Download - AIS investment process - Aalto
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The AIS investment process
by Arpine MaghakyanLecture 4
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I
Investment process
II
Develop or buy AIS?
iIn-House system
iiPurchasing software
package
Maintenance
III
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I. Investment process
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Process to the new AIS
Identifying needs
Choosing Software
Buying Hardware
TrainingTransferring
data
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What are the benefits of the new AIS?Why invest in a new AIS?
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Saves time
Real time
reporting
Simplifies decision making
Reduces errors
AIS benefitsH
idden
in p
re-le
ctu
revers
ion
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What to do before choosing a new software?
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Right timing
Right timingNot the busiest period of the year
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Industry specific requirementsAre there industry specific requirements?
What are the most used options in the similar businesses?
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Is vendor following the legislation changes in the region?
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Needs to make changes in your business process
Are you planning to make changes in your business processes? If yes, then it would be better to take them into account before customizing
the new AIS
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New team or new skills?Are your employees ready to learn new software or you need new
people who already have it?
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Homework discussion 1
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Why Behavioral Problems Occur?
• Fear• Of failure, the unknown, losing
status
• Lack of top-management support
• If the top management is not supportive why should the employee change?
• Bad prior experiences• Bad experience with prior IS
changes
• Poor communication• Employees need to understand
why change is necessary
• Disruption
• Additional requests for information and additional burdens of time is distracting and prompts negative feelings
• Manner change is introduced
• Approaches are different for top level and lower level employees
• Biases and emotions
• Personal characteristics and background
• Age
• Open to technology and comfortable with it
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How to Prevent Behavioral Problems
• Management support• Provide resources and motivation
• Satisfy user needs
• Involve users• Participation improves
communication and commitment
• Reduce fears, emphasize opportunities
• Avoid emotionalism
• Provide training
• Performance evaluation
• Reevaluate to ensure performance standards are consistent with the new system
• Keep open communications
• Test the system prior to implementation
• Keep system simple
• Avoid radical changes
• Control user’s expectations
• Be realistic
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Source: McKinsey Global Institute, Digital America® 43, figure 14. © McKinsey & Company 2015
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Backup plan in case change is not smooth
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Before making the decision check listChoose right
timing
Industry specific
requirements
Consistency with
legislation
Needs to make changes in
your business process
Need for new employees or
new skills
Be ready for the change
Backup plan in case change is
not smooth
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Gallery walk
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II. Develop or buy AIS?
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Requirements AIS should satisfy
Usefulness
Economy
Reliability
Availability
Timeliness
Customer service
Capacity
Ease of use
Flexibility
Tractability
Auditability
Security
Hid
den
in p
re-le
ctu
revers
ion
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Learning materials
Trainings
Documentation
Online forums
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Integration with other systems
Taxation,
Internet banking
B2B, B2C portals
Logistics
CRM
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Payment models
Per user
Per transaction
Per module
For updates and services
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To buy or to develop AIS?
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II.i. In-House Information Systems
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5 key elements of system development life cycle
Systems Analysis
Conceptual Design
Physical Design
Implementation and Conversion
Operation and Maintenance
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Communication Problems
Source: Marshall B.R., Paul J.S.® 634, figure 20-5. © 2018 by Pearson Education, Inc.
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Conceptual Systems Design
Evaluating design
alternatives
Preparing design
specifications
Preparing conceptual
systems design report
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Physical Systems Design
• Output design (e.g., reports)
• File and database design
• Input design (e.g., forms, computer screen input)
• Program design
• Procedures design
• Control design
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Program Design
• Determine user needs
• Create and document development plan
• Write the computer code
• Test the program
• Document the program
• Train users
• Install the system (including components and hardware)
• Use and modify the system
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Systems Implementation
• Implementation plan
• Select and train personnel
• Complete documentation
• Development documentation
• Operations documentation
• User documentation
• Testing the system
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Testing the System
• Walk-throughs
• Step by step review
• Processing test data
• Test all valid transactions and error conditions
• Acceptance tests
• Use copies of real data
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Systems Conversion
• Direct conversion
• Terminates the old and begins with the new system
• Parallel conversion
• Operate old and new systems for a period of time
• Phase-in conversion
• Gradual replacement of old elements with new system elements
• Pilot conversion
• Implement a system in a part of an organization (e.g., a branch)
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Feasibility analysisEconomic: Will system benefits justify the time, money, and resources required to implement it?
Technical: Can the system be developed and implemented using existing technology?
Legal: Does the system comply with all applicable laws, administrative agency regulations, and contractual obligations?
Scheduling: Can the system be developed and implemented in the time allotted?
Operational: Does the organization have access to people who can design, implement, and operate the proposed system? Will people use the system?
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Discuss examples of systems analysis decisions thatinvolve a trade-off between:
a. economy and usefulness
b. economy and reliability
c. economy and customer service
d. simplicity and usefulness
e. simplicity and reliability
f. economy and capacity
g. economy and flexibility
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II.ii. Purchasing software packages
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Software Evaluation 1/2
Does the software meet all mandatory and desirablespecifications?
Will program modifications be required to meet company needs?
Does the software have adequate control capabilities?
Is the performance (speed, accuracy, reliability) adequate?
How many companies use the software? Are they satisfied?
Is documentation adequate?
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Software Evaluation 2/2
Is the software compatible with existing software?
Was the software demonstration/test-drive adequate?
Does the software have an adequate warranty?
Is the software flexible, easily maintained, and user-friendly?
Is online inquiry of files and records possible?
Will the vendor keep the package up to date?
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Software package
Standard packages
Customized packages
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Vendor Evaluation 1/2
How long has the vendor been in business?
Is the vendor financially stable and secure?
How experienced is the vendor with the hardware and software?
Does the vendor stand behind its products?
How good is its warranty?
Does the vendor regularly update its products?
Will the vendor put promises in a contract?
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Vendor Evaluation 2/2
Will the vendor supply a list of customer references?
Does the vendor have a reputation for reliability and dependability?
Does the vendor provide timely support and maintenance?
Does the vendor provide implementation and installation support?
Does the vendor have high-quality, responsive, and experienced personnel?
Does the vendor provide training?
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III. Maintenance
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Maintenance
By software owner
Outsourcing
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End-User Computing
Advantages Disadvantages
• Allows for end-users to create, control, and implement simple systems
• More likely to meet user needs
• Saves time
• Frees up system resources
• Easy to use and understand
• Lack of testing of application and possible calculation errors
• Inefficient systems
• Poorly controlled
• Poorly documented
• System incompatibilities
• Duplication of data
• Increase costs in later years with upgrades
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Outsourcing
Advantages Disadvantage• Allows companies to concentrate on core
competencies• Asset utilization• Access to greater expertise and better
technology• Lower costs by standardizing user
applications and splitting development and maintenance costs between projects
• Less development time• Elimination of peaks-and-valleys usage• Facilitates downsizing
• Inflexibility• Loss of control• Reduced competitive advantage• Locked-in system• Unfulfilled goals• Poor service• Increased risk
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Thank you!Questions?