Effective application of information systems or how to become the supercompany
Each company at different stages of the development is faced the need of the choice of an enterprise management system. In this article, it is offered to consider approach to the choice of an enterprise information system which is based on dependence on a stage of development of the company, lifecycle and management style. The new coding of information systems KUPE (CAPE) which is considered together with coding of management RAPI (PAEI) style is entered. Approach allows to pick up the optimal decision relevant to a stage of development of the company with a reliable basis for further growth. Any company will be able to find the unique "gold" way of permanent development and improvement which will allow to become "supercompanies" significant and valuable to shareholders, employees, clients and society in general.
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Dissatisfaction with the implemented IT system
Each company at different stages of the development is faced the need of the choice of an enterprise management system. In this article, I suggest to consider approach to the choice of an enterprise information system which is based on dependence on a stage of development of the company, lifecycle and management style.
In practice, at selection of a management system, the enterprise considers the possibility of its creation by own forces, relying on internal practices and employee competences, collects a system from a set of ready-made solutions, each of which solves a separate problem (management of a warehouse, sales management, transport, etc.), or implements the end-to-end systems of management existing in the market (for example, ERP).
The growing and developing enterprises will return to questions still more than once:
- Do you need to change a system or in what direction to improve existing?
- Why to select this system?
- What problems should this system solve?
- For what results do we wait from implementation of a new system?
When choosing automated control systems consultants, IT analysts, as a rule, rely on functional features – perimeter and volume of required functionality.
The most widespread classification of automated control systems for the enterprise is based on selection of feature set and their grouping on functional spheres of use. From there were such standards as ERP MRP BPM WMS , etc. In general all of them represent the set of functionality grouped in certain criteria. To some extent it is convenient as terminology relies on quite clear things, for example, the statement of the account to the client, payroll, storage of Inventories in a warehouse, etc. Everything is good, but functions there is a huge number. At the same time in practice, accomplishment of many same functions in the different companies is built differently. Also it turns out that in this huge space of functional requirements when choosing this or that solution the convenience of applied use of the concept "function" is lost. And it is, at first sight, paradoxical, initially function is directed to achievement of this or that purpose and is intended for something and, apparently, therefore the purpose can easily select … In what can the dirty trick be? The situation is similar to a joke:
- What do you do?
- I watch football …
- And what result?
- Six bottles of beer …
Whether always we receive the necessary result, even after successful system implementation? And why often occurs so what to the expected result the company does not come, and everything stops on implementation, and sometimes even earlier?
Classification of systems
The companies within the activity perform a number of actions in the internal and external environment which in turn, are directed to achievement of long-term and short-term objectives. I understand a circuit of the company to which any relations, interactions, business processes aimed at providing life activity of the company belong as the internal environment. For example, internal regulations, system of motivation, corporate culture, conducting accounting and management accounting, planning, control, production operations, personnel records. The external environment is the relations, interactions, business processes which are performed by the company with external partners. Such, as, sales, work with suppliers, customer relations and investors. All actions of the company which are performed in the external environment have a direct impact on activity in the internal environment.
Thus, we receive four types of groupings of the actions made by the organization. Let's appropriate to each group a key word which is generalized and define the target field of the made actions and are group of business processes.
1 - long-term in the external environment - Projects (P)
2 - short-term in the external environment - Clients (C)
3 - short-term in the internal environment - Accounting (including procedural, managerial, the operational systems) (A)
4-long-term in the internal environment - Efficiency (E)
Let's locate actions which are made by the organization in simple quadrants: estimates of a short-term and long-term outlook, and accomplishment of action in the internal and external environment (Fig. 1).
If we reformulate these groupings in terms of information systems, then we will receive the following map of categories of the information systems (IS) in short-term and long-term to perspective, in an internal and external environment (fig. 2).
CRM (Customer Relationship Management is customer relationship management) and also a management system for loyalty treats a program group of management of client processes.
The systems of class PROGRAM STATUS WORD (balanced scorecard) in a paradigm of assessment of activities for four levels belong to the category of programs of efficiency: finance, clients, production and personnel. SSP is a system processes of a company performance and to implement on this basis the system of estimates and motivation of KPI (key performance indicators) helping to configure effectively.
Accounting group, perhaps, the most volume as includes also the systems of accounting, i.e. procedural accounting and the system of management accounting, and the system of production appointment, logistics, etc. Often the organizations use the information systems located only in this quadrant, at the same time including that have full-fledged end-to-end systems of management.
Thus, we received simple classification of the information systems (IS). For convenience of using we will code the name on initial letters of a key word of information systems KUPE (Client software programs, Accounting, Project, Efficiency).
The received systematization is useful to understanding of levels of the existing ICs of the tools offered by the market and used in the company and their sufficiency for further development and achievement of effective objectives.
But even more interesting and useful this approach appears by comparison to management style by the company and its lifecycle.
On any information system in design process, implementation and full-time job management of the company influences. Results will depend on system operation "IS-Manager". Whether the leadership style affects efficiency of the IC in the company and how it is connected with a development stage?
For the answer to this question we will consider popular model of Ichak Adizes. We will not disclose in detail its content, sending for this purpose to its sources, and we will give its basic provisions. Adizes writes [1]:
1. "The ultimate goal of management process — to make the organization productive and effective in the near-term and long term — it is no more and not less".
2. "It is necessary for successful functioning of the organization that in the organization four functions were performed: production of results, administration, entrepreneurship and integration. For successful accomplishment of each function roles in decision making of P,A,E,I should be performed"
The author selects 4 roles (style) of management which the organization should be capable to perform for successful management:
1. production of results – short-term effectiveness; 2. administration – short-term efficiency; 3. an entrepreneurship – long-term effectiveness; 4. integration – long-term efficiency.
On the diagram it is represented as follows:
The next stages of lifecycle of the organization are selected:
Or "Give Courtship, Infancy, Childhood - give" (Go-go), Adolescence, Prime, Stabilization or "Late blossoming" (Stabilization), Aristocracy, "Early bureaucratization" (Early bureaucracy), "Bureaucratization and death" (Bureaucracy and death).
On each of growth phase stages the company endures crisis. The company or successfully passes it, or threatens it premature the activity terminations, at the same time is accented that not in connection with change of a konjektura of the market, and in connection with incorrectly organized management. Respectively, cure for crisis is correctly created team of managers with the styles of management corresponding to each stage.
Now we will return to our model of information systems KUPE. Also we will carry out interrelation between two models.
First, for this purpose we will enter a concept of complexity of business processes of the company. Categories of simplicity complexity, of course, exist concerning business processes. At the same time here we will understand the complexity level as the increasing volume of interactions, the number of internal and external participants of these interactions and quantity of the purposes or results which the companies sets before himself.
Graphically, communication of level of complexity of business processes of the company depending on time can be illustrated with the diagram:
This dependence represents a step type. Really, the complexity of business processes in the organization changes not smoothly, and after a while, at a certain maturing in company management of need of change of the existing methods of interaction, need determination new or redefinition of the old purposes. In other words, it occurs at efficiency factor assessment in this or that field of activity, i.e. at assessment of decrease in the existing efficiency level to the critical level or its possible potential loss. The following that we will make, we will show dependence of categories ICs and financial opportunities (including and potential) depending on time, we will mean at the same time dependence of increase in complexity of business processes on time which is provided in fig. 5.
On each stage before the organization there are tasks which the information system should be capable to support. Each segment of a curve of development – functioning of the organization at the certain level of complexity of business processes with domination of this or that group of business processes: project, client, accounting, efficiency (fig. 6).
Analyzing diagrams of the IC of development (Fig. 1) and stages of lifecycle of the organization (Fig. 4) we see that there is an obvious communication between them.
We will describe observed compliance in more detail in table 1.
Table 1. Compliance of stages of development of the company in Adizes to stages of development of the company by codes of information systems KUPE.
| the Stage across Adizes and the code of management | Characteristic of a stage | Stage and code of an information system | Characteristic of a stage |
|---|---|---|---|
| paEi Courtship | At this stage the organization does not exist yet, but there is already an idea about its creation. The founder opinions gather, necessary information, the so-called theoretical foundation for future organization is laid. If the founder can answer such questions how "That the organization will do? How and when it can be made? Who and why is going to do it?", the basis for creation of its organization already is. | "Project justification" - P- | Is required to the founder schedule system of each action, the solvable tasks and the achieved goals required resources - i.e. it is necessary to deal with business planning issues. It will be effective if already at this stage to do it in a project management system.
Next stage: beginning of work with clients. |
| Paei Infancy | At this stage the organization has no accurate structure and the system of distribution of powers, responsibility, the system of employment yet. It is very personified, has the small budget. The main focus in organization activity is placed on satisfaction of needs of her clients and on results of the work. Decisions at this stage should be made quickly, but in view of lack of sufficient experience, stability in work, they can be not always successful. That the organization continued the functioning, it is necessary to provide permanent cash receipt and also its founder should be fully confident in success of own idea, is devoted to it. The next stage of lifecycle of the organization begins when activity and cash flows of the organization become stable. | "Client solvency" of Kupe | The organization is focused on the client. It is required to fulfill technology of interaction "Client organization" for technology of sales, to production and financial customer relations. Next stage: stabilization of the successful, already checked techniques of work with clients, production processes, logistics, internal interactions, etc. |
| Or "Give "childhood" - give" (Go-go) of PaEi | It is a stage of rapid growth of the organization which activity already quite successfully develops. Each new opportunity is a priority in its activity. In the organization still there is neither accurate management structure, nor the set functional duties. The organization concentrates not around tasks, and around people. The founder tries to begin delegation of the powers and responsibility because of the increased work volume. | "The corporate orderliness" kupe | The number of clients increases. There are orders, sales more. Load of sales departments and productions increases. It increases requirements to all types of accounting: procedural, managerial, production. The companies actively begin to use production management systems, trade, warehouses and the other systems.
Next stage: efficiency system implementation. |
| pAEi Adolescence | At this stage the organization very strongly changes, even despite successful performance at the previous stages. Now its further development will be possible only in case of establishment of discipline, a system and an order. Surely also the structure of the organization changes, there is an authority delegation which is and a problem for it as nobody is insured from errors of subordinates. For change and optimization of its structure, creation of a system of motivation and control professional heads are employed. This stage is characterized by existence of a large number of the conflicts and contradictions. The conflicts arise between the old and new staff of the organization, contradictions are observed in its purposes. The next stage of lifecycle of the organization comes if systematization of all administrative activity was made successfully. | "Corporate performance" of a compartment | The technologies working to this stage do not bring desirable results. Employees show different results. Some employees or employee groups give more development, make for more profit, others it is less. At concurrent processes: creation of new divisions, authority delegation, providing bigger independence, coordination between services and in services worsens, more confusion appears. All these costs of a stage can be solved, having implemented the system of efficiency, for example, the balanced scorecard on levels of finance, clients, production organizations, personnel and already on its basis of KPI. |
| PAEi Prime | At this stage the organization at the same time both is flexible, and it is managed, has the registered functions and accurate structure. It is engaged in planning of the activity and afterwards follows the plans, is focused on result and satisfaction of needs of the clients, effectively works. Her employees are good teamplayers. Often at this stage the child infantile organizations are created. | "Stabilization (accumulation of energy" KUPE | In comparison with the previous stages the organization gains the greatest effect of synchronously working management systems. All systems "are included" and perform the purpose. The main objective of systems – to save congruence to business challenges. [1] |
| "Stabilization" or "Late blossoming" (Stabilization) of PAeI | In lifecycle of the organization this stage is the first stage of its aging. The flexibility of the organization decreases, there is a reduction of innovations, it does not aim at changes. The increasing value is given to the interpersonal relations between employees, than capture of the new markets, expansion of the coverages which are already existing, risks which are connected with business. Thus, all this can affect negatively satisfaction of customer needs of the organization in the future. | "Project management by businesses" KUPE + BI | In the conditions of expansion of the company, opening of new branches, subsidiary companies, increase in a product line on group arises need of integration of information on all perimeter of the company. There are questions what information is subject to consolidation and what information can remain local what information and on what analytics is more valuable at acceptance of management decisions.
In these conditions the system status, can become unstable, uncertainty level increases: in what direction there will take place further development. Errors at this level can become critical. Whether a system will move to higher level of orderliness or will remain chaotic, and in the investigation of it owing to errors will pass into a stage of decline depends on capability of the organization strategically to see the development, and with it the organization will be helped by management systems for a project portfolio, the systems of consolidation, the system of a business intelligence (BI). In terms of the KUPE codes - it is the interconnected work of systems on all factors that is a necessary condition of BI of the analysis, but with great attention to codes P and U. At the solution of these questions the organization continues to develop successfully and further. |
| pAeI Aristocracy | The organization, being at an aristocratism stage, owns considerable money resources which it spends for strengthening of the available control system, arrangement, insurance. The basic in its activity is not that and why it is made and as. There are certain traditions both in clothes, and in the address. For the purpose of development small innovations can be entered into the organizations, other organizations can be purchased. Orientation of the organization to long-term result is much lower, than at the previous stages. For preserving of the available profit level the prices of its products or services raise, but this process is not infinite. | ||
| "Early bureaucratization" (Early bureaucracy) of pA-i | Existence of a large number of the conflicts and problems, a distance from satisfaction of clients — all this fully characterizes a stage of early bureaucratization. Now the main attention in the organization concentrates on the one who is guilty of problems, but not that it is necessary to make that to solve them. | ||
| "Bureaucratization and death" (Bureaucracy and death) - A - | During bureaucratization the organization does not aim at increase in efficiency of the activity, at changes, and, therefore, and does not try to be guided by result, by needs of consumers. But at the same time at it there is a strict control over activity, observance of all adopted rules, instructions and procedures. If organization activity directly depends on clients, then at the time of their total failure from its services there can come death of the organization. Approach of a stage of death for it can be delayed for some time if the organization makes what-tomonopolny product or has support of the state. |
Observed communications of two systems are quite explainable. Really, styles of management are a certain set of representations, beliefs and capabilities to conduct management in this or that manner. And categories of information systems are only the tool for accomplishment of the planned actions.
For dynamic organization development and successful transition from one stage of organization development to the next evolutionary stage, it is necessary to create information environment based on KUPE (CAPE) encoding and to use it using the RAPI (PAEI) management styles. At the same time effective combinations of management styles and codes of information systems are illustrated by a square of combinations of codes of styles of management and codes of information systems (Fig. 8).
At data analysis of combinations of two quadrants: lower the IC and upper management of styles it became clear that there are most effective combinations of styles of management and the IC codes, described by the "rule of the gimlet", known from physics. At turn of the top level clockwise, it makes impact on the bottom level and in this context defines the direction of development and extent of impact on an information system. For example, the manager naturally works with style of management of E in system P – project management and influences (it is capable to change or improve) an information system of Efficiency results of the activity, having an impact through the vision of corporate culture, motivation, efficiency on all levels of the company, but at the same time it does not work with the systems of efficiency directly. Or, the manager with style of management of P well works with the client systems and influences project management system operation, providing development of the IC by additional analytics and detailing important for Projects.
The joint consideration of two approaches allows to draw a number of interesting conclusions:
1. The success of the company consists in its capability to manage external and internal interactions in the long-term and short term. These capabilities amplify using use of four categories of information systems:
- Management programs for projects,
- Management programs for clients,
- Programs of accounting and management of operational activity of the company,
- Management programs for efficiency of the company, are also implemented by the corresponding styles of management described in Adizes's approach.
2. Lifecycle of the company graphically on the line of time and financial results is a view of the hill: in initial stage growth, in a final stage decrease. It is connected with the value of capability of the company to react to the growing complexity of business processes.
3. The organization developments which are periodically arising at different stages crises, without having overcome which the organization either stops activity, or remains at a former stage without perspectives of growth occur quite naturally and are connected with step change of complexity of business processes and values of capability of the company to react to these changes.
4. Crises of stages can be overcome successfully if to know patterns of development and to use appropriate technologies of management with the corresponding information systems in KUPE encoding.
5. A stage of aging of the company it is possible to pass and continue successfully development if the company, has a competent command and the corresponding information system.
6. Effective combinations of management styles and codes of information systems:
- the head with style of management P (short-term effectiveness) will effectively use management programs for clients and to influence a system project management,
- the head with style of management E (long-term effectiveness) will effectively manage systems project management and to influence the system of efficiency,
- the head with style of management of I (long-term efficiency) will effectively manage the system of efficiency and to influence accounting systems,
- the head with style of management of A (short-term efficiency) will effectively manage accounting systems and to influence a customer loyalty management system.
Also follows from a square of combinations that:
- the head with style of management P will be ineffective in systems management of efficiency and accounting,
- the head with style of management E will be ineffective in systems management of loyalty and accounting,
- the head with style of management of I will be ineffective in project management and a customer loyalty,
- the head with style of management of A will be ineffective in project management and performance management.
It should be noted that efficiency rate is considered, first of all, in terms of interest of the head in management of these or those tools. Really, the head with the expressed style of effectiveness will hardly be inspired by work with the accounting systems. And the head with the expressed style of administration will hardly be interested in project management or occupation of building of a system of efficiency of the organization. Sellers of information systems can mean these circumstances, for more effective communication in sales process. It is interesting that in the further analysis it is possible to observe not only influence of level of the management on tools of business processes, but also influence of tools of business processes on management level.
This approach will allow to approach more consciously need of use of information systems and to pick up the optimal decision relevant to a stage of development of the company with a reliable basis for further growth. Any company will be able to find the unique "gold" way of permanent development and improvement which will allow to become "supercompany" significant and valuable to shareholders, employees, clients and society in general.
List of references
1. Adizes I. Ideal head: Why they cannot become and that / Itzhak Calderon Adizes from this follows: The lane with engl. — M.: Alpina Business of Axle boxes, 2007. — 262 pages.
2. Adizes I. Management of lifecycle of corporation. – SPb.: St. Petersburg, 2007. – 384 pages.
3. Adizes I. Managing changes (+CD). – SPb.: St. Petersburg, 2008. — 224 pages.
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