Chapter 3
Solving Problems
The Strategic
Management of
Information
Technology
Systems Approach
Input Output Process
Feedback and Control
Systems
Input Output Process
Control
Goal
Feedback
Strategic Leverage
Paradigm
Competitive
Position
Competitive
Position
Nature of Conflict;
Terms of
Competition
Strategic
Leverage
Objectives
Strategies
Tactics
Change
the
Game
Change
the
Game
Systems Development
Lifecycle
Planning
Support
Implementation Design
Analysis
Obsolete Solution Problem to be Solved
Problem
Understanding
and
Solution
Requirements
Acceptable
Solution
Statement
Implemented
Solution
Implementation
Error (bug)
New,Related Problem or Requirement
New implementation Alternative or Requirement
Systems Planning Elements
? People
– Users,Management,Information Specialists
? Data
– How it is captured,used,and stored
? Activities
– Automated and Manual
– Business and Information Applications
? Networks
– Where data is stored and processed
– How data is exchanged between different locations
? Technology
– hardware and software used
Information System
Building Block
Systems
Builders
Systems
Designers
Systems
Users
Systems
Owners
Differentiation versus Cost Leadership
T1
Sustainable
Premium
Quality
Cost
Minimum or
Market-Required
Quality
Differentiated
Player
Cost
Leader
Technology
Curve
Is Cost Leadership Sustainable?
T1
Sustainable
Premium
Quality
Cost
Minimum or
Market-Required
Quality
Differentiated
Player
Cost
Leader
Old
Technology
Curve
T2
New
Technology
Curve
Industry/Company
Relationships
Industry
Structure &
Competitive
Position
Long-term
Objectives,
Strategic
Direction
Detailed
Strategies
and Tactics
Freedom
of
Maneuver
Break-Even Point
Total Revenue
Profit
Total Costs
Fixed Costs
Sales Break-Even Volume
Revenue
and
Costs
Profit
Fixed
Costs
Decision Trees
Decision
Point
Probability
Efforts to Categorize
the Unknown
Complexity
Instability
Uncertainty
Barriers to Entry Sources
? Economies of Scale
? Economies of Scope
? Product Differentiation
? Capital Requirements
? Cost Disadvantages
– Independent of Size
? Distribution Channel Access
? Government Policy
Four Generic Approaches
Win
Win
Lose
Lose
Win/Win Win/Lose or
Cooperative Equilibrium
Lose/Lose Win/Lose or
Cooperative
Equilibrium
Lose/Lose
? Total Industry Profits are Very Low,Zero,
or Negative
? Industry Revenues are Declining,or,at best,
steady
? Product Technology is at or past its peak
Structure Defines the Industry War
Win/Win
? Total Industry Revenues and Profits are
Growing Rapidly
? Numerous Players of All Sizes
? Products and Services are not Standardized
Win/Lose
? Total Industry Revenues and/or Profits are
Constant or are Growing very Slowly
? Significant Economies of Scale in
Production,Distribution,and/or Promotion
? Number of Firms Participating in the
Industry is Limited and Stable
? Individual Participants have,or can obtain,
Information Regarding the Relative
Positions of the Players
Structure Defines the Terms
of Competition
? Wasting Resources
– generic advertising rather than focusing on
specific market segments
? Precipitating Unwanted Warfare
– Causing a full-scale price war when only brand
repositioning was necessary
? Failing to Anticipate and Adapt to Changes
– Following historical patterns
– Underspending on Advertising
Structure Defines Maneuver
? Standard or Dominant Product Emerges
? Distribution Channels Limit Firm’s Ability
to Determine which Channels to Select
? Target and Market Niches Become More
Difficult to Defend
? Substitutes Limit Price Increases which
Requires Increase in Advertising
Expenditure
Project Management
? Set of Principles,Methods,Tools,
Techniques
? For the Effective Management of Results-
Oriented Work
? Utilized in the Context of a Specific and
Unique Organizational Environment
Variables
Cost
Risk
Time
Goals
? Critical Path/PERT Charting
? Progress Presentation Reports
– Clients and Management
? Dependencies/Prerequisites/Linkages
? Variance Analysis
? Resource Assignments
MSProject Program Linkages
? Suite,Lotus/Microsoft/WordPerfect
– Spreadsheet
– Presentation
– word processing
– Database
– Notes
– Flowcharting (AllClear or ABC)
– Risk Analysis Tool
Project Management Issues
? Learning Curve Requires Understandable
Training Program
? Drown in Data Entry
? Loose Perspective in Extent of Project
Captured
? Management Commitment
? Critical Mass
? Required Rollups
? Discipline in Monitoring/Using Plan
Project Management Terms
? Schedule From,
– Project Start Date
– Project Finish Date
? Duration Type,
– Resource Driven
– Fixed Duration
? Constrain Task
– Date
Project Management Terms
? Priority
– High
– Medium
– Low
? Risk
– High
– Medium
– Low
Project Management Terms
? Relationship with Predecessor,
– Finish-to-Start (FS)
– Start-to-Start (SS)
– Finish-to-Finish (FF)
– Start-to-Finish (SF)
Project Management Terms
? Tasks,
– Noncritical
– Critical
– Milestone
– Summary
– Project Summary
MIS Risks
? Creeping User Requirements 80%
? Excessive Schedule Pressure 65%
? Low Quality 60%
? Cost Overruns 55%
? Inadequate Configuration Controls 50%
Systems Software Risks
? Long Schedule 70%
? Inadequate Cost Estimating 65%
? Excessive Paper Work 60%
? Error-prone Modules 50%
? Canceled Projects 35%
Commercial Software Risks
? Inadequate User Documentation 70%
? Low User Satisfaction 55%
? Excessive Time to Market 50%
? Harmful Competitive Actions 45%
? Litigation Expenses 30%
Military Software Risks
? Excessive Paperwork 90%
? Low Productivity 85%
? Long Schedules 75%
? Creeping User Requirements 70%
? Unused or Unusable Software 45%
Contract or Outsourced Risks
? High Maintenance Costs 60%
? Friction between Contractor and Client 50%
? Creeping User Requirements 45%
? Unanticipated Acceptance Criteria 30%
? Legal Ownership of Software 20%
End-User Software Risks
? Non-Transferable Applications 80%
? Hidden Errors 65%
? Unmaintainable Software 60%
? Redundant Applications 50%
? Legal Ownership of Software 20%
– Deliverables
Risk Prevention and Control
? Creeping User Requirements
? Schedule Pressure,Long Schedules,and
Excessive Time to Market
? Cost Overruns
? Low Quality and Error-Prone Modules
? High Maintenance Costs
Risk Factors Resistant to
Control
? Excessive Paperwork
? Inadequate User Documentation
? Low User Satisfaction
? Friction Between Clients and Contractors
? Legal Issues and Litigation Expense
Serious Software Risks
? Inadequate Metrics
? Inadequate Measurement
? Excessive Schedule Pressure
? Management Malpractice
? Inaccurate Cost Estimating
? Silver Bullet Syndrome
? Creeping User Requirements
? Low Quality
? Low Productivity
? Canceled Projects
Risk Factors to Define
? Definition
? Severity
? Frequency
? Occurrence
? Susceptibility and Resistance
? Root Causes
? Associated Problems
Risk Factors to Define
? Cost Impact
? Methods of Prevention
? Methods of Control
? Product Support
? Consulting Support
? Education Support
? Publication Support
Risk Factors to Define
? Periodical Support
? Standards Support
Solving Problems
The Strategic
Management of
Information
Technology
Systems Approach
Input Output Process
Feedback and Control
Systems
Input Output Process
Control
Goal
Feedback
Strategic Leverage
Paradigm
Competitive
Position
Competitive
Position
Nature of Conflict;
Terms of
Competition
Strategic
Leverage
Objectives
Strategies
Tactics
Change
the
Game
Change
the
Game
Systems Development
Lifecycle
Planning
Support
Implementation Design
Analysis
Obsolete Solution Problem to be Solved
Problem
Understanding
and
Solution
Requirements
Acceptable
Solution
Statement
Implemented
Solution
Implementation
Error (bug)
New,Related Problem or Requirement
New implementation Alternative or Requirement
Systems Planning Elements
? People
– Users,Management,Information Specialists
? Data
– How it is captured,used,and stored
? Activities
– Automated and Manual
– Business and Information Applications
? Networks
– Where data is stored and processed
– How data is exchanged between different locations
? Technology
– hardware and software used
Information System
Building Block
Systems
Builders
Systems
Designers
Systems
Users
Systems
Owners
Differentiation versus Cost Leadership
T1
Sustainable
Premium
Quality
Cost
Minimum or
Market-Required
Quality
Differentiated
Player
Cost
Leader
Technology
Curve
Is Cost Leadership Sustainable?
T1
Sustainable
Premium
Quality
Cost
Minimum or
Market-Required
Quality
Differentiated
Player
Cost
Leader
Old
Technology
Curve
T2
New
Technology
Curve
Industry/Company
Relationships
Industry
Structure &
Competitive
Position
Long-term
Objectives,
Strategic
Direction
Detailed
Strategies
and Tactics
Freedom
of
Maneuver
Break-Even Point
Total Revenue
Profit
Total Costs
Fixed Costs
Sales Break-Even Volume
Revenue
and
Costs
Profit
Fixed
Costs
Decision Trees
Decision
Point
Probability
Efforts to Categorize
the Unknown
Complexity
Instability
Uncertainty
Barriers to Entry Sources
? Economies of Scale
? Economies of Scope
? Product Differentiation
? Capital Requirements
? Cost Disadvantages
– Independent of Size
? Distribution Channel Access
? Government Policy
Four Generic Approaches
Win
Win
Lose
Lose
Win/Win Win/Lose or
Cooperative Equilibrium
Lose/Lose Win/Lose or
Cooperative
Equilibrium
Lose/Lose
? Total Industry Profits are Very Low,Zero,
or Negative
? Industry Revenues are Declining,or,at best,
steady
? Product Technology is at or past its peak
Structure Defines the Industry War
Win/Win
? Total Industry Revenues and Profits are
Growing Rapidly
? Numerous Players of All Sizes
? Products and Services are not Standardized
Win/Lose
? Total Industry Revenues and/or Profits are
Constant or are Growing very Slowly
? Significant Economies of Scale in
Production,Distribution,and/or Promotion
? Number of Firms Participating in the
Industry is Limited and Stable
? Individual Participants have,or can obtain,
Information Regarding the Relative
Positions of the Players
Structure Defines the Terms
of Competition
? Wasting Resources
– generic advertising rather than focusing on
specific market segments
? Precipitating Unwanted Warfare
– Causing a full-scale price war when only brand
repositioning was necessary
? Failing to Anticipate and Adapt to Changes
– Following historical patterns
– Underspending on Advertising
Structure Defines Maneuver
? Standard or Dominant Product Emerges
? Distribution Channels Limit Firm’s Ability
to Determine which Channels to Select
? Target and Market Niches Become More
Difficult to Defend
? Substitutes Limit Price Increases which
Requires Increase in Advertising
Expenditure
Project Management
? Set of Principles,Methods,Tools,
Techniques
? For the Effective Management of Results-
Oriented Work
? Utilized in the Context of a Specific and
Unique Organizational Environment
Variables
Cost
Risk
Time
Goals
? Critical Path/PERT Charting
? Progress Presentation Reports
– Clients and Management
? Dependencies/Prerequisites/Linkages
? Variance Analysis
? Resource Assignments
MSProject Program Linkages
? Suite,Lotus/Microsoft/WordPerfect
– Spreadsheet
– Presentation
– word processing
– Database
– Notes
– Flowcharting (AllClear or ABC)
– Risk Analysis Tool
Project Management Issues
? Learning Curve Requires Understandable
Training Program
? Drown in Data Entry
? Loose Perspective in Extent of Project
Captured
? Management Commitment
? Critical Mass
? Required Rollups
? Discipline in Monitoring/Using Plan
Project Management Terms
? Schedule From,
– Project Start Date
– Project Finish Date
? Duration Type,
– Resource Driven
– Fixed Duration
? Constrain Task
– Date
Project Management Terms
? Priority
– High
– Medium
– Low
? Risk
– High
– Medium
– Low
Project Management Terms
? Relationship with Predecessor,
– Finish-to-Start (FS)
– Start-to-Start (SS)
– Finish-to-Finish (FF)
– Start-to-Finish (SF)
Project Management Terms
? Tasks,
– Noncritical
– Critical
– Milestone
– Summary
– Project Summary
MIS Risks
? Creeping User Requirements 80%
? Excessive Schedule Pressure 65%
? Low Quality 60%
? Cost Overruns 55%
? Inadequate Configuration Controls 50%
Systems Software Risks
? Long Schedule 70%
? Inadequate Cost Estimating 65%
? Excessive Paper Work 60%
? Error-prone Modules 50%
? Canceled Projects 35%
Commercial Software Risks
? Inadequate User Documentation 70%
? Low User Satisfaction 55%
? Excessive Time to Market 50%
? Harmful Competitive Actions 45%
? Litigation Expenses 30%
Military Software Risks
? Excessive Paperwork 90%
? Low Productivity 85%
? Long Schedules 75%
? Creeping User Requirements 70%
? Unused or Unusable Software 45%
Contract or Outsourced Risks
? High Maintenance Costs 60%
? Friction between Contractor and Client 50%
? Creeping User Requirements 45%
? Unanticipated Acceptance Criteria 30%
? Legal Ownership of Software 20%
End-User Software Risks
? Non-Transferable Applications 80%
? Hidden Errors 65%
? Unmaintainable Software 60%
? Redundant Applications 50%
? Legal Ownership of Software 20%
– Deliverables
Risk Prevention and Control
? Creeping User Requirements
? Schedule Pressure,Long Schedules,and
Excessive Time to Market
? Cost Overruns
? Low Quality and Error-Prone Modules
? High Maintenance Costs
Risk Factors Resistant to
Control
? Excessive Paperwork
? Inadequate User Documentation
? Low User Satisfaction
? Friction Between Clients and Contractors
? Legal Issues and Litigation Expense
Serious Software Risks
? Inadequate Metrics
? Inadequate Measurement
? Excessive Schedule Pressure
? Management Malpractice
? Inaccurate Cost Estimating
? Silver Bullet Syndrome
? Creeping User Requirements
? Low Quality
? Low Productivity
? Canceled Projects
Risk Factors to Define
? Definition
? Severity
? Frequency
? Occurrence
? Susceptibility and Resistance
? Root Causes
? Associated Problems
Risk Factors to Define
? Cost Impact
? Methods of Prevention
? Methods of Control
? Product Support
? Consulting Support
? Education Support
? Publication Support
Risk Factors to Define
? Periodical Support
? Standards Support
