Part 3 needs to be done 4 hours

INFO 646 IS MANAGEMENT ASSIGNMENT 5

ACQUISITION & RESOURCE PLAN, BUDGET AND BUSINESS CASE

For all parts of this assignment, define the changes for a single project from the IS Roadmap of Assignment 3. Pick one that has that impacts more than one business user-group and also has a few different types of IT components. This is just intended for you to learn where to start with this type of plan- I am not expecting you to understand everything about your company, but just to think about types of change that would be required. You should have enough information from previous assignments to avoid any additional research!

PART 1. IT ACQUISITION PLAN

Identify the main hardware, software, and infrastructure components that need to be acquired for your project, from the IT Roadmap produced for assignment 4.

Briefly discuss the main requirements for each of the IT components- for example, a database management system may need to collect data across global business groups and so will need to be managed across distributed servers, requiring a sophisticated data management architecture such as Oracle RTI Distributed Data Management platform for real-time systems.

Briefly discuss and justify how each main component will be acquired. You analyzed this for the high-level software applications in assignment 4. Now analyze the lower-level components that are needed to support these- for example we might need to purchase a scalable DBMS package because consistency of data management is required across business divisions, or we might need to develop enhancements to the middleware interface because we need to integrate software packages from multiple vendors across our systems. You don 't have to understand every detail­ just try to think through the main components that are likely to be required.

Provide an overview table, that summarizes how the main IT Roadmap components will be acquired and when each is required. (You'll use this for the budget, below).

So what? Briefly summarize the main acquisition issues and risks that arise from this plan (e.g. evaluating the number of user licenses for the DBMS system, or testing for middleware compatibility).

Overview:

The IT Acquisition Strategic Plan identifies discrete and actionable steps to be taken to address short-term gaps necessary to streamline and optimize the IT acquisition process for Apple Inc., and identifies an appropriate IT acquisition life cycle model to best meet the implementation needs of RFID Inventory Management System and Customer Feedback Management System.

Scope:

The IT Acquisition Strategic Plan has been developed to ensure that four key variables – people, processes, policies and technology – as related to the acquisition of IT goods and services are appropriately aligned to provide for an effective and efficient acquisition life cycle model that drives the greatest value for Apple Inc. In the following, the main focus will be on the technology and process aspects of the plan.

Acquisition Lifecycle

For the purposes of this document, the concept of the Acquisition Life Cycle is defined as a process that connects business need with fair and effective methods to acquire goods and services needed to fulfill those needs. Initial stages build best practices to prioritize, plan, and procure goods and services. Vendors and projects are managed to deliver outcomes and meet scope commitments. Individual contracts and the overall contract portfolio are optimized through performance assessments that inform future acquisitions.

RFID and CFMS Implementation Roadmap Prioritized:

Software and Information Services:

· RFID Scanner Application - This software run on the handheld RFID scanning devices that will be used at a variety of locations. The key feasibility issue will be ensuring that different functionalities are supported, i.e. manufacturers will need to register the RFIDs while distributors will need to find them. Moreover, with the variety of manufacturers and their dispersion throughout various countries, customization and localization (especially language localization) will require some time. The application in itself will be a COTS product from Honeywell which will be further customized to Apple’s environment with the help of in house staff or consultants. The application itself will preside over a SQL Database developed in house owing to its scalability.

· Inventory Management Software - This software serves as the broker between handheld RFID scanners, the supply chain/logistics, and the databases/data warehouse. The largest hurdle will be ensuring that this software interacts seamlessly with the different systems/hardware it connects to as well as being available at all times globally. This will be built on top of a distributed system which is available from Oracle.

· ERP Solution - the integration of the RFID system into the ERP consists of aligning the various processes and software functionality of Apple’s ERP system with the new RFID processes. Reporting, sales forecasting, logistics, and other business functions will each have a need to realign their processes and the demands of the ERP system, which will take considerable time for developers to code. This stage of the process cannot begin until the Inventory Management Software is quite far along in development. SAP ERP solution offers flexibility and scalability with other customized applications.

· Website for feedback collection - the Apple website will need to be updated to allow for the integration of the website’s feedback pages to interface with the new CRM software. As the website is readily available and accessible anywhere, this is the first place for collecting consumer feedback that should be tackled. This development will be done in house.

· Employee-based applications for feedback collection (call center, in-store) - applications will need to be developed and integrated into the CRM to allow for employees who speak directly with consumers to enter customer feedback. The key area of concern is to create a standard, comprehensive application to allow employees to input relevant and accurate customer feedback (unclear and/or unactionable input from employees was the greatest problem previously). As customers turn to employees for help as much as the website, the applications for feedback collection via employees should be developed as soon as possible. This development will be done in house.

· Device-based applications for feedback collection - the applications to allow for collection of consumer feedback in devices is the most difficult of the feedback applications to develop because of the variety of devices that will need to be supported. The device-based feedback will be easier for consumers to give but will take longer to develop. Subsequently, the website and employee-based applications for feedback should be completed first to allow for feedback collection while the device-based applications are in development. This development will be done in house.

· Standardized CRM software across company - this system will allow for the integration and dispersal of the feedback generated by the different collection applications. The greatest hurdle will be to ensure that feedback is standardized (i.e. feedback from the employee is not in a different format than direct-from-consumer feedback) and can be distributed to business units in an effective format. The integration of the data warehouse will allow for access to stored information. For this Apple will deploy Oracle’s CRM solution for better interoperability with Inventory Management System.

Hardware & IT Infrastructure

· RFID Scanners - the handheld scanners used by manufacturers, suppliers, and other employees. The key to these pieces of infrastructure is that they be consistent across the vast array of suppliers, manufacturers, and distributors. The product of choice is Intermec by Honeywell. These will come in fixed (IF61) and handheld flavors (IP30).

· Local servers for managing RFID tag data collection - These are the onsite servers for gathering and storing RFID information in local databases which will connect with the larger inventory management system and data warehouse. For the sake of reducing energy consumption and cost the servers will be based on ARM Architecture. The choice of clusters is Cavium’s ThunderX family of CPUs, which are 64-bit 2.5 GHz processors using ARMv8 system on a chip design with 24 to 48 cores.

· Centralized servers for Inventory Management Software and Data Warehouse - the servers hosting the inventory management software will be centralized (possibly in clusters) to ensure security and access only by Apple corporate employees (versus the local RFID database servers at supplier and manufacturer locations). This setup will be feasible only if the current communications network is able to handle the added strain, which it should be able to with minimal upgrades on Apple’s part. These high end servers will utilize state of art IBM eX5 which has management and support options, can solve for workload optimization, intelligent analytics, cloud and asset utilization, data center efficiencies and IT economics.

· CRM servers - The CRM servers will host the applications and software to run the CRM system. These will be centrally located and under the direct control of Apple corporate to ensure security and integrity. Considering the load on CRM servers and cost analysis, the server will be using HP ProLiant DL300 servers.

Integration Platform

· Inventory Management System & RFID - the inventory management system integrates the hardware, floor-level scanning of the RFID tags with the larger software-based supply chain and business functions. The solution being used will be Oracle’s solution with get the feed from Honeywell’s RFID solution. Custom interface and codes will be developed by incoming consultants followed by training of in house staff.

· Data warehouse & CRM- the data warehouse serves to integrate the local RFID tag information from the databases with the inventory management system and larger supply chain. The greatest integration hurdle will be ensuring that local data in the data warehouse is timely and accurate enough for making business and manufacturing decisions. Apple will look to hire SAP ERP consultants and Oracle Solutions Architects to achieve a sync between the adjoining systems.

Acquisition Issues and Risks:

1. Integration and Interoperability of Oracle, Honeywell and SAP solutions – SAP ERP, Oracle CRM and Honeywell each are backwards compatible to their previous versions but a significant level of coding and interface development will be needed for one system to interact with the other.

2. Allocation of Resources – With the setting up of data centers, servers and hiring of consulting professionals, the management will have to allocate significant resources for the next 18 months.

3. Information Security responsibilities should be defined and documented for all consulting professionals through the SDLC phase.

4. Risk and Impact Analysis should be performed prior to implementing any kind of changes to Apple’s production environment.

5. Thorough documentation must be developed for all the development work, which includes Standard Operating Procedures, Troubleshooting Guides and Training Material for employees.

6. Regression testing must be performed on the hardware used to support servers to test out the response time.

7. Physical security of equipment at Apple sites and datacenters must be ensured and should be on part with its corporate baseline security controls.

8. Apple must have a support service contract in place with SAP, Oracle and Honeywell for support with break fixes and emergency availability issues.

9. Apple must get a corporate license for SAP ERP and Oracle CRM. License for Honeywell’s RFID scanner will be on a per unit basis.

10. Threat, vulnerability and penetration testing must be done on all integrated system to check for compliance with Corporate Apple Standards.

PART 2. ORGANIZATIONAL CHANGE & RESOURCE PLAN

2.1 Change plan

Discuss briefly how the business organization and the IS organization will change.

2.1.1 Specify changes to key business processes

What business processes need to change and why? (You can take these process changes directly from assignment 3). How will these be redesigned and how will the BPR initiative be managed?

Also consider business management roles and responsibilities: how will these change when the new business processes are in place­ what new or revised management positions or organizational groups will be needed?

The main business process that needs to change is IT Management. With the introduction of the two new systems (RFID Inventory Management System and Customer Feedback Management System), there needs to be an acquisition team or department under IT Management. This team will be responsible for developing, testing, implementing, coordinate training, and maintaining the Customer Feedback Management System (CFMS); in addition, the team will allows work with the chosen vendor to configure an RFID Inventory Management System tailored to our organization. Once testing is completed the team will have to prepare and instruct for every device receiving a RFID tag in every store or warehouse. With addition of the acquisition team the rest of the organization is able continue to flow without interruptions, especially the research and development team, which the company heavily depends on to be innovative and product results.

The reason the IT Management is was is required to change is because as Apple is a global leader in IT products, it is key for the IT department to continue to look for ways to better the company as a whole. Management cannot be afraid to add an internal organization such as an acquisition team to help deploy software solutions that will better the company in the long run, if not increase production immediately.

2.2.2 Define how the IS organization should change.

What cross-functional and/or specialized business process and/or information service support will be needed? Where will contract staff be required? Who will manage any external contracts or vendor deliverables that are required for this project? How will you reorganize the IS group, to manage these changes?

Support and maintenance is a requirement when it comes to technology, especially implementing a new technology system(s) into an environment. This is where the acquisition team will be the primary support for issues that arise. They are best equipped to solve problems for the CFMS system being that they developed it. In addition, they are also best to answer questions about the RFID system since they coordinated with the vendors who supplied it. Any issues that arise they can easily at as an escalation point and reach out to the vendor for advance troubleshooting. The acquisition team would be designed to be the main point of contact or hub station for all issues or concerns regarding any system wide software rollout or integration.

2.2 Resource Plan

Come up with a ballpark "guesstimate" of personnel changes that will need to be included in the plan, from parts (a) & (b) above. Consider:

· What BPR teams will be required and how much time might this take (man-weeks)?

· What IS a project team will need to be assembled, to develop or configure IT components?

· How long do you estimate each development project might take?

· Who will be required to manage and maintain these software applications, information services and IT infrastructure components? Over what timeframe?

· What vendor liaison or contract management personnel will be required? Over what timeframe?

· What user support personnel will be required? Over what timeframe?

· How will these personnel be resourced - for what key positions do we need permanent hires?

· Where might we be able to hire contract staff?

· What additional personnel are required for organizational and management changes?

Provide an overview table, with estimated numbers of personnel and the timeframes when they are required. (You’ll use this for the budget, below).

Task	Timeframe	Man	Hours (per week)
Develop Acquisition team (6 man team)	1 month	3	4
Evaluate (RFID) venders	1 month	3	8
Test RFID System	2 months	4	12
RFID Implementation	4 months	6	60
CFMS Development	6 months	6	40
CFMS Testing	3 months	4	8
CFMS Implementation	1 months	4	4
Training	1 month	3	4
Maintenance and Support	On going	4	15

2.3 So what? Discuss Resource Management Issues & Risks

Briefly summarize the main resource management issues and risks that arise from this plan.

PART 3: PROJECT BUDGET

3.1 ROI BUDGETING

Produce an outline budget on the basis of the organizational change and acquisition and resource plans outlined above. Just use ballpark estimates (ballpark- don't itemize every small task but itemize the main elements, providing the basis for your estimates - hint: most of these should be in parts 1 & 2). Budget for elements such as (this is not an exhaustive list):

1. Costs (plan on system application lifecycle = 5 years):

· Business process analysis and redesign costs

· Application development or package acquisition and customization

· Hardware/software purchases and licensing (per user- just estimate scale)

· Vendor contract and vendor oversight or management costs

· Infrastructure installation, test, introduction

· Training, HR, reorganization and business process change costs.

2. Benefits (again plan on system application lifecycle = 5 years). Consider both tangible and intangible benefits and best-case/worst-case benefits, budgeting for elements such as:

· Business benefits in terms of monetizing achievement of the critical success factors supported by this project.

· Cost-savings and economies of scale, scope, or the business value of effectiveness gains supported by this system (just have a go at evaluating the latter: use your KPIs or evaluate qualitative measures of success to do this)

· Cost-savings derived from IT organizational or resourcing changes such as reductions in the cost of legacy system maintenance & enhancements, reorganization headcount reductions, licensing and hardware replacement savings (over the 5-year lifecycle period)

· Cost-savings and effectiveness benefits derived from BPR changes.

· Cost-savings and effectiveness benefits derived from improved information services.

So what? What is the difference between a best case/worst case analysis of the ROI? Do you think the project is worth supporting at this point? What did you "fudge" to provide this budget and how much difference did it make?

3.2 TCO BUDGETING

Assess the total cost of ownership of the new system (ballpark- don't itemize every small task but itemize the main elements, providing the basis for your estimates). See my how-to budget slides for a list of elements to include in the TCO calculations.

Perform an analysis of how the benefits might change over the lifetime of the project (5 years), using your best-case/worst-case figures as a starting point.

Combine the TCO with the revised benefits analysis, to produce a financial analysis of the ROI over a predicted lifetime of 5 years.

So what? What did you learn, that you did not understand when you produced the simple ROI financial analysis for project selection? Does this change the financial attractiveness of your project?

3.3 NPV BUDGETING

Use a net present value (NPV) approach that considers the timing of various deliverables in cost or benefit estimation- e.g. that it costs you less to spend $100 in 2 years' time than it would today and that accounting for discounted cash flows changes the break-even point of a project. (See the worked spreadsheet example on Blackboard).

So what? What did you learn, that you did not understand when you produced the TCO financial analysis for project selection? Does this change the financial attractiveness of your project?

PART 4: PLAN SUMMARY

For the selected project, make a business case that summarizes and justifies each of the following aspects:

· The key business process and organizational changes (including IS organization) required for the project - and why these are required.

· The key technology architecture and infrastructure changes required for the project (not at the detailed level above -just provide an overview and justification for these).

· The budgetary case for this change (using a predicted 5 year system lifecycle before major updates or replacement must be considered).

· Project feasibility and risk- what major risks or feasibility issues does the project present and how will these be managed?

· Business benefits - how strategic business goals and outcomes will be supported by implementing this project and why this project is important to the business as a whole.

So what? Would you recommend this project and why/why not? What issues or project elements do we need to monitor most carefully, as the project proceeds?

Technology architecture

The technology architecture needed for the implementation of these two projects is no small matter. For the RFID system, we will need servers and communication products for vendors, increased server and communication capacity for the data warehouse/ERP system, and we will need scanners for all around. The infrastructure cost of implementing these systems will be high and their installation, especially in vendor locations, will not move especially fast. In terms of application costs, the creation of databases and data warehouses will be of moderate expense. The software to be run in the scanners will not be costly to acquire but the need for localization increases the cost, though not prohibitively. Lastly, the integrating into the ERP system will mean that ERP developers will need to focus on this project rather than others. The trade off costs associated with working on this project over others is not significant however. In total, the development costs for the system are moderate given the size of the project. So, while investment in this system is high, products can be more effectively tracked leading to less loss and logistics during production can be simplified and potentially streamlined. The savings to be realized in this system are subsequently expected to be worth the investment.

The CRM solution has a much lower investment for the company. The main changes will take place in processes and less in the technology. Nonetheless, Apple will incur costs in the implementation. Databases and data warehouses will need to be realigned and expanded in addition to requiring additional server capacity, a low cost. The website for the Apple will need to be modified to accommodate the new functionality, which is a truly marginal cost. The largest costs exist in the form of application changes in the call center and the planned device-based applications for collecting feedback. These are not, however, expected to be overly large or burdensome. On the whole, the technology costs associated with the project are relatively small and do not imply need to review its feasibility.