MIS09/12/97Ch 18: Turban, McLean, Wetherbe09/12/97 1 Information Systems in the Organization Basic IT Organizational Structure

MIS09/12/97Ch 18: Turban, McLean, Wetherbe09/12/97 2 It is Not All About Technology Traditional IT l Centralized control l Resource restrictions l Formal methodologies and discipline l Careful planning l Administrative support New IT l Distributed control l Resource expansion l Few methodologies and unrestricted access l Rapid development l Strategic impact

MIS09/12/97Ch 18: Turban, McLean, Wetherbe09/12/97 3 Requirements for Successful IT l Well understood vision l Single team approach l Business financial justifications l Internal marketing l Reengineering skills l Political awareness and support

MIS09/12/97Ch 18: Turban, McLean, Wetherbe09/12/97 4 Organization Centralized Consolidation of functions Career paths for IS professionals Information control Economies of scale Decentralized Closeness to local problems Responsiveness to operational requirements User ownership of costs and problems Distributed Separation of IS and user functions Identification of corporate data and functions User ownership of user applications

MIS09/12/97Ch 18: Turban, McLean, Wetherbe09/12/97 5 People

MIS09/12/97Ch 18: Turban, McLean, Wetherbe09/12/97 6 Roles l Steering Committee l CIO l Manager l Project Manager l Analyst l Programmer l Systems Programmer l User

MIS09/12/97Ch 18: Turban, McLean, Wetherbe09/12/97 7 Centralization, Decentralization or Distribution l Centralization Consolidation of functions Career paths for IS professionals Information control Economies of scale

MIS09/12/97Ch 18: Turban, McLean, Wetherbe09/12/97 8 Centralization, Decentralization or Distribution l Decentralization Closeness to local problems Responsiveness to operational requirements User ownership of costs and problems

MIS09/12/97Ch 18: Turban, McLean, Wetherbe09/12/97 9 Centralization, Decentralization or Distribution l Distribution Separation of IS and user functions Identification of corporate data and functions User ownership of user applications

MIS09/12/97Ch 18: Turban, McLean, Wetherbe09/12/97 10 IS Organization CIO DevelopmentOperations Data Administration Network Architecture

MIS09/12/97Ch 18: Turban, McLean, Wetherbe09/12/97 11 IS Relationship with Users l Laissez Faire - no IS involvement l Formal - user agreements and contracts l Utility - IS supplies standard information resources l Vendor - IS promotes solutions in competition with outside competitors l Partner - IS and users share common goals and rewards

MIS09/12/97Ch 18: Turban, McLean, Wetherbe09/12/97 12 Rational Management Strategies l Train & Retain l Train & Replace l Layered Skills l Restrict & Limit l Outsource l Entrepreneur

MIS09/12/97Ch 18: Turban, McLean, Wetherbe09/12/97 13 Consultants l Access to new ideas and standards l Access to additional resources l Change agent who can own responsibility

MIS09/12/97Ch 18: Turban, McLean, Wetherbe09/12/97 14 Strategic Information Systems Information systems designed to support or shape competitive strategy. Long-range planning Response Management Innovation

MIS09/12/97Ch 18: Turban, McLean, Wetherbe09/12/97 15 Strategic Advantage Only when SIS combine with structural changes can they help provide stategic advantage.

MIS09/12/97Ch 18: Turban, McLean, Wetherbe09/12/97 16 Competitive Advantage Techniques for competitive achieving competitive advantage. Build barriers to competition Increase customer switching costs Change the basis of competition Change the nature or environment of business Optimize pricing strategy

MIS09/12/97Ch 18: Turban, McLean, Wetherbe09/12/97 17 Frameworks Value chain Competitive forces Global business drivers Customer resource life cycle

MIS09/12/97Ch 18: Turban, McLean, Wetherbe09/12/97 18 Porter’s Value Chain Inbo- und Opera- tions Out- bound Mar- keting Service PRIMARY SUPPORT Administration Human Resources Technology Development Procurement

MIS09/12/97Ch 18: Turban, McLean, Wetherbe09/12/97 19 Porter’s Value Chain This framework can help understand how Information Technologies can support different ones of the nine activities to add value.

MIS09/12/97Ch 18: Turban, McLean, Wetherbe09/12/97 20 Competitive Forces New competitors Bargaining power of suppliers Bargaining power of customers Substitute products Rivalry from existing firms

MIS09/12/97Ch 18: Turban, McLean, Wetherbe09/12/97 21 Competitive Forces Responses to maintain industry excellence Cost Leadership Differentiation Focus

MIS09/12/97Ch 18: Turban, McLean, Wetherbe09/12/97 22 Global Business Drivers Joint resources Flexible operations Risk reduction Global products Quality Suppliers Corporate customers

MIS09/12/97Ch 18: Turban, McLean, Wetherbe09/12/97 23 Incremental vs Radical Change: TQM vs Reengineering Incremental: Focus on processes to eliminate, rather than correct problems. Radical: Focus on inputs and outputs to completely revise the methods

MIS09/12/97Ch 18: Turban, McLean, Wetherbe09/12/97 24 TQM Total Quality Management Goals Measures Root Causes Total quality management is a cultural change designed to take advantage of the desire of individual workers to do a better job.

MIS09/12/97Ch 18: Turban, McLean, Wetherbe09/12/97 25 TQM W. Edwards Deming & Joseph Juran A philosophy, not a business practice l Incremental Process Change l Control what you measure l Empower employees l Prevent rather than correct defects

MIS09/12/97Ch 18: Turban, McLean, Wetherbe09/12/97 26 Reengineering The fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical contemporary measures of performance such as cost, quality, service and speed. Customers: knowledgable and demanding Competition: continuously increasing Change: constant

MIS09/12/97Ch 18: Turban, McLean, Wetherbe09/12/97 27 Reengineering l Redesign Find new ways to accomplish business goals l Retool Create the (IT) systems needed to support the new design l Reorchestrate Bring about the organizational changes needed to support the new system.

MIS09/12/97Ch 18: Turban, McLean, Wetherbe09/12/97 28 Principles of Business Process Reengineering Combines jobs Empowers employees Natural and parallel pocess steps Multiple versions of processes Work done where most appropriate Minimal controls, checks and non-value added work Reduce extermal contacts and increase alliances Single point of customer contact Hybrid centralized/decentralized organization

MIS09/12/97Ch 18: Turban, McLean, Wetherbe09/12/97 29 Increment vs Radical

MIS09/12/97Ch 18: Turban, McLean, Wetherbe09/12/97 30 Issues Nurturing creativity and employee participation Planning strategic information systems BPR is major surgery that fails up to % of the time IT changes the ethical environment

MIS09/12/97Ch 18: Turban, McLean, Wetherbe09/12/97 31 Organization