MIS 503Intro - Fall 2006 - Lecture

8/9/2019 MIS 503Intro - Fall 2006 - Lecture

http://slidepdf.com/reader/full/mis-503intro-fall-2006-lecture 1/52

Management Information

Systems

MIS 503

MBA Program



What is MIS?



MIS: An Amalgamation of MIS: An Amalgamation of

DisciplinesDisciplines

PsychologyComputer

Science

Management

Science

Sociology

Business Information

Science



Major MIS Constituents

Organization Technology

People



A Framework for Managing Information Technology

Vision for the Organizationand Information Technology

IT and Organization Structure

Corporate Strategic Plan

Alliances &Partnerships

Ongoing ITOperations

Integration ofIT and Decision

Making

Strategy

IT Initiatives IT Infrastructure



Today¶s IT Landscape

How IT flattened the competitive

landscape«



10 Flatteners

Fall of the Berlin Wall

Netscape IPO

Work flow software

Open-sourcing

Outsourcing

Offshoring

Supply-chaining

Insourcing

In-forming

Wireless



This NEW Paradigm AffectsOrganizations in Myriad Ways

New Business Environment

±O

pen, Competitive, Dynamic Marketplace New Enterprise

± Open, Networked, Information-based Organization

New Geopolitical Order ± Open, Volatile, Multipolar World

New Technology ± New Goals of IT

± Open, User-centered, Networked Computing

New Competition ± Your competition is no longer only the firm across the street



Business Environment Changes Creating

New Challenges and Opportunities Worker Productivity

Quality Emphasis

Responsiveness to the Marketplace

Globalization

Outsourcing

Communication Fluidity and Ubiquity Offshoring

Partnering

Social and Environmental Responsibility



The New Enterprise

Hierarchical Structure is out

Problems with Hierarchies

± Hierarchies seek to separate governed from governors

± Middle managers act as a communication channel between

top and bottom

Information Technology has supplanted µhuman

relays¶, which has resulted in «

Flatter, Leaner Organizations



Hierarchical vs.

Open-Networked OrganizationsClosed Hierarchy Open Networked

Organization

Structure Hierarchical NetworkedScope Internal/Closed External/Open

Resource Focus Capital Human/Information

State Static/Stable Dynamic/Changing

Personnel/focus Managers Professionals

Key Drivers Reward and Punishment Commitment

Direction Management Commands Self-Management

Basis of Action Control Empowerment to actIndividual Motivation Satisfy Supervisors Achieve Team Goals

Learning Specific Skills Broader Competencies

Basis for Compensation Position in Hierarchy Accomplishment, Competence

Relationships Competitive (My Turf) Cooperative (Our Challenge)

Employee Attitude Detachment (Its a job) Identification (Its my company)

Dominant Requirements Sound Management Leadership



ExternalIndividuals Workgroups Organizations Organizations

Managerial tasks:

Structuring the organization

Formulating strategy

Managing and controlling

Forming interorganizations relations

Reporting

Designing products and servicesManaging and designing

business processes

Changing technology:

Transaction processing

Decision support

Expert systems

Group decision support system

Executive information systemsPersonal support systems

Groupware

Interorganizational systems

Communications

Networking

Database

Thin Clients

A Framework for IT: An IT Value Chain



Three Types of

Information Systems

Validate Update Output

Report

WorkstationInput

Database

1 Transactions System (Operational Systems)

User



Workstation

2 Decision System

Model BaseDatabase

Retrieval

System

Analysis andPresentation

Model

Management

User



Computer

Workstation

Mailboxes

3 Communication System

Workstation

CommunicationsLink

User 1 User 2



IT-Enabled Organizational Forms

Verifone,Blueberry Pancake

Calyx and Corolla,Snap Together

Oticon, Spaghetti

Mrs. Fields, Hierarchical and Flat

Frito-Lay, Hybrid



Three Shifts in the

Application of IT

From Personal to Work-Group Computing

From Systems Islands to Integrated Systems

± Management and control of physical assets and facilities

± Financial management and control systems

±

Tech

nologies to manage and supporth

uman resources From Internal to Inter-organizational Computing



Enabling TechnologyEnabling Technology The PromiseThe Promise The ChangeThe Change

HighHigh--PerformancePerformance

TeamTeamWorkgroupWorkgroup

ComputingComputing

BusinessBusiness

ProcessProcess

RedesignRedesign



IntegratedIntegrated

SystemsSystems


OrganizationOrganization


TeamTeam


Workgroup

Computing

Organizational

Transformation

Business

Process

Redesign



WorkgroupWorkgroup

ComputingComputing


SystemsSystems

InterenterpriseInterenterprise

ComputingComputingExtendedExtended

EnterpriseEnterprise


OrganizationOrganization


TeamTeam

RecastingRecasting

ExternalExternal

RelationshipsRelationships

OrganizationalOrganizational

TransformationTransformation

BusinessBusiness

ProcessProcess

RedesignRedesign




Summary of Work-GroupComputing Shifts

Organizational HierarchyOrganizational Hierarchy Business Team OrganizationBusiness Team Organization

Personal ComputingPersonal Computing Work Work--Group ComputingGroup Computing

Emphasis on the individualEmphasis on the individual Emphasis on the groupEmphasis on the group

Designing TechnologyDesigning Technology Redesigning the entire systemRedesigning the entire system

TaylorismTaylorism The new work reengineeringThe new work reengineering

Technical UsersTechnical Users Direct support of all personnelDirect support of all personnel

Installing TechnologyInstalling Technology Leadership for evolving work Leadership for evolving work



Islands of Technology Technology is implemented to manage

three resources:

± Physical Assets

± Human Resources

± Financial Assets

What if they are not speaking to oneanother???



Problems With Enterprises that

aren¶t speaking« Redundancy of Functionality

Miscommunications due to lack of integration Poor quality customer service

Operational inefficiencies due to

miscommunications and redundant processing

Internal Focus



Problems With Enterprises that

aren¶t speaking« Systems are perpetuated in order to treat

operational symptoms without recognizingfundamental problems

Organizational conflict and µturf¶ battles erupt due

to the historical creation of data processing

developing financial solutions, engineeringdeveloping physical assets, and administrative

groups to manage human resources



What happens when an enterprise

shifts to integration

Technology ApplicationsTechnology Applications Organizational RestructuringOrganizational Restructuring

System IslandsSystem Islands Integrated SystemsIntegrated Systems

Separate SystemsSeparate Systems Integrated EnvironmentsIntegrated Environments

SingleSingle--form Systemsform Systems Integrated data, voice, & imageIntegrated data, voice, & image

Cost ReductionCost Reduction Enterprise EffectivenessEnterprise Effectiveness



What happens when an enterprise

shifts to integration

Value ChainValue Chain Value Network Value Network

Simple Market CombatSimple Market Combat Competition via CooperationCompetition via Cooperation

Manual CommunicationsManual Communications Electronic CommunicationElectronic Communication

Enterprise TechnologyEnterprise Technology Interorganizational ComputingInterorganizational Computing

Purchaser of InformationPurchaser of Information Information Purchaser/Vendor Information Purchaser/Vendor



Determining IT

Value

Models and Implications



Page 598

INFORMATION TECHNOLOGYMANAGEMENT S YSTEM

ISSUESMeasuring Benefits

No simple way to measure value

added benefits of IT

Can track IS performance measures

over time



What is Value?

The most common meaning of value is monetary

worth It is difficult to determine the value of IT

investments because such value can come from

± traditional (measurable) monetary returns

± indirect returns that may be hard to measure ± prevention of negative return from not investing in IT

(such as loss of market share)



But Value is not always easy to

measure«

It¶shard to measure directly

In the short term, benefits may not be realized

Benefits may happen after development costs

occur

No relationship to benefits included in measures

This has led to«



Page 598

INFORMATION TECHNOLOGYMANAGEMENT SYSTEM ISSUES

A common way to assign value (i.e.,

allocate costs) is using chargeback systems

IS chargeback process ± places control of IS spending

with business managers, and is used to better understand

true costs



5. Designing an Equitable Financing System

Page 598


Why use a chargeback system?

± Assign costs to those who consume

± Control wasteful use of IT resources

± Overcome belief that IT costs unnecessarily high ± Provide incentives using subsidy

± Change IS to be more business driven

± Encourage managers to be knowledgeable consumers



Page 598

INFORMATION TECHNOLOGYMANAGEMENT SYSTEMISSUES

Typical measures used to track IT costs:

± Total IT budget as percentage of total organization

revenues or income

± Total IT budget as percentage of total organization budget ± IS personnel costs as percentage of total organization

professional personnel salaries and wages

± Ratio of hardware and software costs to IS personnel costs

± Costs for IT hardware and software per managerial or

knowledge worker



IT Investment Equation

P(Success/Return) = P(Return on Investment Type) x P(Conversion Success)P(Success/Return) = P(Return on Investment Type) x P(Conversion Success)



Examples of IT Investment Equation

Budgetingsystem

0.5 1.0 0.5

EDI/JIT System 0.95 0.75 0.71

Infrastructure Network

0.5 0.7 0.35

Package

Tracking System

0.2 1.0 0.2

Groupware 0.9 0.8 0.72

Web Order Entry 0.9 0.7 0.63

Web HomePages

0 1.0 0

Type of Type of

InvestmentInvestment

Estimate of ReturnEstimate of Return

Probability Based onProbability Based on

Type of ProjectType of Project

Estimate of Estimate of

Probability of Probability of

SuccessfulSuccessful

ConversionConversion

OverallOverall

Probability of Probability of

a Return: thea Return: the

SR IndexSR Index



Stock Options and IT Projects Call i a

Stock

Real Option on IT

ProjectUnder lying Asset Co on stock on hich

option is purchased

An I syste that ill be

developed in the future

Current alue Current stock pr ice xpected of retur ns

fro I pro ject

olatility tock pr ice f luctuations in

the arket

Uncer tainty (var iance) in

expected cash f lo fro

the I pro ject

xercise r ice r ice in the option at

hich holder ay buyshares hen exercising

the option

Invest ent required in I

pro ject

xercise ate ate on the option hen it

can be exercised

ate for developing the I

pro ject

Lucas,



The Productivity Paradox Organizational IT investments have not

shown a significant impact on a variety of

productivity statistics Possible explanations are:

± Results of IT spending occur locally and cannot be

expected to show up in national statistics

± Many firms may yeth

ave to undergo significantrestructuring or cost cutting for the benefits of IT to

become evident

± The measurements showing the lack of such a

relationship may be flawed



Barriers to Estimating IT Value

Moore¶s Law

Evolving Organizational Use of Computing

Management¶s Aversion to IT

Pace of Change in Business is

Exacerbating our ability to accurately valueIT



Three Types of IT Measurement

Metrics to Manage IT Internally

± Network uptime

Metrics for Business Unit Managers

± Detailed IT Usage Report

Metrics for Senior Managers

± Balanced Scorecard



IT Measurement Methods Applied Information Economics

± Scientific and Mathematical method

± www.hubbardresearch.com

Balanced Scorecard ± Traditional financial measures with KPIs, customer perspectives and org growth, and learning

and innovation

± www.bscol.com

Economic Value Added ± EVA = Net Operating Profit (after tax) - [ Capital x Cost of Capital ]

± www.sternsteward.com

Economic Value Sourced ± Incorporates risk and time into valuation equation

± www.metagroup.com

Portfolio Management ± www.metricnet.com, www.metagroup.com

Real Option Valuation (ROV) ± Incorporates calculations for corporate µflexibility¶ - Black & Scholes Model



IT value comes in many forms



Contributions of IT New ways to design organizations and new

organization structures

New relationships between customers and

suppliers

Opportunities for electronic commerce

Efficiencies through EDI Changed basis of competition and industry

structure

Groupware



Contributions of IT

Knowledge capture and accessibility

Increased productivity and flexibility of

knowledge workers

Electronic alternatives for

communications and supervision Improved opportunities of competition

among nations



So, if you can find value, how do

you mange IT?



The Role of the Manager Management and not technology determines return

on IT investments

± Successful organizations have strong IT leadership

Key management decisions related to IT ± Strategy

± Value of IT

± Investing in infrastructure

± Deciding on applications

± The role of knowledge

± E-business

± Options for service

± Change management

± Managing value nets



MANAGING THE ASSETS IN ANIS ORGANIZATON

Page 584-585Figure 15.1 Selected IS Management Positions (1 of 3)

Possible IS Management Positions



Senior IS Management Issues: Improving data and IT planning, especially linking IS to the business

Gaining business value through IT

Facilitating organizational learning about and through IT

Refining the IS unit¶s role and position

Guiding systems development by business managers

Managing organizational data as an asset

Measuring IS effectiveness

Integrating information technologies

Developing systems personnel

2. Selecting Effective IS Leadership

Page 594-595




IS steering committee or advisory board used to: Ensure frequent interaction

Set priorities

Ch

eck progress Allocate scarce resources

Communicate concerns

Provide education

Develop shared responsibility

3. Creating an Active Partnership with Business Managers

Page 595




Questions?

MIS 503Intro - Fall 2006 - Lecture

Documents

Transcript of MIS 503Intro - Fall 2006 - Lecture