The Ten Commandmentsof Information Technology

1. Remember, this is business.

2. Talk to the user

3. Understand your “customer’s” business.

4. Use the vendor’s knowledge.

5. Training is not a discretionary cost.

6. Develop an IT staff with a mix of business and technical skills.

7. Management issues are always more important than technology issues.

8. Make every contact with the user a public relations opportunity.

9. Spend time on strategy.

10. Have a good time.

IT Channels of DistributionDistribution Factor The Past The Future

Development by central IT Heavy Significant but smaller percent of total

Direct purchase of hardware / software by user Limited Major

Service source for individual user Limited to service from Can obtain powerful independent system

large, shared system

Service bureaus Sell time Sell products and time bundled together

Use of external databases via time-sharing Limited Major

Number of software and processing services A few; crude Many

Software development by users Limited Major (affiliated by packages and user-

friendly languages)

Reliance on external contract analysts / Very significant More significant; full outsourcing is a real

programmers alternative

Changes in Consumer Costs

Cost to the Consumer

Cost Factor The Past The Future

Hardware Very expensive Very expensive

Economies of scale Major in large systems; user Limited in large systems; user stand-alones

stand-alones not feasible very attractive

in most cases

Software systems development Expensive Less expensive in some cases

Software acquisitions Limited cost-effective outside Attractive cost-effective opportunities opportunities

Development and production Hard to estimate Hard to estimate

Maintenance Underestimated Soaring

The IT Product Line Focus

Factor The Past The Future

Product obsolescence Developing new products Heavy maintenance of old products to meet

challenges of obsolescence

Source Most products manufactured inside Significant percent sourced from outside

Dominant economic constraint Capital intensive (hardware; economy Personnel intensive (economy of skill(

of scale)

Product mix Many large, few medium, many Some large, many medium, thousands of small products small products

Profits / benefits Good return on investment Many projects have intangible benefits

New-product technologies New technologies New technologies and regroupings of old ones

Services Structured, such as automated Unstructured, such as executive decision accounting and inventory support systems and query systems control

The IT Consumer Focus

Factor Older Younger

Experience with established Experienced Inexperienced technologies

Attitude toward newer Leery Enthusiastic but unsophisticated (often they technologies do not recognize their lack of

sophistication

Visibility Identifiable as consumers Often unidentifiable as consumers; numerous

at all levels in organizations

Attitude toward IT unit Willing to accept IT staff as experts Many are hostile because they want to

develop their own solutions

Self-confidence Low confidence in their own abilities High confidence in their abilities and

(often cautious because of cost) judgment (may be unwarranted)

Turnover rate High High

Factors Influencing the Evolving IT Environment

Business Environment

Technology The Evolving IT Environment

Sociopolitical Environment

People

Phases of IT AssimilationPhase 1

Decision to invest and

project initiation

Stagnation

Block APhase 2

Technology learning

and adaptation

Failu

re Success

Stagnation

Block B

Narrowly focused and

not marketed

SuccessPhase 3

Rationalization and

management control

Stagnation

Block CPhase 4

Widespread technology

transfer

Too efficiency

dominated

Success

Balancing Hardware / Data DistributionPressure Toward Increasing the Hub Toward Increasing Distribution

Management Control More professional operation. User control.

Flexible backup. User responsiveness.

Efficient use of personnel. Simpler control.

Improvement in local reliability.

Technology Access to large-scale capacity. Efficiency of small scale.

Efficient use of capacity. Reduction of telecommunications costs.

Data Multiple access to common data. Easier access.

Assurance of data standards. Fit with field needs.

Security control. Data relevant to only one branch.

Professional services Availability of a specialized staff. Stability of work force.

Reduced turnover disruption. User career paths.

Organizational Fit Corporate style: centralized. Corporate style: decentralized.

Corporate style: functional Business need: transnationals

IT centralized from the beginning.

Architecture:A Plan For the Structure of IT Capabilities

Why Do We Need an IT Architecture?

• Facilitate decision making on specific technology acquisitions

• Ensure compatibility of IT and business strategy

• Improve likelihood of IT integration and interconnectivity

• Define a framework for control

• Influence user decision making concerning IT

Levels of an IT Architecture

Principles Beliefs about the way IT will be managed (e.g., a multi-vendor environment)

Models Verbal or graphic pictures of the IT structure (e.g., ITarchitecture)

Standards Preferences for particular vendors or industryprotocols

Components of an IT Architecture

Organization Structures and processes for the human supportof computing and communications

Applications Specific computer programs and how they arecreated and maintained

Tools Software packages that enable rapid developmentof applications

Information Information assets of the firm

Technical Hardware, systems software, and communicationsInfrastructure links

Managing IT in the 1990sA partnership among three constituencies

General

Management

IT

Management

User

Management

Sample IT Architecture

Applications

Information Analysis

(e.g. Lotus 123G)

Information Packaging and Delivery

(e.g. Commander EIS)

Communications

(e.g. E-Mail, Conferencing)

Knowledge-BasedSystems

(e.g. Expert System)

Application Development

(e.g. CASE)

Tools

Found-ation

Communications

Wide area networkLocal area network

Information ManagementClient Server architectureDB2 relational database

Data feeds from internal and external sources

Industrynews/IRI Dow Jones

Manufac-turing

Accounting Purchasing LogisticsSales

Executive Information

System

External Systems Internal Business Operations and Transaction Systems