SCHOOL OF BUSINESS ADMINISTRATION BA 530 – John A. Hengeveld Winter 2003 IT and Work Systems John A. Hengeveld

SCHOOL OF BUSINESS ADMINISTRATIONSCHOOL OF BUSINESS ADMINISTRATIONBA 530 – John A. Hengeveld Winter 2003BA 530 – John A. Hengeveld Winter 2003

IT and Work Systems

John A. Hengeveld


Agenda for Today

• Case Writeups, Business Communication (0:45)• Pearlson Chapter 3 (0:40)• Work Systems 101• Break (0:15)• Pearlson Chapter 5 (0:45)


Case Writeups and Business Communication

• Most case writeups should form an ARGUMENT– A logical sequence of reasoning leading to a

conclusion resolving a specific set of issues– The recommendation needs to be complete

• Solves the problem inherent in the business situation

• Addresses issues create by the risks of implementation


Convincing the skeptical world

• Why do we do cases?

• What is the burden of proof on a case analysis?

• How do you fulfill your burden?


Common Problems• Too much analysis and facts, not enough pulling

that information behind your course of action.• Too much recommendation, no supporting

evidence or framework of the decision.• Develop criteria for a decision then don’t use them• Soft statements.. “Reconsider” or “might do blah”• Leading with the analysis NOT the action. (most

executives have neither the patience nor the inclination to read through your analysis… that’s what they pay you for as a manager!


Convincing an Executive• Make a clear argument as to what to do• Clear supporting facts and analysis as to why.• Show that you considered solid alternatives

(when the CEO asks .. Have you considered this…and you havent… poof.. See ya)

• Show that you understand the risks• Show that you REALLY truly deeply and totally understand

the problem that the EXECUTIVE is facing in making the decision. (what is the executives intention?)

• Show that YOU are a reliable interpreter of the situation so they can trust you!

• Finally, make it engaging and interesting for them to be a part of the decision process.


Now add the MBA stuff• Use the tools of the class where possible.

Profs really like that.• Be insightful, look for non obvious

connections• Write concisely.. While your boss may not

have 34 other reports to read tonight.. I do.• Nice figures, tables graphs and charts make

an impact.


The Rogers Commission Report

• The Challenger Disaster


Okay.. For Next Week- Amazon.com

• Compare walmart, amazon and barnes and noble websites.. What are strengths and weaknesses?

• In the case, what is Amazon’s current strategy?Will Amazon ever achieve profitability?

• What strategy should Amazon.com adopt?• What are the risks/issues with current and

proposed strategy?• What are the keys to e-business success for

Amazon.com?


Okay.. For Next Week- Amazon.com

• Compare hotjobs, flipdog and monster.com websites.. What are strengths and weaknesses?

• In the case, what is Monster.com (TMP’s) current strategy?

• What strategy should Monster.com (TMP) adopt?• What are the risks/issues with current and

proposed strategy?• What are the keys to e-business success for

Monster.com?


Pearlson Chapter 3


JOB DESIGN FRAMEWORK

• What tasks will be performed?

• How will the work be performed?

• Who will do the work?

• Where will the work be performed?

• How can IS increase performance, satisfaction and effectiveness of the workers doing the work?


What tasks need to be performed?

What is the best way to have these tasks done?

Done by a person

Who is going to do these tasks?

Where is that person when doing the work?

How can IT enhance theworker efficiency and satisfaction?

Done by a computer

Automate the tasks

Figure 3.1 Framework for job design impacts


New Ways to do Traditional Work

• The introduction of IT can greatly change workers’ day-to-day tasks.

• IT changes workers’ communication patterns• Workers using mobile devices can send and

receive message and tap into databases, affecting sales and service tasks.

• The cost and time needed to access information is dramatically lower, giving workers new tools.

• Work has become much more team oriented an effect amplified by the Internet.


Creating New Types of Work• Since the early 1980s, increased IS/IT use has created

many new types of jobs.• Consulting firms have become widespread that

specialize in IS-related work.• Examples of newly created jobs now common in

traditional organizations include: – knowledge managers, – systems analysts, – database and network administrators, – webmasters and web site designers.


Figure 3.2 Changes in employee supervision and evaluation

Traditional

Approach

Personal. Manager

usually present or relies on others to ensure employees are present and productive

Focus is on process through direct observation. Manager sees how employee performed at work. Subjective (personal) factors are very important.

Newer

Approach

Electronic, or assessed by deliverable. As long as the employee is producing value, he does not need formal supervision.

Focus on output or target. As long as these are achieved, performance considered adequate. Subjective factors less important, harder to gage.

Supervision Evaluation


Work It creates millions of new jobs, some in entirely new industries.

Working More work is team-oriented, enabled byArrangements communications and collaboration technologies. Geographic constraints of some professions are eliminated, enabling telecommuting.

Human New strategies are need to supervise,Resources evaluate, and compensate remotely performed, team-oriented work. IT requires new skills workers often lack.

Figure 3.3 Summary of IT’s effects on employee life


The Growth of Telecommuting

• Telecommuting has gained popularity since the late 1990s because:

– Lowers corporate overhead since workers who are at home don’t take up office space lowering facilities costs

– Workers who are giving increased flexibility are more productive and express higher levels of job satisfaction

• 2/3’s of Cisco employees occasionally work from home. The policy has saved the company $1M in expenses, while workers prefer to set their own schedules and work in more comfortable surroundings.


Figure 3.4 Telecommuting’s driving factors

Shift to knowledge-based work

Eliminates requirement that certain work be performed in a specific place.

New technologies Make remotely performed work practical and cost-effective.

Changing demographics and lifestyle preferences

Provides workers with geographic and time-shifting flexibility.

Driver Effect


Figure 3.6 Advantages and disadvantages of telecommuting

Reduced stress, heightened morale and lower absenteeism

Harder to evaluate performance

Geographic flexibility Employee may become disconnected from company culture

Higher personal productivity Telecommuters are more easily replaced by electronic immigrants

Housebound individuals can join the workforce

High level of self-discipline required

Employee Advantages Potential Problems


Figure 3.5 Mobile Workers

Laptops Consultants and sales

Eliminates constraints of travel. Enable workers to be productive anywhere.

PDAs Mostly professionals

Provides a low-cost, simple way of organizing information and communicating data.

Handheld terminals

Service professionals (delivery, tech. support, service & repair)

Enhances productivity and adds capabilities and real-time communication.

Portable phones

Anyone Allows immediate voice (and sometimes data) communication.

Technology Used by Impacts


Groupware and Electronic Collaboration

• Groupware tools such as Lotus Notes, Microsoft Outlook and technologies, such as video conferencing have made it cost-effective for workers in distant locations to create, edit and share electronic documents and processes.

• Collaboration adds value to many types of tasks, particularly those that benefit from exchange of ideas.


Whirlpool’s Product Design Management (PDM) system

• PDM unites design teams electronically using a central data repository.

• Engineers around the world collaborate online to create several basic designs using PDM.

• Each region then customizes generic design for local use.

• PDM cuts design time in half, thereby saving money and brings products to market more quickly.


Ford Motor Company

• Ford now develops cars for world markets by electronically linking design and engineering centers via videoconferencing and corporate intranets.

• Faster more efficient communication allows Ford to design and produce cars in less time.


Does IS/IT Investment Improve Worker Productivity?

• Some researchers argue ongoing costs outweigh productivity gains

• Other research suggests employee productivity is rising

• Some argue the measurement of productivity is flawed; e.g., fails to capture gains in service.

• Controversy remains unresolved after many years of research.


Work Systems 101

Thanks to Neil.. I’m borrowing his slides here


WORK SYSTEM

Human participants performing a business process using information and technology to produce products and services for internal or external customers. (Plus:

Strategy)

(the worksystem)

(theenvironment)


Some initial points on the framework…

o The work system is larger than the business process it contains. For example, note how a given process may be performed well or poorly,depending on the characteristics of the participants, information, and technology involved.

o Things to think about:

[1] Architecture – what the current work systemconsists of and how it operates.

[2] Performance - how well the work systemfunctions.

[2] Design – what can be done to improve thethe work system’s performance.


Customers

Architecture:o People who use and receive

direct benefits from the productsand services produced by the worksystem.

o May be external and/or internal.

Performance:o Customer satisfaction.o Consider the customer’s own work

system(s) in which he/she/it uses your product/service.

o Consider the ‘lifecycle’ of the customer’sinvolvement with your product/service.


Products & Services

Architecture:o Combination of physical things,

information, and services that the work system produces for its customers.

o Products and services may be “final”( outside customer) or intermediate ( internal “customer”).

Performance:o costo qualityo responsivenesso reliabilityo conformance to standards, regulations


Business Process

Architecture:o The set of work steps or

activities that are performedwithin the work system

o These may be relatively structured (prescribed and repetitive) or unstructured.

Performance:o output rateo productivityo consistency (including error rate)o integrity, security


Performance:o output rateo productivityo consistency (including error rate)o integrity, security


Participants

Architecture:o The people who perform the

work steps in the businessprocess.

o A participant may also be a customer.

Performance:o job satisfactiono motivationo attention to taskso skills levelo illegal activity


Information

Architecture:o The information used by the

participants to perform their work.o Includes information created (or modified)

within the work system and information “imported” from outside.

o Includes information “computerized” and not.

Performance:o quality (accuracy, relevance, timeliness)o accessibilityo presentationo security


Technology

Architecture:o The hardware, software, and

other tools & equipment used bythe participants in doing their work.

o Includes computer & telecommunicationstechnologies, plus “manual” technologies.

Performance:o functional capabilities (what it does)o ease of useo TCO (total cost of ownership)o maintainabilityo compatibility


Infrastructure

o The shared technical and humanresources the work system inquestion relies on, even thoughthese resources exist and are managed outside of it.

o The technical side is pretty obvious…e.g., networks, shared databases, etc.

o More readily overlooked: the human aspectsof infrastructure, e.g., I.S. personnel, training staff.

o (The IT infrastructure is a crucial sourceof the organization’s capabilities ininformation integration… More on this later.)


Context

o The organizational, competitive,technical, and regulatory realmwithin which the work system operates.

o A.k.a. environmental factors: The system doesn’t rely on them in orderto function (so they’re not part of theinfrastructure), but they still affect the system’s performance.

o Examples: management support,organizational culture, internal political environment, labor markets, governmentalregulation, competitive factors, …


Examples of Work Systems

• For each of the following people roughly speculate on the work system around them

• Briefly summarize:– Customer, Context and Product

• For each element..– Architecture– Performance


Examples of Work Systems Analysis

• INKE, Fight Club: – Would you like Fries with that?

The store manager at McDonalds– SuperBowl Week..

Defensive Coordinator for the STBWC Oakland Raiders

• A Team, Great Wine: Spring Break is coming…– Cruise Director on the Love Boat (old TV Series)– Wine Buyer for a Hotel Restaurant

• BANCS, Crutch: – New Account Officer for the Bank– Ski Slope Operator


Introduction• Chapter 5 enables a manager to understand how IT

enables business change. • The chapter looks at:

– Change management.– The need for increased speed of change in order to

stay competitive.– Business Process Reengineering (BPR) and Total

Quality Management (TQM) as tools to support changes in business processes.


Transforming business processes• What are business process?

– Some examples?– How do they work?– Why would they need to be changed?


Figure 5.1 Hierarchical Structure

Executive OfficesCEO

President

marketingoperations accounting finance administration


Limits to functionally organized organizations

• Functionally organized firms tend to perform sub-optimally for three reasons:– Individual departments duplicate information

maintained elsewhere.– Communications gaps often exist between

functional groups.– Functional structure tends to become ingrained,

inhibiting reorganization.


Managing from a business process perspective

• Functional organization tends to result in lower performance,

• As a consequence managers may take a business process perspective on value creation.


Figure 5.2 Simple business process

Receive requirementfor goods/services

Create and send

purchaseorder

Receivegoods

Verifyinvoice

Pay vendor

Processes cross functional boundariesFocus on the process tends to get functions out of their silos

and think about the business as a whole

•Each business processes includes the following:–A beginning and an end–Inputs and outputs–Subprocesses that turn inputs into outputs–A set of metrics for measuring effectiveness


Figure 5.3 Cross-functional nature of business processes

OPERATIONS

MARKETING

ACCOUNTING

FINANCE

ADMIN

BusinessProcesses

Functions


Optimizing value• Taking a process perspective begins to optimize the

value that customers and stakeholders receive.• A process focus creates value by:

– Identifying the customers of processes– Identifying these customers requirements– Clarifying the value that each process adds to the

overall goals of the organization• Process-oriented managers also become change agents,

helping others think about how IS and organizational strategies support overall business strategy (Figure 5.4).


Radical vs. Incremental Change

• Two broad categories of process improvement techniques are now in use: – TQM– Business Process Reengineering


Total Quality Management (TQM)

• What is it?

• Why does it work?

• Anybody been involved in a TQM effort?


Business Process Reengineering (BPR)

• Goal is to fundamentally rethink and redesign business processes to achieve radical improvements.

• Key aspects of BPR include:

– The need for radical change

– A cross-functional process perspective

– Challenging old assumptions

– Networked (cross-functional) organizing

– Empowerment of individuals involved in the process

– Use of metrics tied directly to business goals


Figure 5.6 Conceptual flow of process redesign

Vision Measure

Change

Current Process New Process

Transition Methodology


Figure 5.7 Method for redesigning a business process

Set the Stage, Develop Vision

of “To Be”

Understand“As Is”

(Current) Process

DevelopTransition

Plan

ImplementPlan

Monitor andMeasure

These preliminary steps are generally followed at the beginning of process redesign:

1. State the case for action.

2. Assess organizational readiness for change.

3. Identify those business processes to change to support business strategy.

4. Build the redesign team.


Mapping the “as is” process• The best approach to fully understanding the existing

process is to map it.• Process engineers begin process mapping by defining

the scope, mission and boundaries of the process• Next, the engineer will develop a high-level

flowchart of the process.• Next, he/she develops a detailed flow diagram of

everything that happens in the process.• Finally the flow chart is rechecked for accuracy.


Identifying Key Metrics• As part of understanding the “as is” process, another

key task is to identify key metrics of business success.

• Examples of such metrics include:– Cost of production, – Cycle time, – Scrap and rework rates, – Customer satisfaction, – Revenues and – Quality


Developing a transition plan• The transition plan should:

– Clearly and concretely state the vision the manager has for the new process.

– Include an initial design of the new process that directly addresses the metrics that address business goals.

– The transition plan should include the contents of the implementation plan.


Steps in a new process implementation plan• An overview of the existing business process

• Names of the members of the improvement team• Symptoms, problems and opportunities to be addressed by the

change• The vision, objectives and case for action for the new

processes• An overview of the redesign methodology• An analysis detailing the risks of transition• The new process design• A schedule and a list of deliverables• Resources that the transition will require• Signatures of personnel who own the transition


Enterprise Information Systems

• What is EIS?

• Examples?

• Benefits?


When an EIS is appropriate

• Situations in which it is appropriate for an EIS to drive business process design include:– When an organization is just starting out and

processes do not yet exist.– When an organization doesn’t rely on its

operational business processes as a source of competitive advantage.

– When current systems are in crisis and there is not enough time, resources or knowledge in the firm to fix them.


When an EIS is inappropriate

• Situations in which it is appropriate for an EIS to drive business process design include:

• When an organization derives strategic advantage from its operational business processes


Reengineering failures

• Many companies have attempted reengineering, only to fail to realize the benefits they sought.

• Radical change is not an easy task. • Some of the more common reasons are

summarized in Figure 5.8 • In general, many companies find that too

much change too quickly can do more harm than good.


Figure 5.8 Reasons reengineering fails to meet objectives

• Lack of senior management support at the right time and at the right places

• Lack of a coherent communications program• Introducing unnecessary complexity into the new

process design• Underestimating the amount of effort needed to

redesign and implement the new processes• Combining reengineering with downsizing


Radical design with evolutionary implementation

• A common approach is to design a radical new process but implement it gradually.

• “Evolutionary implementation”: – Reduces the risk of failure– Eases adaptation of new processes and– Lets individual workers to participate more fully.

• Two problems with this approach are that workers may lose sight of the goal and the target may be moving so that the process, once implemented, no longer meets the firm’s strategic needs.


When revolutionary implementation makes sense

• Revolutionary implementation works for organizations under certain conditions:– The change will occur in a small, self-contained

unit;– A real performance crisis exists and– The organization can devote extensive resources

to the implementation.

• If these conditions are lack, there is a higher risk of failure with a radical implementation plan.

Documents

SCHOOL OF BUSINESS ADMINISTRATION BA 530 – John A. Hengeveld Winter 2003 IT and Work Systems John A. Hengeveld