REVISION -01 March 2012 Question Paper

Question 1

a) The CIO is aware that implementing particular I.T. applications effectively is very dependent upon the nature of an organisation. Critically discuss and explain the nature of each of the functions of ZPC: Manufacturing, Marketing and Research, showing how suitable each of the proposed information systems is, what benefits are to be gained by implementing them, what difficulties can be expected in each case and, briefly, how they can be overcome. In you answer you should aim to;

Employ a suitable framework to characterise each of the THREE functions making clear what types of I.T. application are most suited.

(6 marks) ii. For EACH of the THREE functions, evaluate ONE of the initiatives explaining and illustrating

what tangible and intangible benefits would be expected from it.

(9 marks) iii. For EACH of the THREE functions consider TWO organisational difficulties that could limit

the achievement of benefits from the proposed initiatives.

(6 marks) iv. If the CIO had to prioritise TWO of the proposed initiatives which ones would you propose.

Justify you proposal.

(4 marks)

i. Employ a suitable framework to characterise each of the THREE functions making clear what types of I.T. application are most suited.

Any question of the kind ( where you are asked to use the suitable framework( model) to charecterise, you can use Cooper and Quinn Model.

Let us start our answer with the diagram

Descriptions of Culture

ORDER

FLEXIBILITY

INTERNAL EXTERNALINTERNAL

Open systems

Internal process

Human relations

Rational goal

Concerned with individualsand personal development.

Learn and grow

Concerned with the outside world

Prospect and explore

Concerned with goals

The appliance of science

Concerned with efficiency

Conserve resources

Adapted from Cooper (1994) and Quinn et al (2003)

Zeta Pharmacy Corporation has got 3 major departments according to this case study;

Manufacturing Marketing (Sales) Research

I will be using cooper and Quinn model to charecterise each function. According to Cooper and Quinn model, we have 4 types of cultures;

Open systems culture Rational goal culture Internal process culture Human relations culture

According to the copper and Quinn model;

Manufacturing Department of ZPC will come under Internal Process culture. Since manufacturing department comes under Internal Process culture, where order and

Internal focus important, I would suggest ERP systems in this department. It will help the organisation to co-ordinate different functions in the department such as finance, HR, procurement, stock management, manufacturing, production planning and control. This would also reduce the cost of IT provision.

Marketing department of ZPC will come under the Open systems quartile. Since marketing department focused externally, having flexibility, I would recommend ‘ e-

Commerce’ / online pharmacy system. It would grow the sales for the company in developed markets, where retail pharmacies are

limited. Research Department of ZPC will come under the Rational Goal quartile. Due to the external focus and control characteristics, i would recommend K.M for this

function.

We can consider mechanist/structuralist perspectives when considering the impact of IS in the manufacturing department of the ZPC corporation. Here resistance could be managed by motivation and efficiency improvement.

It is possible to consider organicist/ Contexualist perspective while considering the marketing department of the organisation. Here people would welcome the IS, as it improves customer service and innovation.

It is useful to consider Contexualist perspective while considering the research department. Resistance to change could be handled by rewards, training, motivation e.t.c.

ii. For EACH of the THREE functions, evaluate ONE of the initiatives explaining and

illustrating what tangible and intangible benefits would be expected from it. REMEMBER THAT ANY OF THESE IS COULD BE USED

FOR THE MENTIONED DEPARTMENTS. When considering ERP application for the

manufacturing department of the Zeta Pharma Corporation , we find the following tangible benefits;

The department will be able to save the cost by automating the manual tasks and standardising the business process.

It will save the IT cost in the organisation. It will improve the efficiency in the department. It will improve the information flow(real time) in the

organisation.

Intangible benefits Clarity of the processes( processes would become visible and

clear for everyone) Improved communication between departments. Improved information flow Avoids duplication When considering e-Commerce or online pharmacy for the

marketing department, we will be able to identify the following Tangible benefits;

Reducing manual tasks Helps automation of tasks Reducing cost of transactions(online payment, building, rent) Creating new sales channels for sales( apart from buying

from the stores, the customers can also buy online)

Intangible benefits Improved brand awareness Improvement in marketing since online purchasing behavior can be analysed. Improvement in product development, based on the purchasing data of

customers. Improved customer satisfaction (24/7 service ) from the stores. Competitive edge over competitors When it comes to the Knowledge Management systems for the research

department of ZPC, the following tangible benefits can easily be understood; Improves performance by the sharing of knowledge. Successful or good practices can be re-used by the sharing. Saves research time by sharing of the knowledge. Saving the cost duplication( re-doing the research) It would avoid issues related to the resignation of key staff member. Knowledge management facilitates product development for the organisation.

Intangible benefits

Improves staff’s morale by recognising their contributions. Staff would identify their importance. Improves staff retention and development, when company allows the

staff to work with the modern technology. Knowledge would always get updated, as staff contributes.

iii) For EACH of the THREE functions consider TWO organisational difficulties that could limit the achievement of benefits from the proposed initiatives.

Implementation of any IS would be faced with problems in the orgnisation. It is also the same case when it comes to ZPC.

Let us consider the problems that would arise when implementing ERP systems in ZPC.

Staff resistance would arise as it affects all the departments in the organisation.

It would be resisted as it challenges the existing procedures of the organisation.

Marketing and Research departments usually have informal systems as they work with more external focus. So, systems like ERP would affect the normal way of doing things. For example, entering sales orders by time, date would be totally against the practices in these departments. It will affect the quality and consistency of the data.

ERP system is charecterised by the management control, this would affect marketing, research departments, since these departments requires individual flexibility, creativity and innovation.

When it comes to online pharmacy or e-Commerce the problems will still be there as follows;

Online pharmacy with pharmacist consultation would create resistance and management problems.

It would also create problems related to costs. For example, as the organisation requires the system with all the characteristics ( online delivery, payment, consultation, product marketing focus).

Additional efforts must be made for staff training and support. Problems of financial/private data security also would arise.

It is also important to look at the K.M implementation. It would be faced with the following organisational problems;

The main problem here is the resistance from the staff to share their knowledge. This will be based on cultural, political and social factors.

Another importance problem is to define clearly as what information or knowledge to be shared.

It is also a problem to clarify as who can access this information, and with whom it could be shared.

Reluctance to share knowledge sincerely would affect the quality of data shared and incurs waste of time.

iv. If the CIO had to prioritise TWO of the proposed initiatives which ones would you propose. Justify you proposal.

Considering the situation or scenario of ZPC, I would prioritise ERP because;

ERP improves the efficiency in the organisation. ERP improves the information flow in the organisation, which would be

the key for the organisational success. Again, process efficiency( improves process performance or ability), and

standardisation is required for the online pharmacy operation. ERP system brings management control, it would facilitate monitoring

and evaluation. This would help other initiatives proposed. As the next step, I would recommend online pharmacy. Because online pharmacy would create new sales channels for the

organisation. Again, the data collected from online pharmacy operation could be used for research purposes.

Online pharmacy also holds the key for the market development.

Finally, I would consider Knowledge Management system, it would facilitate the longer term benefits for the organisation. Future of the ZPC relies on product development and it depends on the research department.

b) Choose any ONE of the proposed information technology initiatives and critically discuss the relevance or EACH of the following frameworks on implementation, showing how they can be used to increase the likelihood of success.

Technology Acceptance Model Value Disciplines Lewin's 3 Stage model

When considering the ERP system implementation in the ZPC, we can consider the Technology Acceptance model of Davies. It is to understand the under acceptance of the technology.

Most IS depend, to a large extent for their effectiveness, on willing and competent users. So, User Acceptance of the technology is the key. IS effect will therefore depend on how people in an organisation engage with the technology.

When considering the ERP effect on ZPC, we can employ Technology Acceptance Model.

( Now draw the diagram)

Technology Acceptance Model

External Variables

PerceivedEase of Use

AttitudeToward Using

PerceivedUsefulness

Actual SystemUse

BehaviouralIntention

to Use

Davies et al, 1989

According to TAM( Technology Acceptance Model), the acceptance of a technology by the users depends mainly on two factors;

Perceived Use Perceived Ease of Use So, it is related to human and organisation needs. Here perceived

use will come into play. As human beings find ERP eases their responsibility, making information available on time, the user would find the Use and encouraged to use the system and contribute the satisfaction.

Further, as training and support provided, making the technology design based on HCI or Socio-Technical principles, the system would be easy for the user to use.

While considering the Value Discipline model with ERP;

The Value Discipline model of Treacy & Wiersema, would help us to understand the contributions from the IS.

(Draw the diagram)

Based on this model, there are three types of Value Disciplines exits such as;Operational Excellence Product leadership Customer intimacy So, when considering IS initiatives in ZPC, we will be able to find the

following ;ERP – operational excellence, since reducing cost, improving efficiency,

developing markets. Online Pharmacy – facilitates customer intimacy through 24.7 operation,

consultation, flexible shopping experience. KM- Product Leadership will be facilitated by K.M .

Finally, Lewin's 3 Stage model will help us to understand the adjustments or changes that we have to make while implementing these systems into ZPC.

Here let us take a look at the case with ERP;

To implement ERP in ZPC, we will have to consider Unfreezing model – at this stage we will have to make it clear that the current processes, performance not desirable.

Next stage, we should make necessary changes by training, support and education.

As the third step, we will have to refreeze the changes that we made.

This will increase the possibility of success when implementing ERP.

The method is applicable in the case of K.M and online pharmacy.

c. Identify TWO key Stakeholder groups and consider an approach to change using ONE of the proposed initiatives. Discuss ways in which you would seek to ensure the initiative succeeds and the necessary changes come about.

Stakeholders have the power to affect the outcome and success of the system. So it is important to understand their power, influence to bring positive results from the implementation of IS.

When considering ZPC, the following stake holders can easily be identified;Senior Managers Distributors Researchers Marketers IT staff Customers Shareholders/investors/owners We can consider Lewins Force – Feild analysis to manage the change here. (draw

the diagram)

Now with the use of diagram we can explain as follows;Force for changes ;Customer wants new products and Customer wants new facilitiesManagers needs more control Shareholders needs reduced cost, increased efficiency and revenue Marketers welcome the new technologies such as e-Commerce Researchers needs accurate data/information Forces against the change Staff concerned about the new technology Managers skeptical about the technology Cost researchers resist sharing of information Marketers resist formal procedures and sales monitoring

Here, we have to handle the forces against the change by education , training, motivation and rewards.

( you can also use Lewins change model) Question 2

a) The context for information system implementation is very important. In what ways do perspectives on organisations such as Structuralism, Mechanism, Organicism and Contextualism help to understand the context of I.T. initiatives in ZPC? Illustrate your answer with examples drawn from the case for THREE of these.

Here you can use cooper and Quinn diagram again

When considering ZPC, we can find the following points;The marketing function in ZPC can be viewed as

organicist/contextualist perspective . He reasons are as follows;Marketing function is focused externally, and concerned with

development, innovation and growth. Technologies will be accepted if it improves the performance(helping the job). Here informal procedures will be welcomed. Resistance can be handled by motivation and rewards.

Manufacturing function is clearly Mechanist/Structuralist perspective, because it is focused internally and having control. Here efficiency / standardisation tend to be the key. New procedures, processes with the advent(coming) of technology will be resisted, but motivation and rewards and efficiency gains, the resistance can be handled.

The research function at ZPC is purely Contexualist/organicist perspective. This is due to the external focus and control characteristics.

The staff will accept technologies that improves their work. However, resistance will happen when systems such as K.M implemented. Here motivation, rewards will work to handle the resistance.

b) Explain how the principles of a socio-technical approach can help ZPC to successfully introduce the I.T. initiatives described in the case. Illustrate the approach with a good example.

The concept of Socio-technical approach is quite important to ZPC, as the organisation implement the new IS initiatives. The core of socio-technical approach is to consider both human beings and IT systems with equal importance. As ZPC implement ERP, K.M, e-Commerce it is becoming important to have considerations for human as well as technical factors. Failing to do so, would being down the benefits of proposed initiatives. Here, we can use HCI principles, work design principles, use experience designs to make maximum impact. The three initiatives proposed would certainly bring changes in the Job content of the staff, so we will have to

consider the work design model. Here we can use the following principles;

Combine tasksForm natural work-groupsEstablish customer relationsVertical loading( giving more responsibility) Open feedback channels Again, the concepts of socio-technical approach would become important when ZPC, implementing online pharmacy. Here the design of the system should be based on the social and technical factors. Proper technology interface would help the users to handle the system effectively. The proposed initiatives further affecting the job content by changing the work practices. For example, the sales staff used to enter the order data casually, but the with the new ERP system, the procedure would become more inflexible and strict. Here training, support , motivation and rewards to be given to the staff.

When considering the K.M system in Research function, we would find the sharing of knowledge would certainly affect the staff.

Here team working or collaborative working need to be encouraged. In order to make this initiative working, we have to consider the communication between organisation and the staff improved. Staff should be convinced about the beneifts achieved. It is also important to motivate the staff by rewards and support.

Question 3 There are a variety of criteria for evaluating information

systems. Describe the two main criteria by which ZPC should consider evaluating the introduction of the online pharmacy. Justify the relevance of the criteria to ZPC by showing how they relate to business success.

( to answer this question, you can use any of the following approaches or techniques;

Formal Rational evaluation methods( cost and benefit analysis)Tangible benefits ( this is preferred method for NCC)Intangible benefits( PREFFERED METHOD) DeLone McLean model ( this is quite difficult to explain with

some IS) Balanced Score card)

Organisations evaluate information systems for the following purposes;

To measure tangible costs and benefits To endorse success To investigate failure To identify good practice To improve implementation process

In order to evaluate the online pharmacy at ZPC, I would recommend the use of tangible and intangible benefits.

Tangible benefits from the implementation of online pharmacy New sales channels for the company New sales through online pharmacy at a low cost( because, no building cost, rent, less

number of staff) Reduced fixed cost Reduced management overhead Increased efficiency through automation of processes Online pharmacy would reduce the transaction costs.

Intangible benefits Through online pharmacy ZPC will be able to create

more brand awareness. This is difficult to measure. Increased presence in the market( through website) and

more sales, but it is difficult to measure this benefit. The online pharmacy will increase the customer

satisfaction as it saves customer’s time, effort. Again, this is difficult to measure.

The online transactions will provide marketing data for ZPC, at no cost.

There will be increased communication between organisation and customers.

Online pharmacy would give ZPC a competitive edge.

If you want to use DeLone Mclean model draw the diagram

DeLone McLean Model

Net Benefits

System Quality

Information Quality

Intention to Use

User satisfactionService

Quality

Use

b) How will the implementation of the online pharmacy change the processes and technology of Marketing and Selling for ZPC? Clearly relate your answer to the case by describing example processes and technology that will change.

The implementation of the online pharmacy at ZPC would change the existing processes and technologies for marketing and sales. First of all , the existing process of sales through the distributors will be changed to individual customer purchase directly online. So, ZPC will have a direct customer contact. There be increasing in the transactions made by ZPC, because currently ‘bulk’(wholesale) transaction is made by the distributors, which will be converted into individual(small) transactions. This would change the existing transaction systems at ZPC. Again, the current logistics process of ZPC based on ‘bulk’ shipment to the distributors would be changed to ‘small ‘ shipments, this would change the current systems and require new process and technologies.

The current marketing and sales function of ZPC is based on advertisements, environmental research, campaigns e.t.c. but the advent(coming) of online pharmacy will change the existing processes and technologies. For example the online pharmacy initiative will bring huge data base on customer purchase and behavior patterns, needs, preferences e.t.c. so, ZPC should have technologies to support this function.

Again, the initiative of ERP will bring great changes in the marketing and sales function. There will be links between customers and the organisation. This would require changes in the technology. Again as the ERP function enables CRM function, new technologies will be needed for data mining( to analyse and process data into information). As ERP links different departments together, the marketing and sales would come under ERP control, here marketing and sales should precisely enter the sales data as they receive an order. Here we can experience the process change .

The K.M system also will have an impact on the marketing and sales processes and technologies. The existing technologies will not be useful to process the data collected by the online pharmacy system.

There will be closer connection between marketing and research, this would change the existing process of independent operation. There should be tools and technologies to share the knowledge between the departments.

Question 4

a) Consider the case of the proposed online pharmacy and examine the issues faced in relation to:

i. Information ownership, ethical, legal, security and related issues, and

ii. How HCI principles can help in the design of the system.

Use illustrations liked to the case to support discussions and demonstrate application of the principles.

The proposed online pharmacy initiative at ZPC, would invite issues related to Information ownership, ethics, laws, security.

Let us check the issues related to Information ownership first. Information ownership is related to the ability to access, create,

modify, package, derive benefit from, sell or remove data, but also the right to assign these access privileges to others. As the online pharmacy initiative implemented, clear policies, norms required to control the information. Here what information to be shared, with whom it can be shared, who can access the information, who will be able to modify e.t.c. to be defined clearly. Online pharmacy would facilitate huge amount of data, that includes customer purchasing behavior, financial transaction, personal information and so on.

Secondly, we will be analysing the ethical issues related to the online pharmacy. It would be possible to have customer personal information collected by the online pharmacy systems, and it would become important to use it ethically. For example, the data related to the health history of a customer need to be secured. Again, is allowed to spam the customers based on the information collected through online pharmacy?

Customer expect fair use of personal information collected by the systems. ZPC, should focus on ethical behavior to improve the performance of the organisation.

Ethical behavior would reward ZPC with customer loyalty, corporate mission and avoids negative publicity.

ZPC should focus on the following while dealing with the online pharmacy system;

Security for financial aspects of transactions Privacy of personal information Non-deception Fulfilment/Reliability

ZPC also will have to be mindful about the legal aspects when dealing with the online pharmacy.

ZPC should inform the customers about the information or data collected. Again, care must be taken to get the customer consent or permission for the use of personal information. ZPC, should avoid the third party access to the information collected, and should destroy the personal information, which is invalid. These policies would protect ZPC from legal problems. As online pharmacy helping the organisation to create, collect, store, share and use huge amount of data these policies would safeguard the organisation from legal disputes and negative publicity.

Finally the security aspect of information/data would become important. Care must be taken to protect customer information/data from abuse. For example, as the financial transactions enabled by online pharmacy, financial data must be protected from unauthorised access.

ii. How HCI principles can help in the design of the system.

HCI principles are about understand the relation between computers and human –beings. It is to create a suitable interface between technology and human beings.

HCI principles would help ZPC to design online pharmacy system user friendly. It would attract customers and enhance customer satisfaction. Human Computer Interaction principles while designing online pharmacy could be as follows;

The online pharmacy should always keep the users informed about the status of the operation. The system should have language options for different customers. The systems should give control and freedom for the user while using it. The system should avoid the errors as it frustrates the users. It is also important to give enough support and guidance to the users. Again, online pharmacy should arrange the easy and flexible navigation features for the users.

Information Technology is become increasingly standardised, packaged and delivered via the web and internet technology using browser software. In what ways is the implementation of I.T. by organisations changing?

I.T is becoming an integral part of organisations nowadays. Use of new technology becomes common to organisations. User-friendly applications, wider use of internet, new capabilities of technology making I.T adoption quiet easy in the modern world.

New technologies provide new capabilities to an organisation. For example, ZPC is able to be closer to the customer around the world by online pharmacy. It further equip the organisation to give individual consultation as well.

Technology was considered to be a back office support function system in the past, where as it has become the main facilitator for the modern business. However, organisations would face internal problems with people and cultural issues as new technologies implemented. Proper change management systems will be required to handle the changes taking place due to the technological revolution. As we have seen in the case of ZPC, new initiatives such as online pharmacy will need security and care about personal data/ information.

Modern technologies are more service oriented and user friendly. It would attract the users and increase user satisfaction and deliver benefits to the organisation.

Modern technologies are focused on business processes and here process management would play the key role. As seen in the case study online pharmacy initiative is giving ZPC new business process.

( now you can use the Michael porter Five forces to emphasis the importance of technology in the modern Business)

Competitive Forces

CompetitionIn

MarketBargainingPower ofSuppliers

Threat ofNew Entrants

BargainingPower ofCustomers

Threat of Substitute Products or

Services

Can IT/IS be used

To help create barriers

to entry?

Can IT/IS be used

to create better or changed products of services?

Can IT/IS be used

to help ‘lock’ inCustomers to

our value proposition?

Can IT/IS be used

to reduce the bargaining power of

suppliers?

Can IT/IS be used

Help do things better and more cost effectively

than competitors?

Question 5

a) Apply the DIKAR model to TWO examples in the ZPC case. Show how knowledge could help the company to improve performance.

DIKAR model stands for, Data, Information, Knowledge, Action, Results.

( draw the diagram)

DIKAR – SIMPLE MODEL

DIKAR ModelThis simple model shows the process by which Data is processed to generate Information which isinterpreted to create Knowledge which leads to Action that will drive the business Results.Organizations can also move backwards through this process when they strategize.

Data Informatio

n Knowledg

e Actions Results

D = ZPC can collect customer Buying History data (collected from online pharmacy)

I = ZPC can process the data and understand the buying patterns for products

K = ZPC can process the information with expertise and understand the customer preference for remedies sold in pill or tablet form

A = Based on the knowledge ZPC can make Brand-stretch remedies delivered in other form to be available on tablet form

R = As a result ZPC, will make more sales and growth in customer loyalty because the online pharmacy becomes increasingly a 'one-stop-shop'

b) Productivity and efficiency improvements are the main benefit that organisations can achieve by implementing I.T. applications. Discuss. What is your conclusion?

I.S lead to improvements in efficiency and effectiveness. Here care must be taken to align I.S strategy according to the organisational strategy. It is also important to select and implement the right I.S for the business.

For example, by using an ERP system, an organisation can integrate all departments and even get connected to suppliers and customers. This will increase the quality of information and flow of information. There are many benefits associated with the same. Reduced costs, improved performance, better quality, higher customer satisfaction are few major benefits.

In the given case study ZPC would benefit from increased productivity and effectiveness. For example the online pharmacy will reduce the cost of the organisation, saves the time of the user and increases customer service.

Different departments in an organisation, for example let us evaluate the case of ZPC, speclialise in separate functions. And different departments uses particular I.S to make that particular process efficient.

For example, manufacturing focus on the optimal use of production facilities, the sale department tries to meet the expectations from the customers, and here the result will be a slow process, and mistakes, attention to internal process rather than customer focus. These problems led to the new idea of managing organisations from a process view. This new idea has given way for business process re-designing in the organisation. So, computer based technologies can strengthen the process changes. They make possible what was previously impossible. For example the ERP system in the ZPC, can connect to suppliers and customers.

Technology helps for business process re-engineering, for example ZPC, customers used to visit the retail stores to buy the medicines previously, but the online pharmacy would allow them to

by online. These factors increases the effectiveness and productivity.

However, technologies can be successful according to the level of acceptance from the users. Here the culture of organisation, values and attitudes if people will play a major role. Training, motivation, support are few ways to overcome these barriers.

Again the users also find technologies ‘impersonal’ or complicated, where associated benefits with the technologies may attract the users. Again, HCI, TAM, Interface design principles will help the organisations to provide a user friendly atmosphere.

Again the process changes with K.M and CRM would bring long term benefits to organisation and to a great extent this is uncertain as well.