1 MIS, Chapter 10 ©2013 Course Technology, a part of Cengage Learning BUILDING SUCCESSFUL INFORMATION SYSTEMS CHAPTER 10 Hossein BIDGOLI MIS

1MIS, Chapter 10

©2013 Course Technology, a part of Cengage Learning

BUILDING SUCCESSFUL INFORMATION SYSTEMS

CHAPTER 10

Hossein BIDGOLI

MIS

2MIS, Chapter 10


Chapter 10 Building Successful Information Systems

LO1 Describe the systems development life cycle (SDLC) as a method for developing information systems.

LO2 Explain the tasks involved in the planning phase.

LO3 Explain the tasks involved in the requirements- gathering and analysis phase.

LO4 Explain the tasks involved in the design phase.

LO5 Explain the tasks involved in the implementation phase.

l e a r n i n g o u t c o m e s

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LO6 Explain the tasks involved in the maintenance phase.

LO7 Describe new trends in systems analysis and design, including service-oriented architecture,

rapid application development, extreme programming, and agile methodology.

l e a r n i n g o u t c o m e s (cont’d.)


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Systems Development Life Cycle: An Overview

• System failure can happen for several reasons:– Missed deadlines– Users’ needs that weren’t met– Dissatisfied customers– Lack of support from top management– Exceeding the budget

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Systems Development Life Cycle: An Overview (cont’d.)

• Software development life cycle (SDLC)– Also known as the “waterfall model”– Series of well-defined phases performed in

sequence that serve as a framework for developing a system or project

– Each phase’s output (results) becomes the input for the next phase

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Systems Development Life Cycle: An Overview (cont’d.)

• Systems planning – Evaluating all potential systems that need to be

implemented– Preliminary analysis of requirements

• Feasibility study– Conducted for each system– Organization decides which ones are a priority

• Information system projects – Often an extension of existing systems or involve

replacing an old technology with a new one

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Exhibit 10.1 Phases of the SDLC

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Phase 1: Planning

• One of the most crucial phases of the SDLC model

• Systems designer must define the problem the organization faces– Problem can be identified internally or

externally

• Analyst or team of analysts assesses the current and future needs of organization or a specific group of users

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Phase 1: Planning (cont’d.)

• Questions:– Why is this information system being

developed?– Who are the system’s current and future users?– Is the system new or an upgrade or extension

of an existing system?– Which functional areas (departments) will be

using the system?

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• Analysts must examine:– Organization’s strategic goals– How the proposed system can support these

goals– Which factors are critical to the proposed

system’s success– Criteria for evaluating the proposed system’s

performance

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• Make sure users understand the four Ws:– Why– Who– When – What

• End result of this phase should give users and top management a clear view of: – What the problem is – How the information system will solve the

problem

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• Example: ABC Furniture is planning for an information system to solve the problem of inaccurate inventory forecasts– Why– Who– When– What

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Formation of the Task Force

• Consisting of representatives from different departments, systems analysts, technical advisors, and top management

• Team collects user feedback and works toward getting users involved from the beginning

• Internal users – Employees who will use the system regularly

• External users– Customers, contractors, suppliers, and other

business partners

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Formation of the Task Force (cont’d.)

• Joint application design (JAD) – Collective activity involving users, top

management, and IT professionals– Centers on a structured workshop– Results in a final document containing

definitions for data elements, workflows, screens, reports, and general system specifications

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Feasibility Study

• Feasibility – Measure of how beneficial or practical an

information system will be to an organization– Should be measured continuously throughout

the SDLC process

• Usually has five major dimensions:– Economic, technical, operational, scheduling,

and legal

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Economic Feasibility

• Assesses a system’s costs and benefits• Team tallies tangible development and

operating costs for the system and compares them with expected financial benefits of the system

• Keep in mind that an information system project that’s feasible at the outset could become unfeasible later

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Economic Feasibility (cont’d.)

• Tangible benefits– Quantified in terms of monthly or annual

savings

• Intangible benefits– Difficult to quantify in terms of dollar amounts– If they aren’t at least identified, many

information system projects can’t be justified

• Cost-effectiveness analysis – Based on the concept that a dollar today is

worth more than a dollar one year from now

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Economic Feasibility (cont’d.)

• Most common analysis methods – Payback, net present value (NPV)– Return on investment (ROI)– Internal rate of return (IRR)

• Cost-benefit analysis (CBA) report– Used to sell the system to top management

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Technical Feasibility

• Concerned with technology to be used in the system

• Team needs to assess whether technology to support the new system is available or feasible to implement

• Lack of technical feasibility – Can also stem from an organization lacking the

expertise, time, or personnel to implement the new system

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Operational Feasibility

• Measure of: – How well the proposed solution will work in the

organization – How internal and external customers will react

to it

• “Is the information system worth implementing?”

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Scheduling Feasibility

• Whether the new system can be completed on time

• If the new system can’t be delivered in time– Loss of customers could force the organization

out of business

• Problem of missing deadlines – Common in the information systems field

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Legal Feasibility

• Concerned with legal issues • Typically addresses these questions:

– Will the system violate any legal issues in the country where it will be used?

– Are there any political repercussions of using the system?

– Is there any conflict between the proposed system and legal requirements? • For example, does the system take the

Information Privacy Act into account?

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Phase 2: Requirements Gathering and Analysis

• Requirements-gathering and analysis phase– Analysts define the problem and generate

alternatives for solving it

• First step – Gathering requirements– Interviews, surveys, observations, and JAD approach

• Team uses this information to determine:– What the new system should do (process analysis) – What data is needed for this process to be

performed (data analysis)

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Phase 2: Requirements Gathering and Analysis (cont’d.)• Two major approaches for analysis and

design of information systems: – Structured systems analysis and design (SSAD)

approach– Object-oriented approach

• Use different tools for creating analysis models

• Models created during the analysis phase constitute the design specifications

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Table 10.1 Examples of Tools Used in SSAD Analysis Models

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Exhibit 10.2 Data Flow Diagram for ABC’s Inventory Management System

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Exhibit 10.3 Context Diagram for ABC’s Inventory Management System

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Phase 3: Design

• Design phase– Analysts choose the solution that’s the most

realistic and offers the highest payoff for the organization

• Output of this phase– Document with exact specifications for

implementing the system– Includes files and databases, forms and

reports, documentation, procedures, hardware and software, networking components, and general system specifications

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Phase 3: Design (cont’d.)

• Design phase consists of three parts:– Conceptual design

• Overview of the system• Does not include hardware or software

choices– Logical design

• Makes the conceptual design more specific by indicating hardware and software

– Physical design• Created for a specific platform

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Computer-Aided Systems Engineering

• Computer-aided systems engineering (CASE) tools – Automate parts of the application development

process

• Similar to computer-aided design (CAD) tools used by architects and engineers– Capabilities vary

• CASE tools available– CA ERwin Process Modeler, Oracle Designer,

Visible System’s Visible Analyst

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Computer-Aided Systems Engineering (cont’d.)

• Outputs:– Specifications documents– Documentation of the analysis, including

models and explanations– Design specifications with related

documentation– Logical and physical design documents based

on the conceptual design– Code modules that can be incorporated into

the system

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Prototyping

• Small-scale version of the system is developed– Large enough to illustrate the system’s benefits – Allows users to offer feedback

• Prototypes are used for:– Gathering system requirements– Helping to determine system requirements– Determining a system’s technical feasibility– Selling the proposed system to users and

management

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Prototyping (cont’d.)

• Steps:– Define the initial requirements– Develop the prototype– Review and evaluate the prototype– Revise the prototype

• Numerous prototyping development tools are available: e.g., spreadsheets

• Prototyping has advantages and disadvantages

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Phase 4: Implementation

• Implementation phase– Solution is transferred from paper to action– Team configures the system and procures

components for it

• Tasks– Acquiring new equipment– Hiring new employees– Training employees– Planning and designing the system’s physical

layout

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Phase 4: Implementation (cont’d.)

– Coding– Testing– Designing security measures and safeguards– Creating a disaster recovery plan

• Options for conversion:– Parallel conversion– Phased-in-phased-out conversion– Plunge (direct cutover) conversion– Pilot conversion

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Project Management Tools and Techniques

• Help systems analysts– Solve scheduling problems, plan and set goals,

highlight potential bottlenecks

• Software– Microsoft Project, Micro Planning International’s

Micro Planner

• Techniques– PERT (Program Evaluation Review Technique),

CPM (Critical Path Method), and Gantt charts• “Critical path”

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Exhibit 10.4 PERT network

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Request for Proposal

• Written document with detailed specifications,– Used to request bids for equipment, supplies, or

services from vendors

• Usually prepared during the implementation phase

• Advantage:– All vendors get the same information and

requirements

• Disadvantage:– Time involved in writing and evaluating proposals

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Request for Proposal (cont’d.)

• Free templates available for RFPs• Request for information (RFI)

– Screening document for gathering vendor information and narrowing the list of potential vendors

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Implementation Alternatives

• Insourcing– Organization’s team develops the system

internally

• Self-sourcing– End users develop information systems with

little or no formal assistance from the information systems team

– Managers are concerned about end users’ lack of adequate systems analysis and design background, and the loosening of system development standards

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Implementation Alternatives (cont’d.)

• Outsourcing – Organization hires an external vendor or consultant

who specializes in providing development services– Options

• Onshore• Nearshore• Offshore

– Disadvantages of outsourcing• Loss of control• Dependency• Vulnerability of strategic information

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Phase 5: Maintenance

• Information system is operating• Enhancements and modifications to the

system have been developed and tested• Hardware and software components have

been added or replaced• Team collects performance data and

gathers information on whether the system is meeting its objectives– By talking with users, customers, and other

people affected by the new system

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New Trends in Systems Analysis and Design

• SDLC model might not be appropriate in these situations:– Lack of specifications– Input-output process can’t be identified

completely– Problem is “ad hoc”– Users’ needs change constantly

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Service-Oriented Architecture

• Philosophy and a software and system development methodology– Focuses on the development, use, and reuse of small,

self-contained blocks of codes (called services) to meet the software needs of an organization

• Attempts to solve software development issues– Recognizing, accepting, and leveraging existing

services– “Blocks of codes” can be reused

• Starwood Hotels and Resorts Worldwide, T-Mobile

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Rapid Application Development

• Concentrates on user involvement and continuous interaction between users and designers

• Combines the planning and analysis phases into one phase

• Develops a prototype of the system• Iterative process (“incremental

development”)– Repeats the design, development, and testing

steps as needed, based on feedback from users

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Extreme Programming• Recent method for developing software

applications and information system projects• Divides a project into smaller functions

– Developers can’t go on to the next phase until the current phase is finished

• “Story” written on index cards• Pair programming (“sharing a keyboard”)

– Two programmers participate in one development effort at one workstation

• Major departure from traditional software development

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Agile Methodology

• Similar to XP• Less emphasis on team coding

– More emphasis on limiting the project’s scope

• Focuses on setting a minimum number of requirements– Turning them into a working product

• Agile Alliance organization– Manifesto contains principles for this

methodology

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Summary

• SDLC phases:– Planning, requirements-gathering and analysis,

design, implementation, and maintenance

• CASE tools• Prototyping• RFP• Self sourcing and outsourcing• New trends in systems development

– SOA, RAD, XP, and Agile methodology

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ENTERPRISE SYSTEMSCHAPTER 11

Hossein BIDGOLI

MIS

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Chapter 11 Enterprise Systems

LO1 Explain how supply chain management is used.

LO2 Describe customer relationship management systems.

LO3 Explain knowledge management systems.

LO4 Describe enterprise resource planning systems.

l e a r n i n g o u t c o m e s

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Supply Chain Management

• Supply chain – Integrated network – Consisting of an organization, its suppliers,

transportation companies, and brokers – Used to deliver goods and services to

customers– Exist in both service and manufacturing

organizations

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Exhibit 11.1 Supply Chain Configuration

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Supply Chain Management (cont’d.)

• Supply chain management (SCM) – Process of working with suppliers and other

partners in the supply chain to improve procedures for delivering products and services

– Coordinates:• Procuring materials• Transforming materials into intermediate

and finished products or services • Distributing finished products or services to

customers

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• In manufacturing firm, information in an SCM system flows between the following areas:– Product flow– Information flow– Finances flow

• Four key decisions in supply chain management: – Location– Inventory– Production– Transportation

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• Vendors offer comprehensive solutions:– SAP– Oracle– JDA Software – Manhattan associates

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Dell Computer’s Supply Chain

• Modified its supply chain from a “push” to a “pull” manufacturing process – Also known as “built to order (BTO)”

• Main sales channel is direct sales to customers

• Dell has been able to reduce costs and shorten delivery time by eliminating intermediaries

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SCM Technologies

• Information technologies and the Internet play a major role in implementing an SCM system

• Electronic Data Interchange (EDI)– Enables business partners to send and receive

information on business transactions– Expedites delivering accurate information– Lowers the cost of transmitting documents – Advantage of being platform independent and

easy to use

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SCM Technologies (cont’d.)

• Using EDI has some drawbacks – Uses proprietary standards– Beneficial when more companies are in the EDI

network – Often not affordable for small suppliers and

distributors

• Open EDI – Based on XML– Traditional EDI has declined in popularity

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Internet-Enabled SCM

• Improves information sharing throughout the supply chain

• Can improve the following SCM activities:– Purchasing/procurement– Inventory management– Transportation– Order processing– Customer service– Production scheduling

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E-marketplaces

• Third-party exchange – Provides a platform for buyers and sellers to

interact with each other and trade more efficiently online

• Help maintain a competitive edge in the supply chain in the following ways: – Provides opportunities for sellers and buyers to

establish new trading partnerships – Provides a single platform for prices,

availability, and stock levels that’s accessible to all participants

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E-marketplaces (cont’d.)

– Solves time constraint problems for international trade and making it possible to conduct business around the clock

– Makes it easy to compare prices and products from a single source instead of spending time contacting each seller

– Reduces marketing costs more than traditional sales channels can

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E-marketplaces (cont’d.)

• E-distributor – Marketplace owned and operated by a third

party that provides an electronic catalog of product

– Maintenance, repair, and operations (MROs) services• Includes services from different vendors• E-distributor coordinates them into one

package for customers – Example of a horizontal market

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Online Auctions

• Brings traditional auctions to customers around the globe – Makes it possible to sell far more goods and

services than at a traditional auction

• Brokerage business model • Reverse auctions

– Invite sellers to submit bids for products and services

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Collaborative Planning, Forecasting, and Replenishment

• Coordinate supply chain members through point-of-sale (POS) data sharing and joint planning

• Any data collected shared with all members of the supply chain

• Coordinating the supply chain can be difficult • CPFR ensures that inventory and sales data is

shared across the supply chain – So that everyone knows the exact sales and

inventory levels

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Collaborative Planning, Forecasting, and Replenishment (cont’d.)

• Costs for each partner are shared or minimized

• Unforeseen problems can crop up

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Exhibit 11.2 CPFR Process

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Customer Relationship Management

• CRM– Consists of the processes a company uses to

track and organize its contacts with customers

• Main goal of a CRM system – Improve services offered to customers – Use customer contact information for targeted

marketing

• Marketing strategies in a CRM system – Focus on long-term relationships with

customers instead of transactions

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Customer Relationship Management (cont’d.)

• Identifies segments of customers• Improves products and services to meet

customers’ needs• Improves customer retention• Identifies a company’s most profitable

(and loyal) customers• Helps organizations make better use of

data, information, and knowledge to understand customers

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• Gives organizations more complete pictures of their customers – Integrates demographic and other external

data with customers’ transaction data to better understand customer behavior

• Pays external agencies for additional data about potential customers that might be public or semiprivate

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• With a CRM system, organizations can:– Provide services and products that meet

customers’ needs – Offer better customer service through multiple

channels– Increase cross-selling and upselling– Help sales personnel close deals faster by

offering data on customers’ backgrounds – Retain existing customers and attract new ones

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• CRM systems include: – Sales automation – Order processing – Marketing automation – Customer support – Knowledge management – Personalization technology

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CRM in Action

• Time Warner Cable Business Class – CRM system from Salesforce.com – Analyze business data, improve the accuracy

of forecasts, improve problem solving, and monitor sales and business activities

• Important features of the system include:– Dashboards, features for “drilling down”, Web-

based knowledge base for employees and customers, and Web log for sales personnel communication

• Has increased productivity by 10%

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CRM Applications

• On-premise CRM or Web-based CRM (SaaS)

• Several software packages are available for setting up a CRM system:– Amdocs CRM, Optima Technologies ExSellence,

Infor CRM, SAP mySAP, Oracle PeopleSoft CRM, and Oracle Siebel

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CRM Applications (cont’d.)

• Features:– Salesforce automation– eCRM or Web-based CRM– Survey management– Automated customer service

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Personalization Technology

• Personalization – Satisfies customers’ needs, builds customer

relationships, and increases profits– Designs goods and services that meet

customers’ preferences better

• Customization– Allows customers to modify the standard

offering• Such as selecting a different home page to

be displayed each time you open your Web browser

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Personalization Technology (cont’d.)

• Using personalization requires gathering a lot of information about customers’ preferences and shopping patterns

• Amazon – Known for using personalization to recommend

products to customers

• Nordstrom.com– Suggest shoes or a tie that goes with the suit

or a similar suit in the same category

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• Apple iTunes– Suggests other songs that listeners similar to

you purchased

• Google account holders– Personalized search results that are reordered

based on their searching histories

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• Implement a personalization system:– Internet, databases, data warehouse/data

marts, data-mining tools, mobile networks, and collaborative filtering

• Collaborative filtering (CF) – Searches for specific information or patterns,

using input from multiple business partners and data sources

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Knowledge Management

• Improve CRM systems by identifying, storing, and disseminating “know-how”—facts about how to perform tasks

• Knowledge is an asset – Should be shared throughout an organization

to generate business intelligence and maintain a competitive advantage in the marketplace

• Knowledge is more than information and data– Also contextual

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Knowledge Management (cont’d.)

• Knowledge repository – Stores knowledge of experts

• Example: knowledge base of typical customer complaints and solutions

• Motivates employees to share knowledge– Offer reward

• Simple knowledge management system – Using groupware

• Other tools and technologies include:– DBMSs, data-mining tools, decision support systems

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Knowledge Management (cont’d.)

• Knowledge management system should help an organization to:– Promote innovation by encouraging free

exchange of ideas – Improve customer service by reducing

response time – Increase revenue by reducing the delivery time

for products and services – Improve employee retention rates by

rewarding employees for their knowledge

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Enterprise Resource Planning

• Integrated system • Collects and processes data • Manages and coordinates resources,

information, and functions• Many components, including:

– Hardware, software, procedures, and input from all functional areas

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Enterprise Resource Planning (cont’d.)• Well-designed ERP system benefits:

– Increased availability and timeliness of information – Increased data accuracy and improved response time – Improved customer satisfaction – Improved employee satisfaction – Improved planning and scheduling – Improved supplier relationship – Improved reliability of information – Reduction in inventory costs – Reduction in labor costs – Reduction in order-to-fulfillment time

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Enterprise Resource Planning (cont’d.)

• ERP systems are available as modules • Organization can purchase only the

components it needs – Keeps costs down for organizations

• More than 40 vendors offer ERP software

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Exhibit 11.3 ERP configuration

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Table 11.1 ERP Components

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ERP Streamlines Operations at Naghi Group

• Offers wide range of products and services throughout the Middle East

• Data integration cost hours each month• Solution was ERP software

– VAI’s S2K Distribution Suite– View financial data, keep track of inventory

status, analyze customers’ purchasing activities in real time

– Has streamlined operations, improved customer service, and contributed to more timely business decisions

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Summary

• Enterprise systems• Supply chain management (SCM),

technologies– Electronic data interchange (EDI), Internet-based

SCM, online auctions, e-marketplaces, collaborative planning, forecasting, replenishment

• Customer relationship management (CRM)– Personalization– Customization

• Knowledge management and enterprise resource planning (ERP)

Documents

1 MIS, Chapter 10 ©2013 Course Technology, a part of Cengage Learning BUILDING SUCCESSFUL INFORMATION SYSTEMS CHAPTER 10 Hossein BIDGOLI MIS