GIT: LIVING IN THE IT ERA : LECTURE 01

I. IT TRENDS
 The rise of information and communication technologies (ICT) – that is, computers, software,
telecommunications and the internet – and the large impact that these new technologies are having on the way
that society functions, have prompted many to claim that we have entered a new era

INDUSTRIAL REVOLUTIONS

 A period of development in the latter half of the 18th century --- change from one economy to another
 Involved technological, socioeconomic, and cultural aspects
 Occurs when technological change fundamentally transforms the way in which a society carries out the
production and distribution of goods
 Changes (innovations, inventions, product innovations, process innovations)

INVENTIONS INNOVATIONS
Discovery of new products and processes Commercialization and improvement of the
◦ Machines existing products.
◦ Telephone ◦ Assembly Lines
◦ Automobiles ◦ CD’s
◦ Television ◦ Flat Screen TV’s
◦ Computers ◦ Smartphones

 FIRST INDUSTRIAL REVOLUTION ( 1765 )

 Started in England during the late 18th century. Concentrated in Britain
 focused on textile manufacturing

Significant evolutions: Cort’s puddling; rolling process for making iron, Crompton’s mule for
spinning cotton, Watt steam engine
Products / Services – Vegetables, Coal, Iron, Discovery of chemicals
Transportation – Railroads, Basic farming
Production System – Manual Labor to mechanical
Communication - print

 SECOND INDUSTRIAL REVOLUTION ( 1870 )

Significant evolution: Development of electricity, Internal-combustion engine, Railway, Chemical industry
Products / Services – electricity, chemicals, petroleum, steel
Transportation – automobiles, aircrafts
Production System – machine-aided equipment
Communication – telephone, telegraph

 THIRD INDUSTRIAL REVOLUTION ( 1969 )

 Started with the development of transistors.
 Rise of electronics and digital technology.
Products / Services – Internet, rise of electronics, source of energy: nuclear power
Transportation
Production System - Automation
Communication

 Nowadays – FOURTH INDUSTRIAL REVOLUTION

II. IT AND PRODUCTIVITY (GPT)
General Purpose Technology - It is a technology of sufficiently wide application to be used in various parts of
the economy and whose impact is pervasive.
Main Characteristics
1. It must have a wide scope for improvement and elaboration
2. It must be applicable across a broad range of uses
3. It must have a potential use in a wide variety of products and processes
4. It must have strong complementarities with existing or potential new technologies.
Lipsey et al., 1998

PRODUCTIVITY
 The quality of producing something
 Measure of the efficiency of a person, machine, factory, system, etc., in converting inputs into useful
outputs
 Productivity: It is an indication of the efficiency of production or distribution.
Gross Domestic Product (GDP) - Total monetary or market value of all the finished goods and services produced
within a country's borders in a specific time period

Labor productivity can be measured as output produced per hour of labor.

Labor productivity / Workforce productivity

◦ Total Output / Total Input
◦ $80,000 worth of goods ; 1,500 hours ; 30 employees

Example Computation for Productivity

1. If a group of workers produces 10,000 units of output in one year, and 12,000 units the next year.
Calculate the percentage increase in productivity.

a. Calculate the percentage increase in productivity if the output expands from 12,000 in year 2 to
15,000 in year 3.

The Effect of Technology on Productivity

Example: Consider an automobile factory that is able to produce 10 cars per day using 100 hours of labor. If a
new invention permits same workers to produce 20 cars in the same amount of time, then their productivity
has been doubled

Division of Labor and Productivity

 division of labor - degree to which the various tasks involved in the production of a good or service are
divided among different workers.
 Productivity increases when the division of labor increases. Increases in productivity can be transmitted
throughout the economy for several reasons:
o Productivity – Income
o Productivity – Cost of Production

Reference: Information Technology: A New Era. The Open University. 2016.

 LECTURE 02
I. SUSTAINABILITY OF PRODUCTIVITY
 All economies fluctuate in a business cycle. For a few years, growth is quite rapid, output and incomes rise,
and unemployment falls. This is the ‘boom’. Then the cycle turns. Growth slows, and in a true recession the
total output of the economy falls. This is the down-turn of the cycle.
 The industry life cycle focuses on those economic mechanisms that cause firms to be born (to ‘enter’ an
industry), to grow, and to die (to ‘exit’ an industry).
THE INDUSTRY LIFE CYCLE
 The industry structure refers to the characteristics of an industry, such as the number of firms operating in it,
the distribution of power between them (whether some are very large and others very small, or whether they
are all very large), and the degree to which new firms find it easy to enter the industry).
 Mechanisms affecting industry structure include the dynamics of entry/exit, technological change and falling
prices.
Phases
1. A pre-market or hobbyist phase, in which the product is produced more as a hobby or luxury than for
commercial purposes.
2. An introductory phase, in which the product begins to be produced more for commercial purposes than for
hobby reasons.
3. A growth phase, in which the industry grows rapidly due to the emergence of a standardized product.
4. A mature phase, in which demand slackens and fewer technological opportunities are available.

PRICES AND INDUSTRIAL CHANGE

 How can we look at price changes over time in industries in which the product undergoes many changes,
especially in early stages?
 We use the concept of the price index. Indices are used a lot in economics. They are basically a simple way
of measuring change.
 Price index - measure of the average level of prices for some specified set of goods and services, relative to
the prices of a specified base period.
 The most widely used method of constructing an index is based on the notion of the percentage.
Example:
Suppose that the price of a product is Php 500 in 2000 and Php 750 in 2001 and Php 1000 in 2002.
In this simple example, our market basket consists of only one product. Selecting year 2000 as the base year,
we can express the prices in years 2001 and 2002 relative to the price in year 2000 as follows:
The price in year 2000 (base year) is equal to 100 per cent
Price index, year 2001 = (Php750 / Php500 )* 100 = 150
Price index, year 2002 = (Php1000 / Php 500) * 100 = 200

Importance
Benefits

CHANGES IN INDUSTRY STRUCTURE

 Industry structure refers mainly to the way in which power is distributed among firms. This can be
described by factors such as the number of firms in the industry and the distribution of market shares
II. GAME CHANGING TECHNOLOGIES

1. ADVANCED INDUSTRIAL ROBOTICS (AIR)

 Involves machines which are designed to perform industrial tasks automatically, with high
programmability and the capacity to interact with their environment thanks to the use of digital sensors

2. ADDITIVE MANUFACTURING (AM)

  Involving digitally controlled devices to add layer on layer of material(s) to create objects from 3D digital
models

3. INDUSTRIAL INTERNET OF THINGS (IIOT)

 the use of connected sensors attached to different objects throughout the production process to feed live
data to central computers

4. ELECTRIC VEHICLES (EV)

 vehicles whose main system of propulsion depends on (externally generated) electricity rather than fuel

5. INDUSTRIAL BIOTECH (IB)

 the use of biological processes of living organisms for industrial purposes, drawing on recent scientific
insights such as systems genomics and metabolomics.

* AIR, AM, IIOT – involve innovations in the manufacturing production process

-- have a very wide applicability across most manufacturing sectors
* EV, IB – concern innovations of specific products (and related processes)
-- have a more narrow applicability to particular sectors

 EFFECTS OF GAME CHANGING TECH

1. Increasing centrality of (digital) information – information as a key source value
2. Mass Customization – flexible production process with interconnecting objects
3. Servitisation – technologies involve the gradual replacement of manufacturing as traditionally understood by
a type of economic activity that is closer to the traditional concept of services
4. Increased Labor/Resource Efficiency – more efficient use of materials and energy in production

 EFFECTS ON WORK AND EMPLOYMENT

1. Upgrading of occupations
2. Higher level of ICT competence
3. Decline of repetitive and routine industrial work
• Digital factories

III. THE PLATFORM ECONOMY

PLATFORM-BASED ECONOMY
PLATFORM
 business that connects people through technology, making an ecosystem that allows value to be created
and exchanged. This works by matching users to each other in order to make financial or social
transactions that create value.
 Don’t own the resources that create value, they can grow much faster than pipeline businesses.

Key features of a platform:

o Using sophisticated logistics software for
matching and payment.
o Providers on the platforms are independent
contractors.
o Very low barriers to entry for providers on
most platforms.
o Trust is achieved via crowdsourcing of ratings
and reputational data.\
 LECTURE 03
Chapter Objectives
Discuss the impact of information technology on business strategy and success
Define an information system and its components
Explain how profiles and models can represent business functions and operations
Explain how the Internet has affected business strategies and relationships
Identify various types of information systems and explain who uses them

I. SYSTEMS ANALYSIS AND DESIGN

 Companies use information as a weapon in the battle to increase productivity, deliver quality
products and services, maintain customer loyalty, and make sound decisions

 Information technology can mean the difference between success and failure

 Information technology (IT) is the application of a combination of hardware and software used to
retrieve, store, transmit and manipulate data, often in the context of a business or other
enterprise

DATA VS. INFORMATION

 Data are facts that are recorded and stored
 Information is processed data used in decision making

VALUE OF INFORMATION - the benefit produced by the information minus the cost of producing it.

SYSTEM - A set of two or more interrelated components interacting to achieve a goal

INFORMATION SYSTEMS - Set of interrelated components

- Collect, process, store, and distribute information
- Support decision making, coordination, and control
- Help analyze problems, visualize complex subjects and create new products

Information System Components

Hardware – tangible aspect of a computer system
Software – programs and other operating information used by a computer (systems,
application, enterprise, horizontal system, vertical systems, legacy systems)
Data
Processes
People

Traditional Modern
◦ In-house applications ◦ Internet-based
◦ Software packages ◦ Outsourced
◦ Custom
◦ Enterprise-wide

Systems Analysis and Design

  Systems Analysis and Design – a step-by-step process for developing high-quality information
systems
 Systems Analyst – plan, develop, and maintain information systems

BUSINESS AND INFORMATION SYSTEMS

With the different technological advancements, businesses have adopted newer processes and
have upgraded their business models
◦ Brick-and-mortar
◦ Click-and-mortar
◦ Click
The Internet has drastically reduced the intermediaries within a transaction (B2C, B2B, …)

According to support provided

Examples of Information Systems according to support provided

◦ Inventory Control (TPS)
◦ Reservations (TPS, MIS)
◦ Customer Order Processing / Point-of-Sale (TPS)
◦ Warranty Claim Processing (TPS)
◦ Records Management (MIS)
◦ Enrollment (DSS)
◦ Attendance Monitoring (MIS)
◦ Payroll (TPS)
◦ Queuing (TPS)

INFORMATION NEEDED

 Top managers
- Strategic plans

 Middle Managers and Knowledge Workers

 - Middle managers provide direction, necessary resources, and performance feedback to
supervisors and team leaders
- Knowledge workers include professional staff members such as systems analysts,
programmers, accountants, researchers, etc.

 Supervisors and Team Leaders

- Oversee operational employees and carry out day-to-day functions

 Operational Employees

Role in the Project Proposal

System Analyst
 A systems analyst investigates, analyzes, designs, develops, installs, evaluates, and maintains a
company’s information systems
 On large projects, the analyst works as a member of an IT department team
 Smaller companies often use consultants to perform the work

II. SYSTEM DEVELOPMENT

 System development is the process of defining, designing, testing and implementing a software
application.
 A system development project includes a number of different phases, such as feasibility analysis,
requirements analysis, software design, software coding, testing and debugging, installation and
maintenance.

System Development Methods

- Systems Development Life Cycle (SDLC)

- Predictive Approach

- Use of Process Models

- Process-centered technique

SYSTEM DEVELOPMENT LIFE CYCLE

1. Planning – Initial stage, conduct preliminary
investigation
2. Analysis – assess the requirements needed and
provide documentation
3. Design – identify all inputs, processes, and outputs
4. Implementation – proposed system is constructed,
all entities have their own functions
5. Maintenance – verification of the implementation of
proposed system

Prototyping
 Process of building a model for a system
 Speeds up the development process significantly
Roles Defined
1. System Analyst
 Responsibilities – Translate business requirements into practical IT projects to meet needs
 Required Skills and Background – Solid communication skills and analytic ability

2. Information Technology Department

 The information technology (IT) department develops and maintains a company’s
information systems
 The IT group provides technical support

◦ Application Development - Team may include users, managers and IT Staff members
◦ Systems Support and Security - Deployment team
◦ User Support - Help desk or information center (IC)
◦ Database Administration - Database design, management, security, backup, and user access
◦ Network Administration - Includes hardware and software maintenance, support, and security
◦ Web Support - Webmasters

IMPORTANCE OF PROJECT MANAGEMENT

 Regardless of the development strategy, people, tasks, timetables, and expenses must be
managed effectively
 Complex projects can involve dozens of people, hundreds of tasks, and many thousands, millions of
money
SYSTEMS DEVELOPMENT GUIDELINES
 Stick to a plan
 Involve the users throughout the development process
 Listening is very important
 Use project management tools to identify tasks and milestones
 Remain flexible
 Develop accurate cost and benefit information

Reference: Rosenblatt, H. Systems Analysis and Design: Tenth Edition. Course Technology, Cengage
Learning. 2014. ISBN-13:978-285-17134-0
 LECTURE 04
Chapter Objectives
Explain the concept of a business case and how a business case affects an IT project
Describe the strategic planning process and why it is important to the IT team
Explain the purpose of a mission statement
Describe the SDLC, and explain how it serves as a framework for systems development and business modeling
Describe risks and risk management features
List the reasons for information systems projects and the factors that affect such projects
Explain the initial review of systems requests and the role of the systems review committee
Define operational feasibility, technical feasibility, economic feasibility, and schedule feasibility
Describe the steps in a preliminary investigation and the end product of an investigation

I . Systems Development Life Cycle (Planning)

System Development Life Cycle
PLANNING
 Initial stage in the systems development life cycle (SDLC )
 Preliminary investigations which includes a feasibility study
 Learn how IT projects get started, how systems analysts evaluate proposed project and
 Determine the feasibility of a project, the reasoning behind the proposed system development = business case

II . PRELIMINARY INVESTIGATION
An inquiry to determine whether there is sufficient evidences for a system to be proposed
• Company Selection – an existing company
• Problem Assessment – do the problems post great loss and missed opportunities for the company?
• SWOT Analysis – would the proposed solution benefit the entire company? Its users? Internal? External?
Will this give rise to the strengths and eliminate the weaknesses of the company?
• Problem Assessment – do the problems post great loss and missed opportunities for the company? What are
the critical business issues?
• Main Reasons for Systems Proposals/Projects
 Systems request
 Improved services
 Support for new products and services
 Better performance
 More information
 Reduced cost
 Stronger controls (encryption, biometrics)
• SWOT Analysis – would the proposed solution benefit the entire
company? Its users? Internal? External? Will this give rise to the strengths
and eliminate the weaknesses of the company? Success factors? Case for
action?
• Factors that affect Systems Proposal/ Projects
 Internal factors (strategic plans, higher management, client
satisfaction, existing systems and processes)
 External factors (customers, competition, regulatory agencies,
technology, environment, suppliers)
  Company Assessment – research on facts
regarding the entire company and their nature
 Mission Statement
 Vision
 Goals
 Objectives
 Stakeholders
 Organizational Hierarchy
 Business Rules
 Business Processes

• Determine the feasibility of building a case for the selected company based on several preliminary
investigations
• Look into the future: how could the company survive or continue its operations without the proposed system?
• New industries, products, and services emerging from amazing advances in information technology,
customers who expect world-class IT support, a surge in Internet-based commerce, and a global business
environment that is dynamic and incredibly challenging
• Upon close examination and investigation, a business case should be developed
• The business case should be comprehensive, yet easy to understand
• it should describe the project clearly, provide the justification to proceed, and estimate the project’s financial
impact

III. FEASIBILITY
FEASIBILITY ANALYSIS - The process of confirming that a strategy, plan or design is possible and makes
sense. This can be used to validate assumptions, constraints,
decisions, approaches and business cases.
FEASIBILITY
 Describes how easy or difficult it is to do something
 Taking into consideration relevant factors for the
implementation of the project proposal
 Types of feasibility
 Schedule (time)
 Operational (business)
 Technical (technology)
 Economic (monetary)

1. SCHEDULE FEASIBILITY
 The probability of a project to be completed within its
scheduled time limits
 If a project has a high probability to be completed on-time,
then its schedule feasibility is appraised as high
 May include the following methods or measurements:
 Project Estimation
 Gantt and PERT Chart
 CPM (Critical Path Method)
 Change Management

 Gantt Chart
2. OPERATIONAL FEASIBILITY
 Gain an understanding of whether the proposed system will likely solve the business problems, or
take advantage of the opportunities or not
 Assess the following areas:
 Project Size – number of users
 IPO – inputs, processes, outputs
 Management support
 Environment assessment – are the users going to change

3. TECHNICAL FEASIBILITY
 refers to technical resources needed to develop, purchase, install, or operate the system
 Includes evaluating the ability of computer hardware and software to handle workloads adequately.
 List all the specifications of all hardware and software currently in use by the company and
the proposed ones as well

4. ECONOMIC FEASIBILITY
 Method for evaluating the effectiveness of a new system
 Procedure is to determine the benefits and savings that are expected from a candidate system and
compare them with costs
 Compute for the total costs incurred affected by the current system (hardware, software, utilities,
overhead, operating costs, …) and compare with the costs incurred affected by the proposed system
 Indicate proper sources of monetary values
 Calculate for the Payback Period (pp) and the Return on Investment (roi)

RETURN ON INVESTMENT (ROI)

= ( Net Profit / Total Investment ) * 100%
◦ Net profit should be determined through communication with the company (Estimated sales/revenue –
Operating Cost)
◦ Total Investment should be determined through the economic feasibility provided in the previous
section
You are a house flipper. You purchased a house at the courthouse auction for $75,000
and spent $35,000 in renovations. After sales, expenses, and commission, you netted
$160,000 on the sale of the renovated house. What is the ROI?

PAYBACK PERIOD (PP)

= determines the amount of time required for an investment to generate sufficient cash flows to recover initial
cost
Averaging method: ABC International expends $100,000 for a new machine, with all funds paid out when the machine is
acquired. Over each of the next five years, the machine is expected to require $10,000 of annual maintenance costs, and
will generate $50,000 of payments from customers. The net annual positive cash flows are therefore expected to be
$40,000. When the $100,000 initial cash payment is divided by the $40,000 annual cash inflow, the result is a payback
period of 2.5 years.
Subtraction method: Take the same scenario, except that the $200,000 of total positive cash flows are spread out as
follows:

Year 1 = $0; Year 2 = $20,000; Year 3 = $30,000; Year 4 = $50,000; Year 5 = $100,000

In this case, we must subtract the expected cash inflows from the $100,000 initial expenditure for the first four years
before completing the payback interval, because cash flows are delayed to such a large extent.

Thus, the averaging method reveals a payback of 2.5 years, while the subtraction method shows a payback of 4.0 years.
  Benefits (tangible or intangible)
 Tangible – measured in monetary terms or in tangible assets (reduced costs, assets not spent on)
 Intangible – have significant impact on the company (time saved, productivity, efficiency, data
accuracy)

EVALUATING FEASIBILITY
 Projects where management has a choice in implementing them are called discretionary projects
 Projects where no choice exists are called nondiscretionary projects
 Identify and weed out systems requests that are not feasible
 Even if the request is feasible, it might not be necessary
 Feasibility analysis is an ongoing task that must be performed throughout the systems development process

IV. INITIAL STUDY

Initial Study Overview
1. Understand the Problem or Opportunity
 Ishikawa Diagram
 Pareto Chart

2. Define the Project Scope and Constraints

 Project Scope
 Project Creep
 Constraints
 Present versus future
 Internal versus External
 Mandatory versus Desirable

3. Perform Fact-Finding
 Analyze company’s processes and operations
 Conduct Interviews
 Determine the people to interview
 Establish objectives for the interview
 Develop interview questions
 Prepare for the interview
 Conduct the interview
 Document the interview
 Evaluate the interview
 Review documentation
 Observe
 Survey

4. Evaluate Feasibility
 Evaluate based on the evaluation analysis provided in the previous section

5. Estimate Project Development Time and Cost

 What information must you obtain, and how will you gather and analyze the information?
 What sources of information will you use, and what difficulties will you encounter in obtaining
information?
 Will you conduct interviews? How many people will you interview, and how much time will you
need to meet with the people and summarize their responses?
  Will you conduct a survey? Who will be involved? How much time will it take people to complete it?
How much time will it take to prepare it and tabulate the results?
 How much will it cost to analyze the information gathered and to prepare a report with findings and
recommendations?
 You should provide an estimate for the overall project, so managers can understand the full cost
impact and timetable

6. Present Results and Recommendations to the Management

 The final task in the preliminary investigation is to prepare a report to management
 The format of the preliminary investigation report varies from one company to another
 Follow the guidelines provided

Chapter Summary
 Systems planning is the first phase of the systems development life cycle
 Effective information systems help an organization support its business process, carry out its mission, and
serve its stakeholders
 Strategic planning allows a company to examine its purpose, vision, and values and develops a mission
statement, which leads to goals, objectives, day-to-day operations, and business results that affect company
stakeholders
 Systems projects are initiated to improve performance, provide more information, reduce costs, strengthen
controls, or provide better service

 Various internal and external factors affect systems projects

 During the preliminary investigation, the analyst evaluates the systems request and determines whether the
project is from an operation, technical, economic, and schedule standpoint

 Analysts evaluate systems requests on the basis of their expected costs and benefits, both tangible and
intangible
 The steps in the preliminary investigation are to understand the problem or opportunity; define the project
scope and constraints; perform fact-finding; estimate the project’s benefits; estimate project development time
and cost; and present results and recommendations to management
 The report must include an estimate of time, staffing requirements, costs, benefits, and expected results for the
next phase of the SDLC