1. MIS
CHAPTER 10
BUILDING SUCCESSFUL INFORMATION SYSTEMS
Hossein BIDGOLI

2. Chapter 10 Building Successful Information Systems
l e a r n i n g o u t c o m e s
LO1 Describe the systems development life cycle (SDLC) as a method for developing information systems.
LO2 Explain the tasks involved in the planning phase.
LO3 Explain the tasks involved in the requirements- gathering and analysis phase.
LO4 Explain the tasks involved in the design phase.
LO5 Explain the tasks involved in the implementation phase.

3. l e a r n i n g o u t c o m e s (cont’d.)
Chapter 10 Building Successful Information Systems
l e a r n i n g o u t c o m e s (cont’d.)
LO6 Explain the tasks involved in the maintenance phase.
LO7 Describe new trends in systems analysis and design, including service-oriented architecture,
rapid application development, extreme programming, and agile methodology.

4. Systems Development Life Cycle: An Overview
System failure can happen for several reasons:
Missed deadlines
Users’ needs that weren’t met
Dissatisfied customers
Lack of support from top management
Exceeding the budget

5. Systems Development Life Cycle: An Overview (cont’d.)
Software development life cycle (SDLC)
Also known as the “waterfall model”
Series of well-defined phases performed in sequence that serve as a framework for developing a system or project
Each phase’s output (results) becomes the input for the next phase

6. Systems Development Life Cycle: An Overview (cont’d.)
Systems planning
Evaluating all potential systems that need to be implemented
Preliminary analysis of requirements
Feasibility study
Conducted for each system
Organization decides which ones are a priority
Information system projects
Often an extension of existing systems or involve replacing an old technology with a new one

7. Exhibit 10.1
Phases of the SDLC

8. Phase 1: Planning One of the most crucial phases of the SDLC model
Systems designer must define the problem the organization faces
Problem can be identified internally or externally
Analyst or team of analysts assesses the current and future needs of organization or a specific group of users

9. Phase 1: Planning (cont’d.)
Questions:
Why is this information system being developed?
Who are the system’s current and future users?
Is the system new or an upgrade or extension of an existing system?
Which functional areas (departments) will be using the system?

10. Phase 1: Planning (cont’d.)
Analysts must examine:
Organization’s strategic goals
How the proposed system can support these goals
Which factors are critical to the proposed system’s success
Criteria for evaluating the proposed system’s performance

11. Phase 1: Planning (cont’d.)
Make sure users understand the four Ws:
Why
Who
When
What
End result of this phase should give users and top management a clear view of:
What the problem is
How the information system will solve the problem

12. Phase 1: Planning (cont’d.)
Example: ABC Furniture is planning for an information system to solve the problem of inaccurate inventory forecasts
Why
Who
When
What

13. Formation of the Task Force
Consisting of representatives from different departments, systems analysts, technical advisors, and top management
Team collects user feedback and works toward getting users involved from the beginning
Internal users
Employees who will use the system regularly
External users
Customers, contractors, suppliers, and other business partners

14. Formation of the Task Force (cont’d.)
Joint application design (JAD)
Collective activity involving users, top management, and IT professionals
Centers on a structured workshop
Results in a final document containing definitions for data elements, workflows, screens, reports, and general system specifications

15. Feasibility Study Feasibility Usually has five major dimensions:
Measure of how beneficial or practical an information system will be to an organization
Should be measured continuously throughout the SDLC process
Usually has five major dimensions:
Economic, technical, operational, scheduling, and legal

16. Economic Feasibility Assesses a system’s costs and benefits
Team tallies tangible development and operating costs for the system and compares them with expected financial benefits of the system
Keep in mind that an information system project that’s feasible at the outset could become unfeasible later

17. Economic Feasibility (cont’d.)
Tangible benefits
Quantified in terms of monthly or annual savings
Intangible benefits
Difficult to quantify in terms of dollar amounts
If they aren’t at least identified, many information system projects can’t be justified
Cost-effectiveness analysis
Based on the concept that a dollar today is worth more than a dollar one year from now

18. Economic Feasibility (cont’d.)
Most common analysis methods
Payback, net present value (NPV)
Return on investment (ROI)
Internal rate of return (IRR)
Cost-benefit analysis (CBA) report
Used to sell the system to top management

19. Technical Feasibility
Concerned with technology to be used in the system
Team needs to assess whether technology to support the new system is available or feasible to implement
Lack of technical feasibility
Can also stem from an organization lacking the expertise, time, or personnel to implement the new system

20. Operational Feasibility
Measure of:
How well the proposed solution will work in the organization
How internal and external customers will react to it
“Is the information system worth implementing?”

21. Scheduling Feasibility
Whether the new system can be completed on time
If the new system can’t be delivered in time
Loss of customers could force the organization out of business
Problem of missing deadlines
Common in the information systems field

22. Legal Feasibility Concerned with legal issues
Typically addresses these questions:
Will the system violate any legal issues in the country where it will be used?
Are there any political repercussions of using the system?
Is there any conflict between the proposed system and legal requirements?
For example, does the system take the Information Privacy Act into account?

23. Phase 2: Requirements Gathering and Analysis
Requirements-gathering and analysis phase
Analysts define the problem and generate alternatives for solving it
First step
Gathering requirements
Interviews, surveys, observations, and JAD approach
Team uses this information to determine:
What the new system should do (process analysis)
What data is needed for this process to be performed (data analysis)

24. Phase 2: Requirements Gathering and Analysis (cont’d.)
Two major approaches for analysis and design of information systems:
Structured systems analysis and design (SSAD) approach
Object-oriented approach
Use different tools for creating analysis models
Models created during the analysis phase constitute the design specifications

25. Table 10.1
Examples of Tools Used in SSAD Analysis Models

26. Exhibit 10.2
Data Flow Diagram for ABC’s Inventory Management System

27. Exhibit 10.3
Context Diagram for ABC’s Inventory Management System

28. Phase 3: Design Design phase Output of this phase
Analysts choose the solution that’s the most realistic and offers the highest payoff for the organization
Output of this phase
Document with exact specifications for implementing the system
Includes files and databases, forms and reports, documentation, procedures, hardware and software, networking components, and general system specifications

29. Phase 3: Design (cont’d.)
Design phase consists of three parts:
Conceptual design
Overview of the system
Does not include hardware or software choices
Logical design
Makes the conceptual design more specific by indicating hardware and software
Physical design
Created for a specific platform

30. Computer-Aided Systems Engineering
Computer-aided systems engineering (CASE) tools
Automate parts of the application development process
Similar to computer-aided design (CAD) tools used by architects and engineers
Capabilities vary
CASE tools available
CA ERwin Process Modeler, Oracle Designer, Visible System’s Visible Analyst

31. Computer-Aided Systems Engineering (cont’d.)
Outputs:
Specifications documents
Documentation of the analysis, including models and explanations
Design specifications with related documentation
Logical and physical design documents based on the conceptual design
Code modules that can be incorporated into the system

32. Prototyping Small-scale version of the system is developed
Large enough to illustrate the system’s benefits
Allows users to offer feedback
Prototypes are used for:
Gathering system requirements
Helping to determine system requirements
Determining a system’s technical feasibility
Selling the proposed system to users and management

33. Prototyping (cont’d.) Steps:
Define the initial requirements
Develop the prototype
Review and evaluate the prototype
Revise the prototype
Numerous prototyping development tools are available: e.g., spreadsheets
Prototyping has advantages and disadvantages

34. Phase 4: Implementation
Implementation phase
Solution is transferred from paper to action
Team configures the system and procures components for it
Tasks
Acquiring new equipment
Hiring new employees
Training employees
Planning and designing the system’s physical layout

35. Phase 4: Implementation (cont’d.)
Coding
Testing
Designing security measures and safeguards
Creating a disaster recovery plan
Options for conversion:
Parallel conversion
Phased-in-phased-out conversion
Plunge (direct cutover) conversion
Pilot conversion

36. Project Management Tools and Techniques
Help systems analysts
Solve scheduling problems, plan and set goals, highlight potential bottlenecks
Software
Microsoft Project, Micro Planning International’s Micro Planner
Techniques
PERT (Program Evaluation Review Technique), CPM (Critical Path Method), and Gantt charts
“Critical path”

37. Exhibit 10.4
PERT network

38. Request for Proposal Written document with detailed specifications,
Used to request bids for equipment, supplies, or services from vendors
Usually prepared during the implementation phase
Advantage:
All vendors get the same information and requirements
Disadvantage:
Time involved in writing and evaluating proposals

39. Request for Proposal (cont’d.)
Free templates available for RFPs
Request for information (RFI)
Screening document for gathering vendor information and narrowing the list of potential vendors

40. Implementation Alternatives
Insourcing
Organization’s team develops the system internally
Self-sourcing
End users develop information systems with little or no formal assistance from the information systems team
Managers are concerned about end users’ lack of adequate systems analysis and design background, and the loosening of system development standards

41. Implementation Alternatives (cont’d.)
Outsourcing
Organization hires an external vendor or consultant who specializes in providing development services
Options
Onshore
Nearshore
Offshore
Disadvantages of outsourcing
Loss of control
Dependency
Vulnerability of strategic information

42. Phase 5: Maintenance Information system is operating
Enhancements and modifications to the system have been developed and tested
Hardware and software components have been added or replaced
Team collects performance data and gathers information on whether the system is meeting its objectives
By talking with users, customers, and other people affected by the new system

43. New Trends in Systems Analysis and Design
SDLC model might not be appropriate in these situations:
Lack of specifications
Input-output process can’t be identified completely
Problem is “ad hoc”
Users’ needs change constantly

44. Service-Oriented Architecture
Philosophy and a software and system development methodology
Focuses on the development, use, and reuse of small, self-contained blocks of codes (called services) to meet the software needs of an organization
Attempts to solve software development issues
Recognizing, accepting, and leveraging existing services
“Blocks of codes” can be reused
Starwood Hotels and Resorts Worldwide, T-Mobile

45. Rapid Application Development
Concentrates on user involvement and continuous interaction between users and designers
Combines the planning and analysis phases into one phase
Develops a prototype of the system
Iterative process (“incremental development”)
Repeats the design, development, and testing steps as needed, based on feedback from users

46. Extreme Programming
Recent method for developing software applications and information system projects
Divides a project into smaller functions
Developers can’t go on to the next phase until the current phase is finished
“Story” written on index cards
Pair programming (“sharing a keyboard”)
Two programmers participate in one development effort at one workstation
Major departure from traditional software development

47. Agile Methodology Similar to XP Less emphasis on team coding
More emphasis on limiting the project’s scope
Focuses on setting a minimum number of requirements
Turning them into a working product
Agile Alliance organization
Manifesto contains principles for this methodology

48. Summary SDLC phases: CASE tools Prototyping RFP
Planning, requirements-gathering and analysis, design, implementation, and maintenance
CASE tools
Prototyping
RFP
Self sourcing and outsourcing
New trends in systems development
SOA, RAD, XP, and Agile methodology

49. MIS
CHAPTER 11
ENTERPRISE SYSTEMS
Hossein BIDGOLI

50. Chapter 11 Enterprise Systems
l e a r n i n g o u t c o m e s
LO1 Explain how supply chain management is used.
LO2 Describe customer relationship management systems.
LO3 Explain knowledge management systems.
LO4 Describe enterprise resource planning systems.

51. Supply Chain Management
Integrated network
Consisting of an organization, its suppliers, transportation companies, and brokers
Used to deliver goods and services to customers
Exist in both service and manufacturing organizations

52. Exhibit 11.1
Supply Chain Configuration

53. Supply Chain Management (cont’d.)
Supply chain management (SCM)
Process of working with suppliers and other partners in the supply chain to improve procedures for delivering products and services
Coordinates:
Procuring materials
Transforming materials into intermediate and finished products or services
Distributing finished products or services to customers

54. Supply Chain Management (cont’d.)
In manufacturing firm, information in an SCM system flows between the following areas:
Product flow
Information flow
Finances flow
Four key decisions in supply chain management:
Location
Inventory
Production
Transportation

55. Supply Chain Management (cont’d.)
Vendors offer comprehensive solutions:
SAP
Oracle
JDA Software
Manhattan associates

56. Dell Computer’s Supply Chain
Modified its supply chain from a “push” to a “pull” manufacturing process
Also known as “built to order (BTO)”
Main sales channel is direct sales to customers
Dell has been able to reduce costs and shorten delivery time by eliminating intermediaries

57. SCM Technologies
Information technologies and the Internet play a major role in implementing an SCM system
Electronic Data Interchange (EDI)
Enables business partners to send and receive information on business transactions
Expedites delivering accurate information
Lowers the cost of transmitting documents
Advantage of being platform independent and easy to use

58. SCM Technologies (cont’d.)
Using EDI has some drawbacks
Uses proprietary standards
Beneficial when more companies are in the EDI network
Often not affordable for small suppliers and distributors
Open EDI
Based on XML
Traditional EDI has declined in popularity

59. Internet-Enabled SCM
Improves information sharing throughout the supply chain
Can improve the following SCM activities:
Purchasing/procurement
Inventory management
Transportation
Order processing
Customer service
Production scheduling

60. E-marketplaces Third-party exchange
Provides a platform for buyers and sellers to interact with each other and trade more efficiently online
Help maintain a competitive edge in the supply chain in the following ways:
Provides opportunities for sellers and buyers to establish new trading partnerships
Provides a single platform for prices, availability, and stock levels that’s accessible to all participants

61. E-marketplaces (cont’d.)
Solves time constraint problems for international trade and making it possible to conduct business around the clock
Makes it easy to compare prices and products from a single source instead of spending time contacting each seller
Reduces marketing costs more than traditional sales channels can

62. E-marketplaces (cont’d.)
E-distributor
Marketplace owned and operated by a third party that provides an electronic catalog of product
Maintenance, repair, and operations (MROs) services
Includes services from different vendors
E-distributor coordinates them into one package for customers
Example of a horizontal market

63. Online Auctions
Brings traditional auctions to customers around the globe
Makes it possible to sell far more goods and services than at a traditional auction
Brokerage business model
Reverse auctions
Invite sellers to submit bids for products and services

64. Collaborative Planning, Forecasting, and Replenishment
Coordinate supply chain members through point-of-sale (POS) data sharing and joint planning
Any data collected shared with all members of the supply chain
Coordinating the supply chain can be difficult
CPFR ensures that inventory and sales data is shared across the supply chain
So that everyone knows the exact sales and inventory levels

65. Collaborative Planning, Forecasting, and Replenishment (cont’d.)
Costs for each partner are shared or minimized
Unforeseen problems can crop up

66. Exhibit 11.2
CPFR Process

67. Customer Relationship Management
CRM
Consists of the processes a company uses to track and organize its contacts with customers
Main goal of a CRM system
Improve services offered to customers
Use customer contact information for targeted marketing
Marketing strategies in a CRM system
Focus on long-term relationships with customers instead of transactions

68. Customer Relationship Management (cont’d.)
Identifies segments of customers
Improves products and services to meet customers’ needs
Improves customer retention
Identifies a company’s most profitable (and loyal) customers
Helps organizations make better use of data, information, and knowledge to understand customers

69. Customer Relationship Management (cont’d.)
Gives organizations more complete pictures of their customers
Integrates demographic and other external data with customers’ transaction data to better understand customer behavior
Pays external agencies for additional data about potential customers that might be public or semiprivate

70. Customer Relationship Management (cont’d.)
With a CRM system, organizations can:
Provide services and products that meet customers’ needs
Offer better customer service through multiple channels
Increase cross-selling and upselling
Help sales personnel close deals faster by offering data on customers’ backgrounds
Retain existing customers and attract new ones

71. Customer Relationship Management (cont’d.)
CRM systems include:
Sales automation
Order processing
Marketing automation
Customer support
Knowledge management
Personalization technology

72. CRM in Action Time Warner Cable Business Class
CRM system from Salesforce.com
Analyze business data, improve the accuracy of forecasts, improve problem solving, and monitor sales and business activities
Important features of the system include:
Dashboards, features for “drilling down”, Web-based knowledge base for employees and customers, and Web log for sales personnel communication
Has increased productivity by 10%

73. CRM Applications On-premise CRM or Web-based CRM (SaaS)
Several software packages are available for setting up a CRM system:
Amdocs CRM, Optima Technologies ExSellence, Infor CRM, SAP mySAP, Oracle PeopleSoft CRM, and Oracle Siebel

74. CRM Applications (cont’d.)
Features:
Salesforce automation
eCRM or Web-based CRM
Survey management
Automated customer service

75. Personalization Technology
Satisfies customers’ needs, builds customer relationships, and increases profits
Designs goods and services that meet customers’ preferences better
Customization
Allows customers to modify the standard offering
Such as selecting a different home page to be displayed each time you open your Web browser

76. Personalization Technology (cont’d.)
Using personalization requires gathering a lot of information about customers’ preferences and shopping patterns
Amazon
Known for using personalization to recommend products to customers
Nordstrom.com
Suggest shoes or a tie that goes with the suit or a similar suit in the same category

77. Personalization Technology (cont’d.)
Apple iTunes
Suggests other songs that listeners similar to you purchased
Google account holders
Personalized search results that are reordered based on their searching histories

78. Personalization Technology (cont’d.)
Implement a personalization system:
Internet, databases, data warehouse/data marts, data-mining tools, mobile networks, and collaborative filtering
Collaborative filtering (CF)
Searches for specific information or patterns, using input from multiple business partners and data sources

79. Knowledge Management
Improve CRM systems by identifying, storing, and disseminating “know-how”—facts about how to perform tasks
Knowledge is an asset
Should be shared throughout an organization to generate business intelligence and maintain a competitive advantage in the marketplace
Knowledge is more than information and data
Also contextual

80. Knowledge Management (cont’d.)
Knowledge repository
Stores knowledge of experts
Example: knowledge base of typical customer complaints and solutions
Motivates employees to share knowledge
Offer reward
Simple knowledge management system
Using groupware
Other tools and technologies include:
DBMSs, data-mining tools, decision support systems

81. Knowledge Management (cont’d.)
Knowledge management system should help an organization to:
Promote innovation by encouraging free exchange of ideas
Improve customer service by reducing response time
Increase revenue by reducing the delivery time for products and services
Improve employee retention rates by rewarding employees for their knowledge

82. Enterprise Resource Planning
Integrated system
Collects and processes data
Manages and coordinates resources, information, and functions
Many components, including:
Hardware, software, procedures, and input from all functional areas

83. Enterprise Resource Planning (cont’d.)
Well-designed ERP system benefits:
Increased availability and timeliness of information
Increased data accuracy and improved response time
Improved customer satisfaction
Improved employee satisfaction
Improved planning and scheduling
Improved supplier relationship
Improved reliability of information
Reduction in inventory costs
Reduction in labor costs
Reduction in order-to-fulfillment time

84. Enterprise Resource Planning (cont’d.)
ERP systems are available as modules
Organization can purchase only the components it needs
Keeps costs down for organizations
More than 40 vendors offer ERP software

85. Exhibit 11.3
ERP configuration

86. Table 11.1
ERP Components

87. ERP Streamlines Operations at Naghi Group
Offers wide range of products and services throughout the Middle East
Data integration cost hours each month
Solution was ERP software
VAI’s S2K Distribution Suite
View financial data, keep track of inventory status, analyze customers’ purchasing activities in real time
Has streamlined operations, improved customer service, and contributed to more timely business decisions

88. Summary Enterprise systems Supply chain management (SCM), technologies
Electronic data interchange (EDI), Internet-based SCM, online auctions, e-marketplaces, collaborative planning, forecasting, replenishment
Customer relationship management (CRM)
Personalization
Customization
Knowledge management and enterprise resource planning (ERP)