1. 1 Redesigning the Organisation with Information Systems and Managing Change

2. 2 Learning Outcomes 4.Explain how an organisation must change in order to successfully capitalise on the use of IS and the consequent impact on organisational structure and employees –Describe techniques for organisational analysis –Describe types of organisational change –Explain impact of organisational change –Explore failure, success, risk and mitigation in IS implementation

3. 3 Learning Outcomes 6.Produce a plan of how IS may be implemented within an organisation to provide competitive advantage –Provide a template IS plan used to summarise and present organisational analysis and implementation

4. 4 Topics Organisational analysis –Enterprise Analysis –Strategic Analysis –Business Process Re-engineering –Soft Systems Methodology –Workflow management –Total Quality Management

5. 5 Topics Organisational change –Automation –Rationalisation –Business Process Re-engineering –Paradigm Shift Information Systems Plan Implementation –Failure and avoiding failure –Managing change –Risk and mitigation

6. 6 Source Material Laudon & Laudon (2002): –Chapter 10, 11 Laudon & Laudon (2003): –Chapter 12, 13 Beynon-Davies (2003): –Chapters 16, 33

7. 7 Organisational Change Successful implementation of Information Systems requires organisational change Why? –Change workflow –Reduction in staff –New processes and procedures –New business processes –New business strategy

8. 8 IT and Change Location –Global operations can be linked by digital networks Co-ordination and collaboration –Information can be available simultaneously to more than one group Distributed computing –Distributed information and distributed actions Portability –Work at home, customer site, etc.

9. 9 Planned Change Implementation of IS must be planned to be successful Analysts must understand the impact of IS on business processes Only target those business processes necessary for improvement

10. 10 Organisational Analysis The analysis of –The informal systems in organisations (not written down) –The overall objectives and needs of an organisation, and within its environment –Identifying where IS can help Leads to organisation change

11. 11 Organisational Analysis Enterprise analysis Strategic analysis Business Process Re-engineering –Workflow management –Total quality management Soft Systems Methodology

12. 12 Enterprise Analysis (Business Systems Planning) Looks at whole organisation Large sample of managers –How do they use information? –Where is the information from? –What environment do they work in? –What are their objectives? –How do they make decisions? –What are their data needs?

13. 13 Enterprise Analysis (Business Systems Planning) Strengths: –Results in an understanding of who uses what data, which processes and functions –Mapping of existing systems shows new requirements Weaknesses: –Too much data –Expensive to collect –Difficult to analyse –Focuses on current practice

14. 14 Strategic Analysis (Critical Success Factors) Three or four interviews Top managers: –What are their organisational goals? Aggregated into the organisation’s goals

15. 15 Strategic Analysis (Critical Success Factors) Strengths: –Smaller amount of data –Good for DSS and ESS –Focuses on new practice Weaknesses: –Limited data requires ‘creative’ aggregation –Confusion between personal and organisational goals –Focuses on top managers

16. 16 Business Process Re-engineering IT on its own delivers little value IT can deliver value by allowing organisational practices to change –The use of IT should initiate organisational change –IT and human systems must be designed in parallel: IS –The greatest benefit can come from the radical re-design of business processes

17. 17 Business Processes Recall, a business process is: –A set of activities across the major functional areas of a business that are used to accomplish the goals of the business They therefore: –Have inputs, processing, outputs –Support core activities –May cross over functional and organisational boundaries –Can be designed

18. 18 Business Process Re-engineering Effective BPR needs senior management to instigate new business processes: –For example, (re-)defining the strategy Focus on a few core business processes Must understand performance and cost of existing processes Use of Information Technology should influence design

19. 19 Business Process Re-engineering BPR leads to major change: –Jobs (including redundancy) –Different skills –Workflows –Reporting relationships

20. 20 Workflow Management Re-engineer and automation of paper-based procedures –Routing –Approvals –Scheduling –Reporting –Simultaneous work on documents –Instant transfer – no more ‘in transit’ –Indexing and collation of information

21. 21 Re-engineering Steps Develop business vision and objectives Identify processes to be re-designed (core) Understand performance of existing processes Understand Information Technology opportunities Prototype the new process

22. 22 Total Quality Management Making quality control the responsibility of all people in an organisation Quality of –Products –Services –Operations Catch problems early, they cost less

23. 23 Total Quality Management TQM is more incremental than BPR Continuous improvement, rather than ‘big bang’ May need BPR to improve quality beyond TQM

24. 24 TQM and Information Systems Simplify production process –Automate to give less steps –Less steps, less chance of error –Faster production times Benchmarking –Use IS reporting to feedback performance of processes –Improve processes and IS to meet benchmark

25. 25 TQM and Information Systems Customer Relationship Management –Used to improve quality of customer service Computer Aided Design –Improve quality of product design Production control –Automate production to improve precision

26. 26 Soft Systems Methodology BPR is driven from the top-down –Management defined organisational strategy –Radical form of change SSM is driven from the bottom-up –Stakeholders should participate in the re-design of business processes –More evolutionary form of change

27. 27 Soft Systems Methodology Technique to analysis and propose change –Performed by stakeholders: involved in the change –Analysis of both culture and systems CATWOE: –Customers: the victims or beneficiaries of change –Actors: those making the change –Transformation: conversion from input to output –Weltanschauung: world view –Owners: those that can stop the change –Environmental constraints: elements outside the system

28. 28 Introducing Information Systems Analysis complete Chosen IS to implement for business processes Recall that successful implementation of IS requires –Technical changes –Organisational changes

29. 29 Types of Change Risk Return Low High

30. 30 Types of Change Automation –Using computers to speed up existing tasks –Low risk, low return Rationalisation –Streamline procedures to improve automation –Remove bottlenecks –Low-medium risk, low-medium return

31. 31 Types of Change Business Process Re-engineering/Re-design –Radical re-design of business processes –Remove procedural steps –Eliminate paper-based tasks –Improve costs, quality and service –Medium-high risk, medium-high return

32. 32 Types of Change Paradigm Shifts –Re-thinking the nature of the business / organisation –Complete re-conception of how the business should function –High risk, High return

33. 33 Information Systems Plan Plan indicating the direction of systems development –Rationale –Current situation –Management strategy –Implementation plan –Budget

34. 34 Information Systems Plan Integral part of business –Strategy –Senior management level Defines organisational change Short- and long-term change Brings together organisational and technical factors

35. 35 Information Systems Plan Plan will depend upon business and management style Plan makes the business think about what they wish to achieve and how

36. 36 Plan Contents Purpose of the Plan –Overview of plan contents –Changes in current situation –Firm’s strategic plan –Current organisation –Key business processes –Management strategy

37. 37 Plan Contents Strategic Business Plan –Current situation –Current organisation –Changing environments –Major goals of plan

38. 38 Plan Contents Current Systems –Major systems supporting business functions and processes –Major current capabilities Hardware Software Database Telecommunications –Difficulties meeting requirements –Anticipated future demands

39. 39 Plan Contents New Developments –New system projects Project descriptions Business rationale –New capabilities required Hardware Software Database Telecommunications

40. 40 Plan Contents Management Strategy –Acquisition plans –Milestones and timing –Organisational realignment –Internal reorganisation –Management controls –Major training initiatives –Personnel strategy

41. 41 Plan Contents Implementation plan –Anticipated difficulties (risks) –Progress reports

42. 42 Plan Contents Budget requirements –Requirements –Potential savings –Financing –Acquisition

43. 43 Changes Recall that changes include: –Technical solutions –Types of information stored and used –How information is accessed and used –Individual and group responsibilities –New management and reporting structures –New business processes and functions

44. 44 Introducing Information Systems How can such systems be introduced? We are going to look at failure in order to understand how change must be managed

45. 45 Failure An Information System can be regarded as ‘a failure’ if: –It does not perform as expected –Is not operational at a specified time –Cannot be used in the way it was intended

46. 46 Failure IS may fail to: –Be delivered –Deliver benefits –Solve intended problems May be due to lack of organisational change

47. 47 Failure Types Design –Failure to capture business requirements –Failure to improve organisational performance –Information may: Not be delivered quickly enough Not be delivered in a useful format Not be the correct information for the purpose –System may be difficult to use – user interface

48. 48 Failure Types Design –Design must take into account all these factors –Traditionally all design was technically-based Technically excellent solutions Solutions that do not meet the organisational needs –Needs to address these organisational needs

49. 49 Failure Types Data –Data may be Inaccurate Inconsistent Incomplete for business function –Fields may be Erroneous Ambiguous Poorly understood and not broken down

50. 50 Failure Types Cost –Implementation over budget –Too costly to complete –Running costs over budget –Costs may exceed business value

51. 51 Failure Types Operations –System runs poorly or is unreliable –Neither timely or efficient –Mostly technical reasons for failure –Can be organisational issues

52. 52 Managing Change Failure can be avoided by effectively managing the changes Recommendations: –User involvement and influence –Management support –Level of complexity and risk –Implementation management

53. 53 User Involvement and Influence Seen to have positive results –Users involved in design can influence outcome –Based upon their priorities and requirements –Helps them understand complex systems –Impacts positively on uptake and usage of new system However –Users will always focus on their current role –May not exploit opportunity to improve processes

54. 54 Difficult to Encourage User Involvement User concerns –Will the system deliver the information I need? –How quickly can I access the data? –How easily can I receive the data? –How much clerical support will I need for data entry? –How will the system operation fit into my daily business schedule?

55. 55 Difficult to Encourage User Involvement Designer concerns –How much disk space will the database consume? –How many lines of program code will this function take? –How can we reduce the CPU time used? –What is the most efficient way of storing this data? –What database management system should we use?

56. 56 Management Support Commitment from all levels of management will improve chances of success –Recognition and rewards for involvement –Sufficient funding and resources –Management backing of organisational changes However –Over commitment can lead to excessive funding and resources for a failing project

57. 57 Level of Complexity and Risk Complexity of system relates to risk and hence failure rate –Technology (more technical = higher risk) Technology and expertise of staff –Definition (less definition = higher risk) Stable definition of requirements –Size (larger = higher risk) Staff, costs, time, organisation

58. 58 Level of Complexity and Risk TechnologyDefinitionSize Low Small LowHighSmall Low Large LowHighLarge High Small High Large HighLowSmall HighLowLarge Risk

59. 59 Implementation Management Poor management makes failure more likely –Cost overruns far exceed budget –Unexpected slippage –Technical shortfalls –Failure to obtain benefit Estimated that –Private sector projects are underestimated by 1.5 times budget and time –Large number are delivered with missing functionality –30% - 40% are ‘run-away’ –70% of BPR projects fail to deliver benefit

60. 60 Implementation Management Common causes of management problems: –Ignorance and optimism Poor ways of estimating time and budget Not enough experience of similar projects –Mythical man-month More people does not equal less time Training and expertise –Bad news travels slowly Slow communication of lateness to management

61. 61 Implementation Manager Manages implementation –Plan –Control Project team Suppliers Risk Budget –Problem solving –Follow methodology

62. 62 Traditional Technique Traditional project management techniques dealt with the size and complexity of the project Modularisation of project: –Breakdown to subprojects / tasks Schedule, milestones, budget –Assign team to subprojects / tasks Focus is on project mechanics, not business objectives

63. 63 “Fourth-generation” Project Management Emerging as a way to manage high-risk organisational change projects: –Large implementation –Business process re-engineering –Enterprise systems Plan for business goals, not project mechanics Focus on solving problems What opinion do you have on this?

64. 64 Implementation Management: Controlling Risk One of the tasks of an implementation manager is to control risk Large projects will have a dedicated risk manager

65. 65 Risk Examples Organisational –Management / user / customer support –Requirements fully analysed Technological –Inadequate, unproven, unreliable –Not available (‘smoke and mirrors’ only) –Project team have insufficient knowledge –Requirements fully analysed

66. 66 Risk Examples Project and control –Insufficient budget –Insufficient resources Hardware / software Staff Training –Insufficient time –Supplier / subcontractor delays ‘Acts of God’

67. 67 Contingency Simple form of risk analysis assigns a likelihood and cost to each risk Contingency for a risk is then likelihood times cost Total contingency must be factored into project Factor in liquidated damages?

68. 68 Controlling Risk Increasing user involvement –Users can become active project members –Control installation and training –Input into requirements and design –Involved in testing and trials May not be enough to overcome resistance to change –Redundancy?

69. 69 Controlling Risk Manage technical complexity –Managers must understand technical constraints –Build good relationships with team / suppliers –Anticipate problems: Supplier delays Training Hardware and software requirements –All team members must have access to technical decisions and supporting information

70. 70 Controlling Risk Formal planning and control –Gantt and PERT charts –Schedule, resources and milestones –Critical path analysis –Help break down to subprojects / tasks –Assess project status – milestones and budget

71. 71 Example Gantt 2 2 Microsoft Project: http://www.microsoft.com/office/project/default.asphttp://www.microsoft.com/office/project/default.asp

72. 72 Organisational Change Remember: –Implementation of Information Systems is both technical and organisational (sociotechnical) –Implementation must take into account both technical and organisational change What impact do Information Systems / Information Technology have on an organisation?

73. 73 Summary Organisational analysis –Gathering and analysing information Organisational change –Types of change and associated risk Information Systems Plan Implementation –Failure and avoiding failure –Managing change –Risk and mitigation