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Management in the Age of Information

The information age is a new period of change, a shift from command-and-control organizations—the organization of departments and divisions—to an information-based organization. It's increasingly important to evaluate the organizational design of our IT groups and to determine whether change is needed. We must eliminate waste and increase production. We must face global competition with efficiencies and quality. But most importantly, we must look at the changes in our organization and adjust the IT group to best fit the needs of the new organization.

More and more organizations are reviewing their business processes and evaluating the need for changes to improve efficiency and quality. It's increasingly apparent that improved business processes necessitate improved information flows supported by information technologies. For example, if all members of a manufacturing process are involved in the design and development of the product, fewer design flaws are found and less rework is required. This yields a higher quality product at a substantially cheaper production cost.

It's challenging to view the organization as a series of processes and translate them into accepted business norms. It's even more difficult to modify existing stovepipe information systems to allow data movement across organizational borders. Often the challenge is not the technology, but the IT group's organizational design. Many IT groups cannot support the development of information systems for business processes that transverse multiple divisions. The IT group is divided into multiple sub-groups that support the organization's sub-groups. Teaming is the only approach that will allow cross-organizational business processes supported by integrated information systems to work.

I'm not advocating matrix management, but to develop information systems that support cross-organizational business processes, you must use cross-functional teams.

A business process is all tasks and sub-processes, wherever they may exist, that result in the creation of a service or product. For example, an automaker requires sales, marketing, engineering, manufacturing, administration, and so on. It's a total process that creates the car and prepares it for sale to motorists.

If the organization is based on vertical division lines, stovepipe information systems are a fundamental component of the information architecture. If the organization decides to restructure to compete in a global economy and to survive in the information age, it must modify its business processes and organizational structure as required. The IT group needs to evaluate its contribution to this change and also restructure as required. IT must "walk the talk."

I have three suggestions for IT groups ready for a change:

  • Draw many maps. Analyze the organization's business processes. Diagram the process flows. Map the data and applications that support these tasks and sub-processes (fundamental information engineering practices). Map the IT resources needed to support the business processes. The result is a cross-functional IT team that can build and maintain the information system that supports the business processes. Remember, the information system is now horizontal in nature, not vertical. This may seem simple, but it's a difficult concept for mainframe and client/server developers to accept.

  • Find owners. You must have a process owner at the organization level and at the IT group level. Yes, this sounds like matrix management. It is very close. You can still have traditional lines of authority with one boss, and participate as a team member. The key is cultural change in the IT group. The difference is that a process is almost forever, and a project ends. The IT process owner manages the technical and the information services (IS) area manager (network administration, applications development, and so on) manages the people. Performance reviews are prepared jointly, and the IT process owner's vote is worth more than the IS area manager's vote. Remember, results are the bottom line!

  • Develop processes for getting essential tasks completed on time. To make this all work you must have a fully functional customer request/problem report project-management system. Remember, if you're going to focus on processes for the organization, you must develop internal IT group processes for getting the work done. The work must be done right the first time and on time. If the IT organization is defined as processes, it can execute customer requests quickly and correctly because all the members of the team know what their job is and how to get it done. How many times have you requested a PC installation, find out that the unit is operational, and subsequently learn that the ID wasn't registered or the IP address is in use by another device on the network? These mistakes are a result of stovepipe IS.

The right organizational design for an IT group is one that parallels the organization. If the organization is a vertical structure with hierarchical management layers, the IT organization should be structured in a similar way and will most likely be dominated by host-based systems (no client/server). If the organization is a formal hierarchical structure, but uses information technology in a way that allows employees to communicate freely without pre-established management layer borders, I recommend cross-functional teams to develop and maintain cross-organizational information systems.

There are very few flat organization structures. Formal hierarchies are still required for most organizations to function. The use of information technology within the IT group and throughout the organization can start to eliminate the borders.

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