Managing Is Development


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Managing Is Development

  1. 1. Managing Is Development
  2. 2. Information Systems Plan <ul><li>A road map indicating the direction of systems development, the rationale, the current situation, the management strategy, the implementation plan and the budget </li></ul>
  3. 3. Information Systems Plan <ul><li>Purpose of the Plan </li></ul><ul><li>Overview of plan contents </li></ul><ul><li>Changes in firm’s current situation </li></ul><ul><li>Firm’s strategic plan </li></ul><ul><li>Current business organization </li></ul><ul><li>Management Strategy </li></ul><ul><li>2 . Strategic Business Plan </li></ul><ul><li>Current Situation </li></ul><ul><li>Current Business Organization </li></ul><ul><li>Changing environments </li></ul><ul><li>Major goal of the business plan </li></ul>
  4. 4. Information Systems Plan <ul><li>Current Systems </li></ul><ul><li>Major supporting business functions </li></ul><ul><li>Major current capabilities </li></ul><ul><li>Difficulties meeting business requirements </li></ul><ul><li>Anticipated future demands </li></ul><ul><li>4. New Developments </li></ul><ul><li>New system projects </li></ul><ul><li>New Capabilities Required </li></ul>
  5. 5. Information Systems Plan <ul><li>5. Management Strategy </li></ul><ul><li>Acquisition plans </li></ul><ul><li>Milestones and timing </li></ul><ul><li>Organizational realignment </li></ul><ul><li>Internal reorganization </li></ul><ul><li>Management controls </li></ul><ul><li>Major training initiatives </li></ul><ul><li>Personnel strategy </li></ul><ul><li>6. Implementation plan </li></ul><ul><li>7. Budget requirements </li></ul>
  6. 6. <ul><li>Business System Planning </li></ul><ul><li>enterprise analysis: An analysis of organization-wide information requirements by looking at the entire organizational units, functions, processes, and data elements </li></ul><ul><li>Strategic Analysis </li></ul><ul><li>critical success factors: A small number of easily identifiable operational goals shaped by the industry, the firm, the manager, and the broader environment </li></ul>
  7. 7. Critical Success Factors and Organizational Goals (Table 11.2) Regional integration with other hospitals Efficient use of resources Improved monitoring of regulations Excellent healthcare Meeting government regulations Future health needs Nonprofit Automotive industry Earnings / share Returns on investment Market share New product Profit concern <ul><ul><li>CSF </li></ul></ul>Goals Example
  8. 8. Using CFSs to develop systems
  9. 9. System Development and Organizational Change
  10. 10. IT capabilities & their Organizational Impacts IT can be used to connect two parties who would otherwise communicate through an intermediary Disintermediation IT allows the detailed tracking of task status, inputs, and outputs Tracking IT allows the capture and dissemination of knowledge and expertise to improve the process Knowledge Management IT can enable changes in the sequence of tasks Sequential IT can bring vast amount of detailed information Informational IT can bring complex analytical methods Analytical IT can replace or reduce human labor in a process Automational IT can transfer information with rapidity and ease across large distances Geographical IT can transform unstructured processes into routinized transactions Transactional Organizational Impact / Benefit Capability
  11. 11. Steps in Business Reengineering <ul><li>Develop the business vision and process objectives </li></ul><ul><li>Identify the process to be redesigned </li></ul><ul><li>Understand and measure the performance of existing processes </li></ul><ul><li>Identify the opportunities for applying information technologies </li></ul><ul><li>Build a prototype of the new process </li></ul>
  12. 12. <ul><li>Automation: Using computer to speed up existing tasks </li></ul><ul><li>Rationalization of procedures: streamline procedures, eliminate bottlenecks </li></ul><ul><li>Business reengineering: Radical redesigning of business processes, combining steps to cut waste, eliminate repetitive tasks to improve cost, quality and maximize the benefits </li></ul><ul><li>Paradigm shift: Radical reconceptualization of the nature of the business and organization </li></ul>
  13. 13. Redesigning the Business Process <ul><li>A set of logically related tasks performed to achieve a defined business outcome </li></ul><ul><ul><li>Combine steps </li></ul></ul><ul><ul><li>Eliminate repetitive steps </li></ul></ul><ul><ul><li>Paralellization of steps </li></ul></ul>
  14. 14. Before Reengineering Desk-to-desk approach
  15. 15. After Reengineering
  16. 16. Total Quality Management (TQM) <ul><li>TQM: A concept that makes quality control a responsibility to be shared by all people in an organization </li></ul><ul><li>IS contributes to TQM: </li></ul><ul><ul><li>Simplifying the product & production </li></ul></ul><ul><ul><li>Benchmarking: Setting strict standards for products, services or activities and measuring organizational performance against those standards </li></ul></ul><ul><ul><li>Use customer demand as a guide to improve product and services </li></ul></ul><ul><ul><li>Reduce cycle time </li></ul></ul><ul><ul><li>Improve the quality and precision of design </li></ul></ul><ul><ul><li>Increase the precision of products </li></ul></ul>
  17. 17. System Development <ul><li>System Development: The activities that go into producing an information systems solution to an organizational problem or opportunity </li></ul><ul><li>Systems analysis: The analysis of a problem that the organization will try to solve with an information system </li></ul>
  18. 18. Feasibility <ul><li>Determining whether a solution is achievable given the organizational resources & constraints </li></ul><ul><ul><li>Technical: Available technical resources </li></ul></ul><ul><ul><li>Economic: costs vs. benefits ? </li></ul></ul><ul><ul><li>Operational: fits the organization ? </li></ul></ul>
  19. 19. Information Requirements <ul><li>A detailed statement of the information needs that a new system must satisfy </li></ul><ul><li>Who needs what information, when, how? </li></ul><ul><li>Basis for the system design: details how a new system will meet requirements </li></ul><ul><ul><li>Logical design: Lays out the components of the information system and their relationship to each other as they would appear to users </li></ul></ul><ul><ul><li>Physical design: The process of translating the abstract logical model into the specific technical design for the new system. </li></ul></ul>
  20. 20. Design Specifications <ul><li>Output: medium, content, timing </li></ul><ul><li>Input: origins, low, data entry </li></ul><ul><li>User interface: simplicity, efficiency, logic </li></ul><ul><li>Database design: logical data relations </li></ul><ul><li>Processing: computations, program modules </li></ul><ul><li>Manual procedures: activities, performers, when </li></ul><ul><li>Controls: input, processing, output, procedural </li></ul><ul><li>Security: access, catastrophe plans, audit trails </li></ul><ul><li>Documentation: operations, systems, user </li></ul><ul><li>Conversion: transfer files, new procedures </li></ul><ul><li>Training: techniques, modules, facilities </li></ul><ul><li>Organizational changes: task, job, process redesigns </li></ul>
  21. 21. Programming <ul><li>Testing: Determining whether the system procedures the desired results </li></ul><ul><ul><li>Unit testing: Each program separately </li></ul></ul><ul><ul><li>System testing: The whole system </li></ul></ul><ul><ul><li>Acceptance testing: Final certification that the system is ready </li></ul></ul><ul><li>Test plan: Preparation of tests and the order in which they will be carried </li></ul>
  22. 22. Conversion <ul><li>The process of changing from the old system to the new system </li></ul><ul><ul><li>Parallel strategy: old and new system run together </li></ul></ul><ul><ul><li>Direct cutover strategy: The new system replaces the old system completely </li></ul></ul><ul><ul><li>Pilot study strategy: Limited area of the organization </li></ul></ul><ul><ul><li>Phased approach strategy: Either by functions or by organizational units </li></ul></ul><ul><li>Conversion plan: A schedule of all activities to install a new system </li></ul><ul><li>Production: The stage after the new system is installed </li></ul><ul><li>Maintenance: Changes in hardware, software, documentation, or procedures </li></ul>
  23. 23. Value of Information Systems <ul><li>Tangible Benefits </li></ul><ul><ul><li>Cost savings: </li></ul></ul><ul><ul><ul><li>Increased productivity </li></ul></ul></ul><ul><ul><ul><li>Low operational costs </li></ul></ul></ul><ul><ul><ul><li>Reduced work force </li></ul></ul></ul><ul><ul><ul><li>Lower computer expenses </li></ul></ul></ul><ul><ul><ul><li>Lower vendor costs </li></ul></ul></ul><ul><ul><ul><li>Reduced facility costs </li></ul></ul></ul><ul><li>Intangible Benefits </li></ul><ul><ul><ul><li>Improved asset utilization </li></ul></ul></ul><ul><ul><ul><li>Improved resource control </li></ul></ul></ul><ul><ul><ul><li>Improved organizational planning </li></ul></ul></ul><ul><ul><ul><li>More timely information </li></ul></ul></ul><ul><ul><ul><li>More information </li></ul></ul></ul><ul><ul><ul><li>Increased organizational learning </li></ul></ul></ul><ul><ul><ul><li>Legal requirements attained </li></ul></ul></ul><ul><ul><ul><li>Enhanced employee goodwill </li></ul></ul></ul><ul><ul><ul><li>Increased job satisfaction </li></ul></ul></ul><ul><ul><ul><li>Improved operations </li></ul></ul></ul><ul><ul><ul><li>Higher client satisfaction </li></ul></ul></ul><ul><ul><ul><li>Better corporate image </li></ul></ul></ul><ul><li>Costs: Hardware, Telecom, Software, Services Personnel </li></ul>
  24. 24. Managing Change <ul><li>Portfolio Analysis: An analysis of the portfolio of potential applications within a firm to determine the risks and benefits and select among alternatives for information systems </li></ul><ul><li>Scoring Model: A quick method for deciding among alternative systems based on a system of ratings for selected objectives </li></ul>
  25. 25. Scoring Model Scale 1=low, 5=high 4.0 3.2 1.9 Total score 4 4 3 0.10 Chances of success 4 3 2 0.10 Ease of maintenance 4 3 1 0.10 Financing 4 3 1 0.20 Cost of initial purchase 4 3 2 0.40 User needs met Alternative 3 Alternative 2 Alternative 1 Weight Criterion
  26. 26. Cost and Benefit Analysis (Figure 11.7) 658,500 658,500 643,500 658,500 388,500 (615,000) Net Cashflow 1,150,000 1,150,000 1,150,000 1,150,000 880,000 595,000 Total Benefits 491,500 491,500 506,500 491,500 491,500 1,210,500 Total Cost 2004 2003 2002 2001 2000 1999 Year 5 Year 4 Year 3 Year 2 Year 1 Year 0
  27. 27. Cost and Benefit Analysis (Figure 11.7) <ul><li>The Payback Method: A measure of the time required to pay back the initial investment of a project. </li></ul><ul><li>Accounting Rate of Return on Investment (ROI): Calculation of the rate of return from an investment by adjusting cash inflows </li></ul>
  28. 28. Cost and Benefit Analysis (Figure 11.7) <ul><li>Present Value: The value, in current dollars, of a payment or stream of payments to be received in the future </li></ul><ul><li>Cost-Benefit Ratio: A method for calculating the returns from a capital expenditure by dividing total benefits by total costs (1.65) </li></ul>
  29. 29. Cost and Benefit Analysis (Figure 11.7) <ul><li>Profitability Index: Used to compare the profitability of alternative investments </li></ul><ul><li>Internal Rate of Return (IRR): The rate of return or profit that an investment is expected to earn </li></ul>
  30. 30. Management Challenges <ul><li>Major risks and uncertainties in system development </li></ul><ul><li>Determining the benefits of a system when they are largely intangible </li></ul><ul><li>Developing an effective information systems plan </li></ul>