Information Systems Management in the Global Economy

Information Systems Management in the Global Economy Chapter 1 Importance of Information Systems (IS) Management © 2009 Pearson Education, Inc. Publishing as Prentice Hall Outline & Objectives  Introduction  Themes of this Course  Manage...

Information Systems Management in the Global Economy Chapter 1 Importance of Information Systems (IS) Management © 2009 Pearson Education, Inc. Publishing as Prentice Hall Outline & Objectives  Introduction  Themes of this Course  Management of IS A Little History  The Organizational Environment  The External Business Environment  The Internal Organizational Environment  Goals of the New Work Environment © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-2 Outline  The Technology Environment  Hardware Trends  Software Trends  Data Trends  Communication Trends  The Mission of IS Organizations  A Simple Model  IS Management © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-3 Introduction  Information technology (IT) is a pervasive element of society today and has revolutionized and restructured many aspects of human endeavor, including work.  This course emphasizes the use of IT in managing and operating organizations. © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-4 Themes of This Course  Globalization  Worldwide expansion of brands and the emergence of global institutions after World War II  American multinational enterprises’ foreign direct investments in other countries  IS organization must balance global IT enterprise goals with local systems needs  E-enablement  Leveraging of IT to build relationships with consumers and other enterprises in general © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-5 Discussion Question  What is a multinational Enterprise?  How can IT/IS balance the global need with the local in  Creating multinational enterprises from Ethiopia?  To adopt a multinational enterprises in Ethiopia?  In terms of customizing products, establishing local presence and adapt to cultural nuances © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-6 Themes of This Course  Businessintelligence through knowledge sharing and knowledge management  Transfer of knowledge between people  Elicit tacit knowledge that people possess © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-7 Management of IS  Governance of IT  Collaborative effort between IS, the business and their constituencies  The Role of IS  System integration and infrastructure development  Outsourcing  Development and management of relationships with external service providers © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-8 What is Governance of IT?  IT governance is an element of corporate governance, aimed at improving the overall management of IT and deriving improved value from investment in information and technology.  5 focuses of IT Governance  Value Delivery  Strategic Alignment  Performance Management  Resource Management  Risk Management © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-9 The role of IS in a Business  Operational excellence  New products, services, and business models  Customer and supplier intimacy  Improved decision making  Competitive advantage  Survival © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-10 A Little History  1950s: Calculator  Bookkeeping activities  Texas Instrument invented first handheld calculator  1960s: Mainframe  Data-intensive business transactions and accounting  IBM mainframe © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-11 A Little History cont’d  1970s: Database management systems  Operational efficiency  Structured Query Language (SQL) first developed by IBM  Oracle and SAP emerged as key players  1980s:Personal Computer (PC), decision support systems  Office automation (OA) and decision-making  IBM released first PC (hardware) with Microsoft MS- DOS operating system (software) © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-12 A Little History cont’d  1990s:Internet and Enterprise Resource Planning  Global communication and exponential growth in use of computers for OA and networking  Microsoft Windows and Office Suite  Email, instant messaging, World Wide Web  2000s: Internet and Social Fabric  Global coordination and cooperation (strategic partnerships) within and between businesses  Web services, e-supply chains  Social computing for business applications © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-13 A Little History © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-14 The Organizational Environment  How IT is used depends on the environment surrounding the organization that uses it.  External forces that cause IS executives to re-examine how their firms compete and internal structural forces that affect how organizations operate or are managed.  External business environment  Internal organizational environment  Goal of new work environment © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-15 The External Business Environment  Internet economy  IT underpins old and new ways of doing business  Physical and electronic marketplace  Global Marketplace  Internet has accelerated firms’ internationalization process  Born global firms  Micro-markets  Micro-commoditization and micro-consumption  Digital microproducts  iTunes, Amazon shorts, Disney short videos  Business ecosystems  Relationships and growth that are organic in nature © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-16 The External Business Environment cont’d  Decapitalization  Emphasis on intangible assets  Faster business cycles  First-mover advantage  Instant gratification  Accountability and transparency  IT’s role in corporate governance  Rising societal risks of IT  Job losses due to technology substitution and outsourcing  Information security © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-17 Discussion Question  What is instant gratification in a business?  How can IT/IS enable instant gratification  To improve customer satisfaction?  In supply chain management  In e-commerce © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-18 The Internal Business Environment  From supply-push to demand-pull  Customer-centric philosophy  Value co-creation with customer  IT allows business to achieve this on a large scale  Self-service  Customer empowerment (through customization)  Customers know what they want best  Real-time working  There is no noticeable delay between the action and its effect or consequence  Derive competitive advantage  Team-based working  For the duration of projects and tasks (ephemeral) © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-19 The Internal Business Environment cont’d  Anytime, anyplace information work  Tele-work, mobile computing  Outsourcing and strategic alliances  Use of IT to help manage work across the extended enterprise  Demise of hierarchy  Flatter organization (employee empowerment)  Use of IT to facilitate information exchange © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-20 Business Strategies in the New Work Environment  Leverage knowledge globally  Tap into intellectual capital across the entire enterprise  Organize for complexity  Interconnectivity and interdependence of businesses  Work electronically  Concept of the workspace  Handle continuous and discontinuous change  Built to change (innovation)  Total quality management (continuous)  Reengineering (discontinuous) © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-21 The Technology Environment  The technological (IT) environment has a symbiotic relationship with organizational structure (co-evolution)  Hardware Trends  Software trends  Data trends  Communication trends © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-22 Hardware Trends  Movement of central administration to distributed computing  1950s and 1960s (mainframe)  batch-processing,  1970s (minicomputer)  back-end data centers  Some autonomy at the department level  1980s and early 1990s (personal computer)  PCs greatly accelerated process of decentralization  Client-server model  Late 1990s and 2000s (Web, networks and mobile/handheld)  Centralized computing via networks and the Internet © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-23 Software Trends 1. Transaction processing application development  Emphasis on improving productivity of programmers 2. Life cycle development methodology  Focus on rigorous project management techniques 3. Purchased software vs. in-house development  “Programming” shifted to end-users  Point-and-click applications 4. Open systems software vs. proprietary software 5. Enterprise resource planning (ERP) systems 6. Web services—service oriented architecture (SOA)  Network centric and loosely coupled applications to support business process requirements © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-24 Data Trends  1970s: Technical solutions for managing data  Database management systems (DBMS)  Centralized environment for first 20 years  1990s: Shift toward managing information resources  Concepts/ideas as a function of raw data  Voice, video, graphics, animation  Decentralized environment of information access and exchange (end-user level)  Require data warehousing and data mining technologies  2000s: Web content management  Standardize formats of and make interoperable huge amounts of data on Web sites  e.g., Extensible Markup Language (XML) © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-25 Communications Trends  1980s: Enterprise networking  Local area networks (LAN) within organization site  Wide area networks (WAN) between organization sites  Private leased lines  1990s onwards: Internet (convergence of telecommunications and information systems)  Invention of modulator/demodulator (MODEM)  Dialup, ISDN and other broadband technologies to solve problem of last mile  Internet protocols (TCP/IP) became de facto standard for LANs and WANs  Voice over IP  Wireless technologies © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-26 The Mission of IS Organizations  Transaction processing systems (TPS) in the early days  “Paper factories”  MIS era  Producing reports for all levels of management  Today’s context  “To improve the performance and innovativeness of people in organizations through the use of IT”  Business results as a metric for IS performance © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-27 A Simple Model  IS functions in organizations  Figure 1-2 represents the process of applying IT to accomplish useful work  Figure 1-3 describes the increasing power and complexity of IT  More specialization required of IS professionals  Figure 1-4 depicts the increasing IT sophistication and efficacy of users © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-28 A Simple Model cont’d © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-29 A Simple Model cont’d © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-30 A Simple Model cont’d © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-31 A Better Model  An expanded model with four principal elements to describe IS function 1. A set of technologies that represent the IT infrastructure installed and managed by the IS department  Web services, mobile applications, integration of multimedia and consumer electronics 2. A set of users who need to use IT to improve their job performance (Figure 1-5)  Support procedure-based activities  Support knowledge-based activities © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-32 A Better Model 3. A delivery mechanism for developing, delivering, and installing applications 4. Executive leadership to manage the entire process of applying the technology to achieve organizational objectives and goals © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-33 A Better Model: A Dichotomy of Information Work © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-34 Dichotomy of information Work  The most important benefit of this dichotomy is that it reveals how much of a firm’s information processing efforts have been devoted to procedure-based activities, which is understandable because computers are process engines that naturally support process-driven activities. © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-35 Dichotomy of information Work  As important as they are, though, it is clear that procedure-based activities are no longer sufficient to sustain competitiveness.  The wave of the future is applying IT to knowledge-based activities. For the task “pay employees” or “bill customers,” the system analyst can identify the best sequence of steps. © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-36 IS Management  IT leadership comes from a chief information officer (CIO) who must be high enough in the enterprise to influence organizational goals and have enough credibility to lead the harnessing of the technology to pursue those goals.  However, the CIO, as the top technology executive, does not perform the leadership role alone, because IT has become too important to enterprise success to be left to one individual. © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-37 IS Management  Thus, CIOs work with their business peers, C-level executives—CEO, COO, CFO—and the heads of major functional areas and business units.  The technology is becoming so fundamental and enabling that this executive team must work together to govern and leverage it well. © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-38 IS Function Components IS function has four major components: 1. The technology, which provides the enabling electronic and information infrastructure for the enterprise 2. Information workers in organizations, who use IT to accomplish their work goals © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-39 IS Function Components 3. The system development and delivery function, which brings the technology and users together. 4. The management of the IS function, with the overall responsibility of harnessing IT to improve the performance of the people and the organization © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-40 A framework for IS Management © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-41 Summary Question 1. What changes are taking place in the external business environment? 2. What changes are occurring in the internal organizational environment? 3. What are the goals of the new work environment? 4. Give two or three characteristics of the technology trends in hardware, software, data, and communications. 5. What is the mission for the IS organization recommended by the authors? How does it differ from earlier perceptions of the purpose and objectives of information systems? 6. Summarize the four main components of the model of the IS function (Figure 6). 7. List several attributes of procedure-based and knowledge-based information activities. Which do you think are most important? Why? © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-42 Thank You © 2009 Pearson Education, Inc. Publishing as Prentice Hall