Chapter 37 - Management Information Systems
Chapter 37 - Management Information Systems
202
An international car manufacturing company maintains a database holding details of every car that will be made over the next ten years by every other car manufacturer in the world. This data is collected through agencies specialising in information gathering, through trade fairs and reviews, leaks and even industrial espionage. A special department exists to collect and collate this information. One of the managers jobs is to read every relevant magazine, newspaper article and communication every morning, highlight anything of importance and pass the pile of paper round the department for the others to read prior to the database being updated.
Information flow
Information flows through an organisation through both formal and informal information systems. Informal ways of gathering information include face-to-face conversations, meetings, telephone conversations, reading newspapers and magazines, listening to radio and television and surfing the Internet. Information is also circulated through company newsletters, memos and notice boards. The problem with newsletters and memos is that readers often have so much information to absorb that they quickly forget it. Formal methods of disseminating information around an organisation include the following: Computerised information systems which allow users to query databases over a company-wide network. Internal data is often collected in the first instance through transaction processing systems. External data can be collected, for example, through agencies such as Dun and Bradstreet which produces an on-line electronic data service called DataStream to both business and academic organisations. Software packages such as Lotus Notes enable people at different locations to have the same document on their screens and work on it together. Appointments can be held on the systems so that meetings can be arranged at a time when everyone is free. E-mail allows correspondence and files to be transmitted throughout an organisation as well as to others outside the organisation. Company-wide Intranets are networks which work on the same principle as the Internet but are for use within the organisation. Information can be disseminated throughout an organisation via the Intranet rather than in the form of written memos and newsletters.
203
Information Outputs
Capture Reports
What managers do
To understand how information systems can benefit managers, we first need to examine what the functions of management are and the kind of information they need for decision-making. The five classical functions of managers (described more than 70 years ago) are: 1. Planning. Managers plan the direction a company is to take, whether to diversify, which areas of the world to operate in, how to maximise profit. 2. Organising. Resources such as people, space, equipment and services must be organised. 3. Coordinating. Managers coordinate the activities of various departments. 4. Decision-making. Managers make decisions about the organisation, the products or services made or sold, the employees, the use of information technology. 5. Controlling. This involves monitoring and supervising the activities of others. Management information systems must be designed to support managers in as many of these functions as possible, at different levels (operational, tactical, strategic) of an organisation. Discussion: How could a MIS help college managers at various levels to carry out activities of planning, organising, coordinating, decision-making and controlling?
A study in 1973 by Henry Mintzberg found that managers divided up their time as shown in the pie chart below. He described the work of a manager as consisting of hundreds of brief activities of great variety, requiring rapid shifts of attention from one issue to another, very often initiated by emerging problems. Half of the activities of chief executives lasted less than 9 minutes.
204
Telephone calls 6%
Travel 3%
Discussion: Todays managers still spend their time divided between many activities. Do you think there are any activities which managers spend more time on than they did in 1973?
Types of decision
Management decisions can be classified into two types structured and unstructured. Structured decisions are repetitive, routine and involve a definite procedure for handling them. Unstructured decisions on the other hand are decisions which require judgement, insight and evaluation. They are often important decisions and there is no set procedure for making them. Discussion: Categorise the following decisions to be made by a department store manager as structured or unstructured: In which town shall we open the next branch? How many extra staff shall we hire to cope with the Christmas rush? What shall we do about an employee who has had 30 sick days in the last 6 months? Should we try and increase the number of customers who hold a store card?
Stages of decision-making
Making unstructured, non-routine decisions is a process that takes place over a period of time, and consists of several stages. Think of any important decision that you may have to make, like whether to go on to University or get a job, which college or University to attend, what course or career to follow. You will probably reach any of these decisions over a period of time, having gathered together information from various sources and listened to friends, parents or careers advisers. The manager who has non-routine decisions to make typically goes through the following stages: 1. Recognition that there is a problem. An information system is useful at this stage to keep managers informed of how well the department or organisation is performing and to let them know where problems exist. The principle of exception reporting is especially important in this stage in other
205
words, only situations which need some action are reported. (For example, customers with outstanding accounts, a sudden drop or increase in sales compared with the same period last year or a rash of staff resignations.) 2. Consideration of possible solutions. More detailed information may be needed at this stage, or possibly tools such as a spreadsheet which can model the effect of different solutions such as price increases or decreases, staff pay increases etc. 3. Choosing a solution. 4. Implementing the solution. This may involve setting up a new management information system to report on the progress of the solution.
Consider solutions
Choose a solution
Most decisions do not proceed smoothly from one stage to the next, and backtracking to a previous stage is often required if a chosen solution turns out to be impossible or new information comes to light which offers alternative choices. Making structured decisions often of an operational nature is made easier by having an information system which provides the information necessary to make the correct decisions. Discussion: A car company gathers information about its customer base through many sources, including market research surveys. One company has discovered that it has relatively few customers in the 18-30 age range. How can this information be used by the company to improve its sales?
206
207
Failure of management information systems can attributed to a number of reasons such as: Inadequate analysis. The potential problems, exact needs and constraints are not fully understood before the design or selection of a new system; Lack of management involvement in design. It is essential that all those expecting and needing to benefit from a new system are involved in its design. Without this involvement, any system is doomed to failure either by providing information which nobody needs (or, worse still, nobody understands) or management having expectations from a new system which cannot be delivered. Emphasis on the computer system. Selecting the right hardware and software is clearly essential as the basis for a modern computer system but appropriate procedures for handling both data input and output must be established before a system is implemented. The objectives of the new system need to be clearly thought out. Users often request the population of fields on a database for no explained reason and often request management reports which are neither useful nor read! Concentration on low-level data processing. One of the fundamental functions of a system within a company is the day-to-day processing of transactions, including sales and purchase orders, invoices, goods receipts and credit notes. When designing a basic system, the management information available from the system must be both easily accessible and easily understandable by users who may be neither computer literate nor managers. Lack of management knowledge of ICT systems and their capabilities. Managers require information for running companies or departments, and among other things, for producing budgets and forecasts. Managers must know what they want from a system but it cannot be assumed that these same managers have a full (or even a slight) grasp of the technology which will provide the information they need. Lack of teamwork. The needs of the accounts department, the marketing department, the sales department (home and export), and the storage and despatch departments are all likely to differ and an ICT manager needs not only to lead his team but also to be able to take on board the whole companys requirements. Teamwork needs leadership and a good leader is one who can convince all the members of a company team that the ICT system being designed is going to meet everybodys needs but not necessarily in quite the way that the different players may have pictured. Lack of professional standards. Clear documentation written in a language that not only the ICT manager can understand is essential for training, implementation and daily use of a new system. Operators need to know exactly what to do in their work (including what to do if they need to undo some action); managers need to feel reassured that, if necessary, explanations are available to help them to interrogate the system for the information they require, and all people using the system must feel confident enough to be able to help others. (Thanks to John Walsh of BEBC for contributing these thoughts after the installation of their new computer system which, I hasten to add, is a complete success!)
Exercises
1. (a) What is the purpose of a Management Information System? (1) (b) Why is such a system required by managers of an organisation? (1) (c) Give one example of the use of a Management Information System within an organisation, clearly stating its purpose. (2) NEAB IT04 Qu 1 1997 List three desirable features of a management information system, stating in each case why the feature you have specified is useful. (6) New question
2.
208
3.
A school is planning the introduction of a computer-based attendance system for classes and registration groups. The purpose of the system is to produce information for the following end-users: Class teachers Tutors/Head of Year Senior managers (e.g. Deputy Head) (a) Describe three alternative ways of collecting the information for the system. (6) (b) For each of the different end-users describe, with the aid of an example, information that the system might produce in relation to their requirements. (6) NEAB IT04 Qu 3 1997
4.
With the aid of appropriate examples, explain the difference between formal and informal information flows. (6) NEAB IT04 Qu 2 1998 A company keeps records of its sales and uses a Management Information System to produce reports for its sales personnel and for its shareholders. (a) Describe two differences between the information needed by sales personnel in their day-to-day work, and by shareholders reading the annual report. (4) (b) Describe, with the aid of an example, one characteristic of good quality information that might be produced by this system. (3) AQA ICT4 Qu 6 June 2002
5.
6.
Company management sometimes introduce new information and communication systems, giving little advance notice to their staff. This may contribute to the failure of these systems, and cause other problems for their staff. (a) State six factors that may cause the failure of a system that has been introduced too quickly. (6) (b) Describe three problems that staff might encounter in this situation. (6) AQA ICT4 Qu 3 January 2003
209
Feasibility Study
Maintenance
Analysis
Installation
Design
Programming
Discussion: In your experience of practical work on information technology projects, is this a good representation of the process of implementing a system from scratch? If not, why not?
210
Feasibility study
Analysis
Requirements Analysis
Design
Design
Implementation
Conversion
Postimplementation review
211
Feasibility study
This is the first stage of the systems life cycle. The scope and objectives of the proposed system must be written down. The aim of the feasibility study is to understand the problem and to determine whether it is worth proceeding. There are five main factors to be considered:
Technical feasibility Economic feasibility Legal feasibility Operational feasibility Schedule feasibility
Figure 38.3: TELOS a mnemonic for the five feasibility factors
Technical feasibility means investigating whether the technology exists to implement the proposed system, or whether this is a practical proposition. Economic feasibility has to do with establishing the cost-effectiveness of the proposed system if the benefits do not outweigh the costs, then it is not worth going ahead. Legal feasibility determines whether there is any conflict between the proposed system and legal requirements for example, will the system contravene the Data Protection Act? Operational feasibility is concerned with whether the current work practices and procedures are adequate to support the new system. It is also concerned with social factors how the organisational change will affect the working lives of those affected by the system. Schedule feasibility looks at how long the system will take to develop, or whether it can be done in a desired time-frame. The completion of this stage is marked by the production of a feasibility report produced by the systems analyst. If the report concludes that the project should go ahead, and this is agreed by senior managers, detailed requirements analysis will proceed.
212
Requirements analysis
The second phase of systems analysis is a more detailed investigation into the current system and the requirements of the new system. Gathering details about the current system will involve: Interviewing staff at different levels of the organisation from the end-users to senior management. Examining current business and systems documents and output. These may include current order documents, computer systems procedures and reports used by operations and senior management. Sending out questionnaires and analysing responses. The questions have to be carefully constructed to elicit unambiguous answers. Observation of current procedures, by spending time in various departments. A time and motion study can be carried out to see where procedures could be made more efficient, or to detect where bottlenecks occur. The systems analysts report will examine how data and information flow around the organisation, and may use data flow diagrams to document the flow. It will also establish precisely and in considerable detail exactly what the proposed system will do (as opposed to how it will do it). It will include an indepth analysis of the costs and benefits, and outline the process of system implementation, including the organisational change required. It must establish who the end-users are, what information they should get and in what form and how it will be obtained. Alternative options for the implementation of the project will be suggested. These could include suggestions for: Whether development should be done in-house or using consultants; What hardware configurations could be considered; What the software options are. The report will conclude with a recommendation to either proceed or abandon the project.
213
System design
The design specifies the following aspects of a system: The hardware platform which type of computer, network capabilities, input, storage and output devices; The software programming language, package or database; The outputs report layouts and screen designs; The inputs documents, screen layouts and validation procedures; The user interface how users will interact with the computer system; The modular design of each program in the application; The test plan and test data; Conversion plan how the new system is to be implemented; Documentation including systems and operations documentation. Later, a user manual will be produced.
Implementation
This phase includes both the coding and testing of the system, the acquisition of hardware and software and the installation of the new system or conversion of the old system to the new one. The installation phase can include: Installing the new hardware, which may involve extensive recabling and changes in office layouts; Training the users on the new system; Conversion of master files to the new system, or creation of new master files.
Methods of conversion
There are several different methods of conversion: Direct changeover. The user stops using the old system one day and starts using the new system the next usually over a weekend or during a slack period. The advantage of this system is that it is fast and efficient, with minimum duplication of work involved. The disadvantage is that normal operations could be seriously disrupted if the new system has errors in it or does not work quite as expected. Parallel conversion. The old system continues alongside the new system for a few weeks or months. The advantage is that results from the new system can be checked against known results, and if any difficulties occur, operations can continue under the old system while the errors or omissions are sorted out. The disadvantage of parallel conversion is the duplication of effort required to keep both systems running, which may put a strain on personnel. Phased conversion. This is used with larger systems that can be broken down into individual modules that can be implemented separately at different times. It could also be used where for example only a few customer accounts are processed using the new system, while the rest remain for a time on the old system. Phased conversion could be direct or parallel. Pilot conversion. This means that the new system will be used first by only a portion of the organisation, for example at one branch or factory. Discussion: For each of the following examples, state with reasons what type of conversion method would be suitable.
214
(a) A bakery is introducing a system to input orders from each salesperson and use this data to calculate how much of each product to bake each day, and also to calculate the salespersons commission. (b) A chain store is introducing EPOS terminals connected to a mainframe computer which holds details of stock levels and prices. (c) A public library is introducing a computerised system for the lending and return of books. (d) A large hospital is introducing a computerised system for keeping patient records and appointments. (e) A College is introducing a computerised timetabling and room allocation system. (f) A Company manufacturing electronic components is introducing an integrated system for production control, stock control and order processing. (g) A Local Authority is introducing a computerised system for the collection of a new type of tax.
Post-implementation review
An important part of the implementation is a review of how the new system is performing, once it has been up and running for a period of time. Minor programming errors may have to be corrected, clerical procedures amended, or modifications made to the design of reports or screen layouts. Often it is only when people start to use a new system that they realise its shortcomings! In some cases they may realise that it would be possible to get even more useful information from the system than they realised, and more programs may be requested. The process of system maintenance, in fact, has already begun, and the life cycle is complete.
System maintenance
All software systems require maintenance, and in fact the vast majority of programmers are employed to maintain existing programs rather than to write new ones. There are differing reasons for this, and different types of maintenance. Perfective maintenance. This implies that while the system runs satisfactorily, there is still room for improvement. For example, extra management information may be needed so that new report programs have to be written. Database queries may be very slow, and a change in a program may be able to improve response time. Adaptive maintenance. All systems will need to adapt to changing needs within a company. As a business expands, for example, there may be a requirement to convert a standalone system to a multiuser system. New and better hardware may become available, and changes to the software may be necessary to take advantage of this. New government legislation may mean that different methods of calculating tax, for example, are required. Competition from other firms may mean that systems have to be upgraded in order to maintain a competitive edge. Corrective maintenance. Problems frequently surface after a system has been in use for a short time, however thoroughly it was tested. Some part of the system may not function as expected, or a report might be wrong in some way; totals missing at the bottom, incorrect sequence of data, wrong headings, etc. Frequently errors will be hard to trace, if for example a file appears to have been wrongly updated.
215
Prototyping
The waterfall model of the system life cycle has major shortcomings and often bears little relation to what happens in practice. One reason for this is that it doesnt allow for modifications to the design as the project proceeds, with both user and developer learning as they go along. Users frequently have difficulty in explaining their requirements at the start of a proposed system since they do not know what is possible and cannot visualise how the final system will work. This can result in a system which does not really match their requirements. (See Figure 39.2.) Using the prototyping approach, a model of a new system is built in order to evaluate it or have it approved before building the production model. Applied to software projects, this means, for example, using special software to quickly design input screens and create a program to input and validate data. This gives the user a chance to experience the look and feel of the input process and suggest alterations before going any further. The earlier a user is involved, the easier it will be to make changes.
Develop a prototype
Evaluate
Specify
Benefits of prototyping
The benefits of prototyping are: Misunderstandings between software developers and users can be identified when the prototype is demonstrated; Missing functions may be detected; Incomplete or inconsistent user requirements may be detected and can be completed or corrected; A prototype version will be quickly available to demonstrate the feasibility and usefulness of the proposed system to management; The prototype can sometimes be used for training before the final system is delivered. Prototyping may be used in a number of different ways, and various terms have been coined to describe them: Piloting using a prototype to test the feasibility of a design proposal; Modelling building to develop an understanding of the users requirements; Throw-away prototyping both piloting and modelling are throw-away prototypes: once they have achieved their purpose the real system is built; Evolutionary prototyping each prototype built represents a step closer to the final solution.
216
Exercises
1. A feasibility study will often be carried out at an early stage of system development. As well as finding out if the proposal is technically possible the study will also consider economic and social feasibility. In the context of a feasibility study describe one cost, one benefit and three possible social effects that would be considered. (5) AEB AS Computing Qu 7 1996 Often the most critical phase in the systems life cycle is the changeover from the old system to the new one. This may be implemented by parallel running or by pilot running. Briefly describe these installation methods. (3) AEB AS Computing Qu 4 1997 State three different methods of fact finding available during the systems analysis stage of the systems life cycle, and for each of these three methods, give one reason for its use. (6) AEB Computing Paper 1 Qu 11 1996 State and briefly describe two different types of program maintenance. (2) NEAB Computing Paper 2 Qu 1 1995 Describe five main stages in the full life cycle of a computerised system. (10) NEAB Computing Paper 1 Qu 11 1995 Some of the steps in computerising an existing manual system are: systems analysis systems design programming testing changeover to the new system operation and maintenance. (a) Describe three aspects of the existing manual system which would have to be investigated so that the analysis could be carried out. (3) (b) Briefly describe four tasks which will be performed during the design process. (4) (c) Explain how it is possible for all the individual component modules to pass their tests and yet for the system still to fail. (3) (d) The changeover to the new system from the manual system can be achieved in three ways: (i) immediate change; (ii) running the manual and computerised systems in parallel; (iii) gradually introducing the new system a subsystem at a time. In each case, state an application for which the technique is most appropriate. (3) (e) Briefly describe the responsibilities of the systems analyst once the system is operational. (2) London Paper 1 Qu 13 1994
2.
3.
4. 5.
6.
217