Information Systems: Definitions, Models, and Organizational Strategies

Sommario

1. Definitions
2. High level models.
3. Low level models
4. Low level models - process
5. Low level models - data
6. Low level models - organization
7. Low level models - Business rules
8. Low level models - Technology
9. Organizations
10. Strategy
11. KPI CSF BSC
12. IS
13. COBIT
14. ES - ERP - CRM
15. CRM
16. IT Economics
17. Transaction theory
18. Agency theory.
19. Decision theory
20. Value of IT in an organization
21. IT Governance
22. Outsourcing
23. Product functions.
24. Change management.

Definitions

Organization: a group of people that accomplish a set of goals (enterprise, army, church .... )

• Managing resources

. Implementing business processes

• Work for profit

Business process: set of activities
Written by: Dario Marchitelli
1
13· Executed in a certain order (parallel or sequential)
· Performed by an organization
· Deliver a service/product
. Has defined inputs and outputs

Activity: time spent by people doing a task part of a business process

Business function: group of people/resources performing similar activities in an organization
(sales, marketing, HR ... )

Application: software that supports an activity/process

Software function: function offered by an application to support an activity or part of it

Application portfolio: set of applications used by an organization
Often a business process can require software functions from many
applications, and a function can be required from many business
processes. So, it is a many-to-many relationship.

Business Process Relationships

Business process
Accounting
Purchase
Warehouse
applications

Legacy: is an older software that in same way is difficult or expensive to replace and we need to
deal with it.

Information system: a formal, sociotechnical, organizational system designed to collect, process,
store and distribute information.

Information System Components

Social System
. Formal: built and managed with a goal for the organization
. Sociotechnical: involves the social system (structure and people) with the
technical system (technology and process) that interact with each other
Technical System
Structure
Technology
People
Process

Technology: computers, networks, applications

People: individuals involved into the IS:

• End users
  . Managers
  · IT professionals

An understanding of the people involved is important when designing, implementing, and
troubleshooting an IS.

Structure: implicit or explicit rules that govern relationships between the people involved in the IS

• Hierarchy
  · Communication lines
  · Reward mechanisms
  · Functions, divisions

Hidden or missing communication lines or user resistance often causes IS failure.

IS success: the IS supports the organization goals fulfilling its needs about information processing
and supporting efficiency and effectiveness.
Written by: Dario Marchitelli
2

IS failure: the IS is never completed, is never used, abandoned, or is working against the
organization goals.

IS Outcomes

IS outcomes:

• On people:
  o
  Positive: empowering employees and widening the scope of their responsibilities
  o
  Negative: deskilling, loss of responsibility, and the creation of a monotonous
  working environment
  . On the organization and its future opportunities

The four components of an IS are interdependent, changes in one component
may affect other components and, if not properly managed, also its outputs.
Considering only the technology dimension can cause lack of understanding of
systemic relationship and lack of considering information outside the technology
component.

IS Components Interaction

Social System
Technical System
Structure
Technology
People
Process

To adapt to the changing environment an organization (and its IS) need to evolve, there are three
levels of organizational change:

• First-Order Change: Automate
  A First-Order change only infect the technical system, it occurs with the
  introduction of an IT innovation that modifies how an existing process is
  performed and it's the easiest to envision, justify and manage.
  . Second-Order Change: Informate
  A Second-Order change affect the people, it modify the way individuals
  perform processes and the manner in which they interact with the
  technology change.
  It occurs when the information intensity of the process being performed
  changes substantially due to the introduction of new IT.
  To manage such a change the organization need to provide appropriate
  training and overcome the human tendency to resist change.
  . Third-Order Change: Transform
  A Third-Order change affect the structure:
  o
  Technology: a change in the way the organization selects, uses and
  manages technology
  o People: a change in the reporting and authority structure of the
  organization
  o
  Process: a novel way of task accomplishment or a new set of task
  Managing it requires significant managerial and executive involvement.

Organizational Change Levels

Social System
Technical System
Structure
Technology
People
Process

Social System
Technical System
Structure
Technology
People
Process

Social System
Technical System
Structure
> Technology
People
Process

The technical system is made of several applications that read/write on several databases that
contains master data (list of entities: products, customers, suppliers) and transactional data (sales,
invoices). This interconnections generates the integration problem related to data or applications
that need to cooperate.
Written by: Dario Marchitelli
3

IS Time Dimension

The 5th dimension for IS is time, year by year the tecnology trends and
devices evolve, when this happens people often show a certain
resistance to change. Technology innovations have a cost and have a
certain learning curve that usually is different from the expected.
Learning Curve Graph
100
Didi do that!
But I keep
Now i get it
This actualy
makes sense.
doing it.
25
.
100
Learning Efforts (# Attempts)
Time

There are different issues when dealing with time:

• Application portfolio: in big organizations is quite difficult to make a census of present
  applications with their goals, the AP knowledge helps to evaluate the IS and define
  acquisitions/changes of applications
  . Integration of data and applications
  . Legacy software: when the IS is too old it can happen that the development environment,
  the documentation, the source code or the vendor are unavailable, this can lead to
  expensive and risky substitutions.

[FACTORY + WAREHOUSE EXAMPLE]
An IS is needed to:

• Transfer information (real time)
  · Document (past and present):
  o
  All the steps must be recorded answering the questions who, what, when and also
  why because we need to understand more when something goes wrong
  · Monitor (past and present): summary data for the Management Control Loop (managers)
  o
  Documentation of the flow: instructions for the activities to be performed

When we create an IS the technology must be decided after analyzing the process:

• Flow: list of activities to be performed when something happens
  . Data: entities and events that we need to record into the IS
  · Business rules

When choosing the technology we have two choises:

• Use a different application for each piece of structure (production, warehouse, purchase
  office, accounting ... )
  . Use one overall db with a single application that has all the functions needed

In the example analyzed the information flow is parallel to a physical flow, in other cases there's
no physical flow at all (bank, insurance).

IT Dimension

The IT dimension has two main parts:

• Application Model: describes the software architecture and the software programs:
  o
  Presentation Layer: an IS communicates with the user through a GUI and different
  inputs.
  This layer can change a lot without touching the
  Presentation Layer
  business process.
  Application Model
  Business Rules Layer
  Data Layer
  o
  Business Rules Layer: represent the logic driving
  the processing of data entered in the IS through
  the Presentation layer.
  Processing Architecture
  Server
  Network Architecture
  Lan, Man, Wan
  Written by: Dario Marchitelli
  4
  Client
  Technological Model
  Experience
  I don't know stmgIf the process changes surely this layer changes while the data layer remains stable.
  Can be defined using the code or with Drools
  Data Layer: database
  o
  . Technological Model: describes the hardware architecture.
  The typical architecture that is always assumed is 3-tiers and client-
  server but can also have only two tiers (fat to thin client).

Typical IT Architecture

Client
Web
Server
Application
Server
Data Server

A processing architecture must satisfy a few basic quality requirements:

• Response time: the interval between the request and the display of the response
  . Scalability: the work load a system is able to sostain
  · Availability: percentage of time the system is working

High level models

Control Loop Model

The control loop model has 4 parts:

• Input: the capture or collection of raw data from within the organization and its external
  environment for processing in an information system
  . Output: The distribution of processed information to the people and the activities that will
  use it
  . Process: the conversion, manipulation and analysis of
  raw input into a more meaningful form
  . Feedback: the output is used to evaluate and correct
  the inputs

Control Loop and Environment

This model gives a view of the context and the environment,
organizations (and the related IS) are influenced with 5 types
of actors:

• Customers
  · Suppliers
  · Stakeholder
  · Competitors
  · Regulatory agencies (including law system)

ENVIRONMENT
Customers
Suppliers
ORGANIZATION
INFORMATION SYSTEM
INPUT
PROCESS
OUTPUT
FEEDBACK
Regulatory
Agencies
Stakeholders
Competitors

CRASO Model

The CRASO (Customer Request Activity organisation
Output) model shows the activities, the actors doing
activities and the assets treated by them.
The customer is always the start and the end of the loop.
The CRASO model can be:
Customer
Activity 1
Activity 2
Request
Activity 4
for a
Activity 3
Output
(products
and
services)
Service
or
product
Organization 1
Organization 2
Organization 3
Written by: Dario Marchitelli
5

CRASO Model Types

Mono-
organizational:
involves only one
organization
Mono-functional:
involves only one
business function
(exceptional case)
Corporate Dpts
Finance Dpt
Informa
tior
request
Collect data
Publish
report
Report
Analyze data
Business
Process
Management
reporting
Customer
Request
Activities performed
(summary)
Organizations involved
(summary)
Output
(summary)
Report
Inter-functional:
involves many
business functions
in the same
organization that
can have differend
SI and DB
Corporate Dpt
Supplier Order Dpt
Supplier
Shipment
Order-entry
Supply-
order
Supply/
delivery
Supply
delivered
Order-fulfilment
Business Process
Customer
Request
Activities performed
(summary)
Organizations Involved
(summary)
Output (summary)
Production Planning
Sales-dpt
Production-request
Assemble-production-plan,
Give-information,
Negotiate and execute the plan
Production planning-dpt, Materials-
management-dpt,
Factories
Approved
production plan
Service Famil
no MSin University of
d
Inter-organizational: involves many
organizations

Anthony's Pyramid Model

The Anthony's model (pyramid model) mixes the hierarchical levels into the
organization and the business functions putting them into a pyramid, where
at each intersection different IS functions are needed.
The organizational level is represented by horizontal strips (example for a
retail company):

• Operational level: composed by the employees that work day by day
  and with repetitive activities.
  (Implement a sale, replenish products on shelves)
  . Knowledge level: composed by knowledge and data workers that
  design new products/services on the present/future time frame (the
  number of emplyees depends on the complexity of the
  product/service). This level is present only in organizations that need
  designing.
  . Management level: composed by middle managers that control and
  plan the activities of the operational level, working on the near future time frame (limited
  number of employees).
  (review of sales, monitor emplyees)

Organizational Levels and Business Functions

Organizational level
STRATEGIC LEVEL
MANAGEMENT LEY
KNOWLEDGE LEVEL
OPERATIONAL LEVEL
SALES &
MARKETING
MANUFACTURING FINANCE
ACCOUNTING HUMAN
RESOURCES
Business functions

IS Group Served by Organizational Level

Organizational level
Group served by IS
STRATEGIC LEVEL
SENIOR
MANAGERS
MANAGEMENT LEVEL
MIDDLE
MANAGERS
KNOWLEDGE LEVEL
KNOWLEDGE &
DATA WORKERS
OPERATIONAL
LEVEL
OPERATIONAL LEVEL
MANAGERS
Amazon
front-end
Bookshops
Logistic
services
Pick
Deliver
Request
Output
Process
orders
Customer
Request
Activities performed (summaryganizations Involved (summaryDutput (summary)
Book order
Processorder,
Orderpicking.
Book-delivery
Front-end,
Bookshop,
Logistic services
Delivery of books
Private customer
Corporate
Departments
Information
request
Data-collection
Data-analysis
Report-publication
Finance
Customer
Written by: Dario Marchitelli
6