Organization for EUC

Practices for managing an architecture in which programmers do not report to IS

Business Within a Business

Most firms manage IT as a business within the business, with IT having its own

career pathsjob descriptionspersonality profiles

Aligning IT with the Business

TechnologyExcellence(Systems)

Business Profitability(Applications)

IT

User

Organization Structures

ContractorFormal agreements for services

UtilityReliable information in standard form

VendorIS recommends solutions for business problems

PartnerIS and Line share responsibilities for success

Organizational Structures

Technology Need

Non technology need

Contractor

Utility

VendorPartner

Contractor

The traditional organization for IS units in the mainframe era.

Service level agreementsNegotiated servicesFormal separation between users

and technical personnel

Contractor

IT BusinessUsers

Negotiation

Contractor

Example: outsourcing.While this model describes the internal structure for many firms, it is the model for any functions that are outsourced. (See: Clermont, ‘Outsourcing without guilt’, MoIS, #5.4).

UtilityHopper, HBR, 1990

IS provides common interface among business units. Common structure in client/server architectures.

Is responsible for standard data or software; users responsible for business use.

IS monopolyBusiness units are the innovators

Utility

Support

IT BusinessUser

Utility

Example: cost centers.IS units set up as standard interfaces among relatively independent business units.

VendorQuinn & Paquette, Sloan MR, 1990

IS competes with outside services for resources. Acts as internal consultants.

IS responsible for understanding business tactics

User accepts IS proposals

Vendor

BusinessUser

IT

Sell

Vendor

Example: profit centers. Organizations that emulate consulting firms and set up their IS organization as a separate profit center do this. IS competes for funding dollars against outside organizations. (See: Allen, Make IS pay its way, MoIS #5.7)

PartnerHenderson, Sloan MR, 1990

IS tightly integrated with business strategy. Most common in high tech businesses.

Users and IT consult on both technology and business solutions

Shared rewards for business success or failure.

Partner

Business User

IT

Share

Partner

Example: distributed resources. Many companies have distributed IT personnel into business units so that the IT function would report directly to the business unit manager.

Relationship Choice

ContractUtilityVendorPartnerThe appropriate relationship depends on

the business strategy of the company, the maturity of the organization and the experience with IT

Business Strategy

Type A: seeks to obtain business advantage from the use of technology

Type B: uses technology for business advantage, although possibly not IT, and is comfortable paying for quality

Type C: seeks to compete on a commodity or cost containment basis

Four Stages of EDP GrowthGibson & Nolan, Managing the four stages of EDP growth, HBR, 1974

1. Initiation: new concept, exploring ways to use the technology. No control.

2. Expansion: some applications found, need to get people on board.

3. Formalization: costs become and issue. Effective controls developed.

4. Maturity: technology well integrated and managed.

Managerial Tactics

Laissez FaireMonopolistAccelerationMarketingOperations

Alavi, Nelson, Weiss, JMIS,

Organization: Centralization, Decentralization or Distribution

Centralization Consolidation of functions Career paths for IS professionals Information control Economies of scale

Organization: Centralization, Decentralization or Distribution

Decentralization Closeness to local problems Responsiveness to operational

requirements User ownership of costs and problems

Organization: Centralization, Decentralization or Distribution

Distribution Separation of IS and user functions Identification of corporate data and

functions User ownership of user applications

People

IT Motivational ProfileRecruiting and RetentionTeams and Projects

Rational Retention Strategies

Recruit and RetainRecruit and ReplaceOutsourceEntrepreneur SupportControl and LimitRaid for experience

Reorganization Trends

Outsourcing Purchased systems Core competencies

Reengineering Downsizing and flattening Global competition Reduced margins

TQM

Critical Success FactorsBoynton & Zmud, An assessment of critical success factors, HBR, 1984

Those few things that must go well to ensure success

Require continued monitoringMeasurableCover business requirements

IT Business