Information Systems in Organizations

Prof. Rushen Chahal

Prof. Rushen Chahal

Organizations and Information Systems

Organization
A formal collection of people and other resources established to accomplish a set of goals

Prof. Rushen Chahal

General Model of an Organization

(next slide)

Prof. Rushen Chahal

Prof. Rushen Chahal

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 service
Schematic
Prof. Rushen Chahal

Prof. Rushen Chahal

Organizations
Organizational structure
Organizational subunits and the way they are related to the overall organization

Traditional organizational structure

Major department heads report to a president or top-level manager

Schematic
Prof. Rushen Chahal

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 Structure

Prof. Rushen Chahal

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

Flat organizational structure

An organizational structure with a reduced number of layers of management
Prof. Rushen Chahal

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

Prof. Rushen Chahal

Other Organizational Structures (1) Project organizational structure

An organization structure centred on major products or services Contrast with traditional structure
Schematic

Team organizational structure

An organizational structure centred on work teams or groups

Prof. Rushen Chahal

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, VP, Marketing Production

VP, Sales

VP, Finance

VP, VP, Marketing Production

Project Organizational Structure

Prof. Rushen Chahal

Other Organizational Structures (2) Multidimensional organizational structure

A structure that may incorporate several structures at the same time
Schematic

Prof. Rushen Chahal

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 Structure

Prof. Rushen Chahal

Other Organizational Structures (3) Advantages and disadvantages of different

organizational structures
Read the book!

Prof. Rushen Chahal

Organizational Culture and Change (1)

Culture
A set of major understandings and assumptions shared by a group

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

Prof. Rushen Chahal

Organizational Culture and Change (1)

Organizational change
Deals with how for-profit and non-profit organizations plan for, implement, and handle change

Organizational learning
The way organizations adapt to new conditions or alter their practices over time

Prof. Rushen Chahal

Models of Change
Change model
A representation of change theories developed by Kurt Lewin and Edgar Schein in 1969 Three-stage approach
Unfreezing Moving Refreezing
Schematic
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Change Model
Prof. Rushen Chahal

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 profitability

Prof. Rushen Chahal

Rules, Rules, Rules

Reengineering requires finding and vigorously challenging old rules
Rule Small orders held until full truckload Original rationale Reduce delivery costs Potential problem Customer deliver is delayed Customer service is poor Perception of limited product selection
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No order accepted Reduce potential for until credit approved bad debt All product decisions Reduce number of made at headquarters items in inventory

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

Prof. Rushen Chahal

Continuous Improvement vs. Reengineering

Reengineering Strong action to solve serious problem Driven by senior executives Broad in scope; cuts across organizations Goal to achieve a major breakthrough Often led by outsiders IS integral to the solution Continuous Improvement Routine action Worker-driven Narrow in scope Continuous, gradual Led by workers IS provides data to guide
Prof. Rushen Chahal

Total Quality Management

Quality
The ability of a product (including service) to meet or exceed customer expectations

TQM
A collection of approaches, tools, and techniques, that offers a commitment to quality throughout the organization

Prof. Rushen Chahal

Outsourcing and Downsizing

Outsourcing
Contracting with outside professional services to meet specific 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 productivity

Prof. Rushen Chahal

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

Porters Five force model of competitive advantage

Identifies factors that lead to competitiveness
Schematic
Prof. Rushen Chahal

Substitute Products

Buyer Power

Rivalry

Supplier Power

New Entrants
Porters Five-force Model
Prof. Rushen Chahal

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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Prof. Rushen Chahal

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)
Prof. Rushen Chahal

Performance-based Information Systems

Productivity
A measure of the output achieved divided by the input required

Output achieved Productivity = Input required

Prof. Rushen Chahal

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

Prof. Rushen Chahal

Return on Investments (ROI) and the Value of IS

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

Prof. Rushen Chahal

Measures of IS Value
Earnings growth Market share Customer awareness and satisfaction
One of my favourite quotes: When you cannot measure, your knowledge is of a meager and unsatisfactory kind. Kelvin
Prof. Rushen Chahal

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

Prof. Rushen Chahal

Roles, Functions, and Careers in the IS Department

Categories:
Operations Systems development Support Liaisons (information service units)

Schematic
Prof. Rushen Chahal

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 Information technololgy

Programming

IS Department Prof. Rushen Chahal

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

Prof. Rushen Chahal

Information Service Unit

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

Prof. Rushen Chahal

Chief Information Officer (CIO)

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

Prof. Rushen Chahal

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

Prof. Rushen Chahal

IS Principles
Use of IS strongly influenced by organizational structure and problem orientations IS are often intertwined within the valueadded processes IS usage may require change that could meet with resistance Value-added IS needs to be continually sought
Prof. Rushen Chahal