Ch15 Final

7/30/2019 Ch15 Final

1/44

E. Wainright Martin

Carol V. Brown

Daniel W. DeHayesJeffrey A. Hoffer William C. Perkins

MANAGINGINFORMATION

TECHNOLOGYFIFTH EDITION

CHAPTER 15

MANAGING THE INFORMATIONSYSTEMS FUNCTION

7/30/2019 Ch15 Final

2/44

2005 Pearson Prentice-Hall Chapter 15 - 2

Rapid technological change

Exploding applications and data

Growth in business managementunderstanding of technology

Frequent external shocks

THE CHALLENGES FACINGISLEADERSHIP

Page 582-583

7/30/2019 Ch15 Final

3/44


IS leadership must manage these

organizational assets:

Human resources Organizational data

Physical infrastructure

Applications portfolio

MANAGING THEASSETS INAN

ISO

RGANIZATON

Page 583-584

7/30/2019 Ch15 Final

4/44


Provide specialized IT

training for ISprofessionals and others

MANAGING THEASSETS INAN

ISO

RGANIZATON

Page 584

Developing Human Resources

7/30/2019 Ch15 Final

5/44


MANAGING THEASSETS INAN ISORGANIZATON

Page 584-585Figure 15.1 Selected IS ManagementPositions (1 of 3)

Possible IS Management Positions

7/30/2019 Ch15 Final

6/44





7/30/2019 Ch15 Final

7/44





7/30/2019 Ch15 Final

8/44


Develop policies and

procedures to managean IT systems physical

assets computer

hardware and networks


Page 584

Improving the Physical Infrastructure

7/30/2019 Ch15 Final

9/44


Infrastructure management issues addressed

in policy statements:1. Location

2. The workstation

3. Supported operating systems

4. Redundancy

5. Supported communications protocols


Page 586-588


7/30/2019 Ch15 Final

10/44


Infrastructure management issues addressed

in policy statements (cont.):6. Bandwidth

7. Response time on the network

8. Security versus ease of access

9. Breadth of network access

10.Access to external data services



Page 586-588

7/30/2019 Ch15 Final

11/44


Most companies cannot operate without

software applications they are critical assets

Just as physical infrastructure, software

portfolio needs managed as an asset


Managing the Applications Portfolio

Page 588

7/30/2019 Ch15 Final

12/44


A company must know:

What software it owns Where it is located

What it does

How effective it is

What condition it is in



Page 588

7/30/2019 Ch15 Final

13/44


Policies and guidelines must exist for the

development and maintenanceof ISapplications

Maintenance should be treated as an activity

necessary to preserve an assets value



Page 588

7/30/2019 Ch15 Final

14/44


Application portfolio policies must address:

1. Assumed user2. Application location

3. Process-driven or data-driven design

4. Evaluation criteria for new applications systems



Page 588-590

7/30/2019 Ch15 Final

15/44


Process-Driven Design

Collects, manipulates,and stores only data

needed to operate a

particular process

Most often used in thepast

Data-Driven Design

Concentrates on alldata needed and

collects into database

Each application

accesses commondatabase for needed

information


Page 589-590


7/30/2019 Ch15 Final

16/44


Ten key issues:

1. Developing effective change management system (Chapter 12)

2. Ethical use of IT (Chapter 16)

3. Agreeing upon the role of the IS organization

4. Selecting effective IS leadership

5. Creating an active partnership with business managers

6. Determining an outsourcing strategy

7. Designing an equitable financing system

8. Deploying global information systems

9. Designing an appropriate IS organization and governance

system

10. Ensuring regular performance measurement

INFORMATION TECHNOLOGYMANAGEMENT SYSTEM ISSUES

Page 590-591

7/30/2019 Ch15 Final

17/44


IS organization:

Role is continually changing

Needs a mission statement

Must be future-oriented while fulfilling todays

requirements Must be aligned closely with business activities

1. Agreeing Upon the Role of the IS Organization

Page 588-590


7/30/2019 Ch15 Final

18/44


IS organization is expected to: Demonstrate business understanding and maintain close

communication with business managers

Respond quickly to changing business needs

Help reengineer business processes to be more customer responsive

Ensure business can participate in e-commerce

Keep final customer in mind

Build systems that provide direct customer benefit Help business managers make better decisions with information

Use IT for competitive advantage

Help business integrate IT



Page 591

7/30/2019 Ch15 Final

19/44


IS organization is alsoexpected to: Be steward of organizations IT resources

Deploy IT resources throughout the organization

Facilitate productive use of resources

Lead development of information vision and IT architecture

Communicate vision and architecture

Maintain managerial control over important information resources

Administer corporate data Make current and new IT available at lowest possible cost

Help business managers know and use technology

Develop partnership with business managers to exploit technology


Page 592


7/30/2019 Ch15 Final

20/44


Chief Information Officer (CIO):

A member of executive management team

Needs mix of business and technical knowledge Guides and unifies entire organizations IT resources

Masters understanding of business, products, vendors, sales

channels, customers, and competition

Recognize IT advantages and where to apply Hires good people and delegates

Works with executive management team to achieve

competitive advantage

2. Selecting Effective IS Leadership

Page 593-594


7/30/2019 Ch15 Final

21/44


Senior IS Management Issues: Improving data and IT planning, especially linking IS to the business

Gaining business value through IT Facilitating organizational learning about and through IT

Refining the IS units role and position

Guiding systems development by business managers

Managing organizational data as an asset

Measuring IS effectiveness

Integrating information technologies

Developing systems personnel

2. Selecting Effective IS Leadership

Page 594-595


7/30/2019 Ch15 Final

22/44


3. Creating an Active Partnership with Business Managers

Page 595


Partnershipa critical strategy based on sustaining a

long-term relationship between IS and businessmanagement

7/30/2019 Ch15 Final

23/44


IS steering committee or advisory board used to: Ensure frequent interaction

Set priorities

Check progress

Allocate scarce resources

Communicate concerns

Provide education

Develop shared responsibility

3. Creating an Active Partnership with Business Managers

Page 595


7/30/2019 Ch15 Final

24/44


4. Determining an Outsourcing Strategy

Page 595


Outsourcing hired outside services to perform some of a

companys IS operations

Application service providers (ASPs) provide total

systems to organizations, ranging from competitive

intelligence systems to broad ERP applications

7/30/2019 Ch15 Final

25/44


Outsourcing: Allows an organization to pay only for what it uses

Trend might relate to the position of the CIO

Popular, largely due to: Fast pace of technological change

Dissatisfaction and costs related to past in-house services

Must be both a remedy for service failures or costs and

a strategic choice Should not be used for strategic information systems

with security or privacy issues

Page 596-597


7/30/2019 Ch15 Final

26/44


Key factors in selecting an outsourcing vendor:

Vendor reputation

Quality of service

Flexible pricing

Page 596-597


7/30/2019 Ch15 Final

27/44


5. Designing an Equitable Financing System

Page 598


Typical measures used to track IT costs:

Total IT budget as percentage of total organization

revenues or income

Total IT budget as percentage of total organization

budget

IS personnel costs as percentage of total organization

professional personnel salaries and wages

Ratio of hardware and software costs to IS personnel

costs

Costs for IT hardware and software per managerial or

knowledge worker

7/30/2019 Ch15 Final

28/44



Page 598


Why is it hard to measure IT costs?

Some IT costs are hidden No relationship to benefits included in

these measures

Benefits may happen after development

costs occur

7/30/2019 Ch15 Final

29/44

2005 Pearson Prentice-Hall Chapter 15 - 29 Page 598


Measuring Benefits

No simple way to measure valueadded benefits of IT

Can track IS performance measures

over time

7/30/2019 Ch15 Final

30/44



Controlling IS Costs

Use IS organizations budget Divide costs:

Personnel

Equipment and software

Outside services

Overhead

7/30/2019 Ch15 Final

31/44



Chargeback Systems

IS chargeback process places control of IS spending

with business managers, and is used to better understand

true costs

7/30/2019 Ch15 Final

32/44



Page 598


Why use a chargeback system?

Assign costs to those who consume Control wasteful use of IT resources

Overcome belief that IT costs unnecessarily high

Provide incentives using subsidy

Change IS to be more business driven

Encourage managers to be knowledgeable

consumers

7/30/2019 Ch15 Final

33/44



Page 598


Successful chargeback systems must be:

Understandable Timely

Controllable

Accountable

Clearly linked to benefits

Consistent with IS and organizational goals

7/30/2019 Ch15 Final

34/44


6. Deploying Global Information Systems

Page 600-601


Region and country issues influencing

global IT management:1. Country telecommunications infrastructures

2. Legal and security considerations

3. Language and culture

4. Time zone differences

7/30/2019 Ch15 Final

35/44



Page 602


Key trends of global outsourcing:

Offshore development centers permanent offshorepresence

Near-shore sourcing outsourcing to countries close to

home and overlapping time zones

Multisourcing relying on multiple service providers ina number of companies, based on price and skills

7/30/2019 Ch15 Final

36/44



Page 603


Global team manager traits:

Multiculturalist E-facilitator

Recognition promoter

Internationalist

Traveler

7/30/2019 Ch15 Final

37/44


7. Designing an Appropriate IS Organization

and Governance System

Page 603-604


Figure 15.8 Classic IS OrganizationStructure

7/30/2019 Ch15 Final

38/44




Page 604


Types of IS Organizational Design:

Centralized IS applications and resources housed,managed, and controlled centrally

Decentralized business units have complete control of

their own IS resources

Federal attempt to achieve benefits of both centralizedand decentralized

Customized mixed design in large enterprises where

each division determines best design for that division

7/30/2019 Ch15 Final

39/44

2005 Pearson Prentice-Hall Chapter 15 - 39 Page 605Figure 15.9 Common Designs forthe IS Organization

Centralized Decentralized Federal Customized

7/30/2019 Ch15 Final

40/44




Page 605


Organization design depends on:

How rest of business is organized

Type of customer markets, products, and

geographical spread

Role of IT within the organization

Reporting level of most senior IS leader

Types of technologies managed by IS organization

7/30/2019 Ch15 Final

41/44

2005 Pearson Prentice-Hall Chapter 15 - 41 Page 606Figure 15.10 Four Types of ISGovernance Mechanisms

7/30/2019 Ch15 Final

42/44


8. Ensuring Regular Performance Measurement

Page 606


Necessary for internal customers to regularly

evaluate IS organization Need to show if promised cost savings are

realized

Required: Agreement on measurable criteria

Metrics to judge work quality

7/30/2019 Ch15 Final

43/44



Page 607


IS Evaluation Criteria Meeting business objectives

Responding rapidly and economically to new needs Expanding business or services

Developing an architecture and plan

Operating reliable and efficient technology resources

Focusing on the customer

Providing quality IS staff Reducing size of backlog

Satisfying users

Adopting new technologies

Figure 15.11 IS Evaluation Criteria

7/30/2019 Ch15 Final

44/44



Other measures to evaluate IS performance:

Service level agreements with internal business units

can be used to evaluate IS performance

Annual surveys for each major system

User satisfaction surveys

Ch15 Final

Documents

Transcript of Ch15 Final