Business Information Systems - Instructor's Manual

Instructors Manual
Business Information
Systems
Fourth edition
Paul Bocij
Andrew Greasley
Simon Hickie
For further instructor material
please visit:
www.pearsoned.co.uk/bis
ISBN: 978-0-273-71663-1
Pearson Education Limited 2008

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----------------------------------First published 1999
This edition published 2008
The rights of Paul Bocij, Andrew Greasley and Simon Hickie to be identified as authors of this
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1988.
ISBN: 978-0-273-71663-1
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Contents
Chapters
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
Pages
Basic Concepts understanding information
Basic concepts an introduction to business information systems
Hardware
Software
Networks, telecommunications and the Internet
Business applications of information systems
An introduction to acquiring and developing BIS
Initiating systems development
BIS project management
Systems analysis
Systems design
System build, implementation and maintenance: change management
Information systems strategy
Information systems management
Managing information security
End-user computing providing end-user services
Ethical, legal and moral constraints on information systems
3
5
22
46
66
86
99
107
134
150
161
186
201
211
219
237
251
260
Introduction
We hope that you find the guide useful. If you have any comments or suggestions, please
contact us via the web site (www.pearsoned.co.uk/bis).
Organisation of materials
Each chapter of the Instructors Manual is accompanied by a body of material intended to
support lecturers in their teaching of BIS. In addition, this introduction sets out the overall
structure of the book and suggests how it might be used with different groups of learners.
All materials are available in two forms: as ready-to-print documents and as material that can be
viewed via the Internet. The documents available for printing are provided in Adobe Acrobat
(PDF) format. This means that the Adobe Acrobat Reader is required in order to view or print
documents. This software is available free of charge from www.adobe.com.
Each document is made up of several different sections:
Title page. This lists the title of the chapter.
Chapter summary. This provides an overview of the chapter. This overview includes a brief
summary of learning objectives, a list of the topics covered a description of the business
issues addressed by the material.
Notes. Some additional comments and notes regarding the material presented.
Activities. Specimen answers for all of the activities presented within the chapter. Activities
are listed in the order in which they appear within the material.
Case studies. Specimen answers for all of the case studies presented within the chapter.
Case studies are listed in the order in which they appear within the material.
Exercises. Specimen answers for all of the activities presented at the end of the chapter.
This material is broken down into four smaller sections: self-assessment questions,
discussion questions, essay questions and examination questions.
Notes
1. All solutions are presented in the order that the activities appear in the text.
2. Please note that these are indicative responses and are intended for guidance only. The
specimen answers provide no more than a brief summary of the major points that one might
expect to see in a good response. Please note that there may be alternative responses that are
equally valid.
3. Additional support materials can be found at the web site that accompanies the text:
www.pearsoned.co.uk/bis.
4
CHAPTER 1
Basic concepts understanding information

Activities
Activity 1.1
From the point of view of a student at a university, which of the following might be
examples of information? Which might be examples of data?
(a) the date (data);
(b) a bank statement (information);
(c) the number 1355.76 (data);
(d) a National Insurance number (data);
(e) a balance sheet (information);
(f) a bus timetable (information);
(g) a car registration plate (data).
Most of the items listed are open to interpretation. It could be argued, for example, that a bus
timetable is an example of data. However, if the timetable provides information concerning
services to or from the campus, then it might be considered an example of information. The
point of the activity is to emphasise the importance of context.
Activity 1.2
When information is used effectively, it can bring about many of the improvements listed
below. State and explain why each of the items listed illustrates a tangible or intangible value
of information:
(a) improved inventory control (tangible);
(b) enhanced customer service (intangible);
(c) increased production (tangible);
(d) reduced administration costs (tangible);
(e) greater customer loyalty (intangible);
(f) enhanced public image (intangible).
In simple terms, this activity is intended to emphasise the notion that the tangible benefits of
information can often be measured in terms of financial value. Items (a), (c) and (d) might be
considered tangible benefits since it would be possible to quantify the benefits realised. As an
example, if an organisation acts on certain information, with the result that administration costs
are halved, then we could suggest that the information has a value equivalent to half of the
companys administration costs.
5
Bocij, Greasley, Hickie, Business Information Systems, Fourth edition, Instructors Manual
Activity 1.3
Using the Internet as a resource, find three case studies of the value of information in the
context of a business organisation. As an example, you might locate a news story in Computer
Weekly (www.cw360.com) describing the savings made as a result of implementing a new
stock control system.
This activity is intended to reinforce the concept of the tangible/intangible value of information,
and the notion that value can often be measured in financial terms. In addition, the activity
introduces students to a valuable resource (Computer Weekly is the leading magazine for IS/IT
professionals). This activity might also be used as an introduction to the use of the Internet as an
information resource.
Activity 1.4
Consider the role of informal communication within an organisation such as a local government
department or hospital.
1. In what ways can informal communication support the day-to-day activities of the
organisation?
2. How important is the role of informal communication within the organisation? Could the
organisation function effectively if informal communication were restricted?
3. How can informal communication be controlled or harnessed for the benefit of the
organisation?
4. What negative results might occur if overly strict controls are imposed on informal
communication?
1. Students might be expected to arrive at quite lengthy lists of items in response to this
question. Some examples of appropriate responses include the following:
Can be used to find solutions to problems at a local level, for example, within a
department.
Can help to improve the overall efficiency of staff; for example, senior staff members
might provide advice and guidance to new members of staff.
Allows information to be transmitted between members of staff quickly. However, a

disadvantage is that information can become distorted.
2. A strong case can be made for the argument that organisations require informal
communication in order to function effectively. Informal communication enables the
members of an organisation to respond to events quickly and appropriately. Some
appropriate examples include the following:
In highly competitive industries, informal communication can be used to gather

intelligence concerning rival organisations. A casual conversation with a supplier, for
example, might reveal information concerning a rivals products.
As more organisations adopt an approach based on centralising resources, more reliance

is placed on informal means of communication. As an example, many banks and
building societies now operate call centres, allowing customers to carry out transactions
and make enquiries via telephone. Since the needs of customers are likely to vary a
great deal, informal communication serves two purposes: it allows customers to express
6
their individual needs and allows the organisation to provide a response tailored to the
specific requirements of the customer.
New members of an organisation are often assigned mentors. The role of the mentor is
to provide advice, guidance and information as the new staff member acclimatises to
his/her new position. One of the reasons for assigning a mentor to a staff member is
because much of the advice and information required by new staff members will not be
found in formal company documents. For example, a company handbook would be
unlikely to hold answers to every possible question a new employee might have.
3. Again, students might be expected to arrive at quite lengthy lists of items in response to this
question. Some examples of appropriate responses include:
Newsletters can be used as a forum for staff and management to express their opinions.
Many organisations allow employees to put forward suggestions for new products or
improved services. As an example, Rolls-Royce encourages employees to approach
supervisors and managers with suggestions as to how the company can improve its
products and services. Prizes are awarded to employees who put forward an idea for a
new product or a means of reducing costs.
Sales organisations often assign a member of staff to a specific group of clients in order
to create and sustain good business relationships. Over time, the sales person will begin
to learn about each clients particular needs, enabling the organisation to offer a better
service to individual clients. In turn, the client is likely to remain loyal to the company
as all of his/her business needs are being met.
4. It is worth pointing out that it would be impossible to eliminate informal communication

entirely from an organisation; for example, one could never prevent employees from
meeting at lunchtimes or social events.
As the earlier questions should have helped to make clear, the overall efficiency of the
organisation may be reduced if informal communication is restricted. Although extreme,
consider the example of a sales assistant in a supermarket needing to write a formal memo in
order to find out the price of an item. In addition to reducing the efficiency of the organisation,
this would also lead to a loss of customer satisfaction and a corresponding reduction in sales.
This example should highlight an important point: attempts to restrict informal communication
may impact on a wide variety of areas, ranging from customer satisfaction to productivity.
Although a great deal of research has been carried out in this area, common sense should also
make it clear that human beings require some form of social contact with others. By reducing
informal communication, one is likely to limit the contact that employees have with others. In
turn, this is likely to reduce morale, which will almost certainly have an adverse effect on
productivity.
As a final note for this question, it should be pointed out that organisations may sometimes need
to place controls over informal communication. As mentioned in the text of the book, informal
communication can lead to inaccurate or incomplete information being transmitted to a large
number of people. Unfounded rumours, for example, might easily harm staff morale or reduce
public confidence in the organisation.
7
Activity 1.5
Visit the web sites of two different online booksellers. For each example, assess whether the
information provided about a particular book is of good or poor quality. Explain your
reasoning with reference to the characteristics of information described in this chapter, in
particular, in Table 1.1. Does the information provided differentiate between the offerings of
the companies?
This activity shows how Table 1.1 can be applied to one example of decision making. It shows
how, of all the elements of information quality in Table 1.1, only some will be relevant in all
cases. Before looking at the web sites, students should be encouraged to list which factors they
think are important when selecting a book, e.g. relevance, depth, clarity, price, recency etc.
Suitable web sites to look at are Amazon (www.amazon.com) and, in the UK, BOL
(www.bol.com), WH Smith (www.bookshop.co.uk) and Streets Online (www.streetsonline.
co.uk).
Students should then select one or two books and compare them across the sites for the criteria
they have identified from Table 1.1.
Activity 1.6
Classify the following decisions by type (structured, semi-structured, unstructured) and
organisational level (strategic, tactical, operational). In addition, determine whether or not the
decision-making process could be automated, and, if possible, describe the name or type of BIS
(business information systems) used.
(a) At what level should we set the budget for the next year?
(b) Does this customer qualify for a discount on a large order?
(c) How should we deal with a takeover bid?
(d) Should we employ more staff to cope with an urgent order?
(e) Should we expand abroad?
(f) Should we launch an advertising campaign?
(g) Should we take a short-term loan to help our current cash flow position?
(h) What new markets should we move into?
(i) What should we do about a faulty machine?
(a) Strategic (plus tactical elements): Can be partially automated by the use of spreadsheets and
accounting figures from previous years.
(b) Operational: Decisions can be taken automatically, on the basis of their credit history and
the size of the order. If it is a very large order then it can be reviewed manually, and
decisions can be tactical based on financial constraints.
(c) Strategic issue: Cannot be readily automated.
(d) Operational issue: Cannot be readily automated.
(e) Strategic: Cannot be readily automated.
8
(f) Tactical: Cannot be readily automated.

(g) Operational or tactical: Cannot be readily automated.
(h) Strategic: Cannot be readily automated.
(i) Operational: Cannot be readily automated.
The activity highlights the overlap between tactical and strategic decisions and that these types
of decision are difficult to automate.
Activity 1.7
Using the Internet, locate at least five definitions or descriptions of knowledge. What do these
definitions have in common and how do they differ from each other?
This is a research-based activity. A good way to approach this is by entering define knowledge
into Google. This will display an entry titled web definitions for knowledge. Students should
find a number of common themes in the different definitions given. Some examples follow:
Knowledge is made up (in part) of information, rather than data.
Knowledge involves elements such as reasoning, understanding, perception etc.
Knowledge draws on experience.
Knowledge can help to guide future actions.
There are different forms of knowledge.
Case Study 1.1: Letters to the dead and other tales of data dereliction
1. The case study identifies a number of problems with the way companies store and manage
information. Using your own words, identify and describe these problems.
2. According to the case study, Bill Gates has claimed that almost a third of information
workers time is spent searching for data. Why do you think this is?
3. What are some of the consequences of relying on inaccurate information? Refer to the
case study in your answer.
1. In general, the problems described in the case study point to deficiencies in the
data/information management processes and systems used by companies. This is not
necessarily a technology issue; it is more to do with the management of information
resources and the use of appropriate policies and procedures. Some examples that support
this argument are as follows:
Lazy sales staff entering data incorrectly. Staff should be monitored correctly and
procedures should be in place to check the accuracy of data as it is entered.
Advances in technology mean greater quantities of information are available but

managers do not organise it properly information overload?
9
There is a tendency to collect large quantities of data without regard for whether or not
it is needed/useful. Mention of information management professionals suggests that
these experts should be involved in (a) deciding what information to collect, (b) making
sure it is accurate, and (c) storing it in an organised manner.
Duplication of information caused by allowing individual departments to keep their

own copies of records, rather than keeping records centrally.
Companies do not know what information they have and how it is being used!
Information resources cannot be managed correctly if no one knows what they are.
Inaccurate assumptions are being made about the meaning of information (e.g. sales
spike), suggesting that it is not being processed/analysed correctly.
Company systems are unsuitable for handling companies data processing needs (e.g.
unable to hold separate addresses for joint account holders). Effective management
should/would have identified and corrected such a problem before it became an issue.
Data/information management processes and systems are unable to deal with new
requirements (e.g. delivering information more quickly and handling unstructured data).
2. This question is intended to introduce the notion of information overload in the context of
management. Following are some of the reasons why people spend a great deal of time
searching for information:
Too much irrelevant information exists; the required information is buried.
Time is spent finding out if the information needed actually exists.
Information is presented in a way that is difficult to understand, so it takes longer to

search for and identify the required information.
Information is badly organised, making it harder to search quickly.
Information is spread out across a number of locations (e.g. across departments).
Information is stored in different formats or presented in different ways.
3. Some examples drawn from the case study:

Negative publicity, loss of customer satisfaction: The families of deceased people would have
been distressed by receiving Dear Mr Deceased letters. Distress also caused by pension
leaver letters.
Lost business, cost of cleaning data: Listing customers as astronauts would cause insurance
company to lose potential sales. Database records need to be corrected.
Impaired productivity, loss of customer satisfaction: Case study points out that relying on
inaccurate information damages efficiency; at worst it can destroy relationships and hamper
efforts in crucial areas such as fighting fraud.
Public safety, damage to company image, damages: The safety of some people might be
jeopardised (letter containing the new address of a wife sent to her violent husband); the
company would have suffered negative publicity and was forced to pay cost of rehousing the
wife.
10
Case Study 1.2: Supply Chain: demand for more data has wide impact
1. Bad data can result in brand damage. Explain this statement with reference to the case
study.
2. The case study discusses a number of problems caused by poor quality information. Identify
and describe these problems with reference to the attributes of information quality.
3. Why do you think customers are starting to want to know more about the products they
buy?
1. The task is to give examples where poor data/information may impact on customer attitudes
and perceptions of a product, range of products or company. The case study gives several
suitable examples:
If customers are given the wrong information (e.g. measurements), they may be
dissatisfied with products and return them.
If customers want to know more about a product but the information isnt available,
they may lose confidence and go elsewhere.
If ingredients in food products are not identified properly, people may have allergic
reactions.
Data errors may cause companies to to ship the wrong product or quantity, or to
charge the wrong price. Customers may not receive the products they want, when they
want them and might be overcharged.
If data errors lead to product recalls, customers may lose confidence in the product or
brand.
2. Some of the problems highlighted by the case study include the following:
Information regarding measurements is wrong. Information is not accurate.
Information that customers want/need is not available (e.g. ingredients or environmental

impact). Information is not complete.
Companies shipping the wrong product or quantity, or charging the wrong price.
Information is not accurate.
Products are described and measured in different ways. Information is not in a form
allowing it to be shared with others. Can be argued that several possible attributes are
relevant, e.g. presentation and media.
Difficulties in making sure that the right parties hold the right level of information. Can
be argued that several possible attributes are relevant; e.g. level of detail is incorrect but
might also argue (depending on the content of the information) scope, conciseness and
appropriateness.
3. This is a discussion question. Some of the factors students might want to consider include
the following:
Increased sophistication of buyers. Customers have more specific requirements; e.g. we

no longer say I want a colour TV. Instead, we now say, I want a high definition, wide
screen LCD TV with built-in digital tuner.
11
Increased choice. Customers need to discriminate between products so that they can
narrow down their choices and find the best fit for their needs.
Influence of the Internet. It can be argued that Internet has helped to educate buyers,
making them more sophisticated (as above). In addition, the Internet has also increased
our buying choices. A few decades ago, we probably bought most goods within a small
distance of our homes; today, we can buy items from almost anywhere in the world.
The Internet has also affected our buying habits in that we tend to look more favourably
on products that are accompanied by good information (concise, relevant, complete
etc.). When we shop online, if information about a product is lacking or difficult to find,
we are likely to pass over that item and move on to the next choice. It can be argued that
this behaviour now extends to all of our purchases, whether made online or not.
Exercises (pp. 3031)

Self-assessment exercises
1.
What are the three dimensions of information quality?
Time, content and form.

2.
How can the value of information be measured?
The value of information can be measured in two basic ways:
By the improvements it brings to managerial decision-making (intangible value).
By attempting to place a financial value on the information (tangible value).
These points might be expressed with two simple formulae:
(Tangible value) value of information minus cost of gathering information.
(Intangible value) improvements in decision behaviour minus cost of gathering information.
3.
What are the functions of management?
A classic definition of the functions of management comes from Henri Fayol (18411925):
To manage is to forecast and plan, to organise, to command, to coordinate and to control.
Note that Fayols definition is often considered insensitive nowadays, few people would
appreciate being told that their managers command them. Instead, it is more appropriate to
place the emphasis on the notion that managers coordinate or facilitate the activities of staff.
In general, much of a managers work involves making decisions about the best ways to
achieve the organisations objectives. It should also be noted that there is a direct link between
a managers decision making and planning activities.
12
4.
What are the stages involved in making a decision?
Some models of decision making are based on four stages. Other approaches suggest that the
evaluation of the decision is a fundamental part of the process. The stages of decision making
are as follows:
Intelligence
Design
Choice
Implementation
Evaluation.
5.
How will a managers cognitive style affect the decisions that he or she makes?
In general:
A managers cognitive style will influence the type of information they require.
The analytical manager is suited to making regular, routine decisions where the rules
governing the decision are clear (structured decisions).
The intuitive manager is more suited to unstructured decisions, where the rules governing
the decision may not be clear.
The characteristics of analytical and intuitive managers can be summarised as shown in the
table below.
Analytical
Intuitive
More suited to structured decisions
More suited to unstructured decisions
High level of analytical thought
Relies heavily on prior experience,

judgement and intuition
Can provide detailed justifications for

decisions
More willing to accept qualitative information
Prefers quantitative information, will often

overlook qualitative information
Examines situations as a whole, taking a

holistic view
Examines situations at a high level of detail,

but may overlook wider issues
6.
Explain how the concept of knowledge management relates to data and information.
Students should distinguish knowledge from information by explaining that data is transformed
into information, but knowledge is required to interpret and act on the information.
The answer should distinguish between explicit knowledge (e.g. how to deal with a customer
complaint) and tacit knowledge (e.g. what actions to take, given a set of sales figures).
13
7.
What differences in perspective about managerial decision making are introduced

by the e-business concept?
The e-business concept has led to top organisations providing an infrastructure for delivering
good-quality (relevant, timely, in-depth, across the whole business environment) information for
managerial decision making. The e-business concept involves connecting an organisation with
the whole of the business environment shown in Figure 1.2 (p. 16), i.e. it provides more timely
information flows about customers, suppliers, employees and external influences.
On a practical level, information is made available to employees through intranets, to suppliers
through extranets and to customers through extranets and the public web site. This information
is delivered through web browser or e-mail alerts/newsletters.
8.
In brief, what is knowledge?
From the text: knowledge involves harnessing a persons unique abilities, such as his/her
perceptions, experiences, intuition and analytical skills. When these abilities are combined with
the information a person holds, this represents knowledge. In other words, knowledge can be
thought of as the combined result of a persons experiences and the information he/she
possesses.
Discussion questions
1.
Some people argue that employees should be restricted in terms of the information
they have access to in the course of their duties. Others argue that they are able to
work more efficiently if they have access to all of an organisations information
resources. Using relevant examples, make a case for one side of this argument.
Some of the points that might be raised are shown in the table below.
For open access
Against open access
It may not be possible to determine what

information an employee might need.
Preventing full access may hinder the
employee when carrying out his/her
duties.
Organisations have a duty to protect

sensitive information; customers and
clients would lose confidence in the
organisation if it became known that their
privacy was not protected in some way.
Wider access to information may help the

organisation to become more
accountable to employees and
shareholders.
Allowing free/open access to all

information might lead to abuses,
e.g. employees using information for
personal gain.
Providing wider access to information

can help employees to examine issues
from a wider perspective. An improved
understanding of the organisation may
help to foster innovation.
Open/free access may harm the

organisation's competitive position since
rivals may gain access to sensitive
information.
Providing open/free access to

information can make it harder to locate
specific items. In addition, it might lead to
unnecessary confusion.
14
CHAPTER 2
Basic concepts an introduction to business

information systems
Activities
Activity 2.1
What information systems might be found in your newsagents? For each system identified, list
the people, hardware, communications, software and data resources involved.
Examples of the kinds of systems that might be found include those indicated in the table below.
Note that the lists given contain a limited number of examples and are not intended to provide a
comprehensive solution.
Resource requirements needed for different systems in a newsagent
Resources
Billing system
for newspaper
deliveries
Stock control
system for other
items sold in store
National Lottery
(Lotto) ticket sales
system
Hardware
resources
Personal computer,
printer
Personal computer,
printer
Specialised terminal
with integral printer,
communications
equipment (e.g.
modem and leased
telephone line)
Software
resources
Billing software (will

include facilities for
data entry and a
variety of reports, e.g.
account details for
individual customers,
summary reports etc.)
Stock control software

with facilities for
recording sales and
deliveries. Software
may also account for
invoices paid and
received. Package will
also produce a variety
of reports, e.g. stock
for reorder, summary
of sales etc.
National Lottery
terminals use
specialised software
that produces tickets,
records sales and
carries out other
functions, e.g. lucky
dip tickets, where
numbers are selected
at random
Supplier details,
e.g. contact
information, price
lists, stock availability
etc. Records of sales.
Records of current
stock held. Financial
data, e.g. whether or
not the newsagent
can afford to buy
given items of stock
Time and date

(restricts times when
tickets can be sold).
Customers selections
(of numbers).
Records of previous
draws (for awarding
prizes etc.)
Backup software
Data resources
Supplier data, e.g.

newspapers and
magazines delivered
each week. Customer
information, e.g. new
orders and
cancellations. Data
from delivery people,
e.g. customers, who
have or have not paid
22
People resources
Newsagent,
customers, delivery
people, suppliers
(i.e. distribution
company), sales staff,
suppliers of
equipment (for
support etc.)
Suppliers, sales staff,

suppliers of
equipment (for
support etc.)
Sales staff, suppliers

of terminal equipment
(for support etc.)
Activity 2.2
Using the Internet as a resource, locate at least two examples of the use of online processing
systems in business. As an example, both Sainsburys and Boots use incentive programmes
based on loyalty cards, in which customers can redeem points against purchases using
interactive kiosks.
This is a relatively simple task that is intended to make students appreciate the extent to which
such systems are used. Some examples that students might identify include these:
The ATMs provided by banks and other financial institutions.
The electronic tills used by supermarkets that can accept payment by credit card or Switch.
Many retailers use inventory control systems that monitor stocks across a number of stores.
These systems are capable of automatically reordering items when stocks fall below certain
levels.
Activity 2.3
Consider the framework of the Internet economy developed by the CREC (Center for Research
and Electronic Commerce) at the University of Texas. Give at least three examples of
companies for each layer in the framework.
There are four layers in the framework. CREC describes these layers like this (see
http://itc.mit.edu/itel/docs/2002/Internet_Map.pdf):
Internet infrastructure: including telecommunications companies, Internet backbone

providers, Internet service providers (ISPs) and other last-mile access providers.
Internet applications infrastructure: principally, software required for Internet services, but
also consulting and service companies hired to build web sites.
Internet intermediary: economic activity at the intermediary level includes service provided
by auction and aggregation providers companies that package or provide a forum for
economic activity, though they may not be involved in the activity itself.
Internet commerce: finally, the commerce layer includes companies that are engaged in
sales and transactions over the Internet.
23
Typical examples of internet infrastructure companies include: British Telecom (ISP and
telecommunications), AT&T (Internet backbone providers), AOL (ISP and backbone provider)
and Cisco Systems Inc. (hardware manufacturer).
Typical examples of applications infrastructure companies include: Microsoft (producers of
operating systems and web server, Internet Information Services [IIS]), Apache Software
Foundation (producers of Apache web server) and Sun Microsystems (developers of Java and
other critical hardware/software).
Typical examples of Internet intermediaries include eBay (auction site), Expedia (online travel),
CNET (content aggregators) and Google (portal and content aggregators).
Typical examples of Internet commerce include Amazon (e-tailer), Dell (hardware manufacturer
selling online) and iTunes (online entertainment).
Activity 2.4
The approaches used by companies such as Argos, Dell and eBay restructure the relationship
between manufacturer, retailer and customer to the benefit of all involved. Discuss this
statement with reference to the e-business and e-commerce concepts described in this section.
This activity asks students to identify some of the key benefits of e-business. Some typical
benefits students might be expected to identify are given below.
Manufacturer
Retailer
Customer
Can achieve economy of

scale even with niche
products because more
retailers to work with
Larger range of products to

offer customers
Larger range of products to

choose from
Reduced production costs

through better access to raw
materials, larger choice of
suppliers etc.
Can reach customers almost

anywhere; no physical
restrictions
Can access products and

services from almost
anywhere; e.g. UK buyer
can buy from USA
Can reach customers directly;

quick feedback on products,
easier to provide support etc.
Can provide customers with

improved customer support
through web site, e-mail etc.
Competition acts to reduce

prices
Can sell directly to customers
Reduced costs through

improved processes, e.g.
online payment systems
Easier to reach
manufacturer for information
and support
Case Studies
Case Study 2.1: Volvo trucks valuable early warning system
1. What are the benefits of Volvos warranty management system?
2. In general, how does the warranty management system help Volvo to be more competitive?
24
1. The case study attributes a number of benefits to the system:
Customer satisfaction is higher because warranty issues are handled efficiently and
quickly.
Fewer resources are needed when handling the repair.
Goods can be turned around more quickly.
Information from the system can be used to improve products.
The company gains a good reputation for its warranty support. This may also allow
prices to be raised in some markets, increasing profits.
The system makes it easier to identify certain kinds of problems, e.g. when certain parts
are used in combination.
The system helps to identify potential faults before they occur (trend analysis). This
helps to lower costs and keeps vehicles running for longer.
The system increases customer choice by allowing trucks to be produced to customers

specifications.
The system helps Volvos design and manufacturing teams react to after-market
problems with the trucks and prioritise design or production changes.
Warranty costs are reduced by up to 50% this increases profits and allows more
competitive pricing.
The system provides information that can be used to identify potentially fraudulent
claims.
Information from the system can be given to suppliers, improving business relationships
while helping the suppliers to improve their products.
2. Companies can gain an edge over their competitors in several ways. The case study shows
that Volvos warranty management system has allowed them to use four main approaches:
Making your products stand out. Building a reputation for good customer service allows Volvo
to distinguish itself from other truck manufacturers. The case study notes that some people are
prepared to pay high prices in exchange for good warranty support. Volvo also distinguishes its
products from other truck manufacturers by allowing customers to build trucks to their own
specifications.
Reducing costs so that prices can be lowered. The system allows warranty costs to be reduced
by up to 50%.
Creating innovative products and services. The system helps Volvos design and manufacturing
teams react to after-market problems with the trucks and prioritise design or production
changes. This means that improvements to products can be made very quickly, allowing the
company to stay ahead of competitors.
Making links with customers, suppliers etc. Giving information from the system to suppliers
helps to build strong business relationships; being Volvos business partner provides access to
information that allows the supplier to improve its products at a low cost.
25
Case Study 2.2: Airport check-in: board your flight by mobile phone
1. What are the advantages and disadvantages of mobile check-in?
2. How does being one of the first companies to adopt technologies such as mobile check-in
confer competitive advantage? Refer to the concepts covered in BIS and Strategic
Advantage in your answer.
3. What barriers are there to the widespread adoption of mobile check-in?
1. This question is intended to encourage discussion. Some points students might consider
include:
Advantages
Disadvantages
Convenient, e.g. no need to carry tickets,

text message reminders etc.
Must have a mobile phone to use

service.
Self-service approach reduces costs for

airlines. Can also be faster, more
convenient etc. for travellers.
Susceptible to problems like dead

batteries, broken phones etc.
Easier for passengers to change seat

selection, check-in etc.
Some people will not want to use service

or will be unable to use it, e.g. elderly.
Advanced services (e.g. Skip) allow

passengers to skip check-in.
2. This question asks students to apply concepts covered in the chapter to the case study. In
brief, some of the points that might be made include the following:
The introduction of mobile check-in as a new service offered by airlines is a good example of
product innovation. Being an early adopter of the technology may encourage further innovation
because the company will have a lead with regard to developing new products and services (e.g.
the Skip service).
Until every airline offers the service, companies like Finnair can differentiate their products.
Since mobile check-in helps to automate the process checking in, producing boarding passes
etc., companies using it can realise a cost reduction.
Being one of the first companies to offer mobile check-in provides an opportunity to form
strategic alliances with other companies, such as mobile phone operators. This will help to raise
entry barriers since companies wanting to offer mobile check-in later on will have to invest in
the necessary technology, make their own alliances with mobile phone operators and so on.
3. The case study describes several possible barriers:
Governments may need to pass/alter legislation allowing mobile check-in and related
services to be used legally.
26
Agreements will need to be reached with all major airport authorities to allow mobile
check-in and related services to be used (e.g. airport authorities require paper boarding
passes to be used).
Standards will need to be developed/agreed for use of mobile check-in.
Mobile devices need to have the required features by default so that customers do not
need to install software.
Mobile phone operators will need to change their pricing policies to make the service
affordable.
Three factors not mentioned within the case study should also be considered:
The security implications of mobile check-in will need to be evaluated; making it easier
for people to skip or cut down various parts of the check-in and boarding processes may
impact on security.
The use of mobile check-in depends on the majority of passengers owning mobile
phones. In poorer regions of the world, not everyone owns a state-of-the-art mobile
phone.
Some people will be unable/unwilling to use the service (e.g. disabled, elderly).

1.
Answer the following questions in relation to your college or university:
(a) What are the institutions objectives?

(b) Identify a range of typical inputs, processes and outputs.
(c) What feedback mechanisms are in place and what kinds of information do they
produce?
(d) What control mechanisms exist?
(a) The institutions mission statement provides a summary of aims and objectives. As an
example, the following statement or one very much like it is likely to be found in many
college and university literature:
The University of XXX exists to provide equal access to quality education for all students.
Such a statement can be broken down as follows:
Although this may seem obvious, as a whole, the statement suggests that the primary
purpose of the institution is to deliver education and training. However, this statement also
suggests activities that the college or university will not undertake. In an established college
or university, for example, such a statement would imply that research is considered
secondary to teaching.
27
The term equal access implies that one objective of the institution is to cater to the needs
of all students, irrespective of gender, ethnicity, religious beliefs or age. Furthermore, the
use of the word access suggests a proactive approach towards recruiting students. In other
words, the institution aims to create opportunities for students to study.
The term quality education implies that the institution will seek to ensure that the highest
standards of teaching and learning are maintained. Obviously, such a statement is made
within certain constraints, such as budget.
(b) Students should be encouraged to take a methodical approach to the task and should
attempt to link items together. Although the table below contains only a small set of
examples, it illustrates the approach that should be taken.
Inputs and outputs for the different processes in a college or university

Process
Inputs
Outputs
Enrol students
Student information (e.g. individual

names, choice of course)
Record of all students enrolled

on course
Course information
(e.g. places available)
Statistics for internal use
Timetable for course
Programme of induction events
Availability of facilities (e.g. rooms)
Feedback on induction
programme
Student induction
Questionnaires etc. for gathering

information on students
Join library
Students enrolment details

Students course details
Statistics for government use
Students library account
A college or university will have a large range of feedback mechanisms relevant to the wide
variety of processes that take place in a typical institution. Some examples are listed:
Enrolment data will be processed so that managers can carry out tasks such as identifying
courses for which the recruitment has not been good.
Student representatives will provide feedback information concerning individual modules

and courses.
The National Union of students (NUS) will regularly provide feedback information to the
institution concerning the welfare of students; for example, the NUS will represent the
students with their grievances against the institution.
All institutions will have internal quality committees that deal with issues ranging from the
quality of teaching to the condition of the institutions buildings.
There will also be a wide variety of different control mechanisms in place. Some examples
include the following:
Poor recruitment figures might be rectified by spending more on advertising, or altering the
hours of the course (so that it becomes more accessible to certain groups).
28
Complaints concerning student grades might be dealt with via a course committee meeting,
where a new marking scheme might be introduced, or additional cross-marking is
recommended.
A need to repair buildings or acquire new equipment might be met by adjusting budgets.
(c) and (d) Ideally, students will come to link the answers to (b), (c) and (d) as shown in the
example in the table below.
Inputs and outputs for the recruit-students process related to feedback and
control components
Process
Inputs
Outputs
Feedback
Control
Recruit students
Students
(and
student data)
Advertising
Enrolment
figures
Enrolment
Increase
advertising Alter
course times
Finance (for
advertising etc.)
statistics
Market
research
Staff (for student

guidance etc.)
Rooms (for
enrolment etc.)
2.
In what ways can information systems support a managers activities?
At the simplest level, students should recognise that information systems help managers to
make better decisions by providing information of high quality.
A more comprehensive answer might link the functions of management with managerial
decision making and the attributes of information quality. An example is given below:
Planning
3.
>>
Information systems can be used

to plan projects by providing
information for forecasts etc.
However, the information will only
be useful if it is relevant,
accurate, timely etc.
>>
Managers can make more

effective decisions regarding how
the project is structured, with the
result that the project is more
likely to succeed.
How can computer-based information systems help an organisation achieve a

strategic advantage over its competitors?
Students are asked to recall the basic competitive strategies of cost, leadership, product
differentiation and innovation. However, a more thorough response will include this list:
improving operational efficiency
raising barriers to entry
locking in customers and suppliers
29
promoting business innovation
increasing switching costs
leverage.
4.
Match each term to the correct statement.
Solution:
5.
1. input
examples include raw materials, energy or labour power
2. process
converts raw materials into a finished product
3. output
examples include information, a product or service
4. feedback
provides information concerning the performance of a system
5. control
adjusts the performance of the system
6. boundary
defines the scope of the system
7. environment
contains everything outside of the system
8. interface
describes exchanges between the system and its environment
What is the virtual value chain?
The virtual value chain (VVC) extends Porters concept of value chain analysis to the Internet.
Where Porters value chain generally deals with the production, marketing and supply of
physical products, the VVC is concerned with producing and marketing non-physical products,
such as subscription-based services.
Key concepts associated with the VVC are:
the marketspace, the virtual equivalent of the marketplace;
the argument that information can create new value for customers (i.e. it has more
value/benefit than simply supporting primary/secondary activities);
a process whereby companies move through three phases when adopting the VVC, ultimately
transforming them in fundamental ways. The phases are visibility, mirroring capability and
new customer relationships. In brief, companies begin by examining and altering physical
processes (visibility) before replacing them with virtual processes (mirroring capability) with
a view towards using information to deliver value in new ways (new customer relationships).
6.
What are transaction costs?
Transaction costs describe all of the costs associated with carrying out business transactions.
As an example, choosing and then paying for an item by debit card incurs a number of costs for
the retailer. These might include the cost of maintaining a showroom, staffing, advertising, bank
charges imposed for processing payments and so on. A typical transaction cost for making or
receiving a payment via a debit card might be as much as 3% of the value of the transaction.
30
One of the key business benefits of the Internet is that it acts to reduce transaction costs. It is
also possible to pass some transaction costs on to customers. As an example, a retailer like
Amazon has low transaction costs because it has no physical sales branches, no salespeople
and so on. This allows the company to pass discounts on to customers.
7.
Explain the reasons for the adoption of enterprise resource planning (ERP) systems
by organisations.
ERP provides a single package that replaces a number of separate packages. This allows
better integration between modules and simplified support and maintenance. The ERP system
typically supports several functional areas or different parts of the value chain such as inbound
logistics, manufacturing, distribution, sales and finance.
1.
Can each of the following be described as a system? For each item, try to identify at
least two inputs, processes and outputs. In addition, what feedback and control
mechanisms exist?
a human being
a plant
a house
a country
a computer.
The table below summarises the inputs, processes and outputs for the items listed in this
question. The list is intentionally contentious a great deal depends on how students interpret
each item. Some examples of the points students might make are given in the accompanying
table. Brief notes concerning each item are also given.
Inputs, processes and outputs for different systems

Item
Inputs
Outputs
Processes
Feedback
Control
Human being
Food Water
Oxygen
Carbon
dioxide Waste
products
Respiration
Nourishment
Autonomic (body
recognises need
for more oxygen)
Hunger pains
Increase
breathing
rate.
Ingest food
Plant
Water
Minerals
Sunlight
Oxygen
Fruit/seeds
Photosynthesis
Hibernation
Autonomic (plant
recognises need
for nutrients)
Autonomic (plant
recognises
changes in
climate and
temperature)
Plant
orientates
towards
sunlight
Plant varies
intake of
nutrients (for
storage etc.),
leaves shed
(not required)
31
CHAPTER 3
Hardware
Activities
Activity 3.1
Although use of mainframe computers has declined quite sharply since the middle of the 1980s,
many are still in use today. In many cases, retaining an existing mainframe system may be
considered more cost effective than introducing a new system. As an example, consider a
public utility that provides a service to a relatively stable base of customers. What are the
arguments both for and against retaining the current mainframe system?
In brief, some of the arguments that might be raised include:

FOR
The system is fully working. Since the customer base is fairly stable, the system is likely to
cope with demand in the foreseeable future.
Staff are already familiar with the system; a new system would require expenditure on staff
training.
The introduction of a new system would disrupt the organisations work.
There is no guarantee that a new system would be faster or more efficient. Indeed, there is
no guarantee that a new system would work at all.
Retaining the current system avoids unnecessary expenditure; resources can be diverted
elsewhere.
AGAINST
The system makes use of outdated technology. The organisations systems should be up to
date so that it can take advantage of modern technology.
A new system is likely to be faster and more efficient.
A new system may allow the organisation to provide new services or products.
A new system will probably be easier to maintain and expand than a mainframe.
As time goes on, it will become more difficult to maintain the current system; for example,
it will become difficult to recruit technical staff with the correct skills.
46
Activity 3.2
Using the Internet as a resource, find a case study that illustrates some of the problems that can
result when companies are forced to retain legacy systems. Alternatively, find a case study that
illustrates some of the benefits that can be achieved by replacing legacy systems. You may find
an industry publication such as Computer Weekly (www.computerweekly.com) a useful
source of information.
This is a research-based activity. The aim of the activity is to reinforce some key points related
to legacy systems. The two most important points are as follows:
It is sometimes not possible to move away from a legacy system because so much has been
invested in it, or the costs of implementing a new system are prohibitive.
New systems tend to be based around cheaper and more powerful equipment that is easier to
use. This often leads to large cost savings across a range of areas, e.g. training, maintenance,
insurance etc.
Activity 3.3
Using the Internet as a resource, locate two examples of companies that are currently selling
minicomputers or servers. From promotional material and case studies explain how servers are
suited to certain applications.
As with the previous activity, this exercise is intended to underline some of the changes that
have taken place over the last four decades. A search using the terms server supplier highlights
well-known companies such as Sun, Dell and Compaq Hewlett-Packard. This shows that there
is still a relatively healthy market for such equipment.
A minicomputer can be used to perform calculations and carry out other tasks that are beyond
the abilities of a personal computer. Minicomputers are often used as the foundation for
networks that consist of hundreds of clients. This is because a minicomputer can handle requests
for data and services from a large number of clients without a loss in performance.
Minicomputers are often used for applications where there is a need to carry out intensive
processing tasks on an occasional or ad hoc basis. As an example, the programmers in a
software company may occasionally need to compile a large application or carry out a test using
a large quantity of data. Using a personal computer for this kind of work might not be
appropriate since it could take several hours to carry out various tasks. On the other hand, it
would not be appropriate to purchase a mainframe when it might only be needed a few times a
week! In these kinds of cases, a network based on a minicomputer provides a good compromise.
For instance, programmers could develop an application using a personal computer and then
borrow the superior processing power of the minicomputer for the few moments it takes to
compile the application.
Unlike mainframes, modern minicomputers are very flexible and can be applied to a wide
variety of tasks. Since they are based on a relatively modern technology, minicomputers are far
less expensive to purchase, maintain and operate than a mainframe.
47
Activity 3.4
Using magazines and the Internet as sources of information, produce a simple guide to buying a
digital camera. Avoiding technical jargon as far as possible, outline the features a buyer should
look for. In addition, make a recommendation for an entry-level camera and one aimed at a
professional user.
Some of the issues that should be considered include the following:
The image resolution of the camera; students should be careful to distinguish the somewhat
misleading effective resolution of a camera from the genuine resolution of the chargecoupled device sensor.
Digital vs optical zoom; high-quality cameras offer an optical zoom facility.
Storage media and capacity; high-quality models can use a variety of storage media with
large capacities.
Good-quality cameras can accept and use standard camera accessories such as lenses and
filters.
Good-quality cameras tend to have a long battery life and can often make use of a variety of
power sources.
Good-quality cameras will have a range of connectors so that images can be transferred to a
personal computer, displayed on a television, sent directly to a printer and so on.
Activity 3.5
Using the criteria described in this section, select the most suitable type of input device to
perform these functions:
entry of an application for a loan, received on a paper form, into an operational system for
processing loan applications;
entry of details of a house for entry into a system for estate agents;
entry of details collected in a ward visit by a hospital consultant;
a field map from a geologists survey into a mapping system.
The suitable devices for each of these functions are listed below:
Entry of an application for a loan, received on a paper form, into an operational system for
processing loan applications
An optical scanner should be used for scanning in forms. A bar code reader may also be used to
identify details of the loan application.
48
Entry of details of a house for entry into a system for estate agents
A manual keyboard will be typical for house details, with a digital camera used for
photograph(s).
Entry of details collected in a ward visit by a hospital consultant
A touch screen accepting information from a stylus is increasingly used in these applications.
A field map from a geologists survey into a mapping system
An optical scanner would give a crude representation. A graphics tablet would be used for a
more accurate representation.
Activity 3.6
If you use a PC running Microsoft Windows, choose Display from the Control Panel available via
the Settings section of the Start Menu. Referring to the section above, examine the options
available to configure and improve your monitors output.
No solution required.
Activity 3.7
Using the criteria described in this section and using numerical specifications, select the most
suitable type of screen output device and configuration to perform these functions:
a business analyst involved in using a spreadsheet to model a companys financial

performance;
a student using a PC to produce assignments;
a web site designer;
a personal assistant to the director.
Note that Table 3.2 on p. 108 may also be useful for this activity.
The suitable devices for these functions are listed below:
A business analyst involved in using a spreadsheet to model a companys financial

performance:
A graphics card supporting a reasonably high resolution of 1200 by 768 pixels would be
appropriate.
A student using a PC to produce assignments:
For basic word-processed assignments, a standard resolution of 800 by 600 pixels will be
adequate and is supported by all modern graphic cards.
49
A website designer:
An super video graphics array (SVGA) monitor and card (1600 by 1200 pixels) supporting
photo-realism (16 million or 32 million colours).
A personal assistant to the director:
Similar to those for the student using a PC to produce assignments.
Activity 3.8
Using the criteria described in this section, select the most suitable type of printer for these
applications:
a student on a business course with a limited budget;
a shared workgroup printer for 10 people;
proofing magazines;
printing duplicate copies of invoices.
A student on a business course with a limited budget:
An inkjet printer will provide reasonable quality for assignments, will be relatively economical
and the low print speed will not be a problem.
A shared workgroup printer for 10 people:
A laser printer will be required for the throughput required.
Proofing magazines:
A colour laser printer will be required.
Printing duplicate copies of invoices:
An impact device such as a daisy wheel printer is required.
Activity 3.9
Using the criteria described in this section, select the most suitable type of storage device (with
numerical specifications) to perform these functions:
a backup device for a student working on their dissertation;
a backup device for a designer transferring large files between their home and work offices;
a graphic designer who requires large graphics to be held in memory;
web pages on a web server.

50
A backup device for a student working on their dissertation:
A floppy disk (1.44 Mb capacity) or, for a larger dissertation incorporating graphics, a CDRecordable or Rewritable (640 Mb capacity).
A backup device for a designer transferring large files between their home and work offices:
A CD-Recordable or Rewritable.
A graphic designer who requires large graphics to be held in memory:
256 Mb RAM minimum.
Web pages on a web server:
Magnetic disk storage usually measured in gigabytes.
Activity 3.10
Since this book was published, the clock speed of processors will have increased significantly.
Using a site that reviews hardware such as CNet (www.cnet.com) or ZDNet (www.zdnet.com)
select the best processor specifications for:
an entry-level cheap and cheerful basic PC;
a high-end PC for a graphics designer;
a web server.
No solution required.
Activity 3.11
To check your knowledge of the different types of hardware introduced in this chapter, match
the descriptions of software on the left with the specific types of software on the right.
51
Hardware descriptions
Hardware types
1. Store programmes and data in a PC when

it is powered down.
(a) RAM;
2. Store data for fast access when the

computer is running.
(b) laser printer;
3. Access 25,000 clip-art samples for

incorporating into presentations.
(c) floppy disk;
4. Backing up company financial data.
(d) fax-modem;
5. Automatically reading the ISBN of a book.
(e) CD-ROM;
6. Performing calculations of company profit

and loss.
(f) bar code reader;
7. Obtaining hard copy of a spreadsheet to

discuss with your accountant.
(g) Intel Pentium processor;
8. Connecting to the Internet.
(h) CDRW or tape streamer;
9. Taking data home to analyse on your PC.
(i) local area network (LAN);
10. Joining five PCs together.
(j) server;
11. Storing data to share between users on

five networked PCs.
(k) hard disk drive.
Solution: 1 (k), 2 (a), 3 (e), 4 (h), 5 (f), 6 (g), 7 (b), 8 (d), 9 (c), 10 (i), 11 (j).
Case Studies
Case Study 3.1: When systems converge but people dont
1. In brief, what is VoIP? If necessary, use the Internet to carry out any research you need.
2. What are the benefits of VoIP to a business organisation? Refer to the case study in your
answer.
3. Can you think of any disadvantages associated with this technology?
1. VoIP stands for Voice over Internet Protocol. It is a service that is used for transmitting
telephone calls over a network, such as the Internet. In order to use VoIP, both users must
be connected to the network and both must have an appropriate handset (or a microphone
and speakers) and a computer running a suitable software. The very latest systems do not
need a computer; they can be connected directly to a router and use wireless handsets.
52
2. The case study lists a number of significant business benefits as follows:
Replacing two networks with one reduces the amount of hardware needed to be bought
and maintained. In turn, this reduces other costs such as training.
IP-based phone networks are easier to manage, resulting in time and cost savings.
Call costs are reduced.
The system can be the basis for new applications e.g. unified messaging.
3. Some major disadvantages:
The company becomes reliant on its network system; any failure also means the loss of
telephone communications.
Staff need to be trained to handle new technologies.
Adopting this approach can result in conflict between departments (IT and telecoms).
Case Study 3.2 Did IT work? How Wall Street is eradicating downtime
1. Suggest at least three ways virtual computing can help an organisation to reduce costs.
2. The case study suggests that when you focus on recovery: the hardware and software
you buy becomes less important. How true is this?
3. In your own words, explain how virtual machines can be moved around, backed up, or
diverted to adjacent or remote systems.
1. Some ways in which virtualisation can reduce costs:
Virtual machines can be created to emulate legacy systems, removing the need to
maintain outdated equipment. Since a virtual machine often runs more quickly than the
legacy system being emulated, it can remove the need to migrate to a new, faster
system.
Developers can programme and test applications on several operating systems using
only a single PC.
Snapshots make it quick and easy to deploy new machines and install updates.
Virtual machines can make use of spare capacity, reducing the need to buy additional
hardware.
New software can be tested on a virtual machine before being installed on the
companys network. This reduces the possibility of crashing the network and makes it
easier to determine the source/cause of any problems.
2. This is only true to the extent that virtual machines can be created using almost any kind of
hardware/software platform. However, the following points should be considered:
Even if emphasis is placed on recovery, hardware and software must still be reliable.
Poor quality hardware or buggy software, for example, may cause repeated crashes.
The text makes it clear that virtual machines run more efficiently when multi-core
processors are used. Hardware that is slow or inefficient may make virtual machines
53
unusable. After all, the case study states, If a system is on, but running slowly, it is, in
effect, down.
The views of Steve Randich are based on a faulty assumption: robustness no longer
needs to be engineered, at great expense, into the application or its operating system.
Robustness describes the ability of a system to carry on working in spite of errors,
partial failures or abnormal conditions. In terms of software, this usually means that an
application should be able to cope with erroneous data and other, unexpected problems.
An unstable operating system that crashes frequently will not become more reliable
because it runs on a virtual machine it will remain unreliable and will continue to
crash frequently. In this way, it is clear that the software you buy is important.
3. Two features of virtualisation technology allow these actions:
Virtual machines allow the use of snapshots disk files containing an exact image of
the virtual machines memory and the contents of its hard disk at a specific point in
time. These files can be used as backups and are easily copied to other machines.
Software such as VMWares Distribution Resource Scheduler (DRS) constantly

monitors available computing resources and can automatically set up new VMs using
spare resources if it detects a need, such as a sudden increase in web traffic.

1.
Which type of printing technology is best suited to the production of the following
documents?
(a) a business letter

(b) a programme listing
(c) a chart or diagram, printed in colour
(d) an internal memorandum
(e) an engineering diagram.
(a) Laser printer (or inkjet printer)
(b) Dot-matrix printer (or inkjet printer)
(c) Inkjet printer (or colour laser printer)
(d) Inkjet printer, laser printer (or dot-matrix printer)
(e) Plotter.
2.
Which input device is best suited to the following tasks?
(a) entering the details of bank cheques
54
(b) entering data from multiple-choice test papers

(c) entering data from labels or price tags
(d) entering a diagram, picture or photograph
(e) entering the text of a letter.
(a) Magnetic ink character recognition (MICR)
(b) Optical mark reader (OMR)
(c) Bar code reader
(d) Optical scanner
(e) Optical character recognition (via optical scanner).
3.
Describe some of the main characteristics of mainframes, minicomputers and

personal computers.
The table below contains a number of general points concerning the major characteristics of
mainframes, minicomputers and microcomputers:
Mainframe
Minicomputer
Microcomputer
Large physical size.
Very powerful.
Small physical size.
Extremely powerful.
Relatively inexpensive.
Commonly used for

large-scale data
processing.
Can be programmed
using more modern and
sophisticated tools than
those available for
mainframes.
Considered expensive to
purchase, maintain and
operate.
Suitable for wide range

of applications but
considered unsuitable for
large-scale data
processing.
Considered easier to use

than mainframe or
minicomputers.
Programming systems
enable non-technical
users to develop their
own applications.
Requires a carefully
controlled environment.
Little direct interaction

with users; users work
with terminals.
Programmes written at
low level, using punched
cards etc.
4.
In terms of physical size,

smaller than mainframe
computers but larger
than microcomputers.
Less expensive than
mainframes but still
beyond the reach of most
small organisations.
How can network computers help to reduce the cost of ownership?
Students should first refresh their memories as to what is meant by cost of ownership. As per
the text, The cost of ownership describes a range of different expenses incurred by purchasing
and maintaining a computer system. Such costs include the original cost of the hardware and
software, upgrades, maintenance, technical support and training.
55
The main ways by which network computers can help to reduce the cost of ownership are as
follows:
Network computers are relatively inexpensive to buy, maintain and replace.
The concept of zero administration considers that network computers can be configured and
managed via a central network server. In this way, administration costs can be minimised to
a point where they become almost negligible.
Network computers are normally used to service a small number of specific applications. In
view of this, training and support costs can be reduced significantly.
5.
List at least three common pointing devices.
Some typical pointing devices include the mouse, the light pen and the trackball.
6.
What is the meaning of each abbreviation or acronym listed below? Provide a brief
explanation for each of the items listed.
(a) MICR
(b) RAM
(c) BIOS
(d) CD-ROM
(e) CPU
(f) OCR
(g) COM
(h) PDA
(i) ROM
(j) DVD
MICR magnetic ink character recognition: used to interpret characters printed in a special
magnetic ink.
RAM random access memory: the volatile, working memory used by a computer system.
BIOS basic inputoutput system: the BIOS contains a software that controls all of the
computers most basic activities.
CD-ROM compact disk-read only memory: a computer storage device offering a relatively
high capacity. Compact disks are read-only media.
CPU central processing unit: a microprocessor that controls all of the computers main
functions and enables users to execute programmes or process data.
OCR optical character recognition: in general, describes a type of software that is used in
conjunction with an optical scanner. The software accepts a scanned document and attempts to
interpret printed or written characters.
56
COM computer output to microfilm: normally used to archive large amounts of information.
Information is sent directly from a computer to a device that produces microfilm negatives. COM
can also be used to refer to the serial (or communications) ports found on a typical personal
computer system.
PDA personal digital assistant: can be considered equivalent to an electronic personal
organiser.
ROM read only memory: a form of non-volatile computer memory, making it an ideal means of
storing the information needed for a device to function properly.
DVD digital versatile disk: similar to CD-ROM but with higher storage capacities, typically
between 4Gb and 7Gb, which is accessed at higher speeds than a CD-ROM.
7.
What are some of the benefits of flash drives?
Some of the benefits include the following:
Very small size
No moving parts, so robust and unlikely to break down
Relatively cheap
High storage capacities compared with other media, such as floppy disks
Fast transfer speeds compared with other media, such as floppy disks
Devices can be locked so that data are not deleted accidentally
Does not need a power supply of any kind (draws power from computer when necessary)
Retains data for up to ten years
Can be connected to other devices easily (e.g. PDAs0 and other types of personal
computer (e.g. compatible with both IBM PC and Apple Macintosh systems).
Does not need any special software to work with; automatically recognised by most personal
computers.
57
CHAPTER 4
Software
Activities
Activity 4.1
Develop an explanation of the purpose of and interaction between hardware, systems software
and applications software to someone who is unfamiliar with them. To help the explanation use
an example based on the creation of a spreadsheet to calculate wages based on hours worked
and refer to Figure 4.2. Start your description with when the PC is first switched on.
When the PC is first switched on, the BIOS systems software will be activated from ROM
hardware as part of the boot (start-up) process. The BIOS will start the operating system
software (Windows, Linux etc.) loading. The users will then select the applications software that
they want to use, or the operating system may have been set up to load commonly used
applications such as Microsoft Word on start-up. Both systems and applications software will be
loaded from the disk storage and loaded into RAM memory. The users will then select their own
documents to work on.
Activity 4.2
Internal documents can include inter-office memos, reports and summaries, such as minutes of
meetings. External documents can include invoices, sales brochures and correspondence.
Using these examples, identify some of the other characteristics of internal and external
documents. Are any of the characteristics you have identified common to both internal and
external documents?
External documents are a method of formal communication. These documents will tend to have
the following characteristics:
Often used to support communications with customers and suppliers
Have an emphasis on presentation
Use formal language
Usually highly structured, for example, an invoice may be based on a standard template.
Internal documents are often used as a means of informal communication. Some typical
characteristics of these kinds of documents include the following:
Normally used to support internal communications, typically as a means of passing

information from one part of the organisation to another
Comparatively little emphasis is placed on presentation
66
Tend to use less formal language
Tend to be less structured, although many organisations have a preferred format for certain
documents, such as internal memos.
Students should also refer to the attributes of information quality described in Chapter 1.
Activity 4.3
We have described some of the key features of a word processor. How should the owner
manager of a small business with 10 staff using word-processor software ensure they work
efficiently to produce good-quality standard internal and external documents?
For external documents, the company will want to present a consistent, quality image. To do
this, the letters produced and sent out from the company should have some of the key aspects of
information quality introduced in Chapter 1, namely, they should be
accurate no spelling mistakes or factual errors;
complete no omissions;
clear unambiguous and well laid out.
To achieve this, layout and style standards can be enforced using a word processor such as
Microsoft Word. For example, different types of letters such as invoice or dispatch notification
to customer can each have their own Word template (.dot). Standard Word styles can be used
for the company and a standard logo can be used. Each letter should be spelt or grammar
checked before it is sent. Training or education is then needed to explain to staff that the
templates are needed and checks would have to be periodically performed to check they were
used. For internal documents, similar procedures can be used, for example, for minutes of
meetings. More sophisticated tools for reviewing and annotating documents such as a budget
could also be used.
Activity 4.4
Using a package such as Microsoft Access, create a simple database that can be used to store
the names and addresses of your friends and colleagues. Make sure that the database includes
the following features:
a simple data entry form that can be used to add, edit or delete records;
at least one query, for example, a query to list all people living in a certain city;
at least one report, for example, a report to show the telephone number of every person
listed in the database.
No solution is required for this activity.
Activity 4.5
What are the benefits of web-based e-mail services, like those offered by Yahoo! and MSN, for
home users? Why are companies unlikely to use these services for business purposes?
67
Students are encouraged to think about the strengths and weaknesses of these services. For
home users:
These services are usually free or available at very low cost.
E-mail can be accessed from any computer, enabling users to read or respond to messages
in libraries, cybercafes, schools, universities etc.
Most services are easy to use.
Most services offer enhanced features, such as automatic virus scanning.

Note that many free e-mail providers restrict the use of their services for business purposes.
For business users:
The service is not controlled by the company. This can lead to a wide variety of problems,
e.g. the company cannot monitor or control staff use of e-mail.
The service may not be reliable. Many companies rely heavily on e-mail for internal and
external communications. Service disruptions could result in significant losses through lost
productivity, loss of customer confidence and so on.
The service may not be secure.
The service cannot be customised to meet the companys needs. Even if it can, this may be
very expensive.
The companys image may be harmed by its use of free services.
Activity 4.6
Using the simple web-page design tools included with packages such as Internet Explorer and
Netscape Navigator, produce a simple web page containing your c.v. If possible, make use of
colour, different typefaces, graphics, horizontal lines, bullet points and other features. When you
have created the page, save it and then view it from within the web browser. View the source for
the web page so that you can see how the design of your page has been translated into HTML.
No solution is required for this activity.
Activity 4.7
1. Find two examples for each of the rules proposed by Chris Anderson.
2. List the advantages of Google AdWords for small businesses.
3. The long tail is good for retailers and good for customers. Discuss.
1. This activity is intended to test whether students understand the principles behind the
concept of the long tail.
68
Rule 1: Make everything available

It is not always necessary to focus on retailing the most popular products; opportunities exist to
generate revenues by supplying a wide variety of niche items. Put more simply, companies can
choose to sell large quantities of a small range of items, or smaller quantities of a large range of
items.
Examples of this rule include Amazon and iTunes. Amazons online catalogue allows customers
to choose from hundreds of thousands of books. Customers can buy almost any title in print,
including rare or difficult-to-find items. The iTunes Store operates on a similar principle. As
well as supplying popular music tracks, such as chart singles and albums, iTunes also provides
access to a back catalogue of hundreds of thousands of tracks.
Rule 2: Cut the price in half. Now lower it.
Lower prices are needed to encourage customers to buy goods and services online. Companies
can offer such discounts to customers because retailing via the Internet reduces operating costs
significantly. In addition, unlike physical products, goods and services supplied electronically
cost little to produce. The cost of creating a copy of one or more MP3 music tracks, for instance,
is negligible.
Examples of this rule include the iTunes Store and services such as British Telecoms Vision
On Demand or Channel 4 Televisions 4oD services. The iTunes Store allows customers to buy
music tracks including entire albums for much less than the cost of a CD bought from a
bricks-and-mortar store. Customers can rent music or can make permanent copies by burning
tracks to CD using their own equipment. Both British Telecom and Channel 4 provide a similar
service in relation to movies, music videos and television shows. Customers select a programme
to watch which is then downloaded to the hard disk of a PC or PVR (personal video recorder).
Downloading a programme costs only a fraction of buying or renting a DVD and customers can
choose to make a permanent copy of a favourite programme, if they wish.
Rule 3: Help me find it
Offering a wide range of products raises the problem of helping customers to find the things
they want or need. What good is iTunes catalogue of six million songs, for example, if
customers cant locate the tracks they want to buy?
Amazon provides a range of tools aimed at helping customers find the books they want. Some
examples are as follows:
Lists of recommended books produced by other customers. As an example, fans of a

particular author might create a list of their favourite books and add brief comments.
A tool that produces personalised recommendations based on previous purchases and other
information, such as the customers likes and dislikes.
Lists of popular books sorted by genre, e.g. crime, romance, thriller and so on.
eBookers (www.ebookers.co.uk) is a site that helps customers find information about flights,
hotels and package holidays. Like Amazon, the site has a specialised search tool that allows
customers to search for holidays based on their specific requirements. The site also has other
features intended to help people find suitable products, such as lists of themed holidays and lastminute bargains.
69
2. This activity is intended to get students thinking about new business models being made
possible by the Internet. AdWords and AdSense are good examples of innovations that have
transformed the way in which products are marketed via the Internet.
Some examples of benefits related to AdWords and AdSense include the following:
Advertising can be targeted with a greater accuracy than ever before. This is because
advertisements are selected and displayed on the basis of an individual users Google
searches.
Since advertising can be targeted more accurately, it becomes economically viable to

market products and services to niche groups.
Companies have a high degree of control over the costs associated with an AdWord
campaign. This makes it easy to set, monitor and control budgets.
Detailed information about the efficiency of an AdWords campaign can be collected (and
even analysed) automatically. The information gathered is very rich, enabling the campaign
to be fine tuned easily. Gathering information in this way is usually described as
analytics.
Start-up costs for AdWords campaigns are very low, making them accessible to companies
of any size.
Allows new ways of marketing, e.g. use of affiliate marketing.
Spending on advertising is more closely linked with results (e.g. in affiliate marketing,
affiliates get paid according to how many products they sell).
3. As before, this activity is intended to test if students understand the principles behind the
concept of the long tail. Students are asked to identify some of the key benefits of the
long tail. Some typical examples are as given below:
Retailers
Customers
Can offer a greater range of products,

enabling diversification
Access to a wider range of products
Can reach more customers, including

niche markets that were previously
unprofitable
Increased competition leads to lower

prices and better service
Easier to locate/source products,

including rare/niche items
Physical location no longer important

can buy goods from anywhere in the
world
Allows a shift away from stocking only the

most popular products, helping to reduce
competition
By offering more products serves the

customer better
Encourages innovation, e.g. in finding

new ways to market products
70
Activity 4.8
To check your knowledge of the different types of software introduced in this chapter, match the
descriptions of software above with the specific types of software below.
Software descriptions
1. Allows you to create and edit company reports.
2. Finds information for an assignment from the World Wide Web.
3. The use of icons, bars, buttons and other image displays to get things done.
4. Sends information to a computer user in another country.
5. Creates and displays a worksheet for analysis.
6. Manages and supports the maintenance and retrieval of structured data.
7. Manages and supports telecommunications on a network of computers.
8. Detects and removes viruses.
9. A program or set of programs that controls the computer hardware.
Software types
(a) Spreadsheet; (b) graphical user interface (GUI); (c) operating system; (d) a search engine
such as Google accessed through a web browser; (e) Norton Anti-Virus Kit; (f) word-processor;
(g) e-mail package; (h) Novell Netware (a network operating system); (i) relational database
management system (RDBMS)
Solution: 1 (f), 2 (d), 3 (b), 4 (g), 5 (a), 6 (i), 7 (h), 8 (e), 9 (c).
71
Case Studies
Case Study 4.1: Cutting out paper speeds up the process
1. Why is it important to strip away old ways of working when introducing systems such as
those brought in by Liverpool Direct and Hyde?
2. Using the Internet as a resource, locate information regarding a simple document
management system, such as Scansofts PaperPort Office. How useful is such a product
likely to be within a department of a large company or a small business?
3. What is the likelihood that the paperless office will ever be achieved?
1. There are two main points that students should consider:
Managers must encourage the cooperation of staff in order for changes to be successful.
As an example, the case study mentions that senior staff were problematic because they
were used to doing things in a certain way. If senior managers are unenthusiastic about
a new system, other staff are likely to adopt the same attitude. It should always be borne
in mind that resistance to change can easily result in a project being abandoned.
Notice that in the case study a great deal of attention was paid to issues not related to
hardware and software. As an example, the one stop shops for handling customer
visits demonstrate how significant savings and efficiency gains can be made by
changing working habits. In other words, significant improvements can be made by
examining the way in which people work with technology; sometimes technology is
only a part of the solution to a problem.
2. A simple document management system can be established for just a few hundred pounds.
Some of the benefits of such a system include (some of these points are also relevant to the
case study) the following:
Less storage space is needed because paper copies of documents do not need to be kept.
Even if some documents need to be retained, they can be stored offsite because the
electronic versions are always available for reference.
It becomes easier to locate information. For instance, PaperPort allows users to search
the entire text of every document in the database within a matter of seconds.
Information can be handled more flexibly. For instance, documents can be organised in
different ways according to the needs of individual users. Since documents are indexed,
they can still be viewed, searched etc.
Information becomes portable. For instance, millions of pages can be stored on CD-ROM,
allowing people to carry records and other information with them wherever they go.
Information can be shared with others easily because documents are small enough to email or transmit via a network.
Documents can be used in new ways. For instance, a letter or memo received from a
customer can be converted into editable text so that it can be entered into a word
processor or other programs. This feature could be used for a number of purposes, such
as for producing a despatch note or an e-mail confirming the customers order.
72
Information from different sources can be combined easily. Photographs, correspondence,

web pages, e-mail etc. can all be stored in one location.
Documents can be annotated in different ways.
Packages such as PaperPort can be used to capture forms. This allows users to record data
previously entered on the form. They can also fill in a form on the screen.
3. This is a discussion question. The case study demonstrates that the use of paper can be
reduced significantly but there are always likely to be occasions when printed documents
are required, e.g. for legal reasons.
Case Study 4.2: Did IT work: putting Linux on desktops

1. What is open-source software?
2. What are the advantages and disadvantages of open-source software?
3. Carry out any research necessary to identify one or more open-source alternatives to the
following well-known applications/packages:
(a)
Web browser, e.g. Internet Explorer
(b)
Word processing and office software, e.g. Microsoft Office
(c)
Database, e.g. Microsoft Access or SQL Server
(d)
Web server, e.g. Microsoft Internet Information Server (IIS)
(e)
Media player, e.g. WinAmp
(f)
Operating system, e.g. Windows XP
(g)
Development tool, e.g. Visual Basic.
4. Using the Internet as a resource, find three additional examples where a large company or
government agency has adopted open source software.
1. Open source describes a software in which the source (program) code has been made freely
available to the public. In general, users can copy open-source programs freely and can
modify them to meet specific needs. Although open-source software is usually made
available, subject to a software licence, the terms of any licence are often very liberal. For
instance, it is usually possible to modify an open-source program and then sell the modified
software for profit, even though only a fraction of it can be considered original.
2. Some advantages of open source software are as follows:
Software is available free of charge.
Problems, such as security flaws, tend to be discovered and repaired very quickly.
In general, the software available is of very high quality.
73
It is often possible to customise software to meet specific requirements quickly and at low
cost.
Companies can retain ownership of any improvements or modification made to the

software.
Some disadvantages of open-source software are as follows:
The range of software available is quite limited, although this is steadily improving.
It can be difficult to keep software up to date since some applications change almost daily.
Support services, such as training, are sometimes costly or difficult to obtain.
The quality of some applications is variable; some applications may be badly written and
may require a great deal of time and effort to modify.
3. Some typical and well-known examples are given in the table below:
Application
Open-Source Alternative
Web browser, e.g. Internet Explorer
Firebird or Mozilla
Word processing and office software,

e.g. Microsoft Office
Open Office, Star Office
Database, e.g. Microsoft Access or SQL

Server
MySQL or Borland Interbase
Web server, e.g. Microsoft Internet

Information Server (IIS)
Apache
Media player, e.g. WinAmp
Media Player Classic
Operating system, e.g. Windows XP
Linux
Development tool, e.g. Visual Basic
Java
4. This is a research question.
74
Exercises (pp.178179)
1.
Produce your own definitions of the following terms:
(a) software
(b) operating system
(c) graphical user interface
(d) productivity software
(e) personal information manager
(a) Software can be defined as a series of detailed instructions that control the operation of a
computer system. Software exists as programs that are developed by computer
programmers.
(b) The operating system interacts with the hardware of the computer at a very low level in
order to manage and direct the computers resources. The basic functions of the operating
system include allocating and managing system resources, scheduling the use of resources
and monitoring the activities of the computer system.
(c) A graphical user interface (GUI) allows users to enter instructions using a mouse. The
mouse is used to issue instructions using menus and icons. The term WIMP (windows,
icons, mouse and pull-down menus) is often used to describe this kind of environment.
(d) General-purpose applications, often known as productivity software, aim to support users in
performing a variety of common tasks.
(e) A personal information manager can be thought of as an electronic personal organiser. The
program allows users to store, organise and retrieve personal information such as
appointments, personal expenses, telephone numbers and addresses, reminders and to-do
lists. These programs help managers to make more effective use of their time by helping
them to schedule appointments, organise meetings and record important information.
2.
Describe the five basic categories of office automation systems.
Electronic publishing systems support the production of documents, such as letters, reports
and catalogues. Some of the typical programs used include word processors and desktop
publishing packages.
Electronic communications systems support internal and external communications by

providing facilities such as e-mail and voice mail.
Electronic meeting systems seek to improve communications between individuals and

groups. Examples of these systems include those that support teleconferencing, teleworking
and group work.
Image processing systems allow users to create, edit, store and retrieve documents in an
electronic format. Document image processing (DIP) is an example of an image processing
system.
75
3.
Office management systems assist users in scheduling projects and tasks. Examples of
office management systems include personal information managers (PIM) and project
management software.
What is data mining and how can it bring benefits to a business organisation?
Data mining involves searching organisational databases in order to uncover hidden patterns or
relationships in groups of data. Data mining software attempts to represent information in new
ways so that previously unseen patterns or trends can be identified. In general, data mining can
help an organisation to maximise the use of its data resources. Some of the benefits that might
result from data mining operations can include new products or services, improvements to
existing products or services and the possibility of gaining competitive advantage through
information leadership.
4.
In an electronic database, what are the differences between queries and filters?
Queries can be used to extract data from the database according to a set of conditions specified
by the user. The results of a query can be stored in another part of the database so that the
original data remains intact. Queries can also be used to make changes to the data held, for
example, by performing calculations and storing the results. Filters, on the other hand, can be
used to remove unwanted data from the screen, displaying only those records specifically
required by the user. Filters do not alter or delete data but simply hide any unwanted items.
5.
Describe the different approaches to file processing. What are the main characteristics,
advantages and disadvantages of each?
The three basic approaches to file processing are as follows:
File processing. Data was held separately from the programs that made use of it. Programs
were limited in functionality as they were often created to perform a single task carrying
out new tasks often resulted in a need to create a completely new program. The process of
developing new programs each time that new requirements needed to be addressed was
considered expensive, time consuming and inefficient.
Database management systems (DBMS). Data was still held separately from the programs
that made use of it, but this approach offered greater flexibility while reducing development
and operating costs. The programs used included a range of general-purpose tools and
utilities for producing reports or extracting data. This meant that comparatively little
development was needed in order to undertake new tasks. This approach encouraged
organisations to introduce standards for developing and operating their databases.
Relational database management systems (RDBMS). Programs and data were stored
together to ensure the widest possible access to organisational data resources. This
approach placed great emphasis on the careful design of new systems to allow information
to be combined from numerous sources and to ensure that all systems offered high levels of
flexibility. The RDBMS approach can be seen as an extension of the DBMS approach with
the additional benefits to be gained by sharing data across an organisation and the ability to
combine data from several different sources.
76
CHAPTER 5
Networks, telecommunications and the Internet

Activities
Activity 5.1
Describe the order in which a message passes from one piece of hardware to the next when a
home user in the United Kingdom sends an e-mail via the Internet to someone in a large
corporation in the United States. You should refer to the following terms:
(a) mail server;
(b) client PC;
(c) modem;
(d) hub;
(a) network cable;
(b) network card;
(c) gateway server (telecommunications processor);
(d) router.
Treat the Internet transmission as a single stage.
The order in which messages are passed is from:

(b) client PC to
(c) modem to
phone line connected to an Internet service provider (ISP) which will be connected to the
Internet. The ISP will also contain many of the other devices referred to below that will be
present in the corporation in the United States, in particular, it will probably pass through (a) a
mail server, (g) a gateway server and (h) a router. The Internet links will occur by the message
being sent by many routers and over different media.
The Internet will be connected to a server in the corporation known as the
(g) gateway server that will be connected to the Internet and that will act as a firewall between
the corporation and the Internet beyond. It may be connected to the mail server by
(h) router (optional) and
(e) network cable linked to
(f) network card in the
(a) mail server this will be a separate server specifically used to process e-mail
(h) router used to route the mail message in the organisation along the correct network
segment
86
(e) network cable

(d) hub this may be used to link a segment of the network directly to a PC
(e) network cable, sometimes known as patch cable connected to
(f) network card in the
(b) client PC.
Activity 5.2
To provide an example of the services provided by cybermediaries and explore their viability as
businesses.
Visit the Kelkoo web site (www.kelkoo.co.uk), shown in Figure 5.6, and search for this
book, a CD or anything else you fancy. Explain the service that is being offered to
customers.
Write down the different revenue opportunities for this site (some may be evident from the
site, but others may not; write down your ideas also).
Given that there are other competing sites in this intermediary category such as Shopsmart
(www.shopsmart.com), assess the future of this online business using press releases and
comments from other sites such as Moreover (www.moreover.com).
Kelkoo provides a price-comparison service. The desired product is typed in and a database
is searched for suppliers who have this product. Different prices and other extras such as
delivery and guarantees are then listed. Typically the consumer will pick the supplier with
the lower price.
The main revenue will come from commission for products bought. Kelkoo will be an
affiliate of each of the e-tailers it is linked to. Payment options for affiliates typically
include the following:
(a) A small percentage of the product purchase price from the e-tailer from which the product is
purchased (the normal affiliate model).
(b) Payment for a lead or enquiry that does not necessarily result in sale. This is more
favourable to the affiliate and this is the arrangement negotiated by Kelkoo because of its
strength in comparison to e-retailers.
Other revenue models include general banner advertising on the site, together with
advertisements from the manufacturers of products (e.g. book publishers) or from the etailers (a small banner ad may be placed by the e-tailer to establish its credibility).
A problem with the business model of such intermediaries is that only a small percentage is
paid by the e-tailer to the intermediaries, so many transactions must occur. This is also a
problem for the similar service from Lastminute.com (www.lastminute.com). It is forecast
that the next stage will be a shake-out as many of the cybermediaries and B2B marketplaces
fail, leaving room for a handful of key players in each sector. As a consequence,
intermediaries such as Kelkoo are spending a large proportion of their funding capital on
advertising to build their market share.
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Case Studies
Case Study 5.1: Finders keepers
1.
Discuss the benefits and limitations of RFID technology.
Benefits:
Decreasing cost
Requires no line of sight between tag and reader.
Allows tracking and monitoring of virtually everything that moves.
Provides real-time information on movement of stock in supply chain permitting quick

response.
Disadvantages:
Costly compared to bar codes.
Limited range between tag and reader a few metres.
Case Study 5.2: The all-in-one thingumajig

1.
What reasons can you give for the lack of success of converged technological
devices?
Paying for facilities not needed
Lack of focus in marketing benefits of device
Best-in-class technology tends to be in specialised devices, not in converged technology
Cost of converged technology makes price too high for many potential customers
Unlikely to replace standalone devices so expensive as additional device

1.
Specify the components required for a client/server-based LAN for a company of 10

people.
The answer should start by identifying the need for a single, more powerful server computer to
share information between the staff. One server is sufficient due to the number of staff in this
instance. However, if there were more than 100 people, then the use of departmental or
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workgroup servers would be appropriate. The server could be connected directly to the Ethernet
network using a hub as the telecom processor.
Client PCs will be needed by the number of staff who require access to a PC. The PCs will be
connected to the network by a network interface card. Modems are not appropriate.
A bus arrangement ethernet is the most suitable for this number of staff given its low cost. A
token-ring network might be required for a larger company.
2.
Distinguish between a local-area network (LAN) and a wide-area network (WAN).
The answer should stress the difference in scale, with the LAN used to connect computers
within an organisation based on a single site and the WAN used to connect people on multiple
sites. Note that the WAN can be used to connect users who are in different organisations such
as suppliers and distributors of products.
3.
What are the main business benefits delivered by a local-area computer network?
Information sharing and collaboration between staff
Cost reduction through sharing of peripherals, such as printers and tape storage, and
through sharing of information which will result in lower consumable costs such as printer
toner and paper
A capability for new techniques of communication and control that are available through email
Students could use the 6Cs framework (Chapter 8) to indicate benefits such as cost reduction,
new capability, control by managers and improved communications.
4.
What are the main components of a telecommunications system?
The main components are the client access device and the remote device where the information
is stored and transmitted (the server). In between the origin and destination of communications
are the telecommunications processors such as routers which are used to select the best
pathway for information and the physical media used to transmit information (the cables and
other media such as satellite).
5.
What is the purpose of a network operating system?
The NOS is systems software that is used to manage the network. It controls the following:
Security through the use of user names and passwords
Sharing of information between users in different locations
Access to information according to the permission granted to different users
Communications and passing of data between different components on the network
Sharing of devices, enabling, for example, the backup to tape of data on the server, or printer
sharing
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6.
What is the difference between the Internet and the World Wide Web?
The Internet refers to the physical network that links computers across the globe. It consists of
the infrastructure of network servers and communication links between them that are used to
hold and transport information between the client PCs and web servers.
The World Wide Web is a method for storing (web servers), transmitting (the HTTP protocol)
and displaying (through web browsers) information across the Internet. It is effectively the
publishing mechanism.
Using the TV analogy, the Internet is the network for transmitting data globally, while the Web is
the method of delivering the content (channels).
7.
Describe the two main functions of an Internet service provider (ISP). How do they
differ from applications service providers?
Internet service provider (ISP) definition:

A provider provides home or business users a connection to access the Internet (1). They can
also host web-based applications (2).
Application server definition:
An application server provides a business application on a server remote from the user. ISPs
simply offer access and hosting; they do not typically provide access to specific business
functions such as finance services, which are provided by software providers such as Microsoft
and Oracle (although this may change as ISPs sell a wider range of software services).
8.
Distinguish between intranets, extranets and the Internet.
In summary, they refer to different levels of access the Internet is public, the intranet is
restricted to organisations and employees, while an extranet is restricted to access beyond the
company.
Intranet definition:
It is a private network within a single company using Internet standards to enable employees to
share information using e-mail and web publishing.
Extranet definition:
It is formed by extending the intranet beyond a company to customers, suppliers and collaborators.
9.
Describe the standards involved when a web page is served from a web server to a
users web browser.
Request page and deliver page (HTTP), transfer request and information (TCP/IP) and render
page in the browser (HTML).
TCP/IP definition:
The Transmission Control Protocol is a transport layer protocol that moves data between
applications. The Internet protocol is a network layer protocol that moves data between host
computers.
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HTTP (Hypertext transfer protocol) definition:

HTTP is a standard that defines the way information is transmitted across the Internet between
web browsers and web servers.
HTML (Hypertext Markup Language) definition:
HTML is a standard format used to define the text and layout of web pages. HTML files usually
have the extension .HTML or .HTM.
1.
Do you think that the introduction of client/server system has been worthwhile to
businesses?
This question is a straight analysis of the business benefits compared to the disadvantages of
client/server system. It is a specific instance of a general issue facing businesses with the
introduction of any new technology. Client/server system can be compared to a previous
situation in a business where the PCs are not networked or more likely, a mainframe is used
with character-based dumb terminals.
The key benefits of client/server system are as follows:
The cost-reduction available through downsizing to lower-cost hardware and software
Improved flexibility for the end users to deploy specialised applications and to write their
own applications using tools such as MS Excel or Access
Improved ease of use on the client side since traditional applications tend to be characterbased rather than using a WIMP interface (Chapter 4)
The main disadvantages are as follows:
The cost-reduction argument is not clear. The experience of implementing client/server

system is that although the purchase price of hardware and software may be lower, the
lifetime or total cost of ownership (TCO) may be higher. Much analysis of TCO has been
conducted by the Gartner Group (www.gartner.com) and is briefly referred to in Chapter
16. The high TCO of client/server systems arises from the cost of supporting them; since it
is easy to modify the configuration, it is also possible to stop applications working. This
problem is compounded by the range of networking drivers and software applications that
are available from different vendors. In a traditional mainframe environment, the software
would typically be sourced from a smaller number of vendors.
The stability or reliability of client/server system is questionable. There are many examples
of client/server system failures mentioned in the UK trade papers such as
www.computerweekly.co.uk and www.computingnet.co.uk. A recent example is that of
the roll-out of a UK-wide system for the National Westminster bank that is based on
Windows NT. This rollout has experienced technical difficulties resulting from software
incompatibilities.
The control and administration of traditional mainframe systems tend to be easier since they
are more centralised, with less opportunity for the end user to configure the software. This is
similar to the TCO argument.
The security of client/server systems may be less robust than mainframe systems.
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CHAPTER 6
Enterprise and functional BIS

Activities
There are no activities in this chapter.
Case Studies
Case Study 6.1: IT near its limit in satisfying customers
1. Explain the quote in the case study It is people-driven activities, not process-driven ones
that define the real success of an organisation.
Although information systems (IS) can store and process information, ideas about what
information should be stored, how information should be processed and what action to take
from information provided is taken by people.
In customer-facing situations, the customer experience is in large part determined by their
experience with the organisations staff. Although IS can support staff in their roles, decisions
on issues like design and dealing with customers are ultimately made by people.
Case Study 6.2: Retail applications of TPS by Sainsburys

1. Draw a diagram summarising the links between all the parties who access Sainsburys
transaction processing systems (TPS).
2. What benefits will Sainsburys gain compared to the time before the introduction of TPS?
3. Can you think of any problems with using TPS so extensively? What can be done to counter
these problems?
1. This diagram should be similar to Figure 6.2, with the following parties shown:
Customers (possibly via the Internet or through checkout assistants)
Suppliers (direct and indirect via merchants)
Branch managers and departmental managers at each branch
Distribution and logistics managers at head office and regional distribution centres.
2. Benefits at different management levels include the following:
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Operational:
Better customer service through better availability of products for customers and better
quality of perishable products
Lower cost of managing supply chain through just-in-time ordering in response to

fluctuations in demand.
Tactical:
Analysis of customer buying behaviour in response to sales promotions and loyalty card
schemes
Better matching of fluctuating demand and supply.
Strategic:
Increased customer loyalty from card schemes and better customer service
Related services such as banking that can be tied into TPS
More choice of and competition between suppliers
Better cost management.
3. The problems anticipated are those that occur when the system fails since it is so critical to
customer service. On the day of failure, losses in sales and loss of loyalty could result. The
solution lies in the careful testing of new systems and in building fault tolerance into new
systems. For example:
Ensuring the system can deal with a power failure (extra generators)
Providing dual or mirrored servers or disks that can take over in the event of failure
Well-defined service levels with the IT and networking suppliers to agree that problems
are resolved quickly
Ensuring that the local system is decoupled from the company network, so that if the
company network fails, the system in the branch can continue to operate.
Exercises (p. 271)

1.
What is the difference between an enterprise system and an enterprise resource

planning (ERP) system?
Enterprise systems and ERP can refer to the same concept. In this text the term enterprise
system refers to a collection of systems that aims to support business processes across
functions within an organisation. ERP is one of these systems that deals with internal
production, distribution and financial processes. Other enterprise systems include customer
relationship Management (CRM), supply chain management (SCM), supplier relationship
management (SRM) and product lifecycle management (PLM).
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2.
Evaluate the role of transaction processing systems (TPS) in an organisation.
TPS perform routine transactions that serve the operational level of the organisation, e.g. sales
order processing. Although supporting routine transactions, TPS are often essential to the
operation of the organisation.
3.
How can information systems support the manufacturing process?
Support for the manufacturing process includes:
Production planning and materials management. Information is provided on the progress of

work through the manufacturing system in relation to the due date for a customer order.
Enables plans to be developed for resources (e.g. labour, materials and equipment) needed
for production and to schedule order and quantity of components on a day-to-day basis.
Materials management approaches include Materials requirements planning (MRP), Just-intime (JIT) and optimised production technology (OPT).
Product/service design. A database of information required for aspects such as customer

needs and material costing for the design process. Computer-aided design (CAD) provides
graphic design assistance.
Facility design. Software allows the use of the statistical process control (SPC) technique for
quality control.
Computer-integrated manufacture (CIM). Provides a range of facilities coordinated over a

network system using the manufacturing automation protocol (MAP).
4.
Explain how decision support systems can support different parts of an organisation.
Decision support systems can support the full range of organisational decisions from strategic
through tactical to operational. We can draw on the following examples from different functions:
Manufacturing see question 6 of this section.
Marketing see question 8 of this section.
Finance identifying debtors.
5.
Describe the purpose of workflow management and groupware.
Both of these solutions are used to increase the efficiency of internal processes and are
implemented as intranet/e-mail systems. The type of processes include the following:
Procurement authorisation of new purchases
Production alerts about problems
Marketing managing customer interactions during purchase, managing product dispatch,

managing new product development
Finance integrating with procurement and marketing systems
Human resources online systems for booking holidays and training courses (administrative
workflow).
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6.
Which information systems tools can be used to support the marketing function?
Marketing information systems include:
Sales information systems. Employees involved in the sales area are required to identify
potential customers, negotiate the sale of goods and services with those customers and
provide a follow-up service. Systems are available to support each of these tasks. Prospect
information systems provide lists of potential customers by categories such as product
range or geographic area.
Distribution information systems. Speed of delivery is often an important aspect of service to

the customer. In order to ensure this, it is important that tracking systems that can locate
products during the distribution process are in place.
Sales order processing (SOP) systems. The sales order processing (SOP) system is usually
based in the financial area and provides a variety of data that can be used for marketing
purposes such as assessing the timing and value of orders from customers. These can be
used for applications such as sales forecasting, which is a major input into the sales
planning process. Other data supplied by the SOP system include inventory levels. If
inventory levels are high, then this might trigger a discount programme for a particular
product line.
Sales and campaign management information systems. The sales management information
system provides information in support of decision making at the tactical level. It will hold
information on such aspects as sales performance by geographical area, by product group
and by sales person. This information can be used to determine sales effort in different
areas and products and level of bonus payments to an individual sales person. The data
can also be used to investigate the strength of relationship between such factors as
customer types and product sales. This information can be used as the basis for a
marketing plan based around an advertising and promotion scheme aimed at a particular
customer segment (e.g. targeting designer label drinks at people in the 1825 age range).
Product pricing information systems. The price of a product will be dependent on a variety of
factors such as the cost of producing the product or providing the service, the required profit
margin and the price of competitors goods. The price may also be affected by a marketing
strategy to build market share by lowering the price. The product pricing information system
will collate information on costs and predicted market demand at different price points and
discounts in order to support the pricing decision. More sophisticated software in the form of
a pricing model enables the user to input various market and product attributes, and
provides a suggested price on the basis of relationships formalised in the model.
Sales forecasting information systems. At a strategic level it is necessary to provide sales

forecast data in order to help form the long-range strategic plan. Sales forecast data is
essential so that demands can be met and resources employed in the correct areas. For
instance, marketing needs to inform other functions such as operations of a predicted
demand so that they can organise their resources to meet this demand. The information
system is required because of the range of data that goes into the forecast and the need to
continually update the database in order that the forecast is as accurate as possible.
Marketing research and analysis information systems. In order to ensure that there is a
demand for the goods and services of the organisation, it is necessary to undertake market
research. For a new product this may include information on demographic changes and
customer feedback from questionnaires and interviews that indicate customer preferences.
Competitive tracking. Knowledge of competitors prices, products, sales and promotions is

an important factor in the development of a marketing strategy. For example, the
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organisation would need to consider its reaction to a competitors move to build market
share.
Telemarketing software. This software is designed to dial potential customers automatically

based on customer files maintained in a database. The software will also allow notes to be
stored on customer requests, generate follow-up letters and display information gathered on
the customer for reference as the call is taking place.
Geographical information systems (GIS). GIS are used to display information on maps.
Performance of distribution channels such as branches can be shown by colour coding
them. Colour-coded areas on the map can be used to show variation in the demand from
customers for products or the characteristics of people living in different areas such as
average disposable income.
1.
Discuss the concept of customer relationship management (CRM).
CRM covers the whole process by which relationships with customers are built and maintained.
CRM systems are designed to integrate the range of information systems that contain
information regarding the customer. These include applications such as customer details and
preference databases, sales order processing applications and sales force automation. The
idea is to acquire customers, retain customers and increase customer involvement with the
organisation.
Common applications which would be integrated in a CRM system include the following:
Customer data collection: This can include personal details such as age, sex and contact
address, also a record of purchase transactions undertaken in terms of factors such as location,
date, time, quantity and price. This information can be used by call centre staff to improve and
tailor their services to individual customers.
Customer data analysis: The captured data allow the categorisation and targeting of customers
according to criteria set by the firm. This information can be used to improve the effectiveness of
marketing campaigns.
Salesforce automation: The entire sales cycle from lead generation to close of sale and aftersales service can be facilitated using CRM.
2.
Workflow systems are currently mainly in large organisations. This is likely to

remain the case.Discuss.
To answer this question adequately requires a distinction between large-scale production

workflow systems and smaller scale administrative and ad hoc workflow systems. The former
tends to be for functions such as operational processing of customer services such as issuing a
loan or processing an insurance claim these tend to be the preserve of the large companies.
The latter are e-mailenabled administrative applications for purchase order processing or in
travel claims, for example. These could be used by small companies since the expenditure will
be justified by the cost. Given the above, the arguments against the first statement are weak,
but there are stronger arguments against the second statement. As more small companies use
e-mail and intranets and as the cost of administrative workflow falls, adoption in small
companies will grow. This is less likely to be the case with production workflow that is likely to
remain expensive for small to medium organisations.
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CHAPTER 7
An introduction to acquiring and developing BIS

Activities
There are no activities for this chapter.
Case Studies
Case Study 7.1: Licensing: how buyers can flex their muscles
1. Summarise the main differences between traditional software licenses and subscription
licenses including their respective advantages and disadvantages.
Traditional software licenses are purchased outright with a one-off payment giving the user the
right to use the software in perpetuity on as many machines as the licenses they have purchased
(ranging from a single PC to a site license covering all PCs or workstations).
On the other hand, subscription licenses allow the user to use the software only for the duration
of the subscription. If the user wishes to continue using the software, then the subscription must
be renewed at the required intervals.
Traditional Software Licenses.
Advantages include the following:
One-off payment for as long as the user wants to use the software
No need to lock organisation into long contracts.
Disadvantages include the following:
Need to keep careful track of licenses unless user has a site license
New versions of software may entail greater expense.
Subscription Licenses.
Advantages:
License management may be simpler.
Disadvantages include the following:
May wish to use the software for a longer or shorter time than that covered by the
standard licensing agreement
Costs based on price per server may become disproportionately high (may be better to
negotiate a capacity-based agreement)
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Software updates may incur unexpected additional costs
Need to continue to subscribe for as long as you want to use the software cannot take
a break from the license agreement and may not be able to delay version upgrades.
Case Study 7.2: Lascelles Fine Foods

1. Which method(s) of business systems software acquisition would you recommend to
Lascelles Fine Foods (LFFL)? Explain and justify your answer.
2. Assuming that LFFL decides to go down the route of purchasing off-the-shelf packages,
what steps do you recommend it takes to ensure that the applications which are selected
meet their requirements?
The questions have been based around the case study LFFL. This is a fictitious organisation and
is not intended to bear any similarity to an existing company, past or present.
1. The recommended acquisition method must satisfy the main feasibility criteria (economic,
technical, operational and organisational). LFFL has very little expertise in the acquisition
of information systems. There are no IS/IT specialists within the business and there is little
practical experience in the development of computerised information systems by end-users.
LFFL is also operating in a business with a relatively low level of uniqueness (i.e. the
probability that a suitable information system can be purchased is quite high).
Each of the alternative acquisition methods can be evaluated against the feasibility criteria
outlined above.
(a) Bespoke development. This can be done either internally (in which case, specialist staff will
need to be hired) or contracted out to a third party (a software house). Each feasibility
criterion will be taken in turn:
Economic. This acquisition method is expensive, especially so for LFFL. Given the
companys turnover, it is unlikely that the benefits to be gained outweigh the costs.
Technical. There is no doubt that a solution can be developed by employing the services
of a software house. Similarly, specialist staff can be recruited by LFFL either on a
permanent or on a contract basis. With either acquisition method, however, it will be
necessary for the IS/IT personnel to acquaint themselves very quickly with the way in
which LFFL operates.
Organisational. It is very probable that a bespoke solution will fit in with the day-today practices within LFFL since the solution can be designed around them.
Operational. Similarly, a bespoke solution can be designed so that it conforms to the

required speed, volume, usability and reliability parameters.
(b) End-user development.
Economic. While end-user development is good for developing personal or

departmental applications more cheaply than a normal bespoke solution, there is still the
opportunity cost of the normal business activities that those personnel will normally
carry out which must be undertaken by others.
Technical. Within LFFL, there is currently insufficient expertise to deliver the required
solution. It will need to either employ additional staff with the necessary skills or train
existing staff, or possibly both. In any event, costs will increase.
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Organisational. End-user developed solutions tend to be for personal or departmental

use. It is possible, therefore, that this acquisition method may concentrate on local
solutions at the expense of company-wide considerations.
Operational. There is a risk that, unless the end-user developer is particularly skilled, a
solution developed in this way will not have the required performance characteristics.
(c) Purchase of an off-the-shelf package. Packages may come in standard or tailored form.
While it may be useful to differentiate between them, the comments apply largely to both.
Economic. This acquisition method is the cheapest for any level of technical complexity
when compared with an equivalent solution acquired by one of the alternative methods.
Technical. As mentioned above, there appears to be nothing so specialised or unique

about LFFLs business that a packaged solution is incapable of dealing with. It may be
that some tailoring is required, in which case a vendor must be sought, who will
customise her or his own software.
Organisational. This is the greatest area of difficulty for this acquisition method. It may
be that organisational practices will have to change to fit in with software if the required
tailoring cannot be implemented.
Operational. It is probable that off-the-shelf software will be written to conform to

performance criteria that most organisations will find acceptable. The issue for LFFL is
to assure itself that the selected solution conforms to its requirements.
The key objective for this question is to get the students thinking logically about the
problem by constructing a framework for analysing the issues. An additional feature that
could be incorporated into the above is the criteria outlined in the section Factors affecting
software acquisition in Chapter 7.
4. For this question, the students need to consider the relevant steps within the systems
development lifecycle. At this stage, students will not have covered the more detailed
aspects of analysis and design. However, it is still possible to come up with a broad
explanation of what should be done.
The decision to select an off-the-shelf package implies that the feasibility study has already
been completed. The steps that the company needs to follow are as follows:
Analyse requirements. Fact-finding methods and documentation tools are examined in

Chapter 11. The outcome from this process should be a requirements catalogue, which
contains the details of what the new system is to do.
Design. This is dealt with in more detail in Chapter 12. The important point here is for
students to not be distracted by looking at design activities such as program and
database design, but to concentrate on identifying design elements that need to feature
in the packages that are examined.
Build. The build stage for LFFL will differ from a bespoke solution because there will
be no programming activity. However, the testing and conversion phases will still be
needed (although in the case of LFFL, conversion means converting paper-based
records into computerised ones). Of particular importance will be user-acceptance
testing to ensure that the software selected meets LFFLs requirements.
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LFFL may seek to use external consultancy services to assist in selecting the most
appropriate software package. This is because it may be felt that it currently has insufficient
expertise within the business to make an informed decision about what software to
purchase.
Case Study 7.3: Lloyds Bank Insurance Services applies RAD

1. Why and how did the company choose the RAD approach used for this project?
2.
What disadvantages of the RAD method can you identify from the study?
3.
Do you think that Lloyds can be confident that future RAD projects will be successful?
The following questions require students to analyse the case study in order to pick out the
relevant points and make pertinent observations. A frequent difficulty is that although students
are asked to work through the questions beforehand and present their answers in a tutorial or
seminar, the preparatory work does not always seem to be done by the whole class!
1. Lloyds was faced with:
a business opportunity that could be profitably exploited;
the need for a telesales quotation system that worked first time and fulfilled user
expectations;
an immovable deadline by which the system must be up and running;
no spare resource availability.
Lloyds was attracted by RAD because:
it had already identified a software house with the necessary skills this would help it
to address the resource constraints;
RAD promised a workable solution within a very short timescale;
RAD also offered the flexibility needed for the software development, especially given
the tight deadlines;
a development tool in the shape of Symantec offered the power needed to support the
development.
2. Less of a disadvantage and more of a risk was the fact that MDA (the software house) had
no experience of the Enterprise Developer product, although it was keen to gain experience.
The danger was that the product would prove insufficiently capable of delivering the
required solution.
There were also fears amongst the user team that they would not be able to cope with
Windows and mouse-driven systems. The short development time may have meant that
users still lacked the necessary experience by the time the system was ready to be
implemented. Against this, the point that RAD positively requires extensive user
involvement in the development process helped overcome these difficulties.
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3. There are a number of reasons to believe that future projects will be successful:
The project manager (Jacklin) was happy with the service offered by the software house
for this project. There is no reason to suppose that its services would be unavailable
next time.
The system was developed and implemented on time, despite a change to the Oracle
DBMS (data base management system).
Lloyds is a market-oriented organisation that needs to react to business changes quickly

and envisages the need for further development over the next 18 months.
The system has a very short payback period an indication that the economic feasibility
argument has already been won.

1.
Explain what the main similarities and differences are between bespoke development
and end-user development.
The answer should begin by explaining that both development methods are intended to produce
solutions that are specific to the organisation developing them. The differences should include
the scale of the development, the area of the organisation in which the application is likely to be
used (departmental versus corporate) and the probable skill mix of the developer.
2.
Why would a small business be more constrained in its choice of software

acquisition method than a large one?
The answer should look at the various aspects of feasibility related to alternative acquisition
methods and how these relate to organisations of different sizes. It should also be pointed out
that smaller organisations are likely to have less well-developed IS/IT skills amongst their
personnel and this would reduce the options in relation to bespoke and end-user development.
3.
What are the main differences between the analysis and design steps of the
traditional waterfall model of systems development?
The answer requires students to emphasise that analysis is fundamentally about what the
proposed system is to do, whereas design is about how it is going to do it. The difference is also
about identifying requirements on the one hand and solutions on the other.
4.
What are the main components of the systems build stage?
Students should be able to recall the three main components and say a little about each one.
Programming. The design specifications are converted into program code using appropriate
programming languages. Mention of third- and fourth-generation languages is desirable.
Testing. The programs that have been written need to be tested, both individually and
together. It would be useful if students could identify alternative aspects of testing including
module, subsystem, system, volume, performance and user-acceptance testing.
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Conversion. The emphasis here should be on methods of converting data from old manuals
or computer-based systems to the formats required in the new system. It is not appropriate
here to talk about cut-over methods, such as parallel running or pilot cut over.
5.
Explain how the application of the waterfall model differs between (a) the purchase
of an off-the-shelf package and (b) an end-user-developed application.
The danger here is of being drawn into the trap of treating end-user applications development in
the same way as bespoke development by IS/IT professionals. In the case of the latter, the
conventional approach is to follow each step of the model in a logical and systematic manner. In
the case of the former, end-user developers are more likely to experiment and so the
development process becomes more akin to iterative prototyping. In other words, the analysis
and design and activities tend to become merged. It should also be pointed out by the student
that the activities tend to be on a smaller scale with end-user development, with much shorter
development times.
6.
Briefly review the main advantages and disadvantages of bespoke development

when compared with off-the-shelf packages.
One of the best ways for the student to present this is in the form of a two-by-two matrix,
showing acquisition method on one axis and advantages and disadvantages on the other.
Alternatively, you may prefer your students to look at various factors such as acquisition time,
quality, flexibility, maintainability and cost and compare each acquisition method against these
criteria.
7.
Identify the main stages involved in SSADM. Which stages of the traditional waterfall
model do they relate to?
This question is designed to reinforce the point that Structured Systems Analysis and Design
Methodology
(SSADM) only relates to the analysis and design phases of this model. Students should identify
the following main steps:
stage 1 investigation of current environment;
stage 2 business systems options;
stage 3 definition of requirements;
stage 4 technical system options;
stage 5 logical design;
stage 6 physical design.
Stages 1 to 3 relate to the analysis phase, while stages 4 to 6 relate to systems design.
8.
How does rapid applications development differ from SSADM as a means of

producing quality software?
The students attention needs to be drawn to the meaning of the term quality. In this context,
an information system needs to deliver the correct information to those that need it, in the
correct form and when it is required. For RAD, the emphasis needs to be placed on the iterative
nature of the development process, with evolutionary prototyping and heavy user involvement
being at its core. The thrust of RAD is to come up with software solutions that deliver
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information systems quickly and, therefore, are more likely to meet current business needs.
SSADM, on the other hand, places an emphasis on a rigorous and systematic approach where
each step must be completed and signed off before the next one can commence. The main
objective then is to prevent errors later on in the systems development process by ensuring that
each preceding step has been carried out correctly.
1.
The rise of rapid applications development is mainly a response to the failure of

traditional systems development methodologies to deliver the right system at the
right price and at the right time. Discuss.
This question asks students to reflect on whether or not a traditional approach to systems
development (such as SSADM) is inevitably going to result in systems that take longer to
develop (and are therefore more expensive) than alternative methods. The question also points
to the assertion that since business requirements change much more rapidly today,
development methods which are more long-winded may result in systems developers solving
what has become yesterdays problem rather than todays or tomorrows. Students need to
analyse whether or not methodologies such as SSADM inevitably result in longer development
times or if they can be modified to compete with alternatives such as Dynamic Systems
Development Methodology (DSDM).
It should also be remembered that RAD looks at the whole lifecycle of systems development,
whereas many methods concentrate on analysis and design activities. With RAD, the distinction
between analysis and design becomes blurred through the use of evolutionary prototyping. Not
only is prototyping used as a means of refining further what users actually want from an
information system but it is also used to identify the design requirements (input, output,
processing etc.). Finally, prototypes are developed and refined (using 4GLs and application
generators) so that they are implementable as the finished solution.
RAD is also characterised by the use of timeboxes (typically 90 days) where system products
are delivered to end-users at the end of each timebox.
2.
End-user applications development would be far less popular if central IS/IT

departments did not have such a large applications development backlog. Discuss.
This question requires two issues to be addressed. First, does an applications development
backlog indeed exist, and if so, why? Secondly, are the kinds of applications developed by endusers those that might otherwise be developed by information systems professionals?
To take the first issue, it is generally accepted that there is a worldwide shortage of IS/IT
professionals and this is reflected in high salary levels and rapid staff turnover. At the time of
writing, an extensive amount of work is also going into millennium compliance projects.
However, the applications development backlog is not just a recent phenomenon, having
existed for several years as users expectations have risen and business information
requirements developed.
With respect to the second point, it is necessary to draw a distinction between company-wide
information systems and those developed for personal and departmental use. The tendency is
for organisations to concentrate systems developments on those applications that can be seen
to benefit the organisation as a whole rather than a single functional area (or part of a functional
area) within the business. Similarly, the launch and subsequent development of the PC and the
associated software tools that can be used with it have created an opportunity for non-IS/IT
personnel to develop applications using spreadsheets, databases and report generators.
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CHAPTER 8
Initiating systems development

Activities
Activity 8.1
Select a company or organisation with which you are familiar. Rank in order of importance the
benefits that developing a new BIS, such as an e-commerce system, could deliver to the
business or a particular department. You should give an explanation of why you have placed
each benefit factor where you have. If you are completing as a class activity you can compare
the different systems by placing the benefits side-by-side on a whiteboard.
The best framework to apply here is the 6Cs, although not all may be relevant. A typical order
of importance might be the following:
1. Capability
2. Cost reduction
3. Customer service
4. Control
5. Competitive advantage
6. Communication.
It is also useful to consider both tangible and intangible importance.
For e-commerce sites, an alternative framework that works well with students is the 5Ss of
Smith and Chaffey (2005). It is presented below, with example measures for each of the
following:
1. Sell
x direct sales
x indirect sales
x enquiries
2. Speak
x site visitors
x site/e-newsletter registrations
x% conversion to sale
134
3. Serve
See Save
4. Save
x% web self-service transactions
x print cost savings
x people cost savings
x acquisition cost
5. Sizzle
Brand impact
Value-added
Customer satisfaction.
Smith, P.R. & Chaffey, D. (2005) E-marketing Excellence: At the Heart of E-business, 2nd
edn. Elsevier Butterworth-Heinemann. Oxford, UK.
Activity 8.2 Suggest how Dell Computer may use BIS to:
(a) collect and report the CSFs and KPIs in Table 8.2;
(b) achieve the business objectives and KPIs in Table 8.2.
(a) BIS will be used to collect and report all of these metrics for efficiency reasons. To collect
this data, customer satisfaction must be assessed for order fulfilment. Systems to record
errors and how long they take to fix will also be required. If Dell is using an enterprise
resource planning system (See Chapter 6), then all the data may be available in a single
system although it may be through different modules of such a system. To produce a
management dashboard summarising all these metrics in a single report, some integration of
data may be necessary through extracting data from different modules and then
summarising it in a different application such as a spreadsheet.
(b) To make use of the data collected in (a), a management control system must be put in place
to review problems and act on them. Metrics are not of value unless they are actionable.
Such a system must identify common problems to prevent them from recurring. The overall
management process of a performance management system is
to identify key metrics;
to build systems to collect metrics;
a regular review of metrics;
the identification of key problems;
a corrective action to solve these problems;
a revision to metrics collection system to improve its efficiency.
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Activity 8.3
The following are examples of costs and benefits:
Software purchase cost
Training costs
User resistance
Reduction in customer complaints
Reduction in working hours
Better data integration
Improved decision making
Reduction in maintenance costs
Hardware purchase cost
Better data quality
New working practices
Sales increase
Hardware and software maintenance and

consumable costs
Broader planning horizons
Reduction in inventory levels
Implementation costs
Better cash flow
Disruption during implementation
Assess where they should be in the grid below:
Solution:
Costs
Benefits
Tangible
Intangible
Tangible
Intangible
Software purchase
cost
User resistance
Reduction in working
hours (i.e. less
labour required to
complete a given job)
Improved decision
making
Hardware purchase
cost
New working
practices (These
may cause disruption
a cost, although
longer-term benefits
should accrue)
Sales increase
(although difficult to
attribute to IS)
Broader planning
horizons
Implementation costs
Disruption during
implementation
Reduction in
customer complaints
(a saving can be
calculated for this)
Better data
integration
Reduction in
maintenance costs
Better data quality
Hardware and
software
maintenance and
consumable costs
Reduction in
inventory levels
Better cash flow
(difficult to directly
attribute to IS)
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Activity 8.4
This activity is based on Case Study 7.2 where acquisition alternatives were considered for this
company.
1. Identify risks, including their probabilities and impacts.
2. Identify possible solutions to these risks.
3. Implement the solutions targeting the highest-impact, most-likely risks.
Produce a feasibility analysis of the alternative methods of acquiring application software as
they relate to Lascelles Fine Foods (LFFL). You should pay particular attention to the
operational, organisational, economic and technical feasibility of each one. You should conclude
with a recommendation on how LFFL should best proceed to the next phase of the information
systems acquisition process.
A plan for this answer can be developed by considering the table below, which is an amended
version of that given in the text. The table below can be used to refer to the different types of
feasibility and the restrictions imposed in LFFL.
Differences between alternative acquisition methods:
Acquisition
option
Delivery
time
(Operational
constraint)
Cost
(Economic)
Quality: bugs
(Operational
or technical
constraint)
Quality: fits
business
needs?
(Operational
constraint)
Bespoke in-house (not an

option for LFFL unless
staff were recruited)
Poor
Poor
Poor
Good
Bespoke software house
Good
Very poor
Medium
Medium
End-user development
(not an option for LFFL
unless staff were trained)
Poor
Medium
Poor
Good
Tailored off-the-shelf
Good
Good
Good
Medium
Standard off-the-shelf
Very good
Very good
Very good
Poor
Note that although end-user development could occur, it is not practical for a system of this
scale, particularly since there is no indication that the staff have been trained for this. It is also
impractical for an IS department to develop the system. This leaves the options of the following:
Bespoke software house
Tailored off-the-shelf
Standard off-the-shelf.
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A review of the table shows that the decision will depend on a balance between the relatively
low cost, better stability and faster implementation of the off-the-shelf solutions against the
better fit to the needs of the business that would be provided by a bespoke option. The question
will be resolved by how well a packaged system is likely to cope with the peculiarities of a
food-producing company. It can be argued that for order processing, distribution, purchasing,
warehousing and accounting, the company can readily use standard or tailored software. For the
manufacturing process, some specific software may need to be written. Given this, the best
recommendation is for standard off-the-shelf software with tailoring if necessary.
Other notes:
The case study does not suggest that time is an important factor.
There is no cost constraint, but the company will clearly want to implement the system for
the minimum necessary outlay.
This case study assumes that the company has no current IS facilities; this is somewhat
unlikely although it is used for the purpose of simplicity. A more realistic situation is that of
Elite folding tables limited where a new system is replacing an existing system.
Activity 8.6
Referring to the eight key factors for selecting software, discuss in a group, the order of
importance of these factors for each of these different types of business information system:
an accounting system;
a system controlling a production line;
a system for booking customers on to coach trips;
a system to support investment in company shares;
an HR management system.
Create a table comparing the different factors for each system. Explain similarities and
differences.
A typical answer for this activity is presented below a suitable order can be discussed at
length. It is evident that the importance of each factor differs according to the application. There
are some common factors. This is a good activity to get different groups to present their
different answers on the board:
138
Accounting
system
Production
line
Booking
customers
Investment
HR management
system
Reliability. Must be
accurate.
Reliability
Performance
Functionality
Functionality
Security. Must be
available only to staff
with need to know.
Performance
Reliability
Reliability
Ease of use
Support. Once
committed, do not
want supplier to
change.
Scalability
Ease of use
Performance
Reliability
Functionality.
Similar for many
suppliers so less
important. Ability to
tailor is important.
Functionality/
adaptability
Functionality
Cost
Performance
Ease of use. Less

important since
specialist staff will use.
Support
Support
Ease of use
Security (higher
for salary details)
Extensibility
Ease of use
Security
Security
Support
Cost
Cost
Extensibility
Support
Cost
Case Studies
Case Study 8.1: Sedgemoor District Council
1. Given the intangible nature of some of the benefits from the new information systems, how
might the council have gone about making the investment decision?
2. Analyse the initiation part of the project in terms of the internal and external factors driving
the systems acquisition process.
1. This question asks the students to consider approaches to investment appraisal. We suggest
that alternative methods are considered and looked at with specific reference to the rather
intangible nature of the benefits.
Standard Financial Methods: these may be of limited value since they require the identification
of financial benefits as well as financial costs. While there may clearly be some financial
benefits and these should be quantified where possible it is likely that the clearly identifiable
financial benefits will not add up to more than the identifiable costs. This is not to say of course
that over the longer term, greater financial benefits will not be realised its just that they will
not be easy enough to identify reliably.
Balanced Scorecards: probably the most useful tool for the Council. Financial methods can be
incorporated into the financial element. However, the other three aspects of the scorecard can
also be considered, thus enabling the council to assess, for example, the benefits of the system
in offering a better service to local council tax payers.
Other methods such as information economics and costbenefit analysis can also be used.
139
2. Analyse the initiation part of the project in terms of the internal and external factors driving
the systems acquisition process.
Internal factors:
Dropping existing data management system annual savings of 7,000 on maintenance

and server hardware.
Reduced paper storage costs.
Improved information lifecycle management.
Making council reports, agendas and minutes available online.
External factors:
Ability to comply with the code of connection requirements for connecting onto GCSx,
(part of the Government Connect programme to provide a common infrastructure for
secure electronic transactions between local and central government).
Using Goss software in conjunction with EDRM to ensure the correct document
versions are published online in each service area.
The ability to make information readily available to support customer services through
all access channels the internet, face-to-face and by telephone thus being able to
deliver on the e-government agenda.

1.
What is the purpose of the initiation phase of a project?
The purpose is to produce a response to an idea for a new system. This response is a feasibility
study to assess the viability of the project. The study is summarised in a feasibility report that
recommends the best method for developing a new system.
2.
What is meant by the terms intangible and tangible benefit?
A monetary value can be calculated for a tangible benefit, but not an intangible benefit.
3.
Identify each of the following as tangible or intangible benefits or costs:
(a) purchase of a server for data storage with a new information system;
(b) reduced waiting time for customers when querying the progress of an order;
(c) disruption caused by installation of a new company network;
(d) reduced inventory holding period resulting from a new stock management system.
(a) Tangible cost.
(b) Intangible benefit.
(c) Unclear tangible or intangible cost.
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(d) Tangible benefit a cost for the saving can be derived from the reduced time for which
stock is held.
4.
Summarise the differences

organisational feasibility.
between
economic,
operational,
technical
and
Solution:
Economic feasibility establishes whether or not the cost of a new IS outweigh its benefits.
Do the costs outweigh the benefits?
Operational feasibility will determine the impact of the system on the existing working
practices and will assess how the system will cope with the demands placed on it such as
the number of transactions required per minute. Is it suitable for the daily operations?
What are its features?
Technical feasibility assesses whether the system is appropriate for the problem that is
being solved. Will it work?
Organisational feasibility assesses the impact of the introduction of the system on the
people in the organisation. What will the disruption be to the organisation?
5.
What do you understand by the term risk assessment and how can it be applied to
assist an information systems development project?
Risk assessment is a review of the likely problems that may be experienced during the
development, deployment and maintenance of an information system. It can be applied through
the following:
identifying risks;
assessing their likelihood and impact;
devising a plan to minimise the risk of the problems occurring, or coping with them if they do;
monitoring likely risks during the project and acting if they occur.
The final two steps are strictly risk management rather than risk assessment.
6.
What is the purpose and outline contents of a request for proposal or invitation to
tender document?
This is a document or advert produced by a company who wants to introduce a new system
intended for third-party system developers or suppliers. It invites them to produce a proposal to
implement the system. It will typically detail the following:
the business objectives that the system must deliver expressed as detailed requirements, or
functions the system must deliver;
the technical requirements of the system such as which existing operating systems,
hardware and applications it must interact with and performance restrictions;
management of the system implementation, indicating how the project management will
operate;
constraints on the introduction of the system notably, cost and time.

141
7.
What are the key factors that a company will consider when choosing software from
different suppliers?
Purchase cost and maintenance costs
Suitability or functionality does it have the appropriate features?
Ease of use
Other ancillary costs such as installation, training and support
Compatibility (interoperability) with existing applications and operating systems
Performance
Stability number and seriousness of expected bugs
Scalability will it support a large or increased number of users (see Chapter 12)
Suitability of the vendor for giving long-term support
Extensibility can the system be extended using programming tools or integrate with other
products?
8.
What are the main items that should be specified in an information systems
contract?
Those mentioned in the text are the following:

Schedule 1. Product specification and acceptance
Schedule 2. Input to project from client
Schedule 3. Services to be supplied by contractor
Each deliverable should be linked to a milestone and payment to help avoid slippage in the
project. Milestones should include deliverables from both client and supplier. Frequent monthly
milestones should be set.
Schedule 4. Support of system and warranty
A service-level agreement.
Schedule 5. Project plan
Schedule 6. Payment method
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CHAPTER 9
BIS project management

Activities
Activity 9.1
You are required to construct a project plan for the following information system development
project. Your objective is to schedule the project to run in the shortest time possible. The plan
should include all activities, the estimated, elapsed and effort time and who is to perform each
activity. In addition, it is necessary to indicate the sequence in which all the tasks will take place.
The programs can be scheduled in any order, but for each program the design stage must come
first, followed by the programming and finally the documentation.
Within the context of the exercise, you can assume that the detailed systems analysis has
already been carried out and that it is now necessary to perform the design, programming and
documentation activities. For the purposes of this exercise, we will not include the testing and
implementation phases.
Present your project plan in the form of a Gantt chart (see Figure 9.10) showing each task, the
sequence in which tasks will be performed, the estimated effort and elapsed time and the
resource allocated to each task.
We believe this is a good exercise for introducing students to project-planning issues. Students
may need a fair amount of guidance depending on their ability. We use it as part of a systems
analysis and design course, but it could be made of more general relevance by changing the
name of the activities.
There are two basic approaches:
1. The students produce a matrix of how long it will take different staff to complete different
tasks (see table) based on the equation given relating work rate, availability and effort time
to elapsed time. They then use the matrix as a lookup table for completing the Gantt chart
(see accompanying Gantt chart in chapter).
2. The students produce a matrix based on work rate only (see table) and then allocate the staff
on the Gantt chart using their availability as follows:
100% means the worker can work full time
60% means the worker can work 3 out of 5 days per week
50% means the worker can work 2 1/2 days per week (or 2 days one week, 3 the next)
40% means the worker can only work 2 out of 5 days per week.
This second approach is used for the solution in the accompanying diagram. It gives a slightly
better solution than the first approach.
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The matrix below shows the length to complete different tasks based on the work rate and
availability of the different staff (all figures in days).
Task
SD1 (Factor = 1)
SD2 (Factor = 1.67)
SD3 (Factor = 4)
Design easy program (1d)
1.67
Design moderate
program (2d)
3.33
Design difficult program (4d)
6.66
16
P1 (Factor = 1.25)
P2 (Factor = 1)
P3 (Factor = 3.3)
Program easy program (1d)
1.25
3.3
Program moderate
program (3d)
3.75
9.9
Program difficult
program (6d)
7.5
19.8
TA1 (Factor = 1.6)
TA2 (Factor = 2)
TA3 (Factor = 1.25)
Document easy
program (1d)
1.6
1.25
Document moderate
program (2d)
3.2
2.5
Document difficult
program (3d)
4.8
3.75
The matrix below shows how long it will take to complete different tasks based on the work rate
only of the different staff (all figures in days).
Task
SD1 (Factor = 1)
SD2 (Factor = 0.67)
Design easy program (1d)
0.67
Design moderate program (2d)
1.33
Design difficult program (4d)
2.66
P1 (Factor = 0.5)
P2 (Factor = 1)
SD3 (Factor = 2)
P3 (Factor = 2)
Program easy program (1d)
0.5
Program moderate
program (3d)
1.5
12
Program difficult program (6d)
TA1 (Factor = 1)
TA2 (Factor = 2)
TA3 (Factor = 0.5)
Document easy program (1d)
0.5
Document moderate
program (2d)
Document difficult
program (3d)
1.5
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ACTIVITY
Program 1 (D)
Resource
Program 2 (E)
Resource
Program 3 (M)
Resource
Program 4 (M)
Resource
Program 5 (D)
Resource
SD1
SD3
P1
9 10 11 12 13 14 15 16
P2
P3
SD2
TA2
TA2
TA1
SD2
P3
SD1
P3
P1
TA1
TA3
The sample Gantt chart for the project-planning exercise was produced using the table above.
All tasks rounded off to 0.5 days.
Some principles on using the Gantt chart to assign resources should be evident to students, but
may need reiterating the following:
The same resource may not work at the same time.
As soon as a resource has finished on one task they may start on another.
Not all resources need to be used continuously.
Assume 5 days per working week only, with no overtime.
What the activity illustrates are as follows:

1. Different characteristics of staff working on a project.
2. Staff often working on more than one project. Can you give them one day per project or
split their time through the day? The former is probably more efficient.
3. The difference between elapsed and effort time.
4. It is best to put the best staff on the most difficult tasks and start these early.
5. Project planning in detail is not straightforward.
Activity 9.2
From the information given on p. 361 and using any relevant books, decide whether to use a
formal project methodology such as PRINCE2, IDEAL or Euromethod or a different approach.
Justify your answer, giving a brief evaluation of what you perceive as the advantages and
disadvantages of the methodology.
152
The question is intended to make students reflect on the need for a formal, structured approach
to project management. Is a more informal arrangement sometimes more appropriate?
In this case study, the company is of a medium size and there is quite a serious problem of time
and budget overruns, although the systems do meet the needs of the users quite well. Given that,
it is important that any changes introduced are not too formal and become a barrier between the
system developers and the users who seem to collaborate quite well currently.
In the view of the authors, while deploying a structured methodology such as PRINCE2 will
improve control, it may not address political or soft issues which may be affecting project
completions. Furthermore, a structured methodology may require more quality assurance staff
on a project and may mean (initially at least) that projects take longer. Some more practical
changes mentioned in solution to question 2 for Case Study 9.2 in this chapter may be more
beneficial than introducing a methodology. It could be recommended that the company
implements these changes and then assesses whether or not further gains could be achievable
through introducing a methodology.
A summary of the positive and negative features of a structured methodology is shown in the
table.
Advantages
Disadvantages
Clear aims and organisational

responsibilities will be identified
Good framework for planning and change

control, e.g. need for change logging and
exception plans
Tends to lead to a hierarchical

bureaucracy with more reviewing than
doing
Needs training of staff
May stifle flexibility and innovation
Provides a consistent way of conducting

projects in a company thus reducing the
likelihood of error
May sometimes be necessary to cut

corners to meet deadlines
Should lead to better quality systems as

fewer corners should be cut
Does not fit with rapid applications

development (RAD) philosophy based
more on a traditional lifecycle
Case Studies
Case Study 9.1: Putting an all-inclusive price tag on successful IT
1. Discuss the difficulties in estimating the costs and benefits of an IT project.
There is a need to consider the context of the IT project and thus the change required for a
successful implementation and delivery. IT departments tend to focus on the technical costs of
hardware, software and training but underestimate the costs of change. In the case study these
costs are stated as ensuring compliance with the business strategy; aligning the people with the
processes the business is changing to and ensuring that behaviours are commensurate with the
required new ways of working.
153
There is also the traditional problem in that hardware and software costs estimates are relatively
easy to calculate but more benefits tend to be more qualitative and difficult to express as a
number.
Case Study 9.2: Lessons for business from the public sector
1. What reasons does the case study indicate are responsible for project failure?
2. What steps can be taken to reduce the risk of project failure?
1. Project failure is primarily blamed on inadequate management of projects with the manager
failing to do the following:
specify user requirements adequately;
manage the number of requested changes;
limit the scope of the changes;
tackle in-house politics;
negotiate changes to deadlines or the number of features required.
2. The following steps can be taken:
managing the change which is inevitable in a systems development;
build in risk management;
standing up to senior management when they set unrealistic deadlines or expand the scope;
detailed estimation and costing based on detailed assessments of the requirements.

1.
What are the main elements of the project management process?
The project management process includes the following main elements:
Estimation consisting of identifying tasks and their duration;
Schedule/plan when the tasks are sequenced and resources allocated;
Monitoring and control during the project;
Documentation for quality assurance;
Post-project review to improve the next project.
154
2.
What are the main project aims of the PRINCE2 methodology?
PRINCE2 is a project management methodology that has been developed to be compatible with
the system development methodologies such as SSADM. PRINCE2 defines four main project
aims:
1. To deliver the required end product(s)
2. To meet the specified quality
3. To stay within budget
4. To deliver on schedule.
3.
What information is required for the construction of a critical path diagram?
The following information is required for construction of a critical path diagram:
Identification of project activities
Estimated duration for each activity
Relationship between project activities (i.e. their sequence).
4.
What information do the Gantt chart and PERT chart convey?
The Gantt chart conveys the timing of activity execution, since the start and finish date for each
activity are indicated. The PERT chart identifies the relationship between activities and will
indicate the critical path more effectively than the Gantt.
5.
Define the term critical path.
Activities on the critical path are termed critical activities. Any delay in these activities will cause
a delay in the project completion time.
6.
What is the difference between effort and elapsed time?
Effort time is the total amount of work that needs to occur to complete a task. The elapsed time
indicates how long in units of time (such as calendar days) the task will take, given the number
of resources allocated to it. For example, 4 days effort time can be reduced to 2 days elapsed
time if two resources are allocated to it.
155
CHAPTER 10
Systems analysis
Activities
There are no activities for this chapter.
Case Studies
Case Study 10.1: IFD drawing a student records system
This case study does not have any questions since it takes students through the process of
creating an information flow diagram (IFD).
Case Study 10.2: ABC case study

1. Using the ABC case study, produce an information flow diagram for the company by
following the steps given earlier in the chapter. Does the diagram tell you anything about
ABCs operations that may need some attention (such as missing or superfluous information
flows)?
2. Using the ABC case study and the information flow diagram that you drew in answer to
Question 1, produce a simple Level 1 dataflow diagram for the company by following the
steps given earlier in the chapter. Compare your answer with that of one of your colleagues.
Are the diagrams the same? If not, is it possible to say which is correct? If not, why not?
3. Using the ABC case study, including the sample forms included below the main text,
construct an entity relationship diagram for the company. Make sure that you do a crossreference matrix before attempting to draw the diagram. When you have drawn your first-cut
diagram, check for many-to-many relationships and eliminate any that you find by using the
appropriate technique described earlier in the chapter.
1. The information flow diagram should have about six sources/destinations and about 10
information flows. It is sometimes useful to give students an idea about these numbers
before they start constructing their diagrams. Students should also be encouraged to produce
a list of information flows, their source and destinations before attempting to draw the
diagram.
There is also a possibility that students will invent information flows that they think
should exist, but do not appear in the case study. Before going on to the second part of the
question, students should be challenged if they have come up with these! A sample
information flow diagram is shown in the figure below.
161
From the diagram, there is one omission that is usually identified, namely, the lack of any
information going back to the customer if the order is valid. This would normally take the
form of a delivery note to accompany the customers products. Students should note that the
goods going to the customer do not constitute an information flow but a materials flow and
should not really appear on the diagram.
Another point concerns the payment to the supplier. It is a matter of some debate whether
this constitutes a materials flow or an information flow. Bright students will argue that since
the money transfer is actually electronic, it really is an information flow.
2. For this exercise, the students should attempt to draw their diagrams on a single sheet of A4
paper in a landscape orientation. The number of processes will vary between students (and
lecturers) but should be no more than 10 to 12.
162
A sample diagram is given below.
It should be noted that the diagram conforms to the rules set out in Chapter 10. Especially
important is the non-appearance of information flows directly between processes or
datastores.
It is quite possible that students will have different interpretations of the case study.
However, the processes should be essentially the same between students. What will differ
very much will be the placing of the elements of the diagram on the page. Provided that the
rules are followed and there are no crossed lines (except for the system boundary),
differences should not be significant.
3. Students should tackle this question in four steps:
Step one is to identify facts about persons, places, things or events about which data
need to be held. When some students come up with ABC or the Manufacturing
Department, they should be challenged to say what data they would hold about these
entities. They are usually removed shortly afterwards.
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Step two is to construct a cross-reference matrix showing which entities relate to each
other. This is particularly difficult because at this stage students will not have a
particularly good understanding of relational databases and database design (especially
primary and foreign keys). It is helpful, therefore, for students to consider the data items
that each of their entities might contain and where common data between two entities
exist to enable a relationship to exist (e.g. between customers and customer orders).
Step three is to produce the first-cut entity relationship diagram (ERD). In the first
instance, students should construct all relationships as 1:1, only adding the crows feet
at the end.
Step four is to inspect the diagram for any many-to-many relationships and to introduce
a linking entity to simplify the relationship into two one-to-many relationships. Students
will not necessarily understand the importance of this at this stage. It is, therefore,
important to return to this in the database design part of Chapter 12.
The sample solutions to each step are as follows.

Entities
It is suggested that the following entities should be identified:
customers;
sales orders;
sales clerks;
products;
manufacturing orders;
purchase orders;
suppliers;
supplier invoices.
Students may come up with additional ones, some of which may be perfectly reasonable (e.g.
matched P/Os as identified from the dataflow diagram (DFD).
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Cross-reference matrix
First-cut ERD
The relationships shown here assume certain enterprise or business rules. This is especially so in
the case of the relationship between purchase orders and supplier invoices. It is possible to make
different assumptions and come up with a different extent to the relationship (e.g. many-tomany, rather than one-to-many). The first-cut diagram is shown below.
The many-to-many relationships for the Sales orderProduct link and the Purchase order
Product link are clear from the forms illustrated in the case study. What is less clear is the nature
of the relationship between purchase orders and supplier invoices. Students should be
encouraged to think through the implications of each alternative relationship in business terms.
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Final ERD
In the final version of the ERD, students need to remove all many-to-many relationships by
introducing new linking entities (see the diagram below).
166

1.
What is the difference between the funnel and pyramid approaches to structuring
an interview?
Pyramid structure the interviewer begins with a series of specific questions and during the
course of the interview moves towards general ones.
Funnel structure the interviewer begins with general questions and during the course of
the interview concentrates increasingly on specific ones.
2.
Why can closed questions still be useful in an interview?
Closed questions are designed to confirm the interviewers understanding of the information
obtained. They can also be used to obtain quantitative data.
3.
Assess the relative effectiveness of interviews versus questionnaires when

attempting to establish user requirements.
Interviews have the following benefits:
the ability to gather detailed information through a two-way dialogue;
they allow candid, honest responses to be made;
an open, spontaneous process that can lead to valuable insights, especially when open
questions are used;
responses can be easily quantified, especially when closed questions are used;
one of the best methods for gathering qualitative data such as opinions and subjective
descriptions of activities and problems.
They can be ineffective in the following circumstances:
The analysts findings are likely to be coloured by his or her perceptions of how other similar
business operations work. Interviewers need to be especially skilled if this is to be avoided.
Interviewees may not cooperate with the interview process, either by not taking part or by
giving vague and incomplete replies, if the development of a new information system is
perceived as a threat through the risk of deskilling, redundancy or a perceived inability to
cope with change.
The interviewee tells the analyst what they think should happen in an existing situation
rather than what actually happens.
Staff at lower organisational levels may not be capable of articulating their requirements
with sufficient clarity.
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Questionnaires can be effective if
information from a large number of people needs to be gathered this will represent a more
efficient use of time than interviewing;
the information gained is used to check the findings obtained from alternative fact-finding
methods;
information that is to be gathered can be tabulated or easily structured.
On the other hand, questionnaires
mean that respondents cannot go back to the analyst to seek clarification about what a
question means;
may make the collation of qualitative information difficult if the questionnaire contains openended questions this would also be true of interviews, but there is likely to be a larger
number of responses to collate from a questionnaire;
lack the ability to use verbal and non-verbal signals from the respondent as a sign to ask
other or different questions;
often have low response rates, although this is not such a problem for internal staff.
4.
In an information flow diagram, why should we not record information flows that lie
completely outside the system boundary?
In either an IFD or a DFD, we are only interested in information flows or data flows that are
within the scope or context of the system under consideration. For example, in the ABC case
above, we have no interest in any flows between our customers and suppliers it is outside
both the scope of the system and the business as a whole.
5.
What are the main differences between an information flow diagram and a dataflow
diagram?
Whereas an IFD simply shows information sources, destinations and flows, a DFD also shows
processes where inputs are transformed into outputs of some kind and datastores are present
to show where data is held within the system. In addition, information destinations are re-termed
sinks.
6.
What is meant by the term levelling in dataflow diagrams?
Students need to understand that in a DFD it is difficult to show all the processes relevant to a
system unless the system under consideration is very small. Levelling, therefore, allows
processes to be identified at a very high level (e.g. process customer order) and then each
process can be decomposed into subprocesses and activities on subsequent diagrams. To be
accurate and successful, it should be possible to identify clearly how the processes of a lowerlevel diagram can be aggregated to recompose the higher-level process that generated it.
7.
In a sales order processing system, which of the following are not entities:
customer, colour, size, product, telephone number, sales order, sales person, order
date.
In this question, students need to distinguish between data items (or attributes) and entities. An
entity can be defined as a collection of data items that together describe a person, place, thing
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or event about which we wish to store data. The data items, therefore, are individual elements
that carry part of the description for a particular occurrence of an entity.
Using these definitions we can look at each of the following:
Customer. This will comprise a collection of data items such as name, address, telephone
number etc. that together can be used to identify individual customers; customer is,
therefore, an entity.
Colour. This is an attribute that helps to describe an occurrence of something (e.g. a

garment); it is a data item.
Size: as with colour, it is a data item.
Product. This will normally be an entity since it describes the characteristics of something
that a business might sell; colour might be one of the data items; also, students should not
confuse product with product code or description.
Telephone number. As suggested above, a telephone number would be a data item and not
an entity.
Sales order. This would contain details such as order date, customer number, delivery date
etc.; it is, therefore, an entity.
Sales person. This can be interpreted both ways: if we are looking to store details about
each sales person (sales this month, name etc.), then this could be regarded as an entity; if
we mean the person who took an order, then it could be interpreted as a data item.
Order date. As suggested above, this would constitute a data item and be a part of the
sales order entity.
8.
Why might the construction of an ERD still be useful even if an off-the-shelf package
was going to be purchased?
An ERD represents a logical data model for an organisation. Entities that contain data needed
to support business activities are defined as the relationships between them. A packaged
solution needs to be able to represent the data required by the business and with the
appropriate relationships. How the packages physical database is designed is a separate issue
and should not affect the decision whether or not to buy a package provided that the relevant
business operations can be supported according to the relevant enterprise or business rules.
The ERD, therefore, can provide a conceptual framework with which to test the ability of the
package to deliver what is required.
1.
Use a simple example with no more than five processes or ten information flows to
examine the differences between the information flow diagram and the dataflow
diagram. Which would be more effective for explaining deficiencies with an existing
system to:
(a) a business manager;

(b) a systems designer?
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CHAPTER 11
Systems design
Activities
Activity 11.1
1. Identify an insertion anomaly which might cause a problem when adding a new product to
the range.
2. Identify two deletion anomalies which would occur if Cheapo Toys cancelled its order and a
record was removed.
3. Identify an update anomaly if the product Silly Dog was renamed Fancy Dog.
4. How could the table be split up to remove the anomalies? Define the fields which would be
placed in each table and define the foreign keys which would be used to link the tables.
The unnormalised data for the activity is shown in the table on the next page.
1. If a new product is added to the range, it will be necessary to have associated order
information for that record. When the new product is first added, there will not be any order
information such as order number or customer name to add to the database. This insertion
anomaly would not occur if the product-related fields such as product code and description
were stored in a separate table.
2. If the bottom record was deleted, the product information on the Diplomat product would
be lost. The details of this customer would also be lost.
3. The relevant records of order number 10001 and 13001 would be in error and would not
indicate the product that was originally ordered.
186
300
200
200
200
100
100
100
100
Customer
number
Cheapo Toys
Super Toys
Super Toys
Super Toys
Freds Toys
Freds Toys
Freds Toys
Freds Toys
Customer
name
61 The Arcade
25 West Mall
25 West Mall
25 West Mall
7 High Street
7 High Street
7 High Street
7 High Street
Customer
address
23201
13001
13001
13001
10001
10001
10001
10001
Order
number
Diplomat
Silly Dog
Risky
Kiddy Doh
Kiddy Doh
Slimy Hand
Silly Dog
Action Man
Product
description
24
12
12
Quantity
ordered
187
751
567
637
869
869
425
567
324
Product
code
5.15
32.76
17.42
0.68
0.68
1.39
5.15
13.46
Price
per item
123.6
43.52
52.26
8.16
2.72
16.68
30.9
40.38
Total
cost
6/21/99
7/17/99
7/17/99
7/17/99
7/10/99
7/10/99
7/10/99
7/10/99
Order
date
007
021
021
021
007
007
007
007
Salesperson
number
4. Suggested solution is as given below:

Customer table
Customer number (primary key)
Customer name
Customer address.
Order table
Order number (primary key)
Order date
Customer number (foreign key linked to customer table)
Product number (foreign key linked to product table)
Quantity ordered
Salesperson number
Price per item (this is placed in this table rather than the product table as it varies according to
the price that has been negotiated for each order
Total cost of order (this is inefficient as this is a duplicating field that could result in insertion
anomalies).
Product table
Product code (primary key)
Product description
Quantity ordered.
For a more fully normalised table, the order table could be broken down further as follows:
Order header table
Order number (primary key)
Order date
Customer number (foreign key linked to customer table)
Salesperson number
Total cost of order (this is inefficient as this is a duplicating field that could result in insertion
anomalies).
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Order line item table
Order line number (primary key not used in other tables)
Order number (foreign key linked to order table)
Product number (Foreign key linked to product table)
Quantity ordered
Price per item (this is placed in this table rather than the product table as it varies according to
what has been negotiated for each order).
Activity 11.2
1. Either:
(a) Use normalisation to third normal form to identify tables and fields for an ABC database; or
(b) Assume the following entities for the ABC database:
customer details;
salesperson details;
sales order header details;
sales order line details;
item details.
2. For each table in the database, define details of:
table names;
primary and foreign key fields for each table;
name of each field;
data type of each field;
size of each field;
any validation rules which may apply to each field (e.g. a limit on maximum price or quantity
etc.).
(a) It is not possible to provide a specimen answer for this question as students might identify and
name a group of entities differently to those used by the authors. Readers should refer to (b)
for a specific example that uses a number of fixed or named entities.
The answer to part (b) defines the third normal form tables for the ABC database. The answer
could be extended by including these tables, but this tends to make the scale of the exercise
too large.
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stock details;
supplier details;
invoice;
purchase order;
manufacturing order.
2. The tables below show the suggested answers.

Customer table:
Field name
Field type
Field size
Validation rule
Key?
Customer number
(or code or ID)
Customer title
Number
Mandatory, >0
Primary key
Text
6 (allows for
999,999 customers
10
Customer first name
Text
30
Customer last name
Text
30
Mandatory
Customer address
line 1
Customer address
line 2
Customer address
line 3
Customer address
line 4
Post code
Text
50
Mandatory
Text
50
Text
50
Text
50
Text
10
Mandatory
20
Mandatory
Fax number
Text (to allow spaces

and brackets)
Text
20
E-mail address
Text
50
Credit limit
Number
Sales person
number
Number
8.2 (up to
999,999.99)
6
Region number
Number
Phone number
190
Mandatory
Mandatory, >0
Restricted list
from 1,2,3 etc.
Foreign key
in sales
person table
Salesperson table:
Field name
Field type
Field size
Validation rule
Key?
Salesperson number
Number
Mandatory, >0
Primary key
Salesperson title
Text
10
Salesperson first name
Text
30
Salesperson last name
Text
30
Mandatory
Phone number
Text (to allow spaces

and brackets)
20
Mandatory
Fax number
Text
20
E-mail address
Text
50
Region number
responsible for
Number
Restricted list
from 1,2,3 etc.
Sales order header table:

Field name
Field type
Field size
Validation rule
Key?
Sales order number
Number
Mandatory, >0
Primary key
Date placed
Date
10
Mandatory
Customer number
Number
Mandatory
Total order value
Currency
8.2 (up to
999,999.99)
Mandatory
Payment type
Text
10
Restricted choice
of cash, cheque or
credit
Foreign key
in customer
table
Sales order line table:

Field name
Field type
Field size
Validation rule
Key?
Line item number
Number
Mandatory, >0
Primary key
(Not used as foreign key
in other table)
Sales order number
Number
Mandatory, >0
Foreign key in order

header table
Product number
Number
Mandatory, >0
Foreign key in product

table
Item cost
Currency
Mandatory
Quantity ordered
Number
6.2 (up to
9999.99)
3 (up to 999)
Mandatory
191
Product table:
Field name
Field type
Field size
Validation rule
Key?
Product number
Number
Mandatory, >0
Primary key
Product name
Text
30
Mandatory
Product description
Text
100
Standard product cost
Currency
6.2 (up to 9999.99)
As well as the validation shown, there will be an automatic check that the field is of the correct
type, e.g. text fields do not contain characters, and the data entered is less than the size shown.
Activity 11.3
There is no solution for this activity the worked example is shown in the text.
Case Studies
Case Study 11.1: Beaverbrooks the Jewellers
1. Read the case study and identify the main design elements that needed to be considered.
2. Identify any design features that can be directly linked to specific business benefits.
1. The key design features that students should mention include the following:
The need for a central repository for documentation and a framework to enable company
information and knowledge to be exchanged.
The ability to use a central data system extensively for stock enquires, placing special
orders, sharing company information and making sure the merchandising in each branch
conforms to the current company branding and directives.
Collaboration facilitated through KnowledgeWorker collaboration, search and work-flow

tools that sit over the top of the data, which is accessed locally or remotely through a
web browser interface.
So these design aspects relate to accessibility, data/database design, and user interface design.
2. The business benefits arising from the design features mentioned include the following:
Saving of staff time in progressing orders as a result of the centralised database system.
Merchandising in each branch conforms to the current company branding and directives
as a consequence of staff using the centralised system.
Improved productivity as a result of improved methods of storing and sharing information.
Developing more of a competitive edge as a result of finding more activities the system
can help us with.
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It is unclear whether the system is bespoke or packaged in nature. However, the last point
demonstrates that a well designed system is capable of delivering benefits beyond what mat have
been envisaged at the systems initiation or feasibility stages. What is perhaps interesting here is if
the investment decision had been based purely on the intended benefits, then it is possible that a
decision not to proceed with the investment may be made, thus denying the business of the wider
benefits that might be obtained.

1.
Define systems design.
The design phase of the life cycle defines how the finished information system will operate. This is
defined in a design specification that sets out the best structure for the application and the best
methods of data input, output and user interaction via the user interface. The design specification
is based on the requirements collected at the analysis stage.
2.
What distinguishes systems design from systems analysis?
Systems analysis occurs before system design and involves in finding out what the requirements
of the users are. Design involves in specifying how these requirements will be implemented
through the structure of the system and detailed programming.
3.
Describe the purpose of validation and verification.
Validation is a test of the design to check that the design fulfils the requirements of the business
users that are defined in the requirements specification.
Verification is a test of the design to ensure that the design chosen is the best solution and that it
is error free.
4.
What are process modelling and data modelling? Which diagrams used to summarise
requirements at the analysis phase are useful in each of these types of modelling?
Process modelling is involved with the design of the different modules of the system, each of
which is a process with clearly defined inputs, outputs and a transformation process. Dataflow
diagrams and flow charts are often used to define system processes. The ultimate result of
process modelling is the program code in the different user modules of a system.
Data modelling is involved with considering how to represent data objects within a system, both
logically and physically. The entity relationship diagram is used to model the data and a data
dictionary is used to store details about the characteristics of the data, which is sometimes
referred to as metadata. The ultimate result of data modelling is a database and the module
routines that are used to update and extract this data.
5.
Explain the client/server model of computing.
This describes a system architecture in which two separate types of computers are used to
provide the service to the end-user. The first are end-user machines such as PCs (clients) that run
applications while accessing data and possibly programs from a server. The second are the
servers, which are more powerful computers used for storing and sharing programs and data.
Dividing the work in this way results in an overall efficient system.
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6.
What parts of the system need to be designed at the detailed design stage?
Detailed database design including multi-user access.
Detailed user interface design.
Detailed input design (field validation and security design) and output design (how data will be
displayed).
Detailed module design the ways in which the programme codes of each module works will
be discussed.
7.
Describe the purpose of normalisation.
Normalisation is intended to simplify the structure of a database to avoid duplication of data in

order that anomalies do not occur when new information is added or old information is removed. It
involves in splitting up a database into different tables.
8.
Explain insertion, update and deletion anomalies.
These anomalies occur in poorly defined database tables. When information in the tables is
changed, important information may be lost or it may be necessary to duplicate information. The
different types of anomalies are as follows:
Insertion anomaly it is not possible to insert a new record into a table without having to insert
other information that is unavailable.
Update anomaly it is not possible to change a single occurrence of a field in a table without
having to change others in order to maintain the correctness of data.
Deletion anomaly it is not possible to delete a record from a table without also losing some
other information that might still be required.
9.
What are the differences between the sequential and direct (random) file access
methods? In which business applications might they be used? What is the purpose of
a file index?
Sequential file access involves reading or writing each record in a file in a set order. Random or
direct file access allows any record to be read or written. File index is an additional file that is used
to point to records in a direct access file for more rapid access.
10. Explain the difference between a batch and real-time system which would be the most
appropriate design for each of the following situations:
periodic updating of a data warehouse from operational database;
capturing information on customer sales transactions.
A batch system involves processing of many transactions in sequence. This will typically occur
some time after the transactions have occurred. In a real-time system, processing occurs
immediately, data is collected or processing follows each transaction.
(a) A batch method is most appropriate since this is a periodic update that needs to occur at a
time which minimises disruption to the end users of the system.
(b) A real-time method will be used to capture this data.
194
11. What are the different types of input validation which must be considered in the design
of a user input form?
Data type checking.
Data range checking.
Restricted value checking.
Input limits.
Multiple field validation.
Checksum digits.
12. Describe the main differences between the analysis and design phases within the
systems development life cycle.
The differences are as follows:
the order in which they occur analysis first, then design;
user involvement is high in the analysis stage and minimal in the design stage;
technical details such as database structure and system architecture are involved in the
design phase, while analysis focuses on business requirements.
1.
The client/server model of computing has many disadvantages, but these do not
outweigh the advantages. Discuss.
A similar question is also asked in Chapter 5 see relevant section for more details.
This question will need a brief definition of client/server (C/S) and can then list the main
disadvantages that there will be compared to the more traditional mainframe arrangement. These
disadvantages potentially include
Cost the total cost of ownership (TCO) of maintaining systems with PC-based clients is
known to be higher than systems with simpler clients (see Chapter 16).
Performance and scalability the speed of client/server can be poor since with downsizing the
processor power may be limited. There may also be a GUI which has a large programme that
does not execute rapidly on a PC client.
Stability and reliability client/server systems tend to be less reliable than mainframe systems
since they are designed using components from a range of manufacturers, some of which
may not be well tested. This contrasts with well-established mainframe systems from a more
limited range of suppliers.
Security client/server usually have more entry points and use operating systems on the
client such as Windows that make them less secure.
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CHAPTER 12
System build, implementation and maintenance:

change management
Activities
Activity 12.1
The purpose of this activity is to identify appropriate cultural changes that may be necessary for
e-business success.
Review the four general categories of organisational cultural orientation summarised by Boddy
et al. (2005) and take each as characterising four different companies and then suggest which
will most readily respond to the change required for a move to an e-business. State whether you
think the cultures are most likely to occur in a small organisation or a larger organisation.
This question requires sweeping generalisations!

1. Survival (outward-looking, flexible)
Well able to respond to change, but not in a structured way some opportunities may
be missed and mistakes made (but these will be learnt from).
More typical of a small organisation (start-up company).
2. Productivity (outward-looking, ordered)
3.
4.
Will respond in a structured way, once the importance of the issue is understood. May
take a long time to respond compared to a less rigid organisation.
Typical of a large organisation.
Human relations (inward-looking, flexible)
May not respond well, because inward-looking. Will depend on key staff taking the
initiative and convincing others.
More typical of a small company and/or one especially dependent on the quality of its
staff for performance (e.g. management consultancy, advertising agency).
Stability (inward-looking, ordered)
5. Slowest of all the types to respond.
More typical of an established or large organisation.
201
Case Study 12.1: Applying performance goals to business process

management (BPM) drives growth and innovation
1. How does the article suggest that business thinking and practice has evolved since the
exhortations for business process re-engineering in the 1990s?
2. Summarise the benefits for BPM discussed in the article.
3. Discuss the need for a concept such as BPM when all new information systems and
information management initiatives are ultimately driven by process improvement.
1. Original idea was to use technology to enable people to undertake activities more efficiently
and effectively. However it is recognised that people work through processes, which are
supported by technology. Thus, there is more focus on the design and performance of the
business processes using business process management.
2. Provides methods to automate and/or improve activities and tasks for particular business
processes. Incorporates performance management, which steers the organisation towards its
corporate goals.
3. BPM provides the framework within which processes can be designed, supported by
technology and used by people.
Case Study 12.2: Service-oriented architecture (SOA)

1. Explain the advantages and the disadvantages of the SOA approach.
SOA allows an organisation to think of its business processes and, thus, its information
technology (IT) systems in terms of a few generic actions which need coding only once and
can then be re-used many times. With SOA you only have to make the business processes work
together, not the applications. This is a benefit because it is easier to standardise business
processes rather than applications or IT systems. For example, if a procure to pay process is
defined and implemented using SOA, then councils can share procurement and achieve
potential savings, while continuing to use different IT systems.
The big disadvantage is that to use SOA with current practices and traditional IT architectures
requires significant capital outlay, which is typically spent on integration and replacing existing
systems. That means little funding remains to extend functionality or incorporate new
organisations into the shared services culture.

1.
What are the main activities that occur in the build and implementation phases of a
systems development project?
Build programming (implementation of design), testing by programmers and selected trained

users, migration of data to new system and documentation.
202
Implementation procurement of equipment for new system, installation of system, further

training, testing by users, managing the changeover from old system to new system and its
impact on staff.
2.
What is the difference between unit and system testing?
Unit testing involves the validation of individual modules in the system, checking that their
outputs are consistent with their inputs (black box testing). System testing involves the
assessment of how well the different modules of the system interact it tests the overall
integrity of the system.
3.
How can resistance to change among staff affect a new information system?
Users may exhibit the following behaviour:
Avoidance they try to use existing paper-based or information systems
Projection they may blame the system since they do not like the new way of working
Aggression users may take action to stop the system working or generate errors.
4.
What are the most important factors in reducing resistance to change?
Training can help reduce resistance to change, in particular if staff are told the reasons why the
system is being introduced to support the business and possibly safeguard their jobs. Handson training in use of the system can also help increase trust in the system, as can a help desk
for staff. The business should be careful to set expectations at a realistic level. Involvement in
the acquisition and implementation of the system can also help.
5.
Why is it important to manage software change requests carefully?
Software change requests are difficult to manage because of their volume. If a procedure for
dealing with them is not established, some changes may be ignored or conversely time will be
taken fixing problems that are relatively unimportant. The procedure should have a method for
prioritising the requests so that only the pressing ones are dealt with.
6.
What is the difference between the direct changeover method and the parallel
changeover method?
Direct changeover involves moving from an old IS to a new IS at a point in time while parallel
running involves a period of overlap in which both systems are running.
7.
What is the best option for an end-user to program a system?
It is best to use a high-level tool such as an application generator or a fourth-generation

language (4GL) that minimises the need for programming. A tool such as Microsoft (MS) Visual
Basic for Applications that is integrated with standard desktop applications is also appropriate
since users will already be familiar with tools such as MS Access or MS Excel.
8.
What is the purpose of a post-implementation review?
A review is intended to highlight problems with the management and implementation of a project
in order to learn lessons for the future. It will also highlight the deficiencies identified in a system
that can be targeted for a future release of the system. Action can be taken to change the way
support is delivered to the users, if necessary. The frequency of such maintenance releases can
be set in the review.
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CHAPTER 14
Information systems management

Activities
Activity 14.1
This is an additional case study on the companion website. You should suggest an appropriate
strategy for SSL, which is distributed over several sites in the UK.
The case study is also reproduced here, for convenience:
ACTIVITY SECURITY SERVICES LIMITED (SSL)

The case study Security Services Limited (SSL) provides the basis for the questions that
follow.
INTRODUCTION
SSL have grown over the last 30 years to be one of the main providers of private security
services in the United Kingdom. Turnover for the financial year ended April 1995 was up 17%
to 98.4 million from the previous year. Profitability has remained steady at around 9.2% of
turnover for three successive financial years. SSL provides a wide range of services to
companies, individuals and the public sector. The company has grown owing to a combination
of factors including organic growth from the original core business, start-ups in associated areas
of security and finally takeover of and merger with companies providing related services. The
range of services offered include:
armoured transport for conveying substantial amounts of cash and cheques between
businesses and banks, cash from banks to businesses for wages and conveyance of highvalue items between various parties;
provision of security services for businesses these will include security guards (day and/or
night-time cover), analysis and installation of security devices and regular security sweeps
of business premises;
provision of domestic security services this includes the analysis of domestic security
needs and the installation of appropriate security devices.
The most recent addition to the range of services has been the transfer of prisoners between
police cells, the courts and prison. This is a contracted-out service sanctioned by the Home
Office and carried out to Home Office standards.
219
COMPANY ORGANISATION
Because of the way in which SSL has evolved, the present company structure does not
necessarily represent the most effective or efficient way of doing business.
SSL has its corporate headquarters in Milton Keynes, Buckinghamshire. It also has four discrete
divisions each of which represents a key area of the business. The divisions are geographically
separate from the corporate headquarters and are organised as follows:
The Private Transport Division (PTD) based in Bedford, they also have offices in the
county town of every county in England and Wales.
The Business Security Division (BSD) based in Leicester, they too have offices in the
county town of every county in England and Wales.
The Domestic Security Division (DSD) based in Newcastle-upon-Tyne, they have similar
provision of offices to the above two divisions.
The Home Office Services Division (HOSD) this is based in Central London; the precise
organisation of this division will be covered later.
None of the divisions shares its premises with any of the other divisions. This is in part due to
the way in which the business has evolved (including takeovers and mergers). However, it is
also due the very separate operation of each division.
DIVISIONAL RESPONSIBILITIES
The autonomous nature of the PTD, BSD and DSD divisions means that in effect it carries out
all the activities associated with an individual business. The ways in which each division carries
out its business activities varies from division to division.
PRIVATE TRANSPORT DIVISION (PTD)
Sales section these are charged for in two ways: (1) contract sales these are negotiated for
various periods and typically relate to regular transport of specific items between two or more
locations; (2) one-off sales these will be for single transportation tasks arranged by customers
on an ad hoc basis.
The sales area is headed by a senior sales manager based at the divisional headquarters. Each
area office also has a sales coordinator, together with a number of sales executives.
Marketing section this is performed by a small marketing department of two persons based at
the divisional headquarters. Annual marketing spend is small this division carries out core,
well-established business operations, with limited scope for growth.
Transport section this is the key area for this division; the business operations depend on
scheduling the appropriate vehicle for the appropriate route and with the right security team. In
addition, activities such as vehicle maintenance and staff duty rostering have to be managed.
220
Information systems section this is a subpart of the transport section; the division operates a
network of three personal computers (PCs) running the following applications:
Financial ledgers (Sage Sovereign)
Route planning (Autoroute)
Duty rostering (end-user developed spreadsheet)
Payroll processing is contracted out to Midwest Bank Business Services.

Job costing for new and renewed contracts is performed manually, as is one-off business. This is
an area where a new information system (IS) may be useful.
The IS function in this division is managed by an ex-policeman who gained some IT experience
while in the force but who is not an IT specialist. However, he has made judicious use of
consultant support since his appointment.
BUSINESS SECURITY DIVISION (BSD)
This part of the business has experienced steady growth over the past 5 years. Recent
developments have included a response to increased levels of computer theft in small to medium
hi-tech companies. An objective of this division is to continue with this organic growth, while at
the same time increase its profile in the hi-tech marketplace. The management structure is well
established and comprises the following:
Sales managed by a team of sales consultants based at each office. At office level, they are
managed by a senior sales consultant. The senior sales consultants report to the Sales Director in
Leicester. Sales data is recorded on a PC-based sales ledger and monthly sales figures are sent
to Milton Keynes on floppy disk. This department also runs a separate stand-alone PC-based
sales tracking and marketing system. A subsection of this department is an installations section
that is responsible for supplying and fitting security equipment as ordered by the customers.
Marketing there is no specific section dealing with this; marketing is perceived as being little
more than advertising and leaflet drops in each geographic area and it is left to the sales force to
accomplish this.
Finance section this division has a separate finance function that runs a range of stand-alone
PC-based financial ledgers. Purchase and general ledger information is communicated to head
office on hard copy this is because the ledgers are incompatible with the systems used at head
office. Payroll processing is also carried out in-house using the Pegasus payroll package on a
stand-alone PC.
Purchasing section this is a subset of the finance section that deals with equipment
procurement for the installations section. Manual purchase data is passed to the finance section
for processing.
The IS function is now managed by a 24-year-old graduate in Business Computing who has just
replaced a recently retired senior accountant.
221
DOMESTIC SECURITY DIVISION (DSD)

This is the most recently established division, having being created by the acquisition from the
receivers of a nationwide chain of domestic security specialists within the last 6 months. They
have inherited a sound infrastructure of local offices and a reasonable customer base and have
been concentrating on turning round a business operation that failed principally because of
inadequate financial controls.
The key issues for this division are to expand the customer base by (1) increasing the number of
customers, (2) marketing new services (e.g. security audits) and (3) emphasising the need for
ongoing maintenance of existing security systems.
This division is devolved down to area office level, with each office responsible for the local
management of the sales activity, materials procurement and installation. Costs and revenues
are, therefore, managed at the local level with little current coordination by the divisional head
office in Newcastle-upon-Tyne. Currently, the divisional head office is responsible only for
collecting financial data from each of the branches (provided by them manually and in a variety
of different formats), which it then collates and then passes to SSL headquarters, again in
manual paper form. SSL realises that it has to do something about the whole set-up in order to
establish a strategic and operational direction for this division.
There is no IS investment and no specialist IS staff in this division.
HOME OFFICE SERVICES DIVISION (HOSD)
This division was set up some three years ago as a result of a successful tender to manage the
transportation of prisoners between police cells, the courts and the prison service. In addition to
the divisional headquarters in Central London, there are six regional offices throughout England
and Wales. From these offices, the transport of prisoners and deployment of staff is coordinated.
In addition to staff in the transportation vehicles, a number of staff are stationed permanently at
police stations in each county.
The divisional headquarters is responsible for the following:
The coordination of the regional offices.
Ensuring that the contractual arrangements are adhered to.
Accurately costing both the standard service provision plus any additional services offered.
Processing the accounts payable and receivable, and providing financial and management
accounting information to SSLs headquarters (manual hard copy only).
This division is the most well organised in computing terms: the divisional headquarters runs an
IBM AS/400 minicomputer on which it has a set of financial ledgers, budgeting and costing
software that has been purchased from KCB Ltd (a specialist in AS/400 financial systems); each
regional office has a PC running routing and rostering software; each regional PC is linked to
the AS/400 over a wide area network (WAN); the divisional headquarters also has a number of
PCs running business productivity-type packages (e.g. spreadsheet), which are also linked to the
AS/400 (thus allowing the download of data to the PCs for further analysis). The divisions
222
computing is managed by a hybrid manager with both financial and IT expertise. There is also
one analyst/programmer and one operator/programmer.
SSL HEADQUARTERS
The company has yet to rise to the challenge represented by an increasingly diverse yet related
range of business operations. Similarly, an historic under-investment in IS has meant that the
divisional areas can only send information in manual form only where it is re-keyed into
relatively old mainframe-based financial systems.
The divisional nature of SSL means that the activities at headquarters are principally general
and financial managementorientated.
The information technology (IT) department is somewhat old-fashioned and certainly less up to
date than some of the divisions. In addition to a data processing (DP) manager, there are six data
entry clerks who are responsible for re-keying financial data from the divisions, three
programmers, a systems analyst and two computer operator/systems programmers. When the
DP manager is about to retire, SSL must consider how it wishes to manage IS both at
headquarters and divisional level.
Questions
1. It is recommended that up to 1 hour should be spent on each question.
2.
Analyse how SSL may identify the value that it obtains from its current portfolio of IS and
evaluate the techniques that may be used in assessing future IS investments.
3.
In many parts of the company, it is clear that SSL does not have a coherent IS strategy.
Analyse how it may construct an IS strategy that is supportive of its business strategy and
the benefits it would derive from this.
4.
Analyse the strategic potential for greater investment in IS and technology at SSL, both
from divisional and company-wide perspectives. Could business process re-engineering
(BPR) be a useful tool in maximising the potential of IS and IT within the company?
Explain and justify your answers.
5.
Describe the current location of IS functions within SSL. Recommend the best location of
IT services in the future.
Specimen answers
The strategy can refer to any of these four areas below, which can be set as additional assignment
questions.
It is recommended that students should spend up to 1 hour on each question.
1. Analyse how SSL may identify the value it obtains from its current portfolio of IS and
evaluate the techniques that may be used in assessing future IS investments.
In this question, students need to distinguish between the current and future IS/IT investments.
223
For the present systems, value will relate to the ways in which existing decision-making
processes are supported by the IS/IT already in place. It is questionable if assessing the current
value is a particularly worthwhile process in the first place. The systems already exist and there
has been a past financial commitment as well as current and future commitments in terms of
maintenance and other running costs. What needs to be done, therefore, is to assess the current
and ongoing costs against the benefits that arise from current system usage. Assigning monetary
values to the costs is relatively straightforward since many of the costs will be tangible in
nature. The benefits are a different issue, since many of them will be intangible. However, it
may be possible to assess the additional costs of running the business if the current systems did
not exist (e.g. by replacing computerised systems with manual paper based ones). Again, it is
questionable whether or not this is a worthwhile exercise, especially where systems are
classified as key operational or strategic systems.
What will be useful is to take the existing portfolio of applications across the group as a whole
and classify them according to the Ward and Griffiths matrix, designating current systems in the
way they fall into the following categories:
support
key operational
high potential
strategic.
In this way, the strategic impact of the systems both in terms of current and future contributions
can be classified.
For future applications, students need to analyse alternative methods of assessing the
contribution of future systems development. They need to evaluate:
hard financial methods (NPV, ROI, payback etc.);
other methods (balanced scorecarding, information economics etc.).
Students need to identify current practice amongst public and private organisations to
illustrate their arguments. They also need to address whether or not:
hard financial methods can guarantee sound investment decisions;
other approaches such as balanced scorecarding offer more informed decision making;
managers usually make investment decisions on a leap of faith, gut feel, or

entrepreneurial judgement;
a portfolio of appraisal methods is needed.
2. In many parts of the company, it is clear that SSL do not have a coherent IS strategy.
Analyse how it may construct an IS strategy that is supportive of its business strategy and
the benefits that it would derive from this.
224
To answer this question, students need to look at alternative approaches. Besides particular tools
and techniques, they need to identify a framework within which the tools can be applied.
One of the most useful frameworks is business impacting, versus business aligning. As discussed
in Chapter 14, it is useful to consider tools for strategy formulation and implementation in the
context of whether they are intended to directly support an existing business strategy (business
alignment) or indicate new opportunities that may impact positively on a business strategy
(business impacting).
Within this framework, alignment techniques include the following:
critical success factor (CSF) analysis;
business systems planning;
strategy set transformation.
While impacting techniques include:
competitive forces models;
competitive strategies;
value chain analysis.
It is also desirable for students to consider possible planning process frameworks. These include
the following approaches:
top-down
bottom-up
innovative
eclectic (selective)
middle-out.
Finally, the balance of the applications portfolio can be distributed amongst the following
categories:
external long-term
external short-term
internal long-term
internal short-term.
The above framework together with the Ward and Griffiths' matrix model can help to guide an
analysis of how the business might benefit. As seen in earlier chapters, business benefits can
relate to:
225
capability volume, nature of business transactions;
cost management remove duplication of functions, replace expensive manual processes

with more efficient computerised ones;
control knowledge about business activities that can be easily communicated to the senior
management team;
competitive advantage by using IS/IT to create business opportunities, reduce costs, offer
better service etc.
3. Analyse the strategic potential for greater investment in IS and technology at SSL both from
a divisional and company-wide perspective. Could BPR be a useful tool in maximising the
potential of IS and IT within the company? Explain and justify your answers.
As with the previous question, students need to construct a suitable framework for the answer.
For the first part of the question, it is recommended that students use some of the tools relating
to the impacting and aligning techniques described in the chapter. It is not proposed to come up
with specific answers to this question. However, by looking at both Porters five forces model
and value chain tools, it will be possible for students to analyse the opportunities both from an
internal and an external perspective. The competitive forces model will allow SSL to look at
how IS/IT can be used to:
improve linkages with customers;
improve supply chain management;
create barriers to entry by potential competitors;
reduce the risk from substitutes by differentiating the product.
Similarly, by using the value chain model, it will be possible to identify how IS/IT can be used
both within individual functional areas and between those areas. Examples might include the
following:
New systems in sales and marketing to present a unified product range and focus marketing
activity more effectively;
Rationalised accounting systems for the group as a whole to reduce costs and establish
improved financial control;
Improved business operations by using IS/IT to improve workflow.
The second part of the answer should emphasise how BPR focuses on analysing business
processes and how they add value to the business. Again, value chain analysis will allow the
business to focus on the processes that exist between each functional area and how processes are
linked across functional areas. Processes can then be analysed to see whether or not they can be:
eliminated;
combined with other processes using systems to link them;
226
made more efficient by using IS/IT (by reducing manual effort, or making them more
transparent).
4. Describe the current location of IS functions within SSL. Recommend the best location for
IT services in the future.
The first part of this question is fairly mechanical and can be produced without too much effort.
Students need to reflect on how the present IS/IT is distributed across the divisional areas with
little central control or management. They also need to observe that the present structure stems
from the way the company has evolved over recent years.
For the second part, students need to be clear about what needs managing in the first place.
They also need to be clear that when we refer to the best location for IS/IT services, we are
actually referring to where within the organisation specific elements should be located. The
elements that students need to consider include the following:
IS strategy planning
Hardware platform
Network architectures
Systems development tools
Legacy systems strategies
IS/IT staffing.
Operations management
Hardware architecture management
Capacity planning
Security (backups, access control, error detection and archiving)
Technical support (hardware and systems software)
Telecommunications management
Distributed computing
Network availability
Network security
227
Business systems development
Systems development centre administration
Migration and conversion strategy
Database administration
Repository/data dictionary administration
Database management
User support
Help-desk support
Information centre services end-user computing
Training
Shared services e-mail, collaborative work systems (e.g. Lotus Notes).
Quality assurance
The alternative locations discussed in Chapter 14 are mainly centralised versus decentralised,
and various considerations are given there. There will be a range of different approaches given
by the students. The broad approach that is often given is as follows:
Centralised
(a) IS/IT strategy formulation
(b) Development of corporate IS (including DBMS selection and management)
(c) Infrastructure strategy and implementation
Decentralised
Development of personal or specifically departmental systems
Localised help-desk support
Given the way the company has evolved, students often suggest that a high degree of
centralisation is needed initially in order to establish control of the IS/IT function as it relates to
all divisions of the business.
228
Activity 14.2
Examine Table 14.1 and assess which of the reasons for outsourcing would be important to the
following:
1. Financial manager (chief finance officer)
2. Information systems manager
3. Managing director
4. Departmental manager in human resources, marketing or production.
1. Financial manager (chief finance officer). The attitude of the (CFOs) will depend on their
view of IS. They may simply see IS as a means of reducing costs. However, if they are also
responsible for managing IS, they will be concerned with its impact on customer service, so
may see outsourcing as a way of improving this.
2. IS manager. As the IS manager, cost reduction would be a factor since the IS budget may
not be increasing, but demand for services is. The need for specialist expertise, perhaps
related to e-commerce may prove attractive, especially if it has proved difficult to attract
staff in this area due to the salaries required.
3. Managing director. The fact that 21% see outsourcing as a strategic business decision
suggests that managing directors are likely to be involved in this decision. They may be
looking to reduce the headcount or feel that this is the most effective way of getting more
bang for your buck.
4. Departmental manager in human resources, marketing or production. They will mainly be
concerned with the impact on quality of service for their users or customers. Since they are
not likely to pay for IS services from their own budgets, they will be less concerned about
the cost implications than managers of those departments responsible for the bill.
Case Studies
Case Study 14.1: Why do public-sector projects fail?
1. Public-sector information systems projects have had a chequered history. Is the national
programme for IT proving to be any different from some of the fiascos that have preceded
it?
2. The national programme for IT involves a substantial increase in outsourcing. What are the
likely benefits and risks associated with this approach?
3. Could the COBIT methodology be applied in this context?
1. It is recommended that students look at relevant National Audit Office (NAO) reports,
Treasury Select Committee reports and similar publications. In addition, Computer Weekly
has had a long-running series on the National Programme for IT. Gerry Robinson has also
expressed views on the project on the British Broadcasting Corporation (BBC).
229
It might be useful for students to look at previously published NAO guidelines for managing
public-sector IT procurement projects: http://www.nao.org.uk/publications/nao_reports/0304/0304877.pdf.
2. It is recommended that students look at examples of previous public-sector IT projects
where outsourcing has played a significant role (e.g. Siemens and the Passport Office
project). Electronic Data Systems (EDS) have also been involved in a number of projects.
It would be useful for students to look at Computing and Computer Weekly for examples of
public-sector outsourcing.
3. The material in Chapter 14 on outsourcing should provide a framework for students to
answer the question both in terms of the risks/dangers and benefits from outsourcing. It is
suggested that these ideas be applied to public-sector outsourcing in general and the national
programme for IT in particular.
The Control Objectives For Information and Related Technology (COBIT) methodology
clearly provides a framework by which IT projects can be managed but then so does the NAO.
So yes, the methodology can be applied. However, the question goes deeper than this to what
extent is the political and organisational will to follow the methodology (especially if the
outcome is not politically expedient!)? Are there factors that relate to public-sector IT projects
that do not apply in the same way to private sector ones? One factor, for example, is that publicsector projects tend to be on a larger scale and can also be more complicated than private sector
ones which in turn adds a layer of complexity to them. In addition, failures tend to be more high
profile.

1.
What factors might account for the productivity paradox relating to IS/IT investments?
The main factors identified include:
mismeasurement;
the lag occurring between initial investment and payback;
mismanagement of IS projects.
To this can be added the notion that business benefits are often intangible in nature (e.g.
improving customer satisfaction) and that it is hard to put a money value on some factors. This
would tend to reinforce both the mismeasurement and lag arguments.
2.
When information systems costs are being considered, what kinds of costs would
be considered development costs and what would be considered operations/
maintenance costs?
Development costs would include the following:
package software and bespoke development costs;
230
relational database management system (RDBMS) acquisition;
initial hardware and infrastructure acquisition;
development tools.
Operations and maintenance costs include the following:
ongoing software licence costs;
legacy system maintenance;
telecommunications running costs;
help-desk support;
security management;
hardware technical support;
systems programming support.
3.
How do strategic systems differ from high-potential projects?
Strategic systems are critical to sustaining future business strategy, while high-potential projects
either may or may not be important to the future success of the organisation. A high-potential
project may become a future strategic system.
4.
Why do information systems projects fail?
These issues are also covered in Chapter 8. Students should identify some of the following:
Technical failure. Stemming from poor technical quality, this is the responsibility of the
organisations IS/IT function.
Data failure. Owing to (a) poor data design, processing errors and poor data management
and (b) poor user procedures and poor data quality control at the input stage. The fault of
the former lies with the IS/IT function, while the fault of the latter lies with the end-users
themselves.
User failure. Users dont use the system to its maximum capability may be due to an
unwillingness to train staff or user management failure to allow their staffs full involvement
in the systems development process.
Organisational failure. Where an individual system may work in its own right but fails to
meet organisational needs as a whole (e.g. while a system might offer satisfactory
operational information, it fails to provide usable management information this results from
senior management failure to align IS/IT to overall organisational needs.
Failure in the business environment. This can stem from systems that are inappropriate to
the market environment, IS/IT not being adaptable to a changing business environment
(often rapid change occurs), or a system not coping with the volume and speed of the
underlying business transactions.
231
5.
Explain the difference between project size and project complexity when evaluating
information systems risk.
A project size in itself does not necessarily mean that the project will have a high level of risk,
provided that a large project is straightforward. However, with higher levels of project
complexity, risks are increased significantly. When taken together, large, complicated projects
have the highest levels of risk.
6.
What are the main different types of outsourcing?
Generally, the alternative types relate to the scale of the outsourcing being undertaken. These
can include the following:
Facilities management
Total outsourcing
Selective, targeted or partial outsourcing.
1.
The millennium bug has demonstrated that organisations, more often than not, take
a short-term view in their approach to information systems rather than a strategic
one. Discuss.
Students should concentrate on applications software rather than other issues such as
processor chips. They can centre their discussion around the following points:
Some legacy systems in current use can date back to their original development at least two
decades ago; the writers of these systems never envisaged that the software would still be
running 20 or more years later. This suggests that the software falls at least into the
support or even the key operational categories.
The legacy systems referred to above were built at a time when memory and disk space
constraints were severe and developers took every possible step to reduce storage space
for data and programs. It has been argued that running applications with full eight-digit
dates would have been prohibitively expensive, thus putting off systems development and
preventing businesses from gaining the benefits of computerisation. Similarly, the cost of
fixing these systems is less than the benefits that have accrued over the life of the system.
There is evidence that systems developed as recently as 6 or 7 years ago were not
millennium compliant. It is much harder to argue the storage and memory costs issue here.
Recently developed systems that use six-figure dates, therefore, do suggest that a shortterm view exists.
The failure of many companies to get up to speed with their millennium compliance activities
also suggests that a degree of complacency exists (especially for those businesses with a
turnover of between 1 and 50 million). Also, it is suggested that some public-sector
organisations are leaving things to the last minute. Both of these points suggest that, again,
too many people are not taking the problem sufficiently seriously and are concentrating on
short-term objectives.
232

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Title page. This lists the title of the chapter.

Basic concepts understanding information

Allows information to be transmitted between members of staff quickly. However, a

In highly competitive industries, informal communication can be used to gather

As more organisations adopt an approach based on centralising resources, more reliance

4. It is worth pointing out that it would be impossible to eliminate informal communication

(f) Tactical: Cannot be readily automated.

Knowledge is made up (in part) of information, rather than data.

Knowledge involves elements such as reasoning, understanding, perception etc.

Knowledge draws on experience.

Knowledge can help to guide future actions.

There are different forms of knowledge.

Advances in technology mean greater quantities of information are available but

Duplication of information caused by allowing individual departments to keep their

Too much irrelevant information exists; the required information is buried.

Time is spent finding out if the information needed actually exists.

Information is presented in a way that is difficult to understand, so it takes longer to

Information is badly organised, making it harder to search quickly.

Information is spread out across a number of locations (e.g. across departments).

Information is stored in different formats or presented in different ways.

3. Some examples drawn from the case study:

Information regarding measurements is wrong. Information is not accurate.

Information that customers want/need is not available (e.g. ingredients or environmental

Increased sophistication of buyers. Customers have more specific requirements; e.g. we

Exercises (pp. 3031)

What are the three dimensions of information quality?

Time, content and form.

How can the value of information be measured?

The value of information can be measured in two basic ways:

By the improvements it brings to managerial decision-making (intangible value).

By attempting to place a financial value on the information (tangible value).

These points might be expressed with two simple formulae:

(Tangible value) value of information minus cost of gathering information.

(Intangible value) improvements in decision behaviour minus cost of gathering information.

What are the functions of management?

What are the stages involved in making a decision?

More suited to structured decisions

More suited to unstructured decisions

High level of analytical thought

Relies heavily on prior experience,

Can provide detailed justifications for

More willing to accept qualitative information

Prefers quantitative information, will often

Examines situations as a whole, taking a

Examines situations at a high level of detail,

What differences in perspective about managerial decision making are introduced

In brief, what is knowledge?

Against open access

It may not be possible to determine what

Organisations have a duty to protect

Wider access to information may help the

Allowing free/open access to all

Providing wider access to information

Open/free access may harm the

Providing open/free access to

Basic concepts an introduction to business

Billing software (will

Stock control software

Time and date

Supplier data, e.g.

Suppliers, sales staff,

Business Information Systems - Instructor's Manual

Business Information Systems - Instructor's Manual