1. Role of IS in Organizations

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1. Role of IS in Organizations

• Early views of IS in organizations
• Lessons from DP era
• Lessons from MIS era
• The SIS era
• Types of SIS
• Success factors of SIS
• Applications portfolio in the SIS era
• Role of IS Plan in the SIS era

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Early Views of IS in Organizations

• Anthonys (1965) framework

Planning systems
Sales forecasting, operating plans, capacity
planning, profit/earnings forecasts, business mix
analysis, manpower planning, financial modelling
Control systems
Sales analysis, budgetary control, management
accounting, inventory management, quality
analysis, expense reporting, market
research/statistics, work-in-process
control, requirements planning, supplier analysis
Operational systems
Order entry processing, tracking shipping
documents, vehicle scheduling/loading, invoicing,
sales and purchase ledgers, cost accounting,
stock control, shop floor scheduling, bill of
materials, purchase orders, receiving, employee
records, payroll, word processing
Time
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Early Views of IS in Organizations

• Nolans (1974) framework

IS expense
Data processing
Management information systems
Time
Control Returns expected, development methodologi
es, request backlogs
Integration Integrate systems, user
accountability, service centres
Data management Information needs drive
applications, information sharing
Maturity IS planning align to business planning
Initiation Batch processing, cost reduction,
little management interest
Contagion Rapid growth, high expectations, little
control
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Lessons from DP Era

• Need to understand the process of developing
  complete IS
• More thorough requirements and data analysis
• More appropriate justification of investments
• Less creative, more structured approaches to
  programming, testing, and documentation
• Extended project management to coordinate user
  and DP functions
• Need to plan the inter-related set of IS required
  by the organization

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Lessons from MIS Era

• Justification of IS investments not simply a
  matter of financial analysis
• Databases require large restructuring projects
  and heavy user involvement
• IS resource needs to move from a production to a
  service orientation
• Need for organizational policies, not just DP
  methodologies
• PCs enable better MIS to be developed provided
  users and IS people focus on information needs

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The SIS Era
1960s
1970s
1980s
1990s

Data processing (improve operational efficiency)
Management information systems (improve
management effectiveness)
Technology developments
Strategic information systems (improve
organizational competitiveness)
Business opportunities
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Types of SIS

• Those that share information with customers
  and/or suppliers thereby changing business
  relationships
• Those that effectively integrate the use of
  information in organizational value-adding
  processes
• Those that enable organizations to develop,
  produce, and market new or enhanced products or
  services
• Those that provide managers with information to
  support development and implementation of
  strategy
• Examples American Hospital Supply, International
  Enterprise Singapore, Amazon.com, and Safeway

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Success Factors of SIS

• External focus instead of internal focus
• Adding value instead of cost reduction
• Sharing the benefits internally and externally
• Understanding customers and their needs
• Business driven instead of technology driven
• Incremental development instead of total
  development
• Using information gained to develop business

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Applications Portfolio in the SIS Era

• Strategic applications
• Critical for future success

• High potential applications
• May be critical for future success

• Examples
• Just-in-time links to suppliers
• Sales forecasting system
• Market analysis system

• Examples
• IS links to business partners
• Manpower planning system
• Expert fault diagnosis system

• Support applications
• Valuable but not critical for success

• Key operational applications
• Critical for current success

• Examples
• Inventory management system
• Product costing system
• Maintenance scheduling system

• Examples
• General accounting system
• Time recording system
• Payroll system

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Role of IS Plan in the SIS Era

• IS demand issues
• Align IS demand to business objectives
• Facilitate integration of IS demand
• Allow priority setting for IS demand
• IS supply issues
• Guide resource planning for IS supply
• Ensure availability of assets for IS supply
• Promote objective evaluation of options for IS
  supply