1. Redesigning the Organization with Information System
Chapter 11
Redesigning the Organization with Information System

2. Systems as Planned Organizational Change
More than new hardware and software
When you design an information system you redesign the organization
Information Systems plan
A road map indicating the direction of the systems development, the rationale, the management strategy, the implementation plan, and the budget.

3. The Information Systems Plan
Purpose of the Plan
Strategic Business Plan
Current Systems
New Developments
Management Strategy
Implementation Plan
Budget Requirements

4. Enterprise Analysis (Business Systems Planning)
An analysis of organization-wide information requirements by looking at the organization in terms of organizational units, functions, processes, and data elements; helps identify the key entities and attributes in the organization’s data.

5. Strategic Analysis
Critical Success Factors (CSF’s) a small number of easily identifiable goals shaped by the industry, the firm, the manager, and the broader environment that are believed to ensure the success of the organization. Used to determine the information requirements of the organization.
See page 337 for table of examples

6. The Spectrum of Organizational Change
Automation
Using the computer to speed up the performance of existing tasks
Rationalization
The streamlining of SOPs, eliminating the obvious bottlenecks, so that automation makes operating procedures more efficient
Reengineering
The radical redesign of business processes, combining steps to cut waste and eliminating repetitive paper-intensive tasks to improve costs
Paradigm Shifts

7. How IT can transform Organizations
Global Networks
Transaction costs decline
Enterprise Networks
Business processes are changed
Distributed Computing
Mgmt costs are declined, hierarchy and centralization decline.
Portable Computing
Organizational costs decline due to lower real estate costs
GUI’s
Organizational costs are declined. Eliminates paper costs

8. Reengineering and Work Flow Management
The process of streamlining business procedures so that documents can be moved easily and efficiently from one location to another.
Reengineering- page 343

9. Total Quality Management
Attributed to Charles Deming – originally rejected by US adopted by Japan – Macolm Baldridge Award
A concept that makes quality control a responsibility to be shared by all in the organization

10. How IS contribute to TQM
Simplifying the product or the production process
Benchmarking
Use customer demands as a guide to improving products and services
Reduce cycle time
Improve quality and precision of the decision
Increase the precision of production

11. Systems Development Systems Analysis Systems Design Programming
Testing
Conversion
Production and Maintainance

12. Systems Analysis Feasibility Always three choices
Technical
Economic
Operational
Always three choices
Do nothing
Modify or enhance system
Develop a new system
Information Systems requirements
A detailed statement of the information needs that a new system must satisfy identifies who needs what information and when, where, and how

13. System Design Logical Design Physical Design
Lays out the components of the information system and their relationship to each other as they would appear to users
Physical Design
The process of translating the abstract logical model into the specific technical design for the new system

14. The Role Of End Users The nature and level differs per system
Blamed for many system failures
More people more system ideas
More people more different methods/actions/etc

15. Testing Unit Testing System Testing Acceptance Testing Test Plan
The process of testing each program separately in the system
System Testing
Tests the functioning of the IS as a whole to determine if discrete modules will function together as planned
Acceptance Testing
Provides the final certification that the system is ready to be used in a production setting
Test Plan
Prepared by the development team in conjunction with the end users

16. Conversion Strategies
Parallel Strategy
Direct Cut-Over Strategy
Pilot Study Strategy
Phased Approach Strategy
Conversion Plan
Documentation

17. The Business Value of IS
A consistent IT structure can play an important role in org development, at the very least it can keep a firm alive.
Benefits can go to the firm but most likely go to the customer
Look at Capital Budgeting Models and Benefits
Tangible and Intangible

18. Capital Budgeting Models
Payback Method
A measure of the time required to pay back the initial investment of the project (original investment/annual net cash inflow = # of years to pay back)
Accounting rate of return on an investment (ROI)
Calculation of the rate of return from an investment by adjusting cash inflows produced by the investment for depreciation. ((total benefits – total costs- depreciation)/Useful Life = Net Benefit)

19. Capital Budgeting Models
Present Value
The value in current dollars of a payment or steam of payments to be received in the future
Net Present Value
The amount of money an investment is worth, taking into account its costs, earnings, and the time value of money

20. Capital Budgeting Models
Cost Benefit Ration
A method for calculating the returns from a capital expenditure by dividing total benefits from total costs.
Profitability Index
Use to compare the profitability of alternative investments, it is calculated by dividing the present value of the total cash inflow by the initial cost of the investment
Internal Rate of Return (IRR)
The rate of return or profit that a an investment is expected to earn

21. Results of Capital Budgeting Models
Four Scenarios
High Risk, High Benefits- Cautiously Examine
High Risk Low Benefits – Avoid
Low Risk High Benefits- Identify and Develop
Low Risk Low Benefits- Routine Projects

22. Portfolio Analysis
An analysis of the portfolio of potential applications within a firm to determine the risks and benefits and select alternatives for information systems
Some Risks
Benefits may not be obtained
Cost of implementation may exceed budget
Implementation time frames might be exceeded
Technical performance is less than expected
The new system is incompatible with existing software or hardware

23. Scoring Models
A quick method for deciding among alternative systems based on a system of rating for selected objectives

24. Conclusion The goal is to develop a strategy to improve the firm
Should you include many players and if so who and how do you decide?
How do you balance all the different local and corporate interests?
You also need to determine costs.
Remember to look to see if you are changing the organization or just a simple task.