Mti Leading

MANAGEMENT INFORMATION TECHNOLOGY

LEADING THE INFORMATION SYSTEMS FUNCTION

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

Leading the IS Function

Managing the Technology Asset consists of two major tasks Managing IT Service Delivery Managing IT Applications

Evolving IS Role

Rapid technological change Exploding applications and data Growth in business management understanding of

technology Frequent external shocks

Evolving IS Role

Important decisions for IS managers on how to structure and govern the IS function

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


Hybrid


Centralized Governance Design Common for computer operations Can create cost efficiencies May provide greater integration of applications

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


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


Hybrid Governance Designs

IT Operations

Business Unit IT

Applications

Business Unit IT

Applications

Business Unit IT

Applications

Federal Design Customized Design

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

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


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


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


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


Characteristics of Good Chargeback Systems

Understandable Prompt and regular feedback Controllable Accountable Relate to benefits Consistent with IS and organizational goals


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)


ITIL Information Technology Infrastructure Library Created by the British Office of Government Commerce Processes that focus on the business aspect of 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

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


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


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


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

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


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


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


Top-Paying IT Professional Skills (2006)


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


Insourcing and Outsourcing of IT skills What skills should be outsourced? What skills should be retained in-house?


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


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)

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


Horizontal Mechanisms Four types of mechanisms that help to build the 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


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


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


Balanced Scorecard

Traditional performance

measures

Broader performance

measures

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

Challenge: Country Telecommunications Infrastructure Reliable telecommunication service is crucial for

organizations to communicate in multiple locations Countries vary greatly in their telecommunications

infrastructure


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


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


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 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

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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