Sylnovie Merchant, Ph.D. MIS 281 Spring 2005 Lecture 4 IT and E-Business Lifecycles

Sylnovie Merchant, Ph.D. MIS 281 Spring 2005 General Questions General Questions - What is the Business Process Issue that I am trying to solve? What technology should be used? What is the impact on other business resources (including human)? What are the costs and benefits to be considered? Emphasis on ‘Does the solution make sense?’!?

Sylnovie Merchant, Ph.D. MIS 281 Spring 2005 IT as an Essential Enabler IT permits companies to reengineer business processes by breaking existing rules Think inductively -- Instead to looking for solutions for existing problems, recognize new powerful technology first and then seek the problems it might solve Recognize business opportunities created by breaking long-standing rules

Sylnovie Merchant, Ph.D. MIS 281 Spring 2005 Organizational Responses Framework for Organizational and Societal Impacts of Information Technology Management and Business Process Organization Structure and the Corporate Culture Individual and Roles Information Technology The Organization’s Strategy External Environment, Social, Economic, Political, etc

Sylnovie Merchant, Ph.D. MIS 281 Spring 2005 Lucas, 1975 A descriptive model of information systems in the context of the organizations Management Action Information Services Dept. Design and Operations Policies, Attitudes Contact Involvement User Attitudes and Perceptions Technical Quality of System Use of System Analysis Action Performance Decision Style Situational & Personal Factors

Sylnovie Merchant, Ph.D. MIS 281 Spring 2005 Lessons From the Past Introducing information systems was the challenge of the 70’s Successfully introducing Electronic Commerce/Electronic Business is the current challenge

Sylnovie Merchant, Ph.D. MIS 281 Spring 2005 Failure to adopt MIS/IS Innovations in the 70’s Linked to: absence of an IS champion lack of management support strain on manager’s time negative attitudes little education and training organizational, technical problems perceived gaps between expectations of system providers and users

Sylnovie Merchant, Ph.D. MIS 281 Spring 2005 Success in adopting MIS/IS was linked to: commitment executive sponsor quick feedback dedicated facilities software and hardware support training congruence of system and managerial expectations Successful Adoption

Sylnovie Merchant, Ph.D. MIS 281 Spring 2005 Success occurred when relative advantage was shown in terms of: time saved, benefits accrued competitive pressure decreased, making the firm flexible and profitable. positive relationship between manager and external consultant Successful Adoption (con’t)

Sylnovie Merchant, Ph.D. MIS 281 Spring 2005 Benefits to Organizations –Reduces the time between the outlay of capital and the receipt of products and services –Supports business processes reengineering (BPR) efforts –Lowers telecommunications cost - the Internet is much cheaper than previous communication technologies

Sylnovie Merchant, Ph.D. MIS 281 Spring 2005 Reengineering: The Path to Change Definition “The fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance, such as cost, quality, service, and speed.” (Hammer & Champy, 1993)

Sylnovie Merchant, Ph.D. MIS 281 Spring 2005 Electronic Commerce/ Electronic Business Is not about technology itself It is about business and how businesses use the available technology and applications to meet their business needs –Improving effectiveness, efficiency, flexibility and capability to adapt to changing conditions

Electronic Commerce/ Electronic Business E-commerce/e-business implies the application of technology either: – as a solution to a business problem or need which involves the exchange of information between business partners – as a means of grasping an opportunity

Evaluating E-Commerce/E- Business Why use e-commerce/e-business? – Need to change the way business is conducted – Increasing competition to deliver increasing levels of product and service quality – can assist to reduce the cost of doing business

Business Issues When Implementing EC/EB Staffing issues Trading partner issues Business process issues Technology, implementation, and maintenance issues Control, Audit and Legal issues

EC/EB Technologies and Applications need to be considered in the light of BOTH: – the benefits and direct and indirect costs of implementation (both tangible and intangible), and – the costs of not implementing electronic commerce

Sylnovie Merchant, Ph.D. MIS 281 Spring 2005 What EC/EB Does Collapse administrative, marketing, distribution layers –reduce cost, cycle time Eliminate, rather than streamline, bureaucracies –top-down structure replaced by consumer driven, bottom-up structure

Component Parts of EC/EB Common business services for facilitating the buying and selling process Messaging and information distribution, as a means of sending and retrieving information – Kalakota and Whinston

Component parts of EC/EB (cont’d) Multimedia content and network publishing, for creating a product and a means to communicate it The Information Superhighway - the very foundation - for providing the highway system for EC/EB

Three Pillars Supporting EC/EB Public policy, to govern such issues as universal access, privacy and information pricing Self regulation of business relationships through ethical standards –Ethical standards –Trust Technical standards, to dictate the nature of information publishing, user interfaces and transport across the entire network

What Does EB/EC Imply? – Labour intensive --> IT Intensive – Paper documents --> Electronic documents – Written signatures --> Digital signatures – Physical security --> Electronic security – Data and graphics --> Multimedia – Present environment --> IT infrastructure

Sylnovie Merchant, Ph.D. MIS 281 Spring 2005 The Impact of EC/EB on Traditional Retailing System Disintermediation and Re-intermediation –Disintermediation — the removal of organizations or business process layers responsible for certain intermediary steps in a given value chain eliminating the traditional intermediaries, such as wholesalers, distributors, and retailers, to reduce the cost –Re-intermediation — the shifting or transfer of the intermediary functions, rather than the complete elimination intermediation such as electronic shopping malls, directory and search engine service, and comparison aids using agents creates the role of re-intermediation

Sylnovie Merchant, Ph.D. MIS 281 Spring 2005 The Systems and E-Business Lifecycles

Sylnovie Merchant, Ph.D. MIS 281 Spring 2005 Systems Development Lifecycle (SDLC) Three major activities –Analysis: understanding business needs –Design: conceptualizing computer-system solution –Implementation: construction, testing, and installation Two additional phases –Project planning –Support

Sylnovie Merchant, Ph.D. MIS 281 Spring 2005 SDLC Concepts All projects use some variation of the SDLC SDLC is more than phases –Principles of management –Planning and control –Organization and scheduling –Problem solving

Sylnovie Merchant, Ph.D. MIS 281 Spring 2005 Planning Phase Define problem Confirm project feasibility Produce project schedule Staff the project Launch the project

Sylnovie Merchant, Ph.D. MIS 281 Spring 2005 Analysis Phase Gather information Define system requirements Build prototypes for discovery of requirements Prioritize requirements Generate and evaluate alternatives Review recommendations with management

Sylnovie Merchant, Ph.D. MIS 281 Spring 2005 Design Phase Design and integrate the network Design the application architecture Design the user interfaces Design the system interfaces Design and integrate the database Prototype for design details Design and integrate the system controls

Sylnovie Merchant, Ph.D. MIS 281 Spring 2005 Implementation Phase Construct software components Verify and test Develop prototypes for tuning Convert data Train and document Install the system

Sylnovie Merchant, Ph.D. MIS 281 Spring 2005 Support Phase Objective: Keep system running productively following initial installation –End-user support Help desks Training programs –Maintaining and enhancing computer system Enhancements Upgrades Maintenance

Sylnovie Merchant, Ph.D. MIS 281 Spring 2005 E-Business E-Business Life Cycle –Planning –Marketing –Fulfillment –Maintenance & Enhancement

Sylnovie Merchant, Ph.D. MIS 281 Spring 2005 PLANNING Strategizing Reality –Evaluate a company’s position & competition –Set a course for years ahead –Develop implementation plan

Sylnovie Merchant, Ph.D. MIS 281 Spring 2005 STRATEGIZING Know Your Audience Become Internet Savvy Determine Long-term vs. Short-term Selling Define Your Competitors Evaluate Website Appearance

Sylnovie Merchant, Ph.D. MIS 281 Spring 2005 STRATEGIZING (Cont’d) Select Product Range Manage Transaction Effectively & Efficiently Design Shipment Process Be Prepared for Unexpected Changes

Sylnovie Merchant, Ph.D. MIS 281 Spring 2005 ULTIMATE STRATEGY Vision –What is your business trying to achieve? Resources –How much can your business afford to build the right Website? Culture –Is your business politically amenable for coordinating efforts to support e-business?

Sylnovie Merchant, Ph.D. MIS 281 Spring 2005 PLANNING CONSIDERATIONS Create & Maintain a Competitive Edge Reduce Operational Costs Improve Employee Communication & Satisfaction Find New Markets for Products & Services Improve relationships with Partners

Sylnovie Merchant, Ph.D. MIS 281 Spring 2005 PLANNING CONSIDERATIONS (Cont’d) Create Distinct Distribution Channels Ensure Customer Satisfaction Adopt Sense of Entrepreneurship Improve Supply-Chain Management