Chapter Introduction The Information Systems Strategy Triangle MIS. Management Information Systems. A Business View of Critical Resources

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1 Chapter Introduction The Systems Strategy Triangle Jason C. H. Chen, Ph.D. Professor of MIS School of Business Administration Gonzaga University Spokane, WA Systems Which component is mostly important? MIS 2 Figure I.1 - Reasons why business managers should participate in information systems decisions Reasons: IS must be managed as a critical resource since it permeates almost every aspect of business IS enable change in the way people work both inside and outside of the enterprise. IS are at the heart of integrated internet-based solutions that are replacing standard business processes. IS enable or inhibit business opportunities and new strategies. IS can be used to combat business challenges from competitors IS provide customers with a voice using social media. IS can support data-driven decision making. IS can help ensure the security of key assets. 3 A Business View of Critical Resources IT Spending is quite high: Worldwide $3.7 trillion in 2014 Expenditures span 5 categories Devices (e.g., PCs, tablets, mobile phones) Data centers (e.g., servers, storage equipment) Enterprise (companywide) software IT Services (e.g., support and consulting services) Telecommunications (e.g., voice and data services) If these expenditures do not return value, they will dwindle over time 4 People and Technology Work Together Some of the most-used sites focus on Web 2.0 In Web 2.0, significant content comes from users Sharing User-centered design Interoperability Collaboration Skilled business managers must balance: The benefits of introducing new technology The costs associated with changing the existing behaviors of people in the workplace Managers do not require deep technical knowledge It requires understanding short-term and long-term consequences of the choices made 5 Managers Need to be Aware of the importance of: Customer pull (and their needs) Customers now have power using social media Entire business models sometimes need to be redesigned -driven Data decision making Now available: more data than ever before (Big Data) From social media From large data stores in firms Predictive analytics tools can help with analysis of that data Securing key assets A balance is needed Too little security endangers assets of the firm and its customers Too much reduces operational convenience 6 1

2 CTO Labs What Happens if Doesn t Participate IS Decision? What did Jeremy King say in his blog (pg. 4)? Every company is a tech company Do you believe this is true for most firms, or is Wal-Mart somehow different? Why? How about FedEx? Can you name firms that do not receive key impacts or benefits from technology? Breakdown in servicing customers Damaged reputation Poor spending: (ineffective) Overspending and excess capacity, or Underspending and restricted opportunity Inefficient business processes Sales decline Strategy POP QUIZ Strategy Needs and priorities Strategy 9 Failing to Consider IS Strategy Leads to: IS that fail to support business goals e.g., Victoria s Secret site overloaded/crashed with too many inquiries when a Superbowl ad promoting an online fashion show Toys R Us web site was unable to process and fulfill orders fast enough on one holiday season IS that fail to support organizational systems e.g., workers buying mobile devices but the IT department only supports desktop PCs Misalignment between business goals and organizational systems need appropriate training and/or modification on the jobs 10 MIS and Roles ASSUMPTIONS Data MIS/IS Transformation Decisions Roles Interpersonal roles Actionable Results - Based roles Figurehead Leader Liaison Monitor Facilitator Spokesperson Description Very easy role No major decision making Or information processing Most significant; judging, Promoting, monitoring, training Give-and-take relationships Seeks and receives Specific information Transmits information To employees, managers,etc. Transmits information To vendors, customer, etc. 11 Decisionrelated roles Entrepreneur Problem Solver Resource Allocator negotiator Initiates improvements Supervises projects Allocates and approves Resources Represents the firm in Settling disputes 12 2

3 Skills Managers Need for Their IT Decisions Managerial Role Visionary Structural Skills Creativity Curiosity Confidence Focus on business solutions Flexibility Project management Analytical Organizational Planning Leading Controlling Managerial Role al and Interpersonal Skills Communication Listening gathering Interpersonal skill Figure I.2 Skills for successful IT use by managerial role Figure I-4: Hierarch: The relationships between data, information, and knowledge. Data Knowledge Data Simple observation of states of the world Easily captured Easily structured Easily transferred Compact, quantifiable Data endowed with relevance and purpose Requires unit of analysis Needs consensus on meaning Human mediation necessary Often garbled in transmission More human contribution Greater value Knowledge Valuable information from the human mind; includes reflection, synthesis, context Hard to capture electronically Hard to structure Often tacit Hard to transfer Highly personal to the source The Content of Human Mind According to Russell Ackoff, a systems theorist and professor of organizational change, the content of the human mind can be classified into five categories: Data: symbols or facts (simple observation) : data that are processed to be useful; provides answers to "who", "what", "where", and "when" questions (data + relevance + purpose) Knowledge: application of data and information; answers "how" questions (information + context + synthesis + reflection) Intelligence/Understanding: appreciation of "why Wisdom: evaluated understanding. Value Chain Data of the Enterprise Characteristics of Across Levels Top Middle Time Horizon Long: years Medium: weeks, months, years Level of Detail Highly aggregated Less accurate More predictive Summarized Integrated Often financial Supervisory and Lower-Level Short: day to day Very detailed Very accurate Often nonfinancial Source Primarily external Primarily internal Internal with limited external Decision Extremely judgmental Uses creativity and analytical skills Relatively judgmental Heavy reliance on rules Data Knowledge Intelligence Wisdom Figure I.7 characteristics across hierarchical levels Things Wear out Economics of vs Economics of Things Are replicated at the expense of the manufacturer Exist in a tangible location When sold, possession changes hands Price based on production costs Doesn t wear out but can become obsolete or untrue Is replicated at almost zero cost without limit Does not physically exist When sold, seller may still possess and sell again Price based on value to consumer Figure I.8 Comparison of the economics of things with the economics of information Internet of Things (IoT) Combine information and things = IoT Machines and sensors talking to each other over the network From the 1970s: Coke machine at Carnegie Mellon University sensors in the machines to monitor inventory and push button for the coldest bottles From the 1980s: Elevators that call for service without people knowing there is a problem sensors in elevators send alerts over a network to a service center s computer) Today: Self-driving cars Internet-connected (and controllable) thermostats, stoves, alarm systems Pets that are trackable online Heart monitors that alert doctors or hospitals of a problem Digital video recorders that can be controlled around the world Quad-copters (drones) that can Record video marked with location data Return to the point of origin if it goes out of range of the pilot Notify regarding its location and avoid objects in a database

4 Building a Social Business Strategy A social business strategy is A plan of how the firm will use social IT, aligned with organization strategy and IS strategy A vision of how the business would operate if it seamlessly and thoroughly incorporated social and collaborative capabilities throughout the business model Social IT is the technologies used for people to collaborate, network, and interact over the Web. Social business is the enterprise use of social IT for business applications, activities and processes. Social media refers to the marketing and sales applications of social IT. Social networking is the user of theses types of social IT tools in a community. 19 The Term Systems Composed of: People Processes Technology vs Systems The term IT tends to be more fashionable But IT actually refers to just the technology Many people interchange the terms System Hierarchy systems are composed of three main elements: technology, people, and process. Infrastructure refers to everything that supports the flow and processing of information in an organization, including hardware, software, data, and network components. Architecture refers to the blueprint that reflects strategy implicit in combining these The Term Systems Composed of: People (Organization) Processes () Systems People Technology Process components. Figure I-9: System Hierarchy Which component is mostly important? INFORMATION SYSTEMS (Another Perspective) ORGANIZATIONS INFORMATION SYSTEMS MANAGEMENT TECHNOLOGY Technology vs. Technique is the making, usage, and knowledge of tools, machines, techniques, crafts, systems or methods of organization in order to solve a problem or perform a specific function. It can also refer to the collection of such tools, machinery, and procedures. Technique Personal habits Work style 23 John Dr. Wiley Chen, & The Sons, Challenge Inc. & Dr. of Chen, the Systems Systems Technology Theory and Practices TM

5 Essential Value Propositions for a Successful Company Business Model A value-added Value, value, value Core Competency outsourcing offshoring Execution Set corporate goals and get executive sponsorship for the initiative IT Role? 25 5