CHAPER 2 ORGANIZATIONAL STRUCTURE AND...

CHAPTER 2 ORGANIZATIONS AND

INFORMATION TECHNOLOGY SUPPORT

Learning Objectives

• Discuss major information systems concepts such as architecture and infrastructure.

• Describe the hierarchical structure of organizations and the corresponding information systems.

• Define various information systems and their evolution, and categorize specific systems.

• Describe the support provided to different types of employees in an organization.

• Describe how information resources are managed.

Chapter Overview

• Information

Infrastructure

• Information

Architecture

• Traditional

Architectures

• New

Architectures

• Organizational

Structure

• Corresponding

Information

System

• Transaction

Processing Systems

• Management

Information

Systems

• Support

Systems

• Managers

• Knowledge

Workers

• Clerical

Staff

• Which resources

are managed by

whom?

• What is the role

of the information

systems department?

• Who runs the ISD

and to whom does

the department report?

• What are the

relationships between

ISD and end users?

Information Systems Infrastructure and Architecture

Organizations: Structure and Support

Evolution and Types of Information Systems

IT Support at Different Organizational Levels

Managing Information Technology in Organizations

Case : Burlington Coat Factory

• The Business Problem

Burlingion is the largest retailer of coats in the United States

sells clothes, linens, luggage, jewelry, baby furniture and accessories

faces extremely strong competition

wants to offer up to 60% off department store prices

needs information to respond to demand

needs to communicate and collaborate with both store mangers and suppliers quickly and effectively

Case (continued…)

• a corporate computer-based communication system

• networks to a main processor

• transfers sales data by satellite technology

• executes routine transactions on the headquarters’ computer

• feeds information from the corporate databases into spreadsheets or word

processors on desktop computers for end-user computing and decision

support

The Results

dramatic decrease in communication problems

steady increase in sales volume and profits

The Solution

Case (continued…)

• What have we learned from this case??

» several different information systems exist in one organization

» some of these systems may be completely independent, but most are interconnected

» information systems are connected by means of electronic networks

» the information system is composed of large and small computers and other hardware connected by different types of networks

» many information systems use client/server architecture

Characteristics of a networked corporate information system that are usually found in organizations

Information Systems Architecture

• Physical facilities, hardware, software, databases services, and management that support all computing resources in an organization

• Five major components of infrastructure • computer hardware • general-purpose software • networks and communication facilities • database • information management personnel

• Tells how specific computing resources are arranged, operated, and managed

Information Systems Architecture (continued …)

• Information Architecture

a high-level map or plan of the information requirements

a manner in which these requirements will be satisfied

a guide for current IT operations

a blueprint for future IT directions

meets the organization’s strategic business needs

must tie together the information requirements, the infrastructure, and the applications

similar to the conceptual planning of a house


• Traditional Architectures

mainframe environment » processing is done by a mainframe computer - a relatively large

computer built to handle large amounts of data, thousands of user terminals, and millions of transactions

» modern versions of this architecture : personal computers (PCs) and network computing (NC)

PC environment » PCs form the hardware architecture

distributed environment » divides the processing work between two or more computers

» the participating computers can be all mainframe, all PCs, or (usually) a combination of the two


• New Architectures

client/server architecture » several computers share resources and are able to

communicate with many other computers

» a client - a computer such as a PC attached to the network, which is used to access shared network resources

» a server - a machine that is attached to the same network and provides clients with these services

» purpose : optimize the use of computer resources


• Enterprisewide Architectures

access to data, applications, services, and real-time flows of data in different LANs or databases

use client/server architecture to create a cohesive, flexible, and powerful computing environment

provide total integration of departmental and corporate IS resources

increase the availability of information and thereby maximize the value of an organization


• Internet-based Architectures

based on the concepts of client/server architecture and enterprisewide computing

the Internet is the basis for a network connection from the outside world to the company, as well as with the organization’s web site

organization’s internal private Internet (intranet) - useful for distributing information throughout the organization

The network organization: How a company uses the Internet, intranet and extranet

Head Quarter

Retail Stores

Employees

Manufacturing

Toys Inc

Corporate

Intranet

EDI, VAN

Non-Company

Manufacturers

Customers

Sales peoples

and other

mobile

employees

Distributors

Market

Non-Company

Retailers

Suppliers

(Purchasing)

Liquidators

contractors

Toy Industry

Extranet

Other

Extranets

Banks and other

business partners

Professional

Associations, large

suppliers, competitors Corporate

Extranet

Internet Public Travel

agency

Small customers Small

retailers Small vendors

Government

Organizations : Structure and IT Support

Organizations

the nature of organizations determines their activities, the information support they need, and the type of information systems they use

profit-making business versus not-for-profit organizations exist

manufacture goods versus services are delivered

can be located in one place or in several places, some are global or multinational organizations

Organizations : Structure

Organizational Structure

departmental functional structure

» specialize in the delivery of a certain function

» typical departments in an organization:

» Accounting

» Finance

» Marketing and Sales

» Production or Operations Management (POM)

» Human Resources Management (HRM)

» Information Systems and Technology

Organizations : Structure

Hierarchical Structure

Headquarters

Division A Division B Overseas

Division

Plant C Plant D Plant E Plant F

POM Accounting Marketing Finance HRM

Administration

Services

(legal, etc.)

Organizations : IT Support

The Corresponding Information Systems

Departmental Information Systems

Plant Information Systems

Divisional Information Systems

Enterprisewide Information Systems

Interorganizational Information Systems (IOS)

Global Information System for an International or Multinational Corporation

Types of Information Systems

organizations perform routine, repetitive tasks

a TPS supports the monitoring, collection, storage,

processing, and dissemination of the organization’s

basic business transactions

frequently, several transaction processing systems

exist in one company

today’s transaction processing systems are much

more sophisticated and complex

Transaction Processing Systems

Types of Information Systems (continued …)

provides periodic reports

generates weekly and monthly summaries by product,

customer, or salesperson

initially, MIS had an historical orientation

today, MIS reports may include summary reports, for the

current period or for any number of previous periods -

used for monitoring, planning, and control

functional management information systems (MIS) » access, organize, summarize, and display information for

supporting routine decision making in the functional areas

» geared toward middle managers

Management Information Systems (MIS)


• Major Outputs of a Functional Management Information System

OUTPUT DESCRIPTION Statistical summaries Summaries of raw data such as daily production,

and weekly and monthly usage of electricity. Exception reports Highlights of data items that are larger or

smaller than designated levels. Periodic reports Statistical summaries and exception reports

provided at scheduled, regular periods. Ad hoc reports Special, unscheduled reports provided on

demand. Comparative analysis Performance comparison to that of competitors,

past performance, or industry standards. Projections Advance estimates of trends in future sales,

cash flows, market share, etc.


office automation systems (OAS) » word processing systems

computer-aided design and manufacturing (CAD/CAM)

decision support systems (DSS)

end-user computing

executive information systems (EIS)

group support systems (GSS)

Support Systems

Intelligent Systems

expert systems (ES)

artificial neural network (ANN)

Types of Information Systems (continued

…)

various computerized systems are being integrated

to increase their functionalities

one popular form of integrated system is enterprise

resources planning (ERP)

ERP plans and manages all of an organization’s

resources and their use, including contacts with

business partners

Integrating Systems

The Evolution Computer Based Information Systems

1940 Scientific, military applications

1950 Routine business applications, TPS

1960 MIS, office automation

1980 Client/server executive information system,

PC’s, AI, Groupware

1970 DSS, LANs

1990 Integration, intelligent systems

the Web, intranets, extranets, ERP software

2000 Internet, Electronic commerce, Smart systems

IT Support at Different Organizational Levels

Information Infrastructure and TPS

The information systems support of people in organizations

Office Automation and Communication Systems Clerical Staff

Operation Systems Line Managers, Operators

Managerial Systems Middle Managers

Staff Support Knowledge Workers, Professionals

Strategic

Systems Top Managers

Knowledge Workers • People who create information and knowledge and integrate it into the

business • Engineers, financial and marketing analysts, production planners, lawyers,

and accountants • Responsible for finding or developing new knowledge for the organization

and integrating it with existing knowledge • Act as advisors and consultants to the members of the organization • Act as change agents by introducing new procedures, technologies, or

processes • 60 to 80 percent of all workers are knowledge workers • Supported by a large variety of information systems from Internet search

engines to expert systems, to computer-aided design, and by knowledge bases

Clerical Staff

• Support managers at all levels • Data workers - use, manipulate, or disseminate

information • bookkeepers, secretaries who work with word processors, electronic

file clerks, and insurance claim processors

• Supported by office automation and groupware, including document management, workflow, e-mail, and other personal productivity software

• IT resources are scattered throughout the organization

• Information systems have enormous strategic value

• Some IT resources change frequently. It may be rather difficult to manage IT resources

• It is essential to manage information systems properly

• The responsibility for the management of information resources is divided between a usually centralized information systems department (ISD) and the end users

• Which resources are managed by whom? • Generally speaking, ISD is responsible for corporate-level and shared

resources, and the end users are responsible for departmental resources

Managing IT Resources

• What is the role of the information systems department? • Traditional major IS functions:

• Managing systems development and systems project management • Managing computer operations, including the computer center • Staffing, training, and developing IS skills • Providing technical services

Managing IT Resources (continued …)

Managing IT Resources (continued …)

• What is the role of the information systems department? (continued) • New (additional) major IS functions:

• Initiating and designing specific strategic information systems • Infrastructure planning, development, and control • Incorporating the Internet and electronic commerce into the business • Managing system integration including the Internet, intranets, and extranets • Educating the non-IS managers about IT • Educating the IS staff about the business • Supporting end-user computing • Partnering with the executive level that runs the business • Actively participating in business processes reengineering • Proactively using business and technical knowledge to the line with innovative ideas

about IT • Creating business alliances with vendors and IS departments in other organizations

• Key MIS issues in two recent time periods

Managing Information Technology

Key Issues, 1994/1995 Key Issues, 1997

1. Building a responsive IT

infrastructure

1. Improving productivity

2. Facilitating and managing

business process redesign

2. Reducing costs

3. Developing and managing

distributed systems

3. Improving decision

making

4. Developing and implementing

an information architecture

4. Enhancing customer

relationships

5. Planning and managing

communication networks

5. Developing new

strategic applications

• Who Runs the ISD and to whom does ISD Report?

Managing Information Technology (continued …)

run by MIS Director, Manager of Computing Services, Manager of

Information Technology, or Chief Information Officer (CIO)

reports to

» Chief Executive officer

» Functional Vice President

» Senior vice president

» Chief knowledge officer (CKO) - the director assigned to capture and

make effective use of IT knowledge for an organization

The executive committee provides the top-level oversight for the

organization’s information resources. It guides the IS steering

committee, which is usually chaired by the CIO.

• What are the relationships between the ISD and end users?

Managing Information Technology (continued …)

A steering committee that represents all end users and the ISD. This committee sets IT policies, decides on priorities, and coordinates IS projects.

Joint ISD/end-user project teams for planning, budgeting, applications development, and maintenance

ISD representation on the top corporate executive committee Service agreements that define computing responsibilities and provide a

framework for services rendered by the ISD to end users Technical and administrative support (including training) for end users A conflict resolution unit established by the ISD to handle end-user

complaints quickly and resolve conflicts as soon as possible An information center that acts as help center to end users regarding

purchase, operations, and maintenance of hardware and software

What’s in IT for Me?

• For Accounting • Many of the transactions handled in a TPS are data that the accounting

department records and tracks

• For Finance • Financial departments often use specialized DSS for forecasting and portfolio

management

• For Marketing • Marketing uses such IT-related concepts as customer databases, marketing

decision making, sales automation, and customer relationship management (CRM)

What’s in IT for Me? (continued …)

• For Production/Operations Management • Organizations are competing on price, quality, time (speed), and customer

service which are enhanced and supported by IT

• For Human Resources Management • Intranets help to disseminate relevant information throughout the organization.

Internets are used for recruiting

• For MIS • IS management function continues to grow in strategic value

• For Non-Business • In all organizations, IT provides essential support to all functional areas`

CHAPER 2 ORGANIZATIONAL STRUCTURE AND...

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