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Chapter 2. Information Systems in Organizations. Organizations and Information Systems. Organization A formal collection of people and other resources established to accomplish a set of goals. General Model of an Organization. (next slide). Value Chain.

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chapter 2

Chapter 2

Information Systems in Organizations

organizations and information systems
Organizations and Information Systems
  • Organization
    • A formal collection of people and other resources established to accomplish a set of goals
value chain
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

organizations
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

slide8

S. Burry,

President

  • Bailey,Legal counsel

B. Wong,

VP Accounting

C.Rodrig,VP InformationSystems

R. Henderson,VP Marketing

K. Kelly,VP Production

V. Cisborn,VP HumanResources

S. SamuelSupervisor

L. Bashran,Supervisor

Traditional Organizational Structure

terminology 1
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
terminology 2
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
other organizational structures 1
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
slide12

B. Woods,

PresidentAir & 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

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

Schematic

other organizational structures 3
Other Organizational Structures (3)
  • Advantages and disadvantages of different organizational structures
    • Read the book!
organizational culture and change 1
Organizational Cultureand Change (1)
  • Culture
    • 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
organizational culture and change 117
Organizational Cultureand 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
models of change
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

reengineering
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
rules rules rules
Rules, Rules, Rules
  • Reengineering requires finding and vigorously challenging old rules
other models
Other Models
  • Continuous improvement
    • Constantly seeking ways to improve the business processes to add value to products and services
total quality management
Total Quality Management
  • Quality
    • 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
outsourcing and downsizing
Outsourcing and Downsizing
  • Outsourcing
    • 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
competitive advantage
Competitive Advantage
  • 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

slide27

SubstituteProducts

BuyerPower

SupplierPower

Rivalry

NewEntrants

Porter’s Five-force Model

strategic planning for competitive advantage
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

slide29
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)
performance based information systems

Output achieved

Input required

Productivity =

Performance-based Information Systems
  • Productivity
    • A measure of the output achieved divided by the input required
productivity
Productivity
  • An example is given in the top paragraph on p. 65
  • This is a bad example!
  • Why?
return on investments roi and the value of is

represents

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
measures of is value
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

justifying is
Justifying IS
  • Categories:
    • Tangible savings
    • Intangible savings
    • Legal requirements
    • Modernization
    • Pilot project
roles functions and careers in the is department
Roles, Functions, and Careers in the IS Department
  • Categories:
    • Operations
    • Systems development
    • Support
    • Liaisons (information service units)

Schematic

slide36

CEO

CIO

Other

functional

areas

InformationResourceManagementFunctions

Operations

Systemsdevelopment

Support

Informationservice

unit

Computer

facility

operations

Systems

analysis

& design

Data

administration

Data

entry

Information

centre

Programming

Information

technololgy

Local

Area network

operations

IS Department

information centre
Information Centre
  • Information centre
    • Provides users with assistance, training, application development, documentation, equipment selection and setup, standards, technical assistance, and troubleshooting
information service unit
Information Service Unit
  • 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
chief information officer cio
Chief Information Officer (CIO)
  • Chief Information Officer (CIO)
    • A manager at the vice-president level responsible for IS planning, policy, and standards
    • Focused on supporting corporate goals
other is roles
Other IS Roles
  • Database Administrator
  • Systems Programmer
  • Network Specialist
  • LAN Administrator
  • Webmaster
  • Trainer
is principles
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