IT-Enabled Organizational Change

• Building a new information system constitutes a kind of planned organizational change.
• Introducing a new information system involves alterations to jobs, skills, management, and overall organizational structure, exceeding mere hardware and software adjustments.
• New information systems enable redesigning organizational structure, scope, power relationships, workflows, products, and services. Information technology facilitates varying degrees of organizational change, scaling from incremental to extensive modifications.
• The four structural changes enabled by IT range from automation to paradigm shifts, each possessing unique rewards and risks.
• The most common form of IT-enabled organizational change is automation; this involves computer use to expedite existing tasks, illustrated by payroll systems.
• Rationalization often follows initial automation to address inefficiencies.
• Automation can reveal hidden bottlenecks in production.
• Rationalization streamlines standard operating procedures and eliminates bottlenecks so that automation improves efficiency.
• Business reengineering analyzes, simplifies, and redesigns business processes as a powerful type of organizational change.
• Business reengineering reorganizes workflows to eliminate waste and repetitive tasks, which may lead to job eliminations.
• Rationalizing procedures and redesigning business processes are changes limited to specific parts of a business.
• Paradigm shifts are radical business changes that fundamentally transform an organization's operations or its core business.
• Paradigm shifts requires rethinking the business and the nature of the organization itself.
• New information systems are solutions to organizational problems.
• Managers and employees may realize an organization is underperforming.
• System development includes all activities involved in generating an information system solution for an organizational problem or opportunity.
• These activities comprise of systems analysis, systems design, programming, testing, conversion, production, and maintenance.

Systems Analysis

• System analysis analyzes problems the organization will try to solve with an information system, identifying its causes and defining solution requirements.
• Systems analysts identify problems and objectives by examining documents, observing operations, and interviewing system users.
• Systems analysis involves a feasibility study to determine solution achievability given the organization's resources and constraints.
• Technical feasibility assesses whether the proposed solution is possible with available hardware, software, and technical resources.
• Economic feasibility determines if the proposed solution's benefits justify the costs.
• Operational feasibility assesses if the proposed solution fits within the current managerial and organizational framework.
• The system analysis process typically identifies several alternative solutions for the organization to consider.
• Three basic solutions are doing nothing, modifying existing systems, or developing a new system

Systems Design

• System design serves as the blueprint for system development, with specifications for the functions identified during systems analysis.
• System design is divided into physical and logical design.
• Logical design outlines system components and user interactions, detailing inputs, outputs, processing functions, data models, and controls.
• Physical design translates the logical model into specific technical specifications for hardware, software, databases, media, procedures, and controls.

Programming

• The system specifications prepared during the design stage get translated into software.

Testing

• Thorough testing is essential to verify the system's functionality and accuracy, requiring careful preparation of test data and review of results.
• Testing an information system includes three types of activities:
• Unit testing, or program testing, involves separately testing each program to confirm error-free operation and expected performance, one program at a time.
• System testing evaluates the system's overall functionality, determining if modules function as planned and identifying discrepancies between actual and conceived operation
• System testing examines performance time, file storage capacity, peak load handling, recovery capabilities, restart procedures, and manual processes.
• Acceptance testing provides the final certification that the system is ready to be used in a live setting.
• User, technical staff, and management assess system tests with installation occurring only when all parties are satisfied it meets established standards.

Conversion

• Conversion is the process of transitioning from the old system to the new one, with four main strategies:
• Parallel strategy: Running both old and new systems together until the new system's correct functioning is assured, the safest approach but very expensive.
• Direct cutover strategy: Replacing the old system entirely on a specific date, a risky but potentially less costly option.
• Pilot study strategy: Introducing the new system in a limited organizational area, the department or operating unit.
• Phased approach strategy: Introducing the new system gradually by functions or organizational units.

Production and Maintenance

• The system enters production after installation and conversion.
• During production, the system is periodically reviewed by users and technical specialists to assess goal achievement and identify necessary modifications.
• System maintenance includes hardware, software, documentation, or procedure changes to correct errors, meet requirements, or improve efficiency.

Business Value of Information Systems

• Some benefits of information systems in business:
• Increased productivity
• Low operational costs
• Reduced workforce
• Improved decision-making
• Improved job satisfaction
• More timely information
• Higher client satisfaction
• Improved organizational flexibility
• A better corporate image

Alternative System Building Approaches

• Alternative system building approaches address some problems in the traditional system development life cycle.
• These approaches include prototyping, application software packages, end-user development, and outsourcing.

Prototyping

• It involves rapidly and inexpensively building an experimental system for users to evaluate.
• User interaction with the prototype helps refine information requirements.
• The endorsed prototype can then serve as a template for creating the final system.
• Prototypes are working versions of an information system or part of a system.
• Once operational, the prototype is refined until it conforms to user requirements and converted to a production system.
• Building a prototype is an iterative process, the steps to build a system can be repeated
• Prototyping steps include:
• Identify the user's basic requirements
• System designers capture basic information needs.
• Develop an initial prototype using tools that can create a working model quickly.
• Encourage the user to use the prototype.
• Revise and enhance the prototype
• System builders refine the prototype based on user feedback.
• Prototyping is useful in scenarios about requirements.
• Prototyping enables immediate feedback on the parts of the system they are involved.
• Prototypes encourage end-user involvement throughout the system development life cycle.
• Prototyping is best suited for smaller applications.

Application Software Packages

• Purchasing an application software package is an alternative strategy to the developing an information system from scratch.
• An application software package consists of prewritten, precoded application software programs that are commercially available for sale.

End-User Development

• End users in many organizations are developing an increasing percentage of information systems with little or no formal help from technical specialists.
• The phenomenon is called end-user development.
• End-user development has been made possible by fourth-generation software tools.
• With fourth-generation languages, graphics languages, and PC tools, end users can access data, create reports, create web pages, and develop entire information systems on their own without professional systems analyst.
• End-user computing tools increased the speed and ease with which certain kinds of applications can be created.
• Many fourth-generation tools have application design knowledge built in.
• Many fourth-generation applications can easily access data, produce reports or graphics, or even generate simple data entry transactions.
• Many organizations reported appreciable gains in application-development productivity using tools.
• Fourth-generation tools have new capabilities, such as graphics, spreadsheets, modeling, and ad hoc information retrieval, that helps the system meet important business needs.
• Fourth-generation tools cannot replace conventional tools for some business applications because their capabilities are limited.
• Most fourth-generation tools are designed for simple systems that do not do much.
• Fourth-generation processing is inefficient and uses a lot of computer resources.
• Using large files results in a slow response time and performance degradation.
• Systems cannot handle a lot of data because they're nonprocedural by design.

Management Benefits and Problems

• End-user development has several organizational benefits which include:
• Improved requirements determination- with users system development.
• User are more likely to be involved with the process of developing their own systems.
• End users take a more active role in the system development.
• Backlogs are reduced because the information staffs take less responsibility.
• Challenges posed by end-user computing:
• Insufficient review and analysis.
• A lack of quality assurance for standards and methods.

Alternative System Building Approaches Cont'd

• End-user groups outside can easily create their own applications, this can lead to uncontrolled data and files and therefore there is confusion.
• Users can use fourth-generation tools to create hidden information, therefore users data is private and out of view from the rest of the organization.

Outsourcing Information Systems

• Firms outsource when they don't want to use internal resources to build and operate information systems, they hire an external organization that specializes in these services.
• Outsourcing is turning over an organization's computer center operations, telecommunications networks, or applications development to external vendors.
• Companies resort to outsourcing to control rapidly rising information systems costs.
• Some organizations perceive it is more cost-effective than maintaining its own computer center and information system
• There will be economies of scale, the knowledge, skills, and capacity can be shared with many different customers.
• Outsourcing allows a company with fluctuating needs for computer processing
• Firms outsource because their internal information systems staff cannot with stand the pace of technological change.
• If the service is unsatisfactory, the provider of outsourcing services to their client.
• Outsourcing enables the organization to focus on higher value activities.
• Predicted costs of service and uncertainty in developing your own information system.
• Outsourcing places the vendor in an advantageous position if they only developing the client's information system, the client has to accept what they provide.
• Trade secrets may leak out if a firm's information system is being run by an outsider.
• Vendor with financial problems results in the services to deteriorate.
• Outsourcing has both benefits and liabilities and is not for organizations or situations. The role of IS should considered for that decision.
• Do outsourcing when there is only a limited opportunity for the firm to distinguish itself.
• Do outsourcing if it does not strip the know-how for the future.
• Also do outsourcing when system capabilities are limited.

Explore IT's role in organizational change. Discover how new systems alter jobs, management, and structure. Learn about automation, rationalization, and redesign and paradigm shifts.