Information Technology and

Systems
Lecture 12

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Role of knowledgeable or Skill work force

• Mckinsey
• Accenture
• KPMG
• Hotel Oberoi
• Google

2
Building Organizational and Management
Capital: Collaboration, Communities of
Practice, and Office Environments
• Developing new organizational roles and
responsibilities for the acquisition of knowledge
• Chief knowledge officer executives
• Dedicated staff / knowledge managers
• Communities of practice (COPs)
– Informal social networks of professionals and employees
– Activities include education, online newsletters, sharing
knowledge
– Reduce learning curves of new employees

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Types of Knowledge Management
Systems
• Enterprise-wide knowledge management systems
– General-purpose firm-wide efforts to collect, store, distribute, and
apply digital content and knowledge

• Knowledge work systems (KWS)

– Specialized systems built for engineers, scientists, other
knowledge workers charged with discovering and creating new
knowledge

• Intelligent techniques
– Diverse group of techniques such as data mining used for
various goals: discovering knowledge, distilling knowledge,
discovering optimal solutions

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Major Types of Knowledge Management
Systems

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What Types of Systems Are Used for
Enterprise-Wide Knowledge Management?

• Three major types of knowledge in an

enterprise
– Structured documents
 Reports, presentations
 Formal rules
– Semistructured documents
 E-mails, videos
– Unstructured, tacit knowledge

• 80% of an organization’s business content is

semistructured or unstructured

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Enterprise Content Management Systems

• Help capture, store, retrieve, distribute,

preserve documents and semistructured
knowledge
• Bring in external sources
– News feeds, research

• Tools for communication and collaboration

– Blogs, wikis, and so on

• Key problem: developing taxonomy

• Digital asset management systems
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An Enterprise Content Management
System

An enterprise content management system has

capabilities for classifying, organizing, and
managing structured and semistructured
knowledge and making it available throughout
the enterprise.
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Locating and Sharing Expertise

• Provide online directory of corporate experts in well-

defined knowledge domains
• Search tools enable employees to find appropriate
expert in a company
• Social networking and social business tools for finding
knowledge outside the firm
– Saving
– Tagging
– Sharing web pages

9
Learning Management Systems (LMS)

• Provide tools for management, delivery, tracking, and

assessment of employee learning and training
• Support multiple modes of learning
– CD-ROM, web-based classes, online forums, and so on

• Automates selection and administration of courses

• Assembles and delivers learning content
• Measures learning effectiveness
• Massively open online courses (MOOCs)
– Web course open to large numbers of participants

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Knowledge Workers and Knowledge
Work
• Knowledge workers
– Consultatnts, Researchers, designers, architects, scientists,
engineers who create knowledge for the organization
– Three key roles
 Keeping organization current in knowledge
 Serving as internal consultants regarding their areas of expertise
 Acting as change agents, evaluating, initiating, and promoting change
projects

• Knowledge work systems

– Systems for knowledge workers to help create new
knowledge and integrate that knowledge into business

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Requirements of Knowledge Work
Systems
• Sufficient computing power for graphics, complex
calculations
• Powerful graphics and analytical tools
• Communications and document management
• Access to external databases
• User-friendly interfaces
• Optimized for tasks to be performed (design
engineering, financial analysis)

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Requirements of Knowledge Work
Systems

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Examples of Knowledge Work Systems

• CAD (computer-aided design)

– Creation of engineering or architectural designs
– 3D printing

• Virtual reality systems

– Simulate real-life environments
– 3D medical modeling for surgeons
– Augmented reality (AR) systems
– Virtual Reality Modeling Language (VRML)

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What Are the Business Benefits of Using
Intelligent Techniques for Knowledge
Management?
• Intelligent techniques: Used to capture
individual and collective knowledge and to
extend knowledge base
– To capture tacit knowledge: Expert systems, case-based
reasoning, fuzzy logic
– Knowledge discovery: Neural networks and data mining
– Generating solutions to complex problems: Genetic
algorithms
– Automating tasks: Intelligent agents

• Artificial intelligence (AI) technology:

– Computer-based systems that emulate human behavior

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Capturing Knowledge: Expert Systems (1
of 2)
• Capture tacit knowledge in very specific and limited domain of
human expertise
• Capture knowledge as set of rules
• Typically perform limited tasks
– Diagnosing malfunctioning machine
– Determining whether to grant credit for loan

• Used for discrete, highly structured decision making

• Knowledge base: Set of hundreds or thousands of rules
• Inference engine: Strategy used to search knowledge base
– Forward chaining
– Backward chaining

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Rules in an Expert System An expert system contains a
number of rules to be
followed. The rules
illustrated are for simple
credit-granting expert
systems.

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Inference Engines in Expert Systems

An inference engine works by searching through the rules

and “firing” those rules that are triggered by facts gathered
and entered by the user.

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Capturing Knowledge: Expert Systems (2
of 2)
• Successful expert systems
– Con-Way (motor carrier company) Transportation’s system to
automate and optimize planning of overnight shipment routes

• Most expert systems deal with problems of

classification
– Have relatively few alternative outcomes
– Possible outcomes are known in advance

• Many expert systems require large, lengthy, and

expensive development and maintenance efforts
– Hiring or training more experts may be less expensive

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Organizational Intelligence: Case-Based
Reasoning
• Descriptions of past experiences of human specialists
(cases), stored in knowledge base
• System searches for cases with characteristics similar to
new one and applies solutions of old case to new case
• Successful and unsuccessful applications are grouped with
case
• Stores organizational intelligence
• CBR found in:
– Medical diagnostic systems
– Customer support

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How Case-Based Reasoning Works

Case-based reasoning
represents knowledge as
a database of past cases
and their solutions. The
system uses a six-step
process to generate
solutions to new
problems encountered by
the user.

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Fuzzy Logic Systems

• Rule-based technology that represents imprecision

used in linguistic categories (e.g., “cold,” “cool”) that
represent range of values
• Describe a particular phenomenon or process
linguistically and then represent that description in
a small number of flexible rules
• Provides solutions to problems requiring expertise that
is difficult to represent with IF-THEN rules
– Autofocus in cameras
– Detecting possible medical fraud
– Sendai’s subway system acceleration controls

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Fuzzy Logic for Temperature Control

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Machine Learning

• How computer programs improve performance

without explicit programming
– Recognizing patterns
– Experience
– Prior learnings (database)

• Contemporary examples
– Google searches
– Recommender systems on Amazon, Netflix

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Neural Networks

• Find patterns and relationships in massive amounts of

data too complicated for humans to analyze
• “Learn” patterns by searching for relationships,
building models, and correcting over and over again
• Humans “train” network by feeding it data inputs for
which outputs are known, to help neural network learn
solution by example
• Used in medicine, science, and business for problems
in pattern classification, prediction, financial analysis,
and control and optimization
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How a Neural Network Works

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Intelligent Agents

• Work without direct human intervention to carry

out repetitive, predictable tasks
– Deleting junk e-mail
– Finding cheapest airfare

• Use limited built-in or learned knowledge base

– Some are capable of self-adjustment, for example: Siri

• Chatbots
• Agent-based modeling applications:
– Model behavior of consumers, stock markets, and supply
chains; used to predict spread of epidemics

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Intelligent Agents in P&G’s Supply
Chain Network

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Hybrid AI Systems

• Fuzzy logic, neural networks, and expert

systems integrated into single application to
take advantage of best features of each
• For example: Matsushita “neurofuzzy”
washing machine that combines fuzzy logic
with neural networks

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Building Information System

Software Project Management +

SDLC

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Case Discussion
• Case Topic: "Angostura Builds a Mobile Sales Systems"
• Reference: Chapter 13
Group : Group 3

• Case Topic: "Centralization of Operations at Tata Power"

• Reference: Chapter 13
• Group : Group 4

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Need of Building a new
information system

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• When we design a new information system, we are
redesigning the organization.
• System builders must understand how a system will affect
specific business processes and the organization as a whole.
• Building a new information system is one kind of planned
organizational change.
• The introduction of a new information system involves much
more than new hardware and software.
• It also includes changes in jobs, skills, management, and
organization.

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Systems Development and
Organizational Change (1 of 8)
• Information technology can promote various degrees of
organizational change, ranging from incremental to far-
reaching.
• IT-enabled organizational change
• Automation
– Replaces manual tasks
– assisting employees with performing their tasks more
efficiently and effectively.
– Examples :
– Calculating paychecks and payroll registers,
– giving bank tellers instant access to customer deposit records

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Systems Development and
Organizational Change (2 of 8)
• Rationalization of procedures
– A deeper form of organizational change—one that follows
quickly from early automation—is rationalization of
procedures
– Automation frequently reveals new bottlenecks in
production and makes the existing arrangement of
procedures and structures painfully cumbersome.
– Rationalization of procedures is the streamlining of standard
operating procedures.
– Example : MoneyGram's system for handling global money
transfers is effective because the company simplified its
business processes for back-office operations.
Fewer manual steps are required.

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(3 of 8)

– Rationalization of procedures is often found in programs

for making a series of continuous quality improvements
in products, services, and operations, such as
 Total quality management (TQM)
 Six sigma

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Systems Development and
Organizational Change (4 of 8)
• Business process redesign
– A more powerful type of organizational change is business process
redesign, in which business processes are analyzed, simplified, and
redesigned.
– Business process redesign reorganizes workflows, combining steps
to cut waste and eliminate repetitive, paper-intensive tasks.
(Sometimes the new design eliminates jobs as well.)
– It is much more ambitious than rationalization of procedures,
requiring a new vision of how the process is to be organized.

• Example:
• A widely cited example of business process redesign is Ford Motor Company’s invoiceless
processing, which reduced headcount in Ford’s North American Accounts Payable
organization of 500 people by 75 percent. Accounts payable clerks used to spend most of
their time resolving discrepancies between purchase orders, receiving documents, and
invoices.

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Systems Development and
Organizational Change (5 of 8)
• Rationalizing procedures and redesigning business processes
are limited to specific parts of a business.

• Paradigm shifts
• More radical form of business change is called a paradigm
shift. A paradigm shift involves:
– Rethink nature of business
– Define new business model
– Change nature of organization

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39
(7 of 8)

• Paradigm shifts and reengineering often fail because

extensive organizational change is so difficult to orchestrate.

• Why, then, do so many corporations contemplate such

radical change?

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Organizational Change Carries Risks
and Rewards (8 of 8)

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Business Process Redesign (1 of 3)

• Many businesses today are trying to use information

technology to improve their business processes.
• Some of these systems entail incremental process change,
but others require more far-reaching redesign of business
processes.
• To deal with these changes, organizations are turning to
business process management.
• Business process management provides a variety of tools
and methodologies to analyze existing processes, design
new processes, and optimize those processes.
• BPM is never concluded because process improvement
requires continual change.
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Business Process Redesign (2 of 3)

• Business process management (BPM)

– Variety of tools, methodologies to analyze, design,
optimize processes
– Used by firms to manage business process redesign

• Steps in BPM
1. Identify processes for change
2. Analyze existing processes
3. Design the new process
4. Implement the new process
5. Continuous measurement

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Business Process Redesign – Some
Questions (3 of 3)
• What the importance is of each step?

• Why is it important to determine the right business process

to change rather than all business ?

• How would you measure the business process of a customer

ordering a meal?
• How would you measure the business process of a kitchen
preparing and delivering that meal?

• What about the business process of hiring a new employee?

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As-is Business Process for Purchasing a
Book from a Physical Bookstore

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Redesigned Process for Purchasing a
Book Online

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Tools for Business Process Management

• Over 100 software firms provide tools for various aspects of

BPM, including IBM, Oracle, and TIBCO.

• Identify and document existing processes

– Identify inefficiencies

• Create models of improved processes

• Capture and enforce business rules for performing, automating
processes
• Integrate existing systems to support process improvements
• Verify that new processes have improved
• Measure impact of process changes on key business
performance indicators

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Systems Development

• Activities that go into producing an information

system solution to an organizational problem
or opportunity
– Systems analysis
– Systems design
– Programming
– Testing
– Conversion
– Production and maintenance

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Figure 13.4: The Systems Development
Process

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Systems Analysis

• Analysis of problem to be solved by new system

– Defining the problem
– Identifying causes
– Specifying solutions
– Identifying information requirements

• Feasibility study
• Systems proposal report
• Information requirements
– Faulty requirements analysis is a leading cause of systems
failure and high systems development costs

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Systems Design

• Describes system specifications that will deliver

functions identified during systems analysis
• Should address all managerial, organizational, and
technological components of system solution
• Role of end users
– User information requirements drive system building
– Users must have sufficient control over design process to ensure
system reflects their business priorities and information needs
– Insufficient user involvement in design effort is major cause of
system failure

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 Table 13.1 System Design Specifications
(1 of 2)
Category Specifications

Output Medium, Content, Timing

Input Origins, Flow, Data entry

User Interface Simplicity, Efficiency, Logic, Feedback, Errors

Database Design Logical data model, Volume and speed requirements, File
organization and design, Record specifications
Processing Computations, Program modules, Required reports, Timing
of outputs
Manual Procedures What activities, Who performs them, When, How, Where

Controls Input controls (characters, limit, reasonableness),

Processing controls (consistency, record counts), Output
controls (totals, samples of output), Procedural controls
(passwords, special forms)

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 Table 13.1 System Design Specifications
(2 of 2)
Category Specifications

Security Access controls, Catastrophe plans, Audit trails

Documentation Operations documentation, Systems documents, User
documentation
Conversion Transfer files, Initiate new procedures, Select testing method
Cut over to new system
Training Select training techniques, Develop training modules,
Identify training facilities
Organizational Task redesign, Job redesign, Process design, Organization
Changes
structure design, Reporting relationships

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Completing the Systems Development
Process (1 of 3)
• Programming
– System specifications from design stage are translated into
software program code

• Testing
– Ensures system produces right results
– Unit testing: Tests each program in system separately
– System testing: Test functioning of system as a whole
– Acceptance testing: Makes sure system is ready to be used in
production setting
– Test plan: All preparations for series of tests

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Figure 13.5: A Sample Test Plan to Test a
Record Change

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Completing the Systems Development
Process (2 of 3)
• Conversion
– Process of changing from old system to new system
– Four main strategies
 Parallel strategy
 Direct cutover
 Pilot study
 Phased approach
– Requires end-user training
– Finalization of detailed documentation showing how system
works from technical and end-user standpoint

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• In a parallel strategy, both the old system and its potential
replacement are run together for a time until everyone is assured
that the new one functions correctly.

• The direct cutover strategy replaces the old system entirely with the
new system on an appointed day.

• The pilot study strategy introduces the new system to only a limited
area of the organization, such as a single department or operating
unit.

• The phased approach strategy introduces the new system in stages,

either by functions or by organizational units.

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Completing the Systems Development
Process (3 of 3)
• Production and maintenance
• After the new system is installed and conversion is complete,
the system is said to be in production.
– System reviewed to determine if revisions needed
– May include post-implementation audit document
– Maintenance
 Changes in hardware, software, documentation, or procedures to a
production system to correct errors, meet new requirements, or improve
processing efficiency
– 20 percent debugging, emergency work
– 20 percent changes to hardware, software, data, reporting
– 60 percent of work: user enhancements, improving documentation,
recoding for greater processing efficiency

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 Table 13.2 Systems Development
CORE ACTIVITY CORE ACTIVITY
Systems analysis Identify problem(s), Specify solutions, Establish
information requirements
Systems design Create design specifications
Programming Translate design specifications into program code
Testing Perform unit testing, Perform systems testing, Perform
acceptance testing
Conversion Plan conversion, Prepare documentation, Train users
and technical staff
Production and maintenance Operate the system, Evaluate the system, Modify the
system

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Structured Methodologies (1 of 2)

• Structured: Techniques are step-by-step,

progressive
• Process-oriented: Focusing on modeling
processes or actions that manipulate data
• Separate data from processes
• Data flow diagram (DFD)
– Represents system’s component processes and flow of data
between them
– Logical graphic model of information flow

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Structured Methodologies (2 of 2)

• Data dictionary
– Defines contents of data flows and data stores

• Process specifications
– Describe transformation occurring within lowest level of data
flow diagrams

• Structure chart
– Top-down chart, showing each level of design, relationship to
other levels, and place in overall design structure

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Figure 13.6: Data Flow Diagram for
Mail-in University Registration System

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Figure 13.7: High-level Structure Chart
for a Payroll System

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Object-Oriented Development (1 of 2)

• Object
– Basic unit of systems analysis and design
– Combines data and the processes that operate on those data
– Data in object can be accessed only by operations associated
with that object

• Object-oriented modeling
– Based on concepts of class and inheritance
– Objects belong to a certain class and have features of that
class
– May inherit structures and behaviors of a more general,
ancestor class

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Figure 13.8: Class and Inheritance

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Object-Oriented Development (2 of 2)

• More iterative and incremental than traditional

structured development
– Systems analysis: Interactions between system and users
analyzed to identify objects
– Design phase: Describes how objects will behave and
interact; grouped into classes, subclasses, and hierarchies
– Implementation: Some classes may be reused from existing
library of classes, others created or inherited

• Objects are reusable

– Object-oriented development can potentially reduce time and
cost of development

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