management information systems: solving business problems with information technology part one:...
TRANSCRIPT
Management Information Systems:
Solving Business Problems with Information Technology
Part One:Business OperationsChapter Two:Information TechnologyFoundations Information TechnologyFoundations
Prof. Gerald V. PostProf. David L. Anderson
Transaction Processing Transaction Processing SystemSystem
Input OutputProcess
Information
Communication
Systems Development
Marketplace DemandsMarketplace Demands
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 “Phase”Systems Maintenance “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.
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.
Marketing Model ComponentsMarketing Model Components
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
Peter Keen’s ProjectionsPeter Keen’s Projections
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
Planning and Linkage AnalysisPlanning and Linkage Analysis
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
Mead’s Information Resources Driven OrganizationMead’s Information Resources Driven Organization
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 Distributed SystemsMurray’s Eight Phases to 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.
Michael Porter’s Michael Porter’s Five Competitive Forces ModelFive Competitive Forces Model 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 also According to Naisbitt and Aburdene, Changes also Occur in Traditional EnvironmentsOccur 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 Applies Information Federal Express Applies Information Technology to Compete on Quality and Technology to Compete on Quality and
Tracking InformationTracking Information
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
Five Roles of the Systems Department in Five Roles of the Systems Department in Business ReengineeringBusiness Reengineering
(Index Foundation)(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
Michael Hammer Michael Hammer Reengineering PrinciplesReengineering Principles
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 AnalysisElements of a Good Analysis
Financial/Strategic Analysis Implementation/Methodology Measurable/Expected Results Future Growth/Continual Development HR Implications/People Core Competencies/Critical Service Factor Target Market Segment
Two Frameworks for Distributed Two Frameworks for Distributed SystemsSystems
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 Consider Four Forces Causing Management to Consider Reengineering the Way their Business WorksReengineering the Way 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 DocumentationFour Types of Documentation
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
Cyclical NatureCyclical NatureIdentify Classes
and Objects
Identify Class andObject Semantics
Specify Class andObject Interfaces
and Implementation
Identify Class andObject
Relationships
CLIENT
Customer Value Chain
What is Produced/ Provided To Me (inputs)
What I Do (process)
What I Produce (Outputs)
Who I Produce It For (Customers)
Computer Hardware and Software Local Area Network Installations
Implement Technology to Accomplish Strategic Goals
Working Models
Practice AreaInformation
Margin
Margin
Customer Value ChainCustomer Supply Chain
Firm Infrastructure
Human Resource Management
Technology Development
Procurement
Inbound Logistics Operations
Outbound Logistics
Marketing & Sales
Marketing Management
AdvertisingSales Force Admin.
Sales Force Oper.
Promotion
Service
Technical Literature
Grower Jobber$8.00
Wholesaler$12.00
Florist$24.00
Customer
$60.00
Customer
$54.00
The Distribution ChainThe Distribution Chain
Potential Entrants
Suppliers
Industry Competitors
Rivalry Among Existing Firms
Buyers
Substitutes
Bargaining power of suppliers
Threat of new entrants
Bargaining power of buyers
Threat of substitute products or services
Five Forces Model
Competitive Strategy of Differentiation
Competitive Advantage
Competitive Scope
Broad Target
Narrow Target
Lower Cost Differentiation
1. Cost Leadership
2. Differentiation
3A. Focus on Cost
3B. Focus on Differentiation
ProductChange
Process Change
Dynamic
Stable
Stable Dynamic
Mass Customization Invention
Mass Production Continuous Improvement
Product-Process Change Matrix
• “Brochurized” web site
• Basic product/ plan information
• Limited interactivity
• No web site stickiness
Publish
• Physician and facility locators, services information
• Searchable and customized health content
• How-to-contact us communications
• Very early community building
Interact Transact
• Member-focused portal: loyalty building
• Prevention and health assessment tools
• Community building
• Web site stickiness
• Business process
• Automation: procurement, integrated directory
Integrate
• EDI to iCommerce Transition
• Self-service functionality
• Automated vendor supply chain management
• Call center replaced with contact center
Transform
•Mass customization
• Integrated Disease Management
• Empowered consumers and self-directed care
• Frictionless integration with providers, pharma & suppliers
S T A G E S
Value Curve
Lag
gard
s
Maj
orit
y
Lea
der
s
Internet Development Continuum