CHINA OPERATIONS PLANNING WORKSHOP ____________________________________________________________________________________

Contents

 

The Rules

Tension Points

Mistakes in Implementation

Ignored Axioms of Information Technology

Stages of Electronic Commerce (EC) Use

Effectiveness in China

Technical vs. Management Systems

Principles of Management

Management Concerns for Middle Manager

The EC Challenge: A Working Definition

Seven Components of Architecture Planning (AP)

EC & AP

AP Objectives & Scope

Business Model

Information Systems Model

Technology Model

Out-of-Context View

AP & a Functioning EC System

Appendices Appendix A - Plan of Action & Milestone for AP

Appendix B - The Dimension of Corporate Culture

Appendix C - Positions in AP

Appendix D - Duration for Each AP Stage

Appendix E - Cost Justification for EC

______________________________________________________

This workshop is intended to answer the following questions:

 

1. Where do we start?

2. Where are we today?

3. Where do we want to be in the future?

4. How do we get there?

 

The Rules of Architecture Planning (AP)

 

1. There are no such things as technical problems, only people problems - and thus, management problems.

2. This year's system is next year's problem

 

"If we could first know when we are and whether we are tending,

we could better judge what to do and how to do it."

Abraham Lincoln

 

"If you want to make enemies, try to change some things."

Woodrow Wilson

 

 

AP Tension Points:

  • A communications gap between leaders and hosts.
  • Technology forces the company to use technology.
  • Competition escalates the adoption of technology.
  • Technology is expanding into all areas of work.

 

Mistakes in AP Implementation:

  • Oversimplification.
  • Fragmentation of effort.
  • Confrontation versus cooperation.
  • I/S overloaded and understaffed.
  • Expectations.
  • Viewing computers as deliverables.
  • Inappropriate assignments.
  • No comprehensive planning for implementation.
  • Lack of commitment.
  • I/S implementation is always harder than we think.
  • Executives and clients complain that I/S professionals do not understand the business of the organization.

The Ignored Axioms of I/T:

  • There is nothing inherently wrong with manual systems.
  • Business problems are not always solved by technology.

 

Stages of Electronic Commerce use:

  • People replacement, where the technical system replaces large staff functions, such as invoicing.
  • Enablement, where the I/T system is designed to facilitate information sharing.
  • Socioeconomic change, where the I/T systems so pervade the organization to change its mode of operation and its economic base.

Effectiveness in AP:

  • The best technology wins in the long run.
  • The best management wins in the long run.

Technical versus Human Systems:

  • Technology advances regularly, by its own initiative, and in ever-increasing degree.
  •  Human systems tend to be at rest, and change only under external pressure - most often a crisis.

Principles of AP Management:

  • For an effective EAP, the human system is viewed as foundational.
  • The technological system expands at a faster rate and "smothers" the human system.
  • Proactive methods are preferred over reactive methods.
  • Integrated methods are preferred over fragmented methods.
  • Systems views are used to evaluate piecemeal issues.
  • Process management replaces problem solving.
  • When a technology implementation is not explained to workers, they will create their own explanation.
  • When workers create their own explanation of implementation, it will always be the worse possible one.

Management Concerns for Middle Managers:

  • Setting value-driven goals.
  • Changing their psychological mind sets.
  • Developing new competencies.

The Electronic Commerce Challenge:

  • Will I/T make us more competitive?
  • Will we have better data and better decisions?
  • Will our managers have more time for other work?
  • Will we provide better service to our customers?
  • Will the planning function operate better?
  • Will I/T aid in the development and growth of our organization?

A Working Definition:

"Enterprise Architecture Planning (EAP) is the process of defining architectures for the use of information in support of the business and the plan for implementing those architectures." Stephen H. Spewak  EAP creates the Model of the Business and defines the objectives and scope of architectures.

EAP has the following components:

  • Planning Initiation
  • Business Modeling
  • Current System & Technology
  • Data Architecture
  • Applications Architecture
  • Technology Architecture
  • Implementation of Migration Plan

All operations planning is a subset of EAP.  While EAP is architecture oriented, operations, however, goes beyond this by being business process oriented as well.  EAP presents the first two layers of the operations framework.  While EAP terminates with a Model of the business, operations planning must continue with:

  • Model of the Information System
  • Technology Model
  • Detailed Representations
  • Functioning Systems

In 1987, John Zachman of IBM working with the design model of Design Inquiry produced an organizing framework for I/S architecture.  To conduct EAP and design operations, management must consider the:

  • Ball park view
  • Owner's view
  • Designer's view
  • Builder's view
  • Out-of-Context view
  • Functioning system

At the planning level, EAP considers:

  • Data
  • Function
  • Network

At the system level, operations considers:

  • Data
  • Function
  • Communications

Defining the objectives and scope, EAP prepares a list of:

  • Things important to the business
  • Processes the business performs
  • Locations in which the business operates

Building a model of the business from the owner's perspective, we describe the:

  • Business rules and entities
  • Business processes and resources
  • Logistics network via business units and their relationships

Building a model of the I/S, we build:

  • Data Model
  • Data Flow Diagram
  • Distributed System Architecture

Constructing a technology model, we create:

  • Data Design
  • Structure Chart
  • System Architecture consisting of a description of hardware and system software and all line specifications

Finalizing the "out-of-context" view, we make detailed representations for the following:

  • Data Design description with all fields and addresses
  • Program with language statements and control blocks
  • Network Architecture with all addresses and protocols

If we accomplish all of the following, we will end up with a finished EAP and a functioning operations systems for:

  • Data
  • Function
  • Communications

 

APPENDIX A

PLAN OF ACTION AND MILESTONE FOR EAP

1.0 Determine Scope and Objectives for EAP:

1.1 Define scope of Enterprise.

1.2 Evaluate favorable versus unfavorable characteristics.

1.3 Evaluate the Enterprise with respect to corporate culture and the evolutionary path of I/S.

1.4 List and define the EAP deliverables and objectives.

1.5 Review the list of CSF's and obstacles or CFF's and develop a strategy for the initiation phase.

1.6 Make a schedule for the remainder of the Planning Initiation.

2.0 Create a Vision:

2.1 Develop a knowledge base about the Enterprise:

  • 2.1.1 Customers
  • 2.1.2 Products
  • 2.1.3 Objectives
  • 2.1.4 People
  • 2.1.5 Budgets

2.2 Identify the hot objectives for each objective.

2.3 Formulate an MIS vision that shows a target data/systems environment fulfilling opportunities and objectives.

2.4 Visit other sites if possible.

3.0 Design the Methodology.

3.1 Identify methodology requirements.

3.2 Define methodology characteristics.

3.3 Evaluate the current systems planning/development methods and standards of the company.

3.4 Develop an EAP knowledge base.

3.5 Approve methodology.

3.6 Produce a Table of Contents for all EAP deliverables.

4.0 Arrange for computer resources as required.

4.1 Determine tools.

4.2 Determine hardware requirements.

4.3 Evaluate database alternatives.

4.4 Select and acquire EAP software products.

4.5 Prepare procedures.

4.6 Interface all tools and techniques.

4.7 Estimate clerical support for EAP.

5.0 Assemble the Team.

5.1. Determine the required skills.

5.2 Estimate the required effort.

5.3 Determine the number of people needed.

5.4 Define roles and responsibilities.

5.5 Select personnel.

5.6 Make assignments.

5.7 Conduct methodology training.

5.8 Contract time commitments from management.

5.9 Arrange for conference/work room.

5.10 Use consultants as required.

6.0 Prepare an EAP Workplan.

6.1 Complete all previous steps.

6.2 Divide EAP into subprojects.

6.3 Make assignments according to methodology cycle.

6.4 Estimate duration of each step with start and completion dates.

6.5 Institute project control and status reporting.

6.6 Build "what-ifs" contingencies.

6.7 Estimate costs and budget impacts of the EAP.

6.8 Distribute EAP work book to team members.

6.9 Distribute work plan to all participants.

7.0 Obtain Management Approval.

7.1 Plan approach to management.

7.2 Conduct informal meetings with business executives to review the:

  • 7.2.1 Objectives
  • 7.2.2 Scope
  • 7.2.3 Potential benefits
  • 7.2.4 CSF's

7.3 Prepare and deliver executive level presentations.

7.4 Obtain feedback.

7.5 Resolve issues and concerns of:

  • 7.5.1 Budgeting
  • 7.5.2 Scheduling
  • 7.5.3 Potential team members
  • 7.5.4 Other resources

7.6 Go/No Go decision.

7.7 Host a general EAP orientation for I/S.

 

APPENDIX B THE DIMENSION OF CORPORATE CULTURE

 ENTREPRENEURIAL VS. CONSERVATIVE

 Risk Encouraging   Risk Averse

 Informal  Formal

 Decisive  Deliberate

 Results oriented  Process oriented

Aggressive  Defensive

 

CLEAR AUTHORITY LINES VS. AMBIGUOUS AUTHORITY

 Functional Matrix           Profit and loss responsibility

Cost and revenue centers     Hierarchical Consensual

COOPERATIVE VS. COMPETITIVE

 Team Oriented     "Macho"

Collaborative   Individualistic

Reward oriented   Censure oriented

Merit based   Power based

LED VS. MANAGED

 Long-term goals      Short-term objectives

Clear, enduring mission    Mixed messages

 Big picture oriented  Detail oriented

 Creative     Analytical

ETHICAL VS. AMORAL

 Visible ethics & policies   Tacit acceptance of unethical behavior

Ethical leadership and supervision    Hiring for cultural fit

Internal checks and balances                   No attention to reconciliation between systems

 

APPENDIX C

POSITIONS IN EAP

 

Team Leader

Business Analyst

Application Analyst

Toolset Administrator

Librarian

Sponsor

Consultant

 

APPENDIX D

DURATION FOR EACH EAP STAGE

 

 1. Preliminary Business Model 7%

2. Enterprise Survey 23%

3. Current Systems & Technology 15%

 4. Data Architecture 15%

 5. Applications Architecture 15%

 6. Technology Architecture 15%

7. Migration Planning 10%

 

 

APPENDIX E

COST JUSTIFICATION FOR DIRECT DISTRIBUTION OPERATIONS

 

1.0 IDENTIFYING BUSINESS ISSUES:

  • 1.1 Customer Service Benefits of a More Efficient Distribution System
  • 1.2 Cost Reduction Benefits of an Improved Distribution System
  • 1.3 Maximization of Investment Possible with an Improved Distribution System
  • 1.4 Productivity Gains from an Improved Distribution System

2.0 LIST BUSINESS ISSUES IN COLUMN FORMAT ON A SEPARATE PIECE OF PAPER

3.0 IDENTIFY WHAT FINANCIAL STATEMENTS ARE AFFECTED BY AN IMPROVED DISTRIBUTION SYSTEM

  • 3.1 Corporate Income
  • 3.2 Balance Sheet
  • 3.3 Term Debt Statement

4.0 USE THE ACTUAL DOLLARS FROM YOUR ENVIRONMENT TO SHOW FINANCIAL BENEFITS IN AREAS LIKE ROI, NET INCOME, AND MARGIN. The data should exist in the corporate consolidated income statement and balance sheet. Create: The data should exist in the corporate consolidated income statement and balance sheet. Create:

  • 4.1 Income Statement Impacts
  • 4.2 Balance Sheet Impacts

5.0 SET GOALS MODESTLY. For example, set a reduction of 10% in inventory as a goal. What is the carrying cost of current inventory? What will it be? For example, set a reduction of 10% in inventory as a goal. What is the carrying cost of current inventory? What will it be?

6.0 BUILD A VISUAL. Show how and where areas would be positively impacted by a new distribution system. Show how and where areas would be positively impacted by a new distribution system.

N.B. It is a rule of thumb that 1.5% to 2% of annual sales is a realistic investment for operational I/T systems.