FOUNDATIONS OF INFORMATION SYSTEMS Chapter 5 BIS 1202 Introduction to Organisations and Information Systems

Organisations The organisation and its environment Why do organisations exist? Organisation vision, mission, goals, objectives Organisational structure Organisation culture Types of IS in an organisation Overview

“A social arrangement for achieving controlled performance in pursuit of collective goals.” (Huczynski & Buchanan, 2001) Organisations

Organisational Behaviour “The study of the structure, functioning and performance of organizations and the behavior of groups and individuals within them.” (Huczynski & Buchanan, 2001) Organisations

Organisatio n Customers Suppliers Competitors Investors Regulators Technology Knowledge IS (Laudon and Laudon, 2006:78) The Organisation & its Environment

Organizations exist because they offer many advantages over people acting alone. Synergy (1+1=3), division of labour, formal systems of responsibility Organizations exist to serve a purpose or achieve a goal which is difficult to achieve by individuals alone Why do Organisations Exist?

The purpose of an organisation is expressed through its mission statement, goals and objectives The key to organisational effectiveness lies in its systems of responsibility and authority The purpose of existence of an organisation, its values and aspirations are usually expressed through its mission statement. In order to be successful, the organisational structure, culture, behaviour, and design should complement the mission of that organisation Vision, Mission, Goals, Objectives

Organisatio n Vision Mission Statement Goals and Objectives An aspirational view A general expression of the overall purpose

Example: “To become the most successful worldwide telecommunications group” (Campbell and Craig, 2005:29) Vision

Mission statement may contain: Some indication of the industry The market position aiming towards Values and beliefs Context-dependent objectives Mission

Example: “To provide world class telecommunications and information products and services, To develop and exploit our networks at home and overseas, so that we can: meet the requirements of our customers, sustain growth in the earnings of the group on behalf of our stakeholders, make a fitting contribution to the community in which we conduct our business” Mission (Campbell and Craig, 2005:29)

Broad-based intentions derived from the mission Provides a sense of direction in achieving the vision Usually expressed in qualitative terms and tend to be medium to long term in character Goals

Provides a focus for managers Aspirational targets; more recognisable; achievable Usually expressed in quantitative terms Objectives

SMARTSMART Specific Measurable Achievable Realistic Time related Explicit statement of required outcome Means of assessing results against plan Within the capabilities of people and resources employed Practical and sensible assessment of capabilities Where relevant completion dates Objectives When setting objectives:

 Refers to organisational sub-units and the way they are related to the overall organisation Organisational Structure

Objective of the organisational structure Means of attaining objectives and goals The extent to which, and the ways in which, one is controlled and constrained Organisational Structure

Traditional or hierarchical structure Project organisational structure Team organisational structure Multidimensional organisational structure Organisational Structure

Chief executive Senior executive Department/division heads Superintendents General foremen First-line supervisors Top manageme nt Middle managemen t Supervisory managemen t ( Buchanan & Huczynski, 1997) Organisational Structure

 Multinational companies  Operate in several countries (e.g., Coca-Cola, IBM)  International organisations  Do business with other companies in different countries (e.g., Boeing)  Virtual global companies  Joint ventures whose business partners are located in different countries (e.g., Turnstone)(Turban et al., 336) Enterprise New Business Models “ An organization with partially overlapping objectives working together for some period of time in order to attain their objectives. The actors utilize technology, competence, information and other resources in order to transform input to products that satisfy the needs of customers.” (Christensen et al., 1995:1172)

What is meant by the term ‘Culture’? “A set of major understandings and assumptions shared by a group.” Organisation Culture

These understandings (e.g., common beliefs, values, and approaches to decision making) are often not documented in goal statements or policies Organisation Culture

What’s a ‘System’? A group of interrelated components working together toward a common goal by accepting inputs and producing outputs in an organised transformation process’ (James o’Brien, 2004) Systems Theory

Organisation Production process Input from the environment Output to the environment Feedback (Laudon and Laudon, 2006:73) Systems Theory

Organisational processes (sub systems) Control InputsOutputs Feedback Finance Revenue Human resources Physical resources Data, information New product development Manufacture Distribution Sales and marketing Physical products Services Profits Data, information Change plans Change resources Performance targets Performance metrics Environment (Chaffey and Wood, 2005:27) The Organisational System

The Community, Competitors Customers, Suppliers Stockholders Labour unions Financial Institutions Government agencies, etc.

What’s ‘information’? “individuals actively create the meaning of information through their thoughts, actions and feelings” (Wei Choo, 2000) Information Age  information society Use of Information Technology (IT)  Transformation of work  Rethinking of business practices Information

What is ‘Information Technology (IT)’? Information Technology (IT) “Any computer-based tool that people use to work with information and support the information and information-processing needs of an organisation.” (Haag et al., 2004) Technologies that help you to perform specific information-processing tasks HardwareSoftware

“Information systems are the means by which organisations and people, using information technologies gather, process, store, use, and disseminate information.” ( Information Systems (IS) What are ‘Information Systems’?

“A Business IS (BIS) … converts data into information products that can be used to support forecasting, planning, control, co-ordination, decision making and operational activities in an organisation.” (Bocij et al.) Business Information Systems (IS ) What is a ‘Business Information Systems (BIS)’?

Data Information Systems Hardwar e Software People Telecommunications ( Jessup and Valacich, p1-7) Procedures Computer Based Information Systems (CBIS)

Input of data resources Processing data into information Output of information products Storage of data resources Control of system performance People Resources End users and IS specialists Software Resources programs and procedures Hardware Resources machines and media Network Resources Communications media and Network support Data Resources data and Knowledge bases (O’Brien, 2004, page 11) Component s of an IS

People Resources IS Specialists People who develop and operate IS. (e.g. system analysts, software developers, system operators) End Users Anyone who uses the information systems or the information it produces (e.g. customers, salespersons, managers) (O’Brien, 6 th Edition, page 12) Components of an IS

Software Resources All sets of information processing instructions Programs System software (e.g. operating system programs), Application software (e.g. spreadsheet programs, word processing programs, payroll programs, etc.) Procedures:d ata entry procedures, error correction procedures, paycheque distribution procedures, etc. Components of an IS (O’Brien, 6th Edition, page 12)

Hardware Resources All physical devices and materials used in information processing Machines : Computers, video monitors, magnetic disk drives, printers, optical scanners, etc. Data Media: flash disks, magnetic tapes, optical disks, plastic cards,paper forms, etc. Components of an IS (O’Brien, 6th Edition, page 12)

Network Resources Communications media Communications processes Network access and control software, etc. Components of an IS (O’Brien, 6th Edition, page 12)

Data vs. Information –Data: Facts about an event or a transaction. More formerly you can say that data are objective measurements of the attributes (the characteristics) of entities (such as people, places, things, and events) (O’Brien, p13). Example: a sales transaction (we can collect the item descriptions and the number of each item bought, customer card details, etc. ) –Information: Produced by processing data or more simply by converting or putting data into meaningful and useful context for specific users. Example: from the data collected at the POS, we can produce information about how much of an item has moved that day, what are the products which are moving fast, how many times a week a particular customer is visiting the store, how much a particular customer spends on average per month, etc. (Turban et al, Chapter 1 Page 18) Clarification of Important Terms

INPUTS Business problems Business opportunities Data Information Instructions PROCESSING Programs People Equipment Storage OUTPUTS Solutions Reports Graphics Calculations Recommendations Forecasts Analysis Tactics CONTROL Decision makers Auto-control Feedback A schematic view of an information system (Turban et al., 2006:20)

The Functions of Information Technology (IT) Capture Process Generate Store/Retrieve Transmit (James A. Senn, 23)

39 Organisation Different ways in which information can create value for organisations Add value Reduce cost Create new reality Manage risks Customers and markets Transactions and processes Market, financial, legal, operational New products, new services, new business ideas

 INFORMATION SYSTEMS IN AN ORGANISATION BIS1202