SYSTEMS

SYSTEM
Characteristics of a system
Types of Systems
CAT1:Physical Vs. Abstract
CAT2:Open Vs. Closed System
CAT3:Natural vs. Man-made
System Development
Basic System Development lifecycle
Origin of System projects
Principles of system development
Overlapping activities
System Development Team

Elements of a system
Input-process-Output Model [IPO]
Input
Output
Process
Control
Feedback
Environment
Boundaries and Interface

THE BUSINESS SYSTEM

The Business System structure
Information System As A Business Subsystem
Information system functions
Data & Information
Transaction processing
Management Reporting
Decision Support System

SYSTEM DEVELOPMENT PROCESS

Detailed System Development lifecycle
System Development Methodologies
Structured Methodologies
Object-Oriented methodologies
SYSTEM
A system is a purposeful collection or set of elements, components or procedures
that Work together to Meet or produce a single and specific objective or outcome.

CHARACTERISTICS OF A SYSTEM

1. COMPONENTS A system is made up of components. A component is an entity

with well-defined inputs, outputs or characteristics. A
system component has three basic interacting functions:

 Input
 processing
 output

1. Input: Involves capturing and assembling elements

that enter the system to be processed.
2. Processing: transformation processes that convert
input into output. For example mathematical
operations.
3. Output: elements that have been produced by a
transformation process.

A component is either an irreducible part or an aggregate

of parts, also called a subsystem.

BOUNDARY A system has a boundary, within which all of its components

are contained and which establishes the limits of a system,
separating it from other systems. Components within the
boundary can be changed, whereas systems outside the
boundary cannot be changed.

GOAL All of the components work together to achieve some overall

purpose for the larger system: the system’s reason for
existing.

ENVIRONMENT A system exists within an environment—everything outside

the system’s boundary that influences the system. Usually
the system interacts with its environment. A system takes
input from its environment in order to function.

INTERFACE The points at which the system meets its environment are
called interfaces; an interface also occurs between
subsystems.
CONSTRAINTS In its functioning, a system must face constraints—the
limits (in terms of capacity, speed, or capabilities) to
what it can do and how it can achieve its purpose within
its environment. Some of these constraints are imposed
inside the system (e.g., a limited number of staff
available), and others are imposed by the environment
(e.g., due dates or regulations).

INTEROPERATION Components are compatible with each other- a component can

produce an output for another component or consume an input
from another component such that the overall goal or
objective is met.

INTEGRATED Hierarchical relationships exist between components.

Integration is concerned with how a system is tied
together. It is more than sharing a physical part or
location. It means that parts or subsystems of the system
work together within the system such that they function as
single entity even though each part performs a unique
function. Successful integration will typically produce a
synergistic effect and greater total impact than if each
component works separately.

INTERDEPENDENCE The function of one is somehow tied to the functions of the

others. Dependence of one part of the system on one or more
other system parts. One subsystem depends on the input of
another subsystem for proper functioning: that is, the
output of one subsystem is the required input for another
subsystem. This interdependence is crucial in systems work.
No subsystem can function in isolation because it is
dependent on the data (inputs) it receives from other
subsystems to perform its required tasks.

ORGANIZATION Organization implies structure and order. It is the

arrangement of components that helps to achieve objectives.
Such an arrangement portrays a system – subsystem
relationship, defines the authority structure, specifies
the formal flow of communication and formalizes the chain
of command. Like – wise, a computer system is designed
around an input device, a central processing unit, an
output device and one or more storage units. When linked
together they work as a whole system for producing
information.

INTERACTION Interaction refers to the manner in which each component

functions with other components of the system. In a
computer system, the central processing unit must interact
with the input device to solve a problem. In turn, the main
memory holds programs and data that the arithmetic unit
uses for computation. The interrelationship between these
components enables the computer to perform.

SYNERGY System accomplishes a higher level capability that cannot

be achieved if each component works separately.
INTERRELATION

COMPLEXITY Interactions between components of a system can become

complex and subtle. A change in system component A can
cause a change in component B, which can “ripple” into
component C. The change in C can cause a “feedback” effect
on the original component A and such a feedback may not
operate instantly- it may take weeks, months or even years
between the original activity in component A and the effect
of the impact of the feedback on A by C.

GROWTH A system may grow in size, performance or other parameters.

A typical information system will grow to include more
software, hardware, data, functions, users or networks than
initially planned.

RESOURCE DRIVE The larger a system is the more of its resources that must
be devoted to its everyday maintenance. A small information
system may lesser effort to develop when compared to a
larger one. Thee larger information system will require
enormous effort in areas such as error checking, editing,
back up, maintenance, security and documentation.

SPECIALIZATION A system can be optimized to meet the objectives of a

particular situation. The more specialized a system is, the
less it is able to adapt to different circumstances.
ELEMENTS OF A SYSTEM

1. INPUT-OUTPUT-PROCESS ELEMENTS [IPO ELEMENTS]

The major objective of a system is to produce an output that has value to its user.
Systems can be described in terms of inputs, outputs and processes. Any system’s
component can be classified according to this input-output-process model.

Output = f (input, processing)

MANUFACTURING SYSTEM INFORMATION SYSTEM

INPUT: Raw materials INPUT: Data: collection of raw

unprocessed facts
OUTPUT: Finished products
OUTPUT: Information: Processed data
PROCESSORS:
Machines, tools & people that PROCESSES: Processes that transform data
transform raw materials into into information- end-users,
finished products computer hardware,
computer software, data
storage, methods and procedures.

Whatever the nature of the output (goods, services, or information), it must be in

line with the expectations of the intended user. Inputs are the unprocessed
elements (material, human resources, and information) that enter the system for
processing. Output is the outcome of processing or processed elements. A system
feeds on input to produce output in much the same way that a business brings in
human, financial, and material resources to produce goods and services. It is
important to point out here that determining the output is a first step in
specifying the nature, amount, and regularity of the input needed to operate a
system. For example, in systems analysis, the first concern is to determine the
user’s requirements of a proposed computer system – that is, specification of the
output that the computer is expected to provide for meeting user requirements.

The processor is the element of a system that involves the actual transformation of
input into output. It is the operational component of a system. Processors may
modify the input totally or partially, depending on the specifications of the
output. This means that as the output specifications change so does the processing.
In some cases, input is also modified to enable the processor to handle the
transformation.

2. FEEDBACK AND CONTROL

Control ensure that input data is valid before it is processed, that file and
database data are protected against unauthorized access and update. The control
element guides the system. It is the decision – making subsystem that controls the
pattern of activities governing input, processing, and output. In an organizational
context, management as a decision – making body controls the inflow, handling and
outflow of activities that affect the welfare of the business. In a computer
system, the operating system and accompanying software influence the behaviour of
the system. Output specifications determine what and how much input is needed to
keep the system in balance.

Control in a dynamic system is achieved by feedback. Feedback measures output

against a standard in some form of cybernetic procedure that includes communication
and control. Output information is fed back to the input and / or to management
(Controller) for deliberation. After the output is compared against performance
standards, changes can result in the input or processing and consequently, the
output.

Feedback may be positive or negative, routing or informational. Positive feedback

reinforces the performance of the system. It is routine in nature. Negative
feedback generally provides the controller with information for action. In systems
analysis, feedback is important in different ways. During analysis, the user may be
told that the problems in a given application verify the initial concerns and
justify the need for change. Another form of feedback comes after the system is
implemented. The user informs the analyst about the performance of the new
installation. This feedback often results in enhancements to meet the user’s
requirements.

3. ENVIRONMENT
The environment is the “suprasystem” within which an organization operates. It is
the source of external elements that impinge on the system. In fact, it often
determines how a system must function. For example, the organization’s environment,
consisting of vendors, competitors, and others, may provide constraints and,
consequently, influence the actual performance of the business.

4. BOUNDARIES AND INTERFACE (SCOPE)

A system should be defined by its boundaries – the limits that identify its
components, processes and interrelationship when it interfaces with another system.
For example, a teller system in a commercial bank is restricted to the deposits,
withdrawals and related activities of customers checking and savings accounts. It
may exclude mortgage foreclosures, trust activities, and the like.
TYPES OF SYSTEMS

Many different categories of systems are possible but the frame of reference within
which one view a system is related to the overall objective of the system and
subsystems. The universe itself is a system.

Systems have been classified in different ways. Common classifications are:

1. Physical or abstract,
2. Open or closed, and
3. “Man – made” or Natural systems

1. Physical or abstract systems

Physical systems are tangible entities that may be static or dynamic in operation.
For example, the physical parts of the computer center are the officers, desks, and
chairs that facilitate operation of the computer. They can be seen and counted;
they are static. In contrast, a programmed computer is a dynamic system. Data,
programs, output, and applications change as the user’s demands or the priority of
the information requested changes.

Abstract systems are conceptual or non-physical entities. They may be as

straightforward as formulas of relationships among sets of variables or models –
the abstract conceptualization of physical situations. A model is a representation
of a real or a planned system. The use of models makes it easier for the analyst to
visualize relationships in the system under study. The objective is to point out
the significant elements and the key interrelationships of a complex system.

2. Probabilistic or Deterministic System

Probabilistic system (or stochastic system) is the one whose outcome cannot
be predicted with precision. That is, one cannot be certain what outputs
will be achieved from specific input because these systems are subjected to
random influences from the internal and external environment. Therefore, it
cannot be predicted precisely. Examples include the business system,
economic system and particularly agricultural system.

A deterministic system also called mechanistic system is one whose

behavioral patterns can be predicted if its present state and operation
characteristics are known. Such a system operates according to a
predetermined set of rules. A good example of a deterministic system is a
computer program. The computer programmer knows in advance the output his
program will produce, if the program is error free
3. Open or Closed Systems

Another classification of systems is based on their degree of independence. An open

system has many interfaces with its environment. It permits interaction across its
boundary; it receives inputs from and delivers outputs to the outside. Information
system falls into this category, since it must adapt to the changing demands of the
user. In contrast, a closed system is isolated from environmental influences. In
reality, a completely closed system is rare. In systems analysis, organizations,
applications and computers are invariably open, dynamic systems influenced by their
environment. A focus on the characteristics of an open system is particularly
timely in the light of present – day business concerns with computer fraud,
invasion of privacy, security controls, and ethics in computing.
Five important characteristics of open systems can be identified.

Input from outside: Open systems are self – adjusting and self-regulating. When
functioning properly, an open system reaches a steady state
or equilibrium. In a retail firm, for example, a steady state
exists when goods are purchased and sold without being either
out of stock or overstocked. An increase in the cost of goods
forces a comparable increase in prices or decrease in
operating costs. This response gives the firm its steady
state.

Entropy: All dynamic systems tend to run down over time, resulting in
entropy or loss of energy. Open systems resist entropy by
seeking new inputs or modifying the processes to return to a
steady state. In our example, no reaction to increase in cost
of merchandise makes the business unprofitable which could
force it into insolvency – a state of disorganization.

Process, output and Open systems produce useful output and operate in cycles,
cycles: following a continuous flow path.

Differentiation: Open systems have a tendency toward an increasing

specialization of functions and a greater differentiation of
their components. In business, the roles of people and
machines tend toward greater specialization and greater
interaction. This characteristic offers a compelling reason
for the increasing value of the concept of systems in the
systems analyst’s thinking.

Equifinality The term implies that goals are achieved through differing
courses of action and a variety of paths. In most systems,
there is more of a consensus on goals than on paths to reach
the goals.

4. “Man – made” or Natural systems

The vast majority of systems are not made by people; they exist in nature and by
and large, serve their own purpose. It is convenient to divide natural systems into
two basic subsystems: physical and living systems.

Physical system examples: Living systems examples:

Stellar systems:  Animals[fauna]

 Galaxies  Plants[Floral]
  Solar systems  Human systems
 etc

Geological systems:

 Rivers
 Mountains
 Etc

Man-made systems are constructed, organized, and maintained by humans. These

include:

Transportation systems A network of highways, canals, airlines, ocean

tankers and the like.
Social systems Organization of laws, doctrines, customs and so on.

Communication systems Telex, telephone, smoke signals, hand signals used

by stock market traders and so on.
Manufacturing systems Factories, assembly lines,…
Financial systems Accounting, inventory, stock brokerage, …

Cybernetic System The scientific approach to the study of the way

information is moved and controlled in a specified
system is known as cybernetics. A cybernetic System
is one that automatically adapts to its
environments. A system with feedback and control
components is sometimes called a cybernetic system,
that is, a self-monitoring, self-regulating system.
The behavior of the cybernetic system is a subject
of rigorous scientific investigation.

Other man-made systems Exercise system, investment system, delivery

system, information system, education system,
computer system etc.
SUPERSYSTEMS AND SUBSYSTEMS

By the definition of a system, an organisation such as a firm or a

functional area is a system. The organisation consists of the physical
resources like; Manpower, Material, Machines, Money, and conceptual
Information (including data) and they work towards achieving particular
objectives that are specified by the owners or management.

Other examples of system are biological system, business system, electrical

system, data system, education system, operating system, mathematical
system, sound system, waste disposal system, computer system, queuing
system, etc.

The general system theory states that a system is a totality where the
whole is greater than the algebraic sum of all the individual elemental
parts of the system. Therefore, it is professionally correct for a manager
to consider his or her organisation as a system.

A Subsystem is simply a system within a system. This means that systems

exist on more than one level that is, Systems can be composed of subsystems
or elemental parts. For example, the system of the firm includes subsystems
of the bank may be such departments as savings, demand deposit (checking
accounts), and instalment loan

When a system is part of a larger system, the larger system is the super
system. For example, the system of the firm exists in one or larger
environmental systems or super systems. If the firm is a bank, for example,
it is part of the financial community. It is also part of the business
community, the local community, and the global community. The manager's
major responsibility is to ensure that the firm meets its objectives, by
ensuring that the various. parts of the firm work together as they should.

THE COGNITIVE SYSTEM: DATA-INFORMATION-DECISION CYCLE.

DATA
Data are raw facts- facts have not yet been processed to reveal (required)
meaning.

Consider the symbols below:

 128 128 what?

 Folio number 013458 What is a folio?
 At lunch they were 3 for
1
 $13.35 Price (of what?)
 Bu4NPh4B Filename or pharmaceutical
code?
 6.45

Data consists of facts and figures that are relatively meaningless to the
user. It is a piece or collection of raw facts representing:

 People
 Objects or a thing (e.g., a report or a display),
 An occurrence (e.g., a telephone call),
 An event (e.g., an alarm),
 An external entity (e.g., anything that produces or consumes
information),
 A role (e.g., salesperson),
 An organizational unit (e.g., marketing department),
 A place (e.g., a school),
 A structure (e.g., a file) or
 The day-today activities of an enterprise (an enterprise in this case
can be a church, a hospital, a school, a government ministry, a
business organisation, etc.)

The problem is that symbols or values alone (e.g. '6.45') do not have any
meaning and are of no use until they are described or interpreted in some
way.
INFORMATION
Information is the result of processing raw data to reveal its meaning.
Data Processing produces information by:
1. Describing the data
2. Placing data within a context that gives it meaning and value (context
is the information surrounding data that adds meaning to it)

TIME TABLE N8: Effective June 30 1995

London Hi-frequency to and from France
Context
Weekdays from London
Route Leicester Kibworth Harborough arrive
Data description
number depart depart
348 6.45 6.55 7.07
351 7.00 7.10 7.22
Data/symbols
348 7.25 7.25 7.37
351 7.40 7.40 7.52

A data element essentially consists of three parts:

1. The symbols
2. The description of the symbols (often simply name of the data element)
3. The context.

To reveal meaning, information requires context. For example, an average

temperature reading of 105 does not mean much unless you also know its
context:

 Is this in degrees Fahrenheit or Celsius?

 Is this a machine temperature, a body temperature, or an outside air
temperature?

Data needs to be described and it is the description and context of the

data which allows it to have meaning. Without the context, this could be
interpreted as a timetable for (probably) buses, but the reader would have
no idea whether it was the current timetable, or whether it was a Sunday,
Saturday or weekday service. Without the data descriptions, there is no
indication where the bus is going and without the context or description,
the symbols are open to so many interpretations as to render them useless.
Moreover, the timetable only provides information because the pieces of
data are related together in a tabular form and the intended recipient is
expected to assume that the symbols in each row refer to the same route
number, and that the symbols in each column refer to the description given
at the top of the column.

Information is only made available when these pieces of data and their
associated descriptions are related together in a manner relevant to the
receiver of the information. Relationships are the stuff of which
information is made. The context itself consists of data and descriptions
and relationships. Indeed, the descriptions are data! Such data, (that is,
data about data), is known as 'metadata'. The distinction between the name
of the data element such as Leicester Depart and the symbols, or values
(such as 6.45, 7.00 and so on) is vital as it is this distinction enables
us to deal with a whole class of things that share common characteristics.
We distinguish between a data element type, the general category, and a
data element value ('instance' or 'occurrence')

Symbols or values alone (e.g. '6.45') do not have any meaning, but
described symbols (e.g. 'Leicester depart 6.45') can have meaning. This is
the 'semantic contents', or the semantics of data. Different symbols may
have the same semantic contents. For example, the symbols 'Dog', 'Chien',
'Hued' all have the same semantic contents (provided you, the recipient,
understand some rudimentary English French and German). They mean the same
thing. Although they have the same semantic contents, they are composed of
different arrangements of symbols.

This leaves information with an intuitive definition as data or a sequence

of symbols, which have been put into a meaningful and useful context by
structuring and relating data elements into messages and communicating the
message to a recipient who can interpret it or derive meaning from it by
deriving the semantic content and subsequently integrate it with existing
knowledge to derive the information contents.

Data processing:

Data processing is the transformation of data into information. The

information-producing mechanism is called the information processor. Data
processing can be

 Aggregating/summarizing
 Clustering
 Classification
 Filtering
 Making Forecast
 Drawing inferences
 Organizing data to reveal patterns
 Sorting
 Correlation
 Fusing data
 Integration
 Etc.

Importance of information: why is data transformed anyway?

 To notify, surprise or give early warning signals and portend the

future
 To influence individuals and stimulates them to action
 To reduces uncertainty
 It reveal additional alternatives or help eliminate irrelevant or
poor ones
 To educate or raise the level of awareness within an organization
 TO REVEAL MEANING
Information consists of data, Images, text, documents, and voice, often
inextricably intertwined, but always organized in a meaningful context.

KNOWLEDGE

The importance of information can be valued quantitatively and

qualitatively, depending on the context. Quantitatively by how much of it
is required and qualitatively by how well it is able to support decision
making. There are unclear situations when there is a gap between results of
data transformations and their operational interpretation for decision-
making, and thus a data processing that does not allow for bridging this
gap is unlikely to meet operational expectations. Information alone rarely
provides a sound basis for deciding and acting under this situation and
taking decisions under this circumstance often lead to sub-optimal
solutions. Knowledge, which is a further transformation of information, is
required for decision-making under this circumstance. Knowledge, in this
context, is information that has been analysed to provide meaning or value
or evaluated as to implications for the problem at hand and the information
to be transformed is available from sources internal to the system and at
most forms a portion of the total needed to make decision.

SITUATIONAL UNDERSTANDING: INSIGHT, WISDOM, INTELLIGENCE…

There are other unclear or uncertain situations when there is a gap between
results of data transformations and their operational interpretation for
decision-making but the information to be transformed into knowledge for
decision-making is not available from sources internal to the system or
related to the problem at hand. Here:

 Users can estimate, but cannot predict, the actions and the course of
future events
 The situation and concept of operations described, predicted or
envisioned by available information may bear little resemblance to
actual events or change substantially during execution.
 The tacit knowledge provided by time consuming Analytic decision-making
approaches or processes cannot accommodate the dynamic relationships,
risks and uncertainty in the operational environment, making the
Analytic decision-making and orderly processes ineffective
 Even with the most advanced information systems, users often have
difficulty understanding the situation on the ground

This situation demands a deeper insight and understanding of the problem

before any effective decision or action can be taken. Knowledge derived
from the transformation of Information internally alone cannot provide a
sound basis for deciding and acting under this situation. Bridging this gap
requires defining the implications of the effect of the uncertainties of
future situations on the decisions in the current situation, assessing the
trade-offs between risks and opportunities and developing optimal
strategies of major actions that translate the decision into action.
Achieving these objectives requires situational understanding which is the
outcome of the transformation of knowledge. Decision-making process here
becomes more of an art than a scientific procedure- art of understanding,
visualizing, describing, directing, leading, and assessing current
conditions to accomplish required goals. It requires users to understand
the current situation, broadly define the future situation, assess the
difference between the two, and envision major actions that link them.
Users accept calculated risks to seize and retain the initiative. They
assess the trade-off between risks and opportunities and apply it to their
vision.

Transformation of gained knowledge under this circumstance involves the

combination of judgement acquired from experience with available
information. First, they develop a personal and in-depth understanding of
the current condition and operational environment, and then they visualize
the desired end state and a broad concept of how to shape the current
conditions into the end state. Then they employs skills developed by
professional study, constant practice, and considered judgment gained from
best practices, reflection, study, experience, training, creative thinking
and intuition to make effective decisions by bridging gaps in information.
The cognitive hierarchy, shown below, portrays the place of data,
information, and knowledge in developing understanding.

The knowledge required for achieving situational understanding, making

decisions, and action begins as data. Data transformations continue until
the outcome is optimal or meaningful enough to initiate action. The actions
triggered by the decisions produce additional data that is recycled within
the data-information-decision framework. Thus, data form the basis for
decision making, strategic planning, control, and operations monitoring.

Process Output Goal Source of input

Transformation of
information Meaning Internal
data
Transformation of
knowledge Decision-making, Action Internal
information
Transformation of
Understanding Decision-making , Action External
knowledge
THE BUSINESS SYSTEM

BUSINESS

A business is the activity of providing goods and services involving financial and
commercial and industrial aspects. Like other man-made systems, the business system
serves a purpose, profit, or service and can be characterized in terms of purpose,
goals, objectives and policies.

MANAGEMENT

Management is the organization and mobilization of all human and material resources
in a particular system for the achievement of identified objectives in the system.
Management is the force that unifies various resources and is the process of
bringing them together and coordinating them to help accomplish organization goal.
Management is both, a science as well as art. It is an inexact science. However,
its principles as distinguished from practice are of universal application.
Management does not yet completely fulfill all the criteria of a profession.

MANAGEMENT FUNCTIONS /PROCESS OF MANAGEMENT

Henri Fayol Luther Gulick Warren Haynes and Koontz and

"POSDCORB' Joseph Massie O'Donnell

1. Planning 1. Planning 1. Decision-making 1. Planning

2. Organizing 2. Organizing 2. Organizing 2. Organizing
3. Commanding 3. Staffing 3. Staffing 3. Staffing
4. Coordinating 4. Directing 4. Planning 4. Directing
5. controlling 5. Coordinating 5. Controlling 5. Controlling
 6. Reporting 6. Communicating
7. Budgeting 7. Directing

PLANNING
Planning is the most fundamental and the most pervasive of all management
functions. If people working in groups have to perform effectively, they
should know in advance what is to be done, what activities they have to
perform in order to do what is to be done, and when it is to be done.
Planning is concerned with 'what', 'how, and 'when' of performance. It is
deciding in the present about the future objectives and the courses of
action for their achievement. It thus involves:

1. Determination of long and short-range objectives

2. Development of strategies and courses of actions to be followed for
the achievement of these objectives and
3. Formulation of policies, procedures, and rules, etc., for the
implementation of strategies, and plans

The organizational objectives are set by top management in the context of

1. Its basic purpose and mission

2. Environmental factors
3. Business forecasts and
4. Available and potential resources

These objectives are both long-range as well as short-range. They are

divided into divisional, departmental, sectional and individual objectives
or goals. This is followed by the development of strategies and courses of
action to be followed at various levels of management and in various
segments of the organization. Policies, procedures and rules provide the
framework of decision making, and the method and order for the making and
implementation of these decisions.
Every manager performs all these planning functions, or contributes to
their performance. In some organizations, particularly those which are
traditionally managed and the small ones, planning are often not done
deliberately and systematically but it is still done. The plans may be in
the minds of their managers rather than explicitly and precisely spelt out:
they may be fuzzy rather than clear but they are always there. Planning is
thus the most basic function of management. It is performed in all kinds of
organizations by all managers at all levels of hierarchy.
Planning produces a picture of desirable future circumstances - given
currently available resources, past experience etc.

ORGANIZING:
Organizing involves
1. Identification of activities required for the achievement of enterprise
objectives and implementation of plans
2. Grouping of activities into jobs
3. Assignment of these jobs and activities to departments and individuals
4. Delegation of responsibility and authority for performance
5. Provision for vertical and horizontal coordination of activities

Every manager has to decide what activities have to be undertaken in his

department or section for the achievement of the goals entrusted to him.

Having identified the activities, he has to group identical or similar

activities in order to make jobs, assign these jobs or groups of activities
to his subordinates, delegate authority to them so as to enable them to
make decisions and initiate action for undertaking these activities, and
provide for coordination between himself and his subordinates, and among
his subordinates. Organizing thus involves the following sub-functions:

 Identification of activities required for the achievement of

objectives and implementation of plans.
 Grouping the activities so as to create self-contained jobs.
 Assignment of jobs to employees.
 Delegation of authority so as to enable them to perform their jobs
and to command the resources needed for their performance.
 Establishment of a network of coordinating relationships

Organizing process results in a structure of the organization. It comprises

:

1. Organizational positions,
2. Accompanying tasks and responsibilities
3. Network of roles and
4. Authority-responsibility relationships

Organizing is thus the basic process of combining and integrating human,

physical and financial resources in productive interrelationships for the
achievement of enterprise objectives. It aims at combining employees and
interrelated tasks in an orderly manner so that organizational work is
performed in a coordinated manner, and all efforts and activities pull
together in the direction of organizational goals.

STAFFING:
Staffing is a continuous and vital function of management.

After:
 the objectives have been determined,
 Strategies, policies, programmes, procedures and rules formulated for
their achievement,
 activities for the implementation of strategies, policies,
programmes, [Link] and grouped into jobs,

The next logical step in the management process is to procure suitable

personnel for manning the jobs. Since the efficiency and effectiveness of
an organization significantly depends on the quality of its personnel and
since it is one of the primary functions of management to achieve qualified
and trained people to fill various positions, staffing has been recognized
as a distinct function of management. It comprises several sub-functions:

1. Manpower planning involving determination of the number and the kind of

personnel required.
2. Recruitment for attracting adequate number of potential employees to
seek jobs in the enterprise.
3. Selection of the most suitable persons for the jobs under consideration.
4. Placement, induction and orientation.
5. Transfers, promotions, termination and layoff.
6. Training and development of employees.

As the importance of human factor in organizational effectiveness is being

increasingly recognized, staffing is gaining acceptance as a distinct
function of management. It need hardly any emphasize that no organization
can ever be better than its people, and managers must perform the staffing
function with as much concern as any other function.

DIRECTING:
Directing is the function of guiding, informing and leading the employees
to perform efficiently, and contribute their optimum to the achievement of
organizational objectives.

Jobs assigned to subordinates have to be explained and clarified, they have

to be provided guidance in job performance and they are to be motivated to
contribute their optimum performance with zeal and enthusiasm. The function
of directing thus involves the following sub-functions:

1. Communication
2. Motivation
3. Leadership

Once objectives have been developed and the organizational structure has
been designed and staffed, the next step is to begin to move the
organization toward the objectives. The directing function serves this
purpose. It involves directing, influencing and motivating employees to
perform essential tasks.

The best human resources employed will be of no use if they are not
motivated and directed in the right direction to achieve the organizational
goals. Managers lead is an attempt to persuade others to join them in
pursuit of the future that emerges from the planning, and organizing steps.
By establishing the proper atmosphere, managers help their employees to do
their best. Effective leadership is a highly prized ability in
organizations and is a skill that some managers have difficulty in
developing. The ability requires both task-oriented capabilities and the
ability to communicate, understand and motivate people.
COORDINATION:
Coordinating is the function of establishing and integrating relationships
among various parts of the organization that they all together pull in the
direction of organizational objectives. It is thus the process of tying
together all the organizational decisions, operations, activities and
efforts so as to achieve unity of action for the accomplishment of
organizational objectives

Coordination, as a management function, involves the following sub-

functions:

1. Clear definition of authority-responsibility relationships

2. Unity of direction
3. Unity of command
4. Effective communication
5. Effective leadership

CONTROLLING:
Controlling is the function of ensuring that the divisional, departmental,
sectional and individual performances are consistent with the predetermined
objectives and goals. Deviations from objectives and plans have to be
identified and investigated, and correction action taken. Deviations from
plans and objectives provide feedback to managers, and all other management
processes including planning, organizing, staffing, directing and
coordinating are continuously reviewed and modified, where necessary.

Controlling implies that objectives, goals and standards of performance

exist and are known to employees and their superiors. It also implies a
flexible and dynamic organization which will permit changes in objectives,
plans, programmes, strategies, policies, organizational design, staffing
policies and practices, leadership style, communication system, etc., for
it is not uncommon that employees failure to achieve predetermined
standards is due to defects or shortcomings in any one or more of the above
dimensions of management.

Thus, controlling involves the following process:

1. Establishing standards of performance

2. Measurement of performance against predetermined goals.
3. Comparing this performance to the established standards.
4. Identification of deviations from these goals.
5. Corrective action to rectify deviations.

It may be pointed out that although management functions have been

discussed in a particular sequence-planning, organizing, staffing,
directing, coordinating and controlling – they are not performed in a
sequential order. Management is an integral process and it is difficult to
put its functions neatly in separate boxes. Management functions tend to
coalesce, and it sometimes becomes difficult to separate one from the
other. For example, when a production manager is discussing work problems
with one of his subordinates, it is difficult to say whether he is guiding,
developing or communicating, or doing all these things simultaneously.
Moreover, managers often perform more than one function simultaneously

Through the controlling function, managers keep the organization on track.

Without the controlling functions, other functions lose their relevance. If
all the activities are properly planned, organized and directed but there
is no control on the activities then there are full chances that the
organization does not achieve its planned goals. Controlling function helps
us with knowing the deviations but the reasons for such deviations and the
corrective actions is to be taken depends on the managers. Hence, the
personal ability of the managers makes the controlling function effective
or ineffective.

MANAGERIAL SKILLS
A skill is an individual's ability to translate knowledge into action
Hence, it is manifested in an individual's performance. Skill is not
necessarily inborn. It can be developed through practice and through
relating learning to one's own personal experience and background. In order
to be able to successfully discharge his roles, a manager should possess
three major skills.

1. CONCEPTUAL SKILL, Ideas

2. HUMAN RELATIONS SKILL People
3. TECHNICAL SKILL Things

While both conceptual and technical skills are needed for good decision-
making, human skill in necessary for good leadership

1. The conceptual skill

 The ability of a manager to take a broad and farsighted view of the

organization and its future
 Ability to think in abstract
 Ability to analyze the forces working in a situation
 Creative and innovative ability
 Ability to assess the environment and the changes taking place in it
 Ability to understudy the environment, the organization, and his own
job, such that he can set appropriate goals for his organization, for
himself and for his team

This skill seems to increase in importance as manager moves up to higher

positions of responsibility in the organization.

2. The technical skill

 The manager's understanding of the nature of job that people under him
have to perform.
 A person's knowledge and proficiency in any type of process or technique
 In a production department
 An understanding of the technicalities of the process of production
 In a production department this would mean an understanding of the
technicalities of the process of production
Whereas this type of skill and competence seems to be more important at the
lower levels of management, its relative importance as a part of the
managerial role diminishes as the manager moves to higher positions

In higher functional positions, such as the position of a marketing manager

or production manager, the conceptual component, related to these
functional areas becomes more important and the technical component becomes
less important.

3. Human relations skill

The ability to interact effectively with people at all levels. This skill
develops in the manager sufficient ability

(a) To recognize the feelings and sentiments of others

(b) To judge the possible actions to, and outcomes of various courses of
action he may undertake
(c) To examine his own concepts and values which enable him to develop more
useful attitudes about himself

This type of skill remains consistently important for managers at all levels.

At the top level, technical skill becomes least important. That is why,
people at the top shift with great ease from one industry to another
without an apparent fall in their efficiency. Their human and conceptual
skills seem to make up for their unfamiliarity with the new job's technical
aspects.

The difference between the functions of top, middle and lowest level
management is that of degree. For instance, top management concentrates
more on long-range planning and organization, middle level management
concentrates more on coordination and control and lowest level management
concentrates more on direction function to get the things done from the
workers.

Planning
TOP MANAGEMENT
Organization
Coordination
MIDDLE LEVEL MANAGEMENT
Control
LOWEST LEVEL MANAGEMENT Direction

Every manager is concerned with ideas, things and people. Management is a

creative process for integrating the use of resources to accomplish certain
goals. In this process, ideas, things and people are vital inputs which are
to be transformed into output consistent with the goals.

Management of ideas: 1. The need for practical philosophy of management

to regard management as a distinct and
Use of conceptual scientific process
skills.
2. The planning phase of management process

3. Distinction and innovation. Creativity refers

to generation of new ideas, and innovation
refers to transforming ideas into viable
relations and utilities.
A manager must be imaginative to plan ahead and to
create new Ideas.

Communicating and Obtaining information and evaluating progress

Dealing with people towards objectives set by him and then taking
corrective action.

Though it is his duty to handle all the productive

resources, but human factor is more important. A
manager cannot convert the raw materials into
finished products himself; he has to take the help
of others to do this.

The greatest problem before any manager is how to

manage the personnel to get the best possible
results. The manager in the present age has to deal
efficiently with the people who are to contribute
for the achievement of organizational goals.

1. Every job is designed as an integrated set of

operations.

2. Workers are given a sufficient measure of

freedom to organize and control their work
environment.

3. People are educated, trained and developed so

that they may use their potentialities and
abilities to perform the work allotted to them.

4. The needs of people are satisfied and a proper

working environment is provided

5. Creation of a climate which brings in and

maintains satisfaction and discipline among the
people. This will increase organizational
 effectiveness

Management of things 1. The design of production system, and

(non-human acquisition, allocation and conversion of
resources): physical resources to achieve certain goals.

Use of technical 2. Procurement, development, maintenance and

skills integration of human resources in the
organization.

Every manager has to direct his subordinates to put

the organizational plans into practice.

TYPICAL (BUSINESS) MANAGEMENT STRUCTURE:

There are three levels of management - top, middle and lower. Managers at different
levels of the organization require and use different types of skills. Lower level
managers require and use a greater degree of technical skill than high level
managers, while higher level managers require and use a greater degree of
conceptual skill. Human skills are important at all managerial levels.

LEVELS OF MANAGEMENT

Levels of management refer to a line of demarcation between various

managerial positions in an enterprise. The levels of management depend upon
its:

1. Size
2. Technical facilities
3. Range of production

We generally come across two broad levels of management:

1. Administrative management (i.e., the upper level of management)

 2. Operating management (i.e., the lower level of management)

Administrative management is concerned with "thinking" functions such as

laying down policy, planning and setting up of standards.

Operative management is concerned with the "doing" function such as

implementation of policies, and directing the operations to attain the
objectives of the enterprise.

In actual practice, it is difficult to draw any clear cut demarcation between

thinking function and doing function because the basic/fundamental managerial
functions are performed by all managers irrespective of their levels or, ranks. For
instance, wage and salary director of a company may assist in fixing wages and
salary structure as a member of the Board of Directors, but as head of wages and
salary department, his job is to see that the decisions are implemented.

The real significance of levels is that they explain authority relationships in an

organization.

Considering the hierarchy of authority and responsibility, one can identify

three levels of management:

1. Top management
2. Middle management
3. Lower level

1. Lower or operative management:

It is placed at the bottom of the hierarchy of management, and actual

operations are the responsibility of this level of management. It consists
of foreman, supervisors, sales officers, accounts officers and so on.

1. They are in direct touch with the rank and file or workers.
2. Their authority and responsibility is limited.
3. They pass on the instructions of the middle management to workers.
4. They interpret and divide the plans of the management into short-range
operating plans.
5. They are also involved in the process of decisions-making.
6. They have to get the work done through the workers.
7. They allot various jobs to the workers, evaluate their performance and
report to the middle level management.
8. They are more concerned with direction and control functions of
management.
9. They devote more time in the supervision of the workers.

LOWER LEVEL MANAGEMENT

Role  To execute or provide business processes , services or

goods and the customer interface

Activity  Fixed ordered set of repetitive and cyclical actions or

activities that are done in organizations to sustain the
business.
 Operational Teams are consistent
 Operational teams frequently consist of team members with
similar technical skill sets

Nature of Operational data:

Data/informatio
n  Data is captured or created
(information  Derived almost entirely from internal processes
requirement)
 Highly detailed
 Relates to the immediate term
 Task-specific
 Prepared constantly or very frequently
 Largely quantitative
 Data captures daily business transactions
 Focus is on representing individual transactions rather than
on the effects of the transactions over time
 Represents transactions as they happen in real time
 Characterized by update transactions
 transaction volume is very high when compared with the low-
to-medium levels found in decision support data
 Query activity (frequency and complexity) in the operational
database tends to be low to allow additional processing
cycles for the more crucial update transactions. Therefore,
queries against operational data typically are narrow in
scope, low in complexity, and speed-critical.

Basic data operations

Data Data is originated in some form and verified

Capturing for accuracy prior to further Processing.
They may initially be recorded on paper
source documents and then converted into a
machine usable form for processing, or they
may be captured directly in a paperless
machine-readable form.

Data The checking or validating of data to ensure

Verification that it was captured and recorded correctly.
Examples are ; a person reviewing another's
work, the use of check digits in coding
structures etc.

Storage Placing data onto some storage media such as

 magnetic tape, disk etc. where it can be
retrieved when needed.

Retrieval Searching out and gaining access to specific

data elements from the medium where it is
stored.

Communicatio Transferring data from one location or

n operation to another for use or for further
processing is data communication- a process
that continues until information, in a usable
form, reaches the final user.

Reproduction Duplication of data from one medium to

another or into another position in the same
medium e.g. a file of data stored on a
magnetic disk may be reproduced onto another
magnetic disk or onto a magnetic tape for
further processing or for security reasons.

update

Decision-making  Highly structured and recurring:

Decisions are made using predetermined fixed rules,
procedures or standards that have predictable outcomes

 Accountants
 Cashiers
Examples
 Salespersons
 Receptionists
 Secretaries
 Clerks,
 Tellers
 Bookkeeper

 Production
 Accounting
 Manufacturing a product
 Staffing management
 Payroll
 Product production
 Service delivery
 Paying the bills
 Maintenance
 Help desk and support
 Inventory management

2. Middle management:

The job of middle management is to implement the policies and plans framed
by the top management. It serves as an essential link between the top
management and the lower level or operative management. They are
responsible to the top management for the functioning of their departments.
They devote more time on the organization and motivation functions of
management. They provide the guidance and the structure for a purposeful
enterprise. Without them the top management's plans and ambitious
expectations will not be fruitfully realized. The following are the main
functions of middle management:

1. To interpret the policies chalked out by top management.

2. To prepare the organizational set up in their own departments for
fulfilling the objectives implied in various business policies.
3. To recruit and select suitable operative and supervisory staff.
4. To assign activities, duties and responsibilities for timely
implementation of the plans.
5. To compile all the instructions and issue them to supervisor under
their control.
6. To motivate personnel to attain higher productivity and to reward them
properly.
7. To cooperate with the other departments for ensuring a smooth
functioning of the entire organization.
8. To collect reports and information on performance in their departments.
9. To report to top management
10. To make suitable recommendations to the top management for the better
execution of plans and policies.

MIDDLE LEVEL MANAGEMENT

Role 1. Project implementation through

2. Project Monitoring and control
a. Management control
b. Operational control

1. Project implementation: Business process

management /operations management

The goal of process management is to improve processes

continually. Improving operational processes increases
effectiveness, cut costs and gain competitive advantage

A. Management control: upper middle management level

The process by which managers assure that resources are

obtained and used effectively and efficiently in the
accomplishment of the organization’s objectives. This
 involves 3 key aspects:
1. The activity involves interpersonal interaction.
2. It takes place within the context of the policies
and objectives developed in the strategic planning
process.
3. The paramount goal of management control is the
assurance of effective and efficient performance

B. Operational control: lower middle level management

The process of assuring that specific tasks are carried

out effectively and efficiently

The basic distinction between management control and

operational control is that operational control is
concerned with tasks (such as manufacturing a specific
part) whereas management control is most often concerned
with people. There is much less judgment to be exercised
in the operational control area because the task, goals,
and resources have been carefully delineated through the
management control activity

Activity UPPER MIDDLE MANAGEMENT:

 Monitoring results to evaluate outcomes of the

business decisions
 Ensure transition of projects into production
 Continuously improving quality of service
 Capacity Management
 Budget Management
 Protecting the deliverables: - Time, Cost and Quality
 Fostering coordination between strategy design and
implementation
 Implements evolutionary change

LOWER MIDDLE MANAGEMENT:

 Protecting the service

 Ensuring that day to day business is taken care of
 Regular inspection of equipment against known
security holes and failures
  Regular checking of employees to ensure that.
Employees are qualified to carry out their duties
 Availability Management
 Service Delivery
 Initiating work
 Monitoring and tracking progress
 Comparing schedules and budgets to plans
 Analysing impact of changes and progress
 Coordinating activities and people
 Making adjustments to the plan as required
 Completing the project
 Assessing project results

Team Project teams consist of team members from different

departments, different skill sets.

Nature of  Operational data is aggregated into decision support

Data/informatio data
n  It is relevant to short and medium term decision-
(information making
requirement)  It describes or analyses activities or departments
 It is generally reporting and control oriented. They
are designed to report on existing operations and
therefore to help to provide day-to-day control of
operations
 It is prepared routinely and regularly
 It is based on quantitative measures (cash flow
forecasts, budgetary control or variance analysis
reports, short-term purchasing requirement)
 It Supports decision at the operational and
management control levels.
 It relies on existing corporate data and data flows
 It is generally used in decision making using past
and present data
 It has an internal rather than an external
orientation.

 It triggers actions within the organization’s lower

levels that produce additional data to be used for
monitoring company performance. Making business
decisions, which in turn generate more data that is
collected, stored, etc. (restarting the process).

 Information does not always travel directly from the

physical system to the manager. Many managers are
located some distance from the physical activity.
These managers must obtain information from a system
or procedure that produces the information from
 gathered data.

 It covers a longer time frame. Managers are focused

on the effects of the transactions over time. They
are seldom interested in a specific sales invoice to
customer X; rather, they tend to focus on sales
generated during the last month, the last year, or
the last five years.

 It is historical, representing a time slice (or a

snapshot) of the operational data at a given point in
time.

 It is presented at different levels of aggregation,

from highly summarized to near-atomic. For example,
if managers must analyse sales by region, they must
be able to access data showing the sales by region,
by city within the region, by store within the city
within the region, and so on. . In that case,
summarized data to compare the regions is required,
and also data in a structure that enables a manager
to drill down, or decompose, the data into more
atomic components (that is, finer-grained data at
lower levels of aggregation).

 It tends to include many data dimensions and how the

data relate over those dimensions. For example, an
analyst might want to know how product X fared
relative to product Z during the past six months by
region, state, city, store, and customer

 It is mainly characterized by query (read-only)

transactions. They exist for the sole purpose of
serving query requirements. Queries against decision
support data typically are broad in scope, high in
complexity, and less speed-critical.

 It requires periodic updates to load new data that

are summarized from the operational data.

 It does not include the details of each operational

transaction. Instead, it represents transaction
summaries; therefore, the decision support database
stores data that are integrated, aggregated, and
summarized for decision support purposes.

 The degree to which decision support data are

summarized is very high when contrasted with
operational data. Therefore, there is a great deal of
derived data in decision support databases. For
example, rather than storing all 10,000 sales
transactions for a given store on a given day, the
 decision support database might simply store the
total number of units sold and the total sales
dollars generated during that day. Decision support
data might be collected to monitor such aggregates as
total sales for each store or for each product. The
purpose of the summaries is simple: they are to be
used to establish and evaluate trends, comparisons,
and so on, that serve decision needs. (How well are
items selling? Should this product be discontinued?
Has the advertising been effective as measured by
increased sales?)

 Decision support data are characterized by very large

amounts of data. The large data volume is the result
of two factors. First, data are stored in non-
normalized structures that are likely to display many
data redundancies and duplications. Second, the same
data can be categorized in many different ways to
represent different snapshots. For example, sales
data might be stored in relation to product, store,
customer, region, and manager

Data processing at the Data processing at the

lower middle management upper middle management
level level
Routine Non routine and Novel
Procedurized Difficult to procedurize
Accounting Oriented Extends Beyond accounting
Internal Data External as well as
internal
Mechanistic Require Human judgement
Basic Computations Complex computations
Historical or current Predictive
data
Precision Recording Estimates
e.g e.g.
 Payroll  Manpower forecasting
 Man-Job matching  Human Resource
 Labour Cost Accounting
Accounting

Data operations

Classificati Placing data element into specific

on categories which provide meaning for
the user e.g. Sales data can be
classified as inventory type, size,
customer, sales-woman, warehouse
shipped from.
 Sorting Placing data element in a specified
or predetermined sequence, e.g. An
inventory file can be arranged by
product code, activity level, Naira
value or by ant other attribute coded
in the file and deemed desirable by a
user.

Summary and Combining data element, e.g reducing

aggregation data in the logical sense, as in the
example where personnel manager wants
a list of names of employees assigned
to a department in a form.

Computation Entails the arithmetic and/or logical

manipulation of data e.g. computation
to derive employees pay, customer's
bill, students grade point averages.
Sophisticated calculations include
linear programming, fore-casting etc.

Analysis Studying conditions in detail in

order to make inferences out of it.
E.g. analysis of variance.

Decision-making  Decision-making is both semi-structured (partly

structured and partly unstructured). Human judgement
is still required.
 While structured decisions are those that can be
easily made from available information, Semi-
structured decisions for which information obtained
from the information system is at most only a
portion of the total needed to make the decision.
 Its effectiveness of decision depends on the quality
of data gathered at the operational level.

Examples  Forepersons
 Supervisors
 Group leaders

 Budgetary control
 Variance analysis
  Cash flow forecasts

3. Top management:

Top management is the ultimate source of authority and it lays down goals,
policies and plans for the enterprise. It devotes more time on planning and
coordinating functions. It is accountable to the owners of the business for
the overall management. It is also described as the policy making group
responsible for the overall direction and success of all company
activities. The important functions of top management include:

1. To establish the objectives or goals of the enterprise.

2. To make policies and frame plans to attain the objectives laid.
3. To set up an organizational frame work to conduct the operations as
per plans.
4. To assemble the resources of money, men, materials, machines and
methods to put the plans into action.
5. To exercise effective control of the operations.
6. To provide overall leadership to the enterprise

TOP LEVEL MANAGEMENT

Role STRATEGIC ASSESSMENT, PLANNING AND STRATEGY DEVELOPMENT

1. Assessment
2. Problem Identification
3. Solutions development
4. Resource mobilization
5. Policy development and management
6. Strategy development
7. Planning guidance

TYPICAL OUTPUTS

 Projects
 Plans
 Target communities or markets
 Problem statements
 High level policies, objectives and strategies.
 Planning guidance for Projects, missions and resource
mobilization.
 Critical information requirements
  Initial operational time line

MAJOR PROBLEMS:

1. Since strategic planning generally focuses on the

choice of objectives for the organization and on the
activities and means required to achieve these
objectives, a major problem in this area is predicting
the future of the organization and its environment.

2. The complexity of the problem that arise and the non-

routine manner in which they are handled make it quite
difficult to appraise the quality of this planning
process.

Activity 1. Projects management: implementing revolutionary change

• Driving Change and Progress in the Service

• developing Mechanism for taking advantage of
opportunities
• Reduce Costs
• Increasing Productivity
• developing flexibility to change to meet changing
business requirements
• meeting business needs
• attaining strategic objectives

2. Planning and policy development activities

 Definition of project goals and objectives

 Definition of work requirements
 Definition of quantity of work
 Definition of quality of work
 Definition of required resources
 Definition of organization structure
 Planning of task sequencing and schedule
 Planning of the budge
 planning product range ,
 planning expansion into new markets
 Establishing at least 5-year plan and annual plans
for the corporation.

Team  Project teams consist of team members from different

departments, different skill sets

 The term executive is often used to describe a manager

 on the strategic planning level

 The strategic process typically involves a small

number of high – level people who operate in a non-
repetitive and often very creative way.

Nature of Decision –making data:

Data/informatio
n 1. Used by senior managers to plan the objectives of
(information their organization
requirement) 2. Derived from both internal and external sources
3. Highly summarized information :
 overall performance of the firm
 corporation activities to-date
 Forecasts
 competitor activities,
 overall economic climate

4. Relevant to the long term

5. Deals with the whole organisation
6. It is both quantitative and qualitative (eg overall
profitability, future market prospects, total cash
needs capital equipment needs).

7. To develop a truer understanding of the operational

environment, managers need to pour through the volume
of available information in the assessment reports and
circulate throughout their areas of operations as
often as possible, talking-to the subordinate officers
conducting operations, while observing for themselves.
What is observed here is that there is less time is
available between the moment when a problem is
presented to management, and the moment when a
solution is needed. Managers understand that the
business climate is dynamic, and thus, mandates their
prompt reaction to change in order to remain
competitive. The complexity of organisations, as well
as the sheer volume and size of the problems,
requires:

 Information systems that are dedicated to and can

facilitate sound and quick decision making in a
complex environment.
 sophisticated data analysis and modelling tools
 more comprehensive and integrated decision support
framework

( A typical solution to this is business intelligence

systems)

Decision-making Decisions are highly unstructured , unique or continously

changing and not easily specified in advance
Examples  Board of directors
 Chief executive officers (CEOs)
 Directors
 Managing directors

 Business process re-engineering

 Business process engineering

PLANNING IN TOP LEVEL MANAGEMENT: STRATEGIC PLANNING

1. ASSESSMENT

Assessing and developing an understanding of the nature of the operational

environment. Understanding allows managers to anticipate:

 Threats: competition, economic downturns, harsh government

regulations, conflicts, politics…
 Potential opportunities: Market demands, Customer expectations
 Organizational weaknesses: information gaps, capability and resource
capacity shortfalls

This understanding creates the ability to establish the situation’s context

and provides the information to develop or frame operational problems.

2. PROBLEM IDENTIFICATION

a. Review and appraisal of the current organizational state in terms of

performance, needs, resource situation, readiness, and sustainability
b. Identifying and framing the problem
a. Review objectives of the organization
b. Assessing current organizational and resource capacity to determine
position of organization in addressing the challenges
c. Assess whether the objectives are being met in practice.
d. Decisions on changes or modifications in these objectives if
required
e. Compare the current situation to the desired end state
f. Precisely and clearly define the problem‘s scope and limitations
g. Analyse what actions or coordination must take place to eliminate
or overcome the cause of obstacles between the current situation
the desired end state.
h. Develop a problem statement
 Typical problems:
1. The need to approach increasingly complex problems that involve
a rapidly growing number of internal and external variables
2. The need for quick decision making in a complex environment
3. The need for new ways of integrating and managing data across
levels, sectors, and geographic locations
4. Need for qualified labour force and human capital

3. PLANNING

A. Articulating a desired end state, objectives or goal

B. Developing a broad operational approach and strategies to achieve stated
objectives or end state
C. Intelligence preparation: Information gathering:
After completing the problem statement, officers continue to gather
information relevant to the problem. They collect and collate
additional corroborating facts. Primary sources of information are
official documents, technical reports, manuals, previous assessment
report, the internet and resources available from libraries

The intelligence piece of the plan provides all leaders with the
necessary information to identify and locate target communities. This
information should provide leaders with more than just numbers. It
should assist them in targeting critical segments of target
communities. Information analysed at each level may vary but an
understanding of what information is available and how to use it to
gain insight into the target community is critical. Reports,
community information, demographics, and historical data are some of
the tools available.

D. Research and analysis

Identified issues are researched into, alternatives are developed and
evaluated, and recommendations are made on effective action to be
taken based on relevant facts collected above. Various mathematical
techniques can be used to identify and analyse trends in data and
determine how much a given trend depends on other variables within
the information.

E. Interpretation
 As data collection progresses, the officers begin to pare their lists of
possible solutions. They reject all unsuitable alternatives and consider
all reasonable alternatives (courses of action) as possible solutions.

 Feasible solutions are those that can be implemented with available

resources.
 Acceptable solutions are those worth the cost or risk involved in
their implementation.
 Suitable solutions are those that actually solve the problem.

Looking at feasibility, acceptability, and suitability will

1. Help direct further research by eliminating unsatisfactory

solutions, identifying solutions, and checking them for non-
concurrences.

2. Call attention to the facts and evaluation criteria needed for

evaluating alternative solutions. The officers relate the evaluation
criteria to the known facts and valid assumptions. These criteria
serve as the yardstick against which he measures all alternatives.

Next, the managers compare and contrast the alternatives. The best solution
will be the most feasible, suitable, and acceptable solution fulfilling
evaluation criteria.

F. Plan refinement and revision

New information gathered may require revision of the plan, or unforeseen

opportunities may arise.

 During preparation, assumptions made during planning may be proven

true or false.
 Intelligence analysis may confirm or deny new requirements or show
changed conditions in the area of operations.

In any of these cases, managers identify the changed conditions and

assess how the changes might affect the upcoming operations. Significant
new information requires officers to make one of three assessments
regarding the plan:

 The new information validates the plan with no further changes.

 The new information requires adjustments to the plan.
 The new information invalidates the plan requiring the commander to
reframe and develop a new plan.
 Managers adjust the plan based on new information and changing
circumstances. These new developments may correct or invalidate
assumptions made during planning. With such changes, it is determined
whether the new information requires adjustment to the plan or whether
to begin a reframing effort and develop a completely new plan.

G. Translating the broad concept into a complete and practical plan which
includes:

1. RESOURCE MOBILIZATION:
How to mobilizer Resources used to attain these objectives

2. POLICY DEVELOPMENT
 Development and establishment of High-level executive articulation
of broad goals (Policies) that must be achieved to guide the next
level or future decisions and results and govern the acquisition,
use, and disposition of mobilized resources

3. STRATEGY DEVELOPMENT:
 Developing an integrated approach (Strategy) to achieving such
policies taking into account underlying assumptions, context,
trade-offs, risks, necessary resources and concerns surrounding
implementation.

4. PLANNING GUIDANCE:
 Fundamental principles and instructions by which the organization
guides its actions in fulfilling strategy

H. Report production
A variety of written communications is prepared and communicated. The
detailed assessment reports will contain:
1. Problem statements
2. Analysis & interpretations
3. Recommendations and Courses of Action [COA].
4. Estimates in support of the COAs
5. Directives

These reports are forwarded to the echelons below. Upon receipt of

assessment reports from top managers, the middle or lower level managers
immediately begin their own assessment and use these reports to consolidate
their understanding and visualization, select feasible courses of action
for further analysis and make decisions

DECISION-MAKING IN THE TOP LEVEL MANAGEMENT

Numerous external factors and resources determine the manager understands.

These include the top level manager’s:

 Education
 Intellect
 Experience
 Perception
 Professional study
 Judgment gained from practice
 Reflection
 Intuition
 Knowledge from best practices

The top level manager assists the middle level manager through
visualization, description and direction:

 Visualizing the end state and the design of potential solutions

 Describe it in terms of time, space, resources, intents actions, and
guidance
 Directing the actions of subordinate managers within their intents

During planning, the top level manager’s visualization provides the basis
for developing plans and policies. During execution, it helps managers
determine if, when, and what to decide as they adapt to changing condition.
As top managers visualize, they describe it to their subordinates to
facilitate shared understanding of the situation. Top level officers ensure
subordinates understand the visualization well enough to begin planning and
strategy development activities.

As managers begin to understand the situation, the problem and envisioning

potential solutions, discussions and debates between managers often ensue.
Therefore, Decision-making under this circumstances call for a forum that:

1. Permit stakeholders and managers collaborate and dialog actively, share

and question information, perceptions, and ideas without fear of
retribution
2. Create a learning environment by allowing participants to think
critically and creatively and share their ideas, opinions, and
recommendations backed up by quantitative and qualitative empirical
evidences.

3. Encourage frank discussions in areas of disagreement but yet mutually

respectful, competition of ideas.

4. Enable Participants to freely make viewpoints based on their expertise,

experience, and insight; this includes sharing ideas that contradict the
opinions held by those of higher knowledge base and listening to novel
ideas and counter arguments concerning any situation, including the
current problems.

5. Allow disciplined questioning and participants to probe their thinking

as they collaborate and dialog.

6. Help to explore ideas, uncover assumptions, better understand

situations, build a shared understanding of situations, and make
decisions building consensus.

There is a significant variation in how organizations operate, no matter

where they are positioned on the continuum of experience or age. They vary
in terms of the governance structure, organizational culture, decision-
making processes, division of roles and responsibilities, and
representation on and nomination process for positions. While the policies
defined and Strategies developed put some component of the organization at
an advantaged position, it may not be considered fair or favourable to
other components. This may lead the emergence of conflicts from the
interaction of the roles played by the managers. Managers will do more than
struggle over day-to-day policy making. They will also engage in a higher
order struggle over the allocation of power, responsibility, decision-
making, policy making and their practical rights to exercise them. An
obvious consequence of this is:

1. Conflict in decision-making
2. Policy resistance

In an instance, policies this high level struggle have been reasonably well
contained. No single actor has dominated, decisions have been made for the
organization, and the same decision-making process has prevailed.
Nonetheless, in another instance, the reality of the governing structure
has changed substantially from the initial status quo. The requirement for
shared governance, interests, decision-making process and its associated
struggle for Who has power, and how that power gets exercised, has
transformed it in both its expressions and forms from collaboration and
transformation into domination and resistance. The framework that is
expected to constrain and channel the conflicts in decision-making ends up
in promoting rivalry. Though these rivalries may be conducive to the good
of the organization in creating a balance of power (ambition could be made
to check ambition), its adverse effects sometimes may be intolerable.

While it is the statutory role of the active middle managers to coordinate

and control the affairs and operations of the unit, it is expected that the
top managers provide overseeing functions. This put both parties in a
legitimate position to make decisions. The active middle level managers
feel they are closer to the organization and the operational environment
and therefore are in the best position to decide what should be offered. At
the same time, the support component is concerned with maintaining quality
standards, continuity and program consistency in order to strengthen the
organizational image, experience and to mitigate risks. This may cause the
middle level managers to feel that the top management is interfering with
or dominating their operations with unrealistic policies. The middle level
managers can resist new polices that tends to change or modify existing
opinions, beliefs, ideas, practices, age long best practices or other
structures that are considered innovative in both the present and future
development of their departments. This leads to a sense of inequity, the
creation of a ‘them and us’ dynamic and the emergent practice of
‘politics’. Results, in these situations, are achieved only with the
willing cooperation of managers and various power tools.

Tactic Description
Rational The actor uses logical arguments and factual evidence to
Persuasion persuade or show that a proposal or request is feasible,
that it is relevant for attaining important task
objectives.

Apprising: The actor explains how carrying out a request or

supporting a proposal will benefit the organization or
will help to advance a given course

Inspirational The actor appeals to the organization’s values and ideals

Appeals or seeks to arouse emotions to build enthusiasm or gain
commitment for a request or proposal.

Consultation The actor asks the target to help plan or express

concerns and suggest improvements for a proposed project,
activity, or change for which the target’s support is
desired.
Collaboration The actor offers to provide relevant resources and
assistance if the target will carry out a request or
approve a proposed change

Ingratiation: The actor uses the praise of a target’s skill or

knowledge and flattery before or during an attempt to
influence the target person to carry out a request or
support a proposal.

Personal The actor asks the target to carry out a request or

Appeals: support a proposal out of friendship or loyalty, or asks
for a personal favour before saying what it is.

Exchange: The actor offers an incentive, suggests an exchange of

favours, or indicates willingness to reciprocate at a
later time if the target will do what the agent requests.

Coalition The actor seeks the aid of others to persuade or

Tactics influence the target to do something, or uses the support
of others as a reason for the target to agree with a
request or a proposal.

Legitimating The agent seeks to establish the legitimacy of a request

Tactics: or to verify that he/she has the authority to make it by
referring to rules and formal policies, presenting
supporting documents or stating that the request is
consistent with organization rules and policies (even
when certain loopholes in the rules are being exploited).

Pressure: The agent uses demands, threats, frequent checking, or

persistent reminders to influence the target to do what
he/she wants.

Taking a critical decision under this circumstance has the negative

consequence of taking an inordinate amount of time, energy, resources and
subjecting the end decision to the consensus building ability and intent of
the actor rather than to the goals and objective of the organization

The actors in these political power plays rely on some form of strength
that gives them some sort of leverage or positions of advantage over the
other party. These strengths come in various forms such as:

 A claim on legitimacy
 Reward/punishment
 Information
 Connections
  Expertise
 Knowledge
 Charisma or
 Some other kinds of resources

Any leading actor possesses one or more of these strengths. The more
effective actor possesses all, not just a few of them. A typical scenario
is that the “warring parties” hires or nominates an actor with a strong
skill or ability to work through the time-consuming process of consensus
building, in ‘getting things done’ and with the expectation that they will
set strategic directions and generate more impact.

As observed power can be exercised in 3 essential forms or dimensions,

depending on the prevailing circumstance and the side each party finds
itself:

1. Visible dimension
2. Hidden dimension
3. Invisible dimension

The visible dimension is characterized by an Observable Decision-making

process. It includes the visible and definable aspects of power - the
formal rules, structures, authorities, and procedures of decision-making.
Examples include appointments, committees, laws, regulations, budgets,
organizational policies and procedures specified.

The hidden dimension of power exercised is characterized by Exclusion &

delegitimization. Despite the existence of fair laws and observable
decision-making structures, decision-making never occurs on an even playing
field. Behind-the scenes, political, economic, social and cultural forces
operate to shape who gets to sit at the decision-making table and whose
issues get addressed. This dimension of power is less obvious and, hence,
more difficult to engage. Certain power centres maintain their influence by
controlling who gets to the decision-making table and what gets on the
agenda. These dynamics exclude and devalue the concerns and representation
of other less powerful groups. Excluded groups often point out that they
and their issues are both invisible to the leadership at large and absent
from the organizational agenda. Difficulties in gaining audience can
further inhibit their visibility and legitimacy. The excluded group and
their grievances are made invisible by intimidation, misinformation and co-
optation. Leaders are often vilified, discredited and labelled trouble-
makers, intrusive or unrepresentative; their issues are relegated to the
realm of the private and therefore not subject to appropriate action. This
makes it impossible for the excluded group without resources or affiliation
to get their voices heard, even if they represent a substantial population
in the organization. By preventing important voices and issues from getting
a fair public hearing, policymaking can be skewed to benefit a few at the
expense of the majority. The ‘Rebel squads‛ in form of staff unions for
example; challenge this dimension of power by creating broad-based
constituencies for policy and organizational reform that reduce systemic
discrimination. In building strong and accountable organizations they tap
their power with others to get to the table. They produce and disseminate
analysis and alternative perspectives about their issues and politics. They
also attempt to develop ties with powerful allies to increase their voice
and presence.

The invisible dimension is characterized by Shaping Meaning through

Socialization & control of information. Probably the most insidious of the
three dimensions of power, this dimension operates in ways that render
competing interests and problems invisible. Significant problems and issues
are not only kept from the decision-making table, but also from the minds
and consciousness of the different players involved, even those directly
affected by the problem. Socialized consent prevents people from
questioning or envisioning any possibilities for changing these
relationships, or addressing issues. Processes of socialization, culture
and ideology perpetuate exclusion and inequality by defining what is
normal, acceptable and safe. This third dimension of power works to make
problems invisible by controlling access to information. If people are
unaware of a problem, they are unable to make informed choices or
participate in decisions that can contribute to its solution. For
marginalized group, being denied information can reinforce feelings of
powerlessness, ignorance and self-blame, but it also can spur people to
action. . Whatever the context, this dimension of power can be the most
difficult and contentious to deal with. (‘Aluta continua’- and the struggle
continue; SOLUTION: leadership)

INFORMATION SYSTEM AS A BUSINESS SUBSYSTEM

Information systems support the activities of the business system.
Consequently, information systems can be viewed as subsystems of the
business system.

Recall that Data provides a basis from which information is derived. The
information output is used by managers, non-managers, persons and
organisations within the firm's environment for providing good decision;
good decision will lead to effective managerial performance, which leads to
successful attainment of organisational goals.

Quantitatively, information is assembled by compiling; manipulating and

messaging data for decision-making (e.g. average sales). Qualitatively,
information can be analysed for decision-making (e.g. trend analysis).
Thus, information can be valued like manpower, money, and materials which
have been often described as the three major management resources.
Information can be considered as fourth resource because it has the
attributes of a resource:

1. It has value like money, raw materials or manpower.

2. It has characteristics which make it measurable in terms of use, life
and effect on other resources.
3. It can be valued in terms of collection, storage, and retrieval.
4. It can be budgeted and controlled.
5. It can be related in terms of cost and use value to management
objectives

An information system is an organized sets of interrelated non-technical

elements such as people, processes, procedures, policies, regulations,
etc., as well as technical components such as data resources and other
equipment that collects as input, store, process, maintain, use, share,
disseminate, dispose, display or transmit information as well as control
activities that transform data resources

Information systems include one or more technical systems but, crucially,

also include people who understand the purpose of the system within the
system itself (Machines and people process data into information). It has
defined operational processes and people (the operators) are inherent parts
of the system. They are governed by organizational policies and rules and
may be affected by external constraints such as national laws and
regulatory policies. Essentially, an information system facilitates the
transformation of data into information, and it allows for the management
of both data and information.

Components of an information system

Goal The purpose the data transformation must satisfy.

Policy , Policies:
procedures, A set of rules that govern the activities involved in
methods and achieving a goal or objectives. They are the laws, plans,
standards functional specifications and practices that are
associated with an information system and regulate how a
system manages, protect, and distributes information. It
 is a directive that covers the WHY of the information
system. Without policies, an information system would be
invalid –information management would be implemented on
an ad hoc basis leading to costly inconsistencies and
flaws. An information security policy for instance
describes how people may access information, what the
organization considers as security risks, what preventive
measures should be established, who is responsible for
monitoring and enforcing these measures and what actions
will be taken if there are violations. It provides clear
assignment of responsibility for protection against
unacceptable and unauthorized use, promotes security
measures, ensures that authorized users and all other
entities comply with adopted policies and local and
national laws

Standard:
A standard is the minimum acceptable level or degree of
satisfaction of a policy. It describes a status to be
achieved in what needs to be done.

Methods:
Methods generally refer to a way of doing something,
especially a systematic way; it implies an orderly
logical arrangement (usually in steps).

Procedure
A procedure is a method that describes how specific low
level (or end-user) tasks should be performed. Procedures
are dependent on implementation. They describe how to
achieve the status mentioned in the standard and
policies. As they deal with the actual method of working,
they are often subject to frequent changes.

People People are the human components of the information system

who use and work with the information system. They are
the most vital and the most overlooked aspect of the
system. The people include:

1. End-users
2. Information specialists(Developers)

End Users are people who use an information system

or the information it products. (Accountants, Vendors,
Engineers, Customers, managers). IS Specialists are
people who develop and operate information systems.
(System analysts, programmers, and system operators).
Information systems are for end-users.

Input Inputs are the unprocessed elements (material, human

resources, and information) that enter the system for
processing - Data: collection of raw unprocessed facts.
Processes/ Procedures that transform data into information- end-
Processors users, computer hardware, computer software, data
storage, communication network, methods and procedures.

Output Output is the outcome of processing or processed

elements/facts- Information: Processed data.

internal Internal control component consists of control and

Control feedback. Feedback measures output against a standard
while Internal control component is an information system
subsystem that reacts to information generated by the
feedback. The internal control subsystem either directly
implements change to the information system or notifies
the end-user that the system is not functioning properly.
Control ensures that input data is valid before it is
processed and that the system works properly.

END-USER Data Information END-USER

THE
INFORMATION
Information for user SYSTEM
control
Feedback
Changes for direct control

INTERNAL
CONTROL
COMPONENTS

Implementations of an information system

1. Manual implementation
2. Mechanical implementation
3. Electronic implementation

1. Manual implementation
The purpose of the information system is to collect, process, and exchange
information among business workers. Without the use of computers, the information
system is:

An arrangement of interdependent components that interact

to support the operational, managerial and decision making
information needs of a business

It involves operations performed by a clerk assisted by specific aids such

as a pocket calculator or adding machine etc. This method of processing is
only suitable in cases where there is no emphasis on the specific period of
time the work must be completed. The processing is simple and in most
cases, the employment of more hands will solve the problem of time
constraint. Example is the updating of handwritten ledger records.

2. Mechanical implementation:

Involves operations that are performed by machine consisting of a keyboard

but which are actuated by depressing appropriate keys by an operator.
Example is the posting of lodgments and withdrawals on the personal
customer's ledger using an accounting machine, the use of typewriters etc

3. Electronic implementation:

Is more or less like the mechanical method except that in this case the
machine being used is electronic and may have optional peripheral devices
that are attached to it. With the use of electronic devices, an information
system is:

An arrangement of interdependent human and machine

components that interact to support the operational,
managerial and decision making information needs of an
organization.

It can be used for many accounting procedures including payroll, stock

schedules and ledger updating.

Information system challenges:

The proper management of information systems is a major challenge

for managers and they are of three dimensions:
 1. Time
2. Content
3. Form

A. Time Dimension
1. Timeliness: Information should be provided when it's needed.
Information must reach the recipients within the prescribed timeframes.
For effective decision-making, information must reach the decision-
maker at the right time, i.e. Recipients must get information when
they need it. A delay destroys the value of information. The
characteristic of timeliness, to be effective, should also include up-
to-date, i.e. current information.
2. Currency: Information should be up to date when it's provided.
3. Frequency: Information should be provided as often as needed.
4. Time Period: Information can be provided about past, present, and
future time periods.

B. Content Dimension
1. Accuracy: Information should be free from errors. Information should
be free from mistakes. Wrong information given to management would
result in wrong decisions.
2. Relevance: Information should be related to the information needs of
a specific recipient for a specific situation. Information is said
to be relevant if it answers especially for the recipient
what, why, where, when, who and why? In other words managers should
get information which are useful and the information helps them
to make decisions.
3. Completeness: All the information that is needed should be provided.
The information which is given to a manager must be complete
and should meet all his needs. Incomplete information may result
in wrong decisions and thus may prove costly to the organization.
4. Conciseness: Only the information that is needed should be provided.
5. Scope: Information can have a broad or narrow scope, or an
internal or external focus.
6. Performance: Information can reveal performance by measuring
activities accomplished, progress made, or resources accumulated.
7. Adequacy: Means information must be sufficient in quantity, i.e.
provision of reports containing information which is required in the
deciding processes of decision-making. Inadequacy of information
leads to crises, information overload results in chaos.
C. Form Dimension
a. Clarity: Information should be provided in a form that is easy to
understand.
b. Detail: Information can be provided in detail or summary form.
c. Order: Information can be arranged in predetermined sequence.
d. Presentation: Information can be presented in narrative, numeric,
graphic, or other forms.
e. Media: Information can be provided in the form of printed
paper documents, video displays, or other media.
f. Explicitness: A report is said to be of good quality if it
does not require further analysis by the recipients for decision
making.
g. Impartiality: Impartial information contains no bias and has
been collected without any distorted view of the situation

The information system function represents:

1. A major functional area of business that is important to business

success as the functions of accounting, finance, operations
management, marketing, and human resource management.
2. A major part of the resources of an enterprise and its cost of doing
business, thus posing a major resource management challenge.
3. An important factor affecting operational efficiency, employee
productivity and morale, and customer service and satisfaction.
4. A major source of information and support needed to promote
effective decision making by managers.
5. An important ingredient in developing competitive products and
services that give an organization a strategic advantage in the global
marketplace.

Information system and information technology

Information technology involves the use of scientific knowledge, computers

and electronic devices to implement information system. An information
system implemented using information technology offer a number of
advantages that overcomes the challenges identified in the information
systems:

 Speed
 Automatic operation
 Accuracy
  Precision
 Varied management information
 Random enquiries on stored data can be easily performed
 High productivity and improved service
 Processing of a very large amount of data

Competitive advantage of information technology

Information Technology (IT) is reshaping the basics of business, customer service,

operations, product and marketing strategies, and distribution. The fundamental
reasons for the use of information technology in business are:

1. Support for business operations.

2. Support for managerial decision making.

Apart from these basic reasons, information technology can also be used for
providing Support for strategic competitive advantage. Information technology can
be used to implement a variety of competitive strategies but key competitive
strategies include:

1. Cost strategies: using information technology to lower production cost thereby

making the organization become a low-cost producer. For example, using
computer-aided manufacturing systems to lower costs, creating internet web
sites for electronic commerce to lower marketing costs, lowering customers or
suppliers’ costs.

2. Differentiation strategies: Using IT to differentiate your products or services

from other competitors such that customers perceive products or services as
having unique features or benefits.

3. Innovation strategies: Using IT to introduce unique products or services, or

making radical changes in the business processes that cause fundamental
changes in the way business is conducted.

Resistance to system changes:

Most information systems today are still completely non-computerized. They contain
a computer as a component and also include one or more non-computerized (or manual)
components.

Modern organizational change is largely motivated by exterior innovations

rather than internal factors. Globalization and constant innovation of
technology are major factors that result in a constantly evolving business
environment.
Organizations change for a number of different reasons, so they can either
react to these reasons or be ahead of them. These reasons include:

1. Competition: The entrance of a new competitor into a market can cause a

business to change its marketing strategy.
2. Technology: Innovations in technology can force a business to change
just to keep up.
3. Desire for growth: Businesses that want to attain growth might need to
change their method of operations.
4. Need to improve processes: A business might need to implement new
production processes to become more efficient and eliminate waste.
5. Government regulations: Changes in government regulations can have an
impact on how a company does business. Newly mandated safety procedures
can force a factory to change its production process to create a safer
work environment. Businesses that make or distribute consumer goods such
as food products might have to add more quality control measures to
ensure consumer safety.
6. Performance gaps: When the organization's goals and objectives are not
being met or other organizational needs are not being satisfied. Changes
are required to close these gaps.
7. Opportunities: Opportunities are identified in the market place that the
organization needs to pursue in order to increase its competitiveness.
8. Mergers & acquisitions
9. Sounds good
10. A market demand
11. A business need
12. A customer request
13. A legal requirement
14. A social need
15. Economic crisis

PROBLEMS Problems are undesirable  An increase in time required

situations that prevent the to fill an order can trigger
business from fully achieving a project to reduce that
its purpose, goals and delay.
objectives.

OPPORTUNITIES Opportunities are chances to  Management is always

improve the business even in the receptive to cost cutting
 absence of specific problems. ideas, even when high costs
These could be opportunities are not currently considered
for: a problem.
 Upgrading system
 Altering systems
 Installing new systems

DIRECTIVES A directive is a new requirement  Management may dictate

that is imposed by management, support for a new product
government or some external line or policy.
influence.

The PIECES framework (James Wetherbe, 1984)

There are too far too many potential problems, opportunities and directives to be
listed. The PIECES frame work classifies these needs in the table below
P PERFORMANCE The need to improve Throughput:
Performance The amount of work performed over a period of time.

 Throughput Response time:

 Response time The average delay between a transaction and a response to that transaction.

I INFORMATION The need to improve or Information: Data: Stored data:

The outputs of the system used Inputs to the system
(OR DATA) control information.
for planning  Data stored redundantly
 Lack of information  Data is not captured  Data inconsistent with
 Information  Lack of needed information  Data is captured but multiple stores
 Lack of relevant not in a timely fashion  Data insecure against
 Data
information Data is not accurately accidents.
 Stored data  Too much information captured  Data not organized
 Information not in useful  Data is difficult to  Inaccessible data
form capture  Inflexible data
 Inaccurate information  Data is captured
 Information that is redundantly
difficult to produce.  Too much data is
 Information that is not captured
timely  Illegal data captured
 Illegal information

E ECONOMICS The need to improve  Costs are unknown or untraceable to source

economics or control cost  Costs are excessive

CONTROL The need to improve control Too little control: Too little security: Too much control or security:
and security  Bureaucratic process slowing down the
C  Input data not Unauthorized access to system.
adequately edited space and facilities  Controls inconvenience users and
 Data crimes
Unauthorized access to
  Fraud computers customers
 Embezzlement Unauthorized access to  Control results in loss of
 Violation of data
dada or information transaction.
privacy
 Processing errors Unauthorized updates of
 Decision-making data.
errors

The need to improve People or machines waste time:

E EFFICIENCY
efficiency of people and
machines  Data is redundantly input, copied or processed.
 Information is redundantly generated

Machine or processes waste materials and supplies:

 Effort required for tasks is excessive

 Materials required for tasks are excessive.

The need to improve to  System producing inaccurate results

S SERVICE
service to customers,  System producing inconsistent and unreliable results
partners, employees and the  System is difficult to use
like.  System is too complex
 System is inflexible to situations and exceptions
 System is inflexible to change
 System does not interface well with other systems
What organizations can change

What organizations can change fall into the following broad areas:

1. Mission, Vision, & Strategy: Organizations should continually ask

themselves, "What is our business and what should it be?" Answers to
these questions can lead to changes in the organization's mission (the
purpose of its business), its vision for the future (what the
organization should look like), and its competitive strategy.
2. Technology: Organizations can change their technology (for example the
way they produce whatever they sell) in order to increase efficiency and
lower costs.
3. Human-Behavioural Changes: Training can be provided to managers and
employees to provide new knowledge and skills, or people can be replaced
or downsized. As result of the recent financial crisis, many
organizations downsized creating massive unemployment that continues to
this day.
4. Task-Job Design: The way work is performed in the organization can be
changed with new procedures and methods for performing work.
5. Organizational Structure: Organizations can change the way they are
structured in order to be more responsive to their external environment.
Again to be more responsive to the marketplace, this also includes where
decisions should be made in the organization (centralized or
decentralized).
6. Organizational Culture: Entities can attempt to change their culture,
including management and leadership styles, values and beliefs. Of all
the things organizations can change, this is by far the most difficult
to undertake.

These are the major elements that organizations can change. It is important
to note that changes in one of these elements will usually have an impact
on another element. As an example, changing technology may require changes
in the human-behavioural area (new knowledge and skills on how to use the
technology).

The effect of this is an ever increasing need for change and its attendant
requirements:

1. The need for the organization to learn how to handle and become
comfortable with change
2. The need for the organization to manage and adapt the structure,
culture, processes, policies procedures and routines of organizations to
organizational change
3. The need for the organization to re-direct the use of resources,
business process, budget allocations, or other modes of operation that
significantly reshape a company or organization.

These requirements can have a strong positive or negative impact on

employee or the organization at large. Change not only affects the
business, it also affects all of the companies you do business with. Your
business partners, vendors and customers will all have to alter the way
they do business to accommodate your change. The reasons for your change,
and the implementation of that process, need to be done as efficiently as
possible to help preserve the important relationships you have developed
through the years. A mismanaged change in your company can cause vendors
and customers to lose confidence in your business, and that can affect how
much you pay for products and who you sell your products to. A negative
impact may lead to change or policy resistance:

Reasons for resistance to change:-

1. Fear
 Fear of the unknown
 Fear of redundancy

2. Insecurity
 Employees may feel less optimistic and hopeful about their professional
future with the company
 The feeling that the management is criticizing the old system and by
implication criticizing their role in it
 Threaten job security
 Threaten self-esteem of the staff
 Fear that prospects (promotions) may be altered
 Fear that their position and personal commitment to work may be devalued
if it can be done by a machine (computer)
 fear of loss of control

3. Lack of communication regarding the change

 The feeling that they may be incapable of understanding the new system
 Because the benefits are unknown, it leads to lack of confidence in the
change.

4. Lack of knowledge about coming changes:

 Change of any kind makes people feel uncomfortable as they do not know
how they will be able to cope with it
 Disruption caused by lack of understand on the technology
 Afraid that they will be unable to cope with the new methods.

5. Convenience:
An automated system may be too boring, take up too much room, make so much
noise, generate too much heat, or consume too much electricity. Even a
compact microprocessor-based system might not be considered ‘convenient’ by
everyone when compared with other devices like hand held mobile devices.

6. Security:
If the information system is maintaining sensitive, confidential data, the
user may not know that a computerized system is secure. The user may want
the ability to keep the information physically protected and locked up.

7. Maintainability:
The user might argue a computerized information system would be cost
effective except that there is nobody on the staff that can maintain the
computer hardware and/or software, so nobody would be able to repair the
system if it broke down nor would anyone be able to make changes and
enhancements.

8. When Change does not equal progress

Mistaking change for progress is similar to the common problem of mistaking
activity for productivity

9. Cost-to-benefit ratio
Change in business is good, but it's seldom easy and can often be
expensive. Every change has an opportunity cost; resistance can occur when
the cost of a change is outweighed by the benefit that change will create.
It may be cheaper to continue carrying on the system functions and storing
the systems information manually. It is not always true that computers are
faster and cheaper than the manual methods. This is particularly true if
the system under consideration requires only limited functionality.
10. Choosing the wrong solution
Organizations often initiate change because they have a problem that needs
to be solved. Sometimes management doesn't sufficiently investigate the
true cause of a problem, the stakeholders affected by the solution, and
potential unintended consequences of change. This approach creates all the
costs of change without the intended benefit.

Types of Resistance to system changes

Aggressive Aggressive behaviour towards the system may come as

resistance an attack upon the system to make the system
physically in-operative or ineffective. For
example, dumping liquids into hardware
deliberately, etc.

Progressive Projecting resistance to the introduction of an

resistance: information system. For example, continuously
finding faults with system. When the new system is
installed, they (staff) may feel that it is imposed
on them by top management or data processing
department. The new system can be used in half-
hearted fashion, using every problem that occurs
with its operations to indicate that it is
unworkable, and should never have been developed.
Incorrect data may be accidentally entered into the
system to try to crash it.

Avoidance Users avoid interactions with the system

Components of a computerized information system:

PEOPLE POLICIES, METHODS OR PROCEDURES

Data Information
(Input) (Output)

HARDWARE SOFTWARE

NETWORKS DATA STORAGE

Internal control
component

1. Input
2. Output
3. People
4. Policies, processes and procedures
5. Hardware
6. software
7. Network
8. Data storage
9. Feedback and control
THE COMPUTER SYSTEM

WHAT IS A COMPUTER?

A computer is a device (manual or electronic) that can accept data as

input, process the data according to a specified instruction and generate
information as output.

DATA

Collection of raw and unprocessed

3, 2 facts

PROCESSING

+ Transformation of data (input)

into information according to a
specified instruction

INFORMATION

Processed data given as output.

5
 3 BASIC FUNCTIONS

1. Accepting data as input

2. Processing the data according to specific instructions
3. Generating information as output

The computer is a system because it consists of different components or

parts (input, processing, and output units) that work together as a whole
to meet the sole objective of transforming data into information.

GOAL?

The computer system:

COMPUTER

HARDWARE SOFTWARE

INPUT UNIT PROCESSING OUTPUT UNIT SYSTEM APPLICATION

UNIT SOFTWARE SOFTWARE
Keyboard Monitor Graphic editors
Mouse Printer Word processors
Joystick Speakers Spread sheets
Etc. Etc.

ALU CU MU LANGUAGE OPERATIN UTILITY

Arithmetic & Control unit Memory TRANSLATO G PROGRAM
logical Unit unit RS SYSTEMS S
Assemblers Windows os Editors
Compilers Linux os
Interpreters UNIX os
Debuggers
Etc.

PRIMARY/ SECONDARY/
Computer Hardware is the physical technology that houses and executes the
software, stores and transports the data, and provides interfaces
hardware
for the entry and removal of information from the system. These
include machines and media:

a. Machines (computers, video monitors, printers, optical

scanners, magnetic disk drives, CRT terminals,
processors).
b. Media (floppy disk, optical disk). Media is all
tangible objects on which data is recorded from
sheets of paper to magnetic disks).

Computer Software is a system that contains instructions (computer

programs) that when executed provide desired function and
software
performance, data structures that enable the programs to
adequately manipulate information, and documents that describe the
operation and use of the programs.

The software component of the IS comprises applications, operating

systems, and assorted command utilities. Information systems
depend on software resources to help end users use
computer hardware to transform data resources into a variety of
information products. Software is needed to accomplish the input,
processing, output, storage, and control activities of information
systems.

Computer software is typically classified into two major types of

programs:

1. Application software: Programs that direct the

performance of a particular use, or application of
computers that meet the information processing needs of
end users. Application software can be classified as:

a. General purpose Application programs: are programs

that perform common information processing jobs for
end users. For example, Word processing programs,
spreadsheet programs, database management programs,
and graphics programs.

b. Application specific programs: application software

package that support specific applications of end
users. Major categories of such application specific
programs are Business application programs
(Accounting, marketing-sales analysis, human resource
management-employee benefits analysis), Scientific
application programs, also there are other
application programs in education, video game programs, and
computer-generated music and art programs.

2. System software: Programs that manage and support the

resources and operations of a computer system as it
performs various information processing tasks. These
programs can be classified as:

a. System management programs:-programs that manage the

hardware, software, and data resources of the
computer system during its execution of the various
information processing jobs of users. The most
important system management programs are operating
systems.

b. System support programs:-programs that support the

operation and management of a computer system by
providing a variety of support services. Major
support programs are system utilities.

c. System development programs:-programs that help users

 develop information system programs and procedures
and prepare user programs for computer processing.
Major development programs are language translators,
programming tools, and CASE (Computer- Aided Software
Engineering)

Data storage Data can be stored, processed, and transmitted by a computer. The
internal data of information systems is stored in files and
databases. These data stores may be manual (Files and cabinets) or
automated (computer disk).

Traditional systems were built using file technology. Data was

dependent on programs that use the data and vice versa. Each file
was designed and structured for specific programs that would use
it. If another program needed the files data to be structured
differently, special programs had to be written to extract, sort,
merge or create new or temporary files for that purpose.

Today databases offer a better alternative. A database is an

integrated collection of data, stored with a minimum redundancy
and structured such that multiple programs or applications can
share the data. Data is structured independent of the program that
uses it. This allows the structured to be changed without having

to change the existing programs that use the data. For example, a
DBMS makes it easy for an employee database to be accessed by
payroll, employee benefits, and other human resource programs. A
DBMS also simplifies the process of retrieving information from
databases in the form of displays and reports. Instead of having
to write computers programs to extract information, end users can
ask simple questions in a query language.

Networks A network is the connection or combination of hardware and

software to provide a mechanism for two peer communicating
entities to exchange information or share resources such as data,
software and hardware. The entities - which may be computers,
operating systems, programs, processes, or people—are the users of
the network’s services.

Computer network is responsible for transmitting information in

any form (e.g., voice, data, text, and images) from one place to
another. Modern information systems rely heavily on networks to
provide electronic communication links between end user
workstations, other computer systems, and organizations
databases.

The network hardware consists of the physical equipment that

carries signals from one point of the network to another. It
includes all computers, peripherals, interface cards and other
equipment needed to perform data-processing and communications
within the network. Major network hardware includes:

1. File Servers
2. Workstations
3. Network Interface Cards
4. Switches
5. Repeaters
6. Bridges
7. Routers
8. Cables
Network software provides an interface composed of a set of
functions, much as an operating system provides an interface
consisting of system calls. The description of this interface is
the functional description of the network. Typical functions in a
network interface enable the entities to send and receive
messages, to obtain status information, to identify remote peer
entities with which to communicate, and so on.

Unlike operating systems, such as DOS and Windows, which are

designed for single users to control one computer, network
operating systems (NOS) coordinate the activities of multiple
computers across a network. The network operating system acts as a
director to keep the network running smoothly. The two major types
of network operating systems are:

• Peer-to-Peer
• Client/Server

Peer-to-Peer
Peer-to-peer network operating systems allow users to share
resources and files located on their computers and to access
shared resources found on other computers. However, they do not
have a file server or a centralized management source. In a peer-
to-peer network, all computers are considered equal; they all have
the same abilities to use the resources available on the network.
Peer-to-peer networks are designed primarily for small to medium
local area networks. AppleShare and Windows for Workgroups are
examples of programs that can function as peer-to-peer network
 operating systems.

PEER-TO-PEER NETWORK

Client/Server

Client/server network operating systems allow the network to

centralize functions and applications in one or more dedicated
file servers. The file servers become the heart of the system,
providing access to resources and providing security. Individual
workstations (clients) have access to the resources available on
the file servers. The network operating system provides the
mechanism to integrate all the components of the network and allow
multiple users to simultaneously share the same resources
irrespective of physical location. Novell Netware and Windows 2000
Server are examples of client/server network operating systems.

CLIENT/SERVER NETWORK

The following list includes some of the more popular peer-to-peer

and client/server network operating systems.
• AppleShare
• Microsoft Windows Server
• Novell Netware

INFORMATION SYSTEM FUNCTIONS:

Given the broad range of people and interests represented in organizations, it
could take several different types of information systems to satisfy all of an
organization’s information system needs. Conceptually, information systems
functions in the real world can be classified several different ways. For
example, several types of information systems functions can be classified
as either operations or management information systems functions. Figure
bellow illustrates this Conceptual classification of information systems.

Note how this conceptual overview emphasizes the main purpose of information
systems that support business operations and managerial decision making

INFORMATION SYSTEM SUPPORT TO LOWER LEVEL MANAGEMENT:

Operations support systems produce a variety of information product for internal
and external use. However they do not emphasize producing the specific information
product that can best used by manager. The role of a business firm’s operations
support systems is to efficiently process business transactions, control
industrial process, support office communications and productivity, and
update corporate databases.

Transactions Processing Systems (TPS):

Transaction processing systems are computerized systems that perform and record the
daily transactions necessary to the conduct of business. Transactions are business
events such as invoices, requisitions, and the like. TPSs are an important
example of operations support systems that record and process data
resulting from business transactions. A transaction processing system (TPS)
automates the handling of data about business activities or transactions. For
example, a bank’s TPS would capture information about withdrawals from and deposits
to customer accounts. Data about each transaction are captured, transactions are
verified and accepted or rejected, and validated transactions are stored. Reports
may be produced immediately to provide summaries of transactions, and transactions
may be moved from process to process in order to handle all aspects of the business
activity.

Transaction examples:
 INPUT TRANSACTIONS: OUTPUT TRANSACTIONS:
Input new data into IS Trigger responses from
recipients of input
transactions.

 Customer orders  Customer invoices(Bills)

 Accounting Vouchers  Sales receipts
 Course Registration  Payment receipts
 Airline reservation payments  Paychecks
 Bank deposit Slips  Course Schedules
 airline reservation
confirmations
 Airline tickets

Mode of transaction processing:

TPSs process transactions (data) in 2 ways
1. Batch processing
2. online processing

Batch processing
Transactions data is accumulated over a period of time and processed
periodically.

Batch processing usually involves:

1. Gathering source documents originated by business transactions, such as sales

orders and invoices into groups called batches.
2. Recording transaction data on some type of input medium, such as magnetic
disks or magnetic tape
3. Sorting the transactions in a transaction file in the same sequence as the
records in a sequential master file.
4. Processing transaction data and creating an updated master file and
a variety of documents (such as customer invoices and paychecks) and
reports.
5. Capturing and storing batches of transaction data at remote sites,
and then transmitting them periodically to a central computer for
processing. This is known as Remote Job Entry (RJE)

On-line processing
Data is processed either as it occurs or as it becomes available. It accepts input
directly from the area where it is created. It is also a system in which the
outputs or results of computation are returned directly to where they are required.
Characteristics:
 1. Data are entered into the information system and received from the
information system remotely. That is, users of the information system
typically interact with the information system from terminals that may be
located hundreds of miles from other terminals and from the information
system itself.

2. Its stored data are usually organized so that individual pieces of data can
be retrieved and /or modified quickly and without necessarily accessing any
other piece of data in the system. (e.g. individual airline reservation
record, individual personnel record on an ATM)

3. It is possible to collect data interactively (on-line) and process it as a

batch. This is referred to as deferred processing.

Real-time processing
Real-time processing requires rapid response times. Real-time processing controls
an environment by receiving data, processing them, and returning the results
sufficiently quickly to affect the environment. There are many on-line systems-
banking systems, airline reservation systems, stock brokerage systems- that are
expected to react within one or two seconds to a message typed on the terminal.
However, in most real time systems, the computer must react within milliseconds and
sometimes within microseconds to inputs that it receives.

 Data is processed immediately after a transaction occurs.

 Transaction data are processed as soon as they are organized or recorded,
without waiting to accumulate batches of data.
 Data are fed directly into the computer system from online terminal
without being sorted, and they are always stored online in direct
access files.

Examples of real-time systems include:

Process Control Monitor and control physical process. For example, a

Systems: petroleum refinery uses electronic sensors linked to
computers to continually monitor chemical processes and
make instant (real-time) adjustments that control the
refinery process.

High speed data Computer systems that receives high-speed telemetry data
acquisition systems from orbiting satellites, or computers that capture massive
amounts of data from laboratory experiments.

Missile guidance Computer systems that must track the trajectory of a

systems missile and make continuous adjustments to the orientation
and thrust of the missile engines.

Telephone switching Computer systems that monitor voice and data transmissions
systems over thousands of telephone calls, detecting phone numbers
being dialed.

Patient monitoring Computer systems that monitor various patient vital signs
systems (Temperature, pulse…) and either adjust medication or sound
an alarm if those vital signs stray outside some
predetermined conditions.

From an implementation point of view, real time systems as well as some online
systems are characterized by the following features:

 Simultaneous multiprocessing
 Assignment of priorities of processing tasks- immediate servicing or delayed
for reasonable periods
 Lower priority tasks are interrupted to service higher priority tasks
 Extensive communication between tasks since the tasks are working on
different aspects of an overall process
 Simultaneous access to common data, both in memory and secondary storage,
thus requiring elaborate control and coordination procedures (handshaking
and semaphores) to ensure that common data does not loose integrity or
become corrupted.
 Dynamic use of RAM in the computer system since it is uneconomical to assign
enough fixed memory to handle volume peak situations.

Office Automation Systems:

Office automation refers to a wide variety of computer-based and non-computer-based
applications that make office workers more productive at their jobs. Office
automation includes all of the formal and informal electronic systems primarily
concerned with the communication of information to and from persons both inside and
outside the firm. Office

These are:

 Electronic Mail
 Voice mail,
 Audio conferencing
 Video conferencing
 Facsimile transmission (FAX)
  Desktop publishing

Office Automation Systems enhance office communications and productivity. For

example, a corporation may use word processing for office correspondence,
electronic mail to send and receive electronic messages, and
teleconferencing to hold electronic meeting

INFORMATION SYSTEM SUPPORT TO MIDDLE LEVEL MANAGEMENT:

The level of the manager in the organization is also a factor in determining the
kind of information needed to solve a problem. Lower – level management needs
detailed internal information to make day – to – day, relatively structured control
decisions. Higher – level management, for whom long – range objectives are the
primary concerns, requires summarized information from a variety of sources to
attain goals. In either case, management action is based on information that is
accurate, relevant, complete, concise, and timely

Management information systems (also called information reporting

systems)

A Management Information System (MIS) is an assemblage of data (e.g. facts and

opinions) that are processed (e.g. summarized, categorized, or projected) in such a
way that they result in intelligent information that management can use to make
decisions, and that the organization can use to attain its goals. It is the
combination of human and computer based resources that results in the collection,
storage, retrieval, communication and use of data for the purpose of efficient
management of operations and for the business planning.

The main objectives of MIS is to use formalized procedures to provide management

with appropriate information from all relevant sources, which would enable the
manager make timely and effective decisions. It takes the raw data available
through a TPS and converts them into a meaningful aggregated form. For example,
whereas a transaction processing system keeps track of sales, a management
information system can pinpoint which items are selling slowly and which are
selling quickly. The MIS system can therefore direct the manufacturing department
on what to produce and when. Management information systems often require data from
several transaction processing systems (e.g., customer order processing, raw
material purchasing, and employee timekeeping).

The MIS an extension of the transaction processing system. Data captured and stored
in transaction processing can be used to produce information of value to end-users,
especially the 3 levels of management (hence, MIS). The information is used to
plan, monitor, and control business operations.
MIS is a person – machine system and a highly integrated grouping of information –
processing functions designed to provide management with a comprehensive picture of
specific operations. It is actually a combination of information systems. To do the
job, it should operate in real time, handling inquires as quickly as they are
received. Management information must also be available early enough to affect a
decision. Operationally, MIS should provide for file definition, file maintenance
and updating, transaction and inquiry processing and one or more databases linked
to an organizational database. Within a MIS, a single transaction can
simultaneously update all related data files in the system. In so doing, data
redundancy (duplication) and the time it takes to duplicate data are kept to a
minimum, thus insuring that data are kept current at all times.

A key element of MIS is the database – a non-redundant collection of interrelated

data items that can be processed through application programs and available to many
users. All records must be related in some way. Sharing common data means that many
programs can use the same files or records. Information is accessed through a data
base management system (DBMS). It is a part of the software that handles virtually
every activity involving the physical database.

There are several advantages to a data base system:

1. Processing time and the number of programs written are substantially reduced.
2. All applications share centralized files.
3. Storage space duplication is eliminated.
4. Data are stored once in the database and are easily accessible when needed.

The two primary drawbacks of a database are the cost of specialized personnel and
the need to protect sensitive data from unauthorized access.

MIS produce information products that support many of the day-to-day decision
making needs of management. Also provide information in the form of reports
and displays to managers. For example, sales managers may use their computer
workstations to get instantaneous displays about the sales results of
their products and to access weekly sales analysis reports that evaluate sales
made by each salesperson.

There are three reporting alternatives provided by MIS:

Detailed reports: Reports that present information with little or no

filtering or restrictions. These reports assist
management planning and controlling by generating
schedules and analysis.
 Periodic Scheduled Reports: This traditional form of providing information to
managers uses a pre-specified format designed
to provide managers with information on a
regular basis. Typical examples of such periodic
scheduled reports are weekly sales analysis
reports and monthly financial statements.

Exception Reports: In some cases, reports are produced only

when exceptional conditions occur. In other
cases, reports are produced periodically but
contain information only about these
exceptional conditions. For example, a credit
manager can be provided with a report that
contains only information on customers who
exceed their credit limits.

Demand Reports and Responses: Information is provided whenever a manager demands

it. For example, DBMS query language and
report generators allow managers at online
workstations to get immediate responses or reports
as a result of their requests for information.
Thus, managers don’t have to wait for periodic
reports to arrive as scheduled.

Summary Reports: Reports that do not need supporting details or

require further analysis by the recipients for
decision making.

Historical reports: Reports that provide information on all

transaction processed and serve as an audit trail
that confirms the transaction processing and
ensures that the data can be recaptured in case it
gets lost somewhere in the system.
Examples:
DETAILED REPORTS HISTORICAL REPORTS SUMMARY REPORTS EXCEPTION REPORTS

 Customer account reports  Daily order register  Sale-by-store report  Outstanding purchase orders
 Student Transcripts  Daily payment register  Sales by department report  Delinquent account report
 Year-to-date capital  Customer update report  Salesperson commissions  Expired subscriptions report
expenditures  Deposit/Withdrawals report  Backorders report
register  Income statement
 Balance sheet
 Cash flow statement
The primary users of MIS are middle and top management, operational managers and
support staff. Middle and top management use MIS for preparing forecasts, special
requests for analysis, long – range plans and periodic reports. Operational
managers use MIS primarily for short- range planning, periodic and exception
reports. The support staff finds MIS useful for the special analysis of information
and reports to help management in planning and control. Providing data for use in
MIS is the function of most levels of personnel in the organization. Once entered
into the system, the information is no longer owned by the initiating user but
becomes available to all authorized users.

Today’s typical MIS poses several problems. Most MIS reports are historical and
tend to be dated. Another problem is that many installations have databases that
are not in line with user requirements. This means that many MIS environments have
not been congruent with the real world of the user. Finally, an inadequate or
incomplete update of the database jeopardizes the reliability for all users.

A major problem encountered in MIS design is obtaining the acceptance and support
of those who will interface with the system. Personnel who perceive that their jobs
are threatened may resist the implementation of MIS. In understanding both
technology and human behavior, the analyst faces the challenge of selling change to
the right people for a successful installation.

Decision Support System (DSS)

A decision support system is a form of information system that provides tools that
help managers make decisions with both internal and external information in the
manner that best suits the decision they are currently trying to make. The DSS
provides the manager with computing and communications capabilities to develop his
or her own decision models and information banks. A DSS is not intended to make
decisions for managers, but rather to provide them with a set of capabilities to
enable them to generate the information they feel they need to make decisions that
are semi structured, unique or rigidly changing and not easily specified in advance
unlike TPS.

The management’s frustration with MIS is the limited support it provides top
management for decision making. The MIS cannot provide information for managers to
precisely define their information needs-sometimes managers do not know what
information will help them until the need to make a decision arises. A DSS provides

the user with decision-making information when a decision making situation occurs.
DSS advances the capabilities of MIS. It assists management in making decisions. It
is actually a continually evolving model that relies heavily on operations
research.

Gorry and Morton coined the term decision support system (DSS). The origin of the
term is simple:
Decision: emphasizes decision making in problem situations, not
information processing, retrieval, or reporting.

Support requires computer-aided decision situations with enough

“structure” to permit computer support.

System accentuates the integrated nature of problem solving,

suggesting a combined “man”, machine, and decision
environment.

There are 3 types of decisions:

1. Structured
2. Semi-structured
3. Unstructured

Structured Decisions: Structured decisions are those decisions that we

can predict will happen. We cannot always predict
when they will happen, but we can predict that
they will happen. Managers can usually define the
information requirements to support a structured
decision.

Unstructured Decisions: Unstructured decisions cannot be predicted. We do

not know when the decision making need will occur,
and we do not know the nature of such a decision.
Can you think of an unstructured decision? If you
could, it would not be unstructured.

Semi-structured decisions: Semi-structured decisions can be predicted, but

not all variables can be considered.

Beginning with management decision systems in the early 1970’s the concept of
interactive computer – based systems supporting unstructured decision making has
been expanded to include everything but transaction processing systems. A typical
early definition required an interactive computer – based system to help users use
data and models to solve unstructured problems. There are authors today who view
DSS as an extension of MIS, DSS as independent of MIS, or MIS as a subset of DSS.
The commonly accepted view is that DSS is a second – generation MIS. MIS is
generated when we add predefined managerial reports that are spun out of the
transaction processing, report generation and online inquiry capabilities – all
integrated with a given functional area such as production MIS or personnel MIS.
DSS result from adding external data sources, accounting and statistical models and
interactive query capabilities. DSS provide managers with powerful tools to look at
data in new ways. These include

 Easy-to-use query languages

 Ad-hoc report generators
 Statistical analyzers
 Graphics
 Analytical models
 Specialized databases
 The decision makers own insights, experience and judgments.

The outcome is a system designed to serve all levels of management and top
management in particular, in dealing with “what if” unstructured problem
situations. It is a system with the intrinsic capability to support ad hoc data
analysis as well as decision – modeling activities. Whereas an MIS produces a
report, a DSS provides an interactive environment in which decision makers can
quickly manipulate data and models of business operations.

DSS is primarily designed to support the unstructured decisions. The concept is

that the data for many unstructured decisions have already been captured by the
transaction-processing and management reporting systems. Additional data may be
available in national and international databanks around the world. Managers may
have to input these additional data. The objective of the DSS is to subsequently
make it easy for managers to get needed data and manipulate that data when a
decision must be made.

The DSS provides the manager with computing and communications capabilities to
develop his or her own decision models and information banks. A classic model of
decision-making used by managers is known as the Simon Model. It suggests that most
decision situations pass through three steps before the decision is made:

1. Need Identification [Intelligence]

2. Alternative analysis [Design]
3. Choice

Need Identification [Intelligence]: This phase of decision making involves the

awareness of a problem at a symptomatic
level; it requires a closer look at the
problem and a thorough evaluation of the
variables and their relationships. This
process identifies that there is a decision
to be made. Decisions can usually be
 identified by examining and analyzing
existing data, presumably from the
transaction and management reporting
subsystems. The more intelligence
management has about the cause of a
problem; the better is the likelihood of
designing a good decision. A DSS can
provide intelligence through information
retrieval and statistical packages.

Alternative Analysis: Identifies and analyses alternative courses

of action in a decision situation. The DSS
can provide managers with “what-if” tools
that can pretest the potential outcomes of
different decisions. Computer – based
deterministic or stochastic models may be
used for decision design. DSS plays a major
role in decision design under uncertainty.
The output of the model(s) is the basis of
the choice phase of decision-making.

Simulation is another level of decision

support for alternative analysis.
Simulators use existing business data and
complex mathematical models to project the
implications of alternative decisions.

Choice: This involves the intelligent selection

from a number of alternatives generated.
Automated versions of this information
system subsystem can reason, learn and make
intelligent decisions in a manner similar
to humans. This is only beginning to be
exploited by DSS. These systems are
primarily intended to support middle
management, professional staff and
executive management decision making. These
systems are associated with the field of
artificial intelligence and expert systems.
Decision support and expert systems are
among the newest and most exciting
applications for information systems.

A DSS has three parts:

1. A database (which may be extracted from a TPS or MIS)
2. Mathematical or graphical models of business processes
3. A user interface (or dialogue module) that provides a way for the decision
maker to communicate with the DSS.

Examples of DSS:
Advertising managers may use an electronic spreadsheet package to do
what-if analysis as they test the impact of alternative advertising budgets on the
forecasted sales of new products.

Comparing between (MIS) and (DSS):

MIS DSS

Information form Periodic, exception, demand Interactive inquiries and

and reports and responses responses
Frequency

Information format Pre-specified, fixed format Ad hoc, flexible, and adaptable

format

Types of decision Structured decision for Semi-structured and unstructured

supported operational and tactical decisions for tactical and
planning and control. strategic planning and control.

Type of support Provide information about the Provide information and decision
performance of the organization. support
techniques to confront specific
 problem

Types of decision Indirect support designed for Direct support to the decision
maker many managers making styles of individual
supported managers

Knowledge based systems

The goal of the Artificial intelligence technology is to produce programs that can
reason, learn, make intelligent decisions and generally imitate human performance
in a manner similar to humans.

The Knowledge based system is one of the implementation of the AI technology. It

contains a varied knowledge which bring to bear on a given task. Expert systems are
a species of the knowledge-based system, though the two systems are used
interchangeably.

EXPERT SYSTEM:
The expert system is a computer based information system that has been encoded with
human knowledge and experience to achieve a level of problem solving capability
that is equivalent to the human expert in that field.

For example:

 A food manufacturer uses an expert system to preserve the production

expertise of experienced engineers who are nearing retirement.

 A major credit broker uses an expert system to accelerate credit screening

that requires data from multiple sites and databases.

AI separates expert systems into two components:

1. The inference Engine

2. Knowledge base

The inference engine is a program component that aids decision making through
inferences- The reasoning involved in drawing a conclusion or making a logical
judgment on the basis of circumstantial evidence and prior conclusions rather than
on the basis of direct observation.

Two main inference techniques available:

Deduction: a technique to infer information that is a logical consequence
of the information in the database e.g. the join operator
applied to two relational tables where the first concerns
employees and departments and the second departments and
managers infers a relation between employee and managers.

Induction: the technique to infer information that is generalized from the

database as in the example mentioned above to infer that each
employee has a manager. This is higher level information or
knowledge in that it is a general statement about objects in
the database. The database is searched for patterns or
regularities.

The knowledge base is an extension of the database concept. It contains not only
data but also facts and rules for decision-making (called heuristics). The KB is
created by or for the end-user using the inference engine. The inference engine
executes the knowledge base to simulate the expertise.

For example the forecasting daily banking transaction application can track
everyday transactions and uses inference engine to foretell what future transaction
will be so that the financial industries will always be on guard to meet customer
needs in an efficient way. It also predicts if it is liable to grant a customer a
loan (i.e. if the credit risk of the customer is not bad) by navigating through the
massive amount of information available. These applications represent significant
opportunities for expanded storage growth.

Executive Information Systems:

It is a decision support system that is designed to meet the special needs of

executives. It is a system that provides information to the executive on the
overall performance of the firm. They combine many of the features of management
information systems and decision support systems. EIS Provides critical information
tailored to the information needs of executives.

EIS Components:

1. Hardware:
The basic hardware needed for a typical EIS includes four components:

a. Input data-entry devices. These devices allow the executive to enter,

verify,
b. and update data immediately
c. The central processing unit (CPU).
d. Data storage files. Save useful business information, and search
historical
e. Business information easily.
f. Output devices, such as monitor or printer

2. Software:
The basic software needed for a typical EIS includes four components:
a. Text base software (Documents)
 b. Database.
c. Graphics. Graphics can turn volumes of text and statistics into visual
information for executives.
d. Models. EIS models contain routine and special statistical analysis

3. User interface

Several types of interfaces can be available to the EIS structure,

such as scheduled reports, questions/answers, menu driven, command
language, natural language, and input/output.

4. Information network

Information network play a pivotal role in networked information systems.

Transmitting data from one place to another has becomes crucial.

Advantages of EIS

1. Easy for upper-level executives to use, extensive computer

experience is not required in operations
2. Information that is provided is better understood
3. Filters data for management
4. Improves tracking information
5. Offers efficiency to decision makers

Disadvantages of EIS

1. Limited functionality, by design.

2. High implementation costs
3. System may become slow, large, and hard to manage
4. May lead to less reliable and less secure data

Strategic Planning Systems

Strategic planning systems are used by senior management to evaluate and analyze
the mission of the organization. Rather than providing advice about an isolated
business decision, these systems provide broader, more general advice about the
nature of the marketplace, the preferences of customers, the behaviour and
competition and so on. This is usually within the province of the Strategic
Planning Department, or long Range Planning Department, though it may be more
informal activity carried out by one or two senior managers.

Therefore information system is an organized combination of people,

hardware, software, communications networks, and data resources that collects,
transforms, and disseminates information in an organization.
All information systems use people, hardware, software, data, and network resources
to perform input, processing, output, storage, and control activities that
transform data resources into information products

SYSTEM DEVELOPMENT
SYSTEMS DEVELOPMENT
System development System development is the process of examining a
system or business situation to improve it through
better procedures and methods.

The systems development life cycle (SDLC) is the process

System development
of understanding how an information system (IS) can
life cycle [SDLC]
support business needs, designing the system, building
it, and delivering it to users. The SDLC is classically
thought of as the set of activities that analysts,
designers and users carry out to develop and implement an
information system. The SDLC is a phased approach to
analysis and design that holds that systems are best
developed through the use of a specific cycle of analyst
and user activities. It entails the following fundamental
phases:
1. Planning
2. Analysis
3. Design
4. Implementation
5. Testing
6. Delivery
7. Operation
8. Support
 9. Disposal

System Development Methodology is a standard process

System development
followed in an organization to conduct all the steps in
Methodology
the SDLC- to analyze, design, implement, and maintain an
information system.
It is a formalized approach to implementing the SDLC
(i.e., it is a list of steps and deliverables). There are
many different systems development methodologies, and
each one is unique based on the order and focus it places
on each SDLC phase. Some methodologies are formal
standards used by government agencies, while others have
been developed by consulting firms to sell to clients.
Many organizations have internal methodologies that have
been honed over the years, and they explain exactly how
each phase of the SDLC is to be performed in that
company.
SYSTEMS DEVELOPMENT LIFE CYCLE

Deliverable

PLANNING Preliminary study  Identify problem, opportunity or Project sponsor  Problem statement
directive.  System request
 Identification of goal and 
objectives
 Scope definition


Feasibility study  Technical feasibility Project sponsor  Feasibility assessment

 Economic Feasibility Project analyst report
 Operational Feasibility
 Schedule feasibility
 Organizational feasibility

Selection

Develop work plan  Time estimation Project manager  Project plan- Work plan
 Time boxing
 Task identification
 Work break down structure
 PERT chart
 Gant Chart
 Scope management

Staffing  Project staffing Project manager Staffing Plan

 Project charter

Control and direct  CASE repository Project manager Standards list

project  Standards Risk assessment
 Documentation
 Risk management
ANALYSIS Analysis strategy  Business process automation
development  Business process improvement
 Business Process Reengineering

Requirement elicitation  Interviews

 Focus groups
 Survey/Questionnaire
 Document Analysis
 JAD sessions
 Observation/ Ethnography
 Reviews
 Brainstorming
 Prototyping
 Requirement Workshop:

Requirement analysis

Requirement Definition  Modeling Models/specifications

and specification

Requirement  Documentation
Documentation

Requirement validation
and verification

Requirement management

Design strategy  Design strategy Alternative matrix

DESIGN System specification
development.

Logical design  Logical design Modeling

Physical Design  Physical design Modeling
PLANNING

The planning phase is the fundamental process of understanding why an

information system should be built and determining how the project team will go
about building it.

An organization’s total information system needs are:

 Identified
 Analyzed
 Prioritized
 Arranged

PLANNING STAGES:
1. PRELIMINARY STUDY
2. FEASIBILITY STUDY
3. SELECTION
4. PROJECT MANAGEMENT

PRELIMINARY STUDY
At this phase:

1. There is recognition that a new system, enhancement or upgrade to an

existing system, product, or service is required to satisfy an
operational need. Information needs of the organization are examined,
and projects to meet these needs are identified. The organization’s
information system needs may result from The operational need may be
derived from:

 Problems
 Opportunities
 Directives

2. Definition of the scope of the project including all end-users (at all
levels of responsibilities), perceived problems, business and technical
constraints, perceived project goals and possible solutions.

3. The systems analyst prioritizes and translates the needs into a written
plan for the IS department, including a schedule for developing new
major systems. Requests for new systems spring from users who need new
or enhanced systems. A system request or project proposal:

 Presents a brief summary of a business need- problem

identification
  Explains how a system that supports the need will create
business value- background analysis.
 Lists the following in the light of the user requirements:

 the Problem Definition/statement

 Objectives of the Study
 Terms of reference for Study
 Constraints
 Expected benefits of the new system
 Justification of the project
 Methodologies
 Scope definition
 Etc.
4. The system proposal is prepared by the System Analyst (who studies the
system) and places it before the user management or steering committee.
The management may accept the proposal and the cycle proceeds to the
next stage. The management may also reject the proposal, prioritize the
project relative to other potential projects or request some
modifications in the proposal.

FEASIBILITY STUDY
Premature commitments to budgets, expectations and solutions should be avoided
since the current system is yet to be fully studied, requirements are yet to be
defined completely and alternatives yet to be identified and analyzed. The
feasibility study is basically the test of the proposed system in the light of its
workability, meeting user’s requirements, effective use of resources and the cost
effectiveness.

In case the system proposal is acceptable to the management, the, the IS

department works together with the person or department that generated
the request (called the project sponsor) to conduct a feasibility
analysis.

It focuses on three major questions:

1. What are the user’s demonstrable needs and how does a candidate system meet
them?
2. What resources are available for given candidate systems? Is the problem worth
solving?
3. What is the likely impact of the candidate system on the organization? How well
does it fit within the organization’s master MIS plan?

The feasibility study examines key aspects of the proposed system:

TECHNICAL Can we build it? Considers the technical requirements compared to the
FEASIBILITY technical capability of the organization.
 Is the solution technically practical?
 Does our staff have the technical expertise to
design and build the solution?
 Is the project feasible within the limits of
current technology?
 Are the current technical resources sufficient
for the new system?

The system is technically feasible if internal technical

capability is sufficient to support the project
requirements.

ECONOMIC Will it provide Considers the expected benefits and savings derived
FEASIBILITY business value? from the proposed system compared to the cost of
building the system:

 Is the system cost effective?

 Do benefits outweigh cost?
 Is the project possible given the resource
constraints?

The system is economically feasible if benefits outweigh

cost.
The concerned business must be able to see the value of
the investment it is pondering before committing to an
entire system study.

At this point, the projected cost will only be a rough

estimate. The exact cost are not required to determine
economic feasibility. It is only required to determine
if it is feasible that the project cost will fall within
the target budget or return on investment. A rough
estimate of the project schedule is required to
determine if it would be feasible to complete the
systems project within a required time frame. The
required time frame would need to be set by the
organization.

SCHEDULE Can it be built Considers the expected project completion time with
FEASIBILITY within an available or accepted time frame of the organization.
acceptable time
 frame?  Can the organization control the factors that
affect schedule feasibility?
 Has management established a firm timetable for
the project?
 Will an accelerated schedule pose any risks? If
so, are the risks acceptable?

The system has schedule feasibility if project

completion time is accepted by the organization.

OPERATIONAL/ If we build it, Operational feasibility is dependent on human resources

ORGAIZATIONAL will it be used? available for the project and involves whether the
FEASIBILITY? system will be used if developed or implemented.
Will the solution fulfill end-user’s requirements? To
what degree?
How will the solution change the end-user’s work
environment?

The system request and feasibility analysis are presented to an information

systems approval committee (sometimes called a steering committee), which
decides whether the project should be undertaken. This may be accepted or
accepted with modifications or rejected. The system cycle proceeds only if
the management accepts it

Feasibility often contains what is known as a high-level forecast or

budget. The “high” would represent the “worst case” scenario on cost and
the “low,” the best case or lowest cost. The hope of course is that the
actual cost and timetable would fall somewhere in between the high and the
low. But feasibility goes beyond just the budget; it also represents
whether the business feels that the project is attainable within a specific
timetable as well. So, feasibility is a statement of both financial and
business objectives, and an overall belief that the cost is worth the
payback.

The result of the feasibility study can be a formal proposal. This is

simply a report- a formal document detailing:

1. The nature and scope of the proposed solution

2. Summary of what is known (called the as-is system) and what is going
to be done (called the to-be system)
3. Statement of the problem – a carefully worded statement of the problem
that led to analysis.
4. Summary of findings and recommendations- a list of the major findings
and recommendations of the study. It is ideal for the user who
requires quick access to the results of the analysis of the system
under study.
5. Conclusions followed by a list of the recommendations and a
justification for them.
6. Details of findings- an outline of the methods and procedures
undertaken by the existing system followed by coverage of the
objectives and procedures of the candidate system.
7. Discussions of output reports, file structures, and costs and benefits
of the candidate system.
8. Recommendations and conclusions- specific recommendations regarding
the candidate system including personnel assignments, costs, project
schedules, and target dates.

The main goal of feasibility study is not to solve the problem but to
achieve the scope. In the process of feasibility study, the cost and
benefits are estimated with greater accuracy to find the Return on
Investment (ROI). This also defines the resources needed to complete the
de-tailed investigation.

After management reviews the proposal, it becomes a formal agreement that

paves the way for actual design and implementations. This is a crucial
decision point in the life cycle. Many projects die here, whereas the more
promising ones continue through implementations. Changes in the proposal
are made in writing, depending on the complexity size, and cost of the
project. It is simply common sense to verify changes before committing the
project design.

Some of the core functions addressed during this feasibility assessment

include
 Business purpose
 Benefit/cost analysis (pay back)
 Legal and regulatory issues
 Training issues
 Scope and detail
SELECTION

Several alternatives usually prove to be feasible. The most feasible

solution is chosen or selected after further considerations. The selection
phase outputs a formal systems proposal to the end-users who will usually
make the final decision. The approved systems proposal is input into the
next phase.

Scoring models
Scoring models can take on many forms, including questionnaires,
checklists, and complex models where weights are combined with scores. An
example of a simple weighted questionnaire is shown below:

The first column in this chart shows the weight the selection
committee has assigned to each of the selection factors. The first
entry determines whether the project will adequately address the problem or
issue stated in the business justification section of the project concept
document. Points in this case are assigned a value of 0–100. The first
factor was given 90 points. The weight for this factor is 25 percent,
making the final score 22.50 (90 points × 0.25). Each factor is assigned
points, and the total score is calculated by adding all the scores
together. Finally, all the forms are collected and all selection
committee scores are added together for a final overall score for
the project.

Selection can take several forms. Perhaps the selection committee feels
that one of the factors is so important; say the customer
satisfaction factor, that scores lower than 20 are an automatic
rejection. Along the same lines, another method might look at total score.
All projects with scores that fall below a certain number are automatically
rejected. If the committee is choosing between projects of similar size
and scope, projects with the highest score will be chosen.
Selection methods can also be used to prioritize projects. Financial
calculations and scores can be used to rank projects in the order of most
profitable, highest return, or greatest potential for market penetration,
for instance.

Every organization has powerful members who seem to get what they want when
they want it. There's some dynamic at work here that no one can explain,
but if this particular person says, "I want Project A," Project A
gets done (unless it is wildly out of the realm of possibility).
While your selection committee may use several methods, or combinations
of methods, to select projects, don't underestimate the political
pull of some managers to get projects approved without much fanfare—maybe
even without the approval of the selection committee.

Other Selection Criteria

Scores and financial impacts might be a big part of the picture, but there
are other factors that should be taken into consideration when selecting
projects as well. In fact, some of the things we’ll talk about here could
easily be added to a weighted scoring model and rated for selection
purposes.

Strategic Plans Project requestors should be conscious

of the overall strategic mission of the
company prior to submitting a project
proposal. Selection committees use adherence
to strategic plans as one of the criteria in
their project selection models as well.

Risks and Impacts Be aware of the risk and impacts to the

company and the risk-tolerance levels of
the organization when submitting projects
for selection. A project that puts the
company at risk financially will more than
likely not be selected.

Constraints: Constraints limit the actions of the project

team. Organizations may have pre-established
guidelines (constraints) for Project work
estimates, budgets, and resource commitments.
 For example, perhaps the organization will
not take on any project work internally with
completion estimates longer than one year.

Other constraints may include things such as:

1. Priority conflicts with other projects already in progress

2. Actions or outcomes that would violate laws, Regulations, or company
policies
3. Lack of skills in the technologies needed to create the product of the
project.

PROJECT MANAGEMENT
Once the project is approved, it enters project management. During project
management, the project manager creates a work plan, staffs the projects, and
puts techniques in place to help the project team control and direct the
project through the entire SDLC. The deliverable for project management is
a project plan that describes how the project team will go about developing
the system.

REQUIREMENT ENGINEERING/ANALYSIS

System Analysis is a detailed study of the various operations performed by

a system and their relationships within and outside of the system in order
to obtain requirements and structure/specify such requirements through
models.

Systems analysis involves:

 Collecting factual data
 Understanding processes
 Identifying problems and Recommending feasible suggestions for
improving the system functioning.
Through:
 Gathering operational data
 Studying the business processes and Understanding the information
flow
 Finding out bottlenecks and evolving solutions for overcoming the
weaknesses of the system so as to achieve the organizational goals.

System Analysis also includes sub-dividing of complex process involving the

entire system, identification of data store and manual processes.
The major objectives of systems analysis are to find answers for each
business process:

 What is being done

 How is it being done
 Who is doing it?
 When is he doing it?
 Why is it being done and
 How can it be improved?

It is more of a thinking process and involves the creative skills of the

System Analyst. It attempts to give birth to a new efficient system that
satisfies the current needs of the user and has scope for future growth
within the organizational constraints.

All problems, opportunities, directives and outcomes of feasibility that

trigger the development of a system end up in requirements.

REQUIREMENT

A requirement is a feature of the system or a description of something the system

is expected to do or capable of doing in order to fulfill the system’s purpose.

They are the descriptions of what the system should do—the services that it
provides and the constraints on its operation. These requirements reflect the needs
of customers for a system that serves a certain purpose such as controlling a
device, placing an order, or finding information. The process of finding out,
analyzing, documenting and checking these services and constraints is called
requirements engineering (RE)

Problems

Opportunities Project request Feasibility Requirements

Directives

The manner in which a systems investigation is conducted will determine whether the
appropriate information is gathered. In turn, having the right information
influences the quality of the application that follows. In other words, good system
design, whether developed through the SDLC method, prototyping, or structured
methods, begins by documenting the current system and properly diagnosing systems
requirements.

A requirement is defined as "a condition or capability to which a system must

conform". It is simply a statement of what the system must do, what characteristic
it must have or that must be included in a new system. There are many different
kinds of requirements. It may include a way of capturing or processing data,
producing information, controlling a business activity, or supporting management.

Requirements engineering is the process of understanding and defining what services

are required from the system and identifying the constraints on the system’s
operation and development. Requirements engineering is a particularly critical
stage of the software process as errors at this stage inevitably lead to later
problems in the system design and implementation.

The requirements engineering process aims to produce an agreed requirements

document that specifies a system satisfying stakeholder requirements. Requirements
are usually presented at two levels of detail. End-users and customers need a high-
level statement of the requirements; system developers need a more detailed system
specification.

There are four main activities in the requirements engineering process:

Feasibility study: An estimate is made of whether the

identified user needs may be satisfied
using current software and hardware
technologies. The study considers whether
the proposed system will be cost-effective
from a business point of view and if it can
be developed within existing budgetary
constraints. A feasibility study should be
relatively cheap and quick. The result
 should inform the decision of whether or
not to go ahead with a more detailed
analysis.

Requirements elicitation and analysis This is the process of deriving the system
requirements through observation of
existing systems, discussions with
potential users and procurers, task
analysis, and so on. This may involve the
development of one or more system models
and prototypes that will help understand
the system to be specified.

Requirements specification: Requirements specification is the activity

of translating the information gathered
during the analysis activity into a
document that defines a set of
requirements. Two types of requirements may
be included in this document. User
requirements are abstract statements of the
system requirements for the customer and
end-user of the system; system requirements
are a more detailed description of the
functionality to be provided.

Requirements validation: This activity checks the requirements for

realism, consistency, and completeness.
During this process, errors in the
requirements document are inevitably
discovered. It must then be modified to
correct these problems.

The activities in the requirements process are not simply carried out in a strict
sequence. Requirements analysis continues during definition and specification and
new requirements come to light throughout the process. Therefore, the activities of
analysis, definition, and specification are interleaved. In agile methods, such as
extreme programming, requirements are developed incrementally according to user
priorities and the elicitation of requirements comes from users who are part of the
development team.

CHARACTERISTICS OF REQUIREMENTS

COMPLETE Each requirement must fully describe the functionality

to be delivered. A set of requirement is complete if all
 possible states, state changes, inputs, products, and
constraints are described by some requirements.

CORRECT Each requirement must accurately describe the

functionality to be built. That is, they are without
error.

REAL/FEASIBLE It must be possible to implement each requirement within

the known capabilities and limitations of the system and
its environment.

CONSISTENT/UNAMBIGUOUS The requirements must not conflict. It must be possible

to satisfy them simultaneously. All readers of the
requirement statement should arrive at a single,
consistent interpretation

NEEDED/NECESSARY Each requirement should document something that the

customer really need or something that is required for
conformance to an external system requirement or
standard.

PRIORITIZED An implementation priority must be assigned to each

requirement, feature or use case to indicate how
essential it is to a particular product release.

VERIFIABLE We must be able to devise a test or other verification

approaches such as inspection or demonstration, to
determine whether the requirement was properly
implemented.

TRACEABLE One should be able to link each requirement to its

origin and to the design elements, source code, and test
cases that implement and verify the correct
implementation of the requirement.

MODIFIABLE One must be able to revise the software requirement

specification when necessary and maintain a history of
changes made to each requirement.

TYPES OF REQUIREMENTS:
One way of categorizing them is described as the FURPS+ model, using the
acronym FURPS to describe the major categories of requirements with subcategories
as shown below.
  Functionality
 Usability
 Reliability
 Performance
 Supportability

The "+" in FURPS+ includes additional requirements such as:

 Design constraints
 Implementation requirements
 Interface requirements
 Physical requirements

Functionality  The function of the system

 How the system will execute the function
 Modes of operation
 System update
 Constraints: speed, throughput, response time

Usability  Users and number of users

 Skill level of users
 User Training requirements
 User friendliness of system
 Misuse & abuse of system

Reliability

Performance

Supportability  Design change incorporation

 Maintenance & error correction
 Efficiency measures in resource usage & response time.
 Ease of system relocation

Documentation:
 Required quantity & quality of documentation
  Documentation format: online, book or both
 Type of documentation
 Audience

Design
constraints

Implementation
requirements

Interface  Source of input

requirements  Destination of input
 Data format

Physical  Location of equipment

requirements  Number of locations
 Environmental restrictions: Temperature, magnetic
interference …

Data:  Data format for input & output

 Accuracy & precision
 System data flow
 Frequency & duration of data retention, input & output

Resources:  Required personnel, materials or other resources.

 Skills
 Physical space
 Power, heating & air conditioning
 Financial constraints

Security:  Access control

 Data protection & back-up
  Software environment
 Fire, water damage or theft

Quality  Requirements for reliability, availability, security, and

Assurance: other quality attributes.
 Fault detection and isolation
 Failures
 Design change incorporation
 Maintenance & error correction
 Efficiency measures in resource usage & response time.
 Ease of system relocation

LEVELS OF REQUIREMENTS

Software requirements are defined at various levels of detail and granularity.

Requirements at different levels of detail also mean to serve different purposes.

Domain requirements: Domain requirements are derived from the

application domain of the system rather than from
the specific needs of system users. They may be
new functional requirements in their own right,
constrain existing functional requirements, or set
out how particular computations must be carried
out. The problem with domain requirements is that
software engineers may not understand the
characteristics of the domain in which the system
operates. They often cannot tell whether or not a
domain requirement has been missed out or
conflicts with other requirements.

Business: These are used to state high-level business

objective of the organization or customer
requesting the system or product. During analysis,
requirements are written from the perspective of
the businessperson, and they focus on the “what”
of the system. They focus on business user needs,
so they usually are called business requirements.
They are used to document main system features and
functionalities without going into details. They
 are captured in a document describing the project
vision and scope

User: User requirements add further detail to the

business requirements. They are called user
requirements because they are written from the
user's perspective and the focus of the user
requirements describe tasks the user must be able
to accomplish in order to fulfill the above
stated business requirement. They are captured in
the requirement definition document.

System/Functional: These are statements of services the system should

provide, how the system should react to particular
inputs, and how the system should behave in
particular situations. In some cases, the
functional requirements may also explicitly state
what the system should not do.

This brings in the system's view and defines from

the system's perspective the functionality the
developers must build into the product t enable
users to accomplish their tasks stated in the user
requirements-thereby satisfying the business
requirements.

In design, business requirements evolve to become

more technical, and they describe “how” the system
will be implemented. Requirements in design are
written from the developer’s perspective, and they
usually are called system requirements.

There is no black-and-white line dividing a

business requirement and a system requirement—and
some companies use the terms interchangeably. The
important thing to remember is that a requirement
is a statement of what the system must do, and
requirements will change over time as the project
moves from analysis to design to implementation.
Requirements evolve from detailed statements of
the business capabilities that a system should
have to detailed statements of the technical way
in which the capabilities will be implemented in
the new system.
 Requirements can be either functional or
nonfunctional in nature. A functional requirement
relates directly to a process the system has to
perform or information it needs to contain. For
example, requirements that state that the system
must have the ability to search for available
inventory or to report actual and budgeted
expenses are functional requirements.

All functional requirements must derive from user

requirement, which must themselves be aligned with
the business requirements.

Non-Functional: These are constraints on the services or functions

offered by the system. They include timing
constraints, constraints on the development
process, and constraints imposed by standards.

The requirement document should not only describe

the functionality needed and provided by the
system, but it must also specify the constraints
under which it must operate. Constraints are
restrictions that are placed on the choices
available to the developer for design and
construction of the software product. These kinds
of requirements are called Non-functional
requirements. These are used to describe external
system interfaces, design and implementation
constraints, quality and performance attributes.
These also include regulations, standards, and
contracts to which the product must conform.

Non-functional requirements play a significant

role in the development of the system. If not
captured properly, the system May not fulfill some
of the business needs and may collapse. They
dictate how the system architecture and framework
would be. As an example, we can require the
software to run on Sun Solaris Platform. Now it is
clear that if the non-functional requirement was
not captured initially and the entire set of
functionality was built to run on Windows, the
system would be useless for the client.
 Nonfunctional requirements refer to behavioral
properties that the system must have, such as
performance and usability. The ability to access
the system using a Web browser would be considered
a nonfunctional requirement. Nonfunctional
requirements may influence the rest of analysis
but often do so only indirectly; nonfunctional
requirements are primarily used in design when
decisions are made about the user interface, the
hardware and software, and the system’s underlying
physical architecture.

Non-functional requirements arise through user

needs, because of budget constraints,
organizational policies, the need for
interoperability with other software or hardware
systems, or external factors such as safety
regulations or privacy legislation, hardware
systems, or external factors such as safety
regulations or privacy legislation

Types of non-functional requirement

Product These requirements specify or constrain the behavior of the

requirements system. Examples include performance requirements on how fast
the system must execute and how much memory it requires,
reliability requirements that set out the acceptable failure
rate, security requirements, and usability requirements.

Organizational These requirements are broad system requirements derived from

requirements policies and procedures in the customer’s and developer’s
organization. Examples include operational process requirements
that define how the system will be used, development process
requirements that specify the programming language, the
development environment or process standards to be used, and
environmental requirements that specify the operating
environment of the system.

External This broad heading covers all requirements that are derived from
requirements factors external to the system and its development process.
These may include regulatory requirements that set out what must
 be done for the sys-tem to be approved for use by a regulator,
such as a central bank; legislative requirements that must be
followed to ensure that the system operates within the law; and
ethical requirements that ensure that the system will be
acceptable to its users and the general public.

Operational The physical and technical  The system should be able to fit
environments in which the in a pocket or purse.
system will operate  The system should be able to
integrate with the existing
inventory system
 The system should be able to
work on any Web browse

Performance The speed, capacity, and  Any interaction between the user
reliability of the system and the system should not exceed
2 seconds
 The system should receive updated
inventory information every 15
minutes
 The system should be available
for use 24 hours per day, 365
days per year v

Security Who has authorized access to  Only direct managers can see
the system under what personnel records of staff.
circumstances  Customers can only see their
order history during business
hours.

Cultural and Cultural, political factors  The system should be able to

Political and legal requirements that distinguish between Nigerian and
affect the system Ghanaian currency.
 Company policy says that we only
buy computers from Dell
 Country managers are permitted to
authorize customer user
interfaces within their units
 The system shall comply with
insurance industry standards

Metrics for specifying non-functional requirements

Property Measure

Speed  Processed transactions/second

 User/event response time
 Screen refresh time

Size  Mbytes
 Number of ROM chips

Ease of use  Training time

 Number of help frames

Reliability  Mean time to failure

 Probability of unavailability
 Rate of failure occurrence
 Availability

Robustness  Time to restart after failure

 Percentage of events causing failure
 Probability of data corruption on failure

Portability  Percentage of target dependent statements

 Number of target systems

In reality, the distinction between different types of requirement is not as clear-

cut as these simple definitions suggest. A user requirement concerned with
security, such as a statement limiting access to authorized users, may appear to be
a non-functional requirement. However, when developed in more detail, this
requirement may generate other requirements that are clearly functional, such as
the need to include user authentication facilities in the system. This shows that
requirements are not independent and that one requirement often generates or
constrains other requirements. Non-functional requirements such as reliability,
safety, and confidentiality requirements are particularly important for critical
systems.
It must be noted that during the requirement process, we are in the definition
phase of the software development where the focus is on what and not how.
Therefore, requirements must not include design or implementation details

Viewpoints and Concerns

Non-functional requirements often conflict and interact with other functional or

non-functional requirements. It is difficult, in practice, to separate functional
and non-functional requirements in the requirements document. If the non-functional
requirements are stated separately from the functional requirements, the
relationships between them may be hard to understand. A user requirement
concerned with security, such as a statement limiting access to authorized users,
may appear to be a non-functional requirement. However, when developed in more
detail, this requirement may generate other requirements that are clearly
functional

In most large systems, the relationships between the requirements and the program
components are complex. A single requirement may be implemented by a number of
components and each component may include elements of several requirements
(functional or non-functional). In practice, this means that implementing a change
to the requirements may involve understanding and changing several components.
Alternatively, a component may provide some core functionality but also include
code that implements several system requirements.

A viewpoint is (way of collecting and organizing) a set of requirements from a

group of stakeholders who have something in common. Viewpoints reflect the distinct
functionality that is required by different stakeholder groups.

Viewpoints might come from end-users, managers, stakeholders, application domain,

other systems that interact with the system being specified etc. All of these must
be considered during the requirements elicitation process.

These different requirements sources can all be represented as system viewpoints

with each viewpoint showing a subset of the requirements for the system.
Each viewpoint therefore includes a set of system requirements. Different
viewpoints on a problem see the problem in different ways. However, their
perspectives are not completely independent but usually overlap so that they have
common requirements.

These viewpoints can be used:

1. To structure both the discovery and the documentation of the system
requirements
2. For identifying the people who can provide information about their
requirements and structure the requirements for analysis.
It is hard to pin down what is actually meant by a concern. Sometimes it is defined
as a functional notion (i.e., a concern is some element of functionality in a
system). Alternatively, it may be defined very broadly as ‘any piece of interest or
focus in a program’. Neither of these definitions is particularly useful in
practice. Concerns certainly are more than simply functional elements but the more
general definition is so vague that it is practically useless. Most attempts to
define concerns are problematic because they attempt to relate concerns to
programs.

Concerns are reflections of the system requirements and priorities of stakeholders

in the system. System performance may be a concern because users want to have a
rapid response from a system; some stakeholders may be concerned that the system
should include particular functionality; companies who are supporting a system may
be concerned that it is easy to maintain. A concern can therefore be defined as
something that is of interest or significance to a stakeholder or a group of
stakeholders.

There are several different types of stakeholder concern:

Functional concerns Related to the specific functionality to be included in a

system. For example, in a train control system, a specific
functional concern is train braking.

Quality of service Related to the non-functional behavior of a system. These

concerns include characteristics such as performance, reliability,
and availability.

Policy concerns Related to the overall policies that governs the use of a
system. Policy concerns include security and safety
concerns and concerns related to business rules.

System concerns Related to attributes of the system as a whole, such as

its maintainability or its configurability.

Organizational Related to organizational goals and priorities. These

concerns include producing a system within budget, making use of
existing software assets, and maintaining the reputation
of the organization

Core and cross-cutting concerns

The core concerns of a system are those functional concerns that relate to its
primary purpose. Therefore, for an Internet banking system, this system has
requirements relating to new customers such as credit checking and addresses
verification. It also has requirements related to the management of existing
customers and the management of customer accounts. All of these are core concerns
that are associated with the system’s primary purpose—the provision of an Internet
banking service.

However, the system also has security requirements based on the bank’s security
policy, and recovery requirements to ensure that data is not lost in the event of a
system failure. These are cross-cutting concerns as they may influence the
implementation of all of the other system requirements.

In addition to core concerns, large systems also have secondary functional

concerns. These may involve functionality that shares information with the core
concerns, or which is required so that the system can satisfy its non-functional
requirements.

In addition to these secondary concerns, other concerns such as quality of service

and organizational policies reflect essential system requirements. In general,
these are system concerns—they apply to the system as a whole rather than to
individual requirements or to the realization of these requirements in a program.
These are called cross-cutting concerns to distinguish them from core concerns.
Secondary functional concerns may also be cross-cutting although they do not always
cross-cut the entire system; rather, they are associated with groupings of core
concerns that provide related functionality.

Programming language abstractions, such as procedures and classes, are the

mechanism that you normally use to organize and structure the core concerns of a
system. However, the implementation of the core concerns in conventional
programming languages usually includes additional code to implement the cross-
cutting, functional, quality of service, and policy concerns. This leads to two
undesirable phenomena: tangling and scattering

Tangling and Scattering

Tangling occurs when a module in a system includes code that implements
different system requirements.
The figure is an implementation of the put operation that adds an item for the
buffer. However, if the buffer is full, it has to wait until a corresponding get
operation removes an item from the buffer. The details are unimportant; essentially
the wait () and notify () calls are used to synchronize the put and get operations.

The code supporting the primary concern (in this case, putting a record into the
buffer), is tangled with code implementing synchronization. Synchronization code,
which is associated with the secondary concern of ensuring mutual exclusion, has to
be included in all methods that access the shared buffer. Code associated with the
synchronization concern is shown as shaded code

Scattering occurs when the implementation of a single concern (a logical

requirement or set of requirements) is scattered across several components in a
program. This is likely to occur when requirements related to secondary functional
concerns or policy concerns are implemented.

The figure illustrated this: This diagram shows examples of three classes that
might be included in a patient record system along with some of the core methods
for managing patient information. The shaded area shows the methods that are
required to implement the secondary statistics concern. You can see that this
statistics concern is scattered throughout the other core concerns.
Problems with scattering and tangling occur when the initial system requirements
change. For example, say new statistical data had to be collected in the patient
record system. The changes to the system are not all located in one place and so
you have to spend time looking for the components in the system that have to be
changed. You then have to change each of these components to incorporate the
required changes. This may be expensive because of the time required to analyze the
components and then make and test the changes. There is always the possibility that
you will miss some code that should be changed and so the statistics will
be incorrect. Furthermore, as several changes have to be made, this increases the
chances that you will make a mistake and introduce errors into the software.

Cross-cutting viewpoints and concerns

However, there are also requirements which cross-cut all viewpoints, as shown
below:

This diagram shows that viewpoints may be of different types but cross-cutting
concerns (such as regulation, dependability, and security) generate requirements
that may impact on all of the system viewpoints.

When designing a system that supports different stakeholder concerns, think of a

system that supports different stakeholder concerns as a core system plus
extensions.

Ext 1 Ext 2 Ext 3

Ext 4 Core system Ext 5

Ext 6 Ext 7 Ext 8

The core system is a set of system features that implements the essential purpose
of a system. Therefore, if the purpose of a particular system is to maintain
information on patients in a hospital, then the core system provides a means of
creating, editing, managing, and accessing a database of patient records.

System purpose Core system functions Extended functions

Maintain  Creating  Confidentiality

information on  Editing  Access Control
patients  Managing  Encryption
 Accessing

The extensions to the core system reflect additional stakeholder concerns, which
must be integrated with the core system. For example, it is important that a
medical information system maintains the confidentiality of patient information, so
one extension might be concerned with access control, another with encryption, etc.

Extensions always add some kind of functionality or additional features to the core
system. Aspects are a way to implement these extensions and they can be com-posed
with the core system functionality using the weaving facilities in the aspect-
oriented programming environment

Types of extensions

Secondary functional These add additional capabilities to the functionality

extensions provided in the core system. For instance, the production of
reports on the drugs prescribed in the previous month would
be a secondary functional extension to a patient information
system.

Policy extensions These add functional capabilities to support organizational

policies. Extensions that add security features are examples
of policy extensions.

QoS extensions These add functional capabilities to help attain the quality
of service requirements that have been specified for the
system. For example, an extension might implement a cache to
reduce the number of database accesses or automated backups
for recovery in the event of a system failure.

Infrastructure These extensions add functional capabilities to support the

extensions implementation of a system on some specific implementation
platform. For example, in a patient information system,
infrastructure extensions might be used to implement the
interface to the underlying database management system.
Changes to this interface can be made by modifying the
 associated infrastructure extensions

To develop a system that is organized in the style shown in Figure above, you
should identify requirements for the core system plus the requirements for the
system extensions.

A viewpoint-oriented approach to requirements engineering organizes the

requirements according to stakeholder viewpoint, you can then analyze them to
discover related requirements that appear in all or most viewpoints. These
represent the core functionality of the system. Other viewpoint requirements may be
requirements that are specific to that viewpoint. These can be implemented as
extensions to the core functionality

For example, imagine that you are developing a software system to keep track of
specialized equipment used by the emergency services. Equipment is located at
different places across a region or state and, in the event of an emergency such as
a flood or earthquake; the emergency services use the system to discover what
equipment is available close to the site of the problem. The table below outlines
requirements from three possible viewpoints for such a system

You can see from this example that stakeholders from all of the different view-
points need to be able to find specific items of equipment, browse the equipment
available at each location, and check in/check-out equipment from the store. These
are therefore requirements for the core system.
The secondary requirements support the more specific needs of each viewpoint. There
are secondary requirements for system extensions supporting equipment use,
management, and maintenance. The secondary functional requirements that are
identified from any one viewpoint do not, necessarily, cross-cut the requirements
from other viewpoints. For example, only the maintenance viewpoint is interested in
completing maintenance records. These requirements reflect the needs of that
viewpoint and those concerns may not be shared with other viewpoints.

In addition to the secondary functional requirements, however, there are cross-

cutting concerns that generate requirements of importance to some or all
viewpoints. These often reflect policy and quality of service requirements that
apply to the system as a whole. These are non-functional requirements such as
requirements for security, performance, and cost. In the equipment inventory
system, an example of a cross-cutting concern is system availability. Emergencies
may happen with little or no warning. Saving lives may require essential equipment
to be deployed as quickly as possible. Therefore, the dependability requirements
for the equipment inventory system include requirements for a high level of system
availability. Some examples of these dependability requirements, with associated
rationale, are shown below.

Using these requirements, you can then identify extensions to the core
functionality for transaction logging and status reporting. These make it easier to
identify problems and switch to a backup system.

The outcome of the requirements engineering process should be a set of requirements

that are structured around the notion of a core system plus extensions. For
example, in the inventory system, examples of core requirements might be:

C.1 The system shall allow authorized users to view the description
of any item of equipment in the emergency services inventory.

C.2 The system shall include a search facility to allow authorized

users to either individual inventories or the complete
inventory for a specific item of equipment or a specific type
of equipment. The system may also include an extension that is
intended to support equipment procurement and replacement.
Requirements for this extension might be:

E1.1 It shall be possible for authorized users to place orders with

accredited suppliers for replacement items of equipment.

E1.1.1 When an item of equipment is ordered, it should be allocated to

a specific inventory and flagged in that inventory as ‘on
order’.

As a general rule, you should avoid having too many concerns or extensions to the
system. These simply confuse the reader and may lead to premature design. This
limits the freedom of designers and may result in a system design that cannot meet
its quality of service requirements.

PRACTICALS

Analysis strategy development

[Planning]

Requirements determination 1. Anticipation

2. Investigation, elicitation and gathering

Requirements analysis 1. Discovery

2. Classification and organization
3. Prioritization and negotiation

Requirements definition
and Specification
Requirement Documentation

Requirement validation and

verification
Requirement management
ANALYSIS STRATEGY DEVELOPMENT
Before the project team can determine what requirements are appropriate for a given
system, they need to have a clear vision of the kind of system that will be
created, and the level of change that it will bring to the organization.

The basic process of analysis is divided into three steps:

1. Understanding the as-is system
2. Identifying improvements
3. Developing requirements for the to-be system

Sometimes the first step (i.e., understanding the as-is system) is skipped or done
in a cursory manner. This happens when no current system exists, if the existing
system and processes are irrelevant to the future system, or if the project team is
using a RAD or agile development methodology in which the as-is system is not
emphasized.

Users of traditional design methods such as waterfall and parallel development

typically spend significant time understanding the as-is system and identifying
improvements before moving to capture requirements for the to-be system. However,
newer RAD, agile, and object-oriented methodologies, such as phased development,
prototyping, throwaway prototyping, and extreme programming focus almost
exclusively on improvements and the to-be system requirements, and they spend
little time investigating the current as-is system.

ANALYSIS STRATEGY DEVELOPMENT TECHNIQUES

Business process automation, business process improvement, or business process
reengineering—help the analyst lead users through the analysis steps so that the
vision of the system can be developed

The choice of technique used is based on the amount of change the system is meant
to create in the organization.

BPA is based on small change that improves

BUSINESS PROCESS AUTOMATION
process efficiency
BPI creates process improvements that lead to
BUSINESS PROCESS IMPROVEMENT
better effectiveness
BUSINESS PROCESS REENGINEERING BPR revamps the way things work so that the
 organization is transformed on some level
BPE creates a new system when no current system
BUSINESS PROCESS ENGINEERING
exists
PRODUCT ENGINEERING PE

To move the users “from here to there,” an analyst needs strong critical thinking
skills. Critical thinking is the ability to recognize strengths and weaknesses and
recast an idea in an improved form, and they are needed to really understand issues
and develop new business processes. These skills are needed to thoroughly examine
the results of requirements gathering, to identify business requirements, and to
translate those requirements into a concept for the new system.
Business Process Automation
Business process automation (BPA) means leaving the basic way in which the
organization operates unchanged, and using computer technology to do some of the
work. BPA can make the organization more efficient but has the least impact on the
business.

BPA projects spend a significant time understanding the current as-is system before
moving on to improvements and to-be system requirements. Problem analysis and root
cause analysis are two popular BPA techniques.

BPA techniques
1. Problem analysis
2. Root Cause Analysis

Problem analysis
It is an act of reasoning and analysis to find "the problem behind the problem". It
means asking the users and managers to identify problems with the as-is system and
to describe how to solve them in the to-be system. Problem analysis is done to
understand problems, initial stakeholder needs, and propose high-level solutions.

During problem analysis, agreement is gained on the real problem(s), and who the
stakeholders are. Also, you define what from a business perspective are the
boundaries of the solution, as well as business constraints on the
solution. You should also have analyzed the business case for the project so that
there is a good understanding of what return is expected on the investment made in
the system being built.

Most users have a very good idea of the changes they would like to see, and most
will be quite vocal about suggesting them. Most changes tend to solve problems
rather than capitalize on opportunities, but this is possible, too. Improvements
from problem analysis tend to be small and incremental (e.g., provide more space in
which to type the customer’s address; provide a new report that currently does not
exist). This type of improvement often is very effective at improving a system’s
efficiency or ease of use. However, it often provides only minor improvements in
business value—the new system is better than the old, but it may be hard to
identify significant monetary benefits from the new system

Root Cause Analysis

The ideas produced by problem analysis tend to be solutions to problems. All
solutions make assumptions about the nature of the problem, assumptions that may or
may not be valid. Users (and most people in general) tend to jump quickly to
solutions without fully considering the nature of the problem. Sometimes the
solutions are appropriate, but many times they address a symptom of the problem,
not the true problem or root cause itself. For example, suppose you notice that a
light bulb is burned out above your front door. You buy a new bulb, get out a
ladder, and replace the bulb. A month later, you see that the same bulb is burnt
out, so you buy a new bulb, haul out the ladder, and replace it again. This repeats
itself several times. At this point, you have two choices. You can buy a large
package of light bulbs and a fancy light bulb changer on a long pole so you don’t
need to haul the ladder out each time (thus saving a lot of trips to the store for
new bulbs and a lot of effort in working with the ladder). Or you can fix the light
fixture that is causing the light to burn out in the first place. Buying the bulb
changer is treating the symptom (the burnt-out bulb), while fixing the fixture is
treating the root cause

In the business world, the challenge lies in identifying the root cause. The
solutions that users propose (or systems that analysts think of) may either address
symptoms or root causes, but without a careful analysis, it is difficult to tell
which one.

Root cause analysis focuses on problems, not solutions. The analyst starts by
having the users generate a list of problems with the current system, and then
prioritize the problems in order of importance. Then starting with the most
important, the users and/or the analysts generate all the possible root causes for
the problems. Each possible root cause is investigated (starting with the most
likely or easiest to check) until the true root cause(s) are identified. If any
possible root causes are identified for several problems, those should be
investigated first, because there is a good chance they are the real root causes
influencing the symptom problems.

In our light bulb example, there are several possible root causes. A decision tree
sometimes helps with the analysis. As the Figure shows, there are many possible
root causes, so buying a new fixture may or may not address the true root cause. In
fact, buying a light-bulb changer may actually address the root cause. The key
point in root cause analysis is to always challenge the obvious.
Business Process Improvement
Business process improvement (BPI) means making moderate changes to the way in
which the organization operates to take advantage of new opportunities offered by
technology or to copy what competitors are doing. BPI can improve efficiency (i.e.,
doing things right) and improve effectiveness (i.e., doing the right things).

BPI projects also spend time understanding the as-is system, but much less time
than BPA projects; their primary focus is on improving business processes, so time
is spent on the as-is only to help with the improvement analyses and the to-be
system requirements.

BPI techniques
Three popular BPI activities are:

1. Duration analysis,
2. Activity-based costing
3. Information benchmarking

Duration Analysis (Time-based costing)

Duration analysis requires a detailed examination of the amount of time it takes to
perform each process in the current as-is system. The analysts begin by determining
the total amount of time it takes, on average, to perform a set of business
processes for a typical input. They then time each of the individual steps (or sub-
processes) in the business process. The time to complete the basic steps are then
totaled and compared to the total for the overall process. When there is a
significant difference between the two, this indicates that this part of the
process is badly in need of a major overhaul.

For example, suppose that the analysts are working on a home mortgage system and
discover that on average, it takes thirty days for the bank to approve a mortgage.
They then look at each of the basic steps in the process (e.g., data entry, credit
check, title search, appraisal, etc.) and find that the total amount of time
actually spent on each mortgage is about eight hours. This is a strong indication
that the overall process is badly broken, because it takes thirty days to perform
one day’s work.

Process fragmentation, integration and parallelization

These problems likely occur because the process is badly fragmented. Many different
people must perform different activities before the process finishes. In the
mortgage example, the application probably sits on many peoples’ desks for long
periods of time before it is processed. Processes in which many different people
work on small parts of the inputs are prime candidates for process integration or
parallelization.

Process integration means changing the fundamental process so that fewer people
work on the input, which often requires changing the
processes and retraining staff to perform a wider range
of duties.

Process parallelization means changing the process so that all the individual
steps are performed at the same time. For example in the
mortgage application example, there is probably no
reason that the credit check cannot be performed at the
same time as the appraisal and title check

Activity-Based Costing
Activity-based costing is a similar analysis that examines the cost of each major
process or step in a business process rather than the time taken. The analysts
identify the costs associated with each of the basic functional steps or processes,
identify the most costly processes, and focus their improvement efforts on them.
Assigning costs is conceptually simple. You just examine the direct cost of labor
and materials for each input. Materials costs are easily assigned in a
manufacturing process, while labor costs are usually calculated based on the amount
of time spent on the input and the hourly cost of the staff. However, as you may
recall from a managerial accounting course, there are indirect costs such as rent,
depreciation, and so on that also can be included in activity costs.

Informal Benchmarking
Benchmarking refers to studying how other organizations perform a business process
in order to learn how your organization can do something better. Benchmarking helps
the organization by introducing ideas that employees may never have considered, but
have the potential to add value.

Informal benchmarking is fairly common for “customer-facing” business processes

(i.e., those processes that interact with the customer). With informal
benchmarking, the managers and analysts think about other organizations, or visit
them as customers to watch how the business process is performed. In many cases,
the business studied may be a known leader in the industry or simply a related
firm. For example, suppose the team is developing a Web site for a car dealer. The
project sponsor, key managers, and key team members would likely visit the Web
sites of competitors, as well as those of others in the car industry (e.g.,
manufacturers, accessories suppliers) and those in other industries that have won
awards for their Web sites

Business Process Reengineering

Business process reengineering (BPR) means changing the fundamental way in which
the organization operates— completely eliminating the current way of doing business
and making major changes to take advantage of new ideas and new technology.

BPR projects spend little time understanding the as-is, because their goal is to
focus on new ideas and new ways of doing business.

BPR techniques
1. Outcome analysis
2. Technology analysis
3. Activity elimination

Outcome Analysis
Outcome analysis focuses on understanding the fundamental outcomes that provide
value to customers. It determines what the organization’s products and services
enable the customers to do and what effective and efficient ways they could enable
the customer to do such things.

Technology Analysis
Many major changes in business over the past decade have been enabled by new
technologies. Technology analysis therefore starts by having the analysts and
managers develop a list of important and interesting technologies. Then the group
systematically identifies how each and every technology could be applied to the
business process and identifies how the business would benefit.
Activity Elimination Activity
The analysts and managers work together to identify how the organization could
eliminate each and every activity in the business process, how the function could
operate without it, and what effects are likely to occur.

Business Process Engineering

Business process engineering is one approach for creating an overall plan for
implementing the computing architecture. The goal of business process engineering
(BPE) is to define architectures that will enable a business to use information
effectively.

This is done when no current system exists, if the existing system and processes
are irrelevant to the future system, or if the project team is using a RAD or agile
development methodology in which the as-is system is not emphasized.

Three different architectures must be analyzed and designed within the context of
business objectives and goals:

1. Data architecture
2. Applications architecture
3. Technology infrastructure

The data architecture: provides a framework for the information needs of

a business or business function. The individual
building blocks of the architecture are the data
objects that are used by the business. A data
object contains a set of attributes that define
some aspect, quality, characteristic, or
descriptor of the data that are being described.

Once a set of data objects is defined, their

relationships are identified. A relationship
indicates how objects are connected to one
another.

The data objects (there may be hundreds or even

thousands for a major business activity) flow
between business functions, are organized within a
database, and are transformed to provide
information that serves the needs of the business.

The application architecture: encompasses those elements of a system that

transform objects within the data architecture for
some business purpose. They include the system of
 programs (software) that performs this
transformation, the role of people (who are
information transformers and users) and business
procedures that have not been automated.

The technology infrastructure: provides the foundation for the data and
application architectures. The infrastructure
encompasses the hardware and software that are
used to support the application and data. This
includes computers, operating systems, networks,
telecommunication links, storage technologies, and
the architecture (e.g., client/server) that has
been designed to implement these technologies.

BPE techniques
1. Information strategy planning (ISP)
2. Business area (domain) analysis (BAA)
3. Business system design (BSD)
4. Construction and integration

Information strategy planning (ISP)

ISP views the entire business as an entity and isolates the domains of the business
(e.g., engineering, manufacturing, marketing, finance, sales) that are important to
the overall enterprise. ISP defines the data objects that are visible at the
enterprise level, their relationships, and how they flow between the business
domains

Business area analysis

BAA is concerned with identifying in detail data (in the form of entity [data
object] types) and function requirements (in the form of processes) of selected
business areas [domains] identified during ISP and ascertaining their interactions
(in the form of matrices). It is only concerned with specifying what is required in
a business area

As the system engineer begins BAA, the focus narrows to a specific business domain.
BAA views the business area as an entity and isolates the business functions and
procedures that enable the business area to meet its objectives and goals. BAA,
like ISP, defines data objects, their relationships, and how data flow. But at this
level, these characteristics are all bounded by the business area being analyzed.
The outcome of BAA is to isolate areas of opportunity in which information systems
may support the business area.
Business system design (BSD)
Once an information system has been isolated for further development, BPE makes a
transition into software engineering. By invoking a business system design (BSD)
step, the basic requirements of a specific information system are modeled and these
requirements are translated into data architecture, applications architecture, and
technology infrastructure.

Construction and integration

Construction and integration focuses on implementation detail. The architecture and
infrastructure are implemented by constructing an appropriate database and internal
data structures, by building applications using software components, and by
selecting appropriate elements of a technology infrastructure to support the design
created during BSD. Each of these system components must then be integrated to form
a complete information system or application. The integration activity also places
the new information system into the business area context, performing all user
training and logistics support to achieve a smooth transition.

VIEW BUSINESS PROCESS OUTPUT

ENGINEERING
World BUSINESS ENTERPRISE INFORMATION STRATEGY BUSINESS AREAS (DOMAINS)
View PLANNING (ISP)
 BUSINESS  Engineering
 Manufacturing
 Education
 marketing
 Finance
 Sales

Domain BUSINESS AREA (DOMAIN) BUSINESS AREA INFORMATION SYSTEM COMPONENTS

(DOMAIN) ANALYSIS
view  Data objects
 Engineering (BAA)
 Manufacturing  Relationships between data objects
 Education  Data flow
 marketing  Business functions and procedures
 Finance
 Sales

SOFTWARE ENGINEERING:
Element INFORMATION SYSTEM SYSTEM ARCHITECTURE
COMPONENTS
view BUSINESS SYSTEM DESIGN  Data architecture
(BSD)
 Data objects  Applications architecture
 Relationships between  Technology infrastructure
data objects
 Data flow
 Business functions and
procedures

SOFTWARE ENGINEERING:
Detailed INFRASTRUCTURE
view CONSTRUCTION AND New Information System
INTEGRATION
 Database
 Internal Data Structures
 Applications
 Technology Infrastructure

Product engineering
The goal of product engineering is to translate the customer’s desire for a set of
defined capabilities into a working product. To achieve this goal, product
engineering—like business process engineering—must derive architecture and
infrastructure. The architecture encompasses four distinct system components:
software, hardware, data (and databases), and people. A support infrastructure is
established and includes the technology required to tie the components together and
the information (e.g., documents, CD-ROM, video) that is used to support the
components

PE techniques
1. Requirements engineering
2. Component engineering
3. Analysis & design modeling
4. Construction & integration

Requirements engineering
The world view is achieved through requirements engineering. The overall
requirements of the product are elicited from the customer. These requirements
encompass information and control needs, product function and behavior, overall
product performance, design and interfacing constraints, and other special needs.
Once these requirements are known, the job of requirements engineering is to
allocate function and behavior to each of the four components noted earlier.

System component engineering

System component engineering is actually a set of concurrent activities that
address each of the system components separately: software engineering, hardware
engineering, human engineering, and database engineering. Each of these engineering
disciplines takes a domain-specific view, but it is important to note that the
engineering disciplines must establish and maintain active communication with one
another. Part of the role of requirements engineering is to establish the
interfacing mechanisms that will enable this to happen

Analysis and design modeling

The element view for product engineering is the engineering discipline itself
applied to the allocated component. The analysis step models allocated requirements
into representations of data, function, and behavior. Design maps the analysis
model into data, architectural, interface, and software component-level designs.

Construction and integration

Construction and integration activities that encompass code generation, testing,
and support steps.
 VIEW PRODUCT ENGINEERING OUTPUT

World REQUIREMENT ENGINEERING: CAPABILITIES/COMPONENTS

THE COMPLETE
View
PRODUCT
(Information System)  Requirements Elicitation  Hardware
 Requirements Analysis  Software
And Negotiation  Data (and databases)
 Requirements  People
Specification
 System Modeling
 Requirements Validation
 Requirements
Management

Domain CAPABILITY/COMPONENT SYSTEM COMPONENT PROCESSING REQUIREMENTS

ENGINEERING
view  Data
 Hardware
 Function
 Software  Software Engineering
 Behavior
 Data (and databases)  Hardware Engineering
 People  Human Engineering
  Database Engineering

SYSTEM ANALYSIS AND

Element SPECIFICATIONS:
DESIGN
view  Data MODELING  Data
 Function  Function
 Behavior  Behavior

DESIGN:
  Data designs
 Architectural designs
 Interface designs
 Software component-level
designs

 Specifications CONSTRUCTION AND  PRODUCT

Detailed INTEGRATION
 Design (CBIS)
view