1. The Impact of IT on Hospitals
Dr. Hsin-Ginn Hwang
Graduate Institute of Information Management
National Chung Cheng University

2. Introduction Hospitals are also organizations
IT improves medical quality
IT improves the efficiency and effectiveness of hospital operations

3. Facts to Remind
IT offers new ways to change the structure of an existing organization or design an entirely new non traditional one
IT can substitute for physical proximity and contact in a number of situations
Top management has a key role to play in the management of information processing activities in the organization

4. What are Information Systems?
Information systems exist in the context of an organization; they do not operate in isolation

5. What are Hospitals?
An organization is a rational coordination of activities of a group of people for the purpose of achieving some goal
How about “Hospitals?”

6. Modern Organizations
They are many factors that influence the structure and design of modern organizations
Uncertainty
Specialization
Coordination
Interdependence

7. Uncertainty Managers try to eliminate or reduce uncertainty
Where “Uncertainty” comes from?
Outside or inside of an organization?
There is some evidence that uncertainty is most effectively handled by decentralizing decision making to management level in the organization with information to resolve it

8. Specialization
Why specialization can influence the structure and design of modern organizations?

9. Coordination
When there is specialization, one task of management is to coordinate the diverse specialties to achieve the goals of the organization
Management must balance differing orientation and resolve disputes between specialized subunits

10. Interdependence
The type of interdependence affects the amount of power one unit has in the organization
Three types of mutual dependence
Pooled interdependence
Sequential interdependence
Reciprocal interdependence

11. What Is Organization 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

12. IT and Organizational Flexibility
IT has the ability to change the pace of work and to alter time and space boundaries for work
With properly designed systems, the organization can increase its ability to respond to customers, competitors, and the environment in general

13. MIS Belief
The purpose of employing any technology is to obtain an advantage over old ways of doing business

14. Framework
A framework provides you with a view to organize your thoughts and analyze a problem
A framework is not necessary accepted by everyone

15. Anthony’s Framework of MIS
MIS support management activity, that is, the structure of IS can be classified in terms of hierarchy of management planning and control activities (Anthony, 1965)

16. Simon’s Framework of DM
The decision making stages of intelligence, design, and choice proposed by Simon (1965)
Programmed and Nonprogrammed decisions

17. Gorry and Scott Morton’s Framework of MIS
A framework synthesizing the work of Anthony and Simon is very appealing because it helps us classify a variety of systems (Gorry and Scott Moton, 1971)

18. Harold Leavitt’s Framework for IT Applications
An organization develops some internal structure so the people who work in the organization can perform their tasks
People undertake these tasks so the firm can accomplish its mission or purpose

19. Harold Leavitt’s Framework for IT Applications
Organizational
Structure
People
Firm’s
Technology
Environment
Information
Task

20. Contemporary Framework for IT Applications
IT supports individuals, workgroups, organizations, and linkages among organizations
The changing technology enables the organization to develop applications to support all the tasks involved in managing the firm

21. Contemporary Framework for IT Applications
A focus on the organization as the most important component of the study of IT
The role of technology in supporting managerial tasks
The pervasive nature of technology in the organization

22. Decision Support, Executive IS, and Expert Systems
Decision Support Systems
Executive Information Systems
Expert Systems
Group Support Systems

23. Knowledge Work Support
Personal Computers
Office Software
Portable Computer:
Notebooks
PDAs (Personal Digital Assistants)

24. Supporting Groups and Cooperative Work - Groupware
Groupware such as Lotus Notes can provide the coordination mechanism among individuals in different locations.
Groupware support individuals in different locations can share information on a distributed network.

25. Interorganizational Systems
Partnerships and strategic alliances are created and enhanced with interorganizational systems. (IOSs)
IOSs can vary from connections to full system-to-system connections.
IOSs make possible Virtual Components in which a partner substitutes for some component of your company. (eg. Federal Express)

26. Key Technology
Communications
Networking
Database

27. The Basics of Information Systems
Some Generic Types of Systems
Transactions Processing Systems
Decision-oriented Systems
Communications-oriented Systems

28. Transactions Processing Systems
Workstation
Input
User
Validate
Update
Output
Report
Database

29. Decision-Oriented Systems
Workstation
User
Analysis and
Presentation
Retrieval
System
Model
Management
Database
Model Base

30. Communications-oriented Systems
Workstation
Workstation
Communications
Link
User
User
Computer
Mail Box

31. Different Types of Technology
Simple Batch Systems
Inquiry
Fully On-line
Command and Control
Internet/Intranet
Client-Server

32. Is There Value in IT?
Various Observers have criticized information technology for not providing a satisfactory return on investment.
How valid is this criticism?
The Investment Opportunities Matrix shows that there is not the same likelihood of a return from each IT investment.

33. What is Value? Investment can be measured in
Direct measurement: Money, NPV, ROI,…etc.
Indirect measurement: preventing negative return, keeping up with a competitor, avoiding loss in market share.
Indirect measurement is hard to measure

34. Implications for Management
Why should you care about different kinds of technology?
How do you adapt and use a combination of old and new technologies when you work in a business with old technologies?

35. The Nature of Information
Information can be defined as some tangible or intangible entity that reduces uncertainty about some state or event
Information is data that has been processed into a form that is meaningful to the recipient and is of real perceived value in current or prospective decisions

36. Characteristics of Information
Decision Type
Operational Control
Managerial Control
Strategic Planning
Time Frame Historical Predictive
Expectation Anticipated Surprise
Source Largely Internal Largely External
Scope Detailed Summary
Frequency Real Time Periodic
Organization Highly Structured Loosely Structured
Precision Highly Precise Not Overly Precise

37. From Information to Knowledge
Knowledge can be defined as information plus know-how (Kogut and Zander, 1992)
Information alone is not enough to produce knowledge
We must also understand the best way to use information to solve a problem, contribute to a product or service, or make a similar contribution to the organization

38. From Information to Knowledge
Knowledge builds over time in the heads of employees in the form of past decisions, processes in the organization, characteristics of products, interests of customers, and similar experiences

39. Explicit Knowledge Explicit knowledge is represented by facts.
Textbook, Manual, Document, …,etc.

40. Tacit Knowledge
Tacit knowledge is something we understand but have difficulty explaining.
Riding bicycle, cooking,…,etc.

41. Concepts of Decision Making
Decisions differ in a number of ways
These differences affect the formulation of alternatives and the choice among them
They also affect the design of IS support for decision activities

42. Decision Types Four dimensions of decision:
Level of knowledge of outcomes
Level of programmability
Criteria for the decision
Level of decision impact

43. Knowledge of Outcomes
If the outcomes are known and the values of outcomes are certain
The making of decisions under risk, when only the probabilities of various outcomes are known
Decisions under uncertainty (outcomes known, but not the probabilities)

44. Programmed versus Nonprogrammed Decisons
Programmed decisions are those decisions that can be prespecified by a set of rules or decision procedures
Programmed decisions imply decision making under certainty because all outcomes must be known
Programmed decisions can be delegated to low levels in an organization or automated

45. Criteria for Decision Making
A model of decision making which tells the decision maker how to make a class of decisions is normative or prescriptive
Normative models have generally been developed by economists and management scientists, such as LP, Game theory, etc
The criteria for selecting among alternatives in the normative model is maximization or optimization of either utility or expected value

46. Criteria for Decision Making
A model which describes how decision makers actually make decisions is descriptive
Descriptive models attempt to explain actual behavior and therefore have been developed largely by behavioral scientists
Satisfaction is an alternative view of decision making which comes from the descriptive models

47. How Do Individuals Make Decisions
Herbert Simon (1965) suggests a series of descriptive stages for decision making to help understand the decision process
Intelligence
Design
Choice
Implementation

48. Intelligence
“Problem finding” is conceptually defined as finding a difference between existing situation and some desire state
The purpose of “problem formulation” is to clarify the problem, so that design and choice activities operate on the “right” problem

49. Design
The act of generating alternatives is creative, and creativity may be taught.

50. Choice Decision maker selects one of the alternatives.
The criteria of choice is different among individuals or organizations.

51. Implementation
Implementation is a series of executions that ensure the solution is carried out

52. Organizational Decision Making
How does an organization make a decision?
Major concepts used to explain organizational decision making are quasi-resolution of conflict, uncertainty avoidance, problemistic search, organizational learning, and incremental decision making

53. Quasi Resolution of Conflict
Conflicts among different units are solved by three methods:
Local rationality
Acceptable level decision rules
Sequential attention to goals (The organization responds first to one goal, then to another , so that each conflicting goals has a chance to influence organizational behavior)

54. Uncertainty Avoidance
The behavioral theory of organizational decision making assumes that the organization will seek to avoid risk and uncertainty at the expense of expected value
Some legal methods used to reduce or avoid uncertainty are the following:
Short run feedback and reaction cycle
Negotiated environment

55. Problemistic Search
The search for solution is problem-stimulated; there is very little planned search for solutions not motivated by problems
Search locally either close to the present symptom or close to the present solution
If local search fails, expand the search first to organizationally vulnerable areas before moving to other areas

56. Organizational Learning
Organizations change their goals and revise their problem search procedures on the basis of experience

57. Incremental Decision Making
An incremental decision making in organization is confined to small changes from existing policy and procedures
The emphasis is on correcting or improving existing policies and actions

58. Types of Organizations
The nature of different organization will influence the decision and the kind of information required
Three types of Organizations
Bureaucracy
Charismatic
Adaptive

59. The Influence of the Organization
Bureaucracies try to survive and to minimize uncertainty; members of these organizations stress in job security
We would expect decisions in bureaucracies to be conservative and require modest changes to existing procedures

60. The Influence of the Organization
The charismatic organization is dominated by a strong leader
It is safe to say that the leader is likely to make the decision that subordinates then execute

61. The Influence of the Organization
The adaptive organization tries to respond quickly to its environment
The organization stresses rapid response times and does not have a large number of layers of management

62. The Role of CEO
A key task of top management is formulating corporate strategy
What opportunities for new directions are available?
What are competitors doing?

63. The Role of IT IT offers new ways of doing business
IT can speed up the pace of work and increase the capacity of processing
IT can alter the space and time boundaries of work

64. The Value Chain
The activities in an organization add value to its products or services (Porter and Millan, 1985)
The primary activities in the value chain include inbound logistics, operations outbound logistics, marketing and sales, and service

65. The Value Chain
Each of these activities adds value directly to the firm’s output
Supporting these primary activities are the firm’s infrastructure, human resource management, technology development, and procurement

66. The Value Chain What is the potential impact of IT on the value chain?
Low-cost producer
Differentiation
Market niche

67. Four Steps to Take Advantages of IT
Look for ways to incorporate technology in a product or service
Seek ways to use technology to connect with other firms
Look for ways to use technology to make dramatic changes in the way your structure the organization
Integrate technology with planning

68. Creating and Sustaining A Competitive Edge
Using resources to advantage
Protecting an IT innovation
To sustain an advantage is to overwhelm the competition with technological leadership

69. Integrating Technology with the Business Environment
Managers must consider how technology affects their decisions and how their decisions affect the technology

70. The Mgmt Challenge of Integrating Tech
Information
technology
Search for new
technology
(find out what
technology offers)
Manage
Seek +
development of
opportunities
new technology
Technological
Manage existing
constraints
technology
Impact
Impact
Constraints
Technology
Decision making
Planning
Opportunities
Execution

71. Facts
Visions are rare and difficult to create; leaders are frequently criticized for lack of vision
For an organization, the vision thing is important, especially given the ability of technology to change the structure of the firm, the nature of its business, and the basis for competition

72. Facts
A fundamental responsibility for management is to develop a vision for the business and for the role of IT in achieving that vision

73. Facts The vision should: Describe the mission of the organization
Identify the products and services it produces and the markets
Describe plans for mergers, partnerships, alliances, and acquisitions

74. Facts Firm’s structure is highly related with its strategy
A significant responsibility of management is to integrate technology with all business decisions
Integration means that the manager is aware of how new technology can create opportunities

75. Facts
A corporate strategic plan comes from the firm’s vision for its future activities
This plan includes the vision
It is a road map for bringing about the vision
IT should be an integral part of the firm’s strategic plan

76. A Framework for Managing IT
Vision for the Organization
& Information Technology
IT and Organization
Structure
Corporate Strategic Plan
Integration of
IT and Decision
Making
Strategy
Alliances &
Partnership
Ongoing IT
Operations
IT Initiative
IT Infrastructure

77. System Concepts The term “system” is in common use.
System concepts provide a useful framework for describing and understanding many organizational phenomena.
Definition of a system
General model of a system - IPO model

78. System Concepts Subsystems
The use of subsystems as building blocks is basic to analysis and development of systems
Principles of building a system from subsystems:
Decomposition
Simplification
Decoupling

79. System Concepts Preventing system entropy
System stress and system change
A stress is a force transmitted by a system’s suprasystem that causes a system to change, so that the suprasystem can better achieve its goals.

80. Definition of A System Systems can be abstract or physical
An abstract system is an orderly arrangement of interdependent ideas or constructs
A physical system is a set of elements which operate together to accomplish an objective

81. General Model of A System
A general model of a physical system is input, process, and output
The system is inside the boundary
The environment is outside the boundary
Each system is composed of subsystems which in turn are made up of other subsystems

82. General Model of A System
The interconnections and interactions between the subsystems are termed interfaces
Interfaces occur at the boundary and take the form of inputs and outputs
A subsystem at the lowest level is often not defined as the the process
This system is termed a black box

83. Subsystems
The use of subsystems as building blocks is basic to analysis and development of systems (Divided and Conquer)
Decomposition
Simplification
Decoupling

84. Decomposition
A complex system is difficult to comprehend when considered as a whole
The process of decomposition is continued with subsystems divided into smaller subsystems until the smallest subsystems are of manageable size
The subsystems resulting from this process generally form hierarchical structures

85. Decomposition
In the hierarchy, a subsystem is one element of a suprasystem
Decomposition into subsystems is used both to analyze an existing system and to design and implement a new system

86. Decomposition
The general principle in decomposition which assumes that system objectives dictate the the process is functional cohesion
Components are considered to be part of the same subsystem if they perform or are related to the same function

87. Decomposition
In design, the identification of functionally cohesive subsystems is the first step
The boundary then needs to be clearly specified, interfaces simplified, and appropriate connections established among the subsystems

88. Simplification
The process of decomposition could lead to a large number of subsystem interfaces to define
Simplification is the process of organizing subsystems so as to reduce the number of interconnections

89. Simplification
Clusters of subsystems are established which interact with each other, then a single interface path is defined from cluster to other subsystems or clusters of subsystems
Methods are established for decoupling systems so that the need for interconnection is reduced

90. Decoupling
If two different subsystems are connected very tightly, very close coordination between them is required
The solution is to decouple or loosen the connection so that the two process of decoupling and allowing each subsystem some independence in managing its affairs has many benefits, but it is not without costs

91. System Concepts and Organizations
Organizations are open systems, since they receive unplanned and unscheduled inputs from their environment and adapt in such a way as to continue their existence

92. Questions & Discussion