Essay: information systems and the modern organization

Information Systems and the Modern Organization

Outline

Competitive Advantage and Strategic Information Systems

Evolution of Information Systems

Classification of Information Systems

The Modern Computing Environment

Managing Information Resources

Learning Objectives

Describe Porter’s competitive forces model.

Discuss strategies that companies can use to achieve competitive advantage in their industries.

Describe strategic information system (SISs) and how information technology helps companies improve their competitive positions.

Describe various information systems and their evolution.

Learn major Information System classification schemes.

Describe the emerging computing environments.

Describe how information resources are managed and the roles of the information systems department and the end users

Competitive advantage and SIS

Competitive Advantage: An advantage over competitors in some measure such as cost, quality, or speed, which leads to control of a market and to larger than average profits.

Competitive forces model

A business framework, devised by Michael Porter, for analyzing competitiveness by looking at five major forces that might alter a firm’s competitive standing.
Porter’s five forces Model

Strategies for Competitive Advantage

Cost Leadership. Produce products and/or services at the lowest cost in the industry.

Differentiation. Offer different products, services or product features.

Customer orientation. Concentrate on making customers happy so that they remain loyal.

New markets. Discover new markets either as a means of expansion and growth, or with the goal of capturing market niches.

Innovation. Introduce new products and services, add new features to existing products and services or develop new ways to produce them.

Operational Effectiveness. Improve the manner in which internal business processes are executed so that a firm performs similar activities better than its rivals.

Discussion: Which of these strategies can be enhanced by the use of IS/IT, and how?

Strategic Information Systems (SISs)

Systems that help an organization gain a competitive advantage through their contribution to the strategic goals of an organization and / or their ability to significantly increase performance and productivity.

IS Related Organizational Responses

Strategic Systems may provide advantages that enable organizations to increase market share and/or profits, to better negotiate with suppliers, or prevent competitors from entering their markets.

Customer Focus is the idea of attracting and keeping customers by providing superb customer service.

Can be enhanced by use of IS/IT.

Made-to-Order. is a strategy of producing customized products and services.

Mass Customization is producing a large quantity of items, but customizing them to fit the desire of each customer.

E business and Ecommerce. Is the strategy of doing business electronically.

Discussion: Which Information Systems would be strategic for:

1. An university
2. An online book store
3. A car manufacturer?

Evolution of Information Systems

The first business application of computers (in the mid1950s) performed repetitive, high volume, transaction computing tasks.

The computers �crunched numbers” summarizing and organizing transactions and data in the accounting, finance, and human resources areas. Such systems are generally called transaction processing systems (TPSs).

Management Information Systems (MISs): these systems access, organize, summarize and display information for supporting routine decision making in the functional areas.

Office Automation Systems (OASs): such as word processing systems were developed to support office and clerical workers.

Decision Support Systems: were developed to provide computer based support for complex, or no routine decision making.

End-user computing: The use or development of information systems by the principal users of the systems’ outputs, such as analysts, managers, and other professionals.

Knowledge Management Systems: support creating, gathering, organizing, integrating and disseminating of an organization knowledge.

Data Warehousing: A data warehouse is a database designed to support DSS, ESS and other analytical and end-user activities.

Intelligent Support System (ISSs): Include expert systems which provide the stored knowledge of experts to non experts, and a new type of intelligent systems with machine learning capabilities that can learn from historical cases.

Mobile Computing: Information systems that support employees who are working with customers or business partners outside the physical boundaries of their companies; can be done over wire line or wireless networks.

Classification of Information Systems

The two most common classifications are:

Classification by breath of support

Classification by organizational level.

Classification by Breath of Support

Typical information systems that follow the hierarchical organization structure are functional (departmental), enterprisewide and interorganizational Functional information systems are organized around the traditional departments.

Enterprise information systems serve several departments or the entire enterprise.

Inter organizational systems connect two or more organizations.

An organization’s supply chain describe the flow of materials, information, money, and service from raw material suppliers through factories and warehouses to the end customers.

IT provides two major types of software solution for managing supply chain activities: Enterprise Resource Planning ( ERP),

Supply Chain Management (SCM)

Classification by Organization Levels

The typical enterprise is organized hierarchically, from the clerical and office worker layer, to the operational layer, the managerial layer, the knowledge worker layer and finally the strategic layer.

The Clerical Level

Clerical workers constitute a large class of employees who support managers at all levels of the company. Among clerical workers, those who use, manipulate, or disseminate information are referred to as data workers. These employees include bookkeepers, secretaries who work with word processors, electronic file clerks, and insurance claim processors.

The Operational Level

Operational or first line managers deal with the day to day operations of the organization, making routine decisions, which deal in general with activities such as short-term planning, organizing, and control

The Knowledge Work Level

They act as advisors and assistants to both top and middle management and are often subject area experts. Many of these professional workers are classified as knowledge workers, people who create information and knowledge as part of their work and integrate it into the business.

The Strategic Level

Top-level or strategic managers (the executives) make decisions that deal with situations that may significantly change the manner in which business is done.

The Modern Computing Environment

Computing Environment: The way in which an organization’s information technologies (hardware, software, and communications technology) are organized and integrated for optimal efficiency and effectiveness.

Legacy system: Older systems, typically those that process an organization’s high volume transactions that are central to the operations of a business.

Managing Information Resources

Information resources includes hardware, software, data, networks, applications etc.

Management includes acquisition, introduction, support….

Traditionally, department (ISD – IS department) owns, manages and controls all resources

Managing Information Resources

End-user computing: employees use computers, write applications, manage data etc.

Leads to fragmented management and need for cooperation between ISD and users

Who is responsible for which resources?

Includes financial responsibilities (contracts between users and ISD – IT controlling)

Managing Information Resources

Discussion: What are the possible problems associated with:

Complete control at ISD, and

Complete control for end-users?

Which factors in a company would lead to which outcome?

Managing Information Resources

Chief Information Officer (CIO): sometimes member of top management, nowadays no longer technical, but strategic function

IT Governance: “… the leadership and organisational structures and processes that ensure that the organisation’s IT sustains and extends the organisation’s strategies and objectives.” Framework for IT Governance: COBIT

Control Objectives for IT and related Technologies

Mandated for Turkish banks in 2006

Domains: Plan and Organize, Acquire and Implement, Deliver and Support, Monitor and Evaluate

COBIT

Case Study

? Prepare the case study �Todd Pacific Shipyards Makes Effective Use of Information Systems”, textbook p. 55/56, for next session.