Managing Information Systems: Ten Essential Topics PDF
Preview Managing Information Systems: Ten Essential Topics
Managing Information Systems: Ten Essential Topics Jun Xu SouthernCrossBusinessSchool,SouthernCrossUniversity GoldCoast,Australia Mohammed Quaddus GraduateSchoolofBusiness,CurtinUniversity Perth,Australia AMSTERDAM–PARIS–BEIJING AtlantisPress 8,squaredesBouleaux 75019Paris,France ForinformationonallAtlantisPresspublications,visitourwebsiteat:www.atlantis-press.com Copyright Thisbook,oranypartsthereof,maynotbereproducedforcommercialpurposesinanyformorby anymeans,electronicormechanical,includingphotocopying,recordingoranyinformationstorage andretrievalsystemknownortobeinvented,withoutpriorpermissionfromthePublisher. ISBNs Print: 978-94-91216-88-6 E-Book: 978-94-91216-89-3 (cid:2)c 2013ATLANTISPRESS Preface Informationsystemshavebecomeanessentialpartandamajorresourceoftheorganiza- tion; andtheycanradicallyaffectthestructureofanorganisation,thewayitservescus- tomers,andthewayithelpspeopleintheorganizationtocommunicatebothinternallyand externally,andthewayanorganisationrunsitsbusiness. Managinginformationsystems effectivelyandefficientlyhasbecomeanimportantpartofthelifeof21stcenturymanagers. Thisbookisaboutmanaginginformationsystemsandfocusesonrelationshipsbetweenin- formation,informationsystems,peopleandbusiness.Theimpacts,roles,risks,challenges aswellasemergingtrendsofinformationsystemsareanimportantelementofthebook. Atthesametime, manystrategicandcontemporaryusesof informationsystemssuch as implementingenterpriseplanningsystemsforimprovinginternaloperation,adoptingcus- tomerrelationshipmanagementsystemsandsupplychainmanagementsystemstoenhance relations with customers and suppliers/partnersrespectively, and establishing knowledge managementsystems for better managingorganizationalknowledgeresourcesas well as usingdifferentinformationsystemsforsupportingmanagers’decisionmakinginalllevels areanintegralpartofthebook.Inaddition,essentialandcriticalinformationsystemsman- agementskillsincludingusinginformationsystemsforcompetitiveadvantages,planning andevaluatinginformationsystems,developing&implementinginformationsystems,and managinginformationsystemsoperationareacriticalpartofthebook. This book has ten chapters. Chapter 1 looks at foundations of information sys- tem/information technology and discusses topics such as the importance of information systems,keyconceptsofinformationsystems,informationsystemscompetenceforman- agers,criticalissuesofinformationsystems,andemergingtrends&futuredirectionsofin- formationsystems.InChapter2animportantdimensionofmanaginginformationsystems, howinformationsystemscanhelporganisationsgaincompetitiveadvantages,isdiscussed. iii iv ManagingInformationSystems:TenEssentialTopics OrganisationscanapplystrategicplanningtoolssuchasPorter’sfiveforcesandvaluechain to analysetheir competitiveposition, examinetheir competitiveadvantages,and identify relevantcompetitivestrategies. Informationsystemscanplayaveryimportantroleinthe successofanorganisation’sidentifiedcompetitivestrategies. Chapter3studiestheimportanceofgoodinformationsystemsplanning,whichiscritical forthestrategicuseandsuccessofinformationsystemsintheorganization.Chapter3also looksatanotherimportantaspectofinformationsystemsmanagement:evaluationofinitia- tives/investmentsofinformationsystems. Thereisanoldsaying: ‘Ifyoucannotmeasure it, you cannot manage it’. Through systematic assessment of their information systems initiatives/investments, organizationscan be effective in choosing right information sys- temsprojectsandmanagingtheirchoseninitiatives/investments. In orderto measurethe performanceofinformationsystems,organisationscoulduseasetofmetrics(suchasnet presentvalue,returnofinvestment,internalrateofreturn,paybackperiod,andtotalcostof ownership).,Meanwhileorganisationsshouldlookbeyondfinancialmetrics,andtakeinto considerationoffinancialandnon-financialdata,qualitativeandquantitativeinformation, tangibleandintangiblecosts/benefits,andformalandinformalprocesses. Chapter4looksatdevelopingandimplementinginformationsystems.Correctlydeveloped informationsystemscansignificantlycontributetothesuccessofthebusiness(i.e.,enhanc- ingcompetitiveadvantages,improvingbusinessperformance).Ontheotherhand,apoorly developedand implementedinformationsystem can havea damagingeffect on business performanceand can even cause a business to fail. To ensure successfully develop and implementinformationsystemsorganizationsneedtoadoptsystemsdevelopmentlifecy- cle(oritsvariations),whichincludessuchactivitiesassystemsplanning,analysis,design, development,testing,implementation,andmaintenance. Inaddition,whileorganizations aredevelopingandimplementinginformationsystemstheyhavetopaycloseattentionto suchareasasprojectmanagement,changemanagement,andriskmanagement,theseareas arecriticallyassociatedwiththesuccessofinformationsystemsdevelopmentandimple- mentation. Chapter 5 discusses the importance of managing organization’s knowledge re- sources/assets. Effectively managing and leveraging knowledge assets, has critical im- plicationsforbusinessperformanceandsustainablebusinessgrowth.Informationsystems suchasknowledgemanagementsystemscouldassistinorganization’seffortsofcapturing, Preface v storing,disseminating,utilizingandcreatingknowledge.Onarelatednote,Chapter5also discussesdataresourcesmanagement.Asaresultofglobalconnectedness,thewideadop- tionofcomputingtools&mobiledevices,therapidadvancementofInternettechnologies, andmorepowerfulcomputingcapability,gatheringandanalysinglarge(orlargelarge)vol- umeofdataisquicklybecomingpopularamongorganizationsforreasonssuchasbetter understandingcustomers,andbetterutilizingdataresources&computinginfrastructure. Chapter 6 touches on the information systems infrastructure management and discusses hardware,software, networksandtelecommunicationsmanagement. Hardwareis avital part of computer systems and providesthe underlyingphysicalfoundationfor firms’ in- formationsystemsinfrastructure. Otherinfrastructurecomponentsofsoftware,networks and telecommunicationsrequire hardware for their storage and operation. To be useful, hardwareneedssoftware,whichgivesinstructionsthatcontroltheoperationofacomputer system. NetworksandTelecommunicationsenablelargeandsmallbusinessestocommu- nicateinternallybetweenstaffandexternallywithcustomers,suppliers,businesspartners, strategicalliancesandothers.Makingtherightdecisioninrelationtoinformationsystems infrastructureisvitaltothesuccessofthebusiness. Chapter7dealswithfunctionalinformationsystemsanddiscussescross-functionalinfor- mationsystems.Traditionallybusinessesareoperatedbydividingtheorganisationintovar- iousfunctions(i.e., accounting,marketing,finance, productions/operationsmanagement, humanresourcesmanagement)inasilostructurewitheachhavingitsowninformationsys- temsandtendingtoworkinisolation.Inordertodealwiththeseproblemsofsiloapproach (i.e.,informationrecreation,informationerrors,communicationgapsamongdepartments, lossofinformationarisingfrominaccurateinformationandnot-timelysharedinformation, andlackofconsistentservicestocustomers),managersneedtothinkbeyondthewallsof theorganisation. Thusthereis aneedforacross-functionalapproach,which focuseson businessprocessandcustomerservices. Cross-functional information systems are a strategic way to use information systems to shareinformationresourcesandfocusonaccomplishingfundamentalbusinessprocessesin concertwiththecompany’scustomer,supplier,partner,andemployeestakeholders.Some typicalexamplesofcross-functionalinformationsystemsinclude:enterpriseresourceplan- ningsystems,customerrelationshipmanagementsystems,supplychainmanagementsys- tems, and knowledge management systems. These four systems have different focuses: vi ManagingInformationSystems:TenEssentialTopics enterpriseresourceplanningsystemsemphasizeoninternalefficiency;customerrelation- ship management systems concentrate on customer relations; supply chain management systemsfocusonmanagingrelationswithsuppliersandbusinesspartners;andknowledge managementsystemsfacilitatemanagingtacitandexplicitknowledgeoftheorganization. Meanwhilethesefoursystemsareinter-related(i.e.,accurateinformationiscriticaltothe successofsupplychainmanagementsystemsandenterpriseplanningsystems;knowledge sharingfacilitatedbyknowledgemanagementsystemsisimportanttoalltheaspectofbusi- nessincludingthesuccessofsupplychainmanagementsystems,enterpriseplanningsys- tems,customerrelationshipmanagementsystems).Chapter7alsohasacloseatenterprise planningsystems anddiscusses implementationissues andemergingtrendsof enterprise resource planning systems. Chapter 8 looks at various aspects of customer relationship managementsystemsandsupplychainmanagementsystems,includingbenefits,typesof systems/applications,challenges&issuesofimplementation,andfuturetrends. Chapter9reviewsinformationsystemsforsupportingdecisionmaking. Organisationsto- day can no longer use a ‘cook book’ approach to decision making. In order to succeed inbusinesstoday,companiesneedinformationsystemsthatsupportthediversedecision- making needs of their operations. The massive volume of available data generated by billionsofconnecteddevicesandhumanmindshasfurtherstrengthenedtheroleofinfor- mation systems for decision-making support. Providing information and support for all levels of management decision making is no easy task. Therefore, information systems mustbedesignedtoproduceavarietyofinformationproductstomeetthechangingneeds ofdecisionmakersthroughoutanorganisation.Examplesofinformationsystemsfordeci- sionmakingcovermanagementinformationsystems,decisionsupportsystems,executive informationsystems,artificialintelligenceapplications,datawarehousing&datamining, andbusinessintelligence/businessanalytics. Chapter10looksatmanaginginformationsystemsfunctionandoperation.Thesuccessof informationsystemsintheorganizationheavilyrelyongoodmanagement.Goodinforma- tion systems managementexaminesand workson enterpriseinformationsystems opera- tion/functionmanagement,globalinformationsystemsmanagement,informationsystems inmergersandacquisitions,informationskills&talentmanagement,informationsystems governance,andglobalvirtualteammanagement. Chapter10alsodiscussesinformation systemsoutsourcingmanagementbylookingatsuchareasasadvantagesanddisadvantages Preface vii ofinsourcing,outsourcing,andoffshore-sourcing;criticalcapabilities,challenges,issues, andcriticalsuccessfactorsofoutsourcing. WewouldliketothankDrChadLin,CurtinUniversity,AustraliaandDrDanielO’Sheedy, PhotonGroup,Australia,fortheirkindassistanceinreviewingthebook.Finallywewould liketothankAtlantisPressandSpringerforopportunityofworkingonthebook,andthank ZegerKarssen,PublishingDirector,AtlantisPress, foroverseeingthepublishingprocess ofthebookandforgivingussuchawonderfulpublishingexperience. JunXuandMohammedQuaddus GoldCoastandPerth,Australia November2012 Contents Preface iii 1. Foundation 1 1.1 ManagingInformationasaStrategicResource. . . . . . . . . . . . . . . 1 1.2 KeyConceptsofInformationSystems . . . . . . . . . . . . . . . . . . . 2 1.3 InformationSystemsCompetenceforManagers . . . . . . . . . . . . . . 4 1.4 CriticalIssuesofInformationSystemsManagement. . . . . . . . . . . . 5 1.5 EmergingTrendsandFutureDirections . . . . . . . . . . . . . . . . . . 13 1.6 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 2. InformationSystemsforCompetitiveAdvantages 27 2.1 CompetitiveStrategies . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 2.2 Valuechain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 2.3 BusinessEco-systemsandCo-opetition(Competition&Cooperation) . . 31 2.4 InnovationStrategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 2.5 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 3. InformationSystemsPlanningandEvaluation 41 3.1 StrategicAlignmentofInformationSystemsPlanwithBusinessStrategy 41 3.2 MeasuringtheSuccessofInformationSystemsInitiatives/Investments . . 45 3.3 FinanciallyJustifyingInformationSystemsInvestments. . . . . . . . . . 46 ix x ManagingInformationSystems:TenEssentialTopics 3.4 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 4. DevelopingandImplementingInformationSystems 53 4.1 SystemsAnalysisandDesign. . . . . . . . . . . . . . . . . . . . . . . . 53 4.2 Projectmanagement,ChangeManagementandRiskManagement . . . . 58 4.3 InternalDevelopment,Outsourcing,AcquisitionandUseofApplication ServiceProviders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 4.4 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 5. ManagingOrganization’sKnowledgeResources 67 5.1 Data,InformationandKnowledge . . . . . . . . . . . . . . . . . . . . . 67 5.2 Database,DataWarehouseandDataMining . . . . . . . . . . . . . . . . 68 5.3 ThePhenomenonofBigData . . . . . . . . . . . . . . . . . . . . . . . 72 5.4 KnowledgeManagementandKnowledgeManagementSystems . . . . . 76 5.5 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80 Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81 6. ManagingInfrastructureforInformationSystems 85 6.1 HardwareandSoftwareManagement . . . . . . . . . . . . . . . . . . . 85 6.2 NetworksandTelecommunicationsManagement . . . . . . . . . . . . . 90 6.3 WirelessCommunication . . . . . . . . . . . . . . . . . . . . . . . . . . 93 6.4 Managementchallenges . . . . . . . . . . . . . . . . . . . . . . . . . . 94 6.5 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106 Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106 7. UsingInformationSystemsforEnhancingInternalOperation 109 7.1 FunctionalandCross-functionalInformationSystems . . . . . . . . . . . 109 7.2 EnterpriseResourcePlanningSystems . . . . . . . . . . . . . . . . . . . 111 7.3 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118 Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118 Contents xi 8. UsingInformationSystemsforImprovingExternalRelations 121 8.1 CustomerRelationshipManagementSystems . . . . . . . . . . . . . . . 121 8.2 SupplyChainManagementSystems . . . . . . . . . . . . . . . . . . . . 131 8.3 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136 Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136 9. UsingInformationSystemsforSupportingDecisionMaking 139 9.1 EnablingtheOrganization-DecisionMaking . . . . . . . . . . . . . . . . 139 9.2 InformationSystemsforDecisionSupport . . . . . . . . . . . . . . . . . 141 9.3 BusinessIntelligence/BusinessAnalytics . . . . . . . . . . . . . . . . . 145 9.4 ManagementChallenges . . . . . . . . . . . . . . . . . . . . . . . . . . 147 9.5 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148 Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148 10. InformationSystemsOperationManagement 149 10.1 EnterpriseInformationSystemsOperationManagement . . . . . . . . . 149 10.2 Outsourcing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158 10.3 GlobalInformationSystemsOperationManagement . . . . . . . . . . . 162 10.4 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164 Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165
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