The growth of IT in organizations started first with the use of computers and later went on to the use of communication systems. With the growth of networking, organizations strived to implement these so as to achieve maximum efficiencies. IT today is a vehicle for making substantial changes in organizations, markets and the economy (Lucas, 2001).
The basic purpose of any organization is to either manufacture a product or to provide a service to its customers. An organization is divided into various functions as per the task they perform to achieve the organizational goals. The organizations use various technologies for achieving this goal. However, IT is different from these technologies. Figure 1 below describes the role of IT as per Harold Leavitt. As per this model, IT is the central link between all parts of an organization (Lucas, 2001). It has a separate existence from the other technologies used by the firm. Thus, we can see that IT has taken a central role in today’s organization.
Some very big organizations have been pioneers in using IT to revolutionize the way processes are run. Chrysler is one such example. The company is an excellent example of ‘lean’ production, a methodology of production that has revolutionized the manufacturing industry. This production system required the company to work with approximately 1600 external suppliers that shipped materials to 14 car and truck assembly plants in North America (Lucas, 2001). The key to lean production is Just-In-Time (JIT) inventory system. The company used IT to set up Electronic Data Interchange (EDI) for efficient running of JIT mechanism. This meant electronically linking all the suppliers to the company through the EDI and eliminating any manual or paper transactions (Lucas, 2001). The major transactions involved were – ordering parts, scheduling and rescheduling deliveries