Management Information System Questions

————————————————- MANAGEMENT INFORMATION SYSTEM Question 1(10 Marks) Discuss five (5) challenges of Management Information System (MIS). Answers Introduction A Management Information System (MIS) provides information which is needed to manage organizations effectively. Management information systems involve three primary resources such as people, technology and information or decision making. Management information systems are distinct from other information systems in that they are used to analyze operation activities in the organization.Academically, the term is commonly used to refer to the group of information management methods tied to the automation support of human decision making, e. g. decision support systems, expert systems and executive information systems. The Challenge of Management Information System (MIS) Although information technology is advancing at a bli nding pace, there is nothing easy or mechanical about building and using information systems. There are five major challenges confronting managers: 1. The information systems investment challengeIt is obvious that one of the greatest challenges facing managers today is ensuring that their companies do indeed obtain meaningful returns on the money they spend on information systems. It’s one thing to use information technology to design, produce, deliver, and maintain new products. It’s another thing to make money doing it. How can organizations obtain a sizable payoff from their investment in information systems? How can management ensure that information systems contribute to corporate value?Senior management can be expected to ask these questions: How can we evaluate our information systems investments as we do other investments? Are we receiving the return on investment from our systems that we should? Do our competitors get more? Far too many firms still cannot answ er these questions. Their executives are likely to have trouble determining how much they actually spend on technology or how to measure the returns on their technology investments. Most companies lack a clear-cut decision-making process for eciding which technology investments to pursue and for managing those investments. 2. The strategic challenge What complementary assets are needed to use information technology effectively? Despite heavy information technology investments, many organizations are not realizing significant business value from their systems, because they lack—or fail to appreciate—the complementary assets required to make their technology assets work. The power of computer hardware and software has grown much more rapidly than the ability of organizations to apply and use this technology.To benefit fully from information technology, realize genuine productivity, and become competitive and effective, many organizations actually need to be redesigned. T hey will have to make fundamental changes in employee and management behavior, develop new work models, retire obsolete work rules, and eliminate the inefficiencies of outmoded business processes and organizational structures. New technology alone will not produce meaningful business benefits. 3. The globalization challengeHow can firms understand the requirements of a global economic environment? The rapid growth in international trade and the emergence of a global economy call for information systems that can support both producing and selling goods in many different countries. In the past, each regional office of a multinational corporation focused on solving its own unique information problems. Given language, cultural, and political differences among countries, this focus frequently resulted in chaos and the failure of central management controls.To develop integrated, multinational, information systems, businesses must develop global hardware, software, and communications stan dards; create cross-cultural accounting and reporting structures; and design transnational business processes. 4. The information technology infrastructure challenge: How can organizations develop an information technology infrastructure that can support their goals when business conditions and technologies are changing so rapidly? Many companies are saddled with expensive and unwieldy information technology platforms that cannot adapt to innovation and change.Their information systems are so complex and brittle that they act as constraints on business strategy and execution. Meeting new business and technology challenges may require redesigning the organization and building a new information technology (IT) infrastructure. Creating the IT infrastructure for a digital firm is an especially formidable task. Most companies are crippled by fragmented and incompatible computer hardware, software, telecommunications networks, and information systems that prevent information from flowing freely between different parts of the organization.Although Internet standards are solving some of these connectivity problems, creating data and computing platforms that span the enterprise—and, increasingly, link the enterprise to external business partners—is rarely as seamless as promised. Many organizations are still struggling to integrate their islands of information and technology. 5. Ethics and security challenge: The responsibility and control challenge: How can organizations ensure that their information systems are used in an ethically and socially responsible manner?How can we design information systems that people can control and understand? Although information systems have provided enormous benefits and efficiencies, they have also created new ethical and social problems and challenges. A major management challenge is to make informed decisions that are sensitive to the negative consequences of information systems as well to the positive ones. Managers face an ongoing struggle to maintain security and control. Today, the threat of unauthorized penetration or disruption of information systems has never been greater.Information systems are so essential to business, government, and daily life that organizations must take special steps to ensure their security, accuracy, and reliability. A firm invites disaster if it uses systems that can be disrupted or accessed by outsiders, that do not work as intended, or that do not deliver information in a form that people can correctly use. Information systems must be designed so that they are secure, function as intended, and so that humans can control the process. QUESTION 2 (10 Marks)Explain with example (s) one (1) of the following Enterprise Applications: a) ERP b) SCM c) CRM Answers a) ERP Introduction In 1990, Gartner Group first employed the acronym ERP as an extension of material requirements planning (MRP), later manufacturing resource planning and computer-integrated manufacturing. W ithout supplanting these terms, ERP came to represent a larger whole, reflecting the evolution of application integration beyond manufacturing. Not all ERP packages were developed from a manufacturing core.Vendors variously began with accounting, maintenance and human resources. By the mid-1990s, ERP systems addressed all core functions of an enterprise. Beyond corporations, governments and non-profit organizations also began to employ ERP systems. Enterprise Resource Planning (ERP) Enterprise Resource Planning (ERP) systems integrate internal and external management information across an entire organization, embracing finance or accounting, manufacturing, sales and service, customer relationship management, etc. ERP systems automate this activity with an integrated software application.Their purpose is to facilitate then flow of information between all business functions inside the boundaries of the organization and manage the connections to outside stakeholders. ERP systems can ru n on a variety of computer hardware and network configurations, typically employing a database as a repository for information. Characteristics ERP systems typically include the following characteristics:- * An integrated systems that operates in real time (or next to real time), without relying on periodic updates. * A common database, which supports all applications. * A consistent look and feel throughout each module. Installation of the system without elaborate application/data integration by the Information Technology (IT) department. Examples: * Finance/ Accounting : General ledger, payables, cash management, fixed assets, receivables, budgeting and consolidation. * Human Resources : payroll, training, benefits, 401K, recruiting and diversity management. * Manufacturing : Engineering, bill of materials, work orders, scheduling, capacity, workflow management, quality control, cost management, manufacturing process, manufacturing projects, manufacturing flow, activity based cost ing, product lifecycle management. Supply chain management : Order to cash, inventory, order entry, purchasing, product configurator, supply chain planning, supplier scheduling, inspection of goods, claim processing, commissions. * Project management : Costing, billing, time and expense, performance units, activity management. * Customer relationship management : Sales and marketing, commissions, service, customer contact, call center support. * Data services : Various â€Å"self–service† interfaces for customers, suppliers and/or employees. * Access control : Management of user privileges for various processes. Components:- * Transactional database Management portal/dashboard * Business intelligence system * Customizable reporting * External access via technology such as web services * Search * Document management * Messaging/chat/wiki * Workflow management Connectivity to Plant Floor Information ERP systems connect to real–time data and transaction data in a v ariety of ways. These systems are typically configured by systems integrators, who bring unique knowledge on process, equipment, and vendor solutions. Direct integration—ERP systems have connectivity (communications to plant floor equipment) as part of their product offering.This requires the vendors to offer specific support for the plant floor equipment that their customers operate. ERP vendors must be expert in their own products, and connectivity to other vendor products, including competitors. Database integration—ERP systems connect to plant floor data sources through staging tables in a database. Plant floor systems deposit the necessary information into the database. The ERP system reads the information in the table. The benefit of staging is that ERP vendors do not need to master the complexities of equipment integration. Connectivity becomes the responsibility of the systems integrator.Enterprise appliance transaction modules (EATM)—These devices commu nicate directly with plant floor equipment and with the ERP system via methods supported by the ERP system. EATM can employ a staging table, Web Services, or system–specific program interfaces (APIs). The benefit of an EATM is that it offers an off–the–shelf solution. Custom–integration solutions—Many system integrators offer custom solutions. These systems tend to have the highest level of initial integration cost, and can have a higher long term maintenance and reliability costs. Long term costs can be minimized through careful system testing and thorough documentation.Custom–integrated solutions typically run on workstation or server class computers. Implementation ERP's scope usually implies significant changes to staff work processes and practices. Generally, three types of services are available to help implement such changes—consulting, customization, and support. Implementation time depends on business size, number of modules, customization, the scope of process changes, and the readiness of the customer to take ownership for the project. Modular ERP systems can be implemented in stages. The typical project for a large enterprise consumes about 14 months and requires around 150 consultants.Small projects can require months; multinational and other large implementations can take years. Customization can substantially increase implementation times. Process preparation Implementing ERP typically requires changes in existing business processes. Poor understanding of needed process changes prior to starting implementation is a main reason for project failure. It is therefore crucial that organizations thoroughly analyze business processes before implementation. This analysis can identify opportunities for process modernization. It also enables an assessment of the alignment of current processes with those provided by the ERP system.Research indicates that the risk of business process mismatch is decreased by: * linking current processes to the organization's strategy; * analyzing the effectiveness of each process; * understanding existing automated solutions. ERP implementation is considerably more difficult (and politically charged) in decentralized organizations, because they often have different processes, business rules, data semantics, authorization hierarchies and decision centers. This may require migrating some business units before others, delaying implementation to work through the necessary changes for each unit, possibly reducing integration (e. . linking via Master data management) or customizing the system to meet specific needs. A potential disadvantage is that adopting â€Å"standard† processes can lead to a loss of competitive advantage. While this has happened, losses in one area are often offset by gains in other areas, increasing overall competitive advantage. Configuration Configuring an ERP system is largely a matter of balancing the way the customer wants t he system to work with the way it was designed to work. ERP systems typically build many changeable parameters that modify system operation.For example, an organization can select the type of inventory accounting—FIFO or LIFO—to employ, whether to recognize revenue by geographical unit, product line, or distribution channel and whether to pay for shipping costs when a customer returns a purchase. Customization ERP systems are theoretically based on industry best practices and are intended to be deployed â€Å"as is†. ERP vendors do offer customers configuration options that allow organizations to incorporate their own business rules but there are often functionality gaps remaining even after the configuration is complete.ERP customers have several options to reconcile functionality gaps, each with their own pros/cons. Technical solutions include rewriting part of the delivered functionality, writing a homegrown bolt-on/add-on module within the ERP system, or int erfacing to an external system. All three of these options are varying degrees of system customization, with the first being the most invasive and costly to maintain. Alternatively, there are non-technical options such as changing business practices and/or organizational policies to better match the delivered ERP functionality.Key differences between customization and configuration include: * Customization is always optional, whereas the software must always be configured before use (e. g. , setting up cost/profit center structures, organizational trees, purchase approval rules, etc. ) * The software was designed to handle various configurations, and behaves predictably in any allowed configuration. * The effect of configuration changes on system behavior and performance is predictable and is the responsibility of the ERP vendor. The effect of customization is less predictable, is the customer's responsibility and increases testing activities. Configuration changes survive upgrades to new software versions. Some customizations (e. g. code that uses pre–defined â€Å"hooks† that are called before/after displaying data screens) survive upgrades, though they require retesting. Other customizations (e. g. those involving changes to fundamental data structures) are overwritten during upgrades and must be re-implemented. Customization Advantages: * Improves user acceptance * Offers the potential to obtain competitive advantage vis-a-vis companies using only standard features. Customization Disadvantages: * Increases time and resources required to both implement and maintain. Inhibits seamless communication between suppliers and customers who use the same ERP system un-customized. * Over reliance on customization undermines the principles of ERP as a standardizing software platform Extensions ERP systems can be extended with third–party software. ERP vendors typically provide access to data and functionality through published interfaces. Extensio ns offer features such as:- * archiving, reporting and republishing; * capturing transactional data, e. g. using scanners, tills or RFID * access to specialized data/capabilities, such as syndicated marketing data and associated trend analytics. advanced planning and scheduling (APS) Data migration Data migration is the process of moving/copying and restructuring data from an existing system to the ERP system. Migration is critical to implementation success and requires significant planning. Unfortunately, since migration is one of the final activities before the production phase, it often receives insufficient attention. The following steps can structure migration planning: * Identify the data to be migrated * Determine migration timing * Generate the data templates * Freeze the toolset Decide on migration-related setups * Define data archiving policies and procedures. Comparison to special–purpose applications Advantages The fundamental advantage of ERP is that integrating the myriad processes by which businesses operate saves time and expense. Decisions can be made more quickly and with fewer errors. Data becomes visible across the organization. Tasks that benefit from this integration include: * Sales forecasting, which allows inventory optimization * Chronological history of every transaction through relevant data compilation in every area of operation. Order tracking, from acceptance through fulfillment * Revenue tracking, from invoice through cash receipt * Matching purchase orders (what was ordered), inventory receipts (what arrived), and costing (what the vendor invoiced) ERP systems centralize business data, bringing the following benefits: * They eliminate the need to synchronize changes between multiple systems—consolidation of finance, marketing and sales, human resource, and manufacturing applications * They bring legitimacy and transparency in each bit of statistical data. They enable standard product naming/coding. * They provide a comprehensive enterprise view (no â€Å"islands of information†). They make real–time information available to management anywhere, any time to make proper decisions. * They protect sensitive data by consolidating multiple security systems into a single structure. Disadvantages * Customization is problematic. * Re–engineering business processes to fit the ERP system may damage competitiveness and/or divert focus from other critical activities * ERP can cost more than less integrated and or less comprehensive solutions. High switching costs associated with ERP can increase the ERP vendor's negotiating power which can result in higher support, maintenance, and upgrade expenses. * Overcoming resistance to sharing sensitive information between departments can divert management attention. * Integration of truly independent businesses can create unnecessary dependencies. * Extensive training requirements take resources from daily operations. Due to ERP's architectur e (OLTP, On-Line Transaction Processing) ERP systems are not well suited for production planning and supply chain management (SCM) The limitations of ERP have been recognized sparking new trends in ERP application development, the four significant developments being made in ERP are, creating a more flexible ERP, Web-Enable ERP, Enterprise ERP and e-Business Suites, each of which will potentially address the failings of the current ERP. QUESTION 3 (18 Marks) Describe with example all stages of System Development Lifecycle.Answers Introduction The Systems development life cycle (SDLC), or Software development process in systems engineering, information systems and software engineering, is a process of creating or altering information systems, and the models and methodologies that people use to develop these systems. In software engineering the SDLC concept underpins many kinds of software development methodologies. These methodologies form the framework for planning and controlling th e creation of an information system: the software development process.Software development contains set of activities which when performed in coordination and in accordance with one another result in the desired result. Software development methodologies are used for the computer based information systems. The growth of the information’s has to pass through various phases or stages these stages are known as System Development Life Cycle (SDLC). The SDLC follows a well defined process by which the system is conceived, developed and implemented. To understand system development, we need to recognize that a candidate system has a life cycle, much like a living system or a new product.Systems analysis and design are based to the system life cycle. The stages are described below. The analyst must progress from one stage to another methodically, answering key questions and achieving results in each stage. Figure 1 : System Development Life Cycle (SDLC) Stages Step 1: Recognition of Need – What is the Problem? One must know what the problem is before it can be solved. The basis for a candidate system is recognition of a need for improving an information system or a procedure. For example, a supervisor may want to investigate the system flow in purchasing.Or a bank president has been getting complaints about the long lines in the drive – in. This need leads to a preliminary survey or an initial investigation to determine whether an alternative system can solve the problem. It entails looking into the duplication of effort bottlenecks, inefficient existing procedures, or whether parts of the existing system would be candidates for computerization. If the problem is serious enough, management may want to have an analyst look at it, such an assignment implies a commitment, especially if the analyst hired from the utside. In larger environments, where formal procedures are the norm, the analyst’s first task is to prepare a statement specifying the scope and objective of the problem. He/she then reviews it with the user for accuracy at this stage, only a rough â€Å"ball parle† estimate of the development cost of the project may be reached. However, an accurate cost of the next phase – the feasibility study – can be produced. Step 2: Feasibility Study Depending on the results of the initial investigation, the survey is expanded to a more detailed feasibility study.As we shall learn, a feasibility study is a test of a system proposal according to its workability impact on the organization, ability to meet user needs, and effective use of resources. It focuses on their major questions: * What are the user’s demonstrable needs and how does a candidate system meet them? * What resources are available for given candidate systems? Is the problem worth solving? * What are the likely impact of the candidate system on the organization? How will it fit within the organization’s master MIS plan?Each of these questions must be answered carefully. They revolve around investigation and evaluation of the problem, identification and description of candidate systems, specification of performance and the cost of each system, and final selection of the best system. The objective of a feasibility study is not to solve the problem but to acquire a sense of its scope. During the study, the problem definition is crystallized and aspects of the problem to be included in the system are determined. Consequently, costs and benefits are estimated with greater accuracy at this stage.The result of the feasibility study is a formal proposal. This is simply a report – a formal document detailing the nature and scope of the proposed solution. The proposal summarizes what is known and what is going to be done. It consists of the following. 1. Statement of the Problem – a carefully worded statement of the problem that led to analysis. 2. Summary of Findings and Recommendations – a list of the major findings and recommendations of the study. It is ideal for the user who required quick access to the results of the analysis of the system under study.Conclusions are stated, followed by a list of the recommendations and a justification for them. 3. Details of Findings – An outline of the methods and procedures undertaken by the existing system, followed by coverage of objectives ; procedures of the candidate system. Included are also discussions of output reports, file structures, and costs and benefits of the candidate system. 4. Recommendations and Conclusions – special recommendations regarding the candidate system, including the personal assignments costs, project schedules, and target dates.Three key considerations are involved in the feasibility analysis: economic, technical, behavioral. Let’s briefly review each consideration and how it relates to the systems effort. * Economic Feasibility: Economic analysis is the most frequently use d method for evaluating the effectiveness of a candidate system. More commonly known as cost/benefit analysis, the procedure is to determine the benefits and savings that are expected from a candidate system and compare them with costs. If benefits outweigh costs, then the decision is made to design and implement the system.Otherwise, further justification or alterations in the proposed system will have to be made if it is to have a chance of being approved. This is an ongoing effort that improves in accuracy at each phase of the system life cycle. * Technical Feasibility: Technical feasibility centers around the existing computer system (hardware, software etc. ) and to what extent it can support the proposed addition. For example, if the current computer is operating at 80 per cent capacity – an arbitrary ceiling – then running another application could overload the system or require additional hardware.This involves financial considerations to accommodate technical enhancements. If the budget is a serious constraint, then the project is judged not feasible. * Behavioral Feasibility: People are inherently resistant to change, and computers have been known to facilitate change. An estimate should be made of how strong a reaction the user staff is likely to have towards the development of a computerized system. It is common knowledge that computer installations have something to do with turnover, transfers, retraining, and changes in employee job status.Therefore, it is understandable that the introduction of a candidate system requires special effort to educate, sell, and train the staff on new ways of conducting business. After the proposal is viewed by management it becomes a formal agreement that paves the way for actual design and implementation. This is a crucial decision point in the life cycle. Many projects die here, whereas the more promising ones continue through implementation. 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 to design.Step 3: Analysis It is a detailed study of the various operations performed by the system and their relationship within and outside of the system. A key question is – what must be done to solve the problem? One aspect of analysis is defining the boundaries of the system and determining whether or not a candidate system should consider other related systems. During analysis, data are collected on available files, decision points, and transactions handled by the present system. We shall learn about some logical system models and tools that are used in analysis.It requires special skills and sensitivity to the subjects being interviewed. Bias in data collection and interpretation can be problem. Training, experience and common sense are required for collection of the information needed to do the analysis. Once analysis is completed the analyst has a firm understanding of what is to be done. The next step is to decide how the problem might be solved. Thus, in the systems design, we move from the logical to the physical aspects of the life cycle. Step 4: Design The most creative and challenging phase of the system life cycle is system design.The term design describes both a final system and a process by which it is developed. It refers to the technical specifications (analogous to the engineer’s blueprints) that will be applied in implementing the candidate system. It also includes the constructions of programs and programme testing. The key question here is – How should the problem be solved?. The first step is to determine how the output is to be produced and in what format. Samples of the output (and input) are also available. Second, input data and master files (data base) have to be designed to meet the requirements of the proposed output.The operational (processing) phase are handled through programme constru ction and testing, including a list of the programmes needed to meet the system’s objectives and complete documentation. Finally, details related to justification of the system and an estimate of   the impact of the candidate system on the user and the organization are documented and evaluated by management as a step toward implementation. The final report prior to the implementation phase includes procedural flowcharts, record layouts, report layouts, and a workable plan for implementing the candidate system.Information on personnel, money, hardware, facilities and their estimated cost must also be available. At this point, projected costs must be close to actual costs of implementation. In some firms, separate groups of programmer do the programming whereas other firms employ analyst programmers who do analysis and design as well as code programs. For this discussion, we assume that analysis and programming is carried out by two separate persons. There are certain functio ns, though, that the analyst must perform while programs are being written operating procedures and documentation must be completed.Security and auditing procedures must also be developed. Step 5: Testing No system design is ever perfect. Communication problems, programmers negligence or time constraints create errors that most be eliminated before the system is ready for user acceptance testing. A system is tested for online response, volume of transactions, stress, recovery form failure and usability. Then comes system testing, which verifies that the whole set of programs hangs together, following system testing is acceptance testing or running the system with live   data by the actual use.System testing requires a test plan that consists of several key activities and steps for programs, string, system and user acceptance testing. The system performance criteria deal with turnaround time, backup, file protection, and the human factor. Step 6: Implementation This phase is less c reative than system design. It is primarily concerned with user training, site preparation, and file conversion. When the candidate system is linked to terminals and remote sites the telecommunication network and tests of the network along with the system are also included under implementation.During the final testing, user acceptance is tested, followed by user training. Depending on the nature of the system, extensive user training may be required, conversion usually takes place at about the same time the user is being trained or later. In the extreme, the programmer is falsely viewed as someone who ought to be isolated from other aspects of system development. Programming is itself design work, however. The initial parameter of the candidate system should be modified as a result of programming efforts. Programming provides a â€Å"reality test† for the assumptions made by the analyst.It is therefore a mistake to exclude programmers from the initial system design. System te sting checks the readiness and accuracy of the system to access, update and retrieve data from new files. Once the programmes become available, test data are read into the computer and processed against the file(s) provided for testing. If successful, the program(s) is then run with â€Å"live† data. Otherwise, a diagnostic procedure is used to local and correct errors in the program. In most programs, a parallel run is conducted where the new system runs simultaneously with the ‘old’ systems.This method, though costly, provides added assurance against errors in the candidate system and also gives the user-staff an opportunity to gain experience through operation. In some cases, however, parallel processing is not practical. For example, it is not plausible to run two parallel online point-to-sale (POS) systems for a retail chain. In any case, after the candidate system proves itself, the old system is phased out. Step 7: Evaluation During systems testing, the sy stem is used experimentally to ensure that the software does not fail.In other words, we can say that it will run according to its specifications and in the way users expect. Special test data are input for processing, and the results examined. A limited number of users may be allowed to use the system so that analyst can see whether to use it in unforeseen ways. It is desirable to discover any surprises before the organization implements the system and depends on it. Implementation is the process of having systems personnel check out and put new equipment into use, train users, install the new application and construct any files of data needed to use it.This phase is less creative than system design. Depending on the size of the organisation that will be involved in using the application and the risk involved in its use, systems developers may choose to test the operation in only one area of the Firm with only one or two persons. Sometimes, they will run both old and new system in parallel way to compare the results. In still other situations, system developers stop using the old system one day and start using the new one the next.Evaluation of the system is performed to identify its strengths and weaknesses. The actual evaluation can occur along any one of the following dimensions: * Operational Evaluation: Assessment of the manner in which the system functions, impact. * Organizational Impact: Identification and measurement of benefits to the organisation in such areas as financial concerns, operational efficiency and competitive impact. * User Manager Assessment: Evaluation of the attitudes of senior and user manager within the organization, as well as end-users. Development Performance: Evaluation of the development process in accordance with such yardsticks as overall development time and effort, conformance to budgets and standards and other project management criteria. Step 8: Post – Implementation and Maintenance Maintenance is necessary to eli minate errors in the working system during its working life and to tune the system to any variations in its working environment. Often small system deficiencies are found as a system is brought into operation and changes are made to remove them. System planners must always plan for resource availability to carry out these maintenance functions.The importance of maintenance is to continue to bring the new system to standards. After the installation phase is completed and the user staff is adjusted to changes created by the candidate system, evaluation and maintenance being. Like any system there is an ageing process the requires periodic maintenance of hardware ; software. If the new information is inconsistent with the design specifications, then changes have to be made. Hardware also requires periodic maintenance to keep in time with design specification. 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