CIMA E1 Official Learning System - Enterprise Operations Aug 2009

Подождите немного. Документ загружается.

STUDY MATERIAL E1

INFORMATION SYSTEMS

●

Reluctance to use the new system

●

Errors in processing (either deliberate or accidental)

●

Slower processing due to a lack of conﬁ dence, unfamiliarity or covert sabotage

●

Staff turnover or absence arising from avoidance of the new system.

Resistance in the wake of the implementation of an IS system should be acknowledged

as little different by nature to the resistance met by implementation of any form of organi-

sational change. Obviously anticipation of problems beforehand to avoid conﬂ ict is prefer-

able. Nevertheless, should conﬂ ict arise tactics can be evolved to deal with the situation.

Kotter, Schlesinger and Sathe (1992) identiﬁ ed six main methods of exercising inﬂ uence

to overcome resistance, namely:

●

education and communication,

●

participation and involvement,

●

facilitation and support,

●

negotiation and agreement,

●

manipulation and co-optation,

●

explicit and/or implicit coercion.

The ﬁ nal two methods raise ethical and legal problems as well as involving considerable risk

of making the situation worse. These six approaches are not mutually exclusive and managers

may ﬁ nd it effective to use a combination of them. The most appropriate approach in each

instance will depend on a variety of factors, including the goals of the change programme

and the likely reactions of the people involved. One of the problems of choosing the ‘right’

approach is that people will not always openly admit the real reasons for opposing change. In

particular, those reasons relating to self-interest are likely to be disguised as technical objec-

tions, arguing that the proposed system will not work. Attempts to deal with these technical

objections will not get to the root cause of the resistance to change. Only in a climate in

which individuals feel free to discuss their objections and fears openly will it be possible for

managers to understand and deal with the underlying reasons for resistance.

Exercise 2.9

If a manager discovers that there are instances of non-usage of the systems how might this

be interpreted?

Solution

It may be as being a result of a number of reasons, including:

●

An expression of resistance. In this case appropriate inﬂ uencing measures should be

applied (see above).

●

A lack of conﬁ dence in the new system, in which case enhanced communication is

required and system modiﬁ cation should be applied where appropriate.

●

A lack conﬁ dence in their own abilities to cope with the new system. In this case train-

ing and other support mechanisms should be addressed.

Exercise 2.10

Review Kotter and Schlesinger’s listing and identify the conditions under which each of

these methods might ‘work’.

ENTERPRISE OPERATIONS

INFORMATION SYSTEMS

Solution

There is no right or wrong answer, and your thinking is likely to be as valid so long as it is

based on commonsense and your own experience.

Education and

communication

●

Useful when the problem is a lack of information about the need for, or the nature

of, the planned change of system.

●

Can be very time-consuming and will not work by itself if there are reasons other

than misunderstanding for resisting the change.

Participation and

involvement

●

Increases the probability that people will be committed to the system and

if their views are taken into account, this may enhance the effectiveness of

implementation.

●

Appropriate when the individuals initiating the change do not have all the

necessary information and when the people affected by the change have

considerable power to resist it.

●

Can be time-consuming.

Facilitation and

support

●

Involves the use of techniques such as training and group discussions designed to

reduce fear and anxiety.

●

Particularly appropriate where the main reason for resistance is based on insecurity

and adjustment problems.

Negotiation and

agreement

●

May be necessary where an individual or a group stands to lose out in some way

because of the change, particularly if they also have the power to resist the change.

●

May help to avoid major problems.

●

Disadvantages are that it can be expensive and also it can encourage others to

negotiate to ‘buy’ their compliance.

Manipulation and

co-optation

●

Relies on presenting partial or misleading information to the people resisting the

change. Co-optation involves identifying key individuals resisting changes and

‘buying them off’ by giving them positions of authority to help implement the

change.

●

A quick and relatively inexpensive approach, it will probably result in future

problems if the people involved realise they have been manipulated.

Explicit and implicit

coercion

●

Involves the use of force, or the threat of it, to bring about change.

●

May be necessary as a very last resort if the parties involved are operating from

ﬁ xed positions and there are fundamental disagreements over objectives and/or

methods.

2.5 Organising and managing IS activities

within a corporate framework

IS should not be considered in isolation, it must complement and support other areas

including marketing, ﬁ nance, human resourcing and operations.

Exercise 2.11

Identify examples of the way in which IS can support other functional areas.

Solution

Examples of IS supporting other organisational roles includes:

●

The development of a DBMS to support all functional areas.

●

Use of the Intranet in supporting operations and meeting customer support needs.

STUDY MATERIAL E1

INFORMATION SYSTEMS

●

Use of the Internet to support marketing activity and providing enhanced value to cus-

tomers and suppliers.

●

Online technology-supported learning as part of HR training and development efforts.

The relationship between IS and other management functions within an organisation

should be apparent.

2.5.1 IS outsourcing

The scope of IS outsourcing can range from single system development to complete

facilities management. The use of contracted expertise raises the issue of establishing and

maintaining strong client–vendor relationships. Boomer (2007) reﬂ ects on the need for

organisational abilities to manage IS and muses the potential for outsourcing as follows:

Over the past 10 years, technology has become more ubiquitous, as well as more complex…..

….The breadth of knowledge required to support and integrate these systems has grown to the point

where it’s time for ﬁ rms to assess the talent required and whether to employ professional IT personnel, out-

source or settle on a combination of strategies.

The organisation corporately holds certain values and broad policy ideas. For some there

may be an enthusiasm for outsourcing while others may feel strongly that services should

be retained in-house. Advocates of outsourcing may point to cost savings whilst propo-

nents may argue that additional monitoring mechanisms might be costly in themselves.

Systems development does not necessarily have to be carried out by in-house develop-

ment staff and could be outsourced. The problem with ‘outsourcing’ is that the external

vendor may not understand the business process, and the organisation may lose control

over its information systems. It also runs the risk that cost could be high, as the vendors

may charge extra services to keep updating technology. Therefore careful planning, tight

contract speciﬁ cations and systems of monitoring will be required to ensure that systems

development objectives are achieved by the external organisation.

Differing management problems are associated with in-house and vendor solutions. In-

house, the difﬁ culties tend to centre on the assembly and maintenance of an adequately

skilled and motivated workforce to deliver IS solutions. The emphasis for outsourced facil-

ities tends to focus on contract compliance and adherence to predetermined standards.

Boomer (2007) acknowledges outside resources and consulting as invaluable because, ‘it

is what you don’t know you don’t know that will cost you time and money.’

When choosing a vendor careful evaluation and selection processes should be followed

including background reviews of vendor ﬁ nancial performance, references, litigation his-

tory, etc. Vendors should be chosen in accordance with predetermined selection criteria.

Relationships should be built on trust and reasonable mutual expectation to this end it is

helpful to:

●

Make clear the organisation’s vendor arrangements within formal planning documents,

and communicate mutual roles and relationships within the organisation.

●

Ensure the vendor understands and will comply with organisational ethical policies, pro-

cedures and practices.

●

Ensure easy contact with the vendor by establishing a series of relationships at various

levels (e.g. key account manager, operators, executives, etc.).

●

Put in place mechanisms to periodically review performance, evaluate customer satisfac-

tion and agree remedial action if necessary.

ENTERPRISE OPERATIONS

INFORMATION SYSTEMS

2.5.2 Aligning information systems with business

strategy

When taking a management perspective of the IS function, one should remember that

the main customers IS normally interfaces with directly are internal. This means that the

function should take trouble to understand the needs of their colleagues and seek to satisfy

these through their policies, practices and developments.

Undoubtedly, effective information management can be a source of organisational

strength. This can be built upon as a competence in order to gain a advantage over an organ-

isation’s competitors. It is apparent from the preceding sections in this chapter that IS is a

competitive necessity. If an organisation’s IS are a source of strategic weakness this could

prove disastrous resulting in a failure of quality and unfulﬁ lled customer expectations.

Cohesive IS strategies are developed in many organisations and these should be consist-

ent with and contribute to the achievement of corporate aspirations. In terms of overall

corporate performance, above all the beneﬁ ts of systems should outweigh the costs associ-

ated with them.

Clegg (2003) offers a number of insights into strategy development. He makes the point

that an IS strategy is a plan for ensuring that information is effective (appropriate, accu-

rate, available and timely). Strategy development might begin by either:

●

reviewing all the information currently in the organisation, and then overcoming dupli-

cation and inaccuracies, or alternatively,

Table 2.7 Internal versus external hardware and software options

Internal External

Software features

Quality Must manage development effectively Contract must specify quality

standards and performance

criteria

Cost Often costly Usually less costly than internal

Difﬁ cult to estimate if new software More easy to determine ﬁ nal cost

Time Need to wait for software to be

developed – requires signiﬁ cant

planning

If amendments not required

– availability immediate

Compatibility Should be completely compatible May require amendments to ﬁ t in

with current system

Support Organisation must provide and

perform training and maintenance

programme

Vendor likely to support both own

training and maintenance (built

into contract)

Satisfaction of user needs Maximum satisfaction as designed

speciﬁ cally for users

May not satisfy needs exactly – may

require further tailoring to do so

Nature of development Develop in-house if unique

requirement

Purchase if industry standard

Hardware features

Management Organisation/user responsible for

management

Managed by outside party

Support Internal (IT department) Available externally (for a fee)

Cost Mostly ﬁ xed Mostly variable

Satisfaction of user needs Tailored – maximum satisfaction

(within budget)

Less ﬂ exibility (more determined by

cost budget)

STUDY MATERIAL E1

INFORMATION SYSTEMS

●

taking the starting point as the organisation as a whole, and then deciding upon the

information it needs to operate effectively.

Secondly, strategy should not be left to IS experts; managers themselves know what type of

information they need.

Boomer (2007) offers a checklist of issues to address in planning IS at both a strategic

and tactical level as follows:

Strategic Tactical

What are the organisation’s priorities (as expressed

in the corporate plan)?

What HR resources do we have, and what are their

unique abilities?

How might technology help meet corporate

objectives?

How are our IS and IT resources currently managed?

Should we outsource or staff internally?

What are the latest trends in and outside of our

industry?

What is the timeline and budget and other resources?

Source: Based on Boomer, G. (2007)

2.6 Summary

A managerial perspective has been taken throughout this chapter when covering a number

of IS topic areas. The wider business context within which information systems operate

should be apparent as should the ways in which systems can be implemented in support of

the organisation’s corporate objectives.

References and further reading

Anon (2006) It’ll never ﬂ y: Blogging. Management Today, April, p. 12.

Berens, C. (2006) Windows of opportunity. Financial Management (UK), November,

Vol. 12, No. 5.

Boomer, G. (2007) IT Strategies and tactics. Accounting Today, August 20.

Carnall, C. (2007) Managing Change in Organisations. 5th edition. FT Prentice Hall

Clegg, B. (2003) Deciding factors? Professional Manager, September.

de Jager, M. (2008) Shaping the future new generation. Generation y and what makes them

tick. CIMA Lecturers’ Conference (unpublished)

Denton, A. (2002) Stepping out – a four-step guide to implementing new ﬁ nancial sys-

tems. Conspectus, April.

Hellriegel, D. and Slocum, J. W.,Jr. (1992) Management (6th edn). Addison Wesley.

Kotter, J. P., Schlesinger, L. A. and Sathe, V. (1992) Organization: Text, Cases, and Readings

on the Management of Organizational Design and Change (3rd edn). Homewood, IL:

Irwin.

Lynch, R. (2009) Strategic Management (5th edn). FT Prentice Hall.

Johnson, G., Scholes, K. and Whittington, R. (2008) Exploring Corporate Strategy: Text

and Cases (8th edn). Financial Times, Prentice Hall.

Meall, L. (2004) Automation Nation. Accountancy, March, pp. 74–75.

Phillips, P. (2000) E-business: what is it and does it matter to accountants? Management

Accounting, February.

ENTERPRISE OPERATIONS

INFORMATION SYSTEMS

Pesola, M. (2004) Network protection is a key stroke. Financial Times, March 8.

Scase, R. (1999) Britain Towards 2010: The changing business environment, DTi, August.

Senior, B. and Fleming, J. (2006) Organisational Change (3rd edn). FT Prentice Hall.

Skyrme, D.J. (1997) Virtual Teaming and Virtual Organizations: 25 Principles of Proven

Practice. Update http://dev.skyrme.com/updates/u11.htm

This page intentionally left blank

Revision Questions

Question 1

Describe the most important properties that a database system should have in order to be

successful. (10 marks)

Question 2

The R company is about to implement a new management information system. This MIS

will replace an existing system, although this provides little more than a daily summary of

the information maintained on the transaction processing system. The new MIS will still

access the TPS data, but will provide more comprehensive analysis including historical sta-

tistics and limited comparison to prices charged by competitors.

The system will be implemented by direct changeover, because the network servers have

insufﬁ cient capacity to maintain both systems on the hard disks. The installation will also

take place over a weekend to minimise disruption to managers. The system developers

believe that the new MIS is so intuitive that managers will be able to use it straight away.

Requirement

Identify and discuss the risks with the implementation of the new MIS. (10 marks)

Question 3

3.1 Local area networking is used for:

(A) communication between computers within a limited geographical area

(B) structuring an organisation within a division or business unit

(D) managing a complex operational issue by global interface with trade associations

and professional bodies. (2 marks)

3.2 Many large organisations have established a computer Intranet for the purpose of:

(A) providing quick, effective and improved communication amongst staff using

chat rooms

(B) providing quick, effective and improved communication to staff

(D) providing quick, effective and improved ordering procedures in real time.

(2 marks)

INFORMATION SYSTEMS

3.3 The main advantages of a database management system include:

(A) the development of separate data sources

(B) unlimited access and open communication

(D) data integrity and elimination of duplication. (2 marks)

3.4 An expert system describes:

(A) a database built upon past knowledge and experience

(B) a powerful off-the-shelf software solution

(D) an electronic version of working papers assembled by the research and develop-

ment department. (2 marks)

Each of the sub-questions below require a brief written response and are worth

4 marks each. This response can be in note form and should not exceed 50 words.

3.5 Explain why a phased system change-over for a computer development might help

employees cope better with technological change. (4 marks)

3.6 Describe the main beneﬁ ts of in-house developed information systems. (4 marks)

Question 4

TF7 is a progressive manufacturing company, which is open to new approaches and will-

ing to learn from good ideas wherever they are practiced. One of the ﬁ rst within its indus-

try to invest heavily in new technology, TF7 runs its database over ofﬁ ce-wide networks

and links employees’ computers by wireless local area network (LAN) connections.

TF7 has, in the past, only dealt with wholesalers but, thanks to e-mail links from a new

Internet home page, it now receives a substantial number of enquiries from ultimate con-

sumers of its products. TF7 feels that this will represent the majority of its business in the

future.

In response to employees spending more time communicating with potential custom-

ers by e-mail, TF7 is considering expanding its technology, including the connection of

its database to a web server. This would enable potential customers to search for product

speciﬁ cations, availability, and delivery and price information for themselves. It would also

allow customers to place orders and view shopping cart items through a browser facility.

Before making such an investment, TF7 has commissioned management consultants to

conduct an organisational review.

The consultants have produced a draft report in which they outline a number of interim

ﬁ ndings, including the following:

●

TF7 should gain signiﬁ cant beneﬁ ts over its rivals through its existing database

operations.

●

TF7 should consider developing further the interconnection of applications so long as

contingency plans are made for the potential of systems failure.

●

Although there has been considerable expenditure on hardware, TF7 now needs to invest

in software applications.

●

TF7’s management information systems and executive information systems are undevel-

oped to the detriment of the company both operationally and strategically.

REVISION QUESTIONS E1

ENTERPRISE OPERATIONS

INFORMATION SYSTEMS

You work in TF7’s technical department and report directly to the Chief Executive, who

has asked for a series of brief notes so that he is prepared when discussing the draft report

with the management consultants.

Requirements

Provide appropriate brieﬁ ng notes for the Chief Executive for each of the following issues:

(a) Describe the beneﬁ ts TF7 should be enjoying as part of its current database

operations. (5 marks)

(b) Explain the value of good management information systems and executive informa-

tion systems. (5 marks)

Question 5

K1S is a fast growing chain of hair and beauty salons (shops) located throughout the pros-

perous north of the country. The company is due to expand from 30 to 35 salons within

the next year. K1S’s policy is to buy existing salons in fashionable city centre shopping

malls which it believes are ‘underperforming’ by offering too limited a range of treatments

and charging too low prices. (All K1S’s salons charge ‘top’ prices but provide excellent cus-

tomer care. In addition to hairdressing services, K1S offer pedicures and manicures, teeth

whitening, neck and facial massages, botox treatment and lip enhancements). K1S also

plan to sell own-brand hair styling products and treatments at premium prices from its

premises. K1S’s managing director (MD) sees training as critical to ‘keeping our service

sophisticated, slick and professional: with a distinctive K1S style’. K1S now operates its

own hairdressing training academy from purpose built premises.

The MD has however identiﬁ ed a number of areas which need to be addressed if K1S is

to continue to prosper.

●

The opportunities for the use of information technology (IT) needs to grasped, particu-

larly in the implementation and running of the information system network and in sup-

port of management operations.

●

Information systems (IS) need to be developed primarily based upon the needs of the

company as a whole but also mindful of the need to support salon management opera-

tions locally.

●

The threat posed by competitors who are copying K1S’s approach.

The MD has appointed a management consultancy team to conduct a complete organi-

sational review. Their report identiﬁ es a number of issues, some of which are highlighted

below.

●

Systems are generally weak and the beneﬁ ts of modern software applications lacking. The

accuracy and completeness of information received from branches needs to improve, and

there needs to be better coordination of activities. Several different systems are used and

some are very inefﬁ cient. (For example over 40% of salon receptionist/administrators

time is spent manually analysing and searching for information). Through its acquisition

policy K1S has ‘inherited’ a series of salons operating independent systems of varying

sophistication and effectiveness. Some still use manual systems, others use stand-alone

computers, but none take full advantage of software capabilities and most only use basic

software functions. It seems that the more complex a system a salon has the more the

staff resistance to its full use seems to be. Internet possibilities are being missed and there