Role of IS in organizations

Role of IS in organizations

Explain how intranets impact organizations at the technical, formal and informal/social levels. Discuss the importance of intranets for large and global organization such as BT (as presented by Mark Morrel in Lecture 2) and identify benefits and potential drawbacks with the advent of social media such as blogs and wikis for organizations.


Information system is technically a set of interrelated components that collect process, store, and disseminate information about significant people, places, and things within organizations or in environment around it. It refers not only to information and communication technology an organization uses, but also to the way in which people interact with this technology in support of business processes. From business perspectives, an information system helps business manager make better decisions or improve the execution of business. It increases the firm's revenue or reduces its costs to provide economic value to the business.

Businesses Globalization Trends

With the trends of globalization of the world's industrial economies, businesses are turning themselves into global concerns. They are facing challenges of worldwide purchasing over suppliers, manufacturing in locations with comparative advantages and providing all locations with the same level of customer service, etc. To handle these challenges, firms will need faster communications and information processing. As the result, organizations will have to rely more on IT for management. Information technology acts like the glue that can hold an international organization together and help coordinate its operations. The internet, and particularly the intranet, is helping to provide connectivity, information sharing and coordination worldwide.

Intranet Definition

An internet/intranet application uses Internet standards to link host computers with user machines in client-server architecture. An intranet is a private network that uses WWW technology within an organization to give employees on-line access to a company's informational resources through individual computers. The properly developed software “firewall” protects it from outside network by controlling as the gateway to corporate information, application, employee collaboration and communication tools.

Intranet Impact on Global Corporations

BT, which is known as British Telecom, has now 160,000 intranet users in 170 countries. Why it is so popular? Initially, the intranet was launched in 1994 to reduce the amount of paper and printing in the organization for cost-saving. Indeed, it had certain cost-effective features since it reduced the running cost. Besides the saving cost of printing documents, expenses on telephone, travel, conferences were also avoided to a certain level. However, dramatically, its impact on the organization is far more than that. The first level of effects is the anticipated technical gains in terms of efficiency and productivity. Technically, intranets are used to support internal transactions and business processes. It is being used as a platform to deliver tools and applications, such as sales and customer relationship management tools, project management, to advance productivity. One important aspect of intranets is that it enables electronic customer/supplier relationship: companies are rapidly adopting electronic data interchange intranet technologies speed the ordering process and improve accuracy.

The second level effects are unanticipated consequences and are caused by behavior that the technology makes feasible and by how people use those options. These effects are not caused simply by technology operating, but constructed by people as their design and use of technology interacts with, shapes, and is shaped by the technological, social and policy environment (Sproull and Kiesler).

On the formal level, intranet helps information sharing and collaboration. Firstly, Intranet increases effectiveness and productivity of employees. The open communication system of intranet provides users rapid sharing of information, proposal and feedbacks. It helps employees to locate and view information faster and provides specific applications relevant to their roles and responsibilities. With the help of a web browser interface, employees can access data held in any database the organization make available to them, anytime and anywhere within the company workstation. The intranet also guarantees the quality of the information. The duplication of data is removed and employees are provided with legitimate and timely updated information. Consequently, employees can perform their jobs faster, more accurately and with confidence gaining the right information.

Secondly, the integrated communication system of intranet enhances team work, collaboration and knowledge sharing among the employees. Intranet produces a culture-change platform for the employees to communicate strategic initiatives worldwide throughout the company and discuss key issues in the forum application. The information such as the purpose of the initiatives, the aims to achieve and who is driving these initiatives becomes easily accessible by all authorized users on the intranet. Therefore, staffs have the opportunity to keep update with the strategic focus of the organization, teamwork is enabled and collaboration is enhanced with more frequent and just-in-time exchange of information. In addition, Intranet engaged BT people, making them working more efficient, effective and empowered. With discussion in intranet forums, employees may generate new ideas in management. Employees are given more responsibility authority to make decisions and have more control over their jobs, as intranet allows its end users to create new applications and shape the configuration of the underlying communication infrastructure to serve their needs. This has lead to a fundamental shift of the power, because only the network owners could configure the network in the past. However, network end users today can control and configure networks they use. Another great advantage of intranet is being able to specify address of the viewer. Since intranets are user specific, you know exactly you are interfacing with. Therefore, employees can personalize their intranet based on their roles.

On the social level, internal communications also built and managed the relationship between the management and employees of the organization. Leaders want their people to trust them, respect them, be loyal to them, and be inspired and enthused into action by them. This can only happen if leaders have a healthy relationship with the people concerned. Leaders who don't have this kind of relationship will only have the power but no influence over his employees. The intranet can help build a healthy relationship between leaders and employees and let the leaders know what their employees are thinking and talking about. The use of the intranet also helped pull together the wide-ranging users which disparately located all over the world. BT's intranet is now acting as a mission critical business and communications system.

Social media tools (Web2.0) benefits and drawbacks

With the boom of the social media tools on the internet, a Facebook community for BT employees in which many employees had jointed came to the BT management's attention. The executives had to take it serious because the company business related issues were being discussed on the public available social media sites without the company's full knowledge and participation. Obviously, people were requiring for more powerful system to communicate.

To stop social media tools seeping onto intranets was a tough job, therefore, the BT executives chose to introduce them on their terms in managed way. The senior manager of the company quickly realized the importance of adoption of social media and the first intranet tool was introduced to BT. Initially, it was an enterprise-wide wiki called BTpedia, based on the concept of Wikipedia, first launched by BT. It allowed BT people to publish articles or edit articles published by others. Informational content can be created and easily organized within wiki environment and then reorganized as required. The accuracy of information can be ensured as hundreds of people collaborate to edit documents online together to create an environment open to sharing information and knowledge. It was immediately illustrated how powerful the social media was. Wikis have soared to more than 750,000 wiki pages and thousands are connecting on the intranet social networking site, MyBT.

Generally, the ultimate goal of adding the Web2.0 technologies is to deliver value back to the business in increased sales, improved customer services or lowered the cost of doing business. It involved a collection of social media tools - blogs, podcast, BTpedia, Project wikis, RSS powered news, MyBT network, discussion forum. Based on traditional IT which has already provides efficiencies and manageability for the areas such as accounting and supply chain, corporate social media promises the efficiencies for social structure of an organization. It has become an important way organisations and employees interact, collaborate and share information.

Firstly, it enhances employees' engagement and empowerment. The power to produce content and derive ideas is shift away from the traditional mainstream, newspapers and magazines, and towards the individual. Take the evidence of blog. It allows its users to publish content and become content providers at the same time. Since the blogs are available for all, people are enabled to exchange their experience, knowledge and ideas and this tool encourages employees to have some personalized content and ideas and give them chance to promote their own expertise. Blogs have rapidly replaced the mainstream as the most popular sources of online commentary and opinion. However, with the accumulation of unstructured content generated by users in disparate channels on the intranet, it becomes time consuming for users to find and extract useful information. To help users locate and keep up to date with new content, a combination of ‘tagging' was introduced. It marks shared online content with keywords and organize content for future navigation, filtering and search. It allows users to tag content in the way that makes sense to them so that they can combine these tags and gather a collection of opinions of majority. This has brought to change that information is no longer classified by hierarchical categorization, but organized by tags and keywords. End users can define and attach these according to their preference. In addition, another powerful application, RSS which stands for Really Simple Syndication, makes social media content available to a wider range of readers and produce them more convenient access. RSS publish news like information such as the title, description and publish date to readers who subscribes to the feed based upon a subscription framework. The end users all required is the RSS aggregator application to receive the information without visiting each site to obtain information. Readers can subscribe to multiple sources, brought together in one place as soon as the sources updated via RSS readers. RSS enables users control their own content and guarantee the source and truth of content.

Moreover, social media has been exploited its implications on knowledge management which helps share knowledge more widely within customers, suppliers and partners. Web2.0 implications capture the right knowledge and get it to the right user and consequently use this knowledge to improve organizational and individual performance. Individuals can become knowledge contents supplier and have opportunities to define their personal and professional roles in the organizations. This provides users a powerful incentive to engage with the system. Social media also allows employees to track down, find colleagues with certain experience and let them communicate directly. Each interaction with expert for advice or information is recorded for future use. This promotes knowledge transfer efficiently. Companies such as IBM and US electronics retail giant Best Buy have both enjoyed astonishing payback from Web2.0 adoption.

As equally significant as the impact of Web2.0 on internal collaboration are the implications for consumers and customers relationship. It is possible to provide external access to an Intranet so that customers can share opinions and experience of the businesses they patronize in external online communities. In this way, social media tools allow organizations to listen to their direct customers and create a conversation of value which energizes the customers to be more than just consumers but rather an engaged part of the business. As a result, better relationships and greater trust with all type stakeholders, from customers to suppliers and from partners to employees will enable organizations market more effectively. Social media tools also enable companies personalize the products and services they offer, which increases the value of their organizations in the eyes of customers and this will in turn build higher levels of trust. In this way, the organizations may attract prospects and developing new business opportunities.

However, Web2.0 also embodies potential drawbacks. The increased flow of personal information across networks is becoming out of control and the emergence of powerful tools for surveillance threatens the hierarchy. Increased corporatization of online social and collaborative spaces and outputs has expanded so quickly. People are subjected to constant tracking because social media in nature is changing constantly. It is required to keep in touch with all the latest in this industry to ensure safeguard in the interests of the business. It can be time consuming to stay current all the time, because the information is updating so quickly. The time spent on social networks may take away from quality time with friends and family, people may be neglecting the real face to face connections and the fear of people growing apart of “normal life” has arisen among users.


Today's information systems do not only have technical meanings, they are far more than the machines just transforming the data. As organizations reengineer their business processes to become more adaptive to changing business environment, Intranet together with social media comes the technology is changing the ways corporate information is managed and distributed. The benefits from the new technology are evident in every adopting organization: dramatic gain in productivity, timely and more accurate information, and improved coordination among business units. In today's increasingly fierce global competition, the powerful information systems are critically important to the survival of a firm.

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