IT Impact on Organizations

Many organizations are struggling to understand the reality of an economic transition from the industrial economy to a global network economy. In this new reality organizations must become much more agile, innovative, and entrepreneurial and not loosing the efficiency, power, and reach. Choosing the right business model become very challenging. How to build the capabilities that would align the organization with the environment and the chosen strategy to quickly and effectively respond to opportunities and threads. Most executives confront problems that they do not wish to sacrifice efficiency for speed; neither can they abandon authority and control as they empower others. It can be characterized by wish: "we want to be global and local, big and small, and radically decentralized with centralized reporting and control."

Many researches suggests that IT was seen as a key enabler of controlling operations while also providing real-time information analytical tools. In 1950s and 1960s some of the hybrid organizational solution model, matrix,emerged. Companies that adopted these approach had the same drive as we have now days: need to be adoptive, information-intensive, team-based, collaborative, and empowered.  But companies that adopted the hybrid design of the 1960s through 1980s soon learned that the new structures and systems bred conflict, confusion, information overload, and costly duplication of resources. Over past decades, strategic thinking has outdistances organizational capabilities. One of the "lessons learned" why matrix organizations didn't succeed in the past was understating about organization's inability to provide and manage timely information. All pressure of handling complexity was put on managers directly. They would have dazzling array of conflicting information. 
Only the now days IT can provide the capabilities of meeting the information challenge and making the matrix organizational structure successful.
Some other important "lessons learned" from the past:

• Speed counts, but not at the expense of control.The faster the pace, the greater the need to monitor business operations and clearly define and enforce the rules of the road.
• Empowerment is not anarchy. The isolated efforts to empower employees can lead to disaster when not accompanied by more comprehensive redefinition of authority and control through organization.
• Transforming an organization requires more than just changing the structure.

For the success there should be a comprehensive approach to organization design that includes analysis and realignment of capabilities within four key areas of business model design: processes and infrastructure, people and partners, organization and culture, and leadership and governance. Improved access to information and high-capacity networked communication systems are core elements of redesign in all four areas.

Resource: Applegate, L. Corporate Information Strategy and Management. 2009.