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Henri Fayol1841-1925Henri Fayol1841-1925

IS 371 Week 3Agenda:

• Administrative things • Homework #1 due now

Watch for grades on COL

•• IT Department Administration (more) • IT Globalization and Culture• IT Outsourcing

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Henri Fayol1841-1925Henri Fayol1841-1925

IT Traditional Roles/Responsibilities

• Enable corporate strategies  - Competitive strategies - Low Cost/High Quality/Special Niche 

• Process redesign  - Value enhancement 

• Enhance workgroup productivity 

• Infrastructure/Architecture 

• Service Management 

• Resource Management

The Real, Critical Role of IS Management is to translate these IT activities for User Managers 

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Henri Fayol1841-1925Henri Fayol1841-1925

GovernanceBusiness PlanAlignment

Process Improvement

ResourceOptimization

OperatingExcellence

Information Management Superiority - Strassmann

Exercises authority and achieves corporate consensus

IT and business plans must be congruent

Searching for improvements is ongoing (Kaizen)

Always question whether resources are used most effectively

Quality in the business process is critical

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Henri Fayol1841-1925Henri Fayol1841-1925

MAJOR TRENDS IN IT MANAGEMENT

• GLOBALIZATION OF BUSINESS - Specialized talent- Reduction in cost- Time to market – follow the sun development

• VELOCITY OF CHANGE IN BUSINESS- Time from recognition of business need to system operation- Pace of technology changes

• OUTSOURCING- Cost savings - Functionally discrete, non-core

business- Political compromise - Lack of internal skills

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Henri Fayol1841-1925Henri Fayol1841-1925

According to the CIO desk reference–Meta Group, 2001, most IT organizations “have a cost center, ‘just-keep-the-lights-on’, service-utility mentality that maintains IT should be mostly transparent to

the rest of the business. If things are going well, no one knows the IT organization is there. If things are going badly, it gets noticed.”

Organizations in which IT is viewed as extremely critical to the business, are those in which the CIO has realized that marketing the IT organization furthers the awareness of the value that IT adds to the business and helps ensure the CIO is a business partner.

The best way to achieve this partnership is by organizing IT to respond to the needs of individual business groups. This can only be done by:

• establishing working relationships at individual and group levels with all business partners in which business teams, including IT as a “business,” can work together.

• Enterprise infrastructure is the only IT project.

• Whether responsible for 10 percent or 90 percent of the tasks, IT is a member of a business team led by a business project champion.

• All projects require business unit champions and business project champions.

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Henri Fayol1841-1925Henri Fayol1841-1925

ORGANIZATIONAL STRUCTURE / GOVERNANCE

• Functional • Centralized

• Project/Process • Decentralized

• Matrix

Henri Fayol1841-1925Henri Fayol1841-1925

In the beginning, IT was managed by the Accounting Department

IT

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Henri Fayol1841-1925Henri Fayol1841-1925

As IT applications expanded beyond Accounting, IT moved up in the organization

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Henri Fayol1841-1925Henri Fayol1841-1925

Centralized IT Structure

President

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Henri Fayol1841-1925Henri Fayol1841-1925

Decentralized Structure

InformationCenter SecurityConsulting

SystemsPlanning Standards

Research andDevelopment

SystemsIntegration

IS Director

Administration

CIO

Services

Networking

Operationsand Networking

Planning

CorporateSystems

Financial andAccountingSystems

Production andOperational

Systems

HumanResources

ManagementSystems

MarketingSystems

President

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Henri Fayol1841-1925Henri Fayol1841-1925

Functional Alignment: organized around similar resources performing similar activities –

task centered

A categorization of business activities, such as: - marketing- sales- production - human resources- finance- materials management - accounting

- information technology

Within the IT Department: Organizing IT personnel by functional knowledge and platforms:  organized around resources.

- What are some “IT Functions?” 

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Henri Fayol1841-1925Henri Fayol1841-1925

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Henri Fayol1841-1925Henri Fayol1841-1925

FUNCTIONAL RELATIONSHIPS EMPHASIZE FORMAILTY

Communication Flow

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Henri Fayol1841-1925Henri Fayol1841-1925

Functional Alignment

• Advantages:- reduced training costs (peers together to facilitate training)- expertise fostered - reduced task-switching time- easier workforce scalability

• Disadvantages:- internal, parochial focus- limited connections between functions - silo effect- rigidity

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Henri Fayol1841-1925Henri Fayol1841-1925

• PROJECT / PROCESS ORIENTATION --

- organized around outputs

- A specific ordering of work activities across time and place with a beginning, an end, and clearly identified inputs and output."

- the focus is "HOW" to get to outputs

- organizational orientation:  horizontal workflow value chain

- people are geared to becoming flexible generalists

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Henri Fayol1841-1925Henri Fayol1841-1925

Project/Process Alignment: Organizing IT personnel by tasks and services

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Henri Fayol1841-1925Henri Fayol1841-1925

Project/Process Organization

• Advantages– Effective and efficient for large projects– Resources available as needed– Broad range of specialists– short lines of communication– easy to measure progress

• Drawbacks– Expensive for small projects– Specialists may have limited technological

depth– May require high levels of duplication for

certain specialties

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Henri Fayol1841-1925Henri Fayol1841-1925

PROCESS (PROJECT) RELATIONSHIPS EMPHASIZELATERAL COORDINATION / COMMUNICATION 360 DEGREE VIEW

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Henri Fayol1841-1925Henri Fayol1841-1925

• The Present and Future are shifting toward project/processes . . .

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Henri Fayol1841-1925Henri Fayol1841-1925

Who is Henri Fayol?

A French engineer who:

Defined the functions of management:• Planning • Organizing • Leading • Controlling

And identified 14 principles of management:• Specialization/division of labor• Authority with responsibility• Discipline• Unity of command• Unity of direction• Subordination of special interests• Remuneration• Centralization• Chain / Line of Authority• Order• Equity• Lifetime jobs (for good workers)• Equity• Esprit de corps