The CCR Framework

The Different Categories

An enterprise information technology (enterprise IT, or EIT) is one that imposes new processes, and a network
information technology (network IT, or NIT) as one that lets new processes emerge over time as the result of
users interactions. The third technology category, called function IT (FIT) affects single tasks or functions
rather than multi-function business processes.


IT-based Capabilities
The three technology categories offer distinct and non-overlapping capabilities. All enterprise information
technologies, for example, deliver similar capabilities, even though the EIT category comprises applications
developed by many vendors and positioned for distinct markets and customers. While capabilities are similar
within the categories of FIT, EIT, and NIT, they are largely different across them. Function IT, for example,
does not offer a subset of enterprise ITs capabilities, or even a significant intersection with them.
Capabilities from Function IT
Increased experimentation capacity. FIT lets knowledge workers such as scientists, engineers, and
financial analysts conduct huge numbers of trials and quickly explore the solution space of their work
(BMW and Ducati).
Greater precision. If a system is well-understood, it can be modeled very accurately with FIT. This lets
knowledge workers conduct very precise experiments, understanding the effects of very small changes
and finding optima (Ducati).
Capabilities from Network IT
Facilitating collaboration. Network technologies let people work together without mandating or trying
to predict how they will interact. This flexibility means that network technologies support many modes
of collaboration (Blogs and Wikis at DrKW, wiki at VistaPrint).
Allowing expression of judgment. Network technologies give their users a voice and, in many cases, a
forum to express themselves. Prediction markets, for example, let people express their judgments about
the likelihood of future events (Blogs).
Capabilities from Enterprise IT
Design and redesign of business processes. Enterprise technologies allow general managers to define
and then deploy novel business processes, even ones that cut across many organization groups
(OTISLINE, Mount Auburn).
Standardization of workflows across an arbitrarily large footprint. Once a business process has been
embedded within EIT, it can be replicated and distributed cheaply, widely, and with high fidelity. One of
the problems of distributed companies is a reduced ability to control what happens far from
headquarters; EIT provides a way to address this problem (Mount Auburn, Zara).
Monitoring of activities and events, often in something close to real time. Another problem of corporate
scale has been managers inability to observe the performance of remote operations; available reports
are often both out-of-date and too aggregated. With EIT in place, managers can get a more precise and
current picture of what is happening throughout an enterprise (OTISLINE).
ITs Complements
The capabilities mentioned above are maximized when organizations that adopt new IT also adopt a set of
organizational complements.
Enterprise IT systems are used to define, then deploy new work structures new workflows, interdependencies,
and decision right allocations -- across multiple groups. In other words, enterprise technologies impose new
complements on adopting organizations, and these complements are largely inseparable from the technology
itself. It is not possible to introduce an ERP system without to some extent increasing interdependence, re-
allocating decision rights, or imposing new workflows. Think of how a new workflow was introduced when
Mount Auburn implemented the POE system. With the implementation of OTISLINE, the decision rights of the
field officers changed.
Network IT facilitates interactions among people and groups, but does not pre-define these interactions. In
other words, network IT does not impose complements. Some network technologies, however, contain
mechanisms to let new complementsnew workflows, interdependencies, and decision-right allocations
emerge over time as people use the technologies. We talked about the training wiki in DrKW, and that is a good
example of how workflows and interdependencies change over time in the case of Network IT. The decision on
who provides information to the employees of an organization changes if the company introduces an internal
blog. However, note that no one in the company is imposing these structures. No manager actually asked for the
training wiki. It is the employees who realize the potential of Network IT and create these work structures
themselves.
Function ITs value is increased by the complements listed above. With FIT, the organizational complements
of IT are separable from the technology itself. FIT can be adopted with or without any changes to
complements. We saw in class how BMWs styling software could be introduced without putting any
complements in place. However, Chris Bangle had to bring in the complements to get the maximum benefits.
He announced one day that he would drop the idea of the styling software if usage does not pick up in another
few weeks. This triggered off a change in interdependencies, and also a subsequent change in the workflows as
styling software experts started collaborating with the designers. We also looked at the example of Team New
Zealand (one of the participants in Americas Cup), and noted how the managers asked the team members to
collaborate and decide on the design of the boat. This changed the decision rights. However note that this had to
be initiated by the managers.
General Managers IT-related Responsibilities
General managers have three main IT-related responsibilities: to select I T based on desired capabilities,
then work during adoption and exploitation to put ITs organizational complements in place. With EIT,
adoption is typically the greater responsibility; with FIT and NIT, in contrast, exploitation often demands the
most from general managers.
General Managers Three Roles in IT Success

Selection
The Selection process should always be inside out across the different categories. Inside-out approach means
that managers should always look at the capabilities that they want to acquire from IT, and then look at the
technology space to select the appropriate IT. In contrast, the outside-in approach is about looking at what
others (competitors, industry leaders) are doing and then selecting the software without going into an analysis of
the capabilities that the organization needs to acquire from IT.
Adoption
The Adoption process for FIT entails identifying the complements properly, and then implementing them, what
Chris Bangle did in BMW (explained above).
This stage is extremely important for EIT. As complements are imposed on the employees, they naturally resist
the system. The key to addressing these issues is to identify the potential pockets of resistances right at the
selection phase, and then build a plan on how to counter resistance. The next step is to build consensus in the
organization on the importance, and benefits of implementing the system. However, business leaders, and
managers should be prepared to push the system through in spite of resistance. More often than not
implementation of EIT demands a slightly heavy handed approach.
The adoption of Network IT mainly involves making the employees aware of the technologies.
Exploitation
Exploitation of FIT involves fine tuning the complements, similar to what Team New Zealand did (explained
above).
The exploitation of EIT is easier than adoption of EIT as people are ready to use the system and get benefits
from it since they have gone through the pain of adopting it. Sometimes we use FIT on top of EIT to exploit
EIT, for example statistical software tools (FIT) can provide great insights into the business, once the company
standardizes data using EIT.
For Network IT, exploitation is important as well as subtle. Once the employees start using the technology, and
once the complements emerge over time, the responsibility of the mangers is to ensure that the complements are
sustained and enhanced. For example, at DrKW, one of the managers sustained and enhanced the complements
by asking his subordinates to use the wiki to enter questions they want him to ask at meetings with the senior
management.
Source Proprietary material of Prof Andrew McAfee. Used with permission.