chapter 3 solving problems the strategic management of information technology
TRANSCRIPT
Chapter 3Chapter 3Solving ProblemsSolving Problems
The StrategicManagement of
InformationTechnology
Systems ApproachSystems Approach
Input OutputProcess
Feedback and Control Feedback and Control SystemsSystems
Input OutputProcess
Control
Goal
Feedback
Strategic Leverage Strategic Leverage ParadigmParadigm
CompetitivePosition
CompetitivePosition
Nature of Conflict;Terms of
Competition
StrategicLeverage
ObjectivesStrategies
Tactics
Changethe
Game
Changethe
Game
Systems DevelopmentSystems DevelopmentLifecycleLifecycle
Planning
Support
Implementation Design
Analysis
Obsolete SolutionProblem to be Solved
ProblemUnderstanding
andSolution
RequirementsAcceptable
SolutionStatement
ImplementedSolution
ImplementationError (bug)
New, Related Problem or Requirement
New implementation Alternative or Requirement
Systems Planning ElementsSystems Planning Elements People
– Users, Management, Information Specialists
Data– How it is captured, used, and stored
Activities– Automated and Manual– Business and Information Applications
Networks– Where data is stored and processed– How data is exchanged between different locations
Technology– hardware and software used
Information SystemInformation SystemBuilding BlockBuilding Block
Systems Builders
Systems Designers
Systems Users
Systems Owners
Differentiation versus Cost LeadershipDifferentiation versus Cost LeadershipT1
SustainablePremium
Quality
Cost
Minimum or Market-RequiredQuality
DifferentiatedPlayer
CostLeader
TechnologyCurve
Is Cost Leadership Sustainable?Is Cost Leadership Sustainable?T1
SustainablePremium
Quality
Cost
Minimum or Market-RequiredQuality
DifferentiatedPlayer
CostLeader
OldTechnologyCurve
T2
NewTechnologyCurve
Industry/Company Industry/Company RelationshipsRelationships
IndustryStructure &Competitive
Position
Long-termObjectives,StrategicDirection
DetailedStrategies
and Tactics
Freedomof
Maneuver
Break-Even PointBreak-Even PointTotal Revenue
Profit
Total Costs
Fixed Costs
SalesBreak-Even Volume
Revenueand
Costs
Profit
FixedCosts
DecisionDecision Trees Trees
DecisionPoint
Probability
Efforts to CategorizeEfforts to Categorizethe Unknownthe Unknown
Complexity
Instability
Uncertainty
Barriers to Entry SourcesBarriers to Entry Sources Economies of Scale Economies of Scope Product Differentiation Capital Requirements Cost Disadvantages
– Independent of Size Distribution Channel Access Government Policy
Four Generic ApproachesFour Generic ApproachesWin
Win
Lose
Lose
Win/Win Win/Lose orCooperative Equilibrium
Lose/LoseWin/Lose orCooperative Equilibrium
Lose/LoseLose/Lose Total Industry Profits are Very Low, Zero,
or Negative Industry Revenues are Declining, or, at
best, steady Product Technology is at or past its peak
Structure Defines the Industry War
Win/WinWin/Win
Total Industry Revenues and Profits are Growing Rapidly
Numerous Players of All Sizes Products and Services are not Standardized
Win/LoseWin/Lose Total Industry Revenues and/or Profits are
Constant or are Growing very Slowly Significant Economies of Scale in Production,
Distribution, and/or Promotion Number of Firms Participating in the Industry is
Limited and Stable Individual Participants have, or can obtain,
Information Regarding the Relative Positions of the Players
Structure Defines the Terms Structure Defines the Terms of Competitionof Competition
Wasting Resources – generic advertising rather than focusing on specific
market segments Precipitating Unwanted Warfare
– Causing a full-scale price war when only brand repositioning was necessary
Failing to Anticipate and Adapt to Changes– Following historical patterns– Underspending on Advertising
Structure Defines ManeuverStructure Defines Maneuver
Standard or Dominant Product Emerges Distribution Channels Limit Firm’s Ability
to Determine which Channels to Select Target and Market Niches Become More
Difficult to Defend Substitutes Limit Price Increases which
Requires Increase in Advertising Expenditure
Project ManagementProject Management
Set of Principles, Methods, Tools, Techniques
For the Effective Management of Results-Oriented Work
Utilized in the Context of a Specific and Unique Organizational Environment
VariablesVariables
Cost
Risk
Time
GoalsGoals
Critical Path/PERT Charting Progress Presentation Reports
– Clients and Management Dependencies/Prerequisites/Linkages Variance Analysis Resource Assignments
MSProject Program LinkagesMSProject Program Linkages
Suite: Lotus/Microsoft/WordPerfect– Spreadsheet– Presentation– word processing– Database– Notes– Flowcharting (AllClear or ABC)– Risk Analysis Tool
Project Management IssuesProject Management Issues Learning Curve Requires Understandable
Training Program Drown in Data Entry Loose Perspective in Extent of Project Captured Management Commitment Critical Mass Required Rollups Discipline in Monitoring/Using Plan
Project Management TermsProject Management Terms
Schedule From:– Project Start Date– Project Finish Date
Duration Type:– Resource Driven– Fixed Duration
Constrain Task– Date
Project Management TermsProject Management Terms
Priority– High– Medium– Low
Risk– High– Medium– Low
Project Management TermsProject Management Terms
Relationship with Predecessor:– Finish-to-Start (FS)– Start-to-Start (SS)– Finish-to-Finish (FF)– Start-to-Finish (SF)
Project Management TermsProject Management Terms
Tasks:– Noncritical– Critical– Milestone– Summary– Project Summary
MIS RisksMIS Risks
Creeping User Requirements 80% Excessive Schedule Pressure 65% Low Quality 60% Cost Overruns 55% Inadequate Configuration Controls 50%
Systems Software RisksSystems Software Risks
Long Schedule 70% Inadequate Cost Estimating 65% Excessive Paper Work 60% Error-prone Modules 50% Canceled Projects 35%
Commercial Software RisksCommercial Software Risks
Inadequate User Documentation 70% Low User Satisfaction 55% Excessive Time to Market 50% Harmful Competitive Actions 45% Litigation Expenses 30%
Military Software RisksMilitary Software Risks
Excessive Paperwork 90% Low Productivity 85% Long Schedules 75% Creeping User Requirements 70% Unused or Unusable Software 45%
Contract or Outsourced RisksContract or Outsourced Risks
High Maintenance Costs 60% Friction between Contractor and Client 50% Creeping User Requirements 45% Unanticipated Acceptance Criteria 30% Legal Ownership of Software 20%
End-User Software RisksEnd-User Software Risks
Non-Transferable Applications 80% Hidden Errors 65% Unmaintainable Software 60% Redundant Applications 50% Legal Ownership of Software 20%
– Deliverables
Risk Prevention and ControlRisk Prevention and Control
Creeping User Requirements Schedule Pressure, Long Schedules, and
Excessive Time to Market Cost Overruns Low Quality and Error-Prone Modules High Maintenance Costs
Risk Factors Resistant to Risk Factors Resistant to ControlControl
Excessive Paperwork Inadequate User Documentation Low User Satisfaction Friction Between Clients and Contractors Legal Issues and Litigation Expense
Serious Software RisksSerious Software Risks Inadequate Metrics Inadequate Measurement Excessive Schedule Pressure Management Malpractice Inaccurate Cost Estimating Silver Bullet Syndrome Creeping User Requirements Low Quality Low Productivity Canceled Projects
Risk Factors to DefineRisk Factors to Define
Definition Severity Frequency Occurrence Susceptibility and Resistance Root Causes Associated Problems
Risk Factors to DefineRisk Factors to Define
Cost Impact Methods of Prevention Methods of Control Product Support Consulting Support Education Support Publication Support
Risk Factors to DefineRisk Factors to Define
Periodical Support Standards Support