designing and managing the information-based organization

Designing and Managing the Information-based Organization

NewBusinessEnvironmentOpen, competitive,dynamic, global marketplace

Open, user-centered network computing

NewEnterpriseNetworked, information- based organization

New IT Paradigm

Designing and Managing the Information-based Organization

NewBusinessEnvironmentOpen, competitive,dynamic, global marketplace

Productivity of Knowledge Workers

Quality

Responsiveness

Globalization

Outsourcing & Partnering

Social and Environmental Responsibility

Strategy Frameworks

• Miles & Snow’s Business Strategies

• Porter’s Generic Strategies

• Competitive Force Model

Business Strategies - Miles and Snow

• Defenders

• Prospectors

• Analyzers

Generic Strategies - Porter

• Low Cost Provider

• Differentiation

• Focus

Competitive Force Model

The Business

Power, vigor and competence of existing competitors(Intra-industry rivalry)

Power, vigor and competence ofcomplementors

Power, vigor andcompetence ofcustomers(Customers)

Power, vigor and competence of suppliers(Suppliers)

Possibility that what your business is doing can be done in a different way(Substitute Products & Services)

Power, vigor and competence of potentialcompetitors(Barriers to Entry)

New Enterprise

Structure Hierarchical Networked

State Static, stable Dynamic, changing

Personnel Managers Professionals

Key Drivers Reward & CommitmentPunishment

Basis of Action Control Empowerment

Learning Specific skills Achieve team goals

Compensation Position in Accomplishmenthierarchy Competence Level

PAST FUTURE

Competing in the Global Marketplace:The New Enterprise

HighPerformance Teams

ExtendedEnterprise

Enabling Technology The Promise The Change

HighPerformance Teams

EffectiveIndividual

IntegratedEnterprise

ExtendedEnterprise

InternetworkedBusiness“The Net”

InterenterpriseComputing

EnterpriseInfostructure

WorkgroupComputing

PersonalMultimedia

Wealth Creation,Social Development

Recasting ExternalRelationships

OrganizationalTransformation

Business Processand Job Redesign

Task, Learning,Efficience

Basic Organizational Forms

• Owner-Managed

• Functional, vertically integrated– Machine bureaucracy– Professional bureaucracy

• Diversified, divisionalized

• Matrix

• Network

• Virtual

Basic Elements of Structure

• Complexity– Horizontal– Vertical– Spatial

• Formalization

• Centralization

Strategy

Technology

Environment

Size

Organization Structure

Structural Contingency Theory

Organizing Framework

Miles and Snow’s Business StrategiesPorter’s Generic StrategiesPorter’s Competitive Force Model

EnvironmentStrategy Mgt Philosophy,

Values, Beliefs

Information Technology

Organization•Structure•Processes•Systems (Planning, Control)

The New IT Paradigm

Mainframe Era to Distributed Era:

Management and Technology

IT Management Environments

Era Administrative Target Justification

Framework

Mainframe(1950s - 1970s)

RegulatedMonopoly

Automateexisting processes

Efficiency(ROI)

Microcomputer(1970s to 1980s)

Free Market Effectiveness

Distributed(late 1980s topresent)

RegulatedFree Market

Outsourcing

Industry/Organizationaltransformation

Competitive Position

Increaseindividual/groupeffectiveness

The Old Vertical Computer Industry - Circa 1980

sales anddistribution

applicationsoftware

operatingsystem

computer

chips

IBM DEC Sperry Wang Univac

The New Horizontal Computer Industry - Circa 1995

sales anddistribution

applicationsoftware

operatingsystem

computer

chips

Retail Stores Superstores Dealers Mail Order

Word Word Perfect Etc.

DOS and Windows OS/2 Mac UNIX

Compaq Dell Packard Bell H-P IBM Etc.

Intel Architecture Motorola RISCs

The New IT Paradigm

Microprocessor Technology

Communication

Technologies

Number of Transistors on a Chip

2

1975 1980 1985 1990 1995 2000 2005

100

10

1

0.1

0.01

0.001

1

34

5

6

7Processor1 80862 802863 803864 804865 Pentium6 i6867 i786

Processor1 80862 802863 803864 804865 Pentium6 i6867 i786

Millions of Transistors per Chip

Source: Based on data provided by the Intel Corporation.

MIPS Forecast

1975 1980 1985 1990 1995 2000 2005

1

10

100

1000

MIPS

i786

i686

Pentium

80486

80386

80286

8086

Source: Based on data provided by the Intel Corporation.

Price/Performance Trends

$70,000

$40,000

$20,000

$7,000$300$50

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

Mainframe Mini PC

Cost per MIPS

1992

1995

Communication Technologies

2400 bps

9600 bps 14.4 Kbps

28.8 Kbps

ISDN - 128Kbps

ATM - 15Mbps up to 1.2 Gbps

Key Players in the U.S. Information Superhighway

• Telecommunications Companies (e.g. AT&T, MCI, Sprint)

• Cable TV

• Information Providers (e.g. AOL, Prodigy)

• Internet Providers

Expansion of the Internet:Global Penetration - The Americas

Adapted from Time Magazine, Spring 1995

High

CanadaIcelandUnited States

ArgentinaChileCosta Rica

Low BrazilColombiaEcuadorMexicoNicaraguaPanamaPeruPuerto RicoVenezuela

Medium

Rating based on a ratio of people to direct Internet connections, from High (200 people or less to each connection) to Low (5,000 or more people to each connection).

Expansion of the Internet:Number of Users (in millions)

0

20

40

60

80

100

120

1969 1982 1993 1998

Number of People with access to the Internet

Adapted from Internet Business Advantage, 1995

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

1991 1992 1993 1994* 1995**

Number of businesses registered on the Internet

Adapted from Internet Letter, Vol. 2, No. 5, Feb. 1, 1995*Through August 1994**Through March 1995

Expansion of the Internet:Growth of Commercial Use

The New IT Paradigm

Past Future

Network Computing

System Host-based Client-server

Data Management

Applications

Presentation

Display Only

Data Management

Data Management

Data Management

Applications Applications

Presentation Presentation

Presentation

Applications Applications

Data Management

Host-Based Processing Client/Server Cooperative Processing

DistributedPresentation

DistributedApplications

DistributedDatabases

Server Computer

Mainframe

Terminal

Client Computer

Host vs. Client-Server ProcessingHost vs. Client-Server Processing

The New IT Paradigm

Past Future

Open Systems

Standards + Rules Limited Single,(Architecture) Vendor- Proprietary Vendor-Proprietary

or Neutral

Information forms Separate data, textMultimedia

voice, image

Vendor-customerRelationships Account ControlMulti/Vendor

Partnerships

The New IT Paradigm

Past Future

Revolution in Software

Software Development CraftEngineeredUser Interface Text Graphical

Applications Stand-alone;Integrated

Stovepipe

IT & the Pursuit of Value Disciplines

InformationTechnology

BusinessValue

Supports NewOrganizationalParadigm

Strategy Organization

Enablesthe Pursuit of Strategy

IT & the Pursuit of Value Disciplines

Operational Excellence

Customer Intimacy

ProductLeadership

LogisticsProcesses

IT and Operational Excellence:Using Integrated Information for

Increased Visibility

Logistics

ServiceMarketing& Sales

OutboundProductionInbound

Physical Value Chain

Integrated Information Foundation

IT and Operational Excellence: Emergence of New Business Models

Traditional Cut-Flower Industry Chain

Calyx’s & Corolla’s New Cut-Flower Industry Chain

Calyx & Corolla

Participant

Grower Jobber Wholesaler Florist

Markup 50% 100% 150%

Price charged $8.00 $12.00 $24.00 $60.00

Price charged $54.00

Participant

Marketplace

Marketspace

IT & Value Disciplines:Operational Excellence

Focus

• Minimize cost • Maximize efficiency across the physical value chain• Doing business in a different way

Measurement

• Precision • Quality• Speed• Cost

ComputingEmphasis

•Core operating processes•Building an integrated information infrastructure•Management processes•Coordination processes•Implementing new business model

IT & the Pursuit of Value Disciplines

ProductLeadership

ServiceMarketing& Sales

OutboundLogistics

ProductionPrcesses

IT and Product Leadership:Exploiting the Virtual Value Chain Through Mirroring

InboundLogistics

Physical Value Chain

Virtual Value Chain

Design

ServiceMarketing& Sales

OutboundProductionInbound

ServiceMarketing& Sales

OutboundLogistics

ProductionProcesses

IT and Product Leadership:Creating New Information-based Products

InboundLogistics

Physical Value Chain

New Products New Products New Products New Products

IT & Value Disciplines:Product Leadership

Focus

Create and rapidlyintroduce newproducts andservices

Ethic

• Creativity• Risk

ComputingEmphasis

• Market and product intelligence• Design and engineering tools• IT-based products and services

IT & the Pursuit of Value Disciplines

Customer Intimacy

LogisticsProduction

IT and Customer Intimacy:Creating New Customer Relationships in the Virtual Value Chain

ServiceMarketing& Sales

OutboundLogistics

ProductionProcesses

InboundLogistics

Logistics Physical Value Chain

Virtual Value Chain

IT & Value Disciplines:Customer Intimacy

Focus

• Tailor products and services for customers• Make it easy for your customers to do business with you

Ethic

• Relationships• Empowerment• Knowledge• Customization

ComputingEmphasis

• Customer information and analysis• Creation of information by-products• Product configuration systems• Direct communication with customers

Organizing Framework

Miles and Snow’s Business StrategiesPorter’s Generic StrategiesPorter’s Competitive Force Model

EnvironmentStrategy Mgt Philosophy,

Values, Beliefs

ITOrganization•Structure•Processes•Systems (Planning, Control)

•IT Architecture•IT Development & Implementation•IT Organization

Designing and Managing the Information-Based Organization

• Teaching by the Case Method• Preparation, Presence, Participation, Prompt

• Class Discussion

• Course Materials

• Weekly Assignments - Case Discussion

• Individual Assignment - Case Analysis

• Group Project