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Introduction. Managing and Using Information Systems: A Strategic Approach by Keri Pearlson & Carol Saunders. Introduction. How effective can a business manager be when they are not involved in the IS decisions of their organizations? Should managers rely on experts to make these decisions?

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Introduction

Managing and Using Information Systems: A Strategic Approach

by Keri Pearlson & Carol Saunders


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Introduction

  • How effective can a business manager be when they are not involved in the IS decisions of their organizations?

  • Should managers rely on experts to make these decisions?

  • What risks is management making when it permits others to make critical IT decisions for the organization?

Copyright 2006 John Wiley & Sons, Inc.


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Real World Examples

  • Amazon.com has garnered a leadership position in the online world by leveraging their new business model. See www.amazon.com

    • Expanded market offerings.

    • Increased customization and personalization

    • Smarter storage

    • Cost cutting.

  • Google has become the leader in the search engine market through innovation, simplicity, and by adding new features.

    • See www.google.com

    • Their mission statement can be found at http://www.google.com/corporate/

Copyright 2006 John Wiley & Sons, Inc.


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THE CASE FOR PARTICIPATING IN DECISIONS ABOUT INFORMATION SYSTEMS

Copyright 2006 John Wiley & Sons, Inc.


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Participating in Information Decisions SYSTEMS

  • Business managers “must” be involved in information decisions.

  • Figure I.1 describes reasons why. IS …

    • is a critical resource.

    • enables change in how people work together.

    • is integrated with almost every aspect of business.

    • enables business opportunities and new strategies.

    • can be used to combat business challenges from competitors.

  • Technology is ubiquitous.

Copyright 2006 John Wiley & Sons, Inc.


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A Business View SYSTEMS

  • IT is a critical resource.

  • IT is over 50% of capital goods dollars spent in the US.

    • Over $3,800 a year per capita.

    • High growth firms invest more in IT.

  • Business managers decide resource allocation.

Copyright 2006 John Wiley & Sons, Inc.


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People and Technology SYSTEMS

  • People and Technology work together.

    • Technology is critical.

    • Workers rely heavily on technology.

  • Managers must know how to mesh both.

    • Examine long-term and short-term consequences.

    • Manage change carefully.

  • Technology changes rapidly.

Copyright 2006 John Wiley & Sons, Inc.


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WHAT IF A MANAGER DOESN’T PARTICIPATE? SYSTEMS

Copyright 2006 John Wiley & Sons, Inc.


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Think About IT SYSTEMS

  • What risks does a manager take if they are NOT involved in IS decisions?

  • If IS directly impacts profitability of a business then how can non-participation “hurt” the bottom-line?

  • How does making the wrong decision impact business goals and organizational systems?

Copyright 2006 John Wiley & Sons, Inc.


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Business Goals SYSTEMS

  • IS must support business goals.

    • It is not an end but a means to an end.

    • Support and strategic focus.

  • Toys R Us IT debacle.

    • Must meet user needs.

    • Must be able to support business transactions.

Copyright 2006 John Wiley & Sons, Inc.


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Organizational Systems SYSTEMS

  • IT must support organizational systems

    • The people, work processes, and structure.

  • Carefully consider the consequences of making an IS change.

    • How will this impact the way work is done?

    • Will the people accept this new technology?

    • What changes may need to be made in the structure of the organization?

Copyright 2006 John Wiley & Sons, Inc.


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WHAT SKILLS ARE NEEDED TO PARTICIPATE EFFECTIVELY IN INFORMATION TECHNOLOGY DECISIONS?

Copyright 2006 John Wiley & Sons, Inc.


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Basic Skills Needed INFORMATION TECHNOLOGY DECISIONS?

  • Myth - technical expertise is not needed to participate.

  • Managerial role and skills needed (Fig I.2):

    • Visionary – creativity, curiosity, confidence, focus on business solutions, flexibility.

    • Informational and Interpersonal – communication, information gathering, interpersonal skills.

    • Structured – project management, analytical skills, organizational skills, planning skills.

Copyright 2006 John Wiley & Sons, Inc.


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BASIC ASSUMPTIONS INFORMATION TECHNOLOGY DECISIONS?

  • Managers must know about both using and managing information.

  • Managers must be knowledgeable participants in IS decisions.

    • The general manager must have a basic understanding of the business and technology issues related to IS.

  • Technology of today is different from the technology of yesterday.

Copyright 2006 John Wiley & Sons, Inc.


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  • The role of the general manager and IS manager are distinct. INFORMATION TECHNOLOGY DECISIONS?

    • The GM must have a basic understanding of IS to make decisions that may have significant implications for the business.

    • The IS manager must have general business knowledge and a more in depth knowledge of IS to support its function.

Copyright 2006 John Wiley & Sons, Inc.


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Management Assumptions INFORMATION TECHNOLOGY DECISIONS?

  • Four key activities of the classic view of management (Fig I.3).

    • Planning

    • Organizing

    • Leading

    • Controlling

  • Classic view is seen as more of a tactical approach to management.

Copyright 2006 John Wiley & Sons, Inc.


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Mintzberg Model INFORMATION TECHNOLOGY DECISIONS?

  • The Mintzberg model describes management in behavioral terms (Fig I.4).

    • Interpersonal

    • Informational

    • Decisional

  • Managers work in a chaotic environment.

  • Quality information is crucial.

  • More of a strategic view of management.

Copyright 2006 John Wiley & Sons, Inc.


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Business Assumptions INFORMATION TECHNOLOGY DECISIONS?

  • Internal Model

    • Understanding of what constitutes a business.

    • Managers use to make sense of the chaotic business environment in which they function.

    • Functional and process views of business.

Copyright 2006 John Wiley & Sons, Inc.


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Functional View INFORMATION TECHNOLOGY DECISIONS?

  • Functional View of the business

    • Based on the functions people perform.

    • Information flows vertically in the organization.

    • Sometimes information flows across the organization.

    • Accounting, Operations, Marketing, Sales and Support.

    • Executive Management receives the information and distributes as need arrives.

    • See Figure I.5

Copyright 2006 John Wiley & Sons, Inc.


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Figure I.5 Hierarchical View of the firm. INFORMATION TECHNOLOGY DECISIONS?

Copyright 2006 John Wiley & Sons, Inc.


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Process View INFORMATION TECHNOLOGY DECISIONS?

  • This model sees the business by the processes it performs to achieve its goals.

  • Porter describes business in terms of its primary and support activities.

    • Primary – inbound and outbound logistics, operations, marketing and sales.

    • Support – HR, technology, procurement, infrastructure.

  • Activities are linked together to form a chain – the value chain (fig I.6).

Copyright 2006 John Wiley & Sons, Inc.


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Figure I.6 Process View of the Firm: The Value Chain INFORMATION TECHNOLOGY DECISIONS?

Copyright 2006 John Wiley & Sons, Inc.


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Information Hierarchy INFORMATION TECHNOLOGY DECISIONS?

  • Data, Information, and Knowledge are not interchangeable terms.

    • Data – set of specific objective facts or observations (inventory contains 100 widgets).

    • Information – data endowed with relevance and purpose (75% of widgets were purchased by customers in December) – see fig I.8.

    • Knowledge - information that has been synthesized and contextualized to provide value.

Copyright 2006 John Wiley & Sons, Inc.


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Figure I.8 Information Characteristics across Hierarchical Levels

Copyright 2006 John Wiley & Sons, Inc.



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System Hierarchy Levels

  • Information systems are comprised of three main elements:

    • Technology

    • People

    • Process

  • Infrastructure – everything that supports the flow of processing information

    • Hardware, software, data, and components.

  • Architecture – strategy implicit in these components.

Copyright 2006 John Wiley & Sons, Inc.


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Figure I.9 System Hierarchy Levels

Copyright 2006 John Wiley & Sons, Inc.


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SUMMARY Levels

Copyright 2006 John Wiley & Sons, Inc.


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Summary Levels

  • Business managers “must” be involved in information decisions.

  • Technology is ubiquitous.

  • IT is a critical resource.

  • People and Technology work together.

  • Certain key skills are needed.

  • Data, Information, and Knowledge are distinct.

Copyright 2006 John Wiley & Sons, Inc.


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  • Copyright 2006 John Wiley & Sons, Inc. Levels

  • All rights reserved. Reproduction or translation of this work beyond that named in Section 117 of the 1976 United States Copyright Act without the express written consent 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 contained herein

Copyright 2006 John Wiley & Sons, Inc.