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IT Architecture Evolution and Alternatives


									IT Architecture: Evolution and
           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
• 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
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

Information   Application       Hierarchical and       Hypertext and OO
Storage       specific data     relational databases   Knowledge Mgmt. Sys.

Integration   Data only         Beginning support      Sophisticated integration
Level                           for all information    of voice, video,data,
                                classes but limited    text, graphics.
  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

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)
         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
                  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
                   1969 Intel’s begins to build first microprocessor 4004
                   1971 Intel develops 8008, IBM attains 62% market share in
                   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
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.
                                       to single protocol)
• Improve application
development process                    – Decrease headcount for
                                       IT professionals.
    – Reduce cost of IT
    application development
    – 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
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
                                                            • Increase cash flow
• Reduce cycle time
                                                            • Improve competitive position
• Reduce or improve process
                                                            • Increase market share
                                                            • Improve analysts’ assessment and
• Decrease product defect rate
• 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
       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
                                           policies and
Sabotage      Can someone enter my         Firewalls
              internal information systems Firebreaks
              and / or networks and access
              private information or
              destroy / alter information?
   Assimilating Emerging Information
• Phase I: Technology Identification
• Phase II: Technological Learning and
• Phase III: Rationalization / Management
• Phase IV: Maturity / Widespread
  Technology Transfer
The Organization and IT Design Challenge of the
          Phase I
     Decision to invest             Success
    and project initiation

Lack of                           Phase II
attention and                Technology learning
commitment                                              Success
                                and adaption
   Block A                   Narrowly
                             focused and not
                                                        Phase III
                                                   Rationalization and       Success
                              Stagnation           management control
                               Block B
                                               Too efficiency
                                               dominated                       Phase IV
                                                                         Widespread technology
                                                    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.

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