Management Information Systems - Class Note # 3 (Chap-12)

1. Management Information Systems - Class Note # 3(Chap-12) Prof. Yuan-Shyi Peter Chiu Feb. 2012

2. Chap 12 Redesigning the organization with information systems • 12.1 Systems as planned organizational change • 12.2 Business process reengineering and Total Quality Management (TQM) • 12.3 Overview of Systems Development • 12.4 Alternative System-Building Approaches 2

3. ◇ 12.1 How to develop an Information Systems Plan~ Road Map indicating direction of System development : • PURPOSE OF THE PLAN • STRATEGIC BUSINESS PLAN • CURRENT SYSTEMS • NEW DEVELOPMENTS • MANAGEMENT STRATEGY • IMPLEMENTATION PLAN • BUDGET REQUIREMENTS ( see p.383 ) 3

4. ◇ 12.1 Enterprise analysis ( Business Systems Planning ) Organization-wide Information Needs in terms of : • Organizational Units • Functions • Processes • Data Elements Helps Identify Key Entities & Attributes in Organization’s Data 4

5. ◇ 12.1 Critical Success Factors(CSFs) ■ small number, easily identifiable operational goals ■ shaped by the industry, the firm, the manager, the broader environment ■ believed to assure firm’s success ■ used to determine organization’s information requirements 5

6. ◇ 12.1 Critical Success Factors & Goals example: profit concern • Goals (Automobile industry) : Earnings per share, Return on investment, Market share, New product • CSF : Styling, Quality dealer system, Cost control, Energy standards (Also see Table 12-1) 6

7. ◇ 12.1 Using CSFs to develop systems • Collect managers’ CSFs • Aggregate + analyze individuals’ CSFs • Develop agreement on company CSFs • Define company CSFs • Use CSFs to develop information system priorities • Define DSS & databases (Also see Fig. 12-2) 7

8. ◇ Fig 12-2: Using CSFs to develop systems. 8

9. ◇ 12.1 Spectrum of Organizational Change • AUTOMATION Using technology to perform tasks efficiently / effectively • RATIONALIZATION OF PROCEDURES Streamline SOPs ; Eliminate bottlenecks • BUSINESS REENGINEERING Radical redesign of processes to improve cost, quality, service; maximize benefits of technology • PARADIGM SHIFT 9

10. ◇ Fig 12-3: Organizational change carries risks and rewards. 10

11. ◇ 12.1 Paradigm Shift • PARADIGM is a complete mental model of how a complex system functions • A PARADIGM SHIFT involves “rethinking” the nature of the business, the organization; a complete reconception of how the system should function 11

12. ◇ 12.2 Business Process Reengineering (BPR)& TQM • WORK-FLOW MANAGEMENT: Streamlining process to move documents easily, efficiently • REENGINEERING: Redesigning business processes to lower cost, speed development 12

13. 12.2 Process Improvement and Total Quality Management  Simplifying the Product or the Production Process.  Benchmarking  Use customer demands as a guide to improving products and services  Reduce cycle time  Improve the quality and precision of the design  Increase the precision of production 13

14. ◇ 12.3 Three basic solution alternatives exist for every systems problem To Do Nothing To modify or enhance Existing systems To Develop a New system 14

15. 12.3 Fig 12-5:Overview of System Development. 15

16. 12.3 Systems Development The activities that go into producing An information systems solution to an organizational problem or opportunity 16

17. 12.3 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 17

18. 12.3 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 18

19. 12.3 Systems Analysis Analysis of Problem to be solved with an Information System Feasibility Study: Can problem be solved within constraints ? 19

20. 12.3 Feasibility Studyas part of the systems analysis process ,to determine whether the solution is achievable ,given the organization’s resources and constraints Technical feasibility Economic feasibility Operational feasibility 20

21. 12.3 Feasibility • TECHNICAL : Available hardware, software, technical resources • ECONOMIC : Will benefits outweigh costs • OPERATIONAL : Is solution desirable within existing conditions? INFORMATION REQUIREMENTS:Detailed statement of new system needs 21

22. ◇ 12.3 System Design Details how system will meet the information requirements as determined by the systems analysis. Considering alternative technology configurations Management & control of the technical realization of systems Details the system spec that will deliver the functions Identified during systems analysis 22

23. 12.3 Logical and Physical Design Logical design Lays out the components of the system and their relationship to each other as they would appear to Users . Physical design Produces the actual spec for Hardware, software, physical database, I/O media, Manual procedures , and Specific controls. See Table 12-4 for Design Specifications p.395 23

24. ◇ 12.3 Role of end users • Users drive systems effort • Must have sufficient control to ensure system reflects business priorities, needs • Functional users drive system needs 24

25. 12.3 Completing system development process • Programming: Translating needs to program code • Testing: Does system produce desired results? • Conversion: Changing from the old to the new 25

26. 12.3 Testing Unit Testing ( program testing ) System Testing ( functions) Acceptance Testing ( final certification) 26

27. 12.3 Testing • Unit testing : Tests each unit separately • System testing : Do modules function as planned? • Acceptance testing : Final certification Test plan : Preparations for tests to be performed 27

28. 12.3 Conversion Parallel strategy Direct cutover Pilot study Phased approach 28

29. 12.3 Conversion • Parallel : Old & new run same problems. Give same results? • Direct cutover : Risky conversion to new system • Pilot : Introduce into one area. Does it work? Yes: introduce into other area • Phased : Introduce in stages Conversion plan : schedule for conversion Documentation Description of how system works 29

30. 12.3 Production & Maintenance • Production: Constant review by users & operators. Does it meet goals? • Maintenance: Upkeep; Update; Corrections over time 30

31. 12.4 Alternative System-Building Approaches • Systems lifecycle • Traditional methodology for developing information system • Partitions systems development process into formal stages that must be completed sequentially See Table 12-6 for The Systems Lifecycle p.399 31

32. 12.4 The Traditional System Lifecycle  Project Definition : Is there a problem? Can it be solved with a project ?  System Study : Analyze problems in existing systems; define objectives, evaluate alternatives  Design : Logical & physical specifications for systems solution  Programming : Develop software code 32

33. 12.4 The Traditional System Lifecycle  Installation : Construct, test, train, convert to new system  Post-Implementation : On-going evaluation, modifications for improvement to meet new requirements Necessary for Large , Complex Systems & Projects 33

34. 12.4 Limitations of the LIFE CYCLE Approach Building large TPS and MIS where requirements are highly structured and well-defined Very resource intensive : costly and time-consuming Inflexible and inhibits change Ill-suited to decision-oriented applications 34

35. 12.4 Alternative System-building Approaches Prototyping  Application Software Packages  End-user Development  Outsourcing 35

36. Fig 12-7: The prototyping process. 36

37. 12.4 Advantages & Disadvantages of Prototyping Most useful when there is some uncertainty about requirements or design solutions Especially valuable for the design of the end-user interface of an information system, decision-support applications May not be appropriate for all applications, Better suited for smaller applications Often not being fully documented and tested, not being carried out as a polished production system 37

38. 12.4 Developing systems with Application Software Packages under the following circumstances Where functions are common to many companies Where information systems resources for in-house development are in short supply When desktop microcomputer applications are being developed for end users 38

39. ◇ 12.4 Advantages of Packages Design activities may easily consume up to 50 percent or more of the development effort Testing the installed package can be accomplished in a relatively shorter period Vendor is responsible for making changes to keep the system in compliance with change; and enhancements Cut the costs and free up internal staff for other applications; System and user documentation are prewritten and kept up to date by the vendor. 39

40. ◇ 12.4 Disadvantages of Packages Hamper the development effort by raising conversion costs May not meet all of an organization’s requirements Vendor refuses to support their products if changes have been made that altered the package’s source code Customization may be so expensive and time-consuming 40

41. ◇ 12.4 A Substantially Customized Package Front-end programs Package Back-end programs 41

42. ◇ 12.4 Package Evaluation CriteriaRequest For Proposal ( RFP) Vendor Quality Functions Included Database / File Characteristics Hardware & Software Resources Cost Flexibility Documentation User- Friendliness Installation Effort Maintenance 42

43. ◇ Fig.12-8: The effects of customizing a software package on total implementation costs. 43

44. ◇ Traditional systems (Life Cycle) Development Staff Information System management Systems analyst programmer Middle or senior management Fig.12-9: End-user versus system lifecycle development Design Program Test Weeks or months End-User development End-user computing tools Query languages Graphics languages Report generators Application generators Very-high-level languages Microcomputer tools Staff Middle or senior management Minutes or days 44

45. ◇ 12.4 Advantages of End-user-developed I.S. Improved requirement determination User involvement and satisfaction Control of the systems development process by users Reduced application backlog 45

46. ◇ 12.4 Disadvantagesof End-user-developed I.S. Insufficient review and analysis Lack of proper quality assurance standards and controls Uncontrolled data Proliferation of “private” information systems ■ 46

47. 12.4 When to use outsourcing Low reward for excellence Not critical Will not affect future information systems innovation The firm’s existing information systems capabilities are limited 47

48. ◇ 12.4 Advantagesof Outsourcing I.S. Economy Service Quality Flexibility Predictability Making fixed costs variable Freeing up Human resources Freeing up Financial capital 48

49. ◇ 12.4 Disadvantagesof Outsourcing I.S. Loss of control Vulnerability of strategic information Dependency ■ 49

50. ◇ 12.4 Management Challengeson alternative systems building methods Determining the right systems development strategy to use Controlling information systems development outside the I.S.Dept. Selecting a system development strategy that fits into the firm’s information architecture and strategic plan 50