MGT 6772: Reading Summarization (1/13/2015)

Information Technology Worker Systems in Structured

and Unstructured Environments
Name: Siddhanth Ganesan
ID: sganesan7
Technological innovation has changed the nature of resource related
decisions for service organizations. Attributes of the workforce and IT affect
the organizations ability to generate output volume and premium quality.
Firms invest in IT due to increasing cost of labor. The attributes of the ITworker system (the resources used in service operations environment) affect
the extent of premium quality derived from enhanced service quality. The
optimum mix of workforce and IT attributes must be chosen for optimal
amount of output volume and level of premium quality. IT is valuable for both
skilled and low-skill labor forces for structured and unstructured decision
making respectively.
The simple IT-worker system (Model A) is characterized by structured,
programmable decision making. A dedicated IT system is developed in order
to standardize the operations of service creation process. In such systems
workers are not offered incentives in the form of job enrichment due to the
low cost to replace them as well as need for many such workers. Thus
employee turnover is high. The cost of initial purchase of and
implementation of hardware required in such systems is high but cost of
operating the IT is low. The IT used here has low processing cost per unit but
is difficult to upgrade/modify. Size of the workforce as well as IT attributes
affect the output volume and quality in these systems. However, worker skill
does not affect the output volume and premium quality from the IT.
Complex IT-worker environments (Model B) are characterized by
unstructured, non-programmable decision making. The IT used is generally
off the shelf. The initial investment cost is low but the cost of operating
complex IT is generally high due to the high processing cost per unit.
Employees are generally more skilled in order to operate complex IT.
Employee turnover is low due to high wages and job enrichment. In this case
the skill and availability of the skilled workers has a large impact on the
output volume and premium quality.
The objective function in both models is to maximize profit. Simple and
complex IT-worker systems are formalized mathematically so that the
decision maker can derive managerial insights like exploring how the
features of an IT-worker system can affect total revenue, which is a function
of output volume and premium quality. Tradeoffs associated with different
technology choices can be assessed. The models also allow analysis of
situations when profit is maximized by substituting IT for workforce. IT and

workforce have a complementary relationship in Model B. Analysis of Model B

gives insight into factors that hinder or aid the complementary relationship.
On the other hand, In Model A, a substitution of workers for IT occurs. This
substitution has an effect on output volume and premium quality and
typically increases profits. An analysis of Model A gives insight into factors
that aid or hinder this substitution effect.