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Paradigm Shift

I. Computing Paradigm Shift. II. Business Paradigm Shift. Paradigm Shift. TM - 1. Dr. Chen, The Challenge of the Information Systems Technology. Users. Users. Networks. Computers. Computers. Networks. I. Computing paradigm. II. Business Paradigm Shift. 1990s and Beyond.

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Paradigm Shift

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  1. I. Computing Paradigm Shift II. Business Paradigm Shift Paradigm Shift TM -1 Dr. Chen, The Challenge of the Information Systems Technology

  2. Users Users Networks Computers Computers Networks I. Computing paradigm

  3. II. Business Paradigm Shift 1990s and Beyond New Enterprise, Expert Systems BPR, Paperless Office • Client/Server, Multimedia • Distributed Computing • Object-Orientation • Open Systems Automated Enterprise, Back Office Automation On-Line Transaction Processing 1980s • Proprietary Systems • Mainframes 1970s 1960s Legacy Enterprise, Manual Back Office Manual Front Office

  4. Chapter 2Manageable Trends • Strategic Impact of IT • Integrating Changing Technology Platforms • Assimilating Emerging Technologies • Sourcing Policies for the IT Value Chain • Applications Development Process • Partnership of Three Constituencies N TM -4 Dr. Chen, The Trends of the Information Systems Technology

  5. Theme 1: Strategic Impact • Operational/manufacturing impacts • cost • coping with complexity • coordination • integration of technology into product • Marketing impacts • choice of product • service (e.g., order confirmation, tracking) • value-added information • product customization TM -5 Dr. Chen, The Trends of the Information Systems Technology

  6. Banks Airlines Defense Retail Paper High fashion Consulting Figure 2-1 IT Impact: Position of Industry Leaders High Information technology impact on operations (cost/complexity management, coordination, integration, etc.) Low Low High Information technology impact on marketing (customer focus, reaction to change, provision of differentiation. Etc.) TM -6 Dr. Chen, The Trends of the Information Systems Technology

  7. CHEM AA UA Citi CI SW Figure 2-2 IT Impact: Position of Key Players in Airlines and Banks High Information technology impact on operations Low Key: AA - American Airlines UA - United Airlines Citi - First National Citibank CHEM - Chemical Bank of NY CI - Continental Illinois SW - Southwest Airlines Low High Information technology impact on marketing (customer focus.) TM -7 Dr. Chen, The Trends of the Information Systems Technology

  8. Increase integrative capacity Catch up Increase flexibility, responsiveness/ Differentiate products and services Maintain advantage A Contingency Approach to IT Use What four competitive investment strategies used when organizations are comparing their positions with industry leaders? High Figure 2-3 Targeting IT-Based Investment (as Compared with Industry Leaders Operations gap vs. industry leader Low Low High Marketing gap vs. industry leader TM -8 Dr. Chen, The Trends of the Information Systems Technology

  9. A Contingency Approach to IT Management • What four IT environments are created by variation in strategic impact of existing systems and strategic impact of the applications development portfolio? TM -9 Dr. Chen, The Trends of the Information Systems Technology

  10. How to Capitalize on the real Business Opportunities? Integrating ... STRATEGIES POLICIES ORGANIZATION INFORMATION TECHNOLOGY Theme 2: Integrating Changing Technology Platforms TM -10 Dr. Chen, The Trends of the Information Systems Technology

  11. PROJECT MEMBERS Who should be Involved in the Project Development? Consists of ... TECHNICAL PROFESSIONALS USERS MANAGEMENT Dr. Chen, The Trends of the Information Systems Technology TM -11

  12. Theme 2: Integrating Changing Technology Platforms • Advances in • Processing power • Data storage • Communications • Integration of • Computing • Telecommunications • Office support • Broadcasting • Reasons • Physical interconnections • Development involves multiple technologies • Opportunities for integration Dr. Chen, The Trends of the Information Systems Technology TM -12

  13. Theme 3: Assimilating Emerging Technologies • Phase 1: Technology Identification and Investment • Identify technology of interest • Pilot project (usually in IT) to test • Phase 2: Technological Learning and Adaptation • Users test technology in pilot projects • Will the technology make us more effective? • Phase 3: Rationalization / Management Control • Develop support systems and controls for efficient use of technology • Phase 4: Maturity / Widespread Technology Transfer • Spread technology throughout the organization 1.Innovation (Technical-oriented) 2. Learning (User-oriented) 3. Rationalization 4. Maturity TM -13 N Dr. Chen, The Trends of the Information Systems Technology

  14. Theme 4: Sourcing Policies for the IT Value Chain What is outsourcing? • The phenomenon that appeared in the information systems field in the late 1980s was outsourcing, which means turning over a firm's computer operations, network operations, or perhaps other information systems functions to a vendor for a specified time - generally, at least for three years. TM -14 Dr. Chen, The Trends of the Information Systems Technology

  15. OUTSOURCING CONTRACTING: • COMPUTER CENTER OPERATIONS • TELECOMMUNICATIONS NETWORKS • APPLICATION DEVELOPMENT TO EXTERNAL VENDORS * TM -15 Dr. Chen, The Trends of the Information Systems Technology

  16. Why Outsoucing? • Outsourcing has become an option that most CIOs need to consider to satisfy their management that their operation is being run efficiently, effectively, and economically TM -16 Dr. Chen, The Trends of the Information Systems Technology

  17. The Driving Forces Behind Outsourcing • Two drivers • focus • on core business • value • shareholder TM -17 Dr. Chen, The Trends of the Information Systems Technology

  18. Outsourcing As an Economic Strategy • Core competencies • Which sources are less expensive • How much control is needed TM -18 Dr. Chen, The Trends of the Information Systems Technology

  19. TM -19 Dr. Chen, The Trends of the Information Systems Technology

  20. The Expanding Scope of Vendor Options • To buy professional services • To buy a product • To buy a transaction • To use a systems integrator - project based • Outsourcing - time based Cost Speed Quality Products/Services TM -20 Dr. Chen, The Trends of the Information Systems Technology

  21. The Expanding Scope of Vendor Options • To buy professional services • To buy a product • To buy a transaction • To use a systems integrator - project based • Outsourcing - time based Cost Speed Quality Products/Services TM -21 Dr. Chen, The Trends of the Information Systems Technology

  22. When to Outsourcing? • Which IS activities are strategic to our company's business? • Will outsourcing save us at least 15 percent? • Does our firm have access to the needed technology and expertise? • If not, outsourcing may be the answer to acquiring these resources. • Does outsourcing increase our firm's flexibility? TM -22 Dr. Chen, The Trends of the Information Systems Technology

  23. What Activities that Management should notOutsource? • strategy • policy role • the decisions about when to introduce information systems into the organization • the management of the vendor • when the system (IS) department is well managed, and where IT is a core competency TM -23 Dr. Chen, The Trends of the Information Systems Technology

  24. OUTSOURCING BENEFITS • Economy • Service quality • Predictability • Flexibility • Making fixed cost variable • Freeing up human resources for other projects • Freeing up financial capital TM -24 Dr. Chen, The Trends of the Information Systems Technology

  25. CONS OF OUTSOURCING • Loss of control • Vulnerability of strategic information • Dependency TM -25 Dr. Chen, The Trends of the Information Systems Technology

  26. Outsourcing Recommendations • Write shorter contracts - less than 5 years • Subcontract control • Selective outsourcing TM -26 Dr. Chen, The Trends of the Information Systems Technology

  27. Desirable Outcomes and Implementation Issues • On-time • On-budget • Full functionality • user acceptance • Favorable cost-to-benefits ratio • Low maintenance • Scalability • Integration with other systems • Reusability TM -27 Dr. Chen, The Trends of the Information Systems Technology

  28. Theme 4: Sourcing Policies for the IT Value Chain • Why Make? • Custom to needs • Confidentiality • Insulate from external vulnerability • Easy to adapt • Leading-edge competence • Why Buy? • Access to specialized skills • Cost • Staff utilized for most important products • Personnel costs • “Professional” management of service organization • Proliferation of services available TM -28 Dr. Chen, The Trends of the Information Systems Technology

  29. Theme 5: Applications Development Process • SYSTEM DEVELOPMENT PROCESS LIFE CYCLE (SDLC) TM -29 Dr. Chen, The Trends of the Information Systems Technology

  30. SYSTEM DEVELOPMENT(Life Cycle) PROCESS • SYSTEMS ANALYSIS • SYSTEM DESIGN • PROGRAMMING • TESTING • CONVERSION • PRODUCTION & MAINTENANCE * TM -30 Dr. Chen, The Challenge of the Information Systems Technology

  31. SYSTEMS DEVELOPMENT CORE ACTIVITY DESCRIPTION SYSTEMS ANALYSIS IDENTIFY PROBLEM(S) SPECIFY SOLUTIONS ESTABLISH INFORMATION REQUIREMENTS SYSTEMS DESIGN CREATE LOGICAL DESIGN SPECS CREATE PHYSICAL DESIGN SPECS MANAGE TECHNICAL REALIZATION OF SYSTEM PROGRAMMING TRANSLATE DESIGN SPECS INTO PROGRAM CODE TM -31 Dr. Chen, The Challenge of the Information Systems Technology

  32. SYSTEMS DEVELOPMENT CORE ACTIVITY DESCRIPTION TESTING UNIT TEST SYSTEMS TEST ACCEPTANCE TEST CONVERSION PLAN CONVERSION PREPARE DOCUMENTATION TRAIN USERS & TECHNICAL STAFF PRODUCTION & OPERATE SYSTEM MAINTENANCE EVALUATE SYSTEM MODIFY SYSTEM TM -32 Dr. Chen, The Challenge of the Information Systems Technology

  33. Theme 5: Applications Development Process • Design • User request or IT/user proposal • Analysis • (Logical) Design • Construct • Detailed design • Coding • Documentation • Testing • Acquisition TM -33 Dr. Chen, The Trends of the Information Systems Technology

  34. Theme 5: Applications Development Process (Cont.) • Implement • Redesign • Install • Train • Systems test • Operate • Acceptance test • Retrain • Maintain • “Modernization” • Continuous improvement TM -34 Dr. Chen, The Trends of the Information Systems Technology

  35. Management Theme 6: Partnership of Three Constituencies Consists of ... USERS Management IT Management GENERAL Management TM -35 Dr. Chen, The Challenge of the Information Systems Technology

  36. Theme 6: Partnership of Three Constituencies • IT Management • Pool of technical skills • Technology scan • “Professional” development • Process reengineering • User Management • Movement of operational responsibilities to IT • Availability of outside services • User IT sophistication and experience • General Management • Must balance IT / User issues • Executives balance IT/strategies TM -36 Dr. Chen, The Trends of the Information Systems Technology

  37. SPECTRUM OF ORGANIZATIONAL CHANGE RATIONALIZATION AUTOMATION ORGANIZATIONAL CHANGE PARADIGM SHIFT REENGINEERING TM -37 Dr. Chen, The Trends of the Information Systems Technology

  38. SPECTRUM OF ORGANIZATIONAL CHANGE • AUTOMATION: Using technology to perform tasks efficiently / effectively • RATIONALIZATION OF PROCEDURES: Streamline SOPs; eliminate bottlenecks • BUSINESS PROCESS REENGINEERING: Radical redesign of processes to improve cost, quality, service; maximize benefits of technology • PARADIGM SHIFT TM -38 Dr. Chen, The Trends of the Information Systems Technology

  39. What is Business Process and Business Reengineering? • Business process: A set of logically related tasks performed to achieved a defined business outcome • Business reengineering means radically changing how people work - changing business policies and controls, systems and technology, organizational relationships and business practices, and reward programs. TM -39 Dr. Chen, The Trends of the Information Systems Technology

  40. BUSINESS REENGINEERING STEPS: 1. Develop business vision, process objectives 2. Identify process to be redesigned 3. Understand, measure performance of existing processes 4. Identify opportunities for applying information technology 5. Build PROTOTYPE of new process TM -40 Dr. Chen, The Trends of the Information Systems Technology

  41. TM -41 Dr. Chen, The Trends of the Information Systems Technology

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