E Commerce Ch02

1 Introduction to Information Technology
Turban, Rainer and Potter

Chapter 2 Organizations and Information Technology Support
CHAPTER 2
ORGANIZATIONS AND
INFORMATION TECHNOLOGY
SUPPORT
Learning Objectives
 Discuss major information systems concepts
such as architecture and infrastructure.
 Describe the hierarchical structure of
organizations and the corresponding
information systems.
 Define various information systems and their
evolution, and categorize specific systems.
 Describe the support provided to different
types of employees in an organization.
 Describe how information resources are
managed.
Chapter Overview
Information
Systems Evolution and IT Support at Managing
Infrastructure Organizations: Types of Different Information
and Structure and Information Organizational Technology in
Architecture Support Systems Levels Organizations
• Information • Organizational • Transaction • Managers • Which resources
Infrastructure Structure Processing • Knowledge are managed by
• Information • Corresponding Systems Workers whom?
Architecture Information • Management • Clerical • What is the role
• Traditional System Information Staff of the information
Architectures Systems systems department?
• New • Support • Who runs the ISD
Architectures Systems and to whom does
the department report?
• What are the
relationships between
ISD and end users?
Case : Burlington Coat Factory

 The Business Problem
 Burlingion is the largest retailer of coats
in the United States
 sells clothes, linens, luggage, jewelry, baby furniture
and accessories
 faces extremely strong competition
 wants to offer up to 60% off department store prices
 needs information to respond to demand
 needs to communicate and collaborate with both
store mangers and suppliers quickly and effectively
Case (continued…)
 The Solution
 a corporate computer-based communication system
 networks to a main processor
 transfers sales data by satellite technology
 executes routine transactions on the headquarters’
computer
 feeds information from the corporate databases into
spreadsheets or word processors on desktop computers
for end-user computing and decision support
The Results
 dramatic decrease in communication problems
 steady increase in sales volume and profits
Case (continued…)
What have we learned from this case??
 Characteristics of a networked corporate
information system that are usually found
in organizations
» several different information systems exist in one
organization
» some of these systems may be completely independent, but
most are interconnected
» information systems are connected by means of electronic
networks
» the information system is composed of large and small
computers and other hardware connected by different types
of networks
» many information systems use client/server architecture
Information Systems Architecture

Physical facilities, hardware, software,
databases services, and management that
support all computing resources in an
organization
Five major components of infrastructure
 computer hardware
 general-purpose software
 networks and communication facilities
 database
 information management personnel
Tells how specific computing resources are
arranged, operated, and managed
(continued …)
 Information Architecture
 a high-level map or plan of the information
requirements
 a manner in which these requirements will be satisfied
 a guide for current IT operations
 a blueprint for future IT directions
 meets the organization’s strategic business needs
 must tie together the information requirements, the
infrastructure, and the applications
 similar to the conceptual planning of a house
(continued …)
 Traditional Architectures
 mainframe environment
» processing is done by a mainframe computer - a relatively
large computer built to handle large amounts of data,
thousands of user terminals, and millions of transactions
» modern versions of this architecture : personal computers
(PCs) and network computing (NC)
 PC environment
» PCs form the hardware architecture
 distributed environment
» divides the processing work between two or more computers
» the participating computers can be all mainframe, all PCs, or
(usually) a combination of the two
(continued …)
 New Architectures
 client/server architecture
» several computers share resources and are able to
communicate with many other computers
» a client - a computer such as a PC attached to the
network, which is used to access shared network
resources
» a server - a machine that is attached to the same
network and provides clients with these services
» purpose : optimize the use of computer resources
(continued …)
 Enterprisewide Architectures
 access to data, applications, services, and real-time
flows of data in different LANs or databases
 use client/server architecture to create a cohesive,
flexible, and powerful computing environment
 provide total integration of departmental and
corporate IS resources
 increase the availability of information and
thereby maximize the value of an organization
(continued …)
 Internet-based Architectures
 based on the concepts of client/server architecture
and enterprisewide computing
 the Internet is the basis for a network connection
from the outside world to the company, as well as
with the organization’s web site
 organization’s internal private Internet (intranet) -
useful for distributing information throughout the
organization
Market
Distributors
Professional
Non-Company Associations, large
Retailers Corporate suppliers, competitors
Corporate Toy Industry
Extranet Intranet Extranet
Non-Company
Manufacturers
Toys Inc Head Quarter
Suppliers Other
Manufacturing Retail Stores
(Purchasing) Extranets
Employees
Liquidators
contractors EDI, VAN
Customers Internet Banks and other

Travel Public business partners
agency
Government
Sales peoples
and other Small
Small customers
mobile retailers
employees Small
vendors
The network organization:
How a company uses the Internet, intranet and extranet
Organizations :
Structure and IT Support
 Organizations
 the nature of organizations determines their
activities, the information support they need, and the
type of information systems they use
 profit-making business versus not-for-profit
organizations exist
 manufacture goods versus services are delivered
 can be located in one place or in several places,
some are global or multinational organizations
Organizations : Structure
 Organizational Structure
 departmental functional structure
» specialize in the delivery of a certain function
» typical departments in an organization:
» Accounting
» Finance
» Marketing and Sales
» Production or Operations Management (POM)
» Human Resources Management (HRM)
» Information Systems and Technology
Organizations : Structure
 Hierarchical Structure
Headquarters
Division A Division B Overseas

Division
Plant C Plant D Plant E Plant F

Administration
Services
(legal, etc.)
POM Accounting Marketing Finance HRM

Organizations : IT Support
 The Corresponding Information Systems

 Departmental Information Systems
 Plant Information Systems
 Divisional Information Systems
 Enterprisewide Information Systems
 Interorganizational Information Systems (IOS)
 Global Information System for an International
or Multinational Corporation
Types of Information Systems

 Transaction Processing Systems
 organizations perform routine, repetitive tasks
 a TPS supports the monitoring, collection,
storage, processing, and dissemination of the
organization’s basic business transactions
 frequently, several transaction processing
systems exist in one company
 today’s transaction processing systems are much
more sophisticated and complex
(continued …)
 Management Information Systems (MIS)
 provides periodic reports
 generates weekly and monthly summaries by
product, customer, or salesperson
 initially, MIS had an historical orientation
 today, MIS reports may include summary reports, for
the current period or for any number of previous
periods - used for monitoring, planning, and control
 functional management information systems (MIS)
» access, organize, summarize, and display information for
supporting routine decision making in the functional areas
» geared toward middle managers
(continued …)
Major Outputs of a Functional Management
Information System
OUTPUT DESCRIPTION
Statistical summaries Summaries of raw data such as daily production,
and weekly and monthly usage of electricity.
Exception reports Highlights of data items that are larger or
smaller than designated levels.
Periodic reports Statistical summaries and exception reports
provided at scheduled, regular periods.
Ad hoc reports Special, unscheduled reports provided on
demand.
Comparative analysis Performance comparison to that of competitors,
past performance, or industry standards.
Projections Advance estimates of trends in future sales,
cash flows, market share, etc.
(continued …)
 Support Systems
 office automation systems (OAS)
» word processing systems
 computer-aided design and manufacturing (CAD/CAM)
 decision support systems (DSS)
 end-user computing
 executive information systems (EIS)
 group support systems (GSS)
 Intelligent Systems
 expert systems (ES)
 artificial neural network (ANN)

(continued …)
 Integrating Systems
 various computerized systems are being
integrated to increase their functionalities
 one popular form of integrated system is
enterprise resources planning (ERP)
 ERP plans and manages all of an organization’s
resources and their use, including contacts with
business partners
The Evolution
Computer Based Information Systems
1940 Scientific, military applications
1950 Routine business applications, TPS
1960 MIS, office automation
1970 DSS, LANs
Client/server executive information system,
1980 PC’s, AI, Groupware
Integration, intelligent systems
1990 the Web, intranets, extranets, ERP software
2000 Internet, Electronic commerce, Smart systems

IT Support at Different
Organizational Levels
Strategic
Top Managers
Systems
Staff Support Knowledge Workers, Professionals
Managerial Systems Middle Managers

Operation Systems Line Managers, Operators
Office Automation and Communication Systems Clerical Staff
Information Infrastructure and TPS
The information systems support of people in organizations

Knowledge Workers
 People who create information and knowledge and integrate
it into the business
 Engineers, financial and marketing analysts, production
planners, lawyers, and accountants
 Responsible for finding or developing new knowledge for the
organization and integrating it with existing knowledge
 Act as advisors and consultants to the members of the
organization
 Act as change agents by introducing new procedures,
technologies, or processes
 60 to 80 percent of all workers are knowledge workers
 Supported by a large variety of information systems from
Internet search engines to expert systems, to computer-aided
design, and by knowledge bases
Clerical Staff
 Support managers at all levels
 Data workers - use, manipulate, or disseminate
information
 bookkeepers, secretaries who work with word
processors, electronic file clerks, and insurance
claim processors
 Supported by office automation and groupware,
including document management, workflow, e-
mail, and other personal productivity software
IT Support at Different
Organizational Levels : A Summary
Employees Detailed
System Supported Discussion in
Office automation Office workers Chapter 7, 9
Communication All employees Chapter 6, 8
Group support People working in Chapter 10
system groups
Decision support Decision makers, Chapter 10
system managers
Executive information Executives, top Chapter 10
managers
TPS Line managers and Chapter 9
employees
MIS Middle management Chapter 9
Intelligent systems Knowledge workers Chapter 11
Managing IT Resources
 IT resources are scattered throughout the organization
 Information systems have enormous strategic value
 Some IT resources change frequently. It may be rather
difficult to manage IT resources
 It is essential to manage information systems properly
 The responsibility for the management of information
resources is divided between a usually centralized
information systems department (ISD) and the end users
 Which resources are managed by whom?
 Generally speaking, ISD is responsible for corporate-level and
shared resources, and the end users are responsible for
departmental resources
Managing IT Resources (continued …)
What is the role of the information systems

department?
 Traditional major IS functions:
» Managing systems development and systems project
management
» Managing computer operations, including the computer
center
» Staffing, training, and developing IS skills
» Providing technical services
Managing IT Resources (continued …)

What is the role of the information systems
department? (continued)
 New (additional) major IS functions:
» Initiating and designing specific strategic information systems
» Infrastructure planning, development, and control
» Incorporating the Internet and electronic commerce into the business
» Managing system integration including the Internet, intranets, and extranets
» Educating the non-IS managers about IT
» Educating the IS staff about the business
» Supporting end-user computing
» Partnering with the executive level that runs the business
» Actively participating in business processes reengineering
» Proactively using business and technical knowledge to the line with
innovative ideas about IT
» Creating business alliances with vendors and IS departments in other
organizations
Managing Information Technology

 Key MIS issues in two recent time periods
Key Issues, 1994/1995 Key Issues, 1997
1. Building a responsive IT 1. Improving productivity
infrastructure
2. Facilitating and managing 2. Reducing costs
business process redesign
3. Developing and managing 3. Improving decision
distributed systems making
4. Developing and implementing 4. Enhancing customer
an information architecture relationships
5. Planning and managing 5. Developing new
communication networks strategic applications
(continued …)
 Who Runs the ISD and to whom does ISD Report?
 run by MIS Director, Manager of Computing Services,
Manager of Information Technology, or Chief Information
Officer (CIO)
 reports to
» Chief Executive officer
» Functional Vice President
» Senior vice president
» Chief knowledge officer (CKO) - the director assigned to capture and
make effective use of IT knowledge for an organization
 The executive committee provides the top-level oversight for
the organization’s information resources. It guides the IS
steering committee, which is usually chaired by the CIO.
(continued …)
 What are the relationships between the ISD and end users?
 A steering committee that represents all end users and the ISD. This
committee sets IT policies, decides on priorities, and coordinates IS
projects.
 Joint ISD/end-user project teams for planning, budgeting,
applications development, and maintenance
 ISD representation on the top corporate executive committee
 Service agreements that define computing responsibilities and
provide a framework for services rendered by the ISD to end users
 Technical and administrative support (including training) for end
users
 A conflict resolution unit established by the ISD to handle end-user
complaints quickly and resolve conflicts as soon as possible
 An information center that acts as help center to end users regarding
purchase, operations, and maintenance of hardware and software
What’s in IT for Me?

For Accounting
 Many of the transactions handled in a TPS are data that
the accounting department records and tracks
For Finance
 Financial departments often use specialized DSS for
forecasting and portfolio management
For Marketing
 Marketing uses such IT-related concepts as customer
databases, marketing decision making, sales automation,
and customer relationship management (CRM)
What’s in IT for Me? (continued …)

 For Production/Operations Management
 Organizations are competing on price, quality, time (speed), and
customer service which are enhanced and supported by IT
 For Human Resources Management
 Intranets help to disseminate relevant information throughout the
organization. Internets are used for recruiting
 For MIS
 IS management function continues to grow in strategic value
 For Non-Business
 In all organizations, IT provides essential support to all functional
areas`

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1 Introduction to Information Technology

Turban, Rainer and Potter

Case : Burlington Coat Factory

Information Systems Architecture

Customers Internet Banks and other

Division A Division B Overseas

Plant C Plant D Plant E Plant F

POM Accounting Marketing Finance HRM

 The Corresponding Information Systems

Types of Information Systems

Types of Information Systems

2000 Internet, Electronic commerce, Smart systems

Staff Support Knowledge Workers, Professionals

Managerial Systems Middle Managers

Office Automation and Communication Systems Clerical Staff

Information Infrastructure and TPS

The information systems support of people in organizations

Managing IT Resources (continued …)

What is the role of the information systems

Managing IT Resources (continued …)

Managing Information Technology

What’s in IT for Me?

What’s in IT for Me? (continued …)

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