CONTENTS
MGT300 : INFORMATION TECHNOLOGY IN MANAGEMENT
Chapter 19: Developing a 21st Century Organization.
INTRODUCTION
BUSINESS DRIVEN TECHNOLOGY
We have to look everywhere, in every market and at every angle to find the next great invention. We know that business today have a biggest problem in competing and entering the new market. This is due to the expansion of technology in world today. Information technology or most probably known as IT have become popular and important in business arena. Hence, as a new organization in business world, we have to think differentially to attract customer. We need to make public interest in our products or services. The best example that we can see is the business decision make by Mattel.
GREAT BUSINESS DECISIONS – Mattel Decides to Introduce the Ken Doll.
Just ask Mattel who invented Barbie, one of the most successful toys launches ever. Barbie’s real name is Barbara Millicent Roberts and was the creation of Ruth Handler, wife of one of the founders of Mattel. Ruth observed her daughter, Barbara, playing with paper dolls and was inspired to make something a little more permanent. Mattel became a master at the Barbie industry, offering over 100 new outfits each year including executive, rock band member, and World Cup Soccer player. In 1961, the company decided to launch Barbie’s friend Ken, who soon became another one of the world’s best-selling toys. It was a truly successful brand extension, as Ken became Barbie’s partner for life.
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As we know, nowadays technology play importance role in business. Most of the company and organization today want to take opportunity to competing in the 21st century. The quality movement has taken business, industry, government and education to new levels of performance and awareness. Once they were accepted as tools that could improve profitability, quality teachings and practices have shown us that believing in separation can be a dangerous thing. Separation from the customer and the awareness of customer needs is disastrous. Believing that the marketing department is separate from new product design and engineering has driven companies out of business. With the quality movement emphasizing cooperation with suppliers, consultation with customers, breaking down barriers between departments, and participative management by employees, it has ushered in a new awareness and a new style which has forever changed the way we know that business must be done.
Seeing this kind of interconnectivity and interdependence has turned many businesses around in the last decade of the 20th century. But for success in the 21st century, for organizations to actually thrive in the new millennium, it will be up to the quality movement to provide leadership once again for making the next important steps.
If anything our world will be even more interconnected in the years to come, and continuous change seems to be the inevitable pattern. Let's look at some of the predictions futurists have given us such as people will be living well into their 90th years and the global economy will lead to a universal currency. We will be connected even more immediately than we are now by the incredible of information technology, with immediate access to people, information and services across the globe. There are no best practices to tell us how we will need to meet these challenges but if we have learned anything from the quality journey, it is that the ability to learn, relearn and change.
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DEVELOPING ORGANIZATIONS
Since the modern industrial revolution occurred in the early 1900s, many organizations face more changes and barriers in reaching their goal. Technology is one of the reasons driving these changes.
Organizations which will survive and thrive in the 21st century will have many changes and different characteristic in their organization in order to improve their performance. They must acknowledge the power of technology because technology keeps on changing the business arena.
21st century organization must :
ü Identify the broad power of technology
ü Carry out changes that the organizational required
ü Learn to operate in an entirely different way
A successful organization must not only be well-organized, but it also must be able to adapt. Organization which both remember and learn as a creative activity increase their survival odds, especially in rapidly changing environments. In order for an organization adapt creatively, it must have knowledge or memory, the ability to think or coordinate its memories and knowledge, and the ability to try and evaluate the results of a new behavior. Beside that, it must be able to in some sense understand the rules of its environment.
So in order to survive in the 21st century, organizations must recognized the immense power of technology, carry out required organizational changes in the face of it, and learn to operate in an entirely different way. The organizations must know how to grab the opportunities that arise in their business.
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How technology is changing business?
INDUSTRY | BUSINESS CHANGES DUE TO TECHNOLOGY |
Travel | The biggest leisure-travel agency now is Expedia.com. They gain higher profit margins. In 2002, most of the traditional travel agencies which are about 13% were closed because they are unable to compete with other online travel. |
Entertainment | Since 2000, United State music unit are down 20%. Online downloads are killing the traditional music business. It is expected that movie business will be the next big entertainment industry to feel the effect of online business. |
Electronic | The organization need to using the internet as its connection. Internet can link organization with its public. As the example, Dell dictates its profit margins have raised in 2003 compare to 2002 because they have link with suppliers and customers. |
Financial services | Processing online mortgage applications is now 40% cheaper for customers. It becomes a trend nowadays. Example of organization that using technology in its financial services is RHB bank. |
Retail | About less than 5% of retail sales occur online. One of the America top 15 retailers is eBay. |
Automobiles | SCM and Web-based purchasing make the cost of producing vehicle decrease. It keeps auto industry moving. |
Education and training | Many online universities emerge everywhere now. For example is the technology using by University of Phoenix. Beside that, by moving training sessions to the Internet, Cisco saved a lot of money in 2002. |
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21ST CENTURY ORGANIZATION TRENDS
Emerging information technologies (IT) will enable further development of some of the capabilities in an organization. As such technologies advance, the strategic issue of parity versus advantage will continue to arise. When the technology is new, advantage can be gained. As the technology matures, new players will need to adopt the technology just to maintain parity.
21st century organization trends consist of two sides which are on the business side and on the technology side. On the business side, it cares about the future of the business and the economic growth. It emphasizes on organization strategy and productivity. It also focuses on how to improve the business security. 21st century organization trends on the business side are:
- Uncertainty of future business and economic outlooks
- Emphasis on productivity enhancements and strategic analysis for reduction of cost
- Focus on improved business resiliency through the application of enhanced security
On the technology side, 21st century organizations trends are focus on improve its information technology in their management. Today’s organizations need to create alignment between business and IT priorities. In addition to targeting new market growth, organizations nowadays focus on defending their market positions. Organizations are focusing the four primary IT areas which are:
- IT infrastructures
- Security
- E-business
- Integration
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INCREASED FOCUS ON IT INFRASTRUCTURE
Information technology infrastructure or known as IT infrastructure is the combination of the hardware, software and telecommunications equipment that provide the underlying foundation to support the organization’s goals. Increase the focus on IT infrastructure is the main trend for the 21st century.
Business Strategy |
Organization |
Process |
Information Systems |
IT Infrastructure |
The original purpose of the Internet and the Web was for simple e-mail, document exchanged and the display of static content. It is not for damaging and dynamic business applications that require access to back-end systems and data bases. The basic Internet infrastructure in terms of protocols and standards was unsophisticated in the early days of the Internet, but software companies managed to enhance the Internet and offer compelling applications for functional business areas.
To help drive their business success, organizations today are looking to undertake high-profile strategic initiatives including SCM, CRM and ERP. Supply chain management or SCM involves the management of information flows between and among stages in a supply chain to maximize total supply chain effectiveness and profitability. On the other side, customer relationship management or CRM involves managing all aspects of a customer’s relationship with an organization to increase customer loyalty and retention an organization’s profitability. Enterprise resource planning (ERP) integrates all departments and functions throughout an organization into a single IT system so that employees can make decisions by viewing enterprise wide information on all business operations.
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The days of implementing independent functional systems are gone. View of all operations and departments are requiring to creating the strategic initiatives organization. For these reasons, ownership of the IT infrastructure now not becomes the responsibility of just the individual users or functional department but it becomes the responsibility of the entire organization. This is primarily because the information technology (IT) infrastructure has a dramatic influence on the strategic capabilities of an organization.
INCREASED FOCUS ON SECURITY
In the advance of technology today, security becomes a hot topic and concerns are widespread. The most serious concern that organizations have about putting their business on the web is security. Approximately 3000 business executives attend CTG seminars each year; when asked why they haven’t taken their business to the web, an overwhelming number cite security concerns. As organizations, opening up their application and network to public such as to the customers, partners and supplier will make their business get lots of benefits. However, at the same time security of information is of utmost important. It is important to have the appropriate level of authorization, accessibility and authentication. As a client enters a transaction, there are four main Internet security issues:
- Authentication of the user
- Integrity of the transaction throughout the network
- Authentication of the target web site
- Safety from intrusion into the corporate system
In business, access control and authentication help to ensure that only authorized individuals can gain access to the network, that they have access to only those applications for which they are entitled and that they cannot understand or alter information while in transit. Apart from that, the other common security features of an IT system are user password, network firewalls and virus protection.
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The first security issue is the verification of user’s identity. Today the most common form of identifying users is through password. Netscape, Microsoft, Raptor and others all have mechanisms for implementing password identification and locking access. Companies like Verisign create a unique digital signature from a password that is recognized and accepted by content providers. In general, security tokens are passed throughout the Internet. A token, whether it is compliant with DCE, SSL or some other standard, can be checked by all servers, allowing for limited access to each component in the enterprise. More sophisticated authentication includes hardware that can be inserted in the PC and generates a unique code that is synchronized with a server just for some seconds. In the future, recognition of voice, retina and fingerprints will enhance authentication.
With the advance in security, hopefully security breaches will not be happen. Lack of security causing profitable companies to lose market share and even force the companies to close operation. The breach of security not only cause lost of money but also inconvenience business users and their public especially their customers.
Organizations must take precaution steps before their security system been attack. It is now more important than ever for an organization to have a well security system in order to prevent them to be the victim of a security attack.
INCREASED FOCUS ON E-BUSINESS
Organizations today are increasing their focus on e-business. The technology advance in e-business can help to build an efficient and effective connection between organization and its publics. They can build good relationship among their suppliers, distributors and even with their customers in more easily and faster way.
Wireless and mobility are the new focus in e-business as it brings many advantages to the organizations. Some upcoming trends are mobile commerce, telematic, electronic tagging and RFID.
Mobile commerce
Mobile commerce or most probably known as m-commerce is the ability to purchase goods and services through a wireless Internet-enabled device. For example purchase goods using mobile phone. It can attract customer’s interest as it makes the buying process become faster. Customers with a busy schedule will use this type of business in order to save their times.
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Telematics
In order to improve business operations, most of the organizations use telematic in their business. Telematics is the blending computers and wireless telecommunications technology with the goal of information over vast networks. Internet is the most notable example of telematic. Another example is broadband such as P1Wimax and Celcom broadband.
Electronics tagging
Organizations are also advice to have an electronic tagging in managing their business. The only technique for identifying and tracking assets and individuals via technologies nowadays is by using electronics tagging. Some examples of electronics tagging are RFID, bar coding, smart card and computer chips.
Radio frequency identification (RFID)
RFID or radio frequency identification is the technologies that using chips and smart label that can store unique identifiers and relay this information to electronic readers. In business process, RFID can enable greater efficiencies within the supply chain. RFID can help organization to understand customer behavior and hence increase loyalty of the consumers. RFID readers also help retailers to manage their assets and inventories better.
These all subcategories within mobile business help organization to extend their operations, improved information accuracy, reduced costs, increased productivity, increased revenues and improve customer service. Mobile business will enable an organization to think about the powerful combination of wireless communication with the business process.
Improvement in technology especially in the network field has brought many changes in the business world than it was when introduced. This some upcoming trends extend wireless and mobile technologies not just for organizations but also to the consumer and industrial products.
INCREASED FOCUS ON INTEGRATION
In the technology world today, all organizations and companies use information technology (IT) in their business. The IT industry creates innovation and help organization to manage its operation more efficient and effective. The integration of business and technology has allowed organization to transform the way they conduct business, increase their profit and rise up their productivity.
With the existence of information technology, organization has managed its business strategy more successful than before. IT has created a market evolution and technological evolution. The culture and climate of the organizations also have changed. Most of the organization have achieved a standard processes. On the side of information systems, opportunity analysis has been created. The transfer of knowledge also occurred in the human resources department.
The integration of business and technology is shaping 21st century organization. Around the world, financial system with a new globally interdependent has arisen. These biggest changes have brought to the changing of core business relationship and models.
Overall, core business relationships and models are changing:
A new series of business success factors and challenges are emerging (1) organization agility, (2) focus on core competencies and processes, (3) redefinition of the value chain, (4) instantaneous business response and (5) ability to scale resources and infrastructure across geographic boundaries.
The integration of business and IT has change the environmental of business arena. The new environment required organizations to focus on their managing and operation system. In the new era of technology, this type of integration causes the high increase in the number of business competitors and yet creates a competitive advantage among them. The integrated business model results in the closeness among business partners. IT has become the most important thing in business. There will no more barriers between the business and information technology as the evolution of the business strategies occur.
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UNIT SUMMARY
In this chapter we defined information technology in the 21st century organization. We highlighted ways in which IT may provide competitive advantage, particularly in the area of operations management. We describe specific IT applications in new business development.
To competing in the 21st century, organizations must recognize the immense power of technology. Technology has changed the environment of business arena and hence required organizations to create a different way in managing their operation strategy. Examples of industries that have changed due to technology are travel, entertainment, electronics, financial services, retail, automobiles, education and training.
As overall, we can see that 21st century organization trends consist of two sides which are on the business side and on the technology side. There are four primary information technology areas on the technology side. They are increased focus on IT infrastructure, increased focus on security, increased focus on e-business and increased focus on integration.
In order to competing and success in the 21st century, organizations must develop their operation strategy efficiently and effectively. By increased focus on improved business management of IT, organizations can survive and still existing in the world of business.
REFERENCES
Alistercrowe. (2009). Chapter 19: Developing a 21st Century Organization. Retrieved January 17, 2012, from http://www.slideshare.net/Alistercrowe/developing-a-21st-century-organization
Baltzan P., Philips A., & Haag S. (2009). Business Driven Technology. Third edition. McGraw Hill International Edition.
Beckman S. L. & Rosenfield D. B. (2008). Operation Strategy ; Competing in The 21st Century (pp. 325-330). United States: McGraw Hill International Edition.
Business Driven Technology. (2009). Chapter 20: Developing a 21st Century Organization. Retrieved January 19, 2012, from techsci.msun.edu/wilke/BUS% Chapter%2020.ppt20Courses/.../&highered.mcgrawhill.com/sites/dl/free/0073376795/.../Chap020.ppt
John J. Bonovan. (1997). The Second Industrial Revolution Reinventing Your Business on The Web. United States of America: Prentice Hall PTR.
Mary Anne Moorman & Kevin B Kreitman. The 21st Century Organization: What it will look like, and How to make it happen. Retrieved January 18, 2012, from http://www.well.com/~kbk/AQPPPR.html
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