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Management Information Systems

Prof. Rushen Chahal

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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:
± 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:
± 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:
± a vision ± a model ± a framework

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Establishing Organizational MIS Requirements
‡ A. Contents of an MIS Master Plan
± First MIS is a major corporate asset
‡ provides benefits ‡ uses resources- Money

± 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)
± A long term Plan ± Coordination of MIS Plan with business plans
‡ Content ‡ Timing ‡ Personnel

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Establishing Organizational MIS Requirements
± 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 11 Page 11

Establishing Organizational MIS Requirements
± 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
± Derived directly from the business plan

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Establishing Organizational MIS Requirements
‡ C. The Strategic Cube the cube provides a framework
± 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
± 1. Identify the organizational stakeholder
‡ customers ‡ employees ‡ suppliers

± 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)
± 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
± 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)
± 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 BSP developed by IBM Requirements

± 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)
± 1. Defining the business process
‡ identify the activities ‡ identify the decisions ‡ identify the systems, processes, flows

± 2. Defining Business data
‡ classes of data (customers, employees, places, objects) ‡ determine data usage ‡ Example: Inventory record- SKU, Name, quantity on hand, lead time 23 Page 23

Establishing Organizational MIS Requirements
‡ BSP (con¶t)
± 3. Define information architecture
‡ Creating processes ‡ Using processes

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17.3 Establishing Organizational MIS Critical Success Factors (Rockart, 1979) Requirements

± 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
± 1. Sources for the CSF's
‡ industry: ‡ the company ‡ the environment
± ± ± ± ± 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). 27 Page 27

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

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Other Methods
‡ Investment Strategy Analysis
± A strategy based upon portfolio planning and investment analysis. ± Four major types of systems for the 1990's
‡ 1. 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 30 Page 30

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

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Other Methods
‡ Alpha Company
± 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 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)
± 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
± 1. Elements of a scenario
‡ the 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 & society
± ± ± ± ± information accuracy privacy (see Scientific American August, 1992) access to information property rights people changes

‡ Financial considerations
± ROI

‡ TECHNOLOGY
± speed of change ± quick obsolescence

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Other Methods
± 2. Creating Scenarios
‡ a. deterministic : spreadsheet what if analysis
± Lotus 123

‡ b. 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
± Couger's Method; a 1992 Working paper ± the 5 phases
‡ ‡ ‡ ‡ ‡ 1. 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)
± 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
± 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
± informal communication flows- E-mail, voice mail ± work constellations- expert systems

‡ ad hoc decision processes- document retrieval Page 39 39

Other Methods
‡ The Architecture Building Approach (con¶t)
± 2. help people communicate
‡ provide different types of views of the same thing

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

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Establishing Organizational MIS Requirements
‡ SUMMARY
± The 3 Stages of developing a plan:
‡ 1. Understand the business
± use a model or framework to help ± USE THE RIGHT MODEL OR FRAMEWORK

‡ 2. 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.

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Evaluating the Relative Worth of MIS Applications
± 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
± 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
± 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:
± "steer" direct, push, pull, etc. the Organization investments in the direction that benefits the company the most; the STRATEGIC direction.

‡ 3. How do they do that?
± Information scanning

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Linking Business and systems planning
‡ 4. Advantages of steering committees from Drury (1984)
± 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
± 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
± a quantitative support $ ± Table 17.6 p 693

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Cost-Benefit Analysis
‡ B. Basic Stages of Cost benefit analysis
± Identification of costs
‡ fixed costs ‡ operational costs (variable costs)

± Identify Benefits
‡ ‡ ‡ ‡ Tangible $ cost savings Cost avoidance revenue increases 53 Page 53

Cost-Benefit Analysis
‡ B. Basic Stages of Cost benefit analysis (cont¶)
± Intangible not $
‡ Table 17.7 page 694

± Compare and analyze
‡ NVP ‡ IRR ‡ ROI

± Then PRAY
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Methods of Acquiring IS
‡ 1. Internal Development
± Pros and Cons Discussion ± Techniques ± SDLC ± Prototyping ± SAD

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Methods of Acquiring IS
‡ 2. Purchase
± 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
± Z-1992 Figure 17.10 p 704

‡ B. The theories From Markus ‡ C. The Roles:
± 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. 63 Page 63

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Agents Involved in an MIS Project
‡ D. Problems Encountered:
± 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
± A. Reasons for Projects
‡ 1. Solve a problem ‡ 2. Capitalize on an opportunity ‡ 3. Respond to a directive

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Who Initiates A Project?
‡ Capability: Efficiency
± 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: 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: Effectiveness
± 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: Effectiveness
± 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
± 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)
± 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?
± 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 73

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Who Initiates A Project?
± C. Managing the portfolio direction
‡ There are limited resources (money, manpower, material, etc) ‡ In a rational organization
± 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?
± C. Managing the portfolio direction (con¶t)
‡ In other organizations
± ± ± ± Power Political Favored son Fear

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Who Initiates A Project?
± 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
± 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 77 Page 77

Who Initiates A Project?
± B. Preliminary Investigation
‡ (Fig 2.6, 75) ‡ by the team- SA, IE, Mgrs., etc ‡ 1. Scope of the study
± ± ± ± ± 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. 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. 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. 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
± (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?
± 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?
± 3. Suitable end-user developments
‡ ‡ ‡ ‡ ‡ One-time Inquires Simple reports Minor changes Presentations What if analysis

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Who Initiates A Project?
± 4. What should not be handled
‡ High volume transactions ‡ Use of traditional programming languages
± (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

± In time as hardware/software changes these will also change.
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