definations of value chain

8/12/2019 Definations of Value Chain

1/42

ITEC 1010 Information and Organizations

Chapter 2

Information Systems in

Organizations


2/42


Organizations and Information

SystemsOrganization

A formal collection of people and other

resources established to accomplish a set ofgoals


3/42


General Model of an

Organization (next slide)


4/42



5/42


Value Chain

Term coined by Michael Porter in a 1965

article in theHarvard Business Review

Def: a series of activities that includes

inbound logistics, warehouse and storage,

production, finished product storage,

outbound logistics, marketing and sales,and customer service

Schematic


6/42



7/42


Organizations

Organizational structure

Organizational subunits and the way they are

related to the overall organization

Traditional organizational structure

Major department heads report to a president

or top-level manager

Schematic


8/42


Traditional Organizational Structure

S. Burry,PresidentA.Bailey,Legal counsel

B. Wong,

VP Accounting

C.Rodrig,

VP Information

Systems

R. Henderson,

VP Marketing

K. Kelly,

VP Production

V. Cisborn,

VP Human

Resources

S. Samuel

Supervisor

L. Bashran,

Supervisor


9/42


Terminology (1)

Hierarchical organizational structure

See previous slide

Series of levels

Those at high levels have more power and

authority within an organization

Flat organizational structure An organizational structure with a reduced

number of layers of management


10/42


Terminology (2)

Empowerment

Giving employees and their managers more

power, responsibility, and authority to makedecisions, take certain actions, and have more

control over their jobs


11/42


Other Organizational Structures (1)

Project organizational structure

An organization structure centred on major

products or services

Contrast with traditional structure

Team organizational structure

An organizational structure centred on workteams or groups

Schematic


12/42


Project Organizational Structure

B. Woods,President

Air & Aerospace Co.

T. Walker,Senior VP,

Aircraft Division

W. Butler,Senior VP,

Aerospace Division

O. Teco,Senior VP,

Communications &

Satellite Division

VP,

Finance

VP,

Marketing

VP,

Production

VP,

Finance

VP,

Marketing

VP,

Production

VP,

Sales

VP,

Finance

VP,

Marketing

VP,

Production

VP,

Sales


13/42



Multidimensional organizational structure

A structure that may incorporate several

structures at the same time Schematic


14/42


Multidimensional Organizational Structure

Vice President,Marketing

Vice President,Production

Vice President,Finance

Publisher,

College Division

Marketing

Group

Production

Group

Finance

Group

Publisher,

Trade Division

Marketing

Group

Production

Group

Finance

Group

Publisher,

High SchoolDivision

Marketing

Group

Production

Group

Finance

Group


15/42



Advantages and disadvantages of different

organizational structures

Read the book!


16/42


Organizational Culture

and Change (1) Culture

A set of major understandings and assumptions

shared by a group

Organizational culture

The major understandings and assumptions for

a business, a corporation, or an organization


17/42


Organizational Culture

and Change (1)Organizational change

Deals with how for-profit and non-profit

organizations plan for, implement, and handlechange

Organizational learning

The way organizations adapt to new conditionsor alter their practices over time


18/42


Models of Change

Change model

A representation of change theories developed

by Kurt Lewin and Edgar Schein in 1969 Three-stage approach

Unfreezing

Moving

Refreezing

Schematic


19/42


Change Model


20/42


Reengineering

Also called Process redesign

The radical redesign of business processes,

organizational structures, information systems, andvalues of the organization to achieve a breakthrough in

business results

For example, to

Reduce delivery time

Increase product and service quality

Improve customer satisfaction

Increase revenues and profitability


21/42


Rules, Rules, Rules

Reengineering requires finding and

vigorously challenging old rules

Rule Original rationale Potential problem

Small orders held

until full truckload

Reduce delivery

costs

Customer deliver is

delayed

No order accepteduntil credit approved Reduce potential forbad debt Customer service ispoor

All product decisions

made at headquarters

Reduce number of

items in inventory

Perception of limited

product selection


22/42


Other Models

Continuous improvement

Constantly seeking ways to improve the

business processes to add value to productsand services


23/42


Continuous Improvement vs.

ReengineeringReengineering Continuous Improvement

Strong action to solve serious problem Routine action

Driven by senior executives Worker-driven

Broad in scope; cuts across

organizations

Narrow in scope

Goal to achieve a major breakthrough Continuous, gradual

Often led by outsiders Led by workers

IS integral to the solution IS provides data to guide


24/42


Total Quality Management

Quality

The ability of a product (including service) to

meet or exceed customer expectations

TQM

A collection of approaches, tools, and

techniques, that offers a commitment to qualitythroughout the organization


25/42


Outsourcing and Downsizing

Outsourcing

Contracting with outside professional services to meetspecific business needs

E.g., advertising, hiring

Downsizing

Reducing the number of employees to cut costs

Also called rightsizing

May have serious side effects E.g., low employee morale, a need for expensive consultants,

lost time, waning productivity


26/42


Competitive Advantage

Competitive advantage

A position, product, service, etc., within a

business that improves a position within amarket with respect to competitors

Porters Five force model of competitive

advantage Identifies factors that lead to competitiveness

Schematic


27/42


Porters Five-force Model

Substitute

Products

Supplier

Power

New

Entrants

Buyer

PowerRivalry


28/42


Strategic Planning for

Competitive Advantage

Four techniques: Strategic alliances (aka strategic partnerships)

Creating new goods or services

Improving existing goods or services

Using information systems for strategic purposes

Next slide


29/42


1. Strategic alliance

An agreement between two or more companies thatinvolves the joint production and distribution of

goods and services E.g., Chrysler + Daimler Benz

2. Creating new goods or services

A company may become stagnant without theintroduction of new goods and/or services

E.g., Compaq, Dell3. Improving existing goods or services

Small variations to existing goods or services, and/orcomplete modifications

E.g., light foods4. Using information systems for strategic purposes

IS for improving organizational effectiveness

E.g., SABRE (airline reservation system)


30/42


Performance-based Information

Systems

Productivity

A measure of the output achieved divided by

the input required

Productivity =

Output achieved

Input required


31/42


32/42


Return on Investments (ROI) and

the Value of IS

Return on investment (ROI)

A measure of IS value that investigates the

additional profits or benefits that are generatedas a percentage of the investment in

information systems technology

represents


33/42


Measures of IS Value

Earnings growth

Market share

Customer awareness and satisfaction

One of my favourite quotes:

When you cannot measure, your knowledge isof a meager and unsatisfactory kind.

Kelvin


34/42


Justifying IS

Categories:

Tangible savings

Intangible savings

Legal requirements

Modernization

Pilot project


35/42

ITEC 1010Information and Organizations

Roles, Functions, and Careers in

the IS Department

Categories:

Operations

Systems development

Support

Liaisons (information service units)

Schematic


36/42


IS Department

CEO

CIO

OperationsSystems

developmentSupport

Informationservice

unit

Otherfunctional

areas

Data

administration

Information

centre

Information

technololgy

Systems

analysis

& design

Programming

Computer

facility

operations

Data

entry

Local

Area network

operations

Information

Resource

Management

Functions


37/42


Information Centre

Information centre

Provides users with assistance, training,

application development, documentation,equipment selection and setup, standards,

technical assistance, and troubleshooting


38/42


Information Service Unit

Information service unit

Attached to a functional area of the business.

Acts as a local information supportorganization within a functional area.

Performs the critical role of liaison between

the functional area and IS


39/42


Chief Information Officer (CIO)

Chief Information Officer (CIO)

A manager at the vice-president level

responsible for IS planning, policy, andstandards

Focused on supporting corporate goals


40/42


Other IS Roles

Database Administrator

Systems Programmer

Network Specialist LAN Administrator

Webmaster

Trainer


41/42


IS Principles

Use of IS strongly influenced by

organizational structure and problem

orientations IS are often intertwined within the value-added

processes

IS usage may require change that could meet

with resistance

Value-added IS needs to be continually sought


42/42

ITEC 1010

End of Chapter 2

Chapter 3
http://localhost/var/www/apps/conversion/tmp/scratch_2/1010-Chapter3.ppthttp://localhost/var/www/apps/conversion/tmp/scratch_2/1010-Chapter3.ppt

definations of value chain

Documents