Digital Impact | Changes to the Organizational Model

Technology changes how we understand an organization, moving from the more abstract structural models of yesteryear to a dynamic, process-driven understanding of how an entity executes the strategy.

Summary: Technology changes business at its foundation; this must be the case in order for turnaround information systems to become integrated with the business strategy, and for the business strategy to leverage the information system to the greatest extent possible.

NEEDS ANALYSIS HELPS INFORMATION SYSTEMS PENETRATE TO THE BUSINESS CORE

In the early days of systems development, needs analysis was shunned. Programmers would set to work without any depth of understanding with regard to real business needs.* This has changed significantly, and now needs analysis has risen to the level of any other stage in information systems development. Methods have been refined to the point of graphic representation. We do not draw pictures in the same sense that a cartoonist might draw a car, or a face. But we do draw diagrams of the information structure, and how it will forward the business process.

Graphical modeling techniques have advanced well beyond flow charts and the three Paleolithic-looking lines that connote a database. We present a business-level view of proposed systems that are designed to be legible for a non-technical audience. The system can then be understood and debated from day 1, enabling rule-making and consistent implementation of those rules. The models used today provide sufficient discipline to optimize the problem and avoid obvious traps while rendering the specification process transparent to users. (Not all companies choose visualization, and some implementation specialists do not emphasize communicative tools enough. But these tools are out there, and many companies find them helpful.

*Maybe features, but no depth. There was this iterative process. It was hey, let’s tell programmer what we need done. Or they didn’t even have technology skills, they just said they did.

—Learn how a transparent specification process leads to user buy-in and widespread adoption.

The best justification for visualization of information systems comes from the way graphics can so easily break apart assumptions of the past, which can trap the organization in legacy systems thinking. For example, most execs intuitively use the organizational model as a go-to when thinking about information systems. We can even see this line of reasoning breaking down in the name, Customer Relationship Management (CRM).

CRM nomenclature has always merged sales, marketing and services. These divisions all fall under the heading, customer relationship management. However, the name falls short of describing the full range of business processes automated and analyzed by CRM in 2016. Operations and accounting are two functions that can be helped immensely by CRM.

It is no longer sensible to set the boundary of a system using organizational, or even geographical limits. Information systems that provide enterprise with real commercial advantage are shared between functions, geographies and industries. Look at GE’s Predix platform to see how IT permeates boundaries and in fact gains use value as organizational boundaries break down.

Information systems provide competitive advantage today through cross-organizational sharing. In efficiency terms, boundary-defying IT leads to more integrated, automated, and more timely operations. Vertically integrated software will help industries gain efficiencies, and the greatest potential lay in make-to-order manufacturers. A customer can order a product at retail and have the components on the factory floor within minutes.

A BETTER APPROACH TO BUSINESS MODELING

The organizational model of an enterprise is not adequate as a foundation for the conception and definition of strategic information systems. In fact, it leads to severe limitation on value in cases where function and data are shared.

A better approach to business modeling separates the organizational elements (divisions, customers, products, employees) from the business process. That is, what events (ie. customers/orders/market development) trigger what business functions, and what information is required for each function to transpire.

Diagrammatic models can give an accurate representation of these different perspectives on the business, and multiple viewpoints are necessary to see the entire elephant, not just the haunches, the tail, and whatever Barbara is holding onto. To learn the internal, external and constructional arrangements, we must see systems from several different points of view.

Great information systems requirement analysis breaks free from traditional business models and sees information as the driving paradigm for business design. How interesting that this way of thinking, when pervasive, can shift the entire organization to a new level of competitiveness, and ultimately, success.

–Read more about how Operations and Accounting benefit from CRM Customization

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