Ch 13.1 Planning for and Justifying IT appl Flashcards
do both small and large orgs have formal processes for justifying IT apps?
usually only large ones do, but these processes create a lot of value
What is the applicaion portfolio
list of both existing IT apps, and the potential IT apps
organized in order of priority
Steps in IT Planning
1) analyze org strategic plan
2) analyze current IT architecture
3) create IS strategic plan
4) find new IT architecture
5) create IS operational plan
6) create IS development projects
what is the org strategic plan
identifies the firms mission and goals, and broad steps needed to reach goals
what is the IT architecture
the structure of IT in an org that is used to accomplishh the goals
(technical aspects and managerial aspects of IS)
What are the technical aspects of IT architecture
hardware and operating systems, networking, dms, app software
what are the managerial aspects of the IT architecture
how how the functional area managers invollved, how IT dept will be managed, and how IT decisions will be made
what is the IT strategic plan
long term goals that describe IT infrastructure, and major IT initatives eeded to achieve goals
3 objectives of IT strategic plan
1)must be aligned w/ org strategic plan !!
2) provide IT architecture that blends with users, apps, databases
3) must efficiently allocate IS resources among competing projects (mindful of budget and time)
why is it improtant to consider existing IT architecture in the IT strategic plan?
constrains future development (the past matters) however it can be changed!
what is the IT steering committee
group of managers/staff represnting Functional areas establish IT goals TOGETHER!!
power rangers of the business who help guide IT dev
What is the IS operational plan (6 things total)
-clear set of projects IS dept will execture
-has a Mission (from IT strategy)
-has IS environment (summary of info needs of individual FAs)
-Objectives of IS function (estimating the goals of IS)
-Constraints on the IS function (Tech,financial, personnel, etc)
-Application portfolio (prioritized inventory of present apps and a detailed plan of projects to be developed)
-resource allocation and Project management (who is going to do what how and when)
which step of IS planning process do the IT steering committee work?
the New Info tech architecture stage
What does a company do after they developp their IT plan?
cost benefit analysis
types of costs in IT project
fixed cost
-maintenace costs
what are fixed costs in IT projects
-infrsatrcutre costs associated w services
(eX: salary of IT director, adding one more IT app will not change it)
does IT have maintenace costs?
yes! debugging, improving, updating
example of a time where unanticipated IT costs rose
Y2K!! computers were programmed w 19XX in their systems and it was expensive to change it
Benefits of IT projects
-intagible benefits
more complicated to calculate Costs or benefits of it?
BENEFITS! because for tech to have benefits it needs to be implemented on time, in budget, and properly
how do companies assess the benefits of IT
implement it at certain locations (NOT ALL) then compare the results
4 ways to conduct cost benefit analysis
1) net present value
2) return on investment
3) breakeven analysis
4) business case approach
How to use the NPV method for cost benefit analyssis
convert future values of benefits to their present-value equivalent by “discounting” them at the organization’s cost of funds. They can then compare the present value of the future benefits with the cost required to achieve those benefits to determine whether the benefits exceed the costs.
How to use the ROI method for cost benefit analyssis
-measures how much profit the management earned w/ assets
-ROI= net income generated by a project/ average assets invested in projext
do you want a higher ROI?
DUH
How to use the breakeven analysis method for cost benefit analyssis
determines the point at which the cumulative dollar value of the benefits from a project equals the investment made in the project.
how to use the business case approach to cost benefit analysis
system developers write a business case to justify funding one or more specific applications or projects. IS professionals will be a major source of input when business cases are developed because these cases describe what you do, how you do it, and how a new system could better support you
