Managing And Using Information Systems: A Strategic A 595671

Managing And Using Information Systems A Strategic Approach Sixth

Managing and Using Information Systems: A Strategic Approach – Sixth Edition Keri Pearlson, Carol Saunders, and Dennis Galletta John Wiley & Sons, Inc. Chapter 4 IT and the Design of Work American Express Opening Case • What is the “Blue Work“ program? • What was the strategic thrust behind the Blue Work program? • What are “hub,“ “club,“ “home,“ and “roam“ employees? • What is the role of technology in these arrangements? • What was the impact of Blue Work? • Have other firms found roaming employment useful? © 2016 John Wiley & Sons, Inc. Work Design Framework © 2016 John Wiley & Sons, Inc. IT Has Changed Work •IT has: •Created new types of work • Bureau of Labor Statistics: IT employment in the USA is at an all-time high • New jobs such as: • Data scientists/data miners • Social media managers • Communications managers •Enabled new ways to do traditional work •Supported new ways to manage people 5 © 2016 John Wiley & Sons, Inc.

How IT Changes Traditional Work • Changes the way work is done • Broadens skills; faster but more tasks • Sometimes IT disconnects us from the tasks • Sometimes people can perform more strategic tasks • Few staff are engaged in order entry any longer • Crowdsourcing is now possible at very low cost (M.Turk) • Changes how we communicate • More asynchronous and more irregular • Social networking has provided new opportunities for customer interaction • Collaboration allows a firm to look “big“ with new tools 6 © 2016 John Wiley & Sons, Inc. How IT Changes Traditional Work • Changes decision-making • Real-time information; more information available • Data mining can identify new insights • Ideas can be gleaned from social networks • Middle management ranks have shrunk as Leavitt/Whisler predicted • Changes collaboration • Work is now more team oriented; more collaborative • Sharing is easier than ever, using multiple methods • Crowdsourcing can now provide quick answers from tens, hundreds, or even thousands of people • We now can disconnect PLACE and TIME (Figure 4.2) © 2016 John Wiley & Sons, Inc.

7 Collaboration Technologies Matrix © 2016 John Wiley & Sons, Inc. 8 How IT Changes Traditional Work • New ways to connect • Many employees are always connected • Lines between work and play are now blurred • For many, home technologies are better than work technologies • New ways to manage people • Behavior controls – direct supervision • Outcome controls – examining outcomes not actions • Personnel controls – pick the right person for the task • The digital approach provides new opportunities at any of those three levels (Fig. 4.3) © 2016 John Wiley & Sons, Inc. 9 Changes to Supervision/Evaluations/ Compensation/Hiring © 2016 John Wiley & Sons, Inc. 10 Where Work is Done: Mobile and Virtual Work • Much work can be done anywhere, anytime • People desire the flexibility • Telecommuting = teleworking = working from home or even in a coffee shop • Mobile workers work from anywhere (often while traveling) • Remote workers = telecommuters + mobile workers • Virtual teams include remote workers as well as those in their offices, perhaps scattered geographically • Virtual teams have a life cycle (Figure 4.4) © 2016 John Wiley & Sons, Inc.

11 Key Activities in the Life Cycle of Teams © 2016 John Wiley & Sons, Inc. 12 Telecommuting: Global Status •A poll of 11,300 employees in 22 countries: 1 in 6 telecommute •When employees in 13 countries were asked if they need to be in the office to be productive: • Overall 39% said “yes“ • But specific countries differed in the “yes“ votes: • Only 7% in India, but • 56% in Japan • 57% in Germany © 2016 John Wiley & Sons, Inc. Driver Effect Shift to knowledge-based work Changing demographics and lifestyle preferences New technologies with enhanced bandwidth Web ubiquity “Green“ concerns Decouples work from any particular place Workers desire geographic and time- shifting flexibility Remotely-performed work is practical and cost-effective Can stay connected 24/7 Reduced commuting costs; real estate energy consumption; travel costs Drivers of Remote Work and Virtual Teams © 2016 John Wiley & Sons, Inc.

15 Advantages of Remote Work Potential Problems Reduced stress: better ability to meet schedules; less distraction at work Higher morale and lower absenteeism Geographic flexibility Higher personal productivity Housebound individuals can join the workforce Informal Dress Increased stress: Harder to separate work from home life Harder to evaluate performance Employee may become disconnected from company culture Telecommuters are more easily replaced by offshore workers Not suitable for all jobs or employees Security might be more difficult Some advantages and disadvantages of remote work © 2016 John Wiley & Sons, Inc. Virtual Teams •Virtual Teams: geographically and/or organizationally dispersed coworkers: • Assembled using telecommunications and IT • Aim is to accomplish an organizational task • Often must be evaluated using outcome controls •Why are they growing in popularity? • Information explosion: some specialists are far away • Enhanced bandwidths/fast connections to outsiders • Technology is available to assist collaboration • Less difficult to get relevant stakeholders together 16 © 2016 John Wiley & Sons, Inc.

Challenges Virtual Teams •Traditional Teams Communications • Multiple time zones can lead to greater efficiency but can lead to communication difficulties and coordination costs (passing work). • Non-verbal communication is difficult to convey • Same time zone. Scheduling is less difficult. • Teams may use richer communication media. Technology • Proficiency is required in several technologies. • Support for face-to-face interaction without replacing it • Skills and task-technology fit is less critical Team Diversity • Members represent different organizations and/or cultures: - Harder to establish a group identity. - Necessary to have better com. skills - More difficult to build trust, norms - Impact of deadlines not always consistent • More homogeneous members - Easier group identity - Easier to communicate 17 Challenges facing virtual teams.

Managerial Issues In Telecommuting and Mobile Work • Planning, business and support tasks must be redesigned to support mobile and remote workers • Training should be offered so all workers can understand the new work environment • Employees selected for telecommuting jobs must be self-starters 18 © 2016 John Wiley & Sons, Inc. Managing the Challenges • Communications challenges • Policies and practices must support the work arrangements • Must prepare differently for meetings • Slides and other electronic material must be shared beforehand • Soft-spoken people are difficult to hear; managers must repeat key messages • Frequent communications are helpful (hard to “overcommunicate“) • Technology challenges • Provide technology and support to remote workers • Use high quality web conferencing applications • Clarify time zones for scheduling • Information should be available for everyone (cloud storage can help) • Policies and norms about use of the technology can be important © 2016 John Wiley & Sons, Inc.

19 Managing the Challenges •Diversity challenges •Concept of time differs throughout the world • Anglo-American cultures view time as a continuum (deadlines are important; many prefer not to multitask) • Indian cultures have a cyclical view of time (deadlines are less potent; many prefer to multitask) •Team diversity might need nurturing: • Communications differences • Trust building • Group identity formation © 2016 John Wiley & Sons, Inc. 20 Gaining Acceptance For IT-induced Change • Many changes might be a major concern for employees • Changes might be resisted if they are viewed as negative impacts • Several types of resistance: • Denying that the system is up and running • Sabotage by distorting or otherwise altering inputs • Believing and/or spreading the word that the new system will not change the status quo • Refusing to use the new system (if voluntary) © 2016 John Wiley & Sons, Inc.

21 Kotter’s Model © 2016 John Wiley & Sons, Inc. 22 Chapter 5 IS and Business Transformation Sloan Valve •What was wrong with their Product Development Process? •What did Sloan do? What is NPD? •Did it help? •Are all enterprise system implementations this successful? © 2016 John Wiley & Sons, Inc. 24 © 2016 John Wiley & Sons, Inc. SILO PERSPECTIVE VERSUS BUSINESS PROCESS PERSPECTIVE 25 Silo (Functional) Perspective • Specialized functions (sales, accounting, production, etc. • Advantages: • Allows optimization of expertise. • Group like functions together for transfer of knowledge. • Disadvantages: • Sub-optimization (reinvent wheel; gaps in communication; bureaucracy) • Tend to lose sight of overall organizational objectives.

Executive Offices CEO President Operations Marketing Accounting Finance Administration © 2016 John Wiley & Sons, Inc. 26 The Process Perspective • Examples of processes: • Fulfill customer orders • Manufacturing, planning, execution • Procurement (see below) • Processes have: • Beginning and an end • Inputs and outputs • A process to convert inputs into outputs • Metrics to measure effectiveness • They cross functions Receive Requirement for Goods/Services Create and Send Purchase Order Receive Goods Verify Invoice Pay Vendor © 2016 John Wiley & Sons, Inc. 27 Cross-Functional Nature of Business Processes © 2016 John Wiley & Sons, Inc. 28 How to Manage a Process • Identify the customers of processes (who receives the output?) • Identify the customers’ requirements (how do we judge success?) • Clarify the value each process adds to the organizational goals • Share this perspective so the organization itself becomes more process focused © 2016 John Wiley & Sons, Inc.

29 Comparison of Silo Perspective and Business Process Perspective Silo Perspective Business Process Perspective Definition Self-contained functional units such as marketing, operations, finance Interrelated, sequential set of activities and tasks that turns inputs into outputs Focus Functional Cross-functional Goal Accomplishment Optimizes on functional goals, which might be suboptimal for the organization Optimizes on organizational goals, or the “big picture“ Benefits Highlighting and developing core competencies; functional efficiencies Avoiding work duplication and cross-functional communication gaps; organizational effectiveness Problems Redundancy of information throughout the organization; cross-functional inefficiencies; communication problems Difficult to find knowledgeable generalists; sophisticated software is needed What do you do when things change? •Dynamic and agile processes •Examples: • Agile: Autos are built with wires and space for options • Dynamic: Call centers route incoming or even outgoing calls to available locations and agents • Software defined architectures (see chapter 6) •IT is required to pull this off well © 2016 John Wiley & Sons, Inc.

31 Techniques to Transform a Static Process •Radical process redesign • Also known as business process reengineering •Incremental, continuous process improvement • Including total quality management (TQM) and Six Sigma © 2016 John Wiley & Sons, Inc. 32 Incremental Change • Total Quality Management • Often results in favorable reactions from personnel • Improvements are owned and controlled • Less threatening change • Six-Sigma is one popular approach to TQM • Developed at Motorola • Institutionalized at GE for “near-perfect products“ • Generally regarded as 3.4 defects per million opportunities for defect (6 std dev from mean) Time Improve- ment © 2016 John Wiley & Sons, Inc. 33 Radical Change • Business Process Reengineering (BPR) • Sets aggressive improvement goals. • Goal is to make a rapid, breakthrough impact on key metrics in a short amount of time. • Greater resistance by personnel. • Use only when radical change is needed.

Time Improve- ment © 2016 John Wiley & Sons, Inc. 34 Comparing the Two Improve- ment © 2016 John Wiley & Sons, Inc. 35 Key Aspects of Radical Change Approaches • Need for quick, major change • Thinking from a cross-functional process perspective • Challenge to old assumptions • Networked (cross-functional organization) • Empowerment of individuals in the process • Measurement of success via metrics tied to business goals and effectiveness of new processes © 2016 John Wiley & Sons, Inc. 36 Workflow and Mapping Processes • Workflow diagrams show a picture of the sequence and detail of each process step • Objective is to understand and communicate the dimensions of the process • Over 200 products are available to do this • High-level overview chart plus detailed flow diagram of the process © 2016 John Wiley & Sons, Inc. 37 BPM • Information systems tools used to enable information flow within and between processes. • Comprehensive, enterprise software packages. • Most frequently discussed: • ERP (Enterprise Resource Planning), • CRM (Customer Relationship Management), • SCM (Supply Chain Management) • Designed to manage the potentially hundreds of systems throughout a large organization. • SAP, Oracle, Peoplesoft are the most widely used ERP software packages in large organizations. © 2016 John Wiley & Sons, Inc. 38 BPM Architecture © 2016 John Wiley & Sons, Inc. 39 Standardization vs Integration Business Process Standardization Low High Bu si ne ss P ro ce ss In te gr at io n High Single face to customers and suppliers but standards not enforced internally High needs for reliability, predictability, and sharing; single view of process Low Decentralized design; business units decide how to meet customer needs Tasks are done the same way across units, but there is little need for business units to interact Source: J.

Ross “Forget Strategy: Focus IT on your Operating Model,“ MIT Center for Information Systems Research Briefing (December 2005) © 2016 John Wiley & Sons, Inc. 40 Enterprise Systems (Enterprise Resource Planning or ERP) • Seamlessly integrate information flows throughout the company. • Reflect industry “best“ practices. • Need to be integrated with existing hardware, OSs, databases, and telecommunications. • Some assembly (customization) is required • The systems evolve to fit the needs of the diverse marketplace. © 2016 John Wiley & Sons, Inc. 41 ERP Advantages and Disadvantages Advantages Disadvantages • Represent “best practices“ • Modules throughout the organization communicate with each other • Enable centralized decision-making • Eliminate redundant data entry • Enable standardized procedures in different locations • Enormous amount of work • Require redesign of business practices for maximum benefit • Require customization if special features are needed • Very high cost • Sold as a suite, not individual modules • Requires extensive training • High risk of failure © 2016 John Wiley & Sons, Inc. 42 ERP II • Makes information available to external stakeholders too • Enables e-business applications • Integrates into the cloud • Includes ERP plus other functions (see Figure 5.8) © 2016 John Wiley & Sons, Inc. 43 ERP and ERP II Functions © 2016 John Wiley & Sons, Inc. 44 Customer Relationship Management • Customer Relationship Management (CRM) is a natural extension of applying the value chain model to customers. • CRM includes many management activities performed to • obtain, • enhance relationships with, and • retain customers. • CRM can lead to better customer service, which leads to a competitive advantage for the business. 45 © 2016 John Wiley & Sons, Inc. CRM •Common systems are: • Oracle • SAP • Salesforce.com (web-based cloud system) •Oracle and SAP integrate into their ERP systems © 2016 John Wiley & Sons, Inc.

Supply Chain Management (SCM) • An enterprise system that manages the integrated supply chain • Translation: processes are linked across companies • The single network optimizes costs and opportunities for all companies in the supply chain • Every part of the supply chain has the latest information about sales expected and inventories from source materials at all stages • Bullwhip effect occurs when the supplier at each stage adds a small “buffer“ for it’s suppliers in case demand is higher than expected © 2016 John Wiley & Sons, Inc. 47 Difficulties in Integrated Supply Chains • Information integration requires agreement of what information to share, how to share it, and the authority to view it. • Trust must be established • Planning must be synchronized carefully • Workflow must be coordinated between partners to determine what to do with the information they obtain © 2016 John Wiley & Sons, Inc. 48 Advantages and Disadvantages of Enterprise Systems © 2016 John Wiley & Sons, Inc. 49 The Adoption Decision • The enterprise system sometimes should drive business process redesign when: • Just starting out. • Organizational processes are not relied upon for strategic advantage. • Current systems are in crisis. • It is inappropriate for the enterprise system to drive business process redesign when: • Changing an organization’s processes that are relied upon for strategic advantage. • The package does not fit the organization. • There is a lack of top management support. © 2016 John Wiley & Sons, Inc. 50 That’s a wrap! Dr. Les Stovall [email protected] © 2016 John Wiley & Sons, Inc.