The Sullivan's matrix report

Information Strategy

“Organizations are increasingly able to gather and process information from a variety of new sources” (Ferguson et al., 2005 p51)

‘Sullivan’s matrix’ introduces different ways to classify the IT/IS environment of an organisation. Within this matrix, there are four environments: Traditional, Opportunistic, Complex and Backbone. The idea of this report is to describe how the IS/IT environment of Inditex fits into Sullivan’s matrix.

According to Ward & Peppard (2002) organisations with a traditional IT/IS environment have a highly centralised control of their IT resources. “IS is not critical to the business” and IT is solely used to improve efficiency on a system-by-system basis. McAfee (2004) raises many points in his article to suggest that the IT/IS of Inditex fits into this Traditional environment.

Inditex see IT as merely an enabler for their business. McAfee (2004) confirms this theory as he states that “The role of IT, then, is to support the process” (McAfee, 2004). Ward & Peppard state that within a Traditional environment, IT is simply used to support business processes and to improve the efficiency of the organisation. Another point which supports the theory is that Inditex have an excellent IT and business alignment. “business goals always shape the company’s use of technology, never vice versa” (McAfee, 2004). This portrays Inditex as being entirely business-led where organisational goals invariably define technological innovation. This ethos confirms their desire not to waste money on new systems which do not provide a business value or solution to a specific business problem. McAfee relates to this theory as an “inside-out approach”.

To sum up the arguments, Inditex has one principle which fully shows that their IT/IS environment is Traditional: “computerisation is standardised and targeted”. You can see this on the low IT budget which is estimated 0.5% of revenue and the IT staff of 50.

Despite Inditex’s focus on the Traditional environment, there are also subtle undertones of Sullivan’s other three IT/IS environments displayed within the organisation. For example, there are factors which show that elements of Inditex’s IT/IS environment is Complex. They are dependent on their PDA’s which can also be difficult to manage. In addition they are also largely decentralized, because each store manager has to manage his PDA. This is also the case with regards to their POS systems. Inditex is a company with branches around the world. This makes it difficult to manage each POS in every store.

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In some points, the IT/IS environment of Inditex also displays Opportunistic aspects. In the case of Inditex the attributes for a Complex and Opportunistic environment are very similar. However, one of the more important factors to consider is the teamwork and cooperation conducted within Inditex. Their success is mainly based on the decision making abilities of their staff. This strategy is ensured as “technologists work with line managers to understand what the business requires and then start proposing solutions” which shows that the workforce is closely integrated and dependent more upon teamwork and decision making than IT capabilities. This type of culture is defined by Ward & Peppard (2002) as being an Opportunistic trait as they state that “integration of systems occurs due to user-user cooperation” occurs within this type of environment.

We also examined whether Inditex had aspects of a Backbone IS/IT environment. This may be a factor as the business processes are highly customised, thus the stores may be dependent on PDA’s for instance. However, we do not have enough information from the article to be sure whether traits of the Backbone environment exist within their structure.

In the late 1990s when other organisations spent vast sums of money on new technologies, Inditex withheld a Traditional framework. Great success has ultimately been achieved while “The relative absence of computers throughout Inditex is nothing short of amazing” (McAfee, 2004). Inditex has minimized the use of technology to their business needs and therefore they perform efficiently. In our opinion it is not important to classify which IT/IS environment Inditex has. It is more important that the IT/IS environment matches the business environment and the business needs so that IT can become a value creator in the organisation.

There are different types of information, which organisations have to handle. Examples of such information types include business process information (which documents any information about the processes of the organisation), information relating to physical-world observations (which relies on new technologies like GPS or RFID) and biological data containing biometrical information of their customers or employees. Government institutions also use public data like CCTV for public surveillance but the most important data types are those which indicates personal preferences or intentions which is often used by those within the retail market. Once these types of information have been collated, an organisational culture must be established to determine the way in which information should be stored, managed and shared within the organisation to adhere to the goals and objectives set out within the information strategy.

“Essential for the success of any information management strategy is the existence of an appropriate ‘information culture’. An information culture can be defined as the values, attitudes and behaviours that influence the way employees at all levels in the organization sense, collect, organize, process, communicate and use information.” (Ward & Peppard, 2002 p470)

There are four types of information culture defined by Marchand (1995):

Functional Culture

Within this culture it is the managers prerogative regarding which information is made available to the staff. It also follows a hierarchical structure regarding information sharing.

Sharing Culture

In this culture there is flat structure which is utilised to encourage trust and openness in order to share information between management and staff members. This culture is based on emotions such as trust which can be either advantageous or detrimental to the operation of the organisation or department as these emotions can frequently change.

Enquiring Culture

This culture may be used as an effective prediction to provide guidance for future developments. It is based on a sharing culture where managers and staff collaborate while it enables the organisation to reduce the ‘time-to-market’ of their products.

Discovery Culture

This culture adds to the enquiring culture and focuses on analysing the gathered information. This helps to provide the organisation with a view of changing environments, competitor performance, areas of possible expansion and potential market entry for the future etc.

These cultures are mostly found as combinations in organisations. Organisations have different information assets and their staff members have different information needs. Therefore, in order to use these information assets appropriately you need a customised culture which is aligned to the information needs of the organisation. Tesco provide us with a good example of this cross-over in culture definition as information is generally produced at the managerial level and distributed amongst the workforce while it can also be shared amongst line managers and employees at all levels throughout the organisation. An enquiring culture is also used to develop certain areas of the business to enable future profitability while a discovery culture is in place for Tesco’s attempted entry into markets such as insurance, banking and Internet broadband. All of these points convey Tesco as a ‘multi-culture’ organisation where different sectors of their business follow different cultures.

As we have discussed, the behaviours and attitudes of a workforce can have a profound effect on the success of an organisation’s performance. For this reason, the information culture must match the requirements of employees in order to facilitate a successful information strategy. Trust and receptiveness are just two behavioural traits which must be monitored in order for employee acceptance. The importance of considering these factors is agreed by Ferguson et al. who state that “sustainable competitive advantage will rely on two very human characteristics: insight and trust” (Ferguson et al., 2005 p58). From this point, we can conclude that the consideration of human aspects is vital for the strategic success of information and without an information culture, it can be very difficult to monitor and influence the behaviour and attitudes of the workforce.