Session – III IT AND ORGANIZATION

1. Session – III IT AND ORGANIZATION

2. INTENSE COMPETITION CUSTOMER ENTER TO VIRTUAL DOOR VIA WEB A PROCESS VIEW OF ORGANIZATION OLD VIEW NEW VIEW MOVING FROM A FUNCTIONAL TO A PROCESS VIEW OF ORGANIZATION FOCUS ON PROCESS CUT HORIZONTALLY ACROSS AN ORGANIZATIONAL’S TRADITIONAL FUNCTIONAL AREAS (FUNCTIONAL) (PROCESS)

3. ORGANIZATIONAL DESIGN GROUPING BY FUNCTION GROUPING BY PROCESS THE COMPOSITION OF ORGANIZATIONAL UNITS PROCESS ORIENTED BASES ORGANIZED ACCORD ING TO THE TYPE OF WORK ORGANIZED ACCORD ING TO KNOWLEDGE OR SKILL • MOST APPROPRIATE WHEN : • THERE ARE SIGNIFICANT INTERDEPENDEN- CIES ACROSS THE ENTIRE WORKFLOW • PROMOTES A SENSE OF TERRITORIAL INTE- GRITY OR OWNERSHIP • PERFORMANCE OF A PROCESS IS EASY TO DETERMINE • EASY TO IMPROVE WEAKNESSES : • MORE WASTEFULL OF RESOURCES • DUPLICATION OF PEOPLE AND EQUIPMENT • GENERAL LACK OF INTERACTION ACROSS INDIVIDUAL WHO SHARE SIMILAR PROFFESI- ONAL BACKGROUNDS,EDUCATION OR SPECI- LIZED TRAINING • DIMINISH THE SENSE OF PROFFESIONAL WORTH OF SKILLED WORKERS • POTENTIALLY LOWER THE OVERALL QUALITY OF THE WORK THAT THEY PERFORM • MOST USEFUL WHEN : • THE KIND OF WORK BEING DONE IS HIGHLY INTERDEPENDENT • ECONOMIES OF SCALE CAN BE ACHIEVED • MAKE IT EASIER TO ADD NEW EMPLOYEES • INDOCTRINATION FASTER AND EASIER • HIGH DEGREE SPECIALIZATION • MANY SOCIAL BENEFITS WEAKNESSES : • OFTEN PAROCHIAL • NARROW PERSPECTIVE ON ORGANIZATION- AL GOAL • LACK BUILT-IN OBJECTIVE PURPOSE • EXTRA NEED FOR COORDINATION AND CONTROL • MORE FORMALIZED AND BUREAUCRATIC STRUCTURE

4. FUNCTIONS VS PROCESS-ORIENTED GROUPINGS

5. MODEL OF ORGANIZATION OLD MODEL OF ORGANIZATION NEW MODEL OF ORGANIZATION MODEL OF ORGANIZATION NETWORK OF LATERAL AND HORIZONTAL LINKAGES WITHIN AND AMONG FIRMS LARGE & HIERARCHICAL MORE LEAN, AGILE, INNOVATIVE, AND ENTREPRENEURIAL INADEQUATE FOR COPING WITH TODAY’S TURBULENT AND INCREASINGLY NETWORKED WORLD NOT LOSING EFFICIENCY, POWER, AND REACH THAT COMES WITH SIZE AND SCALE. AND TAP INTO AN EXTENDED N/W WITH PARTNERS IN THE MIDST TRANSITION AGRARIAN ECONOMY INDUSTRIAL ECONOMY GLOBAL NETWORK ECONOMY

6. THE NEED FOR NEW CAPABILITIES COMPLEX IT AND ORGANIZATION ? ENTERPRIZE THE ORGANIZATION DESIGN CHALLENGE HIERARCHY (LEAN, CENTRALIZED) ENTREPREURAL (AGILE, DECENTRALIZED) SIMPLE STABLE/UNCERTAIN ENVIRONMENT DYNAMIC/UNCERTAIN

7. THE ORGANIZATION DESIGN CHALLENGE THE NEED FOR NEW CAPABILITIES 1980S – 1990S : DOWNSIZING, DELAYERING, RE-ENGINEERING. FOCUS ON CORE-COMPETENCIES, DELIVERING CUSTOMIZED SOLUTIONS. STRATEGIC PARTNERSHIPS AND ALLIANCE, AND NETWORKED CONSORTIA OF INDEPENDENT FIRMS. TODAY : ECOSYSTEMS, LEAN AND AGILE, NETWORKED, TO WORK MORE EFFECTIVE AND EFFICIENT WITHIN MORE DIFFUSE AND FLUID BUSINESS NETWORKS “ON-DEMAND” ENTERPRISE : UNITES INFORMATION, PROCESSES, AND PEOPLE TO CREATE AN ENTERPRISE IN WHICH END-TO-END PROCESSES ARE INTEGRATED ACROSS A COMPANY, AN INDUSTRY, AND GLOBALLY TO ENABLE IT TO RESPOND WITH SPEED AND FLEXIBILITY TO ANY CUSTOMER DEMAND, MARKET OPPORTUNITY, OR EXTERNAL THREAT

8. In order to succeed/survive in this dynamic world, a company not only lowering costs, but also undertake innovative activities such as changing structure or process like as critical response activities. In some cases, IT is the only solution. (Dickson and DeSanctis, 2001) IT SUPPORT TO ORGANIZATIONAL RESPONSE*) BUSINESS DRIVERS/PRESSURES Pressure Organizations And their Responses Pressure Pressure Support Information Technology Support Response *) Boyet and Boyet, 1995

9. THE MAJOR BUSINESS PRESSURE Technology Innovations Obsolescence Information Overload Electronic Commerce Society Social Responsibility Government Regulations Deregulation Shrinking Budgets/ Subsidies Ethics Market Global Competition Changing Workforce Powerful Consumers Organizations • Major areas of social responsibility : • Environmental control, Equal opportunity, Employment and housing, Health, safety and social benefits to employees, Employee education, training, and retraining, External relation- ship, Marketing practices, privacy and ethics

10. A typical industry-level change in the digital economy Is disintermediation, which refers to the elimination of intermediary organization External Environment, Social, Economic, Political, etc. Organization Structure and the Corporate culture FRAMEWORK FOR ORGANIZATIONAL AND SOCIETAL IMPACTS OF IT*) Management And Business Process The Organization’s Strategy Information Technology Individuals and roles *) M. Scott and Morton and Allen, “ DSS Revisited for the 1990s”, Information Technology and the Corporation in the 1990s

11. Direct Sale Direct Sale DISINTERMEDIATION OF DISTRIBUTORS AND/OR RETAILER Transfer Transfer Transfer Manufacturer Distributor (Wholesaler) Retailer Consumers Direct Sale

12. and Pressures Business Drivers CRITICAL RESPONSE ACTIVITIES Electronic Commerce (any place Time and way), Business Alliances Joint Ventures Virtual Corporations BPR Cycle time Empowerment Collaborative Work Mass Customization Restructuring, Team Based Organization Information An Organization Continuous Improvements Improved Productivity Improved DM Managing Information Change Management Customer Service Innovation and Creativity KM, JIT TCM Strategic Systems Strategic Information (market share, negotiation and prevent competitors)

13. THE CHANGING ROLE OF THE INFORMATION SYSTEMS DEPARTMENT

14. STRATEGIC INFORMATION SYSTEMS – DEFENDING AGAINST BUSINESS PERESSURE AND COMPETITION CUSTOMER DEMANDS REBATES COMMISSION CUTS ONLINE COMPETITIONS DSIINTER- MEDIATION SERVICE, COST, SPEED, QUALITY ONLINE AUCTIONS, REVERSE AUCTIONS SIS SIS

15. MANAGEMENT DILEMMA LEARNING FROM MISTAKES: THE BARINGS BANK CASES(FEB 28,1995, $1,2 BILLION LOSS) HIERARCHICAL ORGANIZATION HYBRID ORGANIZATION (MATRIX ORGANIZATION) DESIGNED TO ENABLE COY TO BE LEAN AND AGILE MANAGED COMPLEXITY BY MINIMIZING IT MANAGERS DEAL WITH COMPLEXITY DIRECTLY ORG. SOLUTIONS TO THE NEED FOR CONTROL AND EFFICIENCY, ENABLING FLEXIBILITY, AND SPEED FOR RESPONSE AUTHORITY SYSTEMS LIMIT DECISION MAKING AND ACTIONS BY STRICT: SEGREGATION OF RESPONSIBI- LITY AND DUTIES, STANDARDI- ZATION OF JOBS, DIRECT SUPER VISION, AND RESTRICTED ACCESS TO INFORMATION AND ASSETS EVERYWHERE BUT THE VERY TOP OF THE FIRM DECISION BRED CONFLICT, CONFUSION, INFORMATION OVERLOAD, AND COSTLY DUPLICATIONS OF RESOURCES BUSINESS ON DEMAND UNITES INFORMATION, PROCESSES, AND PEOPLE TO CREATE AN ENTERPRISE ENABLE TO RESPOND WITH SPEED AND FLEXIBILITY TO ANY CUSTOMER DEMAND MARKET OPPORTUNITY, OR EXTERNAL THREATS INTEGRATED END-TO-END PROCESSES ACROSS A COY, IND., AND GLOBALLY ORGANIZATION THAT ADAPTIVE, INFORMATION INTENSIVE, TEAM- BASED , COLLABORATIVE, AND EMPOWERED

16. BUILDING LEAN, YET AGILE ORGANIZATION ENTERPRIZE COMPLEX ? HIERARCHY+ MAINFRAME (LEAN, CENTRALIZED) EXTENDED ENTERPRISE + ON - DEMAND (LEAN, AGILE, NETWORKED) ENTREPRENEURAL (AGILE, DECENTRALIZED) SIMPLE STABLE/CERTAIN DYNAMIC/UNCERTAIN ENVIRONMENT

17. SPEED COUNTS (IN UNSTABLE BIZZCON) EMPOWERMENT TRANSFORMING AN ORGANIZATION DESIGNING ORGANIZATIONS THAT CAN DEVELOP THE “SENSE AND RESPOND” CAPABILITIES REQUIRED OF TODAY’S FAST-PACED, COMPLEX, AND VOLATILE BUSINESS ENVIRONMENT IS NOT ANARCHY REQ.MORE THAN JUST CHANGING STRUCTURE BUT NOT AT THE EXPENSE OF CONTROL PUSH DECISION MAKING DOWN THE LINE OR BYPASSING MIDDLE MANAGEMENT NEW PRODUCTS MUST BE INTRODUCED MORE QUICKLY CAN HELP SHAKE UP AN ENTRENCHED ORGANIZATI- ONS AND CREATE THE CON- DITIONS FOR “CHANGE” EMPOWER EMPLOYEES ACCOMPANIED BY A MORE COMPREHENSIVE REDEFI- NITION OF AUTHORITY AND CONTROL ORDER FULFILLMENT CYCLES MUST BE CUT DRAMATICALLY PROMOTE THE ALIGNMENT OF PEOPLE, PROCESSES, AND INFORMATION NEEDED TO MAKE DECISIONS AND TAKE ACTIONS IN A COMPLEX BUSINESS ENVIRONMENT EXECUTIVE ARE EXHORTED TO CREATE ORGANIZATIONS THAT CAN TURN ON A DIME EXECUTIVES MUST BE MORE INVOLVED, NOT LESS THE GREATER THE NEED TO MONITOR BUSINES OPERA- TIONS AND CLEARLY DEFINE AND ENFORCE THE RULES ORG. BOUNDARIES AND VALUE SYSTEMS MUST BE MORE CLEARLY COMM., CLOSELY MONIT’ING., AND ENFORCED

18. TWO COMMON PROBLEM TO BUILD A LEAN, AGILE ORGANIZATION FAILURE TO REALIGN OPERATIONS WITH OTHER COMPONENTS OF THE ORG. FAILURE TO REDESIGN END-TO-END PROCESS INFORMATION, ORGANIZATION, AND CONTROL THE REAL TIME BUSINESS INTELLIGENCE AND EWS NEEDED WERE NOT IN PLACE THE CONSUMER PRODUCTS FIRM RUN ? • INCREASED THE NUMBER OF PRODUCTS AND PRODUCTS VARIATIONS • INCREASED THE RATE OF NEW PRO- DUCT DEVELOPMENT • INCREASED THE NUMBER OF MARKET- ING CAMPAIGNS AND PROMOTIONS • OPPORTUNITIES WERE MISSED AND PROBLEMS WENT UNDISCOVERED RECAST YOUR VISION FOR CHANGE AS AN ENTERPRISEWIDE INITIATIVE INCREASED OPERATING COMPLEXITY RESPOND MORE QUICKLY TO PROVIDE MUCH MORE TIMELY INFORMATION THE COMPANY WAS OUT OF CONTROL BRING FUNCTIONAL MANAGERS TO- GETHER AS A TEAMS AND PROVIDE WITH THE AUTHORITY AND ACCOUNTABILITY TO COORDINATE AND CONTROL THESE END-AN-END PROCESS

19. STREAMLINING OPERATING AND MANAGEMENT PROCESS STREAMLINES, INTEGRATE, AND TIME SYNCHRONIZE BOTH OPERATING AND MGMT PROCESSES STREAMLINES OPERATING PROCESS WITHOUT A CORRESPONDING STREAMLINING OF MGMT PROCESS THE BUSINESS CYCLE COMPOUND OF TWO TYPES OF PROCESSES PROCESS OPERATING PROCESS ORGANIZATIONAL DYSFUNCTION ORGANIZATION IN FUNCTION MAANGEMENT PROCESS PROCESS OPERATING PROCESS OPERATING PROCESS MAANGEMENT MAANGEMENT INFORMATION, ORGANIZATION AND CONTROL

20. REDEFINING CONTROL SYSTEM ON DEMAND ENTERPRISE CONTROLS HIERARCHICAL CONTROL SHORTENING THE BUSINESS CYCLE REQUIRES STREAMLINING, INTEGRATING & SYNCHRONIZING OPERATING & MANAGEMENT PROCESS MANAGEMENT PROCESSES • REDEFINING CONTROL SYSTEMS “SENSE AND RESPOND” FB CYCLE *RELATIONSHIPS AMONG MEASURE PERCEIVED *PERFORMANCE MEASUREMENT TIED TO BUSINESS CYCLE FEEDBACK FEEDBACK *LONG FEEDBACK CYCLES *LONG UNDERSTANDING OF RELATI- ONSHIP AMONG MEASURES *SEQUENTIAL&FUNCTIONAL *INCOMPLETE FEEDBACK; LIMITED TO NO FORWARD *SUPPLIER CERT. *EMPLOYEE CERT *BUDGETS+INV. R FOR STAGED EX- PERIMENTATION *BUS. INTEL. SYS INPUT CONTROL *BROAD SET OF INTER NAL&EXTERNAL MEA SURES *EWS *BENCHMARKING *INTERFUNCTIONAL& INTERORGANIZATIONAL INFO ENABLED/LEARNING CYCLES LEAN, YET AGILE, PROCESSES & INFRASTRUCTURE, REAL TIME ACC. INTEGRATE PEOPLE, PROCESSES & INFO ACTIONS AN EXTENDED EN TERPRISE, AUTOMATE, ACT. CONT. OUTPUT CONTROL *PERFORMANCE MGT TIED TO ROUTINE FINANCIAL REPORTING PROCESS CONTROL • * RIGID CONTACTS • WITH SUPPLIER • * WELL DEFINED LABOR • MARKET&HIRING CRIT • FORMAL BUDGET • PROC. INPUT CONTROL * ACTION CONTROL PROCESS & JOB SEGMENTATION RIGID PROCEDURE * TRANS. CONTROL *RESULT CONTROL *PRIMARILY FINANCE *INTERNALLY ORIEN TED, * FUNCTIONAL PROCESS CONTROL OUTPUT CONTROL *IMPROVED UNDERSTANDING OF RELATI ONSHIPS AMOMG INPUTS *PREDICTIVE/CAUSALS/ MODELS *INTERACTIVE SCENARIOS FEED FORWARD PEOPLE MARKETING MONEY INFORMATION MANUFACTURING LOGISTIC CUSTOMERS MATERIAL SALES/SERVICE PEOPLE MARKETING MONEY INFORMATION MANUFACTURING LOGISTIC CUSTOMERS MATERIAL SALES/SERVICE OPERATING PROCESS OPERATING PROCESS INPUT S PROCESSES OUTPUTS INPUTS PROCESSES OUTPUTS

21. ORGANIZING FOR ACCOUNTABILITY AND COLLABORATION • EMPOWERMENT, TEAMS, AND COLLABORATIVE ORGANIZATIONS - THE MODERN-DAY BUZZWORDS DESCRIBE DIFFERENT FACETS OF ORGANIZATIONAL AUTHORITY STRUCTURES AND SYSTEMS : THE FORMAL AND INFORMAL STRUCTURES, COORDINATING MECHANISMS, RESPONSIBILITIES, AND INCENTIVES THAT DEFINE THE DISTRIBUTION OF POWER AND ACCOUNTABILITY WITHIN A FIRM. • TRADITIONALLY, THE FORMAL DISTRIBUTION OF AUTHORITY WITHIN AN ORGANIZATION HAS BEEN VIEWED AS A TRADE-OFF BETWEEN CENTRALIZATION AND DECENTRALIZATION. ORGANIZATIONS WERE CONSIDERED NETWORKS OF RELATIONSHIPS AMONG PRINCIPLES AND SELF-INTERESTED “AGENTS”.

22. IN HIERARCHIECAL ORGANIZATIONS, THE COST AND RISK OF COORDINATING LOCAL OPERATIONS AND ALIGNING INDIVIDUAL INTERESTS WAS MINIMIZED BY CENTRALIZING DECISION MAKING, STRUCTURING OPERATIONS, AND DEVELOPING A DEEP HIERARCHY, SO THAT OPERATIONS WERE EXECUTED EFFICIENTLY AND ACCORDING TO CLEARLY DEFINED PROCEDURES. • AS THE COMPLEXITY , UNCERTAINTY, AND VOLATILTY IN THE BUSINESS ENVIRONMENT INTENSIFIED, IT BECAME INCREASINGLY DIFFICULT TO SATISFY THESE ASSUMPTIONS.

23. THE SOLUTION ADOPTED BY MANY EXECUTIVES WAS TO DECENTRALIZED DECISION MAKING. BUT DECENTRALIZATION INCREASED THE COST OF COORDINATION AND CONTROL. IT ENDED UP HAVING “CHECKERS CHECKING THE CHECKERS” AND SLOW – TO – RESPOND AND COSTLY AUTHORITY STRUCTURES AND SYSTEMS. THERE IS NO NEW INFORMATION PROCESSING CAPABILITIES WERE ADDED. • STREAMLINING THE MIDDLE MANAGEMENT RESULTED IN A LACK OF CLARITY IN AUTHORITY AND ACCOUNTABILITY. • “WHEN EVERYONE IS ACCOUNTABLE, NO ONE IS ACCOUNTABLE”

24. MANAGERS MUST CLEARLY IDENTIFY AUTHORITY AND RESPONSIBILITY • AUTHORITY CONTINUES TO BE VESTED IN A SINGLE INDIVIDUAL, WHILE, AN EXECUTIVE TEAM, SHARE ACCOUNTABILITY FOR END-TO-END PROCESS PERFORMANCE AND REPRESENTS THE IMPORTANT “CHECKS AND BALANCES” THAT HELP GUARD ORGANIZATIONAL FAILURE. • IN GENERAL, AUTHORITY FOR OPERATING STRATEGY DEVELOPMENT AND ITS EXECUTION IS MOVING FROM H/Q TO THE FIELD. • INTERFUNCTIONAL OPERATING TEAMS ARE BEING INSERTED INTO THE MIDDLE OF THE FIRM.

25. ORGANIZING FOR ACCOUNTABILITY AND COLLABORATION REDEFINING AUTHORITY SYSTEM HIERARCHICAL ORGANIZATION ON DEMAND ENTERPRISE REDEFINING AUTHORITY SYSTEMS ACCES TO TIMELY, RELEVANT INFORM- ATION MUST BE COUPLED WITH INCEN- TIVES & CULTURE THAT FOSTER COLLA BORATION YET PROVIDE CLEAR AUTHO RITY AND ACCOUNTABILITY A B HIGH HIGH LOW ACCESS TO RELEVANT INFORMATION ACCESS TO RELEVANT INFORMATION C A B LOW SENIOR MANAGEMENT MIDDLE MANAGEMENT OPS. MANAGEMENT SENIOR MANAGEMENT MIDDLE MANAGEMENT OPERATIONAL MANAGEMENT A. LINE EMPLOYEES OFTEN HAVE THE BEST UNDERSTANDING OF OPERATIONS AND LOCAL BUSINESS DYNAMICS THE CHALLENGE IS TO BRING THESE TWO PERSPECTIVES TOGETHER UNITING PEOPLE, PROCESSES, AND INFORMATION ACROSS AN EXTENDED ENTERPRISE B. SENIOR MANAGER UNDERSTAND STRATEGIC GOALS AND INITIATIVES AND THE ENTERPRISE PERSPECTIVE FLATTENING AND ELEVATING THE INFORMATION ACCESS CURVE IS NOT SUFFICIENT. COLLABORATIVE STRUCTURE, CULTURE, AUTHORITY, INCENTIVES, AND ROLES MUST EVOLVE ALONG WITH THE ABILITY OF INDIVIDUALS AND TEAMS AT ALL LEVELS TO DEAL WITH PROBLEMS OF INFORMATION OVERLOAD AND INREASE “INFORMATION LITERACY” C. RESPONSIBILITY FOR OPERATING DECISIONS IS OFTEN DELEGAT- ED TO MIDDLE MANAGEMENT, BUT VALUABLE INFORMATION IS LOST AND ORGANIZATION RESPONSE IS SLOW. TRADITIONALLY, THE FORMAL DISTRIBUTION OF AUTHORITY WITHIN AN ORGANIZATION HAS BEEN VIEWED AS A TRADE – OFF BETWEEN CENTRALIZATION AND DECENTRALIZATION. ORGANIZATION WERE CONSIDERED NETWORKS OF RELATIONSHIPS AMONG PRINCIPALS AND SELF-INTERESTED “AGENTS”.

26. THE FOLLOWING QUESTIONS CAN BE USED TO GUIDE ORGANIZATIONAL DESIGN DECISIONS AS EXECUTIVES ATTEMPT TO LEVERAGE EMERGING NETWORKED IT THAT EXPAND INFORMATION PROCESSING CAPACITY TO ENABLE “BUSINESS ON DEMAND” • HAVE WE IDENTIFIED THE KEY ACTIVITIES AND DECISIONS NEEDED TO COMPLETE OUR PROJECTS AND INITIATIVES AND REACH OUR GOALS? • DO WE HAVE, OR CAN WE ACQUIRE, THE RESOURCES WE NEED TO BE SUCCESSFUL? • HAVE WE CORRECTLY IDENTIFIED THE ACTIVITIES AND DECISIONS THAT SHOULD BE PERFORMED INSIDE OUR ORGANIZATION AND THOSE THAT SHOULD BE SOURCED FROM THE OUTSIDE? • HAVE WE CORRECTLY GROUP PEOPLE AND PARTNERS INTO TEAMS TO COORDINATE AND CONTROL STREAMLINED AND INTEGRATED END-TO-END PROCESSES? • HAVE WE PROVIDED CLEAR DIRECTION AND THE RESOURCES, SUPPORT, AND INCENTIVES TO ENABLE INDIVIDUALS, TEAMS, AND UNITS TO MEET REALISTIC STRETCH TARGETS?

27. HAVE WE DESIGNED AND IMPLEMENTED THE YSTEMS AND STRUCTURES REQUIRED TO COORDINATE AND CONTROL ACTIVITIES, PEOPLE, AND PARTNERS TO ENSURE EFFICIENT, HIGH QUALITY, BEST-IN-CLASS OPERATIONS? • DO WE HAVE SYSTEMS, STRUCTURES, AND EXPERTISE NEEDED TO ACCESS, INTERPRET, AND COMMUNICATE RELEVANT, TIMELY INFORMATION AND THEN RESPOND QUICKLY AND SUCCESSFULLY TO OPPORTUNITIES AND THREATS? • HAVE WE EFFECTIVELY DEVELOPED, ORGANIZED, AND LEVERAGED THE CREATIVITY AND FULL POTENTIAL OF OUR PEOPLE AND PARTNERS? • HAVE WE CREATED A CULTURE OF SHARED VALUES AND BEHAVIORS THAT UNITE THE ORGNAIZATION AND ITS PARTNERS AROUND A COMMON SHARED PURPOSE AND THE ACHIVEMENT OF BOTH PERSONAL AND SHARED GOALS?

28. TYPICAL BUSINESS PROCESSES ADVANTAGE OF BUSINESS PROCESS

29. BUSINESS PROCESSES ACTIVITIES INVOLVE SOME LEVEL OF TRANSACTION HAVE AN END PURPOSE COMPLEX ORGANIZATIONAL PHENOMENA INVOLVE INNUMERABLE STEPS AND PEOPLE A GREAT DEAL OF TIME TO COMPLETE

30. Networked Organization Classical/Hierarchical Organization NETWORKED VS HIERARCHICAL ORGANIZATION

31. Networked Organization Hierarchical Organization Flattened Organization THE ROLES OF MANAGERS AND SUBORDINATES IN THE DIFERENT TYPES OF ORGANIZATIONS Use of authority by The manager Area of freedom By subordinates Manager makes decisions and announces or sells it Manager presents Ideas and invites questions Manager presents tentative decision subject to change Manager presents problem, gets suggestions, makes decision Manager defines limits asks group to make decision Manager Permits Subordinates To function Within limits Defined By superior Manager allows situational Leadership to Occur based upon which node of the n/w Is best Equipped to Solved problem

32. VIRTUAL ORGANIZATION • A VIRTUAL CORPORATION IS AN ORGANIZATION COMPOSED OF SEVERAL BUSINESS PARTNERS SHARING COSTS AND RESOURCES FOR THE PURPOSE OF PRODUCING A PRODUCT OR SERVICE. IT CAN BE TEMPORARY OR PERMANNENT • THE MAJOR ATTRIBUTES OF VIRTUAL CORPORATIONS ARE : - EXCELLENCE - UTILIZATION - OPPOTUNISM - LACK OF BORDERS - TRUST - ADAPTABILITY TO CHANGE - TECHNOLOGY

33. Alliances with Subcontractors Boundary of Firm A Alliances with Firm B (a Major Supplier) A NETWORK STRUCTURE FACILITATES THE CREATION OF VIRTUAL COMPANIES Customer Response and Order-Full filment cluster Alliances with Major Customer Center of Competence in Manufacturing Alliances with a Competitor Who provides Services that are Comple- mentary Cross-Functional team Engineering competencies clusters Alliances with Small Suppliers Alliances with Small suppliers

34. LEVEL OF PERFORMANCE PERFORMANCE PROBLEMS THROUGHPUT (A NUMBER OF MAT’L THAT WILL BE PROCES’ED) RESPONSE TIME LACK OF RESOURCES UNANTICIPATED INCREASE ON DEMAND BUILDING SCALABLE SOLUTIONS • BOTTLENECKS : • LACK OF MEMORY • INSUFFICIENT PROCESSOR CAPACITY • - NETWORK LATENCY POOR STRATEGY  HUGE RESERVE CAPACITY EFFECTIVE STRATEGY : DESIGN SCALABLE SYSTEM LOAD BALANCING • SPECIALIZATION OF SERVICE : • - IT RESOURCES TO BE • OPTIMIZED • ALLOWS A HIERARCHY OF • RESOURCES TO BE CREATED • FAILS IN ONE OR TWO WAYS : • THE RESERVE STILL INSUFFICIENT • THE PERSON WHI CH EXECUTE THIS STRATEGY REMOVED MAINTAIN A LIST OF AVAILABLE SERVERS • - FILE SERVER • PRINT SERVER • DATA BASE SERVER • APPLICATION/COMPONENT SERVER • GROUPWARE SERVER • WEB SERVER • TECHNIQUES : • SPECIALIZATIONS OF SERVER IN • A DISTRIBUTED COMPUTING • ENVIRONMENT DISPATCHER HANDLING ALL IN COMING TRAFFICS MULTIPLE SERVER (CLUSTER) - ON-LLINE TRANSACTION PROCESSING (OLTP) - ON-LINE ANALYTIC PROCESSING (OLAP)

35. THE NETWORK ENTERPRISE Distributors Consumers Partners, Consultants, Contractors Networked Enterprise Community Suppliers, Distributors Business Customers Other Enterprises

36. Employees and • Other tangible assets • People • Plant, equipment, etc. THE ORGANIZATIONAL MODEL ENVIRONMENT AND CULTURE*) • Social systems • Culture • Social structure • Formal Organizational • arrangements • Structure • Operating systems. • Key organizational • process • Information gathering • Communication • Decision asking • Matter/energy transporting • Matter/energy environment • Technology • Methods • Techniques • Dominant coalition • Personal characteristics • Goals, strategies. • External environment • Task environment • Wider environment *) J.P. Kotter, “Organizational Dynamics : “Diagnostic and intervention” Addison-Wesley, Reading, Massachussets, 1978

37. BY ORGANIZATIONAL STRUCTURE BY FUNCTIONAL AREA BY SUPPORT PROVIDED CLASSIFICATION OF INFORMATION SYSTEMS DEPARTMENTAL ACCOUNTING TPS MIS FINANCE ENTERPRISE KMS MANUFACTURING OAS INTERORGANIZATIONAL DSS MARKETING EIS HRM GSS ISS

38. PEOPLE SUPPORTED Top Managers Strategic Systems THE INFORMATION SYSTEMS SUPPORT OF PEOPLE IN ORGANIZATION Knowledge Workers Professionals Staff Support Middle Managers Managerial Systems Line Managers Operators Operational Systems Clerical Staff Office Automation and Communication Systems Information Infrastructure and TPS Systems

39. Integration THE FUNCTIONAL INFORMATION SYSTEMS Finance Accounting Marketing TPS Integration Integration CRM Operations Customers HRM Integration

40. Firm Infrastructure (Accounting, Finance, General Management) TYPICAL FUNCTIONAL AREAS MAPPED ON THE VALUE CHAIN Human Resource Management (Human Resources) Support Activities Profit Margin Technology Development (Engineering) Procurement (Material Management-Operations) Inbound Logistics (Material Management Operations) Operations (Operations)) Outbound Logistics (Material Management Operations) Marketing And Sales (Marketing) Service (Service or Marketing) Profit Margin Primary Activities

41. Operational Strategy • * Capacity Planning • * Facility planning and location • * Technology Planning and assessment • Output and Process Planning • Computer-Integrated Manufacturing (CIM) • Robotics • Flexible Manufacturing Systems • Long term forecast Strategic Applications A MODEL OF INFORMATION SYSTEMS IN THE PRODUCTION/OPERATION FUNCTIONAL AREA # Manufacturing Standards # Time and Motion Standards # Quality Control Standards # Safety Programs # National TQM Awards # Customers # Vendors External Interfaces # Design and Engineering # Marketing # Finance # Accounting # HRM • Inventory • Material Requirement Planning (MRP) • Manufacturing Resource Planning • Just-In-Time • Project Management • Choice of Vendors/Suppliers • TCM • Computer-Aided Manufacture • Facility Layout • Short-Term Forecast Internal Interfaces Managerial Applications @Materials Management @ Cost Analysis @ Quality Control @ Short-term Scheduling Operational Applications

42. Internal and External details TPS PROGRAMS EVENT Data Entry Details Reports, Document, Other Outputs UPDATE DATABASE & PRODUCE TPS REPORTS THE FLOW OF INFORMATION IN TRANSACTION PROCESSING Exceptions Exception Reports Operational Database With Master Transaction Data Queries and Answers User Downloading and Uploading INPUTS PROCESS OUTPUTS

43. WEBB-BASED TP TPS OLTP THE EVOLUTION OF TRANSACTION PROCESSING • * CLIENT-SERVER • ARCHITECTURE • INVOLVING CUSTOMERS, • VENDORS, TELECOMM, • AND DIFFERENT TYPE • OF HW AND SW • INTERACTIVE INTERNET • TPS • FLEXIBILITY TO ACCOMMODATE UN • PREDICTABLE GROWTH IN PROCES • SING DEMAND • COST EFFECTIVENESS FOR SMALL • MONEY AMOUNTS • INTERACTIVE AUTOMATIC BILLING • ENABLING COY TO OFFER SERVICES • TO ANYONE, NOT JUST SUBSRIBERS • TIMELY SEARCH AND ANALYSIS OF • LARGE DATABASES • ABILITY TO HANDLE MULTIMEDIA • DATA SUCH AS PICTURES AND SOUND • EFFECTIVELY AND EFFICIENTLY • HIGH DATA THROUGHPUT TO • SUPPORT INQUIRIES REQUIRING • MASSIVE FILE SIZE • FAST RESPONSE TIME • EFFECTIVE STORAGE OF HUGE GRA • PHICS AND DATABASES

44. Human Resource Management Manufacturing Management & + THE COMPUTER INTEGRATED MANUFACTURING (CIM) MODEL (SIMPLIFICATION, AUTOMATION, INTEGRATION AND COORDINATION) Factory Automation Materials Processing + Inspection/ Testing Design Product/Process IRM & COMM. Analysis and Simulation Assembly Integrated Systems architecture Finance Materials Handling Documentation Marketing Common data Shop floor Quality process & Facilities planning Materials Scheduling + + Manufacturing planning and control Strategic Planning

45. Sales Systems Logistic and Delivery Systems The Enterprise • Communication with the field • Sales Process/Account Mgt. • Selling Aids/Sales Force Support • Prospecting Customers • EDI/Internet • Demand Forecasting • Inventory Management • Order Entry and Fulfillment • Invoicing • Sourcing • Time-to-Market Reduction • Extranet • Warehouses MARKETING CHANNEL SYSTEMS Dealer Systems • Marketing and Sales Support • Value-Added Partnership • Dealer Communications • Business Management Support • Function • * Dealer’s Portal Channel Systems Customer Support Systems • Customer Communication • Customer Satisfaction • Service & Support • Training /User Education • Usage Enhancement Direct Sales • Direct Sales • Mail Order • Factory Outlets Market Intelligence Systems Target Marketing Systems • Customer Profiling & Segmentation • Marketing Tracking • Competitor Surveillance • New Product Development • Decision Support • Cross-Selling • Internet Market Research • Database Marketing • Telemarketing • Niche/Regional Marketing • and Micro segmentation • * Customer Profitability Analysis • * Data Mining

46. Stages of evolution of IS/IT in relation to expenditure Level of IS/IT expense Transition Point Computer (DP) Management Information (systems) Management Initiation Contagion Control Integration Data Management Maturity Stages of increasing sophistication and maturity

47. IS Role in The Enterprise TRANSITION BETWEEN COMPUTER AND INFORMATION MANAGEMENT Relationships with other departments Computer (DP) Management Information (Systems) Management Managing the IS/IT Department Managing the IS/IT activities

48. THE THREE-ERA MODEL The prime objective of using IS/IT in the eras differs : • Data processing to improve operational efficiency by automating information-based processes • Management Information Systems to increase management effectiveness by satisfying their information requirements for decision making • Strategic information systems to improve competitiveness by changing the natute or conduct of business

49. DP MIS SIS TRENDS IN THE EVOLUTION OF BUSINESS IT/IS

50. Those that share information via technology-based systems with customers/consumers and/or suppliers and change The nature of the relationship Those that produce more effective integration of the use of information In the organization’s value - adding processes THE FOUR MAIN TYPES OF STRATEGIC SYSTEM*) Those that enable the organization to develop, produce, market and deliver new or enhanced products or services based on information Those that provide executive management with information to support the development and implementation of strategy *) John Ward and Joe Peppard