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The Importance of Information Systems Management

Chapter 1
Information Systems Management In Practice 7E McNurlin & Sprague
PowerPoints prepared by Michael Matthew

Visiting Lecturer, GACC, Macquarie University Sydney Australia

Todays Lecture
Introduction A Little History The Organizational Environment
External Business Environment Internal Organizational Environment Goals of the New Work Environment

The Technology Environment


Hardware Trends Software Trends Data Trends Communication Trends
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Todays Lecture cont.


The Mission of Information Systems A Simple Model A Better Model
The Technologies The Users Systems Development and Delivery IS Management

Case example MeadWestvaco Corporation


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Introduction
(Finally) Information Technology (IT) computers and telecommunications - is having the kind of revolutionary, restructuring impact that has been expected and promised for years Rapid advances in speed and capacity + pervasiveness of Internet, wireless, portable devices etc. = making major changes in the way we live and work Go Back 5, 10, 15 years
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Introduction cont.
Due to the growth and pervasiveness of IT, organizations are operating in a different environment from just a few years ago Themes this unit emphasizes:
Globalization
The world seems to be getting smaller Backlash local needs Vs. standard Jobs to stay local IS executives need balancing act

E-enablement
Internet has become a hub for conducting business Interconnectivity plus!

Knowledge Sharing and Knowledge Management


Between people Out of peoples heads and into lasting things e.g. systems, policies and procedures etc.
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Introduction cont.
Management of Information Systems
3 Major Trends 1. Governance of IT = a collaborative effort from IS executives and all other members of Senior Management 2. Role of IS is shifting from application delivery to system integration and infrastructure development 3. Outsourcing total / selective
Developing and managing contracts and relationships

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Introduction cont.
Historically, managing IT has been the job of technical managers
NOW = increasingly becoming an important part of the responsibilities of:
Senior executives Line managers Employees at all levels of an organization
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The Key (Whats it all about?)


Technology is configured into systems that help manage information to improve organizational performance

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A Little History cont.


70s = it all started with many of the foundations of IT today invented and costs starting to fall
Typewriters, fax, smaller computers

1980s = number of US information workers surpassed the number in all other sectors (>50%)

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A Little History cont.


Information Technology:
Initially used to perform existing information work more quickly and efficiently Then = used to manage work better Now = well into the 3rd stage of technology assimilation
IT makes pervasive changes in the structure and operation of:
Work Business practices Organizations Industries The Global Economy (=enabler?)
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The Organizational Environment


The way IT is used depends on the environment surrounding the organization that uses it
Simultaneously, technological advances affect the way IT is used

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The Organizational Environment cont.


The External Organizational Environment IT allows information to move faster, thus increasing the speed at which events take place and the pace at which individuals and organizations respond to events. The Internet Economy B2C, B2B etc. IT is a major underpinning of the way the old and new worlds interface

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The Organizational Environment cont.


The External Organizational Environment Global Marketplace
The entire world has become the marketplace The Internet allows companies to work globally Globalization is a two way street Internet allows small firms to have a global reach Business environment is now global, but local tastes still matter (Glocal)
cont.

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The Organizational Environment cont.


The External Organizational Environment Business Digital Ecosystems Decapitalization
Tangible items, such as capital, equipment and buildings were the tenets of power in the industrial age Today = power of intangibles such as ideas and knowledge
Managing talent = as important as e.g. managing finance
cont.

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The Organizational Environment cont.


The External Organizational Environment cont.

Faster Business Cycles


Rely on IT

Accountability and Transparency


Rise and fall of dot-coms probably should have been expected
Many business plans could not make $$$

Debacle in Telco and business shenanigans have shaken investor confidence


Call for greater transparency of corporate operations and greater accountability of corporate officers IT will play a significant role in implementing the ensuing regulations and fostering transparency
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The Organizational Environment cont.


The External Organizational Environment Rising Societal Risks of IT
IT has negatively affected millions of people Network shutdowns Computer viruses Identity theft Email scams Movement of white collar jobs offshore Led to increasing calls for Government regulation and for vendors and corporations to take action
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cont.

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The Organizational Environment cont.


The Internal Organizational Environment The work environment is also changing, and the art of managing people is undergoing significant shifts From Supply-Push to Demand-Pull
Old
Companies did their best to figure out what customers wanted Organized to build a supply of products or services and then push them out to end customers on stores shelves, in catalogs etc.

New (Internet)
Allows much closer and one-to-one contact between customer and seller Offer customers the components of a product/service then the customer creates their own version by pulling what they want
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The Organizational Environment cont.


The Internal Organizational Environment Self- Service
ATMs = early example 1990s saw an increase in systems that let consumers access corporate computer systems to:
Learn about products Purchase products Inquire about orders Communicate and do business with the firm
cont.

Now = heaps e.g. FedEx parcel tracking


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The Organizational Environment cont.


The Internal Organizational Environment
cont.

Real-Time Working
Sales people have up-to-the-minute information about customers Knowing e.g. inventory and cash levels as the are NOW not as they were a week or a month ago Being able to reach someone when you need them
Instant messaging?

Team-Based Working
Working together on projects

Anytime, Anyplace Information Work


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The Organizational Environment cont.


The Internal Organizational Environment cont.

Outsourcing and Strategic Alliances


To become more competitive, organizations are examining types of work that should be done internally or externally by others Ranges from a simple contract for services to a long-term strategic alliance The thinking is: We should focus on what we do best and outsource the other functions to people who specialize in them Note = not new (especially in non-IT) Also = some backlash
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The Organizational Environment cont.


The Internal Organizational Environment
cont.

The Demise of Hierarchy Traditional hierarchical structure groups, several people performing the same type of work, overseen by a supervisor
No longer the most appropriate in factories or offices

Hierarchical structures cannot cope with rapid change


Communications up and down the chain of command takes too much time for todays environment

IT enables team-based organizational structures by facilitating rapid and far-flung communication Note: = some of the time. Still has its place in many organizations 1-22

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Goals of the New Work Environment


Leverage Knowledge Globally
Tap tacit knowledge by fostering sharing and supporting sharing through technology Note: driving force is culture!
Happens through organizational pull (people needing help) rather than organizational push which overloads people with information

Organize for Complexity


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Goals of the New Work Environment cont.


Work Electronically
Taking advantage of the Internet and networks in general = 3rd major goal of enterprises today
Requires different organizing principles, management tenets, compensation schemes, structure etc. Changes how organizations interact with others including customers

The microchip moved power within companies. Bandwidth moves power all the way to consumers Will increase exponentially as bandwidth capability increases and costs decrease

Handle Continuous and Discontinuous Change


Fits and starts
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The Technology Environment


IT enables advances in organizational performance. Hardware Trends 50s 60s + - Batch processing predominant; on-line systems emerged later Mid 70s processing power began to move out of the central site (at the insistence of users!) 1980s: Advent of personal computers Client-Server computing: Client machine user interfaces with Server on the network holding the data and applications Major current development = hand-held devices, wireless etc. Further distribution beyond organizational boundaries to suppliers, customers etc.

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The Technology Environment cont. Software Trends


1. In 1960s = Improve the productivity of in-house programmers who created transaction processing systems

Problem = memory $
2. Later, programming issues: First = Modular and structured programming techniques Then = Life cycle development methodologies and software engineering

Goal = Introduction of rigorous project management techniques


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The Technology Environment cont. Software Trends cont.


3. Prototyping: quick development of a mock-up

4. Purchasing software became viable alternative to in-house development


5. Paying attention to applications other than transaction processing Decision support systems (DSS), report generation, database inquiry

6. End users develop their own systems


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The Technology Environment cont. Software Trends cont.


7. Push for open systems
Purchasers were tired of being locked in to proprietary software (or hardware)

8. 1990s trend towards Enterprise Resource Planning (ERP) e.g. SAP, PeopleSoft
DANGER : BEWARE Expensive and troublesome, especially for companies wanting to modify the ERP software to fit their unique processes A fundamental organizational change!

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The Technology Environment cont. Software Trends cont.


9. Like hardware, software is migrating to be network centric.
Web front ends to empower employees rather than replacing legacy systems Looming change = move to Web Services packages of code that each perform a specific function and have a URL e.g FedEx parcel tracking, MacAfee's virus updates The significance of Web Services is that it moves software and programming to being truly network centric the network becomes the heart of the system, linking all Web Services
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The Technology Environment cont.


Data Trends
At first = File management
Organizational techniques for files that served individual applications

Then = Corporate databases


Serving several applications Led to concept of establishing a data administration function

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The Technology Environment cont.


Data Trends cont. 70s = focus on Technical solutions
Database management systems Dictionary/directory Specification and format Now = Data definitions: information about relationships among systems, sources and uses of data, and time cycle requirements

First 20 years: techniques to manage data in a centralized environment


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The Technology Environment cont.


Data Trends cont.
Late 70s / early 80s = 4th generation languages and PCs:
Employees directly access corporate data Users demanded it!

Also = Distributing data from data resources to information resources


Data management organizes internal facts into data record format Information management focuses on concepts
Contains a much richer universe of digitized media including voice, graphics, animation and photographs (digitized media)
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The Technology Environment cont.


Data Trends cont.
Managing this expanded array of information resources requires new technologies
Data warehousing
Stores huge amounts of historical (not live) data from systems such as retailers Point-Of-Sale systems

Data mining
Uses advanced statistical techniques to explore data warehouses looking for previously unknown relationships in data e.g which customers are the most profitable

Knowledge management (intellectual capital)


New The Holy Grail?

Web has broadened data to mean content


Text, graphics, animation, maps, photos, video etc. Now tightly controlled Vs. early proliferation
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The Technology Environment cont.


Data Trends cont.
Two major data issues are now facing CIOs:

1. Security protecting data from those who should not see it 2. Privacy safeguarding the personal data of employees, customers etc.
Regulations such as Sarbanes-Oxley in the U.S. now require company officers to verify their financial data
The processes that handle financial data are automated = need to document and ensure the accuracy of these processes
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The Technology Environment cont.


Communications Trends
Final core technology = Telecommunications. This area has (is?) experienced enormous change and is now taking centre stage Early use = online and time-sharing systems Then = interest in both public and private (intracompany) data networks blossomed Internet = changed everything! Today the Internets protocol has become the worldwide standard for LANs and WANs
- Will also soon be the standard for voice
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The Technology Environment cont.


Communications Trends cont.
Telecom opened up new uses of IS so it became an integral component of IS management
Communications-based information systems link organizations to their suppliers and customers

Explosion of wireless 2nd generation, instant messaging, Wi-Fi, 3rd generation (3G) Doesnt just enable mobility = changes how people communicate, how they live and how they work

EXCITING TIMES!!!
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The Mission of Information Systems


Early days: paperwork factories to pay employees, bill customers, ship products etc.
Objectives of information systems defined by productivity measures

Later = MIS era: produced reports for management by exception for all levels of management Today = Improve the performance of people in organizations through the use of information technology Improving organizational performance is accomplished by the people and groups that comprise the organization
One resource for this improvement is IT

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The Mission of Information Systems

The mission is to improve the performance of people in organizations through the use of information technology

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A Simple Model (Fig. 1-2)


In the early days of Information Systems, the translation between IT and users was performed almost entirely by systems analysts

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Systems Professionals Bridging the Technology Gap (Fig. 1-3)


Over the last 50 years technology has become increasingly complex and powerful Users have become increasingly sophisticated Information systems are now viewed as products and users have become customers

More specialization is required of systems professionals to bridge this wider gap

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Users Bridging the Technology Gap (Fig. 1-4)


Technology has become sophisticated enough to be used by many employees and consumers Today, some of the technology is truly userfriendly, and some applications such as Web page development, database mining and spreadsheet manipulation, are handled by non-IT staff Transaction systems, however, are still developed by professional developers, either inside or outside the firm
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Why talk about the Technology Gap?


The main point of this discussion is that technology is getting more complex, applications are becoming more sophisticated, and users are participating more heavily in the development of applications The net result is that management of the process is becoming more complex and difficult as its importance increases
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A Better Model (Fig 1-6)


Expanding the simple model gives us more guidance into managerial principles and tasks We suggest a model with four principal elements:
1. 2. 3. 4. A set of technologies that represent the IT infrastructure installed and managed by the IS department A set of users who need to use IT to improve their job performance A delivery mechanism for developing , delivering and installing applications Executive leadership to manage the entire process of applying the technology to achieve organizational objectives and goals
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A Framework for IS Management

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1. The Technologies
Several forces contribute to the increased importance and complexity of IT:
1. 2. Growth in capacity + reduction in cost & size Merging of previously separate technologies of computers, telephones/telecom/cable TV, office equipment and consumer electronics Ability to store and handle multiple forms of data

3.

Information systems now fill major roles in management reporting, problem solving and analysis, office support, customer service and communications
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2. The Users
Clerical? Managerial?

Note: the distinction between manager and worker is blurring!


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3. System Development and Delivery

Systems development and delivery bridge the gap between technology and users
Systems for procedure-based (clerical) activities differ from systems for knowledge based information work (managerial) Systems are built based on technology resources. Three main categories (essential technologies):
1. Hardware and software 2. Telecommunications 3. Information resources

Management of these is called infrastructure management


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4. IS Management
Chief Information Officer (CIO)

Must be high enough in the enterprise to influence organizational goals Must have enough credibility to lead the harnessing of technology to pursue those goals

Must work with all the other CXOs


IT has become too important to be left to one individual

Executive team must work together to govern it and leverage it well


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A Better Model - Summary


This model has four major components:
1. The technology which provides the electronic and information infrastructure 2. Information workers who use IT to accomplish their work goals 3. System development and delivery which brings the technology and users together

4. The management of the IS function


Overall responsibility = to harness IT to improve the performance of the people and the organization

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A Better Model

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Organization of this Book/Unit


Part I - Leadership Part II - Technologies Part III - Delivery Part IV - Supporting work Part V - Looking ahead

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Organization of this Book/Unit cont.


Part I Leadership
Chapters 2 - 4 Deals with the strategic issues that are the responsibility of the top systems executive CIO Chapter 2 = evolution of the IS function and the CIOs job Chapter 3 = strategic uses of IT Chapter 4 = IS planning

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Organization of this Book/Unit cont.


Part II Technologies
Chapters 5 8 Deals with the management of the essential information technologies Distributed systems architecture Building and managing telecommunications Managing corporate information resources Managing day-to-day operations
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Organization of this Book/Unit cont.


Part III Delivery
Chapters 9 and 10 Deal with developing and delivering systems Chapter 9 = describes:
The evolution of systems development, tools and approaches The trend towards system integration, and The growth of Internet-based development

Chapter 10 = discusses important issues in managing system development and delivery


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Organization of this Book/Unit cont.


Part IV - Supporting work
Chapters 11 13 Discuss different types of systems that support knowledge work Chapter 11 looks at using IT to support decision making Chapter 12 discusses systems that support collaborative work Chapter 13 looks at supporting knowledge work
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Organization of this Book/Unit cont.


Part V - Looking ahead
Chapter 14 Looks at the future

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Case Example: MeadWestvaco Corporation

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Case Example: MeadWestvaco Corporation

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Case Example: MeadWestvaco Corporation

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Case Example: MeadWestvaco Corporation

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Case Example: MeadWestvaco Corporation

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Case Example: MeadWestvaco Corporation

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Case Example: MeadWestvaco Corporation

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Case Example: MeadWestvaco Corporation

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Case Example: MeadWestvaco Corporation

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A Final Thought

It is not the strongest species that survive, nor the most intelligent, but the ones responsive to change - Charles Darwin

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