BCS HIGHER EDUCATION QUALIFICATIONS Level 6 Professional Graduate Diploma in IT. March 2013 EXAMINERS REPORT. Management Information Systems

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1 BCS HIGHER EDUCATION QUALIFICATIONS Level 6 Professional Graduate Diploma in IT March 2013 EXAMINERS REPORT Management Information Systems General comments on candidates' performance The standard for this examination was higher than in previous sittings, with over 65% of candidates being successful. Although there were some excellent papers, some candidates were unable to obtain many marks because they provided answers which contained minimal content. This was frustrating for the examiners, as frequently it seemed that the candidate had some knowledge and understanding but failed to provide sufficient detail or explanations that could have made the difference between a pass and a fail. Furthermore, many candidates did not read the questions properly, resulting in answers that were not wholly relevant to the question set and which achieved few, if any, marks. Candidates are advised to spend time reading and understanding a question before writing their answers. Ideally making an answer plan with bullet points as rough work before writing their answer. Also, candidates are advised not to repeat points previously made or spend time commenting on the question set, as neither activity will attract marks. Those candidates who performed best had thought carefully about the information presented and what was required for each question. They gave considered, well argued answers that demonstrated a professional approach and addressed all the core parts of the question. All questions set were on topics contained in the syllabus and which are expanded in the recommended reading list. However, to maximise marks and to provide relevant examples, candidates are advised to augment their studies by considering how MIS is used within their own organisations, or organisations with which they are familiar. In addition, the reading of appropriate journal and trade press articles regarding MIS within organisational settings can result in a rich source of relevant and contemporary examples upon which to draw within answers.

2 SECTION A A1. You have been employed as a contractor to advise a company that has a long history of project failures. You soon realise that the main reason for the failures was that the company did not use a formal project management methodology. Prepare a report for the Directors in which you: a) Describe the stages of a formal project management methodology, such as PRINCE2. b) Suggest actions that could help a MIS project succeed. (15 marks) (10marks) Answer Pointers: Part a) Project management methodology This part of the question sought to probe a candidate's knowledge of PRINCE2, or a similar known project management methodology. Note that the answer pointers below are for PRINCE2. PRINCE2 Process Stages (NB: The order and description of each of the eight stages can differ, provided the meaning is the same.) 1. Directing a Project. This process covers the establishment of a Project Board, the duties of which are to: Approve and authorise projects Authorise continuation to next project stage Resolve exception situations 2. Project Start-up. This process is concerned with: Obtaining authority for the project Determining the approach to be used Creation of the initial plan 3. Project Initiation. Once the project start-up process has been agreed, the project initiation stage can commence. This is concerned with laying down a firm and accepted foundation for the project. It will ensure that: The scope and objectives of the project are understood The stages of the project are identified A business case exists Risks are identified and understood Commitment is gained from the Project Board to provide the resources A Project Manager is appointed. 4. Planning. Planning is a common process used by several other processes. Detailed planning in the form of a project plan will follow the project initiation stage. Planning seeks to: Break down the project into parallel activities

3 Describe each activity Illustrate dependencies Obtain agreement to the plan from all concerned 5. Controlling a Stage. This process is concerned with the management of each stage: Production of a prototype system Production of a specification for formal agreement Maintenance of a risk log System development User testing and acceptance Authority for implementation 6. Managing Delivery. This is concerned with the detailed work carried out by the team leaders, working under the supervision of the project manager. It ensures that the right products are produced as defined in the schedule. 7. Managing Stage Boundaries. This process covers the steps needed at the end of each stage and the beginning of the next stage. 8. Closing a Project. This process exists to ensure that at the close of the project there is a clear and unambiguous end. This is important to ensure that any limitations or agreed omissions are understood and documented. (One mark for each stage identified, a further mark for a description, maximum 15 marks.) Part b) Actions to help a project succeed This part of the question required the candidate to demonstrate a deep understanding of the practical reasons that MIS projects often fail. Valid possible answer points were: Have top management support for the project Have staff with the appropriate skills and experience Anticipate potential problems, enabling the application of appropriate corrective strategy Maintain a project risk log to enable the development of strategies to remove and counteract Allocate sufficient time, money and resources Spend sufficient time on the preliminary planning phase, leading to accurate estimates of the cost and duration of the project Ensure that there are sufficiently motivated and dedicated staff on the project team Users should spend sufficient time helping the project team determine requirements Spend sufficient time interviewing users at different levels to ensure that the relevant questions are asked Provide a system design that is flexible enough to serve future needs Have enough time and resources to test the system Have the involvement of the users during testing Ensure that training commences well in advance of system installation Have accurate and complete system and user documentation Regularly benchmark the system against the original business objectives Any other plausible reason (One mark for each expanded reason, maximum 10 marks.) Total: = 25 Marks

4 Examiners Comments: Although this was not a popular question, those candidates who attempted it generally performed well. For Part a), some lost marks by not providing a meaningful description of the stages or by misunderstanding the activities in each stage. Part b) was not answered as well as Part a), with candidates failing to expand on the reasons that the actions suggested would help a MIS project to succeed. A2. Our digital networks will be the backbone of our economy in the decades ahead, just as roads and rails were the backbone of our physical infrastructure, and still are. And we know that every aspect of our lives in local communities, every school, every hospital, every workplace and even every home will be dependent on the services that the digital network provides. (Gordon Brown, former British Prime Minister, January 2009.) In the context of the future provision of MIS, discuss the extent to which you agree or disagree with this statement. (25 marks) Answer Pointers: This is a discuss question, so there is no set answer. Candidates were expected either to agree or disagree with the statement and then provide a number of discussion points to justify the stance taken. Some possible discussion points that could be used include: Digital networks are constantly improving Increased use of fibre optics 4G mobile networks in some countries MIS increased ease of teleworking MIS - implications of teleworking MIS - virtual organisations become more viable MIS - examples of virtual organisations, Amazon, etc MIS greater use of mobile computing MIS limitations of mobile computing MIS security issues MIS increased use of cloud computing MIS implications/drawbacks of cloud computing MIS legal issues MIS risk issues MIS remote diagnosis (re. hospital reference in quote) Social implications of increased network usage Environmental implications Marks Between 7 to 9 issues, clearly articulated with links to MIS and the quote Between 5 and 7 issues, good articulation with links to MIS At least 4 issues, clearly described, with some links to MIS 0-9 Between 1 and 3 issues, weak or incomplete arguments Examiners Comments: The weaker candidates provided little more than general knowledge, with answers confined to increased use of the internet and the benefits of ; these candidates failed

5 to reach the required pass standard. The better candidates submitted excellent essays which provided insights into future MIS, including the practical and social implications resulting from increased network use. A3. You are a consultant who has been engaged to advise an organisation on the development of an MIS strategy. Prepare a report for the Board to include the following: a) A description of the internal and external issues that should be considered before developing an MIS strategy. (12 marks) b) A discussion of the effectiveness of Porter s Competitive Forces Model and his Value Chain Analysis process. (13 marks) Answer Pointers: Part a) Strategic issues For full marks the description should include four issues, with at least one external issue. Three marks are available for each. The following is an answer that would have gained full marks: Any MIS strategy must first support the organisation s business goals; for this reason it is advised that both business goals and business strategy are considered prior to developing an MIS strategy. The exception to this general rule is where the MIS management becomes aware of a particular technology or software that could be of benefit to the organisation and of which the business managers may be unaware. For this reason, the MIS staff have a duty to keep appraised of future developments and be prepared to brief business managers as appropriate. An MIS strategy must be affordable, as there would little point in having an MIS strategy that an organisation could not fund. Ideally, the MIS strategy should be self-funding, in that any benefits, in terms of increased business or reduced costs, could fund the strategy. In making this statement, it must be realised that some benefits may not be realised until after the strategy has been developed; therefore funding will be needed prior to this. Continuing with affordability, some MIS managers may consider leasing as an alternative to purchasing hardware. This means that initial high one-off costs would be replaced by lower annual costs. For software use, cloud computing facilities may help to avoid high initial capital costs; this is because providers of cloud facilities can charge for software on a usage basis, thereby enabling organisations to avoid the initial high software purchase costs. To complete this discussion of funding and affordability, it must be realised that some MIS strategies may result in intangible benefits, including improved customer service and better management information. These benefits are difficult, if not impossible, to quantify but can be vital to the success of an organisation. The retention and treatment of legacy systems is an important aspect for older companies, as MIS strategies may be constrained by existing business-critical legacy systems. For example, the cost of rewriting the legacy systems and training all users whilst continuing with the day-to-day business may be impractical. On the other hand, businesses which use legacy systems are taking a risk by operating such systems, as they use unsupported or obsolete hardware/software. Finally, any strategy must take into account external issues, one example being existing

6 and likely future legislation and regulation, as failure to do so could result in the organisation being fined or being required to cease trading. For example, any planned e- commerce site must comply with the Disability Discrimination Act and provide appropriate accessibility options. Also, the e-commerce site must meet the provisions of Electronic Commerce (EC Directive) Regulations. Part a) total ( ) =12 marks Part b) Porter s Competitive Forces Model versus his Value Chain Analysis Marks were apportioned as follows: Description of Porter s Competitive Forces Model (4 marks) Description of Porter s Value Chain Analysis (4 marks) Discussion regarding the effectiveness of each (5 marks) An answer that would have gained full marks is given below: For the Competitive Forces Model, Porter asserts that companies must manage five competitive forces: Threat of new entrants Bargaining power of consumers and buyers Bargaining power of suppliers Substitute products or services Intensity of rivalry between competitors He believes there are three strategies for dealing with the competitive forces: Differentiate products and services Be the lowest cost producer Identify a niche market The competitive forces model guides IS strategy, as all five forces and three strategies are facilitated by IS. Once senior management has analysed the forces and determined corporate strategy, the IS strategy can follow. Porter s value chain analysis (VCA) is a useful generic method to extend IS strategy by using a top down approach to: Examine the business Describe the activities that take place within the business Relate these activities to the competitive strength of the business Porter suggests that both the primary and supporting business activities are analysed. Primary activities are those concerned with creating and delivering a product, whilst supporting activities are those not directly involved in production. Note that supporting activities may increase the effectiveness or efficiency. Examples of primary value chain activities include inbound logistics, operations, outbound logistics, marketing, sales and services. Supporting activities include procurement, human resource management, technology development and infrastructure. The costs and value drivers are identified for each value activity. The goal of VCA is to maximise value creation while minimising costs. The concept of VCA can apply to whole supply chains and distribution networks. Porter terms this larger, interconnected system of value chains the value system. A value

7 system includes the value chains of a firm s supplier (and, in turn, all their suppliers), the firm itself, the firm s distribution channels and the firm s buyers. The advantage of VCA is that it allows the business to determine which activities are best undertaken by the business itself and which activities should be provided by others. Academics and practitioners have both made criticisms of the value chain model and its applicability to services organisations. Porter s focus on either or strategies and competition as the main driving force in any industry is not that well suited to the complexity of most industries today. Collaboration, in addition to competition or low cost, can be drivers - particularly with the growth of internet use and the economies of scale that can be achieved. The competitive forces model is more concerned with the effect of external forces, whilst the VCA is more inward-looking; therefore they are not really substitutes for each other as both are needed. There is also the assumption that IS always follows the business, but this restricts IS initiatives of which the business may be unaware. At best, Porter s models provide a start point in the strategic planning process; but others should also be considered (STEP, SWOT, etc.) and the strategic planning process should be iterative. (13 marks) Total = 25 marks Examiners Comments: This question was not particularly well answered. Some candidates used Part a) to explain how STEP and SWOT techniques could be used to generate strategic issues but then failed to identify or describe any issues as requested in the question as set. Most candidates had some knowledge of Porter s Competitive Forces Model and generally the model was described well. However, candidates appeared less sure of Porter s Value Chain Analysis and hardly any attempted to discuss the effectiveness of either method.

8 SECTION B B4. A large international furniture manufacturer has an in-house IT department, comprising 15 full time technical development and operations support staff. This department develops and supports key business applications across a large network of servers and client workstations. The company wants to implement a Customer Relationship Management (CRM) system, and cannot decide between: In-house development of a CRM system, based on an existing multi-user Database Management System (DBMS) environment and associated programming languages. Outsourcing the development of a CRM system to a company that specialises in tailored CRM solutions using established CRM software. Using Software-as-a-Service (SaaS) CRM software that is made available by a cloud computing company. Prepare a briefing paper for the senior management team that evaluates the merits of EACH of the THREE options, as stated above, for the furniture manufacturing company. List any assumptions that you make within your answer. (25 marks) Answer Pointers: This is a typical outsourcing versus in-house systems development question, but with the addition of the cloud Software-as-a-Service (SaaS) option. Candidates can evaluate each option against several criteria (cost, time to deliver, quality, subsequent support, etc.), and may include some or all of the following points: In-house development of the CRM: This could be a good option as: In-house software can be developed to match the exact needs of the business, rather than having to customise existing software or services. The data can be kept within the organisation: the other approaches require someone else to have access to, and to police, sensitive corporate data (from the point of view of both corporate strategic intelligence and individual data privacy). The use of the existing DBMS platform may serve to enable greater integration between existing systems, e.g., between the CRM system and other available MIS reporting functions. If we have slack human resources in the IT department with the requisite expertise, then these people can implement the CRM system without little additional cost outlay. The other options require potentially significant costs either upfront or on a reoccurring basis (e.g., annual license to access cloud CRM software). Implementing in-house will serve to provide worthwhile work activities for these employees. Subsequent support and maintenance activities may be provided by those that were involved in the development of the CRM software, thereby enabling quality support by people who are very knowledgeable about the software.

9 However, this may not be a viable option where the current IT staff are overloaded with other important work commitments and where they are inexperienced in this type of development. The costs of any additional staffing needs should be factored in, should this be necessary to ensure sufficient human resources for effective CRM development. It may take a long time to implement the system, because of other priority tasks, etc. Maximum of 10 marks for a sound evaluation of the in-house development option To outsource the development of a CRM system to a company that specialises in CRM solutions using well known CRM software: this has some advantages, such as: The outsource provider may be able to provide on-going support in addition to initial implementation, which would be to the benefit of the organisation (although will incur extra costs) The outsourcing company is expected to have the expertise in implementing their software in organisations, and therefore the risks that may be associated with an in-house development (such as the ability of staff to develop a useful and reliable system) may be minimized. The development of the CRM system being outsourced means that already overloaded staff can continue to serve the current needs rather than have to take on the burden of another set of systems development activities. The nature of the outsource provider whether there exists a well-established and stable company with a good reputation that could take on the CRM development and which management could trust to deliver in accordance with organisational requirements. However, the management needs to bear in mind that outsourcing companies can charge a significant amount for such developments, particularly if the CRM software needs substantial tailoring to suit the Company s environment. The software used may provide additional functionality that is not needed by the current Company, or may not support all aspects of the Company s CRM processes, and so on. Finally, the dependency on another company to provide such an important facility may not be favourable in the eyes of management. Maximum of 10 marks for a sound evaluation of the CRM outsource option To utilise the CRM services of a cloud computing company: this may be less costly upfront than the other options, particularly if an in-house IT department development would require the hiring of additional relevant staff and training before development, and if the cost of the outsourcing development contract is high. Also, there is no need for hardware beyond client workstations and network access, as all data is based on the server(s) of the cloud company. However, this needs to be weighed up against the facts that the total provision is dependent on the cloud company s ability to ensure sufficient system availability and reliability, and data confidentiality: for a CRM system that is critical to the organisation s marketing and sales, this may be a step into the unknown and/or too far at present. Other issues include the costs of annual service/license, the amount of customisation of the software to match the company s needs and who will do this, and also the nature of any on-going support (and associated costs). The company s credentials will also need to be evaluated. up to 8 marks for a sound evaluation of the cloud option TOTAL Q5 = , to a combined maximum of 25 Marks

10 Examiners Comments: This was the most popular question on the paper, with 84% of candidates attempting it. There were some excellent answers, but many candidates only provided enough relevant description to be awarded a bare pass mark. Many answers were simplistic in their treatment of the reasons why a particular option might be favoured over another. For instance, saying that in-house development will be more costly than the other options fails to take into account several factors, such as the potential availability of existing IT with previous experiences in CRM development, which could possibly lead the in-house option to be less costly than other options. Most candidates appropriately understood in-house development and SaaS, although some mistakenly believed that a DBMS can only manage one database at a time. A significant number of candidates failed to notice that outsourcing of the CRM system referred to the activity of (software) development only, and not to the entire IT department. As such, substantial portions of these candidates answers were largely incorrect and/or irrelevant. B5. a) Outline the principal similarities and the differences between a Management Reporting System (MRS) and an Executive Information System (EIS). (10 marks) b) For EACH of the following phrases, explain what it means within the context of MIS development, and justify why it is a typical Critical Success Factor for a large MRS development: i) Top Management Support. ii) Quality of the development team and its project manager. iii) Phased development approach. (15 marks) Answer Pointers: This is a question about traditional MIS subsystems and the factors that can be critical to MIS (and specifically MRS) development success. Part (a) required candidates to describe the key similarities and differences between an MRS and an EIS. Answers could include some or all of the following points: Similarities: Both support management decision making activities Both have some form of more static reporting capabilities, e.g., KPI indicator reporting versus regular reports (e.g., monthly sales report for each region, weekly report of employee hours worked). Both predominantly used for monitoring and controlling activities Both work off some form of database that at least contains extracted internal company data Differences: EIS is for direct manager (and was originally for senior manager) use, whereas it is common that an MRS is used by an intermediary on behalf of management. Initial target of EIS was senior management, whereas MRS were targeted towards tactical and operational management activities. EIS typically require both internal and external data feeds, but MRS typically only work off data that is internal to the organisation.

11 EIS are designed around the CSFs/KPIs of an organisation, at the levels required by management users. This is not so explicitly apparent within MRS reporting systems (although a well developed system will be providing reports that serve to monitor the more important aspects of the organisation!) EIS usually possess highly visual GUIs that utilise traffic light colour coding to indicate performance levels of a particular KPI. MRS tend to be more menu-based interfaces (still can be quite visual in nature though, using icons on which users can click for the represented report) and offering printed out or on-screen tabular reports. Drill down is typically possible from each KPI in an EIS to allow explanation for the performance level found. Drill down and roll up (opposite direction) are typically not provided from MRS reports. 2 marks for each similarity or difference * however many points made, to a combined maximum of 10 marks Part (b) required candidates to describe three well-known CSFs for MIS developments, and justify why they each need to be present when developing a large MRS. Candidates may make some or all of the following points in support of their answers: i) Top Management Support: This is the provision of support to the MIS development by members of the senior management team. This provision can manifest itself in several ways; to act as a champion or advocate for the MRS when necessary, to be involved in several committees that are associated with the development of the MRS (e.g., MRS steering group), and so on. Top management support is one of the most important MIS CSFs, as without it many MIS projects would not get past the drawing board. Unlike operational systems, MIS such as MRS do not have many easily identifiable (at least at the outset) and quantifiable benefits (most being quite nebulous such as improved decision making and increased reputation of the company ). This makes strong CBA results hard to achieve on paper. Without top management support at budget allocation decisions, MRS would not get the financial backing that they need against an operational system with more easily visible financial benefits. In addition, a large MRS may require substantial development time and finances. If there is a long time between initiation and production of the first tangible outcomes, then the development will rely on top management support for its continued backing during this time; without this, the organisation may consider the MRS a failure, lose interest and withdraw support. 2 marks for understanding of the CSF, plus 3 marks for justification = 5 marks ii) Quality of the development team and its project manager: This concerns the experiences, knowledge and skills of the development team and project manager with respect to developing MRS. If the project team are inexperienced in developing large projects in general, and large MRS in particular, then this poses a significant risk to the development of a quality product. For instance, they may not realise that management commonly ask for more reports than they actually need, leading to a very costly yet largely unnecessary implementation. Another aspect the team may fail to consider properly, due to inexperience, is the scalability of the MRS when developing the system, thereby limiting its lifetime in the advent of more data and/or processing requirements. The project manager needs to be able to effectively plan, monitor and control the work necessary to achieve the MRS, as well as motivate and lead the development team. If these attributes are absent in the project manager, then a large MRS which spans several months will not be well executed, could get significantly behind schedule and over budget, and could even run the risk of project termination and failure.

12 2 marks for understanding of the CSF, plus 3 marks for justification = 5 marks iii) Phased development approach: This is where a project is carved up into defined phases of development, so that each phase is suitably manageable, and can be delivered within a relatively short timescale. Users then gain benefits earlier than in the traditional approach. This approach is frequently possible to adopt for MRS developments as MRS typically have clearly defined reporting requirements that can be separated and developed at different times. This approach is vital within large MRS, as to do the whole system at once (using a traditional approach, for instance) would mean users would have to wait several months before anything tangible is visible and usable. Adopting a phased approach enables quick hits to be achieved, enabling management and users to see real benefits of the system and leading to their continued advocacy and sponsorship of the project. 2 marks for understanding of the CSF, plus 3 marks for justification = 5 marks Examiners Comments: Total B5 (b) = = 15 marks TOTAL B5 = = 25 Marks This was a fairly popular question on the paper, however many candidates failed to understand what was required to properly answer the question, particularly in part (b). Most candidates attempting part (a) were able to find at least one or two similarities and/or differences that enabled at least a bare pass to be achieved. Often candidates answered the question by first giving an overview of an MRS and then giving a separate overview of an EIS. Although some similarities and differences could be found when comparing the two overviews, the lack of an explicit comparison of the two systems meant less marks could be awarded. Answers to part (b) were disappointing overall, as candidates frequently misunderstood what the question was about. Sub-question i) was not about the provision of top management support via the implementation of CSFs and associated KPIs within an EIS. Sub-question iii) was not about a traditional approach to development (phased and traditional approaches are different!). All CSFs mentioned in the sub-questions required justifications with regard to large MRS developments only; frequently, this was not present. When candidates did understand the question properly, answers to part (b) were frequently too brief and/or vague. Overall, there were very few candidates who really got to grips with the requirements of the question, and gave thorough and relevant justifications for each CSF being present for large, MRS developments.