Chapter 3: IT Impact on Organizations Summarized from: Lynda Applegate, Robert D. Austin, and Deborah L. Soule, Corporate Information Strategy And Management: Text and Cases, McGraw Hill, 8th Edition, 2009. Unless otherwise specified. Last updated: September, 2016

Learning objectives Recognize that IT impacts the business model (through its effects on organizational capabilities組織能力) Learn how to analyze IT for its potential to enable new capabilities啟用新功能 e.g. facilitate促進new and improved organizational structures and processes

Organizational capabilities Direct quote from: http://www.businessdictionary.com/definition/organizational-capability.html “Ability and capacity of an organization expressed in terms of its (1) Human resources: their number, quality, skills, and experience, (2) Physical and material resources: machines, land, buildings, (3) Financial resources: money and credit, (4) Information resources: pool of knowledge, databases, and (5) Intellectual resources: copyrights版權, designs, patents專利, etc.” Back

What this chapter proposes? IT is an important enabler推動者for developing the best-in-class capabilities required for success

IS/IT capabilities Please refer to this website (http://140.138.148.209/im520/index.htm, under the “Lecture Slides -> Additional Slides”) to download the slides for this topic. Back

IT Capabilities transformation [IS resource]  [IS capability]  [Organizational capability] Include (CRM, SCM)  External relationship management capabilities  better customer/ supplier relationship capabilities, financial profitability/resources capabilities (CRM, ESS, BI)  Market responsiveness capabilities  information resources capabilities, financial (planning) capabilities (ERP)  Cost effective IS operations capabilities  information resources capabilities …. (Data analytics software)  processing of big data  information resources capabilities, intellectual resources capabilities (Social media sites)  networking and marketing  information resources (consumer needs prediction) capabilities, human resources (planning) capabilities Source: Celeste Ng, 2016

Supplementary information

Defining Big Data: The Big Data Institute (TBDI) Big Data Institute (TBDI; www.the-bigdatainstitute.com) Defines Big Data as vast datasets數據集that: Exhibit variety各種各樣; Include structured, unstructured, and semi-structured data; Are generated at high velocity with an uncertain pattern不確定模式; Do not fit neatly into traditional, structured, relational databases; and Can be captured, processed, transformed, and analyzed in a reasonable amount of time only by sophisticated information systems. Source: Rainer, Kelly, Prince, Brad and Watson, Hugh, Management Information Systems: Moving Business Forward, John Willey & Sons, Inc.: New Jersey, 3rd Edition, 2015  Next

Big Data (1) Source: http://www.nextgov.com/big-data/2014/08/infographic-big-data-where-does-it-come/92561/ Back

Big Data (2) Source: http://www.nextgov.com/big-data/2014/08/infographic-big-data-where-does-it-come/92561/ Back

Source: https://en.wikipedia.org/wiki/Social_media_marketing Back

Adapted from Source: https://en. wikipedia Back

Fundamental elements基本要素for success Two fundamental elements基本要素for success Hierarchy等級制度– specify a number of structures and systems that help to safeguard保護a large firm Authority權力system – limit decision making and actions行為by strict segregation隔離of responsibility and duties責任和義務, restricted access to information and asset In theory, the hierarchy is designed so that, short of sabotage破壞, no single employee or work unit can make a decision or take action that can immediately threaten威脅the entire organization

Balancing agility with control (1) Two mistakes executives often make (1) Failure to redesign失敗重新設計end-to-end processes (with consideration for other part部分of the organization or on partners, suppliers and/or customer organizations) E.g. Frito-Lay, Inc. (a division of PepsiCo, Inc.) in the mid-1980s attempted to accelerate the rate of new product development加快新產品開發速度without ensuring無保證that the supply chain, manufacturing, and order fulfillment processes訂單實行流程could handle the increased complexity

Balancing agility with control (2) (2) Failure to realign faster-cycled operations重新調整更快運作with organization structure, control, authority systems, incentives, and culture E.g. Frito-Lay, Inc. 2nd project to integrate their new products development process with supply chain, manufacturing, and order fulfillment processes but failed to redesign the organization and management systems needed to control these accelerated, real-time processes Real-time business intelligence即時商業智能and early warning for decision-making were not in place, opportunities were missed, and problems went undiscovered問題發生未被發現

Balancing agility with control (3) Thus, the key is to streamline, integrate, and “time synchronize”精簡，整合和“時間同步” both operating and management processes in the business Operating processes: the activities thru which an organization designs, produces, markets, delivers, and supports its products and services Management processes: the activities thru which an organization manages the design, production, marketing, delivery, and supports of its products and services

Suggestion Adopt a comprehensive approach全面的做法to organization design that includes Analysis and realignment調整of capabilities within 4 key areas of business model商業模式design Processes and infrastructure流程和基礎架構 People and partners Organization and culture Leadership and governance Core elements to consider under agility敏捷 Improved access to information High-capacity networked communication高容量的網絡通信systems