Information Systems in Organizations

Transcription

1 Information Systems in Organizations Organizations and Information Systems Using Information Systems for Competitive Advantage Performance-Based Information System Justifying Information System Careers in Information Systems

2 Organizations and Information Systems Organization An organization is a formal collection of people and other resources established to accomplish a set of goals. The primary goal of a for-profit organization is to maximize profits by increasing revenues or reducing costs. Nonprofit organizations such as universities, religious groups, social groups, cultural groups, and other organizations do not seek profit, but they need to balance between the income and expense to sustain existence. Organization as a System An organization can be considered as a system. Money, people, materials, equipment, machines, data, information, and decisions are constantly used in an organization. Resources such as money, people, materials, data are used as input to an organization, The input goes through transformation mechanism or processed by various departments or divisions. The output from an organization is good or services. Feedback mechanisms are constantly used to improve the quality of goods or services. 2

3 General Model of an Organization 3

4 Interdependence between organizations and information systems Information systems support and work in all parts of an organizational process 4

5 Use of Information Systems for Competitive Advantage In today s competitive market, companies need to have some advantage over companies to sustain in business show prosperity or profit. Deployment of an Information System can be an advantage to a company over other companies. A sophisticated computerized reservation system for an airline, where customers can reserve tickets from home, might be a competitive advantage to that airline over other airline. A central repository of data for a retail store might be advantageous for managers to identify stock levels of items and produce on-line purchase orders. 5

6 6

7 Performance-Based Information System Information systems (IS) in a company may be implemented for various reasons. A company may implement IS such that it reduces cost and increases productivity, but it does not address the revenue or sales. A company may implement IS to gain competitive advantage over other companies but ignore the cost of the system. Several performance factors should be addressed before employing an information system in a company. Productivity Developing information systems that measure and control productivity is a key element for most organization. Productivity is a measure of the output achieved divided by the input required: Productivity = (Output/Input) x 100% A Tax clerk may complete 30 tax returns in a 40-hour week. Thus productivity = 30/40 or 75 percent A higher level of output for a given level of input means greater productivity. Improved productivity can result is faster customer response, lower costs, and increased customer satisfaction. 7

8 Return on Investment Return on Investment (ROI) measures the additional profits or benefits that are generated as a percentage of the investment in information system technology. Example: A small business invested $100,000 for additional computer hardware and software. It s income for the first year is changed from $100,000 to $120,000. Thus, it generates an additional profit of $20,000 for the first year. The return on investment is ($20,000/$100,000) or 20%. Earning Growth Earning growth or increase in profit is an additional profit that is brought to a company due to an information system. Example: Installation of a new ordering system may bring the total profit to 20% as compared to 12% before installing the system. Thus the earning growth = 20% - 12% = 8%. Market Share It is the percentage of sales that one company s products or services have in relation to the total market. Example: Total internet service provider market consists of companies such as AOL, Microsoft Network, CompuServe, Prodigy, and so on. But Microsoft may hold 20% of all customers that subscribe to internet access. Thus the market share for Microsoft Network is 20%. Customer Awareness and Satisfaction Customer satisfaction of an information system is hard to measure, but methods can be implemented to obtain feedback from customers regarding the improvement of product or service due to new system. 8

9 Justifying Information Systems The process of designing a new information system or its changes require justification that the change is necessary and it will yield gains for the organization. To avoid wastage of time, money and effort, each potential information system project should be reviewed to ensure that: 1. The project meets an important business need or requirement. 2. Consistent with corporate strategy. 3. Leads to specific goals and objective. Risk Assessment The degree of risk or uncertainty in designing an information should also be assessed. It can be assessed by answering the following: 1. How well are the requirements of the system understood? 2. To what degree does the project require pioneering effort in technology that is new to the organization. 3. Is there a risk of severe business repercussions if the project is poorly implemented? 9

10 Benefits of an Information System Development The fundamental benefits for considering an IS project should be identified. Most IT projects fall into one of the following: Tangible Savings: Implementation of the project will result in hard dollar savings to the company that can be quantified. Examples: reduced staff, lowered operating costs, or increased sales. Intangible Savings: Implementation of the project will result in soft dollar savings to the company, the magnitude of which is hard to measure. Examples: faster registration period, better decision by managers. Legal Requirement: Implementation of the project is required to meet state or federal regulation. Examples: calculation of federal and state tax, employment history of handicapped and minority employees. Modernization: Implementation of the project is needed to keep current with changing business or technology requirements. Examples: computer upgrade to accommodate new software, network database to provide access to multiple users, Installation of a network fax software to automate faxing through all user computers. Pilot Project: Implementation of the project is required to gain experience in a new technology. Example: installation of a power point presentation system in each classroom. 10

11 Careers in Information Systems Strong growth in computer and information technology resulted increased demands of IS professionals in business and industry. Like other functional areas of a business, organizations now have an information systems department that takes care of all computing needs of an organization. Information technology department typically employs personnel like programmers, systems administrators, systems analysts, database administrators, technicians, operators, and other support personnel. 11

12 The information systems department is in general can be divided into three components: operations, systems development, and support. Most IS personnel work in one of these components. The Chief information Officer (CIO) is in charge of the IT department. Other functional areas such as human resources, marketing, and finance departments may have a small information services unit to support their daily information system-related activities. Loading or upgrading a particular software for a faculty member s computer in the School of Business, falls in this category. Technical personnel of this unit also cooperate with the IT support component. 12

13 Chief Information Officer (CIO) Most organizations now have a high-level administrative position who manages the IT department. This position may be titled as chief information officer (CIO), vice president of information systems, or manager of information systems The CIO is usually a manager at the vice-president level and works with other high-level officers of the organization to define overall information needs of the organization. Some of the CIO s top concerns include integrating information systems operations with corporate strategies, keeping up with the rapid pace of technology, and defining and assessing the value of systems development projects in terms of performance, cost, control, and complexity. Operations Group The operations component of a typical IS department focuses on the efficiency of business operations. Operations Manger: He or she is a technical person responsible for overall operations of this component, including employees. LAN or System Administrator: System administrators are responsible to set up and manage the Local Area Network (LAN) hardware, software, and security processes of an organization. These include loading operating systems in a computer, assigning user accounts, setting up Intranet and Web server, and so on. System Operator: The primary function of a system operator is to run and maintain IS equipment. He or she is also responsible for starting, stopping, and correctly operating computer systems, networks, tape drivers, disk drives, printers, and so on. Data-Entry Operator: They are responsible for entering data to the computer systems. For example, an order-processing clerk may enter all information for an on-line order from a customer while the customer is in on the phone. 13

14 Systems Development Group The systems development component focuses on the development of the new information systems and ongoing maintenance and review of the existing systems. Project Manager: Project managers are responsible for the development of an information system projects. He defines the project timeline, work assignments to programmers and analyst, controls some budget, and so on. Systems Analyst: The systems analyst plays a major role in the development and maintenance of an information system. He or she defines the requirements for a new system; designs the system input, output and processing; works with the programmers to develop and test the system; and finally helps users install the system. Programmer: The major responsibility of a programmer is to use plans developed by the systems analyst to develop or adapt one or more computer programs that produce desired outputs. Database Administrator: the database administrator focuses on planning, policies, and procedures regarding the use of corporate data and information. He or she designs databases to be used by systems analysts and programmers. The database administrator is also is in charge of monitoring and controlling of the databases. Web Developers: these are simple programmers who are involved in developing corporate Web pages that are either used for informational purposes or electronic commerce. 14

15 Support Group This component of the IS department provides assistance to computer users in the areas of hardware and software acquisition and use, data administration, and user training and assistance. This group sets guidelines and standards for the rest of the organization to follow in making purchases. Information Center: An information center typically provides users with assistance, training materials, application development tools, documentation, equipment selection and setup, technical assistance, and troubleshooting. 15