BSc Business Administration BBA0110 Management Information Systems Examiner s Report Examination Date: October 2011

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1 BSc Business Administration BBA0110 Management Information Systems Examiner s Report Examination Date: October 2011 Introduction This was a three hour paper where examinees were asked to answer three questions. There was a fairly wide choice of questions across the areas covered in the course. General Comments The papers were produced to a good standard, and it was good to see that the answers were quite consistent as many were able to deliver three strong answers. The result of this was that there were a large number of quite high marks, and no fails. Congratulations everyone. Grade Count I 3 II.1 24 II.2 9 III 3 Fail 0 Having said that, the questions were not equally popular and were not answered consistently well, as can be seen from the details shown in the table below: Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10 Total Min Max Average Count This exam stressed at the beginning that the use of appropriate theory and business examples would enhance the answers. Some questions explicitly mentioned theory and required that it should be discussed. However, relevant theory should be introduced even where it has not been mentioned in the question. The use of business examples was an area of weakness with some examinees giving none at all. It is important to stress that giving examples is one of the easiest ways for students to show that they know the materials and understand their application and limitations. Try and revise examples along with your other revision. It is important to try and use examples from outside the course materials as these clearly demonstrate your grasp of the subject, whereas those who reproduce them from the text do not show this as strongly.

2 Question by Question Comments 1. Large retail organisations employ a wide variety of computer-based information systems in order to support their activities. Considering a large supermarket chain, you are required to: (a) Define the term computer-based information system. (b) Identify the types of computer-based information systems that are likely to be found within a typical branch. Your response should describe the function of each system identified and assign it to one of the six categories of information systems listed in the table below (Bocij et al., 2008). Operations information systems Transaction processing systems Process control systems Office automation systems Management information systems Decision support systems Information reporting systems Executive information systems (c) Selecting one of the systems identified in (a), describe the system in more detail, identifying the hardware, software, data and people resources it employs. (a) There are different ways in which computer-based information system might be defined. Students might offer a general definition of an information system and suggest that a computerbased information system is a form of information system that makes extensive use of ICT (information and communications technology). The preferred definition for an information system (as given on Bocij et al., 2008 p. 42) is: A business information system is a group of interrelated components that work collectively to carry out input, processing, output, storage and control actions in order to convert data into information products that can be used to support forecasting, planning, control, coordination, decision-making and operational activities in an organisation. Alternatively, students can suggest that computer-based information systems make use of people resources, hardware resources, software resources and data resources in order to create information products. Each resource should be described briefly and students should provide examples where relevant. (b) Students should be able to identify specific kinds of information systems used in a supermarket chain. For example, the analysis might begin with the electronic tills used in individual stores, moving through areas such as logistics (systems for stock control, deliveries etc.) and end with a discussion of the decision support systems used by top managers (e.g. modelling, simulation etc.). A good answer would consider the complex relationships and interdependencies between the information systems used. For example, in the supermarket chain, the implementation of EPOS (in

3 the form of electronic tills) is of major importance to areas such as stock control, the management of cashflow and the selection of product lines. In more formal terms, a good answer should recognise that the outputs produced by the systems used on the shop floor (that is, the operational level) form the inputs for systems used in other parts of the organisation (the tactical and strategic levels). Students should attempt to place each system identified within one of the categories given in the table (c) Students should provide a relatively structured response to this task. The outline example in the table below uses a typical stock control system that one might expect to find in a supermarket branch. Students would be expected to discuss this in more detail. Resources needed for a stock control system: Resources People resources Hardware resources Software resources Data resources Examples Stock control staff IT staff Sales assistants (using electronic tills) Bar code readers (for checking stock on shelves) Electronic tills Terminals (for checking stock levels etc.) Printers (for reports etc.) Stock control software Database (holding supplier details etc.) Company documents (e.g. policy on setting reorder levels) Supplier details Pricing information Stock levels Sales data 2. Enterprise resource planning (ERP) software is likely to replace packages used in a single area of the organisation, such as accounting, logistics, production and marketing. Discuss this statement with reference to the benefits and disadvantages of ERP software. Students should start by giving a definition of ERP software and describing its use. Enterprise resource planning (ERP) software is a single system that gives applications for all the major business functions such as production, distribution, marketing and sales, finance and human resources management. It is normally purchased as an off-the-shelf package, with modules for each major business process or business function that are tailored by a consultant. A single package typically replaces many different previous packages. The benefits of this approach include: reduced cost of buying from a single supplier; better transfer of information within the organisation since all the modules of the system are compatible;

4 simplified support and maintenance through a single supplier; use of best-of-breed solutions employed by other companies. The main disadvantage of the use of ERP systems seems to be the high costs charged by suppliers due to the demand for this type of system. This high demand has also given rise to skills shortages. The other disadvantage of ERP systems is shared with all off-the-shelf systems, namely, that the business often has to change its processes or way of working in order to fit the way the software works. This may not present a problem if a company is looking to reengineer its processes since, then, the ERP software can provide a framework. ERP is likely to be restricted to larger organisations due to the cost of customisation of the software for the client. Mass-produced and, thus, cheaper, off-the-shelf packages are likely to be the most suitable option for the small organisation. In summary, there is overwhelming evidence that ERP will replace functional applications in large organisations. In smaller organisations, the role of ERP applications is likely to be assumed by integrated accounting packages with similar functions. 3. Using the Internet as an example of a new information technology (IT), examine how a business could apply IT to counter each of Porter s (1980) competitive forces. A good answer will start by outlining Porter s Five Forces model; a diagram will aid this. It will then go on to consider each force in turn and show how the Internet can be used to counter the force: a) Threat of new entrants. The Internet has relatively low entry barriers due to the low cost and number of resources needed to create a web site or an e-commerce facility. This explains how a company such as Amazon can enter the market and be so successful in eroding the market share of the established competitors. The established companies have the strategic options of becoming early players in the new medium themselves, or taking over their Internet-based rivals before they become too large. The threat of new entrants can also be countered by increasing the investment needed to be successful in a market by introducing more services. b) Rivalry between existing competitors. The arguments given in solution (a) are also valid here. Investment in IS can help offer a better service and customer experience than competitors. Techniques that IS can facilitate include lower prices (achieved through fewer high street presences), online customer service ( web self-service ) and value-added facilities such as special interest communities and ing customers when a new book by their favourite author becomes available. c) Power of suppliers. The Internet has proved very effective in creating links to suppliers through extranets. For instance, Tesco has used the Internet to reduce its costs in the supply chain while increasing customer satisfaction through better-quality produce and a wider range of choices. The power of suppliers can be reduced since, through using an electronic system, the buyer is setting the agenda for how they operate and perhaps increasing dependence on the buyer. Through using technology, it may become straightforward for Tesco to change to another supplier (this is debatable). d) Power of buyers. This is the opposite argument to solution (c). By using the Internet to order goods, it can be argued that the buyer becomes familiar with using a particular service and is then less likely to swap to a competitor since they will have a learning curve in using another company s site and facilities.

5 e) Threat of substitutes. This argument is similar to the threat of new entrants. Companies need to be aware that as well as the Internet offering alternative suppliers, it may also provide an opportunity for new products. For example, customers may read fewer books or purchase fewer paper reports because they are using the Internet as an information source. The strategic response by a company may be to offer these substitute products in addition. 4. In relation to the concept of knowledge management: (a) Explain how knowledge differs from information. (b) Describe two ways of classifying knowledge. (c) Give an example of a business application for each of your answers in (b). (a) (b) (c) The answer should highlight that knowledge is about how information is applied by managers as part of running a business. Many students here just gave one way of classifying knowledge, for instance talking about explicit versus tacit knowledge. But this is only one way of classifying knowledge, and for a correct answer you needed two of: explicit versus tacit management need, e.g. strategy, finance, marketing decisions level (strategic, tactical, operational) information type: customers, competitors etc. Marks were awarded not only for citing examples of general technologies, such as expert systems, knowledge bases and intranets, but also for demonstrating how they can be applied. 5. How might Nolan s stage model be useful to an organisation that is struggling with spiralling IS costs? A good answer will start by describing Nolan s stage model and its six stages in some detail: 1. Initiation 2. Expansion/contagion 3. Control 4. Integration 5. Data administration 6. Maturity The stage model suggests that after the initiation stage, there will be a rapid expansion of spending on IS/IT. The reaction to this is to exert increased control by the following: Raising the profile of IS/IT within the organisation, thus reducing the ability of functional departments to go it alone Centralising the management of IS/IT Linking of projects to realisable business benefits

6 6. Explain the terms custom systems development, ready-made systems and end-user computing. Illustrate your answer with some of the reasons cited in favour of each of these methods of application software acquisition. The answer should be along the following lines. Custom systems development or bespoke development occurs when either in-house IS/IT staff or a third party such as a software house develops applications software for a business. The software is tailored to the organisation s specific requirements. Bespoke solutions are required where packaged software cannot be procured which offers the necessary functionality and/or would require changes in working practices that are unacceptable to the organisation. A ready-made system is a software product that has been written by a company with the intention of selling it to many customers. Benefits include the ability to purchase sophisticated software solutions at a much lower cost than bespoke development, the increased probability that the software will be free from bugs when implemented and access to upgraded versions of the software in return for an annual maintenance charge. End-user computing comprises any use of computers no non-it professionals. In the context of application software acquisition, it also includes end-user development which occurs when non-it professionals develop software solutions themselves, often using PC-based tools such as spreadsheet, database and report generator packages. These applications are usually for personal and departmental use, although, in the case of small businesses, the software may have organisation-wide use. The benefits include the ability to produce tailored solutions without the expense of using IS/IT personnel, the freeing up of IS/IT professionals to concentrate on developing corporate information systems and also the sense of ownership that comes from having developed software oneself. 7. Computer viruses represent a significant threat to the security of organisational computerbased information systems. It is estimated that as many as 1700 new computer viruses appear each month. You are required to: (a) Provide a definition of the term computer virus ; (5 marks) (b) Using relevant examples, describe the ways in which computer viruses can be transmitted; (10 marks) (c) Discuss some of the ways in which organisations can protect against computer viruses. Highlight some of the advantages and disadvantages of each method described. (10 marks) (a) (b) The student should provide a definition for a computer virus, such as: A computer virus is a computer program that is capable of self-replication, allowing it to spread from one infected machine to another. The student s response should deal with some or all of the following ways: Via software downloaded from the Internet.

7 (c) Via disks or other media used with an infected personal computer and then returned to the company s information systems. Deliberately released into the company s information systems, perhaps by a disgruntled employee. Via infected software distribution media. Via illegal ( pirate ) software used on the company s information systems without proper authorisation. The student s response should discuss some or all of the following approaches: The installation of virus detection software. The introduction of formal policies, for example, a formal security policy. Education and training designed to alert employees to the threat posed by computer viruses and allowing them to recognise the signs of infection and react accordingly. Regular audits of software and company-wide scanning of software and data files. If not already implemented, a procedure for making regular backups of important data. 8. Critically examine some of the social and ethical implications of information systems. The answer should identify a list of social and ethical implications, such as privacy, copyright issues, digital divide, computer crime, changing work practices, etc. It should then discuss some of these issues in some depth. Contemporary examples should be used to highlight specific issues. It is not adequate to simply list or describe some ethical or social concerns. The answer should instead reflect on these and critically discuss the implications of the technology for the society at large. Examples and links to literature are very welcome too. 9. Assess the relative effectiveness of interviews versus questionnaires when attempting to establish user requirements in the analysis phase of an information systems development project. Interviews have the following benefits: the ability to gather detailed information through a two-way dialogue; they allow candid, honest responses to be made; an open, spontaneous process that can lead to valuable insights, especially when open questions are used; responses can be easily quantified, especially when closed questions are used; one of the best methods for gathering qualitative data such as opinions and subjective descriptions of activities and problems. They can be ineffective in the following circumstances: The analyst s findings are likely to be coloured by his or her perceptions of how other similar business operations work. Interviewers need to be especially skilled if this is to be avoided.

8 Interviewees may not cooperate with the interview process, either by not taking part or by giving vague and incomplete replies, if the development of a new information system is perceived as a threat through the risk of deskilling, redundancy or a perceived inability to cope with change. The interviewee tells the analyst what they think should happen in an existing situation rather than what actually happens. Staff at lower organisational levels may not be capable of articulating their requirements with sufficient clarity. Questionnaires can be effective if information from a large number of people needs to be gathered this will represent a more efficient use of time than interviewing; the information gained is used to check the findings obtained from alternative fact-finding methods; information that is to be gathered can be tabulated or easily structured. On the other hand, questionnaires mean that respondents cannot go back to the analyst to seek clarification about what a question means; may make the collation of qualitative information difficult if the questionnaire contains open-ended questions this would also be true of interviews, but there is likely to be a larger number of responses to collate from a questionnaire; lack the ability to use verbal and non-verbal signals from the respondent as a sign to ask other or different questions; often have low response rates, although this is not such a problem for internal staff. 10. Describe the benefits, costs and risks of using the database approach. The benefits costs and risks of using the database approach are outlined in the following table. A student s answer should discuss these in more detail, using business examples for a fuller answer. Advantages of the database approach Advantage Program data independence Minimal data redundancy Improved data consistency Improved data sharing Increased productivity of application development Enforcement of standards Description Much easier to evolve and alter software to changing business needs when data and programs are independent of each other Single copy of data assures that data storage is minimised Eliminating redundancy greatly reduces the opportunities for inconsistency Easier to deploy and control data access using a centralised system Data standards make it easier to build and modify applications A centralised system makes it much easier to enforce standards and rules for data creation, modification, naming and deletion

9 Improved data quality Improved data accessibility Reduced program maintenance Centralised control, minimised redundancy and improved data consistency help to enhance the quality of data A centralised system makes it easier to provide access for new personnel within or outside organisational boundaries Information changed in the central database is replicated seamlessly throughout all applications Costs and risks of the database approach Cost or Risk New, specialised personnel Installation and management cost and complexity Conversion costs Need for explicit backup and recovery Organisational conflict Description Conversion to the database approach may require hiring additional personnel Database approach has higher up-front costs and complexity in order to gain long-term benefits Extensive costs are common when converting existing systems, often referred to as legacy systems, to the database approach A shared corporate data resource must be accurate and available at all times Ownership creation, naming, modification and deletion of data can cause organisational conflict