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Information Systems in Organizations

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Presentation on theme: "Information Systems in Organizations"— Presentation transcript:

1 Information Systems in Organizations
Chapter 2 Information Systems in Organizations

2 Organizations and Information Systems
A formal collection of people and other resources established to accomplish a set of goals

3 General Model of an Organization
(next slide)


5 Value Chain Term coined by Michael Porter in a 1965 article in the Harvard Business Review Def: a series of activities that includes inbound logistics, warehouse and storage, production, finished product storage, outbound logistics, marketing and sales, and customer service Schematic


7 Organizations Organizational structure
Organizational subunits and the way they are related to the overall organization Traditional organizational structure Major department heads report to a president or top-level manager Schematic

8 Traditional Organizational Structure
S. Burry, President Bailey, Legal counsel B. Wong, VP Accounting C.Rodrig, VP Information Systems R. Henderson, VP Marketing K. Kelly, VP Production V. Cisborn, VP Human Resources S. Samuel Supervisor L. Bashran, Supervisor Traditional Organizational Structure

9 Terminology (1) Hierarchical organizational structure
See previous slide Series of levels Those at high levels have more power and authority within an organization Flat organizational structure An organizational structure with a reduced number of layers of management

10 Terminology (2) Empowerment
Giving employees and their managers more power, responsibility, and authority to make decisions, take certain actions, and have more control over their jobs

11 Other Organizational Structures (1)
Schematic Project organizational structure An organization structure centred on major products or services Contrast with traditional structure Team organizational structure An organizational structure centred on work teams or groups

12 Project Organizational Structure
B. Woods, President Air & Aerospace Co. T. Walker, Senior VP, Aircraft Division W. Butler, Senior VP, Aerospace Division O. Teco, Senior VP, Communications & Satellite Division VP, Finance VP, Marketing VP, Production VP, Sales VP, Finance VP, Marketing VP, Production VP, Sales VP, Finance VP, Marketing VP, Production Project Organizational Structure

13 Other Organizational Structures (2)
Multidimensional organizational structure A structure that may incorporate several structures at the same time Schematic

14 Vice President, Marketing Vice President, Production
Vice President, Finance Publisher, College Division Marketing Group Production Group Finance Group Publisher, Trade Division Publisher, High School Division Multidimensional Organizational Structure

15 Other Organizational Structures (3)
Advantages and disadvantages of different organizational structures Read the book!

16 Organizational Culture and Change (1)
A set of major understandings and assumptions shared by a group Organizational culture The major understandings and assumptions for a business, a corporation, or an organization

17 Organizational Culture and Change (1)
Organizational change Deals with how for-profit and non-profit organizations plan for, implement, and handle change Organizational learning The way organizations adapt to new conditions or alter their practices over time

18 Models of Change ‘Change model’
A representation of change theories developed by Kurt Lewin and Edgar Schein in 1969 Three-stage approach Unfreezing Moving Refreezing Schematic

19 Change Model

20 Reengineering Also called ‘Process redesign’
The radical redesign of business processes, organizational structures, information systems, and values of the organization to achieve a breakthrough in business results For example, to… Reduce delivery time Increase product and service quality Improve customer satisfaction Increase revenues and profitability

21 Rules, Rules, Rules Reengineering requires finding and vigorously challenging old rules Rule Original rationale Potential problem Small orders held until full truckload Reduce delivery costs Customer deliver is delayed No order accepted until credit approved Reduce potential for bad debt Customer service is poor All product decisions made at headquarters Reduce number of items in inventory Perception of limited product selection

22 Other Models Continuous improvement
Constantly seeking ways to improve the business processes to add value to products and services

23 Continuous Improvement vs. Reengineering
Strong action to solve serious problem Routine action Driven by senior executives Worker-driven Broad in scope; cuts across organizations Narrow in scope Goal to achieve a major breakthrough Continuous, gradual Often led by outsiders Led by workers IS integral to the solution IS provides data to guide

24 Total Quality Management
The ability of a product (including service) to meet or exceed customer expectations TQM A collection of approaches, tools, and techniques, that offers a commitment to quality throughout the organization

25 Outsourcing and Downsizing
Contracting with outside professional services to meet specific business needs E.g., advertising, hiring Downsizing Reducing the number of employees to cut costs Also called ‘rightsizing’ May have serious side effects E.g., low employee morale, a need for expensive consultants, lost time, waning productivity

26 Competitive Advantage
A position, product, service, etc., within a business that improves a position within a market with respect to competitors Porter’s ‘Five force’ model of competitive advantage Identifies factors that lead to competitiveness Schematic

27 Substitute Products Buyer Power Supplier Power Rivalry New Entrants
Porter’s Five-force Model

28 Strategic Planning for Competitive Advantage
Four techniques: Strategic alliances (aka strategic partnerships) Creating new goods or services Improving existing goods or services Using information systems for strategic purposes Next slide

29 Strategic alliance An agreement between two or more companies that involves the joint production and distribution of goods and services E.g., Chrysler + Daimler Benz Creating new goods or services A company may become stagnant without the introduction of new goods and/or services E.g., Compaq, Dell Improving existing goods or services Small variations to existing goods or services, and/or complete modifications E.g., “light” foods Using information systems for strategic purposes IS for improving organizational effectiveness E.g., SABRE (airline reservation system)

30 Performance-based Information Systems
Productivity A measure of the output achieved divided by the input required Productivity = Output achieved Input required

31 Productivity An example is given in the top paragraph on p. 65
This is a bad example! Why?

32 Return on Investments (ROI) and the Value of IS
Return on investment (ROI) A measure of IS value that investigates the additional profits or benefits that are generated as a percentage of the investment in information systems technology represents

33 Measures of IS Value Earnings growth Market share
Customer awareness and satisfaction One of my favourite quotes: When you cannot measure, your knowledge is of a meager and unsatisfactory kind. Kelvin

34 Justifying IS Categories: Tangible savings Intangible savings
Legal requirements Modernization Pilot project

35 Roles, Functions, and Careers in the IS Department
Categories: Operations Systems development Support Liaisons (information service units) Schematic

36 IS Department CEO CIO Other functional areas Operations
Information Resource Management Functions Operations Systems development Support Information service unit Computer facility operations Systems analysis & design Data administration Data entry Information centre Programming Information technololgy Local Area network operations IS Department

37 Information Centre Information centre
Provides users with assistance, training, application development, documentation, equipment selection and setup, standards, technical assistance, and troubleshooting

38 Information Service Unit
Attached to a functional area of the business. Acts as a local information support organization within a functional area. Performs the critical role of liaison between the functional area and IS

39 Chief Information Officer (CIO)
A manager at the vice-president level responsible for IS planning, policy, and standards Focused on supporting corporate goals

40 Other IS Roles Database Administrator Systems Programmer
Network Specialist LAN Administrator Webmaster Trainer

41 IS Principles Use of IS strongly influenced by organizational structure and problem orientations IS are often intertwined within the value-added processes IS usage may require change that could meet with resistance Value-added IS needs to be continually sought

42 End of Chapter 2 Chapter 3

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