Understanding the Business Value of Systems and Managing Change
اسلاید 1: Understanding the Business Value of Systems and Managing ChangeChapter 14
اسلاید 2: ObjectivesHow can our company measure the business benefits of our information systems? What models should be used to measure that business value? Why do so many system projects fail? What are the principal reasons for system failures?How should the organizational change surrounding a new system be managed to ensure success?
اسلاید 3: ObjectivesAre there any special challenges to implementing international information systems?What strategies can an organization use to manage the system implementation process more effectively?
اسلاید 4: Management ChallengesDetermining benefits and costs of a system when they are difficult to quantify.Dealing with the complexity of large-scale systems projects.
اسلاید 5: Two Kinds of Information System InvestmentsSystem ProjectsInfrastructureUnderstanding the Business Value of Information Systems
اسلاید 6: IT Investment ValuesImprovement in business processesImprovement in management decision makingLonger Term ValuesImprove strategic positionImplement new technologies and productsUnderstanding the Business Value of Information Systems
اسلاید 7: Capital BudgetingRely on measuring cash inflows and outflows6 capital budgeting modelsPayback methodAccounting rate of return on investment (ROI)Net present valueCost-benefit ratioProfitability indexInternal rate of return (IRR)Understanding the Business Value of Information SystemsTraditional Capital Budgeting Models
اسلاید 8: Costs and Benefits of Information SystemsCosts: Hardware, telecommunications, software, services, personnelTangible benefits (cost savings): Increased productivity, lower operational costs, reduced workforce, etc.Intangible benefits: Improved asset utilization, improved resource control, improved organizational planning, etc.Understanding the Business Value of Information SystemsTraditional Capital Budgeting Models
اسلاید 9: Limitations of Financial ModelsCosts and benefits don’t occur in same time frameDifficulties in measuring intangible benefitsBias toward applications with specific business functionsOverlook social and organizational costs and benefitsUnderstanding the Business Value of Information SystemsTraditional Capital Budgeting Models
اسلاید 10: Heartland StoresGeneral merchandise retail chain upgrading supply chain management systemReduce inventory costs: Items stocked in inventoryReduce labor costs: Inventory and tracking personnelReduce telecommunication costs: Less time on phone tracking inventory and shipmentsReduce transportation costs: Consolidating shipments, more efficient shipping schedulesUnderstanding the Business Value of Information SystemsCase Example: Capital Budgeting for a New Supply Chain Management System
اسلاید 11: Understanding the Business Value of Information SystemsCosts and benefits of the new supply chain management systemFigure 14-1
اسلاید 12: Understanding the Business Value of Information SystemsFinancial modelsFigure 14-2
اسلاید 13: Understanding the Business Value of Information SystemsPayback MethodTime required to pay back initial investment of projectCase Example: Capital Budgeting for a New Supply Chain Management System
اسلاید 14: Understanding the Business Value of Information SystemsAccounting Rate of Return on Investment (ROI)Desired rate of return must equal or exceed cost of capitalCase Example: Capital Budgeting for a New Supply Chain Management System
اسلاید 15: Understanding the Business Value of Information SystemsNet Present ValueCompare investment with future savings and earningsCase Example: Capital Budgeting for a New Supply Chain Management System
اسلاید 16: Understanding the Business Value of Information SystemsCost-Benefit RatioRatio of benefits to costCase Example: Capital Budgeting for a New Supply Chain Management System
اسلاید 17: Understanding the Business Value of Information SystemsProfitability IndexAllows ranking of different possible investmentsCase Example: Capital Budgeting for a New Supply Chain Management System
اسلاید 18: Understanding the Business Value of Information SystemsInternal Rate of Return (IRR)Rate of return, or profit, that an investment is expected to earnDiscount (interest) rate that will equate the present value of the projects future cash flows to the initial investment costCase Example: Capital Budgeting for a New Supply Chain Management System
اسلاید 19: Understanding the Business Value of Information SystemsPortfolio AnalysisAnalysis of portfolio of potential applications to determine risks and benefits, and select among alternativesScoring ModelsMethod for deciding among alternative systems based on a system of ratings Strategic Considerations
اسلاید 20: Understanding the Business Value of Information SystemsA system portfolioFigure 14-3
اسلاید 21: Understanding the Business Value of Information SystemsReal Options Pricing ModelsModels using techniques for valuing financial options to evaluate information technology investments with uncertain returns Knowledge Value–Added ApproachFocuses on knowledge input into a business process Determines costs and benefits of changes in business processes from new information systemsStrategic Considerations
اسلاید 22: Understanding the Business Value of Information SystemsMulti-Factor ProductivityMeasure of firm’s efficiency in converting inputs to outputsAmount of capital and labor required to produce a unit of output“Productivity Paradox”Information Technology Investments and Productivity
اسلاید 23: Understanding the Business Value of Information SystemsInformation Technology ContributionsManufacturing: Increased productivityService sector: Benefits unclearInformation and knowledge industries: Benefits difficult to measureInformation Technology Investments and Productivity
اسلاید 24: The Importance of Change Management in Information System Success and FailureInformation system problem areasFigure 14-4
اسلاید 25: The Importance of Change Management in Information System Success and FailureDesignFailure to capture essential business requirementsInformation in difficult to use format; poor user interfaceIncompatible with organization structure, culture, goalsInformation System Problem Areas
اسلاید 26: The Importance of Change Management in Information System Success and FailureDataInaccuracy, inconsistency of dataNot organized properly for business purposesCostCost to implement and run prohibitiveOperationsComputer operations breaking downInformation delays, slow response timesInformation System Problem Areas
اسلاید 27: The Importance of Change Management in Information System Success and FailureImplementationAll organizational activities working toward the adoption, management, and routinization of an innovationChange AgentIndividual acting as catalyst during the change processChange Management and the Concept of Implementation
اسلاید 28: The Importance of Change Management in Information System Success and FailureUser Involvement and InfluenceMolding system to user priorities and business requirementsPositive involvement in systemUsers can take limited view of systemUser-designer communications gapCauses of Implementation Success and Failure
اسلاید 29: The Importance of Change Management in Information System Success and FailureFactors in information system success or failureFigure 14-5
اسلاید 30: The Importance of Change Management in Information System Success and FailureManagement Support and CommitmentPositive perceptionInducement to participationSufficient funding and resourcesEnforcement of workflow changesCauses of Implementation Success and Failure
اسلاید 31: The Importance of Change Management in Information System Success and FailureLevel of Complexity and RiskProject size: Greater risk with larger projectsProject structure: Greater risk with less defined outputs and processesExperience with technology: Greater risk if project team and information systems staff lack required expertiseCauses of Implementation Success and Failure
اسلاید 32: The Importance of Change Management in Information System Success and FailureResults of Poorly Managed Systems ProjectsCosts that vastly exceed budgetsUnexpected time slippageTechnical shortfall; poor performanceFailure to obtain anticipated benefitsCauses of Implementation Success and Failure
اسلاید 33: The Importance of Change Management in Information System Success and FailureConsequences of poor project managementFigure 14-6
اسلاید 34: The Importance of Change Management in Information System Success and FailureFactors in Poor Management:Ignorance and optimismThe mythical man-monthWhen adding labor can slow productivityFalling behindBad news travels slowly upwardCauses of Implementation Success and Failure
اسلاید 35: The Importance of Change Management in Information System Success and Failure70% failure rate in BPR projectsHigh failure rate in enterprise applicationsPoor implementation; inadequate change managementM&As: Require considerable organizational change and system projects to combine information systems of two companiesChange Management Challenges for Business Process Reengineering (BPR)Enterprise Applications, and Mergers and Acquisitions
اسلاید 36: The Importance of Change Management in Information System Success and FailureDisparate information requirements and business processesLocal facility differencesNational accounting lawsTransborder data flowLanguageThe Challenge of Implementing Global Systems
اسلاید 37: The Importance of Change Management in Information System Success and FailureTechnology hurdles: lack of standards and connectivityStandardizing computer hardware platformSoftware for international teamworkIntegrated global networks difficult, costly to installStandards for networking and EDI are industry and country specificLocal user resistance to global systemsThe Challenge of Implementing Global Systems
اسلاید 38: The Importance of Change Management in Information System Success and FailureGlobal E-Commerce: Good and Bad NewsWhat management, organization, and technology issues should be addressed when developing a global Web strategy?Window on Organizations
اسلاید 39: Managing ImplementationManaging technical complexityInternal integration toolsFormal planning and control toolsProgram Evaluation and Review Technique (PERT)Gantt chartsIncreasing user involvement and overcoming user resistanceExternal integration toolsUser participation, education and training, incentivesControlling Risk Factors
اسلاید 40: Managing ImplementationFormal planning and control tools help to manage information systems projects successfullyFigure 14-7
اسلاید 41: Managing ImplementationOrganizational Factors in Systems Planning and ImplementationEmployee participation and involvementJob designStandards and performance monitoringErgonomicsEmployee grievance resolution proceduresHealth and safetyGovernment regulatory complianceDesigning for the Organization
اسلاید 42: Managing ImplementationOrganizational impact analysisStudy of how a proposed system will affect the organization structure, attitudes, decision making, and operationsSociotechnical designEstablishes human objectivesSeparate sets of technical and social design solutionsDesign based on best fit to technical and social needsDesigning for the Organization
اسلاید 43: Managing ImplementationLimit transnational development to core systemsCooptationBringing opposition into development processSeparate transnational systems developed by separate country unitsGlobal technology infrastructureInternational private network, VANsInternet technology: VPNs, intranetsManaging Global Implementations
اسلاید 44: Managing ImplementationLocal, regional, and global systemsFigure 14-8
اسلاید 45: Managing ImplementationProject planning as an enterprise-wide focusManagers focus on solving problems as they arise and meeting challenges Seek ways to adapt to unforeseen uncertainties that could provide additional opportunities“Fourth Generation” Project Management
اسلاید 46: Chapter 14 Case StudyEvaluate Cigna using the value chain and competitive forces models. What was Cigna’s business strategy?What was the relationship of its information systems to Cigna’s business systems and business strategy? How well did its systems support its strategy? How did they provide value for the company?What management, organization, and technology factors contributed to Cigna’s problems?Cigna Stumbles with a New Customer Service System
اسلاید 47: Chapter 14 Case StudyClassify and describe the problems that Cigna faced in trying to modernize its customer-facing systems using the categories described in this chapter on the causes of system failure.Evaluate the risks of the Cigna systems modernization project as seen at its outset, and then outline its key risk factors. Describe the steps you would have taken during the planning stage of the project to control these factors.Cigna Stumbles with a New Customer Service System
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