Redesigning the Organisation with Information Systems and Managing Change

1. Redesigning the Organisation with Information Systems and Managing Change

2. Learning Outcomes • Explain how an organisation must change in order to successfully capitalise on the use of IS and the consequent impact on organisational structure and employees • Describe techniques for organisational analysis • Describe types of organisational change • Explain impact of organisational change • Explore failure, success, risk and mitigation in IS implementation

3. Learning Outcomes • Produce a plan of how IS may be implemented within an organisation to provide competitive advantage • Provide a template IS plan used to summarise and present organisational analysis and implementation

4. Topics • Organisational analysis • Enterprise Analysis • Strategic Analysis • Business Process Re-engineering • Soft Systems Methodology • Workflow management • Total Quality Management

5. Topics • Organisational change • Automation • Rationalisation • Business Process Re-engineering • Paradigm Shift • Information Systems Plan • Implementation • Failure and avoiding failure • Managing change • Risk and mitigation

6. Source Material • Laudon & Laudon (2002): • Chapter 10, 11 • Laudon & Laudon (2003): • Chapter 12, 13 • Beynon-Davies (2003): • Chapters 16, 33

7. Organisational Change • Successful implementation of Information Systems requires organisational change • Why? • Change workflow • Reduction in staff • New processes and procedures • New business processes • New business strategy

8. IT and Change • Location • Global operations can be linked by digital networks • Co-ordination and collaboration • Information can be available simultaneously to more than one group • Distributed computing • Distributed information and distributed actions • Portability • Work at home, customer site, etc.

9. Planned Change • Implementation of IS must be planned to be successful • Analysts must understand the impact of IS on business processes • Only target those business processes necessary for improvement

10. Organisational Analysis • The analysis of • The informal systems in organisations (not written down) • The overall objectives and needs of an organisation, and within its environment • Identifying where IS can help • Leads to organisation change

11. Organisational Analysis • Enterprise analysis • Strategic analysis • Business Process Re-engineering • Workflow management • Total quality management • Soft Systems Methodology

12. Enterprise Analysis(Business Systems Planning) • Looks at whole organisation • Large sample of managers • How do they use information? • Where is the information from? • What environment do they work in? • What are their objectives? • How do they make decisions? • What are their data needs?

13. Enterprise Analysis(Business Systems Planning) • Strengths: • Results in an understanding of who uses what data, which processes and functions • Mapping of existing systems shows new requirements • Weaknesses: • Too much data • Expensive to collect • Difficult to analyse • Focuses on current practice

14. Strategic Analysis(Critical Success Factors) • Three or four interviews • Top managers: • What are their organisational goals? • Aggregated into the organisation’s goals

15. Strategic Analysis(Critical Success Factors) • Strengths: • Smaller amount of data • Good for DSS and ESS • Focuses on new practice • Weaknesses: • Limited data requires ‘creative’ aggregation • Confusion between personal and organisational goals • Focuses on top managers

16. Business Process Re-engineering • IT on its own delivers little value • IT can deliver value by allowing organisational practices to change • The use of IT should initiate organisational change • IT and human systems must be designed in parallel: IS • The greatest benefit can come from the radical re-design of business processes

17. Business Processes • Recall, a business process is: • A set of activities across the major functional areas of a business that are used to accomplish the goals of the business • They therefore: • Have inputs, processing, outputs • Support core activities • May cross over functional and organisational boundaries • Can be designed

18. Business Process Re-engineering • Effective BPR needs senior management to instigate new business processes: • For example, (re-)defining the strategy • Focus on a few core business processes • Must understand performance and cost of existing processes • Use of Information Technology should influence design

19. Business Process Re-engineering • BPR leads to major change: • Jobs (including redundancy) • Different skills • Workflows • Reporting relationships

20. Workflow Management • Re-engineer and automation of paper-based procedures • Routing • Approvals • Scheduling • Reporting • Simultaneous work on documents • Instant transfer – no more ‘in transit’ • Indexing and collation of information

21. Re-engineering Steps • Develop business vision and objectives • Identify processes to be re-designed (core) • Understand performance of existing processes • Understand Information Technology opportunities • Prototype the new process

22. Total Quality Management • Making quality control the responsibility of all people in an organisation • Quality of • Products • Services • Operations • Catch problems early, they cost less

23. Total Quality Management • TQM is more incremental than BPR • Continuous improvement, rather than ‘big bang’ • May need BPR to improve quality beyond TQM

24. TQM and Information Systems • Simplify production process • Automate to give less steps • Less steps, less chance of error • Faster production times • Benchmarking • Use IS reporting to feedback performance of processes • Improve processes and IS to meet benchmark

25. TQM and Information Systems • Customer Relationship Management • Used to improve quality of customer service • Computer Aided Design • Improve quality of product design • Production control • Automate production to improve precision

26. Soft Systems Methodology • BPR is driven from the top-down • Management defined organisational strategy • Radical form of change • SSM is driven from the bottom-up • Stakeholders should participate in the re-design of business processes • More evolutionary form of change

27. Soft Systems Methodology • Technique to analysis and propose change • Performed by stakeholders: involved in the change • Analysis of both culture and systems • CATWOE: • Customers: the victims or beneficiaries of change • Actors: those making the change • Transformation: conversion from input to output • Weltanschauung: world view • Owners: those that can stop the change • Environmental constraints: elements outside the system

28. Introducing Information Systems • Analysis complete • Chosen IS to implement for business processes • Recall that successful implementation of IS requires • Technical changes • Organisational changes

29. Types of Change High Paradigm Shifts Risk Re-engineering Rationalisation Low Automation Low Return High

30. Types of Change • Automation • Using computers to speed up existing tasks • Low risk, low return • Rationalisation • Streamline procedures to improve automation • Remove bottlenecks • Low-medium risk, low-medium return

31. Types of Change • Business Process Re-engineering/Re-design • Radical re-design of business processes • Remove procedural steps • Eliminate paper-based tasks • Improve costs, quality and service • Medium-high risk, medium-high return

32. Types of Change • Paradigm Shifts • Re-thinking the nature of the business / organisation • Complete re-conception of how the business should function • High risk, High return

33. Information Systems Plan • Plan indicating the direction of systems development • Rationale • Current situation • Management strategy • Implementation plan • Budget

34. Information Systems Plan • Integral part of business • Strategy • Senior management level • Defines organisational change • Short- and long-term change • Brings together organisational and technical factors

35. Information Systems Plan • Plan will depend upon business and management style • Plan makes the business think about what they wish to achieve and how

36. Plan Contents • Purpose of the Plan • Overview of plan contents • Changes in current situation • Firm’s strategic plan • Current organisation • Key business processes • Management strategy

37. Plan Contents • Strategic Business Plan • Current situation • Current organisation • Changing environments • Major goals of plan

38. Plan Contents • Current Systems • Major systems supporting business functions and processes • Major current capabilities • Hardware • Software • Database • Telecommunications • Difficulties meeting requirements • Anticipated future demands

39. Plan Contents • New Developments • New system projects • Project descriptions • Business rationale • New capabilities required • Hardware • Software • Database • Telecommunications

40. Plan Contents • Management Strategy • Acquisition plans • Milestones and timing • Organisational realignment • Internal reorganisation • Management controls • Major training initiatives • Personnel strategy

41. Plan Contents • Implementation plan • Anticipated difficulties (risks) • Progress reports

42. Plan Contents • Budget requirements • Requirements • Potential savings • Financing • Acquisition

43. Changes • Recall that changes include: • Technical solutions • Types of information stored and used • How information is accessed and used • Individual and group responsibilities • New management and reporting structures • New business processes and functions

44. Introducing Information Systems • How can such systems be introduced? • We are going to look at failure in order to understand how change must be managed

45. Failure • An Information System can be regarded as ‘a failure’ if: • It does not perform as expected • Is not operational at a specified time • Cannot be used in the way it was intended

46. Failure • IS may fail to: • Be delivered • Deliver benefits • Solve intended problems • May be due to lack of organisational change

47. Failure Types • Design • Failure to capture business requirements • Failure to improve organisational performance • Information may: • Not be delivered quickly enough • Not be delivered in a useful format • Not be the correct information for the purpose • System may be difficult to use – user interface

48. Failure Types • Design • Design must take into account all these factors • Traditionally all design was technically-based • Technically excellent solutions • Solutions that do not meet the organisational needs • Needs to address these organisational needs

49. Failure Types • Data • Data may be • Inaccurate • Inconsistent • Incomplete for business function • Fields may be • Erroneous • Ambiguous • Poorly understood and not broken down

50. Failure Types • Cost • Implementation over budget • Too costly to complete • Running costs over budget • Costs may exceed business value