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Chapter 13 Organizing Information Systems Resources. The Strategic Management of Information Technology. Transaction Processing System. Input. Process. Output. Systems Development. Communication. Information. Object-Oriented Approach. Catalog objects Found by keywords

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Chapter 13 organizing information systems resources l.jpg
Chapter 13Organizing Information Systems Resources

The Strategic

Management of



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Transaction Processing System




Systems Development



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Object-Oriented Approach

  • Catalog objects

    • Found by keywords

    • In a Library or Database

  • Objects

    • Exhibit certain behaviors

    • Attributes and operations are encapsulated or pulled together

    • Operations describes how attributes are processed

    • Behave in certain ways in response to messages

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Object-Oriented Approach

  • Classes

    • Set of Objects that share common structure and behavior

  • Inheritance

    • Objects receive attributes and operations from other objects

    • Add more attributes and operations of their own

  • Polymorphism

    • Ability of object to respond to and implement each object

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Research Directions:Systems Development

  • Object/Oriented Programming

  • Client/Server Technology

  • Project Management

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Research Directions:Systems Development:Object/Oriented Programming

  • Defining Objects, Classes, and Use Cases

  • Identifying:

    • Objects

    • Components

    • Applets

  • Expediting Code Process

    • Reuse

    • Data Repositories

    • Data Libraries







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Research Directions:Systems Development:Client/Server Technology

  • Local Area Network Implementation

    • Novell

    • Unix

    • Windows/NT

  • Mail and Database Considerations

  • Internet Linkages

  • Three-Tier and Two-Tier Architectures

    • Mainframe

    • LAN

    • Personal Computer







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Research Directions:Systems Development:Project Management

  • Breaking Development Process into:

    • Tasks

    • Summary Tasks

    • Milestones

  • Tracking Development Process

    • Cost

    • Resources

    • Duration

    • Time

    • Completion

  • Project Management Tools

    • Microsoft Project

    • AllClear

    • Project Workbench







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Business Integration

  • Business integration is a process, not a project

  • People need time to change

  • Recognize the potential up front

  • Make job changes throughout the organization

  • Manage the pace of change

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Transition from “Art” to a More Structured Approach

  • Implement systems planning and project management techniques.

  • Stress systems analysis to define user requirements.

  • Develop alternative conceptual systems designs for evaluation and selection before making a major commitment to detailed design, technology acquisition, and software development.

  • Design all systems components functionally, including technology and controls, for further review, evaluation, and implementation.

  • Use the detailed functional design as a blueprint or guide in applying software designing, coding, and testing.

  • Use a coordinated, planned approach to systems implementation.

  • Prepare clear, complete, and current documentation.

  • Perform a postimplementation review.

  • Design for and perform systems maintenance.

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Two Organizational Systems

  • An information link is a value-added chain between two organizations, such as between a dealer and a manufacturer, used after the two organizations have established a relationship

  • An electronic market is a computerized marketplace with several buyers and several sellers, with someone acting as the market intermediary.

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Business Integration

  • Guiding vision is put in its place

  • Program management is given proper support

  • Underlying technical problems are tackled fully and early enough

  • People are given the appropriate help in changing the way they work

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The Difference Between a Product-Line Approach and a Customer Segmentation Approach to Marketing

  • In the product line approach (technology-driven), products are spawned from the technology to create wants, while in the customer segmentation approach (market-driven), products are assembled to meet predetermined needs of customer segments.

  • In the product line approach, the systems development and the delivery function (marketing) are the responsibility of the managers of technology. Product marketing by the producers in a popular structure for entrepreneurial products (leading edge technologies) and organizations in early growth.

  • In the customer segmentation approach, the delivery function (marketing) is customer-oriented and market-driven (instead of technology-driven). Products are developed to meet well defined needs by employing only those technologies that are necessary to do so.

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Five responsibility Areas in the Leadership Role for CIO’s Customer Segmentation Approach to Marketing

  • Understand the business

  • Establish credibility of the systems department

  • Increase the technological maturity of the firm

  • Create a vision of the future and sell it

  • Implement an information system architecture

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Seven ways to Customer Segmentation Approach to Marketing“Learn the Business”

  • Have project teams study the marketplace

  • Concentrate on lines of business

  • Sponsor weekly briefings

  • Attend industry meetings with line executives

  • Read industry publications

  • Hold informal listening sessions

  • Become a “Partner” with a line manager

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Vision Customer Segmentation Approach to Marketing

  • A Vision is a statement of how someone wants the future to be or believes it will be; it is used to set direction for an organization.

  • Strategies tell how someone is going to get somewhere; it is their plan for the future.

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Boeing’s Three Visions Customer Segmentation Approach to Marketing

  • The right part in the right place at the right time.

  • Create an enhanced information stream

  • Define a strategic business architecture

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Five Waves of Innovation Customer Segmentation Approach to Marketing

  • Wave 1: Reducing cost

  • Wave 2: Leveraging investments

  • Wave 3: Enhancing products and services

  • Wave 4: Enhancing executive decisionmaking

  • Wave 5: Reaching the consumer

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Five Attitudes CEOs Take Toward IT Customer Segmentation Approach to MarketingWilson’s Study

  • The majority of CEOs interviewed -- 52% to be exact -- are neutral, believing they do not have enough knowledge to direct IT investments.

  • Quadrant 1: CEOs in this category have a high degree of confidence in receiving benefits from IT investments. 12%

  • Quadrant 2: CEOs in this category are well aware that implementation problems can destroy that potential. 26%

  • Quadrant 3: CEOs countered here are pessimistic about IT, believing that all systems will be delivered over-budget. 8%

  • Quadrant 4: CEOs in this category believe that IT is harmful because it introduces chaos and too much change for people to cope well. 2%

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Major Roles for Systems Departments Customer Segmentation Approach to Marketing

  • An increasing trend to outsourcing

  • The appearance of high-impact projects by high-caliber SWAT teams

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Relationships for CIOs (Keen) Customer Segmentation Approach to Marketing

  • Cooperative external relationships

  • Partnerships between systems and senior management

  • Partnering between systems professionals and users

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Marketplace Changes Customer Segmentation Approach to Marketing

  • The quality imperative

  • Consumer computing

  • Deregulation of some major industries

  • Crossing industry boundaries

  • Traditional customers are “leaving”

  • Crossing national boundaries

  • Production is becoming global

  • New product and service development cycles are shortening

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Two Ways Companies and Alliances Compete with Information Technology

To Stay in Business

  • Quality

  • Service

  • Innovation

  • Speed

    To Gain Market Share

  • Competing With Time

  • Total Quality Management

  • Customer is King

  • Innovate or Die

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Wiseman’s Approach to Strategic Thrusts Technology

  • Differentiation

  • Cost

  • Innovation

  • Growth

  • Forming alliances

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TELOS Technology

  • Technical Feasibility

  • Economic Feasibility

  • Legal Feasibility

  • Operational Feasibility

  • Schedule Feasibility

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Unsuccessful Systems Technology

  • Systems were developed which did not support business strategies and objectives.

  • Poor systems planning and inadequate project management.

  • Failure to define or understand user requirements.

  • Negligence in estimating costs and benefits of the systems project.

  • Creation of a myriad of design defects and errors.

  • Acquisition of computers and software that no one needs or knows how to use.

  • Installation of incompatible or inadequate technology.

  • Negligence in implementing adequate controls.

  • Development of unstructured, unmaintainable software.

  • Inadequate implementation tasks.

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SMDS Technology

  • Switched Multimegabit Data Services is a switched service for MANs that uses cell relay technology.

    • The service is now being offered by local telephone companies and promoted for linking LANs within metropolitan areas.

    • Long distance carriers are also looking into offering it between MANs, as is Stanford University to transfer medical images (such as CAT scans) and earth resources mapping images among buildings on the campus

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Characteristics of Interorganizational Systems Technology

  • At least two parties to create an IOS, thus the partners in the venture must have a willingness to cooperate and the ability to perform the work.

  • Standards play a major role in permitting many IOS efforts to get off the ground.

  • Education of potential partners is often more of a hurdle than the technology.

  • Coordination of joint systems often entails using a third party.

  • The various efforts need to be synchronized.

  • Work processes are often re-evaluated.

  • Technical issues are minor compared to the relationship issues.

  • IOS often requires more openness than traditional system development.

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Interoperability Technology

  • The capability for different machines, using different operating systems, on different networks to work together on tasks-exchanging information in standard ways without any changes in the command language or in functionality and without physical intervention.

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Investment Strategy Analysis Approach To Studying Current Expeditures

  • The true “intensity of beliefs” about the use of technology, says Norton. It allows the managers to stand back from the business, see where the investments are currently being made, and then decide where they should be made in order to align the information systems investment with the business strategy.

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Problem-Solving Approach to Information Systems Expeditures

  • Techniques that can be used to enhance several I/S/ planning approaches.

  • Recognizing the problem, analyzing problem information to develop a useful problem definition, generating solutions, and selecting and implementing a solution.

  • Opportunity identification

  • Nonlinearity and recursiveness of the model, and the identification of a variety of creativity techniques for each problem-solving phase.

Couger’s three variants to the classical method

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Critical Success Factors in the ExpedituresSystems Planning Process

  • Critical success factors are the few key areas of the job where things must go right in order for the organization to flourish. Factors are critical for accomplishing the objectives, and are also used to determine the prime measures for satisfying each factor.

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Examples of Distributed Systems Structures Expeditures

  • A hierarchy of processors is the most familiar data processing structure, with a large, controlling computer at the top of the hierarchy and PCs or terminals at the lowest level. The important characteristic of its structure is that the mainframe, or host computer, is the central, and controlling, component.

  • Decentralized stand-alone systems do not really form a distributed system at all. They are basically a holdover from the 1960s, when departments put in their own departmental computers, with no intention of connecting them to other systems. Hence, they are decentralized, not distributed.

  • Systems based on a local area network (LAN) have become widely used as the basis for distributed systems. This approach began in the office system arena with LANs providing the links between PCs, print servers, and gateways to other networks. This structure has no hierarchy, processors communicate on a peer-to-peer basis.

  • LAN-based systems that communicate with mainframe-based systems another structure for distributed systems. It is essentially a combination of the hierarchy approach (for mainframe-based processing) and the LAN-based system (in offices).

  • Cooperative systems are the newest member of the distributed system family. A cooperative system melds and extends the previous approaches. All the components are linked to each other via interconnected LANs and wide area networks (WANs). In essence it is an internet-a network of networks. All machines are equal; no machine is at the hub.

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Key Messages for Managers and Analysts Expeditures

  • Process innovation is a new and desirable approach to transforming organizations and improving their performance

  • An explicit approach to process innovation is important

  • Information and information technology are powerful tools for enabling and implementing process innovation

  • How a firm approaches organization and human resources is critical to the enablement and implementation of innovative processes

  • Process innovation must occur within a strategic context and be guided by a vision of the future process state

  • Innovation initiatives can benefit all manner of processes

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Scenario Approach to Planning Expeditures

  • A way to manage the assumptions required for planning by creating scenarios that combine trends, events, environmental factors, and the relationships among them.

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Scenarios should Include: Expeditures






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High Expeditures

Five. Business scope redefinition

Four. Business network redesign

Revolutionary levels

Three. Business process redesign

Evolutionary levels

Two. Internal Integration

One. Localized exploitation




Range of potential benefits

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Enablers Expeditures


  • Technological

  • Favorable cost- performance trends

  • Vendor push--system solutions

  • Technological

  • Obsolescence

  • Further reduction in cost-performance

IT-induced reconfiguration: Level One

  • Organizational

  • Localized impact

  • Ease of assessing efficiency benefits

  • Minimal disturbance to operations

  • Organizational

  • Lack of strategic vision

  • Unwillingness to recognize the strategic role of IT and IS

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Enablers Expeditures


  • Technological

  • Favorable cost- performance trends

  • Technological

  • Uncertainty

  • Cost of redesign

IT-induced reconfiguration: Level Three

  • Organizational

  • Awareness of the power of IT

  • Willingness to make quantum changes to fully exploit IT power

  • Organizational

  • Lack of strategic vision for redesign

  • Organizational inertia

  • Costs of transforming the organization

  • Marketplace

  • Competitive pressures

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Tightly coupled Expeditures

Business network redesign

Collaborative advantage

Business governance

Electronic infrastructure

Competitive advantage

Loosely coupled

Common role

Unique role

Information technology governance

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Technology Enablers and Inhibitors Expeditures



  • Lack of standards

  • Lack of vision and understanding

  • Lack of commitment to integration

  • Possible erosion of market positions

  • Ability to specify and/or create standards for integration

  • Identification of value-added services

  • Recognition of mutual benefits

IT-induced reconfiguration: Level Four

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Three Phases of Business Transformation Expeditures


Phase 3



Phase 2



Performance Focus

Phase 1







Organizational Focus

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Boundary transforming technologies Expeditures









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Attributes of Innovations Expeditures

Relative advantage - The innovation is technically superior (in terms of cost, functionality, “image”, etc.) than the technology it supersedes.

Compatibility - The innovation compatible with existing values, skills, and work practices of potential adopters.

Complexity - The innovation is relatively difficult to understand and use.

Trialability - The innovation can be experimented with on a trial basis without undue effort and expense; it can be implemented incrementally and still provide a net positive benefit.

Observability - The results and benefits of the innovation’s use can be easily observed and communicated to others.

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Economic Factors Impacting Technology Adoption Expeditures

Prior Technology Drag - A prior technology provides significant network benefits because of a large and mature installed base.

Irreversibility of Investments - Adoption of the technology requires irreversible investments in areas such as products, training, and accumulated project experience.

Sponsorship - A single entity (person, organization, consortium) exists to define the technology, set standards, subsidize early adopters, and otherwise promote adoption of the new technology.

Expectations - The technology benefits from an extended period of widespread expectations that it will be pervasively adopted in the future.

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Strategic Process Elements Expeditures

Technology Forecasting

Implementation Plans and Measurement

Competitive Analysis

Business and IT Alignment

Assessment of Effectiveness

Initiative Identification and Justification

Models and Architectures

Culture and Commitment

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Systems Maintenance Phase Expeditures

  • Systems Plan Report

  • Systems Analysis Report

  • General Systems Design Report

  • Systems Evaluation and Selection Report

  • Detailed Systems Design Report

  • Systems Implementation Report

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Prototyping Expeditures

  • User requirements

  • Input, output, and transactions

  • Databases

  • Controls

  • Technology

  • Applications

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Four Types Of Documentation Expeditures

  • Systems Documentation

  • Software Documentation

  • Operations Documentation

  • User Documentation

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Information Engineering Methodology (IEM) Expeditures

  • Systems Planning

  • Systems Analysis

  • Systems Design

  • Systems Construction and Implementation

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Changes in Traditional Environments Expeditures

  • Many organizations are emphasizing teams to accomplish major tasks and projects.

  • Information workers are increasingly mobile.

  • Organizations are examining what they should do internally, and what should be done by some other organization.

  • Corporations are shifting their emphasis from financial capital to human capital.

  • New forms of self-managing groups are appearing.

  • A coming labor shortage will result in more jobs for women, part-time older people, and the poor and disadvantaged.

According to Naisbitt and Aburdene

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Procedure-Based vs. Goal-Based Information Systems Expeditures

Procedure-Based Activities:

  • Tend to consist of high volumes of transaction in which each has relatively low cost or value.

  • Are based on well-defined procedures (or algorithms) where the outputs are well-defined too.

  • Are based on the handling of data.

    Goal-Based Activities

  • Tend to handle fewer transactions of higher value or cost.

  • Are based on ill-defined processes (or heuristics) and the outputs are less defined as well.

  • Tend to focus on defining the problems and the end results or goals with effectiveness stressed in achieving them.

  • Are based on the handling of concepts.

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Three Components of the Marketing Model Expeditures

  • A set of technologies that represent products, developed by the systems department in an organization

  • A set of users of the technology who we can view as customers for these products

  • A delivery mechanism for developing, delivering, and installing these systems that is analogous to marketing activities

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Main Purpose of Each of the Three Groups in Mead’s Current Information Resources Organization

  • Information Resources Planning and Control Department - the corporate perspective for information systems planning to ensure that Mead’s information resources plans meshed with business plans, and acted as planning coordinator to help various groups and divisions coordinate their plans with corporate and information resources plans.

  • Information Services Department - computer operations, development of corporate-wide systems, provided technical services, and furnished all the telecommunications services to the company

  • Decision Support Applications (DSA) Department - all end user computing support for the company