INFORMATION SYSTEMS AND E-BUSINESS

Risc and Value of Applications to Organizations

Jorge Pereira, José Martins, Vítor Santos and Ramiro Gonçalves

University of Trás-os-Montes e Alto Douro, Vila Real, Portugal

Keywords: e-Business, Management, Decision support, Business intelligence, Information systems.

Abstract: We aim to analyze the current problems and the main difficulties encountered by information systems and

information technologies managers, featuring different actors and how they relate. This work introduces a

design pattern, a fact table, for management and decision support, named CRUDI Table. The CRUDI Table

is an abstraction idealized from the CRUD Matrix concept extended by an extra dimension: the importance

dimension.

1 INTRODUCTION

Today, the information systems (IS) and information

technologies (IT) managers have major challenges in

characterizing the risk and the relative importance of

each information system and each application to

support the business processes of enterprises.

The global economic difficulties have led

companies and their managers to scenarios of major

challenges, in need of constant change and evolution

that require the continued investment, but with less

budget and less time to implement them.

Quite often, business managers in organizations

have an opinion contrary to their information

systems manager, regarding the importance of an

information system and the priority of necessary

investments in information systems to better support

the business. It is also difficult to estimate the risk

assigned to each information system and to define its

need for complete replacement on certain types of

disasters (natural or others) with larger impact.

Henderson & Venkatraman (1993) defined two main

characteristics in this process:

 A direct relation between financial results and

the ability of managers to create a strategic

adjustment of the management team and

support services;

 A dynamic strategic adjustment, aligning

business objectives with information systems

objectives.

We consider extremely important the creation of

new methods and new tools to aid in the demanding

job of information systems managers because

technological development has introduced electronic

components and software in the normal day-to-day

of people and companies, even in those that

traditionally haven’t had the need for it before. The

rapid evolution of Internet and the emergence of

Web 2.0 have also created new problems, new

opportunities and new business models that imply

new management models.

The traditional models for information systems

analysis and management already consider, for

example, the use of CRUD tables for modeling

business processes and their respective information

entities. However, these same tables do not indicate

which processes and which entities are most

important to the company's business. They also

don’t indicate what system or subsystem must be

implemented first in order to have the greatest

impact on business and in the organization's future.

We intend to create new tools and analysis

models to better support the decision (making it

faster), helping the information systems managers in

their daily activity and in their strategic planning.

This paper also presents an approach and a new

method to better define business processes

importance and their related support applications,

based in a conventional CRUD matrix. We introduce

a design pattern and a fact table for management and

decision support, named CRUDI Table. The CRUDI

Table is an abstraction idealized from the CRUD

Matrix concept extended by an extra dimension: the

importance dimension.

Pereira J., Martins J., Santos V. and Gonçalves R..

INFORMATION SYSTEMS AND E-BUSINESS - Risc and Value of Applications to Organizations.

DOI: 10.5220/0003513100650068

In Proceedings of the International Conference on e-Business (ICE-B-2011), pages 65-68

ISBN: 978-989-8425-70-6

 2011 SCITEPRESS (Science and Technology Publications, Lda.)

2 PROBLEM DEFINITION

In the last two decades of the twentieth century,

Information and Communication Technologies –

ICT – have contributed in a significant way to a

profound change in economic and social activities.

These changes include increases in quality of life, as

well as in the competitiveness and productivity of

enterprises (Sócrates, J., 2007).

It is important to align the business needs with

the business processes of an enterprise, even if they

are in continuous improvement. There should be a

good fit between the tasks of business processes and

information systems (Trkman, P., 2010).

According to other studies (Ramirez, R., et al,

2010), in the past years information technology has

been promoted as a central tenet of process redesign

that scopes the evolution of processes. This fact is

enhancing the continuous call for IT investment in

business process management.

According to Lunsford (Lunsford, D., Collins,

M., 2008), organizations need to ensure that each

employee has the appropriate access to information,

but does not have excessively powerful access

rights. This author also describes the challenges

faced by auditors and organizations when a company

hires, fires, loses, or moves employees. At the same

time, new laws such as Sarbanes-Oxley (SOX) Act

place greater importance on this.

Business management involves monitoring and

controlling all forms of commercial transactions

over the Internet and extranets, related technologies

and communications services (Ray, P., Lewis, L.,

2009). Some of the good business practices are

based in a good definition of processes, both for

management and for business delivery (products or

services), so they can be enforced and monitored by

Key Process Indicators (KPIs). Those indicators are

collected automatically and presented to

management in a graphical way called Score Cards

(Business or others like IT). They allow a permanent

follow up of evolution (good or bad), allowing

management to take updated decisions to change

what is bad and enforce what is good. Usually the

KPIs are presented together as Business Score Cards

(BSC), to allow a permanent follow-up. This

management process is also called business

intelligence (BI), because it’s based in real business

information.

According to Barroero (Barroero, T., et al.

2010), business managers specify the business

processes for delivering the business services and

the related business performance relevant to each

business services stakeholder. Additionally, they

argue that in order to partnering IT service

management and business service management, it is

necessary that IT management decisions and actions

consider business customer’s priorities and impacts.

Thus, they foster the need of models and methods

able to correlate business customer performances

with IT services performances and management.

Business processes should be aligned with delivery

and management processes in order to optimize

business performance. The key achievement of the

analysis model is the link between business and IT

performances, and a systematic approach that

enables to step from business value down to IT

resources and IT management processes. This

alignment could actually enable the continuous

improvement cycle that is in the final stage of

Capability Maturity Model Integration (CMMI).

With this, management can take good decisions that

have direct impact in processes improvement and in

business results.

According to Ramirez (Ramirez, R., et al, 2010),

process redesign is one of many activities that can

produce positive organizational change. Other

programs utilized by firms include employee

involvement, total quality management (TQM), lean

manufacturing, six sigma, and business process

management.

An important consideration in investment

decisions is on the potential value of using a global

Information Technology (IT) in order to solve a

business need (Scheepers, H., Scheepers, R., 2008).

There are several difficulties to define and to

decide which the priority investments are. Usually

business managers have a different opinion from

CIO’s in what concerns information systems

investments and value. Some business managers

claim that technologies should be seen as a cost and

that its usage should be as insignificant as possible.

Others say that technologies are strategic to business

development, to optimize delivery costs and creating

new opportunities.

Nevertheless, there’s a large consensus in the

importance of technologies and information systems

to present business models (Ramirez, R., et al.,

2010). Additionally, managers should consider

investment in IT and process redesign as a means for

improving firm performance.

According to Moura & Bartolini (Moura, A.,

Sauvé, J., Bartolini, C., 2007), the contribution of IT

to business value creation is currently a hotly

debated topic. IT is expected to bring value to the

business, as is attested to by the introduction of

Control Objectives for Information and Related

Technologies (COBIT, 2007) and SOX Act

ICE-B 2011 - International Conference on e-Business

compliance requirements. To meet such expectation,

IT management methodologies, tools and processes

have had to evolve in maturity. Evolution has been

made possible with the IT Service Management

(ITSM) practices recommended by the process-

oriented Information Technology Infrastructure

Library (ITIL) framework (ITIL, 2007). Other IT

management frameworks have been developed on

the basis of ITIL by HP, IBM and Microsoft, among

others, traditionally related to innovation.

2.1 Information Systems Risc

and Value

To measure the importance of a particular

application or information system for the different

business units of the company is, normally a very

difficult task. It obligates to answer some others

questions as:

 What is the relative importance of each system

or application for company business?

 Which system or application should have the

biggest budget?

 Which projects should be executed given the

available budget?

These are the frequent questions that CIO’s have

to answer and which promote big and frequent

discussions with the business managers. The chain

value that is perceived by each department is

different and is based in different indicators.

Nowadays, the aimed alignment between business

and information systems is not a reality. It’s frequent

to assist a business manager that refuses to talk to an

information systems manager.

The ITIL and COBIT management are good

practices and methods but they don’t solve these

typical problems. According to the ITIL, COBIT and

ISO 27002 alignment for business benefit (ITIL

alignment, 2008) and Malta & Sousa (Malta, P.,

Sousa, R., 2009), the development of architectures

has been a major issue for IS managers, both from a

technological point of view and from an

organizational way. It’s even more complex when it

comes to Enterprise architecture (EA) that includes

business strategies and processes, besides IS models

that support them.

This way, the CRUD matrix (Lunsford, D.,

Collins, M., 2008) is an excellent technique to model

processes and data and how they interact with

respect to creation, reading, updating, and deleting

of data. In this paper, we extend the CRUD matrix to

a CRUDI matrix, where we propose to incorporate a

third dimension on the matrix, in order to include the

relative importance of each node (pair process/data).

3 CRUDI APPROACH

The need for new tools and methods implies the

search for new approaches. This way, we intend to

define a new method supported in new tools like the

CRUDI matrix, to help information systems

managers to better decide the investments and their

related priorities, aligned with the business needs.

The first difficulty will be to define the CRUDI

matrix to the first level of abstraction, with a CEO of

a company, thus adding the relative importance of

each business process with each information entity.

The second problem, certainly more complex

than its predecessor, will repeat the previous

procedure, iteratively, obtaining the same

information but now with a greater level of detail

going into each sub-process.

Achieved the previous two objectives, then we

can obtain the clusters of entities-processes,

necessary for the characterization of information

systems and enterprise applications.

At this point, it will be possible to assess the

indicators achieved and we can correlate the relative

importance of each information system and each

sub-system. With this new information, and the

creation of new indicators for decision support,

managers of information systems and business

managers now have a consistent and coherent view

on the relative importance of each investment in

information systems to achieve the business

objectives.

Definition and specification for a process change:

a) Definition of the CRUD matrix for the

processes and systems that support the

business;

b) Add the relative importance of each node in the

CRUD Matrix (New Dimension), of each

feature and each process, in a relative scale,

creating a CRUDI matrix; you can get an

array with nodes with information about the

alignment and the importance for business,

for each node of the array, for Level 1 –

Business Process and Entities.

c) Add the relative importance of each link

between nodes in the CRUDI matrix,

reflecting a relative scale and thus the value

of integration between IS for business;

d) Determine the relative importance of each

application subsystem based on information

gathered in the CRUDI matrix, with a simple

scoring calculation, defining their distinct

position rank;

e) Implementation of a New Information System

and Technology (IST) Management Process

INFORMATION SYSTEMS AND E-BUSINESS - Risc and Value of Applications to Organizations

for determining and simulating the relative

importance of each system and application to

business, in a simple and intuitive way;

i. Introduce procedures to specify and update

the CRUDI matrix, for processes and

features associated with its importance;

ii. Determination and simulation of the

relative importance of each system and

application based on CRUDI Matrix;

iii. Create Indicators (KPI's) based on the new

CRUDI matrix for measuring progress;

iv. Analysis and Strategic Decision-making

based on the CRUDI matrix and new

KPIs; it also allows an assessment on the

business impact (financial and strategic).

Figure 1: Relation between business processes and support

applications.

3.1 Challenges and Conclusions

With the presented example we aim to demonstrate

that the use of a CRUDI matrix can be a viable

approach and that CIO’s and business managers can

have new information to better decide new

investments. This new approach has, in our opinion,

a big potential to define investment priorities in

information systems, which are perfectly aligned to

business needs. This way we can reduce the abysm

between business and technology, steel present in

several business sectors. This method also allows a

better alignment between business and information

systems.

The present work is a starting point to a more

detailed evaluation of possible scenarios, to assure

the complete assessment of a company need, starting

with an insurance company or a bank. We will

continue this task, trying to work closely with real

entities in the future year, to define and describe the

new method and to create real CRUDI matrix

samples, which describe the real problems and

business needs. We will present those CRUDI

matrix samples to CIO’s and to business managers

in the way they can evaluate the information and

comment if it’s useful or not and if there is any gap

we must still solve. Then we intend to provide new

articles with a more detailed work and the achieved

results (case studies).

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