Management of Computer
System Performance
Introduction
Management of Computer
System Performance
I am assuming that you are here for a primary and
singular reason.
I believe that reason is for you to gain a competitive
advantage in the job market so that you can
optimize your income.
I have structured this course with this in mind.
I am committed to helping you achieve that goal.
I expect you to work towards that goal as well.
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Management of Computer System
Performance
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Description:
 This course provides students with knowledge
and skills to comprehend the concepts on the
organization of Information System Unit and
Resources Planning as well as the Performance
Measurement
Objectives:
 The students should be able to understand the
concepts on The Organization System Unit,
 The students should be able to plan Resources
and measure the performance of Information
system Unit..
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Grading
Deliverable
Weight
Grade Range
1. Individual Paper Due
20%
90-100
A
2. Mid-Term Test
30%
80-89
B
3. Final Test
50%
70-79
C
4. Labs/ Studio
0%
60-69
D
100%
0-59
F
Total
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The Text and Source Material
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The effective measurement and
management of IT costs and
benefits
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Butterworth/Heinemann: ISBN 0-75064420-6
Hardcover, Second Edition
Reference Material:
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Barrons Financial Guide: Dictionary of
Finance and Investment Terms
www.TheEbusinessSite.com
Class handouts
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Assignments
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The Article must be approved in advance by the Prof.
Article Review
 NTE 5 pages Single Spaced/10 double spaced.
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Executive Summary 1/2 page (Single Spaced)
Article Summary 2-3 ½ pages (Single Spaced)
Your Opinion of the article and its conclusion with a
justification of your opinion, NTE 1page (Single Spaced).
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1 inch margins,
Font - Arial or Times New Roman Type,
Point Size 10-12.
External references supporting your opinion are acceptable.
Format violation is 10 points.
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Project - Parameters
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This course will require the delivery of
calculated values for IT project Valuation
You are required to do the following:
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Forms into Groups of 4-5 People
Identify a publicly traded corporation with
annual sales between $700M and $1.5B.
Select a firm from an industry that you know
something about.
Exercise great care in selecting a firm.
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Project - Parameters
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Company selection guidelines:
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The fewer the divisions, the better.
 This will make your lives simpler
Based on your analysis, they should not currently have an
ERP system in place.
Your group will perform analysis on their annual
report
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The analysis will involve the impact of IT investments
impacts on the firm,
 Your group will use the formulas and spreadsheets presented
in this course and provided on TheEBusinessSite.com for this
purpose.
The performance of valuation research for some variables
will be required.
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Project – The Task
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Assume that your group has been tasked to assess
the financial and economic impact of the
implementation of a corporate wide ERP system.
Your group will need to perform a series of
evaluations for this effort.
In that you are working as a group, the final results
should be consistently accurate.
Spreadsheet modifications should be documented.
Assumptions must be documented and explained.
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Project – The Task
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The Implementation Task Financial Parameters are as follows:
Costs
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Deployment and operational schedule
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10% to 13.7% of year 1 annual Gross revenues.
7% to 9% of year 2 annual Gross revenues.
60% probability that it will be completed in 23 months
10% probability that it will be completed in 20 Months
30% probability that it will be completed in 32 months
Efficiency gains are expected to be as follows:
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(Example: Gains are correlated at 90% bottom line improvement [2% x
.9=1.8% bottom line cost reduction in months 7-11])
2% in months 7-11
8% compounded on the previous 2% by month 18
14% compounded on the previous 8% by month 23
2% annual efficiency gains from month 24 forward for the next three
years.
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Project – The Task
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Identify Interest rates for the periods provided for
use in your formulas
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Look at similar industries for comparative
purposes.
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substantiate and validate interest rates used.
Compare revenue, returns, ROI and similar findings.
I reserve the right to deliver at least one change
to these parameters in Session 11&12
Session 19-20, be prepared to present your
findings.
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Presentation - 10 -15 slides
Paper 15 pages single spaced/30 pages double
spaced.
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Project – The Task
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15-30 Paper format
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Section 1. Company Overview [2 or 3 pages.]
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Perform an industry analysis of the selected firm’s primary competitors
Provide some direct competitive analysis.
Section 4. Financial Recommendation [2-3 pages]
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Identify and discuss the ERP Project’s potential economic impact on the firm.
Use a before and after analysis for each area of measure.
Based on external variables to that industry, (interest rate changes, etc.) provide
a probability of the likelihood that your estimates will occur.
Section 3: Comparative Analysis [3-6 pages]
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Describe the company that your group selected, what it does and provide a brief
overview of its current financial and future growth.
Section 2. The ERP Project’s Economic Impact [4-8 pages.]
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1 inch margins, Font - Arial or Times New Roman Type, Point Size 10-12.
Based on your analysis, provide a financial recommendation to move forward
with the ERP deployment project.
Support your recommendation calling on earlier content.
Format violation is 10 points.
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Overview
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The course will address the underlying business
needs for IT cost and benefit review
Provide a series of tools and methodologies on
performing these measurements
Equipment the student to better understand the risk
elements associated with IT costing.
Provide real world skills for job growth and career
enhancement, as well as survivability.
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Overview
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This reality creates several significant costing
and benefit quantification problems.
The following needs to be accurately defined:
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Direct Costs: such as resource costs (labor, H/W and
S/W+Consultants).
Indirect costs: such as business operations
interruptions based on process changes.
Implementation capital allocation Costs: major IT
projects within many companies, $1M+ budgets are
common.
Direct and indirect benefits.
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Overview
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It is also important to consider the political realities
of answering these questions.
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Upper manager’s opinions generally falls into two camps.
 Those who see the potential or intuitive value of IT and
 those who see such projects as a drain of capital away from
their own projects, such as new production systems.
Consider the position of the IT department in most
companies as the proposing entity of a new project.
 IT is the most expensive administrative overhead cost in the
corporation.
 It is usually a part of the Finance department, an
administrative support organization.
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Overview
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How should this be done.
This is the core to IT Economics.
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What is the economic benefit to corporations of
employing IT resources.
Operationally, there are many problems that
should be addressed.
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Which IT resources should be deployed?
How do I select them?
What are the risks and how should those affect my
decision?
SWAGs can waste money and may lead to massive
failures.
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Overview
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The bottom line is that:
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Companies need to control and/or reduce costs,
IT is the most expensive cost center, thus a primary target
for cost reduction in many organizations,
Justification of operational and project costs is critical to the
survival of the IT department and in reality, the financial
survival of the company may be equally at stake as well,
As managers, you will have to operate in this
environment and succeed within these fiscal and
political constraints.
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Overview
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At the highest level, the questions are;
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What is the worth of each IT project?
What are the firm’s benefits by using it?
How will it increase owners equity?
This course will help you answer these
questions.
It will combine finance, business and IT.
It will present the information in an
understandable format that is usable in real life
situations.
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Why Businesses Exist.
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First and foremost, businesses exist to maximize the
value of their owners equity.
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Non-profits may have a definition of “value” that is not
based on monetary worth, but they do what they do to
increase that value.
Successful businesses never loose this focus nor
deviate from it in the development and execution of
their business plans.
Methodologies may vary but the goal is constant.
DO NOT FORGET THIS!
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Premise of the Course
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Firms that survive and prosper show continued
and managed growth.
To support growth, they focus on gaining
efficiencies whenever and where possible.
The greatest efficiencies are usually achieved
through Business Process Re-engineering
through the application of Information
Technology.
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BPR and IT generate the greatest gains when used
together.
Their use separately may also provide gains but usually
not as great.
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The Market Driver
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In business today, most efficient and competitive firms use
information technology to maximize these traits.
 A competitor successfully employs a fully integrated SAP R3
ERP/ERM system.
 They achieve efficiencies that allows them to produce the
same goods or services that you sell at a 20% lower cost.
 They therefore lower their sale price by 10% and still
generate a greater profit. This increases their market share
and makes the owners happy.
 Can you afford not to make the same moves to maintain a
competitive position or to least maintain parity?
This is the problem many firms face.
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Class Requirements
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Attendance is strongly recommended.
Material is on line at http://www.binus.edu.id
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Attendance will be taken.
There will be tests
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There will not be a group project unless a group of
students has a burning desire to do that.
There will be a Mid-term, Final and a topic specific
paper.
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Class Requirements
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Investments
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Tuition
Your expectations
BINUS UNIV.’s Expectations
Goals and Objectives
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