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Managing and Using Information Systems: A Strategic Approach – Sixth Edition

Keri Pearlson, Carol Saunders, and Dennis Galletta

Chapter 4 IT and the Design of Work

American Express Opening Case

• What is the “Blue Work” program? • What was the strategic thrust behind the Blue Work

program? • What are “hub,” “club,” “home,” and “roam”

employees? • What is the role of technology in these

arrangements? • What was the impact of Blue Work? • Have other firms found roaming employment

useful?

Work Design Framework

IT Has Changed Work

•IT has: •Created new types of work

• Bureau of Labor Statistics: IT employment in the USA is at an all-time high

• New jobs such as: • Data scientists/data miners • Social media managers • Communications managers

•Enabled new ways to do traditional work •Supported new ways to manage people

How IT Changes Traditional Work • Changes the way work is done

• Broadens skills; faster but more tasks • Sometimes IT disconnects us from the tasks • Sometimes people can perform more strategic tasks • Few staff are engaged in order entry any longer • Crowdsourcing is now possible at very low cost (M.Turk)

• Changes how we communicate • More asynchronous and more irregular • Social networking has provided new opportunities for

customer interaction • Collaboration allows a firm to look “big” with new tools

How IT Changes Traditional Work • Changes decision-making

• Real-time information; more information available • Data mining can identify new insights • Ideas can be gleaned from social networks • Middle management ranks have shrunk as Leavitt/Whisler

predicted • Changes collaboration

• Work is now more team oriented; more collaborative • Sharing is easier than ever, using multiple methods • Crowdsourcing can now provide quick answers from tens,

hundreds, or even thousands of people • We now can disconnect PLACE and TIME (Figure 4.2)

Collaboration Technologies Matrix

How IT Changes Traditional Work

• New ways to connect • Many employees are always connected • Lines between work and play are now blurred • For many, home technologies are better than work

technologies • New ways to manage people

• Behavior controls – direct supervision • Outcome controls – examining outcomes not actions • Personnel controls – pick the right person for the task • The digital approach provides new opportunities at any of

those three levels (Fig. 4.3)

Changes to Supervision/Evaluations/ Compensation/Hiring

Where Work is Done: Mobile and Virtual Work

• Much work can be done anywhere, anytime • People desire the flexibility • Telecommuting = teleworking = working from home or

even in a coffee shop • Mobile workers work from anywhere (often while

traveling) • Remote workers = telecommuters + mobile workers • Virtual teams include remote workers as well as those

in their offices, perhaps scattered geographically • Virtual teams have a life cycle (Figure 4.4)

Key Activities in the Life Cycle of Teams

Telecommuting: Global Status

•A poll of 11,300 employees in 22 countries: 1 in 6 telecommute

•When employees in 13 countries were asked if they need to be in the office to be productive: • Overall 39% said “yes” • But specific countries differed in the “yes” votes:

• Only 7% in India, but • 56% in Japan • 57% in Germany

Driver Effect

Shift to knowledge-based work Changing demographics and lifestyle preferences New technologies with enhanced bandwidth Web ubiquity “Green” concerns

Decouples work from any particular place

Workers desire geographic and time- shifting flexibility Remotely-performed work is practical and cost-effective Can stay connected 24/7 Reduced commuting costs; real estate energy consumption; travel costs

Drivers of Remote Work and Virtual Teams

Advantages of Remote Work Potential Problems

Reduced stress: better ability to meet schedules; less distraction at work Higher morale and lower absenteeism Geographic flexibility Higher personal productivity Housebound individuals can join the workforce Informal Dress

Increased stress: Harder to separate work from home life Harder to evaluate performance Employee may become disconnected from company culture Telecommuters are more easily replaced by offshore workers

Not suitable for all jobs or employees

Security might be more difficult

Some advantages and disadvantages of remote work

Virtual Teams •Virtual Teams: geographically and/or organizationally dispersed coworkers: • Assembled using telecommunications and IT • Aim is to accomplish an organizational task • Often must be evaluated using outcome controls

•Why are they growing in popularity? • Information explosion: some specialists are far away • Enhanced bandwidths/fast connections to outsiders • Technology is available to assist collaboration • Less difficult to get relevant stakeholders together

Challenges Virtual Teams Traditional Teams Communications • Multiple time zones can lead to

greater efficiency but can lead to communication difficulties and coordination costs (passing work).

• Non-verbal communication is difficult to convey

• Same time zone. Scheduling is less difficult.

• Teams may use richer communication media.

Technology • Proficiency is required in several technologies.

• Support for face-to-face interaction without replacing it

• Skills and task-technology fit is less critical

Team Diversity • Members represent different organizations and/or cultures: - Harder to establish a group identity. - Necessary to have better com. skills - More difficult to build trust, norms - Impact of deadlines not always

consistent

• More homogeneous members

- Easier group identity - Easier to communicate

Challenges facing virtual teams.

Managerial Issues In Telecommuting and Mobile Work

• Planning, business and support tasks must be redesigned to support mobile and remote workers

• Training should be offered so all workers can understand the new work environment

• Employees selected for telecommuting jobs must be self-starters

Managing the Challenges • Communications challenges

• Policies and practices must support the work arrangements • Must prepare differently for meetings • Slides and other electronic material must be shared beforehand • Soft-spoken people are difficult to hear; managers must repeat key

messages • Frequent communications are helpful (hard to “overcommunicate”)

• Technology challenges • Provide technology and support to remote workers • Use high quality web conferencing applications • Clarify time zones for scheduling • Information should be available for everyone (cloud storage can

help) • Policies and norms about use of the technology can be important

Managing the Challenges

•Diversity challenges •Concept of time differs throughout the world

• Anglo-American cultures view time as a continuum (deadlines are important; many prefer not to multitask)

• Indian cultures have a cyclical view of time (deadlines are less potent; many prefer to multitask)

•Team diversity might need nurturing: • Communications differences • Trust building • Group identity formation

Gaining Acceptance For IT-induced Change

• Many changes might be a major concern for employees

• Changes might be resisted if they are viewed as negative impacts

• Several types of resistance: • Denying that the system is up and running • Sabotage by distorting or otherwise altering inputs • Believing and/or spreading the word that the new system

will not change the status quo • Refusing to use the new system (if voluntary)

Kotter’s Model

Chapter 5 IS and Business Transformation

Sloan Valve •What was wrong with their Product Development Process?

•What did Sloan do? What is NPD? •Did it help? •Are all enterprise system implementations this successful?

SILO PERSPECTIVE VERSUS

BUSINESS PROCESS PERSPECTIVE

Silo (Functional) Perspective • Specialized functions (sales, accounting, production, etc.

• Advantages: • Allows optimization of expertise. • Group like functions together for transfer of knowledge.

• Disadvantages: • Sub-optimization (reinvent wheel; gaps in communication;

bureaucracy) • Tend to lose sight of overall organizational objectives.

Executive Offices CEO

President

Operations Marketing Accounting Finance Administration

The Process Perspective

• Examples of processes: • Fulfill customer orders • Manufacturing, planning, execution • Procurement (see below)

• Processes have: • Beginning and an end • Inputs and outputs • A process to convert inputs into outputs • Metrics to measure effectiveness

• They cross functions

Receive Requirement for Goods/Services

Create and Send Purchase Order Receive Goods Verify Invoice Pay Vendor

Cross-Functional Nature of Business Processes

How to Manage a Process

• Identify the customers of processes (who receives the output?)

• Identify the customers’ requirements (how do we judge success?)

• Clarify the value each process adds to the organizational goals

• Share this perspective so the organization itself becomes more process focused

Comparison of Silo Perspective and Business Process Perspective

Silo Perspective Business Process Perspective

Definition Self-contained functional units such as marketing, operations, finance

Interrelated, sequential set of activities and tasks that turns inputs into outputs

Focus Functional Cross-functional

Goal Accomplishment

Optimizes on functional goals, which might be suboptimal for the organization

Optimizes on organizational goals, or the “big picture”

Benefits Highlighting and developing core competencies; functional efficiencies

Avoiding work duplication and cross-functional communication gaps; organizational effectiveness

Problems Redundancy of information throughout the organization; cross-functional inefficiencies; communication problems

Difficult to find knowledgeable generalists; sophisticated software is needed

What do you do when things change?

•Dynamic and agile processes •Examples:

• Agile: Autos are built with wires and space for options

• Dynamic: Call centers route incoming or even outgoing calls to available locations and agents

• Software defined architectures (see chapter 6) •IT is required to pull this off well

Techniques to Transform a Static Process

•Radical process redesign • Also known as business process reengineering

•Incremental, continuous process improvement • Including total quality management (TQM) and

Six Sigma

Incremental Change • Total Quality Management • Often results in favorable reactions from personnel

• Improvements are owned and controlled • Less threatening change

• Six-Sigma is one popular approach to TQM • Developed at Motorola • Institutionalized at GE for “near-perfect products” • Generally regarded as 3.4 defects per million opportunities for

defect (6 std dev from mean)

Time

Improve- ment

Radical Change

• Business Process Reengineering (BPR) • Sets aggressive improvement goals. • Goal is to make a rapid, breakthrough impact on key

metrics in a short amount of time. • Greater resistance by personnel. • Use only when radical change is needed.

Time

Improve- ment

Comparing the Two

Improve- ment

Key Aspects of Radical Change Approaches

• Need for quick, major change • Thinking from a cross-functional process

perspective • Challenge to old assumptions • Networked (cross-functional organization) • Empowerment of individuals in the process • Measurement of success via metrics tied to

business goals and effectiveness of new processes

Workflow and Mapping Processes

• Workflow diagrams show a picture of the sequence and detail of each process step

• Objective is to understand and communicate the dimensions of the process

• Over 200 products are available to do this • High-level overview chart plus detailed flow

diagram of the process

BPM

• Information systems tools used to enable information flow within and between processes.

• Comprehensive, enterprise software packages. • Most frequently discussed:

• ERP (Enterprise Resource Planning), • CRM (Customer Relationship Management), • SCM (Supply Chain Management)

• Designed to manage the potentially hundreds of systems throughout a large organization.

• SAP, Oracle, Peoplesoft are the most widely used ERP software packages in large organizations.

BPM Architecture

Standardization vs Integration

Business Process Standardization

Low High

Bu si

ne ss

P ro

ce ss

te gr

at io

High Single face to customers and suppliers but standards not enforced internally

High needs for reliability, predictability, and sharing; single view of process

Low Decentralized design; business units decide how to meet customer needs

Tasks are done the same way across units, but there is little need for business units to interact

Source: J. Ross “Forget Strategy: Focus IT on your Operating Model,” MIT Center for Information Systems Research Briefing (December 2005)

Enterprise Systems (Enterprise Resource Planning or ERP)

• Seamlessly integrate information flows throughout the

company. • Reflect industry “best” practices. • Need to be integrated with existing hardware, OSs,

databases, and telecommunications. • Some assembly (customization) is required • The systems evolve to fit the needs of the diverse

marketplace.

ERP Advantages and Disadvantages

Advantages Disadvantages • Represent “best practices” • Modules throughout the

organization communicate with each other

• Enable centralized decision-making • Eliminate redundant data entry • Enable standardized procedures in

different locations

• Enormous amount of work • Require redesign of business

practices for maximum benefit • Require customization if special

features are needed • Very high cost • Sold as a suite, not individual

modules • Requires extensive training • High risk of failure

ERP II

• Makes information available to external stakeholders too

• Enables e-business applications • Integrates into the cloud • Includes ERP plus other functions (see Figure 5.8)

ERP and ERP II Functions

Customer Relationship Management

• Customer Relationship Management (CRM) is a natural extension of applying the value chain model to customers.

• CRM includes many management activities performed to

• obtain, • enhance relationships with, and • retain customers.

• CRM can lead to better customer service, which leads to competitive advantage for the business.

CRM

•Common systems are: • Oracle • SAP • Salesforce.com (web-based cloud system)

•Oracle and SAP integrate into their ERP systems

Supply Chain Management (SCM) • An enterprise system that manages the integrated

supply chain • Translation: processes are linked across companies • The single network optimizes costs and

opportunities for all companies in the supply chain • Every part of the supply chain has the latest

information about sales expected and inventories from source materials at all stages

• Bullwhip effect occurs when the supplier at each stage adds a small “buffer” for it’s suppliers in case demand is higher than expected

Difficulties in Integrated Supply Chains

• Information integration requires agreement of what information to share, how to share it, and the authority to view it.

• Trust must be established • Planning must be synchronized carefully • Workflow must be coordinated between partners to

determine what to do with the information they obtain

Advantages and Disadvantages of Enterprise Systems

The Adoption Decision • The enterprise system sometimes should drive

business process redesign when: • Just starting out. • Organizational processes are not relied upon for strategic

advantage. • Current systems are in crisis.

• It is inappropriate for the enterprise system to drive business process redesign when:

• Changing an organization’s processes that are relied upon for strategic advantage.

• The package does not fit the organization. • There is a lack of top management support.

That’s a wrap!

Dr. Les Stovall [email protected]

Slide Number 1
Chapter 4�IT and the Design of Work
American Express Opening Case
Slide Number 4
IT Has Changed Work
How IT Changes Traditional Work
How IT Changes Traditional Work
Collaboration Technologies Matrix
How IT Changes Traditional Work
Changes to Supervision/Evaluations/ Compensation/Hiring
Where Work is Done: Mobile and Virtual Work
Key Activities in the Life Cycle of Teams
Telecommuting: Global Status
Slide Number 14
Slide Number 15
Virtual Teams
Slide Number 17
Managerial Issues In Telecommuting and Mobile Work
Managing the Challenges
Managing the Challenges
Gaining Acceptance For IT-induced Change
Kotter’s Model
Chapter 5�IS and Business Transformation
Sloan Valve
SILO PERSPECTIVE �VERSUS �BUSINESS PROCESS PERSPECTIVE
Silo (Functional) Perspective
The Process Perspective
Cross-Functional Nature of Business Processes
How to Manage a Process
Slide Number 30
What do you do when things change?
Techniques to Transform a Static Process
Incremental Change
Radical Change
Comparing the Two
Key Aspects of Radical Change Approaches
Workflow and Mapping Processes
BPM
BPM Architecture
Standardization vs Integration
Enterprise Systems (Enterprise Resource Planning or ERP)�
ERP Advantages and Disadvantages
ERP II
ERP and ERP II Functions
Customer Relationship Management
CRM
Supply Chain Management (SCM)
Difficulties in Integrated Supply Chains
Advantages and Disadvantages �of Enterprise Systems
The Adoption Decision
That’s a wrap!