MANAGEMENT INFORMATION

SYSTEMS

PART II

CPA Section 4

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CCP Section 4

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CS Section 4

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STUDY TEXT

KASNEB JULY 2018 SYLLABUS

Revised on: January 2019
 MANAGEMENT INFORMATION SYSTEM

KASNEB SYLLABUS

GENERAL OBJECTIVE
This paper is intended to equip the candidate with knowledge, skills and attitudes that will
enable him/her to apply information systems effectively in solving business problems and
decision making.

LEARNING OUTCOMES
A candidate who passes this paper should be able to:
 Investigate on existing technologies about software and hardware to solve problems
 Display proficiency in decision making using contemporary Information systems tools
 Apply the principles of information systems development
 Use various information systems in an organisation
 Apply the knowledge of information systems for competitive advantage
 Use data communication networks, the Internet and e-commerce in optimising business
opportunities
 Implement information systems’ governance and risk management principles in
business
 Implement information systems legal, ethical and social issues.

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CONTENT

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1. Introduction to information communication technology (ICT)

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- Overview of ICT

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- Introduction to computer systems

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- Computer hardware

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- Computer software

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- Programming languages and tools
- Information systems personnel and hierarchy
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- Role of ICT in business environments

- Information centres
- Impact of ICT in business

2. ICT governance
- Corporate governance and ICT governance
- Policies and procedures
- ICT management practices
- Monitoring of controls and risks
- Impact on ICT compliance with professional standards and codes

3. Systems development
- General systems theory
- Role of management in systems development
- Systems development approaches
- Systems development life cycle (SDLC)
- Rapid applications development (RAD)
- Systems development constraints

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 MANAGEMENT INFORMATION SYSTEM

4. Information systems in an enterprise

- Overview of information systems
- Components of an information system
- Types and characteristics of information systems
- Systems in a functional perspective
- Enterprise applications and the business process integration
- Management information systems resources

5. Enterprise Data Management

- Nature and types of information
- Attributes of information
- Files and file structure
- File organisation methods
- Database management systems
- Characteristics, importance and limitations of database systems
- Data warehousing
- Transaction processing phases in business systems
- File processing modes
- Role of data professionals in an organisation
- Business Intelligence and analytics

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6. Data communication and computer networks

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- Principles of data communication and computer networks

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- Data communication devices

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- Data transmission characteristics

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- Types of networks

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- Network topologies

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- Network/internet architecture protocols
- Benefits and challenges of networks in an organisation
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- Limitations of networks in an organisation

- Network security
- Cloud computing concepts, features and models
- Internet of things (IoT)

7. e-Commerce
- e-commerce concepts and features
- Models of e-commerce
- Impact of the internet on business
- E-commerce enabling software
- Business opportunities in e-commerce
- E-commerce infrastructure and platforms
- E-commerce payments methods
- Challenges of e-commerce
- Securing e-commerce transactions
- M-commerce and applications
- Digital marketing methods

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8. Information systems strategy

- Overview of business strategy hierarchy
- The strategic process and information systems planning
- Development of information systems strategy
- Aligning information systems to the organisation’s corporate strategy
- Managing information systems strategy
- Information systems for competitive advantage
- Measuring organisational information systems performance
- Business process reengineering

9. Information systems risk and security management

- Risk management overview
- Risk assessment and analysis methodologies
- Controls and countermeasures
- Risk monitoring and communication
- Disaster recovery and business continuity planning
- Information systems security management

10. Legal, ethical and social issues in management information systems

- Management information systems ethical and social concerns

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- The moral dimension of management information systems

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- The legal issues in management information systems

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11. Emerging issues and trends

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TABLE OF CONTENTS PAGE

Topic 1: Introduction to information communication technology(ICT)…………..………...6

Topic 2: ICT governance……………………………………………………………….…...54
Topic 3: Systems development………………………………………………… .………….60
Topic 4: Information systems in an enterprise……………………………………….…......92
Topic 5: Enterprise data Management…...………………………………………..……..….114
Topic 6: Data communication and computer networks…………..........................................136
Topic 7: E-commerce……………………………………………………..………...….…...170
Topic 8: Information systems strategy………………………………………………..….…190
Topic 9: Information systems risk and security management…….…………………….…..259
Topic 10: Legal, ethical and social issues in management information system……...…..…310
Topic 11: Emerging issues and trends…………………………………...…………………..326

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TOPIC 1

INTRODUCTION TO INFORMATION COMMUNICATION

TECHNOLOGY
OVERVIEW OF ICT

Information technology (IT)is a technology which uses computers to gather, process, store,
protect, and transfer information. Today, it is common to use the term Information and
communications technology (ICT)because it is unimaginable to work on a computer
which is not connected to the network.

Key terms used in ICT

 Computer - It may be defined as a device that works under the control of stored programs
 automatically accept, store and process data to produce information that is the result of that
processing.
 Input devices - Enters programs and data into a computer system

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 Central Processing Unit (CPU) - This is the part of the computer that processes data.

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 Output devices - They display information processed by the computer system.

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 Hardware - Refers to the physical, tangible computer equipment and devices

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 Software - This is a detailed step-by-step sequence of instructions known as programs

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which guide computer hardware

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 Multiprogramming - Multiprogramming is a rudimentary form of parallel processing in

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which several programs are run at the same time on a uniprocessor. Since there is only one
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processor, there can be no true simultaneous execution of different programs. Instead, the
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operating system executes part of one program, then part of another, and so on. To the user
it appears that all programs are executing at the same time.
 Multiprocessing - Multiprocessing is the coordinated (simultaneous execution) processing
of programs by more than one computer processor. Multiprocessing is a general term that
can mean the dynamic assignment of a program to one of two or more computers working
in tandem or can involve multiple computers working on the same program at the same
time (in parallel).
 Multitasking - In a computer operating system, multitasking is allowing a user to perform
more than one computer task (such as the operation of an application program) at a time.
The operating system is able to keep track of where you are in these tasks and switch from
one task to the other without losing information. Microsoft Windows XP, Vista , IBM’s
OS/390, and Linux. are examples of operating systems that can do multitasking (almost all
of today’s operating systems can). When you open your Web browser and then open word
at the same time, you are causing the operating system to do multitasking.
 Multithreading - It is easy to confuse multithreading with multitasking or
multiprogramming, which are somewhat different ideas. Multithreading is the ability of a
program or an operating system process to manage its use by more than one user at a time
and to even manage multiple requests by the same user without having to have multiple
copies of the programming running in the computer
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INTRODUCTION TO COMPUTER SYSTEMS

What is a computer?
A computer is an information-processing machine. It may also be defined as a device that
works
under the control of stored programs that automatically accept, store and process data to
produce information that is the result of that processing.
The forms of information processed include:

 Data – e.g. invoices, sales ledger, purchase ledger, payroll, stock controls, etc.
 Text – widely available in many offices with microcomputers
 Graphics – e.g. business graphs, symbols
 Images – e.g. pictures
 Voice – e.g. telephone
 Processing includes creating, manipulating, storing, accessing and transmitting of data.

Why use computers?

Use of computers has become a necessity in many fields. Computers have revolutionized the
way businesses are conducted. This is due to the advantages that computer systems offer over
manual systems.

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The advantages include:

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 Speed – Computers have higher processing speeds than other means of processing,

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measured as number of instructions executed per second.

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 Accuracy – Computers are not prone to errors. So long as the programs are correct, they
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will always give correct output. Computers are designed in such a way that many of the
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inaccuracies, which could arise due to the malfunctioning of the equipment are detected
and their consequences avoided in a way that is completely transparent to the user.
 Consistency – Given the same data and the same instructions, computers will produce
exactly the same answer every time that particular process is repeated.
 Reliability – Computer systems are built with fault tolerance features, meaning that
failure of one of the components does not necessarily lead to failure of the whole
system.
 Memory capability – A computer has the ability to store and access large volumes of
data.
 Processing capability – A computer has the ability to execute millions of instructions
per second.
 Storage – Computers occupy less storage space compared to manual records.

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COMPUTER APPLICATION AREAS

Some of the areas that computers are used include:

• Communication – digital communication using computers is popular and is being

adopted worldwide as opposed to analogue communication using the telephony system.
Computers have also enhanced communication through email communication,
electronic data interchange, electronic funds transfer, Internet etc.
• Banking – the banking sector has incorporated computer systems in such areas as credit
analysis, fund transfers, customer relations, automated teller machines, home banking,
and online banking.
• Organizational management – the proliferation of management information systems
have aided greatly the processes of managerial planning, controlling, directing as well
as decision-making. Computers are used in organizations for transaction processing,
managerial control as well as decision-support. Other specific areas where computer
systems have been incorporated include sales and marketing, accounting, customer
service, etc.
• Science, research and engineering – Computers are used: as research tools and in
carrying out complex computations for simulation e.g. outer-space simulations, flight
simulations as diagnostic and monitoring tools. for computerized maps using global

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positioning satellite (GPS) technology for modern mass production methods in the auto

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industry using computer driven technology.

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• Education – computers incorporate databases of information that are useful in

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organizing and disseminating educational resources. Such e-learning and virtual or

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distributed classrooms have enabled the teaching industry to have a global reach to

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students. Computers are also used for marking uniform tests done in schools, school

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administration and computer aided instructions.

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• Management of information material - The Internet has massive reference material
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on virtually every learning area. Computer systems have enabled the efficient
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administration of library materials for information storage and retrieval.

• Manufacturing and production – computer aided design (CAD), computer integrated
manufacturing (CIM), process control systems among other technologies are among
computer systems that have revolutionized the production industry. CAD and CIM are
generic terms applied to the development and design of systems to support design work
and to control manufacturing operations.
• Entertainment – use of computers in the entertainment industry has increased
tremendously over the years. Computers enable high-quality storage of motion pictures
and music files using high-speed and efficient digital storage devices such as CDs,
VCDs and DVDs. The Internet is also a great source of entertainment resources.
Computer games have also become a major source of entertainment.
• Retailing – computers are used in point of sale systems and credit card payment
systems as well as stock inventories.
• Home appliances – computers (especially embedded computers or microprocessors)
are included in household items for reasons of economy and efficiency of such items.
Major appliances such as microwave ovens, clothes washers, refrigerators and sewing
machines are making regular use of microprocessors.

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• Reservation systems – guest booking, accommodation and bills accounting using

computers in hotels have made the process to be more efficient and faster. Airline
computer reservation systems have also enhanced and streamlined air travel across
major airlines. Major players in the industry have also adopted online reservation
systems.
• Health care and medicine – computers have played such an important role in the
growth and improvement of health care that the use of computers in medicine has
become a medical specialty in itself. Computers are used in such areas as maintenance
of patient records, medical insurance systems, medical diagnosis and patient
monitoring.

HISTORY OF COMPUTERS
The first electronic computers were produced in the 1940s. Since then, many breakthroughs in
electronics have occurred leading to great improvements in the capacity, processing speed and
quality of computer resources. The evolution of computerization in business may be
summarized .
• 1870s: Development of the typewriter allows speedier communication and less copying.
• 1920s: Invention of the telephone enables both Wide Area Networks (WAN) and Local
Area Networks (LAN) communication in real time. This marks the beginning of

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• 1930s: Use of scientific management is made available to analyze and rationalize data.

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• 1940s: Mathematical techniques developed in World War II (operations research) are

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• 1950s: Introduction of copying facilitates cheap and faster document production, and

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the (limited) introduction of Electronic Data Processing (EDP) speeds up large scale

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transaction processing.

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• 1960s: Emergence of Management Information Systems (MIS) provides background
within which office automation can develop.
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• 1970s: Setting up of telecommunication networks to allow for distant communication

between computer systems. There is widespread use of word processors in text editing
and formatting, advancement in personal computing - emergence of PCs. Use of
spreadsheets.
• 1980s: Development of office automation technologies that combine data, text, graphics
and voice. Development of DSS, EIS and widespread use of personal productivity
software.
• 1990s: Advanced groupware; integrated packages, combining most of the office work
clerical, operational as well as management.
• 2000s: Wide spread use of Internet and related technology in many spheres of
organizations including electronic commerce (e-commerce), e-learning, and e-health

Landmark Inventions
 ~500 B.C. - counting table with beads
 ~1150 in China - ABACUS - beads on wires
 1642 Adding machine - Pascal
 1822 Difference machine/Analytic Engine - design by Babbage
 1890 Holerith punched card machine - for U.S. census

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