Information Systems Planning

1. Information Systems Planning

2. 1 Information Systems Planning Distributed Systems Architecture 2

3. Paradox of IS Planning • Most organization's survival now depends on IT • Planning of its effective use is a matter of organizational life and death • IT is changing so fast • Is it useless to do IS planning? • A variety of approaches, tools and mechanisms available for IS planning • No best way to do it.

4. Mindset for Planning • Traditional view • Determining what decisions to make in the future • A better view • Developing a view of the future that guides decision making today • Difference : strategy making instead of planning • Strategy: stating the direction in which you want to go and how you intend to get there

5. Types of Planning

6. Why Planning Is So Difficult? (1) • Business goals and systems plans need to align • Strategic systems plans need to align with business goals and support those objectives • Will be difficult if CIO is not part of senior management • Technologies are rapidly changing • Continuous planning based on monitoring and experimenting new technologies • Advanced technology groups

7. Why Planning Is So Difficult? (2) • Companies need portfolios rather than projects • Evaluation on more than their individual merit • How they fit into other projects and how they balance the portfolio of projects • Infrastructure development is difficult to fund • Often done under the auspices of a large application project • Challenge: develop improved applications and improve infrastructure over time • Mainframe C/S ERP Web application Web Services

8. Why Planning Is So Difficult? (3) • Responsibility Needs to be Joint • Systems planning has become business planning, not just a technology issue • It is better done by a full partnership of C-level officers • Other planning issues • Top-down Vs. bottom-up • Radical change Vs. continuous • Planning culture in which the systems planning must fit

9. Tradition Strategy Making Step 1 Where is the business going and why? Business Strategy • Assumptions: • The future can be predicted • Time is available to do these 3 parts • IS supports and follows the business • Top management knows best (broadest view of firm) • Company: like an "Army" • Business decision • Objectives and direction • Change Supports business Direction For IS System Strategy Step 2 What is required? • Business-based • Demand-oriented • Application-focused Infrastructure and services Needs and priorities IT Strategy Step 3 How can it be delivered? • Activity-based • Supply-oriented • Technology-focused

10. A World of Rapid Change (1) • Today, due to the Internet and other technological advances, these assumptions no longer hold true: • The future cannot be predicted • Discontinuous change • Who predicted Internet, Amazon, eBay etc.? • Time is not available for the sequence • Never enough time in Internet Age • IT implementation planning needs to go ahead of business strategizing

11. A World of Rapid Change (2) • IS does not JUST support the business anymore • Top management may not know best • Inside out Vs. outside in approach • An organization is not like an army • Industrial era metaphor no longer always applies Customer and Suppliers Partners Front Line Core

12. Today's Sense-and-Response Approach (1) Old-era strategy One big choice, long commitment • Let strategies unfold rather than plan them: • A sense-and-respond approach when predictions are risky • Sense a new opportunity and immediately respond by testing it • Myriad of small experiments Time New-era strategy Many small choices, short commitments Time Strategic envelop

13. Case Example: Microsoft • Abandoned proprietary network despite big investment when it did not capture enough customers • Moved on to buying Internet companies as well as aligning with Sun to promote Java • Over time, they moved into a variety of technologies: • Web, Cable news, Digital movies, Cable modems, Handheld OS, Video server, Music, Xbox, .Net, Search engines... • Not all strategies came from top management • e.g. first server came from a rebel's unofficial project • Getting its fingers into every pie that might become important

14. Today's Sense-and-Response Approach (2) • Formulate strategy closest to the action: • Close contact with the market • Employees who interact daily with customers, suppliers and partners (organizational edges) • Employees who are closest to the future should become prime strategists. • In the Internet Age, this means younger employees

15. Today's Sense-and-Response Approach (3) • Guide strategy-making with a “strategic envelope": • Having a myriad of potential corporate strategies being tested in parallel could lead to anarchy without a central guiding mechanism • Top management set the parameters for the experiments, and then continually manage that context • Experiment by territory (as Microsoft did) • Strategic conversation • Meet regularly with the experimenters

16. Today's Sense-and-Response Approach (4) • Be at the Table • IS executives should be actively involved in business strategizing • The IS function needs to be strategy-oriented • CIO need to make their departments credible and outsource most operational work • Test the Future • Need to test potential futures before the business is ready for them (thinking ahead of the business) • Provide funding for experiments • Work with research organizations • Have an emerging technologies group

17. Today's Sense-and-Response Approach (5) • Put the Infrastructure in Place: • Moving quickly in Internet commerce means having the right IT infrastructure in place. • IT experiments are recommended to include those that test painful infrastructure issues • Create and maintain common, consistent data definitions • Create and instill mobile commercial standards among handheld devices • Implement e-commerce security and privacy measures • Determine operational platforms (ERP, Supply Chain Management …)

18. Stages of Growth (1) • Richard Nolan et al observed four stages in the introduction and assimilations of a new technology • Early Successes • Increased interest and experimentation • Contagion • Interest grows rapidly; growth is uncontrolled; learning period for the field • Control • Efforts begun toward cost reduction and standardization • Integration • Dominant design mastered; setting the stage for newer technology

19. Stages of Growth (2) Technological discontinuity Network Era Organizational Learning Micro Era Stage 4: Integration Stage 2: Contagion Stage 3: Control DP Era Stage 3: Control Stage 2: Contagion Stage 4: Integration and Stage 1 of Micro Era Stage 4: Integration and Stage 1 of Network Era Stage 3: Control Stage 1: Initiation Stage 2: Contagion 1960 1980 Time 1995 2010

20. Stages of Growth (3) • The importance of the theory is understanding where a technology or company resides on the organizational learning curve • e.g. Web Service is currently in Stage 2, too much control at the learning and experimentation stage can kill off new uses of technology • Management principles differ from stage to stage • Different technologies are in different stages at any point in time

21. Competitive Forces Model (1) • Michael Porter's Five Forces Model • A model that determines the relative attractiveness (competition) of an industry. • Five forces • Bargaining power of customers and buyers • High when buyers have many choices of whom to buy from, and low when the choices are few. • Bargaining power of suppliers • High when buyers have few choices of whom to buy from, and low when there are many choices.

22. Competitive Forces Model (2) • Threat of substitute products or services • Low if there are very few alternatives to replace the product or service. • Switching costs • Costs that can make customers reluctant to switch to another product or service. • Threat of new entrants • High when it is easy for competitors to enter the market • The intensity of rivalry among competitors • High when the industry is less attractive.

23. Competitive Forces Model (3)  How will the business react to threats (and opportunities)? Potential Entrants Threat of new entrants Industry Competitors Bargaining power of suppliers Bargaining power of buyers Customers and Buyers Suppliers    Rivalry among existing firms Threat of substitute products or services  Substitutes

24. Competitive Forces Model (4)  Potential Entrants Threat of new entrants Industry Competitors The strategy and actions an organization adopts depend upon its perceptions of itself and these threats. Bargaining power of suppliers Bargaining power of buyers Customers and Buyers Suppliers • Porter’s strategies: • Product differentiation (non-duplicable product or service) • Low-cost producer • Market niche (market segment or geographical market)    Rivalry among existing firms Threat of substitute products or services  Substitutes

25. Five Forces Analysis of the Internet • The Internet tends to dampen the profitability of industries • Increases the bargaining power of buyers • Decreases barriers to entry • Increases the bargaining power of suppliers • Increases the threat of substitute products and services • Intensifies rivalry among competitors • Success depends on offering distinct value • Firms should focus on their strategic position in an industry and how they will maintain profitability

26. 1 Information Systems Planning Distributed Systems Architecture 2

27. Definition: IT Architecture VS. IT Infrastructure • An IT architecture is a blueprint showing how the parts will interact and interrelate. • System, information, departments... • Multiplicity of structures and views • An IT infrastructure is the implementation of an architecture. • processors, software, databases, electronic links, data centers, standards, skills, electronic processes... • We now tend to divide computing into applications and infrastructures

28. The Evolution of Distributed Systems • Mainframes: with dumb terminals • Minicomputers moved computing into departments • The master-slave computing model persisted and processing was mainly centralized • Microcomputer moved processing power into desktop, briefcase and handhelds • Client/server computing • Internet: a globally distributed system • Interesting twist: power returning to a type of centralized processing with networks of servers

29. Four Attributes of Distributed Systems • The degree to which a system is distributed can be determined by answering four questions: • Where is the processing done? • How are the processors and other devices interconnected? • Where is the information stored? • What rules or standards are used?

30. Distributed Processing • Limited processing power of a single node VS. increasing application demands • Balance the load and improve overall performance • Let machines handle the work they do best • Interoperability: information exchange between heterogeneous computing platforms • Protocols • Two-way message passing between user applications

31. Connectivity Among Processors • Data exchanges through electronic communication links • TCP/IP • Ethernet, ATM, FDDI, Frame relay... • Planned Redundancy for reliability • Two or more independent paths between two nodes to provide automatic alternate routing • Topology and reliability of the Internet

32. Distributed Databases • Two distributed database schemes • Divide a database and distribute its portions throughout a system without duplicating the data • Transparent user access • Store the same data at several different locations, with one site containing the master file • Synchronization issue • E.g. edge servers

33. System-wide Rules • Rules governing communication between nodes, security, data accessibility, program and file transfers, and common operating procedures • Open standards after 1990s • OSI Reference Model • SQL • API: standardized interface • TCP/IP • Open source

34. Internet---A Scale-free Network (1) • Internet is not designed, but evolved • Internet is a scale-free network • Scale-free networks are very common and a very important category of real networks. • Scale-free networks are the direct result of self-organized growth • Growth: networks continuously expand by the addition of new nodes • Special type of growth called preferential attachment • Preferential Attachment : The attachment is NOT uniform • A node is linked with higher probability to a node that already has a large number of links

35. Five nodes with most links First neighbors of red nodes Internet---A Scale-free Network (2) Random/ 27% reach 60% reach

36. Power-law distribution Poisson distribution Scale-free Network Exponential Network Internet---A Scale-free Network (3) P(k)~k-γ

39. Internet---Topological Robustness • Topological robustness: the Internet is robust in the presence of random failures. • At any given time hundreds of routers are down but the performance is not impacted • It will function even if we remove randomly 80% of the nodes. • Theoretical and experimental investigations show that scale-free networks are topologically robust

40. Internet---Vulnerability to Targeted Attacks • Scale-free networks such as Internet are vulnerable to attacks. • If a malicious attack could simultaneously remove 5% of hubs (the highly connected nodes) the network would disintegrate

41. Internet---Virus • Scale-free networks like internet are vulnerable to spreading viruses • Hubs are passing them massively to the connected multiple nodes. • This suggests immunizing hubs.

42. When to Distribute Computing Responsibilities (1) • The decision of distributing computing responsibilities is rather managerial than technical • People deciding how their portion of business operates should also decide how they use IT

43. When to Distribute Computing Responsibilities (2) • Systems responsibilities can be distributed unless the following are true: • Are the operations interdependent? • For interdependent, their planning, development, resources, and operations must be centrally coordinated • Are the businesses really homogenous? • Processing may be distributed, but planning and hardware selection should be centralized • Does the corporate culture support decentralization? • Corporate culture might centralize finance, HR, and systems planning

44. An Organizational Framework Business Ecosystem • Systems may be needed for all 7 levels • Inter-organizational links can occur at all six internal levels • The current hot levels • Level1: inter-enterprise computing • Leve5: where business processes reside 1 Enterprise 2 Country or Region 3 Plant or Site 4 Department or Process 5 Work Group or Team 6 Individual 7

45. A Technical Framework (1) • The SUMURU architecture developed in 1982, has stood the test of time. • It provides a clear conceptual framework for understanding various components of a distributed architecture.

46. A Technical Framework (2)

47. A Technical Framework (3)