Management Information Systems

The MIS Function and Information Systems Planning

Prof. Rushen Chahal

Page 1

The MIS Function and Information Systems Planning

Organization of the MIS Function MIS Specialists Establishing Organizational MIS Requirements Evaluating the Relative Worth of MIS Applications Linking Business and systems planning

Page 2

The MIS Function and Information Systems Planning

Cost-Benefit Analysis Methods of Acquiring IS The MIS Development Process Agents Involved in an MIS Project Who Initiates A Project?

Page 3

Organization of the MIS Function

MIS is responsible for providing and coordinating computer-base information services:
developing operating maintaining facilitating the acquisition adaptation of software & hardware
Page 4

Organization of the MIS Function

A distributed MIS organization FIGURE 17.1 Corporate MIS:
Responsible for: infrastructure- telecommunications networks, corporate data center corporate STANDARDS interacting with vendors to gain discounts & for scanning
Page 5

Page 6

Page 7

Establishing Organizational MIS Requirements

To be effective competitor:
a vision a model a framework

Page 8

Establishing Organizational MIS Requirements

A. Contents of an MIS Master Plan
First MIS is a major corporate asset
provides benefits uses resources- Money

The planning process provides support for business objects the planning process allocates resources based upon priorities in THEORY the MIS plan should be aligned with the Corporate business strategy
Page 9

Establishing Organizational MIS Requirements

A. Contents of an MIS Master Plan (cont)
A long term Plan Coordination of MIS Plan with business plans
Content Timing Personnel

Page 10

Establishing Organizational MIS Requirements

A linkage between MIS & Business Plans has:
the corporate business plan states the informational needs the MIS plan refers to the requirements of the business plan the MIS plan is checked against the business plan non-MIS managers participate in the MIS planning process MIS managers participate in the business planning process Corporate and MIS calendars are in sink with each other Page 11

Establishing Organizational MIS Requirements

The MIS plan is reviewed periodically The conceptual contents o the plan

Page 12

Establishing Organizational MIS Requirements

B. Derivation of the MIS Requirements
Derived directly from the business plan

Page 13

Page 14

Establishing Organizational MIS Requirements

C. The Strategic Cube the cube provides a framework
basic questions: Will it face increasing customer power? Are there fewer customer who are larger? Is the firm to pursue a differentiating strategy? Does the firm have a track record for innovation?

Page 15

The Strategic Cube

COMPETITIVE FORCES TO CONTEND WITH
Customer Power Supplier Power Present Competitors Potential Competitors Substitute Products Strategic Alliance Merger or Acquisition Internal Growth Internal Innovation TACTICS

STRATEGIES

Page 16

Establishing Organizational MIS Requirements

D. Strategy Set Transformations
1. Identify the organizational stakeholder
customers employees suppliers

2. Develop goals, strategies, objectives to fit each group of stakeholder

Page 17

Establishing Organizational MIS Requirements

D. Strategy Set Transformations (cont)
3. Determine the needed informational requirements for the strategies
Example from text: Stakeholder: Customer Strategy: improve service Innovation: Confirm orders within one hour

Page 18

Establishing Organizational MIS Requirements

E. Approaches to Planning
1. Overview: There are several different approaches to systems planning
Some look at assimilation of IT in organizations Some focus on defining informational needs Some discuss categorizing applications

Page 19

Establishing Organizational MIS Requirements

E. Approaches to Planning (cont)
2. The basic set of approaches:
Business Systems Planning (BSP) Critical Success Factors (CSF) Investment strategy analysis Scenario approach Linkage analysis planning Creative problem solving Enterprise Analysis The Architecture approach The crystal Ball Approach

Page 20

17.3 Establishing Organizational MIS BSP developed by IBM Requirements

Philosophy: Data is a corporate resource (Enterprise data) Goal: discover a stable information architecture that supports all processes of the business. Objective: to assure the data necessary to support the business plan are available and that a stable information system architecture is developed.
Page 21

Key Components of IS Planning with BSP

Crucial Steps Defining Business Processes Defining Business Data Defining Info. Sys. Architecture

Analyzing Current Systems Support

Interviewing Executives

Defining Findings and Conclusions

Determining Architecture Priorities

Reviewing Info. Res. Management

Developing Recommendations

Reporting Results

Page 22

Establishing Organizational MIS Requirements

BSP (cont)
1. Defining the business process
identify the activities identify the decisions identify the systems, processes, flows

2. Defining Business data

classes of data (customers, employees, places, objects) determine data usage Example: Inventory record- SKU, Name, quantity on hand, lead time Page 23

Establishing Organizational MIS Requirements

BSP (cont)
3. Define information architecture
Creating processes Using processes

Page 24

17.3 Establishing Organizational MIS Critical Success Factors (Rockart, 1979) Requirements

A method for defining executive information needs. They are key areas or activities that must work right in order for the organization to be successful. They are time dependent and therefore must be measured .

Page 25

CSF Methodology for Establishing Organizational IS Requirements

Obtain CSFs of Manager A Obtain CSFs of Manager B Combine Individual CSFs into Organizational CSFs Derive Informational Requirements to Support CSFs Use CSFs to Redesign the Organization and Use Informational Requirements to Plan IS Obtain CSFs of Manager C

Page 26

Establishing Organizational MIS Requirements

1. Sources for the CSF's
industry: the company the environment
social legal technological economic political

Temporal: areas of the organization which do not normally need concern, but are currently unacceptable (The open can of worms). Page 27

Planning, Dev., & Operation of Info. Sys.

Responsibility of Determination of Long-Term Information Chief Info. Off. (CIO) Strategic Corp. and IS Planners Requirements of the Organization Planning IS Steering Comm. IS Steering Comm. Tactical and Identification of Projects and Operational IS Mgr. and Planners Setting of Priorities Planning in Collaboration with ... User Mgmt. System Analysis System Analysis Systems System Design Development Projects Programming Installation Systems Maintenance Projects Systems Termination Projects System Operation and Maintenance System Termination System Design Programming Installation Operations Personnel System Operation and End Users and Maintenance Mainteanance Teams System Termination IS Personnel and End Users Project Teams (Development Teams), with User Participants as Appropriate Tasks

Page 28

Page 29

Other Methods
Investment Strategy Analysis
A strategy based upon portfolio planning and investment analysis. Four major types of systems for the 1990's
1. Institutional procedures- the processing of internal transactions, as represented by many of today's mainline systems 2. Professional support system- engineering support (CAD) Managerial decision-making support (DSS, GSS) 3. Physical automation Page 30

Other Methods
4. Systems that serve users outside the company, i.e. customers and suppliers. EDI, Voice mail, 800 numbers, Fax 5. Basic infrastructure
telecommunications networking data base office automation & DSS

Page 31

Other Methods
Alpha Company
1. Renovate existing manufacturing systems around data base technology 2. Invest heavily in increasing the productivity of engineers 3. Foster innovation among the professional staff 4. Invest heavily in CAD/CAM

Beta Company
1. Create new systems only when old ones fail 2. BE A FOLLOWER 3. Invest only when IT has a bottom line impact

Page 32

Other Methods
Scenario Planning (WHAT IF)
The scenarios help identify problems and manage assumptions. They also provide flexibility in the plans and a means of escape if necessary.

Page 33

Other Methods
1. Elements of a scenario
the business environment
the effects of deregulation shifting towards a service economy ; away from MASS production Mergers and acquisitions increased foreign competition National budget deficits Interest rates (not in 1992) Changes in the strength of the US dollar unemployment corporate down sizing

Page 34

Other Methods
Government & society
information accuracy privacy (see Scientific American August, 1992) access to information property rights people changes

Financial considerations
ROI

TECHNOLOGY
speed of change quick obsolescence

Page 35

Other Methods
2. Creating Scenarios
a. deterministic : spreadsheet what if analysis
Lotus 123

b. Cross-impact analysis: a model of major events and trends. Data can come from Delphi studies.

Page 36

Other methods
Creative problem Solving
Couger's Method; a 1992 Working paper the 5 phases
1. fact finding 2. problem finding 3. idea finding 4. solution finding 5. acceptance finding

Page 37

Other Methods
Creative problem Solving (cont)
divergence-convergence activities recursiveness (iterative) and non-linearity using creativity techniques in each phase
EBS alternative selection

Page 38

Other Methods
The Architecture Building Approach
The blue print for the information technology infrastructure. 1. support communications flows
the flow of formal authority - financial consolidations of profit and loss centers via a computer flows of regulated activities- online banking systems
informal communication flows- E-mail, voice mail work constellations- expert systems

ad hoc decision processes- document retrieval Page 39

Other Methods
The Architecture Building Approach (cont)
2. help people communicate
provide different types of views of the same thing

3. support organizational decision making

help executives rethink how the business should be what kind of structure is needed ?

Page 40

Establishing Organizational MIS Requirements

SUMMARY
Successful strategy has two main ingredients:
1. Look to the future 2. link system plans to business plans

Page 41

Establishing Organizational MIS Requirements

SUMMARY
The 3 Stages of developing a plan:
1. Understand the business
use a model or framework to help USE THE RIGHT MODEL OR FRAMEWORK

2. Identify the firms INFORMATION needs 3. Rank the opportunities presented by information technology in terms of their relative importance and the relative VALUE added to the business.

Page 42

Page 43

Evaluating the Relative Worth of MIS Applications

strategic: IS activities critical to the current competitive strategy and to future strategic decisions. IS applications are part of new strategic direction Factory: IS applications are vital to the successful functioning of well-defined, well accepted activities. Not part of future strategic operations

Page 44

Evaluating the Relative Worth of MIS Applications

Support: IS applications are useful in supporting activities. not vital to critical operations and not included as part of future strategic direction. Turnaround: IS in transition- from support to strategic. Vital to strategic success.

How does this relate to the Daft Weick Model? What about Uncertainty/Equivocality?
Page 45

Page 46

Linking Business and systems planning

Using Steering Committees 1. Can consist of
upper management from all divisions and functions Department management from all divisions and functions Technical management from all divisions and functions IS, IE, Eng
Page 47

Linking Business and systems planning

2. There job is to:
"steer" direct, push, pull, etc. the Organization investments in the direction that benefits the company the most; the STRATEGIC direction.

3. How do they do that?

Information scanning

Page 48

Linking Business and systems planning

4. Advantages of steering committees from Drury (1984)
1. Increases the attention of top management to computing 2. Users become more involved with the system 3. The system departments are more aware of user needs 4. There is better long range planning for IS
Page 49

Linking Business and systems planning

Other approaches
IS mgrs. and analysts User-group Multi-department, IS, executive mgmt Combination

Page 50

Cost-Benefit Analysis
A technique for estimating the payoff to be expected from an information system. A. Cost benefit Analysis
a quantitative support $ Table 17.6 p 693

Page 51

Page 52

Cost-Benefit Analysis
B. Basic Stages of Cost benefit analysis
Identification of costs
fixed costs operational costs (variable costs)

Identify Benefits
Tangible $ cost savings Cost avoidance revenue increases Page 53

Cost-Benefit Analysis
B. Basic Stages of Cost benefit analysis (cont)
Intangible not $
Table 17.7 page 694

Compare and analyze

NVP IRR ROI

Then PRAY
Page 54

Page 55

Methods of Acquiring IS
1. Internal Development
Pros and Cons Discussion Techniques SDLC Prototyping SAD

Page 56

Methods of Acquiring IS
2. Purchase
Canned vs Custom Discussion

3. External Systems integrator 4. Outsourcing 5. A combination approach

Page 57

Page 58

Page 59

Page 60

Page 61

Page 62

Agents Involved in an MIS Project

A. The Actors
Z-1992 Figure 17.10 p 704

B. The theories From Markus C. The Roles:

The users are interested in system performance Yes/NO Management controls the resources Yes/no MIS implements a system that SATISFIES the users' needs as well as the constraints and objectives from MGT. Page 63

Page 64

Agents Involved in an MIS Project

D. Problems Encountered:
Actors have their own agendas Users generally do not KNOW what they want/need COMMUNICATION can be a problem
cognitive style

Page 65

Who Initiates A Project?

Managing The Application Development Portfolio I. How System Projects are begun
A. Reasons for Projects
1. Solve a problem 2. Capitalize on an opportunity 3. Respond to a directive

Page 66

Who Initiates A Project?

Capability: Efficiency
improve processing speed Point of sale systems, Bar coding ability to handle increased volume PC vs. manual methods, more PC's, LAN faster retrieval of information Bigger, faster data storage, SQL-based DBMS Canned-software (Order entry, Manufacturing, etc.)

Page 67

Who Initiates A Project?

Control: Efficiency/Effectiveness
Improved accuracy and consistency automating the process to reduce human error Computer prompting, error detection, field value checks Provide better security Need to know screens Password protection

Page 68

Who Initiates A Project?

Communication: Effectiveness
Enhance communication Credit card systems, brokerage systems, E-Mail Integration of business areas: Coordination CIM, LAN communication, Manufacturing systems (ACCOUNTING, MATERIALS MGMT & MANUFACTURING)

Page 69

Who Initiates A Project?

Cost: Effectiveness
Monitor Costs Tracking cost through a system (manufacturing LEDCS) Reducing costs automatic calculation-retrieval systems PTOS

Page 70

Who Initiates A Project?

Competitive Advantage: Effectiveness: a strategic weapon
Lock in customers by offering a better price by providing a unique service by presenting distinctive products Examples: American Hospital Supply, Eaasy Saber System, MAC Lock out competitors This happens when one locks in customers

Page 71

Who Initiates A Project?

Competitive Advantage: Effectiveness: a strategic weapon (cont)
Improve arrangement with suppliers EDI, long term contracts, the Japanese way, JIT Quality programs, Shared Data Bases Form a basis for new products the value of information, commercial data bases on anything, mailing lists, Market Research, Shop Rite Price Plus, Prodigy, CompuServe. INNOVATION

Page 72

Who Initiates A Project?

B. Sources of Project Requests
1.Department Managers: Improve control, Power Form processing systems, QC 2. Senior executives: Strategic, competitive advantage EIS, DSS, Market Research , E-Mail, Big systems 3. Systems analysts: Efficiency Speed accuracy, upgrades 4. Outside Groups: Regulatory Special accounting systems, OSA control

Page 73

Who Initiates A Project?

C. Managing the portfolio direction
There are limited resources (money, manpower, material, etc) In a rational organization
classify impact of project can the project be redesigned to support multiple business functions or fewer ensure funding judge fit, function, form, recommend development strategy SDLC, SA, Prototyping ask 5 C's

Page 74

Who Initiates A Project?

C. Managing the portfolio direction (cont)
In other organizations
Power Political Favored son Fear

Page 75

Who Initiates A Project?

D. Integration
Application should be integrated (yes & no) Horizontal- (marketing, Manufacturing, accounting) Vertical- upper level to lower level mgmt Distributed- separate system in different plants different hardware, software Integration- External-Internal EDI

Page 76

Who Initiates A Project?

II The Project
A. Project request
WHAT IS THE PROBLEM DETAILS of THE PROBLEM IMPACT OF THE PROBLEM (how significant is it) PROPOSED SOLUTION JUSTIFICATION (5 C's) BENEFITS (5 C's) Who else knows Intangibles Page 77

Who Initiates A Project?

B. Preliminary Investigation
(Fig 2.6, 75) by the team- SA, IE, Mgrs., etc 1. Scope of the study
Clarify and understand the project request Determine size Assess cost/benefits Determine feasibility - Technical, operational, economic Report findings with recommendations

Page 78

Page 79

Who Initiates A Project?

2. Conducting the investigation
Reviewing organizational documents Conducting interviews Observations Questionnaires Do the work Experiment Plant site visits Vendor demonstrations Seminar

Page 80

Who Initiates A Project?

2. Conducting the investigation (cont)
Conferences Workshops literature: trade/academic Personal contacts KEY: Learn, Understand, Listen, Integrate

Page 81

Who Initiates A Project?

3. Testing Project Feasibility
Operational Is there support/resistance; from or by who Are current business methods acceptable? If not a change may be welcomed Have the user's been involved? If not get them involved Will the system cause harm?

Page 82

Who Initiates A Project?

3. Testing Project Feasibility (cont)
Technical Does the necessary tech exist? Can it be acquired? Does the proposed equipment have the right capacity for the data? Remember Tracks System Does the propose have the right: response time, interface, Can the system be expanded? Are the accuracy, reliability, ease of use, ease of access, security ok?

Page 83

Who Initiates A Project?

3. Testing Project Feasibility (cont)
Economic include cost to conduct full systems integration cost of hardware/software/ other benefits in terms of reduced costs opportunity costs

Page 84

Who Initiates A Project?

III. Selecting the Project Development Strategy
(Table 2.2, 81) 1. Institutional Vs End user
Organizational systems (i.e. MRP, CIM) vs. End-user (PC- lotus, Dbase)

Page 85

Page 86

Who Initiates A Project?

2. End-User development approach
specification of information requirements in conjunction with a specific task or decision Querying a data base with special software HPAccess to lotus development of an application with a package

Page 87

Who Initiates A Project?

3. Suitable end-user developments
One-time Inquires Simple reports Minor changes Presentations What if analysis

Page 88

Who Initiates A Project?

4. What should not be handled
High volume transactions Use of traditional programming languages
(Basic, FORTRAN, etc.) Yeah right!!

Changing data values in a Org DB Applications spanning several departments Applications requiring formal documentation Major long-term applications (the New Post office) Applications requiring formal spec's

In time as hardware/software changes these will also change.

Page 89