Information System Design: A Systematic Way to Analyze IT in Your Business

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Information technology investments must be thought of in terms of a firm's overall information system. This report explains and illustrates two frameworks that emphasize the role of IT as a fundamental component of organizational information systems, namely, the socio-technical model of information systems (STM of IS) and the information systems cycle. The STM integrates all internal and external factors that bear on the design, implementation, operation, and eventual success of an IT initiative. Using this model requires an analysis of the following factors: the IT hardware and software itself, the people with direct involvement in the information system, the process that those people follow in completing a business activity, and the business's structure, including its organizational design and formal and informal reporting relationships. All of those internal factors and their interactions are cast against the broader context of influences that enable or constrain the business's opportunities. To illustrate the STM, the report examines the case of Nestlé USA's implementation of an enterprise resource planning system. The second framework, the IS cycle, models the business's use of information systems over time, including routine operations and change initiatives. The model's basic concept is that today's information is a valuable asset that, appropriately managed by way of information-system initiatives, can create tomorrow's business opportunities. In illustrating this model the report presents the case of Harrah's Entertainment. By focusing on customers' use of a business intelligence program, Harrah's was first able to determine who were its best customers (surprisingly, not high rollers), and then devise ways to encourage those good customers to become even better customers while increasing the ranks of the profitable customers through an attentive attraction strategy. The concluding insights for management, which are illustrated by hypothetical situations, should help guide the design, development, management, and use of organizational information systems. In particular, it's worth noting that IT initiatives cannot precede organization change (although implementing an IT system will undoubtedly affect the entire business), one does not always need to purchase the "best" or most recent technology, and information systems are constantly evolving as a business changes.
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information technology; sociotechnical model of information systems (STM of IS); information systems cycle
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