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The Impact of IT

Also check the Resource Pages and Topic Index for additional articles and resources on these topics.

This is an outline of a presentation first delivered in 1988, and which has been adapted and delivered to different senior management audiences over the ensuing years. While some of the details of the early presentations have changed the issues of alinging IT solutions with business, human and organisational factors are as relevant as ever. See our presentations pages for list of available presentations.

"Many of the impacts of Information Technology are straightforward. But they are not necessarily obvious, nor are they trivial" (Jack Nilles, Centre for Future Research)

Survey after survey has shown that many organisations are failing to grasp the opportunities that the continual improvements in information technology brings. This page outlines some of the key impacts of technology, taken from an executive presentation that has been delivered to audiences in a range of industries. It highlights the interactions between information systems and strategy, structure, culture, management processes, work, work environment and people. These interactions need the joint attention of business managers, human resource specialists, workers, and systems designers and implementers.

1. Why is this topic important ?

  • Many systems implementations do not meet expectations - or, even worse, fail
  • Many companies have missed strategic (competitive advantage) opportunities afforded by IT

The field is littered with cases of failures, or where introduction of new systems unwittingly altered key organizational processes. Awareness and planning of the issues will help to ensure smoother implementations and increase the overall benefits of information systems.

2. It's a Changing World

We are in the midst of a fundamental transition - from the industrial age to the information age.Yet most of our paradigms and behaviours come to us from the old world. Being so close to this means that we sometimes cannot see the wood from the trees.

  • Eras of Mankind: From physical processes to information ones
  • Industrial Revolution vs Information Revolution
    1760 - today; 1945 - 2000. It's happening 4 times quicker! (Makridakos)
    Note - the industrial revolution gave a performance improvement of 15. In computers that is happening every 7 or 8 years!
  • Today's changing business environment:
    Globalization :: Competition :: Consumer choice :: Demographics :: Lifestyles :: Knowledge intensive
  • The Organizational Response:
    Productivity :: "Customer first" :: Marketing :: Alliances ::
  • Key Needs - responsiveness and adaptability.

3. The Evolution of IT

Not just a response to the environment, but partly a cause of changes e.g. the Chairman of Matsushita says "without doubt the most powerful driver of all is technology".

  • Changing emphasis: Efficiency -> Effectiveness -> Strategic
  • Eras of Computing
    • Era 1: Accounting
    • Era 2: Operations
    • Era 3: End-User/Office
    • Era 4: the 'Wired Society' (Rockart)
  • or Computation - Communications - Cognition
  • 7 Key Technological Trends (there are many)
    - workstations: yesterday's supercomputer on your desk-top
    - portability
    - communications: global networks
    - multimedia
    - smart cards
    - object orientation
    - intelligent software agents
    Result = Total Connectivity
Implications - rethink dimensions of space, time and information (i.e. virtualization)
"any information, anywhere, anytime, anyway you want it" (Davis)
(once we get a few problems e.g. standards, sorted out!)

4. Impact on Business Strategy

These trends open up exciting possibilities for using the resources of space, time and information. In particular information can be made immediately available elsewhere in the organization, it is reproducible at low cost, and is reusable many times.

A strategy planning framework: strategic advantage vs. rethinking deployment of resources

Some examples:

  • US airlines - ticket processing in Bermuda (remote back offices)
  • Retail - distribution flows instantly linked to customer demand
  • Teleselling - round the clock!
  • Customer service: 0800 numbers routed overseas for responses
  • Electronic markets - even in second hand car parts!
  • Benneton - speeding up the value chain from New York to Italy
  • Emerging knowledge markets, such as Bright. (Update 2000: The Bright marketplace no longer exists.)

Today, much IT investment and thinking still going into getting on top of old problems. Some proportion needs to go into experimenting with these new opportunities. In the UK, companies like Direct Line have completely changed the shape of home and car insurance through their innovative approaches, while in Internet Commerce,, eBay and others are changing the rules of many traditional markets.

5. The Organisational Impacts

A similar evolution to strategy: efficiency, effectiveness, transformation. However, our understanding is not as advanced. We are into a complex world of individual and organisational behaviours - people are not as logical as computer systems!

We need a better understanding of:

  • Work - what it is, how it is changing
  • People - what they expect, how they behave
  • Work environments - do they get the best out of people?
  • Teams and Groups - how can they be made more effective?
  • Organization structures - hierarchies and networks, the formal and the informal
  • Organization cultures - the values and beliefs that drive behaviours

We shall look at some of these in more detail.

6. Work - more knowledge based, more varied and less structured

Simple cybernetics - as variety in the environment increases so does the variety in the response mechanisms need to increase to build an effective response. We can automate the routine and standard, but can only hope to offer decision support and similar tools for less structured work.

Why do many IT systems and BPR initiatives fail? Because the IS tradition is one of formalisation and standardisation vs. providing flexibility to changing needs.

  • Types of work - clerical, professional, technical, managerial, and (hopefully) strategic thinking
  • Differences in variety and routine, differences in IT support
  • From automate to informate to ?
  • How IT enhances information value activities:- creation; access; processing; storage; communication
  • Moving up the knowledge hierarchy - data to wisdom
  • Storage and access: plenty of data, little information!
  • Communications: also complex but some evidence of what is more effective. The communications hierarchy - from simple electronic mail to world-wide computer conferencing. [Note - there is a whole separate set of slides on the role of IT on business communications]

The main organisational challenge is to understand the nature of the work that is happening in various groups, and therefore what style of IT support is needed. Too often we automate what we think is routine, but our inflexible systems cannot adapt as the 'routine' changes.

7. Changing Organisational Structures

The hierarchy served us well in stable times. We still need the hierarchy for some aspects of management, but not for information flows.

  • More automation of routine + more knowledge work
    = downsizing + diamond shaped + flatter hierarchies = the networked organisation
  • Structure is about differentiation - integration
    Differentiation = specializing in skills
    Integration = pulling them together
    Need both - but segmentalism builds barriers
  • Best structure for non routine work is team work
    Therefore structures to meld teams and to co-ordinate different teams
  • IT networks are a powerful mechanism
  • Many examples within large corporations - multi-disciplinary teams, multi-location teams, ad-hoc and changing teams (boundary busting)
  • Todays networks are but stepping stones to neural nets.

IT enables adaptive structures. Think of organisations as neural systems, with sensing mechanisms, information and knowledge flows and responses to stimuli (e.g. customer demands). Our research has shown that too often the organisational aspects of new systems are ignored - job design, team composition, skill requirements all change.

8. People at Work

"People are our most important asset" - If so, then treat them as such!

Sociologists and psychologists can tell us a lot about people. Systems designers often ignore them .. which perhaps is not surprising if a systems design team has no psychologists or human needs awareness!

  • People are not standardized - they are different!
  • People want to be involved
  • Individuals and Information Technology:
    A good system addresses
    - working conditions
    - ease of learning
    - skill enhancing
    - a sense of control
    - feed-back
    - variety
    [items from a check list on system usability]
  • Involve users early
  • Accommodate individual differences:
    - in work-style
    - in personalities
    - in learning strategies

The basic principles of socio-technical design were established in the 1950s. Today they are too often ignored! We need to move from systems engineer designed systems to user centred design approach. This is not designing systems for the user, nor letting the user design their own, but designing systems together in co-operation. There is a wealth of information from the HCI community on this aspect of systems design.

9. Flexible Work Practices

Demographic and lifestyle changes are changing the shape of the firm - more contracting out, more temporary staff. IT can help with flexible work practices in several areas:

  • Remote working ('front office and back office in different locations)
  • Teleworking - from home, from other locations, from hotel rooms etc.location independence
  • Flexible offices - optimising space and facilities to meet tomorrow's needs, not yesterdays!
    Note that technologies such as CTI (Computer Telephony Integration) create opportunities for location independence within a building.

10. Working Environment

Traditional offices were designed for people and paper. More recent offices were built for information systems, computer rooms, cabling etc. But now we must rethink the office again - and shift from homogenised work spaces to heteregenous 'environments' for different types of tasks and socialisation e.g. for creative work, customer liaison and co-operative work.

This means more 'environments' (e.g. fully equipped meeting rooms and less personal space. Architects, designers, furniture specialists and ergonomics specialists are all part of the systems team!

11. Integration - Across IT, HOF and Strategy

Integration is the nub of the issue. If it were so simple we would have done it long ago!

We have developed a useful integration model that can be used in multi-skilled team development:

  • Integration of Business needs, information systems and HOF (human and organisational factors)
    i.e. strategy/operations - technical - social.
  • The integration wheel - from generic to specific
  • Many types of integration and integration processes
  • Depends on purpose and perspective
  • Don't get locked into one part of the model - move around the sectors, and outwards, as well as inwards.

The best way forward for any organization is to go through a process of developing their own integration model or business architecture.


The impact of IT on organizations, or parts of organizations, depends on many factors including:

  • Organizational culture
  • Stability of Business Environment
  • Nature of Product and Service (e.g.. how information intensive)
  • Degree of routinization of work
  • Overall intensity of information technology usage

The main impacts are:

  • People - their work, their feelings and motivation
  • New ways of working and work environments
  • The effectiveness of work-groups
  • New communication patterns - changing people's and management's roles and power
  • Organization structures - IT helps knowledge networking; it also allows significant restructuring for standard operations (e.g. BPR)
  • Integration - across functional and geographic barriers
  • New strategic possibilities exploiting information, time and space (e.g. Internet Commerce)

David J. Skyrme

This is one of a series of presentations that can be delivered to executive audiences. We also offer strategic consultancy on issues covered in this presentation. Please contact David Skyrme with details of your requirements. Email: . Tel: +44 1635 25 35 45.

Related topics on these pages are the following Management Insights: No. 5 The Impact of IT on Organizations, No. 6 The Hybrid Manager, No. 7 Getting to grips with Groupware, or see full list. There is also a Discussion Paper on the Future of IT and its implications.

Further Information (1999)

These developments are covered more fully in Chapter 1 of Knowledge Networking: Creating the Collaborative Enterprise. The developments are monitored and reported at the accompanying website for this book.

Management Insights are publications of David Skyrme Associates, who offers strategic consulting, presentations and workshops on many of these topics.

Additional coverage of these topics can be found in our free monthly briefing I3 UPDATE/ENTOVATION International News, various articles, publications and presentations.

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