CHAPTER SIX

MANAGEMENT OF INFORMATION SYSTEM

6.1. Redesigning the organization with information systems: Systems as Planned

Organizational Change

The introduction of a new information system involves much more than new hardware and
software. It also includes change in jobs, skills, management, and organization. In the socio-
technical philosophy, one cannot install new information system, we are redesigning the
organization.
One important thing to know about building a new information system is that is process is one
kind of planned organizational change. System builders must understand how a system will
affect the organization as a whole, focusing particularly on organization conflict and change in
the locus of decision making. Builders must also consider how the nature of work groups will
change under the new system. Systems can be technical successes but organizational failures
because of a failure in the social and political process of building the system. Analysts and
designers are responsible for ensuring that key member of the organization participate in the
design process and permitted to influence the system's ultimate shape.

Linking Information Systems to the Business Plan

Deciding which new system to build is an essential component of the organizational planning
process. Organization need to develop an information systems plan that supports their overall
business plan and that incorporates strategic systems into top-level planning. One specific project
have been selected within the overall context of a strategic plan for the nosiness and the systems
area, an information system plan can be developed. The plan serves as road map indicating the
direction of systems development, the rationale, the current situation, the management strategy,
the implementation plan, and the budget.

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Establishing Organizational Information Requirements

In order to develop an effective information systems plan, the organization must have a clear
understanding of both its long-term and short- term information requirements. Two principal
methodologies for establishing the essential information requirements of the organization as
whole are enterprise analysis and success factors.
Enterprise Analysis (Business Systems Planning)

Enterprise analysis argues that the firm's information requirements can only be understood by
looking at the entire organization units, functions, processes, and data elements. Enterprise
analysis can help identify the key entities and attributes of the organization's data.
The central method used in the enterprise analysis approach is to take a large sample of managers
and ask them how they use information, where they get their information, what their
environments are like, what their objectives are, how they make decision, and what their data
needs are.

The weakness of enterprise analysis is that it produces an enormous amount of data that is
expansive to collect and difficult to analyze. Most of the interviews are conducted with senior or
middle managers, with little effort to collect information from clerical workers and supervisory
manager.

Strategic Analysis or Critical Success Factors

The strategic analysis, or critical factors, approach argues that an organization's information
requirements are determined by small number of critical success factors (CSFs) of managers. If
these goals can be attained, the firm's or organization's success is assured. CSFs are shaped by
the industry, the firm, the manager, and the broader environment. An important premise of the
strategic analysis approach is there are a small number of objectives that managers can easily
identify and on which information systems can focus.

The strength of the CSFs method is that to produces a smaller data set to analyze than does
enterprise analysis. Only top managers are interviewed, and the questions focus on a small
number of CSFs rather than a broad inquiry into what information is used or needed. It is

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especially suitable for top management and for the development of DSS and ESS. Unlike
enterprise analysis, the CSF method focuses organization on how information should be handled.

The method’s primary weakness is that the aggregation process and the analysis of the data are
art forms. There is no particularly rigorous way in which individual CSFs can be aggregated into
a clear company pattern. Second, there is often confusion among interviewees (and interviewer)
between individual and organizational CSFs.

6.2. System Development and Organizational Change

New information systems can be powerful instrument of organizational change, enabling
organizational change, enabling organizations to redesign their structure, scope, power
relationship, workflows, products, and service.

The Spectrum of Organization Change

Information technology can promote various degrees of organizational change, ranging from
incremental to far-reaching. The following illustration show four kinds structural organization
changes that are enabled by information technology: (1) automation, (2) rationalization, (3)
reengineering, and (4) paradigm shifts. Each carries different rewards and risks.

Figure 6.1 Organizational Change carries risk and rewards. The most common forms of organizational
change are automation and rationalization. These relatively slow-moving and slow-changing strategies
present modest returns but involve little risk. Faster and more comprehensive change like reengineering
and paradigm shifts carry high rewards but offer a substantial chance of failure.

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The most common form of IT-enabled organization change is automation. The first applications
of information technology involved assisting employee in performing their tasks efficiently.
Calculating paychecks and payroll registers, giving bank tellers instant access to customer
deposit recodes, and developing a nationwide network of airline reservation terminals of airline
reservation agents are all examples of early automation.

6.3. Alternative system-building approaches

System differs in terms of their size and technological complexity, and in terms of the
organizational problems they are meant to solve. Because there are different kinds of systems, a
number of methods have been developed to build systems. This section describes these alter
native methods: the traditional systems lifecycle, prototyping, application software packages,
end-user development, and outsourcing.

Traditional Systems Lifecycle

The system lifecycle is the oldest method for building information systems and is used today for
medium or large complex systems projects. The lifecycle for an information system has stages:
(1) project identification and selection, (2) project initiation and planning, (3) analysis, (4)
design, (5) implementation, and (6) maintenance. These stages are briefly discussed later on in
this chapter.

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Prototyping

The prototype is working version of an information system or part of the system, but it is meant
to be only a preliminary model. Once operational, the prototype will be further refined until it
conforms precisely to users’ requirements. Once the design has been finalized, the prototype can
convert to a polished production system.

Figure 6.2 The prototyping process. The process of developing a prototype can be broken down
into four steps. Because a prototype can be developed quickly and inexpensively, system
builders, repeating step 3 and 4, it refine and enhance the prototype before arriving at the final
operational one.

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Steps in Prototyping

Step 1: Identify the user’s basic requirements. The system designer works with user only long
enough to capture his or her basis information needs.

Step 2: Develop an initial prototype. The system designer creates a working prototype quickly,
using fourth-generation software, interactive multimedia, or computer aided software
engineering (CASE) tools.

Step 3: Use the prototype. The user is encouraged to work with the system in order to determine
how well the prototype meets his or her needs and to make suggestions for improving the
prototype.
Step 4: revise and enhance to prototype. The system builder notes all changes the user requests
and refines the prototype accordingly.

After the prototype has been revised, the cycle returns to step 3. And 4 are repeated until the user
is satisfied.

When no more iteration is required, the approved prototype then becomes an operational
prototype that furnishes the final specifications for the application. Sometime the prototype itself
is adopted as the production version of the system.

Application Software Packages

Information systems can be built using software from application software packages. There are
many applications that are common to all business organizations. If a software package can
fulfill most of an organization’s requirement, the company does not have to write its owner
software. The company can save time and money by using the prewritten, redesigned, protested
software programs from the package.

If an organization has unique requirements that the package does not address, many packages
include capabilities for customization. Customization features allow a software packages to be

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modified to meet an organization’s unique requirements without destroying the integrity of the
packaged software.

End- User Development

End user development is the development of information system by end user with little or no
formal assistance from technical specialists.

Benefits and Limitation of End- User Development

End – user computing also poses organizational risks because it occurs outside of traditional
mechanisms of information system management and control. When users create their own
applications and files, it same piece of information is used consistently throughout the
organization.

Managing End-User Development

To help organization maximize the benefits of end- user applications development, management
should control the development of end-user applications by requiring cost justifications of end-
user information system projects and by establishing hardware, software, and quality standards
for user developed applications.

Outsourcing
If a firm does not wants use its internal resources to build or operate information systems it can
hire an external organization that specializes in providing these services to do the work. The
process of turning over an organization’s computer center operations, telecommunications
networks, or applications development to external vendors is call outsourcing.

Outsourcing has become popular because some organizations perceive it as more cost- effective
than maintaining their own computer center or information system staff. The provider of
outsourcing service benefits from economies of scale and is likely to change competitive prices
for information systems.

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6.4. Overview of systems development
A new information system is built as solution to some type of problem or set of problems the
organization perceives it is facing. The problem may be one where managers and employees
realize that organization is not performing as well as expected, or it may come from the
realization that the organization should take advantage of new opportunities to perform more
successfully.

Accordingly the following discussion shows six standard phases in a system development which
collectively referred as SDLC.

1. Project Identification and Selection:

This is the first stage where the need for a new or enhanced system is identified. This need may
arise as a result of

 Problems faced by users in day to day operations or their desire to perform

additional tasks (by end users)
 From the realization that information systems could be used to capitalize an
opportunity as a result of the organization’s strategic planning process (by system
analysts)
 A need for efficiency and effectiveness (by the management)
Once potential system development projects have been identified, they have to be classified and
ranked. IS projects can be ranked based on:

 Value chain analysis

 Strategic alignment
 Potential benefits
 Availability of resources
 Project duration or size
 Technical difficulty or risks
The final step in project identification and selection involves choosing some IS projects among
the ones ranked as above. Those projects perceived most likely to achieve business objectives are
selected.

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2. Project Initiation and Planning

This phase involves a preliminary investigation of the system problem or opportunity at hand and
the presentation of reasons why the system should or should not be developed by the
organization. This phase specifically involves such tasks as:

 Assessing feasibility of the IS development project

 Listing the activities involved in the project
 Preparing a (time) schedule of the activities (using tools like PERT and Gantt
charts)
3. Analysis

Analysis involves a thorough study of an organization’s current procedures and the information
systems used to perform organizational tasks. Analysis consists of the following major tasks:

 Requirements determination-involves gathering facts about what users actually want

through interviews, questionnaires and so forth
 Requirements structuring-involves using models or graphical representations of users’
requirements or the current system. It also involves trying to avoid any redundancies
in the current system. The models used can be Data Flow Diagrams, Data
Dictionaries and so forth.
 Finally we have to prepare initial design alternatives and choose between them at this
stage. For instance, we have to decide between buying and building in house the
application software for the proposed system.
4. Design

Design involves converting the description of the recommended alternative system into logical
and then physical design specifications. This means we have to specify

 What input forms would look like

 What output forms (reports) would look like
 What other interfaces and dialogues would look like

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  The database design
 Architectural design of the system
Finally, we have to change all the above in to physical design specifications using either
diagrams or prototypes.

5. Implementation

At this stage the physical specification is turned into a working system, the system is tested and
then put to use. This phase specifically involves:

 Coding
 Testing
 Installation
 Data conversion (data entry)
 User training
 Finalizing documentation
6. Maintenance/User support

A system has to be maintained once it has been implemented. Maintenance requests may arise as
a result of:

 Faults found in the system by users

 Better ways of doing a task using the system or improvements on the system thought out
by users
 Change in the nature of business functions or environment
Over time it becomes obvious that because of prohibitive nature the costs spent to maintain a
system it may be necessary to throw it out and design a new system which takes as back to the
project identification and selection phase.

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