This post is part of my collaborative research with Shinsei Bank on highly-evolvable enterprise software. It is licensed under the Creative Commons Attribution-ShareAlike 3.0 license. I am indebted to Jay Dvivedi and his team at Shinsei Bank for supporting this research. All errors are my own.
In my research on computer-assisted organizing, I set out to understand how computers alter the fabric of organizations. Here’s how I framed the problem in my dissertation:
In the computer age, complex information processing tasks are divided between humans and computers. Though designed and developed by humans, computers are autonomous agents that function as independent decision-makers. The dynamics of electronic information processing influence the dynamics of organizing and organizations in ways that cannot be understood in purely human terms. (Brunner, 2009)
My dissertation focused primarily on two aspects of this transformation: how computers drive further specialization in information processing work, and how computer-assisted work increases business scalability. A third aspect of the transformation had been on my mind ever since my days as a management consultant: it seems that computers and people are trading places within organizations.
In the past, humans created organizational structure through their patterns of interaction, while computers were plugged in to this structure to perform specific tasks. Increasingly, these roles are reversed: computers create organizational structure, while humans plug in to the computer system to perform specific tasks. Shinsei Bank’s mortgage loan operations provide an elegant example of the phenomenon. Rather than human credit approvers managing the loan application process from beginning to end and using computers to perform calculations or look up policies, a loan application system manages the process, calling on human appraisers, data entry clerks, analysts, or supervisors to provide input as necessary.
In Jay’s words, the computers orchestrate the work. The Oxford English Dictionary defines orchestrate as follows:
To combine harmoniously, like instruments in an orchestra; to arrange or direct (now often surreptitiously) to produce a desired effect.
The word seems apt. In computer-orchestrated work, computers arrange and direct business processes in order to “combine harmoniously” the work of individuals. Much like an assembly line, computer-orchestrated work enables individuals to focus on simple, well-defined tasks, while computers handle the coordination and integration of these fragmentary outputs. As bureaucracy1 eliminated the reliance of organizations on specific individuals by defining roles, so computer-orchestrated work enables organizations to survive without the patterns of human interaction that define and sustain the structure of traditional organizations.
Computer-orchestrated work may greatly increase organizational performance. By lowering to nearly zero the marginal cost of coordination and integration, computer-orchestrated work makes possible greater specialization, which accelerates learning and increase efficiency. Moreover, computer-orchestrated work lowers the costs of monitoring and metering, potentially reducing agency costs. Computer-orchestrated work is easier to analyze and modify, which facilitates innovation and increases the returns to highly-skilled human labor (c.f. Zuboff, 1989). Although the design challenges are significant, computer-orchestrated work may be an essential tool for creating more intelligent organizations.
1In the Weberian sense, as a highly effective organizing technology.