mti leading
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MANAGEMENT INFORMATION TECHNOLOGY
LEADING THE INFORMATION SYSTEMS FUNCTION
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Leading the IS Function
Three Assets (from chapter 1)
Computer and communications infrastructure that enables information sharing over standard IT platforms
Technology Asset
Established partnering relationships for joint IT-business decision-making
Relationship Asset
Pool of IT people talent for needed mix of technology and business skills Human Asset
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Leading the IS Function
Managing the Technology Asset consists of two major tasks Managing IT Service Delivery Managing IT Applications
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Evolving IS Role
Rapid technological change Exploding applications and data Growth in business management understanding of
technology Frequent external shocks
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Evolving IS Role
Important decisions for IS managers on how to structure and govern the IS function
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Designing the Organizational Structure and Governance
IS Governance The structure of the IS organization and how it is
governed have strengths and weaknesses Classic IS organization has a centralized governance
design Decentralized design is common in large multidivisional
companies and gives business units total control over there is resources
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Designing the Organizational Structure and Governance
Hybrid
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Designing the Organizational Structure and Governance
Centralized Governance Design Common for computer operations Can create cost efficiencies May provide greater integration of applications
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Designing the Organizational Structure and Governance Decentralized Governance Design Commonly found in organizations with highly
autonomous business units Each business unit has control over their own applications
and IT operations
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Designing the Organizational Structure and Governance
Hybrid Governance Designs These designs seek to gain the advantages of both
centralization and decentralization Federal
Computer and network operations are centralized Applications are decentralized
Customized Mixed design where some business units may have
centralized operations and some may have decentralized
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Designing the Organizational Structure and Governance
Hybrid Governance Designs
IT Operations
Business Unit IT
Applications
Business Unit IT
Applications
Business Unit IT
Applications
Federal Design Customized Design
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Designing the Organizational Structure and Governance Shared Services In this model, centralized IT operations operate as an
autonomous business within the company to provide IT services
In large corporations, multiple competing shared service providers may be set up
Multidivisional Business
Shared Service IT Operations & Applications
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Managing IT Service Delivery
Managing technology decisions often includes making trade-offs such as: Cost vs. security Cost vs. bandwidth or response time Convenience vs. security Standard vs. proprietary
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Managing IT Service Delivery
Sample charges: IS personnel (time spent and rate for specific skills) Computer usage (or computer cycles used) Disk file space (data storage costs based on type of storage unit) Number of transactions processed Amount of computer main memory used (per unit of time) Number of users of an application
Places control of IS spending with business managers, and is used to better understand true costs
Chargeback System
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Managing IT Service Delivery
Benefits of Chargeback Systems Assigning costs to those who consumer and benefit from
IT Controlling wasteful use of IT resources by encouraging
users to compare the benefits with the costs and eliminate unprofitable use
Overcoming erroneous perceptions that IT costs may be unnecessarily high
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Managing IT Service Delivery
Benefits of Chargeback Systems Cont. Providing incentives by subsidizing the price of certain
services or innovative uses of technologies Changing the IS departments budgeting process to be more
business driven, thus rewarding the IS organization for improved service and greater efficiency rather than technological change for its own sake
Encouraging line managers to be knowledgeable consumers of IS because they must directly pay for such support
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Managing IT Service Delivery
Characteristics of Good Chargeback Systems
Understandable Prompt and regular feedback Controllable Accountable Relate to benefits Consistent with IS and organizational goals
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Managing IT Service Delivery
Service Level Agreements (SLAs) should contain: A simple definition of the service to be provided (e.g., help desk support) The name(s) and contact information of IS personnel to contact for this service A table listing the services to be provided and their costs (e.g., how quickly different types of problems
will be responded to, and the costs associated with providing this type of service level) Escalation procedures (e.g., who to contact if the agreed upon service response is not being provided) A sign-off page for the appropriate business client and the IS liaison preparing the SLA document
Defines the client expectations for a specific type of IT service as well as procedures for when these expectations are not met
Service Level Agreements
(SLAs)
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Managing IT Service Delivery
ITIL Information Technology Infrastructure Library Created by the British Office of Government Commerce Processes that focus on the business aspect of IT service
delivery
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Managing IT Service Delivery
Outsourcing Can provide cost savings Commonly consist of long-term contracts Can be extremely complex Long-term contracts require months of preparation
prior to contract negotiation Difficult to bring outsourced services back in-house Can be controversial
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Managing IT Applications
Legacy Systems Maintenance on older systems can make up a large
portion of IT budget Integration of new technology with legacy systems can
be difficult and time consuming
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Managing IT Applications
IT Applications Portfolio Most companies cannot operate without software
applications they are critical assets Software portfolio needs to be managed as an asset A company must know:
What software it owns Where it is located What it does How effective it is What condition it is in
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Managing IT Applications
Metrics New systems projects can be evaluated using
established guidelines Quality On time Within budget
IS processes can also be evaluated CMM (or CMMI)
Maturity of process is described by five levels CMM level is often used when evaluating outsourcing vendors
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Managing IT Applications
Project Management Office (PMO) This management structure can improve performance
metrics May provide benefits in the form of: Repeatable processes Established change management procedures Post-project reviews
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Managing IT Human Resources
IT Skills IS personnel need a variety of skills in the evolving IS
organization of today These skills can be organized into the following
categories Technical Project Management Business Domain Sourcing IT Administration
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Managing IT Human Resources
Technical Skills
Systems analysis Systems design Programming Systems testing Database design/administration IT architecture/standards Operations (service delivery/ITIL) Mainframe Distributed systems Operating systems Voice/data telecommunications Help desk/desktop support Continuity/disaster recovery
Project Management Skills
Project team leadership Project planning, budgeting, &
scheduling Project risk management User relationship management CMM utilization Working globally/virtual teaming
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Managing IT Human Resources
Business Domain Skills
Account management & communications
Industry application knowledge
Company-specific knowledge
Function-specific knowledge
Business process design & reengineering
Change management/readiness
Sourcing Skills
Sourcing strategy Third-party provider
selection Contracting & legal Vendor relationship
management
IT Administration Skills
IT governance Financial management Internal HR management
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Managing IT Human Resources
Top-Paying IT Professional Skills (2006)
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Managing IT Human Resources
Retention of IS Professionals Retaining qualified staff is a key issue for IS managers Some common practices that managers uses can be : Changing the work environment to be more favorable Increasing career development opportunities Providing community-building initiatives Establishing monetary or other employee incentives
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Managing IT Human Resources
Insourcing and Outsourcing of IT skills What skills should be outsourced? What skills should be retained in-house?
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Managing IT Human Resources
Outsourcing Benefits Reduced costs Obtaining expertise from large service provider Ability to expand geographically Flexibility to expand or reduce IT resources Access to new technology
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Managing IT Human Resources
ASPs provide the application software and host the application on the vendors computers
Provide total systems to organizations, ranging from competitive intelligence systems to broad ERP applications
Application Service
Providers (ASPs)
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Managing IT-Business Relationship
Relationship Asset This is one of the three important IT assets A strong relationship is characterized as a partnership Business managers must work with IS managers to
realize investments in IT resources A formal statement of the IS organizations role may be
helpful in strengthening a strained or failed IT-Business relationship
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Managing IT-Business Relationship
Horizontal Mechanisms Four types of mechanisms that help to build the IT-
Business relationship
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Managing IT-Business Relationship
Horizontal Mechanisms Formal Groups Mechanism One example is the IS Steering Committee Their responsibilities might include:
Approve requests for new technology investments Set priorities for application development and implementation Monitor progress of IT projects against established timelines and
budgets Share responsibility and ownership for achieving business value
from IT investments
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Managing IT-Business Relationship
Horizontal Mechanisms Formal Roles Mechanism Some organizations have integrator roles to help achieve a
strong IT-Business relationship An account manager is an integrator role who manages the
relationship between the IS organization and a particular business unit
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Managing IT-Business Relationship
Measuring Overall IS Performance
A tool that provides an overview of organizational performance that is not strictly based on financial performance. In this tool, customer satisfaction, internal processes, innovation and learning, and financial performance make up the metrics.
Balanced Scorecard
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Managing IT-Business Relationship
Balanced Scorecard
Traditional performance
measures
Broader performance
measures
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Large multinational corporations operate globally to remain competitive
Operating effectively in multiple countries provides unique challenges to IS managers
Some of these challenges include: Country Telecommunications Infrastructure Legal and Security Considerations Language and Culture Time Zone Differences
Managing a Global IS Organization Special Issue
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Challenge: Country Telecommunications Infrastructure Reliable telecommunication service is crucial for
organizations to communicate in multiple locations Countries vary greatly in their telecommunications
infrastructure
Managing a Global IS Organization Special Issue
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Challenge: Legal and Security Considerations Intellectual property, copyright, and privacy laws differ
across countries Additional laws may govern the transferring of data
across national borders
Managing a Global IS Organization Special Issue
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Challenge: Language and Culture Even though many areas of the world are fluent in
English, language barriers can increase the risk of managing global IT operations
Cultural differences may require different communication mechanisms
Managing a Global IS Organization Special Issue
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Challenge: Time Zone Differences Coordination between groups operating at different
times can be difficult The ability to practice 24/7 development may be an
advantage; however, the handoffs must be managed carefully
Managing a Global IS Organization Special Issue
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Managing Offshore Outsourcing Arrangements Special Issue
Outsourcing that takes place outside of the country where the client is located
Offshore Outsourcing
This term describes offshore outsourcing to a geographic location that is much closer to the client (e.g., to take advantage of overlapping time zones) Near-shore
This term refers to the fact that there are multiple options for large firms when selecting an outsourcing site and each may provide a different benefit (e.g., some offshore outsourcing sites provide overlapping time zones, while others allow 24/7 development because the time zones do not overlap)
Best-shore
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Offshore Outsourcing Capabilities 1. Capability to strategize 2. Offshore readiness 3. Vendor selection 4. Contract facilitation 5. Relationship governance 6. HR management 7. Knowledge management 8. Distributed work management 9. IS organizational change 10. User Change
Managing Offshore Outsourcing Arrangements Special Issue
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