Investing by imperatives.

• Author: Vincent, David R.
• Position: Imperative-based management - Special Report: Information Management

Leverage your three resources--capital, people, and information--with the right investments in information technology.

Ford is doing it. So is DuPont, Federal Express, Walmart, and other leading U.S. corporations.

What are they doing? They're flattening their organizational structure, organizing their business and decision-making processes along horizontal lines coincident with their economic alliances--suppliers, distributors, and, of course, consumers. They are becoming imperative-driven, frontline-oriented, information-based organizations.

These are the organizations in which information technology can make the greatest contribution. For these organizations, information is a resource that must be managed with as much care as they manage their capital. Information systems in these organizations have become an essential part of the corporate infrastructure.

But most North American companies are still organized as traditional, industrial-age hierarchical organizations, in which decisions are made at the top and flow down through middle management to the workers. As workers respond to directions they receive from up the ladder, operational data and performance information flow upward to high-level decision makers. Then a new set of commands and controls, based on the performance data, flows back down. This process repeats over and over again.

This organizational structure is too expensive--it requires a huge structural overhead--and too slow for a company that must compete in the global economy. Jack Quindlen, CFO of DuPont, recently restructured the company's financial function by cutting his corporate accounting staff by 50 percent and moving some of these accountants to DuPont's operating divisions. So, instead of controlling operations from their vertical posts, these accountants became part of the operating divisions. By doing this, Quindlen beefed up DuPont's frontline organization by putting the necessary financial skills to empower quicker, cheaper, on-the-spot decision making. At the same time, DuPont disbanded its corporate IS function and shoved its information technology investment down into operating units as well.

DuPont is becoming an imperative-driven, frontline-oriented organization, one that is aligned horizontally with its business processes and economic alliances rather than vertically, as are the traditional organizations. Being aligned horizontally, these organizations are fluid and responsive. Management's responsibility is to manage resources --people, capital, and information --and business processes to meet stakeholder expectations.

Your company can realize the full potential...