MANAGEMENT ISSUES IN SYSTEM DEVELOPMENT Andreas Rio, M.Eng.

Information System Management The four major issues discussed:  Staffing  Successfully implementing systems (change management)  Ways to replace legacy systems  Measuring the benefits of systems

Introduction Companies are in three businesses: 1. Infrastructure management 2. Customer relationship 3. Product innovation

Introduction IS organizations can be viewed as being in the same three businesses 1. Operations are infrastructure management 2. The help desk is the customer relationship business 3. System development is product innovation  Each should be viewed and managed differently.  The key to success is talent, so management issues surrounding system development begin with STAFFING

Managing IS Staff

STAFFING

Managing IS Staff Recruiting IT Staff

Managing IS Staff Recruiting IT Staff  The major issue in recruiting is finding people with the right skills and then providing the work culture and incentives that suit them  In general, skills are most lacking in the newest areas  Some employers are looking at employees in new ways, such as investors who invest their time where they get the highest market value for their talent  Another is to not expect long-term employment by all employees

Managing IS Staff Designing Motivating Work  Assigning the kind of work that motivates people may, in part, revolve around designing or redesigning jobs to fit jobholders.  Knowing what motivates IT staff is important in designing jobs.  In a long research study it was discovered that developers have a high need for personal growth and development in the job.

Managing IS Staff

Implementing System Successfully CHANGE MANAGEMENT

Implementing System Successfully  Sponsors – legitimize the change  Change Agents – cause the change to happen  Targets – are expected to change

Implementing System Successfuly  Change management is the process of assisting people to make major changes in their working environment.  One approach to change management is to identify and work with  sponsors  change agents  targets  to implement the change a new system

To replace or not to replace? IMPROVING LEGACY SYSTEM

Improving Legacy System  Most information systems executives feel trapped by the past  They have thousands of old legacy programs and data files they would love to replace.  Replacement is not the only option, though, and in many cases it is not the wisest course of action.  One study found that upgrading (rather than replacing) made more sense in most cases.

Improving Legacy System 1. Restructure the System  If the system is running but fragile, restructure the code, using automated tools, to make the system more maintainable.

Improving Legacy System 2. Reengineer the System  Extract the data elements from the existing file and the business logic from the existing program and

Improving Legacy System 3. Refurbish the System (restore something to good repair)  Old but maintainable systems that are causing no major problems may just need some extensions to be more useful.  Companies are leaving existing systems in place but adding an Internet front end.

Improving Legacy System 4. Rejuvenate the System (return something original condition)  Rejuvenating adds enough new functions to a system to make it more valuable to the firm.

Improving Legacy System 5. Re architect the System  This option involves having a to-be architecture for new systems, then using that architecture to upgrade legacy systems.

Improving Legacy System 6. Replace with a package  Many old systems built in-house have been replaced by a package developed by a third party.  This alternative has become the norm; another option is to replace a system with a service delivered over the Internet.

Improving Legacy System 7. Rewrite the system  In some cases, a legacy system is too far gone to rescue. Few companies write new applications from scratch, though, since it is so time-consuming and expensive;  Rewriting now means system integration — finding packages that do pieces of the work, then using middleware tools to link them together.

MEASURING THE BENEFITS OF SYSTEMS

Measuring the Benefits of Systems 1. Distinguish Between the Different Roles of Systems 2. Measure What Is Important to Management 3. Assess Investments Across Organizational Levels

Measuring the Benefits of Systems 1. Distinguish Between the Different Roles of Systems  To measure the value of systems that help other departments do their job better, measure how they improve organizational efficiency.  For systems that carry out a business strategy, measure them by their contribution to the success or failure of that plan.  And for systems that are sold as a product or service, measure them by their performance in the market.

Measuring the Benefits of Systems 2. Measure What Is Important to Management  Besides financial benefits  relating proposed benefits to certain indicators can make it easier to “sell” the system to management,  at both the individual and aggregate levels.  Concentrating only on cost and monetary measures may be shortsighted; other measures can be even more important.

Measuring the Benefits of Systems 3. Assess Investments Across Organizational Levels  The Value Assessment Framework measures benefits at three organizational levels: individual, division, and corporation  and across three kinds of impacts: economic performance payoffs, organizational process impacts, and technology impacts.

Measuring the Benefits of Systems Do Investors Value IT Investments?  A study found that :  $1 invested in computers yielded up to $17 in stock market value – and no less than $5.  $1 invested in property, plant, and equipment only yielded $1 in stock market value  $1 investment in other assets (inventory, liquid assts, and accounts receivables) yielded only 70 cents.  The researchers reason that investors value $1 spent on computers more than the other investments because it leads to organizational changes that create $16 worth of “intangible assets”– know-how, skills, organizational structures, and such.

Conclusion  Managing development staff well is a major part of the job of managing system development.  Helping end users adjust to the organizational changes that occur with a new system is a second issue.  Most software is difficult to keep up to date. As a result, at some point in time, management needs to decide what to do with aging software.  Finally, the question continually asked about applications is, “What is it worth to us?”— another difficult system development issue.