1. 12.1 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 12: Information as a Critical Resource: Information Resource Management INFORMATION AS A CRITICAL RESOURCE: INFORMATION RESOURCE MANAGEMENT

2. 12.2 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 12: Information as a Critical Resource: Information Resource Management How can our company manage the various components of information resource management and the issues involved with each component?How can our company manage the various components of information resource management and the issues involved with each component? How can our company measure the business benefits of our information systems? What models should be used to measure that business value?How can our company measure the business benefits of our information systems? What models should be used to measure that business value? Why do so many system projects fail? What are the principal reasons for system failures?Why do so many system projects fail? What are the principal reasons for system failures? continued OBJECTIVES

3. 12.3 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 12: Information as a Critical Resource: Information Resource Management How should the organizational change surrounding a new system be managed to ensure success?How should the organizational change surrounding a new system be managed to ensure success? What strategies can our organization use to manage the system implementation process more effectively?What strategies can our organization use to manage the system implementation process more effectively? OBJECTIVES (continued)

4. 12.4 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 12: Information as a Critical Resource: Information Resource Management TRANSALTA CORPORATION ACHIEVES HIGH ROI ON HR SYSTEM

5. 12.5 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 12: Information as a Critical Resource: Information Resource Management 1.Managing the information systems function as a critical resource 2.Determining benefits and costs of a system when they are difficult to quantify 3.Dealing with the complexity of large-scale systems projects MANAGEMENT CHALLENGES

6. 12.6 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 12: Information as a Critical Resource: Information Resource Management Functions of the IS Department Manage computer operationsManage computer operations Manage systems development and systems development projectsManage systems development and systems development projects Manage IS personnelManage IS personnel Budget for the department and others in the organization who use computersBudget for the department and others in the organization who use computers Plan for strategic, tactical and operational level systems and for the IS department’s operationsPlan for strategic, tactical and operational level systems and for the IS department’s operations Justify financial investment in ISJustify financial investment in IS 12.1 INFORMATION RESOURCE MANAGEMENT The Information Systems Department

7. 12.7 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 12: Information as a Critical Resource: Information Resource Management 12.1 INFORMATION RESOURCE MANAGEMENT The Information Systems Department

8. 12.8 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 12: Information as a Critical Resource: Information Resource Management 12.1 INFORMATION RESOURCE MANAGEMENT The Information Systems Department Chief Information Officer (CIO)Chief Information Officer (CIO) –Strategic level manager of information systems for an organization MIS Steering CommitteeMIS Steering Committee –A strategic level committee composed of the CIO and other top managers who set IS policy and prioritize and review major IS projects

9. 12.9 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 12: Information as a Critical Resource: Information Resource Management 12.1 INFORMATION RESOURCE MANAGEMENT Managing Systems Development Systems OperatorsSystems Operators –IS personnel who operate the hardware Data Entry OperatorsData Entry Operators –IS personnel who enter data in a computer readable format Network ManagersNetwork Managers –IS personnel who supervise the operations of an organization’s network WebmastersWebmasters –IS personnel who supervise an organization’s web-based presence

10. 12.10 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 12: Information as a Critical Resource: Information Resource Management Capital Budgeting Process of analyzing and selecting various proposals for capital expendituresProcess of analyzing and selecting various proposals for capital expenditures 12. 2 UNDERSTANDING THE BUSINESS VALUE OF INFORMATION SYSTEMS Traditional Capital Budgeting Models

11. 12.11 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 12: Information as a Critical Resource: Information Resource Management Tangible Benefits Benefits that can be quantified and assigned a monetary valueBenefits that can be quantified and assigned a monetary value Include lower operational costs and increased cash flowsInclude lower operational costs and increased cash flows Intangible Benefits Benefits that are not easily quantifiedBenefits that are not easily quantified Include more efficient customer service and enhanced decision makingInclude more efficient customer service and enhanced decision making Traditional Capital Budgeting Models 12. 2 UNDERSTANDING THE BUSINESS VALUE OF INFORMATION SYSTEMS

12. 12.12 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 12: Information as a Critical Resource: Information Resource Management Traditional Capital Budgeting Models 12. 2 UNDERSTANDING THE BUSINESS VALUE OF INFORMATION SYSTEMS

13. 12.13 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 12: Information as a Critical Resource: Information Resource Management Limitations of Financial Models Do not express the risks and uncertainty of own cost and benefits estimatesDo not express the risks and uncertainty of own cost and benefits estimates 12. 2 UNDERSTANDING THE BUSINESS VALUE OF INFORMATION SYSTEMS Traditional Capital Budgeting Models

14. 12.14 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 12: Information as a Critical Resource: Information Resource Management Case Example: Primrose, Mendelson, and Hansen 12. 2 UNDERSTANDING THE BUSINESS VALUE OF INFORMATION SYSTEMS The Problem No automated way of tracking billable hoursNo automated way of tracking billable hours No secure method for communicationNo secure method for communication No client databaseNo client database No system to track costsNo system to track costs

15. 12.15 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 12: Information as a Critical Resource: Information Resource Management The Solution Local area networkLocal area network Lotus Notes to handle client accounting, document management, group collaboration, and e-mailLotus Notes to handle client accounting, document management, group collaboration, and e-mail Case Example: Primrose, Mendelson, and Hansen 12. 2 UNDERSTANDING THE BUSINESS VALUE OF INFORMATION SYSTEMS

16. 12.16 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 12: Information as a Critical Resource: Information Resource Management Case Example: Primrose, Mendelson, and Hansen 12. 2 UNDERSTANDING THE BUSINESS VALUE OF INFORMATION SYSTEMS

17. 12.17 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 12: Information as a Critical Resource: Information Resource Management Case Example: Primrose, Mendelson, and Hansen 12. 2 UNDERSTANDING THE BUSINESS VALUE OF INFORMATION SYSTEMS

18. 12.18 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 12: Information as a Critical Resource: Information Resource Management The Payback Method Measure of time required to pay back the initial investment on a projectMeasure of time required to pay back the initial investment on a project Accounting Rate of Return on Investment (ROI) Approximates the accounting income earned by the investmentApproximates the accounting income earned by the investment 12. 2 UNDERSTANDING THE BUSINESS VALUE OF INFORMATION SYSTEMS Case Example: Primrose, Mendelson, and Hansen

19. 12.19 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 12: Information as a Critical Resource: Information Resource Management Net Present Value Amount of money an investment is worth after considering its cost, earnings and the time value of moneyAmount of money an investment is worth after considering its cost, earnings and the time value of money Cost-Benefit Ratio Divides total benefits by total costsDivides total benefits by total costs 12. 2 UNDERSTANDING THE BUSINESS VALUE OF INFORMATION SYSTEMS Case Example: Primrose, Mendelson, and Hansen

20. 12.20 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 12: Information as a Critical Resource: Information Resource Management Profitability Index Compares profitability of alternative investments by dividing the present value of total cash inflow by initial costCompares profitability of alternative investments by dividing the present value of total cash inflow by initial cost Internal Rate of Return (IRR) Rate of return or profit an investment is expected to earnRate of return or profit an investment is expected to earn 12. 2 UNDERSTANDING THE BUSINESS VALUE OF INFORMATION SYSTEMS Case Example: Primrose, Mendelson, and Hansen

21. 12.21 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 12: Information as a Critical Resource: Information Resource Management Portfolio Analysis Analysis of portfolio of potential applications within a firmAnalysis of portfolio of potential applications within a firm Determines risks and benefitsDetermines risks and benefits Selects among alternatives for information systemsSelects among alternatives for information systems Strategic Considerations 12. 2 UNDERSTANDING THE BUSINESS VALUE OF INFORMATION SYSTEMS

22. 12.22 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 12: Information as a Critical Resource: Information Resource Management Strategic Considerations 12. 2 UNDERSTANDING THE BUSINESS VALUE OF INFORMATION SYSTEMS

23. 12.23 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 12: Information as a Critical Resource: Information Resource Management Scoring Models Method for deciding among alternative systems based on a system of ratingsMethod for deciding among alternative systems based on a system of ratings Real Options Pricing Models Models using techniques for valuing financial options to evaluate information technology investments with uncertain returnsModels using techniques for valuing financial options to evaluate information technology investments with uncertain returns Strategic Considerations 12. 2 UNDERSTANDING THE BUSINESS VALUE OF INFORMATION SYSTEMS

24. 12.24 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 12: Information as a Critical Resource: Information Resource Management Strategic Considerations 12. 2 UNDERSTANDING THE BUSINESS VALUE OF INFORMATION SYSTEMS

25. 12.25 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 12: Information as a Critical Resource: Information Resource Management Knowledge Value–Added Approach Focuses on knowledge input into a business processFocuses on knowledge input into a business process Determines costs and benefits of changes in business processes from new information systemsDetermines costs and benefits of changes in business processes from new information systems Strategic Considerations 12. 2 UNDERSTANDING THE BUSINESS VALUE OF INFORMATION SYSTEMS

26. 12.26 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 12: Information as a Critical Resource: Information Resource Management Productivity Measure of firm’s efficiency in converting inputs to outputsMeasure of firm’s efficiency in converting inputs to outputs Information Technology Contribution to productivity difficult to measureContribution to productivity difficult to measure Information Technology Investments and Productivity 12. 2 UNDERSTANDING THE BUSINESS VALUE OF INFORMATION SYSTEMS

27. 12.27 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 12: Information as a Critical Resource: Information Resource Management System FailureSystem Failure – –Information system does not perform as expected, or is not operational at a specified time Problem Areas:Problem Areas: – –Poor design – –Inaccurate data – –Excessive expenditure – –Breakdown in operations 12.3 IMPORTANCE OF CHANGE MANAGEMENT IN IS SUCCESS AND FAILURE Information System Problem Areas

28. 12.28 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 12: Information as a Critical Resource: Information Resource Management 12.3 IMPORTANCE OF CHANGE MANAGEMENT IN IS SUCCESS AND FAILURE Information System Problem Areas

29. 12.29 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 12: Information as a Critical Resource: Information Resource Management DesignDesign – –Fail to capture essential business requirements – –Poor user interface DataData – –Inaccurate or incomplete data CostCost – –Too costly to develop or operate OperationsOperations – –System does not run well 12.3 IMPORTANCE OF CHANGE MANAGEMENT IN IS SUCCESS AND FAILURE Information System Problem Areas

30. 12.30 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 12: Information as a Critical Resource: Information Resource Management 12.3 IMPORTANCE OF CHANGE MANAGEMENT IN IS SUCCESS AND FAILURE Change Management and the Concept of Implementation Implementation Organizational activities working towards adoption, management, and routinization of innovationOrganizational activities working towards adoption, management, and routinization of innovation Change Agent Individual acting as catalyst to ensure successful organizational adaptation to a new system or innovationIndividual acting as catalyst to ensure successful organizational adaptation to a new system or innovation

31. 12.31 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 12: Information as a Critical Resource: Information Resource Management Role of users in implementation processRole of users in implementation process Degree of management support for implementation effortDegree of management support for implementation effort Level of complexity and risk of implementation projectLevel of complexity and risk of implementation project Quality of management of implementation processQuality of management of implementation process Causes of Implementation Success and Failure 12.3 IMPORTANCE OF CHANGE MANAGEMENT IN IS SUCCESS AND FAILURE

32. 12.32 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 12: Information as a Critical Resource: Information Resource Management Causes of Implementation Success and Failure 12.3 IMPORTANCE OF CHANGE MANAGEMENT IN IS SUCCESS AND FAILURE

33. 12.33 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 12: Information as a Critical Resource: Information Resource Management Causes of Implementation Success and Failure 12.3 IMPORTANCE OF CHANGE MANAGEMENT IN IS SUCCESS AND FAILURE User–Designer Communications Gap Different backgrounds, interests, and prioritiesDifferent backgrounds, interests, and priorities Impedes communication and problem solving among end users and information systems specialistsImpedes communication and problem solving among end users and information systems specialists

34. 12.34 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 12: Information as a Critical Resource: Information Resource Management Causes of Implementation Success and Failure 12.3 IMPORTANCE OF CHANGE MANAGEMENT IN IS SUCCESS AND FAILURE

35. 12.35 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 12: Information as a Critical Resource: Information Resource Management Causes of Implementation Success and Failure 12.3 IMPORTANCE OF CHANGE MANAGEMENT IN IS SUCCESS AND FAILURE Management Support and Commitment Project requires backing and commitment of management at various levelsProject requires backing and commitment of management at various levels Helps project to be perceived positively by both users and technical information services staffHelps project to be perceived positively by both users and technical information services staff

36. 12.36 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 12: Information as a Critical Resource: Information Resource Management Causes of Implementation Success and Failure 12.3 IMPORTANCE OF CHANGE MANAGEMENT IN IS SUCCESS AND FAILURE Level of Complexity and Risk Project Size: Larger project has greater riskProject Size: Larger project has greater risk Project Structure: Clear and straightforward requirements help define outputs and processesProject Structure: Clear and straightforward requirements help define outputs and processes Experience with Technology: Project risk rises if project team and information system staff lack required technical expertiseExperience with Technology: Project risk rises if project team and information system staff lack required technical expertise

37. 12.37 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 12: Information as a Critical Resource: Information Resource Management Causes of Implementation Success and Failure 12.3 IMPORTANCE OF CHANGE MANAGEMENT IN IS SUCCESS AND FAILURE Management of the Implementation Process Improper management leads to:Improper management leads to: –Cost overruns –Unexpected time slippage –Technical shortfalls –Failure to obtain anticipated benefits

38. 12.38 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 12: Information as a Critical Resource: Information Resource Management Causes of Implementation Success and Failure 12.3 IMPORTANCE OF CHANGE MANAGEMENT IN IS SUCCESS AND FAILURE

39. 12.39 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 12: Information as a Critical Resource: Information Resource Management Causes of Implementation Success and Failure 12.3 IMPORTANCE OF CHANGE MANAGEMENT IN IS SUCCESS AND FAILURE Why Are Projects Managed Poorly? Ignorance and optimismIgnorance and optimism The mythical “man-month”The mythical “man-month” Falling behind: bad news travels slowly upwardFalling behind: bad news travels slowly upward

40. 12.40 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 12: Information as a Critical Resource: Information Resource Management System Challenges of Mergers and Acquisitions Integrating systemsIntegrating systems Organizational characteristicsOrganizational characteristics Information technology infrastructuresInformation technology infrastructures Change Management Challenges 12.3 IMPORTANCE OF CHANGE MANAGEMENT IN IS SUCCESS AND FAILURE

41. 12.41 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 12: Information as a Critical Resource: Information Resource Management High Failure RatesHigh Failure Rates – –Enterprise system, BPR, CRM, and SCM implementations HurdlesHurdles – –Extensive change required in organizational culture and business processes Change Management Challenges 12.3 IMPORTANCE OF CHANGE MANAGEMENT IN IS SUCCESS AND FAILURE

42. 12.42 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 12: Information as a Critical Resource: Information Resource Management Managing Technical ComplexityManaging Technical Complexity – –Usage of internal integration tools to ensure operation of implementation team Formal Planning and Control ToolsFormal Planning and Control Tools – –Structures and sequences tasks, monitors progress towards fulfillment of goals 12.4 MANAGING IMPLEMENTATION Controlling Risk Factors

43. 12.43 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 12: Information as a Critical Resource: Information Resource Management 12.4 MANAGING IMPLEMENTATION Controlling Risk Factors

44. 12.44 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 12: Information as a Critical Resource: Information Resource Management Increasing User Involvement and Overcoming User ResistanceIncreasing User Involvement and Overcoming User Resistance – –External integration tools link work of implementation team to that of users at all organizational levels Counterimplementation:Counterimplementation: – –Deliberate strategy to thwart an implementation effort Controlling Risk Factors 12.4 MANAGING IMPLEMENTATION

45. 12.45 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 12: Information as a Critical Resource: Information Resource Management Designing for the Organization 12.4 MANAGING IMPLEMENTATION Organizational Impact AnalysisOrganizational Impact Analysis –Study of the way a proposed system will affect organizational structure, attitudes, decision making, and operations

46. 12.46 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 12: Information as a Critical Resource: Information Resource Management Designing for the Organization 12.4 MANAGING IMPLEMENTATION

47. 12.47 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 12: Information as a Critical Resource: Information Resource Management Allowing for the Human Factor Ergonomics: interaction of people and machines in work environmentErgonomics: interaction of people and machines in work environment Sociotechnical Design Produces information system blending technical efficiency with sensitivity to organizational and human needsProduces information system blending technical efficiency with sensitivity to organizational and human needs Designing for the Organization 12.4 MANAGING IMPLEMENTATION

48. 12.48 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 12: Information as a Critical Resource: Information Resource Management Project planning is an enterprise-wide focusProject planning is an enterprise-wide focus Managers focus on solving problems as they arise and meeting challengesManagers focus on solving problems as they arise and meeting challenges Fourth-Generation Project Management 12.4 MANAGING IMPLEMENTATION

49. 12.49 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 12: Information as a Critical Resource: Information Resource Management INFORMATION AS A CRITICAL RESOURCE: INFORMATION RESOURCE MANAGEMENT