ADMINISTRATIVE MANAGEMENT

ADM15W2
Lecture notes 3 2024
MR M. Zoko
Chapter 2: Information Systems

Learning outcomes
After you have studied this chapter, you should be able to:
i.Explain the systems concept.
ii.List the objectives of a system.
iii.Identify the characteristics of an efficient information system.
iv.Explain why organizations would modify an existing system; describe how to
implement new information systems.
v.Identify different types of information systems in an organization.

vi.Explain the integration of systems within an organization .

 Introduction

Managers in an organization, including the administrative manager, are

required to manage the information resources available to them effectively and
efficiently when completing their duties.

The implementation of an information system creates an environment that

makes it possible for the administrative manager to efficiently manage the
various sources of information and utilize the collected information to reach the
required administrative objectives.

Information is sourced both internally and externally.

Internal information is collected from various organizational functions,

departments, and management levels. As the whole organization is a potential
source of information, all employees (from operational to senior management

External information can be collected from suppliers, customers, industry

trends, and media reports.
 Defining a system

A system is composed of various components and procedures working

together to achieve a given goal within an identified boundary (or border).
The components are the physical attributes of a system, while procedures
consist of the actions (or methods) needed to complete various work processes
associated with that system.
Any given system may comprise one or more subsystems, which can be broken
down until you reach a single system that cannot be broken down any further.
Subsystems are functional components of a larger system. A subsystem can
also be regarded as a system in its own right. It just depends on the relevant
context.
For example, the Department of Home Affairs records details about citizens
within the Home Affairs system, but this information is broken down into smaller
parts that record anything from births to deaths to marriage registrations. Each of
these can be considered as a separate subsystem of the overall Home Affairs
citizen record system that relies on the completion of the relevant procedures.
 Defining a system
Procedures are a series of related and consecutive steps that must be followed to enable
someone or a system to perform a specific task in a routine manner. For example, the
application for an identity card issued by the Department of Home Affairs.
A method is the manner or way in which activities or tasks are performed. For example,
fingerprints are now captured using biometric technology, instead of paper and ink.
 Let’s take organization for a more detailed example to explain the definitions above.
Organizations as a whole can be seen as a system that is made up of various functional
units (that is, administration, marketing, production, purchasing and supply management,
human resources (HR), finance, and public relations).
Each of these functional units (or departments/sections/divisions) can be seen as a
subsystem of the organization.
Within these subsystems there are certain procedures and methods that must be followed
to ensure the effective and efficient functioning of that section. For example, in the mailroom
certain procedures must be followed when dealing with incoming mail. These procedures may
include:
receiving mail
opening mail
sorting the mail according to its destination
date-stamping mail; distributing the mail.
 Defining a system
Each of the above procedures consists of specific methods to execute each
step. These probably differ from one organisation to the next. The method for
receiving and opening mail could be the following:

i.Receive the mail from the courier service before 10:00 every morning.

ii.Separate confidential and personal mail for delivery.

iii.Open the rest of the mail.

System can be closed or open:

The administrative function needs to operate as an open system within the

organisation (its environment), as it is interrelated with all the functions of the
organisation as well as the external environment (that is, outside the
organisation).

A closed system is self-sufficient and can exist independently of a particular

environment (that is, it does not need any inputs or outputs).
 Objectives of the system
The following are some of the objectives for developing and using a system:

i.Maximising the efficient use of organisational resources.

ii.Enhancing operating efficiency and productivity (this includes saving time and
money).
iii.Achieving the objectives of the organisation.
iv.Practically managing the important details of the business.
v.Facilitating the operation of all the functions of the organisation.
 Elements of general system
All general systems consist of the following elements:
i.Input: In any system there will be an input of some sort. It could be data, information or any other
resource. An input can also include the staff executing the tasks as well as the equipment needed for the
tasks.

ii.Processing: The input or data gathered has to be calculated, analysed, classified,

counted, grouped, sorted, compared, evaluated, summarised or prepared as graphs to be
considered useful information. This converts inputs to output.

iii.Storage: Once the data is processed into useful information it needs to be stored until
needed by decision-makers. Today, information is mostly stored digitally.

iv.Output: Processing is done in a certain manner and produces a specific outcome called
the output. The output has to be in the required form and of the specified quality to meet
the needs of the user.

v.Feedback: There is usually some mechanism in a general system to provide feedback.

Feedback tells us how the system is performing. Output, for example, could be adjusted,
corrected or refined.

vi.Control involves monitoring and evaluating feedback to determine whether a system is

doing what it should be doing.
 Elements of general system
Information systems consist mostly of the following basic resources that work
together in producing an output such as information:

Data: This is the raw facts that form the information part of the information
system.

Hardware: These are all the physical devices and materials used in information
processing.

Software: These include all sets of information processing instructions, programs

for computer instructions and procedures for human instruction.

People: As the most important part of the system, we find users (end users or
clients) and information professionals who develop, implement, operate, and
maintain information systems.

Procedures: Procedures are to people what software is to hardware. These are

the rules, descriptions, and instructions for how things are done.

Communication: This refers to the digital connectivity between hardware

components and devices for them to be able to share data and information.
 The characteristics of an efficient information system
As we know, the aim of the administrative function is to collect, process, store,
and distribute meaningful information to decision-makers and managers to
enable them to execute their tasks.
There are certain factors (external to the system itself) that are considered
essential to the success of a system. These are:

i.The technical quality (or current technological relevance) of the system.

ii.The participation and involvement of users in the system design.
iii.The capability and skill levels of the users; and
iv.The support from top management.
 The characteristics of an efficient information system
An effective information system should satisfy certain requirements. It must supply
decision-makers with information that is new and relevant.
To provide information that satisfies these requirements, the information system itself
must have the following characteristics:
i.The output must facilitate decision-making
ii.Data must be processed efficiently.
iii.Data must be managed effectively.
iv.The information system must be flexible to accommodate special or unusual
circumstances.
v.The information system must be adaptable to accommodate any changes that arise
as the needs of the organization change or if there is new technology available.
vi.The information system should be systematic and logical in the way that it
processes information.
vii.Interaction between components of the information system needs to be properly
organized and coordinated.
viii.The information system must be user-friendly so that the tasks can be performed
effectively and efficiently. It should be as simple as circumstances allow.
 The implementation and modification of information systems
If an organization has an information system, must be managed. If the current information
system is out of date, must be modified to meet the current needs or retired (replaced) if it
can no longer add value.
A system is usually changed when it has lost its competitiveness or when it does not meet
the needs of the business anymore.
Once the need for an information system has been identified, the planning and development
thereof will follow.
There are many different steps and methods that can be followed to implement a new
system. For the purpose of this chapter, we will use the following steps to develop an
information system:
i.Analysis

ii.Feasibility study

iii.Design

iv.Testing

v.Implementation

vi.Documentation

vii.Maintenance and evaluation.

 The implementation and modification of information systems
Step 1: Analysis

The first step is to investigate whether there is a need for an information system.
investigation attempts to find answers to the following questions:

i.What primary problems should the new system solve?

ii.What opportunities might a new or enhanced system provide?

iii.What new hardware, software, databases, telecommunications, personnel, or

procedures will improve an existing system or are required in a new system?

iv.What are the potential costs (variable and fixed)?

v.What are the associated risks?

 The implementation and modification of information systems

Step 2: Feasibility study

The feasibility study step can be done as a separate step but is often part of the analysis
step. Its purpose is to determine whether developing the system will improve operations and
add value:

i.Technical feasibility: Does the organization have the necessary hardware, software, and
telecommunications required to build and implement the system?

ii.Economic feasibility: Will the cost of the system provide a return on investment?

iii.Operational feasibility: Will the system meet the purpose for which it is intended?

iv.Legal feasibility: Will the system meet the legal requirements of the industry/ country?

v.Schedule feasibility: Can the project realistically be finished given the available time and
business need?

Once management accepts that the system will be feasible, a project team is established
that will develop the system until it is ready for delivery. Such a team usually includes the
following people: system analysts, programmers, and representatives from the departments
that will form part of the system.
 The implementation and modification of information systems
Step 3: Design

The requirements determined in Steps 1 and 2 will assist the development team with
designing the system. This is usually done on paper, and the actual system is built
(physical design). The design process will consider the following areas as part of the
development of the new system:

Inputs: This includes the procedures used to process the input, the type of data
required, the amount of data, where it will be collected from, and how the data will be
entered into the system.

Outputs: This includes the need and form of output required, the output files that will
capture the processed data, as well as the files that will record input by all the other
users of the system.

Hardware: This is the technology, including communication technology, suited for the
system.

Software: Packages satisfying the need, including databases and word processing.

Construction: Programmers design programs to facilitate the input, processing, and

output of the system.
 The implementation and modification of information systems
STEP 4: TESTING:

Once the developers have a working system, it needs to be tested to ensure that it is
operating as per the organization’s needs.

The process of system testing is ongoing from the very beginning of the development
process.

The developers need to check that all the parts of the system work together. Usually,
a system is tested in a testing environment before it is released into a production
environment. This is to ensure that any coding problems in the system can be rectified.

Therefore, a system needs to be tested before being used to make sure it does what
it is supposed to do.

The organization will test the system with simulated real-world data.

They will also input incorrect data on purpose to measure the output, processing
times, and quality.

Any errors that arise will be corrected before the information system is implemented
in the production environment.
 The implementation and modification of information systems

Step 5: Implementation

If the current system is still in operation, then you need to decide if you are going to
stop that operation and introduce the new system immediately or whether you are
going to run the two systems simultaneously.

This is referred to as the changeover process.

If the system to be replaced is critical (for example, the organization’s financial
system), the new and old systems will be run together for a period of time so that the
output from the two systems can be compared.

The data in the current system: There will be a large amount of time spent on
transferring the data in the existing system into the new one

The acceptance of the users: The users need to be trained to use the new system

The changes in work processes: When changing from an old to a new system,
productivity would probably go down initially and mistakes could occur due to the new
processes that have to be followed
 The implementation and modification of information systems
Step 6: Documentation

Documentation is done throughout the development of the system.

There are user manuals for the users and technical documentation for the IT analysts/ programmers
who manage and maintain the system.

 User manuals, for example, contain information about methods and procedures for working with
the system.

This documentation should also provide detailed help to the users, which is now often found online.

 Technical documentation is important as it will be difficult for those maintaining the new system to
do so without reference material on how everything works.

Step 7: Maintenance and evaluation

Any system needs maintenance, and this consists of addressing problems as they arise.

This may include user problems as well as changes to the system itself.

To assist users, a help-desk is often provided.

The system is also evaluated from time to time to determine whether it is still meeting the needs of the organization

Needs to be upgraded or retired and replaced with a new system.

 Different types of information systems

Transaction processing systems (TPSs)

These basic business systems serve the organization’s operational (lower) level.
A TPS is a computerized system that performs and records the daily routine
transactions found in all organizations.
Examples of these activities are routine tempts, orders, payments, banking
transactions, and payroll.
The transaction is added to the system as soon as it is received or happens
(POS Transactions).
The primary purpose of a TPS is to track the flow of transactions through the
organization and to answer routine questions.
These systems can only carry out the tasks they are designed for, and the user
cannot change the built-in functionality.
These systems are the backbone of an organization, as they can provide
updated information at any given time.
 Different types of information systems

Management information systems (MISs)

For managers of an organization to make decisions on all levels, they need

information.

It is, therefore, necessary to have information available in an organized form,

and for this, an MIS can be used.

An MIS provides managers with reports in an accurate and timely manner.

This data and information is processed and stored on a database.

It is updated regularly and can be accessed by managers whenever needed.

MISs are specifically designed to use IT to meet the information needs of lower
and middle managers as they make a variety of decisions on a day-to-day basis.

An MIS does not directly support the decision-making process but makes
information available that managers use to base their decisions on.
 Different types of information systems

2.6.3 Decision support systems (DSSs)

A DSS is a computer system designed to assist managers in determining and evaluating different
courses of action.

It acquires data from a range of routine transactions and analyses to create useful for decision
options to assist managers.

DSS was design because of the need for information system support in non-routine, non-
repetitive, uncertain situations where success criteria are not clear. It was developed to overcome
the structured problem focus of MISS.

DSS is used in financial services to assist insurance agents in structuring sales circumstances
and responding to client demands by choosing the optimal combinations from a list of choices.

The main functions of a DSS are to:

i.Support decision-makers faced with unstructured or semi-structured problems by combining

computerized information with human judgment.

ii.Increase the number of alternatives presented to the decision-maker.

iii.Enable more rapid response to unexpected situations

iv.Provide decision-making capabilities to individuals at different management

 Different types of information systems
Group support systems

This is software that includes all the characteristics typically expected of a DSS information

GSSs provide a means for decisions to be made by more than one individual.

This is beneficial when teams or supervisors are expected to express their opinions on decision-making
processes.

GSSs characteristics decision-making:

i.They are designed for groups, and provide a means to have online meetings, voting, and receiving input on
decisions to be made.

ii.They are easy to use, as group users are less tolerant of systems that are difficult to use.

iii.They are flexible, such that they support the different decision-making styles of different managers.

iv.They allow anonymous input by users, which allows users to express their opinions in a safe manner.

v.They reduce negative behavior, such as where one individual dominates others, by allowing everyone to
express their opinion.

vi.They support parallel communication, which allows more than one user to express an opinion at a the same
time by entering it into their workstation.

vii.They provide automated recordkeeping for all decisions made, so that accurate records exist for all
meetings held.
 Different types of information systems

Executive support systems (ESSs)

Senior and top managers make use of ESSs to make decisions that serve the
strategic level of the organization.

They address non-routine decisions requiring judgment, evaluation, and insight.

ESSs create a generalized computing and communications environment rather

than any fixed application or specific capability.

The focus is on long-term trends, internally and externally. External changes

must be noted to adjust internally and thereby remain competitive.

The system gathers information from many different. This system must be user-
friendly so that these managers do not spend all their time trying to operate the
system instead of just getting the information they need.

The information must of course be relevant to the decisions they need to take
 The integration of systems and the flow of information
There are a number of ways in which the various types of information systems can be
linked in order for people to access the data stored in the databases.

Organizations usually have separate systems for functions, which makes it difficult to
get information in time.

To integrate separate systems, system analysts are used to integrate different systems
within the organization so that information can flow between them

The goal is to ensure that information can then be made available to all the users by
means of any of these systems.

To ensure successful integration and coordination in the organization, the following
requirements must be satisfied:

i.There must be mutual cooperation between individuals and the different functions.

ii.Each function and its subdivisions must be aware of its share in the goal of the
organization (the output they need to provide that becomes the input of the other
functions).

iii.Each function must be flexible and able to adapt to changing circumstances.

 The integration of systems and the flow of information

Administrative/information function: the administrative function plays an

important and pertinent role in the integration and coordination of the functional
divisions.
It is the administrative function's responsibility to ensure that the different
information required by the different functions reaches them at the right time
To ensure this, the administrative personnel in functional units must capture
required information timeously.