Organizations and Their Structures

1
INFORMATION TECHNOLOGY SYSTEMSSupporting
Information Processing
Introduction

• Organizations and Their Structures
• The Nature of Information in an Organization (and
  Decentralized Computing)
• IT systems in an Organization and the Tasks They
  Perform

2
Information Technology Is Now a Part of Almost
Every Organization
Introduction

• Some IT systems simply process transactions
• Some help managers make decisions
• Some support the inter-organizational flow of
  information
• Some support team work
• Seeing more supply chain IT systems - WalMart and
  3 day inventory replacement

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THE TRADITIONAL STRUCTURE OF AN ORGANIZATION
An Organization
STRATEGIC
MANAGEMENT
TACTICAL
OPERATIONAL
NONMANAGEMENT
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THE TRADITIONAL STRUCTURE OF AN ORGANIZATION
An Organization

• 1.STRATEGIC MGMT - provides an organization with
  overall direction and guidance.
• 2.TACTICAL MGMT - develops the goals and
  strategies outlined by strategic mgmt.
• 3.OPERATIONAL MGMT - manages and directs the
  day-to-day operations.
• 4.NONMANAGEMENT - those people who actually
  perform daily activities.

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Organizations Also Have Depth...
An Organization
Within the pyramid, many organizations structure
according to (1) Function (marketing,
accounting, etc.) (2) Product line (e.g., GM by
Buick, Pontiac, etc)
6
When Considering Information, You Need to
Understand...
Information

• The concept of shared information through
  decentralized computing
• The directional flow of information
• What information specifically describes
• The information-processing tasks your
  organization undertakes

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SHARED INFORMATION AND DECENTRALIZED COMPUTING
Information

• As late as the early 1980s, most organizations
  exhibited centralized computing and isolated
  information. That is...
• Large central mainframe computers that performed
  all tasks.
• Separate files of information for each
  application or system.
• So, computing power was centralized while
  information remained isolated.

8
SHARED INFORMATION AND DECENTRALIZED COMPUTING
Information

• During the early to mid 1980s, most organizations
  exhibited decentralized computing and isolated
  information. That is...
• Smaller, more powerful computers that were
• distributed to functional business areas.
• These computers still maintained separate files
• of information for each application.
• So, computing power was decentralized while
• information remained isolated.

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SHARED INFORMATION AND DECENTRALIZED COMPUTING
Information

• Today, organizations have maintained their
  decentralized computing while bringing together
  all the organizations information.
• This bringing together of information is
  accomplished by using databases.
• Databases support the concept of shared
  information.
• So, computing power is now decentralized and
• information is shared.

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HOW INFORMATION FLOWS
Information

• Upward Flow of Information - describes the
  current state of the organization based on its
  daily transactions.
• Downward Flow of Information - consists of the
  strategies, goals, and directives that originate
  at one level and are passed to lower levels.
• Horizontal Flow of Information - between
  functional business units and work teams.

See Figure 2.5 on page 46
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WHAT INFORMATION DESCRIBES
Information

• INTERNAL INFORMATION - describes specific
  operational aspects of the organization.
• EXTERNAL INFORMATION - describes the environment
  surrounding the organization.
• OBJECTIVE INFORMATION - quantifiably describes
  something that is known.
• SUBJECTIVE INFORMATION - attempts to describe
  something that is currently unknown.

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TWO WAYS OF CREATING INFORMATION
Information

• 1.TRANSACTION PROCESSING - the processing of
  transactions that occur within an organization.
• Example computing payroll and sales tax
• 2.ANALYTICAL PROCESSING - creating information to
  support your decision-making tasks.
• Example how to allocate investment dollars

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THE SEVEN IT SYSTEMS IN AN ORGANIZATION
IT Systems
1.Transaction Processing Systems (TPS) 2.Customer
Integrated Systems (CIS) 3.Management Information
Systems (MIS) 4.Workgroup Support Systems
(WSS) 5.Decision Support Systems (DSS)
Artificial Intelligence (AI) 6.Executive
Information Systems (EIS) 7.Interorganizational
Systems (IOS)
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TRANSACTION PROCESSING SYSTEM
TPSs

• a system that processes transactions that occur
  within an organization.
• Capturing information
• Creating information
• Cradling information
• Conveying information (secondary)

• Are at the very heart of every organization.
• Provide the primary interface to customers.
• Found in all functions of an organization.
• If they fail, the whole organization suffers.

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CUSTOMER INTEGRATED SYSTEM (CIS)...
CISs

• an extension of a TPS that places technology in
  the hands of an organizations customers and
  allows them to process their own transactions.
• Capturing information
• Creating information
• Cradling information
• Communicating information
• Conveying information (secondary)

• Represent a further decentralization of computing
  power by placing that power in the hands of
  customers.
• Will forever change the relationship between
  organization and customer. ATMs, Bank on-line,
  TicketMaster, 800-Flowers

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MANAGEMENT INFORMATION SYSTEM
MISs

• a system that provides periodic and predetermined
  reports that summarize information within a
  database.
• Creating information
• Conveying information

• Alert people to the existence of problems or
  opportunities.
• Report Types
• PERIODIC - produced at a predetermined time
  interval.
• SUMMARIZED - aggregate information in some way.
• EXCEPTION - show only a subset of available
  information.
• COMPARATIVE - show two or more sets of similar
  information.

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WORKGROUP SUPPORT SYSTEM (WSS)...
WSSs

• a system that is designed specifically to improve
  the performance of teams by supporting the
  sharing and flow of information.
• Communicating information

• Supports the sharing, dissemination, and flow of
  information.
• Supports both
• Project teams - that solve a specific problem or
  take advantage of a specific opportunity and then
  disband to move on to other projects.
• Permanent teams - people from all departments
  that perform a flow of work consistently.
• Contains groupware.

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GROUPWARE
WSSs
the popular term for the software that supports
the collaborative efforts of a team. Groupware
Supports Three Functions (See Figure 2.11 page
58 1. Team Dynamics - e-mail, e-meeting, video
white board 2. Document Management 3.
Applications Development
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DECISION SUPPORT SYSTEM (DSS) ARTIFICIAL
INTELLIGENCE (AI)
DSS AI

• DSS - a highly flexible and interactive IT system
  that is designed to support decision making when
  the problem is not structured.
• AI - the science of making machines imitate human
  thinking and behavior.
• Creating information
• Conveying information (secondary)

• GEOGRAPHIC INFORMATION SYSTEM (GIS) - a DSS
  designed specifically to work with spatial
  information.
• GENETIC ALGORITHM - an AI system that mimics the
  evolutionary, survival-of-the-fittest process to
  generate increasingly better solutions to a
  problem.
• EXPERT SYSTEM - an AI system that applies
  reasoning capabilities to reach a conclusion.

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EXECUTIVE INFORMATION SYSTEM (EIS)...
EISs

• a highly interactive MIS combined with decision
  support systems and artificial intelligence for
  helping managers identify and address problems
  and opportunities.
• Creating information
• Conveying information

• Make use of a data warehouse.
• Support drill down capabilities.
• Help identify information responsibility.
• Use DSS and AI tools.
• Provide access to a variety of information.

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HAVE EISs BEEN MISNAMED?
EISs
2-33

• EISs provide managers and executives with the
  flexibility to view information from many angles
  and provide various tools for supporting data
  analysis.
• Arent there other people in an organization who
  need those same capabilities?
• Certainly - all employees need that type of
  support.
• Maybe EISs should be named employee information
  systems.

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INTERORGANIZATIONAL SYSTEM (IOS)...
IOSs

• automates the flow of information between
  organizations to support the planning, design,
  development, production, and delivery of products
  and services.
• Communicating information

• Supports ELECTRONIC DATA INTERCHANGE (EDI) - the
  direct computer-to-computer transfer of
  transaction information contained in standard
  business documents.
• Allows many organizations to create an economies
  of scale in technology.
• Provides a way for organizations to team up and
  create new products and services.

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TO SUMMARIZE
CAPTURE CONVEY CREATE CRADLE
COMMU-

NICATE TPS XX
XX XX CIS
XX XX
XX XX MIS
XX XX WSS

XX DSSAI
XX EIS
XX XX IOS

XX