1. Information Systems in Organizations
Chapter 2
Information Systems in Organizations

2. Organizations and Information Systems
A formal collection of people and other resources established to accomplish a set of goals

3. General Model of an Organization
(next slide)

5. Value Chain
Term coined by Michael Porter in a 1965 article in the Harvard Business Review
Def: a series of activities that includes inbound logistics, warehouse and storage, production, finished product storage, outbound logistics, marketing and sales, and customer service
Schematic

7. Organizations Organizational structure
Organizational subunits and the way they are related to the overall organization
Traditional organizational structure
Major department heads report to a president or top-level manager
Schematic

8. Traditional Organizational Structure
S. Burry,
President
Bailey, Legal counsel
B. Wong,
VP Accounting
C.Rodrig, VP Information Systems
R. Henderson, VP Marketing
K. Kelly, VP Production
V. Cisborn, VP Human Resources
S. Samuel Supervisor
L. Bashran, Supervisor
Traditional Organizational Structure

9. Terminology (1) Hierarchical organizational structure
See previous slide
Series of levels
Those at high levels have more power and authority within an organization
Flat organizational structure
An organizational structure with a reduced number of layers of management

10. Terminology (2) Empowerment
Giving employees and their managers more power, responsibility, and authority to make decisions, take certain actions, and have more control over their jobs

11. Other Organizational Structures (1)
Schematic
Project organizational structure
An organization structure centred on major products or services
Contrast with traditional structure
Team organizational structure
An organizational structure centred on work teams or groups

12. Project Organizational Structure
B. Woods,
President Air & Aerospace Co.
T. Walker,
Senior VP, Aircraft Division
W. Butler, Senior VP, Aerospace Division
O. Teco, Senior VP,
Communications & Satellite Division
VP,
Finance
VP,
Marketing
VP,
Production
VP,
Sales
VP,
Finance
VP,
Marketing
VP,
Production
VP,
Sales
VP,
Finance
VP,
Marketing
VP,
Production
Project Organizational Structure

13. Other Organizational Structures (2)
Multidimensional organizational structure
A structure that may incorporate several structures at the same time
Schematic

14. Vice President, Marketing Vice President, Production
Vice President, Finance
Publisher, College Division
Marketing Group
Production Group
Finance Group
Publisher, Trade Division
Publisher,
High School Division
Multidimensional Organizational Structure

15. Other Organizational Structures (3)
Advantages and disadvantages of different organizational structures
Read the book!

16. Organizational Culture and Change (1)
A set of major understandings and assumptions shared by a group
Organizational culture
The major understandings and assumptions for a business, a corporation, or an organization

17. Organizational Culture and Change (1)
Organizational change
Deals with how for-profit and non-profit organizations plan for, implement, and handle change
Organizational learning
The way organizations adapt to new conditions or alter their practices over time

18. Models of Change ‘Change model’
A representation of change theories developed by Kurt Lewin and Edgar Schein in 1969
Three-stage approach
Unfreezing
Moving
Refreezing
Schematic

19. Change Model

20. Reengineering Also called ‘Process redesign’
The radical redesign of business processes, organizational structures, information systems, and values of the organization to achieve a breakthrough in business results
For example, to…
Reduce delivery time
Increase product and service quality
Improve customer satisfaction
Increase revenues and profitability

21. Rules, Rules, Rules
Reengineering requires finding and vigorously challenging old rules
Rule
Original rationale
Potential problem
Small orders held until full truckload
Reduce delivery costs
Customer deliver is delayed
No order accepted until credit approved
Reduce potential for bad debt
Customer service is poor
All product decisions made at headquarters
Reduce number of items in inventory
Perception of limited product selection

22. Other Models Continuous improvement
Constantly seeking ways to improve the business processes to add value to products and services

23. Continuous Improvement vs. Reengineering
Strong action to solve serious problem
Routine action
Driven by senior executives
Worker-driven
Broad in scope; cuts across organizations
Narrow in scope
Goal to achieve a major breakthrough
Continuous, gradual
Often led by outsiders
Led by workers
IS integral to the solution
IS provides data to guide

24. Total Quality Management
The ability of a product (including service) to meet or exceed customer expectations
TQM
A collection of approaches, tools, and techniques, that offers a commitment to quality throughout the organization

25. Outsourcing and Downsizing
Contracting with outside professional services to meet specific business needs
E.g., advertising, hiring
Downsizing
Reducing the number of employees to cut costs
Also called ‘rightsizing’
May have serious side effects
E.g., low employee morale, a need for expensive consultants, lost time, waning productivity

26. Competitive Advantage
A position, product, service, etc., within a business that improves a position within a market with respect to competitors
Porter’s ‘Five force’ model of competitive advantage
Identifies factors that lead to competitiveness
Schematic

27. Substitute Products Buyer Power Supplier Power Rivalry New Entrants
Porter’s Five-force Model

28. Strategic Planning for Competitive Advantage
Four techniques:
Strategic alliances (aka strategic partnerships)
Creating new goods or services
Improving existing goods or services
Using information systems for strategic purposes
Next slide

29. Strategic alliance
An agreement between two or more companies that involves the joint production and distribution of goods and services
E.g., Chrysler + Daimler Benz
Creating new goods or services
A company may become stagnant without the introduction of new goods and/or services
E.g., Compaq, Dell
Improving existing goods or services
Small variations to existing goods or services, and/or complete modifications
E.g., “light” foods
Using information systems for strategic purposes
IS for improving organizational effectiveness
E.g., SABRE (airline reservation system)

30. Performance-based Information Systems
Productivity
A measure of the output achieved divided by the input required
Productivity =
Output achieved
Input required

31. Productivity An example is given in the top paragraph on p. 65
This is a bad example!
Why?

32. Return on Investments (ROI) and the Value of IS
Return on investment (ROI)
A measure of IS value that investigates the additional profits or benefits that are generated as a percentage of the investment in information systems technology
represents

33. Measures of IS Value Earnings growth Market share
Customer awareness and satisfaction
One of my favourite quotes:
When you cannot measure, your knowledge is of a meager and unsatisfactory kind.
Kelvin

34. Justifying IS Categories: Tangible savings Intangible savings
Legal requirements
Modernization
Pilot project

35. Roles, Functions, and Careers in the IS Department
Categories:
Operations
Systems development
Support
Liaisons (information service units)
Schematic

36. IS Department CEO CIO Other functional areas Operations
Information Resource Management Functions
Operations
Systems development
Support
Information service
unit
Computer
facility
operations
Systems
analysis
& design
Data
administration
Data
entry
Information
centre
Programming
Information
technololgy
Local
Area network
operations
IS Department

37. Information Centre Information centre
Provides users with assistance, training, application development, documentation, equipment selection and setup, standards, technical assistance, and troubleshooting

38. Information Service Unit
Attached to a functional area of the business.
Acts as a local information support organization within a functional area.
Performs the critical role of liaison between the functional area and IS

39. Chief Information Officer (CIO)
A manager at the vice-president level responsible for IS planning, policy, and standards
Focused on supporting corporate goals

40. Other IS Roles Database Administrator Systems Programmer
Network Specialist
LAN Administrator
Webmaster
Trainer

41. IS Principles
Use of IS strongly influenced by organizational structure and problem orientations
IS are often intertwined within the value-added processes
IS usage may require change that could meet with resistance
Value-added IS needs to be continually sought

42. End of Chapter 2
Chapter 3