1. Introduction to Information Technology, 2nd Edition Turban, Rainer & Potter © 2003 John Wiley & Sons, Inc. 13-1 Introduction to Information Technology 2 nd Edition Turban, Rainer & Potter © 2003 John Wiley & Sons, Inc. Strategic Systems and Reorganization (continue …) Prepared by: Roberta M. Roth, Ph.D. University of Northern Iowa

2. Introduction to Information Technology, 2nd Edition Turban, Rainer & Potter © 2003 John Wiley & Sons, Inc. 13-2 The Need for Organizational Change  Organizational structures and processes established in the Industrial Revolution are no longer effective, due to …  Globalization  Pressure for rapid change  Increasingly demanding customers  Opportunities afforded by IT  Focus on vertical, functional organization is inappropriate  Need integration that spans departmental and organizational boundaries

3. Introduction to Information Technology, 2nd Edition Turban, Rainer & Potter © 2003 John Wiley & Sons, Inc. 13-3 Business Process Reengineering  Solution based on fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in measures of performance  Elements:  Job Enrichment  Employee Empowerment  Process Simplification  Mass Customization  Reduced Cycle Time

4. Introduction to Information Technology, 2nd Edition Turban, Rainer & Potter © 2003 John Wiley & Sons, Inc. 13-4 BPR - The Enabling Role of Information Technology  The IT tools for BPR  Simulation and visual simulation tools - to support the modeling activities of BPR  Flow diagrams – depict information flows  Work analysis - analyze current and proposed processes  Workflow software – depict flow of work from place to place through the organization

5. Introduction to Information Technology, 2nd Edition Turban, Rainer & Potter © 2003 John Wiley & Sons, Inc. 13-5 Changes in Work Rules Brought by IT Old RuleIntervening TechnologyNew Rule Information appears in only one place at one time Shared databases, client/server architecture, electronic mail Information appears simultaneously wherever needed Only an expert can perform complex work. Expert systems, neural computingNovices can perform complex work. Managers make all decisions. Decision support systems, enterprise support systems, expert systems Decision making is part of everyone’s job Field personnel need offices to receive, send, store, and process information. Wireless communication and portable computers, information highways, electronic mail Field personnel can manage information from any location. You have to locate items manually. Tracking technology, groupware, workflow software, client/server Items are located automatically Plans get revised periodically. High-performance computing systems Plans get revised instantaneously whenever needed.

6. Introduction to Information Technology, 2nd Edition Turban, Rainer & Potter © 2003 John Wiley & Sons, Inc. 13-6 Changes in Work Rules Brought by IT Old RuleIntervening TechnologyNew Rule People must come to one place to work together. Groupware and group support systems, telecommunication, electronic mail, client/server People can work together from different locations. Customized products and services are expensive and take a long time to develop. CAD-CAM, CASE tools, online systems for JIT decision making, expert systems Customized products can be made fast and inexpensively (mass customization). A long period of time is spanned between the inception of an idea and its implementation (time to market) CAD-CAM, electronic data interchange, groupware, imaging (document) processing Time-to-market can be reduced by 90 percent Work should be moved to countries where labor is inexpensive (off-shore production). Robots, imaging technologies, object-oriented programming, expert systems Work can be also done in countries with high wages and salaries.

7. Introduction to Information Technology, 2nd Edition Turban, Rainer & Potter © 2003 John Wiley & Sons, Inc. 13-7 Restructuring Entire Organizations Customer demographics Checking accounts Installment loans Savings accounts Mortgage loans TrustsEtc Expert system Statement Customer Account manager supported by... Backed up by... Checking expect Loan expect Etc Consolidated statement Reengineered bank with integrated system

8. Introduction to Information Technology, 2nd Edition Turban, Rainer & Potter © 2003 John Wiley & Sons, Inc. 13-8 Networked Organization  Resemble computer networks and are supported by computerized systems  Shift toward the networked organization due to the movement toward an information-based economy Highly structured Control Direct Employees a cost Information management-owned Hierarchical organizations Risk avoidance Individual contributions Hierarchical Organization Informal Loosely structured Delegate/lead Ownership/participation Empower Employees an asset Information shared ownership Flatter/ manageable organizations Team contributions Networked Organization Manage Formal Risk management

9. Introduction to Information Technology, 2nd Edition Turban, Rainer & Potter © 2003 John Wiley & Sons, Inc. 13-9 Networked Organization - Roles of Managers and Subordinates Use of Authority by the Manager Area of Freedom for Subordinates Hierarchical Organization Flattened Organization Network Organization Manager makes decisions and announces or “sells” it. Manager presents ideas and invites questions. Manager presents tentative decision subject to change. Manager presents problem, gets suggestions, makes decision. Manager defines limits; asks group to make decision. Manager permits subordinates to function within limits defined by superior. Manager allows situational leadership to occur based on which node of the network is best equipped to solve problem. 1 2 3 4 5 67

10. Introduction to Information Technology, 2nd Edition Turban, Rainer & Potter © 2003 John Wiley & Sons, Inc. 13-10 Empowerment  Employees have decision-making or approval authority in instances where such authority formerly belonged to managers  Empowerment and Information Technology  Providing the right information at the right time allows employees to make decisions  Increase the availability of knowledge  Tools enable employees to be more creative and productive with higher quality work  Training can be enhanced by IT

11. Introduction to Information Technology, 2nd Edition Turban, Rainer & Potter © 2003 John Wiley & Sons, Inc. 13-11 Ethical and Societal Issues  Unethical tactics  Pressuring competitor ’ s employees to reveal information  Using software that is the intellectual property of other companies without permission  Using IT to monitor the activities of employees and customers and in so doing invading the privacy of individuals  Societal Issues  Reengineering efforts involve dramatic changes in people ’ s jobs and working relationships  Jobs are eliminated

12. Introduction to Information Technology, 2nd Edition Turban, Rainer & Potter © 2003 John Wiley & Sons, Inc. 13-12 Virtual Corporations  Characteristics of Virtual Corporations (VC)  Excellence - each partner brings its core competence so an all- star winning team is created. No single company can match what the virtual corporation can achieve.  Full utilization of resources - some resources of the business partners may be underutilized when not in a VC.  Opportunism - the partnership is opportunistic. A VC is organized to seize market opportunities.  Lack of borders - it redefines traditional boundaries.  Trust - business partners in a VC are far more reliant on each other and more trusting than ever before.  Adaptability to change - the VC can quickly adapt to environmental changes because its structure is relatively simple.  Technology - IT makes the VC effective and efficient.

13. Introduction to Information Technology, 2nd Edition Turban, Rainer & Potter © 2003 John Wiley & Sons, Inc. 13-13 Chapter Summary  Strategic information systems can provide an competitive advantage  Porter’s Competitive Forces model helps reveal competitive strategies that may be supported with IT  Reorganization supported by IT may be needed to stay competitive  IT can provide a number of key innovations, including mass customization, cycle time reduction, empowerment, self-direct teams  IT enables the creation of virtual corporations

14. Introduction to Information Technology, 2nd Edition Turban, Rainer & Potter © 2003 John Wiley & Sons, Inc. 13-14 Copyright © 2003 John Wiley & Sons, Inc. All rights reserved. Reproduction or translation of this work beyond that permitted in Section 117 of the 1976 United Stated Copyright Act without the express written permission of the copyright owner is unlawful. Request for further information should be addressed to the Permissions Department, John Wiley & Sons, Inc. The purchaser may make back-up copies for his/her own use only and not for distribution or resale. The Publisher assumes no responsibility for errors, omissions, or damages, caused by the use of these programs or from the use of the information herein.