Chapter 14 Managing IT Planning and Implementing Change

Chapter 14 Managing IT: Planning and Implementing Change

Chapter Objectives • How end user resistance to changes in business processes or IT can be minimized by end user involvement in the systems development and implementation process. • The factors that should be considered in evaluating the acquisition of hardware, software, and IS services. • The activities involved in the implementation of new information systems.

Planning for Business Change • Business planning is an important organizational process of team building, modeling, and consensus that analyzes and evaluates key elements of the business. • More specifically, it evaluates an organization’s internal and external environments, forecasts new developments, establishes an organization’s vision, goals, and objectives and develops strategies, tactics, and policies to realize them. • Effective IT planning is a key ingredient in achieving strategic business success with information systems.

IS Planning Information systems planning involves several planning activities: Strategic IS Planning - aligns investment in IT with a company’s business vision and strategic organizational goals. Tactical IS Planning - evaluates current and projected information needs of the organization, prioritizes IS development projects, and develops allocation plans for financial and technology resources. Operational IS Planning - develops plans such as annual operating budgets and individual IS project plans.

IS Planning Methodologies Business organizations utilize a variety of IS planning methodologies. These methodologies include: – Scenario approach – Use of strategic opportunities matrix – Critical success factors – Business systems planning – Business simulation and enterprise modeling through computer-aided planning software

Implementing Business/IS Change • Implementing business change includes managing the introduction and implementation of changes in business processes, organizational structures, job assignments, and work relationships resulting from reengineering projects, strategic business alliances, and the introduction of new technologies. • Companies often use change management programs to lower the risks and costs and maximize the benefits of such major changes in business and IT.

Evaluating Hardware, Software, and Services • A formal evaluation process reduces the possibility that a business will buy inadequate or unnecessary computer hardware or software. • When evaluating hardware, the business should investigate specific physical and performance characteristics for each hardware component to be acquired. These characteristics include performance, cost, reliability, availability, and compatibility to name a few. • Software evaluation should be conducted in a similar way, investigating many of the same characteristics. • Evaluation factors for IS services should focus on the quality of support services computer users may need.

Implementing IS Implementation activities are needed to transform a newly developed information system into a operational system for end users. Implementing a new system should include the following steps: • Acquisition - acquire necessary hardware and software resources • Software Development - develop necessary computer programs and make necessary modifications to software packages • Training - educate and train management, end users, etc. • Testing - test and make necessary corrections to programs, procedures, and hardware • Documentation - record detailed system specifications • Conversion - convert present system to new and/or improved system

Summary • A good planning process helps organizations learn about themselves, uses resources efficiently and effectively, and promotes organizational change and renewal. • Various IS planning activities and methodologies can be used to help businesses implement business/IT change. • A formal evaluation process reduces the chance that an organization will buy incorrect hardware, software, or IS services. • An effective implementation process transforms a new information system into an operational system for business end users.

Two Possible Exam Questions 1. Name and explain the three main planning activities involved in information systems planning. 2. What are major evaluation factors that a business should consider before acquiring proposed hardware, software, or IT services?

The Organizational Planning Process Analyze the Organization's Environment Forecast Internal and External Developments Team Building, Modeling and Consensus Establish Vision Mission Goals Objectives Evaluate Accomplishments and Resources Articulate the Organization's Plan Develop Implementation Methods and Controls Feedback

Vision Strategy Tactics Business Plan ISM 158 Competitive Options Roles, Roles and Relationships Redefine/Define Telecommunications as the Delivery Process Success Factor Profile

Values Beliefs Principles Mission Goals Vision C u l t u r e Strategies Tactics Objectives and Measurements Authority and Responsibility Business Plan

To carry out its work, the organization needs from a leader a clear statement of its vision and strategy. Max De. Pree Chairman of the Board Herman Miller, Inc.

The Way to Run a Business 1. The primary job of a CEO is the long term viability of the business. 2. Vision can be the key to business leadership. 3. Vision without action is poverty-stricken poetry. 4. Action without vision is stumbling in the dark.

Vision Questions 1. How important is it for a company to have a well understood vision? 2. Is there something unique about a visionary executive? 3. What factors influence the creation of a vision? 4. What are the logical time dimensions of a business vision? 5. What major challenges frequently accompany establishing a new vision within a company?

A Good Business Vision • This is what we agreed we want to be. • Look around. Are we there yet? • Are we even close? • What still needs to be done to get to where we want to be?

A Good Business Vision • What the company wants to be at some point in the future. • Motivates people as to what the company is trying to change. • Provides a continuing focus. • Provides a yardstick for measuring progress.

Vision Statement To be recognized as the best airline in the industry by our customers, employees and shareholders. Continental Airlines

Delta Vision for the Future Our vision is for Delta to be the worldwide airline of choice. We will provide our customers access to the world, and we will be an innovative, aggressive, ethical and successful competitor committed to profitability and superior customer service. Looking ahead, we will consider opportunities to expand through new routes and alliances.

Key to the Vision Process 1. Establish a clear vision of the future. 2. Provide a basis for sharing values and views (the vision). 3. Send a message regarding the importance of the vision process throughout the entire organization to gain consensus and momentum.

Change is a significant alteration or disruption in peoples’ expectation patterns. Like it or not, people are creatures of habit. We live in a world of change, yet we act on the basis of continuity.

Change: Continuity: Is unfamiliar Is familiar It disturbs us Provides safety and security We avoid it We often resist it We like to plan on the basis that present conditions will continue.

Human Aspects of Change • New skills are required. • Patterns of communication are altered. • Time spans between communications are decreased. • Points of influence, authority and control are redefined. • Roles, work relationships and reporting responsibilities are modified. • Data ownership shifts. • Privacy and security concerns increase. • New management techniques and organizational structures evolve.

Insanity is doing the same things over and over again, and expecting different results. Hillary Clinton

Change Management

Definition of Change Management Managing the process of implementing major changes in IT, business processes, organizational structures, and job assignments to reduce the risks and costs of change, and to optimize its benefits.

What Does Change Management Require? A commitment from top management and an organizational design to plan the future of IT and IS within the business. Change management involves analyzing and defining all changes facing the organization, and developing programs to reduce the risks and costs, and to maximize the benefits of change.

End User Resistance • New ways of doing things creates resistance among employees. • This is the biggest obstacle to the implementation of new information systems.

End User Implications Dealing with end user resistance: - Proper education and training. - Direct end user participation before implementation helps insure that the end users assume ownership of a system, and that its design meets their needs.

Reengineering a Business Process • Develop a change action plan. • Assign selected managers as change sponsors. • Develop employee change teams. • Encourage open communications and feedback about organizational changes.

Change Management Activities Human resource management handles: Activities - Such as developing innovative ways to measure, motivate, and reward performance. Program - Design a way to recruit and train employees in the core competencies required in a changing workplace.

Recommendations of Consultants • Involve as many people as possible in reengineering and other change programs. • Make constant change part of the culture. • Tell everyone as much as possible about everything as often as possible, preferably in person. • Make liberal use of financial incentives and recognition. • Work within the company culture, not around it.

Summary Fast paced change has frequently become essential for a business to remain efficient in its operations and/or to remain competitive. Change management has become fundamental to running a successful business.

Possible Exam Questions 1. Why is change management an important aspects to running a successful business? 2. Identify key factors that would enable an organization to successfully implement a major new information system.

Managing Organizational Change Executive Vision Change Management Organizational Design Organization Mission Measurement and Rewards Work Redesign Core Competencies Development

Change: An Important Management Issue Time compression: information and communications Turbulence: political and cultural Interdependence: one economic and social world Technology advances: rapid pace of product change and its impact on other areas. Business pressures: time to market, time to develop and manufacture and time to decisions.

A New Attitude? Change is natural and to be expected. Continuity is unnatural and to be suspected.

HP Change Management Program

How many of you would be interested in a business planning job?

Information Systems Planning Create Vision Determine Drivers Best Practices Assess Develop Strategies Business Vision Existing Capabilities Customer Needs Partners Needs Develop Tactics IT Architecture Strategic Opportunities Technology Platform Reengineer Specific Needs Design IT Architecture Data Resources Gap Assessment Long-Range Position Needs Business/IT Strategies Technology Implementation Plans Application Portfolio Investment Plans IT Organization Transformation Plans

Visioning Questions What is happening in our industry and related industries? What makes us special? What must be done to remain so? Who are our competitors and business partners? What type of organization and style of management do we want to have? What role should IT logically plan in our future?

Strategic Opportunities Matrix High Strategic Business Potential Low High Risk High Payoff Opportunities High Success High Payoff Opportunities High Risk Low Payoff Opportunities Safe, but Low Payoff Opportunities Low High

Critical Success Factors Key Areas in Which High Performance is Needed to Meet Goals Automotive Industry • Styling • Dealer System • Cost Control • Energy Standards Goals Earnings per Share Market Share Return on Investment New Product Success Other Factors

Information Systems Architecture

Information Systems Architecture is determining the needs of the user and then designing and building systems to meet those needs as effectively as possible within economic and technological constraints. Fred Brooks Author “Mythical Man-month”

IS Architecture 1. Involves explicit ways to depict what you are trying to accomplish so that multiple people can create around the same baseline. 2. A top down approach to systems design that minimizes risk by reducing erroneous assumptions. 3. Quality expectations also force a higher level representation.

What is IS Architecture? • • It is a conceptual design, or blueprint, basis for Business/IT strategies develop a that dictates how IT architecture the information systems will be designed and built. • Always remember that business strategies develop a • It is a conceptual design, or blueprint, that basis for the IS architecture. includes: – Technology platform IS architecture elements includes: – Data resources • Technology platform – Application portfolio • Data–resources IT organization • Application portfolio • The IS organization

Technology Platform • What sort of platform do you need to What sort of platform do youtechnology in a support the information need to support the business with information technology? business? • Computer system – Computer system • Systems and application software – Systems and application software • Telecommunications. Networks (to provide a computing – Telecommunications Networks (to provide a and communications infrastructure) computing and communications infrastructure)

Data Resources Different types of operational and • Different types of operational and specialized databases such as: – • Operational databases Data warehouses – • Data warehouses Analytical databases – • Analytical databases External data banks • provide data and store and. External databases information for business processes and managerial decision Provides data and information for business support. processes and managerial decision support.

Application Portfolio • A diverse portfolio of informationsystems that A diverse portfolio of information systems thatsupport key business functions as well as crosssupport key business functions as well functional business processes. as cross-functional business processes. – Interorganizational business linkages • End user computing and collaboration. – Managerial decision making • Managerial decision making. – End • Interorganizationalcollaboration user computing and business linkages. • Strategic initiatives for competitive advantage. – Strategic initiatives for competitive advantage

IT Organization The IT organization is based on: • Managerial philosophy. – Managerial philosophy • Business vision. – Business vision • Business/IT strategies that were formulated – Business/IT strategies that were formulated during the strategic planning process

IS Architecture Business Strategy Architecture I/S Strategy I/S Implementation Plan Open Systems Proprietary Systems Scope Structure

IS Architecture Requirements Vision and Strategies Physical System Functional Systems Technically Constrained Implementation Applications Operation

The U. S. Federal Aviation Administration: Failure in IS Planning “Developingaacohesive IT IT architecture to guide IT Developing cohesive architecture to guide multiple IT development projects is one of strategic development projects is one of the key products of IT planning. strategic IT planning. Without such an architecture, large IT development projects may produce massive “inconsistencies and Without such an architecture, large IT development projects incompatibilities” “inconsistencies and may produce massiveand poor performance in information systems designed to work together. ” incompatibilities” and poor performance in information systems designed to work together. ~By Author of the book James A. O’Brien Page 616 Textbook, Page 616

Possible Exam Questions • IT architecture? 1. Identify and describe the four factors that are included in IT architecture. 2. Why is it important to have a cohesive IT architecture? • Name and describe the four factors that are included in IT architecture.

IS Architecture Summary • Fulfills requirements specified by multiple clients. • Enables the design of a complex engineered system. • Enables consistent operational training.

IS Architecture Importance As technology enables powerful distributed systems in small packages to remote locations, some kind of structure is needed because without it you will have distributed chaos.

IS Architecture There is no single architectural representation to build complex engineered products. There are different ways to describe the same thing depending on a person’s position and responsibilities within an organization. Executives view things differently than programmers.

Important Questions Is it possible to build complex systems based only on functional specifications--what you want the system to accomplish? Do owners (managers), designers (systems analysts) and builders (software developers) have the same perspectives, motivations, constraints and semantics regarding information systems architecture?

Custom Built Products (Systems) • Minimal flexibility. • Long development lead times. • No interchangeable parts (data elements). • High maintenance costs. • A single product bears all of the development cost.

Architecture Objectives 1. Reduce erroneous assumptions. 2. Minimize risk. By systematically developing a way to design and build complex engineered systems.

Implementation The final step of the systems development process: the conversion to a live system doing real work within the company. The challenge is to accomplish this in the most efficient, least disruptive but cost-effective manner possible.

IS Implementation Process

Organizational Change “IT increasingly changes jobs, skill needs, and relationships. Technical change has become synonymous with organizational change. Such change can be complex, painful, and disruptive. The people side of IT is often more difficult to anticipate and manage smoothly than is the technological side. ” Peter Keen Author and IT Visionary

Obstacles in IS Implementation

Overcoming User Resistance • Involve as many people as possible in the process. • Make constant change part of the culture. • Tell everyone as much as possible about everything as much as possible, preferably in person. • Make liberal use of financial incentives and recognition. • Work within the company culture, not around it.

Implementation Process • • Acquisition Development Testing Documentation Training Conversion Maintenance

Implementation Activities • Possible Acquisition of Hardware, Software, and Services • Evaluation of these factors • Training • Testing • Documentation • Conversion

Acquisition Evaluate and acquire necessary hardware and software resources and information systems services. Screen vendor proposals. The firm can evaluate a companies product or service by submitting a RFP (request for proposal) or a RFQ (request for quotation). Typically, large firms will put the proposal through a formal evaluation process. This helps to reduce the possibility of buying unnecessary or inadequate computer hardware or software.

Evaluation Factors • Some hardware factors: performance, cost compatibility, connectivity, vendor support. • Some software factors: features/functions, language, integration compatibility, cost, documentation, other company successful use. • Some service factors: systems development, conversion, training, backup, accessibility.

Development Either deals with the internal development of application software or the acquisition of this software from vendors.

Testing • System testing involves testing hardware devices, testing and debugging computer programs, and testing information processing procedures. • An important part of testing is the production of prototypes of displays, reports, and other output. • It is important to involve end users in the testing stage to recognize errors, and to provide feedback.

Documentation • Developing good user documentation is an important part of the implementation process. • An example of documentation is a manual of operating procedures and sample data input and output. • Documentation is extremely important when solving problems or making changes, especially if the people who developed the system are no longer with the firm.

Training • IS personal must be certain that end users are trained to operate the new system or the implementation process will fail. • End users must be taught to operate the system and managers must be educated on how the new technology changes the business processes and authority and responsibilities of management.

Conversion • Conversion from the old system to the new system can be difficult and even painful. • Four major methods include: – Parallel conversion. – Phased conversion. – Pilot conversion. – Plunge or direct cutover. (cold turkey)

Major Forms of Conversion Parallel: both old and new systems are operated until IS team and management agrees to convert Pilot: one department or work site serves as a tester. Phased: only parts of the new system or only a few departments, offices, or plant locations at a time are converted Plunge: direct abandonment of old system and conversion to new system.

IS Review and Maintenance • Post-implementation review is a part of IS maintenance where the new system is evaluated to be certain that the newly implemented system meets the system objectives established for them. • Maintenance involves monitoring, evaluating, and modifying of existing information systems to make needed or necessary improvements.

Summary IS implementation involves acquisition, development, testing, documentation, training, implementation, and conversion activities that transform a newly designed information system into an actual system for end users.

Possible Exam Questions 1. What is the biggest challenge in IS implementation? What can be done to make implementation easier to deal with? 2. What factors could dictate a “cold turkey” implementation approach?

Implementation • It is necessary to thoroughly and systematically go through each activity to have a successful implementation. • Although each activity may be time consuming or costly in the short run, in the long run it should be beneficial. • After the implementation process, it is important for the company to keep up with systems maintenance; this includes the post-implementation review process.

Systems Integrators, ISPs, ASPs, etc.

An Industry Perspective For all of the reasons that we have discussed during this quarter, companies need and want IT-based solutions to their requirements and they want them quickly and economically. In addition to hardware and software vendors there an increasingly large number of companies that offer computerbased solutions in a number of different ways.

IT-based Solution Providers • Consultants • Systems Integrators * • Internet Service Providers * • Network Service Providers • Application Service Providers * * Will be specifically addressed in this presentation • Outsourcing Companies It is difficult, if not impossible, to make a clear distinction as to the difference between many of these companies.

Systems Integrator A company that on a contract basis will design and implement a system for another company. This could be a completely new system or an integration of existing systems. A typical description: A systems integrator and solutions provider specializing in full life cycle application development, testing, maintenance and project management utilizing relational and object technologies.

Systems Integrators 1. Have specific technical expertise and/or an industry focus. 2. Focus on a specific part of the US or are national and international operations. 3. This also indicates that there are small, medium and very large companies in this business.

EDS: One of the big guys!

IBM Global Services The world’s largest computer services company. Based on our classifications this operation can be called a consultant, a systems integrator, an application service provider and an outsourcer.

IBM Global Services Business Innovation Services: • Business Intelligence Services • Custom systems integration services • Customer relationship management (CRM) services • Digital branding and marketing • e-business strategy and design consulting • e-commerce services • Enterprise resource planning (ERP) services • Knowledge management services • Merger and acquisition services • Procurement services • Security and privacy services • Skills development services for e-business • Supply chain management services • Web application development

IBM Global Services Integrated Technology Services: • • • Business continuity and recovery services e-business infrastructure services Information technology consulting Infrastructure & systems management services IT consolidation services IT product training Midrange express services Networking & connectivity services Technical support services Total systems management services

IBM Global Services Strategic Outsourcing Services: • Application management services • Data center outsourcing services • Desktop outsourcing services • e-business hosting services • Network outsourcing services

Divisions of Large Corporations TASC, Inc. , a division of Litton Industries and a leading information systems integrator, announced today that it has formed an alliance with Eigner + Partner, a pioneer in the development of engineering software products, to jointly provide Product Data Management (PDM) solutions to the aerospace and defense industries in North America. The alliance offers customers in these industries access to Eigner+Partner's world-class e-Engineering software and Litton TASC's best-of-practice implementation services.

Government Services, Inc. A world-class telecommunications information systems integrator: • LAN/WAN implementation, management, and support services • Help Desk and Network Management services • Video Teleconferencing services • Software Engineering services • Supporting DISA and the nation's war-fighters with global network implementation, management, and consolidation services • Prime contractor for the much acclaimed ADTN 2000 service for 60, 000 customers throughout DOT

PTS A Regional Systems Integrator PTS is an Information Technology Service Provider with Certified Microsoft Engineers, Novell Engineers, and Cisco Certified Professionals, offering a wide range of consulting and technical services to our clients throughout Virginia.

Sema Group Won the contract to become Information Systems Integrator for the Olympic Games from 2002 to 2008. This success, achieved by its Spanish team positions Sema Group as a world-class leader in systems integration. It will also help the Group to establish a more global presence and to heighten brand awareness, a relatively new issue in the industry.

Application Service Provider Online Application Support An international provider of financial and practice management products and solutions develops one of the only ASP dedicated exclusively to the legal industry. ELF, currently used by more than half of the top 100 law firms in the United States, created a security-rich Web-based data center to help support legal applications and services via unprecedented single point access. The Web site, named Serengeti, offers a full range of solutions from the leading providers of legal software and services to help improve the handling of legal matters by leveraging the power of the Internet.

Application Service Provider Online Purchasing Services With giants such as Ariba Inc. and Commerce One Inc. dominating the high end of the E-procurement applications market, smaller vendors of online purchasing services are targeting small and midsize businesses and gambling on alternative business models.

ASP Aggregators Agiliti Inc. , in Minneapolis aggregates software packages from more than one vendor, providing single sign-on access and unified billing and administration tools. In addition to charging a per-seat monthly fee for the software, aggregators provide one-stop customer support and a variety of data integration and customization services. Most aggregators target small and midsize companies as their customer base.

Internet Service Provider

Internet Service Provider A logical definition of an ISP is that it provides basic Internet access, web hosting and related services and private networks for both data and voice. While they may provide some application support the primary focus is providing Internet access and support.

Summary One more time, this is an example of businesses with a need that has been addressed with a number of different business models that focus on IT services and support. There are differences between consultants, systems integrators, ISPs, ASPs and outsourcers. But, it is fairly common to find at least large companies that are doing some or all of these things.

Possible Exam Questions 1. What is a systems integrator and under what circumstances would a company feel that it is appropriate to use these services? 2. Contrast an ASP and a systems integrator with an outsource company in terms of the basic objective of each of these business models. .

Key Terms in Chapter 14 Applications Portfolio Change Management Computer-Aided Planning Computer Industry Conversion Methods Documentation End User Involvement End User Resistance Evaluation Factors Hardware Software IS Services External IS Services Information Systems Planning Strategic Tactical Operational Information Technology Architecture Organizational Planning Concepts Planning Methodologies Business System Planning Critical Success Factors Scenario Approach Strategic Opportunities System Testing Systems Maintenance