Chapter 3 Effects of IT on Strategy and Competition

Chapter 3 Effects of IT on Strategy and Competition

Chapter 7 Processes, Organizations, and Information Systems - Case & Exercise Jason C. H. Chen, Ph.D. Professor of MIS School of Business Gonzaga University Spokane, WA 99258 USA [email protected] Dr. Chen, Management Information Systems 1

Part I Dr. Chen, Management Information Systems 2 Case Study 7: A Tale of Two Inter-organizational IS (pp. 288-290) Dr. Chen, Management Information Systems

3 Case Study 7: A Tale of Two Interorganizational IS Access CT Enrolled 208,301 and was a model for state-run exchanges Cover Oregon Spent $250 million, clearly inoperable and exchanges board of directors decided to stop development and utilize the federal exchange Dr. Chen, Management Information Systems

44 Figure 7-23: Healthcare Exchange Interorganizational IS 5 Dr. Chen, Management Information Systems 5 Access CT

Only 12 months until Exchange went live Counihan more than 30 years of experience working in insurance industry, key player in development of Massachusetts healthcare system Hire senior staff with deep experience in insurance Dr. Chen, Management Information Systems 66 Access CT (cont'd) Wadleigh director of application

development for CIGNA, a health services organization Primary assignmenthire and manage an outside contractor to develop exchange website and supporting backend code and manage implementation of exchange information system Created a project plan and began search for contractor to develop the site Dr. Chen, Management Information Systems 77 Cover Oregon

Did not hire a supervising contractor for project, instead took an active role in softwares development Agency suffered high employee turnover, and had difficulty hiring and keeping qualified personnel Dr. Chen, Management Information Systems 88 Cover Oregon (cont'd) OHA hired software development company to create major software components

Two of three finalists dropped out at last minute, leaving Oracle Corporation a sole source vendor. Oracle negotiated time and materials contracts instead of contract for specific deliverables at specific prices. When problems developed, Oracle was paid tens of millions of additional money for change orders on same time and materials basis. Dr. Chen, Management Information Systems 99 Cover Oregon (cont'd)

Oregon legislature required state to hire a quality assurance contractor, Maximus Corporation, to oversee project Maximus reported significant problems involving divided control, lack of clear requirements, inappropriate contracting methodology, lack of project planning, and lack of progress Unclear who got those reports or what was done with them Head of OHA project threatened to withhold Maximus payment End result: Exchange development failed Dr. Chen, Management Information Systems

10 10 7-11. Summarize the purpose and intended benefits of a healthcare exchange. A healthcare exchange is a mechanism that enables people to shop for and obtain health insurance coverage. Exchanges are intended to help people determine the best coverage based on each persons specific situation. Dr. Chen, Management Information Systems

11 7-12. why a health care exchange requires an inter-organizational information system. The exchanges are definitely interorganizational, since the exchange takes a persons personal data and contacts a variety of governmental agencies to determine eligibility for government programs. Then insurance programs are evaluated to find the best fit for that persons situation. Dr. Chen, Management Information Systems 12

7-13. Using knowledge from this chapter, summarize the difficulties and challenges of developing inter-organizational information systems. Interorganizational systems increase the complexity of a development process significantly. Each organization has its own goals and objectives for the project, which may be very different. Each organization has different ways of developing and managing the project. Communication between the organizations may be lacking. There is typically not a single leader for the project and each organizations managers may have different views of the project. The lack of a common goal and a single vision for the project plus potentially different levels of management oversight can

make these projects very difficult to complete successfully. Dr. Chen, Management Information Systems 13 7-15. Explain what you believe are the reasons for the Access CT success. The managerial structure for the project helped provide a single vision for the project. The leadership did not allow the teams involved in the project to work at cross purposes. People with an excellent background and skills were hired for the project, so clearly the project was funded appropriately to hire the best possible

talent, not just the cheapest. Dr. Chen, Management Information Systems 14 7-16. Read the Executive Summary of the First Data report located at: http://www.oregon.gov/DAS/docs/co_assessment.pdf Summarize those the reports findings. The Executive Summary provides a good overview of challenges and difficulties encountered on this project. One of the strongest themes learned from this material was the lack of a single point of authority for the project. There

were numerous examples of contradictory decisions and teams working at cross purposes. Many good project management practices were ignored. Budget limitations prevented some of the needed contributors from participating (e.g., a systems integrator). The lack of management oversight is also a strong theme that emerged. Dr. Chen, Management Information Systems 15 PART II Dr. Chen, Management Information Systems

16 SO WHAT? (p.264) Who Fixes a Workflow Problem? IN-CLASS GROUP EXERCISE (1,3) Dr. Chen, Management Information Systems 17 17

So What? Who Fixes a Workflow Problem? (p.264) A computer programmer? No. A network engineer? No. Database administrator? No. Someone with knowledge of the business and, if workflow involves an information system, someone who is knowledgeable and comfortable working with technical people. You, maybe with help of a business analyst.

Dr. Chen, Management Information Systems 18 18 1. Using your own words, explain the meaning of the statement Most IT problems are workflow problems, not software problems. In their answers, look for the fact that workflows are the arrangements of tasks that accomplish necessary business processes. Information systems support those workflows and business processes. If the outcome of a workflow is unsatisfactory, then the

workflow needs to be redesigned and the information system supporting it should be redesigned to align with the new workflow. The workflow needed should be designed first; the information system second. Dr. Chen, Management Information Systems 19 3. In your opinion, is the demand for professionals who know IS_and_something going to decrease? Increase? Stay about the same? Justify your response; search the Internet for data to support your claim.

According to the Bureau of Labor Statistics ( www.bls.gov) the demand for computer systems analysts is expected to grow at a rate of 25% from 2012-2022. This job category is for people who understand both computer systems and business. Dr. Chen, Management Information Systems 20

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