Chapter 12 Developing Business IT Solutions Mc Graw-Hill Irwin Copyright

Learning Objectives • Use the systems development process outlined in this chapter and the model of IS components from Chapter 1 as problem-solving frameworks to help you propose information systems solutions to simple business problems • Describe and give examples to illustrate how you might use each of the steps of the information systems development cycle to develop and implement a business information system 12 -2

Learning Objectives • Explain how prototyping can be used as an effective technique to improve the process of systems development for end users and IS specialists • Understand the basics of project management and their importance to a successful system development effort • Identify the activities involved in the implementation of new information systems 12 -3

Learning Objectives • Compare and contrast the four basic system conversation strategies • Describe several evaluation factors that should be considered in evaluating the acquisition of hardware, software, and IS services 12 -4

IS Development • When the systems approach is applied to the development of an information systems solution to business problems, it is called information systems development or application development 12 -5

Case 1: Pay. Pal: Going Global All Languages at a Time • How do you global companies keep their consumer sites updated in the local language or localizing the content without spending a lot of time and money? • Pay. Pal addressed this challenge by redesigning their software to allow simultaneous refreshes for 15 locales ranging from France to Poland. • Because of this, Pay. Pal’s net total payment volume for the fourth quarter 2007 was $14 billion, which represent almost 12 percent of U. S. e-commerce, and almost 8 percent of global ecommerce. 12 -6

Case Study Questions 1. One of the challenges that Pay. Pal faces now that they have managed to overcome the polylingual obstacle is finding the best way to put this functionality in the hands of the business, so that they do not have to go through IT each time. How do you balance this need for responsiveness and flexibility versus IT’s need to keep some degree of control to make sure everything keeps working with everything else? Provide some recommendations to managers who find themselves in this situation. 2. Pay. Pal opted to deviate from industry standards and build their own custom technology that would better suit their needs. When is it a good idea for companies to take this alternative? What issues factor into that decision? Provide a discussion and some examples. 12 -7

Case Study Questions 3. Although the new system has been quite successful, Pay-Pal has chosen not to license this technology to others, forgoing a potentially important revenue stream given the lack of good solutions to this problem. Why do you think Pay. Pal chose not to sell this technology? Do you really think this can be made into a strategic advantage over their competitors? How easy would it be for their competitors to imitate this accomplishment? 12 -8

The Systems Approach • A problem solving technique that uses a systems orientation to define problems and opportunities and develop appropriate and feasible solutions • Analyzing a problem and formulating a solution involves these interrelated activities: – Recognize and define a problem or opportunity using systems thinking – Develop and evaluate alternative system solutions – Select the solution that best meets your requirements – Design the selected system solution – Implement and evaluate the success of the system 12 -9

What is Systems Thinking? • Seeing the forest and the trees in any situation – Seeing interrelationships among systems rather than linear cause-and-effect chains – Seeing processes of change among systems rather than discrete snapshots of change • See the system in any situation – Find the input, processing, output, feedback and control components 12 -10

Systems Thinking Example 12 -11

Systems Analysis and Design • SA&D is the overall process by which information systems are designed and implemented – Includes identification of business problems • Two most common approaches – Object-oriented analysis and design – Life cycle 12 -12

Systems Development Lifecycle (SDLC) 12 -13

Systems Development Process • Systems Investigation – The first step in the systems development process – May involve consideration of proposals generated by a business/IT planning process – Also includes the preliminary feasibility study of proposed information system solutions 12 -14

Systems Development Process • Feasibility Studies: a preliminary study to determine the – Information needs of prospective users – Resource requirements – Costs – Benefits – Feasibility • In some cases, a feasibility study is unnecessary 12 -15

Operational Feasibility • How well the proposed system will – Support the business priorities of the organization – Solve the identified problem – Fit with the existing organizational structure 12 -16

Economic Feasibility • An assessment of – Cost savings – Increased revenue – Decreased investment requirements – Increased profits – Cost/benefit analysis 12 -17

Technical Feasibility • Determine the following can meet the needs of a proposed system and can be acquired or developed in the required time – Hardware – Software – Network 12 -18

Human Factors Feasibility • Assess the acceptance level of – Employees – Customers – Suppliers – Management support • Determine the right people for the various new or revised roles 12 -19

Legal/Political Feasibility • Assess – Possible patent or copyright violations – Software licensing for developer side only – Governmental restrictions – Changes to existing reporting structure 12 -20

Systems Analysis • An in-depth study of end user information needs – It produces the functional requirements used as the basis for the design of an information system • It typically involves a detailed study of the – Information needs of a company and end users – Activities, resources, and products of one or more of the information systems currently being used – Information system capabilities required to meet the information needs of business stakeholders 12 -21

Organizational Analysis • Study of the organization, including… – Management structure – People – Business activities – Environmental systems – Current information systems • Input, processing, output, storage, and control 12 -22

Analysis of the Present System • Before designing a new system, it is important to study the system to be improved or replaced – Hardware and software – Network – People resources used to convert data resources into information products – System activities of input, processing, output, storage, and control 12 -23

Logical Analysis • A logical model is a blueprint of the current system – It displays what the current system does, without regard to how it does it – It allows an analyst to understand the processes, functions, and data associated with a system without getting bogged down with hardware and software 12 -24

Functional Requirements • This step of systems analysis is one of the most difficult – Determine what type of information each business activity requires – Try to determine the information processing capabilities required for each system activity – The goal is to identify what should be done, not how to do it 12 -25

Examples of Functional Requirements • User Interface: automatic entry of product data and easy-to-use data entry screens for Web customers • Processing: fast, automatic calculation of sales totals and shipping costs • Storage: fast retrieval and update of data from product, pricing, and customer databases • Control: signals for data entry errors and quick e -mail confirmation for customers 12 -26

Systems Design • Systems design focuses on three areas 12 -27

Prototyping • Prototyping is the rapid development and testing of working models – An interactive, iterative process used during the design phase – Makes development faster and easier, especially when end user requirements are hard to define – Has enlarged the role of business stakeholders 12 -28

Prototyping Life Cycle 12 -29

User Interface Design • Focuses on supporting the interactions between end users and their computerbased applications – Designers concentrate on the design of attractive and efficient forms of user input and output – Frequently a prototyping process – Produces detailed design specifications for information products, such as display screens 12 -30

Checklist for Corporate Websites • • Remember the customer Aesthetics Broadband content Easy to navigate Searchability Incompatibilities Registration forms Dead links 12 -31

System Specifications • Formalizing the design of – User interface methods and products – Database structures – Processing procedures – Control procedures 12 -32

Examples of System Specifications User interface specifications Use personalized screens that welcome repeat Web customers and that make product recommendations Database specifications Develop databases that use object/relational database management software to organize access to all customer and inventory data and to multimedia product information Software specifications Acquire an e-commerce software engine to process all e-commerce transactions with fast responses, i. e. , retrieve necessary product data and compute all sales amounts in less than one second Hardware and network specifications Install redundant networked Web servers and sufficient high-bandwidth telecommunications lines to host the company e-commerce website Personnel specifications Hire an e-commerce manager and specialists and a webmaster and Web designer to plan, develop, and manage e-commerce operations 12 -33

End User Development • IS professionals play a consulting role, while uses do their own application development – A staff of user consultants may be available to help with analysis, design, and installation • Other support – Application package training – Hardware and software advice – Help gaining access to organization databases 12 -34

Focus on IS Activities • End user development should focus on the fundamental activities of an information system – Input – Processing – Output – Storage – Control 12 -35

Focus of End User Development 12 -36

Doing End User Development • Application development capabilities built into software packages make it easier for end users to develop their own solutions 12 -37

Encouraging End User Web Development • Look for tools that make sense – Some are more powerful or costly than needed • Spur creativity – Consider a competition among departments • Set some limits – Limit what parts of a web page or site can be changed and who can do it • Give managers responsibility – Make them personally responsible for content 12 -38

Encouraging End User Web Development • Make users comfortable – Training will make users more confident – It can save the IT department the trouble of fixing problems later on – It can limit the need for continuous support 12 -39

Implementing New Systems • The systems implementation stage involves – Hardware and software acquisition – Software development – Testing of programs and procedures – Conversion of data resources – Conversion alternatives – Education/training of end users and specialists who will operate the new system 12 -40

Implementation Process 12 -41

Case 2: Queen’s Medical Center, National Public Radio, Worldspan, and Others • According to an annual survey by CIO Magazine, the demand for IT is increasing and the requests for IT projects are piling up. • The biggest challenge is that the budget to deal with today’s demand is not increasing. • For CIOs, managing this application backlog is the number-one barrier to their job effectiveness, regardless of industry or company size. • There are two types of backlog – backlog of desire (applications that users are yearning for) and a backlog of commitment (projects that are approved but not started). CIOs need to pay attention to both types of a backlogs. 12 -42

Case Study Questions 1. The case notes that a changing environment or business priorities can render an ongoing project obsolete even before it has been completed. What alternatives do CIOs who find themselves in this situation have with respect to dealing with the troubled project? Would you go ahead and finish it, or scrap it altogether? How would you justify either position? 2. Do you agree with the statement: “Application backlog is not a problem one solves, it’s a condition one lives with”? Why or why not? To the extent that it is true, how can IT executives manage things differently to make this situation more approachable? Provide some specific suggestions. 12 -43

Case Study Questions 3. Susan Powers at Worldspan says she addresses the backlog problem by positioning her IT organization as a resource that should be used and managed in the most effective manner, like any other a company may have. What do you think of this approach? Is IT really like any other resource? In which way is IT different than other areas of a company like marketing or finance? 12 -44

Project Management • The skills and knowledge necessary to be a good project manager will translate into virtually any project environment – The people who have acquired them are sought after by most organizations 12 -45

What is a Project? • Every project has – A set of activities with a clear beginning and end – Goals – Objectives – Tasks – Limitations or constraints – A series of steps or phases • Managing a project effectively requires – Process – Tools – Techniques 12 -46

Sample Implementation Process 12 -47

Phases of Project Management • There are five phases in most projects – Initiating/Defining – Planning – Executing – Controlling – Closing 12 -48

Initiating/Defining Phase • Example activities – State the problem(s) and/or goal(s) – Identify the objectives – Secure resources – Explore the costs/benefits in the feasibility study 12 -49

Planning Phase • Example activities – Identify and sequence activities – Identify the “critical path” – Estimate the time and resources needed for project completion – Write a detailed project plan 12 -50

Execution Phase • Example activities – Commit resources to specific tasks – Add additional resources and/or personnel if necessary – Initiate work on the project 12 -51

Controlling Phase • Example activities – Establish reporting obligations – Create reporting tools – Compare actual progress with baseline – Initiate control interventions, if necessary 12 -52

Closing Phase • Example activities – Install deliverables – Finalize all obligations and commitments – Meet with stakeholders – Release project resources – Document the project – Issue a final report 12 -53

Evaluating Hardware, Software, Services • Establish minimum physical and performance characteristics for all hardware and software – Formalize these requirements in an RFP/RFP • Send RFQ to appropriate vendors • Evaluate bids when received – – All claims must be demonstrated Obtain recommendations from other users Search independent sources for evaluations Benchmark test programs and test data 12 -54

Hardware Evaluation Factors • Major evaluation factors – – – – – Performance Cost Reliability Compatibility Technology Ergonomics Connectivity Scalability Software Support 12 -55

Software Evaluation Factors • Hardware evaluation factors apply to software, as do these – – – – Quality Efficiency Flexibility Security Connectivity Maintenance Documentation Hardware Software that is slow, hard to use, bug-filled, or poorly documented is not a good choice at any price 12 -56

Evaluating IS Services • Examples of IS services – Developing a company website – Installation or conversion of hardware/software – Employee training – Hardware maintenance – System design and/or integration – Contract programming – Consulting services 12 -57

IS Service Evaluation Factors • IS evaluation factors include – – – – Performance Systems development Maintenance Conversion Training Backup facilities and services Accessibility to sales and support • Business position and financial strength – Hardware selection and compatibility – Software packages offered 12 -58

Other Implementation Activities • The keys to successful implementation of a new business system – Testing – Data conversion – Documentation – Training 12 -59

System Testing • System testing may involve – Testing and debugging software – Testing website performance – Testing new hardware – Review of prototypes 12 -60

Data Conversion • Data conversion includes – Converting data elements from the old database to the new database – Correcting data errors – Filtering out unwanted data – Consolidating data from several databases – Organizing data into new data subsets • Improperly organized and formatted data is a major cause of implementation failures 12 -61

Documentation • User Documentation – Sample data entry screens, forms, reports – System operating instructions • Systems Documentation – Method of communication among those developing, implementing, and maintaining a computer-based system – Detailed record of the system design – Extremely important when diagnosing problems and making system changes 12 -62

Training • End users must be trained to operate a new business system or its implementation will fail – May involve only activities, such as data entry, or all aspects of system use – Managers and end users must understand how the new technology impacts business operations • System training should be supplemented with training related to – Hardware devices – Software packages 12 -63

Major System Conversion Strategies 12 -64

Direct Conversion • Direct conversion – The simplest conversion strategy – The most disruptive to the organization – Sometimes referred to as the slam dunk or cold-turkey strategy – May be the only viable solution in cases of emergency implementation or if the old and new system cannot coexist – Has the highest risk of failure – Involves turning off the old system and turning on the new one 12 -65

Parallel Conversion • Old and new systems are run simultaneously until everyone is satisfied that – The new system functions correctly – The old system is no longer needed • Conversion to new system can be single cutover or phased cutover • Has the lowest risk, but the highest cost – Can cost 4 times more than using the old system • Best choice where an automated system is replacing a manual one 12 -66

Pilot Conversion • Scenarios best suited to a pilot conversion – Multiple business locations – Geographically diverse locations • Advantages of single location conversion – Can select a location that best represents the conditions across the organization – Less risky in terms of loss of time or delays in processing – Can be evaluated and changed before further installations 12 -67

Phased Conversion • A phased or gradual conversion – Takes advantage of both the direct and parallel approaches – Minimizes the risks involved – Allows the new system to be brought online as logically ordered functional components • Disadvantages • Takes the most time – Created the most disruption to the organization over time 12 -68

Post-Implementation Activities • The single most costly activity – Correcting errors or faults in the system – Improving system performance – Adapting the system to changes in the operating or business environment – Requires more programmers than does application development – May exist for years 12 -69

Systems Maintenance • There are four basic categories of system maintenance – Corrective: fix bugs and logical errors – Adaptive: add new functionality – Perfective: improve performance – Preventive: reduce chances of failure 12 -70

Post-Implementation Review • Ensures that the newly implemented system meets the established business objectives – Errors must be corrected by the maintenance process – Includes a periodic review/audit of the system as well as continuous monitoring 12 -71

Case 3: Intuit Inc. : Customer-Driven Development • At Intuit, development of new product ideas are driven by a psychologist – Playing nice – Free-association sessions • Focus is always on the customer – – Making “pain points” less painful Capturing pencil-and-paper users Follow-me-homes Simplifying language 12 -72

Case Study Questions 1. Should Intuit’s “far-out thinking” and acceptance of failure as part of the application software development process be duplicated at large software development companies like Microsoft? – Should it be duplicated at the thousands of small independent software companies that exist? 12 -73

Case Study Questions 2. Which do you prefer? – Intuit’s customer-driven development process where hundreds of employees and managers are sent to consult with customer in their homes or places of business, or – Microsoft’s process of using professional anthropologists to do such research 12 -74

Case Study Questions 3. Intuit developed the wildly successful Quick. Books: Simple Start Edition, which eliminated all accounting jargon – Could this idea be the foundation of a new version of Intuit’s top-selling Turbo. Tax software, which removed all tax accounting jargon from that product to reach the 20 million Americans who do not use tax preparation software or a professional tax preparer? – Would such a product be possible or successful? 12 -75

Case 4: Hewlett-Packard: Managing Radical Change • HP is embarking on a makeover of its internal tech systems – Replacing 85 loosely connected data centers around the world with 6 cutting-edge facilities – Cutting thousands of smaller projects to focus on a few corporate-wide initiatives – Scrapping 784 databases for one data warehouse – Laying off thousands of IT workers – Building its own fiber-optic network to connect the six data centers 12 -76

Case Study Questions 1. Will the initiatives being undertaken by CIO Randy Mott to implement major changes to the IT function at HP make IT a more efficient and vital contributor to HP’s business success? – Defend your position on each of the major initiatives he is implementing 2. Do you approve of the change management job Mott is doing, including his meetings with HP employees throughout the world, and having “coffee talks” with them? 12 -77

Case Study Questions 3. Assume you have been hired as a management consultant or coach to CIO Mott – What are several suggestions you might give him to help him successfully implement his ambitious plans for IT changes at HP? 12 -78