copyright © 2004 sherif kamel it and organizational redesign and transformation sherif kamel the...

Copyright © 2004 Sherif Kamel

IT and Organizational Redesign and Transformation

Sherif Kamel

The American University in Cairo


Outline

IT and organizational transformation Strategic/structured alignment processes How IT affects the organization? Types of management support systems Systems development methodology


The 1990s and beyondIncreased connectivity and organizational transformations

1990s business forceso Globalizationo Worldwide competitiono Volatile environment

Increased connectivityo Inter-organizational business relationshipso Intra-organizational coordination for increased efficiency and effectivenesso Adaptable organization structures

1990s information technology opportunitieso Continued dramatic cost performance and capacity advanceso New IT architectures encompassing:

Extensive communications networks Accessible distributed databases Enhanced human interface workstations


InnovationProcess

Current and FutureInformation

Technologies

ITApplications

OrganizationalChanges

OrganizationalChanges

CorporateMission & Strategy

Copyright © 1990 Scott Morton

Strategic alignment process


It is important to note…

Information technology does not change what people do but rather it helps restructuring processes.

Information technology is an important factor for organizational transformation.


PotentialEntrants

Substitutes

CustomersThe

OrganizationSuppliers

IT and organizational transformation

Copyright © 1980 Porter


Clerk

Claims Mgr

Clerk

Clerk

Clerk

Mail

Mail

Model organizational office


Mail

DocumentImage

Database

E-Mail

FAXE-Mail

FAX

Claims Mgr

Mail

changed organization, fewer users, lower costs and improved service

The Re-engineered Office


The distribution of power Cultural adaptation Opportunities for small organizations New organizations, new work practices, and new

lifestyles

Organizational issues


Organizational shift

We are entering a period of change - a shift from the command and control organization, to the information based organization - the organization of knowledge specialists

Copyright © 1988 Drucker


IS organizational alignment An organizational strategic objective to align information

systems (as a function, unit, department, service) with the organization as a whole

Role of IT alignment within the organization…what is the impact?

Structure of the organization and IT alignment (formal and information organizational channels and information flows


Components of IS alignment?

Strategic alignmento Importance in improving IS performance

Structural alignmento Examines the degree of structural fit between IS and the

business focusing on… IS decision making rights Reporting relationships Decentralization and centralization of IS services Infrastructure Deployment of IS personnel


Strategic alignment

Communication and understanding between line management and IS executives.

Linking business and IS mission, priorities and strategies.

Interconnected business and IS planning processes and resulting plans.

Line executive commitment to IS issues and initiatives.


Structural alignment

IS skills of line personnel and business skills of IS personnel

Decentralized and centralized reporting relationships and committees

Informal networks and relationships Career paths and cross-functional linkages Incentives and rewards Performance measurement and evaluation


Important remarks

Strategic alignment theory and practice should be in sync

Structural alignment varied by organization – there is no one specific way that could be right for all organizations

IS strategic alignment mattered more than formal IS structural alignment

The informal organizational structure is more important to IS alignment than commonly recognized

Strong company culture may be a precondition to an informal structure that fosters alignment

Alignment of the informal structure needs more attention


automates…o applications are designed to do better what we are doing now

informates…o applications are automate type applications which generate

useful information as a by-product

transformates…o applications achieve an end result in a new way

Information technology…


How IT affects organizations?

Information technology could change hierarchy of decision making

Lower cost of information acquisition Broadens the distribution of information Task force networked organizations Uses networks to link people, assets, and ideas to create

and distribute products and services without being limited to physical locations


Types ofManagement Support Systems

Operational (transaction processing systems)o Projects scheduling (semi-structured)o Accounts (structured)

Knowledge Systemso Office technology applications (structured)o Product design (unstructured)

Managemento Management information systems (structured)o Decision support systems (semi-structured/unstructured)

Strategico Executive support systems (unstructured)


Issues to be raised…

How could building a new information system change the way an organization works?

How can a company make sure that the new information systems it builds fit its business plan?

What are the steps required to build a new information system?

What alternative methods for building information systems are available?

Are there specific techniques or approaches for building a new information system?


Developing business systems

The interaction between business problems and IS solutions is growing exponentially

Continuous propositions for organizational development using various IT tools

Key issue: is to define how information systems solutions that meet business and organizational needs can be developed


Structured development – the waterfall approach (classic system development life cycle)

o Structured programming development methodologyo Automated project management systemo Database management systemo Mix of online and batch applications in the same systemo Development of mostly mainframe applicationso User participation mainly in require definition and installation

phases

Foundations of system development


Waterfall Approach [classical]

Planning

Analysis

Design

Implementation


Systems approach

The systems approach to problem solving uses a systems orientation to define problems and opportunities and develop solutions

There are a number of steps involved including:1. Recognize and define a problem or opportunity using systems

thinking

2. Develop and evaluate alternative system solutions

3. Select the system solution that best meets your requirements

4. Design the selected system solution

5. Implement and evaluate the success of the designed system


Systems thinking

Using systems thinking to understand a problem or opportunityo It is a very important factor in the systems approacho Systems thinking could be described as:

Seeing interrelationships among systems rather than linear cause-and-effect chains when events occur

Seeing processes of change among systems rather than discrete snapshots of change whenever change occurs


Systems thinking – Example

A business organization or a business processo Problem or opportunity ariseso System of input-processing-output-feedback-controlo Understanding and solving problemso Developing processes of work to render problem solving a

standard process


Systems thinking

Poor SalesManagement ?

Inadequate SellingEffort ?

Poor Sales Performance ?

Out-of-Date SalesProcedures ?

Input Processing Output

Control

FeedbackIncorrect

Sales Information ?


Systems development cycle

Investigate Analyze Design Implement Maintain

Developing Information Systems Solutions


IS development

Using the systems approach to develop information systems is called SDLC

SDLC = Systems Development Life Cycle Most computer-based IS are conceived, designed, and

implemented using some form of systematic development process

End-users and information specialists design IS based on an analysis of the information requirements of an organization


Prototyping

Prototyping is the rapid development and testing of working models or prototypes of new applications in an interactive, iterative process that could be used by IT and business professionals

Prototypes is sometimes called Rapid Application Design (RAD)

Prototyping has enlarged the role of end-users and changed the methods of IS specialists in systems development


Prototyping process

Prototyping can be used to small and large organizations Prototype systems are refined until it is acceptable Prototyping is an iterative and interactive process that

combines steps of the traditional systems development cycle

Example:o One can develop, test and refine prototypes of management

reports, data entry screens or output displays.


Traditional systems development cycle

Systems InvestigationProduct

Feasibility Study

Systems AnalysisProduct

Functional Requirements

Systems DesignProduct

System Specifications

Systems ImplementationProduct

Operational System

Systems MaintenanceProduct

Improved System

• How to address business opportunities and priorities• Conduct a feasibility study to determine whether a new

or improved business system is a feasible solution• Develop a project management plan and obtain

management approval

• Analyze the information needs of employees, customers and other business stakeholders

• Develop the functional requirements of a system that can meet business priorities and stakeholders needs

• Develop specifications for the hardware, software, people, network, and data resources and the information products that will satisfy the functional requirements of the proposed business system

• Acquire (or develop) hardware and software• Test the system and train people to operate and use it• Convert to the new business system

• Use a post-implementation review process to monitor, evaluate, and modify the business system as needed

Understand businessProblem/opportunity

Develop an IS Solution

Implementthe IS Solution


How to gather information?

Interviews (open/close ended) Questionnaires Observations Examination of documents (secondary data) Development of model (testing)


Feasibility of IS development

OrganizationalFeasibility

EconomicFeasibility

TechnicalFeasibility

OperationalFeasibility


IS Benefits

Tangible benefits

Intangible benefits


IS development benefits - tangibles

Increase in sales or profits Decrease in information processing costs Decrease in operating costs Decrease in required investments Increase in operational efficiency


IS development benefits - intangibles

Improved information availability Improved abilities in analysis Improved customer service Improved employee morale Improved management decision making Improved competitive position Improved business image


Systems analysis

It is the study of information needs of the organization and end-users

It is also the overview of all activities, resources, and products of any present information systems

It is the information systems capabilities required to meet the information needs of all involved in the organization’s activities


Systems analysis cycle

Understand User Needs

Co-DevelopmentForm SystemsDevelopment Team

Final System Design

Open-ended interviewsIdentify key issues

Verify findingsWorkshops

Observations onsiteData analysis

Design Concepts


Systems development using prototypingIdentify an end user’s

businessrequirements

Developbusiness system

prototypes

Revise the prototypes to better meet end user requirements

Use and maintainthe accepted

business System

• Investigation/AnalysisEnd users identify their business needs and assess the feasibility of several alternative IS solutions.

PrototypeCycle

MaintenanceCycle

• Analysis/DesignEnd users and/or systems analysis use application development packages to interactively design and test prototypes of IS components that meet end user business needs

• Design/ImplementationThe business system prototypes are tested, evaluated and modified repeatedly until end users find them acceptable.

• Implementation/MaintenanceThe accepted business can be modified easily since most system documentation is stored on disk.


Benefits of systems development

Infrastructure management – reduce costs Customer relationship – provide service Product innovation – speed


Help departments do their job better with the goal to increase organizational efficiency

Implement successfully the business strategy Meeting deadlines and milestones, operating within budget, and

doing quality work Realizing marketplace goals Assessing customer relations, employee morale, customer

opinion Impact of an IT investment extends to…

o Economic performance payoffs - market measures of performance

o Organizational process impacts - process changeo Technology impacts - key functionality

How to measure systems benefits?

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