Stages of growth model

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In the 1970s Richard L. Nolan developed the Stages of growth model which describes the evolution of information technology in organisations. It identifies six stages that an organisation could pass through.

Contents 1 The Model 1.1 Stage 1 – Initiation 1.2 Stage 2 – Contagion 1.3 Stage 3 – Control 1.4 Stage 4 – Integration 1.5 Stage 5 – Data Administration 1.6 Stage 6 – Maturity 2 Critical Summary 3 References

[edit] The Model

[edit] Stage 1 – Initiation

The first cautious use of a new technology.

• low expenditures for data processing.
• small user involvement.
• lax management control.
• emphasis on functional applications to reduce costs.

[edit] Stage 2 – Contagion

The enthusiastic adoption of computers in a range of areas.

• proliferation of applications.
• users superficially enthusiastic about using data processing.
• management control even more lax.
• rapid growth of budgets.
• treatment of the computer by management as just a machine.
• rapid growth of computer use throughout the organization's functional areas.
• computer use is plagued by crisis after crisis.

[edit] Stage 3 – Control

A reaction against excessive and uncontrolled expenditures of time and money on computer systems.

• but no going back on computer use.
• Data processing department is raised higher in the organisation.
• centralised controls placed on the systems.
• applications often incompatible or inadequate.
• use of database and communications, often with negative general management reaction.
• end user frustration.

[edit] Stage 4 – Integration

Using new technology to integrate systems that were previously disparate.

• rise of control by the users.
• large data processing budget growth.
• demand for on-line database facilities.
• Data processing department operates like a computer utility.
• formal planning and control within data processing.
• users more accountable for their applications.
• use of steering committees, applications financial planning.
• Data processing has better management controls, standards, project management.

[edit] Stage 5 – Data Administration

A new emphasis on managing corporate data rather than IT.

• identification of data similarities, its usage, and its meanings within the whole organization.
• applications portfolio is integrated into the organization.
• Data processing department serves more as an administrator of data resources than of machines.
• use of term IT/IS rather than data processing.

[edit] Stage 6 – Maturity

Systems that reflect the real information needs of the organisation.

• use of data resources to develop competitive and opportunistic applications.
• Data processing organisation viewed solely as a data resource function.
• Data processing emphasis on data resource strategic planning.
• ultimately users and DP department jointly responsible for the use of data resources within the organisation.
• Manager of IT system takes on the same importance in the organizational hierarchy as say the director of finance or director of HR

[edit] Critical Summary

Nolan's Stages of Growth model provides one of the earliest known theoretical models to assist in understanding how computing systems (the current idiom is the term "IT", for "Information Technology") develop within an organisation.

Application of the model would not necessitate that any specific organisation must start from stage 1 - though that might have been the case in the 1980s. Since then, IT has become ubiquitous and in many cases essential for enabling core business processes. Thus some form of computer system would likely be found in almost any organisation being studied - at least in developed or developing economies.

Whilst the model may be applied to the whole of an organisation, it may be of more use to to analyse what stage of growth discrete parts of an organization are at - e.g., such as business units, or functional areas - in terms of one of the six growth stages.

The model is arguably of most use where it is desired to obtain a better understanding of the existing stage (i.e., from stages 1 to 6) of an organisation, as a starting point for (say) management control, or further improvement, or as a guideline for probable growth of (parts of) IT systems.

[edit] References

• Nolan, Richard (1979). "Managing The Crisis In Data Processing". Harvard Business Review 57 (2): 115-126.