Organization theory and design: Lecture 17

17

Information Technology &
Knowledge Management

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Evolution of IT
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First line management is typically concerned with well defined problems
about operational issues and past events
Top management on the other hand is concerned with uncertain,
ambiguous issues, such as strategy and planning
First step in this evolutionary process was based on the notion of machine
room efficiency – current operations could be performed more efficiently
with the use of computer technology
From these Transaction Processing Systems, data would be stored in
databases
Recent advances are Data Warehousing (use of huge databases that
combine all of a company’s data and allows users to access the data
directly, create reports, and obtain responses to what-if questions
Data Mining software's help make sense of all this data

MIS provides information and support for managerial decision making. Its
types include Information Reporting System and Executive Information
System
A Decision Support System provides specific benefits to managers at all
levels of the organization
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IT as a Strategic Weapon
• This is the highest level of application
• Strategies can be refined through better internal and
external data collection and analysis techniques
• Internal applications include networking, intranet,
enterprise resource planning
– ERP systems collect, process, and provide information about a
company’s entire enterprise, including order, processing,
product design, purchasing, inventory, manufacturing,
distribution, etc.

• Extranet
• E-commerce

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Strategic Use of IT
Low-Cost Leadership & IT
1. Operational efficiency (ERP)
2. Interdepartmental coordination
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boundaries dissolving between departments and
organizations

1. Rapid resupply
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business tied with suppliers through computers, EDI

1. Automotive Network Exchange (ANX)
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It is a virtual private network that allows companies
in the auto industry to transmit EDI data over the
web
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Strategic Use of IT
Differentiation & IT
1. Lock in customers through computers on
which the customers place orders
directly
2. Improving customer services with IT
3. New product development

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