CIS 235_ASU_WEEK 2_ASSIGNMENT_FUTURE-FOCUSED CORPORATE MANAGEMENT STRATEGY

FUTURE-FOCUSED CORPORATE MANAGEMENT STRATEGY

ARIZONA STATE UNIVERSITY

CIS 235 - INTRODUCTION TO INFORMATION SYSTEMS

WEEK 2

PURPOSE OF DISCUSSION

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Discussing the influence of the use of Information Technology on corporate strategy

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Explain the change strategy from power to empowerment

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Discuss the role of Information Technology in the company

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Explaining Information Transformation as knowledge

Introduction:

The internal and external environment of the company is always evolving and

dynamic, giving rise to opportunities or obstacles to the growth of the company. Another

cause is the decisions made by management. Company management is tasked with making

decisions, but this task is a critical aspect of the task that requires managerial ability to

integrate and develop various relevant elements into the overall company situation. In

carrying out their duties, management will be concerned about time, face risks that may

threaten the stability of the company, and these decisions must be able to be communicated to

the implementing party (company operational officers).

To deal with environmental obstacles and challenges and the ability to make decisions,

company management requires the right strategy, so that company goals can be achieved

optimally. In determining what strategy the company management will use, it requires

appropriate considerations, because it will concern the company's existence in the future.

Before determining the strategic steps that must be chosen in company management, it will

first be explained what is meant by strategy.

According to Glueck (2008:6), a strategy is a comprehensive and integrated plan that

connects the organization's strategic strengths with the environment it faces, all of which

ensure that organizational goals are achieved.

According to Robson (2007:5) strategy is a pattern of decisions on the allocation of

resources made to achieve organizational goals.

Furthermore, according to Glueck, strategic management is a number of decisions and

actions that lead to the preparation of a strategy or a number of effective strategies to help

achieve organizational goals.

Strategic management is a decision to choose a strategy and how to plan the strategy,

will have an impact on the progress of the organization through the activities of analysis,

selection and implementation of strategies that have been set (Johnson and Scholes (2003:

153).

From the above understanding, the main conclusion can be drawn that the strategy; First,

is a comprehensive and integrated organizational plan needed to achieve organizational goals;

Second, the preparation of strategies requires environmental analysis, because the

environment will determine the strengths and weaknesses of the organization; Third, the

achievement of organizational goals is faced with various alternative strategic choices that

must be considered; Fourth, the strategy that has been chosen will be implemented by the

organization and requires evaluation.

To illustrate more clearly the elements of strategic management, Robson (2012: 10)

provides an illustration in Figure 3.1.

From Figure 3.1, there are three stages that must be passed in implementing a strategy.

Company leaders before determining the strategy to be carried out, are expected to be able to

first analyze the strategy to be implemented, by analyzing the environment both internal and

external to the company, then analyzing the culture of the environment, and considering the

resources owned both natural resources, human resources and other resources. After

analyzing the strategy, then select the strategy to be implemented, by identifying alternative

options, then preparing an evaluation to then choose one of the most appropriate strategies.

The next stage is the implementation of the chosen strategy by determining the system and

personnel to be empowered in the institution, then creating an organizational structure to then

plan and allocate available resources.

From the three elements of strategy that have been stated above, according to Mintzberg

(2003) in Robson (2012: 16), there are ten provisions in planning corporate strategy which

are distinguished prescriptively how the strategy can be formulated and what must be done to

plan the company. Prescriptive interpretation will include designing, planning and

positioning the company. While descriptively will concern; ownership, awareness,

production process, political sensitivity, culture and corporate environment. The strategic

planning process is illustrated in the following figure:

3.1

The Effect of Information Technology Use on Corporate Strategy

Information technology (IT) is potentially a strategy, this implies that technological strength

is a description of the company's competitive strategy to be able to compete through changes

in industrial structure. The IT community environment views that IT applications are a part of

corporate strategy, because they are related to the planning and control functions of corporate

organizational management. To further optimize IT, how IT can generate strategic

advantages and what forms of designs or principles are available to exploit and utilize

strategic advantages To answer these two questions, the following diagram will be drawn:

At the top level, everything that is strategic is in the top position, which distinguishes it

from other groups of information systems. At this level it is commonly called the Executive

Information System, meaning that the need for strategic information is the authority of senior

managers or executives. While in the middle (Decision support System) is the responsibility

of managers who are at the middle level, managers who are in that position must be

responsible for implementing the plans that have been set by the executive. Middle-level

managers need information to perform the management control function. The implementation

of each plan can be carried out effectively with the availability of information through the

design of appropriate, effective and efficient information systems.

At the lowest level is part of the responsibility of operations managers by functioning

and monitoring every activity of the company. This means that the responsibilities carried out

are daily transactions, therefore the type of information system needs should be able to

provide facilities for activities that can be taken appropriately, this part is called (Transaction

Processing System).

To further optimize the information technology strategy, it is necessary to discuss in

advance the design architecture needed so that the objectives of the Information Technology

strategy can be achieved. The technology work design architecture consists of 4 elements as

follows:

The processing of data into information through hardware and its relationship with the

software operating system (computing).

Communication is an interrelationship and there is an interrelationship between work or

information (communication)

Data is a company asset that can be used, accessed, controlled and stored (data).

The main application system is the application and use of data to become more

informative. The information technology architecture can be illustrated in the following

Data

Application

Communication

Computing

figure:

The figure above shows the interdependence that each element affects each other. To

restructure information technology in a company, it is necessary to take appropriate steps to

further validate the principles or factors that affect it in the form of parameters, schemes,

policies and plans. Therefore, architectural actions are often associated with changes in the

management of corporate information resources.

There are 4 levels that guide the technology work design, the four levels form a work

design as follows:

Parameters; are general design parameters for each architectural element. They show the

essential needs, constraints and time preferences in achieving the overall goal.

Schemas; are the physical logic and models required for each architectural element and

how it should work.

Policies; is a practical and tangible statement of how each technology element is

delivered, by including elements of technology policies, procedural guidelines and

standards.

Plan; each company makes a number of plans with their own goals, where each plan

implementation consists of several stages, then the implementation shows movement

from the previous stage to the next stage, which is called evolution.

The formulation of information technology strategy has an impact on the information

management carried out, in a way:

1. Information technology information is a resource that is needed and managed effectively

and efficiently.

2. Information technology can affect business management, because information

technology is an integral part of the overall management of the company.

3. Business strategy depends on the availability of adequate information technology

4. Information technology is something that is inherent in business and corporate

management and organizational life.

Information technology is a company's competitive strategy, information technology

applications are the embodiment of strategic plans that have been set in the form of planning

and controlling the implementation of strategies. Information technology can assist

companies in creating products and services, which are able to compete with other

companies, in addition to being able to create product advantages that are different from their

competitors.

The confusion that occurs over the company is made possible by various basic policies

and implementation strategies that are not based on the integrity of concepts and

philosophies. A lot of thought is only devoted to micro issues, which are directly related to

the routine activities of the company. Even so, there are still many micro problems that have

not been resolved properly, due to the lack of clarity of the company's psychological and

philosophical foundations. No less important in this case is the lack of a solid foundation of

the company that can be seen from a macro perspective, social, cultural, economic and

political foundations. There is also a lack of consistency and coherence between one

foundation of thought and another at the micro and macro levels.

In the broadest sense or macro order, it is necessary to develop from being reactive and

proactive towards the development of society to being socially reconstructionistic. Being

socially reconstructionistic means that the company actively participates in giving shape and

direction to the development of the society it aspires to. In order to be self-reliant and reach

excellence, this philosophy needs to be translated into The company's strategy is visionary,

provides more strategic added value, and can improve human dignity. The company's

strategy needs to be designed to be able to reach long-term alternatives that can produce

significant changes for the company's future sustainability, in order to have a comparative

and competitive advantage over other companies.

In order for the company to have an advantage and be accepted by its consumers, it is

necessary to apply various supporting criteria, namely:

Implementation of Integrated Quality Management (TQM); in line with the demands of

national and global markets, a company must be able to produce quality products and

services. Quality products/services cannot be achieved without integrated quality control

implemented through the consistent application of the company's integrated quality

management (TQM). To achieve this goal, the most important TQM occurs within the

scope of each division of the company as the spearhead in an effort to improve the

quality of the company in an integrated manner, called by Arcaro (1995) with Total

Quality Services (TQS). He mentioned five pillars of TQS, namely; (a) Focused on the

Customer (service users), (b) The total involvement of all elements (total involvement),

Continuous improvement. These five pillars are based on beliefs, trust, cooperation and

leadership.

Implementation of Company Management Professionalism; One of the factors that

causes the quality of company products/services to be not encouraging is the low level of

professionalism of company management. This is related to many factors, the most

important of which is the weak commitment of bureaucrats and company management to

achieve excellence and their lack of skills in managing companies with an increasingly

complex spectrum of tasks and problems. To streamline the implementation of company

programs, the principles of professionalism in company management must be applied.

For this reason, company management is required to continuously improve knowledge,

attitudes, and skills in managing the company. It is not enough for company managers to

only capitalize on the will or trust imposed on them, but they must also master strategic

management professionally, so that the existence of the company can be relied upon as a

hope that will realize individual goals, company goals and stockholder goals.

3.2

Change Strategy from Power to Empowerment

Change is key in an increasingly complex and turbulent business environment. Driven by

increasingly intense technological developments, global competition, the crisis of economic

and environmental conditions and the development of other external macro conditions, each

company will make changes in unpredictable and uncertain situations.

In addition, it is necessary to understand 3 paradigms of information evolution, namely:

First, the application of information in all its forms as a commodity or asset parallel to (Man,

Money, Material); Second, the application of the order caused by the existence of information

dynamics as a separate ecosystem identical to the physical-biological system; Third, the

development of information technology that is applied as an enabler of corporate

organizations in addition to human resources.

Developments in the field of organizational management in the last 10 years are a global

product of information evolution, this is the impact of the application of Knowledge

Management (Knowledge Management) and Organizational Learning (Learning

Organization). Information Technology, Knowledge Management, and Organizational

Learning based on information or assets, is the work of managers of large companies in

developed countries as one of the conditions if a company wants to have competitiveness,

innovative power and effectiveness in controlling the 3 M assets (man, money, material).

Mastery of the 3 M as an asset has power, while mastery of information or knowledge as a set

is called Empowerment. Ownership of power is vertical, meaning that the higher up, the

stronger an organization is. On the other hand, ownership of empowerment is horizontal,

meaning that the wider the empowerment, the stronger an organization. The reality that

occurs in the process of globalization, which is less realized by various groups, is that anyone

who has empowerment is able to outperform those who only rely on power.

Davenport (2006) first described the existence of a non-physical environment as a reality

in life that has similar properties to the physical biological environment. This environment is

referred to as an information ecology or Information Ecosystem. The existence of this

ecosystem has existed for a long time, but the growth rate of information in the form of

knowledge is relatively low. Since computer science has advanced rapidly accompanied by

the rapid development of information technology, the quantity of information in the form of

knowledge has more than doubled. The rapid development of information technology is

exponential, resulting in the complexity of the environment and the complexity of the

substance of decision making. Thus, the ecosystem in the decision-making pattern

experiences obstacles due to this complexity. So it requires the integration of several

diversities of information that have the ability to evolve, the need for observation and

description that focuses on humans and the behavior of information itself.

Understanding the information ecosystem is essential to understanding the era of high

uncertainty, as well as a bridge to understanding the role of information technology,

knowledge management and organizational learning.

3.3

The Role of Information Technology

Management Information System:

Information technology is a manifestation of the development of information science

or theory. The development of information technology in the form of application systems,

operating systems and hardware in the last decade is very rapid resulting in an exponential

increase in the quantity of knowledge as a result of information transformation, the

transformation in question is a human product with or without the help of information

technology.

The exponential increase in knowledge not only brings a lot of benefits to the company,

but on the other hand it becomes a burden for company managers. The burden is the problem

of adapting company management to an information ecosystem full of turbulence,

complexity and uncertainty. Therefore, the role of information technology is needed, without

the help of adequate information technology, the existence of the company will be threatened,

this is possible because the existence of information technology will help the quantity of

human resource work transactionally, geographically, automatically and sequentially.

The phenomenon of information technology in practice is less able to be appreciated by

the company's top managers, leaders and decision makers, because there are some groups of

people in the company that the existence of information technology is "feared" because it is

too sophisticated, this is because the socialization of information technology lacks

educational aspects. But if it is observed more deeply that the ability of information

technology will facilitate the operationalization of the company, because seen from the nature

of information technology aims at adaptive not optimization.

According to Browning (2000) information technology is no longer considered a

business resource, but is considered a business environment. As Malhotra (2003) states; the

growth and development of an organization depends on the effective use of information

technology that combines organizational structure with environmental preferences and the

creation of symbiosis between organizational elements. The advantages of existing

information technology are inseparable from limitations, among the limitations of

information technology, are: First, no matter how high the advantages of information

technology, decision making remains in the strength and skills of the company's human

resources. This is because the level of development of information technology to date has not

been able to transform knowledge of wisdom. So humans are still required as experts in

strategy. Second, that there is no correlation between the selection of the type and price of

information technology with the profits obtained by a company, because no matter how good

the technology owned depends entirely on the process and strategy of managing information

by humans.

3.4

Information Transformation as Knowledge

Information can be transformed into knowledge after the information is understood in

terms of patterns and principles. The method of transforming information in individuals

depends on the results of previous learning in the form of cognitive (accumulated

knowledge), psychomotor (motor skills) and affective (behavior) experiences. Both

individuals and organizations must learn and function in transforming knowledge

information. The quality and quantity of the transformation of information into knowledge is

a key issue in the era of globalization, because transformed knowledge becomes policy in the

decision-making process. After information into knowledge has 6 characteristics, namely:

Practicality, Contextual, Experiential, Historical, Social and Individual. Currently, knowledge

has been recognized in corporate organizations as an asset that is equal to 3M, although it is

still intangible. Cumulatively for audit purposes, knowledge is referred to as intellectual

capital.

(Intellectual capital must be identified, documented and measured.

One of the methods used to measure knowledge or intellectual capital is the Balanced

Scorecard, which in addition to traditional financial measures, includes aspects of customers,

internal business processes and learning/growth: The Balanced Scorecard, in addition to

measuring traditional financial aspects, includes customer aspects, internal business processes

and learning/growth processes. Thus, wealth empowerment can also be measured, meaning

that in this era of globalization, the knowledge aspect (intellectual capital) has been

recognized as a very important asset in the company due to the development of knowledge

management oriented as a commodity.

Knowledge management is closely related to the adaptability of an organization in the

face of complex environmental changes, knowledge management is essentially centered on

the process of improving the ability to process data and information into intellectual assets

(knowledge) aimed at increasing productivity, creativity competitiveness and new values in

human resources. For knowledge management to be effective, there must be collaboration

with those responsible for information technology and organizational learning, with the aim

of auditing knowledge, establishing the ontology (nature of occurrence) of knowledge,

managing implementation strategies and establishing software to support the decision-making

process.

Some of the rapidly growing implementation strategies regarding knowledge

management practices are; Bencmarking, Downsizing, Outsourcing, Micro Management,

Business Process Reengineering (BPR), and Internet data Mining. These strategies basically

aim to make the organization leaner or horizontal, clearer core competencies, distributed

control, centralized communication mechanisms that make all elements of the organization

more empowered. One of the An alternative method of technology for companies to get

empowered results is through total reform that is carried out systematically by adhering to

knowledge management patterns through Business Process Reengineering (BPR). According

to Obolensky (1994), total reform is a company's effort to change its internal processes and

controls from a traditional functional vertical hierarchy, to a leaner and horizontal structure,

cross-functional and teamwork that focuses on the process of customer satisfaction and

comfort.

Total reform efforts that embrace business process reengineering (BPR) will be

characterized as fundamental, radical, dramatic and process-oriented. It will "hurt" many

parties as a sacrifice. Total reform can be planned starting from top strategic planning in the

form of vision and mission, then translated into mid-level planning that enters all sectors of

corporate life and finally to the operational level in the form of "Standard Operational

Procedures" (SOP).

Nowadays it is increasingly realized that only by learning a company is able to adapt to

its uncertain and complex environment, although individual human resources have learned,

but it does not guarantee that the company itself has learned and is able to face the tight

competition that exists. Learning organization can be achieved with the characteristics of the

learner is a team or team learning, common vision, mental models, individual deepening, and

system thinking. Thus, the learning organization has similar goals with elements of

technology and knowledge management, namely increasing the ability to face global

competition.

In addition to the learning organization, elements of technology and knowledge

management without adequate leadership criteria, in the face of global competition the

company is considered unable to compete because all of these elements must be controlled by

strong leadership and character. Strong leadership and character contain 3 potential elements

as follows: (1) principle-center leadership (principle-center leadership) means that leaders

must master and carry out the principles of regulating the effectiveness of human and

corporate organizations, (2) Character-based leadership (Character-based leadership)

leaders must have moral integrity, (3) value-based leadership (value-based leadership)

leaders who are able to adapt to the dynamics of the times. For the current competitive era,

value-based leaders are needed, able to adapt to the development of technology and

information as well as having empowerment, therefore the preferred company leader is to

have a forward-looking vision that has horizontal strengths that are able to manage

knowledge assets, information technology and learning organizations. This kind of corporate

leader has empowerment and ensures the growth of competitive, innovative companies in

global competition.

INFORMATION TECHNOLOGY FROM AN ENTERPRISE PERSPECTIVE:

Information Technology (IT) is another term for computer technology, which is

specialized in processing data into useful information for a company. IT continues to develop

in terms of shape, size, speed, and the ability to access multimedia and computer networks.

This development is due to the high level of competition between computer processor

manufacturers such as Intel, Motorola, Apple, DEC and others.

The development of processors has reached a very high level of speed in the last ten

years. If you look in detail at the development of each processor series, it almost coincides

with the creation of new processors with increasingly higher specifications.

Competition in processor development has driven the growth of the IT industry, as each

new processor is created, requiring new specifications, specifically associated with RAM and

secondary memory capacity such as hard disk. The creation of processors with new

specifications has challenged software manufacturers to keep up by creating new operating

systems and applications capable of optimizing processor specifications and hardware

devices as a whole;

4.1

Waves of Innovation Technology

Information technology has now become a very interesting conversation, considering that

information technology is one of the important elements that can encourage the competitive

advantage of a company, both business organizations and social organizations. It is believed

that a company that can master information technology will win the competition. For

example, in the banking business world, currently the excellence and success of a bank,

especially private banking, is very much supported by information technology, such as Bank

Central Asia (BCA) which offers various types of products loaded with information

technology, for example to facilitate customer service provided by Internet banking klick

BCA, ATMs which are all based on information technology, so that customers to transact

with the bank are easier, faster and the results are more accurate. In addition, there are many

more benefits of information technology developed by BCA in order to maintain its

marketing performance. BCA's success in developing information technology based on

internet banking is now followed by almost all banks in Indonesia, both private and

government-owned banks. This proves how powerful the ability of information technology is

in pampering its customers, in addition to being a very strong competitive tool.

Not only in the service-based banking world, manufacturing companies today do not

want to be left behind, which have successfully developed information technology in

supporting their learning process. Both primary, secondary and tertiary education institutions.

In addition to being able to develop networks with related parties such as the Ministry of

National Education, educational institutions at home and abroad, so that they can adopt

learning patterns that are easier, faster, have added value (value added) and are innovative in

finding new formulations to provide additional knowledge and skills for their students.

According to Budi Sutedjo (2012: 49), the wave of internet-based information

technology has developed through the following stages:

In the first wave, IT utilization is focused on increasing productivity and minimizing

costs. Organizations that began to implement the technology would automate their

routine activities, such as correspondence, presentation slides, making tables and balance

sheets. Applications used include Word, Excel, Power Point and Access.

The second wave; IT focused on improving the effectiveness of computer equipment use

through the construction of computer networks. This network is built by connecting

computers using cables and network cards so that printers, hard disks and other

equipment can be used simultaneously. This network can save investment costs and

speed up the distribution of data and information.

The third wave, IT is focused on generating profits through the development of

information system programs. As in a University building a network of academic

administration service information systems, financial administration service information

systems and general service information systems, all of which are based on information

technology and benefit both the University and the students served.

The fourth wave; IT is focused on assisting the decision-making process from qualitative

data. Such as the development of a decision support system (DSS/Decision Support

System) for employee recruitment, employee performance appraisal, employee career

advancement and so on (back office).

Fifth wave; IT focused on reaching customers (consumers) through the development of

internet networks. Building a massive exploration of the internet. So in this case, what is

called electronic Business (e-Business), e-Commerce was born in the business world,

which is able to reach unlimited local, national and global consumers.

The Sixth Wave; IT is developing wireless networking systems. The system allows a

person to access the internet through a computer connected to a cellular phone. Even in

the future, the internet can be accessed directly through cell phones. This wave of

innovation shows that IT can be used for effective communication with consumers and

partners.

4.2

Positive and Negative Synergies of Information Systems and Corporate Strategy

In developing a corporate strategy plan, one of the tasks is to create a portfolio of company

operations and recommend suitable strategies for each company. The portfolio is built by

considering various things such as the company's financial performance, the company's

competitive position, estimated future conditions and various other aspects. Conceptually, the

creation of a company's strategic planning is nothing difficult, but when starting to collect

information in making portfolios in the field, various obstacles arise such as competitive

conditions, company growth, company market share, and predictions of the company's future.

These constraints have an impact on the judgment made on strategic issues, and this will

affect the quality of the company's strategic planning that will be produced.

But there is one company in the process of collecting information for portfolio creation

can do it easily, because the company has synergized Information Systems with all company

activities, especially in creating a database to prepare strategic planning, and it can certainly

accelerate the process of preparing the company's strategy.

Reflecting on the discourse above, there are negative and positive synergies between

information systems and corporate strategy. In the first picture, information systems are not

able to provide the information needed by company management in the decision-making

process because they are not supported by existing information systems. In the concept of

information systems that has been known for a long time, information plays a very important

role in making decisions, including strategic decisions. The inability of the company's

information system to provide the information needed will have an impact on the company's

strategy. The resulting impact is a corporate strategy that doubts decision makers, because it

is compiled based on limited information and this is the resulting negative synergy.

Meanwhile, positive synergy is the synergy between a well-presented information

system and an adequate understanding of corporate strategy. Both will produce a good

corporate strategy and can be accounted for.

The matrix presented in the figure above is compiled based on phenomena that exist in

companies in general. If the synergy of the two elements (Information Systems and Corporate

Strategy) can be carried out ideally, then the synergy that occurs is positive, while on the

contrary, if the two elements are synergized inappropriately, negative synergies will occur. If

you look at what is meant by information systems conceptually, namely information systems

that are able to provide relevant, accurate and understandable information, adequate

simulation facilities, and on time to management, so that they can be used to make decisions.

In Quadrant I, the role of the consultant is not too great and in this case the company's

consultant is only a second opinion. Because the company has successfully developed the

strategy it implements.

In Quadrant II, the use of company consultants is not effective, because what is needed

is the search for information sources, the more appropriate consultant needed is an

Information Systems Consultant. So that the information system to be used can find the right

strategy in improving the company.

In Quadrant III, the company's condition is quite severe, because the company needs

fundamental improvements, both revamping information systems and understanding of

company strategy.

The company's consultant will be effective if the company's condition is in quadrant IV,

because in this condition the consultant can be a guide for the process of preparing the

company's strategic planning. To analyze the company's position on the matrix, because the

company will make decisions on various steps forward, whether to make fundamental

improvements or make improvements for improvement, able to provide relevant, accurate

and understandable information, adequate simulation facilities, and timely to management, so

that it can be used to make decisions.

4.3

Human-Centered Approach to Management Company

In line with the development of human life, the development of science and

technology in various fields of life has made rapid progress. The progress of science in the

field of business is no exception, which has given rise to new concepts and strategies. These

new concepts and strategies are then applied in practice by several companies that have the

opportunity to take advantage of the efficacy of these concepts and strategies. In practice, the

application of a company's concepts and strategies usually requires the application of other

concepts, either because of their inherent nature or as a support for the main strategic

concept. In addition, the application of one of the concepts and strategies implemented in the

company will affect the entire company system.

The emergence of various concepts and strategies in the company is related to the

competitive situation between existing companies. However, the emergence of the

phenomenon of competition is triggered by the rapid development and changes in

information technology that are increasingly sophisticated. The rapid development of

information technology has made many companies so valuable, because the value of the

information produced has a strategic meaning in the pattern of developing company

management. Thus information technology will be a must in managing a company, in order

to be able to develop a higher quality learning pattern and have value for its customers.

To be able to master optimal information technology, at least general prerequisites are

needed which include the readiness of both human resources and material resources.

Resource readiness is not something that is easy to fulfill, therefore companies must look for

certain alternatives that are most profitable and appropriate. One of these efforts is the

information technology outsourcing strategy, which is a strategy of mastering and utilizing

information technology by companies through third parties (Ludigdo, 2007). But this strategy

does not always provide optimal benefits and contains a number of risks, so insourcing in the

utilization of information technology becomes the main alternative.

Considering the fact that the operationalization of information technology will involve

humans and at the same time have the impact of changes caused by it, information

management should pay attention to human factors that affect the successful use of

information technology. The importance of paying in-depth attention to the existence of

human factors in information management will be related to the technological factors

themselves. Because as revealed by Luthans (2005: 27), the existence of information

technology has dramatically affected the overall organizational structure. In addition,

information technology (related to its advantages); has played a striking role in forecasting

changes in organizational structures and processes (Robey and Azevedo, 2004).

In this regard, we will elaborate on; (1) Information Technology and Competitive

Advantage, (2) Human Factors in Information Management, (3) Human-Centered

Approaches VS Machine-Centered Approaches.

Information Technology and Competitive Advantage; The relationship between information

technology and competitive advantage of institutions is that institutions need to cost-

effectively develop information technology capabilities for information technology

investment, produce appropriate systems, and achieve learning objectives with information

technology implementation. Another thing that institutions might do is to consider two

relatively new strategic approaches that, when combined appropriately, will increase the

institution's resources.- in increasing its competitiveness. According to Quinn & Hilmer,

2004) there are two strategies that can be combined, namely: (a) Concentrate resources to

achieve excellence and provide unique value to customers. (b) Seeking more strategic

external resources. This shows that the existence of information systems and the right

strategy will play a role in the institution -, and allow the institution - to obtain information

about the internal conditions of the institution -, the position of the institution - in the

competitive arena, the position of the institution - competitors, and changes in the external

environment of the institution - in order to determine the next strategy. As a component of

information systems, information technology has played a role in various aspects, ranging

from the development of services, to support services to its customers, as well as providing

tools for analyzing the decision-making process.

Information technology is a controller for the emergence of various demands and

efforts to make changes, both in the structure and organizational processes of institutions,

such as reengineering, restructuring, reorganizing or redesigning as well as changes in the

form of replacing manual systems to automation. In addition, there are several benefits from

the application of information technology by an institution including institutions - in order to

achieve competitive advantage, although not all benefits can be quantified financially.

Expectations for the mastery and development of information technology capabilities are

actually related to its consistency in providing, identifying and implementing opportunities to

meet strategic needs faster, better and cheaper than competitors.

Human Factors in Information Management; An institution - can succeed in competition

not because it only applies certain information technology, but has developed a certain

capability to apply information technology in the face of change. The capability in question is

an investment in information technology that is not limited to the value of information, but

concerns the process of mastering it. Who uses the information value, when it is used and in

what situations it is used. The value of the institution's information technology capability -

depending on human assets, technology and the relationship between technology and

institutional management -, also shows that human assets have a very important role in

mastering and developing information technology. Thus, human assets together with the

other two assets can increase the value of the institution. Institutions with valuable human

assets distribute the responsibility for solving management problems to each member of the

information technology staff. The characteristics of valuable human assets are staff who

consistently solve management problems and point out opportunities for improvement

through available information technology. With a combination of formal training, work

experience, and focused leadership, information technology staff can accumulate competence

and technological knowledge to become relevant. The relationship between people as

institutional assets - with technology assets and relationship assets in order to increase the

value of the institution - so that it is able and can win the competition, as illustrated in the

figure below:

The picture shows and at the same time becomes an argument regarding the importance

of human factors to achieve success in mastering and utilizing information technology. But in

reality, it is not uncommon for company management in an effort to achieve competitive

advantage to prioritize information technology elements, and instead ignore human resources.

Human-Centered Approaches Vs Machine-Centered Approaches; For users of various

information in institutions -, only one thing must be considered, namely effective information

management starts with thinking how people use information instead of thinking how people

use machines. The approach used in information management that emphasizes thinking

about how people use information is the Human-Centered Approach. Meanwhile, those

that emphasize how people use machines (tools) are called Machine-Centered Approach or

Information architecture (Dapenvort, 2004). Some things that distinguish between Human-

Centered and Machine-Centered in information management are technology and process

design. In machine-centered, technology and processes are designed to simplify what

machines (computers) will process, and humans are expected to adjust to the weaknesses and

limitations of computers. Whereas in Human-Centered design, it is stated that technology and

processes are designed to make human work systems more effective and satisfying. This

shows that information technology is not a very important thing in the mastery of information

management funds, because as a human-centered design, the technology and processes are

designed to make human work systems more effective and satisfying.

4.4

Information System Security, Moral, Ethical and Legal Information Technology:

System Security Information:

Information system security is a very important part of ensuring the integrity of data and the

quality of information to be produced. Several procedures have been formulated to protect

data and information, both from intentional factors and technical and ethical problems that

are expected to damage, eliminate or hinder the distribution of data and information.

The efforts made technically to overcome this are by developing a shared vision to

protect and secure data and information. The vision that has been prepared is outlined in the

form of control management procedures so that all components in the organization are

involved in security. Therefore, securing data and information is not only the responsibility of

the information stem section, but the responsibility of all components involved in the

organization.

According to Hary Gunarto in Budi Sutedjo (2012: 191-210} there are three types of

data and information control as follows: (a) Information System Control, (b) Procedural

Control, (c) and Facility Control. The three control procedures, if formulated and

implemented properly, are believed to provide optimal security for the data and information

contained in the Information System, and are able to reduce the risk of security disturbances

to the Information System as a whole.

Information System Control; this control is a way and effort to ensure that the accuracy and

validity of information system activities can be carried out when and where the activity is

operated. Control needs to be created to carry out data input activities, processing activities,

and data storage, so that system implementation can be carried out properly and safely.

Control in this case is planned to monitor and maintain the quality and security of input

equipment, processes, outputs, storage activities and distribution of information systems.

First, the quality of input determines the final result of processing, so in this case it is known

as garbage in, garbage out, meaning that errors when inputting data will produce incorrect

information. Input control consists of: (a) the use of a password and log-in name system will

limit who can access the information system, (b) detection of the data entry process, for

example, numeric fields cannot be filled in alphabetically and vice versa, (c) code entry, if in

the Administrative Services section.

For example, male and female student codes, department codes, class codes and

others. Second, process control where the computer will process data with predetermined

procedures. Process control is needed to ensure that the procedure is free from arithmetic and

logical calculation errors. Process control related to computer equipment will include: (a)

connection of supporting equipment to check code detection, (b) ensuring that the processor

used has no errors, (c) checking the compatibility of the previous program with the new

program used, (d) the availability of procedures to prevent errors from occurring, it is

necessary to provide prevention procedures through the appearance of dialog boxes that

provide information about the correct procedure. Third, output control is carried out to ensure

that the information produced does not occur errors. This is very important, considering that

the output of the Information System will be used for decision support. Standard output

control steps are carried out through; (a) checking the documents and reports produced,

whether they are in accordance with the actual calculation results, (b) checking all outputs

whether they are in accordance with the input given. Fourth, storage control of both the

process and the equipment used, this type of control includes; (a) Harddisk damage can be in

the form of physical damage or end of life, so to secure data is done with efforts; Disk

Mirroring, which is an effort to duplicate the hard disk on one data line, so that at the same

time the data is directly stored on two hard disks. Or with Disk Duplexing, which is an

attempt to duplicate the hard disk but on a different data path. This method is similar to the

disk mirroring method, the difference is that in the disk duplexing method the first and

second hard drives are made on different paths, so that if there is damage to one herdisk data

path, the server can still operate.

(b) Viruses, is a problem that is quite complicated because computer viruses can

spread quickly, both through the medium of diskettes and computer networks and the

internet. To deal with viruses practically, steps can be taken by installing and activating anti-

virus programs, such as McAfee.com Clinic (www. mcafee. com\ McAfee VirusScan Asap

(www. mcafeeasap. com), Symantec Norton AntiVirm 2001 (www. Symantec, com) and so

on. The program must be continuously updated in order to keep up with the development of

the types of viruses that are spread. (c) Control of Information Systems related to the

distribution process of data and information. Control of this distribution process includes;

1). Checking the network system used to distribute data from the transaction terminal to the

server and the information distribution path from the server to the intended terminals, 2).

Unstable electrical voltage or sudden blackouts can cause damage to a number of hard disks

connected in the network system. 3) Threat of damage to data and computers from skipping

free electrons due to lightning, especially for the network and internet environment in an

institution/organization.

Procedural Controls; To keep information services secure enough, in addition to

Information System controls, procedural controls are needed that regulate effective and

efficient personnel administration operating procedures. Matters that must be formulated in

preparing procedural controls include: (a) data and program backup procedures that are

adjusted to the level of urgency, (b) procedures for entering the computer network

environment in the organizational environment and procedures when leaving and leaving it,

their expertise and abilities.

Facility Control and Security Efforts; this is done to protect the physical facilities of

Information Technology-based Information Systems and their supporting equipment from

damage and theft. Facility control efforts can be carried out, among others, by compressing in

order to maintain the level of data traffic density on the network, encryption and description

to maintain the security of data on the hard disk or that is passing through the network.

Morals, Ethics and Technology Law Information

According to McLeod in Budi Sutedjo (2011: 90) Moral is a habit of believing in good or bad

behavior, therefore morals are social institutions that have a history and a series of rules

where all individuals must have responsibility for the behavior of their society, these morals

learn rules about behavior since a person is a child. Meanwhile, ethics is a set of guidelines

that must be followed, has standards or ideals that are accepted by individuals, groups or an

information technology community.

According to James H. Moor in Budi Sutedjo (2011: 208) information technology ethics

acts as a tool for analyzing the nature and social impact of information technology, as well as

formulating and justifying policies for using information technology. Ethics is used to

analyze the nature and socio-economic impact of the use of information technology and

efforts to accept and appreciate all activities that lead to the operation and improvement of

information technology services, as well as efforts to avoid or prevent things that threaten,

damage, and kill information technology activities directly or indirectly.

The most important ethical issues include violations of intellectual property rights, such

as the use of pirated software, e-mail bombs, hackers, crackers, privacy, freedom of access to

pornography and information technology law. Recently, many discussion forums have

encouraged the establishment of information technology law, which is expected to be the

foundation for managing the internet community.

According to Hary Gunarto in Budi Sutedjo (2011: 209) the basic ethical philosophy that

will be outlined in information technology law is often expressed in four kinds of universal

human values including; the right to solitude (the right not to be disturbed), anonymity (the

right not to be known), intimicy (the right not to be monitored) and reserve (the right to be

able to maintain individual information, (so that it is kept confidential). Hinca Panjaitan in

Onno W Purbo, (2000) adds that what needs to be accommodated again is the right to access

information or knowledge and the right to communicate. Deborah Johnson (2008) gives an

opinion that needs to be considered in the ethics of information technology, namely the right

to computer access, the right to computer expertise, the right to computer specialization, the

right to computer decision making.

Obstacles to the application of ethics and law in information technology and the internet

include the different understanding of ethics and law in each social group, both in developed

and developing countries.

According to Hary Gunarto and Budi Sutedjo (2011: 210) although the ethical and legal

issues of information technology and the internet are very complex, some actions and

behaviors that are considered unethical according to international agreements have been

successfully formulated, such as:

Access to places they are not entitled to

Damaging computer and network facilities

Wasting every resource related to people, computers, hard disk space, and

communication bandwidth.

Eliminate or damage the integrity and cooperation between computer systems

Interfering with the confidentiality of individuals or organizations

Laws are formal rules of behavior, authority or power, governance that define subjects or

citizenship. Some countries have succeeded in concretizing regulations to address actions that

are considered to violate ethics into the form of laws or Information Technology laws, for

example

Canada with types of legislation; Telecommunication Act, BroadcastingAct,

Radiocommunication Act, and Criminal Code

The United States with laws; Freedom of information Act, Privacy Protection Act, Computer

Security Act, Electronic Communication Privacy j Act, Computer Fraud and Abuse Act, Wire

Fraud Act, and Telecommunication Act.

After discussing the boundaries of morals, ethics and law put forward by McLeod, then

the relation to information technology used in the order of The organization must meet these

three criteria, namely morally, ethically and applicable law. Information technology used in a

company is a guide for a leader and his subordinates who must have moral values, ethics,

special information and as a form of law enforcement application. Therefore, the use of

information technology in every organizational activity, especially companies, requires a

better ethical culture, where the company is the center of ethics that is used as an example for

employees and all human elements involved in the company.

The need for ethical culture is needed especially in the pattern of relationships between

leaders and companies, this is the basis for determining ethical culture. If in a company will

realize ethics, then first the leadership of the company must implement ethics both through

words and deeds, because the leadership of the company is an example for subordinates.

In instilling an ethical culture in the company, there are three forms of implementation

that must be considered, namely:

Establish a corporate credo, which is a short statement that upholds the company's

values, formed through commitments with its customers, the actors involved in the

company, and commitments with society in general.

An Ethics Program is a system that designs multiple activities to facilitate leaders and

subordinates involved in the company to understand the company ethically.

Developing a company's own code of ethics or adapting to codes of ethics created by

other institutions; for example, professional codes of ethics, business ethics, etc.

The elements that make up the ethical culture in the company can be depicted in the

diagram in Figure 4.3.

Furthermore, Leod (2012) suggests that in planning ethical information technology

operations, it must fulfill 10 stages of ethical standards, namely:

Formulating the notion of ethics

Establish procedures through existing regulations

Setting sanctions

Acknowledging ethical behavior

Focusing on training programs

Carry out assigned responsibilities

Encourage ethical rehabilitation programs

Encourage the participation of professional societies to create a code of ethics

Establishing an exemplary culture

Logical Malleability, Transformation Factor and Invisibility Factor, these are explained

as follows:

Logical Flexibility; that information technology application tools will do the things that their

creators, namely programmers, want. The programmer himself will use his analysis to

capture the type of user needs, as a basis for designing the application he makes. Because for

information technology users, computers are black boxes made by information technology

practitioners.

Transformation Factor; the presence of information technology in the business world is not

only able to increase the effectiveness and efficiency of work, but will directly change the

ways in which company employees carry out their daily activities. For example, how

Electronic Mail (e-mail) can replace traditional correspondence communication, the internet

replaces the information center, the database system replaces the archive storage cabinet. The

concept of ethics develops in the transformation phenomenon, because it has shifted the

paradigm and mechanism of the company's daily activities, both between internal

components and external components. Without ethics, the world of information technology

will easily take advantage of the transformation trend.

The Invisibility Factor; Computer as a black box and information technology will work

according to the installed application. This Invisibility Factor is the "opportunity" that is most

widely used by information technology criminals, because often the leaders of organizations

including companies leave the development of applications entirely to the appointed

programmers.

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