BMS 400 Management Information System adjustments to a system's input and processing

INTRODUCTION components to ensure that it produces proper output. . A

The system theory concept system is made up of sub-systems. These subsystems
A system is composed with set of interrelated may be composed of further subsystems.
components which has a clearly defined boundary and Systems Sub-systems functions
working together to achieve a common set of objectives
Transport Air transport, rail To provide movement of
by accepting inputs and producing outputs in an
transport, water goods and passengers
organized transformation process. A system must have a
transport
boundary; outside the boundary is the environment. The
environment of a computer system includes any people Computer Physical component Processing data for

or business activities which interact with it, the sources like inputs, outputs information

of the data which forms its input and the recipients of storage

the information it provides. The art of systems analysis is Business Various Production of goods and
being able to define system boundaries – to decide departments like services
which parts should be included within a particular study, production
so that a logical and convenient model can be prepared. marketing, finance
and Human
resource.
Various types of Systems
Characteristics of a system
In general, the characteristics of a system is may be
listed as follows.

i. A set of interrelated components

ii. With a clearly defined boundary.

iii. Working together.

iv. To achieve a common set of objectives.

A system has three basic interacting components or v. By accepting inputs and producing outputs.

functions. These include: vi. In an organized transformation process

 Input involves capturing and assembling elements
that enter the system to be processed. System Theory Concepts
 Processing involves transformation processes that Feedback-it’s a report about the performance of the
convert input into output. system. It helps us to measure actual output against
 Output involves transferring elements that have expected output and take necessary corrective action.
been produced by a transformation process to their Feedforward-It’s information feed into a system before
ultimate destination. a process takes place to that the results generated are
 Feedback and Control: as per the defined standards.
A system with feedback and control components is Functional decomposition-It involves factoring a
sometimes called a cybernetic system, that is, a self- system into it’s constituent sub-systems so that the
monitoring, self-regulating system. Feedback is data system becomes less complex, manageable and
about the performance of a system. Control involves predictable.
monitoring and evaluating feedback to determine Cohesion-It is a measure of the level of interrelationship
whether a system is moving toward the achievement of between sub-systems that form a system, while coupling
its goals. The control function then makes necessary is a measure of the level of interrelationship between

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two or more systems. We should aim at high- level of mechanism hence they cannot compare inputs and
cohesion and low-level of coupling in a system. outputs. They comprise of an input, processing and
The process in which systems are given autonomy and output units. Closed loop systems have internal control
independence by minimizing interrelationship between and feedback mechanisms i.e. they can compare inputs
the systems is known as decoupling. Decoupling allows with outputs to verify whether there are any deviations.
systems to operate independently to pursue their aim They comprise of an input, processing, control and
objectives and to enhance flexibility. output units
Equifinality-It is a concept that allows a system to
achieve its objectives using different means and
approaches. It implies that there are many to an end.
Symbiasis-this is where there’s a tight relationship INFORMATION SYSTEMS
between systems such that if one system ceases to exist Definition of information:
the other systems cannot function. They depend on each This is processed data, it is meaningful, has value and
other to function. utility (use). It is used for decision making, judgment and
Entropy-systems can run down if they are not also for control. Information provides managers with
maintained. System entropy corresponds to rapid facts and reasons to make certain decisions and not
disorders or chaos in a system, therefore if component in others
a system are left alone they will move towards disorder. Characteristics of good information:
Synergy-It is a condition in which two or more systems  Reliability – the provision of information for decision
work together to produce greater performance than their making should be certain and dependable.
individual performance, i.e the sum of the parts is bigger  Accuracy and precision – information should be
than the whole. provided accurately and to the point
Hard and soft properties of a system - Hard  Format – it should be presented in a form that is
properties of a system are measurable and quantifiable meaningful to the recipient and decision makers
properties such as size of a product. Soft properties of a  Cost effectiveness – the process of acquiring,
system aren’t measurable or quantifiable such as processing and dissemination information should be
appearance of a product. affordable
Types of Systems  Comprehensive – the information should be easy to
Man-made and Natural systems understand
Man-made systems are artificial systems which are  Completeness – the information should contain all
attributed to man, Natural systems are attributed to God relevant facts needed for decision making
or nature  Accessibility – the information should be readily
Physical and Abstract systems available whenever required.
A physical system has tangible elements or components, Organizations and enterprises that effectively handle
Abstract systems are conceptual entities which can only information have a competitive edge.
be visualized but cannot be touched
Probabilistic (stochastic) and deterministic Definition of information system:
systems This is a set of resources that handle information in an
Probabilistic systems are these whose behavior or enterprise. It’s a set of people, tools and technologies
outcome cannot be accurately predicted, Deterministic that are used to collect, process, distribute and manage
Open and closed systems information in an enterprise. An information system can
An open system freely interacts with its environment; A be manual, mechanized or computer based.
closed system does not freely interact with its  A manual information system uses pen and paper
environment and exist in concept only. Open loop only.
systems do not have an internal control and feedback

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 Mechanized information system in addition to pen type of information they need varies greatly. Information
and paper, uses simple machines such as can be classified according to management levels
calculators, cash registers, tax registers etc. The main management levels include;
 Computer based information system uses computers Strategic management – this is the top level
to handle information. They accurately handle management that makes long-term decisions in the
information, can provide easy accessibility to organization. They include CEOs, Chairpersons,
information and can easily distribute information Managing directors etc. They make decision such as
between decision makers. whether to buy a competitor firms who is not doing well
Components of an information system: in the market or merger decisions or to invest in a new
 People - these are divided into two categories: country e.t.c
 End users – consume and use information provided Tactical management – they make decisions that
by information systems. They include; Business affect the organization in the medium-term over 1 to 2
managers, accountants, secretaries etc. they include: departmental heads and group heads.
 Information system professionals – create Example of the decision can be where to locate a new
information systems. They include; network facility for distribution and pricing decisions
managers, system analyst, programmers, web Knowledge based management-these are special
designers etc categories of managers that include scientists, lawyers
 Hardware resources - they are computer accountants etc that create new knowledge in the
resources such as scanners, printers, disks, CDs organization. They bring new ideas into the organization.
e.t.c that are used to create, process, distribute and They will create new products and services.
store information. Operations management- They manage the organization
 Software resources – these are collection of on a day to day basis and make short term decisions.
programs, system software and application software They include supervisors, foremen, general managers
used to manage and control information systems. etc.
 Data base resources – this is a collection of Types of information systems
meaningful information that relates to the entities in TRANSACTION PROCESSING SYSTEM TPS
the enterprise e.g. it is information about workers, It is a computerized system that performs and records
products and services, sales and purchase etc Data the daily routine transactions and activities that are
resources are organized and managed as a necessary to conduct business. These activities include:
database. handling sales reservations, payroll, employee record
 Rules and Procedures – this represents the way in keeping etc.
which business activities are to be conducted in the TPS deals with tasks and activities that are well defined
enterprise e.g. when to give a discount or credit to a and highly structured such as what amount of goods to
customer, how many products to produce, what produce, what credit amount to give to a customer etc.
quality level should we adhere to? How to price the Characteristics of TPS
products etc  They accumulate information from internal
 Telecommunication resources – this include operations of the business.
network equipment that facilitate distribution of  They collect specific data in specific formats and in
information from one point to another. The resources accordance with clearly defined rules and policies.
include mobile phones, wireless networks, radio and  They act as input to higher level systems such as
broadcasting and the telephone. MIS and DSS
Types of information systems:  They provide detailed reports about system
Information systems provide information for decision performance
making. Different managers make different kinds of  They have limited analytical capability
decisions in the organization. Therefore the nature and  They provide accurate and precise data

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TYPES OF TPS  They summarise key data and present information in
In sales and marketing- TPS is used for sales standard formats.
management, market research promotion and pricing.  They are stable over a significant time period
Using systems such as Sales Order Systems, Market  They are oriented towards reporting on the past and
Research System and Sales Communication Systems. not the present
In finance and accounting- TPS is used for budgeting  They have limited analytical capabilities
maintaining the general ledger billing etc. Using systems  They provide the feedback path in the target vs.
such as Accounts Payable Systems. actual results enabling management control on key
In manufacturing and production- TPS is used for organisational issues
scheduling activities, purchasing, shipping operations  They mostly deal with internal data
etc. Using systems such as Purchase order system, KNOWLEDGE BASED INFORMATION SYSTEM KBIS
Machine Control System and quality control system. There are two types of workers in the organization
In human resource-TPS is used for maintaining personnel Data workers –who have less formal qualification, tend
records, benefits of employees, training etc. Using to use and process information rather than create it.
systems such as Benefit and Employee management They include clerks, secretaries managers etc.
system. Knowledge workers- who are people with formal
MANAGEMENT INFORMATION SYSTEM MIS education and members of recognized profession s such
It is also called Management Reporting system MRS. It as engineers, doctors and accountants. They create
provides routine information to decision makers to make integrate and disseminate new knowledge in the
structured decisions such as re stocking decisions on organization. KBIS are specialized systems used to
bonus award etc. They focus on operational efficiency create integrate and disseminate new knowledge in
and provide summaries of data. They are mostly used by organization.
middle managers and they summarise data from TPS OFFICE AUTOMATION SYSTEMS OAS
and provide it in a useful format for decision making. This is an information system that helps automate the
Most of the information from MIS is provided to inform of performance of office tasks. These systems are at almost
reports that include regular or periodic reports. all levels of management. The OAS can be categorized
Regular or periodic report- These are reports into;
produced periodically on stated dates and times. This Software systems
can be daily, weekly or even monthly e.g. daily sales of a  Word processors and desktop publishing- that
supermarket for a period of one week. includes Ms-word, PageMaker etc Used for managing
On demand report-They provide specific information documents such as letters, memos etc
upon request. They can also be regular reports  Spreadsheets - Ms-Excel that are ideal for handling
demanded before their reporting cycle e.g. a sales numerical and financial data on issues such as
manager must be interested in knowing sales per hour budgets, cash flow, purchase and payments
instead of the usual per day.  Image processing systems - PowerPoint, Corel draw
Exception reports-They are also called trigger reports used for presentations, reporting etc
and are supposed to make the managers to act quickly  Communication systems - Ms-Outlook express use
to the situation. They are reports produced to describe for correspondence and communication within and
unusual circumstances or out of ordinary situations such outside the office.
as excessively high or low sales.  Others include systems such as internet explorer,
Adhoc reports-these are reports that are requested in presentation software, graphic software,
a format that is not pre defined in a system.eg In the addition to the above software an automated
requesting for accounting records for the last 8 years if office will include a number of devices such as:-
the system only stores records for 7 years.  Scanners, printers , Fax machines and Photocopier
CHARACTERISTICS OF MIS  Electronic Typewriters

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 Digital cameras Characteristics of DSS
 Computers & Computers networks  They support semi and unstructured decision
 Phones problems.
 TV and Radio  They can be used for individual or group decision-
 internet making.
Advantages of OAS  They are adaptable and flexible.
 Minimize paper work  They support a variety of decision making process
 They automate office task minimizing errors and and decision-making styles.
increasing efficiency task  They are highly interactive and easy to use.
 Better and cheaper correspondence in the office  They have good analytical capabilities.
 Production of high quality system Classification of DSS
 Rapid dissemination of information  Data driven DSS- they emphasize access to and
 Increased increase speed and accuracy of manipulation of time series of internal company data
performing task and sometimes of external data
 Reduce cost of running the office  Model driven DSS –they emphasize access to and
 Facilitate faster access and retrieval of documents manipulation of statistical, financial, optimization or
DECISION SUPPORT SYSTEMS DSS simulation models
This provides manages with information and analytical  Communication driven DSS –they support more than
capabilities to aid in the decision-making process. They one person working on shared tasks. They support
support semi-structured decisions that are partly well group decision models
defined and partly unclear. They can be used in quite  Knowledge driven DSS –they provide specialized
number of decision making scenarios such as loan problem solving expertise stored as facts rules and
amount to give to clients, product pricing, level and procedures
quality of workforce to maintain and managing costs or EXECUTIVE INFORMATION SYSTEM EIS
expenditure etc It’s an information system intended to facilitate and
DSS have user interfaces that are highly interactive that support the information and decision-making needs of
manages can we to ask what if questions to analyze that strategic manages by providing easy to access internal
possible outcome of a number of scenarios and external information relevant to meeting strategic
Components of DSS goals of the organization.
Database-it contains information about external and ElS are used to analyse business performance in
internal data that will contribute to the decision-making general, analyse action of competitors and economic
process. This data is summarized from TPS and IMIS trends and patterns in order to develop strategic plans
Model base-it contains a set of algorithms and formula for the future.
that aid in the decision-making. This includes Internally they draw their data from MIS and DIS. With
accounting, financial, mathematical models that outline external sources the data is filtered to only include
the relationship between variables used in the decision- important information necessary for their decision-
making current ratio = C.A/C.L it helps to determine the making.
liquidity of the firm and hence help in decision-making. They provide an easy way to use interface with lots of
User interface-it aids user interaction with the DSS table and graphs. They provide stronger reporting
system, provide summarized information inform of capabilities and drill down capabilities that have abilities
tables and graphs. It is highly interactive and easy to to establish and define complex and hidden relationship
navigate among data elements. They can be used to analyse,
The decision maker – this is a person with some compare and highlight trends in important variables so
knowledge in the decision making area who use their that they can monitor performance and identify
and DSS to make decisions. opportunities and problems. They evolve with the

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decision-making styles of top management. They have problems using if then rules. It represents the search
less analytical capabilities. algorithm
Advantages of EIS  Explanation sub-system – It’s responsible for
 They aid top managers to make quality decisions by providing reasons and explanations why certain
providing both summarized internal and external decisions were made or suggested.
information.  User Interface – It provides interaction between the
 They are able to determine hidden & complex users and the expert system. It allows users to
relationship between data element. present questions and information to the expert
 They evolve with the decision-making style of top system and also the expert system to supply the
management improving decision-making efficiency users with responses to the inference engine.
and speed. Advantages of ES
 They are easy to use and don't require extensive  It is deemed to have superior knowledge than any
computer knowledge. expert because it collects knowledge from no.of
Disadvantages of EIS experts.
 They are expensive to build and implement.  They are reliable and provide consistent answers to
 They have limited analytical capability and can't repetitive tasks,
perform complex computations.  They can easily be replicated.
 The benefits of EIS are difficult to quantify.  They supplement shortage of experts in technical
 Executives may encounter information overload. areas.
EXPERT SYSTEM ES Disadvantages of ES
It's a knowledge based information system that uses its  They are expensive to design, model and implement.
knowledge about a specific complex, application area to  They are inflexible and can't be easily adapted.
act as an expert consultant to end users. They provide  They lack common sense needed in some decision-
answers to questions in a very specific problem domain making.
by making human like inferences about knowledge  They can't make creative responses as human
contained in a specialized knowledge base. They are experts would, in unusual circumstance.
able to explain their reasoning process and conclusion to Uses of ES
a user. They are mostly used where there is shortage of  For customer service to direct customer queries to a
human experts or to supplement their knowledge – You specific source for help
will find them in credit application systems, machine  Provide an accurate estimation for insurance claims
diagnostic system business to minimize costs and  To assist financial to make investment decision such
optimize profit and as medical systems that are able to as which stock to buy or sell.
diagnose a patient’s ailment and give a recommendation Summary review
for medication. ES are used in artificial intelligence Typ Informat Processin Informatio Uses
technology that provides computer systems and es ion g n Outputs Strategic
machines with human-like intelligence. Making such of Inputs Graphics manageme
machines able to reason, talk and behave like human I.S - simulatio nt
beings. 1.EI Aggrega ns and
Components of ES S te data, interactiv
 Knowledge base- this represents knowledge that has both e.
been captured from a number of experts in form of a internal
database of decision rules and outcomes. and
 Inference engine – It gives the expert system ability external
to find solutions to diagnostic and prescriptive 2.D Databas Interactiv Reports, Profession
SS es e, responses al staffs

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 analytic simulatio to and At the strategic level, information systems establish long
al n and queries, d managers term investment goals of the firm and provide long
models, analysis ecision range forecasts of the firm’s financial performance.
data analysis At management level it helps managers to oversee and
analysis control the firm’s financial resource.
tools At operational level IS tracks flow of funds in the firm
through transaction such as payments, receipts,
3.M Summar Routine Reports – Used by
cheques e.t.c
IS y reports, summary tactical
transact low-level - managers
ion analysis, scheduled
Data simple -
and models exception
Manufacturing and Production
simple al
At strategic level - IS supports the firm long term
models
manufacturing such as where to locate new plants or
4.K Knowled Modeling, Graphics Profession
whether to invest in new manufacturing technology,
BIS ge base simulatio and al and
At management level - IS analyze and monitor
design ns models technical
manufacturing and production cost and recourses.
Specific staffs
At operational level-IS is used for inventory management
ation,
modelin
g

5.T Transact Sorting, Detailed Operation Sales and Marketing

PS ion messagin reports, manageme At strategic level-IS is used to monitor trends affecting
data, g, lists and nt and new products and sales opportunities, support , planning
event updating summarie supervisor for new products and services and monitor performance
s s of competitors.
6.O Docume Documen Document clerical At management level-Is support market research,
AS nts, t s, workers advertising promotional campaigns and pricing
schedul managem schedules and office decisions.
es ent, and mails workers At operational level-provide customer service support,
schedulin processing of orders and locating and contacting
g and customers.
communi
cation

7.E Knowled Simulatio Response All

S ge base, n, to queries manageme Human Resource

models modeling interactive nt At strategic level-HR systems identify man-power

requirements to meet firms long-term business plans.
At management level-IS are used to monitor and analyse
Information Systems from a functional perspective
recruitment, allocation and compensation of employees.
-Information systems can also be categorized according
At operational level-IS is used to track recruitment and
to the functional areas of an organization. This include:-
placement of employees.
Finance and Accounting

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Enterprise Wide Information Systems relationship with suppliers. It facilitates close linkage and
Enterprise systems, also known as enterprise resource coordination of activities involved in buying, making, and
planning (ERP) systems solve this problem by providing moving a product.
a single information system for organization-wide It link suppliers, manufacturing plants, distribution
coordination and integration of key business processes. centers, conveyances, retail outlets, people, and
Discrete business processes from sales, production, information through processes such as procurement,
finance, and logistics can be integrated into inventory control, distribution, and delivery to supply
company-wide business processes that flow across goods and services from source through consumption.
organizational levels and functions. Enterprise systems Information systems can help participants in the
integrate the key business processes of an entire firm supply chain to:-
into a single software system that enables information to  Decide when and what to produce, store, and move
flow seamlessly throughout the organization. These  Rapidly communicate orders
systems focus primarily on internal processes but may  Track the status of orders
include transactions with customers and vendors.  Check inventory availability, transportation, and
The enterprise system collects data from various key warehousing costs
business processes in manufacturing and production,  Track shipments
finance and accounting, sales and marketing, and  Plan production based on actual customers demand
human resources and stores the data in a single  Rapidly communicate changes in product design
comprehensive data repository where they can be used CUSTOMER RELATIONSHIP MANAGEMENT - CRM
by other parts of the business. Managers emerge with CRM focuses on managing all of the ways that a firm
more deals with existing and potential new customers. CRM
precise and timely information for coordinating the daily uses information systems to integrate all of the business
operations of the business and a firmwide view of process surrounding the firm’s interactions with its
business processes and information flows. The system customers in sales, marketing and service.
transmits information for calculating the salesperson’s CRM systems facilitate:-
commision to the payroll department. The system also  Unified view of customers
automatically recalculates the company’s balance  Consistent message to customers
sheets, accounts receivable and payable ledgers, cost-  End to end customer care
center accounts, and available cash. Corporate  Long term customer relationship
headquarters  Identification of best customers
Benefits
 Firm structure and organization: One The Challenge of Information Systems: Key
Organization Management Issues
 Management: Firm wide Knowledge-based Although information technology is advancing at a
 Management Processes blinding pace, there is nothing easy or mechanical about
 Technology: Unified Platform building and using information systems.
 Business: More Efficient Operations and There are five major challenges confronting managers:
Customer driven 1. The information systems investment challenge:
Challenges How can organizations obtain business value from their
 Daunting Implementation information systems?
 High Up-front Costs and Future Benefits How can organizations obtain a sizable payoff from their
 Inflexibility investment in information systems? How can
SUPPLY CHAIN MANAGEMENT - SCM management ensure that information systems
Supply chain management systems are outward looking contribute to corporate value?
systems focusing on helping the firm manage its 2. The strategic business challenge:

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Despite heavy information technology investments, information, and knowledge work systems to facilitate
many organizations are not realizing significant business knowledge creation.
value from their systems, because they lack—or fail to Other knowledge management applications are expert
appreciate—the complementary assets required to make systems that codify the knowledge of experts in
their technology assets work. information systems that can be used by other members
3. The globalization challenge: How can firms of the organization and tools for knowledge discovery
understand the business and system requirements of a that recognize patterns and important relationships in
global economic environment? Given language, cultural, large pools of data. Examples of knowledge
and political differences among countries, this focus management systems
frequently resulted in chaos and the failure of central
management controls
4. The information technology infrastructure
challenge:
Many companies are saddled with expensive and
unwieldy information technology platforms that cannot
adapt to innovation and change. Their information
systems are so complex and brittle that they act as
constraints on business strategy and execution. 5.
Ethics and security: Although information systems FILES AND DATABASES
have provided enormous benefits and efficiencies, they Computers have ability to manage vast and complex
have also created new ethical and social problems and amounts of data accurately and fast. Business store
challenges. records about the major events and activities such as
KNOWLEDGE MANAGEMENT SYSTEMS sales and marketing, investments, products and
The value of a firm’s products and services is based not services. For this reason computers are currently holding
only on its physical resources but also on intangible important business trade data and transactions. The
knowledge assets. Some firms perform better than data in the computers are organized in terms of files and
others because they have better knowledge about how databases. The reports, trends and patterns produced
to create, produce, and deliver products and services. from the databases are used for decision making and
This firm knowledge is difficult to imitate, unique, and judgemental purpose. Moreover the databases can be
can be leveraged into long-term strategic benefit. analysed using data mining tools and drill down tools to
Knowledge management systems collect all relevant provide more insights into decision making. The major
knowledge and experience in the firm and make it challenge of the database is the need to protect them
available wherever and whenever it is needed to support from security threats and ensure unauthorized access to
business processes and management decisions. They the database.
also link the firm to external sources of knowledge.
Knowledge management systems support processes for FILE MANAGEMENT SYTEM & DATA BASE
acquiring, storing, distributing, and applying knowledge, MANAGEMENT SYSTEM
as well as processes for creating new knowledge and In a traditional file management system each and every
integrating it into the organization. They include department or user are responsible for maintaining their
enterprise-wide systems for managing and distributing own files or the programs that interact with those files.
documents, graphics, and other digital knowledge Traditional file system has a lot of limitations that
objects, systems for creating corporate knowledge include;
directories of employees with special areas of expertise,  Lack of data/ program independence
office systems for distributing knowledge and  High level of data redundancy.
 Lack of data integrity or security

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 Lack of data sharability  Program / data independence-In a DBMs the
 Difficulty of enforcing standard structure of database can be changed without
Database management system affecting the data.
 A database – is a collection of files that is logically  Enforcement of standards – DBMs provides tools that
organized or centrally managed. allow for enforcements of integrity rules and also
 Databases store data about important entries in an validation and verification checks.
organization e.g. a student database voter’s  Ease of data maintenance – using DBMS tools users
database etc. can easily add edit & delete record from a database
 A Database management system- a software system ease of primary system failure
used to control the structure of a database or access Disadvantages of DBMs
to the data e.g. of DBMS include;  Database systems are large & complex pieces of s/w
Components of DBMS; that are difficult to manage & administer.
Most DBMS consist of three components namely;  The consolidation of large amounts of data in
 Data manipulation language (DML) centralized locations increases security vulnerability.
 Data dictionary (DD)  DBMS systems especially the large ones are costly.
 Data definition language (DDL) DATA WAREHOUSE
Data manipulation language  It’s a central repository for data a large storage
The DML is used to manipulate the database by; adding location for data.
data, deleting data, editing data or copying data from  Data stored in the data warehouse is collided from
the database multiple sources that include; internal or external
Data dictionary sources, data about past or current activities, data
It’s used to describe the data elements that make up the about transactions that take place in the
database. organization or data from various department in the
It stores the data definitions and descriptions of the organization.
structure of data used in the database  A data warehouse usually resides in a single site.
Data definition language  The data is stored under a unified scheme that is
It’s used to describe the structure of the database under common data base structure.
It identifies the database fields their data types and field DATA MART
size amongst others etc.  It’s a subset/ part of a data warehouse in
Advantages of DBMS summarized or highly focused portion.
 Minimized data redundancy – in a DBMs data is  It stores data in a separate data base for a specific
stored only once with minimum redundancy to allow population of tasks.
for interrelationship between data elements  It focuses on a single subject area and can be
 Improved data integrity & security – since in a consolidated more rapidly and at lower cost than the
database the database is updated only once, this data warehouse.
minimizes chances of data inconsistencies that  It provides faster access and updating of data.
results in updating data in several files Benefits of data warehouse
 Using passwords or username, users can be limited  Improved quality of decision making.
on the type & amount of data they access for  Enable decision makers to access the data as enter
security purposes. as needed without affecting performance of
 Data sharability: in a database system many user underlying operational systems.
can share the same data or even different views of  Manager can
data that is provided in the database  Get organization wide view of information or
external views for better decision making.

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 Using data tools new or complex relationship about their trades. Networked systems are fundamental to
data can be discovered. electronic commerce and electronic business.
Disadvantages/challenges Data communication is the movement of encoded
 It’s very expensive to maintain a warehouse multimedia data from one point to another using optical,
 It’s complex or difficult to manage electrical and free space transmission system.
 Consolidation of data creates vulnerability Multimedia data take the form of text, voice, video,
 Information overload pictures, graphics and animations.
DATA MINING A network is an interconnection of computers and
 The procedure for extracting or mining knowledge peripheral devices to facilitate sharing of resources and
from large qualities of data, to establish new or data. Network can be wired or wireless. A wired network
complex inter relationship between data elements. uses cables to connect computer systems together while
 Computer assisted process of sifting through or a wireless network uses free space or airwaves to
analyzing vast amounts of data in order extract connect computer systems together.
hidden patterns or meaning and to discover new ADVANTAGES OF NETWORKING
knowledge. Resource Sharing
 It’s useful in many applications such as credit Networks facilitate sharing of resources such as printers,
railings, counter terrorism, marketing, sports etc. processors, memory, and data and so on to reduce on
 A number of activities work under data mining or this operation costs.
include; Security
 Data cleansing: removing inconsistences between Through the use of the network administrator control
data elements. can be ensured through the use of passwords. This
 Data integration: this is where multiple data sources ensures that the unauthorized users don’t have access
may be combined. to the organization data.
 Data selection: where the data relevant to the Remote communication
analysis are retrieved from the data base. This is well illustrated by the use of Internet. It
 Pattern evaluation: in which interesting patterns eliminates the need for people to travel to attend
between data elements are observed. meetings. People can hold meetings through ‘virtual
 Data transformation: data is consolidated by technology’.
summarizing or aggregating. Rapid Dissemination of information
Steps in data mining; Using systems such as emails, chatting, and internet
1. Data sources: Data is collected from many sources telephony networks makes it easy to distribute and
both from internal or external. share information from one point to another.
2. Data cleansing: data are cleaned and checked for Telecommuting
errors or inconsistencies. Using networks people can work away from the office
3. Meta-data: the cleansing process yields both the and continue to complete important assignment and
cleansed up data and meta-data (data about data) duties even at home or travelling.
4. Data transport to the data warehouse: both the data Management and control
and meta-data are sent to the data warehouse. Networked systems can easily, cheaply and effectively
be managed from remote locations. They do not require
TELECOMMUNICATION AND NETWORKS managers to travel or be present to conduct
Most of the information systems we use today require management duties
networks and communication technology. Companies,
large and small from all over the world, are using DISADVANTAGES OF NETWORKING
networked systems and the Internet to locate suppliers Data and Network Security
and buyers, to negotiate contracts with and to service

by Oteino B Page 11 of 34
The mere existence of data communication capabilities cameras within several feet’s of each other. The devices
poses a threat to security. One is able to enter into a are able to exchange low volumes of data using
company’s computer system and tap very secret transmission systems such as blue tooth and infrared
information of the company such as product formula, or technology.
even government secrets. Networks are vulnerable to
virus attack, Hackers attack, and a variety of malicious COMMUNICATIONS CHANNELS
software Communications channels are the means by which data
Initial Cost are transmitted from one device it a network to another.
The computer network requires the net work card and Definitions
special network software as well as special 1. Bandwidth –it’s a measure of the capacity of a
communication cables like the coaxial cable, twisted communication channel i.e. the amount of data that
pair. Hence the initial costs are high although the a communication channel can transmit. It’s also the
benefits accrued to networking are many. range of frequency, i.e. the difference between the
Networks are complex to manage and administer highest frequency and lowest frequency in a
It requires skills and training to effectively manage and communication channel. The larger the bandwidth the
control network operations more the data that can be carried or transmitted over a
Failure of networked systems can greatly affect communication channel.
business operations 2. Transmission speed – its measured in bits per second.
Network interlink important business process that if one It’s a measure of the rate at which data is transmitted
failure result in failure of other system which depend on within a communication channel for example a network
it card can operate at speeds of 10 megabits per second
TYPES OF NETWORKS 10Mbps
LAN – Local Area Network Wired channel
It is a network within a small geographical area such as  Twisted pair cable Telephone line.
building, a business premises. It is a privately owned Unshielded twisted pair
network that belongs exclusive to one organization. (UTP)
WAN – Wide Area Network Shielded twisted pair
It is a network that covers a wide geographical area such (STP)
as between towns and cities. It even can cover the entire  Co-axial cable Thin coax-RG5
world for example the internet. The ownership of wide Thick coax -RG8-thicknet
area network is sharable.  Fiber – optic cable Mono mode
MAN – Metropolitan Area Network fiber
It is a network within a city or the suburbs of a city. For Multimode fiber
example a bank can have network of bank branches Wireless channels
within different parts of the city.  Microwaves
CAN – Campus Area Network  Satellites
Most universities and colleges have established  Radio waves
campuses in various part of town or a country that need  Infrared
to be connected together to form one administrative Various types of wireless technologies
unit. Such networks which connects the different  Blue tooth technologies
campuses are called CAN  Wifi technologies
PAN – Personal Area Network  Hotspots
It is a network that connects personal hand held and Twisted Wire
mobile devices such as palm top computers, printers,
mobile phones, personal digital assistant and digital

by Oteino B Page 12 of 34
 Microwave systems, both terrestrial and celestial,
transmit high-frequency radio signals through the
atmosphere and are widely used for high-volume, long-
distance, point-to-point communication.
Twisted wire consists of Satellites are typically used for
strands of copper wire twisted in pairs. Twisting gives communications in large,
the wires physical strength and minimizes the levels of geographically dispersed
cross talk noise. Many of the telephone systems in organizations that would be difficult
buildings had twisted wires installed for analog to tie together through cabling
communication, but they can be used for digital media or terrestrial microwave. With such wireless
communication as well networks, businesspeople will be able to travel virtually
Coaxial Cable anywhere in the world and have access to full
Coaxial cable, like that used for cable communication capabilities including videoconferencing
television, consists of thickly insulated copper and multimedia-rich Internet access.
wire which can transmit a larger volume of COMMUNICATIONS NETWORKS
data than twisted wire. A number of different ways exist to organize
telecommunications components to form a network and
hence provide multiple ways of classifying networks.
Fiber Optics and Optical Networks NETWORK TOPOLOGIES
The Star Network
The star network consists of a central host computer
connected to a number of smaller computers or
terminals. This topology is useful for applications where
some processing must be centralized and some can be
performed locally.
Fiber-optic cable consists of strands of clear glass fiber, The Bus Network
each the thickness of a human halt which are bound into The bus network links a number of computers by a single
cables. Data are transformed into pulses of light, which circuit made of twisted wire, coaxial cable, or fiber-optic
are sent through the fiber-optic cable by a laser device cable. All of the signals are broadcast in both directions
at a rate from 500 kilobits to several trillion bits per to the entire network, with special software to identify
second. Fiber-optic cable is considerably faster, lighter, which components receive each message (there is no
and more durable than media and is well suited to central host computer to control the network). The Ring
systems requiring transfers of large volumes of data. Network
Wireless Transmission Each computer in the network can communicate directly
Wireless transmission that sends signals through air or with any other computer, and each processes its own
space without being tied to a physical line. Today, applications independently. in a ring topology, the
common technologies for wireless data transmission connecting wire, cable, or optical fiber forms a closed
include microwave transmission, communication loop. Data are passed along the ring from one computer
satellites, pagers, cellular telephone; personal to another and always flow in one direction.
communication services (PCS), smart phones, personal
digital assistants (PDAs), and mobile data networks.

by Oteino B Page 13 of 34
 LAN’s can be set-up as either peer to peer networks or
client/server networks.
Peer-to-peer network Client/server network

 All nodes/computers  Computers are

are in status and can designated as being
provide and receive either servers or
network services clients. Servers are
 Every computer is powerful
responsible for computers that
managing its own store and programs
files and programs and provides
 Less costly to set-up network services to
 It’s difficult to secure clients. Clients
and protect files request and receive
 Suitable for a network network services
with few computers from the server
 Failure of one  Files and programs
computer doesn’t are managed
greatly affect the centrally by the
network server.
 More costly to set-
up
 Suitable for a
network with many
computers.
 It’s easier to secure
and manage files
since they are
managed centrally.
 Failure of the server
can greatly affect
the network

Popular LAN protocols include: Ethernet and token ring

for wired networks while those of wireless network
include Wi-Fi and Bluetooth.
NETWORK SERVICES AND BROADBAND
TECHNOLOGIES
In addition to topology and geographic scope, networks
LAN Technologies can be classified by the types of service they provide.
This is a network that spans a small geographical region ELECTRONIC BUSINESS AND ELECTRONIC
as business premises or between adjacent buildings. LAN COMMERCE TECHNOLOGIES
are privately owned by the organization that sets up the Electronic mail (e-mail), groupware, voice mail, facsimile
network. It can be set-up using wired or wireless machines (fax), digital information services,
channels. It is easier to secure than WAN teleconferencing, data conferencing, videoconferencing,
by Oteino B Page 14 of 34
and electronic data interchange are key applications for other over video screens is termed video
electronic commerce and electronic business because teleconferencing, or videoconferencing.
they provide network-based capabilities for Desktop videoconferencing systems typically provide
communication, coordination, and speeding the flow of windows for users to see each other and capabilities for
purchase and sale transactions. participants to work on the same document from
MANAGEMENT ELECTRONIC MAIL AND different locations.
GROUPWARE Most desktop systems provide audio capabilities for two-
E-mail eliminates costly long-distance telephone way, real-time conversations and a whiteboard. The
charges, expediting communication between different whiteboard is a shared drawing program that lets
parts of an organization. Although e-mail has become a multiple users collaborate on projects by modifying
valuable tool for communication, groupware provides images and text online. Software products such as
additional capabilities for supporting enterprise-wide Microsoft NetMeeting and CU-SeeMe provide low-cost
communication and collaborative work. Individuals, tools for desktop videoconferencing over the Internet.
teams, and work groups at different locations in the
organization can use groupware to participate in ELECTRONIC DATA INTERCHANGE
discussion forums and work on shared documents and Electronic data interchange (EDI) is a key technology for
projects. electronic commerce because it allows the computer-to-
VOICE MAIL AND FAX computer exchange between two organizations of
A voice mail system digitizes the sender's spoken standard transaction documents such as invoices, bills of
message, transmits it over a network, and stores the lading, or purchase orders. EDI lowers transaction costs
message on disk for later retrieval. When the recipient is because transactions can be automatically transmitted
ready to listen, the messages are reconverted to audio from one information system to another through a
form. telecommunications network, eliminating the printing
Facsimile (fax) machines can transmit documents and handling of paper at one end and the inputting of
containing both text and graphics over ordinary data at the other.
telephone lines. A sending fax machine scans and
digitizes the document image. The digitized document is THE INTERNET
transmitted over a network and reproduced in hard copy The internet is a global network of computers. It is
form by receiving fax machine. The process results in a multimedia based i.e. it presents information inform of
duplicate, or facsimile, of the original. text, voice, video, animation, pictures e.t.c.
TELECONFERENCING, DATACONFERENCING, AND It is based on clients/server architecture in which some
VIDEOCONFERENCING computers are designated as server and others as
People can meet electronically, even though they are clients. Clients can be computers, mobile phones, smart
hundreds or thousands of miles apart, by using phones that access services from servers. Servers are
teleconferencing, data conferencing, or the main computers on the internet that provide internet
videoconferencing. Teleconferencing allows a group of services such as web, email, file transfer, database, and
people to confer simultaneously via telephone or via e- communication e.t.c.
mail group communication software. Teleconferencing It’s based on packet switching technology in which
that includes the ability of two or more people at distant message are subdivided and packed into message units
locations to work on the same document or data called data packets. The typical structure of a data
simultaneously is called data conferencing. With data packets include
conferencing, users at distant locations are able to edit Source Destinati Messag Packet Error
and modify data (text, such as word processing Addres on e Unit Sequenc check
documents; numeric, such as spreadsheets; and graphic) s Address e bits
files. Teleconferencing in which participants see each Number

by Oteino B Page 15 of 34
Data packets travel independently and can follow business
different routes in the internet depending on network partners
conditions upon reception have to be reassembled into Based on TCP/IP Based on TCP/IP Based on
the original message. protocol and protocol and TCP/IP
It is based on mesh topology that provides multiple standards standards protocol and
paths for routing data packets from one destination to standards
another.
Covers mostly a Covers a
It is based on universally acceptable standards and
Covers a wide small wide
protocols called TCP/IP protocol. Transmission control
geographical geographical geographical
protocol ensures reliable delivery of data packets on the
area WAN area but can also area WAN
internet and that data packets are received without
cover wide area
getting lost or received in errors.
for multinational
Internet protocol IP is responsible for routing data
organizations
packets from one point to another using the most
Less Secure Very Secure Secure
reliable efficient route. It chooses the best path and
most economical to transfer the data packets. Other
EXTRANET
protocol of the TCP/IP protocol include; FTP, UDP,
An extranet is similar to an intranet but it is made
TELNET, ARP e.t.c.
accessible to selected external partners such as
All devices on the internet are all assigned unique IP
business partners, suppliers, key customers, etc, for
address to facilitate sending and receiving data. Two
exchanging data and applications and sharing
versions of addresses are currently used:-
information.
IPv4 – That uses 4 decimal numbers between 0 and 255
Benefits of extranets
separated by 4 full stops. Example includes
1. More integrated supply chains through the use of
192.168.01.24. It can provide a maximum of 4.2biliion
online ordering, order tracking and inventory
addresses.
management
IPv6 – that uses hexadecimal numbers separated by 6
2. Reduced costs by making manuals and technical
full colons. Example include
documentation available online to trading partners
100E:27BD:FACE:1970:BD75:48F9. It is downward
and customers
compatible with IPv4 and can accommodate up to 2128
3. More effective collaboration between business
addresses.
partners - perhaps members of a project team by
To connect to the internet you need
enabling them to work online on common
 An ISP connection, TCP/IP protocol suite, Web
documentation
browsing software, Internet enabled device or
4. Improved business relationships with key
network, Routers for LANs and WANs, Switches and
trading partners because of the close collaborative
Hubs, Cables 4 wired connections, Network cards
working that extranets support
5. Improved customer service by giving customers
Internet Intranet Extranet
direct access to information and enabling them to
Public network Private network Private
resolve their own queries
accessible by all accessible only network
6. Improving the security of communications between
users by employees of accessible by
you and your business partners, since exchanges
the organization employees
can take place under a controlled and secure
together and
environment
trusted
7. Shared news of product development exclusively
customers,
with partner companies
suppliers and

by Oteino B Page 16 of 34
INTRANET E-commerce transactions can be classified into a no. of
 It refers to an organization private or internal groups including
network designed using web standards and is 1. Business to consumer E-commerce - B2C
protected from public visits by firewalls. It involves retailing products and services to individual
 Access rights are only given to the employees or shoppers in the internet e.g. Barnes and Nobbs.com it
member within an organization. sells book soft ware and music to individual customers
 Firewalls are security systems that consist of 2. Business to Business E-commerce - B2B
hardware and software placed between an It involves selling of goods and services among
organization . Internal network and an external businesses using the internet for example milpro.com is
network including the internet. They are a website for selling cutting tools, grinding wheels and
programmed to intercept each message packet metal work fluid to other hundreds of small machining
passing between the two networks, examine the businesses
characteristics of the message and reject 3. Consumer to consumer E-commerce - C2C
unauthorized messages or access attempts. It involves consumer selling directly to other consumers
 Intranets require no special hardware and can run using the internet e.g. eBay.com is a giant web auction
over any existing network infrastructure. site that allow people to sell their goods and services to
other consumers by auctioning the merchandise to the
Benefits of intranets highest bidder
1. Better internal communications - corporate Other forms of E-commerce include business to
information can be stored centrally and accessed at government E-commerce and govt to govt E-commerce
any time MODES OF E-COMMERCE PAYMENTS
2. Sharing of resources and best practice - a virtual 1. E-commerce payment system
community can be created to facilitate information It securely stores credit cards and owners identification
sharing and collaborative working info and provide the info whenever required on E-
3. Improved customer service - better access to commerce site checkout counter .The electronic wallet
accurate and consistent information by your staff enters the shopper’s name, credit card no. and shipping
leads to enhanced levels of customer service information automatically when invoked to complete the
4. Reduction in paperwork - forms can be accessed and purchase e.g yahoo wallet
completed on the desktop, and then forwarded as 2. Micro-payment system
appropriate for approval, without ever having to be They are mostly used for purchase of low value goods
printed out, and with the benefit of an audit trail /services e.g. downloading music clips, posters etc they
are implemented in two different ways.
E-COMMERCE AND E-BUSSINESS  Accumulated balance digital payment system-that
E-commerce is buying and selling products and services allows users to make micro-payment and on the
using the internet web, accumulating debit balance that they must pay
E-business in addition to buying and selling using the periodically using credit cards e.g. Qpass
internet also includes activities such as pricing,  ii) Stored value payment system-enables consumer
distribution, marketing, payments, shipping and other to make instant online payment based on a value
support activities to ensure successful online trading. stored in a digital account
Mobile commerce-it’s buying and selling products and 3. Smart card
services on the internet using hand held devices such as It’s a plastic card almost the size of a credit card that
mobile phones, internet phones, smart phones and palm store and process digital information it serves as an
top computers electronic purchase in place of cash. it can be able to
CATEGORIES OF E-COMMERCE record details of financial transactions and update
account balances e.g. American express blue smart card

by Oteino B Page 17 of 34
4. Digital cash (E-cash) they are suitable for large unfamiliar vendors due to privacy, fraud and security
purchases. Digital cash is currently represented in concerns
electronic form that moves outside normal network of 4. E-commerce and E-business systems require radical
money. users are supplied with direct software and can changes in business process and environments. These
exchange money with another E-cash user over internet create uncertainty in the organization and are likely to
e.g. E-coin.net be resisted by employees
5. Digital cheque-payment system such as western union 5. Difficulty of inspecting goods that are not within
money transfer extend functionality of existing physical reach of buyer (i.e.) WYSWYG(What you see is
chequeing account to be used for online payment, they what you get)
are less costly, the cheque can be encrypted to secure
them The common internet revenue models include:-
6.Use of credit cards and debit cards 1. Advertising
Advantages of E-commerce to business One of the oldest money-making sources, this model is
1. E-commerce system offers round the clock operations under constant evolution. With the general internet
2. Global customer reach population having access to ad-blocking tools, the
3. Low cost of acquiring services and retaining industry has gone on to employ complex and creative
customers methods to stay relevant.
4. Improved customer service  Display Ads - e.g. Yahoo!
5. Disintermediation such that customers and suppliers  Search Ads - e.g. Google
can be reached directly eliminating expensive middle  Text Ads - e.g. Google, Facebook
men  Video Ads - e.g. YouTube
6. Firms can deploy knowledge of customer behavior  Audio Ads – e.g. Saavn
using customization and tracking tools  Promoted Content - e.g. Twitter, Facebook
7. Reduce business transaction costs through use of  Paid content promotion
systems such as EDS and EFT  Recruitment Ads - e.g. LinkedIn
Advantages of E-commerce to consumers  Classifieds - e.g. JustDial, Quikr
1. Easy and convenient shopping  Featured listings - e.g. Zomato, CommonFloor
2. A wide variety of goods to choose from  Email Ads – e.g. Yahoo!, Google
3. Affordable goods to choose from  Location-based offers - e.g. Foursquare
4. 24 hrs shopping 2. Freemium model
5. Better customer support and services Perhaps the most common model used by Web services.
6. Prices of products/services can easily be compared The idea here is to sell a basic free product to as many
Disadvantages of E-commerce customers as possible, but keep the premium features
1. Unproven business models-Not all companies make exclusively for paying customers. A large number of
money on the web; many companies have shut down SaaS products use this model. For instance, Dropbox
because it’s difficult to generate enough revenue to offers 2GB of free cloud data storage. But if one wants
sustain web business. Business models built around the more space, one has to pay up. Dropbox's purchase
internet are not yet proven plans. Other examples include Adobe Flash, Evernote,
2. Legal issues-Law governing E-commerce are still Google Docs/Drive, LinkedIn, Prezi, Slideshare, Skype,
being written and most are not enforceable as law e.g. Wordpress, and many mobile games like Farmville,
the legality of E-mail contact is still questionable, other Angry Birds etc.
problems include location laws between different 3. E-commerce
countries The traditional world of retail comprising of malls and
3. Trust, security and privacy-Many consumers have high street stores changed forever in the 90s when
remained hesitant to make purchase over the web from companies like Amazon emerged. Because they could

by Oteino B Page 18 of 34
save on expensive real estate costs, the prices offered This type of license is usually limited by time, territory,
on these stores were significantly lower. types of products, volume, etc. The other kind is for
Selling through e-commerce can include: certification, like the McAfee SECURE trustmarks used
 Retailing – e.g. Myntra for Internet websites.
 Marketplace – e.g. Snapdeal  Per Device/Server License – e.g. Microsoft
 Sharing Economy - AirBnB products
 Aggregators – e.g Taxi for Sure  Per Application instance – e.g. Adobe Photoshop
 Group buying – e.g. Groupon  Per Site License – e.g. Private cloud on internal
 Digital goods / downloads – e.g. iTunes infrastructure
 Virtual goods – e.g. Zynga  Patent Licensing – e.g. Qualcomm
 Training – e.g. Coursera, SimpliLearn 7. Selling Data
 Pay what you want – e.g. Instamojo (optional) High-quality, exclusive data is very valuable in the digital
 Auction commerce – e.g. eBay age. Many companies specialize in lead generation of
 Crowdsourced Services – e.g. Elance, oDesk potential customers and sell them to third parties. You
4. Affiliate Marketing don’t pay for services like Google, Twitter and Facebook.
Mostly followed by high-traffic blogs, this is a model But they aggregate high quantities of data about you
wherein the publisher signs up for affiliate programs and several millions like you and show you contextual
related to their service/content and convert their users advertisements based on this data. Which is why ‘you
to customers of their affiliates/advertisers. In most cases are not the customer, you are the product being sold.’
this involves a publisher earning a commission when a  User data – e.g. LinkedIn
user follows a link on their blog to another site and this  Search Data – e.g. Google
converts into the user buying something at the affiliate  Benchmarking services – e.g. Comscore
site.A recent example is several well-known bloggers  Market research – e.g. MarketsandMarkets
pushing out MotoG reviews and then linking to the The famous annual appeal from Jimmy Wales
Flipkart exclusive sale site for commissions. 8. Sponsorship/Donations
5. Subscription Model Many services are sponsored by government
Newspapers, Gym, Magazines – yes, all of them use a organizations and major funds if it directly helps them or
subscription model. So, it has been existent since long.In the world at large, for example, Khan Academy is funded
the digital domain, software, which was once dominated by the Gates Foundation and Google. Then there is the
by the licensing model, is slowly moving towards a Wikipedia model where the users are asked to willingly
subscription model. Generally, unlimited usage is donate small to large amounts of donation to help
offered, but a few have a specified cap above which they support the initiative. Many browser extensions and
charge a higher rate. Wordpress plugins etc. also follow this route.
The different sub-models are: 9. Build to sell (to Google, Facebook and others)
 Software as a Service (SaaS) – e.g. Freshdesk This might be counterintuitive and not the best of
 Service as a Service – e.g. PayU ‘revenue models’ because there is no revenue involved.
 Content as a Service But many companies have built traction over time and
 Infrastructure/Platform as a service – e.g. AWS, never worried about how they are going to make money,
Azure and have finally sold for big bucks to the internet giants,
 Membership Services – e.g. Amazon Prime for example, Instagram, Pinterest.
 Support and Maintenance – e.g. Red Hat Mobile and Gaming Revenue Models
 Paywall – e.g. ft.com, NYtimes  Paid App Downloads – e.g. WhatsApp
6. Licensing  In-app purchases – e.g. Candy Crush Saga,
Licensing could be for usage, which is the model for Temple Run
Intellectual Property (patents, copyrights, trademarks).  In-app subscriptions – e.g. NY Times app

by Oteino B Page 19 of 34
  Advertising – e.g. Flurry  Insecurity threats due to use of vulnerable networks
 Transactions – e.g. Airtel Money and systems
 Freemium – e.g. Zynga  Control and management of systems might be a
 Subscription -- e.g. World of Warcraft challenge
 Premium – e.g. xBox games
 Downloadable Content – e.g. Call of Duty OUTSOURCING
 Ad-supported The process of turning over an organization’s computer
center operations, telecommunications networks or
E-GOVERNMENT applications development to external vendors is called
This refers to the application of electronic means in the outsourcing
interaction between government and citizens, The Benefits of Outsourcing
government and businesses as well as in internal 1. Take advantage of the cost-advantages
government operations to simplify and improve Outsourcing can give you access to cost-effective
democratic and business aspects of governance services. Getting access to high-quality services at a
Areas where E-government is beneficial and cost-effective price is the biggest benefit that you can
applicable get while outsourcing.
 Online license applications and renewals 2. Save Big
 Online renewal of car tags and vehicles registration One of the benefits of outsourcing is that you can save
 Payment of property taxes online on every aspect of your business and increase your
 Payment of utility bills online profits. When you outsource, you can save on time,
 Registering and voting online effort, infrastructure and manpower.
 Downloading of forms on websites e.g. passport 3. Get access to specialized services
application By outsourcing you can get expert and skilled services.
 Submitting forms online e.g. ID application This benefit of outsourcing has been the key reason why
 Online help with filling forms e.g. permits, birth and several outsourcers opt for outsourcing.
death certificates 4. Concentrate more on your core business
 Online repository of public information such as laws, One of the benefits of outsourcing is that your
rules and regulations organization will be free to concentrate on your core
 Online polls and questionnaire business. By outsourcing all your non-core functions,
 Online discussion groups to facilitate democratic your employees can be put to better use and you will be
exchange of Ideas able to see a huge growth in your core business.
Advantages of E-government 7. Improved customer satisfaction
 It reduces government expenditure as a result of With timely deliveries and high-quality services you can
reduced work force impress your customers. Outsourcing can help you
 Cheaper and better services for citizen of a nation benefit from increased customer satisfaction and your
 Round the clock services i.e. services can be customers will remain loyal to your organization.
provided anytime 8. Increased efficiency
 Services can easily and cheaply reach Another benefit of outsourcing is increased efficiency.
geographically dispersed areas Your non-core business functions will be performed
Disadvantages of E-government efficiently by your outsourcing partner, while your core
 Expensive to implement and establish due to very functions can be efficiently carried out in-house.
high costs to be incurred in the installation of ICT Disadvantages of Outsourcing
hardware and software · Loss of managerial control, because it is more difficult
 Limited access to only those with the knowledge to to manage outside service providers than managing
use the systems one’s own employees working possibly in the same

by Oteino B Page 20 of 34
building. Develop ways to differentiate products and services from
· Often the hidden costs are difficult to calculate or competitors. Reduce the differentiation advantages of
prepare for. These include legal costs related to putting competitors.
together a contract between two companies and the Innovation Strategy -
time spent to coordinating the contract. Find new ways of doing business:
· Threat to security and confidentiality. If your company Develop new products & services
is outsourcing processes like payroll, medical Enter new markets or marketing segments.
transcriptions or other confidential information, a Establish new business alliances
company must be very careful in choosing which process Find new ways of producing products/services
it wants to outsource and to which provider. Find new ways of distributing products/services
· A possible loss of flexibility in reacting to changing Growth Strategies
business conditions, lack of internal and external Significantly expand the companys capacity to produce
customer focus and sharing cost savings may also be a goods and services.
disadvantage of outsourcing. Expand into global markets
· Unfavorable contract lengths, loss of competitive edge, Diversify into new products and services
problems in contract renewal, and contractual Integrate into related products and services.
misunderstandings. Alliance Strategies
• The company that outsourcers can get into serious Establish new business linkages and alliances with
trouble if the service provider refuses to provide customers, suppliers, competitors, consultants and other
business due to bankruptcy, lack of funds, labor etc companies (mergers, acquisitions, joint ventures,
• Outsourcing requires the control of the process being forming virtual companies, etc.).
outsourced by transferred to the service provider. Thus
the company may lose control over its process INFORMATION SYSTEMS SECURITY
Introduction
It is very difficult to secure computer systems due to
MICHAEL PORTER’S FIVE FORCES MODEL
their complexity and cost. The security of computer
According to Michael Porter, a firm can survive and
system is further complicated by the need to balance
succeed in the long run if it successfully develops
between security and productivity, since too strict
strategies to confront five competitive forces that
security measures curtail productivity.
shape the structure of competition in its industry. These
The other important issue is that to be viable security
include:
policy and framework should be duly implemented and
1. Rivalry of competitors within its industry
enforced in the organization. Employees, system
2. Threat of new entrants
auditors, managers and other users who have either
3. Threat of substitutes
direct or indirect access to computer systems are likely
4. Bargaining power of customers
to be the major perpetrators of computer security
5. Bargaining power of suppliers
attacks. Employees and other stakeholders have to be
A variety of competitive strategies can be developed
monitored and motivated to actively take the initiative to
to help a firm confront these competitive forces.
protect and secure computer systems.
Cost Leadership Strategy -
Computer systems are difficult to protect for a number of
Become a low cost producer of products and services
reasons that include:-
Find ways to help suppliers or customers reduce their
 The complexity of computerized systems
costs
 The difficulty of detecting changes to computerized
Increase the costs of competitors.
systems
Differentiation Strategy

by Oteino B Page 21 of 34
 The many possible security threats and attacks such interfering with information or flow of information.
as virus attack, hacking, malware, password attack He/she does not interfere with operation. Message
e.t.c content and message traffic is what is observed.
 The prohibitive cost of securing computerized Active attacks - involves more than message or
systems information observation. There is interference of traffic
 The many access points in computerized systems or message flow and may involve modification, deletion
especially networked system increase vulnerability or destruction.
Properties of a secure system There are many ways in which computer systems can be
Authentication – Identify and ensure that users are attacked and threatened. This include
who they purport to be. It requires that users provide 1. Virus attack – A virus is an illegitimate program
usernames and passwords. capable replicating very fast and infecting and
Authorization – Once users have been authenticated damaging computer programs and data. A time
they are allowed to access all or part of the computer bomb is a virus program whose damage is triggered
system depending on who they are. The system should by the attainment of a certain specific time.
provide different rights and privileges to different 2. Theft – Stealing computer hardware and software
categories of users. For example systems administrators and other devices such as camera, printers, e.t.c
are given unlimited access to computerized systems 3. Password attack –This is where someone try to
unlike normal users who are have limited access figure out your password and use it to illegally
Confidentiality - Protect information value and access computer systems without your authority for
preserve the confidentiality of sensitive data. malicious intentions.
Information should not be disclosed without 4. Hacking – This is unauthorized access to computer
authorization. systems with malicious intentions. Crackers also
Integrity - Ensure the accuracy and reliability of the illegally access computer systems but not with
information stored on the computer systems. malicious intention however they can cause damage
Information should not be altered without authorization. and heavy losses just like hackers
Communication channels should relay messages in a 5. Malware – Targets organizations connected to the
secure manner to ensure that integrity. Internet. Cyber vandals use data flowing through the
Availability - Ensure the continued of the information Internet to transmit computer viruses, which disable
system and all its assets to legitimate users at an the computers they "infect".
acceptable level of quality of service. Any event that 6. Spyware –They are software routines that travel in
degrades performance or quality and of a system affects the network with capability to intercept confidential
availability information that is conveyed in such networks
Legislation - Ensure conformity to laws, regulations and 7. Spamming - usually targets organizations
standards connected to the Internet. Marketers send out
Security refers to the policies, procedures, and technical unsolicited mass e-mail to recipients who have not
measures used to prevent unauthorized access, requested the information.
alteration, theft, or physical damage to information 8. Jamming - Targets organizations connected to the
systems. Security can be promoted with an array of Internet. Jammers use software routines to tie up the
techniques and tools to safeguard computer hardware, computer hosting a website so that legitimate users
software, communications networks, and data. can't access the site.
A security attack is the act or attempt to exploit 9. Sniffing - Targets organizations linked to the
vulnerability in a system. Security controls are the Internet. Sniffing, a form of eavesdropping, involves
mechanisms used to control an attack. Attacks can be placing a piece of software to interpret information
classified into active and passive attacks. passing from a user to the computers hosting a
Passive attacks - attacker observes information without

by Oteino B Page 22 of 34
 website. This information can include credit card system and provision of services. These can involve
numbers and other confidential data. acts such as cutting cables, interfering with power
10. Phishing – It is a criminal and fraudulent process of supply, pouring water on the server e.t.c.
attempting to acquire sensitive information such as 19. Salami slicing – It involve taking small but
user names, passwords, and credit user details by insignificant sum of money from many people or
sending e-mails and pop up advertisement that business transactions. If the money is accumulated it
entice users to provide such information. becomes significant and of high value.
11. Spoofing - Targets organizations linked to the 20. Fraud – Committing financial misappropriation using
Internet Spoolers fraudulently misrepresent computerized and electronic systems for personal
themselves as other organizations, setting up false gains.
websites where they can collect confidential 21. Piggy backing – It is the act following an authorized
information from unsuspecting visitors to the site. user through a secured door or electronically
12. Eavesdropping / Tapping – It is intercepting attaching to a telecommunication link to intercept
electronic transmission as they travel from one point and possibly alter transmission in order to gain
to another. Espionage mostly involves spying with a access to computer resources.
view to obtain confidential data and information. 22. Piracy – It is the illegal act of copying, reproducing,
13. Denial of service attack - In the denial of service and distributing software programs without
attack, the hacker flooded the server with requests authority. Software pirates download software
to connect to other servers that did not exist. The programs from the internet or get the software from
server would try to establish connections with the other users and crack the product key which allows
nonexistent servers and wait for a response while them to use the software free without purchasing it.
being flooded with thousands of other bogus con- 23. Worms – It is like a virus program however it does
nection requests. This caused the server to deny not damage computer files and programs. The
service to legitimate users because it was worms have ability to replicate very fast and take up
overwhelmed trying to handle the bogus requests any available storage space and transmission space
14. Cyber terrorism – It is perpetuating acts of preventing users from saving data in computer
terrorism using computers and internet resources. It systems or even be able to transmit data from one
can involve sending threatening messages and point to another by clogging transmission networks.
posting scary videos and pictures of the internet. 24. Vandalism – Disrupting telecommunication
15. Identity theft / Masquerading – It is assuming transmission by vandalizing cables and power
somebody’s identity by falsifying information, transmissions.
profiles or stealing their passwords and user names. 25. Equipment failure – Hardware system and other
It is usually done for malicious intention and to peripheral devices fail due to fault in their systems.
fraudulently obtain favours and information about 26. Data diddling – It is also called data corruption. It
the person. involves changing and altering data without
16. Errors – Errors are either intentional or authority and for malicious intentions and personal
unintentional. They are due to mistakes, lack of gains.
knowledge and skills. Errors can be caused by
hardware failure, software faults, or people actions. CREATING A CONTROL ENVIRONMENT
17. Natural disaster –These are natural calamities To minimize errors, disasters, interruptions of service,
such as floods, earthquakes, strong winds, wild fires computer crimes, and breaches of security, special
e.t.c that are caused by situation beyond the control policies and procedures must be incorporated into the
of human beings. design and implementation of information systems. The
18. Sabotage – It is a criminal activity that involves combination of manual and automated measures that
affecting the normal operation of the computer safeguard information systems and ensure that they

by Oteino B Page 23 of 34
perform according to management standards is termed 11. Alarm systems — should be linked to inactive entry
controls. Controls consist of all the methods, policies, points, motion detectors and the reverse flow of enter
and organizational procedures that ensure the safety of or exit only doors.
the organization's assets, the accuracy and reliability of 12. Controlled single entry point A controlled single
its accounting records, and operational adherence to entry point monitored by a receptionist should be used
management standards. by all incoming personnel.
Virus protection
Physical security procedures that may be  Signs that the computer has virus
adopted:  The computer performance and speed suddenly
1. Bolting door locks — These require the traditional degrades
metal key to gain entry. The key should be stamped 'Do  Size of the file increase and decrease
not duplicate.'  The computer suddenly reboots or hangs
2. Combination door locks — These utilize a numeric  The computer posts funny or unfamiliar messages on
keypad or dial to gain entry. The combination should be the screen
changed at regular intervals or whenever an employee  A message or alert from the antivirus program
with access is transferred, fired or subject to disciplinary Sources of computer virus
action.  Infected storage devices such as flask disks
3. Electronic door locks — these utilize a magnetic or  Internet downloads and attachments
embedded chip-based plastic card key or token entered  Pirated computer software, games, music and video
into a sensor card reader to gain access. A special code  Hackers and malicious programmers
internally stored in the card or token is read by the  Device drivers that accompany hardware and
sensor device that activates the door locking peripheral devices
mechanism. Virus protection measures
4. Biometric door locks — use of individual’s unique  Use updated antivirus program to regularly scan
body features, such as voice, retina, fingerprint or computers and files. These are programs such as
signature, activates these locks. Internet Kaspersky, Norton, Mr Clean, Macfee.
5. Manual logging — All visitors should be required to  Use diskless workstations
sign a visitor's log indicating their name, company  Ensure that all programs are installed only by
represented, reason for visiting and person to see. authorized persons
Logging should be at the front reception desk and at the  Internet downloads and attachments must be
entrance to the computer room. scanned
6. Electronic logging — All access should be logged  Protect against password cracking
with unsuccessful attempts highlighted.  Maintain backup of important files and programs
7. Identification Badges (Photo Ids) — Badges should Protecting against password cracking
be worn and displayed by all personnel. Visitor badges The following principles can be observed when using
should be a different colour from employee badges for passwords
easy identification.  Do not use your background information such as
8. Video cameras — They should be located at name, date of birth, and anniversary as passwords.
strategic points and monitored by security guards.  Passwords should not be written down they should
9. Security guards — They could be used together - be memorisable
with video cameras for efficiency.  Use a mixture of letters, numbers and special
10. Controlled visitor access - All visitors should be symbols as passwords e.g. P@ssw0rd or xyz@2012
escorted by a responsible employee.  Passwords should be unique to an individual
 Periodically change your passwords

by Oteino B Page 24 of 34
 Once a password has been used do not use it again The organization should come up with security policies
i.e. recycle it and practices to ensure that these personnel are closely
 Allow users a maximum of 3 attempts when trying to monitored for any acts of security breaches.
use their passwords These policies can include:-
 Passwords should neither be too long or too short  Segregation of responsibility
around 5-8 characters  Training employee on security issue
Physical security measures  Periodic employee performance evaluation
 Bolting door locks – use of keys and padlocks  Job rotation
 Combination door locks – use of combination of  Secure termination policy
unique numbers to gain access  Good hiring practices
 Electronic door locks – use of swipe cards  Enforcement of security measures
 Biometric door locks – use of biological features to Encryption
gain access This is the process of scrambling data. It involves using
 Manual logging and electronic logging mathematical algorithm (Key) to change plaintext into
 Use of security personnel cipher text. Decryption involves changing back cipher
 Use of badges and uniforms text into plaintext. Encryption protects against data
 Escort agents corruption, password cracking, and Eavesdropping e.t.c
 CCTV cameras Encryption is based on mathematical algorithm usually
 Terminal locks called keys. The keys are used to decrypt and encrypt
Environmental control measures the data.
It includes measures such as Fire walls
 Use of fire extinguisher Firewall is generally placed between internal LANs and
 Use of fire and water detectors WANs and external networks such as the Internet. The
 Strategically locating the computer and server room firewall controls access to the organization's internal
 Using uninterruptible power supply networks by acting like a gatekeeper that examines
 Use of fire proof materials such as asbestos each user's credentials before they can access the
 Emergency power switch off network. The firewall identifies names, Internet Protocol
 Properly wiring and cabling ensuring that cables and (IP) addresses, applications, and other characteristics of
wires are placed in their panels and conduits incoming traffic. It checks this information against the
Logical access control measures access rules that have been programmed into the
 Use of usernames and passwords system by the network administrator.
 Firewalls The firewall prevents unauthorized communication into
 Encryption and out of the network, allowing the organization to
 Access rights and privileges enforce a security policy on traffic flowing between its
 Intrusion detection systems network and the Internet.
 Data classification and segregation
 Terminal usage constraints Digital signatures
Personnel issue on security Digital signatures and digital certificates help with
Most computer crimes and security breaches are done authentication. A digital signature is a digital code
by employees of the organization or with people who attached to an electronically transmitted message that is
have access to computer system like vendors, used to verify the origins and content of a message. It
outsourced employees, maintenance personnel, clients, provides a way to associate a message with the sender,
cleaners and security personnel. performing a similar to a written signature. For an
electronic signature to be legally binding in the court
someone must be able to verify that the signature

by Oteino B Page 25 of 34
actually belongs to whoever sent the data and that the which systems and business functions are most critical
data were not altered after being "signed." Digital to the company
certificates are data files used to establish the identity of
people and electronic assets for protection of online Importance of disaster management
transactions. A digital certificate system uses a trusted  To keep the business running uninterrupted after
third party known as a certificate authority (CA) to disaster
validate a user's identity. The digital certificate system  To protect assets and information against possible
would enable, for example, a credit card user and abuse and security threats
merchant to validate their digital certificates were issued  To develop a plan that will reduce risks and
by an authorized and trusted third party before uncertainty
exchange of data
Developing a disaster recovery plan
Intrusion detection systems  Assess the risk of particular disaster such as floods,
They represent fulltime monitoring tools that are placed power outages or terrorist attacks, occurring at your
at the most vulnerable point of an organization network specific company
to continually detect and deter intruders. They look for  Identify the most mission critical applications, the
known problems such as bad passwords or check to see files they use and where these files and applications
if important files have been removed and modified and are located
send warnings to the systems administrator.  Develop an action plan for handling mission critical
Some intrusion detection systems shut down sensitive applications such as using manual processes or
parts of a network if it receives unauthorized trap. running these applications at a safe location
 Outline responsibilities of individuals staff members
Contingency planning and procedures to follow during a disaster. including
A contingency is an unscheduled interruption of how to locate and communicate with the employees
computing services that requires measures outside the  Test the disaster recovery plan at least once a year
day to day routine operating procedures. A contingency  Make sure you have the backing and support of a
plan must provide for standby procedures to continue senior management to ensure compliance
operations, recovery procedures to correct the
breakdown arid personnel management policies for the INFORMATION SYSTEMS DEVELOPMENT
procedures. A systems analysis methodology provides a way to
Contents of a contingency plan include: tackle the development of each information system in a
• Definition of responsibilities. structured and detailed way. Typically, it dictates what
• Setting priorities. the main stages of the development are but also what
• Back-up and standby arrangements. steps should be done at each stage and what must be
• Communication with staff. completed before moving on to the next stage. It may
• Public relations. also define what is produced at each stage, how the user
• Risk assessment. should be involved in the development and in short,
provides a complete plan for the project. A methodology
DISASTER RECOVERY PLANNING usually consists of a collection of most of the following:
Disaster recovery planning devises plans for the  An underlying life-cycle model.
restoration of computing and communications services  Project stages and the steps that make up each
after they have been disrupted by an event such as an stage.
earthquake, flood, or terrorist attack. Business managers  Deliverables for each step/stage, the form of each
and information technology specialists need to work model/deliverable, and the techniques to be used to
together to determine what kind of plan is necessary and produce each deliverable.

by Oteino B Page 26 of 34
 A set of principles / decision guidelines, that allow a
project planner to construct a detailed method for System construction
each particular project — choices to determine which
steps and deliverables are appropriate, and the level System implementation
of detail/abstraction to take for each model.
Characteristics of a good development System review and maintenance
methodology PRELIMINARY STUDY
 Easy to understand and manage This is an initial investigation carried out to understand
 Flexible and adaptable the nature of existing system in the organization with a
 It should be an open methodology i.e. no restrictions view of defining requirements for the new system. It
on its use aims at identifying the following issues amongst others:
 It should reflect modern practices  Reasons for developing the new system.
 It should focus more on producing the product than  Defining the objectives and goals of the new system.
the process  Outlining the scope and boundaries of the new
Approaches to systems development system.
 Prototyping  Agreeing on initial requirements to be met by the
 Packaged based development new system.
 Waterfall model  Outlining the existing system, constraints and
 System Development life Cycle limitations.
 End user Computing At the end of preliminary study a document known as
project initiation document or terms of reference
REASONS FOR INFORMATION SYSTEMS document is produced. The terms of reference (TOR)
DEVELOPMENT document will have the following:
 To gain competitive edge. 1) Project title, names and any identification.
 To tap new technology and business opportunity. 2) Departments or organizational units involved in
 To improve business efficiency and effectiveness the system development.
 To reduce business costs 3) Goals and objectives of the new system.
 To correct a problem with the existing system. 4) Outline system requirements.
 To conform to new standards and legislative 5) Limitations, boundaries and constraints that
requirements. exist.
SYSTEMS DEVELOPMENT LIFE CYCLE SDLC 6) Define the system scope and boundaries.
This is a traditional system development methodology is 7) Staff involved in the system development and
no longer popular as it was in the late 70’s and early their roles.
80’s. SDLC consists of taking a large system FEASIBILITY STUDY
development process and breaking the process into This is an important system development stage since it
sequential stages done progressively one after the other is at this stage that we make decision to fully commit
until the final system is developed. It main stages ourselves into developing the system or not. It tries to
include assess the practicality, do ability, possibility and simply
Preliminary study feasibility of developing the new system.
The following are the areas feasibility study:
Feasibility study a) Technical Feasibility
b) Social Feasibility
System investigation c) Economical Feasibility
d) Legal Feasibility
System design e) Schedule Feasibility

by Oteino B Page 27 of 34
SYSTEM INVESTIGATION / FACT FINDING errors. Test data can be classified, historical & live test
In depth study of existing system to define requirement data.
of the new system. It involves activities that include – Types of tests
Fact Finding – Collection of data about the existing a) Module testing - test subprograms or small
system using questionnaires, interviews, observations components of the program called modules
and document sampling independently of each other.
Fact Recording - Document data in standard b) Integration testing - A number of modules can work
recording tools such as Decision trees and tables, together, when they are combined & tested its
Flowcharts, UML diagrams, Entity life History, Entity known as integration testing.
relationship diagrams, Data flow diagrams c) System testing - when all the modules are combined
Fact Analysis – that identifies important facts for together and tested as whole is called system
development of new system testing.
At the end of system investigation a statement of user d) Black box testing - It’s also known as functional
requirements is produced testing. It is concerned with testing only the inputs
SYSTEM DESIGN AND DEVELOPMENT and outputs received from the system. It doesn’t
This phase takes the requirements specification and test the internal working of the system.
converts it into a system design specification. e) White box testing it is also known as glass box
This involves the design of inputs, outputs, databases, testing or structural testing. It is concerned with
computer programs and user interfaces. The design testing the internal working of system.
phase is normally split into logical and physical design. f) Uses acceptance testing- it involves uses testing
Logical design concentrates on the business aspects of the system to ensure that it meets their expectations
the system and is theoretically independent of any and requirements
hardware or software.
Physical design takes the logical design specification and SYSTEM IMPLEMENTATION
applies it to the implementation environment. Implementation puts a system into practice and use
Most often the choice of programming language and i.e. it involves operationalizing a system by rolling out
database is already decided and these technologies are and installing the system and ensuring that the system
taken into account in physical design. works. A no. of activities are done during implementation
The system design specification contains all the detail and they includes
required for the system builders to construct the system. a) Testing
TYPES OF DESIGN b) Hardware and software acquisition
 Input Design c) Training
 Output Design d) File conversion
 Process Design e) Change over/Going live.
 File and database design
 Human-Computer Interface Design - REVIEW AND MAINTAINANCE
◦ Command-driven Interfaces Review-This is usually done some period after
◦ Menu-driven Interfaces implementation .The development staff, users, auditors,
◦ Graphical User Interfaces (GUI) management representatives etc will converge to carry
on honest assessment of the achievement of the new
TESTING system in the following areas:
Testing is the process of exercising a system with a view i) Has the new system achieved its requirements?
of finding errors. A good test has high probability of ii) Comparing actual and expected benefits.
finding errors. Test data is used to test system; this is iii) Assessing the effectiveness of in built
specially chosen data that has high probability of finding

by Oteino B Page 28 of 34
iv) Testing the nature of input and processing and tries to predict and correct system errors before they
output occur.
v) Cost benefit analysis of the new system. Replacive maintenance
vi) Performance of the new system. It is carried out on a system when a system becomes
Reasons for review expensive and difficult to maintain e.g. due to lack of
 To verify that the system installed meets user documentation, poor design, old age or obsolescence.
requirements.
 To provide feedback to development personnel. SDLC is suitable for large system projects that take long
 To justify adoption, continuation and termination of to develop. It is also suitable for projects which have
the new system. clearly defined requirements.
 To set priority for modifications that may be Advantages of SDLC
required.  The system development is broken down into
Maintenance will be an ongoing activity throughout the activities that are easy to manage, solve and control.
system life. It’s carried out to modify aspects of the new  In the stage, proper documentation is produced
system for the following reasons: resulting in well documented systems.
 Correct defects in the system as result of use  It possible to track development from one point to
 Adopt the system to the changing business another since each stage provides input to the other
environment stage
 Factor in new user requirements Disadvantages of SDLC
 Correct anomalies in the system documentation  It’s inflexible and cannot incorporate new
System maintenance improves systems adaptability and requirements easily.
flexibility however it’s important that a proper  The methodology focuses more on the process
mechanism is laid down to control maintenance rather than the product.
activities and to ensure that they are properly carried  It’s not suitable for web-based systems that
out. incorporate internet technology.
Type’s system maintenance  Most system development using SDLC are always
Corrective Maintenance over budget and beyond time
It is usually a change effected in a system in response to  A working system is availed later in the development
detected problem or error. It is objective is to ensure cycle deny user involvement
that the system remains functional. It basically involves
removal errors on the already newly developed system. SYSTEM DEVELOPMENT METHODOLOGIES
Example could be a failure in parts the system. A systems analysis methodology provides a way to
Perfective maintenance tackle the development of each information system in a
It is a change to perfect a system i.e. improve its structured and detailed way. Typically, it dictates what
performance in terms response time to user request or the main stages of the development are but also what
to amend a system interface to make a system more steps should be done at each stage and what must be
user friendly. completed before moving on to the next stage. It may
Adaptive maintenance also define what is produced at each stage, how the user
Involves changing a system to take adapt to changes in should be involved in the development and in short,
its functional environment. For example to make a provides a complete plan for the project. A methodology
system ETR compliant by changing it. usually consists of a collection of most of the following:
Preventive maintenance  An underlying life-cycle model.
It is a maintenance activity carried out to ensure that the  Project stages and the steps that make up each
system does not easily fail or have errors in the future. It stage.

by Oteino B Page 29 of 34
 Deliverables for each step/stage, the form of each organisation requirement.
model/deliverable, and the techniques to be used to 2. The best package may not be compatible / functional
produce each deliverable. with existing systems.
 A set of principles / decision guidelines, that allow a 3. The organisation is in the hands of the package
project planner to construct a detailed method for supplier in terms of getting changes and
each particular project — choices to determine which enhancement made.
steps and deliverables are appropriate, and the level 4. It doesn't provide competitive advantage since even
of detail/abstraction to take for each model. competitors can acquire the software.

Characteristics of a good development

methodology
 Easy to understand and manage
 Flexible and adaptable END USER COMPUTING
 It should be an open methodology i.e. no restrictions End-user computing happens when computer-
on its use literate users develop their own systems. E.g. a faculty
 It should reflect modern practices in a university develops its own system.
 It should focus more on producing the product than Advantages include:
the process  Reduce development backlog
Approaches to systems development  Reduce time lag in development
 Spiral Model  Creativity and expertise of end users is put to use;
 Object-Oriented development  Users’ needs are met in exactly the way they want;
 Incremental Model  Increases user awareness of IS
 Web-based development  Relieves work load of IT professional
 Prototyping Disadvantages include:
 Packaged based development  Duplication and waste of resources
 Structured systems analysis and design SSADM  Increased costs
 Waterfall model  Questionable quality
 Joint application development JAD  Data integrity concerns
 Resources are not used effectively.
PACKAGED BASED SOFTWARE DEVELOPMENT  Hardware and software might be incompatible
Sometimes developing a system means finding the right between departments.
software package that can readily be implemented from  Systems can become badly designed and even
software vendors. This methodology simply involves worse documented.
purchasing the right equipment i.e. hardware &  Threats to data, as controls to who may access it or
telecommunication and installing readymade software modify it
that best suits the organisations new systems needs.
Advantages of this model PROTOTYPING
1. Low development costs. In the method, a small working model of a system is
2. Shorten system implementation system cycle. developed within a short time and using limited
3. Proven reliability and performance benchmark resources. It makes extensive use of 4gls and case tools
4. Requires less technical development staff to speed development. Users get a glimpse of the
5. Future software updates provided by the software expected system within a short period of time and can
vendors. provide their views and recommendations.
Disadvantages There are two types of prototypes:
1. The software package may not be a perfect fit for

by Oteino B Page 30 of 34
 Evolutionary prototype – In this method the planning, purchasing, production control, inventory
prototype is developed on an incremental basis, control, interaction with suppliers and customer, delivery
each time adding additional functionality until it of customer service and keeping track of orders, to
evolves to be the final system. share common data and practices across the entire
 Throw-away prototype – the prototype doesn’t enterprise, and to produce and access information in a
evolve to become the final system instead, it only real-time environment. ERP enables decision-makers to
used to clarify and understand the system have an enterprise-wide view of the information they
requirements then it is discarded. need in a timely, reliable and consistent fashion. ERP
Advantages of Prototyping applications market grew to $25.4 billion in 2005, and
 It is a suitable methodology where the requirements will reach $29 billion in 2006. Over the next five years,
of the system are difficult to identify. the market will grow at an average of 10%.
 There’s extensive user involvement resulting in more
acceptable systems that meet user requirements. Advantages of ERP

 A quick working model of the system is developed to With ERP to automate processes, the benefits are as
show the systems capabilities to user. follows:
 It encourages innovative and flexible designs.  Increase inventory turns
 Training is shortened as users are exposed to the  Increase inventory accuracy rate
system early in advance.  Reduce inventory costs
 Improve customer service
Disadvantages of prototyping  Reduce setup times
 Prototyped systems are poorly documented.  Reduce paper work.
 The prototype might give user a wrong perception of  Provide a unified customer database usable by
the final system e.g. the prototype might be easy to all applications
use and fast but the final system might have more  Provide greater and effective control on account.
complicated screens with low performance level.  Faster response and follow ups to customers
 Prototypes may not have sufficient checks and  Improves supply demand linkage with remote
balances incorporated i.e they tend to be poorly locations and branches in different locations
managed.  Higher quality, less re-work
 They are poorly tested  Timely revenue collection, improved cash flow

Risks of ERP
Stages in prototyping
 Develop a prototype There is 70% percent of all ERP projects fail to be fully
 Evaluate prototype with the input of users implemented, even after three years. Few companies
 If prototype is satisfactory accept are making full use of their ERP systems, despite the
 Otherwise revise the prototype with input of users high cost of the software and the length of time an
 If prototype is satisfactory implementation can take. Once installed, more than 50%
 Adopt the prototype of companies said it was hard to make changes to ERP
software in order to meet any changes in business
ENTERPRISE RESOURCE PLANNING -ERP processes or requirements. More than 50% of the
Enterprise Resource Planning (ERP) is software that companies did not measure their return on investment
attempts to integrate all departments and functions from business applications. The failure rates for ERP
across a company onto a single computer system that projects are relatively high and could lead to the
can serve all those departments’ particular needs. ERP bankruptcy of the corporation.
allows a company to automate and integrate the
majority of its business processes, including product

by Oteino B Page 31 of 34
Challenges of ERP Implementation for the consequences of information systems, setting

 Customization Related Challenges standards to safeguard system quality that protect the

 Redesigning Business Processes safety of the individual and society, and preserving

 Cost of upgrades/updates values and institutions considered essential to the

 Training quality of life in an information society.

 Little flexibility in adapting to business processes Five Moral Dimensions of the Information Age

 High integration costs The major ethical, social, and political issues raised by

 High maintenance costs information systems include the following moral

 Lengthy or incomplete integrations dimensions:

Information rights and obligations. What information
Critical Success Factors of Implementing ERP rights do individuals and organizations possess with

Critical factors to ERP implementation success: respect to information about themselves? What can they

 ERP teamwork and composition; protect? What obligations do individuals and

 Change management program and culture; organizations have concerning this information?

 Top management support; Property rights and obligations. How will traditional
 Business plan and vision; ' intellectual property rights be protected in a digital

 Business process re-engineering and minimum society in which tracing and accounting for ownership

customization; are difficult and ignoring such property rights is so easy?

 Effective communication; Accountability and control. Who can and will be held

 Project management; accountable and liable for the harm done to individual

 Software development, testing, and and collective information and property rights?

troubleshooting; System quality. What standards of data and system

 Monitoring and evaluation of performance; quality should we demand to protect individual rights

 Project champion; and and the safety of society?

 Appropriate business and information technology Quality of life. What values should be preserved in an

legacy systems. information-and knowledge-based society? Which

institutions should we protect from violation? Which

ETHICS cultural values and practices are supported by the new

Ethics refers to the principles of right and wrong that information technology?

individuals, acting as free moral agents, use to

make choices to guide their behaviors.
Information systems raise new ethical questions
for both individuals and societies because they
create opportunities for intense social change,
and thus threaten existing distributions of power, Key Technology Trends That Raise Ethical Issues
money, rights, and obligations.
Ethical issues in information systems have been given
new urgency by the rise of the Internet and electronic The doubling of computing power every 18 months has
commerce. Internet and digital firm technologies make it made it possible for most organizations to use
easier than ever to assemble, integrate, and distribute information systems for their core production processes.
information, unleashing new concerns about the As a result, our dependence on systems and our
appropriate use of customer information, the protection vulnerability to system errors and poor data quality have
of personal privacy, and the protection of intellectual increased.
property. Other pressing ethical issues raised by Advances in data storage techniques and rapidly
information systems include establishing accountability declining storage costs have been responsible for the
by Oteino B Page 32 of 34
multiplying databases on individuals—employees, Ethical choices are decisions made by individuals who
customers, and potential customers—maintained by are responsible for the consequences of their actions.
private and public organizations. These advances in data Responsibility is a key element of ethical action.
storage have made the routine violation of individual Responsibility means that you accept the potential
privacy both cheap and effective. Already massive data costs, duties, and obligations for the decisions you
storage systems are cheap enough for regional and even make. Accountability is a feature of systems and social
local retailing firms to use in identifying customers. institutions: It means that mechanisms are in place to
Advances in data analysis techniques for large pools of determine who took responsible action, who is
data are a third technological trend that heightens responsible. Systems and institutions in which it is
ethical concerns because companies and government impossible to find out who took what action are
agencies are able to find out much detailed personal inherently incapable of ethical analysis or ethical action.
information about individuals. With contemporary data Liability extends the concept of responsibility further to
management tools companies can assemble and the area of laws. Liability is a feature of political systems
combine the myriad pieces of information about you in which a body of laws is in place that permits
stored on computers much more easily than in the past. individuals to recover the damages done to them by
Think of all the ways you generate computer information other actors, systems, or organizations.
about yourself—credit card purchases, telephone calls, Due process is a related feature of law-governed
magazine subscriptions, video rentals, mail-order societies and is a process in which laws are known and
purchases, banking records, and local, state, and federal understood and there is an ability to appeal to higher
government records (including court and police records). authorities to ensure that the laws are applied correctly.
Put together and mined properly, this information could
reveal not only your credit information but also your Information Rights: Privacy and Freedom in the
driving habits, your tastes, your associations, and your Internet Age
political interests. Companies with products to sell Privacy is the claim of individuals to be left alone, free
purchase relevant information from these sources to from surveillance or interference from other individuals
help them more finely target their marketing campaigns. or organizations, including the state. Claims to privacy

The use of computers to combine data from multiple are also involved at the workplace: Millions of employees
sources and create electronic dossiers of detailed are subject to electronic and other forms of high-tech
information on individuals is called profiling. surveillance (Ball, 2001). Information technology and
ETHICS IN AN INFORMATION SOCIETY systems threaten individual claims to privacy by making
Ethics is a concern of humans who have freedom of the invasion of privacy cheap, profitable, and effective.
choice. Ethics is about individual choice: When faced
with alternative courses of action, what is the correct Federal Trade Commission Fair Information
moral choice? What are the main features of ethical Practices Principles
choice?
Basic Concepts: Responsibility, Accountability,
and Liability Property Rights: Intellectual Property
Contemporary information systems have severely
challenged existing law and social practices that protect
by Oteino B Page 33 of 34
private intellectual property. Intellectual property is congressional intent behind patent law was to ensure
considered to be intangible property created by that inventors of new machines, devices, or methods
individuals or corporations. Information technology has receive the full financial and other rewards of their labor
made it difficult to protect intellectual property because and yet still make widespread use of the invention
computerized information can be so easily copied or possible by providing detailed diagrams for those
distributed on networks. Intellectual property is subject wishing to use the idea under license from the patent’s
to a variety of protections under three different legal owner. The granting of a patent is determined by the
traditions: trade secret, copyright, and patent law. Patent Office and relies on court rulings. The key
TRADE SECRETS concepts in patent law are originality, novelty, and
Any intellectual work product—a formula, device, invention. The strength of patent protection is that it
pattern, or compilation of data used for a business grants a monopoly on the underlying concepts and ideas
purpose can be classified as a trade secret, provided it is of software. The difficulty is passing stringent criteria of
not based on information in the public domain. non obviousness (e.g., the work must reflect some
Protections for trade secrets vary from state to state. In special understanding and contribution), originality, and
general, trade secret laws grant a monopoly on the ideas novelty, as well as years of waiting to receive protection.
behind a work product, but it can be a very tenuous
monopoly. Software that contains novel or unique Reading list
elements, procedures, or compilations can be included Global Information system and Business Value chain
as a trade secret. Trade secret law protects the actual model…
ideas in a work product, not only their manifestation. To
make this claim, the creator or owner must take care to
bind employees and customers with nondisclosure
agreements and to prevent the secret from falling into
the public domain.
The limitation of trade secret protection is that although
virtually all software programs of any complexity contain
unique elements of some sort, it is difficult to prevent
the ideas in the work from falling into the public domain
when the software is widely distributed.
COPYRIGHT
Copyright is a statutory grant that protects creators of
intellectual property from having their work copied by
others for any purpose during the life of the author plus
an additional 70 years after the author’s death. For
corporate-owned works, copyright protection lasts for 95
years after their initial creation. Congress has extended
copyright protection to books, periodicals, lectures,
dramas, musical compositions, maps, drawings, artwork
of any kind, and motion pictures. The intent behind
copyright laws has been to encourage creativity and
authorship by ensuring that creative people receive the
financial and other benefits of their work.
PATENTS
A patent grants the owner an exclusive monopoly on the
ideas behind an invention for 20 years. The

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