PAGE 3 Paper 3.4 Business Information Management AIM This paper aims to ensure that students can exercise judgement and technique in identifying, implementing and managing information systems as part of the strategic management of the organisation. OBJECTIVES On completion of this paper candidates should be able to: • identify the information requirements of different levels of management and understand how information is used to support the objectives of the organisation • apply a coherent approach to business analysis including the identification of the current business situation and the gap between that and the required business objectives • identify and implement desirable and feasible changes resulting from business analysis • prepare a detailed business case to support system changes and use the appropriate tools to support business analysis • identify opportunities to use information systems to improve the competitive position of an organisation • identify the impact of the development of information systems on the organisation and its environment. POSITION OF THE PAPER IN THE OVERALL SYLLABUS This paper assumes the knowledge and understanding of the underpinning principles of Paper 2.1 Information Systems. SYLLABUS CONTENT 1 Organisational information (a) From a business perspective an information system is an organisational and management solution, based on information technology, to any challenge posed by the environment. (b) Levels of management and types of information/system required. (c) The tasks of the manager. The requirements for effective information management. (d) Types of information system (i) strategic information systems (ii) management information systems (iii) transaction processing systems (iv) automation and support systems (v) batch processing. 2 Knowledge management and information systems (a) Data workers and knowledge workers (i) distribute knowledge: office automation systems (ii) share knowledge: group collaboration systems (iii) create knowledge: knowledge work systems (iv) capture and codify knowledge: artificial intelligence systems. (b) Data management (i) principles of database management systems (ii) principles of datamining and data warehousing. 3 IS and the strategic planning process (a) The organisation and information management (i) the business context 3.4 Business Information Management 2.1 Information Systems PAGE 4 (ii) new organisational structures and information (iii) information and organisational strategy. (b) PEST analysis. (c) Strategic information systems (i) alignment (ii) using IS to create focus, support linkages and develop information leadership. (d) Porter's value chain. 4 Business systems, systems thinking and systems analysis (a) Hard systems approach (i) structured systems life-cycle (ii) deliverables from each stage. (b) Soft systems approach (i) Checklands soft systems methodology. (c) Business process engineering (i) business processes are analysed, simplified and redesigned. A radical business strategy. 5 Gap analysis and business case development (a) General framework: (i) where we are W 2 R (ii) where we want to be W 3 2B (iii) going to get there (GT) 2 . (b) Business case development (i) reasons, estimating costs and timescales (ii) estimating benefits (iii) benefit realisation dependencies (iv)sensitivity analysis (v) justification. (c) Applications portfolio / IT investment decisions: (i) portfolio analysis; risks and benefits. An analysis of the portfolio of potential applications within a firm to determine the risks and benefits and select among alternatives for IS. Scoring model (ii) determining the best fit with the current system. 6 IS and competitive position (a) SWOT analysis (i) identify drivers for change (ii) agree fundamental guiding principles governing design of change. (b) IS/IT management partnership – internal/outsourcing (in all its forms), facilities management. (c) Links between business strategy and information systems strategy. 7 Electronic commerce, internet as a strategic business tool (a) Globalisation (i) the virtual company (ii) the internet, intranet and extranet (iii) security issues. (b) The internet (i) the changing world of the internet (ii) good practise requirements, infrastructure required, change of business functions/strategy (iii) the internet as a system, integration with existing systems. 8 Implementing change (a) Implementing new systems (i) strategies for implementation (ii) managing risk at implementation. (b) Structuring the information systems function (i) managing the IT function (ii) management of change. (c) Project management. (d) Commitment, coordination and communication in change management. 9 Impact of IT on work practices (a) Using IT to manage individuals' information requirements (i) design of Critical success factors (ii) identification of sources of data capture (iii) measurement of performance. (b) Impact of IS/IT on employee/ employer relations (i) shorter chain of command, flatter structures (ii) wider span of control (iii) de-skilling of operatives (iv)socio-technical design. (c) Ethical issues in Information Management. EXCLUDED TOPICS The following topics are specifically excluded from the syllabus: • program design, flowcharting, object oriented design • specific hardware platforms. Business Information Management (Continued) PAGE 5 Paper 3.4: Business Information Management (Continued) KEY AREAS OF THE SYLLABUS The key topic areas are as follows: • information resource management • business analysis • information systems and competitive position • information systems and the organisation. APPROACH TO EXAMINING THE SYLLABUS The examination is a three hour written paper in two sections. Section A is based on a case study. This section will have three compulsory questions from across the syllabus, which relate to the scenario. Each question will be worth between 10 to 25 marks giving a total of 60 for this section. Section B contains three independent questions, drawn from across the syllabus. Each question is worth 20 marks. The candidate must answer two questions giving a total of 40 marks for this section. Number of marks Section A: 3 compulsory scenario based questions (no single 60 question will exceed 25 marks) Section B: Choice of 2 from 3 questions (20 marks each) 40 100 ADDITIONAL INFORMATION The examination will assume the use of specific and general modelling and analysis tools and techniques: PEST analysis, SWOT analysis, Porters value chain, Checklands soft systems methodology; conceptual models, rich pictures and CATWOE. Other models which are assessable are identified in the study guide. Some answers may draw on candidates' own experience or an interpretation of a topic, within the context of their own organisation or an organisation that they are familiar with. The Study Guide provides more detailed guidance on the syllabus. RELEVANT TEXTS There are a number of sources from which you can obtain a series of materials written for the ACCA examinations. These are listed below: Foulks Lynch – ACCA's official publisher Contact number: +44 (0)20 8831 9990. Website: www.foulkslynch.com Accountancy Tuition Centre (ATC) International Contact number: +44 (0)141 880 6469. Website: www.ptc-global.com BPP Contact number: +44 (0)20 8740 2211. Website: www.bpp.com The Financial Training Company Contact number: +44 (0)174 785 4302. Website: www.financial-training.com Candidates may also find the following texts useful: Kenneth Laudon and Jane Laudon Management Information Systems (6th Edition) Prentice Hall ISBN 0130156825 James O’Brien Introduction to Information Systems (9th Edition) McGraw-Hill ISBN 0071169733 Kenneth Laudon and Jane Laudon Essentials of Management Information Systems (3rd Edition) Prentice Hall ISBN 0130115061 Wider reading is also desirable, especially regular study of relevant articles in ACCA's student accountant. Business Information Management (Continued) PAGE 6 Business Information Management (Continued) STUDY SESSIONS ORGANISATIONAL INFORMATION REQUIREMENTS 1 Levels of management (a) Distinguish between strategic, tactical and operational management and their corresponding information requirements. (b) Describe the importance of making information accessible. (c) Discuss ways of ensuring the reliability and accuracy of information, creating secure information systems and making information available at an appropriate cost. 2 Categories of information systems (a) Discuss the seven major types of Information Systems: Executive Support Systems (ESS), Management Information Systems (MIS), Decision Support Systems (DSS), Expert Systems, Knowledge Work Systems (KWS), Office Automation Systems (OAS) and Transaction Processing Systems (TPS). (b) Describe examples of each of the above in terms of an organisations strategic business position. 3 & 4 Strategic role of information systems (a) Explain the strategic role of information systems. (b) Identify the major management challenges to building and using information systems in organisations. (c) Describe the central and crucial role that information systems have within an organisation. (d) Evaluate information systems and the strategic planning process. (e) Identify opportunities for use in forecasting, analysing competition, scenario planning, generic strategies/ business positioning, improving performance, measuring performance, opportunities for cost reduction, opportunities for service improvement, sales performance, evaluating proposals. (f) Explain Earl's IS, IT and IM Strategies. 5 Ethical issues (a) Analyse the relationship among ethical, social and political issues raised by the impact of information systems. (b) Identify the major moral dimensions of an information society. (c) Apply an ethical analysis to scenarios. (d) Discuss the design of organisational policies for ethical conduct. KNOWLEDGE MANAGEMENT AND INFORMATION SYSTEMS 6 & 7 Knowledge management (a) Describe the differences between data workers and knowledge workers and the appropriate types of applications used by each. e.g. (i) Distribute knowledge: Office automation systems (ii) Share knowledge: Group collaboration systems (iii) Create knowledge: Knowledge work systems (iv) Capture and codify knowledge: Artificial intelligence systems. 7 & 8 Data Management (a) Explain the principles of Database Management Systems (DBMS). (b) Describe the major characteristics of Integrity, Independence and Integration. (c) Discuss the difference between logical and physical data requirements. Describe Logical models; hierarchical and relational. (d) Explain the principles of Datamining and Data Warehousing. (e) Discuss Datamining as the ability to analyse large pools of data to find patterns and rules that can be used by an organisation to guide decision making and predict future behaviour. (f) Discuss Data warehousing as a database with reporting and query tools, that stores current and historical data extracted from various operational systems and consolidated for management reporting and analysis. PAGE 7 Business Information Management (Continued) IS AND THE STRATEGIC PLANNING PROCESS 9 Organisational requirements (a) Discuss the establishment of organisational information requirements. (b) Evaluate linking information systems to the business plan. (c) Discuss the requirement to understand the business value of information systems. 10 Strategic Analysis (a) Evaluate the importance of Political, Economic, Social and Technological influences on organisations. PEST analysis as a tool for Information systems strategic planning (b) Apply PEST analysis to scenarios (c) Explain and apply Parson's six IS strategies. (d) Apply Porter's Five Forces Model to scenarios. 11 Strategic information systems (a) Discuss the role of Strategic Information Systems, as computer systems within an organisation that enables changes to goals, processes, products, services or environmental relationships. (b) Discuss the alignment with business strategy and apply Earl's 'Three Leg Analysis'. (c) Identify ways of using IS to create Focus, support Linkages and develop Information Leadership. (d) Describe the design of Rockart's Critical Success Factors. (e) Identify sources of data. (f) Identify key performance indicators and how to measure performance. 12 Strategic impact of information systems (a) Evaluate Porter's value chain. (b) Apply Porter's value chain to scenarios. BUSINESS SYSTEMS, SYSTEMS THINKING AND SYSTEMS ANALYSIS 13 Business strategy (a) Describe the stages in the development of business systems and strategies. (b) Explain the concept of business automation. (c) Explain the concept of business rationalisation. (d) Evaluate and discuss the principles of business process engineering. 14 Hard Systems approach (a) Evaluate the Structured systems life- cycle emphasising the deliverables from each stage, clarifying the importance of these from a management perspective. 15 & 16 Soft Systems approach (a) Evaluate the principles of Checkland’s soft systems methodology. (b) Apply the major tools employed in Checkland’s soft systems methodology: Root definitions, CATWOE, rich pictures, conceptual models. (c) Evaluate the difference between Hard Systems and Soft Systems approaches. GAP ANALYSIS AND BUSINESS CASE DEVELOPMENT 17 Business analysis (a) Discuss the need for a general framework in the development of a business case: Where we are W2R Where we want to be W32B Going to get there (GT)2 (b) Discuss Business Analysis vs. Systems Analysis in terms of: A framework for business analysis, exploring and expressing problem situations, understanding what people do – and why they do it, modelling the current situation, Introduce the notion of Gap Analysis, modelling the required situation. Apply Earl's ‘Systems Audit Grid’ and Peppard's ‘Strategic Grid’. 18 Business case development (a) Discuss the major elements of a business case development concentrating on the strategic issues of: Estimating costs and timescales, estimating benefits, benefit realisation dependencies, sensitivity analysis, and business justification. PAGE 8 19 Gap analysis (a) Discuss applications portfolio/IT investment decisions. (b) Evaluate Portfolio analysis; Risks and benefits. An analysis of the portfolio of potential applications within a firm to determine the risks and benefits and select among alternatives for IS. Scoring model. (c) Describe determining the best fit with the current system. IS AND COMPETITIVE POSITION 20 Competitive position analysis (a) Evaluate Strengths, Weaknesses, Opportunities and Threats (SWOT analysis) as a technique for identifying opportunities for information systems development. (b) Apply SWOT analysis to scenarios (c) Apply Mclaughlin et al's possible SWOT responses to scenarios. (d) Relate McFarlane's model to the BCG matrix (e) Describe and explain Nolan's ‘Stage Hypothesis’ and Zuboff's ‘Automate, Informate, Transformate’ model. 21 Linking business strategy and information systems strategy (a) Identify and discuss the links between Business Strategy and Information Systems Strategy using IS/IT as an enabler: Analysis of external (competitive) environment, SWOT output, identify drivers for change, agree guiding principles, infrastructure standards and planning. (b) Discuss the potential advantages and disadvantages of IS/IT management partnership- internal/ outsourcing (in all its forms), facilities management. (c) Evaluate advantages of package solutions versus bespoke solutions. ELECTRONIC COMMERCE, INTERNET AS A STRATEGIC BUSINESS TOOL 22 Web based technology (a) Discuss the business impact of the Internet. (b) Identify good practise requirements, infrastructure requirements, and changes of business functions/ strategy. (c) Understand the Internet as a system. (d) Explain how to integrate with existing systems. (e) Discuss and describe the uses of an extranet and an intranet. (f) Evaluate the problems associated with using web based technology and the issue of security. 23 Electronic commerce (a) Discuss the impact of globalisation on business strategy. (b) Describe the implications of globalisation in terms of: management and control in a global marketplace, competition in world markets, global work groups, and global delivery systems. (c) Explain the Virtual Supply Chain (VSC). (d) Discuss Electronic Marketing. IMPLEMENTING CHANGE 24 Success and failure (a) Identify major problem areas when implementing information systems. (b) Apply organisational impact analysis. (c) Identify the criteria needed to assess whether a system is successful. (d) Describe the principle causes of information system failure and how to overcome them. (e) Discuss problems of implementation: people-oriented theory, system oriented theory, and interaction theory. (f) Describe the relationship between the implementation process and the system outcome (g) Explain and apply Lewin's “Three Stage” change process. 25 Managing change (a) Discuss the appropriate strategies to manage the implementation process. (b) Discuss formal planning control framework and tools. (c) Evaluate impact of alternative system building techniques and tools. (d) Explain how to manage risk. (e) Understand the importance of having a process to manage change in an organisation. Boehm's ‘Spiral Model’. Business Information Management (Continued) PAGE 9 Business Information Management (Continued) (f) Explain the importance of commitment, coordination and communication in the change process. IMPACT OF IT ON WORK PRACTICES 26 Individuals information requirements (a) Discuss the use of IT to manage individuals’ information requirements. (b) Identify how information systems can support the tasks of the manager. 27 Employee/employer relations (a) Discuss the impact of IS/IT on employee/employer relations in terms of: Shorter chain of command, flatter organisational structures, wider span of control, de-skilling of operatives (b) Describe the concept of Socio- Technical design in respect to employee/employer relations. (c) Discuss the organisational development issues resulting from the need to develop and implement information systems. 28 Revision . information management (i) the business context 3.4 Business Information Management 2.1 Information Systems PAGE 4 (ii) new organisational structures and information (iii) information and organisational strategy. (b). platforms. Business Information Management (Continued) PAGE 5 Paper 3.4: Business Information Management (Continued) KEY AREAS OF THE SYLLABUS The key topic areas are as follows: • information. accountant. Business Information Management (Continued) PAGE 6 Business Information Management (Continued) STUDY SESSIONS ORGANISATIONAL INFORMATION REQUIREMENTS 1 Levels of management (a) Distinguish