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The main reason, for investment in information technology not yielding the required dividends, is the lack of information sharing between the departments, primarily due to poor organization design system. The hardware (Information Technology) has to be in sync with the software (Human Resource) to achieve the objective of
promotions of product and services and minimize the error in demand forecasting. Hence, the need arises to emphasis on improving the organization design system to realize the benefits from information technology tools.

New Technologies Unable to Deliver With Old Organizational Silos

Organization design system is a formal, guided process for integrating the people, process, information and technology of an organization. The organization design system of the companies in the networked economy of 21st century requires a fundamental transition from 20th century's system to industrial age system in order to improve the forecasting process and to enhance the information sharing process between departments.

The 20th century or industrial age system leads to organization embracing functional management system of dividing company into functional silos such as R&D, Finance and Marketing. This organization design system was ideal to manage the complexity of transforming from an agricultural age to industrial age.

The technology advances and bargaining power shifting from supplier to customer due to liberalization, privatization and globalization (LPG) enforces the need for rethink on functional silos type of organization design.

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* Contributed by: -
Uppili. R,
Alumnus of Great Lakes Institute of Management & M.A. (Economics) from Madras University,
Currently working as Research Analyst at Vistasoft India Private Limited.