Final Study Sheet.docx

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Ryerson University
Information Technology Management
ITM 100
Ron Babin

Chapter 6 The big four IS Development Questions – The four questions an organizations needs to address before implementing a new IS for itself.  Is there a need for an information system?  Is the project feasible? o Feasibility Study - a detailed investigation and analysis of a proposed development project, to determine whether it is technically and economically possible. o Technical Feasibility – Examining potential solutions and evaluating these solutions based on its capabilities and capabilities of any technology partners it may choose to work with  Financially Feasibility – if the company is able to pay for the project  Financial measures: return on investment (ROI), net present value (NPV), internal rate of return (IRR), and payback period (These are good to show the future benefit)  costs and benefits are tangible (Value that can easily be applied like salary of workers) and some are intangibles (Difficult to measure like good will)  Build or Buy/Lease? o Building  Best matching of an IS with an organizations requirements, Complete control over system, Obtains a competitive advantage because they are hard to copy if custom built  But building is a very long and costly process o Buying  Faster and less costly then building an IS from scratch  Little/No Competitive Advantage, Compromise on features, Dependant on Vendor for updates o Leasing  Lowest and fastest to put in place, Vendors maintain it, Does not require an in- house staff  No competitive advantage, No control over system features, Dependent on vendor for entire IS, can get locked in undesirable contracts  In-House or Outsource? – When they choose to build, they have to decide on this question o In-House (Using own workers)  Retains complete control of project, Builds internal knowledge through learning and experience  Higher development time and costs, Distraction of in-house IS staff from other duties o Outsource (Hiring another company)  High level of skill and expertise Internal staff provides project oversight (Less time intensive than full development), Lower time and costs  Loses some control of project since it is necessary to give outsourcer some decision making authority, Internal staff has less opportunity to build experience, Requires good contracts and oversight Page 1 of 22 System Development life cycle (SDLC/Methodology) – stages and activities of system development. Composed of processes that occur from the start to it end  Concept – The environment within the organization hopefully fosters ideas that use IS to improve its bottom line  Inception – Organization has an idea to build an information system. Focus is on understanding the problem and planning the project  Elaboration – Finalizes the project plans and designs the system architecture. Also creates conceptual modules of the systems  Construction – Builds the initial system. First implements core functionalities then incorporates additional features  Transition – Finalizes the system and puts it in place. Completes training users and Management during the transition  Production – Monitor, maintain, and evaluate as it runs  Retirement – It becomes obsolete and is replaced by a new system Development disciplines – represent the group of activities that focus on creating the new system Support Disciplines – serve to support the system over its lifetime Enterprise Discipline – Activities that are most active prior to inception of an IS project System analysis and design (SAD) – Process of completing an IS project, 4 Essential ingredients:  People  Methodology  Management  Tools Development Teams – People associated with an IS system usually falls within one or both of two groups, Project teams and stakeholders in the IS. Project Team - The size of an IS development team varies with specific characteristics of the project.  Most IS development teams possess the following skills:  Project strategy - Ability to ensure that the project goals correspond to the organization’s business objective  Project management - Knowledge of methods and techniques to ensure delivery of the project on time and budget  Account management - This group is responsible for sales and service of the project team  Architecture and design: Provides for a well-designed user interface Page 2 of 22  Programming - Creates the technical infrastructure of the system  Specialists - Handles unique aspects of the project  Client interface (Business Systems Analysis) - Deals with the client to ensure they meet their responsibilities to the project Stakeholder Analysis – A stakeholder analysis begins with a list of stakeholders, including what each has at stake, as well as the degree of impact each stakeholder can have on the project  attitudes toward the project can dramatically impact the project’s eventual success or failure  should begin as part of the feasibility study and should be continued during the course of the project  The analysis should also to identify each stakeholder’s attitude toward the project and any risks  A project manager should assign team members to different stakeholders with an anticipated strategy for dealing with each one Methodology (SDLC) - provides a framework for both the management and technical processes of an IS project  provides a project team with structure to ensure that everyone is working towards the same project goals  will define most of the development activities that are part of the plan developed by the project manager  Reason we need Methodology: Initially, systems developers used an ad hoc approach called the build-and-fix model in which the system was built based on customer interview and then tested -- this approach often did not meet customer needs because it lacked a plan Methodology Models  Waterfall Model - a number of phases in which a new phase begins only after acceptably completing the preceding phase. o If problems are found, it is possible to cycle back to a previous phase  Evolutionary Model – Developers create an important part of the systems with minimal functionality. The team tests and evaluates the system to plan for the next version, on each new version it adds new functionality and features. o The process helps team members and users better understand requirements o A problem with evolutionary life cycle approach can be the failure to create a well- defined set of documents making it difficult to monitor and control the project  Agile Development Methodology - development team develops software in short development cycles or increments  Each cycle may include all of the primary phases of the process  Agile Development Methods o Extreme Programming Page 3 of 22 o Crystal Family o Rational Unified Process (RUP) o Scrum  IS Model - a model usually includes one or more diagrams that developers use to examine, evaluate, and adjust in order to understand the system requirements and performance o You can think of a model as a simplified representation of something real like a building, a weather pattern, or an information system. o A model can be a set of mathematical equations, a computer simulation, a graph or chart, or any of many other types  Entity relationship diagram (ERD) And Logical data model - Two types of models are commonly used to designing the organization of relational database o ERD - indicates the entities and how they are related o Logical Data Model - translates the ERD into a diagram of the tables in the database  Data Flow Diagram - a traditional IS model that depicts how data move or flow through a system  Unified Modeling Language (System Model) - made up of several graphical elements that are combined to form a set of diagrams o Purpose is to show multiple views of a system o As a language, the UML has a grammar or rule for combining these elements into diagrams o A very popular modeling tool in industry  UML Sequence Diagram – to view the interactions between system components as they occur Project Management - application of knowledge skills, tools, and techniques to project activities to meet project requirements  For IS development, a project manager oversees three main project elements: 1. Project score: what the project should accomplish 2. Resources needed: people, equipment, material, and money 3. Time to complete it Four core functions lead to specific project objectives: 1. Project scope management: identifying and managing all tasks required to complete project Page 4 of 22 2. Time management: estimation duration of project, developing acceptable schedule, and managing project to ensure timely completion 3. Cost management: preparing a budget and managing the costs of the project to stay in budget 4. Quality management: ensuring that the finished project satisfies its defined goals Project Time Management - Controlling the project schedule is second only to budgeting in importance. The main activities of project time management include  Activity Definition: to identify the activities that team members need to do to complete the project including each activities completion time, expected cost, and needed resources  Activity Sequencing: to determine the order of activities as well as dependencies and relationships between them  Activity estimating: To determine how each activity will take in terms of standard work periods  Schedule development: to create a deliverable schedule document based on activities duration and resources requirements  Schedule control: to keep the project on schedule Risk management - to recognize, address, and eliminate sources of risk before they become a threat to the successful completion of the project.  Risk Response : Move risk to somebody better able to deal with it  Risk Transfer : Adjust schedule to move some activities to later date when risk is less  Risk Reduction : Either reduce probability of risk occurring or lessen impact  Risk Acceptance : Accept the risk, but make sure contingency plans are in place  Risk Avoidance: Eliminate the possibility of risk occurring. Project management (PM) software is designed to support and automate the tasks of project management and to help project managers make decisions  Low level packages for entry-level users, include tools for basic scheduling, project control, reporting, filtering and sorting  Mid level packages: adds resource leveling, resource allocation, cost control and flexible charting. For large projects with up to about 2,000 tasks  High level packages: adds advanced functions including scheduling by user-defined rules, programming languages, resource management for multiple projects, and risk management Program Evaluation Review Technique (PERT) – To schedule and manage tasks within a project Integrated Development Environment (IDE) – allows developers to complete several programming tasks within the same software application Example: J-Creator Page 5 of 22 Code generation – Graphical diagram to define a systems components and how they are related, then with a simple click of a button a developer generates code that corresponds to the diagram in language like java or C++. Example: J-Grasp Computer aided software engineering (CASE) is the use of computer-based support in the software development process  CASE tools are integrated into a complete package known as a CASE environment  A CASE environment can provide a shared database, messaging system, and support for consistent development style Chapter 7 E-commerce - the use of information systems, technologies, and computer networks to carry out transactions in order to create or support the creation of business value  do not want to restrict ourselves to just the Internet  E-Commerce includes all types of computer networks and all types of transactions including electronic funds transfers and EDI over private networks as well as retail sales and wholesale exchanges over public networks like the Internet.  Products can be divided into two primary categories: physical and electronic o Physical products include anything that requires an actual shipment of a package to the buyer, e.g., computer hardware o Electronic products can be received directly over the Internet or other computer network, eg, computer software  E-commerce companies must have back-office elements to handle order fulfillment and to handle returns for physical goods  Companies experienced in order fulfillment and returns have tended to be successful in dealing with physical goods using E-commerce Types of Commerce  Business-to-consumer (B2C) - Online equivalent of retail store as well as other services Example:  Business-to-business (B2B) - Electronic exchanges between companies  Business-to-government (B2G) - Online sales to government agencies  Consumer-to-government (B2G) - Electronic payment of taxes  Consumer-to-consumer (C2G) - Use of online auctions like eBay or Yahoo! Auctions E-Commerce Advantage –  The use of computer networks, especially the Internet, to carry out transactions between a variety of buyers and sellers is creating a tangible “e-commerce difference” in our economy, especially with regard to Page 6 of 22 o Technology o Competition o Strategy  Over 1 billion potential customers around the world in the marketspace due to increasing Internet access  Universal standards make it work the same way no matter where in the world you might be  Innovative uses of the Internet have produced global competition with sellers being able to reach any potential buyer in the world  This is true for both the large retailers and for those selling in niche market  Technology has increased information density—the quality and quantity of information about products and services  Customers can obtain product guides, reviews, and prices from a myriad of Web sites creating business challenges  One response to information density is to create business value based on a customization- oriented approach to e-commerce  Two approaches to customization are: mass customization and personalization o Mass customization is the ability to create custom products or services on-demand, eg, Dell customers can customize their PC o Personalization is a marketing message that a business personalizes for each potential customer’s interests based on searching, browsing, or buying habits, e.g., E-commerce Competition - is having a dramatic effect on competition between organizations in a number of ways including:  Reducing barriers to entry  No one firm or person “owns” the entire market  Enhanced collaboration/alliances  Market niches multiply  Changed marketplace drivers (forces that make things happen in the market, e.g., consumer preferences, number of suppliers a business can choose from) Business Strategy - broad-based formula for how a business is going to compete, what its goals should be, and what plans and policies will be needed to carry out those goals  E-commerce has changed business strategy E-commerce strategy - a general formula for how a business is going to use computer networks and information systems to compete in a global marketplace  To build an e-commerce strategy requires two views of an organization’s strategy: what is wants to do (conceptual) and how it will do it (technology strategy)  One strategy being used by many companies is customer relationship management which enables them to create one-to-one marketing experiences for their customers  Other e-commerce strategies include virtual showrooms, increased channel choices, wider component choice, and use of mobile technology  Mobile commerce is the use of laptops, mobile telephones, and personal digital assistants to connect to the Internet and Web to conduct many of the activities associated with e-commerce B2C For customers Page 7 of 22  Benefits o Lower prices o Shop 24/7 o Greater search ability o Shorter delivery times for digital products o Sharing of information with other consumers o Improved customer service  Limitations o Delay in receiving physical products, plus shipping o In areas without high-speed Internet service, slow download speeds. o Security and privacy concerns, especially with rise of phishing. o Inability to touch, feel, or even smell products prior to the purchase. o Unavailability of micropayments for purchase of small-cost products. B2C For Businesses  Benefits o Expansion of marketplace to global proportions o Cheaper electronic transactions o Greater customer loyalty through customized Web pages and 1-to-1 marketing o Expansion of niche marketing opportunities o Direct communications with customers through Web site, resulting in better customer service  Limitations o Increased competition due to global marketplace o Ease of comparison between competing products drives prices down o Customers want specific choices and will not accept substitutes o Customers control flow of information instead of companies E-Commerce Business Models – a business model defines how a company will meet the needs of its customers while making a profit  An e-commerce business model is a business model appropriate for conducting business via electronic networks  Models: o Brokerage - Brokers bring buyers and sellers together for a fee. Example: EBay, PayPal o Advertising - An extension of the traditional media broadcasting model in which ads appear on Web sites. Example: Google, Yahoo o Merchant - Sell products, both physical and electronic, to consumers Example: Walmart, Canadian Tires o Manufacturer Direct - Make and sell products directly to customer Example: Dell, IBM Page 8 of 22 o Affiliate - Affiliate Web sites are paid a fee when purchases come through them. Example: Amazon recommends websites o Community - Based on user loyalty because of high investment of time and emotion. Example: MySpace o Subscription - Users are charged fee to subscribe to service to service or information source Example: Adult websites o Infomediary - Provides data on consumers and consumption habits Example: NetRatings o Coopetitive - Enable competitors to cooperate on a Web site Example: craigslist E-Commerce Purpose  The purpose of an e-commerce website is another way to understand businesses’ e-commerce business models  No matter how good the business model, it will not generate a profit if not associated with a Web site that brings in customers or at least visitors  There are eight commonly accepted types of Web sites: o Portal - A gateway to many other Web sites Example: MSN o search engine - Finds Web sites that contain a word or phrase Example: Google o Browse or search and buy - Sell goods and services Example: iTunes o sales support - To provide information on a product before or after the sale Example: Microsoft o information service - To provide news, information, commentary, etc. Example: TSN o auction - Facilitate sales between third parties Example: EBay o travel - Sell travel tickets and tours Example: Travel City o special interest or services - Provide information, product sales and support, and contacts between visitors Example: Lava life  A number of these match up with multiple business models B2B - Between Organizations  Doing business with other organizations (B2B) is by far larger than with consumers (B2C)  It is also quite different in terms of the scope of the purchases and the complexity involved in them—especially in the decision making required to make a purchase  For example, while you buy one PC, a company may buy thousands  Interorganizational systems (IOS) are the information systems that handle the information flow between trading partners B2B Transactions - B2B transactions can be divided into two types: spot buying and strategic sourcing  In spot buying - purchases are made at market prices from an unknown seller o Companies often use spot buying to purchase commodities, i.e., uniform in quality differing only in price like gasoline, paper, and cleaning suppliers Page 9 of 22  In strategic sourcing, prices are set through negotiation in a long-term relationship with a company known to the buyer o A company’s large-scale computer purchases often result from strategic sourcing  Strategic sourcing is often carried out through a one-to-one business model, but company- centric and exchange models are also used o In the one-to-one business model, two companies form a trading relationship with neither company dominating the relationship o In the company-centric business model, a company is either a seller to many companies (one-to-many) or a buyer from many companies (many-to-one)  The single company dominates the market and controls the information systems that supports the transactions. Electronic data interchange (EDI) or an extranet is often used to link trading partners  E-procurement is often the name for B2B e-commerce in the many-to-one business model Exchanges - can be cooperative ventures among the companies or it can be run by a larger company that profits from the transactions  In the exchange business model, many companies use an exchange to buy and sell from each other through spot-buying transactions  Exchanges can be classified as vertical or horizontal with vertical exchanges meeting the needs of a single industry  Horizontal exchanges deal with products and services that all companies need  From an e-commerce point-of-view, exchanges are often Web sites that buyers and sellers post their needs and offerings  Just as services are an important part of B2C e-commerce, they are also an important part of B2B e-commerce. o Software - The ability to buy a site license online and then download one copy, which they then burn on CDs, reduces organizations’ cost and time in procuring software o Leasing - Companies can use e-commerce to negotiate the original lease price and to dispose of them at the end of the lease o Travel - Travel is a big item with companies that have more than one office or distant customers, so using e-commerce to provide less expensive travel can save money o Insurance - Companies must insure their buildings, people, vehicles, and so on, and using e-commerce to find better insurance coverage can mean lower costs for the company o Banking - As with consumers, businesses must pay their bills. They must also accept payments from customers. Moving banking online reduces the cost of writing and depositing cheques as well as making the transfer of funds much easier o Stock Trading - As a part of their overall financing process, businesses will often buy and sell other stock as well as their own. Online trading makes this possible for much lower transaction fees Page 10 of 22 o Financing - Businesses often need to raise capital through debt and a number of services now make it possible to do this online for lower transaction fees Supply chain - a network of facilities and distribution options that performs the functions of procurement of materials, transformation of these materials into intermediate and finished products, and the distribution of these finished products to customers.  Procurement is a big part of the supply chain and using e-commerce for e-procurement has resulted in money savings  To see why, we first need to understand the traditional procurement process o the traditional procurement process, there are five steps involving three elements— purchase order, invoice, and receipt of goods: 1. Purchase order (PO) to vendor 2. Goods to buyer along with bill of lading (BOL) 3. Upon receipt of goods and BOL, signed copy of BOL returned to vendor and receipt of goods is filed 4. Vendor sends invoice to buyer 5. Buyer’s accounting department compares PO to receipt of goods and invoice. If there is a match, buyer pays the vendor Interorganizational system (IOS) is a networked information system used by two or more separate organizations to perform a joint business function.  Electronic Data Interchange (EDI) – Allows the exchange of structured information between two computer applications, using minimum human involvement o Even though often overshadowed by newer technology, EDI remains the engine behind the majority of e-commerce transactions worldwide. It is, however, too expensive for most small businesses  Extranets – Collaborative networks that use internet technology to link businesses with their suppliers, customers or other business that share common goals o Extranets: collaborative networks that use Internet technology to link businesses with their customers. Security measures keep data secure and XML is used to transfer the data. o An extranet can be thought of as two connected intranets. Comparing EDI and Extranets  Security o EDI: More secure due to use of private network o Extranets: Less secure then EDI due to use of Internet  Cost o EDI: More costly due to use of proprietary software and private networks Page 11 of 22 o Extranets: Less costly because it uses existing networks and Internet apps  Flexibility o EDI: Less flexible—proprietary software limits use o Extranets: More flexible because based on Internet; greater customization  Trend o EDI: Gradually being replaced by extranet-based apps o Extranets: Gaining wider acceptance due to lower costs Chapter 8 The Generations  First Generation E-Commerce Technologies: Establishing a Web Presence o static content such as company information, online marketing, and company brochures  Second Generation E-Commerce Technologies: Providing Interaction o dynamic content where Web page changes depending on a number of factors such as time and date, user profile, or browser location  Third Generation E-Commerce Technologies: Supporting Transactions o Internal Automation: growth in businesses’ ability to support transactions on the Web  Fourth Generation E-Commerce Technologies: Transforming Process o External Integration: increasing integration with external partners on the Web including allowing transactions between Web applications Web Presence – business has established its existence on the
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