MIS 6413 Exam 2 Information MONDAY, October 31, 2005 Dr. Segall

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MIS 6413 Exam 2 Information MONDAY, October
31, 2005Dr. Segall

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Overall Exam 2 Information

• Worth 200 points total.
• Closed Book Closed Notes.
• Exam is entirely essay!
• No True/False. No multiple choice.
• Covers Chapters 4, 5, 6 7 of Applegate.
• Covers Cases
• (i.) 2-1 Taco Bell
• (ii.) 2-4 American Express
• (iii.) 3-1 Jamcracker
• (iv.) 3-3 Ford Motor Company

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Exam 2 Information

• Exam 2 will consist of FIVE (5) of the following
  SEVEN (7) essay questions presented in this
  handout.
• Each essay will be worth 40 points.
• The total number of points for Exam 2 is 200.
• You will have two (2) hours to complete Exam 2
  in class.
• YOU WILL NEED TO PREPARE YOUR RESPONSES FOR EACH
  OF THESE POTENTIAL EXAM 2 ESSAYS.
• Because there are numerous selection
  possibilities within most of these essay
  questions, many more slides are provided on this
  handout then are needed to write the essays for
  this exam!!!

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Possible Essay 1

• Chapter 4 of Applegates text discussedMaking
  the Case for Networked Business . In an essay
  discuss any two (2) of the following (3) topics
• 1.)Changing economics comparing industrial and
  network economics.
• (2.) Analyzing Performance Drivers.
• (3.) The IT Business Value Scorecard.
• --------------------------------------------------
  ----------------------------
• Clearly label in your essay your which two(2) of
  the three themes (1.),(2.) or (3.) you have
  selected.

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Changing Economics p.264-269

• Comparing Industrial and Network Economics
• Economies of Scale
• Economies of Scope (fig 4.2)
• Figure 4.3 How network economics enable market
  makers to create value

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1. Industrial Economies of Scale and Scope
(p.264-269)

• Economies of SCALE the ability to produce and
  distribute products and services faster, better,
  and cheaper than competitors can by building
  specialized plants, creating specialized jobs,
  and hiring specialized workers.
• Economies of SCOPE the ability to leverage an
  existing business infrastructure to produce and
  distribute new products or launch new businesses
  were limited to enhancements in products design
  or features.

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Network Economies of Scale and Scope (p.267)

• Network Economies of SCALE are achieved when a
  community of firms uses a common infrastructure
  and capability to produce and distribute products
  and services faster, better, and cheaper.
• Network Economies of SCOPE are achieved when a
  community of firms uses a common infrastructure
  and capabilities to launch new products and
  services, enter new markets, or build new
  businesses.

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Benefits from Doing Business on a Networked
Infrastructure

• Reduce paperwork improve transaction efficiency
• Improve control of suppliers, customers
• Improve customer relationships
• Share resources and/or risks
• Examples of Commerce, Content and Community

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2. Linking Strategy to Execution to Results
(p.269-274)

• The business model consists of p.269-270
• A Concept that defines the opportunity and
  strategy.
• Capabilities that identify the resources required
  to exploit the opportunity and execute the
  strategy.
• A value proposition that identifies the benefits
  returned to all stakeholders and the results
  executives have achieved or expect to achieve.

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Scenario-Based Approach to Valuation

• The next slide presents an approach that
  executives can use to implement the approach to
  forecasting firm value.
• See Table 4.1 on page 273 of Applegate.

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2. Linking Strategy to Execution to Results
p.269-274

• Analyzing Performance Drivers
• Business concept
• Capabilities (Operating and innovating, Managing
  and Learning, Leading and Engaging)
• Value (Financial drive and market performance)
• Scenario Based Approach to Validation (Table 4.1)

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Table 4-1 A Scenario-Based Approach to
Valuation Step 1 Define the purpose for the
value assessment (e.g., seeking funding, buying a
company, investing in an established
business). Step 2 Pick a point in the future
when you expect your business strategy to deliver
value (most venture capitalists choose 3-5 years,
but you may wish to shorten the timeframe). Step
3 Analyze the business concept and strategy and
forecast market size, your share, and revenues.
Identify yearly changes that reflect how your
firm and the market would reach this future
state. List key assumptions used in constructing
revenue forecasts. Talk with others and adjust
assumptions. Step 4 Analyze the capabilities
and resources required to reach the future state
and forecast the cost of building those
capabilities and acquiring resources. Identify
yearly costs and resources that will be required
by you, your partners, suppliers and customers.
List key assumptions used in constructing cost
forecasts. Talk with others and adjust
assumptions. Step 5 Based on this analysis,
construct estimates of financial performance and
market value that reflect the "most likely"
assumptions. Clearly state the performance
drivers that form the foundation for the
assumptions in your model. Step 6 Factor in the
uncertainty in your assumptions by developing
several scenarios that represent upper and lower
bounds on key variables in your forecasts. Most
plans include scenarios that reflect the "most
realistic," "best case," and "worst case."
However, additional scenarios may be needed.
Test the sensitivity of your forecasts based on
changes in key assumptions. Step 7 When
appropriate, validate your model by using
alternative approaches, such as Discounted Cash
Flow and Comparable Company Analysis. Step 8
Discuss the value analysis scenarios you have
constructed with others and critique the findings
and assumptionsnot just oncebut on a regular
basis. Keep in mind that this analysis is based
on highly uncertain business judgments. As a
result, it is important to stay informed of what
is happening in the market and industry, your
company and with your community. Use the
analysis as a baseline and update it often based
on what you learn as you execute strategy and
conduct business. Finally, be sure to set up
a dynamic and broad-based measurement system that
collects real-time metrics of company and
industry performance. Source Applegate, Lynda
M., Robert D. Austin, and F. Warren McFarlan,
Corporate Information and Strategy Management.
Burr Ridge
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3. Developing the Business Case for IT
(p.274-282)

• We can use the framework (linking strategy to
  execution to results) to analyze and priorities
  IT investments.
• Type 1 benefits arise from improvements in IT
  infrastructure.
• An organization is poised to pursue the Type 2
  benefits that accrue when an organization
  exploits new IT-enabled business opportunities
  that take advantage of the infrastructure.
• The next slide presents Table 4.2 The IT
  Business Value Scorecard from page 275 of
  Applegate.

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Possible Essay 2

• This essay pertains to the case for chapter 4 of
  Applegate text of Taco Bell, Inc. (1983-1994)
• Describe in depth how the following figure
  for Framework for Organizational Analysis can
  be applied to Taco Bell, Inc. case for answering
  the following Case Discussion Preparation
  Questions provided on earlier class handout
  ofSelect any two of the following three
  questions and clearly label in your essay your
  answers for selected parts as (1.),(2.) or (3.).
• Describe the impact on operating and management
  control processes for K-Minus, SOS, FACT, and
  TACO.
•  
• Describe the change process that took place in
  moving from a control management to a
  self-management infrastructure.
•  
• Discuss how Taco Bell managed to maintain control
  during a rapidly changing environment.

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NOTE

• Look at slides posted on course web page of
  handouts prepared by Taco Bell presentation
  team presentations which were also distributed by
  team during class of their presentation.

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Possible Essay 3

• This essay pertains to the case for chapter 4 of
  Applegate text of American Express Interactive
• Answer the following items and questions
  addressed by this Teams presentation and
  handout
• Clearly label in your essay your answers for
  parts as (1.),(2.) and (3.).
• 1.)  Perform a SWOT analysis of American Express.
• 2.) Profile AXIs business model.
• 3.) What implementation advantage did the CSI
  business model give AXI?
• .

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NOTE

• Look at slides posted on course web page of
  handouts prepared by American Express
  Interactive presentation team presentations
  which were also distributed by team during class
  of their presentation.

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Possible Essay 4

• This essay pertain to Chapter 5 of Applegates
  text entitled Understanding Internetworking
  Infrastructure.
• Discuss in depth any ONE of the following
  categories that include titled sections as
  presented in this Chapter 5
• 1. The Basic Components of Internetworking
  Infrastructures
• 2. The Business Implications of the Rise of
  Internetworking The Future of Internetworking
  Infrastructure.
• Clearly label in your essay which of the above
  categories you are discussing.

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• Look at Applegate pages 401-413 for
• 1. The Basic Components of Internetworking
  Infrastructures.
• Look at Applegate pages 413-421 for
• 2. The Business Implications of the Rise of
  Internetworking The Future of Internetworking
  Infrastructure.

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Chapter 5 of Applegate Understanding
Internetworking Infrastructure

• MIS 6413 Lecture Notes for Applegate Text
• Management Information Systems
• Dr. Segall
• Fall 2005

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Key questions

• What are the basic components of Internetworking
  Infrastructures?
• What Business Implications do they bring?
• The Future?

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Basic Components of Internetworking
Infrastructures

• The Technological Elements
• Local Area networks
• Hubs, switches and Network Adapters
• Wide Area Networks
• Routers
• Firewalls and other security systems and devices
• Caching, content acceleration and other
  specialized devices

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Basic Components of Internetworking
Infrastructures (Continued)

• The Technological Elements of Processing Systems
• Client Devices and Systems
• Server Devices and Systems
• Mainframe Devices and Systems
• Middleware
• Infrastructure Management Systems
• Business Applications

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Basic Components of Internetworking
Infrastructures (Continued)

• The Technological Elements of Facilities
• Building and Physical spaces
• Network Conduits and connections
• Power
• Environmental controls
• Security

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Basic Components of Internetworking
Infrastructures (Cont)

• The Operational Characteristics of Internetworks
• Open Standards (TCP/IP)
• Asynchronous Operation
• Inherent Latency
• Decentralization
• Scalability

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The Rise of Internetworking Business Implications

• The emergence of Real Time Infrastructures
• Broader Exposure to Operational Threats
• New Models Of Service Delivery
• Managing Legacies

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The Future

• Client-Server model became popular
• LANs, WANs, VANs
• Less dependence on Mainframe computers MIS
• Electronic communication/workgroup computing
  tools support group work
• See GWUForecast.gwu.edu

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Organizational Design Challenges

• The Virtual Corporation
• From Control to Learning
• From Autonomy to Collaboration
• Organizational Structure
• Authority and Decision Making
• Operating Processes
• Management Processes
• Incentives and rewards
• Roles/Skills and Expertise
• Career Development

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Targeted Opportunities

• Communicating Organizational Priorities
• Meaningful Budgets
• Effective Incentive Systems
• Solution for Production
• Adaptation for Change

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Interorganizational Systems (IOS)

• Networked information systems used by two or more
  separate organizations to perform a joint
  business function
• Interorganizational systems (IOS)
• Electronic Data Interchange uses EDI standards
• Extranets - IOS over the Internet

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IOS EXAMPLE
Kmart has opened its IS to help suppliers better
serve customers. The interface has an extensive
GUI component and allows 50 to 100 vendors to
look at Kmarts merchandising database. For
example, the system lets Black and Decker access
to any data that Kmart believes helps BD better
serve Kmart and its customers. Kmart
implemented this program in exchange for more
frequent and smaller deliveries, but also because
it was in the best interested of the company, its
customers and its suppliers. Why did Kmart
implement this IOS? What is the implication
for having Kmart decide on what information BD
can access?
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IOS Risks

• Forces automation lock-in to a particular
  system
• Government regulations may change
• Great impacts on organizational structures,
  systems, people - loss of control
• Diminishes organizational boundaries -- requires
  trust in partners

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Possible Essay 5

• This essay pertain to Chapter 6 of Applegates
  text entitled Assuring Reliable and Secure IT
  Services in which Availability Math and
  Securing Infrastructure against Malicious
  Threats were discussed.
• Discuss in depth any ONE of these issues as
  discussed in this Chapter 6Clearly label in your
  essay which ONE of the following categories (1.)
  OR (2.) you are discussing.
• 1. Availability Math
• 2. Securing Infrastructure against Malicious
  Threats
• If you select the 2nd above category, you must at
  least discuss the following
• (a.) classification of threats,
• (b.) defensive measures,
• (c.) Risk management of availability security.

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MIS 6413Notes for Chapter 6 of ApplegateDr.
Segall Fall 2005

• Assuring Reliable and Secure IT Services

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IT Redundancy Its Value

• How much reliability to buy?
• Customer Service impacted as a result of 15
  minutes downtime?
• Privacy?
• Security?
• Normal Accidents?

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Retool Your Data Center

• Transforming a data center for e-business is
  almost like rebuilding a 747 while it's flying.
• "The real challenge is to provide continuous
  application availability while changing
  everything around you."
• The most fundamental way to ease the transition
  is to get a better understanding of your business
  model, customer needs and how applications
  interact with one another in a Web-enabled world.
  
• Have an architecture that lets administrators
  add, remove, test or repair hardware and software
  - without taking down the complex.

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Availability Math

• Availability of Components in Series
• The effect of Redundancy on Availability
• High Availability Facilities
• N1 And NN Redundancy

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Availability Math The Availability of
Components in the Series

• The Availability of Components in the Series

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What if our systems are not reliable?

• How costly is a 15 minute failure of the e-mail
  system?
• How costly is a 15 minute failure of a Web based
  retail site?
• The key to a reliable system is redundancy.
• However, reliability through redundancy comes at
  a price.

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Availability Math

• 98 availability means it is down 2 of the time
• For a 24 hour day that translates into just
  under one half hour.
• Is that ok?
• Most of us require the rule of five nines
• 99.999 availability
• Less than a second of downtime in 24 hours

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Availability Math

• Most IT services are not delivered by a single
  component
• Each device has its own individual availability
• Overall service availability is lower than the
  availability of the individual components
• Service availability decreases as additional
  components are added in series

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Availability Math The Effects of Redundancy on
Availability

• The Effects of Redundancy on Availability

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Availability Math High-Availability Facilities

• Uninterruptible Electric Power Delivery
• Physical Security
• Climate Control and Fire Suppression
• Network Connectivity
• Help Desk and Incident Response Procedures

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Type and Cost of Redundancy

• N1 99.9 150/square foot
• NN 99.999 400-550 /square foot
• To go from N1 to NN for a single website
  estimated to cost 3.7 initially and 1.8
  annually to maintain. Reference p. 430 footnote
  for October 2000.

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• It all comes down to the tradeoff between
  availability and the expense of additional
  components.

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Availability Math N 1 and N N Redundancy

• N1 means that for each type of critical
  component there should be at least one unit
  standing by.
• NN redundancy requires twice as many
  mission-critical components as are necessary to
  run a facility at any one time.

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What about security?

• It costs money too
• Most companies spend only .0025 of their budgets
  on information security.
• Less than what they spend on coffee!

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Who causes the most damage?Where is the most
money spent?

• External Threat
• Internal Threat
• Let me tell you a few stories

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Classification of Threats

• Viruses and Worms
• Denial of Service
• Spoofing

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Securing Infrastructure against Malicious
Threats External Attacks and Intrusion

• External attacks are actions against computing
  infrastructure that harm it or degrade its
  services without actually gaining access to it.
  The most common is DOS or Denial of Service. A
  distributed DOS attacks use automated routines
  secretly deposited on Internet-connected
  computers. Spoofing is used by clever attackers
  to simulate a distributed attack by inserting
  false origin information into packets to mislead
  filtering software at a target site.
• Intrusion occurs when an intruder gains access to
  a companys internal IT infrastructure by a
  variety of methods.
• Viruses and worms are malicious software programs
  that replicate, spreading themselves to other
  computers.

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Securing Infrastructure Against Malicious Threats

• Classification of Threats
• External Attacks
• Intrusion
• Viruses and Worms
• Defensive Measures
• Firewalls
• Security Policies
• Authentication
• Encryption
• Patching and Change Management
• Intrusion Detection and Network Monitoring

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More interesting threats..

• Intrusion
• The use of social engineering
• Sniffers
• Password locators

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Defensive Measures

• Security becomes a matter of degree, rather than
  absolutes
• Security measures are more effective in
  combination
• Passwords, Firewalls, Authentication, Encryption,
  Intrusion Detection, Network Monitoring

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The best authentication

• What you know
• What you have
• Who you are

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Security Management Framework

• Make deliberate security decisions
• Ignorance is not an excuse!
• Consider security a moving target
• Cant do it once and then forget about it
• Practice disciplined change management
• Dont rush infrastructure changes
• Educate users
• Help them understand procedures that are
  inconvenient
• Deploy multi-level technical measures
• As many as you can afford!

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Managing Risk

• Cannot afford to address every threat with an
  equal level of aggressiveness
• Actions must be prioritized
• The logic of risk management is highly complex

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Securing Infrastructure against Malicious
ThreatsDefensive measures

• Security Policies p.439
• Firewalls p.439
• Authentication p.440
• Encryption p.440
• Patching and Change Management p.441
• Intrusion Detection and Network Monitoring p.441

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A Security Management Framework p.443-444

• Make Deliberate Security Decisions
• Consider Security a Moving Target
• Practice Disciplined Change Management
• Educate Users
• Deploy Multilevel Technical Measures, as many as
  you can afford

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Securing Infrastructure against Malicious
Threats Risk Management of Availability and
Security

• Risk Management of Availability and Security

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Risk Management of Availability and Security

• See Figure 6.9 Managing Infrastructure Risk p445
• Incident Management and Disaster Recovery
• Managing incidents before they occur
• Managing incidents when they occur
• Managing incidents after they occur

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Securing Infrastructure against Malicious
Threats Incident Management and Disaster
Recovery

• Managing Incidents before they occur p.448
• Managing during an Incident p.447
• Managing after an Incident p.448

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Executive questions to access their own
preparedness for the 21st century challenges

• Go to page 448.

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My take on it all.

• Have a plan
• Implement it
• Rehearse for disaster
• Upgrade your plan
• Do it all over again
• Let me tell you a story.

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Possible Essay 6

• This essay pertain to Chapter 7 of Applegates
  text entitled Managing Diverse IT
  Infrastructures in which four (4) Categories of
  Organization Effectiveness were discussed.
• Discuss in depth any ONE of the four following
  organization effectiveness categories as
  discussed in this Chapter 7
• 1. New Service Models
• 2. Managing Risk through Incremental Outsourcing
• 3. Managing Relationships with Service Providers
• 4. Managing Legacies.
• Clearly label in your essay which ONE of the
  above categories you are discussing.

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Managing Diverse IT Infrastructures

• Chapter 7
• MIS 6413 Management Information Systems
• Dr. Segall
• Fall 2005

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Prior to Internetworking

• ? Proprietary, private infrastructure with costly
  duplication among partners
• ? Interoperation of proprietary technologies
  problematic bridge overhead high
• ? Tied to vendors
• ?expensive systems that performed poorly or,
  worse, never worked at all

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Post Internetworking

• Open standards (TCP/IP) lead to
• Shared infrastructure
• Improved interoperation and standard bridges
• Less vendor dependence
• New Capabilities
• Outsourcing of small increments of IT capacity
• Services delivered by chain of service partners
• Services integrated with legacy systems
• Diverse client devices

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What has IT done for Organizations?

• ? Substitutes for human effort
• Automated routine activities
• ? Complements human effort
• Informates work
• ? Changes human work into a new form
• Transforms human work
• IT often in turn transformed during process

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Issues in Transformation Via IT Infrastructures

• ? What goals are you trying to reach?
• ? What tools will you use how will you use
  them?
• ? What process will you follow?
• ? How will you sustain it once youve achieved it?

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The Goal Organizational Effectiveness

• ? 1. New Service Models p.453-456
• ? 2. Managing Risk through Incremental
  Outsourcing p.458-463
• ? 3. Managing Relationships with Service
  Providers p.463-469
• ? 4. Managing Legacies p.469-472

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New Service Models reliable high-capacity
networks

• ? Software execution and data storage location no
  longer need to be local
• ? Data centers need not be owned instead, space
  rented in remote center
• ? Incremental outsourcing from multiple vendors
  feasible

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New Service Models p.453-456

• ? Managing the shortage of skilled IT Workers
• ? Reducing time to market
• ? The shift to 24 X 7 Operation
• ? Favorable Cash Flow Profiles Fig. 7.1
• ? Cost Reduction in IT Service Chains
• ? Making Applications Globally accessible Fig.
  7.2

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2. Managing Risk through Incremental Outsourcing
p.458-463

• ? An Incremental Outsourcing Example Hosting
  (p.459)
• Colocation Hosting
• Shared Hosting
• Dedicated Hosting (Simple, Complex, Custom)

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Drastic, RevolutionaryChange
Putting OutFires
Crisis StimulusforChange
Anticipatory
Task simplificationincrementalprocess improveme
nt
Deliberate,evolutionarytransformation
Is the organization ready for IT
Outsourcing transformation? Which cell is bestto
plan changes?
Narrow Broad Single
function Multiple functionsor
process or process
Scope of Change
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Variation on Service Chain

• ? No long-term relationship
• ? Negotiate and acquire in real time from one
  vendor at 1115am and another at 1115am
  transparent to the user
• ? What IT services are suited for this type
  acquisition?

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Intermediate Options

• ? Hosting and Data Center Management
• Colocation
• Shared hosting
• Dedicated hosting
• Simple
• Complex
• Custom

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3. Managing Relationships with Service Providers
p.463-469

• ? 3.1 Selecting the Service Provider Partners
  Table 7.2
• Descriptive information
• Financial Information
• Proposed plan for meeting service requirements
• Mitigation of critical risks
• Service Guarantees
• Pricing

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Managing Relationships with Service Providers

• ? Providers capabilities are basis for
  companies capabilities
• ? Services only as good as weakest link in IT
  service chain
• ? Most critical step is selecting vendors
• ?No expertise in relationship management can
  overcome choosing an unreliable service provider

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General Truth of Outsourcing

• ? Must be a Win-Win
• ?An outsourcing deal that is too one-sided, too
  favorable to one party at the expense of the
  other, usually ends up as a bad deal for both
  sides.

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3.2Relationship Management p.466-469

• ? Service Level Agreement (SLA)
• ? The prevalent Contractual Tool
• ? Penalties for Non-Performance
• ? Ability to Cancel with no penalty
• ? Ability to alter to improve control and leverage

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Cautions with incremental outsourcing

• Retain rights to control own data
• Preserve service delivery options
• Managers who take insufficient care in avoiding
  unnecessary entanglements will find themselves at
  the mercy of the service providers, forfeiting a
  principal benefit of incremental outsourcing the
  ability to alter and improve IT infrastructure in
  small steps in an ongoing manner.

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4. Managing Legacies p.469-472

• ? Technology Problems
• ? Residual Process Complexity
• ? Local Adaptation
• ? NonStandard Data Definitions
• ? Table 7.5 Key Questions (p.471)

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Managing Legacies

• ? Problems with legacy systems
• Incompatible, proprietary technologies from
  pre-Internetworking
• Batch processing
• Solve narrow, local problems (customized)
• Nonstandard data definitions

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5. Managing IT Infrastructure Assets p.472-473
? How are the IT Assets being used? ? Are they
being used efficiently, effectively and
economically? ? Total Cost of Ownership?
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• ?A complex interrelationship exists between core
  rigidities that manifest themselves in ossified
  legacy systems and a firms social systems and
  processes. Sometimes the rigidity of workers
  attachment to how a system works is as much or
  more of an obstacle to change as any technology
  factor.

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Managing IT Infrastructure Assets

• ? Tracking assets in different eras
• ? Total Cost of Ownership approach
• ? Total Benefits
• ? How to evaluate current cost/benefits to
  alternative services?

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Implications for Managing Diverse IT
InfrastructuresPost Internetworking

• ? Candidates for incremental outsourcing?
• ? Viability of current IT service partners?
• ? How well are we managing the partner
  relationship? Viability of SLAs? Service chain?
• ? Plan for legacy systems?

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Possible Essay 7

• This essay pertain to the two cases presented and
  discussed in class for Chapter 7 of Applegates
  text entitled Jamcracker and Ford Motor
  Company.
• Assume that you are a consultant who has been
  hired by ONE of these companies to review the
  companys assets and capabilities.
• Select ONE of these two companies to write an
  essay that discusses both of the following
• (1.) Discuss a review and assessment of the
  companys strengths and weaknesses of ONE of
  these two companies.
• (2.) Discuss how business models can assist your
  selected company for Managing Diverse IT
  Infrastructures which is title of Chapter 7.
• Clearly label your essay for parts (1.) and (2.)

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NOTE

• Look at slides posted on course web page of
  handouts prepared by each of these team
  Jamcracker and Ford Motor Company
  presentations which were also distributed by team
  during class of their presentation.

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MIS 6413 Exam 2 Information MONDAY, October
31, 2005Dr. Segall