1. Lecture 4 MGMT 6180 - © 2012 Houman Younessi Strategic Planning for IS and IS toolkit

2. Lecture 4 MGMT 6180 - © 2012 Houman Younessi The planning process is the interventional participation of the planner as an expert whereby the fact-finding and intervention by the planner is for the practical purpose of improving the problem situation. In a way, many pure consulting assignments may be classified as a form of this kind of planning. Therefore the validity of the plan, or the outcome is not based so much on the factual replicability and validity but the usefulness of the action in having improved the situation. Strategic Information Systems Planning Process The Planning Process:

3. Lecture 4 MGMT 6180 - © 2012 Houman Younessi 1.Planning starts with the identification of an initial problem in need of improvement. Then we proceed to; 2.Find facts through interventional investigation of the problem situation, we then; 3.Form a general “action plan”. A plan for forming general hypotheses, gathering information about them, improving them, etc. We then go on to; 4.Implement the action plan. This brings forth a number of findings, potential problems, areas of potential improvement, etc. Strategic Information Systems Planning Process The Planning Cycle:

4. Lecture 4 MGMT 6180 - © 2012 Houman Younessi 5.Interpret the situation and intervene to improve it. At the same time we; 6.Revise the plan and continue on the next cycle of intervention until no further intervention is required as the situation is deemed as having sufficiently and successfully improved. Strategic Information Systems Planning Process The Planning Cycle:

5. Lecture 4 MGMT 6180 - © 2012 Houman Younessi Strategic Information Systems Planning Process The Planning Phases:  Phase 1: Visioning  Phase 2: Analysis  Phase 3: Direction  Phase 4: Recommendation

6. Lecture 4 MGMT 6180 - © 2012 Houman Younessi Product Process Enterprise Environ. Quality Efficiency Effective- ness Sustain. Demand Side Supply Side Demand and Supply Aggregate Demand and Aggregate Supply Strategic Information Systems Planning Process Back to our business model The Process, Efficiency, Supply Stage

7. Lecture 4 MGMT 6180 - © 2012 Houman Younessi ElementConceptInformation CategoryInformation System RevenueDemandMarket trends and marketing Product quality Pricing Data Acquisition Data Analysis Control Forecasting Optimization CostProductionProcess capability Technology Forecasting Estimating Optimization Control RiskUncertaintyEconomic Environment Internal control Forecasting Control LongevitySustainabilityEnvironment Integration and systemicity Forecasting Optimization

8. Lecture 4 MGMT 6180 - © 2012 Houman Younessi ElementConceptInformation CategoryInformation System CostProductionProcess capability Technology Forecasting Estimating Optimization Control

9. Lecture 4 MGMT 6180 - © 2012 Houman Younessi Production Function: Production function is the specification of the (usually minimum) input requirements needed to produce designated quantities of output, given a certain production technology.

10. Lecture 4 MGMT 6180 - © 2012 Houman Younessi Isoquant:Isocost: A function that shows all possible quantities of inputs that result in the same level of output with a given production function. All combinations of inputs (e.g. labor and capital) into the production function that can be obtained for a fixed outlay.

11. Lecture 4 MGMT 6180 - © 2012 Houman Younessi Objective One: Minimization of cost for a given output Short run Long run

12. Lecture 4 MGMT 6180 - © 2012 Houman Younessi Understand: Definition of cost Time frames Nature of change of cost over time Cost time and output time matching Relationship of cost to output Production Control Technology Impact Economies of scope

13. Lecture 4 MGMT 6180 - © 2012 Houman Younessi Sources of Data: Historical -Time series Cross-sectional - Others in the sector or industry Model-based or Predictive - Based on scientific observation

14. Lecture 4 MGMT 6180 - © 2012 Houman Younessi Relationship of cost to output: Production Control (to be discussed later) Technology Impact Production Technology Change - Innovation Process Technology Change - Process Maturity Process Improvement Common Cause Special Cause

15. Lecture 4 MGMT 6180 - © 2012 Houman Younessi Production Control: Eliminating Waste The six wastes: Over-production Inventory Motion Time (wait-time) Processing Rework Objective Two: Minimization of cost for total output

16. Lecture 4 MGMT 6180 - © 2012 Houman Younessi Some Examples: Lot size optimization – interplay between set-up cost and inventory carrying costs Return to scale – Form of the relationship between input and output - Sub-linear - Linear - Super-linear Output Elasticity

17. Lecture 4 MGMT 6180 - © 2012 Houman Younessi Various Key terms: Lean Six Sigma Kaizan TQM CMMI ISO 9000 BPR

18. Lecture 4 MGMT 6180 - © 2012 Houman Younessi Design: Principles of Good Design Specific characteristics for each artifact would be different but they need to be identified and measured.

19. Lecture 4 MGMT 6180 - © 2012 Houman Younessi Understand your enterprise Design for functionality Design for reliability Design for usability Design for maintainability Maximize cohesion Minimize coupling Use “models” to design systems Use abstraction Prioritize, work on high-risk entities first Design a good interface Produce “satisficing” designs PrinciplesofGoodDesign

20. Lecture 4 MGMT 6180 - © 2012 Houman Younessi Do not optimize early Maintain an updated model of the system Develop stable intermediates Use evolutionary development State “what” not “how” Specifically identify all functional requirements Allocate each function to only one component Do not allow undocumented functions Provide observable states PrinciplesofGoodDesign

21. Lecture 4 MGMT 6180 - © 2012 Houman Younessi Employ rapid prototyping Develop iteratively and test immediately Create libraries of reusable entities Use open standards (unless intentionally otherwise) Identify things that are likely to change Document possible design deviation points Maintain a glossary of relevant terms Create measurable design margins Search for unintended consequences Change the behavior of people PrinciplesofGoodDesign

22. Lecture 4 MGMT 6180 - © 2012 Houman Younessi AND OF COURSE MOST IMPORTANTLY Design for maximal process efficiency Beware of, and design against the six enemies of process efficiency

23. Lecture 4 MGMT 6180 - © 2012 Houman Younessi Over-production

24. Lecture 4 MGMT 6180 - © 2012 Houman Younessi Inventory:

25. Lecture 4 MGMT 6180 - © 2012 Houman Younessi Motion:

26. Lecture 4 MGMT 6180 - © 2012 Houman Younessi Time:

27. Lecture 4 MGMT 6180 - © 2012 Houman Younessi Processing:

28. Lecture 4 MGMT 6180 - © 2012 Houman Younessi Rework:

29. Lecture 4 MGMT 6180 - © 2012 Houman Younessi EXERCISE: Determine an efficient process for the product you positioned last week.