Implementing Business Change With Information Technology

IMPLEMENTING BUSINESS CHANGE WITH INFORMATION TECHNOLOGY What Is Change? Change is:  alterations in people, structure, or technology  change is an organizational reality  managing change is an integral part of every manager’s job  complicates the jobs of managers Forces for Change External Forces External Forces causing change are:  marketplace - adapt to changing consumer desires  governmental laws and regulations - frequent impetus for change  technology - source of change in almost all industries  labor markets - HRM activities must change to attract and retain skilled employees in the areas of greatest need  economic - uncertainties about interest rates, budget deficits, and currency exchange rates Internal Forces Internal Forces causing change are: • originate from the operations of the organization • forces may include strategy, workforce, new equipment, or employee attitudes The Change Process

Three Categories of Change

Structure

Work specialization, departmentalization, chain of command, span of control, centralization, formalization, job redesign, or actual design

Technology

Work processes, methods, and equipment

People

Attitudes, expectations, perceptions, and behavior

Three main categories of change are: • changing structure - organization’s formal design, centralization, degree of formalization, and work specialization • structural components and structural design • changing technology - modifications in the way work is performed • alterations in the methods and equipment used • consequence of competitive factors or innovations within an industry – automation - replaces tasks done by people with machines – computerization - recent visible changes in information systems • changing people - changes in employee attitudes, expectations, perceptions, and behavior • organizational development (OD) - techniques or programs to change people and the nature and quality of interpersonal work relationships – intended to help individuals and groups work together more effectively

Managing Change Change is managed by: • identifying what organizational areas might need to be changed • putting the change process in motion • managing employee resistance to change • Involve as many people as possible in planning and application development • Make constant change an expected part of the culture • Tell everyone as much as possible about everything as often as possible • Make liberal use of financial incentives and recognition • Work within the company culture, not around it

IMPLEMENTING BUSINESS CHANGE WITH IT:

There are various strategies through which IT helps in implementing business change. Some can be seen by the following diagrams:

Strategy

Improving Business Process

IT Role

Use IT to reduce costs of doing business

Outcome

Enhance Efficiency

Strategy IT Role

Outcome

Raise Barriers to Entry Increase amount of investment or complexity of IT needed to compete

Increase Market Share

Promote Business Innovation

Use IT to create new products or services

Locking in Customers and Suppliers •Use IT to improve quality •Use IT to link business to customers and suppliers

Create New Business Opportunities

Maintain Valuable Customers and Relationships

Build a Strategic IT Platform

Build a Strategic Information Base

Leverage investment in IS resources from operational uses to strategic uses

Create New Business Opportunities

Use IT to provide information to support firm’s competitive strategy

Enhance Organizational Collaboration

TOOLS AND TECHNIQUES OF IT FOR IMPLEMENTING BUSINESS CHANGE Business Process Reengineering: One of the most important competitive strategies today is business process reengineering (BPR) most often simply called reengineering. Reengineering is more than automating business processes to make modest improvements in the efficiency of business operations. Reengineering is a fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in cost, quality, speed, and service. BPR combines a strategy of promoting business innovation with a strategy of making major improvements to business processes so that a company can become a much stronger and more successful competitor in the marketplace. However, while many companies have reported impressive gains, many others have failed to achieve the major improvements they sought through reengineering projects.

Business Quality Improvement: Business quality improvement is a less dramatic approach to enhancing business success. One important strategic thrust in this area is called Total Quality Management (TQM). TQM emphasizes quality improvement that focuses on the customer requirements and expectations of products and services. This may involve many features and attributes, such as performance, reliability, durability, responsiveness etc. TQM uses a variety of tools and methods to provide: • More appealing, less-variable quality of products or services • Quicker less-variable turnaround from design to production and distribution • Greater flexibility in adjusting to customer buying habits and preferences • Lower costs through rework reductions, and non-value-adding waste elimination.

Business Business Quality Quality Improvement Improvement

Definition Definition Target Target Potential Potential Payback Payback Risk Risk What What Changes? Changes? Primary Primary Enablers Enablers

Business Business Reengineering Reengineering

Incrementally Incrementally Improving Improving Existing Existing Processes Processes

Radically Radically Redesigning Redesigning Business Business Systems Systems

Any Any Process Process

Strategic Strategic Business Business Processes Processes

10%-50% 10%-50% Improvements Improvements

10-Fold 10-Fold Improvements Improvements

Low Low

High High

Same Same Jobs Jobs -- More More Efficient Efficient Big Big Job Job Cuts; Cuts; New New Jobs; Jobs; Major Major Job Job Redesign Redesign IT IT and and Work Work Simplification Simplification

IT IT and and Organizational Organizational Redesign Redesign

Telecommunications Networks: Most popular telecommunications networks are WAN, LAN, MAN, VPN and Internet. Telecommunications networks are greatly used by businesses due to their following strategic capabilities: Overcome Overcome Geographic Geographic Barriers: Barriers: Capture Capture information information about about business transactions from remote locations. business transactions from remote locations. Overcome Overcome Time Time Barriers: Barriers: Provide Provide information information to to remote remote locations locations immediately immediately after after it it is is requested. requested. Overcome Overcome Cost Cost Barriers: Barriers: Reduce Reduce the the cost cost of of more more traditional traditional means of communications. means of communications. Overcome Overcome Structural Structural Barriers: Barriers: Support Support linkages linkages for for competitive competitive advantage. advantage.

Information Systems: An Information System is an organized combination of people, hardware, software, communications networks, and data resources that collects, transforms, and disseminates information in an organization. Key concepts of the text include: Information Technology (IT). The dynamic interaction of computer-based information systems with telecommunications forms the backbone of IT. End User Perspective. An end user is anyone who uses an information system or the information it produces. As a perspective on management information systems, the end user focuses designers, developers, and all information systems personnel on how the system does and should function in use. Information systems are powerful tools -- and all the more powerful when made to fit the needs of those who use them everyday. This involves adapting the system to the user, not the other way around. An Enterprise Perspective. Information technology can provide the information a business needs for efficient operations. It can even be the foundation of a company's competitive advantage. But to function properly, an information system must be developed in support of the strategic objectives, business operations, and management needs of the enterprise.

Control Control of of System System Performance Performance

Input Inputof of Data Data Resources Resources

Processing Processing Data Data

Storage Storage of of Data DataResources Resources

Output Outputof of Information Information Products Products