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Management Information Systems II. Oskar Szumski, PhD

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1 Management Information Systems II. Oskar Szumski, PhD
Management Information Systems II Oskar Szumski, PhD University of Warsaw Faculty of Management

2 Agenda IT Infrastructure and Emerging Technologies
Telecommunications, the Internet and Wireless Technology Information Systems, Organizations, and Strategy Technology management Building Information Systems Enterprise Architecture, IT Governance and IT Portfolio Management

3 Final exam 20-30 test questions, four possibilities of reply, only one is true 2-3 open questions It will cover all material for MIS lecture Date of test: (14:00) A221

4 Materials for MIS II 4cFqXhGt95N (11 characters)
> Lista wykładowców > Szumski Oskar > Materiały do zajęć > MIS

5

6 ? Computer systems are complex and often link multiple traditional systems potentially supplied by different software vendors Common dilemma is how to use IT in effective and efficient way

7 IT Infrastructure and Emerging Technologies

8 Learning objectives What are the stages and technology drivers of IT infrastructure evolution? What are the current trends in computer hardware platforms and in software platforms? What are the challenges of managing IT infrastructure and management solutions?

9 IT infrastructure IT infrastructure consists of a set of physical devices and software applications that are required to operate the entire enterprise

10 Connection between the firm, IT infrastructure and business capabilities

11 Stages in IT Infrastructure evolution_1

12 Stages in IT Infrastructure evolution_2

13 Technology drivers of infrastructure evolution_1
Moore’s Law and Microprocessing Power In 1965, Gordon Moore, the directory of Fairchild Semiconductor’s Research and Development Laboratories, an early manufacturer of integrated circuits, wrote in Electronics magazine that since the first microprocessor chip was introduced in 1959, the number of components on a chip with the smallest manufacturing costs per component (generally transistors) had doubled each 18 months. This law would later be interpreted in multiple ways. There are at least three variations of Moore’s Law, none of which Moore ever stated: (1) the power of microprocessors doubles every 18 months; (2) computing power doubles every 18 months; (3) the price of computing falls by half every 18 months year. This assertion became the foundation of Moore’s Law. Moore later reduced the rate of growth to a doubling every two years The Law of Mass Digital Storage The world produces as much as 5 exabytes of unique information per year (an exabyte is a billion gigabytes, or 1018 bytes). The amount of digital information is roughly doubling every year (Lyman and Varian, 2003). Fortunately, the cost of storing digital information is falling at an exponential rate of 100 percent a year. The number of kilobytes that can be stored on magnetic media for $1 from 1950 to the present roughly doubled every 15 months

14 Technology drivers of infrastructure evolution_2
Metcalfe’s Law and Network Economics Robert Metcalfe - inventor of Ethernet local area network technology - claimed in 1970 that the value or power of a network grows exponentially as a function of the number of network members. Metcalfe and others point to the increasing returns to scale that network members receive as more and more people join the network. As the number of members in a network grows linearly, the value of the entire system grows exponentially and continues to grow forever as members increase. Demand for information technology has been driven by the social and business value of digital networks, which rapidly multiply the number of actual and potential links among network members Declining Communications Costs and the Internet Continues declining cost of communication both over the Internet and over telephone networks (which increasingly are based on the Internet). As communication costs fall toward a very small number and approach 0, utilization of communication and computing facilities explodes.

15 How many people worldwide have now Internet access?
1 10 100 1000 10000 100000 ……?

16 WORLD INTERNET USAGE AND POPULATION STATISTICS June 30, 2012 *
Yes – it’s truth! WORLD INTERNET USAGE AND POPULATION STATISTICS June 30, 2012 * World Regions Population (2012 Est.) Internet Users (Dec. 31, 2000) Internet Users (Latest Data) Penetration (% population) Growth Users % of Table Africa 1,073,380,925 4,514,400 167,335,676 15.6 % 3,606.7 % 7.0 % Asia 3,922,066,987 114,304,000 1,076,681,059 27.5 % 841.9 % 44.8 % Europe 820,918,446 105,096,093 518,512,109 63.2 % 393.4 % 21.5 % Middle East 223,608,203 3,284,800 90,000,455 40.2 % 2,639.9 % 3.7 % North America 348,280,154 108,096,800 273,785,413 78.6 % 153.3 % 11.4 % Latin America / Carib. 593,688,638 18,068,919 254,915,745 42.9 % 1,310.8 % 10.6 % Oceania / Australia 35,903,569 7,620,480 24,287,919 67.6 % 218.7 % 1.0 % WORLD TOTAL 7,017,846,922 360,985,492 2,405,518,376 34.3 % 566.4 % 100.0 % *

17 The IT infrastructure ecosystem

18 Contemporary hardware platform trends
the emerging mobile digital platform (smartphones, netbooks, and tablet computers) grid computing virtualization cloud computing green computing autonomic computing high-performance and power-saving processors

19 Contemporary software platform trends
Linux and open source software software for the web: JAVA and AJAX web services and service-oriented architecture software outsourcing and cloud services

20 Making wise infrastructure investments
Total cost of ownership (TCO) of technology assets - hardware and software acquisition costs account for only about 20% of TCO

21 Total Cost of Ownership (TCO) cost components
Infrastructure component Cost components Hardware acquisition Purchase price of computer hardware equipment, including computers, terminals, storage,and printers Software acquisition Purchase or license of software for each user Installation Cost to install computers and software Training Cost to provide training for information systems specialists and end users Support Cost to provide ongoing technical support, help desks, and so forth Maintenance Cost to upgrade the hardware and software Infrastructure Cost to acquire, maintain, and support related infrastructure, such as networks and specialized equipment (including storage backup units) Downtime Cost of lost productivity if hardware or software failures cause the system to be unavailable for processing and user tasks Space and energy Real estate and utility costs for housing and providing power for the technology

22 Competitive forces model for IT infrastructure

23 Telecommunications, the Internet, and Wireless Technology

24 Learning objectives What are the principal components of telecommunications networks and key networking technologies? How do the Internet and Internet technology work and how do they support communication and e-business?

25 Corporate network infrastructure

26 Key digital networking technologies
Client/Server Computing Packet Switching TCP/IP and connectivity

27 Communications networks
Local area network (LAN) Metropolitan area network (MAN) Wide area network (WAN)

28 Physical transmission media
Twisted wire Coaxial cable Fiber optics and optical networks Wireless transmission media (microwave, cellular, Wi-Fi)

29 The global internet The Internet has become the world’s most extensive, public communication system that now rivals the global telephone system in reach and range. It’s also the world’s largest implementation of client/server computing and internetworking, linking millions of individual networks all over the world.

30 Internet – how does it work?
An Internet service provider (ISP) is a commercial organization with a permanent connection to the Internet that sells temporary connections to retail subscribers Internet Protocol (IP) address Domain Name System (DNS) converts domain names to IP addresses Internet policies are established by a number of professional organizations and government bodies, including the Internet Architecture Board (IAB), which helps define the overall structure of the Internet; the Internet Corporation for Assigned Names and Numbers (ICANN), which assigns IP addresses; and the World Wide Web Consortium (W3C), which sets Hypertext Markup Language and other programming standards for the Web

31 Major internet services
CAPABILITY FUNCTIONS SUPPORTED Person-to-person messaging; document sharing Chatting and instant messaging Interactive conversations Newsgroups Discussion groups on electronic bulletin boards Telnet Logging on to one computer system and doing work on another File Transfer Protocol (FTP) Transferring files from computer to computer World Wide Web Retrieving, formatting, and displaying information (including text,audio, graphics, and video) using hypertext links

32 Internet communication tools
Voice over IP (VoIP) A virtual private network (VPN) is a secure, encrypted, private network that has been configured within a public network to take advantage of the economies of scale and management facilities of large networks, such as the Internet

33 The Web - components Hypertext Markup Language (HTML) Web Servers
Search Engines Web 2.0 Web The Future Web?

34 Web 1.0 / 2.0 / 3.0 summary

35

36

37

38 Radio-frequency identification (RFID)
RFID is an automatic identification method, relying on storing and remotely retrieving data using devices called RFID tags or transponders. The technology requires some extent of cooperation of an RFID reader and an RFID tag. An RFID tag is an object that can be applied to or incorporated into a product, animal, or person for the purpose of identification and tracking using radio waves. Some tags can be read from several meters away and beyond the line of sight of the reader.

39 RFID tag Most RFID tags contain at least two parts. One is an integrated circuit for storing and processing information, modulating and demodulating a radio-frequency (RF) signal, and other specialized functions. The second is an antenna for receiving and transmitting the signal. Size of tags: from 0,05 mm × 0,05 mm Working distance: from 0,1m to 10m

40 Types of RFID tags RFID tags come in three general varieties:
passive (tags require no internal power source, they are only active when a reader is nearby to power them by wireless illumination), active (tags require a power source, usually a small battery), beacon (tags transmit autonomously with a certain blink pattern and do not respond to interrogation)

41 Communication To communicate, tags respond to queries generating signals that must not create interference with the readers, as arriving signals can be very weak and must be differentiated. Besides backscattering, load modulation techniques can be used to manipulate the reader's field. Typically, backscatter is used in the far field, whereas load modulation applies in the nearfield, within a few wavelengths from the reader.

42 RFID technology in practice
RFID reader sends a radio signal signal transfer Tag sends data to the RFID transmitter API (Application Programming Interface) Database layer Application Layer (eg. ERP)

43 RFID: tag-reader-computer

44 RFID Reference Model Created in 2007 by CE RFID (Coordinating European Efforts for Promoting the European RFID Value Chain) It covers to areas: Mainly Object Tagging Tagging with Reference or Potential Reference to Individuals

45 RFID Reference Model

46 RFID - Mainly object tagging

47 RFID - Tagging with reference to individuals

48 Example: Intel Connected Store

49 Information Systems, Organizations, and Strategy

50 The two-way relationship between organizations and information technology

51 Features of organizations
Routines and Business Processes Routines (standard operating procedures) are precise rules, procedures, and practices that have been developed to cope with virtually all expected situations Business processes are collections of such routines Organizational Politics political struggle for resources, competition, and conflicts within organization Organizational Culture Organizational Environments Organizational Structure Other Features

52 Disruptive technologies: winners and losers
Technology Description Winners and losers Microprocessor chips (1971) Thousands and eventually millions of transistors on a silicon chip Microprocessor firms win (Intel, Texas Instruments) while transistor firms (GE) decline. Personal computers (1975) Small, inexpensive, but fully functional desktop computers PC manufacturers (HP, Apple, IBM), and chip manufacturers prosper (Intel), while mainframe (IBM) and minicomputer (DEC) firms lose. PC word processing software (1979) Inexpensive, limited but functional text editing and formatting for personal computers PC and software manufacturers (Microsoft, HP, Apple) prosper, while the typewriter industry disappears. World Wide Web (1989) A global database of digital files and “pages” instantly available Owners of online content and news benefit, while traditional publishers (newspapers, magazines, broadcast television) lose. Internet music services (1998) Repositories of downloadable music on the Web with acceptable fidelity Owners of online music collections (MP3.com, iTunes), telecommunications providers who own Internet backbone (AT&T, Verizon), local Internet service providers win, while record label firms and music retailers lose (Tower Records). PageRank algorithm A method for ranking Web pages in terms of their popularity to supplement Web search by key terms Google is the winner (they own the patent), while traditional key word search engines (Alta Vista) lose. Software as Web service Using the Internet to provide remote access to online software Online software services companies (Salesforce.com) win, while traditional “boxed” software companies (Microsoft, SAP, Oracle) lose.

53 How information systems impact organizations
Economic impacts IT reduces both agency and transaction costs for firms, we should expect firm size to shrink over time as more capital is invested in IT. Firms should have fewer managers, and we expect to see revenue per employee increase over time Organizational and behavioral impacts IT flattens organizations (IT pushes decision-making rights lower in the organization because lower-level employees receive the information they need to make decisions without supervision) Postindustrial organizations (authority increasingly relies on knowledge and competence, and not merely on formal positions) Understanding organizational resistance to change The internet and organizations The Internet increases the accessibility, storage, and distribution of information and knowledge for organizations

54 Implications for the design of information systems
Organizational factors necessary to consider during planning a new system: environment in which the organization must function structure of the organization: hierarchy, specialization, routines, and business processes organization’s culture and politics type of organization and its style of leadership principal interest groups affected by the system and the attitudes of workers who will be using the system kinds of tasks, decisions, and business processes that the information system is designed to assist

55 Porter’s competitive forces model

56 Information system strategies for dealing with competitive forces
Low-cost leadership - Use information systems to achieve the lowest operational costs and the lowest prices Product differentiation - Use information systems to enable new products and services, or greatly change the customer convenience in using your existing products and services. mass customization - ability to offer individually tailored products or services using the same production resources as mass production Focus on market niche - Use information systems to enable a specific market focus, and serve this narrow target market better than competitors Strengthen customer and supplier intimacy - Use information systems to tighten linkages with suppliers and develop intimacy with customers.

57 Impact of the internet on competitive forces and industry structure
Substitute products or services Enables new substitutes to emerge with new approaches to meeting needs and performing functions Customers’ bargaining power Availability of global price and product information shifts bargaining power to customers Suppliers’ bargaining power Procurement over the Internet tends to raise bargaining power over suppliers; suppliers can also benefit from reduced barriers to entry and from the elimination of distributors and other intermediaries standing between them and their users Threat of new entrants The Internet reduces barriers to entry, such as the need for a sales force, access to channels, and physical assets; it provides a technology for driving business processes that makes other things easier to do Positioning and rivalry among existing competitors Widens the geographic market, increasing the number of competitors, and reducing differences among competitors; makes it more difficult to sustain operational advantages; puts pressure to compete on price

58 The business value chain model
The value chain model highlights specific activities in the business where competitive strategies can best be applied and where information systems are most likely to have a strategic impact Primary activities are most directly related to the production and distribution of the firm’s products and services, which create value for the customer Support activities make the delivery of the primary activities possible Benchmarking involves comparing the efficiency and effectiveness of your business processes against strict standards and then measuring performance against those standards Industry best practices are usually identified by consulting companies and research organizations as the most successful solutions or problem-solving methods for consistently and effectively achieving a business objective

59 The value chain model

60 Extending the Value Chain – The Value Web
A value web is a collection of independent firms that use information technology to coordinate their value chains to produce a product or service for a market collectively It is more customer driven and operates in a less linear fashion than the traditional value chain

61 The value web

62 Network-based strategies
Network Economics Business models based on a network may help firms strategically by taking advantage of network economics. In a network law of diminishing returns does not work - the marginal costs of adding another participant are about zero, whereas the marginal gain is much larger Virtual Company Model Virtual organization, uses networks to link people, assets, and ideas, enabling it to ally with other companies to create and distribute products and services without being limited by traditional organizational boundaries or physical locations. One company can use the capabilities of another company without being physically tied to that company Business Ecosystems: Keystone and Niche Firms Business ecosystem is term for loosely coupled but interdependent networks of suppliers, distributors, outsourcing firms, transportation service firms, and technology manufacturers. Business ecosystems can be characterized as having one or a few keystone firms that dominate the ecosystem and create the platforms used by other niche firms

63 An ecosystem strategic model

64 Using systems for competitive advantage
Sustaining competitive advantage Aligning it with business objectives Managing strategic transitions

65 Technology Management
Technology Management can be defined as the integrated planning, design, optimization, operation and control of technological products, processes and services. Technology Management is set of management disciplines that allows organization to manage its technological fundamentals to create competitive advantage. Role of technology management function in organization is to understand the value of certain technology for the organization. Continuous development of technology is valuable as long as there is a value for the customer and therefore technology management function in organization should be able to argue when to invest on technology development and when to withdraw.

66 Typical concepts used in technology management
technology strategy (a logic or role of technology in organization), technology mapping (identification of possible relevant technologies for the organization), technology roadmapping (a limited set of technologies suitable for business), technology project portfolio (a set of projects under development), technology portfolio (a set of technologies in use).

67 Technology Strategy

68 Technology mapping

69 Technology roadmap for systems beyond 3G

70 Technology portfolio - example
JK Technosoft (JKT) is a global software & solutions company that is driven by the simple yet powerful tenet of providing ‘total customer satisfaction’

71 generations.arc.nasa.gov

72 How can we forecast future?

73 Building Information Systems
73

74 4 kinds of structural organizational change enabled by IT
Automation Increase efficiency, replace manual tasks Rationalization Streamline standard operating procedures Business process reengineering (BPR) Analyze, simplify, and redesign business processes Paradigm shifts Rethink nature of business, define new business model, change nature of organization This slide discusses the different types of organizational change that information systems can enable. You can ask students to give examples of each type of change within the context of an example of a business, for example, a pizza chain. Or, provide examples of change, and ask students to determine what category that change falls into. For example, what type of organizational change is involved when a business implements its first accounting software? What kind of change was brought by PC Connection’s new system, described on the previous slide? 74

75 Organizational change carries risks and rewards
This graphic illustrates the four types of change, identifying them according to the potential return on investment as well as level of risk. What makes automation a low risk? What makes a paradigm shift or reengineering a high risk? It is important to note that BPR and paradigm shifts have high failure rates. Ask the students why this is so. (Organizational change is difficult to orchestrate.) The most common forms of organizational change are automation and rationalization. These relatively slow-moving and slow-changing strategies present modest returns but little risk. Faster and more comprehensive change—such as reengineering and paradigm shifts—carries high rewards but offers substantial chances of failure. 75

76 Business process reengineering (BPR)
Large payoffs can result from redesigning business processes Home mortgage industry used IT to redesign mortgage application process BEFORE: 6- to 8-week process costing $3000 AFTER: 1-week process costing $1000 Replaced sequential tasks with “work cell” or team approach Work flow management: Process of streamlining business procedures so documents can be moved easily and efficiently This slide discusses the large returns on investment that can be received by radically reengineering existing business processes, as exemplified by the restructuring of the home mortgage application process. Ask students what took so long in the original business process of applying for a mortgage. (Paper application, individual reviews from 6-8 departments in sequence). What is different about the new process (Digital application, departments access and approve concurrently.) The banks used work flow and document management software to implement these new procedures, which allowed electronic routing of documents and automating the process. What are some of the other advantages of document management software (immediate transfer, indexing documents for user retrieval, two people being able to simultaneously working on the document.) 76

77 Redesigning mortgage processing in the United States
By redesigning their mortgage processing systems and the mortgage application process, mortgage banks have been able to reduce the costs of processing the average mortgage from $3,000 to $1,000 and reduce the time of approval from six weeks to one week or less. Some banks are even preapproving mortgages and locking interest rates on the same day the customer applies. This slide’s graphic illustrates the process of applying for an approving a home mortgage prior to reengineering (the graphic is continued on the next page). This portion emphasizes the sequential nature of the task as a “desk-to-desk” approach. Besides the time taken for this process, what are other disadvantages of the desk-to-desk approach? 77

78 Redesigning mortgage processing in the United States
This graphic illustrates the mortgage application process after process reengineering, which as reduced some 11 plus stages to three or four. What are the elements that have allowed these steps to occur? (Use of digital documents and document management software, ability for steps to be taken concurrently.) Ask the students if a team approach (“work cell”) is always superior to a desk-to-desk approach. In what cases might a desk-to-desk approach be necessary or preferable? (If the work at one step must be completed prior to another step.) 78

79 Steps in effective reengineering
Determine which business processes should be improved Must avoid becoming good at the wrong process Understand how improving the right processes will help the firm execute its business strategy Understand and measure performance of existing processes as a baseline Even with effective BPR, majority of reengineering projects do not achieve breakthrough gains because of inadequate change management This slide emphasizes the riskiness of business process reengineering and the need to properly manage it in order for BPR to be effective. Ask students why each of these three steps listed is important. For example, why is it important to determine the right business process to change rather than all business processes (some processes may not yield time or cost savings, you could spend too much money on working on all processes, some processes may already be effective.) Give students an example of a business process and ask how the process could be measured. For example, how would you measure the business process of a customer ordering a meal? Of a kitchen preparing and delivering that meal? What about the business process of hiring a new employee? 79

80 Business process management (BPM)
Helps firms manage incremental process changes Uses process-mapping tools to: Identify and document existing processes Create models of improved processes that can be translated into software systems Measure impact of process changes on key business performance indicators The next three slides discuss ways in which business processes can be managed in incremental or ongoing ways, rather than as a massive BPR systems project. This slide discusses one method, the use of BPM. The text discusses the example of American National Insurance Company, which used BPM to streamline customer service processes across four business groups. BPM built rules to guide service reps through a single view of customer information across multiple systems, eliminating the need to access multiple applications when handling customer requests. This increased workload capacity of the representatives 192%. 80

81 Capabilities of BPM software
Work flow management Business process modeling notation Quality measurement and management Change management Tools for standardizing business processes (they can be continually manipulated) Process monitoring and analytics (verifies process performance and measures impact of process changes on key business performance indicators) This slide lists the typical capabilities of business process management software. Ask students if this type of methodology, (BPM), would be suitable to certain types of industries or companies more than others – and if so, what types? 81

82 Quality management Fine-tuning business processes to improve quality in their products, services, and operations The earlier in the business cycle a problem is eliminated, the less it costs the company Quality improvements raise level of product and service quality as well as lower costs The next two slides discuss a second method of managing incremental or ongoing attention to improving business processes: quality management. Ask students to explain why the earlier a problem is eliminated, the less money it costs. What types of costs might result from a quality problem in customer profile data? In the packaging of a household cleaner? What types of quality problems in products or services have students encountered in their own experiences? 82

83 Quality management (cont.)
Total Quality Management (TQM): Achievement of quality control is end in itself Everyone is expected to contribute to improvement of quality Focuses on continuous improvements rather than dramatic bursts of change Six sigma: Specific measure of quality 3.4 defects per million opportunities Uses statistical analysis tools to detect flaws in the execution of an existing process and make minor adjustments This slide discusses two main methods of improving quality. Ask students to evaluate the two methods. Would one be better in some industries or types of businesses over the other method? Which method would be better for a restaurant chain? Which would be better for a clothing manufacturer? Why? 83

84 Information systems support quality improvements
Simplify products or processes Make improvements based on customer demands Reduce cycle time Improve quality and precision of design and production Meet benchmarking standards Benchmarking: Setting strict standards for products, services, and other activities, and then measuring performance against those standards This slide discusses the role information systems can play in improving quality. Why does simplification help improve quality? Why does a reduce cycle time help improve quality? How do companies come up with the standards to set for benchmarking. (Industry standards, standards set by other companies, internal standards, or a combination of these.) 84

85 Overview of systems development
Systems development - activities that go into producing an information system solution to an organizational problem or opportunity Systems analysis Systems design Programming Testing Conversion Production and maintenance The next slides discuss the activities involved in system development – the creation of a new (or improvements to an existing) information system. The activities listed are performed in order – the first two, systems analysis and systems design are preparatory steps for the system. The last four steps translate the design of the system into actuality. It is important to emphasize that an information system is not technology for technology’s sake, it is a solution to a problem or set of problems the organization perceives it is facing – including the problem of an opportunity that requires the use of information systems in order to undertake. What problems with business processes have students encountered or witnessed in their work or educational career that could have been improved with the help of a new or improved information system? 85

86 The Systems Development Process
This graphic illustrates the six core activities of systems building. Ask students why these activities are represented as a circle. The circular nature indicates that systems building is not a linear process that is finished once the system is built. Typically, additional changes and improvements will need to be made to the system or part of the system that will require additional analysis, design, programming, testing, conversion, and maintenance. Building a system can be broken down into six core activities. 86

87 Systems analysis Analysis of problem that will be solved by system
Defining the problem and identifying causes Specifying solutions Systems proposal report identifies and examines alternative solutions Identifying information requirements Includes feasibility study Is solution feasible from financial, technical, organizational standpoint Is solution a good investment? Is required technology, skill available? This slide and the next describe the first stage of systems development, systems analysis. The systems analyst first creates a road map of the existing organization and systems. What does this road map consist of? (Identifying primary owners and users of data along with existing hardware and software.) What constitutes a primary owner of data? Ask students how an analyst would determine if a problem existed with existing systems. (He/she would examine documents, work papers, procedures, observe system operations, interview key users). What does it mean that a solution is feasible from a financial standpoint? A technical standpoint? An organizational standpoint? 87

88 System analysis (cont.)
Establishing information requirements Who needs what information, where, when, and how Define objectives of new/modified system Detail the functions new system must perform Faulty requirements analysis is leading cause of systems failure and high systems development cost This slide continues the discussion about the first stage in systems development, systems analysis. Establishing information requirements is an essential part of analysis. A system designed around the wrong set of requirements will either have to be discarded because of poor performance or will need to undergo major modifications. As the text discusses later in the chapter, user involvement is essential for gathering requirements. Why is this so? If user involvement is central to gathering information requirements, why should technical specialists, such as systems analysts, also be involved in this process? 88

89 Systems design Describes system specifications that will deliver functions identified during systems analysis Should address all managerial, organizational, and technological components of system solution Role of end users User information requirements drive system building Users must have sufficient control over design process to ensure that system reflects their business priorities and information needs Insufficient user involvement in design effort is major cause of system failure This slide describes the second stage of systems development, systems design. The text explains that like houses or buildings, information systems may have many possible designs. Each design represents a unique blend of all technical and organizational components. What makes one design superior to others is the ease and efficiency with which it fulfills user requirements within a specific set of technical, organizational, financial, and time constraints.” Given an identical systems analysis, what elements might be different in a system design created by two different systems designers? 89

90 Design specifications
OUTPUT Medium Content Timing INPUT Origins Flow Data entry USER INTERFACE Simplicity Efficiency Logic Feedback Errors DATABASE DESIGN Logical data model Volume and speed requirements File organization and design Record specifications PROCESSING Computations Program modules Required reports Timing of outputs MANUAL PROCEDURES What activities Who performs them When How Where CONTROLS Input controls (characters, limit, reasonableness) Processing controls (consistency, record counts) Output controls (totals, samples of output) Procedural controls (passwords, special forms) SECURITY Access controls Catastrophe plans Audit trails DOCUMENTATION Operations documentation Systems documents User documentation CONVERSION Transfer files Initiate new procedures Select testing method Cut over to new system TRAINING Select training techniques Develop training modules Identify training facilities ORGANIZATIONAL CHANGES Task redesign Job redesign Process design Organization structure design Reporting relationships This slide lists the various types of specifications that must be detailed and describe in a systems design. From this it is easy to see how complex designing a system can be, and how many opportunities there are for mistakes to creep in. Problems in any one of these areas could produce a less-than optimal system and losses in efficiency and productivity. Select a few of the specifications here and ask students what types of problems could result from an inadequate definition of that specification. 90

91 Programming and testing
System specifications from design stage are translated into software program code Software may be purchased, leased, or outsourced instead Testing To ensure system produces right results Unit testing: Tests each program in system separately System testing: Tests functioning of system as a whole Acceptance testing: Makes sure system is ready to be used in production setting Test plan: All preparations for series of tests This slide describes the third and fourth stages of systems development, programming and testing. Many companies today do not perform their own programming, but purchase software or outsource programming to a vendor. In outsourcing, who would be responsible for the testing, the vendor or the purchasing company? Would any testing be needed when software is purchased as a package? It is important to note that the importance of testing is typically underrated in systems project planning, and the risks resulting from inadequate testing are enormous. Ask students why, if system testing is performed that checks the entire system, would unit testing be important. 91

92 A sample test plan to test a record change
This graphic illustrates a portion of a test plan. Ask students to describe what the columns of this table mean. It looks at six different possible situations, given a user of the system attempting to change a record in the database, from trying to change an existing address in the system (2.1) to not completing the record change (2.6). Ask students what they understand about system testing from looking at this example. When developing a test plan, it is imperative to include the various conditions to be tested, the requirements for each condition tested, and the expected results. Test plans require input from both end users and information systems specialists. 92

93 Conversion Process of changing from old system to new system
Four main strategies Parallel strategy Direct cutover Pilot study Phased approach Requires end-user training Finalization of detailed documentation showing how system works from technical and end-user standpoint This slide describes the fifth stage of systems development, conversion. Ask students to describe each of the strategies. What would make one approach more appropriate than another? Is there any case in which a direct cutover would be the optimal strategy? 93

94 Production and maintenance
System reviewed to determine if any revisions needed May prepare formal postimplementation audit document Maintenance Changes in hardware, software, documentation, or procedures to a production system to correct errors, meet new requirements, or improve processing efficiency 20% debugging, emergency work 20% changes to hardware, software, data, reporting 60% of work: User enhancements, improving documentation, recoding for greater processing efficiency This slide describes the sixth and final stage of systems development, production and maintenance, and shows that an information system is never “finished.” Ask the students to discuss if any of the types of maintenance work listed here could be eliminated by better analysis and design? 94

95 Summary of systems development activities
CORE ACTIVITY DESCRIPTION Systems analysis Identify problem(s) Specify solutions Establish information requirements Systems design Create design specifications Programming Translate design specifications into code Testing Unit test Systems test Acceptance test Conversion Plan conversion Prepare documentation Train users and technical staff Production and maintenance Operate the system Evaluate the system Modify the system This slide summarizes the six stages in system development. Ask students what the difference is between information requirements and design specifications. 95

96 Methodologies for modeling
Most prominent methodologies for modeling and designing systems: Structured methodologies Object-oriented development Structured: Techniques are step-by-step, progressive Process-oriented: Focusing on modeling processes or actions that manipulate data Separate data from processes This slide identifies the two most prominent methodologies for modeling systems and introduces the core concepts behind a structured methodology. Ask students what a process is or to give an example of a process. What does it mean to “separate data from processes?” 96

97 Methods Data flow diagram:
Primary tool for representing system’s component processes and flow of data between them Offers logical graphic model of information flow High-level and lower-level diagrams can be used to break processes down into successive layers of detail Data dictionary: Defines contents of data flows and data stores Process specifications: Describe transformation occurring within lowest level of data flow diagrams Structure chart: Top-down chart, showing each level of design, relationship to other levels, and place in overall design structure This slide continues the discussion of the structured methodology, looking at the tools and techniques that it uses to model an information system. An example data flow diagram is shown on the next slide, so it may be helpful to move to that slide to discuss these diagrams. A data dictionary is needed so that system builders know exactly what data is stored and manipulated. Process specifications express the logic that is used when one piece of data is transformed by a process. A structure chart looks at the main function of the system, breaks it down into subfunctions, breaks subfunctions into further functions, until the smallest level of detail is reached. Ask students to give an example of what the smallest level of detail might look like, for example, in a university system managing student grades and reports. 97

98 Data Flow Diagram for Mail-In University Registration System
The system has three processes: Verify availability (1.0), Enroll student (2.0), and Confirm registration (3.0). The name and content of each of the data flows appear adjacent to each arrow. There is one external entity in this system: the student. There are two data stores: the student master file and the course file. This graphic is a data flow diagram. Ask students what the rounded boxes represent (processes) and what the square box represents (an external entity). What about the open rectangle and the arrows? Where does the process begin? Ask a student to step through the process of registering a student for a course, noting what data is transferred at each step. It’s always fun to do data flow diagrams as a group because it illustrates how the same process is seen differently by different people. 98

99 High-Level Structure Chart for a Payroll System
This graphic shows a high-level structure chart. Note that this is high-level – and subfunctions exist for the functions “Get inputs,” “Validate inputs,” etc. What might be a subfunction for “Calculate gross pay”? This structure chart shows the highest or most abstract level of design for a payroll system, providing an overview of the entire system. 99

100 Object-oriented development
Uses object as basic unit of systems analysis and design Object: Combines data and the specific processes that operate on those data Data encapsulated in object can be accessed and modified only by operations, or methods, associated with that object Object-oriented modeling based on concepts of class and inheritance Objects belong to a certain class and have features of that class May inherit structures and behaviors of a more general, ancestor class This slide introduces the second of the two main system modeling methodologies – object-oriented development. A key concept here is that of class and inheritance. Ask students what a class is – (general category of similar objects) and to describe objects that might be in the same class. For example, what objects might be in the category “Degrees” in a university’s information system? 100

101 Class and Inheritance This graphic illustrates the concept of class and inheritance in object-oriented development. The Class employee allows subclasses to be created using the “template” or superclass “Employee” and use the processes and properties defined for Employee. Subclasses can use properties of their superclass and also add their own properties. If a subclass “Intern” was added to this chart, what unique properties might it have? This figure illustrates how classes inherit the common features of their superclass. 101

102 Object-oriented development
More iterative and incremental than traditional structured development Because objects reusable, object-oriented development can potentially reduce time and cost of development Phases: Systems analysis: Interactions between system and users analyzed to identify objects Design phase: Describes how objects will behave and interact; grouped into classes, subclasses and hierarchies Implementation: Some classes may be reused from existing library of classes, others created or inherited This slide continues the discussion of object-oriented development, highlighting unique considerations during the systems development process. Ask students to perform some rudimentary systems analysis and design for an information system that managed inventory for a department store. What classes might be created? What properties would they have? What subclasses would there be for one of these classes and what properties would they inherit? It is important to emphasize that object-oriented development can reduce the time and cost of development through reusing objects and classes from one application for other applications. 102

103 Computer-aided software engineering (CASE)
Software tools to automate development and reduce repetitive work, including Graphics facilities for producing charts and diagrams Screen and report generators, reporting facilities Analysis and checking tools Data dictionaries Code and documentation generators Support iterative design by automating revisions and changes and providing prototyping facilities Require organizational discipline to be used effectively CASE tools are software tools to automate development tasks for either of the two methodologies just discussed (structured, object-oriented). What does it mean that organizational discipline must be used to be used effectively? What kinds of gains in productivity can be expected if CASE tools are used properly? 103

104 Alternative Systems-Building Methods
Traditional systems life-cycle Prototyping End-user development Application software packages Outsourcing Structured methodology and object-oriented development describe the structure of the software applications used by information systems. The next slides discuss different ways in which the work by the teams involved in creating this software can be organized. Ask students to evaluate which of these methods, if implemented effectively, they think might produce the highest ROI. Which might be the riskiest? 104

105 Traditional systems lifecycle
Oldest method for building information systems Phased approach - divides development into formal stages Follows “waterfall” approach: Tasks in one stage finish before another stage begins Maintains formal division of labor between end users and information systems specialists Emphasizes formal specifications and paperwork Still used for building large complex systems Can be costly, time-consuming, and inflexible This slide describes the first method for building systems, the traditional systems life-cycle. Ask students what the effects of unanticipated user requirements are when using this type of building method. What is the role of end users in this method? 105

106 Prototyping Building experimental system rapidly and inexpensively for end users to evaluate Prototype: Working but preliminary version of information system Approved prototype serves as template for final system Steps in prototyping Identify user requirements Develop initial prototype Use prototype Revise and enhance prototype This slide discusses the second method of systems building, prototyping. It is an explicitly iterative process. The term iterative has been used several times; ask students to describe what this means (steps to build the system can be repeated over and over). What are the benefits of an iterative process? Note that once no more iterations are needed, the prototype becomes the finished specifications for the final application, or may serve as the production version of the application. 106

107 The Prototyping Process
The process of developing a prototype can be broken down into four steps. Because a prototype can be developed quickly and inexpensively, systems builders can go through several iterations, repeating steps 3 and 4, to refine and enhance the prototype before arriving at the final operational one. This graphic illustrates the four steps (rectangles) of prototyping. The steps that are repeated are steps 3) Use the prototype and 4) Revise and enhance the prototype. Would this type of system development be appropriate for developing a large, enterprise management system? 107

108 Prototyping (cont.) Advantages of prototyping Disadvantages
Useful if some uncertainty in requirements or design solutions Often used for end-user interface design More likely to fulfill end-user requirements Disadvantages May gloss over essential steps May not accommodate large quantities of data or large number of users May not undergo full testing or documentation This slide continues the discussion of prototyping, listing the advantages and disadvantages to using this method of building systems. Ask students to explain these advantages and disadvantages. For example, why is prototyping useful if there is uncertainty in requirements? What kinds of essential steps might be glossed over? 108

109 End-user development Uses fourth-generation languages to allow end-users to develop systems with little or no help from technical specialists Fourth generation languages: Less procedural than conventional programming languages PC software tools Query languages Report generators Graphics languages Application generators Application software packages Very high-level programming languages This slide discusses a third alternative method in systems building: end-user development. What does it mean that fourth-generation languages are less “procedural” than conventional programming languages. What is an example of a conventional programming language? Ask students to describe or give an example of each type of fourth generation language category. 109

110 End-user development (cont.)
Advantages: More rapid completion of projects High-level of user involvement and satisfaction Disadvantages: Not designed for processing-intensive applications Inadequate management and control, testing, documentation Loss of control over data Managing end-user development Require cost-justification of end-user system projects Establish hardware, software, and quality standards This slide continues the discussion of end-user development. What types of projects might end-user development be most suited for? How might this type of development result in a loss of control over data? 110

111 Application software packages
Save time and money Many packages offer customization features: Allow software package to be modified to meet unique requirements without destroying integrity of package software Evaluation criteria for systems analysis include: Functions provided by the package, flexibility, user friendliness, hardware and software resources, database requirements, installation and maintenance efforts, documentation, vendor quality, and cost Request for Proposal (RFP) Detailed list of questions submitted to packaged-software vendors Used to evaluate alternative software packages This slide discusses a fourth alternative in systems building, the use of application software packages. It is important to note that many functions are common to all business organizations—payroll, accounts receivable, or inventory control. Software packages will fulfill the need for many organizations for these types of functions. However, it is still important to perform systems analysis in order to determine your organization’s requirements for a system. Step through and explain (or have students explain) the evaluation criteria for a package. For example, you would want to outline the functions you need from the package and determine whether the software package provides that. 111

112 Outsourcing Several types Cloud and SaaS providers External vendors
Subscribing companies use software and computer hardware provided by vendors External vendors Hired to design, create software Domestic outsourcing Driven by firms need for additional skills, resources, assets Offshore outsourcing Driven by cost-savings This slide describes a fifth alternative in systems building – outsourcing. SaaS and cloud computing were introduced in chapter 5. Have students describe these types of outsourcing in their own words. Refer students to the Learning Tracks on outsourcing and cloud computing. 112

113 Outsourcing (cont.) Advantages Disadvantages
Allows organization flexibility in IT needs Disadvantages Hidden costs, e.g. Identifying and selecting vendor Transitioning to vendor Opening up proprietary business processes to third party This slide continues the discussion of outsourcing. It is important to emphasize the amount of work involved in partnering and sharing work with a vendor. It may take anywhere from 3 months to a year to fully transfer work to a vendor. What other types of hidden costs can students identify? 113

114 Total Cost of Offshore Outsourcing
This graphic looks at the best and worst case scenarios regarding hidden costs in outsourcing. The best case column shows the lowest estimates for additional costs, and the worst case reflects the highest estimates for these costs. In the Additional Cost column at the lower right, you can see that hidden costs increase the total cost of an offshore outsourcing project by an extra 15 to 57 percent. However, it is important to note that even with these extra hidden costs, many firms will benefit from offshore outsourcing if they manage the work well. If a firm spends $10 million on offshore outsourcing contracts, that company will actually spend 15.2 percent in extra costs even under the best-case scenario. In the worst-case scenario, where there is a dramatic drop in productivity along with exceptionally high transition and layoff costs, a firm can expect to pay up to 57 percent in extra costs on top of the $10 million outlay for an offshore contract. 114

115 Application Development for the Digital Firm
Rapid application development (RAD) Process of creating workable systems in a very short period of time Utilizes techniques such as: Visual programming and other tools for building graphical user interfaces Iterative prototyping of key system elements Automation of program code generation Close teamwork among end users and information systems specialists The next slides discuss application development methods that emphasize providing fast solutions needed in an increasingly digital world. What elements in RAD are similar to building methods already discussed are used in RAD– CASE tools, prototyping, etc. 115

116 Joint application design (JAD)
Use to accelerate generation of information requirements and to develop initial systems design Brings end users and information systems specialists together in interactive session to discuss system’s design Can significantly speed up design phase and involve users at intense level JAD is a second technique for accelerating the systems building process. 116

117 Component-based development
Groups of objects that provide software for common functions (e.g., online ordering) and can be combined to create large-scale business applications Web services Reusable software components that use XML and open Internet standards (platform independent) Enable applications to communicate with no custom programming required to share data and services Can engage other Web services for more complex transactions Using platform and device-independent standards can result in significant cost-savings and opportunities for collaboration with other companies Component-based development also speeds up system and software building. Web services describe Internet-standards based, reusable software components, that can be combined to build more complex applications, such as checking a customer’s credit, procurement, or placing orders. 117

118 Agile development Focuses on rapid delivery of working software by breaking large project into several small sub-projects Subprojects Treated as separate, complete projects Completed in short periods of time using iteration and continuous feedback Emphasizes face-to-face communication over written documents, allowing collaboration and faster decision making Agile development is a third technique used to accelerate the systems building process. Could all three of the techniques described be used at the same time? 118

119 Manifesto for Agile Software Development
We are uncovering better ways of developing software by doing it and helping others do it. Through this work we have come to value: Individuals and interactions over processes and tools Working software over comprehensive documentation Customer collaboration over contract negotiation Responding to change over following a plan That is, while there is value in the items on the right, we value the items on the left more.

120 Twelve Principles of Agile Software
Our highest priority is to satisfy the customer through early and continuous delivery of valuable software. Welcome changing requirements, even late in development. Agile processes harness change for the customer's competitive advantage. Deliver working software frequently, from a couple of weeks to a couple of months, with a preference to the shorter timescale. Business people and developers must work together daily throughout the project. Build projects around motivated individuals. Give them the environment and support they need, and trust them to get the job done. The most efficient and effective method of conveying information to and within a development team is face-to-face conversation. Working software is the primary measure of progress. Agile processes promote sustainable development. The sponsors, developers, and users should be able to maintain a constant pace indefinitely. Continuous attention to technical excellence and good design enhances agility. Simplicity--the art of maximizing the amount of work not done--is essential. The best architectures, requirements, and designs emerge from self-organizing teams. At regular intervals, the team reflects on how to become more effective, then tunes and adjusts its behavior accordingly.

121 Enterprise Architecture, IT Governance and IT Portfolio Management

122 Enterprise architecture
description of the structure of an enterprise, its decomposition into subsystems, the relationships between the subsystems, the relationships with the external environment, this description should be comprehensive and include enterprise goals, business functions, business process, roles, organisational structures, business information, software applications and computer systems Four domains of EA: Business, Information, Applications, Technology

123 Four domains of EA: Business
Strategy maps, goals, corporate policies, operating model Functional decompositions, business capabilities and organizational models expressed as line of business architecture Business processes, Workflow and Rules that articulate the assigned authorities, responsibilities and policies Organization cycles, periods and timing Suppliers of hardware, software, and services

124 Four domains of EA: Information
Information architecture - a holistic view on the flow of information in an enterprise Metadata - data that describes your enterprise data elements Data models: conceptual expressed as enterprise information architectures, logical, and physical

125 Four domains of EA: Applications
Application software inventories and diagrams, expressed as functional or line of business architectures Interfaces between applications (events, messages and data flows)

126 Four domains of EA: Technology
Inter-application mediating software or 'middleware'. Application execution environments and operating frameworks including applications server environments and operating systems, authentication and authorisation environments, security systems and operating and monitoring systems. Hardware, platforms, and hosting: servers, datacentres and computer rooms Local and wide area networks, Internet connectivity diagrams Intranet, Extranet, Internet, eCommerce, EDI links with parties within and outside of the organization Operating System Infrastructure software: Application servers, DBMS Programming Languages, etc. expressed as enterprise / line of business technology architecture

127 Architecture-Centric view of IT

128 IT Governance - definition
Specifying the decision rights and accountability framework to encourage desirable behaviour in the use of IT The leadership and organisational structures and processes that ensure that the organisation’s IT sustains and extends the organisation’s strategies and objectives The system by which the current and future use of ICT is directed and controlled. It involves evaluating and directing the plans for the use of ICT to support the organisation and monitoring this use to achieve plans. It includes the strategy and policies for using ICT within an organisation

129 IT Governance The rising interest in IT governance is partly due to compliance initiatives, as well as the acknowledgment that IT projects can easily get out of control and profoundly affect the performance of an organization. A characteristic theme of IT governance discussions is that the IT capability can no longer be a black box. The traditional involvement of board-level executives in IT issues was to defer all key decisions to the company's IT professionals. IT governance implies a system in which all stakeholders, including the board, internal customers, and in particular departments such as finance, have the necessary input into the decision making process. This prevents IT from independently making and later being held solely responsible for poor decisions. It also prevents critical users from later complaining that the system does not behave or perform as expected.

130 IT governance goals The primary goals for information technology governance are to assure that the investments in IT generate business value, mitigate the risks that are associated with IT This can be done by implementing an organizational structure with well-defined roles for the responsibility of information, business processes, applications, infrastructure, etc. Decision rights are a key concern of IT governance; depending on the size, business scope, and IT maturity of an organization, either centralized, decentralized or federated models of responsibility for dealing with strategic IT matters are suggested

131 IT portfolio management
IT portfolio management is the application of systematic management to large classes of items managed by enterprise Information Technology (IT) capabilities It’s focused on quantification of previously mysterious IT efforts, enabling measurement and objective evaluation of investment scenarios

132 Integrating Processes that reinforce architecture

133 The Enterprise Architecture and Organizational Development Virtuous Circle

134 Thank you for your attention!

135 What we can expect in near future?

136 Hype cycle A hype cycle is a graphic representation of the maturity, adoption and business application of specific technologies.

137

138 Emerging technology hype cycle

139 Hype cycle – 5 steps "Technology Trigger" — The first phase of a hype cycle is the "technology trigger" or breakthrough, product launch or other event that generates significant press and interest. "Peak of Inflated Expectations" — In the next phase, a frenzy of publicity typically generates over-enthusiasm and unrealistic expectations. There may be some successful applications of a technology, but there are typically more failures. "Trough of Disillusionment" — Technologies enter the "trough of disillusionment" because they fail to meet expectations and quickly become unfashionable. Consequently, the press usually abandons the topic and the technology. "Slope of Enlightenment" — Although the press may have stopped covering the technology, some businesses continue through the "slope of enlightenment" and experiment to understand the benefits and practical application of the technology. "Plateau of Productivity" — A technology reaches the "plateau of productivity" as the benefits of it become widely demonstrated and accepted. The technology becomes increasingly stable and evolves in second and third generations. The final height of the plateau varies according to whether the technology is broadly applicable or benefits only a niche market.

140 CRM hype cycle


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