1. Technologies for Developing Systems Chapter 9 Information Systems Management In Practice 7E McNurlin & Sprague PowerPoints prepared by Michael Matthew Visiting Lecturer, GACC, Macquarie University – Sydney Australia

2. ©2006 Barbara C. McNurlin. Published by Pearson Education. 9-2 Part III – Managing System Development The next two chapters deal with developing enterprise- based systems through system development Chapter 9 = we describe the foundations of system development –Technologies and methodologies –System integration and Inter-organizational System Development –Internet-based systems Chapter 10 = we discuss a number of management issues –Project Management – the underpinning of successful large projects –IT staffing –Change management –Legacy systems –Measuring the benefits of systems

3. ©2006 Barbara C. McNurlin. Published by Pearson Education. 9-3 Part III – Managing System Development cont. System development has traditionally been aimed at procedure-based work –Procedure-based activities are large-volume transactions where each transaction has a relatively low cost or value –These activities, which consist mainly of handling data, are well defined, and the principal measure for gauging their performance is efficiency Information systems were, in most cases, first built to automate this kind of work, beginning initially with accounting, and then progressing into manufacturing, administration, sales and marketing, and so on Development of these systems has been handled by IS professionals

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5. ©2006 Barbara C. McNurlin. Published by Pearson Education. 9-5 Chapter 9 This lecture / chapter reviews this evolution of system development to provide an understanding of the underlying principles of building applications It discusses: –Underlying technologies –Development methodologies, and –Internet-based systems – Case examples include Du Pont Cable Management Services, MGM, Colgate- Palmolive, a telecommunications firm, Hong Kong Exchanges and Clearing and Bekins, with a discussion case on ExxonMobil

6. ©2006 Barbara C. McNurlin. Published by Pearson Education. 9-6 Today’s Lecture Introduction Foundations of Systems Development –Structured Development –Fourth-Generation Languages –Software Prototyping –Computer-Aided Software Engineering (CASE) –Object-Oriented Development –Client-Server Computing System Integration –ERP Systems –Middleware Inter-organizational System Development Internet-Based Systems –Application Servers –Java –Web Services

7. ©2006 Barbara C. McNurlin. Published by Pearson Education. 9-7 Introduction Developing new systems = difficult job - “if anything can go wrong, it will!” though there is progress in improving the process of buildings systems – –1970s: system development life cycle –1980s: friendly languages and automation of parts of development such as code generation –1990s: reliance increased on packages Developer productivity & maintenance

8. ©2006 Barbara C. McNurlin. Published by Pearson Education. 9-8 Introduction cont. Business process reengineering movement = growth on integrated enterprise systems & adoption of enterprise resource planning systems (ERP) Late 1990s; sudden emergence of e-business and Internet based systems 2000s - Internet brought need for faster systems development and integrated enterprise systems, –Hence new tools for rapid development became available – Relying on reusable components & open systems architecture

9. ©2006 Barbara C. McNurlin. Published by Pearson Education. 9-9 Introduction cont. These days, virtually every application is a network application, since the network is becoming the system Web-based applications were the first generation of Internet-centric computing The new field, “Web Services” (or whatever people are calling it), is touted as the second In addition, the increasing interconnectedness of supply chains is leading companies to build inter- organizational systems – Far more complex undertaking than any single- company systems

10. ©2006 Barbara C. McNurlin. Published by Pearson Education. 9-10 Foundations of Systems Development In the early years, systems development was considered a ‘craft’ Then = Discipline through structured development Figure 9-1 is the classic system development life cycle (waterfall approach) –Much ‘touted’ but rarely (purely) used –Developers really always followed the spiral approach as in Figure 9-2

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13. ©2006 Barbara C. McNurlin. Published by Pearson Education. 9-13 Foundations of Systems Development cont. The Traditional Application Development Approach (characteristics): 1.Hand coding in third generation language, e.g. COBOL 2.“Structured Programming” development methodology 3.Automated Project management system 4.A database management system 5.A mix of online and batch applications in the same system 6.Development of mostly mainframe applications 7.Programming by professional programmers only 8.Various automated, but not well integrated s/w tools 9.A well-defined sign-off process for system delivery 10.User participation mainly in require definition and installation phases

14. ©2006 Barbara C. McNurlin. Published by Pearson Education. 9-14 Foundations of Systems Development Structured Development Structured development methodologies accompanied this system development life cycle in an attempt to manage the complexities of systems design and development –More discipline: established standards for process and documentation to increase productivity and developers’ ability to deal with complexity –Higher reliability and fewer errors: to catch errors as early as possible through inspection –More efficient use of resources: thorough project management approaches resulted in: Cost savings Increased productivity Better allocation of human resources Reduced the tendency for system development project overruns –ALL = STILL A PROBLEM!!!!

15. ©2006 Barbara C. McNurlin. Published by Pearson Education. 9-15 Foundations of Systems Development Fourth-Generation Languages Early 1980s – 4GLs and Prototyping 4GLs are more than just a computer language, they are programming environments. As seen in Figure 9-3 1980s development – fourth generation languages (4GLs). These allowed: –End users to develop some programs –Programmers to use different development method = Prototyping

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17. ©2006 Barbara C. McNurlin. Published by Pearson Education. 9-17 Foundations of Systems Development Software Prototyping A live, working system –Performs actual work –May become actual production system Or replaced by a (newly) coded one Purpose: to test assumptions about: –Users’ requirements –Application design, or –Program logic Software system created quickly: language creates code Iterative process –Each version performs function in an increasingly efficient manner Both 4GLs and prototyping have proven to be important underpinnings for today’s application development world

18. ©2006 Barbara C. McNurlin. Published by Pearson Education. 9-18 Foundations of Systems Development Computer-Aided Software Engineering (CASE) The advent of Computer Aided Software Engineering (CASE) occurred to automate structured techniques and reduce tediousness of the 1970s structured programming and analysis techniques. –Components: Information repository: stores and organizes all information needed to create, modify, and develop software system Front-end tools: used in all phases that lead up to coding, (“uppercase”) Back-end tools: used to automatically generate source code (“lowercase”) Development workstation: the more powerful the better

19. ©2006 Barbara C. McNurlin. Published by Pearson Education. 9-19 Foundations of Systems Development Computer-Aided Software Engineering (CASE) cont. A late ’80s use of CASE (not ‘standard’!) is Timeboxing –Timeboxing: Technique that uses CASE to guarantee delivery of a system within 120 days Today, IS departments that aim for speed over complexity are turning to a development technique like: –Rapid Application Development (RAD)

20. ©2006 Barbara C. McNurlin. Published by Pearson Education. 9-20 DUPONT CABLE MANAGEMENT SERVICES Case Example: Rapid Application Development (RAD) To manage its telephones and wiring in its many offices, DuPont needed a cable management system No packages on the market could handle its needs, so it called on a DuPont subsidiary to use CASE and timeboxing to build a custom system –Day One was the go-ahead –Days 2-30 defined the components of the system –Days 31-90 designed the specs, prototyped the system, and refined the prototype (which became the production system) –Days 91-120 installed the system, and a second timebox followed The resulting system, which took nine months, took others two to three years to develop in-house

21. ©2006 Barbara C. McNurlin. Published by Pearson Education. 9-21 Foundations of Systems Development Object-Oriented Development Object-oriented (OO) development was a revolutionary change in the late 1980s – develop objects that can be reused It allowed point-and-click programming of graphical user interfaces It is not so much a coding technique as a code-packaging technique –Object: Receives request (message) Chooses and executes operation, then Returns the results to the requester It is very modular, so a change in one part of a system need not affect the other parts

22. ©2006 Barbara C. McNurlin. Published by Pearson Education. 9-22 Foundations of Systems Development Client-Server Computing and Web Based Development In the 1990s, two developments became the major news: 1.Client-server systems 2.Web-based or network centric development Underlying these two (continuing) trends is the increasing use of packages and system integration –As much as possible, companies prefer to buy a package rather than build an application in-house –To develop large applications, they integrate (various) hardware and software components

23. ©2006 Barbara C. McNurlin. Published by Pearson Education. 9-23 Foundations of Systems Development Client-Server Computing These systems split work between a client and a server Far more flexibility than mainframe-based systems –Desktop: graphics, animation, video –Servers: production updating Didn’t always live up to their promise! Clever way to meld the pizzazz of the PC world with the necessary back-end production strengths of the ‘mainframe’ world

24. ©2006 Barbara C. McNurlin. Published by Pearson Education. 9-24 MGM Case Example: Client Server Computing (and Intranet) MGM has a huge library of TV shows and movies –Previously had over 26 disparate systems on PCs Its first client-server application collected and consolidated all data on the film library so that MGM would know what films they have rights to license to whom MGM’s film rights salespeople could visit the head of a cable TV network: –Play 20–30 second clips of their films using the built-in CD-ROM –Browse the laptop’s inventory database to verify availability of films –Print the licensing deal memo on the spot The system had a three-tier architecture and was built via prototyping using a RGL development tool

25. ©2006 Barbara C. McNurlin. Published by Pearson Education. 9-25 MGM Case Example: Client Server Computing (and Intranet) cont. Partnering is mandatory with client-server computing –Role of IS at MGM changed from systems development and delivery to one of cooperating and partnering Required a huge cultural shift in the roles and attitudes of the IS staff Hardware was cheaper, development was faster and software was cheaper (significant!) Operating costs were more expensive than MGM expected –Version control of client-server software and service and systems management were more costly

26. ©2006 Barbara C. McNurlin. Published by Pearson Education. 9-26 Foundations of Systems Development Summary These technologies : –Structured development –4GLs –Prototyping –CASE –OO development –Client Server systems have all proven to be foundations of today's system development environment We now turn to that (today’s) environment, beginning first by discussing the main method of building systems: system integration

27. ©2006 Barbara C. McNurlin. Published by Pearson Education. 9-27 Systems Integration Integration is by far the biggest software problems CIOs face –= Why offerings that integrate systems generate so much interest CIOs (and all CXOs!) have long strived to integrate the information systems in their organizations Integration = –Complex –Expensive –Risky Three approaches stand out: –Database Management Systems: allow applications to share data stored in a single or distributed database –Enterprise Resource Planning (ERP) Systems: all applications come from a single vendor and are specifically designed to communicate with each other –Middleware: applications communicate with each other through a third- party translation software - see Figure 9-4 Typically = use a combination of all three

28. ©2006 Barbara C. McNurlin. Published by Pearson Education. 9-28 Systems Integration ERP An ERP system aims to integrate corporate systems by providing a single set of applications from a single vendor operating with a single database –The goal – provide the means to integrate business departments and functions across an organization History of ERP contains both successes and failures, many of which have been especially notable: –Average cost overrun – 179% –Average schedule overrun 230% –Functionally 59% below expectations –10% projects completed on time & in budget –35% projects cancelled Common to hold systems large size and complexity responsible as well as: –Too much attention to ‘technical’ aspects –Not enough to organizational aspects

29. ©2006 Barbara C. McNurlin. Published by Pearson Education. 9-29 COLGATE PALMOLIVE Case Example: Successful ERP 1990s = competitive crisis Used a decentralized structure –Expensive to coordinate –Slow to respond to market changes –Constraint on company growth Vision: “Become a truly global company, with an integrated business environment and standardized business processes.”

30. ©2006 Barbara C. McNurlin. Published by Pearson Education. 9-30 COLGATE PALMOLIVE Case Example: Successful ERP cont. After setting up a prototype environment in the US, SAP R/3 module convincingly proved itself as being functional and flexible worldwide for –Sales & distribution –Materials management –Finance –Human resources Savings have been made in IT operations – complex decentralized IT infrastructure was streamlined

31. ©2006 Barbara C. McNurlin. Published by Pearson Education. 9-31 COLGATE PALMOLIVE Case Example: Successful ERP cont. Implementation took five years and cost $430 million, but it was a success. The product delivery cycle dropped and purchasing and other costs were cut Data centers around the world were closed, from 75 down to 2 The complexity of its global data networks was also simplified Success of ERP stems from senior management convincing employees that the company was in crisis and only dramatic change could remedy it

32. ©2006 Barbara C. McNurlin. Published by Pearson Education. 9-32 Systems Integration Middleware Most organizations have a wide range of applications –New and old –From a variety of vendors –Running on numerous platforms Replacing or rewriting these systems not an option One option = employ a class of products known as middleware –Software that works between and connects applications allowing them to share data –Needed as wide range of applications used and run on numerous platforms –Simplifies development by acting as the “glue” that binds the components together –There is a wide variety available as illustrated in Figure 9-4

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34. ©2006 Barbara C. McNurlin. Published by Pearson Education. 9-34 Systems Integration Middleware cont. One type of ‘middleware’ that has gained popularity: Enterprise Application Integration (EAI): –Typically use a message broker to transfer data between applications –Add a new level of functionality that distinguishes them –Allow users to define business processes and make data integration subject to rules that govern those processes e.g. a rule might state that data can only move from purchasing to accounts receivable when ‘X’ has signed off on the purchase

35. ©2006 Barbara C. McNurlin. Published by Pearson Education. 9-35 A TELECOMMUNICATIONS FIRM Case Example: Enterprise Application Integration Processing customer requests for new and updated services = major cost and source of customer dissatisfaction – It has been estimated that 65 percent of new and change orders in the telephone industry have errors that must be corrected after the fact ($$$) Rather than build a new system, the company looked to EAI to automate the process using three existing systems: 1.The customer relationship management system (which contains the customer information) 2.The ERP system (which retrieves information for the application to validate the request and ensures that the new service is compatible with the customer’s existing services), and 3.The accounting system (which contains the pricing information)

36. ©2006 Barbara C. McNurlin. Published by Pearson Education. 9-36 A TELECOMMUNICATIONS FIRM Case Example: Enterprise Application Integration cont. Therefore resolution = –Customer request service at the call center via the CRM –Customer’s name and address passed onto ERP system, which retrieve necessary info Mission accomplished –Decreased processing costs –Errors eliminated –Reduced customer churn –No new applications needed –Existing applications not altered

37. ©2006 Barbara C. McNurlin. Published by Pearson Education. 9-37 Interorganizational System Development One of the main business trends is the appearance of business ecosystems — “groupings” of businesses that work closely together –Supply Chain Management systems integrate supply chains These are now a major trend as they compete against one another on their ability to reduce costs and time across their entire chains Development of such inter-organizational systems requires teams from the different organizations to work together

38. ©2006 Barbara C. McNurlin. Published by Pearson Education. 9-38 Interorganizational System Development cont. Another type of inter-organizational system is a platform, which provides the infrastructure for the operation of a business ecosystem, a region, or an industry –Sabre –Video game industry Platform development is a major trend in an increasing number of industries Following 2 cases 1.Exxonmobil - Yet to become a platform = discussion case 2.HKEx – points out the types of coordination needed to develop an interorganizational system for a business ecosystem

39. ©2006 Barbara C. McNurlin. Published by Pearson Education. 9-39 EXXONMOBIL Discussion Case – Interorganizational Systems Development Mobil created Speedpass, a system that uses a 1.5-inch-long wand that motorists can attach to their key chain and “wave” at an electronic reader on a Mobil gas pump to pay for gas Mobil’s goal was to speed motorists in and out of its stations ExxonMobil now has five million Speedpass holders –They buy more Mobil gas than non-Speedpass customers, they visit Mobil stations one more time per month, and they spend 2-3 percent more money

40. ©2006 Barbara C. McNurlin. Published by Pearson Education. 9-40 EXXONMOBIL Discussion Case – Interorganizational Systems Development cont. To leverage this technology, it has teamed up with McDonald’s restaurants in Chicago to test use of Speedpass to pay for food How should Mobil leverage this platform even more?

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42. ©2006 Barbara C. McNurlin. Published by Pearson Education. 9-42 HONG KONG EXCHANGES & CLEARING Case Study – Interorganizational Systems Development HKEx is Asia’s second largest stock market To extend its reach beyond Hong Kong, it decided to embed its business processes in an open trading architecture by building a third-generation automatic order matching and execution system HKEx’s goal is integrated end-to-end computerized trading processes, from investors through brokers to markets

43. ©2006 Barbara C. McNurlin. Published by Pearson Education. 9-43 HONG KONG EXCHANGES & CLEARING Case Study – Interorganizational Systems Development cont. The project was daunting, involving both internal and external people –40 staff members from varying departments –150 consultants, and –500 brokerage firms The project had five development teams: 1.A network team 2.A host and open gateway team 3.A multi-workstation system team (for brokerages wanting to use HKEx’s system instead of their own back office system) 4.An order routing team (for access via the Internet or mobile phones), and 5.A user acceptance testing team

44. ©2006 Barbara C. McNurlin. Published by Pearson Education. 9-44 HONG KONG EXCHANGES & CLEARING Case Study – Interorganizational Systems Development cont. Development took two years, and ended with three levels of testing –One level involved testing the systems that some 100 brokerage firms built to interface with the open gateway Rollout was phased so that Hong Kong’s stock market was not disrupted HKEx has built its processes into an open architecture and coordinated the construction of an inter-organizational system – with components from numerous sources and participants of many kinds It is now the foundation for its industry ecosystem

45. ©2006 Barbara C. McNurlin. Published by Pearson Education. 9-45 Internet-Based Systems HKEx’s system is not Internet based but it allows Internet access for online trading as well as other actions –The Internet has opened up the options HKEx can offer Internet users have become so sophisticated that Internet-based systems must be: –Scalable –Reliable, and –Integrated both internally and externally with systems of customers or business partners To do this companies recognize they must negotiate ‘language differences’ –E.g. a system may have to port old COBOL applications to Java, reconcile interface discrepancies and interface with back-end legacy applications, often without documentation or past experience with those systems Tools are available to help Open systems etc.

46. ©2006 Barbara C. McNurlin. Published by Pearson Education. 9-46 Internet-Based Systems: Application Servers Originally conceived as a piece of middleware to link a Web server to applications on other company systems –The application server has grown into a framework for developing Internet-based applications Figure 9-6 shows the basic application server architecture. The virtual server takes requests from clients and Web servers (on the left), runs the necessary business logic & provides connectivity to the entire range of back-end systems (on the right) The goal of the application server: –automate –manage technical tasks in the development and running of Internet based applications The result: –Developers can focus more on business issues, rather than technical detail

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48. ©2006 Barbara C. McNurlin. Published by Pearson Education. 9-48 Internet-Based Systems: Java Development Platform Java has been in many cases the starting point for the development of Internet-based systems with an open system architecture. –Originally – developed to provide applets that run on Web clients Evolved into a full programming language Goal = Platform for independent language that could run on any system Promise applications portability: “write once, run anywhere” Didn’t live up to promise = evolved into a standard platform for developing server-side applications

49. ©2006 Barbara C. McNurlin. Published by Pearson Education. 9-49 Internet-Based Systems: Java Development Platform cont. Major components in Java server-side platform –Enterprise Java Beans (EJB) Preconfigured pieces of code that IS staff no longer have to build from scratch –Java 2 Enterprise Edition (J2EE) Defines a standard for developing Internet-based enterprise applications –Provide an alternative to building online business systems from scratch or buying packaged online business systems because of their multi-vendor platform capability and pre-built, reusable components Microsoft competes with its own versions: –Component Object Model (COM) –Distributed Component Object Model (DCOM)

50. ©2006 Barbara C. McNurlin. Published by Pearson Education. 9-50 Internet-Based Systems: Web Services The vision of Web Services is that modules of code can be assembled into services, which, in turn, can be linked to create a business process at the moment it is needed and run across enterprises, computing platforms, and data models There are two development modes: –One is to wrap an XML wrapper around an existing piece of code that performs a specific function Exposes it Then = give it a Internet address and let others use it – for a fee! –Second way to build a Web Service = use one someone else has already exposed The following case illustrates the basics of building a Web Service

51. ©2006 Barbara C. McNurlin. Published by Pearson Education. 9-51 BUILDING A WEB SERVICE Case Example Currency converter The steps involve: 1.Exposing the code 2.Writing a service description 3.Publishing the service 4.Finding the service, and 5.Invoking a Web Service

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53. ©2006 Barbara C. McNurlin. Published by Pearson Education. 9-53 BEKINS Case Example – Web Services Moving company which is using Web Services in its HomeDirectUSA business –Delivers large household appliances Uses some 1,000 independent agents –Formerly = faxed or phoned these agents to arrange delivery Slow and not equitable to all agents –Created an online broking system (TBE) Used to tender jobs to all agents Once accepted = unavailable to others

54. ©2006 Barbara C. McNurlin. Published by Pearson Education. 9-54 BEKINS Case Example – Web Services Results –Lower tendering costs –Faster customer service –Better utilization of agents’ trucks –So efficient = offer lower margin jobs to agents Increases shipping volume and revenues Bekins’ E-Commerce Platform Building the system –Required commitment from several moving partners = an interorganizational system Involvement = important but equally important was their comfort with Web Services

55. ©2006 Barbara C. McNurlin. Published by Pearson Education. 9-55 BUILDING A WEB SERVICE Preparing for On-The-Fly Web Services Development Whilst these can help enterprises develop systems faster, the technology might have other ramifications –CIOs would do well to prepare for Possibly another round of even more powerful, on-the-fly end user development –History repeating itself Spreadsheets 4GLs Web sites –Personal silos of data and apps –IS management can address ‘in advance’ this time! Else = Users will take development into their own hands as they have done so eagerly in the past

56. ©2006 Barbara C. McNurlin. Published by Pearson Education. 9-56 Conclusion Traditional approach from the 1960s evolved to give more discipline, control, and efficiency. –Moved programming from an “art” to a “craft.” –Problems: Development times Low user involvement Lack of flexibility 1970s and 1980s: data-driven development, stressed improving early phases in development: –4GL and software prototyping permitted more rapid development –CASE and object oriented (software re-use)

57. ©2006 Barbara C. McNurlin. Published by Pearson Education. 9-57 Conclusion cont. 1990s: –Client-server –Internet-based systems –Integration of components and packages The 1990s brought the need for integrated enterprise systems and Internet-based systems Development now focuses on the Internet, interorganizational development, and ecosystem applications –Systems where project management skills are even more important due to the complexity of the systems