IT Infrastructure

Management
Fall 2024
Management Information Systems: Managing
the Digital Firm
Seventeenth Edition

Chapter 13
Building Information Systems

Copyright © 2022, 2020, 2018 Pearson Education, Inc. All Rights Reserved
Systems Development and Organizational
Change (1 of 2)
• IT-enabled organizational change
• Automation
• Increases efficiency
• Replaces manual tasks
• Rationalization of procedures
• Streamlines standard operating procedures
• Often found in programs for making continuous quality improvements
Systems Development and Organizational
Change (2 of 2)
• Business process redesign
• Analyze, simplify, and redesign business processes
• Reorganize workflow, combine steps, eliminate repetition
• Paradigm shifts
• Rethink nature of business
• Define new business model
• Change nature of organization
Figure 13.1 Organizational Change Carries Risks
and Rewards
Business Process Redesign
• Business process management (BPM)
• Variety of tools, methodologies to analyze, design, optimize processes
• Used by firms to manage business process redesign
• Steps in BPM

1. Identify processes for change

2. Analyze existing processes
3. Design the new process
4. Implement the new process
5. Continuous measurement
Figure 13.2 As-is Business Process for Purchasing a
Book from a Physical Bookstore
Figure 13.3 Redesigned Process for Purchasing a
Book Online
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
Figure 13.4 The Systems Development Process
Systems Analysis
• Analysis of problem to be solved by new system
• Defining the problem
• Identifying causes
• Specifying solutions
• Identifying information requirements
• Feasibility study
• Systems proposal report
• Information requirements
• Faulty requirements analysis is a leading cause of systems failure and high
systems development costs
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
system reflects their business priorities and information needs
• Insufficient user involvement in design effort is major cause of system
failure
Table 13.1 System Design Specifications (1 of 2)
Category Specifications

Output Medium, Content, Timing

Input Origins, Flow, Data entry

User Interface Simplicity, Efficiency, Logic, Feedback, Errors

Database Design Logical data model, Volume and speed requirements, File organization and
design, Record specifications

Processing Computations, Program modules, Required reports, Timing of outputs

Manual Procedures What activities, Who performs them, When, How, Where

Controls Input controls (characters, limit, reasonableness), Processing controls

(consistency, record counts), Output controls (totals, samples of output),
Procedural controls (passwords, special forms)
Table 13.1 System Design Specifications (2 of 2)

Category Specifications

Security Access controls, Catastrophe plans, Audit trails

Documentation Operations documentation, Systems documents, User
documentation
Conversion Transfer files, Initiate new procedures, Select testing method
Cut over to new system
Training Select training techniques, Develop training modules, Identify
training facilities
Organizational Changes Task redesign, Job redesign, Process design, Organization structure
design, Reporting relationships
Completing the Systems Development Process (1
of 3)
• Programming
• System specifications from design stage are translated into software program
code
• Testing
• Ensures system produces right results
• Unit testing: Tests each program in system separately
• System testing: Test 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
Completing the Systems Development Process (2
of 3)
• 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
Completing the Systems Development Process (3
of 3)
• Production and maintenance
• System reviewed to determine if revisions needed
• May include post-implementation audit document
• Maintenance
• Changes in hardware, software, documentation, or
procedures to a production system to correct errors, meet
new requirements, or improve processing efficiency
Table 13.2 Systems Development
Core Activity Core Activity

Systems analysis Identify problem(s), Specify solutions, Establish information

requirements
Systems design Create design specifications
Programming Translate design specifications into program code
Testing Perform unit testing, Perform systems testing, Perform acceptance
testing
Conversion Plan conversion, Prepare documentation, Train users and technical
staff
Production and Operate the system, Evaluate the system, Modify the system
maintenance
Traditional Systems Life Cycle
• Oldest method for building information systems
• Phased approach
• Development divided into formal stages
• “Waterfall” approach: One stage finishes before next stage begins
• 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
Figure 13.9 The Traditional Systems Development
Life Cycle
Prototyping (1 of 2)
• 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
Figure 13.10 The Prototyping Process
Prototyping (2 of 2)
• 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
Application Software Packages, Software
Services, and Outsourcing (1 of 3)
• Application software packages and software services
• Save time and money
• Many packages offer customization features
• Evaluation criteria for systems analysis include:
• Functions provided, flexibility, user friendliness, required resources, database
requirements, installation and maintenance efforts, documentation, vendor
quality, and cost
• Request for Proposal (RFP)
• Detailed list of questions submitted to software vendors
• Used to evaluate alternative software packages and cloud software services
Application Software Packages, Software
Services, and Outsourcing (2 of 3)
• Outsourcing: several types
• Cloud and SaaS providers: subscribing companies use software and
hardware provided by vendors
• External vendors
• Hired to design, create software
• Domestic outsourcing
• Driven by firm’s need for additional skills, resources, assets
• Offshore outsourcing
• Driven by cost-savings
Application Software Packages, Software
Services, and Outsourcing (3 of 3)
• Outsourcing Advantages/Disadvantages
• Advantages: Allows organization flexibility in IT needs
• Disadvantages
• Hidden costs, for example:
• Identifying and selecting vendor
• Transitioning to vendor
• Opening up proprietary business processes to third party
Rapid Application Development (RAD), Agile
Development, Automated Software Testing, and
DevOps (1 of 3)
• Rapid application development (RAD)
• Process of creating workable systems in a very short period
of time
• Joint application design (JAD)
• Used to accelerate generation of information requirements
and to develop initial systems design
Rapid Application Development (RAD), Agile
Development, Automated Software Testing, and
DevOps (2 of 3)
• Agile development
• Focuses on rapid delivery of working software by breaking large project into
subprojects that can be completed in short periods of time
• Automated software testing
• Tools to perform examinations of software, report outcomes, compare results
with earlier test runs
• DevOps
• Builds on agile development principles as an organizational strategy
Rapid Application Development (RAD), Agile
Development, Automated Software Testing, and
DevOps (3 of 3)
• Low-code development
• Enables faster development of applications, with minimal hand-coding, using
visual modelling in a graphical interface
• No-code development
• Includes built-in tools that enable user to create apps without any coding
• Some disadvantages
• Have limited functionality
• Users can create applications without proper management oversight
Mobile Application Development
• Mobile websites
• Mobile web apps
• Native apps
• Special requirements for mobile platform
• Smaller screens, keyboards, multitouch gestures, saving resources
(memory, processing)
• Responsive web design
• Websites programmed so that layouts change automatically according
to user’s computing device
Management Information Systems: Managing
the Digital Firm
Seventeenth Edition

Chapter 15
Managing Global Systems

Copyright © 2022, 2020, 2018 Pearson Education, Inc. All Rights Reserved
What Major Factors Are Driving the
Internationalization of Business?
• Global economic system and global world order driven by
advanced networks and information systems
• The growth of international trade has radically altered
domestic economies around the globe
• For example, production of many high-end electronic products
parceled out to multiple countries
• For example: Apple iPhone’s global supply chain
Figure 15.1: Apple iPhone’s Global Supply Chain
Developing an International Information Systems
Architecture
• Understand global environment
• Business drivers for global competition
• Inhibitors creating management challenges
• Develop corporate strategy for global competition
• Develop organizational structure and division of labor
• Consider management issues
• Design of business procedures, reengineering, managing change
• Consider technology platform
Figure 15.2 International Information Systems
Architecture
The Global Environment: Business Drivers and
Challenges
• Business drivers
• General cultural factors
• Specific business factors
• Challenges
• Global
• Specific
Table 15.1: The Global Environment: Business
Drivers and Challenges
General Cultural Factors Specific Business Factors

Global communication and Global markets

transportation technologies
Development of global culture Global production and operations
Emergence of global social norms Global coordination
Political stability Global workforce
Global knowledge base Global economies of scale
Table 15.2 Challenges and Obstacles to Global
Business Systems
Global Specific

Cultural particularism: Regionalism, Standards: Different Electronic Data

nationalism, language differences Interchange (EDI), e-mail,
telecommunications standards
Social expectations: Brand-name Reliability: Phone networks not uniformly
expectations, work hours reliable
Political laws: Transborder data and Speed: Different data transfer speeds,
privacy laws, commercial regulations many slower than United States
Blank Personnel: Shortages of skilled
consultants
State of the Art
• Most companies have inherited a patchwork international system
using traditional batch-oriented reporting, manual data entry, legacy
systems, and little online control
• Significant difficulties in building appropriate international
architectures
• Planning a system appropriate to firm’s global strategy
• Structuring organization of systems and business units
• Solving implementation issues
• Choosing right technical platform
Global Strategies and Business Organization
• Three main kinds of organizational structure
• Centralized: In the home country
• Decentralized/dispersed: To local foreign units
• Coordinated: All units participate as equals
• Four main global strategies
• Domestic exporter
• Multinational
• Franchisers
• Transnational
Table 15.3 Global Business Strategy and Structure

Business Function Domestic Multinational Franchiser Transnational

Exporter
Production Centralized Dispersed Coordinated Coordinated
Finance/accounting Centralized Centralized Centralized Coordinated
Sales/marketing Mixed Dispersed Coordinated Coordinated
Human resources Centralized Centralized Coordinated Coordinated
Strategic management Centralized Centralized Centralized Coordinated
Global Systems to Fit the Strategy
• Configuration, management, and development of systems tend to follow
global strategy chosen
• Four main types of systems configuration
• Centralized: Systems development and operation occur totally at
domestic home base
• Duplicated: Development occurs at home base but operations are
handed over to autonomous units in foreign locations
• Decentralized: Each foreign unit designs own solutions and systems
• Networked: Development and operations occur in coordinated fashion
across all units
Figure 15.3 Global Strategy and Systems
Configurations
Reorganizing the Business
• To develop a global company and information systems support structure:

1. Organize value-adding activities along lines of comparative advantage-

• For example: Locate functions where they can best be performed, for least
cost and maximum impact and reliability (with safeguards for supply chain
resiliency)

2. Develop and operate systems units at each level of corporate activity—

regional, national, and international
3. Establish at world headquarters:
• Single office responsible for development of international systems
• Global CIO position
A Typical Scenario: Disorganization on a Global
Scale
• Traditional multinational consumer-goods company based in United States
and operating in Europe would like to expand into Asia
• World headquarters and strategic management in United States
• Separate regional, national production and marketing centers
• Foreign divisions have separate IT systems
• E-mail systems are incompatible
• Each production facility uses different ERP system, different hardware and
database platforms, and so on
Global Systems Strategy (1 of 2)

• Share only core systems

• Core systems support functionality critical to firm
• Partially coordinate systems that share some key elements
• Do not have to be totally common across national boundaries
• Local variation desirable
• Peripheral systems
• Need to suit local requirements only
Global Systems Strategy (2 of 2)
• Define core business processes
• Identify core systems to coordinate centrally
• Choose an approach
• Piecemeal and grand design approaches tend to fail
• Make benefits clear
• Global flexibility
• Gains in efficiency (but more emphasis now on supply chain resiliency)
• Fixed costs amortized over a larger customer base; creates new economies of
scale
• Ability to optimize corporate funds over much larger capital base
The Management Solution: Implementation (1 of
2)
• Agreeing on common user requirements
• Short list of core business processes
• Develop common language, understanding of common elements and unique
local qualities
• Introducing changes in business processes
• Success depends on legitimacy, authority, ability to involve users in change
design process
• Coordinating applications development
• Coordinate change through incremental steps
• Reduce set of transnational systems to bare minimum
Figure 15.4 Local, Regional, and Global Systems
The Management Solution: Implementation (2 of
2)
• Coordinating software releases
• Institute procedures to ensure all operating units update at same time
• Encouraging local users to support global systems
• Cooptation: Bringing the opposition into design and implementation
process without giving up control over direction and nature of the
change
• Permit each country unit to develop one transnational application
• Develop new transnational centers of excellence
Issues and Technical Alternatives When
Developing International Information Systems (1
of 2)
• Computing platforms and systems integration
• How new core systems will fit in with existing suite of applications developed
around globe by different divisions
• Standardization: Data standards, interfaces, software, and so on
• Connectivity
• Internet does not guarantee any level of service
• Many firms use private networks and VPNs
• Low penetration of PCs, outdated infrastructures in developing countries
Issues and Technical Alternatives When
Developing International Information Systems (2
of 2)
• Software
• Integrating new systems with old
• Human interface design issues, languages
• Software localization
• Converting software to operate in second language
• Most important software applications:
• TPS and MIS
• SCM, EDI, and enterprise systems
• Collaboration tools, e-mail, videoconferencing
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