Managing and Using Information Systems - Introduction
description
Transcript of Managing and Using Information Systems - Introduction
Introduction
Managing and Using Information Systems: A Strategic Approach
by Keri Pearlson & Carol Saunders
Copyright 2006 John Wiley & Sons, Inc. 2
Introduction
• How effective can a business manager be when they are not involved in the IS decisions of their organizations?
• Should managers rely on experts to make these decisions?
• What risks is management making when it permits others to make critical IT decisions for the organization?
Copyright 2006 John Wiley & Sons, Inc. 3
Real World Examples
• Amazon.com has garnered a leadership position in the online world by leveraging their new business model. See www.amazon.com
• Expanded market offerings.• Increased customization and personalization• Smarter storage• Cost cutting.
• Google has become the leader in the search engine market through innovation, simplicity, and by adding new features.
• See www.google.com • Their mission statement can be found at
http://www.google.com/corporate/
Copyright 2006 John Wiley & Sons, Inc. 4
THE CASE FOR PARTICIPATING IN DECISIONS ABOUT
INFORMATION SYSTEMS
Copyright 2006 John Wiley & Sons, Inc. 5
Participating in Information Decisions
• Business managers “must” be involved in information decisions.
• Figure I.1 describes reasons why. IS …• is a critical resource.• enables change in how people work together.• is integrated with almost every aspect of business.• enables business opportunities and new strategies.• can be used to combat business challenges from
competitors.• Technology is ubiquitous.
Copyright 2006 John Wiley & Sons, Inc. 6
A Business View
• IT is a critical resource.• IT is over 50% of capital goods dollars
spent in the US.• Over $3,800 a year per capita.• High growth firms invest more in IT.
• Business managers decide resource allocation.
Copyright 2006 John Wiley & Sons, Inc. 7
People and Technology
• People and Technology work together.• Technology is critical.• Workers rely heavily on technology.
• Managers must know how to mesh both.• Examine long-term and short-term
consequences.• Manage change carefully.
• Technology changes rapidly.
Copyright 2006 John Wiley & Sons, Inc. 8
WHAT IF A MANAGER DOESN’T PARTICIPATE?
Copyright 2006 John Wiley & Sons, Inc. 9
Think About IT
• What risks does a manager take if they are NOT involved in IS decisions?
• If IS directly impacts profitability of a business then how can non-participation “hurt” the bottom-line?
• How does making the wrong decision impact business goals and organizational systems?
Copyright 2006 John Wiley & Sons, Inc. 10
Business Goals
• IS must support business goals.• It is not an end but a means to an end.• Support and strategic focus.
• Toys R Us IT debacle.• Must meet user needs.• Must be able to support business
transactions.
Copyright 2006 John Wiley & Sons, Inc. 11
Organizational Systems
• IT must support organizational systems• The people, work processes, and structure.
• Carefully consider the consequences of making an IS change.• How will this impact the way work is done?• Will the people accept this new technology?• What changes may need to be made in the
structure of the organization?
Copyright 2006 John Wiley & Sons, Inc. 12
WHAT SKILLS ARE NEEDED TO PARTICIPATE EFFECTIVELY IN
INFORMATION TECHNOLOGY DECISIONS?
Copyright 2006 John Wiley & Sons, Inc. 13
Basic Skills Needed
• Myth - technical expertise is not needed to participate.
• Managerial role and skills needed (Fig I.2):
• Visionary – creativity, curiosity, confidence, focus on business solutions, flexibility.
• Informational and Interpersonal – communication, information gathering, interpersonal skills.
• Structured – project management, analytical skills, organizational skills, planning skills.
Copyright 2006 John Wiley & Sons, Inc. 14
BASIC ASSUMPTIONS
• Managers must know about both using and managing information.
• Managers must be knowledgeable participants in IS decisions.• The general manager must have a basic
understanding of the business and technology issues related to IS.
• Technology of today is different from the technology of yesterday.
Copyright 2006 John Wiley & Sons, Inc. 15
• The role of the general manager and IS manager are distinct.• The GM must have a basic understanding of
IS to make decisions that may have significant implications for the business.
• The IS manager must have general business knowledge and a more in depth knowledge of IS to support its function.
Copyright 2006 John Wiley & Sons, Inc. 16
Management Assumptions
• Four key activities of the classic view of management (Fig I.3).• Planning• Organizing• Leading• Controlling
• Classic view is seen as more of a tactical approach to management.
Copyright 2006 John Wiley & Sons, Inc. 17
• The Mintzberg model describes management in behavioral terms (Fig I.4).• Interpersonal• Informational• Decisional
• Managers work in a chaotic environment.• Quality information is crucial.• More of a strategic view of management.
Mintzberg Model
Copyright 2006 John Wiley & Sons, Inc. 18
Business Assumptions• Internal Model
• Understanding of what constitutes a business.• Managers use to make sense of the chaotic
business environment in which they function.• Functional and process views of business.
Copyright 2006 John Wiley & Sons, Inc. 19
Functional View
• Functional View of the business• Based on the functions people perform.• Information flows vertically in the organization.• Sometimes information flows across the
organization.• Accounting, Operations, Marketing, Sales and
Support.• Executive Management receives the
information and distributes as need arrives. • See Figure I.5
Copyright 2006 John Wiley & Sons, Inc. 20
Figure I.5 Hierarchical View of the firm.
Copyright 2006 John Wiley & Sons, Inc. 21
Process View
• This model sees the business by the processes it performs to achieve its goals.
• Porter describes business in terms of its primary and support activities.• Primary – inbound and outbound logistics,
operations, marketing and sales.• Support – HR, technology, procurement,
infrastructure.• Activities are linked together to form a
chain – the value chain (fig I.6).
Copyright 2006 John Wiley & Sons, Inc. 22
Figure I.6 Process View of the Firm: The Value ChainFigure I.6 Process View of the Firm: The Value Chain
Copyright 2006 John Wiley & Sons, Inc. 23
Information Hierarchy
• Data, Information, and Knowledge are not interchangeable terms.• Data – set of specific objective facts or
observations (inventory contains 100 widgets).
• Information – data endowed with relevance and purpose (75% of widgets were purchased by customers in December) – see fig I.8.
• Knowledge - information that has been synthesized and contextualized to provide value.
Copyright 2006 John Wiley & Sons, Inc. 24
Top Management Middle Management
Supervisory & Lower-Level Management
Time Horizon Long: years Medium: weeks, months, years
Short: day to day
Level of Detail
Highly aggregated
Less accurate
More predicted
Summarized
Integrated
Often financial
Very detailed
Very accurate
Often nonfinancial
Orientation Primarily external Primarily internal with limited external
Internal
Decision Extremely judgmental
Uses creativity and analytic skills
Relatively judgmental
Heavy reliance on rules
Figure I.8 Information Characteristics across Hierarchical LevelsFigure I.8 Information Characteristics across Hierarchical Levels
Copyright 2006 John Wiley & Sons, Inc. 25
Data Information Knowledge
Definition Simple Observations of the sate of the world
Data endowed with relevance and purpose
Info from the human mind (includes reflection, etc)
Characteristic •Easily structured• “ captured• “ transferred•Often quantified•Mere facts
•Requires unit of analysis•Data that has been processed•Human mediation necessary
•Hard to structure•Difficult to capture on machines•Often tacit•Hard to transfer
Example Daily inventory reports of all inventory items sent to CEO of large manufacturing company
Daily inventory report of items below economic order quality levels sent to inventory manager (IM)
IM knows which items need to be reordered in light of related potential problems
Copyright 2006 John Wiley & Sons, Inc. 26
System Hierarchy• Information systems are comprised of
three main elements:• Technology• People• Process
• Infrastructure – everything that supports the flow of processing information• Hardware, software, data, and components.
• Architecture – strategy implicit in these components.
Copyright 2006 John Wiley & Sons, Inc. 27
Figure I.9 System Hierarchy
Management
Information Systems
People Technology Process
Copyright 2006 John Wiley & Sons, Inc. 28
SUMMARY
Copyright 2006 John Wiley & Sons, Inc. 29
Summary
• Business managers “must” be involved in information decisions.
• Technology is ubiquitous.• IT is a critical resource.• People and Technology work together.• Certain key skills are needed.• Data, Information, and Knowledge are
distinct.
Copyright 2006 John Wiley & Sons, Inc. 30
• Copyright 2006 John Wiley & Sons, Inc.
• All rights reserved. Reproduction or translation of this work beyond that named in Section 117 of the 1976 United States Copyright Act without the express written consent of the copyright owner is unlawful. Request for further information should be addressed to the Permissions Department, John Wiley & Sons, Inc. The purchaser may make back-up copies for his/her own use only and not for distribution or resale. The Publisher assumes no responsibility for errors, omissions, or damages, caused by the use of these programs or from the use of the information contained herein