Designing and Managing
the Information-based Organization
New IT Paradigm
Open, user-centered network
computing
New
Business
Environment
Open, competitive,
dynamic, global
marketplace
New
Enterprise
Networked,
informationbased
organization
Designing and Managing
the Information-based Organization
New
Business
Environment
Open, competitive,
dynamic, global
marketplace
Productivity of Knowledge Workers
Quality
Responsiveness
Globalization
Outsourcing & Partnering
Social and Environmental Responsibility
Strategy Frameworks
• Miles & Snow’s Business Strategies
• Porter’s Generic Strategies
• Competitive Force Model
Business Strategies Miles and Snow
• Defenders
• Prospectors
• Analyzers
Generic Strategies - Porter
• Low Cost Provider
• Differentiation
• Focus
Competitive Force Model
Power, vigor and
competence of existing
competitors
(Intra-industry rivalry)
Power, vigor and
competence of
complementors
Power, vigor and
competence of
customers
(Customers)
The Business
Power, vigor and
Possibility that what your
competence of suppliers business is doing can be done
(Suppliers)
in a different way
(Substitute Products & Services)
Power, vigor and
competence of potential
competitors
(Barriers to Entry)
New Enterprise
PAST
FUTURE
Structure
Hierarchical
Networked
State
Static, stable
Dynamic, changing
Personnel
Managers
Professionals
Key Drivers
Reward &
Punishment
Commitment
Basis of Action
Control
Empowerment
Learning
Specific skills
Achieve team goals
Compensation
Position in
hierarchy
Accomplishment
Competence Level
Competing in the Global Marketplace:
The New Enterprise
Enabling Technology
The Promise
Internetworked
Business
“The Net”
Extended
Enterprise
Extended
Interenterprise
Computing
Enterprise
Enterprise
Infostructure
Integrated
Enterprise
Workgroup
Computing
High
Performance
Teams
Personal
High
Multimedia Performance
Teams
Effective
Individual
The Change
Wealth Creation,
Social Development
Recasting External
Relationships
Organizational
Transformation
Business Process
and Job Redesign
Task, Learning,
Efficience
Basic Organizational Forms
• Owner-Managed
• Functional, vertically integrated
– Machine bureaucracy
– Professional bureaucracy
•
•
•
•
Diversified, divisionalized
Matrix
Network
Virtual
Basic Elements of Structure
• Complexity
– Horizontal
– Vertical
– Spatial
• Formalization
• Centralization
Structural Contingency Theory
Strategy
Technology
Environment
Size
Organization
Structure
Organizing Framework
Strategy
Environment
Mgt Philosophy,
Values, Beliefs
Miles and Snow’s Business Strategies
Porter’s Generic Strategies
Porter’s Competitive Force Model
Organization
•Structure
•Processes
•Systems (Planning, Control)
Information
Technology
The New IT Paradigm

Mainframe Era to Distributed Era:
Management and Technology
IT Management Environments
Era
Mainframe
(1950s - 1970s)
Microcomputer
(1970s to 1980s)
Distributed
(late 1980s to
present)
Administrative
Framework
Target
Regulated
Monopoly
Automate
existing
processes
Free Market
Increase
individual/
group
effectiveness
Regulated
Free Market
Outsourcing
Industry/
Organizational
transformation
Justification
Efficiency
(ROI)
Effectiveness
Competitive
Position
The Old Vertical Computer Industry Circa 1980
sales and
distribution
application
software
operating
system
computer
chips
IBM
DEC
Sperry
Univac
Wang
The New Horizontal Computer Industry Circa 1995
sales and
distribution
Retail Stores
application
software
operating
system
computer
chips
Superstores
Word
Word Perfect
DOS and Windows
Compaq
Dell
Intel Architecture
Dealers
OS/2
Packard Bell
H-P
Mail Order
Etc.
Mac
UNIX
IBM
Etc.
Motorola
RISCs
The New IT Paradigm
Communication
Microprocessor
Technology
Technologies
Number of Transistors on a Chip
Millions of Transistors per Chip
100
Processor
1 8086
2 80286
3 80386
4 80486
5 Pentium
6 i686
7 i786
7
6
10
1
2
3
5
4
0.1
1
0.01
0.001
Source: Based on data
provided by the Intel Corporation.
1975
1980
1985
1990
1995
2000
2005
MIPS Forecast
MIPS
1000
i786
100
i686
Pentium
80486
10
80386
80286
8086
1
Source: Based on data
provided by the Intel Corporation.
1975
1980
1985
1990
1995
2000
2005
Price/Performance Trends
Cost per MIPS
$70,000
$70,000
$60,000
$50,000
$40,000
$40,000
$30,000
1992
1995
$20,000
$20,000
$7,000
$300$50
$10,000
$0
Mainframe
Mini
PC
Communication Technologies
2400 bps
9600 bps
14.4 Kbps
28.8 Kbps
ISDN - 128Kbps
ATM - 15Mbps up to 1.2 Gbps
Key Players in the U.S. Information
Superhighway
• Telecommunications Companies (e.g.
AT&T, MCI, Sprint)
• Cable TV
• Information Providers (e.g. AOL, Prodigy)
• Internet Providers
Expansion of the Internet:
Global Penetration - The Americas
High
Medium
Low
Adapted from Time Magazine, Spring 1995
Canada
Iceland
United States
Argentina
Chile
Costa Rica
Brazil
Colombia
Ecuador
Mexico
Nicaragua
Panama
Peru
Puerto Rico
Venezuela
Rating based on a ratio of people to
direct Internet connections, from
High (200 people or less to each
connection) to Low (5,000 or more
people to each connection).
Expansion of the Internet:
Number of Users (in millions)
Number of People with access to the Internet
120
100
80
60
40
20
0
Adapted from Internet Business Advantage, 1995
1969
1982
1993
1998
Expansion of the Internet:
Growth of Commercial Use
Number of businesses registered on the Internet
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
1991
1992
Adapted from Internet Letter, Vol. 2, No. 5, Feb. 1, 1995
1993
1994*
1995**
*Through August 1994
**Through March 1995
The New IT Paradigm
Network Computing
Past
System
Host-based
Future
Client-server
Host vs. Client-Server Processing
Host-Based Processing
Data
Management
Client/Server Cooperative Processing
Server
Computer
Applications
Mainframe
Distributed
Presentation
Distributed
Applications
Data
Management
Data
Management
Applications
Databases
Data
Management
Applications
Presentation
Data
Management
Client
Computer
Display Only
Terminal
Distributed
Presentation
Applications
Applications
Presentation
Presentation
The New IT Paradigm
Open Systems
Past
Future
Standards + Rules
(Architecture)
Limited
Vendor- Proprietary
Single,
Vendor-Proprietary
or Neutral
Information forms
Separate data, text
voice, image
Multimedia
Account Control
Multi/Vendor
Partnerships
Vendor-customer
Relationships
The New IT Paradigm
Revolution in Software
Past
Future
Software Development
Craft
Engineered
User Interface
Text
Graphical
Applications
Stand-alone;
Stovepipe
Integrated
IT & the Pursuit of Value Disciplines
Information
Technology
Enables
the Pursuit of
Strategy
Strategy
Business
Value
Supports New
Organizational
Paradigm
Organization
IT & the Pursuit of Value Disciplines
Operational Excellence
Product
Leadership
Customer Intimacy
IT and Operational Excellence:
Using Integrated Information for
Increased Visibility
Physical
ValueProcesses
Chain
Logistics
Inbound
Production
Logistics
Outbound
Marketing
& Sales
Integrated Information Foundation
Service
IT and Operational Excellence:
Emergence of New Business Models
Participant
Traditional Cut-Flower Industry Chain
Marketplace
Grower
Price charged
Markup
Participant
Jobber
$8.00
Wholesaler
$12.00
50%
Florist
$24.00
100%
$60.00
150%
Calyx’s & Corolla’s New Cut-Flower Industry Chain
Marketspace
Price charged
Calyx &
Corolla
$54.00
IT & Value Disciplines:
Operational Excellence
Focus
• Minimize cost
• Maximize efficiency
across the physical
value chain
• Doing business in a
different way
Measurement
•
•
•
•
Precision
Quality
Speed
Cost
Computing
Emphasis
•Core operating processes
•Building an integrated
information infrastructure
•Management processes
•Coordination processes
•Implementing new business
model
IT & the Pursuit of Value Disciplines
Product
Leadership
IT and Product Leadership:
Exploiting the Virtual Value Chain Through
Mirroring
Inbound
Logistics
Production
Prcesses
Outbound
Logistics
Marketing
Service
Physical Value
Chain
& Sales
Inbound
Production
Outbound
Marketing
& Sales
Service
Design
Virtual Value Chain
IT and Product Leadership:
Creating New Information-based Products
Inbound
Logistics
Production
Processes
Outbound
Logistics
Marketing
& Sales
Service
Physical Value Chain
New Products
New Products
New Products
New Products
IT & Value Disciplines:
Product Leadership
Focus
Create and rapidly
introduce new
products and
services
Ethic
• Creativity
• Risk
Computing
Emphasis
• Market and product
intelligence
• Design and engineering
tools
• IT-based products and
services
IT & the Pursuit of Value Disciplines
Customer Intimacy
IT and Customer Intimacy:
Creating New Customer Relationships in the
Virtual Value Chain
Logistics
Inbound
Logistics
Production
Production
Processes
Logistics
Outbound
Logistics
Physical Value Chain
Marketing
& Sales
Service
Virtual Value Chain
IT & Value Disciplines:
Customer Intimacy
Focus
• Tailor products
and services for
customers
• Make it easy for
your customers
to do business
with you
Ethic
•
•
•
•
Relationships
Empowerment
Knowledge
Customization
Computing
Emphasis
• Customer information and
analysis
• Creation of information
by-products
• Product configuration systems
• Direct communication
with customers
Organizing Framework
Strategy
Environment
Mgt Philosophy,
Values, Beliefs
Miles and Snow’s Business Strategies
Porter’s Generic Strategies
Porter’s Competitive Force Model
Organization
IT
•IT Architecture
•Structure
•IT Development & Implementation
•Processes
•Systems (Planning, Control) •IT Organization
Designing and Managing the InformationBased Organization
•
Teaching by the Case Method
• Preparation, Presence, Participation, Prompt
• Class Discussion
•
•
•
•
Course Materials
Weekly Assignments - Case Discussion
Individual Assignment - Case Analysis
Group Project