Redesigning the Organization with Information Systems

1
Redesigning the Organization with Information
Systems

• Regent University

2
Redesigning the Organization with Information
Systems

• Systems as Planned Organizational Change
• Systems Development and Organizational Change
• Overview of Systems Development
• Understanding the Business Value of Information
  Systems

3
Systems as Planned Organizational Change

• Linking Information Systems to the Business Plan
• Establishing Organizational Information
  Requirements
• Enterprise Analysis
• Strategic Analysis (Critical Success Factors)

4
Linking to the Business Plan (Alignment)

• IT is now viewed as an essential part of the
  business strategy
• The Internet is clearly the primary outside force
  moving IT toward strategic significance
• Early examples Airline Industries (AA), Banking
  and financial institutions

5
Linking to the Business Plan (Alignment)

• Market Expansion
• Remote Sales Force
• Geographic Distribution
• Direct Model

• IT Support
• Mobile CRM package
• Wide Area Network
• Call center, Web-based order entry

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Establishing Organizational Requirements

• Enterprise Analysis
• Strength Comprehensive view of business
  processes, data, users, information flow
• Weakness Expensive, time-consuming, doesnt
  focus on decision-making support
• Strategic Analysis
• CSF (Critical Success Factors) see table 11.2
• Focuses on objectives, goals, critical needs of
  the individual and organization
• Strength inexpensive, fast, goal oriented
• Weakness inconclusive results, management focus
  vs. worker focus, organizational focus vs.
  individual focus

7
Systems Development as Unplanned Change

• Some organizations have utilized large ERP
  (Enterprise Resource Planning) installations as
  excuses to change major business processes ---
  usually very painful.

8
Systems Development and Organizational Change

• The Spectrum of Organizational Change
• Business Process Reengineering
• Process Improvement and TQM

9
Overview of Systems Development

• Systems Development (also Integration,
  Implementation)
• Structured approach to problem solving, solution
  identification, development and implementation
• Lifecycle Methodologies
• Linear (Sequential or Waterfall)
• Iterative (Rapid Application Development)
• For Applications or Infrastructure

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The Business Value of Information Systems

• The Value Pyramid

High
Strategic Applications
Perceived Value
Operational Applications
Infrastructure
Low
11
Perception and Reality

• Infrastructure difficult payback or value
  identification yet essential for strong,
  flexible, responsive IT solutions
• Operational Applications moderate payback or
  value identification yet essential for deploying
  strategic applications (see CIO, Closing the Gap,
  74.)
• Strategic Applications usually easy payback or
  value identification yet often ineffective due
  to inadequate infrastructure or operational
  applications

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Strategies for Securing the Value Pyramid

• Thesis Pay attention to each layer
• IT Plan and Strategy should
• Gather management consensus in support of the
  infrastructure plan
• Reassess capability and value of all operational
  applications periodically ( 3 years)
• Allocate an infrastructure overhead to each
  operational or strategic project

13
Measuring Business Value

• Financial or Capital Models
• Nature
• Advantages
• Limitations
• Non-financial or Strategic Models
• Nature
• Advantages
• Limitations

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Financial or Capital Models

• Payback
• ROI
• Net Present Value
• Cost-Benefit Ratio
• Profitability Index
• Internal Rate of Return (IRR)

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Non-financial or Strategic Models

• Portfolio Analysis
• Risk
• Benefit
• Project risk generally relates to size,
  organization experience, project task complexity,
  and stakeholder commitment.
• Scoring Models
• Table 11.9 reasonably good, but newer approaches
  address business process effectiveness, e.g.,
  speed of customer interaction, deployment of
  information at point of interaction, influence on
  decision-making, etc.