MIS Session 6

SESSION 6 Reading Chapter 13 & 14

Session Outline

How new systems produce organizational change.

The objectives of project management and why is it so essential

Systems as Planned Organizational Change

Four kinds of structural organizational change enabled by IT

1. Automation Increase efficiency, replace manual tasks

2. Rationalization Streamline standard operating procedures

3. Business process reengineering (BPR) Analyze, simplify, and redesign business processes

4. Paradigm shifts Rethink nature of business, define new business model,

change nature of organization


Business process reengineering (BPR)

Large payoffs can result from redesigning business processes

Home mortgage industry used IT to redesign mortgage application process

BEFORE: 6- to 8-week process costing $3000

AFTER: 1-week process costing $1000

Replaced sequential tasks with “work cell” or team approach

Work flow management: Process of streamlining business procedures so documents can be moved easily and efficiently


Steps in effective reengineering

Determine which business processes should be improved

Must avoid becoming good at the wrong process

Understand how improving the right processes will help the firm execute its business strategy

Understand and measure performance of existing processes as a baseline

Even with effective BPR, majority of reengineering projects do not achieve breakthrough gains because of inadequate change management


Business process management (BPM)

Helps firms manage incremental process changes

Uses process-mapping tools to:

Identify and document existing processes

Create models of improved processes that can be translated into software systems

Measure impact of process changes on key business performance indicators


Business process management (cont.) Includes:

Work flow management Business process modeling notation Quality measurement and management Change management Tools for standardizing business processes so they

can be continually manipulated Process monitoring and analytics

To verify process performance has improved and measure impact of process changes on key business performance indicators


Quality management: Fine-tuning business processes to improve

quality in their products, services, and operations

The earlier in the business cycle a problem is eliminated, the less it costs the company

Quality improvements raise level of product and service quality as well as lower costs


Total Quality Management (TQM):

Achievement of quality control is end in itself

Everyone is expected to contribute to improvement of quality

Focuses on continuous improvements rather than dramatic bursts of change

Six sigma:

Specific measure of quality

3.4 defects per million opportunities

Uses statistical analysis tools to detect flaws in the execution of an existing process and make minor adjustments


Information systems support quality improvements by helping firms: Simplify products or processes Make improvements based on customer

demands Reduce cycle time Improve quality and precision of design and

production Meet benchmarking standards

Benchmarking: Setting strict standards for products, services, and other activities, and then measuring performance against those standards

Managing Projects

• Project management• Activities include planning work, assessing risk,

estimating resources required, organizing the work, assigning tasks, controlling project execution, reporting progress, analyzing results

• Five major variables

• Scope

• Time

• Cost

• Quality

• Risk

Managing Project Risk

• Very high failure rate among enterprise application and BPR projects (up to 70% for BPR)

• Poor implementation and change management practices

• Employee’s concerns about change

• Resistance by key managers

• Changing job functions, career paths, recruitment practices

• Mergers and acquisitions• Similarly high failure rate of integration projects

• Merging of systems of two companies requires:

• Considerable organizational change

• Complex systems projects


• Controlling risk factors• First step in managing project risk involves identifying nature

and level of risk of project

• Each project can then be managed with tools and risk-management approaches geared to level of risk

• Managing technical complexity

• Internal integration tools

• Project leaders with technical and administrative experience

• Highly experienced team members

• Frequent team meetings

• Securing of technical experience outside firm if necessary


• Formal planning and control tools• Document and monitor project plans

• Help identify bottlenecks and determine impact of problems on project completion times

• Chart progress of project against budgets and target dates

• Gantt chart• Lists project activities and corresponding start and completion dates

• Visual representation of timing of tasks and resources required

• PERT chart• Portrays project as network diagram

• Nodes represent tasks

• Arrows depict task dependencies

A Gantt Chart

A Gantt Chart

A Gantt Chart

A PERT Chart


• Increasing user involvement and overcoming user resistance• External integration tools consist of ways to link work of

implementation team to users at all organizational levels

• Active involvement of users

• Implementation team’s responsiveness to users

• User resistance to organizational change• Users may believe change is detrimental to their interests


• Strategies to overcome user resistance

• User participation

• User education and training

• Management edicts and policies

• Incentives for cooperation

• Improvement of end-user interface

• Resolution of organizational problems prior to introduction of new system


An HP Laptop’s Path to Market

Managing Global Project Risk

• Strategy when building international systems

1. Understand global environment

• Business drivers pushing your industry toward global competition

• Inhibitors creating management challenges

2. Develop corporate strategy for competition

• How firm should respond to global competition

3. Develop organization structure and division of labor

• Where will production, marketing, sales, etc., be located

4. Consider management issues

• Design of business procedures, reengineering, managing change

5. Consider technology platform


• Challenges and obstacles to global business systems• General cultural challenges

• Cultural particularism

• Regionalism, nationalism, language differences

• Social expectations:

• Brand-name expectations, work hours

• Political laws

• Transborder data flow

• Transborder data and privacy laws, commercial regulations


• Challenges and obstacles to global business systems (cont.)

• Specific challenges

• Standards

• Different EDI, e-mail, telecommunication standards

• Reliability

• Phone networks not uniformly reliable

• Speed

• Different data transfer speeds.

• Personnel

• Shortages of skilled consultants


• Global strategies and business organization• Three main kinds of organizational structure

• Centralized: In the home country

• Decentralized/dispersed: To local foreign units

• Coordinated: All units participate as equals

• Four main global strategies

• Domestic exporter

• Multinational

• Franchisers

• Transnational


BUSINESS FUNCTION

DOMESTIC EXPORTER

MULTINATIONAL FRANCHISER TRANSNATIONAL

Production Centralized Dispersed Coordinated Coordinated

Finance/Accounting

Centralized Centralized Centralized Coordinated

Sales/Marketing

Mixed Dispersed Coordinated Coordinated

Human Resources

Centralized Centralized Coordinated Coordinated

Strategic Management

Centralized Centralized Centralized Coordinated


• Project management software• Can automate many aspects of project management

• Capabilities for• Defining, ordering, editing tasks

• Assigning resources to tasks

• Tracking progress

• Microsoft Project• Most widely used project management software

• PERT, Gantt charts

• Critical path analysis

• Product Guide wizards

• Enterprise Project Management Solution version

MIS Session 6

Technology