Case Study MIS- Stratex

BPMN 6053
MANAGEMENT INFORMATION SYSTEM

“INFORMATION SYSTEM STRATEGY
AT STRATEX”

Project Members:

Norsamita Shamsuddin 805493
Aliahza Binti Mokri 806668
Juliana Shastri 807406
Noor Ulfah Muhamad Zin 808504

Prepared for : Dr. Thi Lip Sam

Presentation Date: 12 November 2011

BPMN 6053 MANAGEMENT INFORMATION SYSTEM
ON TARGET .

Q1- What is Stratex IS strategy (ISS)
Awareness about Information systems (IS) is fairly high within Stratex, partly
due to the role of computers as components of the product manufactured and
marketed

IS function has been historically decentralized within the business units. Each
individual business unit has its own internal IS group which reports to the
business unit management

In 1990, the structure was changed to include a corporate IS group

The position of CIO was created and John Gates was hired from outside the
company, had a strong technology background with 15 years in the IS function
with different organization across Europe, the last two of them as a CIO with a
major British trading group

The structure of IS organization within Stratex as changed to allow for dotted
line reporting between business unit IS group and the corporate IS unit

ON TARGET .

John Gates
CIO

Nancy Bailey Bob Patterson MichaelNativel
Telecommunic Technology New
ation Strategy Strategy Technologies
Manager Manager Manager

Benjamin
Jim Goel Pierre Dubois
Gilani

Ronald Bush
Group Business
Manager

George Jackson
Group IS
Manager

Figure 1: Corporate Information System Group (Dotted line)

ON TARGET .


Bill Young
Chairman & CEO

Mark Mason John Gates
VP of Finance VP of Information
(CFO) Systems (CIO)

Business Unit Business Unit Business Unit Business Unit

Bill: Main issue is how to effectively manage information within the
company as the time value of information is very high today and
information system can be a valuable tool for increasing and sustaining
this value

Mark: How to get maximum benefits from our investment in
information technology

ON TARGET .

John:
Need to manage the evolving information technology infrastructure
of the organization. New technology development such as open
system, CASE tools to client and client server architecture are hitting
every day. It is a challenge pace with this developments

Need for keeping control of costs. Many IS organization going through
several round of data centre consolidation, outsourcing and
downsizing. Each of these options has it own merit and demerit and
demand careful study. It is important to control cost and yet keep
renewing the technology infrastructure

Need to create a pull for the technology in the business. New
technology development are providing new opportunities and changing
the way business operates. It is important to manage the seeding of
this technology in the various business units

ON TARGET .

Q2-Define strategic information system (SIS)
Introduced in 1982 by Dr. Charles Wiseman. A Strategic Information System
(SIS) is a system that helps companies change or otherwise alter their
business strategy and/or structure. It is typically utilized to streamline and
quicken the reaction time to environmental changes and aid it in achieving
a competitive advantage

Key features of the Strategic Information Systems are the following:
Decision support systems that enable to develop a strategic approach to
align Information Systems (IS) or Information Technologies (IT) with an
organization's business strategies
Primarily Enterprise resource planning solutions that integrate/link the
business processes to meet the enterprise objectives for the optimization of
the enterprise resources
Database systems with the "data mining" capabilities to make the best use
of available corporate information for marketing, production, promotion
and innovation. The SIS systems also facilitate identification of the data
collection strategies to help optimize database marketing opportunities.
The real-time information Systems that intend to maintain a rapid-response
and the quality indicators.

ON TARGET .
Q3- Is Stratex IS/IT strategy aligned with its business
strategy
BEFORE JOHN’S ENTRY… NO… AFTER JOHN’S ENTRY… YES
Competitive pressure were driving Aim of building an enterprise-wide
product prices and profit margins down telecommunication network

Revenue was growing at less than 10 Giving sales people direct access to
percent annually, expenditure on IS the product specifications, inventory
was increasing steadily at a rate of levels & other relevant information
close to 15%
Make decision directly, currently
60-75% of the effort in most IS group made in the regional & national sales
was being on maintenance of old office, equipped with handheld
systems computers and wireless modem, even
access information & make decisions in
the field
Operational efficiency of the system
still needs improvement
Information access is valuable given
the increasing overlap between the
Several redundancies in the function
products marketed by different
performed by the IS groups of the
business units
different units

for Eronic

ON TARGET .
Q3- Is Stratex IS/IT strategy aligned with its business
strategy
BEFORE JOHN’S ENTRY….NO… AFTER JOHN’S ENTRY…YES…
Communications across business units, Facilitation of communications across
there are local networks within different European countries. Help to
Stratex but no organization-wide serve the European constituency
network better

Increasing overlap between the Proposed the next major corporate
products marketed by different wide projects, Integrate Project (the
business units expert system)

Communication across country
divisions is slow, error-prone, and
hampered by different work cultures
(caused partly by rapid growth via
acquisitions)

Developing system more slowly than
demanded by the business. Average IS
planning cycle is two to three years

ON TARGET .
Q4- Is the expert system a strategic information system
in Stratex
Yes … WHY?
Expert System is a good example of a critical technology which has not been
looked into at Stratex

Lagging in utilizing and capitalizing on important new technology
The network project given a highway for communicating business information
across different functional groups in the business unit. Expert system helps to
design intelligent means for packaging and distributing knowledge on this
highway communication.

Expert system helps Sales Personnel to make the right choice
Due to large variety of products which can be configured and combined in
many ways sales people always find difficulties in selling the right
configuration of products to customers.

Expert systems helps to generate valuable incremental sales
By capturing knowledge about the related product (manufactured by other
business units)

ON TARGET .
Q4- Is the expert system a strategic information system
in Stratex
Built to help perform task more effectively
Design engineers have problems in configuring and scheduling the manufacture
of products. By linking the expert system of sales and design by using the
capabilities of the network project, design engineers tend to become
sensitive to customer needs and desires

Knowledge pathways within Stratex
Build not just information networks, but knowledge pathways within Stratex

ON TARGET .
Q5- Should Stratex implement expert system as proposed
by John? Provide justification
No. WHY?

Incompatibilities in the data and management schemas across business units
are not resolved on Network projects

Complaints from business managers over the Network Project. There is some
resentment about the disturbance in the projects which were delayed or
shelved to pay for the Network Project

Problems on Network Projects not resolved, moving to another project
Expert System?

Major hurdles of resources and business commitment

Fairly expensive to build the set of linked expert systems- $3m with
practically no quantifiable benefits

ON TARGET .
Q5- Should Stratex implement expert system as proposed
by John? Provide justification
Significant time and commitment from the business were also required for
knowledge engineering the expert system

Inexperience of the Internal IS group with expert system technology, an
external partner would be needed for leading and driving the project

The bottom up approach was not used, hence the acceptance of the user is
not identified. John use top bottom concept leaving no options for the users

ON TARGET .

Q6- What are some other alternatives to expert system?
Outsourcing
Resources & business commitment - Cost, time, commitment, external partner
needed to as inexperience of the Internal IS group at STRATEX
Reduce operational & recruitment cost

Human Expert
Expert Systems (ES) are computer programs that try to replicate knowledge
and skills of human experts in some area, and then solve problems in this area
(the way human experts would). Human can do it as well. Simplest & least
expensive-non computer method. Training provided to staff

Data Based Management System (DBMS)
This software might better fit the problem than an expert system. DBMS letting
you store an significant amount of information and excess it conveniently.
Because data are integrated into a single database, complex requests can be
handled much more rapidly then if the data were located in separate, non-
integrated files. The ability of the computer to reason may not be necessary.
Conventional software solutions
A straightforward algorithmic solution might be better than a symbolic or AI
solution.

ON TARGET .
Q7- Apart from costs, identify and discusses other
possible reason for the rejection of Expert System by top
management of Stratex?
The Knowledge Engineering Bottleneck
The enormous time and efforts required extracting the expert's knowledge and
translating it into IF/THEN rules upon which an expert system is based.
Transferring expertise to the Expert System is sometimes difficult because
experts cannot always explain how they know what they know. Often
experts are not aware of their complete reasoning process. Experience has
given them a feel for the problem, and they just "know“

The Programming Bottleneck
Programming the system and maintaining the code is very difficult.
Even if the expert can explain the whole reasoning process, automating that
process may be impossible. The process may be too complex, requiring an
excessive number of rules, or it may be too vague or imprecise

Maintenance
An important part of expert system development is ongoing maintenance,
updating the system with new knowledge, removing knowledge that is no
longer applicable, and otherwise fine tuning the system to keep it fully current
and applicable to the problem

ON TARGET .
Q7- Apart from costs, identify and discusses other
possible reason for the rejection of Expert System by top
management of Stratex?
The Learning Problem
The Expert System is unable to incorporate the changing relationships in the
decision environment. While using an Expert System, keep in mind that it can
solve only the problems for which it was designed. It can't deal with
inconsistency or a newly encountered problem situation. An Expert System
can't learn from previous experience and can't apply previously acquired
expertise to new problems the way human can

Judgment Problem
Expert Systems cannot apply the judgment and intuition, which is an Important
ingredient for problem solving. An Expert System has no common sense or
judgment. There is no doubt that-curing the next few years effective Expert
Systems will continue to -be successfully applied. However, the
accomplishment will not come easily. Among all of the possible application
domains, the one that are selected will be the ones that best meet the firm's
overall objectives in terms of maximizing payoff and minimizing risk of failure

ON TARGET .
Q8- In your opinion, did John portray Leadership
competencies for technology and innovation as CIO of
YES... Stratex?
Visioning and Strategic Thinking
John: There are many examples of companies which have actively and cleverly
leveraged new technologies, such as expert system. I think if we do not adopt
new technologies into our business rapidly, we will no longer be among the
top few companies in our business. If we get stuck on attaching unrealistic
numbers on benefits which are inherently unquantifiable, we will end up with
lot of unsatisfied, and perhaps out of work, people”. John brought in Network
Project and proposed the expert system

Drive for results
John: My role vis-à-vis the IS group of the business units is also not simple. I
have to walk the fine line between advocacy and audit. I have to provide
leadership and help them serve their business units better, but at the same
time I have to control them to see that valuable resources are not wasted. In
cooperation with the line IS group, I have initiated some performance
measures such as the average down time per week and average cost per
transaction. My task is to motivate them to stick to the figures

ON TARGET .
Stratex?
“My relationship with the business unit managers are also critical. While I have
tried to be good term with them, I do face problems in convincing them about
the benefits of our projects-such as network-initiated at the Corporate level.
There is also some tension about the degree and extend of my influence on the
resources of the local IS group

Adaptability and Change Management
John: I found that 60—75% of the effort in the most IS group was being spent on
the maintenance of old system. We sat down together and made a list of
obsolete hardware items (which could be disposed off) and software
projects (which were non-essential and could be stopped)
John: I knew that significant personnel and cost savings could be realized by
options such as consolidating common data processing functions across business
units, out sourcing and down sizing. However there was considerable
opposition to these ideas and I hesitated to impose them as I needed
cooperation of the different IS units to perform my job
John: “Related to the above issues, there is the important question of which IS
functions to centralize and which to keep decentralized. I think that the
individual business units will have to play an active role in deciding this

ON TARGET .
Stratex?
Team Leadership Competency
John: “I really pushed the business IS unit into cooperating with the
external vendor and with each other. I was very proud when we had the
telecommunications network installed on time and within budget in mid-
1992. The different functional groups within business units had the capability
to exchange information electronically for the first time in the history of
Stratex-no mean achievement”

Trust and delegate
John recruited his staff from within the IS Groups, and divided them into
divisions
John Gates
CIO

Nancy Bailey Bob Patterson MichaelNativel
Telecommunic Technology New
ation Strategy Strategy Technologies
Manager Manager Manager

Benjamin
Jim Goel Pierre Dubois
Gilani

ON TARGET Q9- What recommendation can you give to John to
.

reduce Stratex top management resistance to change
(rejection of expert system)?
Project proposals
Documents designed to present a plan of action, outline the reasons why the
action is necessary, and convince the top management to agree with and
approve the implementation of the actions recommended in the body of the
document. Proof on how the expert system is going to increase our sales, or
cut cost is needed to ensure that top management, put in figures to support

Involvement
Ask for suggestions and incorporating their ideas. If top management are
involved in change and understand the reasons for it they become supportive
of the whole idea and the change process. John did not ask for any in the case
study

The Past
John should make statement that honor his work and contributions being spend
15 years in the IS Function with different organization across Europe, and as a
CIO with a major British Trading Group to convince the top management.
Action speaks louder than words

ON TARGET Q9- What recommendation can you give to John to
.

reduce Stratex top management resistance to change
(rejection of expert system)?
Include Back-out plan
Another basic part of any sensible change control process is the inclusion of a
back-out or fallback plan. With any proposed change to a controlled IT
environment, there is always a chance that some unforeseen circumstance may
prevent the successful implementation of the change, whether it be large or
small. A clear statement of how to return the environment to its original, pre-
change state is a critical component of every well-planned change

Include evidence of successful testing
Another vital requirement of a well-managed change system is that all change
requests must include associated and relevant testing evidence. Change to a
controlled environment should not ever be made “on faith.” There are, of
course, situations where the exact actions that will occur in the controlled
environment cannot be performed in the test environment (like sending money
to a client), but all changes should be simulated to the utmost degree possible
to reduce the likelihood of errors in the controlled system

Feedback of staff / business units on Network Project Implementation to give
strong message to the top management that 1st project was a success

ON TARGET
Q10- Compare and contrast the benefits and
.

disadvantages of outsourcing and developing IS in house?
ADVANTAGES OF OUTSOURCING DISADVANTAGES OF OUTSOURCING
Swiftness and Expertise Risk of exposing confidential data
Tasks are outsourced to vendors who Risk if exposing confidential company
specialize in their field with specific information to a 3rd party
equipment and technical expertise. Tasks can
be completed fast & better quality Synchronizing the deliverables
Problem areas include stretched delivery
time frames, sub-standard quality output
Concentrating on core process rather than and inappropriate categorization of
the supporting ones responsibilities
Organization has more time to strengthen
their core business process Hidden costs
Legal cost incurred -signing a contract
Risk-sharing between companies. Spend a lot of time and
effort in getting the contract signed
Outsourcing certain components of your
business process helps the organization to
shift certain responsibilities to the outsourced Lack of customer focus
vendor Vendors may lack complete focus on your
organization’s tasks due to catering
expertise needs of multiple organizations
Reduced Operational and Recruitment costs

ON TARGET
Q10- Compare and contrast the benefits and
.

disadvantages of outsourcing and developing IS in house?
ADVANTAGES OF IN-HOUSE IS DISADVANTAGES OF IN-HOUSE IS
Best fit with the company Required more IT personnel
requirements
High overhead cost
Have control over software
improvements Time consuming

Have all of the required features Problem with usability of the system

Main core competencies and maintain High switching cost
level of quality service

Difficult to update to newer
Make a distinction with other technology
companies

THE END OF PRESENTATION….
ON TARGET

Case Study MIS- Stratex

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