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Management
Information System
SBS MBA
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Instructions
Please find enclosed assessment for Managing Information System, please note
that soft copy submission of the assessment will be on or before 23rd Sept 2016, to examinationboard@atmsedu.org and
cc afatima@atmsedu.org.
Please submit the Hard copy on or before 30th September.
Assignment extension request has to be applied 5 days before the submission
date with valid evidence as a proof, please note being busy or out of country
will not be accepted as a reason of extension
Penalty of late submission – 10% deduction of marks with every 24 hrs late till
5 days and after 5 days assignment will be graded as Zero.
Assessment -
90 marks
Class participation – 10 marks
Total Marks: _______ /100
Attempt any four Questions.
Each question carries 22.5 marks.
Question.
1. Information systems are transforming business and helps the organizations to
make it global. Describe how information systems have changed the way
businesses operate and their products and services. Describe the
characteristics of a digital firm. Describe the challenges and opportunities of
globalization in a “flattened” world.
Answer: Information technology is no longer in its infancy, but represents a
greater transition phase. In his analysis of social and cultural dynamics,
Pitirim Sorokin suggests that this transition phase is a cultural
transformation similar to the invention of agriculture or the transition from
the middle ages to the scientific age, though even more dramatic, due to the
faster rate of change. This accelerated rate of change was discussed by William
Conboy as early as the 1960’s. Conboy estimated that the amount of knowledge in
existence doubled between 1 AD and 1750. Knowledge doubled again by 1900, 1950,
1960, and Conboy projected it to double again by 1963 and beyond. This doubling
has created what is called accelerating returns.
Information is Doubling
It would be difficult to estimate the amount
of knowledge in existence today. It must be staggering to think about and yet
it continues at an incredible pace. What this curve represents, in line with
what Sorokin suggests as a cultural transformation, is that new paradigms,
thoughts and adjustments to change will need to be developed in order to
survive in the age of information. Businesses, like their workers, will find
their industries transformed or eliminated by IT. Labor based industries are
being displaced by skill based. Skill based industries are being replaced by
knowledge based. The result will be to find manual labor industries moving to
where the labor is cheap and economies shifting to service based knowledge
industries. There is too much happening too fast for us to rely on mechanistic
theories of old. New, dynamic or relative theories are needed. The key to
management in the future will be in understanding the dynamics of the
information age and adapting appropriately.
The Speed of Information
Business will no longer be thought of as
operating as usual. A focus will be placed on both the speed at which
information can be passed through the organization and the importance of that
information. Systems will be developed to increase the rate at which
information passes, while the importance of information will become the
deciding factor in the marketplace. In order to remain competitive,
organizations will need to incorporate more information technology while
developing a greater understanding of the importance of information and how it
relates to workflow and productivity.
Information Flows
In order for information to be used
effectively, it must flow easily through the organization. Information quickly
becomes useless or obsolete, so it’s important to act on information quickly
and decisively to get its full value. Both computers and communication systems
are used to increase the speed and efficiency at which information can be
passed. Computers are being used increasingly to connect different departments
together and thus automating the passage of the information that they rely upon
to do business. More and more management information systems, policy management
software, and computer-aided manufacturing systems are being required to
establish and maintain a competitive edge. New communication strategies are
being designed around the individual, allowing workers and management to
conduct business across many miles, electronically, without ever leaving the
office. The advent of email, teleconferencing, and now the paperless office
makes this possible. The portability of electronic work at the touch of a
button, across the internet, has led to decentralization of offices and the
movement of work across country borders.
Importance of Information
John Diebold recognized the importance of
information to the organization when stating three of its unique properties:
· The value of information increases as it is
used;
· Information is not depleted, but it may
become obsolete; and
· It is a basic factor of productive activity,
comparable with labor, capitol, energy, and raw materials.
Diebold also stated that one of the problems
with management is its belief that automating the office is done mainly as a
clerical savings; he felt the emphasis should be on improving the productivity
of managers and other professionals. An example of this belief can be seen in automation
dollars spent on office workers in 1977, which varied from $2,000- $6,000 per
worker while at the same time the average spent on an industrial worker was
$25,000. If businesses are to remain competitive, it is important for
management to spend the money required to provide the tools to increase the
productivity of all of its workers. This cannot be done, however, until
management realizes the important relationship of information technology to
worker productivity.
Characteristics of a digital firm
Through digital networks and information
systems, the digital firm is able to operate core business services and
functions continuously and more efficiently. This digital enablement of
business processes creates highly dynamic information systems allowing for more
efficient and productive management of an organization.
Additionally, digital enablement of core
business functions and services provides an organization with opportunities to:
· Operate business continuously ("Time
Shifting")
· Operate business in a global workplace
("Space Shifting")
· Adapt business strategies to meet market
demands
· Create business value from technology
investments
· Drive efficiency improvements in inventory
and supply chain
· Enhance the management of customer
relationships
· Improve organizational productivity
Effects on organizational performance
Technology and information systems serve many
critical roles in a digital firm by providing technology-driven capabilities
that increase operational performance. For example, digital networks and
information systems allow organizations to connect and integrate supply chains
in ways that are real-time, uninterrupted and highly responsive to market
conditions.
Another example of an information system that
can increase an organization's performance awareness and management
capabilities is a Real-Time Business Intelligence (RTBI) system. A RTBI system
can provide a highly responsive and strategic decision support platform for an
organization to analyze operational events as they occur. RTBI systems often
work closely with Organizational Risk Management (ORM) systems in this capacity
to increase capabilities around monitoring operational performance and
assessing operational risks. These types of information systems can increase an
organization's capabilities to effectively manage performance and productivity.
The three main enterprise information systems
that can positively affect an organization's performance and productivity are:
Enterprise Resource Planning (ERP): Studies of organizations that deploy ERP
systems have found that those organizations achieve several operational
efficiencies and overall improvements in performance. In particular, ERP
systems have been shown to foster a paperless environment, provide efficient
inventory tracking, and increase inventory accuracy.
Customer Relationship Management (CRM): Organizations leverage CRM systems to improve
the overall management of their relationships with customers. CRM systems
operate as enterprise platforms that provide digital firms with opportunities
to closely manage all aspects of interactions with customers through
customer-oriented business processes.
Supply Chain Management (SCM): Studies of organizations that implemented SCM
systems to improve supply chain management capabilities found that those
systems had a significant impact on productivity and performance within the
organization. Additionally, the implementation of SCM and CRM systems differed
from an ERP implementation in that organizational performance could be directly
correlated "with both the initial purchase and go-live event".
Challenges and opportunities of globalization
in a “flattened” world
Customers no longer need to rely on local
businesses for products and services. They can shop 24/7 for virtually anything
and have it delivered to their door or desktop. Companies can operate 24/7 from any geographic location
around the world. Jobs can just as easily move across the state or across the
ocean. Employees must continually develop high-level skills through education
and on-the-job experience that cannot be outsourced. Business must avoid
markets for goods and serves that can be produced offshore much cheaper. The
emergence of the Internet into a full-blown international communications system
has drastically reduced the costs of operating and transacting on a global
scale.
Process of Globalization and its
effects:
World economy will be strengthened due to
process of globalization. The following opportunities will be created:
· More employment
· Increased per capita income
· Improved living standard
· Improved social conditions
· Increased investment
· Technology manpower, industrilization and
sustainable development.
· Environmental protection.
Here some questions have been raised. It has
created the greatest disparities among the developed and developing countries.
Negative effects of Globalization:
With the global depression, there will be
ever fewer countries enjoying growth (HDR1996).
About 135countries have involved in the WTO
and they have opened their resources, economy, trade a/id investment under the
WTO agreement.ADB, World Bank, IMF provided foreign assistance to the
international companies for expansion their business and profit. In recent
years, they are not interested to supply equipments and capital, and rather
reduced supply. They desire to invest in FDI. In this context, the Development
partners encourage to expand their business and profit through foreign investment.
Some countries liberalized their economy to attract FDI for their economic
development.
Question.
2. What are business processes? How are they related to information systems?
How do systems serve the different management groups in a business? How do
systems that link the enterprise improve organizational performance? Give
example to support your answer.
Answer: A business process is a collection of linked tasks which find their end
in the delivery of a service or product to a client. A business process has also been defined as
a set of activities and tasks that, once completed, will accomplish an
organizational goal. The process must
involve clearly defined inputs and a single output. These inputs are made up of
all of the factors which contribute (either directly or indirectly) to the
added value of a service or product. These factors can be categorized into
management processes, operational processes and supporting processes.
Management processes govern the operation of
a particular organization’s system of operation. Operational processes
constitute the core business. Supporting processes such as human resources and
accounting are put in place to support the core processes.
The definition of the term business process
and the development of this definition since its conception by Adam Smith in
1776 has lead to such areas of study as Operations Development, Operations
Management and to the development of various Business Management Systems. These systems, in turn, have created an industry
for BPM Software which seeks to automate process management by connecting
various process actors via technology.
A process requires a series of actions to
achieve a certain objective. BPM processes are continuous but also allow for
adhoc action. Processes can be simple or complex based on number of steps,
number of systems involved etc. They can be short or long running. Longer
processes tend to have multiple dependencies and a greater documentation
requirement.
Systems serving operational management are
transaction processing systems (TPS), such as payroll or order processing, that
track the flow of the daily routine transactions necessary to conduct business.
Management information system (MIS) and decision support system (DSS) support
the middle management. Most MIS reports condense information from TPS and are
not highly analytical. Decision support system (DSS) support management
decisions that are unique and rapidly changing advanced analytical models and
data analysis capabilities. Executive support system(ESS) support senior
management by providing data that are often in the form of graphs and charts
delivered via portals using many sources of internal and external information.
Transaction processing systems (TPS) are
computerized systems that perform and record daily routine transactions
necessary in conducting business; they serve the organization’s operational
level.
The principal purpose of systems at this
level is to answer routine questions and to track the flow of transactions
through the organization.
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At the
operational level, tasks, resources, and goals are predefined and highly
structured.
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Managers
need TPS to monitor the status of internal operations and the firm’s
relationship with its external environment.
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TPS are
major producers of information for other types of systems.
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Transaction
processing systems are often so central to a business that TPS failure for a
few hours can lead to a firm’s demise and perhaps that of other firms linked to
it.
Enterprise applications are
designed to organize multiple roles and business processes. Enterprise system
incorporate the key internal business process of a firm into a single software
system for a better coordination, efficiency, and decision making. Supply chain
management systems, an enterprise application help the firm manage its
association with suppliers to optimize the planning, tracking, manufacturing,
and delivery of products and services. Customer relationship management (CRM)
systems coordinate the business processes with the firm's customers. Knowledge
management systems allow firms to improve the creation, sharing, and
circulation of knowledge. Intranets and extranets use Internet technology to
bring together information from unrelated systems and present it to the user in
a Web page format. Extranets make pieces of private corporate intranets
available to outsiders.
Question.
3. Which features of organizations do managers need to know about to build and
use information systems successfully? What is the impact of information systems
on organizations? Define Porter’s competitive forces model and explain how it
works. List and describe four competitive strategies enabled by information
systems that firms can pursue. Describe how information systems can support
each of these competitive strategies and give examples.
Answer: All organizations are hierarchical, specialized, and impartial, using
precise routines to maximize efficiency.
All organizations have their own cultures and politics arising from differences in interest groups, and their
surrounding environment affects them.
Organizations differ in goals, groups served, social roles, leadership
styles, incentives, types of tasks
performed, and type of structure. These features help explain differences in
organizations’ use of information systems. Information systems and the
organizations in which they are used
interact with and influence each other.
The introduction of a new
information system will affect organizational structure, goals, work design, values, and competition between
interest groups, decision-making, and day- to- day behavior. At the same time,
information systems must be designed to serve the needs of important organizational groups and
will be shaped by the organization’s
structure, business processes, goals, culture, politics, and management.
Information technology can reduce
transaction and agency costs, and such changes have been accentuated in organizations using the
Internet. New systems disrupt established patterns of work and power relationships, so there is
often considerable resistance to them when
they are introduced.
From an economic point of view,
information systems technology can be seen as a factor of production that can
be freely substituted for capital and labor. As information systems technology
automates the production process, less capital and labor are required to
produce a specified output.
Transaction cost theory states
that organizations grow in size because they can obtain certain products or
services internally at lower cost than by using external firms in the
marketplace. By lowering the cost of market participation (transaction costs)
information technology allows firms to obtain goods and services more cheaply
from outside sources than through internal means. Information systems can thus
help firms increase revenue while shrinking in size.
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Firms traditionally grew in size
to reduce transaction costs. IT potentially reduces the costs for a given size,
shifting the transaction cost curve inward, opening up the possibility of
revenue growth without increasing size, or even revenue growth accompanied by
shrinking size.
Agency theory views the firm as a
nexus of contracts among self- interested individuals, who must be carefully
supervised to ensure they pursue the interests of the organization. Information
technology can help reduce agency costs, the costs of coordinating many different
people and activities, so that each manager can oversee a larger number of
employees.
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As firms grow in size and
complexity, traditionally they experience rising agency costs. IT shifts the
agency cost curve down and to the right, enabling firms to increase size while
lowering agency costs.
Behavioral researchers have
theorized that information technology facilitates flattening of hierarchies by
broadening the distribution of information to empower lower-level employees and
increase management efficiency.
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Information systems can reduce
the number of levels in an organization by providing managers with information
to supervise larger numbers of workers and by giving lower-level employees more
decision-making authority.
Postindustrial theories also
support the idea that IT should flatten hierarchies by allowing professionals
to be self-managing, by decentralizing decision making, and by encouraging
formation of ad-hoc, temporary "task forces" that address specific
tasks.
Because information systems
potentially change an organization's structure, culture, business processes,
and strategy, there is often considerable resistance to them when they are
introduced. In one model describing organizational resistance, the only way to
bring about change is to change the technology, tasks, structure, and people
simultaneously.
Implementing information systems
has consequences for task arrangements, structures, and people. According to
this model, to implement change, all four components must be changed
simultaneously.
The Internet and World Wide Web
are increasing the accessibility, storage, and distribution of information and
knowledge for organizations, dramatically lowering transaction and agency
costs. Businesses are rapidly rebuilding some key business processes based on
Internet technology.
To deliver genuine benefits,
information systems must be built with a clear understanding of the
organization in which they will be used, and consideration of the firm's
environment, structure, culture, politics, organization and leadership,
business processes, as well as the principle interest groups affected by the
system.
Whether you are starting a new
business or looking for more insight into your existing company's prospects,
you probably have questions about the competition. One way to answer those
questions is by using Porter's Five Forces model.
Originally developed by Harvard
Business School's Michael E. Porter in 1979, the five forces model looks at
five specific factors that help determine whether or not a business can be
profitable, based on other businesses in the industry.
"Understanding the
competitive forces, and their underlying causes, reveals the roots of an
industry's current profitability while providing a framework for anticipating
and influencing competition (and profitability) over time," Porter wrote
in a Harvard Business Review article. "A healthy industry structure should
be as much a competitive concern to strategists as their company’s own
position."
According to Porter, the origin
of profitability is identical regardless of industry. In that light, industry
structure is what ultimately drives competition and profitability —not whether
an industry produces a product or service, is emerging or mature, high-tech or
low-tech, regulated or unregulated.
"If the forces are intense,
as they are in such industries as airlines, textiles, and hotels, almost no
company earns attractive returns on investment," Porter wrote. "If
the forces are benign, as they are in industries such as software, soft drinks,
and toiletries, many companies are profitable."
Firms with a competitive
advantage over others typically have access to special resources that others do
not or are able to use resources more efficiently, resulting in higher revenue
growth, profitability, or productivity growth (efficiency), all of which
ultimately in the long run translate into higher stock market valuations than
their competitors.
Michael Porter's competitive
forces model describes five competitive forces that shape the fate of the firm.
1.
Traditional competitors: Existing firms
that share a firm's market space
2.
New market entrants: New companies have
certain advantages, such as not being locked into old equipment and high
motivation, as well as disadvantages, such as less expertise and little brand
recognition. Some industries have lower barriers to entry, ie: cost less for a
new company to enter the field.
3.
Substitute products and services: These
are substitutes that your customers might use if your prices become too high.
For example, Internet telephone service can substitute for traditional
telephone service. The more substitute products and services in your industry,
the less you can control pricing and raise your profit margins.
4.
Customers: The power of customers grows
if they can easily switch to a competitor's products and services, or if they
can force a business and its competitors to compete on price alone in a
transparent marketplace where there is little product differentiation and all
prices are known instantly (such as on the Internet).
5.
Suppliers: The more different suppliers a
firm has, the greater control it can exercise over suppliers in terms of price,
quality, and delivery schedules.
There are four generic strategies
used to manage competitive forces, each of which often is enabled by using
information technology and systems:
1. Low-cost
leadership: Use information systems to achieve the lowest operational costs
and the lowest prices. For example, a supply chain management system can
incorporate an efficient customer response system to directly link consumer
behavior to distribution and production and supply chains, helping lower
inventory and distribution costs.
2. Product
differentiation: Use information systems to enable new products and
services, or greatly change the customer convenience in using your existing
products and services. For instance, Land's End uses mass customization,
offering individually tailored products or services using the same production
resources as mass production, to custom-tailor clothing to individual customer
specifications.
3. Focus
on market niche: Use information systems to enable a specific market focus
and serve this narrow target market better than competitors. Information
systems support this strategy by producing and analyzing data for finely tuned
sales and marketing techniques. Hilton Hotels uses a customer information
system with detailed data about active guests to provide tailored services and
reward profitable customers with extra privileges and attention.
4. Strengthen
customer and supplier intimacy: Use information systems to tighten linkages
with suppliers and develop intimacy with customers. Chrysler Corporation uses
information systems to facilitate direct access from suppliers to production
schedules, and even permits suppliers to decide how and when to ship suppliers
to Chrysler factories. This allows suppliers more lead time in producing goods.
Strong linkages to customers and suppliers increase switching costs (the cost
of switching from one product to a competing product) and loyalty to your firm.
The Internet has nearly destroyed
some industries and has severely threatened more. The Internet has also created
entirely new markets and formed the basis for thousands of new businesses.
Because of the Internet, the
traditional competitive forces are still at work, but competitive rivalry has
become much more intense. Internet technology is based on universal standards,
making it easy for rivals to compete on price alone and for new competitors to
enter the market. Because information is available to everyone, the Internet
raises the bargaining power of customers, who can quickly find the lowest-cost
provider on the Web. Some industries, such as the travel industry and the
financial services industry, have been more impacted than others. However, the
Internet also creates new opportunities for building brands and building very
large and loyal customer bases, such as Yahoo!, eBay, and Google.
The value chain model highlights
specific activities in the business where competitive strategies can best be
applied and where information systems are most likely to have a strategic
impact. The value chain model views the firm as a series or chain of basic
activities that add a margin of value to a firm's products or services. These
activities can be categorized as either primary activities or support
activities.
Primary activities are
most directly related to the production and distribution of the firm's products
and services, which create value for the customer. Primary activities include
inbound logistics, operations, outbound logistics, sales and marketing, and
service.
Support activities make
the delivery of the primary activities possible and consist of organization
infrastructure (administration and management), human resources (employee
recruiting, hiring, and training), technology (improving products and the
production process), and procurement (purchasing input).
Question.
4. What are the problems of managing data resources in a traditional file
environment and how are they solved by a database management system? What are
the principal tools and technologies for accessing information from databases
to improve business performance and decision making? Why are information
policy, data administration, and data quality assurance essential for managing
the firm’s data resources?
Answer: Traditional
file management techniques make it difficult for organizations to keep track of
all of the pieces of data they use in a systematic way and to organize these
data so that they can be easily accessed. Different functional areas and groups
were allowed to develop their own files independently. Over time, this
traditional file management environment creates such problems as data
redundancy and inconsistency, program–data dependence, inflexibility, poor
security, and lack of data sharing and availability. A database management system
(DBMS) solves these problems with software that permits centralization of data
and data management so that businesses have a single, consistent source for all
their data needs. Using a DBMS minimizes redundant and inconsistent files.
The principal capabilities of a DBMS include
a data definition capability, a data dictionary capability, and a data
manipulation language. The data definition capability specifies the structure
and content of the database. The data dictionary is an automated or manual file
that stores information about the data in the database, including names,
definitions, formats, and descriptions of data elements. The data manipulation
language, such as Structured Query Language (SQL), is a specialized language
for accessing and manipulating the data in the database. The relational
database is the primary method for organizing and maintaining data today in
information systems because it is so flexible and accessible. It organizes data
in two-dimensional tables called relations, with rows and columns. Each table
contains data about an entity and its attributes. Each row represents a record,
and each column represents an attribute or field. Each table also contains a
key field to uniquely identify each record for retrieval or manipulation.
Relational database tables can be combined easily to deliver data required by
users, provided that any two or more tables share a common data element.
Designing a database requires both a logical
design and a physical design. The logical design models the database from a
business perspective. The organization’s data model should reflect its key
business processes and decision-making requirements. The process of creating
small, stable, flexible, and adaptive data structures from complex groups of
data when designing a relational database is termed normalization. A
well-designed relational database will not have many-to-many relationships, and
all attributes for a specific entity will only apply to that entity. It will
try to enforce referential integrity rules to ensure that relationships between
coupled tables remain consistent. An entity relationship diagram graphically
depicts the relationship between entities (tables) in a relational database.
Powerful tools are available to analyze and
access the information in databases. A data warehouse consolidates current and
historical data from many different operational systems in a central database
designed for reporting and analysis. Data warehouses support multidimensional
data analysis, also known as online analytical processing (OLAP). OLAP
represents relationships among data as a multidimensional structure, which can
be visualized as cubes of data and cubes within cubes of data, enabling more
sophisticated data analysis. Data mining analyzes large pools of data,
including the contents of data warehouses, to find patterns and rules that can
be used to predict future behaviour and guide decision making. Text mining
tools help businesses analyze large, unstructured data sets consisting of text.
Web mining tools focus on analysis of useful patterns and information from the
World Wide Web, examining the structures of Web sites and activities of site
users as well as the contents of Web pages. Conventional databases can be
linked via middleware to the Web or a Web interface to facilitate user access
to an organization’s internal data.
Developing a database environment requires
policies and procedures for managing organizational data as well as a good data
model and database technology. A formal information policy governs the
maintenance, distribution, and use of information in the organization. In large
corporations, a formal data administration function is responsible for
information policy, as well as for data planning, data dictionary development,
and monitoring data usage in the firm. Data that are inaccurate, incomplete, or
inconsistent create serious operational and financial problems for businesses
because they may create inaccuracies in product pricing, customer accounts, and
inventory data and lead to inaccurate decisions about the actions that should
be taken by the firm. Firms must take special steps to make sure they have a
high level of data quality. These include using enterprise-wide data standards,
databases designed to minimize inconsistent and redundant data, data quality
audits, and data cleansing software.
How a DBMS Solves the Problems of the
Traditional File Environment
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Reduces
data redundancy and inconsistency by minimizing isolated files
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It can’t
eliminate data redundancy as a whole, but can help control it
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It
uncouples data and programs, enabling data to stand up on their own
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Access
and availability of information increases
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Program
development and maintenance costs decreases
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Users
and programmers can perform and hoc queries of data in the database
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Enables
the organization to centrally manage: the data, their use, and security through
the use of a data dictionary
Relational DBMS
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Contemporary DBMS uses different database models
-Most popular type is the relational DBMS
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Relational DBMS: data as two-dimensional tables
(called relations)
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Tables are also referred to as files -Each table
contains data on an entity and its attributes
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Example: Microsoft Access is a Relational DBMS
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Each element of data for each entity is stored
as a separate field
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Each field represents an attribute for that
entity
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Fields in a relational database are also called
columns
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The actual information about a single supplier
that resides in a table is called a row
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Rows are referred to as records or as tuples
-When a field uniquely identifies each record, so that it can be retrieved,
updated or sorted, it is called a key field
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Every table in a relational database has one
field designated as its primary key
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The key field is the unique identifier for all
the information in any row of the table
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The primary key cannot be duplicated
Question.
5. How do supply chain management help businesses achieve operational
excellence?
How
do supply chain management systems coordinate planning, production, and
logistics with suppliers? Describe the challenges of global supply chains and
how Internet technology can help companies manage them better.
Answer:
Question.
6. What are the different types of decisions, and how does the decision-making
process work? How do information systems support the activities of managers and
management decision making? How do different decision-making constituencies in
an organization use business intelligence?
Answer:
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