Principles of Information

Systems, Eleventh Edition

Chapter 2
Information Systems in Organizations

Principles  of  Informa0on  Systems,  Eleventh     1  

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 Learning Objectives

• The use of information systems to add value to the

organization is strongly influenced by
organizational structure, culture, and change
• Because information systems are so important,
businesses need to be sure that improvements or
completely new systems help lower costs, increase
profits, improve service, or achieve a competitive
advantage
• Define the types of roles, functions, and careers
available in the field of information systems

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Why Learn About Information Systems
in Organizations?
• Organizations of all types use information systems
to cut costs and increase profits
• Although your career might be different from your
classmates:
– You will almost certainly work with computers and
information systems
• While information systems were once used to
automate manual processes, they have
transformed the nature of work and the shape of
organizations themselves

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 Organizations and Information
Systems
• Organization:
– Formal collection of people and other resources
established to accomplish a set of goals
– A system with inputs and outputs
– Constantly uses money, people, materials, machines
and other equipment, data, information, and
decisions

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Organizations and Information
Systems (continued)

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Organizations and Information
Systems (continued)

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 Organizations and Information
Systems (continued)
• Supply chain management (SCM)
– Determines:
• What supplies are required for value chain
• What quantities are needed to meet customer demand
• How supplies should be processed into finished goods
and services
• How shipment of supplies and products to customers
should be scheduled, monitored, and controlled

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 Organizations and Information
Systems (continued)
• Customer relationship management (CRM)
programs:
– Help companies manage all aspects of customer
encounters including marketing and advertising,
sales, customer service, and programs to retain loyal
customers
– Can get customer feedback to help design new
products and services

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 Organizational Structures

• Organizational structure:
– Organizational subunits and the way they relate to
the overall organization
– Depends on organization’s goals and its approach
to management
• Types of organizational structures:
– Traditional
– Project
– Team
– Virtual

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 Organizational Structures (continued)

• Traditional organizational structure:

– Hierarchy of decision making and authority flows:
• From the strategic management at the top down to
operational management and non-management
employees
– Flat organizational structure:
• Empowers employees at lower levels
– Empowerment:
• Gives employees and their managers more
responsibility and authority to make decisions

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Organizational Structures (continued)

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Organizational Structures (continued)

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 Organizational Structures (continued)

• Project and team organizational structures:

– Project organizational structure:
• Centered on major products or services
• Many project teams are temporary
– Team organizational structure:
• Centered on work teams or groups
• Team can be temporary or permanent, depending on
tasks

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Organizational Structures (continued)

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 Organizational Structures (continued)

• Virtual organizational structure and collaborative

work:
– Virtual organizational structure:
• Uses individuals, groups, or complete business units
in geographically dispersed areas
• Can reduce costs for an organization
– Allows collaborative work:
• Managers and employees can effectively work in
groups, even those composed of members from
around the world

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 Organizational Culture and Change

• Culture:
– Set of major understandings and assumptions
shared by a group
• Organizational culture:
– Major understandings and assumptions
• Organizational change:
– How organizations plan for, implement, and handle
change

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 User Satisfaction and Technology
Acceptance
• Technology acceptance model (TAM):
– Specifies the factors that can lead to better attitudes
about the information system
• Technology diffusion:
– Measure of how widely technology is spread
throughout an organization
• Technology infusion:
– Extent to which technology permeates a department

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User Satisfaction and Technology
Acceptance (continued)

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 Quality

• Ability of a product or service to meet or exceed

customer expectations
• Techniques used to ensure quality:
– Total quality management
– Six Sigma

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Outsourcing, On-Demand Computing,
and Downsizing
• Outsourcing:
– Contracting with outside professional services to
meet specific business needs
• On-demand computing:
– Also called on-demand business or utility computing
– Rapidly responding to the organization’s flow of
work as the need for computer resources varies
• Downsizing:
– Reducing number of employees to cut costs

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 Competitive Advantage

• Significant and (ideally) long-term benefit to a

company over its competition
• Can result in higher-quality products, better
customer service, and lower costs
• Organizations often use their information systems
to help gain a competitive advantage

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 Productivity

• A measure of output achieved divided by input

required
• Higher level of output for a given level of input
means greater productivity
• Lower level of output for a given level of input
means lower productivity
• Productivity = (Output / Input) × 100%
• Can be based on factors such as the amount of
raw materials used, resulting quality, or time to
produce the goods or service
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Return on Investment and the Value of
Information Systems
• Return on investment (ROI):
– One measure of IS value
– Investigates the additional profits or benefits that are
generated as a percentage of the investment in IS
technology
• Earnings growth
– The increase in profit that the system brings

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 Risk

• Managers must consider the risks of designing,

developing, and implementing systems
• Information systems can sometimes be costly
failures

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 Careers in Information Systems

• Numerous schools have degree programs:

– Information systems
– Computer information systems
– Management information systems
• U.S. Department of Labor’s Bureau of Labor
Statistics (www.bls.gov)
– Publishes the fastest-growing occupations
– Predicts that many technology jobs will increase
through 2012 or beyond

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 Careers in Information Systems
(continued)
• Skills believed important for IS workers to have
– Mobile applications for smartphones, tablet
computers, and other mobile devices
– Program and application development
– Help desk and technical support
– Project management and networking
– Business intelligence and security
– Web 2.0 and Data center
– Telecommunications

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 Careers in Information Systems
(continued)
• Nontechnical skills are also important for IS
personnel, including
– Communication skills
– Detailed knowledge of the organization
– How information systems can help the organization
achieve its goals

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 Roles, Functions, and Careers in IS

• In addition to technical skills, IS professionals

• need skills in
– Written and verbal communication
– An understanding of organizations and the way they
operate
– The ability to work with people and in groups

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 Typical IS Titles and Functions

• Chief information officer (CIO)

– Employs the IS department’s equipment and
personnel to help the organization attain its goals
• Senior IS Managers
– Vice president of information systems, manager of
information systems, and chief technology officer
(CTO)
• LAN administrators
– Set up and manage the network hardware, software,
and security processes

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 Typical IS Titles and Functions
(continued)
• Internet careers:
– Internet strategists and administrators
– Internet systems developers
– Internet programmers
– Internet or Web site operators
• Certification:
– Process for testing skills and knowledge resulting in
an endorsement by the certifying authority that
individual is capable of performing particular tasks or
jobs

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 Other IS Careers

• New and exciting careers have developed in

security and fraud detection and prevention
• Other IS career opportunities include being
employed by technology companies, such as:
– Microsoft (www.microsoft.com), Google
(www.google.com), Dell (www.dell.com), and many
others

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 Working in Teams

• It is always good for IS professionals to:

– Have good communications skills and the ability to
work with other people
• Getting the best team of IS personnel to work on
important projects is:
– Critical in successfully developing new information
systems or modifying existing ones

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 Finding a Job in IS

• Developing an online résumé can be critical to

finding a good job
• Job search approaches:
– On campus visits
– Referrals from professors, friends, and family
members
– The Internet:
• Online job sites
• Company Web sites
• Social networking sites
• Blogs
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