IT Supports Organizational Performance in Turbulent Business Environments

Presented By: Yatin Gupta Pallavi Negi

Why IT in BUSINESS??
IT supports organizational activities that counter environmental business pressure. IT helps in exploiting opportunities created by changing environment to improve their performance and competitive edge. Today is the age of digital economy and IT helps to shift from traditional economy to digital economy. Support is a necessity for an organization to excel or survive.

Doing Business In Digital Economy

Digital Enterprise: When an organization uses computers and information systems to perform or support its activities then it is termed as digital enterprise. Objectives: 1.Reach and engage customers more effectively. 2.Boost employee productivity. 3.Improve operating efficiency.

Digital Economy: Emphasis on the convergence of computing and tele communications via the Internet resulting in the flow of information that will stimulate e-commerce online transactions etc.

Electronic Commerce And Network Computing

E-Commerce: It is a process of transaction or exchanging of products, services via the Internet or other networks.
Network Computing: It is the underline infrastructure of e-commerce which enables computer to connect via tele communications networks such as public network-the Internet. private VANs(Value Added Networks). Intranet-Internal corporate networks based on internet technology. Extranet-private intranets extended to authorized users outside the organization.

Business Models In Digital Economy

It is a method of doing business by which a company can generate revenue to sustain itself. A comprehensive business model is composed of the following 6 elements: 1. A description of all products and services business will offer. 2. A description of business process required to make and deliver the products and services. 3. A description of the customer to be served and the companies relationship with these customers. 4. A list of the resources required and the identification of which ones are available. 5. A description of the organizations supply chain, including suppliers and other business partners. 6. A description of the revenue expected and estimated profitability.

Information System collects, processes stores, analyses and disseminates information for a specific purpose. It includes input(data, instructions) and output(reports and calculations). A feedback mechanism may be included. Information Technology is termed as collection of computing systems used by an organization.

Information Systems and Information Technology

Computer Based Information System

Uses computer technology to perform some or all of its intended tasks. Such a system can include as little as a personal PC. Every system includes the following components: Hardware set of devices such as processor Software set of programs that instructs hardware Data is essential part processed by the system. Network it is a connecting system. Procedures set of instructions. People individuals who work.

Strategic Business Objective Of Information System

Operational Excellence New Products, Services and Business models Customer and supplier intimacy

Improved decision making

Competitive advantage Survival

Business Performance Management

Business Environmental Pressures

Some create constraints that limit the flexibility required for an agile organization. Some cost a great deal of money and create a considerable headache. Some pressures may also come from business partners.

Organizational Responses

STRATEGY FOR COMPETITIVE ADVANTAGE AND IT SUPPORT

How to attain our mission,goals and objectives Address issues such as companies position in its industry,its available resources and options and future directions. Answer to all these questions was best explained by PORTERS competitive force model

Porters Model
Porters Competitive Forces Model has been used to develop strategies for companies to increase their competitive edge. It also demonstrates how it can enhance competitiveness. The model recognizes 5 major forces that could endanger a companies position in a given industry.

Porters Value Chain Model

According to porters value chain model, the activities conducted in any manufacturing organization can be divided into two parts: Primary Activity These are the business activities through which a company produces goods thus creating value for which customers are willing to pay. There are 5 primary activities namely 1.Inboung Logistics 2.Outbound Logistics 3.Operations 4.Marketing and Sales 5.Services Support Activities Primary activities are supported by the following support activities namely 1.Firms infrastructures 2.Human Resource Management 3.Technology Development 4.Procurement

Adaptive Organizations
Adaptive Enterprise: They respond in a timely manner to environmental changes. Process of becoming an adaptive organization: 1.Recognise environmental and organizational changes as quickly as they occur. 2.Deal with the changes properly and correctly. 3.Not wait for competitors to introduce change. 4.Have a scalable and appropriate IT architecture. 5.Develop an innovation culture.
HP Model:

To be adaptive IT must be sync with business processes(collection of activities performed to accomplish clearly defined goal with starting and ending points) Real Time System is an information System that provides fast enough access to information or data so that appropriate decision can be made eg. Buying a stock etc.

INNOVATION AND CREATIVITY

Organizational responses are usually taken in reaction to change in business envoirnment or to competitors actions.Sometimes such responses may be too late. A first mover strategy is risky,but can be very rewarding if succesful. EXAMPLES: 1)Successful first movers :

2)Companies that have first mover advantage,but lost the marketplace battle to late movers:

SOCIAL COMPUTING
Concentrates on improving collaboration and interaction among people. It is shift from top down management and communication with their activities become a major organization power. People collaborate online , get advice from one another and from trusted experts and find goods and services they really like. Social Network: It is a website where people create their own space on which they write their blogs , share videos , music.These sites allow users to build their home page for free which is then referred to as social networking. Virtual World: It is a computer based stimulated envoirnment intented for its users to inhabit and virtual spaces interact via avatars(usually depicted as 2d,3d etc)

What is new in Management Information System??

Emerging mobile digital platforms

Growth of online software as a service

Growth of cloud computing

Dimensions of information system

Organizations Management Technology

ORGANIZATIONS: Key elements of an organization are its people,structure,business process,politics and culture. Organizations have structure that are compoosed of different levels Senior management: Makes long range strategic decisions and ensures financial performance of firm.

Middle Management:Responsible for monitoring daily activities of the business.Knowledge workers such as engineers,scientists comes under this category.
Operational Management:It consists of production and service workers who actually produce the product and deliver the service.

Management: Management job is to make sense out of many situations faced by organizations,make decisions, and formulate action plans to solve organizational problems. A substantial part of management responsibility is creative work driven by new knowledge and information.
Technology: Information technology is one of many tools managers use to cop with the change. Computer hardware:physical equipment used for input,processing and output activities. Computer software:preprogrammed instructions that control and coordinate computer hardware. Data management technology:consists of software governing the program.

Management information system

Management information systems enables companies to track sales data,expenses,productivity levels,profitability over time,identify areas of improvement and use the data as a part of their strategic planning process. Various approaches to management information system: Technical approach Behavioral approach

Types of information system

Transaction processing systems(TPS) Management information system(MIS) Decision support systems(DSS) Executive support systems(ESS)

Transaction processing system

It provides information regarding sales,receipts,cash deposits,payroll,credit decisions and the flow of material in a factory. For example a payroll TPS system keeps the track of money paid to employees.

Decision support system

It supports non routine decisions making for middle management. They focus on the problem that are unique and rapidly changing. DSS uses internal information from TPS and MIS and some information from external sources to take the decision of any problem in advance.

Executive support system

It helps senior management to make the non routine decisions requiring judgement,evaluation and insight because there is no agreed on procedure for arriving at a solution.

How to manage these systems??

Enterprise application: These are the systems that span functional areas,focus on executing business processes across the business firm and includes all level of management. Four major enterprise applications are 1)Enterprise systems 2)Supply chain management systems 3)Customer relationships management systems 4)Knowledge management systems

Enterprise systems
Enterprise systems,also known as enterprise resource planning(ERP) systems solve this problem by collecting data from various key business processes .

Supply chain management systems

It helps businesses to manage relationships with their suppliers. The objective is to get right amount of their products from their source to their point of consumption with least amount of time and least amount of cost.

Customer relationship management systems

Helps firm in managing their relationships with their customers. Its main motive is to provide better service to existing customers and increase sales.

Knowledge management systems

Enables organizations to better manage processes for capturing and applying knowledge and expertise. It supports processes for acquiring,storing,distributing and applying knowledge as well as processes for creating new knowledge and integrating it into organization.

Impact of IT on organizations
Transaction cost theory:

Agency cost theory:

Flattening of organizations: