The article by M.A. Ward and S. Mitchellb (2004) examines and analysis the differences between public and private sector organizations. Special attention is given to the strategic and planning priority selected by information resource management.
The authors underline that planning and management can lead to an increased ability of state and local government managers to evaluate, select, and implement alternative approaches to the financing and delivery of needed public services. Such application of strategic planning, thinking, and management–drawing upon the vast resources of a variety of organizations and institutions–can have significant positive effects on the efficiency of state and local government, the improvement and simplification of selected service delivery functions, and the financial viability of individual agencies and jurisdictions.
Thesis I agree with the authors that private-sector information management pays more attention to IT and innovative solutions providing market-oriented planning and development.
The authors state that public organizations pay no attention to IT and software development using old-fashioned tools and techniques. I agree with Ward and Mitchellb that ” a new software personnel system created by the private sector could be adopted by the public sector to provide employees with better access to their financial records, benefits packages, and so on” (p. 300). The overall strategic plan was adopted by the local government and civic leaders of the community and was systematically tied into their operating budgets. Details were then worked out as to responsibilities and timing for implementation.
A private, nonprofit organization called the Council for Educational Excellence has been established to increase citizen awareness of the link between quality education and economic growth. These situations are typical of much of the program and policy planning that takes place in government today. Unfortunately, many public decisions must be made in an environment where the goals, constraints, and consequences of possible actions are not precisely known (Lynn, 2006). The main difference between public and private sectors is explained by the fact that the private sector concentrates on economic, well-defined long-term strategies while the public sector concentrates on politics and very broad short-term strategies. In carrying out its mission, the strategic planning team developed several key strategies (Simon, 2007):
I suppose that private organizations are better prepared for changing market environment by adopting IT solutions and innovative techniques. Companies have invested increasingly in communication technology since the early 1990s. In 1991, America’s service sector companies spent over $100 billion on hardware, equal to more than $12000 per information worker. Assuming that companies spend their resources wisely, it is tempting to conclude that higher expenditure on communication technology will increase a firm’s overall performance. If investment into IT has not increased the value produced, management must rethink communication technology strategies (Carr 2004): This has put managers responsible for determining the level of communication technology expenditure in a difficult position.
While communication technology is viewed intuitively as an important asset, managers do not know how to measure its impact, how to decide on the area in which to invest in it, or even how much to invest into it. T technology suggests that a strategic communication technology system should reduce costs, add value, or create significant switching costs that result in financial benefit before competitors are able to copy the technology.
Productivity, customer value, and above-average returns are, however, different measures that do not necessarily coincide. Information technology, in particular, has been found to lead to both increased productivity and customer value, yet the link to supranormal business profitability has not been confirmed. What may be a short-term competitive advantage translates into an obligation for continued competitive viability. It is, therefore, less surprising to find that case studies and anecdotes propose that communication technology in itself does not lead to sustained performance advantages. Rather than viewing communication technology as the factor enabling companies to achieve a competitive advantage, it has to be viewed as a ‘strategic necessity’ Public sector organizations that do not adopt communication technology will have a higher cost structure and be at a competitive disadvantage.
In addition, since communication technology is readily available to all companies, including competitors, it cannot be a factor for sustained competitive advantage (Carr 2004): Rather than viewing communication technology as an opportunity on which to build a future strategy, it is more likely to be a threat, since avoiding investments into communication technology may be a reason for competitive decline (Lynn, 2006). Overall private organization IT planning is conducted at the next higher level and is concerned with the overall organization. Issues like new services, consolidations, joint agreements, and major reorganizations of departments are examples
In sum, the authors are right that public sector organizations lack a strategic vision of the future and spirit of the age. If they adopt IT solutions and strategies used by private organizations, it will help them to improve performance and reduce the number of routine tasks. This process should move through successively higher levels within the organization until the chief executive (or perhaps the elected body or clients) makes the final decisions about priorities.
It does not take into account interdependence among items, programs, projects, and events. Putting IT resources into a planning effort should result in more knowledge for decisions and, therefore, better organizational performance. According to the resource-based view of firms, companies should invest in technology in areas that together form a resource configuration providing a competitive advantage. It has been suggested that, by exploiting pre-existing, complementary human and business resources, communication technology creates an advantage.
References
Carr, N. G. (2004). Does IT Matter? Information Technology and the Corrosion of Competitive Advantage. Harvard Business School Press.
Lynn, L. E. (2006). Public Management As Art, Science, and Profession (Public Administration and Public Policy). Chatham House Publishers.
Ward, M.A., Mitchellb, S (2004). A comparison of the strategic priorities of public and private sector information resource management executives. Government Information Quarterly. 21 (284–304.
Simon, H.A. (2007). Administrative Behavior, 4th Edition. Free Press; 4 Sub edition.