• Kenfin Ltd is a medium size commercial bank having branches in major towns in

Kenya. The bank provides over the counter services and is planning to introduce online  banking services. The online banking services will enable the bank to centralize some  information processing systems while decentralizing others. You are the project manageroverseeing the implementation of the online banking services project.

What information systems services would you  recommend to  be centralized or decentralized? Justify your answer citing any assumptions made.      (8 marks)

Describe three key risks that may affect the duration and/or cost of the project.

(6 marks)


  • Describe how a software developer can make use of the internet. (6 marks) (Total: 20 marks)ANSWERS TO QUESTION ONE 

    This refers to a computerized banking system that enables customers to do most of their banking transactions via home computers linked to proprietary networks or the internet.


    Services to be decentralized:


    • Receipt of balance enquiries and reply to these enquiries in the form of balance slips. Software could be designed handle these enquiries thus eliminating the need for anover the counter service. The enquiries could thus be made from a remote computer linked to the bank‘s central computer containing the customer database and the replies to these enquiries sent via the network linking the bank‘s computers to the remote
    • Receipt of requests for bank statements and replies to such requests.

    Software could also be designed to handle these enquiries thus eliminating the need for an over the counter service. Such enquiries could be made from a remote computer linked to the bank‘s central computer containing the customer‘s database. Replies could be

                forwarded via the network to the remote computer.

    • Receipt of foreign exchange rates enquiries and replies to such enquiries

    Again, software could be designed to handle these enquiries thus eliminating the need for an over the counter service. Such enquiries could thus be made from a remote computer

                linked to the bank‘s central computer containing the exchange rates file.

    • Receipt of simple enquiries as to the type of accounts offered by Kenfin ltd and the reply to such enquiries. Software could also be designed to handle these enquiriesthus eliminating the need for an over the counter service. Enquiries could thus be made from a remote computer linked to the bank‘s central computer containing the

    file that describes the types of accounts offered by the bank.

    • Receipt of simple enquiries regarding the types of loans offered by Kenfin ltd and the reply to these enquiries. Software could also be designed to handle these enquiries.The enquiries could thus be made from a remote computer linked to the bank‘s

    central computer containing the loan types file.

    To be centralized:

    • Complex loan enquiries


    Such enquiries warrant the advice of a personal banker since its difficult to design software to respond to such enquiries. Hence, such a service should be centralized at the

                bank‘s branches where personal bankers are available.

    • Complex account opening enquiries

    Such enquiries may include questions concerning the possibility of opening multiple accounts. Such enquiries are best dealt with by a personal banker and thus they are

                restricted to the bank‘s branches meaning that they must be centralized.

    • Cash and cheque depositing

    This service should be centralized for convenience on the part of the bank. It could be decentralized where such deposits would have to be mailed but this would imply that there have to be security checks in the mailing processes, which at current are not present in Kenya‘s post system. Decentralization would mean that the mailing of cash and cheque deposits must be reliable in terms of speed in order to ensure that transactions are updated on time. Reliability in terms of speed comes at a cost that must be incurred by the bank. Since Kenfin is a medium-sized bank, it would not be able to cope with such a  system.

    Risks that may affect the duration and/or cost of the project.



    • Changing equipment costs


    Changing costs of hardware and software equipment required by the project could  increase the cost of the project beyond the budgeted level.

    • Insufficient funds– this could lengthen the duration of a project since an organizationwould have to wait until it has adequate funds before it can resume the
    • Poor planning– Poor plans may delay a project since time will be spent reformulating theplans to meet the organization‘s objectives. Poor plans may also result in over

                  expenditure as management may abandon unrealistic budgets and spend freely.

    • Poor management commitment to the project.

    Management‘s lack of commitment shown by their absence during meeting and reluctance to provide funding to project phases could delay a project beyond

                  implementation time.

    • Unhappy members of the project team. An unhappy team has low motivation to workand consequently deadlines may not be met on time resulting in project delays. b) How a software developer can make use of the Internet:


    • The Internet as a source of program code


    The software developer could source code needed for specific parts of a program being developed from the Internet. For instance, a programmer could source code used for implementing a username and password security system for a specific application such as a

                payroll application. This would thus save the developer time in coding.

    • Expertise from programming websites


    A software developer could join programming groups in websites such as for free and thus get an opportunity to share ideas and exchange advice on software development issues.


    • The software developer could also view software similar to the one he/she intends to/is developing via the Internet. Usually most software for sale over the Internet isprovided for free or at a low cost for trial. The software developer could thus register for these software trials in order to see how the software implements the functions it‘s supposed to carry out. The software developer could thus use the ideas in developing

                his/her own software.

    • Internet as a platform for testing software.


    Once the software developer has finished creating a program he/she could make it available over the Internet for free at a low cost for other Internet users to test it. Through the feedback received, he/she could modify the software so as to improve its accuracy, usability, and reliability. The only downside of this approach is that by making the software available on the Internet, the developer is exposing his/her originality to unscrupulous programmers.

    • Internet as a tool for communication.


    Software developers working in groups could greatly benefit from the Internet through the concept of groupware. The software developers could be in constant communication via groupware such as Microsoft Outlook which provides chat services through Microsoft Net meeting and e-mail services which could greatly boost communication and hence productivity of the software developers.



    • Suggest the three types of decisions that a management accounting information system can support indicating the type of accounting information required to support each

    decision.                                                                                                    (6 marks)

    • It is claimed that fourth generation languages (4GLs) can reduce delays in applications       development and make information freely and readily available.

    Comment  on  this  statement  discussing  four  grounds  that  consistently  support  or  disapprove it.         (8 marks)

    • What does an organization‘s approach to system conversion depend on?

    (4 marks)

    • In the context of computer programming, differentiate between source code and object          (2 marks)                       (Total: 20 marks)
      • a) Management accounting system

      This refers to an information system that enables the planning, organizing, and monitoring and control of decisions of the accounting function of an organization to be executed.

      Types of decisions that can be supported by a management accounting information system and the type of accounting information required to support each decision:

      Controlling organizational expenditure

      Budgeted amounts for an elapsed period and the actual amounts spent during the elapsed period are required to support this type of decision.

      • Investing excess funds Information on returns on various investment options, which is produced by simulation of     many business scenarios, is required to support this type of decision.
      • Borrowing funds in order to meet an organization‟s cash needs in periods of insufficient cash flow.

      Credit status forecasts produced from simulating the current and future business conditions  can support this decision.

      • Acquiring new assets (e.g. IT resources, buildings, etc)

      Net present values, internal rate of returns and payback periods are required to support this              decision.

      • Disposal of plant assets during a fiscal year The Net Present Values of the assets at the end of the fiscal year in question could be used to support this type of decision.


      • Fourth generation language:

      This refers to a programming language that can be employed directly by end users or less-skilled programmers to develop computer applications more rapidly than conventional programming

      languages. Some features of 4GLs include:

      • Prototyping – a systems development technique that uses software in a package of formsand screen painters, to allow the user to quickly produce a simulation of the output

      required from the finished system

      • Query languages– 4GL tools which may be used in conjunction with a DBMS to enter,update and retrieve information without having to use conventional programs
      • Report generators – 4GL tools that augment the features of a query language with theability to format a management report with headings, sections and totals
      • Application generators – 4GL tools that allow the creation of complete applicationprograms. The degree of sophistication of these programs may vary from an end user setting up a program to accept data and produce business graphics, to a more sophisticated programmer creating software capable of sophisticated file management and transaction processing.


      1st alternative: Support the  statement. Backing grounds:

      • 4GLs support development by prototyping which results in software being developed in a short time since user requirements can be quickly clarified with this approach.
      • Query languages enable end users to quickly update and retrieve information without having to use conventional programs thus reducing the delay in applications development.
      • Report generators such as Oracle report writer enable end users to quickly create and format management reports with headings, sections and totals thus reducing application development time.
      • Application generators enable the speedy creation of complete application programs in a 4GL thus reducing application development time.
      • 4GLs enable the creation of IFORMATION COMMUNICATION TECHNOLOGY via query languages, report generators and application generators. Such information systems are capable of producing periodic, exception and adhoc reports which make information

      freely and readily available to managers for the purpose of decision making.

      2nd alternative answer: Disapprove the

      statement Backing grounds:

      • End users using a 4GL or 4GL tool still require some training on the various features of 4GLs and hence there is a significant amount of systems development time spent on training. These delays in applications development may be significant.
      • Prototyping is a feature of 4GLs doesn‘t necessarily imply short development time since the process of iteration of changes to the system being developed may be long before an

      acceptable system is delivered to the user.

      • In cases whereby the prototype is coded in a high-level language after acceptance by the end-user, considerable development time is spent coding the prototype.
      • Reports that are produced by 4GL tools are only available to those end users who are capable of manipulating queries to produce desired reports. Such an end-user needs to be trained on formation of queries. Thus it can be argued that 4GLs do not make information freely and readily available to everyone. They only make information freely and readily available to trained users.


      • Factors affecting an organization‟s approach to systems conversion: The nature of the system

      When the new system is small and simple then direct changeover approach is favoured.

      • Differences between the old and the new system

      When the old and new systems are substantially different then direct changeover approach is favoured. When the old and new systems have similar aspects then phased or parallel changeover could be used.

      • The size of the organization‟s labour force

      When there is no extra staff to oversee or undertake parallel running of both systems then direct changeover is favoured.

      • Level of management‟s confidence in the new system. When the management has complete confidence that the new system will work, then direct changeover is used.  Organization sizeWhen the size of the organization is large, it could carry out pilot changeover in combination with direct, parallel or phased changeover.


      • Source code  This consists of a program in high-level language (i.e. English-like statements) before translation  into machine code (statements are coded in the digits 1 and 0).

      Object code

      This consists of a program in machine language after translation from a high-level language by use of a compiler.



      • In many computer installations, the most common form of terminal is the visual display unit (VDU). State and explain key features of a VDU terminal. (8 marks)


      • Computerized accounting/financial systems still need internal controls to enhance the integrity of such systems. Explain four internal control procedures that need to be put in place to guarantee the integrity of such systems.(8 marks)
      • Explain the following database security features:

      Authorization    (2 marks)

    • Authentication       (2 marks)

      (Total: 20 marks)



      •  Key features of a VDU terminal:
      • The VDU is really 2 devices: A keyboard and a screen display. The keyboard is for data input while the screen display is for output of data.
      • Data is fed in via a keyboard which is like a typewriter keyboard, and is both passed into the computer and displayed on the screen. The VDU can also receive and display messages from

      the computer.

      • VDUs are mainly used by connecting them directly to the computer. This mode is known as on-line data entry.
      • VDUs lack the processing capabilities of PCs and thus they are referred to as
      • VDUs were used in the past in conjunction with some other special purpose data entry system in order to prepare data on a fast and reliable input medium. The most popular example was the key-to-floppy-disk or key-to-diskette system. These were basically

      microcomputer-based systems that took in data from the VDU and stored it on floppy disk.

      1. When the VDU is used to provide a graphics display capacity e.g. for IFORMATION COMMUNICATION TECHNOLOGY applications, some or all of the following control devices may be incorporated in addition to the high-definition colour monitor: o Mouse or trackball devices


      These use the rolling motion of a ball (a mouse by being rolled on a flat surface, a trackball by being moved manually) to act as a cursor control or to move data about the screen quickly.

      • Voice Data Entry (VDE)

      These employ a modified VDU and microphone to accept vocal input. The simplestspeech recognition systems may be programmed to recognize a limited number of key words.

      • Light pen and touch screen inputs

      These use the VDU screen as part of the input medium. A light pen connected to the terminal is placed against the screen, and a light sensitive device recognizes the position by X and Y coordinates. A touch screen uses an inlaid screen to accept input through the act of physically touching the screen.


      • Internal control procedures:
        • Manual recalculations– a sample of transactions may be recalculated manually to ensurethat processing is accomplishing the anticipated task.
        • Editing– an edit check is a program instruction or a subroutine that tests for accurate,complete and valid input and updates in an application.
        • Programmed controls– software can be used to detect and initiate corrective action forerrors in data and processing. For example, if the incorrect file or file version is provided for processing, the application program could display messages instructing that the proper

      file and version be used.

      • Exception reporting– an exception report is generated by a program that identifiestransactions or data that appear to be incorrect. These items may be outside a

      predetermined range or may not conform to specified criteria.

      • Sequence checking on data inputs– any control number out of sequence or duplicatedare rejected or noted on an exception report for follow-up purposes.
      • Range checking on data inputs-this ensures that data is entered correctly and agrees withvalid predetermined criteria. For example, a valid transaction code must be entered in

      the transaction field.

      • Key verification on data inputs– the keying-in process is repeated by a separate individualusing a machine that compares original keystrokes to the repeated keyed input. For example, a worker‘s number can be keyed in twice to verify the keying process.


      •  Authorization

      It involves determining the access rights to various system resources (hardware e.g. printers, disk drives, etc or programs e.g. payroll applications, inventory applications, etc). Authorization is done by an authorization policy, which defines activities permitted or prohibited within the system. Authorization mechanisms implement the authorization policy and includes directory of access rights, access control lists (ACL) and access tickets or capabilities.



      It involves verification of the identity of the subject (Are you who you say you are? Prove it!). The most common form of authentication is the password based access control.




                  b)Differentiate between the following terms: (i.)Hardware and software; (1 mark)
      (ii.)Application software and system software; (1 mark)
      (iii.) Bit and byte;



      (1 mark)





      • RAM and ROM; (1 mark)
      • Data and information. (1 mark)
      • Describe three major factors that affect the performance of a computer operation.

      For each factor, state one example of measurement.                            (6 marks)

      • Examine the  issues  to  be  considered  when  planning for  information  systems                (4 marks)

      (Total: 20 marks)



      • Functional components of a computer system:
        • Input devicesThey enter program and data into the computer system. Examples are keyboard, mouse, bar code reader, light pen, etc
        • Central Processing Unit (CPU) This is the part of the computer that processes data. It consists of the main memory, the        control unit and the arithmetic and logic unit.
        • Main memory

      This is a temporary storage to hold programs and data during execution/processing.

      • Control unit

      This controls the execution of programs.

      • Output devicesThey display information processed by the computer system. Examples are Monitors, printer, overhead projectors, etc
      • Storage devices

      They provide permanent storage of data and programs before and after if is processed by the              computer system. Examples are hard disks, magnetic tape drives, optical disks, etc

      • Communication devices

      They enable communication with other computers. Examples are modems, multiplexors, front-end processors, etc


      software Hardware

      This refers to the physical, tangible computer equipment and devices which provide support for major functions such as input, processing (internal storage, computation and control), output, secondary storage (for data and programs), and communication. Examples are the

      monitor, keyboard, CPU, mouse, etc


      This refers to the invisible, intangible components of a computer that direct and control the operations of hardware when processing data. Examples are operating systems e.g. Windows XP, system utilities e.g. Norton antivirus, application programs e.g. Microsoft Word, etc


      • Application vs. system software Application software

      This refers to programs designed to help end users to solve particular problems using the computer or to perform specific tasks. Examples are word processors e.g. Microsoft Word,

      spreadsheets e.g. Microsoft Excel, database management software e.g. Microsoft Access, etc  System software

      This refers to programs that coordinate the activities of hardware and other programs. Examples are operating systems such as Windows XP, Linux and Unix and utilities such as disk defragmenters and antiviral programs


      • Bit vs. Byte


      This refers to a binary digit used to represent data in a digital computer. A bit may be a ―0‖ ora ―1‖.


      This refers to a combination of 8 bits used to represent characters (e.g. the letter ‗A‘) in a digital computer.


      • RAM

            ROM RAM

      This stands for Random Access Memory. Its content can be read and changed and is the working area of the user. It‘s used to hold programs and data during processing. RAM chips are volatile i.e. they loose their contents if power is disrupted.


      This stands for Read Only Memory. Its contents can be read and cannot be changed. ROM chips are non-volatile, so the contents aren‘t lost if the power is disrupted.


      • Data vs. Information


      This refers to basic facts e.g. the number of items sold by a business, the name of a customer,              a line of text or the numerical values used in mathematical formulae.


      This refers to data which has been converted into a more useful and meaningful form via processing e.g. a list of all the customers of an organization could be sorted to produce a list of customers who are in debt to the organization.


      • Factors that affect the performance of a computer operation:
      • The cycle speed

      This indicates the number of instructions that the processor can handle in a second. For example, a Pentium 4 chip with a clock speed of 2 GHz can handle upto 2 trillion instructions per second. The cycle of a computer is indicated in the system‘s properties as displayed in the operating system environment (interface).

      • The processor‟s word length

      Word length refers to the number of bits that the computer can process at one time. A 32-bit chip can process 32 bits or 4 bytes of data in a single machine cycle. The larger the word length, the greater the speed of the execution of a cycle. Word length size is implied in the name of the processor e.g. Pentium implies 32-bit processing; Itanium implies 64-bit

      processing.              3. Data bus width

      The data bus acts as a highway between the CPU, primary storage and other devices, determining how much data can be moved at one time. The larger the data bus width, the greater the system performance. Data bus width is measured in bits and it depends on the type of processing chip e.g. the 8088 chip used in the original IBM personal computer, for example,

      has a 16-bit word length but only an 8-bit data bus width.

      • RAM (Random Access Memory) size

      Since all operands (objects being manipulated in an operation e.g. numbers) are loaded into main memory prior to an operation being carried out, the larger the size of the RAM, the more operands that can be accommodated and hence the greater the performance of large


      operations. Where the operands exceed the RAM size, the operands have to be swapped (moved) into and out of memory as the operation is carried out. This results in time overheads which means lower performance. Hence, a large main memory provides a greater capability for high performance than a small main memory for complex/large operations. RAM size is measured in bytes and it‘s indicated in the computer system unit. RAM size can also be calculated by counting the number of RAM chips in the motherboard of the computer


      • d) Issues to be considered when planning for IS training:
      • The staff to be affected

      Whether the staff includes senior managers, middle managers or operational staff as determined by the type of information system in consideration. For example, for a transaction processing system, the staff to be involved in the training exercise will be

                 operational clerks and middle managers since they are the ones who handle the system.

      • Who should carry out the training?

      If an organization doesn‘t have adequate training personnel then it should consider hiring  the services of another company when planning for IS training.

      • Cost of the training

      This should be determined so as to allocate enough money to the training process to ensure success of the exercise.

      • Estimated time for the training

      This should be considered so that training is allocated adequate time. This ensures that what was meant to be learnt is learnt and that everything is understood.


      Who should be involved in a requirement review? Suggest their role in the requirement review.       (8 marks)


      • Networks are increasingly  being  managed    Name  three  security  implications of remote network management and three mechanisms that are needed  for remote network management.(6 marks)
      • Examine some of the challenges facing the convergence of networks in business

      organizations.    (6 marks)                       (Total: 20 marks)



      • Requirement          review/walkthrough:

      This refers to a planned review of a system that is carried out by people not involved in its development effort in order to examine a proposed system as formulated by the systems analyst. If there are any inconsistencies between the requirements stated by the users and those that the analyst is proposing, the review should be able to uncover such inconsistencies.


      People involved in a requirement review and their roles:

      • Chairman
        • He/she controls the overall direction of a walkthrough and ensures that its agenda isadhered to.
        • He gives approval by signing the project milestones when users are satisfied at eachdevelopment stage.
      • Author o He is the creator or designer of the system.
        • He presents and explains the materials that are being reviewed/walked through.
      • Recorder
        • He acts a secretary of the team and ensures that all agreed actions pointed out

      arenoted and followed up.

      • Reviewers o They get in advance the materials being walked through as a working model.
        • They walk through the proposed system and check whether if falls short of requiredquality.
      • User representative o He approves their (the users) understanding and satisfaction of what they will do withthe system when it becomes operational. The representatives may be senior

      managers, auditors, etc

      • Remote network management:

      This refers to the implementation of the network management functions of configuration, performance monitoring, fault isolation, accounting, security and network installation and monitoring from a distant terminal with the aid of network management software designed to carry out the functions.


      Past Paper Questions and Answers

      Configuration– involves initializing the network, enrolling new members, controlling  thetopology, keeping equipment inventories, etc

      Performance monitoring– involves monitoring throughputs, delays, detecting packet  andframe errors, etc for all layers of communication

      Fault isolation– involves detection of faulty conditions on the network, tracing of errorsources,  and general text and maintenance aids.

      Accounting– involves keeping a record of the usage of network resources for billing purposese.g. recording the usage of a shared printer by each department for the purposes of billing, recording the total time spent on a dial-up connection by each department for the

      purposes of billing, etc Security– involves access control, encryption and authentication, reporting of break-in attemptsand success.


      Security implications of remote network management:

      • Unauthorized access would have to be detected immediately and the terminal involved identified to so as to effectively control unauthorized access.
      • Data at every node would have to be secured from un-authorized modification or deletion so as to prevent destruction of data at any node in the network.
      • The security function of network management would have to be centralized on a terminal so as to simplify the administration of security.
      • All data in transit would have to be secured remotely to prevent eaves dropping.
      • A log of all accesses to the network must be maintained to enable the network manger identify instances of successful unauthorized access and employ the relevant preventive

      Security mechanisms needed for remote network management:

      • Username and password systems– to prevent unauthorized access
      • Use of audit trails. The audit trails could be maintained by the network operatingsoftware.

      Audit trails enable instances of unauthorized access to be identified thus enabling  preventive mechanisms to be put in place to stem unauthorized access in future.

      • Data encryption to prevent unauthorized access.
      • Record and file locking to prevent simultaneous update of files thus maintaining integrityof transactions.
      • Use of firewalls to prevent protect the network from external threats e.g. hackers


      Challenges facing the convergence of networks in business organizations:

      • Incompatibility of different organizational networks Organizational networks may be incompatible because of the hardware in the networks or the protocols in the networks and this may prevent the convergence of networks.
      • Security concerns

      Organizations may be reluctant to converge their networks because converging the networks would expose individual organizational networks to more security threats e.g. hackers who may

      corrupt organizational data

      • Competition amongst business organizations

      Fierce business competitors may be reluctant to converge their networks because convergence would imply sharing of data in the network which may be perceived as a threat to the

      competitive advantage of an organization with respect to its competitors.

      • Cost concerns

      Convergence of networks would imply interconnection costs which vary according to the medium used to interconnect the networks. For instance, a satellite link to the nodes in the

      network would be very expensive as compared to a phone line link.

      • Lack of uniformity in legislation across many countries

      Most countries in Africa lack well-defined data protection laws and computer crime laws in contrast to European nations that have well defined laws put in place (e.g. The Data protection act of England). It‘s clear that convergence of networks across such states may bring about problems since what may pass as law in one country may not pass as law in another country. Perpetrators of computer crime may take advantage of this opportunity.

      • Poor telecommunications infrastructureThis hinders the establishment of links between organizational networks thus posing a challenge to the convergence of networks
        • Briefly describe the following two elements of software quality and explain how each element can be measured:
          • Functional correctness of the software. (4 marks)
          • Reliability of the software.(4 marks)
        • Give four examples of industries and business organizations that are currently using computer networking. (4 marks) c)   Human intelligence can be defined as a person‘s ability to solve problems, utilize logic and  think

        Discuss  the  major  differences  between  human  intelligence  and artificial intelligence.      (6 marks) d)   Examine two disadvantages of using direct access storage devices.(2 marks)

        (Total: 20 marks) 



        • a) (i) Functional correctness of software

        This refers to the extent to which a program satisfies its specification and fulfills the user‘s mission objectives. Functional correctness of software can be measured by performing a structured walkthrough (Specifically a program review) which establishes whether a program satisfies its specification. The functional correctness of a program can thus be determined from the number of issues raised during the structured walkthrough. Functional correctness of software may also be measured by performing black box testing. The number of errors discovered during the testing exercise would thus indicate the functional correctness of the software.


        (ii) Reliability of the software

        This refers to the extent to which a program can be expected to perform its intended function with required precision. Reliability could be measured by software quality metrics (software quality measurement techniques) such as the rate of failure of occurrence (ROCOF) which is a measure of the occurrence with which an expected behaviour is likely to occur. Another metric i.e. the mean time to failure (MTTF), which is a measure of the time between  observed system failures, may also be used.

        • Examples of industries and business organizations that currently use computer networking:
          • Nation media group which has an Internet website which it uses to advertise and also tosell online subscriptions to its newspaper, the Daily Nation.
          • Safaricom ltd which uses its Internet website to advertise its mobile telephony services andalso to provide customer care services to its subscribers.
          • Intel Company which    uses      the        concept             of         peer-to-peer         networking

        (networkingarchitecture that gives equal power to all computers on the network. Its used primarily in small networks) to speed up design of its Intel chips by enabling designers to

        share chip designs.

        • Glaxo SmithKline which uses peer-to-peer networks from Groove Networks Inc to helpits researchers create a worldwide collaborative network with scientists from

        universities and biotechnology companies.

        •  which uses the Internet and intranet for advertising courses andfor providing registration to programmes offered.


        • Major differences between human intelligence and artificial intelligence:

        Artificial intelligence

        This refers to the effort to develop computer-based systems (both hardware and software) that behave as humans. They‘re used to make decisions that would otherwise have been done by humans.


        Major differences:

        • Common sense and generality

        Human intelligence is characterized by an ability to develop associations and to use metaphors and analogies such as like and as. Using metaphors and analogy, humans can create new rules, apply old rules to new situations and at times act intuitively and/or instinctively without rules.

        Artificial intelligence on the other hand, cannot develop associations and use metaphors and  analogies. It acts purely on facts and information supplied to it.

        • Ability to impose a conceptual apparatus on the surrounding world

        Metaconcepts such as cause -and-effect and time, and concepts of lower order such as breakfast, dinner, and lunch, are all imposed by human beings on the world around them. Thinking in terms of these concepts and acting on them are central characteristics of intelligent human behaviour. On the part of computers, they cannot create and impose such metaconcepts in their logic and thus have to rely on the ones created by humans.


        • Ability to develop new and novel solutions to problems

        Successful artificial intelligence systems are based on human expertise, reasoning and selected reasoning patterns. They are thus rigid in their decision-making since their knowledge base is static (finite rules and finite information). Human intelligence on the other hand, is dynamic in decision making due to common sense and generality and can thus formulate new and novel solutions to problems presented to it.


        • Disadvantages of direct access storage devices:
          • Expensive

        The cost of devices such as hard disks which are online media and mandatory in almost every computer system is high and further varies according to the storage space required. RAM chips are also very expensive which is one of the limiting factors in the RAM size of today‘s

        computers.              2. Easily damaged

        Magnetic disks and optical disks are usually very sensitive to handling and are thus easily damaged. For instance, magnetic disks are sensitive to dust, heat and strong magnetic fields which can result in data loss in the disk due to disk damage.


        • Describe any three features of information needed for strategic planning.          (6 marks)
        • What risks do you see in using information communications technology (ICT) as a strategic resource and what actions should be taken to make ICT a viable strategic

        resource? (6 marks)

        • Electronic point of sale (EPOS) and Automatic Teller Machines (ATMs) are the

        dominant terminals currently being used in business.

        Briefly explain three summary reports that are likely to be generated by each terminal. (6              marks)

        • Differentiate between logical file structure and physical file structure. (2 marks) (Total: 20 marks)QUESTION SEVEN 
          • Features of information needed for strategic planning: Information has a greater orientation to external data

          Strategic plans are concerned primarily with positioning the organization in the optimum position in the environment to meet targets and objectives, while allowing the organization to develop dynamically in response to changes in that environment. This information required for

          strategic plans tends to come from a higher proportion of externally generated data.

          • Information is usually presented in a highly summarized form in the form of graphs, charts and tables.
          • The information covers all aspects of the organizatione. it encompasses all the departments of the organization.
          • The information relates to medium to long-term (months to years).
          • The information has high levels of uncertainty since the focusing is on a long-term.
          • The accuracy (in the sense of paying attention to little details) of the information isless critical to decisions at this level.
          • The data incorporates higher proportion of subjective valuations.
          • The performance      focus    of         the        information       is          on             predictive         rather   than historicalperformance.


          • Information Communication Technology This refers to the use of computers, telecommunications equipment and other technologies associated with automation for the transmission of information.


          Risks in using ICT as a strategic resource:

          • Change– ICT is vulnerable to change which may compromise its relevance to anorganization. For example, production of higher versions of software product may render earlier versions obsolete as is the case with Windows 95 after the release of the versions

          Windows 98, Windows 2000 and Windows XP which provide more advanced networking  and security features.

          • Over expenditure on hardware, software, installation of networks, personnel, etc. Anorganization could find itself spending freely on hardware, software, installation of networks and personnel in cases where no proper budgeting is made before initiating an ICT project..
          • Poor selection of ICT resources that are needed to meet the competitive strategies of anorganization. Poorly selected resources results in wastage of organizational funds. It may also result in failure of the organization to meet its strategic objectives since the poorly selected resources may only partially meet the strategic objectives of an organization.


          • Security issues– using ICT as a strategic resource would mean that there would have to beadequate security mechanisms to prevent hardware resources from sabotage, theft and

          misuse. Data must also be protected from corruption or unauthorized access.  Actions that need to be taken:

          • Change management approach– an organization should strive to keep up with changesin the ICT sector to avoid being left behind. This requires constant market research and

          periodic appraisal of its systems.

          • Adequate budgeting procedures should be put in place to ensure that only necessaryresources (hardware, software, personnel) are acquired by an organization.
          • To avoid the risk of poor selection of resources, management should seek adequate consultation from the IT manager of a company or from an IT consultancy firm.
          • To counter the security risks in using ICT, adequate security mechanisms such as usernames and passwords, data encryption, physical security measures such as electronic

           door locks and mechanical door locks used to be put in place.  c) Summary reports generated by EPOS:

          • A summary report of all the goods purchased at the terminals. This may be done afterreferencing the terminal‘s database.
          • A summary report of the total units of each type of good sold. This may be producedafter a detailed search through the database during which the item codes for each

                   type of good are identified and the sales related to each item tallied.

          • A summary report of the remaining stock The EPOS automatically updates its database after every purchase is made therefore at any one time, one may produce a summary report detailing the remaining stock in the stores.

          Summary report generated by ATM:

          • A summary report of the actual and available cash balance of an account holder After the account holder authenticates himself on the ATM and requests a balance slip, the system runs a query to find out the actual balance of the account holder and deducts the minimum cash balance allowed for specific account type to arrive at the available cash


          • A cash receipt for payment of utilities e.g. water, electricity, etc. This is generatedimmediately after payment has been made.
          • A foreign currency withdrawal slip.

          This is generated after foreign currency has been withdrawn. It indicates the amount withdrawn and the remaining actual and available balance.



          • In modern economies, the volume of trade transacted by enterprises over the internet is rapidly increasing that transacted through the traditional channels.


          Discuss how any two traditional functions of doing business have moved to the internet and the benefits this movement has brought to enterprises. (10 marks)


          • Most governments are embracing information communication technology through the implementation of e-governance initiatives.


          Describe what is meant by e-governance and give four areas in which e-governance is beneficial to the public.



          • Functions that have moved to the Internet:


          Most businesses today in addition to selling their goods through traditional channels also sell their goods through the Internet. Purchase of goods is by use of credit cards. Consumers are increasingly adopting this mode of purchase of goods because it‘s very convenient to them. The

          consumers can purchase the goods and services at any time at the convenience of their homes.  Benefits to enterprises:

          • Globalization

          A company based in only one continent is able to reach consumers in all the other continents through this approach. Thus, the customer base is increased with this approach.

          • Virtual businesses

          Organizations that totally adopt this approach do not have to set up premises for the purposes of sales. They only need a warehouse to store their stock. Thus, this approach is beneficial

          because it lowers premises costs.

          • Reduced sales personnel With this approach organizations can reduce the sales personnel since part of the sales are through the Internet. Thus, they are able to cut labour costs. Marketing


          Most businesses today are also marketing their goods and services through the Internet. The marketing of these products and services need not be necessarily through a company‘s

          corporate website. It could be through search engines via sponsored links.


          • Large consumer reach

          This approach is capable of reaching customers in all parts of the world.

          • Easy to target specified groups/categories of customers A company could advertise in sports sites, health sites, music sites and news sites to enable it target a specific clientele.
          • Personalized marketing

          A company could personalize its marketing strategy by targeting each individual consumer through e-mail. This has the effect of improving the effectiveness of the marketing since it makes customers feel that they are important to an organization.


          • E -governance

          This refers to the application of electronic means in the interaction between government and citizens and governments and businesses, as well as in internal government operations to

          simplify and improve democratic government and business aspects of governance.Areas where e-governance is beneficial to the public:

          • Online license applications/renewals.
          • Online renewal of car tags, vehicle registration.
          • Payment of property taxes online.
          • Payment of utility bills online.
          • Registering and voting online.
          • Downloading of forms on websites e.g. passport application
          • Submitting forms online e.g. ID application
          • Online help with filling forms (permits, birth/death certificates)
          • Discussion groups on websites that facilitate democratic exchange of ideas.
          • Online polls and questionnaires.
          • Online notification of citizens. 12. Online versions of laws, rules and regulations


      Describe the functional components of a typical computer system. (5 marks Hardware vs.


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