M.Eng. Thesis Abstracts

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Managing IT Outsourcing

Sofie Andreou

 

Information Technology (IT) Outsourcing, according to Gartner Group's definition, is a company's contractual relationship with an outside vendor to assume responsibility for one or more of its' IT functions. The outsourcer takes over assets (facilities, staff, and/or hardware) and can include data centers, wide area networks, application development and maintenance functions, end-user computing and business processes. Traditionally, cost reduction has been the overwhelming motivation and perceived payback for outsourcing. Information Technology outsourcing is far from a science and it has become more and more complex over the past decade. It is expected to grow significantly into the next millennium, globally growing at a compounded annual growth rate 25.7 per cent to reach $267 billion by the year 2000.

This thesis offers guidelines for companies to follow when entering into outsourcing contracts. These guidelines will ensure the success of outsourcing deals. An astounding sixty per cent of CIO's are dissatisfied with their current contracts, therefore, this thesis will prove to be invaluable to them.

There is substantial evidence that companies are disappointed with their actual cost reductions as well as other aspects of their contracts, such as: the lack of responsiveness to changing business needs; unachieved expectations; and poor communication. This thesis explores every possible element in an outsourcing contract and links each element to a list of satisfiers. These links form the guidelines and were derived from the study of survey responses gathered. The survey was developed, sent to two hundred companies, and forty responded. The thesis's conclusions are presented in the form of guidelines, which will enable successful outsourcing contracts.

The hypothesis of this thesis indicated that sixteen specific elements must be detailed in a contract to ensure success of the deal. The conclusion of this thesis is that actually only seven specific elements must be in any outsourcing contract to ensure success. These elements are: quality & quantity metrics for services, a benchmarking process & timing, service level agreements, a process to demonstrate optimization of services and prices, mutually beneficial incentive plans, billing mechanism details and common financials to govern the deal.

 

Risk Measures in Mutual Fund Trade Compliance

Jean-Paul Cardoso

This project attempted to design an automated risk compliance system that can be used to check the suitability of mutual fund trades to a customer's risk tolerance profile. This project was initiated by the Royal Bank Investment System Group as part of their Know Your Client (KYC) initiative. Hence the goal was to develop a software tool that a compliance officer could use to focus his/her attention on trades that were not compliant. A scoring system was developed to assess the risk tolerance of the client, by gathering personal details from the customer's specific documents. A second scoring system was developed to measure the risk of a mutual fund portfolio. These were then connected in a prototype Visual Basic Application (VBA) trading program. This program was then used to analyse how different measures of portfolio risk relate. The magnitude of the values were used to set benchmarks that could be incorporated into the algorithm.

 

Disaster Recovery Planning for the Data Processing Center of ScotiaMcleod Inc.

Sing Ty Fung

A disaster may be as extreme as a fire or it may be as focused as the improper access to a confidential record. At either extreme, the organization which is struck by such disaster will suffer profound consequences. To provide safeguards against such events, there must exist a set of plans for detection, correction, and recovery from an occurrence of this type. The development of such a comprehensive plan of disaster prevention and recovery for the Data Processing Facility of ScotiaMcleod is the objective of this report.

The first phase of this document discusses both the need for and methods of detecting risks. Once risks are identified, appropriate preventative measures can then be developed. However, prevention can only reduce the probability of a disaster, it can not eliminate the chance of a disaster occurring, thus a set of recovery measures become crucial.

This work focuses on establishing priorities among the various services the Data Centre provides. We will determine necessary resources that must be provided during a disaster to ensure that services that matter most to the company's survival are reliably available. Responding to these needs, a draft copy of a Disaster Recovery Plan was then developed.

 

A Study of Online and Mobile Banking Services for Small and Medium Sized Business Customers

Yiyang Kang

This project was carried out with collaboration of one of the five major banks of Canada. The objective was to identify what services could be offered to small and medium sized enterprises (SME) via the emerging Internet and mobile channels. Of one million Canadian businesses, 99.8% are SMEs and 98% of them have less than 100 employees. They play an important role in the Canadian economy and represent an excellent business opportunity. They account for the majority of the Bank’s business customers and bring a substantial amount of revenues to it. Improving SME services offered through online and mobile channels can benefit the banks in long run by reducing product delivery costs and increasing their customers’ satisfaction.

 

Application Software Modelling Project Refinement (V3)

Edwin S. Ohanians

The current uncertainties, the volatility, and the competition in the market-place, make it necessary for a company to acquire the tools that give them the advantage of staying in leading and competitive edge of the business. One of the most popular and the most efficient engineering tools available for financial and computing industries is modeling and simulation.

The main incentive of this project was the idea of having a model, which will be able to predict the mechanism that drives the Royal Trust's application software. A model that will have the potential for serving as a capacity planning, performance management, and service costing tool.

An advantage of modeling and simulation is that it enables the technical managers to test the outcomes of changes in the system, without actually taking the risk of hasty modification. Another advantage is that, it allows estimating the changes in the system output (e.g. profit), by examining different inputs (e.g. offering new services).

The objective of the summer project was to provide the methodology and pave the way for a more complete and elaborate analysis and model-building process. In order to achieve this I mainly concentrated on the Royal Trust's mainframe online transaction processing system (CICS). The CICS is a very successful online system, which despite the fact that has been around for decades, because of intelligently tailored architecture, is still dominating the large scale transaction processing systems. This is not only because of the large inertia of legacy Systems, but also because of efficiency, and also because of the flexibility to serve well in a Client/Server architecture.

The outcome of the summer project (pilot) is a model, which accepts workloads and service times as inputs, and returns resource utilization (e.g. CPU consumption) and performance metrics (e.g. response time) as outputs. Because of large amount of statistics for workloads and service characteristics available in Royal Trust's computer systems it took three months to collect the necessary data and analyze them and prepare them for feeding the model. However because the methodology is already identified, the data collection and analysis will not take this long for next runs or for more elaborate models.

 

A Study on the Applicability of ITIL within a Large Organization

Chloette Patsakos

 

The implementation of ITIL, a best practices framework for managing IT services, could be extremely beneficial to LCA Enterprises (LCA)*. Companies are beginning to realize the benefits of ITIL and are adopting these practices internally. As well, they expect their business partners and suppliers to do the same. Adopting the ITIL standards would allow LCA to meet their customer expectations and therefore provide the firm with an edge over their competition. The ITIL compliancy requirements of the potential $600 million contract with the Ontario Government portrays LCA's customers' present and future expectations.

Building and maintaining strong business relationships with its business partners and suppliers is critical for LCA to conduct business. Therefore, the implementation of ITIL allows LCA to share a common language with these third parties and hence further strengthen their relationships.

Aligning LCA's present Service Support and Service Delivery processes with ITIL would provide LCA with improved change management, more access to information, quicker incident resolution and easier transition of best practices between groups. There is also potential to reduce the operating costs associated with LCA's service assurance functions.

Additional benefits of ITIL implementation include providing a foundation for other LCA activities including SOX compliance and ISO 20000 certification.

Other large organizations have already credited ITIL as a primary factor in their ability to increase their operational efficiency, customer base and revenue. Therefore, to stay competitive, increase efficiency and reduce costs, LCA should consider an organization wide implementation of ITIL best practices.

* LCA Enterprises represents the company in which the study was conducted. The name has been changed to protect their privacy.

Cost Component Design in Service Oriented Systems Architecture (SOA) Applications

Eftila Qirjazi

 

The purpose of this thesis is to understand how the true operational cost components are designed in the current Service Oriented Architecture (SOA) applications in a large Canadian bank. Understanding the mechanism applied for the cost recovery efforts by the IT division offers an opportunity to treat users of these systems more equitable and fairly. In this thesis the Bank’s current SOA system was analyzed and evaluated. The platform is set to undertake a considerable expansion in 2011 as part of an internal project P1. Three major cost groups were identified based on the structural components of the SOA system, namely: ESB, WAS and CS Host costs. The operating cost components and the cost charge back models being used to recover the costs associated with these components were identified and current costs for running the entire SOA system were calculated. The overall costs for operating the system in 2010 and 2011 were estimated to be $100,000 and $21,100,000 respectively. The vast increase in the total operating costs was associated with the planned expansion and consequent increase in total transactions in 2011 due to the implementation of project P1. Costs per transaction for each system component were also analyzed. For ESB cost per transaction remained constant from 2010 to 2011, WAS cost per transactions decreased in the same period whereas the CS Host cost per transaction was dependant on its constituent business lines. It was deduced that as the SOA system grows in implementation the cost gap between running the system in a traditional mainframe environment and running it on a SOA platform will decrease. This analysis indicates that an SOA platform does not considerably increase operating costs, while providing system flexibility and business competitive advantages.

Information Systems Project Prioritization Using DEA

Clifford Suld

The behaviour of an output oriented DEA model is used to determine the priority of Information Systems projects given an user evaluation based on eight criteria. The criteria are inputs in the model and the priority is the lone output. An artificial set of projects are created and given a priority and act as the set of DMUs to be analyzed in the model. Projects to be prioritized are given a low priority score as a default. The output oriented model maximizes the lone output, a priority score. Projects are prioritized by their priority score. The paper discusses the design of the DEA model, the creation of the artificial set (which acts as a reference) and the interpretation of the DEA model output which can aid the model's designer and the user of the model.

 

Information Repository for the Audit Division of the Toronto Dominion Bank

Jonathan Wong

This report documents the work that went into the implementation of the Audit Intranet Web-site. In particular, a detailed analysis of the existing situation in the Audit division of the Toronto Dominion Bank was conducted. Three possible alternatives were formulated to address the divisional concern of improving the accessibility of information within the departments. These alternatives included the use of a group-ware solution such as Lotus Notes, the implementation of an Intranet Web-site, and a "do-nothing" approach. An evaluation of these three alternatives resulted in a decision to pursue the Intranet Web-site solution.

As part of the implementation of the Intranet Web-site solution, a requirement study was performed to document both the functional and non-functional requirements for the system. In addition, a user analysis was conducted to identify the different levels and types of users who will be accessing the system. Based on these information, a detailed design of the system was made. Included in this design was the decision to utilize the existing Lotus Notes server as the information repository and to use a Domino server as the Web-site server for the Intranet. As part of the interactive design of the system, a submission/approval process of Web contents was devised to provide quality control for the contents of the Web-site.

The implementation strategy was divided into three phases. The first phase was the preparation phase; it included the setup and configuration of the hardware required for the implementation. The second phase involved implementing the basic elements of the system, features that were deem necessary to have the system operational. This project concluded at the end of this phase with the completion of a successful beta test. The last phase, the enhancement phase, is beyond the scope of this project as it addresses new features and functionalities that can be added to the system.

Finally, studies of similar lntranet implementation at the Canberra Institute of Technology (Cli) and at The Mayo Clinic in Rochester, Minnesota were documented to highlight the possible benefits and pit-falls that can occur.