BTS330: Business Requirements Analysis using OO Discussion: Introduction to Business and the systems that support it

Agenda  What is a Business? –Areas within a business –Organizational roles within a business  What is a System? –Information systems –Flow of information  Projects to implement Business Systems –Initiation and strategic planning –Project success

Business  archaic : purposeful activity : BUSYNESSBUSYNESS  usually commercial or mercantile activity engaged in as a means of livelihood : TRADETRADE  BUSINESS may be an inclusive term but specifically designates the activities of those engaged in the purchase or sale of commodities or in related financial transactions. COMMERCE and TRADE imply the exchange and transportation of commodities. INDUSTRY applies to the producing of commodities, especially by manufacturing or processing, usually on a large scale* BUSINESS COMMERCE TRADE INDUSTRY  *Merriam-Webster Online Dictionary

Gandelf: A Manufacturing Business  From our class discussion—what does the owner of Gandelf need to worry about?: –Materials management Toxic materials –Contact list (of potential customers) –Customer Information management –Rules for exporting to the U.S. –Inventory Management Minimum order quantities Breakage –Storage of product and materials

Cont’d –Kiln Fuel Safety issues By-laws for kiln usage –Research and development of new products –Tax collection and payment—gst and pst –Product displays –Health and safety issues Toxicity of materials Usage of kiln

Cont’d –Payroll, HR Freelance workers –Competition Their products Their prices

Business Areas  The organizational areas needed to support a business.  These can to equate to departments.

Take orders via phone, fax, . Orders are from U.S. and Canada Payment by credit card only. Customers are companies, not individuals Report on orders for a given time frame ($ ordered, qty ordered, products ordered—most/least popular) Sales Sales People Packaging & Shipping Shippers Orders picked, packaged with packing slip, labeled with shipping address Shipping outsourced—use only UPS/Fedex (US) Shipping reports generated for a given timeframe Product Promotion Promotion Staff For new products: photograph, add product to database, create pricing Create quarterly product catalogue Maintain a list of potential customers Maintain actual customers with customer preferences. Manage ads—mailings, s, web??? Track competition Materials Purchasing Purchasers Manage Materials List Order Materials—create a PO (may be from a purchase requisition) Receive materials—receive against the PO. Generate quarterly reports—materials purchased and received, materials list. Production Potters Scheduled by production manager Create regular products Create and test new products and materials Use materials but don’t track them Updates production daily—what is in progress and what is completed. For completions, inventory of finished product is updated. Needs to be aware of daily orders Creates purchase requisition for materials on an as needed basis. Reports on and disposes of unused materials. Production Manager Planning Sales People Potters Meet each quarter to discuss: what products should be continued/discontinued; what products should be added; what the competition is doing; product pricing. Create a product list for next quarter Create a preliminary materials list for next quarter (based on products) Promotion Staff Production Manager GANDELF POTTERY & CERAMICS

What are the Business Areas within Gandelf?  Materials Purchasing  Production  Product Promotion  Sales  Packaging and Shipping  Planning Note: Gandelf’s owner will outsource HR and Payroll so we won’t bring those into this case study.

What are the Business Areas within Gandelf?  Other suggestions: –Quality Control –Accounting

Organizational Roles to Support the Business:  An organizational structure made up of executives, middle management, supervisory management and operational staff.

Operational Staff  The individuals involved in the day to day processing of transactions I.e. Bank Tellers; Mutual Fund Sales People; Sales Associate

Management  Executives (Top Management) –Those that make strategic and day to day decisions  Middle Management –Those that make tactical and day to day decisions  Lower Management Supervisory personnel who make day to day decisions

Stakeholders  “A person, group, or organization that is actively involved in a project, affected by its outcome, or can influence its outcome” – text p. 469  The personnel in the organizational roles for each business area are the individuals who provide the information needed to understand what is required for development of automated computer systems.

Who are Gandelf’s Stakeholders?  Customers (wholesalers)  Owner  Investors  Employees –Purchasers –Production Manager –Production Staff

Who are Gandelf’s stakeholders?  Employees (continued) –Potters –Promotion Staff –Sales Staff –Shippers –Receivers –Inventory Staff

Who are Gandelf’s stakeholders?  Accountant  Researcher  Small Business Lawyer  Financial Advisor  Physical Security Company  IT Security  ISP

Who are Gandelf’s stakeholders?  Bank  Materials Suppliers  Competition  Government

Who are Gandelf’s stakeholders?  End Customer  Advertising Company  Real Estate Company  Other Small Manufacturing Companies that are interested in purchasing software

Agenda  What is a Business? –Areas within a business –Organizational roles within a business  What is a System? –Information systems –Flow of information  Projects to implement Business Systems –Initiation and strategic planning –Project success

What is a system?  A combination of hardware and developed software that create the software solution that meets the needs of a business.

Information Systems  Collection of interrelated components that collect, process, store, and provide as output the information needed to complete business functions

Types of Information Systems IS Planning Level Type of planningTypical IS applicationsOrganizational Unit Responsible for Developing StrategicStrategies in support of organizational long- term objectives Market and sales analysis, Product planning, Performance evaluation Senior Management/ Executives TacticalPolicies in support of short-term goals and resource allocation Budget analysis, Salary forecasting, Inventory scheduling, Customer service Middle Management OperationalDay-to-day staff activities and production support Payroll, Invoicing, Purchasing, Accounting Lower Management; Operational

Flow of Information  Horizontally - information flows across departments  Vertically - information needs of clerical staff, middle management, and senior executives

What are the functions of the Business at Gandelf that could use the support of a computer?  Some ideas from our discussion: –Customer and potential customer management –Supplier management –Inventory management –Materials management (including toxicity) –Competition management –Shipping –Tax collection/payment –Ordering/Sales

Agenda  What is a Business? –Areas within a business –Organizational roles within a business  What is a System? –Information systems –Flow of information  Projects to implement Business Systems –Initiation and strategic planning –Project success

Project Initiation: How are Projects Chosen?  Long-term information systems strategic plan (top-down)  Department managers or process managers (bottom-up)  Response to outside forces –Legislative changes –Market forces –Competition

Strategic Planning  Strategic Planning involves determining long-term objectives by analyzing the strengths and weaknesses of an organization, studying opportunities and threats in the business environment, predicting future trends, and projecting the need for new products and services.  Examples: –Wal-Mart’s competitors –Air line industry

What are the Strategic issues at Gandelf?  Retail Store in the factory  Sell on the Web?

What defines project success?  On time  Within budget  Expected results achieved

Why is a strong requirements document needed for Gandelf?  Only 16.2% of all IT projects succeed! –Fully functional, on time, within budget  Some studies show this as low as 10%.

More sobering statistics  52.7% are “challenged” --less than fully functional, over budget, late  The remaining 31.1% get cancelled before they are fully implemented

More sobering statistics  Estimated cost of challenged and cancelled projects in 1 year? –$140 billion

More sobering statistics  The average project: –exceeds planned budget by 90% –exceeds schedule by 120%

Why do projects fail?  Objectives not fully specified (51%)  Poor planning/estimating (48%)  New technology (45%)  Poor or no project management discipline (42%)  Inadequate skills (42%)  and so on…

Examples of Recent System Failures  Ontario’s Welfare computer system: tried to give a 3% increase in welfare benefits  RBC: system down for a week  CIBC  President’s Choice Financial