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Mrs. Fields Cookies is a small company selling freshly baked goods through privately owned specialty stores (each store sells only Mrs. Fields products). The company has about 8,000 employees worldwide and less than 150 information systems people for a unique leverage of MIS resources. The company uses information systems extensively in its processing, communications, and other management functions, including operations of the stores and hiring sales employees. Teaching objectives include discussion of information technology architecture, organizations, management control, and strategy.

Spreadsheet supplement for case 189-056.

Describes Du Pont's attempt to follow a "small is beautiful" type approach toward implementing expert systems technology. Intended to illustrate that there is no "one right way" to implement expert systems and that the small systems approach can be a viable strategy provided that it fits the organization's culture, knowledge profile, and resource structure. Can also be used to illustrate the more general issues associated with end user adoption of new technology.

Under the leadership of Robert F. McDermott, USAA has been transformed from a property and casualty insurance company with $200 million in assets in the late 1960s to a $11 billion financial services empire in 1988. The case illustrates the value of having a CEO drive a vision of how computer and communications technologies can be used within an organization. As a result of McDermott's vision and his strong support for information services planning, USAA has one of the most technologically sophisticated operations in the insurance business. Describes a number of new system initiatives that are being put in place and can be used to discuss the challenges faced by USAA to use these initiatives to increase the competitive advantage that its technological base had given them in the past. Also includes a mission statement for the Information Services Division.

Spreadsheet supplement for case 188-102.

Faster and more flexible information technology can be converted into positive programs to help get and keep customers. It can revitalize the traditional corporate control functions. While the new technology offers managers new options for gathering, organizing, and using data, it opens new horizons for new results. Companies can get constant updates on field operations. Organizations confined by historic accounting or reporting formats can now arrange information however best suits their purposes. Technology has the power to transform the information and control function.

Describes the company's use of information technology to strengthen its position in the elevator sales and service market. Also demonstrates how information technology can be used to better manage and control a large geographically dispersed service organization.

The apparent inability of traditional modes of financial analysis like discounted cash flow to justify investments in computer-integrated manufacturing has led many managers to turn to criteria that seem more closely connected with strategy. Actually, there is no conflict between the financial and the strategic justification of CIM. There is no unbreachable gulf between the logic of DCF and the nature of CIM. All that are needed are new ways to apply DCF to CIM investment proposals. DCF usually fails to work right when companies set arbitrarily high hurdle rates for evaluating new investment projects. Despite the costs that introducing CIM entails, for many companies there is no real alternative to investment in CIM.

Describes events at Frontier from the time of the (A) case to the end of 1985. A brief description of regulations regarding the use of computerized reservations systems is also included.

A brief summary from published sources of events between the time of the (A) case and mid-1985.

Information technology is more than just computers. It must be conceived of broadly to encompass information as well as a spectrum of technologies that process the information. An important concept that highlights the role of information technology is the "value chain." This concept divides a company's activities into the technologically and economically distinct activities it performs to do business (marketing and delivery to buyers, support and servicing after sale, installation, repair, and parts inventory management, for example).

The reduction in the cost of information systems has allowed computers to offer significant competitive advantage. This new technology allows companies to redeploy their assets and rethink strategy to produce gains in market share. Interorganizational systems can change the balance of power between the buyer and the supplier. New products of higher quality and custom design can also be generated by IS technology. Management must change the way it operates. The CEO must insist that the end product of IS planning communicate the true competitive impact of the expenditures involved. Managers should ensure the confidentiality of strategic IS plans and thinking. They should not allow use of simplistic rules to calculate IS expense levels. Interorganizational IS systems have repercussions in other parts of the business; managers must encourage creativity in R&D and must not be too efficient in IS resource allocation.

Frontier, once a relatively small regional carrier, expanded rapidly after deregulation of the airline industry. By 1982 it found further growth difficult, due in part to its rivals' aggressive--and, according to Frontier, unfair--use of their computer reservations systems. Describes Frontier's current systems and its strategy for future systems. Frontier Airlines, Inc. (B) provides a follow-up.

Changes in the application of computers have altered the manufacturing process. New capabilities include flexibility in product design and mix; rapid response to changes in market demand, output rates, and equipment scheduling; greater control, accuracy, and repeatability of processes; reduced waste, lower training and maintenance costs; greater predictability in all manufacturing operations; faster throughput; and distributed processing capability. Economies of scope exist where the same equipment can produce multiple products more cheaply in combination than separately. As the economic order quantity (EOQ) approaches 1 and as making the proper trade-off between changeover costs and inventory costs becomes a trivial problem, producers will find it as economical to manufacture one unit as to manufacture many. Computer-based technology reverses the trend toward specialized hardware by placing emphasis on specialized software instead.

How does an organization decide which information processing project gets top priority? Many factors affect decisions on priorities, each in a different way, including financial benefits, business objectives, intangible benefits, and technical importance. The question of who should define information processing priorities further complicates the issue. Although the process of setting priorities is somewhat iterative, it involves eight discrete steps.

Information technology alters the individual's relation to the task. The new relationship is called "computer-mediated." The computer mediation of simple jobs creates tasks that are routine and unchallenging, while demanding focused attention and abstract comprehension. The "information environment" refers to the quality of organizational life when the computer mediates jobs and influences both horizontal and vertical relationships. Computer mediation shifts the overall shape of the organization from a pyramid to a diamond because managers will perform a variety of tasks that others once did for them, thereby diminishing clerical support staff and swelling the number of professionals and middle managers.

Managers avoid information system (IS) failure by determining the risk of their projects, singly and as a portfolio, in advance of implementation. Elements of risk include project size, experience with technology, and project structure. Companies should use risk assessment questionnaires to highlight risks and to suggest alternative ways of conceiving and managing the project. A periodic review of the questionnaire reveals major changes. During the feasibility study stage, it is also useful to consider the issues that influence the risk profile of project portfolios. The risk profile includes projects that come from outside software houses as well as those of internal systems development groups.

Policy-making executives can take steps to manage growing data processing resources by analyzing the stages of growth in a company's DP function in terms of six projected stages of growth. In 1977, half of the nation's larger companies were found to be in stage three or four. Levels of achievement can be measured against benchmarks, which, in the first stage of analysis, involve assessment of the data processing expenditure curve. Stage two of this analysis involves defining business functions for the organization unit, determining how data processing supports each function, matching the supports given to the system with the benchmarks of development, and finding mismatches between expenditure and need. After developing an effective strategy, the action of the senior management steering committee determines further managerial development.

General managers and chief executive officers generally determine the information they need through four basic approaches: the by-product technique, the null approach, the key indicator system, and the total study process. A new approach, the Critical Success Factors (CFS) Method, focuses on individual managers and on each manager's current hard and soft information needs. The four prime sources of critical success factors are the structure of the particular industry; the competitive strategy, industry position, and geographic location; environmental factors; and temporal factors. The CFS method is useful at each level of general management.

Computerized information systems do much more than save managers time and money. They also improve managerial effectiveness. Management decision support systems range from systems that retrieve and analyze data to systems that evaluate decisions using accounting, simulation, optimization, or actuarial models. Managers use these systems as tools of persuasion, as tools of communication, and as a means of increasing organizational control. A study of 56 systems shows that a system has a greater probability of being successful if the end users participate in its development and implementation.