Information Systems in Organizations Information Systems and Management

Information Systems in Organizations Information Systems and Management

Introduction Businesses need to ensure that systems: § Lower Costs § Increase Profits § Improve Service § Achieve a competitive advantage

IS personnel are the key to unlocking the potential of any new or modified system (HBO)

• In your career you will work with information systems to help your company become more efficent, effective, productive, and competitive within its industry.

Organization An organization is a formal collection of people and other resources established to accomplish a set of goals.

Value Chain The Value Chain is a series of activities that includes: – Inbound logistics – Warehouse & Storage – Production – Finished product storage – Outbound logistics – Marketing & Sales – Customer Service

Organizational Structure

Organizational Structure Organizational subunits and the way they relate to the overall organization.

Types of Organizational Structures • Traditional • Flat • Project • Team • Multi-Dimensional • Virtual http: //www. evektor. cz/evektor/images/organisation_chart_EN. gif

Empowerment Giving employees and their managers more responsibility and authority to make decisions, take certain actions, and have more control over their jobs.

Organization Structure and IS President 3 V-P V-P Buy Make Sell Keep Track 3 3 3 1 3 2

IS Department Functions Ø Technical • Operating Systems • Telecommunications • DBA Ø Systems & Programming ØTraining • Internal • External ØAudit

Business Process Reengineering (BPR) BPR The radical redesign of business processes • Technology • TQM

Technology • Diffusion: Measure of how widely technology is spread throughout the organization • Infusion: Extent to which technology is deeply integrated into a business area • Technology Acceptance Model (TAM): a model that describes the factors that lead to higher levels of acceptance and usage of technology. – Factors include ease of use and quality of information

Total Quality Management (TQM) • Quality: the ability of a product or service to meet or exceed customer expectations • TQM: approaches that foster a commitment to quality – Awareness of customer needs – Empowering and rewarding employees for quality

Information System Success Efficiency - Output / Input - Do things right Effectiveness - Output / Objectives - Do the right things

More BPR • The fundamental re-thinking and radical redesign of business processes to achieve dramatic improvements in cost, quality, service, and speed. • Automate: IT substitutes for human effort – Payroll (same but faster) • Informate: IT augments human effort – Spreadsheets (new activities) • Transformate: IT restructures processes – Paperless Accounts Payable

BPR – Revolutionary TQM - Evolutionary

“Don’t pave the cow paths”

Strategies to Contain Costs • Outsourcing: contracting with outside professional services to meet specific business needs • On-Demand Computing (Utility Computing): contracting for computer resources to rapidly respond to an organizations varying workflow (Cloud) • Downsizing (Rightsizing): reducing the number of employees to cut costs

Porter’s Five Forces Model Factors that lead to attainment of competitive advantage

Porter’s Five Forces Model & Information Technology

From a Company Perspective 1. Buyer Power § Decrease buyer power § Make it more attractive for customers to buy from us § IT § Loyalty Program § Safeway VS. Save-On-Foods § Aeroplan

2. Supplier Power § Decrease supplier power § Have many alternate supply sources § IT § B 2 B Marketplace § Internet-based services which brings together many buyers and sellers § Private Exchange

3. Threat of Substitute Product or Services § Decrease threat § Have fewer alternatives in the market § IT § Create switching costs

4. Threat of New Entrants § Decrease threat § Create an entry barrier § IT 5. Rivalry among Existing Competitors § Trend is toward increased competition § IT § § § Gain a competitive advantage (fleeting) Compete on price Track Purchasing sequences

Strategic Planning for Competitive Advantage Strategic Alliance: Agreement between two or more companies that involves the joint production and distribution of goods and services. • Creating new products and services • Improving existing products and services • Using IS for strategic purposes

Planning Organizing Controlling IS Directing Staffing

Chief Information Officer (CIO) • Oversees all uses of IT • Ensures strategic alignment of IT with business goals and objectives

Discussion Question Business Personnel and IT Personnel There is a GAP • What is this gap? • Why does it exist? • How may it be resolved?

Information Systems in Organizations Information Systems and Management