IS 312 - Information systems Planning & Acquisition 2

1. Information Systems Department IS 312 - Information systems Planning & Acquisition 2 LECTURE 6

2. IS Planning & Acquisition • To be covered: • More types of IS. • Frameworks for Analyzing Information Systems • IS planning and its importance • Software acquisition options • Project management • Process of significant role in project selection • Information Systems Planning in an organization • Corporate Strategy Planning (CSP) • Strategic IS Planning

3. There are other types of IS such as • Data warehouses • Enterprise resource planning • Enterprise systems • Search engines • Geographic information system • Global information system • Executive information systems

4. Executive information systems Provide critical information from MIS, DSS, and other sources tailored to theinformation needs of executives. • Examples: systems for easy access to analyses of business performance, actions of competitors, and economic developments to support strategic planning.

5. Issue !! How does an organization recognize the need for a new computer system?

6. Forces that determine the need for a new system

7. Procedure for Introducing new IS to the Organization ROI: Ratio of benefits to the money invested

8. Frameworks for Analyzing Information Systems • There are many frameworks for analyzing and studying information systems. Many of the commercially inspired frameworks are tied to a specific system methodology: they are very specific, often proprietary, approaches to analyzing information needs, designing and developing information systems that address these needs. • e.g. strategic planning, comparative analysis, historical analysis, etc. • To give you an idea of these frameworks, we give you three examples.

9. 1- Value chain analysis • In value chain analysis, the organization is seen as a large input-output system, in which the inputs are the raw materials or services brought into the organization, which are processed in some way, marketed and sold as outputs. • Each point of this chain is analyzed to uncover opportunities where value can be added or costs reduced. • Although the complete model of the value chain usually includes both primary and support activities, the greatest level of return can be expected through the implementation of IS within the primary activities.

11. 1- Value chain analysis • Inbound logistics include the receiving, warehousing, and inventory control of input materials. • Operations are the value-creating activities that transform the inputs into the final product. • Outbound logistics are the activities required to get the finished product to the customer, including warehousing, order fulfillment, etc. • Marketing & Sales are those activities associated with getting buyers to purchase the product, including channel selection, advertising, pricing, etc. • Service activities are those that maintain and enhance the product's value including customer support, repair services, etc.

12. 2- The Zachman Framework • Zachman developed a framework aimed at a more systematic delivery of information systems, modeled loosely on the way buildings are constructed from an architectural point of view. According to Zachman, information systems need to be considered from six different perspectives.

13. 2- The Zachman Framework • Data: which data entities do you want to capture and what are the relationships between these entities? • Function: which (business) functions need to be addressed and which arguments does each function have? • Network: which nodes need to be supported and what links exist between them? • People: who are your agents and what are their tasks or work? • Time. when do things happen and to which cycles do they conform? • Motivation: what are the ends or goals and by what means will you get there? • Each of these dimensions is then examined at a number of different levels, to identify the system requirements and how they can best be implemented.

14. 3- Strategic Importance Grid • The strategic importance grid looks at the entire information systems portfolio of an organization i.e. all the systems currently in operation as well as the future systems currently under development or being planned. • The critical focus of this framework is the assessment of whether a significant portion of an organization's systems is of a strategic nature and classifies the organization accordingly into one of four possible categories on the IS strategic importance grid.

15. 3- Strategic Importance Grid The main use of this table is to assess the importance of the IS strategic planning in the overall strategic business plan. It can also be of use when doing strategic competitor analysis or when assessing significant shifts in IT budgets.

16. IS Planning

17. IS Planning Process • Other Issues: • - Availability of technical support • Estimation of operating cost • The financing method (rent or buy)

18. Cost-benefit Analysis N.B. Difficult to measure but could be of significant value

19. Typical Costs to be Considered in Evaluating Projects

20. Why do we undertakeCost-benefit Analysis • To ensure that over System’s lifetime, its benefits will exceed its costs, • Even though during the initial stage, costs are likely to exceed the benefits

21. Funding of Organization’s IS • Three basic options available for the funding of an organization's information systems: • unallocated cost centre • cost centre • profit centre • The traditional model of an unallocated cost centre means that IS regarded as an organizational cost, for which an annual budget is allocated in order to meet the costs of system development and maintenance. • Other departments are likely to have little influence over the spending of the IS budget, the prioritizing of projects and the standard of service that is delivered.

22. Funding of IS Continue .. • When the IS department operates as an allocated cost centre, then internal accounting is used to allocate IS costs to the departments using them. This makes it easier to identify areas of demand within the organization, and may reduce the number of requests for (unnecessary) projects. • A profit centre approach means that the IS department must compete with outside vendors in providing IS services to the organization. This often results in increased efficiency of the IS department, but may reduce the time spent on less profitable developmental work, reducing the ability to provide innovative and potentially strategic IS capabilities.

23. Software Acquisition Options • End-user Computing

24. In-house Development If IS staff is busy to attend the low priority projects or do not have the necessary technical expertise Then alternatives development method should be considered

25. In-house development • Most large organizations have their own IS department, which is responsible for the development and support of the computer systems used to support the company’s strategic goals. • The methods commonly used during in-house development are covered in detail in the next chapter. • However, this approach depends on highly skilled employees, and because of the time and cost involved, it often results in a backlog of projects awaiting development. If IS staff do not have the necessary technical expertise, or are too busy to attend to low priority projects, then alternative system development methods may need to be considered.

26. Commercial Packages:Off-the-shelf software packages

27. Commercial packages (Explain) • The acquisition of off-the-shelf software packages provides a low-cost alternative to in-house development, since the cost of development has been spread over a number of users. • The software can be examined and tested prior to purchase, minimizing the risk involved, and user training and support are often commercially available. • Even if some customization is required, a package can be installed in a very much shorter time frame than if an equivalent system is developed from scratch. • In general, if a suitable package is available, then this is the best option for acquisition of software.

28. Outsourcing

29. Outsourcing (Explain) • Outsourcing involves the purchasing of a service, in this case software development, from another company. • With rapid changes in technology and high turnover rates for IS staff, it becomes increasingly difficult to maintain high levels of expertise in-house. • Outsourcing allows an organization to focus on its core competencies, while benefiting from the expertise and economies of scale that can be provided by the outsourcing company. • Contracts and service level agreements need to be clearly defined, and in many cases organizations will outsource only their more general systems, while retaining control over strategic projects.

30. Outsourcing (Explain) • A recent trend is towards the use of application service providers (ASPs), who maintain a range of software programs on their own computers. These are made available to customers via a web interface, and are a cost-effective solution for the provision of software that is used infrequently or from varying locations. • The principle underlying this approach is that just as a company would not consider producing electricity privately to meet its own needs, but finds it easier to pay a supplier based on usage, so the company can pay for the use of applications which have been developed, installed and maintained by an ASP.

31. End-user computing Disuse!!

32. End-user computing (Explain) • With the growth of computer literacy in the workplace, plus decreased costs of computer hardware and user-friendly development tools, end-user computing has become an important factor in system development. Faced with frustrating backlogs in the IS department, or inspired by the opportunities presented by new technologies, an increasing number of users are attempting to develop their own systems. • The majority of user-developed applications tend to be personal or departmental in function, and often do not adhere to organizational standards. • Data validation and security may be poor, backup and recovery procedures are often missing, and lack of documentation means that if the developer leaves the organization, then the system is likely to fall into disuse. In response to these concerns, user support centers may be established to provide training and assistance for users.

33. Project Management

34. Project Management • What is the difference between Project Management and Business Management? Project Management

35. Project Management (Explain) • Project management differs from general business management in that a project has a beginning and an end, between which a definable set of activities must occur. • Most projects are once-off efforts, so previous experience is likely to be limited, and the high degree of interaction between participants and tasks adds to project complexity. • In order to meet these challenges, special project management tools have been developed to assist with project planning, resource allocation, scheduling and review.

36. Project Management

37. Tasks of the project manager • Define the scope of the project, the tasks to be accomplished and the order in which they should be done. • This information can be represented using a Gantt chart, which also reflects the start and end dates of major tasks and the staff involved. Dependencies between tasks then need to be identified. • A network diagram or Pert chart shows the minimum and maximum time that might be needed for each task, as well as which tasks must be completed in sequence and which can be addressed in parallel, so that the impact of delays can be accurately assessed. • Risk assessment techniques can be used to identify risk factors and implement strategies for minimizing the potential problems.

38. Cont. • The progress of a project must be monitored throughout its lifespan, usually on the basis of deliverables submitted at the end of each phase. Comparisons with the budgeted time and cost are made at frequent intervals, so that problems can be identified and corrected as early as possible. • Another important element in project management is the acquisition and training of staff and the development of relationships both within the team and with the future users of the system. This can be supported through the organization's intranet together with the effective use of groupware applications such as email and electronic meeting support.

39. Description of three process that play significant role in project selection • Value chain analysis • Information System Planning • Corporate Strategic Planning

40. Information Systems Planning in an organization • ISP requires support of top management and its commitment to reach desired objectives. • Techniques used to capture information system needs, include • Interviewing managers and executives • Reviewing corporate documents • Analysing competitors, markets and products • Three key activities: • Describe the Current Situation • Describe the Target (or Future) Situation • Develop a Transition Plan and Strategy

41. Cont. • Information Systems Planning • Describing the Current Situation There are two approaches to describe current situation needs • Top-down Planning • Generic methodology that attempts to gain a broad understanding of the information system needs of the entire organization • Bottom-up Planning • Generic methodology that identifies and defines IS development projects based upon solving operational business problems or taking advantage of some business opportunities

42. Cont. 1. Describing the Current Situation (Continued) Include : • Planning team is chartered to model existing situation. • Identification of Organizational: • Locations • Units • Functions • Processes • Data • Information Systems

43. Information collected about current situation • Locations where the company operates • Business unitthat operate within a company • Functions= cross organisational collection of activities used to perform day-to-day business operation. • Processesof a company • Data underlying processes • Information systemrepresent automated and non automated systems used to support business processes.

44. Information Systems Planning in an organization 2. Describing the Target Situation • Define situation and update list of organizational locations, functions, etc. to reflect desired locations, functions, etc. • Planners focus on differences between current lists and future lists and

45. Cont. 3-Developing a transition strategy and plans • Plans reflect both short-term and long-term organisational development needs • Plans include organisational mission, information inventory, mission and objectives of IS, constraints, long-term plans and short-term plans • Selected projects are those derived from ISP and that fulfil the gap between current and desired situation

46. Corporate Strategy Planning (CSP) • Effective deployment of resources require clearly understanding of organisational missions, objectives & strategy • Corporate Strategy Planning is a top-down process of three steps • CSP is an ongoing process that defines the mission, objectives and strategies of an organisation • CSP is a process that is frequently subject to change • It requires constant surveillance

47. Analysis of strategic position: what is the current position? Desired strategic position: what are the objectives Design of the possible strategies to achieve desired goals Process of corporate strategy planning Steps:

48. Future enterprise • Desired situation for informational needs • Listing of manual & automated processes • Listing of manual & automated data • Technology inventory • Human resources inventory Strategic plan • Schedule of projects to transit from current to desired • Project 1 • Project 2 • ---- ISP and Corporate Strategy Planning Current enterprise • Current situation for informational needs • Listing of manual & automated processes • Listing of manual & automated data • Technology inventory • Human resources inventory

49. Strategic Alignment • A high degree of fit and consonance between the priorities and activities of the IS function and the strategic direction of the firm • Careful planning is critical for strategic alignments, especially for firms in highly competitive environments.

50. Six Key IS Decisions • How much should we spend on IT? • What the role of IS and technology should be • Which business processes should receive the IT dollars? • What business processes are most important • Which IT capabilities need to be companywide? • The cost/benefits of standardization and flexibility • How good do our IT services really need to be? • The degree of service the firm needs and are willing to pay for • What security and privacy risks will we accept? • Whom do we blame if an IT initiative fails? • Allocate resources and assign responsibility for IS projects