Information Systems in Organizations
Chapter 2
Principles and Learning Objectives
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 and Learning Objectives
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 and Learning Objectives
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.
Organizations & Information Systems
Value Chain
Organizational Structure
Organizational subunits and their relationship with the overall organization
Categories of organizational structure:
Team
Traditional
Multidimensional
Project
Virtual
Traditional Organizational Structure
Traditional Organizational Structure
Project Organizational Structure
Centered on major products and services
Temporary project teams
Project Organizational Structure
Team Organizational Structure
Temporary or permanent teams
Work groups
Various sizes
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
Multidimensional Organizational Structure
Virtual Organizational Structure
Employs business units in geographically dispersed areas
People may never meet face to face
Can be permanent or temporary
Organizational Culture and Change
Organizational Culture
Shared understandings, values, and assumptions in an organization
Influences information systems
Organizational Change
Reengineering
Reengineering
Continuous Improvement
Constantly seeking ways to improve business processes
Benefits:
Increased customer loyalty
Reduction in customer dissatisfaction
Reduced opportunity for competitive inroads
Continuous Improvement vs. Reengineering
Technology Diffusion, Infusion, and Acceptance
Technology diffusion - measure of widespread use of technology
Technology infusion - extent to which technology permeates a department
Technology Acceptance Model (TAM) - specifies factors that can lead to higher usage of technology
Total Quality Management (TQM)
Quality: ability of a product or service to meet or exceed customer expectations
TQM: approaches and techniques used to achieve quality throughout the organization
Outsourcing and Downsizing
Outsourcing: contracting with outside professionals
Downsizing: cutting the number of employees
Competitive Advantage
Significant, long-term benefit to a company over its competition
Ability to establish and maintain a competitive advantage is vital to the company’s success
Competitive Advantage
Five forces motivate firms to seek competitive advantage
Rivalry among existing competition
Threat of new entrants
Threat of substitutions
Buyers’ bargaining power
Suppliers’ bargaining power
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 planning
Strategic Planning for Competitive Advantage
Performance-Based Information Systems
Productivity
A measure of output achieved divided by input required
Higher level of output for a given level of input means greater productivity
Return on Investments and the Value of Information Systems
Earnings growth
Market share
Customer awareness and satisfaction
Total cost of ownership
Justifying Information Systems
Ensure that the system supports business needs
Assess risks
Identify benefits
Justifying Information Systems
Assessment of Risk:
How well are the requirements understood?
To what degree does the project require pioneering effort in technology?
Is there a risk of severe business repercussions if the project is poorly implemented?
Justifying Information Systems
Most IS projects fall into one of the following categories:
Tangible Savings
Intangible Savings
Legal Requirement
Modernization
Pilot Project
The 10 Best Places to Work for IS
Roles, Functions, and Careers in Information Systems Department
Operations - focuses on the efficiency of information
Systems development - focuses on specific development projects and ongoing maintenance and review
Support - provides user assistance
The Three Primary Responsibilities of Information Systems
Typical IS 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
Typical IS Titles and Functions
Internet careers
Strategists
Programmers
Website operators
Chief Internet Officer
Consulting firms
Summary
Value-added processes increase the relative worth of combined inputs on their way to becoming final outputs
Business process reengineering involves the radical redesign of business processes, organizational structures, and information systems
Information systems personnel typically work in an information systems department that employs a chief information officer, systems analysts, and computer programmers