1010-chapter2

Chapter 2

Information Systems in OrganizationsITEC 1010

Information and Organizations

Organizations and Information Systems Organization A formal collection of people and otherresources established to accomplish a set of goals

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General Model of an Organization (next slide)

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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 serviceSchematicITEC 1010


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Organizations Organizational structure Organizational subunits and the way they arerelated to the overall organization

Traditional organizational structure Major department heads report to a presidentor top-level managerSchematicITEC 1010


A.Bailey, Legal counsel

S. Burry, President

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 StructureITEC 1010


Terminology (1) Hierarchical organizational structure See previous slide Series of levels Those at high levels have more power andauthority within an organization

Flat organizational structure An organizational structure with a reducednumber of layers of managementITEC 1010


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

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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 workteams or groupsITEC 1010


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, VP, Marketing Production

VP, Sales

VP, Finance


VP, Sales

VP, Finance


Project Organizational StructureITEC 1010


Other Organizational Structures (2) Multidimensional organizational structure A structure that may incorporate severalstructures at the same timeSchematic

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Vice President, Marketing Publisher, College Division Publisher, Trade Division Publisher, High School Division Marketing Group Marketing Group Marketing Group

Vice President, Production Production Group Production Group Production Group

Vice President, Finance Finance Group Finance Group Finance Group

Multidimensional Organizational StructureITEC 1010


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

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Organizational Culture and Change (1) Culture A set of major understandings and assumptionsshared by a group

Organizational culture The major understandings and assumptions fora business, a corporation, or an organization

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Organizational Culture and Change (1) Organizational change Deals with how for-profit and non-profitorganizations plan for, implement, and handle change

Organizational learning The way organizations adapt to new conditionsor alter their practices over timeITEC 1010


Models of Change Change model A representation of change theories developedby Kurt Lewin and Edgar Schein in 1969 Three-stage approach Unfreezing Moving RefreezingSchematicITEC 1010


Change ModelITEC 1010


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 profitabilityInformation and Organizations

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Rules, Rules, Rules Reengineering requires finding and vigorously challenging old rulesRule Small orders held until full truckload No order accepted until credit approved Original rationale Reduce delivery costs Reduce potential for bad debt Potential problem Customer deliver is delayed Customer service is poor Perception of limited product selection

All product decisions Reduce number of made at headquarters items in inventoryITEC 1010


Other Models Continuous improvement Constantly seeking ways to improve thebusiness processes to add value to products and services

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Continuous Improvement vs. ReengineeringReengineering Strong action to solve serious problem Driven by senior executives Broad in scope; cuts across organizations Goal to achieve a major breakthrough Continuous Improvement Routine action Worker-driven Narrow in scope Continuous, gradual

Often led by outsidersIS integral to the solutionITEC 1010

Led by workersIS provides data to guide


Total Quality Management Quality The ability of a product (including service) tomeet or exceed customer expectations

TQM A collection of approaches, tools, andtechniques, that offers a commitment to quality throughout the organizationITEC 1010


Outsourcing and Downsizing Outsourcing Contracting with outside professional services to meetspecific 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 productivityITEC 1010


Competitive Advantage Competitive advantage A position, product, service, etc., within abusiness that improves a position within a market with respect to competitors

Porters Five force model of competitive advantage Identifies factors that lead to competitivenessSchematicITEC 1010


Substitute Products

Buyer Power

Rivalry

Supplier Power

New EntrantsPorters Five-force ModelITEC 1010


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

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1. 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 2. Creating new goods or services A company may become stagnant without the introduction of new goods and/or services E.g., Compaq, Dell 3. Improving existing goods or services Small variations to existing goods or services, and/or complete modifications E.g., light foods 4. Using information systems for strategic purposes IS for improving organizational effectiveness E.g., SABRE (airline reservation system)ITEC 1010


Performance-based Information Systems Productivity A measure of the output achieved divided bythe input required

Output achieved Productivity = Input required

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

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

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Measures of IS Value Earnings growth Market share Customer awareness and satisfactionOne of my favourite quotes: When you cannot measure, your knowledge is of a meager and unsatisfactory kind. KelvinITEC 1010


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

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

SchematicITEC 1010


CEO

CIO

Other functional areas Information service unit

Information Resource Management Functions

Operations

Systems development Systems analysis & design

Support

Computer facility operations Data entry Local Area network operations

Data administration Information centre

Programming

Information technololgy

IS Department ITEC 1010


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

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

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

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

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IS Principles Use of IS strongly influenced byorganizational 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 soughtITEC 1010


End of Chapter 2Chapter 3ITEC 1010


1010-chapter2

Documents

organizations itec

vp information systems

vp production

vp marketing

finance vp

organizations terminology

way organizations

marketing production