1. Chapter 3 Solving Problems The Strategic Management of Information Technology

2. Systems Approach Input Output Process

3. Feedback and Control Systems Input Output Process Control Goal Feedback

4. Strategic Leverage Paradigm Competitive Position Competitive Position Nature of Conflict; Terms of Competition Strategic Leverage Objectives Strategies Tactics Change the Game Change the Game

5. Systems Development Lifecycle Planning Support Implementation Design Analysis Obsolete Solution Problem to be Solved Problem Understanding and Solution Requirements Acceptable Solution Statement Implemented Solution Implementation Error (bug) New, Related Problem or Requirement New implementation Alternative or Requirement

6. Systems Planning Elements l People – Users, Management, Information Specialists l Data – How it is captured, used, and stored l Activities – Automated and Manual – Business and Information Applications l Networks – Where data is stored and processed – How data is exchanged between different locations l Technology – hardware and software used

7. Information System Building Block Systems Builders Systems Designers Systems Users Systems Owners

8. Differentiation versus Cost Leadership T1 Sustainable Premium Quality Cost Minimum or Market-Required Quality Differentiated Player Cost Leader Technology Curve

9. Is Cost Leadership Sustainable? T1 Sustainable Premium Quality Cost Minimum or Market-Required Quality Differentiated Player Cost Leader Old Technology Curve T2 New Technology Curve

10. Industry/Company Relationships Industry Structure & Competitive Position Long-term Objectives, Strategic Direction Detailed Strategies and Tactics Freedom of Maneuver

11. Break-Even Point Total Revenue Profit Total Costs Fixed Costs Sales Break-Even Volume Revenue and Costs Profit Fixed Costs

12. Decision Trees Decision Point Probability

13. Efforts to Categorize the Unknown Complexity Instability Uncertainty

14. Barriers to Entry Sources l Economies of Scale l Economies of Scope l Product Differentiation l Capital Requirements l Cost Disadvantages – Independent of Size l Distribution Channel Access l Government Policy

15. Four Generic Approaches Win Lose Win/WinWin/Lose or Cooperative Equilibrium Lose/Lose Win/Lose or Cooperative Equilibrium

16. Lose/Lose l Total Industry Profits are Very Low, Zero, or Negative l Industry Revenues are Declining, or, at best, steady l Product Technology is at or past its peak Structure Defines the Industry War

17. Win/Win l Total Industry Revenues and Profits are Growing Rapidly l Numerous Players of All Sizes l Products and Services are not Standardized

18. Win/Lose l Total Industry Revenues and/or Profits are Constant or are Growing very Slowly l Significant Economies of Scale in Production, Distribution, and/or Promotion l Number of Firms Participating in the Industry is Limited and Stable l Individual Participants have, or can obtain, Information Regarding the Relative Positions of the Players

19. Structure Defines the Terms of Competition l Wasting Resources – generic advertising rather than focusing on specific market segments l Precipitating Unwanted Warfare – Causing a full-scale price war when only brand repositioning was necessary l Failing to Anticipate and Adapt to Changes – Following historical patterns – Underspending on Advertising

20. Structure Defines Maneuver l Standard or Dominant Product Emerges l Distribution Channels Limit Firm’s Ability to Determine which Channels to Select l Target and Market Niches Become More Difficult to Defend l Substitutes Limit Price Increases which Requires Increase in Advertising Expenditure

21. Project Management l Set of Principles, Methods, Tools, Techniques l For the Effective Management of Results- Oriented Work l Utilized in the Context of a Specific and Unique Organizational Environment

22. Variables Cost Risk Time

23. Goals l Critical Path/PERT Charting l Progress Presentation Reports – Clients and Management l Dependencies/Prerequisites/Linkages l Variance Analysis l Resource Assignments

24. MSProject Program Linkages l Suite: Lotus/Microsoft/WordPerfect – Spreadsheet – Presentation – word processing – Database – Notes – Flowcharting (AllClear or ABC) – Risk Analysis Tool

25. Project Management Issues l Learning Curve Requires Understandable Training Program l Drown in Data Entry l Loose Perspective in Extent of Project Captured l Management Commitment l Critical Mass l Required Rollups l Discipline in Monitoring/Using Plan

26. Project Management Terms l Schedule From: – Project Start Date – Project Finish Date l Duration Type: – Resource Driven – Fixed Duration l Constrain Task – Date

27. Project Management Terms l Priority – High – Medium – Low l Risk – High – Medium – Low

28. Project Management Terms l Relationship with Predecessor: – Finish-to-Start (FS) – Start-to-Start (SS) – Finish-to-Finish (FF) – Start-to-Finish (SF)

29. Project Management Terms l Tasks: – Noncritical – Critical – Milestone – Summary – Project Summary

30. MIS Risks l Creeping User Requirements80% l Excessive Schedule Pressure65% l Low Quality60% l Cost Overruns55% l Inadequate Configuration Controls50%

31. Systems Software Risks l Long Schedule70% l Inadequate Cost Estimating65% l Excessive Paper Work60% l Error-prone Modules50% l Canceled Projects35%

32. Commercial Software Risks l Inadequate User Documentation70% l Low User Satisfaction55% l Excessive Time to Market50% l Harmful Competitive Actions45% l Litigation Expenses30%

33. Military Software Risks l Excessive Paperwork90% l Low Productivity85% l Long Schedules75% l Creeping User Requirements70% l Unused or Unusable Software45%

34. Contract or Outsourced Risks l High Maintenance Costs 60% l Friction between Contractor and Client 50% l Creeping User Requirements 45% l Unanticipated Acceptance Criteria 30% l Legal Ownership of Software 20%

35. End-User Software Risks l Non-Transferable Applications80% l Hidden Errors65% l Unmaintainable Software60% l Redundant Applications50% l Legal Ownership of Software20% – Deliverables

36. Risk Prevention and Control l Creeping User Requirements l Schedule Pressure, Long Schedules, and Excessive Time to Market l Cost Overruns l Low Quality and Error-Prone Modules l High Maintenance Costs

37. Risk Factors Resistant to Control l Excessive Paperwork l Inadequate User Documentation l Low User Satisfaction l Friction Between Clients and Contractors l Legal Issues and Litigation Expense

38. Serious Software Risks l Inadequate Metrics l Inadequate Measurement l Excessive Schedule Pressure l Management Malpractice l Inaccurate Cost Estimating l Silver Bullet Syndrome l Creeping User Requirements l Low Quality l Low Productivity l Canceled Projects

39. Risk Factors to Define l Definition l Severity l Frequency l Occurrence l Susceptibility and Resistance l Root Causes l Associated Problems

40. Risk Factors to Define l Cost Impact l Methods of Prevention l Methods of Control l Product Support l Consulting Support l Education Support l Publication Support

41. Risk Factors to Define l Periodical Support l Standards Support