The impact of technology on organizational performance

[Pages:10]The impact of technology on organizational performance

Yves-C. Gagnon and Jocelyne Dragon

Improvement in productivity is due not only to technology, but also to how it's integrated into the organization.

Repeated economic crises and steadily increasing competition, brought about in particular by the globalization of markets, are forcing an unprecedented rationalization of resources. Improved productivity has thus become a concern of all organizations, both public and private. At the same time, technology is developing with blinding speed and is becoming the principal instrument for meeting this concern.1 This explains why many municipalities are investing large amounts of money in implementing information systems. However, the advantages offered by technologies, especially in terms of enhancing productivity, depend upon how these technologies are integrated into an organization.

Many municipal officials realize that their systems departments do not have the necessary resources to meet the demands made on them. More and more time is required to complete projects and the work piles up.

Yves-C. Gagnon is a full professor at the ?cole nationale d'administration publique. He has a PhD in Management from the ?cole des hautes ?tudes commerciales in Montreal, an MBA in Organizational Information Systems from Laval University and an MSc in Industrial Relations from the University of Montreal. Dr. Gagnon teaches and conducts research in technology management, human resource management and labour relations. He also has some twenty years' experience as a manager with organizations in the public and parapublic sectors.

Moreover, these officials often find that technological, organizational and human resource development processes are not proceeding at the same pace within their organization, which makes them hesitant about adding new systems.2 Is the penetration of technologies really helping to improve the performance of municipalities? To answer this question, the extent to which information systems are incorporated into the culture and operations of municipal governments must be examined.

The concrete action system model developed by Gagnon and Landry and refined by Dragon outlines a strategy for investigating technological changes that affect unionized work places.3 As the authors note, "This road map, here called the concrete action system, tries to identify and characterize the principal actors involved in the activity of implementing systems, and then to establish the relationships among these actors."4

The concept of a concrete action system is based on the fact that an organization is a social system whose dynamics are grounded in the behaviour of groups of actors who develop particular strategies in a set of relationships

Jocelyne Dragon is the assistant director of administration and facilities with the recreation and community development department of the City of Saint-Laurent and is also a member of the management committee for the City's information highway project. She has a Master's degree in Public Administration.

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THE IMPACT OF TECHNOLOGY ON ORGANIZATIONAL PERFORM A N C E

that are subject to the constraints of the environment.5 Organizations contain individuals and groups who differ in their training and functions and have objectives that do not always coincide. Obviously, relationships differ according to context and are not spelled out in a formal structure such as an organization chart.

In such a context, systems development "provides the opportunity and the place for potential conflicts between interests, aspirations and values that involve something other than just technology."6 Figure 1 illustrates the concrete action system, showing the principal actors and how they relate to

each other when organizational information systems are adopted (i.e., the acquisition, successful implementation and use of a technology by an organization).7

The users/decision makers are senior managers who partially or completely control resources and influence the development of information systems.

The users/managers are those who, on behalf of the users/decision makers, supervise the implementation and operation of systems in collaboration with the designers. It is at their level that the collective agreement

FIGURE 1 Concrete action system

Users/Decision makers

Central labour organization

Other collective agreements

Other sites

Users/Managers/ Designers

Users/Managers

Collective agreement

Union representative

Local union

Other systems

Other sites

Designers

Users/ Operators

System

Clients

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is negotiated and interpreted, particularly with respect to the clauses concerning technological change.

The users/managers/designers run the systems department and are often the architects of the organization's information technology policies, which are ratified by the users/decision makers. The users/managers/ designers are responsible for the design and technical management of information systems.

The designers are the experts who design systems in collaboration with the users/managers and clients. They are, if not the only ones responsible for making systems operational, at least in charge of the work.

The users/operators produce inputs or receive raw outputs from the systems, which are thought out in terms of the clients. They are indispensable for the day-to-day operation of the systems, but do not have any direct power to change them.

The local union is located at the interface between the users/operators and the users/managers. The aim of the local union is to defend the immediate interests of its members, the users/operators.

The central labour organization is responsible for the overall long-term strategy, which provides a framework for and supports the actions of the local union.

The clients (users/decision makers, users/managers, etc.) are those whom the systems help directly in the performance of their duties.

The process

To study a contemporary pragmatic phenomenon, it is essential to be familiar with the experience of the actors and the context in which that experience takes place. We have selected the case of an anonymous City administration.8

We first analyzed many internal documents of this municipal government. These documents describe the City, the history of its administrative development and its strategic plan, technology strategy, systems department and the information systems it has adopted. Then, using a semistructured scheme, we carried out exhaustive interviews with a random sample of 20 permanent employees who

had at least five years of experience with the municipality and had taken part in implementing information systems. Each category of actor was represented in the sample (two users/decision makers, three users/managers, three users/managers/designers, two designers, two clients, six users/operators and two officials of the local union). The respondents worked at seven different hierarchical levels in seven different municipal departments (administration, finance, human resources, systems, municipal court, engineering and fire prevention). Apart from the designers, none of the respondents had taken courses in information technology as part of his or her basic training; however, some had taken professional development courses within the organization or, in certain cases, outside it.

The City and its technological development

The city whose government we selected had approximately 70,000 inhabitants and was typical, with residential, industrial and commercial functions. Its administrative structure comprised an executive level and twelve departments, which were grouped into three different modules: quality of the environment (industrial and business development, technical planning, engineering and environment); quality of life (recreation and community development, communications, public works and fire prevention); and administration (finance, systems, human resources and purchasing). For 1995, the City's total budget was $150 million, of which 24.7 percent was used to pay salaries and 0.19 percent ($305,600) to acquire information technologies. The budget of the systems department was $1.5 million.

The systems department was the administrative unit responsible for systematizing and computerizing activities for all the municipal departments. In concrete terms, this department developed budgets and investment strategies concerning information technologies for all of the City's administrative units. It also administered the organization's data and was responsible for the development of information systems. Finally, it ensured that users had the required information technology tools, that they knew how to use them properly and that the systems met their needs. All activities of the systems department had to meet the following objectives: improvement of the quality and efficiency of

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the services provided internally and externally; increased productivity; reduction of operating costs; and enhancement of the quality of information.

The City's technological development started with the introduction of information systems between 1965 and 1972, and involved automating a large number of manual activities that were already well established (payroll, tax collection, etc.). The information systems were useful for finance and the central computer was then used as an advanced form of accounting machine.

From 1972 to 1984, a number of other departments wanted to take advantage of computer resources and competition ensued as requests for new technology accumulated. Since the design of information systems was expensive and rationalization was therefore necessary, in 1983 management established a master plan for information systems. This plan recognized that managers were wholly responsible for running information systems. In particular, the plan noted: "Managers are the people who, through their day-to-day activities, are capable of managing these information systems; in other words, they see to it that existing systems are maintained in an acceptable operational condition and control the development of new information systems." The plan also emphasized that this responsibility must be exercised through close cooperation between the user departments and the systems department.

The master plan set the objective of diversifying the potential users of information technology, a new direction, since finance was then the principal user. It also emphasized the importance of continuing to invest money to maintain the proper operation of existing information systems and to ensure the development of new systems. Finally, the plan also advocated the creation of an information systems development plan. This three-year plan was to be revised annually when the budget was being prepared. Each department head was to present and defend his or her needs in relation to the resources allocated to information systems. The systems department would then analyze all requests and in collaboration with senior management, adjust the plan accordingly.

When the master plan came into force, 43 new information systems were added to the central computer and 225 new office automation applications were implemented. The introduction of the systems was gradual, although their

level of penetration differed within the City's 12 administrative units. The technological plan thus extended to the organization as a whole.

Over the previous 11 years, information systems represented an average annual expenditure of 1.3 percent of the City's total budget, of which 0.29 percent was for hardware and software, and 1.01 percent was the budget of the systems department. During this period, supervisory staff of this department was reduced by 66.6 percent, while the unionized workforce remained the same. What amounted to a change in position titles became necessary due to the introduction of microcomputer technology and an increase in the amount and diversity of technological equipment.

In 1984, the technological architecture changed from a central computer with ten terminals to a hybrid system of 266 work stations. This technological development and access to microcomputers brought a whole new dimension to information technology. A transition was made from centralized to decentralized management of information systems and the user became increasingly important. Microcomputer technology suddenly became a major strategic issue.

A steadily increasing number of employees were using computer technology to perform their work. Throughout the organization, the percentage of information technology users increased from 1.9 percent in 1984 to 51.25 percent in 1994. This rapid change had an impact in a number of areas: information systems, the organization of work, jobs, tasks, recruitment and training needs. In short, over a decade, the organization experienced complete technological change; consequently, it had to learn to manage the change and its repercussions in all units of the organization.

The perceptions of the actors

It is important to present the most important perceptions of each group involved in the concrete action system. These data enabled us to analyze the extent to which technology has contributed to the City's performance. Each group indicated how it perceived its role, the roles of the other groups, and the dynamics between them. Their assessment of the advantages associated with the use of organizational information systems follow.

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Users/decision makers

The executive director and the three assistant executive directors of the City were the users/decision makers. They had the power to influence the development of the information systems and, with regard to budget preparation, their role was to determine computerization needs. They were also responsible for allocating funds to carry out the three-year systems development plan. Their view was that the executive director cannot be a leader in the field, since to take advantage of information systems, the users in each department must themselves be convinced; consequently, the idea must emerge from the workplace. They believed that, at most, they could encourage department heads to ask questions. They also believed that the union did not have a role to play in the adoption of technology, and that the collective agreement protected the employees.

According to the executive director and the assistant executive directors, the implementation of information systems has some advantages. Automation of operations allows for faster data access and information processing. Information sharing, which reduces duplication of data input, increases communications between departments. On the other hand, the users/decision makers deplored the fact that the information systems had not produced the anticipated advantages in terms of reducing staff. They admitted that this was probably an illusion from the outset and they increasingly realized that this objective could not be attained. They also wondered how each of the departments was using the staff time that information systems enabled it to save.

The decision makers emphasized the lack of autonomy of the departments, a factor that impeded the integration of the systems. Some departments counted too much on long-term support from the systems department. While users expected the information systems to do everything, they did not fully exploit these systems. Each department was responsible for integrating its information systems with the help of a resource person. The systems department had the expertise and the information, but was not able to change the organization of work or to ensure that the information systems were integrated within the departments. According to the decision makers, autonomy could be achieved only through greater commitment on the part of the users/managers, who had to identify and assess needs so that work could be reorganized, then speeded up

with the help of technology. The managers had to manage the implementation by investing the necessary effort and stimulating the desire of the users/operators to participate. Finally, users/managers had to see to the development of a close collaboration and a cooperative relationship with the systems department.

As far as the users/operators were concerned, the decision makers emphasized that some had an aptitude for technology, while others did not. Consequently, the employees who were the most gifted in the area of information technology played an essential role with their colleagues where training in the workplace was concerned.

Users/managers

This category comprised the municipality's department heads. Their experience over the last few years had led them to recognize that their main role was to identify and analyze the needs associated with the acquisition and development of the information systems. As far as planning the addition of the new systems was concerned, they dealt with the preliminary needs assessment. Some of them emphasized the difficulties they had in assuming responsibility for managing and developing the systems because of their lack of technical knowledge.

The managers noted that information systems had undergone extensive development over the last few years. They also noted that the organization had not really changed ? at most, it had adjusted. For them, the systems department was the administrative unit that had ultimate control over planning, needs assessment, design and implementation of information systems, and ongoing training of users/operators. They made the users/managers/ designers and designers responsible for the performance of the information systems and for the performance of the users who employed these systems.

The advantages most appreciated by the users/managers were the availability of information that they could not obtain previously; the opportunity to meet deadlines more effectively, which considerably reduced the stress associated with preparing certain files; more rapid access to information; improved presentation of files; and more abundant and accurate data for analyzing files. However,

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users/managers agreed that the benefits provided by the information systems were soon forgotten. "The intangible nature of most of the benefits obtained to date is responsible for the tendency to say nothing about the contribution of information systems within the organization."

The users/managers believed that the users/decision makers were not focused on the management of the information systems. The users/decision makers were primarily concerned with the financial aspect and sought to increase productivity, and thus wanted to reduce staff. The users/managers wanted the decision makers to give the departments a clear mandate to increase the efficiency of their information systems. According to them, the departments were experiencing a virtually continuous process of implementation. This rapid development consumed large amounts of energy and was a source of problems. "Implementation is too rapid, and individuals are expected to produce at the same rate as before."

The systems department and the other departments of this municipal government did not have sufficient human resources to devote the required time to implementing and integrating the systems. It was becoming increasingly difficult to improve an information system once it was installed. In the systems department, it was always a case of crisis management. "This department allows itself to be carried along by events and cannot offer all the technical support required."

For the users/managers, the basic training taken by the users/operators was not a problem; it was the practical assimilation and transfer of knowledge in the workplace that were difficult. They noted that there was currently a roadblock because a number of users/operators felt powerless and were afraid of failure. "The employees are experiencing more pressures to adapt, and this is a source of stress, in particular for the older employees who are being outstripped by their younger colleagues."

According to the users/managers, professional development was left to the individual. The learning process was difficult and the opportunities for taking more than basic training varied from one department to another. "Some departments with more abundant human resources can afford a specialized resource, a leader. For the others, this solution is impossible."

Finally, the managers noted that training had an impact on the development and use of technology. Effective integration required increasingly specialized human resources. Unfortunately, such resources were not only rare, but also poorly distributed within the organization.

Users/managers/designers

The category of users/managers/designers comprised the managerial staff of the systems department. They were the true architects of the information technology policies and were in charge of implementing the technical design and management process of the information systems. They believed they had delivered the goods and emphasized that most of the mandates set out in the master plan of 1983 had been carried out, although deadlines had to be moved back in some cases. Consequently, it was time to develop a new master plan.

As far as the management of the equipment was concerned, the users/managers/designers noted that despite the rapid development of technology, their management style and choice of equipment ensured good technical performance. They were proud of the quality and reliability of the City's financial information systems. In their opinion, "The gains achieved through technology are reinvested elsewhere, and this makes it difficult to assess the benefits." Furthermore, the scarcity of human resources made it impossible to evaluate the information systems systematically. The users/managers/designers had to limit themselves to the informal feedback of users, and often relied upon requests for adjustment to assess the utilization of the systems.

According to the users/managers/designers, the City had not structured its organizational planning. The heads of the various departments did their own planning separately ? organizational planning was no more than the sum of these different plans. The advocated management style was reactive, influenced by the priorities of City Council. Consequently, the information systems development plan was not officially associated with the objectives of the organization.

Although all users were aware that the users/decision makers expected the introduction of technology to increase productivity and allow rationalization of human resources, everyone wanted the specific objectives of each department

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to be more clearly and precisely defined. To make progress in the technological area, the decision makers had to manifest a clear and decisive will, setting precise objectives and stating well-defined strategies. It was not enough for them merely to support the systems department. Concrete action was necessary. "Official support is needed so that all staff members will feel that the executive level and the managers support the cause."

The users/managers/designers thought that there was confusion among the respective mandates of the various stakeholders, resulting in a lack of consistency and collaboration with regard to management of the information systems. "The users/managers do not assume responsibility for their information systems. They delegate responsibility for managing, maintaining and developing the information systems to the systems department, thus creating frustration on both sides." It was essential that the users/managers realize that their lack of involvement influenced the attitude of their employees.

Regarding the technological aspect of the work, the users/managers/designers declared: "We would like to go much further, but technological development depends on the development of the users. Consequently, we cannot go any faster because if we did, our efforts would be a flop and we would be obliged to back off." They mentioned that some employees adapted very well, while others gave up. Some had weaknesses in the professional area because of their lack of formal education. "Most of the older staff are losers in this area. Technology is disturbing to them, and they often feel undervalued in relation to younger employees. Some have difficulty understanding technology, feel that it is beyond them and just mark time."

Designers

This category comprised the analysts and programmers who developed the information systems with the users/managers, users/operators and clients. The designers stressed that at the beginning of a project, the users/operators often exhibited resistance to change because they did not necessarily see the benefits to be derived from the introduction of new systems. "Users become more ready to accept technology when they realize that it will help them in the long run. After a certain time, most of us say that we no longer want to do without technology, and want to become involved."

According to the designers, the users/decision makers were not very knowledgeable about systems. It was thus difficult for them to follow technological development. "The managers are not aware of the quantity of work that is required to implement a new system, and their expectations are not clearly perceived." Moreover, the designers thought that the decision makers should become more involved, should listen to others and should manage their priorities. "At the present time, we are just going around putting out fires one after the other, responding to the hierarchical level of the person who makes the request or to the person who makes the most noise." The designers also admitted that they were more sensitive to the requests concerning the systems that they had personally developed. They felt that some users/managers took an interest and were seeing to it that information systems were developed. Others, however, had difficulty following what was happening. The decision makers and managers should have had a different outlook on the use of information systems. "Technology is only a tool. It cannot replace managers, and is not an instant solution to problems of management and information." The organization should, as a first step, have helped users to manage their information systems and to evaluate their performance. It was only later that the organization should have considered adding new technological tools.

According to the designers, little effort was made to question the way things were done. "The central administration should become involved and should initiate discussions with the various stakeholders in order to change working methods and if necessary, to review some job descriptions, instead of trying to evade the question and pretend that nothing has changed." The designers were also aware that both the employer and the union groups were afraid of being cheated in such a process.

The designers said that they had worked with the operators throughout the process of developing systems internally to help train them on the job. The designers also emphasized that employees in the systems department did their best to train other employees, but that their efforts often left something to be desired. The lack of ongoing training was a problem, since the field of information technology was developing at a very fast pace. Among programmers and users, it often happened that only one person really knew an information system well.

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Consequently, when staff changes occured, information systems were no longer used in accordance with their capabilities. "New employees are introduced to the basic functions, but the benefits for which the systems have been developed are often lost."

The designers thought that in cases where information systems were acquired from outside, the systems department simply functioned as an installer of machines. The follow-up provided by this department was weak or nonexistent, and it provided only minimal training. The operators were left to fend for themselves.

Users/operators

The users/operators were unionized employees who were directly affected by the implementation of the systems. They worked to capture data or to produce outputs. The introduction of information systems offered them a number of benefits. They appreciated above all the reduction of repetitive and monotonous tasks, the improvement in quality and accuracy of data, and the speed with which the new information systems performed ? operations that were previously very complicated. "This is a very worthwhile working tool that I would no longer want to do without, although I don't make full use of it."

The users/operators unanimously stated that the implementation of the information systems was not planned and that very little effort was made to consult them when the analysis was done. In certain cases, however, they could have improved the systems and facilitated their implementation. The users/operators received basic training on the job. They were asked to work with and operate an information system without being given any explanation of the possibilities that the system offered. "The individual is placed in front of the equipment, and must then learn how to use it. The progress that this individual makes will depend upon his or her personal interest and free time. Consequently, people who are not self-motivated just mark time and try to unload their work onto others."

The users/operators deplored the lack of technical knowledge among managers. Since the managers were not able to evaluate the possibilities offered by the information systems, they did not encourage the maximum use of these

tools. "A person cannot be a leader and sell a system if he or she does not know it." Furthermore, the managers directed the work to the most capable employees. As a result, there was an unequal distribution of the volume of work. According to the users/operators, the managers also tended to concentrate training on certain employees. Finally, the users/operators thought that senior management was not aware of the additional volume of work that implementation of a new system entailed.

It is interesting to note that all the other actors in the concrete action system thought that the role of the users/operators was to maximize the use of the new technological tools at their disposal. They had to be on the lookout for defects and point them out to the systems department. The decision makers and managers added that the users/operators had to show initiative and open-mindedness when dealing with the new situation and had to offer them their cooperation, especially when the systems were being implemented. Their collaboration was particularly useful in regard to training and mutual help in the workplace.

The union

The bargaining unit most affected by the technological changes produced by the information systems was the municipal employees' union. Representatives of this union admitted that in the beginning, the union and the employees were not aware of the impact of technological changes, or how soon the organization would experience them. They deplored the fact that the clause on technological change in the collective agreement had not been applied in the spirit of the original document, and that the union was not regarded as an important stakeholder in managing technological change. "We are kept out of the process and limited to playing the role of watchdog of the collective agreement. What remains for us to do is to negotiate the machinations of the employer party in order to avoid disputes."

The union thought that in most cases, the people affected by the technological changes were not involved in the process. They confronted a fait accompli. They had received only minimal preparation, so implementation for them was difficult. Afterwards, there was virtually no follow-up or evaluation. Nonetheless, the employees were happy to work with computer tools and did not want to go

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