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CHAPTER 1: INTRODUCTION TO INFORMATION SYSTEMS
1.1 What is an Information System?
Most of us experience the effect of different systems every day - getting to work
or school using a transport system, for example, or making a call using the telephone
system. Computerised systems have transformed the world in countless
ways, not least in increased connectivity between people, as provided by
the Internet and the World Wide Web, for example.
To many people, information systems means computers -- and computers are

indeed part of the world of most information systems professionals. But there is more to
the story than simple technology.
Information
Information is the universal commodity, available to all -- but information adds

value only when it meets a real need and when it is acquired, organized and
disseminated in a systematic fashion".
Consider the following diagramin figure 1.1:
Data
Context
Information
Context
Knowledge
Figure 1.1
This suggests that there is a process by which Information and then Knowledge is
produced, somewhat analogous to a manufacturing process whereby a raw material, in
this case ‘Data’, is refined and worked on to produce an end-product. But what are the
components, which convert data into information?
Copyright © Genetic Computer School, 2002

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Data and information are an important part of a computer system. A computer exists to
convert data into information.
Data are unprocessed, raw facts, figures, statistics, concepts or instructions. To be

useful, they must be converted into information.
Information is processed data. Data have been analyzed, organized and

summarized to create useful information. Information is data that has been processed so
that an action or decision can be made from it. A computer exists to create this useful
information by converting data into information through a process called data
processing.
Data processing is the process of manipulation, organization and analysis that is

used to convert data into information.
Data and information in a computer system are organized using a directory

structure and stored in files on the storage medium in use.
Data becomes information when it is used for a purpose, which is of value to the
individual or organization. Take, as an example, the following list into which animals
are divided:
a. Those that belong to the Emperor
b. Embalmed ones
c. Those that are trained
d. Suckling pigs
e. Mermaids
f. Fabulous ones
g. Those that tremble as if they were mad

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As outsiders, the categorization of animals under these headings has no

meaning or value whatsoever but in the context of the ancient Chinese Court where
they were used, it presumably provided valuable information by which the
Emperor managed his livestock portfolio!
The above example (figure 1.1) is rather extreme but to be an effective

information manager, an understanding of the purpose or 'context' in which
information is to be used is essential. That purpose may be to assist the effective
management of the organisation or it may have a wider purpose, for example, to
produce information which can be 'sold' either as a product or a service. This is an
important way of generating profits and, indeed, information related services
account for a higher, percentage of Gross Domestic Product in the U.K. than the
manufacturing sector.
In the same way that one manufacturer's product is more attractive to a

customer because it has features which suit their specific requirements, so too,
information will have characteristics which add value, depending upon the purpose
for which it is required. Some of these are listed below:
Quantity The amount of information provided should be adequate for the

purpose - not so much that the key information is lost, or so
little that it does not present a complete picture.
Suitability It should be appropriate to the skills and competencies of the
manager who will use it and in a form which makes it 'user
friendly'.
Scope The breadth of information supplied will be in accord with the
purpose for which it is to be used, for example, a population
forecast will use census statistics over several decades.
Relevance The subject matter which the information covers is the same as
that which the manager is addressing.
Accuracy As accurate as possible but, in some circumstances, not at the
expense of timeliness - sometimes it's better to be 90% accurate

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than 100% out of date.

Timeliness It should be available when required.
Compatibility The information is based upon standards which also apply to
other information systems, for example, the accounting year as
opposed to the calendar year.
Presentation The information is presented in an appropriate style, for
example, high quality printing and graphics in the case of an
Annual Report.
Managing information is primarily a question of assessing the context and

purpose for which it is to be used; and then deciding the relative importance of
each of the above. For example, annual financial reports need to be both accurate
and presented in a form that makes them intelligible to non-financial personnel. In
the case of internal budgetary statements, presentation may be less important but
timeliness increasingly critical if potential overspends are to be dealt with quickly
and effectively.
Information Systems
Information systems collect, process, store, and distribute information so that

it can be used by people. The information may be about people, places, things, or
events inside an organization or in the environment that surrounds it. People use
the information to make decisions, to keep track of resources, and to plan for the
future. Information has attributes of accuracy, credibility, and timeliness - old
news is not news!
An information system can be defined technically as a set of interrelated

components that collect (or retrieve), process, store, and distribute information to
support decision making and control in an organization. In addition to supporting
decision making, coordination, and control, information systems may also help
managers and workers analyze problems, visualize complex subjects, and create
new products.

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Information systems contain information about significant people, places, and

things with the organization or in the environment surrounding it. By information
we mean data that have been shaped into a form that is meaningful and useful to
human beings. Data, in contrast, are streams of raw facts representing events
occurring in organizations or the physical environment before they have been
organized and arranged into a form that people can understand and use.
Three activities in an information system produce the information

organizations need for making decisions, controlling operations, analyzing
problems, and creating new products or services. These activities are input,
processing, and output. Input captures or collects raw data from within the
organization or from its external environment. Processing converts this raw input
into a more meaningful form. Output transfers the processed information to the
people or an activities where it will be used. Information systems also require
feedback, which is output that is returned to appropriate members of the
organization to help them evaluate or correct the input stage.
Formal information systems can be either computer-based or manual. Manual

systems use paper and pencil technology. These manual systems serve important
needs. Computer-based information systems (CBIS), in contrast, rely on computer
hardware and software technology to process and disseminate information. From
this point on, when we use the term information systems we will be referring to
computer-based information systems -- formal organizational systems that rely on
computer technology.
Although computer-based information systems use computer technology to

process raw data into meaningful information, there is a sharp distinction between
a computer and computer program on the one hand, and an information system on
the other. Electronic computers and related software programs are the technical
foundation, the tools and materials, of modern information systems. Computers
provide the equipment for storing and processing information. Computer programs,
or software, are sets of operating instructions that direct and control computer

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processing. Knowing how computers and computer programs work is important in

designing solutions to organizational problems, but computers are only part of an
information systems.
Housing provides an appropriate analogy. Houses are built with hammers,

nails, and wood, but these do not make a house. The architecture, design, setting,
landscaping, and all of the decisions that lead to the creation of these features are
part of the house and are crucial for finding a solution to the problem of putting a
roof over one's head. Computers and programs are the hammer, nails, and lumber
of CBIS, but alone they can not produce the information a particular organization
needs. To understand information systems, one must understand the problems they
are designed to solve, their architectural and design elements, and the
organizational processes that lead to these solutions. Today's managers must
combine computer literacy with information systems literacy.
1.2 Computer Information System
The Computer Information System is an ensemble of hardware and software

applications. The Information system is an analysis of a problem domain. It is
"information oriented". For example, a banking compensation system or a telecommunication
protocol are "information systems" in our sense. Their definition does not imply
the use of specific software or hardware packages.
Today the computer information system is called by a growing number

"Information system" - maybe they find that it sounds smarter! So that company
hires Oracle specialists for their "information system"!
Whatever the name, the flavor is the same. Please note that in our definition
information systems are not platform specific (hardware, software, language etc...).
They might be called also domain systems, abstract systems, general systems etc. The
interesting fact is that these systems may be seen also as "knowledge objects", one of
the two views related to knowledge management. This view enables the way to
"conceptual objects reuse".

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The Computer Information System is derived from the Information System by

taking into account the platform specifics.
1.3 Why does information have to be managed?
♦ There is so much more of it these days!
The sheer volume of information available through advances in computing and

communications means that managers have to be clearly focused on what information
is important to them and what is not. Recent articles in newspapers have commented
on the problems associated with too much information and new medical conditions
such as 'information fatigue' and 'information overload’ have started to enter our
vocabulary.
The latest lap-top computers can hold and process vast amounts of data but the capacity
of our 'neck-top' computer has not altered over the last few hundred years!
♦ It is a valuable asset in most organizations
Information-based organizations now generate more wealth than manufacturing

industries in the U.K. In some organizations the only product they sell is information -
and that is often purchased by other organizations which add further value to the
information before selling it on. It is essential, therefore, that such a valuable product
is managed efficiently.
♦ It can provide a competitive advantage in the market place
Information facilitates chance
Exposure to new ideas and concepts from outside the business can stimulate managers to
adopt and adapt these concepts in their own business environment. There is a danger for
managers, who stay in one job with one company for a long time, that they become insular in
their approach and resistant to change. The working environment, as we move into the 21st
Century, requires a workforce that is multi-skilled and able to adapt and keep up to date with
change. There is much that organizations themselves can do to ensure that their employees have
access to new information and learning opportunities. It is also the case that employees will

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have to take greater charge of their own personal development in the new organization
structures being created in the Information Age.
♦ Information enables managers to manage effectively
If managers do not have the right information about how the business is
performing then they are unlikely to be able to make the right decisions (or are more
likely to, make the wrong ones).
Managers need:
• Essential decision making information in a usable form
• Information when they want it (at a time that suits their workflow)
• Real-time information (so decisions are timely and relate directly to what is
happening)
• To see trends developing (such as cost or time blowouts, teams not

performing)
• Information to manage cross functional teams doing many projects and

tasks
• To be notified of any changes that are likely to affect them
1.4 Roles people play in an information environment
Applications support organizational goals and such goals are held by those for
whom the success of the firm is critical; for this discussion, they are called stakeholders.
This group includes boards of directors, shareholders, unions, communities, and
suppliers. The goals represent desirable conclusions for clients. Clients may be inside or
outside the organization. The classes of individuals that have direct interaction with the
application are called direct users. Assisting these role players are developers, who may
work for an organization, a client or a user, and they may be direct employees or
contracted specialists.

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CHAPTER 2: FUNDAMENTAL TYPES OF INFORMATION SYSTEM
2.1 Transaction Processing Systems (TPS)
Introduction
A transaction Processing System is an exceptionally powerful and flexible

transaction processing environment for both mobile and fixed-base data collection
equipment. It provides the sophisticated connectivity needed in today's complex
industrial, warehousing, distribution, and other environments.
Transaction Processing System has numerous features important in creating

systems and solutions for demanding transaction processing requirements. With
Transaction Processing System, you can:
• Develop high-performance data collection and bar code printing systems

across client/server networks.
• Revitalize legacy software and hardware in a state-of-the-art transaction

processing and bar code environment Interface with different types of host and
network computers at the same time.
• Access multiple local and remote distributed databases, concurrently and

simultaneously.
• Select and use terminals and printers from multiple leading manufacturers, all
in one system.
• Combine 5250 and 3270 intelligent terminal emulation with data collection
functionality using a GUI development environment that involves no host code
rewrites.
• Run the same transactions on your radio-frequency devices that you run on
fixed devices and PCs, including intelligent emulation.

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• Select from a variety of automatic, dynamic servers and data backup schemes,
which are available to ensure minimum downtime and maximum productivity.
Transaction Processing System's modular architecture (refer to figure 2.1) allows

you to choose the functionality that you need - you can always add on additional
functionality as your requirements expand.
Transaction processing systems [TPS] support the organization's daily activities

and maintain the majority of the organization's internal data. These systems usually
employ simple but highly repetitive processes but require the capability to deal with
high volumes of transactions with great accuracy and high security. In the past,
transactions were completed using batch processing, but today most transactions are
completed immediately using on-line transaction processing [OLTP] systems.
Figure 2.1 Transaction Processing Systems Architecture
To implement on-line transaction processing, master files containing key

information about important business entities are placed on hard disk drives where they
are directly accessible. The transaction files containing information about activity
concerning these business entities, such as orders placed by customers, are also held in
on-line files until they are no longer needed for everyday transaction processing
activity.. This assures that the transaction data is available to all applications, and that
all data is kept up-to-the-minute.

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Users with the proper database permissions may download data from the database
to another location and upload changes to these on-line files as soon as changes are
required. When the transaction files are no longer being "actively" used, they are not
deleted. Instead they are archived in a special data storage facility called a data
warehouse.
A Transaction Processing System (TPS) is designed for Operating Management. It

is also called Electronic Data Processing (EDP). It has a limited area of functionality,
and is designed for one area of the business.
It uses only data that is internal to the company. There are some possible
exceptions, however. Inter -branch banking uses TPS as well as direct deposit of
employee's pay from various companies and government institutions.
Reports and other outputs from Transaction Processing Systems
The outputs of TPS provide operational details, summary reports, and exception
reports, which help supervise and control routine operations. Exception reporting
provides a feedback loop to the operational manager about any unusual or unexpected
activity that may require attention. Transaction processing systems maybe divided into
major functional areas. Accounting provides systems to handle general ledger, payroll,
and accounts. Marketing has TP systems to handle sales, promotion and advertising
activity. Manufacturing requires transaction processing systems and operational
feedback from production processes. Manufacturing reporting systems must often be
designed as real-time systems to allow operational managers and supervisors to closely
monitor on-going operations. Human resources needs systems to support its daily
operations in recruiting, maintaining employee records, providing benefits, and
monitoring occupational conditions. Finance requires maintaining information on cash
reserves and investment holdings, and the monitoring of changes to tax and fiscal
regulations.
Many systems, such as order processing, may involve processes that cross
funtional boundaries in the enterprise. For example, an order may concern sales,

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manufacturing, distribution, and accounting. Transaction processing systems may

depend upon each other in intricate ways that are not always apparent to the users of
these systems.
When transaction data grows old, it can still be of value to the organization.
However, it is not used frequently and takes up valuable disk space, so such data is
often moved to other lower cost storage areas. In the past, archived data was difficult to
access because the data archives were not well organized. Today, such archives are
placed in data warehouses, which are data storage facilities that are managed by special
database programs designed for that purpose. Analysts can then make use of on-line
analytical processing [OLAP] tools to investigate either the current transaction data or
the data that has been retired to the data warehouse facility. Using the company's data
archives to determine trends and to extract other useful information is often referred to
as data mining.
2.2 Management Information Systems (MIS)
MIS stands for Management Information Systems. MIS is a branch of

Management that involves the development, maintenance and understanding of
Computer Information Systems from a business perspective. It is difficult to say exactly
what this field of management entails because, like the computers and technology the
field involves a rapidly changing and expanding area. Much like accounting, marketing
and financing, the Management of Information Systems has become a crucial function
in the operation of modern day business. Now and in the foreseeable future, the success
of a company will increasingly depend on the quality of its Information Systems and
technologies. MIS is a unique field in that it is able to combine the uses of technology
while at the same time having an appreciation for the business environment as a whole.
A widely recognized device for organizing types of management information

systems uses the MIS Framework. This framework is based upon two dimensions, the
level of managerial responsibility and the degree of problem structure. Structured
problem solving is handled by a variety of reporting levels. Detailed operational reports
are produced by transaction processing systems [TPS]. These in turn provide data to more

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highly summarized managerial reports used at higher levels. Management information

systems [MIS] produce standard "MIS" reports in printed and on-line "soft copy'
versions to assist middle management in their tactical decision making roles involving
the allocation of resources and the oversight of company operations. Executives at the
top rung of the corporation may have executive information systems [EIS], also called
executive support systems [ESS] to supply their special needs for structured reporting.
For less structured problems, and most often at higher management levels,
decision support systems play a role in modeling from a wide variety of sources, both
internal and external. Such problems are often called unstructured problems although
that term can be misleading. The structuredness of a problem must be viewed as a
continuum running from the fairly unstructured to the highly structured types of
problems. No problem that can be analyzed by any technique can be considered as
totally unstructured.
Management Information Systems (M.I.S.) is a career area which focuses on two

related topics:
• Organizations - the business processes, and people as problem solvers and

decision-makers.
• Technology - current information technology so vital for any organization.
The MIS field deals with all the information and problem solving activity of a
modern, successful organization. The MIS discipline brings together the various
business areas, computer science, and quantitative analysis techniques. This program
provides the theory and methodology to analyze, design, implement, and manage an
organization's information technology and systems.
Management Information Systems (MIS) is a valuable new aspect of every

business organization. Basically, MIS is looking at what types of computer systems
organizations need and adapting the systems for their needs. The MIS field revolves
around the fact that information and knowledge is one of the most valuable business

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assets. Without proper information channels, a business would lose its advantage over
other companies.
In the past, many people were turned off by the idea of using a personal computer
in the everyday workplace. Many more people are starting to get comfortable around
computers. New programs are always emerging that combine powerful applications
with ease of usage. For instance, Microsoft, easily the biggest computer software
provider in the world, has numerous software programs that even a beginner can tackle
without much commotion. MIS specialists must take and apply their knowledge of both
computers and people to the common business. They need to design programs that
appeal to and motivate employees. MIS specialists must learn an overview of the
organizational, strategic, and technical issues surrounding the management of
information in businesses today. By building a solid base at businesses everywhere,
MIS specialists help prepare future managers to manage information as a resource and
to identify opportunities for using information as a competitive advantage.
Management Information Systems (MIS) are used in businesses to help make

decisions. They are an implementation of computer based processing and/or manual
procedures yielding useful and timely information for decision making.
A MIS is composed of procedures. In a MIS, procedures are sequences of steps to

co-ordinate processing. Some are performed by staff and some by computer specialists.
A business has many procedures, we refer to four of the common ones below:
• Payroll
• Personnel
• Accounting
• Inventory
A Management Information System (MIS) is designed to help Middle

Management decisions.

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It is an information reporting system, which receives data from all sections of the
business. The system is connected to a more complex network than a Transaction
Processing System.
A MIS uses internal data as well as some external data.
2.3 Decision Support Systems (DSS)
The group of tools and techniques, together with their definitions and descriptions
of their interrelations, that assist in the specification and recording of an analyst's
judgments about evidence, and inferences going into a hazard identification decision.
A DSS is a tool (e.g. computer programme) or process (such as a best

management practices procedure), whose utility is related to its ability to support
decision-making in the real world situation and not to provide the solution itself by
representing a system involving those real-world variables (physical, economic and social)
and their interrelationships, whose complexities can be simplified for inclusion in the
tool or process, where these variables and interrelationships can be customized to
comply with individual situations and, where these variables and inter-relationships can
be customized and/or interfaced with individual decision-makers, more particularly
with their objectives, resources and constraints.
Decision Support Systems can be differentiated from other types of information

system in that they are directed towards use by users who are skilled in their subject
area and who are supported rather than placed by the use of the computer. Decision
support system users have a good knowledge of the problems area of the system and
therefore need to be able to interact effectively with a flexible system which provides
the type of support required.
Decision Support Systems (DSS) is a dynamic and rapidly changing field which
touches on a wide range of computing topics. Decision Support Systems have been
defined as:

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Computer Based Systems are systems that help decision makers confront ill
structured problems through direct interaction with data and analysis models.
The emphasis is on problem solving tasks, which are semi-structured, ie. they
combine human judgement with the use of computing tools and techniques. DSS do not
replace managerial judgement but rather provide support for decision making - the final
agent remains the human.
Computer applications for management support are increasing and the availability
of microcomputers has dramatically increased the number of systems on managers
desks.
2.4 Office Automation Systems (OAS)
Office Automation involves the planned application of integrated information

handling tools and methods to improve the productivity of people in office operations.
Although the handling of information by office people is the focus of this new
technology, other aspects of the office will be affected. These include factors such as
the organization of functions and lines of reporting, training for new methods, work
space design, travel patterns, branch office location, home vs office work, hours of
work, employee morale, and job classifications. Organizations that harness office
automation products will need to deal with many more than just technological issues.
About 22% of the US work force is now in the office, with that percentage rising.
Labor costs account for about 70% of the total office costs in our economy and salary
costs are increasing about 6% each year. During the past 15 years there has been
relatively little increase in productivity of the office work force, in contras with the
manufacturing sector where the average productivity has more than doubled. The cost
of new technology aimed at increasing the productivity of office workers is going
down, while the capabilities of office automation systems have been rapidly increasing.
Office automation will impact industry and government organizations in very

significant ways with both COST DISPLACEMENT and VALUE-ADDED results.

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These two terms are now being used by people who are considering the potential
payoffs of office automation to their organizations.
Cost displacement applications have the objective of achieving overall reductions

in support staff costs or of increasing work volumes without adding support staff. Such
applications typically center around WORD PROCESSING and provide the base for the
more advanced value-added applications.
Value-added applications are viewed as being directed toward improving

managerial and professional staff productivity (and effectiveness) through use of more
integrated office automation systems that can directly affect their work.
The value-added approach deals with far more fundamental issues than the
replacement of some support staff positions with word processing pools. Its focus upon
individuals and groups of managers and professionals as targets for productivity
improvement brings with it opportunities for significant increases in organizational
effectiveness and major cost benefits in the largest segment of the office cost spectrum.
For any organization, management choices at many levels will affect the balance
between reducing total office costs (cost displacement) or increasing the total office
effectiveness (value-added effects).
Word processing applications have, until recently, been equated with the term
office automation. It is interesting to note that, on the average, typing tasks comprise
only 30% of the secretaries' and typists' work -- and thus account for only about 2% of
the total office salaries. The next few years will see a very rapid growth in the
introduction of advanced technology into offices and in applications with more impact
on managers and other non-clerical people, bringing with it broadened perceptions of
what office automation really includes.
Office Automation is likely to become one of the fastest-growing and most

significant new industries of the century. It will apply electronic technology to a broad
new set of applications and bring significant change to many of the ways in which

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people and organizations work -AUGMENTING their capabilities and increasing both
the quantity and quality of their contributions.
2.5 Executive Support Systems (ESS)
An enterprise management information system encompasses the information flows

in an entire organization. The applications for MIS fall into five categories; localized
applications, interdepartmental applications, business process redesign, business
network redesign, and business scope redefinition.
Interdepartmental information systems integrate the activities of different

departments into a single business system that produces appropriate coordinated
responses to the enterprise's environment. Both localized and interdepartmental systems
involve little redesign of the underlying business processes; they support the existing
processes.
Business process redesign requires the nature of business processes to be

redesigned as the information system development progresses; it becomes a vehicle for
change and improvement.
Business network redesign concerns itself with how multiple enterprises work
together; consideration is given as to how information is structured and handled as it
crosses organisational boundaries.
Business scope redefinition consists of applications that change the nature of the
business. Interdepartmental information systems use a shared or corporate database
facility. Procedures and practices are consistent and coordinated by the nature of the
database structure. Departments are provided with different views of the information
but the underlying data is consistent. Data captured in one department may be the
source of information for the activities of another department. Because such systems are
standardized, changes to data and the information produced have to be carefully
controlled. There is a need for enterprise systems management.

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Interdepartmental management information systems differ from workgroup

systems in several ways. Workgroups will know each other whereas users of an
interdepartmental system are distant and the only common factor may be the use of an
information source, they are separated both physically and organisationally.
Workgroups may number in the tens of members, interdepartmental systems could

supply the information needs of hundreds.
Data contained in interdepartmental systems tends to be more complex and

heterogeneous in nature.
Whilst workgroup systems tend to be highly functional, indepartmental systems

cross functional boundaries coordinating the information needs of several process
related departments.
Business process design is emerging as a necessary step to optimize the use of

information technology. Rather than automating existing processes, the underlying
business processes are redesigned to take advantage of the new technologies.
Business process redesign can have dramatic impact for an enterprise; This is attributed
to the change of culture, the redesign of work, the retraining or the loss of staff.
Business network redesign refers to the use of information systems to enable

groups of enterprises to interact more productively. Four types of network redesign can
be identified; electronic data interchange (EDI), in which organisations agree on a
common set of data standards, interenterprise system access in which organisations use
each other's systems, interenterprise system integration in which enterprises develop
shared information systems and knowledge networks use information technology.
Business scope redefinition produces applications, which changes the nature of an

enterprise's activities. New technologies can make it possible to enter new markets,
enable new products or extend or enhance the capabilities of existing ones.

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CHAPTER 3: ORGANIZATIONS AND INFORMATION SYSTEM
Introduction
Organization
MIS Framework - Nolan & Wetherbe
Figure 3.1 Effectiveness of Organizations
It could be said that the role of the organization is to support creative individuals
while providing an environment where they can create knowledge.
But why is it important for organizations to provide this supportive environment?

Well, one only has to look at the changes that have taken place on a macro-economic
scale, in the creation of wealth; the reduced contribution by the manufacturing-based
industry sector and corresponding expansion of the service and information sectors. This
shift was identified in the early 1960's, and the term "knowledge worker" was born. Since
that time, knowledge has increasingly been viewed as a resource with knowledge workers
playing a pivital role in many organizations.
An organization is defined as a systematic arrangement of people to accomplish

some specific purpose. Organizations share three common characteristics.

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a. Has a distinct purpose.
b. Is composed of people.
c. Develops a systematic structure that defines and limits the behavior of

organizational members.
All effective organizations are not necessarily efficient. Effectiveness is concerned

with goal attainment, while efficiency is concerned with resource usage (refer to figure 3.1).
An organization can achieve its goals, but do so by being wasteful and using an
inordinate amount of input resources.
3.1 Workgroup Information Systems
A workgroup is a collection of people who work together to achieve a common goal.
In homogeneous workgroups, everyone in the workgroup fulfills the same role. As

such workroups grow so does productivity, in 'a" linear fashion. Providing information
systems for these workgroups can be very cost effective since everyone carries out
similar work.
In heterogeneous workgroups there are several roles and jobs covered by

individuals within the group. For this reason productivity does not increase in a linear
progression when additional people join the group. The increase in productivity is more
related to the previous knowledge of the individuals joining the group. Training and
communication becomes an important issue. Since there are many roles and jobs
covered by a heterogeneous group the provision of information systems can be
expensive and difficult to support.
Workgroup norms can play an information role in the acceptance or rejection of

certain information systems. The influence of workgroup attitudes has a large part to
play, peer pressure can persuade or deter acceptance, fears can be allayed or reinforced.
Workgroups can be permanent or temporary. They can exist on single sites or be

distributed throughout an organization.

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Workgroup effectiveness can be measured by output, personal satisfaction of the

members, and by the group capacity for further cooperation. Effectiveness is
determined by group effort, knowledge and skill. The strategies and approaches used to
perform work are important.
The major difference between personal and workgroup information systems is the
need for workgroup systems to control the shared use of resources. This must be
achieved without inconvenience to individual members of the group. Granularity refers
to the size of the shared information resource. Large granularity means that group
members share large information sources with the possibility of delays due to
contention problems but with small information systems adminstration overheads.
Conversely, small granularity produces few contentions but administration overheads
rise accordingly.
The major categories of a workgroup information system are hardware sharing and
data sharing facilities. Hardware sharing applications allow members of the workgroup
to share many hardware devices, some of these devices may be uneconomical for a
single user system.
Systems that focus on communications are applications such as group E-mail

systems that provide a number of mailboxes that can be for individual mail or group
and project mail. These systems can be passive or dynamic, the user or group has to
access incoming mail in the static system, whereas, in the dynamic system the user is
told that mail has arrived. Group E-mail systems are designed to enhance group
coordination. Group conferencing including electronic bulletin boards,
videoconferencing with white boarding, help to ensure coordination and often support
group dynamics in problem-solving settings.
Collaborative writing systems let users share the writing of documents. These
applications coordinate and control the users efforts. The tedious copying and altering
of documents in a single user environment is avoided.

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Analytical support for workgroups is typically provided by workgroup

spreadsheets. These are often composed of spreadsheet templates, the coordination of
these spreadsheets can be complex. To make these work effectively it is essential that
good documentation and training is provided.
Group Decision Support Systems are applications which allow individual users to
use group workboards in their own decision making process. Group decision making
can be facilitated by a controller with the group using support applications.
Another important category in workgroup information systems is the retrieval of

information, including group database management systems, workflow automation
systems, group scheduling systems, group project management systems and shared
textbase systems.
Group database management systems have similar functionality to personal

database systems but are more complex and tend to concentrate on workgroup
coordination.
Workflow automation applications provide automatic routing of forms used in

routine work processing. They also track the progress of forms. Groups can often
improve processes by looking at the output from workflow systems.
Trucking and monitoring is provided by similar systems provided for personal

information systems but they are more complex. Project management has more
complexity with the focus on group coordination.
Group textbase systems are similar to personal systems but shared documents are
indexed for group or individual retrieval.
3.2 Personal Information Systems
Personal computer systems are used to help an individual facilitate their work.
This facilitation can be considered as support for communication, analysis and tracking
and monitoring.

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Typical communication support is provided by word processors, which can be

used to produce simple text documents or more sophisticated documents containing a
wide range of colours, fonts and even graphics. The functionality of these programs can
often provide templates, boilerplate and automated document production. They also
feature mailmerge and support scripting and macro languages to extend the
customization of document production. Within the scope of communication support lies
the desk-top publishing application and the presentation application. Both can produce
professional quality output that can be shown on computer slideshows or be printed.
Analytical support is given by such applications as the electronic spreadsheet

capable of modelling quite complicated business activities. Many such programs are
supported by scripting and macro languages and can support graphics and database type
functionality. These applications are often enhanced to provide connectivity to various
internal and external data sources to enable data extraction. Other types of analytical
programs are the operational research ones providing linear programming and other methods.
Tracking and monitoring support is given by database and project management

applications. A database application includes a database, some means of data entry,
reporting facilities and possibly applications programs. Users can interface with many
databases using default, customized or programmed access. A common interface
standard is SQL, structured query language. Project management applications keep
track of a project's progress with regard to the allocation of resources and the
management of tasks. A variety of techniques are used, typically, Gantt charts, critical
path graphs and the like.
Integrated application provide an environment in which all applications can work

statically or dynamically with each other.
Changes made to database application will dynamically update speadsheet models.

In the Microsoft Windows environment this is achieved using DDE, dynamic data
exchange and OLE, object linking and embedding.

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3.3 The System Development Process
Systems Development Life Cycle
Define Problem
Develop/ Code
Figure 3.2 The System Developement Life Cycle
System Development Life Cycle
From concept to production, you can develop a database by using the system
development life cycle, which contains multiple stages of development. This top-
down, systematic approach to database development transforms business information
requirements into an operational database. (Refer to figure 3.2)
Strategy and Analysis
Study and analyze the business requirements. Interview users and managers to
identify the information requirements. Incorporate the enterprise and application
mission statements as well as any future system specifications.
Build models of the system. Transfer the business narrative into a graphical
representation of business information needs and rules. Confirm and refine the model
with the analysts and experts.

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Design
Design the database based on the model developed in the strategy and analysis
phase.
Build and Document
Build the prototype system. Write and execute the commands to create the tables
and supporting objects for the database.
Develop user documentation, help text, and operations manuals to support the
use and operation of the system.
Transition
Refine the prototype. Move an application into production with user acceptance
testing, conversion of existing data, and parallel operations. Make any modifications
required.
Production
Roll out the system to the users. Operate the production system. Monitor its
performance, and enhance and refine the system.
The SDLC procedures ensure that timely and accurate information concerning the
progress of system development is available to stakeholders and others in the university
community. System Development Life Cycle refers to a methodology for developing
systems. It provides a consistent framework of tasks and deliverables needed to develop
systems.
The SDLC methodology may be modified to include only those activities

appropriate for a particular project, whether the system is automated or manual,
whether it is a new system or an enhancement to existing systems.
The SDLC methodology tracks a project from an idea developed by the user,
through a feasibility study, system analysis and design, programming, pilot testing,

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implementation and post-implementation analysis. Documentation written during

project development is used in the future when the system is reassessed for its
continuation, modification, or deletion.
Alternative Quality Process - an alternative quality process is a systematic

sequence of tasks for planning, organizing, and monitoring for quality performance
improvement. It begins with customer requirements, focuses on root causes or barriers
to improvements, and ensures that decisions and actions are based on real data; it
includes problem solving processes such as the plan-do-check-act model. Detailed
descriptions are available in the materials located in the quality center or available
through team training.
System - an organized collection of independent tasks and processes that is

designed to work together in order to accomplish specific objectives. The processes and
tasks typically receive input(s) from and provide output(s) to other processes and tasks
and even other systems. The tasks and processes may or may not be supported by
automation.
The system development life cycle (SDLC) is an organized approach to obtaining

an information system. The SDLC is formalized in many organizations, with detailed
instructions outlining reporting requirements, specific tasks that must occur in each
phase, and individual responsibilities. Major objectives of system development are to
create a system: with the desired capabilities, within budget, and on time.
The SDLC assessment process involves three components:
1. Understanding the current level of achievement (baseline assessment),
2. Defining the goal or achievement objective, and
3. Developing a plan to achieve the defined goal.
The System Development Life Cycle (SDLC) is intended to provide a set of

guidelines for the successful completion of application system development projects.
The SDLC consists of seven distinct Phases as shown in Figure 3.3 below:

Page 29
Phase 1 Phase 2 Phase 3 Phase 4 Phase 5 Phase 6 Phase 7
Planning Definition Analysis Design Build Transition Warehouse
Each Phase contains one or more individual deliverables associated with the Phase.
Figure 3.3
Planning
This Phase of the SDLC is required to determine the feasibility of a particular

project proceeding, or not. This Phase will produce a high-level overview document of
the proposed project. It will contain information relating to the project's requirements
and will enable the formalization and definition of the scope of the project.
This is the first Phase in the SDLC. The Project Charter deliverable is the first
major deliverable in the project. The Project Charter is to be produced prior to the
commencement of a project.
Due to fiscal year budget allocations and fiscal contract restrictions the Project
Charter will typically refer to project activity up to the end of the fiscal year in which
the project starts. There may however be exceptions and special circumstances when a
Project Charter will span more than one fiscal year. In these cases, this should be
specifically stated in the Project Charter document.
For projects spanning more than one fiscal year, an updated Project Charter will
be required for each year that the project is undertaken, prior to the start of the fiscal
year (normally done in March of each year).
The updated Project Charter for a subsequent fiscal year(s) will mainly focus on
identifying the scope and deliverables of the project for that particular fiscal year. The
updated Project Charter will also include revisions (as appropriate) to project team,
budget, schedule and project status. The Business Champion is responsible for
producing the Project Charter. However, the Business Champion may delegate this

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activity for completion. Together with appropriate members of the User Team, the
Business Champion will provide information for the completion of the Project Charter.
The Project Sponsor is responsible for reviewing and approving the Project
Charter and securing the necessary funding for the project
The draft Project Charter must be submitted to the Information Systems Branch
(ISB) for Business Analyst review and QA against standards.
The completed Project Charter will be submitted to the Executive Management

(Steering _ Committee) for approval and budget allocation authorization.
Definition
This Phase of the SDLC defines exactly what, who, when and how the project will
be carried out. This Phase will take the deliverable from the previous Phase (Project
Charter), expand on the high-level project outline and provide a specific and detailed
project definition.
This Phase is the first activity of the project after obtaining approval and funding
to proceed.
The description of this Phase here assumes that the following associated activities
have been completed:
• the preparation and distribution of an RFP;
• the selection of a contract development team; and
• the appointment of a Project Manager.
This Phase provides an effective way of communicating to project stakeholders,

the project scope and schedule as well as any risks or constraints related to the project.
This is the second Phase in the SDLC but the first Phase of the project itself. The
Project Statement deliverable from this Phase must be completed and signed-off prior
to commencing the next phase of the project.

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Agreement to the Project Statement ensures that everyone involved in the project
is clear on the project scope, objectives, goals and outcomes.
The Project Manager is responsible for producing the Project Statement. However,
the Project Manager may delegate this activity to the Development team for
completion.
The Business Champion, Business Analyst and appropriate members of the User
Team will provide project information which will support the completion of the Project
Statement.
The draft Project Statement must be submitted to the Information Systems Branch
for Business Analyst review and QA against standards.
The completed Project Statement will be submitted to the Business Champion and
Project Sponsor for approval and sign-off.
Problems can be viewed as unsatisfied needs. They can be seen as opportunities to

develop new and better methods, procedures and if appropriate computer systems. The
definition phase should be used to examine all aspects of the problem and to come up
with a clear definition of the problem. The scope of problem definition varies. In an
informal setting simply specifying business application requirements may be sufficient.
In a more formal case the product of the definition phase is a FUNCTIONAL
SPECIFICATION - a precise description of the functional requirements of a computer
system.
The definition phase can be viewed as a series of steps;
• Getting to know the application.
• Deciding whether a computer system can meet the application's requirements

and how it will do so.
• Defining processing requirements constraints, costs and benefits.
• Developing functional specifications and prototypes.

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• Reviewing the specifications and prototypes.
In some instances the steps leading to the functional specification and evaluation
might be quite informal. The systems analyst uses the simple techniques of questioning
and comparison. By asking questions, the analyst can consult references that have
already addressed the problem or can talk to people with more experience in the
problem area under consideration. By making comparisons the analyst will be able to
recognize and isolate those parts of the problem that are familiar.
In other instances, as in a large organization where many projects are in

competition for management's attention more formal analytical techniques, such as
feasibility studies, top-down design and structured analysis are required.
The more people that need to interact in the decision-making process the more
formal the analysis and specification of the functional requirements will have to be.
One important aspect of functional specifications is their value as a communication

tool between .w
Analysis
This Phase of the SDLC is required to understand and document the users' needs
for the system. This Phase will document, in significantly more detail than the Project
Statement, the scope, business objectives and requirements of the current/proposed
system.
The emphasis throughout this Phase is on what the system is to do. During the
analysis and specification, the technical aspects and constraints should be considered,
but should not be influenced by implementation characteristics. The technical aspects of
the system are addressed in the Design Phase.
During this Phase the Data Conversion requirements, at a high level, will become
known. This will commence a parallel set of SDLC Phases for the Data Conversion
associated with the system. Data Conversion will follow Phases 3 to 6 of the SDLC.
Depending on the size and complexity of the total project (system and data conversion)

Page 33
the Data Conversion Application could be either incorporated as a section or

component of the main system Design deliverable, or a separate Data Conversion
deliverable of its own.
In addition, the Data Warehousing requirements will also be identified during this
Phase and a parallel set of Data Warehouse SDLC Phases should commence.
Depending on the business requirements of the system, it is possible that the Data
Warehousing aspects will only be considered once the system has been operational for a
while.
These parallel streams of SDLC are shown in more detail in Figure 3.4 below. I
Figure 3.4: SDLC Parallel Processing Streams
System Development Data Conversion Data Warehouse
Life-Cycle Phases SDLC Phases SDLC Phases
The Detailed System Analysis is to be stated in a language that reflects the

background of the user base. Most requirements are written as natural language
sentences supplemented with diagrams, graphics and tables of detailed information.
The Project Manager is responsible for producing the deliverables associated with
the Detailed System Analysis. However, the Project Manager usually delegates this to

Page 34
the Business Analyst. This deliverable has significant input from the Business
Champion and User Team. In cases where the production of some or all of the Phase's
deliverables have been delegated, the Project Manager will still maintain overall
responsibility for the production of quality deliverable(s) submitted to the Business
Champion for review and sign-off and ISB for Quality Assurance.
The Project Manager will provide initial Quality Assurance of the deliverable
prior to review by ISB QA, User Team and the Business Champion.
The draft Detailed System Analysis must be submitted to the Information Systems
Branch for Data Administration review and QA against standards.
The completed Detailed System Analysis will be submitted to the Business

Champion and Project Sponsor for approval and sign-off.
Design
This Phase of the SDLC continues on from the Detailed System Analysis and
describes how the proposed system is to be built. The Design is specific to the technical
environment that the system will be required to operate in and the tools to be used in
building the system. The results of this Phase will significantly impact the Build and
Transition Phases of the system.
the Detailed System Design.
However, the Project Manager usually delegates responsibility for some or all of
these deliverables to the Development Team. In cases where the production of some or
all of the Phase's deliverables have been delegated, the Project Manager will still
maintain overall responsibility for the production of quality deliverable(s) submitted to
the Business Champion and ISB for Quality Assurance.
The Project Manager will provide initial Quality Assurance of the deliverable(s)

Page 35
The draft Detailed System Design must be submitted to the Information Systems
Branch for Database Administration review and QA against standards.
The completed Detailed System Design will be submitted to the Business

Champion and Project Sponsor for approval and sign-off.
Build
This Phase of the SDLC deals with the development, unit testing and integration
testing of the system (application) modules, screens and reports. In addition, this Phase
will address the preparation and establishment of the technical environment for
development, testing and training of user representatives.
This Phase is usually carried out in parallel with the development of user
procedures and user documentation from the Transition Phase. Both of these will be
required for module testing, upon the completion of the Build Phase. Coordination of
the activities of the Build and Transition Phases is a key responsibility of the Project
Manager at this time.
Any special procedures for data conversion and/or data warehousing are also
developed and tested. The processes of developing and testing of data conversion and
data warehousing modules is no different from those required for the system itself.
This is the fifth Phase in the SDLC.
the Build Phase. However, the Project Manager usually delegates responsibility for
some or all of these deliverables to the Development Team. In cases where the
production of some or all of the Phase's deliverables have been delegated, the Project
Manager will' still maintain overall responsibility for the production of quality
deliverable(s) submitted to the Business Champion, User Team and ISB for Quality
Assurance.

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The draft System Build must be submitted to the Information Systems Branch for
technical review and QA against standards.
The completed System Build will be submitted to the Business Champion and
Project Sponsor for approval and sign-off.
Transition
This Phase of the SDLC is to prepare for and carry out the transition of the
developed system through user and acceptance testing to a full production system.
This is the sixth (and in some cases last) Phase in the SDLC. This will be the last
Phase only for those Business Systems that (for specific documented reasons) will not
make its data available in the Data Warehouse.
This Phase will provide users with the documentation and training to effectively
use the system. Although the Data Conversion will only to be done once, user
documentation will also be required.
Individual system components that successfully completed unit and integration

testing during the Build Phase are now subjected to a more rigorous system and
acceptance testing as defined by the testing plans. In addition user and operation
procedures are to be tested for the system.
As appropriate, the Data Conversion will be performed prior to the finalization of

the system into Production. The detailed Data Conversion and Transition Plans will
define in more detail exactly how this will be accomplished.
the Transition Phase. However, the Project Manager usually delegates responsibility for
some or all of these deliverables to the Development Team. In cases where the
production of some or all of the Phase's deliverables have been delegated, the Project
Manager will still maintain overall responsibility for the production of quality
deliverable(s) submitted to the Business Champion, User Team and ISB for Quality
Assurance.

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The draft deliverables must be submitted to the Information Systems Branch for
technical review and QA against standards
Warehouse
This Phase of the SDLC addresses the publication of the system's data into the
Ministry's Data Warehouse for business manipulation and decision support. Although
described as one Phase here, the Warehouse Phase actually comprises, as appropriate,
all the deliverables associated with SDLC Phases 2 [Definition] through 6 [Transition].
This is the final Phase in the SDLC.
The Project Manager is responsible for producing the deliverables associated

with the Warehouse Phase. However, the Project Manager usually delegates
responsibility for some or all of these deliverables to the Development Team. In cases
where the production of some or all of the Phase's deliverables have been delegated,
the Project Manager will still maintain overall responsibility for the production of
quality deliverable(s) submitted to the Business Champion, User Team and ISB for
Quality Assurance.
The draft deliverables must be submitted to the Information Systems Branch for
review and QA against standards.

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CHAPTER 4: EVOLVING APPLICATIONS OF

INFORMATION TECHNOLOGY
The application of IT has evolved and is continuing to evolve through 3

stages: Automation of work
Information management Business transformation
This evolution involves major leaps in the complexity of tasks that it is being
designed to perform. As we review this evolution, a consistent pattern of change
emerges in the business application of IT. As we evolve automation of work
through information management to business transformation, the strategic
importance of IT applications increases and that amount of organizational change
required to realize the benefits of an application is also greater. Specifically, an
increasing number of changes are being made to elements of the business system
beyond IT such as business processes, organisational structure and even business
culture. At the same time, the number and complexity of applications (or potential
applications) also increases. The three stages of evolution are summarised in the
table 4.1 below.
4.1 Stages of IT Evolution
Stage Impact Benefit Examples
Automation of work • Getting work Operational • Payroll

Done efficiency • Check processing
• Doing the • Basic order
same things more processing
efficiently • Basic airline
reservation
systems

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Information • Restructuring Operational and • Customer

management work and work Tactical effectiveness information systems
processes • Airline yield
• Doing things management systems
differently • Executive
information systems
Business • Defining the Strategic effectiveness • JIT inventory
transformation business and positioning systems
• Doing different • Electronic
things commerce
• Changing the • OLAP
business/industry
rules
Table 4.1
• Automation of work
The first application of IT in business involved the automation of work tasks

such as census data calculations, check processing and payroll as well as basic
order processing and reservation systems. An automation application such as
payroll, is not a strategic application, and while it is certainly necessary, and
failure to pay employees would have serious consequences, it is not an application
that provides strategic advantage. The benefits were largely in the area of
operational efficiency. A few new jobs were created to program, operate and
support the technology itself and some manual jobs, such as pay calculation and
check processing, were replaced. There was also limited change to people's jobs or
to business processes, but the overall change to the nature of work was not
significant. Learning requirements were relatively simple and narrow, focused on
how to use the technology. Change was generally limited to one or a small number
of functional areas. In the case of payroll, little if any change was experienced

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outside of the payroll department. The most important thing was that the payroll
application ran correctly.
The self-sufficiency of computerization was reflected by the physical reality

of the mainframe, where computers were isolated behind data center walls - and
operated invisibly by IT experts. Applications were often limited to those
conceived by same experts, with little understanding of technology by broader
business community, or how it could be applied.
• Information Management
Automation applications created information as a by-product of automating

work. In the early years of the automation stage, this information was not generally
used, certainly not in widespread format way. As we moved into the information
stage, the opportunities to use this information began to be recognized. With the
wider distribution of desktop computer terminals, IT was increasingly applied to
provide information to support improved decision making, to move it "close to the
customer" and to support new service and product design. Here the introduction of
advanced order processing systems, airline yield management systems, customer
information systems as well as the start of so-called executive information systems
(EIS). Benefits moved beyond operational efficiency to operational and tactical
effectiveness. Information could be used to make tactical, and in some cases,
strategic decision. Initially, information was used to enable workers to do their jobs better.
Their jobs changed somewhat, but primarily they were required, and had to be
trained to take largely predetermined action based on the information provided.
As the information stage advanced, benefits were premised on workers

improving how they analyzed and applied information to their work. In the case of
order processing, seasonal variations in demand might be noticed, and adjustments
made to order levels. In the case of customer information systems (or customer
information files in financial institutions), information was used to increase the
value of "customer moments" by cross-selling and target marketing of certain
services. Airline systems moved beyond basic reservation systems to sophisticated

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yield management systems. In the later steps of the information stage, automation
information bases provided opportunities to design new products, such as today's
multitude of mutual funds and numerous volume-based discount plans for valued
customers. It was no longer sufficient to simply provide the application and make
sure that it worked as specified. For these benefits to be realized, the nature of
people's work had to change. Business processes had to be restuctured and better
integrated. Reward systems had to change. Significant learning was required. The
changes crossed functional boundaries, and in some cases, changed or eliminated them.
Physically, personal computers emerged from behind the walls of - the central
data center. PCs began to appear everywhere in organizations and to be operated
by nonexperts. The number of potential applications of technology increased
dramatically. Many of these were conceived outside of the IT world, by the
broader community of business managers and front-line technology users.
• Business transformation
Information management applications enable organisations to rethink and

redesign their business processes and how they carry out their business. As more
and more computing power is distributed, and as advanced communications
capabilities continue to erase the constraints of time and distance, the very nature
of businesses, and even entire industries, is being redefined. Benefits have moved
beyond operational and tactical effectiveness to strategic effectiveness and positioning.
Business transformation applications, such as just-in-time (JIT) inventory

systems and advanced electronic commerce, enable organizations to rethink not
just how they do things, but also what they choose to do. For example, JIT
ordering and inventory management systems are fundamentally changing the
value/supply chain and shifting the balance of power among stakeholders.
The emergence of Internet and virtual banking is redefining the financial

industry by removing century-old barriers to entry and blurring financial product
boundaries. Airlines are now offering passengers direct access to reservations

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systems and more fighting for ownership of the client with travel agents, and thus
redefining the travel agent business. Amazon.com is helping to redefine the book
industry. It is not only selling books electronically and offering a wider selection
than is possible in physical bookstores, it is using the power of computers to
repackage - and eventually transform - a range of services that were historically
spread across multiple businesses, including the reference capabilities of libraries,
the retail display and selection expertise of bookstores, the efficiency of volume
discount distributors and the knowledge of professional book reviewers.
All these applications have significant strategic implications. While

technology enables these benefits, most of the required change is beyond the realm
of IT. Changes are required in the mission, the very raison d'etre of organizations.
The organizations carrying out these changes will, in many cases, be redrawing
traditional industry boundaries or, at minimum, changing industry structures and
rewriting industry ground rules. In doing so, they will harness IT with the aim of
"competing for the future".
The potential of transformational applications is tremendous, but to realize it

will present organizations with new and significant challenges. Automating payroll
processing was primarily an engineering question, whereas creating a virtual bank
branch or bookstore is primarily a business one.
As we moved beyond automation of work to information management and

business transformation applications, sound management of IT projects remains
necessary but is no longer by any means sufficient. In the case of financial
customer information files, for example, employees have to learn new skills,
assume new responsibilities and accept different reward systems. Cross-selling to
banking customers means astutely interpreting customer profile information and
cultivating personal relationships, rather than efficiently handling transactions and
answering routine questions to shorten waiting time in a branch line-up. Such
changes in management practice and work place culture are just as important as

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new IT - though perhaps less visible - to any organization's ability to make a

successful transition to Knowledge Economy.
Organizations that have recognized this, and changed their management

practices accordingly, have been relatively successful with their IT investments. In,
those organizations that have not - the majority, unfortunately - the failure to
recognise these changes has caused management practices to lag behind the
evolving nature of the application of IT.
While the application of Information Technology has evolved significantly

over the past three decades, our approach to managing it has not. When the primary
application was automation, management thinking was still rooted in the industrial
age. The mind-set meant that you were ahead and built the system, plugged it in
and made sure it was running, like a new machine on a manufacturing assembly line.
Unfortunately, as the application of IT has moved beyond automation of work

all the way to business transformation, our management approach has remained
rooted in industrial-age thinking. Management thinking has failed to understand
the implications of the evolving role of IT in business system beyond technology.
Many still think in terms of payroll processing systems that can begin depositing
money in employee accounts on day one. In fact, we are delivering customer
information systems that will only produce results gradually on day 50, day 100 or
day 365, after people are trained and motivated to use the new application when
serving customers.
4.2 Management blind spots: Four critical dimensions of complexity
Current management practice fails to adequately address the impact and

resource implications of four critical dimensions of complexity. These blind spots
in traditional management mind-sets are: linkage, reach, people and time.

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Linkage
This refers to the linkage between the expected results of an IT investment

and business strategy, and between the IT investment and investments required in
other areas of the business in order to realise the benefit. Understanding and
addressing linkage requires a clear appreciation of the ultimate benefits and of the full
scope of the investment required to achieve the benefits.
Reach
Reach refers to the breadth of change required by an IT investment, meaning how

much of an organization is impacted. It also refers to the depth of change - the degree of
impact and of organizational change required to realize the benefit. Addressing each
requires understanding what areas of the organization, other organizations and
stakeholders will be affected, what the impact will be and how it will be managed.
People
A large number and diversity of people must be motivated and prepared to change.
This critical factor in business transformation is often underestimated. We need to
understand who these people are today, how they will have to change and what
interventions will be required to effect the change. We need to ask how these interventions
will be managed for people with different starting points, attitudes and motivations.
Time
In business transformation, time is always of essence, but realistic time frames are
notoriously hard to estimate. We need to ask - and ask again and again - what the realistic
length of time is for all the necessary changes to occur and for the full benefits to be
realized. We must base these estimates on understanding the previous three dimensions.

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Evolving complexity of IT applications
These dimensions of change have become increasingly complex as the applications

of IT have advanced through the stages of automation of work, information management
and business transformation.
In the automation stage, the four dimensions were fairly straightforward and posed
few problems. In the case of automated payroll systems, for example, there few linkages,
organizational reach was limited and few people were affected. Time was required to
deliver the benefits was short; or, at least, the time frames were easily predictable in
advance. Finally, benefits were easy to measure. As we moved through the information
stage, there were more linkages, not all of which were, obvious
4.3 Business transformation and the knowledge economy
The potential risks and rewards associated with such cases of business
transformation show, what is involved in engineering out transition to a knowledge
economy. The opportunities include expanding geographic scope, expanding electronic
commerce and creating virtual companies. We are, moving toward an economy that is
on-line, interactive, instantaneous, inter-networked and knowledge based. It is an
economy that will require new organizational forms and which will dramatically change
the nature of organizations and work.
The emergence of this new economy involves business transformation -

fundamental change in value chain management and the application of new technologies
to support "networked organizations that share knowledge, insight and experience
effectively. Some experts predict chief executives will become knowledge capitalists who
manage the knowledge assets of their organizations. Knowledge will not just be limited
to your organization; it will come from outside well. In addition to managing investments
in IT-enabled change in your own business system, you will have to manage change in an
extended business system which includes customers, supplier financial institutions,
regulators and many other intermediaries, all of whom will themselves be in state of change.

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While the opportunities created by business transformation are awesome the risks
can be daunting to investment decision-makers. Today's large-scale IT projects and
organizational change programs will be viewed as relatively simple initiatives
compared to the sophisticated business transformation ones that will be required in the
knowledge economy. These will raise significant new issues of linkage, reach, people
and time. To manage these dimensions of complexity successfully, business
transformation initiatives can no longer be viewed as traditional projects. They will
need to be treated almost like mid-size businesses within the business, as programs that
are managed continuously and proactively over long periods of time.

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CHAPTER 5: MANAGEMENT AND DECISION-MAKING
5.1 What is Management?
Introduction
Every organization, regardless of size, type, or location needs managers. The

characteristics of managers vary. Managers may come from any nationality or be
of either gender. They're just as likely to be women, particularly in middle
management and supervisory management positions, as they are men. For instance,
the manager described in the chapter opening Manager's Dilemma, Cynthia Glenn,
chief operating officer of Oxford Health Care, is a good example of a successful
manager in action. She's involved with a major change that will radically transform
her organization. As the COO, she epitomizes the planning, organizing, leading, and
controlling activities that must be performed in order for the company to meet its goals.
Management is the process of getting activities done efficiently with and

through other people. The process includes the functions or primary activities
performed by managers. Efficiency refers to the relationship between inputs and
outputs and refers to efforts to minimize resource costs. Effectiveness refers to
goal attainment. Managers seek to be both efficient and effective.
An organization is a systematic arrangement of people to accomplish some

specific purpose. Managers are important to an organization's success because they
direct and coordinate activities so the organization can reach its goals.
Management is important in our society today. Accordingly, there are two

reasons for studying management. We interact with organizations every day of our
lives. Every product we use and every action we take is provided or affected by
organizations. These organizations require managers.
Managers earn more than operators because their decisions have a significant
effect on organization's performance and because of the inadequate supply of
effective managers.

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Managers come in all shapes and sizes. First of all they exist at various levels
within the (hierarchic) structure of an organization. Secondly, they are found in a
variety of functional areas, such as marketing, finance and manufacturing.
Nevertheless, while there are obvious differences between the different levels
and functional areas, all managers perform the same functions and play the same roles.
A successful manager must possess many skills, of which communication and

problem solving are the most basic.
Managers transmit and receive information in both written and in oral form.
Written communications include reports, letters, memos, books and magazines,
electronic mail and electronic bulletin boards like the World Wide Web. Oral
communication comes from telephone calls, formal and informal meetings, and
voice mail.
Problem solving is the set of activities that leads from the recognition of a
problem to its solution, where a problem is a condition or event that is (potentially)
harmful or alternatively, a condition or event that is (potentially) beneficial. While
trying to find a solution to a problem, managers engage in a sub-process of
decision making, where a decision is a particular selected course of action. In
reaching a solution to a given problem, it is generally necessary to make decisions.
Management and Leadership
Management and leadership, they are often used to mean the same thing. But what
many people don't realize is that they are quite different. What is management and what
is leadership? How do they relate?
Management is composed of five major functions; planning, organizing, staffing,

directing and controlling. These five functions are used to define what is management
and the role of a manager. These functions are easily defined and match the definition
of management which is; an activity undertaken by those who are responsible for the

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success of organizations. Other key words that are used to define management are
coordinating, resources, accomplishment, and desired results.
Leadership is not very easy to define. One thing that is clear is that leaderships
function is to influence. The process of leadership is to influence. Influence in
leadership is defined as the ability to modify or change behavior of people. Influence
has five bases; legitimacy, coercion, rewards, expertise and referent. All these bases
help to exert influence. Management and leadership are the arts of influence over
people. They both are influencing people. Leadership is dealing solely with influence
over others. Leadership is dealing exclusively with making people do something they
otherwise would not do unless influenced to do. Management is much the same but is
not so aggressive as leadership is. Management is a way of making sure people stay on
task when they may not be on task.
The role of management is to guide an organization toward goals and management

is the process of reaction to goals by working with or through people and other
resources. Leadership is guiding people in a certain direction. They both sound alike,
but there is a difference that is important. Management is a function where as leadership
is a process which is not structure as well as management.
In management, the idea is to accomplish a goal that is set forth and agreed upon.
There isn't any real persuasion that goes into this because the goals are set and decided
on and the only thing need is to just do the work. In leadership, influence must be
exercised. Influence is a process of making people do something they otherwise would
not do. In management, influence is not very great because the goals are established and
agreed on. Influence is not a major part of management like it is in leadership.
Management and leadership are not the same. Management is a way to accomplish
goals that have been agreed upon. Leadership is influencing people. The two have many
areas that seem the same but they are very different because of the level of influence involved.

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Management Functions
Henri Fayol, a French industrialist from the early part of the 1900s, proposed that
managers perform five management functions: POCCC (plan, organize, command,
coordinate, control). These functions still provide the basis around which popular
management textbooks are organized. However, the functions have been condensed to four.
1. Planning includes defining goals, establishing strategy, and developing plans to

coordinate activities. Formulation of long and short term plans for goals.
2. Organizing is determining what tasks are to be done, who is to do them, how

the tasks are to be grouped, who reports to whom, and where decisions are to be made.
Creation of structures and frameworks of standards, procedures and policies.
3. Leading includes motivating subordinates, directing others, selecting the

most effective communication channels, and resolving conflicts.
4. Controlling is monitoring activities to ensure that they are being

accomplished as planned and correcting any significant deviations. Monitoring
performance and the environment.
Although the functional approach is clear and simple, critics have suggested
that it does not provide an accurate description of what managers actually do.
Management Roles
In the late 1960s, Henry Mintzberg conducted a precise study of managers at

work. His findings challenged several long-held beliefs about the manager's job.
He concluded that managers perform ten different, but highly interrelated roles.
Management roles refers to specific categories of managerial behavior.
1. Interpersonal roles included figurehead, leadership, and liaison activities.

In Mintzberg's framework, there are three interpersonal roles that manager play.
Figurehead

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The manager performs ceremonial and other duties, such as greeting visiting
dignitaries and signing legal documents.
Leader
The manager maintains the unit by hiring and training the staff and providing
motivation and encouragement
Liaison
The manager makes contact with persons outside the manager's own unit -
peers and others in the unit's environment - for the purpose of attending to business
matters. In many organizations it is the practice for all mail to be addressed to or
signed by the manager.
2. Informational roles included monitoring, disseminating, and spokesperson

activities. In Mintzberg's framework, there are three informational roles that
manager play.
Monitor
The manager constantly looks for information bearing on the performance of

the unit, scanning both the internal activity of the unit as well as its environment.
Disseminator
The manager passes on valuable information along to others in the unit.
Spokeperson
The manager passes on valuable information along to those outside the unit-
superiors and persons in the environment. Common activities are issuing press
releases, giving media interviews, reporting to board meetings and so on.
3. Decisional roles included those of entrepreneur, disturbance handler,

resource allocator, and negotiator. In Mintzberg's framework, there are four
decisional roles that managers play.

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Entrepreneur
The manager makes rather permanent improvements to the unit, such as

changing the organizational structure.
Disturbance handler
The manager reacts to unanticipated events, such as a currency devaluation in

an overseas market.
Resource allocator
The manager controls the purse strings of the unit, determining which
subsidiary units get which resources.
Negotiator
The manager resolves disputes both within the unit and between the unit and
its environment.
Follow-up studies of Mintzberg's role categories in different types of

organizations and at different managerial levels within organizations have
generally supported the notion that managers perform similar roles. However, the
more traditional functions have not been invalidated. In fact, the functional
approach still represents the most useful way of classifying the manager's job.
Management Skills
Managers need certain skills to perform the varied duties and activities
associated with being a manager. Robert L. Katz found through his research in the
early 1970s that managers need three essential skills or competencies.
1. Technical skills are skills that include knowledge of and proficiency in a

certain specialized field. Technical skills became less important as a manager
moves into upper levels of management. However, top managers still need some
proficiency in the organization's specialty.

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2. Human skills include the ability to work well with other people both
individually and in a group. The importance of human skills remains consistent,
regardless of level within the organization.
3. Conceptual skills include the ability to think and to conceptualize about

abstract situations, to see the organization as a whole and the relationships among
the various subunits, and to visualize how the organization fits into its broader
environment.
All managers perform essentially the same functions, but lower-level managers
emphasize leading while upper-level managers spend more of their time planning,
organizing, and controlling. For the most part, the manager's job is the same in both profit
and not-for-profit organizations. Managers in small businesses tend to emphasize the
spokesperson role and are generalists. Also, the formal structure and nature of a
manager's job in a large organization is replaced by more informality in a small firm.
When managers work in different countries, they often need to modify their practices.
5.2 Managers and their Information needs
Figure 5.1 Management Structure
Management Structure
The model above (see figure 5.1) is rather simplistic but clearly, in any
substantial organization, there will be a top layer of senior management dealing
with high level, strategic and long-term issues for the organization. Below them
will be a middle management layer with responsibilities for performance

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monitoring and shorter time horizons. Finally, there will be an administrative level,
ensuring that the day-to-day operational activities are effectively managed.
Managers at all levels of the organization need information in order to ensure

that they are achieving the desired objectives or targets for their area of the
business. Those particular objectives will be different at the various levels and
business units in the organization (although they should all be geared to achieving
its corporate objectives) and, hence, their information requirements will also be
different. Nevertheless, there will be a flow of information both up and down the
organization structure as each level receives information for its purposes and
adapts it for the next level. We will be looking in more detail at these information
systems in a later session but for the moment the focus is on what information is
required.
It is common to classify managers in a hierarchic organization as operating at

one of three basic levels (refer to figure 5.2)
Figure 5.2 Hierarchic Organization of Managers

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1. The strategic planning level (Top management)
Upper management is usually comprised of the CEO and Vice Presidents of a

company. The decisions that they make have the broadest scope and cover the longest
time frame. Upper management decisions are very unstructured.
Upper Management uses a ‘Decision Support System’ to help make its decisions.
2. The management control level (Middle management)
Decisions by middle management, usually the Directors, cover a broader range of time
than operational, management but less broad than upper management. These decisions
involve experience using historical data to plan and control operations and implement
the policies of upper management. Middle management decisions are semi-structured.
Middle management uses a 'Management Information System', MIS, to produce

periodic reports.
3. The operational control level (Operating management)
Departmental or operating management is responsible for maintaining business

records and improving the flow of work on a daily basis. Decisions here cover a
narrow time-frame and are structured, i.e. predictable, and made by following a well-
defined set of procedures using the current status of activities.
Operating Management produces Daily Reports using a 'Transaction Processing

System'.
The characteristics of these three levels of management are quite different as

shown in the following table by Kanter, with top management being more involved
with planning and concentrating on a longer time horizon. Top management focuses
more on external information sources, and deals with complex, relatively unstructured
activities involving few people, but having broader scope than lower levels of
management.

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Characteristic Top management Middle management Operating management
Focus on planning Heavy Moderate Minimum
Focus on control Moderate Heavy Heavy
Time frame One to five years Up to a year Day to day
Scope of activity Extremely broad Entire functional area Single subfunction or task
Nature of activity Relatively Moderately structured Highly structured

unstructured
Very complex, Less complex, better

Level of complexity Straightforward
many variables defined variables
Job measurement Difficult Less difficult Relatively easy
Implementation
Plans, policies and
Result of activity schedules, performance End product
strategies
yardsticks
Type of information Internal, reasonable Internal historical, high
External
utilised accuracy level of accuracy
Responsible,
Creative,
Mental attributes persuasive, Efficient, effective
innovative
administrative
Number of people
Few Moderate number Many
involved
Departmental/
Intra-division Intra-department Inter-department
divisional interaction
Table 5.1
Table 5.1 shows Job content of management levels.

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Measuring Performance
As stated previously, effective information managers are those who have a clear
understanding of what information they require to tell them how they are performing
against their objectives. That is not always as easy as it sounds. Managing a busy
department, for example, is a 'messy' business, with problems coming from all
directions and the manger constantly having to reassess priorities to deal with them. It
is easy to lose sight of the real goals and then, as a consequence, having to take drastic
short-term actions to regain course.
Critical success factors (CSF's) are crucial areas of responsibility where 'things
must go right' requiring 'constant and careful attention from management'. For example,
responding to new business enquiries within two working days.
1. Identify the managers 'Critical Success Factors' (CSF's) in your organization.
2. Determine what information is required to show whether or not that CSF is

being achieved.
3. Set up the systems necessary to deliver that information as and when required.
This technique proved to be particularly effective in those organizations which

had clearly expressed corporate and departmental objectives as these ought to tie in
closely with CSF's. Additional benefits were also generated by applying the technique
throughout the organization whereby it helped to focus on improving communications
between levels of management.
This process has been applied and can be seen in many large multi-national
companies today, where subsidiaries operate with a high degree of autonomy, reporting
regularly to the parent company or Board on their performance in a number of 'key' areas.
‘Hard’ and ‘Soft’ Information
When we talk about information in the context of the business environment

there is a tendency to think in terms of facts and figures, reports and statements,

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print-outs or whatever appears on our computer terminal. It is relatively easy to

obtain this type of information, which may be generated as a by-product of
formal systems and processes already in place. While these forms of information
are important, there are other forms, less formal, which can also play an
important role in the decision making process.
Previous research has shown that the informal channels for collecting, what
is termed, 'soft' information can be very important, particularly in more senior
positions within the organization. Indeed, less regard is likely to be given to
'hard' factual information. This tends to reflect the way in which managers work
in the real world, where informal soft information (over the telephone or in the
canteen) is collected and stored until other items of information (either soft or
hard) reinforce or add to that information, like pieces in a jig-saw. The human
mind is extremely effective at this form of 'information management' far more so
than computers, where attempts to mirror this methodology have been relatively
unsuccessful.
So, an important lesson for the manager is not to focus solely on hard information
and associated systems but also to consider how to develop and nurture the informal
contacts and networks, which operate in and between organizations.
5.3 Problem Solving and Decision Making
Decision Making
Figure 5.3

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Management decision making can be organized according to the level of

managerial responsibility (refer to figure 5.3). At the top sits the strategic
management level. Their strategic decision making requires a wide variety of
information sources and the flexibility to model and present ideas in support of
their strategic mission. Information systems technology at the strategic level must
help to clearly communicate ideas and concepts. Information usually needs to be
summarized more highly than at lower levels of management support, and also
tends to use more "external" information coming from outside sources.
At the middle range, tactical matters require management to reach into

corporate records and obtain external data to implement and support company
strategy. This tactical management level of management decision making is
responsible for allocating resources to reach objectives and therefore requires
specific feedback concerning performance of operational units. Control of corporate
resources, such as performance monitoring and budget planning are part of their job.
At the lower management levels, daily operations are the chief concern. At
this operational management level, transaction processing and process control data
are the major concern, and information systems often highly automated and critical
for managing competitively. Beneath these systems, in the "basement" under the
management information system [MIS], the transaction processing and other
automated production processes churn out masses of data that must be stored,
processed, and converted into business intelligence that feeds into every level of
management.
Effective decision making requires an understanding of decision-making

processes including behavioral and communications aspects, the ability to identify,
obtain, store, and retrieve critical information necessary for making sound
decisions and the skill to use mathematical, statistical and simulation tools in
analyzing information in order to make decisions.
Structured decisions have a known and well-defined solution that uses fully
available data. The outcomes will always be the same. Examples of structured

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decisions are calculating net pay, calculating interest on a loan, etc. In nonstructured
(or unstructured and semi-structured) decisions, there is no agreement upon
procedure and not all the necessary data may be available. It requires judgement,
evaluation and intuition. There are few unstructured business decisions, many are
semi-structured or parts of the problem are structured and parts require judgement
and intuition.
Most business decisions are structured or semi-structured. Budget analysis is

structured and can be done by a spreadsheet program. Budget preparation is semi-
structured. Computers can analyze, past data and projections. Humans must judge
what they think is most likely to happen in future.
Each level has different types of decisions, therefore, measures the value of
information differently.
General Model of Decision Making
1. Intelligence [Finding out what is going, what the significant problems are]
2. Design [Identifying the decision(s) that need to be made]
3. Choice [Making the decision]
4. Implementation Go through an example of this process (Choosing classes

for the Fall)
Problem Solving
♦ Structured Problems
• solved by known methods and models
• all relevant data available
• require little judgement, evaluation or insight
• easily automated

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♦ Unstructured Problems ("Less structured" would be a better term)
• standard solution methods unknown
• some desirable data may not be available
• requires considerable human judgement, evaluation and creative insight
• difficult to automate
♦ Semi-structured Problems
• Some parts are structured, others are not
• Remember that there is a continuum from structured to unstructured.
Two important points to remember:
1. Structuredness is not the complexity of the problem -- complex problems may be

decomposed and approached in a highly structured manner.
2. All problems that can be approached in a rational manner are capable of some
degree of structuring.
MIS are often categorized according to the type of approach that they employ in
helping resolve managerial problems related to these activities. Managerial problem
solving range from the highly structured to the relatively unstructured approachs.
Structured problems are sometimes called "programmable" decisions because they are
easily formalized with models. Structured problems predominate in operations, where
data processing on transaction data can be coupled with process control data to permit
highly automated decision making. When such processes become very repetitive, they
may be fully automated, leaving humans to simply monitor the decision and outcomes.
On the other end of the range, unstructured problems require tools that permit
managers to model the dimensions of their problems, honing in on the best solutions to
difficult, and often unique, situations. However, no problem that confronts management

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is ever totally unstructured. If a problem can be identified, it must contain elements that
allow it to be structured to some degree. The amount of structuring that is done depends
upon the nature of the problem and the time and skill the manager has to devote to it. It
also depends upon the manager's own decision making style.
In the middle between the highly structured and the unstructured problems lie
many semi-structured problems in which parts, but not all of the problem can be
approached using formal decision making models. For example, the decision of
AquaPenn to acquire additional manufacturing facilities on the West Coast was based
partly upon a structured analysis of the logistics of supplying customers in that regoin
of the country. Solid data and knowledge to use it was available concerning the
logistics. However, parts of the problem, such as those involving the activities of their
competitors or the future demand for bottled water, required a less structured analysis of the
market for bottled spring water. Not all factors were known and not all data was "hard”.
5.4 Coping with Changes
How managers can help employee deal with change
Different employees have different needs. The most effective learned how to adapt
their style based on the individual's needs.
♦ "Surviving" (Innocent) Perspective:
• Employees in this level are very fragile and should be protected from change
as much as possible. Keep as much of their routine the same since any type of
changes - even what seem to be small ones - will be terrifying to them and
their reactions may be extreme.
♦ "Learning" (Rule-based) Perspective:
• Employees at this level need a "parent" figure to help them deal with the
changes - someone who can help them feel safe and secure with the changes as
well as help them adjust to the changes at a pace that they can handle.
Otherwise, they will create all sorts of problems for management.

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♦ "Competing" (Striving) Perspective:
• People at this level need to maintain their sense of self-worth through the
changes. If they feel threatened, they will fight back in whatever ways they can
find. If they can be recruited to have a feeling of personal importance in the
change, they will find it much easier to deal with. It is important to help them
understand that fighting the changes are not in their best interest, and that
working with others is the way they can benefit them the most.
♦ "Relating" (Partnership) Perspective:
• The challenge for people at this level is to feel that everyone's needs are being
taken care of. They will feel the pain of their co-workers' struggles to cope
with change, yet they may not know how to deal with their own feelings of
insecurity. They most value being part of a team and will usually want to help
others adjust to the changes. They may participate actively in the gossip about
changes. People at this level can assist by being asked to "partner" with
someone who is expected to have more difficulty in coping with changes.
♦ "Teaching (Integration) Perspective:
• People at this level will be able to understand the reasons behind the changes
and can be very helpful as a calming presence for people at other levels. They
can be most helpful to management if they are told about upcoming changes
and have time to help prepare others. They will be most effective in this role
when they can see the change(s) as a positive one and translate that message to
those who are more fearful. They will usually take a more philosophical
attitude toward the changes when they are told the larger picture and overall
strategy behind the changes. As with people in the "relating" perspective,
employees at this level can be very helpful if they are asked to help others cope
with the changes through a "partner" or "buddy" arrangement, whether formal
or informal.

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Note: "employee" can be any person who works in an organization - line, staff,
management or executive
Organizational Responses to Change
♦ Top Management:
Top management has a hard time coming to grips with the direct implications of
the change. They often underestimate the impact that change has on their employees.
They tend to isolate themselves. Often they engage in strategic planning sessions and
gather information in survey reports. They avoid communicating or seeking "bad
news," because it is difficult for them to admit "they don't know." They expect
employees to "go along" when a change is announced and they blame their middle
managers if people resist or complain about the change. They often feel betrayed when
employees don't respond positively.
♦ Middle Management:
Managers in the middle feel the pressure to "make organization change" according
to the wishes of top management. They feel pulled in different directions. Middle
managers often lack information and leadership direction to focus on multiple priorities.
They are caught in the middle, and often fragmented because they don't have clear
instructions. They feel besieged with upset, resistant or withdrawn employees who no
longer respond to previous management approaches, and deserted, blamed or
misunderstood by their superiors.
♦ Employees/Workers/Associates:
Workers often feel attacked and betrayed by changes announced by management.

They are often caught off guard, not really believing that "my company could do this to
me." Many respond with resistance, anger, frustration and confusion. Their response
can solidify into a wall of "retirement on the job." They become afraid to take risks, be
innovative or try new things. They experience a loss of traditional relationships,
familiar structure and predictable career advancement patterns.

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CHAPTER 6 - KNOWLEDGE REPRESENTATION
6.1 Introducton
Artificial intelligence techniques do not necessarily reproduce human thought

processes. Rather, they seek to apply computers to problem solving tasks requiring
intelligence. These techniques need to produce results consistent with human activity if
they are to be useful, however, they do not necessarily reproduce the reasoning of an
expert in their analysis. Expert systems represent the logical extreme of the trend away
from large generalized artificial intelligence models. By adopting a specific problem
domain, the tasks of knowledge representation and problem description are rendered as
simple as possible. This enables a more powerful model to be developed, since the
knowledge base applicable to the chosen problem domain can be made much more
comprehensive.
A detailed and specific knowledge base is the source of the problem solving
power of an expert system (Waterman [1986]). The manner in which the knowledge
base is used will be determined by the system's meta knowledge. Meta knowledge can
be seen as a set of rules governing how the knowledge base is applied. Meta knowledge
determines what case specific knowledge is obtained from the user and what knowledge
from the knowledge base is incorporated in the problem solving process. It also
provides the means to combine these two sources of knowledge for an expert system to
generate its output.
Meta knowledge and knowledge complement one another. Knowledge cannot be

applied in the absence of meta knowledge. However, reliance on meta knowledge may
be offset to the degree of reliance on a knowledge base. An advanced expert systems
shell facilitates the construction of expert systems based models that embody a high
degree of declarative meta knowledge. Such a model solves problems while making
"economical" use of the system's knowledge base. It limits its use to those pieces of
knowledge pertinent to the problem.

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A model with a less advanced meta knowledge structure may produce the same
conclusion, but it would be less discriminating in its use of the knowledge base. As a
result, it may incorporate many pieces of knowledge that were not strictly necessary in
its analysis. A procedurally coded computer model will necessarily place a heavier
reliance on its knowledge base than it will on a meta knowledge structure. This is not
necessarily a failing. Knowledge is typically easier to capture and represent than meta
knowledge. Expert systems are commonly constructed using proprietary shell packages.
These packages provide the tools to construct the knowledge base required by an expert
systems model and the inference engine and meta knowledge required to access that
knowledge base. The construction of an expert system requires the skills of a
knowledge engineer, as opposed to a conventional programmer. In contrast, decision
support systems can be constructed using only a conventional program code compiler.
A compiler embodies less functionality than an expert system shell, but as a result,
needs to be much less structured and can therefore allow the developer much more
freedom over the form of a decision support system. The programming skills required
to use a conventional program compiler are much more readily available and therefore
potentially more cost effective than the skills of a knowledge engineer.
The remainder of this paper is organized as follows. The second section discusses
the distinction between expert systems and decision support systems. The third section
reviews the application of expert systems to audit risk assessment. The fourth outlines
the constructiort of two computer models, one expert systems based and the other
procedural. The final section provides a summary and conclusion.
A well-known definition of artificial intelligence (AI) is the following: AI is

the science of making machines do things that would require intelligence if done by
humans. An important branch of Al research is expert systems (ES) or more
generally, knowledge based systems (KBS).
In the 1980s, there were a number of highly-publicized, successful expert

systems put into operation around the world (e.g., MYCIN, XCON, Prospector)
Despite these successes and the many operational expert systems in service today,

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the field is widely seen as having arrived, failed, and disappeared. However, it is
important to keep in mind that much this perceived failure is due to unrealistic
expectations fueled by hype rather than a lack of achievement by ES researchers
and developers. In fact, such a fate is not uncommon in information technology.
The basic idea behind expert systems is to create small, practical "intelligent"
systems by eliciting a knowledge base of rules from experts in a particular field
and providing non-expert users with means of accessing this knowledge easily. For
example, an early (circa 1975) expert system called MYCIN helps physicians to
diagnosis infectious blood diseases and prescribe medication. The knowledge base
of MYCIN was elicited from a large number of experts in the field and contained
an enormous amount of information about different types of bacteria associated
with blood diseases. Although MYCIN provided diagnosis as good or better than
any human expert, the technology itself never achieved widespread acceptance in
the medical community.
6.2 Knowledge Representation
Knowledge representation is crucial. One of the clearest results of artificial

intelligence research so far is that solving even apparently simple problems
requires lots of knowledge. Really understanding a single sentence requires
extensive knowledge both of language and of the context. For example, today's
(4th Nov) headline "It's President Clinton" can only be interpreted reasonably if
you know it's the day after the American elections. (Yes, these notes are a bit out
of date). Really understanding a visual scene similarly requires knowledge of the
kinds of objects in the scene. Solving problems in a particular domain generally
requires knowledge of the objects in the domain and knowledge of how to reason
in that domain - both these types of knowledge must be represented.
Knowledge must be represented efficiently, and in a meaningful way.

Efficiency is important, as it would be impossible (or at least impractical) to
explicitly represent every fact that you might ever need. There are just so many
potentially useful facts, most of which you would never even think of. You have to

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be able to infer new facts from your existing knowledge, as and when needed, and
capture general abstractions, which represent general features of sets of objects in
the world.
Knowledge must be meaningfully represented so that we know how it relates

back to the real world. A knowledge representation scheme provides a mapping
from features of the world to a formal language. (The formal language will just
capture certain aspects of the world, which we believe are important to our
problem - we may of course miss out crucial aspects and so fail to really solve our
problem, like ignoring friction in a mechanics problem). Anyway, when we
manipulate that formal language using a computer we want to make sure that we
still have meaningful expressions, which can be mapped back to the real world.
6.3 What is Artificial Intelligence?
Artificial intelligence (AI) is a broad field, and means different things to

different people. It is concerned with getting computers to do tasks that require
human intelligence. However, having said that, there are many tasks,. which we
might reasonably think require intelligence - such as complex arithmetic - which
computers can do very easily. Conversely, there are many tasks that people do
without even thinking - such as recognizing a face - which are extremely complex
to automate. Al is concerned with these difficult tasks, which seem to require
complex and sophisticated reasoning processes and knowledge.
People might want to automate human intelligence for a number of different

reasons. One reason is simply to understand human intelligence better. For
example, we may be able to test and refine psychological and linguistic theories by
writing programs, which attempt to simulate aspects of human behaviour. Another
reason is simply so that we have smarter programs. We may not care if the
programs accurately simulate human reasoning, but by studying human reasoning
we may develop useful techniques for solving difficult problems.

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AI is a field that overlaps with computer science rather than being a strict
subfield. Different areas of Al are more closely related to psychology, philosophy,
logic, linguistics, and even neurophysiology.
6.4 Is AI Possible?
Artificial intelligence research makes the assumption that human intelligence

can be reduced to the (complex) manipulation of symbols, and that it does not
matter what medium is used to manipulate these symbols - it does not have to be a
biological brain! This assumption does not go unchallenged among philosophers
etc. Some argue that true intelligence can never be achieved by a computer, but
requires some human property which cannot be simulated. There are endless
philosophical debates on this issue (some on comp.ai.philosophy), brought recently
to public attention again in Penrose's book.
The most well known contributions to the philosophical debate are Turing's
"Turing test" paper, and Searle's "Chinese room". Very roughly, Turing considered
how you would be able to conclude that a machine was really intelligent. He
argued that the only reasonable way was to do a test. The test involves a human
communicating with a human and with a computer in other rooms, using a
computer for the communication. The first human can ask the other
human/computer any questions they like, including very subjective questions like
"What do you think of this Poem". If the computer answers so well that the first
human can't tell which of the two others is human, then we say that the computer is
intelligent.
Searle argued that just behaving intelligently wasn't enough. He tried to

demonstrate this by suggesting a thought experiment (the "Chinese room").
Imagine that you don't speak any Chinese, but that you have a huge rule book
which allows you to look up chinese sentences and tells you how to reply to them
in Chinese. You don't understand Chinese, but can behave in an apparently
intelligent way. He claimed that computers, even if they appeared intelligent,

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wouldn't really be, as they'd be just using something like the rule book of the
Chinese room.
Many people go further than Searle, and claim that computers will never even
be able to appear to be really intelligent (so will never pass the Turing test). There
are therefore a number of positions that you might adopt:
• Computers will never even appear to be really intelligent, though they

might do a few useful tasks that conventionally require intelligence.
• Computers may eventually appear to be intelligent, but in fact they will

just be simulating intelligent behaviour, and not really be intelligent.
• Computers will eventually be really intelligent.
• Computers will not only be intelligent, they'll be conscious and have

emotions.
Computers can clearly behave intelligently in performing certain limited tasks, full
intelligence is a very long way off and hard to imagine. However, these philosophical
issues rarely impinge on Al practice and research. It is clear that AI techniques can be
used to produce useful programs that conventionally require human intelligence, and that
this work helps us understand the nature of our own intelligence.
6.5 Some AI Tasks
Human intelligence involves both "mundane" and "expert" reasoning. By mundane

reasoning I mean all those things which (nearly) all of us can routinely do (to various
abilities) in order to act and interact in the world. This will include:
• Vision: The ability to make sense of what we see.
• Natural Language: The ability to communicate with others in English or another

natural language.
• Planning: The ability to decide on a good sequence of actions to achieve your goals.

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• Robotics: The ability to move and act in the world, possibly responding to new
perceptions.
By expert reasoning I mean things that only some people are good at, and which
require extensive training. It can be especially useful to automate these tasks, as there
may be a shortage of human experts. Expert reasoning includes:
• Medical diagnosis.
• Equipment repair.
• Computer configuration.
• Financial planning.
Expert Systems are concerned with the automation of these sorts of tasks.
AI research is concerned with automating both these kinds of reasoning. It turns out,
however, that it is the mundane tasks that are by far the hardest to automate.
6.6 Knowledge Engineering
Having decided that your problem is suitable you need to extract the knowledge
from the expert and represent it using your expert system shell. This is the job of the
knowledge engineer, but involves close collaboration with the expert(s) and the end user(s).
The knowledge engineer is the AI language and representation expert. He/she

should be able to select a suitable expert system shell (and other tools) for the project,
extract the knowledge from the expert, and implement the knowledge in a correct and
efficient knowledge base. The knowledge engineer may initially have no knowledge of
the application domain.
To extract knowledge from the expert the knowledge engineer must first become at
least somewhat familiar with the problem domain, maybe by reading introductory texts or
talking to the expert. After this, more systematic interviewing of the expert begins.
Typically experts are set a series of example problems, and will explain aloud their

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reasoning in solving the problem. The knowledge engineer will abstract general rules
from these explanations, and check them with the expert.
As in most applications, the system is wasted if the user is not happy with it,
so development must involve close collaboration with potential users. As
mentioned in the introduction, the basic development cycle should involve the
rapid development of an initial prototype and iterative testing and modification of
that prototype with both experts (to check the validity of the rules) and users (to
check that they can provide the necessary information, are satisfied with the
systems performance and explanations, and that it actually makes their life easier
rather than harder!).
In order to develop the initial prototype the knowledge engineer must make
provisional decisions about appropriate knowledge representation and inference
methods (e.g., rules, or rules+frames; forward chaining or backward chaining). To
test these basic design decisions, the first prototype may only solve a small part of
the overall problem. If the methods used seem to work well for that small part it's
worth investing the effort in representing the rest of the knowledge in the same form.
Expert system development was very trendy around 5-10 years ago, with
unrealistic expectations about the potential benefits. Now some cynicism has set
in. Expert system shells are in fairly wide use, but are often used to solve fairly
simple problems, and are chosen as much for their user interface and development
environments as for their inferential abilities.

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CHAPTER 7: PLANS AND STRATEGIES
7.1 Strategy Planning for Information Systems
History
Perhaps, because of the relative 'youth' of computing in the business

environment and coupled with its associated pace of change, the track record of IS, as
far as effective strategic planning is concerned, has been patchy. There are many well-
documented examples of poor strategic decisions and costly failures. Surveys indicate
that, until comparatively recently, a high percentage of organizations failed to plan
strategically in this area and those that did were not particularly effective. The
strategic planning process demands regular review and reassessment. However, as
stated in the text, major corporate changes i.e. acquisitions, alliances, etc. or radical
changes in the market which the organization operates in, will hasten these.
Consider the following questions:
• Where does an IS strategy fit within the wider set of strategies?
• What has been the history of IS strategy planning?
• What circumstances demand major reassessment of IS strategy plans?
• Who might be employed to do the actual planning?
• What might an IS strategy plan contain?
Firstly, in its supporting role, the IS strategy has to be clearly linked with the
corporate and business goals of the organization. Its constituent parts will consider
specific issues, often viewed as sub-strategies, in considerable detail. As an example,
the software sub-strategy may include a detailed software replacement programme,
identifying which systems will be replaced and when, together with the resources
required at each stage. This sub-strategy will have been determined by reference to
the overall business strategy, as well as determining factors at the IS strategy level

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such as 'a decision to source future systems from off the self rather than developed in-
house'. This would also be reflected in the sub-strategy dealing with I.T. staffing.
Key Players
Much has been written about who the key players are in IS strategy formulation
and a preliminary stakeholder analysis may give the clue as to who should be
involved. The culture of the organization - centralized or devolved - will also act as a
determining factor. IT directors have seen their fortunes wax and wane over the years
as more and then less were afforded Board level status. The concept of the 'hybrid
manager' has been adopted in many organizations.
Components of an IS Strategy
Undoubtedly, there is no one arrangement, which best suits all. Similarly, the
content of an IS strategic plan may very well be a 'mix and match' most appropriate to
the organization concerned - although elements of 'best practice' are well described in
the text and include the following:
• A clear statement of the IS objectives.
• An inventory and assessment of current organizational capabilities.
• An implementation plan.
7.2 IS and Bisiness Strategy- Alignment and Intergration
Rationale
There is little contrary argument to the proposition that working to a well-

developed plan offers greater chance of achieving desired -objectives than working in
an intuitive, reactionary mode. Not least, a structured plan provides a map to refer to
when the actual position is different to that anticipated or desired. Information systems
are costly to develop and manage, in common with the other resources the organization
has to use. More importantly perhaps than with other assets, its life-cycle is more

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indeterminate and potentially has a greater impact on the well-being of the parent
organization.
Consider an overview of the strategic planning process as it relates to the

organization and you will (will have) encountered many of the models elsewhere in the
Programme. Determining the business strategy is fundamental to the subsequent
development of an appropriate supporting IS strategy. As a consequence, before
developing an organization-wide IS strategy, there must be a clear understanding of the
external business environment together with an assessment of the organization's internal
'condition'. Having established the credence for organizations adopting an IS strategy,
we need to consider which planning process is the most appropriate for a particular
organization. The basic components of an IS strategy will be common to most
organizations. However, the methodology or framework by which it is developed is not.
Framework
The framework or methodology adopted to develop the IS strategic plan will

contain the following elements:
• A structure that gives guidance on what to do and when to do it.
• A definition of techniques to do what needs to be done.
• Advice on how to manage the quality of the results.
• Tools to automate the process.
It has to be emphasized at this point that frameworks are not always mutually.
However, a particular approach may lend itself to the style and culture of an
organization.

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7.3 Analytical Tools for IS Strategic Planning
Introduction
There is a real danger in attempting to use too many tools and techniques in
formulating an IS strategy and the predominant framework, as discussed in the previous
session, ought to give a firm steer as to which ones may be most appropriate.
Tools
The value of each of the tools described is in their ability to clarify, to a greater or
lesser extent, a complex situation. Often, they also force the planner to consider a range
of issues from a different perspective. As a consequence, 'Beauty' - the value of a
particular tool - is very much 'in the eye of the beholder'. For example, the layered
structure and inter-connectedness of Rockart's Critical Success Factors is immediately
attractive to someone coming from a highly stratified and bureaucratic organizational
background but would be alien to someone from an informal and innovative
organization such as 3M.
7.4 MIS Strategic Planning
Strategic Planning and Information Technology
Strategic planning is the first step in initiating organizational change, as well as an

essential element of business process reengineering. The strategic planning process
includes an organizational assessment and the development of strategic foundations:
mission, future vision, and guiding principles. Analyzing the gap between the current
state of the organization and its future vision provides essential information for
developing strategic goals, specific strategies, and objectives.
Each strategy may have several objectives. It is at the level of objectives that it is
reasonable to introduce performance measures to gauge progress toward achieving the
objectives and, therefore, the strategies and goals.

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Projects are typically the links between plans and the budgeting process. As they are
used in this document, projects are undertakings directed at the accomplishment of an
objective. Projects, with cost and schedule estimates, may implement new information
systems or major improvements to existing systems. The completion of projects should
mark progress toward reducing the gap between an organization's current state and its
future vision.
Strategic Planning Process
The literature on the strategic planning process is extensive; the references provide
some recommended starting points. The ITSC has found two documents to be especially
helpful. Wells, [1995] have evolved a structured strategic planning process that is
appropriate for public sector organizations. While many variations of this process are
possible, it does provide a basic framework.
An overview of the planning process, as described by Wells, is presented in figure 7.1.

The process begins with pre-planning activities designed to prepare senior management
for strategic planning. These activities focus on gathering data about the organization and
assessing the current state of the organization. In a workshop setting, senior leaders
develop, through a consensus building process, the mission, the future vision, and the
guiding principles of the organization. These elements represent the strategic foundation,
but the elements by themselves are insufficient as a plan. Strategic goals, strategies, and
objectives are necessary to guide deployment and implementation.
To develop the goals, strategies, and objectives, managers work through a gap
analysis to identify what needs to be changed to move the organization from its current
state to the new desired state. This gap analysis further illustrates the relationships
between strategic planning and typical business process reengineering (BPR) activities,
during which the "as is" and "to be" states are described.

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Adapted From Denise Wells, et al., Strategic Management: Using the

Strategic Plan to Build Organizational Budgets, Workshop on Performance
Measuring and Monitoring in Government San Francisco, 1995.
Figure 7.1
Figure 7.1 shows that developing goals, strategies, and objectives marks the
completion of the strategic plan. Understandably, the calendar time and effort to
develop the plan will vary among organizations. In the Wells approach, the strategic
foundations -- the vision, mission, and guiding principles -- are developed in a 3-day
workshop with trained facilitators.
After the workshop, top management usually seeks the assistance of other
members of the organization to complete the goals, strategies, and objectives, based on
the strategic foundations.
After completion of the plan, it is published and distributed throughout the

organization. Implementation of the strategic plan occurs when action plans (i.e.,
projects, with cost and schedule estimates) are developed to accomplish the objectives.
The projects are developed and implemented by personnel throughout the organization.

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Implementation efforts are monitored and measured so that the organization can
evaluate progress toward achievement of its goals, strategies, and objectives.
Information from this evaluation is used as input to the next iteration (see Figure 7.1) of
the strategic planning process where the strategic plan is validated and updated based
on changed conditions. An important by-product of this process is team-building and
the breaking down of functional barriers. Team building is a natural by-product because
senior managers are discussing the future of the organization and how they can co-
operate towards achievement of that future. The managers have agreed to work together
for the overall aim of the organization rather than their departments. This leads to
organizational alignment and the breaking down of barriers among departments.
Strategic Goals
The strategic goals are broad statements about where the organization wants to be
at some point in the future. These goals work towards achieving the overall mission of
the organization and help achieve the vision of the future. The strategic plan usually
contains goals in multiple strategic areas.
The strategic goals are sometimes confused with the future vision. Whereas the
future vision is a single statement or paragraph that describes a desired organizational
end-state at some point in the future, the strategic goals are general statements of
activities that if pursued would lead to the attainment of the future vision. In this
context the future vision is a statement about where to go, and the strategic goals are
statements about how to get there.
Progress in achieving these goals should be measurable, hence enabling

quantitative performance measurement.
Objectives and Performance Measures
Objectives represent specific courses of action that are bounded by and support the
strategies. They contain a target and a performance measure. In the absence of targets
and performance measures, it is impossible to measure progress towards achieving the
strategic goals.

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Objectives follow from the "top-down" approach of IM strategic planning. Goals

describe the end state to be achieved; strategies outline how to get there; and objectives
describe who does what and when. Once the outcomes and the methods for achieving
those outcomes have been established, indicators to measure performance must be
developed. Implementation, however, is a "bottom-up" activity; it is around the
achievement of objectives that data are, collected and performance is measured.
Measuring progress in achieving strategic goals is never easy; however, for

government to be accountable, performance measurement is important. Performance
measures are quantifiable expressions that measure the achievement of program
objectives. Multiple indicators are often needed to capture the intent of a program. The
measures must reflect the desired result intended, and they must possess the qualities of
validity and sufficiency.
A valid performance measure is one that reasonably represents the program

objective. A valid performance measure should not measure workload data, and it
should minimize the measurement of change not attributable to the program.
Sufficiency implies that the number of indicators adequately reflects the intent of the
program objective. A sufficient measure provides a comprehensive measure of
effectiveness. Additional indicators are needed if they provide new information that is
pertinent to the assessment of program effectiveness.
7.5 Strategic Information Systems
Introduction
The topic of 'strategic information systems' is concerned with systems which

contribute significantly to the achievement of an organisation's overall objectives. The
body of knowledge is of recent origin and highly dynamic, and the area has an aura of
excitement about it. It is risky to attempt a historical exposition of such a recently
emerged topic. On the other hand, the line of development which the conventional
wisdom has followed is itself interesting and instructive. This paper is prepared as an
introduction to the literature, but embodies interpretation in both its structure and its

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expression, and should therefore be read with at least as critical a disposition as any
other paper in the area. It may also be compared with other critical interpretations such
as Swatman & Swatman (1992), Galliers (1993) and Ciborra (1994).
The notion and its origins are first discussed. The emergence of the key ideas is
then traced. The process whereby strategic information systems come into being is
assessed. Finally, areas of weakness are identified, and directions of current and future
development suggested.
Origins
The role of Information Systems (IS) has developed during the years. The original
conception was of the automation of existing manual and pre-computer mechanical
processes. This was quickly succeeded by the rationalisation and integration of systems.
In both of these forms, IS was regarded primarily as an operational support tool, and
secondarily as a service to management.
During the 1980s, an additional potential was discovered. It was found that, in
some cases, information technology (IT) had been critical to the implementation of an
organisation's strategy. The dominant sense in which the term is used is that a strategic
information system (SIS) is an information system which supports an organisation in
fulfilling its business goals.
An alternative interpretation of the term is that it is not necessarily a particular IS,

but rather the combination of those parts of an organization's cluster of information
systems which provide information into its strategic planning processes (Higgins &
Vincze 1993.p.93). The functions involved include the gathering, maintenance and
analysis of data concerning internal resources, and intelligence about competitors,
suppliers, customers, government and other relevant organisations.
A variety of interpretations of strategy exist, most of which have a great deal to do

with competition between corporations. Chamberlin's theory of monopolistic
competition sees corporations as being heterogeneous, and competing on the basis of
asset differences, such as technical knowledge, reputation, ability for teamwork,

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organizational culture and skills, and other 'invisible assets' (Chamberlin 1933, Itami
1987). Competition therefore means cultivating unique strengths and capabilities, and
defending them against imitation by other firms. Another alternative sees competition
as a process linked to innovation in product, market, or technology (Schumpeter 1950).
Porter's Strategic Theory
The context within which SIS theory emerged was the competitive strategy
framework put forward by Porter (1980, 1985), which was based on industrial
organisation economics. For developments along that path, see Kaufmann 1966,
Kantrow 1980, Pyburn 1981, Parsons 1983, EDP Analyzer 1984a, 1984b, McFarlan
1984, Benjamin et al 1984, Wiseman & Macmillan 1984, Ives & Learmonth 1984, Cash
& Konsynski 1985, Porter & Millar 1985, Keen 1986, King 1986). This first section
outlines the basis of that theory. It will then be shown how Strategic information
systems theory is concerned with the use of information technology to support or
sharpen an enterprise's competitive strategy.
Competitive strategy is an enterprise's plan for achieving sustainable competitive

advantage over, or reducing the edge of, its adversaries. In Porter's view, the
performance of individual corporations is determined by the extent to which they cope
with, and manipulate, the five key 'forces' which make up the industry structure:
• the bargaining power of suppliers;
• the bargaining power of buyer;
• the threat of new entrants;
• the threat of substitute products; and
• rivalry among existing firms.
Porter's classic diagram representing these forces is reproduced in Figure 7.1.

Enterprises, through their strategies, can influence the five forces and the industry
structure, at least to some extent.

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There are two basic strategic stances that enterprises can adopt:
• low cost; and
• product differentiation.
In the long run, firms succeed relative to their competitors if they possess
sustainable competitive advantage in either of these two, subject to reaching some
threshhold of adequacy in the other.
Another important consideration in positioning is 'competitive scope', or the
breadth of the enterprise's target markets within its industry, i.e. the range of product
varieties it offers, the distribution channels it employs, the types of buyers it serves,
the geographic areas in which it sells, and the array of related industries in which it
competes.
Under Porter's framework, enterprises have four generic strategies available to
them whereby they can attain above-average performance. They are:
• cost leadership;
• differentiation;
• cost focus; and
• focused differentiation.
Porter's representation of them is reproduced in Figure 7.2.
Figure 7.2

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According to Porter, competitive advantage grows out of the way an enterprise

organises and performs discrete activities. The operations of any enterprise can be
divided into a series of activities such as salespeople making sales calls, service
technicians performing repairs, scientists in the laboratory designing products or
processes, and treasurers raising capital.
By performing these activities, enterprises create value for their customers. The
ultimate value an enterprise creates is measured by the amount customers are willing to
pay for its product or services. A firm is profitable if this value exceeds the collective
cost of performing all of the required activities. To gain competitive advantage over its
rivals, a firm must either provide comparable value to the customer, but perform
activities more efficiently than its competitors (lower cost), or perform activities in a
unique way that creates greater buyer value and commands a premium price
(differentiation). (Refer to figure 7.3)
Figure 7.3
Many differentiation bases exist, classified into four major groups (Border 1964,
quoted in Wiseman 1988):
• product (quality, features, options, style, brand name, packaging, sizes,

services, returns);
• price (list, discounts, allowances, payment period, credit terms);
• place (channels, coverage, locations, inventory, transport); and

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• promotion (advertising, personal selling, sales promotion, publicity).
IT can be used to support or sharpen the firm's product through these various attributes.
Of especial importance is 'product differentiation'. This is the degree to which

buyers perceive products from alternative suppliers to be different, or as it is expressed
by economic theory, the degree to which buyers perceive imperfections in product
substitutability. The buyers of differentiated products may have to pay a price when
satisfying their preference for something special, in return for greater added-value. The
connection between the producer and buyers may be reinforced, at least to the level of
customer loyalty, and perhaps to the point of establishing a partnership between them.
Such a relationship imposes 'switching costs' on the buyer, because its internal
processes become adapted to the beneficial peculiarities of the particular factor of
production, and use of an alternative would force internal changes. Hence product
differentiation also serves as an entry barrier. In addition, a continuous process of
product differentiation may produce an additional cost advantage over competitors and
potential entrants, through intellectual property protections, such as patents, and the
cost of imitation.
The activities performed by a particular enterprise can be analysed into primary

activities, which directly add value to the enterprise's factors of production, which are
together referred to as the 'value chain', and supporting activities. Figure 7.4 reproduces
Porter's
diagram.
Figure 7.4

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The primary, value-adding activities include those involved in the production,

marketing delivery, and servicing of the product. They are linked, generally in a
chain. Support activities include those providing purchased inputs, technology,
human resources, or overall infrastructure functions to support the primary activities.
By co-ordinating linked activities, an enterprise should be able to reduce

transaction costs, gather better information for control purposes, and substitute less
costly operations in one activity for more costly ones elsewhere. Co-ordinating
linked activities is also an important way to reduce the combined time required to
perform them. Hence co-ordination is increasingly important to competitive
advantage. Gaining competitive advantage requires that an enterprise's value chain
be managed as a system rather than as a collection of separate parts. Reconfiguring
the value chain, by re-locating, re-ordering, re-grouping, or even eliminating
activities is often at the root of a major improvement in competitive position.
An enterprise's value chain for competing in a particular industry is embedded

in a larger stream of activities that Porter terms its 'value system', but which might
be more usefully referred to as the 'industry value-chain'. This includes suppliers
and distribution channels. Figure 7.5 reproduces Porter's representation.
Competitive advantage is a function of how well a company can manage the entire
industry value-chain. A corporation can create competitive advantage by co-ordinating its
links in that chain.
An enterprise's activities are subject to influence from:
Figure 7.5 Porter’s Industry Value-Chain

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• New technologies. These may alter the path of the value chain, e.g. the
invention of semiconductors forced many vacuum-tube producers out of
business, and the printing and publishing industries are currently confronted by a
major upheaval;
• New or shifting buyer needs. Customers are demanding the convenience and
consistency offered by fast-food chains. This in turn influences related
market segments;
• Change in industry segmentation. The disappearance of old intermediaries and

the emergence o new ones create the potential to substantially reconfigure the
value chain. Enterprises that fail t adjust will be forced out;
• Shifts in the costs or availability of factors of production. Competitive

advantage can be gained b optimizing based on current conditions. On the
other hand, enterprises saddled with assets and approaches tailored to outdated
modes of operation suffer;
• Change in government regulations. Changes in product standards,

environmental controls, restrictions on entry to the market, and trade barriers
all affect an enterprise's performance.
7.6 Three key success factors common to effective business
First is integrating the network into the organization's business strategy thus
ensuring the flexibility that today's businesses require. New business opportunities
require new application that need network support. An integrated planning process
ensures that the network can meet new demands and support new directions.
The second factor is the homogeneity of services the network provides. An

enterprise network facilitates information exchange among all authorized subscribers.
Homogeneity refers to the ease and commonality of use wherever a customer connects
to the network, which is especially important to subscribers who travel, use devices at
other locations, or connect via remote services

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Finally, an effective enterprise network is a strategic, resource used for

competitive advantage. Telecommunication industry publications feature numerous
examples of organizations using networks to gain competitive advantage.
Competition in the last half of the 1990's and beyond requires that all business
investment provide benefits greater than their cost, networking is no different. Planning
any major business investment is challenging; however, planning the enterprise network
is especially complex. Network planners often, face several constraints that limit their
progress. For example, most organizations large enough to consider data networks have
already committed to a computing strategy, which may confine network planning
options. Many have already implemented data networks, and the financial inertia of
existing systems limits planning mobility. Additionally, new computing architectures,
machine platforms, and business reengineering make network planning little like
building an ocean liner in mid-voyage. Network planners must consider the constraints
as they develop their plans and evolve towards an effective enterprise network.
Today's businesses put much greater demands on the network than those of just a
few years These increasing demands are coupled with unprecedented technological
advances, service offerings, and vendor selection options. Uniting the business and IT
plans with an appropriate enterprise network is becoming increasingly difficult.

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CHAPTER 8: WOrKGROUP INFORMATION SYSTEMS
8.1 Introduction
A major class of new information systems is emerging. These systems are

group productivity systems designed to enable workers to collaborate on a series of
information-based tasks. Workgroup computing offers the potential to dramatically
improve the effectiveness and productivity of organizations by radically improving
the coordination of complex tasks which require cross-functional teams to work
together. These systems must balance the need to structure and coordinate work
with the seemingly conflicting need to support flexible communication between
knowledge workers.
Workflow systems are the flagship information system within the class of
group productivity software. Business processes are dynamic in nature. As the
market changes, as the organization changes, as regulations change, the business
process must change in response. Workflow systems are the essential tools which
an organization must have to respond to in this changing environment.
Workflow systems must have several attributes to enhance the effectiveness

of workgroups:
• Rapid Application Generation: Rapid application development strategies

enable organizations to quickly define a new workflow, to simulate its
operation, to visualize the new workflow graphically, and to generate new
workflow process definitions through a series of iterations.
• Implication Independence & Extensibility: Workflow products must

support comprehensive line-of-business applications from such wide-
ranging areas as insurance and bank loan processing to engineering change
management and process safety management. To achieve this breadth of
support, the workflow product must be completely independent of

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application requirements for data definition, process routing, and

applications interfaces.
• Robust Workflow Engine: The essence of a workflow product is the

underlying, which supports process definition, scheduling, and routing. To
completely support application requirements the workflow engine must
support several key functions such as job definition, security, parallel and
ad hoc routing, drill-down workflows, event monitoring, and simulation.
• Modular Product Design: A modular product architecture with well-

defined interfaces between subcomponents ensures that compliance with
emerging workflow standards can be achieved at reasonable cost.
• Environmental Independence: The underlying technology environment in

which workflow products must operate continues to change rapidly. Well-
designed workflow products must operate independently of key technology
infrastructures such as database, server, and network.
Workflow systems operate not in isolation but rather within an information

systems infrastructure. With the Internet and especially internal corporate Intranets
increasing in popularity, the emerging battle between traditional Client/Server
configurations and the Internet/Intranet is likely to last for a few years with no
conclusive winners. Each technology infrastructure has its own significant
advantages. Workflow products which work across these major groupware environments
will become essential elements of the emerging information infrastructure required
to. manage the global enterprise. Workflow products which work in both
traditional client-server environments as well as with the Internet/Intranet will
provide the best of both worlds, taking full advantage of each world while offering
the buyer the opportunity to use a common workflow product across the corporation.
The basic idea behind groupware is said to be moving information, not people by
using software supported "intentional group processes" aimed at what one commentator
defines as "proactive analysis, compression and automation of information based tasks

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and activities". Group Decision Support Systems (GDSS) are defined as interactive
computer systems supporting a group's formulation and solution of "unstructured
problems". Workflow is defined as a "process driven" way of managing a series of tasks
defined by procedures related to the flow of documents through organizations. It is
noted that one of the biggest problems in the workflow world is the lack of a "succinct
definition", although a March 1996 report identifies four types of workflow:
Production, Collaborative, Administrative and Ad hoc.
At the beginning of 1994, Groupware is seen as being challenged by

multifunctional bundles of integrated applications software. A distinction is made
between workflow and groupware on the basis that the former are designed for "simple
and repetitive activities", while the latter tried to address more complex and variable
organisational processes, although comparisons in the field are felt to be problematic.
Notes is portrayed as being good at dealing with "free form and semi-structured"
information and is praised especially for its "extended cross platform support" and
flexibility, but is said not to be "robust enough" for transaction processing or activity
management. News of Notes add-on products, especially products enabling seamless
connections between Notes and other applications is regularly reported, while Notes
upgrades feature automatic document versioning, full text search, "security features"
and an object store for version 3.x, and promises of "sleeker" user interface, outside
company connections, agent technology and an object oriented scripting language for
version 4.0. Collabra described as a "discussion database" and "an excellent,
inexpensive approach to groupware" is reported being integrated with Novell's
GroupWise suite. IBM and Oracle are said to be releasing workgroup applications
based on enhancements to DB2 and Oracle relational databases, while BeyondMail and
ClipBook are portrayed as extending messaging functions to encompass groupware
applications. As workflow applications are characterised as becoming "increasingly
sophisticated", GUI and OO-based, object-orientation is said to be enabling the creation
of new generation of more easily customisable groupware. At the end of 1994, reports
begin to appear on multimedia groupware --initially with voice, then video.

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8.2 The Evolution of Workgroup Computing
Information systems initially evolved for the purpose of processing transactions.

Transaction processing systems emphasized the efficient and reliable recording of
business events such as customer order receipt and invoicing, inventory control, etc.
Mainframe-based computer systems grew from this need, and even today they manage
the majority of business transactions. The dramatic improvements in processing power
and the emergence of the personal computer gave rise to systems that expand personal
productivity. Significant software innovation began to be focused not just on
transaction management, but also on task automation for individual workers. The use of
desktop publishing packages by graphics designers and computer-aided design systems
by product designers are merely two examples of personal productivity systems.
Today, a third major class of information systems is emerging. These systems

increase group productivity. They are designed to enable workers to collaborate on a
series of information-based tasks. Workgroup computing offers the potential to
dramatically improve the effectiveness and productivity of organizations by radically
improving the coordination of complex tasks, which require cross-functional teams to
work together. Such tasks as product design, customer support, and regulatory
compliance require systems to enable cross-functional teams to communicate,
collaborate, and coordinate their work. These systems must balance the need to
structure and coordinate work with the seemingly conflicting need to support flexible
communication between knowledge workers.
A convergence of technologies is shining the spotlight on workgroup computing. -

Technology advances such as reliable networking, relational databases, powerful
workstations, and internal corporate Intranets have provided a backbone to make
enterprise-wide workgroup computing possible. At the same time, dramatic
marketplace changes are flattening organizations. These changes are forcing rapid
product development cycles, and accelerating the demand for global information
networks. As the need for communication and coordination across organizational
boundaries accelerates, so does the requirement for developing workgroup computing

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systems respond to these needs in dramatic fashion. Indeed, workgroup computing

offers the potential to finally deliver the organizational productivity gains so long
promised by the information age.
8.3 The Evolution of Workflow Market
Early workgroup computing systems began to appear in the mid-1980s. The focus
of these systems, not surprisingly, was on the automation of mission-critical business
processes, which are repetitive in nature. These systems became known as "workflow
systems", with FileNet Corporation becoming the clear market leader in automating
repetitive business processes. In reality, these systems are simply transaction processing
systems that automate paper processing in addition to data processing. Early
applications have been bank loan processing, insurance claims processing, and records
management archiving.
These systems streamlined the process of managing paper-based transactions.

However, they were not without their limitations:
1. Transaction-based workflow systems are focused on streamlining a single

business transaction, which flows through an organization in a sequential and
predictable order. They place great focus on automating routine tasks at the user
workstation, but are not well suited to business processes which are less orderly. As an
example, the processing of a loan application in a bank is reasonably predictable. On
the other hand, the processing of an engineering change order in a manufacturing firm
is much less predictable and may in fact need to be routed to different groups based on
the type of product, the nature of the change, or the financial magnitude of the project.
Thus, transaction-based workflow systems optimize the automation of repetitive tasks
and "paper mills" characterized by clerical workers. They are not well-suited for the
automation of collaborative businesses processes driven by knowledge workers.
2. Most transaction-based workflow systems provide little or no document

management capability. This is of little consequence when the basic unit of work is a
piece of paper being routed through an organization; however, most collaborative

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business processes are document-intensive rather than transaction-intensive. In

reviewing engineering contract changes or large insurance policy changes, there is a
constant need to check documents into and out of archives in a controlled manner.
Thus, the workflow process must be fully integrated with a system which provides
document management and revision control capabilities. This can be provided by
integrating the workflow system with a document management system. However,
ideally this should be accomplished through one system providing both document
management and workflow, so that workers performing collaborative tasks can share
one user interface in an easy-to-administer system- a system where the user
organization does not have to maintain coordination between two systems when each
one comes out with a new release.
3. Transaction-based workflow systems require significant customization, often

through high-level programming (4GL or "C" type), to "add the application to the work
flow". This effort was certainly productive when automating mission-critical, repetitive
business processes, which rarely change from year to year. However, for less
predictable, more collaborative business processes the process of system definition and
"business process reengineering" must be more iterative. This results in an absolute
requirement for a new class of "collaborative workflow" system, which supports the
rapid prototyping of new business processes with little, or better yet, no programming.
Of course, such rapid application development facilities would also be beneficial in
repetitive application building as well.
4. Finally, transaction-based systems typically use server-based architectures,

which maintain much of the workflow logic on the system server. These systems have
proven difficult to migrate into the latest advances in client-server technology, and
therefore have often lagged other systems in their support of advances in networking
environments, client workstation technologies, and application development
environments. Newer generation workflow systems have placed much of the logic in
the client environment, thus enabling the system to take advantage of the increasing
processing power of the client workstation while using the SQL and ODBC standards to
support a wide variety of relational databases.

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As the workflow market has evolved, systems have tended to specialize in one of
three types of applications:
• Transaction-based workflow systems for automation of repetitive, paper-based

business transactions.
• Collaborative workflow systems for the automation of the more fluid, mission-
critical, knowledge-based business processes.
• Ad hoc workflow systems which are enhanced e-mail systems to route

documents "on the I fly", but typically lack the ability to structure, coordinate,
and manage the business process.
A critical weakness of Ad hoc systems is that they are completely user-driven

rather than being driven by the organization as a whole. With a repetitive or
collaborative workflow model, the corporation can establish a new process definition,
modify the process as new knowledge is generated, and capture the benefits of process
re-engineering. With an ad hoc model, all process knowledge is "user-dependent" and
leaves the organization if the user departs.
This market structure is depicted in Figure 8.1 below:
Workflow Market Structure

(Exhibit 1)
Figure 8.1

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8.4 The Essential Attributes of Workflow as a Strategic Technology
To enhance the effectiveness of workgroups, workflow systems must include

several attributes which are often not apparent from a superficial analysis of product
functions and features. These; attributes are crucial to ensuring that the workflow
product can support the underlying business process which it is automating over the life
cycle of the business process.
8.5 Rapid Application Generation
Business processes are dynamic in nature. As the market changes, as the

organization changes, as regulations change, the business process must change in
response. The workflow system must be a tool to support the underlying results, which
the organization is attempting to achieve, rather than the other way around. To support
business processes, which are subject to rapid changes, workflow systems must support
rapid application generation.
The workflow product must provide an easy to use, visual, point and click
interface for configuring screens and building workflow scripts. Screen building, script
building, and workflow should be integrated into a single user interface.
The workflow product must be application independent, that is, it must not impose
a particular data or routing structure. The rules, which define the organization structure,
document structure, and process routing must be completely customizable by
authorized users. Furthermore, the user must be able to change any of these workflow
definition structures through an intuitive interface, which does not require programmers
to execute.
The workflow product must support application frameworks, which provide

building blocks that enable the user organization to quickly generate new applications
as well as modifications to previously defined applications.
The workflow product should be extensible from market-leading application

development environments such as Visual Basic. Developers operating in these

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environments should be able to define workflow objects with all of the key capabilities
of the underlying workflow product.
Rapid application development strategies enable organizations to quickly define a

new workflow, to simulate its operation, to visualize the new workflow graphically, and
to generate new workflow process definitions through a series of iterations.
8.6 Application Independence & Extensibility
Workflow products must support comprehensive line-of-business applications

from such wide-ranging areas as insurance and bank loan processing to engineering
change management and process safety management. Figure 8.2 depicts common line-
of-business applications, which are greatly enhanced by collaborative workflow:
Common Line-of-Business Applications

(Exhibit 2)
Engineering Change Management

Commercial Loan Processing
Legal Contract Management
Process Safety Management
Regulatory Product Approval
Insurance Policy Underwriting
ISO 9000 Compliance
Construction Project Management
Collaborative Workflow Systems
Figure 8.2
To achieve this breadth of support, the workflow product must be completely

independent of application requirements for data definition, process routing, and
applications interfaces. The objective of the workflow product is to provide an
underlying framework for screen building, document routing, process definition,

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and process measurement without imposing requirements on the application. The

workflow product must contain a full set of Application Program Interfaces (APIs)
to enable third-party applications to easily integrate with all of the functions of the
workflow product.
OLE automation is a key technology for providing integration with a variety

of Windows based document processors. An innovative approach to APIs is to use
OLE to enable the workflow vendor's product to work within OLE enabled
applications. Most leading development environments, such as Visual Basic, allow
developers to make calls directly from their scripts to any other application that
provides an OLE API.
8.7 Robust Workflow Engine
The essence of a workflow product is the underlying engine which supports

process definition, scheduling, and routing. To completely support application
requirements the workflow engine must support several key functions:
• Job Definition: The ability to define the workflow job as a series of tasks
and link each task to a set of task completion rules.
• Security: Each workflow task must be linked to the organizational groups

and individuals who can view, modify, or complete the task. The product
should provide multiple user-definable levels of security at the database
record level. The security rules should also be definable at the workflow
step level so that security rules can be modified as the workflow proceeds.
• Process Modification: Authorized users must be able to change workflow

jobs in process without altering the baseline job definition.
• Parallel routing: Collaborative workflow can be streamlined by routing the

workflow task to multiple users at once, - taking advantage of the existence of
electronic rather than paper documents. To achieve this the workflow engine

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must support parallel document routing and the ability to re-synchronize the
workflow process based on managing the document approval cycle.
• Ad hoc routing: In addition to parallel routing, authorized users must also be

able to define flexible routing paths, as many workflow routings are
"conditional" on business events and user decision-making.
• Approval rules: Complex business processes often require the workflow

engine to support sophisticated approval rules including approval delegation,
limits `to approval authority, and various approval voting formulas.
• Drill-down workflows: The organization must be able to define "workflows

within a workflow" so that the organization can take full advantage of the
process definition work already completed when establishing a new workflow.
• Event Monitoring: The engine must monitor significant events such as when
a user does not approve or reject a document within a specified time frame, and
generate appropriate system actions based on such events.
• Status Reporting: The workflow system must provide detailed status

reporting on all jobs in process. Graphical displays should be provided to allow
the user to quickly comprehend the status of the workflow job.
• Audit logging: Audit logs and reports should be provided to allow managers
and regulators to review historical actions and provide proof of compliance
with mandated processes.
• Simulation: There should be a method of simulating the newly defined

workflow process, using event-based probabilities, prior to actually putting the
new process into operation.
In providing these functions the workflow engine is supporting both the need to
structure the workflow process as well as to enable authorized users to generate ad hoc
events within the workflow process. If developed properly, the workflow product will

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support completely structured workflow processes, completely ad hoc functions, as well

as combinations of the two approaches.
8.8 Modular Product Design
As the workflow market matures, different vendors may specialize in different

areas of the classical workflow product. The Workflow Management Coalition, in
recognition of this trend, has begun to develop interface standards between the major
subcomponents of a workflow product. The Coalition has been well accepted by both
the vendor and user community of the workflow market.
Mission-critical workflow products must be designed to conform to these

standards. A modular product architecture with well-defined interfaces between
subcomponents can ensure that compliance with the ongoing development of standards
can be achieved at reasonable cost.
8.9 Environmental Independence
The underlying technology environment in which workflow products must operate

continues to change rapidly. Well designed workflow products must operate
independently of key technology infrastructures such as database, server, and network.
It is possible today to utilize standards such as SQL and ODBC to develop database-and
network independent workflow products. The workflow product should support
market-leading databases such as Oracle, Sybase, and Informix. For large Lotus Notes
installations, the workflow product should also be able to use the Lotus Notes
database as a back end data store as well as provide an API for integration with the
Notes client interface.
Even as the migration to client-server technologies continues, there are still

many mainframe-based line-of-business applications. Products which can extract data
from legacy systems, and utilize that information to define and drive the workflow
process, will add significant value to the, business process. Client/server based
workflow products which support relational databases, butt do not force organizations

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to convert data from legacy systems into relational databases, will provide the best of
both worlds.
8.10 Workflow and the Emerging Information Infrastructure
Workflow systems operate not in isolation but rather within an information

systems infrastructure (see Figure 8.3 below).
Figure 8.3
As workgroup computing has increased in importance, a new class of systems

infrastructure called "groupware" has emerged. Groupware environments are a
collection of software which facilitate document delivery and collaboration between
multiple users. Groupware makes corporate information available to anyone on the
network enabled with the groupware product. Groupware capabilities may include
electronic mail, routing, foldering, and document replication.
Groupware environments are the backbone upon which users will expect
document management systems and workflow systems to operate. Major commercial
groupware products include Lot Notes, Novell GroupWise, and Microsoft Exchange.
Lotus Notes is the current groupware market leader with approximately 4.5 Million

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installed seats. Groupware products include built-in electronic mail and database
replication where data is distributed based on the user group. Each user group
contains an object database which may include groupware forms as well as other
document types.
The rapidly growing popularity of the Internet and web (HT-FP) servers` threatens
the market position of the major commercial groupware products. Many analysts in fact
anticipate that the Internet as well as major corporate Intranets will become the
dominant groupware environment of the future. The Internet provides several
significant advantages over the currently installed technology infrastructure:
• Real-time information access to massive data servers providing large volumes

of information, including information external to the corporation.
• Low incremental cost per user relative to current user workstations. The
Internet relies only on a "thin client" to retrieve information from back-end
servers, and may in fact open up new opportunities for lower cost client
hardware.
Low cost multi-platform development environment.
Very simple, "point and click", standard user interface
The potential of an easier distribution strategy for new software and

software updates, where users can subscribe to software for periods of
time, rather than purchasing software which must be installed on each client.
Major corporations are establishing internal Intranets, in an effort to realize the

advantages of the Internet but "firewalling" their internal environments from the array
of possible intruders on the vast public Internet. According to a recent article in PC
Week, over 60% or Fortune 1000 corporations either currently have, or plan to install, a
corporate Intranet.
The Internet has no built-in database structure, as one would find in a groupware
product. However, major relational database vendors such as Oracle, Informix, and

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Sybase have announced their own Web servers so that Web pages can be dynamically
generated "on-the-fly" to serve as a front-end to these relational databases. This
potential convergence between the Internet front-end and the relational database back-
end threatens the position of many commercial groupware products.
The emerging battle between traditional Client/Server configurations and the

Internet/Intranet is likely to last for a few years with no conclusive winners. Each
technology infrastructure has its own significant advantages. Traditional client/server
has the advantage of being proven, mature technology with a large installed base. The
Internet/Intranet provides a platform independent, information publishing environment
at low incremental cost per user.
While these infrastructures will provide a "groupware backbone", none of them

provide the key capabilities of a robust workflow product:
The ability to streamline a mission-critical business process through a

structured workflow definition, task scheduling, task automation, and
process metrics.
The ability to establish and manage a complex process definition

through an intuitive graphical interface.
The ability to seamlessly integrate with key technologies such as

relational databases, windowing environments, document management,
and imaging.
The ability to rapidly generate sophisticated and yet secure

applications from application frameworks.
Workflow products will support a number of integration strategies to groupware

technologies. For integration with groupware products, the groupware database should
be supported at the back end, while the Workflow client should be seamlessly
integrated with the groupware client via OLE automation. For the internet and

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intranets, one integration strategy will be to allow a web browser to serve as the client
for the workflow engine.
Workflow products, which work across the major groupware environments will
become essential elements of the emerging information infrastructure required to
manage the global enterprise. Workflow products which work in both traditional
client-server environments as well as with the Internet/intranet will provide the best of
both worlds, taking full advantage of each world while offering the buyer the
opportunity to use a common workflow product across the corporation.
8.11 Teleprocessing systems
This is a classic method of supporting a multi-user database system, which uses

one computer and one CPU. Users operate dumb terminals that transmit transaction
messages and data to the centralized computer. Since there is little intelligence at the
users' end, all commands for formatting the screen must be generated by the CPU and
transmitted over the communication lines. This means the users interface is generally
character oriented and primitive. All inputs and outputs are communicated over a
distance to the centralized computer for processing.

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Chapter 9: groupware
Introduction
A workgroup support system (WSS) is a system that is designed specifically to

improve the performance of teams by supporting the sharing and flow of information.
The foundation of any WSS is groupware - the popular term for the software
component that supports the collaborative efforts of a team. SSs primarily support the
information-processing tasks of conveying, creating, and communicating. WSSs also
work with all types of information - internal, external, objective, and subjective.
Groupware is among the newest IT-based tools that you'll find in an organization.
Below we've listed the three functions that groupware supports and the software
that facilitates that support.
1. Team Dynamics
♦ Group Scheduling Software
♦ Electronic Meeting Software
♦ Videoconferencing Software
♦ Whiteboard Software
2. Document Management
♦ Group Document Databases
3. Applications Development
♦ Workflow Automation Software
Comparing those design options across applications yields interesting new

perspectives on well-known applications. Also, in many cases, these systems can be
used together, and in fact, are intended to be used in conjunction. For example, group

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calendars are used to schedule videoconferencing meetings, multi-player games use live
video and chat to communicate, and newsgroup discussions spawn more highly-
involved interactions in any of the other systems.
Consider how these systems can be integrated in other ways. We are still quite far
from developing the grand groupware system that encompasses every type of
communication, and we will probably never get there since the possibilities are
constantly evolving with changes in both our patterns of social interaction and the
technology we have available.
The features of each of the above technology tools will be considered: -
9.1 Group scheduling software and technologies
Group scheduling software
♦ is a component of groupware
♦ is a part of the electronic meeting support component of groupware
♦ provides facilities for maintaining the day-to-day electronic calendars of team

members and evaluating those calendars to schedule optimal meeting times
♦ may even let you reserve a certain room for a meeting and any equipment that
you may need
Office Tracker
♦ Can schedule rooms and other facilities
♦ Supports both personal and group scheduling
♦ Finds available times for groups
♦ Displays side-by-side group schedules
♦ Automatically posts notifications and reminders

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ResSched
♦ Can schedule by fraction of the hour
♦ Can schedule equipment, space, people, and other resources
♦ Supports schedule reviewing by participant, meeting type, etc.
♦ Provides alternatives for booking conflicts
♦ Restricts who can schedule meetings
WallCHART
♦ Can schedule teachers and classrooms
♦ Used by United Nations for scheduling meetings
♦ Provides good reporting features (e.g., room utilization)
♦ Works on intranets and the Internet
♦ Large international presence
Livelink OnTime
♦ Personal calendars can be dispersed across multiple servers
♦ Works on Windows '95, '98, and NT and Mac clients
♦ Scalable to tens of thousands of users
♦ Supports browser access
COMSEC Scheduling Software
♦ Rooms, resources, activities, and office appointments
♦ Attach notes and service requests for schedules

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♦ Use FM WebView to check schedules via the Internet
♦ Works under Windows 3.1/Nt/95/98 and OS2/Warp
Visto Briefcase
♦ Primarily a personal information manager with group-support functionality
♦ Enables relationship identification between workers on the road administration
♦ Supports group appointment setting and e-mailing
♦ Shows private appointments as blocked out times
ScheduleSoft
♦ Rules-based schedule generation system
♦ Runs across all operating system platforms
♦ Supports use of SQL-Server
♦ Runs on LAN or WAN
Meetingmaker
♦ Scalable to tens of thousands of users
♦ Works under DOS, Windows, and Mac
♦ Provides for laptop, palmtop, and remote access
♦ Provides instant access to free/busy time information for both users and
resources
♦ Runs in a standard browser

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Electronic meeting software:
♦ lets a team have a "virtual" meeting through IT
♦ supports both synchronous and asynchronous meetings
MeetingWorks for Windows
♦ Supports brainstorming, idea organization, ranking, and voting
♦ Generates high quality reports and graphs of meeting information
♦ Supports joint application development (JAD)
♦ Free Internet download and use for up to 8 participants
♦ Also available in MeetingWorkds Internet Edition and MeetingWorks Connect
Groupsystems
♦ Supports brainstorming, list building, information gathering, voting,

organizing, prioritizing, and consensus building
♦ Supports strategic planning activity-based costing, business process

reengineering, and knowledge management
♦ Includes utility for on-line surveying
♦ Supports graphical business process analysis and redesign
GroupSystems for Windows
♦ Supports synchronous and asynchronous meetings
♦ Supports anonymous input by participants
♦ Can be integrated with whiteboard software

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♦ Facilitates ranking of issues by secret ballot
Microsoft NetMeeting
♦ Allows people to share audio, video, and computer files
♦ Can be integrated with whiteboard software
♦ Supports Chat features which allows geographically dispersed participants

to communicate messages quickly and easily
♦ Supports simultaneous application sharing
Meeting Builder
♦ For organizing and delivering special events
♦ Triggers further investigation of details so nothing is left out
♦ Can be used in conjunction with Hotel personnel package
Meeting Center 2000 and MyPlaceWare Professional
♦ Real time Web conferencing
♦ Powerful presentation features such as the ability to demonstrate a live

application
♦ Combines real-time visual content through a Web browser
Videpconferencing software
Videoconferencing software:
♦ is part of the electronic meeting support component of groupware

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♦ allows teams to have meetings and see each other when the team members
are geographically dispersed
NetMeeting
♦ Made my Microsoft
♦ Works on Windows 95, 98, and NT
♦ Works over the Internet or an organization's intranet Includes application

sharing whiteboard capabilities
EVX
♦ Made by Avistar Systems Corporation
♦ Allows full-window or mosaic view of team members
♦ Connects to NTSC (North American TV video standard) or PAL (TV

standard in many other parts of the world)
♦ Has enterprise messaging capabilities
Bright Light
♦ Made by Avalon Information Technologies
♦ Includes an information management system
♦ Allows multimedia-rich content delivery
Omega Product Line
♦ Made by VSI Enterprises
♦ Various products for all levels of videoconferencing

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♦ Controls all aspects of conference via on-screen icons and mouse

movements
♦ Includes diagnostic software allowing problem diagnosis or

reconfiguration from remote sites
CineVideo/Direct
♦ Made by CINECOM Corp
♦ Works over phone lines using 28.8 KB or faster modems
♦ Supports one-on-one videoconferencing and live broadcasts
♦ Can be used with video capture devices
PictureTel Live 200
♦ Made by PictureTel
♦ Compatible with Windows 95 and Windows NT
♦ Allows the sharing of applications
♦ Allows transfer of files
CU-SeeMe
♦ Videconferencing for the Internet
♦ Can be used on any TCP/IP network
♦ Has a CU-SeeMe Contact List to allow contact with just an e-mail

address
Intel PC Camera w/ Video Phone Software
♦ Enjoy special occasions with family and friends

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♦ With Pro pack video-in feature, share video from your camcorder or VCR
while you talk
♦ Hold a point-to-point videoconference with clients of colleagues
MyPlaceWare
♦ Present any type of information in a virtual conference
♦ Integrates all types of media into a presentation
♦ Select a time for the meeting and send e-mail addresses an invitation with
the URL
QVIX/CU30
♦ High quality, low bandwidth, real-time full video
♦ Videoconferencing for LINUX
Whiteboard software
Whiteboard software:
♦ lets team members interactively edit and share documents
♦ can capture hand-written notes on an electronic whiteboard
SMART Board
♦ Captures notes written, on an electronic whiteboard
♦ Displays those notes on larger screens and individual computer screens
♦ Supports geographically dispersed video and data conferencing
♦ Even recognizes pen color and saves in that color

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InPerson Whiteboard
♦ Allows you to view, mark up, scale, and manipulate 2D and 3D models
♦ Allows you to share and manipulate information from Windows-based

applications
♦ Can capture images from video streams
♦ Can import files and images
GroupSystems Whiteboard
♦ Can display images for review and annotation by participants
♦ Works with text as well
♦ Facilitator can control who has update or view only privileges
♦ Saves whiteboard contents for later use
TeamBoard
♦ Supports mouse point & click concept with your finger
♦ Captures notes and drawings electronically
♦ Can communicate via LAN or the Internet
♦ Can also distribute notes and drawings via e-mail
Soft Board
♦ Supports remote collaboration
♦ Supports simultaneous access to spreadsheets, the Internet, and presentation

tools
♦ Electronic pen acts as on-board mouse

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♦ Available in plasma display technologies
Group Logic Imagexpo
♦ Interoperable with Windows and Mac
♦ Adds color slides and documents to phone calls
♦ Lets you create softproofs from all common graphic arts formats
♦ Annotation can be made in different, password-protected layers with unique

names
TearnWave
♦ Use whiteboard for meetings, note taking, design, discussion, and more
♦ Share files, URL links, images, etc.
♦ Communication through text and audio-video based synchronous

communication
MicroTouch Electronic Whiteboard Ibid 2.1
♦ Simplifies whiteboard teleconferences by detecting use of NetMeeting
♦ E-mail, print, drag-and-drop, fax, or post meeting notes to a Web site
Work Flow Automation Software?
Workflow automatic software
♦ supports application development
♦ is designed to automate the flow of business documents in a specific work

process or procedure

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Work Expeditor
♦ Designed for use with Microsoft Exchange
♦ Supports SQL server for data access and control
♦ Uses Microsoft Outlook as the CUI
♦ Supports security down to the document level
♦ Provides an O-O business repository
MQSeries Workflow
♦ Provides business process reengineering tools
♦ Helps automate processes for the cyber-corp
♦ Uses process diagrams to implement work flows
♦ Allows you to assign staff to data and processes
♦ Works with Lotus Notes and Web browsers
Staffware
♦ Supports a Java-based Web client
♦ Allows and organization to map, control, and improve business processes
♦ Supports flowcharting of business processes
♦ Includes Executive Information Service, allowing managers to track a

graphical view of a business process
PowerFlow
♦ Enterprise-wide workflow solution

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♦ Allows organizations to graphically design and control processes
♦ Supports SQL database server
♦ Integrates with a variety of third party tools
METEOR Enterprise Application Suite
♦ Supports rapid application and deployment of process management

applications
♦ Works simultaneously on different servers
♦ Supports Web, CORBA, and Java-based development
♦ Integrates with current legacy systems and information
Ultimus Workflow
♦ Includes graphical workflow design tools
♦ Integrates easily with relational databases
♦ For both Internet and intranet applications
♦ Includes automated form designing tools
Dolphin
♦ Doesn't require programming skills to model work flows
♦ Works with NT and Exchange
♦ Processes can be modeled in list or diagram form
♦ For small, medium, and large departments

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Cabinet NG
♦ Written in C and compatible with most other languages
♦ Interfaces with most known databases
♦ Works with word processing, spreadsheet, CAD, etc.
♦ Can produce reports and write them to laser disc
Action Workflow System
♦ Workflow software based on Action's workflow methodology
♦ Available for Lotus Notes and SQL databases
♦ Metro Application Center brings the workflow technology to the

Internet/intranet
♦ DocRoute provides workflow and automated routing to the leading

document management systems
9.2 GroupWare suites
GroupWare suites are software packages designed to provide a full range of

functionality for the complete workgroup environment. These packages often
include facilities for group scheduling, group communication, group meetings,
whiteboard work, group document management, and applications development.
Lotus Note/Domino R5
♦ Delivers messaging and collaborative solutions
♦ Supports Web applications and integration
♦ Integrates with DB2, Oracle, Informix, and Sybase databases
♦ Integrates with SAP's R/3 enterprise software

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Microsoft Exchange
♦ For messaging and collaborative solutions
♦ Unlimited storage capacity, hosting thousands of users
♦ Supports a variety of security controls and encryption methods
♦ Incorporates built-in Internet standards
♦ Works with Lotus Notes and Domino
GroupWase
♦ Includes calendaring, workflow, and much more
♦ Includes images support (e.g., scanning and archiving)
♦ Supports publishing documents on the Web
♦ Y2K compliant
LinkWorks
♦ Document-based business oriented
♦ Supports imaging software such as PowerScan and StorageWorks
♦ Supports O-O architecture
♦ Runs under Windows, Mac, and Internet browsers
♦ Scalable for enterprise-wide deployment
TeamWARE Office
♦ Supports enterprise-wide discussion forums
♦ Provides team calendaring functions

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♦ Accesses you mobile phone when an important e-mail arrives
♦ Supports multi-level access control
Web-4M
♦ Transforms traditional chat rooms into multimedia forums
♦ Collaboration is integrated with mail and Web documents and a

distributed file system
♦ Supports platform independence
♦ Supports full-duplex phoning
Netscape - SuiteSpot
♦ Manages large-scale, business-critical intranets and extranets
♦ Web-based Express clients for mail and calendar
♦ Deploys extranets globally in many languages and character sets
♦ Integrated software set that forms the basis of the networked enterprise
9.3 Asynchronous GroupWare
Email is by far the most common groupware application (besides of course,

the traditional telephone). While the basic technology is designed to pass simple
messages between 2 people, even relatively basic email systems today typically
include interesting features for forwarding messages, filing messages, creating
mailing groups, and attaching files with a message. Other features that have been
explored include: automatic sorting and processing of messages, automatic routing,
and structured communication (messages requiring certain information).
Newsgroups and mailing lists are similar in spirit to email systems except
that they are intended for messages among large groups of people instead of' 1-to-1

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communication. In practice the main difference between newsgroups and mailing

lists is that newsgroups only show messages to a user when they are explicitly
requested (an "on-demand" service), while mailing lists deliver messages as they
become available (an "interrupt-driven" interface).
Workflow systems allow documents to be routed through organizations

through a relatively-fixed process. A simple example of a workflow application is
an expense report in an organization: an employee enters an expense report and
submits it, a copy is archived then routed to the employee's manager for approval,
the manager receives the document, electronically approves it and sends it on and
the expense is registered to the group's account and forwarded to the accounting
department for payment. Workflow systems may provide features such as routing,
development of forms, and support for differing roles and privileges.
Hypertext is a system for linking text documents to each other, with the Web
being an obvious example. Whenever multiple people author and link documents,
the system becomes group work, constantly evolving and responding to others'
work. Some hypertext systems include capabilities for seeing who else has visited
a certain page or link, or at least seeing how often a link has been followed, thus
giving users a basic awareness of what other people are doing in the system -- page
counters on the Web are a crude approximation of this function. Another common
multi-user feature in hypertext (that is not found on the Web) is allowing any user
to create links from any page, so that others can be informed when there are
relevant links that the original author was unaware of.
Group calendars allow scheduling, project management, and coordination

among many people, and may provide support for scheduling equipment as well.
Typical features detect when schedules conflict or find meeting times that will
work for everyone. Group calendars also help to locate people. Typical concerns
are privacy (users may feel that certain activities are not public matters),
completeness and accuracy (users may feel that the time it takes to enter schedule
information is not justified by the benefits of the calendar).

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Collaborative writing systems may provide both realtime support and non-
realtime support. Word processors may provide asynchronous support by showing
authorship and by allowing users to track changes and make annotations to
documents. Authors collaborating on a document may also be given tools to help
plan and coordinate the authoring process, such as methods for locking parts of the
document or linking separately-authored documents. Synchronous support allows
authors to see each other's changes as they make them, and usually needs to
provide an additional communication channel to the authors as they work (via
videophones or chat).
9.4 Synchronous or Realtime Groupware
Shared whiteboards allow two or more people to view and draw on a shared
drawing surface even from different locations. This can be used, for instance,
during a phone call, where each person can jot down notes (e.g. a name, phone
number, or map) or to work collaboratively on a visual problem. Most shared
whiteboards are designed for informal conversation, but they may also serve
structured communications or more sophisticated drawing tasks, such as
collaborative graphic design, publishing, or engineering applications. Shared
whiteboards can indicate where each person is drawing or pointing by showing
telepointers, which are color-coded or labeled to identify each person.
Video communications systems allow two-way or multi-way calling with

live video, essentially a telephone system with an additional visual component.
Cost and compatibility issues limited early use of video systems to scheduled
videoconference meeting rooms. Video is advantageous when visual information is
being discussed, but may not provide substantial benefit in most cases where
conventional audio telephones are adequate. In addition to supporting
conversations, video may also be used in less direct collaborative situations, such
as by providing a view of activities at a remote location.
Chat systems permit many people to write messages in realtime in a public

space. As each person submits a message, it appears at the bottom of a scrolling

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screen. Chat groups are usually formed by having listing chat rooms by name,
location, number of people, topic of discussion, etc.
Many systems allow for rooms with controlled access or with moderators to
lead the discussions, but most of the topics of interest to researchers involve issues
related to unmoderated realtime communication including: anonymity, following
the stream of conversation, scalability with number of users, and abusive users.
While chat-like systems are possible using non-text media, the text version of
chat has the rather interesting aspect of having a direct transcript of the
conversation, which not only has long-term value, but allows for backward
reference during conversation making it easier for people to drop into a
conversation and still pick up on the ongoing discussion.
Decision support systems are designed to facilitate groups in decision-

making. They provide tools for brainstorming, critiquing ideas, putting weights and
probabilities on events and alternatives, and voting. Such systems enable
presumably more rational and even-handed decisions. Primarily designed to
facilitate meetings, they encourage equal participation by, for instance, providing
anonymity or enforcing turn-taking.
Multi-player games have always been reasonably common in arcades, but are
becoming quite common on the internet. Many of the earliest electronic arcade
games were multi-user, for example, Pong, Space Wars, and car racing games.
Games are the prototypical example of multi-user situations "non-cooperative",
though even competitive games require players to cooperate in following the rules
of the game. Games can be enhanced by other communication media, such as chat
or video systems.
9.5 Groupware: Design Issues
As with all user interface design, the method used for designing a groupware
system is more significant than specific design suggestions. This introduction thus

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begins with the groupware design process. The remaining sections address some of
the most common` issues that face groupware designers.
The Groupware Design Process
It's best to start by gaining a solid understanding of your prospective users,

what their goals are, and how they go about their work. For broadly-targeted
groupware applications, such as videophones or email, understanding users can
boil down to understanding how human beings communicate in the first place. A
design is also best informed by conducting user studies on system prototypes. In
these cases user testing is often significantly more difficult than with single-user
systems for the following reasons:
♦ Organizing and scheduling for groups is more difficult than for

individuals.
♦ Group interaction style is hard to select for beforehand, whereas individual

characteristics are often possible to determine before a study is conducted.
♦ Pre-established groups vary in interaction style, and the length of time

they've been a group affects their communication patterns.
♦ New groups change quickly during the group formation process.
♦ Groups are dynamic; roles change.
♦ Many studies need to be long-term, especially when studying asynchronous

groupware.
♦ Modifying prototypes can be technically difficult because of the added

complexity of groupware over single-user software.
♦ In software for large organizations, testing new prototypes can be difficult or

impossible because of the disruption caused by introducing new versions into
an organization.

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When designing groupware, it is often best to begin with field studies. The goal is
to understand a particular type of group or organization that will be using the
groupware system. A number of different studies can be conducted: interviews,
surveys, analysis of artifacts used in the work process, examination of processes and
workflows, etc. In all cases, the object is to identify the users' tasks and goals,
understand how the group communicates and determine the power structures and roles.
One key challenge is to appear non-threatening and objective to the users in order
to obtain accurate information and to insure that they will accept any design that results.
Another challenge is translating the findings from one organization to others -- this is
especially a concern when the groupware is intended for organizations which are truly
unique or too large to effectively study.
Adoption and Acceptance
Many groupware systems simply cannot be successful unless a critical mass of

users chooses to use the system. Having a videophone is useless if you're the only one
who has it. Two of the most common reasons for failing to achieve critical mass are
lack of interoperability and the lack of appropriate individual benefit.
Interoperability
In the early 90s, AT&T and MCI both introduced videophones commercially, but
their two systems couldn't communicate with each other. This lack of
interoperability/compatibility meant that anyone who wanted to buy a videophone had
to make sure that everyone they wanted to talk to would buy the same system.
Compatibility issues lead to general wariness among customers, who want to wait until
a clear standard has emerged.
Perceived Benefit
Even when everyone in the group may benefit, if the choice is made by
individuals, the system may hot succeed. An example is with office calendar systems: if
everyone enters all of their appointments, then everyone has the benefit of being able to

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safely schedule around other people's appointments. However, if it's not easy to enter
your appointments, then it may be perceived by users as more beneficial to leave their
own appointments off, while viewing other people's appointments.
This disparity of individual and group benefit is discussed in game theory as the
prisoner's dilemma or the commons problem. To solve this problem, some groups can
apply social pressure to enforce groupware use (as in having the boss insist that it's
used), but otherwise it's a problem for the groupware designer who must find a way to
make sure the application is perceived as useful for individuals even outside the context
of full group adoption.
Avoiding Abuse
Most people are familiar with the problem of spamming with email. Some other
common violations of social protocol include taking inappropriate advantage of
anonymity, sabotaging group work, or violating privacy.
The Commons Problem
If a village has a "commons" area for grazing cattle then this area can be a strong
benefit to the community as long as everyone uses it with restraint. However,
individuals have the incentive to graze as many cattle as possible on the commons as
opposed to their own private property. If too many people send too many cattle to the
commons, the area will be destroyed, and the whole village is worse off as a result.
There are a couple of straightforward solutions to the Commons Problem: an
appropriate fee can be charged for each head of cattle or a limit can be imposed on the
number of cattle any individual may bring. These solutions are an appropriate starting
point for solving problems of abuse in GroupWare.
CSCW (Computer-Supported Cooperative Work) refers to the field of study which

examines the design, adoption, and use of GroupWare. Despite the name, this field of
study is not restricted to issues of "cooperation" or "work" but also examines
competition, socialization, and play. The field typically attracts those interested in
software design and social and organizational behavior, including business people,

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computer scientists, organizational psychologists, communications researchers, and

anthropologists, among other specialties.
9.6 How is GroupWare Design Different from Traditional User Interface Design?
GroupWare design involves understanding groups and how people behave in

groups. It also involves having a good understanding of networking technology and
how aspects of that technology (for instance, delays in synchronizing views) affect a
user's experience. All the issues related to traditional user interface design remain
relevant, since the technology still involves people.
However, many aspects of groups require special consideration. For instance, not
only do million-person groups behave differently from 5-person groups, but the
performance parameters of the technologies to support different groups vary. Ease-of-
use must be better for GroupWare than for single-user systems because the pace of use
of an application is often driven by the pace of a conversation. System responsiveness
and reliability become more significant issues. Designers must have an understanding
of the degree of homogeneity of users, of the possible roles people play in cooperative
work and of who key decision-makers are and what influences them.
Why Is GroupWare design worth paying attention to in the first place?
GroupWare offers significant advantages over single-user systems. These are

some of the most common reasons people want to use GroupWare:
♦ to facilitate communication: make it faster, clearer, more persuasive
♦ to enable communication where it wouldn't otherwise be possible
♦ to enable telecommuting
♦ to cut down on travel costs
♦ to bring together multiple perspectives and expertise

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♦ to form groups with common interests where it wouldn't be possible to gather a

sufficient number of people face-to-face
♦ to save time and cost in coordinating group work
♦ to facilitate group problem-solving
♦ to enable new modes of communication, such as anonymous interchanges or

structured interactions
In addition to the benefits of GroupWare, another good reason to study usability

and design issues in GroupWare is to avoid a failed design. GroupWare is significantly
more difficult to get right than traditional software. Typically, a GroupWare system
can't succeed unless most or all of the target group is willing to adopt the system. In
contrast, a single-user system can be successful even if only a fraction of the target
market adopts it.

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CHAPTER 10: PERSONAL INFORMATION SYSTEMS
10.1 Data Representation
Data and Information
Raw data, as it is initially collected, is of little value or use. The human brain
organizes audio/visual (and other) inputs and the mind interprets these inputs and
assigns meaning to them. Thus a pattern of vibrations in the air is interpreted as
conversation or as music, and a pattern of retinal impulses-is a rose or perhaps a lover.
One sees and hears, but there is much more to this than just a few organized sensory
inputs, for intelligent organization is required to give meaning to the stimuli. Likewise,
economic and scientific data consists only of raw numbers (symbols) until it has been
organized and interpreted. Once such higher levels of meaning have been attached to
data, it is termed information. This intelligent act of attaching meaning to raw data is
clearly an abstraction process. Indeed, assigning meaning may to some extent be
thought of as a synonym for the whole abstraction forming activity.
At a somewhat more concrete level, it is often possible to automate certain

repetitious calculating tasks that are part of the process of placing meaning on data
collections. These tasks are ideally suited to modern computing machinery and are
driven by sets of instructions that achieve the mechanical aspects of the data
organization. One can go farther than this and say that certain standard meanings are
collected and tabulated, then automatically assigned to the items in the data collection
by the computer program. The latter is then just a fast and reliable extension of human
intelligence bent to the abstraction task
Encoding (Representing) Data
However, there are practical issues to solve at a lower level than describing what
data processing is. These centre on how data is communicated. Whenever one writes a
symbol like "4" or “four," a potential for communication exists, based on the fact that

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these symbols encode a certain idea. By convention, everyone encodes the same idea
with these symbols, so communication is possible.
Computation devices must also encode data in some consistent way. There are two
categories of such codes:
1. External codes. These are usually human-readable characters that are input into
a computer or output from it using a keyboard, screen, printer, or other device. The
most common form for this data is a character such as "4," "a," "%," and so on.
2. Internal codes. Because computer storage is based on electronic circuits that

can be thought of as ON/OFF switches, internal storage is in a different format than that
used for human interface with the machine. In this form, it is not directly accessible by
a human user. The person using a computing machine does not usually need to know
what kind of internal representation is employed for data, because there are input/output
programs that translate the data between internal and external formats.
There are some issues relating to data representation that do make a difference to
programmers, however.
Bits and Bytes
The modern digital computer can only understand binary representations of data.
Binary means "two" -- that is to say, only two "states" can be represented. Over the half
century since the computer has been in existance, many ways have been used to
electrically or mecahically record binary representations. In the beginning, punched
tape and cards were used-- hole or no-hole indicated the binary state. With today's
magnetic media, the polarity (positive or negative) is used to indicate these two binary
states. Many other methods have been used in the past and presently. For humans (not
machines), we use the convenient notation of zero [0] or one [1] to write these two
binary states. We call these elemental states bits--the "zero bit" and the "one bit." The
term "bit" is derived from "BInary digiT".

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Quite obviously, if zero and one were all we could represent in the computer, we
wouldn't have much data. Only rarely is business data represented by a single bit. Bits,
however, are similar to atoms. They serve to create more complicated representations--
to carry the analogy further, the "molecules" of data that humans can use to encode
business information. Bits are assembled into eight-bit patterns called bytes. The basic
storage unit in the computer's main memory and secondary storage is the byte. Bits are
not stored separately.
This technique permits up to 256 possible combinations, which can be assigned

any meanings humans desire. Most frequently, they are used to represent binary
numbers or alphanumeric codes needed to represent business data. However, they can
also be used to represent colors, positions on computer screens, or computer
instructions that the CPU can interpret and act upon, such as moving data to a disk or
printing a line.
10.2 Database Processing
One of the major functions of an organization is the processing of data to generate

the information needed to control and manage the organization. Historically, this
processing was done manually, but the advent of the computer allowed large companies
and government agencies, that could afford a computer and a supporting data
processing department, to computerize the processing of data. If a new report was
needed, a request would be submitted to the data processing department and a
programmer would be assigned to write the program to generate the report. The advent
of the microcomputer was the beginning of radical changes that are still evolving today.
New software was developed in the area of data base management that allowed the user
to manipulate data directly without going through the data processing department. This
database management software gave the average computer user a great deal of power in
working with a database. Data can now be handled in a way that was formally reserved
for the data processing department: the end user can create files, maintain files, select
information from the files, sort the files and print reports based on the information in

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the files. More sophisticated application are still programmed frequently using the
programming language available with the data base management system.
A database is a single collection of data. It can hold the information about many
different entities related to the company (an entity being simply a person, place or thing).
Databases not only contain the information about these entities (known as attributes),
they also contain information about relationships.
A database is all the raw data needed to create and provide information that will
satisfy the varying needs of users in the organization. In some cases the database may
be a mixture of data held on computer and manual filing systems but for the purposes of
future sessions we will assume it is all held on computer. Inside the database are all of
the items of data that belong to the organisation but this data may have been stored on
different systems in different locations (a distributed database). In order to be able to
locate where the information is stored, the database requires a management system
which effectively provides a map of where data is stored and a programme to locate and
retrieve the data specified. In order to overcome the problem of data stored on different
systems, written in different 'computer languages', programming staff have had to
develop bespoke management systems specifically for the purpose. The Data Base
Management System is, in effect, the intermediary between raw information and those
who need the information, giving users the freedom to use the data in their own specific
way. This may not be the ideal solution - disparate databases often require a high level
of maintenance to maintain their effectiveness and there is a substantial cost associated
with this. A preferred solution may be to develop a corporate database with a
corporate Information Systems structure and framework.
The database is the primary means of integration and dissemination of data (refer
to figure 10.1)

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The data that is stored or updated by one system is then available to the others. It
can also be used to produce specific management information.
Figure 10.2
The higher up the organisation, the less structured information tends to become
(refer to figure 10.2)
In a previous session, a figure similar to the one above was used to explain the
role of different levels of management within an organization. If we consider the
types of decision with, which these levels will be involved then there will be a
tendency to move from structured decisions (programmed) at the operational level, to
unstructured (non-programmed) decisions at the strategic level. Underpinning the
pyramid is a representation of the operational and functional systems of the business,
i.e. accounting, stock control, debtors/creditors, providing information for the operational
level of management. In the past, these systems have also provided the management
information for the tactical and strategic levels of management. In effect, the next
layer up has received information contextualized by the level below. This has three
major disadvantages:
i. The information coming from these systems is looking backwards

(historical), whereas the higher levels of the management structure are focused on
increasingly longer forward projections.
ii. Information being passed upwards is a reflection of what that level thinks
the next level up requires (but is often not the case).
iii. By the time information has passed up the structure, been acted upon and
decisions passed back down again, the situation will have altered in any case!

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In summary, a single management information system, which attempts to

satisfy the needs of all levels of management, often satisfies none.
10.3 Personal Strategic Planning
What are some of the benefits of Personal Strategic Planning?
First of all, strategic planning helps provide a personal vision for the future. It
is so easy to get wrapped up in the present that we lose sight of where the future
might be leading us. If we intend to grow in any significant aspect of our lives, we
need to periodically focus on what the future will look like. Depending on where
you are in your career and your life, this future vision may be as little as two or
three years out or could be as much as twenty or thirty years in the future. The
ironic thing about focusing on a period in the future is that what you project for
that time is probably not what's going to happen. Specific circumstances,
opportunities, threats, and personal preferences may lead you in a distinctly
different direction from what you established in your initial planning effort. That
does not invalidate the planning process. By focusing on the future, we are able to
determine when it is appropriate to change a course of direction.
Career direction is a strong concern for most professionals, particularly

during the early stages of their careers. It is interesting to note that only a small
fraction of professionals end up in the career 'for which they initially prepared. Our
interests change; different opportunities present themselves, family obligations
impact the direction in which we should be moving. By looking forward, we have a
better chance of identifying some of the road blocks that may interfere with where
we want to go and identify some of the options that may become available to us.
Sometimes, by playing the "what if' game, it will open up new vistas that might not
otherwise become apparent to us. While this will not necessarily prevent us from
stumbling along the way, there is a greater likelihood that we will be able to
respond more effectively to things that can significantly impact where we are
going.

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Creating and taking advantage of opportunities is generally much more

productive if we keep our peripheral vision open. These "opportunities" are not
limited to our profession. They can include such things as financial investments,
real and personal property, family and friends, or anything that has a significant
meaning in our lives. While there is always a risk in looking at opportunities, that
risk tends to be reduced when we have anticipated it and planned how to deal with it.
As a counterpart to the risk involved in opportunity, strategic planning can

also significantly enhance our personal and business security and safety. This
includes, of course, financial security, health and well-being, family concerns, and
any factors that might cause significant future trauma.
The subject of retirement can arouse a variety of different emotions,

depending on where we are in our chronological and professional lives. For many
professionals, total retirement may never be a reality. Many of us feel that, as long
as we have our physical and mental faculties, we will continue to practice our
professions indefinitely. The base and focus of our efforts may change, but we plan
to continue practicing our professions to some degree as long as we are able. On
the other hand, there are many professionals who look forward to retirement as an
opportunity for a significant change in lifestyle that will create new experiences
that their careers may have interfered with in the past. Regardless of your own
perspective on retirement, when you come to the point where it is appropriate for
you to back off from what you have been doing, it will be much more satisfying
and fulfilling if it comes as a result of planned effort rather than the closing of a door.
The building and maintaining of a balanced life represents another significant

benefit of personal strategic planning. Oftentimes, practicing professionals develop
"tunnel vision" which keeps them narrowly focused on their business and careers.
During certain periods of our lives, this may be justified. However, life is much
more than getting ahead professionally or in business. We need to achieve a
balance that includes family and friends, health and wellness, personal fulfillment
that may not directly relate to our profession, financial planning, spiritual

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development, and service to others. Just as a chair will not function properly if one
of its legs is longer or shorter than the other, neither will our lives function
effectively without some sort of holistic balance. Giving significant attention to
another important aspect of our lives does not necessarily detract from our
professional focus. In fact, it is possible to achieve a true synergy wherein the
"whole" person can be even more productive professionally as well as personally.
A final significant benefit is the opportunity to involve others in making our

futures come alive. These could include our life partners, parents and siblings,
children, professional colleagues, employers, and friends who have either a vested
interest in our success or a genuine concern about our future well-being. Since
there are very few things in our lives that we can accomplish without the help of
others, it is much more meaningful to get them involved as early as possible in the
planning process. Not only are they able to offer significant contributions that may
help make our plans more effective, their active support in the pursuit of these
efforts can go a long way toward assuring their achievement.
Why do Professionals tend to resist Planning?
Thinking versus action frequently provides an interesting dilemma for many

professionals. We tend to be action-oriented. When we are doing something, we
have a feeling of being productive. When we take the time to think, we sometimes
feel guilty of being unproductive. While there is no question but that whatever we
do should lead to some sort of productive action, in reality very little such action
comes without some kind of realistic thinking. Therefore, it is not "either-or";
rather, it is "both-and." In fact, without investing the time and effort required to
think about where we are going, there is a very strong likelihood that we will never
get there. And, of course, we have to decide where "there" is. It is difficult to do
that without putting significant effort into thinking.
Time required frequently is a barrier to effective planning. How often have

we said "I just haven't got the time to do that right now". While that may be a
legitimate reaction occasionally, in many cases it turns out to be just an excuse. It's

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interesting to note that we frequently don't have time to plan the job appropriately
ahead of time. However, when the job does not get done right, somehow or other
we always find the time to do it over again. Time is one of those exhaustible
commodities with which we have to deal as professionals. Consequently, the
planning process, while it does take time, could lead us to much more productive
use of what limited time we do have available.
Changing circumstances frequently is given as a reason for not putting

significant effort into planning. "How can we plan when things are changing so
fast!" is a frequently-heard expression. As we identified earlier, changing or
modifying plans is not only inevitable but actually desirable in many situations.
The key, of course, is to recognize when changes are taking place. There is nothing
wrong with changing direction, provided we know we are changing and there is a
valid reason for doing so. The purpose of a plan is to provide us with a foundation
from which we can make appropriate digressions which may be more productive at
the time.
When things are going well is a time when it is easy to fall into the trap of
thinking that they are going to continue to go well "forever." When we are on a
highly successful path is probably the time when strategic planning is most critical.
Despite the euphoria we may feel at such times, it is absolutely certain that it will
not go on "forever." Something will happen that will be other than what we had
anticipated, thus moving us, whether we like it or not, in a different direction.
Being better prepared for dealing with those situations that may run counter to our
desired direction is one of the single most important reasons for doing strategic
planning in the first place. While we may not be able to anticipate everything that
will have an impact on where we are going, we stand a much better chance of
dealing effectively with that if we have looked ahead and anticipated some of the
things we might be facing.
When things are not going well is probably a more legitimate reason for
postponing strategic planning efforts. When your house is on fire is not the time to

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think about installing a sprinkler system. Really, when we are faced with survival,
that has to take precedence over where we are going in the long run. For, as one
wag said, "In the long run we are all dead." The problem that frequently faces us,
however, is that we tend to think we are always in a crisis situation. Unfortunately,
this frequently comes as a result of the way we function personally. If you find
yourself in a situation where you are moving from one crisis to another on a
continuing basis, perhaps that is when you need to take some time off, sit back and
really think about where it is that you want to go. We frequently find that these
crises come as a result of a lack of effective planning in the first place. At some
point, we may need to break that pattern in a way that is going to be more
productive for us.
Finally, not recognizing the difference between strategic or long-term

planning and operational planning may inhibit our efforts. Operational planning,
which is commonly what we have to apply in dealing with crisis situations or in
achieving our short term results, tends to be quite specific and very much action-
oriented. Strategic planning, on the other hand, is much more conceptual and
visionary. It is far more directional than specific. If you plan to commit yourself to
some form of strategic planning in your own professional life, it needs to be
addressed at a time when that is the principal focus. You may find it helpful to
have someone else assist you in the process who can keep you focused on the
strategic or long-term concerns. Think of strategic planning as helping you
determine where it is you are going and operational planning as how you will get there.
10.4 Survey of Personal Information Systems
Text Processing
A.M. Turing said that if a machine could impersonate a human being, then the
machine was thinking. A computer may be said to have artificial intelligence when
it exhibits intelligence ordinarily associated with human behaviour (reasoning,
learning, use of language, and so on). In the field of AI, there are opposing view
points as to whether computers should be programmed to imitate the way the

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human mind works, or whether computers should simply simulate human

behaviour in any way practical, whether or not that is the way people think.
Computer scientists generally agree that an AI programme is designed to

produce knowledge and that such processing includes inferencing (the ability to
derive additional knowledge from the original knowledge base). Inferencing
capabilities are required, for instance, to fulfil the task of determining phonemes
from variable sound or allophones.
If "intelligent computers" are ever developed, if artificial intelligence ever

approaches human intelligence, it is clear that linguistics will play a major role in
these developments, because human linguistic ability is the single most prolific
manifestation of intelligence.
Computers are masters of the statistical analysis of language. They can be

programmed to reveal such properties of language as the distribution of sounds,
allowable word orders, permitted combinations of morphemes, relative frequencies
of words and morphemes, etc.
Existing texts, such as the Bible or Shakespeare's works, can be analyzed, and
so can a collection of utterances gathered from spoken or written sources. Such a
collection is called a corpus. At Brown University (U.S.A.), a corpus of written
American English (consisting of newspaper passages, articles from magazines, and
other literary material) was compiled. A corpus of spoken American English,
similar in size to the Brown corpus, was also collected. The Brown corpus and the
spoken American English corpus were analyzed and compared. This comparison
provided a contrast between written and spoken American English. The pronoun
"I" occurs ten times more frequently in spoken language. Profane and taboo words
are, as expected, more frequent in spoken language. Prepositions occur more
frequently in written than in spoken American English, so different syntactic
structures are used in written and spoken English.

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Computers can also be used to produce a concordance of a literary text,

which gives the frequency of every word in a text and the line and page number of
each occurrence. Nowadays, concordances are used to help ascribe the authorship
of a text to a certain author. If the concordance of a text -- of which the author is
unknown -- is compared to the concordances of known works by two authors, it is
possible to say which of the two authors wrote the text.
A concordance of "sounds" by computer may reveal patterns in poetry that

would be nearly impossible for humans to detect. Poetic and prosaic features such
as assonance, alliteration, meter, and rhythm have always been studied by literary
scholars. These days, computers can do this mind-numbing work.
Electronic Spreadsheets
Information Systems oral history and some published newspaper interviews

report that in 1978 Dan Bricklin, an M.I.T. alum and then student at Harvard
Business School, invented the electronic spreadsheet. Bricklin supposedly was
preparing a spreadsheet for an HBS "case study" and had two alternatives: 1) do it
by hand; or 2) use a clumsy time-sharing mainframe program. Bricklin thought
there must be a better way. He wanted a program where people could visualize the
spreadsheet as they created it. His metaphor was "an electronic blackboard and
electronic chalk in a classroom."
By the summer of 1978, Bricklin had programmed the first working version of
his concept. The program would let users input a matrix of five columns and 20
rows. The first version was not very "user friendly" so Bricklin recruited Bob
Frankston to improve and expand the program. Frankston expanded the program
and "packed the code into a mere 20k of machine memory, making it both powerful
and practical enough to be run on a microcomputer".
During the summer of 1978, Daniel Flystra joined Bricklin and Frankston.
Flystra was also an M.I.T./HBS grad. Flystra was marketing oriented and
suggested that the product would be viable if it could run on an Apple computer.

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The three formed Software Arts corporation in January 1979. In April 1979, the
company began marketing "VisiCalc", a compression of the phrase "visible
calculator".
VisiCalc became an almost instant success and provided many business

people with an incentive to purchase a personal computer. About I million copies
of the spreadsheet were sold during Visicalc's product lifetime.
What is a spreadsheet?
In the accounting world a spreadsheet was and is a large sheet of paper that lays
everything out for a businessperson. It spreads or shows all of the costs, income, taxes,
etc. on a single sheet of paper for a manager to look at when making a decision.
An electronic spreadsheet organizes information into columns and rows. The data
can then be "added up" by a formula to give a total or sum. The, spreadsheet
summarizes information from many sources in one place and presents the information
in a format to help a decision maker see the financial "big picture" for the company.
What came after VisiCalc?
The market for electronic spread sheets was growing rapidly in the early 1980s
and VisiCale was slow to respond to the introduction of the IBM PC that used an Intel
computer chip. Mitch Kapor developed Lotus and his spreadsheet program quickly
became the new industry standard. It not only made spreadsheet formula easier by using
the shorter, more intuitive Al referencing system (as opposed to Visicalc's R1C1
system) but also added graphics and set spreadsheets on the road to become major data
presentation packages, as well as complex calculation tools. Lotus was also the first
spreadsheet vendor to introduce naming cells, cell ranges and spreadsheet macros.
While at Visicorp, Kapor wrote Visiplot/Visitrend which he sold to Visicorp for $1 million.
Part of that money was used to start Lotus Development Corp. Ironically, Kapor offered
to sell Visicorp his Lotus 1-2-3 program. Supposedly VisiCorp executives declined the
offer because Lotus 1-2-3's functionality was "too limited". To date Lotus 1-2-3 is still
the all-time best selling application software in the world.

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In 1985 Lotus acquired Software Arts and discontinued VisiCalc. A Lotus

spokeperson indicated at that time that "1-2-3 and Symphony are much better products
so Visicalc is no longer 'necessary."
The next milestone was Excel. Originally written for the 512K Apple Macintosh
in 1985 Excel was one of the first spreadsheets to use a graphical interface with true
pull down menus and a mouse point and click. The spreadsheet instantly became easier
to use than the "archaic interface" of PC-DOS products and many people bought Apple
Macintoshes simply so that they could use Excel. Excel never did come out in a DOS
version.
When Microsoft unveiled the original Windows in 1987, Excel was one of the first
products to be written for it, and even now many people still use Excel 2.1 which was
written to run under Windows version 2. When Windows finally took off with Version 3.0
in late 1989 Excel was its flagship product. It remained the only Windows spreadsheet
for nearly 3 years and has only received any real competition from other products since
summer 1992.
By the mid 1980s many companies had introduced spreadsheet products. Lotus
had acquired Software Arts and the rights to VisiCalc. Also, Microsoft had-joined the
fray with the Excel spreadsheet. By the mid-1990's IBM had acquired Lotus and
Microsoft Excel was the spreadsheet market leader.

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Chapter 11: executive information system
11.1 Introduction
At the strategic level of the organization, a reliance upon operational, historical

information is like 'trying to drive a car forward by only looking in the rear view
mirror'. Of course, historical information can be useful in identifying patterns and
possible future trends but these will be affected by external factors, particularly over
long time spans. Executive Information Systems enable data and information to be
drawn out from any number of systems, including those external to the business, for
example, Stock Market Share information. Models using this information can be
constructed and 'what if?' questions posed to help evaluate future positions. For
example, a 'model' might be constructed of the potential profitability of a new product
over a five years life cycle. The question, "what if a similar product is brought onto
the market in year 3 at 5% below our selling price?", can be fed into the model to help
provide an answer to that particular scenario.
Executive Support System are graphics-oriented systems designed for senior

management athat provide generalized computing and telecommunication facilities
for monitoring and controlling a business. Executive Information Support System
software and communication package integrates virtually all of your information
sources into a cohesive network.
Functions such as manufacturing, purchasing, customer service, accounting,

which generate production schedules, inventory usage, income statements, balance
sheets, are connected to provide immediate access and dissemination of critical
information. Executive support systems are very important for information technology
to support the management of business.
Executive support systems (ESS) help managers make unstructured and semi-
structured decisions. They focus on the information needs of senior management and
combine data from both internal and external sources. A system is a generalized

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computing and communications environment that can be focused on a changing array

of problems. ESS include tools for modeling and analysis.
ESS can and do change the workings of organizations. Executives are better able
to monitor activities below them, allowing them to push decision making further down
in the organization while expanding the executive's span of control.
ESS flexibility allows executives to shape the problems, using the system as an
extension of their own thinking. ESS offer executives the ability to analyze quickly
and to compare and highlight trends, freeing up executives -- and even more so their
staffs -- for more creative analysis and decision making.
An executive support system (ESS) is a decision support system especially made

for senior-level executives, including all the necessary hardware, software, data,
procedures, and people. Several commercial software packages are available for
specific modeling purposes.
An ESS must take into consideration:
♦ The overall vision or broad view of company goals
♦ Strategic, long-term planning and objectives
♦ Organizational structure
♦ Staffing and labor relations
♦ Crisis management
♦ Strategic control and monitoring of overall operations
Basic qualities of an EIS are:
♦ capability to look over the situation in your company “in half an hour"
♦ punctual taking steps in eventual deviation from planning activities

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♦ reduced and merged data, interesting for an executive
♦ ability to communicate with employees by local Email
♦ it doesn't require any keyboard skills from user, executives can use just
mouse
♦ very adaptable in concrete user environment and satisfaction of his

demands
♦ graphical presentation of data
♦ many kind of printed reports and reviews due the different criteria
Executive Information Systems (EIS) have grown in interest and use over the
past 15 years. They are a response to inadequacies in Management Information
Systems (MIS) which, although capable of manipulating vast quantities of data, are
frequently difficult to use and not able to respond to managers' needs with any
degree of flexibility. An executive decision maker requires a precise understanding
of the current organisational situation and it has been observed (Dreyfus & Dreyfus
1986) that businessmen prefer concrete information, even gossip, speculation and
hearsay to the abstracted summary information contained in routine MIS reports.
EIS are relatively new tools which purport to provide executives with computer-
based information support for decision making. Not surprisingly, one of the
specified characteristics of an EIS is that it be ‘user-friendly and require minimal
or no training to use' (Watson et al, 1991). Due to the reluctance of executives to
adopt information technology for their own work, developers of EIS have been
particularly concerned with the user-friendliness of their products, with the result
that most EIS have attractive and ease to use interfaces. Despite this, or maybe
because of this, the majority of EIS projects are not successful. This concentration
on a generic interface between a user and the machine arises from work in HCI
(Human Computer Interaction) based on cognitive psychology which, although
adequate for lower level information systems, may account for a lack of EIS
success when applied to these more complex systems

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This leads us to seek an optimal interface design for users who are making
executive decisions' and to question whether the current models of HCI are
adequate. Questions raised relate to the characteristics of this user population and
the way executives may be expected to approach and make use of such a system.
Do executives model things differently to others? Do they focus on different
information? Do they deal with information in a different way? Are executives a
homogeneous group in this regard? Have studies been conducted which examine
these questions? In this paper we look at the background to this problem and
suggest ways of discovering solutions to this most fundamental problem in EIS
interface design.
11.2 Components of an Executive Information System
Examining the components of an EIS is dependent upon the definition used.

Opinions differ on how much peripheral support, as opposed to amalgamated
information, should be provided. Taking the distinction made by Watson et al
(1991) between an EIS and an Executive Support System (ESS) we would exclude
consideration of support for electronic communication (e-mail, word processing,
etc) and organising tools (electronic calculator, automated rolodex, etc). In
Watson's view an EIS would be limited to providing information. Rockart & de
Long (1988) identify three broad ESS capabilities - Communication, Status
Access, and Query & Analysis. These are listed in ascending order of complexity
and skill required by executives. Watson excludes data analysis from the definition
of EIS but it is included here as an extra or adjunct function which an executive
can call from the status access function. Some executives will not want this. Some
will ignore this initially but take advantage of the capability as they gain
familiarity and develop confidence with the system. The interface for the
communication tools can possibly be ignored since these are specified by the off-
the-shelf packages adopted generally in an organization. Status Access largely
requires an interface to choose the displays which will be made available, the
information that will be included and how it will be formatted. Data Analysis will
require a more sophisticated interface with provision for input of various types as

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well as more complex choices of what analysis should be done and which data will
be used. Status Access and Data Analysis may shade into each other depending on
how much control is given to the user in status access to vary displays. If a
standard data access tool is used then the system design may be constrained by the
tool specified. Excluding Communication/Organizing tools from a system leaves
Status Access/Query & Analysis as a single module, which can be looked at in
terms of a consistent interface.
Another aspect is the scope of the system. A common misconception of EIS is

that they are merely an easy to use graphical interface onto a small database
containing summarized information on the organization's progress. If the EIS
concept is limited to this, it is almost certainly doomed to failure. To implement a
successful EIS the system must be seen to include the whole organization and its
environment, from the executives who will use the information, to those
responsible for ensuring the integrity of the data in the main company databases
from which EIS database is fed. In most reports on EIS, developers of these
systems have emphasized the notion that "ease-of use" is their prime usability
constraint. However, in a study of executive use of EIS, Hasan & Gould (1994),
have found that no matter how `friendly' the interface, executives will only use the
system if they have confidence in the reliability of the information. Executives in
this study stated that it was far more important that information systems for
executive use, should have a consistent interface style, allow verification of the
accuracy of the information, allow annotation to explain exceptional cases and
permit sensible cross-functional comparisons of data from different systems.
11.3 Executive Cognitive
There are formal and abstract models of human cognition which deal with
‘language, inference and consciousness' such as Johnson-Laird (1983) but these are
not procedural or practical enough to be useful. Rockart & de Long (1988) outline
a number of models of the way executives operate but are founded on a rather
informal theoretical base lacking a solid psychological foundation. Allen (1994)

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has studied the concept of usability which he defines as the non uniform effects of
system characteristics on user performance. He also explored the offering of choice
to users in the interface as a means of improving performance. This is important
because it may indicate that EIS need to be individually tailored to particular
cognitive styles. Er (1988) has classified the cognitive style of managers along two
dimensions; the preferred way of getting data and the preferred way of processing
it. In the former, an individual may be classified as a 'sensing' (S) type who prefers
hard data that deals with specific problems or an 'intuitive' (N) type preferring
holistic information that describes possibilities. On the processing dimension
individuals may be 'thinking' (T) using logic or other formal means for reasoning
or 'feeling' (F) where preference is given to personal terms in decision making.
Combining these dimensions gives four possible decision styles:
♦ Systematic (ST)
This decision maker prefers hard data and logic such as cost benefit analysis
and evaluation research.
♦ Speculative (NT)
This type prefers to speculate future possibilities with dicision trees and
sensitivity analysis.
♦ Judicial (SF)
This type prefers quantitative measures in conjunction with feedback from

decision making groups.
♦ Heuristic (NF)
Heuristic decision makers place great emphasis on current possibilities and

prefer reaching decisions through mutual adjustment.
The implications of this are that a decision making process needs to be

developed which takes into account the different cognitive styles of managers

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making the decisions. For example 'what if analysis suits the speculative decision
maker and cost benefit analysis of hard data suits the systematic type. There is
some evidence (Phillips, 1984) that decision makers do not make decisions based
on the probability of success but rather on the basis of their aversion to failure due
to the more drastic penalties. Phillips goes on to suggest that decision technology
should be centred on problem solvers (with experience, intuition and knowledge)
supplemented by information technology (computers, software, databases,
networks and modelling) and preference technology (value judgements, time and
risk preferences and trade offs).
11.4 Psychological Profiling
There seems to be a role for psychological profiling of executives as a first

step in the design of an EIS. These profiles are currently used extensively in
organisations for providing management with information about the future
potential of employees. The most common form of administering this profiling is
by a video taped interview with a professional psychologist. The tape is then
viewed and responses by the subject transferred to profile data which is input to a
statistical package for analysis. The design of the structured interview questions is
usually determined by close consideration of company policy and desired
characteristics of future executives. This technique seems readily adaptable to the
analysis of executive requirements for EIS. For example the determination of the
class of executive along the lines suggested by Er (1988) would be an important
first step. Other factors to consider in this profile would be to determine whether
the executive focussed on key issues and preferred to skip details, whether they
were able to make decisions in the absence of real data and what are their reactions
to being forced to make a decision under pressure.
11.5 The Psychological Basis of EIS
To obtain user requirements and draw up user profiles for the development of
any computer system it is necessary to have all understanding of its prospective
users. EIS are no different in this respect except that the users are high powered

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company executives. With conventional computer-based information systems,

cognitive science has been used with some success in defining user characteristics
as part of an "information processing loop" (Kaptelinin 1994). It is a form of
natural-scientific materialism that has evolved in the wake of the scientific and
technological revolution associated with the building and use of computers. The
human mind was seen as a special kind of information processing unit and, when
viewed in this light, the similarity to the newly emerging computer technology was
compelling. But, typically, it fails to distinguish between the psychic in the human
and the information processes of the machine. When cognitive psychology is
applied to defining user characteristics, the HCI system is seen as being composed
of two information processing units, the human beings and the computers, so that
the output of one unit is the input to the other. In this light, the role of the
computer is seen by many as "replacing" the human in intellectual spheres, so that
the two loops both human and computer are compatible and in fact identical so that
they can be considered as one extended loop. However, as Kaptelinin (1994) points
out, this combined information processing loop, made up of two other loops, is
itself closed, making it difficult to take into consideration any phenomena that
exist outside the loop. Dynamic, interactive systems such as EIS highlight the
severe limitations of cognitive science as a theoretical basis to explain the
interaction of people with the computer. It does not provide an appropriate
conceptual basis for computer use in its social and organisational context in
relation to the goals, plans and values of the user (Kaptelinin, 1994). A more
holistic approach such as that provided by Activity Theory may be more helpful.
Activity Theory is able to conceptualise humans in their context and positions

tools as the means of mediating work activities and developmental processes.
Taking on an Activity Theory approach means that activity is the core point of
departure for any kind of human research. It provides a "bottom line" from which to
start analysing any type of human interaction be it with a computer or any other tool.
This centralised approach in research is in stark contrast to cognitive science which by
virtue of its unsound basic premise of the human as an information processor, has been
forced into a piecemeal approach. It has also been argued that one of the main

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weaknesses in traditional Western psychology is the establishment of so many

individual schools of psychology that none of them will ever be able to investigate any
single problem in enough detail to arrive at a satisfactory answer (Wertsch 1981).
Activity Theory, however, is not a monolithic "theory", but more a frame to be

filled out and a set of insights to be utilised - a set of basic principles evolved from a
dialectic materialistic approach to understand human life. All the principles that have
been delimited in Activity Theory are no more than premises that determine the general
direction of development of contemporary psychology (Asmolov 1987). An analysis of
human-computer activity would permit more complete use of the possibilities of the
development of human activities, which are revealed thanks to computers. The main
applied psychological problems revolve around how to make sure that people using the
computer are able to further improve their thinking.
An EIS itself does not have a clear cut goal as do most conventional computer
based information systems. It is rather a tool which has the flexibility to be used as a
source of information when needed. On the other hand executives are often very goal
oriented in their work on a specific task and rely on sets of intuitive procedures which
are known to have worked previously. This relates well to an Activity Theory approach
as outlined in Boedker (1991) where she maintains that all activity is bound to a goal
and/or an object and the characteristics of the goal or object partially determine and
structure the activity. The goals or objects of activity, undertaken by executives in their
day-to-day tasks, vary and cannot be anticipated when an EIS is being developed. This
concept is rarely appreciated by EIS developers. The relationship of goals, objects and
activities, as found in Activity Theory, provides a framework on which new
development. methodologies can be created for the building of flexible EIS where the
goals of the user can be determined as the system is used.
11.6 Conclusion
Mediated mental processes are the central thesis of Activity Theory. Just as the
use of language represented a new stage in the development of human higher mental
processes can we, as Tikhomirov (1981) poses, "distinguish a new stage in the

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development of higher human processes" as a result of using the computer. If

computers were able to "think" we need to be able to distinguish how mediation of
mental processes by the computer differs from mediation by signs such as language. He
explains why it is "not a new stage in the path to internal mediation" but "is the further
development of external mediation". The use of computers in storing and searching for
information, in solving pre-programmed problems and other computer specialities, he
says, does not mean the "disappearance of human thought, but the reorganisation of
human activity". This leads to the appearance of new forms of mediation in which the
computer as a mental activity tool ultimately transforms the very mental activity which
it was devised to assist.
Nowhere is the concept of mediation more evident than in the use of EIS for
organisational strategic decision making. EIS is used as a flexible and exploratory tool
by the executive to identify problem areas and windows of opportunity thus
transforming the very activity it was designed to assist. In this way by continued EIS
use the executive's internal model of the organization is modified and new demands are
made of the EIS. The EIS must be flexible enough to adapt to these changing
requirements and to evolve along with the executive if it is to take its place as a useful
tool in a long line of other artefacts adopted by humans EIS over the centuries.
Much work has still to be done in this area in the adaptation of currently available
psychological profiles so that they provide information about executives, which can be
used as input to HO design of EIS interfaces. But the topic seems to be promising as a
future research area.

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CHAPTER 12: DECISION SUPPORT SYSTEMS
12.1 Decision Support Systems
Introduction
A Decision Support System is used by Upper Management to make decisions for

the future of the company.
A DSS is a set of very special computer programs that are connected to all internal
networks but use mostly external Wide Area Networks, the information from which is
used to make corporate decisions.
A DSS uses mostly external data and is more hardware complex than the other
forms of MIS.
At the operational level of a business, decisions are often required to be taken by

relatively junior staff but with the minimum of delay. Decision Support Systems are
programmes, which allow staff to input a relatively small amount of specific
information, which dependent upon whether or not that data falls inside acceptable
parameters, provides a decision. This avoids the need to 'refer upwards' in all but the
most exceptional circumstances.
A Decision Support Systems (DSS) is a computer-based information system that

provides a flexible tool for analysis and helps managers with nonroutine decision-
making tasks. Some features of DSS are:
♦ Input and output: Inputs consists of some summarized reports, some processed
transaction data, and other internal data. They also include data that is external
to that produced by the organization. The outputs are flexible, on-demand
reports with which a top manager can make decisions about unstructured problems.
♦ Mainly for top managers: A DSS is intended principally to assist top managers,
although it is now mainly used by other managers, too. Its purpose is to help

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them make strategic decisions - decisions about unstructured problems, often

unexpected and nonrecurring. These problems may involve the effect of events
and trends outside the organization.
♦ Produces analytic models: The key attribute of a DSS is that it uses models. A
model is a mathematical representation of a real system. The model allows the
manager to do a simulation-play a "what-if' game - to reach decisions.
The four capabilities of all DSS are:
♦ Representations: Conceptualization of information used in decision making,

such as graphs, charts, reports and symbols to control operations.
♦ Operations: Logical and mathematical manipulations of data.
♦ Memory aids: Databases, views of data, libraries and other capabilities to

update memory.
♦ Control Aids: Capabilities that allow the user to control the activities of the DSS.
Three basic components of a DSS:
♦ DSS database: a collection of current or historical data from a number of

applications or groups, organized for each access by a range of applications. The
DSS database is separated from active organizational data but contains data
extracted from corporate databases.
♦ Model base: a collection of mathematical and analytical models that can be

made easily accessible to the DSS user. Various kinds of models may be in the
model base, including libraries of statistical, optimization; sensitivity analysis
("what if”) and forecasting models.
♦ DSS software: permits easy interaction between users and the DSS database and
model base and delivers the end-user interface.

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A DSS assists management decision making by combining data, sophisticated

analytical models and user-friendly software into a single powerful system that can
support semi-structured or unstructured decision making. These systems help end users
utilize data and models to discuss and decide semi-structured and unstructured problems,
but they do not solve the problems for the user.
Unstructured problems are novel, non-routine and have no predefined algorithms or

solutions. DSS combine data with models to produce various alternative scenarios that
can be used for making choices. In large organizations decision making is inherently a
group process, and DSS can be designed to facilitate group decision making.
DSS generally use smaller amounts of data than MIS, and do not need on-line
transaction data. DSS have a smaller number of important users, and tend to employ
more sophisticated analytic models than MIS. DSS are customized to specific users and
so require even more user participation than building MIS. Moreover, DSS are
continually evolving and changing, so they must use a flexible, iterative method of
development, usually prototyping.
Successful management depends on one's ability to make good decisions. Good

decision making relies on the availability of information. The Decision Support System
(DSS) can provide that information.
Today DSS uses operational files from Purdue's human resources and financial
information systems to create DSS tables. Business offices and academic units need, this
information to manage their operations. DSS allows access to an Oracle server containing
the administrative database. Query tools such as BRIO 3.5 and other software that
support Open Database Connection (ODBC) such as Microsoft Excel 5.0 are used to
retrieve the data. Information can then be processed in customized and ad-hoc reports,
graphics and tables for management decision-making.
Decision support systems help the decision making process by providing structured
sets of spatial information. Anything from a photograph to a map can be used to support

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decision making and in developing a decision support system, experts are consulted to
ensure accuracy and understanding of the information being used.
A decision support systems is based on the requirements for making a specific range
of decisions and may be quite unsuited to a purpose other than that for which is has been
structured. When placed in context with environmental management and geographic
information systems, these tools may be described as highly specialised computer-based
systems which use expert knowledge and have a specific range of uses.
Geographic information systems may be used as decision support systems but not
necessarily vice versa. That is, we clan form late decision support systems from various
sources of spatial information using a geographic information overlay system which may
have no use other than for the range of questions it was designed to help answer. Of
course a decision support system may, have some dynamic modelling capabilities not
available in a geographic information system, particularly where non-spatial data sources
need to be incorporated in a model.
Challenge of Decision Support System
The challenge/purpose of DSS is to help people avoid mistakes in the various

different phases of decision making. The primary mistakes are:
1. Intelligence: Missing Important problems or pieces of information
2. Decision design:
♦ Focusing on the wrong decision
♦ Identify the wrong set of alternatives
♦ Not correctly identifying the outcome of the alternatives
3. Choice:
♦ Misapplying the criteria

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♦ Using incomplete criteria (Mismatch between criteria and goals)
4. Implementation: Many (A whole, very different problem)
Decision Support Systems and Executive Support Systems focus on supporting the
fast 3 phases.
Components of a DSS
1. Data (Usually drawn from the organizations databases)
2. Models: A collection of models that can be used to determine the outcome of

various alternatives
3. Sensitivity analysis features - How do the results change if the values change (not
if the model changes)
4. DSS User Interface & Integration Software: The part of the system that lets the
users user the data in the model
Uses of DSS
They started off aimed as helping senior executives, but they have ended up being
used extensively by middle managers and other professionals (e.g. engineers).
[This is because the types of decisions faced by the two groups differ in terms of
their frequency, the kind of information that is needed, the amount of structure in the
problems]
General examples
Pricing decisions, route planning, budget planning, production planning, inventory

planning, site selection

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Specific examples
• MRP - Manufacturing Resources Planning systems (and the DSS that go

with them) Problem is this:
• Orders -> (Some regular, some not regular)
• Production facilities (How things are produced is different for

different orders)
• Materials -> (Can take time to get there, buy lots - but not too
much, inventory costs money)
It is often hard to answer questions like:
Can you ship 10 batches of product X by next week?
How long will it take to produce a batch of Y?
Requires a complete model of the production process - DSS can help by providing
this model and detailed information about the current status.
• Police Crime map - An Intelligence System
Geographic information systems - Providing a useful representation of large data

sets (Useful for site planning, ATM placements, etc)
• Egyptian cabinet
• Complex decision
• Many alternatives
• Relatively unique decision
In this case the value of the system was probably the process of building it. To
build a DSS that was acceptable they needed to consider in detail the situation - quite
possible more detail and with more consistency than they otherwise would have.

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12.2 Group Decision Support System (GDSS)
Introduction
People meet to create better, more efficient and stronger organizations in

Innovation Suites designed and built by Group Decision Support Systems. With an
ideal mix of technology and personal environment, furniture and open space, the
Innovation Suites foster learning, decision making and the formation of corporate visions.
These designs have been used by a variety of clients in a number of applications,

including strategic planning, procurement evaluation, business process innovation, and
large scale change management. The design principles are simplicity, productivity, and
an appropriate level of balance between technology and human interaction.
A group decision support system (GDSS) enables teams of co-workers to use

networks of microcomputers to share information and cooperate on projects. A GDSS is
also called workgroup computing.
In a GDSS environment, there is usually a big room with something like 40 seats,
which means that 40 people can be at the meeting at any one time. There are not only
40 seats but also 40 microcomputers. This enables every participant to have the use of
one microcomputer during the course of the meeting. The reason why each participant
needs a microcomputer depends on how GDSS works.
In the GDSS, with special computer software, the facilitator of each meeting will
first make the agenda of the meeting, which will be projected onto a big screen that
everyone can see. Then the participants will type simultaneously in their ideas of the
topic of discussion on the individual microcomputers next to them. Then the computer
will sort the ideas, and then the participants will then vote or comment on which ideas
they like or they dislike. In the course of the whole meeting, GDSS stores, categorizes
and prints out all the ideas, comments and vote tallies, so that each of the meeting
participants will get a summary of the meeting when it ends.

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What so special about GDSS is that it enables meeting participants to

simultaneously "talk", when the computer sorts and sends ideas to each of the terminal,
all at the same time. That saves a tremendous amount of time, because all these are done
electronically instead of manually, and the time saved will enable participants to spend
more time manipulating and expressing their ideas. This can consequently increase the
productivity and efficiency of the group. The time-consuming benefit also has an added
bonus: when productivity and efficiency in meetings increase, it is likely that the team
spirit can be consolidated, resulting in an increase of the strength of binding among team
members.
Besides, under this GDSS, no one can dominate the meeting. This is because of
another feature of GDSS. GDSS provides an anonymous scheme, so that whatever you
type in the terminal (i.e. your opinion) will be protected. Under this circumstance, no one
really knows who is typing what. Because of this, not a single person can dominate the
meetings. In the worst case, we might say "some ideas" are dominating the meeting, but
this is perfectly fine because this is as a matter of fact an aim of the GDSS: to help
meeting participants voice their opinions from an idea-oriented mindset. For example,
simply because you have a prejudice against person A does not mean that you are going
to reject the idea being proposed in the meeting, because you do not know who is
proposing that idea!!
Besides, this anonymity scheme will also help those team members who are shy to
voice opinions. And with the anonymity, people are likely to be more honest, just as
you'll say more, and more honestly on the professor's evaluation form if you know
whatever you write will not affect your final grade on the course. This, of course„ is
because you know you don't have to worry about the consequences.
However, whether this anonymity is good or not can be very controversial. The
success of meetings supported by GDSS depend largely on the conduct of the
participants. If people are taking advantage of the anonymity system by typing obscene
words or foul languages, this system may be banned for the good of the organization.

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The three underlying problems in group decision making that led to the
development of GDSS are:
♦ The explosion of the number of decision-maker meetings (managers spending

35 to 70 percent of their time in meetings).
♦ The growing length of decision-maker meetings.
♦ The increased number of attendees at these meetings--optimal size of traditional

meetings is only three to five participants.
Three elements of a GDSS:
♦ Hardware: including the conference facility itself, the room, tables, chairs, the
layout of the facility, electronic hardware, audiovisual equipment and computer
hardware;
♦ Software tools: including tools for organizing ideas, gathering information, and
ranking and prioritizing;
♦ People: including participants, a trained facilitator and hardware and software

support staff.
GDSS software tools:
♦ Electronic questionnaires: aid the organizers in pre-meeting planning by

identifying issues of concern and by helping to insure that key planning
information is not overlooked.
♦ Electronic brainstorming tools: allow individuals contribute ideas on the topics

of the meeting.
♦ Idea organizers: facilitate the organized integration brainstorming.
♦ Questionnaire tools: support the facilitators and group leaders as they gather
information before and during the prioritization process.

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♦ Voting or prioritizing tools: make available a range of methods of prioritizing

and decision making, from simple voting, to ranking in order, to a range of
weighted prioritizing and voting techniques.
♦ Stakeholder identification and analysis tools: use structured approaches to

evaluate the impact of an emerging proposal upon the organization, and to
identify stakeholders and evaluate the potential impact of those stakeholders
upon the proposed project.
♦ Policy formation tools: provide structured support for developing agreement on

the wording of policy statements.
♦ Group dictionaries: document group agreement on definitions of words and.

terms central to the project.
♦ Additional tools might include: group outlining and writing tools, software that
stores and reads project files and software that allows the attendees to view
internal operational data stored by the organization's production computer
systems.
The Commander
Figure 12.1
The Commander (refer to figure 12.1) If the corporate boardroom is both a

showcase for beauty and the "heart" of an organization's decision making process, then
the Commander Innovation Suite is the ideal platform. Originally designed for the
Department of Defense's Air Staff Innovation Center, the Commander is built with the

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highest quality materials and exceptional attention to detail. For your organization, the
Commander's classic "c" shape provides executives with a unique sense of team, while
the 40" of elbow room will deliver ample personal space and comfort.
The Executive
Figure 12.2
As the signature table of the IS line, the Executive is a high quality platform that
serves both as an exquisite center-piece and a powerful collaborative tool(refer to figure
12.2). Utilized by Learning Organizations across the country, including GDSS, the
Executive addresses the demands of an organization that needs to unleash the creativity
and innovation of its employees while maintaining an atmosphere of elegance.
The Diplomat
Figure 12.3
Simplicity often produces the greatest results. The Diplomat was forged from this
ideology. This table incorporates the basics of group collaboration into a simple, elegant
design that is perfect for teams' ongoing process work. (Refer to figure 12.3) Available
with or without the incorporation of collaborative technology, the Diplomat's compact

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design is ideal for small conference rooms or break out areas. As a stand alone table, or
as a compliment to a larger Innovation Suite, the Diplomat will provide your organization
with a tool that empowers teams to produce quality results in less time.
The Two Top
Figure 12.4
The Two-Top design was born out of a demand for a flexible collaborative tool that
could meet a variety of needs in a taxing environment (refer to figure 12.4). Built with
the same attention to detail and quality as the full size Innovation Suites, the Two-Top
table takes advantage of sliding-covered laptop computers, self-contained networking
hardware, and unique "daisy-chaining" capabilities to produce a multitude of
configurations. This configurable platform increases the flexibility of boardroom
environments, serving as a traditional conference table, a roll-around work station, or a
powerful collaborative tool.
Advantages and Disadvantages of GDSS
Advantages
Group Decision Support Systems give groups several advantages over many
traditional, non-automated group meetings (Nunamaker, et al., 1991):
• More participation
Because a GDSS allows anonymity, group members may be encouraged to

participate because they do not feel as vulnerable to group censure for asking what may
be perceived as "foolish" questions or making unpopular comments. Similarly, the

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participants will not be as subject to group think or conformance pressure (the reluctance
to criticize the comments of others due to politeness or fear of reprisals). In addition, each
group member will have more "air time" or time to contribute ideas. In non-automated
meetings, people must listen to others speak and pausing to reflect can cost a turn at
comment or response; a GDSS allows everyone to "speak" in parallel. In a typical
meeting, group members have only few minutes to express their ideas rather than the
entire meeting time. In some non-automated meetings, a few group members may exert
undue influence or monopolize the group's time; a GDSS makes every participant equal,
eliminating member status incongruities. Finally, more information will be presented to
the group as more participate.
• Group synergy
Other group members will be able to use an idea in a manner that the originator did
not because participants have different information skills. Also, the group as a whole will
be able to catch errors in a comment better than the individual who proposed the idea.
Reading a comment often gives creative stimulus to others in the group. Also, groups
may be more likely to consider an idea as the group's idea rather than an individual's
because ideas have been merged together.
• Automated record keeping
A GDSS can record all comments generated during the meeting, and consequently,
the group participants may not need to take notes. In a non-automated setting, group
members have to remember comments (rather than thinking of new ones) until they have
a chance to speak. Participants may also forget what has been said before. In vocal
meetings, some participants may not understand what was said or they may not be able to
process the information quickly enough. This automated log of the discussion supports
the development of an organizational memory from meeting to meeting.
• More structure
A GDSS also provides a certain amount of structure to the meeting. With this
structure in place, it is more difficult to deviate from the problem-solving cycle and make

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incomplete or premature decisions. The group has a more concentrated discussion, and
they stay focused on the issues throughout the meeting. Lower levels of non-task
interactions (gossiping, for example) in such groups have been observed as compared
with traditional meetings.
• Other benefits
As a result of more participation, group synergy, record keeping, and structure,

many groups have been able to accomplish more in significantly less time necessary for
traditional, non-automated meetings. Also, these factors have contributed to higher group
satisfaction with the meeting process. Finally, the new technology has enabled larger
groups to meet, resulting in more information, knowledge, and skills that are brought to
bear to the task at hand.
• Disadvantages
There are some disadvantages to the technology, however, and they include:
• Slow Communication
Most people speak much faster than they type, and thus would usually prefer a
verbal environment (other things being equal). However, a GDSS allows participants to
review recorded comments (people may read and scan faster than they can hear and
process). Other advantages, including anonymity and parallel communication, may
override the slow typing speed. The breakeven point, where it is more efficient to type in
parallel rather than speak and listen in sequence, occurs at a group size of approximately
eight members (depending upon typing speed).
• Not all Tasks are Amenable to GDSSs
Group meetings, which involve "one-to-many" communication (for example, a

leader lecturing to the group) would not benefit from a GDSS. Only those tasks, which
require group members to exchange ideas or preferences efficiently ("many-to-many")
would benefit.
• Conclusion
A Group Decision Support System (GDSS) presents an efficient and effective

method for large groups to conduct meetings in which comments or preferences must be
exchanged.

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Chapter 13: expert systems
13.1 Introduction
Expert systems are computer programs designed to review a set of facts (market
conditions) and apply a set of rules (knowledge base) to arrive at the same conclusion
that a team of experts would make if presented with the same set of facts. There are two
primary components to an expert system: knowledge base, and inference engine.
An expert system begins by capturing human expertise in the form of IF/THEN

rules. For example, the rule "IF the traffic light is red THEN step on the brake," captures
one small aspect of driving expertise. Often dozens (or hundreds) of such rules are
required to arrive at solutions to complicated, financial market problems.
The next step in the process involves applying the rules against a set of facts to
determine which rules apply. Embedded within the expert system is an inference engine,
which determines when and how to apply the rules. The unique order in which the rules
are applied to a given set of facts allows the expert system to be dynamic. As one might
expect given the features and capacity of these technologies, the number of potential
good solutions to a problem can be vast. The inference engine helps to quantify the
solution sets to provide our portfolio managers with consistent, unbiased, unemotional
problem analysis.
Recently, expert systems based decision models have been applied to various areas
within the auditing domain (McCarthy et al. [1992]). These models function adequately
when compared to human judgements. However, expert systems based techniques may
not be the only approach to decision problems within the auditing domain. Another
approach that is often available consists of conventionally coded decision support
computer models. It may be the case that these techniques provide a more efficient and at
least equally effective means of addressing problems within the auditing domain.
Decision support systems may have a potential for greater efficiency when applied
to some audit decision problems. This paper assesses whether decision support systems

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are a match for the effectiveness of expert systems when applied to one particular audit
decision problem, namely, the assessment of inherent and control risk in the purchases
transaction cycle and the revision of the hours allocated to an audit program based on
those assessments. Two computer models were constructed, one based on an expert
systems shell (Clips Version 4.2, developed by the NASA Space Labs), and the other a
decision support model constructed using a conventional compiler (Microsoft QuickBasic
Version 4.5). Both models used the same data set as the basis of their knowledge base. This
data set was derived from a case study questionnaire administered to a sample of 80 auditors.
The objective of constructing these two models was to compare the output they
generated to determine if they were comparably effective. This comparison is primarily
concerned with the consistency of the output, but it also addresses other factors such as
the format in which the output is presented and the degree to which the computer models
were accessible to the user.
Before identifying the data used by decision makers and the significance they attach
to them, it is necessary to develop a framework within which to ft these data items. The
audit risk model provides a decision framework that is prescribed for use by auditors for
audit planning decisions. The way that auditor's risk assessments impact on audit
planning provides a readily accessible field for the development of computer models. The
application of the audit risk model by practicing auditors has attracted considerable
research attention (Peters, Lewis and Dhar [1989]) Mock and Wright [1990] examined
the link between audit planning judgement and observed levels of inherent and control
risk. They argued that risk assessments have a stronger impact on the extent of audit
work carried out than on the nature of work carried out and that risk assessments may
be subject to change over time. The models examined in this paper use a fixed set of
audit procedures; the models adjust the hours allocated for performing those
procedures, not the list of procedures.
13.2 Expert System Architecture
The user interacts with the system through a user interface, which may use menus,
natural language or any other style of interaction). Then an inference engine is used to

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reason with both the expert knowledge (extracted from our friendly expert) and data
specific to the particular problem being solved. The expert knowledge will typically be
in the form of a set of IF-THEN rules. The case specific data includes both data
provided by the user and partial conclusions (along with certainty measures) based on
this data. In a simple forward chaining rule-based system the case specific data will be
the elements in working memory.
Almost all expert systems also have an explanation subsystem, which allows the
program to explain its reasoning to the user. Some systems also have a knowledge base
editor which help the expert or knowledge engineer to easily update and check the
knowledge base.
One important feature of expert systems is the way they (usually) separate domain
specific knowledge from more general purpose reasoning and representation
techniques. The general purpose bit (in the dotted box in the figure) is referred to as an
expert system shell. As we see in the figure, the shell will provide the inference engine
(and knowledge representation scheme), a user interface, an explanation system and
sometimes a knowledge base editor. Given a new kind of problem to solve (say, car
design), we can usually find a shell that provides the right sort of support for that
problem, so all we need to do is provide the expert knowledge. There are numerous
commercial expert system shells, each one appropriate for a slightly different range of
problems. (Expert systems work in industry includes both writing expert system shells
and writing expert systems using shells.) Using shells to write expert systems generally
greatly reduces the cost and time of development (compared with writing the expert
system from scratch).
13.3 Components of an Expert Systems
Expert systems operate in a fundamentally different manner from conventional

"procedural" programs. That is, rather than run through a set of commands in the same
way every time, an ES uses "declarative" knowledge and an inference engine to drive
the reasoning process. The basic components of an expert system are described below
in figure 13.1:

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Figure 13.1
• knowledge base: knowledge from "domain experts" typically represented as IF-

THEN rules,
• user interface: provides a means for the non-expert to interact with the
knowledge contained in the knowledge base,
• inference engine: the core of the expert system--determines how the rules in the
knowledge base are processed,
• working memory: an area of memory containing (a) observed facts, and (b) new
facts deduced from observed facts.
13.4 An overview of deductive inference
Expert systems work by making deductive inferences. The main advantage of

deductive inference is that it allows specific facts to be derived from general information
(inductive inference, on the other hand, uses specific facts to generate general
hypotheses) To illustrate the basic concepts of deductive inference, consider the well-
known syllogism:

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All men are mortal (general information)
Socrates is a man (observation)
Socrates is mortal (specific information)
From an ES point of view, the syllogism consists of three parts:
1. an observed fact: Socrates is a man
2. a rule: All men are mortal
3. a new fact deduced from the observed fact and the rule: Socrates is mortal
The only difference between this syllogism and the inference mechanism of an
expert system is that in expert systems, the rules are represented differently. Specifically,
expert systems cannot operate on universal quantifiers such as "all" and thus variables
have to be used instead. For example, the rule.
All men are mortal would have to be re-written as follows for inclusion in an ES
knowledge base:
RULE 1
IF x is a man
THEN x is mortal
This so-called "IF-THEN rule" has two parts: an antecedent (IF x is a man)
and a consequent (THEN x is mortal). A rule is said to fire whenever its antecedent is
satisfied. When a rule fires, its consequent is instantiated and added to working
memory. To illustrate this, consider the following "inference trace":
Step 0 working memory = observations: Socrates is a man
Step 1 RULE 1 is satisfied: IF x is a man THEN x is mortal
Socrates is a man
working memory = working memory + Socrates is mortal

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Note that there is nothing magic here. The expert system simply has the ability to
match patterns. For instance, it considers the antecedent of the rule and identifies the
following pattern: <variable name> is a man. Then it searches working memory for a
fact of the form <concrete object> is a man. Since a match is found, the variable x is
bound to the concrete object "Socrates" and the consequent Socrates is a man is
added to working memory. This new fact may be used to satisfy some other rule, and
thus the chain of inference continues.
13.5 Inference Strategies
The deductive process itself is relatively straightforward. However, there are two
fundamentally different approaches to deciding how to navigate the knowledge base:
forward chaining and backward chaining. In either case, the problem to be solved is
posed as a question, for instance: "Is Socrates mortal?"
In forward chaining, deduction is data driven. In other words, the goal is not
used to drive the inference process. Instead, the inference engine simply checks the
contents of working memory from time to time to see if the question has been answered.
The basic flow of the forward chaining process is shown below in figure 13.2.
Figure 13.2

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In backward chaining, deduction is goal driven. The inference starts with the
original question and seeks to answer it by matching it with the consequent of a rule. The
basic flow of the backward chaining process is shown below in figure 13.3
Put the original question on the back

burner and make the unresolved
variable the new question
Figure 13.3
There are two important features o± backward chaining. The first is that the goal (or
question to be answered) always drives the search strategy. The second is that the current
goal changes as new unresolved variables are encountered. The result is that the
backward chaining procedure is called recursively until the original question in answered
or a sub-goal cannot be resolved.

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13.6 The Problem with Expert Systems
The dependence people place on cases poses a problem to those who treat human
cognition as being primarily rule-based. Much work in artificial intelligence, for
example, is done in "expert systems." These systems are based on the notion that expert
knowledge consists of a collection of rules. By determining the rules an expert in a
domain uses, the idea goes, we may then simulate expert behavior in that domain. Not
surprisingly, expert systems have run into a significant problem: they are brittle. When
faced with a problem which bends the rules, they are unable to cope. They fail because
they are not grounded in cases. They are unable to fall back on the details of their
experience, find a similar case, and apply it. Likewise, they are unable to use similarities
between tough problems and previous experiences to update their rules. Their failure to
retain cases cripples their ability to learn from their experiences.
13.7 Choosing a Problem
Writing an expert system generally involves a great deal of time and money. To
avoid costly and embarrasing failures, people have developed a set of guidelines to
determine whether a problem is suitable for an expert system solution:
1. The need for a solution must justify the costs involved in development. There
must be a realistic assessment of the costs and benefits involved.
2. Human expertise is not available in all situations where it is needed. If the

"expert" knowledge is widely available it is unlikely that it will be worth developing an
expert system. However, in areas like oil exploration and medicine there may be rare
specialized knowledge which could be cheaply provided by an expert system, as and
when required, without having to fly in your friendly (but very highly paid) expert.
3. The problem may be solved using symbolic reasoning techniques. It shouldn't

require manual dexterity or physical skill.
4. The problem is well structured and does not require (much) common sense
knowledge. Common sense knowledge is notoriously hard to capture and represent. It

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turns out that highly technical fields are easier to deal with, and tend to involve relatively
small amounts of well formalised knowledge.
5. The problem cannot be easily solved using more traditional computing methods.
If there's a good algorithmic solution to a problem, you don't want to use an expert
system.
6. Cooperative and articulate experts exist. For an expert system project to be

successful it is essential that the experts are willing to help, and don't feel that their job is
threatened! You also need any management and potential users to be involved and have
positive attitudes to the whole thing.
7. The problem is of proper size and scope. Typically you need problems that
require highly specialized expertise, but would only take a human expert a short time to
solve (say an hour, max).
It should be clear that only a small range of problems are appropriate for expert
system technology. However, given a suitable problem, expert systems can bring
enormous benefits. Systems have been developed, for example, to help analyze samples
collected in oil exploration, and to help configure computer systems. Both these systems
are (or were) in active use, saving large amounts of money.
13.8 Rules and Expert Systems
Rule-based systems can be either goal driven using backward chaining to test
whether some hypothesis is true, or data driven, using forward chaining to draw new
conclusions from existing data. Expert systems may use either or both strategies, but the
most common is probably the goal driven/backward chaining strategy. One reason for
this is that normally an expert system will have to collect information about the problem
from the user by asking them questions - by using a goal driven strategy we can just ask
questions that are relevant to a hypothesized solution.
Anyway, in a simple goal-driven rule-based expert system there are often a set of
possible solutions to the problem - maybe these are a set of illnesses that the patient

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might have. The expert system will consider each hypothesized solution (e.g., has_Cold
(fred)) and try to prove whether or not it might be the case. Sometimes it won't be able to
prove or disprove something from the data initially supplied by the user, so it will ask the
user some questions (e.g., "have you got a headache?"). Using any initial data plus
answers to these questions it should be able to conclude which of the possible
solutions to the problem is the right one.
The Distinction Between Expert Systems and Decision Support Systems
Expert systems, or knowledge based modelling, represent an application of the

artificial intelligence field of research. The objective of this field is to imitate human
mental activity. While computers can more than match human capabilities in activities
that do not actually require "intelligence" or reasoning ability, they are not a clear
match where reasoning abilities are required. The artificial intelligence field can be
seen as an attempt to address this deficiency.
One difficulty faced by researchers in the artificial intelligence field is to

develop a suitable test, and its attendant definition, to identify what constitutes
intelligence. Such a test is provided by the Turing Test (Turing [1950]). The test is
based on an operational definition where a device is accepted as possessing artificial
intelligence provided it performs as a reasoning human would when presented with
the same problem. The test is administered as a simple question and answer process.
The device to be tested and a human volunteer are both interviewed by an examiner in
an attempt to identify which is the artificial device. If the examiner is unable to do this
after a series of tests the device is deemed to have passed the test.
The essential point of this test is that it places no restriction on what techniques
are used to attain a successful result. Thus, if we accept this test, and its implications,
artificial intelligence need not be the same form of intelligence, or function in the
same way as human intelligence, so long as they provide results that are comparable
with those produced by a human expert analysing the same problem. An extension of
this position is to say that expert systems based models, and procedural models may

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both be equally valid if they produce comparable results without necessarily

duplicating each other's analytical techniques.
The central component of an expert system is the inference engine. This is

software that combines the contents of the system's knowledge base with case specific
input obtained from the user in order to perform the problem solving tasks for which
the system was developed.
The knowledge base is composed of domain specific knowledge pertaining to the

chosen problem domain. An essential characteristic of expert systems is to have a
specifically, and often narrowly, defined problem domain. A detailed and specific
knowledge base is the true source of the problem solving power of an expert system
[Waterman 1986]. The manner in which the knowledge base is used will be
determined by the system's meta-knowledge. Meta-knowledge can be seen as a set of
rules governing how the knowledge base itself is applied. Meta-knowledge determines
what case specific knowledge is obtained from the user and what knowledge from the
knowledge base is incorporated in the problem solving process.
Meta-knowledge and knowledge complement one another. In the absence of

meta-knowledge, knowledge cannot be applied. However, the extent to which we rely
on meta-knowledge may also offset the extent to which we need to rely on the
knowledge base. An advanced expert systems shell may facilitate the construction of
expert systems based models that embody a high degree of meta-knowledge. Such a
model will be able to solve problems while making a relatively "economical" use of
the systems knowledge base. It will be able to limit its use of the knowledge base to
those pieces of knowledge that are most pertinent to the problem being addressed. A
model with a less advanced meta knowledge structure may produce the same
conclusion, but it would be less discriminating in its usage of the knowledge base.
A procedural coded computer model can approach this type of structure. Such a
model can access a knowledge base composed of heuristic, or numerically based
rules. The programme code, which determines how that knowledge base is accessed
and applied' can act in the role of meta-knowledge. However, conventional programming

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languages are not adapted specifically for the construction of meta-knowledge structures
while expert systems shells are. For this reason, the scenario outlined above may tend to
arise. While it is possible that procedural and expert systems based models may reach
comparable conclusions, the procedural model may utilise a considerably larger portion
of the knowledge base than is strictly necessary to do so.
This need not be a significant shortcoming. The actual cost of performing analyses
on an ongoing basis, using what may be a less efficient model, is relatively small when
compared to the potential cost of developing a more efficient model that involves much
more advanced developmental techniques.
Abdolmohammadi [1987] draws a distinction between expert systems, which seek

data in order to make a judgement or diagnosis, and decision support systems, which
perform analyses that assist in making a decision. Expert systems can be constructed out
of heuristic decision rules obtained from experts in the problem domain. The rules, while
relevant to the problem domain, will not all be relevant to each problem within the
domain. The expert system operates by selecting those rules that are relevant (and thus
the information that it should seek from the user) according to the problem outlined to it
by the user's responses. This flexible approach inherent in expert systems, which enables
them to selectively apply their knowledge base to a problem, renders them particularly
suitable for application to unstructured tasks.
Since a procedural model embodies a less advanced meta-knowledge structure, its

inherently less flexible approach must make a higher level of assumptions about the form
of the problem that is to be solved. Such a model applies an algorithm, which aims to
produce an optimal solution to that particular problem, and only to that particular
problem. To the extent that real world problems diverge from the assumptions of the
system's developers, so the solution may be less than optimal (although in practice users
of the system often may not recognise this). The more advanced meta-knowledge
structure of expert systems models has the potential to reduce the level of assumptions
that are made about the problem under analysis. It is our contention that the auditing

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problem we examine here is sufficiently structured to enable it to be addressed by the less

flexible meta-knowledge structure of a procedural based model.
If problems exist which are capable of being addressed adequately by procedural

techniques, as well as by expert systems, procedural techniques have the potential to offer
a solution that is developmentally less complex and therefore a more efficient approach
to the problem.
Waterman (1986) presents three sets of criteria for identifying those situations in
which the development of expert systems is appropriate. These are summarised below.
13.9 Criteria for Expert Systems development
Necessary requirements for expert systems development:
♦ Task does not require common sense.
♦ Task requires only cognitive skills.
♦ Experts can articulate their methods.
♦ Genuine experts exist
♦ Experts agree on solutions.
♦ Task is not too difficult.
♦ Task is poorly understood.
Justification for expert systems development:
♦ Task solution has a high payoff.
♦ Human expertise being lost.
♦ Human expertise scarce.
♦ Expertise needed in many locations.

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♦ Expertise needed in a hostile environment.
Characteristics that make the use of expert systems appropriate:
♦ Task requires symbol manipulation.
♦ Task requires heuristic solutions
♦ Task is not too easy.
♦ Task has practical value.
♦ Task is of manageable size.
The first of these, described as "necessary conditions" for the development of

expert systems, acre presumably met by many problems within the auditing domain
since satisfactory auditing based expert systems have been developed. Since this first
set of criteria is presented as a set of necessary conditions that must exist before
expert systems development can take place, the author presumably intends that these
criteria must be met.
Similarly, it would appear that Waterman's third class of criteria, the appropriacy
of expert systems, must be met completely. In the absence of these criteria, the
development of expert systems will be possible, however, the violation of these
conditions would present a situation where the development of an expert system
would not be justified, since the problem concerned could clearly be addressed by
simpler modelling techniques, or was not worthy of modelling at all. Once again, it
must be assumed that the presence of pre-existing systems denotes that problems from
within the auditing domain meet these criteria.
On the other hand, Waterman's second category, which seeks to codify those
situations where the use of expert systems is justified, as opposed to possible, would
not appear to need to be met completely in each case. Satisfaction of any one of these
criteria would appear to provide a justification for the use of expert systems to address
that particular problem, provided no simpler technique were available. It seems that at

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least two of these criteria, being the (relative) scarcity of human experts, and high
solution payoffs, are met by problems from within the auditing domain.
A further condition should be added to Waterman's second category,

"Justification for Expert Systems Development". That condition is that expert systems
should provide the most efficient technique available to address the problem being
examined. Further, we suggest that this would not be the case where the decision
problem is sufficiently structured that a simpler degree of meta-knowledge, as
embodied in procedural code is sufficient to address it, and that it will not be the case
where a problem in the real world is capable of being characterized by an extensive
set of starting assumptions.
A further condition should be added to Waterman's second category,

"Justification for Expert Systems Development". That condition is that expert systems
should provide the most efficient technique available to address the problem being
examined. Further, we suggest that this would not be the case where the decision
problem is sufficiently structured that a simpler degree of meta-knowledge, as
embodied in procedural code is sufficient to address it, and that it will not be the case
where a problem in the real world is capable of being characterized by an extensive
set of starting assumptions.

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CHAPTER 14: DISTRIBUTED INFORMATION SYSTEMS
14.1 Introduction
The litikage of minicomputers in each District (State) office and the Bureau
mainframe computer foTrns the, basis for a Distributed Information System (Posson, 1985).
The Distributed Information System (DIS) provides a high level of local computing
and data-processing capability. Computerized files are transferred between sites
(nodes) within the network and work is done at distant locations. The DIS provides
interactive and batch processing in support of Water Resources Divisions's State and
National water data files, and provides for the diverse computational needs of the
Division. These needs include data management, hydrologic modeling and statistics,
and administrative programs.
The DIS computers are connected to each other via a TCP/IP (Transmission
Control Protocol/Internet Protocol) over an ethernet Local Area Network (LAN). The
LANs are connected together using a frame-relay Wide Area Network (WAN) called
DOINET. The WAN uses Stratacom switches and Cisco routers for the network
service backbone.
As organizations and users increasingly rely upon networked applications for

accessing information and making critical business decisions, securing distributed
applications is becoming extremely significant. With the phenomenal growth in
networks such as the Internet, information acid security issues are becoming the focus
of intense concern on the part of users and businesses.
14.2 Automated Data Processing System
The Automated Data Processing System (ADAPS) consists of a collection of

computer programs (software) and data files that form a system of standardized water
data processing procedures. In each District, there is a designated administrator or
manager who is responsible for installation and maintenance of system programs and

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hydrologic data files. In addition, the administrator performs other tasks that are
necessary for efficient operation of the system.
Most of the data needed by ADAPS programs are supplied interactively:

However, some programs accept input from system files. Therefore, the programs
require the pathname (data set name) of the input file. Occasionally the user is
prompted to supply a pathname (either for input or output), but usually the name need
not be known. Most pathnames are stored within a program or in a file containing
pathnames, thereby relieving the user of having to keep track of the pathnames.
A security system is used in ADAPS to restrict access to the data files and to
limit the ability of some users to perform certain operations in the system. The
security system is a multilevel system. User classes of System Administrator (SYST),
Data Base Administrator (ADBA), User (USER), and Cooperator (COOP) have been
established. In addition, Ingres Access Control Lists' (Seybold, 1985, p. 3-1 to 3-28)
are used. Security measures are implemented by the local administrator or manager in
consultation with District supervisory personnel.
Water data stored in ADAPS, results from processing of data collected or

recorded at field installations operated by each District. Data collection and
processing is discussed in the ADAPS User's Manual. A vast majority of the field data
is recorded in digital form on punched paper tapes or recorded by a data collection
platform (DCP) and sent to the computer via satellite telemetry. The telemetry input
subsystem is discussed later in this manual. The field data is processed by District
personnel following established procedures. The data are reviewed for validity and
correctness, and subsequently are published in State basic data reports.
14.3 Programs
The programs (software) for ADAPS are developed by personnel of the Water
Resources Division. The master copy resides at Headquarters in Reston Virginia, and is
electronically transferred over the network or distributed by magnetic tape from
Headquarters to each of the District offices. These offices are located nationwide and

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include Alaska, Hawaii, Guam, and Puerto Rico. Some Districts have more than one
office, and a copy of the software is located at the subdistrict offices, if they have a
minicomputer.
Most ADAPS programs are written using the Fortran77 programming language, and
several different categories of software make up the water data-processing system. The
major categories are:
• System utility programs.
• General-purpose programs.
• Command Procedure Language (CPL) programs.
• General application programs.
• General graphics programs.
• Vendor-supplied programs (subroutines).
The programs m each of the above categories is used for a specific function or
purpose. For example, the utility programs are used to initialize, create, update, and
maintain the numerous s u p p o r t , processing, and data (time-series) files that make up
the District data bank. The general-purpose programs are used to process many different
types of water data along with the subsidiary calculations and computations that go into
computing and producing a water data record. Most programs use insert and common
blocks to share and communicate data between programs, to provide software flexibility,
and to ease software maintenance. The operating system software is called
UNIX(Seybold, 1985, p. 1-2). The Command Procedure Language (CPL) is a PRIMOS
command level language that provides a programming capability (Landy, 1982).
Operating system commands or directives are passed to PRIMOS for execution after they
are stored in a CPL file (suffix .CPL). The application programs are used primarily to
compute statistical information about the hydrologic data. The graphics programs are
used for preliminary viewing of the data, for comparison purposes, and for report

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purposes. The system contains both user-written and vendor-supplied programs such as
DISSPLA (Integrated Software Systems Corporation, 1984).
The Automated Data Processing System (ADAPS) programs are used to compute
water-data records on an electronic computer. The machine operations generally parallel
the manual operations. The sequence of processing the data is well established; however,
the particulars of each step by electronic means may change in response to continued
improvement in storage and access procedures, new or expanded needs, and search for
additional efficiencies. The general functions of the programs are to provide input and
output to and from the computer in a logical sequence; this sequence includes the
computational steps necessary to efficiently compute water data records. Once the
records are computed, they must be saved and archived for general use. Therefore,
programs argil available to provide for a broad scope of functionality including
initialization, maintenance, security, backup, recovery, restart, and other overall data-
processing requirements.
14.4 Fibs
The ADAPS files are the repositories that contain the information and data
necessary to use ADAPS for computing and processing water data records as previously
mentioned. The files consist of program source code and associated executable code,
CPL files, and operation files.
Some of these operational files are shared by the various NWIS systems and some
are specific to ADAPS. The shared and ADAPS-specific files are briefly described in
Section 3 of this manual.
Most files used and/or maintained by ADAPS are structured as MIDAS files and
managed by a utility and user-written software. The MIDAS files allow records to be
retrieved rapidly and efficiently on the basis of selected data elements defined as key
indexes (elements). MIDASPLUS utilities, user-written programs, and scripts are used to
create the file templates, create input files, and subsequently populate the files. Other
utilities are used to dump the files, delete files, cleanup files, and monitor files.

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Some information regarding the file creation was provided in informal instructions
(Trapanese, S.M., U.S. Geological Survey, written common., 1987) to install ADAPS on
the local minicomputer and to convert existing minicomputer and mainframe data files
for use in ADAPS. Additional information concerning initialization (creation) of files is
presented later in this manual. ADAPS menu (program) options are selected to perform
the various functions necessary to create new MIDASPLUS files.
Information is also presented later in the manual to perform incremental backups of

the unit-values data files, and to restore the unit-values files using the incremental
backups.
14.5 Need for File Maintenance
In virtually every data-processing system, the possibility exists that errors may
occur that accidently alter or destroy data stored on disks in data files. This may occur
because of unexpected hardware failures, natural disasters such as power outages, etc., or
through improper processing of the data.
It is essential, therefore, to provide a means to ensure that any lost data can be
recovered. The most common method used is backup files. A backup file is merely a
copy of a file stored on magnetic tape or disk. If the file is destroyed or becomes
unusable, the backup can be used to recreate or restore the file. In transaction-oriented
(online) systems, backups are critical because updates to a file can occur at any time.
Therefore, the system should provide for creating backups on a regular basis (sometimes
every hour or day) and saving the transactions that occur to the file after the backup file is
made (incremental backups). If the file is lost, it can be re-created from the backup file
and then the transactions which have been saved can be processed against the file to bring
it back to the status it was before it was lost.
Another aspect in a transaction-oriented system is the ability to restart the system if

it goes down. For example, if a transaction (update or modification) has been sent and has
partially updated a file when power is lost, it is necessary to both restore the file and let
the user know that the transaction was not processed. This problem may be solved by

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using the backup files and messages sent to terminals asking the users to re-send those
transactions not processed.
14.6 TalkMine: Knowledge Mining in Distributed Information Systems
TalkMine, an algorithm developed as a model of human cognitive categorization,

improves human-human and human-machine interaction by establishing a powerful tool
for collaborative knowledge organization in large distributed information systems (DIS).
The adaptive nature of TalkMine entails an open-ended human-machine symbiosis, which
can be used in the automatic, adaptive, organization of knowledge in DIS such as the
Internet, facilitating the rapid dissemination of relevant information, the discovery of new
knowledge, as well as the ability to identify fraudulent behavior in DIS. TalkMine is
based on several theories of uncertainty and belief, as well as connectionist ideas.
Even though knowledge is ultimately grounded in the brains of the users of DIS,
we can devise mechanisms that infer how tokens of knowledge in DIS relate to one
another, from the way these tokens are used by a community of users. Tokens of
knowledge are all the different types of information stored in the nodes of a network, e.g.
text files, databases, links between documents, etc. The meaning of these tokens is
ultimately established by the users of DIS, both individuals and societies. Whether
artificial information networks can ever produce autonomous creation of meaning is an
open question. What they can do exceptionally well, however, is to monitor how their
users manipulate and relate the tokens of knowledge stored. TalkMine does not pursue a
passive analysis of relationships of knowledge tokens, but rather an active categorization of
these tokens by changing the structure of a DIS to adapt it to the changing interests of its
users. We refer to this active organization of distributed information as knowledge mining.
The kind of knowledge management proposed with TalkMine will result in the
evolution of a "Second Generation Internet" or DIS. Theoretically, TalkMine is based on
the idea that there cannot be creation and open-ended evolution of new knowledge in
artificial systems until a fundamental coupling between structure and semantics is
established, that is, until some artificial embodiment is implemented. TalkMine empowers
DIS with such a coupling as a result of the continual feedback between the level of

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information utilization by users (semantics and pragmatics), and the relations and links
between tokens of knowledge in networks which define the structure of DIS. The ability
to gather and combine information from different neighborhoods (e.g different networked
databases or WWW sub-regions) of DIS as a result of the continual integration of user
(interactive) queries, is shown to provide this ability for open-ended construction of
knowledge categories.
In practice, the kind of automatic, adaptive, self-organization of knowledge

implemented by TalkMine dramatically changes the management of information in DIS
from a centralized to a distributed new vision. Instead of the current reliance on central
databases (in Intranets) and Search Engines (on the Internet), any portion of a DIS
managed by TalkMine is capable of pointing users to relevant information in its
neighborhood. In other words, the TalkMine managed DIS is itself a distributed database
or search-engine which is continually adapting to and learning from its users and their
patterns of information usage. Each node of the network learns to relate its information to
other nodes from repeated interaction with users. With this permanent feedback loop
between user and network, the structure of the DIS reflects the knowledge of its
community of users. DIS with TalkMine function both as collaborative information
networks and as ever-present, distributed, search engines.

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MANAGEMENT
INFORMATION
SYSTEMS
First Edition
Work Book
Copyright © Genetic Computer School, Singapore.
All rights reserved. No part of this publication may be reproduced, stored in a

retrieval system, or transmitted in any form or by any means, without the permission of
Genetic Computer School.
First Edition 2002
Genetic Computer School. 257 Selegie Road, #03-287B, Selegie Complex,

Singapore 188350.

Page190
Chapter 1
Question 1
a) Give an example of a professional job, and describe one or more information

systems that would provide each of the five types of benefits listed below:
i. Support for Strategic Planning
ii. Support for Management Control
iii. Support for Operation Control
iv. Improved Product Quality
v. Improved Product Delivery
List the five components of an information system and describe four roles
people play in information environment.
Question 2
What are the main reasons behind information management?
Question 3
What are the main characteristics of information?
Question 4
Explain in detail what is an information system. Give examples.
Question 5
a) Define CBIS. Explain why information has to be managed.

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b) Information is a valuable asset in most organisations. So managers have

to be clearly focused on what information is important to them and what in not.
Explain with proper example.
c) What are the steps to be taken by managers to kept proper way valuable
information for in most organisations?
d) Information is one of the most important in very sector, either commercial

or noncommercial. Explain how and which ways it will be provide to keep proper
information.
Question 6
Support for Strategic Planning Support for Management Control Support for
Operational Control Improved Product Quality Improved Product Delivery
What is the main purpose of computer-based information systems?

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Chapter 2
Question 1
Write short notes on the following:
a) Transaction processing
b) Decision support system
c) Office automation system
d) Management Information
e) Systems Exception Reporting
f) Data Warehouses
g) On-line Analytical Processing
Question 2
Describe the five categories into which the applications of Management

Information Systems fall.
Question 3
Describe the applications into which Management Information Systems fall.
Question 4
What is business network design? What are the four types of network redesign?
Question 5
What are the main uses of Transaction Processing Systems?

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Question 6
Explain how on-line analytical processing tools assist in maintaining data archives?
Question 7
a) Discuss the features of Transaction Processing Systems, which are important in

creating systems and solutions.
b) Explain the difference(s) in building Executive Support Systems and

Traditional Management Information Systems?

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Chapter 3
Question l
Distinguish between homogeneous and heterogeneous workgroups.
Question 2
Describe all the phases of the system development diagrams.
Question 3
Explain the terms
a) Analytical support
b) Communication support
c) Tracking and monitoring support in the context of personal information systems.
Question 4
What do you understand by the term organisation? Outline the three that
organisations share in common.
Question 5
Differentiate between personal and workgroup information systems.
Question 6
With the help of a diagram, illustrate the system development process.
Question 7
What is the system development life cycle? Briefly explain the different stages of
the development life cycle.

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Question 8
a) Alternative Quality Process
b) System
c) Functional Specification

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Chapter 4
Question 1
With respect to the evolution of IT applications, explain what do you

understand by the automation of work.
Question 2
What are the possible benefits arising from information management?

Illustrate your answer with examples.
Question 3
Define the term business transformation. What is its impact on the enterprise?
Question 4
Briefly describe the stages through which IT has evolved.
Question 5
What has been the impact of the emergence of Internet and virtual banking on
the financial industry?
Question 6
Explain why management thinking has failed to understand the implications

of the evolving role of IT in business system.
Question 7
Current management practice fails to adequately address the impact and

resource implications of four critical dimensions of complexity. Explain why.

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Question 8
a) Organisations have had to make changes in their provision of Information

Service to support End User Computing (EUC).
i. Describe one way in which support of EUC has changed the structure of an
organisation's information service provision.
ii. Briefly describe the general changes in the nature of work undertaken by
information services personnel that you would expect with the introduction
of EUC into an organisation.
b) A Data Centre may be centralized or de-centralized. Describe the issues

you would consider when deciding between a centralized Data Centre provision
and a decentralized Data Centre provision.

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Chapter 5
Question 1
Differentiate between the terms management and leadership. What are the main
functions of management?
Question 2
The main managerial roles consist of interpersonal, informational and decisional

roles respectively. Under each of the above categories of roles define the roles that a
manager plays thus explaining the function of each sub-role in turn.
Question 3
With the help of a diagram explain the managerial structure. Explain the role of
the manager at each level.
Question 4
How is the decision-making process handled at each managerial level.
Question 5
Different employees have different needs. The most effective managers know
this and have learned how to adapt their style based on the individual's needs. In this
respect, describe the following terms:
a) Surviving perspective
b) Learning perspective
c) Competing perspective
d) Relating perspective
e) Teaching perspective

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Question 6
a) What four common functions do all managers perform? Briefly describe them.
b) What are the similarities and differences between managers at different

organisational levels?
Question 7
a) Define the team of `data and information'. To having good information what
are the steps to be taken, list and explain briefly.
b) List and describe the Characteristics of good information.

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Chapter 6
Question 1
a) Knowledge representation
b) Artificial Intelligence
c) Knowledge Engineering
d) Knowledge Base
e) Expert Systems
Question 2
a) List and briefly describe the disciplines that constitute the subject of artificial
intelligence (AI).
b) List the three ways in which knowledge is represented in expert systems.
c) Do most expert systems in use today replicate the abilities of a human expert?
What do they do?
d) Explain the problems with the term artificial intelligence.
Question 3
What are the main components of human intelligence?
Question 4
Discuss whether Artificial Intelligence is possible.

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Question 5
Define the term meta knowledge and what is its importance in the field of
artificial intelligence.
Question 6
Knowledge must be represented efficiently, and in a meaningful way. Discuss

this statement.
Question 7
What are the components of expert reasoning?

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Chapter 7
Question 1
What does framework refer to?
Question 2
Describe the term strategic planning?
Question 3
What are the components of an IS strategy?
Question 4
What are the contents of the IS strategic plan?
Question 5
Write short notes on the following: -
a) Product differentiation
b) Competitive scope
c) Differentiation bases
Question 6
What does the term ‘hybrid manager' refer to?
Question 7
Describe the strategic planning process.
Question 8
Discuss how has the role of Information systems changed over the years?
Question 9
In Porter's view, the performance of individual corporations is determined by the
extent to which they cope with, and manipulate, the five key 'forces' which make up the
industry structure. What are those five key forces?
Question 10
Discuss how differentiation can help enterprises achieve above average
performance.

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Chapter 8
Question 1
What are the criteria required to enhance the effectiveness of workgroups?
Question 2
What are the main drawbacks of workflow market structure?
Question 3
What are the key functions that the workflow engine must support to completely
support application requirements?
Question 4
What are the advantages that Internet provides over the workflow computing
infrastructure?
Question 5
Explain how a workgroup is connected to horizontal and vertical organizations.
Give an example of a workgroup, one horizontal and one vertical organization
connected to that workgroup, and one information flow for each connection.
Question 6
What are the advantages of workgroup computing? Question 7
What are the main limitations of transaction-based workflow systems?
Question 8
Distinguish between transaction-based, collaborative and adhoc workflow systems?
Question 9
Explain with the aid of examples what is rapid application generation.
Question 10
Explain the concept of environmental independence with respect to workflow systems.

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Chapter 9
Question 1
How does a workgroup support system relate to a groupware?
Question 2
Distinguish between asynchronous groupware and realtime groupware. Illustrate

your answer with examples of each.
Question 3
What are the functions that groupware supports and the give some examples of
software that facilitate that support.
Question 4
Write short notes on the following: -
a) Group scheduling software
b) Electronic meeting software
c) Videoconferencing software
d) Whiteboard software
e) Workflow Automatic Software.
Illustrate your answers with examples.
Question 5
Explain the term groupware and why is it being widely used?
Question 6
What does the term CSCW (Computer-Supported Cooperative Work) refer to?

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Question 7
Why is user testing considered more difficult in groupware systems than in

multi-user systems?
Question 8
What are the applications of groupware?
Question 9
What are the main factors that need to be taken into consideration while
designing a groupware?

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Chapter 10
Question 1
Computation devices encode data using basically two types of codes: external and
internal code. Distinguish between these two types of codes.
Question 2
a) Data processing
b) Database
c) Database Management System
Question 3
In what ways is personal strategic planning beneficial?
Question 4
Why do professionals resist planning?
Question 5
Describe four categories of information systems personnel. What are the functions
of each? Which of these categories are combined in a personal information system?
Question 6
Distinguish between data and information.
Question 7
a) What tasks are involved in designing the people component of a personal
information system?
b) What is parallel installation?
c) What is pilot installation?
Question 8
Summarize how the systems development effort changes when developing
information systems at the personal and workgroup levels.

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Chapter 11
Question 1
What is an Executive Information System? What are the features of such an

Information System?
Question 2
Describe the components of an executive Information System?
Question 3
Describe the four decision styles to which an EIS needs to be individually

tailored to.
Question 4
Explain the difference(s) in building Executive Support Systems and

Traditional Management Information Systems?
Question 5
How useful are Executive Support Systems?
Question 6
What are the main issues that an Executive Support System need to consider?
Question 7
Explain the evolution of Executive Information Systems.
Question 8
An EIS itself does not have a clear-cut goal as do most conventional

computer based information systems. Discuss this statement.
Question 9
What is the role that psychological profiling plays in Executive Information

Systems?

Page208
Chapter 12
Question 1
List some of the features of a decision support system.
Question 2
List some Group Decision Support Tools.
Question 3
Discuss the advantages and disadvantages of Group Decision Support Systems.
Question 4
a) Explain the basic structure and process of the model management

component of a DSS program.
b) Explain the basic structure and process of the data management component
of a DSS program.
c) Explain the relationship of the data interface program in the DSS and
extraction programs on an organizational computer.
Question 5
How can a DSS be developed in-house using commercial program components?
Question 6
a) What is a decision support system (DSS)? How does it differ from a

management information system (MIS)?
b) In what ways is building decision support systems different from building

traditional MIS systems?

Page209
c) Explain the two ways in which the term management information system is
used. Give the broad definition of MIS. Give the narrow definition of MIS.
d) Define the following terms:
i) Management information system and Decision support system.
Question 7
What is the main purpose of Decision Support Systems?
uestion 8
Describe the three basic components of a Decision Support System.

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Chapter 13
Question 1
What are the components of expert systems?
Question 2
Distinguish between forward chaining and backward chaining.
Question 3
What are the main guidelines that need to be considered to determine whether a
problem is suitable for an expert solution?
Question 4
What are the five stages in the development of an expert system? In which two
ways does this process differ from the process used to develop other personal,
workgroup, and organisational information systems?
Question 5
a) List and briefly describe the disciplines that constitute the subject of artificial
intelligence (AI).
b) List the three ways in which knowledge is represented in expert systems.
c) Do most expert systems in use today replicate the abilities of a human expert?
What do they do?
d) Explain the problems in defining the term Artificial Intelligence.
Question 6
What does the term deductive inference refer to? What are its advantages?

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Question 7
What are the limitations of expert systems?
Question 8
Distinguish between rule-based systems and expert systems.
Question 9
What are the necessary criteria for expert systems development?

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Chapter 14
Question 1
a. Automatic Data Processing System
b. Distributed Information System
c. Knowledge Mining
Question 2
How does TalkMine influence the management of information in Distributed

Information Systems?
Question 3
What are the major categories of ADAPS programs? Outline the purpose of each
type of program.
Question 4
Why do files need to be maintained? How are they maintained?
Question 5
Why is a transaction-oriented system considered more secure than a data

processing system?
Question 6
How does Talkmine ensure the evolution of a distributed Information System?
Question 7
How is security maintained in Automatic Data Processing Systems?
Question 8
What are the main objectives of Distributed Information Systems?

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Page214
REFERENCES
- Management Information Systems ActiveBook, 7/e
Kenneth C. Laudon, New York University
Jane P. Laudon, Azimuth Information Systems, Prentice Hall, 2002
- Essentials of Management Information Systems, 4/e
Jane P. Laudon, Azimuth Information Systems
Kenneth C. Laudon, New York University, Prentice Hall, 2001
- Developing Management Skills, 5/e
David A. Whetten, Brigham Young University
Kim S. Cameron, University of Michigan, Prentice Hall, 2002
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Page 2

CHAPTER 1: INTRODUCTION TO INFORMATION SYSTEMS

1.1 What is an Information System?

To many people, information systems means computers -- and computers are

Information is the universal commodity, available to all -- but information adds

Consider the following diagramin figure 1.1:

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Data are unprocessed, raw facts, figures, statistics, concepts or instructions. To be

Information is processed data. Data have been analyzed, organized and

Data processing is the process of manipulation, organization and analysis that is

Data and information in a computer system are organized using a directory

a. Those that belong to the Emperor

c. Those that are trained

g. Those that tremble as if they were mad

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As outsiders, the categorization of animals under these headings has no

The above example (figure 1.1) is rather extreme but to be an effective

In the same way that one manufacturer's product is more attractive to a

Quantity The amount of information provided should be adequate for the

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than 100% out of date.

Managing information is primarily a question of assessing the context and

Information systems collect, process, store, and distribute information so that

An information system can be defined technically as a set of interrelated

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Information systems contain information about significant people, places, and

Three activities in an information system produce the information

Formal information systems can be either computer-based or manual. Manual

Although computer-based information systems use computer technology to

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processing. Knowing how computers and computer programs work is important in

Housing provides an appropriate analogy. Houses are built with hammers,

1.2 Computer Information System

The Computer Information System is an ensemble of hardware and software

Today the computer information system is called by a growing number

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The Computer Information System is derived from the Information System by

1.3 Why does information have to be managed?

♦ There is so much more of it these days!

The sheer volume of information available through advances in computing and

♦ It is a valuable asset in most organizations

Information-based organizations now generate more wealth than manufacturing

♦ It can provide a competitive advantage in the market place

Information facilitates chance

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♦ Information enables managers to manage effectively

• Essential decision making information in a usable form

• To see trends developing (such as cost or time blowouts, teams not

• Information to manage cross functional teams doing many projects and

• To be notified of any changes that are likely to affect them

1.4 Roles people play in an information environment

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CHAPTER 2: FUNDAMENTAL TYPES OF INFORMATION SYSTEM

2.1 Transaction Processing Systems (TPS)

A transaction Processing System is an exceptionally powerful and flexible

Transaction Processing System has numerous features important in creating

• Develop high-performance data collection and bar code printing systems

• Revitalize legacy software and hardware in a state-of-the-art transaction

• Access multiple local and remote distributed databases, concurrently and

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Transaction Processing System's modular architecture (refer to figure 2.1) allows

Transaction processing systems [TPS] support the organization's daily activities

Figure 2.1 Transaction Processing Systems Architecture