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CHAPTER 5

Organizational Structures that Support Strategic Initiatives

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LEARNING OUTCOMES

5.1 Compare the responsibilities of a chief information officer (CIO), chief technology officer (CTO), chief privacy officer (CPO), chief security officer (CSO), and chief knowledge office (CKO)

5.2 Explain the gap between IT people and business people and the primary reason this gap exists

5.3 Define the relationship between information security and ethics

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ORGANIZATIONAL STRUCTURES

• Organizational employees must work closely together to develop strategic initiatives that create competitive advantages

• Ethics and security are two fundamental building blocks that organizations must base their businesses upon

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IT ROLES AND RESPONSIBILITIES

• Information technology is a relatively new functional area, having only been around formally for around 40 years

• Recent IT-related strategic positions:– Chief Information Officer (CIO)– Chief Technology Officer (CTO)– Chief Security Officer (CSO)– Chief Privacy Officer (CPO)– Chief Knowledge Office (CKO)

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IT ROLES AND RESPONSIBILITIES

• Chief Information Officer (CIO) – oversees all uses of IT and ensures the strategic alignment of IT with business goals and objectives

• Broad CIO functions include:– Manager – ensuring the delivery of all IT projects, on

time and within budget– Leader – ensuring the strategic vision of IT is in line

with the strategic vision of the organization– Communicator – building and maintaining strong

executive relationships

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IT ROLES AND RESPONSIBILITIES

• Average CIO compensation by industry

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IT ROLES AND RESPONSIBILITIES

• What concerns CIOs the most

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IT ROLES AND RESPONSIBILITIES

• Chief Technology Officer (CTO) – responsible for ensuring the throughput, speed, accuracy, availability, and reliability of IT

• Chief Security Officer (CSO) – responsible for ensuring the security of IT systems

• Chief Privacy Officer (CPO) – responsible for ensuring the ethical and legal use of information

• Chief Knowledge Office (CKO) - responsible for collecting, maintaining, and distributing the organization’s knowledge

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IT ROLES AND RESPONSIBILITIES

• Skills pivotal for success in executive IT roles

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THE GAP BETWEEN BUSINESS PERSONNEL AND IT PERSONNEL

• Business personnel possess expertise in functional areas such as marketing, accounting, and sales

• IT personnel have the technological expertise

• This typically causes a communications gap between the business personnel and IT personnel

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Improving Communications

• Business personnel must seek to increase their understanding of IT

• IT personnel must seek to increase their understanding of the business

• It is the responsibility of the CIO to ensure effective communication between business personnel and IT personnel

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ORGANIZATIONAL FUNDAMENTALS – ETHICS AND SECURITY

• Ethics and security are two fundamental building blocks that organizations must base their businesses on to be successful

• In recent years, such events as the Enron and Martha Stewart, along with 9/11 have shed new light on the meaning of ethics and security

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ETHICS

• Ethics – the principles and standards that guide our behavior toward other people

• Privacy is a major ethical issue– Privacy – the right to be left alone when you

want to be, to have control over your own personal possessions, and not to be observed without your consent

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ETHICS

• Issues affected by technology advances

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ETHICS

• One of the main ingredients in trust is privacy

• Primary reasons privacy issues lost trust for ebusiness

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SECURITY - HOW MUCH WILL DOWNTIME COST YOUR BUSINESS?

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SECURITY - HOW MUCH WILL DOWNTIME COST YOUR BUSINESS?

• How Much Will Downtime Cost Your Business?

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Protecting Intellectual Assets

• Organizational information is intellectual capital - it must be protected

• Information security – the protection of information from accidental or intentional misuse by persons inside or outside an organization

• Ebusiness automatically creates tremendous information security risks for organizations

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Protecting Intellectual Assets

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Protecting Intellectual Assets

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OPENING CASE STUDY QUESTIONSApple – Merging Technology, Business, and

Entertainment

1. Predict what might have happened to Apple if its top executives had not supported investments in IT

2. Explain why it would be unethical for Apple to allow its customers to download free music from iTunes

3. Evaluate the effects on Apple’s business if it failed to secure its customer’s information and it was accidentally posted to an anonymous website

4. Explain why Apple should have a CIO, CTO, CPO, CSO, and CKO

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CHAPTER FIVE CASEExecutive Dilemmas in the Information Age

• The vast array of business initiatives from SCM to ERP make it clear the IT is a business strategy and is quickly becoming a survival issue

• This case explores several examples of executive IT issues resulting from IT

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CHAPTER FIVE CASE QUESTIONS

1. Explain why understanding technology, especially in the areas of security and ethics, is important for a CEO. How do CEO’s actions affect the organizational culture?

2. Identify why executives in nontechnological industries need to worry about technology and its potential business ramifications

3. Describe why continuously learning about technology allows an executive to better analyze threats and opportunities

4. Identify three things that a CTO, CPO, or CSO could do to prevent the above issues

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BUSINESS DRIVEN TECHNOLOGY

UNIT ONE CLOSING

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UNIT CLOSING CASE ONEMajor League Baseball – The Real

Competitive Advantages1. Using Porter’s Five Forces Model,

analyze MLBAM’s buyer power and supplier power. What could MLBAM do to increase customer loyalty?

2. Which of Porter’s three generic strategies is MLBAM following?

3. How can MLBAM use efficiency IT metrics and effectiveness IT metrics to improve its business?

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UNIT CLOSING CASE ONE Major League Baseball – The Real Competitive

Advantages

4. Predict what might happen to MLBAM if it failed to secure its subscriber information and all personal information – including credit card numbers – was accidentally posted to an anonymous website

5. How could MLBAM use a customer relationship management system to improve revenue growth?

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UNIT CLOSING CASE TWOBusiness 2.0: Bad Business Decisions

1. Explain why understanding information technology and management information systems can help you achieve business success – or more importantly, help you avoid business disasters – regardless of your major