Module 1: Overview of Information

System in Organizations

Chapter 2: How
Organizations use IS
 Topics

• Organization and IS
– Organizational structure
– Organizational culture and change
• Business Process
– How IS changes business processes
– Reengineering and continuous improvement
– User satisfaction and technology acceptance
• Business Information Systems
– E-business
– Management Level
– Enterprise
– Collaboration
 Organisation and IS

• Organization: formal collection of people and other

resources established to accomplish a set of goals
– Input: Money, people, material, machines, data, information and
decisions
– Inputs are transformed into increased value
– Outputs: goods and services
– Provide value to stakeholders: customers, supplier, manager,
shareholders or employees
 Organisation and IS

• Organizational Structure
– Subunits and the way they relate to the overall organization
– Depends on goals and approach to management
– Can affect how it views and uses IS
• Traditional Organisational Structure
 Organisation and IS

• Flat Organizational Structure

– Reduce number of management levels
– Empower employees at lower level to make decisions and solve
problems
– Give responsibility
– IS is important here to provide information
 Organisation and IS

• Project and Team Organizational Structure

– Centred on major product and services
– Project teams are temporary
– Teams organizational structure: centred on work teams or groups
• Virtual Organizational Structure
– Allows work to be separated in terms of location and time
– Collaborative work
– IT plays major role in connecting such organizations
 Organisational Culture and Change

Organizational Culture: set of major understandings

and assumptions shared by a group for a
business/organization
– Common beliefs, values, approaches to decision making
– New IS might at times conflict with an informal rules
– Organizational culture affects development and operation of IS
Organisational Change: deals with how for-profit and
non-profit organizations plan for, implement and
handle change
– Sustaining change or disruptive change
– Resistance to change also affects the working of IS
 Organisational Culture and Change

• Organisational Learning
– Adapting to new conditions or adapting the practices over time
– Adjustments based on experience and ideas
 Business Processes

• In order to operate, businesses must deal with many different

pieces of information about suppliers, customers, employees,
invoices, and payments, and of course their products and
services.
• They must organize work activities that use this information to
operate efficiently and enhance the overall performance of
the firm.
• Information systems make it possible for firms to manage all
their information, make better decisions, and improve the
execution of their business processes
 Business Processes

• Business Process
– Collection of activities required to produce a product or service
– Supported by flows of material, information, knowledge
– May be tied to functional area or be cross-functional
• Performance of business depends on business
processes
• Functional business processes
- Tied to specific business area
- E.g. Sales and marketing: identifying customers, product marketing and
selling
• Cross functional Business processes
– Cross different functional areas, require coordination across
departments
 Business Processes

• Examples of functional business processes

– Manufacturing and production
• Assembling the product
– Sales and marketing
• Identifying customers
– Finance and accounting
• Creating financial statements
– Human resources
• Hiring employees
 Business Process

• Figure 2.1: The Order Fulfillment Process

 How Information Technology Improves
Business Processes
• Increasing efficiency of existing processes
– Automating steps that were manual
• Enabling entirely new processes
– Changing flow of information
– Replacing sequential steps with parallel steps
– Eliminating delays in decision making
– Supporting new business models
 Reengineering and Continues Improvement

• Competitive organizations make fundamental

changes in how they do business
• Business process reengineering
– Involves the radical redesign of business processes,
organizational structure, iS and values of the organization to
achieve break through performance
– Reduce delivery time, increase product and service quality
– Challenges fundamental assumptions and rules
 User Satisfaction and Technology Acceptance

• Relates to the IS attitudes and usage

• User satisfaction depends on quality of system and
information
– Flexible, efficient, timely, accessible

• Technology acceptance model (TAM): factors that lead to

better attitude of IS, higher acceptance and usage
– Technology diffusion: how widely technology is spread
– Technology infusion: extent to which technology infuses in area or
department
– Companies hope that high level of diffusion, infusion, satisfaction and
acceptance will lead to greater performance and profitability
 Business Information Systems

• Purpose: help employees in organizations accomplish

routine and special tasks
• Different IS support different interests, specialities and
levels in the organizations
• e-commerce, m-commerce
• Management Level Systems
• Enterprise Systems
• Collaborative Systems
 Electronic and Mobile Commerce

• E-business: refers to use of digital technology and

Internet to execute the major business processes
– Accounting, finance, manufacturing, HR activities,
– E-business strategy is flexible and adaptable
• E-commerce: any business transaction (buying and
selling) executed electronically
– B2B, B2C, C2C
– Also offers opportunities for small businesses
• M-commerce: transactions happening anywhere,
anytime (using wireless communications)
 Management Level Systems

• Transaction Processing System (TPS)

• Organized collection of people, procedures, software,
devices and databases used to record and complete
business transactions
– Sales, receipts, payroll, paying suppliers
– Purpose: answer routine questions and track flow of transactions
– Tasks predefined and highly structured
– Managers need TPS to monitor the status of internal operations
 Management Level Systems

• Management Information Systems (MIS)

• Organized collection of people, procedures, software,
databases and devices that provide routine information
to managers ad decision makers
– Purpose: operational efficiency
– Marketing, finance, production
– Generate reports from data and information supplied by TPS
– Managers use this to monitor and control the business and predict
future performances
 Management Level Systems

• Decision Support Systems (DSS)

• Organized collection of people, procedures, software,
databases and devices that support problem-specific
decision making
– Use information from TPS and MIS, plus external sources
– Purpose: solving unique problems, solutions may not be fully predefined
– Supports decision making process by analysing data and suggesting
alternatives
• Executive Support Systems (ESS)
– Used by senior management
– Judgement, evaluation, insight
– Information presented through portal in the form of digital dashboard
Management Level Systems
Management Level Systems
 Case Study: Dominos Pizza Tracker

• Company: Domino’s Pizza

• Problem: Customers not happy with home delivery
and pizza
• Competitive Advantage needed
– Good Pizza
– Excellent customer service
• Point of sale system – Pulse
– Captures purchase and payment data using computers, automated
cash registers , scanners etc.
– Improved customer service, reduced mistakes, shorter training time
 Case Study: Dominos Pizza Tracker

• Pulse Evolution
– Think client model to thin client model
– networked stations with little processing power collect data
– Info goes to one machine for processing
– Benefit: easier to update and secure
• Ordering system: Pizza Tracker
– Simulated photographic version of pizza shown while ordering
– View progress of pizza ordered online
– Improved customer relationship
 Case Study: Dominos Pizza Tracker

• Systems
– Point of sale system
– Online ordering system
• Business Processes
– Purchase and payments at physical locations
– Managing online orders for pizza
• Business performance
– Help in maintaining consistent and efficient management functions
– Taking and customizing orders, maintaining sales figures, compiling
customer info
• Online Pizza tracker
– Showing photographic version of the pizza and giving view of the
progress of the pizza order
 Enterprise Systems

• Different kinds if IS in a firm work together

• The challenge to get them all work together as one
corporate system (information integration )
• Solution: enterprise applications (systems) that span
functional areas
– Executing business processes across the firm
– coordinate business processes closely
 Enterprise Systems

• Enterprise Resource Planning (ERP)

• Set of integrated programs that manages the vital
business operations of an entire organization
– Scope varies but usually integrates marketing/sales, finance,
manufacturing business processes
– Benefit: easy adoption of improved work processes, increased access
of timely data
• Supply Chain Management Systems (SCM)
• Customer Relationship Management Systems (CRM)
• Knowledge Management Systems (KMS)
 Collaboration Systems

• Collaboration: working with others to achieve shared

and explicit goals
– E.g. members in a team collaborate to complete a task
– Investments in collaborative technologies brought improvements
– Categories of Collaborative Software Tools
• E-mail and instant messaging
• Collaborative Writing
• Event Scheduling
• Audio Conferencing
• Video Conferencing
• White boarding
• Document sharing (wikis)
 Collaboration Systems

• E-mail and Instant Messaging

– Major communication and collaboration tool
– IM allows real time conversation with multiple people
• Social Networking
– Corporate tool for sharing ideas and collaborating
– LinkedIn.com provides networking services to business professionals
• Wikis
– Major wiki: Wikipedia
– Contribute and edit text content and graphics
– Major repository for unstructured corporate knowledge
 Collaboration Systems

• Virtual Meeting Systems

– Reason: to reduce travel costs by business professionals
– Briefing, training courses, management consulting, inspirational chats
– Telepresence: integrated audio-video technology that allows the person
to give the appearance of being present at the location of meeting