Professional Documents
Culture Documents
Organisations
1. Economics of Information
2. IS in the organisational context
3. Business Processes
4. IS and Organisational change
KA Johnston
Economics
• Economics is basically the study of how
people (and institutions) act in a society
with limited resources (in other words
scarcity)
– The choices are more diverse than simply
money – also time, work, savings
– Driving principle is that people optimize the
utility (satisfaction) of goods and services
consumed
KJ-2
Information/New Economy
• No standard definitions
• What is an “Information Economy”?
– One Definition: “An economy based on the
exchange of knowledge information and
services rather than physical goods and
services” – Australian Government, 2001
• What is the “New” Economy?
– One Definition: The new economy is an
integration of free-market economies,
globalization and Information Technology (IT)
KJ-3
Economics of Information
• Use whatever label you want…the makeup
of the economy has changed
• Information is a good, and IT/IS have
replaced goods made of atoms and
technologies resting on muscle
• Expensive to produce
• Inexpensive to re-produce
• Information can be biased / incorrect
• Economy is increasingly reliant on IT/IS &
information
KJ-4
What is information?
Knowledge
Global warming
Understand meaning of Info
Decisions
What can I do?
+670 planes +2700
Information
planes
Temperature anomaly
Data Data in context
Eg 1980 i ng
ce ss
Pro
Data & Information = What; Knowledge = How; Wisdom = Why
http://www.centennialofflight.gov/essay/Air_Power/Battle_of_Britain/AP22.htm KJ-7
Key Discovery
43% Globalization
Social
Social Responsibility E/M Commerce & E Business
Political
Ethics Decision Support Systems (DSS)
Deregulation Executive Info Systems (EIS)
Enterprise Resource Planning (ERP)
Green/Environment
Electronic Funds Transfer (EFT)
BBBEE Benson & Standing; Chaffey & Wood; Turban et al; Rainer et al KJ-9
External Forces & Responses
Continuous Process Improvement (CPI)
Outsourcing
Customer Choice Disaster Recovery Planning (DRP)
Globalization Risk management
Market Changing Workforce Business Process Reengineering (BPR)
Economic Business Process Management (BPM)
Costs Point of Sale (POS)
Growth Business to Business (B2B/C2C)
Integration Database Management (DBM)
Business
Information overload Data warehousing
Open Source Software (OSS)
ICT ICT Obsolescence
Object Oriented Programming (OOP)
ICT Innovation
Project Management (PM)
ECommerce/MC Rapid Application Development (RAD)
Regulations Application Service Provider (ASP)
Social
Social Responsibility Artificial Intelligence (AI)
Political
Ethics Computer Aided software engineering (CASE)
Deregulation Data Mining
Soft Systems Methodology (SSM)
Green/Environment
Restructuring & Transforming
BBBEE Benson & Standing; Chaffey & Wood; Turban et al; Rainer et al KJ-10
Organisations
Organisations are open
systems (interact with External Context
their environment)
Organisation
Feedback
Organisations draw resources from environment (Inputs) change them
and pass them back to environment as Outputs
Value obtained for outputs (money, reputation etc) enables them to continue
attracting Inputs (feedback arrows from Output to Input)
KJ-11
Role of IS in organisations
People managing External Context
organisations need
various kinds of
information
Organisation
Feedback
People need to add value to Inputs; to do so need information (about inputs,
change process, outputs, costs, availability, capacity, schedules, quality etc)
Businesses (and individuals) use information and IS to communicate
Businesses (and individuals) use information and IS for decision making
Businesses use information and IS to support business processes
Some Businesses use information and IS as a product KJ-12
Some IS Apps (A-H)
• ANN – Artificial Neural Network IT/IS can
be disrup
• AI – Artificial Intelligence socially tive, econ
omically
• BI – Business Intelligence &
• CAD/M – Computer Aided Design/Manufacturing
• CRM – Customer Relationship Management (eg SAP, Oracle)
• Data Mining Software
• DMS – Document Management System
• DSS – Decision Support Systems, and GDSS - Group DSS
• EC – Electronic Commerce
• EDM - Electronic Document Management
• EFT- Electronic Funds Transfer or EBT – Electronic Benefits Transfer
• EIS – Executive Information System
• ERP – Enterprise Resource Planning (eg SAP, Oracle)
• ES – Expert System
• ESS – Employee Self Service
• ESS – Executive Support System
• Functional Systems such as Accounting, HR, Maintenance, Marketing,
Manufacturing, Scheduling etc
• GIS – Geographical Information System, GPS – Global positioning System
• HRM – Human Resource Management
KJ-13
• IOS – Interorganisational Information System
•
•
Inventory management systems
IVR – Interactive Voice Response
Some IS
Apps
• JIT – Just in Time inventory scheduling system
• KMS – Knowledge Management System
• LMS - Learning Management System (eg. Vula)
•
•
MC – Mobile Commerce
MIS – Management Information System (I-Z)
• NMS – Network Management Software
• OAS – Office Automation System
• POS – Point of Sale IT/IS can
be disrup
• QBE – Query by example s o cially tive, econ
omically
• RFID – Radio Frequency Identification &
• Search Systems (eg Google)
• SCM – Supply Chain Management (eg SAP, Oracle)
• SNS – Social Networking System (eg. Facebook, twitter)
• TPS – Transaction Processing Systems
• Transport management systems
• UMTS - Universal Mobile Telephone System
• VAN – Value added Network
• Workflow Systems
• xRM – (Employee, Supplier, Government, Shareholder, Partner ) Relationship Mgt
• z/OS
KJ-14
Optimise the utility (satisfaction)
Information quality
of goods and services . Completeness
. Ease of understanding
. Personalization
• A measurement of the success of Information . Relevance
. Security
Systems is the Delone & McLean Model Systems quality
• QUALITY of Information, System and Service . Adaptability
. Availability
determine INTENTION TO USE, and USER . Reliability
. Response time
SATISFACTION . Usability
• USE and USER SATISFACTION determine NET Service quality
. Assurance
BENEFITS . Empathy
. Responsiveness
Use
. Nature of use
. Navigation patterns
. Number of site visits
. Number of transactions executed
User satisfaction
. Repeat purchases
. Repeat visits
. User surveys
Net benefits
. Cost savings
. Expanded markets
. Incremental additional sales
. Reduced search costs
. Time savings
KJ-15
1 minute in the life of a Wal-Mart shopper
Prices
Obtain prices
5 x Mars Bars
2 x 1 Lt Milk Check payment
1 x Dilmah tea Customers
Display Total - RECEIPT Accept Payment & Bank
Adjust inventory
Check Payment Commit transaction Transfer money
Accept Payment
Inventory # Min Max
Mars Bar 496 500 800
Reorder inventory Milk 300 250 350
200 Mars Bars Dilmah 419 300 600
Company's
Over Simplified – but notice people, information,
Bank
business processes & technology
CRM
HR Prices
Obtain prices
5 x Mars Bars
2 x 1 Lt Milk Check payment
1 x Dilmah
Pointtea of Sale Accounting Customers
Bank
(POS)
Display Total - RECEIPT Accept Payment & Adjust inventory
Commit transaction
EFT
Check Payment Transfer money
Accept Payment
Inventory
Inventory # Min Max
Management
Mars Bar 496 500 800
Reorder inventory
Order Milk 300 250 350
200 Mars Bars Dilmah 419 300 600 Finance
Processing
Company's
Over Simplified – but notice people, information,
Bank
business processes & technology
Using IS to transcend
Org. borders & to
Integrate BPs with partners
Stage 5
Using IS to redesign
& integrate BPs
Stage 4
Linking n functions
& using 1 corp DB
Stage 3
Note: change from Functions to
Automating n Business Processes in stage 4
Business functions
Stage 2
Automating 1
Business function
Stage 1
KJ-18
Boddy et al
Seldom
KJ-19
Often
Business Process (BP) change
• “An activity undertaken to develop & deliver
products or services to customers” (internal or
external)
• “Unique ways in which organisations coordinate and
organise work activities, information, and knowledge
to produce a product or service”
• A collection of activities (steps or procedures) that
takes one or more inputs and creates an output
(outcome) that is of value to the customer
– The customer may be the traditional external customer
who buys the product or service, or
– an internal customer (a colleague in another department)
– Several business functions are involved in business
processes Gelinas et al; Chaffey & Wood; Laudon & Laudon; Rainer et al; Boddey et al
KJ-20
Business Processes Across Functional
Areas
22
Turban et al KJ-21
Org structure # BP
CEO
Acc.
Shipping Billing
receivable
Posts a Bill to customer
Sales Just 1 BP
Re Pa
m ym
in en
de
r t
1. Customer places an order
Customer
Gelinas et al KJ-23
Problems surrounding
Business Processes
1. Much more difficult to classify or describe than
organisational structures or functions
2. Often invisible, are neither named or described
3. Cross traditional departmental boundaries – co-
operation / accountability problems
4. Processes only work when people realise they need to
work together to achieve the result promised to the
customer
5. Current generation has “grown up with technology” and as
such has an “information-age mindset” which believes that
the computer is not a technology but an assumed part of life
and expect BPs to be customer centric
External Organisation
Socioeconomic Organisational Boundary
Environment Structure
Costs, Govts, regulations, cust choice, who reports to who
social responsibility, ethics, deregulation,
globalisation, growth, new markets, staff Culture KJ-26
Scott Morton; Turban et al
Characteristics of Org. Change
Incremental Discontinuous
Tuning Re-orientation
Anticipatory
HR Techno
Interactions
Strat BP IT
Interlinked
Socio-e OS
KJ-30
HR Techno
Socio-e
BP
OS
IT
KJ-33