Organizational
Environment
Lecture 3


Today’s Topics
The Organizational Environment
n Goals of new work Environment
n Technology Environment
n Simple Model Vs Better Model
n Framework of IS Management
n Case Study
n


The Organizational Environment
n

The way IT is used depends on the
environment surrounding the organization
that uses it

n

Simultaneously, technological advances
affect the way IT is used

1-3


The Organizational Environment cont.

n

The External Organizational Environment
¨ IT allows information to move faster, thus increasing
the speed at which events take place and the pace
at which individuals and organizations respond to
events.
¨ The Internet Economy
n B2C, B2B etc.
n IT is a major underpinning of the way the ‘old’ and
‘new’ worlds interface
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The Organizational Environment cont.
n

The External Organizational Environment cont.
¨ Global

Marketplace

The entire world has become the marketplace
n The Internet allows companies to work globally
n Globalization is a ‘two way street’
n Internet allows small firms to have a global reach
n Business environment is now global, but local tastes
still matter
n


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The Organizational Environment cont.
n

The External Organizational Environment cont.
¨ Business

Ecosystems

¨ Decapitalization

Tangible items, such as capital, equipment and
buildings were the tenets of power in the industrial
age
n Today = power of ‘intangibles’ such as ideas and
knowledge
n

¨

Managing talent = as important as e.g. managing finance
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The Organizational Environment cont.
n

The External Organizational Environment cont.

¨ Faster
n

Business Cycles

Rely on IT

¨ Accountability
n

Rise and fall of dot-coms probably should have been expected
¨

n

and Transparency

Many business plans could not make $$$

Debacle in Telco and business shenanigans have shaken
investor confidence
¨

¨

Call for greater transparency of corporate operations and greater
accountability of corporate officers
IT will play a significant role in implementing the ensuing
regulations and fostering transparency
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The Organizational Environment cont.
n

The External Organizational Environment cont.
n Rising

Societal Risks of IT

¨ IT

has negatively affected millions of people
§
Network shutdowns
§
Computer viruses
§
Identity theft
§
Email scams
§
Movement of white collar jobs offshore

¨ Led

to increasing calls for Government regulation
and for vendors and corporations to take action
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The Organizational Environment cont.
The Internal Organizational Environment
The work environment is also changing, and the art of
managing people is undergoing significant shifts
n

¨ From
n

‘Old’
¨
¨

n

Supply-Push to Demand-Pull
Companies did their best to figure out what customers wanted
Organized to build a supply of products or services and then
‘push’ them out to end customers on stores shelves, in catalogs
etc.

‘New’ (Internet)
¨

¨

Allows much closer and ‘one-to-one’ contact between customer
and seller
Offer customers the components of a product/service then the

customer creates their own version by ‘pulling’ what they want
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The Organizational Environment cont.
n

The Internal Organizational Environment cont.
¨ Self- Service
n

ATMs = early example

n

1990s saw an increase in systems that let
consumers access corporate computer systems to:
Learn about products
¨ Purchase products
¨ Inquire about orders
¨ Communicate and ‘do business’ with the firm
¨

n

Now = heaps e.g. FedEx parcel tracking
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The Organizational Environment cont.

n

The Internal Organizational Environment cont.
¨ Real-Time

Working

Sales people have up-to-the-minute information
about customers
n Knowing e.g. inventory and cash levels as they are
NOW – not as they were a week or a month ago
n Being able to reach someone when you need them
n

¨

Instant messaging?

¨ Team-Based
n

Working

Working together on projects

¨ Anytime, Anyplace

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Information Work



The Organizational Environment cont.
n

The Internal Organizational Environment cont.
¨ Outsourcing

and Strategic Alliances

To become more competitive, organizations are
examining types of work that should be done
internally or externally by others
n Ranges from a simple contract for services to a
long-term strategic alliance
n The thinking is: We should focus on what we do best
and outsource the other functions to people who
specialize in them
n

¨ Note

= not ‘new’ (especially in non-IT)
¨ Also = some ‘backlash’

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The Organizational Environment cont.
n


The Internal Organizational Environment cont.
¨ The

Demise of Hierarchy
n Traditional hierarchical structure groups, several
people performing the same type of work, overseen
by a supervisor
¨

n

No longer the most appropriate in factories or offices

Hierarchical structures cannot cope with rapid
change
¨

Communications up and down the chain of command
takes too much time for today’s environment

n

IT enables team-based organizational structures by
facilitating rapid and far-flung communication

n

Note: = some of the time. Still has its place
1-13 in many
organizations



Goals of the New Work Environment
n

Leverage Knowledge Globally
¨ Tap

tacit knowledge by fostering sharing and
supporting sharing through technology
¨ Note: driving force is culture!
§

n

Happens through organizational pull (people
needing help) rather than organizational push
which overloads people with information

Organize for Complexity
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Goals of the New Work Environment cont.
n

Work Electronically
¨ Taking

advantage of the Internet and networks in general

= 3rd major goal of enterprises today
n

n

Requires different organizing principles, management tenets,
compensation schemes, structure etc.
Changes how organizations interact with others including
customers

¨ The

microchip moved power within companies.
Bandwidth moves power all the way to consumers
¨ Will increase exponentially as bandwidth capability
increases and costs decrease
n

Handle Continuous and Discontinuous Change
¨ Fits

and starts

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The Technology Environment
IT enables advances in organizational performance.
n


Hardware Trends
¨ ’50s – ’60s + - Batch processing predominant; on-line systems
emerged later
¨ Mid ’70s processing power began to move out of the central site
(at the insistence of users!)
¨ 1980s: Advent of personal computers
¨ Client-Server computing: “Client” machine user interfaces with
“Server” on the network holding the data and applications
¨ Major current development = hand-held devices, wireless etc.
¨ Further distribution beyond organizational boundaries to
suppliers, customers etc.
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The Technology Environment cont.
• Software Trends
1.

In 1960s = Improve the productivity of in-house programmers who
created transaction processing systems
–

2.
•.
•.

‘Problem’ = memory $

Later, programming issues:
First = Modular and structured programming techniques

Then = Life cycle development methodologies and software
engineering
–

Goal = Introduction of rigorous project management techniques

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The Technology Environment cont.
• Software Trends cont.
3.Prototyping: quick development of a mock-up
4.Purchasing software became viable
alternative to in-house development
5.Paying attention to applications other than
transaction processing
•
Decision support systems (DSS), report
generation, database inquiry
6.End users develop their own systems
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The Technology Environment cont.
• Software Trends cont.
7.

Push for ‘open systems’
•


8.

Purchasers were tired of being “locked in” to proprietary
software (or hardware)

1990s – trend towards Enterprise Resource Planning (ERP) e.g. SAP,
PeopleSoft
•
•

•

DANGER : BEWARE
Expensive and troublesome, especially for companies
wanting to modify the ERP software to fit their ‘unique’
processes
A fundamental organizational change!

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The Technology Environment cont.
• Software Trends cont.
9.

Like hardware, software is migrating to be network centric.
•

•


Web front ends to empower employees rather than
replacing legacy systems
Looming change = move to Web Services – packages of
code that each perform a specific function and have a URL
-

•

e.g FedEx parcel tracking, MacAfee's’ virus updates

The significance of Web Services is that it moves software
and programming to being truly network centric – the
network becomes the heart of the system, linking all Web
Services

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The Technology Environment cont.
•

Data Trends
–

At first = File management
•

Organizational techniques for files that served individual
applications


–

Then = Corporate databases
•
•

Serving several applications
Led to concept of establishing a data administration function

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The Technology Environment cont.
•

Data Trends cont.
–

’70s = focus on Technical solutions
•
•
•
•

–

Database management systems
Dictionary/directory
Specification and format
Now = Data definitions: information about relationships among

systems, sources and uses of data, and time cycle
requirements

First 20 years: techniques to manage data
in a centralized environment

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The Technology Environment cont.
•

•

Data Trends cont.
Late ’70s / early ’80s = 4th generation languages
and PCs:
–
–

•

Employees directly access corporate data
Users “demanded it”!

Also = Distributing data from data resources to
information resources
–
–


Data management organizes internal facts into data record format
Information management focuses on concepts
•

Contains a much richer universe of digitized media including
voice, graphics, animation and photographs (digitized media)

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The Technology Environment cont.
•
•

Data Trends cont.
Managing this expanded array of information resources requires new
technologies
–

Data warehousing
•

–

Data mining
•

•

Uses advanced statistical techniques to explore data

warehouses looking for previously unknown relationships in
data e.g which customers are the most profitable

Knowledge management (intellectual capital)
–

•

Stores huge amounts of historical (not ‘live’) data from systems
such as retailers Point-Of-Sale systems

‘New’ – The ‘Holy Grail’?

Web has broadened ‘data’ to mean ‘content’
–

Text, graphics, animation, maps, photos, video etc.
•
Now ‘tightly’ controlled Vs. early proliferation
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The Technology Environment cont.
•

Data Trends cont.

•

Two major data issues are now facing CIOs:

1.
2.

•

Security – protecting data from those who should not see it
Privacy – safeguarding the personal data of employees,
customers etc.

Regulations such as Sarbanes-Oxley in the U.S. now require
company officers to verify their financial data
-.

The processes that handle financial data are automated =
need to document and ensure the accuracy of these
processes

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