Redesigning the Organization for a Rapidly Changing World...Rapidly Changing World
Chapter 11 Redesigning the Organization with Information System.
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Transcript of Chapter 11 Redesigning the Organization with Information System.
Chapter 11
Redesigning the Organization with Information System
Systems as Planned Organizational Change
More than new hardware and softwareWhen you design an information system you redesign the organizationInformation Systems plan A road map indicating the direction of
the systems development, the rationale, the management strategy, the implementation plan, and the budget.
The Information Systems Plan
Purpose of the PlanStrategic Business PlanCurrent SystemsNew DevelopmentsManagement StrategyImplementation PlanBudget Requirements
Enterprise Analysis (Business Systems Planning)
An analysis of organization-wide information requirements by looking at the organization in terms of organizational units, functions, processes, and data elements; helps identify the key entities and attributes in the organization’s data.
Strategic Analysis
Critical Success Factors (CSF’s) a small number of easily identifiable goals shaped by the industry, the firm, the manager, and the broader environment that are believed to ensure the success of the organization. Used to determine the information requirements of the organization.See page 337 for table of examples
The Spectrum of Organizational Change
Automation Using the computer to speed up the performance
of existing tasks
Rationalization The streamlining of SOPs, eliminating the obvious
bottlenecks, so that automation makes operating procedures more efficient
Reengineering The radical redesign of business processes,
combining steps to cut waste and eliminating repetitive paper-intensive tasks to improve costs
Paradigm Shifts
How IT can transform Organizations
Global Networks Transaction costs decline
Enterprise Networks Business processes are changed
Distributed Computing Mgmt costs are declined, hierarchy and
centralization decline.
Portable Computing Organizational costs decline due to lower real estate
costs
GUI’s Organizational costs are declined. Eliminates paper
costs
Reengineering and Work Flow Management
Work Flow Management The process of streamlining business
procedures so that documents can be moved easily and efficiently from one location to another.
Reengineering- page 343
Total Quality Management
Attributed to Charles Deming – originally rejected by US adopted by Japan – Macolm Baldridge AwardA concept that makes quality control a responsibility to be shared by all in the organization
How IS contribute to TQM
Simplifying the product or the production processBenchmarkingUse customer demands as a guide to improving products and servicesReduce cycle timeImprove quality and precision of the decisionIncrease the precision of production
Systems Development
Systems AnalysisSystems DesignProgrammingTestingConversionProduction and Maintainance
Systems Analysis
Feasibility Technical Economic Operational
Always three choices Do nothing Modify or enhance system Develop a new system
Information Systems requirements A detailed statement of the information needs that a
new system must satisfy identifies who needs what information and when, where, and how
System Design
Logical Design Lays out the components of the
information system and their relationship to each other as they would appear to users
Physical Design The process of translating the abstract
logical model into the specific technical design for the new system
The Role Of End Users
The nature and level differs per systemBlamed for many system failuresMore people more system ideasMore people more different methods/actions/etc
Testing
Unit Testing The process of testing each program separately in the
system
System Testing Tests the functioning of the IS as a whole to determine
if discrete modules will function together as planned
Acceptance Testing Provides the final certification that the system is ready
to be used in a production setting
Test Plan Prepared by the development team in conjunction
with the end users
Conversion Strategies
Parallel StrategyDirect Cut-Over StrategyPilot Study StrategyPhased Approach StrategyConversion PlanDocumentation
The Business Value of IS
A consistent IT structure can play an important role in org development, at the very least it can keep a firm alive.Benefits can go to the firm but most likely go to the customerLook at Capital Budgeting Models and Benefits Tangible and Intangible
Capital Budgeting Models
Payback Method A measure of the time required to pay back
the initial investment of the project (original investment/annual net cash inflow = # of years to pay back)
Accounting rate of return on an investment (ROI) Calculation of the rate of return from an
investment by adjusting cash inflows produced by the investment for depreciation. ((total benefits – total costs- depreciation)/Useful Life = Net Benefit)
Capital Budgeting Models
Present Value The value in current dollars of a
payment or steam of payments to be received in the future
Net Present Value The amount of money an investment is
worth, taking into account its costs, earnings, and the time value of money
Capital Budgeting Models
Cost Benefit Ration A method for calculating the returns from a
capital expenditure by dividing total benefits from total costs.
Profitability Index Use to compare the profitability of alternative
investments, it is calculated by dividing the present value of the total cash inflow by the initial cost of the investment
Internal Rate of Return (IRR) The rate of return or profit that a an investment
is expected to earn
Results of Capital Budgeting Models
Four Scenarios High Risk, High Benefits- Cautiously
Examine High Risk Low Benefits – Avoid Low Risk High Benefits- Identify and
Develop Low Risk Low Benefits- Routine
Projects
Portfolio Analysis
An analysis of the portfolio of potential applications within a firm to determine the risks and benefits and select alternatives for information systems Some Risks
Benefits may not be obtained Cost of implementation may exceed budget Implementation time frames might be exceeded Technical performance is less than expected The new system is incompatible with existing
software or hardware
Scoring Models
A quick method for deciding among alternative systems based on a system of rating for selected objectives
Conclusion
The goal is to develop a strategy to improve the firmShould you include many players and if so who and how do you decide?How do you balance all the different local and corporate interests?You also need to determine costs.Remember to look to see if you are changing the organization or just a simple task.