MANAGEMENT INFORMATION SYSTEMS Notes

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MANAGEMENT
INFORMATION
SYSTEMS
MODULE 3
tttttttt
DAN KOSGEI
MIS 2022
MIS
INTRODUCTION TO MANAGEMENT INFORMATION SYSTEMS
1.1 What is a management information system (MIS)?

Introduction
In this unit we are going to discuss the meaning and some important aspects of management information
system. According to the Systems Approach of Management, an organization is a sum of the interrelated parts
or sub systems. The management is responsible to make relations amongst these Sub-Systems into a total
system. For this purpose Management Information System (MIS) becomes an unavoidable part of any
organization. Management Information System is a systematized cyclic pattern of communication. By this
System, organizations cannot achieve their goals.
System
This is an organized grouping of components having certain interrelationships and working collectively to
achieve a set of objectives. The system approach is a method or framework which helps us to analyze and
explore the operations and interactions which exist in the systems around us.
Any given system possesses the follow characteristics or attributes:-
1. Organization – This is the arrangement of components that help to achieve objectives.
2. Central objective – Among the interacting components there has to be goals or objectives focused by all.
3. Interaction – This is the manner in which each component functions with other components of the
system.
4. Interdependence – This means that parts of the organization or system depend on one another.
5. Integration – This is concerned with how a system is tied together.
Elements of a System
1. INPUT – These are components that are required to be processed so as to give the output. This includes
raw materials, energy and human labor.
2. OUTPUT – This is the product of processing e.g. goods or a service.
3. PROCESSING – This is the transformation or conversion procedure of input into output. i.e. production
department or factory.
4. CONTROL – this element guides the system. In an organization this is the decision making body that
controls the pattern of activities, governs input, processing and output e.g the management of a
company.
5. FEEDBACK – Control in a dynamic system is achieved by feedback which is the measure of output
against the standard.
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6. ENVIRONMENT – This is the source of external elements that interact with the system or exert
pressure e.g. customers, suppliers, government policies and competition.
7. BOUNDARY – This are the limits that identity its components, processes and interrelationships when it
interfaces with another system e.g. in a company the invoicing function could be undertaken by the sales
department whereas in another it’s undertaken by the Account department.
Meaning of MIS
MIS consists of three words, that is Management, Information and System. On the basis of these three words
MIS can be defined as a system, which supplies information to Management. Actually, MIS is a process of
providing necessary information to management. It helps in planning, controlling and in taking different
managerial decisions. MIS is the structured, formal, systematic part of communication system. MIS is an
assemblage of personnel and facilities, organized into an integrated system by which relevant, adequate and
timely information is supplied to the executives.
It is to be mentioned that in respect of a large enterprise, MIS can be built around electronic computers. MIS is
not new, but only its computerization is new. Before the invention of computer, MIS techniques had existed to
supply operations. The computer has added one or more dimensions such as speed, accuracy and increased
volume of data.
Some definitions of MIS are given below
According to Kennevans, MIS is an organised method of providing past, present and projection information
relating to internal operations and external intelligence.
According to Gordon B. Davis, MIS is an integrated man/machine system for providing information to support
the operations management and decision making functions of an organization.
According to Robert G. Mardick, goel E Ross and gomes R.Claggett, MIS is the System intended to provide
information for decision making, planning, organizing and controlling the operations of the subsystems of the
firm and to provide a Synergistic organization in the process.
Definition of MIS
Any telecommunications and/or computer related equipment or interconnected system or sub-systems of
equipment that is used in the acquisition, storage, manipulation, management, movement, control, display,
switching, interchange, transmission or reception of voice and/or data, and includes software, firmware and
hardware.
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Also, a MIS is an IS that provides information to the management to enable them plan, coordinate, control
monitor and make decision by providing routine, summarizes and exceptional report.
The focus is on the design and operation of the MIS which means that the information system is viewed as a
means of processing data, i.e. the routine facts and figures of the organization, into information which is then
used for decision making. It is changes in decision behavior which distinguish data from information.
The Figure 1.1 summarizes this approach.
MIS User
Data processes Information processes
flows Flows Decisions
Figure 1.1
This means that MISs are qualitatively different from data processing systems and that management
involvement and interaction between information specialists and management are the key features of successful
MIS design.
Therefore, MIS can be defined as:
A system to convert data from internal and external sources into information and to communicate that
information, in an appropriate form, to managers at all levels in all functions to enable them to make timely
and effective decisions for planning, directing and controlling the activities for which they are responsible.
To be successful an MIS must be designed and operated with due regard to organization and behavioral
principles as well as technical factors. Management must be informed enough to make an effective contribution
to systems design and information specialists (systems analysts, accountants, operations researchers and others)
must become more aware of managerial functions and needs so that, jointly, more effective MISs are
developed.
Characteristics of MIS
The management information system has the following characteristics

1) System approach: MIS is based on the System approach. It is a step by step approach to the study of
system and its performance. Performance is made in the light of the objective which has been constituted for
that purpose.
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2) Management oriented: Under MIS, necessary information is provided to each manager at the right
time,in right form and a relevant one, which is required by the management by providing information in taking
effective managerial decision.
3) Future oriented: MIS is designed and developed keeping in view the future position of the
business.Therefore, MIS should provide useful information on the basis of projections based on which future
action can be taken.
4) Integrated: MIS is designed in taking a comprehensive view or looking at the complete picture of the
interlocking sub-systems that operate within the company. It considers all aspects of production, marketing,
accounting, financing, management etc.
5) Common-data followed: MIS deals with the common data that are available in the business. MIS
provides data and information for taking effective managerial decision, which must select the real picture of the
business.
6) Long term planning: MIS is prepared for long term planning of the business. So, the designer should
avoid the outdated data and information in designing and developing time of MIS. The designer should consider
the present situation and future trend of the business activities, when MIS is designed.
7) Control database: Another important characteristic of MIS is that it always based on centralized data and
information. It is because of this fact that MIS is to supply data and information in such a way so that the
management can take its important decision.
Functions of MIS
The main purpose of MIS is to provide the management with the necessary information for decision making. In
order to achieve this purpose MIS is to perform the following functions.
1) Collection of data: The first function of MIS is to collect necessary data from both internal and external
sources of the organization. The data of the organization which have already been gathered are kept in some
physical medium such as a paper form or entering it directly into computer system.
2) Processing data: After storing the data, the next important function of MIS is to process the same. In
theprocessing, the data are converted to require management information, calculating company, sorting,
classifying and summarizing etc. are the necessary activities to be done for processing the data.
3) Storage of information: Under the MIS, necessary data and information are carefully stored, so that it
can save time for searching the same. Generally, data and information are stored by reserving and organizing
them in the form of files, records and databases for future use
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4) Retrieval of information: Another function of MIS is to retrieve the information to meet the exact
management information demands. So retrieval should be done as per the requirement of the management
users.
5) Disseminating: Disseminating is the last function or finished product of MIS. By disseminating the data
and information are divided and distributed to the users in an organization. This can be done through reports or
outline through computer terminals periodically.
Components of MIS and their relationship
A management information system is made up of five major components namely people, business processes,
data, hardware, and software. All of these components must work together to achieve business objects.
People – these are the users who use the information system to record the day to day business transactions. The
users are usually qualified professionals such as accountants, human resource managers, etc. The ICT
department usually has the support staff who ensure that the system is running properly.
Business Procedures – these are agreed upon best practices that guide the users and all other components on
how to work efficiently. Business procedures are developed by the people i.e. users, consultants, etc.
Data – the recorded day to day business transactions. For a bank, data is collected from activities such as
deposits, withdrawals, etc.
Hardware – hardware is made up of the computers, printers, networking devices, etc. The hardware provides
the computing power for processing data. It also provides networking and printing capabilities. The hardware
speeds up the processing of data into information.
Software – these are programs that run on the hardware. The software is broken down into two major
categories namely system software and applications software. System software refers to the operating system
i.e. Windows, Mac OS, and Ubuntu, etc. Applications software refers to specialized software for accomplishing
business tasks such as a Payroll program, banking system, point of sale system, etc.
Role of Information in an Organization

In addition to the general function of improving knowledge, information assists management in several ways
including:
• The reduction of uncertainty: uncertainty exists where there is less than perfect knowledge. Rarely, if ever,
is there perfect knowledge but relevant information helps to reduce the unknown. This is particularly
relevant in planning and decision making.
• As an aid to monitoring and control: by providing information about performance and the extent of
deviations from planned levels of performance, management is better able to control operation. .
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(Monitoring and controlling involves regularly measuring progress on a project to ensure it

continues meeting objectives and addressing current organizational needs. It involves determining
what corrective action is required, when it must occur, and who must do it).
• As a means of communication: managers need to know about developments, plans, forecasts, and
impending changes and so on.
• As a memory supplement: by having historical information about performance, transactions, results of past
actions and decisions available for reference, personal memories are supplemented.
• As an aid to simplification: by reducing uncertainty and enhancing understanding, problems and situations
are simplified and become more manageable.
Characteristics of good Management Information System
 The purpose of a management information system is to help executives of an organization make decisions
that advance the organization's goals. An effective MIS assembles data available from company
operations, external inputs and past activities into information that shows what the company has achieved
in key areas of interest, and what is required for further progress. The most important characteristics of an
MIS are those that give decision-makers confidence that their actions will have the desired consequences.
Relevance
 The information a manager receives from an MIS has to relate to the decisions the manager has to make. An
effective MIS takes data that originates in the areas of activity that concern the manager at any given time,
and organizes it into forms that are meaningful for making decisions. If a manager has to make pricing
decisions, for example, an MIS may take sales data from the past five years, and display sales volume and
profit projections for various pricing scenarios.
Accuracy
 A key measure of the effectiveness of an MIS is the accuracy and reliability of its information. The accuracy
of the data it uses and the calculations it applies determine the effectiveness of the resulting information.
The sources of the data determine whether the information is reliable. Historical performance is often part
of the input for an MIS, and also serves as a good measure of the accuracy and reliability of its output.
Usefulness
 The information a manager receives from an MIS may be relevant and accurate, but it is only useful if it
helps him with the particular decisions he has to make. For example, if a manager has to make decisions
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on which employees to cut due to staff reductions, information on resulting cost savings is relevant, but
information on the performance of the employees in question is more useful. The MIS has to make useful
information easily accessible.
Timeliness
 MIS output must be current. Management has to make decisions about the future of the organization based
on data from the present, even when evaluating trends. The more recent the data, the more these decisions
will reflect present reality and correctly anticipate their effects on the company. When the collection and
processing of data delays its availability, the MIS must take into consideration its potential inaccuracies
due to age and present the resulting information accordingly, with possible ranges of error.
Completeness
 An effective MIS presents all the most relevant and useful information for a particular decision. If some
information is not available due to missing data, it highlights the gaps and either displays possible
scenarios or presents possible consequences resulting from the missing data. Management can either add
the missing data or make the appropriate decisions aware of the missing information. An incomplete or
partial presentation of information can lead to decisions that don't have the anticipated effects.
Approaches to system classification There are two
broad categories.
a). The pre-specific processing of day to day transactions ,known as data processing or transaction processing
and the production of regular reports analysis and information for planning control and decision making
directly by the computer.
b). the use of computers by the end –users themselves .They include managers, accountants, office staff, sales
people executive etc.
Both produce management information. The key difference is that the pre specified systems supply pre-
determined outputs and reports so there is less flexibility.
This means that great care must be taken in analyzing and determining management’s real information .On
the other hand, with the end user computing there is more flexibility and interaction so that the emphasis
becomes one of supporting the end user rather than the production of a specified report.
Information systems can be classified by:
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(a) Organizational level Supported
That is, information systems that support managers at different levels of the organization. This classifies IS as
transaction processing systems (TPS, to support operational level), management information systems (MIS, to
support middle/tactical level), and Executive information system (EIS, to support the senior level
management).
(a) Functional area supported

These are information systems that support operations and management of different functions within an
organization. They include: financial management systems, human resource management systems, marketing
management systems etc.
(c) Support provided.
They are classified according to the support they provide. They include:
• Data processing systems/transaction processing systems

• Management information systems
• Executive information systems
(d) Management activity supported
Executive support systems (ESS)
They are designed to help senior management make strategic decisions. An ESS gathers analyses and
summarizes the key internal and external information used in the business. ESS typically involves lots
of data analysis and modeling tools, such as "what-if" analysis, to help strategic decision-making.
A good way to think about an ESS is to imagine the senior management team in an aircraft cockpit, with
the instrument panel showing them the status of all the key business activities.
Management information systems (MIS)
They are primarily concerned with internal sources of information. MIS usually take data from the
transaction processing systems (see below) and summarize it into a series of management reports.
MIS reports tend to be used by middle management and operational supervisors.
Decision support systems (DSS)
Specifically designed to help management make decisions in situations where there is uncertainty about
the outcomes of those decisions.
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DSS use tools and techniques to help gather relevant information and analyze the options and
alternatives. DSS often involves use of complex spreadsheet and databases to create "what-if" models.
Knowledge management systems (KMS)
Exist to help businesses create and share information. They are typically used in businesses where
employees create new knowledge and expertise, which can then be shared by other people in the
organization to create further commercial opportunities. Good examples include firms of lawyers,
accountants and management consultants.
KMS are built around systems which allow efficient categorization and distribution of knowledge. For
example, the knowledge itself might be contained in word processing documents, spreadsheets,
PowerPoint presentations. Internet pages etc. To share the knowledge, a KMS would use group
collaboration systems, such as an intranet.
Transaction processing systems (TPS)
They are designed to process routine transactions efficiently and accurately.
A business will have several TPS; for example:
• Billing systems to send invoices to customers

• Systems to calculate the weekly and monthly payroll and tax payments
• Production and purchasing systems to calculate raw material requirements
• Stock control systems to process all movements into, within and out of the business
Office automation systems
Try to improve the productivity of employees who need to process data and information.
Perhaps the best example is the wide range of software systems that exist to improve the productivity of
employees working in an office (for example, Microsoft Office XP), or systems that allow employees to
work from home or while on the move.
Decision support systems - expert systems
APPROACHES TO INFORMATION SYSTEMS
Social-technical Systems
The socio-technical view of organizations was developed by Trist and the Tavistock Institute and arose from
consideration that any production system requires both a technological organization, i.e. the equipment,
processes, methods, etc. and a work organization relating to those who carry out the necessary tasks to each
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other, i.e. the social system. Based on this view an organization is not just a technical or social system but is the
structuring of human activities round various technologies.
The technologies involved determine the technical sub-systems and vary widely. Consider, for example, the
differing skills, procedures, machinery, equipment and the layout of facilities required in an electronics
company, a car manufacturer, a hospital or a computer bureau.
In addition to the technical sub-system, every organization has a social subsystem which consists of the
aspirations, expectations, interactions and value systems of the members. The two sub-systems - the technical
and the social -cannot be looked at separately but must both be considered as interrelating within the
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organization. Socio-technical theory suggests that the organization consists of four interrelated elements - tasks,
people, structure and technology as shown in Figure below:
Technology
Structure People
Tasks
More traditional approaches to Organizations and their problems have tended to concentrate on one or other of
the sub-systems with little or no recognition of the other.
Social-Technical View of IS
Contemporary Approaches to Information Systems
The study of information systems deals with issues and insights contributed from technical and behavioral
disciplines.
The technical approach emphasizes mathematically based, normative models to study information systems, as
well as the physical technology and formal capabilities of these systems. The behavioral approach, a growing part
of the information systems field, does not ignore technology, but tends to focus on non-technical solutions
concentrating instead on changes in attitudes, management and organizational policy, and behavior.
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MIS combines the work of computer science, management science, and operations research with a practical
orientation toward developing system solutions to real-world problems and managing information technology
resources. It is also concerned with behavioral issues surrounding the development, use, and impact of
information systems, which are typically discussed in the fields of sociology, economics, and psychology
In the sociotechnical view of systems, optimal organizational performance is achieved by jointly optimizing
both the social and technical systems used in production. Adopting a sociotechnical systems perspective helps to
avoid a purely technological approach to information systems.
Technology must be changed and designed, sometimes even "de-optimized," to fit organizational and individual
needs. Organizations and individuals must also be changed through training, learning, and planned organizational
change to allow technology to operate and prosper.
Information systems are sociotechnical systems. Although they are composed of machines, devices, and "hard"
physical technology, they require substantial social, organizational, and intellectual investments to make them
work properly. Since problems with information systems—and their solutions—are rarely all technical or
behavioral, a multidisciplinary approach is needed. A Sociotechnical Perspective on Information Systems
In a sociotechnical perspective, the performance of a system is optimized when both the technology and the
organization mutually adjust to one another until a satisfactory fit is obtained.
System Approach or System Theory

The systems approach is a method or framework which helps us to analyze and explore the operation and
interactions which exist in the systems around us. In other words; this is an approach to problem solving e.g.
trying to structure an organization or analyze an information system. It involves trying to establish the
objectives of the system through considering the relationship with its environment, identifying its component
and the interaction features of the system.
, summarized, aggregated, abstracted.
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ORGANIZATION’S STRUCTURE, CUTLURE AND CHANGE

These are 4 basic forms of organization structure:-
1. Hierarchy of Authority
This is illustrated as a pyramid. In this structure each position has authority commonly associated with it
and a span of control. (These are the number of subordinates working under a particular authority). This
may be narrow or wide giving raise to Tall and Flat structure.
TALL FLAT
2. Specialization: This is the division of labor in an organization. Its usually based on the different functions
such as marketing, accounting, production and distribution.
GENERAL MANAGER
Sales & marketing Production Distribution Accounts manager Manager

Manager Manager
3. Formulation: Extent to which rules and procedures exist to handle organizational activities. An indication
of formalization is the extent to which decisions can be programmed.
4. Centralization: This refers to the organizational structure where decision making occurs either at the top
level or low level.
Organization culture can be perceived as:-
1. Either using High technology or low technology.

2. Either a price leader or a price follower.
3. Produce high quality or low quality goods.
4. They are industry innovators or imitators.
5. Either selective marketer or mass marketers.
6. Risk takers or risk evaders.
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USE OF INFORMATION SYSTEMS IN MANAGEMENT
Information system
Information system has been defined in terms of two perspectives: one relating to its function; the other relating
to its structure. From a functional perspective; an information system is a technologically implemented medium
for the purpose of recording, storing, and disseminating linguistic expressions as well as for the supporting of
inference making.
From a structural perspective; an information system consists of a collection of people, processes, data, models,
technology and partly formalized language, forming a cohesive structure which serves some organizational
purpose or function. The functional definition has its merits in focusing on what actual users - from a
conceptual point of view- do with the information system while using it. They communicate with experts to
solve a particular problem. The structural definition makes clear that IS are socio-technical systems, i.e.,
systems consisting of humans, behavior rules, and conceptual and technical artifacts.
An information system can be defined technically as a set of interrelated components that collect (or retrieve),
process, store, and distribute information to support decision making and control in an organization. In addition
to supporting decision making, coordination, and control, information systems may also help managers and
workers analyze problems, visualize complex subjects, and create new products.
Components of an Information System:
The components that make up an IS are:-

1. Hardware – This is a set of devices such as the processors, printers and monitor. Also includes mainframes
and minicomputers that can accept data and process them respectively.
2. Software –A set of instructions or program that enable the hardware to process data. These can be
classified into system software and application software.
3. Databases – This is a collection of related files or tables that store data and their association or relations
among them.
4. Network – This is a connecting system that allows the sharing of the resources by different computers.
5. Procedures – This is a set of instructions about how to combine the above components in order to process
information and generate the desired output.
6. People – These are the individuals who work with the system or use its output
Importance of Information system in management
The main purpose of Information System is to provide the management the necessary information for decision
making. In order to achieve this purpose MIS is to perform the following functions.
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Collection of data: The first function of MIS is to collect necessary data from both internal and external sources
of the organization. The data of the organization which have already been gathered are kept in some physical
medium such as a paper form or entering it directly into computer system.
(i) Processing data: After storing the data, the next important function of MIS is to process the same. In the
processing, the data are converted to require management information, calculating company, sorting,
classifying and summarizing etc. are the necessary activities to be done for processing the data.
(ii) Storage of information: Under the MIS, necessary data and information are carefully stored, so that it can
save time for searching the same. Generally, data and information are stored by reserving and organizing
them in the form of files, records and databases for future use.
(iii) Retrieval of information: Another function of MIS is to retrieve the information to meet the exact
management information demands. So retrieval should be done as per the requirement of the management
users.
(iv) Disseminating: Disseminating is the last function or finished product of MIS. By disseminating the data
and information are divided and distributed to the users in an organization. This can be done through
reports or outline through computer terminals periodically.
An Organization as a System
ENVIRONMENT Standard
 Customers Polices & decision
 Suppliers making
 Competitors Management
 Govt. Policies
Control
Raw materials Transformation Service or Goods

energy
Human labor
INPUT PROCESSING OUTPUT

CONTROL PRINCIPLES
Control is the process of ensuring that operations proceed according to plan and at the most basic level-this is
done by comparing the actual results or output of the system against a target and using any differences found to
adjust the input side of the system so as to bring activities in line with the target. In practice the target may be
termed a norm, a budget a standard, a performance or stock level and so on.
Types of Control Systems
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There are basically two types of control system: the open loop system and the closed loop control systems.
(i) Open loop control system
This is a simple open loop control system. Its operation is very simple, when an input signal directs the control
element to respond, an output will be produced. Examples of the open loop control systems include washing
machines, light switches, gas ovens, etc.
The drawback of an open loop control system is that it is incapable of making automatic adjustments. Even
when the magnitude of the output is too big or too small, the system will not make the appropriate adjustments.
For this reason, an open loop control system is not suitable for use as a complex control system. Sometimes it
may even require monitoring and response from the user.
(ii) Closed loop control system

Sometimes, we may use the output of the control system to adjust the input signal. This is called feedback.
Feedback is a special feature of a closed loop control system. A closed loop control system compares the output
with the expected result or command status, and then it takes appropriate control actions to adjust the input
signal. Therefore, a closed loop system is always equipped with a sensor, which is used to monitor the output
and compare it with the expected result.
The diagram shows a simple closed loop system. The output signal is fed back to the input to produce a new
output. A well-design system can often increase the accuracy of the output.
Feedback
This is the gathering of information on past performance from the output of a system, department or process
and using it to govern future performance by adjusting the input size of the system.
Feedback can be divided into positive feedback and negative feedback.

(i) Positive Feedback
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This causes a system to amplify an adjustment or an action. It acts in the same direction as the measured
deviation i.e. this reinforces the way the system is moving and if thought to be beneficial.
If an advertisement increased the sales further advertisements may be considered.
(ii) Negative Feedback

This is feedback seeking fluctuation around a norm or a standard. The corrective action is on the opposite side
of the deviation e.g. production quantities below the plan may require an increase in labor.
One advantage of using the closed loop control system is that it is able to adjust its output automatically by
feeding the output signal back to the input.
In a closed loop control system, the controlled variable (output) of the system is sensed at every instant of
time, feedback and compared with the desired input resulting in an error signal. This error signal directs the
control elements in the system to do the necessary corrective action such that the output of the system is
obtained as desired. The feedback control system takes into account the disturbances also and makes the
corrective action.
These control systems are accurate, stable and less affected by noise. But these control systems are
sophisticated and hence costly. They are also complicated to design for stability, give oscillatory response and
feedback brings down the overall gain of the control system
Feedback Loops
High level controller
Low-level
Controller
Standard
Effector Comparator
System Being Sensor management

Adjust Controller
System inputs System output
e.g. labor
finances
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1. SENSOR- This is the measuring and recording device for example automatic metering or some kind of
paper work.
2. COMPARATOR – This is he means by which comparisons of actual results and the plan are achieved
e.g. A clerk or a computer program.
3. EFFECTOR – This could be a manager or supervisor acting on the report to make adjustments.
The procedure outlined above, i.e. input - process - output - monitor and compare - adjustment, requires what is
known as a feedback control loop and such a loop is a common feature of many aspects of MIS, for example,
stock control, budgetary control, production control and so on. It will be realized that the basic system described
is relatively mechanistic and is therefore not necessarily suitable for all facets of the organization’s activities.
Feed Forward
Where a self-regulating feedback system is not able to control a process adequately it may be feasible to use
feed forward. This is where monitoring at some early stage of a system or process may indicate that an
adjustment should be made at a later stage of the process, prior to the final output. Feed forward is not an
automatic process and requires management intervention for it to operate successfully and, consequently, it
does not have the degree of 'automatic' control inherent in a feedback system.
Timing of Control
Control is most effective when the time rank between the output and the corrective action is minimal. The
speed of control is influenced by organization structure and the reporting period. Managers may be unable to
effect control due to the following reasons:-
1. The subject covered is outside manager’s control.
2. The information comes too late for effective action to be taken.
3. Insufficient details are provided.
4. The information that is provided is in a form that isn’t understood.
PLANNING
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Information Systems and Organizational Structure

An Information System is a composition of people, procedures and equipment that provide information to the
management to be able to make appropriate decisions. This can now be illustrated in the following pyramid.
Strategic Level
-
EIS or -
ESS
-
Tactical level (DSS,

MIS)
-
-
Knowledge level (KSWS,
OAS)
-
Operational level (TPS) -
Support long-rays planning activities of semi level

management from both environment and internally.
Maintain changes in external environment with existing
information and activities
Support maintaining and decision making and
administrative activities of middle level management
Support knowledge and data worker in organization

Help business to integrate new knowledge and control
the flow of paper work in the organization.
Monitor elementary activities and transaction of the organization.

Answer routine questions and track flow of information in organization
- Must be current and accurate.
1. Operational System
They monitor elementary activities and transactions of the organization e.g. sales, receipts, cash deposits,
payroll and flow of materials in the factory.
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MIS
The main purpose of these systems is to answer routine questions and track the flow of information in the
organization. To answer this information must be available, it should be current and accurate e.g. a bank
deposit query from a bank A.T.M.
2. Knowledge Level Systems

This supports knowledge and data workers in the organization. It may help businesses to integrate new
knowledge and to control the flow of paper work in the organization.
3. Management /Tactical Level Systems

They support the monitoring, controlling and decision making and administrative activities of middle level
managers e.g. they may be required to compare the current data with the past. These systems produce
reports rather than instant information on
20
MIS
the operations. They may focus on the less structures decisions for which information requirements
aren’t always clear and attempt to answer the ‘what if’ questions.
4. Strategic Level Systems
These support the long-range planning activities of the senior level management both from the
environment and internally. Their main concern is maintaining changes in the external environment with
the existing information and activities.
Level of Typical Planning Decision type Accuracy Source of
management responsibility Horizon information
1. Strategic Setting Organization Non-structured Very low
goals, long-term Normacy takes & subject to Mostly from
Accuracy
plans and policies period of 5-10 many changes outside the
years depending organization
on the project and internal
2. Tactical Usually takes 1 Semi-structured Reasonable A mixture of
to and based on the accuracy e.g. internal and
Setting and 3 years managerial when setting external sources
monitoring org. experience budgets and e.g. what is
budgets, meeting the targets happening to the
strategic goals & competitors.
developing
operations objectives
and policies
3. Operational Usually a week or Structures and High accuracy Captured from
Effective use of less day to day hardly require required e.g. source
existing facilities human tracking the documents.
and resources. intervention. cost to a cent
Concerned with
dayto-day running of
the organization
Types of Information Systems
Strategic level (long-term planning)

ESS
Tactical level (planning & control)

MIS & DSS
Knowledge level (designing new

KWS & OAS products)
| Operational level (keeping

TPS track of daily activities)
21 | D. Kosgei
MIS
TRANSACTIONS PROCESSING SYSTEMS (TPS)

These are the basic business systems serving the operational level of the organization. A TPS is a
computerized system that performs and records the daily routine transactions necessary to conduct the
business e.g. sales order entry, invoicing, hotel bookings, payroll and shipping data. At this level tasks,
resource and goals are predefined and are highly structured e.g. the products that are out of stock and the
slow moving stock.
TPS are central to an organization such that if there is a failure it can bring the organization to a standard
still. The information inputs for the TPS are in the form of transactions and events. Processing involves
sorting, listing, merging and updating. The information output are detailed reports which are given to the
operational staffs and supervisors.
It provides the input data for many other systems. T.P.S is critical to the success of any organization since
they support the law level operations such as purchasing o raw materials. Billing customers and preparing
the payroll etc.
The objectives of T.P.S are:
1. To provide all information needed by law or by the organization policy to keep the business running
properly and efficiency.
2. Provide timely documents and reports.
3. Increase the competitiveness of the organization.
4. Provide necessary data for tactical and strategic systems e.g. the DSS.
5. To assure accuracy and integration of data and information.
6. To safeguard assets and security of information.
NB: T.P.S is the most likely candidates for re-engineering and usually yield the most tangible benefits of I.T.
investments.
Major characteristics of T.P.S

1. This involves large amounts of data to be processed. Sources of this data are mostly internal.
2. T.P.S process information regularly e.g. Daily or Weekly.
3. Due to the voluminous information that is processed a higher storage capacity is required.
4. Due to these high volumes, high processing speeds are needed.
5. T.P.S systems monitor and collect current and past data.
6. The inputs and the outputs are highly structured (programmable).
7. A high level of details is usually observed in the input.
8. This system requires a high level of accuracy, data integrity and security.
Activities and methods of TPS

There are 2 transactions processing modes namely;
MIS
1. Batch processing
Business transactions are corrected as they occur and are accumulated over a period of time and
prepared for input as a single unit or batch. This is normally processed periodically e.g. monthly,
examples include the payroll and the general ledger.
2. Interactive /Real-Time processing

The transactions data are processes immediately without delay e.g. inventory systems, ticketing
systems, reservation systems and A.T.Ms.
T.P.S can also be based on a client /server and internet technologies. Innovations such as online
transactions processing (OLTP) can serve many people by allowing suppliers to enter the TPS and look
at the inventory level.
Types of TPS (FUNCTIONAL TPS)

1. Order processing
This is necessary to ensure that the customer orders are filled in a timely manner and that sufficient
finished goods are always available.
Sales people in many organizations will enter order from client sites using portable wireless
computers.
2. Inventory /Stock Control

A manufacturing firm will have several inventories such as raw materials, work in progress (W.I.P) and
finished goods. These could also contain maintenance parts. The inventory T.P.S monitors stock going
out or coming in to the organization via its various warehouses and plants.
3. Accounts Receivable /sales ledger or Debtor ledger

This manages the cash flow of the company by keeping track of the money owned on changes for the
goods sold. The system updates records and raises an invoice /statement regularly.
4. Account payable /purchase ledger or creditor ledger

Keeps track of money owed to company by various creditors or suppliers.
5. Payroll
This monitors the salaries and has the primary output as checks and pay slips to be distributed to the
employees and provides a payroll register which is a summary of all the transactions.
6. Human Resources
This system gives the information about the employees for personnel planning and government
reporting and also the management of the company to benefit from other programmes. These include
information on the employee’s e.g. net pay, deductions e.t.c.
MIS
7. General ledger
This is a record of the monetary transactions e.g. payment to suppliers, receipts from customers and
payments to employees. It will give financial statements such as the trading and profit and loss
account, the trial balance and the balance sheet.
Knowledge Work and Office Automation System (KWS & OAS)

These systems require great computing power, access to external databases, easy-to-use interfaces, and
optimization for the specific tasks to be performed. Knowledge work systems require strong links to
external knowledge bases in addition to specialized hardware and software.
KWS are the systems that secure the knowledge workers. They do assist the knowledge workers in the
creation and integration of new knowledge in the organization. The knowledge workers are the people
who have the responsibility of creating or finding new sources of information. This includes engineer
doctors, scientist and programmers. Processing involves modeling (is the process of representing a
model which includes its construction and working) and simulations. (simulation is the process of using
a model to study the performance of a system) The information outputs are models and graphics for
professional and technical staff.
Office Automation system are computer system this include word processors, emails and scheduling
system, designed to increase the productivity of the data workers in the office.
Data workers have less formal qualifications and tend to process information a lot is already available.
This includes secretariat, accounts, filling clerks or managers whose jobs include the use, manipulation or
dissemination of information.
Information inputs are documents and schedule – processing includes, delegation scheduling and
communication. The outputs are clerical schedules and the mails for clerical workers.
Management Information System (MIS).

They are information system at the management level that assists in the planning the (function of
management that involves setting objectives and determining a course of action for achieving those
objectives). Controlling (Control is a function of management which helps to check errors in order to take
corrective actions) and decision making. They are oriented towards internal rather than external events. To
a high degree they depend on the information from the T.P.S. They summarize and report on the basic
operations of the company.
They are used for comparing performance i.e. they give an analysis of the past and present.
Information inputs are summary transaction data high volume data and simple models.
The processing includes routine reporting, simple modeling and low level analysis. The outputs are summary
and exceptional reports for middle managers.
Adhoc reports are reports that aren’t available immediately but can easily be generated by specifying certain
parameters at any given time.
Exceptional reports are the reports that give a deviation in controls within a certain system e.g. payroll
where employee’s way is listed those that have negative salary.
MIS
Decision Support Systems

What is a decision support system (DSS)? A decision support system (DSS) is a
computer program application used to improve a company's decision-making
capabilities. It analyzes large amounts of data and presents an organization with
the best possible options available.
Information systems for the management level that combine data and sophisticated analytical models on
data analysis tools to support semi-structured decision making.
• They are used where decision are unique or rapidly changing and aren’t easily specified in
advance.
• They use internal information from TPS and MIS and also bring information from external services
• These systems have more analytical power than any other system and have an interface that is
interactive and user friendly.
• The information inputs are low volume data or massive databases which have been optimized for
data analysis and analytical modeling.
• Processing involves interactive simulations and analysis and the outputs are special reports,
decision analysis and responses to queries
Characteristics of decision support system
1. They are developed with the participation of individual managers or a group of managers to support a
range of decisions. Some decision support system are simple and may be developed with a
spreadsheet package e.g. Ms Excel or Lotus
123.
2. DSS are built to be modified so as to adapt to the user requirements.
3. DSS directly support the decision making process.
4. They have the strengths of projecting possible future situations during the planning process using the
“WHAT IF” mode e.g. what if we increase the advertising expenditure by 5% and the “GOAL SEEKING”
mode e.g. what would it take in terms of input factors to achieve a particular performance?
5. It has extensive analytical capabilities using logical and mathematical manipulation of data.
6. It combines one internal and the external information so as to build its own databases.
7. It has a graphic facility to portray the decision situation rather than the tabular display or data.
COMPONENTS OF A D.S.S
MIS
Data management Model management Creator, maintenance

and use of models
systems system
Retrieval Extraction
of data from Internal
and External sources Menus, icons, natural
Dialogue language and graphics
management
system
Human Decision Maker

User
Data Management System (SUB-SYSTEM)

It relies on a variety of internal and external databases. The extraction procedures are specified by a
specialist rather than an end-user paying attention to data consistency across multiple support systems.
Model Management System

A model is an abstract representation that illustrates the components or relationships of a given situation.
Models can be physical e.g. an airplane model. It can be mathematical e.g. an equation or it can be verbal
e.g. the description of a procedure for writing an order. It may also be statistical e.g. the mean, median,
mode, the variance and the standard deviation or they can be optimization models, forecasting or sensitivity
analysis model asking the WHAT IF questions to determine the impact of changes in one or more factors or
outcomes.
The power of a D.S.S. relies on the user’s ability to apply quantitative and mathematical models to data or
even statistical. These may include:-
i) Market responses models – this show how sales depends on factors such as price and promotion.
ii) Simulation models – this generates input values randomly from probability distribution e.g. to
determine the number of operators or cashiers needed.
iii) Optimization models – these are developed by management scientists for the allocation of resources to
maximize profits or minimize costs and time. They are usually based on linear programming.
Dialogue Management System (SUB-SYSTEM)
Since the D.S.S has the ability to apply models to large volumes of data from a variety of sources, the
advantage of a D.S.S is that the user finally and has a flexible interface between the human decision maker
and the computer system. These sub-systems support multiple forms of input and output. A.I has improved
on this by adding the ability to specify what is required in a subset of national language on activate the
MIS
system by voice. The windows capability enables the user to maintain several activities at the same time.
Extensive computer graphics are also utilized and the kind of dialogue will take the following form:-
a) Who is the biggest?
b) How do circumstances change over a given time?
c) How will one fact predict another?
d) What is typical or exceptional?
Classifications of DSS
They can be classified by the manager’s level i.e. operational tactical or functional area e.g. marketing,
finance and personal among others.
1. Data Access System
They provide a user friendly interface and adhoc access to the database. This is similar to what is offered
by database management through a quarry language. These systems are meant for operational control.
2. Data Analysis System
They help to analyze historical and current data either on demand or periodically e.g.
comparing the performance with that of the competitors.
3. Forecast-oriented Data Analysis systems
They assist in developing product plans including market segment forecast, sales forecast and analysis of
competitive actions. Their operation is based on access to a variety of internal and external sources,
marketing and product databases including a series of historical data.
4. Systems based on Accounting Models
They consider alternative options for planning purposes based on accounting deviations and
relationships. They produce estimated income statement and balance sheet and they use the “what if”
mode of alternatives.
5. Systems based on representation models

They show the dependence between a controllable variable e.g. the price of a produce and an outcome
such as sales. And they use simulation models to yield probabilistic results.
6. Systems based on optimization models.

They are used by management scientists to determine optimal allocation of resources or the best
possible schedule e.g. the use of linear programming to maximize an objective such as profit.
7. Systems with suggestion models.
These actually suggest decision rather than evaluating alternatives. They are used in narrow domains of
knowledge and are based on the expert system technology e.g. suggesting a product price or a
production volume.
They have the same capabilities and limitations like expert systems. Data oriented decision support
systems support easier places of decision making i.e. the intelligence, the decision and the choice places
are supported by model oriented DSS.
MIS
When to use decision support systems

1. When there is vast amount of data to be processed.
2. When there is a large amount of computation or data manipulation that have complex
interrelationships.
3. When there is an analysis of stages requiring the “WHAT IF” approach.
4. When human judgment is required.
5. When communication is required and several people contributing some special expertise are
involved.
6. When the decision maker is comfortable with the use of quantitative methods to enhance decision
making.
The Building of the DSS
D.S.S acquisition depends on the technology applied and the nature of the decision task that need support.
D.S.S technologies include;-
1. Specific D.S.S – This is the actual system that a manager works with during the decision process. It’s
built using D.S.S generators or tools.
2. D.S.S Generators – This is a software package that provides capabilities for building a specific D.S.S
rapidly and easily. The common characteristics are that much of the processing and data accessing
functionality is already programmed into to generator. Examples of generators are express, PC
Express, Focus, Nomad 2 Lotus 1, 2, 3 and Ms Excel.
3. D.S.S. Tools – This programming language with good capabilities for accessing arrays of data e.g. APL,
a plain spreadsheet, a statistical package SPSS or SAS or a DBMS with a Query facility which can be
used as a building block to contract a D.S.S generator or A specific D.S.S.
“Who builds a D.S.S?”

This is done by the end users and the MIS professionals. It involves the following groups of people:-
1. The manager is the end-user and the MIS professionals. It involves the following groups of people.
i) The manager is the end-user of a specific DSS on a knowledge worker who actually employs
the system to make decisions.
ii) The intermediary who assist the manager to learn the system.
iii) A DSS builder who employs a generator to build a specific DSS for the given end-user. He must
be familiar with the business problems and the capabilities of the generator.
iv) The technical support specialists who install and maintains various modules of the generator
package as needed. He ensures that there are linkages to other element such as databases,
personal workstation and the network.
v) A tool smith who develops the building blocks employed by the generator.
Comparison of DSS and MIS

DSS MIS
1. A DSS is more targeted. An MIS is more widely spread

MIS
2. They focus on specific They use routine flows of data to assist in the
decisions general control.
3. They are aimed at all managers They are largely dominated by professional e.g.
accountants and HR experts.
4. They are continuously They follow a particular system development

interactive methodology.
Methods of DSS Development
1. Quick-hit approach
Most DSS are built for personal use of a decision maker using a DSS system such as spreadsheet package
with templates. This method faces the same risks as those of end-user computing e.g. lack of
maintainability.
2. Traditional life cycle development.
This involves detailed system planning, analysis, design, coding, testing and implementing. This method is
good for complex D.S.S. and D.S.S generator.
3. Iterative development (prototyping).
In DSS development users may not know what they what from the system. A prototype, which is a simple
initial version, is used to experiment with and learn about the desired features of the system. This
method of development relies on the creation of such a prototype and its progressive refinement. The
simple version consist of 3 elements i.e. the Database. The dialogue and the model sub systems.
Develop a Prototype
Prototype /DSS
Evaluation
Are current
Yes Validation and
tn requirements
em documentation of DSS
met?
p
o
le
ve
D DSS is ready
No
for use
Prototype /DSS modification
MIS
Geographical Information System (G.I.S)

This is a special category of D.S.S that can handle and analyze data for planning and decision making using
digitized maps. The software can assemble, store, manipulate, and display geographically referenced
information, time data to points, lines and areas of a map.
They support decisions that require knowledge about the geographical distribution of people or other
resources which are useful in planning e.g.
1. Where to locate ATM in towns and cities.
2. Where to locate petrol stations.
3. To know market and know where to emphasis in marketing.
4. Depots and distributions points.
Web-Based Decisions Support System
These are systems that support decision making by providing online access to various databases and
information pools for the purposes of software analysis “handouts later”
Executive Information System /Executive Support System (E.S.S)
These are information system at the strategic level to address the non-structured decision making through
advanced graphics and communication. It combines internal and external data to create a generalized
computing and communications environment and thereby assist the senior executives monitor the
organization performance, tracks the activities of competitors, spot problems, identity opportunities and
focus trends.
ROLE OF E.I.S:
1. Executive are bound to receive fixed formats of reports e.g. weekly or monthly which can easily lead to
data over-load.
EIS solves the problem by supplying easy to use desktop analytical tools and online data displays. These
tools help to drill down the information i.e. being able to more from summarizes to the details.
2. Provide managers with minimum computers experience with a common user friendly software tool e.g. a
spreadsheet for analytical purposes.
3. To solve the limitation of having to use data from systems designed for different purposes e.g. data from
a sales TPS should provide essential information for marketing purposes.
4. Provide managers with external data e.g. current stock market news, industry trends and competitor
information. These data can be illustrated as follows:-
Characteristics of E.I.S
They provide immediate and easy access to information reflecting the key
success factors of the company and its subsidiaries.
 They use user-seductive interface e.g. color graphics and video which help the
user to grasp trends at a glance.
 Provide access to a variety of databases both from internal and external
sources through a uniform standard interface.
 Provide both the current status and the projection of
MIS
data.
 Allow easy tailoring to the preferences of a particular user or group of
users e.g.
Windows XP.
 They have the capabilities of drilling down the data.
 They create a generalized computing and communication environment rather
than providing any fixed application of a specific capability.
 They are designed to incorporate data about external event. e.g. new tax data
on competitors but also use summarized information from the DSS and the MIS.
 They filter/compress and track critical data emphasizing the reduction of time
and effort required to obtain executive information.
 Information is the average of internal and external data which are highly
summarized.
 The processing involves the production of graphics and simulations whereas the information
outputs are projections and responses to the queries of the senior managers. Developing E.I.S
Executive need change rapidly and so high level executive expect success the first time.
This implies that the developers of E.I.S must consider the following:
1. Using prototyping techniques to develop a user-friendly system.
2. Including a facility for environmental scanning that uses internal and external data to detect problems
in organizational environment, strategic trends and opportunities.
3. Developing a system that is going to neutralize resistance that is likely to occur due to the E.I.S
potential of giving top executives the capabilities of examining manager’s work without their
knowledge.
4. Developing a system whose benefits can be quantified after it becomes operational. This is because
there is a problem of justifying the cost of a system that primarily supports unstructured work.
Elements of a successful E.I.S

1. Standard Reports – the ability to navigate easily via large amounts of data. This can include text,
reports, numerical table and projects status reports e.g. Gantt Charts, PERT and network analysis.
2. Drill-down capabilities:-
3. Short term issues: Ability to set and delete issues very quickly without the help of
I.T staff.
4. Exceptional reporting capabilities.
5. Executive briefing: Manager should be able to select screens of data, text or graphs and download
them to a standard workstation for later review and preservation at meetings.
6. External data – Most businesses have sources of specific industry data that is important for the
operation of the data. The E.I.S is able to filter this key information.
7. News – News delivered electronically should be more current and focused that those via the print
media.
MIS
8. Data analysis – This should include abroad range of functionalities from a simple calculation to
sophisticated modeling software.
9. Executive mail – This allows managers to incorporate Emails and attachments with minimum
keyboard interactions.
10. Time management – The time management component of an E.I.S should provide a calendar and a
suspense file for keeping track of important dates and timers.
11. Data retrieval – It should provide access to corporate files and databases which are linked to public
databases.
Benefits associated with E.I.S
1. Help to save the staff and executive time.
2. Help executive improve their understanding of the company and its environment.
3. They eliminate communication bottlenecks between the staffs, the management and the executives
which can show down the decision making process.
4. They provide executive with summarized and custom tailored data.
5. Their ability to analyze, compare and highlight trends ensure clearer and up to date information.
6. Flexibility in their use in that they put the data and the tool in the hands of executives without
addressing specific problems or imposing solutions.
Problems Associated With E.I.S

1. The executive success failure will have a major impact on organization.
2. Line and staff managers are uncomfortable with executive access to detailed operational data
especially if they have no time to do their own analysis before the executive can access the data.
This may lead to situations where some data may be withheld from the databases.
3. Using an E.I.S may not be compatible with the management styles of making executives used to
working via others.
What is decision making?
Decision making is an integral part of management and occurs in every function and at all levels. Naturally the
type of decisions taken varies enormously but all decision makers have to go through a similar process. All of
them must decide by some means to choose the outcome or outcomes which are considered necessary or
desirable to them and to do so after some form of appraisal of the situation.
H.A. Simon, a leading authority on management decision making, considers that decision making comprises
four principal phases: finding occasions for making decisions, finding possible courses of action (i.e.
alternatives), choosing among courses of action, and evaluating past choices.
Figure shows a summary of these phases using Simon’s terminology
MIS
Phase 1 Intelligenc Searching the environment for conditions calling for decisions.
e
Phase 2 Design Inventing, developing and analyzing possible courses of action.
This involves processes to understand the problem, to generate
solutions and the testing of solution for feasibility.
Phase 3 Choice Selecting an alternative or course of action from those

available. A choice is made and implemented.
Phase 4 Review Assessing past choices.
It is important to realize that although there is a general flow from intelligence to design to choice to review, at
any time there could be a return to an earlier phase. For example, a decision maker in the choice phase, who
finds no suitable alternative among those currently available, would return to the design phase to develop
more alternatives. Decision making is an iterative process and although it is useful to separate out the various
phases in order to discuss them, very few decisions are taken in this neat, logical sequence. There is feedback/
interrelationships between decisions; there is flair, intuition, judgment and creativity.
Decision making is based on information. Information is the trigger to knowing there is a problem.
Information is needed to define and structure the problem, to explore and choose between the alternative
solutions and to review the effects of the implemented choice.
Simons model of decision making
Intelligent
1. Is there a problem?Individuals collect information to identify problems
or
Design
Choice
Implementation
opportunities. This requires exceptional reporting and uses MRS & TPS.
MIS
2. What are the alternatives?As you design you may make use of simulation and
prototyping which utilizes DSS and KWS
This require “what if” simulation and uses DSS and

3. Which should you choose?other large models.
The decision is put into effect and reports on

4. Is the choice working progress this requires graphics and charts.
Programmed and non-programmed decisions

Simon classified decisions into two categories according to the extent that the process of decision making can
be pre-planned. The categories are programmed and non-programmed, as follows;
 Programmed decisions
Characteristics: repetitive, routine, known decision rules or procedures, often automated, usually involve
'things' rather than people, can be delegated to low levels in the organization. Examples: inventory control
decisions, machine loading decisions, scheduling.
 Non-programmed decisions
Characteristics: novel, non-routine, decision rules not known, high degree of uncertainty, cannot be
delegated to low levels, may involve 'things' but always involve people. Examples: acquisitions, mergers,
launching new products, personnel appointments.
 Semi-structured decisions.
These decisions are partly programmable and partly rely on decision maker judgment.
Note: alternative terms for these two categories are structured and unstructured.
The two categories should be thought of as the extreme ends of a range of decision types with many decisions
containing elements of both categories. The terms programmed and non-programmed are not related to
computer processing. They refer to the nature of the decision process and to the extent that the process can be
pre-planned.
There is some relationship between the level of management and the decision type: broadly more programmed
decisions at lower levels and more unstructured decisions at higher levels, but this is not an absolute rule.
Some high level decisions contain structured elements, an example being a costly plant replacement decision
MIS
which is likely to be taken at the highest level and for which decision rules are available using replacement
analysis and investment appraisal techniques.
Levels of decision making
Decision making takes place at each level of management in an organization although there are markedly
different characteristics at each level. Each level has substantially different information requirements. The
figure below summarizes the main characteristics and information requirements of the various levels.
Management level Decision characteristics Information characteristics

Largely external, informal sources
important, forward looking, qualitative
Long time horizons, large-scale information important, precision
resources, much creativity and unimportant, instant access not vital,
judgment, usually unstructured,
problems difficult to define, infrequent, wide
Strategic much uncertainty ranging, incomplete
Tactical
Repetitive, short time scale, small-scale Largely internal, mainly historical,

resources, usually structured, clear detailed, often quantitative, high
objectives and decision rules, little or precision, instant availability often
no discretion critical, narrow in scope,
Operational comprehensive
The tactical level of management occupies an intermediate position between the two extremes with some of
the characteristics of both. Much of the development of formal aids to decision making, such as,, for example,
optimizing models has been directed at the operational and tactical levels of management. At the strategic
level, decision making is much more dependent on human factors and judgment. Such decision making is
based on guided trial and error and because of uncertainty and ambiguities, all possibilities cannot be
explored. This type of decision making is known as heuristic and is based on rules of thumb rather than
explicit decision rules.
Figure below gives examples of decision making at the three levels with typical information requirements.
In practice, decisions should be taken at the level where they are most effective.
Managemen Decision examples Information requirements
t level
MIS
Strategic Mergers and acquisitions, Market and economic forecasts, political and
new product planning, social trends, legislative, environmental and
capital investments, financial technological constraints and opportunities
structuring.
Tactical Pricing, capacity planning, Cost and sales analyses, performance

budget preparation, measures, summaries of operations/production,
purchasing contracts. budget/actual comparisons, etc.
Operational Production scheduling, Sales orders, production requirements,

maintenance, reordering, performance measures, customer credit status,
credit approval. deliveries, dispatches, etc.
Peter Drucker says decisions should be made at the lowest possible level which accords with their nature, and
as close to the scene of action as possible. They should always be taken at the level which ensures none of the
activities and objectives affected is forgotten.
There is increasing evidence that many decisions are being taken at lower levels in the hierarchy. Authority to
take decisions is being delegated down the line/ especially in modern service industries. This process is called
empowerment and means that the organization is able to answer queries and take a variety of decisions more
quickly thus providing a better and more flexible service. Empowerment is also one of the reasons why some
middle management jobs are disappearing.
Decision making cycle

Steps Involved In Decision Making Process
Decision-making involves a number of steps which need to be taken in a logical manner. This is treated as a
rational or scientific 'decision-making process' which is lengthy and time consuming. Such lengthy process
needs to be followed in order to take rational/scientific/result oriented decisions. Decision-making process
prescribes some rules and guidelines as to how a decision should be taken / made. This involves many steps
logically arranged. It was Peter Drucker who first strongly advocated the scientific method of decision-making
in his world famous book 'The Practice of Management' published in 1955. Drucker recommended the
scientific method of decision-making which, according to him, involves the following six steps:
1. Defining / Identifying the managerial problem,

2. Analyzing the problem,
3. Developing alternative solutions,
4. Selecting the best solution out of the available alternatives,
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5. Converting the decision into action, and

6. Ensuring feedback for follow-up.
1. Identifying the Problem: Identification of the real problem before a business enterprise is the first step in
the process of decision-making. It is rightly said that a problem well-defined is a problem half-solved.
Information relevant to the problem should be gathered so that critical analysis of the problem is possible.
This is how the problem can be diagnosed. Clear distinction should be made between the problem and the
symptoms which may cloud the real issue. In brief, the manager should search the 'critical factor' at work. It
is the point at which the choice applies. Similarly, while diagnosing the real problem the manager should
consider causes and find out whether they are controllable or uncontrollable.
2. Analyzing the Problem: After defining the problem, the next step in the decision-making process is to
analyze the problem in depth. This is necessary to classify the problem in order to know who must take the
decision and who must be informed about the decision taken. Here, the following four factors should be kept
in mind:
• Futurity of the decision,

• The scope of its impact,
• Number of qualitative considerations involved, and
• Uniqueness of the decision.
3. Collecting Relevant Data: After defining the problem and analyzing its nature, the next step is to obtain
the relevant information/ data about it. There is information flood in the business world due to new
developments in the field of information technology. All available information should be utilized fully for
analysis of the problem. This brings clarity to all aspects of the problem.
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4. Developing Alternative Solutions: After the problem has been defined, diagnosed on the basis of relevant
information, the manager has to determine available alternative courses of action that could be used to solve
the problem at hand. Only realistic alternatives should be considered. It is equally important to take into
account time and cost constraints and psychological barriers that will restrict that number of alternatives. If
necessary, group participation techniques may be used while developing alternative solutions as depending
on one solution is undesirable.
5. Selecting the Best Solution: After preparing alternative solutions, the next step in the decision-making
process is to select an alternative that seems to be most rational for solving the problem. The alternative thus
selected must be communicated to those who are likely to be affected by it. Acceptance of the decision by
group members is always desirable and useful for its effective implementation.
6. Converting Decision into Action: After the selection of the best decision, the next step is to convert the
selected decision into an effective action. Without such action, the decision will remain merely a declaration
of good intentions. Here, the manager has to convert 'his decision into 'their decision' through his leadership.
For this, the subordinates should be taken in confidence and they should be convinced about the correctness
of the decision. Thereafter, the manager has to take follow-up steps for the execution of decision taken.
7. Ensuring Feedback: Feedback is the last step in the decision-making process. Here, the manager has to
make built-in arrangements to ensure feedback for continuously testing actual developments against the
expectations. It is like checking the effectiveness of follow-up measures. Feedback is possible in the form of
organized information, reports and personal observations. Feedback is necessary to decide whether the
decision already taken should be continued or be modified in the light of changed conditions.
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MANAGEMENT OF INFORMATION SYSTEM RESOURCES
CONCEPTS OF INFORMATION RESOURCE MANAGEMENT (IRM)
The term "Information Resources" incorporates three broad categories of "information stuff" essential to the
modern business enterprise: the large mass of stored data (DATA); the huge volume of application system
program code (APPLICATION SOFTWARE); and the numerous networked hardware components, along
with the operating programming that makes it all work (TECHNOLOGY). These three components, working
together, allow the enterprise to produce and use the information required to effectively operate, compete, and
manage on a daily basis. The information resources of most large enterprises represent a significant cost
factor, yet interestingly, most enterprises do not manage these critical and expensive resources like they do all
other resources. All of the "Big Five" resources (human, financial, equipment, material, and facilities) have
very effective management discipline, based on several universal resource management principles:
• Responsibility and authority must be clearly designated to manage the limited resource on behalf of the
enterprise.
• The resource is not free; limitations must be recognized, and managed so there is enough when and
where needed, but waste and unused excess are costly mistakes.
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• The resource must be controlled, and allocated so it is available when and where needed, and should
serve the highest priorities first.
• The resource must be constantly tracked: the enterprise must always know how much of the resource it
has, where it is located, what condition it is in, how to access it when needed, etc.
• The resource must be properly stored and maintained so that it is ready and usable when needed.
• The resource must be forecast - the enterprise must think and plan ahead to ensure it will have
adequate supply of the resource when needed.
So, the term "Information Resource Management" simply means changing the way typical IS/IT is
implemented within the enterprise, so that it manages the information resources (DATA, APPLICATION
SOFTWARE, and TECHNOLOGY) like any other enterprise resource - the principles of how to properly and
effectively manage it are exactly the same.
Information Systems Resources (ISR) enables the use of information systems in administrative functions so
that those functions may be conducted in the most effective way possible. Information Systems Resources
includes Networks, Hardware, Software, Data & People
People
People are essential ingredient for the successful operation of all information systems. It includes end users
also called clients are people who use information system or the information it produces.
Hardware
It includes all physical devices and materials used in information processing. Example include computer
system which consists of CPU containing microprocessors
Software
It includes all set of information processing instructions. It includes not only the set of operating instructions
called programs System Software- such as operating system e.g windows, Ubuntu e.t.c Application software-
which are programs that direct processing for a particular use of computers by end users
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Data
Data resources of information systems are typically organized, stored and accessed by a variety of data
resources technologies into database that holds processed and organized data
Network
Telecommunications technologies and networks like the internet, intranets and extranets Communication
media-includes twisted pair cable, coaxial and fibre optic cable. Network infrastructure-this generic category
emphasizes that many hardware,software and data technologies are needed to support the operations.
What are the resources an information system needs?

Discover how networks, hardware, software, data and people work together to create usable information.
Understanding Data
We've established that an information system is the combining of users, technology and processes to
complete a specific goal. A stakeholder isn't only a user but is someone who has any type of interest in a
particular process. These people utilize hardware and software, typically in a network format, to process raw
data into usable information.
Data is one piece of a record. Individually, some of your datum might be your first name, middle name, last
name, address, city, state, zip, phone number and occupation. When put together, we see a record.
Hardware and Peripherals
The components of the system you can physically touch - the system unit (tower, desktop, laptop), internal
devices and peripheral devices (keyboards and monitors) - are called hardware.
Specifics of peripheral devices are provided in many other ways, but think of them as hardware that
surrounds the system unit.
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Importance of managing ISR
Few organizations have developed a comprehensive IRM strategy. Those that have started with some of its
key processes of information audit, and information mapping cite the following benefits:
• Identifies gaps and duplication of information
• Clarifies roles and responsibilities of owners and users of information
• Provide costs saving in the procurement and handling of information
• Identifies cost/benefits of different information resources
• Actively supports management decision processes with quality information
Information Society
Definition;
An information society is a society where the creation, distribution, uses, integration and manipulation of
information is a significant economic, political, and cultural activity. The aim of the information society is to
gain competitive advantage internationally, through using information technology (IT) in a creative and
productive way. The knowledge economy is its economic counterpart, whereby wealth is created through the
economic exploitation of understanding. People who have the means to partake in this form of society are
sometimes called digital citizens. This is one of many dozen labels that have been identified to suggest that
humans are entering a new phase of society.
The markers of this rapid change may be technological, economic, occupational, spatial, cultural, or some
combination of all of these. Information society is seen as the successor to industrial society.
The characteristics of information societies
Information societies have three main characteristics.
1. Information is used as an economic resource. Organizations make greater use of information to
increase their efficiency, to stimulate innovation and to increase their effectiveness and competitive position,
often through improvements in the quality of the goods and services that they produce. There is also a trend
towards the development of more information- intensive organizations that add greater amounts of value and
thus benefit a country’s overall economy.
2. It is possible to identify greater use of information among the general public. People use
information more intensively in their activities as consumers: to inform their choices between different
products, to explore their entitlements to public services, and to take greater control over their own lives. They
also use information as citizens to exercise their civil rights and responsibilities. In addition, information
systems are being developed that will greatly extend public access to educational and cultural provision.
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3. The development of an information sector within the economy. The function of the information
sector is to satisfy the general demand for information facilities and services. A significant part of the sector is
concerned with the technological infrastructure: the networks of telecommunications and computers.
Increasingly, however, the necessity is also being recognized to develop the industry generating the
information that flows around the networks: the information-content providers. In nearly all information
societies, this information sector is growing much faster than the overall economy.
The creation of individual information societies is taking place within a much greater, international process of
change. Partly this is because the developing information systems are global, or at least international, in their
reach: satellite broadcasting systems do not recognize national boundaries; telecommunication networks
provide connections between countries and continents, while the Internet is perhaps the ultimate example of a
global system.
Both developed and developing countries are being transformed into information societies. Most of them are
concerned to use information to improve their relative competitiveness or, at least, to retain their position in an
increasingly competitive global market. The development of information societies represents a series of
attempts to achieve more general economic and social advance.
There is a concern, however, that the shift towards information societies will increase the gap between the
developed and the developing countries. To counter this, the World Bank has recently launched its
Information for Development initiative.
Challenges of Information societies
Methodological issues: defining and measuring the information society

• It is proving very difficult to define and describe in quantitative terms information societies. We have
seen that it is possible to identify some common characteristics of information societies, but it is not at
all easy to go beyond generalized definitions, such as: an information society is one in which
information is used intensively as an aspect of economic, social, cultural and political life. This
presents a major problem for statisticians who have to collect the data that governments need for
economic management.
• It is more difficult, however, to define and measure the information activity that takes place within
organizations outside the information sector.
• The matter is further complicated by the intangible nature of information. It is a good that does not
easily fit into the economists’ scheme of things. Its value can vary widely, particularly over time,
which makes it very difficult for accountants to value it for company balance sheets. Also, the value of
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information, unlike most other goods, does not decrease as it is consumed; indeed, the value may
increase as one piece of information is added to others.
• The globalization of the information sector poses further problems. Someone working in Africa can
use the Internet to obtain information about a firm operating in Europe that has been compiled by an
American-owned information company based in Switzerland using a database that was compiled by
Eurostat, the statistical arm of the European Commission. Who regulates the information? Under
which set of laws is it collected, compiled, delivered and consumed. If the user has to pay for the
information, where does the revenue go? Which governments are entitled to levy a sales tax on the
information? To which set of national accounts should the financial transactions be credited? It is
possible to arrive at answers to most of these questions, but in doing so we raise further questions
about the ability of our economic and statistical systems to cope with the changes that are taking place.
INFORMATION SYSTEMS PLANNING

Planning is primary management function which is a process of setting objectives for the future and lay out
the action necessary to reach those objectives. A plan is a specific statement of objectives and gives the links
by which a firm aims to achieve this. Many plans that are drawn up by managers are either financial,
personnel or production in nature. Planning can be strategic, tactical or operational. Planning and controlling
are related:-
Information systems planning (ISP) is a process of defining objectives for organizational computing and
identifying suitable potential information technology (IT) applicable to the company
1. Strategic Planning;
The purpose of this planning is to develop long-term objectives for the entire organization and for its
major business units and more so to specify the general strategies for acquisition of resources needed to
accomplish these objectives.
It includes the following:-
a) The establishment of broad long-term objectives for an enterprise.
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b) Accessing the company’s current position relative to these objectives and in particular
considering the threats and opportunities provided by the environment.
c) Considering alternative strategies for reaching the objectives in the competitive business
environment.
d) Outlining the organizational structure and the total resources needed to implement the plan.
e) The planning for the implementation process.
The MIS strategic plan includes

i) Statement of the objectives to be achieved.
ii) Projection of the future MIS environment.
iii) Projection of the future user environment.
iv) Projection of the future industry environment.
v) Definition and evaluation of strategic alternatives in relation to the organization strategic plan
and the selection of the preferred alternative.
vi) The establishment of the required infrastructure plans and the personnel requirements.
vii) The plan for the organizational structure of the MIS department. ix) A detailed financial
plan indicating the benefit and the cost to be incurred. x) The plan for the implementation of
the strategic plan.
2. Tactical and Operational Planning

This involves the prioritizing and laying out in detail the acquisition of hardware, software and
telecommunication equipment. This planning is expressed in terms of the budgets which specify the
resources committed to a given plan for a given project or time period. Budgets can be fixed or flexible,
and an organization can use spreadsheet as the main budgeting tool.
Planning can be TOP-DOWNS whereby the process starts with the senior management. This may ignore
what is going on at the bottom.
It can also be BOTTOM-UP where the junior staffs are encouraged to come up with their own
departmental
Define objective plans. However this may not align well with the strategic
objectives of the organization.
The Develop premises role that information systems play in the planning
process is to be used in developing plans such as
forecasting and identifying and comparing alternative
Identify alternative course of
causes of action. There is need therefore to make use of
actions
financial ratios to justify our various plans.
Choose a course of action

Formulate an implementation
plan
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Steps involved in information system planning:
i) What do we need to achieve
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Implementation and control
ii) In what environment will the plan be
carried out
iii) What are some of general ways of bridging the gap between the present and the objective
iv) Using appropriate systems such as a DSS to select a course of action
iv) How will the course of action be realized i.e. state the needed time, equipment, money,
labor etc.
v) Carryout the required activities and control the relevant premises.
Elements of Good Planning

1. VISION: This is a view of what top management has for organization. It create model that represent what
organization would look like and what it will achieve in future environment which it will operate.
2. MISSION: This is the bottom line purpose of organization i.e. what is why it exists.
3. GOALS: These are broad statement of the end results that organization intend to achieve in fulfilling its
mission.
4. OBJECTIVE: These are specific and tangible measures of result that organization want to achieve.
5. STRATEGY: A statement on how to reach the vision and achieve the objectives taking care of
environment available resources and constraints.
6. CONSENSUS AND COMMITMENT: The leadership must be dedicated to achieving the vision and
mission.
Information system planning in a Business
The next major step in planning process is the assessment of the organization from an information
management perspective.
During these steps the major processes that are necessary to accomplish the mission successfully are needed to
support the process. This can be done by the following:-
a) Development or validating business system plan

Business system planning (BSP) methodology was introduced by IBM in 1970s as a way to
incorporate information system strategy into business strategy. This methodology has other different
name such as Information System Planning (ISP), Information Requirement Studies (IRS).
Functions manager counter praising process of re-engineering will find that performing or updating a
business or information system planning studies, provides valuable time saving information that will
enhance process re-engineering. The objectives of business system planning are:-
1. To determine information system priorities
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2. Plan long level information system based on business process.

3. Manage system resources to support business objective.
4. Assign system resources to high-return projects.
5. Improve relationship between function and technique organization units.
Once the study has been conducted the following would be the benefit:-
1. Coordination of processes re-engineering plans.

2. Assurances that the date and application will be aligned with function process requirements.
3. It will be easier for the plan and resources to synchronize with implementation strategy.
The following task are performed in business system planning

i. Review /validate current business planning system architecture.
ii. Develop the business process or the organization maps.
iii. Prepare or validate information system architecture.
iv. Review and approve business system plan.
v. Identity major business process.
Review /validate current business plan

Many organizations has current business plan that should be reviewed and validated the important that this
review take organization model into account.
Identify major business process

Major process can be identified and defined from an enterprise wide perspective independent of process
reengineering effort.
The rules of identifying process include;-
i) Processes are independent of organization structures.
ii) Processes are significant to the nature and purpose of enterprise. iii) The naming convention
for process are verb-name for e.g. Design-project, provide spare parts. iv) Process
redundancy is to be avoided.
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Develop process plan/organization matrix

This is a chart or map that show the relationship between the business process sand various organization
department.
Functional client process Plan Engineer Construct Operate

division division division division
Conduct study D
Plan project D M M
Design project M D M
Construct project M D M
Operate project D
Maintain project M M D
D – Decision making primary responsibility

M – Major involvements.
Prepare and validate architecture

This area involves preparation and validation of the following:-
i) Process and data entity ii) Process
/automated information system.
iii) The business strategy /
process iv) Business strategy
/organization v) Business strategy
/data item.
Its importance to conduct the above so as;-

1. To understand how data is showed throughout the organization and between business processes.
2. To illustrate the process and information system interdependence.
3. To determine the relative important of data with respect to business strategy.
4. To identity organization responsibility and ensure optimum participation in the business process
reengineering projects.
5. Understanding the legacy and migration system impact in process re-engineering effort.
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Prepare review and approve business systems

plan A good plan report should have the following
setting; 1. Executive summary
2. Background section explaining objectives of studies and the methods used.
3. Studies perceptive highlighting the objective and expressed in strategic plans
4. Findings with respect to IS needs, requirements and opportunities.
5. Potential constraints based on the information system infrastructure that may hinder process
reengineering effort and suggested means of dealing with these constraints.
6. Information system strategy and recommendation based on implication of strategic plan.
7. Appendices of details architecture including application protocols and data structure.
The business system plan should be reviewed and approved by all functional managers in organization, once
approved the plan is then passed into the next step that is process re-engineering.
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INFORMATION SYSTEM PROJECT MANAGEMENT

Meaning and importance of information system project management
Project Management is a set of principles, methods and techniques for effective planning of objective-
oriented work, thereby establishing a sound basis for effective scheduling, controlling and re-planning in the
management of programs and projects.
In other words, it provides an organization with powerful tools that improve the organization's ability to
plan, organize, implement and control its activities and the ways it uses its people and resources.
A project is a non-repetitive one-of-a-kind activity normally with discrete time, financial and technical
performance goals. Normally a complex effort, usually less than 3 years in duration and it is made up of
interrelated tasks performed by various organizations.
The project management tools and principles provide the means for;
 project breakdown into tasks and sub-tasks
 finding interdependencies between the tasks
 allocating resources, human and material and smoothing resources
 estimation for total project duration and budget
 monitoring more efficiently project progress
Project management ideas are equally applicable to small as well as very large projects (with small and large
number of tasks). However, the formal tools used are more appropriate for rather large projects.
Information system project management techniques
Project Management Tools
There are many tools available to assist with accomplishing the tasks and executing the responsibilities. Some
require a computer with supporting software, while others can be used manually. Project managers should
choose a project management tool that best suits their management style. No one tool addresses all project
management needs. Program Evaluation Review Technique (PERT) and Gantt Charts are two of the most
commonly used project management tools and are described below
PERT is a planning and control tool used for defining and controlling the tasks necessary to complete a
project. PERT charts and Critical Path Method (CPM) charts are often used interchangeably; the only
difference is how task times are computed. Both charts display the total project with all scheduled tasks shown
in sequence. The displayed tasks show which ones are in parallel, those tasks that can be performed at the
same time. A graphic representation called a "Project Network" or "CPM Diagram" is used to portray
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graphically the interrelationships of the elements of a project and to show the order in which the activities
must be performed.
PERT planning involves the following steps.

1. Identify the specific activities and milestones. The activities are the tasks of the project. The milestones
are the events that mark the beginning and the end of one or more activities.
2. Determine the proper sequence of activities. This step may be combined with #1 above since the
activity sequence is evident for some tasks. Other tasks may require some analysis to determine the
exact order in which they should be performed.
3. Construct a network diagram. Using the activity sequence information, a network diagram can be
drawn showing the sequence of the successive and parallel activities. Arrowed lines represent the
activities and circles or "bubbles" represent milestones.
4. Estimate the time required for each activity. Weeks are a commonly used unit of time for activity
completion, but any consistent unit of time can be used. A distinguishing feature of PERT is it's ability
to deal with uncertainty in activity completion times. For each activity, the model usually includes
three time estimates:
o Optimistic time - the shortest time in which the activity can be completed.
o Most likely time - the completion time having the highest probability.
o Pessimistic time - the longest time that an activity may take.
From this, the expected time for each activity can be calculated using the following weighted average:
Expected Time = (Optimistic + 4 x Most Likely + Pessimistic) / 6
This helps to bias time estimates away from the unrealistically short timescales normally assumed.
5. Determine the critical path. The critical path is determined by adding the times for the activities in
each sequence and determining the longest path in the project. The critical path determines the total
calendar time required for the project. The amount of time that a non-critical path activity can be
delayed without delaying the project is referred to as slack time.
If the critical path is not immediately obvious, it may be helpful to determine the following four times
for each activity:
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o ES - Earliest Start time

o EF - Earliest Finish
time o LS - Latest Start
time o LF - Latest Finish
time These
These times are calculated using the expected time for the relevant activities. The earliest start and
finish times of each activity are determined by working forward through the network and
determining the earliest time at which an activity can start and finish considering its predecessor
activities. The latest start and finish times are the latest times that an activity can start and finish
without delaying the project. LS and LF are found by working backward through the network. The
difference in the latest and earliest finish of each activity is that activity's slack. The critical path then
is the path through the network in which none of the activities have slack.
6. Update the PERT chart as the project progresses. As the project unfolds, the estimated times can
be replaced with actual times. In cases where there are delays, additional resources may be needed to
stay on schedule and the PERT chart may be modified to reflect the new situation. An example of a
PERT chart is provided below:
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Benefits to using a PERT chart or the Critical Path Method include.
a Improved planning and scheduling of activities.

b Improved forecasting of resource requirements.
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c Identification of repetitive planning patterns which can be followed in other projects, thus
simplifying the planning process.
d Ability to see and thus reschedule activities to reflect inter-project dependencies and resource
limitations following know priority rules.
e It also provides the following: expected project completion time, probability of completion
before a specified date, the critical path activities that impact completion time, the activities that
have slack time and that can lend resources to critical path activities, and activity start and end
dates.
Gantt charts
Gantt charts are used to show calendar time task assignments in days, weeks or months. The tool uses
graphic representations to show start, elapsed, and completion times of each task within a project. Gantt
charts are ideal for tracking progress. The number of days actually required to complete a task that reaches
a milestone can be compared with the planned or estimated number. The actual workdays, from actual
start to actual finish, are plotted below the scheduled days. This information helps target potential timeline
slippage or failure points. These charts serve as a valuable budgeting tool.
Sign of a failing information system project
 Lack of User Input
 Incomplete Requirements & Specifications
 Changing Requirements & Specifications
 Lack of Executive Support
 Technical Incompetence
Causes of information system project failure

• Lack of stakeholder/user input
• Incomplete and/or vaguely defined requirements or specifications
• Changing requirements or specifications
• Lack of executive support
• Insufficient planning
• Underestimated time and/or resources allocated for design, development, quality assurance, and/or quality
control
• Technological incompetence
• Insufficient resources
• Unrealistic expectations
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• Unclear objectives
• Unrealistic timeframes
• New or untested technology
Explaining control measures and technique of a failing information system project
 Greater top management support

 More commitment from users
 More power and decisions making authority
 Greater financial control and flexibility
 Greater Control over staff resources
 Commitment to requirements and scope once specified
 More project management training
 Commitment to a stable project management method
 Alignment of IT project initiatives to business strategy
 Greater understanding of project management on the part of top management, project boards and clients
 Greater realism in setting targets. Several respondents railed against imposed rather than planned targets
and deadlines
 Establishment of a supportive project/programme office.
INFORMATION SYSTEMS ACQUISITION
An information system acquisition is the process of selecting and purchasing the hardware, software, and
services needed to create and maintain an information system. This process can be divided into three main
phases: planning, procurement, and implementation.
In the planning phase, organizations first identify their needs and then determine what type of system
would best meet those needs. They also create a budget and timeline for the project.
In the procurement phase, organizations solicit bids from vendors and select the vendor that will provide the
best value for the price.
In the implementation phase, organizations install the new system and train employees on how to use it.
The information system acquisition process is a critical part of ensuring that an organization has the right
tools in place to meet its information needs. By carefully planning and executing each phase of the process,
organizations can ensure that they get the best value for their investment and that the new system meets
their needs
Factors influencing information systems acquisition

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1: Software Sustainability
Sustainability is a key component when assessing software. It speaks to both the stability of the software and
the vendor behind it. Companies seeking a I.S(Information System) application should be mindful that there
are hundreds of applications in the marketplace branded as the same information system the company is
looking for. Sometimes, it seems new vendor offerings appear daily. The technology employed provides
insight into how viable a product may be. Key questions to ask include: Is the product a “one-off”? Is it open
source? Can it support new platforms, such as Android, Apple and others?
2: System Features
Information System can provide a variety of features. Clearly, the core features encompass areas such as:
inventory management, lot or batch tracking, order processing functionality and product movement tracking.
Beyond these offerings, the application should run on multiple platforms.
3: Cost
Cost often is a more influential factor in smaller companies seeking Information System than in larger firms.
Still, the benefits a system provides should always carry more weight than the price tag.
4: Long-Term Supportability
Most experts estimate that annual system support costs average between 15 and 18 percent of the system
acquisition cost. Most companies are comfortable with this estimate. Cost is not the most important factor,
however. When it comes to supporting your firm, the more important questions are: Does the system vendor
want to learn about and understand my business? How dedicated is that provider to assuring that the system
keeps pace with my business as it grows and overall advancements in technology?
Methods for acquiring Information System
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1. SDLC: This is a methodology for developing an information system that partitions the system
development process into formal stages that must be completed sequentially with a very formal division
of labor between the user and the specialists.
The characteristics of this method are; i.
The development is in stage.
ii. Its advantages for large organizational systems e.g. T.P.S.
iii. Supports project planning and control organization of team development effort and the
production of a maintainable system.
iv. Relatively inflexible with respect to the user requirements that change during the
development cycle.
v. There is vigorous documentation.
vi. It can be costly and time consuming.
2. Prototyping: This is the provision of a model that is given to the users for them to clarify their
requirements and gain a measure of confidence in the general approach. In some cases the prototype is
upgraded through several iterations, thoroughly undergoing testing and documentation. In some cases
the prototype may be thrown away once the user requirements have been captured.
Characteristics
1. Development by gradually modifying an initial prototype based on feedback from the users.
2. It’s a relatively fast development with early availability of the first model of the system (the first
version).
3. Its advantageous when user requirements are uncertain.
4. It works well for project that are limited in size and for systems that are being computerized for the
first time. Typical application of this is the development of DSS.
5. Unless precautions are taken it may evolve into a quick and dirty system hampering maintenance.
3. Internal development via end-user computing;-

This is the development of I.S by end-user with little or no formal assistance from technical personnel.
Characteristics
i. It leads to increased user satisfaction and involvement.
ii. It reduces applications back-log (this is the queue of systems awaiting implementation)
iii. It requires tools such as the fourth generation languages which are user friendly.
iv. It leads to improve requirements determination.
v. It requires the involvement of information centers /helpdesk /hotlines.
Information Centres /HELP DESK
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This concept of an organization centre was developed in Canada in 1974 by IBM to support end-user. Its part
and parcel of the corporate MIS function and its usually manned by technical people with extensive
knowledge of the business. It has the following functions.
a) Assisting the end-users in evaluating, selecting, installing and maintaining hardware and software i.e.
‘they help you choose the best’.
b) Provide assistance to end-users in accessing the data resource
c) It provides guidelines for system development and provides also modalities for preparing a prototype
using a 4th Generation language.
d) It supports all the installed software’s within the organization.
e) Acts as a nit to provide standards of end-user systems.
f) It also provides a hotline or helpdesk in giving assistance to users. If thus help keeping track for the
request and offer trouble shooting techniques.
g) Assist in setting standard and supports internal auditors in auditing the systems.
h) It trains end-users in operating systems that are to be introduced in the organization.
4. Off-the-shelf package
This is actually the purchase of a license to use the package. At times these packages may have to be
tuned to fit the needs of the user company. When purchasing an offthe-shelf package, requests for
proposals are sent to potential suppliers. This document outlines the requirements of the organization
and asks questions as to how the vendor systems may satisfy them.
The selection is based on the characteristics of the software package and the requirements that the user
organization wants.
Characteristics
i. They are more reliable and have better documentation than internally produced systems. ii. They often
need to adjust work within the organization to fit the needs of the package. iii. It may cost the company
to forego competitive advantages, if this was done internally. iv. It satisfies most user requirements due
to the fact that it has been developed by experts.
v. Due to its mass production its relatively cheaper to buyer and that the implementation is quick.
5. Outsourcing
This is the hiring of external firms known as the software houses or system integrators to develop and
install systems that can easily be executed. They also perform other services i.e. developing strategic
plans to carryout organizational functions. In the rather case we refer to this as facility management.
Outsourcing is necessary and appropriate in the following circumstances:1. When you want to reduce
development cost.
2. Relief the firm from the burden of developing the system.
3. When the firms existing information systems capabilities are limited, ineffective or technical inferior.
4. When the company needs to off-load some of pending workloads from the I.S. department.
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Problems of outsourcing
1. The firm may lose control over the I.S function i.e. No control over the type of software or hardware
being used.
2. There is total vendor dependency i.e. the firm may have to pay whatever the vendor charges and
accept whatever he does.
3. If the firm lacks expertise to negotiate a sound contractor, this dependency may eventually lead to
loose of control over the technical direction.
4. Trade secrets may leak to outsiders and the company may lose competitive advantage.
Solutions to outsourcing problems

1. Organizations should manage the outsources as they would manage this over information systems
departments by setting priorities and targets to be met by the outsourced company.
2. Establishment of criteria to evaluate the outsourcing vendor.
3. Designing outsourcing contracts carefully so that outsourcing functions can be adjusted if the nature
of the business changes.
4. A climate of trust should exist between both parties i.e. they should be in partnership.
Agents involved in MIS projects

Development of information systems will involve the following group:-
1. End-user End-User
2. M.I.S Developer
3. Management
Developers Management
END-USERS:- It’s the function of the end-user to prepare their information requirement and to ascertain the
working environment of the system developed by making sure that the system interfaces are proper.
M.I.S DEVELOPERS: - Their function is to implement system that satisfy user requirement as well as the
objectives of the management by establishing that they have adequate resources, develop a quality system
and meet the development constraints.
MANAGEMENT: - It’s the function of the management to control and allocate resources that go in the
development of the system and to approve the various stages in the process.
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ROLE OF INFORMATION SYSTEMS (IS) IN ORGANIZATION
Information Systems and Business Strategy

Strategic information systems are computer systems at any level of the organization that change the goals,
processes, services or environmental relationship to help the organization gain a competitive edge.
They are different from strategic level systems that focus on the long-term decision making. Strategic
information systems reach all levels of the organization such that they take care of all the planning aspects of
a given business firm.
Strategic Level and Information Technology
To key question at the business level of strategy is how can we compete effectively in this particular market?
The most common strategies at these levels are:1. How to become the lowest cost producer.
2. How to differentiate your products or services form those of the competitors.
3. How to change the scope of the competition by either encouraging the markets to the global level or
by narrowing such that the company focuses on a small niche not served by your competitors.
4. By establishing linkages with customers and suppliers.
No. Strategies Models IT techniques
Strategy level
1. Industry e.g. hotel Cooperation v/s competition,
services licensing and standard.
- Competitive forces
model -Electronic transactions -
(5forces) or porter Communication networks.
5 forces model - -Inter organization system and
Network economics information partnership.
2. Firm e.g Core competence
- Synergy (cooperation of 2
Unilever companies - Core -Knowledge systems and -
competences Organizational wide system
3. Business -Low cost producer - Value chain model (9
-Product differentiation forces
-Market differentiation model)
- Locking customer -Efficient customer response
/suppliers -Data mining
- Supply management -IT
based products and services
-Inter organization systems.
Application Of IS and Competitive Advantage in An Organization
The value chain model:
Support Organization infrastructure
activities Human Resource Management
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Technology
Procurement
Primary Inbound Operations Outbound Sales and Servicin g
activities logistics logistics marketin g
This model highlights the primary and support activities that add a margil of value to products or services
where information systems can be best applied to achieve competitive advantage.
Primary activities would include:
Inbound logistics
• Operations
• Outbound logistics
• Sales and marketing
• Servicing
Support activities make to delivery of the primary activities of a firm possible e.g. the organization
infrastructure, human resource management, technology and procurement. Competitive advantages when a
company provides more value to a customer or when they provide the same value at a lower cost. These can
be achieved in the following way.
(i) A business can save money in the primary activities by having suppliers stick to fight delivery
schedules.
(ii) A company can make use of technologies such as CAD/CAM thus reducing the cost of producing
better goods in a manufacturing firm.
(iii) By having electronic scheduling and massaging systems or making use of office automation
technology to improve the company image.
(iv) By making use of information system in sales and marketing a company can explore the
capabilities existing on the internet.
Information System Product and Services

Firms can use 1.5 to differentiate their products and create brand loyalty by developing a new and unique
product or service that isn’t easily duplicated by the competitors. To following products and services were
created or the basis of information system.
No. New product or Underlying technology
service
1. Online Banking Private communication networks and internet
2. Cash management systems Enterprise wide customer accounting systems
3. Global and national airline, Worldwide telecommunication based reservation

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hotel and reservation systems.

systems
4. Fedex and other overnight Delivery information acquisition device (DIAD). This
package dealing systems is used for capturing information of customers and
tracking connected to the headquarters.
5. Voice mails systems Company and network wide digital communication

system.
6. Automated teller machines Computerized accounting systems.
(A.T.M)
There are four competitive strategies i.e.

i) Market differentiation /Market focus
This is when a company is able to identify the segment of a market (Niche) which it proceeds to serve
in a supervisor version. The wide may be a customer segment, a narrowly defined product or a
geographical region e.g. family T.V.
It relies on an extensive customer database and demographic data i.e. data related to population, as a
potential tool in the niche (market identification).
ii) Cost focus /Lowest cost producer.

If a company serves a narrow market segment with a product or services which it offers at a
significantly low cost than its competitors then this is the cost focus strategy.
Strategic information systems change the organization, its products, services and operating
procedures.
iii) Product differentiation

When a company aims to distinguish its products or services from what offered by the competitors.
The distinguishing features may be the superior attributes of the product itself e.g. Microsoft.
iv) Locking of customers /Suppliers

With strategy organization enhance or systems that make it difficult e.g. suppliers and customers to
leave its supply chain e.g. mobile banking or banking direct where the Co-operative Bank and KCB
ensure the continued loyalty of their services.
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INFORMATION SYSTEMS MAINTENANCE

Meaning and importance of information system maintenance
Systems maintenance involves cleaning, changing and enhancing the systems to make it more useful in
achieving users and organizational goals.
Maintenance is the process of modifying an information system to continually satisfy organizational and user
requirements. There is a vast difference between hardware and software maintenance in costs as well as in
objectives. This means changing the application to adapt to a new hardware or software environment.
In some cases an organization will encounter major problems that will involve redesigning the entire system
development process.
Importance of IS maintenance
1. Detect issues early, before they become problems
Whether the computer is new or old problems can pop up at any time. By using regular IT servicing one can get
the jump on problems and make arrangements so that the business isn’t impacted. Using regular IT servicing
one can also help reduce IT support costs by fixing during scheduled maintenance windows where other work is
scheduled.
2. Prevent against viruses and malware
Viruses and malware are a pain to any business, virus writers actively seek to disrupt the business and access
files the network. When the computer is infected a number of symptoms may be felt, from annoying slowdowns
to popup messages or contacts emails about strange email you apparently sent them. If your IT system is
compromised the business could be used as a launching pad to infect other businesses, which can have
consequences as companies start black listing your email address.
If antivirus software is kept up to date then it greatly reduces the chance of a virus infection as commonly
known IT loopholes are closed to hackers and virus writers.
3. Speed up the Computer
Over time, files that are stored on the computer can become disorganized and fragmented, this results in slow
loading times and delayed access to programs and files. By regularly running speed checks and smart
optimization, we can speed up the computers loading times and take care of those annoying pauses when one is
busy and need quick and efficient access to the files and software.
4. Keep Antivirus Software Up-to-date
Antivirus software is vital and every PC should be protected but having antivirus software installed isn’t the end
of your IT security – it needs to be up-to-date and working as intended .
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5. Maximize Software Efficiency

Computers age and over time they start to slow down – software packages that performed quickly and
efficiently to begin with, can become sluggish and have a negative impact on productivity. Because this
slowdown has occurred over many years, the computer user may have grown used to the issue and may think
that it is normal. It's not normal. Regular checks should be done to ensure that the software is running to its
maximum efficiency – often the answer is just a slight hardware modification or a quick clean out of programs
that are no longer needed.
Reasons for maintenance

Once a program is written its likely to require ongoing maintenance. To some extent it may require tune-ups
and repairs. Some of the major reasons for program maintenance are:-
i) Changes in business processes.
ii) New requests from stakeholders, users and managers.
iii) Bugs or errors in the program.
iv) Technical and software problems.
v) Corporate mergers and acquisitions e.g. Glaxo Smithkline, HP-Compaq.
vi) Government regulations
vii) Changes in the operating or hardware on which the applications runs.
When it comes to making necessary changes, most companies modify their existing programs instead of
developing new ones. i.e. if new system needs are identified, then the old programs are repeatedly modified
to meet the even changing needs.
Over a period of time these modifications tend to interfere with the system overall structure, reducing its
efficiency and making it more difficult to modify future cases.
Types of maintenance
a) Adaptive maintenance refers to the changes made to a system to evolve its functionality to changing
business needs or technologies.
b) Corrective maintenance refers to changes made to a system to repair flaws in its design, coding, or
implementation.
c) Perfective maintenance refers to changes made to a system to add new features or to improve performance.
d) Preventive maintenance refers to changes made to a system to avoid possible future problems.
e) Predictive Maintenance: It pursues constantly know and report the status and operational capacity of the
installations by knowing the values of certain variables, which represent such state and operational ability.
To apply this maintenance, it is necessary to identify physical variables (temperature, vibration, power
consumption, etc.). Which variation is indicative of problems that may be appearing on the equipment. This
maintenance it is the most technical, since it requires advanced technical resources, and at times of strong
mathematical, physical and / or technical knowledge.
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f) Zero Hours Maintenance (Overhaul): The set of tasks whose goal is to review the equipment at scheduled
intervals before appearing any failure, either when the reliability of the equipment has decreased
considerably so it is risky to make forecasts of production capacity . This review is based on leaving the
equipment to zero hours of operation, that is, as if the equipment were new. These reviews will replace or
repair all items subject to wear. The aim is to ensure, with high probability, a good working time fixed in
advance.
g) Periodic maintenance (Time Based Maintenance TBM): the basic maintenance of equipment made by
the users of it. It consists of a series of elementary tasks (data collections, visual inspections, cleaning,
lubrication, retightening screws,…) for which no extensive training is necessary, but perhaps only a brief
training. This type of maintenance is the based on TPM (Total Productive Maintenance).
Systems Maintenance Techniques
1. Emergency Maintenance:
This is due to the malfunction or “bug” in the system where maintenance is urgent and usually calls for
immediate attention.
The malfunction is because it has not been tested completely, even though the system must have run perfectly
for months or even years. The information system user usually identifies the malfunction. Then a team of
analysts and programmers should rectify it if the malfunction is in computer program and caused by a system
input.
2. Routine Maintenance:
Routine Maintenance is required to keep systems performance in order as it reflects the organization
environment. The activities may be rewriting manual procedures, conducting training sessions, altering report
formats and contents and forming new processing logic for computer programs.
3. Special Reporting Requests:
These are periodic requests for tactical and strategic management information, which does not come under
routine production. These special requests can be satisfied directly by a user with a database management
system and the analyst assists in preparing the necessary procedures for the request, e.g. A special report on
selected products during a sales promotion or a special analysis of a particular vendor’s delivery performance.
Problems of Systems Maintenance:

The system always undergoes continued modification due to various reasons. The application systems need
changes and sometimes it takes away half or more of an organization’s allocated resources and time. Thus,
many organizations have adopted the principle of setting a budget for maintenance and perform only the highest
priority maintenance work.
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The personnel working in the information system do not wish to spend most of their time maintaining or trying
to patch up systems designed and implemented years ago. In some organizations, the programmers are rotated
once in a year.
By this the programmers will have new assignments, the experience base of the personnel is broadened, better
ideas are being proposed and evaluation of the personnel and the performance of two or more persons and the
several project leaders can be compared.
1. Maintenance programming causes more failure than the developing programming. If the maintenance
programmer is not familiar with the program, the management should assign complex maintenance
problems to the most knowledgeable people to avoid failure.
2. If the documentation is poor and changes will result in serious failure and to overcome this, the
management is responsible to ensure that all programs are properly documented.
3. Extra training cost will go up maintaining for older applications that use outdated programming languages
that run under primitive operating systems. The situations like facing inadequate documentation, a variety of
incompatible hardware/software configurations, outdated equipment and procedures will give rise to
manageable conditions with severe problems of maintenance that continue indefinitely.
Maintenance Costs
Several factors influence maintenance costs. Three of these are very important:
 defects,
 customers, and
 Documentation quality.
1. The number of latent defects refers to the number of unknown errors existing in the system after it is
installed. Because corrective maintenance accounts for most maintenance activity, the number of latent
defects in a system influences most of the costs associated with maintaining a system. If there are no errors
in the system after it is installed, then maintenance costs will be relatively low. If there are a large number of
defects in the system when it is installed, maintenance costs will likely be high.
2. A second factor influencing maintenance costs is the number of customers for a given system. In general,
the greater the number of customers, the greater the maintenance costs.
3. A third major contributing factor to maintenance costs is the quality of system documentation. Without
quality documentation, maintenance efforts can increase exponentially.
Techniques of maintaining an information system
Software companies and many other organizations use the following 4 categories to signify the amount of
change. These would include;- 1. Slip steam maintenance
2. Patch
3. New release
4. A version
A Slip Stream
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This is a minor upgrade – Typically a code adjustment or a minor bug fix, not worthy announcement. It usually
requires recompiling of the code and in so doing it may create entire new bugs. These practice accounts for
the various variations that we notice on a software that is running or similar machine.
A Patch
This is a minor change to correct a problem. It’s usually an addition to an existing program i.e. the
programming code representing the system enhancement fix is usually patched into or added to the existing
system code e.g. Microsoft releases patches which they call service packs to correct the bugs that were in the
internet explorer and Windows 95.
In correcting the problem this opened a way for hackers and unscrupulous website operators to read the
contents of the files of the users.
A New Release
Is a significant program change that often requires changes in the documentation of the software?
A new version
Is a major program change that brings many new features?
2.
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ROLE OF ICT IN ORGANIZATIONAL CHANGE
Organization Change
Organizations in both the public and private sectors are faced with an apparently ever-increasing rate of change
and must learn to cope with this problem. Change occurs in many ways: competitive pressures (e.g. a
competitor introduces a new model or reduces prices), legislative changes (e.g. the introduction of the National
Curriculum in UK schools), the operating environment (e.g. the challenge of online share dealing to traditional
stock brokers), changing client/consumer preferences (e.g. the desire for more leisure or more environmentally
friendly products), the introduction of new technology (e.g. computer networks, third generation telephones)
and many more. In addition to dealing with the change itself, management must cope with the resistance to
change often encountered from staff, clients, customers or trade unions.
Organizations do not automatically adjust to change. Adaptation only occurs as a result of management actions.
These may cause changes in the way the organization takes decisions, in the processes used, in the services or
products, or in the structure of the organization itself. Only one thing is certain: the organization that clings to
rigid, traditional methods in the midst of rapid change will be an unsuccessful organization.
Ways to manage change

Many valuable pointers to the way more successful organizations manage change and innovation have come
from studies by Moss Kanter, Peters and Waterman, and others. Moss Kanter found that organizations that
adopt an integrated approach to innovation did it more successfully than those that adopted a more piecemeal
approach, which she termed 'segmentalist'. To overcome resistance to change and inertia she suggested the
following actions:
• Top management must support innovation in a personal way and must think interactively.
• The organization must be made 'flatter', i.e. unnecessary layers of hierarchy should be removed and staff
'empowered' by authority being pushed downwards.
• Communication should be improved, especially across the organization, and staff mobility encouraged.
• Achievements should be highlighted and a culture of pride cultivated.
• Company plans should be made known earlier and more widely to enable staff to make suggestions and
contribute before decisions are made.
• An alternative way of considering the problem of resistance to change is the force field framework first
suggested by Lewin and developed by other workers such as laslen and Platts.
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• Lewin suggested that change, or the lack of it, is caused by the interaction of two sets of opposing
forces. One set is termed the driving forces i.e. the forces attempting to bring about change, the other set
being termed restraining forces which act in the opposite direction and seek to maintain the status quo.
Impact of Iformation System as an agent of change in an Organisation
Information systems have become integral, online, interactive tools deeply i nvolved in the minute-to-minute
operations and decision making of large organizations. Over the past decade, information systems have
fundamentally altered the economics of organizations and greatly increased the possibilities for organizing
work. Theories and concepts from economics and sociology help us understand the changes brought about by
IT.
1. Economic Impacts From the point of view of economics, IT changes both the relative costs of capital and
the costs of information. Information systems technology can be viewed as a factor of production that can be
substituted for traditional capital and labor. As the cost of information technology decreases, it is substituted for
labor, which historically has been a rising cost. Hence, information technology should result in a decline in the
number of middle managers and clerical workers as information technology substitutes for their labor. As the
cost of information technology decreases, it also substitutes for other forms of capital such as buildings and
machinery, which remain relatively expensive. Hence, over time we should expect managers to increase their
investments in IT because of its declining cost relative to other capital investments.IT also affects the cost and
quality of information and changes the economics of information. Information technology helps firms contract
in size because it can reduce transaction costs—the costs incurred when a firm buys on the marketplace what it
cannot make itself. According to transaction cost theory, firms and individuals seek to economize on transaction
costs, much as they do on production costs. Using markets is expensive because of costs such as locating and
communicating with distant suppliers, monitoring contract compliance, buying insurance, obtaining information
on products, and so forth (Coase, 1937; Williamson, 1985). Traditionally, firms have tried to reduce transaction
costs through vertical integration, by getting bigger, hiring more employees, and buying their own suppliers and
distributors, as both General Motors and Ford used to do. Information technology, especially the use of
networks, can help firms lower the cost of market participation (transaction costs), making it worthwhile for
firms to contract with external suppliers instead of using internal sources. As a result, firms can shrink in size
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(numbers of employees) because it is far less expensive to outsource work to a competitive marketplace rather
than hire employees. For instance, by using computer links to external suppliers, automakers such as Chrysler,
Toyota, and Honda can achieve economies by obtaining more than 70 percent of their parts from the outside.
Information systems make it possible for companies such as Apple Cisco Systems and Dell Inc. to outsource
assembly of iPhones to contract manufacturers such as Foxconn instead of making their products themselves.
2. Organizational and Behavioral Impacts Theories based in the sociology of complex organizations also
provide some understanding about how and why firms change with the implementation of new IT applications.
Behavioral researchers have theorized that information technology facilitates flattening of hierarchies by
broadening the distribution of information to empower lower-level employees and increase management
efficiency (see Figure 3.6). IT pushes decision-making rights lower in the organization because lower-level
employees receive the information they need to make decisions without supervision. (This empowerment is also
possible because of higher educational levels among the workforce, which give employees more capabilities to
make intelligent decisions.) Because managers now receive so much more accurate information on time, they
become much faster at making decisions, so fewer managers are required. Management costs decline as a
percentage of revenues, and the hierarchy becomes much more efficient. These changes mean that the
management span of control has also been broadened, enabling high-level managers to manage and control
more workers spread over greater distances. Many companies have eliminated thousands of middle managers as
a result of these changes.
3. The Internet and Organizations The Internet, especially the World Wide Web, has an important impact on
the relationships between many firms and external entities and even on the organization of business processes
inside a firm. The Internet increases the accessibility, storage, and distribution of information and knowledge
for organizations. In essence, the Internet is capable of dramatically lowering the transaction and agency costs
facing most organizations. For instance, a global sales force can receive nearly instant product price information
updates using the web or instructions from management sent by e-mail or text messaging on smartphones or
mobile laptops. Vendors of some large retailers can access retailers’ internal websites directly to find up-to-the-
minute sales information and to initiate replenishment orders instantly. Businesses are rapidly rebuilding some
of their key business processes based on Internet technology and making this technology a key component of
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their IT infrastructures. If prior networking is any guide, one result will be simpler business processes, fewer
employees, and flatter organizations than in the past.
4. Implications for the Design and Understanding of Information Systems To deliver genuine benefits,
information systems must be built with a clear understanding of the organization in which they will be used. In
our experience, the central organizational factors to consider when planning a new system are the following:
 The environment in which the organization must function
 The structure of the organization: hierarchy, specialization, routines, and business processes
 The organization’s culture and politics
 The type of organization and its style of leadership
 The principal interest groups affected by the system and the attitudes of workers who will be using the
system
Considerations for implementing change programme in an organization
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1. Put people first Successful change management prioritizes people. People fuel change and sustain its
momentum. Change initiatives fail when the people involved don’t understand, believe in or engage in the
change. Leaders make change easier when they engage employees in the change. Leaders accomplish this
through proactive change management communication that creates a desire to change across the
workforce. This aligns with the Prosci change methodology, Beehive’s change model of choice. Prosci’s
methodology is based on more than 20 years of research, with 45,000 people trained and certified
globally, making it a strong option for global businesses. Change initiatives will fail if people don’t believe
in the change and aren’t mobilized by others to act. Change Management: The essential guide to
transformational growth. Download this guide.
2. Work with a change management model Leaders are up against company culture, organizational
momentum and human psychology when enacting change. To make change happen, they need the right
tools to guide them. Change management models help leaders connect business strategy to action, which
increases the likelihood of success. There are a variety of change management models from which to
choose (e.g., Prosci’s ADKAR model, Lewin’s Change Management Model, Kotter’s Change Management
Model). Each model varies, but all follow similar core tenants of identifying needs and planning for and
implementing change. Prosci’s methodology is Beehive’s change management model of choice because it:
1) blends the psychology of individual change with organizational change, 2) is globally backed with more
than 20 years of research and 3) clearly addresses the role of communication in change.
3. Empower employees through communication Communication is an essential part of effectively

managing organizational change. A vision for change is only as powerful as the communication that
supports it. Effective change management communication provides clarity for why the change is needed
and mobilizes employees with a sense of urgency for the change. Companies fail to drive meaningful
change when they fail to communicate. Change management communication isn’t a one-time transfer of
information. It requires commitment, clarity and consistency. It should engage employees through two-
way communication methods like surveys, focus groups and informal feedback collection. When
leadership involves employees, they feel valued. When employees feel valued, they are more likely to
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embrace change and participate in making it happen. Two-way communication also helps leaders identify
barriers to change before they become a problem. Proactively identifying barriers can enable the
organization to respond to and dissolve issues that create change resistance.
4. Activate leadership A recent Prosci survey cited “active and visible executive sponsorship” as the top
reason change initiatives succeed. Leadership’s impact on change is well-understood. The problem is that
many leaders don’t understand the vital role they play in change. Educate leaders on their roles, and you’ll
enable them to advance change successfully. Leaders: are responsible for achieving change goals from
start to finish. help the organization understand and interpret what the change means for their teams, the
organization and the marketplace. ensure those who enable organizational change stay actively involved.
keep the train on the tracks and are ready to switch directions, choose a new path or create a new
approach if necessary.
5. Make change compelling and exciting Employees can better understand the rationale behind a change
when organizations prioritize purposeful, clear and consistent communication. This targeted
communication strategy provides the context to understand the why, what and so what of the change.
Effective communication answers the most important question people are thinking: What does this mean
to me; how will it impact my work? With a deeper, clearer understanding of the change, employees are
much more likely to ask, “How can I help?” The shift from rote compliance to true engagement and belief
is powerful. Strong employee support deters change resistance that could hold the organization back.
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6. Pay attention to high and low points in momentum There will be both high and low points during
change initiatives. Leaders can proactively manage and leverage these points in time. During the high
points of change, leaders should celebrate wins to fuel momentum. At the low points, leaders can reset
communication strategies to listen to employee input and build trust and support. Being proactive helps
leaders manage momentum for the greatest success.
7. Don’t ignore resistance Change resistance is poisonous to an organization’s transformation. Resistance

is much easier to counter when it’s identified early. Leaders should pay attention to the signs of change
resistance, including inaction, procrastination, withholding information and the spread of rumors.
Communication is the key to identifying resistance. Create feedback loops with employees, like surveys,
feedback channels and input sessions to proactively identify signs of resistance, then take fast action.
Change is the lifeblood of successful, growing organizations, and the heart of change is people. Leaders
position themselves and their companies for managing organizational change effectively when they
proactively engage employees and ensure communication is clear, consistent and transparent.
INFORMATION SYSTEM ETHICS
Ethics refers to the principles of rights and wrong that can be used by individuals acting as free moral agents
to make choices to guide their behavior. Information systems raise new ethical questions for both individuals
and society because they create opportunities for intense social change and they threaten existing distribution
of power, money, rights and obligations. These issues have 5 dimensions.
1. Information rights and obligations – what rights do individuals and organization posses with respect to
information about themselves?
What can they protect?
What obligation do individuals and organization have a conceiving this information?
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2. Property rights – How will traditional property rights be protected in a digital society in which trading
and accounting for ownership is difficult and ignoring such property rights is it so easy.
3. Accountability and control – who will be held responsible, accountable and reliable for the harm done
to individuals and their property rights.
4. System quality – what standards of data and system quality should we demand to protect the
individual rights and the safety of the society.
5. Quality of life – what values should be preserved in information and knowledge based society?
What institution should we protect from violation?
What actual values and practices are supported by the new technology?
Key technology trends that raise ethical issues

1. The doubling of computer power every 18 months has made it possible for most organizations to
utilize information systems for the core production processes. Leading to an increase in dependency on
systems, vulnerability to system errors and poor data quality.
There are no social rules and laws adjusted to this dependency and standards for ensuring the
accuracy and reliability of information systems.
2. Advance in data storage techniques and rapidly declining storage costs has been responsible for the
multiplication of databases e.g. employees, customer and potential customer maintained by private
and public organization.
These advances make routine violation of individual’s privacy both cheap and effective.
3. Advances in determining techniques for large databases, organization collect and combine information
about a customer from credit card purchase, telephone calls, banking records and police records. If
properly mine this can reveal credit information, living habits, tastes, association and political interests.
4. Advances in networking – this greatly reduces the cost of moving and accessing large quantities of data
and open the possibility of mining large pools of data remotely using small desktop machines
permitting and invasion of privacy. The global digital superhighway communication network posse’s
social and ethical concerns such as:-
i) Who will account for the flow of information over the networks?
ii) Will you be able to trace information collected about you?
iii) What will these networks do to the traditional relationships, families, work and leisure?
Ethical Principles:-
1) The golden rule – do unto other as you would have them do unto you.
2) Kant’s categorical imperative – if an action is not right for everyone to take then it’s not right for anyone to
take.
3) Descarte’s rule of change – if an action can’t be taken repeatedly, then it’s not right to be taken at any
time.
4) Utilization principle – take the action that achieves the higher or greater value.
5) Risks aversion principle – take the action that products the lease lewd on the least potential cost.
MIS
6) No free lunch – virtually all tangible and intangible objects are owned by someone unless there is a specific
declaration otherwise.
Professional Codes of Ethics (CONDUCT)

These are special rights and obligations take on by professional due to their special claims of knowledge and
wisdom. It also entails respect e.g. institute for the management of information system (IMIS), Association of
Business Executive (ABE), ICPAK, Law Society of Kenya (LSK) and Association of Computer Machinery Codes
(ACMC).
These promise the professionals to regulate themselves in the general interest of the society e.g. avoiding
harm to other, honoring property rights including intellectual property and respecting privacy.
They also determine entrance qualifications and competence consider an e.g. British Computer Society (BSC)
which was formed in 1957 and become a full member of England Engineering council in 1990. It’s a
professional body of computer practitioners in the United Kingdom and has more than 34 members.
The society is concerned with development of computing and its effective applications.
It has assumed responsibilities for education and training for public awareness and for standards of quality
and professionalism.
Its role is to set the professional standards of competence conduct and ethical practice in the U.K. It’s an
authoritative voice to the society government and industry or all aspects of IS.
It influences legislation on data registration, safety, copyright and product liability. The society has 3 degrees
of members i.e associate, members and fellow. Members at the 3 levels are accepted according to their
qualification.
Some Real World Ethical Dilemma

1. Continental incorporated developed a human resource Db that was able to ‘red flag’ an employee who
was almost retirement age, where the red flag went up the management for the employee even in
delay.
2. AT & T Telephone Company uses technology to monitor employees’ responses to customer. It hopes to
eliminate 3000 to 6000 employees by identifying speech that is unpractical and summary.
3. E-mail-privacy at Epson – in 1990 an employee of Epson sued the company for $75,000,000 for
unlawful termination. She was fired because of questioning the company’s policy of monitoring and
printing of employees.
4. Mails messages – many firms claim the right to open mail because they own the facility. They are
intended for the business only and create this facility for a business purpose.
Other ethical issues concerning technology include;
1. Employment – is have been known to lead to loss of jobs and hence a decline in quality of life.
MIS
2. Equity Access and increasing ratio and social classes – Does everyone have an equal opportunity to
participate in the digital age? Will the gaps increase or reduce.
High Factory Strategic
Support
Low Turnaround
Any of the organization in existence has to fall in any of the above four quadrants.
1. Strategic quadrant – information systems planning is critical to the current and future performance of
the firm. I.S planning must be closely linked to corporate planning.
2. Turn-round is – information systems planning is very importance to the future performance of the firm,
without I.S planning, performance will suffer significantly in the long-run I.S planning must be closely
linked to corporate planning.
3. Factory – I.S planning is needed for the information systems activity to be coordinated and to run
smoothly. It’s important to the current company performance, but it’s not expressed to be a critical
factor in the future.
4. Support – I.S planning is still needed for the I.S activity to be coordinated and to run smoothly. It’s not
critical to the current company performance and is very unlikely to be of strategic importance in the
future.
Example:
1. Support – this could be an organization that has developed a system to automate some of the clerical
procedures and it has no intention of investing in I.T in the near future.
2. Factory – this could be an organization that has developed a network which is quite useful in day-to-
day running of company activities and has no intention further in
I.T.
3. Turnaround – are organizations that one currently not using I.T. for nay strategic use but there future
survival will involve I.T. a lot, such as a university that is contemplating of having a virtual university i.e.
African Virtual University (A.V.U).
MIS
4. Strategic – e.g a Bank that has invested in ATMs and any future survival in competing effectively is
alighted to I.T. e.g. loan portfolio management.
Maslow qualified human wants into a hierarchy of needs. Each lower want or need must be stratified before a
worker will seek rewards at the next higher level. Consider the levels starting with the most basic:-
1. Physiological needs – food, clothing and shelter. For the worker this means money. Many workers are
willing to work at relatively tedious jobs or at higher production rates given sufficient monetary
incentives.
2. Safety or security needs – for the worker this means overall job security. Also at the work site,
improving the safety environment will improve the working climate.
3. Social needs – worker seek “belonging” interms of work, this could mean having friendly co-workers,
comfortable interaction with management and being able to participate in company’s committees.
4. Self –esteem – workers strive for competence, desire some respect and seek to satisfy their egos. This
could be provided by making the work more challenging, adding more responsibility and providing
greater variety.
5. Self-fulfillment – when all other needs are fulfilled people become satisfied with life.
Computer crime
Information system control, threats to security, privacy and confidentiality in MIS operations
Electronic funds transfer systems, ICU (Intensive Care Unit) and air traffic control systems depend on
computers to function reliably and it’s estimated that they can’t survive a total failure of their information
systems processing capacity for longer than a day or two.
The relationship between threats to information systems control can be illustrated as follows:-
Identify the threats Some of the threats are due to human error, computer abuse,
natural and political disaster, hardware and software failure
Establish is control Ensure security, privacy and confidentiality via general and
application controls.
| P effectiveness
Check age and efficiency of systems and controls withJ . G A T A C H A financial and operational bodies.
Perform regular audit of 1S
78
MIS
Classes of threats
1. Human error – involves wrong input data, errors in program development or maintenance and
operator errors e.g. mislabeling the tapes.
2. Natural and political disasters – includes earthquakes, typhoons, tornados and hurricanes.
3. Failure to hardware and software – e.g. network and power failures and software maintenance.
4. Computer abuse and crime – using a computer to steal, sabotaging the system and authorized access
to a modification of data (hacking). Computer crime is any illegal act in which a computer is used as a
primary e.g. impersonification i.e. giving access to a system by identifying oneself as one person and
therefore enjoys privileges of the legitimate user.
TROJAN HORSE method i.e. conspiring within an authorized programme are routine of actions causing
unauthorized actions.
LOGIC BOMB i.e. programme who placed a logic bomb in his companies personnel system such that should his
name be upset from the personal file the entire file is erased.
• Computer viruses introduced deliberately.
• Data diddling i.e. changing of data during or before input often to change the contents of the database.
• Salami technique – this is diverting small amounts from large number of accounts maintained by a
system.
• Super-zapping – using a system program that can by pass regular system controls to perform
unauthorized act e.g. the IBM super-zap utility.
Super-zaps are provided to handle emergencies in systems such as restoring systems operations after a
multifunction that can’t be handled with a regular recovery method.
• Scavenging – its unauthorized access to information by searching via the residue after the job has been
run on the computer e.g. searching the waste paper basket for printouts etc.
• Wire tapping or carves-dropping
• Spoofing – collecting of confidential information from unsuspecting visitors to the website they visit.
Having defined controls as a set of policies, procedures and technological measures that are put
together an error or an attack of commuter systems from taking place detect the violation and correct
the exceptional situation. These controls can be categorized into general or application controls.
General controls:
1. Administrative – include separation of duties, constant supervision of staff, thorough screening of new
employees, published procedures and standards. These can also include disaster recovery planning or
contingency planning.
2. System development and maintenance control – systems should be secure and auditable.
Documentation should be maintained and should specify changes made to the system.
3. Operational controls – involve controlling access to system, maintenance of computer equipment and
storage and the day to day running of the company activities.
4. Physical protection of data centres – e.g. installation of air conditioning equipments, fire extinguishers
and UPS (uninterruptable power supply).
MIS
5. Controlling access to computer system and information e.g. identification, authentification and
encryption. This may use the user’s knowledge e.g. the name, account number or password i.e. a smart
card with a microprocessor or a biometric control. This is the using of bodily features such as
fingerprints, hand geometry (chiromancy) , retrieval scanning and the signature.
6. Control as a last result e.g. adequate insurance for the residual risk or a disaster recovery plan.
Application controls
Implemented specifically for a particular information system e.g. a payroll system, account payable or order
processing system. They include;
1. Input control – this is to ensure accuracy, completeness and validation of input.
2. Processing control – e.g. cross-checking two computation which can also include reasonable checks
and rounding off.
3. Database controls – these include backups, recovery, file handling and authorization.
4. Communication controls – including encrypting and the use of digital signatures which should also be
encrypted.
5. Output controls .e.g. scheduling, handling(maintenance) and distribution.
Auditing of Information Systems

Auditing is the process of verifying organizations accounting records and financial statements. However, this is
not possible today without a thorough audit of the information systems which are the primary tools for
managing these records. Information systems are audited by external auditors who test the accuracy and the
truth of the corporate financial statements and by internal auditors who work for the organization itself.
Internal auditors also perform operational auditors to evaluate the effectiveness and efficiency of MIS
operations.
The principle behind the auditability of information systems is that every transactions must reliably be
traceable to the aggregate figures that it affects and each aggregate figure must be traceable back to the
transactions which gives rise to it i.e. An audit trail must exist making it possible to trace the origin and verify
the processing. Transactions logs provides basic audit trail.
Conducting MIS Audit

MIS auditors generally evaluate the controls on the assumption that if a system has adequate controls that are
consistently applied the information produced by these systems is also reliable. Audit can both be scheduled
or unscheduled. The process is as follows;-
1. Study the I.S. and its documentation, inputs and outputs then interview the key users and the M.I.S
personnel. Study both the general and the application controls.
2. Select a sample of transactions processed by the system and trace their processing from the original
document onto the totals they affect. Replicate the processing done by the system and compare it
with the result. This is called compliance testing.
MIS
3. Validate totals contained in financial records. This is known as substantive testing. The extent of this
depends on the compliance results. If controls were operative their only a limited substantive testing
would be required.
4. Conclude the audit by reporting the findings to the corporate management with a detailed statement
of all the controls deficiencies discovered. The use of computer Aided Auditing Techniques (CAAT) can
be applied here.
Why is it necessary to conduct an I.S Audit?

1. Give an assurance of the system reliability e.g. whether the computations are accurate and if there is
any likelihood of failure.
2. To search for efficient utilization of computer systems. This confirms that the invested funds produce
adequate results i.e. no wastage of resources.
3. Prevention of computer crime. This detects destructive activities such as fraud and computer viruses.
4. Protection of privacy – administrative bodies collect process and store information on individual using
computer. Auditing identifies points at which private information may be leaking.
Types of IS audit
1. System development audits: Audit staff advices members of development team to ensure that controls
are embedded in the original design.
2. Operational audits – they are periodically conducted on an I.S to ensure that proper system controls
exists and that they are being followed. They involve checking input data, processing and output.
3. Application audits – meant to validate the integrity of an I.S. It involves identifying all the controls that
govern individuals I.S and access their effectiveness. The auditor needs a thorough understanding of the
operations, physical facilities, telecommunication control systems, data security objectives, personnel,
organizational structure and manual procedures and individual applications.
Disaster recovery planning /contingency planning

A contingency plan is a course of action designed to help an organization respond effectively to a significant
future incident, event or situation that may ...
A disaster recovery plan specifies how a company will maintain. The information system necessary in the
event of a disaster.
A fire or an explosion in the data centre can bring operations to a standstill. In addition a disaster plan may be
required by a regulatory agency or for the purposes of obtaining an insurance cover;-
Importance of contingency planning

1. It enables a company to take a closer look and identify any threats that may hamper its operations.
2. It enables an enterprise to be adequately prepared in the eventuality of realization of the risks.
3. It enables the critical operations to continue in case of a disaster.
MIS
4. It eliminates the confusion, uncertainty and panic that results whenever a disaster happens by clearly
stating the actions to be undertaken in the event of such a disaster.
5. It facilitates the faster recovery from the disaster thereby reducing the impact.
Steps in drawing a contingency plan

1. Resolve the basic planning issues .e.g. the scope of the plan.
2. Gather important information e.g. the cost of the subject and the case of replacement.
3. Conduct a situation assessment e.g. identity open risks and potential disaster.
4. Identity the planning constraints and limitations.
5. Identify alternative sources of active and select the optimal cause
6. Compile the plan.
7. Conduct a drill for the plan.
A disaster recovery plan has 4 major elements:-
1. An emergency plan – it specifies in what situations a disaster is to be declared and what actions are to be
taken by the various employees.
2. A back-up plan – this is a principle component which specified how information processing would be
carried out during an emergency. It details how backed up computer disks or tapes are to be maintained
and specifies the facility where they can be run on a very short time notice. These arrangements include;-
(i) Reciprocal arrangement – compares with similar hardware configurations agree with one
another to permit short term sharing of the problem by transferring the affected system to the
other company before the situation is rectified. Should a disaster occur both companies are
forced to reduce their levels of data processing to support only the critical operations.
Although the method is inexpensive critical operations of the two organizations may be too
much for a single one to handle. It’s also possible for a disaster to strive both companies
together.
(ii) Cold site arrangements – This is a facility that can house a mainframe computer system
including environmental control, electrical services and telecommunication services.
A company may contract with a disaster recovery company to provide a cold site in cases of
disaster or may rent, lease, or purchase suitable space.
(iii) Hot site arrangement – this site contains a complete date centre including a working
mainframe system compatible with the one that is backing up. The strategy is expensive but
minimizes the down time e.g. a computer bureau. However the company must be aware that a
similar disaster can affect several companies at the same time.
(iv) Back up facilities – A parallel facility where one company has more than one data centre. This is
usually an arrangement of real-time systems. The parallel facility has duplicated software and
hardware and the database is updated as an ongoing process. This arrangement is the most
expensive but would be the best approach.
3. Test plan – This includes drills and practices of what would happen in cases of emergency. It tests the
reliability of the back-up plans.
MIS
4. Recovery plan – This includes arrangement on purchasing hardware and software to restore the original
company. This involves insurance arrangements, loans etc.

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18

INTRODUCTION TO MANAGEMENT INFORMATION SYSTEMS

1.1 What is a management information system (MIS)?

Some definitions of MIS are given below

The Figure 1.1 summarizes this approach.

The management information system has the following characteristics

Role of Information in an Organization

(Monitoring and controlling involves regularly measuring progress on a project to ensure it

Approaches to system classification There are two

Information systems can be classified by:

(a) Organizational level Supported

(a) Functional area supported

(c) Support provided.

• Data processing systems/transaction processing systems

(d) Management activity supported

Executive support systems (ESS)

Management information systems (MIS)

MIS reports tend to be used by middle management and operational supervisors.

Decision support systems (DSS)

Knowledge management systems (KMS)

Transaction processing systems (TPS)

They are designed to process routine transactions efficiently and accurately.

A business will have several TPS; for example:

• Billing systems to send invoices to customers

Office automation systems

Decision support systems - expert systems

APPROACHES TO INFORMATION SYSTEMS

System Approach or System Theory

ORGANIZATION’S STRUCTURE, CUTLURE AND CHANGE

Sales & marketing Production Distribution Accounts manager Manager

Organization culture can be perceived as:-

1. Either using High technology or low technology.

USE OF INFORMATION SYSTEMS IN MANAGEMENT

Components of an Information System:

The components that make up an IS are:-

Importance of Information system in management

Raw materials Transformation Service or Goods

INPUT PROCESSING OUTPUT

(i) Open loop control system

(ii) Closed loop control system

Feedback can be divided into positive feedback and negative feedback.

(ii) Negative Feedback

High level controller

System Being Sensor management

Information Systems and Organizational Structure

Tactical level (DSS,

Support long-rays planning activities of semi level

Support knowledge and data worker in organization

Monitor elementary activities and transaction of the organization.

2. Knowledge Level Systems

3. Management /Tactical Level Systems

Strategic level (long-term planning)

Tactical level (planning & control)

Knowledge level (designing new

| Operational level (keeping

TRANSACTIONS PROCESSING SYSTEMS (TPS)

Major characteristics of T.P.S

Activities and methods of TPS

2. Interactive /Real-Time processing