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520 Part Four Building and Managing Systems

13.1 SYSTEMS AS PLANNED ORGANIZATIONAL
CHANGE

B uilding a new information system is one kind of planned organiza-
tional change. The introduction of a new information system involves
much more than new hardware and software. It also includes changes
in jobs, skills, management, and organization. When we design a new
information system, we are redesigning the organization. System builders
must understand how a system will affect specific business processes and the
organization as a whole.

SYSTEMS DEVELOPMENT AND ORGANIZATIONAL
CHANGE

Information technology can promote various degrees of organizational change,
ranging from incremental to far-reaching. Figure 13.1 shows four kinds of
structural organizational change that are enabled by information technol-
ogy: (1) automation, (2) rationalization, (3) business process redesign, and (4)
paradigm shifts. Each carries different risks and rewards.
The most common form of IT-enabled organizational change is automation.
The first applications of information technology involved assisting employees
with performing their tasks more efficiently and effectively. Calculating
paychecks and payroll registers, giving bank tellers instant access to customer
deposit records, and developing a nationwide reservation network for airline
ticket agents are all examples of early automation.

FIGURE 13.1 ORGANIZATIONAL CHANGE CARRIES RISKS AND REWARDS

The most common forms of organizational change are automation and rationalization. These relatively
slow-moving and slow-changing strategies present modest returns but little risk. Faster and more
comprehensive change—such as redesign and paradigm shifts—carries high rewards but offers
substantial chances of failure.

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