2. The use of information systems to add value to the organization is strongly influenced by organizational structure, culture, and change
Identify the value-added processes in the supply chain and describe the role of information systems within them
Provide a clear definition of the terms organizational structure, culture, and change and discuss how they affect the implementation of information systems
Principles of Information Systems, Seventh Edition

3. Because information systems are so important, businesses need to be sure that improvements or completely new systems help lower costs, increase profits, improve service, or achieve a competitive advantage
Identify some of the strategies employed to lower costs or improve service
Define the term competitive advantage and discuss how organizations are using information systems to gain such an advantage
Discuss how organizations justify the need for information systems
Principles of Information Systems, Seventh Edition

4. Information systems personnel are the key to unlocking the potential of any new or modified system
Define the types of roles, functions, and careers available in information systems
Principles of Information Systems, Seventh Edition

5. Organizations and Information Systems
Organization: a formal collection of people and other resources established to accomplish a set of goals
An organization is a system
Inputs to the system: resources such as materials, people, and money
Outputs to the environment: goods or services
Principles of Information Systems, Seventh Edition

6. Figure 2.1: A General Model of an Organization
Principles of Information Systems, Seventh Edition

7. Organizations and Information Systems (continued)
Value chain: a series (chain) of activities that includes inbound logistics, warehouse and storage, production, finished product storage, outbound logistics, marketing and sales, and customer service
Upstream management: management of raw materials, inbound logistics, and warehouse and storage facilities
Downstream management: management of finished product storage, outbound logistics, marketing and sales, and customer service
Principles of Information Systems, Seventh Edition

8. Figure 2.2: The Value Chain of a Manufacturing Company
Principles of Information Systems, Seventh Edition

9. Organizational Structure
Organizational structure: organizational subunits and their relationship with the overall organization
Categories of organizational structure:
Traditional
Project
Team
Multidimensional
Virtual
Principles of Information Systems, Seventh Edition

10. Traditional Organizational Structure
A hierarchical structure
Major department heads report to a president or top-level manager
A managerial pyramid shows the hierarchy of decision making and authority
Principles of Information Systems, Seventh Edition

11. Figure 2.3: A simplified organizational model, showing the managerial pyramid
Principles of Information Systems, Seventh Edition

12. Figure 2.4: A Traditional Organizational Structure
Principles of Information Systems, Seventh Edition

13. Project Organizational Structure
Centered around major products or services
Temporary project teams
Principles of Information Systems, Seventh Edition

14. Figure 2.5: A Project Organizational Structure
Principles of Information Systems, Seventh Edition

15. Team Organizational Structure
Centered on work teams or groups
Temporary or permanent teams
Various sizes
Principles of Information Systems, Seventh Edition

16. Multidimensional Organizational Structure
May incorporate several structures at the same time
Advantage: ability to simultaneously stress both traditional corporate areas and important product lines
Disadvantage: multiple lines of authority
Principles of Information Systems, Seventh Edition

17. Figure 2.6: A Multidimensional Organizational Structure
Principles of Information Systems, Seventh Edition

18. Virtual Organizational Structure and Collaborative Work
Employs individuals, groups, or business units in geographically dispersed areas
People may never meet face to face
Can be permanent or temporary
Collaborative work: managers and employees can effectively work in groups around the world
Principles of Information Systems, Seventh Edition

19. Organizational Culture and Change
Organizational culture: Major understandings and assumptions for a business, corporation, or organization
Organizational culture can significantly influence information systems
Organizational change: deals with how organizations plan for, implement, and handle change
Principles of Information Systems, Seventh Edition

20. Reengineering Process redesign
Radical redesign of business processes, organizational structures, information systems, and values of the organization to achieve a breakthrough in business results
Principles of Information Systems, Seventh Edition

21. Figure 2.8: Reengineering
Principles of Information Systems, Seventh Edition

22. Continuous Improvement
Constantly seeking ways to improve business processes
Benefits:
Increased customer loyalty
Reduced customer dissatisfaction
Reduced opportunity for competitive inroads
Principles of Information Systems, Seventh Edition

23. Table 2.2: Comparing Business Process Reengineering and Continuous Improvement
Principles of Information Systems, Seventh Edition

24. Technology Diffusion, Infusion, and Acceptance
Technology diffusion: measure of how widespread the use of technology is in an organization
Technology infusion: extent to which technology permeates a department
Technology Acceptance Model (TAM): specifies factors that can lead to higher usage of technology in an organization
Principles of Information Systems, Seventh Edition

25. Total Quality Management
Quality: ability of a product or service to meet or exceed customer expectations
Total quality management (TQM): approaches, tools, and techniques that foster a commitment to quality throughout the organization
Principles of Information Systems, Seventh Edition

26. Outsourcing, On-Demand Computing, and Downsizing
Outsourcing: contracting with outside professionals
On-demand computing: contracting for computer resources to rapidly respond to an organization’s varying workflow
Downsizing: reducing the number of employees in an organization to cut costs
Principles of Information Systems, Seventh Edition

27. Organizations in a Global Society
As companies rely more heavily on virtual structures and outsourcing, businesses can operate around the world
Challenges to operating in a global society:
Every country has a set of customs, cultures, standards, politics, and laws
Language
Difficulty in managing and controlling operations in different countries
Principles of Information Systems, Seventh Edition

28. Competitive Advantage
Competitive advantage: significant, long-term benefit to a company over its competition
Ability to establish and maintain a competitive advantage is vital to a company’s success
Principles of Information Systems, Seventh Edition

29. Factors That Lead Firms to Seek Competitive Advantage
Rivalry among existing competition
Threat of new entrants
Threat of substitute products and services
Bargaining power of customers and suppliers
Principles of Information Systems, Seventh Edition

30. Strategic Planning for Competitive Advantage
Change the structure of the industry
Create new products or services
Improve existing products or services
Use information systems for strategic purposes
Principles of Information Systems, Seventh Edition

31. Table 2.4: Competitive Advantage Factors and Strategies
Principles of Information Systems, Seventh Edition

32. Table 2.4: Competitive Advantage Factors and Strategies (continued)
Principles of Information Systems, Seventh Edition

33. Performance-Based Information Systems
Considers both strategic advantage and costs
Uses productivity, return on investment (ROI), net present value, and other measures of performance
Principles of Information Systems, Seventh Edition

34. Figure 2.9: Three Stages in the Business Use of Information Systems
Principles of Information Systems, Seventh Edition

35. Productivity A measure of output achieved divided by input required
Higher level of output for a given level of input means greater productivity
Principles of Information Systems, Seventh Edition

36. Return on Investment and the Value of Information Systems
Earnings growth
Market share
Customer awareness and satisfaction
Total cost of ownership
Principles of Information Systems, Seventh Edition

37. Careers In Information Systems
Degree programs:
Degrees in information systems
Business degrees with a global or international orientation
Computer systems are making information systems professionals’ work easier
Opportunities in information systems are not confined to single countries
Principles of Information Systems, Seventh Edition

38. Roles, Functions, and Careers in the Information Systems Department
Primary responsibilities in information systems
Operations: focuses on the efficiency of information systems functions
Systems development: focuses on specific development projects and ongoing maintenance and review
Support: provides user assistance
Principles of Information Systems, Seventh Edition

39. Typical Information Systems Titles and Functions
Chief Information Officer (CIO): employs the IS department’s equipment and personnel to help the organization attain its goals
LAN administrators: set up and manage the network hardware, software, and security processes
Principles of Information Systems, Seventh Edition

40. Typical IS Titles and Functions (continued)
Internet careers:
Strategists
Programmers
Web site operators
Chief Internet Officer
Principles of Information Systems, Seventh Edition

41. Summary An organization is a system
Categories of organizational structure: traditional, project, team, multidimensional, and virtual
Organizational culture: major understandings and assumptions of an organization
Reengineering: radical redesign of business processes, organizational structures, information systems, and values of the organization to achieve a breakthrough in business results
Principles of Information Systems, Seventh Edition

42. Summary (continued)
Continuous improvement: constantly seeking ways to improve business processes
Outsourcing: contracting with outside professionals
Downsizing: reducing number of employees to cut costs
Competitive advantage: significant, long-term benefit to a company over its competition
Performance-based information systems considers both strategic advantage and costs
Principles of Information Systems, Seventh Edition

43. Summary (continued)
Productivity: a measure of output achieved divided by input required
Primary responsibilities in information systems: operations, systems development, and support
Typical information systems titles: Chief Information Officer (CIO), LAN administrator
Principles of Information Systems, Seventh Edition