1. Management Information Systems: Solving Business Problems with Information Technology Part One: Business Operations Chapter Two: Information Technology Foundations Information Technology Foundations Prof. Gerald V. Post Prof. David L. Anderson

2. Transaction Processing System Input Output Process Information Communication Systems Development

3. Marketplace Demands l The quality imperative l Consumer computing l Deregulation of some major industries l Crossing industry boundaries l Traditional customers are “leaving” l Crossing national boundaries l Production is becoming global l New product and service development cycles are shortening

4. Two Concepts of the Corporation: SBU or Core Competence

5. Prototyping l User requirements l Input, output, and transactions l Databases l Controls l Technology l Applications

6. Systems Maintenance “Phase” l Systems Plan Report l Systems Analysis Report l General Systems Design Report l Systems Evaluation and Selection Report l Detailed Systems Design Report l Systems Implementation Report

7. Personal Communication Networks l Permit person-to-person rather than location-to-location. l Each person will have his or her own personal phone number associated with a lightweight telephone that he or she carries around. People will not only transmit telephone conversations but also computer-based information, voice mail, electronic messaging, call screening, and other personal from anywhere. They will unlock levels of freedom we don’t yet know, and they will be important for special events, such as political conventions and sporting events, as well as for emergencies, such as those caused by natural disasters.

8. PDM l Productivity l Differentiation l Management

9. Procedure-Based vs. Goal-Based Information Activities Procedure-Based Activities: l Tend to consist of high volumes of transaction in which each has relatively low cost or value. l Are based on well-defined procedures (or algorithms) where the outputs are well-defined too. l Are based on the handling of data. Goal-Based Activities l Tend to handle fewer transactions of higher value or cost. l Are based on ill-defined processes (or heuristics) and the outputs are less defined as well. l Tend to focus on defining the problems and the end results or goals with effectiveness stressed in achieving them. l Are based on the handling of concepts.

10. Marketing Model Components l A set of technologies that represent products, developed by the systems department in an organization l A set of users of the technology who we can view as customers for these products l A delivery mechanism for developing, delivering, and installing these systems that is analogous to marketing activities

11. Peter Keen’s Projections l Every large firm in every industry will have from 25 percent to 80 percent of its cash flow processed on-line l Electronic data interchange (EDI) will be the norm l Point-of-sale and electronic payments will be core services l Image technology will be an operational necessity l Work will be distributed and reorganization will be commonplace l Work will increasingly be location-independent l Electronic business partnerships will be standard l Reorganizations will be frequent, not exceptional

12. Planning and Linkage Analysis Examining the links that organizations have with one another with the goal of creating a strategy for utilizing electronic channels l Understand “waves of innovation” l Exploit experience curves l Define power relationships l map out your “extended enterprise” l Plan your electronic channels

13. Systems Development Life Cycle Consists of Six Phases l Systems Planning l Systems Analysis l General Systems Design l Systems Evaluation and Selection l Detailed Systems Design l Systems Implementation

14. Mead’s Information Resources Driven Organization l Information Resources Planning and Control Department - the corporate perspective for information systems planning to ensure that Mead’s information resources plans meshed with business plans, and acted as planning coordinator to help various groups and divisions coordinate their plans with corporate and information resources plans. l Information Services Department - computer operations, development of corporate-wide systems, provided technical services, and furnished all the telecommunications services to the company l Decision Support Applications (DSA) Department - all end user computing support for the company

15. Murray’s Eight Phases to Distributed Systems l Phase 1: The first phase is characterized by host-based, real-time query and update. This phase is traditional on-line information system processing, where dumb terminals access host-based applications to view and update data l Phase 2: The second phase provides additional query capabilities through file transfers to PCs. l Phase 3: The third phase adds batch updating form PC data. This phase reverses the philosophy of Phase 2 by making the PC database the master. l Phase 4: The forth phase enables real-time query and update from either host or PC. This phase extends the capabilities of the PCs by allowing them to update the host on- line. l Phase 5: The fifth phase introduces homogeneous cooperative processing without two- phase commit, that is, like databases run on the same hardware and system software platforms. This phase adds true distributed databases, across similar or identical platforms. l Phase 6: The sixth phase moves to heterogeneous cooperative processing without two- phase commit, that is, databases run on a mix of platforms. This phase extends the previous one by permitting distributed databases across mixed platforms. l Phase 7: This seventh phase adds the all-important two-phase commit capability (to homogeneous databases), going a system a true distributed database. l Phase 8: This phase extends Phase 7 to heterogeneous databases.

16. Michael Porter’s Five Competitive Forces Model l The threat of new entrants into one’s industry l The bargaining power of customers and buyer l The bargaining power of suppliers l Substitute products or service l Rivalry among competitor

17. According to Naisbitt and Aburdene, Changes also Occur in Traditional Environments l Many organizations are emphasizing teams to accomplish major tasks and projects. l Information workers are increasingly mobile. l Organizations are examining what they should do internally, and what should be done by some other organization. l Corporations are shifting their emphasis from financial capital to human capital. l New forms of self-managing groups are appearing. l A coming labor shortage will result in more jobs for women, part-time older people, and the poor and disadvantaged.

18. Federal Express Applies Information Technology to Compete on Quality and Tracking Information l The program started at the top of the corporation l They track actual failures rather than percentages of success l Their measures are from a customer perspective l Everyone’s compensation is based on quality improvement l Solving root causes of failures

19. Information Engineering Methodology (IEM) l Systems Planning l Systems Analysis l Systems Design l Systems Construction and Implementation

20. Five Roles of the Systems Department in Business Reengineering (Index Foundation) l Systems directors will be influences l To participate on multidisciplinary teams, which will be the change agents l Build more flexible systems faster l Introduce process-supporting technologies l Be the custodian of the firm’s technical architecture

21. Michael Hammer Reengineering Principles l Organize around outcomes, not tasks l People who use the output should perform the process l Include information processing in the “real” work that produces the information l Treat geographically dispersed resources as if they were centralized l Link parallel activities rather than integrate them l Let “doers” be self managing l Capture information once and as its source

22. Elements of a Good Analysis l Financial/Strategic Analysis l Implementation/Methodology l Measurable/Expected Results l Future Growth/Continual Development l HR Implications/People l Core Competencies/Critical Service Factor l Target Market Segment

23. Two Frameworks for Distributed Systems l An Organizational Framework - The top three levels: corporate, regional, and site The bottom three levels: department, work group, and individual l A Technical Framework - Migration of computer power to end users will be the driving force for network-based information systems. Four components: processors, networks, services, and standards.

24. Four Forces Causing Management to Consider Reengineering the Way their Business Works l The pressures of the 1990’s are forcing companies to focus on new competitive strategies - quality, cycle time, customer service, and niche markets. l Enough failures in the 1980’s in using IT to gain competitive advantage to force management to rethink their strategies for achieving this goal. l Companies are being forced to cut operating expenses so significantly that traditional methods no longer work. l The cost/performance of computer hardware and telecommunications has dropped so dramatically that IT has become practical for a far wider variety of uses than a few years ago.

25. Four Types of Documentation l Systems Documentation l Software Documentation l Operations Documentation l User Documentation

26. Increased Pressures on Information Technology l Globalization/new competitors –Pressure on IT to focus even more strongly on businesses that are revenue-generating l Faster business cycles –Pressure on IT to focus on the increasing need to support revenues and decreasing fixed/semi-fixed costs l Outsource –non-revenue-generating functions l Rapidly Changing Markets –reinforce the need for flexibility in staff/operations and shorter product life-cycles and responsiveness.

27. Desire to Minimize l Economies of scope –Want one vendor to manage multiple functions l Economies of Scale –Leverage expertise and methodologies –Reduce need to invest in expensive state-of-the- art technologies –Take process-oriented approach l Management time devoted to one vendor –Leverage Expertise –Use non-revenue-generating areas to provide multiple methodologies and functions –Investment in expensive technologies –Emphasize process-oriented approach

28. Cyclical Nature Identify Classes and Objects Identify Class and Object Semantics Specify Class and Object Interfaces and Implementation Identify Class and Object Relationships

29. CLIENTCLIENT Customer Value Chain What is Produced/ Provided To Me (inputs) What I Do (process) What I Produce (Outputs) Who I Produce It For (Customers) Computer Hardware and Software Local Area Network Installations Implement Technology to Accomplish Strategic Goals Working Models Practice Area Information

30. Margin Customer Value Chain Customer Supply Chain Firm Infrastructure Human Resource Management Technology Development Procurement Inbound Logistics Operations Outbound Logistics Marketing & Sales Marketing Management Advertising Sales Force Admin. Sales Force Oper. Promotion Service Technical Literature

31. Grower Jobber $8.00 Wholesaler $12.00 Florist $24.00 Customer $60.00 Customer $54.00 The Distribution Chain

32. Potential Entrants Suppliers Industry Competitors Rivalry Among Existing Firms Buyers Substitutes Bargaining power of suppliers Threat of new entrants Bargaining power of buyers Threat of substitute products or services Five Forces Model

33. Competitive Strategy of Differentiation Competitive Advantage Competitive Scope Broad Target Narrow Target Lower CostDifferentiation 1. Cost Leadership 2. Differentiation 3A. Focus on Cost 3B. Focus on Differentiation

34. Product Change Process Change Dynamic Stable Dynamic Mass Customization Invention Mass ProductionContinuous Improvement Product-Process Change Matrix

35. Integrate Silos

36. “Brochurized” web site Basic product/ plan information Limited interactivity No web site stickiness Publish Physician and facility locators, services information Searchable and customized health content How-to-contact us communications Very early community building InteractTransact Member-focused portal: loyalty building Prevention and health assessment tools Community building Web site stickiness Business process Automation: procurement, integrated directory Integrate EDI to iCommerce Transition Self-service functionality Automated vendor supply chain management Call center replaced with contact center Transform Mass customization Integrated Disease Management Empowered consumers and self-directed care Frictionless integration with providers, pharma & suppliers STAGESSTAGES Value Curve Laggards Majority Leaders Internet Development Continuum

37. Front Office Sell Side Back Office Buy Side

38. Business vs. IT Strategy

45. Integrative Architecture

48. Escape Standardized Management

49. Reach for the Next Level

50. Graduate School of Business Administration Loyola University