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Summaries Information Systems Management 1-7 week

Information Systems Management (Rijksuniversiteit Groningen)

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Information Systems Management

Summary Final 04/11/2014 (International Business, 2 nd year, RUG)

Week 1: L1 + Chapters 4 & 11 + chapter 5(p148-163, p183-185&p192)

What is an information system?
Company strategy & information system strategy lead to >>>>>>>>>
Three ways IT alters employee life
1. Enabling new ways to do traditional work
2. Creating new types of work (knowledge/communication managers)
3. Supporting new ways to manage talent

Telecommuting (teleworking) & virtual teams

Virtual team: team that works independently to achieve common goals using IT communication.
Has a lifecycle: Preparation>Launch>Performance management>Team development>Disbanding 4.6
Properties: Shift to knowledge-based work, change demographics/lifestyle (flexibility), new
technologies, constant connectivity & reduced costs (no need for real estate energy/gasoline)
Advantages: Reduces stress, increased (geographic) flexibility and higher productivity, encourage
Challenges: Overcome communication & monitoring difficulties, harder to ensure security, provide
with sufficient technology and merge different organizational cultures or cultural diversity.

Change & Resistance

If employees do not fully understand or are not prepared, they may resist:
- Denying that the system is up and running.
- Sabotaging the system by distorting or altering inputs.
- Convincing themselves and others that the new system will not change the status quo.
- Refusing to use the new system when its usage is voluntary.
John Kotters model on Lewins change model when bringing change, keeping his 8 steps in mind &
- Inform workers why the change is being made prior to the change happening.
- Keep reinforcing the change & reward employees who have successfully adopted to it.

a. Unfreezing
Establish sense of urgency
Select team to lead the change
Develop vision + strategy
Communication strategy

b. Changing
5. Encourage risk-taking & problem-solving
6. Generate short-term wins
7. Consolidate gains & produce more change

c. Refreezing
8. Anchor change in culture

Technology Acceptance Model

External variables that ease working with IT:
Training, documentation and user support consultants,
alongside with employee participation.

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Knowledge & Business Intelligence

Explicit Knowledge: Can be articulated, codified & transferred with relative ease.
Tacit Knowledge: The type of knowledge that individuals possess but find difficult to articulate
Business intelligence (BI): is a set of technologies and processes that use data to understand and
analyse business performance. Create a more structured approach to decision making & analyses
information collected in company databases, extracting knowledge from data.

Provides dashboards (graphical displays) and reports to assist managers in monitoring

performance, and is useful for strategic, tactical and operational decisions.
BI 2.0 (or collaborative BI): more proactive, real-time, provides visualization.

Business analytics: Use of quantitative and predictive models as well as fact-based management to
drive decisions. (Davenport & Harris)

Knowledge conversion strategies: (Nonaka) conversing tacit and explicit knowledge.


Tacit > Tacit = SOCIALIZATION, experience sharing & talking

Tacit > Explicit = EXTERNALIZATION, capturing tacit knowledge through metaphors/models
Explicit > Explicit = COMBINATION, combine explicit knowledge through exchange/synthesis
Explicit > Tacit = INTERNALIZATION, learn by doing and gain technical know-how

Knowledge management processes:

Knowledge generation: Activities that discover new knowledge (to individual/firm/discipline)
Knowledge capture: Processes of scanning/organizing/packaging knowledge after its generation.
Knowledge codification: The representation of knowledge for easy accessing and transferring.
Knowledge transfer: Transmitting knowledge & its absorption from one person or group to another.

Components of BI
Data warehouse: collects data, has multiple resources. Large in size/scope, designed for analytics.
Data mart: small-scale version of data warehouse, smaller in scope, focuses on specific audience.
>> Data mining: Automatically discovering non-obvious relationships in large databases. (Sequences.
Forecasting, Classifications & Associations)

Competitive Advantage of BI

Big data, techniques/technologies that make it economical to deal with very large datasets
at the extreme end of the scale. Desirable because of trends/analytics that can be extracted.
Social IT, supplies unique customer intelligence
What employees know and how they apply that knowledge to business problems.

Cloud computing is the delivery of computing as a service rather than a product, whereby shared
resources, software, and information are provided to computers and other devices as a utility over a
network (typically the internet). Types of clouds are:

Infrastructure as a Service: Servers, storage and Bandwidth (tech companies)

Platform as a Service: for developing apps and software that integrates with existing apps
Software as a Service: Apps that reside on cloud rather than on users hard drive/datacenter
Private cloud?

Intellectual capital is knowledge that has been identified, captured, and leveraged to produce
higher-value goods or services or some other competitive advantage for the firm.

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The Digital Millennium Copyright Act (DCMA) makes it a crime to circumvent copy protection.
The Digital Tech Corps Act of 2002 bans employees from revealing trade secrets during their lifetime.

Data, Information & Knowledge

Increasing contribution & greater value: data<information<knowledge
Data are specific, objective facts or observations.
Information is data endowed with relevance and purpose.
Knowledge is valuable information from the human mind, contextual information mixed with
experiences, rules & values.
There are many similar products and uses of comparable technologies. Davenport and Harris suggest
companies that successfully compete using their business analytics skills have five capabilities:
Hard to duplicate, Uniqueness, Adaptability, Better than the competition & Renewability.

Week 2: Lecture 2 + chapter 1/2/7

Destructive competition: One companys gain comes at the expense of others but there are few
true winners > pursue a single best way to compete > Competition is zero sum
Strategic competition expands the market while increasing overall customer satisfaction > pursue
distinctive way of competing > competition is positive sum
Buyer value (willingness to pay) depends on:
Increasing end user satisfaction;
Lowering the buyers overall cost of doing business;
Allowing the buyer to enhance (non-price) value with its customers.
Sources of Tradeoffs
1. Incompatible product attributes or features (Or unnecessary complexity of too many features)
2. Differences in the best configuration of activities
3. Inconsistencies in image or reputation
4. Limits on internal coordination, measurement, motivation, and control.
Orders of Fit of activities:
1. First order fit: simple consistency between activities. (ZARA: Fashionable items & moderate prices)
2. Second order fit: re-enforcing activities. (ZARA: production speed, Locations.)
3. Third order fit: optimization of efforts. (ZARA: Take full advantage of Warehousing, Logistics, and
Trend Scouting through increasing scope.)

Information processes & resources

IS strategy from the 1960s to the 1990s was driven by internal organizational needs. In the 2010 era
IS strategy was driven by social IT platforms and new capabilities (customer relation)
Information Resources: the available data, technology, people, and processes available to perform
business processes and tasks. Consists of:
- IT assets: IS infrastructure, Information repository
- IT capabilities: Technical skills, IT management skills & Relationship skills.

ADVANTAGES of information resources (IR)


Value is nowadays derived from plentitude instead of information scarcity.

Network effects: value of a network to a person or organization, increases when others join.

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IR appropriation: where a resources value lies and how it can be improved in a firms favor.
IR resource distribution across firms: early adopters create competitive advantage.
Mobility of IR: relies on individual skill, risky, develop unique knowledge-sharing processes.

Porter: Value Proposition


Differentiate value proposition;

Differentiate value chain;
Fit of activities;

Information resource strategy

First view Porters five competitive forces model
1. Threat of new entrants
2. Bargaining power of buyers
3. Bargaining power of suppliers
4. Threat of substitutes
5. Industry Competitors
Second view Porters value chain
Value chain model addresses the activities that create, deliver, and support a companys product or
service. (Primary Activities & Support activities)
Third view IS resources needed to gain and sustain competitive advantage
A resource is considered valuable when it enables the firm to become more efficient or effective.
Continuous innovation is key to sustain the competitive advantage the resource creates.

Strategic Alliances
An interorganisational relationship that affords one or more companies a new strategic advantage.
Co-opetition: companies cooperate + compete at the same time with companies in their value net.
Complementor is a company whose product or service is used in conjunction with a particular
product or service to make a more useful set for the customer.

Cost recovery of information systems

Capturing costs/benefits of IT are complicated, mostly indirect and fixed.
Costs are relatively easy to identify and quantify:
- Costs of purchase (hardware/software)
- Costs of implementation, ownership and change (maintenance/upgrades/support costs)
Benefits are qualitative, vague and uncertain:
- Tangible benefits (cost savings/quality improvements/revenue increases)
- Intangible benefits (Improved communication/awareness/customer satisfaction/flexibility)

Problems of formalrational evaluation

Relies on accurate identification and valuation of costs and benefits rarely simple with IS.
Many reasons for failures in evaluating IS projects:
Over-emphasis on purchase costs, and ignorance of other costs
Over-ambitious rates of return
Under-estimation of implementation time and costs
Poor communication with users and customers

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Information Systems Strategy Triangle

1. Business Strategy
Porters Competitive Advantage Model
How businesses can build a sustainable competitive advantage three primary strategies:
- Cost Leadership, lowest cost producer
- Differentiation, product is unique
- Focus, either on costs or differentiation
Model was developed when the rate of change in any industry was relatively slow and manageable.

Hypercompetition Model (dynamic)

Firms dynamically adjust their organizational resources: speed, agility, aggressive moves &
countermoves create competitive advantage > Utilize business intelligence
- Fits turbulent environments
- Enables managers respond instantly and change rapidly
- Requires dynamic structures and processes

Social Business Strategy

A plan of how the firm will use social IT, aligned with organization strategy and IS strategy
- Collaboration: use social IT to extend the reach of stakeholders, connect with each other.
- Engagement: Involve stakeholders in the firm, IT creates conversation opportunities.
- Innovation: Use social IT to identify and create new ideas for the enterprise.

2. Organizational Strategy
Firms design, as well as the choices to define, set up, coordinate, and control its work processes

Leavitts business diamond: Business processes, Tasks & Structures, Management and Values.
Managerial Levers model, managers can affect change in organization by:

Organizational variables
Control variables
Cultural variables

3. IS Strategy
The plan a firm uses to provide information services, this allows business strategy implementation.
Business strategy is a function of:
- Competition (What does the customer want and what does the competition do?)
- Positioning (In what way does the firm want to compete?)
- Capabilities (What can the firm do?). IS help determine the companys capabilities.

Week 3: Lecture 3 + chapter 10 (IT Project Management)

A project is a temporary endeavor undertaken to create a unique product or service
Two aspects: Temporary & Unique purpose
Project stakeholders: individuals/organizations that are involved in the project or whose interests
may be affected as a result of the project.
The Project sponsor: provides the financial resources for the project, provides leadership.
The project manager: Requires a range of management skills to make the project successful.

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Project is successful when: It is finished in time and within the budget (70% is unsuccessful)
Success = [balance] TIME + BUDGET + SCOPE





In reality, this works out differently: Unrealistic Plans, Unexpected problems, Fall behind on schedule
Skills needed to overcome these challenges:
Essentials to assure high success probability:
- Understand what the client needs
1. Project Management
- Control, then control again
2. Project team
- Clearly communicate with the client
3. Project cycle plan (schedule, method)
- Document results & get client to sign-off.
4. Effective communication
The projects complexity, clarity, and size determine its risk.

IS Development Methodologies
Systems Development Life Cycle (SDLC): the process of designing and delivering the system.
It is generally used in one of two distinct ways:
- as a general project plan
- as a process to design and develop system software (structured and formal)
Seven phases:
1. Project initiation.
5. Verification.
2. Requirements definition.
6. Cut over.
3. Functional design.
7. Maintenance and review
4. Construction.

Problems using traditional SDLC methodology:

Many systems projects fail to meet objectives, skills are difficult to obtain and each project is unique.
Organizations need to respond quickly & Newer methodologies us an iterative approach.

Dynamic System Development Method (DSDM) (iterative approach)

Active user interaction, redesign/renewal cycle, frequent deliveries, and empowered teams.
Four types of iterations: Study, Functional model, Design and build, Implementation.

Week 4: Lecture 4 + chapter 5 (Business processes & Redesign)

Functional (SILO) structure:
- Allows economies of scale
- Enables localized knowledge and skill
- Accomplish functional goals
- Best with limited product lines

- Slow response time to environmental
- Decisions may escalate unnecessarily
- Leads to poor horizontal coordination
- Less innovative
- Restricted view of organizational goals

Business Process structure:

- Flexibility and rapid response to
changes in customer needs
- Team effort to the creation and
delivery of value to customers
- Employees have a holistic view of
organizational goals
- Promotes a focus on teamwork
- Improves quality of life for employees

- Difficult and time-consuming
- Requires a broad variety of changes
- Dissatisfaction among existing
managers due to power erosion
- Requires significant training
- Can limit localized skill development

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Business processes: Collection of related events, activities and decisions, that involve a number of
actors and/or objects, and that collectively lead to an outcome that is of value to an organization.

Business Project Management (BPM)

BPM systems are a way to build, execute, and monitor automated processes.
1. Control flow: Activities or Events
2. Artefacts: business objects, sales orders
3. Resources: actors, performing entities (humans/systems)

Business Process Redesign (BPR)

When Improving the BPMN system (as-is > to-be), take the Devils Quadrangle into account:

Total quality management (or six-sigma) = incremental change

Data-driven approach and methodology for eliminating defects from a process > low rate of defects.
Six-sigma methodology consists of very specific steps called:
- DMAIC: Define, Measure, Analyse, Improve, Control (Improvement for EXISTING processes)
- DMADC: Define, measure, analyse, design, verify (Development of NEW processes)

Radical change: Appropriate for addressing cross-functional processes, helps attain aggressive
improvement goals, faces greater internal resistance.
Workflow is a series of connected tasks and activities done by people and computers to form a
business process. It includes software products that document and automate processes.
Enterprise systems: A set of IS tools used to enable information flow within and between processes
across an organization. Ensure integration and coordination across functions

Enterprise Resource Planning (ERP)

Designed to help large companies manage the fragmentation of information stored in hundreds of
individual desktop, department, and business unit computers across the organization. ERP systems
are designed to seamlessly integrate information flow throughout the company.
ERP II: makes company information immediately available to external stakeholders & enables ebusiness by integrating business processes with the enterprise and its trading partners.

Customer relationship management (CRM)

Support management activities performed to obtain, enhance relationships with, and retain
customers. Three common CRM systems are Oracle, SAP, and

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Product lifecycle Management (PLM)

PLM systems automate the PLM steps starting with the idea for a product and ending with the endof-life of a product. PLM contains all the information about a product.
Advantages of Enterprise Systems
- All modules easily communicate together with efficiency.
- Useful tools for effectively centralizing operations and decision making.
- Reinforce the use of standard procedures across different locations.
- Redundant data entry and duplicate data may be eliminated.
- Standards for numbering, naming, and coding enforced.
- Data and records can be cleaned up through standardization.
Disadvantages of Enterprise Systems
- Implementation requires an enormous amount of work.
- Requires redesigning business processes to achieve optimal performance of the integrated
- Organizations are expected to conform to the approach used in the enterprise system (e.g.,
change organization structure, tasks).
- A hefty price tag: additional costs for project management, user training, and IT support.
- Sold as a suite rather than individual modules.
- Enterprise systems are risky.
It is appropriate for an organization to let the enterprise system drive business process redesign
- It is just starting out and processes do not yet exist.
- Operational business processes are not a source of competitive advantage.
- Current systems are in crisis and there is not enough time/resources/knowledge in the firm
to fix them (e.g., Y2K).
It is inappropriate to let the enterprise system drive business process change when:
- Changing processes that are relied upon for strategic advantage.
- The features of available packages do not fit the needs of the business.
- There is a lack of top management support.

Week 5: Lecture 5.1/5.2 + chapter 6/7/8 (IT governance)

IT Architecture translates strategy into infrastructure. The created IT architecture blueprint is
used for translating business strategy into a plan for IS. Should consist of: hardware, software, data
& network. The blueprint specifies how IT will support business processes by identifying:
- Core processes of the company and how they will work together.
- How the IT systems will support the processes.
- The standard technical capabilities and activities for all parts of the enterprise.
- Guidelines for making choices.
Four key elements: Core business processes, Shared data, Linking technologies & Customer groups.
Three common IT architectures:
- Centralized architecture, everything (purchases, support) through data center.
- Decentralized architecture, arranges the components in a way that distributes the
processing and functionality between multiple small computers, servers, and devices.
- Service-oriented architecture (SOA), utilizes relatively small chunks of functionality available
for many applications or reuse. SOA utilizes software-as-a-service (SaaS)

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TOGAF: Includes a methodology and set of resources for developing an enterprise architecture.
Zachman Framework: Determines architectural requirements by providing a broad view that guides
the analysis of the detailed view.
IT Architecture should be standardized, easy to maintain (support, replacement parts), secure
(protect data, authentication), adaptable to emerging technologies and scalable to demand.
A strong business strategy is a prerequisite for IT architecture design, which is a prerequisite for
infrastructure design.

IT Governance (power, domination, politics/relationships/money)

Assignment of decision rights (authority) = value objectives
Creation of an accountability (responsibility) = framework
& the decision-making mechanisms
Goal of IT Governance: Obtain Higher ROI From IT Investments
- Clarify business strategies and the role of IT in achieving them
- Measure and manage IT investments and value
- Assign accountability for organizational changes required for governance
- Learn from each implementation
Factors affecting IT Governance
- The technology architecture in place: Centralize/in-house/mainframes/legacy systems?
- Corporate culture forces: User influence, org. structure, IM maturity, risk
- Corporate control philosophy and architecture: Planning/budgeting, cost accounting.
- Perceived strategic significance of IT: Strategic alignment, budget process alignment
Issues with IT Governance
- Fragmented approach to managing IT
investments (measure & monitor)
- Plethora of tools and frameworks to measure
inputs and outputs of each process
- Performance measures arent credible, easy to
interpret or actionable.

IT Governance approaches
- Integrate these approaches
- Use multiple interlinked initiatives
- Use a single tool and framework and
standardize terminology.
- Good performance measures

IT principles (IT Governance Goals)

1. Benchmarked lowest total cost of ownership
2. Rapid deployment of new applications
3. Architectural integrity
4. Consistent, flexible architecture
5. Measured, improving & communicated value and responsiveness

Maturity Model Framework

A misalignment exists between the demands on the business side and the IT offerings on the supply
side. When the capabilities of the IT organization are in balance with the
demand of the business, both are at the same level of maturity.
Level 1 Functionality Generating cost savings & providing information
Level 2 Effectiveness The IT organization adopts a process view to
provide integrated organizational services. IS supports managerial decision
making. Enables business partnerships.

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Level 3 Innovation Provides support for strategic initiatives.

Business case: created to gain support and a go-ahead decision on an IT investment and is a
structured document that lays out all the relevant information needed to make a go/no-go decision.
IT portfolio management: Continually deciding on the right mix of investments from funding,
management, and staffing perspectives. Fund and invest in the most value-generating initiatives.
Weill et al. describe four asset classes of IT investments:
1. Transactional Systems: Systems that streamline or cut costs.
2. Infrastructure Systems: Shared IT services used for multiple applications
3. Informational Systems: Systems that provide information used to control, manage,
communicate, analyze, or collaborate.
4. Strategic Systems: Systems used to gain a competitive advantage in the marketplace.
The three main funding methods are chargeback, allocation, and corporate budget.
- Chargeback and allocation methods distribute the costs back to departments within the company.
- In corporate budgeting, costs are not linked directly with any specific user or business unit.

Total cost ownership (TCO): calculates a more accurate cost that includes all associated costs.

Estimates annual costs per user for each potential infrastructure choice and totals them.
Provides the best investment numbers to compare with financial return numbers when
analyzing the net returns on various IT options..

IS decision rights-accountability gap

Weill et al. define IT governance as:
specifying the decision rights and
accountability framework to encourage
desirable behavior in using IT.
Match the managers decision rights with his
or her accountability for a decision.
Mismatches result in either an oversupply of
IT resources or the inability of IT to meet
business demand.

The Sarbanes-Oxley (SoX) Act of 2002 enacted to increase regulatory visibility and accountability
of public companies & their financial health.

Week 6: Lecture 6 + chapter 12 (Security & Ethics)

Make sure you have (tested) layers of defence! Preventive, Detective & Corrective controls

A. Preventive controls (Input stage)


User access controls (authentication and authorization) & Physical access controls (locks,
Network access controls (firewalls, intrusion prevention systems, etc.)
Device and software hardening controls (configuration options)
Installing the latest updates


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B. Detective controls (Transport stage)


Log Analysis: examining logs to identify evidence of possible attacks

Intrusion Detection: Sensors and a central monitoring unit that create logs of network traffic
that was permitted to pass the firewall and then analyze those logs for signs of attempted or
successful intrusions
Managerial Reports
Security Testing

C. Corrective Controls

Computer Incident Response Team

Chief Information Security Officer (CISO): Independent responsibility for information security
assigned to someone at an appropriate senior level
Patch Management
Back-up facilities, cold/warm sites.

Information Ethics: the ethical issues associated with the development of information technologies

Social contract theory places social responsibilities on corporate managers to consider the needs
of a society. The social contract has two components:
1. Social welfare: provide greater benefits than their associated cost
2. Justice: Corporations must pursue profits legally and avoid actions that harm society.

Richard O. Mason: PAPA

Privacy, individuals have control to manage their privacy through choice, consent, and correction.
Accuracy, or the correctness of information, dominates in corporate record-keeping activities.
Property, who owns the data and has rights to it?
Accessibility, or the ability to obtain data, has become paramount.

Week 7: Lecture 7.1/7.2 + chapter 3 (Leadership & Global Collaboration)

Organizational structures
Hierarchical: bureaucratic structure with a division of labor, specialization, and centralized business
best supported in a stable/certain environment.
Flat: Decision-making to lowest level, informal roles, operate in unstable environment, centralized.
Matrix: Work is organized into small work groups and integrated regionally and nationally/globally.
Concentrates on both functions and purpose in an unstable environment.
Networked: FLAT and HIERARCHICAL combined, decentralized decision rights in dynamic/unstable
environment. IS are fundamental

Hofstedes dimensions of national culture:

- Power distance
- Uncertainty avoidance
- Individualism
(+ short vs. long-term orientation)
GLOBE (Global Leadership and Organizational Behavior Effectiveness) adds 5 more categories:
In-group collectivism, Assertiveness, Future Orientation, Performance orientation, Humane


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