Chapter 2Chapter 2Personal ProductivityPersonal Productivity

The StrategicManagement of

InformationSystems

Transaction Processing Transaction Processing SystemSystem

Input OutputProcess

Information

Communication

Systems Development

CHANGES IN THE CHANGES IN THE MARKETPLACEMARKETPLACE

The quality imperative Consumer computing Deregulation of some major industries Crossing industry boundaries Traditional customers are “leaving” Crossing national boundaries Production is becoming global New product and service development cycles are

shortening

TWO CONCEPTS OF THE CORPORATION: TWO CONCEPTS OF THE CORPORATION: SBU OR CORE COMPETENCESBU OR CORE COMPETENCE

SBU Core Competence

Basis for competition Competitiveness oftoday’s products

Interfirm competition tobuild competencies

Corporate structure Portfolio of businessesrelated in product-marketterms

Portfolio of competencies,core products, andbusinesses

Status of the business unit Autonomy is sacrosanct;the SBU “owns” allresources other than cash

SBU is a potentialreservoir of courcompetencies

Resource allocation Discrete businesses arethe unit of analysis,capital is allocatedbusiness by business

Businesses andcompetencies are the unitof analysis; topmanagement allocatescapital and talent

Value added of topmanagement

Optimizing corporatetreturns through capitalallocation trade-offsamong businesses

Enunciating strategicarchitecture and buildingcompetencies to securethe future

PROTOTYPINGPROTOTYPING

User requirements Input, output, and transactions Databases Controls Technology Applications

SYSTEMS MAINTENANCE SYSTEMS MAINTENANCE “PHASE”“PHASE”

Systems Plan Report Systems Analysis Report General Systems Design Report Systems Evaluation and Selection Report Detailed Systems Design Report Systems Implementation Report

PERSONAL COMMUNICATION NETWORKSPERSONAL COMMUNICATION NETWORKS

Permit person-to-person rather than location-to-location. Each person will have his or her own personal phone number associated with a lightweight telephone that he or she carries around. People will not only transmit telephone conversations but also computer-based information, voice mail, electronic messaging, call screening, and other personal from anywhere. They will unlock levels of freedom we don’t yet know, and they will be important for special events, such as political conventions and sporting events, as well as for

emergencies, such as those caused by natural disasters.

PDMPDM

Productivity Differentiation Management

PROCEDURE-BASED VS. GOAL-BASED PROCEDURE-BASED VS. GOAL-BASED INFORMATION ACTIVITIESINFORMATION ACTIVITIES

Procedure-Based Activities: Tend to consist of high volumes of transaction in which each has relatively

low cost or value. Are based on well-defined procedures (or algorithms) where the outputs are

well-defined too. Are based on the handling of data.

Goal-Based Activities Tend to handle fewer transactions of higher value or cost. Are based on ill-defined processes (or heuristics) and the outputs are less

defined as well. Tend to focus on defining the problems and the end results or goals with

effectiveness stressed in achieving them. Are based on the handling of concepts.

OSI’s SEVEN LAYERSOSI’s SEVEN LAYERS

The Physical Layer The Data Link Layer The Network Layer The Transport Layer The Session Layer The Presentation Layer The Application Layer

NETWORK ARCHITECTURENETWORK ARCHITECTURE

A network architecture is not a diagram or a set of diagrams, nor is it one utopian solution for all network problems. It is a set of policies, principles, and guidelines that will lead to more widespread connectivity.

THREE COMPONENTS OF THREE COMPONENTS OF THE MARKETING MODELTHE MARKETING MODEL

A set of technologies that represent products, developed by the systems department in an organization

A set of users of the technology who we can view as customers for these products

A delivery mechanism for developing, delivering, and installing these systems that is analogous to marketing activities

KEEN’S PROJECTIONS FOR KEEN’S PROJECTIONS FOR THE MID - 1990sTHE MID - 1990s

Every large firm in every industry will have from 25 percent to 80 percent of its cash flow processed on-line

Electronic data interchange (EDI) will be the norm Point-of-sale and electronic payments will be core

services Image technology will be an operational necessity Work will be distributed and reorganization will be

commonplace Work will increasingly be location-independent Electronic business partnerships will be standard Reorganizations will be frequent, not exceptional

GOAL OF LINKAGE GOAL OF LINKAGE ANALYSIS PLANNINGANALYSIS PLANNING

Examining the links that organizations have with one another with the goal of creating a strategy for utilizing electronic channels

Understand “waves of innovation” Exploit experience curves Define power relationships map out your “extended enterprise” Plan your electronic channels

SYSTEMS DEVELOPMENT LIFE CYCLE SYSTEMS DEVELOPMENT LIFE CYCLE CONSISTS OF SIX PHASESCONSISTS OF SIX PHASES

Systems Planning Systems Analysis General Systems Design Systems Evaluation and Selection Detailed Systems Design Systems Implementation

MAIN PURPOSE OF EACH OF THE THREE GROUPS MAIN PURPOSE OF EACH OF THE THREE GROUPS IN MEAD’S CURRENT INFORMATION RESOURCES IN MEAD’S CURRENT INFORMATION RESOURCES

ORGANIZATIONORGANIZATION

Information Resources Planning and Control Department - the corporate perspective for information systems planning to ensure that Mead’s information resources plans meshed with business plans, and acted as planning coordinator to help various groups and divisions coordinate their plans with corporate and information resources plans.

Information Services Department - computer operations, development of corporate-wide systems, provided technical services, and furnished all the telecommunications services to the company

Decision Support Applications (DSA) Department - all end user computing support for the company

MURRAY’S EIGHT PHASES TO TRULY DISTRIBUTED SYSTEMSMURRAY’S EIGHT PHASES TO TRULY DISTRIBUTED SYSTEMS

Phase 1: The first phase is characterized by host-based, real-time query and update. This phase is traditional on-line information system processing, where dumb terminals access host-based applications to view and update data

Phase 2: The second phase provides additional query capabilities through file transfers to PCs. Phase 3: The third phase adds batch updating form PC data. This phase reverses the philosophy of

Phase 2 by making the PC database the master. Phase 4: The forth phase enables real-time query and update from either host or PC. This phase

extends the capabilities of the PCs by allowing them to update the host on-line. Phase 5: The fifth phase introduces homogeneous cooperative processing without two-phase

commit, that is, like databases run on the same hardware and system software platforms. This phase adds true distributed databases, across similar or identical platforms.

Phase 6: The sixth phase moves to heterogeneous cooperative processing without two-phase commit, that is, databases run on a mix of platforms. This phase extends the previous one by permitting distributed databases across mixed platforms.

Phase 7: This seventh phase adds the all-important two-phase commit capability (to homogeneous databases), going a system a true distributed database.

Phase 8: This phase extends Phase 7 to heterogeneous databases.

PORTER’S FIVE PORTER’S FIVE COMPETITIVE FORCESCOMPETITIVE FORCES

The threat of new entrants into one’s industry

The bargaining power of customers and buyer

The bargaining power of suppliers Substitute products or service Rivalry among competitor

According to Naisbitt and Aburdene, changes are According to Naisbitt and Aburdene, changes are occurring in traditional environmentsoccurring in traditional environments

Many organizations are emphasizing teams to accomplish major tasks and projects.

Information workers are increasingly mobile. Organizations are examining what they should do internally,

and what should be done by some other organization. Corporations are shifting their emphasis from financial

capital to human capital. New forms of self-managing groups are appearing. A coming labor shortage will result in more jobs for women,

part-time older people, and the poor and disadvantaged.

FEDERAL EXPRESS USING IT FEDERAL EXPRESS USING IT TO COMPETE ON QUALITYTO COMPETE ON QUALITY

The program started at the top of the corporation They track actual failures rather than percentages

of success Their measures are from a customer perspective Everyone’s compensation is based on quality

improvement Solving root causes of failures

INFORMATION ENGINEERING INFORMATION ENGINEERING METHODOLOGY (IEM)METHODOLOGY (IEM)

Systems Planning Systems Analysis Systems Design Systems Construction and

Implementation

SYSTEMS DEPARTMENT’S FIVE ROLES IN SYSTEMS DEPARTMENT’S FIVE ROLES IN BUSINESS REENGINEERING, ACCORDING BUSINESS REENGINEERING, ACCORDING

TO THE INDEX FOUNDATIONTO THE INDEX FOUNDATION

Systems directors will be influences To participate on multidisciplinary teams,

which will be the change agents Build more flexible systems faster Introduce process-supporting technologies Be the custodian of the firm’s technical

architecture

WHAT REENGINEERING PRINCIPLES WHAT REENGINEERING PRINCIPLES DOES MICHAEL HAMMER DOES MICHAEL HAMMER

RECOMMEND?RECOMMEND? Organize around outcomes, not tasks People who use the output should perform the process Include information processing in the “real” work that

produces the information Treat geographically dispersed resources as if they

were centralized Link parallel activities rather than integrate them Let “doers” be self managing Capture information once and as its source

ELEMENTS OF A GOOD ELEMENTS OF A GOOD ANALYSISANALYSIS

Financial/Strategic Analysis Implementation/Methodology Measurable/Expected Results Future Growth/Continual Development HR Implications/People Core Competencies/Critical Service Factor Target Market Segment

TWO GUIDING FRAMEWORKS TWO GUIDING FRAMEWORKS FOR DISTRIBUTED SYSTEMSFOR DISTRIBUTED SYSTEMS

An Organizational Framework -

The top three levels:

corporate, regional, and site

The bottom three levels:

department, work group, and individual A Technical Framework - Migration of computer

power to end users will be the driving force for network-based information systems. Four components: processors, networks, services, and standards.

FOUR FORCES CAUSING MANAGEMENT TO FOUR FORCES CAUSING MANAGEMENT TO SERIOUSLY CONSIDER REENGINEERING SERIOUSLY CONSIDER REENGINEERING

HOW THEIR BUSINESS WORKSHOW THEIR BUSINESS WORKS The pressures of the 1990’s are forcing companies to focus on new

competitive strategies - quality, cycle time, customer service, and niche markets.

Enough failures in the 1980’s in using IT to gain competitive advantage to force management to rethink their strategies for achieving this goal.

Companies are being forced to cut operating expenses so significantly that traditional methods no longer work.

The cost/performance of computer hardware and telecommunications has dropped so dramatically that IT has become practical for a far wider variety of uses than a few years ago.

FOUR TYPES OF FOUR TYPES OF DOCUMENTATION PREPAREDDOCUMENTATION PREPARED

Systems Documentation Software Documentation Operations Documentation User Documentation

Increased Pressures on Information Technology

Globalization/new competitors– Pressure on IT to focus even more strongly on

businesses that are revenue-generating Faster business cycles

– Pressure on IT to focus on the increasing need to support revenues and decreasing fixed/semi-fixed costs

Outsource– non-revenue-generating functions

Rapidly Changing Markets – reinforce the need for flexibility in staff/operations and

shorter product life-cycles and responsiveness.

Desire to MinimizeDesire to Minimize Economies of scope

– Want one vendor to manage multiple functions Economies of Scale

– Leverage expertise and methodologies– Reduce need to invest in expensive state-of-the-art technologies

– Take process-oriented approach

Management time devoted to one vendor – Leverage Expertise – Use non-revenue-generating areas to provide

multiple methodologies and functions– Investment in expensive technologies– Emphasize process-oriented approach