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The Evolving Role of Information Systems
and Technology in Organizations:
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2
Introduction
IT is an accepted and epected tool for
supporting !usiness
IS"IT source of #ompetitive Advantage
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,
IS and IT: the same or different-
IS . IT/
IT )information technology+ or I#TRefers to technology )01' S1' telcom n"&or(s+/
Tangi!le )eg servers' P#s' routers' ca!les+' andIntangi!le )eg soft&are+
IS )information systems+roader' has eisted long !efore IT' may even not
include technologyPeople and organizations use IT to gather' process'
store' use and disseminate information
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3
A 4efinition of IS )4avis' 5666+
Eplained in terms of its various elements and in termsof the various organizational contet :A system in the organization that delivers information and
communication services needed !y the organization/ #onsists of IT infrastructure' applications systems' and
personnel that employ IT to deliver information andcommunication services for transaction processing"operationsand admin"mgmt of an organization/ the system utilizescomputers 7 communication 01"S1' manual procedures' andinternal and eternal repositories of data/ the systems apply acom!ination of automation' human actions and user*machine
interactions/4eals &ith the nature of 4ata' Information and
8no&ledge
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4ata' Information and 8no&ledge
Data:
representations of events' people' resources or
conditions Information:
result of processing data/
Knowledge:
information organized and processed to conveyunderstanding' eperience' accumulated learning'
and epertise/
provides !asis for action/
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1hy organizations fail to realize !enefits
from investments in IT
Investments made only in technology/
>ot understanding or analyzing nature of
activities the technology is to support ?strategically or operationally ? in the
organization/
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5B
0o& should the Internet !e vie&ed-
As an ena!ling technology ? a po&erful set of
tools that can !e used in almost any industry
and as part of almost any strategy/
Internet is not the !usiness strategy/
Interactive' a ne& medium ? the mar(et space/
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Early Cie&s and @odels of IS"IT in
Organisation )5"2+
Early 563Bs: use of computers in !usiness@id to late 569Bs: use !ecame more
significant &ith the development of multi*purpose mainframe computers
Datch processing of tas(s and activities inorganizations !ecame possi!le throughIncrease in processing speed
#heaper memory
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Early vie&s and models of IS"IT in
Organisation )2"2+
56Bs: @inicomputers used for a variety of
!usiness applications
ut IS"IT still vie&ed as a centralized'integrated concept derived from mainframe
;i!son and >olan )56,+ modeled evolution
of IS"IT in an organization' !ased on
Anthonys )5693+ hierarchical applicationportfolio model
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5$
Anthonys )5693+ hierarchical
application portfolio model
Structure of information system in an
organization is !ased on a stratification of
management activity into different levels:Strategic planning
@anagement control
Operational control
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Si Aspects"enchmar(s of IS"IT and its
@anagement used in the Analysis
The rate of IS"IT ependiture
The technological configuration
The applications portfolio
The 4ata Processing )4P+ or IT organization
4P"IT planning and control approaches
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5=
Stage of evolution of IS"IT in relation to
ependiture )>olan' 566+
Integration:considera!le ependiture on integrating )via
data!ase+ eisting systems
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#ritiHue of the >olan 9 Stage @odel
1ea( and inconclusive empirical support/enchmar(s did not map consistently on to the
stages/
Too simple to reflect compleity of real &orld/Assumptions made too simplistic to !e useful/Provide little help for #IO to create successful IS
unit in an organization/
4etail of each phase pro!lematic/ET' very popular and influential' !ecause of itssimplicity
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2B
Era of 4P @anagement
@ain concern is on managing the activities)operations' programming' data collection+/
Set up a separate organizational unit )4P dept+ for avariety of types of application' over an etended life
cycle/The dept managed as a coordinated set of
resources planned to meet future reHuirements/
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Three*stage @odel of Transition from 4P
@anagement to IS @anagement)0irschheim et al., 56==+
Delivery Stage: IS issues mainly internal' ie improve a!ilityto deliver and support the IS"IT/ main o!Gective is achievingtop*mgmt credi!ility ie improving delivery performance' vsprovide &hat is needed/
Reorientation Stage: esta!lish good r"ships &ith main!usiness ftns' support !usiness demands through provisionof a variety of IS services/ issues focus etended to outsidethe 4P dept/ (ey o!G is to provide valued service to all!usiness ftns mgmt/ different areas !enefit differently&ithout regard to !usiness importance/
Reorganization Stage: Reorganization of responsi!ilitiesto achieve integration of IS investment &ith !usinessstrategy and across !usiness ftns/ (ey o!G is !est &ay tosatisfy each differing !usiness needs through coalition ofresponsi!ilities for managing IS"IT/
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2,
4P Era )9Bs on&ards+ vs @IS Era )Bs on&ards+
DP Era MIS Era
Obe!tive Efficient transactionhandling and effectiveresource control
Effective pro!lemresolution and support fordecision ma(ing
"ife !y!le $*52 years' depending onrate of change
%rom hours to months andoccasionally recurring
Information time frame Recent history' currentand short*term future
#onsolidated history'current and etendedfuture
Information so#r!e Internal plus eternaltransaction
Internal plus eternal
JresearchK data
"ogi!al pro!esses #ser Strictly algorithmicoperators' clerical staffand first line supervisor
Professionals and middleto senior managers
$e!%nology @ainframe"mini*computercontrolled processing at&or(stations
Focal processing lin(ed toinformation resources
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f
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,B
TPE $: Information !ased product
and service
To achieve advantages reHuire a thorough(no&ledge of product of the industry
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,2
Success %actor in SIS )5"+
Eternal not internal focusFoo(ing at customers' competitors' suppliers'
other industries' !usinesss relationship andsimilarities &ith the outside !usiness &orld
Traditionally IS"IT has !een focus on internal
processes and issues
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3B
&n &ppli!ation Portfolio for t%e (Combined Era) *adapted
from M!+arlan,s Strategi! -rid. /0123 w%i!% represents
!ontrib#tion of IS4I$ to t%e b#siness now and in t%e f#t#re
based on its ind#stry impa!t
STRATEGIC
a##$ications
(!ic! are critica$to sustaining
)uture businessstrategy
%IG%*OTENTIA+a##$ications
(!ic! are critica$to sustaining
)uture businessstrategy
A##$ication on(!ic! t!e
organisationcurrent$y
e#ens )orsuccess,EY
O*ERATIONA+S-**ORT
A##$ication (!ic!are va$uab$e but
not critica$ tosuccess
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1hat is an IS Strategy-
IS"IT strategy composed of IS component
IT component
4efines the organizations reHuirement or demand for
information and systems to support the overall strategyof the !usiness/
%irmly grounded in the !usiness' considers !othcompetitive impact and alignment reHuirements of IS"IT/
4efines and prioritizes reH investments to achieve idealportfolio' epected !enefits' reH changes' &ithinconstraints of resources and systems interdependencies/
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3$
1hat is an IS Strategy-
IS component4efines the organizations reHuirement or demand for
information and systems to support the overall strategy
of the !usiness/
%irmly grounded in the !usiness' considers !oth
competitive impact and alignment reHuirements of IS"IT/
4efines and prioritizes reH investments to achieve ideal
portfolio' epected !enefits' reH changes' &ithin
constraints of resources and systemsinterdependencies/
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52 # t f Ali t )F ft
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52 #omponents of Alignment )Fuftman'
2BBB+
usiness Strategy usiness Scope 4istinctive #ompetencies usiness ;overnance
Organizational Infrastructure 7 ProcessesAdministrative Structure Processes S(ills
IT Strategy Technology Scope System #ompetencies
IT governance IS Infrastructure and Processes
Architecture Processes S(ills
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