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IMPLEMENTING BUSINESS CHANGE WITH

INFORMATION TECHNOLOGY

What Is Change?

Change is:
 alterations in people, structure, or technology
 change is an organizational reality
 managing change is an integral part of every manager’s job
 complicates the jobs of managers

Forces for Change

External Forces
External Forces causing change are:
 marketplace - adapt to changing consumer desires
 governmental laws and regulations - frequent impetus for change
 technology - source of change in almost all industries
 labor markets - HRM activities must change to attract and retain
skilled employees in the areas of greatest need
 economic - uncertainties about interest rates, budget deficits, and
currency exchange rates

Internal Forces
Internal Forces causing change are:
• originate from the operations of the organization
• forces may include strategy, workforce, new equipment, or employee
attitudes

The Change Process


Three Categories of Change

Work specialization,
departmentalization,
chain of command, span of
Structure
control, centralization,
formalization, job redesign,
or actual design

Work processes, methods,


Technology and equipment

Attitudes, expectations,
People perceptions, and
behavior

Three main categories of change are:


• changing structure - organization’s formal design, centralization,
degree of formalization, and work specialization
• structural components and structural design
• changing technology - modifications in the way work is performed
• alterations in the methods and equipment used
• consequence of competitive factors or innovations within an
industry
– automation - replaces tasks done by people with
machines
– computerization - recent visible changes in information
systems
• changing people - changes in employee attitudes, expectations,
perceptions, and behavior
• organizational development (OD) - techniques or programs to
change people and the nature and quality of interpersonal work
relationships
– intended to help individuals and groups work together
more effectively
Managing Change
Change is managed by:
• identifying what organizational areas might need to be changed
• putting the change process in motion
• managing employee resistance to change
• Involve as many people as possible in planning and application
development
• Make constant change an expected part of the culture
• Tell everyone as much as possible about everything as often as possible
• Make liberal use of financial incentives and recognition
• Work within the company culture, not around it

IMPLEMENTING BUSINESS CHANGE WITH IT:


There are various strategies through which IT helps in implementing
business change. Some can be seen by the following diagrams:

Improving Promote Locking in


Strategy Business Business Customers
Process Innovation and Suppliers

IT Role Use IT to Use IT to •Use IT to


reduce costs create new improve quality
of doing products or •Use IT to link
business services business to
customers and
suppliers

Create New Maintain Valuable


Outcome Enhance Business Customers and
Efficiency Opportunities Relationships

Raise Build a Build a


Strategy Barriers Strategic IT Strategic
to Entry Platform Information Base

IT Role Increase Leverage Use IT to


amount of investment in provide
investment or IS resources information to
complexity of from operat- support firm’s
IT needed to ional uses to competitive
compete strategic uses strategy

Create New Enhance


Outcome Increase Business Organizational
Market Share Opportunities Collaboration
TOOLS AND TECHNIQUES OF IT FOR IMPLEMENTING
BUSINESS CHANGE

Business Process Reengineering:

One of the most important competitive strategies today is business process


reengineering (BPR) most often simply called reengineering. Reengineering
is more than automating business processes to make modest improvements
in the efficiency of business operations. Reengineering is a fundamental
rethinking and radical redesign of business processes to achieve dramatic
improvements in cost, quality, speed, and service. BPR combines a strategy
of promoting business innovation with a strategy of making major
improvements to business processes so that a company can become a much
stronger and more successful competitor in the marketplace.
However, while many companies have reported impressive gains, many
others have failed to achieve the major improvements they sought through
reengineering projects.

Business Quality Improvement:

Business quality improvement is a less dramatic approach to enhancing


business success. One important strategic thrust in this area is called Total
Quality Management (TQM). TQM emphasizes quality improvement that
focuses on the customer requirements and expectations of products and
services. This may involve many features and attributes, such as
performance, reliability, durability, responsiveness etc.

TQM uses a variety of tools and methods to provide:

• More appealing, less-variable quality of products or services


• Quicker less-variable turnaround from design to production and
distribution
• Greater flexibility in adjusting to customer buying habits and
preferences
• Lower costs through rework reductions, and non-value-adding waste
elimination.
Business
Business Quality
Quality Business
Business
Improvement
Improvement Reengineering
Reengineering
Incrementally
Incrementally Improving
Improving Radically
Radically Redesigning
Redesigning
Definition
Definition Existing
Existing Processes
Processes Business
Business Systems
Systems
Any
Any Process
Process Strategic
Strategic Business
Business
Target
Target Processes
Processes

Potential
Potential 10%-50%
10%-50% Improvements
Improvements 10-Fold
10-Fold Improvements
Improvements
Payback
Payback
Low
Low High
High
Risk
Risk
Same
Same Jobs
Jobs -- More
More Efficient
Efficient Big
Big Job
Job Cuts;
Cuts; New
New Jobs;
Jobs;
What
What Changes?
Changes? Major
Major Job
Job Redesign
Redesign

Primary
Primary IT
IT and
and Work
Work Simplification
Simplification IT
IT and
and Organizational
Organizational
Enablers
Enablers Redesign
Redesign

Telecommunications Networks:

Most popular telecommunications networks are WAN, LAN, MAN, VPN


and Internet. Telecommunications networks are greatly used by businesses
due to their following strategic capabilities:

Overcome
Overcome Geographic
Geographic Barriers:
Barriers: Capture
Capture information
information about
about
business transactions from remote locations.
business transactions from remote locations.

Overcome
Overcome Time
Time Barriers:
Barriers: Provide
Provide information
information to
to remote
remote locations
locations
immediately
immediately after
after it
it is
is requested.
requested.

Overcome
Overcome Cost
Cost Barriers:
Barriers: Reduce
Reduce the
the cost
cost of
of more
more traditional
traditional
means of communications.
means of communications.

Overcome
Overcome Structural
Structural Barriers:
Barriers: Support
Support linkages
linkages for
for competitive
competitive
advantage.
advantage.
Information Systems:

An Information System is an organized combination of people, hardware,


software, communications networks, and data resources that collects,
transforms, and disseminates information in an organization.
Key concepts of the text include:
Information Technology (IT). The dynamic interaction of computer-based
information systems with telecommunications forms the backbone of IT.
End User Perspective. An end user is anyone who uses an information
system or the information it produces. As a perspective on management
information systems, the end user focuses designers, developers, and all
information systems personnel on how the system does and should function
in use. Information systems are powerful tools -- and all the more powerful
when made to fit the needs of those who use them everyday. This involves
adapting the system to the user, not the other way around.
An Enterprise Perspective. Information technology can provide the
information a business needs for efficient operations. It can even be the
foundation of a company's competitive advantage. But to function properly,
an information system must be developed in support of the strategic
objectives, business operations, and management needs of the enterprise.
Control
Control of
of System
System Performance
Performance

Input
Inputof
of Output
Outputof
of
Processing
Processing
Data
Data Information
Information
Data
Data
Resources
Resources Products
Products

Storage
Storage of
of Data
DataResources
Resources