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IT Architecture: Evolution and Alternatives Chapter 6 Components of an IT Architecture Value – Creating Business Opportunities Commerce Content Community Value – Enabling IT Infrastructure Solutions and Services • ERP • Internet Service Provider Security and Control • Supply chain mgmt. •Systems Integration Services • Outsourcing and hosting Software Productivity and Development Tools • Packages (Word processing, spread sheets, e-mail etc.) • Programming languages (C++, Visual Basic, Cobol, Basic etc.) Computing Communications • Hardware • Hardware •Operating Systems • Network Operating Systems •Database Mgmt. Sys. •Gateways • Document Mgmt. Sys. • E-mail and file transfer sys. Evolution of IT Architecture • Era I : The Mainframe (1950s to 1970s) • Era II: The Personal Computer (Late 1970s to 1980s) • Era III: Network Computing (1990s to Present) Three Eras of IT Evolution – IT Paradigm Mainframe Era Microcomputer Era Network Era (1950s to ‘70s) (late 1970s to ‘80s) (late 1980s to pres.) Dominant Mainframe: Microcomputer: Client-server and Technology “Centralized “decentralized Internet: “distributed intelligence” intelligence” intelligence” Org. metaphor Hierarchy Entrepreneurial Networked/info.Age Primary IT role Automate Increase Create Value existing individual/group processes effectiveness Typical User IT Specialists IT-literate business Everyone analysts Location of Use Computer room Desktop Everywhere Justification ROI Increased Multifaceted business productivity and value and analysis decision quality Three Eras of IT Evolution – Info. Mgmt. Mainframe Era Microcomputer Era Network Era (1950s to ‘70s) (late 1970s to ‘80s) (late 1980s to pres.) Information Data Information Knowledge Level Information Application Hierarchical and Hypertext and OO Storage specific data relational databases Knowledge Mgmt. Sys. files Integration Data only Beginning support Sophisticated integration Level for all information of voice, video,data, classes but limited text, graphics. integration Three Eras of IT Evolution – Comm. Mgmt. Mainframe Era Microcomputer Era Network Era (1950s to ‘70s) (late 1970s to ‘80s) (late 1980s to pres.) Connection Thick wire Cable, fiber, cellular, Cable, fiber, cellular, Media coaxial cable, satellite; channels satellite; beginning microwave and remain separate channel integration satellite Transmission Proprietary Proprietary (LAN): Merging LAN/WAN Protocols (WAN): packet Ethernet, token ring technology: ATM, switching, frame-relay; open circuit switching standards Maximum 56 Kbps 1 Mbps 10 gbps (and higher) transmission rates Information Technology Timeline IT Era Key Events The Early Years 1823 Charles Babbage begins work on the first of his Before 1960 machines to mechanize solutions to generate algebra problems 1890 Herman Hollerith develops the punch card tabulator 1911 Hollerith’s company and others combine; name changed to IBM in 1924 1930 Claude Shannon’s thesis explains how electrical switching circuit can model boolean logic 1939 Mark I the first digital computer 1943 ENIAC, first all electric digital computer 1947 The transistor perfected 1956 John Barden, Walter Brattain, and Williams Shockley share the Nobel Prize in physics for the transistor Information Technology Timeline – Contd. IT Era Key Events Mainframe Era 1964 IBM announces S/360, first time transistors were used. 1960s to 1970s 1964 BASIC was developed by John Kemeny and Thomas Kurtz 1969 Intel’s begins to build first microprocessor 4004 1971 Intel develops 8008, IBM attains 62% market share in computing 1972 Gary Kildal writes PL/I, the firs programming language for 4004 Pre-PC Era 1960s 1962 Tandy Corporation buys Radio Shack electronic stores to 1970s 1972 Bill Gates and Paul Allen form Tarf-O-Data 1974 Intel invents 8080, Xerox releases the Alto 1974 Radio Electronics publishes an article calling the Mark 8 “your personal minicomputer”. 1975 Microsoft’s BASIC for Altair Information Technology Timeline –Contd. IT Era Key Events PC Era Late 1970s 1977 Apple’s Apple II and Commodore’s PET introduced and 1980s 1979 MicroPro releases WordStar 1980 The Apple III is announced, Microsoft’s contract with IBM for developing Disk Operating System (DOS) 1981 Xerox releases the 8010 Star and 820 computers 1981 IBM releases its personal computer 1984 Apple announces the Macintosh Network Era 1982 Sun Microsystems is founded on the premise that the 1990s and beyond “network is the computer” 1992 CERN introduces the World Wide Web 1993 Intel’s Pentium chip was introduced, NCSA’s Mosaic graphical browser was introduced 1994 Netscape introduces Navigator 1995 Windows 95 by Microsoft 1996 Sun’s Java was introduced 1997 RCA introduces its Network Computer, priced at $295 Value Creation in a Networked Environment - Framing the Business Case for Network Computing Benefits from Investments in Value-Enabling Infrastructure Category of Benefit Organizational Benefits Market/Industry Benefits Category I: Improve ability to share Improve ability to share Platform information, communicate, information, communicate, and improvements and control activities inside control activities with the org. customers, suppliers, and business partners Category II: Increase the functionality, Increase the functionality, Options value flexibility, and “useful life” flexibility, and “useful life” of of the internal IT the industry IT infrastructure infrastructure Framing the Business Case for Network Computing – (Contd.) Benefits from Investments in Value-Enabling Infrastructure Category of Benefit Organizational Benefits Market/Industry Benefits Sample Metrics • Lower operating and • Increase the useful life of • Increase range of options for maintenance cost the platform new business solutions – Consolidate data centers – Decrease upgrade costs – Increase the number of – Reduce the cost of for new technologies value-creating business operating and – Enable flexible, modular solutions. manufacturing data centers (“lego approach”) – Enabling new business – Decrease headcount for IT – Streamline and simplify networks (multiprotocol building opportunities. professionals to single protocol) • Improve application development process – Decrease headcount for IT professionals. – Reduce cost of IT application development projects – Decrease the time needed to deploy new IT-enabled business solutions. Framing the Business Case for IT: A Value-Based Approach to Identifying Business Benefits from Investments in Value-Enabling Business Solutions Category of Benefit Organizational Market/Industry Opportunities Opportunities Category III: Improve core operating Improve existing Commerce activities inside the firm supply/distribution channels that (e.g., procurement, sales, link that link the firm to customer service) customers, suppliers, and business partners or create new ones Category IV: Improve decision making Exploit the economic value of Content and enhance information by adding value to organizational learning existing products and services and creating new ones. Category V: Enhance collaboration and Establish a position at the center Community coordination of work and of an electronic market and commitment and loyalty of maintain that position by ensuring individuals and teams loyalty of all members Framing the Business Case for IT: A Value-Based Approach to Identifying Business Benefits from Investments in Value-Enabling Business Solutions Process Performance Increase shareholder Increase Revenues, Profits, and Improvements Loyalty Value-Added Savings Sample Metrics • Increase sales in existing markets • Reduce paper, comm. cost • Increased satisfaction • Increase revenue from sales in and headcount and retention new markets • Reduce cost of supplies, • Customers • Decrease price yet sustain parts, and services • Suppliers margins • Reduce transaction, • Partners • Increase profitability administrative costs and • Improve productivity • Employees inventory costs – Revenues per employee • Decrease inventory or work – Profits per employee in process – Operating margins Speed • Increase cash flow • Reduce cycle time • Improve competitive position • Reduce or improve process • Increase market share Quality • Improve analysts’ assessment and • Decrease product defect rate ratings • Decrease waste • Increase stock price • Reduce process errors Implementation Issues • Maintaining a Reliable and Secure Environment for Doing Business • Assimilating emerging technologies • Managing the IT Legacy • Merging the islands of Automation Internet Security Issues Problem Business Concern Solution Authorization Does user have permission User name and to access a specific computer password or other or collection of information? kind of access control mechanism Authentication Is the user truly who he or Digital certificates she purports to be? and other technologies used to authenticate identity Integrity Did the person sending a Digital signature message actually send it? Can the receiver be sure that the message has not been changed? Internet Security Issues – Contd. Problem Business Concern Solution Privacy Is my conversation private? Public/private key Is anyone eavesdropping or encryption spying? algorithms Fraud/theft Is anyone stealing from me? Log, audit, systems management policies and procedures Sabotage Can someone enter my Firewalls internal information systems Firebreaks and / or networks and access private information or destroy / alter information? Assimilating Emerging Information Technologies • Phase I: Technology Identification • Phase II: Technological Learning and Adaptation • Phase III: Rationalization / Management Control • Phase IV: Maturity / Widespread Technology Transfer The Organization and IT Design Challenge of the 1990s Phase I Decision to invest Success and project initiation Lack of Phase II attention and Technology learning commitment Success and adaption Stagnation Block A Narrowly focused and not Phase III marketed Rationalization and Success Stagnation management control Block B Too efficiency dominated Phase IV Widespread technology Stagnation transfer Block C IT Resource Management Pressure Toward Toward Toward Centralization Decentralization Distribution Management Hierarchical, Entrepreneurial. Information age. control Standardization. Local responsiveness. Learning. Efficiency. Effectiveness. Efficiency and Organizational Local security, effectiveness. security, reliability. reliability Global security and reliability Technology Efficient use of Effective use of Effective and resources. Specialized, resources. efficient use of costly equipment that Low-cost “off-the- resources. Mix of is required by all. shelf” equipment that is specialized and Require specialized widely available. off-the-shelf. expertise to operate Expertise needed to Mix of and manage operate and manage is specialized and widely available general expertise IT Resource Management – Contd. Pressure Toward Toward Toward Distribution Centralization Decentralization Data Organizational data. Local data. Increased need for vertical Maintain data Maintain data and lateral information standards. Level of relevance. Desire to sharing. Desire to optimize data sharing can be optimize network information relevance and accommodated by capacity and minimize standards. High capacity, network capacity and cost. low cost networks are budget. available and manageable IT Scare resources with Widely available Mix of scarce and Professionals specialized knowledge resources and generalized IT professional and expertise. generalized expertise. resources. Optimally Minimize turnover Turnover manage turnover risk/disruption. Richer risk/disruption is risk/disruption while career path for IT minimal. Background providing expanded career professionals enables lateral, inter paths. functional career path. IT Resource Management – Contd. Pressure Toward Toward Toward Distribution Centralization Decentralization End users Low level of technical Technical High levels of technical skill. Satisfied with sophistication. Desire and “information” literacy. routine information flexible access to High levels of reporting. Lack of timely information. commitment and motivation to manage Motivated to manage motivation to become an IT. IT active player in defining and managing information. Culture / Organization is Organization is Organization is structured organizational structured as a structured as as a matrix of autonomous, fit functional hierarchy. decentralized profit inter functional teams. “Command and centers. “Commitment, control” culture “Results” culture collaboration, and results” IT function has always Significant culture. Both centralized been centralized decentralization of IT and decentralized IT resources and control resources and control.
"IT Architecture Evolution and Alternatives"