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ICT Management1 Module 1: introduction to ICT
1.1 ICT in a business environment
1.1.1 Importance of ICT management
Information systems are everywhere
An organization is a system
o It consists of parts that work together to achieve a certain goal
=> ultimate goal = produce added value for customers
Classic commercial business => draw profit from the
added value
Government organization => delivering added value =
a useful service to the citizens
o IT-system = input & output machine
o Business process = structured set of activities executed in an
organization
Needs time, space & resources
To be executed
Used for complex operations, requiring multiple
resources
o Activity = a simple action, normally part of a business process
To execute an action => sub-activities are executed
in a prescribed order
Elementary activity = activity that cannot be
reasonably split into sub-activities
Simpler operations, using less complex resources
& limited in time & space
o Exact split between business processes & activities =
unclear elementary activities = clear
o Business function = collection of related business
processes
The value chain
o Organization executes sequences (reeksen) of business
processes belonging to different business functions
Each process = creates added value & increases
value of product
o Value chain = a sequence of business functions via which
business processes are sequenced to produce
products/services with added value
Concept has been developed by Michael Porter
Business functions = activities
Product evolve through all the functions
with each function adding value
A number of business functions of the
value chain = primary activities
Support activities = these ensure that primary activities can run smoothly
Value chain model can be used to develop a competitive advantage
It can be realized by systematically examining all activities along the chain
,1.1.2 Information technology in business
Organizations use information systems to support & automate business processes = business information systems
3 ways to use ICT in business:
Data processing
o First phase
o Individual business processes = supported by storage & processing of data used by these processes
o Only isolated business processes or small groups of business processes are involved
o E.g. cash book => accounting, elaboration of a business plan => spreadsheet program; PC with a text processing
app => creating meeting reports
Task automation
o Used to make execution of (groups of related) business processes more efficient
o Differs from data processing in ways
Aim for automation of complete business processes
Automate groups of related processes or complete functions using a single information system
o Properties (eigenschappen)
Monolithic systems automating many business processes
Strong integration between supported business processes
Structure of applications follows hierarchy of business processes in the organization
o Example = accounting software, production planning software, app for management of student data at uni
Integrated information systems
o Automate complete business processes along value chain
o Along value systems, interconnecting other organization
o Properties
Integration = different parts of the system are designed
to work together
Optimally support the vale chain e.g. ERP
(enterprise resource planning) => extensive
integration of all parts of the app to achieve
optimal support of value chain (aanpassen naar eiegn onderneming bv. SAP)
Adjustment of business processes to information systems = some processes are modified to align them in
a (predefined) way in which information systems handles them
Complex systems = implement & use, containing several computer systems, running specific & complex
software & interconnected by networks
o Important when implementing integrated information systems
Structured approach = design & introduction is done via methodology, prescribed sequence of activities
Vision & strategy => introduction of information systems fully adapted to business
Integrated information systems task automation => adapting more fragmented approach
Consider whole organization = consider all aspects of the business (activities what & where, for who…)
Vision = starting from business strategy & values => IT strategy (determine which information system)
Architecture = information system is designed as 1 single entity
Develop subsequent models of the system => each model: indicating the components & how
components must work together
Change = new hardware & software will be introduced + business processes are modifies
Organizational structure may have changed
Challenges: identification of good reasons for change + orchestration of all changes
Several phases = cannot change everything at once
Not only information technology specialists = not only task of IT especially during initial phases
Participation of management & users are essential (stakeholders)
, Benefits of information systems (3 levels)
Operational benefits
o Daily business processes more efficiently
o E.g. time savings, better supply management, lower communication costs, ...
Tactical benefits
o Organization can better realize its goals
o E.g. marketing campaigns, on-line knowledge databases, on-line parcel tracking
Strategic benefits
o The business develops a better strategy (niveau van de groep =>
o E.g. Internet companies have turned sale of products over Internet into corporate strategy
Not all benefits can be expressed in terms of money
Quantifiable benefits
o Represent an amount of money
o Can be estimated in advance
o Can be compared to the cost
o E.g. Stock decreases, personnel savings
Non-quantifiable benefits
o Cannot (or can hardly) be expressed in money
o May however be important
o Should also be weighed in against the cost
o E.g. Better customer service, high tech image
ICT & competitive advantage
Use of information systems to lower costs below level of competitors or deliver better products/services
IT resources = hardware, software & people on the market => commodities => not lead to any diversifaction mutual
IT capabilities = the way an organization use the resources => necessary to select the appropriate resources
o Use in correct & efficient way & manage properly
Organizations cannot make difference with resources but by developing IT capabilities
1.1.3 Main components of ICT management
Information systems = complex => especially for integrated information systems automating complete business processes
The conception, design & management involves different aspects, concerning business, functions of systems & technology
Effort is required to manage information systems (support & maintain)
Framework is useful for:
o Allow to structure information system design & management activities by describing a life cycle for information
systems => Should contain methodologies to develop & support information systems
o Provides a way to structure design & management of products by outlining different views of the system => each
view describes a system for different stakeholder
useful for communication between development & maintenance stakeholders
o separates responsibilities of stakeholders
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