FREE online courses on Information Technology - Chapter 4 IT AND CORPORATE STRATEGY - Technology for Structuring the organization

 

In early chapters, we discussed the use of information technology design variables in structuring the organization. Because a firm's structure is highly interrelated to its strategy, these two aspects of the organization must be considered together. For example, a firm might decide to compete on the basis of extremely efficient operations, to become the low cost.

 

Table : Summary of Issues and Recommendations

 

STRUCTURE

 

¨       Use IT design variable to help structure the organization

¨       Look for partnership and alliance

 

          Technology              Having an infrastructure in place

          Opportunities  Evaluate alternative structure

          Impact          Reaction from employees

 

STRATEGY

 

¨       Look for opportunities

¨       Conduct technology assessment

 

          Technology              Learn about new technologies, e.g., the Internet

          Opportunities  Search for new ways to use the technology to gain

                                       an edge.

          Management  Manage the development of new technologies

 

INTEGRATION OF TECHNOLOGY AN DECISION MAKING

 

¨       Consider the options provided by technology in making decisions.

¨       Use IT to transform operations

 

          Technology              New technology can create new opportunities

                                      to change the way a business functions.

          Impact          Management decisions may influence or be

                                      Constrained by the technology.

 

A CORPORATE PLAN

 

¨       See that a 3-to-5 year information systems plan is developed

 

 

          Mechanism              Operational plan of 1 year, Longer-term plan of

                                      3 to 5 years Technology assessment

Link to organization plan.

                                      Separate information technology

                                      Planning officer.

          Involvement             User and management input

          Priorities                  Steering committees to choose applications

                                      Annual report of information services department

                                      tied to plan

 

ORGANIZATIONAL STRUCTURE FOR IT

 

¨       Evaluate various patterns for providing technology to choose the most

Effective alternative

¨       Develop a policy that balances coordinates costs and local autonomy

 

          Type                      Centralized distribution, decentralized for Operations

                                      and Systems development.

          Evaluation               Criteria contribution to strategy and service Levels,

costs responsiveness, flexibility, history of 

organization.

          Control                   Balance local autonomy with corporate needs.

 

HARDWARE/SOFTWARE STRUCTURAL ARCHITECTURE

 

¨       Develop architecture for firm

¨       Establish information systems policy

 

          Define architecture   Determine hardware, software, and Networking

                                      options

          Select standards      Select corporate standards for compatibility

          Establish policy         Write the standards and promulgate them as Policy.

 

 

NEW APPLICATIONS

 

¨       Convene a committee of users and managers to be affected by the system to choose an alternative for design

¨       Be sure that a realistic number of alternatives are considered, including the status quo or no-new-systems alternatives.

 

          Generate new ideas   Also form plan, procedures for submission of

                                                requests, new applications.

          Selection                          Use of committees; use formal approaches

                                                for selection.

          Development            Extensive user input, management involve-

                                      ment in setting of goals, reviewing system

          Tools                               Acquisition and use of tools-structured

                                                approaches.

 

OPERATIONS

 

¨       Establish criteria for measuring the performance and service levels of operations.

¨       Measure and evaluate the operations function regularly.

 

          Measurement           Develop user-oriented measures

          Evaluation                         Administer regular evaluations including a

                                                variety of measures

          Control                             Are there adequate controls?

 

SOURCES OF SERVICES

 

¨       Look for alternatives for more internal staff to outsourcing

¨       Authorize adequate staffing levels; systems design is labor intensive!

 

Evaluation and choice criteria         Develop evaluation methodology

Compatibility among vendors Establish vendor compatibility policy

Technological assessment    Consider changes in technology in decisions

Staff increases                            Examine alternatives such as adding to the

                                                staff, contract services, packaged programs,

                                                and outsourcing.

 

CONTROL

 

¨       Evaluate the contribution of IT to corporate goals and strategy

¨       Evaluate information services performance with respect to the plan

¨       Take the needed corrective action to achieve the plan, e.g,

¨       Resources, modify schedules, and so on.

 

Overall evaluation                        Compare results to plan

Frequent feedback                       Monitor progress on systems development

                                                projects conduct user surveys as discussed

                                                under “Operations”