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Summary Management Information Systems (part 1)
- Instelling
- Maastricht University (UM)
detailed and precise summary of all the articles included in the course (together with the second half of my summary)
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MIS: summaryMcAfee, A. (2006). Mastering the three worlds of information technology
Corporate IT spending has increased a lot throughout the years. American companies spend as much on IT
as they do on offices, warehouses etc.
One of the main problem companies face is coping with the abundance of technologies in the marketplace.
Disappointment, delays and failures are still common in the usage of IT à aligning business and IT strategy
is a major problem.
The author believes that executives have 3 roles to play in managing IT: they must help select technologies,
nurture their adoption, and ensure their exploitation. However, managers don’t need to do those 3 things
for each new technology. Different types of IT result in different kinds of organizational change when they
are implemented, so executives must tailor their roles to the technologies they’re using. Executives should
look at IT projects as periods of organizational change rather than technology installations.
Building an effective IT model
Technological projects are becoming managerial challenges rather than technical ones. Moreover, a well-
functioning IT department isn’t enough à managers have to implement these projects. Managers often do
not know when and how they should get involved. That’s because of few reasons. First, executives operate
without a comprehensive model of what IT does, how it can affect companies, and what managers have to
do to ensure that IT initiatives succeed.
Two professors argued that a good model or theory does two things: it groups important phenomena into
categories, and within categories it makes statements of cause and effect.
A good way to build a comprehensive model is to place IT in a historical context. It is generally agreed that
IT is the latest in a series of general-purpose technologies (GPTs), innovations so important that they cause
jumps in an economy’s normal march of progress. Companies can incorporate some GPTs into products and
others into processes, but all of them share specific characteristics. These technologies’ performance
improved over time, and they deliver greater benefits as people invent or develop complements that
multiply the power, impact and uses of GPTs. The complements of process GPTs are organizational
innovations, or changes in the way companies get work done. Research suggests that four organizational
complements (better-skilled workers, higher levels of teamwork, redesigned processes, and new decision
right) allow process GPTs to deliver improved performance.
All of this is also true for IT, but information technologies don’t enjoy the same relationship with the four
organizational complements. Some ITs can deliver
results without the complements being in place, others
allow the complements to emerge over time, and others
impose the complements needed as soon as companies
deploy the technologies.
Based on those 3 variations, we can classify IT into 3
categories. (table)
Each offers companies distinctive capabilities, delivers
unique benefits, and triggers different organizational
changes.
The three categories of IT
Function IT (FIT) includes technologies that make the execution of standard tasks more efficient, for instance
word processors and spreadsheet. People can get the most value from these technologies when their
complements are in place but can also use FIT without all the complements. FITs don’t bring their
complements with them. Companies must identify the complements FIT needs and either develop them or
allows users to create them. These technologies have two main capabilities: enhancing experimentation
capacity and increasing precision.
Network IT (NIT) provides a means by which people can communicate with one another. Network
technologies include e-mail, instant messaging, blogs etc. NIT allows people to interact, but it doesn’t define
how they should interact. It gives people freedom to experiment instead of telling them what they must do.
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,MIS: summary
Unlike FIT, NIT brings complements with it but allows users to implement and modify them over time. NIT’s
principal capabilities include:
• Facilitating collaboration: network technologies allow people to work together but don’t define who
should work with whom and on what projects.
• Allowing expressions of judgment: NITs are egalitarian technologies that let people express opinions.
• Fostering emergence: “emergence" is the appearance of high-level patterns or information because of
low-level interactions. These patterns are useful because they allow managers to compare how work is
done with how it’s supposed to be done. Emergence is also valuable for users.
Enterprise IT (EIT) is the type of IT application that companies adopt to restructure interactions among
groups of employees or with business partners. Applications that define entire business processes, such as
CRM and SCM, fall into this category. Unlike NITs which percolate from the bottom, enterprise technologies
are very much top-down; they’re purchased and imposed on organizations by senior management.
Companies cannot introduce EIT without introducing new interdependencies, processes, and decision rights.
Moreover, companies can’t slowly create the complements to EIT; changes become necessary as soon as
the new systems go live. EIT’s primary capabilities include the following:
• Redesigning business processes: EIT gives managers confidence that employees will execute processes
correctly.
• Standardizing workflows: once companies identify a complementary business process, they can
implement it widely and reliably along with the EIT.
• Monitoring activities and events efficiently: EITs can allow managers to get an accurate and up-to-date
picture of what’s happening throughout the enterprise.
Managing the three types of IT
Across the 3 IT categories, executives have 3 tasks. First, they must help select IT applications that will deliver
the organizational capabilities they desire. Second, they must lead adoption efforts that result in the creation
of complements for those technologies. Third, they must shape the exploitation of IT by ensuring that
technologies, capabilities, and complements stay aligned.
IT selection
Companies often select IT applications after one of their executives hears about a new technology
(àpervasive approach). Companies will invest in a technology because everyone else in the industry has
purchased it or because it comes with recommendations from other parties. However, due to the huge
amount of new applications, companies can’t possibly evaluate all of them. Another problem is that this
method of choosing applications reflects an outside-in approach à outside technologies might not work for
a company.
Managers should ask “what do we want IT to do for us?”. Managers should also set IT priorities.
An inside-out approach puts the spotlight squarely on the business before evaluating the technology
landscape; it focuses on the capabilities that IT can provide rather than on the technologies themselves.
Once the company’s business needs are clear, the technology required will come to focus. Typically, FIT
delivers productivity and optimization, NIT increases collaboration, and EIT helps standardize and monitor
work.
IT adoption
Adoption is executives’ hard work of putting the technologies they’ve invested in to productive use. At this
stage, managers’ main responsibility is to help create the complements that will maximize IT’s value. FIT
doesn’t bring its complements with it, so managers must find ways of identifying them.
Regarding NIT adoption, since the use of such technologies is voluntary, they make users feel more in control
of their work. As a result, their adoption isn’t difficult. However, managers still have to intervene with new
technologies by demonstrating how they can be used and by setting norms for participation. Once
technologies are established, the challenge for managers is to refrain from intervening too often or too
heavily.
EIT instead is hard for companies to adopt. The benefits look great to people at the top, but employees
usually dislike EITs. Unlike NIT, they don’t just enable new ways of working; they dictate them. Enterprise
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,MIS: summary
systems define new cross function business processes, impose the processes on employees, and bring high
levels of oversight. Executives must intervene forcefully throughout EIT adoption efforts because new
processes, changed decision rights, and greater interdependence come in hand with these technologies.
The biggest mistake business leaders make is to underestimate resistance when they impose changes in the
ways people work.
EIT adoption can give rise to several kinds of problems. Sometimes, some businesses don’t abandon EIT
projects when they should, which negatively impacts performance.
All the successful EIT adoptions have used the same process for avoiding failure. They have decided at the
outset how key issues about configuration and other aspects of the adoption will be raised and how they
will be settled. The most important participants in this task are business leaders from areas affected by the
new technology.
Leaders who successfully implement EIT try to build consensus in the organization, but they’re also willing
to push ahead without having everyone on board at every step.
IT exploitation
A business leader’s third IT-related responsibility is to extract the maximum benefit from technologies once
they’re in place.
Companies can best exploit FIT by fine-tuning organizational complements.
Employees exploit older NITs on their own, but leaders have a role to play in exploiting newer technologies.
They can help sustain and increase the use of complements to make the technology more effective, primarily
by guiding users.
EIT’s exploitation is often easier than its adoption. Since the work of imposing new processes is done by this
stage, the manager’s task is to leverage already standardized data and workflows. Exploiting EIT sometimes
requires adding a new FIT on top of it.
Some companies have exploited EIT systems by extending them to customers, suppliers and joint-ventures
partners. That expands businesses’ monitoring capabilities and provides levels of control that they could
have otherwise achieved only by employing more people.
For a resource to have an impact on a company’s competitive position, it must satisfy the VRIO criteria. At
first glance, it would seem that all the 3 categories fail to meet these criteria. However, people often forget
that while the software itself might not be any of those criteria, a successfully implemented system isn’t
easy to replicate. Because of the managerial challenges inherent in its implementation, IT meets all four
criteria when a company succeeds in applying a technology and, consequently, gains valuable capabilities.
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, MIS: summary
Brown, C.V., DeHayes, D.W., Hoffer, J.A., Wainright Martin, E. & Perkins, W.C. (2009). Managing Information
Technology, Pearson Education. Ch.10: Methodologies for custom software development.
Methodologies for custom software development
Until 1980s, it was very common to have software applications that were custom-developed for a specific
firm. Applications were either developed in-house, or provided by an external vendor who could provide IS
knowledge on a temporary basis or develop the software himself.
Nowadays, firms are more likely to purchase software packages. However, customer software development
skills are still in high demand.
There are two approaches to developing customized applications:
- Traditional systems development cycle (SDLC) approach
- Evolutionary prototype approach.
Systems development life cycle methodology
The 3 phases of a systems life-cycle process are definition, construction and implementation. This traditional
life cycle process for developing customized applications is referred to as the systems development life cycle
(SDLC).
The SDLC steps
The generic SDLC methodology includes 3 phases and 8 steps, but the
specific steps can vary across organizations.
The definition phase is critical: it justifies the systems development work and
defines precisely what the systems must do in sufficient detail for IS
specialists to build the right system.
In the construction phase, the IS specialists produce a working system
according to the specifications set forth in the previous phase, which include many of the structured
techniques and IS control concerns.
A key characteristic of the SDLC approach is extensive formal reviews by project team members and
management at the end of each major step.
In the implementation phase, the new system is installed, becomes operational, and it is maintained
(modified) as needed. These last 2 steps (operations and maintenance) are included in the life cycle to
formalize that large custom applications are major capital investments. Usually, softwares were modified
many times to adapt to changes in the organization’s requirements.
Usually, the Requirements Definition step is the costliest à extensive, upfront time is spent determining the
business requirements for the new custom software application à to avoid expensive changes later.
The traditional SDLC approach has been defined as the “waterfall” model: the outputs from one step are
inputs for the next step. However, in practice, an organization could have to take more of a “spiral” approach,
returning to earlier steps to change a requirement or a design.
Initiating new systems projects
Organizations vary in the approaches they use to decide which new applications to invest in. In many
companies, the process begins with the submission of a formal proposal by a business department. When
substantial investments and resources are involved, the department might have to wait for an annual
approval.
A proposal that describes the need for the software application with a preliminary statement of potential
benefits, costs, scope and risks will be prepared by business management. The extent to which IS
professionals are involved in this phase varies across organizations.
Once the proposal has been approved, the formal SDLC process begins. Sometimes, a program is reviewed
after each phase or step à incremental commitment.
Definition phase
o Feasibility analysis
For the first step of the SDLC process, a project manager and system analysts work with business managers
to prepare a thorough analysis of the feasibility of the proposed system. 3 types of feasibility will be assessed:
economic, operational, technical.
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