IT Impact on Business: Change Management & Structures
IT and Change Management
Change Management at Firms
Implementing technology makes the company change processes to take advantage of the new systems.
Organizational change implies removing some structures, procedures, or routines.
Main goals of organizational change:
- Increase profitability
- Increase market share
- Improve efficiency
- Enhance the quality of service
Change management implies the method to make the complex migration from an initial non-desired status to a final desirable one.
The Process of Change
Process: A group of tasks located throughout the areas that develop different specializations.
Task: The most elemental component for the activity of any firm.
Transfunctional process: A process that has a clear start and end.
Types of Processes
- Operational processes: Those that create, produce, and develop goods and services for customer’s desires.
- Management processes: They do not produce anything for the customer, but they are needed for the business to continue.
The concept of transfunctionality in the process and the coexistence of different types of processes at organizations is of vital importance when considering change.
Organizational Change
Organizations are continuously affected by changes in the environment that make them adapt and change.
Strategic changes must go from the highest levels of the company to the operational levels.
Organizational Design (OD) proposes a model of change based on participation. The main premise consists in considering that the first thing to change are the attitudes, values, and behaviors. It includes a structural approach and a personal approach.
Information Systems and Organizational Structure
Evolution of Firms
The evolution of IT has an impact on the organization of companies. Thanks to IT, companies have changed their structure, introducing new forms of inter-organization like outsourcing, teleworking, virtual organizations, and interorganizational systems (IOS).
The evolution of technology makes feasible improvements and leads to some changes, like more decentralized structures, outsourcing not only in production, and improvements in communications that enable cooperations and alliances.
Teleworking
It is a way of working where employees are not working in the office but in another place, usually their homes. It facilitates hiring talented employees that live in other cities and gives employment opportunities to disabled people, rural areas, and developing countries.
Outsourcing
These are processes where the company delegates all or some IT activities to other companies so they manage its IT resources. The objective is to let the company focus on its core business. The company loses control but gains flexibility and a reduction of cost.
There are two types:
- Resources outsourcing
- Service outsourcing
We can highlight some benefits of IT outsourcing:
- Strategic benefits
- Economic benefits
- Technological benefits
Virtual Organization
A network of independent firms that join together, often temporarily, to produce a product or service. The goal of a virtual organization is to provide innovative, high-quality products instantaneously in response to customer demands.
A virtual organization may not have a central office or organizational chart, so IT becomes an important element to get good communication between companies.
Interorganizational Systems (IOS)
IOS are information systems that are developed and used by more than one company. These systems go beyond the firm’s boundaries. The companies can be:
- Facilitators: Help with the development and use of IOS.
- Participants: They use the system to share information.
Some of the benefits are a reduction of cost for every company. Facilitators share the costs of the development of the IS, and participants have access to an IS without investing in developing it.