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+++++++++++++++++++++++++++++++++++ Systems thinkers are particularly interested in studying
systems because changing a system frequently leads to counterintuitive system responses. For example feedback loops may operate to either keep the organization in check or unbalance it. Traditional decision making tends to involve linear cause and effect relationships. By taking a systems approach, we can see the whole complex of bidirectional interrelationships. Instead of analysing a problem in terms of an input and an output, for example, we look at the whole system of inputs, processes, outputs, feedback, and controls. This larger picture will typically provide more useful results than traditional methods. System thinking also helps us integrate the temporal dimension of any decision. Instead of looking at discrete "snapshots" at points in time, a systems methodology will allow us to see change as a continuous process.
Understand Select and Focus
Analysis- defines and selects options. Hard systems look at the “How?”: How to achieve and test the selected option HSM Considers:
HS analysis addresses those parts of enterprise that have a tangible form Techniques to address those problems: • Identify cost/savings • Improve methods • Develop User Requirements
Soft System Analysis:
Taking • • • • an Overview Understanding complexity Learning Identifying weakness Understanding relationships
Systems Thinking is a worldview based on the perspective of
the systems sciences, which seeks to understand interconnectedness, complexity and wholeness of components of systems in specific relationship to each other. Systems thinking is not only constructivist, rather systems thinking embraces the values of reductionist science by understanding the parts, and the constructivist perspectives which seek to understand wholes, and more so, the understanding of the complex relationships that enable 'parts' to become 'wholes' as noted in the example below.
Identifying Systematically Desirable Factors • Information needs • Ideal relationships • Necessary Activities • Communication links Developing Models Logical thinking CATWOE Clients – customers of the system, those who benefit from the outputs from the system Actors – who carry out the activities within the system Transformation – the change that takes place within the system or because of the system (conversion of input to output) Worldview - how the system is perceived from a particular viewpoint; assumptions made about the system Owner of the system – to whom the system is answerable and who could cause it to cease to exist Environment – world that surrounds and influences the system, but has no control over it.
Methodologies Systems thinking uses a variety of techniques that may be divided into: Hard systems - involving simulations, often using computers
and the techniques of operations research. Useful for problems that can justifiably be quantified. However it cannot easily take into account unquantifiable variables (opinions, culture, politics, etc), and may treat people as being passive, rather than having complex motivations. HS have an explicit objective governed by fixed rules such as those encountered in decision making. Operational Research is a hard, well defined system Project Management Forecasting Simulation Mathematical Programming Decision Theory
Hard Systems tend to be: Stochastic – Statistically based on prbobablity. Deterministic – fixed inputs and known outputs
Soft systems - Used to tackle systems that cannot easily be
quantified, especially those involving people interacting with each other or with "systems". Useful for understanding motivations, viewpoints, and interactions but, naturally, it doesn't give quantified answers. Soft systems is a field that the academic Peter Checkland has done much to develop.
Soft systems looks at the “What?” of the system; What to do to achieve an improvement, Usually analysis before application or implementation SSM Considers:
Systems that could be envisaged Human activity Clarification of the problem Improve the understanding Based on Ideas: • Examine • Learn about and Study
Provides guidelines for examining an organisation with view of clarifying improvements (if possible) Does not require strict adherence to procedures or rules, but sometimes certain rules assist in practice Difference between SSM & other approaches is the specific inclusion of systems thinking stages Takes an explicit distinction real-world and systems-world activity Actions by analysts are Fact finding activities Can be used by analyst in any order Encourages a process of iteration as the analysts knowledge increases Encourages analyst to examine the situation from a number of different viewpoints Establishes a basis for a debate with a client about possible changes A participative approach, valuable even if participation is limited.
Seven Stages of SMM:
1. Unstructured Problem Situation find as much info as possible, accept many different views, | 2. Expressed Problem Situation Drawing rich pictures, show problem and relationships | 3. Root Definitions Tighten the constructed description of human activity system, Use the CATWOE technique | 4. Build Conceptual Models Logical model of key activities and processes to satisfy root definition | 5. Compare conceptual models with reality Different alternative models can be compared to reality | 6. Accessing feasible and desirable change An analysis of the proposed changes can be made, feasible and desirable? | 7. Action to improve the problem situation Application of the model. SSM does not describe methods for implementing solutions! Only provides a framework through which problem situations can be understood.
Focuses on organisation than structure Diagnosing problems in the organisation Model machines well, but not predictable Cybernetic approach Complex and unitary
Strategic Assumption Surfacing & Testing ( SAST )
Focuses on the participants involved in a problem conext Human & political context and not on the supposed characteristics the problem context Metaphors: machine, organism, brain Simple & Pluralist
Interactive Planning (IP)
From this, you can use alternative methods such as SSADM Structured Systems Analysis & Design Methodology or RAD if considering the development and implementation of an information system. Guidelines for Rich Pictures:
Elements of Structure – aspects or components that are relatively stable or change very slowly Elements of Process – aspects of a situation that undergo change or in a state of flux Relationship between structure and process and between processes – how does structure affect or condition the process or other processes. Include human activities like opinions, gossip, hunches, interpersonal relationships, perceptions etc… Areas of concerns, actual or potential issues or problems should also be shown.
Planning should be continuous, holistic, and participative Process of planning is more important than the actual plan 5 steps: formulating mess, ends planning, means planning, resource planning Complex & Pluralist
Total Systems Intervention (TSI)
Employs a range of systems metaphors to encourage creative systems thinking Choice of appropriate systems methodology Meta-methodology Appreciate strengths and weaknesses of methodologies
Unitary – OR, SA, SD, VSD, GST Simple Unitary Operation Research (OR) Systems Analysis (SA) Systems Dynamics (SD) Complex Unitary Viable Systems Diagnosis (VSD) General System Theory (GST) Pluralist – SAST, IP, SSM Simple Pluralist 1. Strategic Assumption Surfacing and Testing (SAST) Complex Pluralist 2. Interactive Planning (IP) 3. Soft Systems Methodology (SSM)
Don’t impose a system on a rich picture drawing (ie a flowchart) Understanding the boundaries vs. the environment which the system resides Narrow the system of interest, show relationships between them Inputs into the system from the environment The Outputs of the system, desired and undesired, planned and unplanned.
Conceptual modelling should be:
Holistic impression of the system Use verbs to describe Group together generic activities Verify the model by comparing it to the real world
SSM Key Ideas
4. 5. 6. 7. 8.
Systems Dynamics (SD)
System is viewed in terms of elements and flows. Flows being relationships between elements Considered simple and unitary Considers behaviour as caused by the structure
Considers human activity Understanding the situation and problem Clarifies the problem Learns the relationships, processes & links Understands complexity Problem has been clarified Apply hard techniques
Viable Systems Diagnosis (VSD)
Knowledge Creation conversion
Knowledge is the state of knowing Data objects meaningful in some context Information that which informs action Metaphors of the Organisation 1. Mechanical – knowledge as an essentially input to the process 2. Organic/Complex adaptive systems – knowledge as the blood supply or conduit of interaction
Elements of the Organisational Knowledge Management System
Problem Solving Knowledge Access Knowledge Capture Knowledge Storage
Polyani “We know more than we can tell”
Recommendation of setting up a knowledge management system:
Knowledge thru relationship (mentoring and coaching) Knowledge based on capabilities Knowledge of network (video conferencing) form of Socialisation (email forums, open forums & newsgroups)
Human Factors: Formal training processes and informal training Resistance Incentives Management of Changes – Staff changes to restructure knowledge flow and extract knowledge Capture of normal processes Explicit knowledge Use of IT/ICT Documentation Design Procedures – Best Practices
Function of an AIS system (part of an MIS)
Stock Control Purchase Ledger Sales Ledger Purchase Order Ledger Sales Order Ledger Invoicing Payroll
MIS involves everything else in an enterprise: Production, Marketing, R&D, Operations, Human Resources Risk of Electronic Processing Systems Errors Online Fraud Processing Fraud Processing Backlogs Human Error Advantages of electronic Processing of data: 1. 2. 3. 4. Quick High Volume Accurate Ease of Reporting
Qualitative Characteristics of Data 1. Materiality – Threshold Quality 2. Relevance - Predictive Value & Confirmatory value 3. Reliability Free from material error, Faithful
representation Neutral, Complete, Prudent Comparability – Consistency, Disclosure, Discernable in similarities and differences Understandability - User’s abilities, aggregation & classification
Users of Financial Information:
Owners – investors of current and potential Providers of loan capital (banks etc.) Business contact groups (vendors, suppliers, customers) Employees Government (Tax) Media & General Public
Different Comparisons: Actual v Budget Company v Company Company v Industry Year v Year Gearing:
L-T Loans / Capital Employed Capital employed = LT loans + equity (shareholders finds, share capital reserves, bank overdrafts) Indicates the extent to which an organisation’s capital is provided by dept or loan capital, high gearing might suggest high risk Current Ratio: Current Assets/ Current Liabilities Turnover to working capital: Turnover / Working Capital Quick Ratio (Acid Test): Current Assets – stock/current liabilities
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