386                                                          Part 5: Internal Factors and Design
Missouri, you probably had no idea that the order taker was located in a call center more than 900 miles away, in Colorado Springs, Colorado. A customer's order tra¬verses two states and bounces back to Cape Girardeau over high-speed data lines' before the customer even pulls up to the pickup window. In a business where time is money, shaving even 5 seconds off order processing time makes a difference. The call center approach cuts order time in most restaurants that use it by 30 seconds to 1 minute, as well as improves the accuracy of orders.4
Purpose of This Chapter
Managers spend at least 80 percent of their time actively exchanging information. They need this information to hold the organization together. For example, the vertical and horizontal information linkages described in Chapter 2 are designed to provide managers with relevant information for decision making, coordination, evaluation, and control. It isn’t just facilities, equipment, or even products and services that define organization success, but rather the information managers have and how they use it. Highly successful organizations today are typically those that most effectively apply information technology.
This chapter examines the evolution of IT. The chapter begins by looking at IT systems applied to organizational operations and then examines how IT is used for decision making and control of the organization. The next sections consider how IT can add strategic value through the use of internal coordination applications such as intranets, enterprise resource planning, and knowledge management systems, as well as applications for external coordination and collaboration, such as extranets, customer-relationship systems, e-business, and the integrated enterprise. The final section of the chapter presents an overview of how IT affects organization design and interorganizational relationships.

INFORMATION TECHNOLOGY EVOLUTION

Exhibit 11.1 illustrates the evolution of IT. First-line management is typically con¬cerned with well-defined problems about operational issues and past events. Top management, by contrast, deals mostly with uncertain, ambiguous issues, such as strategy and planning. As computer-based IT systems have grown increasingly sophisticated, applications have grown to support effective management coordina¬tion, control, and decision making about complex and uncertain problems.
Initially, IT systems in organizations were applied to operations. These initial applications were based on the notion of machine-room efficiency—that is, current operations could be performed more efficiently with the use of computer technology. The goal was to reduce labor costs by having computers take over some tasks. These systems became known as transaction processing systems (TPS), which automate the organization’s routine, day-to-day business transactions. A TPS collects data from transactions such as sales, purchases from suppliers, and inventory changes, and stores them in a database. For example, at Enterprise Rent-a-Car, a computerized system keeps track of the 1.4 million transactions the company logs every hour. The system can provide front-line employees with up-to-the-minute information on car availability and other data, enabling them to provide exceptional customer service.5
In recent years, the use of data warehousing and business intelligence software has expanded the usefulness of these accumulated data. Data warehousing is the use