session – iii it and organization
DESCRIPTION
Session – III IT AND ORGANIZATION. 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 - PowerPoint PPT PresentationTRANSCRIPT
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Session – III
IT AND ORGANIZATION
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A PROCESS VIEW OF ORGANIZATION
OLD VIEW NEW VIEW
MOVING FROM A FUNCTIONAL TO A PROCESS VIEW OF ORGANIZATION
INTENSE COMPETITION
CUSTOMER ENTER TOVIRTUAL DOOR VIA WEB
FOCUS ON PROCESS
CUT HORIZONTALLY ACROSSAN ORGANIZATIONAL’S
TRADITIONAL FUNCTIONALAREAS
(FUNCTIONAL) (PROCESS)
3
THE COMPOSITION OF ORGANIZATIONAL UNITS
GROUPING BY FUNCTION GROUPING BY PROCESS
ORGANIZATIONAL DESIGN
ORGANIZED ACCORDING TO THE TYPE
OF WORK
ORGANIZED ACCORDING TO KNOWLEDGE
OR SKILL
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 BENEFITSWEAKNESSES : OFTEN PAROCHIAL NARROW PERSPECTIVE ON ORGANIZATION- AL GOAL LACK BUILT-IN OBJECTIVE PURPOSE EXTRA NEED FOR COORDINATION AND CONTROL MORE FORMALIZED AND BUREAUCRATIC STRUCTURE
PROCESS ORIENTEDBASES
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 TRAININGDIMINISH THE SENSE OF PROFFESIONAL WORTH OF SKILLED WORKERSPOTENTIALLY LOWER THE OVERALL QUALITY OF THE WORK THAT THEY PERFORM
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FUNCTIONS VS PROCESS-ORIENTED GROUPINGS
DIMENSION FUNCTIONS PROCESSES
PRIMARY FOCUS “WHAT”, STATIC; SLICE-IN-TIME “HOW” ; DYNAMICS
ORGANIZATIONAL ORIENTATION VERTICAL; CHAIN OF COMMAND HORIZONTAL; WORKFLOW
OBJECTIVE TASK-CENTERED CUSTOMER-ORIENTED
PERSONNEL INDIVIDUAL SPECIALISTS TEAMS OF GENERALISTS
PERSPECTIVE PAROCHIAL HOLISTIC
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MODEL OF ORGANIZATION
MODEL OF ORGANIZATION
NEW MODEL OF ORGANIZATIONOLD MODEL OF ORGANIZATION
LARGE & HIERARCHICAL
NETWORK OF LATERAL ANDHORIZONTAL LINKAGES WITHIN AND
AMONG FIRMS
AGRARIANECONOMY
INDUSTRIALECONOMY
GLOBAL NETWORKECONOMY
IN THE MIDST TRANSITION
INADEQUATE FOR COPING WITHTODAY’S TURBULENT AND
INCREASINGLY NETWORKED WORLD
MORE LEAN, AGILE, INNOVATIVE, AND ENTREPRENEURIAL
NOT LOSING EFFICIENCY, POWER, AND REACH THAT COMES WITH SIZE AND SCALE. AND TAP INTO AN EXTENDED
N/W WITH PARTNERS
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IT AND ORGANIZATION
THE ORGANIZATION DESIGN CHALLENGE
HIERARCHY (LEAN, CENTRALIZED)
EN
TE
RP
RIZ
ETHE NEED FOR NEW CAPABILITIES
ENVIRONMENTSIMPLE
STABLE/UNCERTAIN
ENTREPREURAL
(AGILE, DECENTRALIZED)
DYNAMIC/UNCERTAIN
COMPLEX
?
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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
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IT SUPPORT TO ORGANIZATIONAL RESPONSE*)
Organizations And their
Responses
Information Technology
Support Support
Pressure
Pressure
Pre
ssur
e
BUSINESS DRIVERS/PRESSURES
*) Boyet and Boyet, 1995
In order to succeed/survive in this dynamicworld, a company not only lowering costs, but also undertake innovative activitiessuch as changing structure or processlike as critical response activities. In some cases, IT is the only solution. (Dickson and DeSanctis, 2001)
Response
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THE MAJOR BUSINESS PRESSURE
Organizations
TechnologyInnovations
ObsolescenceInformation OverloadElectronic Commerce
SocietySocial Responsibility
Government RegulationsDeregulation
Shrinking Budgets/Subsidies
Ethics
MarketGlobal
CompetitionChanging WorkforcePowerful Consumers
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
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FRAMEWORK FOR ORGANIZATIONAL AND SOCIETAL IMPACTS OF IT*)
Organization Structureand the
Corporate culture
Management And
Business Process
Individuals and roles
InformationTechnology
The Organization’sStrategy
External Environment,Social, Economic,
Political, etc.
*) M. Scott and Morton and Allen, “ DSS Revisited for the 1990s”, Information Technology and the Corporation in the 1990s
A typical industry-level change in the digital economyIs disintermediation, which refers to the eliminationof intermediary organization
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DISINTERMEDIATION OF DISTRIBUTORS AND/OR RETAILER
ManufacturerDistributor
(Wholesaler)Retailer Consumers
Direct Sale
Direct Sale
Direct Sale
Transfer Transfer Transfer
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CRITICAL RESPONSE ACTIVITIES
AnOrganization
BPRCycle time
EmpowermentCollaborative Work
Mass CustomizationRestructuring, TeamBased Organization
Information
Continuous Improvements
Improved ProductivityImproved DM
Managing InformationChange Management
Customer ServiceInnovation and
CreativityKM, JIT
TCMStrategic Systems
Strategic Information(market share, negotiation
and preventcompetitors)
Business AlliancesJoint Ventures
Virtual Corporations
ElectronicCommerce(any place
Time and way),
Business Drivers and Pressures
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THE CHANGING ROLE OF THE INFORMATION SYSTEMS DEPARTMENT
TRADITIONAL MAJOR IS FUNCTIONS- MANAGING SYSTEMS DEVELOPMENT AND SYSTEMS PROJECT MANAGEMENT- MANAGING COMPUTER OPERATIONS, INCLUDING THE CO,PUTER CENTER- STAFFING, TRAINING, AND DEVELOPING IS SKILLS- PROVIDING TECHNICAL SERVICES
NEW(ADDITIONAL) MAJOR IS FUNCTIONS
-INITIATING AND DESIGNING SPECIFIC STRATEGIC INFORMATION SYSTEMS-INFRASTRUCTURE PLANNING DEVELOPMENT AND CONTROL-INCORPORATING THE INTERNET AND E-COMMERCE INTO THE BUSINESS-MANAGING SYSTEMS INTEGRATION INCLUDING THE INTERNET, INTRANETS AND EXTRANETS-EDUCATING THE NON-IS MANAGERS ABOUT IT-EDUCATING THE IS STAFF ABOUT THE BUSINESS-SUPPORTING END – USER COMPUTING-PARTNERING WITH THE EXECUTIVE LEVEL THAT RUNS THE BUSINESS-ACTIVELY PARTICIPATING IN BUSINESS PROCESSES RE-ENGINEERING-PROACTIVELY USING BUSINESS AND TECHNICAL KNOWLEDGE TO “SEED” INNOVATIVE IDEAS ABOUT IT-CREATING BUSINESS ALLIANCES WITH VENDORS AND IS DEPARTMENTS IN OTHER ORGANIZATIONS
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STRATEGIC INFORMATION SYSTEMS – DEFENDING AGAINST BUSINESS PERESSURE AND COMPETITION
SERVICE,COST,
SPEED,QUALITY
CUSTOMER DEMANDSREBATES
ONLINECOMPETITIONS
DSIINTER-MEDIATION
COMMISSIONCUTS
ONLINEAUCTIONS,REVERSEAUCTIONS
SISSIS
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MANAGEMENT DILEMMA
HIERARCHICALORGANIZATION
DESIGNED TO ENABLE COYTO BE LEAN AND AGILE
HYBRID ORGANIZATION(MATRIX ORGANIZATION)
ORG. SOLUTIONS TO THE NEEDFOR CONTROL AND EFFICIENCY,
ENABLING FLEXIBILITY, AND SPEED FOR RESPONSE
DECISION
ORGANIZATION THAT ADAPTIVE, INFORMATION INTENSIVE, TEAM-BASED , COLLABORATIVE, AND
EMPOWERED
BRED CONFLICT, CONFUSION, INFORMATION OVERLOAD, AND
COSTLY DUPLICATIONS OFRESOURCES
MANAGED COMPLEXITY BY MINIMIZING IT
MANAGERSDEAL WITH COMPLEXITY
DIRECTLY
BUSINESS ON DEMANDUNITES INFORMATION,
PROCESSES, AND PEOPLETO CREATE AN ENTERPRISE
INTEGRATED END-TO-ENDPROCESSES ACROSS A
COY, IND., AND GLOBALLY
ENABLE TO RESPOND WITHSPEED AND FLEXIBILITY
TO ANY CUSTOMER DEMANDMARKET OPPORTUNITY, OR
EXTERNAL THREATS
AUTHORITY SYSTEMS LIMITDECISION MAKING AND ACTIONS
BY STRICT:SEGREGATION OF RESPONSIBI-LITY AND DUTIES, STANDARDI-
ZATION OF JOBS, DIRECT SUPERVISION, AND RESTRICTED ACCESS
TO INFORMATION AND ASSETSEVERYWHERE BUT THE VERY TOP
OF THE FIRM
LEARNING FROM MISTAKES : THE BARINGS BANK CASES(FEB 28,1995, $1,2 BILLION LOSS)
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BUILDING LEAN, YET AGILE ORGANIZATION
COMPLEX
?
HIERARCHY+ MAINFRAME (LEAN, CENTRALIZED) EXTENDED ENTERPRISE
+ ON - DEMAND (LEAN, AGILE, NETWORKED)
ENTREPRENEURAL (AGILE, DECENTRALIZED)
SIMPLE
STABLE/CERTAIN DYNAMIC/UNCERTAIN
EN
TE
RP
RIZ
E
ENVIRONMENT
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DESIGNING ORGANIZATIONS THAT CAN DEVELOP THE “SENSE AND RESPOND”
CAPABILITIES REQUIRED OF TODAY’S FAST-PACED, COMPLEX, AND VOLATILE
BUSINESS ENVIRONMENT
SPEED COUNTS(IN UNSTABLE BIZZCON)
EMPOWERMENTTRANSFORMING
AN ORGANIZATION
NEW PRODUCTS MUSTBE INTRODUCED MORE
QUICKLY
EXECUTIVE ARE EXHORTEDTO CREATE ORGANIZATIONSTHAT CAN TURN ON A DIME
ORDER FULFILLMENT CYCLES MUST BE CUT
DRAMATICALLY
BUT NOT AT THE EXPENSE OF
CONTROL
IS NOTANARCHY
PUSH DECISION MAKING DOWN THE LINE ORBYPASSING MIDDLE
MANAGEMENT
EMPOWER EMPLOYEESACCOMPANIED BY A MORECOMPREHENSIVE REDEFI-
NITION OF AUTHORITYAND CONTROL
EXECUTIVES MUST BE MOREINVOLVED, NOT LESS
ORG. BOUNDARIES AND VALUESYSTEMS MUST BE MORE
CLEARLY COMM., CLOSELYMONIT’ING., AND ENFORCED
REQ.MORE THANJUST CHANGING
STRUCTURE
PROMOTE THE ALIGNMENTOF PEOPLE, PROCESSES,
AND INFORMATION NEEDEDTO MAKE DECISIONS AND
TAKE ACTIONS IN A COMPLEX BUSINESS
ENVIRONMENT
CAN HELP SHAKE UP ANENTRENCHED ORGANIZATI-ONS AND CREATE THE CON-
DITIONS FOR “CHANGE”
THE GREATER THE NEED TOMONITOR BUSINES OPERA-TIONS AND CLEARLY DEFINEAND ENFORCE THE RULES
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INFORMATION, ORGANIZATION, AND CONTROL
TWO COMMON PROBLEM TOBUILD A LEAN, AGILE
ORGANIZATION
FAILURE TO REDESIGNEND-TO-END PROCESS
FAILURE TO REALIGN OPERATIONS WITH OTHER COMPONENTS OF THE ORG.
THE CONSUMER PRODUCTSFIRM RUN
INCREASED THE NUMBER OF PRODUCTS AND PRODUCTS VARIATIONSINCREASED THE RATE OF NEW PRO-DUCT DEVELOPMENTINCREASED THE NUMBER OF MARKET-ING CAMPAIGNS AND PROMOTIONS
INCREASED OPERATINGCOMPLEXITY
THE COMPANY WASOUT OF CONTROL
THE REAL TIME BUSINESSINTELLIGENCE AND EWS
NEEDED WERE NOT IN PLACE
OPPORTUNITIES WERE MISSED ANDPROBLEMS WENT UNDISCOVERED
?
RESPOND MORE QUICKLY TO PROVIDEMUCH MORE TIMELY INFORMATION
RECAST YOUR VISION FOR CHANGEAS AN ENTERPRISEWIDE INITIATIVE
BRING FUNCTIONAL MANAGERS TO-GETHER AS A TEAMS AND PROVIDE
WITH THE AUTHORITY ANDACCOUNTABILITY TO COORDINATEAND CONTROL THESE END-AN-END
PROCESS
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ORGANIZATIONAL DYSFUNCTION
STREAMLINING OPERATINGAND MANAGEMENT
PROCESS
STREAMLINES, INTEGRATE, ANDTIME SYNCHRONIZE BOTHOPERATING AND MGMT
PROCESSES
PR
OC
ES
S
OPERATING PROCESS
MA
AN
GE
ME
NT
STREAMLINES OPERATING PROCESSWITHOUT A CORRESPONDING
STREAMLINING OF MGMT PROCESS
ORGANIZATIONIN FUNCTION
OPERATING PROCESS
MA
AN
GE
ME
NT
PR
OC
ES
S
THE BUSINESS CYCLECOMPOUND OF TWO TYPES
OF PROCESSES
OPERATING PROCESS
MA
AN
GE
ME
NT
PR
OC
ES
S
INFORMATION, ORGANIZATION AND CONTROL
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• REDEFINING CONTROL SYSTEMS
HIERARCHICAL CONTROL
ON DEMAND ENTERPRISE CONTROLS
SHORTENING THE BUSINESS CYCLE REQUIRESSTREAMLINING, INTEGRATING & SYNCHRONIZING
OPERATING & MANAGEMENT PROCESS
* RIGID CONTACTS WITH SUPPLIER* WELL DEFINED LABORMARKET&HIRING CRIT•FORMAL BUDGET •PROC.
* ACTION CONTROLPROCESS & JOBSEGMENTATIONRIGID PROCEDURE* TRANS. CONTROL
*RESULT CONTROL*PRIMARILY FINANCE*INTERNALLY ORIENTED, * FUNCTIONAL
FEEDBACK
*LONG FEEDBACK CYCLES*LONG UNDERSTANDING OF RELATI-ONSHIP AMONG MEASURES
PEOPLE MARKETINGMONEYINFORMATION MANUFACTURING LOGISTIC CUSTOMERSMATERIAL SALES/SERVICE
OPERATING PROCESS
INPUT S PROCESSES OUTPUTS
*SEQUENTIAL&FUNCTIONAL*INCOMPLETE FEEDBACK; LIMITEDTO NO FORWARD
*PERFORMANCE MGT TIED TO ROUTINEFINANCIAL REPORTING
INPUT CONTROLPROCESS CONTROL OUTPUT CONTROL
PEOPLE MARKETINGMONEYINFORMATION MANUFACTURING LOGISTIC CUSTOMERSMATERIAL
SALES/SERVICE
MANAGEMENT PROCESSES
“SENSE AND RESPOND” FB CYCLE*RELATIONSHIPS AMONG MEASURE PERCEIVED*PERFORMANCE MEASUREMENT TIEDTO BUSINESS CYCLE
*SUPPLIER CERT.*EMPLOYEE CERT*BUDGETS+INV. RFOR STAGED EX-PERIMENTATION*BUS. INTEL. SYS
*IMPROVED UNDERSTANDING OF RELATIONSHIPS AMOMG INPUTS*PREDICTIVE/CAUSALS/ MODELS*INTERACTIVE SCENARIOS
*BROAD SET OF INTERNAL&EXTERNAL MEASURES*EWS*BENCHMARKING*INTERFUNCTIONAL&INTERORGANIZATIONAL
INFO ENABLED/LEARNING CYCLESLEAN, YET AGILE, PROCESSES & INFRASTRUCTURE, REAL TIME ACC.INTEGRATE PEOPLE, PROCESSES & INFO ACTIONS AN EXTENDED ENTERPRISE, AUTOMATE, ACT. CONT.
OPERATING PROCESS
INPUTS PROCESSES OUTPUTS
FEEDBACK
INPUT CONTROL
PROCESS CONTROLOUTPUT CONTROL
FEED FORWARD
REDEFINING CONTROL SYSTEM
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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”.
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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.
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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”
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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.
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ORGANIZING FOR ACCOUNTABILITY AND COLLABORATION
REDEFINING AUTHORITY SYSTEMS
SENIORMANAGEMENT
MIDDLEMANAGEMENT
OPS.MANAGEMENT
HIGH LOW
AC
CE
SS
TO
RE
LEV
AN
TIN
FO
RM
AT
ION
A. LINE EMPLOYEES OFTEN HAVE THE BEST UNDERSTANDING OF OPERATIONS AND LOCAL BUSINESS DYNAMICS
B. SENIOR MANAGER UNDERSTAND STRATEGIC GOALS AND INITIATIVES AND THE ENTERPRISE PERSPECTIVE
C. RESPONSIBILITY FOR OPERATING DECISIONS IS OFTEN DELEGAT- ED TO MIDDLE MANAGEMENT, BUT VALUABLE INFORMATION IS LOST AND ORGANIZATION RESPONSE IS SLOW.
BA
C
BA
HIGH
LOW
AC
CE
SS
TO
RE
LEV
AN
TIN
FO
RM
AT
ION
SENIORMANAGEMENT
MIDDLEMANAGEMENT
OPERATIONALMANAGEMENT
THE CHALLENGE IS TO BRING THESE TWO PERSPECTIVES TOGETHER UNITINGPEOPLE, PROCESSES, AND INFORMATION ACROSS AN EXTENDED ENTERPRISE
FLATTENING AND ELEVATING THE INFORMATION ACCESS CURVE IS NOT SUFFICIENT.COLLABORATIVE STRUCTURE, CULTURE, AUTHORITY, INCENTIVES, AND ROLES MUSTEVOLVE ALONG WITH THE ABILITY OF INDIVIDUALS AND TEAMS AT ALL LEVELS TO DEAL WITH PROBLEMS OF INFORMATION OVERLOAD AND INREASE “INFORMATIONLITERACY”
ACCES TO TIMELY, RELEVANT INFORM-ATION MUST BE COUPLED WITH INCEN-TIVES & CULTURE THAT FOSTER COLLABORATION YET PROVIDE CLEAR AUTHORITY AND ACCOUNTABILITY
ON DEMAND ENTERPRISEHIERARCHICAL ORGANIZATION
REDEFINING AUTHORITY SYSTEM
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”.
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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?
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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?
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TYPICAL BUSINESS PROCESSES ADVANTAGE OF BUSINESS PROCESS
BUSINESS PROCESS
PRODUCT DEVELOPMENT
CUSTOMER RELATIONSHIP MANAGEMENT
OPERATIONAL/MANUFACTURING
ORDER PROCESSING
HUMAN RESOURCE MANAGEMENT
INVESTMENT MANAGEMENT
PLANT AND EQUIPMENT MAINTENANCE
CONSTRUCTION AND PROJECT MANAGEMENT
PLANNING & RESOURCE ALLOCATION
ENCOURAGE A GREATER FOCUS ON CUSTOMERS
CLEARLY DEFINED OWNERS
DIRECTLY RELATIONAL TO ORGANIZATIONAL
GOALS
PROVIDES A DYNAMIC VIEW OF HOW AN ORGA
NIZATION DELIVERS VALUE
A BASIS FOR IMPROVING THE WORK DONE
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BUSINESS PROCESSES
ACTIVITIESINVOLVE SOME
LEVELOF TRANSACTION
HAVE AN END PURPOSE
COMPLEX ORGANIZATIONAL
PHENOMENAA GREAT DEAL
OF TIMETO COMPLETE
INVOLVE INNUMERABLE
STEPS AND PEOPLE
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NETWORKED VS HIERARCHICAL ORGANIZATION
Informal
Loosely structured
Delegate/Lead
Ownership/Participation
Empower
Employees an asset
Information shared ownership
Flatter/manageable organization
Risk management
Team contributions
Formal
Highly structured
Manage
Control
Direct
Employees a cost
Information management owned
Hierarchical organizations
Risk avoidance
Individual contributions
Classical/HierarchicalOrganization
NetworkedOrganization
31
THE ROLES OF MANAGERS AND SUBORDINATES IN
THE DIFERENT TYPES OF ORGANIZATIONS
Use of authority byThe manager Area of freedom
By subordinates
Manager makesdecisions andannounces or
sells it
Manager presents
Ideas andinvites
questions
Managerpresentstentativedecision subject
to change
Manager presents
problem, getssuggestions,
makes decision
Manager defines limitsasks groupto make decision
ManagerPermits
SubordinatesTo functionWithin limits
DefinedBy superior
Manager allowssituational
Leadership toOccur based upon
which node ofthe n/w Is best
Equipped toSolved problem
Hierarchical Organization Flattened Organization Networked Organization
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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
A NETWORK STRUCTURE FACILITATES THE CREATION OF
VIRTUAL COMPANIES
Alliances withSmall suppliers
Engineering competenciesclusters
Cross-Functionalteam
Alliances withSmall Suppliers
Alliances witha Competitor Whoprovides Servicesthat are Comple-
mentary
Boundary ofFirm A
Alliances withSubcontractors
Alliances withFirm B (a Major
Supplier)
Alliances withMajor Customer
Customer Responseand Order-Full filment
cluster
Center of Competencein Manufacturing
34
BUILDING SCALABLE SOLUTIONS
LEVEL OF PERFORMANCE
THROUGHPUT(A NUMBER OF MAT’L
THAT WILL BE PROCES’ED)RESPONSE TIME
RESPONSE TIME
PERFORMANCE PROBLEMS
LACK OF RESOURCES
LACK OF RESOURCES
BOTTLENECKS :-LACK OF MEMORY
-INSUFFICIENT PROCESSOR CAPACITY- NETWORK LATENCY
UNANTICIPATED INCREASEON DEMAND
POOR STRATEGY HUGE
RESERVE CAPACITY
POOR STRATEGY HUGE
RESERVE CAPACITY
FAILS IN ONE OR TWO WAYS :-THE RESERVE STILL INSUFFICIENT
-THE PERSON WHI CH EXECUTE THIS STRATEGY REMOVED
EFFECTIVE STRATEGY :
DESIGN SCALABLE SYSTEM
EFFECTIVE STRATEGY :
DESIGN SCALABLE SYSTEM
- ON-LLINE TRANSACTION PROCESSING (OLTP)- ON-LINE ANALYTIC PROCESSING (OLAP)
SPECIALIZATION OF SERVICE :- IT RESOURCES TO BE
OPTIMIZED-ALLOWS A HIERARCHY OF
RESOURCES TO BE CREATED
TECHNIQUES :-SPECIALIZATIONS OF SERVER IN
A DISTRIBUTED COMPUTINGENVIRONMENT
- FILE SERVER- PRINT SERVER
- DATA BASE SERVER- APPLICATION/COMPONENT SERVER
- GROUPWARE SERVER- WEB SERVER
- FILE SERVER- PRINT SERVER
- DATA BASE SERVER- APPLICATION/COMPONENT SERVER
- GROUPWARE SERVER- WEB SERVER
LOAD BALANCING
MAINTAIN A LIST OFAVAILABLE SERVERS
DISPATCHERHANDLING ALL IN
COMING TRAFFICS
MULTIPLE SERVER(CLUSTER)
35
THE NETWORK ENTERPRISE
Partners,Consultants,Contractors
Consumers
OtherEnterprises
NetworkedEnterprise
Suppliers,Distributors
Distributors
Community
BusinessCustomers
36
THE ORGANIZATIONAL MODEL ENVIRONMENT AND CULTURE*)
Employees andOther tangible assets• People• Plant, equipment, etc.
Social systems• Culture• Social structure
Formal Organizationalarrangements• Structure• Operating systems.
External environment• Task environment• Wider environment
Dominant coalition• Personal characteristics• Goals, strategies.
Technology• Methods• Techniques
Key organizational process• Information gathering• Communication• Decision asking• Matter/energy transporting• Matter/energy environment
*) J.P. Kotter, “Organizational Dynamics : “Diagnostic and intervention”Addison-Wesley, Reading, Massachussets, 1978
37
CLASSIFICATION OF INFORMATION SYSTEMS
BY ORGANIZATIONALSTRUCTURE
BY FUNCTIONALAREA
BY SUPPORTPROVIDED
TPS
MIS
KMS
OAS
DSS
EIS
GSS
ISS
DEPARTMENTAL
ENTERPRISE
INTERORGANIZATIONAL
ACCOUNTING
FINANCE
MANUFACTURING
MARKETING
HRM
38
THE INFORMATION SYSTEMS SUPPORT OF PEOPLE IN ORGANIZATION
Strategic Systems
Staff Support
Managerial Systems
Operational Systems
Office Automation and Communication Systems
Information Infrastructure and TPS Systems
Knowledge WorkersProfessionals
Middle Managers
Line ManagersOperators
Top Managers
Clerical Staff
PEOPLE SUPPORTED
39
THE FUNCTIONAL INFORMATION SYSTEMS
Integration
Integration
HRM
Finance
CR
M
Marketing
Operations
Accou
nting
Customers
TPS
Inte
gra
tion
Inte
gra
tion
40
TYPICAL FUNCTIONAL AREAS MAPPED ON THE VALUE CHAIN
Inbound Logistics(Material
ManagementOperations)
Operations(Operations))
Outbound Logistics(Material
ManagementOperations)
MarketingAnd Sales(Marketing)
Service
(Service orMarketing)
Procurement(Material Management-Operations)
Human Resource Management(Human Resources)
Firm Infrastructure(Accounting, Finance, General Management)
Technology Development(Engineering)
Prim
ary
Act
iviti
es
Su
pp
ort
Act
iviti
es
Profit
Mar
gin
Profit Margin
41
A MODEL OF INFORMATION SYSTEMS
IN THE PRODUCTION/OPERATION FUNCTIONAL AREA
• 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
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
@ Materials Management@ Cost Analysis@ Quality Control@ Short-term Scheduling
# Manufacturing Standards# Time and Motion Standards# Quality Control Standards# Safety Programs# National TQM Awards# Customers# Vendors
# Design andEngineering# Marketing# Finance# Accounting# HRM
Managerial Applications
Operational Applications
External InterfacesInternal Interfaces
42
THE FLOW OF INFORMATION IN TRANSACTION PROCESSING
EVENT
details
Exceptions
OperationalDatabase
With MasterTransaction Data
PROCESSINPUTS OUTPUTS
DataEntry
Internal andExternal
TPS PROGRAMS
UPDATE DATABASE &PRODUCE
TPSREPORTS
Details Reports,Document, Other Outputs
ExceptionReports
User
Downloading andUploading
Queries and
Answers
43
THE EVOLUTION OF TRANSACTION PROCESSING
TPS OLTPWEBB-BASED
TP
* CLIENT-SERVER ARCHITECTURE•INVOLVING CUSTOMERS,VENDORS, TELECOMM,AND DIFFERENT TYPEOF 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
THE COMPUTER INTEGRATED MANUFACTURING (CIM) MODEL(SIMPLIFICATION, AUTOMATION, INTEGRATION AND COORDINATION)
IntegratedSystems
architecture
IRM & COMM.
Common data
MaterialsScheduling
Shop floor
Qua
lity p
roce
ss
& Fac
ilitie
s pl
anni
ng
Mat
eria
lsH
andl
ing
Asse
mbl
y
Doc
umen
tatio
n
Inspection/
Testing
MaterialsProcessing
Analysis and
Simulation
Design
Manufacturing Management &Human Resource Management
Marketing
Fin
ance
Strategic Planning
+
+
+
+
Factory Automation
Product/Process
Manufacturing planningand control
45
MARKETING CHANNEL SYSTEMS
Sales Systems
Target Marketing Systems
Direct Sales
Dealer Systems
Logistic and DeliverySystems
Customer Support Systems
Market Intelligence Systems
ChannelSystems
Customers
The Enterprise
• Direct Sales• Mail Order• Factory Outlets
• Customer Profiling & Segmentation• Marketing Tracking• Competitor Surveillance• New Product Development• Decision Support• Cross-Selling• Internet Market Research
• Customer Communication• Customer Satisfaction• Service & Support• Training /User Education• Usage Enhancement
• Marketing and Sales Support• Value-Added Partnership• Dealer Communications• Business Management Support Function* Dealer’s Portal
• EDI/Internet• Demand Forecasting• Inventory Management• Order Entry and Fulfillment• Invoicing• Sourcing• Time-to-Market Reduction• Extranet• Warehouses
• Communication with the field• Sales Process/Account Mgt.• Selling Aids/Sales Force Support• Prospecting
• 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
Initiation Contagion Control IntegrationData
ManagementMaturity
Stages of increasing sophistication and maturity
Level ofIS/IT
expense
Computer (DP)Management Information
(systems)Management
Transition Point
47
TRANSITION BETWEEN COMPUTER AND INFORMATION MANAGEMENT
IS Role inThe Enterprise
Relationships withother departments
Managing the IS/ITDepartment
Managing the IS/IT activities
Computer(DP)
Management
Information(Systems)
Management
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
TRENDS IN THE EVOLUTION OF BUSINESS IT/IS
Aspects
“Era”
Nature of
the technology
Computer
Fragmented
Hardware limitation
Distributed process
Interconnected
Software limitation
Networks
Integrated
People/Vision limitation
Nature of operations
Remote from users
Controlled by DP
Regulated by
Management services
Available and
Supportive
to users
Issues in systems development
Technical issues
(programming/project management)
Support business
Users needs
(information management)
Relate to business
strategy?
Reasons for using the technology
Reducing costs
(esp. administrative)
(technology driven)
Supporting the
business (manager)
(user driven)
Enabling the business? (business driven)
Characteristics of systems
Regimented/Operational
(Internal)
Accommodating/
Control
Flexible Strategic?
(External)
DP MIS SIS
50
THE FOUR MAIN TYPES OF STRATEGIC SYSTEM*)
Those that share informationvia technology-based systems
with customers/consumers and/or suppliers and changeThe nature of the relationship
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 developmentand implementation of strategy
Those that produce more effective integration
of the use of informationIn the organization’s
value - adding processes
*) John Ward and Joe Peppard
51
THE DIFFERENT VIEWS OF STRATEGIC INFORMATION SYSTEMS
Purpose
Focus
Operation Efficiency Management effectiveness
Business advantage
through change
Internal 1. Data processing- automation of business tasks and processes
2. Management Information Systems (and EIS)
3. Internal business integration by process, jobs and organization redesign
External 4. Electronic links between organizations automating data exchange
5. Sharing information by direct access from one company to another’s information resources
6. External business integration, changing the roles of the firms in the industry
52
SUCCESS FACTORS IN STRATEGIC INFORMATION SYSTEMS
External, not internal
focus
Looking at stakeholders. Traditionally IS/IT was focused on internal process and issues
Adding value, not cost reduction
“Doing it better, not cheaper”. Differentiate from competitors –better products, better services - to succeed.
Sharing the benefits Within stakeholders and even competitors. Sharing benefits implies a “buy in”, a commitment to success, a switching cost.
Understanding customers
And what they do with the product or service
Business-driven innovation, not technology driven
The lead or the driving force is from the business, not necessary a traditional route to using IS/I, which has often been driven by technology, pushed by the IT suppliers and professionals, not pulled through by the users. Major failures in using IT are based on much better technology and bad business vision.
Incremental development, not the total application vision turned into reality
Prototyping of systems obviously has a key role to play here.
Using the information gained, from the systems to develop the business
Marketing segmentation and product mix
53
THE RELATIONSHIP BETWEEN THE BUSINESS, SIS, MIS AND DP
Business StrategicManagement
IS/ITStrategic
Management
InformationSystems Management
Project andComputer
Management
ImpactAnalysis
Systems design
Informationanalysis
User Management
Executive Management
Useroperations
54
THE RELATIONSHIP BETWEEN BUSINESS, IS AND IT STRATEGIES
BUSINESS STRATEGY
• Business decisions• Objectives and direction• Change
IS STRATEGY
• Business based• Demand oriented• application focused
IT STRATEGY
• Activity based• Supply orientated• technology focused
InfrastructureAnd services
Needs andpriorities
Supports business
Direction forbusiness
What is required
How it canbe delivered
Where is thebusiness going
and why
IS/ITIndustry, business, andorganizational impact
potential
55
THE STRATEGIC ALIGNMENT
Business strategy-Business scope
- Distinctive competencies- Business governance
Information systems,infrastructure and
Processes-Architecture- Processes
- Skills
Informationtechnology strategy
-Technology scope- Systems competencies
- IT governance
Organizational infrastructureand processes
-Administrative structure- Processes
- Skills
Functional integration
Str
ateg
ic in
tegr
atio
n
IT domainBusiness domain
Internal
External
56
THE IS/IT STRATEGIC MODEL
Externalbusiness
environment
IS/ITManagement
strategy
BusinessIS
strategies
ITstrategy
Currentapplication
portfolio
Future application
portfolio
InternalIS/IT
environment
ExternalIS/IT
environment
Internalbusiness
environment
IS/ITSTRATEGYPROCESS
57
AVOIDING THE DISINTEGRATION OF
THE APPLICATION PORTFOLIO
HIGH POTENTIAL
How to evaluate and select/reject?
How to convert to strategic or restrict further risk?
STRATEGIC
How to resource and manage?
How to justify and reap benefits from business changes?
How to ensure appropriate linkages, etc. to avoid enormous rework later?
How to release resource and ensure existing systems and infrastructure will support the strategic applications?
KEY OPERATIONAL SUPPORT
How and whento consolidate
INDIVIDUALINITIATIVES
BUSINESSINITIATIVES
Provision ofresources
Lack of definitionbetween high
potential and support
Decision aboutwhich to exploit
and when
58
ORGANIZING STRATEGIES FOR IS/IT MANAGEMENT
DIVISION OF RESPONSIBILITY : IT ARCHITECTURE MANAGEMENT
Function Control IT Group Business Unit Operations
Develop and maintain information architecture
• Monitor process, provide assistance if required • Complete business architectures defining business (within sectors) by location
• Complete translation of strategy into technology requirements
• Define information architecture
Develop and maintain application architecture
• Set standards, monitor process• Review architectures and report on adequacy to
Technology Committee• Ensure appropriate commonality
• Define requirements and develop architecture• Coordinate between units for common business
Develop and maintain data architecture
• Coordinate development/establishment of common database management process
• Create/maintain corporate databases
• Define requirements• Develop in accordance with standards
Develop and maintain hardware/operating system architectures
• Monitor development/implementations within sectors
• Develop and maintain architecture for corporate users-support operations
• Develop in accordance with corporate standards and business requirements
• Request variances as appropriate, make change recommendation
Develop and maintain telecommunications architectures
• Develop in accordance with standards and business requirements
• Define requirements• Report performance/ responsiveness problems
59
BALANCING IS DEMAND AND IT SUPPLY
”Federal”•Vision and leadership : themes
• Group-wide IT strategy for core Infrastructure
* Strategic accountability to stakeholders
* Synergy/Exploitation mechanisms
Decentralized• Excessive overall * Users control cost IS priorities• Variable standards * Business unit of IS/IT competence ownership• Reinvention of wheels * Responsive to• No synergy or changing integration business needs
Centralized• Economies of * Unresponsive scale * No business• Control of ownership of standards systems• Critical mass * No business of skills accountability for cost * Does not satisfy all business needs
The Federal IT Organization
60
IMPERATIVE FOR THE MANAGEMENT OF IS/IT
Achieve two-way alignment between the business and IS/IT strategy Develop effective relationships with the line management Deliver and implement new systems Build and manage IT infrastructure Re skill the IS function with new competencies and knowledge Manage vendor partnership Redesign and manage the federal IS organization
Venkatraman argued the need for a different approach to managing IT resources that considers the sources of value to be derived from IT resources and proposed that resources should be managed as a value centre
The value centre is an organizing concept that recognizes four interdependent sources of value from IT resources Cost centre
Minimizing risksOperational efficiency
Service centreMinimizing risksTo create an IT enabled business capability to support current strategies
Investment centrelong-term focusTo create new-IT based business capabilitiesMaximizes business opportunity from IT resources
Profit centreTo deliver IT services to the external marketplace for incremental revenueGaining valuable experience in becoming a world class IS function
61
SUMMARY OF STRUCTURAL ARRANGEMENTS FOR
IS FUNCTION IN MULTIPLE BUSINESS UNITS
Structural arrangements for the
IS Function
Strategies for managing IS/IT activities
Advantages Critical management issues
Independent IS/IT activities in business units
• Business units pursue independent system initiatives
• Business units have ownership
• Users control IS/IT priorities
• Responsive to business unit’s needs
• Integration• Lack of quality control of data• Variable standards of IS/IT
competency• Reinvention of wheels and
duplication of effort• Little synergy across business• Managing cost
Centrally-driven IS/IT activities
• Corporate wide IS/IT solutions improved on business units
• Scale economies• Control of standards• Critical mass of skill
• Politics• Unresponsive• Does meet every business unit’s
needs• Effect on customer
Informal cooperation in IS/IT activities across business units
• Informal social networking between the centre and business units
• Usually brought about by movement of key IS/IT personnel across business units
• Awareness of IS/IT issues across the enterprise
• Coordination and direction setting
• Leaving too much to chance
“Federation” (Integrated IS/IT)
* Balancing central control and business unit autonomy without losing the advantage of global coordination and integration
• Group-wide IS/IT strategy and architecture with devolution where appropriate
• Complexity• Execution• Timing• Defining “where appropriate”
62
THE INTERNAL CONTEXT
ENVIRONMENT OF IS/IT STRATEGY
Opportunistic Complex
Traditional Backbone
LOW HIGH
HIGH
LOW
Infusion - degree of dependence
Internal Organizational pressureDemanding further distribution of IS/IT control
Externalcompetitive
pressureincreasing
the criticallyof IS/ITto the
business
Diffusion- degree of
decentralizationof IS/IT controlin the
organization
Critical, high-qualitysystem, high-degree
of integration
Not CriticalImprove efficiency C
entr
aliz
edD
ecen
tral
ized
CriticalDepends on the
systems for success
Short-term prioritiesCreate biz-advantages
in some areas
63
THE COMPOSITE MATRIX
(by Ward)
STRATEGIC (Attack) HIGH POTENTIAL (Beware)
KEY OPERATIONAL (Explore) SUPPORT (Safe)
BusinessOpportunitydriven
ITOpportunitydriven
BusinessIssue-driven
ITIssue-driven
Competitive/Exploitation focus
Complex :-Organizational planning, multiple-Methods based on goal seeking
Opportunity seekingCritical success factorsDemand Management
Innovation/Experimentation focus
Federation:-Business-led, decentralized-Entrepreneurial or new technology-driven
Backbone:-Methodical planning, integrated solutionsCentralized control- Current business performance focus
Traditional:-Evolutionary planning, localized applications,decentralized control- Utility focus, Efficiency focus
Supply managementOpportunity taking
Current problem solving
Degree of dependence of the business on IS/IT application inAchieving overall business performance
H L
PotentialContribution
Of IS/ITApplication
ToAchieving
Future Business
goals
L
H
64
THE COMPOSITE MATRIX
(by Ward)
STRATEGIC HIGH POTENTIAL
* Direct Marketing and telesales system
** Advertising and Promotion-Campaign Management
** Sales Forecasting/Market Analysis
? Customer Relationship Management
** e-Procurement (general items)
? On-line customer specification system
** Product tracking/traceability
** Data warehouse-customer analysis
• Product database/Inventory Management, Manufacturing Requirements Planning1
• Order processing, Dispatch, Invoicing, etc.1
• Production control• Purchasing Materials
() Costing systems (activity and product)
() Sales analysis1
• Warehouse Management• Wholesaler EDI (ordering, etc.), etc.
• Payroll and Personnel Systems• Ledgers – Receivables1
- Payables1
• General Ledger and Budgeting1
• Office systems
() Purchasing-general1
* Samples Management, etc.
KEY OPERATIONAL SUPPORT
Key : * Existing system is satisfactory () Existing system needs improvement ** Planned system ** Potential system
Note 1 – applications carried out by SAP or planned to be
Example portfolio for a manufacturing company
65
THE INFLUENCE AND IMPACT
Business environment
The organization
Duality of IT
Impact ofCompetitor strategies (c)Redefines (d)
Supports (a)Provide novel
Opportunities (b)
Duality of IT
Disrupts-changesThe rules
Competitors
Industries
THE EXTERNAL CONTEXT
66
TOWARD A FOURTH ERA :
AN ORGANIZATIONAL IS CAPABILITY
The essence of sustainablefrom IS
Organization gain some“first mover advantage” withan innovative applications
Be quickly copied and does not produceAn advantage that is sustainable
When patent protection for IS applications isalmost non-existent and keeping an
IS innovation secret is difficult The use of standard applications packages
that developed by vendors
Can limit an organization’s ability to innovate
Investments made in technologyinfrastructure are becoming
Increasing significant
Inappropriate decisions
Affect an organization’s ability to respond swiftly and flexibly to changing market conditions
Become a significant Competitive liability
Sustainabilityadvantage
After efforts to duplicate that advantage have ceased
Sustainability, as an ongoing state, can be defined as an organization’s ability to continually deliver explicit business value through IS/IT thus leading to advantage. Only IS management skills are likely to be a source of sustained advantage.
Dent-Micallef studies concluded that some firms have gained advantage by using IT to leverage intangibles, complementary humanand business resources such as organizational flexibility, integrating business strategy planning and IS/IT strategy, and supplier relationships.
67
DEVELOPING AN OVERALL ORGANIZATIONAL CAPABILITY
TO EXPLOIT IS/IT EFFECTIVELY
KEY STRATEGY AREA : For managing investments in IS/IT, to deliver the maximum value in terms of benefits
to the business For managing the data, information and knowledge resources of the organization to
ensure that its business value is fully exploited and protected For managing the acquisition, deployment and utilization of information technologies,
through IS/IT services, to the benefit of the organization and relationships with technology and services suppliers
For organizational management of the range of IS/IT-related resources, the activities they perform and the governance and administration of IS/IT, both in its unique features and in relationships with other parts of the business
68
CROSS FUNCTIONAL PROCESS : PRODUCT DEVELOPMENT
CROSS FUNCTIONAL PROCESS : ORDER PROCESSING
MARKETING
NEEDS ANALYSISRESEARCH
MARKET TEST
R & D
COMPONENT DESIGN
PRODUCT TESTPRODUCT RELEASE
PRODUCTION
PROCESS DESIGNEQUIPMENT DESIGNPRODUCTION START
PRODUCT DEVELOPMENT
CO
MP
ET
ITO
R A
NA
LYS
ISM
AR
KE
T R
ES
EA
RC
H
NE
W P
RO
DU
CT
PR
OT
OT
YP
E
SALES
PROPOSALCOMMITMENT
LOGISTICS
CONFIGURATIONDELIVERY
FINANCE
CREDIT CHECKINGBILLING COLLECTION
ORDER PROCESSING
SA
LE
S O
RD
ER
PA
YM
EN
T
69
LOGICAL MODEL OF ORDER PROCESSING
ARRIVAL OF ORDERW/O REFERENCE TO
QUOTATION
CREATE BILLINGDOCUMENT
MATERIAL ISISSUED
QUOTATION IS VALID
ARRIVAL OF ORDERWITH REFERENCE TO
QUOTATION
PROCESSING
STANDARD ORDERPROCESSING
ORDER CONFIRMATIONIS SENT
ORDER IISRELEASED
SALES REQUIREMENTARE DETERMINED
REJECTION ISSENT TO CUSTOMER
DELIVERYPROCESSING MRP
BILLING DOC.PROCESSING
70
BUSINESS PROCESS REENGINEERING
ORGANIZE ARROUNDOUTCOME
WHO USE THE OUTPUTPROCESSING WORK INTO
THE REAL WORK OFTHE PROCESS
PUT THE DECISION POINTAND BUILT CONTROL
INTO THE WORK PROCESS
LINK OF PARALLELACTIVITIES
TREAT DISPERSED RESOURCES
STEPS IN THE PROCESSIN A NATURAL ORDER
LOOK AT THE PROCESSFROM CUSTOMER’S
PERSPECTIVE
CAPTURE INFORMATIONONE TIME, ONE PLACE
AT THE SOURCE
BALANCED APPROACH TO
CHECK AND BALANCED
BALANCED APPROACH TO
CHECK AND BALANCED
MINIMIZE RECONCILIATION
TASKS
MINIMIZE RECONCILIATION
TASKS
71
THE EVOLUTION OF
CORPORATE NETWORKS
DIFFERENT BETWEEN WAN AND EXTRANET
CLIENT SERVER
TCP/IP
WORLD WIDE WEBB MANAGEMENT STRATEGIES FOR DISTRIBUTED IT
DISTRIBUTION AND CONTROL
LEGEND WAN EXTRANET
PROTOCOL
PROVIDER
LEASED/PURCHASED LINES
TELCOM
USE TCP/IP
VIRTUAL PROVIDE
NETWORK (INTERNET)
COMPUTERCENTER
INTERNET
LAN/WAN
INTRANET/EXTRANET
CONNECTIVITY
AVAILABILITYAVAILABILITY
PERFORMANCE
USER
REQUIRE-MENT
IS MANAGEMENT
STRATEGY
TECHNICAL APPROACH
CONNECTIVITY
AVAILABILITY
PERFORMANCE
BUILD TRANSPA-RENT SOLUTIONS
BUILD RELIABLE SOLUTIONS
BUILD SCALABLE
SOLUTIONS
STANDARDS, DIRECTORIES, SECURITY
REDUNDANCY, MONITORING, ISOLATION
SERVER SPECIAL
IZATION, LOAD
BALANCING
72
BUILDING A DISTRIBUTED INFRASTRUCTURE
ORGANIZATION DOMAIN
BUILDING A DISTRIBUTED INFRASTRUCTURE
BUILDING TRANSPARENT SOLUTIONS
USERS GROUPS SYSTEMS
APPLICATION OF STANDARDS
USE OF SECURITY
DEPLOYMENT OFENTERPRISE
DIRECTORY SERVICES
BUILDING TRANSPARENTSOLUTIONS
BUILDING RELIABLESOLUTIONS
BUILDING SCALABLESOLUTIONS
73
BUILDING RELIABLE SOLUTIONS
FAULT TOLERANCE THROUGH ISOLATION AND MONITORING
CLIENTS
SERVER A SERVER B
MONITORING
MANAGEMENT
DISK ARRAY A
DISK ARRAY B
RELIABLITY OFINFORMATION SYSTEMS BUILD REDUNDANCY FAULT-TOLERANT
SYSTEMS
74
ARCHITECTURE AND STRATEGY
PRESENTATION SERVICE IN WEB APPLICATION THREE-TIERS CLIENT SERVER
ARCHITECTURE
ARCHITECTURE FOR DISTRIBUTED PROCESSING
TWO-TIERS :-CLIENT
-- SERVER
THREE – TIERS :-PRESENTATION TIERS
-- BUSINESS LOGIC TIERS-- DATA TIERS
FOUR – TIERS :-BROWSER
-- WEB SERVICES-- APPLICATION- DATABASE
PRESENTATION
APPLICATION
DATABASE
APPLICATION
DATABASE
WEB SERVICES
BROWSER
PRESENTATION
RICHCLIENT
LEANCLIENT
DATABASE
ERP
LEGACYSYSTEMS
DATA
BUSINESSLOGIC
75
SUPPLY CHAIN MANAGEMENT
CUSTOMER DEMAND
RETAILER
WHOLESALER
DISTRIBUTOR
MANUFACTUR
deliveries
deliveries
deliveries
orders
orders
orders
PROCUREMENT
PRODUCTION
MATERIALS MGMT.
ORDER FULFILLMENT
INTERNAL & EXTERNALSUPPLY CHAIN
THE SUPPLY CHAIN INCLUDED FLOWS OF MATERIALS, SUPPLIES, SERVICES, AND INFORMATION, BOTH LOGISTICAL AND FINANCIAL
THE APPLICATION OF METHODOLOGIES AND TECHNIQUES TO INTEGRATE THE PROCESS OF VENDORS, PRODUCERS, DISTRIBUTORS, AND SELLERS TO ACHIEVE AT THE LOWEST TSC
76
INDEPENDENT OPERATION OF STAKEHOLDERS CREATE “BULLWHIP EFFECT”
CUSTOMERS
SUPPLIERS SUPPLIERS
WAREHOUSES
MANUFACTURERSMANUFACTURERS
DISTRIBUTORS
CUSTOMERS
77
ORGANIZING STRATEGIES FOR IS/IT MANAGEMENT
ORGANIZING OPTIONS
RESOURCECONFIGURATION
STRUCTURECONFIGURATION
ALLOCATION OFDECISION RIGHTS
RESOURCINGSTRATEGIES
CENTRALIZATIONDEVOLUTION
INSOURCING OUTSOURCING
DEPEND ON THE APPROACH :ADOPTED FOR INFORMATION
APPLICATION ANDTECHNOLOGY MANAGEMENT
IS FUNCTION IS ORGANIZEDTO SATISFY ITS “CUSTOMERS”REQUIREMENTS AS WELL AS
TO MANAGE ITSELFEFFECTIVELY
IF AND HOW THAT STRUCTURESHOULD BE OVERLAID BY OTHER
“GOVERNING” PROCESSES(COMMITTEE OR STEERING GROUPS)
78
BEYOND CENTRALIZATION VS DECENTRALIZATION
IDEAL ORGANIZATIONAL ARRANGEMENTS FOR IS/IT RESOURCES
STAGE OF MATURITY OFITS APPLICATION
PORTFOLIO
THE POTENTIALBENEFIT OF SINERGYBETWEEN BUSINESS
IN BOTH TRADING GOODS
THE GEOGRAPHY OFTHE ENTERPRISE
BUSINESS DIVERSITY ANDRATE OF CHANGE OF THETYPES OF BUSINESS ANDCOMPETITIVE PRESSURES
THE ECONOMICS OFRESOURCING,
OBTAINING ANDDEPLOYING SKILLS
TREND AWAY FROMPRODUCTION TO SERVICE
ORIENTATION
TO PROVIDING THE ARCHITECTURAL
SUPPORT FOR THEAPPLICATIONS
THE DATA OR INFORMATIONARCHITECTURE WILL BECOME
A CRITICAL OF STRATEGY
CERTAIN AREA SHOULD BE“CENTRALIZED”
THESE INCLUDED : TELECOMMUNICATIONS, H/W, S/W AND INFORMATION ARCHITECTURE”RISK MANAGEMENT AND SECURITY, SHARED SERVICES AND UTILITIES, AND HR.
79
CHARACTERISTICS OF THE HIERARCHY, ENTREPRENEURIAL, AND NETWORK ORGANIZATION
CHARACTERISTIC HIERARCHY ENTREPRENEURIAL NETWORKED
PROCESS INTEGRATION AND SYNCHRONIZA-
TION
•PROCESS ACTIVITIES SEGREGATED INTO DISTINCT TASKS MANAGED BY FUNCTIONS•* ACTIVITIES ARE SYNCHRONIZED DURING YEARLY PLANNING SESSIONS
•PROCESS ACTIVITIES DEFINED ON AN ONGOING BASIS BY THE PEOPLE DOING THE WORK•* ACTIVITIES SYNCHRONIZED THROUGH AD HOC DISCUSSION (FACE-TO-FACE, E-MAIL, PHONE)
•PROCESS ACTIVITIES INTEGRATED AND SYNCHRONIZED THROUGH THE FLOW OF INFORMATION IN IT SYSTEMS.•* CHANGES DISCUSSED AND PLANNED THROUGH FREQUENT INTERACTIONS AMONG THOSE DOING THE WORK(FACE-TO-FACE, E-MAIL, PHONE)•* IN THE CASE OF UNSTRUCTURED AND UNCERTAIN ACTIVITIES, TEAMS MAY MEET DAILY OR WEEKLY TO PLAN ACTIVITIES.
PROCESS CYCLE TIME
•OPERATING CYCLE TIME BASED ON ORGANIZATIONS MANAGEMENT CYCLE TIME.•* FOR HIGHLY STRUCTURED, ROUTINE, AUTOMATED PROCESSES(E.G. FACTORY OPERATIONS) CYCLE TIME CAN BE SHORTENED.•* IN UNSTRUCTURED SITUATIONS, TIME AND INVENTORY BUFFERS USED TO MANAGED UNCERTAINTY
•THE OPERATING CYCLE TIME BASED ON THE CYCLE TIME OF CHANGES IN THE BUSINESS ENVIRONMENT.•* OPERATING ACTIVITIES NOT STRUCTURED, AS A RESULT, ALL ACTIVITIES MANAGED IN THE SAME, UNSTRUCTURED WAY.
•INFORMATION ON THE MARKET, INDUSTRY AND OPERATIONS AVAILABLE AND ACTED ON IN REAL TIME.•* THE CYCLE TIME OF OPERATING ACTIVITIES APROCHES THE CYCLE TIME OF CHANGES IN THE BUSINESS ENVIRONMENT
80
CHARACTERISTICS OF THE HIERARCHY, ENTREPRENEURIAL, AND NETWORK ORGANIZATION
CHARACTERISTIC HIERARCHY ENTREPRENEURIAL NETWORKED
PROCESS COMPLEXITY
•THE INHERENT COMPLEXITY OF THE BUSINESS ENVIRONMENT MINIMIZED THROUGH STRUCTURE AND SLOW RESPONSE TO CHANGE•* STANDARD PRODUCTS AND SERVICES MASS PRODUCED FOR MASS MARKETS TO REDUCE BUSINESS COMPLEXITY•* PROCESSES STRUCTURED TO REDUCE OPERATING COMPLEXITY
•START-UP FIRMS OFFER A LIMITED PRODUCT SET TO A LIMITED MARKET• WITHIN THIS SIMPLE BUSINESS ENVIRONMENT, SIGNIFICANT CUSTOMIZATION PROVIDED TO ENSURE THAT PRODUCTS MEET THE REQUIREMENTS OF INDIVIDUAL CUSTOMERS.
•DESPITE SIGNIFICANT BUSINESS COMPLEXITY, REAL TIME INFORMATION AND SOPHISTICATED ANALYTICAL TOOLS ENABLE PRODUCTS AND SERVICE TO BE CUSTOMIZED FOR INCRESINGLY SMALLER CUSTOMER SEGMENTS•* AT THE LIMIT, A COMPANY CAN PERSONALIZE FOR A “MARKET OF ONE”•* REAL TIME INFORMATION AND SOPHISTICATED ANALYTICS ENABLE A LARGE FIRM TO MANAGE COMPLEXITY DIRECTLY RATHER THAN MANAGING THROUGH COMPLWXITY REDUCTION.
MANAGEMENT CYCLE TIME
•* DEFINED AROUND YEARLY PLANNING AND BUDGETING SYSTEMS•* YEARLY AND QUARTERLY PERFORMANCE MONITORING AND REPORTING DICTATED BY COUNTRY-LEVEL REGULATIONS FOR PUBLIC AND PRIVATE FIRMS.
•* MANAGEMENT PROCESSES DEFINED BY THE FOUNDER, OFTEN AD HOC.•* DIRECT INVOLVEMENT OF THE FOUNDER IN MOST DECISIONS AND ACTIVITIES CAUSE THE MANAGEMENT CYCLE TIME TO BE TIMED DIRECTLY TO THE BUSINESS CYCLE.
• REAL-TIME INFRMATION AND REPORING ENABLES THE MANAGEMENT CYCLE TIME TO BE TIED DIRECTLY TO THE OPERATING CYCLE, WHICH, IN TURN, HAS BEEN TIMED TO THE BUSINESS ENVIRONMENT.*
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SCOPE AND GRANULARITY OF BUSINESS UNDERSTANDING
•UNDERSTANDING OF BUSINESS LIMITED TO SPECIFIC JOB AN EMPLOYEE IS HIRED TO DO. AT OPERATING LEVELS, SCOPE IS LIMITED TO A SPECIFIC TASK. ONLY TOP MANAGEMENT TEAM UNDERSTANDS BUSINESS DYNAMICS ACROSS SCOPE OF ENTERPRISE BUT DEPTH UNDERSTANDING OF ANY ONE PORTION OF THE BUSINESS LIMITED.•EMPLOYEES AT LEVELS UNABLE TO LINK SPECIFIC DECISIONS AND ACTIONS TO THE FIRM’S OVERALL PERFORMANCE.•PLANNING TARGETS AND GOALS SET ON A YEARLY BASIS AND MONITORED AND ADJUSTED QUARTERLY. THIS RESULTS IN QUARTERLY CYCLES OF FEEDBACK/ FEEDFORWARD.• UNDERSTANDING BUSINESS DYNAMICS PREDICATED OF THE ORGANIZATION OPERATING AS ORIGINALLY STRUCTURED.
•BECAUSE OF THEIR DIRECT INVOLVEMENT IN ALL ACTIVITIES AND DECISIONS, FOUNDERS, AND EMPLOYEES HAVE AN IN-DEPTH UNDERSTANDING OF THE BUSINESS.• BUSINESS PERFORMANCE MONITORING AND COMMUNICATED IN REAL TIME, ENABLING FOUNDERS AND EMPLOYEES TO LINKS ACTIONS TO PERFORMANCE IN A REAL-TIME CYCLE OF FEEDBACK/ FEEDFORWARD.• OPERATIONS CONTINUALLY ADJUSTED AND REFINED IN AN AD HOC MANNER.
•DETAILED INFORMATION ON THE MARKET, INDUSTRY, AND BUSINESS PERFORMANCE, AND OPERATIONS ENABLES OPERATING TEAMS(WHICH MAY INCLUDE CUSTOMERS, SUPPLIERS, AND BUSINESS PARTNERS) TO REFINE AND ADJUST GOALS AND ACTIVITIES WITHIN THE SCOPE OF THEIR AUTHORITY, BASED ON CHANGES IN THE BUSINESS ENVIRONMENT.•* OPERATING TEAMS, RATHER THAN INDIVIDUALS, HAVE AUTHORITY OVER A BROADER SET OF BUSINESS ACTIVITIES(PROCESSES), AND SENIOR MANAGEMENT, LIKE THE FOUNDERS IN AN ENTREPRENEURIAL VENTURE, TAKE A MORE ACTIVE ROLE IN MONITORING BUSINESS OPERATIONS AND PARTICIPATING IN HIGH-RISK DECISIONS.
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INFORMATION AND BUSINESS LITERACY
* EMPLOYEE UNDERSTANDING OF BUSINESS DYNAMICS AND INFORMATION LIMITED TO SPECIFIC TASKS
* EMPLOYEES AND FOUNDERS HAVE ACCESS TO ALL INFORMATION REQUIRED TO RUN THE COMPANY AND ARE EXPECTED TO USE THAT INFORMATION TO SOLVE PROBLEMS, MAKE DECISIONS, AND TAKE ACTIONS TO ACCOMPLISH FIRMS’S GOALS
•EMPLOYEES AT ALL LEVELS HAVE ACCESS TO INFORMATION ON BUSINESS GOALS AND OPERATIONS ACROSS A WIDE RANGE OF ACTIVITIES, AND, WORKING IN TEAMS WITHIN THE SCOPE OF THEIR COLLECTIVE AUTHORITY, ARE EXPECTED TO USE THAT INFORMATION TO MAKE DECISIONS AND TAKE ACTIONS TO ACCOMPLISH THE FIRM’S GOALS.
BOUNDARIES AND VALUES
•ACTIVITIES AND AUTHORITIES SEGMENTED SO THAT ONE INDIVIDUAL HAS THE POWER OF AUTHORITY(SHORT OF SABOTAGE) TO CAUSE IRREPAIRABLE HARM TO COMPANY(EVEN THE CEO REPORTS TO A BROAD OF DIRECTORS)•* IN AREAS OF HIGH RISK, SPECIAL SECURITY PRECAUTIONS (E.G. RESTRICTED ACCESS, DIRECT SUPERVISION) PREVENT SABOTAGE.•* SINCE BROAD DECISION MAKING AUTHORITY LIMITED TO UPPER LEVELS OF MANAGEMENT, COMPANY WIDE VALUE SYSTEMS NOT AS CRUCIAL.
•BOUNDARIES AND VALUES CREATED IN REAL TIME AND TRANSMITTED DIRECTLY BY FOUNDERS.• FOUNDERS DIRECTLY INVOLVED IN MOST DECISIONS AND ACTIONS.• THE SIZE OF THE COMPANY LIMITS RISK TO THE FOUNDERS AND A SMALL NUMBER OF INVESTORS.
•AS DECISION AUTHORITY PUSHED DOWN, SHARED VALUES BECOME AN IMPORTANT COMPONENT OF STRATEGIC CONTROL.
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UNITS OF WORK AND CHAIN OF COMMAND
•WORK HIGHLY SEGREGATED BY FUNCTION WITH DUPLICATION OF RESOURCES WITHIN EACH OPERATING UNIT.• DEEP CHAIN OF COMMAND WHO REPORT THROUGH BUSINESS UNIT HEADS TO CORPORATE HEADQUARTERS.
•SIMPLE, FUNCTIONAL CHAIN OF COMMAND• FLAT CHAIN OF COMMAND (3 OR LESS) WITH FUNCTIONAL MANAGERS REPORTING DIRECTLY TO THE FOUNDER.
•FLAT, TEAM BASED CHAINS OF COMMAND• MARKET FOCUSED OPERATING TEAMS COMPOSED OF FUNCTIONAL MANAGERS REPORT TO BUSINESS UNIT MANAGERS, WHICH REPORT TO CORPORATE H/Q.• BROAD CHAINS OF AUTHORITY WITH WORKS TEAMS REPORTING TO OPERATING MANAGEMENT TEAMS.
SPAN OF MANAGEMENT
* EACH MANAGER SUPERVISES 5-7 DIRECT REPORTS.
* VARIES WITH THE SIZE AND STAGE OF DEVELOPMENT. SPAN OF MORE THAN 10 ARE COMMON.
•SPANS OF 30 OR MORE ARE COMMON.
CORPORATE HEADQUARTERS
•LARGE CORPORATE H/Q STAFF ASSUME MAJOR RESPONSIBILITY FOR PLANNING, BUDGETING, AND PERFORMANCE MANAGEMENT.• LARGE STAFF OF ANALYSTS REQUIRED TO PLAN, MONITOR, AND COORDINATE WORK.
•SINGLE SITE H/Q AND OPERATIONS.• LITTLE FORMAL PLANNING, BUDGETING, AND PERFORMANCE MONITORING.• OPERATIONS PLANNED, COORDINATED, AND MANAGED BY THOSE WHO DO THE WORK.
•SMALL CORPORATE H/Q WITH MINIMAL RESPONSIBILITY FOR PLANNING, PERFORMANCE MONITORING, AND ORGANIZATION WIDE RESOURCE MANAGEMENT• WHILE FORMAL PLANNING, BUDGETING, AND PERFORMANCE MONITORING STILL TAKE PLACE, PCO ACTIVITIES TAKE PLACE IN OPERATING UNITS.
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COORDINATING MECHANISMS
* WORK IS PRIMARILY COORDINATED THROUGH DIRECT SUPERVISION AND THE CHAIN OF COMMAND.
* WORK IS COORDINATED THROUGH AD HOC ADJUSTMENTS BY THOSE DIRECTLY INVOLVED IN THE WORK.
•WORK COORDINATED THROUGH THE INTEGRATED FLOW OF INFORMATION.•ROUTINE WORK COORDINATED THROUGH REAL-TIME FEEDBACK AND ADJUSTMENT.• IMPORTANT DECISIONS AND ACTIONS COORDINATED THROUGH MEETINGS OF OPERATING MANAGERS AND EMPLOYEES WHO ANALYZE REAL-TIME OPERATING INFORMATION TO CONTINUALLY ADJUST AND REFINE GOALS AND THEIR EXECUTION.
ROLES
•EXCEPT AT TOP LEVELS OF FIRM, ROLES, AND ACCOUNTABILITY DEFINED IN FORMAL JOB DESCRIPTIONS.• ROLES BASED ON FUNCTIONAL EXPERTISE AND SKILLS.
•MINIMAL TO NO FORMAL SPECIFICATION OF ROLES• EMPHASIS ON HIRING INNOVATORS(“PIONEERS”)
•ALL ORGANIZATIONS, REGARDLESS OF SIZE, REQUIRE INNOVATORS (“PIONEERS”) AND OPERATORS (“SETTLERS”)• SENIOR EXECUTIVES MUST BE SKILLED AT LEADING AND ENGAGING.• SELF-MANAGING WORK TEAMS DEFINE WORK AND HOW IT GETS DONE
CAREER PROGRESSION
•* EMPLOYEES ADVANCE THROUGH FUNCTIONAL HIERARCHICAL PROGRESSION• SENIORITY IS AS IMPORTANT AS (AND IN SOME ORGANIZATIONS IS MORE IMPORTANT THAN) EXPERTISE AND PERFORMANCE AS A CRITERIA FOR ADVANCEMENT.
•CAREER PROGRESSION IS OFTEN LATERAL.• IN A RAPIDLY GROWING FIRM, EMPLOYEES MAY MOVE DOWN IN RANK AS SENIOR MANAGERS ARE HIRED TO ENSURE THE LEADERSHIP REQUIRED BY THE MORE COMPLEX ORGANIZATION. ORIGINAL EMPLOYEES MAY LEAVE AT THIS POINT.
•* MINIMAL OPPORTUNITIES FOR ADVANCEMENT WITHIN FLAT HIERARCHICAL CHAINS OF COMMAND.• INNOVATORS MAY HAVE AN OPPORTUNITY TO LAUNCH AND GROW NEW BUSNESS.• EXPANDED JOBS, INCREASED LATERAL MOVEMENT, AND OWNERSHIP INCENTIVES MAKE WORK ENVIRONMENT MORE CHALLENGING AND REWARDING.