Why Managers Must Understand IT

1
Why Managers Must Understand IT

• Managers play a key role
• Frame opportunities and threats so others can
  understand them
• Evaluate and prioritize problems and solutions
• Lead the effort to pursue IT policies that best
  meet organizational needs
• Gains in productivity
• Require innovations to business practices
• Automating these improved processes to take
  advantage of IT capabilities

2
What is Information Technology?

• Information technology (IT)
• Includes all tools that capture, store, process,
  exchange, and use information
• Field of IT includes
• Computer hardware
• Software
• Networks and related equipment
• Databases

3
What is Information Technology? (continued)

• IT infrastructure
• Organizations defined set of IT hardware,
  software, and networks
• IT support organization
• Staff to plan, implement, operate, and support IT
• Information systems
• Enable a firm to meet fundamental objectives
• Types function IT, network IT, and enterprise IT

4
(No Transcript)
5
Function IT

• Includes information systems that improve the
  productivity of individual users in performing
  stand-alone tasks
• Examples
• Computer-aided design (CAD) software
• Word processors
• Spreadsheet software
• Decision support systems
• e-learning systems

6
Function IT (continued)

• Decision support system (DSS)
• Employs models and analytic tools
• Helps users
• Gain insights into data
• Draw conclusions from the data
• Make recommendations
• E-learning systems
• Encompass a number of computer-enhanced learning
  techniques

7
Network IT

• Information systems that improve communications
  and support collaboration among members of a
  workgroup
• Examples
• Web conferencing
• Wikis
• Electronic corporate directories

8
Network IT (continued)

• Web conferencing
• Conduct meetings or presentations in which
  participants are connected via the Internet
• Wiki
• Web site that allows users to edit and change its
  content easily and rapidly
• Electronic corporate directories
• Used in large organizations to find the right
  person with whom to collaborate on an issue or
  opportunity

9
Enterprise IT

• Information systems used to define interactions
  among employees and/or with external customers,
  suppliers, and other business partners
• Examples
• Transaction processing
• Enterprise resource planning
• Interorganizational systems

10
Enterprise IT (continued)

• Transaction processing system (TPS)
• Captures data for company transactions
• Updates the firms records, which are maintained
  in electronic files or databases
• Enterprise resource planning system (ERP)
• Group of computer programs with a common database
  
• Used by firms to plan, manage, and control their
  routine business operations

11
(No Transcript)
12
(No Transcript)
13
Enterprise IT (continued)

• Interorganizational information systems
• Support the flow of data among organizations to
  achieve shared goals

14
Enterprise IT (continued)

• Electronic data interchange (EDI)
• Supports the direct transfer of information in
  the form of predefined electronic documents
• Standards
• United Nations/EDI for Administration, Commerce,
  and Transport (UN/EDIFACT)
• ANSI ASC X12

15
(No Transcript)
16
The Role of Managers Vis-À-Vis IT

• Managers have a crucial role in leading the
  successful introduction and adoption of IT
• Critical responsibilities
• Identifying appropriate opportunities to apply IT
• Smoothing the way for its successful introduction
  and adoption
• Mitigating its associated risks

17
Identifying Appropriate IT Opportunities

• Management must ensure a good return on the
  investment
• IT-related expenses in many organizations can
  account for 50 percent or more of capital
  spending
• Great variation exists in IT-related spending

18
(No Transcript)
19
(No Transcript)
20
Smooth Introduction and Adoption of IT

• Managers must overcome resistance
• So that the new IT system is accepted and used
  throughout the organization

21
Smooth Introduction and Adoption of IT
(continued)

• Three major theories on organizational change
  management
• Change Management Continuum Model
• Unified Theory of Acceptance and Use of
  Technology
• Three Worlds of IT

22
Smooth Introduction and Adoption of IT
(continued)

• Change Management Continuum Model
• Seven stages of commitment grouped into three
  major phases
• Inform
• Educate
• Commit

23
(No Transcript)
24
(No Transcript)
25
Smooth Introduction and Adoption of IT
(continued)

• Unified Theory of Acceptance and Use of
  Technology
• Identifies four key factors that directly
  determine a users acceptance and usage of IT

26
Smooth Introduction and Adoption
of IT (continued)

• Three Worlds of IT
• Three types of IT require different types of
  organizational change
• Four organizational complements allow
  improvements with IT
• Better-skilled workers
• Higher levels of teamwork
• Redesigned processes
• New decision rights

27
(No Transcript)
28
Smooth Introduction and Adoption of
IT (continued)

• Successful enterprise IT system requires
• Top-down imposition of standards and procedures

29
A Manager Takes Charge

• Toys R Us EDI System Rescued
• Tim Meester director of vendor partnerships
• Errors in EDI data made it difficult for the
  vendors to get paid
• Biggest challenge
• Change the Toys R Us culture
• Make employees realize that less than 100 percent
  accuracy was unacceptable

30
A Manager Takes Charge (continued)

• Team had to
• Develop corrective actions
• Address recurring problems both at Toys R Us
  and the vendor sites
• Provide consistent advice to each vendor
• Toys R Us implemented an extranet to link
  itself with all 1300 of its vendors

31
Ensuring that IT Risks Are Mitigated

• Special measures are needed to ensure that the
  information and its control mechanisms stand up
  to intense scrutiny
• Laws mandate stringent control requirements and
  accurate record keeping for publicly held
  corporations
• Managers are responsible for ensuring that
  physical IT assets are protected against loss or
  damage

32
(No Transcript)
33
What if Managers Do Not Participate in IT?

• Failed IT projects can lead to lowered returns on
  investment and missed opportunities
• Managers at 80 percent of surveyed firms believe
  that their operational and financial data is not
  as effective as it should be for developing
  strategies and planning

34
(No Transcript)
35
Summary

• Managers have three critical responsibilities
  when it comes to IT
• Identifying appropriate opportunities to apply IT
• Smoothing the way for its successful introduction
  and adoption
• Mitigating its associated risks
• Most effective users of IT obtain maximum value
  from IT investments that
• Align with the organizations strategic needs
• Are well managed and executed

36
Summary (continued)

• Successfully implementing the three types of IT
  (function, network, and enterprise) requires
  different types of organizational change
• Four organizational compliments allow IT to
  improve performance
• Better-skilled workers
• Higher levels of teamwork
• Redesigned processes
• New decision rights