CHAPTER 10 & 13 IS within the Organization & Acquiring IS and Applications

Announcements Assignments: Quiz 2 – Next Tues. Scenario Manager Project 6 – due Next Thurs.

CHAPTER OUTLINE 10.1 Transaction Processing Systems 10.2 Functional Area Information Systems 10.3 Enterprise Resource Planning Systems 10.4 Reports

Opening Case: Is Baseball a Science? Source: Fotoline/Shutterstock

10.1 Transaction Processing Systems (TPS) Types of Data Processing: Monitors, collects, stores and processes data generated from transactions. (Don’t forget the cover sheet) Example: This grocery store clerk is using a bar code scanner that produces data captured by a transaction processing system © Stockbroker/Age Fotostock America, Inc.

How Transaction Processing Systems Manage Data

10.2 Functional Area Information Systems Functional Area IS are designed to support a functional area by increasing its internal effectiveness and efficiency in the following areas: Accounting Finance Marketing Operations (POM) Human Resources Management

Examples of Information Systems Supporting the Functional Areas

10.3 Enterprise Resource Planning Systems (ERP) Information Silos ERP systems integrate the functional areas of the organization by enabling seamless information flows across them. © Toh Kheng Ho/Age Fotostock America, Inc. FINANCEFINANCE HRHR MKTGMKTG ITIT

SAP Modules (aka “Solutions”) SAP Solutions: Financials Human Resources Customer Relationship Management Supplier Relationship Management Product Lifecycle Management Supply Chain Management Business Intelligence Chapter 11

Benefits of ERP Systems

Limitations of ERP Systems

10.4 Functional Area Information Systems Reports Routine reports Ad hoc (on demand) reports Drill-down reports Key-indicator reports Comparative reports Exception reports

Case – Managing ERP Describe what it means for an ERP system to be inflexible. Describe the pros and cons of tailoring your organization’s business processes to align with the procedures in an ERP system.

CHAPTER 13 Acquiring Information Systems and Applications

CHAPTER OUTLINE 13.1 Planning for and Justifying IT Applications 13.2 Strategies for Acquiring IT Applications 13.3 The Traditional Systems Development Life Cycle 13.4 Alternative Methods and Tools for Systems Development 13.5 Vendor and Software Selection

13.1 Planning for and Justifying IT Applications Organizations must analyze the need for the IT application. Each IT application must be justified in terms of costs and benefits.

Information Systems Planning

Information Systems Planning: Organization Strategic Plan and Current IT Architecture the firm’s overall mission how the org should use info resources to accomplish mission Includes: Technical Aspects Managerial aspects

Information Systems Planning: IS Strategic Plan Long range goals that describe the IT infrastructure and identify IT initiatives. Must meet three objectives: Alignment with organizational strategic plan Architecture must seamlessly network users and applications Efficiently allocate IS development resources

Information Systems Planning: IS Operational Plan Contains the following elements: Mission IT environment Objectives of the IT function Constraints of the IT function Application portfolio Resource allocation and project management

Evaluating & Justifying IT Investment: Benefits, Costs & Issues Assessing the costs Assessing the benefits (Values)

Conducting the Cost-Benefit Analysis Using Net Present Value (NPV) Return on investment Breakeven analysis

13.2 Strategies for Acquiring IT Applications Four fundamental business decisions to make before choosing a strategy: 1) How much computer code does the company want to write? 2) How will the company pay for the application? 3) Where will the application run? 4) Where will the application originate?

Strategies for Acquiring IT Applications Purchase a Prewritten Application Customize a Prewritten Application Lease the applications Application Service Providers Software-as-a-Service Vendors Use Open-Source Software Outsourcing Custom Development

13.3 Traditional Systems Development Life Cycle Software Development Life Cycle (SDLC) 1. Systems Investigation 2. Systems Analysis 3. Systems Design 4. Programming and Testing 5. Implementation 6. Operation and Maintenance Investigation Analysis Design Programming/ Testing Implementation Operation & Maintenance

SDLC – Systems Investigation Begins with the business problem (or opportunity) followed by the feasibility analysis. Deliverable: Investigation Analysis Design Programming/ Testing Implementation Operation & Maintenance

SDLC – System Analysis The examination of the business problem that the organization plans to solve with an information system. Main purpose: Deliverable: Investigation Analysis Design Programming/ Testing Implementation Operation & Maintenance Existing System New/Improved System

SDLC – Systems Design Describes how the system will accomplish this task. Deliverable: technical design specifying: System outputs, inputs, user interfaces. Hardware/software, database, telecommunications, personnel & procedures. Blueprint of how these components are integrated. Investigation Analysis Design Programming/ Testing Implementation Operation & Maintenance

SDLC – System Design (continued) Scope creep

SDLC – Programming & Testing Programming involves the translation of a system’s design specification into computer code. Testing checks to see if the computer code will produce the expected and desired results under certain conditions. Testing is designed to delete errors (bugs) in the computer code. Investigation Analysis Design Programming/ Testing Implementation Operation & Maintenance

SDLC – Systems Implementation The process of converting from the old to the new system Major conversion strategies: Investigation Analysis Design Programming/ Testing Implementation Operation & Maintenance

SLDC – Operation & Maintenance Audits are performed to assess the system’s capabilities and to determine if it is being used correctly. Types of maintenance: Investigation Analysis Design Programming/ Testing Implementation Operation & Maintenance

13.4 Alternative Methods and Tools for Systems Development Joint application design (JAD) Rapid application development (RAD) Agile development

13.5 Vendor & Software Selection Step 1: Identify potential vendors. Step 2: Determine the evaluation criteria. Request for proposal (RFP) Step 3: Evaluate vendors and packages. Step 4: Choose the vendor and package Step 5: Negotiate a contract. Step 6: Establish a service level agreement.

Chapter 10 Review Explain the purposes of transaction processing systems, and provide at least one example of how businesses use these systems.

Chapter 10 Review (continued) Define functional area information systems, and provide an example of the support they provide for each functional area of the organization.

Chapter 10 Review (continued) Explain the purpose of enterprise resource planning systems. Identify advantages & drawbacks to implementing an ERP system.

Chapter 10 Review (continued) Discuss the three major types of reports generated by the functional area information systems and enterprise resource planning systems.

Define an IS strategic plan, identify three objectives it must meet, and describe one common approach to cost-benefit analysis. Chapter 13 Review

Discuss the four business decisions that companies must make when they acquire new applications.

Chapter 13 Review Identify the six processes involved in the systems development life cycle, and explain the primary tasks and importance of each process.

Chapter 13 Review Analyze the process of vendor and software selection. Step 1: Identify potential vendors. Step 2: Determine the evaluation criteria (RFP) Step 3: Evaluate vendors and packages. Step 4: Choose the vendor and package Step 5: Negotiate a contract. Step 6: Establish a service level agreement