Managing Is Development

1. Managing Is Development

2. Information Systems Plan A road map indicating the direction of systems development, the rationale, the current situation, the management strategy, the implementation plan and the budget

3. Information Systems Plan Purpose of the Plan Overview of plan contents Changes in firm’s current situation Firm’s strategic plan Current business organization Management Strategy 2. Strategic Business Plan Current Situation Current Business Organization Changing environments Major goal of the business plan

4. Information Systems Plan Current Systems Major supporting business functions Major current capabilities Difficulties meeting business requirements Anticipated future demands 4. New Developments New system projects New Capabilities Required

5. Information Systems Plan 5. Management Strategy Acquisition plans Milestones and timing Organizational realignment Internal reorganization Management controls Major training initiatives Personnel strategy 6. Implementation plan 7. Budget requirements

6. Business System Planning enterprise analysis: An analysis of organization-wide information requirements by looking at the entire organizational units, functions, processes, and data elements Strategic Analysis critical success factors: A small number of easily identifiable operational goals shaped by the industry, the firm, the manager, and the broader environment

7. Critical Success Factors and Organizational Goals (Table 11.2)

8. Using CFSs to develop systems

9. System Development and Organizational Change

10. IT capabilities & their Organizational Impacts

11. Steps in Business Reengineering Develop the business vision and process objectives Identify the process to be redesigned Understand and measure the performance of existing processes Identify the opportunities for applying information technologies Build a prototype of the new process

12. Automation: Using computer to speed up existing tasks Rationalization of procedures: streamline procedures, eliminate bottlenecks Business reengineering: Radical redesigning of business processes, combining steps to cut waste, eliminate repetitive tasks to improve cost, quality and maximize the benefits Paradigm shift: Radical reconceptualization of the nature of the business and organization

13. Redesigning the Business Process A set of logically related tasks performed to achieve a defined business outcome Combine steps Eliminate repetitive steps Paralellization of steps

14. Before Reengineering

15. After Reengineering

16. Total Quality Management (TQM) TQM: A concept that makes quality control a responsibility to be shared by all people in an organization IS contributes to TQM: Simplifying the product & production Benchmarking: Setting strict standards for products, services or activities and measuring organizational performance against those standards Use customer demand as a guide to improve product and services Reduce cycle time Improve the quality and precision of design Increase the precision of products

17. System Development System Development: The activities that go into producing an information systems solution to an organizational problem or opportunity Systems analysis: The analysis of a problem that the organization will try to solve with an information system

18. Feasibility Determining whether a solution is achievable given the organizational resources & constraints Technical: Available technical resources Economic: costs vs. benefits ? Operational: fits the organization ?

19. Information Requirements A detailed statement of the information needs that a new system must satisfy Who needs what information, when, how? Basis for the system design: details how a new system will meet requirements Logical design: Lays out the components of the information system and their relationship to each other as they would appear to users Physical design: The process of translating the abstract logical model into the specific technical design for the new system.

20. Design Specifications Output: medium, content, timing Input: origins, low, data entry User interface: simplicity, efficiency, logic Database design: logical data relations Processing: computations, program modules Manual procedures: activities, performers, when Controls: input, processing, output, procedural Security: access, catastrophe plans, audit trails Documentation: operations, systems, user Conversion: transfer files, new procedures Training: techniques, modules, facilities Organizational changes: task, job, process redesigns

21. Programming Testing: Determining whether the system procedures the desired results Unit testing: Each program separately System testing: The whole system Acceptance testing: Final certification that the system is ready Test plan: Preparation of tests and the order in which they will be carried

22. Conversion The process of changing from the old system to the new system Parallel strategy: old and new system run together Direct cutover strategy: The new system replaces the old system completely Pilot study strategy: Limited area of the organization Phased approach strategy: Either by functions or by organizational units Conversion plan: A schedule of all activities to install a new system Production: The stage after the new system is installed Maintenance: Changes in hardware, software, documentation, or procedures

23. Value of Information Systems Tangible Benefits Cost savings: Increased productivity Low operational costs Reduced work force Lower computer expenses Lower vendor costs Reduced facility costs

24. Managing Change Portfolio Analysis: An analysis of the portfolio of potential applications within a firm to determine the risks and benefits and select among alternatives for information systems Scoring Model: A quick method for deciding among alternative systems based on a system of ratings for selected objectives

25. Scoring Model

26. Cost and Benefit Analysis (Figure 11.7)

27. Cost and Benefit Analysis (Figure 11.7) The Payback Method: A measure of the time required to pay back the initial investment of a project. Accounting Rate of Return on Investment (ROI): Calculation of the rate of return from an investment by adjusting cash inflows

28. Cost and Benefit Analysis (Figure 11.7) Present Value: The value, in current dollars, of a payment or stream of payments to be received in the future Cost-Benefit Ratio: A method for calculating the returns from a capital expenditure by dividing total benefits by total costs (1.65)

29. Cost and Benefit Analysis (Figure 11.7) Profitability Index: Used to compare the profitability of alternative investments Internal Rate of Return (IRR): The rate of return or profit that an investment is expected to earn

30. Management Challenges Major risks and uncertainties in system development Determining the benefits of a system when they are largely intangible Developing an effective information systems plan