DIGITAL ORGANIZATION
Introduction
Digital organization = org that implements Information Systems (IS)
Learn why+how companies use information technologies
hwvr companies often still use excel => new systems are often expensive + difficult to implement
Building blocks for digitizing org
- Technology
- Organisation
- Management
connection: management chooses technology, and technology will also improve management
Strategies competitive advantage => use IS to realize this advantage
- Lowest cost (eg: Ryanair app to replace employer tasks -> lower costs)
- Differentiated product (eg tesla)
- Market niche (products made especially for a small branch, specific audience)
- Customer and supplier intimacy ( eg. Netflix: personal recommendations)
Role IS
- Support current course
- Driver fundamental change
- Source of new companies and industries
New technology, strategies, industries,… highly impact current society and other companies
Rapidly changing environment
PPP= profit – planet – people companies shifting from only profit as objective to also taking planet and ppl
into account
1
,1. Chapter 1
Learning objectives:
o How are information systems transforming business, and why are they so essential for running
and managing a business today?
o What is an information system? How does it work? What are its management, organization, and
technology components? Why are complementary assets essential for ensuring that information
systems provide genuine value for organizations?
IT capital investment constant growth pattern even through crisis (2008, Covid)
1.1. Industrial revolutions
Ingredients
1) Technological innovation
2) Transformation of the ‘way of working’
3) Transformation of the ‘way of living’ (impacting customer requirements, lifestyle, society, planet)
1st: 1784-1870
o Steam power, mechanization, weaving loom
o Factories w machines
o Urbanization
o Gas lighting
o Increase productivity
o Poor working conditions, low wages, child labour
o Pollution
nd
2 : 1870-1969
o Electricity
o Production lines
o Mass production (standardization)
o Taylorism (=the science of dividing specific tasks to allow employees to complete assignments as
efficiently as possible)
“human robots”, repetitive work
o Railroads global sales
rd
3 : 1969-2011
o Automation (robotics)
o Digitalization (computers, internet)
o Lean management (self-steering teams, job autonomy)
o Reduction of manual work (new skills)
o Improved ergonomics
o Globalisation & e-commerce (competition for job, resources, ideas)
o Offshore production (drastic reduction of costs of operating and transacting on global scale)
th
4 : 2011- …
i.a.
o IoT => devices/machines full of sensors connected to the internet
Has caused big changes
Possibility to collect data, transform this in useful information/solutions/actions
Eg: cyber- physical production systems IoT used to help machine operator, decrease
amount ppl needed in production
o AI
2
, Allow for development new business models
o Personalization ( mass customization) ability to create personalized products at same
price as standard
o Servitization = transformation of a business to compete through a combination of
services and products, rather than products alone
o Platforms = uses technology to connect people, organizations and resources in an
interactive ecosystem in which high value can be created and exchanged
5th? Not really an industrial revolution (still 4 th) => no new technology or innovation
o Further development and broader usage of current (new) technologies
Transition to sustainable, human-centric and resilient European industry
1.2. Productivity paradox
- The change from steam to electrical power took 50 years, why: they used new technology to replace
what previous tech did so no noticeable change in productivity, conditions, profit,…
- Look for ways to use the new technology to support new tasks/ideas/activities that will serve the human
centric environment
1.3. What is an IS
= set of interrelated components that collect, process, store and distribute information to support
decision making and control in an organization (collects and processes data to support decision making)
- Activities
o Input: Captures raw data (internal or external)
o Processing: Converts raw data into meaningful form (i.e. information)
o Output: Transfers processed information to support decision-making
o Feedback: Output returned to appropriate members of the organization to help them evaluate or
correct the input stage
- Environment factors not collected in the data also play a role!
1.4. Dimensions of IS
- Organizations
o When implementing a new system keep following elements in mind: eg. Blackboard
1) Organizational structure
Who will be implementing it, what is their role, what department
2) Business processes
How would they use it?
Can they use it, do they have the right skills?
3) Business culture
How do they think abt technology?
4) Organizational politics
Could there be reasons to boycott the usage ?
5) Organizational environment
o Hierarchical structure
Senior management Makes strategic decisions about products and services to ensure
firm performance
Middle management Carries out the plans of senior management, ensures
implementation
Operational management Responsible for monitoring daily activities
o Functional domains
3
, => depending on where the ppl are in the company -> different needs, expectations
Sales and marketing
Human resources
Finance and accounting
Manufacturing and production
o First understand the organization and its needs to select the right information technology that
will then be implemented, this new techn will also cause a certain change in the organization
o Trends: changes in organizations (see also chapter 3)
In a fully digital firm:
Significant business relationships are digitally enabled and mediated
Core business processes are accomplished through digital networks
Key corporate assets are managed digitally
More collaborative, less emphasis on hierarchy and structure
Higher-speed/more accurate decision-making based on data and analysis (data-
driven)
More willingness to interact with consumers (social media) and suppliers
(ecosystem)
IT innovations require upskilling and reskilling of employees
Digital firms offer greater flexibility in organization and management
->Time shifting (eg. Shops open 24/7, online shopping at any time)
->Space shifting (able to purchase things wherever you are, from everywhere)
- Management
o Managers sense business challenges and opportunities
o set organizational strategy & business models in response
o allocate resources to carry out strategy
o must act creatively
Creation of new products and services (business model)
Occasionally re-creating the organization (structure, processes, culture)
Management decides the right IT system, and uses IT to support management decisions
o Every company has a different strategy so will need a different technology
Trends:
o Management going mobile and remote
o Use social networks, collaboration tools
o Business intelligence applications provide real-time insights and support decision-making
o Managers have to rethink strategy and business model
- Information Technology (IT)
o Fast evolving IT innovations (Iot, Big data, AI,…)
o Gartner Hype Cycle: is the hype real?
Innovation trigger
Early proof-of-concept stories
A lot of media attention
Often no usable products or
unproven commercial viability
Peak of inflated expectations
Some success stories
Some companies take action
High hopes for the future
Trough of disillusionment
4
Introduction
Digital organization = org that implements Information Systems (IS)
Learn why+how companies use information technologies
hwvr companies often still use excel => new systems are often expensive + difficult to implement
Building blocks for digitizing org
- Technology
- Organisation
- Management
connection: management chooses technology, and technology will also improve management
Strategies competitive advantage => use IS to realize this advantage
- Lowest cost (eg: Ryanair app to replace employer tasks -> lower costs)
- Differentiated product (eg tesla)
- Market niche (products made especially for a small branch, specific audience)
- Customer and supplier intimacy ( eg. Netflix: personal recommendations)
Role IS
- Support current course
- Driver fundamental change
- Source of new companies and industries
New technology, strategies, industries,… highly impact current society and other companies
Rapidly changing environment
PPP= profit – planet – people companies shifting from only profit as objective to also taking planet and ppl
into account
1
,1. Chapter 1
Learning objectives:
o How are information systems transforming business, and why are they so essential for running
and managing a business today?
o What is an information system? How does it work? What are its management, organization, and
technology components? Why are complementary assets essential for ensuring that information
systems provide genuine value for organizations?
IT capital investment constant growth pattern even through crisis (2008, Covid)
1.1. Industrial revolutions
Ingredients
1) Technological innovation
2) Transformation of the ‘way of working’
3) Transformation of the ‘way of living’ (impacting customer requirements, lifestyle, society, planet)
1st: 1784-1870
o Steam power, mechanization, weaving loom
o Factories w machines
o Urbanization
o Gas lighting
o Increase productivity
o Poor working conditions, low wages, child labour
o Pollution
nd
2 : 1870-1969
o Electricity
o Production lines
o Mass production (standardization)
o Taylorism (=the science of dividing specific tasks to allow employees to complete assignments as
efficiently as possible)
“human robots”, repetitive work
o Railroads global sales
rd
3 : 1969-2011
o Automation (robotics)
o Digitalization (computers, internet)
o Lean management (self-steering teams, job autonomy)
o Reduction of manual work (new skills)
o Improved ergonomics
o Globalisation & e-commerce (competition for job, resources, ideas)
o Offshore production (drastic reduction of costs of operating and transacting on global scale)
th
4 : 2011- …
i.a.
o IoT => devices/machines full of sensors connected to the internet
Has caused big changes
Possibility to collect data, transform this in useful information/solutions/actions
Eg: cyber- physical production systems IoT used to help machine operator, decrease
amount ppl needed in production
o AI
2
, Allow for development new business models
o Personalization ( mass customization) ability to create personalized products at same
price as standard
o Servitization = transformation of a business to compete through a combination of
services and products, rather than products alone
o Platforms = uses technology to connect people, organizations and resources in an
interactive ecosystem in which high value can be created and exchanged
5th? Not really an industrial revolution (still 4 th) => no new technology or innovation
o Further development and broader usage of current (new) technologies
Transition to sustainable, human-centric and resilient European industry
1.2. Productivity paradox
- The change from steam to electrical power took 50 years, why: they used new technology to replace
what previous tech did so no noticeable change in productivity, conditions, profit,…
- Look for ways to use the new technology to support new tasks/ideas/activities that will serve the human
centric environment
1.3. What is an IS
= set of interrelated components that collect, process, store and distribute information to support
decision making and control in an organization (collects and processes data to support decision making)
- Activities
o Input: Captures raw data (internal or external)
o Processing: Converts raw data into meaningful form (i.e. information)
o Output: Transfers processed information to support decision-making
o Feedback: Output returned to appropriate members of the organization to help them evaluate or
correct the input stage
- Environment factors not collected in the data also play a role!
1.4. Dimensions of IS
- Organizations
o When implementing a new system keep following elements in mind: eg. Blackboard
1) Organizational structure
Who will be implementing it, what is their role, what department
2) Business processes
How would they use it?
Can they use it, do they have the right skills?
3) Business culture
How do they think abt technology?
4) Organizational politics
Could there be reasons to boycott the usage ?
5) Organizational environment
o Hierarchical structure
Senior management Makes strategic decisions about products and services to ensure
firm performance
Middle management Carries out the plans of senior management, ensures
implementation
Operational management Responsible for monitoring daily activities
o Functional domains
3
, => depending on where the ppl are in the company -> different needs, expectations
Sales and marketing
Human resources
Finance and accounting
Manufacturing and production
o First understand the organization and its needs to select the right information technology that
will then be implemented, this new techn will also cause a certain change in the organization
o Trends: changes in organizations (see also chapter 3)
In a fully digital firm:
Significant business relationships are digitally enabled and mediated
Core business processes are accomplished through digital networks
Key corporate assets are managed digitally
More collaborative, less emphasis on hierarchy and structure
Higher-speed/more accurate decision-making based on data and analysis (data-
driven)
More willingness to interact with consumers (social media) and suppliers
(ecosystem)
IT innovations require upskilling and reskilling of employees
Digital firms offer greater flexibility in organization and management
->Time shifting (eg. Shops open 24/7, online shopping at any time)
->Space shifting (able to purchase things wherever you are, from everywhere)
- Management
o Managers sense business challenges and opportunities
o set organizational strategy & business models in response
o allocate resources to carry out strategy
o must act creatively
Creation of new products and services (business model)
Occasionally re-creating the organization (structure, processes, culture)
Management decides the right IT system, and uses IT to support management decisions
o Every company has a different strategy so will need a different technology
Trends:
o Management going mobile and remote
o Use social networks, collaboration tools
o Business intelligence applications provide real-time insights and support decision-making
o Managers have to rethink strategy and business model
- Information Technology (IT)
o Fast evolving IT innovations (Iot, Big data, AI,…)
o Gartner Hype Cycle: is the hype real?
Innovation trigger
Early proof-of-concept stories
A lot of media attention
Often no usable products or
unproven commercial viability
Peak of inflated expectations
Some success stories
Some companies take action
High hopes for the future
Trough of disillusionment
4
