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Re-engineering information technology: an enabler for the new business strategy.

Looks into the major management alternatives or options with focus on functional and information managers and their organizations

Introduction

For a number of years it has been recognized that information technology (IT) and business strategy have been out of "sync". In a rapidly changing environment, information systems (IS) has been consistently chained to applications that have become outdated even for routine company administration operations. The business strategy-side of the house has likewise been deficient in failing to become "world-class" in nature, which requires increasing numbers of important programs of the type usually associated with Japanese industry such as total quality management (TQM), just-in-time (JIT), quality circles, etc. On balance, however, IS is the greater offender for failing to recognize and work towards the business goals, flawed as they may be. A recent Harvard Business Review article strongly points out the need for companies to develop strategies for building critical capabilities to achieve competitive advantage[1].

A reasonably direct way to improve the existing situation and meet the demands of both "top" and IS management may be to develop a strategy for improving productivity and performance through a well-planned re-engineering strategy which would coalesce both IS and business objectives. The American Management Association put forth a strong argument for "re-engineering as an enabler of Information Technology"[2], which places the role of IT as one of major importance in re-engineering. Research into this approach soon brings about the realization that it involves far more than throwing technology at problems.

Whereas the strategic uses of IS are changing, they revolve around: re-engineering, competitive tools, and the integration of processes. This presentation concentrates primarily on the first one. Although the focus here is reengineering in an organization, human nature aids this process in that it follows the following principles of Fubini's Law: people initially use new technologies to do what they already do - only faster; they gradually begin to use the technology to do new things; these new things change the way we live and work; and the new lifestyles and workstyles change society and eventually change technology.

In the manner prescribed above, it seems reasonable that re-engineering IT as an enabler for arriving at a new business strategy will become the ultimate management tool and not a passing fad. In any event looking at the possibilities of re-engineering is a must in forward-looking organizations.

Business climate strategy

It could be said that technology is the glue that binds together world-class organizations. According to some authors, organizational design has entered a new paradigm with new rules, new boundaries, and new ways of behaviour to succeed[3]. This new paradigm consists of total quality organizations, learning organizations, and, world-class organizations. One element crucial to worldclass organization success is technology. The authors credit this success to advances such as computer-aided design, computer-aided manufacturing, telecommunications networks, expert systems, distributed database systems, interorganizational information systems, etc.[3] The same source points out that information technology plays a vital role in world-class organizations.

Despite the many failures in business planning in recent years, to plan or not to plan makes a significant difference. In fact, a sound business strategy cannot be developed without business planning. Planning forces people in organizations to think through the things (goals and objectives) that really matter for the survival of the business. Innovations and the elasticity of the mind cannot be brought to fruition without planning The old saying, "Plan your work; then work your plan", is probably more true today in our modern environment. Successful planning takes discipline, diligence, and knowledge on the part of an organization's employees. Without this commitment no effective business strategy can be achieved.

Levels for understanding information technology

The strong probability exists that, almost from its beginning in the not too distant past, the IS field has been looked at through the tunnel vision of the high "tech" professionals and, as a result, its potential values to business organizations have been overlooked. Designers have not had a clear idea of the all-inclusive mission (goals and objectives) of IS. Many designers are not beyond transaction processing of the early days of data processing, where the objectives were defined by productivity measures. Some designers have progressed to the MIS era where the focus of IS shifted to producing reports for management, whereas more forward-looking thinkers are abandoning these narrower objectives to focus on an IS mission "to improve the performance of people in organizations through the use of information technology"[4].

In recognizing the huge leap in the competitive use of information technology (IT), one leading researcher in the field, Steven Alter, maintains that, although the focus remains on the computer, the business value is in the business process and that our major emphasis now should be on "IT-supported business processes"[5]. Alter points out that he cannot understand IS except in the context of business processes which he illustrates as in Figure 1.

Business redesign

Owing to numerous changes in organizations over the past several years, more often than not IS functions are not designed to reflect current requirements. The designs are based on technical specifications that no longer reflect what has to be done now or in the short-term future. This calls for the redesign of systems and processes that are obsolete or no longer effective. This process normally starts with a design review to determine what needs to be done to ensure that the IS is yielding a high degree of quality which meets the user's needs. Since it is normally done as a team effort, it provides team members with an opportunity to review the system design in detail.

This process is related directly to shortcomings in existing methods. Because of these shortcomings, methods and tools are not sufficiently on target or are not sharp enough to bring about performance improvement objectives. Well developed redesign will bring about changes to existing methods and focus on techniques that are designed to get the desired results.

Business process redesign is usually done as a team effort and, to be effective, is driven by predetermined improvement objectives or targets. An example of a recent redesign project was undertaken by Coming Asahi Video Products Company (CAV), one of Corning's oldest and largest businesses. This company is a manufacturer of television glass in the highly competitive world of consumer electronics. The recently appointed CEO of CAV, Ken Freeman, was faced with the challenge of taking a 40-year old business (recently joint-ventured between US and Japanese partners) and "to breathe new life into the television glass business"[6]. With the mission of turning things around for the owners, customers, and employees, and after a reality check of how much change the ailing business could take at one time, the decision was made to work on the redesign of a single process order fulfilment from receipt of the order to delivery of the product[6]. Corning's IS group was an important part of the redesign team contributing much to the decision-making process and became functionally responsible for third-party software. The results were such that Corning takes pride in the team's accomplishments and is now enjoying the results of zero-defect information, timely data, and better service.

Re-engineering

An early experience involved in dynamic design, particularly of a going organization, is re-engineering which entails restructuring of engineering principles which may not be up to software standards such as poor quality code as evidenced by excessive maintenance required to correct the code. This backs into the information systems engineering (ISE) field. This field consists of two terms -- IS and engineering The former, implies computer-based designed systems for human users; the latter implies the use of engineering disciplines[7].

Re-engineering the IS organization is often necessary to meet top management demands for improving productivity and performance. The American Management Association, in several seminars this year on re-engineering the IS organization, points out that reengineering can achieve radical results in areas such as: customer satisfaction and quality; speed and flexibility; matching' IS goals with corporate goals; cost cutting; productivity boosts; and sharpening the organization's competitive edge.

Corporate America has done massive restructuring (re-engineering) over the past 35 years to cope with change and remain competitive in a rapidly changing world. This has been particularly true since computers emerged on the scene. President Clinton has now prescribed the same thing for the federal government to culminate in a promise to the American people of a new "customer service contract" guaranteeing them an "effective, efficient and responsive government"[8].

In addition to automation a number of new management techniques have arrived on the scene which were not available when many organizations were planned and designed. One of these, total quality management (TQM), is now a good argument for the need for re-engineering. The principles of TQM (customer focus, continuous improvement, and total involvement) mandate a reengineering process for an organization to survive.

At an ORSA/TIMS conference in Phoenix last November, a plenary session speaker, Richard McCormick, in speaking on The Vital Link stated that most organizations today are focusing on the customer, practicing total quality and re-engineering their processes. To him doing these things is "working smarter", which means getting researchers and scientists more involved actively in listening to customers[9]. He views reengineering as a means of quantifying the various choices including hearing the "voice of the customer".

One further comment on re-engineering in organizations should be made: that is to include the concept of managing the human side of systems for better overall management of the IS functions. This involves transforming technicians. Since the beginning of the computer era our focus has been on machines, high-tech companies, and technical workers. In the current environment and projections for the future, the focus is changing to the people part of the man-machine system and to the service element towards the user. IS organizations can no longer be preoccupied with the computer but must think in terms of computer outputs to help the users, clients, and customers succeed in their endeavours. Executive excellence, in the view of one author, is that "service in technical environments now requires working directly with customers, listening to their concerns, 'fixing' problems, and being proactive in satisfying needs"[10].

Re-engineering for success must be balanced in its approach to all the major facets in the life of an organization. Two experts in the field have summarized this in a succinct statement to the effect that IS professionals have always been enamoured with the technical portions of computer systems but the human side has been of less interest even though it is people who make or break a system through their use or disuse of

it[11]. The human side can no longer be minimized in high-tech and IS organizational development.

Integrating IS technology

Over the short history of computer-based information systems, professionals have gone through a series of generations which were based initially on heavy technical development of hardware, soon to be followed by software, and later by peopleware. Information systems soon became features of automated systems where word processing, decision support and decentralized processing developed into major courses of action in carrying out business functions.

Greater demand for applications led to the need for integrated systems such as computer-based management information systems (MIS). This era began in the 1970s. The system (MIS) was based on the idea of serving management at all levels and demanded an integrated communications (reporting) component. It soon became apparent that the technology available at that time would not support the MIS vision of a single computer-based IS to meet the needs of an organization for transaction processing, financial and control reporting, manufacturing planning and control, etc.[12]

In this environment of rapid change, new technologies need to be grasped and introduced into IS development or use as management tools in all the management processes; however, the enormity of this task is such that the success of technological change is not fore-ordained. This is where professionals, users, and functional managers must work as a team to bring the desired results. This type of planned change now requires the use of both managerial and technical skills and enlists the use of computer-aided software engineering (CASE) tools, for example, in order to accomplish desired and lasting results.

This article discusses briefly several technical methodologies and organizational issues worthy of note for integrating IS technology.

Methodologies

Valuable methodologies for integrating IS technology include: Critical Success Factors (CSF); Ends/Means Analysis (MIS Research Center, University of Minnesota); Business Systems Planning (BSP-IBM); Nolan's Stage Analysis; and Andersen Consulting (M-1).

In this article the methodology selected for discussion is CSF. CSF methodology has a place in IS development. Depending on the organization, it can have great strategic implications. The CSF methodology is a procedure that attempts to make explicit those few key areas that dictate managerial or organizational success[13]. It requires that the analyst or consultant has a strong understanding of the business. That understanding is then used to elicit information from executives regarding critical success factors for the organization. These CSFs can be used to promote organizational redesign issues and initiate strategic planning Simultaneously, CSFs can be used to define IT capabilities for the organization and eventually link the organization and information needs.

Organizational issues

The conditions mentioned in this article pose some great challenges for IS management in support of strategy, computer power, outdated systems, elimination of backlogs, supporting end users, and many other management-type problems. Desktop operations and who provides them today and tomorrow are another item of concern. To illustrate, in the author's opinion, MIS management must address the following issues in the mid-1990s.

The ten most critical issues in information systems management for 1991-1995 encompass: developing an information architecture; making effective use of the data resource; improving IS strategic planning; specifying, recruiting, and developing IS human resources; facilitating organizational learning and use of IS technologies; building a responsive IT infrastructure; aligning the IS organization with that of the enterprise; using information systems for competitive advantage; improving the quality of software development; and planning and implementing a telecommunications system.

Notice is also taken of the increasing pressure and need for the integration of systems which are now being drawn together to integrate MIS technology in the organization of the future. Whereas early developments were focused on programming and data processing with a preoccupation of getting the computer to work, a significant shift has now occurred with the emphasis on the applications that the computer systems can do to help the business succeed in a highly competitive environment. This requirement makes it all the more important for MIS to succeed since it is now vital to business success. In fact, some authors have found it useful to consider MIS as a business within a business.

Some professional conferences, such as the ORSA/TIMS meeting in Arizona, last year, have conference themes such as "Seeing the Customer" which are proving to be a strong force leading to the development of applications to help solve customer problems by using technological trends and their implications in such systems as networks, DBMSs, Fourth Generation Languages (4GLs), Expert Systems, workstations, and applications to bring about business success.

Implications and conclusions

Recognizing and redesigning IS roles and organizations to alleviate the shortcomings in existing methods has been the main thrust of this article and the areas covered are intended to aid in determining IS technology's contribution to an organization's success. IS management plays a dual role best summed up as a partial transition from technician to manager.

Further implications

These are:

* The fundamental problem is one of designing

integration to influence management to use IS to

accomplish best the organization's goals through

the use of re-engineering integration.

* Create management awareness to new options to

replace outdated systems.

* Recognize and accommodate human values in

solving IS problems.

* Consider business needs as the primary basis for

change.

* Create close teamwork between IS and user

personnel.

* Recognize that IS is in a rapidly changing state

where much additional research is needed to bring

about success in future operations.

[Figure 1 ILLUSTRATION OMITTED]

References

[1.] Hayes, R.H. and Pisano, G.P., "Beyond world-class: the new manufacturing strategy", Harvard Business Review, January/February 1994, p. 77.

[2.] Information Management Forum, The American Management Association, December 1993, p. 1.

[3.] Hodgetts, R., Luthans, F. and Lee, S.M., "Total quality management: implications for Central and Eastern Europe", Organizational Dynamics, Spring 1992, p. 42.

[4.] Sprague, R.H. and McNurlin, B.C., Information Systems Management in Practice, 3rd edition, Prentice-Hall, Englewood Cliffs, NJ, 1993, p. 14.

[5.] Alter, S., "Proceedings of the Tenth Information Systems Education Conference", sponsored by DPMA Education Foundation, Phoenix, AZ, November 1993, p. 127.

[6.] Freeman, K., "Business process redesign: a Corning perspective", SIM Executive Brief, Vol. IV No. 2, Summer 1993, Chicago, L p. 1.

[7.] CAiSE*94 Software Engineering Research Centre Brochure, Utrecht, The Netherlands.

[8.] Reynolds, L., "Can Government be reinvented?, Management Review, AMA, Saranac Lake, NY, January 1994, p. 14.

[9.] McCormick, R., "The vital link", Plenary Address, ORSA/TIMS Conference, Phoenix, AZ, November 1993, p. F20.

[10.] Major, G., Information Management Forum, AMA, November 1993, p. 3.

[11.] Sprague, R.H., Information Management Forum, AMA, November 1993, p. 3.

[12.] Hoffman, G., "Coping with information megalomania", Information Management Forum, AMA, September 1991.

[13.] Rockart, J., "Chief executives define their own data needs", Harvard Business Review, March/April 1979.

Herman P. Hoplin is Professor Emeritus, Technical Management Consultant, School of Management, Syracuse University, Syracuse, New York, NY, USA.
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Author:Hoplin, Herman P.
Publication:Industrial Management & Data Systems
Date:Feb 1, 1995
Words:2913
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