Introduction
For a long time, relationship between information system functions and corporate strategy was not of much interest to Top Management of firms. Information Systems were thought to be synonymous with corporate data processing and treated as some back-room operation in support of day-to-day ordinary tasks. However, in the past 2 decades, there has been a growing realization of the need to make information systems of strategic importance to an organization.
Types of Information System
For most businesses, there are a variety of requirements for information. Senior managers need information to help with their business planning. Middle management needs more detailed information to help them monitor and control business activities. Employees with operational roles need information to help them carry out their duties. As a result, businesses tend to have several “information systems” operating at the same time. This revision note highlights the main categories of information system and provides some examples to help you distinguish between them.
Executive Support System – An Executive Support System (ESS) is designed to help senior management strategic decisions. It gathers, analyses, and summarizes the key internal and external information used in the business. A good way to think about an ESS is to imagine the senior management team in an aircraft cockpit – with the instrument panel showing them the status of all the key business activities. ESS typically involve lots of data analysis and modeling tools such as “what if” analysis to help strategic decision-making.
Management Information Systems – A management information system (MIS) is mainly concerned with internal sources of information. MIS usually take data from the transaction processing systems and summarize it into a series of management reports. MIS reports tend to used by middle management and operational supervisors.
Decision-support Systems – Decision-support systems (DSS) are specifically designed to help management make decisions in situations where there is uncertainty about the possible outcomes of those decisions. DSS comprise tools and techniques to help gather relevant information and analyze the options and alternatives. DSS often involves use of complex spreadsheet and databases to create “what if” models.
Knowledge Management Systems – Knowledge Management Systems (KMS) exist to help business create and share information. These are typically used in a business where employees create new knowledge and expertise – which can then be shared by other people in the organization to create further commercial opportunities. Good examples include firms of lawyers, accountants and management consultants. KMS are built around systems which allow efficient categorization and distribution of knowledge. For example, the knowledge itself might be contained in word processing documents, spreadsheets, PowerPoint presentations, internet pages or whatever. To share the knowledge, a KMS would use group collaboration systems such as intranet.
Transaction Processing Systems – As the name implies, Transaction Processing Systems (TPS) are designed to process routine transactions efficiently and accurately. A business will have several TPS; for example: Billing systems to send invoices to customers; Systems to calculate the weekly and monthly payroll and tax payments; Production and purchasing systems to calculate raw material requirements; Stock control systems to process all movements into, within and out of the business.
Office Automation Systems – Office Automation Systems are systems that try to improve the productivity of employees who need to process data and information. Perhaps the best example is the wide range of software systems that exist to improve the productivity of employees working in an office (e.g. Microsoft Office XP) or systems that allow employees to work from home or whilst on the move.
Levels of Information System
When decisions have to be made, the time taken to make a decision depends very much on the level at which is made. There are three main levels:
- Operational Level – day-to-day decisions such as ordering new stock. These can be made by junior managers and can be done almost instantly, although there will be a procedure for getting the payments cleared by the accounts department. They tend not to like it when unexpected invoices arrive without an order number!
- Tactical level – should we promote a particular product and in which stores? Tactical information needs to be made available to middle managers, and several may be needed to agree on the decision.
- Strategic decisions are made by senior managers, possibly at board level. These need time and care, especially if the decision will require major investment, for example setting up a new plant. Detailed forecasts are made and different computer models are applied to show what might happen.
The Politics of Strategic Information Systems and Development in Organizations
Management theorists since the 1950s have linked Information and Communication Technology (ICT) to power shifts in organizations, such as the growing influence of individuals with expertise in ICTs. More generally, the adoption and implementation of ICTs have become bound up not only with how an organization accomplishes its tasks, but also with the nature of the products and services it provides. Technological innovation is inseparable from organizational change and, therefore, from the political interplay among actors within an organization. To deny or neglect the role of organizational politics in the adoption, implementation, and routinization of ICTs is to court failure and possible disaster.
Explore this political conception of ICTs in this chapter. In discussing a growing awareness of the close-knit relationships between the technology and
organizational strategy and structure, they focus on techniques for “re-engineering” organizations which have been widely adopted in the 1990s. However, they emphasize that this has not always
been accompanied by an adequate appreciation of the role of organizational politics as a vital factor in the successful development of ICT applications in different organizational contexts.
The role of ICTs in organizational change can be observed in terms of three main levels--artifacts, practices, and understandings. ICT has become embedded in organizations through the development of specific artifacts, such as personal computers, software packages, telecommunications networks, and information systems. These have necessarily been
accompanied by changes in a variety of practices, some directly related to ICT--such as the financial treatment of investments in ICT systems and the development of new roles and responsibilities for ICT personnel and end-users. Others are related to broader factors, such as the political maneuvering within organizations and the shift from hierarchical bureaucracies to 'flatter' networked organizations and business processes.
Organizational Politics and ICT Developments
As IT policies migrated towards the core strategic agenda of more organizations, the inadequacies of linear models of systems developments and other prevailing Technical framework approaches became more visible and significant. The responsibility for solving the problems that arise from these inadequacies has often been the subject of argument and attribution of blame for perceived failures. However, there has been a growing
realization that IT will be hotly contested and intrinsically political as it becomes more intertwined with strategic organizational decision making, which seldom follows a linear model. Strategic decision processes are better represented in the way that a novelist describes the ebb and flow of fortunes and ideas, unexpected accidents, interference of events from other spheres, and strongly held personal beliefs. This may seem to be a more difficult form of description than the simpler 'truths' of formal decision making models. Yet it provides a more realistic, and therefore
more effective, approach to decision making because it does not sanitize and obscure key practical issues arising from organizational politics.
IT and organizational strategy have become so intertwined that it is not surprising that vehement disputes about 'best practice' have taken place. These disputes have been heightened by the difficulties involved in trying to align organizational change with the increasingly complex options for new information and communication systems created by rapid technological innovation. It is therefore important for the development of ICT-based systems to be conducted in ways that recognize and accept the political character of organizations. If common sense tells us that organizations are political, it is necessary to explore and explain that insight seriously--not to work around it with schemes which try to ignore or squeeze out the politics.
Conclusion
Senior business managers as well as IT professionals need to take serious account of the fine details and unpredictable nature of organizational politics at all of these levels. Particular attention should be given to new understandings of how IT developments--including those embedded within BPR efforts-- will affect the politics of organizations and, therefore, be contested. Wide structural changes in the economy need to be understood and key business pressures within organizations have to be identified and translated into effective business processes and organizational practices. This is not just a technical problem of redesigning ICTs to support new business processes. It is also a political problem of understanding how to intro- duce and implement change in what the organization does as well as how those activities are carried out.
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