IT Lecture 3

A stable, formal, social structure that takes inputs from the environment and processes them to produce outputs

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Organizations that cannot adapt fail

• Porter
• Divides activities into 2 categories - Primary activities are directly related to production and distribution. Support activities make the delivery of a firm's activities possible

• To decide where to invest the company's resources, IT and otherwise
• IT uses it to see the strategy of the firm and make it the strategy of IT

Network of organizations and business processes for production and distribution of products

• To create integrations or tight process and information linkages between functions within a firm
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• Reduce transaction costs: search, negotiation, and enforcement costs
• Reduce agency costs: IT makes it easier and cheaper to make a decision
• Improve collaboration
• Facilitate new organizational strategies: helps in all five of Porter's forces

• Systems by level
• Systems across all levels
• System by functional area
• Integrating levels and functions

• Operational: elementary activities and transactions: TPS
• Tactical - Knowledge workers: systems support knowledge and data workers: OAS/KWS
• Tactical - Middle managers: systems support monitoring, controlling, decision-making, and administrative activities: MIS/DSS/GDSS
• Strategic: long range planning: EIS

• Transaction processing systems
• Input: transactions
• Processing: sorting, listing, merging, updating
• Output: detailed reports, lists, summaries
• Users: Operations personnel, supervisors
• Ex: accounts payable and receivable, order tracking and processing, payroll

• Office automation systems
• Computer systems that are designed to increase the productivity of data workers in the office
• Users: clerical workers
• Ex: word processing, desktop publishing, document imaging systems

• Knowledge based(work) systems
• Captures the expertise of human beings: ES - expert system - used for limited domains of knowledge, KMS - knowledge management system
• Some companies use AI and neural networks so that the systems learn from their history

• Management Information Systems
• Provide reports and access to company data
• Input: high volume data
• Processing: routine reports, simple models, low-level analysis
• Output: Summary and exception reports
• Users: middle managers

• Decision Support Systems
• Combine data and analytic models to support nonroutine decision making for individuals
• Use input from TPS data plus external sources
• Users: Professionals, staff managers
• Input: data, analytic models, data analysis tools
• Processing: interactive, simulations, analysis
• Output: special reports, decision analyses, responses to queries

• Group Decision Support System
• Facilitates the solution to unstructured problems for decision makers working in a group
• AKA collaboration system
• Uses software tools called groupware to help it arrive at a decision: questionnaire/voting software, electronic brainstorming tools, idea organizer, electronic meeting system

• Users: DSS - individuals; GDSS - groups
• Objective of use: DSS - build models using data; GDSS: facilitate interaction between individuals
• Effectiveness: DSS - depends on how well the tool is built by designers; GDSS: depends on facilitators, tools selected, participants

• Executive Support System
• Address nonroutine decision making
• Incorporate data from TPS, MIS, DSS and external sources
• Users: senior managers
• Input: external and internal aggregate data
• Processing: graphics, simulations, interactive
• Output: projections, responses to queries

• Interorganizational System
• Automates the flow of information between organizations to support the planning, design, development, production, and delivery of products and services
• Ex. extranet

• Private intranet that is accessible to authorized outsiders
• Used to coordinate value chains between organizations to collectively produce a product or service - more customer driven, less linear, flexible

• Build their own patches
• Use enterprise systems, or firm-wide information systems that integrate key business processes so that information can flow freely between parts of the firm
• Known as ERP: enterprise resource planning

• Enterprise Resource Planning
• Automate business processes
• Integrates all aspects of the firm
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• Creation of one unified organization
• Automation of manually-intensive processes
• Better reporting and decision making
• Unified technology platform
• More efficient company and customer driven business