James Nowotarski 20 April 2004 IS 553 Advanced Systems Development Practices.
IS 483 Information Systems Management James Nowotarski 5 June 2003.
-
date post
20-Dec-2015 -
Category
Documents
-
view
218 -
download
2
Transcript of IS 483 Information Systems Management James Nowotarski 5 June 2003.
IS 483Information Systems Management
James Nowotarski
5 June 2003
• Review for the core knowledge exam
Today’s Objectives
Topic Duration
• Last week’s quiz 5 minutes
• Recap and quiz on 45 minutes
– Procurement
– Financial analysis
• *** Break 10 minutes
• Core Exam Logistics 10 minutes
• Core Exam Review ???
Today’s agenda
Topic Duration
• Last week’s quiz 5 minutes
• Recap and quiz on 45 minutes
– Procurement
– Financial analysis
• *** Break 10 minutes
• Core Exam Logistics 10 minutes
• Core Exam Review ???
Today’s agenda
IT Outsourcing - Technical Considerations (9.1)
9.1 Discuss how the maturity of a system’s technology and its degree of integration with other systems affect the choice of outsourcing approaches.
Technical Considerations
Low High
High
Low
Degree of TechnologyIntegration
Degree of Technology Maturity
Outsource
Insource
Selective Outsourcing - What is it? (9.5)
What is it• Select the best-of-breed for an activity
9.5 Describe selective outsourcing with at least two advantages and two disadvantages
Advantages• Creates a competitive environment• Enables staff to be retained and redeployed• Provides flexibility to adapt to changes • Less risky than total outsourcing
Disadvantages• Overhead associated with multiple evaluations,
multiple contract negotiations, and multiple vendors to manage and coordinate
• Dividing up pieces of infrastructure (e.g., help desk and network management) can lead to trouble since the pieces are integrated
Topic Duration
• Last week’s quiz 5 minutes
• Recap and quiz on 45 minutes
– Procurement
– Financial analysis
• *** Break 10 minutes
• Core Exam Logistics 10 minutes
• Core Exam Review ???
Today’s agenda
Procurement - Process
RFP Process
1. Pre-RFP
2. RFP
3. Proposal Submissions
4. Proposal Evaluations
5. Vendor Selection
6. ProcurementMethod
7. ROI Analysis
8. NegotiateContract
6. Procurement Methods
• Purchase
– not that popular because of fear of obsolescence
– longest-term commitment of these 3 methods
• Rent
– usually less than 1 year in duration
– only need to give 30 days’ notice to cancel
– more expensive than purchase or leasing
• Lease
– usually 12-36 months in duration
– often done with an option to buy
– middle of the pack in terms of cost and ability to get out
8. Contract Negotiation
• Do’s
– Include vendor responses to RFP in the contract
– Keep lawyers at bay until Statement of Work is complete
– Leverage outside expertise in negotiations
– Provide incentives/penalties
• Don’ts
– Buy vaporware instead of proven solutions
– Purchase low bid unless the value is there
– Settle on final offer prematurely
The way you interact at the negotiating table may foreshadow ongoing relationship dynamics
8. Contract Negotiation
• Agreement between firm and vendor
• Was outlined in the RFP, now it gets finalized
• Includes
– Software characteristics
– Implementation plan
– Technical architecture
– Training strategy
– Maintenance and support
– Service levels (SLA items)
– Cost schedule
Statement of Work
Approach to qualityDefinition of quality metrics
Statement of Work
Approach to Quality and Measurement
Plan
Do
Check
Act
1. Identify quality standards and goals
2. Measure project performance
3. Compare metrics against goals 4. Conduct quality reviews, e.g., peer reviews5. Test for defects
6. Eliminate causes of deficient performance- fix defects- fix root causes
Statement of Work
Quality Metrics
Progress Measures the amount of work accomplished by the development team in each phase
Quality Evaluation Effort Measures the percentage of the development effort spent on internal quality evaluation efforts
Test Coverage Measures the amount of the software system covered by the testing process
Defect Detection Efficiency
Measure percentage of the actual defects originating in a stage of the project that were actually detected in that stage
Requirements Traceability Measures the percentage of the requirements that have been addressed by the system
Defect Removal Rate Measures the number of defects detected and removed over time
Defect Density Identifies defect-prone components of the system
Customer Satisfaction Measures customer satisfaction using objective surveys.
RFP Software Products
1) APES with INFORequestorTM Series – Completely integrated database system enabling pre-loaded or user-defined automated use requirements surveys. Business needs priority scoring, pre-loaded or user-defined RFQ, RFI, RFP preparation. Automatic generation of detail shortlist based on actual RFI responses. It is re-usable tool that will help over and over in the future. Cost is $698.00. 2)HyperRFPTM Series – Distribute RFPs by email or by Web, receive formatted vendor responses back to your designated E-Mail address & eliminate tedious copying, packaging, and mailing. Cost is $229.00. 3) On-Line Consultant - Software tool to make the process more efficient and objective. Linkage vendors’ responses with RFP questions. Quickly and easily compare and score vendors. Cost is varying
RFP Software Products
“Wilmington Trust Co. uses collaboration technology to manage the request-for-proposal process with its vendors. Most recently it used software from eRoom technology to evaluate 20 competitors vying to be the company’s sole temporary-staffing vendor, posting a set of questions in a single format.”
- InformationWeek, 7 October 2002
RFP Software Products
Network Computing web site’s RFP Builder
* http://www.networkcomputing.com/1202/1202sp3.html
RFP Software Products
For those preparing proposals (www.pragmatech.com):
The RFP Machine®
The RFP Machine® enables Knowledge Managers to build, edit, and maintain a central repository of company, product, and service information required for automated RFP and RFI creation. The software brings consistency and accuracy to the RFP response process by providing you with the tools to produce persuasive, professional documents in dramatically reduced time.
The RFP Tracking System™The RFP Tracking System™ allows users to track proposal activity, including information pertaining to the issuer of the RFP or RFI, the person responsible for the response, document turnaround time, the win/loss status, and any other important information
Financial Analysis
• Costs
–One-time vs. recurring
–Fixed vs. variable
–Tangible vs. intangible
o Tangible - Accurately projected
o Intangible - Difficult to estimate or hidden
Costs and Benefits Review
Financial Analysis
• Benefits
–One-time vs. recurring
–Fixed vs. variable
–Tangible vs. intangible
o Tangible - Measurable
o Intangible - Important but difficult to measure or translate into $$$
Costs and Benefits Review (cont.)
Financial Analysis
Tangible benefits• Can be measured and
expressed in $$$• Examples:
– increase sales– reduce labor costs
reduce headcount increase productivity
– reduce inventory costs
Intangible benefits• Difficult to translate into $$$• Perceived gains • Examples:
– improve reputation– provide better information for
decision-making– offer services that
competitors currently offer• When to use:
– When the tangible costs exceed the tangible benefits, look at the deficit and decide if the intangibles are worth that amount.
Tangible vs. Intangible Benefits
Financial Analysis
1. Break-even analysis
2. Payback analysis
3. Cash-flow analysis
4. Net present value analysis
There are four common methods of cost-benefit analysis:
Financial Analysis
1. Break-even analysis
Definition Breakeven point is when total cost of current system and proposed system intersect
Example Current payroll systems costs $1.25 per employee
New system costs $20,000 to implement and $0.35 per employee
Let x = number of employees
.35 x + 20000 = 1.25 x
x = 22,222 employees
If 1,000 employees processed per week, breakeven point is reached in the 23rd week of the system’s life
Financial Analysis
1. Break-even analysis
When to use Project justified in terms of cost savings, not benefits
Advantages Useful when business is growing, volume is key variable in cost
Disadvantages Benefits are ignored
Financial Analysis
2. Payback analysis
Definition Payback period is the amount of time it takes to recover an initial investment
Example New B2B system costs $300,000 to develop.
System handles 1,000 sales per month.
Cash inflow is $50 per sale after paying variable costs.
Payback period = initial investment / annual cash inflow
= 300,000 / (1,000 * 50)
= 300,000 / 50,000
= 6 months
Financial Analysis
2. Payback analysis
When to use Project justified in terms of tangible benefits
Advantages Simple to use
Disadvantages Ignores the time value of money
Does not consider total return beyond the payback period
Financial Analysis
3. Cash Flow Analysis
Definition Examines the direction, size, and pattern of cash flow associated with the proposed system
ExampleQ1 Q2 Q3 Q4 Q5
Revenue 5 20 25 50 75Costs (26) (27) (17) (19) (20)Cashflow (21) (7) 8 31 55Cum (21) (28) (20) 11 66
Financial Analysis
3. Cash Flow analysis
When to use Project is expensive relative to firm size
Advantages Simple to use
Disadvantages Ignores time value of money
Financial Analysis
4. Net present value analysis
Definition Present value - $1 received today is more valuable than $1 a year from today, which is more valuable than $1 two years from today, etc.
NPV considers the time value of both the investments and cash flows
Let p = current amount, r = interest rate
Future amount in n periods (Fn) = p(1+r)n
p = Fn / (1+r)n
Example Q1 Q2 Q3 Q4 Q5Revenue 5 20 25 50 75r = .01NPV 4.95 19.61 24.26 48.05 71.36
Financial Analysis
4. Net present value analysis
When to use Payback period is long or cost of borrowing money is high
Advantages Can adjust interest rate to reflect greater risk in far future versus near future
Relatively simple to explain
Disadvantages Longer the time frame, more uncertain on what NPV is
Slightly more complex than other methods
Capital Budgeting
Objective
• Determine if a depreciable asset will provide a return that will meet or exceed the original investment in the asset's acquisition
Screening vs. Preference Decisions
• Screening - Look at one proposed project
• Preference - Select from among several alternatives
Capital Budgeting
Question:
• When do you consider intangible benefits in capital budgeting decisions?
Answer:
• When tangible costs exceed tangible benefits, look at intangible benefits and decide if they are worth the deficit amount
• When selecting from multiple alternatives that are ranked even (tie-breaker)
Financial Analysis
Describe a situation where a project may not meet minimum cost-benefit requirements and still be approved.
Financial Analysis
When is cost-benefit analysis done during the procurement process? Why is this the most desirable time to do it? 1. Pre-RFP
2. RFP
3. Proposal Submissions
4. Proposal Evaluations
5. Vendor Selection
6. ProcurementMethod
7. ROI Analysis
8. NegotiateContract
range of potential costs/benefits
preliminary cost/benefit analysis
in-depth cost/benefit analysis
update cost/benefit analysis
update cost/benefit analysis
update cost/benefit analysis
Topic Duration
• Last week’s quiz 5 minutes
• Recap and quiz on 45 minutes
– Procurement
– Financial analysis
• *** Break 10 minutes
• Core Exam Logistics 10 minutes
• Core Exam Review ???
Today’s agenda
Topic Duration
• Last week’s quiz 5 minutes
• Recap and quiz on 45 minutes
– Procurement
– Financial analysis
• *** Break 10 minutes
• Core Exam Logistics 10 minutes
• Core Exam Review ???
Today’s agenda
• Deadline for registration is . . . today!!!• Exam is June 17, 2003 beginning at 6pm• Exam lasts 75 minutes• Loop campus
– “Specific building and room locations will be posted on the CTI web site the day before the exam”
Core Knowledge Exam Logistics
• Tonight’s session being recorded• Recordings not available after 6/13, noon
COL Recordings
Part A
• Answer all 4 questions (mandatory)
• Taken from study guide topics:8. Procurement9. Outsourcing10. Financial Analysis
Core Knowledge Exam Questions
The Core Exam will have two parts:
Part B• Five pairs of questions• Answer three of the five pairs• Each half of a pair comes from a different topic• Questions taken from remaining study guide topics:
1. Major IT eras 2. IT Human Resources Management and Organizational Transformation3. Distributed IT Architecture and Infrastructure4. Network Management5. Operations Management6. End User Training7. Help Desk
Core Knowledge Exam Questions
The Core Exam will have two parts (cont.):
Anatomy of Core Knowledge Exam
A1.A2.A3.A4.
B1a.B1b.
B2a.B2b.
B3a.B3b.
B4a.B4b.
B5a.B5b.
Topics 8,9,10
Topics 1-7
Anatomy of Core Knowledge Exam
A1.A2.A3.A4.
B1a.B1b.
B2a.B2b.
B3a.B3b.
B4a.B4b.
B5a.B5b.
A1.A2.A3.A4.
Select 3 pairs
Anatomy of Core Knowledge Exam
A1.A2.A3.A4.
B1a.B1b.
B2a.B2b.
B3a.B3b.
B4a.B4b.
B5a.B5b.
A1.A2.A3.A4.
Select 3 pairs
B1aB1b
B4aB4b
B5aB5b
Topics 8,9,10
Topics 1-7
<= 9 topics10 questionsTotals
Anatomy of Test Bank
# DescriptionLecture Date(s)
# Questions in Test Bank
1 IT Eras 3-Apr 8
2 IT Human Resource Management
10-Apr 8
3 Distributed Architecture 17-Apr 8
4 Network Management 24-Apr 8
5 Operations Management 1-May 8
6 Organizational Transformation (BRP, ERP)End User Training
1-May8-May
8
7 Help Desk 8-May 8
8 Procurement 15-May29-May
16
9 Outsourcing 22-May 8
10 Financial Analysis 29-May 8
Topic Duration
• Last week’s quiz 5 minutes
• Recap and quiz on 45 minutes
– Procurement
– Financial analysis
• *** Break 10 minutes
• Core Exam Logistics 10 minutes
• Core Exam Review ???
Today’s agenda
End of slides