Information Systems in Organizations "Come, Watson, come! The game is afoot." - Sherlock Holmes Topics Extra Credit • Watson on Jeopardy! • Chapter 13 - Developing Business • Chapter 12 - IT Strategies & IT Solutions • I want some one to take notes for me of the things I reference in class – stuff that is not in the slides. • New Policy – first comprehensive set of notes per class sent to ifsm300124@thinairlabs.com will get a 100 on their lowest quiz to date. • New message, not a reply. • Subject: ifsm300-xx Notes 1-1 1-2 1-1 IBM's Watson 1-3 1-2 1-3 Men vs. Machine on Jeopardy • Watson was a computer designed to play the game Jeopardy • The process of developing the computer gave us greater thought into our own decision making process. • Tonight – the Games 1-25 Chapter 11 Developing Business/IT Strategies 1-26 1-25 1-26 McGraw-Hill/Irwin Learning Objectives • Discuss the role of planning in the business use of information technology, using the scenario approach and planning for competitive advantage as examples Planning Fundamentals RWC 1: IT/Business Alignment • IT created a seismic shift • One Goal – Winning Customers – Just knowing the importance and structure of e-business is not enough – Must be able to transform an old business design to a new e-business design • Discuss the role of planning and business models in the development of business/IT strategies, architectures, and applications Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved. – Every executive – Every manager – Every employee • Critical Skills – Meeting or beating goals – External customer focus – Identifying and seizing commercial opportunities • Identify several change management solutions for end user resistance to the implementation of new IT-based business strategies and applications • Differentiating component – IT Capability – More than providing systems – Be part of the system 11-29 11-30 11-31 Components of Organizational Planning Scenario Approach Strategic Visioning Questions • Gaining popularity • Less formal • Virtual world (microworld) exercises • Business scenarios are created and evaluated • Alternative scenarios are then created 11-32 Trends that Affect Strategic Planning 11-33 Strategic Opportunities Matrix 11-34 SWOT Analysis • Strengths – Core competencies and resources • Weaknesses – Areas of substandard business performance • Opportunities – Potential for new business markets or innovative breakthroughs • Threats – Potential for business and market losses 11-35 Business Models and Planning 11-36 11-37 The Business/IT Planning Process Questions for Business Models • Vital questions – Who are our customers? – What do our customers value? – How much will it cost to deliver that value? – How do we make money in this business? 11-38 11-39 11-40 Information Technology Architecture Balanced Scorecard Balanced Scorecard Example • Measures activities in terms of vision and strategies • Conceptual design components – Technology platform – Financial performance – Data resources – Impact on customers – Application architecture – Performance of key business processes – IT organization – Company’s learning curve and growth • Four processes – Translate vision into operational goals – Communicate vision and link to performance – Business planning www.steelwedge.com – Feedback/learning and strategy adjustment 11-41 11-42 Identifying Business/IT Strategies Strategic Positioning Matrix 11-43 Strategic Matrix • Cost and Efficiency Improvements • Valuable Internet applications – Low internal and low external connectivity – Recommend – Use the Internet as a fast, low-cost way to communicate and interact with others – Transcend communication barriers – Establish connections that enhance productivity – Stimulate innovative development • Performance Improvement in Effectiveness – Improve customer relations – High internal but low external connectivity – Recommend – Increase use intranets and extranets 11-44 11-45 Strategic Strategies E-Business Strategy Examples • Global Market Penetration • • • • • • • – High external but low internal connectivity – Capitalize with e-commerce websites using value-added information services and extensive online customer support • Product and Service Transformation – High external and high internal connectivity – Develop and deploy new Internet-based products and services to create a new strategic position in the marketplace 11-47 11-46 Business Application Planning Process Market Creator Channel Reconfiguration Transaction Intermediary Infomediary: Self-Service Innovator Supply Chain Innovator Channel Mastery 11-48 11-49 Comparing Planning Approaches E-Business Architecture Planning Implementation Challenges • Implementation – Do what you planned to do – Critical skill for managers • Many companies are good at planning • Few are good at executing the plan – Even if senior management consistently identifies e-business as an area of great opportunity and critical need 11-50 RWC 2: Project Success 11-51 Implementing Information Technology • People skills critical to project success 11-52 Impact and Scope of Implementing IT • Developments that have generated organizational change – Teamwork – Support during tough times – – – – – – – – • Bad relationships leading cause of failure • Managers tend to go to software instead of building relations • Showing progress at short intervals helps Business process reengineering ERP systems Y2K compliance Shared service centers Just-in-time manufacturing Sales force automation Contract manufacturing Introduction of Euro currency • E-business is the latest catalyst 11-53 Impact and Scope of Implementing IT 11-54 End User Resistance and Involvement 11-55 Obstacles to KM Systems • Change generates resistance • Examples: – Customer Relationship Management (CRM) – Knowledge Management Systems (KM) • CRM failures – CRM failure rate up to 75 percent – Causes for failure • Sales force automation problems • Unaddressed cultural issues 11-56 • Sales staffs fearful and thus resistant 11-57 11-58 Keys to Solving End User Resistance Key Dimensions of Change Management Change Management Programs • Develop a change action plan • Create relationships – Understand the end-user’s situation • Assign managers as change sponsors • Provide education and training • Require involvement and commitment • Develop employee change teams • Encourage open communications and feedback about organizational changes – End-users – Top management – All stakeholders • Eliminate frustration and inconvenience 11-59 Change Management Tactics 11-60 11-61 A Change Management Process Avnet Marshall’s Transformation • Involve as many people as possible in ebusiness planning and application development • Make constant change an expected part of the culture • Tell everyone as much as possible about everything, as often as possible, in person • Make liberal use of financial incentives and recognition • Work within company culture, not around it 11-62 RWC 3: Crucial Strategic Planning Elements 11-63 11-64 RWC 4: The Science behind Change • Implementing changes is very challenging • Employees resist change • Understanding can lead to smoother transitions • Not everyone is motivated by ambition • Education and training aid with acceptance • Alignment between business and IT – IT strategic plan to improve the business-IT relationship – Articulate how IT fits into business and overall business strategy. • Apply clear strategy to business activities 11-65 Chapter 12 Developing Business/IT Solutions 11-66 McGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved. Learning Objectives Learning Objectives • Use the systems development process outlined in this chapter and the model of IS components from Chapter 1 as problemsolving frameworks to help you propose information systems solutions to simple business problems • Describe and give examples to illustrate how you might use each of the steps of the information systems development cycle to develop and implement a business information system Learning Objectives • Explain how prototyping can be used as an effective technique to improve the process of systems development for end users and IS specialists • Compare and contrast the four basic system conversation strategies • Describe several evaluation factors that should be considered in evaluating the acquisition of hardware, software, and IS services • Understand the basics of project management and their importance to a successful system development effort • Identify the activities involved in the implementation of new information systems 11-68 11-69 The Systems Approach IS Development • Information Systems Development What is Systems Thinking? • Problem solving technique – Applying the Systems Approach to IS Development – Also called Application Development • Seeing the forest and the trees in any situation • Interrelated activities – Recognize and define a problem or opportunity using systems thinking – Develop and evaluate alternative system solutions – Select the solution that best meets your requirements – Design the selected system solution – Implement and evaluate the success of the system 11-71 – Seeing interrelationships among systems rather than linear cause-and-effect chains – Seeing processes of change among systems rather than discrete snapshots of change • Seeing the system in any situation – Find the input, processing, output, feedback and control components 11-72 Systems Thinking Example RWC 1: Virtualization Helps Developers • • • • 11-73 Systems Analysis and Design (SA&D) First used quietly for development tasks Later introduced to IT Executives Simplifies development and testing Protection from system crashes • Overall process – Identification of business problems – Design – Implementation – Create system snapshots and imaging – Restore to last-known good version • Two most common approaches – Object-oriented analysis and design • Doesn’t facilitate load testing – Life cycle – Need physical machine 11-74 11-70 11-75 11-76 Systems Development Lifecycle (SDLC) Systems Development Process Types of Feasibility Studies • Systems Investigation • Operational – First step – Consider multiple proposals – Preliminary feasibility study • • • • • – Fix the problem, fit the organization • Economic – Cost/Benefit Analysis Information needs of prospective users Resource requirements Costs Benefits Legal environment • Technical – Components and time available • Human Factors – Right people and roles available – Feasibility study may be unnecessary • Legal/Political • Government mandate 11-77 Systems Analysis – Government, patent, or license restrictions 11-78 Types of Analysis • Produces the functional requirements • Basis for the design of the new system Functional Requirements • Goal: what needs to be done, not how • Organizational – Structure, people, activities • One of the most difficult steps • Present System • In-depth study • Determine what type of information each business activity requires – Hardware, software, network, input, output, processing – Information needs • Company • Logical • End users • Determine the information processing capabilities required for each system activity – What the current system does • Business stakeholders 11-79 – Not concerned with how it works – Existing system • Activities, resources, and products 11-80 Functional Requirements 11-81 Systems Design 11-82 Prototyping Life Cycle • Focuses on three areas 11-83 11-84 11-85 User Interface Design System Specifications • Supports interactions between end users and computer-based applications • Components of formal design – User interface methods and products – Get help from end-users – Database structures – Designers create attractive and efficient forms – Processing procedures – Frequently a prototyping process – Control procedures – Produces detailed design specifications • Examples of System Specifications – – – – – User interface specifications Database specifications Software specifications Hardware and network specifications Personnel specifications 11-86 Encouraging End User Web Development • • • • • End User Development 11-87 Object-Oriented Analysis and Design 11-88 Implementation Process • Object – anything a programmer needs manipulated • Object-Oriented Programming (OOP) techniques: Look for tools that make sense Spur creativity Set some limits Give managers responsibility Make users comfortable – – – – Inheritance Modularity Polymorphism Encapsulation • Object-Oriented Analysis (OOA) – Model of object interaction, not solution • Object-Oriented Design (OOD) 11-89 Sample Implementation Process – Solution based on constraints 11-90 RWC 2: Difficult Path to Software Upgrades 11-91 Project Management • System upgrades are daunting • Failures are costly • The skills and knowledge necessary to be a good project manager will translate into virtually any project environment – Loss of immediate revenue – Loss of customer loyalty – Three to six month recovery – Sought after by most organizations • Contingency plans – Backup website – Extra operators in call center • Packet implementation helps – Basic install – Additional features 11-92 11-93 11-94 What is a Project? Phases of Project Management Evaluating Hardware, Software, Services • Establish minimum physical and performance characteristics • Every project has – – – – – – A set of activities with a clear beginning and end Goals Objectives Tasks Limitations or constraints A series of steps or phases – Formalize in an RFP or RFQ • Send RFQ to appropriate vendors • Evaluate bids when received – – – – • Managing a project effectively requires – Process – Tools – Techniques 11-95 11-96 Hardware Evaluation Factors • • • • • • • • • • Software Evaluation Factors • • • • • • • • • • Performance Cost Reliability Compatibility Technology Ergonomics Connectivity Scalability Software Support All claims must be demonstrated Obtain recommendations from other users Search independent sources for evaluations Benchmark test programs and test data 11-97 IS Services • Examples of IS services Most Hardware Evaluation Factors Apply Quality Efficiency Flexibility Security Connectivity Maintenance Documentation Hardware Overall Rating – Developing a company website – Installation or conversion of hardware/software – Employee training – Hardware maintenance – System design and/or integration – Contract programming – Consulting services – Software that is slow, hard to use, bug-filled, or poorly documented is not a good choice at any price 11-98 IS Service Evaluation Factors Other Implementation Activities 11-100 Major System Conversion Strategies • Testing • IS evaluation factors include – – – – – – – 11-99 Performance Systems development Maintenance Conversion Training Backup facilities and services Accessibility to sales and support • Data conversion • Documentation • Training • Business position and financial strength – Hardware selection and compatibility – Software packages offered (Plunge) 11-101 11-102 11-103 Post-Implementation Activities RWC 3: PayPal Going Global • System Maintenance RWC 4: Project Backlog • • • • Demand for IT is increasing Requests for IT projects are piling up. Budget is not increasing. Backlog is number-one barrier to effectiveness, • Two types of backlog • How do global companies keep their consumer sites updated in the local language or localizing the content without spending a lot of time and money? • PayPal redesigned software – Corrective: fix bugs and logical errors – Adaptive: add new functionality – Perfective: improve performance – Preventive: reduce chances of failure – Allow simultaneous refreshes for 15 locales ranging from France to Poland. • Post Implementation Review – Correct Errors – Backlog of desire • Result – Periodic review/audit • Applications that users are yearning for – Net total payment volume – $14 billion – Backlog of commitment • 12 percent of U.S. e-commerce • 8 percent of global e-commerce. • Single most costly activity 11-104 • Projects that are approved but not started 11-105 Closing Thought • In The Sign of the Four, Watson quotes Holmes as being "an automaton, a calculating machine". • I guess he got it backwards… End of this Lecture 1-107 1-107 1-108 1-108 • CIOs need to pay attention to both types of a backlogs. 11-106