Information system Planning

Planning

Planning is the most challenges task faced by management. In organizational planning we decide what goal they want to achieve, deciding what action to take to achieve that goal, team building etc.

The result of this planning process is what we call plan. Thus plan is a action statement, plan leads to action produce result. E.g. Strategic planning

Strategic planning: it deals with the development of an organization’s goals, strategies and policies.

Example of strategic questions in planning.

Understanding the customers

Who are our customers?Who should be our target customers?

Customers value How can we become customer's first choice?How can we add value for the customer with e-business services?

Competitions Who are our real competitors?What are they doing in e-business?

To design information system planning first to create a steering committee composed of key mangers representing major functional units within the organization. The function of steering committee are as follows.

To educate members of the committee on the strength and weakness, opportunities and threats of use of IT.

To communicate the status and plans for the use of IT within the organization among the members of the committee and their respective functional units.

To allocate available resources, setting priorities as needed.

To evaluate overall performance and success of the IS in operation under development.

Problem of IS Planning

Aligning the IS plan with the overall strategic and objectives of Aligning the IS plan with the overall strategic and objectives of the organization.the organization.

Designing an information system architecture for the organization Designing an information system architecture for the organization in such a way that various database can be integrated.in such a way that various database can be integrated.

Completing information system projects on time and according to Completing information system projects on time and according to budget.budget.

Design of information system architecture

Information system architecture refers to overall structure of all the information Information system architecture refers to overall structure of all the information system in organization.system in organization.

The information architecture also includes database and supporting software.The information architecture also includes database and supporting software.

An information system architecture for organization should guide long range An information system architecture for organization should guide long range development as well as short range information system demand.development as well as short range information system demand.

Failure for architectural planning problem faced by most banks today. in bank Failure for architectural planning problem faced by most banks today. in bank various system saving, housing loans, car loans, FD are usually not integrated. various system saving, housing loans, car loans, FD are usually not integrated. Consequently these various system treat one customer with several accounts as Consequently these various system treat one customer with several accounts as several different customers instead of one customer with several relationship.several different customers instead of one customer with several relationship.

Allocation of development resources. Completion of project on time and according to budget :

Few information system projects are completed on time or within budget. Project plan are not accurate, time and resources are generally underestimated.

Under pressure to finish a project on time or within the budget, certain promise features are allowed to slip. This reduction in system quality frequently leads to user dissatisfaction.

Basic four stage model for IS Planning

Strategic PlanningStrategic Planning Organizational information requirement analysis.Organizational information requirement analysis. Resource allocationResource allocation Project PlanningProject Planning

1

2

3

4

5

Develop underlying organizational subsystem

Develop subsystem matrix

Define and evaluate information requirements for organizational subsystem

Define major information categories and map interviews

Develop information / subsystem matrix

Planning model for organizational information requirements analysis

Strategic Planning

Strategic planning is the first stage of the IS planning model.Strategic planning is the first stage of the IS planning model. It establish the relationship between the overall organizational plan and IS plan.It establish the relationship between the overall organizational plan and IS plan. To accomplish this, organization must do the following.

Set IS mission.Asses the environment.- current IS capabilities, New opportunities, current business environment, new technology, stage of IS maturity.Assess organizational objectives and strategies- review strategic organization plan, identify major claimant group and their objectives.

Set IS policies, objectives and strategies- organization structure, resources allocation mechanism, management processes.

The following methodologies are very useful for IS planning.Competitive strategy, customer resource life cycle, BSP, CRF

Competitive strategy

Competitive strategy identifies five major competitive forces faced by all organizations.

1. The competitors within its industry.2. The threat of new entrants in markets.3. Threat by substitute products which might capture the market share.4. The bargaining power of customers.

Following are approaches that an organization may use to formulate competitive strategy.

Be a low cost supplier- IT can be very useful by reducing clerical & inventory cost.

Differentiate products or services: e.g. pharmacy can keep records for customers on all tax deductible purchase and supply that information to customer for use in preparing tax.

Following questions can be used to generate strategic ideas for use of Information system.

Can IS be used to provide a unique product or service? E.g. retailer can use gift suggestion system. The customer enter the detail of gift recipient such as age, sex, hobbies and place of residence. The gift giver also indicate an acceptable price range. Based on market research and store availably the system give the customer a list of suggestions and their location in the store.

Can a more customized products or service be provided?E.g. JCPenny use IS to order customize men’s suits. System linked JCPenny, distributors, garment makers and textile mills allow customer to select fabric, size at JCPenny store and get a custom made suit in week.

Customer Resource Life cycle

CRLC focus directly on the relationship with the customer. The idea behind CRLC is that an organization differentiate itself from its competitors in the eyes of customers.

Establish Customer requirements.Fiberglass use data on energy efficiency to help builders evaluate insulation requirements for new building design. evaluation meeting minimum standard of energy efficiency are provided free of charge to builders.

Pace an order.Distributors such as GE, Arrow electronics have established round the clock order entry system that accept a customer entered order without human intervention.

Gas station are using debit card network that immediately debit customer bank account for purchase made with card. Also providing discount on per-gallon on cash purchase.

Accounting for purchase.Many retail pharmacies providing detail accounting of their customer drug purchase for income tax purpose.

Organizational Information Requirement Analysis

Second stage for IS planning is organizational information Second stage for IS planning is organizational information requirements analysis ( OIRA).requirements analysis ( OIRA).

OIRA is a higher level of information requirement analysis , OIRA is a higher level of information requirement analysis , aimed at developing an overall information architecture for the aimed at developing an overall information architecture for the organization.organization.

It ensure that various IS and database can be integrated to support It ensure that various IS and database can be integrated to support decision making and operation of the organization.decision making and operation of the organization.

The first phase of ORIA consists of assessing current and The first phase of ORIA consists of assessing current and projected information needs to support decision making and projected information needs to support decision making and operation of the organization.operation of the organization.

Second phase of OIRA consists of assembling a master Second phase of OIRA consists of assembling a master development plan. This plan is derived from information development plan. This plan is derived from information architecture and defines specific information system projects, the architecture and defines specific information system projects, the development schedule.development schedule.

Objective of OIRA is avoid nonintegrated system.Objective of OIRA is avoid nonintegrated system.

Building an OIRA

Planning model for organizational information requirements Planning model for organizational information requirements analysis involve five steps :analysis involve five steps :

1. 1. Define Underlying organizational subsystem.Define Underlying organizational subsystem.

2. 2. Develop subsystem matrix.Develop subsystem matrix.

3. 3. Define and evaluate information requirements for Define and evaluate information requirements for organizational subsystem.organizational subsystem.

4. 4. Define major information categories and map interviews into Define major information categories and map interviews into them.them.

5. 5. Develop Information / subsystem matrix.Develop Information / subsystem matrix.

Define underlying organizational subsystem

First step of an OIRA is to define underlying organizational First step of an OIRA is to define underlying organizational processes.processes.

Organizational processes is the fundamental organizational Organizational processes is the fundamental organizational activity necessary for the operation of the organization. e.g activity necessary for the operation of the organization. e.g of major processes :of major processes :

Inventory, Marketing, Advertisements, Sales etc.Inventory, Marketing, Advertisements, Sales etc.

E.g. For real estate company these are major processes:E.g. For real estate company these are major processes:

Leasing, Maintenance, Account receivable, credit, Inspection, Leasing, Maintenance, Account receivable, credit, Inspection, Inventory, Marketing, advertising, insurance, sales, audit, Inventory, Marketing, advertising, insurance, sales, audit, appraisal, legal etc.appraisal, legal etc.

Develop subsystem matrix

Next phase of the OIRA planning exercise is to relate specific Next phase of the OIRA planning exercise is to relate specific managers to organizational process.managers to organizational process.

Matrix is developed by reviewing the major decision responsibilities Matrix is developed by reviewing the major decision responsibilities of each middle to top managers and relate them to specific process. e.gof each middle to top managers and relate them to specific process. e.g

Organizational Processes

Manager 1 Manager 2 Manager 3

Inventory x

Marketing x X x

Sales x x

Matrix indicate that managers who have major decision making Matrix indicate that managers who have major decision making responsibility for each specific process.responsibility for each specific process.

Define & evaluate information requirements for organizational subsystem

In this phase of the planning model, managers with major In this phase of the planning model, managers with major decision making responsibility for each process are interviewed decision making responsibility for each process are interviewed in groups in order to obtain information requirements of each in groups in order to obtain information requirements of each organizational process.organizational process.

Interviews used for OIRA and system design can be Business Interviews used for OIRA and system design can be Business system planning , critical success factors, etc.system planning , critical success factors, etc.

Define Major information categories and map interviews into them.

The process of categorizing information categories is done in the The process of categorizing information categories is done in the same way that the data dictionary for information system was same way that the data dictionary for information system was factored into entities and attributes.factored into entities and attributes.

The difference is that task is much larger when you are doing an The difference is that task is much larger when you are doing an organizational wise entity-attribute-analysis.organizational wise entity-attribute-analysis.

Broad categories of information that can be identified as entities ( Broad categories of information that can be identified as entities ( customer, contracts, vendors) and attributes ( name, address, customer, contracts, vendors) and attributes ( name, address, phone number) are categorized within their respective entities.phone number) are categorized within their respective entities.

Develop Information / sub system matrix

By mapping information categories against organizational subsystem, By mapping information categories against organizational subsystem, an information-categories-by-organizational process matrix can be an information-categories-by-organizational process matrix can be developed.developed.

During the interview managers are asked about both the importance During the interview managers are asked about both the importance and the current availability of different type of information, response and the current availability of different type of information, response for both importance and availability are recoded as high, medium or for both importance and availability are recoded as high, medium or low.low.

LowLow Medium High Medium High

ImportanceImportance 11 22 3 3

AvailabilityAvailability 33 22 1 1

Sore is computed for each category of information:Sore is computed for each category of information: Sore= Importance * Availability Sore= Importance * Availability

Information categories with highest importance and lowest Information categories with highest importance and lowest availability getting the highest score ( S= 3*3=9)availability getting the highest score ( S= 3*3=9)

Information that is least important and readily available get the Information that is least important and readily available get the lowest score ( S= 1*1=1) lowest score ( S= 1*1=1)

Organizational Processes

Information Categories

Maintenance Warranty Contract Complaint Policy training

Marketing 9 9

Advertising 2

Sales 9 2 9 9

Inventory 6 3 6 6

Insurance 3 6 9

USE of OIRA planning result

Identifying high payoff: by evaluating composite score for information categories, you can select those categories with the highest score to consider first in feasibility study.

Feasibility study determine that :Feasibility study determine that :

Whether the proposed system was good investment.Whether the proposed system was good investment.

Whether technology needed for the system was available and Whether technology needed for the system was available and could be handled by firm information system specialists .could be handled by firm information system specialists .

Whether the organization could handle the change introduced by Whether the organization could handle the change introduced by the system.the system.

Information system planning

summary

Planning

For planning IS first to create steering committee of key managers representing major functional units within the organization.

( Role of IT person start after planning, analysis and design of system when design is converted into programming. At stage of planning Managers are required, for Analysis & design System analyst are required but at each stage supported by Manager IT.)

Model for IS Planning

Strategic Planning Organizational information requirement analysis. Resource allocation Project Planning

Strategic planning:

First stage of Is planning. In this stage establish relationship between organizational plan and IS plan.

E.g. current Is capabilities, New technology, resource allocation etc.

Organizational Information requirement analysis ( OIRA):-

Second phase of IS planning. In this phase develop an overall information architecture for the organization.

IS and database can be integrated to support decision making and operation of organization.

Building an OIRA

Define organizational subsystem.First step to define organizational processes.

E.g. LG India Limited processes are:

MarketingFinanceHRITQuality ControlProduction

Develop sub system matrix.Relate specific manager to organizational processes.

Processes Manager1(Mr. Amit)

Manager2(Mr. Sumit)

Manager3(Mr.Gupta)

Manager4(Mr.Xyz)

HR X

Finance X X

QC X

Production X X

Inventory X X

Marketing X

IT X

Define and evaluate information requirement for organizational sub system.

In this phase manager with major decision making responsibility for each process are interviewed to obtain information.Methodologies for interview are BSP, CRF etc.

Result- Manager1 ( Mr. Amit)- HR, Marketing, IT Manager2 ( Mr. Sumit)- Finance Manager3 (Mr. Gupta)- Production , inventory Manager4 (Mr.xyz)- Finance, QC, production, inventory

Interviewed manager are:

Manager 1 and Manager 4

Define major information categories and map interviewed into them :

Manager1 and Manager 4 are interviewed for organizational process and further information categories for each processes.

E.g. Marketing ( Processes)

Information categories of marketing are:

distribution, warrant, maintenance, complaint, vendors etc.

Processes

Distribution

Warranty Maintenance Complaint Vendors Contract

Mark.

HR

IT

Finance

QC

Inventory

Production

Information categories

Develop information sub system matrix.

In this phase develop information categories against organizational processes.

During interviewed manager are asked about both important and current viability of different type of information.

Response from both are recorded as High, Medium and Low.

Low Medium HighImportant 1 2 3Availability 3 2 1

Score= Imp * Availability.

Information which is highly important and low available get score ( S= 3*3=9)

Information that is least important and highly available get score ( S= 1*1=1).

From above result select first those categories with highest score because information that is important but available low s=3*3=9

So first we have to design system for above problem

Processes

Distribution

Warranty Maintenance Complaint Vendors Contract

Mark.

HR 9

IT 2 2 9 6

Finance 9 6 9 9 3

QC 6 6 6 9 2

Inventory 3 6

Production 6 3

Information categories

Resource allocation

Resource allocation is the third stage of the model for information Resource allocation is the third stage of the model for information system planning, consists of developing the hardware, software, system planning, consists of developing the hardware, software, data communication , facilities, financials plans needed to execute data communication , facilities, financials plans needed to execute the master development plan defined in OIRA.the master development plan defined in OIRA.

This stage provide framework for technology , personnel training, This stage provide framework for technology , personnel training, budgeting to provide appropriate level to users.budgeting to provide appropriate level to users.

Project Planning

Fourth and final stage of model is project planning provide an Fourth and final stage of model is project planning provide an overall framework with which the system development life cycle overall framework with which the system development life cycle can be planned , scheduled and controlled.can be planned , scheduled and controlled.

Following Questions should be asked at each stage

Strategic Planning:

1. Are new opportunities identified?2. Is the current business environment understood?3.Are the objectives for allocating IS resources appropriate?4. Are the function capability objectives appropriate?5.Are the IS management process appropriate?

Organizational Information requirements analysis:1. IS the overall organizational information architecture identified?2. Is there a good understanding of current information needs of the organization?3. Is there a good understanding of projected information needs of the organization?4. are the major database and their relationship defined?5.Is there a master IS development plan

Resource allocation1. Is there a hardware plan?2. Is there a software plan?3. Is there a data communication plan?4. Is there a facilities plan?5. Is there a data management plan?

Project Planning.1. Are project task usually identified adequately?2. Are projects generally completed on schedule?3. Are checkpoints defined to monitor progress of the projects?4. Are project time estimate generally accurate?

Overview of System developmentOverview of System development

System analysisSystem analysis System DesignSystem Design ProgrammingProgramming TestingTesting ConversionConversion Production & MaintenanceProduction & Maintenance

System AnalysisSystem Analysis

System analysis is the analysis of the problem that the System analysis is the analysis of the problem that the organization will try to solve with information system.organization will try to solve with information system.

It consists of defining the problem, identifying its causes, It consists of defining the problem, identifying its causes, specifying the solutions, identifying the information specifying the solutions, identifying the information requirements that must be met by a system solution.requirements that must be met by a system solution.

System Analyst create a map of the existing organization and system, System Analyst create a map of the existing organization and system, identifying the primary users of data along with existing hardware & identifying the primary users of data along with existing hardware & software.software.

By examining the documents, procedure, interviewing key users of the By examining the documents, procedure, interviewing key users of the system, the analyst can identify the problem area & objective a system, the analyst can identify the problem area & objective a solution would achieve.solution would achieve.

The system analyst would include a feasibility study to determine The system analyst would include a feasibility study to determine whether that solution was feasible from financial , technical, and whether that solution was feasible from financial , technical, and organizational standpoint.organizational standpoint.

Feasibility study determine that :Feasibility study determine that :

Whether the proposed system was good investment.Whether the proposed system was good investment.

Whether technology needed for the system was available and could be handled by Whether technology needed for the system was available and could be handled by firm information system specialists .firm information system specialists .

Whether the organization could handle the change introduced by the system.Whether the organization could handle the change introduced by the system.

Information Requirements:Information Requirements:

Information requirement of a system involves identifying who need what Information requirement of a system involves identifying who need what information, where, when and how.information, where, when and how.

Requirements analysis define the objective of the system and develop a detailed Requirements analysis define the objective of the system and develop a detailed description of the functions that new system must perform.description of the functions that new system must perform.

Faulty requirements analysis is a leading cause of system failure and high Faulty requirements analysis is a leading cause of system failure and high system development costs.system development costs.

System DesignSystem Design

System design shows how the system will fulfill the objective.System design shows how the system will fulfill the objective. Design of information system is the overall plan or model for that Design of information system is the overall plan or model for that

system.system. System designer detail the system specification that will deli ever the System designer detail the system specification that will deli ever the

functions identified during system analysis.functions identified during system analysis.

ProgrammingProgramming

Programming stage , system specification that were prepared Programming stage , system specification that were prepared during the design stage are translated into software program during the design stage are translated into software program code.code.

In this many organization no longer do their programming for In this many organization no longer do their programming for new system, instead they purchase the software that meet the new system, instead they purchase the software that meet the requirements from external source or software service from an requirements from external source or software service from an application service providers etc.application service providers etc.

TestingTesting

Testing must be conducted to ascertain whether the system Testing must be conducted to ascertain whether the system produce the right result.produce the right result.

Testing is time consuming. Test data must be carefully Testing is time consuming. Test data must be carefully prepared, result reviewed and correction made in the system.prepared, result reviewed and correction made in the system.

Testing divided into three categories: Testing divided into three categories: Unit testingUnit testingSystem TestingSystem TestingAcceptance TestingAcceptance Testing

Unit Testing: It is also called program testin, It consists of testing each Unit Testing: It is also called program testin, It consists of testing each program separately in the system.program separately in the system.The purpose of this testing is that program are error free. Testing must be The purpose of this testing is that program are error free. Testing must be performed to find all the ways to make program fail.performed to find all the ways to make program fail.

System Testing: This testing test the functioning of the information system System Testing: This testing test the functioning of the information system as whole. It tries to determine that discrete modules will function together as whole. It tries to determine that discrete modules will function together as planned. Areas are performance time, capacity of file storage and as planned. Areas are performance time, capacity of file storage and handling, peak load, recovery etc. handling, peak load, recovery etc.

Acceptance testing: This testing provides the final certification that the Acceptance testing: This testing provides the final certification that the system is ready to be used.system is ready to be used.

Test are evaluated by users and reviewed by management when all Test are evaluated by users and reviewed by management when all parties are satisfied that the new system meets their standards, the parties are satisfied that the new system meets their standards, the system normally accepted for installation.system normally accepted for installation.

ConversionConversion

Conversion is the process of changing the old system to the Conversion is the process of changing the old system to the new system. Four conversion strategy are:new system. Four conversion strategy are:

Parallel StrategyParallel StrategyDirect cutover StrategyDirect cutover StrategyPilot Study StrategyPilot Study StrategyPhased Approach strategyPhased Approach strategy

Parallel StrategyParallel Strategy

In this strategy both the old system and its potential In this strategy both the old system and its potential replacement are run together for a time until everyone is replacement are run together for a time until everyone is assured that the new system function correctly.assured that the new system function correctly.

It is safest conversion approach because in case of errorthe old It is safest conversion approach because in case of errorthe old system can still be used as backup.system can still be used as backup.

This approach is expensive and additional staff or resource This approach is expensive and additional staff or resource required to run the extra systemrequired to run the extra system

Direct Cutover StrategyDirect Cutover Strategy

This strategy replace the old system entirely with the new This strategy replace the old system entirely with the new system.system.

It is very risky approach that can be potentially be more It is very risky approach that can be potentially be more costly than running two system in parallel if serious problem costly than running two system in parallel if serious problem with new system are found.with new system are found.

Pilot strategyPilot strategy

In this strategy new system introduced only to limited area In this strategy new system introduced only to limited area of the organization such as single department. When pilot of the organization such as single department. When pilot version is complete and working smoothly it is installed version is complete and working smoothly it is installed throughout the rest of organization simultaneously.throughout the rest of organization simultaneously.

Phased ApproachPhased Approach

This strategy introduce the new system in stage , either by function or This strategy introduce the new system in stage , either by function or organizational units.organizational units.

E.g. new Payroll system might began with hourly workers who are paid E.g. new Payroll system might began with hourly workers who are paid weekly followed six month later by adding salaried employees to the weekly followed six month later by adding salaried employees to the system.system.

If system introduced by organizational units, corporate headquarter might If system introduced by organizational units, corporate headquarter might be converted first, followed by operating units four months later.be converted first, followed by operating units four months later.

Production and maintenanceProduction and maintenance

When system installed and conversion complete then system said to be When system installed and conversion complete then system said to be production.production.

In this stage system is viewed by both users and technical specialist to In this stage system is viewed by both users and technical specialist to determine how well it met the original objective and decide whether determine how well it met the original objective and decide whether modification is required.modification is required.

When system fine-tuned, it must be maintained while it is production When system fine-tuned, it must be maintained while it is production to correct errors, meet requirements etc.to correct errors, meet requirements etc.