Competing with IT

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 The Role of Information Systems in Business Today

• How information systems are transforming business

– Increase in wireless technology use, Web sites
– Increased business use of Web 2.0 technologies
– Cloud computing, mobile digital platform allow more
distributed work, decision-making, and collaboration
• Globalization opportunities
– Internet has drastically reduced costs of operating on
global scale
– Presents both challenges and opportunities

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 The Role of Information Systems in Business Today

• In the emerging, fully digital firm

– Significant business relationships are digitally enabled
and mediated
– Core business processes are accomplished through
digital networks
– Key corporate assets are managed digitally
• Digital firms offer greater flexibility in organization
and management
– Time shifting, space shifting

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 The Role of Information Systems in Business Today

• Growing interdependence between ability to use

information technology and ability to implement
corporate strategies and achieve corporate goals
• Business firms invest heavily in information systems
to achieve six strategic business objectives:
1. Operational excellence
2. New products, services, and business models
3. Customer and supplier intimacy
4. Improved decision making
5. Competitive advantage
6. Survival
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 The Role of Information Systems in Business Today

• Operational excellence:
– Improvement of efficiency to attain higher
profitability
– Information systems, technology an
important tool in achieving greater
efficiency and productivity
– Walmart’s RetailLink system links suppliers
to stores for superior replenishment system

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 The Role of Information Systems in Business Today

• New products, services, and business

models:
– Business model: describes how company
produces, delivers, and sells product or service to
create wealth
– Information systems and technology a major
enabling tool for new products, services, business
models
• Examples: Apple’s iPod, iTunes, iPhone, iPad,
Google’s Android OS, and Netflix
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 The Role of Information Systems in Business Today

• Customer and supplier intimacy:

– Serving customers well leads to customers
returning, which raises revenues and profits
• Example: High-end hotels that use computers
to track customer preferences and use to
monitor and customize environment
– Intimacy with suppliers allows them to provide
vital inputs, which lowers costs
• Example: J.C.Penney’s information system
which links sales records to contract
manufacturer 7
 The Role of Information Systems in Business Today

• Improved decision making

– Without accurate information:
• Managers must use forecasts, best guesses, luck
• Leads to:
– Overproduction, underproduction of goods and services
– Misallocation of resources
– Poor response times
• Poor outcomes raise costs, lose customers
– Example: Verizon’s Web-based digital dashboard to
provide managers with real-time data on customer
complaints, network performance, line outages, etc.
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 The Role of Information Systems in Business Today

• Operational excellence:
– Improvement of efficiency to attain higher profitability
• New products, services, and business models:
– Enabled by technology
• Customer and supplier intimacy:
– Serving customers raises revenues and profits
– Better communication with suppliers lowers costs
• Improved decision making
– More accurate data leads to better decisions
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 The Role of Information Systems in Business Today

• Competitive advantage
– Delivering better performance
– Charging less for superior products
– Responding to customers and suppliers in real
time
– Examples: Apple, Walmart, UPS

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 The Role of Information Systems in Business Today

• Survival
– Information technologies as necessity of business
– May be:
• Industry-level changes, e.g. Citibank’s
introduction of ATMs
• Governmental regulations requiring record-
keeping
– Examples: Toxic Substances Control Act, Sarbanes-
Oxley Act
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 Types of Information Systems

• Transaction processing systems

– Serve operational managers and staff
– Perform and record daily routine transactions
necessary to conduct business
• Examples: sales order entry, payroll, shipping
– Allow managers to monitor status of operations
and relations with external environment
– Serve predefined, structured goals and decision
making
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 Types of Information Systems

A TPS for payroll processing

captures employee payment
transaction data (such as a
time card). System outputs
include online and hard-copy
reports for management and
employee paychecks.

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 Types of Information Systems

• Business intelligence
– Data and software tools for organizing and analyzing
data
– Used to help managers and users make improved
decisions
• Business intelligence systems
– Management information systems
– Decision support systems
– Executive support systems
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 Types of Information Systems

• Management information systems

– Serve middle management
– Provide reports on firm’s current
performance, based on data from TPS
– Provide answers to routine questions with
predefined procedure for answering them
– Typically have little analytic capability

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 Types of Information Systems

In the system illustrated by this diagram, three TPS supply summarized transaction data to the MIS reporting
system at the end of the time period. Managers gain access to the organizational data through the MIS, which
provides them with the appropriate reports.
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 Types of Information Systems

This report, showing summarized annual sales data, was produced by the MIS in Figure 2-3.

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 Types of Information Systems

• Decision support systems

– Serve middle management
– Support non-routine decision making
• Example: What is the impact on production schedule if
December sales doubled?
– May use external information as well TPS / MIS data
– Model driven DSS
• Voyage-estimating systems
– Data driven DSS
• Intrawest’s marketing analysis systems

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 Types of Information Systems

This DSS operates on a powerful PC. It is used daily by managers who must develop bids on shipping
contracts.
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 Types of Information Systems

• Executive support systems

– Support senior management
– Address non-routine decisions
• Requiring judgment, evaluation, and insight
– Incorporate data about external events (e.g. new tax
laws or competitors) as well as summarized
information from internal MIS and DSS
– Example: Digital dashboard with real-time view of
firm’s financial performance: working capital,
accounts receivable, accounts payable, cash flow, and
inventory
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Hardware

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Anatomy of a Computer System

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• Anatomy of a Computer System

• A computer system contains the following main parts:

• Central Processing Unit (CPU) or processor
• Main Memory or the primary storage
• Input devices
• Output devices
• Secondary storage or the mass storage devices

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• Anatomy of a Computer System (contd.)

• Central Processing Unit (CPU)

• Part of the computer which executers the program instructions.
• In a microcomputer, the CPU is on a single microprocessor chip within the system
cabinet.
• The system cabinet also houses disk drives, hard disks, circuit boards but these are
considered separate from the CPU.

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• Anatomy of a Computer System (contd.)

• Central Processing Unit (CPU) (contd.)

• The CPU comprises Control Unit, Arithmetic and Logical Unit and a set of high-speed
memory units called the registers.
• Control Unit
• Logical hub of the computer.
• Tells the computer system how to carry out any program’s instructions.
• Directs the movement of electronic signals between memory, which
temporarily holds data, instructions and processed information – and the
ALU.
• Arithmetic and Logical Unit (ALU)
• When the Control Unit encounters an arithmetic or logical operation, it
passes that instruction to the ALU.
• ALU performs two types of operations – arithmetic and logical. Arithmetic
operations are fundamental operations consisting of addition, subtraction,
multiplication and division. Logical operations consist of comparisons.

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• Anatomy of a Computer System (contd.)

• Central Processing Unit (CPU) (contd.)

• Registers
• The ALU includes a group of high speed memory locations built directly into
the CPU. These memory locations are called registers and are used to hold
data currently being processed. (eg. They hold 2 and 3 during say, a 2+3
calculation)
• The processors are sometimes referred by the size of their registers – 32 bit
processor, 64-bit processor, etc.
• Data and instructions do not go into either the ALU or the control unit.
• The ALU works on the data held in the registers acting on the instructions
which are also held there.
• Within registers, as soon as a particular instruction or piece of data is
finished with, it is immediately replaced by the next one and information
that results from the processing is returned to the main memory.

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• Anatomy of a Computer System (contd.)

• Central Processing Unit (CPU) (contd.)

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• Anatomy of a Computer System (contd.)

• Main Memory or the primary storage

• That part of the computer which holds data for processing, instructions for processing
the data (the program) and information (processed data.)
• Part of the contents is held only temporarily i.e. when you turn the machine off, the
contents are lost. (Like an electronic scratch pad inside the computer.)
• Primary or Main Memory is generally in the form of semiconductor chips. We also have
secondary storage (in form of disks, tapes, etc.)
• Two types – RAM (random access memory) and ROM (read only memory)

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• Anatomy of a Computer System (contd.)

• Main Memory or the primary storage (contd.)

• RAM (random access memory)
• Most widely used primary storage medium
• Volatile memory
• Read/write memory
• ROM (read only memory)
• Frequently used programs (eg. BIOS – Basic Input Output System) is burnt into
chips during manufacturing process
• Permanent storage
• Can be read, but not overwritten
• Called firmware

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• Anatomy of a Computer System (contd.)

• Secondary storage or the mass storage devices

• Magnetic disks
• Optical disks
• Magnetic tapes
• Flash drives

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• Anatomy of a Computer System (contd.)

• Secondary storage or the mass storage devices (contd.)

• Magnetic disks
• Fast access and high capacity
• Reasonable cost
• Floppy Disks (diskettes)
• Magnetic disk inside a plastic jacket
• Hard Disk Drives (hard drives)
• Magnetic disk, access arms, and read/write
heads in sealed module for stable environment
• Fixed or removable
• Capacity from several hundred MBs to
hundreds of GBs

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• Anatomy of a Computer System (contd.)

• Secondary storage or the mass storage devices (contd.)

• Magnetic tapes
• Tape reels, cassettes, and cartridges
• Used in robotic, automated drive assemblies
• Archival and backup storage
• Lower-cost storage solution

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• Anatomy of a Computer System (contd.)

• Secondary storage or the mass storage devices (contd.)

• Optical disks
• Data is read and written to by lasers
• Used in:
• Image processing
• Long-term storage of historical image files
• Storage of scanned documents
• Publishing medium
• Allows fast access to reference materials
• Catalogs, directories, and so on
• Interactive multimedia applications
• Video games, educational videos, and so on

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Major types of Optical disks
• Anatomy of a Computer System (contd.)

• Secondary storage or the mass storage devices (contd.)

• Flash drives
• Sometimes referred to as a jump drive
• Uses a small chips containing thousands of transistors
• Can store data for virtually unlimited periods without power
• Easily transported and highly durable
• Storage capacity in gigabytes
• Plugs into any USB port

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• Anatomy of a Computer System (contd.)

• Secondary storage or the mass storage devices (contd.)

• Storage Tradeoffs

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Direct and Sequential Access
• Direct or Random Access
• Directly store and retrieve data
• Each storage position has a unique address and can be accessed in the
same length of time
• Semiconductor memory chips, magnetic disks
• Sequential Access
• Data is stored and retrieved sequentially
• Must be accessed in sequence by searching through prior data
• Magnetic tape
 Input Technologies
• Keyboard
• Still most widely used input device
• Pointing Stick
• Small eraser-head device embedded in keyboard
• Cursor moves in the direction of the pressure placed on the stick

• Graphical User Interface (GUI)

• Icons, menus, windows, buttons, bars
• Selected with pointing devices
• Electronic Mouse
• Most popular pointing device
• Pressing mouse buttons initiates activity represented by the icon selected

• Trackball
• Stationary device, similar to mouse
• Roller ball moves cursor on screen
 Input Technologies (contd.)
• Touchpad
• Small, rectangular, touch-sensitive surface
• Usually on keyboard
• Cursor moves in direction your finger moves

• Touch Screen
• Use computer by touching screen
• Screen emits a grid of infrared beams, sound waves,
or electric current
• Grid is broken when screen is touched

• Pen-Based Computing
• Used in Tablet PCs and PDAs
• Pressure-sensitive layer, similar to touch screen, under
liquid crystal display screen
• Software digitizes handwriting, hand printing, and hand
drawing
 Input Technologies (contd.)
• Speech Recognition Systems
• Speech be the future of data entry
• Easiest, most natural means of human communication
• Speech recognition systems digitize, analyze, and classify speech and sound patterns
• Compares to a database of sound patterns in its vocabulary
• Passes recognized words to the application software
• Typically requires voice recognition training

• Optical Scanning
• Devices read text or graphics and convert them into digital input for computers
• Enables direct entry of data from source documents
• A document management library system
• Scans documents, then organizes and stores them for easy reference or retrieval
• Scanners
• Compact desktop models are popular for low cost and ease of use
• Larger, more expensive flatbed scanners are faster and provide high-resolution color scanning
• Optical Character Recognition (OCR)
• Software that reads characters and codes
• Used to real merchandise tags, sort mail, score tests
• Optical scanning wands read bar codes
 Other Input Technologies
• Magnetic Stripe
• Reads the magnetic stripe on credit cards
• Smart Cards
• Microprocessor chip and memory on credit card
• Digital Cameras
• Allows you to shoot, store, and download photos or full-motion video with
audio into the PC
• Images and audio can then be edited or enhanced
• Magnetic Ink Character Recognition (MICR)
• Used by banks to magnetically read checks and deposit slips
• Requires an iron oxide-based ink
• Reader-sorter equipment magnetizes the ink, then passes it under a reading
head to sense the signal
 Output Technologies
• Video Displays
• Cathode-ray tube (CRT)
• Liquid crystal displays (LCDs)
• Active matrix and dual scan
• Plasma displays
• Used in large TVs and flat-panel monitors
• Printed Output
• Inkjet printers spray ink on a page
• Laser printers use an electrostatic process similar to a photocopying machine
• Radio frequency identification (RFID)
• Use tiny tags with embedded microchips containing data
about an item and location, and antenna

• Tags transmit radio signals over short distances to special

RFID readers, which send data over network to computer for
processing

• Common uses:

• Automated toll-collection

• Tracking goods in a supply chain

Software

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• Types of Software

• Systems Software
• Includes the operating system and all the utilities that enable the computer to function.
• Application Software
• Includes programs that do real work for users eg spreadsheets, presentation software, etc

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• General Hardware and Software Trends

• Five major contemporary trends in software platform evolution

• Linux and Open Source Software
• Software for the web – HTML, XML, Java and Ajax
• Web Services and Service Oriented Architecture (SOA)
• Software outsourcing
• Cloud services

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• General Software Features and Trends (contd.)

• Linux and Open Source Software

• Open Source Software
• S/w produced by a community of several hundred thousand programmers around the world.
• Free and can be modified by users; works derived from the original code must also be free.
• Software can be redistributed by the user without additional licensing.
• Has demonstrated that it can produce high quality, commercially acceptable software.
Ex – Linux Operating System, Apache HTTP Web Server, Mozilla Firefox Web browser and
Oracle Open Office productivity suite.
• Linux
• Operating system related to Unix. Freely downloadable from the Internet; low cost versions
include support from vendors like Red Hat.
• Major force in LANs, Web servers, high performance computing work and server operating
system. Linux applications are embedded in cell phones, smartphones, netbooks, and
consumer electronics.
• Advantages for corporations: cost reduction, reliability, resilience and integration since Linux
works on all the major hardware platforms from mainframes to servers to clients.

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• General Software Features and Trends (contd.)

• Software for the Web

• Java
• Operating system independent, processor-independent, Object-oriented programming
language for the web.
• Java software is designed to run on any computer or computing device, regardless of the
specific microprocessor or operating system that the device uses.
• Code can be written once and can be used on any machine using Java Virtual Machine (JVM)
which interprets Java programming code for that machine.
• Java platform has migrated into cellular phones, smartphones, automobiles, music players,
game machines, set-top cable television systems.
• Java developers can create small applet programs that can be embedded in Web pages and
downloaded to run on a Web browser like Chrome, Internet Explorer, Firefox, etc.

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• General Software Features and Trends (contd.)

• Software for the Web (contd.)

• HTML
• Hypertext Markup Language.
• Describes how text, graphics, video, sound, etc are placed on a Web page.

• XML
• Extensible Markup Language.
• Foundation technology for Web services. More powerful and flexible than HTML.
• XML can perform presentation, communication and storage of data on the Web.
• XML allows web services to pass data from one process to another in a standard format –
making it possible for computers to manipulate, interpret, perform operations on data and
connect, interact with Web browsers, computer programs, software modules like ERP, etc
without human intervention.

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• General Software Features and Trends (contd.)

• Software for the Web (contd.)

• Ajax
• Asynchronous Java and XML
• Allows client and server to exchange small pieces of data behind the scene so that the entire
Web page need not be reloaded each time the user requests any small change.
• Example – zooming in on a map (without reloading the map), making error while filling a
form will allow you to reenter only that part of the form instead of complete form reloading.

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• General Software Features and Trends (contd.)

• Web Services and Service Oriented Architecture (SOA)

• Web services
• Refer to set of loosely coupled software components that exchange information with each
other using universal Web communication standards and languages.
• Can exchange information between two different systems regardless of operating systems or
programming languages on which the systems are based.
• Can be used to link disparate systems within a single company, and also to build open
standard Web-based applications linking systems of two different organizations.
• Service-oriented architecture (SOA)
• Instead of building monolithic applications for each department, SOA aims at building and
using stand-alone services that can be accessed separately.
• Functions are created as distinct units, or services, which can be combined in various
combinations, or reused during production of business applications.
• These services communicate or ‘talk’ with each other by passing data from one service to
another, or by coordinating an activity between two or more services.
• Basically, we are creating software in a granular or component manner so that common
functions can be used interchangeably by different departments internally and externally.
• Eg.: IBM WebSphere software platform, Microsoft .NET platform provide web service tools.

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• General Software Features and Trends (contd.)

• Web Services and Service Oriented Architecture (SOA) (contd.)

• Example for understanding

• Dollar Rent A Car uses Web

services to provide a
standard intermediate layer
of software to “talk” to
other companies’
information systems.
• Dollar Rent A Car can use this
set of Web services to link to
other companies’
information systems without
having to build a separate
link to each firm’s systems.
• Similar links and services are
found commonly on any
webpage or website of any
organization.
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• General Software Features and Trends (contd.)

• Software Outsourcing
• Today, many companies purchase or rent their software applications from external
sources. There are 3 major formats of software outsourcing:
1. Software packages and Enterprise Software
• Prewritten commercially available set of s/w programs which eliminate need for the firm to
write its own software programs for its functions like payroll processing or order handling.
• Companies like SAP, Oracle, PeopleSoft provide powerful ERP software to support nearly all
the business processes of a firm.
2. Software Outsourcing
• Companies enter into contracts with other companies, often in low-wage areas of the world,
to manage legacy applications or application development or testing etc.
• Countries like India earlier provided lower-level maintenance, data entry, call center
operations. However, more consulting and development is taking place these days at India
with IT becoming a major industry in India and fueling much part of its growth and GDP.

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• General Software Features and Trends (contd.)

• Software Outsourcing (contd.)

3. Cloud-based software services
• Instead of buying and installing software programs, companies subscribe to use these
software as a service over the Internet using their web browser, and pay either on
subscription or per-transaction basis. This is referred to as software as a service (SaaS.)
• Three different types of services are commonly delivered over cloud:
• Cloud infrastructure as a service: Customers use processing, storage, networking and
other computing resources from cloud service providers to run their information
systems. Users pay only for the amount of computing, storage capacity they use.
Examples – Amazon, Google provide storage, computing resources over cloud.
• Cloud platform as a service: Customers use infrastructure and programming tools
hosted by service provider to develop their own applications. Examples – IBM Smart
Business Application Development & Test Service, Salesforce.com allow users to create
applications, perform development, testing, etc on their servers.
• Cloud software as a service: Customers use software hosted by vendor on vendor’s
hardware and delivered over the network. Examples – Google Apps, Tableau,
Salesforce.com lease CRM, BI, Office and related software services over the Internet.

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• General Software Features and Trends (contd.)

• Software Outsourcing (contd.)

3. Cloud-based software services (contd.)
• Advantages:
• Cost saving: Since companies using cloud computing do not own the infrastructure,
they do not have to make large investments in their own hardware and software. They
can pay only for the amount of computing they actually use on subscription basis.

• Disadvantages:
• Security risks since responsibility for data storage and control is in the hands of the
provider.
• System reliability: Business can get impacted if the provider’s systems go down or
become unavailable for some time because of any glitch.
• Many companies have unique business processes which might not be translated well in
the cloud based model which typically provides general software for all.

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Developing Business/IT
Solutions
IS Development
• When the systems approach is applied to the
development of an information systems solution to
business problems, it is called information systems
development or application development
Systems Development Lifecycle (SDLC)
Systems Development Process
• Systems Investigation
• The first step in the systems development process
• May involve consideration of proposals generated by a
business/IT planning process
• Also includes the preliminary feasibility study of
proposed information system solutions
Systems Development Process
• Feasibility Studies: a preliminary study to
determine the
• Information needs of prospective users
• Resource requirements
• Costs
• Benefits
• Feasibility
• In some cases, a feasibility study is unnecessary
Operational Feasibility
• How well the proposed system will
• Support the business priorities of the organization
• Solve the identified problem
• Fit with the existing organizational structure
Economic Feasibility
• An assessment of
• Cost savings
• Increased revenue
• Decreased investment requirements
• Increased profits
• Cost/benefit analysis
Technical Feasibility
• Determine the following can meet the needs
of a proposed system and can be acquired or
developed in the required time
• Hardware
• Software
• Network
Human Factors Feasibility
• Assess the acceptance level of
• Employees
• Customers
• Suppliers
• Management support
• Determine the right people for the various new or
revised roles
Legal/Political Feasibility
• Assess
• Possible patent or copyright violations
• Software licensing for developer side only
• Governmental restrictions
• Changes to existing reporting structure
Systems Analysis
• An in-depth study of end user information needs
• It produces the functional requirements used as the
basis for the design of an information system
• It typically involves a detailed study of the
• Information needs of a company and end users
• Activities, resources, and products of one or more of the
information systems currently being used
• Information system capabilities required to meet the
information needs of business stakeholders
Organizational Analysis
• Study of the organization, including…
• Management structure
• People
• Business activities
• Environmental systems
• Current information systems
• Input, processing, output, storage, and control
Analysis of the Present System
• Before designing a new system, it is important
to study the system to be improved or
replaced
• Hardware and software
• Network
• People resources used to convert data resources
into information products
• System activities of input, processing, output,
storage, and control
Logical Analysis
• A logical model is a blueprint of the current system
• It displays what the current system does, without
regard to how it does it
• It allows an analyst to understand the processes,
functions, and data associated with a system without
getting bogged down with hardware
and software
Functional Requirements
• This step of systems analysis is one of the most
difficult
• Determine what type of information each business
activity requires
• Try to determine the information processing capabilities
required for each system activity
• The goal is to identify what should be done, not how to
do it
Systems Design
• Systems design focuses on three areas
Prototyping
• Prototyping is the rapid development and testing of
working models
• An interactive, iterative process used during
the design phase
• Makes development faster and easier, especially when
end user requirements are hard to define
• Has enlarged the role of business stakeholders
Prototyping Life Cycle
User Interface Design
• Focuses on supporting the interactions
between end users and their computer-based
applications
• Designers concentrate on the design of attractive
and efficient forms of user input and output
• Frequently a prototyping process
• Produces detailed design specifications for
information products, such as display screens
System Specifications
• Formalizing the design of
• User interface methods and products
• Database structures
• Processing procedures
• Control procedures
Implementing New Systems
• The systems implementation stage involves
• Hardware and software acquisition
• Software development
• Testing of programs and procedures
• Conversion of data resources
• Conversion alternatives
• Education/training of end users and
specialists who will operate the new system
Implementation Process
Evaluating Hardware, Software,
Services
• Establish minimum physical and performance characteristics
for all hardware and software
• Formalize these requirements in an RFP/RFP
• Send RFQ to appropriate vendors
• Evaluate bids when received
• All claims must be demonstrated
• Obtain recommendations from other users
• Search independent sources for evaluations
• Benchmark test programs and test data
Software Evaluation Factors
• Hardware evaluation factors apply to software, as
do these
• Quality
• Efficiency Software that is
slow, hard to
• Flexibility use, bug-filled,
• Security or poorly
documented is
• Connectivity
not a good
• Maintenance choice
• Documentation at any price
• Hardware
Evaluating IS Services
• Examples of IS services
• Developing a company website
• Installation or conversion of hardware/software
• Employee training
• Hardware maintenance
• System design and/or integration
• Contract programming
• Consulting services
Other Implementation Activities
• The keys to successful implementation of a new
business system
• Testing
• Data conversion
• Documentation
• Training
System Testing
• System testing may involve
• Testing and debugging software
• Testing website performance
• Testing new hardware
• Review of prototypes
Data Conversion
• Data conversion includes
• Converting data elements from the old database to the
new database
• Correcting data errors
• Filtering out unwanted data
• Consolidating data from several databases
• Organizing data into new data subsets
• Improperly organized and formatted data is a major
cause of implementation failures
Documentation
• User Documentation
• Sample data entry screens, forms, reports
• System operating instructions
• Systems Documentation
• Method of communication among those developing,
implementing, and maintaining a computer-based
system
• Detailed record of the system design
• Extremely important when diagnosing problems and
making system changes
Training
• End users must be trained to operate a new
business system or its implementation will fail
• May involve only activities, such as data entry,
or all aspects of system use
• Managers and end users must understand how
the new technology impacts business operations
• System training should be supplemented with
training related to
• Hardware devices
• Software packages
Major System Conversion
Strategies
Direct Conversion
• Direct conversion
• The simplest conversion strategy
• The most disruptive to the organization
• Sometimes referred to as the slam dunk or cold-turkey
strategy
• May be the only viable solution in cases of emergency
implementation or if the old and new system cannot
coexist
• Has the highest risk of failure
• Involves turning off the old system and turning on the
new one
Parallel Conversion
• Old and new systems are run
simultaneously until everyone is satisfied
that
• The new system functions correctly
• The old system is no longer needed
• Conversion to new system can be single
cutover or phased cutover
• Has the lowest risk, but the highest cost
• Can cost 4 times more than using the old
system
• Best choice where an automated system
is replacing a manual one
Pilot Conversion
• Scenarios best suited to a pilot conversion
• Multiple business locations
• Geographically diverse locations
• Advantages of single location conversion
• Can select a location that best represents the conditions
across the organization
• Less risky in terms of loss of time or delays in processing
• Can be evaluated and changed before further
installations
Phased Conversion
• A phased or gradual conversion
• Takes advantage of both the direct and parallel
approaches
• Minimizes the risks involved
• Allows the new system to be brought online
as logically ordered functional components
• Disadvantages
• Takes the most time
• Created the most disruption to the organization over
time
Post-Implementation Activities
• The single most costly activity
• Correcting errors or faults in the system
• Improving system performance
• Adapting the system to changes in the operating or
business environment
• Requires more programmers than does application
development
• May exist for years
Post-Implementation Review
• Ensures that the newly implemented system
meets the established business objectives
• Errors must be corrected by the maintenance
process
• Includes a periodic review/audit of the system as
well as continuous monitoring