1. INFORMATION TECHNOLOGY FOR ORGANIZATIONAL TRANSFORMATION
The Information Technology Piece
Dr. Nor Zairah Ab.Rahim

2. The dimensions of the IT piece
First is IT strategy and how an organization
develops it.
Second dimension explores how IT is
used within an organization to transform it.
Third, is IT used as a competitive weapon in the
market place.
Fourth, dimensions applies to IT internal structure, namely how IT organizes itself to execute its own activities within the enterprise.

3. IT strategy development
As a support to business strategy
Interactive with business strategy
Vectors of virtuality
IT as a competitive weapon
Creating virtual value
Leveraging customer relationships
Customization of products and services
Creating new organizational roles and market structures
Leveraging intellectual assets
IT as a transformational tool
Process redesign
Improved coordination
Improved collaboration
Improved information use
Improved research and learning
The IS organization
Strategy execution
IS skills
IS processes
IT architecture
IS flexibility

4. IT strategy development
Today, IT not only supports the structure and functions of an organization, it has also a critical component of business strategy.
As IT has the potential to change how firms compete, it can completely change how markets and industries function. Eg: banking industry.
They dealt with their clients face to face Through the intermediary of paper , bonds, coupons ,certificates , checks , and so on.
Now banks are managing information, Their doucuments are virtual, deal with their clients and other banks electronically

5. IT as a support to business strategy
There are two ways of viewing IT strategy development:
IT as a support to business strategy
IT as a critical driver of business transformation.

6. IT as a support to business strategy
The traditional view of IT is as a support to the organization which can help make a firm’s performance faster, cheaper, and more accurate.
IT strategy is about selecting the best technology to effect business strategy.
Example: implement a track and trace system to optimize your routing and delivery times in a courier company ,you may reduce your costs and increase the quality of your service. This may improve your strategic positioning.

7. IT as a critical driver of business strategy
A newer way to view IT strategy, therefore, is to see it as a critical driver of business transformation, this perspective argues that IT strategy must be equal to or even sometimes become the driver of business strategy.
As an example: in the track-and-trace system
a strategic change could be induced by integrating the system with a wider range of applications, as many courier companies (such as Fedex and UPS) have already started doing. First, by making the system available to clients on the web, they can let the client enter the details of the delivery and print the bar code immediately(see
The clients are happy because this self-service enables them to get the service when and where they want.

8. Virtuality vectors affecting strategy
Today, the main thrust of a transforming IT strategy is to make an organization more “virtual.” This means using information and technology as substitutes for people, places, activities, and objects.
Example1:electronic retailers, such as amazon.com ,are already using IT to customize their offerings and advice to each customers.
Example 2: Agoda

9. Customer interaction
This vector of virtualness deals with company-to-customer interactions. IT enables customers to experience products and services differently than in the past.
customers to experience products and services remotely.

10. Business network
A second vector focuses on building a business network to support the organization, rather than having all functions performed within the enterprise.
IT is used for business-to-business transactions to enable a company to build a portfolio of relationships which can assemble and coordinate assets for delivering value to customers.

11. BUSINESS NETWORK
Michael Dell of Dell Computer calls this a “direct business model.” He explains that whereas in the past companies have had massive structures to produce everything that was needed for a product, this new method of asset configuration enables companies to focus on how to coordinate activities in ways which will create the most value for a customer.These networks are everywhere.
Airasia, provide seamless service to their customers, integrate facilities,and enable clients to deal with all the companies of the group as if they were dealing with only one company.

12. Knowledge leverage A third vector of virtualness focuses on opportunities for leveraging expertise within and outside of the organization. Managing information, knowledge, and intellectual assets effectively is a huge challenge for organizations these days. For example: at Dell computer information is used as a substitute for inventory to reduce the physical cost of shipping goods. It is also used to look at individual business units, geographic regions, and customer groups to enable the company to develop a deeper understanding of its customers and find ways to identify opportunities and economies unique to customer groups and to forecast demand.

13. IT as a transformational tool
It is widely accepted that IT plays an important role in organization change – that it can make business processes more efficient, work groups more effective, and enable more effective decisions
to be made.

14. Process redesign
IT can radically change business processes. Often called reengineering or business process redesign (BPR), IT is an essential element of this type of transformation because it permits removal of redundant steps.
As part of process redesign, IT makes information and knowledge more available to others in the organization and connects workers and information across organizational boundaries.
When workers have access to the same information as their boss ,there is much more scope in how and where decisions can be made.
Process redesign is likely to lead to changes in structure and
decision-making.

15. Improved coordination
IT can be used to support or enable coordination between autonomous business units or partners. This is especially important for global or multinational firms.
Technology is used as the “glue” to link organizational units in a logical fashion. In short, because it transcends geographical boundaries and can facilitate coordination in a virtual, rather than a hands-on fashion, IT can be used to develop a variety of innovative organizational designs, which would not have been possible without it.
Eg ERP & CRM

16. Improved collaboration
IT enables work and workers to be interconnected in a variety of ways, thus facilitating new ways of working together.
Software also enables people to work together in teams without being in the same location.
A key management skill is the ability to understand the strengths and weaknesses of each collaboration medium.

17. Improved information use
IT can give organizations a clearer understanding of their own business. It can provide them with a comprehensive picture of their organizational dynamics and help managers find a variety of ways to improve the operations of their business.
Eg KMS

18. There are four key ways in which IT can be used to do this:
Information access: IT can provide detailed information on every aspect of a business’ value chain. This information can be used to improve decision-making, predict demand more effectively, manage inventory more efficiently.
Information management: Information can be structured around the stable elements of a business
Communications management : IT can provide a corporate wide network accessible to all employees, thereby giving them access to the information they need, when and where they need it.
4. Presentations : Finally, tools and templates can be used to provide user-friendly and graphic representations of information, thus facilitating improved understanding of trends and providing key metrics needed to manage the business.

19. Improved research and learning
IT enables the diffusion of knowledge across a much wider area than in the past and ensures that it is transferred with higher accuracy, greater consistency and more performance reliability. In short, technology is becoming essential for organizational learning and innovation diffusion.
As a result, managing innovation and learning software has become much more important to organizations.
Managers must ensure that effective interfaces are in place so systems can work together and users can access data for their particular purposes.

20. IT as a competitive weapon
A third dimension of the IT piece is its use as a competitive weapon. Today, IT is a critical lever differentiating a business from its competitors.

21. Creating virtual value
Physical value chain
a virtual value chain collects raw information from each stage in the physical value chain and refines it into something that is valuable to a company in and of itself.
Companies must work in both two worlds

22. Leverage customer relationships
aim to grow the “mindshare” of their customers through personal communications and ongoing interactions with their customers. IT is integral to this strategy because relationship management involves learning about customers and customizing marketing.

23. Moon writes:
The key to any successful relationship-marketing program is information. The better information that a firm has about a particular customer, the more value that firm will potentially be able to provide that customer … this doesn’t necessarily mean “more” information, rather information that is accurate, timely, and relevant.

24. Continue
This information must be built up slowly over time and over multiple interactions. It enables a company to identify different customers’ needs and their value to the firm, thereby allowing the company to focus its efforts appropriately.
Ideally, a company should aim for “one-to-one” marketing, whereby customers constitute a market segment of one individual. This type of marketing involves three things: creating what customers want (customization); remembering what they want; and anticipating what they want.

25. Customization of products and services
Customization is now a clearly established business trend and is expected to be an important frontier of business competition over the next 5 years.
This will lead to the interactive development of products and services with customers in real time, and the birth of virtual customer communities.

26. Customization is based on three principles(Henderson and Venkatraman, 1993)
1. Reuse: by partitioning a product or service into independent components, it is possible to reuse them to construct customized products;
2. Intelligence: customization must be built on information about customers needs;
3. Organization: businesses must be designed to deliver products on a dynamic and adaptive basis.
these principles allow companies to achieve flexibility, responsiveness to changing needs, short product lifecycles, and short development cycles.

27. Companies can customize their goods and services in five different ways that involve IT in some way:
Customization of standard products and services
Creation of customizable products and services
Point of delivery customization
Quick response
Modularization

28. Creating new organizational roles and market structures
The new economics of transactions are leading to the breakdown (disaggregation) of traditional organizational forms into their component pieces and the recreation of firms (reaggregation) in ways, which will provide new value for customers.
This will ultimately lead to the creation of networks of companies linked by IT, which will parcel out the elements of value creation and delivery to an optimal set of partners.

29. Leveraging intellectual assets
Patenting new ideas for doing business online considerably broadens the concept of intellectual property rights and gives companies a significant competitive weapon. Not only can they prevent rivals from copying simple customer interfaces, they can also license these assets and hence gain a new source of revenue.
Use Porter 5 Forces to analyze the environment

30. IS organization
The fourth dimension of the IT piece is the one which most managers have traditionally associated with IT: the internal IS organization which actually delivers IT to the rest of the firm.
IS’ ability to deliver the strategies, systems, and technology to the enterprise is a key element of this piece.

31. The elements that the organization has to master follow
The technology
These elements include hardware, software, networks, the Internet, communication equipment, and services.
Hardware
Comprises all the physical equipments used to process and transmit information.
Architecture
At a very technical level, many configurations can be observed when using computers.
Stand-alone mode, share mode, client-server mode

32. Appliances
Bar code readers, Palm pilots, intelligent cellular phones, and other new “gadgets.
Software
Among the applications that are affecting the organizations the most, we can note the following:
ERP System
CRM System
E-Commerce system

33. Integration
IT component thinks about how it will be connected to the exterior world, whether through a high-speed network, telephone line, cell phone network, or any other means.
It is now increasingly difficult to establish the frontier between data networks, computer systems, or telephone networks. Convergence melts all these components into a larger, integrated system.

34. Strategy execution
As with business strategy, an effective IT strategy includes two important aspects: formulation and execution.
IT will only provide sustainable competitive advantage when the organization has the distinctive ability to use it. What counts is … the organization’s cleverness in working with IT.
Therefore, IT strategy must be developed in a way that is consistent with a firm’s ability to use it effectively.

35. To have a significant impact, IT strategy must be coupled with three organizational conditions, which are necessary to implement it effectively:
1. Top management orientation
2. Project selection criteria
3. Systems and structure
In short, IS organizations must ensure that business processes and structures and IS processes and structures work together for IT strategy to be effective.

36. IS skills
IS skills convert the “raw materials” of data, technology, business knowledge, and knowledge of how to apply IT, into new products and services, transformed business processes, enriched organizational intelligence, and flexible organization structures.

37. 10 IS management competencies which are relatively stable, regardless of technology and other environmental changes, and which represent the extent to which a company is positioned to mobilize its IT assets and investments:
Business deployment
External networking
Line technology leadership
Process adaptiveness
IT planning
IT infrastructure
Data center utility
Change management
Staff recruitment and retention
Resource brokering

38. IS processes not only transform business processes and strategies, they are also frequently in need of transformation themselves.
There are two “meta-processes” within IS which need to be thought through and designed carefully to ensure their optimal functioning in concert with organizational needs. They are: how the organization is supplied with IT services and operations; and how application requirements and opportunities are identified.

39. Four stages of transforming IS processes to make them more compatible with current business needs:
Question
Lever the existing organization
Envision
Sustain

42. IT architecture
In fact, an architecture for IT must reflect both the needs of business and the current potentialities of IT. Thus, there is a growing trend to reframe IT architecture into enterprise architecture to ensure that the joint influences of both business and technology are represented in it.

43. From a technical view, there are four further views of architecture which IS must consider, in order to generate desired business results.
Business view
Work view
Information view
Application view
Designing an IT architecture is therefore not a formula, but the development of a series of principles and strategies which provide the foundation for building the organization’s infrastructure and applications.

44. Flexibility
Flexibility is a watchword for many of today’s organizations and technology is a major way they seek to achieve it. While flexibility factors into almost every aspect of IT use in organizations.

45. IT organizations are building this flexibility in a number of ways:
First, they are aligning their strategy development processes more closely with the business’ strategic priorities, so they can become more sensitive to business needs.
Second, they are looking for ways to balance the centralized guidance of IT and the benefits of shared economies of scale with the “uninhibited and rapid use of IT” often desired by local business units.
Third, they are developing ways to balance IT investments in systems, which support the business as is and those which transform it to help the business grow and compete in new ways.
Fourth, a key element of flexibility is how IS manages its own resources.
Finally, IS organizations must look inward to their own processes to ensure that they are enabling optimal responsiveness and flexibility of IT services.

46. Conclusion
The changes taking place today in enterprise strategy, structure, and processes all require the enablement of technology.
Building a complete picture needs thorough understanding of IT and its potential, and the impact and influence to/from different dimensions.
As a result, IT will never again be an afterthought that is applied after the enterprise’s strategy is formed.
IT is now an integral piece of the management puzzle which business leaders ignore at their peril.