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What capabilities does IT offer

Information technology (IT) plays a vital role to organizational success and survival. From e-commerce, to planning, networking, to the internet, to word processing, IT has become the driving force in today’s global economy. Firms regularly invest in IT for such activities as Supply Chain Management (SCM), payroll, human resources, accounting and a host of other functions. As also evident in the WB case, the establishment of ‘five point program’ as the Bank’s IT strategy foundation by CEO Wolfensohn delivered an amazing results i.e, besides ease at work provided global customer base a high degree of reliability and service. CEO Wolfensohn’s careful analysis of the bank’s business and extensively visiting the bank’s clients made him to take certain critical and strategic decisions like revamping of the information systems and building of a global network with a clear goal to enable a global decentralized organization close to the customer and to provide collaborative tools and global development knowledge that would help the far-flung bank staff and stakeholders work more closely and effectively than ever before to scale up the impact of the bank’s work. World Bank as a corporation needs to understand IT implementation and how it would help their company strategically. Two fundamental shifts in business strategy took place. A part of their Organizational Evolution is to transform the Bank from a Hierarchical to a matrix organization. An established and large firm like this needs innovation and entrepreneurship but at the same time they need to retain their power and efficiency.

Bank’s decision to move towards decentralization as part of their overall business strategy seems feasible and was a wise idea especially in regards to managing IT. It is critical to appreciate the differences in infrastructure. The case of World Bank provides a great example of a global company with presence in developing countries. accessibility. Its seen IT as a support mechanism for their decentralized business environment by offering a tool to bring people together in real time that are thousands of miles apart. etc. . when determining whether to move towards a centralized or decentralized business strategy especially in the area of IT. domestic policies. This will help to avoid having conflicting information regarding the planned corporate strategy and what the managers are doing for overall organization performance.Coordination of IT activities and employee feedback are important. Having a presence in over 140 countries means that WB needs to understand the IT capabilities of all countries and stakeholders and offer support to all end users but work within the limitations that exist in each geographic area.

domestic policies. etc. customers needs and customer voice. It is critical to appreciate the differences in infrastructure.2. let alone evaluate. accessibility. The business need for IT can be understood by even those not a dedicated IT specialist by understanding the market trends. As also seen in WB case the CEO upon understanding the need ensured the careful analysis of the bank’s business and extensively visiting the bank’s clients which made him to take certain critical and strategic decisions like revamping of the information systems and building of a global network with a clear goal to enable a global decentralized organization. Having a presence in over 140 countries means that WB needs to understand the IT capabilities of all countries and stakeholders and offer support to all end users but work within the limitations that exist in each geographic area. internal feedbacks from staff. when determining whether to move towards a centralized or decentralized business strategy especially in the area of IT. Its seen IT as a support mechanism for their decentralized business environment by offering a tool to bring people together in real time that are thousands of miles apart. How can a generalist understand. . the large and constantly changing set of available information technologies? Is it possible for someone who is not a dedicated IT specialist to sort through these technologies and match them to business needs? ---The case of World Bank provides a great example of a global company with presence in developing countries. these helps to ascertain the needs of constantly changing set of available information technologies and plan even if one is not a dedicated IT specialist to sort through these technologies.

Developing guidelines that clearly allocates responsibility to individuals within the organization regarding various controls is important.Applying quantitative and qualitative measures to evaluate success is seen as important though it’s difficult to define. Moreover. motivated and retained. As seen in WB case the CEOs Discussion fluctuated between establishing meaningful measurements and the pros and cons of centralization vs. Few people must be responsible to ensure system security and few people must have access to the company databases. . decentralization and he advocated a decentralized decision-making model to support the diverse cultures and suggested that a mandate be set for each local office by head office. In the WB case the question of discussion for CEO might have been to focus on centralization vs. and adequate and reliable communication. few people can be given responsibility to take specific actions if the system goes down. decentralization and also to see if Local offices should be relatively autonomous when carrying out the work needed to support. developed. This will help to communicate decisions taken to the other parts of the organization. to see right people are hired with the desired IT skills and they are recruited. Hence we see that these actionable and decision which are management in nature can be taken with support of the IT dept and need not be taken as an isolation. for example: one person is responsible for personnel controls. Decentralization would help to improve the local decision making but along with that technology tools but be implemented to ensure enterprise wide information sharing. A good way to ensure proper implementation of IT activities would be to clearly specify how control and authority are to be maintained once the traditional systems have been disrupted.

The management at the decision making power needs to Initially discus and focus on how best to manage expectations. the role of the CEO and CIO in ensuring the right decision for the IT Success and some of the suggestions made or considered were as follows: .Communication geared to specific audiences (a. In 2003 World bank financed 240 projects in 92 countries.k. the bank supported efforts including building achools and health centers. . . GM etc) contribute to IT success? What roles should they play throughout the course of any IT effort? ---As also evident in the WB case. Since the responsibilities being more and using the resources becomes a key to the success.3.continually update and receive feedback from employees/stakeholders through out the project life cycle. . and helping to create a better investment climate and more efficient public sector. high level for management more granular for technical staff). opportunity and implementation strategy. The challenge for any CEO is to use the resources optimally. How do head decision maker (CEO.set realistic timelines for IT implementations.a. the management can contribute in IT success by having a clear vision. With reference to the WB case. In this case too being one of the world’s largest sources of development assistance. mission after understanding the need. . .manage change to reduce scope creep. providing water and electricity.clearly define scope.

. The before and after table clearly shows the positive effect of the managements role in contributing the IT success.develop clear framework for evaluation. . assessing and starting fundamental shifts in business strategy.ensure involvement from beginning to end. . In this case too CEO Wolfensohn played an important role in setting. Wolfensohn’s assessment was translated into a business strategy leveraging IT.

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This helped to communicate decisions taken to the other parts of the organization. A good way to ensure proper implementation of IT activities by the decision making mgt would be to clearly specify how control and authority are to be maintained once the traditional systems have been disrupted. which helped to improve the local decision making along with that technology tools.The benefits of the IT to WB being Decentralization. Developing .

it is necessary to gauge as many opinions as possible. With ever decreasing costs of Technology. Organisations regularly . the decentralization allows for more efficient systems to emerge. With greater feedback. does IT capabilities are getting easier to acquire? Yes. the movement toward a more decentralized orientation gives the World Bank the ability to engage more stakeholders in the feedback process. to see right people are hired with the desired IT skills and they are recruited. As mentioned in the case. 4. for example: one person is responsible for personnel controls. I think the World Bank will capitalize upon these efficiencies by decentralizing. Few people must be responsible to ensure system security and few people must have access to the company databases. Moreover. developed. and sharing of ideas.guidelines that clearly allocates responsibility to individuals within the organization regarding various controls is important. I think that feedback is always important from end users. motivated and retained. all the way to senior executives. few people can be given responsibility to take specific actions if the system goes down. The ever-increasing Investment in IT is loosely defined as including computers and telecommunications equipment and their necessary software. Thus. hardware and services. with decreasing costs of technology and further research avenues the IT capabilities are getting easier to acquire. To ensure that a system is feasible.

In addition. such as information systems. Of particular concern to smaller firms is the resource requirements associated with IT investment. and quality. External forces bring down the costs too which include pressure from competitors.invest in IT for such activities as payroll. Of course this is not to diminish the importance of the business founder’s willingness to delegate responsibility and become a manager of others in the small business growth process. supply chain management. suppliers. A good way to ensure proper implementation of IT activities would be to clearly specify how control and authority are to be maintained once the traditional systems have been distributed. External audits along with regular review by senior managers can ensure risk . accounting. and customers as well as the availability of government incentives and technology consultants. human resources. must be acquired in advance of growth so that they are in place when needed. small firms can transform their entire business. Developing guidelines that clearly allocates responsibility to individuals within the organization regarding various controls is important. Analysis of both the failure and success can help them build “sense and respond” capabilities required for today’s volatile business environment. access. larger firms have found it almost imperative and profitable. While smaller firms have been more reluctant to invest heavily in IT. With reference to the WB case. The degree of sophistication of both information and planning and control systems is a prominent factor in determining the success or failure of business growth which becomes increasingly important as businesses grow larger and more complicated. These improvements can be gained without additional investment in resources. By using IT to automate business processes and to improve information gathering. These systems. and a host of other functions.

Hence it’s a good idea to pursue competitive advantage and differentiation via IT. and organizational factors that would persuade a firm to adopt IT. Information processing is found to be the strongest indicator of a firm’s life cycle stage with decreasing costs of technology. The concept of competitive advantage lies at the heart of understanding a firm's performance in competitive markets. Further with time. technological. External audits along with regular review by senior managers can ensure risk and asset management. incremental adjustments can help to solve problems and update systems without much hassle. above average performance in the . Is it a good idea or a bad idea to pursue competitive advantage and differentiation via IT? IT cannot be seen as a functional tool alone but as a strategic capability that can provide the with competitive advantage. ------------------------------------------5. Further with time. As seen in the WB case too Analysis of both the failure and success are important for having an edge in competitive advantage and can help organizations to build “sense and respond” capabilities required for today’s volatile business environment. that is. IT investments by organizations have focused mainly on the antecedents of IT investment. Over time. identifying the external. incremental adjustments can help to solve problems and update systems without much hassle.and asset management. IT investment has been shown to be associated with a shift to higher skilled workers which positively impacts the IT capabilities.

it was noted that to have smooth operations and competitive edge (here competitive operation is not competing in the market with other players but having an operations edge) they Decentralization and it was definitely the best strategic plan done at World Bank since it tailors decisions/flexibility to each separate market resulting in efficient and effective decision making in the long run. Consequently. The information revolution and the tales of competitive advantage have certainly altered how managers throughout business see the role of Information Systems. Porter's ideas about competitive advantage can be used to examine how Information Systems affect the performance of a business organization by changing the relationships within the five forces that shape its competitive environment. drawbacks exist in this strategy since higher cost will be incurred to change the organizational culture and infrastructure. ----------------------------------------------------------------- . Where it was once perceived to be only part of the operating of a business. Furthermore. a feedback system will monitor and enhance the performance of strategies pursued by the World Bank. there is now an increasing recognition of the value of information. this can be overcame through educational programs and awards to encourage the restructuring (reforming) process. With reference to the WB case. it is recognized that information is a depreciating asset and must be treated as a resource that the organization could / should use in its business.long-run can only be generated by creating a sustainable competitive advantage. But. Moreover.

Sometimes its imperative that organization changes for good which is in response to the competition. rather than being bogged down with day-to-day operational inefficiencies. back-office support.6. IT capabilities can help top managers address the crises that emerge at each life cycle stage. Firms in the stability stage will pursue IT capabilities that enable efficient production. Its seen that Firms in the conception and development stage will pursue IT capabilities that enable connectivity. market responsiveness. customer demand or changing trend. In the case of WB the change had to be initiated as per the need for decentralization (as per the different market operations). creativity. training. also the CIO and CEO had seen the IT system was not in align to the changing trend. . over time the accumulation of additional IT implementations. and collaboration activities. Should IT be used to force organizational change. removes tedious distractions from managers’ attention. Firms in the commercialization stage will pursue IT capabilities that enable flexibility. and design activities. and marketing activities. providing more time for strategic growth oriented actions. or only to support it? IT has to play dual role of being a change agent and as a support function depending upon the role and stage of the organization. and communication activities. As an added benefit. if done properly. Firms in the growth stage will pursue IT capabilities that enable customer relations.

Through this. having different economical situation in each country. and adequate and reliable communication. all the way to senior executives. This will arise an other problem. This helped to communicate decisions taken to the other parts of the organization. but be implemented to ensure enterprise wide information sharing. background experience of WB in each places and use it as a base factor for comparing the servies in each place. for example for “return on investment”. To ensure that a system is feasible. different values might be suitable in different places and on other parameters such as economical situation. the unique metric doesn’t represent the real value of services. which helped to improve the local decision making along with that technology tools.The benefits of the IT to WB being Decentralization. In the WB case too we saw the bank had both quantitative and qualitative metrics. Further with time. it is necessary to gauge as many opinions as possible. Feedback is always important from end users. This is an important point is that the metric should be unique all over their places to evaluate the services consistently. incremental adjustments can help to solve problems and update systems without much hassle. they can assess the services consistantly. . Like other organizations practicing change.