Management Issues in Systems Development. Chapter 10. Information Systems Management In Practice 6E McNurlin & Sprague

Management Issues in

Systems Development

Chapter 10

Information Systems Management

In Practice 6E

2

Introduction

This chapter discusses issues that IS management faces when developing systems:

• Staffing,

•

Successfully implementing systems (change management),

•

Ways to replace legacy systems, and

Introduction

Companies are in

Three Businesses

4

INTRODUCTION

Companies are in three businesses:

1.

Infrastructure management,

2.

Customer relationship,

Introduction

• IS organizations can be viewed as being in the same three businesses.

– Operations are infrastructure management.

– The help desk is the customer relationship business. – And system development is product innovation.

• Each should be viewed and managed differently.

• The goal of product innovation is speed because it provides nimbleness.

• The key to success is talent, so management issues surrounding system development begin with

6

MANAGING IS STAFF

•

Managing staff is complex.

– It begins with hiring,

– goes through training and coaching, and – continues on to performance appraisal, – assigning work,

– career planning, and

8

Managing IS Staff

Recruiting IS Staff

• The major issue in recruiting is finding people with the right skills and then providing the work culture and incentives that suit them.

• In general, skills are most lacking in the newest areas.

• Some employers are looking at employees in new ways, such as investors who invest their time where they get the highest market value for their talent.

• Another is to not expect long-term employment by all employees

10

Managing IS Staff

MANAGING IS STAFF

• Designing Motivating Work –

– Assigning the kind of work that motivates people may, in part, revolve around designing or redesigning jobs to fit jobholders.

• Gauging IT Staff –

– Knowing what motivates IT staff is important in designing jobs.

– In a long research study it was discovered that developers have a high need for personal growth and development in the job.

– They are internally motivated, so they have a low need to interact with others to feel they are doing a good job.

12

Managing IS Staff

¾

Improving the Maintenance Job

Improving the Maintenance Job

•

Developers have often disliked maintenance work.

•

Improving the job involves redesigning it to better fit their needs, and hence motivate them better.

14

Rethinking Maintenance Work

•

One research study found that maintenance work is not managed to its potential.

•

It is managed on a lowest-cost basis, when, in fact, many of the requests are not to fix a problem but to improve a process, save employee time, or make a job easier – process improvement.

Rethinking Maintenance Work

•

When it is managed from an organizational learning perspective, it leads to more organizational change and improvement, helping companies better keep pace with their changing environment.

•

It should therefore not be managed as an infrastructure business but as a product improvement business.

16

Implementing Systems Successfully

9

Sponsors – legitimize the

change

9

Change Agents – cause the

change to happen

9

Targets – are expected to

IMPLEMENTING SYSTEMS

SUCCESSFULLY

• IS staff members are often so enthralled with the technical aspects of a new system that they

presume a technically elegant system is a

successful system. However, many technically-sound systems have turned into implementation failures because the people side of the system was not handled correctly.

• Change management is the process of assisting people to make major changes in their working environment.

18

IMPLEMENTING SYSTEMS

SUCCESSFULLY

•

One approach to change management is to identify and work with

– sponsors,

– change agents, and

– targets

•

to implement the change a new system causes.

Improving Legacy Systems

20

IMPROVING LEGACY

SYSTEMS

• Most information systems executives feel trapped by the past.

• They have thousands of old legacy programs and data files they would love to replace.

• Replacement is not the only option, though, and in many cases it is not the wisest course of action.

To Replace or Not to Replace?

•

One study found that upgrading (rather than replacing) made more sense in most cases, even if it was difficult and not as exciting as a totally new system.

22

Improving Legacy Systems

1.

Restructure the System

If the system is running but fragile, restructure the code, using automated tools, to make

Improving Legacy Systems

2.

Reengineer the System

24

•

Extract the data elements from the existing file and the business logic from the existing program and

•

Move them to new hardware platforms, using automated tools.

Improving Legacy Systems

3.

Refurbish the System

26

3. Refurbish the System

•

Old but maintainable systems that are causing no major problems may just need some extensions to be more useful.

•

Companies are leaving existing systems in place but adding an Internet front end.

4. Rejuvenate the System

•

Rejuvenating adds enough new functions to a system to make it more valuable to the firm.

28

5. Rearchitect the System

•

This option involves having a to-be architecture for new systems, then using that architecture to upgrade legacy systems.

Improving Legacy Systems

6.

Replace With a Package

or Service

30

6. Replace With a Package or

Service

•

Many old systems built in-house have been replaced by a package developed by a third party.

•

This alternative has become the norm; another option, one being touted as “the future,” is to replace a system with a service delivered over the Internet.

7. Rewrite the System

• In some cases, a legacy system is too far gone to rescue.

• Few companies write new applications from scratch, though, since it is so time-consuming and expensive;

• rewriting now means system integration — finding packages that do pieces of the work, then using middleware tools to link them together.

32

Measuring the Benefits of Systems

1. Distinguish Between the Different Roles of Systems

2. Measure What Is Important to Management

3. Assess Investments Across Organizational Levels

MEASURING THE

BENEFITS OF SYSTEMS

•

Executives want specific links between new systems and corporate financial measures, such as increased revenue, stockholder

value, or earnings.

•

Achieving this link is difficult because IT is only one of the factors contributing to

successful use of systems.

34

Distinguish Between the

Different Roles of Systems

• To measure the value of systems that help other departments do their job better, measure how they improve organizational efficiency.

• For systems that carry out a business strategy,

measure them by their contribution to the success or failure of that plan.

• And for systems that are sold as a product or

service, measure them by their performance in the market.

Measure What Is Important to

Management

•

Besides financial benefits,

•

relating proposed benefits to certain indicators can make it easier to “sell” the system to management,

•

at both the individual and aggregate levels.

•

Concentrating only on cost and monetary measures may be shortsighted; other measures can be even more important.

36

Assess Investments Across

Organizational Levels

•

The Value Assessment Framework

measures benefits at three organizational levels: individual, division, and corporation

•

and across three kinds of impacts: economic performance payoffs, organizational process impacts, and technology impacts.

Measuring the Benefits of Systems

Do Investors Value

IT Investments?

38

Do Investors Value IT

Investments?

• An even more intriguing question than how business executives value IT investments is how investors value IT investments.

• A study found that :

• $1 invested in computers yielded up to $17 in stock market value – and no less than $5.

• $1 invested in property, plant, and equipment (book value) only yielded $1 in stock market value

• $1 investment in other assets (inventory, liquid assts, and accounts receivables) yielded only 70 cents.

• The researchers reason that investors value $1 spent on computers more than the other investments because it leads to organizational changes that create $16 worth of “intangible assets” – know-how, skills, organizational structures, and such.

• Investments in “organizational capital” generally lead to adopting decentralized work practices:

• Using teams more often,

• Giving employees broader decision-making authority, and

• Offering more employee training.

• Firms with these three decentralized work practices had a market value of 8 percent higher than the mean.

Conclusion

Four Issues in Managing

System Development

40

• Managing development staff well is a major part of the job of managing system development.

• Helping end users adjust to the organizational changes that occur with a new system is a second issue.

• Most software is difficult to keep up to date. As a result, at some point in time, management needs to decide what to do with aging software.

• Finally, the question continually asked about applications is, “What is it worth to us?” — another difficult system development issue.