Wolaita Sodo University

School of Informatics
Department of Information Systems

Course Title: Management of Information Systems

and Services

Prepared and Compiled by: Eyuel G.

Reviewed By: Hailiye T.

April, 2023

Wolaita Sodo University, Ethiopia

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Contents
Chapter 1: Importance of Information Systems (IS) Management ............................................................... 1
1.1. Terminology and basic concepts ................................................................................................... 1
1.2. Information, technology and business........................................................................................... 8
1.3. History and Evolution of information systems and technology .................................................. 11
Chapter 2: Leadership Issues ...................................................................................................................... 15
2.1. The Top IS Job ............................................................................................................................ 15
2.2. The Strategic Uses of IT/IS ......................................................................................................... 16
2.3. IS Planning .................................................................................................................................. 17
Chapter 3: Managing the Essential Technologies and Operations.............................................................. 27
2.1. Distributed systems: overall architecture .................................................................................... 27
2.2. Managing telecommunications ................................................................................................... 34
2.3. Managing information resources ................................................................................................ 38
2.4. Managing operations ................................................................................................................... 44
Chapter 4: Managing System Development ............................................................................................... 49
4.1 Technologies for Developing Systems ....................................................................................... 49
4.2 Management Issues in System Development .............................................................................. 50
Chapter 5: Supporting Work ....................................................................................................................... 57
5.1 Supporting Decision Making ...................................................................................................... 57
5.2 Supporting Collaboration ............................................................................................................ 65
5.3 Supporting Knowledge Work ..................................................................................................... 67
Chapter 6: The Challenges Ahead .............................................................................................................. 71
6.1 Organizational Principles ............................................................................................................ 71
6.2 Understanding a networked world .............................................................................................. 76
6.3 Moving forward .......................................................................................................................... 77
Chapter 7: Transforming and Managing Information Organizations ......................................................... 79
7.1 Models of industry transformation .............................................................................................. 79
7.2 Effects of transformation and convergence on organizations ..................................................... 79
7.3 Outsourcing and partnering for the virtual organization ............................................................. 82
7.4 Formulating e-business roll out strategies................................................................................... 85
7.5 A framework for e-business change management ...................................................................... 86

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 Chapter 1: Importance of Information Systems (IS) Management
1.1. Terminology and basic concepts
Management Information System is an accumulation of 3 different terms as explained below.

Management: We can define management in many ways like, ―Manage Man Tactfully‖ or
Management is an art of getting things done by others. However, for the purpose of Management
Information System, management comprises the process and activity that a manager does in the
operation of their organization, i.e., to plan, organize, direct and control operations.

Information: Information simply means processed data or in the layman language, data which
can be converted into meaningful and useful form for a specific user.

System: The system can be explained in a following ways:

 System can be defined as a set of elements joined together for a common objective.
 A group of interrelated or interacting elements forming a unified whole e.g., business
organization as systems.
 A group of interrelated components working together towards a common goal by
accepting input and producing output in an organized transformation process.

Management Information System (MIS): is a study of people, technology, organizations, and

the relationships among them in a broader sense. However in precise terms MIS is a software
system that focuses on the management of information technology to provide efficiency
and effectiveness or strategy decision making. The term is often used in the academic study of
businesses and has connections with other areas, such as information systems, information
technology, informatics, e-commerce and computer science.

G.B. Davis defined a Management Information System (MIS) is ―an integrated man/machine
system for providing information to hold up the operations, management and decision making
functions in an organization.‖ Here the system utilizes hardware and software, manual
procedures, management decision model and data base.

An MIS need not be wholly computer based; it is however inevitable that the information
deriving from the high volume of data in basic operational processes is computerized; what is
still not so certain is whether the once off ―high level‖ information also needed in an MIS, is best
obtained using a computer.

Apart from this there are many other thoughts over and above to this definition are as follows:

 A management information system aims at meeting the information needs of managers,

predominantly with regard to the current and past operations of the enterprise.

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  Management information system is a system which provides precise, timely and
meaningful data for management planning, analysis and control to optimize the growth of
the organization.
 Thus from the above definition it had been extracted that ―Management Information
System‖ (M.I.S.) is vitally concerned with processing data into information. Which is
then communicated to the different departments in an organization for appropriate
decision making?
 The MIS is a system which provides information support for decision making in the
organization.
 The MIS is an integrated system of man and machine for providing the information to
support the operations, the management and the decision making function in the
organization.
 The MIS is a system based on the database of the organization evolved for the purpose
of providing information to the people in the organization.
 The MIS is a Computer based Information System.

Though there are a number of definitions, all of them converge on one single point, i.e., the MIS
is a system to support the decision making function in the organization. The difference lies in
defining the elements of the MIS. However, in today‘s world MIS a computerized business
processing system generating information for the people in the organization to meet the
information needs decision making to achieve the corporate objective of the organization. In any
organization, small or big, a major portion of the time goes in data collection, processing,
documenting it to the people.

In order to get a better grip on the activity of information processing, it is necessary to have a
formal system which should take care of the following points:

 Handling of a voluminous data.

 Confirmation of the validity of data and transaction.
 Complex processing of data and multidimensional analysis.
 Quick search and retrieval.
 Mass storage.
 Communication of the information system to the user on time.
 Fulfilling the changing needs of the information.

Objectives of MIS

1. Data Capturing: MIS capture data from various internal and external sources of
organization. Data capturing may be manual or through computer terminals.
2. Processing of Data: The captured data is processed to convert into required information.
Processing of data is done by such activities as calculating, sorting, classifying, and
summarizing.

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 3. Storage of Information: MIS stores the processed or unprocessed data for future use. If
any information is not immediately required, it is saved as an organization record, for
later use.
4. Retrieval of Information: MIS retrieves information from its stores as and when required
by various users.
5. Dissemination of Information: Information, which is a finished product of MIS, is
disseminated to the users in the organization. It is periodic or online through computer
terminal.

Characteristics of MIS

1. Systems Approach: The information system follows a systems approach. Systems

approach means taking a comprehensive view or a complete look at the interlocking sub-
systems that operate within an organization.
2. Management Oriented: Management oriented characteristic of MIS implies that the
management actively directs the system development efforts. For planning of MIS, top-
down approach should be followed. Top down approach suggests that the system
development starts from the determination of management‘s needs and overall business
objective. To ensure that the implementation of systems polices meet the specification of
the system, continued review and participation of the manager is necessary.
3. Need Based: MIS design should be as per the information needs of managers at different
levels.
4. Exception Based: MIS should be developed on the exception based also, which means
that in an abnormal situation, there should be immediate reporting about the exceptional
situation to the decision –makers at the required level.
5. Future Oriented: MIS should not merely provide past of historical information; rather it
should provide information, on the basis of future projections on the actions to be
initiated.
6. Integrated: Integration is significant because of its ability to produce more meaningful
information. Integration means taking a comprehensive view or looking at the complete
picture of the interlocking subsystems that operate within the company.
7. Common Data Flow: Common data flow includes avoiding duplication, combining
similar functions and simplifying operations wherever possible. The development of
common data flow is an economically sound and logical concept, but it must be viewed
from a practical angle.
8. Long Term Planning: MIS is developed over relatively long periods. A heavy element of
planning should be involved.
9. Sub System Concept: The MIS should be viewed as a single entity, but it must be broken
down into digestible sub-systems which are more meaningful.
10. Central database: In the MIS there should be common data base for whole system

Role of MIS in an Organization:

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The role of the MIS in an organization can be compared to the role of heart in the body. The
information is the blood and MIS is the heart. In the body the heart plays the role of supplying
pure blood to all the elements of the body including the brain. The heart works faster and
supplies more blood when needed. It regulates and controls the incoming impure blood,
processes it and sends it to the destination in the quantity needed. It fulfills the needs of blood
supply to human body in normal course and also in crisis. The MIS plays exactly the same role
in the organization.

1. The system ensures that an appropriate data is collected from the various sources,
processed, and sent further to all the needy destinations. The system is expected to fulfil
the information needs of an individual, a group of individuals, the management
functionaries: the managers and the top management.
2. The MIS satisfies the diverse needs through a variety of systems such as Query Systems,
Analysis Systems, Modeling Systems and Decision Support Systems the MIS helps in
Strategic Planning, Management Control, Operational Control and Transaction
Processing.
3. The MIS helps the clerical personnel in the transaction processing and answers their
queries on the data pertaining to the transaction, the status of a particular record and
references on a variety of documents. The MIS helps the junior management personnel
by providing the operational data for planning, scheduling and control, and helps them
further in decision making at the operations level to correct an out of control situation.
4. The MIS helps the middle management in short them planning, target setting and
controlling the business functions. It is supported by the use of the management tools of
planning and control. The MIS helps the top management in goal setting, strategic
planning and evolving the business plans and their implementation.
5. The MIS plays the role of information generation, communication, problem identification
and helps in the process of decision making. The MIS, therefore, plays a vital role in the
management, administration and operations of an organization.

Components of MIS

1. Marketing Research System (MRS)

 Marketing research can be seen as the systematic and objective search for and
analysis of data and information relevant to the identification and solution of any
problem in the field of marketing
2. Marketing Intelligence System (MIS)
 It collects information from external sources. It provides information about current
marketing-environment and changing conditions in the market. This information can be
easily gathered from external sources like; magazines, trade journals, commercial press,
so on. This information cannot be collected from the Annual Reports of the Trade
Association and Chambers of Commerce, The salesmen‘s report also contains
information about market trends.

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  The information which is collected from the external sources cannot be used directly. It
must be first evaluated and arranged in a proper order. It can be then used by the
marketing manager for taking decisions and making policies about marketing.
 So, marketing intelligence is an important component of MIS.
3. Internal Record System (IRS)
 Marketing managers get lots of information from the internal-records of the company.
 These records provide current information about sales, costs, inventories, cash flows and
account receivable and payable.
 Many companies maintain their computerized internal records. Inside records help
marketing managers to gain faster access to reliable information.
4. Decision Support System(DSS)
 It is a computer-based information system that supports business or organizational
decision-making activities.
 These are the tools which help the marketing managers to analyze data and to take better
marketing decisions.
 They include hardware, i.e. computer and software programs.
 Computer helps the marketing manager to analyze the marketing information. It also
helps them to take better decisions. There are many software programs, which help the
marketing manager to do market segmentation, price fixing, advertising budgets, etc.

Overview of Management

Every business unit has some objectives of its own. These objectives can be achieved with the
coordinated efforts of several personnel. The works of a number of persons are properly co-
ordinated to achieve the objectives through the process of management.

Management is a vital aspect of the economic life of man, which is an organized group activity.
It is considered as the indispensable institution in the modern social organization marked by
scientific thought and technological innovations. One or the other form of management is
essential wherever human efforts are to be undertaken collectively to satisfy wants through some
productive activity, occupation or profession.

It is management that regulates man's productive activities through coordinated use of material
resources. Without the leadership provided by management, the resources of production remain
resources and never become production.

Management is the integrating force in all organized activity. Whenever two or more people
work together, to attain a common objective, they have to coordinate their activities. They also
have to organize and utilize their resources in such a way as to optimize the results.

Management is usually defined as planning, directing and controlling the business operations.
Management is the process of allocating and organizations input including human and economic
resources by planning, organizing, directing and controlling for the purpose of producing goods
or services desired by customers so that organizational objectives are accomplished.

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Functions of Management

Management has been defined as a process of getting things done through others. This process
is identified in a set of functions performed by managers to accomplish the goals. A
manager is thus someone who defines, plans, guides, helps out, and assesses the work of others,
frequently people for whom the manager is accountable in an organization. The following
mentioned management functions will involve creative problem solving.

Planning: According to Terry and Franklin, ―planning is selecting information and making
assumptions concerning the future to put together the activities necessary to achieve
organizational objectives.‖ Planning includes both the broadest view of the organization, e.g., its
mission, and the narrowest, e.g., a tactic for accomplishing a specific goal.

Organizing: Organizing is the classification and categorization of requisite objectives, the

grouping of activities needed to accomplish objectives, the assignment of each grouping to a
manager with the authority necessary to supervise it, and the provisions for coordination
horizontally and vertically in the organization structure. The focus is on separation, coordination,
and control of tasks and the flow of information inside the organization. It is in this function that
managers allocate authority to job holders.

Directing: Direction is telling people what to accomplish and seeing that they do it to the finest
of their capability. It includes making assignments, corresponding procedures, seeing that
mistakes are corrected, providing on the job instruction and, of course, issuing orders.‖ The
purpose of directing is to control the behavior of all personnel to accomplish the organization's
mission and objectives while simultaneously helping them accomplish their own career
objectives.

Staffing: Staffing function requires recognition of human resource needs, filling the
organizational structure and keeping it filled with competent people. This function includes
recruiting, training; evaluating and compensating are the specific activities.

Controlling: ―Control is the course of action that measures present performance and guides it
towards some predetermined goal. The quintessence of control lies in checking existing actions
against some desired results determined in the planning process.‖

Levels of Management

According to the expert there are three types of level of management:

i) Top Level Management

Ii) Middle Level Management

iii)Low Level or Operative Management

1. Top Level Management

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Top level management consists of board of directors, managing directors or executive committee
members. Objectives of Top Level Management include the following.

 Setting key objectives, policies and identifying factors essential for the development of
the organization.
 Making appointments to the top position of the organization such as managers
department heads etc.
 Reviewing the work of different personnel in various levels.

2. Middle Level Management

Middle level management consists of managers of various departments such as productions,

sales, marketing, resource, finance etc. Objectives of Middle Level Management include the
following.

 Follow the rules and policies formulated by the top level management.
 Motivating personnel for higher productivity.
 Collecting detail analysis reports from the various departments.
 Mutual understanding with other departments in the organization.
 Recommendations to the top level management.
3. Low Level Management.

Low level management consist of supervisors, daily workers etc. Follow the rules and guidelines
made out by the top level authentic of the organization.

Some of the functions of Lower Level Management include the following.

 To issue orders and instructions to the workers and to supervise and control their work
 To classify and assign jobs to the workers
 To direct and guide the workers about work procedure
 To arrange for the necessary tools, equipment, materials etc., for the worker
 To solve the problems of workers
 To inform the management about the problems of workers which are not solved at this
level?
 To maintain discipline among the workers and to develop in them the right approach to
work.
 To maintain good human relations.
 To build a high group morale among the workers.

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1.2. Information, technology and business
Data and information

By data we mean the facts or figures representing an object, place or the events occurring in the
organization. It is not enough to have data (such as statistics on the economy). Data themselves
are fairly useless, but when these data are interpreted and processed to determine its true
meaning, they become useful.

Characteristics of Data

 They are facts obtained by reading, observation, counting, measuring and weighing etc.
which are then recorded
 Data are derived from external and internal sources (activities with firm).
 Data may be produced as an automatic by-product of some routine but essential operation
such as the production of an invoice or alternative a special counting or measuring
procedure must be introduced and the result recorded.
 The source of data need be given considerable attention because if the sources of the data
flawed, any resulting information will be worthless.

Data Processing

Data or processing systems perform the essential role of collecting and processing the daily
transactions of the organizations. Data processing is necessary to ensure that the day-to-day
activities of the organization are processed, recorded and acted upon. Files are maintained which
provide both the current data for transaction, for example the amount invoiced and cash received
during the month for statement preparation, and which also serve as a basis for operational and
tactical control and for answering enquiries. By information, we mean that the data have been
shaped into a meaningful form, which may be useful for human beings. So, when data are
processed, interpreted, organized, structured or presented so as to make them meaningful or
useful, they are called information. Information provides context for data.

Information: is created from organized structured and processed data in a particular context,
―information can be recorded as signs, or transmitted as signals. Information is any kind of event
that affects the state of a dynamic system that can interpret the information. Conceptually,
information is the message (utterance or expression) being conveyed. Therefore, in a general
sense, information is ‗knowledge communicated or received concerning a particular fact or
circumstance‖.

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Characteristics of Good Information

Good information is that which is used and which create value. Experience and research shows
that good information has numerous qualities which are:

1. Relevance: Information must be relevant to the problem being considered. Too often
reports, messages, tabulations etc. contain irrelevant parts which most prevent the user of
the information to get the actual meaning of what the sender wants.
2. Accuracy: Information should be sufficiently accurate for it to be relied upon by the
manager and for the purpose for which it is intended.
3. Completeness: Ideally, all the information required for a decision should be available.
However, in practice, this is not often obtainable. What is required is that the information
is complete in respect of the key elements of the problem. This suggests that there should
be interaction between information provides and users to ensure that the key factors are
identified.
4. Confidence in the source: For information to have value it must be used. For it to be used
managers must have confidence in the source. Confidence is enhanced: Data Processes
Output
 The source has been reliable in the past
 There is good communication between the information producer and the
manager.
5. Communication to the right person: All persons have a defined sphere of activity and
responsibility and should receive information to help them carry out their designated
tasks. In practice this is not always as easy as it sounds. It is quite common for
information to be supplied to the wrong level in the organization. a superior may not pass
it on the person who needs it whilst subordinates may hold onto information in an attempt
to make themselves seem indispensable.

Functions of Information

A. Reduction of Uncertainty: Uncertainty exist where there is less than perfect knowledge.
Rarely, if ever is there perfect knowledge but relevant information help to reduce the
unknown.
B. An aid to monitoring and control: By providing information about performance and the
extent of deviations from planned level of performance, management are better able to
control operation.
C. As a means of communication: Managers need to know about developments, plans,
forecasts, impending changes and so on.
D. As a memory supplement: By having historical information about performance,
transactions, results of past actions and decisions available for reference, personal
memories are supplemented.
E. As aid to simplification: By reducing uncertainty and enhancing understanding, problems
and situations are simplified and become more manageable.

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Information System

An information system can be any organized combination of people, hardware, software,

communication software and data resource that collects transformation or screening the
information in an organization. An information system can be defined as a set of interrelated
components that collect (or retrieve), process, store and distribute information to support
decision making, coordination and control in an organization.

Examples of Information System

A business is an example of an organizational system to an economic resource (input) is

transformed by various business processes into goods and services (output). Information system
provides information on the operation of the system to management for the direction and
maintenance of the system as it exchanges inputs and output with its environment.

Some examples of information systems include the following.

 Airline reservations (seat, booking, payment, schedules, boarding list, special needs, etc.).
 Bank operations (deposit, transfer, withdrawal) electronically with a distinguish payment
gateways.
 Integration of department with the help of contemporary software‘s like ERP.
 Logistics management application to streamline the transportation system.

Components of Information System

1. People Resources: People are required for the operation of all information system.

People Resources divided into two types

I. End-Users: These are the people who use an information system or the
information it produce. Ex: Accounts, Sales Persons, Customers and Managers.
II. Information system specialist: These are the people who develop and also operate
Information system. Ex: System Managers, Programmers, Computer Operation.
2. Data Resources

I. Data resources of an Information system are typically organized in two parts:

II. Database: Database holds processed and organized data.

III. Knowledge Base: It holds knowledge in a variety of forms such as facts, rules

3. Software Resources: It includes all sets of information processing instruction. It is also

two types:
 Program: Set of operating instructions the direct and computer hardware.
 Procedure: Set of Information processing instructions needed by people.

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 4. Hardware Resources: Include all physical devices and materials used in information
processing.
5. Network Resources:

Need for Information Systems

The information system is very important for the internet technology and the traditional business
concerns and is really the latest phase in the ongoing evolution of business. All the companies
need to update their business, infrastructure and change way they work to respond more
immediately to customer need. A first step in designing and developing an MIS is to assess the
information needs for decision making of management at different hierarchical levels, so that the
requisite information can be made available in both timely and usable form to the people who
need it. Such assessment of information needs is usually based on personality, positions, levels
and functions of management.

Roles of Information Systems in business

An Information system supports the business Organizations in the following ways.

A. Support the Business Process: Treats inputs as a request from the customer and outputs as
services to customer. Supports current operations and use the system to influence further
way of working.
B. Support Operation of a Business Organization: An IS supports operations of a business
organization by giving timely information, maintenance and enhancement which provides
flexibility in the operation of organizations.
C. Support Decision Making: An IS supports the decision making by employee in their daily
operations. It also supports managers in decision making to meet the goals and objectives
of the organization. Different mathematical models and IT tools are used for the purpose
evolving strategies to meet competitive needs.
D. Strategies for an Organization: Today each business is running in a competitive market.
An IS supports the organization to evolve appropriate strategies for the business to assent
in a competitive environment

1.3. History and Evolution of information systems and technology

Information systems have grown over time. They began from manual systems that included the
use of paper to keep all things in organizations in order. They have notably evolved over the
years into computerized systems that are easy to use and more effective than the manual systems.
They began from single systems that were developed to perform a single task for the company.
They have slowly grown into integrated systems that can perform various business tasks on the
same platform. Institutions have installed Enterprise Resource Planning systems to aid in the
primary activities they get involved in. An ERP is an integration of many information systems
into one single massive system that incorporates the principal business activities. Information
relates to each other over the whole system. These systems include operations that are involved

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in the entire company. All organizational departments are integrated together hence improving
supervision and monitoring of company activities.

Information system infrastructure has improved since the appearance of the first computers.
They have proven to be useful tools in optimizing and improvement of management activities.
System evolution in each specific area has dramatically made their introduction progressive over
the years. Information systems were first introduced in the 1960s to deal with accounting
management issues. They had however been in use in the previous years as computers strive to
evolve. Even the first machines that used vacuum tubes and transistors had the capability that the
information systems have today. Businesspeople used them and also scientists to perform tasks
that had proven challenging to perform manually. Simple arithmetic problems could be solved
using the computers however the results were recorded. People made use of the computers to
exhaustively improve the activities they were indulging in until the 1960s when they were able to
use an accounting information system in their businesses. Since specific laws, however, govern
accounting management, the software had to be adjusted to cater for all the requirements. The
introduction of the accounting management software triggered the presentation of information
systems in all various areas of management. Managers saw how effective software could be in
monitoring all accounting information and decided to incorporate information systems
companywide. It was in the urge and desire to ease business operations and improve records
management in the whole organization. Several information systems were then developed to aid
in managing invoices, paying and keeping order records. Such operations were kept stored in the
developed information systems. They were all integrated with the already existing accounting
management software. This improved productivity, guaranteed safe working time and reduced
costs and mistakes. Inventory control systems were developed nearly for all companies. It was a
great improvement in the optimization of processes that the companies got involved in. Material
Requirement Planning systems were then introduced in the early 1970s. These were effectively
used in the monitoring of all materials that were used in the production of a particular
commodity. A bill of materials could be prepared, and inventory databases kept. They were
major systems in manufacturing industries to monitor the whole process of manufacturing. It
notably increased the efficiency of production and supply. This called for its continued use in all
the manufacturing companies. All manufacturing costs could also be kept using the systems.
They could then be manipulated using the accounting management systems that had been
previously introduced. This vitally improved the manufacturing process in the companies that
installed them. Material Resource Planning systems were a great contribution to the achievement
of outstanding advancements in business operations. These systems, however, seemed to
overlook capacity constraints. This led to the introduction of MRP II systems in the 1980s. This
newly developed information system infrastructure took into account all management
necessities, all material planning and the needed resources and the capacity for manufacturing
products. They were focused on the production area. They would, however, integrate themselves
in other systems that were being used in other management areas. As the information systems
evolved over the years, new functionalities were added every other time. Other areas of
management were integrated into the already installed computer systems. Many organizations

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grew drastically out of the installation and use of various information systems that were being
upgraded each time. All the areas seemed to be drifting to the information system environments.
They had proven very efficient in performing business operations. With the continued growth
and development of information systems, Material Resources Planning II systems gradually
evolved to integrate all the levels of management. New functionalities were added to the systems
so that other management areas were covered. These areas included human resources, logistics,
manufacturing, finance, inventory, distribution, marketing, general management, customer
relationship management and much more. This brought up the introduction of Entity Resource
Planning concept in the involved companies. Many information systems were now integrated
into one single platform where all business activities were kept. A clear relationship among all
the databases involved in the business activities was established. It has provided clear
interrelationships of information across the whole company. Advancements in networking
technologies have facilitated the proper functioning of information systems. It has been a
contributing factor to the integration of systems organization-wide. Networked information
systems have led to the rapid developments in the Enterprise Resource Systems that are there
today. They have been considered as a consequence of the evolution of many information
systems over time.

The information systems that have been put in place in the current world aim at improving both
the internal and the external environment. They have provisions for users of the system who are
in the organization and also those that are from outside. Both internal and external processes are
catered for efficiently in the management information systems. This eases all business activities
that companies are obligated to perform. Competitive advantage is then achieved gradually as the
company‘s grow. Traditional ERP systems covered all the internal business activities of the
company. Activities like accounting, planning, and operations adopted the Enterprise Resource
Planning information system and optimized their performance. Integrated information systems
for company management were put up to aid in the generation of several benefits of a company.
They led to the uniqueness of data, the flow of information through the various processes and
improved traceability of company funds and resources. They also acted as analytical tools to aid
in the internal analysis of the company involved. The traditional ERP grew into ERP II with
time. The two were notably different. Their process and nature were not similar at all. Traditional
ERPs considered operations inside the organization while ERP II systems were developed to aid
the company to efficiently interact with its business environment and the generated integration of
all functionalities of the company.

Current Trends in Information Systems

Information systems have advanced with time into really efficient systems. Their inevitable
growth and development has not only led to improved performance of business activities but also
has aided in the gaining of competitive advantage. Enterprises that have been in the urge to make
use of the systems have grown noticeably. They have improved the systems into artificial
intelligence computer systems that can even be used to forecast business performance. It has
been enabled by simulation and modeling techniques that are computed on the computer systems

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that use information that is stored in the databases. Some of the major functional advances that
have been added in the information systems include customer relationship management, human
resource relationship management, business intelligence and electronic commerce. Customers
have been enabled to interact with organizations over information systems. They submit their
feedback over the systems. The workforce in the companies has been monitored by the use of
computerized systems. Payroll systems to generate payments for all the human resource have
proved very efficient in maintaining records. Business intelligence has been incorporated into the
systems. It includes functionality where the system can do mathematical operations and present
to the user of the system analyzed data in graphs or pie charts. Electronic commerce has been
widely used to sell both goods and services. Customers have been able to access products and
services on online platforms and make purchases.

There also have been technical advancements over time. System developers have introduced
open programming to ensure that new ideas on information systems are put into consideration.
Object-oriented information has been used effectively to aid in the development of information
systems. Organizations have been able to adopt system architecture for their computerized
systems. Future trends in information systems are expected. The rapid growth in information
system development and programming languages will aid in the future trends. Some functional
requirements that may be introduced in the near future may include product lifecycle
management, data warehousing, knowledge management systems and balanced scorecard. All
these systems will be integrated into one to aid in the growth and development of the systems.
The already introduced system functionalities are expected to improve with time.

Technical trends that are most likely to be encountered include open software and mobile
applications that will be used in m-commerce. Wearable‘s are also expected to be integrated with
information systems. Android devices may be developed over time to cater for major
management information systems capabilities. It will be a significant development to all
organizations that embrace information systems.

Information systems have proven to be an efficient tool in the conducting of business activities.
Company management has been improved over time through the use of information systems. All
the levels of management have embraced computerized information systems since they are more
efficient in the performing of business activities. Businesses have adopted the systems to gain a
competitive advantage in their areas of specialization. It is therefore recommended that all
organizations embrace information systems in performing of all business activities.

14
 Chapter 2: Leadership Issues
2.1. The Top IS Job
The responsibilities of the head of the information system function now go far beyond operating
highly efficient ―production programming shops.‖ These executives must understand the goals of
the enterprise and work in partnership with line executives to deploy IT to attain the
organization‘s goals.

One major recruiter of IS professionals is the IT industry itself. Thousands of companies

develop, manufacture, market, and service computer hardware, software, data, and network
products and services. The industry can also provide e-business and e-commerce applications
and services, end-user training, or business systems consulting. The biggest need for qualified
people comes from the millions of businesses, government agencies, and other organizations that
use information technology. The need in many types of IS professionals, such as systems
analysts, software developers, and network managers to help them plan, develop, implement, and
manage today‘s Internet based and Web-enabled business/IT applications.

Employment of IS professionals is expected to grow more than 36 percent (much higher than
average) for all occupations as organizations continue to adopt and integrate increasingly
sophisticated technologies. IS/IT graduates generally receive one of the highest starting salaries
in the world. Information system professionals have career opportunities in every business
environment and activity throughout the world.

Programmer Analyst

Computer systems analysts study an organization‘s current computer systems and procedures
and design information systems solutions to help the organization operate more efficiently and
effectively. They bring business and information technology (IT) together by understanding the
needs and limitations of both.

Software Engineer

Software developers are the creative minds behind computer programs. Some develop the
applications that allow people to do specific tasks on a computer or another device. Others
develop the essential systems that run the devices or that control networks.

Technical Support Specialist

Computer support specialists provide help and advice to people and organizations using
computer software or equipment.

Business Analyst

A business analyst is someone who analyzes an organization and documents on its business,
processes and systems assessing the business model or its integration with technology.

15
Systems Administrator

Computer networks are critical parts of almost every organization. Network and computer
systems administrators are responsible for the day-to-day operation of these networks.

2.2. The Strategic Uses of IT/IS

A major role of information systems applications in business is to provide effective support of a
company‘s strategies for gaining competitive advantage. This strategic role of information
systems involves using information technology to develop products, services, and capabilities
that give a company major advantages over the competitive forces it faces in the global
marketplace. Information technology plays an important role in delivering value for a business
and supporting organizational transformation. To achieve that, chief information officers have
become key members of board teams developing and delivering strategic solutions for the
business. The aim is to make an organization more competitive by aligning business strategy
with IT strategy

1. Support Innovation

Organizations that want to improve their innovation capabilities and develop new products or
services for the market can use cloud computing to speed up the process. Cloud computing
enables organizations to rent additional IT resources during the development project on a pay-as-
you-go basis, rather than investing in fixed resources. Organizations can use the additional
resources to run pilot programs or speed up development. This provides an important strategic
advantage by enabling the organization to get new products to market quickly, ahead of the
competition.

2. Improve Responsiveness

Cloud computing enables organizations to scale up their IT resources quickly in response to

changing market conditions. Organizations that offer products and services online may find it
difficult to handle a flow in traffic, which could result in lost business. Adding resources from
the cloud provides a strategic advantage by enabling them to respond to changes in demand,
increase revenue and maintain customer satisfaction.

3. Increase Collaboration

IT solutions that improve collaboration in an organization can provide an important competitive

advantage. Issuing field service teams with smartphones, for example, enables service engineers
to provide a faster, more efficient service to customers. Engineers working on a customer site
can set up voice or video conference calls with product or technical experts at headquarters to
discuss and resolve a complex issue, rather than delaying a repair.

16
 4. Enhance Customer Insight

Collecting and analyzing data to gain greater insight into customers‘ needs and preferences
provides a strategic advantage. By using powerful analytics software, organizations can develop
customized offers and personalized communications that help to increase customer satisfaction
and foster loyalty.

5. Introduce New Business Models

Organizations can use IT to make strategic changes to their business models. A company that
traditionally sold products through retail outlets might use IT to develop an e-commerce model
that enables it to reach a wider market, reduce its distribution costs and offer a more convenient
service to customers.

2.3. IS Planning
Systems planning, especially strategic systems planning, are becoming more difficult and more
important at the same time. Technology is changing so fast that it seems fruitless to plan for it,
yet the dependence on this technology makes planning is effective use a matter of organizational
life and death.

The Changing World of Planning is:-

 Traditional Strategy-Making
 Today‘s Sense-and-Respond Approach

Information systems planning should be an integral part of business planning .Business planning
the process of identifying the firm‘s goals, objectives, and priorities and developing action plans
for accomplishing them.

Information systems planning: the part of business planning concerned with developing the
firm‘s information systems resources.

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The Changing World of Planning

Internet etc. = ‗introduced‘ speed into the business environment and transformed how people
think about time, how much time they have to plan, react to competitors etc.

Traditional Strategy-Making: Business executives created a strategic business plan = where the
business wanted to go .IS executives created an IS strategic plan = how IT would support the
business plan. IT implementation plan created = describe exactly how the IS strategic plan would
be implemented

Assumptions:

 The future can be predicted

 Time is available to do these 3 parts
 IS supports and follows the business
 Top management knows best (broadest view of firm)
 Company = like an ‗Army‘

Today‘s Sense-and-Respond Approach: Today, due to the Internet and other technological
advances, these assumptions no longer hold true:

 The future cannot be predicted

 Who predicted Internet, Amazon, eBay etc.?
 Time is not available for the sequence
 Information system does not JUST support the business anymore
 Top management may not know best
 Inside out Vs. outside in approach
 An organization is not like an army
 Industrial era metaphor no longer always applies

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 Enterprise wide information management model

The Seven Planning Techniques

1. Stages of Growth
 Stage One: Early Successes: Increased interest and experimentation
 Stage Two: Contagion: Interest grows rapidly; learning period for the field
 Stage Three: Control: Efforts begun toward standardization
 Stage Four: Integration: Pattern is repeated
 The eras overlap each other slightly at points of ―technology discontinuity‖
 Importance of the theory is understanding where a technology or company resides
on the organizational learning curve
 Management principles differ from stage to stage
 Different technologies are in different stages at any point in time

2. Critical Success Factors

 Popular planning approach that can be used to help companies identify information
systems they need to develop / improve
 For each executive, Critical Success Factors are the few key areas of the job where
things must go right for the organization to flourish
 Suggested fewer than 10 per executive
 Time dependent (must be re-examined)
 Four sources:
o Industry the business is in,
o Company itself and situation within industry,
o Environment (consumer trends), and
o Temporal organizational factors (inventory)
3. Competitive Forces Model

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  Companies must contend with five competitive forces which you need to analyses (F:
 Threat of new entrants /compotators
 Bargaining power of customers and buyers
 Bargaining power of suppliers
 Substitute products or services
 The intensity of rivalry/challenge among competitors

4. Value Chain Analysis

 Five primary activities that form the sequence of the value chain:
 Inbound logistics: receiving and handling inputs
 Operations: converting inputs to the product/service
 Outbound logistics: collect, store, and distribute the product/service to buyers
 Marketing and sales: the means/incentives for buyers to buy the product/service
 Service: enhancements/maintenance of the value of the product/service
Four supporting activities that underlie the entire value chain:
 Organizational infrastructure
 Human resources management
 Technology development
 Procurement

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5. E-Business Value Matrix
 It can be difficult for executives to priorities projects, therefore a ‗portfolio‘
management approach is valuable.
 Tool used by Cisco to ensure they are developing a well-rounded portfolio of IT
projects.
 Every IT project is meant to be placed into one of four categories to assess its value to
the company
 New fundamentals: Low-Low=provide a fundamentally new way of working in
overhead areas, not business-critical areas
 Operational excellence: High in criticality to business-Low in newness of
idea=medium risk because they may involve reengineering work processes
 Rational experimentation: Low in criticality to business-High in newness of idea=test
new technologies and ideas
 Breakthrough strategy: High-High=potentially have a huge impact on the company

E-Business Value Matrix

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6. Linkage Analysis Planning
 Examines the links organizations have with one another with the goal of creating a
strategy for utilizing electronic channels
 Methodology includes the following steps:
 Define power relationships among the various players and stakeholders:
 Identify who has the power
 Determine future threats and opportunities for the company
 Map out your extended enterprise to include suppliers, buyers, and strategic partners
 The enterprise‘s success depends on the relationships among everyone involved
 Some 70% of the final cost of goods and services is in their information content
 Plan your electronic channels to deliver the information component of products and
services
 Create, distribute, and present information and knowledge as part of a product or
service or as an ancillary good

The expanded enterprise

7. Scenario Planning
 Scenarios are stories about the way the world might be in the future
 The goal of scenario planning is not to predict the future (= hard to do!), but to
explore the forces that could cause different futures to take place
 Then decide on actions to take if those forces begin to materialize
 Long-term planning has traditionally extrapolated from the past and has not factored
in low-probability events that could significantly alter trends
 Straight-line projections have provided little help!
 Four steps in Scenario Planning:
 Define a decision problem and time frame to bound the analysis

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  Identify the major known trends that will affect the decision problem
 Identify just a few driving uncertainties
 Construct the scenarios

Challenges in Business planning

 Predicting and assessing opportunities

 Assuring consistency with organizational plans and objectives
 Building systems
 Maintaining information system performance
 Collaborating with IT professionals

Principles for Information systems planning

 Support the firm‘s business strategy with appropriate technical architecture

 Evaluate technology as a component of a larger system
 Design information systems to be maintainable
 Recognize the human side of technology use
 Support and control the technical system

Planning Role of the IS and User Departments

The IS department is responsible for producing the IS plan in conjunction with the user
departments

 Chief information officer (CIO, CEIO):- Leads the IS function, and is responsible for
making sure that the IS plan supports the firm's business plan
 Sponsors – senior managers who make sure resources are allocated for building and
maintaining the system
 Champions – individuals that recognize the importance of an IS, and exert effort to make
sure that others share that recognition
 IS steering committees – make sure that the IS reflects business priorities

Business strategy

Identifying Competitive Advantages

 To survive and thrive an organization must create a competitive advantage

 Competitive advantage – a product or service that an organization‘s customers place a
greater value on than similar offerings from a competitor
 First-mover advantage – occurs when an organization can significantly impact its
market share by being first to market with a competitive advantage

Competitive advantages are important for an organization but it is even more important to
understand that they are typically temporary since competitors are quick to copy competitive
advantages. United States was the first airline to offer a competitive advantage with its frequent

23
flyer (this first-mover advantage was temporary). Sony had a competitive advantage with its
portable stereo systems (this first-mover advantage was temporary) Microsoft had a competitive
advantage with its unique Windows operating system. Does Microsoft still has a competitive
advantage with its Windows operating system?

The five forces model – evaluating business segments

Porter‘s Five Forces Model determines the relative attractiveness of an industry

Buyer power

Buyer power – high when buyers have many choices of whom to buy from and low when their
choices are few. One way to reduce buyer power is through loyalty programs. Loyalty program –
rewards customers based on the amount of business they do with a particular organization

 Exert pressure
 Drive down prices
 Increase the quality of good

Supplier power

Supplier power –The suppliers have power to sell their products at higher prices. High when
buyers have few choices of whom to buy from and low when their choices are many. Supply
chain – consists of all parties involved in the procurement of a product or raw material.

24
Organizations that are buying goods and services in the supply chain can create a competitive
advantage by locating alternative supply sources (decreasing supplier power) through B2B
marketplaces

Business-to-Business (B2B) marketplace – an Internet-based service that brings together buyers

and sellers.

Threat of Substitute Products or Services

Threat of substitute products or services – high when there are many alternatives to a product or
service and low when there are few alternatives. Switching cost – costs that can make customers
reluctant to switch to another product or service. Involves organizations entering into an industry
whereby they will gain market share and competition will intensify

Six barriers to entry

 Economies of scale
 Product differentiation
 Capital Requirements
 Cost disadvantages
 Raw materials
 Favorable locations
 Government subsidies
 Distribution channels.

Porter’s Generic Strategies

Cost Leadership

Focuses on gaining competitive advantage by having the lowest cost in the industry

Aim

 To service mass market

25
Techniques

 Mass production
 Mass distribution
 Economies of scale
 Technology
 Product design

Differentiation

Concentrates on providing a unique product or service, developing a unique selling point (USP)
to ensure they are different from their competitors. Tailoring to individual customer segments

Techniques

 Extra features
 Quality
 Price

Focus/Differentiation Focus

Concentrates on a selected few target markets (focus) or seeks differentiation in its target
segment.

Aim

 Gain a competitive advantage through effectiveness rather than efficiency

Techniques

 Being clear in differences with competition

 Being clear in differences with other consumers
 Niche status

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 Chapter 3: Managing the Essential Technologies and Operations
2.1. Distributed systems: overall architecture
FOUR ATTRIBUTES OF DISTRIBUTED SYSTEMS

Degree to which a system is distributed can be determined by answering four questions:

1. Where is the processing done?

 Distributed processing is the ability for more than one interconnected processor to
be operating at the same time, typically for processing an application on more
than one computer at a time

 Goal: move the appropriate processing as close to the user as possible and to let
other machines handle the work they do best
 Permits interoperability-capability of different computers using different O.S. on
different networks to work together on tasks
 Two forms of interoperability (capability for different machines to work together
on tasks):
o communication between systems
o two-way flow between user applications
2. How are the processors and other devices interconnected?
 Connectivity among processors means that each processor in a distributed system
can send data and messages to any other processor through electronic
communication links
 Desirable to have at least two independent paths between two nodes to provide
automatic alternate routing (Planned Redundancy)
3. Where is the information stored?
Distributed databases either:
 Divide a database and distribute its portions throughout a system without
duplicating the data
 Users do not need to know where a piece of data is located to access it, because
the system knows where all the data is stored
 Store the same data at several different locations, with one site containing the
master file
 Issue: synchronization of data is a significant problem
4. What rules or standards are used?
 System wide rules mean that an operating discipline for the distributed system
has been developed and is enforced at all times
 These rules govern communication between nodes, security, data accessibility,
program and file transfers, and common operating procedures
 Since the 1990s = ―Open systems‖ concept-mix products from vendors using
open standards. Based on ―open-systems‖ - standardized interfaces that allow

27
 products to inter-operate across multi-vendor networks, operating systems and
databases
 Now = also API‟s - Application Program Interfaces: define the way to present
data to another system component. Makes writing distributed systems much
easier

WHEN TO DISTRIBUTE COMPUTING RESPONSIBILITIES

IS management needs a corporate policy for deciding when the development, operation and
maintenance of an application should be distributed. Individual end users and departments
should not be left on their own to make such decisions, especially where enterprise connectivity
is important.

1. Are the operations interdependent?

 When it is important that one operation knows what other is doing; their planning,
development, resources, and operations must be centralized
2. Are the businesses really homogenous?
 If they have a lot in common; e.g., IT needs for a fast-food franchise: processing may be
distributed, but planning and hardware selection should be centralized
3. Does the corporate culture support decentralization?
 Even if the business units do quite different things and don‘t need to know what each
other are doing, corporate culture (management control?) might still centralize finance,
HR, and systems planning.

TWO GUIDING FRAMEWORKS

1. AN ORGANIZATIONAL FRAMEWORK

A driving force behind distributed processing is to give people more control over their work.
This autonomy can happen at any of seven levels:

1. Business ecosystem or value chain (inter-enterprise)

2. Enterprise
3. Country or region
4. Site (plants, warehouses, branch offices)
5. Department or process
6. Work group or team
7. Individuals
 Locate processing power and DB at each level in the organization
 Top level deals with organizations that work closely together as buyer-seller, partner etc.
 Next three levels (Enterprise, Region and Site) are traditional domain of IS, where computers
resided in the past.
 Bottom three levels (Department, Team and Individual) are where the bulk of employees are
 Intent: give autonomy and decision-making power to better serve customers.

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 2. A TECHNICAL FRAMEWORK

Migration of computer power to end users will be driving force for network-based IS. SUMURU
- single user, multiple user, remote utility.

A. Processors:
 SU: single user, stand-alone and connected to LNs; clients
 MU: multiple user, serve local groups of users; server. Also heavy duty computation
for SUs, backups for MUs, program libraries for SUs, and database management.
 RU: remote utility, heavy-duty computing, corporate DB management, corporation
mainframes and value-added network services
B. Networks:
 LN: local networks, high-speed information transfer, LAN
 RN: remote networks, lower transfer speeds, WAN, MAN, Internet
C. Services that this network architecture provides:
 access
 file transfer
 e-mail
D. Standards needed in three areas:
 OS
 communication protocols: TCP/IP

TYPES OF DISTRIBUTED SYSTEMS:

1. HOST-BASED HIERARCHY
 A central, controlling mainframe at the top, PCs at the bottom, minicomputers in
between, Master/slave
 First data processing distributed system. Host computer central, controlling
component; terminals are access systems, Where is the data stored?:
 Could be at any level
 DBMS: SQL
2. DECENTRALIZED STAND-ALONE SYSTEMS
 Decentralized but does not really form a distributed system
 Holdover‟ from the past where departments put in their own minicomputers with
no intention of connecting them to the corporate host or to other departmental
systems
 Still a valid method for some companies
 Many such ―islands of computing‖:
 Little data flow amongst, except upward to corporate systems
 A major goal in introducing ERP systems was to replace such disparate systems –
in finance, manufacturing, administration – with a single platform of inter-
connectable modules to serve these various functions.
3. PEER-TO-PEER LAN-BASED SYSTEMS

29
  No hierarchy
 ―Peer-to-peer‖ communications
 Interconnecting LANs rather than hierarchical communications through a central
hub
 No ―superior‖ computer
4. HYBRID ENTERPRISEWIDE SYSTEMS
 Combination hierarchy (mainframe-based, favored for corporate computing) and
LAN-based (favored by departments)
 Connected via WANs etc.
 The structure of choice for many years
 Allows company to link ―automation islands‖ and retain IT investments, begin
to automate business processes (cooperative processing)
 Such cooperating processes allow companies to take advantage of specialized
computer programs, while at the same time extending the usefulness of some
legacy systems
 The process of pulling together such individual applications or components is
called systems integration
5. CLIENT-SERVER SYSTEMS
 The ‟90s version of distributed systems
 Arose to take advantage of the processing capabilities of both host machines and PCs in
the same system
 Splits the computing workload between the client, which is a computer used by the user
and can sit on the desktop or be carried around (e.g. WAP mobile phone), and the
server, which answers the request

Three components being split are:

o Presentation software: what user sees (P)

o Application software (A)
o Data (D)
 Distributed presentation
 Remote presentation
 Distributed application function
 Remote data management
 Distributed database(s)
 Another way to look at it = to view their architecture
 Preferred: three-tier architecture:
o Tier 3: the super server/mainframe. Allows inclusion of legacy applications,
short-lived and fast-changing data, and integrity rules
o Tier 2: specialized servers, dedicated to housing databases or middleware-
software to ease connection between client and server. Also, department-
specific data that does not change often
o Tier 1: clients (some of which could be portable) connected through network

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Benefits of Client-Server Computing:

 Better access to information:  encourages people to work together

 Improved customer service via networks
 Ability to communicate customer  Supports new organizational
needs, and structures via its connectivity
 Anticipate customer needs. 
 Reduce cycle times  Allow companies to compete better.
 Increases organizational flexibility:  Empowered employees:
 allows new technology to be added  Blend autonomy of PCs with system
more easily without affecting rest of wide rules and connectivity of
system traditional IS
 streamlines work flow between  Shifts focus of computing to users
functional areas

Drawbacks Client-Server Computing:

 Not lower in cost than mainframes because they entail so much
 coordination
 Easier for users, far more complex for IS What looked like simple connections have
turned into large, often fragile, complex systems
6. INTERNET-BASED COMPUTING
 In the late 1990s, the client-server trend was
 „interrupted‟ (augmented?) by the „Internet‟
 Model of a distributed system includes the Internet
 The tenets of client-server remain
 Network-centric computing = a computer and a cloud (Figure 5-11)
 Network computers have (had?) not taken off (desktops) but the concept of utilizing
programs off the Internet has
 Network‟ computers (thin clients, toasters etc.) now = coming into their own!

Thin clients = logical for hand held but now = increasingly popular for the „desktop‟

o Updating new versions of software

o Authorized software (firm and purchased)
o One copy‟ of software

Server-Based Computing

 With more use of laptops which do not have strong security features
 Even individual downloads can require helpdesk support
 Solution = server based computing
 Applications reside on corporate servers rather than on laptops
 Applications can be securely accessed by any device, they can be updated directly on the
server, and they do not have to be tailored to run on specific machines

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Peer-to-Peer Computing

 This form of Internet computing distributes a task over a wide number of computers
(peers) connected to the Internet
 The main issue now is how to make money in this environment. One answer:
subscriptions, where people pay for access rather than for ownership
7. WEB SERVICES
 This second-generation Internet-based distributed system gives software modules URLs
(Internet addresses) so they can be called upon to perform their function as a service via
the Internet
 This development will permit widespread computer- to-computer use of the Internet. One
computer program or Web Service makes a request of another Web Service to perform its
task Web Services Standards:

Three software standards:

o XML (eXtensible Markup Language)

o WSDL (Web Services Definition Standard)
o UDDI (Universal Discovery, Description, and Integration

Three communication standards

o SOAP (Simple Object Access Protocol)

o HTTP (HyperText Transfer Protocol)
o TCP/IP (Transmission Control Protocol / Internet Protocol)
o (or set of tasks) and pass back the answer

Significance of Web Services

A. Viewing IS as proprietary has led to rigid business processes, which are slow to change
and respond to market changes
B. Web Services offers an IT architecture based on the openness of the Internet. Rather than
build proprietary systems, companies can obtain the functionality they need from the
Internet
C. This modularity permits handling a huge variety of possibilities by mixing and matching,
and allows easier cross-company system linking
D. Companies thus only pay for the functionality they use when they use it, which reduces
the number of IT assets companies need to house and maintain

The intent of an IT architecture is to bring order to the otherwise chaotic world of information
systems by defining a set of guidelines and standards, and then adhering to them. Because the
architecture needs to support how the company operates, it reflects the business strategy.
Furthermore = as business changes, the architecture needs to keep place.

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IT infrastructure: is the foundation of an enterprises Provides the capability for reliable services
and sharing. Includes both the technical and managerial expertise required to provide these
services. Shared characteristics differentiate an infrastructure from IT investments used by just
one function. Elements can include:

 Company-wide networks
 Data warehouses
 Large scale computing facilities

THE IMPORTANCE OF IT INFRASTRUCTURE

Infrastructure investments are a vital part of corporate information systems .Yet they are the
most difficult to cost-justify initially and to quantify benefits afterwards.

The IT infrastructure is the shared and reliable services that provide the foundation for the
enterprise IT portfolio. IT infrastructure is very similar to public infrastructure; on top of an IT
infrastructure sit applications that perform a business‘s processes.

a. The bottom of four layers consists of technology components, such as computers and
database management system packages.
b. The third layer is the human IT infrastructure layer, which translates the components
(which technologists can understand), into services (which business users can
understand).
c. The second layer is shared IT services, which present the infrastructure as a set of
services that users can draw upon and share to conduct business.
d. The top layer is the shared and standard applications layer, which includes stable
applications (such as accounting and HR)

THREE VIEWS OF INFRASTRUCTURE

IT investments can provide:

1. Economies of scale (utility):

 Infrastructure cost as an administrative expense
 Minimize expense
 Outsourcing may be viewed favorably because the IT infrastructure is not seen as
strategic
2. Support for business programs (dependent):
 Infrastructure treated as business expense
 Measured by short-term business benefits
 Infrastructure planning in current business plan
 Network = critical
3. Flexibility to meet changes in the marketplace (enabling):
 Primary benefit long-term flexibility
 Intended to provide the foundation for changing direction in the future

33
  IT cost seen as business investment

2.2. Managing telecommunications

Telecommunications = electronically sending data in any form from one place to another
between.

 People
 Machines, or
 Objects

Generally, IS departments have been responsible for designing, building, and maintaining the
information highway in the same way that governments are responsible for building and
maintaining streets, roads, and freeways. Once built, the network, with its nodes and links,
provides infrastructure for the flow of information and messages. Telecom is the basis for the
way people and companies work today. It provides the infrastructure for moving information and
messages.

THE EVOLVING TELECOMMUNICATIONS SCENE

Even with the recent „downturn‟ (correction?) in some countries – the changes in Telecom are
coming fast and furiously. Here are some major changes taking place:

A New Telecommunications Infrastructure is Being Built. The oldest part of the

telecommunications infrastructure is the telephone network

This global network was built on twisted-pair copper wires and was intended for voice
communications. It uses analog technology, which although appropriate for delivering high-
quality voice, is inefficient for data transmission Dedicated circuit (switching) the basic traffic-
handling mechanism had to change for data. Today, the new telecommunications infrastructure is
being built around the world aimed at transmitting data, and consists of:

 Wired - fiber optic links

 Wireless – radio signals

Both use packet switching, where messages are divided into packets, each with an address
header, and each packet is sent separately. No circuit is created; each packet may take a different
path through the network. Packets from any number of senders and of any type, whether e-mails,
music downloads, voice conversations, or video clips, can be intermixed on a network segment.
Making these next generation networks able to handle much more traffic and a great variety of
traffic. This architecture allows new kinds of services to be deployed much more rapidly.

The Internet can handle all kinds of intelligent user devices, including:

 Voice-over-IP (VoIP) phones

 Personal digital assistants (PDAs)
 Gaming consoles, and

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  All manner of wireless devices

The global telecom infrastructure is changing from a focus on voice to a focus on data. The
telecom structure of old was originally provided by (often Government owned) monopolies.

Gradually, the telecom industry has been deregulated. The telecom industry is becoming like the
computing industry in that each year brings „predictable‟ (and huge‟) improvements. Bandwidth
on fiber is now doubling capacity every four months.

THE INTERNET IS THE NETWORK OF CHOICE

What has surprised most people is the Internet‘s surprisingly fast uptake for business use. As did
the fast plummet of the dot-com and telecommunications industries. In the late 1990s, the
Internet caught most IS departments by surprise, not to mention the hardware and software
vendors who serve the corporate IS community. The Internet actually began in the 1960s when it
was called ARPANET, mainly used for electronic mail. By 1993, it was still mainly a worldwide
network for scientists and academics, text only - no graphics.

That all changed in 1994 when the World Wide Web was invented (By Tim Berners-Lee at
CERN in Geneva.)This graphical ―layer‖ of the Net made it much more user friendly:

 Web sites had addresses specified by their universal resource locator (URL)
 Its multimedia Web pages were formatted using hypertext markup language (HTML)
 All the Web sites could be accessed via an easy-to-use browser on a PC
 At first populated by computer geeks‟ homepages, business (and „normal‟ people‘s) use
of the Web skyrocketed by the late 1990.

The Internet has done for telecom what the IBM PC did for computing: brought it ―to the
masses‖. In 1981, when the IBM PC was introduced, its architecture was open. An entire
industry developed around this open architecture. The same is happening with the Internet
because it provides the same kind of openness. Like the PC, this openness yields the most
powerful solutions and the most competitive prices. The Internet has three attributes that make it
important to corporations:

 Ubiquity
 Reliability, and
 Scalability

Today, the protocols underlying the Internet have become the protocols of choice in corporate
networks, for internal communications as well as communications with the outside world. The
norm is now end-to-end Internet protocol (IP) networks.

Not long after creating intranets, businesses realized they could extend the intranet concept into
an extranet. A special part of the intranet for use by trading partners, customers, and suppliers for

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electronic commerce. The notion caught on and extranets have become an important component
of B2B e-commerce.

Digital convergence is the intertwining of various forms of media – voice, data and video.
Convergence is now occurring because IP has become the network protocol of choice. When all
forms of media can be digitized, put into packets and sent over an IP network, they can be
managed and manipulated digitally and integrated in highly imaginative ways IP telephony and
video telephony have been the „last frontiers‟ of convergence – and now they are a reality.

IP TELEPHONY

The use of Internet to transmit voice to replace their telephone system. Few companies have
given up their telephone networks for a VoIP network, but as the cost differential continues,
more will switch. Became hot‟ in 2004. Previously the voice quality wasn‘t there.

Rather than analog, the IP phone generates a digital signal Routed over the LAN like any other
data in packets. Either:

 To another IP phone on the LAN

 Through the company‘s WAN to a distant IP phone on another of the company‘s LANs,
or
 Through an IP voice gateway to the PSTN (Public Switched Telephone Network) to a
standard telephone

VIDEO TELEPHONY

Not video conferencing via a PBX (private branch exchange), but rather video over IP. With the
appropriate IP infrastructure, video telephony can be, say, launched from an instant- messaging
conversation. IP phones with cameras also facilitate it, phone to phone. Heaps of new converged
products are now flooding the market now that high quality voice has become IP based.

The Internet and its protocols are taking over. To understand the complexity of
telecommunications, we now look at the underlying framework for the Internet: the OSI
Reference Model

THE WIRELESS CENTURY BEGINS

The goal of wireless is to do everything we can do on wired networks, but without the wire.
Wireless communications have been with us for some time. Mobile (cell) phones, pagers,
VSATs, infrared networks, wireless LANs etc. We are just on the cusp of an up-tick in wireless
use for all types of networks. The 20th century was the Wire line Century; the 21st will be the
Wireless Century.

Some frequencies of the radio spectrum are licensed by governments for specific purposes;
others are not. Devices that tap unlicensed frequencies are cheaper = no big $ licensing fees.
BUT = possibility of collision between signals.

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  Wireless Personal Area Networks (WPANs): Provide high-speed connections between
devices that are up to 30 feet apart
 Wireless Local Area Networks (WLANs): Provide access to corporate computers in
office buildings, retail stores, or hospitals or access to Internet ―hot spots‖ where people
congregate
 Wireless Metropolitan Area Networks (WMANs): Provide connections in cities and
campuses at distances up to 30 miles
 Wireless Wide Area Networks (WWANs): Provide broadband wireless connections over
thousands of miles30.

The only two wireless technologies are infrared light and radio airwaves the bandwidth
spectrum, which illustrates where the different technologies lie Cell (mobile) phones use radio
transmitters and receivers Call is passed from one cell to another – fades out of one and into
another. Much of the bandwidths and radio waves are regulated by governments. In the main,
GSM has become the mobile telephony standard for all but the Americas. Unlike the computing
industry, a number of leading global telecom manufacturers is outside the United States. NTT is
in Japan, Ericsson and Nokia are in Scandinavia.

The first cell phones used analog technology and circuit switching, now called first-generation
(1G) wireless.

2G cellular. 2G, which predominates today, uses digital technology, though it is still circuit
switched. It aims at digital telephony, not data transmission, but 2G phones can carry data. 2G
can use a laptop with a wireless modem to communicate. Not always the most „reliable‟. 2G can
carry messages using short messaging service (SMS).

2.5G cellular is extending the life of 2G digital technologies. Essentially adds data capacity to a
2G network. The problem with adoption has been pricing

The goals of 3G are to provide WANs for PCs and multimedia, allowing bandwidth on demand.
CDMA (code division multiple access) is the universal standard for 3G. It faces the same pricing
issues at 2.5G – perhaps worse.

New entrants are looking for 3G alternatives

One is mobile broadband IP, which could actually provide 4G, services (the user paying for
different kinds of services). Wireless mesh networks. Links are radio signals not wires. More
flexible but uses a lot of battery power. VSAT (Very Small Aperture Terminal) technology is
taking off in some countries because it is seen as the best technology for providing stationary
wireless broadband. Provided by DSL, coaxial cable.

IS WIRELESS SECURE?

 Security is a major issue today

 Eavesdroppers need special equipment

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  Radio scrambling and spread-spectrum technologies add security, encryption protects
data, and eventually , 802.11i will provide a framework for security
 Requires eternal vigilance
Note: the network is often not the main problem
 Although a lot of attention is focused on all the new wireless services, a troubling
question has not yet been answered: Are these transmissions safe for humans?
 It is quite possible that there could soon be a backlash against wireless devices, similar to
protests against genetically modified organisms

2.3. Managing information resources

―Managing information resources‖ initially meant managing data, first in files, then in corporate
databases which were:

 Well structured
 Carefully defined, and
 Controlled by IS department

Next = expanded to include ―information‖ (data with meaning) Also = much talk of managing
knowledge. With the emergence of the Internet, talk has now turned to managing content: Text,
graphics, sound, video and animation.

Data vs. Information vs. Knowledge

 Data: facts devoid of meaning or intent

 Information: data in context
 Knowledge: information with direction or intent

Corporate databases are still a (the?) major IS department responsibility

 Sometimes housed in a variety of database models

 Production databases – transaction
 Data warehouses

Information in the form of documents (electronic or paper) and Web content has exploded the
size of databases organizations now manage. Knowledge management is becoming a key to
exploiting ―intellectual assets‖. Information resources need to be well managed as information
becomes an important strategic resource.

MANAGING DATA

Database management systems are the main tool for managing computerized corporate data.
They have been around since the 1960s and are based on two major principles: A three- level
conceptual model and several alternatives „data models‟ for organizing the data.

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Level 1 - The external, conceptual, or local level: containing the various ―user views‖ of the
corporate data that each application program uses. Not concerned with how the data will be
physically stored or what data is used by other applications.

Level 2 - The logical or ―enterprise data‖ level: Technical‟ (human) view of the database = under
control of the DBAs. Level 2 absorbs changes made at Level 3 such as using a new physical
storage device. Individual application programs in Level 1 do not need to be changed when the
physical layer changes

Level 3 - The physical or storage level, specifying the way the data is physically stored End user
not concerned with all these „pointers and flags‟ (how the data is physically organized) = they
are for use by the DBMS.

FOUR DATA MODELS

The second major concept in database management is alternate ways to define relationships
among data

1. Hierarchical model: structures data so that each element is subordinate to another in a

strict hierarchical manner
2. Network model: allows each data item to have more than one parent, Relationships
stated by pointers stored with the data
3. Relational model: where the data is stored in tables. Eight relational operations can be
performed on this data (Select, Project, Join, Product, Intersection, Difference, Union,
Microsoft Access) Relational systems are not as efficient as hierarchical or network
database systems, but because relational systems allow people to create relationships
among data on the fly, they are much more flexible. First used to handle end user queries
– they are now widely used in high-volume transaction systems with huge files. Hence,
they have become the database technology of choice in today‘s systems. Also = largely
due to decrease in costs of technology: processing and disk storage.
4. Object model: can be used to store any type of data, whether a:
 Traditional name or address,
 An entire spreadsheet,
 A video clip,
 A voice annotation,
 A photograph, or
 A segment of music

The tenets of objects have become increasingly important in the world of computing. E.g. Web
Services because the XML modules utilize object principles. retain traditional DBMS features
including:

 End user tools

 High level Query languages

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  Concurrency control
 Recovery
 Ability to handle huge amounts of data

Include two other major concepts

 Object management: Management of complex kinds of data such as

multimedia and procedures
 Knowledge management: Management of large numbers of complex rules for
reasoning an1d3 maintaining integrity constraints between data

Finally, security is of major importance in today‘s DBMSs. Problem = compounded by

distributed, heterogeneous Internet-linked databases. Companies may want to permit access to
some portions of their databases whilst restricting other portions. This selective accessibility
requires reliably authenticating users‟. Unless security and integrity are strictly enforced, users
will not be able to (fully) trust the systems.

Getting corporate data into shape

In the midst of this growing richness of data and information, companies are still struggling to
get their internal alphanumeric data under control. The installation of company-wide software
packages such as SAP, enterprise data warehouses, and intranets has once again brought to the
fore the problems of ―dirty data‖. Data from different databases that has: d different names, Uses
different time frames, or that otherwise does not match.

Attempts to get under control go back a long way: Late ‟60s / early ‟70s = DBMS then = the still
evolving and important role of ―data administration: managing all the computerized data
resources of a company.

The role of data administration

The use of DBMS - database management software, reduced, to some extent, the problems of
inconsistent and redundant data in organizations. However merely installing & running a DBMS
is not sufficient to manage data as a corporate resource. Database administration: concentrates on
administering databases and the software that manages them. Data administration is broader:

To determine what data is being used outside the organizational unit that creates it. Whenever
data crosses organizational boundaries, its definition and format need to be standardized. Data
dictionaries are the main tools by which data administrators control standard data definitions.

ERP (enterprise resource planning)

To bring order to the data mess, data administration has four main functions:

a. Clean up the data definitions

b. Control shared data

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 c. Manage data distribution, and
d. Maintain data quality

Interestingly, many companies really did not take these four jobs seriously until the mid-1990s,
when they needed consistent data to install a company-wide ERP package. ERP provided the
means to consolidate data to give management a corporate-wide view of operations.

Managing information

Once enterprises get their data into shape, that data can more easily be turned into information.
―Information is power ―We are in the Information Age.‖ These and similar statements would
lead you to believe that managing information is a key corporate activity. Technology =
infrastructure; Asset = information that runs on that infrastructure. Internal record-based
information was the original focus of IS departments because it is the type of information that
computer applications generate and manage easily. External record-based = accessible via
Internet or public databases. Including subscription. Until recently = little attention to internal
and external document-based information because it was so difficult to manipulate in computers.
Intranets changed this: Documents = integral part of information on these sites, responsibility =
now on IS, even if just for technical issues. Four areas were responsibility of different areas but
now IS is likely to be involved in some way.

Data warehouse: Houses data used to make decisions. This data is obtained periodically from
transaction databases. The warehouse provides a snapshot of a situation at a specific time. Data
warehouses differ from operational databases in that they do not house data used to process daily
transactions: Operational databases have the latest data, Data warehouses = not so „time critical‟,
Like ERP systems, they, too, spurred getting record-based data into shape. The most common
data warehoused are customer data, used to discover how to more effectively market to current
customers as well as non-customers with the same characteristics.

The simplest (MIS) tools generate perforated reports or permit ad hoc queries. Warehouses are
reaching beyond reporting internal data. They are being combined with purchased data, such as
demographic data, late breaking news and even weather reports, to uncover trends or correlations
that competitors might not spot.

Key Concepts:

 Metadata: The part of the warehouse that defines the data. Metadata means ―data about
data.‖ Metadata explains the meaning of each data element, how each element relates to
each other, etc. It sets the standard – without it data from different legacy systems cannot
be reconciled, so the data will not be ―clean‖
 Quality data: Is the cleaning process to adhere to metadata standards: The older the data
the more suspect its quality

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  Data marts: Is a subset of data pulled off the warehouse for a specific group of users: In
the early 1990s, one huge warehouse was envisaged, but proved un- practical due to long
search times and large cost factors.

5 Steps in a Data Warehousing Project:

1. Define the business uses of the data

2. Create the data model for the warehouse
3. Cleanse the data
4. Select the user tools

Managing information document management

Even in today‘s Internet-rich world, paper still plays a major role in most enterprises. There is
also a need to move seamlessly between digital and printed versions of documents; hence, the
importance of document management. The field of electronic document management (EDM)
uses new technologies to manage information resources that do not fit easily into traditional
databases. EDM (Enterprise Data Management) addresses organizing and managing conceptual,
descriptive, and ambiguous multimedia content. Applying technology to process traditional
documents makes a major change in what documents can accomplish in organizations.

It is hard to think of anything more pervasive and fundamental to an organization than

documents. The impact of applying emerging technologies to document management is
potentially significant, EDM contributes to business process redesign. Numerous EDM
applications generate value. The Big 3‟ are: To improve the publishing process, to support
organizational processes, to support communications among people and groups. The concept of
just-in-time (printing, publishing and forms processing) pervades the design philosophy in all
three areas. Technology enables a major restructuring of the process of publishing and
distributing paper documents. Traditional Process – designed primarily for high volume and high
quality documents. Process has inefficiencies:

 Infrequent long print run requires storing documents which become obsolete between
runs
 60% of the total cost of delivering these documents is in storage & transportation

The value of documents is that they transfer information across time and space. Internet can help
but often still rely on „paper‟ documents. EDM can be used to facilitate such communications
among people and groups. Documents are still the vehicle for accomplishing most processes in
organizations. Many such = ―Workflow systems‖ – heavily based on the physical circulation of
paper forms. The use of technology to support processes generates significant value in reducing
physical space for handling forms, faster routing of forms, and managing and tracking forms
flow & workload. In addition to improving transaction-oriented business processes with EDM,
many organizations are improving the management processes of reporting, control, decision
making, and problem solving as well.

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Managing information content management

Corporate intranets now house documents that were previously paper-based. A major reason
content has become important to CIOs (chief information officer) is because it is a core
management discipline underlying online business. Without production-level Web content,
management processes, and technologies, large-scale e-business is not possible. Use of XML
moves Web content from being in a human- only readable format to being in a computer-
readable format. Thus, the content can be passed to back-end transaction processing systems and
cause an action to take place. To create a content management strategy, companies need to
understand the three phases of the content management life cycle:

 Managing Content Creation and Acquisition

 Content Administration and Safeguarding
 Content Deployment and Presentation

Content creation and acquisition need to focus on creating content quality

That‘s why it might be wise to buy some content from specialists – who are called syndicated
content – rather than create it in-house. The best organizational structure is to distribute content
creation and maintenance to content-expert employees. But to avoid anarchy, these dispersed
experts should be directed centrally, and use centrally-created formats and an automated
workflow system that moves their work along. The emphasis in this phase, like any operational
phase, is efficiency. Goal = achieve the most with the least effort. Content management tools can
be used to identify types of content and the business rules that apply to each type. Whereas
content creation should be distributed, content administration should be centralized. The
emphasis in this phase should be effectiveness:

Presenting the content so that it:

 Attracts visitors
 Allows them to navigate the site easily, and
 Leads them to the desired actions

Because this phase can determine the success of a firm‘s e- commerce efforts, it‘s best to design
a Website beginning with this phase. Then move on to ensuring content quality and processing
efficiency. Today most Web sites need certain features to attract and keep visitors. Two of the
most important are:

1. Personalization = allowing visitors to customize how they view the page

2. Localization = tailoring a site to a culture, market or locale

Blog = short for ―Web Log‖: Web site where an individual makes intermittent Web postings – an
online journal

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Powerful tools: Compete with major media, Influence on e.g. politics and company policy 2004
U.S. elections. Some forward thinking companies have recognized the power of this immediate
form of publishing and communication

 Used for crisis management

 Employees need to be careful else = trouble
 Opportunities and challenges for organizations

2.4. Managing operations

Due to mergers, the Internet, e-commerce, and the September 11 terrorist attacks, the subject of
computer operations has been receiving a lot of attention. Systems operations are important
because: If they are not professionally run: A company could suffer a computer or network crash
that could shut down their business for some period of time. It is not a trivial area, especially as
companies become increasingly reliant on networks and computers to run their business. The
main change in operations is the shift in viewpoint towards managing operations. Traditionally –
managing inward, i.e.: managing one‘s own operations staff. Today – just as likely to mean
managing outward = managing relationships with (external) service providers. IT service
providers who have taken over the day- to-day operational work.

What are operations?

A Typical MIS Department Budget: 33% Systems and Programming, 70% Maintenance, 30%
New Development, 10% Administration and Training, 57% Operations Involve more $$$ than
any other part of the IS department. Very involved (difficult), challenging and rewarding area

Operational problems are obvious to the entire company:

 Response times are slow

 Networks are down
 Data isn‘t available
 Data is wrong

Three strategies to improve operations:

 Buy more equipment

 Continuously fight fires and rearrange priorities, getting people to solve the problems at
hand
 Continually document and measure what you are doing, to find out the real problems, not
just the apparent ones. Then set standards and manage to them = the preferred solution

OPERATIONAL MEASURES

External: What the customer sees:

 System uptime

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  Response time
 Turnaround time
 Program failures

Internal: Of interest to systems people:

 Computer usage as % of capacity

 Disk storage used
 Job queue length

The importance of good management

The corporate culture created by IS management must recognize and value good operations.
Skills of an Operations manager = similar to that needed in e.g. a factory.

 Manager must schedule work to meet delivery dates,

 monitor performance
 respond quickly to problems

The key to managing operations is the same as in any management job: Set standards, and then
manage to those standards by finding outstanding operations manage.

What‘s new in operations?

Companies have „cleaned their operational house‟. More Operations managers are managing
outward but CIOs must not relinquish responsibility for Operations. Ensure their people are
properly managing relationships Operations are being „simplified‟ Centralizing applications in
one place rather than distribute them on PCs. Server based computing operations are being
offloaded. Their attention used to be focused on ensuring they had the in-house expertise to keep
systems and networks up and tuning. Their attention is now toward determining where best to
perform the various kinds of operations: In house or with a third party (or permutations and/or
combinations thereof), Then manage it accordingly.

Outsourcing information systems (IS) functions

Outsourcing means turning over a firm‘s computer operations, network operations, or other IT
function to a vendor for a specified time. CIOs are expected to at least to „prove‟ that their in-
house operations are as efficient and effective as if they were outsourced: Shared Services
concept should outsource what they do not do well.

Driving forces behind outsourcing

 Focus on core businesses: In the 1980s, this led to huge amount of merger and acquisition
activity.
 Shareholder value: Companies were ―priced‖ based on their shareholder value, that is,
their discounted cash flow, as a result of high-yield bonds that allowed a few people to

45
 buy a company and leverage it with debt. Management must stress value, they must
consider outsourcing in all their nonstrategic functions.

CHANGING CUSTOMER-VENDOR RELATIONSHIPS

Relationships have expanded from buying professional services, to buying products and
transactions, to integrating systems, to outsourcing – the most bundled approach to contracting.
In this evolution:

 CIOs have increasingly lost control: More activities turned over to outsiders
 Providers take on more risks
 Provider‘s margins increase: Risks also improve: Don‘t get ―Nothing for nothing!‖, and
 Importance of choosing the right provider becomes more important

Outsourcing‘s history

In 1989 only (full) IT outsourcing was available. Essentially began with „big-bang‟ deals. The
goal was purely financial. Problems occurred – „us VS them‟ and culture clash. Note:
„Outsourcing‟ existed in many other areas and had for years

Early 1990s: Transitional outsourcing. Two routes outsourcing legacy systems. Maintenance of
their legacy systems – hence – staff concentrate on building new client server systems. Client
server development to specialists & keep maintenance in- house

Mid to late ‟90s = Best-of-breed outsourcing. Selective outsourcing began ―Collaborative

outsourcing‟ one company prime contractor and secondary external service providers.

Shared services ―in-sourcing‖ to shared service group

 Improved efficiencies & Saved money

Business process outsourcing

 As IT Outsourcing „matured‟ it became a commodity service

 Profit margins dropped and Competitors rose
 Higher margins in specialized specific areas
 Business process of which IT was a significant component

Managing outsourcing:

1. Organizational structure

Managing outsourcing is different from managing internal staff .One reason = it is a joint effort
between parties that may not have the same goals.

Typically, parties establish layers of joint teams.

 Top-level team: final word in conflict resolution

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  Operational team: oversees day-to-day functioning
 Joint special purpose teams: created from time to time to solve pressing issues
 Committees: oversee the use of formal change management procedures
 Relationship Manager(s): look after the „relationship‟
2. Governance
 The foundations of governing an outsourcing
 relationship are laid in the (LARGE) contract(s)
 Service Level Agreement (SLA)
 Responsibilities, performance requirements, penalties, bonuses
3. Day-to-day working
 Recommendations to manage day-to-day interactions:
 Facilitation becomes the mode of working. Rather than say ―do this‖, the
approach becomes ―how can we solve this together‖
 Realize that informal ways of working may disappear
 Loss of informal ways of working may add rigor
 Integration of the two staffs requires explicit actions
 Does not happen naturally
 Explicit policies are likely to be needed
 Don‘t unduly restrict outsourcing staff access
 Joint celebrations
 Invite each other to meetings
 The best way to manage day-to-day is communicate frequently
4. Supplier development
 Topic that is receiving increased attention
 Buying parts and services that go into one‘s own products and services
 Assisting one‘s suppliers to improve their product and services by generally
improving their processes

Offshoring

To round out our discussion of outsourcing, we turn to a topic receiving much attention today:
sending work offshore. Offshore outsourcing differs in some unique ways from domestic
outsourcing. Some areas to be considered:

a. Offshoring options are broadening

b. Both parties need cultural training to bridge cultural differences
 Clients = cultural integration programs
 Providers = accent neutralization
c. Communication issues need to be addressed from the outset

―Yes‖: Asia = ―I hear what you are saying‖, West = ―I can do what you ask‖ or ―I agree with
you‖

Tips

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 Avoid colloquialisms such as sporting analogies
 Use short, concise sentences with common words
 Have the provider write a „statement of work‟ to gauge understanding
 Get all commitments in writing
 Include on your team someone who know their culture
 Communication issues continue throughout offshore relationships
 Country laws need to be followed

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 Chapter 4: Managing System Development
4.1 Technologies for Developing Systems
The process of creating and maintaining information systems is called systems development or
systems analysis and design. The following diagram shows that it involves all five components
of an information system. In addition to technical knowledge, it requires business knowledge and
management skill.

Information Systems Strategic Plan

The Information Systems strategic plan is a set of long-range goals that describe the Information
Technology architecture and major Information Systems initiatives needed to achieve the goals
of the organization. The Information Systems strategic plan must meet three objectives:

 It must be aligned with the organization‘s strategic plan.

 It must provide for an Information Technology architecture that enables users,
applications, and databases to be seamlessly networked and integrated.
 It must efficiently allocate Information Systems development resources among
competing projects, so the projects can be completed on time, within budget, and have
the required functionality.
 The Information Systems strategic plan states the mission of the Information Systems
department, which defines the department‘s underlying purpose.
 The mission helps to answer questions relating to three major issues:
o Efficiency: Does the Information Systems function help the organization reach its
goals with minimum resources?
o Effectiveness: Does the IS function help the functional area managers (and
executives) do the right things?
o Competitiveness: Does the Information Systems function engage in projects that
will enhance the organization‘s competitive position?

A typical Information Systems operational plan contains the following elements:

1. Mission: The mission of the Information Systems function

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 2. Information Systems environment: A summary of the information needs of the
functional areas and of the organization as a whole
3. Objectives of the Information Systems function: The Information Systems function‘s
current best estimate of its goals
4. Constraints on the IS function: Technological, financial, and personnel limitations on
the Information Systems function
5. Long-term system‘s needs: A summary of the systems needed by the company and
the Information Systems projects selected to reach organizational goals
6. Short-range plan: An inventory of present projects, and a detailed plan of projects to
be developed or continued during the current year

4.2 Management Issues in System Development

Challenges on system development

Here are some of the challenges you might face in a system development project:

 It‘s very difficult to determine the requirements of a system which include data,
procedures, communications, and processing requirements.
 The requirements are always changing, even as the system is being developed.
 Scheduling and budgeting are difficult to determine.
 Technology will change throughout the system development process.
 As development teams become larger, the average contribution per worker
decreases and causes diseconomies of scale.

Systems Development Lifecycle (SDLC)

A systems development lifecycle (SDLC) has three primary objectives:

1. ensure that high quality systems are delivered,

2. provide strong management controls over the projects, and
3. Maximize the productivity of the systems staff.

Systems Development Life Cycle (SDLC) emphasizes decision processes that influence system
cost and usefulness. These decisions must be based on full consideration of business processes,
functional requirements, and economic and technical feasibility in order to produce an effective
system. The primary objectives of any SDLC are to deliver quality systems that:

1. meet or exceed customer expectations promised and within cost estimates,

2. work effectively and efficiently within the current and planned information technology
infrastructure, and
3. Are inexpensive to maintain and cost-effective to enhance.

This SDLC establishes a logical order of events for conducting System development that is
controlled, measured, documented, and ultimately improved.

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Systems Development Lifecycle (SDLC) Objectives

An SDLC is developed to disseminate proven practices to system developers, project managers,

program/account analysts and system owners/users throughout any organization.

The specific objectives expected include the following:

 To reduce the risk of project failure

 To consider system and data requirements throughout the entire life of the system
 To identify technical and management issues early
 To disclose all life cycle costs to guide business decisions
 To foster realistic expectations of what the systems will and will not provide
 To provide information to better balance programmatic, technical, management, and cost
aspects of proposed system development or modification
 To encourage periodic evaluations to identify systems that are no longer effective
 To measure progress and status for effective corrective action
 To support effective resource management and budget planning
 To consider meeting current and future business requirements.

Systems Development Life Cycle (SDLC) Phases

The SDLC includes phases, for example ten phases in this model; during which defined IT work
products are created or modified. The phases occur when the system is disposed of and the task
performed is either eliminated or transferred to other systems. The tasks and work products for
each phase are described in subsequent chapters. Not every project will require that the phases be
sequentially executed. However, the phases are interdependent. Depending upon the size and
complexity of the project, phases may be combined or may overlap.

The Traditional Systems Development Life Cycle (SDLC): The systems development life cycle
(SDLC) is the traditional systems development method used by most organizations today. The
SDLC is a structured framework that consists of sequential processes by which information
systems are developed. In the past, developers used the waterfall approach to the SDLC, in
which tasks in one stage were completed before the work proceeded to the next stage. Today,
systems developers go back and forth among the stages as necessary. Systems development
projects produce desired results through team efforts. Development teams typically include
users, systems analysts, programmers, and technical specialists.

Users are employees from all functional areas and levels of the organization who will interact
with the system, either directly or indirectly. Direct interaction means that users will make
hands-on use of the system, and indirect interaction means that users will use the outputs from
the system. Systems analysts are information systems professionals who specialize in analyzing
and designing information systems. Programmers are information systems professionals who
modify existing computer programs or write new computer programs to satisfy user

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requirements. Technical specialists are experts on a certain type of technology, such as databases
or telecommunications.

Figure 4.2 Systems development phase

1. Systems Investigation

Systems development professionals agree that the more time invested in understanding the
business problem to be solved. For these reasons, systems investigation begins with the business
problem. Feasibility studies: The next task in the systems investigation stage is the feasibility
study. The feasibility study determines the probability of success of the proposed systems
development project and assesses the project‘s technical, economic, and behavioral feasibility.

2. Systems Analysis

Once a development project has the necessary approvals from all participants, the systems
analysis stage begins. Systems analysis is the examination of the business problem that the
organization plans to solve with an information system. This stage defines the business problem,
identifies its causes, specifies the solution, and identifies the information requirements that the
solution must satisfy. Understanding the business problem requires understanding the various
processes involved.

The systems analysis stage produces the following information:

 Strengths and weaknesses of the existing system

 Functions that the new system must have to solve the business problem
 User information requirements for the new system

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  Armed with this information, systems developers can proceed to the systems design
stage.
3. Systems Design

Systems analysis describes what a system must do to solve the business problem, and systems
design describes how the system will accomplish this task. The deliverable of the systems design
phase is the technical design that specifies the following:

 System outputs, inputs, and user interfaces

 Hardware, software, databases, telecommunications, personnel, and procedures
 How these components are integrated?
 This output is the set of system specifications.

Systems design encompasses two major aspects of the new system:

 Logical systems design states what the system will do, with abstract specifications.
 Physical systems design states how the system will perform its functions, with actual
physical specifications.
4. Programming

Systems developers utilize the design specifications to acquire the software needed for the
system to meet its functional objectives and solve the business problem. These structured
programming techniques include the following restrictions:

 Each module has one, and only one, function.

 Each module has only one entrance and one exit. That is, the logic in the computer
program enters a module in only one place and exits in only one place.
 There are no GO TO statements allowed.
5. Testing

Thorough and continuous testing occurs throughout the programming stage. Testing checks to
see if the computer code will produce the expected and desired results under certain conditions.
Testing requires a large amount of time, effort, and expense to do properly. However, the costs
of improper testing, which could possibly lead to a system that does not meet its objectives, are
enormous. Testing is designed to detect errors (―bugs‖) in the computer code. These errors are of
two types: syntax errors and logic errors.

6. Implementation

Implementation is the process of converting from the old system to the new system.
Organizations use four major conversion strategies: parallel, direct, pilot, and phased.

In a parallel conversion process: the old system and the new system operate simultaneously
for a period of time. That is, both systems process the same data at the same time, and the

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outputs are compared. This type of conversion is the most expensive, but also the least risky.
Most large systems have a parallel conversion process to lessen the risk.

The phased conversion process: introduces components of the new system, such as individual
modules, in stages. Each module is assessed, and, when it works properly, other modules are
introduced, until the entire new system is operational.

In a direct conversion process: the old system is cut off and the new system is turned on at a
certain point in time. This type of conversion is the least expensive, but the riskiest if the new
system doesn‘t work as planned. Few systems are implemented using this type of conversion,
due to the risk involved.

The pilot conversion process: introduces the new system in one part of the organization, such
as in one plant or in one functional area. The new system runs for a period of time and is
assessed. After the new system works properly, it is introduced in other parts of the organization.

7. Operation and Maintenance

After conversion, the new system will operate for a period of time, until (like the old system it
replaced) it no longer meets its objectives. Once the new system‘s operations are stabilized,
audits are performed during operation to assess the system‘s capabilities and determine if it is
being used correctly. Systems need several types of maintenance.

 The first type is debugging the program, a process that continues throughout the life of
the system.
 The second type is updating the system to accommodate changes in business conditions.
 The third type of maintenance adds new functionality to the system. This process
involves adding new features to the existing system without disturbing its operation.

Alternative Methods for Systems Development

Most organizations use the traditional systems development life cycle because it has three major
advantages: control, accountability, and error detection. These methods and tools include
prototyping, rapid application development, integrated computer-assisted software engineering
(ICASE) tools, and object oriented development.

Prototyping

Using the prototyping approach, systems developers first obtain only a general idea of user
requirements. That is, the developers do not try to obtain a complete set of user specifications for
the system and do not plan to develop the system all at once. Instead, they quickly develop a
prototype, which either contains parts of the new system of most interest to the users, or is a
small-scale working model of the entire system.

Joint application design (JAD)

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Joint application design (JAD) is a group-based method for collecting user requirements and
creating system designs. JAD is most often used within the systems analysis and systems design
stages of the SDLC.

Rapid application development (RAD)

Rapid application development (RAD) is a systems development method that can combine JAD,
prototyping, and integrated CASE tools (described below) to rapidly produce a high-quality
system. RAD is an iterative approach similar to prototyping, in which requirements, designs, and
the system itself are developed with sequential refinements. RAD and prototyping are iterative
and emphasize speed of development.

Typical RAD packages include:

Graphical user development environment: The ability to create many aspects of an application
by drag-and-drop applications.

Reusable components: A library of common, standard ―objects‖ such as buttons and dialog
boxes. The developer drags and drops these items into the application.

Code generator: After the developer drags and drops components into the design, the package
automatically writes computer programs to implement the reports, input screens, buttons, and
dialog boxes.

Programming language: Such as Visual Basic or C++. This package includes an integrated
development environment (IDE) for creating, testing, and debugging computer code.

Object-oriented development

Object-oriented development is based on a fundamentally different view of computer systems

than that found in traditional SDLC development approaches. The OO approach to software
development offers many advantages:

 It reduces the complexity of systems development and leads to systems that are easier and
quicker to build and maintain, because each object is relatively small and self-contained.
 It improves programmers‘ productivity and quality. Once an object has been defined,
implemented, and tested, it can be reused in other systems.
 Systems developed with the OO approach are more flexible. These systems can be
modified and enhanced easily, by changing some types of objects or by adding new
types.
 The OO approach allows the systems analyst to think at the level of the real-world
systems (as users do) and not at the level of the programming language. The basic
operations of an enterprise change much more slowly than the information needs of
specific groups or individuals. Therefore, software based on generic models (which the

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 OO approach is) will have a longer life span than programs written to solve specific,
immediate problems.
 The OO approach is also ideal for developing Web applications.
 The OO approach depicts the various elements of an information system in user terms
(i.e., business or real-world terms), and therefore, the users have a better understanding of
what the new system does and how it meets its objectives.

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 Chapter 5: Supporting Work
5.1 Supporting Decision Making
Perspective of Information Systems

Information systems can be best be understood by looking at them from both a technology and a
Business perspective. An information system can be defined technically as a set of interrelated
components that collect (or retrieve), process, store, and distribute information to support
decision making and control in an organization. In addition to supporting decision making,
coordination, and control, information systems may also help managers and workers analyze
problems, visualize complex subjects, and create new products.

From a business perspective, information systems are part of a series of value-adding activities
for acquiring, transforming, and distributing information that managers can use to improve
decision making, enhance organizational performance, and ultimately increase firm profitability.

An information system contains information about an organization and its surrounding

environment. Three basic activities input, processing, and output produce the information
organizations need. Feedback is output returned to appropriate people or activities in the
organization to evaluate and refine the input. Environmental factors such as customers, suppliers,
competitors, stockholders, and regulatory agencies interact with the organization and its
information systems.

Formal information systems can be either computer based or manual. Manual systems use paper-
and-pencil technology. These manual systems serve important needs. Computer-based
information systems (CBIS), in contrast, rely on computer hardware and software technology to
process and disseminate information. From this point on, when we use the term information
systems, we are referring to computer-based information systems—formal organizational
systems that rely on computer technology.

The business information value chain

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Managers and business firms invest in IT and systems because they provide the economic value
to the business. From a business perspective, information systems are part of a series of value-
adding activities for acquiring, transforming and distributing the information that managers can
use to improve decision making, enhance organizational performance to increase the firm
profitability. An information system creates value for the firm as an organizational and
management solution to challenges posed by the environment Contemporary approaches to
information system. Multiple perspectives on information systems show that the information
systems are the sociotechnical systems.

It can be divided into two approaches:

1. Technical approach

This emphasizes mathematically based models to study information systems as well as the
physical technology and formal capabilities of these systems. Computer science is concerned
with establishing methods of computation, storage and access. Management science emphasizes
on development of models for decision making and management practices.

2. Behavioural approach

It is concerned with the issues like strategic business integration, design, implementation,
utilization and management. It majorly focuses on the cognitive style of an individual. It also
focuses on technical solutions, changes in attitudes, management and organizational policies.

Integration of IT and IS Between People and Organizations

To fully understand information systems, you will need to be aware of the broader organization,
people, and information technology dimensions of systems and their power to provide solutions
to challenges and problems in the business environment.

Dimensions of Information Systems

a. Organizations: have a structure that is composed of different levels and specialties. Their
structures reveal a clear-cut division of labor. A business firm is organized as a hierarchy,
or a pyramid structure, of rising
b. People: A business is only as good as the people who work there and run it. Likewise,
with information systems they are useless without skilled people to build and maintain
them, and without people who can understand how to use the information in a system to
achieve business objectives.
c. Technology: Information technology is one of many tools managers use to cope with
change.
Computer hardware is the physical equipment used for input, processing, and output
activities in an information system. It consists of the following:
Computers of various sizes and shapes; various input, output, and storage devices; and
telecommunications devices that link computers together.

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 Computer software consists of the detailed, pre-programmed instructions that control and
coordinate the computer hardware components in an information system.

Organizations and Information Systems

The interaction between IS and Organization is complex and is influenced by many mediating
factors, including organization structure, standard, politics, and culture and management
decision. The organization is a stable, formal social structure that takes resources from the
environment and processes them to produce outputs.

Common Features of Organizations

Based on the hierarchical structure of an organization all the organizations share same
characteristics like: Clear division of labor, hierarchy, explicit rules and procedures, impartial
judgments, technical qualifications for positions, maximum organizations efficiency. All
organizations develop business processes, politics, and cultures.

Routines and Business Processes:

Individuals in the firm develop a routine for producing goods and services. Routines sometimes
called as standard operating procedures in terms of rules, procedures. Business processes
describes the functions involved in the firm.

Organizational Politics:

People in organization occupy different positions with different specialties, concerns and
perspectives. Political resistance is one of the great difficulties bringing about organizational
changes. Managers who know how to work with the politics of an organization will be more
successful than less skilled managers.

Organizational Culture:

Organizational culture is the set of fundamental assumptions about what products the
organization should produce, when, why, and for whom. Organizational culture is a powerful
restraint on change in technological changes.

Information systems and business strategy

Business strategy is a set of activities and decisions. This helps in strategic planning of an
organization. It determines the decisions related to products and services, competition, long term
goals. To understand how IT fits into the strategic planning it is necessary to consider the three
levels of business strategy such as Business level strategy, firm level strategy, industry level
strategy.

Business level strategy: It is based on the value chain model for managing supply chain. It is
concerned with the leveraging technology, information system products and services, systems to
focus on market trends, supply management and customer relationship.
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Firm level strategy: It focuses the usability of information technology. It helps to understand the
concept of enhancing core competencies,

Industry level strategy: It analyzes the strategy at industry level. The principal concept of this
strategy is information partnership, the competitive forces model, business systems, and network
economics.

Understanding Information Systems: A Business Problem-Solving Approach

Businesses face many challenges and problems, and information systems are one major way of
solving these problems. All of the cases in this book illustrate how a company used information
systems to solve a specific problem. The problem-solving approach has direct relevance to your
future career. In real-world business firms, a number of major factors are simultaneously
involved in problems. These major factors can usefully be grouped into three categories:
organization, technology, and people.

Dimensions of Business Problems

A Model of the Problem-Solving Process

There is a simple model of problem solving that you can use to help you understand and solve
business problems using information systems. Some of business problem solving Step process
are stated below.

1. Problem Identification

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The first step in the problem-solving process is to understand what kind of problem exists.
Before problems can be solved, there must be agreement in a business that a problem exists,
about what the problem is, about what its causes are, and about what can be done about the
problem given the limited resources of the organization. Problems have to be properly defined by
people in an organization before they can be solved.

2. Solution Design

The second step is to design solutions to the problem(s) you have identified. As it turns out, there
are usually a great many ―solutions‖ to any given problem, and the choice of solution often
reflects the differing perspectives of people in an organization. Some solutions emphasize
technology; others focus on change in the organization and people aspects of the problem.

3. Choice

Choosing the ―best‖ solution for your business firm is the next step in the process. Some of the
factors to consider when trying to find the ―best‖ single solution is the cost of the solution, the
feasibility of the solution for your business given existing resources and skills, and the length of
time required to build and implement the solution.

4. Implementation

The best solution is one that can be implemented. Implementation of an information system
solution involves building the solution and introducing it into the organization.

Decision-support systems

Decision: -Emphasis the primary focus on decision is making in problem situation rather than
subordinate activities a simple information retrieval, processing or reporting.

Support: -Clarifies the computers role in aiding rather than replacing the decision maker.

Systems: -Highlights the integrated nature the overall approach, suggested the wider context of
machine, user and decision environment.

Decision Support Systems (DSS) are a class of computerized information system that supports
decision-making activities. DSS are interactive computer-based systems and subsystems
intended to help decision makers use communications technologies, data, documents, knowledge
and/or models to complete decision process tasks. A decision support system may present
information graphically and may include an expert system or artificial intelligence (AI). Typical
information that a decision support application might gather and present would be,

 Accessing all information assets, including legacy and relational data sources
 Comparative data figures
 Projected figures based on new data or assumptions

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  Consequences of different decision alternatives, given past experience in a specific
context

Decision-support systems ("DSS") are specifically designed to help management make decisions
in situations where there is uncertainty about the possible outcomes of those decisions. DSS
comprise tools and techniques to help gather relevant information and analyze the options and
alternatives. Decision support systems (DSS) are interactive software-based systems intended to
help managers in decision-making by accessing large volumes of information generated from
various related information systems involved in organizational business processes such as office
automation system, transaction processing system, etc. DSS uses the summary information,
exceptions, patterns, and trends using the analytical models. A decision support system helps in
decision-making but does not necessarily give a decision itself.

The decision makers compile useful information from raw data, documents, personal knowledge,
and/or business models to identify and solve problems and make decisions.

There are two types of decisions - programmed and non-programmed decisions.

Structured, Programmable Decisions: A structured decision can be said to be programmable,

in the sense that unambiguous decision rules can be specified in advance. When a decision can
be programmed, an organization can prepare a decision rule or decision procedure. This can be
expressed as a set of steps to follow, a flowchart, a decision table or formula. Programmed
decisions are basically automated processes, general routine work, where: These decisions have
been taken several times. These decisions follow some guidelines or rules. For example,
selecting a reorder level for inventories is a programmed decision.

Unstructured, Nonprogrammable Decisions: An unstructured decision can be said to be

nonprogrammable. The unstructured decision has no pre-established decision procedure, either
because is too infrequent to justify the organizational cost of preparing a decision procedure or
because the decision procedure is not understood well enough or is too changeable to allow a
stable pre-established decision support. Non-programmed decisions occur in unusual and non-
addressed situations, so: It would be a new decision. There will not be any rules to follow. These
decisions are made based on the available information. These decisions are based on the
manger's discretion, instinct, perception and judgment. For example, investing in a new
technology is a non-programmed decision.

Characteristics of Decision Support Systems (DSS)

 Support for decision-makers in semi-structured and unstructured problems.

 Support for managers at various managerial levels, ranging from top executive to line
managers.
 Support for individuals and groups. Less structured problems often require the
involvement of several individuals from different departments and organization level.
 Support for interdependent or sequential decisions.

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  Support for intelligence, design, choice, and implementation.
 Support for variety of decision processes and styles.
 DSSs are adaptive over time.

Challenges in Decision Making

In today‘s corporate environment, there is encouragement for diverse and inclusive work
environment. Therefore, employees come together from a different background to achieve a
single organizational goal. However, to achieve this target several decisions need to be made.
And a good decision-making process will encounter challenges.

Some decision may be stalled due to lack of experience, in particular, area of operations.
Sometimes it is difficult to pin-point pain areas and fresh pair of eyes would be required to
highlight the problem. Often past experiences stop us from making a decision.

To overcome such challenges it is important to develop decision support system, team decision
support tool and executive information system.

Benefits of Decision Support Systems (DSS)

 Improves efficiency and speed of decision-making activities.

 Increases the control, competitiveness and capability of futuristic decision-making of
the organization.
 Facilitates interpersonal communication.
 Encourages learning or training.
 Since it is mostly used in non-programmed decisions, it reveals new approaches and
sets up new evidences for an unusual decision.
 Helps automate managerial processes.

Decision Support System which performs three tasks:

1. Data management: The Decision Support System stores customer and product
information. In addition to this organizational information, Lands‘ End also needs
external information, such as demographic information and industry and style trend
information.
2. Model management: The Decision Support System has to have models to analyze the
information. The models create new information that decision makers need to plan
product lines and inventory levels. For example, Lands‘ End uses a statistical model
called regression analysis to determine trends in customer buying patterns and forecasting
models to predict sales levels.
3. User interface management: A user interface enables Lands‘ End decision makers to
access information and to specify the models they want to use to create the information
they need.
In general User interface management deal about:

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  Combines all aspects of communication between a user and the Decision Support
System
 Dealing with factors related to ease of use, accessibility and human-machine
interactions (web-browser have been recognized as the most effective)
 Interaction between users (decision-makers) and computing
 Web browser provides a user-friendly and easy interface
 User interface management component focused on GUI, Natural language
processor and Interacts with model management and data management
subsystems For Examples Speech recognition and Display panel

Types of Decision Support System

There are a number of Decision Support Systems. These can be categorized into five types:

1. Communication-driven Decision Support System

Most communications-driven DSSs are targeted at internal teams, including partners. Its purpose
is to help conduct a meeting, or for users to collaborate. The most common technology used to
deploy the DSS is a web or client server. Examples: chats and instant messaging software, online
collaboration and net-meeting systems.

2. Data-driven Decision Support System

Most data-driven DSSs are targeted at managers, staff and also product/service suppliers. It is
used to query a database or data warehouse to seek specific answers for specific purposes. It is
deployed via a main frame system, client/server link, or via the web. Examples: computer-based
databases that have a query system to check (including the incorporation of data to add value to
existing databases.

3. Document-driven Decision Support System

Document-driven DSSs are more common, targeted at a broad base of user groups. The purpose
of such a DSS is to search web pages and find documents on a specific set of keywords or search
terms. The usual technology used to set up such DSSs is via the web or a client/server system.

4. Knowledge-driven Decision Support System:

Knowledge-driven DSSs or 'knowledgebase' are they are known, are a catch-all category
covering a broad range of systems covering users within the organization setting it up, but may
also include others interacting with the organization - for example, consumers of a business. It is
essentially used to provide management advice or to choose products/services. The typical
deployment technology used to set up such systems could be client/server systems, the web, or
software running on stand-alone PCs.

5. Model-driven Decision Support System

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Model-driven DSSs are complex systems that help analyze decisions or choose between different
options. These are used by managers and staff members of a business, or people who interact
with the organization, for a number of purposes depending on how the model is set up -
scheduling, decision analyses etc. These DSSs can be deployed via software/hardware in stand-
alone PCs, client/server systems, or the web.

End-user computing

End-user computing generally refers to a situation in which the target users of an information
and decision support system are involved extensively in the specification, development and use
of the system and its applications.

5.2 Supporting Collaboration

Collaboration occurs when two or more people work together to achieve a common Goal, Result,
Work product Greater than individuals working alone.

Collaboration is working with others to achieve shared and explicit goals. It focuses on
performing tasks or missions and is usually carried out in one company or other type of
organization, and between one company and another. You collaborate with a colleague in Tokyo
who has experience on an issue you know nothing about. Cooperate with many colleagues to
publish a company blog. If you work in a law firm, you participate with the accountants in an
accounting firm to service the needs of a client with tax problems.

Collaboration can be short-term, where it lasts a few minutes, or a longer term, depending on the
nature of the task and the relationship between the participants. Collaboration can be one-to-one
or many-to-many. Employees can collaborate in informal groups in the company's
organizational structure, or they can be organized into formal teams. Teamwork is
part of the organization's business structure for performing its tasks. Teams have a specific
mission that someone in the company assigned to them. They have to complete a job. Its
members need to cooperate in carrying out specific tasks and collectively accomplish the
team's mission. Which could be "win the game," "increase online sales by 10 percent" or"
prevent insulating foam from detaching from a space shuttle." Teams are often short-term,
depending on the issues they deal with and the time it takes to find a solution and complete the
mission.

Collaboration and teamwork are important today more than ever, for a variety of reasons.

 Changing nature of work. The nature of the work is different from the times of factory
manufacturing and pre-computer office work, where each stage in the production process
occurred independently of the others, and was coordinated by supervisors. The
work was organized in silos. In one silo, the work went from one station around to another,
from one desk to another, until the finished work was completed. Currently, the types of
work we have require closer coordination and interaction between the parties involved in
the production of the service or product. A recent report by consulting firm McKinsey and

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 Company argued that 41 percent of the U.S. workforce is now made up of jobs where
interaction (talking, emailing, presenting, and persuading) is the top value-added
activity. Even in factories, today's workers work in production groups.
 Growth of professional work. "Interaction" jobs tend to be professional jobs in the service
sector that require close coordination and collaboration. These require considerable
education, as well as sharing information and opinions to carry out the work. Each
actor brings specialized experience to the problem and everyone needs to consider
each other in order to perform the task.
 Changing organization of the company. For most of the industrial age,
managers organized work in a hierarchical manner. Orders went down the hierarchy, and
responses moved back up through it. Currently the work is organized into groups and
teams, and they are expected to develop their own methods to perform the task. Top-level
managers observe and measure results, but are much less likely to issue detailed
orders or operating procedures. This is partly because the experience has shifted to the
lower levels of the organization, as have decision-making powers.
 Changing area of the company. The company's work has changed from a single location to
several: offices or factories throughout a region, a nation, or even around the world. For
example, Henry Ford developed the first mass-produced car plant in a single factory in
Dearborn, Michigan. In 2010, Ford planned to produce nearly 3 million cars and
employ more than200, 000 employees in 90 plants and facilities worldwide. With this
type of global presence, the need for close coordination between design,
production, marketing, distribution and service undoubtedly takes on a new importance and
scale. Large global companies need to have team‘s working on a global basis.
 Emphasis on innovation. While we tend to attribute innovations in business and science to
sensational individuals, these people are more likely to work with a team of brilliant
colleagues, and all of them are above an extensive line of early innovators and early
innovations. Think of Bill Gates and Steve Jobs (founders of Microsoft and Apple), who
are highly valued innovators, and both created strong collaborative teams to fuel and
support innovation in their businesses. His initial innovations stemmed from close
collaboration with colleagues and partners. In other words, change is a group and social
process, and most of them stem from collaboration between individuals in a laboratory,
company, or government agencies. Strong collaborative practices and technologies
are believed to increase the pace and quality of innovation.
 Changing culture of work and business. Most collaborative research is in favor of the
notion that various teams produce better exits and faster than individuals working on
their own. Crowdsourcing and "wisdom of the masses") also provide cultural
support for collaboration and teamwork.

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Creating a collaborative culture and business processes

Collaboration is not done spontaneously in a company, especially if there is no culture of support

or business processes. Companies, especially large ones, in the past had a reputation for being
"command and control" organizations where top leaders devised all the issues of real importance,
and then ordered lower-level employees to execute top-level management plans. The
task of mid-level management was supposed to pass messages from higher to lower levels and
vice versa. Command and control companies required lower-level employees to carry
out orders without asking many questions, without any responsibility for improving
processes, and without rewards for teamwork or performing. If your team needed help from
another team, it was something the bosses had to work out. You never communicated
horizontally, but always vertically, so that management could control the process. All that was
required was for employees to come up to work and perform their work satisfactorily. Together,
the expectations of management and employees formed a culture, a series of assumptions about
common goals and how people should behave. Many business companies still operate this way.
A collaborative business culture and business processes are very different. Top-level managers
are responsible for getting results, but rely on teams of employees to achieve and implement
them. Policies, products, designs, processes, and systems are much more team-dependent
at all levels of the organization to devise, create, and manufacture products and services.
Teams are rewarded for their performance and individuals for their performance within it.
The role of mid-level managers is to create work groups, coordinate their work, and
monitor their performance. In a collaborative culture, top-level management
establishes collaboration and teamwork as vital to the organization, and actually implements it
for the top levels of the company as well.

5.3 Supporting Knowledge Work

Organizations that exist on the modern market are currently facing the challenges of
globalization, hyper competition, technological development and virtualization. The new
environment requires a different way of thinking and behavior for those, who want to stay
competitive and prosperous. That is why most organizations seek for new sources of advantage.
It is believed that presently the factors influencing organizational competitiveness has
transformed from physical and tangible resources to those based on knowledge. Thus,
organizations depend on the successful exploitations, application and integration of their
knowledge management (KM) process .It is generally accepted that since knowledge is
considered to be a critical factor for organization‘s survival, it should be captured, managed and
utilized in a way that fosters organizational development. Knowledge management is viewed as a
function that creates or locates knowledge, manages the flow of knowledge and ensures that
knowledge is used effectively and efficiently for the long-term benefit of the organization.
Therefore, effective organization of knowledge is in the heart of KM and the significance of KM
lies in the most gainful use of knowledge for organizational purposes. The group of people
engaged in Knowledge Management process are called knowledge workers (KWs). There are
three key features which differentiate knowledge work from other forms of conventional work.
Firstly, the KW adds value to work through mental activities. Secondly, the kind of thinking
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applied by KWs is not a step-by-step linear mental work – they have to be creative and non-
linear in their thinking. The third distinctive feature of knowledge work is that it uses knowledge
to produce more knowledge. The implementation of various IT systems for supporting
knowledge management processes has recently gained significant popularity. Information
technologies form the ground for KWs to apply and process knowledge. Knowledge
Management Information Systems (KMIS) are supposed to integrate functionalities and provide
comprehensive organization and control of the processes knowledge generation, transfer and
storage . That is why when studying the activity of knowledge workers, it is reasonable to pay
attention to the tools which assist them. It is necessary to examine the functionalities of these
KMIS systems and analyze whether they fully meet the requirements of knowledge workers and
what additions can be made to improve these systems‘ operation and, as a result, the KWs
efficiency.

Role Description
Controller Monitors the organizational performance based on raw information.
Helper Transfers information to teach others, once he passed a problem.
Sharer Disseminates information in a community.
Uses information and practices to improve personal skills and
Learner
competence.
Associates and accumulates information from different sources to
Linker generate
new information.
Creates personal or project related connections with people involved in
Networker the same kind
of work, to share information and support each other.
Is involved in personal or organizational planning of activities, e.g. to-do
Organizer lists
and scheduling.
Retriever Searches and collects information on a given topic.
Solver Finds or provides a way to deal with a problem.
Monitors and reacts on personal and organizational actions that may
Tracker
become problems

Knowledge workers’ roles and actions

According to technical systems (for instance, groupware, e-mail, databases, intranet etc.) are
applied in KM for collection, codification, storage, and manipulation of knowledge.
Technologies are used by KWs to facilitate access to information and its manipulation.
Information technologies (IT) are referred to as computer equipment and programs applied to
access, process, store, and disseminate information. As examples word processing, spreadsheet,
and electronic mail programs are mentioned. IT are designed to reduce the amount of time
workers spend on information access, management and manipulation and to increase the
accuracy of these processes and, at the same time, that IT and the Internet have made information

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easy-to-access, user-friendly and up-to-date. Moreover, the emerging mobile and wireless IT
support the mobile nature of the KWs job.

In accordance with the work of Knowledge Management Systems are characterized by such
terms as: knowledge warehouse, knowledge management software, technology or organizational
memory (information) system, e-learning suite, learning management platform, portal, document
management, collaboration or groupware. KMIS is defined as a system that functions to provide
a means by which knowledge from the past is brought to bear on present activities, thus resulting
in increased levels of effectiveness for the organization.

Importance of Knowledge Management

Knowledge provides a competitive advantage to an employee as well as the organization. The

data and information which come with knowledge help organization make an informed decision.
For example, knowledge about competitors pricing model or business strategy can help
organization work towards bettering the competitor. Historical data e.g sales data, pricing data,
etc. can help organization improve existing or proposed business initiative.

Knowledge management is a highly iterative process which consists of six major tasks like
create, capture, refine store, tag and circulate. The first step is to create or capture data and store
it at appropriate location. The second step is to refine the data into meaningful information. The
third step is to transmit information to relevant stakeholders.

There are two types of knowledge, which need to be capture as part of knowledge management.
The first type is hard data in terms of numbers and figures. The second type of knowledge is the
interpretation of data captured based on experience. The real need of the knowledge management
system is to provide access to the knowledge base whenever required.

Types of Knowledge

In general, there are two types of knowledge:

Tacit Knowledge: is that stored in the brain of a person. is personal, stored in the heads of
people, accumulated through study and experience, developed through the process of interaction
with other people grows through the practice of trial and error and the experience of success and
failure Is context-specific , difficult to formalize, record, or articulate. Mechanisms include,
among others, the use of information technology tools such as email, groupware, instant
messaging and related technologies. In managing tacit knowledge, the very first obstacle to most
organizations is identifying the tacit knowledge that is useful to the organization. Once relevant
tacit knowledge is identified, it becomes extremely valuable to the organization possessing it
because it is a unique asset that is difficult for other organizations to replicate. This very
characteristic of being unique and hard to replicate is what makes tacit knowledge a basis of the
organization‘s competitive advantage. Includes subjective insights, intuitions and conjectures.

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In any organization, tacit knowledge is the essential prerequisite for making good decisions. A
new executive not yet familiar with the organization will find it difficult to make good decisions
since he or she has yet to acquire tacit knowledge about the workings of the organization. Tacit
knowledge is therefore crucial to getting things done and creating value for the organization

This is the essence of the ―learning organization‖

Explicit Knowledge: is that contained in documents or other forms of storage other than the
human brain. Explicit knowledge may therefore be stored or imbedded in facilities, products,
processes, services and systems. Both types of knowledge can be produced as a result of
interactions or innovations. They can be the outcome of relationships or alliances. Represent an
accumulation of the organization‘s experience kept in a form that can readily be accessed by
interested parties and replicated if desired. In many organizations these knowledge assets are
stored with the help of computers and information technology.

Both tacit and explicit knowledge enable organizations to respond to novel situations and
emerging challenges

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 Chapter 6: The Challenges Ahead
6.1 Organizational Principles
As organization development evolves alongside institutional practices and insights into human
behavior, a big piece of the field is still missing: a set of principles that convey what
organizations must do well to thrive. Organizations are adept at identifying specific problems
and have at their disposal a host of interventions designed to resolve them, but they operate
without broader developmental criteria, or goals, that must be satisfied to preserve companies‘
ability to compete and grow.

Accordingly, below are 10 principles to guide developmental initiatives within your

organization.

1. Encourage cooperation.

The central objective of organization development is to achieve a cooperative institutional order

and quash destabilizing self-interest. Can you imagine a company that could survive with
members having divergent motives and antagonistic goals? And yet, the temptation to act in
ways contrary to the purposes of organizations is high. Indeed, often the easiest and most
lucrative course of action is to accept the benefits of group accomplishment such as
compensation while contributing little to the group‘s cause in return — much like a public radio
listener who partakes in the pleasures of programs without donating to the cause. (Or, as often
happens in technology companies, to benefit from the corporate association while concealing
one‘s best ideas that might personally pay off later.) One way companies try to solve this ―free-
rider‖ dilemma is by changing the calculus of the relationship through rewards and punishments.
A company might, for example, reward employees‘ displays of cooperation or provide public
accolades for teamwork, or censure against a lack of cooperation. A more effective and lasting
strategy, however, is to change the nature of work relationships. Friends cooperate more than
strangers, where the allure of self-maximizing behaviors is high. Consequently, good companies
expend a great deal of energy creating strong social bonds among employees. Group activities
that forge strong interpersonal connections may seem superfluous to the Type A ilk who do not
think socializing constitutes real work; however, just as the games children play are not just
games but safe encounters with the real world, the amusements in which companies engage are
not just amusements. They are affective bridges back to the organization that positively build
relationships and influence performance.

2. Organize for change.

Organizations that need to change often don‘t. Once-great companies have found their final
resting places in an expansive graveyard of slow-movers and has-beens. These companies failed
because they were unable to adapt to changing conditions and succumbed to capitalism‘s
unapologetic truth that only the fittest will survive. While employees often are portrayed as the
villains in these scenarios for their resistance, people in fact are amenable to change in all facets
of their lives when they believe in the necessity and appropriateness of change. In effective

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organizations, leaders upend paralysis by generating a consensus of meaning and action. They
build the case for change, create a positive mindset for change, convince others of the value and
legitimacy of the change efforts, and battle against systemic forces of institutional inertia that
lock companies into their current, misguided trajectories. Confidence, conviction, and courage
are helpful companions in this journey, as not all change is readily apparent and must be made
before there is an evident need for it and the window of opportunity has closed.

3. Anticipate the future.

Not every organizational death is avoidable. That said, corporations do not have to linger
indefinitely on the edge of life or die prematurely. The preservation of an organization- depends
on its leaders having the navigational judgment and skill to prepare their companies for what lies
ahead. However, when the future arrives, many companies cannot meet the demands that new
markets and consumer tastes require, as long-term aspirations have been thwarted by short-term
impulses. Indeed, executives must contend with plenty of pushes toward the short-term in which
the figurative foreground overwhelms the fuzzy objects in the distance. The short term is clear
and salient. The short term is undertaken with greater certainty of outcomes. The short term can
be very rewarding. The short term provides executives with the continuing authority to lead by
demonstrating their effectiveness in producing results. Leaders must be able to look past nearby
obstructions to see clearly what lies beyond. No formulaic solution exists for the ability to peer
into the future, but leaders can surround themselves with capable, perceptive people who
collectively challenge the assumptions on which their current actions are based in order to
imagine other possibilities. As Thomas Kuhn maintained, if your conception of the world is that
it is flat, you will see things one way; if your conception is that it is round, you will see things in
quite other ways. But you cannot see the implications of roundness until you suspend belief in
flatness.

4. Remain flexible.

Organizations must be at once disciplined and flexible, prudently reacting to the unexpected
during turbulent times and flexibly bending when rushes of demand are placed on them — then
regaining their shape once the need for transformation has passed. This ability to situationally
morph in response to customer/market demands is typically achieved through improved
automation and additions to staff in number or function in the attempt to align the technology
and people with what customers want, when they want it — while avoiding costly utilization
errors like being understaffed at peak times. Often the successful design of organizations and
deployment of people requires a simple creative additive of divergent thinking. For example,
Singapore‘s Changing Airport reconceptualized the problem of handling long customer lines by
redirecting people directly to their gates for check-in rather than having fliers converge and pile
up at a single point like pouring seeds into a funnel. The customer‘s burden of waiting is shifted
to the responsiveness of security, who must allocate labor to the right gates in a timely manner.
In the case of Singapore‘s airport, authorities make judicious use of generalist floaters on staff
who are dynamically assigned to where the needs are greatest at any given time.

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 5. Create distinctive spaces.

It is hard to find studies that don‘t support the link between the quality of a work environment
and employees‘ health, satisfaction, and performance. Indeed, the basic dimensions of
environmental indoor quality such thermal comfort, air quality, lighting, acoustic quality, and the
ergonomic features of furnishings positively relate to enhanced performance. The quality of
environment is a potential competitor for scarce mental and emotional resources that can either
enable or undermine learning and task performance. For example, open spaces are notoriously
problematic due to auditory and visual distractions. Environments can support coping behaviors,
personal replenishment, and performance, or they can be stressful, draining, and, implicitly
permissive of anti-normative behaviors through aesthetic neglect. They can be designed to
stimulate creativity or to deaden souls. One corporate trend that is refreshingly catching on is the
inclusion of nature into architectural design given its well-documented health advantages.
Research consistently finds that employees who have greater contact with nature experience less
stress and have better problem-solving skills, impulse control, attention spans, coping abilities,
and productivity. Thus, companies like bicycle producer and distributor QBP have the right idea.
They encourage nourishing naturalistic walking meetings in the adjacent nature preserve and
bicycle meetings on the quiet surrounding streets.

6. Diversify your workforce — and create an inclusive environment.

Complex tasks require a diverse mix of viewpoints and abilities to satisfactorily complete. We
know that it takes a composite of designers, computer scientists, engineers, and manufacturers to
build a car. Indeed, the wisdom of needing different people to pool their physical, attitudinal, and
intellectual assets to solve problems is well established. Studies routinely show that gender and
racial diversity, for example, improve the performance of workgroups, top management teams,
and boards of directors when conditions of inclusion prevail. Although diversity is necessary,
conflicts can arise among dissimilar people that can impair team performance. Without adept
leadership and conditions of psychological safety, diversity in groups may create factions and
interpersonal frictions called ―fault lines‖ that must be broken down through ongoing efforts that
make people feel significant, wanted, and welcome. Overall, companies like environmental
ecosystems require large numbers of different agents to enhance system reliability and
resilience. To illustrate, imagine a ship tilting at sea with all hands on deck. A non-diverse crew
all will run to one side of the ship and then the other in attempts to correct its lean but, instead,
will create a larger and larger pitch until the ship capsizes. A diverse crew, on the other hand,
will keep the ship relatively stable reacting in non-uniform ways: by using only certain crew to
cross back and forth on the deck (some coming, some going) until the danger has passed.

7. Promote personal growth.

An effective talent management program is one in which a company has a large pool of able,
external job candidates, sufficient competent coverage of existing positions, succession plans
throughout the organization, and a panoply of support programs: career counseling and
development, career planning workshops and vocational assessments, mentoring and coaching

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programs, and in-house training and educational assistance to augment employees‘ career
objectives. That said, the most notable way organizations expect people to improve is in job-
related ways by honing expertise. The means by which the metamorphosis from novice to expert
occurs lays on a continuum anchored by two extremes, one that entails a natural evolution (our
physical attributes and temperaments) and one that entails effort (training and practice). Suffice it
to say that both nature and nurture are implicated in personal growth and that an important
dimension of growth and using one‘s strengths is to correctly match employees‘ native interests
and abilities to their personal development and work assignments. People will perform better in
fields that are most consistent with their inherent aptitudes and passions where they are able to
do what they enjoy most. The best companies, then, try to calibrate the native interests and
abilities of their people to the work, backed by the sensible rationale that employees who are
absorbed and energized by their work are more committed to the organization, perform better,
and stay longer than those whose jobs are misaligned with their true interests and abilities.

8. Empower people.

The practice of empowerment in organizations is often like a parent handing the keys of a high-
performance vehicle to their teenager and hoping, day after day, that the car will return intact.
Simply handing over power to another provides little assurance that something positive will
come of it. Similarly, a company cannot simply dictate a new operating procedure that shifts
decision-making from centralized control to greater delegation and distributed authority. The
change entails a significant shift in culture and operations that involves increased information-
sharing, technological enhancements, participative decision making, extensive training,
collaborative problem solving, and team trust. As in baseball, with empowerment, due
preparations are made, the field of play is set by values, goals, and budgets, and, within these few
boundaries, the manager empowers employees to play ball. Once the game begins the manager
steps onto the field only a limited number of times to advise, coach, or reposition and change
personnel. No micromanagers needed here. The only managers that matter are the ones who can
support people‘s confidence and assure that they have control over their affairs, can cope with
disappointments, and are able to achieve goals that matter to them.

9. Reward high performers.

Despite the rhetoric of attracting and retaining the best, the aggregate talent within organizations
often is mediocre. The reason is simple. Decisions regarding hiring, pay, promotions, and
retention are based on factors other than merit such as friendship ties, tenure, petty jealousies (as
when threatened managers rid themselves of worthy competitors), favoritism, politics, and
discrimination. The consequences to organizations are obvious. In contrast, when executed well,
merit-based pay for performance plans increase job satisfaction and motivate action and, when
appropriately structured, are instrumental in producing environments in which the best help the
rest. Indeed, it is common in teams that the top members will lift the performances of good, but
less capable, members. These effects are observed when:

 People share a common goal

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  Each team member is viewed as indispensable to goal success
 Every member has a vested interest in each other‘s success and are depending on one
another to do their best
 Each member is encouraged to be the best by learning from others and engaging in
healthy internal competition akin to sportsperson-ship in which individuals strive for
personal excellence but graciously advise and instruct others when called upon
10. Foster a leadership culture.

Everyone who has worked in an organization knows the affective power of leadership and its
effects on culture, both good and bad. On one hand, the adverse effects of abusive supervision
and incivility on employees‘ mental and physical health, job satisfaction, and performance are
well-documented. On the other hand, supportive, inclusive management practices that provide
assurances of safety allow people to take reasonable risks, make mistakes, speak up and
challenge the status quo, and ask for help and request resources to make improvements. The
evidence overwhelmingly proves that leaders who can produce safe environments encourage
employees to more openly and beneficially interact, learn and grow, display greater creativity,
and think of themselves as potent and efficacious actors. Despite the known value of leadership,
organizations frequently show little genuine interest in the quality of leadership by foregoing
meaningful assessments and by being far too accommodating of managerial miscreants who may
be productive but are toxic to the organization‘s culture. The organizations that excel are those
that diligently work to develop more enlightened leaders who boldly embrace sustainable
corporate practices and are attuned to basic human needs and welfare.

Fulfilling these 10 principles is a tall order. They are ambitious aims. Still, as with any goal,
these principles convey standards to pursue that jointly express the possibilities for
organizational growth and development.

An organization is a stable, formal social structure that takes resources from the environment and
processes them to produce outputs.

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Organizational strategies

Organizational strategy includes the organization‘s design as well as the choices it makes to
define, set up, coordinate, and control its work processes. The organizational strategy is a plan
that answers the question: ―How will the company organize to achieve its goals and implement
its business strategy?‖ The successful execution of a business‘s organizational strategy
comprises the best combination of organizational, control, and cultural variables. Organizational
variables include decision rights, business processes, formal reporting relationships, and informal
networks. Control variables include the availability of data, the nature and quality of planning,
and the effectiveness of performance measurement and evaluation systems, and incentives to do
good work. Cultural variables comprise the values of the organization.

Feature of an Organization

 Each and every organization has its own structure which arranged in hierarchy manner.
 The organization is devoted to the principle of efficiency: maximizing output using
limited inputs.
 Other features of organizations include their business processes, organizational culture,
organizational politics, surrounding environments, structure, goals, constituencies, and
leadership styles.
 All of these features affect the kinds of information systems used by organizations.

6.2 Understanding a networked world

Ever-evolving and increasingly powerful information and communication technologies (ICTs)
have fundamentally changed the nature of global relationships, sources of competitive advantage
and opportunities for economic and social development. Technologies such as the Internet,
personal computers and wireless telephony have turned the globe into an increasingly
interconnected network of individuals, firms, schools and governments communicating and
interacting with each other through a variety of channels. The explosion of this technologically
mediated global network has resulted in a world in which virtually everyone, everywhere, has the
potential to reap the benefits of connectivity to the network.

Benefits of the Networked World

 Success in the Information Age depends upon the widespread integration of information
and communication technologies into society-at-large. New value propositions based
upon ICTs emerge as individuals begin to accept and understand their usefulness. This
change in attitude and behavior leads to creative solutions and new models that can
radically reshape how businesses, hospitals, schools and governments work.
 In the more developed nations, the deployment of ICTs is more widespread and is
supported not only by better infrastructure, but also by more fundamentally sound
societal building blocks such as healthcare and education. The developing world, on the
other hand, suffers from serious deficits and profoundly uneven distributions within these
areas.

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  Rapid increases in computing power, plunging prices for silicon chips and electronics,
and advances in wireless communications have made powerful technologies accessible to
many parts of the world which have historically lagged far behind in technology
adoption. Suddenly, this accessibility allows developing nations to achieve significant,
shared and sustained gains from joining the Networked World, particularly if broad
development goals are kept in mind as communities in these nations focus on their own
Readiness.
 The new ICTs are a powerful yet neutral tool that can be used to address a host of issues
in every community - their real power, therefore, lies in their ability to support holistic
development that promotes long-term social and economic benefits. If information and
communication technologies are used effectively, they can help to create a trained,
educated and healthy workforce that can build a vibrant and successful economy.
 The value of a network increases as its number of users grows. By participating in the
global information network, developing nations not only add value to the rest of the
world, but also benefit from the ability to use the network to communicate and trade with
all other users. For this reason it becomes ever more important for the developing world
to get ready for the Networked World.

6.3 Moving forward

Today‘s businesses run on technology. Every client interaction and internal process relies
heavily on the computer systems that power everything. Management information systems (MIS)
are a general term to encompass the various technologies that exist in organizations today, as
well as the personnel necessary to manage it all. Common problems include failure to strategize,
meeting organizational needs, hiring and retaining good employees, staying current and
integrating all your technologies.

1. Lack of Strategy

Many of the most common MIS issues can be traced back to a lack of a solid strategy.
Information systems leaders are well aware of the many tools available to gather data on their
network. But putting that information to use is often a challenge. At one time, technology
departments served as a separate operation, providing tech support and keeping an organization‘s
server equipment running. Today, MIS leadership often sits alongside other business leaders,
working together to ensure that the technology being used supports the overall mission of the
company moving forward.

2. Meeting Organizational Needs

MIS plays an ever-increasing role in organizations, with professionals relying on technology for
every aspect of operations. Sales and marketing rely heavily on customer relationship software to
track client interactions, for instance, while accounting needs its own software for billing,
invoicing and financial tracking. With more than half of all companies now relying on big data
analytics, MIS is playing an even more important role. Before making a decision, today‘s

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management teams are likely to pull reports on existing activity to ensure they use facts rather
than make educated guesses.

3. Attracting and Retaining Top Talent

For at least the past couple decades, the growth in technology has outpaced the number of people
entering the field. Over the past seven out of 10 years, IT positions have been in the top 10 of
jobs with the most hiring challenges, as documented by Manpower Group. The professionals
most in demand include developers and programmers, database administrators and IT leaders
and managers. Even as an increasing number of businesses shift to cloud software, the IT
shortage continues to affect businesses. If cloud technology providers have difficulty finding
professionals to support the applications their clients use, the businesses will see issues. Even
with cloud technology, though, many organizations find they still need to have an MIS specialist
on staff to ensure the business meets its goals.

4. Keeping Up with Change

If one thing is for certain in information technology, it‘s that nothing will remain the same for
long. From one year to the next, innovations mean that software needs to be upgraded and even
replaced. In order to remain competitive, businesses have to keep up with this, investing in
software that will give them an edge. As businesses respond to those changes, though, they face
a challenge in getting employees on board with adjusting what they do. At one time this was
simply training employees to go from old paper-based processes to using computers in the first
place. Today, managers have to onboard new systems while ensuring they provide employees
what they need to be productive.

5. Integrating New Technologies

Although there are plenty of comprehensive solutions, businesses will inevitably find that they
have multiple types of software operating at once. This includes general administrative tools like
Microsoft Office, as well as specialized tools for accounting, customer relationship management
and project-management tools, among many others. Ensuring all these tools work together is
essential since otherwise, employees will find they have to duplicate processes. Complicating
matters is the fact that employees no longer work using just one dedicated computer on a desk in
an office space. Many employees work in the field, using laptops and tablets.

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Chapter 7: Transforming and Managing Information Organizations
7.1 Models of industry transformation
Transformation requires discontinuous thinking recognizing and shedding outdated rules and
fundamental assumptions that underlie operations. When effectively linked with improvements
to business a process, advances in IS enable changes that make it possible to do business in a
new way, better and more competitive than before.

Digital Convergence is the priming of underlying digital technology components and features
such as voice, texts, video, pictures, broadcasts, presentation, streaming media, global
connectivity and personalized services; the combination of all of these features and abilities
from multiple electronic systems into a simplified, converged and computer-mediated
communication system to enable individuals interact, play, communicate, collaborate and share
information in many new and different ways.

There are many factors that contribute a lot for the occurring of digital convergence to become
the reality among them the critical factors are described as follows: - Digital convergence is now
occurring because IP has become the network protocol of choice. All forms of media can be
digitized, put into packets and sent over an IP network. Media managed and manipulated
digitally and integrated in highly imaginative ways.

Main Drivers for Transformation

 Liberalization and competition in telecoms sector

 Dynamic change and market-driven industry
 Emergence of new technologies: VoIP, IPTV, Broadband Wireless Access, Mobile TV
etc
 Provision of multi-media services, of video, voice and data
 Migration to NGN Convergence involves the integration of: The Internet, Telecom,
Cable, Satellite, Computer, and Media: print/broadcasting Entertainment; Information
Industries.

7.2 Effects of transformation and convergence on organizations

The most profound impact of globalization and digitization occurs through their interaction, a
form of convergence. Convergence of business functions through business process reengineering
(BPR), widely practiced in the 1990s, and brought about process innovation. Convergence of
organizations, technologies, industries, and people create new opportunities for collaboration,
open-source participation, development of new technologies, new products and even cybernetic

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organisms (cyborgs—organisms with both natural and artificial features).Organizational
convergence has become a popular strategy for many firms, such as Nike Inc., Wal-Mart Stores,
and Dell Computer Corp., to leverage the advantage of ideas to include open sourcing,
outsourcing, or global supply chain alliances. Industry convergence involves strategic innovation
for development of sustainable competitive advantage. Thus, convergence revolution is at the
center of the whirlwind of global change. Technology convergence has led to taking
developments in one engineering or scientific field and applying them to other fields, to include
cross-fertilization of ideas from physics applied to medical applications. People are involved, in
that they develop expertise in one field and learn to apply it in another, bringing fresh ideas to
old problems. Furthermore, globalization has brought people together from around the globe,
resulting in much greater sharing of ideas than was experienced in prior centuries

Evolutionofconvergence

The ability to connect ideas across areas has grown over cultures (globalization), knowledge
(different fields of expertise), industries (such as agriculture, manufacturing), economic
boundaries (national, regional, global), strategic competitive advantage (economies of scale,
scope, expertise), and primary innovation strategy (exploration, exploitation). Thus the driving
force of the economy in advanced countries has transitioned from agriculture to manufacturing
and to knowledge intensive service industries. The economic emphasis has also changed from
national to regional and now to global economy. The source of competitive advantage has
progressed from economies of scale, to economies of scale and scope, to economies of scale-
scope-expertise, to new economies of scale-scope-expertise-convergence. The primary
innovative strategy has gradually gravitated from exploitation of current competencies to
exploration of new competencies. The success of any organization is largely based on its ability
to predict the future direction of convergence that can enrich the entire value chain—operational
innovation, new products/services, new customer values, and new customer base. Evolution of
convergence can be examined in six broad levels that are relevant to organizational innovation—
from components/products/services, functions, organizations, technology, industry, and
biological/artificial systems.

The combined effects of developments, to include megatrends, have led to a much richer
environment where strategic innovation can lead to improved products, processes, and services.
Progress is not expected to be without difficulty. We live in a world with broadband Internet
enabling multinational supply chains to deliver goods and services throughout the world, but we
also live in a world with millions of people coping with starvation. New business models will
enable progress, harnessing the technological advances we have described, along with
globalization, changing demographics, and other sources of change. We expect convergence of
developments from different sources to lead to revolutionary successes for those organizations
able to find the right combination of features. What we refer to as the era of convergence is
expected to open new opportunities for better products and services, with leaner value chains,
enabling creation of new customer values and leading to expanded customer bases.
Understanding the opportunities available in combining developments from different fields will

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enable innovators to stay ahead of their competitors. The first- mover advantage in the deep blue
sphere of convergenomics will yield wealth creating opportunities to those able to grasp them.
Wal-Mart is an example of such a proactive organization, through use of radio frequency
identification. (RFID) technology to track inventory and also to provide fresh products to
customers, while minimizing cost. Opportunities for strategic innovation are constrained only by
limits on human imagination and creativity.

Organizations need to evolve to address the changing business landscapes. Ideally IT spending is
driven by the need to meet business requirements. Business leaders want IT to be focused on
business results, innovation, and continuous improvement. Digital transformation can be defined
as the acceleration of business activities, processes, competencies and models to fully leverage
the changes and opportunities of digital technologies and their impact in a strategic and
prioritized way. In fact, digital transformation is business transformation. Some prefer to use the
term digital business transformation, which is more in line with the business aspect of the
transformation. These digital business transformations are influenced/driven by the following
factors: Technology innovation, customer behavior and demand, and external environmental
factors.

Technological innovations lead to what we call technology disruptions. But transformation is not
just about technology innovations and their disruption on the business. It is also about how these
technological innovations are adopted and used. Do these innovations bring value to the
organization? Are they easily adopted or are the organization experiencing difficulties
integrating this new technology? This brings us to the next factor: customer behavior. What are
the customer demands and expectations on the business (and the demands on technology to meet
business needs)? Customers demand increased technological capabilities combined with the
desire for ease of use. And finally organizations have deal with external influences such as
regulatory laws, changing economy, market competition, and business partner demands.

A Forrester Consulting research study commissioned by Accenture Interactive found that the key
drivers of digital transformation are profitability, customer satisfaction, and increased speed-to-
market. To further clarify, the study asked decision-makers about their broad strategic priorities
over the next year. The number one choice was ―improving the experience of customers,‖
followed by growing revenues, improving differentiation, and reducing costs. In my experience,
this is easier said than done.

A digital business transformation context, all these aspects: business functions, processes,
activities, assets, models, and activities are interconnected. This is an essential aspect of digital
transformation: the inter dependency and inter-contentedness of everything. From business
processes and models to business activities and each single activity of the organization.

Digital business transformation is the ultimate challenge in change management. It impacts not
only industry structures and strategic positioning but it affects all levels of an organization (every
task, activity, process) and even its extended supply chain. Business leaders must constantly

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challenge their organizations to ensure this change can unlock productivity gains and significant
competitive advantage all while delivering exceptional customer experience.

7.3 Outsourcing and partnering for the virtual organization

In this technology-led era, most organizations always confronted with significant and
unpredicted problems that always constantly changing and giving a complicated environment.
Several factors, including innovation of technology and globalization of the economy, have
forced business and industry to adapt with the new challenges triggered by an increasingly
sophisticated society because of growing demand for customized with high-quality services and
products in various industries. One of innovation that proposed to achieve greater scale and save
more operational cost for the company is virtualization of the business. PT. XYZ is one of
management solution and business process outsourcing companies in Indonesia, their main
service is employee supply management and has been running for 14 years. With the employee
service solution especially for collection, telemarketing and cleaning service supply, PT XYZ
have broad clients ranging from small companies t enterprise sized companies and growing
number of companies in Indonesia there is market opportunity for business process outsourcing
in Asia Pacific including Indonesia. Pandemic situation in recent year that hit globally and affect
all business sector force company to adapt the situation that required person to do social
distancing and avoid face to face meeting. This situation is hard for company that provides
service to client and relies with the traditional approach. To answer the challenge and keep their
business going, adoption of virtual organization can answer challenge of serving client without
lowering the quality and adapting the new normal. Virtual organization is one of technology
innovations that is believed to have high potential to be adopted and create some value to the
company. Virtual models emerge because of a desire to improve agility, full scalability, dynamic
switching, and ease of cooperation and growth of potential. The virtuality adoption wills make
the organization could operate in a timely manner, and that also is the key to virtual organization.
Companies that already had supported infrastructure and got more communication-based
processes or activities between their employees could possibly harness the power of information
technology to make virtual integration and in fact already meet the requirements of virtual
organization. In recent year the virtual organization becoming trend by adapting teleworking or
working anywhere approach when running the business.

Outsourcing: is a business practice in which a company hires a third-party to perform tasks,

handle operations or provide services for the company. Companies today can outsource several
tasks or services. They often outsource information technology services, including programming
and application development, as well as technical support. They frequently outsource customer
service and call service functions. They can outsource other types of work as well, including
manufacturing processes, human resources tasks and financial functions such as bookkeeping
and payroll processing. Companies can outsource entire divisions, such as its entire IT
department, or just parts of a particular department. Outsourcing business functions is sometimes
called contracting out or business process outsourcing.

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Virtual organization: is used to describe a network of independent firms that join together, often
temporarily, to produce a service or product. Virtual organization is often associated with such
terms as virtual office, virtual teams, and virtual leadership. The ultimate goal of the virtual
organization is to provide innovative, high-quality products or services instantaneously in
response to customer demands. The term virtual in this sense has its roots in the computer
industry. When a computer appears to have more storage capacity than it really possesses it is
referred to as virtual memory. Likewise, when an organization assembles resources from a
variety of firms, a virtual organization seems to have more capabilities than it actually possesses.

Virtual Organization is a permanent or temporary organization that consists of full organizations,

units of organization, group, or individuals who are dispersed in various places and use IT to
bring together all capabilities, resources and also information in an effort to achieve a common
goal. Virtual organizations typically consist of virtual workspaces, virtual teams, and also virtual
workers. Some benefits of virtual organizations are always updated with the implementation of
new technology, improving quality of some factors such as performance, sharing knowledge,
flexibility, and marketing in a global network. Virtual organization can save time for every
process in organization. A virtual organization is a collection of geographically distributed,
functionally and/or culturally diverse entities that are linked by electronic forms of
communication and rely on lateral, dynamic relationships for coordination. Virtual organization
is a main organizational paradigm for enterprises to collaborate in the rapidly changing
environment. Advances in information and communication technologies are accelerating
collaboration among enterprises in different domains as well as unknown enterprises.

Characteristic of Virtual organization

Online societies can be built around the notion of a virtual organization – an organization that is
not exclusively tied to one physical organization or another. In terms of IT infrastructures, a
virtualization essentially provides a security and discovery context whereby collaborations across
multiple administrative domains can be enabled while enforcing joint security policies.

Based on Camarinha there are several basic characteristics to formulate the VO (Virtual
organization)

a. Delocalization : referring to elimination all needed of working physical space and

capacity
b. Temporization: refers to inter-organizational processes and activities that are performed
in temporal duration, so it‘s created for specific requirements.
c. Dematerialization: refers to the existence of virtuality replacement of materials or the
availability of virtual product or service.
d. Individualization or mass customization: by delivering a wide range of products and
services that are modified according to specific customer need for satisfaction or it is
called as service personalization.

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 e. Non-Institutionalization: where the operations are done virtually without physical
presence, establishing of interorganizational relations in such environments can be
abandoned and removing barriers within organization division.
f. Asynchronization: allows members or company entities to interact and communicate with
each other through ICT innovation.
g. Integrative Atomization (A7) refers to the process of bringing together the work of
various individuals to produce a completed good or service.

Challenges during Virtual organization

Virtual organizations can be very complex and problematic; they fail as often as they succeed.
Among the many challenges of the virtual organization are strategic planning dilemmas,
boundary blurring, a loss of control, and a need for new managerial skills.

Strategic planning poses new challenges as virtual firms determine effective combinations of
core competencies. Common vision among partners is quintessential to cooperating firms.
Focused on a common goal, firms develop close interdependencies that may make it difficult to
determine where one company ends and another begins. The boundary-blurring demands that
these boundaries be managed effectively. Coordinating mechanisms are critical elements for
supporting these loose collections of firms.

Virtual structures create a loss of control over some operations. This loss of control requires
communication, coordination, and trust among the various partners, as well as a new set of
managerial skills. Employees are exposed to increased ambiguity about organizational
membership, job roles and responsibilities, career paths, and superior-subordinate relationships.
This ambiguity requires management to rethink rewards, benefits, employee development,
staffing and other employee-related issues. Developing leaders who are able to create and sustain
these organizational forms is critical.

Les Pang offers a list of best practices, based on a review of successful implementations of
virtual organizations.

 Foster cooperation, trust and empowerment.

 Ensure each partner contributes and identifiable strength or asset.
 Ensure skills and competencies are complementary, not overlapping.
 Ensure partners are adaptable.
 Ensure contractual agreements are clear and specific on roles and deliverables.
 If possible, do not replace face-to-face interaction entirely.
 Provide training that is critical to team success.
 Recognize that it takes time to develop the team.
 Ensure that technology is compatible and reliable.
 Provide technical assistance that is competent and available.

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7.4 Formulating e-business roll out strategies
Traditional "on the street" businesses give customers a direct, in-person experience of the
products or services offered. Just as customer experience plays a pivotal role in converting
window-shoppers to actual buyers, an e-business' website design determines the type of
interactions customers have with the business. Developing a strategic design plan for an e-
business requires a customer-focused approach that clearly defines what an e-business has to
offer customers within its marketplace sector.

To remain competitive and retain customers, many SMEs (Small and mid-size enterprises) are
going to face a requirement to continuously improve their IT/e-Business capability. This is
particularly true of those subject to international competition or dealing with large customers.
This Guide is designed to highlight the key steps that you need to take to formulate an effective
IT/e-Business strategy. You should apply a structured approach to strategy formulation. Here is
one possible set of steps to follow. Do bear in mind that detailed consultation with those likely to
be affected, is vital and that decisions must be based on facts. Use of independent expertise may
be helpful.

a. Review your Business Strategy: Your ICT (e-Business and IT) facilities are there to help
you implement your business strategy. You thus need to be very clear on your overall
business strategy, before deciding what ICT facilities you need.
b. Review problems and potential risks: (e.g. lack of security) with your existing ICT set up.
c. Identify business problems: e.g. stock outs, long lead times, lack of available information
etc., excessive staff time spend compiling reports etc. that could potentially be improved
by better use of IT. Consider also any competitive advantage you could gain by applying
IT in a new way.
d. Identify possible Projects: Identify possible ICT projects that could address the above
opportunities and problems. These projects may involve buying new facilities, changing
the way you work, or simply training people so they actually make full use of the
facilities they already have.
e. Compare Costs versus Benefits for each possible project: Attempt to estimate the true
cost of each potential initiative and compare these with the likely benefits.
f. Prioritize: Choices have to be made. This is not just a question of doing the most
important ones first, technical and other practical reasons may dictate that certain projects
must be completed before others can start.
g. Plan your supporting options: Plan for activities such as recruiting, training or
redeploying staff, changing physical process, running a marketing campaign for a new
website etc. Your overall plan has to take account of these.
h. Set Times, budgets, responsibilities
i. Step 9. Actively manage the implementation of the strategy: Use recognized project
management practices including making sure to communicate with all those affected both
inside and outside the company.
j. Review the strategy periodically: Do not be afraid to change it if changing circumstances
make this necessary.
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7.5 A framework for e-business change management
Change is necessary for organizations to innovate, evolve, and grow. Growth is especially
relevant in business today, given that executives anticipate digital disruption will eliminate 40
percent of Fortune 500 companies in the coming decade. To stay competitive and afloat, your
company must develop and implement a strategy for change. To successfully embrace and foster
change on an organizational level, businesses need to have a change management framework in
place which outlines the plans, processes, and models to be followed. This will serve as a guide
to managing organizational change, regardless of how simple or complex recommended changes
prove to be.

Change management: is a systematic approach to dealing with the transition or transformation

of an organization's goals, processes or technologies. The purpose of change management is to
implement strategies for effecting change, controlling change and helping people to adapt to
change. To be effective, the change management strategy must take into consideration how an
adjustment or replacement will impact processes, systems and employees within the
organization. There must be a process for planning and testing change, communicating change,
scheduling and implementing change, documenting change and evaluating its effects.
Documentation is a critical component of change management -- not only to maintain an audit
trail should a rollback become necessary, but also to ensure compliance with internal and
external controls, including regulatory compliance.

Types of organizational change

Change management can be used to manage many types of organizational change. The three
most common types are the following:

 Developmental change. Any organizational change that improves on previously

established processes and procedures.
 Transitional change. Change that moves an organization away from its current state to a
new state to solve a problem, such as implementing a merger and acquisition or
automating a task or process.
 Transformational change. Change that radically and fundamentally alters the culture and
operation of an organization. In transformational change, the end result might not be
known. For example, a company may pursue entirely different products or markets.

Challenges of change management

Companies developing a change management program from the ground up often face daunting
challenges. In addition to a thorough understanding of company culture, the change management
process requires an accurate accounting of the systems, applications and employees to be
affected by a change. Additional change management challenges include the following:

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  Resource management. Managing the physical, financial, human, informational, and
intangible assets and resources that contribute to an organization's strategic plan becomes
increasingly difficult when implementing change.
 Resistance. The executives and employees who are most affected by a change may resist
it. Since change may result in unwanted extra work, ongoing resistance is common.
Transparency, training, planning and patience can help quell resistance and improve
overall morale.
 Communication. Companies often fail to consistently communicate change initiatives or
include employees in the process. Change-related communication requires an adequate
number of messages, the involvement of enough stakeholders to get the message out and
multiple communication channels.
 New technology. The application of new technologies can disrupt an employee's entire
workflow. Companies can improve adoption of new technology by creating a network of
early learners who champion the new technology to colleagues.
 Multiple points of view. In any change initiative, success factors differ for people based
on their roles in the organization and incentives. Managing these various priorities is
challenging.
 Scheduling issues. Deciding whether a change program will be long or short term and
clearly defining milestone deadlines are complicated. Some organizations believe that
shorter change programs are most effective. Others believe a more gradual approach to
change reduces resistance and errors.

Importance and effects of change management

 As a conceptual business framework for people, processes and the organization, change
management increases the success of critical projects and improves a company's ability to
adapt quickly.
 Business change is constant and inevitable, and when poorly managed, it has the potential
to cause organizational stress, as well as unnecessary and costly rework.
 By standardizing the consistency and efficiency of assigned work, change management
assures that the people side of an organization is not overlooked. As changes to work
occur, change management helps employees understand their new roles and build a more
process-driven culture.
 Change management also encourages future company growth by enabling it to remain
dynamic in the marketplace.

Principles of change management

Three principles of change management build on the three stages of change management:

1. Unfreeze the current state. Change agents need to identify what precisely they want to
change. At this stage, they need to formulate a "why" that other participants are likely to
buy into. In essence, they need to reverse-engineer the future state and translate this
benefit to other possible participants. Then, they need to enroll people who can

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 participate in the new idea. This could include executive sponsorship for a big change or
co-workers for a departmental change.
2. Change the system. At this stage, change agents and any collaborators can begin to put
the change into practice. The change agents need to work with collaborators to
communicate the idea and bring other participants on board. It is important to pay
attention to any pushback and find areas of shared understanding to either help move the
change forward or shift its implementation in response to feedback. Tensions might be
high as everyone gets used to the new system. It's important to be respectful of their
feelings and ideas.
3. Refreeze. Eventually, people get used to the new system, or they revert back to what was
working before. At this stage, it is important to declare that the change is over -- whether
the change was accepted or rejected. Even if the change was rejected, declaring it over
gives everyone a chance to relax. It is also helpful at this stage to document what
happened for future reference.

Popular change management software applications include the following:

 ChangeGear (Serviceaide). Change management support for DevOps and ITIL

automation, as well as business roles.
 ChangeScout (Deloitte). Cloud-based organizational change management application for
evaluating sea changes, as well as incremental changes.
 EChangeManager (Giva). A cloud-based, standalone IT change management application.
 Freshservice (Freshworks). An onlineITIL change management solution featuring
workflow customization capabilities and gamification features.
 Remedy Change Management 9 (BMC Software). Assistance for managers with
planning, tracking and delivering successful changes that is compliant with ITIL and
Control Objectives for Information and Related Technologies, or COBIT.

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