IT VALUE CREATION METHOD 9: IS/IT-ENABLED BUSINESS TRANSFORMATION

Level 1: Information Technology Efficiency

the basic one for leveraging IS/IT functionality within a business through localized exploitation.
The expression 'localized exploitation' is chosen to indicate that, in many cases, decisions to deploy isolated
systems (e.g., a customer order-entry system, inventory control system, internal electronic mail system) are
decentralized to the appropriate functional, operational managers.
best viewed as the deployment of standard IS/IT applications with minimal changes to the business
processes.
main weakness is that competitors can easily imitate standard technical applications with minimal changes
to the underlying business processes to neutralize sources of strategic advantage.

Level 2: Information Systems Integration

a logical extension of the first, reflecting a more systematic attempt to leverage IS/IT capabilities throughout
the entire business process.

involves two types of internal systems integration: technical inter-connectivity (dealing with the interconnectivity and interoperability of the different systems and applications throughout a common IT platform)
and business process interdependence (dealing with the interdependence of organizational roles and
responsibilities across distinct functional lines).

Often, firms allocate more attention to technical inter-connectivity than to business process
interdependence.

Efforts at technical inter-connectivity have been enhanced by significant developments in connectivity

capabilities during the past decade, such as increased availability of integrated technological solutions and
favorable cost-performance trends.

E
fforts at business
process interdependence should first emphasize the view that the firm should develop its own vision for
internal integration after assessing the benefits of integrating current businesses processes. If a company
deems the current processes to be effective, then it is important to articulate the specific objectives of
internal integration: for instance, some firms may seek to create cross-functional, horizontal business
processes that are parallel to the traditional organization. Alternatively, the logic for internal integration may
reflect a transition toward fundamentally redesigning the business processes over a period of time.

Efforts at business processes interdependence should then emphasize the need to ensure that marketplace
considerations guide internal integration efforts. Simply fine-tuning existing outmoded processes through
current technological capabilities does not create the required organizational capabilities.