itec 1010 information and organizations chapter 2 information systems in organizations

ITEC 1010 Information and Organizations

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

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

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


Traditional Organizational Structure

S. Burry,President

A.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


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)

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)

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

Schematic


Project Organizational Structure

B. Woods,President

Air & 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,Finance

VP,Marketing

VP,Production

VP,Sales

VP,Finance

VP,Marketing

VP,Production

VP,Sales



Multidimensional organizational structure A structure that may incorporate several

structures at the same time Schematic


Multidimensional Organizational Structure

Vice President,Marketing

Vice President,Production

Vice President,Finance

Publisher,College Division

MarketingGroup

ProductionGroup

FinanceGroup

Publisher,Trade Division

MarketingGroup

ProductionGroup

FinanceGroup

Publisher,

High SchoolDivision

MarketingGroup

ProductionGroup

FinanceGroup



Advantages and disadvantages of different organizational structures Read the book!


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 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

‘Change model’ A representation of change theories developed

by Kurt Lewin and Edgar Schein in 1969 Three-stage approach

• Unfreezing

• Moving

• Refreezing

Schematic


Change Model


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

Reengineering requires finding and vigorously challenging old rules

Rule Original rationale Potential problem

Small orders held until full truckload

Reduce delivery costs

Customer deliver is delayed

No order accepted until credit approved

Reduce potential for bad debt

Customer service is poor

All product decisions made at headquarters

Reduce number of items in inventory

Perception of limited product selection


Other Models

Continuous improvement Constantly seeking ways to improve the

business processes to add value to products and services


Continuous Improvement vs.Reengineering

Reengineering Continuous Improvement

Strong action to solve serious problem Routine action

Driven by senior executives Worker-driven

Broad in scope; cuts across organizations

Narrow in scope

Goal to achieve a major breakthrough Continuous, gradual

Often led by outsiders Led by workers

IS integral to the solution IS provides data to guide


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 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 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


Porter’s Five-force Model

SubstituteProducts

SubstituteProducts

SupplierPower

SupplierPower

NewEntrants

NewEntrants

BuyerPower

BuyerPower RivalryRivalry


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


1. Strategic alliance An agreement between two or more companies that

involves the joint production and distribution of goods and services

E.g., Chrysler + Daimler Benz2. Creating new goods or services

A company may become stagnant without the introduction of new goods and/or services

E.g., Compaq, Dell3. Improving existing goods or services

Small variations to existing goods or services, and/or complete modifications

E.g., “light” foods4. Using information systems for strategic purposes

IS for improving organizational effectiveness E.g., SABRE (airline reservation system)


Performance-based Information Systems

Productivity A measure of the output achieved divided by

the input required

Productivity = Output achieved

Input required


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

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

represents


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

One of my favourite quotes:

When you cannot measure, your knowledge is of a meager and unsatisfactory kind.

Kelvin


Justifying IS

Categories: Tangible savings Intangible savings Legal requirements Modernization Pilot project


Roles, Functions, and Careers in the IS Department

Categories: Operations Systems development Support Liaisons (information service units)

Schematic


IS Department

CEO

CIO

OperationsSystems

developmentSupport

Informationservice

unit

Otherfunctional

areas

Dataadministration

Informationcentre

Informationtechnololgy

Systemsanalysis& design

Programming

Computerfacility

operations

Dataentry

LocalArea network

operations

InformationResourceManagementFunctions


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 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) A manager at the vice-president level

responsible for IS planning, policy, and standards

Focused on supporting corporate goals


Other IS Roles

Database Administrator Systems Programmer Network Specialist LAN Administrator Webmaster Trainer


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


End of Chapter 2

Chapter 3

itec 1010 information and organizations chapter 2 information systems in organizations

Documents

slide slide

vp marketing

marketing vp

vp production

production vp

vp information systems

finance vp

senior vp