MANAGEMENT INFORMATION SYSTEMS CHAPTER 13 LEADING THE INFORMATION SYSTEMS FUNCTION MANAGING THE IT ASSETS Technology Computer and communications infrastructure that enables information sharing over standard IT platforms Human Resources IT people talent with appropriate skills mix Business/IT Relationship Partnering relationships between business and IT managers, including joint decision-making Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall EVOLVING IS LEADERSHIP ROLE • Executive IS leadership role has evolved over time due to: – Rapid technological change – Opportunities for strategic IT applications and business intelligence – Increase in IT-savvy business managers – Ubiquitous IT usage Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall TOP IS EXECUTIVE ISSUES IN 2010 Business productivity and cost reduction Business agility and speed-to-market IT and business alignment IT reliability and efficiency Business process re-engineering Source: Survey of Society of Information Management members in mid-2010 Luftman and Ben-Zvi, MISQ Executive, Dec 2010 Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall IS ORGANIZATION RESPONSIBILITIES AND GOVERNANCE • IS GOVERNANCE - Locus of decision-making and accountability for: 1) computer and network operations 2) application software (development of new applications and maintenance of existing applications) Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall TWO PRIMARY IS RESPONSIBILITIES Computer & Network Operations Planning, purchasing, installing, operating, and maintaining/upgrading: - Computer hardware - Systems software on which applications software “runs” - Local area networks and wide area networks that support distributed computing and telecommunications for the enterprise Application Software Development & Maintenance - Acquiring (custom-developing, purchasing or “renting”) - Implementing - Maintaining/upgrading Application software for: - the entire enterprise - business units/departments - smaller work groups - individuals Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall IS GOVERNANCE ALTERNATIVES • Centralized Decision making and IS workers are concentrated within a central IS unit to take advantage of economies of scale and opportunities for integration of IS resources • Decentralized Decision making and IS workers are dispersed to be closer to business managers within highly autonomous business units and be responsive to their needs • Federal Combines both the centralized and decentralized designs to have the “best of both worlds.” The most typical Federal design is: – Centralized responsibilities for computer operations & networks – Decentralized responsibilities for applications software Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall IS GOVERNANCE ALTERNATIVES Fig 13.2 Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall IS GOVERNANCE ALTERNATIVES • Another type of Federal IS governance design: - Centralized for “Shared” resources (services & applications) - Decentralized for “Local” IS resources “Local” Applications Software applications specific to a business unit or function Shared Applications (Enterprise systems such as ERP, CRM) Shared IT Services Fig 13.1: Shared versus “Local” IS Resources Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall SHARED SERVICES IN A MULTINATIONAL FIRM Shared Services Organization for Asia Pacific region at British America Tobacco Source: Brown and Vessey, 2003 Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall MANAGING IT HUMAN RESOURCES – Highest percentage of a typical IS budget is for IS personnel – Five categories of IS personnel skills: - Technical - Project Management - Business Domain - Sourcing - IT Administration Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall CATEGORIES OF IT HUMAN RESOURCE SKILLS Fig 13.12 Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall CATEGORIES OF IT HUMAN RESOURCE SKILLS Fig 13.12 continued Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall MANAGING IT HUMAN RESOURCES – Attracting, recruiting, and retaining qualified staff is a key responsibility for IS managers in collaboration with an organization’s HR staff – Some common practices that managers use to retain valued IS personnel include: - Changing the work environment to be more employee-friendly - Increasing career development opportunities - Providing community-building initiatives - Establishing monetary or other employee incentives Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall COMMON PRACTICES FOR RETAINING IT WORKERS Fig 13.13 Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall INTERNAL AND EXTERNAL IT STAFFING • Insourcing and Outsourcing of IT skills Large firms in developed countries (e.g., U.S., Western Europe) today outsource some IS activities to countries with lower labor costs - What skills are most likely to be outsourced? - What skills are most likely to be retained in-house? Fig 13.14 Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall MANAGING THE BUSINESS/IT RELATIONSHIP Business/IT Relationship Partnering relationships between business and IT managers, including joint decision-making - Business managers must work with IS managers to realize investments in IT resources - A formal statement of the IS organization’s role may be helpful in strengthening a strained or failed IT-Business relationship - A strong relationship is characterized as a partnership Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall MANAGING THE BUSINESS/IT RELATIONSHIP • Horizontal (lateral) mechanisms can be used to help build and foster the business/IT partnership Fig 13.15 Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall EXAMPLES OF HORIZONTAL MECHANISMS Formal Groups • Common example: IS Steering Committee with responsibilities to: - Approve requests for new technology investments - Set priorities for application development and implementation - Monitor progress of IT projects against timelines and budgets - Share responsibility and ownership for achieving business value from IT investments Formal Roles • Some organizations have managers in integrator roles to help achieve a strong Business/IT relationship • An Account Manager is an integrator role that manages the relationship between the IS organization and a particular business unit Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall MEASURING OVERALL IS PERFORMANCE Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall IS MANAGEMENT IN GLOBAL ORGANIZATIONS • Many large corporations operate globally • Key management issue is extent to which IT is standardized • Key region and country factors that impact global IT management: - Country Telecommunications Infrastructure - Legal and Security Considerations - Language and Culture - Time Zone Differences Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall MANAGING IT OUTSOURCING • Potential 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 Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall MANAGING IT OUTSOURCING • Common Characteristics of IT Service Outsourcing - Cost savings from leveraging different labor markets - Long-term contracts, which are common for outsourcing computer & communications, can be very complex and require months of preparation prior to vendor selection and contract negotiation - Outsourced IT services typically difficult to bring back in-house Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall MANAGING OFFSHORE IT OUTSOURCING Offshore Outsourcing: Outsourcing to a location outside of the country where the client is located Near-shore: Offshore outsourcing to a geographic location that is close to the “shores” of the client (which can take advantage of overlapping time zones) Best-shore: This term refers to the fact that there are multiple options for firms with multiple geographic sites, as they may have options to choose among their own global locations and select the “best shore” for a particular IT activity based on labor markets (costs and expertise), time zones (overlapping versus those that take advantage of different time zones), etc Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall MANAGING OFFSHORE IT OUTSOURCING • Some key issues to consider for sourcing alternatives: - Support of business units that will be affected - Impact due to differences in business practices and norms of personnel with different national backgrounds Need for training programs due to national, cultural, language, and location differences Need for face-to-face communications and/or appropriateness of available collaboration tools for a specific IT activity - Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall [...]... communications across time zones for the organization Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall MANAGING IT APPLICATIONS • Legacy Systems - Maintenance of aging legacy systems can make up a large portion of IT budget - Integration of new technologies with legacy systems can be difficult and time-consuming - The trend is to replace custom-developed applications with purchased software... memory used (per unit of time) - Number of users of an application Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall CHARGEBACK SYSTEMS Potential Benefits Fig 13.4 Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall CHARGEBACK SYSTEMS • What makes a good Chargeback System? - Understandable - Prompt and regular feedback - Controllable - Accountable - Costs related to benefits... its trucks - Fewer truck breakdowns and fewer replacement parts required for the vehicles, which eliminates waste Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall CHARGEBACK SYSTEMS • Chargeback systems place control of IS spending with business managers and enables them to better understand their true IT costs • Examples of IT resources that can be part of chargeback costs: - IS personnel... company must know: - What software it owns - Where it is located - What it does - How effective it is - What risks are associated with the continued use – Systems project decisions take into account existing software as well as projects for new systems already underway Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall METRICS FOR IT APPLICATIONS – Performance metrics for projects... A sign-off page for the appropriate business client and the IS liaison preparing the SLA document Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall IT SERVICE MANAGEMENT with ITIL • Information Technology Infrastructure Library (ITIL) - Processes that focus on the business aspect of IT service delivery created by the British Office of Government Commerce - Describes how various IT.. .MANAGING IT SERVICE DELIVERY Technology Tradeoff Decisions - Equipment Location - Client/Server Allocations - Operating System Standards - Network Redundancy - Bandwidth Capacity - Network Response Time... IT service as well as procedures to follow when these expectations are not met • Should include: - 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... benefits in the form of: - Repeatable processes - Established change management procedures - Post-project reviews - Skilled project leaders Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall MANAGING IT HUMAN RESOURCES – Highest percentage of a typical IS budget is for IS personnel – Five categories of IS personnel skills: - Technical - Project Management - Business Domain - Sourcing - IT... 13.12 Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall CATEGORIES OF IT HUMAN RESOURCE SKILLS Fig 13.12 continued Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall MANAGING IT HUMAN RESOURCES – Attracting, recruiting, and retaining qualified staff is a key responsibility for IS managers in collaboration with an organization’s HR staff – Some common practices that