Managing and Using Information Systems A Strategic Approac.docx

Managing and Using Information Systems:
A Strategic Approach – Sixth Edition
Keri Pearlson, Carol Saunders,
and Dennis Galletta
© Copyright 2016
John Wiley & Sons, Inc.
Chapter 4
IT and the Design of Work
American Express Opening Case
• What is the “Blue Work” program?
• What was the strategic thrust behind the Blue Work
program?
• What are “hub,” “club,” “home,” and “roam”
employees?
• What is the role of technology in these
arrangements?
• What was the impact of Blue Work?
• Have other firms found roaming employment
useful?

© 2016 John Wiley & Sons, Inc. 3
4
Work Design Framework
© 2016 John Wiley & Sons, Inc.
IT Has Changed Work
•IT has:
•Created new types of work
• Bureau of Labor Statistics: IT employment in the
USA is at an all-time high
• New jobs such as:
• Data scientists/data miners
• Social media managers
• Communications managers
•Enabled new ways to do traditional work
•Supported new ways to manage people
5 © 2016 John Wiley & Sons, Inc.
How IT Changes Traditional Work

• Changes the way work is done
• Broadens skills; faster but more tasks
• Sometimes IT disconnects us from the tasks
• Sometimes people can perform more strategic tasks
• Few staff are engaged in order entry any longer
• Crowdsourcing is now possible at very low cost (M.Turk)
• Changes how we communicate
• More asynchronous and more irregular
• Social networking has provided new opportunities for
customer interaction
• Collaboration allows a firm to look “big” with new tools
• Changes decision-making
• Real-time information; more information available
• Data mining can identify new insights
• Ideas can be gleaned from social networks
• Middle management ranks have shrunk as Leavitt/Whisler
predicted
• Changes collaboration
• Work is now more team oriented; more collaborative
• Sharing is easier than ever, using multiple methods
• Crowdsourcing can now provide quick answers from tens,
hundreds, or even thousands of people
• We now can disconnect PLACE and TIME (Figure 4.2)

Collaboration Technologies Matrix
• New ways to connect
• Many employees are always connected
• Lines between work and play are now blurred
• For many, home technologies are better than work
technologies
• New ways to manage people
• Behavior controls – direct supervision
• Outcome controls – examining outcomes not actions
• Personnel controls – pick the right person for the task
• The digital approach provides new opportunities at any of
those three levels (Fig. 4.3)
Changes to Supervision/Evaluations/
Compensation/Hiring

Where Work is Done: Mobile and
Virtual Work
• Much work can be done anywhere, anytime
• People desire the flexibility
• Telecommuting = teleworking = working from home or
even in a coffee shop
• Mobile workers work from anywhere (often while
traveling)
• Remote workers = telecommuters + mobile workers
• Virtual teams include remote workers as well as those
in their offices, perhaps scattered geographically
• Virtual teams have a life cycle (Figure 4.4)
Key Activities in the Life Cycle of
Teams
Telecommuting: Global Status
•A poll of 11,300 employees in 22 countries: 1
in 6 telecommute

•When employees in 13 countries were asked if
they need to be in the office to be productive:
• Overall 39% said “yes”
• But specific countries differed in the “yes” votes:
• Only 7% in India, but
• 56% in Japan
• 57% in Germany
14
Driver Effect
Shift to knowledge-based work
Changing demographics and
lifestyle preferences
New technologies with enhanced
bandwidth
Web ubiquity
“Green” concerns
Decouples work from any particular
place
Workers desire geographic and time-
shifting flexibility

Remotely-performed work is practical
and cost-effective
Can stay connected 24/7
Reduced commuting costs; real
estate energy consumption; travel
costs
Drivers of Remote Work and Virtual Teams
15
Advantages of Remote Work Potential Problems
Reduced stress: better ability to meet
schedules; less distraction at work
Higher morale and lower absenteeism
Geographic flexibility
Higher personal productivity
Housebound individuals can join the
workforce
Informal Dress
Increased stress: Harder to separate

work from home life
Harder to evaluate performance
Employee may become disconnected
from company culture
Telecommuters are more easily
replaced by offshore workers
Not suitable for all jobs or employees
Security might be more difficult
Some advantages and disadvantages of remote work
Virtual Teams
•Virtual Teams: geographically and/or
organizationally dispersed coworkers:
• Assembled using telecommunications and IT
• Aim is to accomplish an organizational task
• Often must be evaluated using outcome controls
•Why are they growing in popularity?
• Information explosion: some specialists are far away
• Enhanced bandwidths/fast connections to outsiders
• Technology is available to assist collaboration
• Less difficult to get relevant stakeholders together

Challenges Virtual Teams Traditional Teams
Communications • Multiple time zones can lead to
greater efficiency but can lead to
communication difficulties and
coordination costs (passing work).
• Non-verbal communication is
difficult to convey
• Same time zone.
Scheduling is less difficult.
• Teams may use richer
communication media.
Technology • Proficiency is required in several
technologies.
• Support for face-to-face
interaction without replacing
it
• Skills and task-technology
fit is less critical
Team Diversity • Members represent different
organizations and/or cultures:
- Harder to establish a group identity.
- Necessary to have better com. skills
- More difficult to build trust, norms
- Impact of deadlines not always

consistent
• More homogeneous
members
- Easier group identity
- Easier to communicate
17
Challenges facing virtual teams.
Managerial Issues In Telecommuting and
Mobile Work
• Planning, business and support tasks must be
redesigned to support mobile and remote workers
• Training should be offered so all workers can
understand the new work environment
• Employees selected for telecommuting jobs must
be self-starters
Managing the Challenges
• Communications challenges
• Policies and practices must support the work arrangements
• Must prepare differently for meetings
• Slides and other electronic material must be shared beforehand

• Soft-spoken people are difficult to hear; managers must repeat
key
messages
• Frequent communications are helpful (hard to
“overcommunicate”)
• Technology challenges
• Provide technology and support to remote workers
• Use high quality web conferencing applications
• Clarify time zones for scheduling
• Information should be available for everyone (cloud storage
can
help)
• Policies and norms about use of the technology can be
important
Managing the Challenges
•Diversity challenges
•Concept of time differs throughout the world
• Anglo-American cultures view time as a continuum
(deadlines are important; many prefer not to multitask)
• Indian cultures have a cyclical view of time (deadlines are
less potent; many prefer to multitask)
•Team diversity might need nurturing:
• Communications differences
• Trust building

• Group identity formation
Gaining Acceptance For IT-induced
Change
• Many changes might be a major concern for
employees
• Changes might be resisted if they are viewed as
negative impacts
• Several types of resistance:
• Denying that the system is up and running
• Sabotage by distorting or otherwise altering inputs
• Believing and/or spreading the word that the new system
will not change the status quo
• Refusing to use the new system (if voluntary)
Kotter’s Model
Chapter 5
IS and Business Transformation

Sloan Valve
•What was wrong with their Product
Development Process?
•What did Sloan do? What is NPD?
•Did it help?
•Are all enterprise system implementations this
successful?
SILO PERSPECTIVE
VERSUS
BUSINESS PROCESS PERSPECTIVE
25
Silo (Functional) Perspective
• Specialized functions (sales, accounting, production, etc.
• Advantages:

• Allows optimization of expertise.
• Group like functions together for transfer of knowledge.
• Disadvantages:
• Sub-optimization (reinvent wheel; gaps in communication;
bureaucracy)
• Tend to lose sight of overall organizational objectives.
Executive Offices
CEO
President
Operations Marketing Accounting Finance Administration
The Process Perspective
• Examples of processes:
• Fulfill customer orders
• Manufacturing, planning, execution
• Procurement (see below)
• Processes have:
• Beginning and an end
• Inputs and outputs
• A process to convert inputs into outputs
• Metrics to measure effectiveness
• They cross functions

Receive
Requirement for
Goods/Services
Create and Send
Purchase Order Receive Goods Verify Invoice Pay Vendor
Cross-Functional Nature of Business Processes
How to Manage a Process
• Identify the customers of processes (who receives
the output?)
• Identify the customers’ requirements (how do we
judge success?)
• Clarify the value each process adds to the
organizational goals
• Share this perspective so the organization itself
becomes more process focused

Comparison of Silo Perspective and
Business Process Perspective
Silo Perspective Business Process
Perspective
Definition Self-contained functional units
such as marketing, operations,
finance
Interrelated, sequential set of
activities and tasks that turns
inputs into outputs
Focus Functional Cross-functional
Goal
Accomplishment
Optimizes on functional goals,
which might be suboptimal for
the organization
Optimizes on organizational
goals, or the “big picture”
Benefits Highlighting and developing
core competencies; functional
efficiencies
Avoiding work duplication and
cross-functional communication
gaps; organizational
effectiveness
Problems Redundancy of information

throughout the organization;
cross-functional inefficiencies;
communication problems
Difficult to find knowledgeable
generalists; sophisticated
software is needed
What do you do when things change?
•Dynamic and agile processes
•Examples:
• Agile: Autos are built with wires and space for
options
• Dynamic: Call centers route incoming or even
outgoing calls to available locations and agents
• Software defined architectures (see chapter 6)
•IT is required to pull this off well
Techniques to Transform a Static
Process
•Radical process redesign
• Also known as business process reengineering
•Incremental, continuous process
improvement

• Including total quality management (TQM) and
Six Sigma
Incremental Change
• Total Quality Management
• Often results in favorable reactions from personnel
• Improvements are owned and controlled
• Less threatening change
• Six-Sigma is one popular approach to TQM
• Developed at Motorola
• Institutionalized at GE for “near-perfect products”
• Generally regarded as 3.4 defects per million opportunities for
defect (6 std dev from mean)
Time
Improve-
ment
Radical Change
• Business Process Reengineering (BPR)
• Sets aggressive improvement goals.
• Goal is to make a rapid, breakthrough impact on key

metrics in a short amount of time.
• Greater resistance by personnel.
• Use only when radical change is needed.
Time
Improve-
ment
Comparing the Two
Improve-
ment
Key Aspects of Radical Change
Approaches
• Need for quick, major change
• Thinking from a cross-functional process
perspective
• Challenge to old assumptions
• Networked (cross-functional organization)
• Empowerment of individuals in the process
• Measurement of success via metrics tied to
business goals and effectiveness of new processes

Workflow and Mapping Processes
• Workflow diagrams show a picture of the sequence
and detail of each process step
• Objective is to understand and communicate the
dimensions of the process
• Over 200 products are available to do this
• High-level overview chart plus detailed flow
diagram of the process
BPM
• Information systems tools used to enable information
flow within and between processes.
• Comprehensive, enterprise software packages.
• Most frequently discussed:
• ERP (Enterprise Resource Planning),
• CRM (Customer Relationship Management),
• SCM (Supply Chain Management)
• Designed to manage the potentially hundreds of
systems throughout a large organization.

• SAP, Oracle, Peoplesoft are the most widely used ERP
software packages in large organizations.
BPM Architecture
Standardization vs Integration
Business Process Standardization
Low High
Bu
si
ne
ss
P
ro
ce
ss
In
te

gr
at
io
n
High Single face to customers
and suppliers but standards
not enforced internally
High needs for reliability,
predictability, and sharing;
single view of process
Low Decentralized design;
business units decide how
to meet customer needs
Tasks are done the same way
across units, but there is little
need for business units to
interact
Source: J. Ross “Forget Strategy: Focus IT on your Operating
Model,”
MIT Center for Information Systems Research Briefing
(December 2005)
Enterprise Systems (Enterprise Resource
Planning or ERP)

• Seamlessly integrate information flows throughout the
company.
• Reflect industry “best” practices.
• Need to be integrated with existing hardware, OSs,
databases, and telecommunications.
• Some assembly (customization) is required
• The systems evolve to fit the needs of the diverse
marketplace.
ERP Advantages and Disadvantages
Advantages Disadvantages
• Represent “best practices”
• Modules throughout the
organization communicate with
each other
• Enable centralized decision-making
• Eliminate redundant data entry
• Enable standardized procedures in
different locations
• Enormous amount of work
• Require redesign of business
practices for maximum benefit

• Require customization if special
features are needed
• Very high cost
• Sold as a suite, not individual
modules
• Requires extensive training
• High risk of failure
ERP II
• Makes information available to external
stakeholders too
• Enables e-business applications
• Integrates into the cloud
• Includes ERP plus other functions (see Figure 5.8)
ERP and ERP II Functions
Customer Relationship
Management

• Customer Relationship Management (CRM) is a
natural extension of applying the value chain model
to customers.
• CRM includes many management activities
performed to
• obtain,
• enhance relationships with, and
• retain customers.
• CRM can lead to better customer service, which
leads to competitive advantage for the business.
CRM
•Common systems are:
• Oracle
• SAP
• Salesforce.com (web-based cloud system)
•Oracle and SAP integrate into their ERP
systems
Supply Chain Management (SCM)
• An enterprise system that manages the integrated
supply chain

• Translation: processes are linked across companies
• The single network optimizes costs and
opportunities for all companies in the supply chain
• Every part of the supply chain has the latest
information about sales expected and inventories
from source materials at all stages
• Bullwhip effect occurs when the supplier at each
stage adds a small “buffer” for it’s suppliers in case
demand is higher than expected
Difficulties in Integrated Supply Chains
• Information integration requires agreement of what
information to share, how to share it, and the
authority to view it.
• Trust must be established
• Planning must be synchronized carefully
• Workflow must be coordinated between partners to
determine what to do with the information they
obtain
Advantages and Disadvantages

of Enterprise Systems
The Adoption Decision
• The enterprise system sometimes should drive
business process redesign when:
• Just starting out.
• Organizational processes are not relied upon for strategic
advantage.
• Current systems are in crisis.
• It is inappropriate for the enterprise system to drive
business process redesign when:
• Changing an organization’s processes that are relied upon for
strategic advantage.
• The package does not fit the organization.
• There is a lack of top management support.
That’s a wrap!
Dr. Les Stovall
[email protected]
Slide Number 1Chapter 4�IT and the Design of WorkAmerican

Express Opening CaseSlide Number 4IT Has Changed
WorkHow IT Changes Traditional WorkHow IT Changes
Traditional WorkCollaboration Technologies MatrixHow IT
Changes Traditional WorkChanges to Supervision/Evaluations/
Compensation/HiringWhere Work is Done: Mobile and Virtual
WorkKey Activities in the Life Cycle of TeamsTelecommuting:
Global StatusSlide Number 14Slide Number 15Virtual
TeamsSlide Number 17Managerial Issues In Telecommuting and
Mobile WorkManaging the ChallengesManaging the
ChallengesGaining Acceptance For IT-induced ChangeKotter’s
ModelChapter 5�IS and Business TransformationSloan
ValveSILO PERSPECTIVE �VERSUS �BUSINESS PROCESS
PERSPECTIVESilo (Functional) PerspectiveThe Process
PerspectiveCross-Functional Nature of Business ProcessesHow
to Manage a ProcessSlide Number 30What do you do when
things change?Techniques to Transform a Static
ProcessIncremental ChangeRadical ChangeComparing the
TwoKey Aspects of Radical Change ApproachesWorkflow and
Mapping ProcessesBPMBPM ArchitectureStandardization vs
IntegrationEnterprise Systems (Enterprise Resource Planning or
ERP)�ERP Advantages and DisadvantagesERP IIERP and ERP
II FunctionsCustomer Relationship ManagementCRMSupply
Chain Management (SCM)Difficulties in Integrated Supply
ChainsAdvantages and Disadvantages �of Enterprise
SystemsThe Adoption DecisionThat’s a wrap!

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