1. Introduction
Managing and Using Information Systems: A Strategic Approach
by Keri Pearlson & Carol Saunders

2. Copyright 2006 John Wiley & Sons, Inc.
Introduction
How effective can a business manager be when they are not involved in the IS decisions of their organizations?
Should managers rely on experts to make these decisions?
What risks is management making when it permits others to make critical IT decisions for the organization?
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Real World Examples
Amazon.com has garnered a leadership position in the online world by leveraging their new business model. See
Expanded market offerings.
Increased customization and personalization
Smarter storage
Cost cutting.
Google has become the leader in the search engine market through innovation, simplicity, and by adding new features.
See
Their mission statement can be found at
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4. THE CASE FOR PARTICIPATING IN DECISIONS ABOUT INFORMATION SYSTEMS
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5. Participating in Information Decisions
Business managers “must” be involved in information decisions.
Figure I.1 describes reasons why. IS …
is a critical resource.
enables change in how people work together.
is integrated with almost every aspect of business.
enables business opportunities and new strategies.
can be used to combat business challenges from competitors.
Technology is ubiquitous.
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A Business View
IT is a critical resource.
IT is over 50% of capital goods dollars spent in the US.
Over $3,800 a year per capita.
High growth firms invest more in IT.
Business managers decide resource allocation.
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People and Technology
People and Technology work together.
Technology is critical.
Workers rely heavily on technology.
Managers must know how to mesh both.
Examine long-term and short-term consequences.
Manage change carefully.
Technology changes rapidly.
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8. WHAT IF A MANAGER DOESN’T PARTICIPATE?
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Think About IT
What risks does a manager take if they are NOT involved in IS decisions?
If IS directly impacts profitability of a business then how can non-participation “hurt” the bottom-line?
How does making the wrong decision impact business goals and organizational systems?
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Business Goals
IS must support business goals.
It is not an end but a means to an end.
Support and strategic focus.
Toys R Us IT debacle.
Must meet user needs.
Must be able to support business transactions.
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11. Organizational Systems
IT must support organizational systems
The people, work processes, and structure.
Carefully consider the consequences of making an IS change.
How will this impact the way work is done?
Will the people accept this new technology?
What changes may need to be made in the structure of the organization?
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WHAT SKILLS ARE NEEDED TO PARTICIPATE EFFECTIVELY IN INFORMATION TECHNOLOGY DECISIONS?
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Basic Skills Needed
Myth - technical expertise is not needed to participate.
Managerial role and skills needed (Fig I.2):
Visionary – creativity, curiosity, confidence, focus on business solutions, flexibility.
Informational and Interpersonal – communication, information gathering, interpersonal skills.
Structured – project management, analytical skills, organizational skills, planning skills.
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BASIC ASSUMPTIONS
Managers must know about both using and managing information.
Managers must be knowledgeable participants in IS decisions.
The general manager must have a basic understanding of the business and technology issues related to IS.
Technology of today is different from the technology of yesterday.
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The role of the general manager and IS manager are distinct.
The GM must have a basic understanding of IS to make decisions that may have significant implications for the business.
The IS manager must have general business knowledge and a more in depth knowledge of IS to support its function.
Copyright 2006 John Wiley & Sons, Inc.

16. Management Assumptions
Four key activities of the classic view of management (Fig I.3).
Planning
Organizing
Leading
Controlling
Classic view is seen as more of a tactical approach to management.
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Mintzberg Model
The Mintzberg model describes management in behavioral terms (Fig I.4).
Interpersonal
Informational
Decisional
Managers work in a chaotic environment.
Quality information is crucial.
More of a strategic view of management.
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Business Assumptions
Internal Model
Understanding of what constitutes a business.
Managers use to make sense of the chaotic business environment in which they function.
Functional and process views of business.
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Functional View
Functional View of the business
Based on the functions people perform.
Information flows vertically in the organization.
Sometimes information flows across the organization.
Accounting, Operations, Marketing, Sales and Support.
Executive Management receives the information and distributes as need arrives.
See Figure I.5
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20. Figure I.5 Hierarchical View of the firm.
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Process View
This model sees the business by the processes it performs to achieve its goals.
Porter describes business in terms of its primary and support activities.
Primary – inbound and outbound logistics, operations, marketing and sales.
Support – HR, technology, procurement, infrastructure.
Activities are linked together to form a chain – the value chain (fig I.6).
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22. Figure I.6 Process View of the Firm: The Value Chain
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23. Information Hierarchy
Data, Information, and Knowledge are not interchangeable terms.
Data – set of specific objective facts or observations (inventory contains 100 widgets).
Information – data endowed with relevance and purpose (75% of widgets were purchased by customers in December) – see fig I.8.
Knowledge - information that has been synthesized and contextualized to provide value.
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24. Figure I.8 Information Characteristics across Hierarchical Levels
Top Management
Middle Management
Supervisory & Lower-Level Management
Time Horizon
Long: years
Medium: weeks, months, years
Short: day to day
Level of Detail
Highly aggregated
Less accurate
More predicted
Summarized
Integrated
Often financial
Very detailed
Very accurate
Often nonfinancial
Orientation
Primarily external
Primarily internal with limited external
Internal
Decision
Extremely judgmental
Uses creativity and analytic skills
Relatively judgmental
Heavy reliance on rules
Figure I.8 Information Characteristics across Hierarchical Levels
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Data
Information
Knowledge
Definition
Simple Observations of the sate of the world
Data endowed with relevance and purpose
Info from the human mind (includes reflection, etc)
Characteristic
Easily structured
“ captured
“ transferred
Often quantified
Mere facts
Requires unit of analysis
Data that has been processed
Human mediation necessary
Hard to structure
Difficult to capture on machines
Often tacit
Hard to transfer
Example
Daily inventory reports of all inventory items sent to CEO of large manufacturing company
Daily inventory report of items below economic order quality levels sent to inventory manager (IM)
IM knows which items need to be reordered in light of related potential problems
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System Hierarchy
Information systems are comprised of three main elements:
Technology
People
Process
Infrastructure – everything that supports the flow of processing information
Hardware, software, data, and components.
Architecture – strategy implicit in these components.
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27. Figure I.9 System Hierarchy
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SUMMARY
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Summary
Business managers “must” be involved in information decisions.
Technology is ubiquitous.
IT is a critical resource.
People and Technology work together.
Certain key skills are needed.
Data, Information, and Knowledge are distinct.
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