Chapter 13 Chapter 13: Building Information Systems Building Information Systems

Management Information Systems Management Information Systems
MANAGING THE DIGITAL FIRM, 12TH EDITION CHAPTER 13: BUILDING INFORMATION SYSTEMS
Learning Objectives
Chapter 13 • How does building new systems produce

organizational change?
BUILDING INFORMATION SYSTEMS • What are the core activities in the systems
development process?
• What are the principal methodologies for modeling
and designing systems?
VIDEO CASES • What are the alternative methods for building
Case 1: IBM: Business Process Management in a Service‐Oriented Architecture information systems?
and Managing Projects
Case 2: Rapid Application Development With Appcelerator • What are new approaches for system building in the
Instructional Video 1: Salesforce and Google: Developing Sales Support Systems with
Online Apps d
digital
l ffirm era?
2 © Prentice Hall 2011

CHAPTER 13: BUILDING INFORMATION SYSTEMS CHAPTER 13: BUILDING INFORMATION SYSTEMS
CIMB Group Redesigns Its Account Opening Process Systems as Planned Organizational Change
• Problem: Financial services provider CIMB group • Structural organizational changes enabled by IT
wanted to improve efficiency in business processes, 1. Automation
specifically process of opening accounts at branch
• Increases efficiency
• Solutions: ARIS BPM tool used to identify 25 areas
p
for improving g efficiency.
y Utilized Malaysia’s
y • Replaces manual tasks
government ID smart card to automate inputting 2. Rationalization of procedures
customer data, reducing time spent by 50% • Streamlines standard operating procedures
• Demonstrates the use of information systems to • Often found in programs for making continuous
streamline and redesign business processes quality improvements
• Illustrates first key step in building new system − – Total quality management (TQM)
analysis
l i – Six
Si sigma
i
3 © Prentice Hall 2011 4 © Prentice Hall 2011

Systems as Planned Organizational Change Systems as Planned Organizational Change
ORGANIZATIONAL
• Structural organizational changes enabled by IT CHANGE CARRIES
RISKS AND
3. Business process redesign REWARDS
• Analyze,
Analyze simplify
simplify, and redesign business The most common forms of
organizational change are
processes automation and rationalization.
These relatively slow‐moving
• Reorganize
R i workflow,
kfl combine
bi steps, eliminate
li i and d slow‐changing
l h i strategies
t t i
present modest returns but
little risk. Faster and more
repetition comprehensive change—such
as redesign and paradigm
4. Paradigm shifts shifts—carries high rewards
but offers substantial chances
of failure.
• Rethink nature of business FIGURE 13‐1
• Define new business model

• Change
Ch nature off organization
i i


AS‐IS BUSINESS PROCESS FOR PURCHASING A BOOK FROM A PHYSICAL BOOKSTORE
• Business process management (BPM)
– Variety of tools, methodologies to analyze, design,
optimize processes
– Used by firms to manage business process redesign
• Steps in BPM
1.Identify processes for change
2.Analyze existing processes
3 Design the new process
3.Design
4.Implement the new process FIGURE 13‐2 Purchasing a book from a physical bookstore requires many steps to be performed by both the seller and
the customer.
c stomer
5.Continuous measurement

REDESIGNED PROCESS FOR PURCHASING A BOOK ONLINE
• Variety of tools for BPM, to
– Identify and document existing processes
• Identify inefficiencies
– Create models of improved processes
– Capture and enforce business rules for performing
processes
– Integrate existing systems to support process
improvements
– Verify
V if that
th t new processes hhave improved
i d
FIGURE 13‐3 Using Internet technology makes it possible to redesign the process for purchasing a book so that it requires – Measure impact of process changes on key business
fe er steps and consumes
fewer cons mes fewer
fe er resources.
reso rces
performance
f iindicators
di

Systems as Planned Organizational Change Overview of Systems Development
CAN BUSINESS PROCESS MANAGEMENT MAKE A DIFFERENCE?

Read the Interactive Session and discuss the following questions
• Systems development:
• Why are large companies such as AmerisourceBergen and
– Activities that go into producing an information
y
system solution to an organizational
g problem
p or
Di b ld good
Diebold d candidates
did t for
f b business
i process management? t?
opportunity
• What were the business benefits for each company from
redesigning and managing their business processes? 1 Systems analysis
1.Systems
• How did BPM change the way these companies ran their 2.Systems design
businesses? 3.Programming
• What might be some of the problems with extending BPM 4.Testing
. est g
software across a large number of business processes?
5.Conversion
p
• What companies stand to ggain the most byy implementing
p g
BPM? 6 P d i and
6.Production d maintenance
i
Overview of Systems Development Overview of Systems Development
THE SYSTEMS
DEVELOPMENT
• Systems analysis
PROCESS
– Analysis of problem to be solved by new system
Building a system can be
broken down into six core • Defining the problem and identifying causes
activities.
• Specifying solutions
FIGURE 13‐4
– Systems proposal report identifies and examines alternative
solutions
• Identifying information requirements
– Includes feasibility study
• IIs solution
l ti ffeasible
ibl and
d good d iinvestment?
t t?
• Is required technology, skill available?

• System analysis (cont.) • Systems design

– Establishing information requirements – Describes system specifications that will deliver
functions identified during systems analysis
• Who
Wh needs d what
h t iinformation,
f ti where,
h when,
h
– Should address all managerial, organizational, and
and how g
technological components
p of system
y solution
• Define objectives of new/modified system
– Role of end users
• Detail the functions new system
y must perform
p • User information req
requirements
irements dri
drivee ssystem
stem b
building
ildin
– Faulty requirements analysis is leading cause of • Users must have sufficient control over design process to
systems failure and high systems development ensure system reflects their business priorities and
cost information needs
g effort is major
• Insufficient user involvement in design j cause
of system failure
OUTPUT PROCESSING DOCUMENTATION • Programming:

Medium Computations Operations documentation
Content
Timing
Program modules
Required reports
Systems documents
User documentation
– System specifications from design stage are
INPUT
Timing of outputs
CONVERSION translated into software program code
Origins MANUAL PROCEDURES Transfer files
Flow
Data entry
What activities
Who performs them
Initiate new procedures
Select testing method • Testing
When Cut over to new system
USER INTERFACE
Simplicity
H
How
TRAINING
– Ensures system produces right results
Where
Efficiency Select training techniques
Logic
Feedback
CONTROLS
Input
p controls ((characters,, limit,, reasonableness))
Develop training modules
Identifyy training
g facilities
– Unit testing: Tests each program in system separately
Errors Processing controls (consistency, record counts)
DATABASE DESIGN
Output controls (totals, samples of output)
ORGANIZATIONAL CHANGES
Task redesign
– System testing: Test functioning of system as a whole
Procedural controls (passwords, special forms)
Logical data model Job redesign
Volume and speed SECURITY Process design – Acceptance testing: Makes sure system is ready to be
requirements Access controls Organization structure design
File organization and Catastrophe plans Reporting relationships used in production setting
design Audit trails
Record specifications
– Test plan: All preparations for series of tests


A SAMPLE TEST PLAN TO TEST A RECORD CHANGE
• Conversion
– Process of changing from old system to new system
– Four main strategies
1. Parallel strategy
2. Direct cutover
3. Pilot study
4. Phased approach
– Requires end‐user training
– Finalization of detailed documentation showing how
system works from technical and end‐user
FIGURE 13‐5 When developing a test plan,
plan it is imperative to include the various conditions to be tested
tested, the standpoint
requirements for each condition tested, and the expected results. Test plans require input from both end
users and information systems specialists.
SUMMARY OF SYSTEMS DEVELOPMENT ACTIVITIES

• Production and maintenance CORE ACTIVITY DESCRIPTION
Systems analysis Identify problem(s)
– System reviewed to determine if revisions needed Specify solutions
Establish information requirements
– May include post‐implementation
post implementation audit document Systems design Create design specifications
– Maintenance Programming Translate design specifications into

• Changes
h in h
hardware,
d software,
f d
documentation, or code
d
procedures to a production system to correct errors, Testing Unit test

Systems test
meet new requirements
requirements, or improve processing Acceptance test
efficiency Conversion Plan conversion

Prepare documentation
– 20% debugging, emergency work Train users and technical staff
– 20% changes to hardware, software, data, reporting Production and Operate the system
maintenance Evaluate the system
– 60% of work: User enhancements, improving documentation, Modify the system
recoding for greater processing efficiency


• Most prominent methodologies for modeling and • Data flow diagram:

designing systems: – Primary tool for representing system’s component
1. Structured methodologies processes and flow of data between them
– Offers logical graphic model of information flow
2. Object‐oriented development
– High‐level
g and lower‐level diagrams
g can be used to break
• Structured methodologies processes down into successive layers of detail
– Structured: Techniques are step
step‐by‐step
by step, progressive • Data dictionary: Defines contents of data flows and data stores
– Process‐oriented: Focusing on modeling processes • Process specifications: Describe transformation occurring
or actions that manipulate data within lowest level of data flow diagrams
– Separate data from processes • Structure chart: Top‐down chart, showing each level of design,
relationship to other levels
levels, and place in overall design structure

DATA FLOW DIAGRAM FOR MAIL‐IN UNIVERSITY REGISTRATION SYSTEM HIGH‐LEVEL STRUCTURE CHART FOR A PAYROLL SYSTEM
FIGURE 13‐6 The system has three processes: Verify availability (1.0), Enroll student (2.0), and Confirm registration (3.0). FIGURE 13‐7 This structure chart shows the highest or most abstract level of design for a payroll system, providing an
The name and content of each of the data flo
flowss appear adjacent to each arro
arrow. There is one eexternal
ternal entit
entity o er ie of the entire ssystem.
overview stem
in this system: the student. There are two data stores: the student master file and the course file.

CLASS AND
• Object‐oriented development INHERITANCE
– Object is basic unit of systems analysis and design This figure illustrates how
classes inherit the common
• Object: features of their superclass.
superclass
– Combines data and the processes that operate on those data FIGURE 13‐8
– Data encapsulated in object can be accessed and modified

only by operations, or methods, associated with that object
– Object‐oriented modeling based on concepts of class
and inheritance
• Objects belong to a certain class and have features of that
class
ay inherit
• May e t structures
st uctu es and
a d behaviors
be a o s of
o a more
o e general,
ge e a ,
ancestor class
• Object‐oriented development • Computer‐aided software engineering (CASE)

– More iterative and incremental than traditional – Software tools to automate development and reduce
p
structured development p
repetitive work,, includingg
• Systems analysis: Interactions between system and users • Graphics facilities for producing charts and diagrams
analyzed to identify objects • p ggenerators, reporting
Screen and report p g facilities
• Design phase: Describes how objects will behave and • Analysis and checking tools
interact; grouped into classes, subclasses and hierarchies • Data dictionaries
• Implementation: Some classes may be reused from existing • Code and documentation generators
library of classes, others created or inherited
– Support iterative design by automating revisions and
– Because objects are reusable, object‐oriented changes and providing prototyping facilities
development can potentially reduce time and cost of
d l
developmentt – Require organizational discipline to be used effectively

Alternative Systems Building Approaches Alternative Systems Building Approaches
• Alternative Systems‐Building
y g Methods • Traditional systems lifecycle:
– Oldest method for building information systems
– Traditional systems life‐cycle
– Phased approach divides development into formal
– Prototyping stages
– End‐user
End user development • Follows “waterfall”
waterfall approach: Tasks in one stage finish
before another stage begins
– Application
pp software packages
p g – Maintains formal division of labor between end users
– Outsourcing and information systems specialists
– Emphasizes formal specifications and paperwork
– Still used for building large complex systems
– Can be costly, time‐consuming, and inflexible
THE PROTOTYPING
• Prototyping PROCESS
– Building experimental system rapidly and The process of developing a prototype
can be broken down into four steps.
p y for end users to evaluate
inexpensively Because a prototype can be developed
quickly and inexpensively, systems
– Prototype: Working but preliminary version of builders can go through several
iterations, repeating steps 3 and 4, to
information system refine and enhance the p prototype
yp before
arriving at the final operational one.
• Approved prototype serves as template for final system FIGURE 13‐9
– Steps
S in
i prototyping
i
1. Identify user requirements
2. Develop initial prototype
3. Use prototype
4. Revise and enhance prototype

• Advantages of prototyping • End‐user development:

– Useful if some uncertainty in requirements or design – Uses fourth‐generation languages to allow end‐users
solutions to developp systems
y with little or no help
p from
– Often used for end‐user interface design technical specialists
– More
M lik
likely
l to ffulfill
lfill end‐user
d requirements
i – Fourth generation languages: Less procedural than
conventional programming languages
• Disadvantages
g • PC software tools
• Query languages
– May gloss over essential steps • Report generators
– May not accommodate large quantities of data or • G hi llanguages
Graphics
• Application generators
large number of users • Application
pp software p
packages
g
• May not undergo full testing or documentation • Very high‐level programming languages
• End‐user development (cont.): • Application software packages

– Advantages: – Save time and money
• More rapid
p completion
p of projects
p j – Many offer customization features:
• High‐level of user involvement and satisfaction • Software can be modified to meet unique requirements without
destroying integrity of package software
– Disadvantages:
– Evaluation criteria for systems analysis include:
• Not designed for processing‐intensive applications
• Functions provided by the package, flexibility, user friendliness,
q
• Inadequate management
g and control,, testing,
g, hardware and software resources,
resources database requirements,
requirements
documentation installation and maintenance efforts, documentation, vendor
• Loss of control over data quality, and cost
– Managing end‐user development – Request for Proposal (RFP)

• Require
q cost‐justification
j of end‐user system
y projects
p j • Detailed list of questions submitted to packaged‐software vendors
• Used
U d to evaluate
l alternative
l i software
f packages
k
• Establish hardware, software, and quality standards

• Outsourcing • Outsourcing (cont.)

– Several types – Advantages
• Cloud and SaaS providers • Allows
All organization
i ti fl flexibility
ibilit iin IT needs
d
– Subscribing companies use software and computer hardware
provided byy vendors
p – Disadvantages
• External vendors • Hidden costs, e.g.
– Hired to design,
g , create software – Identifying and selecting vendor
– Domestic outsourcing
– Transitioning to vendor
» Driven by firms need for additional skills, resources,
assets • Opening
O i up proprietary
i business
b i processes to
– Offshore outsourcing third party
» Driven by cost‐savings

Alternative Systems Building Approaches Application Development for the Digital Firm
TOTAL COST OF OFFSHORE OUTSOURCING
• Rapid application development (RAD)
– Process of creating workable systems in a very short
period of time
p
– Utilizes techniques such as:
• Visual programming and other tools for building
graphical user interfaces
• Iterative prototyping of key system elements
• Automation of p
program
g code generation
g
FIGURE 13‐10 If a firm spends $10 million on offshore outsourcing contracts, that company will actually spend 15.2
• Close teamwork among end users and information
percent in extra costs even under the best‐case scenario. In the worst‐case scenario,, where there is a
p
dramatic drop in productivity along with exceptionally high transition and layoff costs, a firm can expect to
systems specialists
pay up to 57 percent in extra costs on top of the $10 million outlay for an offshore contract.

Application Development for the Digital Firm Application Development for the Digital Firm
• Joint application design (JAD) • Agile development

– Used to accelerate generation of information – Focuses on rapid delivery of working software by
requirements and to develop initial systems breakingg large
g pproject
j into several small sub‐projects
p j
design – Subprojects
– Brings
i endd users and d iinformation
f i systems • TTreated
t d as separate,
t complete
l t projects
j t
specialists together in interactive session to • Completed in short periods of time using iteration and
di
discuss system’s’ ddesign
i continuous feedback
– Emphasizes face‐to‐face communication over written
– Can significantly
g y speed
p upp design
g pphase and
d
documents,
t allowing
ll i collaboration
ll b ti and d faster
f t
involve users at intense level decision making

Application Development for the Digital Firm
• Component‐based development
– Groups of objects that provide software for common
functions ((e.g.,
g , online ordering)
g) and can be combined to
create large‐scale business applications
– Web services
• Reusable software components that use XML and open Internet All rights reserved. No part of this publication may be reproduced, stored
standards (platform
p independent)
p in a retrieval system, or transmitted, in any form or by any means,
• Enable applications to communicate with no custom electronic, mechanical, photocopying, recording, or otherwise, without the
programming required to share data and services prior written permission of the publisher.
• Can
C engage otherth W Web b services
i ffor more complex
l ttransactions
ti P i t d iin th
Printed the U
United
it d St
States
t off A
America.
i
• Using platform and device‐independent standards can result in Copyright © 2011 Pearson Education, Inc.
significant cost
cost‐savings
savings and opportunities for collaboration with
P bli hi as Prentice
Publishing P ti HallH ll
other companies

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Management Information Systems Management Information Systems

Chapter 13 • How does building new systems produce

Management Information Systems Management Information Systems

3 © Prentice Hall 2011 4 © Prentice Hall 2011

Systems as Planned Organizational Change Systems as Planned Organizational Change

• Define new business model

Management Information Systems Management Information Systems

Systems as Planned Organizational Change Systems as Planned Organizational Change

Systems as Planned Organizational Change Systems as Planned Organizational Change

Management Information Systems Management Information Systems

Systems as Planned Organizational Change Overview of Systems Development

CAN BUSINESS PROCESS MANAGEMENT MAKE A DIFFERENCE?

Overview of Systems Development Overview of Systems Development

13 © Prentice Hall 2011 14 © Prentice Hall 2011

Management Information Systems Management Information Systems

Overview of Systems Development Overview of Systems Development

• System analysis (cont.) • Systems design

Overview of Systems Development Overview of Systems Development

OUTPUT PROCESSING DOCUMENTATION • Programming:

Management Information Systems Management Information Systems

Overview of Systems Development Overview of Systems Development

Overview of Systems Development Overview of Systems Development

SUMMARY OF SYSTEMS DEVELOPMENT ACTIVITIES

– Maintenance Programming Translate design specifications into

procedures to a production system to correct errors, Testing Unit test

efficiency Conversion Plan conversion

recoding for greater processing efficiency

Management Information Systems Management Information Systems

Overview of Systems Development Overview of Systems Development

• Most prominent methodologies for modeling and • Data flow diagram:

Overview of Systems Development Overview of Systems Development

25 © Prentice Hall 2011 26 © Prentice Hall 2011

Management Information Systems Management Information Systems

Overview of Systems Development Overview of Systems Development

– Data encapsulated in object can be accessed and modified

Overview of Systems Development Overview of Systems Development

• Object‐oriented development • Computer‐aided software engineering (CASE)

29 © Prentice Hall 2011 30 © Prentice Hall 2011

Management Information Systems Management Information Systems

Alternative Systems Building Approaches Alternative Systems Building Approaches

Alternative Systems Building Approaches Alternative Systems Building Approaches

• Approved prototype serves as template for final system FIGURE 13‐9

Management Information Systems Management Information Systems

Alternative Systems Building Approaches Alternative Systems Building Approaches

• Advantages of prototyping • End‐user development:

Alternative Systems Building Approaches Alternative Systems Building Approaches

• End‐user development (cont.): • Application software packages

– Managing end‐user development – Request for Proposal (RFP)

Management Information Systems Management Information Systems

Alternative Systems Building Approaches Alternative Systems Building Approaches

• Outsourcing • Outsourcing (cont.)

39 © Prentice Hall 2011 40 © Prentice Hall 2011

41 © Prentice Hall 2011 42 © Prentice Hall 2011

Management Information Systems Management Information Systems

• Joint application design (JAD) • Agile development

43 © Prentice Hall 2011 44 © Prentice Hall 2011

Application Development for the Digital Firm

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