Technology, for as far as I can remember, has always played a key role in industrial organizations. In the early days, for the most part, technological innovations took place on the manufacturing floor - the invention of the steam engine, automated tooling and material transfer, mass production techniques, and so on. With the advent of the computer in the middle of this century, technological innovations in manufacturing environments have continued at an alarming rate. In parallel with this development, technological innovation enabled by the personal computer, has ventured into the realm of business operations and has changed in dramatic and fundamental ways, the manner in which companies do business today.

Traditional organizations were typically hierarchical, bureaucratic, had long cycle times for most operations, generated hoards of paper flow, and were functionally organized. As these organizations got larger and larger, they grew increasingly complex and difficult to manage. They became lethargic, inflexible, and full of inertia. Further, the spatial and temporal dimensions of managing multinational and trans-national corporations were significant barriers to performance. Such organizations, many of which are still in existence today, face globalization of world economies, increasingly sophisticated competition, the challenge of operating in diverse locations and time zones, increasing demand for customized services, and rapidly changing customer demands. Such difficult times would render the practice of "business as usual", suicidal behavior.

 
The stresses resulting from spatial dispersion and temporal considerations, shortened product planning, development, and delivery cycles, along with increased environmental volatility, has created a critical need for increased flexibility and responsiveness in the business focus and operation of any organization. Herein lies the challenge to all organizations. How should corporations be organized so that their flexibility, responsiveness, morale, and performance are all optimized? Peter Keen in the May/June 1991 issue of Planning Review believes that the answer lies in redesigning the corporation to make it "simple". This he suggests, can be achieved through the application of information technology (IT). I am of the opinion, however, that IT is necessary but insufficient for the radical improvement of business performance. IT is simply one tool among a group of technologies necessary to facilitate the design of the "simple" and flexible corporation.

In this article I would like to discuss value to organizations of integrating IT with business operations. In addition, I would like to also discuss the role of one other valuable technology, that of mathematical modeling (MM). From here, the article will proceed with a definition of these of these two technologies, and with an exposé on how each can have a positive impact on the various facets of business operations. Subsequently, I will zero in on the business community here in St. Lucia offering an assessment on what appears to be the status quo viz. a vis. the application of these technologies. I will then offer what I perceive as the limitations and challenges, and conclude with the possibilities for the use of IT, and mathematical modeling in the business sector of St. Lucia.

Information Technology

Information technology refers the technologies and applications which combine the data processing and storage powers of computers with the distance transmission capabilities of telecommunications. These technologies and applications have increased in accuracy, reliability, and capacity over the past few decades, and have allowed organizations to make significant improvement in their operations and competitive advantage.

IT and Organizational Simplification

Much of the complexity and inertia in business organizations is created by redundancies and operational procedures based on manual approaches and archival needs. IT can play a pivotal role in reducing inflexibility, complexity, and inertia. This can be achieved by: 1) increasing direct flexible access to people, and reduce the need for information intermediaries; 2) providing simple access to information, simply organized; the focus should be on the needs for document-based information; and 3) reducing paper-document flows and barriers to tracking, locating, and controlling document-based work activities.

Valuable IT tools that can contribute to organizational simplification include: video-conferencing which provides face-to-face communication, "team technologies" such as electronic mail and groupware (software used to support teams rather than individuals), electronic data interchange (EDI) involving the automatic exchange of data between persons and companies, customer-to-supplier links, and other technologies that reduce delays, and remove intermediaries.

Obviously, a strong telecommunication system is necessary to accommodate the networking of the various pieces of hardware in the various locations where access to information is needed. Telecommunications allow information to be moved very quickly, thereby reducing the amount of "information float" (or time delay between requesting and receiving information). Consequently, incidents of paper-flow, error, and administrative steps (bureaucracy) are significantly reduced.

IT and Organizational Invention

IT is powerful in that it can play the dual role of supporting business functions or it can provide a focus for the redesign of critical business functions. IT can enable more productive forms of organizational design. It can be used as a basis for decentralizing operations. In the US, IT has enabled many companies to use telecommuting to reduce overhead in the rental of office space. Employees work from their homes and dial into the company’s computer system to access needed information and applications. With electronic mail, information is easily sent to persons needing it without the need for paper. Using groupware, team-based (cross-functional) organizations can be more easily facilitated. Command and control hierarchical organizations can become more collaborative in their culture, and improve worker morale and productivity in the process.

Business process re-engineering (BPR) is a new organizational design philosophy which requires IT as a core enabler. BPR refers to the fundamental redesigning of core business processes to achieve dramatic improvement in performance. Several BPR success stories involve the reduction of business cycle times. Check processing, inventory orders, application processing, and product development are all examples which utilized technologies involving customized software, electronic data interchange, customer-supplier links, and groupware. For example, one drug company in the US was able to considerably reduce the size of its purchasing department by allowing pharmacists to directly access its computers and to place orders. Today with the advent of internet shopping, individuals in their homes can make travel arrangements without ever having to leave home or talk to anyone. They can pay for their tickets using a credit card and have their hotel reservations confirmed.

IT and The Virtual Corporation

The virtual corporation is a quasi-firm that is based on electronic linkages between organizations. The organizations’ operations are so tightly coupled, that is very difficult to tell when one corporation ends and the other begins. Virtual corporations often reflect strategic alliances. The participating organizations retain their autonomy, legal status, and operating structure. There is no requirement that the corporations have the same structure. General Motors for example has implemented virtual integration with its suppliers. Several computer companies and auto manufacturers (Volvo for example) have adopted this structure. In some cases, there are companies that will distribute a product to the market without ever having contact with it. It is obvious that without IT to facilitate these electronic linkages, virtual corporations would not be possible.

IT and Business Functions

Business functions such as financial control and management, accounting, operations, inventory management and control, customer care and management, and human resource management have all been touched by the power of IT. Companies have been able to use sophisticated point-of-sale systems to allow them to manage inventory. Once reorder point levels are reached, then automatic placement of orders is triggered. IT has also been used to develop valuable monitoring and tracking systems for customer care and satisfaction and for service failure. Federal Express for example, through the use of IT, can track parcels any where around the world within 30 minutes. They have developed an information system called the Service Quality Indicator (SQI) to support their quality improvement initiatives. Several other companies have taken similar and other initiatives to improve their competitiveness

 
Mathematical Modeling

The field of applied mathematics offers a wealth of techniques that can be used to benefit business operations. More specifically, the application of mathematical models to address managerial problems is referred to as Management Science (MS). The use of MS technologies allow organizations to quantify behavioral relationships between inputs, outputs, and processes. In doing so, it is possible to gain deeper insight into how these relationships affect organizational performance, and how the inputs or the processes can be modified to optimize performance.

MS Technologies and Successful Applications

Research has shown, that the more complex business organizations become, the more difficult it is to understand, plan, design, and control organizational performance without the help of technology. There is ample evidence that both large and small corporations have benefited significantly from the application of such technologies. In fact, many organizations fail to achieve their fullest potential precisely because of a lack of application MS technologies. They have difficulty understanding the internal systemic relationships between and within the various business functions.

All major airlines (Air Canada, Delta, Swiss Air, Air France, Lufthansa, name it) use a sophisticated automated aircraft routing planning system to design profitable routes for the company. The efficiency of Federal Express delivery system is directly related to the application of MS technologies. Major trucking companies use MS technologies to minimize transportation costs in the distribution of goods and services. Mining organizations have used MS technologies to develop cost-effective strategies for planning excavation activities. Further, they use similar technologies to determine optimal blending strategies to maximize profit. Oil companies use similar technology. Service organizations have also used MS technologies to allocate resources among activities to maximize performance. Hospitals, for example, have employed scheduling software to produce effective work schedules for their employees. Even governmental organizations have employed the use of sophisticated MS technologies to determine the strategic location of health clinics to maximize access, or the location of ambulatory services maximize response time to emergency calls.

Combining MS and IT

The effective application of MS technologies almost inevitably requires IT elements as key enablers. Generally, the applications require the storage/retrieval, manipulation, transformation, and interpretation of information and data. The software applications that emerge from the marriage of IT and MS technologies are referred to as decision support systems (DSSs). For example, electronic customer-supplier links can be used to facilitate an automated ordering system. Given the set of orders for a given day, an intelligent DSS would automatically cluster orders and produce a delivery schedule for the fleet of trucks. The drivers would receive a computer print out with the schedule of deliveries and their sequence for the day.

In short, there are very few successful businesses that operate in a highly volatile environment, face an onslaught of global competition, operate across spatial and temporal dimensions, that have achieved their successes without the effective use of technology. While I have discussed two types of technologies (IT and MS) and their potential benefits to business organizations, there are many other technologies, some generic and some industry-specific. For example, CAD/CAM technology has revolutionized the design and delivery times of new products to market. Geographical information systems (GISs) have improved significantly, the dispatch of emergency services such as disaster relief activities, and the routing of control of public transportation systems.

Technology and St. Lucian Businesses: The Status Quo

It is apparent that the business sector in St. Lucia operates with a significantly low level of technological integration. In a well-known international bank operating locally, for example, the series of numbers for checkbooks sold are logged manually in a note book. A simple data base system can alleviate this manual process. Most organizations do not operate with computers, and the few that do, do not have them networked. I understand that even our own telecommunications giant, Cable and Wireless does not make full use of internal email, data transfer, or electronic bulletin boards.

In most local businesses, the advantages of electronic bulletin boards, internal email, automatic data transfer, on-line ordering, etc. are not utilized. Many companies with one or more computers, use the computers primarily for text processing. In a significant number of cases the secretaries are the only ones who know how to use the computers. Many managers are computer illiterate, and do not see the need to use a computer.

MS technologies are rarely ever applied by St. Lucian businesses. Most have no formal forecasting system. They use simple naive models. In inventory management, guesswork is the order of the day - resulting in huge capital tie-ups in inventory. The use of MS technologies such as contingency modeling, linear programming, transportation modeling, work scheduling, are practically unheard of. Part of the problem lies in the exposure of managers. Most MBAs BBAs, have had very little exposure to these techniques. Further, many managers are accountants, marketing people, or people who have worked their way up the ranks. Few have any knowledge of the existence of these techniques. Industrial Engineers, Operations Research Scientists, or Management Scientists, individuals with mathematical modeling expertise in business, are virtually non-existent here.

It is not that necessary that managers know how to use MS technologies, but rather, they need to become aware of their existence and what they can do for the business. It is worth noting, that the implied skill is mathematically based. May I remind you that most people who study business management went to it in the first place to escape the more "scientific" fields. Unfortunately, business management is both a science and an art.

Limitations, Challenges

There are several limitations which act as impediments to the implementation of valuable technologies to assist business performance in St. Lucia. The following are a number of postulates concerning why the use of technologies have not permeated the St. Lucian business sector in a bigger way.

1: Most managers are not aware of the existence of several technologies that can aid their business performance.

2: Many managers and staff are "technophobes". They fear the use of technology.

3: Many managers believe that the technologies simply cannot help them. This is particularly true of service-based organizations. They are too quantitative.

4: Some individuals fear a lost of control of decision-making power, or the computer may do better than they can.

5: Some individuals believe that the technologies would make their jobs redundant.

6: Some managers have difficulty predicting the payoff from the application of technology. The find it a potentially costly experiment.

7: There is a pervasive lack of a culture of excellence in St. Lucian businesses. This nurtures complacency and disregard for the potentialities that can be secured from the integration of technology into the business.

8: Some people are simply resistant to the implied behavioral changes that would follow from technological integration.

9: Most organizations are staffed by a middle-management and supervisory layer of technically weak staff.

Overcoming these hurdles poses difficult challenges. However, they can be addresed. First and foremost, organizations must develop a strong culture around excellence. Secondly, the corporations must proactively seek out technologies that could add to their business advantage. They may want to benchmark against similar organizations in other countries, or undertake competitive intelligence studies to find out what their competition is doing. Thirdly, the organizations must strategically select from the wide range of available technologies, tools that would add value to the firm. Fourth, the organization must be prepared to train its workers, and must it plan for and manage the transitional period which is inevitable when new technologies are deployed. Fifth, the organization must develop an evaluation and monitoring framework for the purposes of measuring the impact of the technology on business performance.

 
Possibilities

In spite of the fact that many St. Lucian businesses are small in size (fewer than 40 employees), and that the majority are service-oriented, there are several possibilities for the fruitful application of technology. The use of better forecasting techniques can benefit all businesses. Improved forecasting improves cash flow, reduces the level of capital tied up in inventory, and contributes towards customer satisfaction. The use of payroll/accounting systems such as ACPAC or MYOB can greatly improve the accounting procedures of both small and large firms. The use of spreadsheet technology to facilitate contingency planning and modeling can prove extremely valuable to firms of all sizes. Companies doing business with large international suppliers can make use of electronic mail to place orders, or they can access directly the suppliers’ database or product catalogue to find out about products and their availability.

Several companies can make use of IT to reduce cycle time for check processing, or for writing sales. The billing system can be tied to a database. By using a phone number or an NIS number, the person’s historical information can be retrieved instantly. The individual would simply verify that the information is correct, and off they go. Technologies such as voice mail for medium size to large companies can reduce the work load for a receptionist whose skills could be put to more productive uses. Companies that deliver can make use of MS technologies to improve the efficiency of delivery. One area where all retailers can benefit is in the area of stock control and management. Software is widely available for the effective management of inventory. Point-of-sales systems which can automatically update inventory levels and trigger orders can be extremely valuale to the grocery stores here as well as the larger appliance and furniture retailers such as Courts.

While local businesses can undertake to improve the level of integration of technology with their business operations or their links with international organizations, the biggest challenge will be to use IT to form collaborative relationships with local firms. While some businesses have already began the process of integrating technology, many have not. Collaborative relationships will require a critical mass of firms integrating technology with their operations. Given the level of capitalization of many local businesses coupled with the nature of competition, it is not conceivable that such relationships will come together in the near future. I am hopeful, however, that as global economic pressures and market volatility continues to escalate, St. Lucian businesses will begin to search for new ways of sustaining themselves. The fruitful marriage between business and technology, I believe, holds part of the answer.

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