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    19930007

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    Man Kap

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    of 16
    Get ‘Ann Brown g value from an integrated IS strategy Information Management Division, City University Business School, Frobisher Crescent, Barbican, London EC2Y 8HB Many organisations are starting to make major changes wo the way in which they use Information Technology. Developments in both information and ‘communications technology have made it economically feasible to link staff together by communicating networks of computers. Organisations seek to ‘gain advantage by using such networks to improve the intemal integration ‘of business activities across divisions and departments. This paper examines the implications of auempting to move to this position from that of using computers in a more localised way within isolated business functions. It argues that such a move is nota simple one and that to achieve a successful transition organisations ae likely to have to handle a complex range of now problems, 1 Introduction ‘The concept of the integrated use of Information “Technology was introduced by the MIT90s research programme (Venkatraman,1991). This large scale programme investigated the impact of TT on a wide range of companies. One of the many frameworks developed within it was Venkatraman’s five level ‘model of TT-induced reconfiguration, Ths gives us an illuminating way not only of assessing where any individual organisation stands in the use of FT bat also points the direction in which it might go. Five fairly distinct levels were identified, in which Increasing use is made of T. The range (and hence value) of potential benefits are predicted to increase with cach succeeding level of IT usage, but achievement of the full potential value only comes with greater and greater change to the way the business is operated ie with increasing degrees of ‘business transformation, ‘This paper concentrates on the implications of attempting to reac the second level, that of intemal integration. It is not a simple move, Many factors are involved in the successful transition 10 the ‘integrated use of IT. The purpose of the paper is to ‘investigate the nature of internal integration and in doing so establish the significance of the move, assess the complexity of the issues facing organisations embarking on it and outline some ‘ways in which problems frequently raised by the attempt are currently being approached. Two case examples of integration are used to illustrate the types of changes that we can expect to see. They form an interesting contrast in that one Company was at the beginning of integration atthe start of the case whereas the second had already {implemented integrating applications prior to the ccase described. 2 The significance of internal integration Integration has particular significance at this time for several reasons. Many companies appear to be attempting the move towards operating at this level But it is not a simple move. Both the IT function and staff throughout the company will be involved in changing work roles and new skills acquisition. Organisational and culture change may also be necessary. It isthe range of factors that have to be managed that make this such a complex development. And it isa pivotal development. The Internal Integration of IT is the gateway to the higher levels. Organisations may operate successfully in any one oF combination of the last 3 levels, but will find it difficult to reach them without mastery of level 2. ‘The starting point for an organisation is evel 1, the localised use of IT within isolated business functions. Applications are aimed at replacing or speeding up existing manual operations. Early ‘examples included the computerisation of payroll DEGREES OF BUSINESS TRANSFORMATION Low LEVELS OF IT-INDUCED RECONFIGURATION 5. Business scope redefinition HIGH 4, Business network redesign 3. Business process redesign 2. INTERNAL INTEGRATION ) Le evels: RANGE OF POTENTIAL BENEFITS Revolutionary Evolutionary HIGH Figure 1: Levels of IT-induced Reconfiguration proposed by Venkatraman in the Corporation of the 1990s (edited by M.Scott Morton) and accounts. IT applications are not particularly related to the overall business strategy of the organization and the aims are cost reduction and efficiency increases. The chance of strategic advantage is low and once gained is short lived. Once companies have exploited most of the these Jocal, unrelated applications of IT, as many appear to have done (Brown, 1992), they need to look for ‘ther ways of using IT to gain company advantage. ‘The four higher levels describe ways in which more effective use is made of the data and information that can now be collected and disseminated relatively cheaply with the help of IT. The most valuable applications will be those that are mostly closely identified with the organisation's overall business strategy. Level 2 is the integration level and the focus of this paper. Subgroups within organisations start to use IT to facilitate the exchange of information that usually already exists but which had not been previously generally available outside the point of collection, Benefits accrue both from efficiency ‘gains and from the greater effectiveness achieved in current business activities. The MIT90s programme has called the move 10 level 2 evolutionary in contrast to the higher 3 levels, the achievement of hich is expected to require revolutionary change. But I suggest that the changes required of an organisation moving to level 2 are profound. The next sections of this paper will establish just how far reaching these changes can be. The major challenge is no longer to achieve technical connectivity but to manage the company 0 as to reap the benefits inherent in that connectivity. The complexity ofthis challenge has undoubtedly been one of the contributory factors to the poor return achieved from IT investment found in a number of surveys and tothe dissatisfaction expressed with the performance of IT in recent years (ATKeamey 1990, Axson, 1992, Willcocks 1992, Earl 1992) Levels 3-5 are concerned withthe more spectacular uses of IT, whero it has the potential 10 revolutionise company strategy and to gain great benefit. At these levels companies change their whole method of operating (process redesign), collaborate with suppliers and/or customers to reorganise operations 10 which they jointly contribute (network redesign) and create new products based on the use of IT (Business scope redefinition). Cases such as the airline reservation systems (Copeland and McKenney 1988) and the strategic applications of telecommunications 3s described by Peter Keen (Keen 1988) attest to the potential value of IT at these levels. It has been suggested that there are great risks associated with moving to the higher levels without mastering internal integration (Yapp & Macdonald, 1992) . Most successful applications at the higher levels will need the qualities that would begin to be developed at the integration stage. The successful organisation will need for example, an IT literate user population, access to wide ranging IT skills, a flexible organisation able to change wo suitchanging requirements. These skills ake time to develope and iis safer to develope them before using IT to make ‘major changes to company operation. As this paper will show these are the very qualities that become mificant at the integration stage. Mastery of integration isthe key to the sophisticated use of IT. 3 Internal Integration ‘Typically a common IT platform is installed and the organization secks to gain advantage from using this platform to achieve the internal integration of business activities across divisions and departments, The eventual aim is to achieve a seamless interconnection across the organisation so that any fone unit can call directly for information held in any other part of the company. Similar connections to external partners such as suppliers and customers achieve the same result for the exchange of information externally, No change to the basic business process is yet sought although unintended benefits can include the creation of new value added services. Email is a good example of the integrated use of ITT, Primarily a new method of communications, ‘under certain conditions it offers faster and more effective delivery of documents than was possible before. But there is no intrinsic change to the way jn which people work or to the substance of their ‘work as a result of this IT application, Email sends information by electronic means. It follows thatthe information must be available in electronic form before it ean be sent. The most frequent use is the exchange of textual messages, such as memos, letters, repons ete created by a word processor and stored electronically . These are transfered between terminals or PCs connected in 4 network via telephone or cable links. Compared to surface mail, it offers greater speed instantaneous delivery w anyone on the network imespective of distance), greater power of collaboration (simultaneous delivery of draft reports to.ahandpicked special interest group, each member cof which can edit, amend and recirculate by the sume means) increasing benefits asthe target group enlarges (there is no extra cost involved in adding "more recipients for one message) and cost reduction in tems of materials (paper, stamps et) and labour (Garrying and distribution). However itis less easy to handle text that is only stored on paper this way. Email is an excellent substitute for those telephone conversations that convey information where discussion is not necessary. Other useful facilities that usually come with Email are Diary management with the ability o schedule meetings and access to centrally held databases or libraries of core references such as telephone numbers. For many companies the most important benefit initially is seen as the speeding up of ‘communications and the reduction of administrative costs such as paper & postage. Later, increased productivity in activities such as the scheduling of ‘meetings and the ability to pinpoint exactly the ‘group of recipients for any message, become more ‘important, 4 The requirements for effective integration ‘The cost of installing a communicating IT platform across a whole organisation will be high. It represents a major investment and is not to be undertaken lightly. If it only serves a few application initially, traditional evaluation methods that assess projects in terms of cost savings or profit generation using discounting techniques will find it dificult to show a positive return, Total benefits are most certainly Jong term and a discounting approach tends to rule out projects with along term time horizon, Justifying the IT platform using this approach becomes difficult, Building is fan act of faith in the development of future applications. Such faith can be given substance by the creation of an IT strategy for the whole ‘organisation which establishes whether the types of bonefits brought by integration support the current and future business strategy. If for example it is considered important that the business moves towards product customisation then integration is almost certainly of potential great value. This is clearly a top management responsibility. It is they ‘who will need to oversee the creation of an IT strategy which supports their business strategy. It is they who will have to handle the mismatch between the need for a relatively Long term perspective in IT investment and the need for flexibility in their company’s responses changing external circumstances. 4.2 The process of developing and implementing applications ‘This can be considered in three parts: * Installation of basic infrastructure * Discovery and development of promising applications Implementation of new applications To obtain all or most of the potential inherent in integrating applications involves a change from the working practices employed at level 1, in each of these steps. 4.3 Installation of Basic Infrastructure ‘Communicability across the organisation, portability ‘of data and information and reliability of equipment are basic requirements. This means hardware and software compatibility, common standards for the \way information is held and appropriate support for all systems, ‘The IT platform must support communications between the interested groups, usually between all computers and terminals within the organisation. ‘This means compatible operating standards for all equipment on the network. The same requirement holds for extemal links. EDI did not flourish until 8 publicly available (TRADANET) system offered common set of standards. Any company can use itas long as it conformed to the standards set. The single most important factor inthe success of Email is the degree of connectivity achieved. A communicating group of users only fully reaps the benefit when all are connected to the network and are competent to use it. (Keen, 1991) Reliability of the communications pathway becomes highly significant once most staff use it in the ‘course of their daily work. PC’s that fail can be replaced with spares, provided data has been stored ‘on separate disks. But workstation servers or other ‘computers and their communications link that are accessed by many users for packages or data must perform to more or less 100%. When one company moved from batch processing to online access for all staff, it discovered that previous levels of (reasonably good) reliability were totally ‘unacceptable, Staff went home when the computers ‘went down, Similarly a fast, informed response to user queries Doth on hardware and software problems becomes cf equal significance when these are tools used throughout the day. ‘As more groups atempt to use common databases another factor comes into prominence. The language and symbols sed must be in terms understood by all groups, Eleeuonic data interchange of Invoices could not take place until both supplier and buyer had agreed on standard formats that both understood and could program into their computer systems. Portability of data and information can be simplified by the adoption of standard software packages. So for example one wordprocessing package used throughout the company should ‘ensure that all documents can be easily passed around for editing and additions. Even this can be defeated by the incompatibility of succeeding versions. However special requirements of particular departments will almost always defeat toil standardisation. Porability across the packages being used then becomes an important requirement ‘when choosing between contending packages Most organisations with considerable experience of TT from the last two decades inherit a central IT/DP department with stall skills orientated towards mainframe computing and large scale applications. ‘The range and speed of development of the new technologies has been too great for many. Consequently they lack crucial new specialist IT skill, AS equipment spreads throughout the organisation, adequate support for both the hardware and sofware becomes difficult from one cent location. User dissatisfaction with past performance coupled with their greater knowledge and understanding of IT is fuelling the debate on how best to deliver IT services. Integrated applications reinforce the need: for networking skills * for reliable systems for system development techniques that keep pace with the speed of business change for specialist IT support closer to the users, giving much faster response to problems and queries than traditionally offered, and offering greater identification Of user's business imperatives for access to new IT skills relevant to the work of the organisation 4.4 Discovery and development of promising applications Integrating applications make new connections both within and without an organisation. Hence ‘their value must be rooted in their contibution to dhe ‘organisation's overall business operations. The most significant benefits are likely 10 be ‘intangibles’ such as increased staff effectiveness at existing jobs through their improved access w relevant information. Cost savings, although likely t9 occur are mo longer the dominant factor. It is those applications that align with the organization's overall business strategy that offer the greatest value added potential. The discovery, design and evaluation of such applications becomes much more complex than at level 1. IT systems development at that level was often left to the IT department to propose and develope. This is clearly no longer adequate, The wider involvement of staff and ‘management in using IT at level 2 establishes the importance of their contributions inthe development of new applications. ‘The integrating application is designed to facilitate the complex interaction that must take place in producing the final business product. Potential is highest where a number of business activities are interconnected. Proposals could come from a wide range of staff. But in general itis from staff within the business not the IT department that we can expect the most informed view about what the business will benefit from most, However no one cean make useful suggestions from ignorance. If we accept the prevailing view that users know 100 Tittle boat the strengths and limitations of IT or more importantly the potential of IT to help them in their Jjobs Earl 1989, Price Waterhouse IT Review 1991, Hales 1991) then we will expect a low level of cffective suggestions from this source. Nor wll they find it easy to ensure that subsequent design decisions are in fine with business needs, Professional IT expertise is also important. At the Proposal stage it is needed to assess technical feasibility, estimate costs and design. At the evelopment stage it is needed to oversee systems development or package installation and continue modifying design. As discussed in the previous section, the relevant specialist expertise may be Jacking. But more crucially the IT professionals are likely to lack the relevant degree of business understanding. Now that the principle benefit of applications isin their ability 10 support staf, tis overwhelmingly important that the designers understand. what is important to these staff which means understanding the business objectives that they ae ying to meet. IT staff will not have much experience of the business issues involved and there is a considerable body of evidence to establish that most have litle or no understanding of the business they are in (Price Waterhouse IT Review 199192, Grindley 1992, Perring 1992, Windeatt & Knox 1991). So to develope applications at this level we need IT expertise, ofien in new IT technologies, combined with an understanding of the key issues for the ‘business and how IT can support this and creativity. ‘This is a range of expertise seldom found together. General education programmes aimed at all levels ‘and groups within organisations can help. These riced to be tailored to the needs of each group. But ‘one obvious partial solution, that of collaboration between users and IT professionals appears to have run up against grave difficulties. Many writers have established that the two groups communicate with difficulty. (Price Waterhouse _ Information Technology Review 1990/91; Grindley 1992, erring, 1992). ‘Traditional evaluation methods that assess projects in terms of cost savings or profit generation using discounting. techniques are ill suited to these projects. Costs are difficult to assess accurately and a discounting approach tends to rule out projects with a long term time horizon. Benefits are most certainly long term. Most organisations prefer to evaluate new projets in terms of retum in savings over the invesiment. The total costs are usually "underestimated, in particular the costs of disruption, training and change brought about by the new system, Balancing this are the “intangible” benefits, ‘hich seldom make easily identifiable savings and these benefits are often ignored. (Willcocks 1992) ‘Yet there is general agreement that the future of most companies lies in obtaining the right “intangible” benefits for their busines. ‘As the general aim of integrating applications is to bring groups into beter communication, they are almost certain to span division or department boundaries. This brings changes in group responsibilities and authority. The mostimmediately Contentious issue is often that of information sharing. Traditional organisational structures with functional or business unit divisions (or both) were not designed to facilitate cooperation or information sharing between parts ofthe organisation. Each unit for group was designed to do an individual job, as efficiently as possible, relatively isolated from the activities of other units. Sharing data therefore involves a major change in atinude. Iti necessary for top management not only to be party to the decisions with respect to this type of investment but in general each application needs a top level sponsor actively driving it. Top management support is crucial for a number of reasons. When an idea is first proposed it's potential can only be assessed in terms of what is important to the business - traditionally best understood by top management. Detailed estimates of total net benefit must ultimately rely on Judgments as to the increase of staff effectiveness - ‘a top management responsibility. The organisational issues raised by crossing departmental boundaries can only be addressed by top management. The problems inherent in twaditional IT resource provision can only be addressed by top managers. Top management therefore need some understanding of IT and it's potential for their business in order not only to pick the most valuable applications from competing proposals but also to provide the appropriate level of resource and to speathead the changes necessary for their success. Numerous commentators have ‘identified that there is a general lack of knowledge of IT at top management level. (Earl 1989, Brown 1992) 4.5 Implementation ‘An appropriate infrastructure, effective IT support ‘and a well designed system are not enough to ensure successful implementation. This totally depends on the staff using the application, Tt needs their commitment. Initially staff need to be able to use the system. For more effective use they need to understand it's purpose and may need to accommodate changes 10 their own and other colleagues work roles. Gaining commitment is not simple. For a group uunused to using IT there may be considerable scepticism as to the value of the IT application(s) fon offer. Substantial effort will be needed to convince such a group of the valve to them in their work, before they will invest the time needed to Tearn how to use it. Ensuring that all relevant staff can use a new application is more straight forward. Training in the basics, how to make the system work, which keys to press to obtain certain effects etc, should be ‘delivered to every potential user, before the system goes live. Although easy to organise this does require a reasonable amount of resource to be made available in terms of trainers and employee time. ‘More advanced training can address the issue of how to make the most effective use of the new facilities now offered. Ideally users are made aware of the aims and expected facilities of the new system as soon as design begins. For integrating applications some users will have contributed to the design, but for large scale applications like Email many more will need to be informed. Users can (and will) eventually begin to find this out as they use the system, but leaving it to individuals to reinvent the wheel is an expensive option. Early problems with Email, such as the exhaustion of Central permanent memory storage due wo email users failing ever to erase messages could have been reduced by a better understanding of what email is best used for. TT has been widely introduced to automate many different types of production processes in what could be classified as isolated IT applications. The potential to gain enhanced value by changing work practice and job roles has been discussed by many authors (Scott. Morton 1991, Zuboff 1988) ‘Automating existing manual practice has two important consequences: increased fragility and instant availablity of vast amounts of additional information. Both consequences may justify redefining jobs, which in tum may lead 10 ‘organisational restructuring, Integrating applications itensiy these existing tends as many more people bbogin to use systems both as tots and information retrievers, ‘Computerised production systems are ‘fragile’ in the language of the MIT9Os research programme (Osterman 1991). The consequences of errors increase sharply (over manual systems), The very elements that reduce costs and speed up the ‘production process, such as elimination of inventory ‘buffering, are the ones that render the system less robust o error and delay. Operators that understand the system and can respond to problems reduce the risks inherent in the situation. Integrating applications also increase risk for similar reasons. Zuboft in her investigations of IT used for process Control established that even when the prime aim ‘was the automation of manual work most IT applications spin off a great deal more information about the process than has ever been available before. The more the operators understand and use these systems to make decisions the more powerful the results can be in terms of productivity and quality and the greater the competitive edge of the company. Integrating applications are specifically ‘imed at disseminating information more. widely and are essentially justified by the skill with which this information is used to further business ends, This alters the middle management role Classically, when information was sparse and expensive to bain, middle managers handled what was available passing on what they considered necessary upward t0 senior management and downward to front line workers. Their jobs included checking for the way work was caried out andthe final output. ‘The necessity for all ofthese activities declines in an information rch environment. Front line workers can now obtain the relevant information and are in position to take decisions that previously management might have taken, Managers traditionally “are drivers of people..With our new technology environment, managers should be rivers of leaning" (Zuboff 1988). The key question then becomes whether the organisation is happy to let staff take and use the new information without the checks from more senior personne! previously thought necessary. If they are the value of "empowered" workers increases. This in tum enhances the potential value w be gained in restructuring the organisation, reducing the number of management levels, changing responsibilities at ‘many levels and perhaps embarking on some degree of culture change. One recently reported case of Email installation ‘where implementation is well advanced, changes can already be observed (Legge, Clegg and Kemp, 1991). In this case (Canadian Department of Information) the introduction of Email brought a geographically dispersed community of highly ‘rained experts into close communication. The ‘organisation was hierarchical (12 official levels) ‘with established rules of procedure for the transmission of reports and highly sensitive data ‘between the regions and the HO. Typically reports ‘originating with experts on local statistics in 1 region would need authorisation and interpretation through several levels before being transferred via equivalent no of levels to the similar expert at HO. Queries about the base data & its interpretation by the HO expert would have to return through the same route. All this took time. Many reports originated in a request from legislators who wanted immediate response. When Email was installed, Head Office experts began to use it to communicate directly with the regions’ experts, physically dispersed around Canada. Data and’ the crucial judgments on its interpretation were passed back & forth at speed with the final report being produced far more quickly than had been previously possible. ‘A favorable reaction met this result at the centre. But the regional management were not so pleased ‘as in the process the controls and checks of several levels of the hierarchy were being bypassed. Under such circumstances itis clear that the role of top management is crucial. Provision of extensive ‘education and training resources is their responsibility. They are best placed to provide the conviction as to the value of these applications, which is an essential ingredient of gaining staff commitment. Culture change, job role changes and organisational restructuring can only happen with the backing of the top management team, Such processes are not easy t0 achieve and will take time, Neither will they take place on any scale ‘without at least one member of the group, a sponsor, driving it forward. 5 Case examples of integration ‘The following two cases describe the experience of two companies in developing integrating applications using IT. The information was collected in interviews carried out within the ‘companies concemed. The first example at ‘Amerada Hess is well advanced in development but hhas not yet been implemented (at the time of vwriting). The company itself had had some prior experience of integration. The second example was in a company that lacked any previous experience (of integrated IT. The application described has been ‘implemented but there is as yet little experience in Ws use. Case 1; Document retrieval at Amerada Hess [Background ‘Amerada Hess develops ol fields, principally in the North Sea at present. One division, Projects bsiness, organises the design and building of each oil plaform. Each individual project generally lasts for a number of years from the establishment of feasibility to delivery of the platform to its final location, The current major project,Scott, is (at the time of writing) two and a half years towards completion. Projects business division manages the ‘whole operation, dealing with many contractors and employing a fluctuating group of staff as the projact progresses. The various components of the final platform are built a a numberof places throughout the UK and also in Italy and Spain, The final assembly takes place atthe oilfield, inthis case 100 miles North East of Aberdeen, Documentation at Amerada Hess “The Division erates and receives a large number of a range of different types of documents at widely dispersed physical locations. For most of these documents at last one paper copy must be retained fand filed. At the moment there are constant problems of acesss and retrieval ofthe information held in documents. A diverse group of staf may need 10 use the information held on any one document. Difficulties both in identifying where the relevant item is held and in actually laying hands on itcan lead tothe ercation of many copies or the acquisition ofthe same information fom a different source. Similar conditions prevail for the Head Office and other departments. The imminent move to new, centrally located offices with less space available for all deparments has also focused attention on the space taken up by paper document storage. ‘The new Documentation Management System (Ms) Currently staff obtain 90% of their information from paper and only 10% from the computer system. The aim of the new system is to increase the electronic retrieval of information but not to ‘destroy the paper record. Within the new system all types of documents (Spread sheet, text etc) can be stored electronically. Documents held in image form ‘can be retrieved and viewed on screen or printed ‘out. Documents originating from in house packages such as a wordprocessor can also be taken back to the appropriate package for further work, A document stored within DMS cannot be altered but it ean be used as the basis for creating a new document. Every incoming and outgoing document is to be indexed and stored within the DMS computerised system. One hardcopy is to be stored at the library and central file room or archived at a more remote location. Hardcopies can then be obtained either through the DMS or on request from the central library. The aim is to Improve access but not to replace paper. Powerful search facilites are being incorporated to speed up revieval. It will be possible to search on many different characteristics, including text strings. tis not clear who first proposed the application. ‘The need for it had been generally accepted around the organisation for some time. According to the project manager work started when technological developments made it feasible, ‘The DMS is clearly a new integrating application. twill make information already in existence more widely available within the department and ‘eventually within the whole company. But as yet it ‘does not aim to change working practices. A second phase of the project is planned which may do this. IT infrastructure Within the Division, there are 2_ permanent ‘members of staff responsible for all TT resources. ‘The IS manager, at the start of the DMS project, ‘came from the business side. He described himself ‘at the time of taking over as a "knowledgable user" with extensive experience of Personal Computers. Much of the equipment support and system development work is now carried out by agency staff, located on site, Projects business division is in the fortunate position of having clearly defined objectives (to build oil platforms) with a regular work cycle (the ‘time it takes to complete one oil platform) which allows it to start afresh at regular intervals. This has ‘0 far applied to IT resources in a beneficial way in that it has been able to reconsider all it’s needs at regular intervals. IT resources are handled as part of the total requirements of the next project independently from the central department, At the start of the Scott project the Division moved to new offices which houses all the project team members ‘apart from those located at construction sites. Here it was able to install an IT platform common to all the division staff including those members of the ‘management team located at contractor’ fabrication sites. Powerful microcomputers were installed, one for each member of staff. These were connected with an ethernet to form a LAN. This in tum was ‘connected via dedicated data lines to all fabrication sites. The importance of reliability and fast response times was emphasised repeatedly. The layout was designed to achieve this and the LAN is monitored continuously for performance. All members of the division are competent users. ‘Training in the use of available packages is given to ‘every one on arrival, if they need it. In addition to all the standard business packages Email is also used, having been installed over 2 years ago. Applications Development According to the project manager a number of factors contributed to making the project feasible. A user friendly interface was considered vital and the release of Windows made this possible. All ‘Amerada Hess applications including DMS will be installed under Windows giving a standard entry screen and common ‘feel’ in using them. The availability of software to handle text retrieval was another significant development. The other essential ingredients of a PC based LAN and image ‘capturing equipment has been available to Amerada Hess for some time. However the new system will clearly make greatly increased demands on all equipment particularly communicating capacity. A client/server configuration minimises ‘communications needs, but hardware capacity is to be considerably upgraded. ‘The system is being developed jointly by Amerada Hess and a software house. Amerada Hess pay for the costs of development. In return they profit from work already carried out by the software house and ‘obiain unlimited use of the final system, The software house retains the right to market the system to other clients. ‘The project was strongly supported by senior ‘management. There was a sponsor at Board Level. A steering committee chaired by the Sponsor with representation from all parts of the business met regularly to discuss user requirements as the system developed. This allowed the issue of access to documents 1 be dealt with at the highest level Concerns that sensitive documents would be dangerously accessible were voiced. It was not accepted that this was any more the case with the ‘new system than already obtained under manual retrieval. A policy decision was taken that all material will be available 10 all staff unless specifically classified by the originator. Without this agreement the value of the system would have been seriously undermined. Evaluation of total benefits was accepted as being difficult. The cost savings in storage space were quantified, The benefits of increased staff efficiency and effectiveness brought about by their improved access 10 pertinent information were considered impossible to assess. Top management “gut feel” was that these were considerable. Considerable effort is being put into both obtaining feedback from the potential user group and to preparing them for implementation. There could be ‘over 400 in the first phase. The Human Resource Management Department is collaborating with the project team in preparing taining material for the potential users of the system, A series of presentations has introduced the system to many users during development, so as to familiarise them ‘with its facilities and to obtain feedback. A user ‘group has been formed. A *Vision’ document explaining the system and its facilites has been ‘Published and distributed throughout the department ‘and head office. Its intended to create a "key user” for each work group whose job will be to act as ‘consultant on the system to all other members of the group. ‘There appears to be little expectation at present (prior to launch of the project) that work roles will change much within the department as a result of this project. Case 2: Technical Building Standards ‘Traditional approach to maintaining technical standards ‘A business unit in a large organisation is charged ‘with the responsibility of developing a series of sites wo a standard building format, The complete process involves location of suitable sites, the design and construction of an appropriate building and the maintenance of the result. The business unit ‘manages all projects but makes extensive use of ‘outside contractors. At any one time there is a set of drawings and specifications which establish the standards to which the building must be built, These standards and requirements change over time to conform for example with changing building regulations or to make use of new materials or to ‘meet the changing requirements of the eventual user of the building. However succeeding site developments will look very similar, differing only ‘due to the physical variations and changes to specifications standards Currently the business unit employs a group of professionals to maintain technical standards, but Contracts out the job of individual site design 10 a design consultant. Until comparatively recently almost all work was carried out with litle help from computers. The professionals were organised into six major disciplines such as architects, clectrical engineers etc. These all _ worked independently of each other. Each discipline developed it’s own documentation procedures. ‘There was neither an agreed common drafting procedure for drawings nor a common set of symbols, Standards were and are high within disciplines but little atempt was maide 10 establish cross discipline implications of changes. This was left to the (external) design consultant to resolve. ‘The number of changes made to the core set of technical standards each year is of the order of 500. Hence despite apparently having a standard building ‘model, the design consultant is generally forced to MAINTENANCE OF TECHNICAL STANDARDS cary out @ great deal of individual site design in forder to accommodate the changes made since the previous site development, in effect reinventing the wheel to some extent for cach new site. It scemed wii ‘clear that if the disciplines —_— Architects epall| temameniete. [Se Manuals of current technical standards for next site changes to cad r sooner, the implications \ ji‘ potetengestyeenl \ could be handled prior to the SS sak eae design consultant stage with fees alone, DESIGN CONSULTANT DISCIPLINES significant cost savings in Figure 2: The traditional process of maintaining technical standards at The Business Unit Proposal for the use of CAD on a LAN MAINTENANCE OF TECHNICAL STANDARDS: ‘Although the ingodection of INTEGRATED CAD workstation would ad the disciplines, this would oClP Ling areronet not in tei! solve the ‘ s ‘communications — problem. 2 ‘There were two issues to be ($f [Estetica | | Se sot expe eng —_ standards held || Sheaer's documents and the incommon |] complexity of multidisciplinary communications. A project was launched to establish a rigorous set of technical documentation standards and common set of terms and symbols, which would be DESIGN CONSULTANT used by all disciplines. At the same time, the ‘current set of technical standards’ Figure 3: An integrated approach to the maintenance of technical standards at The Business Unit ‘were translated into these terms using the chosen CAD system for the drawings and the chosen word processor for the text. This process is near completion. CAD workstations have been acquired {or all disciplines and are connected on a LAN. It is now possible for changes initiated by one discipline to be made immediately available on a ‘common set of drawings to all other disciplines, in terms that all can understand. This is a classic application at the integration level of IT development. Data that was available (the drawings and specifications) in one part of the company (one discipline) is being communicated in ‘a more timely and effective manner to another part Of the company (another discipline) using IT. The use was seen as in direct support of the business ‘objectives of the Unit, ie better buildings at less cost. The basic work process has not as yet been fundamentally altered. ‘The suggestion for it came initially from the business unit staff, and was at least to begin with resisted by the IT department which lacked the requisite expertise to handle it, The principle cost saving expected is in the simplification of the design consultant's job and hence the reduction of fees. TT infrastructure IT systems development and support for the Unit had historically been undertaken by the parent company's central DP department. At the start of the project existing systems concentrated around the need for financial information. Most applications resided on the mainframes or mini operated by the central DP department. However the Business Unit, ‘with some help from the central department, was also starting to develope a PC network running under DOS and a UNIX based workstation network for its own use, Communications links were being arranged between the mainframe and the two networks but were not yet working. A LAN of ‘communicating CAD workstations was specifically installed for the technical standards project. This is not yet connected to any other networks within the unit. ‘The level of IT literacy and awareness was generally low within the business unit broken by isolated islands of expertise. A building professional (architect) with considerable IT skills was brought in with specific responsibility for the project and a more wide ranging brief to overlook the use of IT within the Unit generally. With his comi department acquired an IT Champion. His perception of the central department was that it's skills were predominantly mainframe based, with litle resource or expertise available to support the UNIX and CAD applications thatthe Business Unit needed to develope. In addition experiences in attempting to procure equipment through the central department had not been happy. It had meant ‘automatic delay for lengthy assessment procedures and the likelihood that the chosen equipment would be tumed down in favour of other manufacturers ‘equipment In the Business Unit's view their need for speedy acquisition of equipment and. the hardware to support specific software packages was given to little weight beside considerations of the availabilty of in house expense, existing Purchasing arrangements (and. discounts) and Sandardisation within the company. AS a result the central DP department was perceived 3s having Tite understanding of the business imperatives of the Unit, Applications Development ‘The general lack of relevant skills in both the Business Unit and the DP department lead to the use of outside consultants. The project was coordinated and_managed by the Unit, but consultants experienced in both building design and the use of CAD were hired to translate the "current set of technical standards" into a standard agreed language on the new computer equipment. In fact it tuned out that the consultants knew less about the use of CAD than originally thought but were only t00 willing to learn what was necessary. The transfer to computer is near completion and will then be tured over to the Business Unit. The Business Unit now employs it’s own member of staff knowledgable in the CAD package to provide support within the department. The CAD project was strongly supported by the director in charge of the Business Unit. A number Of similar projects had been proposed, many of ‘which would improve communications between the Business Unit and other departments and. groups external wo the company, with which it works closely. Senior management in other areas did not judge these communications links 1 be as Significant as did The Business Unit director and hence litle progress has been made so far. ‘The project was justified in DCF terms on the hard” benefits of fee reduction to the design ‘consultant. The expectation is that all information will be passed to him or her electronically with only the job of applying the standard layout to the peculiarities of the site remaining. However ’soft” benefits of better quality control and hence higher quality of building are also anticipated. {As the project progressed, the numbers of PCs and workstations increased and IT skills and awareness training was offered to existing professional staff. However a major change is now being asked for in terms of working practice. Staff are being asked to collaborate with people that they have never previously talked to before, across strong ‘organisational boundaries. ‘The functional disciplines are organised into hierarchies, where work is to a great extent checked by the various levels in the hierarchy. The new developments call for team based working between the disciplines. ‘The existing checking procedures will complicate this process and slow it down. In the view of the IT Champion the future success of the project now depends overwhelmingly on the ability of the disciplines to work together in this new way. ‘An IT strategy group was established during the Course of the project, chaired by the director. Future developments in IT for the Unit are being more systematically planned and a small internal unit of IS staff charged with the responsibility of liaising with the DP department has been set up. More attention is being paid to staff exposure to IT. The director takes the view that one of the major barriers to the further use of IT is the lack of ‘commitment by staff within the Unit. 5.3 Integration issues emerging from the two cases ‘At Amerada Hess the basic infrastructure was already in place when work began on the DMS project. The need for good response times (and hence reliability) had already surfaced so that considerable effort was being devoted towards ‘upgrading capacity to match forecast demand. In contrast The Business Unit is still very much at the beginning of integration. It had no IT platform prior to this project and has had to install the hardware and software needed for this application. In doing 0 it had to obtain help from outside the company. ‘The technical standards application is a graphical ‘example of the importance of common standards for cffective communications, The harmonisation ofthe language and symbols used for technical standards had to be hammered out first before starting to build the computerised database of drawings and specifications. Effective electronic communication berween the disciplines could not take place until common standards had been established. Whereas this was not really a serious issue in the DMS application, Any information not already provided from standard packages could be captured off hardcopy by image scanners. ‘The proposal for the technical standards application hhad very clearly come from some of the business staff involved, Tt was in this group that the full significance of the interconnectivity of the functional disciplines was understood, ‘This application at The Business Unit brought out ‘a number of issues with respect to the central Data Processing department and it’s relationship with the Unit. The DP department had presumably found it difficult to keep pace with the increasing range of IT skills demanded. The two groups were so Jacking in understanding of each other's positions ‘that collaboration on this new venture apparently ‘seemed impossible. Instead the Business Unit hired consultants which it perceived as combining both the business and the IT skills that it needed. The consultants proved more willing to acquire the relevant new IT expertise. The growth of local IT ‘support started with this application in the person of fone member of staff within the Business Unit specialising in CAD. So we see the beginning of a change in the relationship between the Business Unit and the central DP department. An increase in the number and scope of integrating, applications ccan be expected to continue this process. For Amerada Hess problems with central IT provision would not arise as IT development and support had for some time been handled locally on site (the project offices). The division has approached system development in an interesting way. In fact it appears to have applied the same approach as it uses to manage the main project. ‘Much of the work is earried out by consultants or ‘contractors while the division project manages. This ccapitalises on the management expertise already available and is a fast way to oblain specialist IT expertise and to cover fluctuating demand. It is however highly dependent for success on providing ‘enough IT expertise within the division to recognise ‘what is required and to control the various contributing groups. Bringing together IT and business in the proposal and design of the application has been attempted in several ways; appointing a head of 1S with experience in both areas, ensuring a high level of IT literacy among the user group and organising extensive user input throughout the design period via the steering group. ‘Both departments appear to be moving towards similar organisational solutions for new IT developments and their support ie a small local ‘group of IT specialists managing a fluctuating ‘group of consultants and contractors. ‘Their approaches towards evaluation did differ. The Business Unit, the least experienced of the two, relied strongly on identifying significant quantifiable ‘hard’ cost savings - an approach more suited to level 1 applications than level 2, At Amerada Hess no serious attempt was made 10 quantify the total ‘benefit expected from the application, Management Judgement as to the gains expected from increased Staff effectiveness was accepted implicitly, as the best approach. Such an approach relies on ‘management's understanding of the general value of. TT to the business objectives. ‘Top level support has been provided in both cases throughout the development phase. Without this at ‘The Business Unit it is unlikely that much would have been achieved, Similar projects, connecting the Business Unit with other groups, but without senior ‘management support, languish atthe proposal stage. ‘AC Amerada Hess this seems to have been important in the defusing of at least one potentially divisive organisational issue, that of information shacing, ‘The Amerada Hess application impacts a potentially very large number of staf - hence its the extensive ‘aining programme. Alrady 2 levels of ‘communication can be observed. The first via "The Vision’ document aimed at telling everyone what the new application will do, The second via the ‘actual raining workshops scheduled 10 show all potential users how the system can be operated. ‘With TT literacy perceived to be at high levels, the ‘company appears confident that it will experience few problems in geting staff wo use the new application. Nor does it appear likely to change ‘working relationships to any great extent, ‘The Business Unit application affects fewer people but may have a more profound effect. The different functional specialists are expected to collaborate directly with each other, but the ‘taditional structure calls for considerable checking ‘and coordinating of their work through several levels of management within each discipline, If it eventually proves acceptable for each specialist to ‘operate without this level of supervision then the ‘organisational structure can flatten and further savings in time (both elapsed and staff) ean be ‘made. This will not be an casy change to make, Moving towards the integrated use of IT Some of the problems and issues raised by integration have been individually identified and analysed by a number of commentators. However they have in general been treated separately as if unrelated to cach other. The complexity that most ‘organisations face in moving towards integration, hnas been given less atention, Perhaps the most difficult step in creating an IT strategy aligned with the business strategy, is the initial one of recognising the necessity to do so. 1 have argued above that this becomes pressing at the integration stage. The experience of the Business Unit suggests that organisations can start 1 ‘develope individual integrating applications without ‘an explicit strategy but that there is almost an inevitability inthe development of the ‘organisational machinery to handle strategy once a serious atiempt at integration is made. Usually a high level steering committee is formed charged with the responsibility for IT strategy. Earl (Earl 1989) gives considerable attention to this important topic. Surveys such as ATKeamey’s (1990) and Price Waterhouse (1989) which found that few companies had an IT strategy may actually have established that at the time of the survey there were few organisations that had attempted the move to ‘integration and hence saw no need for such a development yet. Several proposals have been made for how to approach the design of such a strategy for an individual organisation, Most emphasise the need 10 establish the organisation’s business strategy and then to align the IT strategy with it. (Ward, Griffiths and Whitmore 1990). Some frameworks attempt to differentiate between types of IT projects and propose methods of balancing invesument between them. (McFarlane, McKenney & Pybum 1983, Poters. 1988). Both the value chain (Porter and Miller 1985) and Rockar’s critical success factors concepts can be helpful in identifying where the greatest added value can be obtained by IT investment. The strategic alignment model proposed by KH Macdonald is perhaps the first to uy w take jnto account a wider set of issues (K Hugh Macdonald 1991, 1992). It offers a method for aligning more than two factors. An iterative procedure is followed in bringing the four factors of business strategy, information technology strategy, information systems infrastructure and organisational infrastructure into alignment. This approach is clearly more suited for the potential complexity of integration. Earl has forcefully argued for the importance of firms identifying business change needs or opportunities first and then agreeing how to make these happen (Earl, 1992), The use of IT then becomes part of an integrated set of actions 1o be managed as a whole in achieving the business plan, To invest in an IT plavform and then establish ‘useful common package standards implies the need for some central long term planning of IT facilities (on behalf of the whole organisation. Organisations that are decentalising all IT facilities have no way ‘of achieving this. Conversely a completely centralised IT department finds it difficult to support a distributed set of users beginning to look ‘on software packages and their links to other users as a tool of the business. Maintaining the expanding range of skills neoded by modern Dusinesses internally may not be cost effective. ‘The most promising organisational trends appear to ‘be a form of federal structure with the planned use ‘of outsourcing for appropriate work. A central IT group offers specialist expertise as required and takes on such responsibilities as setting standards, ‘maintaining the network ete Further IT/IS support is offered on a distributed basis at physically dispersed locations and/or deparuments as ‘appropriate, An important ingredient of the use of extemal resources is that the core project ‘management responsibility remains internal, (/S analyser 1991, 1/S analyser 1990, Simson 1990, Bacon 1990, Earl 1989) A number of approaches tothe problem of bringing TT expertise and business understanding to bear on the development of new integrating applications are being explored. Most centre around some form of waining for both groups. Perring (Perting, 1992) ‘outlines a method of giving systems professionals the necessary business attitude. The concept of the “hybrid” manager introduced by Earl and supported by many others (The British Computer Society 1990) was that of a manager capable of working comfortably with both business and IT’ issues ‘Companies like BA have major programmes aimed at giving the appropriate education to all members ‘of both groups (Windeatt & Knox, 1991). Esso has had a planned policy of job rotation, in which both ‘business and IT personnel move between the business lines and the IS department, since 1986. Hales (Hales 1991) makes a valuable distinction between casual, routine and constructive users. He defines constructive users as those that understand how IT makes their job tick and might be deployed. ‘more effectively’ and identifies them as the most ‘important IT development resource an organisation possesses. Few exist at present but he suggests ‘ways to help existing users to join this group. ‘The most common approach to enabling top ‘management to develope the necessary ‘understanding of IT appears 10 be offering them short courses, seminars or workshops aimed at discussing existing cases in which TT has been used lo spectacular advantage. Highly tailored courses suited to their organisation's situation, which delve into more detail on the issues ‘involved in imegration can follow. Once the process. starts information can and is picked up from all sorts of sources; local IT champions, other senior managers, ‘consultants. However top management education is much less effective if undertaken in isolation. For maximum effect IT understanding needs 10 be developed evenly throughout the organisation (Earl 1989, Brown 1992) Various tempts have been made to improve both techniques of evaluation and estimation of costs and benefits (Parker, Trainor & Benson 1989, Peters 1988) But perhaps the most pertinent practical suggestion has come from Willcocks (Willeocks 1992) who sees evaluation asa method by which an ‘organisation continuously leams and improves it's performance. Evaluation exercises carried out both before and after project completion give the organisation information by which it ean not only improve future IT investment but also refine future rmothods of evaluation. Getting staff commitment to using IT, planning and implementing the changes to work practice, ‘organisational relationships and culture are part of the much more general issue of the management of change. The most difficult step is recognising the need to change. 7 Conclusion Organisations moving from the isolated use of IT to ‘a more integrated approach face a range of new problems. Existing arrangements may impede developments in ‘many ways. A strong departmental or profit centre structure often retards the process of sharing information. A highly centralised, relatively isolated IT department may lack both expertise in new technologies and the requisite understanding of the business. IT professional staff may find the changing type of collaboration required of them

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