Information Systems in Organizations PDF

 The use of information systems to add value to the organization is strongly influenced by organizational structure, culture, and change  Identify the value-added processes in the supply chain and describe the role of information systems within them  Provide a clear definition...

 The use of information systems to add value to the organization is strongly influenced by organizational structure, culture, and change  Identify the value-added processes in the supply chain and describe the role of information systems within them  Provide a clear definition of the terms organizational structure, culture, and change and discuss how they affect the implementation of information systems 2  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  Identify some of the strategies employed to lower costs or improve service  Define the term competitive advantage and discuss how organizations are using information systems to gain such an advantage  Discuss how organizations justify the need for information systems 3  Information systems personnel are the key to unlocking the potential of any new or modified system  Define the types of roles, functions, and careers available in information systems 4  Organizations and Information Systems  Organization: a formal collection of people and other resources established to accomplish a set of goals  An organization is a system – Inputs to the system: resources such as materials, people, and money – Outputs to the environment: goods or services 5 Figure 2.1: A General Model of an Organization 6  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 7 Figure 2.2: The Value Chain of a Manufacturing Company 8  Organizational Structure  Organizational structure: organizational subunits and their relationship with the overall organization  Categories of organizational structure: – Traditional – Project – Multidimensional – Virtual 9  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 10 Traditional Organization structures in a business, branch bank, and community hospital A simplified organizational model, showing the managerial pyramid  Project Organizational Structure  is an essential configuration for determining the hierarchy of people, their function, workflow and reporting system.  Centered around major products or services  Temporary project teams 13 Project Organizational Structure  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 15 Figure 2.6: A Multidimensional Organizational Structure 16  Virtual Organizational Structure  development that involves different locations  team executes a project in one area, you can manage it from any other place.  distribute resources to your project team regardless of location.  People may never meet face to face  Amazon.com and eBay both are virtual organizations those provides online auction facilities to customers worldwide.  Both organizations operate its business in different countries with separate website and several functions 17  Virtual Organizational Structure (cont.)  Advantages – Faster and cost-effective as there are no boundaries to work and communication. – Lower operating costs as no permanent set up required (no need for office premises) – Have several options like part-time work, job-sharing, and home-based working – Employee satisfaction and efficiency 18  Virtual Organizational Structure (cont.)  Disadvantages – No physical contact or communication, thus, lacks team integrity – Resources require training for virtual interaction – Different time zones cause delayed responses 19  Organizational Culture and Change  Organizational culture: a set of values that guide the behavior of organization members  Defines the content of what a new employee needs to learn to become an accepted member of an organization  Levels of Organizational Culture  Artifacts: are visible elements or signs that you can see with the naked eye when you walk into an organization, i.e., logos, architecture, clothing, behavior, language, architecture. High visibility  Values: are the values and rules of conduct that are adopted over time from every leader that comes into an organization; each leader brings their own set of values and rules of conduct. guides to behavior. Hard for newcomer to see, but can learn them – Espoused values: what people say – In-use values: what people do  Basic assumptions: like values but often unclear to veteran members Levels of Organizational Culture (Cont.) Artifacts/physical High visibility characteristics Values (Espoused; In-use) Basic assumptions Low visibility Change Management Framework Project Define What Is Changing Manage the Transition Benefits Definition Process Design Business Impact  Business Case  Organization  Benefits Assessments  As-Is Process Design Realizatio Mapping  Stakeholder n / Value  To-Be Process Analysis* Delivery Mapping  HR  Recommend Alignment  Preferred Alternative Ongoing Monitoring of Changes Business Readiness Assessment / Planning Communications* Check Points Business Engagement 23  Reengineering Business processes IT Software systems Reengineering applications 24  Business Process Reengineering  Business definition. Business goals are identified within the context of four key drivers: cost reduction, time reduction, quality improvement, and personnel development and empowerment.  Process identification. Processes that are critical to achieving the goals defined in the business definition are identified.  Process evaluation. The existing process is thoroughly analyzed and measured.  Process specification and design. Based on information obtained during the first three BPR activities, use-cases are prepared for each process that is to be redesigned.  Prototyping. A redesigned business process must be prototyped before it is fully integrated into the business.  Refinement and instantiation. Based on feedback from the prototype, the business process is refined and then instantiated within a business system. 25 Business Process Reengineering Business definition Refinement & Instantiation Prototyping Process identification Process Specification and Design Process Evaluation 26  SOFTWARE REENGINEERING  RESTRUCTURING - Transforming unstructured code into structured code equivalent  REENGINEERING - “clean up” old software without affecting user functionality  REVERSE ENGINEERING - Uncover or rediscover the design specification from existing code; then apply forward engineering  Software Reengineering Forward inventory engineering analysis Data document restructuring restructuring code reverse restructuring engineering 28  Inventory Analysis  build a table that contains all applications  establish a list of criteria, e.g., – name of the application – year it was originally created – number of changes made to it – total effort applied to make these changes – date of last change – effort applied to make the last change – system(s) in which it resides – applications to which it interfaces,...  analyze and prioritize to select candidates for reengineering 29  Document Restructuring  Weak documentation is the trademark of many legacy systems.  But what do we do about it? What are our options?  Options … – Creating documentation is far too time consuming. If the system works, we’ll live with what we have. In some cases, this is the correct approach. – Documentation must be updated, but we have limited resources. It may not be necessary to fully redocument an application. – The system is business critical and must be fully redocumented. Even in this case, an intelligent approach is to pare documentation to an essential minimum. 30  Reverse Engineering dirty source code restructure code clean source code processing extract abstractions interface initial specification database refine & simplify final specification 31  REVERSE ENGINEERING Business Functions Program Source Code Structure Data Flow Chart Diagram Business Functions Object-Oriented Model & Data  Code Restructuring  Source code is analyzed using a restructuring tool.  Poorly design code segments are redesigned  Violations of structured programming constructs are noted and code is then restructured (this can be done automatically)  The resultant restructured code is reviewed and tested to ensure that no anomalies have been introduced  Internal code documentation is updated. 33  Data Restructuring  Data structuring is a full-scale reengineering activity  In most cases, data restructuring begins with a reverse engineering activity. – Current data architecture is dissected and necessary data models are defined (Chapter 9). – Data objects and attributes are identified, and existing data structures are reviewed for quality. – When data structure is weak (e.g., flat files are currently implemented, when a relational approach would greatly simplify processing), the data are reengineered. 34  REVERSE ENGINEERING Data Business Dictionary Data Program Source Code Entity-Relationship Diagram Business Functions Object-Oriented Model & Data  Forward 1. Engineering The cost to maintain one line of source code may be 20 to 40 times the cost of initial development of that line. 2. Redesign of the software architecture (program and/or data structure), using modern design concepts, can greatly facilitate future maintenance. 3. Because a prototype of the software already exists, development productivity should be much higher than average. 4. CASE tools for reengineering will automate some parts of the job. 5. A complete software configuration (documents, programs and data) will exist upon completion of preventive maintenance. 36  Economics of Reengineering-I  A cost/benefit analysis model for reengineering has been proposed by Nine parameters are defined: P1 = current annual maintenance cost for an application. P2 = current annual operation cost for an application. P3 = current annual business value of an application. P4 = predicted annual maintenance cost after reengineering. P5 = predicted annual operations cost after reengineering. P6 = predicted annual business value after reengineering. P7 = estimated reengineering costs. P8 = estimated reengineering calendar time. P9 = reengineering risk factor (P9 = 1.0 is nominal). L = expected life of the system. 37  Economics of Reengineering-II  The cost associated with continuing maintenance of a candidate application (i.e., reengineering is not performed) can be defined as Cmaint = [P3 - (P1 + P2)] x L  The costs associated with reengineering are defined using the following relationship: Creeng = [[P6 - (P4 + P5)] x (L - P8)]] - (P7 x P9)] `  Using the costs presented in equations above, the overall benefit of reengineering can be computed as cost benefit = Creeng - Cmaint 38 End of Presentation