Management, Information Systems and Computers Other Macmillan books of related interest J. Harvey, Modern Economics, 4th edition A. Hindmarch, Accounting - An Introduction D. Longley and M. Shain, Dictionary of Information Technology J.D. Radford and D. B. Richardson, Management of Manufacturing Systems Management, Information Systems and Computers An Introduction Roy Anderson Management Consultant, and Head of the Department of Computing and Cybernetics Brighton Polytechnic M MACMILLAN © Roy Anderson 1986 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No paragraph of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright Act 1956 (as amended). Any person who does any unauthorised act in relation to this publication may be liable to criminal prosecution and civil claims for damages. First published 1986 Published by MACMILLAN EDUCATION LTD Houndmills, Basingstoke, Hampshire RG21 2XS and London Companies and representatives throughout the world Photoset in Times by CAS Typesetters, Southampton British Library Cataloguing in Publication Data Anderson, Roy Management, information systems and computers: an introduction. 1. Management information systems 2. Business -Data processing I. Title 658.4' 038' 0285 T58.6 ISBN 978-0-333-39853-1 ISBN 978-1-349-18419-4 (eBook) DOI 10.1007/978-1-349-18419-4 Cover photograph supplied by Digital Equipment Corporation. Contents Preface viii 1 Economic Background 1 The Meaning of Work 1 Business: Organised Productive Human Activity 4 Check List 1 7 2 Objectives 9 Business Purpose 9 Overall Objectives 11 Objectives in Practice 17 Financial Objectives 19 Quantitative Objectives 23 Personal Objectives 25 Determination of Objectives 26 Check List 2 28 3 Management and Decisions 30 Functions of Management 30 Strategic Decisions 34 Tactical Decisions 35 Decision Processes 37 Check List 3 38 4 Organisation 40 Organisational Theory 40 Management and Control 43 Types of Business 51 Organisation and the Impact of Business Activity 59 Check List 4 61 5 Management Information 63 The Business Problem 63 Business Information 65 v vi Contents Data and Information 71 Financial Accounting 73 Management Accounting 80 Quantitative Information 88 Management Reports 90 Check List 5 91 6 Systems 94 System Theory 94 Types of Business Information System 100 Interaction of Business Systems 105 System Content 106 Check List 6 111 7 Changing Systems 113 System Design Factors 113 Planning Effective Systems 122 Business Efficiency 124 Effective Use of Labour 125 Attitudes to Change 129 Consequences of System Change 131 Check List 7 132 8 Information Machines 134 The Information Industry 134 Information Technology 136 The Man-Machine Interface 141 Check List 8 142 9 Evolution of Information Technology 144 Origin of Computers 144 Landmarks of Computer Technology 151 'Convergence' of Information Technologies 164 Check List 9 166 10 Computer System Concepts 168 Language of Computing 168 Modes of Use of Computers 171 Check List 10 192 11 Computers in Business 193 Distributed Data Processing (Case A) 193 Process Control (Case A) 196 On-line Data Processing (Case B) 197 Embedded Systems (Case B) 198 Contents vii Real-time Data Processing (Case C) 199 Point-of-sale System (Case D) 203 Communication System (Case E) 205 Dedicated System (Case F) 206 Monitoring and Control (Case G) 208 Information Retrieval (Case G) 210 Computer-aided Design-Personal Microsystem (Case H) 211 IKBS-Personal Microsystem (Case I) 212 Portable Microsystem (Case J) 212 Influences on the Use of Computers 213 Check List 11 217 12 Organisation of Computing 219 Computer Installations 219 Organisation of IT Functions 223 The Information Technology Industry 231 Check List 12 236 13 Economics of Computer-Based Systems 238 Reasons for Introducing Computer Technology 238 Elements of Cost 242 Assessment of Costs and Benefits 245 System Failure 247 Check List 13 249 14 System Development 250 IT Development Strategy 250 System Planning in Theory 253 Systems Analysis and Design 258 System Planning in Practice 260 Check List 14 266 Index 269 Preface The title of this book invites attention to the three principal subject areas with which it is concerned: Business Management, Information Systems, and the application of Computers to them. It is also about Economics, System Theory, Information Technology, and Systems Analysis and Design. It does not purport to provide comprehensive coverage of any of these subjects, but is offered as a useful introduction for anyone intending to pursue studies which require some understanding of the uses of computers. In doing so, the objective is to fill a gap in the available reading material by bringing together study topics which are usually presented separately, so as to provide a coherent explanation of the relationship between economic principles, the organisation and management of business undertakings, the importance of information to effective business management, and the vital role of computers and informa tion technology in the provision and use of that information. The book begins with an outline of relevant economic and system theory, identifying links between business objectives, the functions of management and decision-making necessary to pursue those objectives, the need for information to aid those decisions and for systems to provide the information required. The following chapters contain an examination of the nature of business systems, of the concepts of efficiency and productivity in the use of human and material resources, and of the paths open towards improvement of information systems and better use of those resources. This leads to a survey of the historical and potential growth in the use of machines for business systems, with illustrations of the range of application of computer-based information systems. The final chapters provide an explanation of some of the practical aspects of computer systems, with some consideration of organisation, economics and planning of such systems. The book is aimed at four kinds of reader 1. At first-year students taking degree and higher diploma courses in Computer Studies, Information Technology, Systems Analysis and associ ated subjects. All these students need to complement and precede their specialist studies with some understanding of the purposes and practicalities of computer-based information systems. 2. At other students undertaking vocational courses at Higher Education viii Preface ix Institutions which require some basic understanding of business subjects and computers. It is believed that there are now very few professions and occupations which do not require some understanding of these subjects, and few courses of study which do not need to find a place for such a general introduction as is attempted here. 3. At trainee supervisors, managers and analysts who may be attending shorter courses of study as part of their training within employment, to complement reading on more detailed aspects of management and system studies. 4. At general readers seeking a better understanding of business organisation and systems and of the place of computers in the production of business information. The reader is not expected to have any previous knowledge of the subject matter, which is presented with as little use of academic theory or educational jargon as possible. Some consideration of theory is unavoidable in examining system concepts, just as jargon is an inescapable feature of computer topics, but wherever any novel terminology appears to be necessary it is accompanied by a brief explanation in the text. This intention to give a practical and realistic view is not only a reflection of experience over three decades of rapid change in management techniques and information technology but also results from a view that the starting point for any study of computers should be rooted firmly in the real world. Managers who see their profession only as an exercise of personal skills, programmers and software engineers who see theirs as an abstract science, and system designers who seek only to refine their technical expertise will not be adequately equipped to meet the demands of their employment. This book cannot be sufficient in itself to tum students into trained managers, software engineers or systems analysts but it is believed that it can help to set them on the right path. One assumption is made about the reader: that he or she does have a reasonable standard of numeracy and literacy, sufficient for a ready under standing of new concepts and arguments. Although we cannot always take these things for granted at the level of higher education, they are essential for those wishing to achieve their full potential in any employment, and certainly for anyone concerned with management, information systems or computers. Acknowledgements My thanks to my friend Stephen Fall for his professional advice and to my wife, Anne, for her invaluable help in the preparation of the text. November 1985 Roy Anderson