Laudon MIS 9th Edition Chapter 14
Transcript of Laudon MIS 9th Edition Chapter 14
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14Chapter
Redesigning the Organization Redesigning the Organization with Information Systems with Information Systems
Redesigning the Organization Redesigning the Organization with Information Systems with Information Systems
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Management Information SystemsManagement Information SystemsChapter 14 Redesigning the Organization with Information Systems Chapter 14 Redesigning the Organization with Information Systems
SYSTEMS AS PLANNED ORGANIZATIONAL CHANGE
• Operational goals shaped by the industry, the firm, the manager, and the broader environment that are believed to assure the success of an organization
Strategic Analysis or Critical Success Factors (CSFs):
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Management Information SystemsManagement Information SystemsChapter 14 Redesigning the Organization with Information Systems Chapter 14 Redesigning the Organization with Information Systems
SYSTEMS AS PLANNED ORGANIZATIONAL CHANGE
Using CSFs to Develop Systems
Figure 14-2
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Management Information SystemsManagement Information SystemsChapter 14 Redesigning the Organization with Information Systems Chapter 14 Redesigning the Organization with Information Systems
SYSTEMS AS PLANNED ORGANIZATIONAL CHANGE
Systems Development and Organizational Change
Four Kinds of Structural Change:
• Automation: Mechanizing procedures to speed up the performance of existing tasks
• Rationalization of procedures: The streamlining of standard operating procedures
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Management Information SystemsManagement Information SystemsChapter 14 Redesigning the Organization with Information Systems Chapter 14 Redesigning the Organization with Information Systems
SYSTEMS AS PLANNED ORGANIZATIONAL CHANGE
• Business process reengineering: Analysis and redesign of business processes to reorganize workflows and reduce waste and repetitive tasks
• Paradigm shift: Radical reconceptualization of the nature of the business and the nature of the organization
Systems Development and Organizational Change )
Four Kinds of Structural Change: (Continued)
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Management Information SystemsManagement Information SystemsChapter 14 Redesigning the Organization with Information Systems Chapter 14 Redesigning the Organization with Information Systems
SYSTEMS AS PLANNED ORGANIZATIONAL CHANGE
Organizational Change Carries Risks and Rewards
Figure 14-3
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Management Information SystemsManagement Information SystemsChapter 14 Redesigning the Organization with Information Systems Chapter 14 Redesigning the Organization with Information Systems
BUSINESS PROCESS REENGINEERING AND PROCESS IMPROVEMENT
Business Process ReengineeringBusiness Process Reengineering
Workflow management:
• The process of streamlining business procedures so that documents can be moved easily and efficiently from one location to another
• Leading mortgage banks reduced time to obtain a mortgage from 6-8 weeks to one week, by radically changing the workflow and document management procedures
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Management Information SystemsManagement Information SystemsChapter 14 Redesigning the Organization with Information Systems Chapter 14 Redesigning the Organization with Information Systems
BUSINESS PROCESS REENGINEERING AND PROCESS IMPROVEMENT
Steps to effective reengineering:
• Understanding which processes need improvement
• Measuring performance of existing processes as a baseline
• Allowing IT to influence process design from the start
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Management Information SystemsManagement Information SystemsChapter 14 Redesigning the Organization with Information Systems Chapter 14 Redesigning the Organization with Information Systems
• Methodology and tools for revising the
organization’s business processes enabling
continual improvements
Process Improvement: Business Process Management, Process Improvement: Business Process Management, Total Quality Management, and Six Sigma Total Quality Management, and Six Sigma
Business Process Management (BPM):
BUSINESS PROCESS REENGINEERING AND PROCESS IMPROVEMENT
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Management Information SystemsManagement Information SystemsChapter 14 Redesigning the Organization with Information Systems Chapter 14 Redesigning the Organization with Information Systems
• Workflow management
• Business process modeling
• Quality management
• Change management
BPM and BPM software tools include:
BUSINESS PROCESS REENGINEERING AND PROCESS IMPROVEMENT
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Management Information SystemsManagement Information SystemsChapter 14 Redesigning the Organization with Information Systems Chapter 14 Redesigning the Organization with Information Systems
• Tools for recasting processes into standardized forms that can be continually manipulated
• Process mapping tools to document existing processes and create new models
• Process monitoring and analytics
BUSINESS PROCESS REENGINEERING AND PROCESS IMPROVEMENT
BPM and BPM software tools include: (Continued)
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Management Information SystemsManagement Information SystemsChapter 14 Redesigning the Organization with Information Systems Chapter 14 Redesigning the Organization with Information Systems
• Sees achievement of quality control as an end in
itself with responsibility shared by all people in
an organization
• Focuses on a series of continuous improvements
rather than large change
Total Quality Management and Six Sigma Total Quality Management and Six Sigma
Total Quality Management (TQM):
BUSINESS PROCESS REENGINEERING AND PROCESS IMPROVEMENT
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Management Information SystemsManagement Information SystemsChapter 14 Redesigning the Organization with Information Systems Chapter 14 Redesigning the Organization with Information Systems
BUSINESS PROCESS REENGINEERING AND PROCESS IMPROVEMENT
• A specific measure of quality, representing 3.4 defects per million opportunities
• Designates a set of methodologies and techniques for improving quality and reducing costs
• Uses statistical analysis to detect process flaws and make minor adjustments
Six Sigma:
Total Quality Management and Six SigmaTotal Quality Management and Six Sigma
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Management Information SystemsManagement Information SystemsChapter 14 Redesigning the Organization with Information Systems Chapter 14 Redesigning the Organization with Information Systems
Setting strict standards for products, services,
or activities and measuring organizational
performance against those standards
Benchmarking:
BUSINESS PROCESS REENGINEERING AND PROCESS IMPROVEMENT
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15Chapter
Understanding the Business Understanding the Business Value of Systems and Value of Systems and
Managing Change Managing Change
Understanding the Business Understanding the Business Value of Systems and Value of Systems and
Managing Change Managing Change
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UNDERSTANDING THE BUSINESS VALUE OF INFORMATION SYSTEMS
Projects with 12-24 month objectives
Longer periods infrastructure investments
Two kinds of IS investments:
Management Information SystemsManagement Information SystemsChapter 15 Understanding the Business Value of Systems and Chapter 15 Understanding the Business Value of Systems and
Managing Change Managing Change
Improvement in business processes to increase firm efficiency
Improvements in management decision making
Two ways for producing value:
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Management Information SystemsManagement Information SystemsChapter 15 Understanding the Business Value of Systems and Chapter 15 Understanding the Business Value of Systems and
Managing Change Managing Change
UNDERSTANDING THE BUSINESS VALUE OF INFORMATION SYSTEMS
Strengthening firm strategically (ties to partners, customers, increasing flexibility, etc.)
Enabling future implementation of new technologies
Additional IS value from: Additional IS value from:
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UNDERSTANDING THE BUSINESS VALUE OF INFORMATION SYSTEMS
Capital Budgeting: Process of analyzing and selecting various proposals for capital expenditures
Traditional Capital Budgeting Models Traditional Capital Budgeting Models
Management Information SystemsManagement Information SystemsChapter 15 Understanding the Business Value of Systems and Chapter 15 Understanding the Business Value of Systems and
Managing Change Managing Change
Capital expenditures:Capital expenditures:
Expand production to meet anticipated demand
Modernize production equipment to reduce costs
Can be noneconomic, e.g. installing pollution control equipment
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UNDERSTANDING THE BUSINESS VALUE OF INFORMATION SYSTEMS
The payback method
The accounting rate of return on investment (ROI)
The net present value
The cost-benefit ratio
The profitability index
The internal rate of return (IRR)
Six capital budgeting models for evaluating capital projects: Six capital budgeting models for evaluating capital projects:
Management Information SystemsManagement Information SystemsChapter 15 Understanding the Business Value of Systems and Chapter 15 Understanding the Business Value of Systems and
Managing Change Managing Change
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UNDERSTANDING THE BUSINESS VALUE OF INFORMATION SYSTEMS
Do not express the risks and uncertainty of their own costs and benefits estimates
Costs and benefits do not occur in the same time frame.
Inflation may affect costs and benefits differently.
Intangible benefits are difficult to quantify.
Limitations of Financial Models Limitations of Financial Models
Management Information SystemsManagement Information SystemsChapter 15 Understanding the Business Value of Systems and Chapter 15 Understanding the Business Value of Systems and
Managing Change Managing Change
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UNDERSTANDING THE BUSINESS VALUE OF INFORMATION SYSTEMS
An overall understanding of where the firm is making information technology investments
Based on inventory of all information systems projects and assets, including infrastructure, outsourcing contracts, and licenses
Assigns risk and benefit profiles to IS investments
Strategic Considerations Strategic Considerations
Management Information SystemsManagement Information SystemsChapter 15 Understanding the Business Value of Systems and Chapter 15 Understanding the Business Value of Systems and
Managing Change Managing Change
Portfolio Analysis:
Seeks to develop
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A System Portfolio
Management Information SystemsManagement Information SystemsChapter 15 Understanding the Business Value of Systems and Chapter 15 Understanding the Business Value of Systems and
Managing Change Managing Change
UNDERSTANDING THE BUSINESS VALUE OF INFORMATION SYSTEMS
Figure 15-3
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UNDERSTANDING THE BUSINESS VALUE OF INFORMATION SYSTEMS
A quick and sometimes compelling method for arriving at a decision on alternative systems
The most important outcome of a scoring model is not the score but agreement on the criteria used to judge a system.
Best practice is to cycle through the scoring model several times, changing the criteria and weights, to see how sensitive the outcome is to reasonable changes in criteria.
Management Information SystemsManagement Information SystemsChapter 15 Understanding the Business Value of Systems and Chapter 15 Understanding the Business Value of Systems and
Managing Change Managing Change
Scoring Models:
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UNDERSTANDING THE BUSINESS VALUE OF INFORMATION SYSTEMS
Productivity is a measure of the firm’s efficiency in converting inputs to outputs. It refers to the amount of capital and labor required to produce a unit of output.
Information technology has increased productivity in manufacturing, but productivity gains in service sector are unclear.
Management Information SystemsManagement Information SystemsChapter 15 Understanding the Business Value of Systems and Chapter 15 Understanding the Business Value of Systems and
Managing Change Managing Change
Information Technology Investments and Productivity
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UNDERSTANDING THE BUSINESS VALUE OF INFORMATION SYSTEMS
Contribution of IT to productivity in information and knowledge industries is difficult to quantify.
Information technology investments are more likely to improve firm performance if accompanied by complementary investments in new business processes, organizational structures, and organizational learning.
Management Information SystemsManagement Information SystemsChapter 15 Understanding the Business Value of Systems and Chapter 15 Understanding the Business Value of Systems and
Managing Change Managing Change
Information Technology Investments and Productivity (Continued)
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Information Systems Problem Areas
Management Information SystemsManagement Information SystemsChapter 15 Understanding the Business Value of Systems and Chapter 15 Understanding the Business Value of Systems and
Managing Change Managing Change
THE IMPORTANCE OF CHANGE MANAGEMENT IN INFORMATION SYSTEMS SUCCESS AND FAILURE
Figure 15-4
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System design may fail to capture essential business requirements or improve organizational performance.
Information may not be timely: Information may be in a format that is difficult to understand or have a poor user interface.
Management Information SystemsManagement Information SystemsChapter 15 Understanding the Business Value of Systems and Chapter 15 Understanding the Business Value of Systems and
Managing Change Managing Change
Design:
THE IMPORTANCE OF CHANGE MANAGEMENT IN INFORMATION SYSTEMS SUCCESS AND FAILURE
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The data in the system may have a high level of inaccuracy or inconsistency, may be inaccessible or incomplete.
Management Information SystemsManagement Information SystemsChapter 15 Understanding the Business Value of Systems and Chapter 15 Understanding the Business Value of Systems and
Managing Change Managing Change
Data:
THE IMPORTANCE OF CHANGE MANAGEMENT IN INFORMATION SYSTEMS SUCCESS AND FAILURE
Some systems operate quite smoothly, but their costs to implement and run on a production basis may be way over budget.
Cost:
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Management Information SystemsManagement Information SystemsChapter 15 Understanding the Business Value of Systems and Chapter 15 Understanding the Business Value of Systems and
Managing Change Managing Change
The system does not run well or breaks down and information is not provided in a timely and efficient manner.
System response time is too long.
Operations problems can be attributed to technical features, but most stem from organizational factors.
Operations:
THE IMPORTANCE OF CHANGE MANAGEMENT IN INFORMATION SYSTEMS SUCCESS AND FAILURE
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Implementation: All organizational activities working
toward the adoption, management, and routinization
of a new system change agent
Management Information SystemsManagement Information SystemsChapter 15 Understanding the Business Value of Systems and Chapter 15 Understanding the Business Value of Systems and
Managing Change Managing Change
Change Management and the Concept of Implementation
THE IMPORTANCE OF CHANGE MANAGEMENT IN INFORMATION SYSTEMS SUCCESS AND FAILURE
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The systems analyst who develops technical solutions and redefines the configurations, interactions, job activities, and power relationships of various organizational groups
Acts as catalyst for the entire change process and is responsible for ensuring that all parties involved accept the changes created by a new system
Management Information SystemsManagement Information SystemsChapter 15 Understanding the Business Value of Systems and Chapter 15 Understanding the Business Value of Systems and
Managing Change Managing Change
THE IMPORTANCE OF CHANGE MANAGEMENT IN INFORMATION SYSTEMS SUCCESS AND FAILURE
Change Management and the Concept of Implementation (Continued)
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If users are heavily involved in systems design, they
have more opportunities to mold the system
according to their priorities and business
requirements and control the outcome.
Involved users are more likely to react positively to
the completed system.
Management Information SystemsManagement Information SystemsChapter 15 Understanding the Business Value of Systems and Chapter 15 Understanding the Business Value of Systems and
Managing Change Managing Change
User Involvement and Influence: User Involvement and Influence:
THE IMPORTANCE OF CHANGE MANAGEMENT IN INFORMATION SYSTEMS SUCCESS AND FAILURE
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Management backing also ensures that a systems project receives sufficient funding and resources to be successful
All the changes in work habits and procedures and any organizational realignment associated with a new system depend on management backing
Management Information SystemsManagement Information SystemsChapter 15 Understanding the Business Value of Systems and Chapter 15 Understanding the Business Value of Systems and
Managing Change Managing Change
THE IMPORTANCE OF CHANGE MANAGEMENT IN INFORMATION SYSTEMS SUCCESS AND FAILURE
Management Support and Commitment: (Continued)
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Management Information SystemsManagement Information SystemsChapter 15 Understanding the Business Value of Systems and Chapter 15 Understanding the Business Value of Systems and
Managing Change Managing Change
THE IMPORTANCE OF CHANGE MANAGEMENT IN INFORMATION SYSTEMS SUCCESS AND FAILURE
The level of project risk is influenced by:
Level of Complexity and Risk:
Project size
Project structure
Level of technical expertise of the information systems team
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Management Information SystemsManagement Information SystemsChapter 15 Understanding the Business Value of Systems and Chapter 15 Understanding the Business Value of Systems and
Managing Change Managing Change
Management of the Implementation Process Management of the Implementation Process
THE IMPORTANCE OF CHANGE MANAGEMENT IN INFORMATION SYSTEMS SUCCESS AND FAILURE
Figure 15-6
Consequences of Poor Project Management
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Costs that vastly exceed budgets
Unexpected time slippage
Technical shortfalls resulting in performance that is significantly below the estimated level
Management Information SystemsManagement Information SystemsChapter 15 Understanding the Business Value of Systems and Chapter 15 Understanding the Business Value of Systems and
Managing Change Managing Change
Likely Consequences of Poor Project Management: Likely Consequences of Poor Project Management:
THE IMPORTANCE OF CHANGE MANAGEMENT IN INFORMATION SYSTEMS SUCCESS AND FAILURE
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Management Information SystemsManagement Information SystemsChapter 15 Understanding the Business Value of Systems and Chapter 15 Understanding the Business Value of Systems and
Managing Change Managing Change
Change Management Challenges for Business Process Change Management Challenges for Business Process Reengineering, Enterprise Applications, and Mergers and Reengineering, Enterprise Applications, and Mergers and
Acquisitions Acquisitions
THE IMPORTANCE OF CHANGE MANAGEMENT IN INFORMATION SYSTEMS SUCCESS AND FAILURE
Successful implementation includes addressing employees’ concerns about change
Resistance by key managers
Changing job functions, career paths, recruitment practices
Managing training
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Gain market share and expertise very quickly
Critical issues include the organizational characteristics of the merging companies and IT infrastructures
Management Information SystemsManagement Information SystemsChapter 15 Understanding the Business Value of Systems and Chapter 15 Understanding the Business Value of Systems and
Managing Change Managing Change
System Implications of Mergers and Acquisitions (M&As): System Implications of Mergers and Acquisitions (M&As):
THE IMPORTANCE OF CHANGE MANAGEMENT IN INFORMATION SYSTEMS SUCCESS AND FAILURE
As are major growth engines for businesses, enabling firms to
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Realistic costs of integration
Estimated benefits of economies in operation, scope, knowledge, and time
Problematic systems that require major investments to integrate
More than 70 percent of all M&As result in a decline in shareholder value
Management Information SystemsManagement Information SystemsChapter 15 Understanding the Business Value of Systems and Chapter 15 Understanding the Business Value of Systems and
Managing Change Managing Change
THE IMPORTANCE OF CHANGE MANAGEMENT IN INFORMATION SYSTEMS SUCCESS AND FAILURE
System Implementation of Mergers and Acquisitions (M&As): (Continued)