UNIVERSITY OF MAURITIUS

FACULTY OF LAW AND MANAGEMENT

SECOND SEMESTER EXAMINATIONS

APRIL / MAY 2019

BSc (Hons) Management (Minor: Business Informatics)

PROGRAMME
Level III

MODULE NAME INFORMATION TECHNOLOGY AND STRATEGY

Monday
DATE MODULE CODE CSE3110(5)
06 May 2019

TIME 13:30 – 15:30 Hours DURATION 2 Hours

NO. OF NO. OF QUESTIONS

4 4
QUESTIONS SET TO BE ATTEMPTED

INSTRUCTIONS TO CANDIDATES

This paper consists of FOUR (4) questions.

Answer ALL questions.

 Information Technology and Strategy – CSE3110(5)

Answer ALL FOUR (4) questions.

Question 1 [25 marks]

Read the following Case Study and answer all parts from Question 1.

CASE STUDY: Information Technology Strategies

In looking at the various cases involving the use of the information systems to gain
competitive advantage, one pattern often emerges. IT strategies consist of suppliers using
information systems to change the relationship with their customers. Although this change in
the relationship can benefit both parties, the possibility always exists that one group may
eventually choose to abuse the power created by the change. In the following example,
Oliver, Avery and Lamar work for an accounting firm. One of their clients is a small business
run by Mitch and Abby. The following discussions were encountered:

Oliver Look, we’re starting to feel pressure in this business. We’re having a lot of trouble
keeping our smaller clients. Lately, even some of our larger clients have been
complaining about the cost of our services. We need to find some ways to expand
and keep our current clients.

Avery Well, Oliver, we’ve been looking at this problem for quite some times. There seem to
be only a few options. Obviously, we don’t want to cut our fees. We’ve cut our
internal costs as far as we can. Based on economic projections, the number of
accounting firms is increasing faster than the client base, so we can’t expect things to
get any better. But, Lamar has an idea.

Lamar Thanks, Avery. I’ve been talking to our junior staff members and a couple of clients.
It seems that a large portion of our time is spent just collecting data from some of our
clients. Although most of the larger clients have computerised accounting systems,
we still do taxes and audits from the printouts. For the smaller clients, we spend a
lot of time just organising their data. Sure, we charge them for our time, but as soon
as a hungry competitor offers to do the paperwork for a lower price, the clients jump
ship.

Lamar Well, the main idea is to handle everything on the computer. Let’s take our main
computers and connect them to all of our clients. For the larger clients, we’ll just pull
it directly from the client computer, feed it into one of our auditing or tax packages,
do some quick analyses, and create the final reports. It’ll really speed up the process
and cut down on errors. In addition, we’ll be able to concentrate more on the
analytical services, such as looking for better tax strategies.

Avery That seems to fit with our goals of cutting costs and offering more services, but what
about the small clients that have small computing facilities.

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 Information Technology and Strategy – CSE3110(5)

Lamar With the smaller clients, we’ll offer a complete accounting system that runs from our
computers. Basically, we’ll provide their complete information system. With current
telecommunications technology, it’s easy to set up. It doesn’t really matter where the
computers are located. And we’ve already got most of the software we need.

Oliver Okay, so we can run with lower costs. I still don’t want to cut prices. How does this
system help keep clients?

Lamar Once the clients are on the system, they won’t want to switch. Even if a competitor
comes up with a similar idea, it would cost the clients too much time and effort to
change to another system. Once we get them hooked, they’re locked in.

Avery Yes, that’s the best part. Here’s how I see the plan. We go to our customers and
offer them a short-term discount to switch to the system. Tell them we want to use
them as demo sites.

Oliver That’s right, plus we train their staff members. Get them used to the system. After a
year or so, we start to raise our rates. In the meantime, we write a couple of reports
showing how much the system is saving them. Collect a couple numbers that show
how much we spent on training their people and setting up the system for them.
Then, if they complain about their bills and start talking about switching to another
firm, we give them a report showing how much it’ll cost them to switch.

Lamar Plus, we can tell them the costs are because of their increased business-part of which
they earned because of getting better reports from us.

Oliver And because we have all of their data, it should be easy to make these reports say
anything we want.

Later at one of the clients’ site

Mitch Hi, Abby. Lamar from the accounting firm just made us an interesting offer. He said
his firm is offering a new service. It will handle all of our accounting for a fixed fee.
And they’re offering a special deal if we agree to let them use us as a demo site.

Abby I don’t know, Mitch. Maybe they found out we’ve been talking to other firms, and
they’re just trying to keep us interested.

Mitch Nah. I don’t think that has anything to do with it. They’ve got a whole new system.
Lamar was really excited. They’re going to computerise everything.

Abby But we can’t afford a large computer system. We’ve talked about it before.

Mitch That’s the best part. We don’t have to buy the system. All the records are kept on
their computers. We just use a couple of smart cash registers that transfer the data
over the phone lines.

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 Information Technology and Strategy – CSE3110(5)

Abby But what if we ever want to switch companies? How do we get our data?

Mitch Relax, I asked Lamar about that. He said it’s like medical records. The accountants
will give us whatever reports we want. If we ever switch companies, they’ll give all
the data to the new firm.

Abby Well maybe…..And you said they’re giving us a break on the prices? What do we
have to do to get that? How can they afford it?

Mitch Lamar said that officially, we might have to let some potential customer wander
through the store to check out the system. They won’t see any of the data; they’ll just
make sure the system works. But don’t worry, he hinted that it was just a formality.
He’s really looking out for us on this one-said he pulled a few strings to get us the
offer. He hinted that they’re making money because the new computer system is so
efficient.

Abby Hey, I’ve got an idea. It sounds like they really want us to use this system. Maybe
we can use that to negotiate with them a little.

Mitch Sure. Let’s call Lamar and tell him it’s still too expensive. We’ll drop a hint that
someone else made us a better offer for a similar service. Quick, what was the name
of that company we talked to last week?

(a) Explain whether the accounting firm’s decision to use the information system to build
stronger ties with clients is a good strategy.
[5 marks]

(b) Discuss whether you agree with the accounting firm’s strategy to implement the system
and then plan to increase prices.
[5 marks]

(c) As a partner in the accounting firm, if you choose to go this route, how would you
present the new product and sell it to the clients?
[5 marks]

(d) Discuss whether Mitch and Abby have examined all of the issues before making their
decision? What else should they consider?
[5 marks]

(e) Discuss whether you are agreeable whether Mitch and Abby are taking the right
approach in negotiating with Lamar? Is it ethical?
[5 marks]

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 Information Technology and Strategy – CSE3110(5)

Question 2 [25 marks]

(a) As technology is changing so rapidly even large firms are having difficulty in keeping
pace with time to have full support for new and complex infrastructure. Many
organisations are having recourse to Cloud Computing and consider Software as a
Service (SaaS) for managing their operations. Describe the facilities which Cloud
Computing and SaaS provide.
[5 marks]

(b) Explain what Enterprise systems are and discuss their advantages.
[4 marks]

(c) Differentiate between Knowledge Management System (KMS) and large scale
Transaction Processing System (LS-TPS).
[2 x 2 = 4 marks]

(b) List seven major components that must be coordinated in a firm’s ecosystem to provide
a coherent IT infrastructure.
[1 x 7 = 7 marks]

(c) The New Digital Economy has boosted business-to-consumer (B2C) retailing as well as
business-to-business (B2B) trading. Discuss how a company can take advantage of
both B2C and B2B trading by using information systems.
[2 x 2½ = 5 marks]

Question 3 [25 marks]

(a) Discuss how organisations can apply the framework below as a means to achieve
competitive advantages.

Promote
Improve Business Innovation
Operational Strategic
Efficiency IS

Build Strategic
Info.Resources

[5 marks]

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 Information Technology and Strategy – CSE3110(5)

(b) Discuss why many business organisations find the needs today to move from
Centralised Information Systems Divisions to Decentralised and Distributed Units.
[5 marks]

(c) A typical Information System department consists of a team of Systems Analysts,

Systems Engineers and Programmers among its personnel. Describe the role of these
three types of personnel which are crucial for ensuring successful operation of the IT
resources in a company.
[2 x 3 = 6 marks]

(d) Business organisations seeking to improve their performance would generally sign a
service level agreement when soliciting the expertise of IT specialist firms. Describe the
steps involved in signing a service level agreement.
[5 marks]

(e) Discuss how the introduction of Information Systems resources in organisations may
flatten the organisational structure.
[4 marks]

Question 4 [25 marks]

(a) Explain how the use of Information Systems resources in organisations allow
businesses to operate 24/7, despite the fact that official business hours remain
unchanged from 09:00 to 17:00. Support your answer with a concrete example.
[5 marks]

(b) Globalisation through Information Technology is an ever growing concept for

companies to break national barriers and reach far end customers. Explain how IT
globalisation has transformed traditional companies into transnational ones.
[5 marks]

(c) Information Systems need to respond to changes in environment. New legislation or

new business requirements may need to be accommodated within existing systems.
Describe the steps involved in the change management control process to accommodate
changes.
[5 marks]

(d) Explain why a company which refuses to engage with its customers using social media,
will certainly fail within a short lapse of time.
[5 marks]

(e) Discuss the importance of ethical consideration when companies make use of social
media to interact with their customers.
[5 marks]
END OF QUESTION PAPER
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