Bahçeşehir University Social Science Institutions Ph D. Business Program Management & Organization

1. Bahçeşehir University Social Science Institutions Ph D. Business Program Management & Organization Organizational Theory Prof. Dr. Atilla DİCLE Information Technoloy and Control Prep. by: İlhan ÇİFTÇİ

2. Information Technology Necessity Why Organizations use Computer? Why computer – based operational activites are important? Spend more money for computirazed System is logical? What is the meaning of CRM, ERP, SCH, etc? Some of the Advantages • Quick entry • Easily gather huge amounts of information • Easily taken a report • Easily Follow up organizational activities • Easily follow the financial perforrmance • Easily search for new information • ..... Bahçeşehir University - Organizational Theory

3. Evaluation of Organizational Applications of IT • 3- Adding Strategic Values • Internal Coordination External Relatioships • Intranets Intagred Enterprise • Enterprise resources E - business • Planning • Knowledge management Customer RelationshipManagemet Management Level • 2 – Decision Making and Control • Management information systems • Decision support systems • Executive information systems • Management control systems • Balanced scorecard Direction of Information System Evolution • 1 – Operations • Transaction processing system • Data warehousing • Data mining System Complexity Low High Bahçeşehir University - Organizational Theory

4. Information Technology Evolution Initially, IT systems is organizations were applied to operations, Current operations could be more performed more efficiently with the use of computer technolgy. The goal was reduce to labor costs by having computers take over some tasks. These systems became known as transaction processing systems (TPS) A TPS collects data from transactions such as sales, purchases from suppliers and inventory changes and stores them in database. Bahçeşehir University - Organizational Theory

5. Information Technology Evolution Data Warehousing – Data Mining Data warehousing The use of huge databases that combine all of the company’s data and allow users to access the data directly, create reports, and obtain reponses to what – if questions. Data mining: Business intelligence searching out and analyzing data from multiple sources across the enterprise, and sometimes from outside sources as well to identify patterns and relationships that might be significant. Bahçeşehir University - Organizational Theory

6. Information for Decision Making and Control • Through the application of more sophisticated computer – based systems, managers have tools to improve the performance of departments and the organization as a whole. • These applications use information stored in corporate datebases to help managers control the organization and make important decision. Bahçeşehir University - Organizational Theory

7. Information system for Managerial Control and Decision Making Corporate Databases Information for Decision Making Information for control Management Information System Feedback Control Systems Reporting Systems Decision Support Systems Management Control Systems Executive Information System Balanced Scorecard Bahçeşehir University - Organizational Theory

8. Organizational Decision Making Systems Management Information System (MIS) • Computer - based system that provides information and support for managerial decision making. • It is supported by organization’s transaction processing systems and by organizational and external databases. Bahçeşehir University - Organizational Theory

9. Organizational Decision Making Systems Information Reporting System (IRS) • Most common form of MIS. • It provides mid level managers with reports that summarize data of MIS, provides mid level managers with reports that summarize data and support day to day decision making Bahçeşehir University - Organizational Theory

10. Organizational Decision Making Systems Executive Information System (EIS) • Higher level application that facilitates decision making at the highest levels of management • These systems are typically based on software that can convert large amounts of complex data into pertinet, information and provide that information to top managers in a timely fashion. Bahçeşehir University - Organizational Theory

11. Organizational Decision Making Systems Decision Support System (DSS) • DSS provides spesific benefits to managers at all levels of the organization. These interactive, computer based systems rely on decision models and integrated databases. • Using decision support software, users can pose a series of what – if questions to test possible alternatives. Bahçeşehir University - Organizational Theory

12. Information for Control • Feedback Control System (FCS) • The cycle of control includes setting strategic goals for departments or the organization as whole. • FCS helps managers make needed adjustments in work activities, standarts of performance, or goals to help the organization be successful. Bahçeşehir University - Organizational Theory

13. Information for Control • Management Control Systems (MCS) • MCS are broadly defined as the formmal routines, reports, and procedures that use information to maintain or alter patterns in organization activities. • These control systems include the formalized information – based activities for planning, budgeting, performance evaluation, resource allocation and employee rewards. Targets are set in advance, outcomes compared to targets, and variance reported to managers for corrective action. Bahçeşehir University - Organizational Theory

14. Information for Control • Management Control Systems (MCS) 1- Budget • Budget is used primarily to allocate resource inputs. • Managers use the budget for planning the future and reducing uncertanity about the availability of human and material resources needed to perform department tasks. • 3- Reward System • is directed at the production process • Quality control systems specify standarts for employee participation, teamwork and problem solving 2- Computer Based Statistical Report • It is used for control outputs. • It contains data about output volume and quality and other indicators that provide feedback to middle management about departmental results. • 4- Quality Control Systems • is directed at the production process • Reward systems provide şncentives to meet goals and can heşp guide and correct employee behavior • Managers also use direct supervision to keep deparmentak work activities within desired limits. Bahçeşehir University - Organizational Theory

15. Information for Control Balanced Scorecard • It contains 4 major perspective • Financial Performance • Customer Service • Internal Business Process • Organization’s capacity for learning and growth • Managers identify KPIs’ the organization will track. • In the past, most organizations relied largely on financial accounting measures as the primary basis for measuring organizational performance, but today’s companies realize that a balanced view of both financial and operational measures is needed for successful organizational control. • The balanced scorecard is a comphrehensive management control system that bakances traditional financial measures with operational measures relating to a company’s critical success factors. Bahçeşehir University - Organizational Theory

16. Information for Control Balanced Scorecard 1- Financial Performance: Concern that the organization’s activities contribute to improving short – and long term financial performance.It includes traditional measures such as net income and return on investment., 2-Customer service: Measure such things as how customers view the organization, as well as customer retention and satisfaction. 3-Business Process: Focus on production and operating statistics, such as order fulfilment or cost per order. 4-Organizations: Potential for learning and growth, focusing on how well resources and human capital are being managed for the company’s future. Bahçeşehir University - Organizational Theory

17. Information for Control Balanced Scorecard Managers can use the scorecard to set goals, allocate resources, plan budgets, and determine rewards. It is not sufficient to use this system for small entities and also, It has become the core management control system for many organizations today, including Bahçeşehir University - Organizational Theory

18. Adding Strategic Value, Strenghening Internal Coordination • Three Primary IT tools for internal coordination are represented the figure. Bahçeşehir University - Organizational Theory

19. Adding Strategic Value, Strenghening Internal Coordination Intranet • Networking, which links people and deparments within a particular building or across corporate offices, enabiling them to share information and cooperate on projects, has become an important strategic tools for many companies. • Intranets can improve internal communications and unlock hidden information. • They enable employees to keep in touch with what’s going on around the organization, quickly and easily find information they need, share ideas, and work on projecrs collaboratively. Bahçeşehir University - Organizational Theory

20. Adding Strategic Value, Strenghening Internal Coordination Enterprise Resource Planning (ERP) • ERP system can serve as the backbone for an entire organization by integrating and optimizing all the various business process across the entire firm. • The key is that ERP weaves all of the systems together so people can see the big picture and act quickly, helping the organization be smarter and more effective. Bahçeşehir University - Organizational Theory

21. Adding Strategic Value, Strenghening Internal Coordination Enterprise Resource Planning (ERP) Transferred to Production Side Customer Feedback Model Accounts Rec. Master Data Order Received Delivery The ERP system replicates organizational process in software, guides employees through the process step – by – step, and automates as many of them as possible

22. Adding Strategic Value, Strenghening Internal Coordination Knowledge Management Knowledge management is a new way to think about organizing and sharing an organization’s intellectual and creative resources. It refers to the efforts to systematically find, organize, and make avaliable a company’s intellectual capital and to foster a culture of continuous learning and knowledge sharing so that organizational activities bbuild on what is already known. The company’s intellectual capital is the sum of its knowledge, experince, understanding, relationships, processes, innovations, and discoveries Bahçeşehir University - Organizational Theory

23. Adding Strategic Value, Strenghening Internal Coordination Knowledge Management Explicit Provide high – quality, reliable, and fast information systems for access of codified, reusable knowledge People – to – documents approach Develop an electronic document system that codifies, stores, disseminates,and allows reuse of knowledge Invest heavily information technology, with a goal of connecting people with reusable, codified knowledge Tacit Channel individual expertise to provide creative advice on strategic problems Person – to – person approach Develop networks for linking people so taht tacit knowledge can be shared. Invest moderately in information technology with a goal of facilitating conversations and the personal exchange of tacit knowledge Knowledge Management Stratagy. Information Tec. App. Bahçeşehir University - Organizational Theory

24. Adding Strategic Value, Strenghening External Relationship External Applications of IT for strengthening relationships with customers, suppliers, and partners include systems below: Intagrated Enterprise.. E –Business Organization Design Supply Chain Management Customer Relationship Management (CRM)

25. Adding Strategic Value, Strenghening External Relationship Intagrated Enterprise Extranets play a critical role in today’s integrated enterprise. The integrated enterprise is an organization that uses advanced IT so enable close coordination within the company as well as with suppliers, customers, and partners. An important aspect of the integrated enterprise is supply chain management, which means managing the sequence of suppliers and purchases covering all stages of processing from obtaining raw materials to distributing finished goods to consumers. Bahçeşehir University - Organizational Theory

26. Adding Strategic Value, Strenghening External Relationship Customer Relationship Management (CRM) CRM system helps coodinates sales, marketing, and costumer service departments so that all are smoothly working together. Advanteges Provide Better Customer Service with a customer master data Discover New Customers Help Sales Staff Close Deals Faster Make Call Centers More Efficient So forh... Bahçeşehir University - Organizational Theory

27. Adding Strategic Value, Strenghening External Relationship E – Business Organization Design • E – Business can be defined as any business taht takes places by digital processes over a computer network rather than in a physical space. • Most commonly, e –business refers to electornic linkages over the Internet with customers, partners, suppliers, employess or other key constituents. • In the early days, of e – business many organizaitions set up dot – com initiatives with little understanding of how those activities could and should be integrated with their overall business. As the reality of e –business has evolved, companies have gained valuable lessons in how to merge online and offline activities. Bahçeşehir University - Organizational Theory

28. Adding Strategic Value, Strenghening External Relationship E – Business Organization Design – Inhouse Division An In - house division offers tight integration between the Internet operation and the organization’s traditional operation. The organization creates separate units within the company that functions within the structure and guidance of the traditional organization. Bahçeşehir University - Organizational Theory

29. Adding Strategic Value, Strenghening External Relationship E – Business Organization Design – Spin - Off • To give the internet operations greater organizational autonomy, felexibility, and focus, some organizations choose to create a separate spin – off company. • Exp. • Barnes & Noble • Whirpool (Brandwise.com) • Magic Tricks Separate E -Business Company Bahçeşehir University - Organizational Theory

30. Adding Strategic Value, Strenghening External Relationship E – Business Organization Design – Partnership • Partnerships, whether through joint ventures or alliances, offer a middle ground, enabling organizations to attain some of the advantages and overcome some of the disadvantes of the purely in –house or spin off options Bahçeşehir University - Organizational Theory

31. Summary • 3- Adding Strategic Values • Internal Coordination External Relatioships • Intranets Intagred Enterprise • Enterprise resources E - business • Planning • Knowledge management Customer RelationshipManagemet Management Level • 2 – Decision Making and Control • Management information systems • Decision support systems • Executive information systems • Management control systems • Balanced scorecard • 1 – Operations • Transaction processing system • Data warehousing • Data mining Direction of Information System Evolution System Complexity Low High Bahçeşehir University - Organizational Theory

32. Questions and Explanations Bahçeşehir University - Organizational Theory