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Copyright © 2004 Sherif Kamel
IT and Organizational Redesign and Transformation
Sherif Kamel
The American University in Cairo
Copyright © 2004 Sherif Kamel
Outline
IT and organizational transformation Strategic/structured alignment processes How IT affects the organization? Types of management support systems Systems development methodology
Copyright © 2004 Sherif Kamel
The 1990s and beyondIncreased connectivity and organizational transformations
1990s business forceso Globalizationo Worldwide competitiono Volatile environment
Increased connectivityo Inter-organizational business relationshipso Intra-organizational coordination for increased efficiency and effectivenesso Adaptable organization structures
1990s information technology opportunitieso Continued dramatic cost performance and capacity advanceso New IT architectures encompassing:
Extensive communications networks Accessible distributed databases Enhanced human interface workstations
Copyright © 2004 Sherif Kamel
InnovationProcess
Current and FutureInformation
Technologies
ITApplications
OrganizationalChanges
OrganizationalChanges
CorporateMission & Strategy
Copyright © 1990 Scott Morton
Strategic alignment process
Copyright © 2004 Sherif Kamel
It is important to note…
Information technology does not change what people do but rather it helps restructuring processes.
Information technology is an important factor for organizational transformation.
Copyright © 2004 Sherif Kamel
PotentialEntrants
Substitutes
CustomersThe
OrganizationSuppliers
IT and organizational transformation
Copyright © 1980 Porter
Copyright © 2004 Sherif Kamel
Clerk
Claims Mgr
Clerk
Clerk
Clerk
Model organizational office
Copyright © 2004 Sherif Kamel
DocumentImage
Database
FAXE-Mail
FAX
Claims Mgr
changed organization, fewer users, lower costs and improved service
The Re-engineered Office
Copyright © 2004 Sherif Kamel
The distribution of power Cultural adaptation Opportunities for small organizations New organizations, new work practices, and new
lifestyles
Organizational issues
Copyright © 2004 Sherif Kamel
Organizational shift
We are entering a period of change - a shift from the command and control organization, to the information based organization - the organization of knowledge specialists
Copyright © 1988 Drucker
Copyright © 2004 Sherif Kamel
IS organizational alignment An organizational strategic objective to align information
systems (as a function, unit, department, service) with the organization as a whole
Role of IT alignment within the organization…what is the impact?
Structure of the organization and IT alignment (formal and information organizational channels and information flows
Copyright © 2004 Sherif Kamel
Components of IS alignment?
Strategic alignmento Importance in improving IS performance
Structural alignmento Examines the degree of structural fit between IS and the
business focusing on… IS decision making rights Reporting relationships Decentralization and centralization of IS services Infrastructure Deployment of IS personnel
Copyright © 2004 Sherif Kamel
Strategic alignment
Communication and understanding between line management and IS executives.
Linking business and IS mission, priorities and strategies.
Interconnected business and IS planning processes and resulting plans.
Line executive commitment to IS issues and initiatives.
Copyright © 2004 Sherif Kamel
Structural alignment
IS skills of line personnel and business skills of IS personnel
Decentralized and centralized reporting relationships and committees
Informal networks and relationships Career paths and cross-functional linkages Incentives and rewards Performance measurement and evaluation
Copyright © 2004 Sherif Kamel
Important remarks
Strategic alignment theory and practice should be in sync
Structural alignment varied by organization – there is no one specific way that could be right for all organizations
IS strategic alignment mattered more than formal IS structural alignment
The informal organizational structure is more important to IS alignment than commonly recognized
Strong company culture may be a precondition to an informal structure that fosters alignment
Alignment of the informal structure needs more attention
Copyright © 2004 Sherif Kamel
automates…o applications are designed to do better what we are doing now
informates…o applications are automate type applications which generate
useful information as a by-product
transformates…o applications achieve an end result in a new way
Information technology…
Copyright © 2004 Sherif Kamel
How IT affects organizations?
Information technology could change hierarchy of decision making
Lower cost of information acquisition Broadens the distribution of information Task force networked organizations Uses networks to link people, assets, and ideas to create
and distribute products and services without being limited to physical locations
Copyright © 2004 Sherif Kamel
Types ofManagement Support Systems
Operational (transaction processing systems)o Projects scheduling (semi-structured)o Accounts (structured)
Knowledge Systemso Office technology applications (structured)o Product design (unstructured)
Managemento Management information systems (structured)o Decision support systems (semi-structured/unstructured)
Strategico Executive support systems (unstructured)
Copyright © 2004 Sherif Kamel
Issues to be raised…
How could building a new information system change the way an organization works?
How can a company make sure that the new information systems it builds fit its business plan?
What are the steps required to build a new information system?
What alternative methods for building information systems are available?
Are there specific techniques or approaches for building a new information system?
Copyright © 2004 Sherif Kamel
Developing business systems
The interaction between business problems and IS solutions is growing exponentially
Continuous propositions for organizational development using various IT tools
Key issue: is to define how information systems solutions that meet business and organizational needs can be developed
Copyright © 2004 Sherif Kamel
Structured development – the waterfall approach (classic system development life cycle)
o Structured programming development methodologyo Automated project management systemo Database management systemo Mix of online and batch applications in the same systemo Development of mostly mainframe applicationso User participation mainly in require definition and installation
phases
Foundations of system development
Copyright © 2004 Sherif Kamel
Waterfall Approach [classical]
Planning
Analysis
Design
Implementation
Copyright © 2004 Sherif Kamel
Systems approach
The systems approach to problem solving uses a systems orientation to define problems and opportunities and develop solutions
There are a number of steps involved including:1. Recognize and define a problem or opportunity using systems
thinking
2. Develop and evaluate alternative system solutions
3. Select the system solution that best meets your requirements
4. Design the selected system solution
5. Implement and evaluate the success of the designed system
Copyright © 2004 Sherif Kamel
Systems thinking
Using systems thinking to understand a problem or opportunityo It is a very important factor in the systems approacho Systems thinking could be described as:
Seeing interrelationships among systems rather than linear cause-and-effect chains when events occur
Seeing processes of change among systems rather than discrete snapshots of change whenever change occurs
Copyright © 2004 Sherif Kamel
Systems thinking – Example
A business organization or a business processo Problem or opportunity ariseso System of input-processing-output-feedback-controlo Understanding and solving problemso Developing processes of work to render problem solving a
standard process
Copyright © 2004 Sherif Kamel
Systems thinking
Poor SalesManagement ?
Inadequate SellingEffort ?
Poor Sales Performance ?
Out-of-Date SalesProcedures ?
Input Processing Output
Control
FeedbackIncorrect
Sales Information ?
Copyright © 2004 Sherif Kamel
Systems development cycle
Investigate Analyze Design Implement Maintain
Developing Information Systems Solutions
Copyright © 2004 Sherif Kamel
IS development
Using the systems approach to develop information systems is called SDLC
SDLC = Systems Development Life Cycle Most computer-based IS are conceived, designed, and
implemented using some form of systematic development process
End-users and information specialists design IS based on an analysis of the information requirements of an organization
Copyright © 2004 Sherif Kamel
Prototyping
Prototyping is the rapid development and testing of working models or prototypes of new applications in an interactive, iterative process that could be used by IT and business professionals
Prototypes is sometimes called Rapid Application Design (RAD)
Prototyping has enlarged the role of end-users and changed the methods of IS specialists in systems development
Copyright © 2004 Sherif Kamel
Prototyping process
Prototyping can be used to small and large organizations Prototype systems are refined until it is acceptable Prototyping is an iterative and interactive process that
combines steps of the traditional systems development cycle
Example:o One can develop, test and refine prototypes of management
reports, data entry screens or output displays.
Copyright © 2004 Sherif Kamel
Traditional systems development cycle
Systems InvestigationProduct
Feasibility Study
Systems AnalysisProduct
Functional Requirements
Systems DesignProduct
System Specifications
Systems ImplementationProduct
Operational System
Systems MaintenanceProduct
Improved System
• How to address business opportunities and priorities• Conduct a feasibility study to determine whether a new
or improved business system is a feasible solution• Develop a project management plan and obtain
management approval
• Analyze the information needs of employees, customers and other business stakeholders
• Develop the functional requirements of a system that can meet business priorities and stakeholders needs
• Develop specifications for the hardware, software, people, network, and data resources and the information products that will satisfy the functional requirements of the proposed business system
• Acquire (or develop) hardware and software• Test the system and train people to operate and use it• Convert to the new business system
• Use a post-implementation review process to monitor, evaluate, and modify the business system as needed
Understand businessProblem/opportunity
Develop an IS Solution
Implementthe IS Solution
Copyright © 2004 Sherif Kamel
How to gather information?
Interviews (open/close ended) Questionnaires Observations Examination of documents (secondary data) Development of model (testing)
Copyright © 2004 Sherif Kamel
Feasibility of IS development
OrganizationalFeasibility
EconomicFeasibility
TechnicalFeasibility
OperationalFeasibility
Copyright © 2004 Sherif Kamel
IS Benefits
Tangible benefits
Intangible benefits
Copyright © 2004 Sherif Kamel
IS development benefits - tangibles
Increase in sales or profits Decrease in information processing costs Decrease in operating costs Decrease in required investments Increase in operational efficiency
Copyright © 2004 Sherif Kamel
IS development benefits - intangibles
Improved information availability Improved abilities in analysis Improved customer service Improved employee morale Improved management decision making Improved competitive position Improved business image
Copyright © 2004 Sherif Kamel
Systems analysis
It is the study of information needs of the organization and end-users
It is also the overview of all activities, resources, and products of any present information systems
It is the information systems capabilities required to meet the information needs of all involved in the organization’s activities
Copyright © 2004 Sherif Kamel
Systems analysis cycle
Understand User Needs
Co-DevelopmentForm SystemsDevelopment Team
Final System Design
Open-ended interviewsIdentify key issues
Verify findingsWorkshops
Observations onsiteData analysis
Design Concepts
Copyright © 2004 Sherif Kamel
Systems development using prototypingIdentify an end user’s
businessrequirements
Developbusiness system
prototypes
Revise the prototypes to better meet end user requirements
Use and maintainthe accepted
business System
• Investigation/AnalysisEnd users identify their business needs and assess the feasibility of several alternative IS solutions.
PrototypeCycle
MaintenanceCycle
• Analysis/DesignEnd users and/or systems analysis use application development packages to interactively design and test prototypes of IS components that meet end user business needs
• Design/ImplementationThe business system prototypes are tested, evaluated and modified repeatedly until end users find them acceptable.
• Implementation/MaintenanceThe accepted business can be modified easily since most system documentation is stored on disk.
Copyright © 2004 Sherif Kamel
Benefits of systems development
Infrastructure management – reduce costs Customer relationship – provide service Product innovation – speed
Copyright © 2004 Sherif Kamel
Help departments do their job better with the goal to increase organizational efficiency
Implement successfully the business strategy Meeting deadlines and milestones, operating within budget, and
doing quality work Realizing marketplace goals Assessing customer relations, employee morale, customer
opinion Impact of an IT investment extends to…
o Economic performance payoffs - market measures of performance
o Organizational process impacts - process changeo Technology impacts - key functionality
How to measure systems benefits?
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