1. Unit 2 University of Sunderland CSEM04 ROSCO Unit 2: Systems Change (causes and cases) CSEM04: Risk and Opportunities of Systems Change in Organisations Prof. Helen M Edwards

2. Unit 2 University of Sunderland CSEM04 ROSCO Overview Systems Change Causes and Cases. –Causes: Standards compliance (SOX) –Causes: Standards compliance (Basel II) Case: Autoprocess Ltd Autoprocess Ltd: Discussion Student Activity. Systems Change

3. Unit 2 University of Sunderland CSEM04 ROSCO Systems Change Why do organisations change systems? –Student suggestions? –Tutor suggestions –Discussion. –Class experiences

4. Unit 2 University of Sunderland CSEM04 ROSCO Causes and Cases. Change can be prompted by many things, for example: –Getting/keeping competitive edge. E.g. Scott, M, Edwards, H.M. and Oliver, P (2005) Understanding the Role of Strategy: An Exploratory Study of Eliciting E-business Requirements for SMEs. UKAIS 10 th Annual Conference, Newcastle, April 2005 –Everyone else is doing it. E.g. Edwards, H.M. and Humphries, L.P (2005) People, Technology and Systems Failure: Who's to Blame? Findings from an SME's ERP Project. Journal of IT Cases, Oct-Dec, 2005 –Current System is no longer Maintainable. E.g. Edwards, H.M, Mallalieu, G.M. and Thompson, J.B. (1999) Some Insights into the Maintenance of Legacy Systems within Small Manufacturing and Distribution Organisations in the UK. 23rd IEEE conference on computer software and its applications (compsac99), Phoenix, Arizona, October, 1999. –Legislative/Governmental changes –Standards Compliance

5. Unit 2 University of Sunderland CSEM04 ROSCO Causes: Standards compliance (SOX) Sarbanes-Oxley (SOX) Act: from 2004 in USA affects all public companies: –Must submit annual assessments of the effectiveness of internal financial auditing controls to the Securities and Exchange Commission (SEC). –companies' external auditors must report on the internal control of management. Who needs to comply with Sarbanes-Oxley? –All publicly-traded companies in the United States, all wholly-owned subsidiaries, and –all publicly-traded non-US companies doing in business in the USA. What does Sarbanes-Oxley compliance require? –a financial accounting framework generating verifiable financial reports with traceable source data. –source data must remain intact and cannot undergo undocumented revisions. –any revisions to financial or accounting software must be fully documented: what was changed, why, by whom, and when. Penalties for noncompliance with Sarbanes-Oxley? –Lawsuits, negative publicity, fines up to $1 million and 10 years in prison for not complying (or submitting inaccurate/mistaken certification), fines up to $5 million and 20 years in prison for providing deliberately inaccurate certification. Based on From http://www.sarbanes-oxley-101.com/sarbanes-oxley-faq.htm

6. Unit 2 University of Sunderland CSEM04 ROSCO Causes: Standards compliance (Basel II) Basel II (developed by the Basel Committee on Banking Supervision (BCBS)). Aim: uniformity in the way banks and banking regulators approach risk management across national borders. Basel II recommends "three pillars“ to bring stability to the financial system –risk appraisal and control, –supervision of the assets, and –monitoring of the financial market. Basel II implementation involves –identifying credit risk, market risk, operational risk, etc. –allocating adequate capital to cover potential loss. –Requires effective IT support to deliver audit trails required. From www.wikipedia.com

7. Unit 2 University of Sunderland CSEM04 ROSCO Systems Change Drivers for change in organisations: –internal –external –examples. –Class experiences Perceived benefits/risks of change –strategic –operational. –Class experiences

8. Unit 2 University of Sunderland CSEM04 ROSCO “Autoprocess Ltd” –manufactures line-assembly products for one customer on a synchronous-delivery system. –has over 60 suppliers and currently has to manage the supplier relationship (with all 60+) manually and individually. –new general manager has suggested that what is required is “Supplier Self Sufficiency”. put the onus of maintaining the correct stock levels and replenishing them on the suppliers, penalties to be applied against suppliers where there is insufficient stock when required. –Vision: implemented through a web application suppliers to access the stock system to monitor the levels of their stock and determine when to replenish. Case: Autoprocess Ltd

9. Unit 2 University of Sunderland CSEM04 ROSCO Is this purely an e-commerce system requiring an IT solution? OR is it a business process change? –change to personnel roles –change to standard operating procedures, –strategic supply chain issue: change to supplier relationships –IS change and systems integration –Financial and other resource implications –Physical storage and logistics change … What are the risks? What are the opportunities? Consider under headings of –Business change –IS change –Personnel role change. Autoprocess Ltd: Discussion

10. Unit 2 University of Sunderland CSEM04 ROSCO Student Activity. Undertake some web/literature searches to find examples of systems change cases categorise them using the headings of : –who, –where, –what –impetus for change –type of change –impact/result of change –brief list of significant issues. N.B. –this is not an in-depth case analysis –Should take about one side of A4 to do. –cases can come from student experience (where relevant).