ICT Concepts PDF

ICT Concepts Information Communication Technology (ICT) ICT is an umbrella term that includes any communication device or application, encompassing: radio, television, cellular phones, computer and network hardware and software, satellite systems as well as various services associated wi...

ICT Concepts Information Communication Technology (ICT) ICT is an umbrella term that includes any communication device or application, encompassing: radio, television, cellular phones, computer and network hardware and software, satellite systems as well as various services associated with them. ICT and its Social Impact on Society Information Technology (IT) The term ‘information technology’ describes the equipment used to capture, store, transmit or present information. IT provides a large part of the information systems infrastructure. Systems theory A system is a set of interacting components that operate together to accomplish a purpose. The component parts of a system A system has three component parts: inputs, processes and outputs. Other key characteristics of a system are the environment and the system boundary – as shown in the following diagram. System Boundary Environment Environment Process INPUT OUTPUT Inputs Inputs provide the system with what it needs to be able to operate. Input may vary from matter, energy or human actions, to information.  Matter might include, in a manufacturing operation, adhesives or rivets.  Human input might consist of typing an instruction booklet or starting up a piece of machinery. 1 Inputs may be outputs from other systems, for example, the output from a transactions processing system forms the input for a management information system. Processes A process transforms an input into an output. Processes may involve tasks performed by humans, plant, computers, chemicals and a wide range of other actions. Processes may consist of assembly, for example where electronic consumer goods are being manufactured, or disassembly, for example where oil is refined. There is not necessarily a clear relationship between the number of inputs to a process and the number of outputs. Outputs Outputs are the results of the processing. They could be said to represent the purpose for which the system exists. Many outputs are used as inputs to other systems. Alternatively, outputs may be discarded as waste (an input to the ecological system) or re-input to the system which has produced them, for example, in certain circumstances, defective products. The system boundary A system exists in an environment. An environment surrounds the system but is not part of it. A system boundary separates the system from its environment. The concept of the system boundary is explained above. For example, a cost accounting department's boundary can be expressed in terms of who works in it and what work it does. This boundary will separate it from other departments, such as the financial accounts department. System boundaries may be natural or artificially created (an organisation's departmental structures are artificially created). There may be interfaces between various systems, both internal and external to an organisation, to allow the exchange of resources. In a commercial context, this is most likely to be a reciprocal exchange, for example money for raw materials. The environment Anything which is outside the system boundary belongs to the system's environment and not to the system itself. A system accepts inputs from the environment and provides outputs into the environment. The parts of the environment from which the system receives inputs may not be the same as those to which it delivers outputs. The environment exerts a considerable influence on the behaviour of a system; at the same time the system can do little to control the behaviour of the environment. Subsystems A system itself may contain a number of systems, called subsystems. Each subsystem consists of a process whereby component parts interact to achieve an objective. Separate subsystems interact with each other, and respond to each other by means of communication or observation. The goals of subsystems must be consistent with the goal of the overall system. Often, whether something is a system or a subsystem is a matter of definition, and depends on the context of the observer. For example, an organisation is a social system, and its 'environment' 2 may be seen as society as a whole. Another way of looking at an organisation would be to regard it as a subsystem of the entire social system. Information links up the different subsystems in an organisation. The systems approach The theory we have covered in this section may be applied to a wide range of situations. For example, a computerised information system may also be thought of in terms of inputs, processed outputs and subsystems. Organisations can also be viewed as a system. Inputs are received and processed to produce outputs of goods and services. The objectives of the organisation are thereby fulfilled. The systems approach uses three steps.  Identify what the whole system is  Identify the overall objectives of the system as a whole  Make plans with these objectives in mind Socio-technical systems Another point of view suggests that an organisation is a 'structured socio-technical system', that is, it consists of at least three subsystems.  A structure.  A technological system (concerning the work to be done, and the machines, tools and other facilities available to do it).  A social system (concerning the people within the organisation, the ways they think and the ways they interact with each other). Types of systems An open system has a relationship with its environment which has both prescribed and uncontrolled elements. A closed system is shut off from its environment and has no relationship with it. Open systems and closed systems In systems theory a distinction is made between open systems and closed systems. A closed system is a system which is isolated from its environment and independent of it. No environmental influences affect the behaviour of the system, nor does the system exert any influence on its environment. Some scientific systems might be described as closed systems. An example of a closed system is a chemical reaction in a sealed, insulated container. Another is the operation of a thermostat. However, all social systems, including business organisations, have some interaction with their environment, and so cannot be closed systems. An open system is a system connected to and interacting with its environment. It takes inputs (or 'energy') from its environment influencing it and also influences this environment by its behaviour (it exports energy). Open and closed systems can be described by diagram as follows. Closed system Open System 3 Shut Off from It’s Environment  Open System Predictable Outputs Controllable inputs Relating to its Uncontrollable Inputs environment in both prescribed and Unexpected Inputs Unpredictable Outputs uncontrolled ways Semi-closed systems Some writers also refer to semi-closed systems. A semi-closed system interfaces with the environment and reacts in a predictable controlled way. This differs from an open system as open systems interact with the environment in both controlled and uncontrolled ways. Deterministic systems A deterministic system is one in which various states or activities follow on from each other in a completely predictable way, that is X will take place then Y, then Z. A fully- automated production process is a typical example, A computer program is another. Probabilistic Systems A Probabilistic System is one in which, although some states or activities can be predicted with certainty, others will occur with varying degrees of probability. In business, many systems can be regarded as probabilistic systems. Self-Adjusting Systems A Self-Adjusting System is one which adapts and reacts to a stimulus. The way in which it adapts is uncertain and the same input (stimulus) to the system will not always produce the same output (response). Social and psychological systems come within this category. Examples might be as follows:  A bank which pays a rate of interest to depositors depending on the amount of money in the deposit account. Interest calculations (the output of the system is the calculated interest) will vary as the money in each depositor’s account goes up or down.  A stock re-ordering system where the quantity of stock item that is ordered from a supplier varies according to changes in the usage of the item.  A Uganda-based telecom company giving a bonus of 4,000/= to every pay as you go customer who purchases Air time worth 20,000/= in a week. 4 Feedback control and feedforward control systems Feedback control systems Feedback control systems describe the situation where part of system output is returned (fed-back) as an input. An example is an accounting budgetary control system as the output (e.g. variance analysis) may result in changes to input and/or processes. Feedforward control systems Feedforward control systems involve the monitoring of the environment, the process and the output – and taking any corrective action on the basis of these factors. This involves a predictive element as the corrective action is based upon both current and future events. Feedback control loops The term 'feedback control loop' describes a situation where feedback is gathered and then used to influence future performance (i.e. exercise control) by adjusting input. A single feedback loop Single loop feedback follows a 'simple' path comparing actual results against expected results. A double feedback loop Double loop feedback involves making changes to the actual plans or systems as a result of changes in both internal and external conditions. Systems concepts Filtering Filtering means ensuring information is relevant and required before disseminating. It means removing 'impurities' such as excessive detail from data as it is passed up the organisation hierarchy. We meet this concept in the context of good information. Operational staff may need all the detail to do their jobs, but when they report to higher subsystems the data can be progressively summarised. Extraneous detail is filtered out leaving only the important points. The problem with this is that sometimes the 'filter' may let through unimportant information and/or remove important information, with the result that the message is distorted at the next level. Coupling and decoupling The terms coupling and decoupling relate to how closely one system depends on another. If systems or subsystems are very closely linked or coupled this may cause difficulties. For example, in order to sell goods, a manufacturing company must first 5 of all make them. If the sales and production subsystems are closely coupled, the company may be able to produce almost exactly the amount required for a given period's sales. However, the system would be prone to inefficiency through a 'mishap', such as a late delivery of raw materials, a machine breakdown, or a strike, as then goods would not be available to meet sales demand. From a traditional point of view, greater efficiency is achieved between the production and sales systems by decoupling them. In the example above, this would mean reducing the interaction between sales and production by creating a finished goods stock. From a modern point of view, holding finished goods stock is expensive, and greater efficiency is achieved by adopting quality management philosophies to try to ensure that mishaps do not occur. If this is successful this means that a Just-In-Time (JIT) approach to production and purchasing can be adopted. JIT closely couples the sales and production subsystems and closely couples one organisation's purchasing function with another's supplying function. Requisite variety If there is variety in the environmental influences in the system, then the system itself must be suitably varied and variable to adapt itself successfully to its environment. This is the principle behind the law of requisite variety. The 'law' of requisite variety is a principle of general systems theory, developed by Ross Ashby. The law of requisite variety states that the variety within a system must be at least as great as the environmental variety against which it is attempting to regulate itself. If a system does not have the requisite amount of variety, it will be unable to adapt to change and will eventually die or be replaced. History is full of examples of political systems that could not adapt to social, economic or political changes, and so were overthrown. The law of requisite variety applies to self-regulating systems in general, but one application of the law relates to control systems. A control system (which is a sub- system of a larger system) must be sufficiently flexible to be able to deal with the variety that occurs naturally in the system that it is attempting to control. 6  Systems Development SDLC Definition  SDLC, the Systems Development Life Cycle relates to models or methodologies that people use to develop systems, depending on the Systems Analyst in charge of the system being developed, generally computer systems. To manage this, a number of system development life cycle (SDLC) models have been created including the waterfall, (the original SDLC method), Rapid Application Development (RAD), Joint Applications Design (JAD), the fountain model and the spiral model. SDLC adheres to important phases that are essential for developers, such as planning, analysis, design, and implementation, and are explained in the section below. There are several SDLC Models in existence. The oldest model, that was originally regarded as “the SDLC” is the waterfall model: a sequence of stages in which the output of each stage becomes the input for the next. These stages generally follow the same basic steps but many different waterfall methodologies give the steps different names and the number of steps seems to vary. There is not a definitive correct model, but the steps can be characterized and divided as follows: 1. Investigation and Initiation 2. System Concept Development 3. Planning 4. Requirement Analysis 5. Design 6. Development 7. Integration and Test 8. Implementation 9. Operations and Maintenance Project planning, feasibility study, Initiation: To generate a high-level view of the intended project and determine the goals of the project. The feasibility study is sometimes used to present the project to upper management in an attempt to gain funding. Projects are typically evaluated in three areas of feasibility: economical, operational, and technical. Furthermore, it is also used as a reference to keep the project on track and to evaluate the progress of the MIS team. Requirements gathering and Systems Analysis: The goal of systems analysis is to find out where the problem is in attempt to fix the system. This step involves breaking down the system in different pieces and drawing diagrams to analyze the situation. Analyses project goals, breaking down functions that need to be 7  created, and attempts to engage users so that definite requirements can be defined. Systems design: Functions and operations are described in detail, including screen layouts, business rules, process diagrams and other documentation. The output of this stage will be to describe the new system as a collection of modules or subsystems. Development: Modular and subsystem programming code will be accomplished during this stage. This stage is intermingled with the next in that individual modules will need testing before integration to the main project. Integration and Testing: The code is tested at various levels. Unit, system and user acceptance testing are often performed. This is a very grey area as many different opinions exist as to what the stages of testing are and how much if any iteration occurs. Iteration is not generally part of the Waterfall model, but usually some occurs at this stage. Installation, Implementation or Deployment: The final stage of a project or the initial development, where the software is put into production and is used by the actual business. Operations and Maintenance, Business as Usual: The life of the system which includes changes and enhancements before the decommissioning or sunset of the system. Maintaining the system is a very important aspect of SDLC. As key personnel change position in the organization, new changes will be implemented, which will require system updates. Strength and Weaknesses of SDLC Strengths Weaknesses Control. Increased development time. Monitor Large projects. Increased development cost. Detailed steps. Systems must be defined up front. Evaluate costs and completion targets. Rigidity. Documentation. Hard to estimate costs, project overruns. Well defined user input. User input is sometimes limited. Ease of maintenance. Development and design standards. 8  Tolerates changes in MIS staffing. Alternatives to SDLC An alternative to the SDLC is Rapid Application Development (RAD); which combines prototyping, Joint Application Development and implementation of CASE tools. The advantages of RAD are speed, reduced development cost, active user involvement in development process. It should not be assumed that just because the waterfall model is the oldest original SDLC model that it is the most efficient system. At one time the model was beneficial mostly to the world of automating activities that were assigned to clerks and accountants. However, the world of technological evolution is demanding that systems have a greater functionality that would assist help desk technicians/administrators or information technology specialist/analyst. The alternatives to SDLC include:  Prototyping  Joint Applications Design (JAD)  Object Oriented (OO) Programming Prototyping The conventional purpose of a prototype is to allow users of the software to evaluate developers' proposals for the design of the eventual product by actually trying them out, rather than having to interpret and evaluate the design based on descriptions. Prototyping can also be used by end users to describe and prove requirements that developers have not considered, so "controlling the prototype" can be a key factor in the commercial relationship between solution providers and their clients. Prototyping has several benefits: The software designer and implementer can obtain feedback from the users early in the project. The client and the contractor can compare if the software made matches the software specification, according to which the software program is built. It also allows the software engineer some insight into the accuracy of initial project estimates and whether the deadlines and milestones proposed can be successfully met. The degree of completeness and the techniques used in the prototyping have been in development and debate since its proposal in the early 1970s. This process is in contrast with the 1960s and 1970s monolithic development cycle of building the entire program first and then working out any inconsistencies between design and implementation, which led to higher software costs and poor estimates of time and cost. The monolithic approach has been dubbed the "Slaying the (software) Dragon" technique, since it assumes that the software designer and developer is a single hero who has to slay the entire dragon alone. Prototyping can also avoid the great expense and difficulty of changing a finished software product. Steps involved in the process of prototyping: 9   Requirements Definition/Collection Determine basic requirements including the input and output information desired. Details, such as security, can typically be ignored.  Develop Initial Prototype The initial prototype is developed that includes only user interfaces.  Review The customers, including end-users, examine the prototype and provide feedback on additions or changes.  Revise and Enhancing the Prototype Using the feedback both the specifications and the prototype can be improved. Negotiation about what is within the scope of the contract/product may be necessary. If changes are introduced then a repeat of steps #3 and #4 may be needed. Advantages of prototyping There are many advantages to using prototyping in software development- some tangible some abstract. Reduced time and costs: Prototyping can improve the quality of requirements and specifications provided to developers. Because changes cost exponentially more to implement as they are detected later in development, the early determination of what the user really wants can result in faster and less expensive software. Improved and increased user involvement: Prototyping requires user involvement and allows them to see and interact with a prototype allowing them to provide better and more complete feedback and specifications. The presence of the prototype being examined by the user prevents many misunderstandings and miscommunications that occur when each side believe the other understands what they said. Since users know the problem domain better than anyone on the development team does, increased interaction can result in final product that has greater tangible and intangible quality. The final product is more likely to satisfy the users desire for look, feel and performance. Disadvantages of prototyping Using, or perhaps misusing, prototyping can also have disadvantages. Insufficient analysis: The focus on a limited prototype can distract developers from properly analyzing the complete project. This can lead to overlooking better solutions, preparation of incomplete specifications or the conversion of limited prototypes into poorly engineered final projects that are hard to maintain. Further, since a prototype is limited in functionality it may not scale well if the prototype is 10 used as the basis of a final deliverable, which may not be noticed if developers are too focused on building a prototype as a model. User confusion of prototype and finished system: Users can begin to think that a prototype, intended to be thrown away, is actually a final system that merely needs to be finished or polished. (They are, for example, often unaware of the effort needed to add error-checking and security features which a prototype may not have.) This can lead them to expect the prototype to accurately model the performance of the final system when this is not the intent of the developers. Users can also become attached to features that were included in a prototype for consideration and then removed from the specification for a final system. If users are able to require all proposed features be included in the final system this can lead to conflict. Developer misunderstanding of user objectives: Developers may assume that users share their objectives (e.g. to deliver core functionality on time and within budget), without understanding wider commercial issues. For example, user representatives attending Enterprise software (e.g. PeopleSoft) events may have seen demonstrations of "transaction auditing" (where changes are logged and displayed in a difference grid view) without being told that this feature demands additional coding and often requires more hardware to handle extra database accesses. Users might believe they can demand auditing on every field, whereas developers might think this is feature creep because they have made assumptions about the extent of user requirements. If the solution provider has committed delivery before the user requirements were reviewed, developers are between a rock and a hard place, particularly if user management derives some advantage from their failure to implement requirements. Developer attachment to prototype: Developers can also become attached to prototypes they have spent a great deal of effort producing; this can lead to problems like attempting to convert a limited prototype into a final system when it does not have an appropriate underlying architecture. (This may suggest that throwaway prototyping, rather than evolutionary prototyping, should be used.) Excessive development time of the prototype: A key property to prototyping is the fact that it is supposed to be done quickly. If the developers lose sight of this fact, they very well may try to develop a prototype that is too complex. When the prototype is thrown away the precisely developed requirements that it provides may not yield a sufficient increase in productivity to make up for the time spent developing the prototype. Users can become stuck in debates over details of the prototype, holding up the development team and delaying the final product. Expense of implementing prototyping: the start up costs for building a development team focused on prototyping may be high. Many companies have development methodologies in place, and changing them can mean retraining, retooling, or both. Many companies tend to just jump into the prototyping without bothering to retrain their workers as much as they should. A common problem with adopting prototyping technology is high expectations for productivity with insufficient effort behind the learning curve. In addition to training for the use of a prototyping technique, there is an often overlooked need for developing 11 corporate and project specific underlying structure to support the technology. When this underlying structure is omitted, lower productivity can often result. 12 Information systems (IS) An IS includes all systems, people and procedures involved in the collection, storage, production and distribution of information essential to running an organisation. Data Data is a term used to describe raw facts and figures about the routine activities of an organization. For example number of hours worked by an employee, rate of pay per employee, nssf and PAYE deductions etc. Information Information refers to processed Data. It is obtained by assembling items of data into meaningful form. For example the payroll, financial statements (Balance Sheet, Profit and Loss Account/Income statement) etc. The qualities of good information Good information has a number of specific qualities: the mnemonic ACCURATE is a useful way of remembering them. The qualities of good information are outlined below – in mnemonic form. If you think you have seen this before, note that the second A here stands for 'Authoritative', an increasingly important concern given the huge proliferation of information sources available today. Quality Example Accurate Figures should add up, the degree of rounding should be appropriate, there should be no typos, items should be allocated to the correct category, assumptions should be stated for uncertain information (no spurious accuracy). Complete Information should includes everything that it needs to include, for example external data if relevant, or comparative information. Cost-beneficial It should not cost more to obtain the information than the benefit derived from having it. Providers of information should be given efficient means of collecting and analysing it. Presentation should be such that users do not waste time working out what it means. User-targeted The needs of the user should be borne in mind, for instance senior managers may require summaries, junior ones may require detail. Relevant Information that is not needed for a decision should be omitted, no matter how 'interesting' it may be. 13 Authoritative The source of the information should be a reliable one (not, for instance, 'Joe Bloggs Predictions Page' on the Internet unless Joe Bloggs is known to be a reliable source for that type of information. Timely The information should be available when it is needed. Easy to use Information should be clearly presented, not excessively long, and sent using the right medium and communication channel (e-mail, telephone, hard-copy report etc). Types of Information Present Information This is information about what is happening now so that decisions can be taken about what if anything happened what to do next. It is most readily associated with control information, which is the feed back in Management Information system (MIS). Much control information relates to comparison of historical and current data. Past Information This refers to record keeping, storing of information about what has been done or happened in the past. This historical information will subsequently be used again at sometime in the future. Much past information is of transaction nature e.g. maintaining proper accounting records of past information. Future Information This is the forecasting of information about what is expected to happen in the future. It is most readily associated with planning decisions possibly for budget, but also longer-term strategic information. Levels of Information in an organisation Strategic Information Is used to plan the objectives of their organization, and to assess whether the objectives are being met in practice. Such information includes overall profitability, the profitability of different segments of the business, future market prospects, the availability of and cost of raising new funds, total cash needs, total manning levels and capital equipment needs. Tactical Information Is used to decide how the resources of the business should be employed, and to monitor how they are being, and have been employed. Such information includes productivity measurements (Output per man hour or per machine hour) budgetary control or variance analysis reports, and cashflow 14 forecasts, manning levels and profit results within a particular department of the organization. Operational Information Is used to ensure that specific tasks are planned and carried out properly within a factory or office. In a factory for example, information such as the amount of raw materials being input to a production process, may be required daily, hourly or in the case of an automated production, second by second. Sources of Information Internal information Data can be collected from within and beyond an organisation. Information systems are used to convert this data into information and to communicate it to management at all levels. Data and information come from sources both inside and outside an organisation, and an information system should be designed so as to obtain – or capture – all the relevant data and information from whatever source. Capturing data/information from inside the organisation involves the following. 1. A system for collecting or measuring transactions data – for example sales, purchases, stock turnover etc – which sets out procedures for what data is collected, how frequently, by whom, and by what methods, and how it is processed, and filed or communicated. 2. Informal communication of information between managers and staff (for example, by word-of-mouth or at meetings). 3. Communication between managers. Internal data sources The accounting records Sales ledgers, purchase ledgers, general ledgers and cash books etc hold information that may be of great value outside the accounts department, for example, sales information for the marketing function. To maintain the integrity of its accounting records, an organization operates controls over transactions. These also give rise to valuable information. A stock control system for example will include details of purchase orders, goods received notes, goods returned notes and so on, which can be analysed to provide management information about speed of delivery, say, or the quality of supplies. The accounting records Sales ledgers, purchase ledgers, general ledgers and cash books etc hold information that may be of great value outside the accounts department, for 15 example, sales information for the marketing function. To maintain the integrity of its accounting records, an organization operates controls over transactions. These also give rise to valuable information. A stock control system for example will include details of purchase orders, goods received notes, goods returned notes and so on, which can be analysed to provide management information about speed of delivery, say, or the quality of supplies. Other internal sources (a) Information about personnel will be held, possibly linked to the payroll system. Additional information may be obtained from this source if, say, a project is being costed and it is necessary to ascertain the availability and rate of pay of different levels of staff, or the need for and cost of recruiting staff from outside the organisation. (b) Much information will be produced by a production department about machine capacity, fuel consumption, movement of people, materials, and work in progress, set up times, maintenance requirements and so on. (c) Many service businesses, notably accountants and solicitors, need to keep detailed records of the time spent on various activities, both to justify fees to clients and to assess the efficiency and profitability of operations. Staff themselves are one of the primary sources of internal information. Information may be obtained either informally in the course of day-to-day business or through meetings, interviews or questionnaires. External information Capturing information from outside the organisation might be entrusted to particular individuals, or might be 'informal'. Routine formal collection of data from outside sources includes the following. (a) A company's tax specialists will be expected to gather information about changes in tax law and how this will affect the company. (b) Obtaining information about any new legislation on health and safety at work, or employment regulations, must be the responsibility of a particular person – for example the company's legal expert or company secretary – who must then pass on the information to other managers affected by it. (c) Research and development (R & D) work often relies on information about other R & D work being done by another company or by government institutions. (d) Marketing managers need to know about the opinions and buying attitudes of potential customers. To obtain this information, they might carry out market research exercises. Informal gathering of information from the environment goes on all the time, consciously or unconsciously, because the employees of an organisation learn what is going on in the world around them – perhaps from newspapers, television reports, meetings with business associates or the trade press. External data sources An organisation's files (paper and computerised) include information from external sources such as invoices, letters, e-mails, advertisements and so on received from 16 customers and suppliers. Sometimes additional external information is required, requiring an active search outside the organisation. The following sources may be identified. (a) The government. (b) Advice or information bureaux. (c) Consultancies of all sorts. (d) Newspaper and magazine publishers. (e) There may be specific reference works which are used in a particular line of work. (f) Libraries and information services. (g) Increasingly businesses can use each other's systems as sources of information, for instance via electronic data interchange (EDI). (h) Electronic sources of information are becoming ever more important. (i) Companies like Reuters offer access to a range of predominantly business- related information. (ii) Many information provision services are now provided via the Internet. As the rate of Internet use increases, greater numbers of people and organisations are using it to source information on a vast range of topics. The phrase ‘environmental scanning’ is often used to describe the process of gathering external information, which is available from a wide range of sources. Types of Information Systems Data Processing Systems A Data Processing System (DPS) is a system for processing routine operational data. There has to be a system or procedure for ensuring that all the data needed for processing is collected and made available for processing. For example a cashier at Multitec Business school is responsible for receiving payments to the school, recording them in the cash book and banking the money. He or she cannot do this job properly unless there is a system for ensuring that all payments to the school are directed to the cashier’s office for processing. Collecting data is an important step in Data Processing (DP) that must not be overlooked because the quality, accuracy and completeness of the data will affect the quality of information produced. Transaction Processing Systems (TPS) A Transaction Processing System (TPS) performs and records routine transactions. TPS are used for routine tasks in which data items or transactions must be processed so that operations can continue. TPS support most business functions in most types of organisations. The following table shows a range of TPS applications. Transaction processing systems Sales/ Manufacturin Finance/ Human Other types marketing g accounting resources (eg MBS) systems /production systems systems systems 17 Major  Sales Scheduling Budgeting functions management Purchasing General Personnel Admissions of system  Market Shipping/ ledger records Student research receiving Billing Benefits academic  Promotion Engineering Salaries records pricing Operations Managemen Labour Course  New t relations records products accounting Training Graduates Major Sales order Materials General Payroll applicatio information resource ledger Registration n system planning Accounts Employee Student systems Market Purchase receivable records record research order control /payable system Engineering Budgeting Employee Curriculum/ Pricing Quality Funds benefits class system control managemen Career control t path systems systems Benefactor information system Decision Support Systems (DSS) Decision Support Systems (DSS) combine data and analytical models or data analysis tools to support semi-structured and unstructured decision making. DSS are used by management to assist in making decisions on issues which are subject to high levels of uncertainty about the problem, the various responses which management could undertake or the likely impact of those actions. Decision support systems are intended to provide a wide range of alternative information gathering and analytical tools with a major emphasis upon flexibility and user-friendliness. DSS have more analytical power than other systems enabling them to analyse and condense large volumes of data into a form that aids managers make decisions. The objective is to allow the manager to consider a number of alternatives and evaluate them under a variety of potential conditions. Executive Information Systems (EIS) An Executive Information System (EIS) pools data from internal and external sources and makes information available to senior managers in an easy-to-use form. EIS help senior managers make strategic, unstructured decisions. An ESS should provide senior managers with easy access to key internal and external information. The system summarises and tracks strategically critical information, possibly drawn from internal MIS and DSS, but also including data from external sources eg competitors, legislation, external databases such as Reuters. Executive Information Systems are sometimes referred to as Executive Support Systems (ESS). An ESS/EIS is likely to have the following features.  Flexibility  Quick response time 18   Sophisticated data analysis and modelling tools Expert systems Expert systems are a form of DSS that allow users to benefit from expert knowledge and information. The system will consist of a database holding specialised data and rules about what to do in, or how to interpret, a given set of circumstances. For example, many financial institutions now use expert systems to process straightforward loan applications. The user enters certain key facts into the system such as the loan applicant's name and most recent addresses, their income and monthly outgoings, and details of other loans. The system will then: (a) Check the facts given against its database to see whether the applicant has a good credit record. (b) Perform calculations to see whether the applicant can afford to repay the loan. (c) Match up other criteria, such as whether the security offered for the loan or the purpose for which the loan is wanted is acceptable, and to what extent the loan applicant fits the lender's profile of a good risk (based on the lender's previous experience). A decision is then suggested, based on the results of this processing. This is why it is now often possible to get a loan or arrange insurance over the telephone, whereas in the past it would have been necessary to go and speak to a bank manager or send details to an actuary and then wait for him or her to come to a decision. Management Information Systems (MIS) Management Information Systems (MIS) convert data from mainly internal sources into information (eg summary reports, exception reports). This information enables managers to make timely and effective decisions for planning, directing and controlling the activities for which they are responsible. An MIS provides regular reports and (usually) on-line access to the organisation's current and historical performance. MIS usually transform data from underlying transaction processing systems into summarised files that are used as the basis for management reports. MIS have the following characteristics:  Support structured decisions at operational and management control levels  Designed to report on existing operations  Have little analytical capability  Relatively inflexible  Have an internal focus Knowledge Work Systems (KWS) Knowledge Work Systems (KWS) are information systems that facilitate the creation and integration of new knowledge into an organisation. Knowledge Workers are people whose jobs consist of primarily creating new information and knowledge. 19 They are often members of a profession such as doctors, engineers, lawyers and scientists. KWS help knowledge workers create new knowledge and expertise. Examples include:  Computer Aided Design (CAD)  Computer Aided Manufacturing (CAM)  Specialised financial software that analyses trading situations Office Automation Systems (OAS) Office Automation Systems (OAS) are computer systems designed to increase the productivity of data and information workers. OAS support the major activities performed in a typical office such as document management, facilitating communication and managing data. Examples include:  Word processing, desktop publishing, and digital filing systems  E-mail, voice mail, videoconferencing, groupware, intranets, schedulers  Spreadsheets, desktop databases Note: Do not just learn what these systems are; you need to understand which levels of an organisation's hierarchy would use them and how they support its operations. There are many other business applications of expert systems. (a) Legal advice. (b) Tax advice. (c) Forecasting of economic or financial developments, or of market and customer behaviour. (d) Surveillance, for example of the number of customers entering a supermarket, to decide what shelves need restocking and when more checkouts need to be opened, or of machines in a factory, to determine when they need maintenance. (e) Diagnostic systems, to identify causes of problems, for example in production control in a factory, or in healthcare. (f) Project management. (g) Education and training, diagnosing a student's or worker's weaknesses and providing or recommending extra instruction as appropriate. An organisation can use an expert system when a number of conditions are met. (a) The problem is reasonably well-defined. (b) The expert can define some rules by which the problem can be solved. (c) The problem cannot be solved by conventional transaction processing or data handling. (d) The expert could be released to more difficult problems. Experts are often highly paid, meaning the value of even small time savings is likely to be significant. (e) The investment in an expert system is cost-justified. Importance of Information Systems Why do organisations need information systems? Organisations require information for a range of purposes.  Planning  Controlling  Recording transactions 20   Performance measurement  Decision making Planning Once any decision has been made, it is necessary to plan how to implement the steps necessary to make it effective. Planning requires a knowledge of, among other things, available resources, possible timescales for implementation and the likely outcome under alternative scenarios. Controlling Once a plan is implemented, its actual performance must be controlled. Information is required to assess whether it is proceeding as planned or whether there is some unexpected deviation from plan. It may consequently be necessary to take some form of corrective action. Recording transactions Information about each transaction or event is required for a number of reasons. Documentation of transactions can be used as evidence in a case of dispute. There may be a legal requirement to record transactions, for example for accounting and audit purposes. Detailed information on production costs can be built up, allowing a better assessment of profitability. Similarly, labour utilised in providing a particular service can be measured. Structured systems can be installed to capture transactions data. Performance measurement Just as individual operations need to be controlled, so overall performance must be measured in order to enable comparisons against budget or plan to be carried out. This may involve the collection of information on, for example, costs, revenues, volumes, time-scale and profitability. Decision making Information is also required to make informed decisions. This completes the full circle of organizational activity. 21