Presentation on theme: "PART IV: Chapter Topics"— Presentation transcript:
1 PART IV: Chapter Topics Chapter 10: Business Process & Information Systems DevelopmentTwo closely related and overlapping themes are examinedChapter 11: Information Systems ManagementGoal of the chapter is to give an appreciation for the responsibilities of IS management and to be an effective consumer of IS servicesChapter 12: Information Security ManagementProvides an overview of the major components of information systems security
2 Fox LakeChapter 10Examines how Fox Lake could define new business processes and an information system to support those processesChapter 11Investigates what Fox Lake is and is not doing with regard to management of IS resourcesChapter 12Discusses why Fox Lake’s information systems are particularly vulnerable to computer misuse and crime
3 Chapter 10 Business Process and Information Systems Jason C. H. Chen, Ph.D.Professor of MISSchool of Business AdministrationGonzaga UniversitySpokane, WA 99258
4 “You’re Not Going to Take Your Vera Wang Gown into a Porta Potty.” Bathrooms not cleaned on busy Saturdays or repaired on weekendsPlumbing not designed for large crowdsDidn’t think through consequences of wedding events business.Didn’t know how wedding business would impact everything else.Business analyst, Laura, hired to help
5 Study QuestionsQ1: Why do organizations need to manage business processes? Q2: What are the stages of Business Process Management (BPM)? Q3: How can BPMN process diagrams help identify and solve process problems? Q4: Which comes first, business processes or information systems? Q5: What are systems development activities? Q6: Why are business processes and systems development difficult and risky? Q7: What are the keys for successful process and systems development projects? Q8: 2022?
6 VideoThe Golden Rules for Managers 119 Incredible Lesson for Leadership Success (2:09)
7 What are Business Process and Business Process Management? Business process: A set of logically related tasks performed to achieved a defined business outcomeBusiness process management (BPM) is a management approach focused on aligning all aspects of an organization with the wants and needs of clients. It is a holistic management approach that promotes business effectiveness and efficiency while striving for innovation, flexibility, and integration with technology.Dr. Chen, The Trends of the Information Systems TechnologyTM -7
8 BUSINESS VALUE & FOCUS –IS Perspective IS/E-BUSINESSCustomercentricSCMCRMBPRERPDemandsProducts/ServicesValueWhat they need/want?How many they need/want?When they need/want?How to reach them?Who are the customers?Where are the customers?Their purchasing habitsHOW TO REACH THEM?IT/INTERNET/E-BUSINESSBusiness Models & Strategies
9 Q1: Why Do Organizations Need to Manage Business Processes? Reasons for changeImprove process qualityChange in technologyChange in business fundamentalsMarketProduct linesSupply chainCompany policyCompany organizationInternationalizationBusiness environment
10 Steps in Processing an Order Fig 10-1: Steps in Processing an Order
11 2: What Are the Stages of Business Process Management (BPM)? Systematic process of creating, assessing, altering business processes (and is an iteration process).Four stages of BPMCreate model of business process componentsUsers review and adjust model“As-is model” documents current process; it is changed to solve process problemsCreate system componentsUses five elements of IS (hardware, software, data, procedures, people)Implement business processCreate policy for ongoing assessment of process effectivenessAdjust and repeat cycles
12 Stages in the BPM Cycle     policy creation and assessment Four stages of BPMCreate model of business process components- Users review and adjust model- “As-is model” documents current process; it is changed to solve process problemsCreate system components- Uses five elements of IS (hardware, software, data, procedures, people)3. Implement business processCreate policy for ongoing assessment of process effectiveness- Adjust and repeat cyclesMRV never designed its processes, had no assessment program policy creation and assessmentFig 10-2: Stages in the BPM Cycle
13 Q/AT/F: Business Process Management (BPM) is a one-time process for systematically creating, assessing, and altering business processes.Answer: ______In business process management, once the as-is model is created, the team must ________.A) obtain feedback about implementationB) assess the results of the changesC) create system componentsD) implement changes in the organizationAnswer: ________
14 Scope of Business Process Management Fig 10-3: Scope of Business Process ManagementBPM can apply only to commercial, profit-making organizations but also nonprofit and government organizations
15 Q3: How Can BPMN Process Diagrams Help Identify and Solve Process Problems? Critical for a team to agree on both what is and what ought to be.Must have some notation for documenting processes and one common standard for creating process documentation.Dozens of definitions are used by authors, industry analysts, and software products.
16 Need for Standard for Business Processing Notation These differences and inconsistencies can be problematic when two different organizations with two different sets of definitions must work together.Object Management Group (OMG) created a standard set of terms and graphical notations for documenting business processes.That standard, called Business Process Modeling Notation (BPMN), is documented at
20 BPMN: Business Process Management _________ NotationQ/AT/F: In a BPMN process diagram, the swim-lane layout is used to simplify process diagrams and to draw attention to interactions among components of the diagram.Answer: ________
21 Using Process Diagrams to Identify Process Problems Operations Manager allocates inventory to orders as processedCredit Manager allocates customer credit for orders in process.Allocations correct, if order acceptedIf rejected, allocations not freed, inventory still allocated and credit extended for orders not processedPossible fix: Define an independent process for Reject Order (UYK#3 p.383)
22 How Can Business Processes Be Improved? Add more ________Adds costs unless efficiencies of scaleChange _______ structureReduce work and costsIncrease costs and increase effectiveness to offset_________
24 Fig 10-8: Fox Lake Wedding Planning and Facilities Maintenance Processes
25 Q4: Which Comes First, Business Processes or Information Systems? Fig 10-9: Fox Lake Processes Showing IS Components
26 Fig 10-10: Many-to-Many Relationship of Business Processes and Information Systems
27 Build Business Processes First next stageStarting from processes and working toward Information Systems (IS) is likely to work well for the business process under consideration, but will cause problems later, for other processes that use the same IS.-- why? 1) Cause IS resource constraint, 2) conflict of IS requirements etc. policy creation and assessmentStarting from processes and working toward Information Systems (IS) is likely to work well for the business process under consideration, but will cause problems later, for other processes that use the same IS.Fig 10-11: BPM and Systems Development
28 Build Information System First This development process makes business processes a poor step-child of the IS development process as BP can include many activities that are not part of the IS.Fig 10-12: Classic Five-Step Systems Development Life Cycle
29 Why systems development is needed? While you may be able to purchase an off-the-shelf software program, you won’t be able to do that with information systems. Here are some of the reasons why:You must construct or adapt procedures to fit the business and the people who will be using the system. You can’t buy procedures.People must be trained to use the information system effectively. You can’t buy that.Users must take ownership of their system. That’s the single most important criterion for the success of an information system.Information system maintenance involves two things:Fixing a system to make it do what it should have done in the first place, orAdapting it to changing requirements.
30 Systems Development Is Not Just for Techies Establishing the system’s goals, setting up the project, and determining requirements require business knowledge and management skill.Tasks such as building computer networks and writing computer programs require technical skills.Developing the other components requires nontechnical, human relations skills.
31 Nontechnical, Human Relations Skills Required Creating data models requires the ability to interview users and understand their view of the business activities.Designing procedures, especially those involving group action, requires business knowledge and an understanding of group dynamics.Developing job descriptions, staffing, and training all require human resource and related expertise.Coordinated teamwork of both specialists and nonspecialists with business knowledge.
32 How Do Businesses Use the SDLC Process? Systems definitionManagement’s statement of objective and goals for new systemRequirements analysisIdentify features and functionsComponent design (hardware, software, network)Based on approved user requirementsImplementationPurchase, build, test, and convert to new systemSystem maintenance (fix or enhance)Repair, add new features, maintainSee
33 Another Factor: Off-the-Shelf Software If starting with business processes firstLikely to choose package for processes being developed, but not for later processesIf starting with information systems firstLikely to choose package that works for all users, but, business processes will get short shrift.
34 And the Answer Is . . . In theory: In practice: Better to start with ___________________More likely to result in processes and systems that are aligned with the organization’s strategy and directionIn practice:Organizations take both approachesOff-the-shelf software:Start with business processes and select “off-the-shelf” application that works for those processesWhy?Off-the-shelf software:Start with business processes and select “off-the-shelf” application that works for those processesWhy? – ease of development and use (end-user can develop the apps by their own)
35 And the Answer Is . . . In theory: In practice: Better to start with ___________________More likely to result in processes and systems that are aligned with the organization’s strategy and directionIn practice:Organizations take both approachesOff-the-shelf software:Start with business processes and select application that works for those processes
36 Q/AWhich of the following is true for the relationship between business processes and information systems?A) Developing information systems before business processes ensures that all activities are considered in the development process.B) Information systems incorporate all business process activities, and hence should be developed before business processes.C) Starting from processes and working toward information systems is the best option to anticipate future demands and new business processes.D) Starting with processes and working toward systems is more likely to result in processes and systems that are aligned with the organization's strategy and direction.Answer: ______
37 SDLC What does SDLC stand for? List the phases of SDLC Systems Development Life CycleList the phases of SDLCAnalysisDesignImplementationMaintenance
38 4: What Are Systems Development Activities? Systems definitionManagement’s statement of objective and goals for new systemRequirements analysisIdentify features and functionsComponent design (hardware, software, network)Based on approved user requirementsImplementationPurchase, build, test, and convert to new systemSystem maintenance (fix or enhance)Repair, add new features, maintainAnalysis
39 4: What Are Systems Development Activities? [3a][3b](Feasibility Study)What is it and Why it is important?Fig 10-13: BPM Provides Requirements for Systems Development
40 Define System Goals and Scope Fig 10-14: SDLC: System Definition Phase
41 How Is System Definition Accomplished? (b.) Define scope for new systemDefined by customers, users involved, business processes impacted, physical location, functional areaClear definition of scope simplifiesRequirements determinationCoordination and other work
42 Assess Feasibility Dimensions of feasibility ______ feasibility Cost Approximated, “back-of-the-envelope” analysisPurpose: eliminate infeasible ideas earlyConsider cost of previous projects, operational and labor costs__________ feasibilityBall park estimateIs it technically likely to meet needs?_____________ feasibilityFit with customs, culture, charter, legal requirements of organization___________________ feasibilityIs the proposed system legally?CostScheduleTechnicalOrganizational
43 Systems Definition/Investigation (Feasibility Study) What are new from the last slide?EconomicFeasibilityOperationalFeasibilityCan we afford it?Will it be accepted?ScheduleFeasibilityTechnicalFeasibilityiTeaching Tip: Consider redisplaying slide 5 “Traditional Systems Development Life Cycle”, before beginning discussion of this lecture slide.As pointed out earlier, all application development methodologies share certain common activities. During the remainder of this lecture we will discuss these activities. We will begin by discussing systems investigation.The Investigation Phase begins the preliminary study of the proposed information system solution to meet the E-Business needs. Its focus is to seek to answer the questions: What are our opportunities, what are our priorities, and can IS be used to address these needs?Because the process of application development can be costly both in time and resources, the system investigation phase begins with a Feasibility Study. The goal of feasibility studies is to evaluate alternative systems and to propose the most feasible and desirable systems. Feasibility is assessed across four major categories:Organizational Feasibility. This focuses on how well a proposed information system supports the objectives of the organization.Technical Feasibility. This ascertains whether reliable hardware and software capable of meeting the needs of the proposed system can be acquired or developed.Operational Feasibility. This refers to the willingness and ability of the management, employees, customers, suppliers, and others to operate, use, and support a proposed system.Economic Feasibility. This is concerned with whether the proposed IS benefits are greater than its costs. This area is particularly concerned with financial affordability -- whether the firm can pay to develop the system. A cost/benefit analysis is used to weigh the total costs a new system is likely to incur against the total anticipated benefits to be gained. This includes determining tangible costs (such as hardware and software purchases and employee salaries) and intangible costs such as effects on employee morale and disruptions in productivity during the installation of the new system. Benefits too can be either tangible (such as reduced inventory and carrying costs) or intangible (higher customer satisfaction).Economic feasibility study – (cost-benefit analysis) – identifies the financial benefits and costs associated with the systems development projectOperational feasibility study – examines the likelihood that the project will attain its desired objectivesTechnical feasibility study – determines the organization’s ability to build and integrate the proposed systemSchedule feasibility study – assesses the likelihood that all potential time frames and completion dates will be metLegal and contractual feasibility study – examines all potential legal and contractual ramifications of the proposed systemWhich type of feasibility study would be appropriate for each of the following:Implementation of a new payroll systemImplementation of a new CRM systemImplementation of a new module to an existing CRM systemImplementation of a new ERP systemImplementation of a additional functionality to an existing KM systemWill it be completed bythe deadline?Does the ITcapability exist?OrganizationalFeasibilityLegal andContractual Feasibility(Is it a good fit –objective of the organizationIs the proposedsystem legally?
44 Form a Project Team Typical three personnel on a development team are: Manager (or mangers for larger projects)Specialist:System analystsProgrammersSoftware testersor, other functional specialist such as accounting, finance, and marketingUsers:Users must be involved in most of SDLC phasesDepending on nature of project, team may also include hardware and communications specialists, database designers and administrators, and other IT specialists.
45 Form a Project Team Team composition changes over time. During requirements definition, the team will be heavy with systems analysts.During design and implementation, it will be heavy with programmers, testers, and database designers.During integrated testing and conversion, the team will be augmented with testers and business users.
46 Business and Systems Analysts Business AnalystsSomeone who are well versed in Porter’s models, organizational strategy, and system alignment theory and who also understand the proper role for technology.IS professionalswho understand both business and technology.They are active throughout the systems development process and play a key role in moving the project through the systems development process.Systems analysts integrate the work of the programmers, testers, and users.
47 Fig 10-15: Focus of Personnel Involved in BPM and Systems Development
48 Phase Two: Requirements Analysis System Analysts are IS professionals who understand both business and technology.The most important phase in the SDLC process is to determine system requirements. If the requirements are wrong, the system will be wrong. Seven activities occur in this phase as the diagram shows.Users are a critical part of this phase. They must approve the requirements before moving to the next phase.Fig SDLC: Requirements Analysis Phase
49 Phase Three: Component Design: Design Tasks Pertain to Each of the Five IS Components All five components require attention in the design phase:Hardware—Determine the specifications and evaluate alternatives against the requirements. Purchase it, lease it, or lease time from hosting servicePrograms—Decide whether to use off-the-shelf software, off-the-shelf with alterations, or custom-developed software.Database—Convert the data model to a database design.Procedures—Design procedures for users, operations personnel, and for normal, backup, and failure recovery tasks.People—Design job descriptions for users and operations personnel. You may have to add new jobs or alter existing jobs.Fig 10-17: SDLC: Component Design Phase
50 Q/AT/F: If a project involves off-the-shelf programs, then little database design needs to be done.Answer: ________
51 Phase Four: Implementation Focuses on implementing the system and includes the tasks ofbuilding each of the five system componentstesting the systemandconverting users to the new system.Fig 10-18: SDLC: Implementation Phase
52 System Conversion Approaches PilotImplement entire system in limited portion of businessMRV uses system for selected customers.Advantage: limits exposure to business if system failsPhasedSystem is installed in phases or modules.Each piece is installed and tested.ParallelComplete new and old systems run simultaneouslyVery safe, but expensivePlunge (or direct)High risk if new system fails, no old system to fall back onOnly used if new system is not vital to company operation
53 Installation Conversion Methods: 4 Ps Cut-over timeOld SystemNew SystemParallelOld SystemNew SystemPilotWhen the development of a system will replace or improve a current system, a conversion process will be needed. Conversion methods are used for managing system change and managing both the cost and risk associated with a failure of the new system..Four major forms of system conversion are common:Parallel. This involves operating both the old and the new system at the same time for some period until the project development team and end user management agree to switch over completely to the new system. This is the least risky approach but the most costly, since resources must be used to keep both the new and old system operational.Pilot. Here one department or often an off-site office gives the new system a trial run to see how it works and to catch any problems before the system is implemented company-wide. This is a less costly approach. Risk of failure is isolated to the department or office which receives the new system.Phased. Here the new system is implemented gradually throughout the organization according to some diffusion plan, such as department by department, section by section, or even floor by floor. This approach exposes the organization to more risk, but is less costly.Plunge. This "cold turkey" approach ends use of the old system and begins use of the new system all at once. This approach has the highest risk, but is the least costly to implement. Can be considered for non-critical applications, or application improvements that are marginal.Old SystemNew SystemPhasedOld SystemNew SystemPlunge/Direct
54 Design and Implementation for the Five Components Fig 10-19: Design and Implementation for the Five Components
56 Causes of Information Systems Failures 35+ years of research on causes of information systems failuresLack of user __________Unclear, incomplete, and inconsistent ___________Changing requirements and specificationsMany businesses __________ research findingsinvolvement.requirements.ignore
57 Q6: Why Are Business Processes and Systems Development Difficult & Risky? SDLC ________Sequence of nonrepeated phasesIt rarely works smoothly, causing development team to go back and forth, raising costs and delaying projectRequirements documentation difficultyBusiness requirements sometimes change making documented requirements incomplete or obsolete“Analysis paralysis”—projects spend so much time on documentation that it hampers progressScheduling and budgeting difficultiesTime and cost estimates for large project are usually way offPeople who make initial estimates know little about how long it will take or cost
58 Q6. Why Are Business Processes and Systems Development Difficult & Risky? (cont.) Changing TechnologyWhile the project is underway, technology continues to change.Diseconomies of ScaleAs development teams become larger, the average contribution per worker decreases.Brooks’ Law:Adding more people to a late project makes the project later.
59 1a 1b 2 3 4 Fig 10-21: Major Challenges to System Development Requirements documentation difficultyBusiness requirements sometimes change making documented requirements incomplete or obsolete“Analysis paralysis”—projects spend so much time on documentation that it hampers progressScheduling and budgeting difficultiesTime and cost estimates for large project are usually way offPeople who make initial estimates know little about how long it will take or costChanging TechnologyWhile the project is underway, technology continues to change.Diseconomies of ScaleAs development teams become larger, the average contribution per worker decreases.Brooks’ Law:Adding more people to a late project makes4Fig 10-21: Major Challenges to System Development
60 Q7: What Are the Keys for Successful Process and Systems Development Projects? Create a work-breakdown structure (WBS)Break project into smaller tasks until each task is small enough to estimate and manageEvery task results in deliverablesEstimate time and costsCreate a project planAdjust the plan via trade-offsManage development challenges
61 Fig 10-22: Create a Work-Breakdown Structure (WBS)
62 Gantt Chart of the WBS for the Definition Phase of a Project
63 Create a Project Plan: Gantt Chart with Assigned Resources & Critical Path
64 Project Triangle (Project Management Trade-offs) TimeCostThe center of project triangle is________Scope (Requirements)The objective of the PM is to define project’s scope realistically and ultimately deliver quality of product/service on time, on budget and within scope.
65 Trade-Offs in Requirements, Cost, and Time? Balancing development driversRequirements (scope)CostTimeTrade-offsElaborate requirements increase costs and timeTime can be reduced to a point w/o adding costsIncreasing time may reduce or increase costsIf schedule needs to be shortened, two alternatives available: reduce requirements or add laborAdding more people creates diseconomies of scale (Brooks’ Law)
66 Insert Figure 10-12 here (Figure CE19-2 in Experiencing MIS 2/e) Adjust Plan via Trade-offs: Trade-offs Among Requirements, Schedule, and Cost?Insert Figure here (Figure CE19-2 in Experiencing MIS 2/e)
67 Manage Development Challenges Critical FactorsCoordinationDiseconomies of scaleConfiguration controlUnexpected eventsTeam morale
68 Q8: 2022? Users more knowledgeable and demanding More agile systems using SOA and other techniquesMore Cloud-based developmentEmergence of new software vendor business models