MANAGEMENT INFORMATION SYSTEM

PREAMLE
Systems are the discipline covering the application of people, technologies, and procedures
collectively called information systems to solving business problems.
Management Information System are distinct from regular information system in that they are used
to analyse other information systems applied in operational activities in the organization.
Academically, MIS is commonly used to refer to the group of information management methods
tied to the automation or support to human decision making. Business computers were used for the
practical business of computing the payroll and keeping track of accounts payable and receivable. As
applications were developed that provided managers with information about sales, inventories, and
other data that would help in managing the enterprises, the term “MIS” arose to describe these
kinds of application.
The word system covers a very broad spectrum of concepts. This is derived from the Greek word
Systema, which means an organized relationship among the functioning units or components. In our
daily lives, we come in contact with the transportation system, the communication system, the
accounting system, product system, economic system and for over three decades, the computer
system. Similarly, business systems are the means by which business organizations achieve their pre-
determined goals. A business system combines policies, personnel, and equipment and computer
facilities to coordinate the activities of business organization.
Definition: There are various definitions of the word system but most of them seen to have a
common idea that suggest that a system is an orderly grouping of interdependent components
linked together, according to a plan to achieve a specific goal. The word Components may refer to
physical parts (engines, wheels of care), managerial steps (planning, organizing, controlling) or a
subsystem in a multi-level structure. The components may be simple or complex, basic or advanced.
They may be a single computer with a keyboard, memory and printer or a series of intelligent
terminal linked to a mainframe. In either case, each component is a part of the total system and has
to do its own share of work for the system to achieve the desired goal.

Characteristics of a System
Based on the definition of system, it is observed that the following characteristics are present in all
systems:
1. Organization: Organization implies structure and order. It is the arrangement of components that
helps to achieve its objectives. In the design of a business system for example, the hierarchical
relationship starting with the president on top and leading downward to the blue-collar workers
represent the organization structure. Likewise a computer system is designed around an input
device, a central processing unit, an output device and one or more storage units. When these units
are linked together, they work as a whole system for generating information.
 2. Interaction: This refers to the procedure in which each component functions with other components
of the system. In an organization for example, purchasing must interact with production advertising
with the sales and payroll with personnel. In a computer system also, the C.P.U must interact with
other units to solve a problem. In turn, the main memory holds program and the data that the
arithmetic units use for computation. The inter-relationship between these components enables the
computer to perform.
3. Interdependence: Interdependence means that component of the organization or computer systems
depend on one another. They are coordinated and linked together in a planned way to achieve an
objective.
4. Integration: Integration is concerned with how a system is tied together. It is more than sharing a
physical part or locations. It means that parts of the systems work together within the system even
though each part performs a unique function. successful integration will typically produce a better
results as a whole rather than if each component work independently
5. Central Objective: - Objective may be real or stated. Though a stated objective may be the
objective. It is quite common that organization may set one objective and operate to achieve
another. The important point is that users must be aware of the central objective well in advance.

Elements or components of a system

In most cases, system analysis operates in a dynamic environment where change is a way of life.
Therefore, the following components must be present in every system to make it adapt to a change.
They are:
i. Input
ii. Processing
iii. Output
iv. Feedback
v. Environment
vi. Boundary
vii. Interface

Input:- A systems input consist of those things it receive from its environment that affect it and are
necessary for its operation. These are the capturing and assembling elements that enter the system
to be processed e.g. raw materials influence the manufacturing system. People, skills, money, data
etc. can all feature as input. The essential elements of input are:
Accuracy: If the data is not accurate the output will be wrong
Timeliness: - If data is not obtained in time, the entire system falls into arrears.
Proper format: The input must be available in proper format
Economy: - the data must be produced at the lease cost.
 File: - As the word implies flies are used to store date. Most of the input necessary for the system
may be historical data or it may be possible that there are generated from within the system. These
are stored in files either in terms of isolated facts or in large volume.
Generally, inputs are divided into three
Primary inputs:- There are basic raw materials for the system e.g. time card and foodstuff delivery
daily to a restaurant’s kitchen
Maintenance inputs: They are deliberate mechanisms established by the organization to maintain a
proper operation of the system. E.g. routine updating of information use by system, like updates of
employee’s payroll records, promotion letter, demotion letter etc.

Secondary inputs: These come to the system from diverse corners of its environment e.g.
product quality standard and environmental regulations.

 Processing:- It refers to the transformation process, with convert input to output. It refers to the
day-to-day work of the system. The most elemental unit of any system is the procedure. Processing
is the execution of the set of procedures required of each component of the system for the
successful attainment of the systems objective
 Output: - This element gives the outcome to the ultimate destination in a form usable by the
recipient. This is the result of all the systems activities e.g. printed reports, pay cheque, finished
goods, telephone calls etc. output manifest in three forms
a. Primary outputs:- This meet the objectives of the system
b. Maintenance output- contributes to the system feedback
c. Secondary output affects the environment of the system

NB: Generally, it is not necessary to consider all the inputs and outputs of a system, but only
these inputs that affect the output and only those outputs with are relevant to the system
objectives.

FEEDBACK: - This is the process by which all the outputs of the system are measured against
required standards to see if the system performance is satisfactory or otherwise. Various between
the standards and the obtained outputs prompt the decision-maker, who acts as a control to modify
the inputs or the processes or the overall system itself. This feedback measures of output against a
standard helps to a achieve control in a dynamic system.

ENVIRONMENT: - Is an area within with an organization operates. It is the source of external

element that supersedes on the system it determined how a system function

BOUNDARY AND INTERFACE:- Boundary of a system is the limit that identifies its components and
the interface is a point at which the business has interrelationship with another system.

CLASSIFICATION OF SYSTEM
 A system being the smallest conceptual unit of holistic nature and being made up of many
components, its behavior can only be understood by classifications. To analyze any system, the
following questions must be answered to know which class the system belongs.
- What are the inputs, processes and output?
- What are its boundaries?
- What feedback and control mechanisms are in place?
- How can it’s efficient and effectiveness be measured?

The business organization, for instance, receives inputs from the society in the form of
people, materials, money and information. It transforms these into output of products, services and
rewards to the organizational members sufficiently large to maintain their participation. Therefore,
systems are classified according to these topical headings:

Open or Closed System

An open system is a system connected to and which interacts with its environment. It takes in
influences from its environment and also influences this environment by its behavior. An
organization is an example of open system because it interfaces and interrelates with others in the
external environment. Management decisions are influenced by or have an influence on suppliers,
customers and competitors as well as whole society and government.
As noted earlier, every system has a boundary. An open system will have considerable cross-
influences with the external environment across its boundary. An open system has a relationship
with environment that has both prescribed and uncontrolled elements, all social system, including
business organization, have some interaction with the external environment and are therefore open
system.

On the other hand, a closed system is isolated from the external environment and independent of
it, so that no external influence affects the behavior of the system, nor does the system exert anti
influence on its external environment. A closed system does not have inputs or output: it has not
environment. There may not be strictly closed system, but the term is often used of systems that
interact only partially with their environment. E.g. Vacuum and Thermostat.

Deterministic or Probabilistic (Stochastic) Systems

A deterministic system is one in which various states of activities follow on from each other in a
completely predictable way; that is given that A will happen, B must happen, then C. In a
deterministic system, the value of certain variables and /or the relationship between them is known.
Deterministic systems are predictable system where the output can be forecast from the input.
Examples of deterministic systems are computer programs and machines.
While in a probabilistic system, some states or activities can be predicted with certainty while
others will occurs with varying degree of probability distribution to predict an expected outcome or
range of possible outcomes. In business, much system can be regarded as probabilistic. For example,
the arrival of customers in a shop is probabilistic

Shared and Overlapping System

Since the subsystem are interdependent, one subsystem belonging to one or more system such
that a change to one subsystem will affect other subsystems and the overall system means the
system has overlapping subsystem. A shared system has its subsystem shared between many
systems and a high level of coordination is required in the event of change, which may not be
desired by all the subsystem.
Share systems are less flexible while overlapping system required a sound economical
arrangement. This is a usual practice on operation may be shared to avoid overlaps while the
processes may be designed to overlap.

Stable and Self organizing system

A stable system is one in which relationships are well defined, but which when disturbed by
environment factors, is capable of retuning to its original state. For example, a stock control system
using a recorder level based on forecasts of demand would immediately cause a purchase order to
be made when the stock reached the re-order level. This is known as negative feedback mechanism,
which records when the system tends to deviate from its limits. Where the system has several such
feedback loops (whereby, if one loop goes out of control, another is activated to restore control). It
is known as an ultra-stable system. While a self-organizing system is one, which adapts and reacts to
stimulus. The ways it adapts is uncertain and the same input, (stimulus) to the system will not always
produce the same output (response). Social and psychological systems come within this category. A
familiar example of a self-organizing system is the thermostat controlled heating system found in
many hones that automatically monitors and regulates itself to maintain a desired temperature.
Examples of self-organizing system are as follows:
a. A bank that pays a rate of interest to depositors depending on the amount of money in the
deposit account. Interest calculations (the output of the system is the calculated interest) will vary
as the money in each depositor’s account goes up or down.

b. A stock recording system where the quantity of a stock item that is ordered from a supplier varies
according to changes in usage of item. For example, if consumption of stock its AB345 goes up 20%
per week, the recorder quantity of the item will be increased.

Adaptive or Cybernetic Systems

The word “cybernetic” is derived from the Greek word for steersman. Controls make it possible to
steer a system toward its goal, or to adapt an ability to survive changes in the environment. A
system that has the ability to change itself or its environment in order to survive is an adaptive
system
 Cybernetics is concerned with exceedingly complex system that adapt continually. They are control
systems that are self-regulating, thereby maintaining equilibrium. A human being is a very
successful cybernetic system. Cybernetic is based on the principle of “feedback” where information
on events is feedback into the system which then reacts accordingly. Organizations are example of
adaptive systems, since they can modify themselves to meet the demands of a changing
environment. Information sources, both within and outside the organization.

Business as an example of System

Any business, private or public is regarded as a system because there is an expected perfect
interaction required within its elements as well as between it and outside world. Examples are:
- The private enterprise, which could be one man, partnership or joint stock business.
- The public sector, State or Federal owned, all which are either non-commercial or Charitable
foundations, Educational or government departments like health, fire, police, water-supply,
communication and transportation.
Any business as a system, consist of the following component
1. Physical units:- which includes the building, raw materials, finished products
2. Procedural unit:- consisting or order processing routines credit checking and updating procedures
3. Conceptual units:- containing the statement of policy as well as the market for product
Each of the above units consists of numerous elements, which build up the system as a whole. This
is given in a respective order as stated above.
i. The physical elements are the physical units including the transport routes, the warehouses and the
retails shops.
ii. The procedural units have the code of practice, legal requirement among other as its composing
elements.
iii. The conceptual unit contains monetary system and political ideologies as elements.
iv. The social units have made unions, suppliers, customers as elements
FACTORS OF BUSINESS
Business can be factored into a number of subsystems, all which play supportive role in enduring the
success of business as systems. These systems include the following:
i. The functional environment, which can be marketing or purchasing divisions
ii. The transformation environment, which is the production division.
iii. The Accounting environment, which includes the Bills or Payroll division
iv. The Management, which is the core-the Personnel. All business, even the federal owned headed by
the so-called Management Directors, Chief Executive or Ministers directly or indirectly depends on
information for both internal and external demands, supplies, purchase/imports, sales and every
other managerial function.

INTRODUCTION
As levels of information needed for day to day activities increases, more data are being stored and
linked; man began to analyze this information bringing further detail, creating entire management
reports from the raw, stored data.

Definition
MIS is an analytical tool that enables the integration of data from different business applications,
Internet, different modules and business functions. It converts data from internal and external sources
into information. This information is communicated in an appropriate form to managers at different
levels in a business to enable them to make effective decisions.

MIS is the acronym for Management Information Systems. It refers broadly to a computer-based
system that provides managers with the tools for organising, evaluating and efficiently running their
departments.

A Management Information System (MIS) is a process that provides information needed to manage
organisations effectively. It is regarded to be a subset of the overall internal procedures in a business,
which cover the application of people, documents, technologies, and procedures used by management
personnel to solve business problems such as costing a product, service or a business-wide strategy.
Management Information Systems are distinct from regular information systems in that they are used
to analyse other information systems applied in operational activities in the organisation.
Goal of MIS
The overall goal of Management Information Systems is to help in decision making process, which
can be applied in areas like planning, directing, forecasting, coordinating, controlling.

Characteristics of MIS
MIS should have the following features:
 Multidimensional view of data
 Advanced calculation options
 Current position statement of a company
 Business reviews of specific sectors
 working with time series and trend modeling
 Option of integrating data from different data sources
 Ability to process and analyze huge amount of data
 plan input and review of data also through the excel interface.

Advantages of MIS
An MIS provides the following advantages:
i. It facilitates planning: MIS improves the quality of plants by providing relevant information for
sound decision - making. Due to increase in the size and complexity of organizations, managers have
lost personal contact with the scene of operations
ii. It minimizes information overload: MIS change the larger amount of data into summarized form
and thereby avoids the confusion which may arise when managers are flooded with detailed facts
iii. MIS encourages decentralization: Decentralization of authority is possibly when there is a system
for monitoring operations at lower levels. MIS is successfully used for measuring performance and
making necessary change in the organizational plans and procedures
iv. It brings coordination: MIS facilities integration of specialized activities by keeping each
department aware of the problem and requirements of other departments. It connects all decision
centers in the organization.
v. It makes control easier: MIS serves as a link between managerial planning and control. It improves
the ability of management to evaluate and improve performance. The use of computers has increased
the data processing and storage capabilities and reduced the cost.
vi. MIS assembles, processes, stores, retrieves, evaluates and disseminates information.

Problems of MIS
The bottlenecks associated with MIS are as follows:
 It is highly sensitive, thus requires constant monitoring
 Budgeting of MIS is extremely difficult
 Quality of outputs is governed by the quality of inputs
 It lacks flexibility to update itself
 Effectiveness usually decreases due to frequent changes in top management
 It takes into account only qualitative factors and ignores non-qualitative factors like morale of
worker, attitude of worker etc.

Basic Concepts of MIS

Here we want to look at those components or terms associated with Management Information
Systems. These include data, information, instruction, database, Decision Support Systems (DSS),
and application.
 Data
Raw facts often in the form of figures, numbers, texts, images, and sounds obtained from
observations, surveys or experiments that are suitable for storage in computer used as a basis for
making calculations or drawing conclusions. Data represent quantified actions, events or objects.
 Information
The meaningful material derived from the computer data by organizing and interpreting it in a
specific way. Information is actually a data that has been put into a meaningful context and
communicated to the receiver who will use it to make appropriate decisions.

 Instruction
This is a code that tells the computer to perform a particular operation. A set of instructions ordered to
produce a particular action when acted on data is known as a programme.
 Relationship between Data, Information and Instruction
From the above definitions, it is a clear fact that data constitutes the raw materials for producing
information. Conversely, information is a meaningful term gotten after processing data. But one thing
we should not forget is that, processing has to be in specified manner. That is to say, there must be a
third party for data to be converted into information, hence, the importance of instruction. It is the
instruction that indicates how the data will be converted into the meaningful information. Therefore,
it is the instruction that specify the operation to be carried out.
 Database
Database is a systematically arranged collection of computer data structured so that it can be
automatically retrieved or manipulated. In all management information systems, it is the database that
stored the accessible information in order to facilitate organization’s decision making or planning.
Database is a collection of information organized in such a way that a computer program can quickly
select desired pieces of data. You can think of a database as an electronic filing system.
Traditional databases are organized by fields, records, and files. A field is a single piece of
information; a record is one complete set of fields; and a file is a collection of records. For example, a
telephone book is analogous to a file. It contains a list of records, each of which consists of three
fields: name, address, and telephone number.
An alternative concept in database design is known as Hypertext. In a Hypertext database, any
object, whether it is a piece of text, a picture, or a film, can be linked to any other object. Hypertext
databases are particularly useful for organising large amounts of disparate information, but they are
not designed for numerical analysis. To access information from a database, you need a Database
Management System (DBMS). This is a collection of programs that enables you to enter, organise,
and select data in a database.

 Decision Support Systems (DSS)

The term Decision Support Systems refers to an interactive computerised system that gathers and
presents data from a wide range of sources, typically for business purposes. DSS applications are
systems and subsystems that help people make decisions based on data that is culled from a wide
range of sources. For example: a national on-line book seller wants to begin selling its products
internationally but first needs to determine if that will be a wise business decision. The vendor can
use a DSS to gather information from its own resources to determine if the company has the ability or
potential ability to expand its business and also from external resources, such as industry data, to
determine if there is indeed a demand to meet. The DSS will collect and analyse the data and then
present it in a way that can be interpreted by humans. Some decision support systems come very close
to acting as artificial intelligence agents.
DSS applications are not single information resources, such as a database or a program that
graphically represents sales figures, but the combination of integrated resources working together.

Hardware/Software
Hardware refers to objects that you can actually touch, like disks, disk drives, monitors, keyboards,
printers, circuit boards, and chips. Software exists as ideas, concepts, and symbols, but it has no
substance. Textbooks provide a useful analogy. The pages and the ink are the hardware, while the
words, sentences, paragraphs, and the overall meaning are the software. A computer without software
is like a book full of blank pages -- you need software to make the computer useful just as you need
words to make a book meaningful.
The distinction between software and hardware is sometimes confusing because they are so integrally
linked. Clearly, when you purchase a program, you are buying software. But to buy the software, you
need to buy the disk (hardware) on which the software is recorded.

Applications
Software is often divided into two categories: Systems software: The operating system and all the
utilities that enable the computer to function.
Applications software: Programs that do real work for users. Applications software (also called end-
user programs) includes database programs, word processors, and spreadsheets. Figuratively
speaking, applications software sits on top of systems software because Computer is unable to run
without the operating system and system utilities.
 Value of MIS
The value of MIS depends greatly on the user of the information not even on the producer of such
information. Information has a great impact on decision making, and hence its value is closely tied to
the decisions that result from its use. Information does not have an absolute universal value. Its value
is related to those who use it, when it is used, and in what situation it is used. In this sense,
information is similar to other commodities. For example, the value of a glass of water is different for
someone who has lost his way in Arctic glaciers than it is to a wanderer in the Sahara Desert.
Information supports decisions, decisions trigger actions, and actions affect the achievements or
performance of the organisation. If we can measure the differences in performance, we can trace the
impact of information, provided that the measurements are carefully performed, the relationships
among variables are well defined, and possible effects of irrelevant factors are isolated. The measured
difference in performance due to informational factors is called the realistic value or revealed value of
information.

TYPES OF MIS
We shall be considering the different categories in which MIS can exist. The classification is based on
the level of support that the information system provides in the process of decision making.
Management Information System can be classified according to goal or methodology in vogue in a
particular organisation.

Databank Management Information System

This kind of information system is used to store any item of data which might be useful to the
decision maker. A databank is a collection of files used by an organisation stored such that one file
may have record/fields duplicated in other files. Examples of the kind of data that might be recorded
in such a database for a given state with respect to secondary school are as follows:
o Number of schools in the state.
o Total number of secondary school tutors in the state.
o Average number of tutors per school.
o Total number of students in the state.
o Average number of students per school.
 Role of Information in the Decision Process

Each of these databases can be summarized and converted to single tabular presentations of
information of interest to management. When information from two or more time periods is
compared, trends can be observed.

Predictive Management Information System

Predictive information systems help in drawing of inferences and predictions that are relevant to
decision making. It is possible to obtain information useful for making predictions or for drawing
inferences based on the facts gathered like in the case of the example stated above. Information
obtained from these kinds of analyses is normally summarised in a two-way tabular format. And
likewise, the information often is compared over time. Managers can then use such information to
make predictions, for example to forecast costs of particular undertakings for budgeting purposes or
as a basis for predicting results if a given change is made, such as change in the number of
demonstrations with a given change in staffing.
Decision-Taking Management Information System
This is a decision system in which the information system and the decision maker are one and the
same. Management is so confident in the assumptions incorporated in the system that it basically
relegates its power to initiate action to the system itself. Airplanes carry automatic pilot systems,
which is an example of a decision-taking system. Once activated, the system itself keeps the plane on
course and at the proper speed and altitude (according to parameters determined by the pilot). Another
example of decision-taking information systems is found in modem factory production. In automobile
production, continuous inventories of parts are maintained by computer as cars move down an
assembly line. Orders are placed automatically by the computer when additional parts are needed.
This is done without the intervention of a manager.

Decision Making Management Information System

This system incorporates the value system of the organisation or its criteria for choosing among
alternatives. An organisation's values are many and varied. Considering the case of agricultural sector,
there is numerous point of discourse where meaningful decisions have to be taken for the uplift of the
sector. They include concerns for resolving farmer problems, increasing and providing for stability of
farmer incomes, and improving the quality of farm life. But they also include an intent to provide
well for staff members (training, adequate salaries, etc.) and to aid in the process of bringing about
rural economic development.

Levels of Management
There are three levels of management that could be identified in most organisations. They are: top
management cadre (strategic level), middle management cadre (tactical level), and operational group
cadre (operational level).

Top (Strategic) Management Level

This level of management coordinates the activities of the whole organisation and has a strategic view
of the organisation. This level is concerned with establishing (estimating) the overall objectives of the
organisation and in devising appropriate policies so that the objectives may be achieved.
Typical of the functions of top management are:
 long term planning
 capital investment decisions
 organisational restructuring
 middle management appointment
 acquisitions and mergers.
The top management level is the overall policy making section of the management and as such will
be actively involved in corporate planning process of an organisation.

Middle Management Level

This may be termed the tactical level of management whose overall function is to implement top
management policy. This level of management does set objectives but these objectives are more
limited in scope and are subordinate to the objectives set by the top management level.
Examples of the functions of the middle management are:
(i) Purchasing
(ii) Product planning
(iii) Sales promotion
(iv) Discount and credit policy
(v) Staff appointment
(vi) Implementation of marketing and advertising policies of the organisation.

Operational Level of Management

This level of management is concerned with the day-to-day process of supervision i.e. direction
associated with the normal activities of the organisation.

Functions of the operational level are:

 Production
 Dispatching
 Sale
 Accounting.

Often, this level of management may not be called managers but they have titles, such as charges,
heads, supervisors, chief clerical foremen, etc. Even though the work this group does involves
management, it is of different categories.

Communication among Levels of Management

It is important that these groups of management levels will be able to communicate effectively for the
purpose of achieving effective goals of an organisation. It has been observed that this group of
management levels has been able to pass all necessary information in the form of communication
within the different groups. It is important also that information from the top management level be
passed down through the usual procedure. Normally, information from top management level will not
go to the operational level first before the middle management level for adequate flow of information
within an organisation. It is a bad system of information flow and it encourages misinformation and
confusion in an organisation. Therefore, information has to be communicated from the top
management level to the operational level through the middle management level; and vice versa.

Top management level deals with more planning of information than controlling of information. This
level has little of control of information but at the middle management level, the planning and
controlling of information are proportionate (about equal). The operational level has very little to do
of planning but controls what is going on and implement the plans of top and middle management
levels.

Development of Management Information System

All levels of management need information on which to base decisions, to plan, to organise and to
control. People organise information directly by way of observing and experiencing events. But as an
organisation becomes larger and more complex, it becomes impossible for management, particularly
the middle and top management levels to observe and experience all operations. In some form of
decentralized organizations, management virtually never saw the actual events and has to rely almost
entirely on information provided through the formal and informal channels. Although much viable
information is passed through decisions, meetings and casual conversations, such methods do not
generally give a complete picture nor do they provide information in the correct form of intended use.
So, as an organisation grows, there is a shift from informal to more formal methods of disseminating
information. More formal information systems are observed through reports, operating system,
special analysis, various returns, balance sheet returns, etc. These have the advantages of
comprehensiveness, consistency, and reasonable accuracy but may suffer from the disadvantages of
not meeting the exact requirements of the problem at hand, the lack of flexibility, time lag of events
or operations to reports and costs. In spite of these possible disadvantages, the development of MIS is
virtually necessary in most organisations today.

OVERVIEW OF INFORMATION TECHNOLOGY (IT)

Under this heading, we are going to discuss the concept of information technology bringing out its
relevance in the management of information in our organisations.

Meaning of Information Technology

Information technology is the technique employed in acquiring, processing, storage and
dissemination of audio, video, pictorial, textual and other discrete information with the aids of
electronics computing devices and telecommunication gadgets. It actually combines computing with
high-speed communication links carrying information of differing sorts as sound, video, text or
ordinary image. Technologies such as cell phones, pagers fax machines, and portable computer has
reduced the meaning attached to physical locations in terms of time, work, and leisure to mere
formalities.

Reasons for Studying Information Technology

Some of the purposes for learning about information technology are to:
 maximize the available information.
 save time of service delivery.
 reduce cost of running an organization.
 reduce complexities in our organization.
 understand how best to use systematic approach in processing and management of information
 improve on the quality of production.

The Ethics of Information Technology

By the ethics of information technology we mean the principles and values governing the use of
telecommunication gadgets in relation to information dissemination. Some of the ethical issues are
highlighted below:
i. Complexity: The internal working of information technologies is so complex that not even the
manufacturers or the system designers can effectively describe the workings. Its inherent digital
properties of ON/OFF makes it look simple, but putting together all that is needed for effective
information dissemination bring out the complexity factor.
ii. Speed: Storage, retrieval, and transmission of great amount of information require greater speed
and scale not obtainable before. This is essentially necessary in the area of data security and personal
privacy. It is worth knowing that information can never be considered totally secure against access.
iii. Predictability: Information technology is less predictable and reliable when compared to other
pervasive technologies as electricity, television, and automobiles. This is because computers and
communications require more spontaneous responses especially in real time transaction.

Application of IT in Information System

There are three areas of application of IT in information systems, viz:
i) Office support systems
ii) Data processing
iii) End user computing.

Office Support Systems

The specific area of IT applications in our offices includes text handling, data storage and referencing,
microform, and telecommunication.
A word processor can either be a dedicated word processor or a general purpose micro-computer
utilising a word processing programme. Word processors are keen in producing standard letters or
reports which requires extensive editing and revision. Word processors improve both productivity and
quality. The advent of photocopier has immensely contributed to present day text handling in offices
especially with the case of colour and graphics. Enhancement in Desk Top Publishing (DTP) was
facilitated by the developments in software and laser printers. This enables professional quality
books, reports, literal arts and other documentations to be produced in-house.
Information Technology has made it possible to store and access vast volumes of data in our
organisations or offices. VDUs and other terminal accessories are used in accessing files maintained
in disk backing storage. This facility is invaluable for current operations and for internal information,
but where there is the need for repeated reference of information in a visual form, then, either
computer output or microform. Another IT invokes is teletext where existing television networks are
used as a channel for supplying information. An offshoot of teletext is view-data that provides
electronic reference to material interactively. That is, the user can interrogate the data held in the
system and also supply information to it. The system uses a combination of telephones, computers,
televisions and communication networks. A known view-data is the British Telecom called
PRESTEL.
Another special aspect to consider as far as IT application to office is concern is telecommunication.
The facilities that were classified under telecommunication include electronic mail, voice mail,
networks, tele-conferencing, facsimile and electronic data interchange. All these technologies will be
emphasised in more detail in the next unit.
Microforms are photographically reduced information on files. Computer information on disk is fed
into a machine called a microform recorder which read the data on the disk and copy it onto the
microform. Full size copies can be printed on desire. Reference and archive material is ideally suited
for computer output microform. Example is the libraries and stores. Document image processing is
another form of electronic filing. A document is passed through a scanner, translated into a digital
form, and a digitised image is then stored electronically.

Data Processing
This is otherwise refers to as transaction processing. This is necessary in order to ensure that day-to-
day activities of the organisation are processed, recorded and operated upon. These systems perform
the essential role of collecting and processing the daily transactions of the organisation. They include
all forms of ledger keeping, accounts receivable and payable, invoicing, credit control, rate demands
and stock movements. The availability of mini and micro computers has made distributed data
processing more feasible and popular. Transaction processing is essential to keep the operations of the
organisation running smoothly and provides the base for all other internal information support.

End User Computing

Ordinarily, the individuals who had direct contact with computers were the system programmers,
analysts, designers etc. But the advent of personal computers, computer terminals, networks of all
sorts, user-friendly software, databases and different utility programmes has turned the direction
drastically, which in turn has multiply the growth of end-user computing.
Some of the applications that support the end user computing are:
i. Decision Support Systems (DSS)
ii. Expert Systems
iii. Executive Information Systems
iv. Text handling and publishing
v. Computer based training
vi. End user programming
vii. Search and retrieval of information.

The objective of decision support system is to support managers in their work, especially decision
making. DSS tend to be used in planning, modeling, analysing alternatives and decision making. For
an interactive computer –based system to exist, the following criteria has to be met:
 there must be a large database
 large data manipulation
 complex inter-relationships among fields or records in the database
 analysis by stages in case of iterative problem
 communication involving many personnel
 judgement is required.

An expert system is a computer system which has an encoded experience and specialised knowledge
of an expert. It uses a reasoning which bears some resemblance to human thought. The two major
components of an expert system are knowledge base and inference engine. The knowledge base
encompasses the human expertise or facts about the area in question. The inference engine is the
totality of the set of rules to be applied in other to elicit fact from the knowledge base which will help
in making the final conclusion.

TECHNOLOGIES FOR INFORMATION SYSTEM

In this unit, we are going to discuss the notable technologies present today in offices and
organisations. We are to explain in detail terms each technology with respect to its relevance in the
management of information in our organisations. Listed and explained below are the notable
technologies present today in relevance to MIS in our various business organizations.

Electronic Mail
Electronic mail is a method of transmitting data, text files, digital photos, or audio and video files
from one computer to another over an intranet or the Internet. E-mail is a method of exchanging
digital messages across the internet or other computer network. Originally, e-mail was transmitted
directly from one user to another computer. This required both computers to be online at the same
time. It enables computer users to send messages and data quickly through a local area network or
beyond through the Internet. E-mail widespread has become a major development in business and
personal communications in recent years. The e-mail is a store and forward technology.
E-mail users create and send messages from individual computers using commercial e-mail
programmes or mail-user agents (MUAs). Most of these programmes have a text editor for
composing messages. The user sends a message to one or more recipients by specifying destination
addresses. An email message consists of two components, the message header, and the message body,
which is the e-mail's content. The message header contains control information, including, minimally,
an originator's email address and one or more recipient addresses. Usually additional information is
added, such as a subject header field. Originally a text-only communications medium, email was
extended to carry multi-media content attachments.
The address of an e-mail message includes the source and destination of the message. Different
addressing conventions are used depending upon the e-mail destination. An interoffice message
distributed over an intranet, or internal computer network, may have a simple scheme, such as the
employee‘s name, for the e-mail address. E-mail messages sent outside of an intranet are addressed
according to the following convention: The first part of the address contains the user‘s name,
followed by the symbol @, the domain name, the institution‘s or organization’s name, and finally the
country name.
A typical e-mail address might be igwejoe@ebsu.edu. In this example igwejoe is the user‘s name;
ebsu is the domain name—the specific company, organisation, or institution that the e-mail message
is sent to or from; and the suffix edu indicates the type of organisation that ebsu belongs to—com for
commercial, org for organisation, edu for educational, mil for military, and gov for governmental. An
e-mail message that originates outside the United States or is sent from the United States to other
countries has a supplementary suffix that indicates the country of origin or destination.
Examples include uk for the United Kingdom, ng for Nigeria, fr for France, and au for Australia. E-
mail data travels from the sender‘s computer to a network tool called a message transfer agent (MTA)
that, depending on the address, either delivers the message within that network of computers or sends
it to another MTA for distribution over the Internet. The data file is eventually delivered to the private
mailbox of the recipient, who retrieves and reads it using an e-mail programme or MUA. The
recipient may delete the message, store it, reply to it, or forward it to others.
E-mail messages are not secure if e-mail encryption is not used correctly.
Many MTAs used to accept messages for any recipient on the Internet and do their best to deliver
them. Such MTAs are called open mail relay. This was very important in the early days of the Internet
when network connections were unreliable. If an MTA couldn't reach the destination, it could at least
deliver it to a relay closer to the destination. The relay stood a better chance of delivering the message
at a later time. However, this mechanism proved to be exploitable by people sending unsolicited large
e-mail and as a consequence very few modern MTAs are open mail relays, and many MTAs don't
accept messages from open mail relays because such messages are very likely to be spam.

Teletext/View-data
Teletext is written information on television. It is also a term used to refer a system of broadcasting
news and other information in written form that can be viewed on specially equipped television sets,
superimposed on, or in place of, the picture. It is a system for transmitting commercial and other
information through existing television networks. Teletext is a one-way, or non-interactive, system for
transmission of text and graphics via broadcasting or cable for display on a television set. A decoder
or microchip resident in the TV set is needed to extract the teletext information. Teletext can be
transmitted over one-way cable or over-the-air broadcasting via radio or television. In the case of TV,
it can occupy a full channel or be encoded in the vertical blanking interval, or VBI.
View-data is a videotext implementation. It is a type of information retrieval service in which a
subscriber can access a remote database via a common carrier channel, request data and receive
requested data on a video display over a separate channel. View-data is an interactive information
system in which text and graphic data stored in a central computer are transmitted over telephone
lines to be displayed on a modified television receiver. View-data is different from teletext in some
ways. For instance, users can interrogate the data held in the system and also supply information to it.
And also the view-data system uses a combination of telephones, computers, television, and
communication networks. View-data is still in use today in the United Kingdom, mainly by the travel
industry. Travel agents use it to look up the price and availability of package holidays and flights.
Fax
Facsimile transmission is a technology that allows an exact copy of an original document including
diagrams, pictures and text to be electronically in digitised form over telephone lines and reproduces
in its original form at the receiving end. It performs similar function as photocopying machine with
the difference of using a telephone to cover a long distance. The most recent and improved fax
machine can interactively be used to transmit both voice and data simultaneously.
Although businesses usually maintain some kind of fax capability, the technology has faced
increasing competition from internet-based alternatives. However, fax machines still retain some
advantages, particularly in the transmission of sensitive material which, if sent over the Internet
unencrypted, may be vulnerable to interception. In some countries, because electronic signatures on
contracts are not recognised by law while faxed contracts with copies of signatures are recognised,
fax machines enjoy continuing support in business.
In many corporate environments, standalone fax machines have been replaced by "fax server" and
other computerised systems capable of receiving and storing incoming faxes electronically, and then
routing them to users on paper or via an e-mail (which may be secured). Such systems have the
advantage of reducing costs by eliminating unnecessary printouts and reducing the number of
inbound analog phone lines needed by an office.

Bulletin Board System

This is an online forum used to exchange e-mails, chat, and access software. Bulletin board system is
a computer or an application dedicated to the sharing or exchange of messages or other files on a
network. Originally an electronic version of the type of bulletin board found on the wall in many
work places, the BBS was used to post simple messages between users. The BBS became the primary
kind of online community through the 1980s and early 1990s, before the World Wide Web arrived.
Most BBSes are devoted to a particular subject, although some are more general in nature. Among
special interests represented on BBSes are dentistry, law, guns, multi-player games, Druidic practices,
and information for the disabled. A significant number of BBS sites offer "adult-oriented" chat and
images that can be downloaded. The BBS is often free, although some charge a membership or use
fee. Many BBSes have Websites, and many Internet access providers have bulletin board systems
from which new Internet users can download the necessary software to get connected. The BBS has
its own culture and jargon. For example, a sysop is the person who runs the site. Online chat became
widely popular through the BBS and many chat acronyms originated there.

Voice- Mail
Voicemail (also known as voice-mail Systems (VMS) or message bank) is a centralised system of
stored telephone messages that can be retrieved later. The term is also used more broadly to denote
any system of conveying a stored telecommunications voice message, including using an answering
machine. It is electronic communication system that stored digitised recording of telephone messages
for later playback.
Voicemail systems are designed to convey a recorded audio message to a recipient. To do so they
contain a user interface to select, play, and manage messages; a delivery method to either play or
otherwise deliver the message; and a notification ability to inform the user of a waiting message.
Most systems use phone-networks, either cellular or land-line based, as the conduit for all of these
functions. Some systems may use multiple telecommunications methods, permitting recipients and
callers to retrieve or leave messages through multiple methods.
Simple voicemail functions as a remote answering machine using a touch-tone as the user interface.
More complicated systems may use other input devices such as voice or a computer interface.
Simpler voicemail systems may play the audio message through the phone, while more advanced
systems may have alternative delivery methods, including email or text message delivery, message
transfer and forwarding options, and multiple mailboxes.
Notification methods also vary based on the voicemail system. Simple systems may not provide
active notification at all, instead requiring the recipient to check with the system, while others may
provide an indication that messages are waiting.

Almost all modern voicemail systems use digital storage and are typically stored on computer storage
devices.

Telnet
This is an internet service that makes a user‘s computer a terminal to other computers on the internet.
It presents a user to appear to be physically using another computer which is away from his own
computer. Individual on his own can run programs, delete files, view content files, modify, save, lock
files in another or remote computer.
To cut short, telnet is a terminal emulation program that allows computer users to connect
interactively to a server and access remote sites. It was the first packet-switched network service that
was available to the general public. Various commercial and government interests paid monthly fees
for dedicated lines connecting their computers and local networks to this backbone network. Free
public dialup access to telnet, for those who wished to access these systems, was provided in
hundreds of cities throughout the United States.

Network
A computer network, often simply referred to as a network, is a group of computers and devices
interconnected by communications channels that facilitate communications among users and allows
users to share resources. It is a system of two or more computers, terminals, and communications
devices linked by wires, cables, or a telecommunications system in order to exchange data.
The network may be limited to a group of users in a local area network, or be global in scope, as the
Internet is. Network users are able to share
files, printers, and other resources; send electronic messages; and run programs on other computers. A
computer network allows sharing of resources and information among interconnected devices.
In the 1960s, the Advanced Research Projects Agency (ARPA) started funding the design of the
Advanced Research Projects Agency Network (ARPANET) for the United States Department of
Defence. It was the first computer network in the world. Development of the network began in 1969,
based on designs developed during the 1960s
A network has three layers of components: application software, network software, and network
hardware. Application software consists of computer programmes that interface with network users
and permit the sharing of information, such as files, graphics, and video, and resources, such as
printers and disks. One type of application software is called client-server. Client computers send
requests for information or requests to use resources to other computers, called servers that control
data and applications. Another type of application software is called peer-to-peer. In a peer-to-peer
network, computers send messages and requests directly to one another without a server intermediary.
Network software consists of computer programmes that establish protocols, or rules, for computers
to talk to one another. These protocols are carried out by sending and receiving formatted instructions
of data called packets. Protocols make logical connections between network applications, direct the
movement of packets through the physical network, and minimise the possibility of collisions
between packets sent at the same time.
Network hardware is made up of the physical components that connect computers. Two important
components are the transmission media that
carry the computer's signals, typically on wires or fibre-optic cables, and the network adapter, which
accesses the physical media that link computers, receives packets from network software, and
transmits instructions and requests to other computers. Transmitted information is in the form of
binary digits, or bits (1s and 0s), which the computer's electronic circuitry can process.
A network has two types of connections: physical connections that let computers directly transmit
and receive signals; and logical or virtual, connections that allow computer applications, such as e-
mail programs and the browsers used to explore the World Wide Web to exchange information.
Physical connections are defined by the medium used to carry the signal, the geometric arrangement
of the computers (topology), and the method used to share information. Logical connections are
created by network protocols and allow data sharing between applications on different types of
computers, such as an Apple Macintosh or a personal computer (PC) running the Microsoft
Corporation Windows operating system, in a network. Some logical connections use client-server
application software and are primarily for file and printer sharing. The Transmission Control
Protocol/Internet Protocol (TCP/IP) suite, originally developed by the United States Department of
Defence, is the set of logical connections used by the Internet, the worldwide consortium of computer
networks. TCP/IP, based on peer-to-peer application software, creates a connection between any two
computers.

Teleconferencing and Videoconferencing

Tele-conference is an offshoot of one-to-one telephone conversation. It allows many people to be
simultaneously connected so that discussion can take place even when they reside in different places
at the time. The impact it creates facilitate speedy gathering and assessing of information in an
organisation. Teleconferencing has only one shortcoming, which is its inability to identify or
authenticate the speakers during meeting.
Video-conferencing is the technology where participants in different places connected by both audio
and video links hold meetings. Though videoconferencing is far more expensive than
teleconferencing, it solves the problem of user identification. An example is MTN e-Presence.

Information system categories

Given the complexity of information processing and the varying degrees or
levels into which data and processes can be structured, depending on the
problem or issue, several categories of information systems are required to deal
with all the organisation’s information needs

Different types of information systems must be developed to meet the whole

gamut of information needs in a company: systems for processing transactions,
management information systems and decision support systems. The various
information system categories remain coherent through their integration in a
common data architecture.
Transaction Processing Systems (tps)
Transaction processing systems are the cornerstones of a company’s information
system and compile their daily business operations. Many companies cannot
operate without this type of system. As operations are carried out in the
company, transaction processing systems gather, process and store data and
reflect business transactions such as sales, purchases, payments, etc.
Transaction processing systems are the most defined or structured information
processes in the organisation, automating the central core of its operations.
Their purpose is to improve the company’s routine activities. The most common
transactions include invoicing, payrolls, production and reception of orders.
Companies aim to carry out these activities quickly, systematically and
efficiently. All these activities are carried out at the operative level in any
organisation and have similar common characteristics:
– These operations are repeated many times in companies.
– The way these transactions are carried out is very similar in all companies.
– The activities can be separated into well understood stages (procedures) that
can be described in detail.
– There are very few exceptions to the standard procedures.
The above characteristics allow routines to be established for managing
transactions. The large volume of transactions at an organisation’s operational
level leads many companies to try and develop more efficient and effective ways
of processing the data generated through this type of activity.
Transaction processing systems are faster and more accurate than the manual
procedures used to perform the same routine activities. A transaction processing
system replaces manual procedures with computer-based procedures to perform
well structured routine tasks. Transaction processing system output may take the
form of transaction documents or database queries.

Transaction documents
Many transaction processing systems produce transaction documents, such as
invoices, purchase orders or payroll lists. These documents may be classified as
action documents or information documents.
 .Action documents
Action documents imply that some kind of action is taken. For example, an
airline ticket guarantees that a seat on an aeroplane is reserved, or a bank has
to pay out money when a cheque is presented.
 Information documents
Information documents confirm that a transaction has taken place or informs
about one or various transactions. For example, a bank transfer slip with details
of the transfer, or a breakdown of credit card payments that accompanies the
credit card bill.

Database queries
A wide variety of information can be extracted from a database using a database
management system and user-oriented fourth generation languages. These
queries can provide lists of all transactions processed during a specific time
period, or error reports with a list of erroneously processed transactions.

HOW INFORMATION SYSTEM IMPACTS ORGANISATIONS AND BUSINESS FIRMS:

Information systems have become integral, online, interactive tools in the operations and
decision making of the firm. Information systems created a impact on the business form the
following point of view:

Economic Impacts:
IT changes both the relative costs of capital and the costs of information. IT can be viewed
as a factor of production that can be substituted for capital and labor. IT also affects the cost
and quality of information and changes the economics of the information. IT helps firms
contract in size because it can reduce the transaction cost. Use of networks can help firms
lower the cost of market participation. IT can reduce internal management costs. It helps to
oversee the large number of employees in the firm.
Organizational and behavioral impact: Following issues suggests the changes in the
behavior of the firm:
In complex organizations IT is more useful.
IT flattens organization: IT facilitates flattening of hierarchies by broadening the staffing
levels to improve the management efficiency. IT pushes decision making rights lower in the
organizations because the lower level employees receive the information and they need to
take decision without any supervision. This change also reduces the span of control in the
organization.
Postindustrial organizations and virtual firms:
In these authorities highly relies on the knowledge and competence but not on the formal
positions. More firms may operate as virtual firms in which work no longer is tied to
geographic location. It uses to link people, assets and ideas. Information systems can
reduce the number of levels in an organization by providing mangers with information to
supervise larger numbers of workers and by giving lower level employees more decision
making authority.
Increasing flexibility of organizations:
IT helps to increase the ability to sense and respond to changes in the marketplace and to
take advantage of new opportunities. In small systems Information systems helps in keeping
the track of inventory, manufacturing department. Large organizations can use IT to achieve
some of the functions of small organizations. Information systems can make the production
process more flexible.

Understanding organizational resistance to change:

Implementing information systems has consequences for task arrangements, structures,
technology and people. Information systems potentially change in organization structure,
culture, politics and work. The most common reason for failure is a political resistance to
change in the organization.
The internet and organizations:
The internet mainly WWW is beginning to have an important impact on the relationships
between the firms and external entities and even on the organization of business processes
inside the firm. The internet increases the accessibility, storage and distribution of
information and knowledge for organization.

THE IMPACT OF IT ON MANAGEMENT DECISION MAKING:

IT and systems helps to reduce information uncertainty which results in improvement in
decision making. The positive impact of IT on management decision making is measurable
form productivity measures and the overall performance of the firm. Here a role of a
manager is very complex since manager is responsible to take various types of decisions.
Manager‘s responsibility ranges from making decisions, to writing reports, to attending
meetings etc. This is more understandable by the classic model of management. There are
some functions of a manager which could be described as follow: planning, organizing, co-
coordinating, and controlling which can be called as formal functions of manger. But it is
unsatisfactory to understand the detail working of manager. This can be depicted by some
behavioral models.

Behavioral models:
Behavioral models state that the actual behavior of manager appears to be less systematic,
more informal, less reflective, more reactive, and less organized one. Manager‘s behavior
has five attributes:
Managers perform a great deal of work without stopping the work.
Managerial activities are fragmented.
Managers prefer investment in terms of ROI (Return on Investment) terms.
They prefer oral communication.
Managers give high priority to maintain the system towards the achievements of goals.
Managerial roles fell into three categories as interpersonal roles, informational roles and
decisional roles. There are several models of decision making:

Rational model: As per this model of human behavior an individual identifies the goals,
ranks all the possible actions by their contribution towards the goals.

Organizational Model: It considers the structural and political characteristics of an

organization.

Bureaucratic model: It is used to preserve the organization i.e. to reduce the uncertainty.
Political model: It gives the working of organization as a result of political bargains struck
among the key leaders and interest groups.

Information systems and business strategy:

Business strategy is a set of activities and decisions. This helps in strategic planning of an
organization. It determines the decisions related to products and services, competition, long
term goals. To understand how IT fits into the strategic planning, it is necessary to consider
the three levels of business strategy such as Business level strategy, firm level strategy,
industry level strategy.

Business level strategy: It is based on the value chain model for managing supply chain. It
is concerned with the leveraging technology, information system products and services,
systems to focus on market trends, supply management and customer relationship.

Firm level strategy: It focuses the usability of information technology. It helps to understand
the concept of enhancing core competencies,
Industry level strategy: It analyzes the strategy at industry level. The principal concept of
this strategy is information partnership, the competitive forces model, business systems, and
network economics.
MIS DEVELOPMENT CYCLE

Management and control

SPIU phases related to management controls.

The SDLC phases serve as a programmatic guide to project activity and provide a flexible but
consistent way to conduct projects to a depth matching the scope of the project. Each of the SDLC
phase objectives are described in this section with key deliverables, a description of recommended
tasks, and a summary of related control objectives for effective management. It is critical for the
project manager to establish and monitor control objectives during each SDLC phase while executing
projects. Control objectives help to provide a clear statement of the desired result or purpose and
should be used throughout the entire SDLC process. Control objectives can be grouped into major
categories (domains), and relate to the SDLC phases as shown in the figure.

To manage and control any SDLC initiative, each project will be required to establish some degree of
a work breakdown structure (WBS) to capture and schedule the work necessary to complete the
project. The WBS and all programmatic material should be kept in the "project description" section of
the project notebook. The WBS format is mostly left to the project manager to establish in a way that
best describes the project work.

There are some key areas that must be defined in the WBS as part of the SDLC policy. The following
diagram describes three key areas that will be addressed in the WBS in a manner established by the
project manager.
 Work breakdown structured organization

Work breakdown structure.

The upper section of the work breakdown structure (WBS) should identify the major phases and
milestones of the project in a summary fashion. In addition, the upper section should provide an
overview of the full scope and timeline of the project and will be part of the initial project description
effort leading to project approval. The middle section of the WBS is based on the seven systems
development life cycle phases as a guide for WBS task development. The WBS elements should
consist of milestones and "tasks" as opposed to "activities" and have a definitive period (usually two
weeks or more). Each task must have a measurable output (example; document, decision, or analysis).
A WBS task may rely on one or more activities (e.g. software engineering, systems engineering) and
may require close coordination with other tasks, either internal or external to the project. Any part of
the project needing support from contractors should have a statement of work (SOW) written to
include the appropriate tasks from the SDLC phases. The development of a SOW does not occur
during a specific phase of SDLC but is developed to include the work from the SDLC process that
may be conducted by external resources such as contractors.

Baselines

Baselines are an important part of the systems development life cycle. These baselines
are established after four of the five phases of the SDLC and are critical to the iterative
nature of the model. Each baseline is considered as a milestone in the SDLC.

 Functional baseline: established after the conceptual design phase.

 Allocated baseline: established after the preliminary design phase.
 Product baseline: established after the detail design and development phase.
 Updated product baseline: established after the production construction phase.
THE PRINCIPLE OF PROJECT MANAGEMENT

What is a Project?
Before concerning ourselves with the details of project management documents and processes, it is
a good ideas to take a step back and think about what makes something a project and why it needs
to be managed differently from the day-to-day work of the organization. In other words. ‘Why do we
need project management’ There are many different definitions of what constitutes a project:

Project Management Institute- A project is a temporary endeavor undertaken to create a unique

product, service or result;

A project is a temporary organization that is created for the purpose of delivering one or more
business products according to an agreed business case.

Association for Project Management (APM) :- ‘An endeavor in which human material and financial
resources are organized in a novel way to deliver a unique scope of work of given specification often
within constraints of cost and time to achieve beneficial changes defined by quantitative and
qualitative objectives.

H. Kerner: -‘Project management is the planning organizing, directing and controlling of company
resources of a relatively short-time objective that has been established to complete specific goals
and objectives. Furthermore, project management utilizes the system approach to management by
having functional personnel (the vertical hierarchy) assigned to a specific project (the horizontal
hierarchy) (2009)

Many organization also have their own definition of what constitutes a project. Which-ever
definition you prefer does not really matter, the important thing is to be able to identify work that
constitutes a project so that it can be properly managed.

Projects have some or all of the following characteristics:

 They have a defined start and endpoint

 Once the endpoint is reached the project is over
 They are attempting to achieve something new.

Project can vary in size and small projects can be planned and managed by the same person
whereas larger projects may employ thousands of people working on many sites and require a
dedicate group in order to manage and coordinate the activities.
Every that an organization does can be categorized either as a project or process. A process is
something that is happens continually and has a low risk associated with it, whereas a project
happens once and has a relatively high level of risk.

To illustrate this, imagine an organization that has an annual staff appraisal process in which
managers make a written assessment of their staff against criteria specified by the HR
department. This is a process because even if the criteria change from year to year the
procedure undertaken by everyone involved remains more or less the same.

If the organization decided to introduce an IT system to facilitate this process then the selection,
implementation, and testing of the new system would represent a project because it would be a
one-off activity which carries the risk of exceeding the budget or timescale allocated to it

It is perfectly logical for different organizations to see the same activity in a different way. For
example, the supplier of the computer system may see this activity as a process because it is
something that is does every time it sells a system. Each time it does so, it gains more
experience, which allows it to plain and execute future installations based on what it has
learned previously.

The distinction is important because project management is used where there is a high degree
of uncertainly and risk because there is no experience of performing the activity. So in this
scenario,

The organization buying the system would treat it as a project.

The vendor would treat it as part of a process.
The vendor would see it as a process that could be refined with each interaction in order to
reduce costs and increase the quality. The distinction between projects and processes depends
on whether the organization repeats an activity often enough for it to become routine. Once
can activity is repeated often enough within an organization to become routine it is no longer
consideration a project it becomes one of their many management processes.

Types of Project
Projects can be broadly classified into engineering projects and management projects.
Engineering projects encompass civil electrical and mechanical engineering and the final
deliverables are physical objective, for example a building, reservoir, bridge, refinery, or pre-
production sample. Specialist companies or consortia invariably undertake these types of
projects.

Engineering project Management project

Physical items Intangible items

Building, bridge Office move

Refinery New IT system

M a r k e t in g
P r e - P r o d u c t io n C a m p a ig n
s a m p le

Management projects includes things like: restructuring the organization, preparing for an
exhibition, developing an IT system, launching a new marketing campaign, moving offices, or
indeed anything where the objective is to produce an end result that us not identifiable as a
physical item.

A broad range of organization does these types of project, including: commercial companies
government departments, charities and NGOs (Non-Governmental Organizations), and other
not for profit organization.

The difference between these types of project goes further than the nature of the final
deliverable. For example:

Use of Specialist Staff

Engineering projects almost always represent the day-to-day work of the organization. For
example, a construction company will employ people who specialized in building office blocks,
public building, houses, or roads.
Similarly, a manufacturing company will have design engineers to take a product from
conception, through the design process and prototyping before the work is handed over to
production engineers who will then be responsible for mass production

This is quite different from a management project where people who don’t usually run projects
may find themselves doing much the work.

Environmental Issues
The challenges of engineering projects are often physical in nature. For example, a construction
project may be held up by bad weather, the discovery of archeological remains, or other
unforeseen environmental problems.

Management projects on the other hand usually take place on the organization’s own premises
and are not subject to these sorts of issues

Specification of Final Deliverable

In the case engineering project the final deliverables is usually specified in detail at the
beginning of the project because it will need to comply with existing standards or legislation. If
the deliverable is a mechanical or electronic part it will need do fit with the rest of the finished
product.
This is not usually the case with management project where the exact form of the final
deliverable may not become clear until some of the work of the project has been done. It may
also alter as the project develops, or in response to market research or other developments.

Generally speaking, engineering projects and management projects are quite different thing and
this eBook is aimed at manager undertaking management project, rather than engineering
project.

What is Project Management?

Project need to be managed to meet their objective are defined in terms of expectation of time,
cost and quality.
For example,

Project Scope:- To move the organizations’ head office to another location . Its requirement
are:

 Time: Complete by December 2015

 Quality: Minimize distribution to productivity
 Cost: Not spend more than $125,000

The scope of the project is defined as: the total of the outputs, outcomes and benefit and the
work required to produce them.

This can change over time, and it is the project manager, responsibility to ensure the project will
still deliver its benefit. Consequently, a project manager must maintain focus on the relative
priorities of time, cost, and quality with reference to the scope of the project.

The Project Management Institute (PMI) defines project management in the following ways

Project management is the application of knowledge, skills, tools and technique to

meet project requirements.

This definition begs the question ‘Exactly what knowledge, skill, tools and techniques will I need
to successful manage a project? In order to answer this question, it is helpful to look at project
management from three different perspectives.

1. How the project fits into the organization :- This refers to both the project and the
individuals who will be involved in it, including how their responsibilities are defined and
how they interact with each other.
2. How the project will evolve over time:- This is referred to as the project life cycle and is
the chorological sequence of activities that need happen in order to deliver the project.,
whatever their difference, all projects will by definition share a similar life cycle; they
will all have a beginning, middle, and end
3. What knowledge is require to successfully manage the project:- these are usually
referred to as ‘Project Knowledge Areas’ because there are discrete area within project
management that can be considered in isolation even though they are independent.
Project manager ask 3 key questions:

1. How does the project fit into the organization?

2. How will the project evolve over time?
3. What knowledge is required to successfully manage the project?

This might sound unnecessarily complicated, but look at a project from each of these three
viewpoint will give you a much better understanding of the whole process than using any of
them individually.

To use an analogy: Imagine that a ship is traveling from London New York

The organizational perspective would be concerned with which members of the crew were
responsible for doing what and how they communicate and interact with each other.

The life cycle of the voyage would be concerned with where the ship was and what it was doing
at any point from the beginning to the end of the journey.

The knowledge area would be thing like navigation, collision avoidance, routine maintenance,
etc. Even though these activities would be taking place continuously and independently, it is still
possible to think about them as discrete areas as knowledge.

This analogy is not perfect but it does illustrate that when you are studying a complex activities
it can be helpful to look at it from a variety of perspectives in order to gain a better
understanding of the whole.

Understanding How Projects are Organized

The way in which an organization is structured is largely a result of whether its day – to- day
work is process driven or project driven.
Project Focused
These organizations’ day-to-day work involves delivering unique projects for external customers
for a set time period their management structure is designed to support projects and everyone
working in the organization is assigned to one more projects.
Examples include: Construction companies, consulting organizations, software developer and
Advertising agencies.

Process Focused
The day-to-day work of this organization predominantly involves continually delivering products
or services for external customers. Their management structure is designed to support the
process required to deliver the product or service to the end customer.
Example include: Utility companies, Manufacturing companies, Government departments
Charities and NGOs.

In reality, even the most process- focused organization will run occasional projects and some
may have parts of the organization that are dedicated to project-based working. The vast
majority of the staff in public utilities( electricity, gas, and water) will be employed to provide an
ongoing service to their customer base. But there will be some area of the business concerned
with physical or management infrastructure that is wholly project driven.

For example: Staff responsible for the development of new information system and those
responsible for construction of new physical infrastructure, like electrical substations and water
treatment plants.

The extent to which you organization has the necessary assets and processes to conduct
projects will play a significant role in your project costs and levels of risk, the less experience it
has, the higher your project costs will be and the greater degree of risk compared to a project-
driven organization.
Every organization is unique and these classifications are only useful in that they illustrate the
fact project management is likely to present more of a challenge in process-focused
organizations than in those that are project focused

It is better to think of organization structures existing on a continuum as described below. This

is not only more realistic but it allows us to begin thinking about how exactly the organizational
structure will impact a project in practical terms.

At one extreme are organizations in which employees are isolated within their functional
divisions as shown.

Corporate Management

Division A Division B Division C

Business Line Business Line Business Line

Business Line Business Line Business Line

Finance, HR, IT, etc. Business Line Finance, HR, IT, etc.

Finance, HR, IT, etc.

In this scenario, senior management allocate capital to each division, which then operate
autonomously to return as much profit as possible. Each division is completely independent of
the other and there is no mechanism to allow communication across divisions other than by
going up the hierarchy to senior management who would then have to pass the decision down
to the other divisions.

This type of structure makes producing a limited amount of products or services efficient and
predictable, but would make it almost impossible to run a project that cut across divisional
boundaries.

A refinement of this structure is show below and is referred to as a weak matrix. This is because
although each division operated independently, they no longer have direct control over support
functions lie IT, finance and human resources

This type of structure makes senses because these support functions do not need to duplicate
and can be shared between the divisions. This save money and enables the support
departments to be bigger and employ more specialist staff.