Lecture7 (is313) (the impactofit onmanagdecisionmaking)

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Lecture7 (is313) (the impactofit onmanagdecisionmaking)

  1. 1. Lecture 7 The Impact of IT on Management Decision Making Abdisalam Issa-Salwe Taibah University College of Computer Science & Engineering Information Systems Department 1Topic list IT Infrastructure and IT Services Explain the contribution of information management of adopting specific technologies. Role of Managers in Organizations The Process of Decision Making Strategic planning tools Value of information in decision making Abdisalam Issa-Salwe, Faculty of Computer Science & Engineering, Taibah University 2
  2. 2. IT Infrastructure and IT Services One way that organizations can influence how information technology will be used is through decisions about the technical and organizational configuration of systems. In the ever-widening role of information systems in organizations, supporting the widening role have been changes in information technology (IT) infrastructure Abdisalam Issa-Salwe, Faculty of Computer Science & Engineering, Taibah University 3 IT Infrastructure and IT Services (cont…) Decision making is often a managers most challenging role. Information systems have helped managers communicate and distribute information; However, they have provided only limited assistance for management decision making. Because decision making is an area that system designers have sought most of all to affect (with mixed success), we now turn our attention to this issue. Abdisalam Issa-Salwe, Faculty of Computer Science & Engineering, Taibah University 4
  3. 3. IT Infrastructure and IT Services (cont…)Each organization determines exactly how itsinfrastructure will be configured.Another way that organizations have affectedinformation technology is through decisionsabout who will design, build and maintain theorganizations IT infrastructure.These decisions determine how informationtechnology services will be deliveredThe formal organizational unit or functionresponsible for technology services is called theinformation systems department.The information systems department isresponsible for maintaining the hardware,software, data storage, and networks thatcomprise the firms IT infrastructure. Abdisalam Issa-Salwe, Faculty of Computer Science & Engineering, Taibah University 5IT Infrastructure and IT Services (cont…)The information systems departmentconsists of specialists, such asprogrammers, systems analysts, projectleaders, and information systemsmanagers (see Figure below).Programmers are highly trained technicalspecialists who write the softwareinstructions for the computer.Systems analysts constitute the principalliaisons between the information systemsgroups and the rest of the organization Abdisalam Issa-Salwe, Faculty of Computer Science & Engineering, Taibah University 6
  4. 4. IT Infrastructure and IT Services (cont…)It is the systems analysts job to translatebusiness problems and requirements intoinformation requirements and systems.Information systems managers areleaders of teams of programmers andanalysts, project managers, physicalfacility managers, telecommunicationsmanagers, and heads of office systemgroups.They are also managers of computeroperations and data entry staff. Abdisalam Issa-Salwe, Faculty of Computer Science & Engineering, Taibah University 7Many types of specialists and groups areresponsible for the design andmanagement of the organizationsinformation technology (IT) infrastructure. Abdisalam Issa-Salwe, Faculty of Computer Science & Engineering, Taibah University 8
  5. 5. IT Infrastructure and IT Services (cont…)Also external specialists, such ashardware vendors and manufacturers,software firms, and consultantsfrequently participate in the day-to-dayoperations and long-term planning ofinformation systems.In many companies, the informationsystems department is headed by a chiefinformation officer (CIO).The CIO is a senior management positionthat oversees the use of informationtechnology in the firm. Abdisalam Issa-Salwe, Faculty of Computer Science & Engineering, Taibah University 9Role of Managers in OrganizationsTo determine how information systemscan benefit managers, we must firstexamine what managers do and whatinformation they need for decisionmaking and other functions.We must also understand how decisionsare made and what kinds of decisions canbe supported by formal informationsystems Abdisalam Issa-Salwe, Faculty of Computer Science & Engineering, Taibah University 10
  6. 6. Role of Managers in Organizations (cont…) Managers play a key role in organizations. Their responsibilities range from making decisions, to writing reports, to attending meetings, etc. We can better understand managerial functions and roles by examining classical and contemporary models of managerial behavior. Abdisalam Issa-Salwe, Faculty of Computer Science & Engineering, Taibah University 11 Role of Managers in Organizations (cont…) Observers find that managerial behavior actually has five attributes that differ greatly from the classical description:• First, managers perform a great deal of work at an unrelenting.• Second, managerial activities are fragmented;• Third, managers prefer speculation, hearsay, gossip.• Fourth, they prefer oral forms of communication to written forms because oral media provide greater flexibility• Fifth, managers give high priority to maintaining a diverse and complex web of contacts that acts as an informal information system and helps them execute their personal agendas and short- and long-term goals. Abdisalam Issa-Salwe, Faculty of Computer Science & Engineering, Taibah University 12
  7. 7. Role of Managers in Organizations (cont…)Interpersonal Roles Managers act as figureheads for the organization when they represent their companies to the outside world and perform symbolic duties such as giving out employee awards. Managers act as leaders, attempting to motivate, counsel, and support subordinates Abdisalam Issa-Salwe, Faculty of Computer Science & Engineering, Taibah University 13 Role of Managers in Organizations (cont…)Informational Roles Managers act as the nerve centers of their organization, receiving the most concrete, up-to-date information and redistributing it to those who need to be aware of it. Managers are therefore information disseminators and spokespersons for their organizations Abdisalam Issa-Salwe, Faculty of Computer Science & Engineering, Taibah University 14
  8. 8. Role of Managers in Organizations (cont…)Decisional Roles Managers make decisions. They act as entrepreneurs by initiating new kinds of activities; they handle disturbances arising in the organization; they allocate resources to staff members who need them; and they negotiate conflicts and mediate between conflicting groups in the organization Abdisalam Issa-Salwe, Faculty of Computer Science & Engineering, Taibah University 15 SupportRole Behavior SystemsInterpersonal RolesFigurehead None existLeader Interpersonal None exist ElectronicLiaison communication systems Abdisalam Issa-Salwe, Faculty of Computer Science & Engineering, Taibah University 16
  9. 9. Informational Roles Management Nerve Center information systems, ESS Mail, office Disseminator Information systems Office and professional Spokesperson processing systems, workstations Abdisalam Issa-Salwe, Faculty of Computer Science & Engineering, Taibah University 17Decisional RolesEntrepreneur None existDisturbance Decision None existhandlerResource makingallocatorNegotiator None exist Abdisalam Issa-Salwe, Faculty of Computer Science & Engineering, Taibah University 18
  10. 10. The Process of Decision MakingDecision making can be classified byorganizational level, corresponding to thestrategic, management, knowledge, andoperational levels of the organization.Within each of these levels of decisionmaking, researchers classify decisions asstructured, unstructured or semi-structured.Strategic decision making determines theobjectives, resources, and policies of theorganization. Abdisalam Issa-Salwe, Faculty of Computer Science & Engineering, Taibah University 19The Process of Decision Making (cont…)Management Control decision is principallyconcerned with how efficiently and effectivelyresources are used and how well operational unitsare performing. It is to monitor the effectiveness or efficient usage of resources and performance of operational unitsOperational control decision making determines howto carry out the specific tasks set forth by strategicand middle-management decision makers.Knowledge-level decision making deals withevaluating new ideas for products and services,ways to communicate new knowledge, and ways todistribute information throughout the organization. Abdisalam Issa-Salwe, Faculty of Computer Science & Engineering, Taibah University 20
  11. 11. The Process of Decision Making (cont…) Structured decisions are repetitive and routine, and they involve a definite procedure for handling them so that they do not have to be treated each time as if they were new. Some decisions are semi-structured; in such cases, only part of the problem has a clear-cut answer provided by an accepted procedure. They are based on both type. Abdisalam Issa-Salwe, Faculty of Computer Science & Engineering, Taibah University 21 The Process of Decision Making (cont…)Unstructured decisions are those in which thedecision maker must provide judgment,evaluation, and insights into the problemdefinition.Judgement, insight and evaluation isnecessary to deal with themEach of these decisions is novel, important,and non-routine, and there is no well-understood or agreed-on procedure formaking them (Gorry and Scott-Morton, 1971). Abdisalam Issa-Salwe, Faculty of Computer Science & Engineering, Taibah University 22
  12. 12. The Process of Decision Making (cont…) In general, operational control personnel face fairly well structured problems. In contrast, strategic planners tackle highly unstructured problems. Many of the problems knowledge workers encounter are fairly unstructured as well. Nevertheless, each level of the organization contains both structured and unstructured problems Abdisalam Issa-Salwe, Faculty of Computer Science & Engineering, Taibah University 23Different kinds of information systems at thevarious organization levels support different typesof decisions. Issa-Salwe, Faculty of Computer Science & Engineering, Taibah University Abdisalam 24
  13. 13. SWOT Analysis Tool SWOT analysis is an important tool for auditing the overall strategic position of a business and its environment. SWOT is an abbreviation for Strengths, Weaknesses, Opportunities and Threats Abdisalam Issa-Salwe, Faculty of Computer Science & Engineering, Taibah University 25SWOT Analysis (Cont…) Strengths and weaknesses are Internal factors: For example, a strength could be your specialist marketing expertise. A weakness could be the lack of a new product. Opportunities and threats are external factors. For example, an opportunity could be a developing distribution channel such as the Internet, or changing consumer lifestyles that potentially increase demand for a companys products. A threat could be a new competitor in an important existing market or a technological change that makes existing products potentially obsolete Abdisalam Issa-Salwe, Faculty of Computer Science & Engineering, Taibah University 26
  14. 14. Abdisalam Issa-Salwe, Faculty of Computer Science & Engineering, Taibah University 27SWOT Analysis (cont…)Strength your specialist marketing expertise. a new, innovative product or service location of your business quality processes and procedures any other aspect of your business that adds value to your product or service. Abdisalam Issa-Salwe, Faculty of Computer Science & Engineering, Taibah University 28
  15. 15. SWOT Analysis (cont…)Weakness could be: lack of marketing expertise undifferentiated products and service (i.e. in relation to your competitors) location of your business poor quality goods or services damaged reputation Abdisalam Issa-Salwe, Faculty of Computer Science & Engineering, Taibah University 29SWOT Analysis (cont…)Opportunity could be: a developing market such as the Internet. mergers, joint ventures or strategic alliances moving into new market segments that offer improved profits a new international market a market vacated by an ineffective competitor Abdisalam Issa-Salwe, Faculty of Computer Science & Engineering, Taibah University 30
  16. 16. SWOT Analysis (cont…)Threat could be: a new competitor in your home market price wars with competitors a competitor has a new, innovative product or service competitors have superior access to channels of distribution taxation is introduced on your product or service Abdisalam Issa-Salwe, Faculty of Computer Science & Engineering, Taibah University 31Critical Success Factors (CSF) A small number of easily identifiable operational goals Shaped by industry, manager, environment Believed to assure firm’s success Used to determine organization’s information requirements Abdisalam Issa-Salwe, Faculty of Computer Science & Engineering, Taibah University 32
  17. 17. CSF example Example Goals CSFProfit concern Earnings per share Automotive industry: Return on styling investment quality dealer system Market share cost control New product Energy standardsNot for profit Excellent health care Regional integration Improved monitoring of regulations Efficient use of resources Abdisalam Issa-Salwe, Faculty of Computer Science & Engineering, Taibah University 33 Group Exercise Form into three groups. You are directors of three companies trying to decide how IT can be used to help achieve your competitive strategy. You are free to decide the industry/activities of your individual company. (Note how IT is organised to complement the company’s strategy). Abdisalam Issa-Salwe, Faculty of Computer Science & Engineering, Taibah University 34
  18. 18. Reference Laudon, K. & Laudon, J. (2006) Management Information Systems: Managing the Digital Firm, 9th ed. Prentice Hall Abdisalam Issa-Salwe, Faculty of Computer Science & Engineering, Taibah University 35Tutorial Discussion You are a firm of management consultants. A client has sent you the following email: “We are an SME in the Sheet Metal Industry. We produce standard products as well as custom- products made according to clients’ specifications Currently our operations are do not involve e- commerce technologies (although our design systems and machinery are computer controlled). We would like you to advice on adopting e-commerce for our business.” Give the client a preliminary consultation (Note you are not being asked to be too specific). Abdisalam Issa-Salwe, Faculty of Computer Science & Engineering, Taibah University 36

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