The Management Framework

1
The Management Framework
CompanySeniorManagement
CIOMIS DirectorD.P. Manager
Users(Managersand Staff)
Environment
ITStaff
2
CHALLENGE OF INFO SYSTEMS

• STRATEGIC COMPETITIVE EFFECTIVE
• GLOBALIZATION MULTINATIONAL INFO
• INFO ARCHITECTURE SUPPORT GOALS
• INVESTMENT VALUE OF INFORMATION
• RESPONSIBILITY CONTROL ETHICS

1.28
3
Five Forces To Determine Industry Profitability
New Entrants
Threat ofNew Entrants
Industry Competitors
Bargaining Powerof Suppliers
Bargaining Powerof Buyers
Suppliers
Buyers
Rivalry AmongExisting Firms
Threat of SubstituteProducts or Services
Substitutes
Source Porter, M., Competitive Advantage, NY
The Free Press, 1985
4
The Value Chain
Firm Infrastructure
M A R G
I N
Human Resources Management
Technology Development
Procurement
N I
G R A M
InboundLogistics
Operations
OutboundLogistics
Marketing Sales
Service
Source Porter, M., Competitive Advantage, NY
The Free Press, 1985
5
STRATEGIC QUESTIONS

• Can IT build barriers to entry?
• Can IT build in switching costs?
• Can IT strengthen customer relationships?
• Can IT change the balance of power in supplier
  relationships?
• Can IT change intra-industry competitive
  balance?
• Can IT change the basis of competition?
• Can IT generate new products?

Source Cash, J. I., McFarlan, F. W., McKenney,
J. L., and Applegate, L. M., Corporate
Information Systems Management Text and Cases,
Homewood, IL, 1992.
6
BUSINESS-LEVEL STRATEGY

• PRODUCT DIFFERENTIATION
• FOCUSED DIFFERENTIATION
• DATAMINING
• SUPPLY CHAIN MANAGEMENT
• EFFICIENT CUSTOMER RESPONSE
• ENHANCING CORE COMPETENCIES

2.24
7
A Framework for Analyzing IT Impact on
Organizations

• CONTEXT
• External
• Environment
• Industry Structure
• Rate of Change
• Competitive IntensityOrganization
• History
• Current State
• Industry Position
• Competitive BenchmarksResources
• People/ Leadership
• Technology
• Capital
• CultureStimulus forChange
• Type
• Urgency
• Clarity
• Shared Understanding

ORGANIZATION EFFECTIVENESS MEASURES
EXECUTION
Organization Structure

• Results
• Market Share
• Financial ROE P/E

• Process
• Time
• Quality
• Cost
• Innovation

• Stakeholder
• Customer/ Supplier
• Employee Satisfaction
• Shareholder Satisfaction

Strategy
People
Technology
Work
Management Control Processes
Culture
Competitive Benchmarks
Source Applegate, L.M., IT-Enabled Business
Transformation, Boston HBS Publishing, 1992
8
FUNCTIONS OF AN INFORMATION SYSTEM
1.12
9
THE INFORMATION RESOURCE
INTERNAL EXTERNAL DATA
COLLECTION STORAGE
COMMUNICATION LINKS
DATA
TRANSFORMATION PROCESS

• INFORMATION
• Plan
• Control
• Operate

10
MAJOR TYPES OF SYSTEMS

• EXECUTIVE SUPPORT SYSTEMS (ESS)
• MANAGEMENT INFORMATION SYSTEMS (MIS)
• DECISION SUPPORT SYSTEMS (DSS)
• KNOWLEDGE WORK SYSTEMS (KWS)
• OFFICE AUTOMATION SYSTEMS (OAS)
• TRANSACTION PROCESSING SYSTEMS (TPS)

2.6
11
INTERRELATIONSHIPS AMONG SYSTEMS
ESS
DSS
MIS
KWSOAS
TPS
SCADA
2.22
12
TYPES OF INFORMATION SYSTEMS
2.5
13
TPS DATA FOR MIS APPLICATIONS
14
Phases of IT Assimilation
PHASE 1Decision to investandproject initiation
Failure
Success
PHASE 2Technology learning andadaptation
StagnationBlock A
Narrowlyfocused andnot marketed
Success
PHASE 3Rationalizationand management control
StagnationBlock B
Too efficiencydominated
Success
PHASE 4Widespreadtechnologytransfer
StagnationBlock C
Source Cash, J. I., McFarlan, F. W., McKenney,
J. L., and Applegate, L. M., Corporate
Information Systems Management Text and Cases,
Homewood, IL, 1992.
15
Sample IT Architecture
Applications
TOOLS
InformationPackaging andDelivery (e.g.,
Commander EIS)
InformationAnalysis (e.g., Lotus 123G)
Knowledge-BasedSystems (e.g., Expert System)
ApplicationDevelopment (e.g., CASE)
Communications (e.g., E-Mail, Conferencing)
Communications Wide area networkLocal area
network
FOUNDATION
Information ManagementClient server
architectureDB2 relational databaseData feeds
from internal and external sources
Manu-facturing
IndustryNews/IRI
Dow Jones
Accounting
Sales
Purchasing
Logistics
External Systems
Internal Business Operations and Transaction
Systems
Source Applegate, L., Frito-Lay, Inc. A
Strategic Transition (C), Harvard Business School
Case 9-190-071, 1990
16
LEARNING OBJECTIVES

• DESCRIBE CHARACTERISTICS OF ORGANIZATIONS
• RELATE INFO SYSTEMS TO ORGANIZATIONS
• COMPARE MODELS DESCRIBING SYSTEM ORIGINS

3.2
17
LEARNING OBJECTIVES

• COMPARE THEORIES OF ORGANIZATIONS
• ANALYZE IMPACT OF INFO SYSTEM ON ORGANIZATION
• DESCRIBE IMPLICATIONS OF SYSTEM DESIGN
  IMPLEMENTATION

3.3
18
MANAGEMENT CHALLENGES

• DIFFICULTIES OF MANAGING CHANGE
• ADJUSTING TECHNOLOGY AND ORGANIZATION FOR OPTIMAL
  FIT

3.4
19
TRANSFORMATION

• KNOWLEDGE-BASED ECONOMIES
• PRODUCTIVITY
• NEW PRODUCTS SERVICES
• KNOWLEDGE AS AN ASSET
• TIME-BASED COMPETITION
• SHORTER PRODUCT LIFE
• TURBULENT ENVIRONMENT
• LIMITED EMPLOYEE KNOWLEDGE BASE

1.7
20
TRANSFORMATION OF ENTERPRISE

• FLATTENING
• DECENTRALIZATION
• FLEXIBILITY
• LOCATION INDEPENDENCE
• LOW TRANSACTION COSTS
• EMPOWERMENT
• COLLABORATIVE WORK

1.8
21
ORGANIZATIONS INFORMATION TECHNOLOGY
MEDIATING FACTORS Environment
Culture Structure
Standard Procedures Politics
Management Decisions
Chance
3.5
22
IMPLEMENTING CHANGE
3.25
23
LEARNING OBJECTIVES

• EVALUATE SCHOOLS OF MANAGEMENT THINKING
• DESCRIBE LEVELS, TYPES, STAGES OF DECISION MAKING
• COMPARE INDIVIDUAL ORGANIZATIONAL DECISION
  MAKING

4.2
24
LEARNING OBJECTIVES

• ASSESS CHANGING MANAGEMENT PROCESS
• EXPLAIN HOW INFO SYSTEMS AID MANAGERS DECISION
  MAKING

4.3
25
MANAGEMENT CHALLENGES

• WHAT MANAGERS DO
• INTRODUCTION TO DECISION MAKING
• INDIVIDUAL MODELS OF DECISION MAKING
• HOW INFORMATION TECHNOLOGY HAS CHANGED MANAGEMENT
  PROCESS

4.4
26
ROLE OF MANAGERS

• INTERPERSONAL Figureheads, leaders, liaison
• INFORMATIONAL Receive disseminate critical
  information
• DECISIONAL Initiate activities, handle
  disturbances, allocate resources, negotiate
  conflicts

3.28
27
LEVELS OF DECISION MAKING

• STRATEGIC Long-term objectives resources
  policies
• MANAGEMENT CONTROL Monitor use of resources
  performance
• KNOWLEDGE-LEVEL Evaluate potential innovations
  knowledge
• OPERATIONAL How to carry out specific day-to-day
  tasks

4.19
28
TYPES OF DECISIONS

• STRUCTURED Repetitive routine definite
  procedure certainty
• SEMISTRUCTURED One or more factors not
  structured risk
• UNSTRUCTURED Unique non-routine uncertainty
  requires judgment

4.20
29
INFO SYSTEMS, LEVELS, DECISIONS
4.21
30
DECISION SUPPORT SYSTEMS (DSS)

• MANAGEMENT LEVEL COMPUTER SYSTEM COMBINES DATA,
  MODELS, USER - FRIENDLY SOFTWARE FOR
  SEMISTRUCTURED UNSTRUCTURED DECISION MAKING

31
DECISION SUPPORT SYSTEM
32
GROUP DECISION-SUPPORT SYSTEM (GDSS)

• INTERACTIVE COMPUTER-BASED SYSTEM FACILITATES
  SOLUTION OF UNSTRUCTURED PROBLEMS BY DECISION
  MAKERS WORKING AS GROUP

33
LEARNING OBJECTIVES

• EXPLAIN ORGANIZATIONAL KNOWLEDGE MANAGEMENT
• DESCRIBE USEFUL APPLICATIONS FOR DISTRIBUTING,
  CREATING, SHARING KNOWLEDGE
• EVALUATE ROLE OF ARTIFICIAL INTELLIGENCE IN
  KNOWLEDGE MANAGEMENT

34
LEARNING OBJECTIVES

• DEMONSTRATE HOW ORGANIZATIONS USE EXPERT SYSTEMS,
  CASE-BASED REASONING TO CAPTURE KNOWLEDGE
• DEMONSTRATE HOW NEURAL NETWORKS OTHER
  TECHNIQUES IMPROVE KNOWLEDGE BASE

35
KNOWLEDGE MANAGEMENT IN THE ORGANIZATION

• KNOWLEDGE MANAGEMENT
• SYSTEMATICALLY ACTIVELY
• MANAGING AND LEVERAGING
• STORES OF KNOWLEDGE
• IN AN ORGANIZATION

36
KNOWLEDGE MANAGEMENT IN THE ORGANIZATION

• KNOWLEDGE MANAGEMENT
• Office Automation Systems (OAS)
• Knowledge Work Systems (KWS)
• Group Collaboration Systems (GCS)
• Artificial Intelligence Applications (AI)

37
CREATE KNOWLEDGEKNOWLEDGE WORK SYSTEMS

• INFORMATION SYSTEMS THAT AID KNOWLEDGE
  WORKERS TO CREATE, INTEGRATE NEW KNOWLEDGE IN
  ORGANIZATION

38
CAPTURE CODIFY KNOWLEDGEARTIFICIAL
INTELLIGENCE (AI)SYSTEMS

• AI COMPUTER-BASED SYSTEMS WITH ABILITIES TO
  LEARN LANGUAGE, ACCOMPLISH TASKS, USE PERCEPTUAL
  APPARATUS, EMULATE HUMAN EXPERTISE DECISION
  MAKING

39
CAPTURE CODIFY KNOWLEDGEARTIFICIAL
INTELLIGENCE (AI)SYSTEMS

• EXPERT SYSTEMS
• NEURAL NETS
• FUZZY LOGIC
• GENETIC ALGORITHMS
• INTELLIGENT AGENTS

40
AI FAMILY
41
BUSINESS
INTERESTS IN AI

• PRESERVE EXPERTISE
• CREATE KNOWLEDGE BASE
• MECHANISM NOT SUBJECT TO FEELINGS, FATIGUE,
  WORRY, CRISIS
• ELIMINATE ROUTINE / UNSATISFYING JOBS
• ENHANCE KNOWLEDGE BASE

42
THE CHANGING MANAGEMENT PROCESS

• ENTERPRISE RESOURCE PLANNING (ERP)
• ELECTRONIC COMMERCE
• ELECTRONIC BUSINESS
• ELECTRONIC MARKET

1.23
43
LEARNING OBJECTIVES

• DEMONSTRATE HOW INTERNET TECHNOLOGY USED FOR
  INTRA- AND INTERORGANIZATIONAL ELECTRONIC
  BUSINESS
• EXAMINE CHALLENGES OF INTERNET TO BUSINESS
  SOCIETY

10.3
44
VIRTUAL ORGANIZATION
1.27
45
CHALLENGES OPPORTUNITIES

• UNPROVEN BUSINESS MODELS
• BUSINESS PROCESS CHANGE REQUIREMENTS
• CHANNEL CONFLICTS
• TECHNOLOGY HURDLES
• LEGAL ISSUES
• SECURITY PRIVACY

10.33
46
GLOBALIZATION

• MANAGEMENT CONTROL
• COMPETITION IN WORLD MARKETS
• GLOBAL WORK GROUPS
• GLOBAL DELIVERY SYSTEMS

1.6
47
LEARNING OBJECTIVES

• IDENTIFY FACTORS BEHIND BUSINESS
  INTERNATIONALIZATION
• COMPARE GLOBAL STRATEGIES FOR DEVELOPING
  BUSINESS
• DEMONSTRATE HOW INFO SYSTEMS SUPPORT GLOBAL
  STRATEGIES

48
INTERNATIONAL INFORMATION SYSTEMS INFRASTRUCTURE
49
IT-Enabled BusinessTransformation Module
Scope of Change
Inter-Organization
Organization
Function
Anticipatory
Stimulus for Change
Crisis
Source Applegate, L.M., IT-Enabled Business
Transformation, Boston HBS Publishing, 1992
50
The modern age has a false sense of superiority
because of the great mass of data at its
disposal. The valid criterion of distinction is
(not the quantity of data available but) rather
the extent to which man knows how to form and
master the materials at his command.