1. IT (Information Technology)
Khatam Institute of higher Education
Session # 2

2. Course Description (Continued..)
Contents:
Foundation of Information Technology (IT) (1 session)
A Look Toward the Future of Information Technology (2 sessions)
Information Management and IT Architecture (2 sessions)
Networks, Collaboration, and Sustainability (2 sessions)
E-Business & E-Commerce Models and Strategies (4 sessions)
Functional Area and Compliance Systems (4 sessions)
Enterprise Systems and Applications (6 sessions)
Business Process and Project Management (5 sessions)
Logestics and Information Technology (8 sessions)
Khatam Institute of higher Education
IT (Information Technology), Session #2 2

3. The role of managers in Information Technology (IT)
In the first part of this text, we define an information system and see how
information technology is transforming organizations. Managers have developed
creative applications of technology that have altered the way members
of the organization work and communicate, how customers and suppliers
relate, and even how firms are structured.
What is the nature of information? How do individuals interpret data to
become information? We will examine decision making in some detail because
one objective of an information system is to provide information that
supports decision making. With this background, we examine frameworks
for information systems-frameworks that provide a conceptual model that
aids in the design of systems. Part One includes a scenario showing the
wide variety of information systems existing today.
Khatam Institute of higher Education
IT (Information Technology), Session #2 3

4. The role of managers in Information Technology (IT)
Using technology to transform the organization
We are living in revolutionary times, a revolution brought on by dramatic advances in information technology.
If the steam engine, a new form of power, and mechanization created an Industrial Revolution over 150 years ago, computers and communications equipment have produced a Technology Revolution in the last half of the twentieth century.
Khatam Institute of higher Education
IT (Information Technology), Session #2 4

5. Homework IT:I:01
Managers will generally tell you that they invest carefully and expect a return
from their investment. In deciding whether to make an investment, companies
frequently compute the net present value (NPV) of a proposal, using an interest
rate that represents a minimum acceptable return for the firm. Various observers
Khatam Institute of higher Education
IT (Information Technology), Session #3 5

6. The role of managers in Information Technology (IT)
Information Technology (IT) in perspective
Is there value in IT?
In deciding whether to make an investment, companies frequently compute the
Net Present Value (NPV)
of a proposal, using an interest rate that represents a minimum acceptable return for the firm.
Managers will generally tell you that they invest carefully and expect a return
from their investment. In deciding whether to make an investment, companies
frequently compute the net present value (NPV) of a proposal, using an interest
rate that represents a minimum acceptable return for the firm. Various observers
Khatam Institute of higher Education
IT (Information Technology), Session #3 6

7. Homework IT:I:02
Managers will generally tell you that they invest carefully and expect a return
from their investment. In deciding whether to make an investment, companies
frequently compute the net present value (NPV) of a proposal, using an interest
rate that represents a minimum acceptable return for the firm. Various observers
Khatam Institute of higher Education
IT (Information Technology), Session #3 7

8. The role of managers in Information Technology (IT)
Information Technology (IT) in perspective
Investment Opportunities Matrix
Table 3-4 presents the Investment Opportunities Matrix, which shows some of the
different types of IT investments. The first column of the table describes the kind
of investment in technology that one can undertake. The second column provides
an example, and the third offers comments on this investment type. The fourth column,
"upside," discusses the possibility that you will obtain much larger return
than predicted. An extraordinary return might result because an investment
worked much better than expected, or a product with IT as a component became
extremely popular like the Merrill Lynch Cash Management Account in the 1 980s
or the more recent MCI Friends and Family Program.
The last column in Table 3-4 provides an estimate of the probability that there will
be a return from the investment in this type of system. If the estimated probability
here is .5, that means there is a 50 percent chance that you will get a return from this
type of investment. The column presents ranges because the return depends on the
specific IT investment you are planning to make. The second number in the column is
my estimate for what you can expect in general for an investment in this type of IT.
The probabilities are subjective; they are estimated from seeing a large number
of applications and descriptions of IT investments. Providing numbers like this is
controversial; the objective is not to convince you that a particular probability estimate
is the correct number. The point is that there is not the same likelihood of a
return from each IT investment.
Required. How can a system be required? One source of many requirements is
the government. Companies have developed applications to satisfy federal or state
requirements, particularly for organizations like the Occupational Safety and
Health Administration (OSHA). It is hard to see a return on this kind of investment,
except possibly cost avoidance since there may be a fine associated with
noncompliance.
When the automakers first began to insist that their suppliers be able to accept
orders electronically, there was little choice for vendors if they wanted to do business
with Detroit. If you demanded an economic justification, you could determine
the value of sales to the auto companies and compare that with the cost of
ED!. However, most managers would probably not consider noncompliance unless
they sold very little to Detroit. Investing in this technology was a cost of doing
business.
Other kinds of required systems include managerial control and applications
like budgeting and accounting. IT used for these purposes is important in running
the company, but it is very hard to find a great deal of value, either in cost savings
or revenue generation, from investing in managerial control technology.
If you insist on economic justification, then the relevant numbers are likely to
be opportunity costs. What is the cost of not making the investment rather than
what do we save or gain from this application? The upside here is almost none
since you will probably invest in this technology and move on.
Khatam Institute of higher Education
IT (Information Technology), Session #3 8

9. The role of managers in Information Technology (IT)
Information Technology (IT) in perspective
Investment Opportunities Matrix
Khatam Institute of higher Education
IT (Information Technology), Session #3 9

10. The role of managers in Information Technology (IT)
Information Technology (IT) in perspective
Investment Opportunities Matrix
Table 3-4 presents the Investment Opportunities Matrix, which shows some of the
different types of IT investments. The first column of the table describes the kind
of investment in technology that one can undertake. The second column provides
an example, and the third offers comments on this investment type. The fourth column,
"upside," discusses the possibility that you will obtain much larger return
than predicted. An extraordinary return might result because an investment
worked much better than expected, or a product with IT as a component became
extremely popular like the Merrill Lynch Cash Management Account in the 1 980s
or the more recent MCI Friends and Family Program.
The last column in Table 3-4 provides an estimate of the probability that there will
be a return from the investment in this type of system. If the estimated probability
here is .5, that means there is a 50 percent chance that you will get a return from this
type of investment. The column presents ranges because the return depends on the
specific IT investment you are planning to make. The second number in the column is
my estimate for what you can expect in general for an investment in this type of IT.
The probabilities are subjective; they are estimated from seeing a large number
of applications and descriptions of IT investments. Providing numbers like this is
controversial; the objective is not to convince you that a particular probability estimate
is the correct number. The point is that there is not the same likelihood of a
return from each IT investment.
Khatam Institute of higher Education
IT (Information Technology), Session #3 10

11. The role of managers in Information Technology (IT)
HW#03
There are information systems all around us. We encounter them at the university, in stores and banks, when making airline, hotel, or rental-car reservations, and in many other aspects of our daily routine. For this project, choose an information system and critique it.
First, describe the system: What are its objectives? Who are the users? What is the underlying technology including computers, databases, and communications network? Trace the input of the system to determine who inputs what information. Look at the output of the system. Is it a physical document? Often, systems have to store data on a more or less permanent basis in files or in a database. Can you figure out what is in the database for your system?
Draw a diagram of the input, processing, database, and outputs of your system. What are the major strengths of the system? Do you see any problems with it? What can you suggest to improve the system?
The Home work should be sent to till Monday, 20th of Mehr
(Oct, 12th ,2013)
subject: “HW03:studentnumber”
Khatam Institute of higher Education
CIS (21774), Session #2 11

12. Course Contents
The role of managers in Information Technology (IT) (3 sessions)
Using technology to transform the organization
Interpreting and understanding Information
Information Technology (IT) in perspective
Frameworks for Information Technology
The Basics of Information Systems
In the first part of this text, we define an information system and see how
information technology is transforming organizations. Managers have developed
creative applications of technology that have altered the way members
of the organization work and communicate, how customers and suppliers
relate, and even how firms are structured.
What is the nature of information? How do individuals interpret data to
become information? We will examine decision making in some detail because
one objective of an information system is to provide information that
supports decision making. With this background, we examine frameworks
for information systems-frameworks that provide a conceptual model that
aids in the design of systems. Part One includes a scenario showing the
wide variety of information systems existing today.
Khatam Institute of higher Education
IT (Information Technology), Session #3 12

13. Organizational Issues
The impact of Information Technology on the organization
Organizational Structure and Design
There are many factors that influence the structure and design of modern organizations.
Uncertainty
Specialization
Coordination
Interdependence
Pooled interdependence
Sequential interdependence
Reciprocal interdependence
Information systems exist in the context of an organization; they do not operate
in isolation. There are a number of definitions of organizations. For our purposes,
an organization is a rational coordination of activities of a group of people for the
purpose of achieving some goal. The activities of the group of people are coordinated;
that is, there is a joint effort. In most organizations some division of labor
and a management layer provide for the rational coordination of activities. The
definition also contains the goals of the organization; there are many different
types of organizations with different kinds of goals.
The formal organization is what appears on the organization chart, usually with
well-defined reporting relationships among managers and workers that describe its
structure. Social organizations, on the other hand, are patterns of coordination that
arise spontaneously from the interaction of a group. Social organizations have no
rational coordinated structure and generally lack explicit goals.
The informal organization is the pattern of relations and coordination among
members of the formal organization that is not specified on a formal chart. It represents
the social interaction and is a more realistic portrayal of the formal organization
because it reflects how people actually interact. For example, a group of
workers may form an informal task force using electronic mail or conferencing
systems on a computer network; this task force cuts across traditional organizational
boundaries and constitutes a temporary, informal organization.
We must be careful to avoid designing information systems that follow unrealistic
standards and procedures. We may find that these prescribed rules are not actually
followed and that our system is unworkable because we have adhered too
closely to formal organizational considerations. It is hard to observe and describe
the informal organization as it depends on the personalities of specific individuals
and patterns of behavior that have developed over time.
Khatam Institute of higher Education
IT (Information Technology), Session #3 13

14. Organizational Issues
The impact of Information Technology on the organization
Organizational flexibility
A flexible organization defends quickly against threats and moves rapidly to take advantage of opportunities.
Flexibility provides the organization with the ability to adapt to change and respond quickly to market forces and uncertainty in its environment.
In general, technology speeds up the pace of work and increases the capacity of the organization to process information
Flexibility is the ability to adapt when confronted with new circumstances. A
flexible organization defends quickly against threats and moves rapidly to take
advantage of opportunities. Flexibility provides the organization with the ability
to adapt to change and respond quickly to market forces and uncertainty in its
environment.
Technology changes the pace of work. It has speeded up order routing and processing
on the stock exchange. Technology has made it much faster to search a library
book catalog, to communicate with someone at a remote location, and to
perform a number of tasks. Technology can also be used to shorten product development
cycles. In general, technology speeds up the pace of work and increases
the capacity of the organization to process information.
Information technology also alters the space and time boundaries of work.
Using electronic mail and computer conferencing, colleagues working on a project
do not have to be in the same physical location. Even people who work together in
the same office can communicate easily if traveling. With a portable computer and
modem, you can conduct some kinds of business from virtually any location at
any time of the day or night.
Thus, we see that technology
Khatam Institute of higher Education
IT (Information Technology), Session #3 14

15. Organizational Issues
The impact of Information Technology on the organization
Organizational flexibility
Flexibility is the ability to adapt when confronted with new circumstances. A
flexible organization defends quickly against threats and moves rapidly to take
advantage of opportunities. Flexibility provides the organization with the ability
to adapt to change and respond quickly to market forces and uncertainty in its
environment.
Technology changes the pace of work. It has speeded up order routing and processing
on the stock exchange. Technology has made it much faster to search a library
book catalog, to communicate with someone at a remote location, and to
perform a number of tasks. Technology can also be used to shorten product development
cycles. In general, technology speeds up the pace of work and increases
the capacity of the organization to process information.
Information technology also alters the space and time boundaries of work.
Using electronic mail and computer conferencing, colleagues working on a project
do not have to be in the same physical location. Even people who work together in
the same office can communicate easily if traveling. With a portable computer and
modem, you can conduct some kinds of business from virtually any location at
any time of the day or night.
Thus, we see that technology
Khatam Institute of higher Education
IT (Information Technology), Session #3 15

16. Organizational Issues
The impact of Information Technology on the organization
Creating new types of organizations
Information Technology makes it possible to create new forms of organizations through the use of different design variables.
Structural
Virtual components, Linking mechanisms, Electronic linking, Technological leveling
Work Process
Production automation, Electronic workflows, Virtual components
Communications
Electronic communications, Technological matrixing
Inter-organizational relations
Electronic customer/ supplier relationships, Electronic linking
Table 4-2 shows examples of key organization design variables that you can use
to build organizations. This table contains two types of variables: those labeled
conventional and those that come from information technology. Information technology
is defined to include computers, communications, video conferencing, artificial
intelligence, virtual reality, fax, cellular and wireless phones and pagers, etc.
The problem with conventional organization design literature is its failure to
recognize the new design variables enabled by information technology. In the case
of linking mechanisms, IT such as or groupware can be used instead of
conventional solutions such as task forces or liaison agents. The new IT-enabled
variables may be totally distinct from traditional design variables as we shall see
when we examine "virtual corporations." IT-enabled variables may also be an extension
of traditional variables, as in the case of linking mechanisms.
In Table 4-2, conventional design variables drawn from the literature on organization
design are contrasted with new kinds of IT design variables. The first column
of the table groups conventional design variables into four categories: structural,
work process, communications, and interorganizational. The third column
presents new organizational design variables made possible through information
technology. These electronic variables are:
Structural
Khatam Institute of higher Education
IT (Information Technology), Session #3 16

17. Organizational Issues
The impact of Information Technology on the organization
Creating new types of organizations
Table 4-2 shows examples of key organization design variables that you can use
to build organizations. This table contains two types of variables: those labeled
conventional and those that come from information technology. Information technology
is defined to include computers, communications, video conferencing, artificial
intelligence, virtual reality, fax, cellular and wireless phones and pagers, etc.
The problem with conventional organization design literature is its failure to
recognize the new design variables enabled by information technology. In the case
of linking mechanisms, IT such as or groupware can be used instead of
conventional solutions such as task forces or liaison agents. The new IT-enabled
variables may be totally distinct from traditional design variables as we shall see
when we examine "virtual corporations." IT-enabled variables may also be an extension
of traditional variables, as in the case of linking mechanisms.
In Table 4-2, conventional design variables drawn from the literature on organization
design are contrasted with new kinds of IT design variables. The first column
of the table groups conventional design variables into four categories: structural,
work process, communications, and interorganizational. The third column
presents new organizational design variables made possible through information
technology. These electronic variables are:
Structural
Khatam Institute of higher Education
IT (Information Technology), Session #3 17

18. Organizational Issues
The impact of Information Technology on the organization
Creating new types of organizations
Technology makes it possible to create new forms of organizations through the use of different design variables.
Table 4-2 shows examples of key organization design variables that you can use
to build organizations. This table contains two types of variables: those labeled
conventional and those that come from information technology. Information technology
is defined to include computers, communications, video conferencing, artificial
intelligence, virtual reality, fax, cellular and wireless phones and pagers, etc.
The problem with conventional organization design literature is its failure to
recognize the new design variables enabled by information technology. In the case
of linking mechanisms, IT such as or groupware can be used instead of
conventional solutions such as task forces or liaison agents. The new IT-enabled
variables may be totally distinct from traditional design variables as we shall see
when we examine "virtual corporations." IT-enabled variables may also be an extension
of traditional variables, as in the case of linking mechanisms.
In Table 4-2, conventional design variables drawn from the literature on organization
design are contrasted with new kinds of IT design variables. The first column
of the table groups conventional design variables into four categories: structural,
work process, communications, and interorganizational. The third column
presents new organizational design variables made possible through information
technology. These electronic variables are:
Structural
Khatam Institute of higher Education
IT (Information Technology), Session #3 18

19. Organizational Issues
The impact of Information Technology on the organization
Creating new types of organizations
Organizational Issues
The virtual organization creates new management and coordination challenges.
The kind of virtual office described above may be necessary to assuage a manager's
misgivings about supervision. Perhaps all members of this nonorganization
will log in to virtual offices each morning to report in and have an electronic discussion
with a supervisor. Microsoft offers Netmeeting on its network which
makes it possible to coordinate work on PCs in different locations. CU-SeeMe is a
program developed at Cornell. It is free and lets users on the Internet set up small
videoconferences using inexpensive cameras.
Khatam Institute of higher Education
IT (Information Technology), Session #3 19

20. Organizational Issues
The impact of Information Technology on the organization
Creating new types of organizations
Table 4-2 shows examples of key organization design variables that you can use
to build organizations. This table contains two types of variables: those labeled
conventional and those that come from information technology. Information technology
is defined to include computers, communications, video conferencing, artificial
intelligence, virtual reality, fax, cellular and wireless phones and pagers, etc.
The problem with conventional organization design literature is its failure to
recognize the new design variables enabled by information technology. In the case
of linking mechanisms, IT such as or groupware can be used instead of
conventional solutions such as task forces or liaison agents. The new IT-enabled
variables may be totally distinct from traditional design variables as we shall see
when we examine "virtual corporations." IT-enabled variables may also be an extension
of traditional variables, as in the case of linking mechanisms.
In Table 4-2, conventional design variables drawn from the literature on organization
design are contrasted with new kinds of IT design variables. The first column
of the table groups conventional design variables into four categories: structural,
work process, communications, and interorganizational. The third column
presents new organizational design variables made possible through information
technology. These electronic variables are:
Structural
Khatam Institute of higher Education
IT (Information Technology), Session #3 20

21. Organizational Issues
The impact of Information Technology on the organization
Building a T-form organization
The pure T-Form organization operates with the assumptions about people found in the virtual and negotiated agreement organizations, where managers base supervision on trust in employees and their self-control.
The T-Form organization is a generic model for a technologically enabled organization.
The same IT design variables can be used in a variety of ways to create very different types of organizations, all of which have some of the characteristics of the T-Form.
Chapter I introduced the T-Form organization. The IT design variables in Table 4-2
can be used to create organizations with the characteristics described in this first
chapter. It is likely that you will use these variables to design organizations and
their components. An example below shows how to create a new organization using
information technology.
Khatam Institute of higher Education
IT (Information Technology), Session #3 21

22. Organizational Issues
The impact of Information Technology on the organization
Creating new types of organizations
Technology makes it possible to create new forms of organizations through the use of different design variables.
Structural
Virtual components, Linking mechanisms, Electronic linking, Technological leveling
Work Process
Production automation, Electronic workflows, Virtual components
Communications
Electronic communications, Technological matrixing
Inter-organizational relations
Electronic customer/ supplier relationships, Electronic linking
Table 4-2 shows examples of key organization design variables that you can use
to build organizations. This table contains two types of variables: those labeled
conventional and those that come from information technology. Information technology
is defined to include computers, communications, video conferencing, artificial
intelligence, virtual reality, fax, cellular and wireless phones and pagers, etc.
The problem with conventional organization design literature is its failure to
recognize the new design variables enabled by information technology. In the case
of linking mechanisms, IT such as or groupware can be used instead of
conventional solutions such as task forces or liaison agents. The new IT-enabled
variables may be totally distinct from traditional design variables as we shall see
when we examine "virtual corporations." IT-enabled variables may also be an extension
of traditional variables, as in the case of linking mechanisms.
In Table 4-2, conventional design variables drawn from the literature on organization
design are contrasted with new kinds of IT design variables. The first column
of the table groups conventional design variables into four categories: structural,
work process, communications, and interorganizational. The third column
presents new organizational design variables made possible through information
technology. These electronic variables are:
Structural
Khatam Institute of higher Education
IT (Information Technology), Session #3 22

23. Organizational Issues
The impact of Information Technology on the organization
Building a T-form organization (Case study)
Frito-Lay is a major producer of snack foods like Fritos Corn Chips.
The company invested heavily in hand-held computers for its drivers and a satellite communications network to transmit transactions data to headquarters.
The firm developed a data warehouse and provided decision-support tools for district managers to use in planning their operations
Khatam Institute of higher Education
IT (Information Technology), Session #3 23

24. Organizational Issues
The impact of Information Technology on the organization
Building a T-form organization
Organizational Issues
Table 4-5 shows how each of the firms in Figure 4-2 has used IT design variables
to create a different structure. These structures help the firms enjoy the benefits
described for the generic T-Form organization; they demonstrate the variety
that is possible for the firm choosing to take advantage of technology for organization
design.
Khatam Institute of higher Education
IT (Information Technology), Session #3 24

25. Organizational Issues
The impact of Information Technology on the organization
Building a T-form organization (Case study)
Mrs. Fields Cookies developed elaborate in-store systems to guide its store managers in all aspects of the business
The company uses and voice mail to communicate with the store manager.
It also has a very flat control structure with store controllers at headquarters closely monitoring sales results for each retail store
Khatam Institute of higher Education
IT (Information Technology), Session #3 25

26. Organizational Issues
The impact of Information Technology on the organization
Building a T-form organization
Organizational Issues
Table 4-5 shows how each of the firms in Figure 4-2 has used IT design variables
to create a different structure. These structures help the firms enjoy the benefits
described for the generic T-Form organization; they demonstrate the variety
that is possible for the firm choosing to take advantage of technology for organization
design.
Khatam Institute of higher Education
IT (Information Technology), Session #3 26

27. Organizational Issues
The impact of Information Technology on the organization
Building a T-form organization (Case study)
VeriFone is a company that manufacturers devices to verify credit card payments and is active in offering electronic commerce solutions on the Internet.
The firm views itself as a global corporation.
The chairman compares it to a "blueberry pancake where all the blueberries (locations) are equal" .
Verifone uses technology extensively for communications and coordination in the firm
VeriFone is a company that manufacturers devices to verify credit card payments
and is active in offering electronic commerce solutions on the Internet. The
firm views itself as a global corporation. The chairman compares it to a "blueberry
pancake where all the blueberries (locations) are equal." Verifone uses technology
extensively for communications and coordination in the firm
Khatam Institute of higher Education
IT (Information Technology), Session #3 27

28. Organizational Issues
The impact of Information Technology on the organization
Building a T-form organization
Organizational Issues
Table 4-5 shows how each of the firms in Figure 4-2 has used IT design variables
to create a different structure. These structures help the firms enjoy the benefits
described for the generic T-Form organization; they demonstrate the variety
that is possible for the firm choosing to take advantage of technology for organization
design.
Khatam Institute of higher Education
IT (Information Technology), Session #3 28

29. Organizational Issues
The impact of Information Technology on the organization
Building a T-form organization (Case study)
Oticon is a Danish manufacturer of hearing aids that underwent a major restructuring when it lost considerable market share.
The chairman created a "spaghetti organization" in which an executive committee agrees on tasks that the firm must complete and assigns them to a team leader.
The leader must put together a team to complete the task; technology facilitates the work of these virtual teams.
Oticon is a Danish manufacturer
of hearing aids that underwent a major restructuring when it lost considerable
market share. The chairman created a "spaghetti organization" in which an executive
committee agrees on tasks that the firm must complete and assigns them to a
team leader.
The leader must put together a team to complete the task; technology
facilitates the work of these virtual teams.
Khatam Institute of higher Education
IT (Information Technology), Session #3 29

30. Organizational Issues
The impact of Information Technology on the organization
Building a T-form organization
Organizational Issues
Table 4-5 shows how each of the firms in Figure 4-2 has used IT design variables
to create a different structure. These structures help the firms enjoy the benefits
described for the generic T-Form organization; they demonstrate the variety
that is possible for the firm choosing to take advantage of technology for organization
design.
Khatam Institute of higher Education
IT (Information Technology), Session #3 30

31. Organizational Issues
The impact of Information Technology on the organization
Building a T-form organization
Organizational Issues
Table 4-5 shows how each of the firms in Figure 4-2 has used IT design variables
to create a different structure. These structures help the firms enjoy the benefits
described for the generic T-Form organization; they demonstrate the variety
that is possible for the firm choosing to take advantage of technology for organization
design.
Khatam Institute of higher Education
IT (Information Technology), Session #3 31