Chapter 2 Information Systems in Organizations

Chapter TwoIS for management2 Information Systems in Organizations 4 Organization –Collection of people and resources established to accomplish a set of goals (profit & non-profit) –System of inputs, transformation, and outputs 4 Value Chain (Porter) –Series of activities that add value to a product/service (e.g., warehousing, production, distribution, marketing, etc.) –IS monitors performance of these processes –IS has become part of the value-added processes

Chapter TwoIS for management3 Organizational Structures 4 Traditional, Project, Team, Multidimensional –Lean organizations use IS to empower employees Information can be provided to front line employees Faster resolution of customer issues –IS assists in sharing information throughout the org. Reduce costs and increase product quality Improves productivity –IS helps increase employee satisfaction Self-service applications Faster feedback & recognition

Chapter TwoIS for management4 Organizational Culture & Change 4 Organizational Culture –Common beliefs, values, & understandings 4 Organizational Change –Internal & external causes –Overcoming resistance is key to successful change Employee involvement is necessary –Change model (Lewin & Schein) Unfreeze, Move, Refreeze Change agents are required for successful adoption of new information systems

Chapter TwoIS for management5 Lewin/Schein Model UnfreezeMoveRefreeze

Chapter TwoIS for management6 Reengineering Business Processes Changes to Organizational Values Changes to Organizational Structure Changes to Information Systems

Chapter TwoIS for management7 Continuous Improvement & TQM 4 Constantly seek ways to add value (e.g., reduce number of defects, improve time to market) 4 Quality Product must meet or exceed customer expectations 4 TQM (Demming) –Collection of tools & techniques to achieve continuous improvement –IS is a key element of TQM Collecting & analyzing data, designing & manufacturing new products, improving customer service

Chapter TwoIS for management8 Outsourcing & Downsizing 4 Outsourcing –Contracting external professional services to perform activities/processes, e.g., human resources, advertising, information systems –Enables an organisation to focus on its core strengths 4 Downsizing –Reducing the number of employees to cut costs Effects on morale, communication, & productivity Early retirement “buyout packages” help to lessen the effects on remaining employees –NOT rightsizing

Chapter TwoIS for management9 Competitive Advantage (1) 4 Seeking & Maintaining a Competitive Advantage –Five-Force Model (Porter) Rivalry among existing competitors Threat of new entrants Threat of substitute products Bargaining power of buyers Bargaining power of suppliers –IS can help to gain competitive advantage Altering industry structure (alliances & partnerships) Creating new goods & services and enhancing existing ones Using IS as a strategic weapon (e.g., Sabre, Wal-Mart)

Chapter TwoIS for management10 Competitive Advantage (2) 4 Strategies for gaining a competitive advantage –Low cost producer (IS can help to reduce a variety of costs) –Product Differentiation IS can help to differentiate, e.g., quality, features, delivery –Market Differentiation IS can help to identify target markets Use of Data Mining

Chapter TwoIS for management11 Performance Based Systems 4 IS is now a key factor in improving productivity Redefining how organizations achieve their goals 4 Measuring the Value of IS ROI, earnings,market share, customer satisfaction 4 Most IS projects are driven by at least one of the following factors: –Tangible or intangible savings –Legal requirements –Modernisation –Pilot project

Chapter TwoIS for management12 Careers in IS 4 IS employees are relatively high in demand –Above average starting salaries –Job market for IS professionals continues to grow 4 Primary areas –CIO –Operations –Systems Development –Systems Support –Consulting –Sales

Chapter TwoIS for management13 Case 4 Textron - outsourcing, pages 77-78

Chapter TwoIS for management14 Next Class: 4 Chapter Three: Hardware: Input, Processing, and Output Devices 4 Case: Unisys - customer service, pages