Transcript McNurlin - 7th Edition
Based on Chapter 10
Information Systems Management In Practice 6E McNurlin & Sprague
PowerPoints prepared by Michael Matthew Visiting Lecturer, GACC, Macquarie University – Sydney Australia
This lecture looks at the issues surrounding systems development: ◦ Project Management What is it Change Management ◦ Risk Management Ways to replace legacy systems, and ◦ Measuring the benefits of systems Case examples include the BOC Group, Down Corning, GTE Directories, Amazon.com, Toyota Motor Sales, Wachovia and a trucking company ©2006 Barbara C. McNurlin. Published by Pearson Education.
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Chapter 10 deals with issues surrounding system development
Companies are in three ‘businesses’: 1.
Infrastructure Management 2.
3.
Customer Relationship Product Innovation ◦
Traditionally companies have bundled the three (businesses)
Leads to compromises because the three have conflicting agendas ©2006 Barbara C. McNurlin. Published by Pearson Education.
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1.
2.
3.
IS departments can be viewed as being in the same three businesses:
Operations are infrastructure management The help desk is the customer relationship business System development is product innovation ©2006 Barbara C. McNurlin. Published by Pearson Education.
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◦
Infrastructure management:
Goal = reducing costs Providing infrastructure involves high fixed costs Battle = build scale ◦ Management focus = Efficiency Standards As we are seeing with operations and network management Outsourcing?
©2006 Barbara C. McNurlin. Published by Pearson Education.
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Customer relationship: ◦ Goal = provide service ◦ ◦ PC support & help desks often outsourced Especially in Europe & Asia (multilingual needs) Outsourcing offshore = increasing dramatically Product innovation: ◦ Goal = speed ◦ ◦ Provides nimbleness Key to success = talent In IT, developers are “king” so they are given the coolest tools There are a number of management issues surrounding system development: “Staffing, staffing, staffing”, As well as speed & nimbleness ©2006 Barbara C. McNurlin. Published by Pearson Education.
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Today, much organizational work is performed via projects In IS as well as other functions, being able to manage a project to completion, and deliver the expected outcome within the allotted time and budget, has become an increasingly valuable skill ©2006 Barbara C. McNurlin. Published by Pearson Education.
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◦ ◦
Project Management
management of a project May sound simple and self-evident BUT = doesn’t make it easy!
is simply the Many people get confused/concerned because IT project management contains the dreaded ‘T’ word – Technology In reality IT project management is not that much different from other forms e.g. construction ©2006 Barbara C. McNurlin. Published by Pearson Education.
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A ◦ ◦ project activities undertaken to achieve a specific goal. All Projects (IT or other) should: Have a clearly stated goal Be ‘finite’ is a collection of related tasks and Clear beginning & end IT Project Management: ◦ 10% technical, 90% common sense ◦ ◦ ◦ Management styles vary as do backgrounds Key = keeping in mind, and under control the numerous interdependencies GET THE JOB DONE!
©2006 Barbara C. McNurlin. Published by Pearson Education.
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◦ ◦ Project Management Institute Project Management encompasses five processes 1.
Initiating 2.
3.
4.
5.
Planning Executing Controlling, and Closing To become a certified PMP = must pass tests covering nine knowledge areas: 1.
Integration 2.
3.
4.
5.
6.
7.
8.
9.
Scope Time Cost Quality Human Resources Communication Risk Procurement ©2006 Barbara C. McNurlin. Published by Pearson Education.
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1.
Responsible for the following tasks: Setting Up the Project Why A brief background of the project, and The business objectives to be achieved What Key outputs to be produced Benefits When List of milestones and expected timing High level project plan Who Project team Stakeholders – and their expectations How Definition of the work that needs to be undertaken Scope Specific exclusions ©2006 Barbara C. McNurlin. Published by Pearson Education.
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Responsible for the following tasks cont.: 2.
Managing the Schedule Schedule / project plan = heart of the project and main communication tool High level first – then break down as you proceed Baseline and track Use automated tools Recommendations: 1.
Focus on the date that tasks are/ will be completed rather than on the % of overall project completed 2.
3.
4.
Review progress at least monthly, preferably more often Focus on tasks to be completed Vs. those finished Reforecast when new evidence comes to light ©2006 Barbara C. McNurlin. Published by Pearson Education.
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Responsible for the following tasks cont.: 3.
Managing the Finances 4.
Financial plan, who is accountable, benefits etc.
Baseline costs and track They will change!
Need to know how much has been spent and how much money is left Managing the Benefits Difficult to estimate but must try Base on same assumptions as costs Look at timings Track Why are we doing this????
Should we still be doing it? ©2006 Barbara C. McNurlin. Published by Pearson Education.
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5.
Responsible for the following tasks cont.: Managing Risks, Opportunities and Threats 6.
Risk mitigation and risk management Usually poorly done Risk logs Issue management Soliciting Independent Reviews Health checks (of the project) By someone independent (could be external) ©2006 Barbara C. McNurlin. Published by Pearson Education.
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IS often assume a technically elegant system is a successful system. (IT’S NOT!!!) Many technically sound systems have turned into implementation failures because the people side of the system was not handled correctly System is only a success if it meets the users’ requirements and they are happy with it and with using it Information technology is all about managing change New systems require changing how work is done Focusing only on the technical aspects is only half the job – the other job is change management ©2006 Barbara C. McNurlin. Published by Pearson Education.
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Changing management = process assisting people to make change in their working environment ◦ Change – caused by the introduction of a new computer system ◦ ◦ People resist change, especially technological change, when they view it as a crisis . ‘Resistance’ includes: ◦ Deny the change Distort information they hear about the change Convince themselves and others the new system will not change status quo ©2006 Barbara C. McNurlin. Published by Pearson Education.
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◦ ◦ ◦ Type of people involved in a change project Sponsor: the person or group that legitimizes the change Change agent: the person or group who causes the change to happen Target: is aimed the person or group who is being expected to change and at whom the change ©2006 Barbara C. McNurlin. Published by Pearson Education.
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Methodology to manage technological change Conduct surveys with all three groups to determine: ◦ ◦ ◦ ◦ Whether the scope of the project is do-able, or whether the organization is trying to change too much at one time Whether the sponsors are committed enough to push the change through, or whether they are sitting back expecting the organization to change on its own Whether the change agents have the skills to implement the change, or whether e.g. they are not adept at rallying support Which groups are receptive to the change and which are resistant ©2006 Barbara C. McNurlin. Published by Pearson Education.
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The workshop allowed sponsors to deal with issues of the company’s ability to assimilate change, obstacles and so on
Realization:
◦ Teams can only put the tools in place; the organization had to make the change happen ◦ Sponsors need to drive change through the organization – planning their own strategies and examining possible consequences ©2006 Barbara C. McNurlin. Published by Pearson Education.
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One Change Project
Process of paperwork for delivering gas products and invoicing customers ◦ Handwritten – into – Point of Delivery handheld Device (PODD) ◦ PODD: Schedules downloaded overnight = pack truck in night PODD accept signature of customer – print a receipt Billing data automatically transmitted to headquarters Team members absorb each others’ knowledge and become one entity rather than two ©2006 Barbara C. McNurlin. Published by Pearson Education.
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Involving Middle Management
Advisory council: ◦ Upward job – provide feedback on recommended changes and implementation issues ◦ Downward job – describe recommendations to employees & get their buy-in ©2006 Barbara C. McNurlin. Published by Pearson Education.
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Training the Drivers
Created a six-hour training course ◦ “A Day in a Driver’s Life” Perfect day with PODD (handheld device) Harder scenarios Success at the outset & mitigated the identified risks by: ◦ – PODD team assessed its people aspects Holding the sponsorship event ◦ ◦ Involving middle management via the advisory council Thoroughly informing and training the truck drivers ©2006 Barbara C. McNurlin. Published by Pearson Education.
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Not all IT-based projects succeed ◦ Many fail, especially the really large ones e.g. ERP, CRM ◦ ◦ 30 to 70% fail Why? = Do not overcome their risks Technical Business Technical risks ◦ Sub-performance, scope creep making it too complex ◦ Business risks ◦ Business does not change properly to use the new systems ◦ Can’t always be predicted but they can be contained Are not as easily righted Need to: 1.
Assess the risk 2.
3.
Mitigate the risk Adjust the project management approach ©2006 Barbara C. McNurlin. Published by Pearson Education.
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◦ Step 1: Assess the Risks Three predominant risk factors: 1.
Leadership of the business change 2.
3.
Employees’ perspective Scope and urgency • of the change of the change Decision tree (Figure 10-1) Project leader = executive(s) responsible for the change ◦ Must be a business executive It is the business, not IT that is required to change • Contributes to success/failure? – 6 questions: 1.
Are they committed to the business case?
2.
3.
4.
5.
6.
Do they understand the extent of change in work behaviour required for the project to succeed?
Are they formally motivated to pull off the change?
Are they at the appropriate org. level with the formal power…..?
Do they have experience with a project of similar scope, urgency and people impact?
Do they have informal power, such as credibility and respect? ©2006 Barbara C. McNurlin. Published by Pearson Education.
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©2006 Barbara C. McNurlin. Published by Pearson Education.
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◦ ◦ ◦ Step 2: Mitigate the Risks Project management styles Authoritative Vs. Participative Project’s budget and timeframe Rigid Vs. Adjustable Figure 10-2 Big Bang Only appropriate when all 3 factors = positive Improvisation Leadership and employee = positive but scope or urgency place the project at risk Committed workforce can adapt etc.
Guided Evolution Used when only the employee perception is negative Can be overcome by involving them Top-down Coordination Only works when the leadership factor supports the business change and when the leadership is respected, full-time and highly experienced in leading business change ©2006 Barbara C. McNurlin. Published by Pearson Education.
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©2006 Barbara C. McNurlin. Published by Pearson Education.
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Successful ERP implementation from 1995 to 1999 Each project phase had different business risks ◦ Realizing this the project executive took a different project management approach in each phase ◦ ◦ Phase 0: Get Ready ◦ Leadership = High Risk Employee Perception = High Risk Scope and Urgency = High Risk Phase 1: Understand the New System ◦ Use the Improvisation approach of participative management and flexible deadlines Concerned re employee reticence in the later phases so focus = on building commitment Phase 2: Redesign the Work Processes ◦ Use the Guided Evolution approach of participative management with fixed deadlines Phase 1 = got hem committed but did little to get the work processes redesigned Continued through the pilot – cutover to SAP at newly acquired European sub. ©2006 Barbara C. McNurlin. Published by Pearson Education.
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Phase 3: Implement the ERP Worldwide ◦ Use Top-down coordination with an authoritative management style and flexible timelines Pilot’s success demonstrated management’s determination and shifted employee perception to the positive Scope shifted to negative because it was ‘company wide’ Phase 4: Complete Implementation ◦ Use the Big Bang approach of authoritative management and firm deadlines By the end of 1998, most of the sites had implemented so all the risk factors had turned positive Initially conversion took 18 months. These later sites = 4 ©2006 Barbara C. McNurlin. Published by Pearson Education.
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Establish the Ground Rules ◦ Open systems, industry standards, web-enabled etc.
Foster Discipline, Planning, Documentation and Management ◦ If the process is not controlled properly, anything can happen or, more realistically, potentially nothing will happen Obtain and Document the ‘Final’ User Requirements ◦ Don’t get too technical Obtain Tenders from All Appropriate Potential Vendors Include Suppliers in Decision Making Convert Existing Data ◦ Task might appear quite simple but often causes the biggest headaches Follow Through After Implementation ◦ Cross the t’s and dot the i’s in terms of documentation, future maintenance processes etc. ©2006 Barbara C. McNurlin. Published by Pearson Education.
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Proper Planning Appropriate User Involvement Strong Visible Management Support Project Manager(s) with Power and Time Good Change Management Working As A Team Proper Project Monitoring and Control Proper Project Closure ©2006 Barbara C. McNurlin. Published by Pearson Education.
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In all circumstances: KEEP YOUR FOCUS ON THE END RESULT Look at enablers not obstacles
©2006 Barbara C. McNurlin. Published by Pearson Education.
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Top management informed?
Top management involved?
Sponsorship?
Project planning tools?
Scope creep?
Status reporting?
Current capabilities?
IT/business interaction?
Training/business change management?
©2006 Barbara C. McNurlin. Published by Pearson Education.
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◦ ◦
Many Information Systems executives feel trapped by the past:
Old legacy programs & data they would love to replace However, replacement is not the only option
In many cases = not even the wisest Possibly = only delay (the inevitable?) ©2006 Barbara C. McNurlin. Published by Pearson Education.
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◦ ◦ ◦ Upgrading – sometimes makes more sense More difficult (to sell?) Not as exciting as a totally new system Most replacement projects that failed could have been upgrade projects Many reverted to upgrading anyway When a systems technology is so obsolete that it does not exist in many places, then replacement is probably the only choice – BUT otherwise – perform 3 analyses: 1.
Rigorous analysis of the costs and benefits the new system 2.
3.
Determine how specialized the new system really is Sometimes = think you need ‘made to order’ when purchased would do just fine KISS Assess the IS staff’s capabilities honestly Can they do the job?
©2006 Barbara C. McNurlin. Published by Pearson Education.
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Figure 10-3 illustrates the choices companies have with dealing with legacy systems ◦ Analogy with a home The options can be performed: ◦ In-house or ◦ Outsourced – including: Transitional Part ©2006 Barbara C. McNurlin. Published by Pearson Education.
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©2006 Barbara C. McNurlin. Published by Pearson Education.
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1.
Restructure the system: House = updating the look of a room e.g. repainting or getting rid of clutter Applicable to systems that are basically doing the job but run inefficiently or are “fragile.” Seven Steps in restructuring: 1.
Evaluate the amount of structure in the current system - number of layers of nesting, degree of complexity, etc. 2.
– Use tools to trace program control logic Compile the program, to be sure it is in working order ©2006 Barbara C. McNurlin. Published by Pearson Education.
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1.
3.
Restructure the system cont .: – Run the program through a structuring engine, which cleans up and restructures the code, following structured programming concepts This process does not change the logic of the program, but replaces poor coding: • Reduces number of ‘GOTOs’ • Removes dead code • • Highlights loops, and Groups input/output 4.
5.
6.
7.
Reformat the listing to make it easier for programmers to understand Ensure that the old and new versions produce the same output – File to file comparator Minimize overhead introduced by restructuring (optimizer package) “Rationalize” the data by giving all uses of the same data one data name ©2006 Barbara C. McNurlin. Published by Pearson Education.
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2.
Reengineer the system: 1.
2.
A step beyond restructuring, implies extracting the data elements from an existing file and the business logic from an existing program and moving them to an existing platform. See Life Cycle Figure 10 4 House = fixing what isn’t working Reverse engineering: components existing programs, along with their files and DB descriptions, are converted from their implementation level description to their equivalent design level Forward engineering: from requirements level to operational systems ©2006 Barbara C. McNurlin. Published by Pearson Education.
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©2006 Barbara C. McNurlin. Published by Pearson Education.
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Produced, marketed, distributed telephone directories in 14 countries
◦ The directory publishing system had four main databases, designed application-by application, so the data elements were difficult to change, enhance, and reuse The data administration group acquired reverse engineering tools to help them improve these databases ©2006 Barbara C. McNurlin. Published by Pearson Education.
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In another project, the company used an automated tool to reverse-engineer a poorly designed database from its physical model to its data model, and then create a properly designed data model using entity relationship modeling techniques In a third project, database administrators reused some data elements in a large database for a new production scheduling system, again using reengineering tools ©2006 Barbara C. McNurlin. Published by Pearson Education.
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3.
◦ ◦ Refurbish the system House = enhancing the usefulness by replacing furniture, landscaping etc.
If the old system is maintainable and causing no major problems; it may be worthwhile to add ‘extensions’ Potential extensions: Supply input in a new manner Make new uses of input, or Allow the programs to deal more comprehensively with the data Occurring quite a bit these days with the ‘web’ Old system an ‘untouchable’ black box surrounded by new systems Note: this method was popular even before the ‘web’ ©2006 Barbara C. McNurlin. Published by Pearson Education.
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4.
Rejuvenate the system: 1.
House = adding new functions e.g. new room, pool etc.
Adding new functions to a reengineered system to make it more valuable. Phases of rejuvenation process: – Recognize a system’s potential First clean up existing system using code restructuring tools and then building from there 2.
3.
4.
– Clean up the system Transform the poorly structured COBOL code into more structured, maintainable code – Make the system more efficient System can be converted to a new operating environment and a new file structure, together with manual tuning and enhancements to reduce system processing time – Give the system a strategic role To answer the question “How can we provide even more timely information or improve competitive position in the marketplace.” • e.g. allowing it to feed a data warehouse ©2006 Barbara C. McNurlin. Published by Pearson Education.
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2002 – initiated its Web Services program where anyone can receive a license to access Amazon’s data and content via XML feeds – for free ◦ Restrictions, copyright etc.
Numerous (>27,000) with various third-party offerings Amazon takes the risk of not controlling how others use its information, but in return, others are creating gadgets, links, services and software that Amazon.com could not build itself Looking to transform from a retailer into an e commerce platform In short = it is using Web Services to rejuvenate its data, giving it a strategic role via XML ©2006 Barbara C. McNurlin. Published by Pearson Education.
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5.
Rearchitect the System: House = rethinking the use of space by house and remodelling it This option involves having a to-be systems Previously not seen as necessary, IT architectures = now mandatory their enterprise to that desired to-be ©2006 Barbara C. McNurlin. Published by Pearson Education.
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This car manufacturer began building an IT architecture by creating a standard, integrated application development environment in order that all systems would be developed in the same way The chief architect then used her budget to describe the as-is architecture of Toyota’s six largest systems Then Toyota defined the global to-be architecture ◦ Which was used to convince the business that remediating some pieces of a legacy system would both upgrade the system and move it toward the to-be architecture and would cost a lot less than full replacement ◦ ◦ ◦ The architecture thus helped the company: ◦ Remediate legacy systems Keep systems designs robust Deliver applications faster, and Permit future flexibility ©2006 Barbara C. McNurlin. Published by Pearson Education.
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6.
7.
◦ ◦ ◦ ◦ Replace with a Package or Service: to move an old application to a new operating environment, e.g.: centralized to distributed, e.g., SAP This alternative has become the norm; another option, one being touted as “the future,” is to replace a system with a service delivered over the Internet House = move! Rewrite the System: risk failure if too far gone to rescue, obsolete technology; beware of true cost and RARE! = only ‘specialized’. Normally = go for a package House = knock down and build a new one ©2006 Barbara C. McNurlin. Published by Pearson Education.
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◦ ◦ ◦ Large US bank Contact management system (sales) ◦ Original programmers had left bank ◦ Being maintained by consultants Did not work with newer bank systems So inflexible = did not support the bank’s newer sales processes Sales force had work-arounds and only used it to record basic customer information once they had closed a sale Decided to replace with a full CRM ◦ Looked at various CRM packages ◦ Expensive and time-consuming Saw and ‘purchased’ Web-based pay by use CRM (Salesforce.com) Up an running in 6 weeks Costs basically the same as maintenance costs for the old system Extensively used Provides necessary management information ©2006 Barbara C. McNurlin. Published by Pearson Education.
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◦ ◦ Measuring the value of Information Systems seems to be a continuing request ◦ Never mind that the Internet has changed the world or that e-commerce and e-business are impossible without computers Executives want specific links between new systems and corporate financial measures e.g.
◦ Increase in earnings Shareholder value Revenue ©2006 Barbara C. McNurlin. Published by Pearson Education.
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Achieving this is very difficult because IT is only one of many factors contributing to the successful use of systems ◦ e.g. the value of decision support systems and data warehouses are difficult to measure because they are intended to change such un measurable actions as: Improved decisions Better identification of opportunities More thorough analysis Enhanced communication among people ©2006 Barbara C. McNurlin. Published by Pearson Education.
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E-commerce systems, which aim to improve a firm’s competitive edge or protect its market share, also elude measurement ◦ New market systems How do you calculate ROI?
Infrastructure investments (upon which future applications will be built) often cannot be justified on ROI because they have none!
Can’t however just say “it’s too hard” Three (of many!) suggestions on how to deal with these measurement dilemmas: 1.
Distinguish between the different roles of systems 2.
3.
Measure what is important to management Assess investments across organizational levels ©2006 Barbara C. McNurlin. Published by Pearson Education.
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Information systems can play three roles in a company: 1.
2.
3.
Help other departments do their job better: efficiency “support systems” with the goal to increase organizational Carry out a business strategy: custom products customers e.g. CAD systems that customers and suppliers can use together to design Differ from support systems because they are used by As a product or service as the basis for a product or service: e.g. testing or design software that a company sells to another firm Measuring the benefits of these three kinds of systems differs ©2006 Barbara C. McNurlin. Published by Pearson Education.
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1.
2.
3.
◦ ◦ ◦
Measuring Organizational Performance:
◦ Meeting deadlines and milestones Operating within budget Doing quality work Performance measures internal efficiency of operations
Measuring Business Value:
Deals with marketplace goals They must have a direct impact on the company’s relationships with customers, clients, or suppliers; e.g. sales/customer ◦
Measuring a Product or Service:
An IS offered as a product or service to produce revenue = measured as any other business venture e.g. by ROI ©2006 Barbara C. McNurlin. Published by Pearson Education.
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◦ ◦ IS support can only be linked to corporate effectiveness by finding all the indicators management use, besides the traditional financial ones Measure in terms like: ◦ Customer relations (incl. satisfaction) Employee morale “Cycle time” How long to accomplish a complete assignment; fast cycle time might mean higher-quality products, beating competitors to the market, winning a bid, etc.
©2006 Barbara C. McNurlin. Published by Pearson Education.
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◦ ◦ IT benefits cross organizational levels, sources of value at three levels: ◦ Individual ◦ ◦ Division Corporation Impact focus of an IT investment extends to ◦ Economic performance payoffs - market measures of performance Organizational process impacts - process change Technology impacts - key functionality Combine views to form a 3 x 3 matrix Used by a trucking firm who uncovered benefits that otherwise would have gone unrealized ©2006 Barbara C. McNurlin. Published by Pearson Education.
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Small trucking company in the refrigerated carrier business, experienced 50% loss in market share $10M investment in IT to differentiate itself and manage the company by information. Installed satellite system and computer in each truck to be in constant communication with customers Measures: ◦ Driver productivity up by .5 hr./day (BIG $$) ◦ ◦ Improved load truck matching 1% deadhead time Customers willing to pay premium for ability to communicate - unexpected revenue benefits ©2006 Barbara C. McNurlin. Published by Pearson Education.
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computers yielded up to $17 in stock ◦ Whereas, $1 invested in property, plant, and ◦ stock market value; and liquid assts, and accounts receivables) yielded ©2006 Barbara C. McNurlin. Published by Pearson Education.
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The researchers reason that investors value $1 spent on computers more than the other investments because it leads to organizational changes that create $16 worth of “intangible assets” – know-how, skills, organizational structures, and such Investments in “organizational capital” generally lead to adopting decentralized work practices: ◦ Using teams more often ◦ ◦ Giving employees broader decision-making authority, and Offering more employee training Firms with these three decentralized work practices had a market value of 8 percent higher than the mean ©2006 Barbara C. McNurlin. Published by Pearson Education.
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Managing projects has always been one of the most important, and toughest, jobs in the IS organization Even with outsourcing and software packages, project management belongs in-house because responsibility for project success remains in house Project management skills = critical People job in system development: ◦ Managing development staff ◦ Helping people adjust to the organizational changes that occur with a new system Successfully implementing systems: ◦ Sponsors understand their role in enforcing change – giving change agents the tools & skills to foster the change ◦ Assisting the targets in making the change – providing training etc.
©2006 Barbara C. McNurlin. Published by Pearson Education.
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Software – difficult to keep up-to-date: ◦ Variety of options (refurbish etc.) as well as replacing it with a ◦ ◦ package New alternative = rearchitect the system toward a desired “to be” architecture “Rent” software off the Web, per seat, per month ©2006 Barbara C. McNurlin. Published by Pearson Education.
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