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SA Chapter 4
 

SA Chapter 4

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SA Chapter 4

SA Chapter 4

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  • What is the first one?
  • GENERIC information systems planning methodology exploded detail of planning circle from previous slide difficult if business or unit does not have well-articulated mission and goals statement. This is fundamental to doing is planning 1st: study and revise business mission and goals, not really change it but modify it to fit current project. Senior management must be willing to participate in identification and articulation of mission and goals. Deliverable: business plans. See next slide (4) 2nd: create information architecture see slide 5.
  • Pg 330 Purpose to identify and prioritize the information systems applications whose development and implementation would most benefit the business as a whole organizations that have ongoing, rigorous, and formalized information systems planning activity usually separate this activity from the analysis activity organizations that focus their planning activities primarily on project (detail) level planing usually incorporate their planning activity as part of Analysis input to information systems planning are existing information system details along with business’s current mission and goals output is information systems plans and projects - become input to analysis phase is planning is an ongoing activity which must be repeated frequently to ensure that information systems continue to be developed according to the is plan, and to update the process with any changes that are occurring due to management decision or other external business factors. Frequency varies, at least once a quarter
  • WHy ? If you have the baht now, you can invest it and it will grow in value.
  • WHy ? If you have the baht now, you can invest it and it will grow in value.
  • WHy ? If you have the baht now, you can invest it and it will grow in value.
  • WHy ? If you have the baht now, you can invest it and it will grow in value.
  • WHy ? If you have the baht now, you can invest it and it will grow in value.
  • WHy ? If you have the baht now, you can invest it and it will grow in value.

SA Chapter 4 SA Chapter 4 Presentation Transcript

  • Phase 1 :Systems Planning บทที่ 4
  • บทที่ 4 Phase 1 : Systems Planning
    • เพื่อให้นักศึกษาเข้าใจเกี่ยวกับ :
    • แผนกลยุทธ์ ความสำคัญและความสัมพันธ์ของแผนกลยุทธ์ที่มีต่อเทคโนโลยีสารสนเทศขององค์กร
    • กระบวนการเริ่มต้นในการจัดทำระบบสารสนเทศ
        • การกำหนดและคัดเลือกระบบ (Identifying and selecting projects)
        • การเริ่มต้นและวางแผนโครงการ ( Initiating and planning systems development projects)
          • การสำรวจเบื้องต้น (Preliminary investigation / Feasibility study )
          • Cost-Benefit Analysis
    • เนื้อหาที่จะเรียนในครั้งนี้ :
      • Corporate Planning and Information Systems Planning
        • Vision
        • Mission
        • Objectives
      • T he process of Identifying and selecting IS projects
      • Initiating and planning systems development projects
        • Feasibility study
        • Cost-benefit analysis
    หัวข้อการบรรยาย
  • Information Systems Planning Corporate Strategic Planning
    • Without careful planning , organizations may construct databases and systems that support individual processes but do not be shared throughout the organization.
  • 1. Corporate Strategic Planning
    • An ongoing process that defines the mission, objectives, and strategies of an organization.
    • A prerequisite to mak e effective project selection decisions is to gain a clear idea of where an organization is, its vision of where it wants to be in the future, and how to make it true.
  • Corporate strategic planning is a three-step process
    • Step 1 : know where you are
    • Step 2 : where we want to be
    • Step 3 : develop a strategic plan to guide the transition
    Current Enterprise Future Enterprise Strategic Plan
  • Mission statement
    • Mission statement : A statement that makes it clear what business a company is in
    • During corporate strategic planning , executives develop a mission statement
    • All successful organizations have a mission
  • Objective statements
    • A series of statements that express an organization’s qualitative and quantitative goals for reaching a desired future position.
    • Are often referred to as “critical success factor”
  • Sample
    • Broadway Entertainment Company (BEC)
    • Mission : BEC is a publicly held, for-profit organization focusing on the home entertainment industry that has a global focus for operations. BEC exists to serve customers with a primary goal of enhancing shareholders’ investment through the pursuit of excellence in everything we do. BEC will operate under highest standard; will respect dignity, rights, and contributions of all employees; and will strive to better society.
    • Objectives : 1. BEC will increase market share and profitability.
    • 2. BEC will be a leader in all areas of our business – human resources, technology, operations, and marketing.
    • 3. BEC will be cost-effective in use of all resources.
    • 4. BEC will be innovative in the use of technology to help bring new products and services to market faster than our competition and to provide better service to our customers.
    • A n orderly means of assessing the information needs of an organization and defining the systems, databases, and technologies that will best satisfy those needs
    2. Information Systems Planning
  • Information Systems Planning Business Mission & Goals Existing Information System Details Information Systems Plans and Project Information Revise and Study the Business Mission & Goals Define an Information Architecture A Generic Information Systems Planning Methodology (Adapted from Whitten, J.L., Bently, L.D., and Barlow, V.M., Systems Analysis & Design Methods, 3rd Edition, Irwin, Boston, MA., 1994, p. 103.) Evaluate Business Areas and Applications Business Plans Business Areas and Applications Note: Dotted line symbols are optional
  • Stakeholder Requirements Specification Information Technology Staff Analysis Design and Implementation Requirements Continued Involvement Information System Problem Definition Skills Problem Solution Skills Information Systems Planning Inputs & Outputs Information Systems Planning Business Mission & Goals Existing Information System Details Information Systems Plans and Project Information
  • ขั้นตอนการทำแผนแม่บทสารสนเทศ Existing Information Systems Details Business missions and goals & (Business areas and applications)
    • ศึกษาสถานการณ์ปัจจุบันขององค์กร ( Current situation)
    • 1. จัดทำรายการต่างๆ ได้แก่ :
      • a list of people
      • a list of functions
      • a list of information
      • a list of process
    • 2. จัดทำ decomposition of functions
    • 3. จัดทำ ตารางแสดงความสัมพันธ์ (a series of matrices)
  • ตัวอย่าง การจัดทำรายการต่างๆ
  • ตัวอย่าง การจั ดทำ decomposition of functions
  • ตารางแสดงความสัมพันธ์ (a series of matrices) A series of matrices is used to a clear understanding of current situation and to plan for future situation ได้แก่ :
    • location-to function
    • function-to-objective
    • function-to-process
    • function-to-data entity
    • process-to-data entity
    • process-to-information system
    • data entity-to-information system
    • information system-to-objective
    • information system-to-benefit
    • information system-to-size
  • ตัวอย่าง การจัดทำตารางแสดงความสัมพันธ์
  • ตัวอย่าง การจัดทำตารางแสดงความสัมพันธ์
    • สถานการณ์ในอนาคตขององค์กร (Future situation)
    • 1. ศึกษา target situation, trends, and constraints
    • 2. Update list ต่างๆได้แก่
      • a list of people
      • a list of functions
      • a list of information
      • a list of process
    • 3. Update ตารางแสดงความสัมพันธ์ (a series of matrices)
    • จัดทำแผน ( Developing a transition strategy and plans)
  •  
    • I S development projects should be identified and selected only through the clear understanding of the organization mission, objectives and strategies
    IS development projects
  • Competitive strategy
    • Lower-cost producer
    • Product Differentiation
    • Product focus or Niche (much narrower market focus)
    Organization employing different competitive strategies have different information needs
    • ให้นักศึกษาตั้งคำถามที่เกี่ยวข้องกับบทเรียนกลุ่มละ 2 คำถาม และคำถามที่ไม่เกี่ยวข้องกับบทเรียนกลุ่มละ 1 คำถามเขียนคำตอบใส่กระดาษ ( กลุ่มละ 8 – 9 คน รวม 6 กลุ่ม )
    • ตัวแทนกลุ่มผลัดกันถามคำถามหน้าชั้นเรียน ทีละ 2 กลุ่ม เก็บคะแนนแต่ละคำถามถ้าตอบถูกได้ 1 แต้ม กลุ่มใดได้คะแนนสูงสุดเป็นผู้ชนะ
    กิจกรรม
  • อธิบายกิจกรรมกลุ่ม
    • แสดงให้เห็นความสำคัญของการวางแผนในการแก้ไขปัญหา
      • การแก้ไขปัญหาที่อยู่ในแผนที่มีการเตรียมการหรือมีข้อมูลไว้แล้วทำได้ง่าย ( ตอบได้ / รู้คำตอบ )
      • การแก้ไขปัญหาที่ไม่ได้อยู่ในแผนหรือไม่ได้เตรียมการไว้เป็นไปแบบไร้ทิศทางจะยุ่งยากและต้องอาศัยไหวพริบและประสบการณ์มากกว่า
  • Phase 1 :Systems Planning
  •  
  •  
  •  
  •  
  • Phase 1: Systems Planning
        • 1.1 การกำหนดและคัดเลือกระบบ
        • (Identifying and selecting systems development projects)
        • 1.2 การเริ่มต้นและวางแผนโครงการ
        • ( Initiating and planning systems development projects)
  • งานที่ต้องทำใน Phase 1: Systems Planning
  • การกำหนดและคัดเลือกระบบ (Project Identification and Selection)
  • ขั้นตอนการกำหนดและคัดเลือกโครงการ
    • Identifying potential development projects
    • Classifying and ranking projects
    • Selecting projects for development
    • คำร้องขอ (Systems Request)
      • ดำเนินการปรับปรุงเปลี่ยนแปลงเพื่อแก้ไขปัญหา
      • ที่เกิดขึ้นในการทำงาน
      • เพิ่มเติมความต้องการที่เกิดจากการใช้งานปัจจุบัน เพิ่ม features ใหม่ๆ
      • แก้ไขข้อผิดพลาดของระบบ
      • ร้องขอระบบงานใหม่
    1. Identifying potential development projects
    • This process can be performed by :
    • Top Management Greater strategic focus, Largest project size
    • Steering committee Cross-function focus, Greater organization change
    • Formal cost-benefit analysis
    • User department Narrow, non strategic focus, Faster development
    • Fewer users management layers and business functions
    • Development Group Integration with existing systems focus
    • Fewer development delays
    • Less concern on cost-benefit analysis
    Sources of Information Systems Project
  • 2. Classifying and ranking projects
    • Possible evaluation criteria when classifying and ranking projects
    • Value Chain Analysis Extent to which activities add value and costs when developing products and/or services
    • Strategic Alignment Extent to which the project is viewed as helping the organization achieve its strategic objectives
    • Potential Benefits Extent to which the project is viewed as improving profits, customer services and so forth and the duration of these benefits
  • Classifying and ranking projects
    • Possible evaluation criteria when classifying and ranking projects(cont.)
    • Resource Availability Amount and type of resources the project requires and their availability
    • Project Size/Duration Number of individuals and the length of time needed to complete the project
    • Technical Difficulty/Risks Level of technical difficulty to successfully complete the project within given time and resource constraints
  • 3. Project selection
  • การเริ่มต้นและวางแผนโครงการ (Project Initiation and Planning)
  • Project Initiation
    • Type of activities that may be performed :
    • Establish project initiation team
    • Establish a relationship with users
    • Establish management procedure
    • Step 1 : ทำความเข้าใจกับปัญหา (Understand the problem)
    • Step 2 : กำหนดขอบเขตและข้อจำกัด
    • (Define the project scope and con straints)
    • Step 3 : รวบรวมข้อเท็จจริงและความต้องการ
    • (Perform Fact-finding to gather required information)
    • Step 4 : พิจารณาความเป็นไปได้ (Determining Feasibility)
    • Step 5 : ประมาณการระยะเวลาและค่าใช้จ่าย
    • (Estimate time and cost to continue development)
    • Step 6 : จัดทำรายงาน preliminary investigation report และนำเสนอ ข้อเสนอแนะแก่ผู้บริหาร
    • ( Generate the preliminary investigation report and
    • Present results and recommendations to management)
    Project Planning
  • Determining Feasibility
    • Economic Feasibility :
    • to identify the financial benefits and costs associated with the development project
    • It is often referred to as cost-benefit analysis
    • During systems planning phase SA may not precisely define all benefits and costs
  • Economic Feasibility : Determining project benefits
    • Tangible benefits :
    • refer to items that can be measured in value of money – baht, dollars
    • Most tangible benefits fit within the following categories :
    • 1. Cost reduction and avoidance
    • 2. Error reduction
    • 3. Increased flexibility
    • 4. Increased speed of activity
    • 5. Improvement of management planning and control
    • 6. Opening new markets and increasing sales opportunities
  • Economic Feasibility : Determining project benefits
  • Economic Feasibility : Determining project benefits
    • Intangible benefits :
    • refer to items that can not easily measured in value of money
    • Examples of intangible benefits :
    • 1. Competitive necessity 2. More timely information
    • 3. Improved organization planning 4. Faster decision making
    • 5. Improved resource control 6. Positive impacts on society
    • Tangible benefits may be considered intangible during systems planning phase since SA may not be able to quantify them in term of money at this stage. During later stage, such intangibles can become tangible benefits as SA better understand, in this case the business can revised to justify continuation of the project to the next phase
  • Economic Feasibility : Determining project costs
    • Tangible costs :
    • refer to items that can easily measured in value of money
    • Examples of intangible costs :
    • 1. hardware costs
    • 2. Labor costs
    • 3. Operation costs e.g. employee training, building renovations
    • Intangible costs :
    • refer to items that can not easily measured in value of money
    • Examples of intangible costs :
    • 1. Loss of customer goodwill
    • 2. Loss of employee morale
    • 3. Operational inefficiency
  • Economic Feasibility : Determining project costs
    • One-time costs :
    • A cost associated with project start-up and development, or system start-up
    • Examples of one-time costs :
    • 1. new hardware and software purchases
    • 2. User training
    • 3. Site preparation
    • Recurring costs :
    • A cost resulting from the ongoing evaluation and use of the system
    • Examples of recurring costs :
    • 1. Application software maintenance
    • 2. New hardware and software lease
    • 3. Supplies and other expenses e.g. paper, forms
  • Economic Feasibility : Determining project costs
  • Economic Feasibility : Determining project costs
  • Commonly used economic cost-benefit analysis
    • The Payback Method
    • Measure of time required to pay back the initial investment on a project
    • Accounting Rate of Return on Investment (ROI)
    • Approximates the accounting income earned by the investment
    • ROI is the ratio of the net cash receipts of the project divided by the cash outlays of the project
  • Commonly used economic cost-benefit analysis
    • Present value
    • Value of a payment or stream of payments to be received in baht, dollars, etc.
    • Net present value
    • Amount of money an investment is worth
    • NPV uses a discount rate determined from the company’s cost of capital to establish the present value of a project
  • Cost-Benefit Analysis
    • Cost-benefit analysis is performed throughout the SDLC to determine the economical feasibility of an information system project and to compare alternative solutions.
  • Commonly used economic cost-benefit analysis Payback Analysis
    • is the process to determining how long it takes an information system to pay for itself.
    • The time it takes to recover the system’s is called the payback period .
  • Commonly used economic cost-benefit analysis Payback Analysis (39000-22000)= 17000 (135700-132000) =3700 17000 12 3700 (12*3700) /17000 = 2.6 213,000 42,000 181,000 23,300 6 171,000 39,000 157,700 22,000 5 132,000 36,000 135,700 21,000 4 96,000 34,000 114,700 19,200 3 62,000 31,000 95,500 18,500 2 31,000 28,000 77,000 18,500 1 3,000 3,000 60,000 60,000 0 Benefits Costs Cumulative Benefits Cumulative Costs Year Project A : Payback period is approximately 4.2 years
  • Commonly used economic cost-benefit analysis Payback Analysis (82000-26500) = 55500 (191000-156000) =35000 55500 12 35000 (12*35000) /55500=7.5 330,000 92,000 247,500 30,000 6 238,000 82,000 217,500 26,500 5 156,000 70,000 191,000 24,000 4 86,000 54,000 167,000 22,000 3 32,000 26,000 145,000 25,000 2 6,000 6,000 120,000 40,000 1 0 0 80,000 80,000 0 Benefits Costs Cumulative Benefits Cumulative Costs Year Project B : Payback period is approximately 4.7 years
  • Commonly used economic cost-benefit analysis Payback Analysis
  • Brake-even point
  • Commonly used economic cost-benefit analysis Payback Analysis
    • Payback Analysis places all emphasis on early costs and benefits and ignores the benefits received after payback period
    • Payback period of project A is less than Project B’s but the benefit for project B in year 6 is 50,000 higher than project A
      • Thus payback analysis uses the most reliable of your cost and benefit estimates. The more you extend your projections the more unsure your forecast will be.
      • Payback analysis rarely is used to compare or rank projects or alternatives because later benefits are ignored. Considering all costs and all benefits when comparing projects make more sense.
  • Commonly used economic cost-benefit analysis Return on Investment Analysis (ROI) ROI is a percentage rate that measures profitability by comparing the total net benefits received from the project to the total costs (the investment) of the project. ROI = (total benefits – total costs) / total costs Project A: ROI = (213,000 – 181,000) / 181,000 = 17.7% Project B: ROI = (330,000 – 247,500) / 247,500 = 33.3%
  • Commonly used economic cost-benefit analysis Return on Investment Analysis
    • Projects must meet or exceed a minimum ROI which an organization set. The minimum ROI can be estimated of the return the organization would received from other investments opportunities.
    • In the example case,
      • if a minimum ROI is set as 15% both project A and project B would meet the criterion.
      • If project A and B represent two different proposed solutions for a single information systems project the solution represented by project B is better.
      • if project A and B represent two different projects and an organization has to choose only one project then project B is the better choice.
  • Commonly used economic cost-benefit analysis Return on Investment Analysis
    • ROI measures the overall rate of return for the total period
    • and the annual return rates can vary considerably
    • The project with the same ROI might not be equally desirable if the benefits of one project occur significantly earlier than the benefits of the others project
  • Commonly used economic cost-benefit analysis Present Value Analysis A baht you have today is worth more than a baht you do not receive until one year from today The present value of a future baht is the amount of money that, when invested today at a specified interest rate, grows to exactly one baht at a certain point in the future. The specified interest rate is called the discount rate .
  • Commonly used economic cost-benefit analysis Present Value Analysis Present value tables : help us to perform present value analysis, adjustment factors for various interests rates and number of years are calculated and printed in tables call present value tables . PERIODS 6% 8% 10% 12% 14% 1 0.943 0.926 0.909 0.893 0.877 2 0.890 0.857 0.826 0.797 0.769 3 0.840 0.794 0.751 0.712 0.675 4 0.792 0.735 0.683 0.636 0.592 5 0.747 0.681 0.621 0.567 0.519 … … . …. …. ….. ….
  • Commonly used economic cost-benefit analysis Present Value Analysis . PERIODS 6% 8% 10% 12% 14% 1 0.943 0.926 0.909 0.893 0.877 2 0.890 0.857 0.826 0.797 0.769 3 0.840 0.794 0.751 0.712 0.675 4 0.792 0.735 0.683 0.636 0.592 5 0.747 0.681 0.621 0.567 0.519 … … . …. …. ….. …. To calculate the present value of ฿ 3 ,000 at 12% for 5 years : PV = 3,000 * 0.567 = ฿ 1,701 That is – The present value of ฿ 3,000 will be ฿ 1,701 in 5 years with a discount rate of 12 %
  • Commonly used economic cost-benefit analysis Present Value Analysis PROJECT A : Present Value Analysis Year Year Year Year Year Year Year 0 1 2 3 4 5 6 Total Benefits : 3,000 28,000 31,000 34,000 36,000 39,000 42,000 PVFactor(12%) 1.000 0.893 0.797 0.712 0.636 0.567 0.507 PV 3,000 25,004 24,707 24,208 22,896 22,113 21,294 143,222 Costs: 60,000 17,000 18,500 19,200 21,000 22,000 23,300 PVFactor(12%) 1.000 0.893 0.797 0.712 0.636 0.567 0.507 PV 60,000 15,181 14,745 13,670 13,356 12,474 11,813 141,239 Net Present Value 1,983
  • Commonly used economic cost-benefit analysis Present Value Analysis PROJECT B : Present Value Analysis Year Year Year Year Year Year Year 0 1 2 3 4 5 6 Total Benefits : 0 6,000 26,000 54,000 70,000 82,000 92,000 PVFactor(12%) 1.000 0.893 0.797 0.712 0.636 0.567 0.507 PV 0 5,358 20,722 38,448 44,520 46,494 46,644 202,186 Costs: 80,000 40,000 25,000 22,000 24,000 26,500 30,000 PVFactor(12%) 1.000 0.893 0.797 0.712 0.636 0.567 0.507 PV 80,000 35,720 19,925 15,664 15,264 15,026 15,210 196,809 Net Present Value 5,377
  • Commonly used economic cost-benefit analysis Present Value Analysis
    • In theory, any project with a positive NPV is economically feasible.
    • Management typically insists on a substantially higher return for high-risk projects.
    • The project with the highest net present value is the best investment
  • Determining Feasibility
    • Technical Feasibility :
    • A process of assessing the development organization’s ability to construct a proposed system
    • Target on the hardware and software to be used as well as system size, complexity and group’s experience of similar systems
  • Determining Feasibility
    • Operational Feasibility :
    • A process of assessing the degree to which a proposed system solves business problems or takes advantage of business opportunities
    • Schedule Feasibility :
    • A process of assessing the degree to which the potential timeframe and completion dates for all major activities within a project meet organizational deadlines and constraints for affecting change
    • contains all information collected and analyzed during systems planning phase. It includes the best estimate of a project’s scope, benefits, costs, risks, feasibility assessment and resource requirements . Some text books refer to Base Line Project Plan (BPP) and Statement of Work (SOW).
    Preliminary Investigation Report :
  • Generate the preliminary investigation report Introduction: Project overview (scope, requirements, schedules, problem and constraints), Recommendation System Description: Alternatives (brief alternative system configurations), System description (describe the selected configuration) Feasibility Assessment : Economic, Technical, Operation Management Issues : Team configuration and management, Communication plan, Project Standard and Procedure, Other topics relevant
  •  
  • Generate the preliminary investigation report
    • System Description :
    • Outline possible alternative solutions which is at a very high level and only to identify the most obvious alternatives configuration solutions
    • example of alternatives solutions : 1. Accept & Continue the project
    • Purchasing of a prewritten package
    • In-house develop
    • Outsource
    • 2. Reject the project
    • 3. Delay the project
    • 4. Refocus the project
    • etc.
    • example of configuration alternatives :
    • 1. Mainframe with central database
    • 2. Distributes with decentralized databases
    • 3. Batch data input with on-line retrieval
    • etc.
  • Generate the preliminary investigation report
    • If the project is approved for whatever alternatives e.g. construction or purchase, SA will need to collect and structure information in more detailed and rigorous manner during the analysis phase and evaluate in greater depth these and other alternative directions for the system. The alternatives may changed .
    • In Systems Planning phase, the objective is only to identify the most obvious alternative solutions .
    • Please see
    • Computerize and Management