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Information system for business Essay

Summary: This is a 15-page paper on IT Outsourcing and Vendor Management. The paper has 1 source and is in APA format. The paper discusses the trends in Information Technology, Evolution of IT architecture case study, Outsourcing and Project Management Issues in IT projects.

Information System For Business

New Developments That Could Change the Nature of Computing:

            The modern age is the age of rapid change and transformation. Every thing is changing and evolving with an incredibly fast pace, so is the field of Information Technology. In the recent years the way people usually used their computers and handled information technology has seen a dramatic change. The computers and its peripherals have changed with such a pace that every new technology seems to become obsolete in few years, as a new and more robust one replaces it. This paper will discuss some of the new trends and technological developments in the field of Information Technology, which may lead to radical change in the way people, use computing today.

            There have been new developments and innovations in both hardware and software technologies. Everyday new hardware with far more capabilities is introduced. The storage media technology has taken a new turn with the introduction

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of USB Flash drives, which made the old floppy drives obsolete. The USB Flash drives are now used as a floppy drive alternative was storing and moving data more easily and securely. Initially USB Flash drives were of small storage capacity but now large storage capacity drives up to 32 GB are also available. The most prominent manufacturer of USB Flash drives is Kingston Technology. Another important dramatic development in hardware development is the introduction of Solid-state hard drives. Though similar to the flash drives in a primary concept they are more capable, thus able to emulate a hard drive. They are more secure, faster, consume less energy and generate less heat. They may play a vital role in the increasing of the performance and abilities of the future generation notebook computers as well as desktop computers. Moreover whether they are solid-state or traditional hard drives; both have rapidly becoming capable of storing more amounts of data. Another important shift in the computer technology is the shift of computer processors towards 64 bit processors. Most of the modern processors developed by companies like Intel and AMD are 64 bit machines. Now the most common and made for consumer systems have Intel core 2 Duo processors, which are all 64 bit. The shift towards 64 bit computing will result in a dramatic change in the world of computing in the near future. Currently most end users cannot enjoy the gains of 64bit computing because most of the software currently available supports only 32bit architecture. The complete support of 64bit computing will result in very high level of data processing and multitasking technologies as well as use of more than 4 GB or RAM.

            Regarding the networking and Internet trends, thanks to the new technology of fiber optics has not only increased the of internet connections to dazzling high speeds, but it has also made the internet to sustain the ever increasing heavy internet traffic. Fast Internet connections have changed the way the people interact and communicate with each other via Internet. Teleconferencing once a fiction has become a norm. Wireless networking is also a new development in IT, which is about to change the way people use Internet and LAN connections. When wireless networking will become common network cables will become obsolete and the mobility and connectivity will become easier than ever. The new Wireless WAN and 3G technologies will make notebooks and laptop computers even more robust and interconnectivity more flexible and fast. Even in today’s modern computer labs and libraries of most developed countries, use of wireless networking has become a norm.

E Shopping is another new product of IT, which has radically changed the way merchandise, and goods were sold or bought. According to a survey 32% of Americans bought a holiday gift online. The trend now common in developed countries is also taking its roots in the third world countries where increasing use of Internet and Information Technology has made it possible for e-commerce to prosper. Global Positioning System (GPS) once only limited to the military and high profile security organizations is also becoming increasing common. It will help people know about the whereabouts of their loved ones, helping them to trace them and contact them incase of emergency.

Some new developments in the computer hardware will also radically change the use of computers. Currently some notebook computers are under development, which will completely rely on voice commands, thus making the keyboards obsolete in the future. To increase the mobility new rollout monitors will be introduced, enabling the monitors to scroll. Instead of using password voice recognition will be used to open or use personal information or computers. Apple has already introduced this technology in some of its new computer products. Currently biometric chips are also becoming popular for identification and authorization purposes.

New software developments are also aimed at changing the way of computing radically. For instance Google has launched its online Office Suite namely “Google Docs” revolutionizing the way people use software. If online software like Google Docs becomes popular, it will result in the demise of popular office suites like Microsoft Office and Corel Office. Users will no longer need to loose huge amount of their precious disk space for big, space and resource consuming software like Microsoft Office or Corel Office etc. Another important breakthrough in the field of software development is virtualization. Software and Desktop virtualization has become a popular solution for organizations to use completely different software and operating systems in a single workspace. Currently applications like VMWare, Virtual Box, Virtual PC, Virtual Machine and Parallel Desktop are the most popular virtualization applications. The desktop virtualization includes several virtualization techniques like hard drive virtualization, network virtualization, memory virtualization etc.

These new developments and innovations in the field of Information Technology will lead to radical changes in the way people use computers and related technologies. New designed PCs and Notebook computers will soon become popular, with new technologies, those which user had only dreamed off.

Evolution of IT architecture Case Study:

            The late 90s was the era of network revolution, which radically changed the way people used computing in the past. In the past computers were used as a single unit and they were not considered as a coherent interconnected entity. The revolution of Internet and networking made this possible. This dramatically changed the way the companies and corporations way of computing. Real State sector is not an exception in this regard. The beginning of the 21st century was marked by new emerging technologies which radically changed the way the Real State business were used to operate in the past.

            The evolution of IT architecture of Prudential Chamberlain Stiehl was also driven by these factors. The key concern of the management and CIO Bob Mills in 1996 was to retain the experienced sale associates and to recruit more sales associates. The primary vision of Bob Mills was to not only provide latest communication and information technology to the sales associates, but also eventually develop a working habit in them, which completely depends on the technology and environment provided by the company. In order to achieve this objective Mills initially devised a three yearlong term plan. This was the first key transition point in the evolution of the architecture of the company. The key objectives of implementing this plan was to create a robust and fast wide area network (WAN) between company’s sale offices and also a fast and problem free access to Multiple Listing Service (MLS). Moreover Mills wanted to develop a cost effective system where maximum functionality could be achieved with minimum cost. It could only be achieved when applications are delivered from a centralized location instead of installing them on every desktop computer separately. The solution, which Mills used to achieve this objective, was Citrix’s Winframe server. This not only provided connectivity to the MLS via telnet, but it also provided applications like MS Word and Excel and also shared directories. Moreover it also served the online forms which became a common way for sale associates to process transactions. Another breakthrough was the creation of a VPN network to give access to the sale associates from home.

            In the year 2001 Mills has further upgraded his IT architecture by including an Oracle Database server, a Linux based web server and developed several tools for not only sale associates, but also sellers and buyers. He developed a dynamic website which provided facilities like virtual tours of the houses for sale, as well as access to the MLS for customers paying extra fee for it. A permanent database server and web server were also key transition points in the evolution of the IT architecture of the company.

            In the current scenario the company has been evolved and become a lot bigger than it was in 2001. This requires a significant change in IT architecture in order to boost the performance of the Information System but also to gain a competitive advantage with IT. Bob’s primary focus is on cost effectiveness with maximum functionality. Using an Oracle database server and developing custom applications for the customers will not only become too costly but also hard to manage. Bob must turn towards some third party software developers in this regard. Microsoft SQL server also provides an excellent functionality and will prove to be much more economical and easy to manage. This is not only because SQL server is not only economical in price, but also there are a plenty of third party preconfigured applications built for it, and building customized applications is also simpler and easier.

            In order to enhance connectivity it is advisable to start Wireless WAN network which will not only improve the mobility and flexibility of transfer of information between the sale associates, sellers and buyers. The increasing affordability of laptops and notebook computers has changed the trends of business users. Now most of the business users use notebooks, laptops and PDAs, which provide robust wireless connectivity. Thus updating the current wired network to a wireless LAN and WAN will provide both flexibility and mobility to the users.

            Another important step will be upgrading to Citrix XenApp server, which is the more robust and powerful successor of the older Winframe server. This will provide the sales associates the latest tools and technologies and software, thus further increasing the sales associates’ dependency on the working environment of the company. This will also be helpful to lure other experienced sales associates to join the company. The new XenApp server supports most of the latest networking architecture, thus there would be minimum compatibility issues when new networking tools like WWAN are implemented and installed.

            Providing integrated voice and data is another important part of Bob’s vision regarding IT. There are two primary options in this regard, either to built his own data and voice integrated system or purchase a completely configured system from a third party vendor. In the current scenario where Bob wants to keep his cost minimum and finds difficulty in developing software applications, it will be more feasible for him to try option two. There are several voice and data integrated system providers like Motorola’s Astro integrated voice and data system, which is highly compatible with the modern 3G and Wifi technologies, thus compatible with both modern PDAs, laptops and desktop PC workstations. This system consists of Radio Network Controller, Wireless Network Gateway, which utilizes Internet protocol making it completely compatible with existing host networks. The main module, which steers the voice and data messages to their relevant controllers, is called Digital Interface Unit. The system also has optional encryption modules, which eliminates the possibility of confidential data being intercepted by unauthorized users. There are some other integrated data and voice systems providers, which provide similar products and solutions like Motorola’s Astro integrated systems.

            Another problem, which Bob was facing, was to keep the IT and Networking maintenance expenses as low as possible. Because creating a complete IT department will not only be costly and time consuming as Bob has to spend most of his time on monitoring the IT department and sending them to sales offices in different locations. The more economical option will be outsourcing the maintenance to another IT firm. This will free his precious working hours consumed by IT maintenance and troubleshooting. He will then have enough time to focus on the core issues and use his time on activities of strategic impact, like making IT more aligned with his business. Local system support firms will be quite enough to keep the networking and IT infrastructure in its shape. This is mainly because the focus of the management is on cost effectiveness and it will only be achieved by hiring a local support firm. Moreover, despite the increasing size of the business, company and its IT infrastructure, it is not that sophisticated to hire a national level support organization. The best approach will be selective outsourcing and best-of-breed approach i.e. one firm will support the data center and the desktop systems, while the other will support the networking and upgrading the current LAN and WAN networks to WLAN and WWAN. This will both be cost effective and the prospect of the dependency of the company on a single supporting firm will be eliminated.

            Bob’s overall strategy of upgrading the IT architecture and expanding the infrastructure is based on the vision of minimum cost and maximum functionality. The primary objectives of this upgrading process is to retain the dependency of the existing sales associates, make the information useful and profitable for the company, recruit new sales associates and provide the sellers and buyers extensive information regarding the homes they want to buy or sell. All these objectives can only be achieved by an extensive upgrade in the IT architecture with cost effectiveness in mind. The above-mentioned solutions are the most appropriate for the current requirements of the company will probably make the company a technological leader in the domain.


            The main reason behind the issues arising regarding governance is that both the parties involved in the contract i.e. customer and vendor have very different goals. The customer wants the cost effectiveness and relief from the non-core processes of its organization and spend his resources and time on something more profitable. The vendor on the other hand wants to provide the outsourced services in his own interest i.e. to earn as much as possible against these services.

            In order to establish a smooth working relationship between the vendor and the customer it is necessary to establish joint governance teams. This joint governance team has to be headed by two high level executives from both parties, who will have the final say on any conflict. This joint governance teams main responsibility is to monitor that the working relationship is going smoothly without any conflicts. In order to monitor day-to-day operations it is imperative to establish another joint monitoring team. This team will held meetings on weekly or monthly basis and will solve most of the issues that arise during the normal business processes. In order to establish a healthy working relationship it is necessary to assign an executive permanently from both sides, who will be responsible and in charge of governing the whole operation.

            Another important measure to taken to ensure smooth working relationship between the vendor and customer is to develop complete and comprehensive Service Level Agreements (SLAs) in the contract. Because the whole contract is a very long document it is not possible to refer to it to find every responsibility and service. For all the services agreed upon in the contract there should be a SLA, which will give the detail of responsibilities, performance requirements, penalties and bonuses. These SLAs are used to measure the performance of the vendor, without any conflicts and issues arising. The main key to create a complete and comprehensive SLA that meets the requirement of the customer is to first determine the performance metrics of his own IS department and then use it as a benchmark. In order to avoid disputes it is necessary for the customer to know what the vendor will be held accountable for regarding his services.

            Another and the most successful way to keep the vendor aligned with the interests of the customer and make the outsourcing relationship long lasting and less disputed is to share the vendor in the benefits and profits of the customer. Making the vendor a partner of the customer often does this and consequently both the parties now have the same objective and vision i.e. to make this outsourcing arrangement as successful as possible as both parties will be rewarded with it.

            Selective outsourcing is an arrangement in which the customer outsources only a portion of his IT functions and services to the vendor. This portion ranges from 20 to 80% of the IT budget of the company. Selective outsourcing is quite different from Total outsourcing. In total outsourcing the company gives up all the IT functions and services in the favor of the vendor. All the IT staff and personnel are moved to the payroll of the vendor the customer now does not need to keep the records and books of IT investments and expenditure. There is only one vendor in total outsourcing. On the other hand in selective outsourcing only partial functions are given to the vendor and most of the crucial and core functions are kept inside the enterprise. The company has to carry on its IT investment in the book and records. Some of the IT staff and personnel are retained on the payroll of the customer. There may be one or multiple vendors in selective outsourcing as best-of-breed arrangement is the most preferable approach of selective outsourcing.

            Another major difference between total and selective outsourcing is that in total outsourcing the customer nearly eliminates the cost of IT expenditure on the expense of complete dependency on the vendor regarding the IT functions and services. In selective outsourcing on the other hand the customer retains core IT functions within the enterprise to avoid dependency on the vendor. Though selective outsourcing is also cost effective but it does not completely eliminate the IT investment of the customer.

            The most recent trend in IT outsourcing is known as collaborative outsourcing. In this arrangement a vendor becomes the prime contract and assumes responsibility of the whole contract. But multiple parties do the actual work and all of them work together as a team. This emerging trend has led most vendors to establish multiple subsidiaries in order to maximize profit and minimize cost and keep most of the job within their organization.

            Most customers today prefer best-of-breed outsourcing arrangement. Because in order to avoid dependability on a single vendor and because no single vendor is specialized in all the fields of IT they choose different vendors for different tasks. But most vendors want all the outsourced services from the customer in order to gain their dependability and maximize profit and marginalize cost. In order to achieve this objective they often establish multiple subsidiaries under different names. The primary objective is to get the largest portion of outsourced business as possible. Customers are normally reluctant to give all the outsourced services and functions to one vendor as mentioned above. The solution was multiple subsidiaries under different names and grasp as much as business from the customer as possible.

Hong Kong Chek Lep Kok airport Fiasco:

            In July 1998 Hong Kong’s new airport commenced its operations, but it turned into a complete fiasco regarding the baggage handling system, flight information display system and other management failures. Baggage was lost or stranded at the airport with no one to claim its ownership. People found it extremely hard to find the right way, missing flights because of wrong information displayed by the Flight Information Display System were common. It took some 5 to 6 months to fully determine and rectify the errors and then the airport started running smoothly.

            An inquiry into the fiasco identifying what went wrong and who should be held responsible was held by the Legislative Council Select Committee. In the 8th Chapter of the first volume of the inquiry report, the committee gave a detailed analysis of failures and lessons learned from it. In this chapter the inquiry committee has pointed its finger on the weak governance of the Airport Authority and lack of communication between different stakeholders. The failure of the IT architecture was mainly due to lack of contingency planning, professional training and thorough testing of the system.

            In the recent years many new airports have been opened which have been equipped with the most modern and advance technology regarding cargo and baggage handling, flight information and ticketing etc. But all the debuts of these airports have been troublesome and most have faces system failures resulting in public fiasco. IT problems have been common in the initial days of operation. There are several factors behind these failures and problems regarding IT infrastructure of airport operations.

            Lack of proper planning is one of the major factors, which may result in the failure of any IT system. Because in the 90s IT was a new emerging trend the planners and designers paid little or no attention towards the requirements of an IT system in the initial plan. Though this was not exactly what happened in this case as IT was considered since the initial planning phase, but other examples like the Denver airport baggage handling fiasco in 1995 was. The failure of the automated baggage handling system on the Denver airport was primarily attributed to the lack of planning. IT was not considered in the initial planning phase and they brought Boeing Airport Equipment when 2 years have passed since the construction has begun. Most of the baggage handling infrastructure like tunneling was already completed, which not the part of the initial design of BAE. The tunnels have acute curves, which were not appropriate for the automated baggage system. The result was that most of the baggage was either crushed or torn apart during the process.

In the case of Chek Lep Kok airport IT was simply neglected or the top management misjudged its importance and they paid the consequences. The main flaw in the operation was the lack of contingency plan in case of system failure. According to the inquiry report the top management only half-heartedly developed a backup system, but it was not used when the data center or the flight information system failed.

Another important factor, which has always been ignored during new installations, is the lack of training and familiarity of the staff. The system operators seemed completely unaware and unfamiliar about the way they have to handle the system. According to the inquiry report the management did not gave enough time for proper training exercise for the system operators and most of them had to work on the system during a full scale operation and working environment. Most of the staff was inadequately trained, which result in this failure.

            The primary factor, which has mostly participated in creating problems in the IT systems of new airports, is the lack of proper testing. As mentioned in the inquiry report of the Select Committee, that the management completely ignored the report regarding the unreliability of the system and did not requested a deferral of the opening of the airport. Same was the case of Denver airport earlier where the management did not heed the advise of Munich airport management of at least two years of testing of their baggage handling system. The same was the situation here that the AA management and the governing body both completely ignored or misunderstood the situation and condition of the IT system and granted an approval for the opening of the operation.

            Another important cause of the failure of the IT systems in new airport is the system overload. As in the case of Hong Kong’s new airport the main reason of all the fiasco was the system overload. It was primarily a fatal management decision, and lack of IT vision and understanding, which led to this situation. The integration of the data center and Flight Information Display System was also questioned at this time. One more reason, which may count, to the failure of the FIDS was that no user requirement was determined before awarding the contract to the system developer. This resulted in severe integrity problems with the infrastructure of the airport and also the increase in cost of development of the system.

            The overall factors and reasons which normally participated in the failure of problems of the IT systems are lack of proper planning, lack of training and proper testing of the new technology.

            It is essential to complete a sophisticated and technical project that a Project Manager who is accomplished in the related technical knowledge leads it. The main reason of the failure of the project initially was that it was led by those who have little or no experience in Airport construction and operations. That is why the top management made some decisions during the planning and construction phase, which proved to be fatal. As the inquiry has pointed out if the project manager has more technical information, it would have been vital in important decision-making and those problems that arose during the opening day would have been avoided. Professionals should always be selected as the leaders of technical projects. Experienced engineers, who have deep experience in the field of construction, normally lead most of the construction projects.

When non-professional and technical managers lead such projects, they do not have the core technical knowledge regarding the project. Consequently they have to rely on their technical subordinates or advisors. This often leads to misunderstanding of the critical issues and the prospect of error of judgment becomes more and more common. In most cases these non-technical managers make some decisions, which prove to be fatal and disastrous for the entire project. Often misunderstanding between the technical staff and non-technical top management is based on bias, which further complicates the situation. In this situation most of the project managers completely ignore the suggestions of the technical staff and decide on their own judgment. The results are nearly the same, as they appear to be in the case of CTK airport as the Select Inquiry Committee reported that with a exception of one or two of the members of the top management none of them had any experience in airport construction and operations.

            Speaking about the IT project it is better that an IT person would lead a project, because he has core knowledge about the development and implementation of the project. But it is also vital for the success of the project that the end users are also involved during the development and planning phase. Determining the end user requirements is the fundamental part of planning and designing an Information System. As noted by the inquiry committee in the report, the main reason of the failure of the FIDS was that the management failed to provide the developer appropriate end user requirement of the system as result the system got overloaded and recurrently crashed.


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