Comprehensive & Detailed Exam Notes: Essen7als of
Management Informa7on Systems
Chapter 1: Business Informa4on Systems in Your Career
1.1 The Centrality of Informa4on Systems in Modern Business
Informa)on Systems (IS) are not just technical appendages but the central nervous system of
a contemporary business. Their importance stems from their ability to address core strategic
challenges and opportuni)es.
• The Six Strategic Business Objec4ves: A Deep Dive:
1. Opera4onal Excellence:
§ Concept: The pursuit of achieving the highest level of efficiency and
produc)vity in a company's opera)ons and processes. This lowers
costs, increases profits, and allows for compe))ve pricing.
§ Role of IS: IS automate rou)ne tasks, streamline complex processes,
op)mize resource alloca)on, and improve communica)on flows.
§ Detailed Example: Walmart's Retail Link System. This system provides
suppliers with real-)me access to sales data from every store. When a
product is sold, the supplier knows immediately and can plan
replenishment. This minimizes inventory holding costs for Walmart,
virtually eliminates stock-outs, and ensures shelves are always full.
This opera)onal superiority allows Walmart to maintain its "everyday
low prices" strategy.
2. New Products, Services, and Business Models:
§ Concept: A business model describes how a company creates,
delivers, and captures value. IS are a primary enabler for crea)ng
disrup)ve new models.
§ Role of IS: Digital technologies allow for the crea)on of products that
are purely digital (e.g., streaming music) and services that were
previously impossible (e.g., real-)me global naviga)on).
§ Detailed Example: Apple's Disrup4on of the Music Industry. The
tradi)onal business model was based on selling physical CDs through
retailers. Apple's new model, enabled by the iPod hardware and the
iTunes soPware/store, was based on selling individual digital tracks
online for immediate download. This "à la carte" model was a radical
departure and effec)vely made the CD obsolete.
3. Customer and Supplier In4macy:
§ Concept: "Customer In)macy" means serving customers so well that
they develop a loyalty to the brand. "Supplier In)macy" means
working so closely with suppliers that they become seamless partners,
reducing costs and improving quality.
§ Role of IS: Customer Rela4onship Management (CRM) systems track
all customer interac)ons to provide personalized service. Supply Chain
Management (SCM) systems create transparency and coordina)on
across the supply network.
§ Detailed Example:
Customer In4macy (Mandarin Oriental): The hotel chain's IS
records guest preferences (room temperature, pillow type,
minibar choices). Upon a guest's arrival, the system
automa)cally configures the room to their liking, crea)ng a
highly personalized experience that encourages repeat
business.
§ Supplier In4macy (JCPenney & TAL Apparel): When a shirt is
sold at JCPenney, the data is instantly transmiYed to TAL in
Hong Kong. TAL's algorithms analyze the data and decide how
many more shirts to make, in what styles and sizes, and ship
them directly to JCPenney stores, bypassing JCPenney's
warehouses en)rely. This "just-in-)me" inventory system
reduces costs for both companies.
4. Improved Decision Making:
§ Concept: Replacing guesswork, intui)on, and outdated informa)on
with real-)me, accurate data that is easily accessible to decisionmakers.
§ Role of IS: IS provide tools like digital dashboards that visualize Key
Performance Indicators (KPIs), and Business Intelligence (BI) tools that
can analyze vast datasets to uncover trends.
§ Detailed Example: Verizon's Digital Dashboard. Network managers
see a real-)me map showing network performance, outage loca)ons,
and customer complaint volumes. This allows them to make
immediate, informed decisions about where to dispatch repair crews,
minimizing down)me and improving customer sa)sfac)on.
5. Compe44ve Advantage:
§ Concept: When a firm achieves one or more of the above objec)ves
to a degree that it creates a significant and sustainable lead over its
compe)tors. This can be through lower costs, differen)ated products,
or superior customer service.
§ Role of IS: IS are oPen the primary tool for implemen)ng strategies
that lead to compe))ve advantage (e.g., Amazon's recommenda)on
engine, Uber's ride-hailing plaaorm).
6. Survival:
§ Concept: The necessity of using IS to meet legal, regulatory, or
industry-level requirements. Not adop)ng certain systems can mean
going out of business.
§ Role of IS: IS are essen)al for compliance, repor)ng, and mee)ng
industry standards.
§ Detailed Example:
§ Industry Necessity: The ATM network in banking. If a bank
does not offer ATM services, it cannot compete.
§ Regulatory Necessity: The Sarbanes-Oxley Act (2002) requires
public companies to retain all business records, including
electronic communica)ons, for five years. Robust IS are the
only way to comply.
1.2 Defining an Informa4on System: A Mul4dimensional View
§
An Informa)on System (IS) is more than just computers. It's an integrated set of components
for collec)ng, processing, storing, and distribu)ng informa)on.
• The Data-Informa4on-Knowledge-Wisdom (DIKW) Pyramid:
o Data: Raw, unorganized facts and figures. Example: "Item #4469, Store #5, 10
units, $12.99."
o Informa4on: Data that has been processed, organized, and structured to be
meaningful and useful. Example: "Sales of Product #4469 in the Northeast
region are 15% below target this quarter."
o Knowledge: The applica)on of informa)on to a specific problem or
context. Example: "The sales are low because a compe)tor launched a similar
product at a lower price. We should respond with a marke)ng campaign."
o Wisdom: The experien)al, ethical, and conceptual framework used to make
judgments about knowledge. (Less frequently implemented in IS directly).
• The Three Core Ac4vi4es:
1. Input: The capture of raw data from internal or external
sources. Example: Scanning a barcode, a customer filling out an online form, a
sensor reading temperature.
2. Processing: The conversion of raw input into a meaningful
form. Example: Calcula)ng an employee's pay, sor)ng customers by region,
summarizing sales data.
3. Output: The transfer of processed informa)on to the people or processes
that need it. Example: Displaying a report on a screen, prin)ng a paycheck,
sending a shipping confirma)on email.
o Feedback: Cri)cal for learning and adapta)on. Output is returned to the
system to help evaluate and refine input and processing. Example: If a sales
report shows consistent errors, the process for inpuing sales data is revised.
• The Three Dimensions of Informa4on Systems (The Problem-Solving Framework):
This is the most cri)cal concept for analyzing any IS-related business problem.
1. The Organiza4onal Dimension:
§ Hierarchy & Structure: IS must serve different levels (senior, middle,
opera)onal management) and different func)ons (sales, produc)on,
etc.).
§ Business Processes: IS are built to automate and improve these
processes. A poorly designed system will fail if it is mapped to an
inefficient process.
§ Culture: The values of an organiza)on must be supported by its IS. A
top-down, command-and-control culture will struggle with a
collabora)ve social business plaaorm.
§ Poli4cs: Different groups have different interests and resources, which
influences which systems are built and how they are used.
2. The People Dimension:
§ Human Element: The best system will fail if employees are not
properly trained, are resistant to change, or lack the mo)va)on to use
it effec)vely.
§ Management's Role: Managers are responsible for crea)ng the
strategic vision, alloca)ng resources, and managing the organiza)onal
change that accompanies new IS.
3. The Technology Dimension:
§ Computer Hardware: The physical plaaorm.
§ Computer So\ware: The set of instruc)ons that control the hardware.
Divided into system so\ware (OS) and applica4on
so\ware (programs for users).
§ Data Management Technology: SoPware for storing, organizing, and
retrieving data, primarily Database Management Systems (DBMS).
§ Networking and Telecommunica4ons Technology: The connec)ng
)ssue.
§ Internet: The global public network.
§ Intranet: A private internal network based on Internet
standards.
§ Extranet: A private network that extends to authorized
external users like suppliers.
§ IT Infrastructure: The founda)on of shared technology resources that
the specific informa)on systems are built upon.
1.3 The Problem-Solving Approach: A Method for MIS Success
This is a formalized version of cri)cal thinking applied to business and IS problems.
1. Problem Iden4fica4on:
o Ac4on: Don't just accept the ini)al symptom as the problem. Dig deeper. Is a
drop in sales a marke)ng problem (people), an outdated product design
problem (organiza)on), or a faulty e-commerce website (technology)?
o Framework: Use the three dimensions (Organiza)on, People, Technology) to
categorize the root causes.
2. Solu4on Design:
o Ac4on: Brainstorm mul)ple solu)ons. Avoid jumping to the first technical fix.
o Principle: The best solu)ons are oPen integrated, involving changes to
technology, business processes, and employee roles/training simultaneously.
3. Solu4on Evalua4on and Choice:
o Ac4on: Evaluate alterna)ves based on:
§ Cost: Total Cost of Ownership (TCO), not just purchase price.
§ Feasibility: Do we have the resources, )me, and skills?
§ Organiza4onal Suitability: Does it fit our culture and processes?
§ Stakeholder Support: Do key people and groups support it?
4. Implementa4on:
o Ac4on: This is where most projects fail. It involves:
§ Technical Work: Purchasing, building, and tes)ng hardware/soPware.
§ Change Management: The process of planning for, introducing, and
managing the new ways of working. This includes training, incen)ves,
and managing resistance.
§ Measurement & Feedback: APer implementa)on, measure outcomes
against the original objec)ves and feed this informa)on back into the
problem-solving cycle.
Chapter 2: Global E-business and Collabora4on
2.1 The Anatomy of a Business
• Business Func4ons and their Core Processes:
Manufacturing & Produc4on: Assembling the product, checking quality,
producing bills of materials.
o Sales & Marke4ng: Iden)fying customers, making customers aware of the
product, selling the product.
o Finance & Accoun4ng: Paying creditors, crea)ng financial statements,
managing cash accounts.
o Human Resources: Hiring employees, evalua)ng job performance, enrolling
employees in benefits plans.
• The Cross-Func4onal Nature of Business Processes:
o Concept: Most important processes, like Order Fulfillment, are not confined
to one department. They are a chain of ac)vi)es that require coordina)on
across the organiza)on.
o Detailed Example: The Order Fulfillment Process:
1. Sales: Receives the order.
2. Accoun4ng: Checks customer credit and approves the order.
3. Manufacturing/Inventory: Pulls the product from stock or schedules
its produc)on.
4. Shipping: Packages and ships the product (oPen involving a logis)cs
partner like UPS).
5. Accoun4ng: Generates an invoice.
6. Customer Service: Tracks the order and handles any post-sale
inquiries.
o Role of IS: To manage the informa)on flow between these disparate groups,
ensuring everyone is working from the same, up-to-date informa)on.
2.2 Systems for Different Management Levels and Enterprise Integra4on
• Hierarchy of Systems:
o Transac4on Processing Systems (TPS):
§ Purpose: To answer rou)ne ques)ons and track the flow of daily
transac)ons.
§ Users: Opera)onal Managers.
§ Example: A payroll TPS takes employee )mecards (input), calculates
pay and deduc)ons (processing), and produces paychecks and
management reports (output).
o Management Informa4on Systems (MIS):
§ Purpose: To provide summarized, structured reports on the
organiza)on's basic opera)ons, based on data from TPS.
§ Users: Middle Management.
§ Characteris4c: Typically not flexible; they answer "what happened?"
rather than "what should we do?"
§ Example: A report comparing actual annual sales to planned sales by
product and region.
o Decision-Support Systems (DSS):
§ Purpose: To support unique, non-rou)ne decision-making for middle
managers. They use models and oPen external data to answer "whatif" ques)ons.
§ Characteris4c: Highly analy)cal and interac)ve.
o
Example: A voyage-es)ma)ng DSS for a shipping company that
calculates the most profitable route, speed, and cargo load based on
fuel costs, port charges, and freight rates.
o Execu4ve Support Systems (ESS):
§ Purpose: To provide senior management with a generalized
compu)ng and communica)on capacity for addressing strategic issues
and long-term trends.
§ Interface: OPen delivered through a portal featuring a digital
dashboard with graphs and charts of key performance indicators
(KPIs).
§ Example: Valero's Refining Dashboard, which shows real-)me data on
plant reliability, safety, and energy consump)on across all its
refineries.
• Enterprise Applica4ons: Integra4ng the Enterprise
o Concept: These systems solve the problem of "informa)on silos" by
integra)ng data from across func)onal areas.
o Enterprise Systems (ERP):
§ How it works: Creates a single, central repository for data from
manufacturing, finance, sales, and HR. An ac)on in one area (e.g., a
sale) immediately triggers related ac)ons in other areas (e.g.,
inventory update, shipping no)fica)on, invoice genera)on).
§ Benefit: Provides a unified, organiza)on-wide view of opera)ons.
o Supply Chain Management (SCM) Systems:
§ How it works: These are interorganiza4onal systems that manage the
flow of informa)on, products, and payments between a company and
its suppliers. They provide visibility into supplier inventory, produc)on
schedules, and logis)cs.
§ Benefit: Op)mizes the en)re supply chain to reduce costs and speed
delivery.
o Customer Rela4onship Management (CRM) Systems:
§ How it works: Consolidate all customer data from sales, marke)ng,
and customer service. They have two components:
§ Opera4onal CRM: Customer-facing applica)ons (e.g., systems
for salespeople, call centers).
§ Analy4cal CRM: Analyzes customer data to iden)fy trends,
segment customers, and improve reten)on.
§ Benefit: Increases customer sa)sfac)on and profitability by providing
a 360-degree view of the customer.
2.3 The Impera4ve of Collabora4on and Social Business
• Collabora4on: Working together to achieve a shared and explicit goal. It is not just
communica)on (which is the exchange of informa)on).
• Why Collabora4on is Crucial Today:
o Changing Nature of Work: From structured, siloed tasks to interac)ve, teambased projects.
o Growth of Professional Jobs: These jobs require sharing exper)se and
opinions to solve complex problems.
§
Organiza4onal Change: FlaYer hierarchies and decentralized decision-making
push collabora)on down to teams.
o Globaliza4on: Teams are oPen geographically dispersed.
o Innova4on: Is primarily a social and collabora)ve process, not a solitary one.
Social Business:
o Concept: The use of social networking plaaorms (like an internal Facebook) to
deepen interac)ons with employees, customers, and suppliers. The goal is to
create a culture of conversa4on and transparency.
o Key Capabili4es: Profiles, content sharing, feeds, groups, tagging.
o Benefits: Tapping into collec)ve knowledge, speeding up innova)on,
improving employee engagement.
Collabora4on and Social Business Toolbox:
o Email & Instant Messaging: Founda)onal, but can be inefficient for group
coordina)on.
o Wikis: Collabora)ve websites (e.g., Wikipedia) ideal for co-crea)ng and
storing documenta)on.
o Videoconferencing & Telepresence: Ranges from free tools (Zoom) to highend, immersive systems (Cisco Telepresence) that create a "same-room"
feeling.
o Cloud Collabora4on Services: Google Drive/Docs and MicrosoP
OneDrive/365 allow for real-)me co-edi)ng of documents and cloud storage.
o Collabora4on Plaborms: MicrosoP SharePoint and IBM Notes provide a
centralized workspace for teams to share documents, manage projects, and
communicate.
o Enterprise Social Networking (ESN): Tools like Yammer, Slack, and ChaYer
create a Facebook-like social network within the company to share ideas and
find experts.
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Chapter 3: Achieving Compe44ve Advantage with Informa4on Systems
3.1 Core Models for Understanding Compe44ve Strategy
• Porter's Compe44ve Forces Model:
o Purpose: To diagnose the compe))ve environment and iden)fy where a firm
is vulnerable. It helps formulate a defensive or offensive strategy using IS.
o The Five Forces:
1. Tradi4onal Compe4tors: All exis)ng rivals in your market.
2. New Market Entrants: New companies entering your industry
(barriers to entry are key).
3. Subs4tute Products/Services: Alterna)ves that fulfill the same need
(e.g., videoconferencing is a subs)tute for business travel).
4. Customers: The power of buyers to influence price and terms.
5. Suppliers: The power of suppliers to influence price and quality of
inputs.
o Four Generic Strategies Enabled by IS:
1. Low-Cost Leadership: Use IS to achieve the lowest opera)onal
costs. Example: Walmart's supply chain systems.
2. Product Differen4a4on: Use IS to create unique new products and
services. Example: Google's search algorithm, Apple's iPhone.
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3. Focus on Market Niche: Use IS to enable a focused strategy on a
single, specialized market segment. Example: Sophis)cated CRM
systems that mine customer data to target marke)ng campaigns to
very specific niches.
4. Strengthen Customer and Supplier In4macy: Use IS to build strong
bonds and switching costs. Example: CRM and SCM systems, as
detailed in Chapter 1.
The Business Value Chain Model:
o Concept: Views the firm as a series of ac)vi)es that add value to a
product/service. These are split into:
§ Primary Ac4vi4es: Directly related to produc)on and distribu)on
(Inbound Logis)cs, Opera)ons, Outbound Logis)cs, Sales &
Marke)ng, Service).
§ Support Ac4vi4es: Make the primary ac)vi)es possible (Firm
Infrastructure, Human Resources, Technology Development,
Procurement).
o Strategic Analysis: By examining each ac)vity, you can iden)fy the most
cri)cal points where IS can provide the greatest strategic impact—by lowering
costs, improving quality, or adding value for the customer. Example: Using a
website for customer self-service (Service ac)vity) reduces costs and may
increase sa)sfac)on.
Synergies and Core Competencies:
o Synergies: When the output of some units can be used as inputs to others,
crea)ng more value together. IS make this informa)on sharing
possible. Example: A bank offering a merged view of a customer's checking,
savings, and mortgage accounts.
o Core Competencies: Ac)vi)es for which a firm is a world-class leader. IS can
help enhance these competencies. Example: Procter & Gamble's exper)se in
brand management is supported by sophis)cated marke)ng and consumer
data analysis systems.
Network-Based Strategies:
o Network Economics: The value of a network to its members grows
exponen)ally as the network adds more members. Example: The value of
eBay lies in its massive number of buyers and sellers.
o Virtual Company: A organiza)on that uses networks to link people, assets,
and ideas to create and distribute products without being limited by
tradi)onal organiza)onal boundaries. Example: Airbnb (owns no hotels) and
Uber (owns no cars).
Chapter 9: Achieving Opera4onal Excellence and Customer In4macy: Enterprise
Applica4ons
(This chapter provides a deeper dive into the enterprise applica6ons introduced in Chapter
2.)
• Enterprise Systems (ERP): The Digital Core
o The Problem They Solve: "Informa)on Silos." Before ERP, manufacturing,
sales, and finance oPen had their own disconnected systems, leading to
conflic)ng data, inefficiencies, and poor decision-making.
The ERP Solu4on: A single, unified soPware system and a central database.
Data is entered once at the source and is immediately available to everyone
who needs it.
o How it Works in Prac4ce: A customer order automa)cally flows to the
departments that need it: inventory is updated, the produc)on schedule is
adjusted, shipping is no)fied, and accoun)ng generates an invoice.
o Business Value:
§ Creates a unified, real-)me view of the firm.
§ Increases opera)onal efficiency.
§ Helps standardize processes across the organiza)on.
§ Improves customer service by providing consistent informa)on.
Supply Chain Management (SCM) Systems: Managing the Network
o The Supply Chain: The network of organiza)ons and processes involved in
sourcing, making, and delivering a product.
o Inefficiencies in the Supply Chain: The "Bullwhip Effect," where small
fluctua)ons in consumer demand cause increasingly large fluctua)ons in
orders placed upstream, leading to inventory imbalances.
o The SCM Solu4on: Provides transparency and coordina)on across the en)re
chain. All partners can see real-)me demand, inventory levels, and
produc)on schedules.
o Business Value:
§ Match supply to demand more accurately.
§ Reduce inventory levels across the chain.
§ Speed product )me to market.
§ Reduce overall supply chain costs.
Customer Rela4onship Management (CRM) Systems: Managing the Customer
Lifecycle
o The Problem They Solve: Disconnected customer interac)ons. A salesperson,
a marke)ng campaign, and a service rep might all have different, incomplete
views of the same customer.
o The CRM Solu4on: A single, integrated view of all customer interac)ons.
§ Opera4onal CRM: Automates customer-facing processes (e.g., sales
force automa)on, call center systems).
§ Analy4cal CRM: Uses data mining and other techniques to analyze
customer data from opera)onal CRM to iden)fy profitable customers,
predict future behavior, and personalize marke)ng.
o Business Value:
§ Iden)fies and retains the most profitable customers.
§ Cross-sells and up-sells products more effec)vely.
§ Improves customer service and sa)sfac)on.
§ Increases sales force produc)vity.
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Chapter 11: Improving Decision Making and Managing Ar4ficial Intelligence
11.1 Decision Making and Business Intelligence
• Types of Decisions:
Unstructured: Decision maker must provide judgment, evalua)on, and
insight. No agreed-upon procedure. Example: "Should we enter a new
market?" (Senior Management)
o Structured: Repe))ve and rou)ne, with a definite procedure for handling
them. Example: "Should we approve this customer for a loan?" based on a
credit score. (Opera)onal Management)
o Semistructured: Only part of the problem has a clear-cut answer provided by
an accepted procedure. Example: "What should our produc)on schedule be
for the next quarter?" (Middle Management)
• Business Intelligence (BI) Infrastructure: The underlying architecture of databases,
data warehouses, and analy)cal tools that is used to generate reports, dashboards,
and data visualiza)ons for all levels of users.
11.2-11.4 The Landscape of Ar4ficial Intelligence
• What is AI? The capability of a machine to imitate intelligent human behavior, such
as learning, reasoning, and problem-solving.
• Major Categories of AI:
1. Expert Systems:
§ Concept: Model the knowledge and analy)cal skills of human experts
in a specific, narrow domain.
§ How it works: A knowledge base of "IF-THEN" rules is created. The
"inference engine" runs the facts of a specific case through these rules
to reach a conclusion.
§ Example: Medical diagnosis systems, troubleshoo)ng guides for
complex equipment.
2. Machine Learning:
§ Concept: The ability of algorithms to learn and improve from data
without being explicitly programmed for every task.
§ Supervised Learning: The model is trained on a labeled dataset (e.g.,
emails tagged as "spam" or "not spam"). APer training, it can classify
new, unlabeled data.
§ Unsupervised Learning: The model finds hidden paYerns or intrinsic
structures in unlabeled input data (e.g., segmen)ng customers into
groups based on purchasing behavior).
§ Neural Networks & Deep Learning: Machine learning based on a
highly complex model of the human brain. It is par)cularly powerful
for finding paYerns in vast, complex datasets (e.g., image recogni)on,
speech recogni)on, fraud detec)on).
3. Gene4c Algorithms:
§ Concept: Problem-solving systems that use models of evolu)on
(selec)on, crossover, muta)on) to generate increasingly beYer
solu)ons.
§ Example: Op)mizing investment poraolios, designing efficient jet
engine turbines.
4. Natural Language Processing (NLP):
§ Concept: The ability of computers to understand, interpret, and
generate human language.
o
Example: Chatbots, voice assistants (Siri, Alexa), sen)ment analysis of
social media posts.
5. Computer Vision Systems:
§ Concept: SoPware's ability to "see" and interpret objects in images
and videos.
§ Example: Medical image analysis to detect tumors, self-driving car
naviga)on, facial recogni)on.
6. Intelligent Agents:
§ Concept: SoPware programs that work in the background to carry out
specific, repe))ve, and predictable tasks for an individual, process, or
applica)on.
§ Example: Shopping bots that scour the web for the best price,
soPware that monitors plant equipment for signs of failure.
§
Chapter 12: Making the Business Case for Informa4on Systems and Managing Projects
12.1 Building the Business Case
• The Informa4on Systems Plan: A strategic document that aligns the IS strategy with
the overall business strategy. It describes the overall direc)on, jus)fica)on, and
implementa)on schedule for major systems projects.
• Porbolio Analysis:
o Concept: Evalua)ng poten)al informa)on systems projects as a poraolio,
much like a financial poraolio. Projects are categorized based on their
poten)al benefits and strategic impact.
o Common Categories: High-benefit/low-risk (invest), high-benefit/high-risk
(evaluate carefully), low-benefit (avoid).
• Scoring Models:
o Concept: A quan)ta)ve method for evalua)ng alterna)ve system solu)ons.
Key criteria (e.g., cost, func)onality, vendor support) are assigned weights
based on importance. Each alterna)ve is scored on each criterion, and a total
weighted score is calculated to aid in selec)on.
• Cost-Benefit Analysis:
o Tangible Benefits: Can be quan)fied and assigned a monetary value (e.g.,
reduced payroll costs, lower inventory carrying costs, increased sales).
o Intangible Benefits: Cannot be easily quan)fied but provide real value (e.g.,
improved customer sa)sfac)on, beYer decision-making, enhanced employee
morale).
o Total Cost of Ownership (TCO): A methodology designed to iden)fy and
measure all costs associated with an IS, including:
§ Acquisi4on Costs: Hardware/soPware purchase.
§ Opera4onal Costs: Maintenance, upgrades, technical support.
§ Hidden Costs: Down)me, training, administra)on.
12.2-12.4 Systems Development and Project Management
• Core Problem-Solving Steps for a New IS: This is the detailed applica)on of the fourstep model (from Chapter 1) specifically to building a new system: 1. Systems
Analysis, 2. Systems Design, 3. Programming, 4. Tes)ng, 5. Conversion, 6. Produc)on
& Maintenance.
• Alterna4ve Development Methods:
Systems Development Life Cycle (SDLC): A tradi)onal, structured, phased
methodology. Each phase must be completed before the next begins.
Rigorous but can be slow.
o Prototyping: Building an inexpensive, experimental version of the system (a
"prototype") quickly for users to interact with and provide feedback. This
itera)ve process leads to clearer requirements and a beYer final product.
o End-User Development: End users create simple informa)on systems with
liYle help from technical specialists, using tools like Excel, Access, or low-code
plaaorms.
o Applica4on So\ware Packages & Outsourcing:
§ Packages: Buying pre-wriYen soPware (e.g., SAP ERP, Oracle CRM) can
be faster and cheaper than building from scratch.
§ Outsourcing: Contrac)ng system development, opera)on, or
maintenance to external vendors to reduce costs, access special skills,
or free up internal resources.
Project Management Objec4ves: To ensure that the system is delivered on )me,
within budget, and with the required func)onali)es.
Managing Project Risk:
o Key Risk Factors:
§ Project Size: Larger projects are riskier.
§ Project Structure: Well-defined requirements reduce risk.
§ Technical Experience: Lack of team experience with the technology
increases risk.
o Change Management: The most cri)cal people-related risk. It involves
overcoming user resistance through communica)on, training, involvement,
and incen)ves. Without effec)ve change management, even the best
technical system will fail.
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