Enterprise

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Enterprise Information Systems Management 2002
Gillian Miller
Acknowledgement This presentation as well as
the overall course structure and intent owes much
to the founder of this course A/Prof Kit
Dampney
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Investment Investement in information technology
is one indicator of its growing importance in
business. In the 1980s it expanded by almost 350
per cent from 55 billion dollars to 190 billion
dollars and today accounts for almost half of
most large financial capital expenditure. (Keen)
Vision needs Information Support Henry Ford -
Everyone should be able to afford a motor car
this was the driving vision to introduce assembly
line techniques. . in desperation the company
replaced Henry Fords desk each month, placing
the old one in a warehouse so that it was
possible to retrieve the information needed
to drive the organisation.
Timelessness The war is over, the president of
the United States is speaking of a new world
order. Russia and eastern Europe are in
disarray, and everywhere technological advances
are developing faster than the comprehension of
their usess or potential drawbacks. The year is
1919 Inaugural edition of World Tour
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Approach
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Enterprise Information

• Enterprise A company organised for commercial
  purpose or service
• Management of the information systems resource
  emphasises a whole view of the enterprise.

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The approach taken in this course

• Blending of organisational and technical issues.
  
• By crossing the divide that too often exists
  between business and information systems, we
  learn to deal with
• meeting continuous strategic challenges - IT as
  a strategic asset
• continuing profound changes in business
  practice and information technology
• increasing complexity - fast rates of change
• leveraging technology for advantage

Successful management of IT is critical to
effective enterprises and their management.
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The Learning Process, 2002
HumanResources

• Objective to learn new ways of thinking and gain
  new perspectives on IS management with an
  emphasis on the enterprise and the information
  resource.
• Group Discussion engage in dialogue supported by
  knowledge, experience and case study.
• Guest Lecturers Practitioners in field with
  broad range of expertise and experience

Finance
Operations
Marketing
Information
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Topics

• Strategic Role Of IT
• Information Systems Planning
• E-Commerce
• Infrastructure - Application Integration
• Infrastructure - EDI, networks
• Development - CMM, Risk management
• Knowledge Management
• IM strategic planning in practice - political
  factors
• YOUR PRESENTATIONS

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Context
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IT insfrastructure increasing in complexity
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E-commerce and E-business in the networked
enterprise
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ISE Drivers

• Competition and Co-operation - drives
  improvements in product and services to satisfy
  market demand and to lower costs.
• Investment - provides skills, knowledge and
  information systems to support profitable,
  value-adding, productive processes.
• Architecture - aligns information systems and
  organisational structure to business processes
  and objectives.
• The web - New era of communication commerce
• Quality - improves business process with the
  objective of achieving customer satisfaction.
• Process design - changes business process by
  finding better ways to co-ordinate skills,
  knowledge and supporting technology.

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External factors - Challenge Response

• Competition - market driven. Customer focus
  (quality)
• Competition - open borders, export
  drive. Burgeoning communications technology.
• Competition - technology leverage. Re-engineered
  processes.
• Changes in organisational structure. Outsourcing,
  focus on core business Re-structured companies.
• Rise (and Fall) of the . com, e-commerce and
  e-business
• There is greater opportunity and greater threat.

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Discussion

• Introduction
• Your role
• Nature of your organisation
• Major issues for IT

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The Information System focus

• Enterprise _____________________________
• People _____________________
• Process ________________
• Technology ___________

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Process Layers of an Enterprise
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The Information System focus

• Enterprise _____________________________
• People _____________________
• Process ________________
• Technology ___________

SYSTEMS
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The Systems Costly Divide

• Enterprise _____________________________
• People _____________________
• Process ________________
• Technology ___________

Work Practices Human Processes
Computer-based Processes
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A system should be an organised whole!
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Role Of CIO

• Traditional IS Management
• System planning, data center management,
  networks, helpdesk, analysis, design and
  development
• CIO
• Understand business
• Establish credibility of IS
• Increase technological maturity of IS
• Create a vision of the future using IT and sell
  it
• Implement an information system architecture to
  support vision
• Develop and nurture relationships
• Sprague, 1998

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Business strategy requires an Information
Architecture
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Where does the need begin?

Nolans Stages of Information Systems Growth
Integration of Application
Retrofit to newer technology
Application Portfolio
Upgrade
Cost Reduction
Proliferation
Strategic Planning
IS Planning Control
Formalised Planning Control
Adhoc
Joint User / IS Accountability
User Awareness
Hands Off
Learning Accountability

Initiation
Contagion
Control
Data Administration
Maturity
Integration
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Discussion

• Where is your enterprise placed ?

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Information- sales pitch
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Information - defines business potential.
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Information - supports Business Resource
Business Resource
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Information is the base for business
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Information is the medium for growing a business
Business Resource
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Information StrategicPlanning
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Architectural Layers
Definition An architecture is a description of
a system that addresses the relationship between
components of a similar nature.
Enterprise __________ People __________ Process
__________ Technology

• 1. Business goals and objectives
• 2. Business division and function architecture.
• 3. Business and application process architecture.
• 4. Information architecture
• 5. Technology architecture

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IT - Strategic Planning

• The development of an IMT (Information
  Management Technology)
• strategic plan will ensure that an agency's
  corporate and business planning
• is optimally supported through the use of ICT.
  Business systems are an
• integral part of business processes, while
  information management
• and information technology provide the essential
  infrastructure
• and facilities to support the processes. All of
  these elements must work
• in harmony to produce required outcomes and meet
• the agency's and business unit's objectives.
• There are four key steps in the development of an
  IMT strategic plan
• develop the IMT Strategic Vision
• develop IMT Requirements
• develop IMT Strategy
• commit to IMT Strategy
• Source OIT - NSW Government, 2002

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The cycle of business strategy, planning and
operations processes supported by the information
resource
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The costs of business development
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The Process of Migrating an Information System
Architecture
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Integration requires enterprise-wide architecture
at various levelsThere is a limit to size and
scope of complete integration.
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Examples of integration problems

• There are significant organisational problems
  from differences in culture, beliefs, priorities,
  and understandings in large corporations.
• Evidence in organisations -
• public health,
• Telecom,
• the large banks
• There are substantial integration difficulties
  arising from
• sharing data across different contexts,
• integrating across organisational divisons
• ensuring close synchronisation of different
  processes at the operations level across business
  functions.

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Some Recent Developments inInformation Management
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The Infrastructure Governance Model
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Application Integration

• Technological advances, particularly related to
  the Internet are
• driving radical restructuring of the economy and
  the internal structures
• of most enterprises.
• Application integration will be the most
  important IS organization task
• during the next five years, because it is a
  fundamental requirement for
• getting distributed semi-autonomous business
  units to work together
• The most successful and agile businesses will
  deploy a real-time,
• middle ware based enterprise nervous system for
  integrating applications
• across the virtual enterprise.
• The two most important improvements to business
  processes are
• zero-latency enterprise and straight-through
  processing. Both are
• based on application integration.

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Knowledge Based View of the Firm
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Knowledge Management

• In the quest for sustainable competitive
  advantage, companies have
• finally come to realize that technology alone is
  not that. What sustains is
• knowledge. It is in unchaining knowledge that
  lies in your companys
• people, processes, and experience that the hope
  for survival rests If
• your organization is confused by vendor buzz and
  consultant pitches be
• forwarned, its not that easy. Knowledge
  management (KM) is just about
• thrity five percent technology. While technology
  is the easy part, its the
• people and the processes part that is hard
• SourceTiwana, The Knowledge Management Toolkit,
  2000

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ERP

• Back to the lost glory of ERP
• We have seen the ups downs of the ERP industry
  - companies closing
• their shops in the name of ERP, law suits on ERP
  vendors consulting
• firms. Over seventy percent of ERP
  implementations are nightmares. In
• simple words a lack of understanding of the
  fundamental principles
• of ERP systems led to most of these issues
• SourceMadapatu, 2001 commenting on
• Anderrag, ERP A-Z Implementers Guide , 2000

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On legacy systems

• legacy information architectures pose daunting
  challenges and a need for
• strategies for tackling these problems.
  Collectively, legacy application systems
• and legacy data structures form critical
  information assets that managers
• and analysts must strive to understand, manage,
  consolidate, migrate or
• otherwise transform to meet critical business
  requirements.
• Commercial application systems and data
  architectures, running in production
• computing environments, are the lifeblood of the
  modern enterprise.
• These systems manage business and government
  operations
• around the globe. Any organization that believes
  it can address
• critical requirements by replacing, wrapping or
  ignoring legacy
• information assets is headed for a train wreck of
  monumental
• proportions.
• ..Improvements in business modelling, ..
  component reuse, and Web-enabled
• architectures hold great promise. Yet the values
  of thses advancements will
• be minimal if management does not address legacy
  architectures under

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The Challenge of Developing ITS.
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Computer Systems Development
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Systems Development
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Systems Development and Use
SUBJECTIVE
ACTUAL REALITY - People, Organisation, Business
Processes
Requirements Satisfaction
Requirements Elicitation
System Construction
The Costly Divide
VIRTUAL REALITY - Representations in Icons,
logic, data
OBJECTIVE
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Factors in Information Systems Success and Failure
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The Maintenance Plague (1)

• System maintenance and operations is 70 of total
  system life cycle cost over 6 years.
• Thus every dollar of development generates 40 of
  maintenance costs per year. Operation costs is
  another 20 per year.
• 40 per year 1.00 x (70/30) / 6 years
• Total 1.00 development flow-on cost per year
  60.

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The Maintenance Plague (2)
Constant development leads to an increasing IT
budget
Source P. Keen,1991 Shaping the Future,
Harvard University Press
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System Development Constraints

• THE MAJOR CONSTRAINT IS THE ORGANISATION

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NOT Systems Constraints

• Available technology
• There is an abundance of technology, the problem
  is applying it.
• Unpredictable marketplace
• This has always been the case, and applies to all
  business investment.
• Return on Investment
• Since 1987, the return on investment (ROI) for
  IS capital has far exceeded the returns to all
  otherts, and IS labour spending has been several
  times as productive as spending on non-IS labour.
  Source Brynjolfsson, Erik, 1994. "Paradox
  Lost Information Technology is Surprisingly
  Productive. CISR (Centre for Information Systems
  Research) Summer Session, Sloan School of
  Management

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The Apex
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Customer driven business
Customer driven - what is needed from the
business. Have products, services etc - business
identified

• 1. customer needs
• 2. process to satisfy
• 3. production of products and services
• __________________________
• 4. information to support
• 5. architecture and infrastructure to provide
  information

The whole Offer
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Top-down strategically driven business
Strategy driven - what is needed to do
business? Have business purpose (mission and
objectives )

• 5. Investment for infrastructure and
  architecture
• 4. Investment in information systems support
• __________________________
• 3. Investment in production capability
  (procurement, production, distribution,
  marketing)
• 2. Development of business processes
• 1. Ensure Quality (customer satisfaction).

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The Strategic apex -your choice

• Customer driven - what is needed from the
  business.
• Have products, services etc - business identified
• 1. customer needs
• 2. process to satisfy
• 3. production of Products and services
• __________________________
• 4. information to support
• 5. architecture and infrastructure to provide
  information
• 5. Investment for infrastructure and
  architecture
• 4. Investment in information systems support
• __________________________
• 3. Investment in production capability
  (procurement, production, distribution,
  marketing)
• 2. Development of business processes
• 1. Ensure Quality.
• Have business purpose (mission and objectives )
• Strategy driven - what is needed to do business?

The new age
Strategic Apex
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Class dialogCase Study
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In Syndicates - Dialogue not discussion please!
Dialogue The capacity of members of a team to
suspend assumptions and enter into a genuine
"thinking

• Dialogue is from the Greek dia-logos -
• a free-flowing of meaning through a group,
  allowing the group to discover insights not
  attainable individually.
• Discussion has its roots with "persuasion" and
  "concussion" literally -
• a heaving of ideas back and forth in a
  winner-takes-all competition.

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Distributor case

• The Managing Director of a large distributorship
  was in trouble. His product, large equipment for
  manufacturing processes was in heavy demand.
  Revenue flow was increasing, but profits were
  stagnant. The business included not only
  distribution, but after sales service under a
  franchise agreement he had with the equipment
  manufacturer.
• The business was far flung and major sales
  offices in the various states were linked
  together by a computer network to ensure smooth
  flow of product and services. Spare parts were a
  real problem, especially when new versions of
  spare parts were introduced which replaced older
  parts. Nonetheless the spare parts problem was
  really only a minor issue in terms of cash flow
  implications. Minor regional offices in remote
  country towns were not connected, this being too
  difficult even though these offices accounted for
  30 of business. These offices had recently
  upgraded to fax machines. All electrical parts
  needed specialised Australian adaptions from a
  small supplier in Honksville. This small supplier
  was disorganised, so generally it was best to
  phone and rephone with orders until parts finally
  came through.
• The business computing system had reached the
  point where response time was 3 minutes! As most
  people are frustrated at times in excess of three
  seconds, morale and ability to sell and service
  customer needs were dropping rapidly. It is a
  little embarrassing to tell a customer trying to
  order a 250,000 item that you are unable to find
  out whether or not the equipment can be delivered
  this month! As a sales man this embarrassment is
  accentuated by the sales bonus scheme on which a
  coveted life style depends.
• The software development department were against
  the ropes. In the early stages of the business
  they had responded magnificently as new
  requirements emerged for the business.
  Gradually, but inevitably, the creeping plague of
  maintenance and enhancement had eliminated
  capacity for new developments. No proper
  analysis of computing requirements had ever been
  necessary. When computer demand overflowed
  capacity a new computer was ordered. Now,
  however, a runaway increase was occurring in
  processing time devoted to data maintenance. In
  short the computing platform was crumbling under
  the weight of demand and poor architecture.

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Distributor case (continued)

• But, the technological implications could be
  overcome. The overseas equipment manufacturer
  was offering an enticing deal. Not only could
  the distributorship continue with new products
  becoming available to market, but a new software
  distributorship system could be leased as well.
  All that was necessary was to eliminate the
  obsolete systems development department and
  replace it with operations staff well trained at
  managing and customising the new system. As
  well, the operations staff could be trained at
  the equipment manufacturer's new training centre
  being established nearby in Singapore. The
  advances in global communication could thereafter
  ensure instant response from the headquarters
  development group to any new problems that arose.
• The Managing Director knew that the deal was
  sound He felt confident in the equipment
  manufacturers continuing ability to deliver
  product and system improvements to his
  distributorship. Profit share of total revenue
  would decrease, but his ability to supply and
  service customers would be enhanced. Total
  profit would in fact increase along with
  significantly higher revenue. But he had another
  concern.
• As the Managing Director of a major supplier in
  Australia of manufacturing equipment, he began to
  wonder about his influence over the direction of
  the company. As he thought, he began to realise
  that about the only way he would be directing the
  business was in setting the sales bonus levels.
• But note that the problem is not necessarily
  intrinsically in the system, nor in the business
  - but rather in the link and alignment between
  the system and the company.

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Class dialog

• What happened?
• Where did the problems lie?
• Why might it have happened?
• What are the options?

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