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Management Information Systems

Notes Organizations are composed of five major components: IT, organizational structure and corporate
culture, management and business processes, organization’s strategy, and individuals and roles.
These components are in stable condition, called equilibrium, as long as no significant changes
occur in the environment or in any of the components. However, as soon as a significant change
occurs, the system becomes unstable.

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Caution It is necessary to adjust some or all of the internal components since all are
interrelated.

1.3.1 IT and Organizational Design

An important and fast growing technological innovation during this century is computer-based
information systems. Computer-based information systems (CBIS or only IS) provide an
opportunity for businesses to improve their efficiency and effectiveness, and even to gain a
competitive advantage. IT is also a catalyst of fundamental changes in the structure, operations
and management of organizations. Most businesses in the industrial world could not compete,
and many could not even survive without computers and software. Now IT is an integral part of
the products and services delivered to customers.
Competition leads to environmental uncertainty and increases both the need for and the rate of
innovation adoption. By adopting IS, businesses will be able to compete in three ways:

 IS can change the industry structure and, in doing so, alter the rules of competition;
 IS can also create competitive advantage by offering business new ways to outperform
their rivals; and

 IS spawns new businesses, often from within existing operations of the business.
1.3.2 IT-enabled Organizational Transformation

There is a growing body of conceptual papers and case studies on IT-enabled organizational
transformation in the information systems literature. Most of the studies suggest that the use of
IT without concomitant organizational changes is unlikely to yield significant gains in terms of
organizational performance.

1.3.3 Four R’s of Business Transformation

Business Transformation can be defined as “The orchestrated redesign of the genetic architecture
of the corporation, achieved simultaneously – although at different speed – along the four
dimensions of reframing, restructuring, revitalization and renewal.” By this definition a
biological model has been developed that we call the Four R’s of transformation are:
 Reframing is the shifting of a company’s conception of what it is and what it can achieve
with new visions and a new resolve.

 Restructuring is a girding of corporate loins, getting it to achieve a competitive level of
performance by dealing with the body of corporation and competitiveness. The need to be
lean and fit is the primary consideration.
 Revitalization is about igniting growth by linking the corporate body to the environment.
 Renewal deals with the people side of transformation, and with the spirit of the company.
It is about investing individuals with new skills and new purposes, thus allowing the
company to regenerate itself.

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