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AZAD College

INFORMATION SYSTEMS
By: M Rafeeq

Chapter- IV

PLANNING OF INFORMATION SYSTEMS


I. Introduction: -
 An Information Systems Planning is an important component of organizational
planning.
 Information Systems play a vital role in the efficiency of a company operation,
effective managerial decision-making and developing organization strategies.

II. Planning Strategies: -


These are the methods to specify Information requirements.
Today manager needs Information to make decisions on pricing, product development,
marketing strategy and resource allocation.
Managers suffer from too much information i.e., printouts, e-mails, etc.
Mangers to make effective decisions require information in timely basis.
Proactive (Controllable) (Steps to change Marketing Environment) in defining their
requirements for computer based Information System.
What is needed? Most managers do not know.

III. Problems with determining Information Systems: -


There are two problems with Information requirements:
1. Failure to understand information needs from a cross-functional
perspective.
2. The limited use of joint application design in interviewing and data
collection.
Business Process Reengineering (BPR) strategy is used to define data requirements,
which should be shared across functional lines.
E.g.: - A manager has to allocate inventory in the most effective way. In order to make a
decision on inventory allocation to a customer, he has to consider the following information:
1. How important is each customer to business?
2. Which customer accounts are most profitable?
3. Which customers need prompt delivery on their orders?
4. What is the credit status of the customer requiring shipment?
Based on the collection of information, the manager needs to make allocation decisions.
In developing IS requirements other functional areas should be taken into account i.e.,
sales and marketing information, accounting and delivery information, etc.

A cross-functional database with information about sales, accounting, customer service,


etc has to be designed. The concept of shared information, which applies to joint application
design process for determining, Information System requirements.

IV. Managing by Wire: - Refer Unit-I

V. Information systems planning methods: -

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These methods specify how an organization can translate its strategic goals into a detailed
information systems development plan to achieve goals. The formal Planning methods are:

METHODS PURPOSE DEVELOPER

Business systems planning (BSP) To specify problems and IBM


decisions.
Critical success factors (CSF) To define critical success factors. John Rockart

Ends/Means (E/M) analysis To specify effectiveness criteria Wetherbe and


for outputs and efficiency. Davis
Criteria for processes.

Fig: - Information planning methods.

CSF Critical success factors Information

BSP Problems Solutions Information

Ends Effectiveness Information


E/M
Means Efficiency Information

Fig: - Information requirements.

VI. BUSINESS SYSTEMS PLANNING (BSP): -


 BSP is a structured approach, which develops information systems plans to satisfy its
short-term and long-term information requirements.
 BSP has three major objectives.
1. Translate the mission, strategies, objectives and structure of a business into an
information systems mission, strategy, objectives and structure.
2. Determine IS's priorities and allocate IS's resources to high-return projects that
support business goals.
3. Plan long-lived IS's based on enduring business processes.

Business Mission
And objectives

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Business Business
Process Applications
Top-down Bottom-up
Planning Implementation

Business Operational
Data Databases

Information systems
Architecture
(Supports multiple applications)

Fig: - BSP approach

1. Top-down planning: -
 It requires a group of Top executive’s layout strategic mission and objectives of
the organization to a Study team composed of managers, professionals and
information systems specialists.
 The Study-team systematically interviews managers throughout the organizations
to determine how these objectives are implemented in the basic functions (marketing,
manufacturing, etc.) and processes (order-entry, shipping, receiving, etc.) of the
business.
 The study-team examines the types or classes of data needed to support the basic
process.
 Information architecture is designed finally, which defines the relationships
between classes of data and the business process. The information architecture
specifies the basic structure, content and relationships of organizational databases that
provide the data needed to support the basic business process.

2. Bottom _ up implementation: -
 It involves application development activities, which are performed by end users
and IS professionals.
 These are specific information system applications (sales transaction processing),
which rely on databases, and the design will be determined by information
architecture.
 Each application serves as a business function that supports mission and
objectives of the organization.

Determining priorities: -

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 Information architecture involves analyzing the relationship of data classes to


business processes. The projects are prioritized according to their benefit, impact,
success and demand.
 Benefit is measured in terms of expected financial returns that will occur if the
project is implemented.
 Impact is the number of people affected and effect on accomplishing overall
objectives.
 Success refers to the probability of projects being implemented successfully with
given risk and available resources.
 Demand measures the need and value of the proposed system.
Each of the proposed information systems projects are related using the four
factors and an overall ranking of projects is developed.

Maximum score Benefit Impact


Impact Success Demand
Demand 40

Production Planning 33 33

Plant status 29
29

Order entry 29

Fig: -Subsystem ranking

Advantages: -
1. BSP is a comprehensive, well-documented and widely used method.
2. It involves top executives and user managers in the planning process for
information systems.
3. BSP objectives and processes for information architecture are developed for
future information systems development.

Disadvantages: -
1. It is time consuming and expensive to implement.
2. Needs specialized training.

VII. CRITICAL SUCCESS FACTORS (CSF): -


 Information requirements are determined by critical success factors i. e, a small
number of key success factors that executives consider critical to the success of the
enterprise.
 A CSF defines “What has to go right” to achieve the business goal.
E.g.: - In Automobile business, manufacturing cost control is an important critical
success factor.

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E.g.: - Managers in the Super market industry consider pricing, product mix,
inventory and sales promotions as critical success factors.
Seminar Company

Mailing list size and quality


Identification of relevant topics
Effective speakers
Organizational goals

Earnings per share


Return on investment
Food corporation
Market share
New product success
Advertising effectiveness
Effective distribution
Product innovation

Fig: - Examples of goals Vs critical success factors

Gather Refine and Develop Define and


individual aggregate management develop ways
management individual agreement on to measure
CSF's management company company
CSF's CSF's CSF's

Define an Define on IS Define IS


information application development
Architecture portfolio project priorities

Fig: - Critical success factor approach

Advantages: -
1. Managers can determine their own critical success factors.
2. This methodology consumes less time, less expensive.
3. The cost accumulation of unnecessary data is limited.
4. CSF approach develops methodology for Decision support systems and
information reporting systems, since it highlight the key information needs of individual
managers and the organization.
Disadvantages: -
1. It is narrow focus and less formal structure more errors will be in the process.
2. Does not include any formal methodology for developing an information
architecture of implementing the IS's development projects.

VIII. ENDS/MEANS (E/M) ANALYSIS: -


Purpose: -

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E/M analysis determines effectiveness criteria for outputs and to specify efficiency
criteria for processes used to generate outputs.

Ends: -
Ends or goods or services provided by the business process to the customers to be in
effective ways.

Ends Effective Information.

Fill customer orders customers orders delivered Summary and exception


when expected, and as soon reports on customer
as or sooner than the deliveries; comparitive
Competitors. Statistics on delivery
service Vs competitors

Fig: - Ends analysis.


Means: -
It determines to evaluate the effectiveness.

Means Efficiency Information


Process credit request Low transaction cost Cost per transaction with
historical trends.
Process credit request Low transaction cost Cost per transaction with
historical trends.
Make shipment Minimize shipment cost Shipping cost categorized
by order, customer and
region.

Fig: - Means analysis.

IX. Organizing information system plan: -


 Rapid changes in technology create many opportunities, but without effective
planning it cannot be organized properly so, strategic planning process for IS enables to
determine:
1. Which information technology opportunities will support competitive strategy?
2. Which application brings highest returns?
3. What patterns of organizations are most effective?

 Once the strategic plans are developed, MIS managers develop tactical plans that
organize.
1. Application development.
2. Technology.
3. Organizational and management of information processing.

1. Application development: -

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The purpose of information system planning is to define application development


project that supports the strategic goals of the organization. Computer aided software
engineering tools (CASE) provide automation support for the system designer and also
improve productivity after identifying the new system development approaches planning
phase, MIS management must allocate the resources to run new methods successfully.
Issues involved in application development in Information System, Planning
process are:
Strategic issues:
1. Which application brings highest returns
2. Which application support strategic goals.
3. Can use CASE tools to improve productivity.
4. Should software package be used
5. Should fourth-generation language be used
Tactical issues:
1. Are projects being completed in time and cost constraints?
2. Do user-managers have an opportunity to review project activities and outcomes in
system development process.
3. Are the phases in development process being successfully accomplished?

2. Technology:
Strategic planning process helps management to identify new technology that
support business plans i.e., office automation, factory automation, teleconferencing etc.
The plan can have possible design interfaces between:
1. Data processing and office automation systems.
2. Administrative data processing and manufacturing systems.
3. Telecommunications networks and local personal computers.
Tactical plans include equipment selection strategy and a vendor policy, which
ensures compatibility between centralized systems.

Issues involved in new technology in information system planning process are:


Strategic Issues:
1. What opportunities does new technology provide?
2. Invest in PC's? Factory automation? Office automation?
3. How to integrate data system with PC's?
Tactical issues:
1. What equipment selection strategy should be designed?
2. What vendor strategy is needed?
3. What controls over equipment acquisition must be introduced?

3. Organizational and Management of Information processing: -


Strategic Decisions organize Information processing. Due to increasing powerful
technologies, growth of workstations, software packages and user friendly languages
organizations made a shift in processing database and application development from
centralized groups to distributed organizational levels.
The MIS planning process must establish central standards and guidelines for
managing organizations database, communications, computer utilities and identify the
skills of I.S professionals.

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Tactical Plans include training and professional development strategies. IS


professional needs communications skills, business understanding and project
management skills.

Issues involved in organization and management issues in MIS planning process


are:
Strategic Issues:
1. How will Information processing be organized?
2. What will be the roles of user managers and IS professional?
3. What skills will user-managers need?
4. What skills will information processing professional’s need?
Tactical Issues:
1. What project management guidelines must be followed by user-managers in
accomplishing local projects?
2. What training and professionals development strategies are needed?

The changing role of Chief Information Officer (CIO):

Centralized IS activities Distributed IS activities

1. Strategic planning for IS's 1. Selection and approval of


Application software
2 2. Technology planning 2. Operation of office systems
3. Management of voice and data 3. Selection and operation of.
Communications personal computers.
4. Establishing standards for mainframes 4. Planning what applications
and minicomputers system to develop
5. Providing end-user support 5. Establishing budgets and project plans.

Fig: - distribution of information system activities