3. Know your facilitator
• Instrumentation and Controls Engineer
• MBA in Systems and Marketing
• Master Project Manager
• Post Graduate Diploma in IT Management
• Certified Information Systems Auditor
• Managed MIS Projects for
ü GM-Opel Astra (Holden) Car Manufacturing Automation Plant
ü Tata Indica, NANO (TELCO) Manufacturing Plant
ü Shopfloor Information Management Systems
ü Dubai Duty Free Transaction System
ü Dubai Municipality
ü SAP India, Singapore, Thailand, Taiwan, Indonesia Integration
ü ABB Sydney – Electrical Plants Automation Projects
5. In this Unit..
Week
1
• First
workshop
• Topic
1,2,3
Week
2
• Read
the
Study
guide
• Read
the
e-‐book
Week
3
• 2nd
workshop
• Topic
4,5,6
Week
4
• Do
the
assignment
Week
5
• 3rd
workshop
• Topic
7,8,9,10
Week
6
• Exam
on
4th
September
6. Today’s Agenda
0
• Starts
08:30
am
• MIS
–
your
understanding
• Ac2vi2es
and
discussions
• Morning
tea@10:00
1
• Managing
IS
to
seize
new
strategic
opportuni2es
• Lunch
@
12:30pm
–
01:30
pm
2
• Case
Study
Discussion
2me
1:30
to
02:00
pm
• Managing
using
a
systems
approach
• Evening
Tea@
2:30pm
3
• Informa2on
systems
and
strategy
• Session
closes
04:00
pm
Unit-403, Workshop1
7. E-‐BOOK
Managing and Using Information Systems: A
Strategic Approach
by Keri Pearlson & Carol Saunders
8. Roman
Empire
Mughal
Empire
Renaissance
OXoman
Empire
Social
Developent
Index
Ibraham
Buddha
Confucius
Plato
life
of
alexander
Jesus
Zero
Mohammad`
Black
Death
Columbus
Calculus
World
popula2on
‘000
0
100
200
300
400
500
600
700
0
1000
2000
3000
4000
5000
6000
7000
8000
14. Google
chairman
predicts
the
whole
world
will
be
on
the
Web
by
2020.
CNN
June
2013
"For
every
person
online,
there
are
two
who
are
not,"
Eric
Schmidt
15. Major
shies
in
the
demand
for
skills
Economy-‐wide
measures
of
rou2ne
and
non-‐rou2ne
task
input
(US)
40
45
50
55
60
65
1960
1970
1980
1990
2002
Rou2ne
manual
Nonrou2ne
manual
Rou2ne
cogni2ve
Nonrou2ne
analy2c
Nonrou2ne
interac2ve
(Levy
and
Murnane,
2010)
Meantaskinputaspercentilesofthe1960taskdistribution
Dilemma
facing
schools:
The
skills
that
are
easiest
to
teach
and
test
are
also
the
ones
that
are
easiest
to
digi?se,
automate
and
outsource
18
16.
17. TOPIC
1:
Managing
IS
to
seize
new
strategic
opportuni2es
Analyse
the
impact
that
IS
has
on
organisa2ons
and
the
consequent
changes
that
have
occurred
to
the
role
of
business
managers.
18. 18
Objec2ve
1. Explain
why
managing
informa2on
is
important
in
today's
business
world
2. Define
concepts
from
the
hierarchy
of
data
and
IS,
as
dis2nct
from
IT
3. Describe
the
major
challenges
facing
today's
business
and
IS
manager
4. Analyse
and
report
on
an
organisa2on's
IT-‐
investment
profile
19. 19
A
Business
View
• IT
is
a
cri2cal
resource.
• IT
is
over
50%
of
capital
goods
dollars
spent
in
the
US.
– Over
$3,800
a
year
per
capita.
– High
growth
firms
invest
more
in
IT.
• Business
managers
decide
resource
alloca2on.
20. 20
Par2cipa2ng
in
Informa2on
Decisions
• Business
managers
“must”
be
involved
in
informa2on
decisions.
21. 21
Par2cipa2ng
in
Informa2on
Decisions
• Business
managers
“must”
be
involved
in
informa2on
decisions.
• .
IS
…
– is
a
cri2cal
resource.
– enables
change
in
how
people
work
together.
– is
integrated
with
almost
every
aspect
of
business.
– enables
business
opportuni2es
and
new
strategies.
– can
be
used
to
combat
business
challenges
from
22. 22
People
and
Technology
• People
and
Technology
work
together.
– Technology
is
cri2cal.
– Workers
rely
heavily
on
technology.
• Managers
must
know
how
to
mesh
both.
– Examine
long-‐term
and
short-‐term
consequences.
– Manage
change
carefully.
• Technology
changes
rapidly.
23. 23
Is
IT
a
cost
centre?
Can
IS
create
new
strategic
Business
Opportuni2es?
(Apply
product
vs.
market
Matrix
24. 24
Business
Goals
• IS
must
support
business
goals.
– It
is
not
an
end
but
a
means
to
an
end.
– Support
and
strategic
focus.
• Toys
R
Us
IT
debacle.
– Must
meet
user
needs.
– Must
be
able
to
support
business
transac2ons.
25. 25
Organiza2onal
Systems
• IT
must
support
organiza2onal
systems
– The
people,
work
processes,
and
structure.
• Carefully
consider
the
consequences
of
making
an
IS
change.
– How
will
this
impact
the
way
work
is
done?
– Will
the
people
accept
this
new
technology?
– What
changes
may
need
to
be
made
in
the
structure
of
the
organiza2on?
26. 26
WHAT
SKILLS
ARE
NEEDED
TO
PARTICIPATE
EFFECTIVELY
IN
INFORMATION
TECHNOLOGY
DECISIONS?
27. 27
Basic
Skills
Needed
• Myth
-‐
technical
exper2se
is
not
needed
to
par2cipate.
• Managerial
role
and
skills
needed
(Fig
I.2):
– Visionary
–
crea2vity,
curiosity,
confidence,
focus
on
business
solu2ons,
flexibility.
– Informa2onal
and
Interpersonal
–
communica2on,
informa2on
gathering,
interpersonal
skills.
– Structured
–
project
management,
analy2cal
skills,
organiza2onal
skills,
planning
skills.
28. 28
BASIC
ASSUMPTIONS
• Managers
must
know
about
both
using
and
managing
informa2on.
• Managers
must
be
knowledgeable
par2cipants
in
IS
decisions.
– The
general
manager
must
have
a
basic
understanding
of
the
business
and
technology
issues
related
to
IS.
• Technology
of
today
is
different
from
the
technology
of
yesterday.
29. 29
• The
role
of
the
general
manager
and
IS
manager
are
dis2nct.
– The
GM
must
have
a
basic
understanding
of
IS
to
make
decisions
that
may
have
significant
implica2ons
for
the
business.
– The
IS
manager
must
have
general
business
knowledge
and
a
more
in
depth
knowledge
of
IS
to
support
its
func2on.
30. 30
Management
Assump2ons
• Four
key
ac2vi2es
of
the
classic
view
of
management
(Fig
I.3).
– Planning
– Organizing
– Leading
– Controlling
• Classic
view
is
seen
as
more
of
a
tac2cal
approach
to
management.
31. 31
• The
Mintzberg
model
describes
management
in
behavioral
terms
(Fig
I.4
–
page
25).
– Interpersonal
– Informa2onal
– Decisional
Mintzberg
Model
33. 33
Func2onal
View
• Func2onal
View
of
the
business
– Based
on
the
func2ons
people
perform.
– Informa2on
flows
ver2cally
in
the
organiza2on.
– Some2mes
informa2on
flows
across
the
organiza2on.
– Accoun2ng,
Opera2ons,
Marke2ng,
Sales
and
Support.
– Execu2ve
Management
receives
the
informa2on
and
distributes
as
need
arrives.
– See
Figure
I.5
34. 34
Figure
I.6
Process
View
of
the
Firm:
The
Value
Chain
35. 35
Process
View
• This
model
sees
the
business
by
the
processes
it
performs
to
achieve
its
goals.
• Porter
describes
business
in
terms
of
its
primary
and
support
ac2vi2es.
– Primary
–
inbound
and
outbound
logis2cs,
opera2ons,
marke2ng
and
sales.
– Support
–
HR,
technology,
procurement,
infrastructure.
• Ac2vi2es
are
linked
together
to
form
a
chain
–
the
value
chain
(fig
I.6).
37. 37
Informa2on
Hierarchy
• Data,
Informa2on,
and
Knowledge
are
not
interchangeable
terms.
– Data
–
set
of
specific
objec2ve
facts
or
observa2ons
(inventory
contains
100
widgets).
– Informa2on
–
data
endowed
with
relevance
and
purpose
(75%
of
widgets
were
purchased
by
customers
in
December)
–
see
fig
I.8.
– Knowledge
-‐
informa2on
that
has
been
synthesized
and
contextualized
to
provide
value.
38. 38
Data Information Knowledge
Definition Simple
Observations of the
sate of the world
Data endowed
with relevance
and purpose
Info from the
human mind
(includes
reflection, etc)
Characteristic • Easily structured
• “ captured
• “ transferred
• Often quantified
• Mere facts
• Requires unit of
analysis
• Data that has
been processed
• Human mediation
necessary
• Hard to structure
• Difficult to capture
on machines
• Often tacit
• Hard to transfer
Example Daily inventory
reports of all
inventory items sent
to CEO of large
manufacturing
company
Daily inventory
report of items
below economic
order quality
levels sent to
inventory manager
(IM)
IM knows which
items need to be
reordered in light
of related potential
problems
39. 39
Top Management Middle
Management
Supervisory &
Lower-Level
Management
Time Horizon Long: years Medium: weeks,
months, years
Short: day to day
Level of
Detail
Highly aggregated
Less accurate
More predicted
Summarized
Integrated
Often financial
Very detailed
Very accurate
Often
nonfinancial
Orientation Primarily external Primarily internal
with limited
external
Internal
Decision Extremely
judgmental
Uses creativity and
analytic skills
Relatively
judgmental
Heavy reliance
on rules
Figure
I.8
Informa2on
Characteris2cs
across
Hierarchical
Levels
41. 41
Figure
I.9
System
Hierarchy
Management
Information Systems
People Technology Process
42. 42
System
Hierarchy
• Informa2on
systems
are
comprised
of
three
main
elements:
– Technology
– People
– Process
• Infrastructure
–
everything
that
supports
the
flow
of
processing
informa2on
– Hardware,
soeware,
data,
and
components.
• Architecture
–
strategy
implicit
in
these
components.
43. Ac2vity
1.2
Tom
Peters
ACTIVITY
1.2—SIMPLIFYING
SYSTEMS
Having
watched
the
Tom
Peters
video,
reflect
on
whether
or
not
your
organisa2on
ac2vely
encourages
con2nuous
improvement
of
systems.
What
would
you
do
to
implement
a
program
where
your
people
can
make
it
easier
to
achieve
your
core
business
objec2ves
through
simplifying
systems?
.
44. ORGANISATIONAL
NEEDS
AND
INVESTMENT
• Enterprise
Resource
Planning
systems
(ERP)
systems
• data-‐warehousing
and
data-‐mining
systems
• Groupware
• group
support
systems
• Intranets
• e-‐commerce
and
e-‐business
services
and
tools.
46. Gibson
and
Nolan:
Stages
of
Growth
Stage
1:
Ini?a?on
simple
administra2ve
func2ons
such
as
automa2on
of
payroll
or
general
ledger
func2ons.
low
expenditures,
liXle
user
involvement.
Stage
2:
Contagion
broader-‐ranging
uses
of
IT,..
As
usage
grows,
there
is
a
lack
of
general
control.
Budgets
grow
rapidly;
the
focus
is
on
the
machine;
IT
use
is
plagued
by
crises.
Stage
3:
Control
2ghter
controls
are
necessary
upgrading
system
documenta2on,
budget
reviews
and
full
charge-‐out
of
IT
costs
to
user
departments.
Integra2on
of
incompa2ble
systems
and
user
frustra2on
become
common
themes.
Stage
4:
Integra?on
user-‐oriented
steering
commiXees,
financial
planning
for
applica2ons,
charge-‐back
systems.
5:
Data
administra?on
data
is
a
corporate
resource
Focus
on
informa2on
systems,
rather
than
informa2on
technology.
Stage
6:
Maturity
data
administra2on.
Organisa2ons
use
their
data
resources
to
develop
compe22ve
and
opportunis2c
applica2ons,
not
simply
applica2ons
to
make
their
own
internal
opera2ons
more
efficient.
The
aim
is
to
develop
data-‐resource
management
strategic
planning.
47. 47
Summary
• Business
managers
“must”
be
involved
in
informa2on
decisions.
• IT
is
a
cri2cal
resource.
• People
and
Technology
work
together.
• Certain
key
skills
are
needed.
• Data,
Informa2on,
and
Knowledge
are
dis2nct.
48. 48
THE
CASE
FOR
PARTICIPATING
IN
DECISIONS
ABOUT
INFORMATION
SYSTEMS
49. 49
CASE
STUDY
1:
• Amazon.com
has
garnered
a
leadership
posi2on
in
the
online
world
by
leveraging
their
new
business
model.
See
www.amazon.com
– Expanded
market
offerings.
– Increased
customiza2on
and
personaliza2on
– Smarter
storage
– Cost
cuxng.
50. 50
CASE
STUDY
2:
• Google
has
become
the
leader
in
the
search
engine
market
through
innova2on,
simplicity,
and
by
adding
new
features.
– See
www.google.com
– Their
mission
statement
can
be
found
at
hXp://www.google.com/corporate/
51. The
informa2on
facts
of
life
If
informa2on
is
power
and
money,
people
won't
share
it
easily.
52. TOPIC
2:
Managing
using
a
systems
approach
Analyse
IS
and
its
management
using
a
number
of
analysis
approaches
53. 53
Objec2ves
1. define
the
terms
'system'
and
'informa2on
system'
in
a
management
context
2. explain
the
difference
between
tradi2onal
and
object-‐oriented
approaches
to
systems
analysis
3. produce
a
basic
data-‐flow
diagram
4. Produce
a
basic
en2ty–rela2onship
diagram
54. 54
1.
System
?
A
group
of
• interac2ng,
•
interrelated,
or
•
interdependent
elements
forming
a
complex
whole.
55. 55
1.
Informa2on
System
?
• An
informa2on
system
(IS)
can
be
defined
in
a
very
broad
way
as
the
collec2on
of
informa2on
technology,
procedures
and
people
responsible
for
the
capture,
movement,
management
and
distribu2on
of
data
and
informa2on.
56. 56
1.
System
Analysis?
'Systems
analysis
and
design'
is
a
set
of
principles,
a
method
by
which
we
can
consider,
design
and
implement
informa2on
systems
.
1. Tradi2onal
Approach
2. Object
oriented
Approach
61. 61
How
to
develop
IS
for
your
organiza2on?
1. Plan
(Strategy)
2. Analyse
(Business)
3. Design
(IT,
system)
4. Implement
(Development
and
cutover)
62. 62
Key
Characteris2cs
• It
is
user
driven
• It
is
data
focused
• It
is
automated
• It
uses
models
• It
uses
formal
structured
techniques
• It
treats
the
full
Systems
Planning
Life
cycle-‐
Integrated
whole
• It
is
a
Reduc2onist
Approach
• It
builds
a
corporate
knowledge
base
63. 63
Real
World
Example
• Na2onal
Linen
Service
was
facing
poor
earnings
due
to
increased
compe22on
and
a
weak
economy.
• They
created
a
strategic
systems
department
to
increase
compe22veness.
• A
new
system
was
implemented,
BOSS,
that
deleted
expired
customer
contracts
hur2ng
their
boXom
line.
• The
unintended
consequences
of
the
system
were
not
taken
into
account.
64. The
informa2on
facts
of
life
Managers
prefer
to
get
informa2on
from
people
rather
than
computers;
people
add
value
to
raw
informa2on
by
interpre2ng
it
and
adding
context.
65. TOPIC
3:Informa2on
systems
and
strategy
Iden2fy
the
elements
that
combine
to
form
an
informa2on
vision
and
informa2on
technology
(IT)
architecture
66. 66
Objec2ves
• define
'mission
statement'
and
'vision
statement',
and
enumerate
the
differences
between
them
• explain
how
organisa2ons
can
use
IS
to
gain
strategic
and
compe22ve
advantage,
and
iden2fy
poten2ally
useful
IS
applica2ons
for
your
own
organisa2on
• explain
how
SIS
can
change
the
nature
of
a
business
or
industry
when
it
is
used
as
an
instrument
to
change
the
balance
of
power
between
the
business
and
its
compe2tors,
customers
and/or
suppliers
• iden2fy
and
evaluate
some
of
the
poten2al
risks,
as
well
as
the
opportuni2es,
which
strategic
systems
can
create
• explain
how
interorganisa2onal
systems,
especially
e-‐business,
can
be
used
to
provide
beXer
service
for
customers.
67. 67
Do
you
have
a
WriXen
Strategy
• Vision
• Mission
• Strategy
• Corporate
Plan
A
plan
ar2cula2ng
where
a
business
seeks
to
go
and
how
it
expects
to
get
there.
It
is
the
means
by
which
a
business
communicates
its
goals.
68. Wal-‐Mart:
"To
give
ordinary
folk
the
chance
to
buy
the
same
thing
as
rich
people.”
71. How
to
Write
Strategy
Statement
What
is
this
missing?
72. 72
The
Impact
of
IS
• The
Informa2on
Systems
Strategy
Triangle
is
a
simple
framework
for
understanding
the
impact
of
IS
on
organiza2ons.
• Successful
firms
have
an
overriding
business
strategy.
• This
business
strategy
drives
both
Organiza2onal
and
Informa2on
strategy.
• All
decisions
are
driven
by
the
firm’s
business
objec2ves.
73. 73
Figure
1.1
The
Informa2on
Systems
Strategy
Triangle
74. 74
IS
Strategy
Triangle
• Business
Strategy
drives
all
other
strategies.
• Organiza2onal
and
Informa2on
Strategy
are
then
dependent
upon
the
Business
Strategy.
• Changes
in
any
strategy
requires
changes
in
the
others
to
maintain
balance.
• IS
Strategy
is
affected
by
the
other
strategies
a
firm
uses.
• IS
strategy
always
involves
consequences.
76. 76
Generic
Strategies
Framework
• Michael
Porter
describes
how
businesses
can
build
a
sustainable
compe22ve
advantage.
• He
iden2fied
three
primary
strategies
for
achieving
compe22ve
advantage:
– Cost
leadership
–
lowest-‐cost
producer.
– Differen2a2on
–
product
is
unique.
– Focus
–
limited
scope.
77. 77
Figure
1.2
Three
strategies
for
achieving
compe22ve
advantage.
78. 78
Using
Informa2on
Resources
to
Influence
Compe22ve
Forces
• Porter’s
five
forces
model
show
the
major
forces
that
shape
the
compe22ve
environment
of
the
firm.
1. Threat
of
New
Entrants:
new
firms
that
may
enter
a
companies
market.
2. Bargaining
Power
of
Buyers:
the
ability
of
buyers
to
use
their
market
power
to
decrease
a
firm’s
compe22ve
posi2on
3. Bargaining
Power
of
Suppliers:
the
ability
suppliers
of
the
inputs
of
a
product
or
service
to
lower
a
firm’s
compe22ve
posi2on
4. Threat
of
Subs?tutes:
providers
of
equivalent
or
superior
alterna2ve
products
5. Industry
Compe?tors:
current
compe2tors
for
the
same
product.
• Figure
2.2
and
2.3
show
this
model
in
detail.
79. 79
Figure
2.2
Five
compe22ve
forces
with
poten2al
strategic
use
of
informa2on
resources.
80. 80
Porter’s
Compe22ve
Advantage
• Remember
that
a
companies
overall
business
strategy
will
drive
all
other
strategies.
• Porter
defined
these
compe22ve
advantages
to
represent
various
business
strategies
found
in
the
marketplace.
• Cost
leadership
strategy
firms
include
Walmart,
Suzuki,
Overstock.com,
etc.
• Differen2a2on
strategy
firms
include
Coca
Cola,
Progressive
Insurance,
Publix,
etc.
• Focus
strategy
firms
include
the
Ritz
Carlton,
MarrioX,
etc.
81. 81
Framework Key Idea Application to Information Systems
Porter’s
generic
strategies
framework
Firms achieve
competitive
advantage through
cost leadership,
differentiation, or
focus.
Understanding which strategy is chosen by
a firm is critical to choosing IS to
complement that strategy.
D’Aveni’s
hyper-
competition
model
Speed and
aggressive moves
and countermoves
by a firm create
competitive
advantage
The 7 Ss give the manager suggestions on
what moves and countermoves to make.
IS are critical to achieve the speed needed
for these moves.
Figure
1.5
Summary
of
key
strategy
frameworks.
82. 82
Understanding
Organiza2on
Strategy
To
understand
organiza2onal
strategy
we
must
answer
the
following
ques2ons:
1.
What
are
the
important
structures
and
repor2ng
rela2onships
within
the
organiza2on?
2.
What
are
the
characteris2cs,
experiences,
and
skill
levels
of
the
people
within
the
organiza2on?
3.
What
are
the
key
business
processes?
4.
What
control
systems
are
in
place?
5.
What
is
the
culture
of
the
organiza2on?
83. 83
Framework Key Idea Usefulness in IS Discussions
Business
Diamond
There are 4 key
components of an
organization: business
processes, values and
beliefs, management
control systems, and
tasks and structures.
Using IS in an organization will affect
each of these components. Use this
framework to identify where these
impacts are likely to occur
Managerial
levers
Organizational
variables, control
variables, and cultural
variables are the levers
managers can use to
affect change in their
organizations
This is a more detailed model than
the Business diamond and gives
specific areas where IS can be used
to manage the organization and to
change it
Figure
1.8
Summary
of
organiza2onal
strategy
frameworks
85. 85
IS
Strategy
• The
plan
an
organiza2on
uses
in
providing
informa2on
services.
• IS
allows
business
to
implement
its
business
strategy.
• IS
helps
determine
the
company’s
capabili2es.
• Four
key
IS
infrastructure
components
are
key
to
IS
strategy
(Figure
1.9)
• These
key
components
are
sufficient
to
allow
the
general
manager
to
assess
cri2cal
IS
issues.
86. 86
What Who Where
Hardware List of physical
components of the
system
Individuals who use it
Individuals who
manage it
Physical location
Software List of programs,
applications, and
utilities
Individuals who use it
Individuals who
manage it
What hardware it
resides upon and
where that hardware
is located
Networking Diagram of how
hardware and
software
components are
connected
Individuals who use
it/ Individuals who
manage it/
Company service
obtained from
Where the nodes are
located, where the
wires and other
transport media are
located
Data Bits of information
stored in the system
Individuals who use it
Individuals who
manage it
Where the
information resides
Figure
1.9
Informa2on
systems
strategy
matrix.
87. 87
Competitive Force IT Influence on Competitive Force
Threat of New Entrants Can be lowered if there are barriers to entry.
Sometimes IS can be used to create barriers to entry
Bargaining Power of Buyers Can be high if it’s easy to switch. Switching costs are
increased by giving buyers things they value in
exchange such as lower costs or useful information
Bargaining Power of Suppliers Forces is strongest when there are few firms to
choose from, quality is inputs is crucial or the volume
of purchases is insignificant to the supplier
Threat of Substitute Products Depends on buyers’ willingness to substitute and the
level of switching costs buyer’s face
Industrial Competitors Rivalry is high when it is expensive to leave and
industry, the industry’s growth rate is declining, or
products have lost differentiation
Figure
2.3
Applica2on
of
five
compe22ve
forces
model.