System Costs

OBJECTIVES

When you finish this chapter, you will be able to:

· Provide a checklist of issues to consider when selecting a system architecture

· Trace the evolution of system architecture from mainframes to current designs

· Explain client/server architecture, including tiers, cost-benefit issues, and performance

· Compare in-house e-commerce development with packaged solutions and service providers

· Discuss the impact of cloud computing and Web 2.0

· Define network topology, including hierarchical, bus, ring, star, and mesh models

· Describe wireless networking, including wireless standards, topologies, and trends

· Describe the system design specification

INTRODUCTION

At this point in the SDLC, your objective is to determine an overall architecture to implement the information system. You learned in Chapter 1 that an information system requires hardware, software, data, procedures, and people to accomplish a specific set of functions. An effective system combines those elements into an architecture, or design, that is flexible, cost-effective, technically sound, and able to support the information needs of the business. This chapter covers a wide range of topics that support the overall system design, just as a plan for a new home would include a foundation plan, building methods, wiring and plumbing diagrams, traffic flows, and costs.

System architecture translates the logical design of an information system into a physical structure that includes hardware, software, network support, processing methods, and security. The end product of the systems design phase is the system design specification. If this document is approved, the next step is systems implementation.

PREVIEW CASE: Mountain View College Bookstore

Background: Wendy Lee, manager of college services at Mountain View College, wants a new information system that will improve efficiency and customer service at the three college bookstores.

In this part of the case, Tina Allen (systems analyst) and David Conroe (student intern) are talking about system architecture issues.

Participants:

Tina and David

Location:

Mountain View College cafeteria, Thursday afternoon, January 9, 2014

Project status:

The team completed user interface and data design work. The last step in the systems design phase is to consider a system architecture for the bookstore system.

Discussion topics:

System architecture checklist, client/server architecture, processing methods, and network issues

Tina:

Hi, David. Did you enjoy the holiday break?

David:

I sure did. Now I’m ready to get back to work.

Tina:

Good. As the last step in the systems design phase of the SDLC, we need to study the physical structure, or architecture, of the bookstore system. Our checklist includes our college’s organization and culture, enterprise resource planning, total cost of ownership, scalability, Web integration, legacy systems, processing methods, security issues, and portals that could affect the system design.

David:

So, where do we start?

Tina:

Well, the bookstore interfaces with many publishers and vendors, so we’ll consider supply chain management, which is part of enterprise resource planning, or ERP for short.

David:

What happens after we finish the checklist?

Tina:

Then we’ll define a client/server architecture. As I see it, the bookstore client workstations will share the processing with a server in the IT department. Also, we may need to look at middleware software to connect the new system with existing legacy systems, such as the college accounting system.

David:

Anything else?

Tina:

Yes. We need to select a network plan, or topology, so we’ll know how to plan the physical cabling and connections — or possibly use wireless technology. When we’re done, we’ll submit a system design specification for approval.

David:

Sounds good to me.

Tina:

Good. Here’s a task list to get us started:

FIGURE 10-1 Typical system architecture tasks.

© Cengage Learning 2014

ARCHITECTURE CHECKLIST

Just as an architect begins a project with a list of the owner’s requirements, a systems analyst must approach system architecture with an overall checklist. Before making a decision, the analyst must consider several issues that will affect the architecture choice:

· Corporate organization and culture

· Enterprise resource planning (ERP)

· Initial and total cost of ownership (TCO)

· Scalability

· Web integration

· Legacy system interface requirements

· Processing options

· Security issues

· Corporate portals

Corporate Organization and Culture

To be successful, an information system must perform well in a company’s organization and culture. For example, consider two large bicycle brands, Green Bikes and Blue Bikes. Each firm has three operating divisions: an Asian subsidiary that manufactures the bicycles, a factory in Los Angeles that produces bike accessories and clothing, and a plant in Canada that makes bike carriers, racks, and custom trailers.

On the surface, the two firms are similar, but they have very different organizations and corporate cultures. Green Bikes is highly centralized, and oversees day-to-day operations from its Los Angeles office. Blue Bikes also has a Los Angeles executive office, but allows its three business units to operate separately, with minimal corporate oversight. Both firms are successful, and it is unlikely that their managerial styles will change anytime soon.

Suppose you were a consultant, and both firms asked you to suggest an IT architecture that would boost productivity and reduce costs. How would corporate organization and culture issues affect your recommendation? There is no easy answer to that question. The best approach probably would be to study day-to-day business functions, talk to users at all levels, and focus on operational feasibility issues, just as you did earlier in the development process.

Enterprise Resource Planning (ERP)

Many companies use enterprise resource planning (ERP) software, which was described in Chapter 1. The objective of ERP is to establish a company-wide strategy for using IT that includes a specific architecture, standards for data, processing, network, and user interface design. A main advantage of ERP is that it describes a specific hardware and software environment, also called a platform , that ensures connectivity and easy integration of future systems, including in-house software and commercial packages.

Even though ERP has been very popular, some argue that it is outdated because of major advances in technology. For example, in her CIO Magazine article shown in Figure 10-2, author Karen Goulart calls ERP an “old workhorse.” She suggests that ERP’s future success depends on integrating new technologies such as mobility and cloud computing, among others. In other words, an ERP designer might have to bring enterprise data, anytime, anywhere, to a smart phone in a sales rep’s pocket.

Many companies are extending internal ERP systems to their suppliers and customers, using a concept called supply chain management (SCM) . For example, in a totally integrated supply chain system, a customer order could cause a manufacturing system to schedule a work order, which in turn triggers a call for more parts from one or more suppliers. In a dynamic, highly competitive economy, SCM can help companies achieve faster response, better customer service, and lower operating costs.

FIGURE 10-2 Is ERP outdated, or will it still be around? Author Karen Goulart says that ERP’s future success depends on integrating new technology, such as mobility and cloud computing.

© 2007–2012, TechTarget

Microsoft offers an enterprise solution called Microsoft Dynamics, as shown in Figure 10-3 on the next page. The interesting “test drive” video provides a scenario-based preview of how the software can integrate financial management, customer relationship management (CRM), supply chain management (SCM), and business metrics.

CASE IN POINT 10.1: ABC SYSTEMS

You are a systems analyst at ABC Systems, a fast-growing IT consulting firm that provides a wide range of services to companies that want to establish e-commerce operations. During the last 18 months, ABC acquired two smaller firms and set up a new division that specializes in supply chain management. Aligning ABC’s internal systems was quite a challenge, and top management was not especially happy with the integration cost or the timetable. To avoid future problems, you have decided to suggest an ERP strategy, and you plan to present your views at the staff meeting tomorrow. ABC’s management team is very informal and prefers a loose, flexible style of management. How will you persuade them that ERP is the way to go?

Initial Cost and TCO

You learned earlier about the importance of considering economic feasibility and TCO during systems planning and analysis. TCO includes tangible purchases, fees, and contracts called hard costs. However, additional soft costs of management, support, training, and downtime are just as important, but more difficult to measure.

Firms such as Micromation, which is shown in Figure 10-4 on page 409, offer specialized TCO analysis, benchmarks, and consulting. As the Micromation chart shows, user-related costs represent a very large slice of the total pie.

A TCO analysis should include the the following questions.

· If in-house development was selected as the best alternative initially, is it still the best choice? Is the necessary technical expertise available, and does the original cost estimate appear realistic?

· If a specific package was chosen initially, is it still the best choice? Are newer versions or competitive products available? Have any changes occurred in pricing or support?

· Have any new types of outsourcing become available?

FIGURE 10-3 Microsoft invites you to watch or take a scenario-based test drive of its Microsoft Dynamics product.

Screenshots used with permission from Microsoft.

· Have any economic, governmental, or regulatory events occurred that could affect the proposed project?

· Have any significant technical developments occurred that could affect the proposed project?

· Have any major assumptions changed since the company made the build versus buy decision?

· Are there any merger or acquisition issues to consider, whereby the company might require compatibility with a specific environment?

· Have any new trends occurred in the marketplace? Are new products or technologies on the verge of being introduced?

· Have you updated the original TCO estimate? If so, are there any significant differences?

FIGURE 10-4 The Micromation site suggests that soft costs are very significant, but are more difficult to measure.

© 2012 Micromation

The answers to these questions might affect the initial cost and TCO for the proposed system. You should review system requirements and alternatives now, before proceeding to design the system architecture.

Scalability

A network is composed of individual nodes. A node represents a physical device, wired or wireless, that can send, receive, or manage network data. For example, nodes can be servers, workstations, shared printers, mass storage devices, wireless access points, or mobile computers.

Scalability , also called extensibility , refers to a system’s ability to expand, change, or downsize easily to meet the changing needs of a business enterprise. Scalability is especially important in implementing systems that are volume-related, such as transaction processing systems. A scalable system is necessary to support a dynamic, growing business. For example, a scalable network could handle anywhere from a few dozen nodes to thousands of nodes, and a scalable DBMS could support the acquisition of an entire new sales division. When investing large amounts of money in a project, management is especially concerned about scalability issues that could affect the system’s life expectancy.

Web Integration

An information system includes applications , which are programs that handle the input, manage the processing logic, and provide the required output. The systems analyst must know if a new application will be part of an e-commerce strategy and the degree of integration with other Web-based components. As you learned earlier, a Web-centric architecture follows Internet design protocols and enables a company to integrate the new application into its e-commerce strategy. Even where e-commerce is not involved, a Web-centric application can run on the Internet or a company intranet or extranet. A Web-based application avoids many of the connectivity and compatibility problems that typically arise when different hardware environments are involved. In a Web-based environment, a firm’s external business partners can use standard Web browsers to import and export data.