• It is claimed that data required to support strategic planning differs from data required to support operational  decisions in terms of the time period referred to and the source or origin of the data. Required       :

Briefly describe how data required to support strategic planning differs from that required to  support operational decisions in terms of:

  • Time period referred to. (4 marks)
  • The source or origin of the data. (4 marks)
  • The organisation you work for has hired a software engineer to develop a suite of software to manage your payroll application system. As the financial manager, you are working closely with the software engineer to ensure that the software quality assurance standards are attained.


  • List any four data validation checks that the software engineer should incorporate into

the program.                                                                               (4 marks)

  • Why is it important to test the software before implementing it? (2 marks) (iii) Suggest two measures that the software engineer must take in order to simplify user        training and support that is fundamental to the success of the information systems        (6 marks)                            (Total: 20 marks)
    •  Strategic planning:

    This refers to planning that covers a long period of time, usually 5 to 7 years. The planning determines the long-term objectives, resources and policies of an organization.




    They are concerned with daily or routine operations of the organization relating mainly to its primary activities. Examples include decisions to reorder stock when the stock is almost sold out and decisions to suspend a client from purchasing goods and services on credit due to an outstanding balance.


    How data required to support strategic planning differs from that required to support             operational decisions in terms of:

  • Time Period Referred To


    Data required for operational decisions usually covers a short time period usually in days or months. For example, data relating to the outstanding balance of a customer that determines whether or not the customer should be allowed to purchase more goods and services on credit usually spans a few days or utmost a month.


    Data required for strategic planning usually covers a longer time period, usually in years. From this data, forecasts can be made concerning market trends e.g. a plan to start another branch needs forecasts into the future say, in terms of sales, expenses, etc


    The Source or Origin of the Data

    Data required for operational decisions usually originates from within the organization. For example, stock level data and clients outstanding balances can only be sourced from within the organization in order to influence operational decisions.


    Data required for strategic planning usually has a greater external orientation. For instance, data about global markets that can influence an organization to globalize is external to the organization.


    • Validation This refers to the process by which a computer system identifies and reports incorrect data items. Validation occurs during data processing.


    Validation checks that should be incorporated into the program:

    • Sequence checks g. checking whether employee numbers are in sequence
    • Limit checks. For instance, salaries of employees should be checked within a certainlimit e.g. not more than Ksh 2,000,000
    • Range checks– could be used to check the correctness of processed salaries.
    • Validity checks for coded data. For instance, marital status of employees could bechecked for M (i.e. married) or S (i.e. single) and anything else should be rejected.
    • Reasonableness check. For instance, a processed pay slip, which indicates a negativesalary, should be investigated for error.
    • Existence check to ensure that all fields of a file contain an entry after data entry
    • Check digits– to detect transcription and transposition errors.


    • Testing enables errors in the software to be identified and corrected before the software is implemented. This testing ensures that the implemented system is highly reliable and free from error.


    • Measures that must be taken to simplify user training and support:


    • Use of an online training and support system


    Online training and support would be easily available to users at any time. The training and support could be provided at a specific site in the intranet (Organization‘s computer network) with multimedia (Text, sound and graphics) used to enhance understanding.

    • Training schedules could be supplied to system users so that they know in advance howlong the training is supposed to take and what is expected of them during the

    training. This would improve user cooperation and thus simplify the training.

    • Training should be carried out in phases so that users are gradually familiarized with theinformation system. A general timing approach to be used could be as follows:
      • Before the feasibility study whereby the users are given a general explanation ofcomputer systems and their relevance in function application and reason for the

    desire to introduce a computer in the specific functions on the organization.

    • Before investigation where users are explained about the impact of the new

    systemand the importance of their involvement in development. o During fact finding so that they can cooperate and provide useful information

    toguide the system developer during the analysis phase of SDLC.

    • Before programming so that they can prepare themselves for specific roles at theimplementation stage. These may include testing activities or roles. o Before implementation to enable users cooperate and play their roles as assigned       o  After implementation in order to assist in evaluation of system performance.


  • The accounting department of a medium sized business organisation for which you work wishes to purchase’microcomputers to support its functions. You have been asked to draft a document that outlines the hardware and software specifications for the

proposed project.

What would your draft contain?                                                               (8 marks)

  • User friendliness is one of the key and desirable features that form a basis for evaluating competing software packages.



Name and describe three features of a user friendly software.(6 marks)(c)Why are expert information systems not popular in business systems?

(4 marks)

(d) Define the term “Business continuity planning”.                                         (2 marks)

(Total: 20 marks) 



  • The document that needs to be prepared is an invitation to tender document.


Invitation to Tender (ITT)

This refers to a document issued to a range of suppliers. It sets out the specifications for the required equipment and software and it should explore how the hardware will be used and the time and scale. The also sets out the performance criteria for the required system.


Contents of ITT:

An ITT document usually contains background information together with and indication of the  purpose of the system. This includes:

      • The volume of data to be processed by the system. The complexity of the system requirements and the system interfaces should be stated.
      • The number of individuals who will want to access the computer system after installation and whether access needs to be instant or not.
      • The speed of the hardware processing required or expected.
      • Input and output systems desired.
      • The type of processing methods preferred.
      • Estimated life of the computerized system.
      • Possible upgrades or expansions anticipated.
      • Other general considerations include:
        • Contact person in the company
        • Overall financial constraints oThe form that submission is to take.
        • Closing date for submission of tender.
        • The address to which the tender is to be sent.
        • The reference person to which the tender is to be addressed.
      • The business organization could also specify how it intends to acquire the hardware and software. Available options include: o Purchasing o Leasing o Renting
        • User friendly software This refers to software that the user finds helpful, easy to learn and easy to use.


        Features of user friendly software:

        • It should be relatively easy for the user to start using the software.
        • The software should be as much as possible self-contained so that the user is not forced into accessing manuals or dealing with things that should be kept outside the system.
        • The amount of effort and information required of the user to get the system to complete required tasks should be kept to a minimum.
        • The user should be able to adjust to different levels of expertise between users, as users grow in competence.
        • The use should be made to feel in control of what is going on.
        • The software should behave in a logical and consistent manner, enabling the user to reason about what is going on and apply what has been learned.


        • Expert information system

        This refers to a knowledge intensive information system that captures expertise of a human in limited domains of knowledge. Expert information systems can assist decision making by asking relevant questions and explaining the reasons for adopting certain actions.


        Reasons why expert information systems are not popular in business systems:

        • They are quite narrow, shallow and brittle. They typically perform very limited tasks that can be performed by professionals in a few minutes or hours.
        • They are expensive to purchase since they contain captured human expertise.
        • Expert systems cannot handle exceptional decision making situations which are typical of day-to-day business. For instance, CLUES, an expert system used by Countrywide Funding Corp. in Pasadena, California, USA is able to process normal loan applications with 95% accuracy but it‘s unreliable when faced with exceptional situations such as those involving a self-employed person or complex financial schemes. Such exceptional situations

        are best handled by insurance underwriters.

        • Incase a poor decision is made, a business organization cannot hold the expert system accountable because it‘s not a person rather it‘s a tool. The organization can only pursue those responsible for developing the system if tit was in-house developed. If it was purchased or outsourced, then the organization must have a really good case for it to hold the concerned organization responsible. However, if a manager of an organization makes a poor decision, he/she would be fully accountable. Human decision makers can be

        questioned regarding the success or failures of their decisions.

As much as expert systems provide solutions to business problems, they are not used inisolation. They are used together with a human decision maker who considers the advicefrom the expert system before giving the final decision. Thus, expert systems do not contribute to substantial cost reductions due to downsizing of staff.

  • Business continuity planning

This is a type of contingency planning that provides the ability to continue business functions through a disaster. Business continuity planning enables a quick and smooth restoration of operations after a disruptive event e.g. a fire, floods, etc


Four companies A., B, C and D, which have similar activities but are not part of a group, have the following computer configurations,

Company A: Three stand-alone micro-computers (CPU, VDU, Keyboard, hard disk and  mouse) each having its own printer.

Company B Small office with 11 micro-computers linked in a Local Area Network (LAN). Each micro-computer has its own processing ability, but is linked via the LAN to central printers, disk storage, file server and tape streamer devices. The LAN is completely~ self-contained”, This means that there are


Questions – Past Paper                                                                                   19


no modems or other similar external devices attached to it.

Company C Four processing locations connected by a Wide Area Network (WAN). Each location has a LAN in the same configuration as company B, although there is also a dedicated landline to two of the three. offices (offices are connected in a ring to two of the other offices). Each server is updated with. data from the other three locations at 15 minutes interval.


Company D Twenty processing locations, each with its own LAN in the same configuration as company B. All locations are connected in a star configuration to head office. File servers at each location are updated from head office after every five minutes, Each location has a reserved external., telephone line for selected customers to use. Orders by customers are

transmitted direct on to the company D‘s Computer system


  • State, with reasons, for each company, what security procedures should be applied to

ensure there is no unauthorised access to its computer system.                                           (12 marks)


  • Company B is planning to establish additional branches and wants to upgrade its systems to duplicate those of company D.

State and explain the data communication systems you would recommend  (8 marks)

(Total: 20 marks) 



  •  Terminologies in the question:

LAN (Local Area Network)

This refers to a computer network in which computers and peripheral devices are in close proximity. Specifically a LAN is a collection of computers within a single office or building that connect to a common electronic connection commonly known as a network backbone.


Wide Area Network (WAN)

This refers to a computer network that is countrywide or world wide. It normally connects networks over a large physical area such as different buildings, towns or even countries.



Ring network configuration

In this configuration, each device is connected to the other devices in the network to form a ring.


Star network configuration

This consists of a number of small computers or peripheral devices linked to a central unit called a main hub.


  • Company A

Since the computers are stand-alone, there is no need for network security mechanisms.

Physical measures that could be used to ensure security include:

  • Use of bolting door locks at computer room entrances. These locks require the

traditional metal key to gain entry.

  • Use of combination door locks (cipher locks). These use a numeric keypad or dial to gain entry.
  • Electronic door locks. This system uses a magnetic or embedded chip-based plastic card key or token entered into a sensor reader to gain access. o  Manual logging of visitors to the company to discourage intruders.
  • Electronic logging of visitors to the company to discourage intruders.
  • Identification badges (photo Ids).
  • Video cameras.
  • Security guards.
  • Not advertising the location of computer facilities to make it hard for intruders who have already gained entry into a company‘s premises to locate the computer facilities.


Logical security measures that could be used to prevent unauthorized access:

  • Username and password identification at each terminal to control access to    microcomputer resources.
  • Data stored on the stand-alone microcomputers should be encrypted so that an

            intruder who has already gained access to the data to be able to read data

  • Token devices, one-time passwords. This is a two-factor authentication that generates

one-time passwords that are good for only one logon session.

  • Biometric security access control- based on a physical feature of the user such as finger print or eye retina scan.
  • Data classification- by assigning classes or levels of sensitivity to computer files, management can establish guidelines for the level of access control that should be assigned. Confidential data should be given the highest priority when being protected from unauthorized access.


  • Company B

The physical security procedures described for company A could be applied to company B to ensure that no one has a physical chance of tapping into the corporate LAN. The logical security procedures described for company A would still apply to company B. In addition

other logical measures would be required for the corporate LAN. These include: oUse of terminal identification files by communication software to check the authentication of a terminal when it tries to send or receive messages.

  • Data encryption- to protect messages from disclosure during transmission.
  • Network monitoring devices may be used to inspect activity from known or unknown users.


  • Company C
  • Again, the physical security measures described for company A could be used for company C to secure the computer facilities from physical unauthorized access. The logical security measures for company A would still hold for company C. Additional logical security procedures required would be similar to that of company B since company B‘s configuration
  • (a LAN) is similar to Cs configuration (a WAN composed of many LANs similar to Bs). Specific emphasis should be on securing data in transit as the servers are updated. An appropriate data encryption algorithm (scheme) would suffice.
  •  Company D
  • The physical security measures should be similar to those of company A. The measures should be enforced in each of the twenty processing locations. The logical security measures should be similar to those of companies A, B, and C with the exception that the security system would be centralized about the head office system to make it more full proof. This is because in a star configuration, requests for data access must first be channeled to a central node in the network according to the polling media access control mechanism. The intrusion detection at the central node (head office computer server) would thus be able to monitor all system user requests.
  • Security procedures that should be applied:
  • Data communication systems I would recommend:
  • Modems
  • These would enable digital data to be transmitted over the telephone links present in company D‘s network configuration by converting it to an analog form and then
  •          reconverting it at the receiving end.
  • Telecommunication links- to provide interconnectivity between the processing locationsand the head office.
  • A much more powerful network operating software (e.g. Linux, Unix, Windows NT) to be able to cope with the large number of users. The network operating software should also
  •          be able to support frequent updates of file servers at each location.
  • Multiplexers

They are required to combine all links from the PCs in a processing location into a telecommunication link. Multiplexors are thus needed to share telecommunication links amongst the many users.



  • A company needs information on whicb to base decisions concerning the current operations and future plans. Explain areas of management control where computers are

used or can be used.   (8 marks)

  • One important aspect of information-systems management is the physical and managerial location or sitting of the information system within an organisation.

Explain two information systems location options indicating circumstances under

which~ each siting allocation is appropriate. (12 marks)

(Total: 20 marks)



  • Management control  This refers to the activity of monitoring how effectively resources are used and how well operational units are performing.


Areas of management control where computers are used/can be used:

  • At the operational level where transaction processing systems (computerized systems that perform and record the daily routine transactions necessary to conduct the business) could

be used to coordinate accounts receivable.

  • At the knowledge level where office systems (systems that automate office procedures) and knowledge work systems (systems that aid knowledge workers to create new information and knowledge) may be used for electronic scheduling of events and product
  • At the management    level     where

TECHNOLOGY (MISs- information systems at the management level of an organization that secure the functions of planning, controlling and decision making by providing routine summary and exception reports) could be used for budget preparation and in identifying

production cost overruns. Also

Decision support systems (information systems at the organization‘s management level that combine data and sophisticated analytical models or data analysis tools to support nonroutine decision making) could be used in supporting non-routine decisions such as

identifying production facility locations for a manufacturing company.

  • At the strategic level where executive support systems (information systems at the organization‘s strategic level designed to address unstructured decision making through advanced graphics and communications) to support senior managers in making decisions concerning new products and new markets.


  • Two options available are: –

Centralized information system

In this option, the processing of the information is at the central location i.e. the head office. This means that data will have to be captured and taken to that location where processing is to take place. The data can be taken to the central location either by:

  • Electronic means

Here data will be transmitted electronically from different sites to the central location where processing is undertaken. These sites have to be linked to the central processing through  computer networks.

  • By physical means

In this case, transaction records will be transported by physical means e.g. post or courier services to the central location where processing will take place.


  • Where standards have to be maintained o Where high degree of control is required.
  • Where IT experts are concentrated in one location.


Distributed processing

Here, processing takes place in many dispersed locations. A distributed system is one where there are several autonomous but interacting data stores and systems of different geographical

locations that are linked through the use of computer networks.              Circumstances:

  • Where there is need to meet or tailor the system to local

needs. o Where there is availability of enough experts.

  • Where fault tolerance is essential. The many processing locations provide an

alternativeprocessing option should one location fail.


  • During systems development life cycle (SDLC): the systems analyst uses some tools to model the users requirements in such a way that he is able to communicate his understanding of the users needs.


Identify and describe three tools the systems analyst may use. to model the systems requirements. (6 marks)


  • Graphical user interface (GUI) ,have proved to be more user friendly than current character based systems.


Other than the graphical user interface, give a summary of at least three interfaces you would use in “the design of systems. (3 marks)

(  Briefly explain three ways in which GUI makes a system user friendly.

(6 marks)

Using your own experience, explain why more-and more software is being purchased for windows environment as opposed to character based environment.             (5 marks)

~                            (Total: 20 marks)



  • a) System analyst

This is a specialist who translates business problems and requirements into information requirements and systems, acting as liaisons between the information systems department and the rest of the organization.

System development life cycle

This is a traditional methodology for developing an information system that partitions the systems development process into formal stages that must be completed sequentially with a very formal division of labour between the end users and the information systems specialists.


Tools that may be used by the analyst to model the systems requirements:

  • Data flow diagrams (DFDs)

These are visual tools that show the various processing steps and data flow through a  system. DFDs are constructed using four major components:  o External entities

These are sources of data input to the system or the destinations of data from the system. The standard notation for an external entity is a square.

  • Data stores

They represent the stores of data within the system. Examples are computer files or databases. o Process


These are events that change the state of data fed to them. The standard notation for a process is a circle.

  • Data flows

They are movements of data from one component to the other. The standard notation for a data flow is a unidirectional, labeled arrow

  • System flowcharts

These are diagrammatic representations that illustrate the sequence of operations performed to get the solution to a problem. They are useful in understanding the logic of

            complicated and length problems.             

 Entity relationship models (ERMs)

They are detailed logical representations of the data for an organization or for a business area. They are expressed in terms of the entities in the business area, the relationships among the entities and the attributes of the entities and their relationships. An entity is an object of interest (i.e. a thing or concept) about which data is to be stored. An attribute is a

           property or characteristic of an entity.             

Entity life history diagrams (ELHs)

These are diagrammatic representations of the lives of entities from their creation to deletion. The life of an entity is expressed as the permitted sequence of events that can cause an entity to change. An event may be thought of as whatever brings a process into

         action to change entities.

  • Data dictionary

This is a central storehouse of data about an information systems data and data transformations. Data dictionaries are necessary because it is impossible to fully describe all components of DFDs and E-R models. Data dictionaries describe in detail data flows, data stores, external entities, data structures, system processes and data elements.


  •  Graphical User Interface (GUI)

This refers to a human computer interface (HCI) based upon a graphical display. A GUI makes use of icons, buttons, bars and boxes to perform tasks.

Human Computer Interface (HCI)

This refers to the environment where the interaction between end users and the computer is said to take place.

Other interfaces that could be used in the design of systems:

  • Command driven interfaces– these enable the user to quickly and simply instruct thecomputer on what to do via commands.
  • Menu driven interfaces- these provide users with menus. The menus provide the userwith a number of options and a simple means of selecting between them.
  • Direct manipulation interfaces- these present the user with a set of options that arerepresented by icons. The user moves the cursor using the mouse until it is over the icon and then clicks the mouse button to select the option.
  • User Interface Management System (UIMS)- These create a means by which aconsistent interface with the same ―look and feel‖ can be provided for any number of different applications within the same system.


Ways in which a GUI makes a system user friendly:

  • GUIs minimize the time taken to perform trivial operations e.g. opening a file. Forinstance, to open a file in the GUI environment of the windows range of operating systems one only has to double-click on the icon (graphical symbol) representing the
  • One doesn‟t have to memorize commands with a GUI as compared to a command-driven interface. Hence, GUIs make it very easy to learn how to use a system.
    • GUIs minimize the typing of data required from the user because they provide agraphical means to supplement typing of data. Hence, they are convenient to system
    • It‟s easy to access help form a GUI as compared to other interfaces such as command-driven interfaces. To access help, for instance, in a windows operating system environment, one only has to locate and click-on the help option in the menu bar of the program‘s window. For a command-driven interfaces such as that of Microsoft DOS(disk operating system), one has to recall the help command before he/she can access help. If the user has no clue of the help command, then he/she is stuck.


    • Reasons why  more  and  more  software  is  being  purchased  for  windows  environment  as opposed to  character-based environment.
      • The windows environment saves on training of users. Most software developed for the windows environment conforms to some basic standards. For instance, there are always three buttons to the top right end of each window for the purposes of minimizing, closing or maximizing the window. Usually, also, there is always a menu-bar present in all program windows to provide users with various options. Since most software applications adhere to these standards, users of windows environment software can easily learn how to use many more software after learning how to use one software. Command/character-based systems have minimal standards. For instance, there are no conventions as to the naming of commands. This makes it very difficult to learn many different programs produced forcharacter-based environments.
        • Majority of the software today is based on a windows environment because its user Hence, customers have a wide variety to choose from.
        • Since majority of the software available is for the windows environment, organizations continue to purchase more and more windows-based software as compared to characterbased software in order to ensure compatibility with already existing systems.


  • The adoption of database systems as a way of managing information systems is gaining popularity over standard file



  • State the features of a database management system that provide data security and

integrity.                                                                                           (4 marks)

  • What problems are caused by data redundancies? (4 marks)
  • Centralized control avoids unnecessary data redundancy or duplication. What precautions should be taken into account -in the process of establishing a centralized data control system to avoid data redundancy? (6 marks)
  • It is important to bear in mind that information may be relevant to people outside the organisation as well as to its ” internal  management  and   Sometimes  it  happens that some decisions relating to an organisation are taken by outsiders.

State six examples of decisions relating to an organisation that may be taken by outsiders (6              marks)

(Total: 20 marks)



  • Database system

This refers to a system composed of a group of related files.              File

This is a group of records of the same type.


This refers to a group of related fields e.g. a student record may be composed of fields such as  student name, student number, course, date of birth, etc  Database management system

This refers to a complex software system that constructs, expands and maintains the database. It also provides the controlled interface between the user and data in the database.


  • Features of a DBMS that provide data security and integrity:
    • Usernames and passwords- used to prevent unauthorized
    • Transaction locks e. write locks and read locks. Write locks prevent other processes(programs) from updating data currently being updated by a process. Read locks

prevent any other processes from updating data that is currently being read by a process.

  • Checkpoints and journals. A checkpoint is a ―snapshot‖ of the database before it wasupdated by processes/programs and the journal holds details of updates subsequently made. In the event of failure, the recovery process can rebuild the database

from checkpoints and journals.

  • User rights and privileges– access to files or fields of records could be granteddepending on the user privileges.

Encryption– coding of data by special algorithm that renders them unreadable without decryption

Integrity checks e.g. checks on relationships amongst tables to ensure that they are validand data validations


  • Data redundancy

This refers to the presence of duplicate data in multiple data files. Data redundancy occurs when different divisions, functional areas, and groups in an organization independently collect the same piece of information. For instance, within the commercial loans division of a bank, the marketing and credit information functions might collect the same customer information contained in separate files.

Problems caused by data redundancies:

  • Large storage space requirements

Since each functional area of an organization maintains the same piece of information,  the resource requirements (hard disk, optical disk, magnetic tape) may be very large.

  • Problem of securing all the redundant data

Though the data in such a database is redundant, it must still be secured from unauthorized access. This task is very difficult to implement because each functional area

            of an organization holds the data.

  • Confusion

Since data is collected and maintained in so many different places, the same data may have different meanings in different parts of an organization. Simple data items such as the fiscal year, employee identification, and product code can take on different meanings

            as programmers and analysts work in isolation on different applications.

  • Difficulty in performing updates

To update a redundant data item, one must update all instances of the redundant item in  all the department files of an organization. This is clearly hectic!

  • Compromised system integrity

In cases where only one instance of a redundant data item is updated, the system integrity is compromised since the other instances of the redundant data item in the rest of the organization‘s departments will differ from the updated instance of the redundant data item.


  • Precautions that should be taken into account in establishing a centralized data control system to avoid redundancy:
  • One should ensure that adequate security mechanisms are in place to ensure that users are granted access to only what they are supposed to access.
  • One should ensure that the system is fault tolerant i.e. it should be not too centralized as to be vulnerable to failure.


          • Decisions relating to an organization that may be taken by outsiders:
            • Changes in value added tax
            • Changes in materials costs
            • Change in bank account charges
            • Regulation of prices e.g. petroleum prices, matatu fares, etc
            • Regulation of bank interest rates
            • Changes in legislation e.g. changes to clauses in the Companies Act 7. Imposition of exports quotas


  • Risks to data are relevant to manual as well as computerised systems. With computerized systems however”, the risks are greater, because data are held on

       magnetic files and cannot be seen or read by the human eye.

What risks are particularly relevant to data storage on a magnetic medium?

(5 marks)

  • Your managing director is in two minds about establishing a company website and has asked you to produce a “balanced report” on the pros and cons. You have already written several pages on the benefits and you have just started on a section headed “Anxieties”.

What sub-headings might this section include?                                         (5 marks)

  • Why do  organisations  automate  reasoning  or  decision  making  tasks  which  human  beings are naturally better able to perform than computers? (4 marks)  (d)State six ways in which a business can use Desktop Publishing (DTP).(6 marks)

(Total: 20 marks)



  • Magnetic medium

This refers to a secondary storage medium that utilizes magnetism to store data. Examples include magnetic disks (hard disks and floppy disks) and magnetic tapes.


Risks to data storage on a magnetic medium:

              • Strong magnetic fields– these could destroy the data on the medium by altering themagnetic patterns on the media
                • Intense heat– this alters the magnetic patterns on the media thus destroying the datarepresented by those magnetic patterns.
                • Dust– this results in hard disk crashes and also may render floppy disks unreadable. A diskcrash is a situation that arises when dust particles come into the space between a readwrite head of a hard disk and the disk plate. Disk crashes render a hard disk unusable thus

                resulting in loss of stored data.

                • Theft– since magnetic media are portable, they are liable to theft. Stealing a magneticmedium device is as good as stealing the data it contains since the data stored can be accessed after the device has been installed on another terminal.


                • Anxieties about establishing a company website:
                  • High costs involved

                It‘s costly to develop a website or to outsource (pay an information technology firm to develop the website) development due to the high level of expertise required. Maintenance costs of the website would also be very high since maintenance of websites is an activity that needs to be carried out frequently. The cost of hosting the website would also have to  be considered.

                • Business process reengineering

                Establishing a company website may involve change of business processes. Setting up an ecommerce site may force an organization to change its business processes to foster the selling of goods and services over the Internet. Changes to business processes may encounter internal resistance from company employees or external resistance in the form of customer reluctance to comply with the change e.g. customers may be reluctant to switch

                       from the traditional channels of doing business to the Internet.

                • Exposure of organizational information to competitors

                Setting up a corporate website would mean that organizational data such as the nature of its business and the products and services offered will be available to competing businesses. Some companies are usually conservative to setting up corporate websites because the information that is displayed on the websites could be used by competitors to improve their

                       competitive advantage.

                • Security

                If the company website is hosted (contained) within the company then setting up the website would expose organizational data to security threats from the Internet. The website

                       would also provide an avenue for hackers to access the organization‘s computers.

                • Training

                Company staff may have to be trained on how to use the website. For instance, employees may need to be trained on how to log-on and how to access, say, their business e-mails. Training would be expensive in terms of time and costs (trainers salaries).


                • Reasons for automation of decision making roles:
                  • To achieve speed in making structured decisions g. an order to restock when stocklevels are low could automatically be implemented by a computerized solution to

                decision making.

                • By automating structured decisions, human beings are freed to more complexstructured decisions that require creativity, which is not provided for in
                • Computers are more reliable when it comes to making routine decisions. A human beingis capable of forgetting to perform a routine decision e.g. restocking particularly when under stress. Computers on the other hand, are programmed and thus they cannot forget to

                perform routine tasks. Infact, they are excellent at routine tasks

                • A computerized solution to decision making is cheaper than a human solution todecision making. Managerial decision makers usually offer their expertise at a high cost. A computerized solution to decision making would only involve an initial investment cost and

                subsequent maintenance costs which are in the long run cheaper.

                • Objectivity- computers are totally objective. Human beings could have other factors thatmay affect their reasoning (e.g. anger) which could end up compromising the decisions they make.
                  • Desktop publishing (DTP)

                  This refers to technology that produces professional–quality documents combining output form word processors with design, graphics, and special layout features. Examples of software used for desktop publishing include PageMaker and Publisher.

                         Ways in which a business can use Desktop Publishing:

                  • Production of brochures and flyers
                  • Production of manuals for staff
                  • Production of certificates
                  • Production of newsletters
                  • Production of calendars and diaries 6. Production of quality commodity catalogues.QUESTION EIGHT
                    • Decision support systems (DSS) help to fulfil management’s requirements for computerized information systems by assisting them in complex and unstructured tasks.



                    Describe the relevance and uses of a DSS to management accountants.     (8 marks)


                    • Name and explain three tasks that the systems analyst would undertake in the design phase of information systems development process. (6 marks)
                    • Explain why Local Area Networks (LANs) have been successful in improving the flow

                    of data and information in organisations.                                         (6 marks)

                    (Total: 20 marks)

                    ANSWERS TO QUESTION EIGHT


                    • Decision support system (DSS)

                    These are information systems at the organization‘s management level that combine data and sophisticated analytical models or data analysis tools to support decision making (specifically semi-structured and un structured decision making).


                    Relevance of DSSs to management accountants:

                    DSSs help management accountants to make semi-structured and unstructured decisions  relating to accounting.

                    Uses of DSSs:

                    DSSs assist management accountants in:

                    • Evaluating planned asset acquisitions
                    • Evaluating investment options
                    • Controlling organizational expenditure
                    • Evaluating proposed asset disposals
                    • Budget planning by enabling simulation of how the budget would look like when various parts of it are altered.


                    • Tasks undertaken by the systems analyst in the design phase of the information systems

                    development process:

                    • Soliciting ideas and opinions from users, vendors and IT specialists. Users ideas andopinions are useful in reviewing systems designs such as output designs (specifically document/form design). Vendor and IT specialist‘s opinions are critical when producing

                    hardware and software specifications.

                    • Ensures adherence to internal technical design standards g. program designstandards that ensure completeness, usability, reliability, performance and quality of

                    the system being developed.

                    • Design of outputs, inputs, interfaces, software and processes for the system
                    • Participation in design reviews in order to establish areas where improvements can bemade to the system designs.
                    • Oversees the preparation of the systems specification document.


                    • Local Area Network (LAN) This refers to a collection of computers within a single office of building that connect to a       common electronic connection (network backbone).Reasons for the success of LANs:LANs enable faster sending/receiving of data and information.Since the movement of data and information is electronic, the sending and receiving of data and information over the LAN is almost instantaneous.LANs eliminate bottlenecksWithout a LAN, the sending/receiving of data and information contained in documents is

                      usually through a 3rd party responsible for delivering the documents to the intended recipient

                      department. At the recipient department the documents also have to be sorted out before being delivered to the intended employees LANs eliminate the bottleneck of a 3rd party since an


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