© 2009 Pearson Education, Inc. Publishing as Prentice Hall System Development Chapter 9 & 10 Information Systems Management in Practice 8 th Edition

© 2009 Pearson Education, Inc. Publishing as Prentice Hall 9-2 Today’s Lecture Foundations of Systems Development System Integration Project Management Measuring Benefits

© 2009 Pearson Education, Inc. Publishing as Prentice Hall 9-3 Introduction 1970s: System Development Lifecycle (SDLC) Improved process of building system (methodical) 1980s: “Friendly” 4GL (algorithms to solve problems) Reduces programming effort SQL, Postscript, SAS, MathLab, Cold Fusion 1990s: Business Process Reengineering ERP Late 1990s and 2000s: Internet-based systems Networks and open systems Internet centricity (Web services)

© 2009 Pearson Education, Inc. Publishing as Prentice Hall 9-4 Foundations of Systems Development

© 2009 Pearson Education, Inc. Publishing as Prentice Hall 9-5 Structured Development Systems development a “craft” in the early years More art than science Evolved to a structured process in 1970s Took a more scientific approach 3GL, DBMS, mainframes, professional programmers, well-defined processes Classical Waterfall approach Much touted but rarely used in its pure form

© 2009 Pearson Education, Inc. Publishing as Prentice Hall 9-6 Waterfall Approach

© 2009 Pearson Education, Inc. Publishing as Prentice Hall 9-7 Structured Development cont’d Structured development methodologies accompanied this SDLC, characterized by: Discipline (Best practices) Modularity (Divide and conquer) Reliability (few errors) Efficient use of resources (Cost effectiveness)

© 2009 Pearson Education, Inc. Publishing as Prentice Hall 9-8 Fourth-Generation Languages 4GL & Prototyping developed in early 1980s 4GL is more than a computer language. They are programming environments 4GL facilitated: Development of some programs by end users Use of different development methods (prototyping) Focus on problem-solving and system design rather laborious ‘coding’ – automated coding

© 2009 Pearson Education, Inc. Publishing as Prentice Hall 9-9 Software Prototyping A software prototype is a live “work-in-progress” system that may be implemented as an actual production system of some variant An iterative process to test assumptions and gather feedback about: User requirements Application design Program logic Quick and relatively inexpensive method for system development Xtreme Programming (agile method)

© 2009 Pearson Education, Inc. Publishing as Prentice Hall 9-10 Computer-Aided Software Engineering CASE developed in 1980s: Automation of 1970s structured development techniques to reduce tediousness and maintenance costs CASE tools help quickly design, develop, deploy and maintain software CASE environment includes: Information repository (database) Front-end tools for planning through design Back-end tools for generating code Development workstation

© 2009 Pearson Education, Inc. Publishing as Prentice Hall 9-11 Computer-Aided Software Engineering cont’d Timeboxing CASE technique used to guarantee delivery of a system within a fixed period (120 days) Rapid Application Development (RAD): IS departments that aim for speed over complexity also employ RAD (based on concept of prototyping) to complement CASE

© 2009 Pearson Education, Inc. Publishing as Prentice Hall 9-12 Dupont Cable Management Services Case example: CASE and RAD Needed a software system to manage its telephones and voice network systems throughout offices Use CASE and timeboxing to build a custom system Day 1: Go ahead Day 2-30: Defining components of system Day 31-90: Designing the specifications, developing prototype Day : Installed the system, followed by second timebox Final production system took 9 months, vis-à-vis 2-3 years in other firms

© 2009 Pearson Education, Inc. Publishing as Prentice Hall 9-13 Object-Oriented Development OO development introduced a radical change in systems development in the late 1980s Modular nature (crux of OO) Code packaging technique Objects (with specific attributes) Methods (to access attributes of objects) Programming in JAVA Point-and click programming (GUI) Visual programming (e.g., Visual Basic)

© 2009 Pearson Education, Inc. Publishing as Prentice Hall 9-14 Client-Server Computing Discussed in earlier chapters Early 1990s architecture More flexibility than mainframe systems Workload (processing) split between client and server Integration of pizzazz of the PC world with the necessary back-end production strengths of the mainframe world

© 2009 Pearson Education, Inc. Publishing as Prentice Hall 9-15 System Integration Systems integration poses the biggest problem to IS Complex Expensive Risky Number of products can help facilitate the integration of systems DBMS (e.g., Oracle) ERP (e.g., SAP) Middleware

© 2009 Pearson Education, Inc. Publishing as Prentice Hall 9-16 ERP Systems ERP provides the means to integrate business departments and functions across an organization (business ‘streams’) Single vendor (e.g. SAP) Single set of applications Single database Many successes and failures historically Functionality (<59%) Completed on time and within budget (<10%) Business value? (“technical myopism” common)

© 2009 Pearson Education, Inc. Publishing as Prentice Hall 9-17 Middleware Middleware is a class of software products that enables IS to integrate disparate systems (“translator”) Variety of applications Different platforms Legacy systems with newer systems Middleware used for several functionalities Data sharing Transactions Security Software distribution and synchronization

© 2009 Pearson Education, Inc. Publishing as Prentice Hall 9-18 Interorganizational System Development Business ecosystems Groupings of businesses working together to reduce costs and time across value chains Supply chain management systems (SCM) Requires teams from different organizations to work together Platform (another type — service provider role) Provides infrastructure for the operation of a business ecosystem SABRE reservation system and more recently Amazon Web Services

© 2009 Pearson Education, Inc. Publishing as Prentice Hall 9-19 ExxonMobil Case Example: Platform Mobil created SpeedPass in ”-long keychain gadget that enables customers to wave at a reader when paying for gas Objective was to “speed” motorists in and out Business Value Improved customer satisfaction (convenience) 5 million SpeedPass holders to date Speedpass holders purchase more Mobil gas and more frequently

© 2009 Pearson Education, Inc. Publishing as Prentice Hall 9-20 ExxonMobil cont’d Case Example: Platform To leverage the technology, Mobil teamed up with McDonald’s restaurants in Chicago to test the use of SpeedPass to pay for food Plans to develop similar partnerships with other chains Create network externalities (increase value of SpeedPass) Can Mobil do more? Is technology imitable?

© 2009 Pearson Education, Inc. Publishing as Prentice Hall 9-21 Internet-Based Systems Internet-based systems are where the system development action is occurring. Examine three aspects and instances: Framework Application Servers Language Java Environment Web Services

© 2009 Pearson Education, Inc. Publishing as Prentice Hall 9-22 Application Servers Preferred framework for developing Internet-based systems Architecture Virtual server takes requests, runs business logic, and provides connectivity to back-end systems Goal Automate and manage technical tasks in development and running of Internet-based applications Result Developers can focus more on business issues, rather than technical details

© 2009 Pearson Education, Inc. Publishing as Prentice Hall 9-23 Application Servers FIGURE 9-4 An Application Server Architecture

© 2009 Pearson Education, Inc. Publishing as Prentice Hall 9-24 Java “Platform independent” promise “Write once, run anywhere” But poor compatibility with other languages, e.g. C++ Evolved into standard platform for developing server-side applications Enterprise Java Beans (EJB) Java 2 Enterprise Edition (J2EE) Powerful starting point for building online systems Multivendor platform capability Pre-built package Reusable components

© 2009 Pearson Education, Inc. Publishing as Prentice Hall 9-25 Building a Web Service Case Example: Web Services Building a Web-based currency converter 1. Expose the code 2. Write a service description 3. Publish the service 4. Find a currency conversion Web service 5. Invoke a Web service

© 2009 Pearson Education, Inc. Publishing as Prentice Hall 9-26 Building a Web Service FIGURE 9-5 Building a Web service

© 2009 Pearson Education, Inc. Publishing as Prentice Hall 9-27 Contingencies for Building a Web Service Preparing for On-The-Fly Web Service Dev Today’s killer app cannot fulfill tomorrow’s needs Develop scalable and adaptable systems Personal silos of data and apps and intertwining of a variety of Web Services IS must devise schemes and implement systems to manage these inevitabilities

© 2009 Pearson Education, Inc. Publishing as Prentice Hall 9-28 Conclusion Evolution of system development Craft (1960s) Discipline, control and efficiency (1970s) Better development tools and methods (1980s) Client-server, integration, Internet-based systems (1990s-2000s) Today: Focus on interorganizational systems and Internet-based systems Role of IS even more salient (project management)

© 2009 Pearson Education, Inc. Publishing as Prentice Hall MANAGEMENT ISSUES IN SYSTEMS DEVELOPMENT Chapter 10

© 2009 Pearson Education, Inc. Publishing as Prentice Hall Project Management Project is a collection of related tasks and activities undertaken to achieve a specific goal within a finite time period (temporal) IT projects are similar to other forms but arguably more difficult Intangibility (you cannot see it or feel it!) People become confused and concerned IT project management Coordination (managing interdependencies)

© 2009 Pearson Education, Inc. Publishing as Prentice Hall Scope: Job of a Project Manager Getting the project started Managing the schedule Managing the budget Managing the benefits Managing the risks, opportunities and issues Soliciting feedback and formative evaluation

© 2009 Pearson Education, Inc. Publishing as Prentice Hall Change Management Beyond technical aspects of system Managing change (people side of system) Assimilation of new systems into work processes Resistance (organizational inertia) ODR a methodology to manage technology- triggered change (stakeholders involved) Sponsor Change agent Target

© 2009 Pearson Education, Inc. Publishing as Prentice Hall Risk Management Management of risks in IT projects crucial Technical risk Sub-performance; scope creep Business risk IT-triggered organizational change not as planned Risk management “cookbook” 1. Assess the risk 2. Mitigate the risk 3. Adjust project management approach

© 2009 Pearson Education, Inc. Publishing as Prentice Hall Risk Management cont’d 1. Assess change risks (predominant factors) Leadership Project leader should be business executive How does project leadership affect outcome? Employees’ perspective How would they react and why? Scope and urgency Is the scope too wide? How urgent? Gibson’s “plus-minus” decision tree

© 2009 Pearson Education, Inc. Publishing as Prentice Hall Risk Management cont’d

© 2009 Pearson Education, Inc. Publishing as Prentice Hall Risk Management cont’d 2. Mitigate the risks Risk avoidance Identify and eliminate source of perceived risk Risk limitation Implementing controls to contain potential risk effects Risk transfer Letting others assume risk (outsourcing)

© 2009 Pearson Education, Inc. Publishing as Prentice Hall Risk Management cont’d 3. Adjust project management approach Project management style Authoritative vs. participatory Project budget and timeframe Rigid vs. flexible Gibson’s Four Approaches Big Bang Approach (all other 3 must be positive) Improvisation Guided evolution Top-down coordination

© 2009 Pearson Education, Inc. Publishing as Prentice Hall Gibson’s Four Approaches to Risk Management

© 2009 Pearson Education, Inc. Publishing as Prentice Hall Dow Corning Case Example: Risk Management Successful ERP implementation ( ) How did it manage the different business risks? Phase 0: Get Ready (assessed risks) Leadership (high) Employee perception (high) Scope and urgency (high)

© 2009 Pearson Education, Inc. Publishing as Prentice Hall Dow Corning cont’d Phase 1: Understand the new system Used improvisation approach of participatory management and flexible deadlines Emphasized building employee commitment Phase 2: Redesign work processes Used guided evolution approach of participatory management and fixed deadlines Achieving employee commitment did little to get work processes redesigned Continued through the pilot (ERP cutover in new European subsidiaries)

© 2009 Pearson Education, Inc. Publishing as Prentice Hall Dow Corning cont’d Phase 3: Implement ERP worldwide Used top-down coordination with an authoritative management style and flexible timelines Pilot’s success demonstrated managers’ resolve and shifted employee perception to the positive “Company wide” scope created negative shift Phase 4: Complete implementation Used the Big Bang approach of authoritative management and firm deadlines ERP implemented in most sites by 1998, so all risk factors turned positive

© 2009 Pearson Education, Inc. Publishing as Prentice Hall Fast Tips: Good IS Management Establish the ground rules Foster discipline, planning, documentation and management Obtain and document “final” user requirements Obtain tenders from all appropriate potential vendors Include vendors in decision making Convert existing data Follow through after implementation

© 2009 Pearson Education, Inc. Publishing as Prentice Hall Modernizing Legacy Systems BCG study: Replace or not? About 40% of replacement projects fail Seduction of “new toys” Upgrading is a better option BCG three analyses (replace or not) Costs-benefits of system Fit between new system and business needs IS staff capabilities (Can they do the job?)

© 2009 Pearson Education, Inc. Publishing as Prentice Hall Options for Improving Legacy Systems 1. Restructuring the system Getting system ready for reengineering e.g., An application working fine but not running efficiently needs restructuring 7 steps involved in the process

© 2009 Pearson Education, Inc. Publishing as Prentice Hall Restructuring the System

© 2009 Pearson Education, Inc. Publishing as Prentice Hall Options for Improving Legacy Systems cont’d 2. Reengineering the system (not BPR) Reverse Engineering Extracting and converting data elements from existing systems and formats Forward Engineering Moving them to new hardware platforms and creating new applications

© 2009 Pearson Education, Inc. Publishing as Prentice Hall Options for Improving Legacy Systems cont’d 3. Refurbishing the system Add new extensions to a “good working” old system Some examples of legacy system extensions Supply input in a new manner Make new uses of input Allow programs to deal more comprehensively with data Add a Web interface around a “blackbox”  e.g., FedEx’s package tracking system

© 2009 Pearson Education, Inc. Publishing as Prentice Hall Options for Improving Legacy Systems cont’d 4. Rejuvenate the system Adding new functions to a reengineered system to make it more valuable Phases of rejuvenation process 1. Recognize a system’s potential 2. Clean up the system and make it more efficient 3. Establish a strategic role for the system Add new functionalities to create business value

© 2009 Pearson Education, Inc. Publishing as Prentice Hall Options for Improving Legacy Systems cont’d 5. Rearchitect the system Involves having an architecture for new systems, and then using that design to upgrade legacy systems CTOs now devising enterprise level IT architecture How systems are interconnected One-system-at-a-time migration strategy

© 2009 Pearson Education, Inc. Publishing as Prentice Hall Options for Improving Legacy Systems cont’d 6. Replace with a package or service Replace a legacy system with a commercial package Commercial packages have many options and features that can be customized Replace with service delivered over the Internet Quick availability Outsource IS responsibility to vendors Cost can be expensed (tax benefits)

© 2009 Pearson Education, Inc. Publishing as Prentice Hall Options for Improving Legacy Systems cont’d 7. Rewrite the system System is “too far gone” to rescue Code convoluted and patched; technology antiquated Alternative to replacement Rare (usually only for very specialized systems)

© 2009 Pearson Education, Inc. Publishing as Prentice Hall Measuring Systems Benefits Measuring the value of information systems is an ongoing task for IS managers (justify) Constant evolution of technology Top executives demand specific links between new systems and corporate financial measures (e.g., ROA, revenue) Is this reasonable?

© 2009 Pearson Education, Inc. Publishing as Prentice Hall Measuring Systems Benefits cont’d Difficult task because IT itself is only one of many factors that contribute to successful use of systems IT can trigger a series of events toward a goal, but those events are very much dependent on organizational context Can you measure the value of decision support systems or data warehouses? Can you calculate the ROI of e-commerce systems? Three suggestions to alleviate this conundrum 1. Distinguish between different roles of systems 2. Measure what is important to management 3. Assess investments across organizational levels

© 2009 Pearson Education, Inc. Publishing as Prentice Hall Distinguish Between the Different Roles of Systems Information systems can play three roles 1. Performance: “Support systems” to increase efficiency 2. Business Value: Carry out a business strategy e.g., CAD system used to design products 3. Product or Service: Itself or as a basis for a product or service e.g., Web-based information services

© 2009 Pearson Education, Inc. Publishing as Prentice Hall Measure what is important to management 1. Measuring organizational performance Meeting deadlines and milestones Operating within budget Quality (efficiency, costs) e.g., time and costs reductions 2. Measuring business value Impact on value network (relationships) Customers, partners, suppliers 3. Measuring a product or service Can be measured as a business venture (ROI)

© 2009 Pearson Education, Inc. Publishing as Prentice Hall Assess Investments Across Organizational Levels Sources of value for IT at three levels Individual Division (or department) Corporation Impact focus of an IT investment extends to Economic performance payoffs Organizational process payoffs Technology impacts (functionality) Combine views to form 3 x 3 matrix

© 2009 Pearson Education, Inc. Publishing as Prentice Hall Do Investors Value IT Investments? A study found that every $1 invested in computers yielded up to $17 in stock market value (and no less than $5) vis-à-vis $1 invested in property, plant and equipment (book value) only yielded $1 in stock market value $1 investment in other assets (inventory, liquid assets, and accounts receivables) yielded only $0.70 Researchers’ argument IT investment creates intangible asset value Know-how, skills, organizational structures

© 2009 Pearson Education, Inc. Publishing as Prentice Hall All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright © 2009 Pearson Education, Inc. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall