organizations and information systems

Principles of Information Systems, Seventh Edition

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The use of information systems to add value to the organization is strongly influenced by organizational structure, culture, and change.

Changes in the org. will cause changes in IS Changes in IS and Technology will change the

org. A good example is ERP. What role will you play in Org. structure, culture,

change management and decisions regarding the use of IS’s?


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Because information systems are so important, businesses need to be sure that improvements or completely new systems help lower costs, increase profits, improve service, or achieve a competitive advantage TCO is used to help measure ROI

What is ROI and why is it important to organizations.


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Organizations and Information Systems Organization: a formal collection of people and

other resources established to accomplish a set of goals.

Are there any org’s within the same industry that are exactly the same??? Do organizations change over time?

An organization is a system

Inputs to the system: resources such as materials, people, and money. (land, labor, and capital

Outputs to the environment: goods or services


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Organizations and Information Systems (continued) Value chain: a series (chain) of activities that

includes inbound logistics, warehouse and storage, production, finished product storage, outbound logistics, marketing and sales, and customer service

Upstream management: management of raw materials, inbound logistics, and warehouse and storage facilities

Downstream management: management of finished product storage, outbound logistics, marketing and sales, and customer service


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Value Chain, again

Why is the concept of the value chain important??

Cone’s answer. Always looking at all processes and activities

determining how you can change, add, or delete processes with information systems to add value to products or services.

This will be in your realm as a decision maker. The only way that you will be successful in your own business or by working for a business is to make “good” decisions.


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Organizational Structure

Organizational structure: organizational subunits and their relationship with the overall organization

Categories of organizational structure:

Traditional

Project

Team

Multidimensional

Virtual


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Traditional Organizational Structure A hierarchical structure

Major department heads report to a president or top-level manager

A managerial pyramid shows the hierarchy of decision making and authority


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Figure 2.3: A simplified organizational model, showing the managerial pyramid

What does this do with making decisions ???


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Figure 2.4: A Traditional Organizational Structure


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Project Organizational Structure

Centered around major products or services

Temporary project teams


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Team Organizational Structure

Centered on work teams or groups

Temporary or permanent teams

Various sizes


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Multidimensional Organizational Structure

May incorporate several structures at the same time

Advantage: ability to simultaneously stress both traditional corporate areas and important product lines

Disadvantage: multiple lines of authority


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Virtual Organizational Structure and Collaborative Work

Employs individuals, groups, or business units in geographically dispersed areas

People may never meet face to face

A job is not necessarily a place you go to.

Can be permanent or temporary

Collaborative work: managers and employees can effectively work in groups around the world


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Reengineering

Process redesign

Radical redesign of business processes, organizational structures, information systems, and values of the organization to achieve a breakthrough in business results


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Figure 2.8: Reengineering


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Continuous Improvement

Constantly seeking ways to improve business processes

Benefits:

Increased customer loyalty

Reduced customer dissatisfaction

Reduced opportunity for competitive inroads


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Technology Diffusion, Infusion, and Acceptance

Technology diffusion: measure of how widespread the use of technology is in an organization

Technology infusion: extent to which technology permeates a department


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Technology Diffusion, Infusion, and Acceptance

Technology Acceptance Model (TAM): specifies factors that can lead to higher usage of technology in an organization such as

The perceived usefulness of the tech.

The ease of its use

The quality of the IS

The degree to which the org. supports the use of the IS. What else????


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Technology Diffusion, Infusion, and Acceptance What is the best mixture of the diffusion,

infusion, and acceptance for best performance and profitability ???


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Outsourcing, On-Demand Computing, and Downsizing

Outsourcing: contracting with outside professionals

On-demand computing: contracting for computer resources to rapidly respond to an organization’s varying workflow

Downsizing: reducing the number of employees in an organization to cut costs. Usually the result of what???


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Competitive Advantage

Competitive advantage: significant, long-term benefit to a company over its competition

Once you achieve competitive advantage using IS’s you can usually keep it for a rather long time. Agree? Why?

Ability to establish and maintain a competitive advantage is vital to a company’s success


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Factors That Lead Firms to Seek Competitive Advantage

Rivalry among existing competition

Threat of new entrants

Threat of substitute products and services

Bargaining power of customers and suppliers


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Table 2.4: Competitive Advantage Factors and Strategies


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Major Stages in the Use of IS

1960’s. Oriented toward cost reduction and productivity. Ignored the revenue side.

1980’s. Oriented toward spending large amounts on IS and ignoring the costs.

Today. Performance based information systems. Next Slide.


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Performance-Based Information Systems

Considers both strategic advantage and costs

Uses productivity, return on investment (ROI), net present value, and other measures of performance


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Productivity

A measure of output achieved divided by input required

Higher level of output for a given level of input means greater productivity

Measured by OPMH


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Return on Investment and the Value of Information Systems

Earnings growth

Market share

Customer awareness and satisfaction

Total cost of ownership


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Roles, Functions, and Careers in the Information Systems Department Primary responsibilities in information systems

Operations: focuses on the efficiency of information systems functions

Systems development: focuses on specific development projects and ongoing maintenance and review

Support: provides user assistance

organizations and information systems

Documents

new systems

value chain important

organizational subunits

outbound logistics

inbound logistics

editionvalue chain

management of raw materials

series chain of activities