Information Systems Defined Chapter 2 Information Systems Defined Basic definitions and foundational Information Systems concepts © Gabriele Piccoli

Course Roadmap Part I: Foundations Chapter 1: Introduction Chapter 2: Information Systems Defined Chapter 3: Organizational Information Systems and Their Impact Part II: Competing in the Internet Age Part III: The Strategic use of Information Systems Part IV: Getting IT Done © Gabriele Piccoli

Learning Objectives Be able to define information system (IS) and information technology (IT). Understand the difference between the two. Be able to define information system success and information system failure. Be able to explain why modern firms create and deploy information systems. Be able to discuss the role that the firm’s context and the external environment play in shaping organizational information systems. Be able to describe the four components that make up an information system. Understand how they interact through systemic effects. Be able to discuss how to design successful information systems. Be able to troubleshoot problematic information systems implementations. © Gabriele Piccoli

Introduction Organizations around the world continue to spend significant amounts of money on IT These investments must pay off For investments to pay off you cannot have a narrow focus on IT © Gabriele Piccoli

Information System: Definition Formal, socio-technical, organizational systems designed to collect, process, store, and distribute information Formal  Ferrari’s supply chain system Informal  Facebook © Gabriele Piccoli

IS ≠ IT Ricasoli Winery Did they have an information system in 1141? 1141: Opened Oldest winery in Italy Did they have an information system in 1141? Courtesy of Barone Ricasoli © Gabriele Piccoli

IS ≠ IT Hilton Hotels 1919: Opened Did they have an information system in 1919? Photo by Jim Henderson (public domain) © Gabriele Piccoli

IS ≠ IT Hilton Hotels 1919: Opened 1963: First implementation of computers in hospitality (New York Hilton) Photo by Jim Henderson (public domain) © Gabriele Piccoli

Information System Components Technology Process People Structure © Gabriele Piccoli

Why is this Important? You need a solid understanding of the characteristics of each of the four components You need an appreciation of how they relate and interact with one another In order to make appropriate business decisions as a general or functional manager © Gabriele Piccoli

#1: Information Technology Hardware Devices Servers, smartphones, game consoles Software Tools Microsoft Office, foursquare app Telecommunication Devices Internet IT is a cornerstone of any modern IS IT enables and constrains action through rules of operation that stem from its design © Gabriele Piccoli

Don’t Forget! The design of IT enables and constrains the behavior of the Information System “Software, particularly a custom developed application, is an opinion of how data should be represented, organized, and manipulated” © Gabriele Piccoli

#2: Process The series of steps necessary to complete a business activity Examples: Check-in at a hotel Credit approval at a bank Paying bills online There are multiple ways to perform the same activity Processes are designed to be efficient & effective © Gabriele Piccoli

Official business process Don’t Forget! Processes evolve and change over time, often away from the original design Official business process Informal process © Gabriele Piccoli

Comparison Formal Business Process Informal Process Check the inventory and identify the needed items Call individual suppliers for quotes and delivery dates Compare the various quotes Select one or more suppliers for each of the needed items based on the terms of the agreement Call these suppliers and place the orders Receive the goods upon delivery, checking the accuracy and quality of the shipped items Pay the suppliers according to agreed upon terms. Restock inventory when needed © Gabriele Piccoli

#3: People Those individuals or groups directly involved in the information system End-users Managers Addressing their needs is a critical concern when designing and implementing a new Information System Failure to do so will result in the failure of your information systems © Gabriele Piccoli

#4: Structure The organizational structure component encompasses: Organizational design Hierarchy, decentralized, loose coupling Reporting configuration Functional, divisional, matrix Organizational relationships Communication and reward mechanisms Culture © Gabriele Piccoli

Systemic Effects The four components of an Information System are Interdependent Changes in one component may affect all others You must ensure the proper interaction of IT with the other components Discuss systemic affects of designing and trouble shooting a system. What are some options for addressing problems? 1. You could deem the new system a failure and cut your losses by dropping the use of hand-held technology altogether. 2. You could ascribe the failure to the quality of the user interface of the hand-held ordering devices. You could then negotiate with the provider to improve it. A solution focusing on the IT component. Etc. © Gabriele Piccoli

The Purpose of Information Systems Fulfilling organizational processing needs Improving efficiency and effectiveness while reducing cost Achieving a (specified) Information System goal. Example: Movie theaters Goal: Offering customers the ability to purchase tickets online will improve the effectiveness of the theater by reducing the lines and inconvenience at the ticket counter © Gabriele Piccoli

Information Systems Success Has the system delivered expected results? What are some of the unintended results? Positive Negative Positive - including employees’ empowerment and the widening scope of their responsibility Negative - including deskilling (i.e., the reduction of the scope of an individual's work to one, or a few, specialized tasks), loss of responsibility, and the creation of a monotonous working environment. © Gabriele Piccoli

IS Success can be Elusive © Gabriele Piccoli

Don’t Forget! Every organization is unique Even fierce competitors often have different: Firm strategies: The manner in which the organization intends to achieve its objectives. Firm cultures: The collection of beliefs, expectations, and values shared by the members of an organization. Infrastructures: The technological backbone of the firm. © Gabriele Piccoli

External Environment External environment: The legal and regulatory context The competitive landscape The general business and social trends surrounding the organization © Gabriele Piccoli

Information Systems in Context © Gabriele Piccoli

Information Systems and Organizational Change First Order Change: Automate Second Order Change: Informate Third Order Change: Transform © Gabriele Piccoli

First Order Change: Automate First order change only affects the technical subsystem Thus, it is: Easiest to envision Easiest to justify Easiest to manage Affects only technology and process Occurs when IT innovation is introduced © Gabriele Piccoli

Second Order Change: Informate Second order change affects the people component It provides more of an implementation challenge Affects technology and process Affects people performing the process © Gabriele Piccoli

Third Order Change: Transform Third order change affects organizational structures It seeks to transform how the organization operates It requires significant managerial and executive involvement © Gabriele Piccoli

Organizational Culture Firms have a culture They assume an organizational culture that fits with an individualistic, egalitarian or uncertainty tolerant mindset There has to be a harmonious relationship between organizational culture and the IS design in order for the IS to be effective in the firm © Gabriele Piccoli

Implications IT should NOT be the start of your Information System design process Strategy may be inspired, not driven, by IT IT selection is a point of arrival not departure Never forget Systemic Effects components of an IS mutually influence one another Anticipate the “ripples” You must anticipate & manage systemic effects © Gabriele Piccoli

Implications IS evolve over time. You must: Evaluate individual IS components regularly Assess how different organizational systems work together to support the business Optimize the Information System as a whole, not the components individually Organizations are dynamic They need to be re-evaluated often © Gabriele Piccoli

The Recap Information systems are designed and built with the objective of improving the firm’s efficiency and effectiveness by fulfilling its information processing needs. Success can only occur when the systems that are used achieve their intended goals Information systems exist in an organizational context, characterized by the firm strategy, culture, and IT infrastructure. Every organization is subject to the influences of an ever-changing external environment, including regulatory requirements, social and business trends, and competitive pressures. © Gabriele Piccoli

The Recap New IS components bring about organizational change. Information systems are subject to systemic effects You will need to manage these systemic effects in order to realize information system objectives and expected outcomes © Gabriele Piccoli

What We Learned The definition of information system (IS) and information technology (IT) and the difference between the two. The definition of information system success and information system failure. The principal reasons why modern firms create and deploy information systems. To recognize and manage the influence of a firm’s context and of the external environment organizational information systems design and success. The four components that make up an information system and the ways in which they interact. How to design successful information systems and how to troubleshoot problematic information systems implementations. © Gabriele Piccoli