9781780171814 Professional Issues in Information Technology .EUCIP European Certification of IT Professional

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    BCS, The Chartered Institute for IT champions the global IT profession and the interests of individuals engaged in that profession for the benefit of all. We promote wider social and economic progress through the advancement of information technology science and practice. We bring together industry, academics, practitioners and government to share knowledge, promote new thinking, inform the design of new curricula, shape public policy and inform the public.

    Our vision is to be a world-class organisation for IT. Our 70,000 strong membership includes practitioners, businesses, academics and students in the UK and internationally. We deliver a range of professional development tools for practitioners and employees. A leading IT qualification body, we offer a range of widely recognised qualifications.

    Further InformationBCS, The Chartered Institute for IT,First Floor, Block D,North Star House, North Star Avenue,Swindon, SN2 1FA, United Kingdom.T +44 (0) 1793 417 424F +44 (0) 1793 417 444www.bcs.org/contacthttp://shop.bcs.org/


    Second editionFrank Bott

  • Frank Bott, 2014 (main text) The British Computer Society, various dates (material from the Societys publications)

    The right of Frank Bott to be identified as author of this work has been asserted by him in accordance with Sections 77 and 78 of the Copyright, Designs and Patents Act 1988.

    All rights reserved. Apart from any fair dealing for the purposes of research or private study, or criticism or review, as permitted by the Copyright Designs and Patents Act 1988, no part of this publication may be reproduced, stored or transmitted in any form or by any means, except with the prior permission in writing of the publisher, or in the case of reprographic reproduction, in accordance with the terms of the licences issued by the Copyright Licensing Agency. Enquiries for permission to reproduce material outside those terms should be directed to the publisher.

    All trade marks, registered names etc. acknowledged in this publication are the property of their respective owners. BCS and the BCS logo are the registered trade marks of the British Computer Society, charity number 292786 (BCS).

    Published by BCS Learning and Development Ltd, a wholly owned subsidiary of BCS, The Chartered Institute for IT, First Floor, Block D, North Star House, North Star Avenue, Swindon, SN2 1FA, UK.www.bcs.org

    Paperback ISBN: 978-1-78017-180-7PDF ISBN: 978-1-78017-181-4ePUB ISBN: 978-1-78017-182-1Kindle ISBN: 978-1-78017-183-8

    British Cataloguing in Publication Data.A CIP catalogue record for this book is available at the British Library.

    Disclaimer:The views expressed in this book are of the author(s) and do not necessarily reflect the views of the Institute orBCS Learning and Development Ltd except where explicitly stated as such. Although every care has been taken by the authors and BCS Learning and Development Ltd in the preparation of the publication, no warranty is given by the authors or BCS Learning and Development Ltd as publisher as to the accuracy or completeness of the information contained within it and neither the authors nor BCS Learning and Development Ltd shall be responsible or liable for any loss or damage whatsoever arising by virtue of such information or any instructions or advice contained within this publication or by any of the aforementioned.

    Typeset by Lapiz Digital Services, Chennai, India.Printed at CPI Antony Rowe Ltd, Chippenham, UK.



    List of figures and tables ixAuthor xAcknowledgements xiAbbreviations xiiUseful websites xivPreface xviii

    1. LAW AND GOVERNMENT 11.1 What is the law? 11.2 Criminal law and civil law 21.3 Where does the law come from? 31.4 The legislative process in the UK 31.5 The legislative process in other countries 51.6 The law across borders 6Further reading 7

    2. THE COMPUTING PROFESSION 82.1 The concept of a profession 82.2 Royal charters 92.3 Professional conduct 102.4 Education 132.5 The advancement of knowledge 152.6 Continuing professional development 152.7 Representing the profession 172.8 Membership grades 172.9 Reservation of title and function 18Further reading 20

    3. WHAT IS AN ORGANISATION? 213.1 The role of organisations 213.2 Commercial organisations 213.3 Limited companies 233.4 Setting up a company 243.5 The constitution of a limited company 253.6 Directors 253.7 Takeovers, mergers and outsourcing 273.8 Non-commercial bodies 31Further reading 34



    4. STRUCTURE AND MANAGEMENT OF ORGANISATIONS 354.1 Organisational models 354.2 Structuring principles 374.3 Depth of structure 424.4 Centralisation 434.5 Setting up a structure in practice 434.6 Job design 44Further reading 46

    5. FINANCING A START-UP COMPANY 485.1 Why capital is needed 485.2 The business plan 495.3 Sources of finance 505.4 Gearing 53Further reading 53

    6. FINANCIAL ACCOUNTING 556.1 Disclosure requirements 556.2 The balance sheet 556.3 The profit and loss account 616.4 The cash flow statement 646.5 The overall picture 67Further reading 69

    7. MANAGEMENT ACCOUNTING 707.1 Planning and management information 707.2 Budgets and overheads 707.3 Cost of labour 737.4 Allocation of overheads 747.5 Cash flow forecast 76Further reading 78

    8. INVESTMENT APPRAISAL 798.1 Investment proposals 798.2 The time value of money 808.3 Applying DCF to a simple investment project 818.4 Assessment of a software product proposal 848.5 Pitfalls of DCF 86Further reading 86

    9. HUMAN RESOURCES ISSUES 889.1 What are human resources? 889.2 The legal context 889.3 Recruitment and selection 919.4 Staff training and development 939.5 Remuneration policies and job evaluation 939.6 Appraisal schemes 969.7 Redundancy, dismissal and grievance procedures 989.8 Contracts of employment 1019.9 Human resource planning 102Further reading 103



    10. ANTI-DISCRIMINATION LEGISLATION 10410.1 The development of anti-discrimination legislation 10410.2 What is discrimination? 10510.3 Discrimination on grounds of sex 10610.4 Discrimination on racial grounds 10910.5 Discrimination on grounds of disability 10910.6 Discrimination on grounds of age 11210.7 Avoiding discrimination 112Further reading 113

    11. INTELLECTUAL PROPERTY RIGHTS 11411.1 Intellectual property 11411.2 Copyright 11611.3 Examples of copyright cases involving software 11911.4 Confidential information 12211.5 Patents 12511.6 Trade marks 12911.7 Domain names 130Further reading 131

    12. SOFTWARE CONTRACTS AND LICENCES 13312.1 What is a contract? 13312.2 Licence agreements 13412.3 Outsourcing 13512.4 Contracts for bespoke software 13612.5 Contracts for consultancy and contract hire 13912.6 Liability for defective software 14112.7 Health and safety 143Further reading 144

    13. DATA PROTECTION, PRIVACY AND FREEDOM OF INFORMATION 14513.1 Background 14513.2 Data protection 14613.3 Privacy 15313.4 Freedom of information 154Further reading 155

    14. INTERNET ISSUES 15714.1 The effects of the internet 15714.2 Internet service providers 15814.3 The law across national boundaries 16014.4 Defamation 16114.5 Pornography 16414.6 Spam 17014.7 Ecommerce regulations 173Further reading 174



    15. COMPUTER MISUSE 17515.1 The problem 17515.2 The Computer Misuse Act 1990 17515.3 Amendments to the Act 17715.4 Operation of the Act 17815.5 Computer fraud 180Further reading 181


    Index 185



    Figure 4.1 A function-based structure 38Figure 4.2 Twelve people organised into a four-level structure 42Figure 4.3 Twelve people organised into a three-level structure 42Figure 4.4 An organisational structure for a bespoke software house 44Figure 6.1 Sources and destinations of cash flows 66Figure 6.2 The relationship between the three financial statements 68Figure 6.3 How the cash flow statement and the profit and loss

    account affect the items in the balance sheet 68

    Table 6.1 Balance sheet for a student. 56Table 6.2 Balance sheet for a services company 58Table 6.3 Income and expenditure account for a student 62Table 6.4 Profit and loss account for a services company 63Table 6.5 Cash flow statement for a student 65Table 6.6 Cash flow statement for a software company 67Table 7.1 Direct costs and expected sales 71Table 7.2 An example budget 72Table 7.3 Calculation of the number of revenue-earning hours in a year 74Table 7.4 Effects of different overhead calculations 75Table 7.5 A six-month cash flow prediction 76Table 8.1 Discount factors for periods up to five years 81Table 8.2 DCF analysis of van purchase v. leasing 82Table 8.3 DCF analysis of a proposed software package development 85



    Frank Bott studied mathematics at Trinity College, Cambridge, where he was awarded the Yeats Prize. After several years working in the Universitys Computer Laboratory he joined SPL International and managed large projects in shipbuilding, the electronics industry and the NHS. He was for two years a visiting professor at the University of Missouri. For ten years he was Head of the Aberystwyth University Computer Science Department, where he still lectures part-time. He has been an active member of BCS since 1963 and is a long-standing member of its Professional Examinations Board, as well as of a number of other committees.

    Frank has published extensively in the field of software engineering and professional issues in IT. He also writes on classical music and is joint author of a biography of the W