1 Introduction to Information Technology Turban, Rainer and Potter Chapter 2 Organizations and Information Technology Support CHAPTER 2 ORGANIZATIONS AND INFORMATION TECHNOLOGY SUPPORT
2 Introduction to Information Technology Turban, Rainer and Potter Chapter 2 Organizations and Information Technology Support Learning Objectives Discuss major information systems concepts such as architecture and infrastructure. Describe the hierarchical structure of organizations and the corresponding information systems. Define various information systems and their evolution, and categorize specific systems. Describe the support provided to different types of employees in an organization. Describe how information resources are managed.
3 Introduction to Information Technology Turban, Rainer and Potter Chapter 2 Organizations and Information Technology Support Chapter Overview Information Systems Infrastructure and Architecture • Information Infrastructure • Information Architecture • Traditional Architectures • New Architectures Evolution and IT Support at Different Organizations: Types of Structure and Information Organizational Systems Levels Support • Organizational • Transaction • Managers Structure Processing • Knowledge • Corresponding Systems Workers Information • Management • Clerical Information Staff Systems • Support Systems Managing Information Technology in Organizations • Which resources are managed by whom? • What is the role of the information systems department? • Who runs the ISD and to whom does the department report? • What are the relationships between ISD and end users?
4 Introduction to Information Technology Turban, Rainer and Potter Chapter 2 Organizations and Information Technology Support Case : Burlington Coat Factory The Business Problem î Burlingion is the largest retailer of coats in the United States î sells clothes, linens, luggage, jewelry, baby furniture and accessories î faces extremely strong competition î wants to offer up to 60% off department store prices î needs information to respond to demand î needs to communicate and collaborate with both store mangers and suppliers quickly and effectively
Introduction to Information Technology Turban, Rainer and Potter Chapter 2 Organizations and Information Technology Support 5 Case (continued…) The Solution î î a corporate computer-based communication system networks to a main processor transfers sales data by satellite technology executes routine transactions on the headquarters’ computer î feeds information from the corporate databases into spreadsheets or word processors on desktop computers for end-user computing and decision support The Results î dramatic decrease in communication problems î steady increase in sales volume and profits
6 Introduction to Information Technology Turban, Rainer and Potter Chapter 2 Organizations and Information Technology Support Case (continued…) What have we learned from this case? ? î Characteristics of a networked corporate information system that are usually found in organizations » several different information systems exist in one organization » some of these systems may be completely independent, but most are interconnected » information systems are connected by means of electronic networks » the information system is composed of large and small computers and other hardware connected by different types of networks » many information systems use client/server architecture
Introduction to Information Technology Turban, Rainer and Potter Chapter 2 Organizations and Information Technology Support 7 Information Systems Architecture Physical facilities, hardware, software, databases services, and management that support all computing resources in an organization Five major components of infrastructure î î î computer hardware general-purpose software networks and communication facilities database information management personnel Tells how specific computing resources are arranged, operated, and managed
8 Introduction to Information Technology Turban, Rainer and Potter Chapter 2 Organizations and Information Technology Support Information Systems Architecture (continued …) Information Architecture î a high-level map or plan of the information requirements î a manner in which these requirements will be satisfied î a guide for current IT operations î a blueprint for future IT directions î meets the organization’s strategic business needs î must tie together the information requirements, the infrastructure, and the applications î similar to the conceptual planning of a house
9 Introduction to Information Technology Turban, Rainer and Potter Chapter 2 Organizations and Information Technology Support Information Systems Architecture (continued …) Traditional Architectures î mainframe environment » processing is done by a mainframe computer - a relatively large computer built to handle large amounts of data, thousands of user terminals, and millions of transactions » modern versions of this architecture : personal computers (PCs) and network computing (NC) î PC environment » PCs form the hardware architecture î distributed environment » divides the processing work between two or more computers » the participating computers can be all mainframe, all PCs, or (usually) a combination of the two
10 Introduction to Information Technology Turban, Rainer and Potter Chapter 2 Organizations and Information Technology Support Information Systems Architecture (continued …) New Architectures î client/server architecture » several computers share resources and are able to communicate with many other computers » a client - a computer such as a PC attached to the network, which is used to access shared network resources » a server - a machine that is attached to the same network and provides clients with these services » purpose : optimize the use of computer resources
11 Introduction to Information Technology Turban, Rainer and Potter Chapter 2 Organizations and Information Technology Support Information Systems Architecture (continued …) Enterprisewide Architectures î access to data, applications, services, and real-time flows of data in different LANs or databases î use client/server architecture to create a cohesive, flexible, and powerful computing environment î provide total integration of departmental and corporate IS resources î increase the availability of information and thereby maximize the value of an organization
12 Introduction to Information Technology Turban, Rainer and Potter Chapter 2 Organizations and Information Technology Support Information Systems Architecture (continued …) Internet-based Architectures î based on the concepts of client/server architecture and enterprisewide computing î the Internet is the basis for a network connection from the outside world to the company, as well as with the organization’s web site î organization’s internal private Internet (intranet) useful for distributing information throughout the organization
Market Distributors Non-Company Retailers Non-Company Manufacturers Suppliers (Purchasing) Liquidators contractors Corporate Extranet Corporate Intranet Head Quarter Toys Inc Manufacturing Retail Stores Other Extranets Employees EDI, VAN Internet Customers Travel agency Sales peoples and other mobile employees Professional Associations, large suppliers, competitors Toy Industry Extranet Small retailers Public Banks and other business partners Government Small customers Small vendors The network organization: How a company uses the Internet, intranet and extranet
14 Introduction to Information Technology Turban, Rainer and Potter Chapter 2 Organizations and Information Technology Support Organizations : Structure and IT Support Organizations î the nature of organizations determines their activities, the information support they need, and the type of information systems they use î profit-making business versus not-for-profit organizations exist î manufacture goods versus services are delivered î can be located in one place or in several places, some are global or multinational organizations
Introduction to Information Technology Turban, Rainer and Potter Chapter 2 Organizations and Information Technology Support 15 Organizations : Structure Organizational Structure î departmental functional structure » specialize in the delivery of a certain function » typical departments in an organization: » » » Accounting Finance Marketing and Sales Production or Operations Management (POM) Human Resources Management (HRM) Information Systems and Technology
Introduction to Information Technology Turban, Rainer and Potter Chapter 2 Organizations and Information Technology Support 16 Organizations : Structure Hierarchical Structure Headquarters Division A Plant C Plant D Division B Overseas Division Plant E Plant F Administration Services (legal, etc. ) POM Accounting Marketing Finance HRM
Introduction to Information Technology Turban, Rainer and Potter Chapter 2 Organizations and Information Technology Support 17 Organizations : IT Support The Corresponding Information Systems î î î Departmental Information Systems Plant Information Systems Divisional Information Systems Enterprisewide Information Systems Interorganizational Information Systems (IOS) Global Information System for an International or Multinational Corporation
18 Introduction to Information Technology Turban, Rainer and Potter Chapter 2 Organizations and Information Technology Support Types of Information Systems Transaction Processing Systems î organizations perform routine, repetitive tasks î a TPS supports the monitoring, collection, storage, processing, and dissemination of the organization’s basic business transactions î frequently, several transaction processing systems exist in one company î today’s transaction processing systems are much more sophisticated and complex
19 Introduction to Information Technology Turban, Rainer and Potter Chapter 2 Organizations and Information Technology Support Types of Information Systems (continued …) Management Information Systems (MIS) î provides periodic reports î generates weekly and monthly summaries by product, customer, or salesperson î initially, MIS had an historical orientation î today, MIS reports may include summary reports, for the current period or for any number of previous periods - used for monitoring, planning, and control î functional management information systems (MIS) » access, organize, summarize, and display information for supporting routine decision making in the functional areas » geared toward middle managers
Introduction to Information Technology Turban, Rainer and Potter Chapter 2 Organizations and Information Technology Support 20 Types of Information Systems (continued …) Major Outputs of a Functional Management Information System OUTPUT Statistical summaries Exception reports Periodic reports Ad hoc reports Comparative analysis Projections DESCRIPTION Summaries of raw data such as daily production, and weekly and monthly usage of electricity. Highlights of data items that are larger or smaller than designated levels. Statistical summaries and exception reports provided at scheduled, regular periods. Special, unscheduled reports provided on demand. Performance comparison to that of competitors, past performance, or industry standards. Advance estimates of trends in future sales, cash flows, market share, etc.
Introduction to Information Technology Turban, Rainer and Potter Chapter 2 Organizations and Information Technology Support 21 Types of Information Systems (continued …) Support Systems î office automation systems (OAS) » word processing systems î î î computer-aided design and manufacturing (CAD/CAM) decision support systems (DSS) end-user computing executive information systems (EIS) group support systems (GSS) Intelligent Systems î expert systems (ES) î artificial neural network (ANN)
22 Introduction to Information Technology Turban, Rainer and Potter Chapter 2 Organizations and Information Technology Support Types of Information Systems (continued …) Integrating Systems î various computerized systems are being integrated to increase their functionalities î one popular form of integrated system is enterprise resources planning (ERP) î ERP plans and manages all of an organization’s resources and their use, including contacts with business partners
Introduction to Information Technology Turban, Rainer and Potter Chapter 2 Organizations and Information Technology Support 23 The Evolution Computer Based Information Systems 1940 Scientific, military applications 1950 Routine business applications, TPS 1960 MIS, office automation 1970 DSS, LANs 1980 Client/server executive information system, PC’s, AI, Groupware 1990 Integration, intelligent systems the Web, intranets, extranets, ERP software 2000 Internet, Electronic commerce, Smart systems
24 Introduction to Information Technology Turban, Rainer and Potter Chapter 2 Organizations and Information Technology Support IT Support at Different Organizational Levels Strategic Systems Staff Support Top Managers Knowledge Workers, Professionals Managerial Systems Middle Managers Operation Systems Office Automation and Communication Systems Line Managers, Operators Clerical Staff Information Infrastructure and TPS The information systems support of people in organizations
25 Introduction to Information Technology Turban, Rainer and Potter Chapter 2 Organizations and Information Technology Support Knowledge Workers People who create information and knowledge and integrate it into the business Engineers, financial and marketing analysts, production planners, lawyers, and accountants Responsible for finding or developing new knowledge for the organization and integrating it with existing knowledge Act as advisors and consultants to the members of the organization Act as change agents by introducing new procedures, technologies, or processes 60 to 80 percent of all workers are knowledge workers Supported by a large variety of information systems from Internet search engines to expert systems, to computer-aided design, and by knowledge bases
26 Introduction to Information Technology Turban, Rainer and Potter Chapter 2 Organizations and Information Technology Support Clerical Staff Support managers at all levels Data workers - use, manipulate, or disseminate information î bookkeepers, secretaries who work with word processors, electronic file clerks, and insurance claim processors Supported by office automation and groupware, including document management, workflow, email, and other personal productivity software
Introduction to Information Technology Turban, Rainer and Potter Chapter 2 Organizations and Information Technology Support 27 IT Support at Different Organizational Levels : A Summary System Office automation Communication Group support system Decision support system Executive information TPS MIS Intelligent systems Employees Supported Office workers All employees People working in groups Decision makers, managers Executives, top managers Line managers and employees Middle management Knowledge workers Detailed Discussion in Chapter 7, 9 Chapter 6, 8 Chapter 10 Chapter 9 Chapter 11
28 Introduction to Information Technology Turban, Rainer and Potter Chapter 2 Organizations and Information Technology Support Managing IT Resources IT resources are scattered throughout the organization Information systems have enormous strategic value Some IT resources change frequently. It may be rather difficult to manage IT resources It is essential to manage information systems properly The responsibility for the management of information resources is divided between a usually centralized information systems department (ISD) and the end users Which resources are managed by whom? î Generally speaking, ISD is responsible for corporate-level and shared resources, and the end users are responsible for departmental resources
29 Introduction to Information Technology Turban, Rainer and Potter Chapter 2 Organizations and Information Technology Support Managing IT Resources (continued …) What is the role of the information systems department? î Traditional major IS functions: » Managing systems development and systems project management » Managing computer operations, including the computer center » Staffing, training, and developing IS skills » Providing technical services
Introduction to Information Technology Turban, Rainer and Potter Chapter 2 Organizations and Information Technology Support 30 Managing IT Resources (continued …) What is the role of the information systems department? (continued) î New (additional) major IS functions: » » » » » Initiating and designing specific strategic information systems Infrastructure planning, development, and control Incorporating the Internet and electronic commerce into the business Managing system integration including the Internet, intranets, and extranets Educating the non-IS managers about IT Educating the IS staff about the business Supporting end-user computing Partnering with the executive level that runs the business Actively participating in business processes reengineering Proactively using business and technical knowledge to the line with innovative ideas about IT » Creating business alliances with vendors and IS departments in other organizations
31 Introduction to Information Technology Turban, Rainer and Potter Chapter 2 Organizations and Information Technology Support Managing Information Technology Key MIS issues in two recent time periods Key Issues, 1994/1995 Key Issues, 1997 1. Building a responsive IT 1. Improving productivity infrastructure 2. Facilitating and managing 2. Reducing costs business process redesign 3. Developing and managing 3. Improving decision distributed systems making 4. Developing and implementing 4. Enhancing customer an information architecture relationships 5. Planning and managing 5. Developing new communication networks strategic applications
Introduction to Information Technology Turban, Rainer and Potter Chapter 2 Organizations and Information Technology Support 32 Managing Information Technology (continued …) Who Runs the ISD and to whom does ISD Report? î run by MIS Director, Manager of Computing Services, Manager of Information Technology, or Chief Information Officer (CIO) î reports to » » Chief Executive officer Functional Vice President Senior vice president Chief knowledge officer (CKO) - the director assigned to capture and make effective use of IT knowledge for an organization î The executive committee provides the top-level oversight for the organization’s information resources. It guides the IS steering committee, which is usually chaired by the CIO.
33 Introduction to Information Technology Turban, Rainer and Potter Chapter 2 Organizations and Information Technology Support Managing Information Technology (continued …) What are the relationships between the ISD and end users? î A steering committee that represents all end users and the ISD. This committee sets IT policies, decides on priorities, and coordinates IS projects. î Joint ISD/end-user project teams for planning, budgeting, applications development, and maintenance î ISD representation on the top corporate executive committee î Service agreements that define computing responsibilities and provide a framework for services rendered by the ISD to end users î Technical and administrative support (including training) for end users î A conflict resolution unit established by the ISD to handle end-user complaints quickly and resolve conflicts as soon as possible î An information center that acts as help center to end users regarding purchase, operations, and maintenance of hardware and software
Introduction to Information Technology Turban, Rainer and Potter Chapter 2 Organizations and Information Technology Support 34 What’s in IT for Me? For Accounting î Many of the transactions handled in a TPS are data that the accounting department records and tracks For Finance î Financial departments often use specialized DSS forecasting and portfolio management For Marketing î Marketing uses such IT-related concepts as customer databases, marketing decision making, sales automation, and customer relationship management (CRM)
Introduction to Information Technology Turban, Rainer and Potter Chapter 2 Organizations and Information Technology Support 35 What’s in IT for Me? (continued …) For Production/Operations Management î Organizations are competing on price, quality, time (speed), and customer service which are enhanced and supported by IT For Human Resources Management î Intranets help to disseminate relevant information throughout the organization. Internets are used for recruiting For MIS î IS management function continues to grow in strategic value For Non-Business î In all organizations, IT provides essential support to all functional areas`
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