to transform input into output is known as
Processing.
Control: In order to get the desired results, it is essential to monitor and control
the input, Processing and the output of the system. This job is done by the control.

64
Feedback: The Output is checked with the desired standards of the output set and
the necessary steps are taken for achieving the output as per the standards, this
process is called as Feedback. It helps to achieve a much better control in the
system.

Boundaries: The boundaries are nothing but the limit of the system. Setting up
boundaries helps for better concentration of the actives carried in the system.
Environment: The things outside the boundary of the system are known as
environment. Change in the environment affects the working of the system.
Interfaces: The interconnections and the interactions between the sub-systems is
known as the Interfaces. They may be inputs and outputs of the systems.

Types of System in System Theory

1.Closed System: a closed system is defined as a system which is self-contained.
A system is said to be closed if it does not interact with the environment in which it
exists. It is in a state of isolation. It is completely self-contained. This is only of
theoretical interest as in reality systems exhibit different degrees of openness.
2.Open systems: exchange information, material, or energy with the environment
including random and undefined inputs. A system is said to be open when it
interacts with the environment in which it exists. It exchanges inputs and outputs
with the environment. Such regular interaction with the environment makes the
study of open systems difficult (Checkland 1981). A system might be said to be
'open' with regard to some entities and processes but might exhibit 'closed'
behavior with respect to other entities and processes.
3.Artificial systems:
They are systems that are created rather than occurring in nature.
4.Human-Machine systems:
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Information systems are generally human-machine systems (or user-machine
systems) in that both perform some of the activities in the accomplishment of a
goal. The machine elements (computer hardware and software) are relatively
closed and deterministic, whereas the human elements of the system are open and
probabilistic.

Feedback
Proper feedback is very important in closed loop system.
Feedback is a value of output parameter given to the controller for comparison
process so that it can compare the output with the set value or set parameter.
For example:
Let’s take a process of temperature control of a simple tank having water in it. It is
having heater for maintaining the temperature of water. Temperature measurement
device is there for water temperature measurement. Now the desired temperature
of water is 60 degree Celsius. So, setting this value in controller as set value. As
the water is being heated temperature rises. Measuring device ie RTD measures

66
temp. And gives signal to controller as feedback. The controller compares this
feedback with set value and control the heater settings. So, the temperature is
controlled.

Types of Model
A Model is a representation and abstraction of anything such as a real system, a
proposed system, a futuristic system design, an entity, a phenomenon, or an idea.
1. Mathematical Model: is the one in which symbols and logic constitute the
model. The symbolism used can be a language or a mathematical notation.
Example includes mathematical formulas.
2. Physical Model: Physical model is a smaller or larger physical copy of an
object. The object being modeled may be small (for example, an atom) or
large (for example, the Solar System). A model of an airplane (scaled down),
a model of the atom (scaled up), a map, a globe, a model car are examples of
physical (iconic) models.
3. The Narrative model is created by verbal or written description. And as these
can be created anywhere without much resources hence, they are most
popular.
4. The Graphic model is diagram usually two dimensional which make
extensive use of graphical entities like graphs and charts.

Chapter Five
Concept of Transaction Processing
Data and Information

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There is a subtle difference between data and information. Data are the facts or
details from which information is derived. Individual pieces of data are rarely
useful alone. For data to become information, data needs to be put into context.

Comparison chart

Data versus Information comparison chart

Data Information

Meaning Data is raw, unorganized facts When data is processed, organized,

that need to be processed. structured or presented in a given
Data can be something simple context so as to make it useful, it is
and seemingly random and called information.
useless until it is organized.

Example Each student's test score is one The average score of a class or of the
piece of data. entire school is information that can be
derived from the given data.

Etymology "Data" comes from a singular "Information" is an older word that

Latin word, datum, which dates back to the 1300s and has Old
originally meant "something French and Middle English origins. It
given." Its early usage dates has always referred to "the act of
back to the 1600s. Over time informing, " usually in regard to
"data" has become the plural education, instruction, or other
of datum. knowledge communication.

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 Data vs. Information - Differences in Meaning

Data are simply facts or figures — bits of information, but not information

itself. When data are processed, interpreted, organized, structured or presented
so as to make them meaningful or useful, they are called information.
Information provides context for data.

For example, a list of dates — data — is meaningless without the information

that makes the dates relevant (dates of holiday).

"Data" and "information" are intricately tied together, whether one is

recognizing them as two separate words or using them interchangeably, as is
common today. Whether they are used interchangeably depends somewhat on
the usage of "data" — its context and grammar.

Examples of Data and Information

 The history of temperature readings all over the world for the past 100 years is
data. If this data is organized and analyzed to find that global temperature is
rising, then that is information.

 The number of visitors to a website by country is an example of data. Finding

out that traffic from the U.S. is increasing while that from Australia is
decreasing is meaningful information.

 Often data is required to back up a claim or conclusion (information) derived

or deduced from it. For example, before a drug is approved by the FDA, the
manufacturer must conduct clinical trials and present a lot of data to
demonstrate that the drug is safe.

Data Capture

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Data capture is the process of collecting data which will be processed and used
later to fulfil certain purposes. Ways of capturing data can range from high end
technologies (e.g. Synchrotron, sensor networks and computer simulation models)
to low end paper instruments used in the field. Data with good metadata attached at
the point of capture can expediate data sharing, publishing and citation.

Data capture essentials

Collecting data is a costly activity. Planning ahead will ensure captured data that
are valid and support reuse.

1. Decide what to Is there existing data which could be reused or

collect incorporated into new data?

2. Data capture tools  Data capture tools should:

 provide ways to organise and structure data files

 have data validation components which ensure
captured data meet required types and ranges etc
 enable open and flexible formats where good
conversion tools exist. Proprietary formats are OK if
they are well documented and an API or conversion
tool exists
 allow data to be moved to its destination efficiently
and with high quality.

3. Collection process Processes should be documented, transparent and

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 reproducible.

4. Compliance with The process of capturing data is compliant with privacy

privacy regulations and ethics regulations.

Data Processing Stages

 Data refers to the raw facts that do not have much meaning to the user and
may include numbers, letters, symbols, sound or images.
 Information refers to the meaningful output obtained after processing the
data.
 Data processing therefore refers to the process of transforming raw data
into meaningful output i.e. information. Data processing can be done
manually using pen and paper. Mechanically using simple devices like
typewriters or electronically using modern data processing tools such as
computers.

Data processing cycle

o It refers to the sequence of activities involved in data transformation from

its row form to information. it is often referred to as cycle because the
output obtained can be stored after processing and may be used in future as
input.
o The four main stages of data processing cycle are:
 Data collection
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  Data input
 Data processing
 Data output

Data collection

 Also referred to as data gathering or fact finding, it involves looking for

crucial facts needed for processing.

Methods of data collection

 Include interviews; use of questionnaires, observation, etc.in most cases the

data is collected after sampling.
 Sampling is the process of selecting representative elements (e.g. people,
organizations) from an entire group (population) of interest. Some of the
tools that help in the data collection include source documents such as
forms, data capture devices such as digital camera etc.

Data processing methods

1. Manual data processing

In manual data processing, most tasks are done manually with a pen and a
paper. For example, in a busy office, incoming tasks (input) are stacked in
the “tray” (output). The processing of each task involves a person using the

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 brain in order to respond to queries. The processed information from the out
tray is then distributed to the people who need it or stored in a file cabinet.

2. Mechanical data processing

Manual is cumbersome and boring especially repetitive tasks. Mechanical

devices were developed to help in automation of manual tasks. Examples of
mechanical devices include the typewriter, printing press, and weaving
looms. Initially, these devices did not have electronic intelligence.

3. Electronic data processing

For a long time, scientists have researched on how to develop machine or

devices that would stimulate some form of human intelligence during data
and information processing. This was made possible to some extent with the
development of electronic programmable devices such as computers.

The advent of microprocessor technology has greatly enhanced data

processing efficiency and capability. Some of the microprocessor-controlled
devices include computers, cellular(mobile) phones, calculators, fuel pumps,
modern television sets, washing machines etc.

Verification and Validation

Verification
Definition: The process of evaluating software to determine whether the products
of a given development phase satisfy the conditions imposed at the start of that
phase.

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Verification is a static practice of verifying documents, design, code and program.
It includes all the activities associated with producing high quality software:
inspection, design analysis and specification analysis. It is a relatively
objective process.

Verification will help to determine whether the software is of high quality, but it
will not ensure that the system is useful. Verification is concerned with whether the
system is well-engineered and error-free.

Validation

The process of evaluating software during or at the end of the development process
to determine whether it satisfies specified requirements.
Validation is the process of evaluating the final product to check whether the
software meets the customer expectations and requirements. It is a dynamic
mechanism of validating and testing the actual product.

Difference between Verification and Validation

The distinction between the two terms is largely to do with the role of
specifications.

Validation is the process of checking whether the specification captures the

customer’s needs. “Did I build what I said I would?”
Verification is the process of checking that the software meets the specification.
“Did I build what I need?”
 

             Verification              Validation

1. Verification is a static practice of 1. Validation is a dynamic

verifying documents, design, code mechanism of validating and testing
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and program. the actual product.

2. It does not involve executing the 2. It always involves executing the
code. code.

3. It is human based checking of 3. It is computer based execution of

documents and files. program.

4. Validation uses methods like

4. Verification uses methods like
black box (functional)  testing, gray
inspections, reviews, walkthroughs,
box testing, and white box
and Desk-checking etc.
(structural) testing etc.

5. Verification is to check whether 5. Validation is to check whether

the software conforms to software meets the customer
specifications. expectations and requirements.

6. It can catch errors that

6. It can catch errors that validation
verification cannot catch. It is High
cannot catch. It is low level exercise.
Level Exercise.

7. Target is requirements
specification, application and 7. Target is actual product-a unit, a
software architecture, high level, module, a bent of integrated modules,
complete design, and database and effective final product.
design etc.

8. Verification is done by QA team 8. Validation is carried out with the

to ensure that the software is as per

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the specifications in the SRS
involvement of testing team.
document.

9. It generally comes first-done 9. It generally follows

before validation. after verification.

The following are the characteristics of good information.

 Accurate – information must be free from errors and mistakes. This is

achieved by following strict set standards for processing data into
information. For example, adding $6 + 10 would give us inaccurate
information. Accurate information for our example is multiplying $6 by 10.
 Complete – all the information needed to make a good decision must be
available. Nothing should be missing. If TAX is an application to the
computation of the total amount that the customer should pay then, it should
be included as well. Leaving it out can mislead the customer to think they
should pay $60 only when in actual fact, they must pay tax as well.
 Cost Effective – the cost of obtaining information must not exceed the
benefit of the information in monetary terms.
 User-focused – the information must be presented in such a way that it
should address the information requirements of the target user. For example,
operational managers required very detailed information, and this should be
considered when presenting information to operational managers. The same
information would not be appropriate for senior managers because they

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 would have to process it again. To them, it would be data and not
information.
 Relevant – the information must be relevant to the recipient. The
information must be directly related to the problem that the intended
recipient is facing. If the ICT department wants to buy a new server,
information that talks about a 35% discount on laptops would not be relevant
in such a scenario.
 Authoritative – the information must come from a reliable source. Let's say
you have a bank account and you would like to transfer money to another
bank account that uses a different currency from yours. Using the exchange
rate from a bureau de change would not be considered authoritative
compared to getting the exchange rate directly from your bank.
 Timely – information should be available when it is needed. Let's say your
company wants to merge with another company. Information that evaluates
the other company that you want to merge with must be provided before the
merger, and you must have sufficient time to verify the information.

Chapter Six
Concept of Database Management System

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The most important component of any computer-based information system is the
databases. A database can be defined as a collection of inter-related relevant data
stored together to serve multiple applications.
A DBMS is a collection of interrelated data and a set of programs to access those
data. The collection of data, usually called as database, contains about one
particular organization or enterprise.
Or
A database management system (DBMS) can be defined as a collection of software
packages for processing the database.
(or)
A data base management system (DBMS) can be defined as a collection of
programs that are used to define, manipulate, control and process database.
A DBMS is essentially a tool to build a database structure, store and operate on the
data contained in it. The main objective of designing any database management
system is to provide its users an appreciably higher level frame work ( as compared
to files access facilitates provided in high-level programming languages) such that
the relevant interrelated data can be collected and stored together to serve
multiple application. A DBMS creates and maintains a database, loads and
manipulates data within a database.
Purpose of Data Base Systems
One way to keep the information on a computer is to store it in permanent system
files. To allow users to manipulate the stored information, the system has a number
of application programs that manipulate the organized files. These application
programs are written by system programmers in response to the needs of the
organizations. New application programs are added to the system as the need
arises. Thus, as the time goes more files and more application programs are added

78
to the system. A typical file processing system described above is the system used
to store information before the advent of DBMS.
Keeping the information of an organization in a file processing system has a
number of disadvantages, namely
• Data Redundancy and Inconsistency: Since the files and application
programs are created by different programmers over a long period, the various files
are likely to have different formats and the programs may be written in several
programming languages. Moreover, the same information may be duplicated in
several places. This redundancy leads to higher storage and access cost. In
addition, it may lead to data inconsistency.
• Difficulty in Accessing Data: The file processing system does not allow
needed data to be retrieved in a convenient and efficient manner.
• Data Isolation: In a file processing system, as the data are scattered in
various files, and files may be in different formats. It is very difficult to write new
application programs to retrieve the appropriate data.
• Integrity problems: The data values stored in the database must satisfy
certain types of consistency Constraints (Conditions). For example, the minimum
balance in a bank account may never fall below an amount of Rs. 500. Developers
enforce these constraints in the system by adding appropriate code in the
application programs. However, when new constraints are added, it is difficult to
change the application programs to enforce them.
• Security problems: Not every user of the database system should be able to
access all the data. In the file processing systems, as the application programs are
added to the system in an adhoc manner, it is difficult to enforce security.
The above disadvantages can be overcome by use of DBMS and it provides the
following advantages.
1. Provides for mass storage of relevant data.
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 2. Make easy access of the data to user.
3. Allows for the modification of data in a consistent manner.
4. Allows multiple users to be active at a time
5. Eliminate or reduce the redundant data.
6. Provide prompt response to the users request for data.
7. Supports Backup and recovery of data.
8. Protect data from physical hardware failure and unauthorized access.
9. Constraints can be set to database to maintain data integrity.

Database Languages
A database system provides two different types of Languages, one will specify
the schema, and other will express database queries and updates.
They are:
1. Data-Definition Languages (DDL)
2. Data-Manipulation Language (DML)
1. Data-Definition Languages (DDL): A database scheme is specified by set of
definitions which are expressed by special language called Data Definition
Language (DDL). The result of compilation of DDL statements is a set of tables
that is stored in a special file called ‘Data dictionary’ or “data directory.
A data dictionary is a file that contains metadata, i.e. Data about data. This file is
consulted before actual data are read or modified in the database system
The storage structure and access methods used by the database system are
specified by a set of definitions in a special type of DDL called a ‘data storage and
data definition language’. The result of consultation of these definitions is a set
instruction to specify the implementation details of the database schemas. Which
are usually hidden form the users.
The DDL commands are

80
2. Data-Manipulation Language (DML): A DML is language which enables
users to access or manipulate data as organized by appropriate data model. The
goal is to provide efficient human interaction with the system.
The DML allows following
(a) The retrieval information from the database

(b) The Insertion of new information in to existing database

(c) The deletion of existing information from database

(d) The modification of information stored in the database.

A DML is language which enables users to access or manipulate data. There are
basically two types.
• Procedural DML: This requires a user to specify what data are needed and
how to get those data from existing database.
• Non-procedural DML: Which require a user to specify what data are
needed ‘without’ specifying how to get those data.
Nonprocedural DMLs are usually easier to learn and use than procedural DMLs.
A user does not have to specify how to the data, these languages may generate
code that is not as that produced by Procedural DML. Hence, we can make
remedy this difficulty by various optimization techniques.
A Query is a statement, a request for retrieval information. The portion of a
DML, that involves information retrieval is called a ‘Query Language’.

Responsibilities of Database Manager

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 A Database Manager is a program module which provides the interface between
the low level data stored in the database and the application program and queries
submitted to the system.
Responsibilities of Database Manager
1. Interaction with File Manager : The row data is stored on the disk using
the file system which is usually provided by conventional operating system.
2. Integrity Enforcement : The data values stored in the database must satisfy
certain types of consistency constraints.
3. Security Enforcement : Not every user of the database needs to have access
to the entire content of the database.
4. Backup and Recovery : It is the responsibility of database manager to
detect such failures and restore the database to a state that existed prior the
occurrence of the failure this is usually accomplished through the backup and
recovery processor.
5. Concurrency Control : It is necessary for the system to control the
interaction among the concurrent users, and achieving such control is one of the
responsibilities of database manager.
6. Authorization Control : This module checks that the user has necessary
authorization to carry out the required function.
7. Command Processor : Once the system has checked that the user has
authority to carry out the operation control satisfies all necessary integrity
constraints such as key constraints.
8. Integrity Checker : For an operation that changes the database the integrity
checker checks that the requested operation satisfies all necessary integrity
constraints such as key constraints.
9. Query Optimizer : This module determines on optional strategy for the
query execution.
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10. Scheduler : This module is responsible for ensuring that concurrent
operations or transactions on the database proceed without conflicting with one
another.
11. Recovery Manager : This module ensures that the database remains in a
consistent state in the presence of failures. It is responsible for transaction commit
and abort that is success or failure of transaction.
12. Buffer Manager : It is responsible for the transfer of data between main
memory and secondary storage such as disk and tape. The recovery manager and
buffer manager are sometimes collectively referred to as data manager. The buffer
manager is sometimes known as cache manager.
13. Query Processor : This is responsible for receiving query language
statements and changing them form the English like syntax of the query language
to from the DBMS can understand. The query language processor usually consists
of two parts i.e. 1. The purser 2. Query Optimizer.
Database Administrator
A person who has central control of both the data and programs over the system is
called data base administrator. Or
Database administrator (DBA) is the person or group, who is responsible for the
supervision and control of the databases, within on organization.
The functions or responsibilities of DBA includes
1. Schema Definition: The DBA creates the original database schema by
writing a set of definitions which are translated by DDL compiler to a set of tables
that is stored permanently in the data dictionary.
2. Storage structure and access Method Definition: A DBA creates
appropriate storage structures and access methods by writing a set of definitions ,
which are translated by the data-storage and DDL compiler.

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3. Schema Physical Organization and Modification : The DBA allows the
users to accomplish modifications in the database scheme or storage organization
through a set of definitions and make these modifications to be appropriate in the
internal system tables.
4. Granting of Authorization for data access : By granting different types of
authorization, the database administrator can regulate which of the database
various users can access.
5. Routine Maintenance : DBA is the final authority to regulate the daily
activities.
As a whole , the DBA jobs are
• Creating primary database storage structures
• Modifying the structure of the database
• Monitoring database performance and efficiently
• Transferring data between the database and external file
• Monitoring and reestablishing database consistency
• Controlling and monitoring user access to the database
• Manipulating the physical location of the database.

Database Users
The primary goal of any database is to provide its users an environment for
retrieving and storing new information into the database. An important aspect of
the DBA‘s working is that, it has liaison with users at all levels of the
organization. The DBA must be able to communicate effectively with the users
and must be conversant with the technical aspects of the system as well as the
working procedures of the organization.
Depending on the way that the users expect to interact with the database system,
the users are classified in to

84
1. Application Programmers: Application Programmers are computer
professionals interacting with the system through DML calls, embedded in a
program written in a language like high level languages like COBOL, C, etc.
2. Sophisticated users : These users interact with system without writing
programs. They form their request by writing queries in a database query language.
Those are submitted to a query processor that breaks a DML statement down in to
instructions for the database manager’s module.
3. Unsophisticated users : Who interact with the system by using permanent
applications. Ex ATM
4. Specialized users : These users write specialized database applications that
do not fir in to the traditional data processing frame work. These applications
include Computer –aided design (CAD) systems, Knowledge base expert systems
etc.

Chapter Seven
Office Automation

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The word automation refers to a method of using a wide range of computer- and
machine-aided tasks to help improve productivity and create easier ways to do
business. Different types of automation are commonly used in different types of
industries.

Office automation refers to the varied computer machinery and software used to

digitally create, collect, store, manipulate, and relay office information needed for
accomplishing basic tasks. Raw data storage, electronic transfer, and the
management of electronic business information comprise the basic activities of an
office automation system.[1] Office automation helps in optimizing or automating
existing office procedures.

The backbone of office automation is a LAN, which allows users to transfer data,
mail and even voice across the network. All office functions, including
dictation, typing, filing, copying, fax, Telex, microfilm and records
management, telephone and telephone switchboard operations, fall into this
category. Office automation was a popular term in the 1970s and 1980s as the
desktop computer exploded onto the scene.

Advantages are:

1. Office automation can get many tasks accomplished faster.

2. It eliminates the need for a large staff.
3. Less storage is required to store data.
4. Multiple people can update data simultaneously in the event of changes in
schedule

Businesses can easily purchase and stock their wares with the aid of technology.
Many of the manual tasks that used to be done by hand can now be done through
86
hand held devices and UPC and SKU coding. In the retail setting, automation also
increases choice. Customers can easily process their payments through automated
credit card machines and no longer have to wait in line for an employee to process
and manually type in the credit card numbers.

Office payrolls have been automated which means no one has to manually cut
checks, and those checks that are cut can be printed through computer programs.
Direct deposit can be automatically set up and this further reduces the manual
process and most employees who participate in direct deposit often find
their paychecks come earlier than if they'd have to wait for their checks to be
written and then cleared by the bank.

Other ways automation has reduced employee manpower on tasks is automated

voice direction. Through the use of prompts, automated phone menus and directed
calls, the need for employees to be dedicated to answer the phones has been
reduced, and in some cases, eliminated.

Components of Office Automation

1. Voicemail:A voicemail system (also known as voice message or voice bank)
is a computer-based system that allows users and subscribers to exchange
personal voice messages; to select and deliver voice information; and to
process transactions relating to individuals, organizations, products and
services, using an ordinary telephone. The term is also used more broadly to
denote any system of conveying a stored telecommunications voice messages,
including using an answering machine. Most cell phone services offer voice-
mail as a basic feature; many corporate PBXs include versatile internal voice-
messaging services, and *98 vertical service code subscription is available to
most individual and small business land line subscribers.

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 2. A teleconference or teleseminar is the live exchange and mass articulation
of information among several persons and machines remote from one another
but linked by a telecommunications system. Terms such as audio
conferencing, telephone conferencing and phone conferencing are also
sometimes used to refer to teleconferencing. The telecommunications system
may support the teleconference by providing one or more of the following:
audio, video, and/or data services by one or more means, such
as telephone, computer, telegraph, teletypewriter, radio, and television.

3. Electronic mail (email or e-mail) is a method of exchanging messages ("mail")

between people using electronic devices. Invented by Ray Tomlinson, email first
entered limited use in the 1960s and by the mid-1970s had taken the form now
recognized as email. Email operates across computer networks, which today is
primarily the Internet. Some early email systems required the author and the
recipient to both be online at the same time, in common with instant messaging.
Today's email systems are based on a store-and-forward model.
Email serversaccept, forward, deliver, and store messages. Neither the users nor
their computers are required to be online simultaneously; they need to connect
only briefly, typically to a mail server or a webmail interface for as long as it
takes to send or receive messages.

88
4. Fax machine: Fax (short for facsimile), sometimes
called telecopying or telefax (the latter short for telefacsimile), is the
telephonic transmission of scanned printed material (both text and images),
normally to a telephone number connected to a printer or other output device.
The original document is scanned with a fax machine (or a telecopier), which
processes the contents (text or images) as a single fixed graphic image,
converting it into a bitmap, and then transmitting it through the telephone
system in the form of audio-frequency tones. The receiving fax machine
interprets the tones and reconstructs the image, printing a paper copy. Early
systems used direct conversions of image darkness to audio tone in a
continuous or analog manner. Since the 1980s, most machines modulate the
transmitted audio frequencies using a digital representation of the page which
is compressed to quickly transmit areas which are all-white or all-black.
Telecommuting
Telecommuting (also known as working from home, or e-commuting) is a work
arrangement in which the employee works outside the office, often working from
home or a location close to home (including coffee shops, libraries, and various
other venues).

Rather than traveling to the office, the employee “travels” via telecommunication
links, keeping in touch with coworkers and employers via telephone and email.

The worker may occasionally enter the office to attend meetings and touch base
with the employer. However, with many options for distance conferencing, there
may be no need to visit the office.

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Benefits of Telecommuting

There are many benefits to telecommuting. Telecommuting allows a worker

greater freedom regarding his or her work hours and work location. It gives the
employee more flexibility to balance work and personal obligations.

Often, working from home can make you more productive, because you do not
have the distractions of an office space.

There are also many benefits to employers. Allowing workers to telecommute

often makes them more productive, which benefits the company. Telecommuters
are also likely to be happier in their jobs and are therefore more likely to stay with
the company. Telecommuting even saves companies money in office expenses.

Drawbacks of Telecommuting

However, there can be downsides to working from home. You have to be

extremely self-motivated, or else you may get distracted easily. You also need to
find a productive place to do work, such as a home office or coffee shop.

Some people also find working from home to be a bit isolating, because you are
not around your coworkers.

When considering a telecommuting job, it is important to weigh these positives and

negatives.

Importance of office Automation

Help improve communication within an enterprise and between enterprises

90
According to http://www.progressiveautomations.com/, office automation is
extremely important because it help facilitate flow of information within an
organization. For instance, through teleconferencing, different individuals from
different departments or branches can communicate easily without travelling long
distances for meetings, as seen in the diagram below.

Automation systems such videoconferencing help improve communication within

or between organizations by reducing the cost and time of meeting because
participants can converge at any time when issues arise without worrying about
distance or cost. In turn, this helps improve the performance of organization
because individuals have enough time to focus on other core activities within the
organization

Facilitate preparation and sending of messages

Office automation plays an important role in reducing the cycle time between
messages preparation and receipt, as individuals can compose message rapidly and
send to them to the recipients instantly. For instance, office automation platforms
such as E-mail permits sending of messages to large numbers of recipients located
in different regions across the globe as seen below.

Office automation systems such as Emails, therefore, are important because they
help improve flow of information within an organization.

Help increase volume of work and reduce cost of operation

Lastly, another importance of office automation systems is that they help reduce

individual’s involvement in everyday clerical tasks such as creating reports and

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organizing customer data. Automation platforms spreadsheets help store bulky
customer data; thus help reduce of paper works, as information is compiled once
and stored for future referencing. This help not only help improve volume of work,
but also help make office orderly as shown in the diagram below. Besides,
automation processes enable only a few workers to perform the duties or task of
many. For instance, a single employee can use one machine choose, pack, and
label products for transportation or shipping. This, therefore, help reduce cost of
operation because the organization will not spend more money in hiring more labor
to perform different tasks.

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 Chapter Eight

Principles of Decision Making

Decision making is thought process of selecting a logical choice from the available
options. Decision-making is an integral part of modern management. Essentially,
Rational or sound decision making is taken as primary function of management.
Every manager takes hundreds and hundreds of decisions subconsciously or
consciously making it as the key component in the role of a manager. Decisions
play important roles as they determine both organizational and managerial
activities. A decision can be defined as a course of action purposely chosen from a
set of alternatives to achieve organizational or managerial objectives or goals.
Decision making process is continuous and indispensable component of managing
any organization or business activities. Decisions are made to sustain the activities
of all business activities and organizational functioning.

Decisions are made at every level of management to ensure organizational or

business goals are achieved. Further, the decisions make up one of core functional
values that every organization adopts and implements to ensure optimum growth
and drivability in terms of services and or products offered.

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Stages of Decision Making

Decision making is the process of making choices by identifying a decision,

gathering information, and assessing alternative resolutions.

Using a step-by-step decision-making process can help you make more deliberate,
thoughtful decisions by organizing relevant information and defining alternatives.
This approach increases the chances that you will choose the most satisfying
alternative possible.

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Step 1: Identify the decision

You realize that you need to make a decision. Try to clearly define the nature of
the decision you must make. This first step is very important.

Step 2: Gather relevant information

Collect some pertinent information before you make your decision: what
information is needed, the best sources of information, and how to get it. This step
involves both internal and external “work.” Some information is internal: you’ll
seek it through a process of self-assessment. Other information is external: you’ll
find it online, in books, from other people, and from other sources.

Step 3: Identify the alternatives

As you collect information, you will probably identify several possible paths of
action, or alternatives. You can also use your imagination and additional
information to construct new alternatives. In this step, you will list all possible and
desirable alternatives.

Step 4: Weigh the evidence

Draw on your information and emotions to imagine what it would be like if you
carried out each of the alternatives to the end. Evaluate whether the need identified
in Step 1 would be met or resolved through the use of each alternative. As you go
through this difficult internal process, you’ll begin to favor certain alternatives:

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those that seem to have a higher potential for reaching your goal. Finally, place the
alternatives in a priority order, based upon your own value system.

Step 5: Choose among alternatives

Once you have weighed all the evidence, you are ready to select the alternative that
seems to be best one for you. You may even choose a combination of alternatives.
Your choice in Step 5 may very likely be the same or similar to the alternative you
placed at the top of your list at the end of Step 4.

Step 6: Take action

You’re now ready to take some positive action by beginning to implement the
alternative you chose in Step 5.

Step 7: Review your decision & its consequences

In this final step, consider the results of your decision and evaluate whether or not
it has resolved the need you identified in Step 1. If the decision has not met the
identified need, you may want to repeat certain steps of the process to make a new
decision. For example, you might want to gather more detailed or somewhat
different information or explore additional alternatives.

Decision-Making Skills

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 Intuition - This encompasses an aptness to comprehend something instantly,
without the need for analyzing, thinking, or conscious reasoning. When
Amber was robbed at gunpoint, her intuition told her to throw her wallet and
run in the opposite direction.
 Foresight - This is the ability to predict consequences of a particular action
or decision. Amber made the decision to study for her test instead of going
out with friends, because she could foresee that if she got a bad grade on her
math test, that it could impact her college admissions.
 Critical thinking - This entails the capacity to think and reason clearly and
logically, and comprehend how concepts and ideas relate. It involves the
ability to gather, analyze and evaluate information. Amber used critical
thinking skills when making her college decision. She visited her top choices
and gathered all of the financial and other info she would need to make her
decision. Then she analyzed the information using a chart of pros and cons
for each college.
 Emotional intelligence - This is an ability to read others' emotions, which
can aid in decision making involving people and to use emotional
information for making decisions. Arnold was able to notice cues that his
mom was getting irritated that he was taking so long to choose between a hot
dog and a hamburger, so he went ahead and chose a hot dog.
 Self-control - This involves an emotional regulation that is useful to control
extreme emotions so that a person can use rationality in making decisions.
Arnold's mom used self-control and anger management techniques, like
taking deep breaths and taking a time out for herself, so that she wouldn't
yell at Arnold to get back in the car without dinner.

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MINICASES

1. AMERICAN EXPRESS WITHDRAWS $1 BILLION IDS OFFER

The following excerpts are from a news article in the Minneapolis Star and
Tribune, August 17, 1983, p. 58.

American Express Co. called off its acquisition of Investors Diversified Services,
Inc. (IDS), Tuesday, saying that $1 billion was too high a price." (IDS have
investment funds such as mutual funds and money market funds. It would therefore
allow American Express to expand its range of services to customers.)

“Although American Express officials would not comment further, several

observers said that problems discovered at IDS probably lay behind the decision…
[The] article [in the Wall Street Journal] said that American Express feared that
IDS's data-processing system was inadequate to handle the new products planned
for the IDS sales staff. American Express officials also were concerned about the
30 percent annual turnover among sales personnel …. Walter Scott, IDS president,
responded that IDS data-processing was quite competent and has absorbed at least
one new product a month for two years. (Note: The acquisition was completed
after a revised offer.)

Questions

a. Why should American Express be so concerned about the capabilities of

IDS's data processing?

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b. What competitive advantages to a financial services company may be
provided by an information system?

2. THE COMPUTER IN THE RESTAURANT

The installation of a minicomputer-based information system has enabled Dailey's

Restaurant in Atlanta to streamline their operations arid promote tighter internal
controls over their business. A waiter takes an order at a table, and then enters it
online via one of the six terminals located in the restaurant dining room. The order
is routed to a printer in the appropriate preparation area: the colditem printer if it is
a salad, the hot-item printer if it is a hot sandwich or the bar printer if it is a drink.
A customer's meal check listing the items ordered and the respective prices is
automatically generated. This ordering system eliminates the old three-carbon-
copy guest check system as well as any problems caused by a waiter's handwriting.
When the kitchen runs out of a food item, the cooks send an "out of stock"
message, which will be displayed on the dining room terminals when waiters try to
order that item. This gives the waiters faster feedback, enabling them to give better
service to the customers.

Other system features aid management in the planning and control of their
restaurant business. The system provides up-to-the-minute information' on the food
items ordered and breaks out percentages showing sales of each item versus total
sales. This helps management plan menus according to customers' tastes. The
system also compares the weekly sales totals versus food costs, allowing planning
for tighter cost controls. In addition, whenever an order is voided, the reason for
the void is keyed in. This may help later in management decisions, especially if the
voids are consistently related to food or service.

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Acceptance of the system by the users is exceptionally high since the waiters and
waitresses were involved in the selection and design process. All potential users
were asked to give their impressions and ideas about the various systems available
before one was chosen.

Based on Ann Dukes, "Side Order of (Computer) Chips Speeds Meals," MIS
Week, June 17, 1981, p.

14.

Questions

a. In managing the business of a restaurant, what are some decisions that

must be made in the areas of: -strategic planning

-managerial control -operational control

b. What information would you require from this system in order to aid
in making such decisions? (In other words, what would make this system
a more complete management information system rather than just doing
transaction processing?)

c. Compared to this system, most restaurant information systems are

relatively informal. Explain the probable effects that making the system
more formal would have on:

- customers

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 - waiters

- management

Chapter Nine

Project Management

A project is an activity that:

 is temporary having a start and end date

 is unique
 brings about change
 has unknown elements, which therefore create risk.

Generally, projects are formed to solve a problem or take advantage of an opportunity.

Business as usual activities can often be mistaken for projects. Generally, it is the
uniqueness of the activity that is the deciding factor. Is it something we every year? If
so, then it is not truly a project – although you can use project methods to get it done.

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Identify projects in the list of activities below:

1. Building a deck

2. Implementing a new system

3. Mowing the lawn

4. Planning a wedding

5. Planning a fundraiser

6. Planning a student graduation

COMMON PROJECT TERMS

Deliverables: Tangible ‘things’ that the project produces

Milestones: Dates by which major activities are performed.

Tasks: Also called Actions. Activities undertaken during the project

Risks: Potential problems that may arise

Issues: Risks that have happened

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Gantt Chart: A specific type of chart showing time and tasks. Usually created by a
Project Management program like MS Project.

Stakeholder: Any person or group of people who may be affected by your project

EXAMPLE: Building a deck

• Deliverables: A plan, a consent form, the deck

Milestones:

Plan drafted 11 Jun

Plan approved 15 Jun

Plan submitted 16 Jun

Plan approved 19 Jun

Materials purchased 16 Jul

Resources booked 16 Jul

Equipment identified 16 Jul

Deck constructed 20 Jul

Deck tested 24 Jul

Deck quality approved 24 Jul

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 “Deck warming” completed 28 Jul

Tasks:

Tasks Subtasks

Plan drafted Requirement gathered

Best practice researched

Draft 1 prepared

Distributed to stakeholders

Plan approved Feedback gathered

Amendments made

Final plan prepared

Distributed to stakeholders

Sign-off obtained

Workbreak down structure

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WBS

 Hierarchy of tasks required to complete project

 Each task is broken into smaller tasks that can be managed and estimated

 Defines task dependencies

o Some tasks must begin at the same time, some must end at the same
time and some cannot start until the other tasks have finished.

 Estimate task durations and cost

 May be inputted into project management software

 Final WBS plan is called baseline WBS

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Gantt chart

A gantt chart is a horizontal bar chart that visually represents a project

plan over time. Modern gantt charts typically show you the status of—as well
as who’s responsible for—each task in the project.

Gantt charts contain the following features:

 Start and end dates for tasks

 Project milestones

 Dependencies between tasks

 Person assigned to each task

A successful Project Manager must simultaneously manage the four basic elements of
a project: resources, time, money, and most importantly, scope.

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All these elements are interrelated. Each must be managed effectively. All must be
managed together if the project is to be a success. The resource that can be leveraged
to the greatest extent in all projects is the people involved.

THE PROJECT MANAGER

Project manager is a person with a diverse set of skills – management, leadership,

technical, conflict management, and customer relationship – who is responsible for:

 initiating,

 planning,

 executing,

 controlling,

 monitoring,

 and closing down a project.

Project Managers are essentially jugglers. They must make sure that everything keeps
to task, that potential issues are quickly eliminated and the project is delivered on time,
all the while making sure everyone knows what is happening and the project quality and
budget are acceptable. Specifically, they:

1. direct all activities required to successfully meet the project objectives

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 2. manage risk – scanning ahead for potential issues and resolving them before
they become a problem

3. solve problems - recommending alternative approaches to problems that arise

and providing guidance to the Project Sponsor

4. track and report project progress

5. communicate to all stakeholders in the project

6. Ultimately responsible for the Project’s Success

CHARACTERISTICS OF PROJECTS

1. A project contains a well-defined objective. The project objective is defined in

terms of scope ( or requirements), schedule, and cost.

2. A project is carried out via a set of interdependent tasks. A project uses various
resources to carry out these tasks.

3. A project has a definite start date and an expected completion date. The actual
completion date may not always be the same as the expected date.

4. A project is a one time or unique endeavor.

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 5. A project has a customer.

MEASURING PROJECT SUCCESS

We measure the success of a project using 4 major project constraints, specifically:

1. Scope.

2. cost.

3. Schedule (Time).

4. Customer satisfaction (quality and performance).

PROJECT CONSTRAINTS

• Project scope – Have all the project requirements (i.e., deliverables) been
completed?

• Project cost – Is the cost of the project close to the amount the customer has
agreed to pay?

• Schedule – Was the project completed on time?

• Customer satisfaction – Is the customer happy with the quality of the project?

Project Management

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Project management is a composite activity with multiple dimensions. Depending on the
type and class of project, this management activity can be very complex. In a nutshell,
project management is the discipline of planning, organizing, securing, managing,
leading, and controlling resources to achieve specific goals.

The very basics of project management are as follows: a project is a temporary

endeavor with a defined beginning and end (usually time-constrained, and often
constrained by funding or deliverables) that an organization takes to meet unique goals
and objectives, typically to bring about beneficial change or add value.

The primary challenge of project management is to achieve all of the project goals and
objectives while honoring the pre-defined constraints. The primary constraints are
scope, time, quality, and budget. The secondary—and more ambitious—challenge is to
optimize the allocation of necessary inputs and integrate them to meet pre-defined
objectives.

Principle 1: Vision and Mission

In order to be successfully executed, every project or initiative should begin with the end
in mind. This is effectively accomplished by articulating the Vision and Mission of the
project so it is crystal-clear to everyone. Creating a vision and mission for the project
helps clarify the expected outcome or desired state, and how it will be accomplished.

Principle 2: Business Objectives

The next step is to establish two to three goals or objectives for the project. Is it being
implemented to increase sales and profit, customer loyalty, employee productivity and
morale, or product/service quality? Also, it's important to specifically quantify the amount
of improvement that is expected, instead of being vague.

Principle 3: Standards of Engagement

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Simply put, this means establishing who will be part of the project team? What will be
the frequency of meetings? What are the meeting ground rules? Who is the project
owner? Who is designated to take notes, and distribute project meeting minutes and
action steps? This goes along with any other meeting protocol that needs to be clarified.

Principle 4: Intervention and Execution Strategy

This is the meat of the project and includes using a gap analysis process to determine
the most suited intervention (solution) to resolve the issue you are working on. There
are many quality management concepts that can be applied ranging from a
comprehensive "root cause analysis" to simply "asking why five times." Once the best
possible intervention has been identified to resolve the issue, then we must map out our
execution strategy for implementing the intervention. This includes identifying who will
do what, when, how, and why?

Principle 5: Organisational Alignment

To ensure the success and sustainability of the new initiative or process brought on by
this project, everyone it will directly impact must be onboard. To achieve organisational
alignment (or buy-in), ongoing communication must be employed in-person during team
meetings, electronically via email and e-learning (if applicable), and through training.
The message must include the WIIFM "what's in it for me" at every level; otherwise
most stakeholders will not be interested or engaged around the new initiative.

Principle 6: Measurement and Accountability

And last, how will we determine success? Well, a simple project scorecard that is
visually interesting is a great way to keep everyone updated and engaged. A scorecard
is an excellent resource for holding employees, teams, and leaders accountable for the
implementation, refinement, and sustainability of the new initiative or project.
Accountability means that consistently, top performers will be rewarded and recognised;

111
while those needing improvement will be coached with specific expectations and
consequences clearly outlined.

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Review Questions

1.A _________ is "a temporary endeavor undertaken to create a unique product,

service, or result."

2. __________ hides the physical characteristics of computing resources from their

users, such as making a single server, operating system, application, or storage device
appear to function as multiple virtual resources.

3. Every project should have a well-defined _______.

4. A project is _________.

5. A project is developed using __________ elaboration.

6. _________ include people, hardware, software, and other assets.

7. A project should have a primary customer or _________.

8. A project involves ________.

9. ___________ ____________ work with the project sponsors, the project team, and
the other people involved in a project to meet project goals.

10.Every project is constrained in different ways by its scope, time, and cost goals and
are known as the ________ ________.

11.________ is often a key factor in projects, as is customer or sponsor satisfaction.

12._________ __________ is "the application of knowledge, skills, tools and

techniques to project activities to meet project requirements."

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13.Good project managers do not assume that their definition of ________ is the same
as the sponsors'.

14.A _________ is "a group of related projects managed in a coordinated way to obtain
benefits and control not available from managing them individually."

15.A _______ ________ provides leadership and direction for the project managers
heading the projects within a program.

16.A _____ _____ is "an optimal way recognized by industry to achieve a stated goal
or objective."

17.Project managers often take on the role of both leader and ______.

18.A _______ _______ is a standard format for displaying project schedule information
by listening project activities and their corresponding start and finish dates in a calendar
format.

19._______ _______ is the longest path through a network diagram that determines
the earliest completion of a project.

20.A ______ ________ _________ (PMO) is an organizational group responsible for

coordinating the project management function throughout an organization.

21.Approximately what percentage of the world's gross domestic product is spent on

projects?

A. 10%

B.25%

C.50%

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D.75%

22.Which of the following is not a potential advantage of using good project

management?

A. Shorter development times

B.Higher worker morale

C.Lower cost of capital

D.Higher profit margins

23.A __________ is a temporary endeavor undertaken to create a unique product,

service, or result.

A.Program

B.Process

C.Project

D.Portfolio

24.Which of the following is not an attribute of a project?

A. Projects are unique

B. Projects are developed using progressive elaboration

C. Projects have a primary customer or sponsor

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D. Projects involve little uncertainty

25. Which of the following is not a part of the triple constraint of project management?

A. Meeting scope goals

B.Meeting time goals

C.Meeting communications goals

D.Meeting cost goals

26._________ is the application of knowledge, skills, tools and techniques to project

activities to meet project requirements.

A.Project management

B. Program management

C. Project portfolio management

D.Requirements management

27.Project portfolio management addresses _______ goals of an organization, while

project management addresses _______ goals.

A. Strategic, tactical

B.Tactical, strategic

C.Internal, external

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D. External, internal

28. Several application development projects done for the same functional group might
best be managed as part of a ________.

A. Portfolio

B. Program

C. Investment

D. Collaborative

29. Which of the following is not one of the top ten skills or compentencies of an
effective project manager?

A.People skills

B. Leadership

C. Integrity

D. Technical skills

30. What is the certification program called that the Project Management Institute
provides?

A.Certified Project Manager (CPM)

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B.Project Management Professional (PMP)

C. Project Management Expert (PME)

D. Project Management Mentor (PMM)

31. _______ _______ describes this holistic view of carrying out projects within the
context of the organization.

32. _________ _________ addresses the business, technological, and organizational

issues associated with creating, maintaining, and making changes to a system.

33. ___________ in organizations take the form of competition among groups or

individuals for power and leadership.

34. A _________ organizational structure is the hierarchy most people think of when
picturing an organizational chart.

35. A __________ organizational structure also has a hierarchical structure, but instead
of functional managers or vice presidents reporting to the CEO, program managers
report to the CEO.

36. A ______ organizational structure represents the middle ground between functional
and project structures.

37. _________ culture is a set of shared assumptions, values, and behaviors that
characterize the functioning of an organization.

Discuss 38.

Some projects have a senior manager called a _______ who acts as a key proponent
for a project.

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 39. IT _________ addresses the authority and control for key IT activities in
organizations, including IT infrastructure, IT use, and project management.

40. A _______ is a product or service, such as a technical report, a training session, a

piece of hardware, or a segment of software code, produced or provided as part of a
project.

41. The term _______ _______ ________ has become popular to describe new
approaches that focus on colse collaboration between programming teams and
business experts.

42. Which of the following is not part of the three-sphere model for systems
management?

A. Business

B.Information

C.Technology

D.Organization

43.Which of the four frames of organizations addresses how meetings are run,
employee dress codes, and expected work hours?

A. Structural

B.Human resources

C. Political

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D. Symbolic

44. Personnel in a _________ organizational structure often report to two or more

bosses.

A. Functional

B. Project

C. Matrix

D. Hybrid

45. Project work is most successful in an organizational culture where all of the
following characteristics are high except ______.

A. Member identity

B. Group emphasis

C. Risk tolerance

D. Control

46.A __________ is a product or service, such as a technical report, a training session,

or hardware, produced or provided as part of a project.

A. Deliverable

B.Product

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C Work package

D.Tangible goal

47. Which of the following is not a phase of the traditional project life cycle?

Discuss

A. Systems analysis

B.Concept

C. Development

D.Implementation

48.What is the term used to describe a framework of the phases involved in developing
information systems?

A. Systems development life cycle

B. Rapid application development

C. Predictive life cycle

D. Extreme programming

49. Another name for a phase exit is a ______ point.

A.Review

B. Stage

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C. Meeting

D.Kill

50.The nature of information technology projects is different from projects in many other
industries because they are very ______.

A.Expensive

B.Technical

C.Diverse

D. Challenging

51.What term is used to describe when an organization acquires goods and/or sources
from an outside source in another country?

A. Globalization

B.Offshoring

C. Exporting

D. Global sourcing

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