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‡ Growth and continued growth.
‡ Early in stage three.
‡ Budget growing on an average of 50% per
year over the past five years.
‡ Different computer configurations and a
variety of application softwares.
‡ Operation mode - batch processing.
‡ Various media to store data.


‡ Growing customer complaints

‡ Slow loan processing
‡ Mistakes in regular premium billing.
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‡ It is a natural growing concern with any
person at authority.
‡ The recommendations provided by the
consultant were far reaching.
‡ There was too much to be done in too little
‡ President¶s major concern was budget and
company¶s culture.
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( (m    %

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±ßack of budgetary and inventory planning.

±ßack of capacity planning

±Decentralized purchasing policy



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hat do you think of the

approach suggested by the
consultant. Is it practical? Is it
The approach suggested by the
Consultant was:




± ›     
±   ›  
±       ! 
±      "   
4lthough the Consultant has given effective solutions
for reengineering the MIS, the solutions are too many
which has to be done in a short period of time that
might lead to damaging effects.

But ,certain suggestions can be helpful for the

organization as the first step to reequip the system
such as:

± #   

± $    › 
± #%  &! [
þ -
ill the consultant¶s sweeping
recommendations fit the culture
of National? Is a company in this
position ready for strict controls?
Culture of National Insurance:

± Growth and more growth(Proliferation)

± 4cquisition of new lines of business and new
± 4pplications added to handle new lines of
± New hardware being added to the business.
± Budget growing on an average of 50% per year
over the last 5 years.
± Computer complex installed ten years ago
± Major operation mode of MIS is Batch
± Data bases exist on a variety of media

± No, the recommendations given by

the consultant does not strive to fit
the culture of National Insurance.
Because it could lead to a drastic
change in the organizational

No, the company is not ready to take strict

± Growing market competition
± Increasing customer complaints
± May damage the future growth
± Organizational flexibility will be hampered
þ .
Can a company progress from stage 2 through
stages 3 & 4 simultaneously?
That is, can they institute proper control
mechanisms while instituting the integrated data
base, long-range plans, steering committees, & so
on, that are the elements of Information Source
+   /

± The stages-of-growth model is a theoretical model for

the growth of information technology (IT) in a
business or similar organization. It was developed by
Richard ß. Nolan during the 1970s, and published by
him in the Harvard Business Review.

± The first article was published in 1973 and consisted

of only four stages. Two additional stages were added
in 1979 to complete his six stage model.
 ë  3

± There is a proliferation of applications.

± Users are superficially enthusiastic about using data
± Management control is even more relaxed.
± There is a rapid growth of budgets.
± Treatment of the computer by management is primarily as
just a machine.
± Rapid growth of computer use occurs throughout the
organization's functional areas.

± There is no reduction in computer use.

± IT division's importance to the organization is greater.

± Centralized controls are put in place.

± There is use of database and communications, often

with negative general management reaction.

± End user frustration is often the outcome.


± 4    








If a company is functional in Second Stage,
then it means that the company is in a state of
Uncontrolled Expansion. Then it is not
possible for the company to Integrate it¶s
Information System without Controlling it
properly because it will further create more
problems rather than solving them.