Case: Blue Cross Development Challenges

Chapter 11

Good Web-based Self-service:

Customer satisfaction soars

Call center costs plummet as customers

answer their own questions, enter their own credit card numbers and change their own passwords without extensive live help

Case: Blue Cross Development Challenges

Chapter 11

Bad Web-Based Self-Service: Frustrated customers click to a competitors site Frustrated customers dial up your call center Customer is unhappy You have paid both for self service web site and for a call center

Case: Blue Cross Development Challenges

Chapter 11

Why do more than a third of all Web selfservice customers get frustrated and end up calling a help center? Use the experiences of Blue Cross-Blue Shield and AT&T Wireless to help you answer. A: A poorly designed web interface with a confusing sequence of options or asking them Questions they cannot answer A: Cumbersome drop down boxes A: Wording hard to understand A: Requiring customers to indicate which network they are using, which most did not know
1.

Case: Blue Cross Development Challenges

Chapter 11

What are some solutions to the problems users may have with Web self-service? Use the experiences of the companies in this case to propose several solutions. A: Using a focus group of end users to test the prototype A: Redesign the web site to automatically send customers to the correct network site A: Setting aside money and time for maintaining the site A: Designing flexibility into application interfaces and business rules so the site can be changed as needed
2.

Case: Blue Cross Development Challenges Take Away Chapter 11

Web self service should be good Bad web based self service will have frustrated customers, who may switch to competitors Some major customers dont do business with you if you do not have a good web based self service capabilities Important to communicate with business units & end users during the design phase Testing the prototype by a focus group of end users

Case: Blue Cross Development Challenges Take Away Chapter 11

Do not ask questions to customers of which they do not know the answers Setting aside money and time for maintaining the site Designing flexibility into application interface and business rules so the site can be changed as needed Software helps speed up the development process e.g. JRules

DEVELOPING SOFTWARE
Chapter 11

Software that is built correctly can transform as

the organization and its business transforms

Software that effectively meets employee needs

will help an organization become more productive and enhance decision making
Software that does not meet employee needs

may have a damaging effect on productivity and can even cause a business to fail
11-6

DEVELOPING SOFTWARE
Chapter 11

As organizations reliance on software grows,

so do the business-related consequences of software successes and failures including:

Increase or decrease revenue

Repair or damage to brand reputation

Prevent or incur liabilities Increase or decrease productivity

11-7

Overview of Systems Development

Chapter 11

Systems development:
Activities that go into producing an information system solution to an organizational problem or opportunity Systems analysis Systems design Programming Testing Conversion Production and maintenance
11-7

Overview of Systems Development

Chapter 11
THE SYSTEMS DEVELOPMENT PROCESS

Building a system can be broken down into six core activities.

FIGURE 13-4

Overview of Systems Development

Chapter 11

Systems analysis
Analysis of problem to be solved by new system Defining the problem and identifying causes Specifying solutions Systems proposal report identifies and examines alternative solutions Identifying information requirements

Includes feasibility study

Is solution feasible and good investment? Is required technology, skill available?

Overview of Systems Development

Chapter 11

System analysis (cont.) Establishing information requirements

Who needs what information, where, when, and how Define objectives of new/modified system Detail the functions new system must perform
Faulty requirements analysis is leading cause of systems failure and high systems development cost

Overview of Systems Development

Chapter 11

Systems design Describes system specifications that will deliver functions identified during systems analysis Should address all managerial, organizational, and technological components of system solution Role of end users

User information requirements drive system building Users must have sufficient control over design process to ensure system reflects their business priorities and information needs Insufficient user involvement in design effort is major cause of system failure

Overview of Systems Development

Chapter 11
OUTPUT Medium Content Timing INPUT Origins Flow Data entry USER INTERFACE Simplicity Efficiency Logic Feedback Errors DATABASE DESIGN Logical data model Volume and speed requirements File organization and design Record specifications PROCESSING Computations Program modules Required reports Timing of outputs MANUAL PROCEDURES What activities Who performs them When How Where CONTROLS Input controls (characters, limit, reasonableness) Processing controls (consistency, record counts) Output controls (totals, samples of output) Procedural controls (passwords, special forms) SECURITY Access controls Catastrophe plans Audit trails DOCUMENTATION Operations documentation Systems documents User documentation CONVERSION Transfer files Initiate new procedures Select testing method Cut over to new system TRAINING Select training techniques Develop training modules Identify training facilities ORGANIZATIONAL CHANGES Task redesign Job redesign Process design Organization structure design Reporting relationships

Overview of Systems Development

Chapter 11

Programming:
System specifications from design translated into software program code stage are

Testing Ensures system produces right results Unit testing: Tests each program in system separately System testing: Test functioning of system as a whole Acceptance testing: Makes sure system is ready to be used in production setting Test plan: All preparations for series of tests

Overview of Systems Development

Chapter 11
A SAMPLE TEST PLAN TO TEST A RECORD CHANGE

FIGURE 13-5

When developing a test plan, it is imperative to include the various conditions to be tested, the requirements for each condition tested, and the expected results. Test plans require input from both end users and information systems specialists.

Overview of Systems Development

Chapter 11

Conversion
Process of changing from old system to new system Four main strategies

Parallel strategy Direct cutover Pilot study Phased approach Requires end-user training Finalization of detailed documentation showing how system works from technical and end-user standpoint

Overview of Systems Development

Chapter 11

Production and maintenance

System reviewed to determine if revisions needed

May include post-implementation audit document Maintenance

Changes in hardware, software, documentation, or procedures to a production system to correct errors, meet new requirements, or improve processing efficiency 20% debugging, emergency work 20% changes to hardware, software, data, reporting 60% of work: User enhancements, improving

Overview of Systems Development

Chapter 11
SUMMARY OF SYSTEMS DEVELOPMENT ACTIVITIES

CORE ACTIVITY
Systems analysis

DESCRIPTION
Identify problem(s) Specify solutions Establish information requirements Create design specifications Translate design specifications into code Unit test Systems test Acceptance test Plan conversion Prepare documentation Train users and technical staff Operate the system Evaluate the system Modify the system

Systems design Programming Testing

Conversion

Production and maintenance

Overview of Systems Development

Chapter 11

Most prominent methodologies for modeling and designing systems:

Structured methodologies Object-oriented development

Structured methodologies Structured: Techniques are step-by-step, progressive Process-oriented: Focusing on modeling processes or actions that manipulate data Separate data from processes

Overview of Systems Development

Chapter 11

Data flow diagram:

Primary tool for representing systems component processes and flow of data between them
Offers logical graphic model of information flow

High-level and lower-level diagrams can be used to break processes down into successive layers of detail
Data dictionary: Defines contents of data flows and data stores Process specifications: Describe transformation occurring within lowest level of data flow diagrams Structure chart: Top-down chart, showing each level of

Overview of Systems Development

DATA FLOW DIAGRAM FOR MAIL-IN UNIVERSITY REGISTRATION SYSTEM

Chapter 11

FIGURE 13-6

The system has three processes: Verify availability (1.0), Enroll student (2.0), and Confirm registration (3.0). The name and content of each of the data flows appear adjacent to each arrow. There is one external entity in this system: the student. There are two data stores: the student master file and the course file.

Overview of Systems Development

Chapter 11
HIGH-LEVEL STRUCTURE CHART FOR A PAYROLL SYSTEM

This structure chart shows the highest or most abstract level of design for a payroll system, providing an overview of the entire system.
FIGURE 13-7

THE SYSTEMS DEVELOPMENT LIFE CYCLE

Chapter 11

Systems

development life cycle (SDLC) the overall process for developing information systems from planning and analysis through implementation and maintenance
11-8

THE SYSTEMS DEVELOPMENT LIFE CYCLE

Chapter 11

1.

Planning phase involves establishing a high-level plan of the intended project and determining project goals

2.

Analysis phase involves analyzing enduser business requirements and refining project goals into defined functions and operations of the intended system

Business requirement detailed set of business requests that the system must meet in order to be successful
11-9

THE SYSTEMS DEVELOPMENT LIFE CYCLE

Chapter 11

3.

Design phase involves describing the desired features and operations of the system including screen layouts, business rules, process diagrams and other documentation Development phase involves taking all of the detailed design documents from the design phase and transforming them into the actual system

4.

11-10

THE SYSTEMS DEVELOPMENT LIFE CYCLE

Chapter 11

5.

Testing phase involves bringing all the project pieces together into a special testing environment to test for errors, bugs, and interoperability and verify that the system meets all of the business requirements defined in the analysis phase Implementation phase involves placing the system into production so users can begin to perform actual business operations with the system
11-11

6.

THE SYSTEMS DEVELOPMENT LIFE CYCLE

Chapter 11

7.

Maintenance phase involves performing changes, corrections, additions, and upgrades to ensure the system continues to meet the business goals

11-12

SOFTWARE DEVELOPMENT METHODOLOGIES

Chapter 11

There are a number of different software development methodologies including:

Agile Waterfall Rapid application development (RAD) Extreme programming Rational unified process (RUP) Scrum

11-13

WATERFALL METHODOLOGY
Chapter 11

Waterfall methodology an activity-based process in which each phase in the SDLC is performed sequentially from planning through implementation and maintenance
11-14

AGILE METHODOLOGY
Chapter 11

Agile methodology aims for customer satisfaction through early and continuous delivery of components developed by an iterative process

An agile project sets a minimum number of requirements and turns them into a deliverable product Iterative development consists of a series of tiny projects

11-15

RAPID APPLICATION DEVELOPMENT METHODOLOGY (RAD)

Chapter 11

Rapid application development methodology (RAD) emphasizes extensive user involvement in the rapid and evolutionary construction of working prototypes of a system to accelerate the systems development process The prototype is an essential part of the analysis phase when using a RAD methodology

Prototype a smaller-scale representation or working model of the users requirements or a proposed design for an information system
11-16

RAPID APPLICATION DEVELOPMENT METHODOLOGY (RAD)

Chapter 11

Fundamentals of RAD
Focus initially on creating a prototype that looks

and acts like the desired system Actively involve system users in the analysis, design, and development phases Accelerate collecting the business requirements through an interactive and iterative construction approach

11-17

EXTREME PROGRAMMING METHODOLOGY

Chapter 11

Extreme programming (XP) methodology breaks a project into tiny phases, and developers cannot continue on to the next phase until the first phase is complete

11-18

IMPLEMENTING AGILE METHODOLOGIES

Chapter 11

The Agile Alliance Manifesto

Early and continuous delivery of valuable

software will satisfy the customer Changing requirements are welcome Business people and developers work together Projects need motivated individuals Use self-organizing teams Reflect on how to become more effective

11-21

DEVELOPING SUCCESSFUL SOFTWARE

Chapter 11

Primary principles for successful agile software development include:

Slash the budget If it doesnt work, kill it Keep requirements to a minimum Test and deliver frequently Assign non-IT executives to software projects

11-22

Chapter 11

Systems Development Lifecycle (SDLC)

Chapter 11

Systems Development Life Cycle - PHASE 1: PLANNING Chapter 11

Planning phase involves establishing a high-level plan of the intended project and determining project goals
Primary planning activities include
Identify and select the system for development 2. Assess project feasibility 3. Develop the project plan
1.

PLANNING 1: Identify and Select the System for Development

Chapter 11

Organizations use different forms to determine which systems to develop

Critical success factor (CSF) a factor that is critical to an organizations success

PLANNING 2: Assess Project Feasibility

Chapter 11

Feasibility study determines if the proposed solution is feasible and achievable from a financial, technical, and organizational standpoint Different types of feasibility studies
Operational feasibility Economic feasibility Technical feasibility Human Factors feasibility Legal and Political feasibility

Feasibilty Study
Chapter 11

Feasibility Studies: a preliminary study to

determine the
Information needs of prospective users Resource requirements Costs Benefits Feasibility

In some cases, a feasibility study is

unnecessary

Operational Feasibility
Chapter 11

How well the proposed system will

Support the business priorities of the

organization
Solve the identified problem Fit with the existing organizational structure

Economic Feasibility
Chapter 11

An assessment of
Cost savings Increased revenue Decreased investment requirements Increased profits Cost/benefit analysis

Technical Feasibility
Chapter 11

Determine the following can meet the needs of

a proposed system and can be acquired or developed in the required time

Hardware Software Network Technical competence of the Developers Technical competence of the users

Human Factors Feasibility

Chapter 11

Assess the acceptance level of

Employees Customers Suppliers Management support

Determine the right people for the various

new or revised roles

Legal/Political Feasibility
Chapter 11

Assess
Possible patent or copyright violations Software licensing for developer side only Governmental restrictions Changes to existing reporting structure

Feasibility
Chapter 11

Cost/Benefit Analysis
Chapter 11

Tangible costs or benefits that can be

quantified
Intangible costs or benefits that can not be

quantified

Examples of Benefits
Chapter 11

PLANNING 3: Develop the Project Plan

Chapter 11

Developing the project plan is a difficult and important activity The project plan is the guiding force behind on-time delivery of a complete and successful system

Continuous updating of the project plan must be performed during every subsequent phase during the SDLC

Systems Development Life Cycle PHASE 2: ANALYSIS Chapter 11

Analysis phase involves analyzing enduser business requirements and refining project goals into defined functions and operations of the intended system Primary analysis activities include
Gather business requirements 2. Create process diagrams 3. Perform a buy vs. build analysis
1.

ANALYSIS 1: Gather Business Requirements

Chapter 11

Business requirements the detailed set of business requests that the system must meet in order to be successful Different ways to gather business requirements
Joint application development (JAD) session where employees meet to define or review the business requirements for the system Interviews Questionnaires Observations Review business documents

ANALYSIS 1: Gather Business Requirements

Chapter 11

The system users review the requirements definition document and determine if they will sign-off on the business requirements

Requirements definition document contains the final set of business requirements, prioritized in order of business importance Sign-off the system users actual signatures indicating they approve all of the business requirements

ANALYSIS 2: Create Process Diagrams

Chapter 11

Process modeling graphically representing the processes that capture, manipulate, store, and distribute information between a system and its environment Common process modeling diagrams include
Data flow diagram (DFD) illustrates the movement of information between external entities and the processes and data stores within the system Computer-aided software engineering (CASE) tools automate systems analysis, design, and development

ANALYSIS 2: Create Process Diagrams

Sample data flow diagram

Chapter 11

ANALYSIS 3: Perform a Buy vs. Build Analysis

Chapter 11

An organization faces two primary choices when deciding to develop an information system
1.

Buy the information system from a vendor

Commercial off-the shelf (COTS) software package or solution that is purchased to support one or more business functions and info. systems SCM, CRM, and ERP solutions are typically COTS

2.

Build the information system itself

ANALYSIS 3: Perform a Buy vs. Build Analysis

Chapter 11

Organizations must consider the following when making a buy vs. build decision:
Are there any currently available products that fit the organizations needs? Are there features that are not available and important enough to warrant the expense of inhouse development? Can the organization customize or modify an existing COTS to fit its needs? Is there a justification to purchase or develop based on the cost of acquisition?

ANALYSIS 3: Perform a Buy vs. Build Analysis

Chapter 11

Three key factors an organization should also consider when contemplating the buy vs. build decision:
Time to market 2. Availability of corporate resources 3. Corporate core competencies
1.

Functional Requirements
Chapter 11

Definition: End user information requirements that are not tied to the hardware, software, network, data, and people resources that end users presently use or might use in the new system

Functional Requirement Categories

Chapter 11

User Interface Processing Storage Control

Example of Functional Requirements

Chapter 11

User Interface: automatic entry of product

data and easy-to-use data entry screens for Web customers

Processing: fast, automatic calculation of sales totals and

shipping costs
Storage: fast retrieval and update of data from product,

pricing, and customer databases

Control: signals for data entry errors and quick e-mail

confirmation for customers

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Systems Development Life Cycle PHASE 3: DESIGN Chapter 11

Design phase involves describing the desired features and operations of the system including screen layouts, business rules, process diagrams, pseudo code, and other documentation

Systems Design
Chapter 11

Definition: Design activities that produce system specifications satisfying the functional requirements that were developed in the systems analysis process

System Design Categories

Chapter 11

User Interface Design

Chapter 11

Definition: Focuses on supporting the interactions between end users and their computer-based applications

User Interface Design

Chapter 11

Focuses on supporting the interactions between

end users and their computer-based applications

Designers concentrate on the design of attractive and

efficient forms of user input and output

Frequently a prototyping process Produces detailed design specifications for

information products, such as display screens

12-67

Checklist for Corporate Websites

Chapter 11

Remember the customer Aesthetics Broadband content Easy to navigate

Searchability
Incompatibilities Registration forms Dead links

12-68

System Specifications
Chapter 11

Formalizing the design of

User interface methods and products Database structures Processing procedures Control procedures

12-69

Checklist for Corporate Websites

Chapter 11

Remember the customer successful websites

are built solely for the customer, not to make company vice presidents happy
Aesthetics successful designs combine fast-

loading graphics and simple color palettes for pages that are easy to read
Broadband Content the Webs coolest stuff

cant be accessed by most Web surfers; dont make it the focus of a site

Checklist for Corporate Websites

Chapter 11

Easy to navigate make sure its easy to get

from one part of site to another

Searchability include a useful search engine Incompatibilities test site with target web

browsers

Checklist for Corporate Websites

Chapter 11

Registration forms short registration forms

are a useful way to gather customer data

Dead links be sure to keep links updated

Systems Development Life Cycle PHASE 4: DEVELOPMENT Chapter 11

Development phase involves taking all of the detailed design documents from the design phase and transforming them into the actual system
Primary development activities include:
Develop the IT infrastructure 2. Develop the database and programs
1.

DEVELOPMENT 1: Develop the IT Infrastructure

Chapter 11

The platform upon which the system will operate must be built prior to building the actual system
In the development phase, the organization purchases and implements the required equipment to support the IT infrastructure

DEVELOPMENT 2: Develop the Database and Programs

Chapter 11

Once the IT infrastructure is built, the organization can begin to create the database and write the programs required for the system
IT specialists perform the majority of the tasks associated with the development phase

Systems Development Life Cycle PHASE 5: TESTING Chapter 11

Testing phase involves bringing all the project pieces together into a special testing environment to test for errors, bugs, and interoperability, in order to verify that the system meets all the business requirements defined in the analysis phase Primary testing activities include:
Write the test conditions 2. Perform the system testing
1.

System Testing
Chapter 11

Testing and debugging software Testing website performance Testing new hardware Review of prototypes of displays, reports and

other output

TESTING 1: Write the Test Conditions

Chapter 11

Test condition the detailed steps the system must perform along with the expected results of each step

TESTING 2: Perform the System Testing

Chapter 11

Different types of testing:

Unit testing tests each unit of code upon completion Application (or system) testing verifies that all units of code work together Integration testing exposes faults in the integration of software components or units Backup and recovery testing tests the ability of an application to be restarted after failure Documentation testing verifies instruction guides are helpful and accurate User acceptance testing (UAT) tests if a system satisfies its acceptance criteria

Systems Development Life Cycle PHASE 6: IMPLEMENTATION

Chapter 11

Implementation phase involves placing the system into production so users can begin to perform actual business operations with the system

Implementing New Systems

Chapter 11

The systems implementation stage involves

Hardware and software acquisition Software development

Testing of programs and procedures

Conversion of data resources Conversion alternatives Education/training of end users and

specialists who will operate the new system

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Other Implementation Activities

Chapter 11

The keys to successful implementation of

a new business system

Testing
Data conversion Documentation Training

12-82

Data Conversion
Chapter 11

Data conversion includes

Converting data elements from the old database to

the new database Correcting data errors Filtering out unwanted data Consolidating data from several databases Organizing data into new data subsets

Improperly organized and formatted data is a

major cause of implementation failures

12-83

Importance of Documentation
Chapter 11

Documentation serves as a method of

communication among the people responsible for developing, implementing, and maintaining a computer-based system.
Documentation is extremely important in

diagnosing errors and making changes, especially if the end users or systems analysts who developed a system are no longer with the organization.

Documentation
Chapter 11

User Documentation
Sample data entry screens, forms, reports
System operating instructions

Systems Documentation
Method of communication among those developing,

implementing, and maintaining a computer-based system Detailed record of the system design Extremely important when diagnosing problems and making system changes
12-85

Training
Chapter 11

End users must be trained to operate a new business

system or its implementation will fail

May involve only activities, such as data entry,

or all aspects of system use

Managers and end users must understand how

the new technology impacts business operations

System training should be supplemented with training

related to
Hardware devices Software packages
12-86

Major System Conversion Strategies

Chapter 11

12-87

Direct Conversion
Chapter 11

Direct conversion The simplest conversion strategy The most disruptive to the organization Sometimes referred to as the slam dunk or cold-turkey strategy May be the only viable solution in cases of emergency implementation or if the old and new system cannot coexist Has the highest risk of failure Involves turning off the old system and turning on the new one
12-88

Parallel Conversion
Chapter 11

Old and new systems are run simultaneously until

everyone is satisfied that

The new system functions correctly The old system is no longer needed

Conversion to new system can be single

cutover or phased cutover

Has the lowest risk, but the highest cost Can cost 4 times more than using the old system Best choice where an automated system is replacing a

manual one

12-89

Pilot Conversion
Chapter 11

Scenarios best suited to a pilot conversion Multiple business locations Geographically diverse locations

Advantages of single location conversion Can select a location that best represents the conditions across the organization Less risky in terms of loss of time or delays in processing Can be evaluated and changed before further installations
12-90

Phased Conversion
Chapter 11

A phased or gradual conversion

Takes advantage of both the direct and parallel

approaches Minimizes the risks involved Allows the new system to be brought online as logically ordered functional components
Disadvantages
Takes the most time
Created the most disruption to the organization over

time
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Implementation Process
Chapter 11

Systems Development Life Cycle PHASE 7: MAINTENANCE

Chapter 11

Maintenance phase involves performing changes, corrections, additions, and upgrades to ensure the system continues to meet the business goal

Post-Implementation Activities
Chapter 11

The single most costly activity

Correcting errors or faults in the system
Improving system performance Adapting the system to changes in the operating

or business environment
Requires more programmers than does

application development
May exist for years

12-94

Systems Maintenance
Chapter 11

There are four basic categories of system

maintenance
Corrective: fix bugs and logical errors Adaptive: add new functionality Perfective: improve performance

Preventive: reduce chances of failure

12-95

Post-Implementation Review
Chapter 11

Ensures that the newly implemented system

meets the established business objectives

Errors must be corrected by the maintenance

process
Includes a periodic review/audit of the system

as well as continuous monitoring

12-96

Software Problems Are Business Problems

Chapter 11

Primary reasons for project failure include

Unclear or missing business requirements Skipping SDLC phases Failure to manage project scope
o
o

Scope creep occurs when the scope increases Feature creep occurs when extra features are added

Failure to manage project plan Changing technology

Case Study: HewlettPackard: Managing Radical Chapter 11 Change

Some facts about Randy Mott & his earlier

achievements
In Wal-Mart, he had only 30 tech staff Yet they developed a network of computerized

distribution centers that made it simple to open and run new store with cookie cutter efficiency
In 1990, as a CIO, he persuaded higher ups to

invest in Data Warehouse

12-98

Case Study: HewlettPackard: Managing Radical Change Chapter 11

Some facts about Randy Mott & his earlier

achievements
With that the company was able to analyze buying

trends of customers as no other company had done.

In 2005, he took up the job of CIO in HP
He understood not only technology and how to use it

to improve business, but how to deliver those benefits

In Dell, he meld 100 separate systems into a single

data warehouse.
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Case Study: HewlettPackard: Managing Radical Change Chapter 11

Some facts about Randy Mott & his earlier

achievements
Motts team enabled Dell to quickly spot its

inventory for a particular chip, so the company could offer online promotions for devices containing that part before the prices fell too steeply.
Most challenging project - 3 year, $1 billion

plus makeover of HP internal tech systems

12-100

Case Study: HewlettPackard: Managing Radical Change Chapter 11

HP is embarking on a makeover of its internal

tech systems
Replacing 85 loosely connected data centers

around the world with 6 cutting-edge facilities Cutting thousands of smaller projects to focus on a few corporate-wide initiatives Scrapping 784 databases for one data warehouse Laying off thousands of IT workers Building its own fiber-optic network to connect the six data centers
12-101

Case Study: HewlettPackard: Managing Radical Chapter 11 Change

HP is embarking on a makeover of its internal

tech systems
If Mott is successful, HPs annual spending on

tech should be cut in half in the years ahead, from $3.5 billion in 2005.
Data warehouse could help HP make headway

on how to capitalize on its vast breadth

12-102

Case Study: HewlettPackard: Managing Radical Change Chapter 11

HP is embarking on a makeover of its internal

tech systems
If all information about HPs shipment of printers,

PCs and servers can be integrated, it will enable HP to know exactly, what each location is doing on a given day
Mott had the advantage at Wal-Mart & Dell of

building infrastructure from scratch

12-103

Case Study: HewlettPackard: Managing Radical Change Chapter 11

HP is embarking on a makeover of its internal

tech systems
He will need support of the remaining staffers

who have resisted centralized control

Mott is testing the limits of the HP culture, taking

away the rights of thousands of IT workers to purchase their own tech equipments

12-104

Case Study: HewlettPackard: Managing Radical Chapter 11 Change

HP is embarking on a makeover of its internal

tech systems
Tearing up the IT infrastructure & putting many IT

initiatives on hold
CEO Hurd is demanding revamp of everything

from sales to product lines

Everyone is averaging 60 hours a week At some point you hit a breaking point

12-105

Case Study: HewlettPackard: Managing Radical Chapter 11 Change

HP is embarking on a makeover of its internal

tech systems
Motts greatest strength is while a technologist,

he has management skills to make IT actually take root in a companys culture

Moot championed the deployment of IT by

showing how it achieved Wal-Marts business goals

12-106

Case Study: HewlettPackard: Managing Radical Change Chapter 11

HP is embarking on a makeover of its internal

tech systems
The idea of data warehousing is to make sure that

all of HPs businesses are working of the same set of data, and to give them tools to quickly make the best decisions for the entire company say a single customer management system, so executives can know the full breadth of what any account buys from HP

12-107

Case Study: HewlettPackard: Managing Radical Change Chapter 11

HP is embarking on a makeover of its

internal tech systems

Hurd & Mott believed in speed over endless

analysis
Benefits achieved
Trimmed 1200 individual projects such as e

learning application for new hires to only 500

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Case Study: HewlettPackard: Managing Radical Change Chapter 11

Benefits achieved
He also imposed real deadlines to make that

the Projects were completed in time.

HP had 5 or more IT workers in 100 different

locations, he decided to reduce them to 25

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Case Study: HewlettPackard: Managing Radical Change Chapter 11

Strategy adopted by Mott to break the news

of impending layoffs
He held close to 20 Coffee talks with HP

employees in various countries.

This could lead to some trying times next year,

but the benefits may be surprising

Cut monthly networking bill to phone

companies by 40%

12-110

Case Study: Hewlett Packard Questions

Chapter 11

1. Will the initiatives being undertaken by CIO

Randy Mott to implement major changes to the IT function at HP make IT a more efficient and vital contributor to HPs business success?

Defend your position on each of the major initiatives he is implementing Consolidate data centers
o

Initiatives

May cut HPs IT costs in half

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Case Study: Hewlett Packard Questions

Chapter 11

Consolidation will reduce significant amount of facility maintenance expenses

This cost reduction will help HP improve its bottom line

Databases consolidation

Will allow data analysis Benefits can range from improved supplier & inventory management to better customer relations
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Case Study: Hewlett Packard Questions

Chapter 11

2. Do you approve of the change management job Mott is doing, including his meetings with HP employees throughout the world, and having coffee talks with them?

HP employees both on IT side & on the business side need to learn Motts strategy, buy into business objectives and understand their role in HPs future

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Case Study: Hewlett Packard Questions

Chapter 11

This will reduce employees doubts and uncertainties and help each one make a more informed decision
Employee may choose to stay or leave for right reasons These meetings give Mott the opportunity to learn about HP, its employees & its culture

He will find this useful as develops its plans

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Case Study: Hewlett Packard Questions

Chapter 11

These meetings will open new channel of communications, which can supply Mott with information during the course of restructuring

12-115

Case Study: Hewlett Packard Questions

Chapter 11

3. Assume you have been hired as a

management consultant or coach to CIO Mott

What are several suggestions you might give him to help him successfully implement his ambitious plans for IT changes at HP?

12-116

Case Study: Hewlett Packard Questions

Chapter 11

Mott has to succeed in each of the three major disciplines in order to make this project a success, business, technology & HRM.
Mott has experience of achieving business success in his previous companies He also has the technical experience to understand and manage the technical challenges created by these projects The key difference between his prior experience & HP falls on the Human Resource side
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Case Study: Hewlett Packard Questions

Chapter 11

Both Dell & Wal-Mart were relatively new & heavily centralized organizations Centralizing their data services did not pose much challenge to their fundamental business model While with HP, it will.

In order to succeed Mott will full support & dedication of CEO & its board of directors
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Case Study: Hewlett Packard Questions

Chapter 11

He will need this support because these changes will prompt considerable internal backlash & this backlash must be met with resolute determination Resistance to change must be met with an adapt or leave message that only top leadership can make stick.

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Mott must ensure that only right people stay & the right people leave both on the business side and IT side in HP

To do this, he must first clearly communicate what these changes will mean both to business units and to the IT staff.
People should stay or leave for the right reasons
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He should also explain the benefits to the individuals who fully participate in this changeover

Employees fully participating in the changeover will have a meaningful future with HP
HP needs to offer early retirement packages to senior & mid level managers both within business units and his own IT staff
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HP also needs to assure managers that those facing layoffs will receive generous separation packages This will encourage employees who wish to participate in the change to take a chance & stay
This is important because Mott need experienced and willing HP hands on board with his program
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Lastly Mott needs to identify failing managers and terminate their employment This will help managers learn about centralization plans and its benefits This will also give chance to some managers to accept early retirement

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