Effective transformation process

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The research evolutes the relationship among the information systems and change management in modern enterprise and that happens in and across the organization. This change involves in multiple dimensions. Information systems revolution virtues unique consideration of organization's cause and effect in the effective transformation process. To explain this, we have to consider two important variables that deals with the information like the location of information and the rights of decision making in an organization.

It is not possible to keep the structure of the organization unaffected, if the information systems are radically changing.

Depending on the costs of information transmission and processing, either the "MIS solution" of transferring information, or the "organizational redesign solution" of moving decision rights, can be an effective approach toward achieving the necessary collocation of information and decision rights.

Considering the interplay among information, incentives and decision rights in a unified fashion leads to new insights and a better organizational planning. The papers in the special issue address different facets of this interaction. Despite significant progress, our understanding of the economic role of information systems in organizations remains in its infancy. We conclude that successful design of modern enterprise will require further narrowing of the historic gap between research in information systems and research in economics.

The organization of work is in the midst of transformation. In many industries, mass production by large, vertically-integrated, hierarchically-organized firms is giving way to more flexible forms of both internal organization and industrial structure. Work is increasingly accomplished through networks of smaller, more focused enterprises. The resulting structure of loosely coupled sub-organizations blurs the boundaries of both firms and industries.

A canonical case in point is the computer industry. In the past, the industry was dominated by large, vertically-integrated firms such as IBM and Digital Equipment which created products and services throughout the value chain -- from the microprocessor level all the way up to the provision of solutions. The vertical structure is now being replaced by a series of layers, each of which is, in effect, a separate industry. Value is generated by ever-changing coalitions, where each member of a coalition specializes in its area of core competence and leverages it through the use of tactical or strategic partnerships. Internally, team structures are replacing the traditional hierarchical form, and the Silicon Valley model of internal organization is emerging as a clear winner.3 Internal incentives are increasingly based on performance, and this further blurs the differences between inter- and intra-firm contracts. In sum, modern enterprise is undergoing major restructuring.

In this short paper we briefly discuss the newly emerging organizational paradigms and their relationship to the prevailing trends in information technology (IT). We argue that IT is an important driver of this transformation. Finally, we place the studies selected for this special issue of the Journal of Organizational Computing within this context.

As an electronic business environment changes more rapidly under the globalization, even small and medium size companies also change their business. With enterprises becoming bigger and bigger, the legacy business systems may not be flexible enough to adapt this change and the discordance between business and information systems in their organization may occur (Holland and Light, 1999). Therefore, recently most companies use an Enterprise Resource Planning (ERP) system for improving core competency.

There are several definitions of an ERP system. Especially, American Production & Inventory Control Society defines ERP as "an accounting-oriented information system for identifying and planning the enterprise-wide resources needed to take, make, ship, and account for customer orders". Gartner Group describes ERP as "a set of applications designed to bring business functions into balance and represents the next generation of business systems". On the other hand, ERP is comprehensive packaged software solutions that aim for total integration of all business functional areas. Thus, the authors can conclude that an ERP is the generic name of this new class of packaged application software for enterprise integration under electronic business environment.

The term, ERP has been introduced in the early 1990s as the successor to Materials Requirement Planning II, itself a successor to the Materials Requirements Planning software that results from requirements for greater control and efficiency in manufacturing systems. While ERP has its origins in manufacturing and production planning systems, the scope of ERP has expanded in the mid-1990s to include other functions: order management, financial management, production control, quality control, asset management and human resources management. The concept of ERP could be named as "back-office" functions. Recently, the functional scope of ERP systems has further expanded to include various functions such as Electronic Commerce, Supply Chain Management, and Customer Relation Management. The concept of ERP could be named as "front-office" functions. Therefore, ERP may cover all business functional areas and ERP system has became a core business system in the global electronic business environment.

Since the 1990s, companies of all sizes and industries have tried to adopt ERP systems in order to improve business processes or replace legacy business systems. An ERP system typically has modular hardware and software units and "services" that communicate on a local area network. The modular design allows a business to add or reconfigure modules (perhaps from different vendors) while preserving data integrity in one shared database that may be centralized or distributed. ERP systems are often incorrectly called back office systems indicating that customers and the general public are not directly involved. This is contrasted with front office systems like customer relationship management (CRM) systems that deal directly with the customers, or the e-Business systems such as e-Commerce, e-Government, e-Telecom, and e-Finance, or supplier relationship management (SRM) systems.

ERP is a way to integrate the data and processes of an organization into one single system. Usually ERP systems will have many components including hardware and software, in order to achieve integration, most ERP systems use a unified database to store data for various functions found throughout the organization. The term ERP originally referred to how a large organization planned to use organizational wide resources.

According to Jensen and Meckling, informational variables are keys to the structure of organizations because the quality of decisions is determined by the quality of information available to the decision maker. The co-location of information and decision rights enables the decision maker to make optimal decisions. The implementation of this co-location depends on the nature of the pertinent information. Jensen and Meckling distinguish between "specific knowledge" which is localized, difficult to represent and transfer, and depends on idiosyncratic circumstances, and "general knowledge" which can be easily summarized, communicated and shared by decision makers.

Now, there are two ways to bring information and decision rights together:

  1. "The MIS solution": transfer the information required for the decision to the decision maker, using the organization's (possibly non-automated) information systems; or
  2. "the organizational redesign solution": redesign the organizational structure so that the decision making authority is where the pertinent information is. By definition, general knowledge which is useful for a decision calls for the "MIS solution" because it can be transferred at low cost. In contrast, when specific knowledge plays a key role in a decision, the best solution calls for restructuring decision rights so as to provide the decision authority to the one who possesses or has access to the pertinent information (since the transfer of specific knowledge is too costly).

Organization is a system. Money, man power, materials, machines and equipment, data, information and decisions are constantly flowing through any organization.

Organizational Structure

Organizational structure refers to organizational submits and the way they are related to the overall organization. Organization charts are an enormously efficient way to address employee, organizational and enterprise information. This chart shows the flow of information in large amount as a visual diagram instead of regular tabular format of names and numbers. We can understand the greater values of the organization by using this framework to manage change and communication to allow the managers to make decisions regards to the resources available and to communicate operational information. So to understand the flow of information in Wiz Technologies, it is necessary to draw the organizational chart.

Information Resource Management:

Information Resource Management is a comprehensive approach to the acquisition, management and control of all aspects and components of an Information system. To capture the interrelationships among the resources, IRM requires management from these aspects.

  1. The first aspect of IRM is information management which involves recognizing the value of data and information to the firm.
  2. The second aspect of IRM is technology management - recognition of the value of information technology to the firm.
  3. The third aspect of IRM is distributed management - recognition that where systems are located, used, or developed often makes a significant difference in overall performance.
  4. The fourth aspect of IRM is functional management - recognition that the IS function, like other functional areas, must be managed, directed and controlled.
  5. The fifth aspect of IRM is strategic management - recognition that IS holds the potential to obtain a competitive advantage for firms that employ it wisely.

The work procedure of the department will be as follows

The Sales and Marketing Department

In an organization, sales and marketing plays vital role as this process has a direct impact on the sale and profit of the organization. It is not possible to do a proper marketing separately without any support from the other departments.

It has got a very close association with other departments like operations, finance and human resource.

This team is responsible for the effective marketing of the Wiz Technology's solutions. They will focus on to make sure that the company has a proper mechanism to market the solution available. They will meet the client and explain about the customized solutions Wiz can provide to the customer that can improve their business and reduce workload. If the client wishes to opt for a specific product or agrees for the development of software applications or a web application then the marketing team will gather the required information from the client that is need for the application development.

For example if the client likes to develop a website for their company then the information required to develop the web site mentioned below will be collected

  1. In what technology the application need to be developed? For example HTML or ASP.NET or Java or open source applications like PHP or available to choose.
  2. Do the pages are static or dynamic? Do they need Content Management System (CMS) to maintain the dynamic date?
  3. Is there any Database requirement is their? If so what date base need to be used like MS-SQL, MySQL, Oracle, or MS-Access
  4. How many web pages needed?
  5. What are the features like E-mail solutions, subscribe news letter, web forms etc. needed?
  6. Does the customer want to do e-commerce on his website?
  7. What kind of payment gateway to be integrated?
  8. Number of users going to use the website
  9. If the client wants to develop an E-commerce website what kind of products and/or services he is handling.
  10. If the client wants to sell goods and products on the internet then how many products they will be handling?
  11. Does the client have respective images for the products or the images need to be developed?
  12. What is the timeline for the project

Based on the input given by the client the marketing executive calculate number of days and hours required and generate the required man power. Then they will work out the total costing and timeline for the project and the scope of the project along with the quotation and payment terms will be provided to customer.

Once the customer is happy and provides approval for the project, the project will be handed over to technical team and accounts team for the next phase of development.

Issues observed

  1. They don't have customized solution to estimate the number of hours required for any particular task or that shows previous project time lines.
  2. They need to calculate the pricing manually.
  3. There won't be able to contact or co-ordinate with other departments for the better optimization. In case if a customer has a query then that has to separately E-mail to the particular department and wait for the answer.
  4. The process takes longer time.
  5. The manual process delays the progress of the project a lot.

Expectations from marketing department

The department expecting to implement some software that will enable them to properly maintain the complete client details, phone numbers and address details of the client.

The software must be able to calculate the hours and prices automatically when the client requirements entered. This calculation takes a considerable amount of time.

When a project is finalized, the mails should be automatically dispatched to the technical and accounting team.

The software must be able to answer all enquires of customer and in case should be able to schedule a chat to co-ordinate the technical and accounts team.

The software should be able to give reminders and follow-ups in the form of mails and automated reminders.

Accounts Department

The basic purpose of Accounts Department is to maintain the records of financial transactions of Wiz in a precise, transparent and time-bound manner. This is also responsible for preparing accounts on monthly and yearly basis. The operation of preparing monthly accounts is to enable one to know the financial position of the company on a particular date. The duties are as follows

  1. Preparing and passing of salary bills for all regular employees of the company and filing of yearly Income Tax returns.
  2. Preparing and Passing the salary bills of employees who are appointed on contract basis.
  3. Preparation and submission of monthly Accounts.
  4. To maintain the Voucher Registers and all the monthly vouchers properly.
  5. Preparation and submission of monthly progress reports of works-in-progress/targets.
  6. To maintain the petty/daily cash with petty cash register.
  7. Follow the clients for the payments after the project has completed the respective stage.

Issues Observed

  1. All the accounts are maintained in the form of excel sheets. The complete entries are done manually. The manual process delays the work.
  2. There is a chance of miss calculation and prone to errors.
  3. As there is no systematical software for smooth and effective operations of day to day operations, the work is more complicated.
  4. It's very difficult to follow the payments from clients at various stages of project. Because they have to wait for the confirmation from the technical department by E-mail then they have to call the customer. If the information from technical department gets delayed due to various reasons the whole payment process gets delayed.
  5. Once the payment is received the same has to be informed to other departments so that the next phase can be initiated. If not properly handled the whole project gets delayed.
  6. The data is stored in the excel format in a single system. In case if the system crashes then whole the data is lost.

The expectations

Proper software is required to maintain the accounts in automated way. The software must be able to

  1. Calculate the salaries and wages
  2. Able to calculate the taxes and pay it automatically and systematically without any delays.
  3. Should be able to send mails and payment updates to the respective departments automatically.
  4. The details must be saved in the server with proper security so that even if the individual system crashes also, there should be no loss of data.
  5. Handle the petty cash effectively give automatic updates and reminders about the day to day payments and cash balance.
  6. Fasten up the transaction by creating Invoice, purchase order statements
  7. Easily modify and create reports.
  8. It should be able to easily manage most transactional accounts like payments of the bill and processing credit.
  9. Completely centralize all financial operations and transaction records

Technical department

This department is responsible for the complete development of the application. Once they receive the order confirmation from the marketing department and advance payment received confirmation from the accounts department a team leader will be allotted for the project. He will interact with the client for the basic requirements and statement of work that acts as key for the software contract package. It is vital to understand the requirements of the customer at the start of the project that will result in higher customer satisfaction.

First Phase includes gathering initial requirements is very important as that easier to understand the flow of the project.

  • Important features and functions required by the application have to define including graphical interface, management reports and usability.
  • The jobs the users want to use the software to do
  • Key features and functions
  • Reports and results the software should produce
  • Other software that needs to interface to this software
  • User interface description
  • Other vital requirements of users and clients.

Once this is finalized a team is formed for the development of application based on the software requirements that comprises of

  1. Team leader
  2. Developer
  3. Graphic designer
  4. Database designer.

The application development happens in stages and at each level the development team should be in co-ordination with the client and the accounts department. Each and every phase of design will be sent to client via e-mail for approval. Once the client approves, the next stage will be initiated.

Once the application is completed, that will be tested for bugs or errors by running each every link. After the satisfactory results the application will be handed over to client for testing. If the client is happy then the final version will be completed with documentation and handed over to the customer.

Then if any enhancement required or maintenance required that will be done based on the client requirement.

Issues observed

The development phase is very critical and a lot of co-ordination and involvement is required. The co-ordination is happening via phone and e-mail. But this will be in different systems or computer as different users are communicating. For example the marketing and accounting team won't know the technical issues that are happening.

The accounting team won't know the progress of the application till somebody from technical department informs. If someone is on leave then the complete communication comes to halt as his system or computer will be switched off.

This manual process delays the progress of the application to great extent. The developers maintain a manual time sheet in the excel format. There is a great chance of errors and later illegal corrections. As the communication is in different systems, sometimes there is chance of denial of receiving message.


A more automated, system driven mechanism than manual driven is needed. A more transparent process that enables the client and other departments to see the exact stage of the project is needed.

The application should be able to send the E-mail reminders and automated stages of application development to the respective people.

That also should provide the platform to share the views of client and other members by a common application.

An application like chat program has to be integrated so that the client, project team members can integrate and the departments related the project can communicate on common platform and the same can be recorded for the future purpose.

The team members of the project has to communicate with each other like to know the status of database quarries or errors, image development and modification, coding and related bugs and errors and this communication must be through proper channel that should help in better co-ordination.

Human Resource and administrative Department

Human resource and administrative department is responsible for tracking data points on each employee that includes experiences, abilities, talents, data, personal histories and payroll records.

The core activities of HR and Admin department include labor and time management, payroll, Absence management, Performance management, Recruitment.

Problems observed

There is no proper mechanism to maintain the employee movement activities. It has been observed that few employees who came late to work and just sign the attendance and also few times signing on the absentee days.

If an employee takes leave, the information had to be circulated along the project team members so that the project progress won't be disturbed.

The employees maintain a manual time sheet in the excel format. There is a great chance for alterations at later point of time.

Apart from this the application should be able to generate all the forms utilized in the organization. Each and every department has its own need or requirement to print and maintain some kind of forms related to the nature of work handled by it. The following forms are used in the organization


Quotations must be prepared based on requirements of the customer's requirement. When preparing it should help the user with stock details like whether the stock is available or to be placed an order with manufacturer. They should be able to modify the quotation any time and must be able to convert in to a sales order without recreating or retyping the content again.

Sale orders

The sales order can be treated as fully control document because the sales orders are the basic for all process documents like invoice, shipment and if required to raise a purchase order.

Wiz handles three types of sale orders.

  1. Standard order: this is general basic sales order that check the availability of stock, if the stock available then the order should be accepted and then put in the queue for fulfilling by the back store and an invoice need to be generated.
  2. Prepaid orders: This order should make sure that the customer pays in full before processing the order. So the system should wait for the payment process and once the payment is seen the order will be queued for fulfilling and invoice generation.
  3. Point of sale: This is direct on spot sale and should generate the invoice, update the stock depreciation automatically.


Once the sale order is prepared, based on the requirements shipments should be raised immediately or after goods received. It should allow capturing the movement of the goods by stock pickup notes and dropping notes.

Customer Returns

The ERP software should automate the organizations customer return processes. When a customer returns the goods a "return note" of materials should be created and should be properly linked to update stock details, sales orders and shipment.

Customer Invoices

The ERP System should be able to prepare invoices based on general business rules or according to the specific terms and condition and arrangements in place with the customer.

Invoices should be generated after each and every stage of the project and project completion, after the execution of sales order and goods shipment, at predefined schedule time as per the agreement with the client.


When a sale order executed a receipt need to be generated as per the requirements like tax calculation. Entering a Sales Order or Invoice, for cash transactions, a Cashbook entry need to be generated automatically. And For credit, check, and direct debit transactions; a payment should be created against the appropriate customer / bank account.