CHAPTER SIX

MANGEMENT INFORMATION SYSTEM

DEVELOPMENT
 OBJECTIVES

 ICT enabled organizational changes

 The four phases (stages) of developing new

information systems

 The four strategies of changing the old

information systems to new information systems

 Information system Project appraisal techniques.

 POINTS TO BE DISCUSSED

 What is organisation? What do we understand by the

relationship between change and organisations?
 organisations:
1. are a collection of people with different types of skills and
knowledge (managers, knowledge workers, data workers,
production or service workers)
2. Are social structures and consist of politics and culture
3. Are systems that operate in an environment.
4. Have Business processes that convert inputs to outputs
5. Perform business functions: Marketing, Manufacturing,
Finance and Human resource functions
6. Are formal and legal entities with internal rules and
procedures
 SYSTEMS DEVELOPMENT AND ORGANIZATIONAL CHANGE

 Designing a new information system means

redesigning the organization, which involves
changes in jobs, skills, management, and
organization.

 information technology enables four kinds of

structural organizational change : Each carries
different risks and rewards
 SYSTEMS DEVELOPMENT AND ORGANIZATIONAL CHANGE

1.Automation: The use of IT to improve the operational activities

of an organisation. For example, IT based payroll systems,
employee database, etc.
2.Rationalization: the rearrangement of elementary activities to
form higher-level work process. (Venktraman, 1994). Two
areas of higher level work processes. Technical
interconnectivity between functional area and the redefinition
of roles and responsibilities across the organisation.
3.Business process redesign: the analysis, simplification, and
redesigning of business processes in organizations.
4.Paradigm shifts. involves rethinking the nature of the business
and the nature of the organization to bring radical changes in
the organization. Includes the strategic alliance with partners
and the interaction with different stakeholders.
 BPR

 Since the early 1990s, the phrase Business Process

Reengineering has been widely used in European and
American Business Organizations and Corporations.
 Business process is the sequences of activities that a
business performs to transform the inputs accepted
from its suppliers into outputs deliverable to its
customers.
 Business Process Reengineering is the study, analysis
and redesign of fundamental business processes that
are crucial for implementing the strategies of the
organization.
 BPR is part of the organizing design,
 BACKGROUND TO BPR

 Fredrick Taylor and his motion studies: late 19th century early
20th century; The Gilberths Motion Studies and the use of
symbols to represent main activities (Individual level).

 Organisation and Method Studies: studying and improving the

workflows or processes of the different units within an
organization. Widely used During the 1950s, 1960s, 1970s and
1980s (Unit, team or group level).

 Organizations started to revise and reinvent their business

processes when IT was used for managerial control and for
linking the operations of organisations with that of different
stakeholders.

 Example: the banking industry during the 1980s and 1990s

 BPR

 BPR is the redesigning of the business processes in

light of the changes in information technology so that a
company can stay competitive in its business.
 IT plays a major role in meeting the three success
measures of redesigning business process:
 Effectiveness: which is satisfying customer’s requirement,
 Efficiency: measured in terms of output per unit cost/ time.
 IT increases business process efficiencies
 Flexibility: the rate of adaptability of the business to
changes in the external environment.
 IT improves communication, facilitates collaboration among the
people responsible for operation and management.
 Potential payback is high, but so is the risk of failure
 MIS DEVELOPMENT LIFE CYCLE
Information System Development should be
considered immediately after the preparation of
the strategic plan of the organization
There are two major approaches
1. Enterprise Analysis (Business Systems Planning)-
determining the information requirement of the
whole organisation.
2. The CSF approach: undertaking information
requirement analysis based on few selected
success factors.
 FEASIBILITY STUDY

 involves screening and selecting potential systems

development projects by assessing the basic
resource requirements and their costs and
benefits.
 A feasibility of a system can be evaluated using
four major criteria.
1.Organizational feasibility - how well a proposed
information system support the objectives of the
organization’s strategic plan.
2.Economic feasibility - cost savings and other
benefits of the proposed system.
 FEASIBILITY STUDY
3. Technical feasibility - assessing the ability of the
organization to acquire reliable hardware and
software that are capable of meeting the
proposed system.

4.Operational feasibility - the willingness and ability

of the management, employees, customers,
suppliers and so on to operate use, and support a
proposed system.

The result is a feasibility report.

 IS DEVELOPMENT PROJECT MANAGEMENT
As in other areas of business, project management
for information systems must deal with five major
variables:
1. scope
2. time
3. Cost:
4. Quality
5. Risk
 INTANGIBLE BENEFITS

1. Improved asset utilization

2. Improved resource control
3. Improved organizational planning
4. Increased organizational flexibility
5. More timely information
6. Increased organizational learning
7. Legal requirements attained
8. Enhanced employee goodwill
9. Increased job satisfaction
10. Improved decision making
11. Higher client satisfaction
12. Better corporate image
 Project Appraisal Methods

the payback method,

the accounting rate of return on investment (ROI),
net present value, and
the internal rate of return (IRR).

 Formal IS Project Planning and Control Tools:

1. Gantt chart A Gantt chart, developed by Henry L. Gantt, is a
bar chart that uses horizontal bars to show project phases
or activities.

 The left side, or vertical axis, displays the list of required

activities.
 A horizontal axis across the top or bottom of the chart
represents time.
 Project Appraisal Methods

2. PERT Technique
 Another tool used for planning and scheduling time is
called a PERT chart. Developed by the U.S.
Department of Defense, a PERT chart, short for
Program Evaluation and Review Technique chart,
analyzes the time required to complete a task and
identifies the minimum time required for an entire
project.

 PERT charts, sometimes called network diagrams, can

be more complicated to create than Gantt charts, but
are better suited than Gantt charts for planning and
 EXERCISE: NEW IS

 Investment Costs:
1. Hardware: Birr 20000
2. Software: 30000
3. Network technology: 25000
4. Installation: 10000
5. Training: 10000

 Operational Cost:
1. Annual Maintenance cost: 12000
2. Salary for new IS specialist: 60000
3. Telecommunication charge: 40000
 Savings:
1. Saving in cost of stationary Material: 20000
2. Annual savings in labour (Reducing from 5 to 2); 144000
 Required: Calculate the NPV if interest rate is 10%
 PHASES OF SYSTEMS DEVELOPMENT
This is a multi-step process to modify an existing
system or develop a new system
1.System Analysis
2.System Design
3.System Implementation
4.System Review
 1. SYSTEMS ANALYSIS

• System analysis consists of three steps: System

investigation; analysing the current system;
identifying the gap
1.1. System Investigation:- preliminary analysis of
project scope and feasibility. Project scopes
determine the organizational units or activities to
be covered in the study.
 Survey the organization to identify the problems or
opportunities of information system developments.
 is a preliminary study to decide the information
needs of prospective end users
1. 2. Study (Analysis) of the current system:
 an in-depth study of the existing information
processing activities of the end user.
 It is the process of:-
Analyzing the subsystems and identifying its
environmental systems the current information system
deals with.
knowing the organization, management structure, its
people, its business activities,
understanding how the current system uses hardware,
software & people resources to convert data resources
into information products.
1.3. Analyze system (user) requirements
 Determine the information gap and the
information system capabilities.

 System analysis describes what a system should

do to meet the information need of users.

 The end result of system analysis is documenting

system requirements.
 SYSTEMS DESIGN

“Is the general and detailed specifications of

computer based solution that was selected during
system analysis.”
 System Design includes
1. designing the interface (input and output formats)
2. Designing the ERD
3. Designing the process
4. Determining the hardware and the software for the
new system (system specification)
 DFD
 A data flow diagram (DFD) is a tool that graphically shows the
flow of data in a system. The key elements of a DFD are the
data flows, the processes, the data stores, and the sources.

 A data flow, indicated by a line with an arrow, shows the input

or output of data or information into or out from a process.

 A process, which is drawn as a circle, transforms an input data

flow into an output data flow.

 A data store, shown as a rectangle with no sides, is a holding

place for data and information.
 DFD...

 Examples of data stores are filing cabinets, check

book registers, or electronic files stored on a
computer.

 A source, drawn as a square, identifies an entity

outside the scope of the system. Sources send
data into the system or receive information from
the system.
 DFD
 Systems analysts often use DFDs to review processes with users.
Systems analysts prepare DFDs on a level-by-level basis. The top
level DFD, known as a context diagram, identifies only the major
process.

 Lower-level DFDs add detail and definition to the higher levels,

similar to zooming in on a computer screen. The lower-level DFDs
contain sub processes. For example, Figure 12-8 shows a context
diagram that contains the Grade Reporting System process.

 This process might be split into three sub processes:

 (1) gathering and organizing class semester grade forms,
 (2) entering and validating class semester grades, and
 (3) printing and distributing grade reports.
DFD
 SYSTEMS FLOW CHARTS

System flowchart is a graphic diagramming tool

used to show the flow of data media, and the
information processing procedures.
 BASIC CONCEPTS IN ERD: LOGICAL DATA CONCEPTS

 Entity- any thing (object, person, an abstract

concept, or event) about which data is collected.
Example:- Student, Course, Lecturer, etc.
 Attributes:- is a characteristic of interest about an
entity; the values of the attributes describe a
particular entity. Example:- Student ID, Name,
Address, Major, etc.,
 Relationship: Is the association between entities.
Example: a student grade associates a student
with a course.
 ERD: THREE TYPES OF RELATIONSHIPS

1. One-to-one relationship: If one element of entity A can be

directly related to only one element of entity B, and vice
versa. Example: In monogamy system: a husband and a
wife.
2. One-to-many relationship: when one element of entity A
can be related to one or more elements of entity B, but
one element of entity B can be related to only one element
of entity A. Example: the relationship between a biological
father/mother and his/her children.
3. Many-to-many relationship: when one or more element(s)
of entity A can be related to one or more element of entity
B, and when one or more elements of entity B can be
related to one or more elements of entity A. Example: The
relationship between student and course.
 ERD: RULES FOR NORMALIZATIONS
 Normalizations: is the process of efficiently
organizing data in a database.
 goals of the normalization process are:
Efficient utilization of computer memory
Saving access time to the data
To get accurate data
1. First Normal Form (1NF): get rid of repeating data
groups.
 Each row of data must have a unique identifier (or
Primary Key).
 ERD: RULES FOR NORMALIZATIONS..
2. Second Normal Form (2NF)
 Table in 1NF+No Partial Dependencies on a
Concatenated Key.
This means that each column in the table that is not
part of the primary key must depend upon the entire
concatenated key for its existence.

3. Third Normal Form (3NF)

 No Dependencies on Non-Key Attributes.
A table in 3NF should + Meet all the requirements of
the second normal form.
 DATA WAREHOUSE

 A data warehouse is a logical collection of different operational

databases to support business analysis and decision making
activities.
 Data warehouse is different from database because:
1. it combines information from different databases to obtain a
required information for a specific decision making activity.

2. it is multidimensional - meaning it contains layers of columns and

rows to present information in different dimensions.

3. it supports decision making but not transaction processing.

 DATA MINING
Data mining is querying of information in a data
warehouse and the data mining tools are
software being used to access to, and/or to
extract data from, a data warehouse as data
manipulation tools are used in accessing and
extracting data in databases.
 SYSTEMS IMPLEMENTATION

Involves:
 hardware & software acquisition, software
development,
Ex: buy or lease computer system, or to use service
centers for computer time. For software from external
developers or to develop it in-house.
 testing programs & procedures;
 educating and training of management, end users,
and operating personnel who will use the new
system.
 HARDWARE EVALUATION FACTORS

 Performance - speed, capacity, throughput (the total amount of work performed

by a data processing system over some period of time).

 Cost - comparing prices of lease or purchase, costs of operation and maintenance.

 Reliability - the risk of frequent malfunction & maintenance requirement of the

hardware.

 Technology - year of its product life cycle, risk of obsolescence.

 Ergonomics – is the science & technology (some times called human factors
engineering) of ensuring that computers & other technologies are “user friendly”,
safe, comfortable and easy to use.

 Environmental requirements- the electrical power, air conditioning and others.

 SOFTWARE EVALUATION FACTORS

Efficiency - how much does the software require memory

capacity and CPU time.
Flexibility - the ability of the software to handle
processing assignments without major modifications.
Security- The ability of the software to provide control
procedures for errors, malfunction & improper use.
Language - the extent to which computer programmers &
users use the new programming language.
Documentation - the documentation of the software &
the availability of helpful user instructions.
 VENDORS EVALUATION FACTORS

 Past performance in terms of their past promises

 availability of system analysts and programming
consultants and the quality & costs of their services.
 quality & cost of maintenance provision.
 provision, quality & cost of training
 The availability of computer facilities for emergency
backup purposes.
 Accessibility - the availability of branch office (local
or regional office) to offer sales, systems
development, & hardware maintenance services.
 Business position - financial strength, prospects of
industry market.
 SYSTEM TESTING

 involves testing hardware devices usually done by

specialists from the supplier whether they
function properly to accept or reject the system.

 testing & debugging programs:- using test data to

simulate all conditions that may affect during
processing.
 SYSTEM DOCUMENTATION

 explains the technical characteristics & operation

of a system.
 Advantages:
 allows management to monitor the progress of a
system development project.
 for proper implementation & maintenance.
 for diagnosing system errors, and making system
changes especially if the end users or systems
analysts who developed the system are no longer
available within the organization.
 helps to train users how to interact with the
 CONVESION OF THE SYSTEM

There are four choices for conversion.

1.parallel conversion
2.Phased conversion.
3.Direct cut over
4.Pilot Conversion
 SYSTEM CONVERSION

1. Parallel Conversion
 operating the old and the new system
simultaneously until the project development
team & the end user agree to switch completely
to the new system.

Adv: to identify & correct errors and to solve operating

problems before the old system is abandoned.
Disadvantage - expensive & occupies much space
because of running two systems simultaneously
 SYSTEM CONVERSION
2. Phased conversion
 designing and instating separate modules at
different times.
 This involves a gradual implementation process to
take place within an organization.
Adv: to distribute costs evenly through different years
Disadv: the problem of obsolescence
 SYSTEM CONVERSION
3. Direct cut over conversion
 Terminating the old system and placing the new
system immediately:
 high risky approach because major problems may
exist in the new system.

 may be used when the conversion must be

completed rapidly and when there is insufficient
space & personnel to operate both the new and
the old system at the same time
 SYSTEM CONVERSION
4. Pilot Conversion
 is used when multiple new identical or similar
systems will eventually be implemented in several
departments.

 The system is initially implemented and tested in

one of the organisation unit before it can be
implemented through out the system.
 POS IMPLEMENTATION REVIEW

 is evaluating and modifying of operational

information systems to make necessary
improvements.
 It accomplishes two goals:
 gaining insight how to conduct future system
studies more effectively.
 Evaluating systems’ personnel with respect to
their expertise, dedication, judgments, and ability
to meet budgets, inclinations to be either overly
optimistic or pessimistic about time & personnel
resource requirements for system development.
 POS IMPLEMENTATION REVIEW...
 Post implementation review takes place when a
new system reaches a “steady state”, when the
operators and end users are capable of running
the operation of the system & capable of
recommending constructive ideas.
 Purpose:
 to determine whether the system is solving the
problem that it is intended to solve
 to determine if there is any new opportunities to
improve the system.
THANK YOU