Interorganizational Systems - Essay Example

Running Head: INTERORGANIZATIONAL SYSTEMS Topic:  Interorganizational Systems Lecturer: Presentation: Introduction Collaboration is the practice whereby organizations work together to accomplish common objectives. Under such circumstances, each organization benefits from the relationship while on the other hand contributing its unique capabilities for the success of the association. Apart from commitment and strong leadership in among the collaborating organizations, it is important to ensure that there is effective communication between the organizations. Moreover, the organizations also need to communicate effectively with their clients regarding their collaboration. There needs to be clear processes of setting up goals for the benefit of the partners. The inter-organizational systems need to be effective to facilitate the flow of information between the collaborating organizations. This essay is a critique of the enabling telecommunication and distributed connectivity technologies utilized by Microsoft and SAP in their collaboration. SAP is one of the principle providers of software for businesses, which are significant for improving the capacity of the business to be innovative for better service delivery to clients. It is the unending quest for better services that has made SAP to grow to the current status. The organization has been capable of establishing clients in more than 100 countries, which is an indicator of the success that the company has accomplished in less than 20 years. SMEs as well as organizations in the international market are major clients of SAP. On the other hand, Microsoft is a major computer software company that is distinguished globally for its significant software solutions. The paper describes the inter-organizational systems as well as a description of the organizations’ inter-organizational systems. It also highlights how these systems are used to define and support the partnership, ranging from management considerations to specific telecommunication and networking architectures used to support the collaboration. Collaboration between Microsoft and SAP Microsoft and SAP are two global companies have been successful in establishing a strong collaboration whereby each partner benefits from the association. The most significant collaboration between the two organizations is through Mendocino, which is a project whereby each organization contributes towards transformation of the manner in which clients are served by the employees involved in handling information. The project empowers the personnel involved in information handling in SAP to become more accurate and efficient. Microsoft designed the project with the aim of helping companies to save unnecessary expenditures, time and also improve the conformity of processes to the desired standards. Moreover, the project also improves the decision making processes of SAP as well as a reduction of errors in data entry. The two companies support the project and they also participate in its sale to other companies that need business solutions, which confirms the assertion by Hopper (1990) regarding the role of partners in a successful collaboration whereby the objectives of the partnership need to be owned by each member organization. The partnership between the two organizations involves Microsoft providing assistance with desktop needs while SAP helps companies with entrepreneurship solutions. The inter-organizational systems have been significant for the success of the partnership. They have been using SAP R/3 while Microsoft windows have been used for running enterprise programs. They have enhanced interoperability by continuously upgrading the inter-organizational systems with new developments leading to the use of .NET, and more improvements are emerging with the inception of the new project. Duet is software that is used in the inter-organizational systems that have benefited the collaborating companies as well as their clients. Gallivan & Depledge (2003) observe that customer satisfaction is accomplished when organizations in a partnership are able to use a common system that each of them understands. In case of changes or improvements, each organization needs to be informed and also participate in the planning process. Effective communication therefore is an important tool for the success of the collaboration. The information systems used by the organizations have raised their competitive advantage. Instead of competing, each tends to contribute its capabilities for the accomplishment of inter-organizational goals. The companies have networked their information systems whereby they go beyond the organizational boundaries. In other words, they have increased their overall competitive advantage through the IOS. The company structures have been changed, thereby leading to a shift in the manner in which the organizations compete. They have acquired a combined capacity of coping with the competition in the market due to the fact that competitors are locked out since they can not easily replicate the information systems used in the partnership. The competitive strategies are accomplished through procurement taking place between the organizations, meaning that the products are specifically developed to fit the inter-organizational processes. For this reason, the products are not compatible with the competitors’ operations hence they may lack interest to imitate. Hopper (1990) observes that competitiveness in business is accomplished through maintaining barriers to entry for other businesses. The collaboration between SAP and Microsoft is powerful and the inter-organizational systems assist in accomplishing specialized organizational requirements. SAP personnel concerned with IT are facilitated to make use of the Microsoft tools that they are well versed with to accomplish their tasks in data management. The applications are useful to SAP since the output of employees is increased and therefore the organizational efficiency and productivity is maintained. The collaboration is also economically viable for the companies due to the fact that it does not necessitate extra training costs so long as there is an integrated connection between the organizational processes and the sources of information, which are significant in the maintenance of competitiveness. With the necessary information, it is unlikely for errors to occur and therefore organizations can not operate at a loss. SAP’s products have increasingly been adopted by many businesses who find them user friendly due to Microsoft applications. On the other hand, Microsoft benefits from the application of its software by the clients who request for the services of SAP. In regard to partnerships, Gallivan & Depledge (2003) observe that the organizations involved have to benefit in one or more ways for the partnership to be meaningful. In essence, businesses need not engage in partnerships that may not have the potential to improve their performance. Moreover, without effective communication, there might emerge issues of uncertainty among partners and they may not achieve the common goal behind collaboration. The inter-organizational systems are significant for the management of the partnership. The have played a major role in maintaining the relationship between the managers of the two organizations as well as with their customers. Clients are able to communicate effectively with the management, which is significant in determining the level of satisfaction among them, and their preferences. In other words, as Johnston (2001) observes, the communication systems for partnering organizations need to take the consumers of the products in to consideration so that they can have a way of communicating with the management, which on the other hand needs such information to determine the failures that might have occurred in the product development process. The partner who might have caused the dissatisfaction makes the necessary amendments to ensure that the whole partnership does not fail to accomplish the overall goal. On the other hand, without proper systems to support clear cut communication between the customers and the two partners, it is difficult to understand the cause of the problem, thereby making it difficult to make improvements. The inter-organizational systems are an important aspect of organizations that can be useful in ensuring that resources are utilized effectively (Allen, 2007). There is usually a tendency for organizations to fail in partnership as a result of the incapacity to control their resources due to lack of the necessary tools for budgeting. Failure in budgeting leads to misappropriation of resources and the eventual breakdown of partnerships. In other words, the inter-organizational systems have been significant in helping the companies to allocate resources effectively. The management can easily access the appropriate information and the data regarding the usage of common resources, which gives them an opportunity to learn how effective both partners are in maintaining the strength of the partnership. With such information, they are able to make the right decisions and react to externalities with the desired swiftness. The automatic updates and the connectivity applied in the partnership is significant in the enhancement of ERP in SAP (Nolan, 1995). In regard to employee management, the inter-organizational systems are significant in the maintenance of a strong workforce. The managers can easily access information regarding the organizational human resources. They easily communicate and also put forward their application for particular matters such as leave through the Microsoft outlook. As Driskell et al. (2003) observes, connectivity is important to ensure that every person understands what is expected of him/her, and the program of activities can be shared, which makes the system complete. The organizations apply Customer Relationship Management (CRM) to maintain satisfaction among customers. CRM in partnership is one of the significant tools for ensuring that the management is accessible to the clients and that the organization keeps in touch with them for the purpose of improving its services. In other words, it is an important strategy that organizations use to centralize the management of consumers, which means that any improvement at the top applies to all clients rather than improving service delivery in parts leading to poor customer service (Lee et al. 2003). When communicating with the clients, the inter-organizational systems in the collaboration allow the management to communicate with many clients at the same time through the CRM, for example through the use of e-mail messages, which is significant in strengthening their confidence. On the other hand, CRM helps in accomplishing the up-selling strategies whereby the consumers are convinced that the products are of the best quality even though the prices are high, making them want to purchase them as well as the cross-selling strategies that help the organizations to sell their products to targeted clients. They maintain a strong relationship with consumers, which is significant for the competitiveness of the partners. Nolan, (1995) argues that when an organization is able to establish a strong relationship with a particular group of consumers, the chances of success are high because competitors may not be in a position to target the same consumers. CRM in the collaboration also helps the organizations to make effective follow-ups on the clients, thereby maintaining sustainable sales that are vital to the success of the organizations. On the other hand, the personnel required to manage the sales are reduced and in so doing the organizations reduce the overheads. Since the management can access the database from anywhere by logging in to the customers’ records, the connectivity through CRM allows the desired flexibility to the partners. For organizations to advance there is need for them to engage flexible systems that allow adjustments to be made. In other words, rigidity leads to conservativeness and positive changes may not be accomplished in the partnership. There might never be chances for expansion of the market share with such rigidity. Moreover, the management can also access information regarding the success of the sales team from anyplace and hence there is a chance to correct mistakes before they develop in to huge losses (Noveck, 2000). Conclusion Microsoft and SAP are among the multinational organizations that have been successful in the application of inter-organizational systems to maintain a strong collaboration in which each partner benefits. They are useful in the decision making processes as well as the maintenance of efficiency. The interoperability has been enhanced by the strong partnership thereby improving the organizations’ competitiveness. It allows the organizations to meet specialized requirements, making it difficult for competitors to imitate the inter-organizational systems. The performance of employees has been enhanced especially through the enhanced communication. The budgets are controlled through the organizations’ systems. CRM helps in maintaining a strong relationship between the organizations and the clients. References Allen, T. (2007). Architecture and communication among product development engineers. California Management Review, Vol. 49(2), pp 23-41.  Driskell, J., Radtke, P., & Salas, E. (2003). “Virtual teams: Effects of technological mediation on team performance”. Group Dynamics: Theory, Research, and Practice, Vol. 7(4), pp 297 323.  Gallivan, M., and G. Depledge. (2003). “Trust, Control and the Role of Interorganizational Systems in Electronic Partnerships,” Information Systems Journal, Vol. 13(2), pp. 159-190. Hopper, M. D. (1990). “Rattling SABRE - New Ways to Compete on Information”, Harvard Business Review, Vol. 6(5), pp. 118-125. Johnston, K. (2001). Why e-business must evolve beyond market orientation: Applying human interaction models to computer-mediated corporate communications. Internet Research, Vol. 11(3), p 213.  Lee, J., Siau, K. & Hong, S. (2003) “Enterprise Integration with ERP and EAI,” Communications of the ACM, Vol. 46(2), pp 54-60. Nolan, R.L. (1995). “Reengineering: Competitive Advantage and Strategic Jeopardy,” Harvard Business School, Vol. 9(2), pp 196-109 Noveck, B. (2000). “Paradoxical partners: Electronic communication and Electronic democracy”. Democratization, Vol. 7(1), p 18.  Read More