11.1

LEARNING OBJECTIVES

• •

DEMONSTRATE HOW BUILDING NEW SYSTEMS CAN PRODUCE ORGANIZATIONAL CHANGE COMPARE ROLE OF COMPUTER IN TOTAL QUALITY MANAGEMENT, BUSINESS PROCESS REENGINEERING *

11.2

LEARNING OBJECTIVES

• • •

EXPLAIN HOW ORGANIZATION CAN DEVELOP SUITABLE INFO SYSTEMS IDENTIFY CORE ACTIVITIES IN SYSTEMS DEVELOPMENT PROCESS EVALUATE MODELS FOR DETERMINING BUSINESS VALUE OF INFO SYSTEMS

11.3

*

MANAGEMENT CHALLENGES

•

SYSTEMS AS PLANNED ORGANIZATIONAL CHANGES

• •

SYSTEMS DEVELOPMENT & ORGANIZATIONAL CHANGES

•

OVERVIEW OF SYSTEMS DEVELOPMENT UNDERSTANDING BUSINESS VALUE OF INFO SYSTEMS

11.4

*

INFORMATION SYSTEMS PLAN

• •

CHALLENGES: RISKS AND UNCERTAINTIES IN SYSTEMS DEVELOPMENT BENEFITS LARGELY INTANGIBLE *

11.5

INFORMATION SYSTEMS PLAN

• • • • •

DIRECTION OF SYSTEM DEVELOPMENT: RATIONALE CURRENT SITUATION MANAGEMENT STRATEGY IMPLEMENTATION PLAN BUDGET *

11.6

INFORMATION SYSTEMS PLAN

• • • • •

1. PURPOSE OF THE PLAN: OVERVIEW OF PLAN CONTENTS CHANGES IN CURRENT SITUATION FIRM’S STRATEGIC PLAN CURRENT ORGANIZATION MANAGEMENT STRATEGY *

11.7

INFORMATION SYSTEMS PLAN

• • • •

2. STRATEGIC BUSINESS PLAN: CURRENT SITUATION CURRENT ORGANIZATION CHANGING ENVIRONMENT MAJOR GOALS OF PLAN *

11.8

INFORMATION SYSTEMS PLAN

• •

3. CURRENT SYSTEMS: MAJOR SYSTEMS SUPPORTING BUSINESS FUNCTIONS MAJOR CURRENT CAPABILITIES

– –

HARDWARE SOFTWARE

– –

DATABASE TELECOMMUNICATIONS

•

DIFFICULTIES MEETING REQUIREMENTS

• 11.9

ANTICIPATED FUTURE DEMANDS *

INFORMATION SYSTEMS PLAN

• •

4. NEW DEVELOPMENTS: NEW SYSTEM PROJECTS

– –

PROJECT DESCRIPTIONS BUSINESS RATIONALE NEW CAPABILITIES REQUIRED

–

HARDWARE

– – –

SOFTWARE DATABASE TELECOMMUNICATIONS *

11.10

INFORMATION SYSTEMS PLAN

• • • • • • •

5. MANAGEMENT STRATEGY ACQUISITION PLANS MILESTONES & TIMING ORGANIZATIONAL REALIGNMENT INTERNAL REORGANIZATION MANAGEMENT CONTROLS MAJOR TRAINING INITIATIVES PERSONNEL STRATEGY *

11.11

11.12

ENTERPRISE ANALYSIS

(BUSINESS SYSTEMS PLANNING) ORGANIZATION-WIDE INFORMATION NEEDS IN TERMS OF:

•

ORGANIZATIONAL UNITS

•

FUNCTIONS

•

PROCESSES

•

DATA ELEMENTS HELPS IDENTIFY KEY ENTITIES & ATTRIBUTES IN ORGANIZATION’S DATA *

11.13

CRITICAL SUCCESS FACTORS (CSFs)

SMALL NUMBER, EASILY IDENTIFIABLE OPERATIONAL GOALS SHAPED BY INDUSTRY, MANAGER, ENVIRONMENT BELIEVED TO ASSURE FIRM’S SUCCESS.

USED TO DETERMINE ORGANIZATION’S INFORMATION REQUIREMENTS *

CRITICAL SUCCESS FACTORS & GOALS EXAMPLE PROFIT CONCERN GOALS EARNINGS/SHARE RETURN ON INVESTMENT MARKET SHARE NEW PRODUCT NONPROFIT EXCELLENT HEALTH CARE MEETING GOVERNMENT REGULATIONS FUTURE HEALTH NEEDS CSF AUTOMOTIVE INDUSTRY: STYLING QUALITY DEALER SYSTEM COST CONTROL ENERGY STANDARDS REGIONAL INTEGRATION WITH OTHER HOSPITALS EFFICIENT USE OF RESOURCES IMPROVED MONITORING OF REGULATIONS

11.14

USING CSFs TO DEVELOP SYSTEMS

• •

COLLECT MANAGERS’ CFCs AGGREGATE, ANALYZE INDIVIDUALS’ CSFs

•

DEVELOP AGREEMENT ON COMPANY CSFs

• •

DEFINE COMPANY CSFs USE CSFs TO DEVELOP INFORMATION SYSTEM PRIORITIES

• 11.15

DEFINE DSS & DATABASES *

SPECTRUM OF ORGANIZATIONAL CHANGE

• •

AUTOMATION: Using technology to perform tasks efficiently / effectively RATIONALIZATION OF PROCEDURES: Streamline SOPs; eliminate bottlenecks

• • 11.16

BUSINESS REENGINEERING: Radical redesign of processes to improve cost, quality, service; maximize benefits of technology PARADIGM SHIFT *

PARADIGM SHIFT

•

PARADIGM IS A COMPLETE MENTAL MODEL OF HOW A COMPLEX SYSTEM FUNCTIONS

•

A PARADIGM SHIFT INVOLVES RETHINKING THE NATURE OF THE BUSINESS, THE ORGANIZATION; A COMPLETE RECONCEPTION OF HOW THE SYSTEM SHOULD

11.17

FUNCTION *

High

RISKS & REWARDS

RISK

11.18

Low Low RETURN High

IT CAPABILITIES & IMPACTS

•

ANALYTICAL: Can bring complex analytical methods to bear on process

•

INFORMATIONAL: Makes vast amounts of detailed information available

•

SEQUENTIAL: Enables changes in sequence, parallel tasks

11.19

IT CAPABILITIES & IMPACTS

• •

KNOWLEDGE MANAGEMENT: Allows capture, dissemination of knowledge, expertise

•

TRACKING: Allows detailed tracking of task status, inputs, outputs DISINTERMEDIATION: Connects parties who otherwise depend on an intermediary

11.20

BUSINESS PROCESS REENGINEERING (BPR)

•

WORK-FLOW MANAGEMENT: Streamlining process to move documents easily, efficiently

•

REENGINEERING *

11.21

BUSINESS REENGINEERING STEPS: 1. Develop business vision, process objectives 2. Identify process to be redesigned 3. Understand, measure performance of existing processes 4. Identify opportunities for applying information technology 5. Build PROTOTYPE of new process

11.22

*

11.23

TOTAL QUALITY MANAGEMENT (TQM)

RESPONSIBILITY FOR QUALITY SHARED BY ALL PEOPLE IN ORGANIZATION *

CONTRIBUTIONS OF TQM

• •

SIMPLIFY PRODUCT OR PROCESS BENCHMARKING: Strict standards for measuring performance

• • • • 11.24

LISTEN TO CUSTOMER DEMANDS REDUCE CYCLE TIME IMPROVE DESIGN INCREASE PRECISION OF PRODUCTION *

SYSTEM DEVELOPMENT PROCESS

• • • • • •

SYSTEMS ANALYSIS SYSTEM DESIGN PROGRAMMING TESTING CONVERSION PRODUCTION & MAINTENANCE *

11.25

SYSTEMS ANALYSIS

ANALYSIS OF PROBLEM TO BE SOLVED WITH AN INFORMATION SYSTEM FEASIBILITY STUDY: CAN PROBLEM BE SOLVED WITHIN CONSTRAINTS?

*

11.26

• • •

FEASIBILITY

TECHNICAL: Assess hardware, software, technical resources ECONOMIC: Will benefits outweigh costs OPERATIONAL: Is solution desirable within existing conditions?

•

INFORMATION REQUIREMENTS: Detailed statement of new system

11.27

needs *

SYSTEM DESIGN

DETAILS HOW SYSTEM WILL MEET NEEDS:

•

LOGICAL DESIGN: Components, data as needed by applications

•

PHYSICAL DESIGN:

Physical

location of components and data *

11.28

DESIGN SPECIFICATIONS

•

OUTPUT

–

MEDIUM; CONTENT; TIMING

•

INPUT

–

ORIGINS; FLOW; DATA ENTRY

•

USER INTERFACE

–

SIMPLICITY; EFFICIENCY; LOGIC

–

FEEDBACK; ERRORS

•

DATABASE DESIGN

–

LOGICAL DATA RELATIONS

– – – 11.29

VOLUME, SPEED REQUIREMENTS FILE ORGANIZATION & DESIGN RECORD SPECIFICATIONS *

DESIGN SPECIFICATIONS

• •

PROCESSING

–

COMPUTATIONS

– – –

PROGRAM MODULES REQUIRED REPORTS TIMING OF OUTPUTS MANUAL PROCEDURES

– –

WHAT ACTIVITIES WHO PERFORMS THEM

– –

HOW WHERE *

11.30

DESIGN SPECIFICATIONS

• •

CONTROLS

–

INPUT

– – –

PROCESSING OUTPUT PROCEDURAL SECURITY

–

ACCESS CONTROLS

– –

CATASTROPHE PLANS AUDIT TRAILS *

11.31

11.32

DESIGN SPECIFICATIONS

• • •

CONVERSION

–

TRANSFER FILES

– – –

INITIATE NEW PROCEDURES SELECT TESTING MODULES CUT OVER TO NEW SYSTEM TRAINING

–

SELECT TRAINING TECHNIQUES

– –

DEVELOP TRAINING MODULES IDENTIFY TRAINING FACILITIES ORGANIZATIONAL CHANGES

–

TASK REDESIGN

– – – –

JOB DESIGN PROCESS DESIGN OFFICE / ORGANIZATION STRUCTURE DESIGN REPORTING RELATIONSHIPS *

ROLE OF END USERS

• •

USERS DRIVE SYSTEMS EFFORT MUST HAVE SUFFICIENT CONTROL TO ENSURE SYSTEM REFLECTS BUSINESS PRIORITIES, NEEDS

•

FUNCTIONAL USERS DRIVE SYSTEM NEEDS

11.33

COMPLETING SYSTEM DEVELOPMENT PROCESS

• •

PROGRAMMING: Translating needs to program code TESTING: Does system produce desired results?

*

11.34

TESTING

•

UNIT TESTING: Tests each unit separately

•

SYSTEM TESTING: Do modules function as planned?

•

ACCEPTANCE TESTING: certification Final

• 11.35

TEST PLAN: Preparations for tests to be performed *

CONVERSION

•

PARALLEL: Old & new run same problems. Give same results?

•

DIRECT CUTOVER: system Risky conversion to new

• • •

PILOT: Introduce into one area. Does it work? Yes: introduce into other area PHASED: Introduce in stages CONVERSION PLAN: Schedule for conversion

• 11.36

DOCUMENTATION: Description of how system works *

PRODUCTION & MAINTENANCE

•

PRODUCTION: Constant review by users & operators. Does it meet goals?

•

MAINTENANCE: Upkeep; Update; Corrections over time *

11.37

SYSTEMS DEVELOPMENT

CORE ACTIVITY SYSTEMS DESIGN DESCRIPTION SYSTEMS ANALYSIS IDENTIFY PROBLEM(S) SPECIFY SOLUTIONS ESTABLISH INFORMATION REQUIREMENTS PROGRAMMING CREATE LOGICAL DESIGN SPECS CREATE PHYSICAL DESIGN SPECS MANAGE TECHNICAL REALIZATION OF SYSTEM TRANSLATE DESIGN SPECS INTO PROGRAM CODE

11.38

SYSTEMS DEVELOPMENT

CORE ACTIVITY TESTING CONVERSION PRODUCTION & MAINTENANCE DESCRIPTION UNIT TEST SYSTEMS TEST ACCEPTANCE TEST PLAN CONVERSION PREPARE DOCUMENTATION TRAIN USERS & TECHNICAL STAFF OPERATE SYSTEM EVALUATE SYSTEM MODIFY SYSTEM

11.39

UNDERSTANDING BUSINESS VALUE OF INFO SYSTEMS

•

CAPITAL BUDGETING MODELS

• •

LIMITATIONS: Assume all relevant alternatives have been examined; cost & benefits can be expressed as $$ Ignore intangible benefits *

11.40

CAPITAL BUDGET:

• • • • • •

PROCESS OF ANALYZING, SELECTING CAPITAL EXPENDITURES PAYBACK METHOD RETURN ON INVESTMENT COST-BENEFIT RATIO NET PRESENT VALUE PROFITABILITY INDEX INTERNAL RATE OF RETURN *

11.41

COSTS & BENEFITS:

• • • •

COSTS: HARDWARE SOFTWARE SERVICES PERSONNEL *

11.42

COSTS & BENEFITS:

• • • • • • • •

TANGIBLE BENEFIT: INCREASED PRODUCTIVITY LOW OPERATING COSTS REDUCED WORK FORCE LOWER COMPUTER EXPENSES LOWER VENDOR COSTS LOWER CLERICAL/PROFESSIONAL COSTS REDUCED GROWTH OF EXPENSES REDUCED FACILITY COSTS *

11.43

COSTS & BENEFITS:

• • • • • • • •

INTANGIBLE BENEFIT: IMPROVED ASSET USE; RESOURCE CONTROL; PLANNING INCREASED FLEXIBILITY MORE TIMELY INFORMATION INCREASED LEARNING ATTAIN LEGAL REQUIREMENTS ENHANCED EMPLOYEE GOODWILL, JOB SATISFACTION, DECISION MAKING, OPERATIONS HIGHER CLIENT SATISFACTION BETTER CORPORATE IMAGE

11.44

*

PORTFOLIO ANALYSIS:

• • •

ANALYSIS OF POTENTIAL APPLICATIONS TO DETERMINE RISKS & BENEFITS DETERMINE DESIRABLE FEATURES, ACCEPTABLE RISKS OF REQUIRED SYSTEM GENERATE PORTFOLIO OF CHARACTERISTICS, RISKS FOR EACH ALTERNATIVE SCORING MODEL *

11.45

• • • • •

SCORING MODEL:

IDENTIFY DESIRABLE FEATURES PROVIDE WEIGHTS FOR EACH (ADD TO 1.00) LOOK AT EACH ALTERNATIVE:

–

WHICH FEATURES ARE PRESENT?

–

TO WHAT EXTENT (as an amount)?

–

SCORE THE ALTERNATIVE RANK-ORDER THE ALTERNATIVES SELECT HIGHEST RANKED OPTION *

11.46

Connect to the INTERNET

11.47

PRESS LEFT MOUSE BUTTON ON ICON TO CONNECT TO THE LAUDON & LAUDON WEB SITE FOR MORE INFORMATION ON THIS CHAPTER

11.48