Organizational Information Systems and IT impacts on Organizations, Individuals, and Society J. S. Chou Assistant Professor

2 Levels of the Organization

3 Levels of the Organization Explained Executive Level Strategic planning and responses to strategic issues occur here. Executive decisions are usually unstructured and are made using information consolidated internal and external information Executive Level Strategic planning and responses to strategic issues occur here. Executive decisions are usually unstructured and are made using information consolidated internal and external information Managerial Level Monitoring and controlling of operational activities and executive information support occur here. Managerial decisions are usually semistructured and are made using procedures and ad hoc tools Managerial Level Monitoring and controlling of operational activities and executive information support occur here. Managerial decisions are usually semistructured and are made using procedures and ad hoc tools Operational Level Day-to-day business processes and interactions with customers occur here. Operational decisions are usually structured and are made using established policies and procedures Operational Level Day-to-day business processes and interactions with customers occur here. Operational decisions are usually structured and are made using established policies and procedures

4 Who, What, Why: Organizational Level

5 Who, What, Why: Managerial Level

6 Who, What, Why: Executive Level

7 Basic Systems Model

8 System Type: Transaction Processing Systems

9 System Description: Transaction Processing Systems TPSs are a special class of information systems designed to process business events and transactions Architecture Components Source Documents – these contain the event or transaction information to be processed by system Data Entry Methods Manual – a person entering a source document by hand Semiautomated – using a capture device to enter the source document (e.g. a barcode scanner) Fully Automated – no human intervention, one computer talks or feeds another computer (e.g. automatic orders from inventory systems) Processing – transactions can be either: Online – processed individually in real-time Batch – grouped and processed together at a later time

10 System Example: Payroll System (TPS)

11 System Architecture: Transaction Processing System

12 System Type: Management Information System

13 System Description: Management Information Systems MISs are used by managerial employees to support recurring decision making in managing a function or the entire business Supported Activities Scheduled Reporting - the system produces automatically based on a predetermined schedule. Some include: Key Indicator – High-level summaries to monitor performance (e.g. Monthly Sales Report) Exception – Highlights situations where data is out of normal range (e.g. Monthly Late Shipments) Drill Down – Provides lower level detail aggregated in a summary report (printed only if needed) Ad Hoc Reporting – unscheduled reports that are usually custom built to answer a specific question (e.g. sales data by person report to identify issues)

14 System Architecture: Management Information System

15 System Type: Executive Information System (EIS)

16 System Description: Executive Information Systems EISs, also called Executive Support Systems (ESS), are special purpose information systems to support executive decision-making System Details These systems use graphical user interfaces to display consolidated information and can deliver both: Soft Data - textual news stories or non-analytical data Hard Data – facts, numbers, calculations, etc. Supported Activities The activities supported by these kinds of systems include: Executive Decision Making Long-range Strategic Planning Monitoring of Internal and External Events Crisis Management Staffing and Labor Relations

17 System Architecture: Executive Information Systems

18 System Example: Executive Reporting Drill- down (EIS) Second Level Data Drill Down First Level Graphical Summary

19 Systems That Span Organizational Boundaries

20 System Description: Decision Support Systems Decision Support Systems Special-purpose information systems designed to support managerial-level employees in organizational decision making System Details These systems use computational software to construct models for analysis (most common MS Excel) to solve semi-structured problems (e.g. sales or resource forecasts) Supported Activities: “What-if” analysis – changing one or more variables in the model to observe the resulting effect (e.g. what is the payment if the interest rate increases 1%)

21 Characteristics of Decision Support Systems

22 System Description: Common Decision Support Systems

23 System Architecture: Decision Support Systems

24 System Example – Loan Calculator Variables to be Analyzed Loan Calculator Model Analysis Results

25 System Description: Expert Systems Expert Systems Special-purpose systems used by operational level employees to make decisions usually made by more experienced employees or an expert in the field System Details These systems use inference engines that match facts and rules, sequence questions for the user, draw a conclusion, and present the user a recommendation Supported Activities: These systems support many activities including: Medical Diagnosis Machine Configuration Financial Planning Software Application Assistance (help wizards)

26 System Architecture: Expert Systems

27 System Example – Web-based Expert Systems EXSYS

28 System Description: Office Automation Systems Office Automation Systems A collection of software and hardware products that increase productivity within the office setting Supported Activities The activities supported by these kinds of systems include: Scheduling Resources Examples: electronic calendars with resource management (equipment, facilities, etc.) Document Preparation Examples: software (word processing and desktop publishing); hardware (printers) Communicating Examples: , voice mail, videoconferencing and groupware

29 System Architecture: Office Automation Systems

30 System Example – Scheduling System

31 System Description: Collaboration Technologies Videoconferencing Software and hardware the that allow parties to meet electronically with both picture and voice Supported Activities Stand-alone Videoconferencing High quality, typically very expensive systems using dedicated microphones, cameras and hardware. Can support meetings between several people and locations simultaneously Desktop Videoconferencing Lower quality, relatively inexpensive systems using a PC, small camera, and a microphone or telephone for voice communication Allows two individuals to communicate from a desktop

32 System Description: Collaborative Techs (Groupware) Groupware Software that enables people to work together more effectively Supported Activities These systems come in two types: Asynchronous Groupware – Systems that do not require users to be on the system working at the same time including: , newsgroups, workflow automation, group calendars, and collaborative writing tools Synchronous Groupware – Systems that allow and support simultaneous group interactions including shared whiteboards, electronic meeting support systems, video communication systems

33 System Description: Groupware

34 System Description: Groupware Benefits

35 System Examples – Groupware

36 System Description: Functional Area Info Systems Functional Area Information Systems Cross-organizational information systems are designed to support a specific functional area Supported Activities The following functional organizations have systems to support their operational and managerial activities Accounting Finance Human Resources Marketing Operations

37 System Description: Functional Area Info Systems

38 System Examples: Functional Area Info Systems

39 System Description: Global Information Systems Global Information Systems A variety of special-class systems used to support organizations that operate globally Supported Activities Depending on the organization, one or more of these systems may be required (definitions on next slide): International Accounting Systems Transnational Information Systems Multinational Information Systems Global Information Systems Collaborative Information Systems

40 System Examples: Global Information Systems

41 IT Positive Effects Only? Will society have any control over the deployment of technology? Where will technology critics be able to make their voices heard? Who will investigate the costs and risks of technologies? What about health and safety issues? What impact will IT have on employment levels? What impact will IT have on the quality of life? We assume that organizations will reap the fruits of new technology and that computers have no major negative impact. But is this really true?

42 Impacts On Organizations The manager ’ s job Organizational structure, authority and power Job content (Value and Supply Chain) Employee career paths Supervision The use of computers and information technology has brought many changes to organizations.

43 The Manager’s Job Automation of routine decisions Less expertise required for many decisions. More rapid identification of problems and opportunities Less reliance on experts to provide support to top executives. Empowerment of lower and middle levels of management. Decision making undertaken by non-managerial employees. Power redistribution among managers Thinner organizations. Organizational intelligence that is more timely, comprehensive, accurate, and available The most important task of managers is making decisions. IT changes the manner in which many decisions are made.

44 Impact On Personnel Issues Many personnel-related questions arise as a result of using IT.

45 Impact On Individuals Dehumanization and other psychological impacts Information anxiety Job stress Video display Radiation exposure Repetitive strain (stress) injuries Lack of proper Ergonomics Other Impacts … Information systems affect individuals in various ways. What is a benefit to one individual may be a constraint to another.

46 Impact Society Opportunities for people with disabilities Quality of Life improvements Improvements in health care Crime fighting IT has already had many direct beneficial effects on society, being used for complicated human and social problems such as medical diagnosis, computer assisted instruction, government-program planning, environmental quality control, and law enforcement.

47 Impact Society Scanning crowds for criminals Cookies and individual privacy Digital millennium copyright act Providing Social services Possible massive unemployment resulting from the increased use of IT The “ digital divide ” or gap between those who have technology and those who do not. Impact of globalization on culture Use of IT has raised the issues of invasion of privacy.

48 MANAGERIAL ISSUES The effects of offshore outsourcing. Offshore outsourcing may be either an opportunity or a threat to an organization. To improve organizational efficiency, companies should explore the opportunities to outsource certain noncore activities to firms in other parts of the world. However, managers should be aware of various legal and ethical considerations surrounding this issue as well as the impact of outsourcing on the size and morale of their workforce. Managing and evaluating remote workers. Telecommuting increases the number of employees working away from the office. To manage these employees, it is vital to place a greater emphasis on regular formal communications. Effective performance evaluation is also different and requires a closer examination of the actual outputs produced by each employee. Dealing with information overload. In many workplaces, the capacity of information systems to collect and generate information has outpaced the ability of human employees to absorb it. The resulting information overload negatively impacts employees and their productivity. A greater investment in knowledge management systems, decision support systems, and related tools may help to solve this problem.

49 MANAGERIAL ISSUES Providing high-quality information. As companies continue to rely on increasingly larger volumes of information, the issue of information quality becomes critically important to the success of the organizations. Furthermore, recent laws, such as the Sarbanes – Oxley Act, make CEOs and CFOs personally liable for the quality and accuracy of financial information disclosed to the public. Displacement of employees with information technology. In any occupation — blue-collar, clerical, or white-collar — machines are acquiring the capabilities to perform “ human ” tasks more effectively and efficiently. Although this trend is unlikely to result in massive worldwide unemployment, it can have dramatic results on individual organizations and on individual employees. Thus, managers should be aware of the potentially disruptive technologies that may displace them or their colleagues and subordinates. Use of electronic surveillance. Proliferation of computer and white-collar crime impels employers to use information technology to monitor their employees. While electronic surveillance may reduce the incidence of unlawful activities, it may also result in employee resentment and other unintended consequences.