Information Technology and Control BA 152

Evolution of Organizational Applications of Information Technology 1. Operations Transaction processing systems Data warehousing LOW SYSTEM COMPLEXITY HIGH Direction of Information System Evolution MANAGEMENT LEVEL TOP (strategy, plans, non-programmed) LOWER LEVEL 2. Business Resource Management Information systems Decision Support Systems Executive information systems Management control systems Balanced Scorecard 3. Strategic Weapon Intranets ERP Knowledge Management INTERNAL Extranets, EDI Integrated Enterprise E-Business EXTERNAL

Data, Information, & Control n Data - Input from any communication channel n Information - Data that alters or reinforces understanding n Control - Evaluation of information that provides the basis for future actions

Information and Data Information Data Low High

Information and Control Information Control High LowHigh

Control Systems: The Key Pieces Performance Standards Performance Measures Actions (if necessary)

Major Control Approaches n Market Control – n Bureaucratic Control – n Clan Control -

Control Systems: What gets controlled and how? Output Process Input Clan Bureaucracy Market How What

Supervisory Control Strategies n Input Control – n Behavior Control – n Output Control –

Supervisory Control Strategies What works best when? Are Tasks Structured? YES NO YES Are Outcomes Measurable? NO

Developing Effective Control Systems 1.Involve employees in the process, as appropriate 2. 3.Keep the system as simple as possible 4.

Developing Effective Control Systems 5.Make sure the system fits with the firm’s culture, strategy, and structure 6.

Effective Control Systems: Keep the following in mind 1.What gets measured is what will get done! 2.System costs must be considered. 3.Too much information can be as bad as too little. 4.You can’t make just one decision.

Control Systems The Balancing Act ControlAutonomy

Knowledge Management

n Consider two different types of knowledge important to organizations. – Types of Knowledge

n Explicit Knowledge – Knowledge that is formal and systematic – – Knowledge that can be communicated and shared. – Examples? Types of Knowledge

n Tacit (implicit) Knowledge – Knowledge that is highly personal. – – Knowledge that is difficult to communicate, because “We often know more than we can tell.” – Examples? Types of Knowledge

Sharing Different Kinds Of Knowledge Explicit to Tacit and vice- versa

Sharing Knowledge: The knowledge spiral FROM Tacit Explicit TO ExplicitTacit

Two Approaches to Knowledge Management For Explicit Knowledge Provide high-quality, reliable, and fast information systems for access of codified, reusable knowledge

Two Approaches to Knowledge Management MechanismsTechnology Knowledge Managemen t Strategy People-to-documents Develop an electronic document system that codifies, stores, disseminates, and allows reuse of knowledge. Invest heavily in information technology, with a goal of connecting people with reusable codified knowledge.

For Tacit Knowledge Channel individual expertise to provide creative advice on strategic problems Two Approaches to Knowledge Management

Person-to-person Develop networks for linking people so that tacit knowledge can be shared Invest moderately in information technology, with a goal of facilitating conversations and the exchange of tacit knowledge Mechanisms Technology Knowledge Managemen t Strategy

Communities of Practice n Collections of individuals – Bound together by informal relationships – – Sharing common work context –

Communities of Practice n “Practice” suggests how individuals actually do their jobs as opposed to their formal job descriptions from their firm.

Collective Comparisons As long as people need to connect Mutual needs Friends & business contacts To collect & pass on information Informal network Until project is completed Milestones and project goals Assigned by senior manager To complete a specific task Project team Until the next reorganization Job demands and common goals Those reporting to manager To deliver a product or service Formal work group Community of practice How long does it last? What holds it together? Who belongs? Purpose?

n Why should we allow/encourage, but not attempt to formally manage, COPs? 1.They can help drive strategy They can solve problems quickly They develop professional skills. 6. Communities of Practice

Next Time n Organizational Size, Life Cycles, and Decline