Managing & Using Information Systems

Managing and Using Information Systems: A Strategic Approach, Sixth Edition, conveys the insights and knowledge MBA students need to become knowledgeable and active participants in information systems decisions. This text is written to help managers begin to form a point of view of how information systems will help, hinder, and create opportunities for their organizations. It is intended to provide a solid foundation of basic concepts relevant to using and managing information.

Keri E. Pearlson is the author of Managing and Using Information Systems: A Strategic Approach, 6th Edition, published by Wiley.

Carol S. Saunders is the author of Managing and Using Information Systems: A Strategic Approach, 6th Edition, published by Wiley.

Preface iv

Acknowledgments vii

About the Authors viii

Introduction 1

The Case for Participating in Decisions about Information Systems 2

What If a Manager Doesn’t Participate? 5

Skills Needed to Participate Effectively in Information Technology Decisions 6

Basic Assumptions 8

Economics of Information versus Economics of Things 12

Social Business Lens 14

Summary 15

Key Terms 16

1 The Information Systems Strategy Triangle 17

Brief Overview of Business Strategy Frameworks 19

Business Models versus Business Strategy 21

Brief Overview of Organizational Strategies 25

Brief Overview of Information Systems Strategy 26

Social Business Lens: Building a Social Business Strategy 27

Summary 28

Key Terms 29

Discussion Questions 29

Case Study 1‐1 Lego 30

Case Study 1‐2 Google 31

2 Strategic Use of Information Resources 33

Evolution of Information Resources 34

Information Resources as Strategic Tools 36

How Can Information Resources Be Used Strategically? 37

Sustaining Competitive Advantage 43

Social Business Lens: Social Capital 47

Strategic Alliances 47

Risks 49

Geographic Box: Mobile‐Only Internet Users Dominate Emerging Countries 50

Co‐Creating IT and Business Strategy 50

Summary 51

Key Terms 51

Discussion Questions 51

Case Study 2‐1 Groupon 52

Case Study 2‐2 Zipcar 53

3 Organizational Strategy and Information Systems 55

Information Systems and Organizational Design 58

Social Business Lens: Social Networks 63

Information Systems and Management Control Systems 63

Information Systems and Culture 66

Geographic Lens: Does National Culture Affect Firm Investment in IS Training? 70

Summary 71

Key Terms 71

Discussion Questions 71

Case Study 3‐1 The Merger of Airtran by Southwest Airlines: Will the Organizational Cultures Merge? 72

Case Study 3‐2 The FBI 73

4 Digital Systems and the Design of Work 75

Work Design Framework 77

How Information Technology Changes the Nature of Work 78

Social Business Lens: Activity Streams 84

Where Work Is Done and Who Does It: Mobile and Virtual Work Arrangements 86

Geographic Lens: How Do People Around the World Feel About Working Remotely? 88

Geographic Lens: Who Telecommutes? A Look at Global Telecommuting Habits 89

Gaining Acceptance for IT‐Induced Change 94

Summary 96

Key Terms 97

Discussion Questions 97

Case Study 4‐1 Trash and Waste Pickup Services, Inc. 97

Case Study 4‐2 Social Networking: How Does IBM Do It? 98

5 Information Systems and Business Transformation 99

Silo Perspective versus Business Process Perspective 100

Building Agile and Dynamic Business Processes 104

Changing Business Processes 105

Workflow and Mapping Processes 107

Integration versus Standardization 109

Enterprise Systems 110

Geographic Lens: Global vs. Local ERPs 113

Social Business Lens: Crowdsourcing Changes Innovation Processes 118

Summary 119

Key Terms 120

Discussion Questions 120

Case Study 5‐1 Santa Cruz Bicycles 121

Case Study 5‐2 Boeing 787 Dreamliner 122

6 Architecture and Infrastructure 124

From Vision to Implementation 125

The Leap from Strategy to Architecture to Infrastructure 126

From Strategy to Architecture to Infrastructure: An Example 133

Architectural Principles 135

Enterprise Architecture 136

Virtualization and Cloud Computing 137

Other Managerial Considerations 139

Social Business Lens: Building Social Mobile Applications 143

Summary 144

Key Terms 144

Discussion Questions 145

Case Study 6‐1 Enterprise Architecture at American Express 145

Case Study 6‐2 The Case of Extreme Scientists 146

7 Security 147

IT Security Decision Framework 149

Breaches and How They Occurred 151

The Impossibility of 100% Security 154

What Should Management Do? 155

Summary 162

Key Terms 163

Discussion Questions 163

Case Study 7-1 The Aircraft Communications Addressing and Reporting System (ACARS) 163

Case Study 7-2 Sony Pictures: The Criminals Won 164

8 The Business of Information Technology 165

Organizing to Respond to Business: A Maturity Model 167

Understanding the IT Organization 168

What a Manager Can Expect from the IT Organization 168

What the IT Organization Does Not Do 170

Chief Information Officer 171

Building a Business Case 173

IT Portfolio Management 175

Valuing IT Investments 176

Monitoring IT Investments 177

Funding IT Resources 182

How Much Does IT Cost? 184

Summary 187

Key Terms 188

Discussion Questions 188

Case Study 8‐1 KLM Airlines 189

Case Study 8‐2 Balanced Scorecards at BIOCO 190

9 Governance of the Information Systems Organization 191

IT Governance 192

Decision‐Making Mechanisms 199

Governance Frameworks for Control Decisions 200

Social Business Lens: Governing the Content 204

Summary 205

Key Terms 205

Discussion Questions 205

Case Study 9‐1 IT Governance at University of the Southeast 205

Case Study 9‐2 The “MyJohnDeere” Platform 207

10 Information Systems Sourcing 208

Sourcing Decision Cycle Framework 209

Social Business Lens: Crowdsourcing 214

Geographic Lens: Corporate Social Responsibility 220

Outsourcing in the Broader Context 224

Summary 225

Key Terms 225

Discussion Questions 225

Case Study 10‐1 Crowdsourcing at AOL 225

Case Study 10‐2 Altia Business Park 226

11 Managing IT Projects 228

What Defines a Project? 230

What Is Project Management? 231

Organizing for Project Management 232

Project Elements 233

IT Projects 239

IT Project Development Methodologies and Approaches 240

Social Business Lens: Mashups 247

Managing IT Project Risk 247

Summary 253

Key Terms 254

Discussion Questions 254

Case Study 11‐1 Implementing Enterprise Change Management at Southern Company 254

Case Study 11‐2 Dealing with Traffic Jams in London 255

12 Business Intelligence, Knowledge Management, and Analytics 258

Competing with Business Analytics 259

Knowledge Management, Business Intelligence, and Business Analytics 260

Data, Information, and Knowledge 261

Knowledge Management Processes 264

Business Intelligence 264

Components of Business Analytics 265

Big Data 268

Social Media Analytics 269

Social Business Lens: Personalization and Real‐Time Data Streams 271

Geographic Lens: When Two National Views of Intellectual Property Collide 272

Caveats for Managing Knowledge and Business Intelligence 274

Summary 274

Key Terms 275

Discussion Questions 275

Case Study 12‐1 Stop & Shop’s Scan It! App 275

Case Study 12‐2 Business Intelligence at CKE Restaurants 276

13 Privacy and Ethical Considerations in Information Management 278

Responsible Computing 280

Corporate Social Responsibility 283

PAPA: Privacy, Accuracy, Property, and Accessibility 284

Social Business Lens: Personal Data 289

Geographic Lens: Should Subcultures Be Taken into Account When Trying to Understand National Attitudes Toward Information Ethics? 292

Green Computing 292

Summary 293

Key Terms 294

Discussion Questions 294

Case Study 13‐1 Ethical Decision Making 295

Case Study 13‐2 Midwest Family Mutual Goes Green 297

Glossary 299

Index 313