Information System of an Organization - Essay Example

?Information Systems I. Organizational Flexibility: Organizational Flexibility also known as Organizational Ambidexterity (Birkinshaw & Gibson, 2004,Bryson, Boal, & Rainey, 2008) can be better achieved by taking advantage of the power of the internet to optimize productivity and efficiency. By ensuring that the tools used by employees are available in the internet which can be accessed by them anywhere there is connectivity or service, an organization’s operation can also be transportable and flexible. Secure Internet based application is considered the best way of achieving organizational and operational ambidexterity. By making the organization operate out of the internet, the need for a physical office is almost rendered obsolete and would be more for the compliance of a formal governmental requirement than an operational necessity. To illustrate: Company “A” is in engaged in buying and selling cars, traditionally a used car business would entail a large ground where the cars will be vetted and an office address where customers who are buying or selling can transact. However, this set-up is self-limiting for the business owners since all the transactions will be limited to customers who can be generated by the local community or the adjoining community. The traditional processes for Company A would be buying cars that would entail the following tasks, car check-up to determine its actual value and then assigning the right value for the car that would include a modest profit. Sale can be made only if a customer would visit the showroom, choose a car, inspect it at the lot and then make an offer or bid if the car meets the customer’s criteria. To reach a wider market base that would include not only the surrounding community, the owners of Company A at times conduct a road show where all cars under the dealership will be transported to other cities for display or exhibition. However road-shows are expensive to set-up and normally the amount of revenue generated is not commensurate to the cost of the entire road-show. The looming saturation point of the community where Company A is located was exacerbated by the emergence of other used car company within the same general location. Intending to look for good location for a road-show in another city, the owner went online following several weeks of zero sales. Piqued by the presence of advertisement in every corner of the PC screen, the owner tried to advertise one of the cars in a website frequented by bargain hunters. In a few minutes after posting the pictures and details about the car, the owner was contacted by an interested buyer looking for cars to be demolished in a movie, three communities away. The sale was consummated and the owner of company A was able to sell the worst looking car in the lot at a higher price which was never even contemplated for the car. Inspired by the first success in internet commerce, the owners of company A decided to go online and consequently changed their business strategy. The company decided to advertise the content of its car lot in the internet by mainly advertising in several popular sites that are most frequented by its age demographics. Not only did the interest in used car peaked, the number of customers interested in several of their cars were outbidding themselves. In their first week of operation in the internet, all of their cars in the lot were sold and paid for and are just awaiting pick-up or transport to their new owners. The owners of Company A hungry for new inventory advertised their demand for more cars to sell. The response and acceptance of the new advertisement is similar to the initial sale through the internet, offers were overflowing at prices considerably lower even though in good running condition and only slightly used. Due to the robust sales, the owners of Company A discovered a new dilemma as they are now lacking the manpower to check and valuate the cars. The owners of Company A were compelled to personally transact with the car owners to check the condition and assess its value themselves. Deluged with requests the owners of Company A were forced to issue an “as is where is” for cars that have yet to be appraised. The owner of Company A only put a little profit margin from what the original owners are initially asking for the used car. However, even then customers still try to out bid each other for cars even if there is an “as is where is” which ultimately raised the profits for Company A owing to the price war between buyers trying to outbid the other. Assessing the cost, the owners of Company A found it more cost effective and profitable to issue an “as is where is” on cars, instead of the owners or some of its people going directly to the owners who wants to sell their car. From thence, the cars stay at the original owner’s place until it is picked up and delivered to the new owner. Company B on the other hand is a large telecommunication company that provide telecommunication services to a large geographical segment in the European continent. Its customer service has been proven to be efficient and flexible. The primary reason for this is the presence of their customer service software in the internet. Whenever a call from a subscriber is placed, the software immediately routes the call to an available customer service. The customer service representatives’ location is not an issue since the power of the internet can route a call through a mobile telephone and the customer service representative can call the records of the subscriber through a phone or laptop equipped with a broadband system. While it is logical to state that ambidexterity in an organization are almost always driven or supported by information technology. The stages in attaining organizational flexibility includes process re-engineering, wherein all the processes of the company are re-engineered and all tasks that have vestige of being tied down to a specific location are either eliminated or mitigated. The second stage in attaining organizational flexibility includes re-tooling. The third stage of is re-training for the new tool and the last is change management. These steps are essential in ensuring that the flexibility not only address the opportunity but also ensure that the current operation is not hampered or sacrificed by the desire for flexibility. II. Barriers to flexibility Barriers to flexibility include the difficulty of organization to accept change that would include: challenges in acculturation (Castro, 2003); technological comfortability; difficulty in changing entrentched processes; the cost of change;compatibility of the tools with the old legacy and integration challengs. Despite the clear benefits to the company and to its employees barriers still exist that prevents the seed of flexibility to take root. At times, even the top management of the company finds it hard to start with the process themselves. However it should be noted that any change to be successful must be initiated from the top and absrobed by the last sinues at the bottom. The process is normally daunting but the benefits far outweigh the expenditures provided that the right cost benefit analysis was conducted. a. Challenges in acculturation: A company like any unit of society is a group of people that interact with each other. The dynamics of the people within this unit of society that defines their common belief, tolerance and acceptability is the developed culture. The developed culture we have to be reminded was borne out of people from different background to support and tolerate each other towards a common goal. Another stimulus like changes in processes, tools and process flow may result to the re-emergence of stresses amongst the players that could make acculturation difficult. One possible solution to this problem though is to let the organization go through a series of team building session to familiarize themselves with each other once more. b. Technological Comfort ability: The level of comfort an employee has developed for the tools used by them for the longest time. Comfort level with computer oriented tools is normally the result of years of training and familiarity of the tools. The fear of going through the same process of re-orientation with a new set of software sometimes is the cause of aggravation amongst the senior level of the organization. Nonetheless, a good training session covering the functional module that the employee would be using is a good way of breaking the ice. Understanding the process and how it relates to an employee’s function would be the best way to re-orientate the employee to the new tool. c. Entrenched Processes: In the same manner that computer based tools develop familiarity with the employees, the process that is supported by those tools suffers the same fate. Processes are not set and cast in stone and most of the time, these processes evolve as the familiarity or confidence of the employee grows of what needs to be done. The intimacy level of the employee with the process that has evolved creates a natural barrier with the employee which must be dispelled to make way for the new processes to work. d. Cost of Change: Change for the sake of change will be counter-productive in the long run. Change should be planned and the process to integrate and immerse the change in any organization should be methodical and systematic. Change should start with the definition of reason and objective of the change. Then the process by which it will be adopted should tailor-fit the organization’s requirements to ensure that strains and opposing views are not only stifled but also addressed by the steering committee. e. Compatibility of old and new system: Change in an organization is most of the time hampered or stifled by compatibility issues between the legacy system, the new system and even the mediation system tasked to bridge the gaps between the old and new system. Poor planning and ineffectual project management are often results of these kinds of problems. One recommended solution to this problem is the employment of a project management team which specializes in change management. III. Human Capital Management System To prevent organizations from imploding, large companies make use of a Human Capital Management System to manage its work force effectively. To manage the employee payroll and flexible spending accounts the Human Capital Management System normally include the Compensation and Benefits module to keep track of each employee’s records. To manage the requirement of the organization vis-a-vis the availability of employees a Work-Force Management module is also normally included in the Human Capital Management System. The Work-Force Management module will manage the time and attendance, scheduling, absence and leave of employees. The Talent Management module will manage the skills accumulation, training, performance and competency of the employees. From the time the employee is recruited, trained and evaluated his progress will be tracked. Depending on the level of succession and escalation requirement needed by the company, these too are managed by an integrated Human Capital Management System. The advantages of using a Talent Management module of the Human Capital Management System in a large organization are the focus given to each of the human resource in the organization (Ingham, 2007). For the employees within an organization, the system will be able to monitor the progress and level of skills and knowledge an employee has. This will enable to company to plan and plot its manpower requirement and deployment to address specific problems or operational requirements (Becker, 1964). As for employee improvements base on specific threshold, the Human Resource Department would be able to determine not only the rate of completion of a specific resource of the training required for the current position but shall include the next level position as well. The Talent Management module can similarly perform training needs analysis base on the current data it has and plan out its training schedule accordingly. The Human Capital Management System would be able to provide instant data on the suitability of a candidate for a position or provide a list of the best candidate who can be considered for a position. The disadvantages however, lie on the fact that cold data do not necessarily reflect the actual situation. To illustrate: The rating system for performance evaluation will always have a spot of subjectivity in the way it is done. This subjectivity will be reflected in the way employees are perceived in the Talent Management Module. Another disadvantage that is not reflected in the system is the amount of effort given by the employee to complete a task. The level of enthusiasm cannot be objectively measured without a reliable scale. These are important aspects of management since the level or amount of motivation normally play an important role in adverse operating situation. To illustrate: a highly motivated individual will give his all in completing a task at the shortest possible time and provide an extra mile of effort to ensure that an activity is done well. However, motivation is not measured in specific terms in any Talent Management Module. IV. Critical Assessment of the IT systems and software highlighted during the courses in their impact in running a large organization. Considering the resources of large organizations, they have at their disposal several IT based solutions including organizational solution that will help their top management to effectively and efficiently manage their organization. However, there is no perfect solution some solutions need to be tailor fitted to the organization to ensure their success. Case in point is organizational ambidexterity or organizational flexibility. Organizational Flexibility – Is applied by a large global company to meet market and business demands. However, ideally it should only be limited to some processes or departments. This is to ensure organizational cohesion to ensure focus on the core competency of the company. Spinning off for the sake of spinning off, or being organizationally ambidextrous for the sake of being ambidextrous will not make a company more profitable. Focus should be given to the operational imperatives of the company to meet their traditional products while being sensitive and receptive to opportunities. IT solutions would enable organization to do both. To some extent some companies spin-off some of their operational departments to attain flexibility in their operation while maintaining their core competency. To illustrate; some company outsource their customer service or other back office operation to other countries or companies to ensure that the main line of business is preserved in one singular company created for the purpose. However, organizational flexibility also has its drawbacks too. This normally happens when one or more of the spun-off companies prove to be more profitable than the original company. It should be noted however that in creating flexibility in an organization a symbiotic relationship exist between the main competency and the adopted competency. Focus on the peripheral, and the main body will disappear and eventually the peripheral will also disappear since its existence is dependent on the existence of the main competency. One of the more popular IT based solutions is the Business Process Management Systems that would include Enterprise Resource Plan, Human Capital Management and Supply Chain Management systems. The complete set of suite are normally installed or used by large organizations to ensure that all its transaction are monitored and recorded while its workers are well managed. One limiting factor that needs to be considered in the implementation of Business Process Management Systems is the cost. A total cost benefit analysis should be conducted to ensure that the Management Systems will be cost effective. Not only are the cost of implementation expensive even the maintenance cost of these systems are a budget item on their own. Outsourcing – Is a strategy normally employed to lower the cost of having the process maintained within the company. The drawback of outsourcing is the maintenance and monitoring of quality of the output of the outsourcing provider. To illustrate: Back-office operation such as customer care and handling are normally outsourced to ensure that the core competency of the company is preserved. A farm’s main business is the packaging and delivery of farm products, to save on the cost of having to construct its own customer care and handling, the Farm simply outsourced the order handling to a contact center. This strategy saved the Farm from investing on an IT infrastructure, hiring additional personnel and other tangibles. Business Intelligence and Knowledge Management (Liebowitz, 2006) – The amount of data collected over the years is a resource that should be maintained and capitalized on by any company. Through the use of data mining and data warehousing system these data or information should be converted into knowledge for the whole company and its employees. To illustrate: The market trends in the consumer product industry can be used to schedule manufacturing of specific products to prevent extra cost in warehousing. By timing the manufacturing processes and ensuring that the products are on the shelf by the time the demand for it is starting to pick up, the need to warehouse the product is eliminated. One drawback of Business Intelligence and Knowledge Management is the determination of which data is useful and where implementation is most effective. Nonetheless, large companies use Business Intelligence and Knowledge Management to gain strategic advantage over their competitors through market analysis and extensive research. IT Governance and Security (Financial Reporting Council, 2010) – Is a set of controls and operational policies implemented to maintain the confidentiality, integrity and availability of information contained in an IT infrastructure. IT governance is measured in terms of its service level performance that is based on a service level agreement. IT Governance as part and parcel of corporate governance in general is put in place to ensure that the stakeholder’s interests are protected. There is a number of other IT based solution in the market that can be used by large organization. But the basic tenet in choosing the right solution is the cost effectiveness of these solutions. A complete feasibility study should be conducted to ensure that the solution is the right solution to solve the organization’s problems. Bibliography Becker, G. S. (1964). Human Capital: A Theoretical and Emperical Analysis, with Special Reference to Education. Chicago: University of Chicago Press. Birkinshaw, J., & Gibson, C. (2004). Building Ambidexterity in an Organization. Boston: MIT Sloan Management Review. Bryson, J., Boal, K., & Rainey, H. (2008). Strategic Orientation and Ambidextrous Public Organizations. Wales: Cardiff University and the Economic and Social Research Council. Castro, V. S. (2003). Acculturation and Psychological Adaptation. UE: Greenwood Press. Chorafas, D. N. (2001). Integrating ERP, CRM, Supply Chain Management, Smart Materials. London: CRC - Taylor and Francis. Financial Reporting Council. (2010). The UK Corporate Governance Code. London: Financial Reporting Council. Ingham, J. (2007). Strategic Human Capital Management: Creating Value through people. Oxford: Butterworth-Henemann. Liebowitz, J. (2006). Strategic Intelligence: Business Intelligence, Competitive Intelligence and Knowledge Management. London: Auerback Publication - CRC press Taylor and Francis. Read More