The Management Framework Company Senior Management Environment CIO MIS Director D.P. Manager Users (Managers and Staff) IT Staff

CHALLENGE OF INFO SYSTEMS  STRATEGIC: COMPETITIVE & EFFECTIVE  GLOBALIZATION: MULTINATIONAL INFO  INFO ARCHITECTURE: SUPPORT GOALS  INVESTMENT: VALUE OF INFORMATION  RESPONSIBILITY & CONTROL: ETHICS * 1.28

Five Forces To Determine Industry Profitability New Entrants Industry Competitors Rivalry Among Existing Firms Threat of New Entrants Buyers Bargaining Power of Buyers Suppliers Bargaining Power of Suppliers Threat of Substitute Products or Services Source: Porter, M., Competitive Advantage, NY: The Free Press, 1985 Substitutes

The Value Chain Firm Infrastructure Human Resources Management Technology Development Procurement M A R G I N N I G R A M Inbound Logistics Operations Outbound Logistics Marketing & Sales Service Source: Porter, M., Competitive Advantage, NY: The Free Press, 1985

STRATEGIC QUESTIONS  Can IT build barriers to entry?  Can IT build in switching costs?  Can IT strengthen customer relationships?  Can IT change the balance of power in supplier relationships?  Can IT change intra-industry competitive balance?  Can IT change the basis of competition?  Can IT generate new products? Source: Cash, J. I., McFarlan, F. W., McKenney, J. L., and Applegate, L. M., Corporate Information Systems Management: Text and Cases, Homewood, IL, 1992.

BUSINESS-LEVEL STRATEGY  PRODUCT DIFFERENTIATION  FOCUSED DIFFERENTIATION  DATAMINING  SUPPLY CHAIN MANAGEMENT  EFFICIENT CUSTOMER RESPONSE  ENHANCING CORE COMPETENCIES * 2.24

A Framework for Analyzing IT Impact on Organizations CONTEXT External Environment Industry Structure Rate of Change Competitive Intensity Organization History Current State Industry Position Competitive Benchmarks Resources People/ Leadership Technology Capital Culture Stimulus for Change Type Urgency Clarity Shared Understanding Strategy EXECUTION Organization Structure People Culture Management Control Processes ORGANIZATION EFFECTIVENESS MEASURES Competitive Benchmarks Source: Applegate, L.M., IT-Enabled Business Transformation, Boston: HBS Publishing, 1992 Work Technology Process Time Quality Cost Innovation Stakeholder Customer/ Supplier Employee Satisfaction Shareholder Satisfaction Results Market Share Financial ROE P/E

FUNCTIONS OF AN INFORMATION SYSTEM INPUTOUTPUTPROCESS FEEDBACK INFORMATION SYSTEM ENVIRONMENT Customers Suppliers Regulatory Stockholders Competitors Agencies ORGANIZATION 1.12

THE INFORMATION RESOURCE INTERNAL & EXTERNAL DATA COLLECTION & STORAGE DATA TRANSFORMATION PROCESS INFORMATION Plan Control Operate COMMUNICATION LINKS

MAJOR TYPES OF SYSTEMS  EXECUTIVE SUPPORT SYSTEMS (ESS)  MANAGEMENT INFORMATION SYSTEMS (MIS)  DECISION SUPPORT SYSTEMS (DSS)  KNOWLEDGE WORK SYSTEMS (KWS)  OFFICE AUTOMATION SYSTEMS (OAS)  TRANSACTION PROCESSING SYSTEMS (TPS) * 2.6

INTERRELATIONSHIPS AMONG SYSTEMS 2.22 ESS DSS TPS SCADA MIS KWS OAS

TYPES OF INFORMATION SYSTEMS DATA WORKERS KIND OF SYSTEM GROUPS SERVED STRATEGIC LEVEL SENIOR MANAGERS MANAGEMENT LEVEL MIDDLE MANAGERS OPERATIONAL OPERATIONAL LEVEL MANAGERS KNOWLEDGE LEVEL KNOWLEDGE & SALES & MANUFACTURING FINANCE ACCOUNTING HUMAN RESOURCESMARKETING 2.5

MIS MIS FILES SALES DATA UNIT PRODUCT COST PRODUCT CHANGE DATA EXPENSE DATA MIS REPORTS MANAGERS TPS Order Processing System Materials Resource Planning System General Ledger System ORDER FILE PRODUCTION MASTER FILE ACCOUNTING FILES 2.17 TPS DATA FOR MIS APPLICATIONS

Phases of IT Assimilation PHASE 1 Decision to invest and project initiation PHASE 2 Technology learning and adaptation PHASE 3 Rationalization and management control PHASE 4 Widespread technology transfer Stagnation Block A Failure Success Stagnation Block B Narrowly focused and not marketed Success Stagnation Block C Too efficiency dominated Success Source: Cash, J. I., McFarlan, F. W., McKenney, J. L., and Applegate, L. M., Corporate Information Systems Management: Text and Cases, Homewood, IL, 1992.

Sample IT Architecture Information Analysis (e.g., Lotus 123G) Information Packaging and Delivery (e.g., Commander EIS) Communications ( e.g., , Conferencing) Knowledge-Based Systems (e.g., Expert System) Application Development (e.g., CASE) Communications Wide area network Local area network Information Management Client server architecture DB2 relational database Data feeds from internal and external sources TOOLSTOOLS FOUNDATIONFOUNDATION Applications Industry News/IRI Dow Jones Sales Manu- facturing Accounting Purchasing Logistics External SystemsInternal Business Operations and Transaction Systems Source: Applegate, L., Frito-Lay, Inc.: A Strategic Transition (C), Harvard Business School Case # , 1990

LEARNING OBJECTIVES  DESCRIBE CHARACTERISTICS OF ORGANIZATIONS  RELATE INFO SYSTEMS TO ORGANIZATIONS  COMPARE MODELS DESCRIBING SYSTEM ORIGINS * 3.2

LEARNING OBJECTIVES  COMPARE THEORIES OF ORGANIZATIONS  ANALYZE IMPACT OF INFO SYSTEM ON ORGANIZATION  DESCRIBE IMPLICATIONS OF SYSTEM DESIGN & IMPLEMENTATION * 3.3

MANAGEMENT CHALLENGES  DIFFICULTIES OF MANAGING CHANGE  ADJUSTING TECHNOLOGY AND ORGANIZATION FOR OPTIMAL FIT * 3.4

TRANSFORMATION  KNOWLEDGE-BASED ECONOMIES  PRODUCTIVITY  NEW PRODUCTS & SERVICES  KNOWLEDGE AS AN ASSET  TIME-BASED COMPETITION  SHORTER PRODUCT LIFE  TURBULENT ENVIRONMENT  LIMITED EMPLOYEE KNOWLEDGE BASE * 1.7

TRANSFORMATION OF ENTERPRISE  FLATTENING  DECENTRALIZATION  FLEXIBILITY  LOCATION INDEPENDENCE  LOW TRANSACTION COSTS  EMPOWERMENT  COLLABORATIVE WORK * 1.8

MEDIATING FACTORS: Environment Culture Structure Standard Procedures Politics Management Decisions Chance ORGANIZATIONS & INFORMATION TECHNOLOGY ORGANIZATIONS INFORMATION TECHNOLOGY 3.5

IMPLEMENTING CHANGE Source: Leavitt, Handbook of Organization (1965)TASKPEOPLETECHNOLOGY STRUCTURE RESISTANCE MUTUAL ADJUST MENT 3.25

LEARNING OBJECTIVES  EVALUATE SCHOOLS OF MANAGEMENT THINKING  DESCRIBE LEVELS, TYPES, STAGES OF DECISION MAKING  COMPARE INDIVIDUAL & ORGANIZATIONAL DECISION MAKING * 4.2

LEARNING OBJECTIVES  ASSESS CHANGING MANAGEMENT PROCESS  EXPLAIN HOW INFO SYSTEMS AID MANAGERS & DECISION MAKING * 4.3

MANAGEMENT CHALLENGES  WHAT MANAGERS DO  INTRODUCTION TO DECISION MAKING  INDIVIDUAL MODELS OF DECISION MAKING  HOW INFORMATION TECHNOLOGY HAS CHANGED MANAGEMENT PROCESS * 4.4

ROLE OF MANAGERS  INTERPERSONAL: Figureheads, leaders, liaison  INFORMATIONAL: Receive & disseminate critical information  DECISIONAL: Initiate activities, handle disturbances, allocate resources, negotiate conflicts * 3.28

LEVELS OF DECISION MAKING  STRATEGIC: Long-term objectives; resources; policies  MANAGEMENT CONTROL: Monitor use of resources; performance  KNOWLEDGE-LEVEL: Evaluate potential innovations; knowledge  OPERATIONAL: How to carry out specific day-to- day tasks * 4.19

TYPES OF DECISIONS  STRUCTURED: Repetitive; routine; definite procedure; certainty  SEMISTRUCTURED: One or more factors not structured; risk  UNSTRUCTURED: Unique; non-routine; uncertainty; requires judgment * 4.20

INFO SYSTEMS, LEVELS, DECISIONS TPS OAS MIS KWS DSS ESS ORGANIZATIONAL LEVEL TYPE OF DECISIONOPERATIONALKNOWLEDGEMANAGEMENTSTRATEGIC STRUCTURED ACCOUNTS RECEIVABLE ELECTRONIC PRODUCTION SCHEDULING COST OVERRUNS SEMI-BUDGET STRUCTUREDPREPARATION PROJECT SCHEDULING FACILITY LOCATION UNSTRUCTUREDPRODUCT DESIGN NEW PRODUCTS NEW MARKETS 4.21

DECISION SUPPORT SYSTEMS (DSS) MANAGEMENT LEVEL COMPUTER SYSTEM COMBINES DATA, MODELS, USER - FRIENDLY SOFTWARE FOR SEMISTRUCTURED & UNSTRUCTURED DECISION MAKING *

DECISION SUPPORT SYSTEM

GROUP DECISION-SUPPORT SYSTEM (GDSS ) INTERACTIVE COMPUTER-BASED SYSTEM FACILITATES SOLUTION OF UNSTRUCTURED PROBLEMS BY DECISION MAKERS WORKING AS GROUP *

LEARNING OBJECTIVES  EXPLAIN ORGANIZATIONAL KNOWLEDGE MANAGEMENT  DESCRIBE USEFUL APPLICATIONS FOR DISTRIBUTING, CREATING, SHARING KNOWLEDGE  EVALUATE ROLE OF ARTIFICIAL INTELLIGENCE IN KNOWLEDGE MANAGEMENT *

LEARNING OBJECTIVES  DEMONSTRATE HOW ORGANIZATIONS USE EXPERT SYSTEMS, CASE-BASED REASONING TO CAPTURE KNOWLEDGE  DEMONSTRATE HOW NEURAL NETWORKS & OTHER TECHNIQUES IMPROVE KNOWLEDGE BASE *

KNOWLEDGE MANAGEMENT IN THE ORGANIZATION KNOWLEDGE MANAGEMENT: SYSTEMATICALLY & ACTIVELY MANAGING AND LEVERAGING STORES OF KNOWLEDGE STORES OF KNOWLEDGE IN AN ORGANIZATION *

KNOWLEDGE MANAGEMENT IN THE ORGANIZATION KNOWLEDGE MANAGEMENT:  Office Automation Systems (OAS)  Knowledge Work Systems (KWS)  Group Collaboration Systems (GCS)  Artificial Intelligence Applications (AI) *

CREATE KNOWLEDGE KNOWLEDGE WORK SYSTEMS: INFORMATION SYSTEMS THAT AID KNOWLEDGE WORKERS TO CREATE, INTEGRATE NEW KNOWLEDGE IN ORGANIZATION INFORMATION SYSTEMS THAT AID KNOWLEDGE WORKERS TO CREATE, INTEGRATE NEW KNOWLEDGE IN ORGANIZATION *

CAPTURE & CODIFY KNOWLEDGE ARTIFICIAL INTELLIGENCE (AI) SYSTEMS: AI: COMPUTER-BASED SYSTEMS WITH ABILITIES TO LEARN LANGUAGE, ACCOMPLISH TASKS, USE PERCEPTUAL APPARATUS, EMULATE HUMAN EXPERTISE & DECISION MAKING * AI

CAPTURE & CODIFY KNOWLEDGE ARTIFICIAL INTELLIGENCE (AI) SYSTEMS: EXPERT SYSTEMS NEURAL NETS FUZZY LOGIC GENETIC ALGORITHMS INTELLIGENT AGENTS * AI

AI FAMILY NATURAL LANGUAGE ROBOTICS PERCEPTIVE SYSTEMS EXPERT SYSTEMS INTELLIGENT MACHINES ARTIFICIAL INTELLIGENCE AI

BUSINESS INTERESTS IN AI BUSINESS INTERESTS IN AI  PRESERVE EXPERTISE  CREATE KNOWLEDGE BASE  MECHANISM NOT SUBJECT TO FEELINGS, FATIGUE, WORRY, CRISIS  ELIMINATE ROUTINE / UNSATISFYING JOBS  ENHANCE KNOWLEDGE BASE *

THE CHANGING MANAGEMENT PROCESS  ENTERPRISE RESOURCE PLANNING (ERP)  ELECTRONIC COMMERCE  ELECTRONIC BUSINESS  ELECTRONIC MARKET * 1.23

LEARNING OBJECTIVES  DEMONSTRATE HOW INTERNET TECHNOLOGY USED FOR INTRA- AND INTERORGANIZATIONAL ELECTRONIC BUSINESS  EXAMINE CHALLENGES OF INTERNET TO BUSINESS & SOCIETY * 10.3

SALES & MARKETING COMPANY FINANCE COMPANY LOGISTICS COMPANY DESIGN COMPANY MANUFACTURING COMPANY VIRTUAL ORGANIZATION CORE CO MPANY CORE CO MPANY 1.27

CHALLENGES & OPPORTUNITIES  UNPROVEN BUSINESS MODELS  BUSINESS PROCESS CHANGE REQUIREMENTS  CHANNEL CONFLICTS  TECHNOLOGY HURDLES  LEGAL ISSUES  SECURITY & PRIVACY * 10.33

GLOBALIZATION  MANAGEMENT & CONTROL  COMPETITION IN WORLD MARKETS  GLOBAL WORK GROUPS  GLOBAL DELIVERY SYSTEMS * 1.6

LEARNING OBJECTIVES  IDENTIFY FACTORS BEHIND BUSINESS INTERNATIONALIZATION  COMPARE GLOBAL STRATEGIES FOR DEVELOPING BUSINESS  DEMONSTRATE HOW INFO SYSTEMS SUPPORT GLOBAL STRATEGIES *

GLOBAL ENVIRONMENT: BUSINESS DRIVERS & CHALLENGES CORPORATE GLOBAL STRATEGIES ORGANIZATIONAL STRUCTURE MANAGEMENT & BUSINESS PROCEDURES MANAGEMENT & BUSINESS PROCEDURES TECHNOLOGICAL PLATFORM INTERNATIONAL INFORMATION SYSTEMS INFRASTRUCTURE

IT-Enabled Business Transformation Module Scope of Change Anticipatory Crisis StimulusforChange Source: Applegate, L.M., IT-Enabled Business Transformation, Boston: HBS Publishing, 1992 Function Organization Inter- Organization

“The modern age has a false sense of superiority because of the great mass of data at its disposal. The valid criterion of distinction is (not the quantity of data available but) rather the extent to which man knows how to form and master the materials at his command.”