11.1 Prof Jess UEAB 2010Prof Jess UEAB UNDERSTANDING THE BUSINESS VALUE OF SYSTEMS AND MANAGING CHANGE

11.2 Prof Jess UEAB 2010 LEARNING OBJECTIVES EVALUATE MODELS DETERMINING BUSINESS VALUE OF INFORMATION SYSTEMSEVALUATE MODELS DETERMINING BUSINESS VALUE OF INFORMATION SYSTEMS ANALYZE PRINCIPAL CAUSES OF INFORMATION SYSTEM FAILUREANALYZE PRINCIPAL CAUSES OF INFORMATION SYSTEM FAILURE ANALYZE REQUIREMENTS FOR BUILDING SUCCESSFUL SYSTEMSANALYZE REQUIREMENTS FOR BUILDING SUCCESSFUL SYSTEMS SELECT STRATEGIES TO MANAGE SYSTEM IMPLEMENTATIONSELECT STRATEGIES TO MANAGE SYSTEM IMPLEMENTATION*

11.3 Prof Jess UEAB 2010 MANAGEMENT CHALLENGES UNDERSTANDING BUSINESS VALUE OF INFORMATION SYSTEMSUNDERSTANDING BUSINESS VALUE OF INFORMATION SYSTEMS CHANGE MANAGEMENT IN INFORMATION SYSTEM SUCCESS & FAILURECHANGE MANAGEMENT IN INFORMATION SYSTEM SUCCESS & FAILURE MANAGING IMPLEMENTATIONMANAGING IMPLEMENTATION*

11.4 Prof Jess UEAB 2010 CAPITAL BUDGETING MODELSCAPITAL BUDGETING MODELS PORTFOLIO ANALYSISPORTFOLIO ANALYSIS REAL OPTIONS PRICING MODELSREAL OPTIONS PRICING MODELS* UNDERSTANDING BUSINESS VALUE OF INFO SYSTEMS

11.5 Prof Jess UEAB 2010 CAPITAL BUDGET: PAYBACK METHOD: How long will it take to pay back the investment?PAYBACK METHOD: How long will it take to pay back the investment? RETURN ON INVESTMENT: Does return during useful life of an item exceed the cost to borrow money?RETURN ON INVESTMENT: Does return during useful life of an item exceed the cost to borrow money? COST-BENEFIT RATIO: Does the ratio of benefit versus cost exceed 1?COST-BENEFIT RATIO: Does the ratio of benefit versus cost exceed 1?*

11.6 Prof Jess UEAB 2010 CAPITAL BUDGET: PROFITABILITY INDEX: What is the ratio of present value of cash inflow to initial investment?PROFITABILITY INDEX: What is the ratio of present value of cash inflow to initial investment? NET PRESENT VALUE: Accounting for cost, earnings & time value of money what is the investment worth?NET PRESENT VALUE: Accounting for cost, earnings & time value of money what is the investment worth? INTERNAL RATE OF RETURN: Accounting for the time value of money, what is the return rate of an investment?INTERNAL RATE OF RETURN: Accounting for the time value of money, what is the return rate of an investment?*

11.7 Prof Jess UEAB 2010 COSTS: HARDWAREHARDWARE SOFTWARESOFTWARE SERVICESSERVICES PERSONNELPERSONNEL* COSTS & BENEFITS:

11.8 Prof Jess UEAB 2010 TANGIBLE BENEFIT: INCREASED PRODUCTIVITYINCREASED PRODUCTIVITY LOW OPERATING COSTSLOW OPERATING COSTS REDUCED WORK FORCEREDUCED WORK FORCE LOWER COMPUTER EXPENSESLOWER COMPUTER EXPENSES LOWER VENDOR COSTSLOWER VENDOR COSTS LOWER CLERICAL/PROFESSIONAL COSTSLOWER CLERICAL/PROFESSIONAL COSTS REDUCED GROWTH OF EXPENSESREDUCED GROWTH OF EXPENSES REDUCED FACILITY COSTSREDUCED FACILITY COSTS* COSTS & BENEFITS:

11.9 Prof Jess UEAB 2010 INTANGIBLE BENEFIT: IMPROVED ASSET USE; RESOURCE CONTROL; PLANNINGIMPROVED ASSET USE; RESOURCE CONTROL; PLANNING INCREASED FLEXIBILITYINCREASED FLEXIBILITY MORE TIMELY INFORMATIONMORE TIMELY INFORMATION INCREASED LEARNINGINCREASED LEARNING ATTAIN LEGAL REQUIREMENTSATTAIN LEGAL REQUIREMENTS ENHANCED EMPLOYEE GOODWILL, JOB SATISFACTION, DECISION MAKING, OPERATIONSENHANCED EMPLOYEE GOODWILL, JOB SATISFACTION, DECISION MAKING, OPERATIONS HIGHER CLIENT SATISFACTIONHIGHER CLIENT SATISFACTION BETTER CORPORATE IMAGEBETTER CORPORATE IMAGE* COSTS & BENEFITS:

11.10 Prof Jess UEAB 2010 LIMITATIONS: Assume all relevant alternatives have been examined; cost & benefits can be expressed as $$Assume all relevant alternatives have been examined; cost & benefits can be expressed as $$ Ignore intangible benefitsIgnore intangible benefits* CAPITAL BUDGETING MODELS

11.11 Prof Jess UEAB 2010 PORTFOLIO ANALYSIS: ANALYSIS OF POTENTIAL APPLICATIONS TO DETERMINE RISKS & BENEFITS DETERMINE DESIRABLE FEATURES, ACCEPTABLE RISKS OF REQUIRED SYSTEMDETERMINE DESIRABLE FEATURES, ACCEPTABLE RISKS OF REQUIRED SYSTEM GENERATE PORTFOLIO OF CHARACTERISTICS, RISKS FOR EACH ALTERNATIVEGENERATE PORTFOLIO OF CHARACTERISTICS, RISKS FOR EACH ALTERNATIVE SCORING MODELSCORING MODEL*

11.12 Prof Jess UEAB 2010 IDENTIFY DESIRABLE FEATURESIDENTIFY DESIRABLE FEATURES PROVIDE WEIGHTS FOR EACH (ADD TO 1.00)PROVIDE WEIGHTS FOR EACH (ADD TO 1.00) LOOK AT EACH ALTERNATIVE:LOOK AT EACH ALTERNATIVE: –WHICH FEATURES ARE PRESENT? –TO WHAT EXTENT (as an amount)? –SCORE THE ALTERNATIVE RANK-ORDER THE ALTERNATIVESRANK-ORDER THE ALTERNATIVES SELECT HIGHEST RANKED OPTIONSELECT HIGHEST RANKED OPTION* SCORING MODEL:

11.13 Prof Jess UEAB 2010 REAL OPTIONS PRICING MODELS USEFUL UNDER UNCERTAIN CONDITIONSUSEFUL UNDER UNCERTAIN CONDITIONS INCLUDE ESTIMATES FOR MANAGEMENT LEARNING, VALUE OF DELAYING DECISION, VOLATILITY OF COSTS & REVENUESINCLUDE ESTIMATES FOR MANAGEMENT LEARNING, VALUE OF DELAYING DECISION, VOLATILITY OF COSTS & REVENUES

11.14 Prof Jess UEAB 2010 CHANGE MANAGEMENT WHAT PROCESSES ARE BEST TO CHANGE: DESIGNDESIGN DATADATA COSTCOST OPERATIONSOPERATIONS*

11.15 Prof Jess UEAB 2010 CHANGE AGENT DURING IMPLEMENTATION, INDIVIDUAL ACTS AS CATALYST DURING CHANGE PROCESS TO ENSURE SUCCESS DURING IMPLEMENTATION, INDIVIDUAL ACTS AS CATALYST DURING CHANGE PROCESS TO ENSURE SUCCESS*

11.16 Prof Jess UEAB 2010 APPROACHESADOPTIONMANAGEMENT ROUTINIZATION ACTORS' ROLEXXXX STRATEGYXXXX ORGANIZATIONALXXXX FACTORS IMPLEMENTATION STAGES ALL ACTIVITIES LEADING TO ADOPTION, MANAGEMENT, ROUTINIZATION OF INNOVATION IMPLEMENTATION

11.17 Prof Jess UEAB 2010 INNOVATION PROCESS ACTOR CHARACTERISTICS & DEMOGRAPHICS SOCIAL STATUS EDUCATION SOPHISTICATION ACTOR ROLES PRODUCT CHAMPION BUREAUCRATIC ENTREPRENEUR GATEKEEPER INNOVATIVE BEHAVIOR

11.18 Prof Jess UEAB 2010 ACTIONS & INDICATORS FOR SUCCESSFUL SYSTEM IMPLEMENTATION SUPPORT BY LOCAL FUNDSSUPPORT BY LOCAL FUNDS NEW ORGANIZATIONAL ARRANGEMENTSNEW ORGANIZATIONAL ARRANGEMENTS STABLE SUPPLY & MAINTENANCESTABLE SUPPLY & MAINTENANCE NEW PERSONNEL CLASSIFICATIONSNEW PERSONNEL CLASSIFICATIONS CHANGES IN ORGANIZATIONAL AUTHORITYCHANGES IN ORGANIZATIONAL AUTHORITY* Source: Yin (1981 )

11.19 Prof Jess UEAB 2010 ACTIONS & INDICATORS FOR SUCCESSFUL SYSTEM IMPLEMENTATION INTERNALIZATION OF TRAINING PROGRAMINTERNALIZATION OF TRAINING PROGRAM CONTINUAL UPDATING OF THE SYSTEMCONTINUAL UPDATING OF THE SYSTEM PROMOTION OF KEY PERSONNELPROMOTION OF KEY PERSONNEL SURVIVAL OF SYSTEM AFTER TURNOVERSURVIVAL OF SYSTEM AFTER TURNOVER ATTAINMENT OF WIDESPREAD USEATTAINMENT OF WIDESPREAD USE* Source: Yin (1981 )

11.20 Prof Jess UEAB 2010 FACTORS IN IMPLEMENTATION OUTCOME CAUSES OF SUCCESS OR FAILURE: USER INVOLVEMENT & INFLUENCEUSER INVOLVEMENT & INFLUENCE MANAGEMENT SUPPORTMANAGEMENT SUPPORT LEVEL OF COMPLEXITY / RISKLEVEL OF COMPLEXITY / RISK MANAGEMENT OF IMPLEMENTATION PROCESSMANAGEMENT OF IMPLEMENTATION PROCESS*

11.21 Prof Jess UEAB 2010 USER-DESIGNER COMMUNICATIONS GAP DIFFERENCES IN BACKGROUNDS, INTERESTS, PRIORITIES DIFFERENCES IN BACKGROUNDS, INTERESTS, PRIORITIES IMPEDE COMMUNICATION AND PROBLEM SOLVING IMPEDE COMMUNICATION AND PROBLEM SOLVING AMONG END USERS AND INFORMATION SYSTEMS SPECIALISTS AMONG END USERS AND INFORMATION SYSTEMS SPECIALISTS*

11.22 Prof Jess UEAB 2010 USER CONCERNS: WILL SYSTEM DELIVER INFORMATION I NEED? WILL SYSTEM DELIVER INFORMATION I NEED? HOW QUICKLY CAN I ACCESS DATA? HOW QUICKLY CAN I ACCESS DATA? HOW EASILY CAN I RECEIVE DATA? HOW EASILY CAN I RECEIVE DATA? HOW MUCH CLERICAL SUPPORT WILL I NEED FOR DATA ENTRY? HOW MUCH CLERICAL SUPPORT WILL I NEED FOR DATA ENTRY? HOW WILL SYSTEM OPERATION FIT INTO MY DAILY BUSINESS SCHEDULE? HOW WILL SYSTEM OPERATION FIT INTO MY DAILY BUSINESS SCHEDULE?*

11.23 Prof Jess UEAB 2010 DESIGNER CONCERNS: HOW MUCH DISK SPACE WILL MASTER FILE CONSUME? HOW MUCH DISK SPACE WILL MASTER FILE CONSUME? HOW MANY LINES OF PROGRAM CODE WILL THIS FUNCTION TAKE? HOW MANY LINES OF PROGRAM CODE WILL THIS FUNCTION TAKE? HOW CAN WE REDUCE CPU TIME? HOW CAN WE REDUCE CPU TIME? WHAT IS THE MOST EFFICIENT WAY OF STORING THIS DATA? WHAT IS THE MOST EFFICIENT WAY OF STORING THIS DATA? WHAT DATABASE MANAGEMENT SYSTEM SHOULD WE USE? WHAT DATABASE MANAGEMENT SYSTEM SHOULD WE USE?*

11.24 Prof Jess UEAB 2010 LEVEL OF COMPLEXITY & RISK PROJECT SIZEPROJECT SIZE PROJECT STRUCTUREPROJECT STRUCTURE EXPERTISE WITH TECHNOLOGYEXPERTISE WITH TECHNOLOGY*

11.25 Prof Jess UEAB 2010 CONTROLLING PROJECT RISK LOW HIGH SMALLHIGH LOW HIGH LARGEVERY HIGH LOW SMALLVERY LOW LOW LARGELOW HIGH SMALLMEDIUM-LOW HIGH LARGEMEDIUM HIGH LOW SMALLVERY LOW STRUCTURETECHNOLOGY LEVELSIZERISK HIGH LOW LARGELOW

11.26 Prof Jess UEAB 2010 CONSEQUENCES OF POOR PROJECT MANAGEMENT COST OVERRUNSCOST OVERRUNS TIME SLIPPAGETIME SLIPPAGE TECHNICAL SHORTFALLSTECHNICAL SHORTFALLS FAILURE TO OBTAIN BENEFITSFAILURE TO OBTAIN BENEFITS*

11.27 Prof Jess UEAB 2010 CAUSES OF POOR PROJECT MANAGEMENT IGNORANCE & OPTIMISMIGNORANCE & OPTIMISM MYTHICAL MAN-MONTH: Many tasks sequentially linked, require trainingMYTHICAL MAN-MONTH: Many tasks sequentially linked, require training FALLING BEHIND: Bad news travels slowly upwardFALLING BEHIND: Bad news travels slowly upward*

11.28 Prof Jess UEAB 2010 CHANGE MANAGEMENT CHALLENGES ENTERPRISE SYSTEMS: High risk of failure, replacing legacy systems, myriad interconnectionsENTERPRISE SYSTEMS: High risk of failure, replacing legacy systems, myriad interconnections BUSINESS PROCESS REENGINEERING: 70% failure rate, deeply rooted in old processes, employees often unpreparedBUSINESS PROCESS REENGINEERING: 70% failure rate, deeply rooted in old processes, employees often unprepared*

11.29 Prof Jess UEAB 2010 CHANGE MANAGEMENT CHALLENGES MERGERS & ACQUISITIONS: Decline in shareholder value, difficult to integrate company systems, organizational change, worker moraleMERGERS & ACQUISITIONS: Decline in shareholder value, difficult to integrate company systems, organizational change, worker morale*

11.30 Prof Jess UEAB 2010 MANAGING IMPLEMENTATION: CONTROL RISK FACTORS: Gear tools, methodologies to level of risk INTERNAL INTEGRATION TOOLS: FORMAL PLANNING TOOLSFORMAL PLANNING TOOLS FORMAL CONTROL TOOLSFORMAL CONTROL TOOLS*

11.31 Prof Jess UEAB 2010 FORMAL PLANNING TOOLS EXAMPLES: PROGRAM EVALUATION & REVIEW TECHNIQUE: Diagram of project activities, sequential and concurrent, shows interactions of activitiesPROGRAM EVALUATION & REVIEW TECHNIQUE: Diagram of project activities, sequential and concurrent, shows interactions of activities GANTT CHART: Shows activities as bars along a time line, with beginning, end of each taskGANTT CHART: Shows activities as bars along a time line, with beginning, end of each task THESE PROVIDE SCHEDULES *

11.32 Prof Jess UEAB 2010 FORMAL CONTROL TOOLS: BUDGET: Time, money, resources MONITOR PROGRESS: Completion of tasks, fulfillment of goalsMONITOR PROGRESS: Completion of tasks, fulfillment of goals CONTROL RISK FACTORS: Cost/benefitsCONTROL RISK FACTORS: Cost/benefits*

11.33 Prof Jess UEAB 2010 EXTERNAL INTEGRATION TOOLS LINK ALL USERS THROUGHOUT ORGANIZATIONLINK ALL USERS THROUGHOUT ORGANIZATION USE END USERS AS TEAM MEMBERSUSE END USERS AS TEAM MEMBERS SHARE INFORMATION & PROGRESSSHARE INFORMATION & PROGRESS INCLUDE TRAININGINCLUDE TRAINING AVOID COUNTERIMPLEMENTATIONAVOID COUNTERIMPLEMENTATION*

11.34 Prof Jess UEAB 2010 ORGANIZATIONAL FACTORS JOB DESIGNJOB DESIGN STANDARDS & PERFORMANCE MONITORINGSTANDARDS & PERFORMANCE MONITORING ERGONOMICS: Interaction of people & machines; jobs, health, interfaceERGONOMICS: Interaction of people & machines; jobs, health, interface*

11.35 Prof Jess UEAB 2010 ORGANIZATIONAL FACTORS EMPLOYEE GRIEVANCE RESOLUTION PROCEDURESEMPLOYEE GRIEVANCE RESOLUTION PROCEDURES HEALTH & SAFETYHEALTH & SAFETY GOVERNMENT REGULATORY COMPLIANCEGOVERNMENT REGULATORY COMPLIANCE*

11.36 Prof Jess UEAB 2010 ORGANIZATIONAL FACTORS MONITOR PROGRESS: Completion of tasks, fulfillment of goals CONTROL RISK FACTORS: Cost / benefits *

11.37 Prof Jess UEAB 2010 ORGANIZATIONAL IMPACT ANALYSIS: How will system impact structure, attitudes, decision-making, operations SOCIOTECHNICAL DESIGN: Explore group structures, task allocation, job design for human factor * ORGANIZATIONAL FACTORS

11.38 Prof Jess UEAB 2010 “ FOURTH-GENERATION ” PROJECT MANAGEMENT EMERGING TECHNIQUES TO DEAL WITH COMPLEXITYEMERGING TECHNIQUES TO DEAL WITH COMPLEXITY ENTERPRISE-WIDE FOCUSENTERPRISE-WIDE FOCUS DRIVEN BY STRATEGIC VISION & TECHNOLOGYDRIVEN BY STRATEGIC VISION & TECHNOLOGY MAY REQUIRE SEPARATE PROGRAM OFFICEMAY REQUIRE SEPARATE PROGRAM OFFICE*

11.39 Prof Jess UEAB 2010Prof Jess UEAB UNDERSTANDING THE BUSINESS VALUE OF SYSTEMS AND MANAGING CHANGE