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Information Systems for Managers ”Building Information Systems”

Information Systems for Managers ”Building Information Systems”. (16 th Apr, 2001) Tralvex (Rex) Yeap MAAAI MSCS University of Leeds. Fig 3.1 IS Plan. Building Information Systems IS Development: IS Plan. IS development is about how IS are conceived , built , and installed .

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Information Systems for Managers ”Building Information Systems”

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  1. Information Systems for Managers”Building Information Systems” (16th Apr, 2001) Tralvex (Rex) Yeap MAAAI MSCS University of Leeds

  2. Fig 3.1 IS Plan Building Information SystemsIS Development: IS Plan • IS development is about how IS are conceived, built, and installed. • Starting with an IS Plan - A road map indicating the direction of system development, the rationale, the currentsituation, the managementstrategy, the implementationplan, and the budget.

  3. Building Information SystemsIS Development: Organizational Information Requirements • To develop an effectivesystemsplan, the organization must have a clear understanding of both long- and short-term informationrequirements (IR). • Two principal methodologies for establishing the essential IR of an organization as a whole are (1) Enterprise Analysis and (2) CriticalSuccess Factors (CSF). • Enterprise analysis (aka business systems planning) propagates that the IR of an organization can only be understood by looking at the entire organization in terms of organizational units, functions, processes and data elements, see Figure 3.2.

  4. Building Information SystemsIS Development: Organizational Information Requirements(cont.) Fig 3.2 Process/Organization matrix. This chart indicates who in the organization participates in specific processes and the nature of their involvement

  5. Building Information SystemsIS Development: Organizational Information Requirements(cont.) • CSF (aka strategic analysis) approach propagates that the IR of an organization are determined by a small number of CSFs of managers. • CSFs are operational goals in nature. Success of an organization is measured by whether the goals are achieved. • The industry, the firm, the manager, and the broader environment influence and shaped CSFs. Notice that this is broader than enterprise analysis. • Examples of CSFs for a manufacturing industry might include lead-time, flexibility, cost, quality and level of innovation. • Quickie class activity on your organization/department CSFs - state your department and two CSFs.

  6. Building Information SystemsIS Development: The Spectrum of Organizational Change • IT promote various degrees of organizational change. • Four kinds of structural organizational change which are enabled by IT: (1) Automation, (2) Rationalization, (3) Reengineering and (4) Paradigm shifts. • (1) Automation: The use of computers to speedup the performance of existing tasks. • (2) Rationalization of procedures: The streamlining of standard operating procedures, eliminating obvious bottlenecks so that automation makes operating procedures moreefficient.

  7. Building Information SystemsIS Development: The Spectrum of Organizational Change(cont.) • (3) Reengineering: Business process reengineering (BPR) is the radical redesign of business processes, combining steps to cut waste and eliminating repetitive, paper intensive tasks to improvecost, quality, and service and to maximize the benefits of IT. eg. KRDL BPR on Patent Workflow using Intelligent Fax Routing and Web Servers. • (4) Paradigm shift: Radical re-conceptualization of the nature of the business and the nature of the organization.

  8. Building Information SystemsIS Development: Systems Development • Systems development is the activities that go into producing an IS solution to an organizational problem or opportunity. Fig 3.2 Typical System Development Life Cycle (SDLC) diagram.

  9. Building Information SystemsIS Development: Business Value of IS • The worth of systems from a financial perspective essentially revolves around the question of return on invested capital. • Cost of IS includes (1) Hardware (2) Telecommunications (3) Software (4) Services (5) Manpower. • Tangible Benefits of IS in terms of cost saving includes (1) Increasedproductivity (2) Lower operational costs (3) Reduced work force (4) Reduced rate of growth in expenses, etc. • Intangible Benefits of IS includes (1) Improved asset utilization (2) Improved resource control (3) Improved organizational planning (4) Improved decision making (4) Improved operations, etc.

  10. Building Information SystemsIS Development: Business Value of IS (cont.) • Capital budgeting is the process of analyzing and selecting various proposals for capital expenditures. • Six commonly used capital budgeting models (1) The payback method(2) The accounting rate of return on investment (ROI)(3) The cost-benefit ratio (CBR)(4) The net present value (NPV)(5) The profitability index (PI)(6) The internal rate of return (IRR) • Other non-financial methods includes Portfolio Analysis (high-benefit, low-risk projects) and Scoring Models (Weightage-Points system). • Additional reading materials for IS Development titled “Alignment of IS Plans with Business Plans, IS Planning Problems and Usefulness of IS Plans”

  11. Building Information SystemsAlternative IS Development: SDLC revisit • The SDLC is the oldest method for building IS and is still used today for complexmedium to large systems projects. • SDLC however, is not well suited for small scale projects because:(1) It is very resourceintensive(2) It is very inflexible and inhibitschange(3) It is ill-suited for decision-oriented applications Fig 3.2 Typical System Development Life Cycle (SDLC) diagram.

  12. Building Information SystemsAlternative IS Development: SDLC revisit (cont.) Figure 3.3 Cost to make a particular change in SDLC

  13. Building Information SystemsAlternative IS Development: SDLC revisit (cont.)

  14. Building Information SystemsAlternative IS Development: (1) Prototyping • An iterative approach to systems development • Operational prototypeAccesses realdatafiles, edits input data, makes necessary computations and comparisons, and produces realoutput (in short, real IPO). • Non-operational prototypeA mockup, or model (or simulated IPO). Figure 3.4 Prototyping Process

  15. Building Information SystemsAlternative IS Development: (2) Application Software • Another alternative strategy is to develop an IS by purchasing an off-the-shelf application software. eg. SAPSolutions for a variety of industries: Aerospace, Banking, Engineering and Construction, Media, Oil&Gases, Pharmaceutical, Retail, Telecommunications, Transportation, etc, Open Plan / MS Project for Project Management, MS Money for managing our finance.

  16. Risks and Difficulties includes: Errors (and difficulties) in data retrieval and analysis  Lack of documentation Proliferation of private systems  Lack of expertise and enforcement on acceptable standards and practices Building Information SystemsAlternative IS Development: (3) End User Development • End-user systems development are systems development project in which the primary effort is undertaken by some combination of businessmanagers and end-users - excluding professional computer developers. • Benefits includes: Lower Costs Users have better knowledge of business processes and needs Lead times on development may be shorter Relieves shortage of system development personnel User may have more control over system development and use

  17. Disadvantages: needs to be carefully monitored can be risky loss of control, over-reliant on vendor potential security threats Building Information SystemsAlternative IS Development: (4) Outsourcing • Outsourcing is the contracting with outside businesses or services to perform the work once done by in-house departments. • Advantages: Reduced costs sometimes fixed price service quality

  18. Building Information SystemsAlternative IS Development: (4) Outsourcing (cont.) There are good and sufficient reasons for selectively outsourcing: • The organization is incapableof attracting orretainingtalent for specialized technologies, especially for innovative uses. It is increasingly true in the public sector. • The budgeting and capital-investment process is spasmodic, short-term-oriented, and subject to reversals in top management's goals, objectives, and preferences. Increasingly, this characterizes much of the industry, as well as most of the public sector. • The learning curve for a new or risky technology is especially steep. Therefore, it pays to have an experienced firm introduce the technology at a much lower cost. • The organization is internally in turmoil and cannot manage IT because its managerial energies are concentrating on the survival of the firm. • The organization is very profitable but does not wish to devote scarce managerialresourcesto managing IT. This calls for inventing new forms of relationships that may not be arm's-length commercial contracts. • Additional reading materials for IS Development titled “Outsourcing: The Trend Today”

  19. System failure is evidenced by problems with design, data, cost, or operations. Principal cause of IS failure:(1) insufficient or improper user participation in system development process(2) lack of mgt support(3) high level of complexity and risk(4) poor project management Success - reversal of problems / failure factors Building Information SystemsIS Implementation - Success/Failure • Criteria to determine a system success/failure are: (1) high/low level of system used(2) user satisfaction(3) user attitudes (4) objectives achievement(5) financial payoff to the firm • A high percentage of systems are considered failures (aka white elephants) because they are not used in the way they are intended.

  20. Class Activity 1: Reading“Alignment of IS Plans with Business Plans”

  21. Class Activity 2: Reading“Outsourcing: The Trend Today”

  22. Class Activity 3ISM Assignment Two Discussion • Each assignment should be attached inside the standard assignment folder on which is included: • full name and address and student number; • name of unit; • assignment number; and • correct assignment sticker. • All pages of the assignment should have a margin of an adequate width – 3 cm (1 inch) all around. • Descriptive assignments should, where possible, be typewritten in double spacing to aid in assessment. • Please ensure that all pages are securely fastened together, numbered, and each page should have your name on it. All assignments should be forwarded to TCOL. • Due Date 21 May 2001, Weightage 25% of overall assessment.

  23. Class Activity 3ISM Assignment Two Discussion (cont.) Research Skills Revisit • The effective use of Index page for reference books such as “Management Information Systems: New Approaches to Organization & Technology”. • The use of Search Engines (see L2, Search Engine Tutorial). • Web Computing Dictionaries/Encyclopedias such as • http://www.techweb.com/encyclopedia/ • http://whatis.com/search/whatisquery.html • http://foldoc.doc.ic.ac.uk/foldoc/index.html • The effective of virtualgroupdiscussions via email / WWW.

  24. Class Activity 3ISM Assignment Two Discussion (cont.) It is important for a manager to sufficiently understand the technical aspects of information technology in order to manage IT professionals, provide an appropriate work environmentfor all staff and to appreciate opportunitiesforseniordecision makers in an organisation. Three areas of significiance are: 1. Telecommunications: Ensuring the organization can effectively communicate with its staff, suppliers, clients and partners and understand the options available and possible problems; 2. Database Management: Convincing decision makers about the benefits, requirement and challenges associated with a database management system; 3. Information Systems: Understanding why building a new system is a process oforganizationalchange and what challenges need to be managed and how, during development and implementation. Select one (1) of the above areas and provide a report covering the following: Section 1: Introduction and background defining the subject area and explaining its significance to your organization; Section 2: Outline of technical and theoretical aspects; Section 3: Challenges associated with ensuring its effectiveness; Section 4: Overview of options available to manage the challenges; Section 5: Recommendation and conclusion on future directions for your organization.

  25. End of Lecture Good Night.

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