Organizational Environment and Information Systems

8/13/2019 Organizational Environment and Information Systems

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Organizational Environment andInformation Systems


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Technology convergence has given new shape and

style to business environment where the success

of investments of an organization depends on

its ability to manage information technology (IT). This

necessitates a shift in the organization culture and

climate that must begin with senior management and

extend through the entire organization. In fact, an over-

emphasis on IT at the cost of human involvement andcommitment resulted in major implementation failures

of business process re-engineering initiatives to the

tune of 70 per cent(Malhotra, 2000). An earlier study

by Malik and Goyal (2000) indicated lack of alignment

between information system (IS) and functional units

and between functional units themselves.

In the light of the above discussion, it becomes

imperative to evaluate and improve the organizational

climate and readiness for effective use of IS. In this

paper, we present a model that takes up climate from

the multi-dimensional point of view, viz. adaptive,

collaborative, and evaluative and apply it to the Indian

automobile industry. The results indicate a level of

effectiveness at less than moderate, lack of adaptive

nature, mild collaborations, and ad hoc evaluation

process.

INFORMAINFORMAINFORMAINFORMAINFORMATION SYSTEMSTION SYSTEMSTION SYSTEMSTION SYSTEMSTION SYSTEMSEFFECTIVENESSEFFECTIVENESSEFFECTIVENESSEFFECTIVENESSEFFECTIVENESS

Andreu, Ricart and Valor (1998), Baets (1996), andCortada (1995) suggest that IS must be closely linked

to the business strategy that is changing in response to

the dynamic business environment. This

synchronization cannot be achieved without having

well-established set of processes to carry out any IS

project as well as continuously practised mechanisms

to identify its weak points and to ensure that it is truly

contributing to the business goals. If the company

needs to focus on customer service, then IS must

support it. If identification of new markets is the

business priority, then IS should be in a position tosuggest avenues. Thus, an IS is effective when it is

beneficial for the organization as a whole and not for the

individual units/sub-units only.

For organizations who have successfully reaped

the benefits from IS and technology, it has been an

ongoing exercise of alignment and cultural change

rather than a one-time investment affair. It is the

manner in which they identify, adopt, and use IT that

makes them get higher returns from the same.

Recent studies (Cortada, 1998; Lucas, 1999) offer

interesting insights into what possible steps can be

taken to strengthen the use of IT in organizations. They

indicate that best-run organizations have aligned their

IS with business strategies. They consider IT

infrastructure as an asset rather than a liability. IT

plans are a part of business plans. Thus, organizationshave monthly reviews of how they are doing against

plans. These evaluations or reviews stress the

importance of corporate strategy and vision and focus

on the portfolio of IT investment opportunities.

Leading IT organizations like Cigna, IBM, and GM

indicate that the relationship this alignment fosters

with end-users is highly collaborative. Further, Dos

and Peffers (1995) derive from their study conducted

on 3,838 US banks that early adoption of technology is

positively related to the lasting benefits. Early adopters

of Automatic Teller Machines (ATMs) in the 1971-73

period were associated with larger market shares from

1979-83 which was sustained through 1983. However,

for banks adopting ATMs after 1973, there were little

significant benefits. Up to 42 per cent of variance in

performance was associated with early adopters. Even

assuming there is no direct visible return, sometimes,

IT is the only option left for survival in a competitive

scenario. For example, Southwest Airlines in Phoenix

had to make its presence felt on the web to remain

competitive. Barnes and Noble, the largest US bookretailer, was forced to sell books on the web after

Amazon books had a major success. However, the key

to success is business innovation in addition to

technology adoption. It is well known that the majority

of IS do not fully meet expectations due to strategic

problems, organizational change, supplier problems,

technophiles, poor management, user skills,

technophobia, lack of participation, and poor control

systems (Harris, 1997). Thus, a wide range of factors

individually or collectively affects the viability of IS

deployed. However, it is clear that the majority ofthese factors relate to people. It is worth emphasizing

here that technical aspects are in a sense less important

than user participation, involvement, and ownership

of systems. With a positive attitude from all the

stakeholders, the technical problems can be rectified.

To achieve a win-win situation and remain market-

facing organizations, collaborations and alliances at

inter-and intra-organization level are necessary which,


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in turn, require trust between the parties involved

(Libovitz and Rosansky, 1997; Pasternack and Viscio,

1999; Diese and King, 2000).A collaborating intention

is the most suitable to fully satisfy the concerns of all

the parties. In collaborating, the intention of the parties

is to solve the problem by clarifying differences rather

than by accommodating various points of view. It is a

state of assertiveness and cooperativeness (Robinson,2001). Further, Weber and Pliskin (1996), Eldon (1997),

Cortada (1998), Lucas (1999) and Ravichandran and

Rai (2000) emphasize the need to cultivate an

organizational climate for sustained effectiveness of

IS. Therefore, the need to integrate effectiveness of the

process involved in the genesis of an IS product cannot

be ignored.

Every IT enabled business organization must have

ways to evaluate IS in order to leverage the best out of

such investments and to sustain continuous support

towards business goal achievement. This evaluation

cannot be ignored or compromised as the investments

involved are high; effective life time is less, and the

impact on business is tremendous. Finally, no laid out

processes are workable; no feedback is constructive

unless there is a culture to enable all this. To summarize

the essence of an effective IS, a simplified framework

can be depicted as in Figure 1. As already discussed,

there is a need to cultivate the climate of the

organizations so as to deploy the best-suited technology

and also reap maximum possible returns. We suggestan Adapt-Collaborate-Evaluate (ACE) Model to

establish the organizational environment that is healthy

for the grooming of effective IS.

ACE MODELACE MODELACE MODELACE MODELACE MODEL OF ORGANIZAOF ORGANIZAOF ORGANIZAOF ORGANIZAOF ORGANIZATIONTIONTIONTIONTIONENVIRONMENT EFFECTIVENESSENVIRONMENT EFFECTIVENESSENVIRONMENT EFFECTIVENESSENVIRONMENT EFFECTIVENESSENVIRONMENT EFFECTIVENESS

This model can be applied to establish and evaluate

the organizational environment which would be

effective for efficient use of IS. The structure and

application of the model is explained as follows:

Structure of ACE ModelStructure of ACE ModelStructure of ACE ModelStructure of ACE ModelStructure of ACE Model

The effectiveness of organizational environment can

be viewed as composed of three components as shown

by the three rings respectively in Figure 2. The rings

from inside-out are: Adapt, Collaborate, and Evaluate.At the core is the need to adapt advancements in

technology and cultivate a culture to identify and

deploy latest tools and techniques for higher end use.

The second and the central layer is the one to

Collaborate. The outer layer focuses on evaluation of

plans, viz. their fulfilment. The rings indicate

continuity of the components. As one component

ceases to exist or the continuity is broken, the

organization can lag behind competition. The direction

of the arrow from inside out shows the incremental

effectiveness as an organization achieves the

milestones.

Organizational EfOrganizational EfOrganizational EfOrganizational EfOrganizational Effectivenessfectivenessfectivenessfectivenessfectiveness

To build the environment effectiveness, the organi-

zation must undergo the three phases as stated above:

AdaptAdaptAdaptAdaptAdapt

An organization is said to be adaptive if it is open to

new developments in technology, weighs the risks and

benefits associated, and deploys the technology while

mitigating possible risks associated with it. Eventhough an organization might spend extra amount and

time as an early adopter, it gains more experience and

Figure 1: A Framework for Effective IS

[Rings indicate continuous processes taking the visibility of ISeffectiveness from inside-out.]

Figure 2: Proposed ACE Model of IS

Environment Effectiveness

Evaluate

Collaborate

Adapt

IS

Effectiveness

IS Process

OrganizationCulture

IS ProductBusiness

Goals


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can respond fast in a competitive environment. Unless

an organization is keen on adoption of new technology

and paradigms, the environment cannot be called

fertile for growth of technology innovations and

applications. To remain adaptive, managers and

employees have to be on all-time alert and keep abreast

with the developments in the field of IT. If a business

group does not take the initiative, the IS organizationswithin the business group may take the lead in

acquainting themselves and the group with

advancements in the field suitable to the business

needs. However, such initiatives cannot go a long way

unless business groups themselves are actively

involved in the process.

CollaborateCollaborateCollaborateCollaborateCollaborate

An organization is said to be collaborative if all its

employees share common business goals and feel

equally responsible to achieve them. This collaborationshould finally bring the organization out of all physical

boundaries of departments, functions, and levels of

hierarchy. Organizations can achieve collaboration by

reducing authoritative roles at senior levels and

bureaucracy, encouraging lower levels to participate

and suggest without fear, and imparting suitable

training to people so that they see IT and IS as a

facilitator of their tasks. People in IS function should

also be trained to come out of their technology shells

and keep focus on business imperatives. Even if the

organization has employees who are adaptive asindividuals, it is the collaboration that can finally make

the organization adaptive.

EvaluateEvaluateEvaluateEvaluateEvaluate

An organization is said to be evaluative if it has well-

defined rules and roles to evaluate the IT and IS

performance against well-defined standards.

Evaluation should be seen as a constant feedback

mechanism to make sure that all the bottlenecks and

failures are taken care of. Organizations should define

policy, models, and evaluators who can conductevaluations on well-defined intervals. A variety of

models exists in literature (Singh, 1993; Parker, 1996)

that can be applied to evaluate IS, but their impact can

be visualized only when evaluation is considered as

an on-going process. However, it should be kept in

mind that the deviations observed as a result of

evaluations cannot be transmitted to seniors and peers

or controlled and minimized unless the organization

has an adaptive and collaborative environment.

Evaluating Organizational EfEvaluating Organizational EfEvaluating Organizational EfEvaluating Organizational EfEvaluating Organizational Effectivenessfectivenessfectivenessfectivenessfectiveness

The organizations should constantly evaluate its

environment effectiveness for effective use of IS. The

four steps for evaluation are as follows:

Evaluate adaptive environment effectiveness, i.e.

how adaptive is the organization.

Evaluate collaborative environment effectiveness,

i.e. how collaborative are the employees.

Evaluate evaluative environment effectiveness, i.e.

how well-defined is the evaluation mechanism.

Evaluate gross environment effectiveness, i.e

combined effect of the above three steps.

RESEARCH METHODOLOGYRESEARCH METHODOLOGYRESEARCH METHODOLOGYRESEARCH METHODOLOGYRESEARCH METHODOLOGY

We tested the validity and applicability of the model

using the sample selected for the task. Three automobile

manufacturing organizations out of a total of four withtheir headquarters and works in and around Delhi

(CMIE Prowess, May 1999) participated in this study

and seven ancillaries out of a total of 45 were selected

for the purpose of this study. These ancillaries were

chosen as they supplied the components to the

manufacturing organizations in the sample. This was

considered to study their collaborative working in IS

deployment. The respondents were chosen so as to

build a proper mix of all the managerial levels in

various functional areas of the organization (Graphs 1

and 2). Overall, 132 respondents participated in the

study. In order to expedite the data collection and to

Graph 1: Sample Distribution (Function-wise)

16%

19%

20%

36%

Administration

Human Resource Management

Information SystemsMarketing

Finance

Production

N=132; The segments indicate % responses from each function.

Frequency

4% 5%16%

19%

20%

36%

Administration

Human Resource Management

Information Systems

Marketing

Finance

Production


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Graph 2: Sample Distribution (Level-wise)

20%

49%

31%Top

Middle

Operational

Frequency

31%20%

49%

Top

Middle

Operational

allay the fears of the respondents, if any, we adopted

a questionnaire- cum-interview approach of data

collection. We also held some partially structured

discussions with keen respondents in various

functional areas with a view to get more insights into

the IS practices and culture in the organization. Table

1 shows the correlation of the variables under study

against four independent variables, namely, company,type of organization, function, and level of respondent.

In Box 1, we explain the method used to validate the

proposed model.

Table 1: Study of Correlation of Factors of Instruments with Independent Variables

Company Type of Functional Level ofOrganization Area Respondent

Coeff.* Sig.* Coeff.* Sig.* Coeff.* Sig.* Coeff.* Sig.*

Transaction Handling -0.01 0.92 -0.01 0.96 -0.26 0.01 0.08 0.37

Routine Report Generation -0.05 0.60 -0.19 0.04 -0.13 0.15 -0.05 0.56

Structured Decision-making -0.30 0.00 -0.44 0.00 -0.01 0.91 0.20 0.03

Management Control -0.19 0.04 -0.38 0.00 -0.12 0.20 0.20 0.03

Enterprise Resource Planning 0.33 0.00 0.14 0.12 0.08 0.37 -0.11 0.23

Future Planning 0.07 0.46 -0.16 0.08 0.06 0.53 -0.06 0.51

Information Analysis (Using Data Warehouse) 0.04 0.66 -0.03 0.76 -0.11 0.24 0.04 0.68

Database Management Systems 0.18 0.04 0.18 0.05 -0.30 0.00 -0.10 0.29

Spreadsheets 0.24 0.01 0.31 0.00 -0.17 0.06 -0.18 0.05

Document Imaging Tools 0.03 0.77 -0.05 0.57 -0.07 0.45 0.06 0.50

Conferencing Facility 0.00 0.97 -0.11 0.24 0.01 0.94 0.08 0.41Online Databases (CD or Internet-based) 0.01 0.95 -0.06 0.54 -0.02 0.82 0.06 0.50

EDI (Standard Format, Structured Data) 0.18 0.05 0.28 0.00 0.06 0.55 -0.13 0.18

Intranets 0.24 0.01 0.28 0.00 0.04 0.70 -0.24 0.01

E-Commerce -0.02 0.80 0.01 0.95 -0.08 0.41 -0.05 0.62

Department Management (Own) in IS Planning 0.09 0.35 0.03 0.75 0.06 0.55 -0.04 0.68

Department Staff (Own) in IS Planning 0.26 0.00 0.20 0.03 0.01 0.88 -0.11 0.26

Systems Management in IS Planning 0.23 0.01 0.09 0.36 -0.16 0.09 0.01 0.91

Organization Management in IS Planning for -0.45 0.00 -0.28 0.00 -0.09 0.32 0.08 0.39Your Depar tment

Department Management (Others) in IS Planning 0.03 0.72 0.02 0.82 -0.10 0.30 0.05 0.60

Department Staff (Others) in IS Planning 0.15 0.10 0.08 0.39 -0.04 0.69 -0.08 0.40

Department Head Role in Implementation -0.16 0.09 -0.23 0.02 0.02 0.83 0.21 0.03

Department Staff Role in Implementation 0.07 0.48 0.05 0.61 0.13 0.19 -0.17 0.09

Systems Management Role in Implementation -0.12 0.22 -0.04 0.68 -0.09 0.40 0.08 0.43

Systems Staff Role in Implementation -0.05 0.63 -0.02 0.86 -0.07 0.53 0.01 0.95

Organization Management Role in Implementation -0.39 0.00 -0.30 0.00 -0.04 0.69 0.03 0.73

*Coeff. is for Pearsons correlation and Sig. is 2-tailed significance.


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Compute IT adapt at i on (ECompute IT adaptat ion (ECompute IT adapt at i on (ECompute IT adaptat ion (ECompute IT adaptat ion (EI TI TI TI TI T):):):):): Compute effectiveness

of IT adaptation (EIT

) as the average of all responses of

IT usage on a 5-point scale. Thus,

EIT

= S (xij* L

i/ 100)/N; .(1)

i = 1 to 5

j = 1 to N

where, Lidenotes the effectiveness level (1 to 5) for each

j; L1denotes the type of IT not used; L

5denotes heavily

used; N represents the number of types of IT such as

Database Management Systems, Intranets, etc. that one

would like to consider. There are eight types of IT and

xij=percentage number of responses received at level

Li, for type j of IT.

Compute IS adaptat ion (ECompute IS adaptat ion (ECompute IS adaptat ion (ECompute IS adaptat ion (ECompute IS adaptat ion (EI SI SI SI SI S): Gather responses on the

following dimensions:

Transaction processing systems

Routine reporting systems Structured decision-making

Management control

Enterprise resource planning

Future planning

Information analysis

Rank each dimension on a 5-point scale: don t

know(1); planned after two years (2); planned in next

two years (3); planned in next one year (4); and already

Box 1: Validity of the Instruments

We analysed the data using SPSS software package and applied

various statistical models like descriptive analysis, factor

analysis, standard deviation, and correlation.

The validity of the proposed model has been done as follows:

Scale Reliability

Reliability of the scale was studied for all the instruments using

Space Saver method of scale reliability. The Cronbachs Alpha

for all but two of the instruments was observed as above 0.6

(Table A). For evaluation instruments, the scales were retained

as they were as the purpose of the results was being met. This

was opted for as a trade-off between reliability and simplicity.

Further, the scale of 1-5 does not fit into the evaluation instrument

as the questions, in a way, together represent the degree to

which organizations evaluation policy has been defined.

Individually, these variables exist or they do not exist. Thus,

only boolean answer is expected to hold. The quality of how well

each one of them has been defined is subjective and may not

lead to any quantifiable conclusion.

Content Validity

The factors for building various instruments were identified based

on the study of well established literature by Murdick, Ross and

Claggert (1984), Davis and Olson (2000), Lucas (1986),

Humphery (1990), Pressman (1992), Cortada (1995, 1998),

McNurlin (1998) and Obrien (1999). The practising managers

at senior level were also consulted before freezing the design.

A variable Any Other Response was kept with all the categories

to ensure openness. However, no additional significant factor

emerged. Informal discussions with the participants also

revealed that the questionnaires were very comprehensive to

the extent of forcing them towards introspection.

Sensitivity

The instruments were assessed on the 5-point Likert scale.

Table A: Scale Reliability of the Instruments

Instrument Number of Items Cronbachs Alpha

IT Adoption 8 0.6603IS Adoption 7 0.6499Collaboration 16 0.8296Evaluation 17 0.3095

METHODOLOGY FOR APPLMETHODOLOGY FOR APPLMETHODOLOGY FOR APPLMETHODOLOGY FOR APPLMETHODOLOGY FOR APPLYINGYINGYINGYINGYINGACE MODELACE MODELACE MODELACE MODELACE MODEL TO EVTO EVTO EVTO EVTO EVALUAALUAALUAALUAALUATETETETETEORGANIZAORGANIZAORGANIZAORGANIZAORGANIZATIONALTIONALTIONALTIONALTIONAL EFFECTIVENESSEFFECTIVENESSEFFECTIVENESSEFFECTIVENESSEFFECTIVENESS

Evaluate Adaptive EnvironmentEvaluate Adaptive EnvironmentEvaluate Adaptive EnvironmentEvaluate Adaptive EnvironmentEvaluate Adaptive Environment EfEfEfEfEffectiveness (Efectiveness (Efectiveness (Efectiveness (Efectiveness (EAEAEAEAEAE

)))))

To evaluate the adaptive climate of the organization

with respect to IS/IT, we should study the following:

Availability of tools of technology.

Usage of tools of technology for information

retrieval and analysis.

Gat her rGat her rGat her rGat her rGat her response:esponse:esponse:esponse:esponse: Gather responses on the following

dimensions:

Database management system

Spreadsheets

Document imaging tools

Online database Electronic data interchange

Intranets

Electronic transactions

Data warehouses

Rank each dimension on a 5-point scale: not

used(1); very less used(2); moderately used(3);

significantly used (4); and heavily used (5). Derive a

frequency table as shown in Table 2.


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have or do not need (5). Make a frequency table as

shown in Table 3. Compute effectiveness of IS

adaptation (EIS) as the average of all responses of ISusage on a 5-point scale. Thus,

EIS

= S (xij* L

i/ 100)/N .(2)

i = 1 to 5

j = 1 to N

where Lidenotes the effectiveness level (1 to 5) for

each j; L1denotes a type of IS not used; L

5 denotes

heavily used.

N represents the number of types of IS such as

transaction processing, future planning, etc. that one

would like to consider; and xij= % no. of responses

received at level Li, for type j of IS.Compute adaptat ion efCompute adaptat ion efCompute adaptat ion efCompute adaptat ion efCompute adaptat ion effecti v eness (Efecti v eness (Efecti v eness (Efecti v eness (Efecti v eness (E

AEAEAEAEAE))))): Adaptation

effectiveness is computed as the average of

effectiveness of IT and IS adaptation as obtained from

expressions (1) and (2) respectively. Thus,

EAE

= (EIT

+E

IS)/2 .(3)

Evaluate Collaborative Environment EfEvaluate Collaborative Environment EfEvaluate Collaborative Environment EfEvaluate Collaborative Environment EfEvaluate Collaborative Environment Effectivenessfectivenessfectivenessfectivenessfectiveness

(E(E(E(E(EAEAEAEAEAE

)))))

To evaluate the collaborative nature in the organization,

the role of various stakeholders can be studied in many

activities. These include new IS projects planning; data

architecture planning; procurement/development

planning; test and implementation planning; and

evaluation planning.

The prominent stakeholders whose involvement

should be studied are: project leaders (business); project

leaders (systems); functional heads; functional staff;

IS head; and IS staff.

Ideally, the roles for all involved should becollaborative though other possible roles prevailing in

traditional organizations are authoritative, supportive,

neutral, and negative. Further, a study of the

organizational factors contributing to success and

failure of organizations can indicate strengths and

weaknesses of the organizational environment thus

Table 2: Frequency Distributions for IT Adoption

Level of Use DBMS Spreadsheets Document Conferencing Online EDI Intranets ElectronicImaging Facility Data- Transactions

Tools bases

Very High 33.87 31.45 0.81 4.03 4.84 10.48 0.81

Fairly High 19.35 29.03 5.65 9.68 3.23 4.84 21.77 3.23

Moderate 18.55 15.32 15.32 8.06 15.32 13.71 15.32 7.26

Fairly Low 0.81 7.26 8.87 12.10 8.87 4.03 8.87 2.42

Very Low 4.03 1.61 8.87 9.68 20.16 8.87 4.84

Not Used 16.94 8.87 41.13 53.23 42.74 66.13 30.65 69.35

Cant Say 4.84 4.84 15.32 4.03 1.61 3.23 1.61 8.87

Missing 1.61 1.61 4.03 3.23 4.03 3.23 2.42 3.23

N=132; All figures in %.

Very High level of use indicates effectiveness at level 5. Not Used, Cant Say and Missing categories should be considered at level 1.The trend shows decrease in usage with increased level of sophistication. DBMS and spreadsheets are the most popular tools in use.Use of IT and Internet for formal real time business transactions is much less.

Table 3: Frequency Distributions for IS Adaptation

Transaction Routine Structured Management ERP Future InformationHandling Reporting Decision- Control Planning Analysis

making

Already Have 83.06 76.61 36.29 35.48 41.13 29.84 16.94

Dont Need 6.45 3.23 2.42 2.42 2.42 0.81 6.45

Planned in Next 1 Year 4.84 9.68 25.00 20.16 26.61 24.19 16.13

Planned in Next 2 Years 6.45 6.45 2.42 4.84 3.23

Planned After 2 Years 0.81 0.81 2.42 4.03 0.81 3.23

Dont Know about Plans 9.68 27.42 32.26 21.77 37.10 50.00

Missing 0.81 1.61 0.81 1.61 2.42 4.03

N=132; All figures in %.Use of IT is higher for routine activities but quite low for analysis purpose. The plans also indicate little about the awareness or intentof using automated informational tools for decision-making and control.


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indicating the need to improve/eliminate the factors

hindering the effectiveness of IS.

Gat her rGather rGat her rGather rGat her responseesponseesponseesponseesponse: Identify the tasks involved in the IS

project life cycle such as planning, development,

implementation, etc. Get user responses on the

following dimensions:

Organization management

Department management Department staff

I S management

I S staff

Rank each dimension on a 5-point scale: negative

or neutral (1); accommodating (2); authoritative (3);

compromising (4); and collaborative (5). Accommoda-

ting attitude involves passive acceptance of the ideas

of the dominant people; authoritative is better with

the assumption that these people hold vision; and

compromising is still better as it involves naturaladjustments. Obtain frequency tables as shown in

Tables 4(a) to 4(c).

Table 4(a): Frequency Distributions for Collaboration During New IS project Planning

Roles Planning for Respondents Department Planning forOther Departments

Department Department Systems Organization Department DepartmentManagement Staff Management Management Management Staff

Authoritative 17.74 1.61 10.48 32.26 8.87

Collaborative 27.42 26.61 33.06 19.35 36.29 23.39

Supportive 38.71 44.35 37.90 35.48 25.00 38.71

Neutral 11.29 24.19 8.06 6.45 25.00 33.06Negative 0.81

Cant Say 0.81 0.81 1.61 3.23

Missing 4.03 2.42 8.06 3.23 4.84 4.84


Department staff plays more of supportive i.e. passive role in IS planning. Users participation in other related departments planning isalso less, indicating lack of integration and staff ownership in planning. Ideally all must participate in a collaborative manner for the successof a change.

Table 4(b): Frequency Distributions for Collaboration during Training Plans

Roles Department Department Systems Systems OrganizationManagement Staff Management Staff Management

Authoritative 25.00 20.97 0.81 36.29

Collaborative 27.42 23.39 29.03 21.77 9.68

Supportive 30.65 52.42 24.19 44.35 30.65

Neutral 3.23 8.87 5.65 10.48 5.65

Negative

Cant Say 1.61 2.42 3.23 3.23 4.84

Missing 12.10 12.90 16.94 19.35 12.90

N=132; All figures in %.Training is crucial to any IS project. The frequency spread shows lack of collaboration in defining such needs. Such situation may lead

to forced training and hence less impact of learning.

Table 4(c): Frequency Distributions for Collaboration During Implementation Planning

Roles Department Department Systems Systems Organization

Management Staff Management Staff Management

Authoritative 13.71 18.55 2.42 28.23

Collaborative 20.16 24.19 25.81 27.42 10.48

Supportive 40.32 50.00 28.23 34.68 33.06

Neutral 6.45 9.68 4.03 12.90 8.87

Negative

Cant Say 6.45 4.03 4.84 3.23 4.03

Missing 12.90 12.10 18.55 19.35 15.32


A major group of users is in supportive role only. Supportive, as considered passive role in this study may result in lack of ownership ofimplementation.


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Comput e co l l abora t iv e env i rCompute col l abora t i ve env i rComput e co l l abora t iv e env i rCompute col l abora t i ve env i rComput e co l l abora t iv e env i ronm ent efonm ent efonm ent efonm ent efonm ent effect i v enessfectivenessfect i v enessfectivenessfectiveness

(E(E(E(E(ECECECECECE):):):):): Compute E

CE as the average of responses in-

dicating collaborative participation of all groups of

employees in every task of IS building. Thus,

ECE

=Avg of

(E

CE)

tfor all

tasks t ....(4)

where,

(ECE

)t= S (x

ij* L

i/ 100)/N ......(5)

i = 1 to 5 j = 1 to N

Lidenotes the effectiveness level (1 to 5) of collaboration

for each group j in each task t. L1denotes least effective

and L5 denotes highly effective collaborative en-

vironment; N represents the number of groups whose

roles have to be considered during an IS task t, e.g. IS

planning and IS implementation and xij= percentage

number of responses received at level Lifor type j of

group.

Evaluative Environment EfEvaluative Environment EfEvaluative Environment EfEvaluative Environment EfEvaluative Environment Effectiveness (Efectiveness (Efectiveness (Efectiveness (Efectiveness (EEEEEEEEEEE)))))

Finally, the evaluation policy and practices of the

organization should be studied to identify frequency,

evaluation criteria, initiators, and participants of the

IS evaluation.

Gat her rGat her rGat her rGat her rGat her response:esponse:esponse:esponse:esponse: Get usersyes or no responses on the

following factors:

Evaluation periodicity defined

Evaluation roles defined

Evaluation criteria defined

Evaluation defined with guidelines for correctiveactions

Derive the frequency table as shown in Table 5.

Compute eval uat i ve envi rCompute eval uat i ve envi rCompute eval uat i ve envi rCompute eval uat i ve envi rCompute eval uat i ve envi ronment efonment efonment efonment efonment effecti v eness (Efecti v eness (Efecti v eness (Efecti v eness (Efecti v eness (EEEEEEEEEEE):):):):):

Compute EEE

as the average of all responses about

presence/absence of evaluation policy. Thus,

EEE

= S (xi* L

i/ 100) ....(6)

i=1 to 5

where, i = 1 to 5, Lidenotes the effectiveness level (1

to 5); xi= percentage number of responses received at

level Li. L

ican be assigned as follows: L

i= 1 , if no factor

has been defined; Li= 2 , if periodicity has been defined;L

i= 3 , if periodicity + roles have been defined; L

i= 4

, if periodicity + roles + criteria have been defined; Li

= 5 , if periodicity + roles + criteria + counter measures

have been defined.

Measure Gross Environment EfMeasure Gross Environment EfMeasure Gross Environment EfMeasure Gross Environment EfMeasure Gross Environment Effectiveness (Efectiveness (Efectiveness (Efectiveness (Efectiveness (EEEEEE)))))

Gross environment effectiveness should be measured

as the average of adaptive effectiveness (EAE

) ,

collaborative effectiveness (ECE

), and evaluative

effectiveness (EEE

) as obtained from expressions (3),

(4) and (6). Thus,

EE= (E

AE+ E

CE+ E

EE) / 3 .....(7)

FINDINGSFINDINGSFINDINGSFINDINGSFINDINGS

Adaptive EfAdaptive EfAdaptive EfAdaptive EfAdaptive Effectivenessfectivenessfectivenessfectivenessfectiveness

Data base management systems and spreadsheets are

the most commonly used IT tools. Email is a commonly

used application for office communication at all levels

for intra-office and inter-office communications.

However, this facility is used to exchange general

information and also specific details about orders butin unstructured data formats. This is a predominant

mode of communication between manufacturers and

their ancillaries.

It is a good practice to begin with developing a

culture of e-communications, but the unstructured

format of communication inherits with it the problems

of duplicity, redundancy, and inaccuracy due to

required conversion of data from/to legacy

applications of the respective organizations.

Adaptation of IS and IT is very weak. Tables 2 and 3

summarize the descriptive findings of their adaptation.

It is evident that the transaction processing has a very

high use at present but the information use is low for

decision-making, control, future planning, and

information analysis. Further, over 80 per cent of the

respondents feel that they have or will have routine

reporting, structured decision-making, and control

within the next one year. However, nearly 40 per cent

and 54 per cent of the respondents do not have any

Table 5: Completeness of Evaluation Planning

Practices

Criteria ConsideredDuring Evaluation Percentage

Periodicity + Roles + Criteria + Controls(Orgn. Policy) 11.29

Periodicity + Roles + Criteria 23.39

Periodicity + Roles 5.65

Periodicity 49.19

Nothing Defined 10.48

Total 100.00


Though some of the departments have a period of evaluationdefined, the process to be followed is a dhocwith little definedroles and criteria.


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plans for using IS for future planning and information

analysis respectively, even after two years. Adoption

of IT tools also indicates the structured data handling

and processing only. Table 3 indicates the low

adaptation for the new tools except intranets.

The weakness is indicated by the decrease in use

as the level of sophistication increases, suggesting a

surface use of technology for information storage andretrieval. Further, comparing these results with the

survey of Business Today (June 1997) which had

indicated a very low adaptation of IT in Indian industry,

no significant increase in its use has been found in the

last few years. Thus, the observation reveals that

though the investments have been increasing, still the

net usage for improved management remains the same.

This gap can be due to multiple reasons. One, that

the managers are not aware of the possible exploitation

of their information pool. Two, that the IS planning is

centralized; and three, that there are not sufficient

products and solution providers to address the analysis

requirements. The user managers have to, therefore,

generate the need and awareness for such products or

else the volumes of data stored could end up in large

data repositories and information overloads.

Collaborative EfCollaborative EfCollaborative EfCollaborative EfCollaborative Effectivenessfectivenessfectivenessfectivenessfectiveness

The collaboration with respect to IS projects is very

mild. Only 33 per cent of respondents feel the presence

of collaboration. Table 4 (a) to (c) exhibit the rolesplayed by various groups in different IS planning

activities. Authoritative roles dominate in the case of

organization and department management. A major

per cent of responses indicate a supportive role,

indicating a passive participation instead of active

collaborative participation. A supportive attitude

cannot contribute much in the absence of strong

leadership. A good indicator is the total absence of

any negative roles played by any group.

An analysis of organization factors that contribute

to success or failure of IS indicates personnel ego asthe highest contributor to failure, followed by lack of

frequent training, lack of available professional

consultancy, and high turnover of skilled staff. Table 6

summarizes the ranking of top factors for success and

failure of IS and a discussion is given later in the text.

The position of IS in overall organization hierarchy is

not reported to be very strong. Users indicated the

near absence of any interaction with IS staff. If at all it

was there, it was individualistic in nature.

For improved results, the organizations must

mitigate the factors contributing to failure. Though

some factors like high turnover rate, lack of consultants,

etc are industry driven, an organization can take good

measures to counterfeit them. For instance,

deployment of strong process definition and implem-

entation can help nullify the problems of high turnoverrate. Ego and lack of frequent training can be seen as

a direct outcome of lack of collaborative environment

and vice versa. The top management and IS

management must work towards breaking of such

barriers between departments and individuals by

proper training, strong process formulation, and

ensuring employees the ownership of success and not

failures.

Evaluative EfEvaluative EfEvaluative EfEvaluative EfEvaluative Effectivenessfectivenessfectivenessfectivenessfectiveness

Without constant evaluations, any investment can turn

to losses. Early or late adopters will come at par if they

do not learn from the lapses they encounter. These

evaluations can be effective only when there is a well-

defined process and also the participants are actively

participating towards constructive evaluation.

An organization must have a well-defined scheme

of evaluation, defining roles, and rules of evaluation.

Tables 5 and 7 reveal important observations about the

state of evaluation mechanism in the organizations. In

the absence of strong evaluation process, the controlon IS use will be released, rendering the defaulters

unnoticed and unanswerable, sufferers unattended,

and organizational investments underutilized.

Gross Environment EfGross Environment EfGross Environment EfGross Environment EfGross Environment Effectivenessfectivenessfectivenessfectivenessfectiveness

After applying the steps of environment effectiveness

computation as stated in the previous section, the

comparative chart as shown in Table 8 has been

obtained. The figures indicate less than moderate

effectiveness (less than 3 on a scale of 5).

Hindrance and Success FactorsHindrance and Success FactorsHindrance and Success FactorsHindrance and Success FactorsHindrance and Success Factors

The hindrance and success factors were the ones

favouring or impeding the success of IS in the

participating organization. To this effect, a set of 44

factors was identified based on the study of literature

and administered on the same sample using a 7-point

(-3 to +3) scale. Interaction with the managers in the

testing organizations further strengthened this list.


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Factor analysis using Principal Components Analysis

and Varimax Rotation was applied to the responses to

identify the ranks of these factors (Boyd, 2000; Arora,

2000). Seven components were selected with factor

loading greater than or equal to 0.5. These seven

components explained 82.5 per cent of cumulative

variance. Table 6 shows the components with the

factors making the components. Table 9 shows the

ranking and average score of hindrance and success

Table 7: Evaluation Planning Practices

Activity % Yes

Log of System Failures is Maintained 23.40

Organization Policy for IS Evaluation Exists 24.20

Initiator of IS Evaluation is Well-defined 46.00

Criteria of IS Evaluation is Well-defined 63.00

N=132; All figures in %.The table indicates poor directions set for evaluation. Very lowpresence of practice for failure log indicates weak controls and alsothe fact that the applications deployed do not possibly have a highseverity of risk stake attached to business.

Table 8: Comparative Chart of Effectiveness (on aScale of 1 to 5) of Participant Organi-zations at Group Level

View of IS Effect iveness Industry Manufac- Anci llary

turing Units

Adaptive Environment 2.86 2.79 2.95

Collaborative Environment 2.62 2.63 2.61

Evaluative Environment 2.76 2.46 3.15

Gross EnvironmentEffectiveness

2.75 2.63 2.90

Effectiveness is below moderate level. The scenar io is similar acrossthe type and size of organizations. The result has been obtained byusing the frequency tables and applying computations of the ACEModel as explained in the text.

Table 6: Success and Hindrance Factors at Different types of Organizations

Component Factors in Component

1 User Participation and - Organization Democracy

Systems Management - Accuracy of Professional Consultancy

- Department Interest in Systems Growth

- Proper Use of Standards

- System Audi ts

- Customer Expectations

- User Involvement- Competition in the Market

- System Quality Checks

- Department Staff Skills

- Position of IS Department in the Organization

2 Technology and Support - Availability of Software Manpower

- Awareness of Latest Technology Solutions

- Existing Maintenance of IT Tools

- Proper Implementation Plans

- Pace of Technology Change

3 Non-availability of - Lack of Skilled Staff in Systems

Skills and Standards - Lack of IS Standards

- Competition Between System and Other Units

4 Systems Involvement - Systems Involvement in Planning

- Systems Involvement in Development

- Systems Involvement in Implementation

5 Management Involvement - Management Involvement in Planning

- Management Involvement in Development

- Management Involvement in Implementation

6 Organization Culture - Organization Bureaucracy

- Organization Autocracy

- Personal Ego

7 Expenses - Cost of Technology

- Budget Allocation-High Turnover

The table indicates common factors that affect IS success and failure. These factors have been obtained by applying factor analysisto the data obtained.

factors in the Indian automobile industry. For better

understanding, the ranks have been classified into three

categories based on the average score x as:

Positive factor (P) where +1


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The limiting factors have an immediate scope of

improvement and can shift to the category of positive

factors. They can also turn to failure factor category, if

not properly monitored. Failure factors are chronic and

organizations must take special steps to eliminate them.

It is possible that some of these limiting/failure factors

are not in the immediate control of the organization,

e.g. lack of professional consultancy. In such a case,

organization needs to be more concerned.

Some important observations are as follows. Personal ego is seen as the greatest hindrance to the

growth of IS in the organizations. Some managers

strongly stated that they all lived in their own rigid

walls and that IS needed to interact much more with

them.

Lack of training and existing skills are general

hindrances.

One positive indicator is the management support

and the resource availability. However, this needs

to be strengthened further by active involvement

of the management and also the staff so as to utilize

the funds in the right direction.

Availability of skilled manpower is a common

problem with all the organizations; to this effect,

proper documentation and well-defined processes

are the only solution. Further, these effects really

start emerging when the managers themselves

become the taskmasters.

Lack of standards is also seen as a major hindrance.

Table 9: Comparative Analysis of Hindrance and Success Factors at Different Types of Organizations

Component Industry Manufacturing AncillaryLevel Level Level

User Participation and Systems Management P P L1.00 1.15 0.83

Technology and Support P P P1.18 1.20 1.15

Non-availability of Skills and Standards L L L

(0.12) (0.02) (0.25)Systems Involvement P P P

1.92 2.10 1.71

Management Involvement P P P1.73 1.81 1.63

Organization Culture L L L(0.01) (0.05) 0.04

Expenses L L L0.26 0.24 0.29

The cells indicate the average score for the component on a scale of 3 to +3; Negative figures, indicating hindrances are shown inparentheses. P, L and F imply Positive, Limiting and Failure factors. N=132.Good indicator is that no factor was identified as severe factor for failure (category F). Management, user and technical support are givingpositive indications but at the same time organization culture (bureaucracy, autocracy and personnel ego) and expenses (technologyand staff turnover) are the major deterrents of IS success. These limiting factors can be reduced by improving as per indicators given

by various indices in earlier tables.

Though there are standards defined at BIS level,

they are more related to the software process and

not to the IS process. However, no one in these

organizations is using even the BIS level of practices.

Yet, as all the companies visited are ISO certified

for their production units, they claim to use the same

standard in all their activities.

CONCLUSIONS AND IMPLICACONCLUSIONS AND IMPLICACONCLUSIONS AND IMPLICACONCLUSIONS AND IMPLICACONCLUSIONS AND IMPLICATIONSTIONSTIONSTIONSTIONS

IT and IS are expensive but inevitable resources of any

organization. Some organizations deploy them to get

well-anticipated returns but others do it for survival.

In either case, in order to realize value from them, it is

worthwhile to analyse and ensure an effective

environment in the organization that is conducive to

change of technology and systems an environment

where users, rather than technicians, take ownership

of IS. This can ensure alignment of the organization,

its purpose, employees, functions, and stakeholders.

The proposed ACE model (Adapt-Collaborate-

Evaluate) offers a simple, flexible, and modular

approach to assess an organizations environment for

IS effectiveness on a scale of 1-5. Decision makers can

use it to identify weaknesses of the organization and

to get guidance for its improvement.

The study presented here brings out that

organizational environment effectiveness in Indian

automobile industry is less than moderate. Personnel


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ego, bureaucracy, high cost of technology, and turnover

are seen as factors limiting the effectiveness. There is

lack of collaboration and a near absence of defined

evaluation mechanism in these organizations. It may

be argued that IS returns being largely intangible,

cannot be evaluated. However, in the absence of

quantitative measures, a qualitative control mechanism

must exist to ensure increased utilization of IT spendingin large systems-based integrated set-ups. This paper

has its limitations too. It focuses on only one

perspective for improving the effectiveness of IS, i.e.

internal environment of the organization. Ultimately,

an integrated approach to effectiveness needs to be

considered that involves all dimensions of information

process system (conception to use), the business and

technical environment as well as the quality of final

product viz-a-viz its purpose. Malik and Goyal (2001)

address this issue further. The views suggested in this

paper can further be extended to include contentintegrity, people integrity, process integrity, medium

integrity, and open nature of systems.

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