The Intelligent Manager

Adding Value in the Information Technology Era

Dr. Richardus Eko Indrajit Chairman, Perbanas School of Computing and Information System

©  Richardus Eko Indrajit, 2002

Agenda for Today

n  Introduction n  Intelligent Manager Role in the New Economy n The Value of Information n The Value of Technology n Conclusions n Questions and Answers

Intelligent Manager Role in the New Economy


The Balance of Resources has Changed

Four Ms Plus

Men

Machines

Materials

Money

Information


Why Information ?

Business Facts

Data

Information

Knowledge

Intelligence

+ procedure

+ context

+ experience

+ wisdom

INTELLIGENT MANAGER


Why Technology ?

n  Need tools to create and to distribute information in an effective and efficient way

n  Convergence between computer and telecommunication technology =


Role of Information Technology

Business Facts

Data

Information

Knowledge

Intelligence

+ procedure

+ context

+ experience

+ wisdom

INTELLIGENT MANAGER

EXECUTIVES

LINE MANAGER

SUPERVISOR

STAFF

1. H

elp

Crea

ting

the

Inte

llige

nce

2. H

elp

Empo

wer

ing

the

Peop

le


OLD ECONOMY Manager

NEW DIGITAL

ECONOMY Manager

Transition

The Transformation


““Penghasilan

Sebesar-besarnya dengan

Pengorbanan Sekecil-kecilnya””

The Principle of

WEALTH MAXIMIZATION   It requires strategy because

of the scarce resources

  Resource = consist of atoms which are limited by time and space

Economy Principles


10010001 atom bits

text audio video image voice data knowledge information process

real things abstract things

Bits characteristics: - easy to duplicate - cheap to produce - fast to restructure - good to represent

unlimited resources digital economy

Digital Technology Philosophy


Knowledge

Digitization

Virtualization

Molecularization

Integration/Internetworking

Disintermediation

1

2

3

4

5

6

Convergence

Innovation

Prosumption

Immediacy

Globalization

Discordance

7

8

9

10

11

12

New Economy Characteristics


THEME ECONOMY ORGANISATION

Knowledge Knowledge becomes an important element of products

Knowledge work becomes the basis of value, revenue, and profit

Digitization Products and services’’ forms are transformed into ones and zeros format

Internal communication shifts from analog to digital

Virtualization Physical things (institution and relationship) can become virtual

The business transformation into virtual corporations type company

Molecularization Replacement of the mass media into molecular media

End of command-and-control hierarchy, shifting to team-based, molecular

structures

Internetworking Networked economy with deep and reach interconnections of economic entities

Integration of modular, independent, organizational components for network of

services

Disintermediation Elimination of intermediaries and any stand between producers and consumers

Elimination of middle managers, internal agents, etc. who boost the communication

signals



THEME ECONOMY ORGANISATION

Convergence Convergence of computing, communications, and content

Convergence of organizational structures responsible

Innovation Innovation becomes the key driver of business success

The only sustainable advantage is organizational learning

Prosumption Gap between consumers and producers blurs in a number of ways

Consumers of information and technology become producers

Immediacy It is a real-time economy that occurs at the speed of light

Required a new real-time enterprise that can adjust to changing business conditions

Globalization Knowledge knows no boundaries, there is only a world of economy

The new enterprise enables time and space independence

Discordance Massive social contradictions are arising Profound organizational contradictions are arising



The Indrajit Model

Know the Paradigm

Impact on Existing

Business

Reactive Action

Highly Possible Output

Yes Yes Yes Survive

Yes Yes No Business Threat

Yes No Yes Opportunities Taken

Yes No No Adding Knowledge

No Yes Yes Boomerang

No Yes No Dangerous

No No Yes Gambling Adventure

No No No Nice Watcher


Intelligent Manager Issues

Demand Site Supply Site

The Value of Information

for Intelligent Manager

The Value of Technology

for Intelligent Manager

The Value of Information


The Strategic Role of Information

Gather Organize Distribute Select Synthesize

Facts

Data

Information

Knowledge

Intelligence

Business Value of

Information System

Add Value customers and markets

Reduce Costs transactions and processes

Minimize Risks market, financial, legal,

operational risks

Create New Realities intelligence (social, political, technological, etc.)


New Paradox: More is Less ?

n How can we be sure about what is the right information to seek in the first place?

n How can we trust the information we receive sufficiently to base decisions on it?

n How can we be sure that the information we sift out is not in fact vital?

The new language: SURFING THE WEB ?!


Quality of Information

n Relevant n Clear n Timely n Accurate n  Sufficient n Reliable n Targeted n Worthwhile


Intelligent Manager Characteristics

n  They understand about the importance of knowledge n  They are not scared of new technology n  They will be learners n  They will be good at helping others to learn (coaches) n  They will be leaders rather than being managers n  They will be effective members of self-managing teams n  They will be hunter gatherers of information n  They will be effective decision makers in the absence of

certainty

Changing times: changing minds (paradigms)


The New Value Chains

1.  Flow Physical Products 2.  Flow of Money 3.  Flow of Documents

Information Based Business


Information Cultures within Organization

Model Characteristics

1.Technocratic Utopianism A heavily technical approach to information management, stressing categorization and modeling of an organization’s full information assets, with heavy reliance on emerging technologies

2.Anarchy No overall information policy, leaving individuals to obtain and manage their own information

3.Feudalism Information is managed by individual functions or departments, which define their own information needs and report only limited information to the center

4.Dictatorship The board defines information categories and and reporting structures, and may not willingly share information with the wider organization

5.Federalism Information management is based on consensus and negotiation about information flows


Role Description

User department

The user will identify the tools that can help his/her do the job effectively

Influencer cross-department

The influencer will seek to ensure that his/her team has the best tools to support them in their work

Advocate cross-company

The advocate will seek to influence how the wider organization uses the new technologies

Expert best practice

The expert is someone who can design the best information system and technology for the organization

Deciding the Role to Play


The Evolution of Technology Usage

SAVE MONEY 2 Financial, Manufacturing, Services 1 Administrative

MAKE MONEY 4 Mega Decisions 3 Marketing, Distribution, Customer Service

REMAIN IN BUSINESS 5 People Systems, Home Computers

OPERATIONAL CONTROL 2 Asset Management 1 Process Management

ORGANIZATIONAL EFFECTIVENESS 5 Restructuring of the Industry 4 Restructuring of the Organization 3 Growth and Increase in Market Share

FUNCTIONAL USE MANAGEMENT FOCUS

Reducing Costs

Leveraging Investment

Enhancing Products and Services

Enhancing Executive Decision Making

Reaching the Consumer

Above the Line

Below the Line

1

2

3

4

5


Evolution vs Revolution Scenario

Localized Exploitation

Integration

Business Process Redesign

Business Network Redesign

Business Scope Redefinition

LOW Range of Potential Benefits HIGH

LOW

HIGH

Deg

ree

of B

usin

ess

Tran

sfor

mat

ion

Revolutionary

Evolutionary

The Value of Technology


Zachman Framework

WHAT data HOW

function WHERE network WHO

people WHEN time WHY

motivation ENTITIES PROCESSES LOCATIONS ORGANISATION EVENTS STRATEGY

GOALS Scope and Objective ENTITY RELATION PROCESS

FLOWS LOGISTIC NETWORKING ORGANOGRAM BUSINESS

SCHEDULE BUSINESS PLAN Business and

Enterprise Model DATA MODEL DATA

FLOWS SYSTEM TOPOLOGY USERS PROCESS

STRUCTURE KNOWLEDGE ARCHITECTURE Information System

Model DATA DESIGN STRUCTURE

CHART SYSTEM ARCHITECTURE USERS

INTERFACE CONTROL STRUCTURE KNOWLEDGE

DESIGN Technology Constrained Model

DATABASE DESCRIPTION PROGRAM

SOURCE NETWORK ARCHITECTURE SECURITY INTERRUPTS KNWLEDGE

BASE Detailed Representation

DATA FUNCTIONS COMMUNICATION ORGANISATION SCHEDULE USE Working System


Organization-Technology Links

Organizational Theme (DEMAND) Technology Theme (SUPPLY)

Openness Open Systems

Integration Networking

Empowerement Distributed Computing

Immediacy Real Time

Cooperation Cooperative Processing

Committment Rules and Protocols

Organizational Independence Architectural Modularity

Competence Building Platform Specialization

Accessability User-Friendly Systems

Time and Space Independence Global Networking


INFORMATION SYSTEM - DEMAND SITE -

INFORMATION TECHNOLOGY - SUPPLY SITE -

INFORMATION MANAGEMENT

Institutions

Community

Non Profit Organization

Business Entities Public Sectors

R&D Centers

Corporations

Computer Manufacturers Software Houses

Universities Silicon Valley

Three Domains


Product Revision

Product Transition

Product Operations

 Maintainability (Can I fix it?)  Flexibility (Can I change it?)  Testability (Can I test it?)

 Portability (Will I be able to use it on another machine?)  Reusability (Will I be able to reuse some of the software?)  Interoperability (Will I be able to interface it with another system?)

 Correctenss (Does it what I want?)  Reliability (Does it do it accurately all of the time?)  Efficiency (Will it run on my hardware as well as it can?)  Integrity (Is it secure?)  Usability (Is it designed for the user?)

  Cost   Speed   Quality: Security, Reliability, Scalability

Demand Site

©  Richardus Eko Indrajit, 2002   Digital vs Physical Products   Delivery/Distribution Channels

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Supply Site of Technology

©  Richardus Eko Indrajit, 2002   Infrastructure   Community and Superstructure

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T1 Frame ATM DSLs ISDN Clearline Wireless

Sprint Link IP Backbone Sprint Private Intranet Backbone Dial Up Access Dedicated Access

Customer Service Account Administration Billing Reporting

Site Security & Maintenance Database Service Storage Management / Capacity Planning

Firewall & Installation Remote Firewall Management DNS Services FTP Email

Browser Directory Basic Web Hosting, Cache, Staging Usenet Search Engnie

Enhanced Directory Publishing Fax InfoXchange Paging Chat BBS/Forums Agents

New Feeds Authentication Encryption IP Voice Realtime Audio/Video Page Generation

Audio/Video Streams URL Controls Call Centre Services MM Players Workflow Tools

Collaboration Tools Java Plugins Inventory Management Document Archive MM Archive

Transaction Processing Commerce Fulfillment Webcasting

System Integration Legacy Integration Service Customization

Custom Programming Consulting Training

Supply Site of Technology


E-Technology Cube

CUSTOMER LAYER Business, Consumers,

Families, Communities, Institutions

LOCATION LAYER At Work, In Public, In Vehicle, At Home

APPLIANCES LAYER Personal Computer, Kiosk, Fax, Telephone, Television, Intelligent Monitor, PDA

INTEGRATION MANAGEMENT LAYER

INTERNET PROTOCOL LAYER

Calling, Conferencing, Chatting, Messaging, Online Support, Retailer Transaction, Email

CONNECTIVITY Telecom. Infrastructure Internet Infrastructure

Managed Network Services Application Integration Services

COMMUNICATION Transaction Processing

E-Commerce Based Apps. Multimedia Features

Workflow Tools Call Center Services

Solutions Consulting Services

COMMUNITY Content Providers Business Verticals Affinity Groups SOHO Verticals

Consumer Verticals Mass Market

Devices Layers Community Layers

Cost

Speed

Scalability

Security

Reliability

E-Technology Infrastructure

E-Technology Developm

ent Stage

BR

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EDL Layers




APPLIANCES LAYER Personal Computer, Kiosk, Fax, Telephone, Television, Intelligent Monitor, PDA













Cost

Speed

Scalability

Security

Reliability


E-Technology D

evelopment Stage

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  PC penetration (0.8%), phone line penetration (3.67%), and internet penetration (0.15%) in Indonesia is the lowest in the South East Asia region [WDR Research]

  Facts from the research:   21% of the respondents have

subscribed internet at home (in ten big cities)

  Prefer to access internet from office or warnet (83%) due to cost structure (the growth of internet users > internet subscribers)

  Use the internet for basic communication such as email (79%) and surfing (52%)

Trend Highlights:   Multimedia features (50%)   Entertainment Purposes (62%)   Pervasive computing devices


EDS Layers




APPLIANCES LAYER Personal Computer, Kiosk, Fax, Telephone, Television,

Intelligent Monitor, PDA













Cost

Speed

Scalability

Security

Reliability


E-Technology D

evelopment Stage

BR

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RW

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  Telkom and Indosat are the main players in connectivity industry

  There are approximately 35 active ISPs

  More convergent products and services

  Fast growing internet community   Facts from the research:

  Criteria in choosing the internet connectivity and communication provided by ISPs: number of internet subscribers, features, access speed, and reliability

Highlights:   Scalability is the key   Free competition, no exclusive rights   Wireless technology


Cost


















Cost

Speed

Scalability

Security

Reliability


E-Technology D

evelopment Stage

BR

OC

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RW

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  Facts from the research:   The cost of linking to the

internet is expensive:   PC   Telephone   Electricity   ISP

  More people will subscribe internet as long as the cost is not expensive (79%)

  Flat rate for internet connection is required

Highlights:   Telephone pulse/internet is public good   Alternative technology that is cheaper   Value added products and services


Speed


















Cost

Speed

Scalability

Security

Reliability


E-Technology D

evelopment Stage

BR

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  Facts from the research:   For basic internet features

(email, chatting, and surfing), the access is low but acceptable (37%)

  Become serious problem for multimedia features:   Picture   Video   Audio

Highlights:   Broadband technology   Enabling software/applications


Reliability


















Cost

Speed

Scalability

Security

Reliability


E-Technology D

evelopment Stage

BR

OC

HU

RW

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  Facts from the research:   74% of the respondents have

ever faced problems while accessing internet   65% is uneasy to access

internet   71% experiences “hang”

and “disconnected”   Average of 72% has a frequency

of once/twice within 4 times access found the problems:   Not easy to access   Browsing too long   Often disconnected   Offen “hang”

Highlights:   Service level agreement and penalty   Transmission media alternative   Short network to internet backbone


Security


















Cost

Speed

Scalability

Security

Reliability


E-Technology D

evelopment Stage

BR

OC

HU

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  Facts from the research:   88.4% knows about

purchasing online through internet

  But 83.7% has not yet using internet for purchasing transaction:   No guaranteed payment

security system   Afraid of mis-operating

the transaction procedure   Example: Not all

companies have been using internet banking yet

Highlights:   Hard and soft security aspects   Guarantee from third party   Protected by law (legal entity)


Scalability


















Cost

Speed

Scalability

Security

Reliability


E-Technology D

evelopment Stage

BR

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HU

RW

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  The fast growth of subscribers should not decrease the performance (internet access)

  Switch of ISPs exists due to the scalability problem (getting slower as the subscribers grow)

Highlights:   Service level agreement and penalty   Appropriate technology is required


Development Stage

  Facts from the research:   59% aware of advertisement

in internet (Level 1: Brochureware)

  59% using internet for business and personal purposes (Level 2: Customer Interaction)

  16% using internet for purchasing transaction (Level 3: Transaction Enabler)


















Cost

Speed

Scalability

Security

Reliability


E-Technology D

evelopment Stage

BR

OC

HU

RW

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STOM

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Highlights:   Back-office move to front-office (B2B)   Free and new business model (B2C)

Conclusions


Driver to Change

Because Customers are always looking for cheaper, better, and faster products/services;

and because the Competitors are always aiming for the best pratices;

then our Company has to find the new competitive way to conduct the business in a cheaper, better, and faster mode from time to time.

n  Reason 1: Survival n  Reason 2: Growth n  Reason 3: Win the Battle


Three Scenarios of Change

AS IS

TO BE


The Winners

1.  New Business (products/services) 2.  New Market (customers) 3.  New Revenue (business model)

4.  New Company (business transformation)

5.  New Image (business community)

6.  New Wealth (paradigm shift)

Etc. Key Points:   From “nothing” to “existing”   From “existing” to “creating”   From “creating” to “improving”   From “improving” to “growing”   From “growing” to “performing”


The Losers

1.  Loss market share (products and services) 2.  Loss revenue (customers) 3.  Loss competitive advantage (business model)

4.  Loss trust (business community)

5.  Loss resources (competition)

6.  Loss opportunity (cost)

Etc. Key Points:   From “performing” to “stopping”   From “stopping” to “decreasing”   From “decreasing” to “surviving”   From “surviving” to “eliminating”


In other words…..

  Good News   It is the new world, new opportunities   Advantage to those who understand the new paradigm   Huge ““unlimited market””   ““Equal”” level of players (knowledge oriented capital)

INDONESIA people can become PRODUCERS or CONSUMERS or PROSUMERS at the same time

  Bad News   Cost transparency phenomenon   Local eTechnology infrastructure as national disadvantage   Main stakeholders do not understand the fundamental paradigm (trend in the digital

age)   ““Chicken-and-egg”” existing situation + bad superstructure condition

LOCAL STAKEHOLDERS should at least understand the NEW PARADIGM before taking critical action to boost the virtual market


Intelligent Manager Candidate

Technofiles

24% Enthusiastic about technology in a general sense and also show a high level of interest in the applications of new technology

Aspirational Technofiles

22% Excited in the general sense about technology but are much less interested in its applications

Functionals

26% Uninterested in technology, but are not actually hostile to its applications

Technophobes

28% Hostile to technology at all levels and are skeptical about whether technology can offer anything new


Conclusion for Managers

Old Organization + Information Technology =

OLD and EXPENSIVE ORGANIZATION !!!


Thank You

Richardus Eko Indrajit

http://www.indrajit.org

[email protected] [email protected]

Q&A