importance of management information systems

7/29/2019 Importance of Management Information systems

1/62

1. The Importance ofInformation Systems

Management


2/62

2

Overall Context

First by describing todaysorganizational and technicalenvironment of businesses

Second by describing a framework forviewing the work of the ISorganization; and

Third by describing an ISorganizations evolution from 1985 to

present


3/62

3

Introduction

(Finally) Information Technology (IT) -

computers and telecommunications - ishaving the kind of revolutionary,restructuring impact that has been

expected and promised for years Rapid advances in speed and capacity +

pervasiveness of Internet, wireless,

portable devices etc. = making majorchanges in the way we live and work

Go Back 5, 10, 15 years


4/62

4

Due to the growth and pervasiveness of

IT, organizations are operating in adifferent environment from just a fewyears ago

Themes of the present day emphasize:

1. Globalization The world seems to be getting

smaller

Backlash local needs Vs. standard Jobs to stay local IS executives need balancing act


5/62

5

2. E-enablement of businesses

Internet has become a hub forconducting business

Full interconnectivity is the goal!

3. Knowledge Sharing and KnowledgeManagement

Between peopleOut of peoples heads and intolasting things e.g. systems, policies

and procedures etc.Shift from info access to contentmanagement (searching, filtering,synthesizing, assimilating knowledgeresources)


6/62

6

Management of Information Systems

Process of managing IT

3 Major Trends that impact IT mngt1.Governance of IT a collaborative

effort from IS executives and all other

members of Senior Management2.Role of IS shifting from application

delivery to system integration and

infrastructure development3.Outsourcing total/selective

Developing and managing contracts

and relationships with ESPs


7/62

7

Historically, managing IT has been the

job of technical managers NOW = increasingly becoming an

important part of the responsibilities of:

Senior executives

Line managers

Employees at all levels of anorganization


8/62

8

The Key(Whats it all about?)

Technologyis configured intosystems that help manage

information to improveorganizational performance


9/62

9

A Little History U.S. passed from the industrial era to the

information era as early as 1957

The number of U.S. employees whosejobs were primarily to handleinformation surpassed the number of

industrial workers In the late 50s / 60s IT to supportinformation work, largely non-existent(except telephone)

Information work mostly done ingeneral offices without much supportfrom technology

People factories?


10/62

10

Percentage Aggregation of US Workforce


11/62

11

70s = it all started with many of thefoundations of IT

costs starting to fall

Typewriters, fax, smaller computers

1980s = number of US informationworkers surpassed the number in all

other sectors, combined (>50%)


12/62

12

Information Technology:1. Initially used to perform existing

information work more quickly and

efficiently

2. Then used to manage work better


13/62

13

3. Now, well into the 3rd stage oftechnology assimilation

IT makes pervasive changes in thestructure and operation of:

Work

Business practices

Organizations

Industries

The Global Economy (enabler?)


14/62

14

The Organizational Environment

The way IT is used depends on the

environment surrounding theorganization that uses it

Simultaneously, technological advances

affect the way IT is used

Tech drives change or merelysupports it ?

IT and its use, and management co-evolve influencing each other

Th E l O i i l E i


15/62

15

The External Organizational Environment

Widely discussed in public and technicalpress

IT allows information to move faster,thus increasing the speed at whichevents take place and the pace at

which individuals and organizationsrespond to events.

Turbulent business world shorterproduct cycles, mega-bankruptcies..

1. The Internet Economy

B2C, B2B etc.

IT is a major underpinning of the way

the old and new worlds interface


16/62

16

2. Global Marketplace

The entire world has become themarketplace merger mania

The Internet allows companies to workglobally

3 main operating arenas Asia/Pacific,

Americas, and EuropeGlobalization is a two way street

Internet allows small firms to have a global

reachBusiness environment is now global, butlocal tastes still matter

3 B i E t


17/62

17

3. Business EcosystemsWeb of relationships surrounding one or afew companies PC ecosystem (Wintel),

Internet, wireless communicationFollow biological rules more than industrialrules

4. DecapitalizationTangible items, such as capital, equipmentand buildings were the tenets of power inthe industrial age

Today = power of intangibles such asideas and knowledge

Managing talent = as important as e.g.managing finance


18/62

18

5. Faster Business Cycles Rely on IT

Accelerate time to market, reduce cycle time

6. Accountability and Transparency Rise and fall of dot-coms probably should have

been expected

Many business plans could not make $$$

Debacle in Telco and business shenanigans haveshaken investor confidence

Call for greater transparency of corporateoperations and greater accountability of

corporate officersIT will play a significant role in implementingthe ensuing regulations and fosteringtransparency

l k f


19/62

19

7. Rising Societal Risks of IT

IT has negatively affected millions ofpeople

Network shutdowns

Computer viruses

Identity theft

Email scams

Movement of white collar jobsoffshore

Led to increasing calls for Governmentregulation and for vendors andcorporations to take action

h l O l


20/62

20

The Internal Organizational Environment

The work environment is also changing, andthe art of managing people is undergoing

significant shifts1. From Supply-Push to Demand-Pull

Old

Companies did their best to figure outwhat customers wanted

Organized to build a supply of productsor services and then push them out toend customers on stores shelves, incatalogs etc.

N (I )


21/62

21

New (Internet)

Allows much closer and one-to-onecontact between customer and seller

Offer customers the components of aproduct/service then the customercreates their own version by pullingwhat they want

Mass customization reversebusiness processes to be customer-

facing

Collaboration and co-creation

2 S lf S i


22/62

22

2. Self- Service

ATMs = early example

1990s saw an increase in systems that let

consumers access corporate computersystems to:

Learn about products

Purchase productsInquire about orders

Communicate and do business with the

firme.g. FedEx parcel tracking leverages theWeb

3 R l Ti W ki ( t i )


23/62

23

3. Real-Time Working (enterprise)

Sales people have up-to-the-minuteinformation about customers

Knowing e.g. inventory and cash levels asthe are NOW not as they were a week ora month ago

Being able to reach someone when youneed them

Instant messaging?

4. Team-Based WorkingWorking together on one or more projects

Groupware

5 Anytime Anyplace Information Work


24/62

24

5. Anytime, Anyplace Information WorkConvergence of wireless and computing techs

6. Outsourcing and Strategic Alliances

To become more competitive,organizations are examining types of workthat should be done internally or externallyby others

Ranges from a simple contract for servicesto a long-term strategic alliance

The thinking is: We should focus on whatwe do best and outsource the other

functions to people who specialize in themNote = not new (especially in non-IT)

Extended enterprise

Also = some backlash


25/62

25

7. The Demise of HierarchyTraditional hierarchical structuregroups, several people performingthe same type of work, overseen by asupervisor

Division of labour, chain of commandand controlNo longer the most appropriate infactories or offices


26/62

26

Hierarchical structures cannot copewith rapid change

Communications up and down thechain of command takes too muchtime for todays environment

IT enables team-based organizationalstructures by facilitating rapid andfar-flung communication

Still has its place in manyorganizations

Self-managed groups manage

themselves better


27/62

27

Goals of the New Work Environment

To redefine the work environment

1. Leverage Knowledge Globally(McKinsey)

Tap tacit knowledge by fosteringsharing and supporting sharing through

technology

Note: driving force is culture!

Happens through organizational pull

(people needing help) rather thanorganizational push which overloads peoplewith information

Leveraging knowledge = raising aspirations


28/62

3 Work Electronically


29/62

29

3. Work ElectronicallyMarketplace moving to marketspace,

workplace is moving to workspace

Taking advantage of the Internet andnetworks in general = 3rd major goal ofenterprises today

Requires different organizing principles,

management tenets, compensationschemes, structure etc.

Changes how organizations interact withothers including customers

The microchip moved power withincompanies. Bandwidth moves power all theway to consumers

Will increase exponentially as bandwidth

capability increases and costs decrease


30/62

30

4. Handle Continuous and DiscontinuousChange

Innovate continually2 forms of changes

Continuous espoused by TQM

techniquesDiscontinuous espoused by

reengineering, e.g., fits and starts

Handle both for the products andservices


31/62

31

The Technology Environment

IT enables advances in organizational

performance.Hardware Trends

50s 60s + - Batch processing

predominant; on-line systems emergedlater

Mid 70s processing power began to

move out of the central site (at theinsistence of users!)

1980s: Advent of personal computers


32/62

32

Client-Server computing: Client

machine user interfaces with Serveron the network holding the data andapplications

Major current development = hand-held devices, wireless etc.

Further distribution beyond

organizational boundaries to suppliers,customers etc.

Software Trends


33/62

33

Software Trends1. In 1960s = Improve the productivity of in-house

programmers who created transaction processing

systems

Problem = memory $

2. Later, programming issues:

First = Modular and structured programmingtechniques

Then = Life cycle development methodologies and

software engineering Goal = Introduction of rigorous project

management techniques


34/62

34

3. Prototyping: quick development of a mock-up

4. Purchasing software became viable alternativeto in-house development

5. Paying attention to applications other than

transaction processing

Decision support systems (DSS), reportgeneration, database inquiry

6. End users develop their own systems


35/62

35

7. Push for open systems

Purchasers were tired of being locked in toproprietary software (or hardware)

8. 1990s trend towards Enterprise Resource Planning

(ERP) e.g. SAP, PeopleSoft DANGER : BEWARE

Expensive and troublesome, especially for

companies wanting to modify the ERP software tofit their unique processes

A fundamental organizational change!


36/62

36

9. Like hardware, software is migrating to be networkcentric.

Web front ends to empower employees rather thanreplacing legacy systems

Looming change = move to Web Servicespackages of code that each perform a specific

function and have a URL

- e.g FedEx parcel tracking, MacAfee's virusupdates

The significance of Web Services is that it movessoftware and programming to being truly networkcentric the network becomes the heart of thesystem, linking all Web Services

Th T h l E i t


37/62

37

The Technology Environmentcontd.

Data Trends

At first = File management

Organizational techniques for files thatserved individual applications

Then = Corporate databases

Serving several applications

Led to concept of establishing a dataadministration function

Data Trends contd


38/62

38

Data Trendscontd.

70s = focus on Technical solutions

Database management systems Dictionary/directory

Specification and format

Now = Data definitions: information aboutrelationships among systems, sources anduses of data, and time cycle requirements

First 20 years: techniques to manage data in

a centralized environment

Data Trends contd


39/62

39

Data Trends contd.

Late 70s / early 80s = 4th generation languages andPCs:

Employees directly access corporate data

Users demanded it!

Also = Distributing data from data resources to

information resourcesData management organizes internal facts into data

record format

Information management focuses on concepts

Contains a much richer universe of digitizedmedia including voice, graphics, animation andphotographs (digitized media)

Data Trends contd


40/62

40

Data Trends contd.

Managing this expanded array of informationresources requires new technologies

Data warehousing

Stores huge amounts of historical (notlive) data from systems such as retailers

Point-Of-Sale systemsData mining

Uses advanced statistical techniques to

explore data warehouses looking forpreviously unknown relationships in datae.g which customers are the mostprofitable


41/62

41

Knowledge management (intellectualcapital)

New The Holy Grail?

Web has broadened data to meancontent

Text, graphics, animation, maps,photos, video etc.

Now tightly controlled Vs. early

proliferation

Data Trends contd


42/62

42

Data Trends contd.

Two major data issues are now facing CIOs:

1. Security protecting data from those whoshould not see it

2. Privacy safeguarding the personal data ofemployees, customers etc.

Regulations such as Sarbanes-Oxley in theU.S. now require company officers to verifytheir financial data

- The processes that handle financial data areautomated = need to document and ensurethe accuracy of these processes


43/62

43

The Technology Environmentcontd. Communications Trends

Final core technology = Telecommunications. This area has (is?) experienced enormous change

and is now taking centre stage

Early use = online and time-sharing systems

Then = interest in both public and private (intra-company) data networks blossomed

Internet = changed everything!

Today the Internets protocol has become theworldwide standard for LANs and WANs

- Will also soon be the standard for voice

Communications Trends contd


44/62

44

Communications Trendscontd.

Telecom opened up new uses of IS so itbecame an integral component of IS

managementCommunications-based information

systems link organizations to their

suppliers and customersExplosion of wireless

2nd generation, instant messaging, Wi-Fi,3rd generation (3G)

Doesnt just enable mobility = changes howpeople communicate, how they live andhow they work

EXCITING TIMES!!!

The Mission of Information Systems


45/62

45

The Mission of Information Systems

Early days: paperwork factories to payemployees, bill customers, ship products etc.Objectives of information systems defined by

productivity measures Later = MIS era: produced reports formanagement by exception for all levels ofmanagement

Today = Improve the performance of people inorganizations through the use of informationtechnology

Improving organizational performance isaccomplished by the people and groups thatcomprise the organizationOne resource for this improvement is IT


46/62

A Simple Model


47/62

47

A Simple Model

In the early days of InformationSystems, the translationbetween IT and users was

performed almost entirely bysystems analysts

A Simple Model of


48/62

48

A Simple Model ofTechnology Use (v1)

Systems Professionals Bridging the


49/62

49

Systems Professionals Bridging theTechnology Gap

Over the last 50 years technology has becomeincreasingly complex and powerful

Users have become increasingly sophisticated

Information systems are now viewed asproducts and users have become customers

More specialization is required of systemsprofessionals to bridge this wider gap

System & Domain Specialists


50/62

50

System & Domain SpecialistsBridging The Technology Gap (v2)


51/62

U B id i Th G ( 3)


52/62

52

Users Bridging The Gap (v3)

h lk b h h l G ?


53/62

53

Why talk about the Technology Gap?

The main point of this discussion is that

technology is getting more complex,applications are becoming moresophisticated, and users are participating

more heavily in the development ofapplications

The net result is that management of the

process is becoming more complex anddifficult as its importance increases

A Better Model


54/62

54

A Better Model

Expanding the simple model gives us moreguidance into managerial principles and tasks

1. A set of technologies that represent the ITinfrastructure installed and managed by theIS department

2. A set of users who need to use IT toimprove their job performance

3. A delivery mechanism for developing ,delivering and installing applications

4. Executive leadership to manage the entireprocess of applying the technology toachieve organizational objectives and goals

A Framework for IS Management


55/62

55

A Framework for IS Management

1. The Technologies


56/62

56

1. The Technologies

Several forces contribute to the increasedimportance and complexity of IT:

1. Growth in capacity + reduction in cost & size

2. Merging of previously separate technologiesof computers, telephones/telecom/cable TV,

office equipment and consumer electronics3. Ability to store and handle multiple forms of

data

Information systems now fill major roles in

management reporting, problem solving andanalysis, office support, customer service andcommunications

2. The Users


57/62

57

2. The UsersDichotomy of Info Work

Dichotomy of Info Work


58/62

58

Dichotomy of Info Work

Procedure-based vs Knowledge- orgoal-based

Clerical vs Managerial work

The distinction is blurring !!

3. System Development and Delivery


59/62

59

3 y op a d y Systems development and delivery bridge the

gap between technology and users

Systems for procedure-based (clerical)activities differ from systems for knowledgebased information work (managerial)

Systems are built based on technologyresources. Three main categories (essentialtechnologies):1. Hardware and software2. Telecommunications3. Information resources

Management of these is called infrastructuremanagement

4 IS Management


60/62

60

4. IS Management

Chief Information Officer (CIO)

Must be high enough in the enterprise toinfluence organizational goals

Must have enough credibility to lead theharnessing of technology to pursue those

goals Must work with all the other CXOs

IT has become too important to be left toone individual

Executive team must work together togovern it and leverage it well

A Better Model - Summary


61/62

61

A Better Model Summary

This model has four major components:

1. The technology which provides theelectronic and information infrastructure

2. Information workers who use IT toaccomplish their work goals

3. System development and delivery whichbrings the technology and users together

4. The management of the IS function

Overall responsibility = to harness IT toimprove the performance of the peopleand the organization

A Final Thought


62/62

A Final Thought

It is not the strongest speciesthat survive,

nor the most intelligent,

but the ones responsive tochange

- Charles Darwin

importance of management information systems

Documents