Management of Information Technology and Its Impact on Organizational Goals - Term Paper Example

 “Management of Information Technology and Its Impact on Organizational Goals” Introduction A strategic information management most probably supports or eases a particular business strategy or several facet of it. To a certain extent, an information system might be strategic since one can see a decision support system being used as a strategic tool or product and as numerous well known strategic information systems also would be classified as transaction processing systems. “Strategic information management represents a move away from conventional business thinking and practice”. http://www.paconsulting.com/insights/managing_for_shareholder_value/services/entry_msv_04_strategic_information_management.htm The majority scholars might concur that we are by now well on our way through the conversion from an industrial economy to an information economy. The junction of computing, telecommunications, and software is not simply enabling new forms of competition and organization to develop, but the digital junction of various states of information data, text, voice, graphics, audio, and video is as well spawning new business opportunities and new customs of communicating. Simply the most reclusive Audited could argue that business and economic motion today is untouched by information technology. Certainly, it is just probable to assert that every business is an information business. Managers constantly spent much of their time on information processing, generally defined, according to Mintzberg ( 1983) now often do so interceded by technology in the figure of executive information systems, groupware, video-conferencing, and the like. Organizations have been seen in the past as types of information processing (Galbraith, 1973) and now have gathered technocratic descriptors like 'networked', 'knowledge based', and 'virtual' as telecommunications in particular have been deployed to synchronize remote workers or share information transversely enterprises (Wendy Currie, Bob Galliers, 1999). Business processes gradually more are information-systems dependent and are being 're-engineered' ( Davenport and Short, 1990; Hammer, 1990), partly by asking, what can IT permit us to do which was not probable before in terms of time compression, co-ordination, integration, mechanization, and communication? And entrepreneurs are getting to the information and information service sectors as their probable grounds for profit-making. According to Earl (1996) this new strain might be called 'info-preneurs'. (Wendy Currie, Bob Galliers, 1999) Main Body Information management can yield strategic gains and signifying where opportunities can be found. Classically they offer frameworks for investigation. Kantrow argued this in a relatively crusading abstract way in eighties and it was slanted by the early eighties articles on IT and competitive advantage (Porter and Millar, 1985). There is modest consideration to technology in the conventional business strategy literature and in the MIS or information management field, the last fifteen years or so have seen substantial significance in strategy, mainly information systems strategy formulation. This is not astonishing. The IT function has to wrestle with far from insignificant troubles in putting up information systems strategic plans. Unavailability or poor comprehensibility of business plans and strategies, low responsiveness of IT potentials, rapid business and environmental change, weak management contribution, and a excess of execution problems are amongst the problems identified by McFarlan ( 1981), Galliers ( 1991), Earl ( 1993)--and others (Wendy Currie, Bob Galliers, 1999). The greater part of this research and the on the ground hard work of practitioners can be seen as apprehensions with the configuration problem. The business question being chased is what information systems and IT reserves are obligatory to sustain the business strategy. Perhaps over ninety per cent of organizational activity in IT strategy-making has paying attention on this question (Wendy Currie, Bob Galliers, 1999). A succeeding, corresponding question that seems to get only occasional or sometimes inadvertent attention is the opportunity problem. This is apprehensive with what opportunities for doing business in a diverse way are opened by IT (Wiseman, 1988; Ives and Learmonth, 1984). Based on field research, approved a more processual viewpoint (Lockett 1996; Ives and Vitale, 1996) frequently drawing on, or paralleling studies on improvement. Perhaps several of the business re-engineering literature has given to this domain; for instance Hammer and Champy ( 1993) talk of the require for 'inductive thinking' or the capability first to make out a significant solution and then to ask for the tribulations it that an IT application might solve (Wendy Currie, Bob Galliers, 1999). As most of the business is an information business, perhaps it is obstructive to consider of a business strategy and an IT strategy. Perhaps they should be one: an integrated information business strategy. Here business strategy becomes a statement of intent about the future, much as advanced by Hamel and Prahalad ( 1994) and Hamel ( 1996). More than this, however, the business threats and prospects posed by IT and information resources more extensively are addressed and worked out in the strategy-making process. So the future becomes a defined vision of the information age. There are three potential mechanism of strategic information management. It can be supportive to identify and codify arranged business trends concerning markets, products, competitors, directive, and the like not merely to link any future picture with today and the past, however also to convey almost always a wisdom of change, for few firms are having static environments. The perceptible aim is, however, to recognize and agree any significant force for change which is apparent to persist for several years and/or become more significant. The similar significant motive is because few executives have conviction in the analysis of, or plans for, the future which is not stranded in the present. The subsequent component of analysis is classifying and support mega trends to borrow Naisbitt (1990) term into the prospect. This, certainly, forces the firm to recognize its strategic perspective. Basically by technological we mean not just IT; for pharmaceutical companies it evidently includes biotechnology; for numerous manufacturing companies, material sciences. Forecasting of information technology is third component. For information business strategy-making this is a sine qua non (Wendy Currie, Bob Galliers, 1999). The aim is to distinguish both get through technologies and killer applications. The longer the time framework under analysis, there is an exasperating contradiction. Several technological possibilities will have turn out to be commonplace, several will have been rejected or overhauled, and several will not have been recognized at all. The early history of IT forecasting was not promising; pundits leaned to get both the directions and the timing wrong. In the closer time horizons, though, some cogent practices are probable. A pilot survey of UK firms ( Earl, 1993) found that primary research and development outperformed secondary or explicit learning. For instance study tours of labs and state of the art adopters, technology development plan with vendors, and technology pilots were rated more effective than scanning literature, attending exhibitions and conferences, and volunteering Beta test sites. Additionally since an infiltrate technology or killer application is somewhat firm or industry specific, managements might have to see a new or promising technology, try it, and learn pertaining to it for them (Wendy Currie, Bob Galliers, 1999). The production of the analysis phase is a decided set of trends which together could either (a) intimidate the future of the business or (b) offer an avenue to investigate for generating new value in the future or contending in a different way. What is outstanding concerning analyses which emerge to have assisted firms paint a future to spend in is that they are combinatorial; there is somewhat concerning the future political, economic, or social area which while combined with a technology tendency suggests an information future that should be addressed. An instance is a pharmaceutical company's recognition of diverse forms of tele-medicine proffering ways of extenuating the effects of, or bypassing, escalating regulatory restraints and also reaching an ageing population. Staff planners can do much of the preliminary trend analysis and as well codify the ultimate outputs. Though senior general and line executives should debate and agree the tendency and momentous combinations so as to add relevance and attain buy-in. If prime IT forecasting is done, it is vital that business executives take part; again to convey significance but as well to prompt learning and cultivate keenness. Strategic information managements offers framework that is said to be actually helpful if used properly. Three classes of framework are proposed: awareness, opportunity, and positioning, each having its own purpose, character, and use (Wendy Currie, Bob Galliers, 1999). Awareness Frameworks What these frameworks seem preeminent to attain is executive approval and considerate of the strategic prospective and collision of IT. Awareness frameworks are more theoretical and pedagogic than dictatorial and helpful. Tremendously practical in the workshop or classroom, they insinuation at strategic potential of IT, might begin to paint a vision for particular executives, firms, or industries, and assist reorient thinking and restrict the scope. In brief, their primary use turns out to be edifying. Three subclasses of awareness frameworks might be recognized: 1. Refocusing frameworks which assist transform mind-sets, 2. Impact models which imply the level of strategic change that might be possible, and 3. Scoping models which designate what might be the general strategic scope of IT for a business or sector (Michael Earl, 1988). Their strategic opportunities are like numerous of the frameworks, a validation of recent clever uses of IT. It is less satisfactory as a searching framework for a firm because it is not specific enough by application or technology or analytical enough in terms of business strategy or management process. However it could be used to place existing IT initiatives in the firm to derive a general picture of progress. A comprehensive instance of an impact model is the involvement of Parsons (1983). It is based on an acknowledgment and investigation of the competitive environment and strategies of business and centers on the probable opportunities of firms to use IT for strategic advantage. Parson's model reminds us that IT can be significant at the industry, firm or strategy levels. Table1.1. Strategic Impact of IT (after Parsons) Level of impact Effect of IT Industry level Changes fundamental nature of the Industry Firm level Influences competitive forces facing the firm Strategy level Supports the generic strategy of the firm At the industry level, Parsons reveals that IT can influence the nature of an industry's products and services, the industry's markets, and/or the industry's economics of production. For instance, electronic publishing, computer graphics, and communications have considerably exaggerated the product life-cycle and allocation possibilities in bringing out. The power of both the technology and the information of IT have been established radically in the newspaper sectors of both the USA and the UK. At the firm level, Parsons illustrates Porter's five competitive forces model of competitive strategy. The key significance of Parsons is that IT can be used either to bound or improve the influence of rivals, competitors, suppliers, new contestants, or new products in the firm's wider competitive ground. Parsons as well scrounges from Porter in his strategy level impact analysis. Here he is apprehensive with the positioning that thriving firms assume relative to industry structure and competitive forces. Parsons argues that IT can sustain each of the potential generic strategies that Porter suggests are presented to firms (Porter M. E. 1980). These are: 1. Generally cost leadership quest of lowest cost production on an industry-wide basis 2. Differentiation that differentiating a product or service on an industry wide origin 3. Focus meditation on a particular market or product function. Noticeably numerous technologies can be practical to cost reduction, for instance surrogating robotics for labor, motivating down inventory costs through stock control systems, or automating effort-intensive or incompetent manufacturing with CAD/CAM or process control. A packaging company required to become the lowest cost producer in Europe. Comparatively late in improvement of information systems it had the prospect to plainly line up investment in IT with its lowest cost strategy. Inventory control systems to lessen working capital costs, instrumentation and process controllers to check and lessen inefficiencies, cost control intelligence to aim variances, optimization models to develop throughput, and an automatic warehouse to lessen stockholding costs were the major foci for investment. Differentiation is apprehensive with forming individuality in the eyes of the customers. This might be accomplished through product features, consumer service, added value services, technological complexity, brand image, elasticity, quality, or customization. Equally information content and technological modernism can be subjugated to develop the product or its allocation; online ordering, computerized quotation systems, or expert system recommendation is illustration. Focus strategies frequently merge low cost and demarcation, aiming a particular niche. The grounds vary, but technology can be employed to attain special niches, information systems can be developed to be better informed concerning them, and permutations of IT support of low cost and demarcation strategies can be practical when focus becomes needed in very competitive markets. An secretarial firm which has recognized high-value niche markets for consultant advisory services, builds databases on clients, practices, leads, and specialist knowledge all as a basis from which they can generate an image of being the inimitable player in that niche. Parson's brunt framework therefore turns into a tool of persuasion. It argues that IT really does have strategic persuasion. It can be customized to a particular industry or rigid to investigate current trends of potential prospective, but at a prelude stage of analysis. It can as well be used, mainly at his strategic level; to test if modern IS investments in a firm are sustaining its generic strategy. Fundamentally, however, the potency of Parsons's framework is instructive to argue through whether IT is strategic. Porter and Millar (1985) offered a useful instances concerning efficiency of strategic information management. It is not constantly easy to see how information can be developed and subjugated for competitive advantage. Information processing notions can be indistinct and we still lean to see business and industries as providers of products and sporadically services, where information is a tangential concern. Porter and Millar's information strength takes the information aspect to industry analysis with functional examples, and can be used as a prelude assessor of generally potential for utilizing IT for strategic advantage in a particular sector. For whilst a general leaning in the strategic significance of IT is apparent, at the industry level the course and rapidity of change diverge. The oil industry has high information doling out in its production as well as distribution, but modest information contented in its product. The cement industry is fundamentally a physical, process industry fabricating bunt, industrial product and IT improbable to have any thespian collision on it. Thus we see numerous exemplars of strategic information systems in the economics sector, the oil and petrochemical industries determined for competitive advantage and formulating small but not key gains, and one UK cement company lately running down much of its ability. Though, as the competence of IT increases and the cost diminished, we can imagine industries to move towards ever privileged information satisfied in both procedure and product. Thus awareness frameworks lean to have high academic value in heaving the vision of executives, and IT professionals, for tactical use of information technologies. They show generally what are the potential afforded by IT but they are usually too high level and too evocative to guide users to precise opportunities for strategic information systems. That is the reason of opportunity frameworks. Opportunity Frameworks These frameworks are intended plainly to be investigative tools which lead to firm specific strategic advantage prospects and elucidate business strategies so as to reveal options for using IT deliberately. They are added instrumental and practical than awareness frameworks, although do have an instructive role too. Certainly numerous of the judgments made are derived from using these opportunity frameworks in workshops throughout management education programmes. Theoretically, however, opportunity frameworks help the progression of analytical discovery of ideas for strategic information systems prospects to be examined further by feasibility studies. Three subclasses might be identified: 1. Systems analysis frameworks that provide analytical techniques to pertain across a business. 2. Applications search tools that explore the distinctiveness of specific application areas for good fit with the potentials of IT in general or of explicit technologies. 3. Business strategy frameworks that assess the business strategy framework and imply where IT has a payoff (Michael Earl, 1988). Positioning Frameworks Positioning frameworks are preeminently seen as tools to assist executives appraise the strategic importance, the fussy character, and the innate situation of IT for their business. The aspiration is improve executives' considerate of how the information systems function and IT must be managed in their particular organization. Positioning frameworks consequently are anxious with assessing, increasing, and improving IT capabilities in explicit organizations. They are not very helpful in probing for opportunities for strategic information systems although they can make several contributions in heaving awareness of the strategic significance of IT for a firm. They therefore have value in both education and practice. Three subclasses of positioning frameworks make are identified: 1. Scaling frameworks which assist indicate the scale of significance of IT to a business and the scale of the management challenges involved. 2. Spatial frameworks which assist designate the character of IT applications and IT management in diverse businesses or sectors. 3. Temporal frameworks which facilitate assess the evolutionary position of an organization in using and managing IT (Michael Earl, 1988). Conclusion Thus, Strategic Information Management academics note that the hastily lessening size and price of minicomputers and personal computers really prolonged the economic uses of computers as well as the number of computer users. This permitted office computerization, personal efficiency software, and end-user computing to appear as significant application areas. What were initially separate personal computers began to be linked in local area networks and linked by gateways to wide-area networks (WANS). Organizations lined their in-house transaction processing systems as well as databases to those of their organizational customers and suppliers. These strategic information systems turns into sources of competitive advantage, and the IS function finally received its place in the commercial boardroom. Yet traditional product leaning businesses exposed the value of their information resources; information become ever more seen as a product that could be sold or leveraged in commercial dealings. The insinuations for the structure and style of organizations as a consequence of professional information management are multitude. Certainly, an effective way to distinguish an organization is as an information network associated through its information processes. At the level of the firm, it is well recognized that organizational changes can be eased by the expansion of management information systems. Organizations can be compressed; power drawn towards the centre or dispersed towards the side-line, individuals can be given the prospect to search for information pertinent to their decision-making needs. Certainly, in numerous industries these days, the professional claim of IT is a viable necessity as well as offering a strategic opportunity. If Strategic Information Management is professed as being fundamentally about the relevance of IT to organizational processes, then the research, writing, and teaching will be concerning IT hardware and software, system analysis as well as design methodologies, and data management systems. Decision-makers' information desires can be determined. They can be treated as a requisite output. Cultural features will be 'outside' the system in focus. On the other hand, if Strategic Information Management is perceived as meeting the information needs of individuals, ventures, and states, then the research, writing, and teaching has to be regarding objectives, strategy formulation, decision-making, and the procedures of control and liability. IT becomes the way to the end, not the end in itself. The cultural perspective becomes a crucial concern. Those with such a cultural orientation will see that decision makers in diverse cultural contexts think and act in a different way and, consequently, require access to diverse information. Both perspectives are completely justifiable. Each is needed. But they are basically diverse in their range, focus, and contented. Of course, information technology desires to be dealt professionally. The level of IT investment in numerous organizations is now massive. Although in managing information, information technology is rarely the issue that establishes overall success. For numerous years information technology has been far ahead of the capability of top management to value the strategic opportunities as well as threats of that technology and of operational management to distinguish the organizational implications. Information is a critical reserve for individual, enterprise, and state. Data, even information, might be culture free but comprehension is ethnically determined. And at the end I must say it is knowledge that determines the ultimate effectiveness and accomplishment of individuals, of enterprises, and of nation-states. References Mintzberg H. (1983), Structure in Fives: Designing Effective Organizations (Englewood Cliffs, NJ: Prentice-Hall). Galbraith J. ( 1973), Designing Complex Organisations (Reading, Mass.: AddisonWesley). http://www.paconsulting.com/insights/managing_for_shareholder_value/services/entry_msv_04_strategic_information_management.htm Davenport T. H., and Short J. E. 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( 1994), "'Competing for the Future'", Harvard Business Review, 72, 4, July-Aug.: 122-8 Naisbitt J. ( 1990), Megatrends ( London: Sidgwick & Jackson) Parsons G. L. ( 1983), "'Information Technology: A New Competitive Weapon'", Sloan Management 25, 1, pp. 3-14. Porter M. E. ( 1980), Competitive Strategy ( New York: Free Press) Porter M. E. and Millar M. E. ( 1985), "'How Information Gives you Competitive Advantage'", Harvard Business Review, July-Aug.: 149-60 Wendy Currie, Bob Galliers; Rethinking Management Information Systems: An Interdisciplinary Perspective, Oxford University Press, 1999 Read More