1. REDESIGNING THE ORGANIZATION WITH INFORMATION SYSTEMS
11.
REDESIGNING THE ORGANIZATION
WITH INFORMATION SYSTEMS
11.1

2. LEARNING OBJECTIVES
DEMONSTRATE HOW BUILDING NEW SYSTEMS CAN PRODUCE ORGANIZATIONAL CHANGE
COMPARE ROLE OF COMPUTER IN TOTAL QUALITY MANAGEMENT, BUSINESS PROCESS REENGINEERING *
11.2

3. 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

4. MANAGEMENT CHALLENGES
SYSTEMS AS PLANNED ORGANIZATIONAL CHANGES
SYSTEMS DEVELOPMENT & ORGANIZATIONAL CHANGES
OVERVIEW OF SYSTEMS DEVELOPMENT
UNDERSTANDING BUSINESS VALUE OF INFO SYSTEMS *
11.4

5. INFORMATION SYSTEMS PLAN
CHALLENGES:
RISKS AND UNCERTAINTIES IN SYSTEMS DEVELOPMENT
BENEFITS LARGELY INTANGIBLE *
11.5

6. INFORMATION SYSTEMS PLAN
DIRECTION OF SYSTEM DEVELOPMENT:
RATIONALE
CURRENT SITUATION
MANAGEMENT STRATEGY
IMPLEMENTATION PLAN
BUDGET *
11.6

7. 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

8. INFORMATION SYSTEMS PLAN
2. STRATEGIC BUSINESS PLAN:
CURRENT SITUATION
CURRENT ORGANIZATION
CHANGING ENVIRONMENT
MAJOR GOALS OF PLAN *
11.8

9. INFORMATION SYSTEMS PLAN
3. CURRENT SYSTEMS:
MAJOR SYSTEMS SUPPORTING BUSINESS FUNCTIONS
MAJOR CURRENT CAPABILITIES
HARDWARE
SOFTWARE
DATABASE
TELECOMMUNICATIONS
DIFFICULTIES MEETING REQUIREMENTS
ANTICIPATED FUTURE DEMANDS *
11.9

10. INFORMATION SYSTEMS PLAN
4. NEW DEVELOPMENTS:
NEW SYSTEM PROJECTS
PROJECT DESCRIPTIONS
BUSINESS RATIONALE
NEW CAPABILITIES REQUIRED
HARDWARE
SOFTWARE
DATABASE
TELECOMMUNICATIONS *
11.10

11. INFORMATION SYSTEMS PLAN
5. MANAGEMENT STRATEGY
ACQUISITION PLANS
MILESTONES & TIMING
ORGANIZATIONAL REALIGNMENT
INTERNAL REORGANIZATION
MANAGEMENT CONTROLS
MAJOR TRAINING INITIATIVES
PERSONNEL STRATEGY *
11.11

12. (BUSINESS SYSTEMS PLANNING)
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 *
11.12

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 *
11.13

14. CRITICAL SUCCESS FACTORS & GOALS
EXAMPLE
GOALS
CSF
PROFIT
EARNINGS/SHARE
AUTOMOTIVE INDUSTRY:
CONCERN
RETURN ON INVESTMENT
STYLING
MARKET SHARE
QUALITY DEALER SYSTEM
NEW PRODUCT
COST CONTROL
ENERGY STANDARDS
NONPROFIT
EXCELLENT HEALTH CARE
REGIONAL INTEGRATION WITH
OTHER HOSPITALS
MEETING GOVERNMENT REGULATIONS
EFFICIENT USE OF RESOURCES
FUTURE HEALTH NEEDS
IMPROVED MONITORING OF
REGULATIONS
11.14

15. 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
DEFINE DSS & DATABASES *
11.15

16. SPECTRUM OF ORGANIZATIONAL CHANGE
AUTOMATION: Using technology to perform tasks efficiently / effectively
RATIONALIZATION OF PROCEDURES: Streamline SOPs; eliminate bottlenecks
BUSINESS REENGINEERING: Radical redesign of processes to improve cost, quality, service; maximize benefits of technology
PARADIGM SHIFT *
11.16

17. 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 FUNCTION *
11.17

18. RISKS & REWARDS
RISK
RETURN
Low
High
11.18

19. 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
Source: Davenport & Short “The New Industrial Engineering”(1990)

20. 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
Source: Davenport & Short “The New Industrial Engineering”(1990)

21. BUSINESS PROCESS REENGINEERING (BPR)
WORK-FLOW MANAGEMENT: Streamlining process to move documents easily, efficiently
REENGINEERING *
11.21

22. 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

23. TOTAL QUALITY MANAGEMENT (TQM)
RESPONSIBILITY FOR QUALITY SHARED BY ALL PEOPLE IN ORGANIZATION *
11.23

24. CONTRIBUTIONS OF TQM SIMPLIFY PRODUCT OR PROCESS
BENCHMARKING: Strict standards for measuring performance
LISTEN TO CUSTOMER DEMANDS
REDUCE CYCLE TIME
IMPROVE DESIGN
INCREASE PRECISION OF PRODUCTION *
11.24

25. SYSTEM DEVELOPMENT PROCESS
SYSTEMS ANALYSIS
SYSTEM DESIGN
PROGRAMMING
TESTING
CONVERSION
PRODUCTION & MAINTENANCE *
11.25

26. ANALYSIS OF PROBLEM TO BE SOLVED WITH AN INFORMATION SYSTEM
SYSTEMS ANALYSIS
ANALYSIS OF PROBLEM TO BE SOLVED WITH AN INFORMATION SYSTEM
FEASIBILITY STUDY: CAN PROBLEM BE SOLVED WITHIN CONSTRAINTS? *
11.26

27. 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 needs *
11.27

28. 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

29. DESIGN SPECIFICATIONS
OUTPUT
MEDIUM; CONTENT; TIMING
INPUT
ORIGINS; FLOW; DATA ENTRY
USER INTERFACE
SIMPLICITY; EFFICIENCY; LOGIC
FEEDBACK; ERRORS
DATABASE DESIGN
LOGICAL DATA RELATIONS
VOLUME, SPEED REQUIREMENTS
FILE ORGANIZATION & DESIGN
RECORD SPECIFICATIONS *
11.29

30. DESIGN SPECIFICATIONS
PROCESSING
COMPUTATIONS
PROGRAM MODULES
REQUIRED REPORTS
TIMING OF OUTPUTS
MANUAL PROCEDURES
WHAT ACTIVITIES
WHO PERFORMS THEM
HOW
WHERE *
11.30

31. DESIGN SPECIFICATIONS
CONTROLS
INPUT
PROCESSING
OUTPUT
PROCEDURAL
SECURITY
ACCESS CONTROLS
CATASTROPHE PLANS
AUDIT TRAILS *
11.31

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 *
11.32

33. 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

34. COMPLETING SYSTEM DEVELOPMENT PROCESS
PROGRAMMING: Translating needs to program code
TESTING: Does system produce desired results? *
11.34

35. TESTING UNIT TESTING: Tests each unit separately
SYSTEM TESTING: Do modules function as planned?
ACCEPTANCE TESTING: Final certification
TEST PLAN: Preparations for tests to be performed *
11.35

36. CONVERSION PARALLEL: Old & new run same problems. Give same results?
DIRECT CUTOVER: Risky conversion to new system
PILOT: Introduce into one area. Does it work? Yes: introduce into other area
PHASED: Introduce in stages
CONVERSION PLAN: Schedule for conversion
DOCUMENTATION: Description of how system works *
11.36

37. PRODUCTION & MAINTENANCE
PRODUCTION: Constant review by users & operators. Does it meet goals?
MAINTENANCE: Upkeep; Update; Corrections over time *
11.37

38. SYSTEMS DEVELOPMENT 11.38 CORE ACTIVITY DESCRIPTION SYSTEMS ANALYSIS
IDENTIFY PROBLEM(S)
SPECIFY SOLUTIONS
ESTABLISH INFORMATION REQUIREMENTS
SYSTEMS DESIGN
CREATE LOGICAL DESIGN SPECS
CREATE PHYSICAL DESIGN SPECS
MANAGE TECHNICAL REALIZATION OF SYSTEM
PROGRAMMING
TRANSLATE DESIGN SPECS INTO
PROGRAM CODE
11.38

39. SYSTEMS DEVELOPMENT 11.39 CORE ACTIVITY DESCRIPTION TESTING UNIT TEST
SYSTEMS TEST
ACCEPTANCE TEST
CONVERSION
PLAN CONVERSION
PREPARE DOCUMENTATION
TRAIN USERS & TECHNICAL STAFF
PRODUCTION &
OPERATE SYSTEM
MAINTENANCE
EVALUATE SYSTEM
MODIFY SYSTEM
11.39

40. 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

41. PROCESS OF ANALYZING, SELECTING CAPITAL EXPENDITURES
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

42. COSTS & BENEFITS:
COSTS:
HARDWARE
SOFTWARE
SERVICES
PERSONNEL *
11.42

43. 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

44. 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

45. 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

46. 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

47. Connect to the INTERNET
PRESS LEFT MOUSE BUTTON ON ICON TO CONNECT TO THE LAUDON & LAUDON WEB SITE FOR MORE INFORMATION ON THIS CHAPTER
11.47

48. REDESIGNING THE ORGANIZATION WITH INFORMATION SYSTEMS
11.
REDESIGNING THE ORGANIZATION
WITH INFORMATION SYSTEMS
11.48