lecture 8 notes

© 2004-05, David Gadish, Ph.D. 1

IS/IT Policy and StrategyIS/IT Policy and StrategyCIS 590CIS 590

Spring 2005Spring 2005

Week 8 LectureWeek 8 Lecture

Dr. David GadishDr. David Gadish


Week 7 Review

Management of Change (Ch-10) IT Governance (Ch-11)


Week 8 Agenda

IT Business Communications (Ch-12) Measuring, Reporting, and Controlling (Ch-13) Questions

4

Chapter 12IT Business CommunicationsManaging the Information Technology Resource


Chapter Outline

Importance of communication in achieving alignment

Importance of understanding of business by IT Why it is necessary for business partners to

understand IT Importance of communication in developing

partnership Methods used to improve communication


Importance of Communication

“Effective communications is the central lifeline of any organization. It is the vehicle for driving change, shaping expectations, and rallying workers around core purposes.”

-Charlene Marmer Solomon


Kotter’s Key Elements for Communicating Simplicity Metaphor, Analogy, and Example Multiple Forums Repetition Leadership by Example Explanation of Inconsistencies Give and Take


Financial Terms for IT Team Bearer Bonds

– Bond owners clip out coupon and present to bond issuer

Bond– Bond matures and issuer redeems face amount

Treasuries– U.S. Treasury borrows money in form of bills, notes,

bonds U.S. Savings Bonds

– Non-negotiable and purchases are limited Zero Coupon Bond

– No coupons and no interest paid


Web Services Terms for Business SOAP

– Provides way for applications to communicate with each other

UDDI– Web-based distributed directory that enables businesses

to list themselves on Internet Web Services

– Standardized way of integrating Web-based applications Web Services Description Language

– XML-formatted language that describes Web services capabilities

XML– Specification developed by World Wide Web Consortium

to tag data


Henderson’s Two Styles of Relationships Transactional Style

– Defined by rules, policies, and procedures

Partnership Style– Implies risk sharing, longer time frame for

exchanges, and need to establish range of mechanisms


Six Determinants of Partnership


The Road to Partnership

Education Joint Planning Measurement and Control Effective Use of Teams Multilevel Human Resource Strategy Technology


Global Culture

Hidden messages in communication Written communication may be viewed

positively or negatively Written communication maintains

supporting role Written communication

– Addresses ambiguity– Prevents misunderstandings– Identifies ownership and accountability


Addressing Communication Effectiveness Direct Communication Liaison Roles Temporary Task Forces Permanent Teams/Committees Integrating Roles Managerial Linking Roles


Sample Approaches

Direct Communications– Reflect differences in complexity,

requirements, and importance– Determine best vehicle and audience– Consider how to provide right level of

interaction


Sample Approaches

Liaison Roles– Surrogate facilitator in assisting business and

IT to join and work together– Get IT and business stakeholders together– Ensure each group participates for successful

development and deployment of business systems


Sample Approaches

Temporary Task Forces– Creates central focus for each participant– Helps to avoid daily distractions– Improves communication among task members– Share common goals and objectives


Sample Approaches

Permanent Teams or Committees– Effective means of providing stability– Steering committees provide mechanism for

making improved long-term decisions– Legitimate formal process exists– Decisions likely made in best interests of firm– Communication improved


Sample Approaches

Integrating Roles– Similar to providing cross-training to IT and

business personnel– Experience to know what other person needs to

do– Rotate IT and business people between two

areas to broaden perspective


Sample Approaches

Managerial Linking Roles– Used to facilitate multiple/difference priorities

and agendas– Use a matrix structure– Guidance provided by multiple supervisors– Means of communication improved– Used where IT and business are comfortable

with each other on partnership level


Tips and Techniques

Communication is important Learn from others’ trials and tribulations Shared domain knowledge is critical Training of administration managers in IT and

their inclusion in IT projects Things do go wrong and need to get back on track Implement formal communication programs may

be necessary


2 Types of Communication

Push communication– Occurs when information is disseminated to the

organization without being requested by receivers of information

Pull communication– Occurs when information is requested and

implies immediate availability of information


Personal Factors

Maintain clear and honest communication Trust Reputation Integrity


Best Methods to Improve Communications Knowledge sharing Introduce classes for IT and business staff to

attend jointly Group Decision Support System Jointly manage communication between business

and IT Use of liaison agents, task forces, cross-functional

project teams and direct communication Measurement and control


Priority in Improving IT Communication

Focus on where improvements can be made Strategic Alignment Maturity Assessment

Model Training Continually scan new technologies and

products Build partnerships through mutual

understanding

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Chapter 13Measuring, Reporting, and Controlling

Managing the Information Technology Resource


Chapter Outline Importance of measurement What and how to measure Quality and efficacy of measures Reporting to different audiences Controlling IT through effective SLAs Negotiating a service level agreement Making SLAs work – metrics Introducing internal SLA to firm SLA myths Who owns measurements and what/when to do them Can enterprise succeed with or without

measurements?


Why Is There IT?

Mostly profit, some cost, 24%

Mostly cost, some profit,

41%

Pure cost center, 25%

Pure profit, 10%


Productivity Study of IT and Business Executives

Then why don't we get

recognition for our contribution?,

97% Yes

Do productivity gains translate

into a more profitable

business?, 3% No

Source: InformationWeek research productivity study of 300 IT and business executives


Measuring IT

IT expenditure as percent of revenue IT expenditure per employee Revenue per IT dollar Total IT expense budget vs. actual Total IT capital budget vs. actual Employees supported per IT employee


Importance of Measurement

Business wants to know if IT is being run efficiently and effectively

Identify opportunities for improving effectiveness and efficiency

Effectiveness– Doing things right

Efficiency– Doing things the right way


Measuring IT – Samples

Overall – qualitative measures Overall – quantitative measures Network Data center


What and How to Measure

Need to measure– Business impact

– Customer relationships

– Internal organization impact

– Investment impact

– Value chain impact

Know how processes are changing between any measurements, and explain any changes in results

No ideal set of metrics


10-Step Approach to Developing Measurements1. Commitment of resources, time, and cooperation

from senior business and IT management

2. Have and review formal strategic plan, mission statements, and goals

3. Committees need to be established for each of 38 IT processes

4. Each committee meets and defines goals of each IT process as first objective

5. Identify critical success factors


10-Step Approach to Developing Measurements6. Establish guidelines to measure if, and to what

degree, critical success factors have been met7. Complete pilot should be done and members

jointly participate in the pilot8. Recommendation to install these measurements

should be raised to senior management for endorsement

9. Distribution and implementation of new measures

10. Analyze results and review with all partners


5 Stages of Benchmarking

Planning Analysis Integration Action Maturity

Source: Robert C. Camp and http://www.apqc.org


Benchmarks

Planning

– Identify what is to be benchmarked

– Identify comparative companies

– Determine data collection method and collect data

Analysis – Determine current

performance “gap”– Project future

performance levels


Benchmarks

Integration– Communicate

benchmark findings and gain acceptance

– Establish functional goals

Action– Develop action plans

– Implement specific actions and monitor progress

– Recalibrate benchmarks

Maturity– Leadership position attained

and practices fully integrated into process


Iterative Process for Benchmarking

Source: Dataquest, Gartner Group.


Quality of Measures

Often best when forecasting trends Can lead to misleading results Gain correct insight as to what

measurement indicates Good quality may be significant indicator

of good performance


Dimensions of Service Quality

Reliability– Consistency of performance and dependability

Responsiveness– Willingness/readiness of employees to provide service in

timely manner Competence

– Possession of required skills to perform service Access

– Approachability and ease of contact Courtesy

– Politeness, respect, consideration, friendliness


Dimensions of Service Quality Communications

– Keeping customers informed in language they understand

Credibility– Trustworthiness, believability, honesty

Security– Freedom from danger, risk, doubt

Understanding/Knowing the Customer– Making effort to understand customer’s needs

Tangibles– Physical evidence of service


Dimensions of Successful IT Functions Service quality System quality Information quality Use User satisfaction Individual impact Work group impact Organizational impact


Source: Anthony, R.N. Planning and Control Systems: A Framework for Analysis, Cambridge, MA: Harvard University Press (1965).


Variety in Reporting

Historical Data Statistical Data Assist managers in determining repairs Each has different characteristics


Characteristics of Effective SLAs

Based on current “user” expectation Defined by location, function, and service type Uses benchmarks and baselines for measuring

performance Specifies minimums, penalties, and incentives Specifies reports and tracking tools to be

monitored Agreement not too few, not too many Gets adjusted periodically to reflect changes


Negotiating a SLA

Get a Baseline Define Responsibility Allow for Modifications Ensure Reports Are in Terms Anyone Can

Understand Don’t Forget the End-User Experience


Examples of Service Level Metrics

Application availability Average application response time Number of application crashes per unit

of time Average throughout Network availability and bandwidth Server availability


Examples of Service Level Metrics

Elapse time to repair hardware failure Mean time between server failure Number of operating system failure per

unit of time Number of middleware failure per unit

of time Number of production jobs not

completed during batch night shift


Questions Concerning Who Owns Measurement

Who should own measurement? Is measure a process that should be owned by

the people doing the measurement? Is it a corporate asset or cost? Is this question similar to who should own

payroll? Should the owners of internal processes that

are being measured simply own it? Does it make a difference?


What to do with Measurements

Establish report card for performance Create effective and understandable

benchmarks Senior management needs to know current

status and effectiveness of IT


Performance Measures for Efficient Order Management Short order lead times In-stock availability Order accuracy Access to order status information Response time to customer inquiries


Performance Measures for Efficient Customer Management Lower inventory carrying cost Reduced human intervention Greater order accuracy Improved production planning/forecasting Lower order administration Lower number of complaints Improved customer decision making based on

preferences Increase number of automatic restocking customers Lower stock-out occurrences


When Measurements Should be Done

Continuously Daily Weekly Monthly Semiannually Annually


Can Enterprise Succeed Without Measurement? Only 42% of companies prepare business

case for CRM project Only 45% have centralized CRM

responsibility 57% can’t justify investments because they

don’t know how to measure customer profitability

Only 10% measure ROI


How Does Enterprise Benefit from Measurement? Performance is related to effectiveness,

efficiency, and quality To understand process it must be measured

and compared Part of monitoring project performance Determine if vendors are performing to

service level agreements


Next Week’s Agenda

IT Strategy (Ch-14) Student Presentations

lecture 8 notes

Documents

techniques communication

formal communication

business communications

business soap

business staff

business people

business partners

business stakeholders