Organizations & Systems Sept. 12, 2005

Outline What is an Organization? Interaction of IT with the Organization Network Effects & Economics Classifying Business Organization Units & Information Systems

What is an Organization? Technical Definition: "A stable, formal, social structure that takes resources from the environment and proceses them to produce outputs." (Laudon & Laudon) Information Technology is introduced into this structure to make the production of outputs more efficient.

What is an Organization? Structural, Behavioural and Other: Hierarchy of authority Impersonality Written rules of conduct (operating procedures) Promotion based on achievement (technical qualifications for positions; meritocracy) Specialized division of labor Efficiency (maximal organizational efficiency) IT innovations can create conflicts between these.

A Pre-IT Insurance Claims Office (c 1965) Giuliani, V. E. “The Mechanization Of Office Work.” in Forester, T., ed. The Information Technology Revolution. MIT Press; 1985.

A Post-IT Insurance Claims Office (c 1985) Giuliani, V. E. “The Mechanization Of Office Work.” in Forester, T., ed. The Information Technology Revolution. MIT Press; 1985.

A Post-IT Insurance Claims Office (c 2004) the computers may be in head office, or they may be operated by a service company the call centre is somewhere (and everywhere) the adjusters/claims agents may work out of their homes, as contract employees The Network Head Office Data Centre Call Centre Bank Agents Customers

IT & THE ORGANIZATION: BEFORE & AFTER IP Pre-ITIP Post-IT Skill Levels relatively low relatively high Information Needs structured flows limited access structured storage broad access Responsiveness relatively slow relatively fast

IT & THE ORGANIZATION: BEFORE & AFTER IP Pre-ITIP Post-IT Tasks specialized compartmentalized repetitive generalized interconnected varied/novel Work Flow batch oriented event-driven Standard of Performance follow the rules understand the process

IT & THE ORGANIZATION: BEFORE & AFTER IP Pre-ITIP Post-IT Organizational Structure strongly hierarchical weakly networked strongly networked weakly hierarchical Workforce relatively larger relatively smaller

3 Economic effects of IT on the Organization 1.Information technology costs generally fall, labour costs generally rise. IT can be substituted for labour, and result in fewer middle managers and clerical workers. 2.Information technology lowers transaction costs. Firms should therefore become smaller, and have more external transactions (e.g. through outsourcing). 3.Information technology lowers internal management (supervision and coordination) costs. Firms can therefore become larger. (?)

Org. Units & IT Systems

Examples: Webtrends See: learningspaces.org/1311

Enterprise Systems & the Org “old” integration of ITs

Enterprise Systems & the Org “new” integration of ITs

The Major Eras Of The Computer Age The System Centric Era 1964: introduction of the IBM The PC Centric Era 1981: introduction of the IBM PC The Network Centric Era The Content Centric Era?

FEATURE Audience Technology Principle Offerings Network Focus User Focus Supplier Structure Supplier Leadership # Users at end Market Size SYSTEMS CENTRIC Corporate Transistor Grosch’s Law Proprietary Systems Data Center Efficiency Vertical Integration US systems 10 million $20 billion

FEATURE Audience Technology Principle Offerings Network Focus User Focus Supplier Structure Supplier Leadership # Users at end Market Size SYSTEMS CENTRIC Corporate Transistor Grosch’s Law Proprietary Systems Data Center Efficiency Vertical Integration US systems 10 million $20 billion PC CENTRIC Professional Microprocessor Moore’s Law Standard Products LAN/WAN Productivity Horizontal ‘value chain’ US Components 100 million $460 billion

FEATURE Audience Technology Principle Offerings Network Focus User Focus Supplier Structure Supplier Leadership # Users at end Market Size SYSTEMS CENTRIC Corporate Transistor Grosch’s Law Proprietary Systems Data Center Efficiency Vertical Integration US systems 10 million $20 billion PC CENTRIC Professional Microprocessor Moore’s Law Standard Products LAN/WAN Productivity Horizontal ‘value chain’ US Components 100 million $460 billion

FEATURE Audience Technology Principle Offerings Network Focus User Focus Supplier Structure Supplier Leadership # Users at end Market Size PC CENTRIC Professional Microprocessor Moore’s Law Standard Products LAN/WAN Productivity Horizontal ‘value chain’ US Components 100 million $460 billion NETWORK CENTRIC Consumer Bandwidth Metcalfe’s Law Value Added Services Public Network Customer Service Unified Computer & Communications Chain National Carriers 1 Billion $3 trillion

FEATURE Audience Technology Principle Offerings Network Focus User Focus Supplier Structure Supplier Leadership # Users at end Market Size PC CENTRIC Professional Microprocessor Moore’s Law Standard Products LAN/WAN Productivity Horizontal ‘value chain’ US Components 100 million $460 billion NETWORK CENTRIC Consumer Bandwidth Metcalfe’s Law Value Added Services Public Network Customer Service Unified Computer & Communications Chain National Carriers 1 Billion $3 trillion

FEATURE Audience Technology Principle Offerings Network Focus User Focus Supplier Structure Supplier Leadership # Users at end Market Size NETWORK CENTRIC Consumer Bandwidth Metcalfe’s Law Value Added Services Public Network Customer Service Unified Computer & Communications Chain National Carriers 1 Billion $3 trillion CONTENT CENTRIC Individual Software ‘Transformation’ Law Custom Services Transparent Virtualization Embedded Content Providers Universal Too embedded to measure

FEATURE Audience Technology Principle Offerings Network Focus User Focus Supplier Structure Supplier Leadership # Users at end Market Size NETWORK CENTRIC Consumer Bandwidth Metcalfe’s Law Value Added Services Public Network Customer Service Unified Computer & Communications Chain National Carriers 1 Billion $3 trillion CONTENT CENTRIC Individual Software ‘Transformation’ Law Custom Services Transparent Virtualization Embedded Content Providers Universal Too embedded to measure