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Organizations & Systems Sept. 12, 2005 Outline • • • • What is an Organization? Interaction of IT with the Organization Network Effects & Economics Classifying Business Organization Units & Information Systems What is an Organization? • Technical Definition: "A stable, formal, social structure that takes resources from the environment and proceses them to produce outputs." (Laudon & Laudon) • Information Technology is introduced into this structure to make the production of outputs more efficient. What is an Organization? Structural, Behavioural and Other: • Hierarchy of authority • Impersonality • Written rules of conduct (operating procedures) • Promotion based on achievement (technical qualifications for positions; meritocracy) • Specialized division of labor • Efficiency (maximal organizational efficiency) IT innovations can create conflicts between these. A Pre-IT Insurance Claims Office (c 1965) Giuliani, V. E. “The Mechanization Of Office Work.” in Forester, T., ed. The Information Technology Revolution. MIT Press; 1985. A Post-IT Insurance Claims Office (c 1985) Giuliani, V. E. “The Mechanization Of Office Work.” in Forester, T., ed. The Information Technology Revolution. MIT Press; 1985. A Post-IT Insurance Claims Office (c 2004) • the computers may be in head office, or they may be operated by a service company • the call centre is somewhere (and everywhere) • the adjusters/claims agents may work out of their homes, as contract employees Head Office Data Centre Customers The Network Call Centre Agents Bank IT & THE ORGANIZATION: BEFORE & AFTER IP Pre-IT IP Post-IT Information Needs • structured flows • limited access • structured storage • broad access Skill Levels • relatively low • relatively high Responsiveness • relatively slow • relatively fast IT & THE ORGANIZATION: BEFORE & AFTER IP Pre-IT IP Post-IT Tasks • specialized • compartmentalized • repetitive • generalized • interconnected • varied/novel Work Flow • batch oriented • event-driven Standard of Performance • follow the rules • understand the process IT & THE ORGANIZATION: BEFORE & AFTER IP Pre-IT IP Post-IT Workforce • relatively larger • relatively smaller Organizational Structure • strongly hierarchical • weakly networked • strongly networked • weakly hierarchical 3 Economic effects of IT on the Organization 1.Information technology costs generally fall, labour costs generally rise. IT can be substituted for labour, and result in fewer middle managers and clerical workers. 2.Information technology lowers transaction costs. Firms should therefore become smaller, and have more external transactions (e.g. through outsourcing). 3.Information technology lowers internal management (supervision and coordination) costs. Firms can therefore become larger. (?) Org. Units & IT Systems Function Sales & Marketing Manufacturing & Production Finance & Accounting Human Resources "Epistemological Level" Facilitie s location Profit Planning Labor force needs Strategy Org. level Strategic (Executive Support System) Sales trend forecasting Management (Decision Support System; Management Inf ormation Systems) Pricing analysis Production Planning Budgeting Range & Distribution of w ages, benef its Know ledge (Know ledge Work Systems; Office Systems) Market analysis Compu ter Aided Design Investment Portfolio Analysis Design Knowledge and possible career Information paths Operations (Transaction Processing Systems) Enter, Machine control process, track Accounts Receivable Track employee training, skills & evaluations "Wisdom?" Knowledge Data Examples: Webtrends • See: learningspaces.org/1311 Enterprise Systems & the Org “old” integration of ITs Enterprise Systems & the Org “new” integration of ITs The Major Eras Of The Computer Age 1964-1980 The System Centric Era 1964: introduction of the IBM 360 1981-1993 The PC Centric Era 1981: introduction of the IBM PC 1994-2005 The Network Centric Era 2006-2015 The Content Centric Era? FEATURE SYSTEMS CENTRIC Audience Corporate Technology Transistor Principle Grosch’s Law Offerings Proprietary Systems Network Focus Data Center User Focus Efficiency Supplier Structure Vertical Integration Supplier Leadership US systems # Users at end 10 million Market Size $20 billion FEATURE SYSTEMS CENTRIC PC CENTRIC Audience Corporate Professional Technology Transistor Microprocessor Principle Grosch’s Law Moore’s Law Offerings Proprietary Systems Standard Products Network Focus Data Center LAN/WAN User Focus Efficiency Productivity Supplier Structure Vertical Integration Horizontal ‘value chain’ Supplier Leadership US systems US Components # Users at end 10 million 100 million Market Size $20 billion $460 billion FEATURE SYSTEMS CENTRIC PC CENTRIC Audience Corporate Professional Technology Transistor Microprocessor Principle Grosch’s Law Moore’s Law Offerings Proprietary Systems Standard Products Network Focus Data Center LAN/WAN User Focus Efficiency Productivity Supplier Structure Vertical Integration Horizontal ‘value chain’ Supplier Leadership US systems US Components # Users at end 10 million 100 million Market Size $20 billion $460 billion FEATURE PC CENTRIC NETWORK CENTRIC Audience Professional Consumer Technology Microprocessor Bandwidth Principle Moore’s Law Metcalfe’s Law Offerings Standard Products Value Added Services Network Focus LAN/WAN Public Network User Focus Productivity Customer Service Supplier Structure Horizontal ‘value chain’ Supplier Leadership US Components Unified Computer & Communications Chain National Carriers # Users at end 100 million 1 Billion Market Size $460 billion $3 trillion FEATURE PC CENTRIC NETWORK CENTRIC Audience Professional Consumer Technology Microprocessor Bandwidth Principle Moore’s Law Metcalfe’s Law Offerings Standard Products Value Added Services Network Focus LAN/WAN Public Network User Focus Productivity Customer Service Supplier Structure Horizontal ‘value chain’ Supplier Leadership US Components Unified Computer & Communications Chain National Carriers # Users at end 100 million 1 Billion Market Size $460 billion $3 trillion FEATURE NETWORK CENTRIC CONTENT CENTRIC Audience Consumer Individual Technology Bandwidth Software Principle Metcalfe’s Law ‘Transformation’ Law Offerings Value Added Services Custom Services Network Focus Public Network Transparent User Focus Customer Service Virtualization Supplier Structure Supplier Leadership Unified Computer & Embedded Communications Chain National Carriers Content Providers # Users at end 1 Billion Universal Market Size $3 trillion Too embedded to measure FEATURE NETWORK CENTRIC CONTENT CENTRIC Audience Consumer Individual Technology Bandwidth Software Principle Metcalfe’s Law ‘Transformation’ Law Offerings Value Added Services Custom Services Network Focus Public Network Transparent User Focus Customer Service Virtualization Supplier Structure Supplier Leadership Unified Computer & Embedded Communications Chain National Carriers Content Providers # Users at end 1 Billion Universal Market Size $3 trillion Too embedded to measure