paradigm shift

Paradigm Shift

I. Computing Paradigm Shift

II. Business Paradigm Shift

Dr. Chen, The Challenge of the Information Systems Technology TM -TM -11

I. Computing paradigm

Users

Networks

Computers Networks

Users

Computers

II. Business Paradigm Shift

Open Systems

Proprietary Systems Mainframes

New Enterprise, Expert Systems

BPR, Paperless Office

Automated Enterprise,

Back Office Automation

On-Line Transaction Processing

Legacy Enterprise, Manual Back Office

Manual Front Office

Client/Server, MultimediaDistributed ComputingObject-Orientation

1970s

1960s

1980s

1990s

and Beyond

Chapter 2Manageable Trends

• Strategic Impact of IT• Integrating Changing Technology Platforms• Assimilating Emerging Technologies• Sourcing Policies for the IT Value Chain• Applications Development Process• Partnership of Three Constituencies

Dr. Chen, The Trends of the Information Systems Technology TM -4

N

Theme 1: Strategic Impact

• Operational/manufacturing impacts– cost– coping with complexity– coordination– integration of technology into product

• Marketing impacts– choice of product– service (e.g., order confirmation, tracking)– value-added information– product customization


Defense

Consulting

Banks Airlines

Retail

Paper

High

fashion

HighLow

High

Low

Figure 2-1 IT Impact: Position of Industry Leaders

Information technology impact on marketing (customer focus, reaction to change, provision

of differentiation. Etc.)

Information technology impact

on operations (cost/complexity management, coordination,

integration, etc.)


CI

SW

CHEM AA

UA Citi

HighLow

High

Low

Figure 2-2 IT Impact: Position of Key Players in Airlines and Banks

Information technology impact on marketing (customer focus.)

Information technology impact on

operations

Key:AA - American Airlines

UA - United Airlines

Citi - First National Citibank

CHEM - Chemical Bank of NY

CI - Continental Illinois

SW - Southwest Airlines


HighLow

Low

Marketing gap vs. industry leader

Ope

ratio

ns g

ap v

s.

indu

stry

lead

erFigure 2-3 Targeting IT-Based Investment (as Compared with Industry Leaders

Increase integrative capacity

Catch up

Maintain advantage

Increase flexibility, responsiveness/

Differentiate products and

services

A Contingency Approach to IT Use

What four competitive investment strategies used when organizations are comparing their positions with industry leaders?

High


• What four IT environments are created by variation in strategic impact of existing systems and strategic impact of the applications development portfolio?

Hig

h

Factory Strategic

Exi

stin

gA

pp

lica

tion

s

Lo

w Support Turnaround

Low High

Future Applications

A Contingency Approach to IT ManagementA Contingency Approach to IT Management


POLICIES

INFORMATION

TECHNOLOGY

STRATEGIES

Theme 2: Integrating Changing Technology PlatformsTheme 2: Integrating Changing Technology Platforms

How to Capitalize on the real Business Opportunities?

Integrating ...Integrating ...

ORGANIZATION


Who should be Involved in the Project Development?

TM -TM -1111

Consists of ...Consists of ...

PROJECT PROJECT MEMBERSMEMBERS

TECHNICAL TECHNICAL PROFESSIONALSPROFESSIONALS

USERSUSERS

MANAGEMENTMANAGEMENT

Dr. Chen, The Trends of the Information Systems Technology

Theme 2: Integrating Changing Technology Platforms

• Advances in – Processing power– Data storage– Communications

• Integration of – Computing– Telecommunications– Office support – Broadcasting

• Reasons– Physical interconnections– Development involves multiple technologies– Opportunities for integration

Dr. Chen, The Trends of the Information Systems TechnologyTM -12

Theme 3: Assimilating Emerging Technologies

• Phase 1: Technology Identification and Investment– Identify technology of interest – Pilot project (usually in IT) to test

• Phase 2: Technological Learning and Adaptation– Users test technology in pilot projects– Will the technology make us more effective?

• Phase 3: Rationalization / Management Control– Develop support systems and controls for efficient use of

technology• Phase 4: Maturity / Widespread Technology Transfer

– Spread technology throughout the organization

1. Innovation (Technical-oriented)

2. Learning(User-oriented)

3. Rationalization

4. Maturity

Dr. Chen, The Trends of the Information Systems Technology TM -13N

Theme 4: Sourcing Policies for the IT Value Chain

What is outsourcing?


• The phenomenon that appeared in the information systems field in the late 1980s was outsourcing, which means turning over a firm's computer operations, network operations, or perhaps other information systems functions to a vendor for a specified time - generally, at least for three years.

OUTSOURCING

CONTRACTING:• COMPUTER CENTER OPERATIONS• TELECOMMUNICATIONS NETWORKS• APPLICATION DEVELOPMENT

TO EXTERNAL VENDORS

*


Why Outsoucing?

• Outsourcing has become an option that most CIOs need to consider to satisfy their management that their operation is being run efficiently, effectively, and economically


The Driving Forces Behind Outsourcing

• Two drivers – focus

on core business

– value shareholder


Outsourcing As an Economic Strategy

• Core competencies

• Which sources are less expensive

• How much control is needed


The Expanding Scope of Vendor Options

To buy professional servicesTo buy a productTo buy a transactionTo use a systems integrator - project basedOutsourcing - time based

Quality Products/ServicesSpeedCost


When to Outsourcing?• Which IS activities are strategic to our

company's business?

• Will outsourcing save us at least 15 percent?

• Does our firm have access to the needed technology and expertise?– If not, outsourcing may be the answer to acquiring

these resources.

• Does outsourcing increase our firm's flexibility?


What Activities that Management should not Outsource?

• strategy • policy role• the decisions about when to introduce

information systems into the organization• the management of the vendor• when the system (IS) department is well

managed, and where IT is a core competency


OUTSOURCING BENEFITS

• Economy• Service quality• Predictability• Flexibility• Making fixed cost variable• Freeing up human resources for other projects• Freeing up financial capital


CONS OF OUTSOURCING

• Loss of control

• Vulnerability of strategic information

• Dependency


Outsourcing Recommendations

• Write shorter contracts - less than 5 years

• Subcontract control

• Selective outsourcing


Desirable Outcomes and Implementation Issues

• On-time• On-budget• Full functionality• user acceptance• Favorable cost-to-benefits ratio• Low maintenance• Scalability• Integration with other systems• Reusability


Theme 4: Sourcing Policies for the IT Value Chain

• Why Make?– Custom to needs– Confidentiality– Insulate from external vulnerability– Easy to adapt– Leading-edge competence

• Why Buy?– Access to specialized skills– Cost– Staff utilized for most important products– Personnel costs– “Professional” management of service organization– Proliferation of services available


Theme 5: Applications Development Process

• SYSTEM SYSTEM DEVELOPMENT DEVELOPMENT PROCESS LIFE PROCESS LIFE CYCLE (CYCLE (SDLC))


• SYSTEMS ANALYSIS

• SYSTEM DESIGN

• PROGRAMMING

• TESTING

• CONVERSION

• PRODUCTION & MAINTENANCE

*

SYSTEM DEVELOPMENTSYSTEM DEVELOPMENT(Life Cycle) PROCESS (Life Cycle) PROCESS

Dr. Chen, The Challenge of the Information Systems Technology TM -30

SYSTEMS DEVELOPMENTSYSTEMS DEVELOPMENT

CORE ACTIVITYCORE ACTIVITY DESCRIPTIONDESCRIPTION

SYSTEMS ANALYSISSYSTEMS ANALYSIS IDENTIFY PROBLEM(S)SPECIFY SOLUTIONSESTABLISH INFORMATION REQUIREMENTS

SYSTEMS DESIGNSYSTEMS DESIGN CREATE LOGICAL DESIGN SPECSCREATE PHYSICAL DESIGN SPECSMANAGE TECHNICAL REALIZATION OF SYSTEM

PROGRAMMINGPROGRAMMING TRANSLATE DESIGN SPECS INTOPROGRAM CODE


SYSTEMS DEVELOPMENTSYSTEMS DEVELOPMENT

CORE ACTIVITYCORE ACTIVITY DESCRIPTIONDESCRIPTION

TESTINGTESTING UNIT TEST SYSTEMS TEST ACCEPTANCE TEST

CONVERSIONCONVERSION PLAN CONVERSION PREPARE DOCUMENTATION TRAIN USERS & TECHNICAL STAFF

PRODUCTION &PRODUCTION & OPERATE SYSTEMMAINTENANCEMAINTENANCE EVALUATE SYSTEM

MODIFY SYSTEM


Theme 5: Applications Development Process

• Design– User request or IT/user proposal– Analysis– (Logical) Design

• Construct– Detailed design– Coding– Documentation– Testing– Acquisition


Theme 5: Applications Development Process (Cont.)

• Implement– Redesign– Install– Train– Systems test

• Operate– Acceptance test– Retrain

• Maintain– “Modernization”– Continuous improvement


Dr. Chen, The Challenge of the Information Systems Technology TM -TM -3535

Consists of ...Consists of ...

ManagementManagement

IT ManagementIT ManagementUSERS USERS ManagementManagement

GENERAL GENERAL ManagementManagement

Theme 6: Partnership of Three Constituencies

Theme 6: Partnership of Three Constituencies

• IT Management– Pool of technical skills– Technology scan– “Professional” development– Process reengineering

• User Management– Movement of operational responsibilities to IT– Availability of outside services– User IT sophistication and experience

• General Management– Must balance IT / User issues– Executives balance IT/strategies


SPECTRUM OF ORGANIZATIONAL CHANGE

AUTOMATION RATIONALIZATION

REENGINEERINGPARADIGM SHIFT

ORGANIZATIONAL CHANGE


SPECTRUM OF ORGANIZATIONAL CHANGE

• AUTOMATION: Using technology to perform tasks efficiently / effectively

• RATIONALIZATION OF PROCEDURES: Streamline SOPs; eliminate bottlenecks

• BUSINESS PROCESS REENGINEERING: Radical redesign of processes to improve cost, quality, service; maximize benefits of technology

• PARADIGM SHIFT


What is Business Process and Business Reengineering?

• Business process: A set of logically related tasks performed to achieved a defined business outcome

• Business reengineering means radically changing how people work - changing business policies and controls, systems and technology, organizational relationships and business practices, and reward programs.


1. Develop business vision, process objectives

2. Identify process to be redesigned

3. Understand, measure performance of existing processes

4. Identify opportunities for applying information technology

5. Build PROTOTYPE of new process

BUSINESS REENGINEERING STEPS:


paradigm shift

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