and acadcmic issucs bascd on anaIyticaI and cmpiricaI or casc rcscarch. Organizational Environment and Information Systems 1ho convorgonco of nformuton tochnoogos hus oponod now vstus of opportuntos us wo us rsks for orgunzutons. Crgunzuton structuro, contros, und munugomont huvo u wtnossod u sou chungo wth thor nformuton systoms (lS) bocomng tochnoogy drvon. lS s soon us u strutogc too thut must bo wutchod curofuy n ordor to oud to corporuto vson. lor tho frst usors, lS muy brng compottvo udvuntugo but, for most, t bocomos u nood for survvu. 1o sustun n ths dynumc onvronmont, oxocutvos nood to bo on u- tmo-uort to muko suro thut thoy do not ug bohnd compotton. A study of bost-run orgunzutons ndcutos thut to koop busnoss und lS ugnod, thoy huvo hghy couborutvo bohuvour us wo us wo-dofnod pocy for ovuuutng lS. 1hs pupor suggosts un ACL Modo u 3-rng modo, comprsng of procossos to (A)dupt, (C)ouboruto und (L)vuuuto, n ordor to ostubsh und ovuuuto orgunzutonu offoctvonoss for mprovod lS offoctvonoss n tho orgunzutons. At tho coro s tho nood to cutvuto u cuturo to udupt tho utost toos und tochnquos for hghor ond uso. Noxt, tho poopo must couboruto und work n toums for fustor und bonofcu puns und mpomontuton. lnuy, u wo-dofnod procoss for constunt montorng und rofnomonts of tho puns s roqurod. 1ho rngs sgnfy contnuty of tho throo procossos. 1hoso procossos shoud not bo trggorod ut spocfc ntorvus. Ruthor, thoso must bo mbbod n tho cuturo of tho orgunzuton so thut tho ompoyoos broutho n und broutho out tho sumo thoughts und oxocuto thom togothor. 1ho modo offors u smpo, foxbo, und moduur upprouch to ussoss orgunzutons onvronmont for lS offoctvonoss on u 5-pont scuo. 1hs pupor hghghts tho foowng ssuos: 1horo s u nood for lS ovuuuton vs--vs orgunzutonu onvronmont. ln ordor to rouzo vuuo from l1, t s worthwho to unuyso und onsuro un offoctvo onvronmont n tho orgunzuton thut s conducvo to chungo of tochnoogy und systoms. 1hs cun onsuro ugnmont of orgunzuton, ts purposo, ompoyoos, functons, und stukohodors. lrrospoctvo of tho tochnoogos n uso, orgunzutonu ovuuuton procoss must bo un ndcutor of contrbuton of lS towurds growth or sustonunco of busnoss though tho oppononts of lS ovuuuton muy ko to concudo ths us nfousbo on tho ground thut lS bonofts uro urgoy ntungbo und honco unquuntfubo. 1ho fndngs of ths study cun hop tho busnoss orgunzutons n dontfyng und mprovng tho onvronmont for cutvutng lS n thor orgunzutons. lt s rocommondod to huvo moro softwuro toos for docson-mukng und nformuton unuyss so thut tho spondng on l1 cun bo utzod bottor. Docson mukors cun dopoy tho suggostod modo on thor ntrunots to koop u constunt wutch on tho cuturo of tho orgunzuton und uct uccordngy n ordor to koop tho offoctvonoss ndox to tho hghost ovo. R f S f AR CH KfY WORDS lnformation Systcms (lS) lS Adaptation CoIIaborativc fnvironmcnt lS fvaIuation Organization fnvironmcnt lS PIanning fxccutivc Summary Kumnu Muk und D F Coyu VlKALPA - VCLLML 28 - NC l - IANLAkY - MAkCH 2003 6l T echnology 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 and commitment 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. INFORMA INFORMA INFORMA INFORMA INFORMATION SYSTEMS TION SYSTEMS TION SYSTEMS TION SYSTEMS TION SYSTEMS EFFECTIVENESS EFFECTIVENESS EFFECTIVENESS EFFECTIVENESS EFFECTIVENESS Andreu, Ricart and Valor (1998), Baets (1996), and Cortada (1995) suggest that IS must be closely linked to the business strategy that is changing in response to the dynami c busi ness envi ronment. Thi s 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 to suggest 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, organizations have 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 book retailer, 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 of these 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, 62 CkCANlZA1lCNAL LNVlkCNMLN1 AND lNlCkMA1lCN SYS1LMS 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 suggest an Adapt-Collaborate-Evaluate (ACE) Model to establish the organizational environment that is healthy for the grooming of effective IS. ACE MODEL ACE MODEL ACE MODEL ACE MODEL ACE MODEL OF ORGANIZA OF ORGANIZA OF ORGANIZA OF ORGANIZA OF ORGANIZATION TION TION TION TION ENVIRONMENT EFFECTIVENESS ENVIRONMENT EFFECTIVENESS ENVIRONMENT EFFECTIVENESS ENVIRONMENT EFFECTIVENESS ENVIRONMENT 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 Model Structure of ACE Model Structure of ACE Model Structure of ACE Model Structure 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 Ef Organizational Ef Organizational Ef Organizational Ef Organizational Effectiveness fectiveness fectiveness fectiveness fectiveness To build the environment effectiveness, the organi- zation must undergo the three phases as stated above: Adapt Adapt Adapt Adapt Adapt 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. Even though 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 IS effectiveness from inside-out.] Figure 2: Proposed ACE Model of IS Environment Effectiveness
Evaluate Collaborate Adapt IS Effectiveness IS Process Organization Culture IS Product Business Goals VlKALPA - VCLLML 28 - NC l - IANLAkY - MAkCH 2003 63 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 organizations within 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. Collaborate Collaborate Collaborate Collaborate Collaborate An organization is said to be collaborative if all its employees share common business goals and feel equally responsible to achieve them. This collaboration should 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 as individuals, it is the collaboration that can finally make the organization adaptive. Evaluate Evaluate Evaluate Evaluate Evaluate An organization is said to be evaluative if it has well- defined rules and roles to evaluate the IT and IS performance agai nst wel l -defi ned 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 conduct evaluations 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 Ef Evaluating Organizational Ef Evaluating Organizational Ef Evaluating Organizational Ef Evaluating Organizational Effectiveness fectiveness fectiveness fectiveness fectiveness 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 METHODOLOGY RESEARCH METHODOLOGY RESEARCH METHODOLOGY RESEARCH METHODOLOGY RESEARCH 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 with their 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 Systems Marketing 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 64 CkCANlZA1lCNAL LNVlkCNMLN1 AND lNlCkMA1lCN SYS1LMS 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 di scussi ons wi th keen respondents i n vari ous 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 of Organization 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 0.41 Online 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 0.39 Your Department 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. VlKALPA - VCLLML 28 - NC l - IANLAkY - MAkCH 2003 65 Compute I T adaptation (E Compute I T adaptation (E Compute I T adaptation (E Compute I T adaptation (E Compute I T adaptation (E I T I T I T I T I T ): ): ): ): ): Compute effectiveness of IT adaptation (E IT ) as the average of all responses of IT usage on a 5-point scale. Thus, E IT = S (x ij * L i / 100)/N; .(1) i = 1 to 5 j = 1 to N where, L i denotes the effectiveness level (1 to 5) for each j; L 1 denotes the type of IT not used; L 5 denotes 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 x ij =percentage number of responses received at level L i , for type j of IT. Compute I S adaptation (E Compute I S adaptation (E Compute I S adaptation (E Compute I S adaptation (E Compute I S adaptation (E I S I S I S I S I 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: dont 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 Clagger t (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 par ticipants 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 0.6603 IS Adoption 7 0.6499 Collaboration 16 0.8296 Evaluation 17 0.3095 METHODOLOGY FOR APPL METHODOLOGY FOR APPL METHODOLOGY FOR APPL METHODOLOGY FOR APPL METHODOLOGY FOR APPLYING YING YING YING YING ACE MODEL ACE MODEL ACE MODEL ACE MODEL ACE MODEL TO EV TO EV TO EV TO EV TO EVALUA ALUA ALUA ALUA ALUATE TE TE TE TE ORGANIZA ORGANIZA ORGANIZA ORGANIZA ORGANIZATIONAL TIONAL TIONAL TIONAL TIONAL EFFECTIVENESS EFFECTIVENESS EFFECTIVENESS EFFECTIVENESS EFFECTIVENESS Evaluate Adaptive Environment Evaluate Adaptive Environment Evaluate Adaptive Environment Evaluate Adaptive Environment Evaluate Adaptive Environment Ef Ef Ef Ef Effectiveness (E fectiveness (E fectiveness (E fectiveness (E fectiveness (E AE AE AE AE AE ) )) )) 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. Gather r Gather r Gather r Gather r Gather 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. 66 CkCANlZA1lCNAL LNVlkCNMLN1 AND lNlCkMA1lCN SYS1LMS have or do not need (5). Make a frequency table as shown in Table 3. Compute effectiveness of IS adaptation (E IS ) as the average of all responses of IS usage on a 5-point scale. Thus, E IS = S (x ij * L i / 100)/N .(2) i = 1 to 5 j = 1 to N where L i denotes the effectiveness level (1 to 5) for each j; L 1 denotes 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 x ij = % no. of responses received at level L i , for type j of IS. Compute adaptation ef Compute adaptation ef Compute adaptation ef Compute adaptation ef Compute adaptation effectiveness (E fectiveness (E fectiveness (E fectiveness (E fectiveness (E AE AE AE AE AE ) )) )): Adaptation effecti veness i s computed as the average of effectiveness of IT and IS adaptation as obtained from expressions (1) and (2) respectively. Thus, E AE = (E IT +
E IS )/2 .(3) Evaluate Collaborative Environment Ef Evaluate Collaborative Environment Ef Evaluate Collaborative Environment Ef Evaluate Collaborative Environment Ef Evaluate Collaborative Environment Effectiveness fectiveness fectiveness fectiveness fectiveness (E (E (E (E (E AE AE AE AE AE ) )) )) 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 be collaborative 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 Electronic Imaging 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 Information Handling 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 intent of using automated informational tools for decision-making and control. VlKALPA - VCLLML 28 - NC l - IANLAkY - MAkCH 2003 67 indicating the need to improve/eliminate the factors hindering the effectiveness of IS. Gather r Gather r Gather r Gather r Gather response esponse esponse esponse esponse: Identify the tasks involved in the IS project life cycle such as planning, develop- ment, 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 natural adjustments. 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 for Other Departments Department Department Systems Organization Department Department Management 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 33.06 Negative 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 N=132; All figures in %. Department staff plays more of supportive i.e. passive role in IS planning. Users participation in other related departments planning is also less, indicating lack of integration and staff ownership in planning. Ideally all must participate in a collaborative manner for the success of a change. Table 4(b): Frequency Distributions for Collaboration during Training Plans Roles Department Department Systems Systems Organization Management 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 N=132; All figures in %. A major group of users is in supportive role only. Supportive, as considered passive role in this study may result in lack of ownership of implementation. 68 CkCANlZA1lCNAL LNVlkCNMLN1 AND lNlCkMA1lCN SYS1LMS Compute col l aborati ve envi r Compute col l aborati ve envi r Compute col l aborati ve envi r Compute col l aborati ve envi r Compute col l aborati ve envi ronment ef onment ef onment ef onment ef onment effecti veness fecti veness fecti veness fecti veness fecti veness (E (E (E (E (E CE CE CE CE CE ): ): ): ): ): Compute E CE as the average of responses in- dicating collaborative participation of all groups of employees in every task of IS building. Thus, E CE =
Avg of
(E CE ) t for all
tasks t ....(4) where, (E CE ) t = S (x ij * L i / 100)/N ......(5) i = 1 to 5 j = 1 to N L i denotes the effectiveness level (1 to 5) of collaboration for each group j in each task t. L 1 denotes least effective and L 5 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 x ij = percentage number of responses received at level L i for type j of group. Evaluative Environment Ef Evaluative Environment Ef Evaluative Environment Ef Evaluative Environment Ef Evaluative Environment Effectiveness (E fectiveness (E fectiveness (E fectiveness (E fectiveness (E EE EE EE EE EE ) )) )) Finally, the evaluation policy and practices of the organization should be studied to identify frequency, evaluation criteria, initiators, and participants of the IS evaluation. Gather r Gather r Gather r Gather r Gather response: esponse: esponse: esponse: esponse: Get users yes or no responses on the following factors: Evaluation periodicity defined Evaluation roles defined Evaluation criteria defined Evaluation defined with guidelines for corrective actions Derive the frequency table as shown in Table 5. Compute evaluative envir Compute evaluative envir Compute evaluative envir Compute evaluative envir Compute evaluative environment ef onment ef onment ef onment ef onment effectiveness (E fectiveness (E fectiveness (E fectiveness (E fectiveness (E EE EE EE EE EE ): ): ): ): ): Compute E EE as the average of all responses about presence/absence of evaluation policy. Thus, E EE = S (x i * L i / 100) ....(6) i=1 to 5 where, i = 1 to 5, L i denotes the effectiveness level (1 to 5); x i = percentage number of responses received at level L i . L i can be assigned as follows: L i = 1 , if no factor has been defined; L i = 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; L i = 5 , if periodicity + roles + criteria + counter measures have been defined. Measure Gross Environment Ef Measure Gross Environment Ef Measure Gross Environment Ef Measure Gross Environment Ef Measure Gross Environment Effectiveness (E fectiveness (E fectiveness (E fectiveness (E fectiveness (E E EE EE ) )) )) Gross environment effectiveness should be measured as the average of adaptive effectiveness (E AE ), collaborative effectiveness (E CE ), and evaluative effectiveness (E EE ) as obtained from expressions (3), (4) and (6). Thus, E E = (E AE + E CE + E EE ) / 3 .....(7) FINDINGS FINDINGS FINDINGS FINDINGS FINDINGS Adaptive Ef Adaptive Ef Adaptive Ef Adaptive Ef Adaptive Effectiveness fectiveness fectiveness fectiveness fectiveness 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 but in 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 Considered During 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 N=132; All figures in %. Though some of the departments have a period of evaluation defined, the process to be followed is a dhoc with little defined roles and criteria. VlKALPA - VCLLML 28 - NC l - IANLAkY - MAkCH 2003 69 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 and retrieval. 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 Ef Collaborative Ef Collaborative Ef Collaborative Ef Collaborative Effectiveness fectiveness fectiveness fectiveness fectiveness 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 roles played 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 as the 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 counterfei t them. For i nstance, deployment of strong process definition and implem- entation can help nullify the problems of high turnover rate. 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 Ef Evaluative Ef Evaluative Ef Evaluative Ef Evaluative Effectiveness fectiveness fectiveness fectiveness fectiveness 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 control on IS use will be released, rendering the defaulters unnoticed and unanswerable, sufferers unattended, and organizational investments underutilized. Gross Environment Ef Gross Environment Ef Gross Environment Ef Gross Environment Ef Gross Environment Effectiveness fectiveness fectiveness fectiveness fectiveness 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 Factors Hindrance and Success Factors Hindrance and Success Factors Hindrance and Success Factors Hindrance 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. 70 CkCANlZA1lCNAL LNVlkCNMLN1 AND lNlCkMA1lCN SYS1LMS 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 low presence of practice for failure log indicates weak controls and also the fact that the applications deployed do not possibly have a high severity of risk stake attached to business. Table 8: Comparative Chart of Effectiveness (on a Scale of 1 to 5) of Participant Organi- zations at Group Level View of IS Effectiveness Industry Manufac- Ancillary 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 Environment Effectiveness 2.75 2.63 2.90 Effectiveness is below moderate level. The scenario is similar across the type and size of organizations. The result has been obtained by using the frequency tables and applying computations of the ACE Model 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 Audits - 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 analysis to 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 <= x <=+3 Limiting factor (L) where 1 <= x < +1 Failure factor (F) where 3 <= x < -1 VlKALPA - VCLLML 28 - NC l - IANLAkY - MAkCH 2003 7l 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 Ancillary Level Level Level User Participation and Systems Management P P L 1.00 1.15 0.83 Technology and Support P P P 1.18 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 P 1.73 1.81 1.63 Organization Culture L L L (0.01) (0.05) 0.04 Expenses L L L 0.26 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 in parentheses. 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 giving positive indications but at the same time organization culture (bureaucracy, autocracy and personnel ego) and expenses (technology and 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 IMPLICA CONCLUSIONS AND IMPLICA CONCLUSIONS AND IMPLICA CONCLUSIONS AND IMPLICA CONCLUSIONS AND IMPLICATIONS TIONS TIONS TIONS TIONS 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 bri ngs out that organizational environment effectiveness in Indian automobile industry is less than moderate. Personnel 72 CkCANlZA1lCNAL LNVlkCNMLN1 AND lNlCkMA1lCN SYS1LMS 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 spending in 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. 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Hor rosourch ntorosts ncudo softwuro quuty, nformuton systoms offoctvonoss, und nformuton ntogrty. o-mu: kumnumukgmt.uc.n D P GoyaI s Frofossor ut lnsttuto of Munugomont 1ochnoogy, Chuzubud. Hs urous of ntorost uro munugomont nformuton systoms, docson support systoms und ontorprso rosourco punnng. Ho s curronty workng on u Unvorsty Crunts Commsson fundod rosourch projoct. o-mu: dpgoyugmt.uc.n Information Systems Integration and Organizational Culture on a Firms Effectiveness, Information and Management, Vol 30, No 2, pp 81-90. Rcvcrsing Your Pcrspcctivc It s a good tochnquo iot oonng u yout thnlng. Hotos an oxamlo. lot many yoats, 10 th contuty Inglsh hyscan Idvatd /onnot votlod to ind a cuto iot small ox. -itot studyng many casos, ho toachod an masso n hs thnlng. Thon ho tovotsod hs otcoton oi tho toblom. Instoad oi iocusng on oolo vho had small ox, ho svtchod hs attonton to oolo vho novot had small ox. Ho iound that daty mads tatoly got tho dsoaso. It tutnod out that most daty mads had cov ox, a smlat but usually non-iatal aiilcton. Cov ox had sotvod to vaccnato ts vctms aganst tho moto dangotous small ox. Ths lod to /onnots concot oi vaccnatng oolo. Rogcr von 0cch - \hacl on tho 5do oi tho Hoad 74 CkCANlZA1lCNAL LNVlkCNMLN1 AND lNlCkMA1lCN SYS1LMS