part four:part four:

Building Information Systems and Building Information Systems and Information Systems ManagementInformation Systems Management

The section will address the issues The section will address the issues such as how to evaluate the value of such as how to evaluate the value of information systems, how to manage information systems, how to manage IT projects in business, how to IT projects in business, how to enhance the information systems enhance the information systems security and control, how to manage security and control, how to manage the information resource and the information resource and infrastructure, and what is the CIO infrastructure, and what is the CIO role? role?

1.The process of 1.The process of Building Building

Information Information SystemsSystems

System Development Life System Development Life Cycle (SDLC) Cycle (SDLC)

A A system development life cyclesystem development life cycle is a is a logical process by which systems analysts, logical process by which systems analysts, software engineers, programmers, and software engineers, programmers, and end-users build information systems and end-users build information systems and computer applications to solve business computer applications to solve business problems and needs. It is sometimes called problems and needs. It is sometimes called an an application development life cycleapplication development life cycle..

A A system development life cycle system development life cycle is a is a systematic and orderly approach to systematic and orderly approach to solving system problems.solving system problems.

System Development System Development Life Cycle (SDLC)Life Cycle (SDLC)

Planning

System analysis

Systemdesign

Systemimplementation

Systemmaintenance

SystemEvaluation

1.1. Planning----identify the scope and Planning----identify the scope and boundary of the problem, and plan the boundary of the problem, and plan the development strategy and goals.development strategy and goals.

2.2. Analysis----study and analyze the Analysis----study and analyze the problems, causes, and effects. Then, problems, causes, and effects. Then, identify and analyze the requirements identify and analyze the requirements that must be fulfilled by any successful that must be fulfilled by any successful solution.solution.

3.3. Design----Logical & Physical Design----Logical & Physical Specifications for Systems SolutionSpecifications for Systems Solution

if necessary, design the solution—not all solution if necessary, design the solution—not all solution require design.require design.

System Development Life System Development Life Cycle (SDLC) Cycle (SDLC)

4. Implementation----implementation 4. Implementation----implementation the solution.the solution.

It is the most difficult step. It consists of It is the most difficult step. It consists of installing the new system(or program), installing the new system(or program), testing, training end users, making testing, training end users, making adjustments, and converting from old system.adjustments, and converting from old system.

5. 5. Maintenance----provides a method Maintenance----provides a method to address changing hardware and to address changing hardware and software requirement.software requirement.

6. Evaluation----the effectiveness of 6. Evaluation----the effectiveness of the new system.the new system.

System Development Life System Development Life Cycle (SDLC) Cycle (SDLC)

What is a Systems What is a Systems Analyst?Analyst?

A systems analyst facilitates the study of A systems analyst facilitates the study of the problems and needs of a business to the problems and needs of a business to determine how the business system and determine how the business system and information technology can best solve the information technology can best solve the problems and accomplish improvements problems and accomplish improvements for the business. for the business. Improved business processes;Improved business processes; Improved information systems;Improved information systems; New or improved computer applicationsNew or improved computer applications

A systems analyst is a business A systems analyst is a business problem solver.problem solver. Business problems: Business problems:

Situations, either real or anticipated, that Situations, either real or anticipated, that require corrective action;require corrective action;

Opportunities to improve a situation despite Opportunities to improve a situation despite the absence of complaints;the absence of complaints;

Directives to change a situation regardless Directives to change a situation regardless of whether anyone has complained about of whether anyone has complained about the current situation.the current situation.

What is a Systems What is a Systems Analyst?Analyst?

The Systems Analyst as The Systems Analyst as a facilitatora facilitator

System Analyst

Steering committeeIT Vendors

Applications programmers

Databaseadministrator

Interface design expert

Mgt/system owner

Networkadministrator

User 1

User 2

User N

FEASIBILITYFEASIBILITY TECHNICAL:TECHNICAL: Assess hardware, software, Assess hardware, software,

technical resourcestechnical resources ECONOMIC:ECONOMIC: Will benefits outweigh costs? Will benefits outweigh costs? OPERATIONAL:OPERATIONAL: Is solution desirable Is solution desirable

within existing conditions?within existing conditions?

INFORMATION REQUIREMENTS:INFORMATION REQUIREMENTS: Detailed Detailed statement of newstatement of new system needs system needs

**

SYSTEM DESIGNSYSTEM DESIGN DETAILS HOW SYSTEM WILL MEET NEEDS:DETAILS HOW SYSTEM WILL MEET NEEDS:

LOGICAL DESIGN:LOGICAL DESIGN: Components, Components, data as needed by applicationsdata as needed by applications

PHYSICAL DESIGN:PHYSICAL DESIGN: PhysicalPhysical location of components and datalocation of components and data

**

DESIGN SPECIFICATIONSDESIGN SPECIFICATIONS OUTPUTOUTPUT: Medium, content, timing: Medium, content, timing INPUT:INPUT: Origins, flow, data entry Origins, flow, data entry USER INTERFACEUSER INTERFACE: Simplicity, efficiency, logic, : Simplicity, efficiency, logic,

feedback, errorsfeedback, errors DATABASE DESIGNDATABASE DESIGN: Logical data relations, : Logical data relations,

volume, speed requirements, file organization & volume, speed requirements, file organization & design, record specificationsdesign, record specifications

PROCESSING: PROCESSING: Computations, program Computations, program modules, modules, required reports, timing of required reports, timing of outputsoutputs

MANUAL PROCEDURES:MANUAL PROCEDURES: What activities, What activities, who performs them, how, where who performs them, how, where

**

CONTROLS: CONTROLS: Input, processing, output, proceduralInput, processing, output, procedural SECURITY: SECURITY: Access controls, catastrophe plans, audit Access controls, catastrophe plans, audit

trailstrails DOCUMENTATION: DOCUMENTATION: Operations, systems, userOperations, systems, user CONVERSION:CONVERSION: Transfer files, initiate new Transfer files, initiate new

procedures, select testing modules, cut procedures, select testing modules, cut over to new over to new systemsystem

TRAINING:TRAINING: Select training techniques, Select training techniques, develop develop training modules, identify training modules, identify training training facilitiesfacilities

**

DESIGN SPECIFICATIONSDESIGN SPECIFICATIONS

ORGANIZATIONAL CHANGES: ORGANIZATIONAL CHANGES: Task Task redesign, job design, process design, redesign, job design, process design, organization structure design, reporting organization structure design, reporting relationshipsrelationships

**

DESIGN SPECIFICATIONSDESIGN SPECIFICATIONS

ROLE OF END USERSROLE OF END USERS

USERS DRIVE SYSTEMS EFFORTUSERS DRIVE SYSTEMS EFFORT MUST HAVE SUFFICIENT MUST HAVE SUFFICIENT

CONTROL TO ENSURE SYSTEM CONTROL TO ENSURE SYSTEM REFLECTS BUSINESS REFLECTS BUSINESS PRIORITIES, NEEDSPRIORITIES, NEEDS

FUNCTIONAL USERS DRIVE FUNCTIONAL USERS DRIVE SYSTEM NEEDSSYSTEM NEEDS

**

COMPLETING SYSTEM COMPLETING SYSTEM DEVELOPMENT PROCESSDEVELOPMENT PROCESS

PROGRAMMING:PROGRAMMING: Translating Translating needs to program codeneeds to program code

TESTING:TESTING: Does system produce Does system produce desired results?desired results?

CONVERSION:CONVERSION: Changing from Changing from the old to the newthe old to the new

**

UNIT TESTING:UNIT TESTING: Tests each unit Tests each unit separatelyseparately

SYSTEM TESTING:SYSTEM TESTING: Do modules Do modules function as planned?function as planned?

ACCEPTANCE TESTING:ACCEPTANCE TESTING: Final Final certificationcertification

TEST PLAN:TEST PLAN: Preparations for Preparations for tests to be performedtests to be performed

**

TESTINGTESTING

CONVERSIONCONVERSION

PARALLEL:PARALLEL: Old & new run same problems. Give Old & new run same problems. Give same results?same results?

DIRECT CUTOVER:DIRECT CUTOVER: Risky conversion to new Risky conversion to new systemsystem

PILOT:PILOT: Introduce into one area. Does it work? Introduce into one area. Does it work? Yes: introduce into other areaYes: introduce into other area

PHASED:PHASED: Introduce in stagesIntroduce in stages CONVERSION PLAN:CONVERSION PLAN: Schedule for Schedule for

conversionconversion DOCUMENTATION:DOCUMENTATION: Description of how Description of how

system workssystem works**

PRODUCTION & PRODUCTION & MAINTENANCEMAINTENANCE

PRODUCTION:PRODUCTION: Constant review by Constant review by users & operators. Does it meet users & operators. Does it meet goals?goals?

MAINTENANCE:MAINTENANCE: Upkeep, update, Upkeep, update, corrections over timecorrections over time

**

Methods of IS Methods of IS DevelopmentDevelopment

1.1. In-house DevelopmentIn-house Development Systems Lifecycle MethodSystems Lifecycle Method Prototyping MethodPrototyping Method

2.2. Application Software PackageApplication Software Package

3.3. Outsourcing Outsourcing

IS Planning

IS Analysis

IS Design Programming

Implementation

Maintenance & Evaluation

debugging

Testing

Convert to new system

Methods of IS DevelopmentMethods of IS DevelopmentM1M1. System Lifecycle . System Lifecycle

methodmethod

M1M1. System Lifecycle . System Lifecycle methodmethod

Project definition

Systems study

Design

Programming,Test, debug

conversion

Post-implementation

Milestone 1Projectinitiation

Milestone 2Design solutiondecision

Milestone 3DesignspecificationSign-off

Milestone 4Maintenancedecision

END PRODUCTS STAGES

Project proposal report

System proposal report

Design specifications

Program codes

Sys. performance tests

Post-impl. audit

OPERATIONS

Year1 Year2 3-8 Year span

A system lifecycle method is A system lifecycle method is necessary for large, complex necessary for large, complex systems & projects, practically when systems & projects, practically when a suitable application package is not a suitable application package is not available.available.

M1. System Lifecycle M1. System Lifecycle methodmethod

CASE: CASE: Taste of ITTaste of IT In 1995, the treasure stand-alone operation for thIn 1995, the treasure stand-alone operation for th

e storage and transport through the list to receive e storage and transport through the list to receive input into the computer, so that the total number input into the computer, so that the total number of the day Wu-know list.of the day Wu-know list.In 1996 established a DOS platform with telephonIn 1996 established a DOS platform with telephone lines connected to the "original" internal networe lines connected to the "original" internal network, so that you can pass some of the country's interk, so that you can pass some of the country's internal information.nal information.The end of 1997, commissioned by the British The end of 1997, commissioned by the British Tai Naite Beijing has developed systems to Tai Naite Beijing has developed systems to spend 10 million yuan. System analysis - spend 10 million yuan. System analysis - design - development (six months). design - development (six months). Implementation of system implementation, but Implementation of system implementation, but also met the new requirements, to do the also met the new requirements, to do the patch, the development of new applications.patch, the development of new applications.

In August 1998, for the information In August 1998, for the information system of the second stage - the report is system of the second stage - the report is automatically generated to solve internal automatically generated to solve internal and customer information inquiries and and customer information inquiries and information service issues.information service issues.The beginning of 1999 the third phase of The beginning of 1999 the third phase of information technology ---- the financial information technology ---- the financial system construction, to solve the cost and system construction, to solve the cost and profit accounting.profit accounting.In 2000, information systems In 2000, information systems development:development:

CASE: CASE: Taste of ITTaste of IT

CASE: CASE: Taste of ITTaste of IT

Questions:Questions: Why Baogong Chuyun Company used in-hWhy Baogong Chuyun Company used in-h

ouse development method to build their iouse development method to build their information systems?nformation systems?

What advantage and disadvantage are this What advantage and disadvantage are this method?method?

Can be costly, time consuming Can be costly, time consuming May encourage freezing specifications May encourage freezing specifications

early in developmentearly in development May not suitable for small, less May not suitable for small, less

structured systemsstructured systems

M1. System Lifecycle M1. System Lifecycle methodmethod

M2. Prototyping MethodM2. Prototyping Method PROTOTYPE: Preliminary working version PROTOTYPE: Preliminary working version

of Information System for Demonstration, of Information System for Demonstration, Evaluation PurposesEvaluation Purposes

Prototyping Method is a process of Prototyping Method is a process of building experimental systems to building experimental systems to demonstrate, evaluation approach, users demonstrate, evaluation approach, users refine needsrefine needs

ITERATIVE PROCESSITERATIVE PROCESS Best for design of end-user interface: How Best for design of end-user interface: How

End-user Interacts With SystemEnd-user Interacts With System

STEPS IN PROTOTYPINGSTEPS IN PROTOTYPING

Identify user’s requirements Identify user’s requirements Development prototype Development prototype Use prototype Use prototype Revise & enhance prototype Revise & enhance prototype

**

M3. Application Software M3. Application Software Packages Packages

Application Software Packages: RewriApplication Software Packages: Rewritten, precoded application software, cotten, precoded application software, commercially available for sale or lease. mmercially available for sale or lease. Geared to common requirements Geared to common requirements CUSTOMIZATION: Modification of SoftwaCUSTOMIZATION: Modification of Softwa

re to Meet Organization’s Needsre to Meet Organization’s Needs MUST WEIGH COSTS / BENEFITSMUST WEIGH COSTS / BENEFITS

CUSTOMIZATIONCUSTOMIZATION

Modifying software package to meet Modifying software package to meet organization’s unique requirements organization’s unique requirements without destroying integrity of without destroying integrity of package.package.

RAISES DEVELOPMENT COSTSRAISES DEVELOPMENT COSTS

**

Effects of Customizing Effects of Customizing Software on Total Software on Total

Implementation CostsImplementation Costs

0

2

4

6

8

10

0.5 1 2 3 4 5

% LINES OF CODE CONVERTED% LINES OF CODE CONVERTED

TO

TA

L IM

PL

EM

EN

TA

TIO

N

TO

TA

L IM

PL

EM

EN

TA

TIO

N

CO

ST

SC

OS

TS

SELECTED EXAMPLES OF SELECTED EXAMPLES OF APPLICATION PROGRAMSAPPLICATION PROGRAMS

ENTERPRISE RESOURCE PLANNING; ENTERPRISE RESOURCE PLANNING; MATERIAL MATERIAL REQUIREMENT PLANNING;REQUIREMENT PLANNING; MNAUFACTURING RESOURCE MNAUFACTURING RESOURCE

PLANNING;PLANNING; E-COMMERCEE-COMMERCE, , CUSTOMER RELATIONSIP CUSTOMER RELATIONSIP MANAGEMENT;MANAGEMENT; BUSINESS INTELLIGENCE; BUSINESS INTELLIGENCE;ACCOUNTS ACCOUNTS

PAYABLE/RECEIVABLE;PAYABLE/RECEIVABLE; ARCHITECTURALARCHITECTURAL DESIGN; DESIGN; BANKING;BANKING; SUPPLY CHAIN MANAGEMENT; SUPPLY CHAIN MANAGEMENT; COMPUTER-AIDED-DESIGN; COMPUTER-AIDED-DESIGN;

DOCUMENT IMAGING; DOCUMENT IMAGING; TRAVEL AGENCY;TRAVEL AGENCY; E-MAIL; E-MAIL; FINANCIAL FINANCIAL CONTROL; CONTROL; FORECASTING; FORECASTING; FORMS DESIGN; FORMS DESIGN; GRAPHICS;GRAPHICS;

HOTEL MANAGEMENT; HOTEL MANAGEMENT; HUMAN RESOURCES; HUMAN RESOURCES; INSTALLMENT INSTALLMENT LOANS;LOANS; INVENTORY CONTROL; INVENTORY CONTROL; JOB COSTING/SCHEDULING; JOB COSTING/SCHEDULING;

LIFE INSURANCE; LIFE INSURANCE; HOTEL MANAGEMENT SYSTEM; HOTEL MANAGEMENT SYSTEM; MATHEMATICAL / STATISTICAL MODELING; MATHEMATICAL / STATISTICAL MODELING; ORDER ENTRY; ORDER ENTRY;

PAYROLL; PAYROLL; PROCESS CONTROL; PROCESS CONTROL; REAL ESTATE MANAGEMENT;REAL ESTATE MANAGEMENT; SALES & DISTRIBUTION; SALES & DISTRIBUTION; SAVINGS SYSTEMS; SAVINGS SYSTEMS; STOCK STOCK

MANAGEMENT; MANAGEMENT; TAX ACCOUNTING; TAX ACCOUNTING; UTILITY CONTROLS;UTILITY CONTROLS; WORD PROCESSINGWORD PROCESSING

**

USE APPLICATION USE APPLICATION PACKAGESPACKAGES

1. Where Functions are Common to 1. Where Functions are Common to many Companiesmany Companies

2. Where In-House Resources are 2. Where In-House Resources are ScarceScarce

3. The application package is available 3. The application package is available

Requirement For Requirement For Proposal(RFP)Proposal(RFP)

Detailed list of QuestionsDetailed list of Questions

Submitted to Vendors Submitted to Vendors

to Determine if Vendor’s Product to Determine if Vendor’s Product meets Organization’s Specific meets Organization’s Specific

RequirementsRequirements

**

Package evaluation Package evaluation criteriacriteria

Functions includedFunctions included FlexibilityFlexibility User friendlinessUser friendliness Hardware & Software resources neededHardware & Software resources needed Database/file characteristicsDatabase/file characteristics Installation effortsInstallation efforts Maintenance availableMaintenance available DocumentationDocumentation Vendor qualityVendor quality COSTCOST

Application Package Application Package Development CycleDevelopment Cycle

SYSTEMS ANALYSISSYSTEMS ANALYSIS SYSTEMS DESIGNSYSTEMS DESIGN PROGRAMMING, TESTING, PROGRAMMING, TESTING,

CONVERSIONCONVERSION PRODUCTION & MAINTENANCE & PRODUCTION & MAINTENANCE &

EVALUATIONEVALUATION

Application Package Application Package Development : systems Development : systems

analysisanalysis

Identify Problem; User Identify Problem; User Requirements; Alternatives; Requirements; Alternatives; Vendors reviewVendors review

Package vs. In-House DevelopmentPackage vs. In-House Development Evaluate PackagesEvaluate Packages Select PackageSelect Package

Application Package Application Package Development : systems Development : systems

designdesign

Tailor Package FeaturesTailor Package Features Train Technical StaffTrain Technical Staff Prepare Physical DesignPrepare Physical Design Customize Package DesignCustomize Package Design Business Process & Organizational Business Process & Organizational

ProceduresProcedures

Application Package Application Package Development : Development :

PROGRAMMING, TESTING, PROGRAMMING, TESTING, CONVERSION:CONVERSION:

Install PackageInstall Package Implement ModificationsImplement Modifications Design Program InterfacesDesign Program Interfaces DocumentationDocumentation Convert to Package SystemConvert to Package System Test SystemTest System Train Users on PackageTrain Users on Package

**

Application Package Application Package DevelopmentDevelopment : : PRODUCTION & PRODUCTION & MAINTENANCE:MAINTENANCE:

1.1. Correct ProblemsCorrect Problems

2.2. EvaluationEvaluation

3.3. Install Updates, Enhancements to Install Updates, Enhancements to PackagePackage

**

Sophisticated Sophisticated information information

systems bakingsystems baking————Shanghai, a Shanghai, a food information food information

system system implementation implementation

casecase

QuestionsQuestions What factors had made the What factors had made the

difference between success and difference between success and failure of the Cisco ERP?failure of the Cisco ERP?

How important and what limitation How important and what limitation is the ERP to the overall is the ERP to the overall architecture?architecture?

CASE: Cisco ERP CASE: Cisco ERP ImplementationImplementation

M4. OUTSOURCINGM4. OUTSOURCING

CONTRACTING:CONTRACTING: COMPUTER CENTER OPERATIONSCOMPUTER CENTER OPERATIONS TELECOMMUNICATIONS NETWORKSTELECOMMUNICATIONS NETWORKS APPLICATION DEVELOPMENTAPPLICATION DEVELOPMENT

TO EXTERNAL VENDORSTO EXTERNAL VENDORS

**

Type of IT Activity Type of IT Activity OutsourcedOutsourced

Data-center operations 78%Data-center operations 78% Application maintenance 52%Application maintenance 52% Application development 44%Application development 44% Network management 56%Network management 56% User support 56%User support 56% Telecommunications 12%Telecommunications 12% Prior Outsourcing ?Prior Outsourcing ? Yes---- 24% No----76% Yes---- 24% No----76%

• Shanghai is the commercial value-added

network five key projects of Shanghai Information Port

• Shanghai Shanghai commercial value-added network is an important part of the Golden Card Project

• One for circulation, finance and other sectors of the information network of professional services, is currently popular and rapidly growing international data acquisition, processing, value-added processing, information dissemination is an effective mechanism for network services.

CASE:CASE:Shanghai commercial Shanghai commercial value-added networkvalue-added network**CASE:CASE:Shanghai commercial Shanghai commercial value-added networkvalue-added network**

*Shanghai Shared Data Network Co., Ltd.

Internet Connection

Homes Other ClustersCarriers

PSTN

DDN ISDN

Banks Gov. Offices

FactoriesRetailers

Information

Payment

OLAP

EDI

EOS

E-CommerceDatabase

IntranetF R

The 1st VAN in China The 1st VAN in China The 1st VAN in China The 1st VAN in China

The company's businessThe company's business

Electronic Commerce & Intranet

Data processing services

Membership Card Business

Electronic Data Interchange (EDI)

Joint management by the credit card network

•Shanghai Lianhua Supermarket Co., Ltd. （SLHS ）•On Haiehuode - in exchange Supermarket Co., Ltd. （ AHOLD ）•Shanghai First Department Store Co., Ltd. （No.1 DS ）•Shanghai Soap Co., Ltd.（No.1 DS）•Shanghai Pudong Yaohan Co., Ltd. （ YUOHAI ）•Shanghai Lianhua Supermarket Co., Ltd. （LHC ）•Convenient commercial Co., Ltd. Shanghai Hong Liang （ LHHL ）•Co., Ltd. Shanghai Valley convenience store （ LHYG)

Main Main MerchantMerchantMain Main MerchantMerchant

Business data processing Business data processing advantagesadvantages

Advantages of professional servicesAdvantages of professional services ：： Can perform complex data analysis and Can perform complex data analysis and

processingprocessing Network capacity, network access equipment with a Network capacity, network access equipment with a

wealth of resourceswealth of resources Data storage for a long time, cross-site backup powerData storage for a long time, cross-site backup power 24 hours non-stop run of the host system, enabling 24 hours non-stop run of the host system, enabling

different companies operating time communication with different companies operating time communication with the center at any time, for data exchange.the center at any time, for data exchange.

Value-added network as a third party certification ensures Value-added network as a third party certification ensures that businesses and transactions outside the fairness of the that businesses and transactions outside the fairness of the relevant units.relevant units.

Customer cost advantageCustomer cost advantage

M5. ADVANTAGES OF M5. ADVANTAGES OF OUTSOURCING:OUTSOURCING:

ECONOMYECONOMY SERVICE QUALITYSERVICE QUALITY PREDICTABILITYPREDICTABILITY FLEXIBILITYFLEXIBILITY MAKING FIXED COSTS VARIABLEMAKING FIXED COSTS VARIABLE FREEING UP HUMAN RESOURCESFREEING UP HUMAN RESOURCES FREEING UP CAPITALFREEING UP CAPITAL

DISADVANTAGES OF DISADVANTAGES OF OUTSOURCING:OUTSOURCING:

LOSS OF CONTROLLOSS OF CONTROL VULNERABILITY OF STRATEGIC VULNERABILITY OF STRATEGIC

INFORMATIONINFORMATION DEPENDENCYDEPENDENCY Hidden costHidden cost

Hidden Cost of Hidden Cost of OutsourcingOutsourcing

Original idea tooutsource

Beginning of the IT-outsourcing relationship

Change of IT vendor or reintegration of IT

TIME

Vendor search and contracting cost

InitialTransition cost

Cost of managing the IT-outsourcing effort Post-IT-outsourcing

Transition cost

Thanks for Your AttentionThanks for Your Attention