Evaluate Impact of Changes

Evaluate impact of changes

Overview

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You should already know about evaluating current business strategies. This resource will help you to evaluate the impact of changes within an information technology environment.

In this topic you will learn how to:

• evaluate the current business strategy
• carry out a gap analysis
• determine the impact of changes
• develop and document action plans for proposed changes

This topic contains:

• reading notes
• activities
• references
• topic quiz

As you work through the reading notes you will be directed to activities which will help you practise what you are learning. The topic also includes the references to aid further learning and a topic quiz to check your understanding.

Download a print version of this whole topic: Evaluate impact of changes (197 KB 2839.doc)

Reading notes

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Review information

Most organisations have some sort of information technology system in place. In order for a gap analysis to be performed successfully, detailed knowledge of the current information technology system must be understood.

Current information technology (IT) systems

The current IT system may include an entire information system, or it may be made up of components within an information system. These components may include the following:

• hardware
• software
• web page
• network
• telecommunications
• information
• documents
• files.

Changes may occur within one or more of these components of the information system such as upgrades of hardware, modification of documents, etc. The change may also be for the information system as a whole. For example, modifications may need to be made to the information system due to new legislative requirements – such as the GST - which ensured that all businesses in Australia had to modify their financial systems to be compliant.

Most organisations will have some sort of IT system already in place. This system is often referred to as the ‘legacy system’ of the organisation.

When performing a review of the legacy IT system, a list of system components may be generated. This list will detail all of the current hardware, software and other network infrastructure in place in the organisation.

Table 1: An example of a limited list of legacy system components is shown below:

A review of a current information technology system will generally involve investigating the hardware, software, networking, telecommunications, web pages and files in use by the organisation. Information about the current information technology system will be documented in a detailed list showing the item and the quantity held (where appropriate).

Activity 1

To practise gathering data on current information technology, complete Activity 1 – Gather data on current information technology located in the Activities section of the Topic menu.

Compare advantages

All information technology systems will have both advantages and disadvantages. A new system will usually seem better to some users because it is different from the system currently in place. This new system may purport to have better functionality than the legacy system. Other users may like the familiarity of the legacy system and may fear possible changes being introduced. Gap analysis is one method used to compare legacy and proposed information technology systems. Gap analysis allows an organisation to recognise the features and functionality of the legacy system when compared with the requirements of the new system.

Gap analysis

Gap analysis is all about evaluating and improving business performance. In information technology, gap analysis is the study of the differences between two different information systems or applications, often for the purpose of determining how to get from one state to a new state. A gap is sometimes spoken of as the space between where we are and where we want to be. Gap analysis is undertaken as a means of bridging that space.

Gap analysis steps

Image: 1 review system, 2 develop requirements, 3 comparison, 4 implications, 5 recommendations.

Figure 1: Stages of gap analysis

A gap analysis may include the following steps:

1. Review system

An initial review of the current information system or application is carried out in order to understand the processing, features or system currently in place.

2. Develop requirements

This may be in the form of a strategic objective that the organisation wishes to implement. This strategic objective may allow the organisation to increase their competitive advantages or improve the technology and efficiency of their practices and procedures.

The proposed system may include the following:

• restructuring the current information system in order to become compliant with a new industry standard or organisation requirement
• updating the hardware of the system. For example, the current hardware may be outdated, inefficient and unable to handle the capacity needs of the organisation.
• updating the software of the system: the applications used by the organisation may not have the functionality required. There may be a newer version of the software that incorporates added features and is a ‘better fit’ for the organisation’s requirements.
• restructuring of documents, files or information so that they are more accessible
• an e-commerce website that enables customers to purchase products online
• new technology may become available, i.e., a new invention or reduction in the price of a product, making it more affordable for the organisation. This ‘new technology’ may enable the organisation to improve efficiency or productivity.
• creating new applications for use by the organisation. For example, a new database may need to be created to contain all of the organisation’s data.

3. Comparison

A comparison of the current system elements and the new system requirements or objectives will give an idea of whether a gap exists. If there is a gap, there will be mismatches between what the organisation wants and what they already have in place.

The gap analysis allows us to discover how to get from one state to a new state. This comparison may take the form of a ‘Gap - Yes/No’ column (see example gap analysis table below) to identify where the gaps exist for each element.

4. Implications

What are the implications of introducing the item being evaluated? What are the risks and impacts of introducing / implementing the item?

5. Recommendations

The last step in the gap analysis is to make recommendations to identify the items or solutions needed to fill the gap, if a gap exists.

The gap analysis table shown below is an example of a template that can be used to conduct a gap analysis.

Table 2: Gap analysis

Limited gap analysis template

The template shown below is another example of a gap analysis template. This is the template that will be followed hereon in. This template can be used to record the information gathered from the gap analysis.

Table 3: Gap analysis

An example of a gap analysis following the format of the template in Table 3 above can be found in Compare information (44 KB 2839_reading01.doc) related to current operational practices. You might also like to look at the Telstra scenario example (57 KB 2839_reading02.doc).

Summary

Gap analysis allows the organisation to compare an as is scenario with a desired future state. Gap analysis generally follows four steps:

• reviewing a current [as is] system
• determining requirements of the proposed [future state] system
• comparing these two states
• determining the implications and requirements involved in getting from one state [as is], to the other [future state].

Determine objectives

Changes to any part of the information technology system will have implications. These implications may be positive or negative. Positive implications may include increases in efficiency and reductions in costs of using the system. Negative implications will be the risks of implementing the changes. Risks may include end users not using the system effectively and the new system not performing as expected.

In the Compare advantages section of this reading, we discussed the five different steps of gap analysis which are

1. review of the current system
2. determination of requirements for the proposed system
3. comparison of the two systems to determine gaps
4. implications of the gap
5. recommendations.

The fourth and fifth steps of the gap analysis will be explored further later in this reading.

Implications

The implications of the impact / risk involved with the item being evaluated must be determined. The item may have both positive and negative implications associated with it. The implications of each item may be presented in the form of a list of dot points which outline the impact or risks of the item.

Table 4: Example of risks / implications

• The current hardware must have the capacity to allow the new software to run effectively.
• If the software has not been used in the organisation before, then user training must take place to ensure the end users are able to operate the software.
• A help desk may need to be put in place to support the end users of the software.
• There may be licensing issues that need to be explored by the organisation.

Recommendations

The last step in the gap analysis is to make recommendations to identify the items or solutions needed to fill the gap, if a gap exists. The recommendation may be a description of what is required in order for the organisation to put the new system in place. For example, if the current system uses a manual paper-based information system, and the requirement is to computerise this system, a gap exists between the legacy system’s performance and the strategic objectives of the organisation. We may recommend that the organisation needs to purchase new hardware and software and have user training for all end users involved in performing tasks in the proposed system.

Summary

When implementing changes to information technology systems, the impact of the changes must be fully explored before the solution is implemented. While the gap analysis allows the organisation to determine if gaps exist between their current system and their proposed system, the risks and impacts of those changes will determine whether or not the organisation proceeds with making those changes. Recommendations will be made based on the determination of the risks involved.

Activity 2

To practise determining objectives, complete Activity 2 – Determine objectives located in the Activities section of the Topic menu.

Document findings

Documentation of findings and reporting information to management is an important process. It allows management to evaluate all relevant information and make informed decisions about the most appropriate course of action for the organisation.

Gap analysis template

Many different formats are used to display gap analysis information. The example gap analysis table and the gap analysis template (below) show two possible alternatives for presenting this information.

Table 5: Gap analysis template

Reporting

The results of a gap analysis are important to management of an organisation for a number of reasons:

• management needs to have all the information about a number of possible changes to the information technology system
• management can then evaluate all relevant information
• implications of each change are presented along with a recommended course of action
• the gap analysis allows management to make more informed decisions.

As a result of feedback from management, the organisation will generally choose a course of action that best suits their situation. There may be financial or other resource constraints that management takes into account when choosing a course of action.

Table 6: Example of management course of action

Summary

The gap analysis report allows findings to be documented and presented to management in a meaningful way. Management will use this information to make informed decisions about appropriate courses of action for the organisation.

Summary

This topic has explored the features of gap analysis in detail. Gap analysis follows five steps:

• A review of the current information technology system is performed in order to understand the features of the current system.
• A list of requirements for the proposed system is developed. This forms the future state that the organisation would like to reach.
• A comparison of these two systems is conducted to determine the ‘gaps’ that exist between the two systems.
• The positive and negative implications of these gaps are explored, and, finally, recommendations are made as to courses of action to be taken by the organisation.
• The findings of the gap analysis are then presented to management for a decision about how the organisation will proceed.

Acknowledgement: The above material is sourced from the Information Technology E-Commerce Toolbox 906 © Commonwealth of Australia 2006.

Activities

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Activity 1 – Gather data on current information technology

Create a questionnaire that can be used to gather information about the organisation’s current IT systems. Remember that an IT system is made of many elements and your questions should reflect this.

Feedback

Here are some questions that will help in reviewing the legacy IT system:

Client server

• Do you currently have any client / server computers?
• If yes, what type and how many?

Network

• Are your computers connected to each other?
• What is the network topology and cable type?
• Is the current network mapped?
• If yes, what type of network equipment is used and how many?
• Do you have any remote locations connected over WAN? If so, how?
• Do you have an ISP? If so, who and what is the connection type?
• Do you have a wireless network?

Data

• How is your data stored?
• How do you archive older data?
• How long does data need to be available before archiving?

Peripheral

• Do you use printers or faxes? If so, what type and how many?
• Are printers faxes connected to the network?
• Do you use smart phones or pocket PC’s? If so, what type and how many?

Activity 2 – Determine objectives

Review the tables below and for every objective and finding, suggest:

• what the implications would be
• make recommendations (if required).

Question 2a

Write your answer here.

Feedback

Question 2a

Question 2b

Write your answer here.

Feedback

Question 2b

Question 2c