Information Technology Reference
In-Depth Information
SUMMARY
Principle
The use of information systems to add value to the
organization is strongly influenced by organizational
structure, culture, and change.
systems, and values of the organization to achieve a break-
through in results. Continuous improvement to business pro-
cesses can add value to products and services.
The extent to which technology is used throughout an
organization can be a function of technology diffusion, infu-
sion, and acceptance. Technology diffusion is a measure of
how widely technology is in place throughout an organization.
Technology infusion is the extent to which technology perme-
ates an area or department. User satisfaction with a computer
system and the information it generates depends on the qual-
ity of the system and the resulting information. The technol-
ogy acceptance model (TAM) investigates factors—such as
the perceived usefulness of the technology, the ease of use of
the technology, the quality of the information system, and the
degree to which the organization supports the use of the
information system—to predict IS usage and performance.
Total quality management consists of a collection of
approaches, tools, and techniques that fosters a commitment
to quality throughout the organization. Six Sigma is often used
in quality control. It is based on a statistical term that means
products and services will meet quality standards 99.9997
percent of the time.
Outsourcing involves contracting with outside profes-
sional services to meet specific business needs. This
approach allows the company to focus more closely on its
core business and to target its limited resources to meet
strategic goals. Downsizing involves reducing the number of
employees to reduce payroll costs; however, it can lead to
unwanted side effects.
Competitive advantage is usually embodied in either a
product or service that has the most added value to con-
sumers and that is unavailable from the competition or in an
internal system that delivers benefits to a firm not enjoyed by
its competition. A five-forces model covers factors that lead
firms to seek competitive advantage: the rivalry among exist-
ing competitors, the threat of new market entrants, the threat
of substitute products and services, the bargaining power of
buyers, and the bargaining power of suppliers. Strategies to
address these factors and to attain competitive advantage
include cost leadership, differentiation, niche strategy, alter-
ing the industry structure, creating new products and ser-
vices, improving existing product lines and services, and other
strategies.
Developing information systems that measure and con-
trol productivity is a key element for most organizations. A
useful measure of the value of an IS project is return on
investment (ROI). This measure investigates the additional
profits or benefits that are generated as a percentage of the
investment in IS technology. Total cost of ownership (TCO) can
also be a useful measure.
Organizations use information systems to support their goals.
Because information systems typically are designed to
improve productivity, organizations should devise methods
for measuring the system's impact on productivity.
An organization is a formal collection of people and other
resources established to accomplish a set of goals. The pri-
mary goal of a for-profit organization is to maximize share-
holder value. Nonprofit organizations include social groups,
religious groups, universities, and other organizations that do
not have profit as the primary goal.
Organizations are systems with inputs, transformation
mechanisms, and outputs. Value-added processes increase
the relative worth of the combined inputs on their way to
becoming final outputs of the organization. The value chain is
a series (chain) of activities that includes (1) inbound logistics,
(2) warehouse and storage, (3) production, (4) finished product
storage, (5) outbound logistics, (6) marketing and sales, and
(7) customer service.
Organizational structure refers to how organizational
subunits relate to the overall organization. Several basic
organizational structures include traditional, project, team,
and virtual. A virtual organizational structure employs indi-
viduals, groups, or complete business units in geographically
dispersed areas. These can involve people in different coun-
tries operating in different time zones and different cultures.
Organizational culture consists of the major understand-
ings and assumptions for a business, corporation, or organi-
zation. Organizational change deals with how profit and
nonprofit organizations plan for, implement, and handle
change. Change can be caused by internal or external factors.
The stages of the change model are unfreezing, moving, and
refreezing. According to the concept of organizational learn-
ing, organizations adapt to new conditions or alter practices
over time.
Principle
Because information systems are so important, busi-
nesses need to be sure that improvements or com-
pletely new systems help lower costs, increase
profits, improve service, or achieve a competitive
advantage.
Business process reengineering involves the radical redesign
of business processes, organizational structures, information
