Management Information Systems

The MIS Function and Information Systems Planning
Jerry Fjermestad Copyright 1998-1999
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The MIS Function and Information Systems Planning
Organization of the MIS Function  MIS Specialists  Establishing Organizational MIS Requirements  Evaluating the Relative Worth of MIS Applications  Linking Business and systems planning 

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The MIS Function and Information Systems Planning
Cost-Benefit Analysis  Methods of Acquiring IS  The MIS Development Process  Agents Involved in an MIS Project  Who Initiates A Project? 

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Organization of the MIS Function 

MIS is responsible for providing and coordinating computer-base information services:
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developing operating maintaining facilitating the acquisition adaptation of software & hardware
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Organization of the MIS Function
A distributed MIS organization FIGURE 17.1  Corporate MIS: 

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Responsible for: infrastructure- telecommunications networks, corporate data center corporate STANDARDS interacting with vendors to gain discounts & for scanning
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Establishing Organizational MIS Requirements 

To be effective competitor:
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a vision a model a framework

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Establishing Organizational MIS Requirements 

A. Contents of an MIS Master Plan
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First MIS is a major corporate asset 
provides benefits  uses

resources- Money

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The planning process provides support for business objects the planning process allocates resources based upon priorities in THEORY the MIS plan should be aligned with the Corporate business strategy
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Establishing Organizational MIS Requirements 

A. Contents of an MIS Master Plan (con¶t)
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A long term Plan Coordination of MIS Plan with business plans 
Content  Timing  Personnel

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Establishing Organizational MIS Requirements
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A linkage between MIS & Business Plans has: 
the

corporate business plan states the informational needs  the MIS plan refers to the requirements of the business plan  the MIS plan is checked against the business plan  non-MIS managers participate in the MIS planning process  MIS managers participate in the business planning process  Corporate and MIS calendars are in sink with each other

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Establishing Organizational MIS Requirements
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The MIS plan is reviewed periodically The conceptual contents o the plan

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Establishing Organizational MIS Requirements 

B. Derivation of the MIS Requirements
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Derived directly from the business plan

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Establishing Organizational MIS Requirements 

C. The Strategic Cube the cube provides a framework
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basic questions: Will it face increasing customer power? Are there fewer customer who are larger? Is the firm to pursue a differentiating strategy? Does the firm have a track record for innovation?
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The Strategic Cube
COMPETITIVE FORCES TO CONTEND WITH
Customer Power Supplier Power Present Competitors Potential Competitors Substitute Products Strategic Alliance Merger or Acquisition Internal Growth Internal Innovation TACTICS

STRATEGIES
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Establishing Organizational MIS Requirements 

D. Strategy Set Transformations
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1. Identify the organizational stakeholder 
customers  employees  suppliers

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2. Develop goals, strategies, objectives to fit each group of stakeholder

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Establishing Organizational MIS Requirements 

D. Strategy Set Transformations (con¶t)
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3. Determine the needed informational requirements for the strategies 
Example

from text:  Stakeholder: Customer  Strategy: improve service  Innovation: Confirm orders within one hour

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Establishing Organizational MIS Requirements 

E. Approaches to Planning
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1. Overview: There are several different approaches to systems planning 
Some

look at assimilation of IT in organizations  Some focus on defining informational needs  Some discuss categorizing applications

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Establishing Organizational MIS Requirements 

E. Approaches to Planning (con¶t)
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2. The basic set of approaches: 
Business

Systems Planning (BSP)  Critical Success Factors (CSF)  Investment strategy analysis  Scenario approach  Linkage analysis planning  Creative problem solving  Enterprise Analysis  The Architecture approach  The crystal Ball Approach

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17.3 Establishing Organizational MIS Requirements 

BSP developed by IBM
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Philosophy: Data is a corporate resource (Enterprise data) Goal: discover a stable information architecture that supports all processes of the business. Objective: to assure the data necessary to support the business plan are available and that a stable information system architecture is developed.
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Key Components of IS Planning with BSP
Crucial Steps Defining Business Processes Defining Business Data Defining Info. Sys. Architecture

Analyzing Current Systems Support

Interviewing Executives

Defining Findings and Conclusions

Determining Architecture Priorities

Reviewing Info. Res. Management

Developing Recommendations

Reporting Results

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Establishing Organizational MIS Requirements 

BSP (con¶t)
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1. Defining the business process 
identify the

activities  identify the decisions  identify the systems, processes, flows
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2. Defining Business data 
classes

of data (customers, employees, places, objects)  determine data usage  Example: Inventory record- SKU, Name, quantity on hand, lead time

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Establishing Organizational MIS Requirements 

BSP (con¶t)
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3. Define information architecture 
Creating processes  Using

processes

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17.3 Establishing Organizational MIS Requirements 

Critical Success Factors (Rockart, 1979)
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A method for defining executive information needs. They are key areas or activities that must work right in order for the organization to be successful. They are time dependent and therefore must be measured .

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CSF Methodology for Establishing Organizational IS Requirements
Obtain CSFs of Manager A Obtain CSFs of Manager B Combine Individual CSFs into Organizational CSFs Derive Informational Requirements to Support CSFs Use CSFs to Redesign the Organization and Use Informational Requirements to Plan IS Obtain CSFs of Manager C

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Establishing Organizational MIS Requirements
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1. Sources for the CSF's 
industry:  the

company  the environment
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social legal technological economic political 

Temporal:

areas of the organization which do not normally need concern, but are currently unacceptable (The open can of worms).

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Planning, Dev., & Operation of Info. Sys.
Responsibility of Determination of Long-Term Information ‡ Chief Info. Off. (CIO) ‡ Strategic ‡ Corp. and IS Planners Requirements of the Organization Planning ‡ IS Steering Comm. ‡ IS Steering Comm. ‡ Tactical and Identification of Projects and Operational ‡ IS Mgr. and Planners Setting of Priorities Planning ‡ in Collaboration with ... ‡ User Mgmt. System Analysis System Analysis ‡ Systems System Design Development Projects Programming Installation ‡ Systems Maintenance Projects ‡ Systems Termination Projects System Operation and Maintenance System Termination System Design Programming Installation ‡ Operations Personnel System Operation and End Users and Maintenance ‡ Mainteanance Teams System Termination ‡ IS Personnel and End Users
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Tasks

‡ Project Teams (Development Teams), with User Participants as Appropriate

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Other Methods 

Investment Strategy Analysis
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A strategy based upon portfolio planning and investment analysis. Four major types of systems for the 1990's 
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Institutional procedures- the processing of internal transactions, as represented by many of today's mainline systems  2. Professional support system- engineering support (CAD) Managerial decision-making support (DSS, GSS)  3. Physical automation

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Other Methods
Systems that serve users outside the company, i.e. customers and suppliers. EDI, Voice mail, 800 numbers, Fax  5. Basic infrastructure 
4.
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telecommunications networking data base office automation & DSS

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Other Methods 
Alpha
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Company

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1. Renovate existing manufacturing systems around data base technology 2. Invest heavily in increasing the productivity of engineers 3. Foster innovation among the professional staff 4. Invest heavily in CAD/CAM 

Beta
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Company

1. Create new systems only when old ones fail 2. BE A FOLLOWER 3. Invest only when IT has a bottom line impact

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Other Methods 

Scenario Planning (WHAT IF)
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The scenarios help identify problems and manage assumptions. They also provide flexibility in the plans and a means of escape if necessary.

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Other Methods
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1. Elements of a scenario 
the
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business environment
the effects of deregulation shifting towards a service economy ; away from MASS production Mergers and acquisitions increased foreign competition National budget deficits Interest rates (not in 1992) Changes in the strength of the US dollar unemployment corporate down sizing
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Other Methods 
Government &
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society

information accuracy privacy (see Scientific American August, 1992) access to information property rights people changes ROI speed of change quick obsolescence
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Financial considerations
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TECHNOLOGY
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Other Methods
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2. Creating Scenarios 
a.  b.

deterministic : spreadsheet what if analysis
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Lotus 123

Cross-impact analysis: a model of major events and trends. Data can come from Delphi studies.

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Other methods 

Creative problem Solving
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Couger's Method; a 1992 Working paper the 5 phases 
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fact finding  2. problem finding  3. idea finding  4. solution finding  5. acceptance finding

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Other Methods 

Creative problem Solving (con¶t)
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divergence-convergence activities recursiveness (iterative) and non-linearity using creativity techniques in each phase 
EBS  alternative selection

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Other Methods 

The Architecture Building Approach
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The blue print for the information technology infrastructure. 1. support communications flows 
the

flow of formal authority - financial consolidations of profit and loss centers via a computer  flows of regulated activities- online banking systems
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informal communication flows- E-mail, voice mail work constellations- expert systems 

ad

hoc decision processes- document retrieval

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Other Methods 

The Architecture Building Approach (con¶t)
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2. help people communicate 
provide different

types of views of the same thing

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3. support organizational decision making 
help

executives rethink how the business should be what kind of structure is needed ?

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Establishing Organizational MIS Requirements 

SUMMARY
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Successful strategy has two main ingredients: 
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Look to the future  2. link system plans to business plans

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Establishing Organizational MIS Requirements 

SUMMARY
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The 3 Stages of developing a plan: 
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Understand the business
use a model or framework to help USE THE RIGHT MODEL OR FRAMEWORK

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Identify the firms INFORMATION needs  3. Rank the opportunities presented by information technology in terms of their relative importance and the relative VALUE added to the business. 
2.

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Evaluating the Relative Worth of MIS Applications
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strategic: IS activities critical to the current competitive strategy and to future strategic decisions. IS applications are part of new strategic direction Factory: IS applications are vital to the successful functioning of well-defined, well accepted activities. Not part of future strategic operations

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Evaluating the Relative Worth of MIS Applications
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Support: IS applications are useful in supporting activities. not vital to critical operations and not included as part of future strategic direction. Turnaround: IS in transition- from support to strategic. Vital to strategic success.

How does this relate to the Daft Weick Model?  What about Uncertainty/Equivocality? 

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Linking Business and systems planning
Using Steering Committees  1. Can consist of 

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upper management from all divisions and functions Department management from all divisions and functions Technical management from all divisions and functions IS, IE, Eng
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Linking Business and systems planning 

2. There job is to:
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"steer" direct, push, pull, etc. the Organization investments in the direction that benefits the company the most; the STRATEGIC direction. Information scanning 

3. How do they do that?
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Linking Business and systems planning 

4. Advantages of steering committees from Drury (1984)
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1. Increases the attention of top management to computing 2. Users become more involved with the system 3. The system departments are more aware of user needs 4. There is better long range planning for IS
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Linking Business and systems planning 

Other approaches
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IS mgrs. and analysts User-group Multi-department, IS, executive mgmt Combination

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Cost-Benefit Analysis
A technique for estimating the payoff to be expected from an information system.  A. Cost benefit Analysis 

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a quantitative support $ Table 17.6 p 693

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Cost-Benefit Analysis 

B. Basic Stages of Cost benefit analysis
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Identification of costs 
fixed

costs  operational costs (variable costs)
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Identify Benefits 
Tangible $  cost

savings  Cost avoidance  revenue increases
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Cost-Benefit Analysis 

B. Basic Stages of Cost benefit analysis (cont¶)
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Intangible not $ 
Table

17.7 page 694

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Compare and analyze 
NVP  IRR  ROI

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Then PRAY
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Methods of Acquiring IS 

1. Internal Development
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Pros and Cons Discussion Techniques SDLC Prototyping SAD

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Methods of Acquiring IS 

2. Purchase
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Canned vs Custom Discussion

3. External Systems integrator  4. Outsourcing 


5. A combination approach
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Agents Involved in an MIS Project 

A. The Actors
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Z-1992 Figure 17.10 p 704

B. The theories From Markus  C. The Roles: 

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The users are interested in system performance Yes/NO Management controls the resources Yes/no MIS implements a system that SATISFIES the users' needs as well as the constraints and objectives from MGT.

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Agents Involved in an MIS Project 

D. Problems Encountered:
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Actors have their own agendas Users generally do not KNOW what they want/need COMMUNICATION can be a problem 
cognitive style

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Who Initiates A Project?
Managing The Application Development Portfolio  I. How System Projects are begun 

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A. Reasons for Projects 
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Solve a problem  2. Capitalize on an opportunity  3. Respond to a directive

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Who Initiates A Project? 
Capability:
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Efficiency

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improve processing speed Point of sale systems, Bar coding ‡ ability to handle increased volume PC vs. manual methods, more PC's, LAN faster retrieval of information ‡ Bigger, faster data storage, SQL-based DBMS ‡ Canned-software (Order entry, Manufacturing, etc.)

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Who Initiates A Project? 
Control:
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Efficiency/Effectiveness

Improved accuracy and consistency ‡ automating the process to reduce human error ‡ Computer prompting, error detection, field value checks ‡ Provide better security ‡ Need to know screens ‡ Password protection

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Who Initiates A Project? 
Communication:
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Effectiveness

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Enhance communication ‡ Credit card systems, brokerage systems, E-Mail Integration of business areas: Coordination ‡ CIM, LAN communication, Manufacturing systems ‡ (ACCOUNTING, MATERIALS MGMT & MANUFACTURING)

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Who Initiates A Project? 
Cost:
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Effectiveness

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Monitor Costs ‡ Tracking cost through a system (manufacturing LEDCS) Reducing costs ‡ automatic calculation-retrieval systems PTOS

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Who Initiates A Project? 

Competitive Advantage: Effectiveness: a strategic weapon
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Lock in customers ‡ by offering a better price ‡ by providing a unique service ‡ by presenting distinctive products ‡ Examples: American Hospital Supply, Eaasy Saber System, MAC Lock out competitors ‡ This happens when one locks in customers

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Who Initiates A Project? 

Competitive Advantage: Effectiveness: a strategic weapon (con¶t)
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Improve arrangement with suppliers ‡ EDI, long term contracts, the Japanese way, JIT ‡ Quality programs, Shared Data Bases Form a basis for new products ‡ the value of information, commercial data bases on anything, mailing lists, Market Research, Shop Rite Price Plus, Prodigy, CompuServe. INNOVATION

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Who Initiates A Project?
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B. Sources of Project Requests 
1.Department Managers:

Improve control, Power  Form processing systems, QC  2. Senior executives: Strategic, competitive advantage EIS, DSS, Market Research , E-Mail, Big systems  3. Systems analysts: Efficiency Speed accuracy, upgrades  4. Outside Groups: Regulatory Special accounting systems, OSA control
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Who Initiates A Project?
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C. Managing the portfolio direction 
There

are limited resources (money, manpower, material, etc)  In a rational organization
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classify impact of project can the project be redesigned to support multiple business functions or fewer ensure funding judge fit, function, form, recommend development strategy SDLC, SA, Prototyping ask 5 C's
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Who Initiates A Project?
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C. Managing the portfolio direction (con¶t) 
In
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other organizations
Power Political Favored son Fear

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Who Initiates A Project?
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D. Integration 
Application should

be integrated (yes & no)  Horizontal- (marketing, Manufacturing, accounting)  Vertical- upper level to lower level mgmt  Distributed- separate system in different plants different hardware, software  Integration- External-Internal EDI

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Who Initiates A Project? 

II The Project
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A. Project request 
WHAT

IS THE PROBLEM  DETAILS of THE PROBLEM  IMPACT OF THE PROBLEM (how significant is it)  PROPOSED SOLUTION  JUSTIFICATION (5 C's)  BENEFITS (5 C's)  Who else knows  Intangibles

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Who Initiates A Project?
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B. Preliminary Investigation
(Fig 2.6, 75)  by the team- SA, IE, Mgrs., etc  1. Scope of the study 

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Clarify and understand the project request Determine size Assess cost/benefits Determine feasibility - Technical, operational, economic Report findings with recommendations

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Who Initiates A Project? 
2.

Conducting the investigation
Reviewing organizational documents Conducting interviews Observations Questionnaires Do the work Experiment Plant site visits Vendor demonstrations Seminar

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Who Initiates A Project? 
2.

Conducting the investigation (con¶t)
Conferences Workshops literature: trade/academic Personal contacts KEY: Learn, Understand, Listen, Integrate

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Who Initiates A Project? 
3.
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Testing Project Feasibility
Operational ‡ Is there support/resistance; from or by who ‡ Are current business methods acceptable? ‡ If not a change may be welcomed ‡ Have the user's been involved? If not get them involved ‡ Will the system cause harm?

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Who Initiates A Project? 
3.
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Testing Project Feasibility (con¶t)
Technical ‡ Does the necessary tech exist? Can it be acquired? ‡ Does the proposed equipment have the right capacity for the data? Remember Tracks System ‡ Does the propose have the right: ‡ response time, interface, ‡ Can the system be expanded? ‡ Are the accuracy, reliability, ease of use, ease of access, security ok?

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Who Initiates A Project? 
3.
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Testing Project Feasibility (con¶t)
Economic ‡ include cost to conduct full systems integration ‡ cost of hardware/software/ other ‡ benefits in terms of reduced costs ‡ opportunity costs

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Who Initiates A Project? 

III. Selecting the Project Development Strategy
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(Table 2.2, 81) 1. Institutional Vs End user 
Organizational systems

(i.e. MRP, CIM) vs.  End-user (PC- lotus, Dbase)

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Who Initiates A Project?
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2. End-User development approach 
specification

of information requirements in conjunction with a specific task or decision  Querying a data base with special software HPAccess to lotus  development of an application with a package

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Who Initiates A Project?
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3. Suitable end-user developments 
One-time

Inquires  Simple reports  Minor changes  Presentations  What if analysis

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Who Initiates A Project?
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4. What should not be handled 
High

volume transactions  Use of traditional programming languages
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(Basic, FORTRAN, etc.) Yeah right!! 

Changing data

values in a Org DB  Applications spanning several departments  Applications requiring formal documentation  Major long-term applications (the New Post office)  Applications requiring formal spec's
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In time as hardware/software changes these will also change. 89