IT Infrastructure and Suport Systems

Information Systems Management - IS433

Semester 1, 2015

Lecture 22

IT Infrastructure and Support Systems

IS433 Information Management

Lecture 2 - Outline3

Information Management for High Performance

Information deficiencies

IT Architecture

Data, Information and Knowledge

Types of Information Systems and Support

Supply Chain and Logistics Support

IT Infrastructures, Cloud Computing, and Services


Learning Objectives4

Understand the types of information systems and

how they process data.

Understand the types of information systems used to support business operations and decision makers.

Describe how IT supports supply chains and business processes.

Understand the attributes, benefits, and risks of service-based and cloud computing infrastructures.


Information Management


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What is Information Management?

Deals with how information is stored and organised; and the speed in which it is captured, analysed, and reported.

E.g. Mashups

Consumer mashup are applications that collect and combine data multiple public sources and then organise them through browser-user interface.

http://www.housingmaps.com/

What is the Goal of Information Management?

Focuses on design and implementation of a well-planned out IT architecture, policies and procedures required to effectively and efficiently support the information and decision needs of the organisation and decision needs of an organisation.

http://www.housingmaps.com/

Information Deficiencies


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Information Deficiencies


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Contributing factors


8 Data Silos

Data trapped in departments and are not accessible by other ISs and cannot consistently be updated. Data quality becomes an issue cannot (should not) be trusted without extensive verification. Supports single function do not support organisations cross functional needs. E.g. health care

Lost or bypassed Data get lost in transit from one IS to another

User-fierce format Horrible user interface which are not user friendly at all Poorly designed interfaces requires extra time to figure increase the risk of errors from

misunderstanding the data or ignoring it.

Non-standardised data formats Data formats not displayed in a uniform way or standardised way.

Gross sales revenue per product line vs net sales revenue per product line

Moving Targets Information that decision makers want keeps changing and changes faster than IS can

respond to due to the four reasons above.

Factors that drive towards collaboration


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Research firm Forrestor.com reported three factors driving trend toward collaboration and information sharing technology:

1. Global Mobile Workforce

2. Mobile driven consumerisation growing number of cloud based collaboration solutions that makes it easier to collaborate and share from anywhere

3. Principle of any

Benefits of Information management


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Improves decision making

Access to more comprehensive set of information

Improves prediction

New opportunities or challenges

Reduce Risk

Improve Compliance with regulations and polices through improved information quality and governance

Reduced cost

Reduce the number of repositories and time spent locating and integrating information

IT Infrastructure


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IT Architecture Road map or blueprint that guides the build out of IT

capabilities, acquisition of networks, cloud services, ISs, software, and hardware

Defines the vision, standards, roadmap that guide the priorities, operations, and management of the ITs supporting the business

The blueprint must be designed with the following goals in mind:

Business productivity and cost reduction

IT and business alignment

Business agility and speed to market

Business process re-engineering (BPR)

IT reliability and efficiency

IT Infrastructure


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Components of IT Architecture

1 Business Architecture The processes the business uses to meet its goal

2 Application Architecture How specific applications are designed and how they interact with each other

3 Data Architecture How an enterprises data stores are organised and accessed

4 Technical Architecture The hardware and software infrastructurethat supports applications and their interactions

Uses and Benefits of IT Architecture13

Maintain a close alignment between IT deliverables and business requirements

Improve ability to respond quickly to business changes

Develop closer partnership between business and IT groups

Reduce complexity of existing ISs

Improve agility of new IT systems

Ensure that legal and regulatory requirements are being met


IT Architecture


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Business

Architecture

Technology

Architecture

Data

Architecture

Application

Architecture

Business

Strategy

Business

Results

IT Architecture (Plan to maintain IT-Business alignment)


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Defines the following:

Organisations mission, business functions, and future directions

Information and information flows needed to perform the mission

Processes for implementing new Its in response to business changes

The current baseline architecture

The desired target architecture (future)

The sequencing plan, which consist of short and long term strategies for managing the change from baseline to target architecture

IT Architecture


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Information Systems & IT Infrastructure17

Data, Information, and Knowledge Data: raw data

Database: stores data in such a way that it can be accessed, searched, retrieved, and/or updated

Information: data thats been processed, organized, or put into context.

Knowledge: data or information that have been processed to convey understanding, experience, accumulated learning, and expertise as they apply to a current problem or activity.


Data, Information, and Knowledge


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Figure 2.1 Diagram showing the relationships among information systems.Various types of ISs and applications support managers, workers, work flows, business processes, and

transactions with supply chain partners.

Information Systems & IT Infrastructure20

Data and Software Application Concepts

Organizations have different types of information systems that collect and process data, distribute reports, and support decision making and business processes.

Starting with transactions that take place at an interface (e.g., withdrawing cash from an ATM), a transaction processing system(TPS) processes the data as follows:

verifies available funds

subtracts withdrawn amount updating the data in the database

TPS are critical systems

Transactions that do not get captured can result in lost sales, dissatisfied customers, and any other data errors with financial impact.


Data and Software Application Concepts


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Organizations have different types of information systems that collect and process data, distribute reports, and support decision making and business processes. HR (HRSS)

Sick Leave

Pay Slip

Performance

Finance (Navision)

P & L

Sales & Marketing (Gentrack)

Sales

Billing

Data and Software Application Concepts22

Data captured by a TPS system are processed and stored in a database, and then made is available for use by other systems.

Transactions are processed in two ways:

1. Batch processing TPS in batch processing mode collects all transaction for a day, shift, or other time period, and then process the data and updates the data stores: e.g. payroll processing done weekly or fortnightly

2. Online transaction processing or real time processing


Management Information Systems23

MIS are referred to as general purpose reporting systems

Objective is to provide report to managers for tracking, operations, monitoring, and control.

Data are extracted from the database and organized into reports using management information systems (MIS).



Decision support systems (DSS).

Are interactive applications that support decision making

Support unstructured and semi-structured decisions such as whether to make or buy products, or what new products to develop and introduce into existing markets.

Structure decision determine whether an applicant has qualified for a loan

Unstructured decision depend on human intelligence, knowledge and/or experience.



Three Defining DSS Characteristics

An easy to use interactive interface

Models or formula that enable sensitivity analysis, what if analysis, goal seeking, and risk analysis.

Data from multiple sources-internal and external sources plus data added by the decision maker who may have insights relevant to the decision situation.


Types of Information Systems and Support


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ISs classified into 2 categories based on type of support: management or operations

Operations support systemTransaction Processing Systems (TPS)


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Data is processed by a TPSe.g., sales orders, payroll, accounting, financial, marketing, purchasing, inventory control

Transactions are either:

Internal transactions: occur or originate from within the organization; e.g., payroll, purchases, budget transfers, & payments.

External transactions: originate from outside the organization; e.g., from customers, suppliers, regulators, distributors, and financing institutions.

TABLE 2.1 Business Transactions in a Manufacturing Company


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Payroll and personnel Employee time cards Employee pay and deductionsFinance and accounting Financial statements Accounts receivable / Accounts payableSales Invoices and billings Sales returnsProduction Production reports Quality control reportsInventory management Material usage Inventory levels

Operations support system Batch vs. Online Real-Time Processing


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Processing of transactions is done in one of two modes:

1. Batch processing: The TPS collects all transactions for a day or other time period; and later processes the batch of transactions at once.

2. Online transaction processing (OLTP) or real-time processing: The TPS processes each transaction as it occurs, which is real-time processing.

OLTP requires that a network link the input device or Web site to the TPS.

Management support system Management Information Systems (MIS)


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General purpose reporting systems

are referred to as management

information systems (MIS).

3 types of reports

1. Periodic: created or run according to a pre-set schedule.

2. Exception: generated only when something is outside the norm.

3. Ad hoc: generated on an as needed basis.

Management support system

Decision Support Systems (DSS)


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Support unstructured and semi-structured decisions, such as whether to make or buy products or what new products to develop & introduce into existing markets.

3 characteristics of DSSs:

1. easy-to-use interactive interface

2. models that enable sensitivity analysis, what if analysis, goal seeking, and risk analysis

3. data from internal databases, external sources, and added by the decision maker who may have insights relevant to the decision situation

IT Infrastructure


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Role of IT Department ensure the reliability of the enterprises IT infrastructure

What an Organisations IT infrastructure can support is determined by five major components: Hardware Software Networks and communication facilities, including the internet and intranet Databases and data workers Information management personnel

How you design your IT infrastructure determines the ability to efficiently store, protect, and manage data so they can be made accessible, searchable, shareable, and ultimately actionable.

In the past, IT managers only had two options, to build or buy the technology.

Now the option of cloud computing is also available

Acquiring Infrastructure Components


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When making decisions on how to acquire your infrastructure component, the following needs to be considered:

1. Dependable (available, scalable)

2. Manageable

3. Adaptable

4. Affordable

Supply Chain and Logistics Support


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Figure 2.8 Backstream and upstream components of a supply chain.

A companys competitive advantagelow cost, reliability, quality, or speed to marketdepends on how well the supply chain is managed.

Logistics & RFID


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Managing material and information flows to

optimize supply chain operations.

Logistics has been described as having the

right thing, at the right place, at the right time.

RFID (radio frequency identification) tags can be attached to or embedded in packages or physical objects.

RFID readers scan and input identifying information from the tags via radio waves.

Wal-Marts Global Sourcing Strategy for its Backstream Supply Chain


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Because Wal-Mart has thousands of suppliers and constantly looks for new ones worldwide, they invested in a new global sourcing strategy.

Benefits:

reduced cost of goods to keep prices down

increased speed to market

improved product quality

Sourcing: identifying sellers (sources) that can provide Wal-Mart with products or services to sell in stores and online.

Global sourcing: purchase of goods or services from sellers located anywhere in the world.

IT Infrastructures, Cloud Computing, & Services


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A companys IT infrastructure determines the workload that its ISs, apps, and mobile computing devices can handle and their speed.

IT infrastructure: collection of hardware, software, processes, networks, and users.

IT infrastructure allows (and limits) the ability to store, protect, and manage data so that it can be made accessible, searchable, shareable, and actionable.

Cloud Computing


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To improve performance at lower up-front costs, companies are turning to cloud computing.

Cloud: term used to refer to the Internet.

Cloud computing has greatly expanded the options for enterprise IT infrastructures.

Figure 2.10 Evolution to Cloud Computing

IT at Work 2.4


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U.S. government spent about $68.1 billion in 2008 on IT, with 1/3 spent on IT infrastructure. Using cloud computing can significantly reduce costs and energy consumption.

U.S. Department of Defense (DoD):

implemented a private cloud to service many military agencies at reduced cost.

did not adopt (public) cloud computing because of the sensitive nature of their data.

U.S. Navy has drafted guidelines for ordering cloud services, but standards and policies for cloud computing have not yet been established.

What Services are Available in the Cloud?


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Software-as-a-Service (SaaS): popular IT model in which software is available to users as needed.

Other terms for SaaS: on-demand computing utility computing hosted services

Basic idea: instead of buying and installing expensive packaged enterprise applications, users access software apps over a network

Moving to the Cloud raises questions


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Which workloads should be exported to the cloud?

Which set of standards to follow for cloud computing?

How to resolve issues of privacy and security as things move out to the cloud?

How will departments or business units get new IT resources? Should they help themselves, or should IT remain a gatekeeper?

Cloud computing limitations & trade-offs


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Cloud computing runs on a shared infrastructure so the arrangement is less customized to a specific companys requirements.

Its more difficult to get to the root of performance problems, like the unplanned outages that occurred with Google's Gmail & Workday's human resources apps.

The tradeoff is cost vs. control

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Strategies for Acquiring IT Applications

Buy the applications (off-the-shelf approach)

Lease the applications

Developing the applications in-house (Insourcing)


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The Five Major Steps of Acquisition


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Constraints in Planning and Acquisition


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Acquiring IT Applications Option 1 - Buy


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Acquiring IT Applications Option 2- Lease

TYPES OF LEASING VENDORS Leasing can be done in one of two ways.

The first way is to lease the application from an outsourcer and install it on the companys premises. The vendor can help with the installation and frequently will offer to also contract for the operation and maintenance of the system. Many conventional applications are leased this way.

The second way, using an application system provider (ASP), is becoming more popular.


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Acquiring IT Applications More Options ..


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Acquiring IT Applications More Options

IN-HOUSE DEVELOPMENT APPROACHES. There are two major approaches to in-house development: building from scratch or building from components. Build from scratch. This option should be considered only for specialized

applications for which components are not available. It is an expensive and slow process, but it will provide the best fit.

Build from components. Companies with experienced IT staff can use standard components (e.g., a secure Web server), some software languages (e.g., Java, Visual Basic, or Perl), and third-party subroutines to create and maintain applications on their own. (Or, companies can outsource the entire development process to an integrator that assembles the components.) From a software standpoint, using components offers the greatest flexibility and can be the least expensive option in the long run. However, it can also result in a number of false starts and wasted experimentations. For this reason, even those companies with experienced staff are frequently better off modifying and customizing one of the packaged solutions as part of the buy option.


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Traditional Systems Development Life Cycle

Software development life cycle is the traditional systems development method that organizations use for large-scale IT projects.

SDLC processes are systems investigation, systems analysis, systems design, programming, testing, implementation, operation and maintenance.

Waterfall approach is when tasks in one phase are completed before the work proceeds to the next stage.


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Selection of Vendors


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Partner Connections


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Business Process Redesign (BPR)

Business process redesign was preceded by business process reengineering, a methodology in which an organization fundamentally and radicallyredesigned its business processes to achieve dramatic improvement. Today, BPR can focus on anything from the redesign of an individual process, to redesign of a group of processes, to redesign of the entire enterprise.

A new method for restructuring, Business process management (BPM),combines workflow systems and redesign methods. This emerging methodology covers three process categories: people-to-people, systems-to-systems, and systems-to-people interactions. It is a blending of workflow, process management, and applications integration.

BPR

BPM


Chapter 15

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Outsourcing & Application Service Providers

Outsourcing is when an organization acquires IT applications or services from outside contractors or external organizations.

Application service provider (ASP) is an agent or vendor who assembles the software needed by enterprises and packages the software with services such as development, operations and maintenance. ASP manages application servers from a centrally

controlled location rather than at a customers site.

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Evaluating & Justifying IT Investment: Benefits, Costs & Issues

Assessing the costs Fixed costs: are those costs that remain the same

regardless of change in the activity level. For IT, fixed costs include infrastructure cost, cost of IT services, and IT management cost

Total cost of ownership (TCO): Formula for calculating cost of acquiring, operating and controlling an IT system.

Assessing the benefits (Values) Intangible benefits. Benefits from IT that may be very

desirable but difficult to place an accurate monetary value on.

Comparing the two


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Conducting the Cost-Benefit Analysis

Using NPV in cost-benefit Analysis. Using the NPV method, analysts convert future values of benefits to their present-value equivalent by discounting them at the organizations cost of funds.

Return on investment. It measure the effectiveness of management in generating profits with its available assets.

The business case approach. A business case is one or more specific applications or projects. Its major emphasis is the justification for a specific required investment, but it also provides the bridge between the initial plan and its execution.


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Cost-Benefit Analysis Methods

Method Description

Benchmarks Focuses on objective measures of performance. Metric benchmarks provide numeric measures of performance, best-practice benchmarks focus on how IS activities are actually performed by successful organization.

Management by maxim Brings together corporate executives, business-unit managers, and IT executives to identify IT infrastructure investments that correspond to organizational strategies and objectives.

Real-option valuation Stems form the field of finance. Looks for projects that create additional opportunities in the future, even if current costs exceed current benefits.

Balanced scorecard method Evaluates the overall health of organizations and projects, by looking at the organizations short- and long-term financial metrics, customers, internal business processes and learning and growth (Kaplan and Norton, 1996).

Activity- based costing approach Applies principles of activity-based costing (ABC)( which allocates costs based on each products use of company activities in making the product) to IT investment analysis.

EIAC model Methodology for implementing IT payoff initiatives, composed of 9 phases, divided into four categories: exploration (E), involvement (I), analysis (A) and communication (C).


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Managerial Issues

Global and Cultural Issues

Ethical and legal issues.

User involvement.

Change Management

Risk Management


Chapter 2 Link Library


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Information Technology For Management 6th Edition, Turban, Leidner,

McLean, Wetherbe, John Wiley & Sons, Inc.

Blog on cloud computing http://infoworld.com/blogs/david-linthicum

Planners Lab, for building a DSS http://plannerslab.com

Supply Chain and Logistics Institute http://SCL.gatech.edu/

Salesforce.com cloud demos http://salesforce.com

U.S. Defense Information Systems Agency http://disa.mil

Supply Chain, Europes strategic supply chain management resource.

http://supplychainstandard.com

http://infoworld.com/blogs/david-linthicumhttp://plannerslab.com/http://scl.gatech.edu/http://salesforce.com/http://disa.mil/http://supplychainstandard.com/

IT Infrastructure and Suport Systems

Documents

targets information

goal of information

improved information

architecture data

bypassed data

data quality

decision needs

decision makers