Organizations and Information Systems

2. The use of information systems to add value to the organization is strongly influenced by organizational structure, culture, and change. • Changes in the org. will cause changes in IS • Changes in IS and Technology will change the org. A good example is ERP. • What role will you play in Org. structure, culture, change management and decisions regarding the use of IS’s? Principles of Information Systems, Seventh Edition

3. 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 • TCO is used to help measure ROI • What is ROI and why is it important to organizations. Principles of Information Systems, Seventh Edition

4. Organizations and Information Systems • Organization: a formal collection of people and other resources established to accomplish a set of goals. • Are there any org’s within the same industry that are exactly the same??? Do organizations change over time? • An organization is a system • Inputs to the system: resources such as materials, people, and money. (land, labor, and capital • Outputs to the environment: goods or services Principles of Information Systems, Seventh Edition

5. Organizations and Information Systems (continued) • Value chain: a series (chain) of activities that includes inbound logistics, warehouse and storage, production, finished product storage, outbound logistics, marketing and sales, and customer service • Upstream management: management of raw materials, inbound logistics, and warehouse and storage facilities • Downstream management: management of finished product storage, outbound logistics, marketing and sales, and customer service Principles of Information Systems, Seventh Edition

6. Value Chain, again • Why is the concept of the value chain important?? • Cone’s answer. • Always looking at all processes and activities determining how you can change, add, or delete processes with information systems to add value to products or services. • This will be in your realm as a decision maker. The only way that you will be successful in your own business or by working for a business is to make “good” decisions. Principles of Information Systems, Seventh Edition

7. Organizational Structure • Organizational structure: organizational subunits and their relationship with the overall organization • Categories of organizational structure: • Traditional • Project • Team • Multidimensional • Virtual Principles of Information Systems, Seventh Edition

8. Traditional Organizational Structure • A hierarchical structure • Major department heads report to a president or top-level manager • A managerial pyramid shows the hierarchy of decision making and authority Principles of Information Systems, Seventh Edition

9. Figure 2.3: A simplified organizational model, showing the managerial pyramid What does this do with making decisions ??? Principles of Information Systems, Seventh Edition

10. Figure 2.4: A Traditional Organizational Structure Principles of Information Systems, Seventh Edition

11. Project Organizational Structure • Centered around major products or services • Temporary project teams Principles of Information Systems, Seventh Edition

12. Team Organizational Structure • Centered on work teams or groups • Temporary or permanent teams • Various sizes Principles of Information Systems, Seventh Edition

13. 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 Principles of Information Systems, Seventh Edition

14. Virtual Organizational Structure and Collaborative Work • Employs individuals, groups, or business units in geographically dispersed areas • People may never meet face to face • A job is not necessarily a place you go to. • Can be permanent or temporary • Collaborative work: managers and employees can effectively work in groups around the world Principles of Information Systems, Seventh Edition

15. Reengineering • Process redesign • Radical redesign of business processes, organizational structures, information systems, and values of the organization to achieve a breakthrough in business results Principles of Information Systems, Seventh Edition

16. Figure 2.8: Reengineering Principles of Information Systems, Seventh Edition

17. Continuous Improvement • Constantly seeking ways to improve business processes • Benefits: • Increased customer loyalty • Reduced customer dissatisfaction • Reduced opportunity for competitive inroads Principles of Information Systems, Seventh Edition

18. Technology Diffusion, Infusion, and Acceptance • Technology diffusion: measure of how widespread the use of technology is in an organization • Technology infusion: extent to which technology permeates a department Principles of Information Systems, Seventh Edition

19. Technology Diffusion, Infusion, and Acceptance • Technology Acceptance Model (TAM): specifies factors that can lead to higher usage of technology in an organization such as • The perceived usefulness of the tech. • The ease of its use • The quality of the IS • The degree to which the org. supports the use of the IS. What else???? Principles of Information Systems, Seventh Edition

20. Technology Diffusion, Infusion, and Acceptance • What is the best mixture of the diffusion, infusion, and acceptance for best performance and profitability ??? Principles of Information Systems, Seventh Edition

21. Outsourcing, On-Demand Computing, and Downsizing • Outsourcing: contracting with outside professionals • On-demand computing: contracting for computer resources to rapidly respond to an organization’s varying workflow • Downsizing: reducing the number of employees in an organization to cut costs. Usually the result of what??? Principles of Information Systems, Seventh Edition

22. Competitive Advantage • Competitive advantage: significant, long-term benefit to a company over its competition • Once you achieve competitive advantage using IS’s you can usually keep it for a rather long time. Agree? Why? • Ability to establish and maintain a competitive advantage is vital to a company’s success Principles of Information Systems, Seventh Edition

23. Factors That Lead Firms to Seek Competitive Advantage • Rivalry among existing competition • Threat of new entrants • Threat of substitute products and services • Bargaining power of customers and suppliers Principles of Information Systems, Seventh Edition

24. Table 2.4: Competitive Advantage Factors and Strategies Principles of Information Systems, Seventh Edition

25. Major Stages in the Use of IS • 1960’s. Oriented toward cost reduction and productivity. Ignored the revenue side. • 1980’s. Oriented toward spending large amounts on IS and ignoring the costs. • Today. Performance based information systems. • Next Slide. Principles of Information Systems, Seventh Edition

26. Performance-Based Information Systems • Considers both strategic advantage and costs • Uses productivity, return on investment (ROI), net present value, and other measures of performance Principles of Information Systems, Seventh Edition

27. Productivity • A measure of output achieved divided by input required • Higher level of output for a given level of input means greater productivity • Measured by OPMH Principles of Information Systems, Seventh Edition

28. Return on Investment and the Value of Information Systems • Earnings growth • Market share • Customer awareness and satisfaction • Total cost of ownership Principles of Information Systems, Seventh Edition

29. Roles, Functions, and Careers in the Information Systems Department • Primary responsibilities in information systems • Operations: focuses on the efficiency of information systems functions • Systems development: focuses on specific development projects and ongoing maintenance and review • Support: provides user assistance Principles of Information Systems, Seventh Edition