Management Information Systems II

Oskar Szumski, PhDUniversity of Warsaw Faculty of Managementoskar.szumski@uw.edu.pl

Agenda

• IT Infrastructure and Emerging Technologies• Telecommunications, the Internet and Wireless

Technology• Information Systems, Organizations, and

Strategy• Technology management• Building Information Systems• Enterprise Architecture, IT Governance and IT

Portfolio Management

• Computer systems are complex and often link multiple traditional systems potentially supplied by different software vendors

• Common dilemma is how to use IT in effective and efficient way

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IT Infrastructure and EmergingTechnologies

IT infrastructure

• IT infrastructure consists of a set of physical devices and software applications that are required to operate the entire enterprise

Connection between the firm, IT infrastructure and business capabilities

Stages in IT Infrastructure evolution_1

Stages in IT Infrastructure evolution_2

Technology drivers of infrastructure evolution_1

Moore’s Law and Microprocessing Power• In 1965, Gordon Moore, the directory of Fairchild Semiconductor’s Research and

Development Laboratories, an early manufacturer of integrated circuits, wrote in Electronics magazine that since the first microprocessor chip was introduced in 1959, the number of components on a chip with the smallest manufacturing costs per component (generally transistors) had doubled each 18 months. This law would later be interpreted in multiple ways. There are at least three variations of Moore’s Law, none of which Moore ever stated:

• (1) the power of microprocessors doubles every 18 months; • (2) computing power doubles every 18 months;• (3) the price of computing falls by half every 18 months year. This assertion became

the foundation of Moore’s Law. Moore later reduced the rate of growth to a doubling every two years

The Law of Mass Digital Storage• The world produces as much as 5 exabytes of unique information per year (an

exabyte is a billion gigabytes, or 1018 bytes). The amount of digital information is roughly doubling every year (Lyman and Varian, 2003). Fortunately, the cost of storing digital information is falling at an exponential rate of 100 percent a year.

• The number of kilobytes that can be stored on magnetic media for $1 from 1950 to the present roughly doubled every 15 months

Technology drivers of infrastructure evolution_2

Metcalfe’s Law and Network Economics• Robert Metcalfe - inventor of Ethernet local area network technology -

claimed in 1970 that the value or power of a network grows exponentially as a function of the number of network members. Metcalfe and others point to the increasing returns to scale that network members receive as more and more people join the network. As the number of members in a network grows linearly, the value of the entire system grows exponentially and continues to grow forever as members increase. Demand for information technology has been driven by the social and business value of digital networks, which rapidly multiply the number of actual and potential links among network members

Declining Communications Costs and the Internet• Continues declining cost of communication both over the Internet and over

telephone networks (which increasingly are based on the Internet). As communication costs fall toward a very small number and approach 0, utilization of communication and computing facilities explodes.

How many people worldwide have now Internet access?

• 1

• 10

• 100

• 1000

• 10000

• 100000

• 1000000……?

Yes – it’s truth!WORLD INTERNET USAGE AND POPULATION STATISTICS

June 30, 2012 *World Regions Population (2012

Est.)Internet Users (Dec. 31, 2000)

Internet Users (Latest Data)

Penetration (% population)

Growth 2000-2012

Users % of Table

Africa 1,073,380,925 4,514,400 167,335,676 15.6 % 3,606.7 % 7.0 %

Asia 3,922,066,987 114,304,000 1,076,681,059 27.5 % 841.9 % 44.8 %

Europe 820,918,446 105,096,093 518,512,109 63.2 % 393.4 % 21.5 %

Middle East 223,608,203 3,284,800 90,000,455 40.2 % 2,639.9 % 3.7 %

North America 348,280,154 108,096,800 273,785,413 78.6 % 153.3 % 11.4 %

Latin America / Carib. 593,688,638 18,068,919 254,915,745 42.9 % 1,310.8 % 10.6 %

Oceania / Australia 35,903,569 7,620,480 24,287,919 67.6 % 218.7 % 1.0 %

WORLD TOTAL 7,017,846,922 360,985,492 2,405,518,376 34.3 % 566.4 % 100.0 %

* http://www.internetworldstats.com/stats.htm

The IT infrastructure ecosystem

Contemporary hardware platform trends

• the emerging mobile digital platform (smartphones, netbooks, and tablet computers)

• grid computing• virtualization• cloud computing• green computing• autonomic computing• high-performance and power-saving processors

Contemporary software platform trends

• Linux and open source software

• software for the web: JAVA and AJAX

• web services and service-oriented architecture

• software outsourcing and cloud services

Making wise infrastructure investments

• Total cost of ownership (TCO) of technology assets - hardware and software acquisition costs account for only about 20% of TCO

Infrastructure component Cost components

Hardware acquisition Purchase price of computer hardware equipment, including computers, terminals, storage,and printers

Software acquisition Purchase or license of software for each user

Installation Cost to install computers and software

Training Cost to provide training for information systems specialists and end users

Support Cost to provide ongoing technical support, help desks, and so forth

Maintenance Cost to upgrade the hardware and software

Infrastructure Cost to acquire, maintain, and support related infrastructure, such as networks and specialized equipment (including storage backup units)

Downtime Cost of lost productivity if hardware or software failures cause the system to be unavailable for processing and user tasks

Space and energy Real estate and utility costs for housing and providing power for the technology

Total Cost of Ownership (TCO) cost components

Competitive forces model for IT infrastructure

Telecommunications, the Internet, and Wireless Technology

Corporate network infrastructure

Physical transmission media

• Twisted wire

• Coaxial cable

• Fiber optics and optical networks

• Wireless transmission media (microwave, cellular, Wi-Fi)

The global internet

• The Internet has become the world’s most extensive, public communication system that now rivals the global telephone system in reach and range.

• It’s also the world’s largest implementation of client/server computing and internetworking, linking millions of individual networks all over the world.

Internet – how does it work?

• An Internet service provider (ISP) is a commercial organization with a permanent connection to the Internet that sells temporary connections to retail subscribers

• Internet Protocol (IP) address• Domain Name System (DNS) converts domain names to

IP addresses• Internet policies are established by a number of

professional organizations and government bodies, including the Internet Architecture Board (IAB), which helps define the overall structure of the Internet; the Internet Corporation for Assigned Names and Numbers (ICANN), which assigns IP addresses; and the World Wide Web Consortium (W3C), which sets Hypertext Markup Language and other programming standards for the Web

Major internet services

CAPABILITY FUNCTIONS SUPPORTED

E-mail Person-to-person messaging; document sharing

Chatting and instant messaging Interactive conversations

Newsgroups Discussion groups on electronic bulletin boards

Telnet Logging on to one computer system and doing work on another

File Transfer Protocol (FTP) Transferring files from computer to computer

World Wide Web Retrieving, formatting, and displaying information (including text,audio, graphics, and video) using hypertext links

The Web - components

• Hypertext Markup Language (HTML)

• Web Servers

• Search Engines

• Web 2.0

• Web 3.0 - The Future Web?

Web 1.0 / 2.0 / 3.0 summary

http://www.skarbiecmennicy.pl

Radio-frequency identification (RFID)

• RFID is an automatic identification method, relying on storing and remotely retrieving data using devices called RFID tags or transponders. The technology requires some extent of cooperation of an RFID reader and an RFID tag.

• An RFID tag is an object that can be applied to or incorporated into a product, animal, or person for the purpose of identification and tracking using radio waves. Some tags can be read from several meters away and beyond the line of sight of the reader.

RFID tag

• Most RFID tags contain at least two parts. One is an integrated circuit for storing and processing information, modulating and demodulating a radio-frequency (RF) signal, and other specialized functions. The second is an antenna for receiving and transmitting the signal.

• Size of tags: from 0,05 mm × 0,05 mm

• Working distance: from 0,1m to 10m

Types of RFID tags

• RFID tags come in three general varieties:– passive (tags require no internal power

source, they are only active when a reader is nearby to power them by wireless illumination),

– active (tags require a power source, usually a small battery),

– beacon (tags transmit autonomously with a certain blink pattern and do not respond to interrogation)

Communication

• To communicate, tags respond to queries generating signals that must not create interference with the readers, as arriving signals can be very weak and must be differentiated. Besides backscattering, load modulation techniques can be used to manipulate the reader's field. Typically, backscatter is used in the far field, whereas load modulation applies in the nearfield, within a few wavelengths from the reader.

RFID technology in practice

RFID reader sends a radio signal

Tag sends data to the RFID transmitter

signal transfer

API (Application Programming Interface)

Database layer Application Layer (eg. ERP)

RFID: tag-reader-computer

RFID Reference Model

• Created in 2007 by CE RFID (Coordinating European Efforts for Promoting the European RFID Value Chain)

• It covers to areas:– Mainly Object Tagging– Tagging with Reference or Potential

Reference to Individuals

RFID Reference Model

RFID - Mainly object tagging

RFID - Tagging with reference to individuals

Example: Intel Connected Store

Information Systems, Organizations, and Strategy

The two-way relationship between organizations and information technology

Features of organizations

Routines and Business Processes• Routines (standard operating procedures) are precise

rules, procedures, and practices that have been developed to cope with virtually all expected situations

• Business processes are collections of such routinesOrganizational Politics• political struggle for resources, competition, and conflicts

within organizationOrganizational CultureOrganizational EnvironmentsOrganizational StructureOther Features

Disruptive technologies: winners and losers

Technology Description Winners and losers

Microprocessor chips (1971)

Thousands and eventually millions of transistors on a silicon chip

Microprocessor firms win (Intel, Texas Instruments) while transistor firms (GE) decline.

Personal computers (1975)

Small, inexpensive, but fully functional desktop computers

PC manufacturers (HP, Apple, IBM), and chip manufacturers prosper (Intel), while mainframe (IBM) and minicomputer (DEC) firms lose.

PC word processing software (1979)

Inexpensive, limited but functional text editing and formatting for personal computers

PC and software manufacturers (Microsoft, HP, Apple) prosper, while the typewriter industry disappears.

World Wide Web (1989)

A global database of digital files and “pages” instantly available

Owners of online content and news benefit, while traditional publishers (newspapers, magazines, broadcast television) lose.

Internet music services (1998)

Repositories of downloadable music on the Web with acceptable fidelity

Owners of online music collections (MP3.com, iTunes), telecommunications providers who own Internet backbone (AT&T, Verizon), local Internet service providers win, while record label firms and music retailers lose (Tower Records).

PageRank algorithm

A method for ranking Web pages in terms of their popularity to supplement Web search by key terms

Google is the winner (they own the patent), while traditional key word search engines (Alta Vista) lose.

Software as Web service

Using the Internet to provide remote access to online software

Online software services companies (Salesforce.com) win, while traditional “boxed” software companies (Microsoft, SAP, Oracle) lose.

How information systems impact organizations

Economic impacts• IT reduces both agency and transaction costs for firms, we

should expect firm size to shrink over time as more capital is invested in IT. Firms should have fewer managers, and we expect to see revenue per employee increase over time

Organizational and behavioral impacts• IT flattens organizations (IT pushes decision-making rights lower

in the organization because lower-level employees receive the information they need to make decisions without supervision)

• Postindustrial organizations (authority increasingly relies on knowledge and competence, and not merely on formal positions)

• Understanding organizational resistance to changeThe internet and organizations• The Internet increases the accessibility, storage, and distribution

of information and knowledge for organizations

Implications for the design of information systems

Organizational factors necessary to consider during planning a new system:

• environment in which the organization must function• structure of the organization: hierarchy, specialization,

routines, and business processes• organization’s culture and politics• type of organization and its style of leadership• principal interest groups affected by the system and the

attitudes of workers who will be using the system• kinds of tasks, decisions, and business processes that

the information system is designed to assist

Porter’s competitive forces model

Information system strategies for dealing with competitive forces

• Low-cost leadership - Use information systems to achieve the lowest operational costs and the lowest prices

• Product differentiation - Use information systems to enable new products and services, or greatly change the customer convenience in using your existing products and services.– mass customization - ability to offer individually tailored products or

services using the same production resources as mass production• Focus on market niche - Use information systems to

enable a specific market focus, and serve this narrow target market better than competitors

• Strengthen customer and supplier intimacy - Use information systems to tighten linkages with suppliers and develop intimacy with customers.

Impact of the internet on competitive forces and industry structure

Competitive force

Impact of the internet

Substitute products or services

Enables new substitutes to emerge with new approaches to meeting needs and performing functions

Customers’ bargaining power

Availability of global price and product information shifts bargaining power to customers

Suppliers’ bargaining power

Procurement over the Internet tends to raise bargaining power over suppliers; suppliers can also benefit from reduced barriers to entry and from the elimination of distributors and other intermediaries standing between them and their users

Threat of new entrants The Internet reduces barriers to entry, such as the need for a sales force, access to channels, and physical assets; it provides a technology for driving business processes that makes other things easier to do

Positioning and rivalry among existing competitors

Widens the geographic market, increasing the number of competitors, and reducing differences among competitors; makes it more difficult to sustain operational advantages; puts pressure to compete on price

The business value chain model• The value chain model highlights specific activities in the

business where competitive strategies can best be applied and where information systems are most likely to have a strategic impact

• Primary activities are most directly related to the production and distribution of the firm’s products and services, which create value for the customer

• Support activities make the delivery of the primary activities possible

• Benchmarking involves comparing the efficiency and effectiveness of your business processes against strict standards and then measuring performance against those standards

• Industry best practices are usually identified by consulting companies and research organizations as the most successful solutions or problem-solving methods for consistently and effectively achieving a business objective

The value chain model

Extending the Value Chain – The Value Web

• A value web is a collection of independent firms that use information technology to coordinate their value chains to produce a product or service for a market collectively

• It is more customer driven and operates in a less linear fashion than the traditional value chain

The value web

Network-based strategiesNetwork Economics• Business models based on a network may help firms strategically by taking

advantage of network economics. In a network law of diminishing returns does not work - the marginal costs of adding another participant are about zero, whereas the marginal gain is much larger

Virtual Company Model• Virtual organization, uses networks to link people, assets, and ideas,

enabling it to ally with other companies to create and distribute products and services without being limited by traditional organizational boundaries or physical locations. One company can use the capabilities of another company without being physically tied to that company

Business Ecosystems: Keystone and Niche Firms• Business ecosystem is term for loosely coupled but interdependent

networks of suppliers, distributors, outsourcing firms, transportation service firms, and technology manufacturers. Business ecosystems can be characterized as having one or a few keystone firms that dominate the ecosystem and create the platforms used by other niche firms

An ecosystem strategic model

Using systems for competitive advantage

• Sustaining competitive advantage

• Aligning it with business objectives

• Managing strategic transitions

Technology Management

• Technology Management can be defined as the integrated planning, design, optimization, operation and control of technological products, processes and services.

• Technology Management is set of management disciplines that allows organization to manage its technological fundamentals to create competitive advantage.

• Role of technology management function in organization is to understand the value of certain technology for the organization. Continuous development of technology is valuable as long as there is a value for the customer and therefore technology management function in organization should be able to argue when to invest on technology development and when to withdraw.

Typical concepts used in technology management

• technology strategy (a logic or role of technology in organization),

• technology mapping (identification of possible relevant technologies for the organization),

• technology roadmapping (a limited set of technologies suitable for business),

• technology project portfolio (a set of projects under development),

• technology portfolio (a set of technologies in use).

Technology Strategy

Technology mapping

Technology roadmap for systems beyond 3G

Technology portfolio - example

• JK Technosoft (JKT) is a global software & solutions company that is driven by the simple yet powerful tenet of providing ‘total customer satisfaction’

• http://www.jktech.com/cms/web/publishing/fullPreview&pageContent=88

generations.arc.nasa.gov

How can we forecast future?

?

Building Information Systems

4 kinds of structural organizational change enabled by IT

1. Automation– Increase efficiency, replace manual tasks

2. Rationalization– Streamline standard operating procedures

3. Business process reengineering (BPR)– Analyze, simplify, and redesign business processes

4. Paradigm shifts– Rethink nature of business, define new business

model, change nature of organization

The most common forms of organizational change are automation and rationalization. These relatively slow-moving and slow-changing strategies present modest returns but little risk. Faster and more comprehensive change—such as reengineering and paradigm shifts—carries high rewards but offers substantial chances of failure.

Organizational change carries risks and rewards

Steps in effective reengineering

• Determine which business processes should be improved

• Must avoid becoming good at the wrong process

• Understand how improving the right processes will help the firm execute its business strategy

• Understand and measure performance of existing processes as a baseline

• Even with effective BPR, majority of reengineering projects do not achieve breakthrough gains because of inadequate change management

Business process management (BPM)

• Helps firms manage incremental process changes

• Uses process-mapping tools to:– Identify and document existing processes – Create models of improved processes that

can be translated into software systems– Measure impact of process changes on key

business performance indicators

Capabilities of BPM software

• Work flow management

• Business process modeling notation

• Quality measurement and management

• Change management

• Tools for standardizing business processes (they can be continually manipulated)

• Process monitoring and analytics (verifies process performance and measures impact of process changes on key business performance indicators)

Quality management

• Fine-tuning business processes to improve quality in their products, services, and operations

• The earlier in the business cycle a problem is eliminated, the less it costs the company

• Quality improvements raise level of product and service quality as well as lower costs

Quality management (cont.)

• Total Quality Management (TQM): – Achievement of quality control is end in itself– Everyone is expected to contribute to improvement of

quality– Focuses on continuous improvements rather than dramatic

bursts of change

• Six sigma: – Specific measure of quality– 3.4 defects per million opportunities– Uses statistical analysis tools to detect flaws in the

execution of an existing process and make minor adjustments

Information systems support quality improvements

• Simplify products or processes• Make improvements based on customer

demands• Reduce cycle time• Improve quality and precision of design and

production• Meet benchmarking standards

– Benchmarking: Setting strict standards for products, services, and other activities, and then measuring performance against those standards

Overview of systems development

• Systems development - activities that go into producing an information system solution to an organizational problem or opportunity

• Systems analysis• Systems design• Programming• Testing• Conversion• Production and maintenance

Building a system can be broken down into six core activities.

The Systems Development Process

Systems analysis

• Analysis of problem that will be solved by system– Defining the problem and identifying causes– Specifying solutions

• Systems proposal report identifies and examines alternative solutions

– Identifying information requirements

• Includes feasibility study– Is solution feasible from financial, technical,

organizational standpoint– Is solution a good investment?– Is required technology, skill available?

System analysis (cont.)

• Establishing information requirements– Who needs what information, where, when,

and how– Define objectives of new/modified system– Detail the functions new system must perform

• Faulty requirements analysis is leading cause of systems failure and high systems development cost

Systems design

• Describes system specifications that will deliver functions identified during systems analysis

• Should address all managerial, organizational, and technological components of system solution

• Role of end users– User information requirements drive system building– Users must have sufficient control over design process to

ensure that system reflects their business priorities and information needs

– Insufficient user involvement in design effort is major cause of system failure

OUTPUTMediumContentTiming

INPUTOriginsFlowData entry

USER INTERFACESimplicityEfficiencyLogicFeedbackErrors

DATABASE DESIGNLogical data modelVolume and speed requirementsFile organization and designRecord specifications

PROCESSINGComputationsProgram modulesRequired reportsTiming of outputs

MANUAL PROCEDURESWhat activitiesWho performs themWhenHowWhere

CONTROLSInput controls (characters, limit, reasonableness)Processing controls (consistency, record counts)Output controls (totals, samples of output)Procedural controls (passwords, special forms)

SECURITYAccess controlsCatastrophe plansAudit trails

DOCUMENTATIONOperations documentationSystems documentsUser documentation

CONVERSIONTransfer filesInitiate new proceduresSelect testing methodCut over to new system

TRAININGSelect training techniquesDevelop training modulesIdentify training facilities

ORGANIZATIONAL CHANGESTask redesignJob redesignProcess designOrganization structure designReporting relationships

Design specifications

Programming and testing

• Programming: – System specifications from design stage are translated into

software program code– Software may be purchased, leased, or outsourced instead

• Testing – To ensure system produces right results– Unit testing: Tests each program in system separately– System testing: Tests functioning of system as a whole – Acceptance testing: Makes sure system is ready to be used in

production setting– Test plan: All preparations for series of tests

Conversion

• Process of changing from old system to new system• Four main strategies

– Parallel strategy– Direct cutover– Pilot study– Phased approach

• Requires end-user training• Finalization of detailed documentation showing how

system works from technical and end-user standpoint

Production and maintenance

• System reviewed to determine if any revisions needed• May prepare formal postimplementation audit document• Maintenance

– Changes in hardware, software, documentation, or procedures to a production system to correct errors, meet new requirements, or improve processing efficiency

– 20% debugging, emergency work

– 20% changes to hardware, software, data, reporting

– 60% of work: User enhancements, improving documentation, recoding for greater processing efficiency

CORE ACTIVITY DESCRIPTION

Systems analysis Identify problem(s)Specify solutionsEstablish information requirements

Systems design Create design specifications

Programming Translate design specifications into code

Testing Unit testSystems testAcceptance test

Conversion Plan conversionPrepare documentationTrain users and technical staff

Production and maintenance

Operate the systemEvaluate the systemModify the system

Summary of systems development activities

Methodologies for modeling

• Most prominent methodologies for modeling and designing systems:– Structured methodologies– Object-oriented development

• Structured methodologies– Structured: Techniques are step-by-step, progressive– Process-oriented: Focusing on modeling processes or

actions that manipulate data– Separate data from processes

Methods

• Data flow diagram:– Primary tool for representing system’s component processes

and flow of data between them– Offers logical graphic model of information flow– High-level and lower-level diagrams can be used to break

processes down into successive layers of detail

• Data dictionary: Defines contents of data flows and data stores

• Process specifications: Describe transformation occurring within lowest level of data flow diagrams

• Structure chart: Top-down chart, showing each level of design, relationship to other levels, and place in overall design structure

Object-oriented development

• Uses object as basic unit of systems analysis and design• Object:

• Combines data and the specific processes that operate on those data

• Data encapsulated in object can be accessed and modified only by operations, or methods, associated with that object

• Object-oriented modeling based on concepts of class and inheritance• Objects belong to a certain class and have features of that class• May inherit structures and behaviors of a more general, ancestor

class

Object-oriented development

• More iterative and incremental than traditional structured development

• Because objects reusable, object-oriented development can potentially reduce time and cost of development

• Phases:– Systems analysis: Interactions between system and users

analyzed to identify objects – Design phase: Describes how objects will behave and interact;

grouped into classes, subclasses and hierarchies– Implementation: Some classes may be reused from existing

library of classes, others created or inherited

Computer-aided software engineering (CASE)

• Software tools to automate development and reduce repetitive work, including– Graphics facilities for producing charts and diagrams

– Screen and report generators, reporting facilities

– Analysis and checking tools

– Data dictionaries

– Code and documentation generators

• Support iterative design by automating revisions and changes and providing prototyping facilities

• Require organizational discipline to be used effectively

Alternative Systems-Building Methods

• Traditional systems life-cycle

• Prototyping

• End-user development

• Application software packages

• Outsourcing

Traditional systems lifecycle

• Oldest method for building information systems• Phased approach - divides development into formal

stages– Follows “waterfall” approach: Tasks in one stage finish before

another stage begins

• Maintains formal division of labor between end users and information systems specialists

• Emphasizes formal specifications and paperwork• Still used for building large complex systems• Can be costly, time-consuming, and inflexible

Prototyping

• Building experimental system rapidly and inexpensively for end users to evaluate

• Prototype: Working but preliminary version of information system– Approved prototype serves as template for final

system

• Steps in prototyping• Identify user requirements• Develop initial prototype• Use prototype• Revise and enhance prototype

Prototyping (cont.)

• Advantages of prototyping– Useful if some uncertainty in requirements or design

solutions– Often used for end-user interface design– More likely to fulfill end-user requirements

• Disadvantages– May gloss over essential steps– May not accommodate large quantities of data or

large number of users– May not undergo full testing or documentation

End-user development

• Uses fourth-generation languages to allow end-users to develop systems with little or no help from technical specialists

• Fourth generation languages: Less procedural than conventional programming languages– PC software tools– Query languages– Report generators– Graphics languages– Application generators– Application software packages– Very high-level programming languages

End-user development (cont.)

• Advantages: – More rapid completion of projects– High-level of user involvement and satisfaction

• Disadvantages: – Not designed for processing-intensive applications– Inadequate management and control, testing,

documentation– Loss of control over data

• Managing end-user development– Require cost-justification of end-user system projects– Establish hardware, software, and quality standards

Application software packages

• Save time and money

• Many packages offer customization features:

• Allow software package to be modified to meet unique requirements without destroying integrity of package software

• Evaluation criteria for systems analysis include:

• Functions provided by the package, flexibility, user friendliness, hardware and software resources, database requirements, installation and maintenance efforts, documentation, vendor quality, and cost

• Request for Proposal (RFP)

• Detailed list of questions submitted to packaged-software vendors

• Used to evaluate alternative software packages

Outsourcing

Several types– Cloud and SaaS providers

• Subscribing companies use software and computer hardware provided by vendors

– External vendors• Hired to design, create software• Domestic outsourcing

– Driven by firms need for additional skills, resources, assets

• Offshore outsourcing– Driven by cost-savings

Outsourcing (cont.)

• Advantages– Allows organization flexibility in IT needs

• Disadvantages– Hidden costs, e.g.

• Identifying and selecting vendor• Transitioning to vendor

– Opening up proprietary business processes to third party

Application Development for the Digital Firm

• Rapid application development (RAD)– Process of creating workable systems in a very short

period of time– Utilizes techniques such as:

• Visual programming and other tools for building graphical user interfaces

• Iterative prototyping of key system elements• Automation of program code generation• Close teamwork among end users and information systems

specialists

Joint application design (JAD)

• Use to accelerate generation of information requirements and to develop initial systems design

• Brings end users and information systems specialists together in interactive session to discuss system’s design

• Can significantly speed up design phase and involve users at intense level

Component-based development

• Groups of objects that provide software for common functions (e.g., online ordering) and can be combined to create large-scale business applications

• Web services– Reusable software components that use XML and open Internet

standards (platform independent)– Enable applications to communicate with no custom

programming required to share data and services – Can engage other Web services for more complex transactions– Using platform and device-independent standards can result in

significant cost-savings and opportunities for collaboration with other companies

Agile development

• Focuses on rapid delivery of working software by breaking large project into several small sub-projects

• Subprojects– Treated as separate, complete projects– Completed in short periods of time using iteration and

continuous feedback

• Emphasizes face-to-face communication over written documents, allowing collaboration and faster decision making

Manifesto for Agile Software Development

We are uncovering better ways of developing

software by doing it and helping others do it.

Through this work we have come to value:

Individuals and interactions over processes and tools

Working software over comprehensive documentation

Customer collaboration over contract negotiation

Responding to change over following a plan

That is, while there is value in the items on

the right, we value the items on the left more.

Twelve Principles of Agile Software

1. Our highest priority is to satisfy the customer through early and continuous delivery of valuable software.

2. Welcome changing requirements, even late in development. Agile processes harness change for the customer's competitive advantage.

3. Deliver working software frequently, from a couple of weeks to a couple of months, with a preference to the shorter timescale.

4. Business people and developers must work together daily throughout the project.

5. Build projects around motivated individuals. Give them the environment and support they need, and trust them to get the job done.

6. The most efficient and effective method of conveying information to and within a development team is face-to-face conversation.

7. Working software is the primary measure of progress.

8. Agile processes promote sustainable development. The sponsors, developers, and users should be able to maintain a constant pace indefinitely.

9. Continuous attention to technical excellence and good design enhances agility.

10. Simplicity--the art of maximizing the amount of work not done--is essential.

11. The best architectures, requirements, and designs emerge from self-organizing teams.

12. At regular intervals, the team reflects on how to become more effective, then tunes and adjusts its behavior accordingly.

Enterprise Architecture, IT Governance and IT Portfolio

Management

Enterprise architecture

• description of the structure of an enterprise, its decomposition into subsystems, the relationships between the subsystems, the relationships with the external environment,

• this description should be comprehensive and include enterprise goals, business functions, business process, roles, organisational structures, business information, software applications and computer systems

• Four domains of EA: Business, Information, Applications, Technology

Four domains of EA: Business

• Strategy maps, goals, corporate policies, operating model

• Functional decompositions, business capabilities and organizational models expressed as line of business architecture

• Business processes, Workflow and Rules that articulate the assigned authorities, responsibilities and policies

• Organization cycles, periods and timing• Suppliers of hardware, software, and

services

Four domains of EA: Information

• Information architecture - a holistic view on the flow of information in an enterprise

• Metadata - data that describes your enterprise data elements

• Data models: conceptual expressed as enterprise information architectures, logical, and physical

Four domains of EA: Applications

• Application software inventories and diagrams, expressed as functional or line of business architectures

• Interfaces between applications (events, messages and data flows)

Four domains of EA: Technology

• Inter-application mediating software or 'middleware'.• Application execution environments and operating

frameworks including applications server environments and operating systems, authentication and authorisation environments, security systems and operating and monitoring systems.

• Hardware, platforms, and hosting: servers, datacentres and computer rooms

• Local and wide area networks, Internet connectivity diagrams• Intranet, Extranet, Internet, eCommerce, EDI links with

parties within and outside of the organization• Operating System• Infrastructure software: Application servers, DBMS• Programming Languages, etc. expressed as enterprise / line

of business technology architecture

Architecture-Centric view of IT

IT Governance - definition• Specifying the decision rights and accountability

framework to encourage desirable behaviour in the use of IT

• The leadership and organisational structures and processes that ensure that the organisation’s IT sustains and extends the organisation’s strategies and objectives

• The system by which the current and future use of ICT is directed and controlled. It involves evaluating and directing the plans for the use of ICT to support the organisation and monitoring this use to achieve plans. It includes the strategy and policies for using ICT within an organisation

IT Governance

• The rising interest in IT governance is partly due to compliance initiatives, as well as the acknowledgment that IT projects can easily get out of control and profoundly affect the performance of an organization.

• A characteristic theme of IT governance discussions is that the IT capability can no longer be a black box. The traditional involvement of board-level executives in IT issues was to defer all key decisions to the company's IT professionals.

• IT governance implies a system in which all stakeholders, including the board, internal customers, and in particular departments such as finance, have the necessary input into the decision making process. This prevents IT from independently making and later being held solely responsible for poor decisions. It also prevents critical users from later complaining that the system does not behave or perform as expected.

IT governance goals

• The primary goals for information technology governance are to– assure that the investments in IT generate business value,– mitigate the risks that are associated with IT

• This can be done by implementing an organizational structure with well-defined roles for the responsibility of information, business processes, applications, infrastructure, etc.

• Decision rights are a key concern of IT governance; depending on the size, business scope, and IT maturity of an organization, either centralized, decentralized or federated models of responsibility for dealing with strategic IT matters are suggested

IT portfolio management

• IT portfolio management is the application of systematic management to large classes of items managed by enterprise Information Technology (IT) capabilities

• It’s focused on quantification of previously mysterious IT efforts, enabling measurement and objective evaluation of investment scenarios

Integrating Processes that reinforce architecture

The Enterprise Architecture and Organizational Development Virtuous

Circle

Thank you for your attention!

What we can expect in near future?

Hype cycle

• A hype cycle is a graphic representation of the maturity, adoption and business application of specific technologies.

Emerging technology hype cycle

Hype cycle – 5 steps• "Technology Trigger" — The first phase of a hype cycle is the "technology

trigger" or breakthrough, product launch or other event that generates significant press and interest.

• "Peak of Inflated Expectations" — In the next phase, a frenzy of publicity typically generates over-enthusiasm and unrealistic expectations. There may be some successful applications of a technology, but there are typically more failures.

• "Trough of Disillusionment" — Technologies enter the "trough of disillusionment" because they fail to meet expectations and quickly become unfashionable. Consequently, the press usually abandons the topic and the technology.

• "Slope of Enlightenment" — Although the press may have stopped covering the technology, some businesses continue through the "slope of enlightenment" and experiment to understand the benefits and practical application of the technology.

• "Plateau of Productivity" — A technology reaches the "plateau of productivity" as the benefits of it become widely demonstrated and accepted. The technology becomes increasingly stable and evolves in second and third generations. The final height of the plateau varies according to whether the technology is broadly applicable or benefits only a niche market.

CRM hype cycle