BUSINESS CHALLENGE OF INFORMATION SYSTEM

CONTENT

5.1. Managers and Information Technology

5.2. Organizations and Information Technology
5.3. Information Resource Management (IRM)
AIMS AND OBJECTIVES

At the end of the chapter students will be able to:-

 identify the role Managers and Information Technology

 define Organizations and Information Technology
 understand Information Resource Management (IRM)

1.1. Mangers and Information Technology

When computers were first introduced in to business, predictions were that there would
significant changes in management and organizations. The information processing power and
programmed decision-making capability of computer-based information systems were
supposedly going to cause drastic reductions in employees, including middle management and
supervisory personnel. Centralized computer systems would process all of the data for an
organization, control of its operations, and make most of its decisions.

This did not prove to be the case. Changes in organizational structure and types of personnel did
occur, but they were not as drastic as predicted .naturally, highly automated systems do not
require, as many people as manual methods .Therefore, there have been significant reductions in
the number of people required to perform manual tasks in many organization. For example,
computerized accounting systems have drastically reduced the need for clerical accounting
personnel, and factory automation has greatly reduced the demand for many types of factory
workers. However, these reductions were countered by drastic increases in sales and service
personnel knowledge workers, and managers as business increased the depth and scope of their
operations. It was also countered to some extent by the need for more technicians and
professionals to develop e and run the computer based information systems of the organizations.
Research shows that competitive pressure are forcing major firms to become global in scope, to
decrease time to market, and to manage business risk, customer services, and operating costs like
never before.MIS researchers rock art and short see information technology as enabling
technology for managing the interdependence that business units must have successfully
confront the competitive measures they face. For example, they see telecommunications
networks and more cost effective hard ware and software as enabling individual, business unit,
and organizations to be “wired together” in close business relationships that can provide the
communication and coordination needed in today’s competitive global marketplace.

Thus, information technology, that is the technology of modern computer base information
systems, is once again being portrayed as a major force for organizational and managerial
change. Thanks to telecommunications networks and personal computers, computing powers and
information resources are now more readily available to more managers than ever before .in
face ,these and other information technologies are already affecting managerial decision
making ,organizational structures, and work activities in companies around the world.

For example, the decision support capability provided by information systems technology is
changing the focus of managerial decision-making. managers freed from “number crunching”
chores must now face tougher strategic policy question in order to develop realistic alternatives
for today’s dynamic competitive environment .the use of telecommunications
networks ,electronic mail, and electronic meeting system to coordinate work activity is another
example of the impact of information technology on management .middle managers no longer
need to serve as conduits for the transmission of operations feedback or control directives
between operational managers and top management. Thus, drastic reductions in the layers and
numbers of middle management and the drastic growth of work groups consisting of task-
focused teams of specialist’s are forecast.

Finally, information technology presents managers with a major managerial challenge. Managing
the information system resources of a business is no longer the sole province of information
systems specialists. Instead, information resources management has become a major
responsibility of all managers. That is, data and information, computer hardware,
telecommunications networks, and IS personnel should be viewed as valuable resources that
must be managed by all levels of management to ensure the effective use of information
technology for the operational and strategic benefit of the entire organization.

5.2. Organization and Information Technology

One way to understand the organizational impact of information technology is to view an

organization as a social technical system. In this context people, tasks, technology, culture, and
structure are the basic component of an organization. This conceptual emphasizes that to
improve an organizations performance, managers must (1) change one or more of these
components and (2) take in to account the relations ships among these interdependent
components. This is especially important for the proper use of information technology. In the
past, information systems technology has been used to automate organizational tasks, without
sufficient consideration given to its strategy impact on the organization. Thus, a major
managerial challenge of information technology is to develop information systems that promote
strategic improvements in how an organization supports its people, tasks, technology, culture,
and structure.

People

Structure Task

Culture Technology

People: managers are individuals with a variety of presences for information and diverse
capabilities for effectively using information provided to them. Information system must produce
information products tailored to meet manager’s individual needs, as information reporting
decision support, and executive information systems can do.
Tasks: the tasks of many organizations have become quite complex and inefficient over time in
many cases; information technology has been used “to do the same old thing, only faster.”
However, it can play a major role in fighting organizational complexity by supporting the
Reengineering of business process, also called business process redesign (BPR).

Technology: the technology of computer based information systems continues to grow more
sophisticated and complex .however, this technology should not dictate the information needs of
end users in the performance of their organizational tasks. It should accommodate the
management culture and structure of each organization.

Culture: organization and their sub units have a culture, which is shared by managers and other
employees. That is, they have a unique set of organizational values and styles. For example,
managers at some organizations share an informal, collegial, entrepreneurial sprite that stresses
initiative, collaboration, and risk taking. Managers at other organizations may stress a more
formal “do it by the book”, go through the chain of command”, or “don’t risk the stoke holders
money” approach. Naturally, the designs of information systems and information products must
accommodate such differences. For example, managers in a corporate culture that encourages
entrepreneurial risk taking and collaboration will probably favor information reporting systems
that give them quick access to forecasts about competitors and customers, and e- mail and group
ware systems that make it easy to communicate with callings any wear.

Structure: organizations structure there management, employees and job tasks into a variety of
organizational subunits. Ducker’s, keen, rock art, and others emphasizes that information
technology must support a process of organizational re design. So the information system
function must not longer assume a hierarchical, centralized, organizational structure which it
supports by centralizing processing power, data bases, and systems development at the corporate
head quarters level. This type of structure emphasizes gathering data in to centralized databases
and producing report to meet the information needs of functional executives.

Instead, IT must be able to support a more decentralized collaborative type of organizational

structure, which needs more inter connected telecommunications networks, processing power,
data bases, and systems development resources distributed to business unit and work group
levels. For example, information technology must emphasize quick and easy communication and
collaboration among individuals and work groups using electronics instead of paper. Specific
examples include e- mail, voice mail, groupware, electronic meeting systems and soon.

Experience has shown that modern computer based information systems can support either the
centralization or decentralization of information systems, operations, and decision making with
in computer using organizations. For example centralized computer facilities connected to all
parts of an organization by telecommunications net works allow top management to centralized
decision-making formerly done by lower levels of management it can also promote centralization
of operations, which reduces the number of branch offices, manufacturing plants, warehouses
and other work sites need by the firm. On the other hand, distributed networks of computers at
multiple work sites can allow top management to delegate more decision making to middle
managers. Management can also decentralized operations by increasing the number of branch
offices (or other company units) while still having access to the information and communications
capabilities they need to control the overall direction of the organization.

Therefore, computer based information system can encourage either the centralized or
decentralized of information system, business operation, and management. The philosophy of top
management, the culture of the organization, the need to reengineer its operations, and its use of
aggressive or conservative competitive strategies all plays major roles with information
technology in shaping the firms organizational structure and information systems architecture.

5.3 Information Resource Management

There three major development that are affecting how corporate management views the
information systems function:

 Information systems technology and its applications for users needs are growing and
changing rapidly. Hardware and software resources can now better support wide variety
of traditional and new business uses. Therefore, end users, managers, and corporate
executives have higher expectations for the support they receive from information system
technology.
  In adequate performance and unsatisfactory use of information systems and resources, is
a major problem in many organizations .top management is UN willing to accept these
affaire and is demanding new approaches to managing information services
 Information systems can now give a firm a major strategic advantage over its
competitors’ in the market place. Top management wants to find new and creative way to
use information resources in pursuing the strategic objectives of the firm.

Information resource management is response to those pressures. Information resource

management (IRM) has become a popular way to emphasize a major change in management and
mission of the information systems function in many organizations.IRM can be vied as having
five major dimensions.

1. Strategic management: information technology must be managed to contribute to a

firms strategic objectives and competitive advantage ,not for operational efficiency or
decision support
2. Resource management: data and information, hard ware and soft ware,
telecommunications net work and IS personnel are vital organizational resources that
must be managed like other business assets.
3. Functional management: information technology and information systems can be
managed by functional organizational structures and managerial techniques commonly
used throughout other business units.
4. Technology management: all technologies that process, store, and communicate data
and information throughout the enterprise should be managed as integrated systems of
organizational resources.
5. Distributed management: managing the use of information technology and information
systems resources in business units or work groups is a key responsibility of their
managers no matter what their function or level in the organization.

Information systems planning

Information systems planning are an important component of organizational planning.
This course has emphasized how information technology can play a vital role in the
efficiency of companies operations, the effectiveness of managerial decision-making, and
the success of organization strategic initiatives therefore management of IT requires a
planning process that is part of the strategic, tactical, and operational planning of the
organization.

Strategic IS plan formulates policies, objectives, and strategies for delivering information
services and allocating information systems resources. It involves a study of how the
information systems functions can contribute to the achievement of the goals contained in
strategic plan for the entire organization. This process is sometimes called enterprises
analysis. The emphasis is on planning computer based information systems that will
improve the firm’s performance and competitive position. Enterprise analysis frequently
includes stage analysis this is an analysis of the information system needs of an
organization based on its current stage in the growth cycle that is typical of most
organizations. Obviously, a firms Is needs may differ depending on weather it is a new
start up company, enjoying rapid growth, or has reached maturity in its industry.

A strategic IS plan frequently contains an analysis of firms application portfolio .it helps
a firm plan an IS investment strategy ,since it spotlights the type of information system
applications being developed the business functions being supported, the resource being
allocated(as a percentage of revenue assets)to the information systems function. Strategic
information system planning also requires environmental analysis, in which the external
business and technical environment and the internal organizational environment are
analyzed .assessment is made of information technology problems and opportunities and
of the capabilities of the organizations hardware, software, and people resource.

Tactical IS planning starts with a specific assessment of an organizations current and

projected information requirements .these requirements are then sub divided in to
individuals project proposals for the development of new or improved information
systems. These projects are then evaluated, ranked, fitted in ton multiyear development
plan. Finally, a resource allocation plan is developed to specify the hardware, software,
and personnel resources, telecommunication facilities, and financial commitments needed
to implement the master development plan.
Project planning is an important operational planning function. It involves the
development of plans, procedures, and schedules for an information systems development
project. Such planning is an important part of a project management effort that plans and
controls the implementation of systems development projects. This is necessary if a
project is to be completed on time and within its proposed budget and if it is to meet its
design objectives.

Organizing the information services

Information service departments perform several basic functions and activities. This can
be grouped in to three basic functional categories system development, operations and
technical services.
Many companies have created a senior management position, the chief information
officer, to oversee all use of information technology in their organization. Thus, all
telecommunication services, office automation systems, and other information system
technology supports services are responsibility of chief information officer. Also the
chief information officer does not direct day-to-day information service activities but
concentrates on long term planning and strategy.

Other administrative positions in information services might include a manager of

information services, and individual managers for systems development, operations, and
technical services.
Systems development management: is responsible for managing the investigation,
analysis, design, implementation, and maintenance of information systems in
organizations. This means managing activities such as systems analysis and design,
prototyping, applications programming, project management, quality assurance, and
systems maintenances for all major systems development projects.

Operations management: is concerned with the use of hardware, software and personnel
resources in the corporate or business unit data center of an organization .Operational
activities that must be managed include data entry ,equipment operation, production
support.

Technical services: consists of variety of major functions that are vital to the provision
of information services and the management of information system resource

Management of
information service

System Operations Technical

development service

System User service

analysis and Computer Information
design operations center
data center

Data entry

Data
Applications administration
programming

Production
control and
support Other support

 Telecommunications
management
 Technology
management
 Development
support
Development
center

Summary

When computers were first introduced in to business, predictions were that there would
significant changes in management and organizations. The information processing power and
programmed decision-making capability of computer-based information systems were
supposedly going to cause drastic reductions in employees, including middle management and
supervisory personnel. Centralized computer systems would process all of the data for an
organization, control of its operations, and make most of its decisions.

One way to understand the organizational impact of information technology is to view an

organization as a social technical system. In this context people, tasks, technology, culture, and
structure are the basic component of an organization. This conceptual emphasizes that to
improve an organizations performance, managers must (1) change one or more of these
components and (2) take in to account the relations ships among these interdependent
components.

Information systems technology and its applications for users needs are growing and changing
rapidly. Hardware and software resources can now better support wide variety of traditional and
new business uses. Therefore, end users, managers, and corporate executives have higher
expectations for the support they receive from information system technology.

In adequate performance and unsatisfactory use of information systems and resources, is a major
problem in many organizations .top management is UN willing to accept these affaire and is
demanding new approaches to managing information services

Information systems can now give a firm a major strategic advantage over its competitors’ in the
market place. Top management wants to find new and creative way to use information resources
in pursuing the strategic objectives of the firm.