LECTURE 2 ORGANIZATIONS AND INFORMATION TECHNOLOGY SUPPORT.

LECTURE 2ORGANIZATIONS AND

INFORMATION TECHNOLOGY SUPPORT

Learning Objectives

• Discuss major information systems concepts such as architecture and infrastructure.

• Describe the hierarchical structure of organizations and the corresponding information systems.

• Define various information systems and their evolution, and categorize specific systems.

• Describe the support provided to different types of employees in an organization.

• Describe how information resources are managed.

Chapter Overview

• Information Infrastructure• Information Architecture• Traditional Architectures• New Architectures

• Organizational Structure• Corresponding Information System

• Transaction Processing Systems• Management Information Systems• Support Systems

• Managers • Knowledge Workers• Clerical Staff

• Which resources are managed by whom?• What is the role of the information systems department?• Who runs the ISD and to whom does the department report?• What are the relationships between ISD and end users?

Information Systems InfrastructureandArchitecture

Organizations: Structure and Support

Evolution and Types of Information Systems

IT Support at Different Organizational Levels

Managing Information Technology in Organizations

Case : Burlington Coat Factory• The Business Problem

Burlingion is the largest retailer of coats in the United States

sells clothes, linens, luggage, jewelry, baby furniture and accessories

faces extremely strong competition wants to offer up to 60% off department store prices needs information to respond to demand needs to communicate and collaborate with both

store mangers and suppliers quickly and effectively

Case (continued…)

– a corporate computer-based communication system– networks to a main processor– transfers sales data by satellite technology– executes routine transactions on the headquarters’

computer– feeds information from the corporate databases into

spreadsheets or word processors on desktop computers for end-user computing and decision support

The Results dramatic decrease in communication problems steady increase in sales volume and profits

The Solution

Case (continued…)

• What have we learned from this case??

» several different information systems exist in one organization

» some of these systems may be completely independent, but most are interconnected

» information systems are connected by means of electronic networks

» the information system is composed of large and small computers and other hardware connected by different types of networks

» many information systems use client/server architecture

Characteristics of a networked corporate information system that are usually found in organizations

Information Systems Architecture• Physical facilities, hardware, software,

databases services, and management that support all computing resources in an organization

• Five major components of infrastructure– computer hardware– general-purpose software– networks and communication facilities– database– information management personnel

• Tells how specific computing resources are arranged, operated, and managed

Information Systems Architecture (continued …)

• Information Architecture a high-level map or plan of the information

requirements a manner in which these requirements will be satisfied a guide for current IT operations a blueprint for future IT directions meets the organization’s strategic business needs must tie together the information requirements, the

infrastructure, and the applications similar to the conceptual planning of a house


• Traditional Architectures mainframe environment

» processing is done by a mainframe computer - a relatively large computer built to handle large amounts of data, thousands of user terminals, and millions of transactions

» modern versions of this architecture : personal computers (PCs) and network computing (NC)

PC environment» PCs form the hardware architecture

distributed environment» divides the processing work between two or more computers» the participating computers can be all mainframe, all PCs, or

(usually) a combination of the two


• New Architectures client/server architecture

» several computers share resources and are able to communicate with many other computers

» a client - a computer such as a PC attached to the network, which is used to access shared network resources

» a server - a machine that is attached to the same network and provides clients with these services

» purpose : optimize the use of computer resources


• Enterprisewide Architectures access to data, applications, services, and real-time

flows of data in different LANs or databases use client/server architecture to create a cohesive,

flexible, and powerful computing environment provide total integration of departmental and

corporate IS resources increase the availability of information and

thereby maximize the value of an organization


• Internet-based Architectures based on the concepts of client/server architecture

and enterprisewide computing the Internet is the basis for a network connection

from the outside world to the company, as well as with the organization’s web site

organization’s internal private Internet (intranet) - useful for distributing information throughout the organization

The network organization:How a company uses the Internet, intranet and extranet

Head Quarter

Retail Stores

Employees

Manufacturing

Toys Inc

Corporate Intranet

EDI, VAN

Non-Company Manufacturers

Customers

Sales peoples and other

mobile employees

Distributors

Market

Non-Company Retailers

Suppliers (Purchasing)

Liquidators contractors

Toy Industry Extranet

Other Extranets

Banks and otherbusiness partners

Professional Associations, large

suppliers, competitorsCorporateExtranet

InternetPublicTravel

agency

Small customersSmall

retailersSmall vendors

Government

Organizations :Structure and IT Support

Organizations the nature of organizations determines their

activities, the information support they need, and the type of information systems they use

profit-making business versus not-for-profit organizations exist

manufacture goods versus services are delivered can be located in one place or in several places,

some are global or multinational organizations

Organizations : Structure

Organizational Structure departmental functional structure

» specialize in the delivery of a certain function» typical departments in an organization:

» Accounting» Finance» Marketing and Sales» Production or Operations Management (POM)» Human Resources Management (HRM)» Information Systems and Technology

Organizations : Structure

Hierarchical StructureHeadquarters

Division A Division B OverseasDivision

Plant C Plant D Plant E Plant F

POM Accounting Marketing Finance HRM

AdministrationServices(legal, etc.)

Organizations : IT Support

The Corresponding Information Systems Departmental Information Systems Plant Information Systems Divisional Information Systems Enterprisewide Information Systems Interorganizational Information Systems (IOS) Global Information System for an International

or Multinational Corporation

Types of Information Systems

organizations perform routine, repetitive tasks a TPS supports the monitoring, collection,

storage, processing, and dissemination of the organization’s basic business transactions

frequently, several transaction processing systems exist in one company

today’s transaction processing systems are much more sophisticated and complex

Transaction Processing Systems

Types of Information Systems (continued …)

provides periodic reports generates weekly and monthly summaries by

product, customer, or salesperson initially, MIS had an historical orientation today, MIS reports may include summary reports, for

the current period or for any number of previous periods - used for monitoring, planning, and control

functional management information systems (MIS)» access, organize, summarize, and display information for

supporting routine decision making in the functional areas» geared toward middle managers

Management Information Systems (MIS)


• Major Outputs of a Functional Management Information System

OUTPUT DESCRIPTIONStatistical summaries Summaries of raw data such as daily production,

and weekly and monthly usage of electricity.Exception reports Highlights of data items that are larger or

smaller than designated levels.Periodic reports Statistical summaries and exception reports

provided at scheduled, regular periods.Ad hoc reports Special, unscheduled reports provided on

demand.Comparative analysis Performance comparison to that of competitors,

past performance, or industry standards.Projections Advance estimates of trends in future sales,

cash flows, market share, etc.


office automation systems (OAS)» word processing systems

computer-aided design and manufacturing (CAD/CAM) decision support systems (DSS) end-user computing executive information systems (EIS) group support systems (GSS)

Support Systems

Intelligent Systems expert systems (ES) artificial neural network (ANN)


various computerized systems are being integrated to increase their functionalities

one popular form of integrated system is enterprise resources planning (ERP)

ERP plans and manages all of an organization’s resources and their use, including contacts with business partners

Integrating Systems

The EvolutionComputer Based Information Systems

1940 Scientific, military applications

1950 Routine business applications, TPS

1960 MIS, office automation

1980Client/server executive information system,

PC’s, AI, Groupware

1970 DSS, LANs

1990Integration, intelligent systems

the Web, intranets, extranets, ERP software

2000 Internet, Electronic commerce, Smart systems

IT Support at Different Organizational Levels

Information Infrastructure and TPS

The information systems support of people in organizations

Office Automation and Communication Systems Clerical Staff

Operation Systems Line Managers, Operators

Managerial Systems Middle Managers

Staff Support Knowledge Workers, Professionals

StrategicSystems

Top Managers

Knowledge Workers• People who create information and knowledge and integrate

it into the business• Engineers, financial and marketing analysts, production

planners, lawyers, and accountants• Responsible for finding or developing new knowledge for the

organization and integrating it with existing knowledge• Act as advisors and consultants to the members of the

organization• Act as change agents by introducing new procedures,

technologies, or processes• 60 to 80 percent of all workers are knowledge workers• Supported by a large variety of information systems from

Internet search engines to expert systems, to computer-aided design, and by knowledge bases

Clerical Staff

• Support managers at all levels• Data workers - use, manipulate, or disseminate

information– bookkeepers, secretaries who work with word

processors, electronic file clerks, and insurance claim processors

• Supported by office automation and groupware, including document management, workflow, e-mail, and other personal productivity software

IT Support at Different Organizational Levels : A Summary

SystemEmployees Supported

Office automation Office workersCommunication All employeesGroup support system

People working in groups

Decision support system

Decision makers, managers

Executive information Executives, top managers

Intelligent systems Knowledge workers

TPS Line managers and employees

MIS Middle management

• IT resources are scattered throughout the organization• Information systems have enormous strategic value• Some IT resources change frequently. It may be rather difficult

to manage IT resources• It is essential to manage information systems properly• The responsibility for the management of information

resources is divided between a usually centralized information systems department (ISD) and the end users

• Which resources are managed by whom?– Generally speaking, ISD is responsible for corporate-level and shared

resources, and the end users are responsible for departmental resources

Managing IT Resources

• What is the role of the information systems department?– Traditional major IS functions:• Managing systems development and systems project

management• Managing computer operations, including the computer

center• Staffing, training, and developing IS skills• Providing technical services

Managing IT Resources(continued …)

Managing IT Resources (continued …)

• What is the role of the information systems department? (continued)– New (additional) major IS functions:

• Initiating and designing specific strategic information systems• Infrastructure planning, development, and control• Incorporating the Internet and electronic commerce into the business• Managing system integration including the Internet, intranets, and

extranets• Educating the non-IS managers about IT• Educating the IS staff about the business• Supporting end-user computing• Partnering with the executive level that runs the business• Actively participating in business processes reengineering• Proactively using business and technical knowledge to the line with

innovative ideas about IT• Creating business alliances with vendors and IS departments in other

organizations

• Key MIS issues in two recent time periods

Managing Information Technology

Key Issues, 1994/1995 Key Issues, 19971. Building a responsive IT infrastructure

1. Improving productivity

2. Facilitating and managing business process redesign

2. Reducing costs

3. Developing and managing distributed systems

3. Improving decisionmaking

4. Developing and implementingan information architecture

4. Enhancing customer relationships

5. Planning and managing communication networks

5. Developing newstrategic applications

• Who Runs the ISD and to whom does ISD Report?

Managing Information Technology (continued …)

run by MIS Director, Manager of Computing Services, Manager of Information Technology, or Chief Information Officer (CIO)

reports to » Chief Executive officer

» Functional Vice President

» Senior vice president

» Chief knowledge officer (CKO) - the director assigned to capture and make effective use of IT knowledge for an organization

The executive committee provides the top-level oversight for the organization’s information resources. It guides the IS steering committee, which is usually chaired by the CIO.

• What are the relationships between the ISD and end users?

Managing Information Technology (continued …)

A steering committee that represents all end users and the ISD. This committee sets IT policies, decides on priorities, and coordinates IS projects.

Joint ISD/end-user project teams for planning, budgeting, applications development, and maintenance

ISD representation on the top corporate executive committee Service agreements that define computing responsibilities and

provide a framework for services rendered by the ISD to end users Technical and administrative support (including training) for end

users A conflict resolution unit established by the ISD to handle end-user

complaints quickly and resolve conflicts as soon as possible An information center that acts as help center to end users regarding

purchase, operations, and maintenance of hardware and software

What’s in IT for Me?

• For Accounting– Many of the transactions handled in a TPS are data that

the accounting department records and tracks• For Finance– Financial departments often use specialized DSS for

forecasting and portfolio management• For Marketing– Marketing uses such IT-related concepts as customer

databases, marketing decision making, sales automation, and customer relationship management (CRM)

What’s in IT for Me? (continued …)

• For Production/Operations Management– Organizations are competing on price, quality, time (speed), and

customer service which are enhanced and supported by IT• For Human Resources Management– Intranets help to disseminate relevant information throughout

the organization. Internets are used for recruiting• For MIS– IS management function continues to grow in strategic value

• For Non-Business– In all organizations, IT provides essential support to all functional

areas`

INFORMATION SYSTEMINFORMATION SYSTEMINFORMATION SYSTEMINFORMATION SYSTEM

INFORMATIOINFORMATION N

SYSTEMSYSTEM

BUSINESS BUSINESS

CHALLENGECHALLENGE

BUSINESS BUSINESS

SOLUTIONSSOLUTIONS

MANAGEMENTMANAGEMENT

INFORMATIONINFORMATION

TECHNOLOGYTECHNOLOGY

ORGANIZATIONORGANIZATION

MANAGING CHANGEMANAGING CHANGE

FITTING TECHNOLOGY TO OFITTING TECHNOLOGY TO ORGANIZATIONRGANIZATION

LIMITS OF TECHNOLOGYLIMITS OF TECHNOLOGY

ORGANIZATIONS & INFORMATION TECHNOLOGY

MEDIATING FACTORS: EnvironmeMEDIATING FACTORS: Environment Culture nt Culture Structure Standa Structure Standard Procedures Politics rd Procedures Politics Management Decisions Ch Management Decisions Chanceance

ORGANIZATIONSORGANIZATIONS INFORMATIOINFORMATION TECHNOLON TECHNOLOGYGY

MICROECONOMIC DEFINITION OF ORGANIZATION

INPUT FROM ENVIRONMENT

OUTPUT TO ENVIRONMENT

PRODUCTIONPROCESS

FEEDBACK

ORGANIZATIONORGANIZATION

BEHAVIORAL VIEW OF ORGANIZATIONS

STRUCTURE:HierarchyDivision of labor Rules, Procedures

PROCESS:Rights/Obligations Privileges/ResponsibilitiesValues

NormsPeople

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STRUCTURAL CHARACTERISTICS OF ALL ORGANIZATIONS

• CLEAR DIVISION OF LABOR• HIERARCHY• EXPLICIT RULES & PROCEDURES• IMPARTIAL JUDGMENTS• TECHNICAL QUALIFICATIONS• MAXIMUM ORGANIZATIONAL EFFICIENCY

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ORGANIZATIONAL STRUCTURES

• ENTREPRENEURIAL: Start up business• MACHINE BUREAUCRACY: Mid-sized manufacturing f

irm• DIVISIONALIZED BUREAUCRACY: Fortune 500• PROFESSIONAL BUREAUCRACY: Law firms, hospitals• ADHOCRACY: Consulting firm

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SALIENT FEATURES OF ORGANIZATIONS

COMMON FEATURES:• FORMAL STRUCTURE• STANDARD OPERATING PROCEDURES• POLITICS• CULTURE

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3.8

ORGANIZATION & ITS ENVIRONMENT

THE FIRM

INFORMATION SYSTEMS

ORGANIZATION & ITS ENVIRONMENT

THE FIRM

INFORMATION SYSTEMS

THE ENVIRONMENT:THE ENVIRONMENT:

RESOURCES & CONSTRAINTS

GOVERNMENTS

COMPETITORS

FINANCIAL INSTITUTIONS

CULTURE

KNOWLEDGE

TECHNOLOGY

ORGANIZATIONAL LEVELS & SUPPORT SYSTEMS

• INDIVIDUAL• GROUP• DEPARTMENT• ORGANIZATION• INTERORGANIZATION• ORGANIZATIONAL NETWORK

*


INDIVIDUAL:• ACTIVITY: Job, task• SUPPORT: Client database, DSSGROUP:• ACTIVITY: Project• SUPPORT: Product scheduling, access to TPS, exte

rnal sources, dynamic info needs, group DSS*


DEPARTMENT:• ACTIVITY: Major function • SUPPORT: Accounts payable; payroll; marketing;

MIS; TPSDIVISION:• ACTIVITY: Major product, service• SUPPORT: Systems to support functions; MIS; TPS

; on-line*


ORGANIZATION:• ACTIVITY: Multiple products, services, goals• SUPPORT: Integrated on-line, interactive finan

cial & planning systems; MIS; ESS*


INTERORGANIZATION:• ACTIVITY: Alliance; competition; exchange; co

ntact• SUPPORT: Communication systems; intelligenc

e, observation, monitoring systems*


ORGANIZATIONAL NETWORK:• ACTIVITY: Sector of economy; related product

s, services; interdependencies• SUPPORT: Informal communication systems; i

ndustry / sector-level formal reporting systems

*

WORK GROUPS, PROBLEMS, SUPPORT

TYPES:HIERARCHICALINTERDEPARTMENTAL COMMITTEESPROJECT TEAMSCOMMITTEESTASK FORCESPEER GROUPS / SOCIAL NETWORKS

*


PROBLEMS:MAKING ARRANGEMENTSATTENDING MEETINGSLONG AGENDASCOST OF MEETINGSBETWEEN-MEETING ACTIVITIES

*


SUPPORT:HIERARCHICAL: Video conferencing; e-mail INTERDEPARTMENTAL COMMITTEES: Electronic

messaging*


SUPPORT:PROJECT TEAMS: Scheduling software; Meeting

support tools; Documents; IntranetCOMMITTEES: e-bulletin boards; Video conferen

cing; e-mail; Computer conferencing*


SUPPORT:TASK FORCES: Graphics display; Info utility; Docu

ments; Meeting support toolsPEAR GROUPS / SOCIAL NETWORKS: Telephone;

e-mail; Correspondence*

THE COMPUTER PACKAGE

• ORGANIZATION: Senior Management; Major end users

• INFORMATION SYSTEMS DEPARTMENT– Technology: Hardware; Software– Information Systems Specialists

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THE COMPUTER PACKAGE

INFORMATION SPECIALISTS: • Managers• Systems analysts• Systems designers• Systems programmers• Applications programmers• Maintenance programmers• Database administrator

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WHAT SOME SPECIALISTS DO

• PROGRAMMERS: Write software• SYSTEMS ANALYSTS: Translate business proble

ms into solutions• IS MANAGERS: Department leaders• END USERS: Department reps for whom applic

ations are developed

SYSTEM DEVELOPMENT PROCESS

EXTERNALEXTERNAL Uncertainties UncertaintiesOpportunitiesOpportunities

INTERNALINTERNALValuesValues NormsNormsInterestsInterests

SYSTEM DEVELOPMENTSYSTEM DEVELOPMENT Adoption Adoption Utilization Utilization Management Management

HOW INFO SYSTEMS AFFECT ORGANIZATIONS

• MICROECONOMIC THEORY: Info technology is a factor of production, like capital & labor

• TRANSACTION COST THEORY: Firms attempt to minimize transaction costs internally & externally

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VP VP VP

CEO


• AGENCY THEORY: Firm is nexus of contracts among agents who make decisions; IS shrink number of agents & reduce cost

• BEHAVIORAL THEORIES: Concepts from Sociology, Psychology, Political Science; Organizations & Information Technology mutually influence each other

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VP VP VP

CEO


• DECISION & CONTROL THEORY: Decisions are made under conditions of risk & uncertainty; centralization & hierarchy reduce uncertainty

• SOCIOLOGICAL THEORY: Bureaucracy, SOPs help stabilize organizations, but slow ability to change

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VP VP VP

CEO


• POSTINDUSTRIAL THEORY: Flatter organizations; dominated by knowledge workers; decentralized decision making

• CULTURAL THEORY: Info technology must fit organization’s culture to be accepted

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VP VP VP

CEO


• POLITICAL THEORY: Info systems are outcome of political competition for policies, procedures, resources

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VP VP VP

CEO

IMPLEMENTING CHANGE

Source: Leavitt, Handbook of Organization (1965)

TASKTASK

PEOPLEPEOPLETECHNOLOGYTECHNOLOGY

STRUCTURESTRUCTURE

RESISTANCERESISTANCE

MUTUALMUTUALADJUSTMENTADJUSTMENT

HOW WEB AFFECTS ORGANIZATIONS

• MORE INFO, ANYWHERE, ANYTIME• MORE SCOPE, DEPTH, RANGE OF KNOWLEDGE

: Global encyclopedia• LOWERS COST, RAISES QUALITY OF INFO DIST

RIBUTION: Enhances attention span of vendors, customers, employees

*

THANKYOU

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LECTURE 2 ORGANIZATIONS AND INFORMATION TECHNOLOGY SUPPORT.

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