DESIGN
AND MANAGEMENT DIMENSIONS
OF
LARGE INFORMATION SYSTEMS
-
Basis of MDIS Methodology
Jiří V o ř í š
e k
Prague University of Economics
Department of Information Technologies
W. Churchill Sq. 4
130 67 Prague 3
Published: October 1992
Abstract: Identification of the main design
and management problems of large information systems (IS). Critical success
factors of business informatics. Definition of IS design dimensions and
description of MDIS (Multidimensional Development of Information System)
methodology. Description of the development principles of information strategy
in connection to business strategy. Information strategy as a project of all IS
projects in the company. Case studies of large projects.
Key words: design dimensions of IS, design
methodology, information strategy, business strategy, strategic information
system, IS/IT architecture.
1. INTRODUCTION
The quality of information system
(IS) more and more influences the competitiveness of the company in developed
countries. Therefore, IS management becomes a part of strategic management.
This part of strategic management is a subject of the information strategy (IST) which is viewing the company
informatics as a source of business activities and as an important factor of
management innovation.
While in late seventies and early
eighties the main attention was paid to design methodology of separate aspects
of IS (data analysis, function analysis, project management etc.), from late
eighties the attention of well-known authors (e.g. McFarlan, Cash, Ward
[1],[2]) is shifting to strategic effects of company informatics. The main
reasons for this are given below.
In the market economy the information is one the of main factors
of the long-term company prosperity. The prosperity can not be assured
without a good information about the market situation, competitors, customers,
suppliers etc. There is another very important feature of information - it is
able to substitute for other sources of company activities (e.g. finance, raw
materials, employees). For example sophisticated IS for controlling materials
and goods flow decreases the amount of necessary supplies in production and
distribution; sophisticated tax information system increases effectiveness and efficiency of tax administration and
could lead to the decrease of tax rates.
Another reason for starting with
information strategies was the fact that huge
investments into IS and information technologies (IT) often did not bring
expected effects. For example, according to the research of German
consultation company RKW [4], in many cases there is no significant correlation
between the amount of investments into IT and the company effectiveness.
The analysis of low effectiveness
of some information systems has shown (e.g.[13],[16]) that if the company does not define the strategic
goals of informatics then the impacts could be as follows:
- The
information system does not support the interests of the whole company and
its separate functions are oriented towards the interests of separate
departments or child companies. These local interests need not be consistent
with global interests. An often example is that IS supports only operational
level of management and that there are no links to top level management. It can
lead, for example in a business company, to situation that automation
simplifies realization of business documents, but it does not enable to justify
the efficiency of the business case (proper price level, optimal payment
conditions etc.).
- The
priorities of IS development are not based on well-defined company objectives,
but on incidental demands of separate users. It is quite typical to buy PC
applications or PC application packages without thinking of their integration
to consistent IS. Bewley's analysis [14] of software applications bought by
U.S. Ministry of Defense is instructive in this regard. Only 1.5% of software
is being used in the same form as purchased, 3% is used after being modified,
29% of software was used and left aside, 47.5% was never used in routine work,
and 29% of software was paid for but never delivered or even never written.
- The
architecture of IS and users rights are not compatible with organizational
structure and with authority and responsibility distribution. E.g. some
employee can update or delete data that he or she is not responsible for. Such
incompatibility can cause jurisdiction contentions in the company and lower the
effectiveness of company activities.
- Other problems known from practice are:
incompatibility of current applications with new hardware, low cooperation of
user department with designers of IS etc.
Besides these problems, the other
reason for the necessity of information strategy, is a new view of information
and information resources (e.g. [2],[3]). Information
is used as strategic goods (e.g. information about competitors market
position), the priorities are shifted from information about internal company
affairs (accounting, material supplies, etc.) to information about important surroundings (information about
competitors, suppliers, etc.).
The view of the information
technology efficiency is slowly changing. The former view of the efficiency -
contributions minus costs, or "what is the net gain of IT?", is
changing to - "What will happen, if our company does not invest into IT, while
the competitors will?"
A well designed IS based on the
company objectives and modern IT is not only a prerequisite of company
informatics success, but prerequisite of company effectiveness and
competitiveness, too. A question is, however, how to design, implement and
operate such a system. Here we have to deal with methodological questions again
and they are more complex and therefore more complicated. Both the academics
and the practitioners are looking for new methodologies and new tools that
could help to develop IS in these conditions.
The goal of this text is to put forward some
modifications to a conventional IS design methodology and demonstrate them
using two strategic documents - global business strategy and information
strategy. The kernels of these modifications are multidimensional IS design and
design of several IS architectures (global, function, process, data, software
and hardware architectures).
Two case studies are introduced
at the end of this chapter. Both are derived from Czechoslovak practice [18],[19]
and will be used for illustration of the points raised in this text.
Case studies
(1) Information System of a Large Trading Company
The management of a large trading company was not
satisfied with the quality of information system. The general manager arranged
a meeting of directors at which the causes of the following problems ought to
be identified:
- New version of IS has no positive effect on
the company efficiency,
- IS functions do not meet user requirements
because they change frequently,
- Design, implementation and maintenance of IS
is more expensive and takes more time then it was expected,
- IS projects are unpopular and resented by
the IS users,
- Separate IS projects don't fit each other.
For identification of the causes of these problems an
external firm of consultants has been hired. Where do you think the firm found
the causes?
(2) Tax Information System
The Czech Republic has been preparing new information
system in connection with a implementation of a new tax system. The tax
information system must be efficient tool for tax administration, state income
accounting, and tax statistics. The users of the systems are: ministry of
finance, 8 regional headquarters, and 218 local finance offices (in total about
9 500 people). What are the strategic effects of the tax information system and
what main specific problems must be solved by the team designing and
implementing the system?
2. APPROACHES
TO IS DESIGN
2.1 Sorts of
view of IS design
In the previous section we came
to a conclusion that the level of IS effectiveness depends on concept of IS (if
it exists and includes strategic objectives). To create a strategic conception
of IS and to put this conception through and realize it successfully is not
possible if there is only one view of IS during IS design (e.g. data, software,
hardware, functional, or organizational view). If there is only one preferred
view it happens, according to our opinion, that the new IS is even less
effective. The result is not going to be better if in this conception lacking
approach modern CASE tool is used. There are already examples in Czechoslovak
practice (e.g. IS of one big shipping company) that in situation of using no or
wrong conception, a sophisticated CASE tool accelerated and made more expensive
the way to an unusable information system. In other words a number of views of IS during IS design is a basic presumption of IS
effectiveness.
In the following sections we shall
try to assort various views of IS and to find their links. The main criterion
in view classification will be the observer - IS user or IS designer. The
reason for this criterion is that the user views are sources of IS design.
During the IS design the user views are consecutively transformed into various
design views. With the help of design views - design dimensions - the user views are implemented and tested, if
they are correct and consistent.
2.2 User views
of IS
The view of the top management is long-perspective and
strategic. It could be summarized into following requirements:
- IS has to support attainment of company
objectives,
- IS has to assure truthful and on-time
picture of the reality (topical information about company activities and its
important surroundings must be at disposal at the time of decision making),
- IS must help to gain a competitive advantage
in the market.
It is very important for the
designer to identify and analyze strategic objectives of the top management,
because they should predetermine the main IS orientation and determine main
criteria for measuring the effectiveness of IS. Therefore, the view of the top
management has the highest priority from all the user views.
The second user view is the process view of end-users - see
Fig. 1. The end-users expect from the IS, above all, the support for daily problems
solution. This view is important for the IS designer, because it is possible to
derive from it the following important information:
- what data ought to be collected and stored,
- at what time the data ought to be collected
(from the point of view of cost effectiveness the best way is to collect data
according to "pull" principle of just-in-time, in other words, to
collect data only when they are actually needed),
- what data transformations ought to be
performed and what events should start these transformations.
______________________________________________
data collection
event,
|
need of information
|
|
data storing start of data
transformation
| |
|
|
-----------> data transformation
|
information
|
thought,
decision formulation
|
action
___________________________________________
Fig. 1: End-users process view of IS
The third user view of IS is the view of IS functions by certain user
types (general director, marketing department manager, accountant etc.). To
analyze these views is important, as they predetermine IS function
architecture. The view of IS functions by certain user types (certain position
in organizational structure) ought to be consistent with the position work
content, its authorization, responsibilities and access rights to IS resources.
Fig. 2 illustrates a part of the view of trading company salesman.
____________________________________________________
session
(logon - logout)
|
-------------------------------------------------
| | |
function group-1 function
group-2 ...
(business case) (office
automation)
|
-------------------------------------------------
| | |
function subgroup-1.1 function
subgroup-1.2 ...
(price lists) (business
case documents)
|
.
.
.
-------------------------------------------------
| | |
element. function-1.1.1 element.
function-1.1.2 ...
transaction-1.1.1
transaction-1.1.2
(goods description) (goods
prices)
|
-------------------------------------------------
| | |
transaction step-1
transaction step-2 ...
(goods identification) (goods
characteristics)
____________________________________________________
Fig.
2: A
salesman view of company IS function structure
2.3 Design views
of IS - the dimensions of IS design
We call the design views in this
text the dimensions of IS design.
These dimensions transform at first the user views into logical IS design and
then into implementation environment. The dimensions will be divided into two
groups. The first group involves the time dimension and the level of
abstraction used in IS design. Second group involves subject dimensions and
methodological and organizational dimensions.
The time dimension and the level of abstraction determine the design phases and
the detail of the view of IS in separate phases - see Fig.3 and Fig.4. The use
of these two dimensions during IS design has the following goals:
- to divide the IS design into separate
precisely defined phases in order to ease the management of the design,
- clearly separate various levels of
abstraction used during IS design and thus simplify the difficulty of problem
solution and in the same time delimit the role of various specialists during
the design,
- to ensure that all the global company
objectives will be in adequate manner supported by IS and that no IS function
will be at variance with these objectives.
______________________________________________________
global business strategy GST
|
information strategy IST
|
-----------------------------------------------
| | |
project-1
project-2 ...
|
__________
feasibility study FS
|
|
|
global design
GD |
|
| phases
detail design
DD |
|
| of project
implementation
IM |
|
| life-cycle
installation
IN |
| |
operation and
OM |
maintenance
|
__________
______________________________________________________
Fig. 3: Phases
of IS design and operation
Fig.3 illustrates the phases of
IS design and operation as they are defined in the methodology MDIS (Multidimensional Development of
Information System) developed in the Department of Information
Technologies. This methodology is a synthesis of System Development Methodology
- SDM [5], Case Method developed by Barker [6] and theoretical and practical
work of the department members. The deviations between stated project
life-cycle phases (Fig.3) and phases proposed by SDM or Case Method are not too
significant and they followed from usage of different methods and tools.
Not all currently used
methodologies of IS design (including both above mentioned methodologies) have
links to global business strategy of a company. These features we see as a weak
point of these methodologies. If separate projects are not preceded by global
business strategy and information strategy, then problems, we mentioned in the
introduction to this text, can arise. As both these documents represent the
most important difference between MDIS methodology and methodologies used
normally in Czechoslovak practice, they will be described in the following
chapters in more detail. In order to better understand Fig.3, short definition
of both documents follows.
The global business strategy gathers most important
weaknesses and strengths of the company and its activities and compares them
with the opportunities and threats of the relevant company environment (SWOT
analysis). Then strategic objectives for next three to five years are defined. The information strategy is closely
linked to global business strategy and defines the ways of supporting the
company objectives by informatics, specifies IS projects currently in
operation, new IS projects and assures the consistency of all projects. From
that point of view we can see the information strategy as a project of all IS
projects in the company.
_____________________________________________________
strategic company objectives
|
objectives of company informatics
|
information system
(IS of trading company)
|
----------------------------------------------
|
| |
subsystem-1.1
subsystem-1.2 ...
(business
case) (accounting)
|
----------------------------------------------
|
| |
function
group-1.1.1 function group-1.1.2 ...
(price
lists) (business case
documents)
|
----------------------------------------------
|
| |
function
subgroup-1.1.1.1 fun. subgroup-1.1.1.2
...
(offer
price lists) (comparable price
lists)
|
.
.
.
----------------------------------------------
|
| |
element.fun.-1.1.1.1.1 element.fun.-1.1.1.1.2 ...
(goods
description) (goods prices)
|
----------------------------------------------
|
| |
transaction step-1 transaction step-2 ...
(goods
identification) (goods characteristics)
|
----------------------------------------------
|
| |
program
module-1 program module-2 ...
_______________________________________________________
Fig. 4:
Decomposition of IS objectives and functions
Decomposition of IS objectives
and functions assures consistency between company objectives and IS functions.
At the same time it maps the IS functions into implementation environment. It
means that in a well-decomposed IS each
program module supports some company objective. The decomposed IS functions
reply to consolidation of all user type views, it means, all types of user view
of IS functions are integrated into one structure.
The second group of design
dimensions are the subject dimensions
and methodological and organizational dimensions. The subject dimensions of
IS design are as follows:
(1) Information/Data Dimension (inf)
An
information/data dimension determines the types of information that are needed
in various types of company activities, and a data architecture of IS, it means the content and structure of
company database and its distribution in computer network.
(2) Activity/Function/Event/Process Dimension (pro)
This
dimension describes process types running in the company and the ways they are
supported by IS functions (IS processes). In this dimension the dynamics of
company behavior is investigated. If an important event occurs (e.g. input of
external information into company information system; determined date or time;
exceptional internal event) the company reacts by starting a process
represented by network of employees and/or machines activities and/or IS
functions - see Fig.5.
__________________________________________
event
(start of reaction)
|
activity-1
|
------------------------------
| |
activity-2
IS function-1
| |
IS function-2 |
| |
------------------------------
|
IS function-3
|
activity-3
|
.
.
.
(end of
reaction)
__________________________________________
Fig. 5:
Event and its corresponding process
Besides
the process architecture (definition
of components and rules of separate processes) this dimension determines the functional architecture that
defines the function appurtenance into IS function structure (see Fig.4).
(3) Economical Dimension (eco)
An
economical dimension analyzes the costs of IS design and IS operation and
compares them to the IS economical contributions. At the same time it defines
from what financial sources and when the costs will be covered.
(4) Organizational Dimension (org)
An
organizational dimension determines the organizational structure of the
company, location of all departments, number and types of positions in a
department, work content of these positions in connection to IS functions,
internal rules that are valid for internal processes, and who is responsible
for separate activities, IS functions and relevant data in company database.
(5) Human Resource Dimension (hr)
This
dimension determines optimal structure of company employees (qualification,
age, sex), social impacts of new IS, and what measures are necessary in order
to reach optimal employee structure. Important part of this dimension is the
analysis and design of the company culture and its genetic code [15],[18],[20].
(6) Software Dimension (sw)
The
software dimension determines the
architecture of a software system. It means definition of types, parameters
and interfaces of all software components (operating system, utilities,
database system, communication system, application packages and application
programs). Further determines whether software components will be bought or
developed. If a component will be developed then the implementation environment
is determined.
(7) Hardware Dimension (hw)
The
hardware dimension determines the
hardware architecture of all IS. It means definition of types, parameters,
interfaces, numbers and locations of all hardware components (computers,
peripherals, communication lines, etc.).
The group of methodological and management dimensions consists of the
following dimensions:
(1) Method Dimension
(met)
The
methodological dimension determines methods and corresponding tools that are
used for analysis, specification, implementation, and operation of IS.
(2) Document Dimension (doc)
The
document dimension determines the types, structure and links of documents that
are produced in separate phases of IS design and operation.
(3) Management Dimension (mng)
The
management dimension determines the organizational structure, responsibilities
and authorities of a the informatics department and its analyst, programmer,
and operational teams. In other words, this dimension defines, who and when
should do the work, and who is responsible for the quality of the results.
If the new IS ought to have all
positive attributes that were mentioned in the previous chapter, then during IS
development both here described dimension groups has to be taken into an
account. Therefore, in the conceptual
model of IS design the MDIS methodology combines both groups of dimensions
- see Fig.6a and Fig.6b.
______________________________________________________________
| WHAT | HOW |
WHAT | HOW
pha-| (content of the phase solution)
| |OUTPUT|CONTROL
se
|---------------------------------------------------------
| inf pro eco
org hr sw hw |
met | doc | mng ==============================================================
GST | GST(inf) GST(pro)
GST(eco) ...
--------------------------------------------------------------
IST |
───────────────────────>
what is solved in the phase
--------------------------------------------------------------
FS
| │
--------------------│-----------------------------------------
GAD | │ the level of view of subject
--------------------│-----------------------------------------
DAD | │ dimensions (the view is broaden
--------------------│-----------------------------------------
IML | │ in next phase)
--------------------V-----------------------------------------
INS |
--------------------------------------------------------------
In MDIS the following steps for problem solution in separate
phases of IS design are recommended (the same steps are used in all phases
and create universal frame for application of methodological and management
dimensions):
1. Setting of goals for the phase. In this step,
the results of previous phase, general objectives, and general limits of IS
design (finance, time, etc.) are taken into an account.
2. Development of the work plan (what, who,
when).
3. Conception formulation for the design in the
phase (vision, conceptual model). The conception is formulated at the level of
abstraction corresponding to the phase.
4. Analysis of the current stage of IS within
separate subject dimensions. The analysis is realized in the frame given by the
level of abstraction corresponding to the phase and by the current stage of the
vision (conceptual model).
5. Verification of the vision according to the
results of the analysis:
- if the vision was proven to be untrue, then
go to step 3.
- if the vision was proven to be true, then
the current stage of the vision becomes valid conceptual model of IS at
corresponding level of abstraction.
6. Design of IS within separate subject
dimensions at corresponding level of abstraction. The role of the conceptual
model is to ensure consistency of IS design in separate dimensions.
7. Integration and testing.
8. Presentation, defense and passing of the
results to the next phase.
Remarks:
(1) The aim of the analysis is predetermined in this approach by
preliminary vision of the IS design and IS architecture. Such approach requires
an experienced information manager. It has considerable advantages (saves time
and other resources), but at the same time it might be risky (analysis could be
deformed by wrong vision). However, if the information manager does not have
preliminary vision of the design, then might happen that those features of the
present IS which are not important to new IS, or even are going to be
eliminated, are analyzed in detail.
(2) The subject dimensions, in which the global business strategy is
developed, differs mildly from those, in which IS is designed. These
modifications are described in Chapter 4.
Example:
A preliminary vision in the phase of global design of
the trade company selling subsystem could be the following:
We would consider one business case be a sequence of
mutually linked documents:
[demand] - [offer] - contract - invoice(s) - [debet
note(s)] - payment(s).
Each document can go through several stages: prepared
- completed - valid - canceled. There could be only one valid contract in one
business case. The sum of valid invoices must not exceed (both in financial and
natural values) the values of contract. The business case ends after the
payment of all valid invoices. From the technological point of view the
business case is a package that could be sent to another computer or archived
as a single entity.
The next difference of MDIS
methodology from conventional methodologies (e.g. [5],[6],[8]) follows from the
conceptual model of IS design - it is
necessary within each phase of IS design to solve all IS subject dimensions.
The conventional methodologies include in all phases design of IS in dimensions
inf, pro, sw, and hw, but usually do not fully solve
dimensions org, hr, and eco. This inconsistence can, for
example, cause that an organizational structure of a company is not consistent
with the new stage of IS, or, that the requalification programs are not
designed and realized with sufficient preignition and therefore the users are
not able to use the new IS efficiently, or, that software development is too
expensive.
On the other hand it is important
to realize that it is not possible to use the conceptual model of IS design
strictly in any environment and in any situation. A universal methodology of IS
design suitable for all IS and all projects does not exist and it is not
possible to create one. It is always necessary to adopt the methodology for
concrete conditions in which the IS or the project are solved. The factors the designers ought to take
into an account in concrete conditions are the following:
- the scope of the problem and its complexity,
- the time the designers have for the
solution,
- the number of designers and their abilities,
- the finance resources available for
solution.
Competent information manager can
be recognized according to his ability to identify main critical success
factors of the IS design and operation and his ability to adapt management,
organization, and methodology of the work to concrete conditions. It is
necessary to agree with Brooks [12] that the most dangerous information manager
is a manager which is managing his second large project. Such a manager
inclines to see analogies between his first and second projects, where, in
fact, they are not. We can hear him to say: "In project A we solved this
problem this way and it resulted in good solution, therefore we shall use the
same way now."
In practice the most frequent
modification of described conceptual model is a combination of two or more
consecutive phases of solution to one phase. However, such combination should not
result in elimination of some subject dimension of IS design. Other frequent
modifications are given by different weights assigned to separate subject
dimensions. These weights follow from the critical success factors of IS design
and operation.
Case study
The necessity of modification of the universal design
methodology for the design of concrete IS can be illustrated on the Tax
Information System of Czech Republic. The task of designers of the preliminary
study, which combined the information strategy and the feasibility study into
one phase, was to design the IS in such a way, that the first version of IS was
operational six month after finishing the study.
The project was characterized by a number of features,
which are not typical for ordinary company projects. The critical success
factors were identified as follows:
- the solution had to take into account
frequent changes of laws defining the taxes and taxes rates (in the time of
study preparation not all tax laws were even known),
- the solution had to take into account
organizational changes in tax administration (changes in number of finance
officers, local finance offices, and their authorities and responsibilities),
- IS had to be maximally user-friendly, in
order to enable requalification of nearly ten thousand finance officers during
the period of three month,
- IS had to be solved in versions starting
from inevitable functions to special functions that would be required by
finance organs a year later.
The methodology of IS design, the architecture of IS
and the management principles were adapted to these critical success factors.
3. RESPONSIBILITIES
IN IS DESIGN AND OPERATION
A lot of people with different
qualification and different responsibilities participate in the IS design and
IS operation. The goal of this chapter is to summarize the role and
responsibility of different professions in IS design and IS operation. More
information about this topic can be found for example in [13].
The most important role in IS
design and IS operation is given to a
customer. The customer differs from all other participants by three
important features:
- he initiates the creation or innovation of
IS by setting the IS goals,
- he has sufficient power to put his idea
through,
- he has sufficient sources for financing both
IS design and IS operation.
Anybody requiring new IS without
any of the above mentioned characteristics, cannot be successful. Top
management of a company is normally in the role of a customer. In the case of
state institution the role of the customer can be undertaken by relevant
ministry (e.g. the Ministry of Finance was the customer for the Tax Information
System).
The other participants on IS
design and IS operation can be divided into four groups:
- users,
- designers,
- operational staff,
- consultants.
The group of users consists of the top management,
guarantee of informatics, and end-users.
The top management of a company is responsible for
working out a global business strategy and for setting the main goals and
limits for IS innovation. In IS operation the top management is responsible for
adequate usage of strategic information passed over by IS.
A guarantee of informatics is not usual profession in
Czechoslovak companies. This profession was introduced by large companies with
large and sophisticated IS. The guarantee of informatics is constituted in
these companies at the level of deputy manager of big company departments
(marketing, production, personal, etc.). The role of guarantee during IS design
is to represent the interests of his/her department and participate in crucial
decisions about IS functions. During IS operation his/her role is to check if
the IS functions are consistent with changing department needs and changing
department environment. If not, then the guarantee has to initiate changes in
IS functions.
The task of end-users during IS design is to consult detail design of IS (for
example a screen design). During IS operation they are responsible for optimal
usage of IS functions available.
The group of designers consists of information manager,
system analyst and programmer (system and application programmer)
An information manager (project manager) is responsible
for management of IS design, coordination of separate teams, time schedule, and
for keeping a budget. Further on, he has to ensure that the IS functions will
be consistent with global company goals and that subject dimensions of IS will
be solved completely and with the weights derived from critical success
factors. The information manager plays key role in IS design. The success of
the company informatics depends largely on his capabilities. If the IS is
designed by an external company, then the information manager should be a
member of staff of a system integrator.
The system analysts are specialists for analysis and
design of separate subject dimensions. They are responsible for transformation
of user needs into simple and user-transparent IS architecture and for choosing
the best software and hardware environment for IS implementation.
The programmers are specialists in application
software development and in optimal usage of operating system, utilities, DBMS
and other standard software components. They are responsible for optimal
transformation of IS specification into specific software and hardware
environment.
The operational staff consists of system programmer,
database manager, application manager, operator, hardware engineer, and members
of help desk.
A system programmer is responsible for optimal
function of all standard software components and for tuning up the system in
order to reach optimal resource utilization and maximal system performance.
A database manager optimizes physical distribution
of data in the database in order to reach short response time, ensures data
protection against system break down and data security against the use of
unauthorized users.
An application manager controls the running of an
application via operational parameters of the application (application
statistics, access rights of the users to application sources, setting of a
maximum of parallel users, etc.).
The roles of operators and hardware
engineers has been rapidly changing in the last decade. An operation
without operator due to high automation is not exception and due to high
reliability of hardware the maintenance in most cases is done by external
service company.
With the growing number of users
more and more important role plays help
desk or information center. The task of its members is to provide on-line
information service to all users of IS, to accept and handle claims, and to
distribute new versions of IS functions.
The last group of specialists
participating in IS design and IS operation are external consultants. Their help is useful in such situations where
staff members lack the necessary knowledge, or where the recommendation of
external expert is more suitable for problem solving (for example in case of
organizational or personal changes).
It is strongly recommended to use
guarantee of informatics and external consultants in application of MDIS
methodology . Usage of these specialists enables to solve all IS dimensions at
needed level of skill. On the other hand the services of help desk are very
important in operation of large IS. They increase the efficiency of IS
utilization.
4. GLOBAL
BUSINESS STRATEGY
According to our opinion, linking
of separate IS projects to global business strategy and to information strategy
of a company is one of the contributions of MDIS methodology. Therefore, we
shall now direct our attention to these two strategic documents, to their
mutual connections and connections to separate IS projects. More detailed
description of global business strategy as a separate entity can be found for
example in [18].
A global strategy starts by SWOT
analysis that analyses internal strengths and weaknesses of a company and
external opportunities and threats.
An analysis of external factors that influence activities of a
company is usually done using the following structure:
- Legislature
- analysis of laws, regulations and norms which significantly influence company
activities (e.g. regulations and norms of living environment),
- Working
power sources - analysis of availability and qualification of working power
in the areas of company locations,
- Competition
- identification of main competitors, their market positions, their strengths
and weaknesses and their expected direction of development,
- Customers
- analysis of all segments of the market the company is involved with, and
analysis of main customers in these segments, their needs, their financial
possibilities, and their payment morals,
- Suppliers
- analysis of current and potential suppliers, their market position, their
financial situation, speed and reliability of their supplies and possibilities
of substitution of their supplies,
While the analysis of external
factors is oriented towards factors which cannot be (or only slightly)
influenced by the company, the analysis
of internal factors is oriented towards factors which can be fully
influenced by the company itself. The analysis is especially oriented to find
those specific advantages of the company which the competition companies could
get only with extreme difficulty:
- Marketing
- analyzes current methods and results of company marketing, how it is
successful in determining the market segments, and in decisions about product,
distribution channels, pricing and promotion,
- Finance
- analyzes the amount and structure of company assets and liabilities and the
structure of company financial indices. The financial indices should reflect
the reality and should indicate if the reality is out of the desired stage,
- Research
and Development - analyzes the need and the results of company R&D, the
efficiency of R&D and the speed at which new developed products are
introduced into the market,
- Production/Services
- analyzes the production technology, the costs and quality of production of
separate products and services,
- Organization
and Management - analyzes the usefulness of company organizational
structure, usefulness of company locations and effectiveness of company
management,
- Employees
- analyzes the qualification and age structure of company employees, the
harmony of this structures with company needs, fluctuation and results of
requalification programs,
- Information
System - analyzes external and internal information services and
information sources and their efficiency,
- Company
Culture - analyzes company climate, relation between management and
subordinates, working discipline, working conditions and social and cultural
aspects of company activities.
On the bases of such
multidimensional analysis critical
success factors (CSF) of the company development are identified and global company objectives for the
period of three to five years are formulated. The global company objectives are
often formulated (see for example [17]) at three levels:
- objectives from the point of view of company
owners (e.g. to increase dividends from 9% to 17% in next three years),
- objectives from the point of view of
employees (e.g. to increase the average salary to CSK 6000.-; to improve
working conditions by moving to a new building),
- objectives from the point of view of society
(e.g. to support financially the teaching of informatics at universities by a
grant of at least one million CSK each year).
After the global objectives were
formulated the ways and means by which
the objectives should be reached are identified. They are defined as
variants, in order to fit various stages of environment development. At the end
the global objectives are decomposed to different dimensions of company
activities (see internal factors in which the analysis has been done).
A global business strategy is not
a document that is worked out once in three to five years and during that
period remains without changes and is only fulfilled. The top management has to
periodically check the strategy consistency with interests of majority of
company owners and consistency with company environment. If it is not
consistent, then it has to be changed. Moreover, the strategy has to be changed
periodically in order to cover the period of three to five years.
Case Study
The executive committee of a smaller shoe company is
examining the reasons of five year stagnation of production and profit decline.
At present the company has serious problems with growing supplies of
semiproducts and final products and with fluent purchase of input materials.
The prices of these materials have fluctuated in last two years. The present
management of the company has not been able to solve these problems effectively.
What would the approach of external consultant be to
solve that situation? What information would he consider to be important for
analysis and successful solution of the situation?
One possible solution:
- 5 year stagnation ==> bad top management
of the company; good management cannot permit so long stagnation;
- growing supplies of semiproducts ==> bad
production organization (just-in-time and pull system are not applied);
- growing supplies of final products ==>
bad marketing (segments of market, prices, promotion);
- problems with fluent purchase of input
materials ==> bad purchase strategy (from whom, when);
- fluctuating of prices of materials ==>
bad purchase strategy (substitution material, another set of suppliers, another
time of purchase, ...).
5. INFORMATION STRATEGY
5.1 IS and its
influence on company development
It was mentioned in Chapter 1
that information system and appropriate information technologies (IS/IT) can
form one of strategic factors of company competitiveness. In this section some
of possible influences of IS/IT on company activities will be briefly pointed
out. They can be used as inspiration for information strategy formulation:
- gaining a significant competitive advantage
(e.g. Japan automobile corporations and their sophisticated IS; Merill Lynch
Bank and its first banking machines);
- increased turnover and profit - e.g. selling
of technological or economical information via computer;
- decreased costs - e.g. solving of logistics
problems in large warehouses; desk top publishing in newspapers;
- increased quality - e.g. CAD/CAM
applications in car industry;
- IS/IT can tie customers firmly to the
company if the activities of a customer depend on a company IS;
- in some cases a sophisticated IS is the only
way of doing business (e.g. air ticket reservation, banking systems, exchange
systems);
- IS/IT often strongly influences
organizational structures:
- IS/IT can be used for support both
centralized and decentralized management, but certain variant of IS
architecture can be a barrier of centralization or decentralization;
- changes in significance of separate company
departments and their management;
- changes in power distribution in organization
(the power of the departments producing important information is growing);
- disappearance of some departments and birth
of new ones (e.g. help desk);
- changes in authorities, responsibilities,
working procedures, and in inter-departmental communication;
- possible influences on employees:
- necessity of requalification;
- fear from new procedures and new tools;
- better working environment,
- more interesting work with increased
productivity.
In order to reach optimal effect
of IS/IT, it is necessary to integrate IS/IT with a global business strategy at
highest possible level. Lucas in [13] has described three levels of integration
of IS/IT with global business strategy (GST) - Tab.1.
---------------------------------------------------------------------------
Level of integration Primary
objective Secondary effect
of IS/IT with GST
---------------------------------------------------------------------------
Independent Operational
efficiency Managerial information
Partly integrated Policy
support, aid re- Better understanding
of
petitive
decision making problem dynamics
Fully integrated Offer new
products, Change the decision
making
markets,
directions process, alternatives
con-
sidered, and
evaluation
criteria
---------------------------------------------------------------------------
Tab.
1: The levels of integration of IS/IT with GST
The document the task of which is
maximal and permanent integration of IS/IT with a global business strategy, is
called information strategy.
5.2 Information
Strategy Content
The information strategy is a
document defining long-term orientation
of a company in the area of information services, information sources, and
information technologies. Its objective is the formulation and support of
critical success factors of company informatics and risk minimization of large IS
development. It is worked out in variants, in order to allow for reactions to
possible future changes in the company and namely in the company environment.
An information strategy has
recently been a focus point of a number of authors - see [1],[2],[3],[10],[11],[13].
MDIS methodology defines information strategy in following points:
(1) Specification of information
strategy links with global business strategy in all main areas of company
activities (marketing, production, finance, R&D, organization and
management, etc). In other words, those objectives and conclusions of global
business strategy that can be supported by IS/IT (see section 5.1), or those
that will influence the operation of IS (e.g. global business strategy plans to
create new subsidiary in another town and claims the subsidiary IS be directly
connected to headquarters IS) are specified.
(2) Analysis of the company
information system stage and development. The IS is analyzed according to
subject dimensions described in section 2.3. A "historical" point of
view during the analysis should not be underestimated. It enables to reveal and
understand encoded customs in employee behavior and in ways and means of their
communication. In general, this part of information strategy tries to identify
the special characteristics of a company that is in literature called
"genetic code of a company" [15]. The genetic code predetermines the
next company development. The more the global business objectives will lie
aside from the company development direction predetermined by genetic code, the
more sources and effort will be needed to reach them (as, at first, the genetic
code has to be changed). The genetic code of a number of companies in
Czechoslovakia has dramatically changed during the transformation of economy to
market economy.
(3) Critical success factors of IS
identification and IS/IT objectives determination. Similarly, as in the
case of global business strategy, critical success factors of company
informatics are identified and IS/IT objectives for the period of three to five
years are determined. The information sources for this point are defined by the
two previous points of information strategy.
The
IS/IT objectives are determined in the terms of structure, volume, and quality
of needed and provided information sources and information services.
(4) Information system architecture
design. Since the information strategy is solved in all subject dimensions,
the IS architecture design is divided into several parts:
- global IS architecture,
- database architecture,
- functional architecture,
- process architecture,
- software architecture,
- hardware architecture.
A
global IS architecture is a conceptual model of the whole information system.
It integrates user and design views of IS into one scheme. The other
architectures break down the global architecture into separate dimensions of IS
- see Chapter 2.
(5) Specification of organizational
changes. These are linked to new IS/IT installation. The changes very often
lead to flattening of organizational structures and to intensifying of
horizontal links between child companies and departments. For example during
recent reorganization General Motors reduced the number of organizational
levels from 15 to 4. On the other hand new IS/IT installation often evokes
establishing of new departments and new positions (e.g. help desk, director of
informatics, etc.).
(6) Training and requalification
programs. These are connected to new IS/IT installation and to
organizational changes. This section includes specification of groups of users
which require training, the content of the training, time schedule of the
training, the training material development, etc.
(7) Economical aspects of
information strategy involve costs analysis of designed internal and
external information services, price policy and marketing strategy in this
area. Further this section analyzes the financial risks of variants of IS/IT
development and estimates the total financial effects of the information
strategy.
(8) Methodological and
organizational standards of IS design and implementation. In this section
the information strategy standardizes methods and tools of IS design and
implementation which will be valid for all projects (e.g. specifies design
methodology, CASE tool, DBMS, user interface standards, etc.). The main goals
of these standards are low maintenance costs and user friendliness of all IS.
(9) Specification of all current
and planned IS projects and their links. This section is one of most
important results of information strategy, because it summarizes and
"materializes" all previous sections and ensures the consistency of
all IS projects in the company.
From the information strategy
content description it follows that in MDIS methodology the information
strategy covers considerable amount of problems significant for most of company
activities. Successful solution to these problems can be important impulse of
dynamical development of the company.
5.3 Present
Problems of Information Strategies in Czechoslovakia
While in most of developed
countries the information strategy is a integral part of both economic practice
and university research, we have to consider several problems in present
Czechoslovak conditions.
The first barrier of information
strategies in Czechoslovakia are economic
and legislative problems of Czechoslovak economy connected with
transformation process to market economy. These problems overshadow the
importance of IS/IT in the solution of present company problems. In another
words, the current period does not seem to be mature enough to allow for
solutions on IS/IT level. However, the thoughts about IS/IT can start new
orientation of the company activities and creation of new conditions for
long-term company competitiveness on the market.
The main priority of many
informatics departments activity is operation
and maintenance of present projects, the usefulness of which is more and
more shaken by new economic conditions. The company informatics management is
overloaded by operational problems and "there is no time" for
conceptual work. In our opinion, the way out of this vicious circle, leads
through the information strategy.
The information strategies are
very often worked out by specialized external firms in cooperation with top
management of a company in developed
countries. It is already well known fact that external (non-partial) view of
company development used to be very useful in identification of new development
possibilities. The proof is that according to [2], 80% of big American
companies are using these specialized services. Another barrier of information
strategies in Czechoslovakia is lack of specialized firms in this field.
6. Summary
This text describes the basis of
MDIS (Multidimensional Development of Information System) methodology,
developed at the Department of Information Technologies, for large information
system design. We see the contributions of MDIS methodology in the following:
(1) The multidimensional approach is consistently
used in all phases of IS design and leads to a design of several IS
architectures.
(2) Every phase formulates and consecutively makes
more precise vision of IS solution at the level of abstraction corresponding to
the phase.
(3) The MDIS methodology defines links between
global business strategy, information strategy and IS projects.
(4) The content of information strategy is adopted
to MDIS methodology principles.
The MDIS methodology was
successfully applied in several large IS projects.
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