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Chapter 3
Solving Problems
The Strategic
Management of
Information
Technology
Systems Approach
Input
Process
Output
Feedback and Control
Systems
Input
Process
Output
Control
Goal
Feedback
Strategic Leverage
Paradigm
Change
the
Game
Competitive
Position
Competitive
Position
Nature of Conflict;
Terms of
Competition
Strategic
Leverage
Objectives
Strategies
Tactics
Change
the
Game
Systems Development
Lifecycle
Obsolete Solution
Planning
Problem to be Solved
New, Related Problem or Requirement
Support
Analysis
New implementation Alternative or Requirement
Implementation
Error (bug)
Implemented
Solution
Design
Implementation
Acceptable
Solution
Statement
Problem
Understanding
and
Solution
Requirements
Systems Planning Elements

People
–

Data
–

–
Automated and Manual
Business and Information Applications
Networks
–
–

How it is captured, used, and stored
Activities
–

Users, Management, Information Specialists
Where data is stored and processed
How data is exchanged between different locations
Technology
–
hardware and software used
Information System
Building Block
Systems
Owners
Systems
Users
Systems
Designers
Systems
Builders
Differentiation versus Cost Leadership
T1
Cost
Differentiated
Player
Sustainable
Premium
Technology
Curve
Cost
Leader
Minimum or
Market-Required
Quality
Quality
Is Cost Leadership Sustainable?
T1
T2
Cost
Differentiated
Player
Sustainable
Premium
New
Technology
Curve
Cost
Leader
Old
Technology
Curve
Minimum or
Market-Required
Quality
Quality
Industry/Company
Relationships
Industry
Structure &
Competitive
Position
Freedom
of
Maneuver
Long-term
Objectives,
Strategic
Direction
Detailed
Strategies
and Tactics
Break-Even Point
Total Revenue
Revenue
and
Costs
Profit
Profit
Total Costs
Fixed
Costs
Fixed Costs
Break-Even Volume
Sales
Decision Trees
Probability
Decision
Point
Efforts to Categorize
the Unknown
Uncertainty
Complexity
Instability
Barriers to Entry Sources





Economies of Scale
Economies of Scope
Product Differentiation
Capital Requirements
Cost Disadvantages
–


Independent of Size
Distribution Channel Access
Government Policy
Four Generic Approaches
Win
Win/Win
Win
Lose
Win/Lose or
Cooperative
Equilibrium
Lose
Win/Lose or
Cooperative Equilibrium
Lose/Lose
Structure Defines the Industry War
Lose/Lose



Total Industry Profits are Very Low, Zero,
or Negative
Industry Revenues are Declining, or, at best,
steady
Product Technology is at or past its peak
Win/Win



Total Industry Revenues and Profits are
Growing Rapidly
Numerous Players of All Sizes
Products and Services are not Standardized
Win/Lose




Total Industry Revenues and/or Profits are
Constant or are Growing very Slowly
Significant Economies of Scale in
Production, Distribution, and/or Promotion
Number of Firms Participating in the
Industry is Limited and Stable
Individual Participants have, or can obtain,
Information Regarding the Relative
Positions of the Players
Structure Defines the Terms
of Competition

Wasting Resources
–

Precipitating Unwanted Warfare
–

generic advertising rather than focusing on
specific market segments
Causing a full-scale price war when only brand
repositioning was necessary
Failing to Anticipate and Adapt to Changes
–
–
Following historical patterns
Underspending on Advertising
Structure Defines Maneuver




Standard or Dominant Product Emerges
Distribution Channels Limit Firm’s Ability
to Determine which Channels to Select
Target and Market Niches Become More
Difficult to Defend
Substitutes Limit Price Increases which
Requires Increase in Advertising
Expenditure
Project Management



Set of Principles, Methods, Tools,
Techniques
For the Effective Management of ResultsOriented Work
Utilized in the Context of a Specific and
Unique Organizational Environment
Variables
Cost
Time
Risk
Goals


Critical Path/PERT Charting
Progress Presentation Reports
–



Clients and Management
Dependencies/Prerequisites/Linkages
Variance Analysis
Resource Assignments
MSProject Program Linkages

Suite: Lotus/Microsoft/WordPerfect
–
–
–
–
–
–
–
Spreadsheet
Presentation
word processing
Database
Notes
Flowcharting (AllClear or ABC)
Risk Analysis Tool
Project Management Issues







Learning Curve Requires Understandable
Training Program
Drown in Data Entry
Loose Perspective in Extent of Project
Captured
Management Commitment
Critical Mass
Required Rollups
Discipline in Monitoring/Using Plan
Project Management Terms

Schedule From:
–
–

Duration Type:
–
–

Project Start Date
Project Finish Date
Resource Driven
Fixed Duration
Constrain Task
–
Date
Project Management Terms

Priority
–
–
–

High
Medium
Low
Risk
–
–
–
High
Medium
Low
Project Management Terms

Relationship with Predecessor:
–
–
–
–
Finish-to-Start (FS)
Start-to-Start (SS)
Finish-to-Finish (FF)
Start-to-Finish (SF)
Project Management Terms

Tasks:
–
–
–
–
–
Noncritical
Critical
Milestone
Summary
Project Summary
MIS Risks





Creeping User Requirements
Excessive Schedule Pressure
Low Quality
Cost Overruns
Inadequate Configuration Controls
80%
65%
60%
55%
50%
Systems Software Risks





Long Schedule
Inadequate Cost Estimating
Excessive Paper Work
Error-prone Modules
Canceled Projects
70%
65%
60%
50%
35%
Commercial Software Risks





Inadequate User Documentation
Low User Satisfaction
Excessive Time to Market
Harmful Competitive Actions
Litigation Expenses
70%
55%
50%
45%
30%
Military Software Risks





Excessive Paperwork
Low Productivity
Long Schedules
Creeping User Requirements
Unused or Unusable Software
90%
85%
75%
70%
45%
Contract or Outsourced Risks





High Maintenance Costs
60%
Friction between Contractor and Client 50%
Creeping User Requirements
45%
Unanticipated Acceptance Criteria
30%
Legal Ownership of Software
20%
End-User Software Risks





Non-Transferable Applications
Hidden Errors
Unmaintainable Software
Redundant Applications
Legal Ownership of Software
–
Deliverables
80%
65%
60%
50%
20%
Risk Prevention and Control





Creeping User Requirements
Schedule Pressure, Long Schedules, and
Excessive Time to Market
Cost Overruns
Low Quality and Error-Prone Modules
High Maintenance Costs
Risk Factors Resistant to
Control





Excessive Paperwork
Inadequate User Documentation
Low User Satisfaction
Friction Between Clients and Contractors
Legal Issues and Litigation Expense
Serious Software Risks










Inadequate Metrics
Inadequate Measurement
Excessive Schedule Pressure
Management Malpractice
Inaccurate Cost Estimating
Silver Bullet Syndrome
Creeping User Requirements
Low Quality
Low Productivity
Canceled Projects
Risk Factors to Define







Definition
Severity
Frequency
Occurrence
Susceptibility and Resistance
Root Causes
Associated Problems
Risk Factors to Define







Cost Impact
Methods of Prevention
Methods of Control
Product Support
Consulting Support
Education Support
Publication Support
Risk Factors to Define


Periodical Support
Standards Support