Business Architecture and Transformation Flashcards
What is currently included in these flashcards?
(I’ll keep updating it)
- Lectures 1-6
-
Articles
- Main points of 1. Beyond strategic information systems: towards an IS capability (Peppard & Ward, 2004)
- Experiences in Strategic Information Systems Planning
- A methodology for business process redesign
- IT project management: Infamous failures, classic mistakes, and best practices.
- IT project managers’ construction of successful project management practice
- The hidden traps in decision making.
What is not included?
Any calculation/drawing BPMN stuff
Stages of development of planning systems
- Basic financial planning
- Forecast-based planning
- Externally oriented planning
- Strategic management
Definition of business strategy (Gluck, 1980)
A set of objectives and integrated set of actions aimed at securing a sustainable competitive advantage
Key questions for digital strategies [KPMG framework]
Four main application types of strategic systems:
- Share information via technology-based systems with customers and/or suppliers and change the natures of the relationship
- Produce more effective integration of the use of information in the organization’s value-adding processes
- Deliver new or enhanced products/services
- Augmented people’s cognitive processes in generating knowledge and insight from information.
Classification of the Strategic uses of IT: four types of strategic systems
- Share information via technology-based systems with customers/consumers and/or suppliers and change the nature of the relationship;
- Produce more effective integration of the use of informatio in the organization’s value-adding processes;
- Enable the organization to develop, produce, market and deliver new or enhanced products or services based on information;
-
Augment people’s cognitive processes in generating knowledge and
insight from information; they provide executives, management and
professionals with information to support the development, implementation and evaluation of strategies.
Consequences of having no IT strategy:
- IT investments are made that do not support business objectives
- Loss of control of IT, leading to individuals often striving to achieve incompatible objectives through IT.
- Systems are not integrated. This can also lead to duplication of effort and no coherent information.
- No means of setting priorities for IT project, leading to problems in resource allocations.
- Poor management information; it is either not available, or inconsistent, inaccurate or too slow.
- Technology strategy is incoherent and constrains options: inadequate infrastructure investments made.
- Problems caused by IT investments can become a sources of conflict between parts of the organization.
- Localized justification of investments can produce benefits that are actually counterproductive in the overall business context.
- Applications, on average, have a shorter than expected business life and require replacing more frequently than should be necessary, causing unnecessary business disruption.
Define strategy formulation
Process identifying alignment, innovation and, competitive impact options. What an organization wants to do How an organization can do it (but not when)
Strategy Maturity Model (Earl 1993)
List enablers and inhibitors of strategic alignment
Characteristics of Digital Disruption
A three-era model of evolving IT applications in organizations
Prime objectives in different IS/IT eras:
- data processing to improve operational efficiency by automating information-based processes;
- management information systems to increase management effectiveness by satisfying their information requirements for decision making;
- strategic information systems to improve competitiveness by changing the nature or conduct of business (i.e. IS/IT investments can be a source of competitive advantage).
Evolution:
• First, IT was used for automating, transaction costs (upper left corner on slide)
• Then management (middle of the table), satisfying information needs
• Now strategic information systems à affect the business strategy
o Example: Uber (platform)
The information systems management environment. Summary of different views of strategic information systems, their context and focus.
Success Factors in Strategic Information Systems
- External, not internal, focus: looking at customers, competitors, suppliers, even other industries and what is happening in the outside world – both business and social.
- Adding value, not cost reduction: ‘doing it better, not cheaper’ seems to be the maxim.
- Sharing the benefits: within the organization, with suppliers, customers, consumers and even competitors (on occasion!).
- Understanding customers and what they do with the product or service: how they obtain value from it, and the problems they may encounter in gaining that value.
- Business-driven innovation, not technology-driven: the pressures of the marketplace drove developments in most cases.
- Incremental development, not the total application vision turned into reality.
- Information driven development: using the information gained from the systems to develop the business.
- Monetizing information: we have always known that information has, or should have, a value, although it is difficult to place an exact price on it usually.
The application portfolio: understanding and classifying IT investments (McFarlan 1984)
Portfolio Matrix for IT Strategy Formulation
- You can have more traditional strategies (e.g. traditional company that wants to improve processes and uses IT to do this).
- Backbone strategy: strategy is central, but the company relies really heavily on the strategy
- Opportunistic strategy: you have different areas in a company where departments are working on the same stuff, opportunistic strategy wants to show you can have short-term gain in improving the system. It’s not really central and not really the core of the business (e.g. Volkswagen that is trying to improve customer satisfaction through marketing/engineering)
- Complex strategy: lots of activities going on
The relationship between business, IS, and IT strategies (Earl 1987)
The strategic alignment model (SAM) (Henderson and
Venkatraman 1993). Four domains of strategic choice:
The Strategic Alignment Maturity Model
IS capabilities: External view - dynamic responses to environment
The duality of ICT (communication technology) refers to the fact that it redefines the business environment, but it’s also influenced by the business environment.What you do in the duality of ICT part, influences your competitors. These competitors may also influence your strategy. Markets technology is at a fast pace.
IS capabilities: Internal view - dynamic responses to environment
What you do in the duality of ICT part, influences your competitors. These competitors may also influence your strategy. Markets technology is at a fast pace. Dynamic capabilities means that a company has to build up capabilities that help adjust to fast-changing environment. It’s more a cultural thing that you have to adapt very fast and have a proper mindset. This refers to the internal view.
Define project management
A temporary endeavour (fixed start and end) undertaken to create a unique product or service
Define project charter
A project charter is a central document that defines the fundamental information about a project and is used to authorize it.
Define tangible benefits
Items that can be measured in dollars and with certainty.
For example, reduced personnel expenses.
Categories of tangible benefits
- Cost reduction and avoidance
- Error reduction
- Increased flexibility, transperency
- Incresed speed of activity
- Improvement of management planning and control
- Opening new markets and increasing sales opportunities
Define intangible benefits
Intangible benefits are benefits derived from the creation of an information system that cannot be easily measured in dollars or with certainty.
Examples:
• May have direct organizational benefits, such as the improvement of employee morale
• May have broader societal implications, such as the reduction of
waste creation or resource consumption
Define tangible costs
Tangible cost: a cost associated with an information system that can be measured in dollars and with certainty
IS development tangible costs include:
• Hardware costs
• Labor costs, or
• Operational costs, including employee training and building renovations.
Define intangible cost
Intangible cost: a cost associated with an information system that cannot be easily measured in terms of dollars or with certainty
Intangible costs can include:
• Loss of customer goodwill,
• Employee morale, or
• Operational inefficiency.
Define one-time cost
One-time cost: a cost associated with project start-up and development or system start-up
These costs encompass activities such as:
• Systems development,
• New hardware and software purchases,
• User training,
• Site preparation, and
• Data or system conversion.
Define recurring costs
Recurring cost: a cost resulting from the ongoing evolution and use of a system
Examples of these costs include:
• Application software maintenance
• Incremental data storage expenses
• Incremental communications
• New software and hardware leases, and
• Supplies and other expenses (i.e., paper, forms, data center personnel).
Define fixed and variable costs
• Fixed costs are billed or incurred at a regular interval and usually at a fixed rate.
Example: facility lease payment
• Variable costs are items that vary in relation to usage.
Example: long-distance charges
List 6 criteria to assess project feasibilty
- Economic feasibility
- Technical feasibility: a process of assessing the development organization’s ability to construct a proposed system. In-house or outsourcing?
- Operational: Does the proposed system solve problems or take advantage of opportunities?
- Scheduling: Can the project time frame and completion dates meet organizational deadlines?
- Legal and Contractual: What are the legal and contractual ramifications of the proposed system development project?
- Political: How do key stakeholders view the proposed system?
Questions to ask while developing communication plan
- Who are stakeholders?
- What information does each stakeholder need?
- When should information be produced?
- What are sources of information?
- Who will collect, store and validate info?
- Who will organize and document info?
- Who is the contact person for each stakeholder?
- What is the appropriate/best format for info?
- What communication medium should be used?
Time and Scope analysis tools
- Work Breakdown Structure
- Network Diagrams
- PERT Calculations
- Critical Path Scheduling
- Gantt Charts
Work Breakdown structure
- List tasks required to complete the project
- Identify their dependencies
- PMBOK 5: ”A hierarchical decomposition of the total scope of work to be carried out by the project team to accomplish the project objectives and create the required deliverables.”
Evolution of Strategic Management in Organizations
Questions to consider when formulating a business strategy
How to gain an advantage? Micheal Porter’s three generic strategies
Skills and Requirements for Porter’s generic strategies (Cost leadership & Differentiation)
Product life cycle with information and systems focus
Growth-share Matrix
Portfolio Matrices
The ‘Ansoff’ Matrix
The Customer Matrix
Capability-Based Strategies to Implement RBV
Five Steps to Asset Management
- Determine whether the current basis of competitive advantage is operational excellence, customer intimacy or product/service leadership
- Identify both industry entry and organizational strategic assets.
-
Assess the extent to which the strategic assets are creating advantage
(valuable and/or rare) or helping sustain it (inimitable and/or nonsubstitutable). - Identify gaps between the existing assets, resources or capabilities and those required to succeed in all three dimensions of competence.
- Based on where and how the business intends to compete, the business model and value proposition, identify the priorities for additional or improved assets/resources/capabilities required and how they might be obtained or developed.
Model of the IS capability
Three main organizing levels:
- The resource level denotes the resource components that are the key ingredients of the IS competencies**
- The organizing level is concerned with how these resources are mobilized and marshaled via structures, processes and roles to create IS competencies.
- Only at the enterprise level the capability actually manifests itself and is ultimately recognized in the performance of the organization.
Role is a result of organizational, social and personal demands.
Structure is the systematic arrangement of people, departments and other subsystems.
The realities of strategy formation and formulation and implementation
Why in IS/IT strategy process strategy is not the same as planning?
The Strategy Maturity Model by Earl -> increasing organizational maturity with respect to IS planning
Shadow IT
Bring Your Own Device
It refers to being allowed to use one’s personally owned device, rather than being required to use an officially provided device.
Pros and cons:
- Security
- Legal issues
- Privacy
+Cheaper
+People like their own devices
Blackstone allows for their employees to use their own devices as long as it is Apple.
Enablers and inhibitors of strategic business-IT alignment
4 McKinsey success factors for IT projects
External pace & degree of change require responses
Initiating the Strategy Cycle — Key Questions to be Asked
- What is the main reason for planning?
- What are objectives to be met?
- What are the deliverables?
- What (negative) aspects affect the outcome?
- What is the scope to the IT strategy?
- How will IT strategy be integrated business strategy?
- What tools will achieve best results?
- Who should be involved?
- How long will the process take?
- What will it cost?
- How should the process be steered?
Assessing the Current Organizational Environment
Setting Objectives for IT/IS Strategy
- Identify current and future digital technologies
- Equip IT organization to be responsive
- Determine polices for information resources (creation, control, security, accessibility)
- Determine an effective organizational structure and the role of IT function
- Build an effective IS architecture and IT infrastructure
- Identify capabilities and competences required to implement the strategy
- Ensure that strategy is externally focused
IS Strategy at Unit & Corporate Levels
Inputs of IT Strategy Formulation
Framework for IS/IT strategy formulation and planning process
IS/IT Strategy Team Composition: Executive Team & Executive Sponsor
Executive Team
• broad knowledge of the business and its organizational objectives, management styles, culture, processes and people;
• good communication skills;
• ability and authority to make and implement plans and decisions that may affect the whole organization;
• respect of and staff;
• an interest in areas other than their own and an ability to analyse objectively;
• experience of IS/IT strategy formulation and planning in at least some of the team.
Executive Sponsor
• chairing the steering committee and approving the budget and plan for any IS/IT proposals;
• assuring management participation and commitment, through active backing and allocation of the right resources;
• representing the interests of the team;
• heading the ‘marketing’ effort (which should not be underestimated);
• acting as the focal point for decisions about the scope, Terms of Reference (TOR) and conduct of the work.
Techniques used in determining the IS ‘demand’
- PESTEL analysis
- Critical Success Factors
- Key Performance Indicators
- Balanced Scorecard
- SWOT analysis
- Dimensions of competence
- Business porfilio and competitive strategy analysis
- Value chain/network analysis (external and internal)
- Business process analysis/process re-engineering
- Product and customer life cycles/customer journey
- Business model and value proposition
- Organizational modelling
- Business modelling - information analysis techniques
- Current application portfolio evaluation
- Technology assessment and IS/IT infrastructure review
A Structure and Content List for the IS Strategy
- Purpose of IS strategy
- Overview of Business Strategy
- The arguments for new digital opportunities, critical improvement areas
- Summary of opportunities/problem issues
- Review of current application portfolio
- Future application portfolio
- Issues arising from the IS Strategy
The IT strategy addresses the following supply factors:
- Organize IS/IT activities, manage people, maintain and develop capabilities
- Manage information resources, provide information, applications, and services
- Procurement, contracting, outsourcing, and supplier selection
- Project and applicationdevelopment
- Prepare migration plans
Issues to be Addressed in the IS/IT Management Strategy
- Scope and rationale: Reasons for policies it covers
- Formal organization and resource structures: Allocation of responsibilities and authority for IS/IT decisions (roles of steering and planning committees)
- Investment approval and prioritisation policies: Rules and practices aligned to different segments of the application portfolio (strategic, key operational, …)
- Vendor and supplier policies: Relationship with vendors, parameters that guide selection
- HR policies: Development and education of IS/IT and business specialists.
- IS/IT accounting policies: Policies for the costing of, or charging for, IS/IT resources and services
Core Elements of a Business Strategy (the pyramid)
What are the types of models that are used to map out the business processes, activities and key entities?
Types of Models
- High-level process maps
- Process flow models (Business Process Model and Notation, BPMN)
- Hierarchical activity models (Activity diagram)
- Entity-relationship models (ERM)
- Data flow diagrams (DFDs)
- Activity/Entity matrices
What are the benefits of business process modelling?
Benefits of Model
• Understand what is happening in the organization
• Illustrate both IT and business audiences
• Review organisational structures
• Highlight critical issues
• Map current applications against the processes theysupport
Matrix to decide how much standardization is needed (standardization vs. flexibility)
Four Types of Operating Models (Process Standardization vs. Information Integration)
- Diversification: GE
- Coordination: Banks and consultancies
- Replication: McDonald’s
- Unification: Amazon
A Technique for Organizational Modelling to Identify IT Needs:
The organizational model: environment and culture (Kotter 1978).
Define IT Governance
Conceptual level - a subset discipline of corporate governance, focused on IT and its performance.
Operational level - a formal framework (or process) that provides a structure to control and direct and enterprise in achieving its goals by adding value while assessing and balancing the risk versus return over IT and its processes.
Why do we need IT governance?
- IT governance helps leadership to:
- manage IT investments, projects and resources in an effort to review opportunities,
- reduce redundancy across IT environment,
- drive costs savings.
- IT governance enables leadership to:
- make better strategic decisions
- procactively manage and evaluate future investments as a group.
- IT governance offers a formula for success.
Define domains of IT governance
- Strategic alignment
- Performance management
- Resource management
- Risk management
- Value delivery
IT governance domain: Strategic Alignment
- IT investment is aligned with strategic objectives
- IT operations are aligned with enterprise operations
- IT strategy supports enterprise strategy
- Better aligned than competitors
IT governance domain: IT Value Delivery
- Deliverables meet the requirements
- Deliverables provide appropriate quality
- Deliverables are on-time
- Deliverables are within-budget
IT governance domain: Risk Management
- Acknowledge risk and monitoring risk
- Implement risk controls
- Share risk with partners or transder to insuarance coverage
IT governance domain: IT Resource Management
- Prioritize existing IT services to support business operations
- Manage the life cycle of all IT related resources (hardware, software)
- Optimize IT resources strategically
- Oversee and monitor both internal and oursourced IT services
IT governance domain: IT Performance Management
- Define clear goals and good measures to reflect the business impact of IT goals
COBIT vs. ITIL
COBIT - Control Objectives for Information & related Technology
ITIL - Information Technology Infrastructure Library
COBIT
- It tells you what you should be doing and why, and it allows managers to bridge the gap between control requirements, technical issues and business risks.
- Antibiotic
ITIL
- It tells you how it should be done
- Aspirin
Personal note: COBIT focuses more on the strategic side of the IT so how IT processes support the business requirements, while ITIL it is just a framework how to improve IT service (for example implementing ticket system for IT issues in large companies)
COBIT IT Governance Framework
Three-level structure (to do what)
-
Business requirements
- Unique for each firm
-
IT resources
- Applications
- Information
- Infrastructure
- People
-
IT processes
- Domains
- Processes
- Acitivities
Four domains (what to do)
- PO: Plan and Organize
- AI: Acquire and Implement
- DS: Deliver and Support
- ME: Monitor and Evaluate
What is in the COBIT?
- Framework: Organize and categorize IT governance objectives and good practices by IT domains, and processes before associating them with their respective business requirements.
- Process descriptions: A reference process model and common language for everyone in an enterprise.
- Control objectives: Use this complete set of high-level requirements for effective control of each IT process.
- Management guidelines: Assign responsibility, agree on objectives, measure performance, and illustrate interrelationships with other processes.
- Maturity model: Assess maturity and capability per process and helps to address gaps.
ITIL IT Governance Framework
- A collection of books
- A set of detailed practices for IT service management that focuses on aligning IT services with the needs of business
- A framework that focuses on and enables IT services to be managed across their lifecycle (changes, events and incidents)
- For example: knowledge management implementation
What are the 5 main components?
- Service Strategy
- Match and cover the organization structure and inherent needs
- Service Design
- Design based on the strategy to meet the requirements
- Service Transition
- Mitigate change risk (change management)
- Service Operation
- Assure daily operation by delivering support tasks
-
Continuous Service Improvement
- Check KPIs and optimize the performance
What is a case study?
- A research methodology commonly used in social sciences
- A descriptive and exploratory analysis of a persona, group or even
- An in-depth investigation of a phenomenon within real-life context
- Single or multiple case studes.
The Business Operating Model: Processes, Activities and Key Entities
These models show:
• Business processes — interlinked activities that deliver specific outputs
• Activities — elements of business processes
•Key entities — people, objects, events
Types of Models
- High-level processmaps
- Process flow models (Business Process Model and Notation, BPMN)
- Hierarchical activity models (Activity diagram)
- Entity-relationship models (ERM)
- Data flow diagrams (DFDs)
- Activity/Entity matrices
Benefits of Model
• Understand what is happening in the organization
• Illustrate both IT and business audiences
• Review organisational structures
• Highlight critical issues
• Map current applications against the processes they support
Standardization vs. local flexibility
Other questions to ask:
- What are the core processes and systems for the company?
- Are there compelling business reasons why some processes or systems should be standardized (e.g. global customers, market forces, or regulation)?
• Will local market conditions and regulations allow these processes and systems to be standardized across the different business units?
Information integration vs. process standardization matrix
Deliverables of a current application portfolio assessment
- Categorization in terms of application portfolio segments
- Assessment of coverage and contribution of applications to business
- Extent to which the systems integrate
- Assessment of applications’ effectiveness
- Assessment of risk of failure of applications
- Duplication of applications
- Differences between current portfolio and required architecture
How to assess the IT unit? - Assets, Resources and Processes
- Size, structure, and relationship to other business units
- Role of the CIO at organisational level
- Governance structures
- IT assets of organization
- Supplier processes
- People resources
- Budgets for IS/IT investments
How to measure IT service quality? - SERVQUAL
SERVQUAL Dimensions
Tangibles: Physical facilities, equipment, and appearance of personal
Reliability: Ability to perform the promised service dependable and accurately
Responsiveness: Willingness to help customers and provide prompt service
Assurance: Knowledge and courtesy of employees and their ability to inspire trust and confidence.
Empathy: Caring, individualised attention the service provider gives its customers.
DIKAR Model
Balanced Scorecard
Basic Process for Critical Success Factor Analysis
Consolidating BSC and CSF Analysis
Importance vs. Performance Matrix
Two approaches for redesigning processes
- Systematic approach - Understanding existing processes and identify improvements (better, cheaper, faster, more reliable), remove non-value adding activities
- Clean sheet approach - rethink anew
How to identify the core processes?
The business process diamond
Areas of process improvements to focus on for systematic process redesing
Functions of working memory
- Operates over a few seconds
- Temporary storage
- Manipulates information
- Focuses attention
Properties of working memory
- Working memory operates in a very short timespan - in matter of seconds.
- Working memory is used to teporarily store information for immediate usage, whereas long-term memory is used for permanent storage.
- Working memory is also used to manipulate information it stores.
- Working memory focuses your attention on one thing.
The Dual System/Process Theory
According to Kahneman we think in two systems:
-
System 1 (95%) - intuition & instinct
- Unconscious, fast, associative, automatic pilot
-
System 2 (5%) - rational thinking
- Takes effort, slow, logical, lazy, indecisive
Explain bounded rationality and how it relates to IT decision making
- Bounded rationality suggests that we opt to satisfice rather than maximise
- We either:
- do not have sufficient information to make fully informed decisions,
- it is too complex
- we don’t have enough processing (brain) power.
- We use rules of thumb (heuristics) when making decisions
Examples of bounded rationality in IT context:
- Bewildering range of software solutions
- Many people don’t understand complex systems
- Search costs
- Reliance on rules of thumb
Name biases on reference points
- Anchoring
- Attraction Effect
- Center-Stage Effect
- Default / Status Quo
- Endowment Effect
- Framing
- Scarcity
- Sunk Cost Fallacy
Explain default/status quo bias
- We prefer to carry on behaving as we have always done
- Repeat choices often become automatic — habitual — because default choices don’t involve much mental effort (System 1)
- To change our behaviour may require compelling incentives
- Examples:
- Lyft uses default tipping
- Default (monthly) donations
- Organ donations (opt out policy)
- Retirement saving increase when provided with default plans
Explain endownment effect and relate it to IT context
- We value our possessions more highly than the possessions of others
- We assign higher value to a product once we own it
- Examples:
- Free trails
- Haptic Imagery
- Money-back guarantee
- Reluctance to return goods once you’ve purchased them
- Apple’s showroom lets visitors touch and use all the products
- IKEA augments reality to place products in users’ living rooms
Explain endownment effect with relation to prospect theory
We ‘value’ losses higher than respective gains.
Explain framing and how it relates to IT context
- We decide on options based on whether the options are presented with positive or negative connotations; e.g. as a loss or as a gain
- We tend to avoid risk within a positive frame is presented but seek risks within a negative frame
- Examples:
- Message framing influences our decisions
- We seek risk when facing losses
- Losses loom larger than gains
Explain scarcity
We want goods more that are scarce
Explain sunk cost fallacy and relate it to IT context
- It occurs when we base our decisions on the costs that already have been committed and cannot be recovered.
- We continue investing despite of negative outcomes (escallation of commitment).
- Examples:
- IT software projects
- Prestigious project (Concorde fail)
- “Too expensive to fail”
Regression to the mean (wrt sports)
When athleates are featured on the cover, they are at one of the peaks of their career. Thus, it is logical that their performance will drop as performance fluctuates (for anyone).
People don’t really accept randomness.
Explain outcome bias and relate it to IT context
- We have the tendency to judge past decisions (of someone else) by its ultimate outcome instead of based on the quality of the decision at the time it was made
- The actual outcome of the decision will often be determined by chance
- People whose judgments (about others decisions) are influenced by outcome bias are seemingly holding decision makers responsible for events beyond their control
- Examples:
- Incentives decrease performance
- Punishment increases performance
- People ignore factors that led to decision
- People ignore the decision processes
Explain Gambler’s Fallacy or Hot Hand and relate it to IT context
- Hot Hand Fallacy: We belief that successful outcomes lead to further successful outcomes
- Gambler’s Fallacy: We believe that if something happens more frequently than normal during a given period, it will happen less frequently in the future
- Examples:
- Investors
- Betting industry
- Company success
Learning objective session 6: Understand the factors that typically influence how we make a decision
- Our working memory is very limited;
- We only use System 2 thinking 5% of the time
- Our rationality is bounded
- Not enough time
- Too complex
- Not enough processing capacity
- We’re too tired
Learning objective session 6: Explain common cognitive biases related to IT decision making
Reference point biases:
- Anchoring
- Attraction Effect
- Center-Stage Effect
- Default / Status Quo
- Endowment Effect
- Framing
- Scarcity
- Sunk Cost Fallacy
Regression and Base Rate fallacies:
• Regression to the mean
• Insensitivity to sample size
• Outcome bias
• Gambler’s Fallacy
• Hot Hand
• Base Rate Fallacy
• Availability
Learning objective session 6: Learn to analyze human decision making in IT environments
Learning objective session 6: Improve your own decisions by emphasizing good decision practices and avoiding common pitfalls
*
Learning objective session 6: List and describe various methods to counter cognitive biases
- Weighted Decision Matrix
- Maximum Difference Scalling
- Decision Trees?
Learning objective session 6: Perform a decision analysis using the Pugh Matrix
Define anchoring and relate it to IT context
- Value is often set by anchors which we then use as mental reference points
- Some anchors establish in our mind a low price, while other a high price
- Examples:
- “Big Price Drop” campaigns by online vendors (“Black Friday”)
- Recommender system’s rating influences preference
- Starting prices in 3-tiered advertising
Anchoring bias in IT context:
- Pricing new products
- Presenting the ‘old’ price to make new one look like a good deal
- Product rating influence
Explain attraction effect
We tend to have a change in preference between two options when presented with a third option that is asymmetrically dominated
Explain center-stage effect
We tend to to choose options in the middle of a choice set.
Explain base rate fallacy and relate it to IT context
- If presented with related base rate information (i.e. generic, general information) and specific information (information pertaining only to a certain case), our mind tends to ignore the base rate.
- Instead, we are easily convinced by an attractive story that matches our beliefs (similarity)
- Examples:
- Facial recognition
- Fraud detection
Explain availability bias and relate it to IT context
- We judge the likelihood of an event
- by the ease with with examples come easily to mind,
- by personal experience,
- by intensity of experience,
- by vividness of memory, or
- by frequency
- We are poor at risk assessment — we often overestimate the risk of infrequent events
- Examples:
- Shark attacks
- Plane crashes
- Investors buy stock after hearing about them in the news
Name common pitfalls which relate to regression and base rate fallacy
- Regression to the mean
- Insensitivity to sample size
- Outcome bias
- Gambler’s Fallacy
- Hot Hand
- Base Rate Fallacy
- Availability
List 3 ways in which you can determine decision weights
- Ignore all weights
- Use judgements: model of the judges
- Use data: regression models
Explain the procedure of the Decision Matrix / Pugh Matrix
Explain the Difference Scaling (MaxDiff) procedure
Sucessful IT Project Managers exhibit nine skills:
- client management;
- communication;
- general management;
- leadership;
- personal integrity;
- planning and control;
- problem solving;
- systems development;
- team development.
List 4 IT Project Manager archetypes
- General Manager;
- Problem Solver;
- Client Representative;
- Balanced Manager.
Explain planning and control skill of an successful IT PM
The planning and control skill category involves planning, monitoring and controlling project tasks to ensure that the project is completed on time and within the budget.
Explain general management skill of an successful IT PM
The general management skill category encompasses business and interpersonal skills required to appropriately manage themselves and others. Both of the previous studies also highlight the importance of general management skills; examples of these skills include the ability to handle troublesome situations, show empathy and delegate authority. The ideal IT PMs knew how to negotiate, remained flexible and possessed good interpersonal skills that allowed them to get along well with others. Another part of managing others involves prioritizing tasks, assigning resources and delegating
to others.
Explain leadership skill of a successful IT PM
In the leadership category, we grouped skills related to the ability to form and communicate a message about the future direction of the project in a way that garners enthusiasm and commitment from others.
Explain communication skill of a successful IT PM
Communication skills refer to the ability of the IT PMs to effectively speak, write and listen to secure resources, enhance coordination, and ensure that work is completed.
- The ideal IT PM knows how to communicate both with project team members and senior management.
- IT PMs must be careful to listen to what others say and be responsive.
- IT PMs may also need to interact with others groups within their organization to promote cooperation across functional silos.
- The ideal IT PMs also make use of their extensive network of contacts to help them find solutions to problems.
Explain team development skill of a successful IT PM
The IT PM with effective team development skills has the ability to create a productive team environment for those working on the project while demonstrating concern for their personal and professional growth.+
- The ideal IT PM is aware of positive ways of motivating and inspiring team members, which could involve team-building exercises.
- When assigning tasks to individuals, the ideal IT PM is cognizant of
the individual’s current skill level and whether additional training or mentoring might be required for the person to complete the assigned task
Explain client management skill of a successful IT PM
Client management skills involve the IT PM’s ability to successfully relate to clients during all phases of the project.
- IT PMs need to understand the client’s business environment enough to be able to consult with them and solve the client’s problems
- Oftentimes, the IT PM needs to be able to look beyond the formally stated requirements.
Explain sytem development skill of a successful IT PM
The systems development skill category refers to the ability to understand and manage the technical aspects of developing complex, technical systems while controlling for quality.
- The ideal IT PM understands the big picture of the system and how tasks are related. By contrast, the incompetent IT PM is too detail oriented and does not have sufficient understanding of the overall goal and complexity of the system to make good decisions.
Explain problem solving skill of a successful IT PM
Problem solving skills involve the ability of the IT PM to address problems efficiently and effectively.
- Competent IT PMs must proactively address problems. They must know how to analyze the root causes of problems and be willing to take responsibility for any problems that occur.
- Successful IT PMs have a high level of awareness about potential issues. When presented with issues, they gather information about the problem and use their analytical abilities to get to the root of the problem.
Explain personal integrity skill of a successful IT PM
The IT PM who demonstrates personal integrity acts in a manner consistent with high ethical standards as opposed to self-interest.
- Incompetent PMs are often more concerned about their own career advancement than the success of the project. To that end, they would consider dishonesty and political manoeuvers to be acceptable techniques.
Describe General Manager as IT PM archetype and name the distinguishing factors
The five dominant skill categories that clustered to represent the GM archetype are communication, general management, planning and control, team development, and leadership.
How is GM different from other IT PM archetypes?
- The GM expresses little concern for technical competence as represented by the systems development and problem solving skill categories
- Personal integrity is a more salient characteristic of the GM archetype
Describe Problem Solver as IT PM archetype and name the distinguishing factors
According to the PS archetype, the qualities of ideal IT PMs include competency in planning and control, leadership, team development, systems development and problem solving.
How is PS different from other IT PM archetypes?
- the importance of managing issues
- the importance placed on technical competence
Describe Client Representative as IT PM archetype and name the distinguishing factors
According to the CR archetype, the qualities of ideal IT PMs include competency in planning and control, communication, general management, systems development and client management.
How is CR different from other IT PM archetypes?
- External focus: emphasis on managing the relationships with the client rather than leading and managing others internally.
Describe Balanced Manager as IT PM archetype and name the distinguishing factors
The balanced view is one that suggests that successful IT PMs need to possess
and draw upon virtually all of the skill categories.
Explain the process of Process Analysis and Design Methodology (PADM) framework
-
Process definition
-
This phase involves establishing the objectives of a given process, a definition of its boundaries and interfaces, its main inputs and outputs, those departments that are involved in executing the
process, those ‘customers’ that benefit from it (inside and outside the company) and those that provide input (suppliers).
-
This phase involves establishing the objectives of a given process, a definition of its boundaries and interfaces, its main inputs and outputs, those departments that are involved in executing the
-
Baseline process capture and representation
- Modelling involves constructing a graphical representation of the process.
- Process modelling is a complex hermeneutic process
which involves talking to users, trying to understand their point of view, drawing pictures, checking, correcting, examining preconceptions and so on. - Effective models:
- Role activity diagram (RAD)
- Object flow diagram
- Activity diagram
-
Process evaluation
- The general aim of this stage is to look for weaknesses and problems in the process.
-
There are two sources of inefficiencies:
- Social - low job satisfaction, poor motivation
- Technical
- Ineffectiveness - fails to satisfy customer requirements. Symptoms of ineffectiveness are known as ‘variances’. Typical variances could include: customer complaints, late or incomplete output, and the need to repeat work.
- Inefficiency - the process is wasteful of resources, although it may meet its operational goals.
-
Target process design
-
You can either:
- Improve exhisting processes
- Design new processes ab initio
- Two types of process redesign:
- Technical redesign involves:
- streamlining and rationalizing the process,
- aiming at reducing complexity,
- minimizing ‘non-value adding’ activity,
- and eliminating or improving the control of variances.
- Social redesign involves:
- change to jobs to increase motivation, reduce stress, improve performance by empowerment
- Technical redesign involves:
-
You can either:
For case study examples of application see the article
An example of Role Activity Diagram (RAD)
An example role activity diagram (RAD) from the TelServ case study. The RAD
depicts part of the exception handling process for suspect bills.
- The key idea in the RAD formalism is that of a role, which refers to a logical group of related activities. Two separate are shown in the diagram: the billing clerk and the billing supervisor.
- The individual activities constituting a role are shown as black boxes; white boxes indicate points at which two roles interact, e.g. to exchange information.
- The RAD indicates that when a suspect bill is detected, first the billing clerk checks to see whether the amount charged and the calls made are in agreement. If they are not then the clerk assesses the discrepancy. As the clerk does not have the authority to amend bills, the information is then handed over to the supervisor who makes the necessary amendment. Control then returns to the billing clerk who completes the process.
Learning objective session 4: Explain the process of managing an information systems project
- Initiation
- Planning
- Execution
- Termination
Learning objective session 4: Describe the steps involved in the project initiation and planning process
-
Initiation
- Integration management
- Stakeholder magement
-
Planning
- Integration management
- Scope management
- Time management
- Costs management
- Quality management
- HR managementCommunications management
- Risk management
- Procurement management
- Stakholder management
Learning objective session 4: Explain the need for and the contents of a Project Charter
Project charter is a central document that defines the fundamental information about a project and is used to authorize it.
Learning objective session 4: List and describe various methods for assessing project fasibility
- Economic feasibility
- Technical feasibility: a process of assessing the development organization’s ability to construct a proposed system. In-house or outsourcing?
- Operational: Does the proposed system solve problems or take advantage of opportunities?
- Scheduling: Can the project time frame and completion dates meet organizational deadlines?
- Legal and Contractual: What are the legal and contractual ramifications of the proposed system development project?
- Political: How do key stakeholders view the proposed system?
Learning objective session 4: Describe the differences between tangible and intangible benefits and costs, and between one-time vs. recurring benefits and costs
- Tangible benefits refer to items that can be measured in dollars and with certainty.
- Intangible benefits are benefits derived from the creation of an information system that cannot be easily measured in dollars or with certainty.
- Tangible cost: a cost associated with an information system that can be measured in dollars and with certainty
- Intangible cost: a cost associated with an information system that cannot be easily measured in terms of dollars or with certainty.
- One-time cost: a cost associated with project start-up and development or system start-up
- Recurring cost: a cost resulting from the ongoing evolution and use of a system
Learning objective session 4: Perform cost-benefit analysis and describe what is meant by the time value of money, present value, discount rate, net present value, return on invetment, and break-even analysis.
- Time value of money - the concept that money available today is worth more than the same amount tomorrow
- Present value - the current value of a future cash flow
- Discount rate - the rate of return used to compute the present value of future cash flows (the cost of capital)
- Net present value - use discount rate to determine present value of cash outlays and receipts
- Return on investment - ratio of cash receipts to cash outlays
- Break-even analysis - amount of time required for cumulative cash flow to equal initial and ongoing investment
Learning objective session 4: Explain what is meant by critical path scheduling and decribe the process of creating Gantt charts and network diagrams.
List the phases and their contents of the project management process
-
Initiation
- Integration management
- Stakeholder magement
-
Planning
- Integration management
- Scope management
- Time management
- Costs management
- Quality management
- HR management
- Communications management
- Risk management
- Procurement management
- Stakholder management
-
Execution
- Integration management
- Scope management
- Time management
- Costs management
- Quality management
- Communications management
- Procurement management
- Stakholder management
-
Termination
- Integration management
- Procurement management
Explain the initiation phase of project management process and what each subphase means
Initiation
- Integration management: Developing a project charter
- Stakeholder management: Identifying stakeholders
Explain the planning phase of project management process and what each subphase means
Planning phase
- Integration management: Developing a project management plan
- Scope management: Defining and managing scope, creating a work breakdown structure (WBS), and requirements gathering
- Time management: Planning, defining, and developing schedules, activities, estimating resources and activity durations
- Costs management: Planning and estimating costs, and determining budgets
- Quality management: Planning and identifying quality requirements
- Human Resource management: Planning and identifying human resource needs
- Communications management: Planning communications
- Risk management: Planning for and identifying potential risks, performing qualitative and quantitative risk analysis, and planning risk mitigation strategies
- Procurement management: Planning for and identifying required procurements
- Stakeholder management: Planning for stakeholder expectations
Explain the execution phase of project management process and what each subphase means
Execution phase
- Integration management: Monitoring and controlling the project work and managing any necessary changes
- Scope management: Validating and controlling the scope of the project
- Time management: Controlling the scope of the project
- Costs management: Controlling project costs
- Quality management: Controlling the quality of deliverables
- Communications management: Controlling all team and stakeholder communications
- Procurement management: Controlling procurements
- Stakeholder management: Controlling stakeholder engagements
Explain the termination phase of project management process and what each subphase means
Termination phase
- Integration management: Closing all phases of the project
- Procurement management: Closing all project procurements
What is time value of money (TVM)?
The concept that money available today is worth more than the same amount tomorrow
What is discount rate (DR)?
The rate of return used to compute the present value of future cash flows (the cost of capital)
What is present value (PV)?
The current value of a future cash flow
What is Net Present Value (NPV)?
Use discount rate to determine present value of cash outlays and receipts
What is Return on Investment (ROI)?
Ratio of cash receipts to cash outlays
What is break-even analysis (BEA)?
Amount of time required for cumulative cash flow to equal initial and ongoing investment
Course objective: Create a digital strategy for an organization
.
What is the purpose of the balanced scorecard?
It links the business objective which was derived from the strategy to some measures (Customer, Financial, Internal Business Operations, Learning and Growth) (see also the Collis and Rukstad pyramid)
List the elements of Critical Success Factors framework
- Planning
- Communication
- Skills
- Tools
- Process
- Management
- Teamwork
It answers the question: ‘What do we need to achieve our objectives?’ (see the Collis and Rukstad pyramid)
Bowman’s Strategic Clock
It relates to Porter’s strategy.
What is BPMN?
Business Process Model and Notation is a graphical modeling language, which should be understood by business users, analysts and programmers.
BPMN should enable process modeling in a end-to-end fashion:
- Starting with high level process models
- Refining process models and adding technical details
- Derive executable process models from detailed BPMN process descriptions
Course objective: Evaluate the digital capabilities within an organization
.
Course objective: Apply the main tools and techniques of a digital transformation to an organizational context
.
Course objective: Determine the appropriate digital governance structure for an organization
.
Course objective: Analyze the IT funding guidelines of an organization
.
Course Structure
Outputs of IT strategy formulation
Why IS/IT investments are not enough to gain a competitive advantage? (1st article)
- There is no inherent value and IT alone is unlikely to be a source of competitive advantage.
- It is easy to replicate/
- The business value derived from IT investments only emerges through business changes and innovations, whether they are product/service innovation, new business models, or process change, and organizations must be able to assimilate this change if value is to be ultimately realized.
Define IS capability
- An IS capability is not so much a specific set of sophisticated technological functionalities as it is an enterprise-wide capability to leverage technology to differentiate from competition.
- It is embedded within the fabric of the organization.
- It can be tacit and difficult to identify but the presence and effectiveness of the capability is reflected in business performance.
What does sustainability mean from the IS perspective?
Sustainability can be defined as an organization’s ability to continually deliver explicit business value from IS investments. It is this ability that is enduring, rather than the individual outcomes.
What are the three concepts in resource based view in terms of IS capabilities? (1st article)
- Resources - knowledge and skills residing in employees or the employees of third-party vendors.
- Competencies - the ability to deploy combinations of firm specific resources to accomplish a given task. They represent the collective knowledge of the firm in initiating or responding to change that is built into the organization’s processes, procedures and systems, and that is embedded in modes of behaviour, informal networks and personal relationships.
- Capabilities - the strategic application of competencies, i.e. their use and deployment to accomplish given organizational goals
6 macro IS competencies
I. Strategy: the ability to identify and evaluate the implications of IT based opportunities as an integral part of business strategy formulation and define the role of IS/IT in the organization
- Competences: business strategy, technology innovation, investment criteria and information governance
II. Defining the IS contribution: the ability to translate the business strategy into processes, information and systems investments and ‘change plans’ that match the business priorities (the IS strategy)
- Competences: prioritization, IS strategy alignment, business process design, business performance improvement, systems and process innovation
III. Defining the IT capability: the ability to translate the business strategy into long term information architectures, technology infrastructure and resourcing plans that enable the implementation of the strategy (the IT strategy)
- Competences: infrastructure development, technology analysis, sourcing strategies
IV. Exploitation: the ability to maximize the benefits realized from the implementation of IS/IT investments through effective use of information, applications and IT services.
- Competences: benefits planning, benefits delivery, managing change
V. Delivering solutions: the ability to deploy resources to develop, implement and operate IS/IT business solutions, which exploit the capabilities of the technology.
- Competences: applications development, service management, information asset management, implementation management, apply technology, business continuity and security
VI. Supply: the ability to create and maintain an appropriate and adaptable information, technology and application supply chain and resource capacity
- Competences: supplier relationships, technology standards, technology acquisition, asset and cost management, IS/IT staff development
List four reasons/categories of failure in IT projects (7th article)
- People
- Process
- Product
- Technology
Explain in which ways people factor contribute to IT project failures (7th article)
- Low motivation has a larger effect on productivity and quality than any other factor.
- Individual capabilities of team members or working relationship
- Bad leadership of managers – failure to take action to deal with problems.
- Adding people to late projects – takes away even more productivity.
Explain in which ways process factors contribute to IT project failures (7th article)
- Wasted time in the front end of a project (ineffective governance process) – too much time wasted in aggressive time scheduling and long-lasting budgeting decisions.
- Producing overly optimistic schedules, undermining effective planning and changing requirements.
- Insufficient risk management – lack of sponsorship, changes in stakeholder buy-in or contractor failures.
Explain in which ways product factors contribute to IT project failures (7th article)
- Including unnecessary product size and/or characteristic on the front end (requirements’ gold-plating)
- Changing product requirements within the project
- Adding new features in the development phase which are not required
- Exceed engineering limits in multiple areas at the same time
Explain in which ways technology factors contribute to IT project failures (7th article)
- silver-bullet syndrome – it is usually a lot more complex than expected and cannot be solved using only one technology/solution
- overestimating savings due to new tools or methods. Benefits of new tools are offset by the learning curves associated with them.
- Big mistake is switching tools during a project, again because of the associated learning curve.
List best practices to avoid IT project failures (7th article)
- Avoiding poor estimating and/or scheduling
- Avoiding ineffective stakeholder management
- Avoiding insufficient risk management
- Avoiding insufficient planning
- Avoiding shortchanging quality assurance
- Avoiding weak personnel and/or team issues
- Avoiding insufficient project sponsorship
How to improve project estimation and scheduling? (7th article)
- Timebox development because shorter, smaller projects are easier to estimate
- Creating a work breakdown structure to help size and scope projects
- Retrospectives to capture actual size, effort and time data for use in making future project estimates
- Project management office to maintain a repository of project data over time
Other things:
- Making use of developer-based estimated
- Using a modified Delphi approach
- Using estimation software
How to avoid ineffective stakeholder management? (7th article)
- Map stakeholders on stakeholder power vs. stakeholder level of interest vs. degree of support/resistence three dimension map.
- Create a communication plan
How to avoid insufficient risk management? (7th article)
Risk management should contain the following steps:
- Risk identification
- Analysis
- Prioritization
- Risk management planning
- Resolution
- Monitoring
In order to cope with risk it is advisable to use a prioritized risk assessment table and to conduct interim retrospectives or to appoint risk officer to play devil’s advocate
How to avoid insufficient planning? (7th article)
In order to avoid failing projects due to insufficient planning, project manager should make use of:
- Comprehensive project charter
- Clearly defined project governance
- Portfolio management
How to avoid shortchanging quality assurance? (7th article)
In order to meet deadlines in late projects, the first two areas that get cut are testing and training. This can lead to major shortcomings in the product quality and ultimately to the failure of the project. Therefore, it is advisable to make use of the following:
- Agile development
- Joint application design session
- Automated testing tools
- Daily build-and-smoke-tests
These processes help to produce time savings by reducing the likelihood of time consuming risk: low quality, unsuccessful integration, poor progress visibility.
How to avoid weak personnel or team issues? (7th article)
- Get the right people assigned to the project from the beginning
- Often problems arise through time-zone barriers, language, and cultural issues. Therefore, project managers should think about co-locations as a cure even when that requires sending staff to a foreign country for an extended period of time.
How to avoid insufficient project sponsorship? (7th article)
It can be very difficult to receive top-management support for a project. Therefore, it is important to:
- identify the right sponsor from the very beginning
- and to secure commitment within the project charter
- and manage the relationship throughout the life of the project (e.g. with communication plans and well-timed deliverables)
What is Confirming-Evidence Trap?
When one seeks out information that supports his existing instinct or point of view while avoiding information that contradicts it
What is Prudence Trap?
When stakes are high, people tend to adjust our estimates or forecasts just to be on the safe side
What is recallability trap?
A systematic error caused by differences in the accuracy or completeness of the recollections retrieved (“recalled”) by people regarding events or experiences from the past
Name 5 Strategic Information Systems Planning approaches
- Business-led
- Method-driven
- Administrative
- Technological
- Organizational
Explain SISP business-led approach
- Current business direction is the only basis on the IS plans
- Little users and line manager involvement
- Top-level input
- Common sense
Explain SISP method-driven approach
- Assumption that there is the best method
- Often vendor or consultant plays a major role
- those strategies are often named after the consulting firm (‘Accenture strategy’)
- Top-down nature
- “It’s good for you”
Explain SISP administrative approach
- Emphasis on resource planning
- Could be part of financial planning routine
- Steering committee makes all the decisions
- Bottom-up nature
- People are mostly involved and make the changes as they are aware of it
Explain SISP technological approach
- SISP is an exercise in business and information modelling
- Production of models and blueprints
- Advantages
- Rigor
- Focus on infrastructure
- Favors integrated tools
- Weaknesses
- Lacks management support
- Only partial implementation
- Complexity
Explain SISP organizational approach
- SISP is a continuos decision-making activity shared by the business and IS
- Organizational learning about business problems and opportunities and the IT contribution
- Emphasis is on the process and management understanding and involvement
- Usually projects emerge as themes (concentrating on product development performance)
- Teamwork
- Advantages:
- Becomes normal
- Emphasis on implementation
- Promotes IS-user partnership
- Weaknesses
- Generation of new themes
- Soft methodology
- Architecture becomes difficult
List 6 domains of macro competencies in relation to application of RBV theory to IS management (1st article)
-
Strategy: the ability to identify and evaluate the implications of IT based opportunities as an integral part of business strategy formulation and define the role of IS/IT in the organization
- Competences: business strategy, technology innovation, investment criteria and information governance
-
Defining the IS contribution: the ability to translate the business strategy into processes, information and systems investments and ‘change plans’ that match the business priorities (the IS strategy)
- Competences: prioritization, IS strategy alignment, business process design, business performance improvement, systems and process innovation
-
Defining the IT capability: the ability to translate the business strategy into long term information architectures, technology infrastructure and resourcing plans that enable the implementation of the strategy (the IT strategy)
- Competences: infrastructure development, technology analysis, sourcing strategies
-
Exploitation: the ability to maximize the benefits realized from the implementation of IS/IT investments through effective use of information, applications and IT services.
- Competences: benefits planning, benefits delivery, managing change
-
Delivering solutions: the ability to deploy resources to develop, implement and operate IS/IT business solutions, which exploit the capabilities of the technology.
- Competences: applications development, service management, information asset management, implementation management, apply technology, business continuity and security
-
Supply: the ability to create and maintain an appropriate and adaptable information, technology and application supply chain and resource capacity
- Competences: supplier relationships, technology standards, technology acquisition, asset and cost management, IS/IT staff development
