E. Wainright Martin Carol V. Brown Daniel W. DeHayesJeffrey A. Hoffer William C. Perkins
MANAGINGMANAGINGINFORMATIONINFORMATIONTECHNOLOGYTECHNOLOGY
FIFTH EDITION
CHAPTER 15
MANAGING THE INFORMATION SYSTEMS FUNCTION
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Rapid technological change
Exploding applications and data
Growth in business management understanding of technology
Frequent external shocks
THE CHALLENGES FACING IS LEADERSHIP
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IS leadership must manage these organizational assets:
Human resources Organizational data Physical infrastructure Applications portfolio
MANAGING THE ASSETS IN AN IS ORGANIZATON
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Most important asset in the IS organization is its people!
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Provide specialized IT training for IS professionals and others
MANAGING THE ASSETS IN AN IS ORGANIZATON
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Developing Human Resources
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MANAGING THE ASSETS IN AN IS ORGANIZATON
Page 584-585 Figure 15.1 Selected IS Management Positions (1 of 3)
Possible IS Management Positions
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MANAGING THE ASSETS IN AN IS ORGANIZATON
Page 584-585 Figure 15.1 Selected IS Management Positions (2 of 3)
Possible IS Management Positions
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MANAGING THE ASSETS IN AN IS ORGANIZATON
Page 584-585 Figure 15.1 Selected IS Management Positions (3 of 3)
Possible IS Management Positions
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Develop policies and procedures to manage an IT system’s physical assets – computer hardware and networks
MANAGING THE ASSETS IN AN IS ORGANIZATON
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Improving the Physical Infrastructure
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Infrastructure management issues addressed in policy statements:
1. Location
2. The workstation
3. Supported operating systems
4. Redundancy
5. Supported communications protocols
MANAGING THE ASSETS IN AN IS ORGANIZATON
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Improving the Physical Infrastructure
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Infrastructure management issues addressed in policy statements (cont.):
6. Bandwidth
7. Response time on the network
8. Security versus ease of access
9. Breadth of network access
10. Access to external data services
MANAGING THE ASSETS IN AN IS ORGANIZATONImproving the Physical Infrastructure
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Most companies cannot operate without software applications – they are critical assets
Just as physical infrastructure, software portfolio needs managed as an asset
MANAGING THE ASSETS IN AN IS ORGANIZATONManaging the Applications Portfolio
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A company must know: What software it owns Where it is located What it does How effective it is What condition it is in
MANAGING THE ASSETS IN AN IS ORGANIZATONManaging the Applications Portfolio
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Policies and guidelines must exist for the development and maintenance of IS applications
Maintenance should be treated as an activity necessary to preserve an asset’s value
MANAGING THE ASSETS IN AN IS ORGANIZATONManaging the Applications Portfolio
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Application portfolio policies must address:1. Assumed user
2. Application location
3. Process-driven or data-driven design
4. Evaluation criteria for new applications systems
MANAGING THE ASSETS IN AN IS ORGANIZATONManaging the Applications Portfolio
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Process-Driven Design Collects, manipulates,
and stores only data needed to operate a particular process
Most often used in the past
Data-Driven Design Concentrates on all
data needed and collects into database
Each application accesses common database for needed information
Managing the Applications Portfolio
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MANAGING THE ASSETS IN AN IS ORGANIZATON
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Ten key issues:1. Developing effective change management system (Chapter 12)
2. Ethical use of IT (Chapter 16)
3. Agreeing upon the role of the IS organization
4. Selecting effective IS leadership
5. Creating an active partnership with business managers
6. Determining an outsourcing strategy
7. Designing an equitable financing system
8. Deploying global information systems
9. Designing an appropriate IS organization and governance system
10. Ensuring regular performance measurement
INFORMATION TECHNOLOGY MANAGEMENT SYSTEM ISSUES
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IS organization: Role is continually changing
Needs a mission statement
Must be future-oriented while fulfilling today’s requirements
Must be aligned closely with business activities
1. Agreeing Upon the Role of the IS Organization
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INFORMATION TECHNOLOGY MANAGEMENT SYSTEM ISSUES
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IS organization is expected to: Demonstrate business understanding and maintain close communication with business managers Respond quickly to changing business needs Help reengineer business processes to be more customer responsive Ensure business can participate in e-commerce Keep final customer in mind Build systems that provide direct customer benefit Help business managers make better decisions with information Use IT for competitive advantage Help business integrate IT
1. Agreeing Upon the Role of the IS Organization
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IS organization is also expected to: Be steward of organization’s IT resources Deploy IT resources throughout the organization Facilitate productive use of resources Lead development of information vision and IT architecture Communicate vision and architecture Maintain managerial control over important information resources Administer corporate data Make current and new IT available at lowest possible cost Help business managers know and use technology Develop partnership with business managers to exploit technology
1. Agreeing Upon the Role of the IS Organization
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INFORMATION TECHNOLOGY MANAGEMENT SYSTEM ISSUES
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Chief Information Officer (CIO): A member of executive management team Needs mix of business and technical knowledge Guides and unifies entire organization’s IT resources Masters understanding of business, products, vendors, sales channels, customers, and
competition Recognize IT advantages and where to apply Hires good people and delegates Works with executive management team to achieve competitive advantage
2. Selecting Effective IS Leadership
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INFORMATION TECHNOLOGY MANAGEMENT SYSTEM ISSUES
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Senior IS Management Issues: Improving data and IT planning, especially linking IS to the business Gaining business value through IT Facilitating organizational learning about and through IT Refining the IS unit’s role and position Guiding systems development by business managers Managing organizational data as an asset Measuring IS effectiveness Integrating information technologies Developing systems personnel
2. Selecting Effective IS Leadership
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INFORMATION TECHNOLOGY MANAGEMENT SYSTEM ISSUES
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3. Creating an Active Partnership with Business Managers
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INFORMATION TECHNOLOGY MANAGEMENT SYSTEM ISSUES
Partnership – a critical strategy based on sustaining a long-term relationship between IS and business management
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IS steering committee or advisory board used to: Ensure frequent interaction Set priorities Check progress Allocate scarce resources Communicate concerns Provide education Develop shared responsibility
3. Creating an Active Partnership with Business Managers
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INFORMATION TECHNOLOGY MANAGEMENT SYSTEM ISSUES
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4. Determining an Outsourcing Strategy
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INFORMATION TECHNOLOGY MANAGEMENT SYSTEM ISSUES
Outsourcing – hired outside services to perform some of a company’s IS operations
Application service providers (ASPs) – provide total systems to organizations, ranging from competitive intelligence systems to broad ERP applications
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Outsourcing: Allows an organization to pay only for what it uses Trend might relate to the position of the CIO Popular, largely due to:
Fast pace of technological change Dissatisfaction and costs related to past in-house services
Must be both a remedy for service failures or costs and a strategic choice Should not be used for strategic information systems with security or privacy issues
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INFORMATION TECHNOLOGY MANAGEMENT SYSTEM ISSUES
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Key factors in selecting an outsourcing vendor: Vendor reputation Quality of service Flexible pricing
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INFORMATION TECHNOLOGY MANAGEMENT SYSTEM ISSUES
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5. Designing an Equitable Financing System
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INFORMATION TECHNOLOGY MANAGEMENT SYSTEM ISSUES
Typical measures used to track IT costs: Total IT budget as percentage of total organization revenues or income Total IT budget as percentage of total organization budget IS personnel costs as percentage of total organization professional
personnel salaries and wages Ratio of hardware and software costs to IS personnel costs Costs for IT hardware and software per managerial or knowledge
worker
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5. Designing an Equitable Financing System
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INFORMATION TECHNOLOGY MANAGEMENT SYSTEM ISSUES
Why is it hard to measure IT costs? Some IT costs are hidden
No relationship to benefits included in these measures
Benefits may happen after development costs occur
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INFORMATION TECHNOLOGY MANAGEMENT SYSTEM ISSUES
Measuring Benefits No simple way to measure value
added benefits of IT Can track IS performance measures
over time
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INFORMATION TECHNOLOGY MANAGEMENT SYSTEM ISSUES
Controlling IS Costs Use IS organization’s budget Divide costs:
Personnel Equipment and software Outside services Overhead
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INFORMATION TECHNOLOGY MANAGEMENT SYSTEM ISSUES
Chargeback Systems
IS chargeback process – places control of IS spending with business managers, and is used to better understand true costs
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5. Designing an Equitable Financing System
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INFORMATION TECHNOLOGY MANAGEMENT SYSTEM ISSUES
Why use a chargeback system? Assign costs to those who consume Control wasteful use of IT resources Overcome belief that IT costs unnecessarily high Provide incentives using subsidy Change IS to be more business driven Encourage managers to be knowledgeable consumers
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5. Designing an Equitable Financing System
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INFORMATION TECHNOLOGY MANAGEMENT SYSTEM ISSUES
Successful chargeback systems must be: Understandable Timely Controllable Accountable Clearly linked to benefits Consistent with IS and organizational goals
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6. Deploying Global Information Systems
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INFORMATION TECHNOLOGY MANAGEMENT SYSTEM ISSUES
Region and country issues influencing global IT management:
1. Country telecommunications infrastructures2. Legal and security considerations3. Language and culture4. Time zone differences
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6. Deploying Global Information Systems
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INFORMATION TECHNOLOGY MANAGEMENT SYSTEM ISSUES
Key trends of global outsourcing: Offshore development centers – permanent offshore presence Near-shore sourcing – outsourcing to countries close to home
and overlapping time zones Multisourcing – relying on multiple service providers in a
number of companies, based on price and skills
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6. Deploying Global Information Systems
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INFORMATION TECHNOLOGY MANAGEMENT SYSTEM ISSUES
Global team manager traits: Multiculturalist E-facilitator Recognition promoter Internationalist Traveler
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7. Designing an Appropriate IS Organization and Governance System
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INFORMATION TECHNOLOGY MANAGEMENT SYSTEM ISSUES
Figure 15.8 Classic IS Organization Structure
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7. Designing an Appropriate IS Organization and Governance System
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INFORMATION TECHNOLOGY MANAGEMENT SYSTEM ISSUES
Types of IS Organizational Design: Centralized – IS applications and resources housed, managed, and
controlled centrally Decentralized – business units have complete control of their own IS
resources Federal – attempt to achieve benefits of both centralized and decentralized Customized – mixed design in large enterprises where each division
determines best design for that division
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Centralized Decentralized Federal Customized
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7. Designing an Appropriate IS Organization and Governance System
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INFORMATION TECHNOLOGY MANAGEMENT SYSTEM ISSUES
Organization design depends on: How rest of business is organized Type of customer markets, products, and geographical spread Role of IT within the organization Reporting level of most senior IS leader Types of technologies managed by IS organization
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8. Ensuring Regular Performance Measurement
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INFORMATION TECHNOLOGY MANAGEMENT SYSTEM ISSUES
Necessary for internal customers to regularly evaluate IS organization
Need to show if promised cost savings are realized Required:
Agreement on measurable criteria Metrics to judge work quality
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8. Ensuring Regular Performance Measurement
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INFORMATION TECHNOLOGY MANAGEMENT SYSTEM ISSUES
IS Evaluation Criteria Meeting business objectives Responding rapidly and economically to new needs Expanding business or services Developing an architecture and plan Operating reliable and efficient technology resources Focusing on the customer Providing quality IS staff Reducing size of backlog Satisfying users Adopting new technologies
Figure 15.11 IS Evaluation Criteria
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8. Ensuring Regular Performance Measurement
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INFORMATION TECHNOLOGY MANAGEMENT SYSTEM ISSUES
Other measures to evaluate IS performance: Service level agreements with internal business units
can be used to evaluate IS performance
Annual surveys for each major system
User satisfaction surveys