Principles of Information Systems, Seventh Edition 2 The use of information systems to add value to the organization is strongly influenced by organizational structure, culture, and change. Changes in the org. will cause changes in IS Changes in IS and Technology will change the org. A good example is ERP. What role will you play in Org. structure, culture, change management and decisions regarding the use of IS’s?

Principles of Information Systems, Seventh Edition 3 Because information systems are so important, businesses need to be sure that improvements or completely new systems help lower costs, increase profits, improve service, or achieve a competitive advantage TCO is used to help measure ROI What is ROI and why is it important to organizations.

Principles of Information Systems, Seventh Edition 4 Organizations and Information Systems Organization: a formal collection of people and other resources established to accomplish a set of goals. Are there any org’s within the same industry that are exactly the same??? Do organizations change over time? An organization is a system Inputs to the system: resources such as materials, people, and money. (land, labor, and capital Outputs to the environment: goods or services

Principles of Information Systems, Seventh Edition 5 Figure 2.1: A General Model of an Organization

Principles of Information Systems, Seventh Edition 6 Organizations and Information Systems (continued) Value chain: a series (chain) of activities that includes inbound logistics, warehouse and storage, production, finished product storage, outbound logistics, marketing and sales, and customer service Upstream management: management of raw materials, inbound logistics, and warehouse and storage facilities Downstream management: management of finished product storage, outbound logistics, marketing and sales, and customer service

Principles of Information Systems, Seventh Edition 7 Value Chain, again Why is the concept of the value chain important?? Cone’s answer. Always looking at all processes and activities determining how you can change, add, or delete processes with information systems to add value to products or services. This will be in your realm as a decision maker. The only way that you will be successful in your own business or by working for a business is to make “good” decisions.

Principles of Information Systems, Seventh Edition 8 Figure 2.2: The Value Chain of a Manufacturing Company

Principles of Information Systems, Seventh Edition 9 Organizational Structure Organizational structure: organizational subunits and their relationship with the overall organization Categories of organizational structure: Traditional Project Team Multidimensional Virtual

Principles of Information Systems, Seventh Edition 10 Traditional Organizational Structure A hierarchical structure Major department heads report to a president or top-level manager A managerial pyramid shows the hierarchy of decision making and authority

Principles of Information Systems, Seventh Edition 11 Figure 2.3: A simplified organizational model, showing the managerial pyramid What does this do with making decisions ???

Principles of Information Systems, Seventh Edition 12 Figure 2.4: A Traditional Organizational Structure

Principles of Information Systems, Seventh Edition 13 Project Organizational Structure Centered around major products or services Temporary project teams

Principles of Information Systems, Seventh Edition 14 Figure 2.5: A Project Organizational Structure

Principles of Information Systems, Seventh Edition 15 Team Organizational Structure Centered on work teams or groups Temporary or permanent teams Various sizes

Principles of Information Systems, Seventh Edition 16 Multidimensional Organizational Structure May incorporate several structures at the same time Advantage: ability to simultaneously stress both traditional corporate areas and important product lines Disadvantage: multiple lines of authority

Principles of Information Systems, Seventh Edition 17 Figure 2.6: A Multidimensional Organizational Structure

Principles of Information Systems, Seventh Edition 18 Virtual Organizational Structure and Collaborative Work Employs individuals, groups, or business units in geographically dispersed areas People may never meet face to face A job is not necessarily a place you go to. Can be permanent or temporary Collaborative work: managers and employees can effectively work in groups around the world

Principles of Information Systems, Seventh Edition 19 Organizational Structures Lattice org. structure. Not in Book.

Principles of Information Systems, Seventh Edition 20 Organizational Culture and Change Organizational culture: Major understandings and assumptions for a business, corporation, or organization Organizational culture can significantly influence information systems Organizational change: deals with how organizations plan for, implement, and handle change

Principles of Information Systems, Seventh Edition 21 Reengineering Process redesign Radical redesign of business processes, organizational structures, information systems, and values of the organization to achieve a breakthrough in business results

Principles of Information Systems, Seventh Edition 22 Figure 2.8: Reengineering

Principles of Information Systems, Seventh Edition 23 Continuous Improvement Constantly seeking ways to improve business processes Benefits: Increased customer loyalty Reduced customer dissatisfaction Reduced opportunity for competitive inroads

Principles of Information Systems, Seventh Edition 24 Table 2.2: Comparing Business Process Reengineering and Continuous Improvement

Principles of Information Systems, Seventh Edition 25 Technology Diffusion, Infusion, and Acceptance Technology diffusion: measure of how widespread the use of technology is in an organization Technology infusion: extent to which technology permeates a department

Principles of Information Systems, Seventh Edition 26 Technology Diffusion, Infusion, and Acceptance Technology Acceptance Model (TAM): specifies factors that can lead to higher usage of technology in an organization such as The perceived usefulness of the tech. The ease of its use The quality of the IS The degree to which the org. supports the use of the IS. What else????

Principles of Information Systems, Seventh Edition 27 Technology Diffusion, Infusion, and Acceptance What is the best mixture of the diffusion, infusion, and acceptance for best performance and profitability ???

Principles of Information Systems, Seventh Edition 28 Total Quality Management Quality: ability of a product or service to meet or exceed customer expectations Total quality management (TQM): approaches, tools, and techniques that foster a commitment to quality throughout the organization

Principles of Information Systems, Seventh Edition 29 Outsourcing, On-Demand Computing, and Downsizing Outsourcing: contracting with outside professionals On-demand computing: contracting for computer resources to rapidly respond to an organization’s varying workflow Downsizing: reducing the number of employees in an organization to cut costs. Usually the result of what???

Principles of Information Systems, Seventh Edition 30 Organizations in a Global Society As companies rely more heavily on virtual structures and outsourcing, businesses can operate around the world. Oil company case. Challenges to operating in a global society: Every country has a set of customs, cultures, standards, politics, and laws Language Difficulty in managing and controlling operations in different countries 60% of all small businesses in the US do business in other countries.

Principles of Information Systems, Seventh Edition 31 Competitive Advantage Competitive advantage: significant, long- term benefit to a company over its competition Once you achieve competitive advantage using IS’s you can usually keep it for a rather long time. Agree? Why? Ability to establish and maintain a competitive advantage is vital to a company’s success

Principles of Information Systems, Seventh Edition 32 Factors That Lead Firms to Seek Competitive Advantage Rivalry among existing competition Threat of new entrants Threat of substitute products and services Bargaining power of customers and suppliers

Principles of Information Systems, Seventh Edition 33 Strategic Planning for Competitive Advantage Change the structure of the industry Create new products or services Improve existing products or services Use information systems for strategic purposes

Principles of Information Systems, Seventh Edition 34 Table 2.4: Competitive Advantage Factors and Strategies

Principles of Information Systems, Seventh Edition 35 Table 2.4: Competitive Advantage Factors and Strategies (continued)

Principles of Information Systems, Seventh Edition 36 Figure 2.9: Three Stages in the Business Use of Information Systems

Principles of Information Systems, Seventh Edition 37 Major Stages in the Use of IS 1960’s. Oriented toward cost reduction and productivity. Ignored the revenue side. 1980’s. Oriented toward spending large amounts on IS and ignoring the costs. Today. Performance based information systems. Next Slide.

Principles of Information Systems, Seventh Edition 38 Performance-Based Information Systems Considers both strategic advantage and costs Uses productivity, return on investment (ROI), net present value, and other measures of performance

Principles of Information Systems, Seventh Edition 39 Productivity A measure of output achieved divided by input required Higher level of output for a given level of input means greater productivity Measured by OPMH

Principles of Information Systems, Seventh Edition 40 Return on Investment and the Value of Information Systems Earnings growth Market share Customer awareness and satisfaction Total cost of ownership

Principles of Information Systems, Seventh Edition 41 Careers In Information Systems Degree programs: Degrees in information systems Business degrees with a global or international orientation Computer systems are making information systems professionals’ work easier Opportunities in information systems are not confined to single countries

Principles of Information Systems, Seventh Edition 42 Roles, Functions, and Careers in the Information Systems Department Primary responsibilities in information systems Operations: focuses on the efficiency of information systems functions Systems development: focuses on specific development projects and ongoing maintenance and review Support: provides user assistance

Principles of Information Systems, Seventh Edition 43 Typical Information Systems Titles and Functions Chief Information Officer (CIO): employs the IS department’s equipment and personnel to help the organization attain its goals LAN administrators: set up and manage the network hardware, software, and security processes

Principles of Information Systems, Seventh Edition 44 Typical IS Titles and Functions (continued) Internet careers: Strategists Programmers Web site operators Chief Internet Officer