Week 14 - Enterprise & Global Management Information Technology

8/4/2019 Week 14 - Enterprise & Global Management Information Technology

1/60

Enterprise and Global

Management of InformationTechnology

Chapter

8.1 (week 14)

McGraw-Hill/Irwin Copyright 2009 by The McGraw-Hill Companies, Inc. All rights


2/60

Identify each of the three components

of information technology management

Use examples to illustrate how they might

be implemented in a business

Explain how failures in IT management

can be reduced by the involvement of

business managers in IT planning andmanagement

Learning Objectives

14-2


3/60

Learning Objectives

Identify several cultural, political, and

geo-economic challenges that confront

managers in the management of global

information technologies

Explain the effect on global business/IT

strategy of the trend toward a

transnational business strategy byinternational business organizations

14-3


4/60

Learning Objectives

Identify several considerations that affect

the choice of IT applications, IT

platforms, data access policies, and

systems development methods by aglobal business enterprise

Understand the fundamental concepts of

outsourcing and offshoring, as well asthe primary reasons for selecting such an

approach to IS/IT management

14-4


5/60

Business and IT

As the 21st century unfolds, manycompanies are transforming themselvesinto global powerhouses via majorinvestments in

Global e-business

E-commerce

Other IT initiatives

There is a need for business managersand professionals to understand how tomanage this vital organizational function

14-5


6/60

Case 1: Toyota, Procter & Gamble, HessCorporation, and Others

Today, the role of a CIO has become verystrategic. Tomorrows CIOs will be even moreinvolved in strategic thinking and influential in anorganization.

The skills needed to be a CIO has changed astheir role has shifted from being a technologist

to business strategist.

Developing and mentoring their successors is

one of the key responsibilities of IT leaders in anenvironment that includes the changing role of

the CIO and a shortage of qualified managers.

14-6


7/60

Case Study Questions

1. Several comments in the case note that CIOs are ina unique position for companywide leadership,

extending beyond their primary technological

concerns. Why do you think this is the case? How

are CIOs different in this regard from other chief

officers, for example, in finance, HR, or marketing?

2. After reading the case, what do you think are the

most important competencies for the successful

CIO of tomorrow? How do you rate yourself in

those? Had you considered the importance of theseskills and abilities before?

14-7


8/60


3. How can CIOs prepare theirsuccessors for an uncertain future

that will most likely require skills

different from those possessed by thesuccessful CIOs of today? Which key

competencies are enduring, and

which ones are a function of the

current technological environment?

How can CIOs prepare for the latter?

14-8


9/60

Components of IT Management

14-9


10/60

Managing Information Technology

Managing the joint development andimplementation of business and IT strategies

Use IT to support strategic business priorities

Align IT with strategic business goals

Managing the development and implementationof new business/IT applications and technologies

Information systems development

Managing the IT organization and infrastructure

Hardware, software, databases, networks, and otherresources

14-10


11/60

Managing the IT Function

Three things happened in the past fewyears

The Internet boom inspired businessesto connect their networks

Companies on on their intranets essentialapplications without which their businessescould not function

It became apparent that maintaining PCs

on a network is very, very expensive

These things created an urgent need forcentralization

14-11


12/60

Organizing IT

Early Years Centralization of computing with large

mainframes

Next Downsizing and moving back to

decentralization

Current

Centralized control over the management ofIT while serving the strategic needs ofbusiness units Hybrid of centralized and decentralized

components

14-12


13/60

Avnet Marshall Organizational Components

14-13


14/60

Managing Application Development

Application development

management involves

Systems analysis and design

Prototyping

Applications programming

Project management

Quality assurance

System maintenance

14-14


15/60

Managing IS Operations

IS operations management is concernedwiththe use of hardware, software, network,and personnel resources in data centers

Operational activities that must bemanaged

Computer system operations

Network management

Production control

Production support

14-15


16/60

System Performance Monitors

Software packages that

Monitor the processing of computer

jobs

Help develop a planned schedule of

computer operations that can optimize

computer system performance

Product detailed statistics that are

invaluable for effective planning and

control of computing capacity

14-16


17/60

Features of System PerformanceMonitors

Chargeback Systems

Allocates costs to users based on the

information service rendered

Process Control Capabilities

Systems that not only monitor but

automatically control computeroperations at large data centers

14-17


18/60

IT Staff Planning

Recruiting, training and retaining

qualified IS personnel

Evaluating employee jobperformance and rewarding

outstanding performance with

salary increases and promotions

Setting salary and wage levels

Designing career paths

14-18


19/60

IT Executives

Chief Information Officer (CIO)

Oversees all uses of information technology

in many companies, and brings them into

alignment with strategic business goals

Chief Technology Officer (CTO)

In charge of all information technology

planning and deployment

Manages the IT platform

Second in command

14-19


20/60

Other IT Positions

E-commerce architect

Technical team leader

Practice manager Systems analyst

14-20


21/60

Technology Management

All information technologies must bemanaged as a technology platform forintegrating business applications

Both internally or externally focused The Internet, intranets, electronic commerce

and collaboration technologies, CRMsoftware, enterprise resource planning, andsupply chain management

Often the primary responsibility of a chieftechnology officer

14-21


22/60

Managing User Services

Business units that support and manage enduser and workgroup computing

Can be done with information centersstaffed with user liaison specialists or withWeb-enabled intranet help desks

Key roles

Troubleshooting problems

Gathering and communicating information

Coordinating educational efforts Helping with end user application development

14-22


23/60

Outsourcing

The purchase of goods or services from

third-party partners that were previously

provided internally14-23


24/60

Outsourcings Top Ten

14-24


25/60

Why Outsource?

Save money achieve greater ROI

Focus on core competencies

organizations can focus on the

business that they are in

Achieve flexible staffing levels

Gain access to global resources Decrease time to market

14-25


26/60

Offshoring

Relocation of an organizations business

processes to a lower cost location

This location is typically overseas

Can be either production or service

Growth of services offshoring is linked to

Availability of large amounts of reliable

and affordable communication infrastructure Digitization of many services

14-26


27/60

Failures in IT Management

IT not used effectively

Computerizing traditional business

processes instead of developing

innovative e-business processes

IT not used efficiently

Poor response times

Frequent downtimes

Poorly managed application

development14-27


28/60

Management Involvement & Governance

Managerial and end user

involvement

Key ingredient to high-quality

information system performance

Involve business managers in IT

management

Governance structures, such as

steering committees

14-28


29/60

Sr. Managements Involvement in IT

14-29


30/60

The International Dimension

Companies around the world are

developing new models to operate

competitively in a digital economy

These models are structured, yet agile,global, yet local

They concentrate on maximizing the risk

adjusted return from both knowledge and

technology assets

14-30


31/60

Case 2: Reinsurance Group of Americaand Fronterrra

Consistency across the different business functions,countries, languages and processes involved in worldwide

implementations is one of the most important challenges

faced by global organizations today.

Reinsurance Group of America faced with a challenge indeveloping a single system that manages reinsurance

business processes for numerous offices around the world

offices whose staffs speak different languages, are in

different time zones, and just might be stuck in their ways

as to how they manage their business. The result of developing this system resulted in a return on

investment of 15% which was better than expected.

14-31


32/60


1. What is the business value of these global systemdevelopments for the companies mentioned in the case?

How did they achieve these benefits? What were the major

obstacles they had to overcome?

2. What are the advantages and disadvantages of a fullblown

versus a phased approach for system implementations ingeneral, and global ones in particular? How do you make

the decision on which road to take?

3. How important is that all units in global organization speak

the same business language, and use the same functions

and business processes? How do you balance the

competing needs for flexibility and consistency across

operations?

14-32


33/60

Global IT Management Dimensions

14-33


34/60

Global IT Management Challenges

Political challenges

Many countries regulate or prohibit thetransfer of data across their national boundaries

Others severely restrict, tax, or prohibit

imports of hardware and software Some have local content laws that specify the portion

of the value of a product that must be added in thatcountry if it is to be sold there

Others require a business to spend part of the

revenue they earn in a country in that nationseconomy

14-34


35/60


Geoeconomic challenges

Physical distances are still a major problem

It may take too long to fly in specialists

It is difficult to communicate in real timeacross 24 time zones

Many countries do not have good telephoneand telecommunications services

It may be hard to find skilled local workers

There can be great differences in the cost ofliving and labor costs between countries

14-35


36/60


Cultural challenges

Languages

Cultural interests

Religions

Customs

Political philosophies

Global IT managers need cultural trainingbefore they are sent on assignment

Different work styles and businessrelationships

14-36


37/60

Transnational Strategies

Companies are moving toward a

transnational strategy

Business depends heavily on

information systems and Internet

technologies to help integrate global

business activities

Requires an integrated andcooperative worldwide IT platform

14-37


38/60

Transnational Business/IT Strategies

14-38


39/60

Global Business Drivers

Business requirements caused by thenature of the industry and its competitiveor environmental forces

Examples of global drivers: Customers

Products

Operations

Resources

Collaboration

14-39


40/60

Global IT Platforms

Hardware Difficulties

High prices

High tariffs

Import restrictions

Long lead times for government approvals

Lack of local service or spare parts

Lack of documentation tailored to local

conditions

14-40


41/60

Global IT Platforms

Software Difficulties

Packages developed in Europe may

be incompatible with American or

Asian versions

The software publisher may refuse to

supply markets that disregard software

licensing and copyright agreements

14-41


42/60

International Data CommunicationsIssues

14-42


43/60

The Internet as a Global IT Platform

The InternetAn interconnected matrix that reaches tens

of millions of users in over 100 countries

Business environment is free of traditional

boundaries and limits Without incurring massive cost outlays

for telecommunications, companies can Expand markets

Reduce communications and distributioncosts

Improve profit margins

14-43


44/60

Key Questions for Global Websites

Will you have to develop a new navigational logicto accommodate cultural preferences?

What content will you translate, and what contentwill you create from scratch to address regional

competitors or products that differfrom those in the U.S.?

Should your multilingual effort be an adjunctto your main site, or will you make it a separate

site, perhaps with a country-specific domain?

14-44


45/60

Key Questions for Global Websites

What kinds of traditional and new mediaadvertising will you have to do in eachcountry to draw traffic to your site?

Will your site get so many hits that youllneed to set up a server in a localcountry?

What are the legal ramifications ofhaving your website targeted at aparticular country, such as laws oncompetitive behavior, treatment ofchildren, or privacy?

14-45


46/60

Internet Users by World Region

14-46


47/60

Global Data Access Issues

Transborder Data Flows may be

viewed as violating

A nations sovereignty because it

avoids customs duties and regulations

Laws protecting the local IT industry

from competition

Laws protecting local jobs

Privacy legislation

14-47


48/60

U.S.-E.U. Data Privacy Requirements

Key data privacy provisions

Notice of purpose and use of data collected

Ability to opt out of third-party distribution

of data

Access for consumers to their information

Adequate security, data integrity, and

enforcement provisions

14-48


49/60

Internet Access in Restrictive Countries

The struggle between Internet censorship andopenness at the national level revolves around

Controlling the conduits

Filtering the flows

Punishing the purveyors

Most of the world has decided that restrictingInternet access is not a viable policy

Restricting access also hurts a countrys opportunities

for economic growth and prosperity

14-49


50/60

Global Government Internet Restrictions

High Government Access Fees Kazakhstan, Kyrgyzstan

Government Monitored Access

China, Iran, Saudi Arabia, Azerbaijan,Ubekistan

Government Filtered Access Belarus, Cuba, Iraq, Tunisia, Sierra Leone,

Tajikistan, Turkmenistan, Vietnam

No Public Access Allowed Burma, Libya, North Korea

14-50


51/60

Global Systems Development

Key development issues

Conflicts over local versus global system

requirements

Trying to agree on common system features

Disturbances caused by systems

implementation and maintenance activities

Global standardization of data definitions

14-51


52/60

Systems Development Strategies

Key strategies for global systems

development

Transform an application used by the home

office or a subsidiary into a global application Set up a multinational development team

Parallel development

Centers of excellence Offshore development

14-52


53/60

Internet-Enabled IT Development

14-53


54/60

Case 3: General Motors: Factory ITFaces Its Biggest Test Yet

Today companies need manufacturing capability that canrespond quickly to changing tastes of the consumers.

GM is looking at how it can make changes on the

production lines at its plants more deftly to react to shifting

consumer tastes.

In 2006 and 2007, the number of vehicles on which

production ceased because of IT related problems

decreased about 50% over 2005. So far in 2008, the

number of vehicles it has had to stop production on

because of IT related issues is less than 5% of thevehicles.

IT plays a big part in enabling GMs responses to market

demand.

14-54


55/60


1. What are some of the major business benefits of the type

of technology rollout implemented by GM, e.g. product

routing and order management systems? What other

benefits may accrue to the company, beyond those

directly related to improved manufacturing efficiency?

Provide several examples from both categories.2. One of the hallmarks of GMs rollout is the creation of four

command centers distributed throughout the world. While

local plants are the first line of defense, more important

issues are handled at these command centers. What are

some advantages and disadvantages of this structure?Provide several examples of each and your justification

for inclusion in your list.

14-55


56/60


3. While commonality and standardizationhelp GM improve its efficiency and reduce

costs, they may have the downside of

hindering innovation in the different plants.

Reread the statements by Kirk Gutmann tothis effect. Do you believe he means

innovation is not important? How could GM

strike a balance between these two

seemingly conflicting objectives? Provide arecommendation and rationale for your

proposed course of action.

14-56


57/60

Case 4: IBM Corporation

Only services can provide growth on thescale that IBM needs to makeshareholders happy To combat cheaper offshore companies, IBM

is giving away technology In theory, giving away software, patents,

and ideas will Help the entire industry grow faster

Open new frontiers Create opportunities for IBM to sell high-value

products and services

14-57


58/60

Case 4: IBM Corporation

To cut costs, IBM is also offshoring

India accounts for the largest number of

IBMers outside the United States

By the end of next year, IBM Serviceshead count in India will top 52,000

More than one-fourth of all services personnel

About one-sixth of IBMers worldwide

14-58


59/60


1. Do you agree with IBMs employmentresponse to competition from softwaredevelopment contractors in India likeWipro that are expanding into IT

consulting services?2. Will IBMs plan to give away some of its

IT assets and intellectual property andincrease support of opensource

software products be a successfulgrowth strategy in the brutallycompetitive marketplace in which itoperates?

14-59


60/60


3. Do you agree with IBM

researchers assumption that IT

will remain hard to use,

expensive, and labor-intensive,with customers continuing to need

help solving business problems

for along time to come? Should IBM bet its business on that

assumption?

Date post:	07-Apr-2018
Category:	Documents
Upload:	sharifah-ruby
View:	219 times
Download:	0 times

Week 14 - Enterprise & Global Management Information Technology

Documents