Organizing and Leadingthe ICT-function

Responsibilities

Project managementDirection CommitteeSteering CommitteeProject GroupWorking Groups

Management of the IT-department Centralized organizationDecentralization

The Direction Committee

The responsibility of the management :

The strategic plan

Set up a steering committee

Provide facilities

The Steering committee

Responsibilities of the steering committee:

Define Basic Options programming environment tools hardware

Priorities Budget Formal acceptance

- group of representative top level managers

- meet a few times a year

Created by the steering committee for the lifetime of the project

Middle-managers and IT-people meeting frequently

Directed by a Project Leader

Responsibilities :

Project group

daily system follow-up budget follow-up create ad-hoc working groups if needed report to steering committee

Project meeting reports are crucial

Working groups

Ad-hoc working groups created to solve a specific problem or to make a

specific reportdisappear after completion of the job

Permanent working groupscooperate in all projectsvery specialized ( security, ergonomic, ... )

Central IT - department

IT-MGR

Finances

FunctionAnalysis

Technical units

Security

Help deskTraining

secretariat

Operations

Qualityassurance

department-1 Software devel. Operators

department-2 DBA job-preparation

.

. telecom librarian

.

department-n. operating system Production ctrl.

Implications of too much Dominance

IT Dominance Too much emphasis on DB and

system maintenance New systems must fit old data

structures Service requests require system

study and benefit analysis Standardization dominates IT designs/constructs everything Little user control on development IT specializing in technical aspects,

not in user business IT spends 80% on maintenance IT thinks they control everything Users express unhappiness General management not involved

but concerned Development portfolio under IT

control

User Dominance Too much focus on problem IT feels out of control Explosive growth of numbers of

systems and related staff Multiple, often changing suppliers Lack of standardization and control

over data and systems Hard evidence of benefits nonexistent Soft evidence not organized Technical advise of IT not sought or

considered irrelevant Buying services from outside Networks not designed for corporate

needs Little technology transfer Growth in duplication of technical staff Rising communication cost because of

duplication Duplication of effort and input

Pressure towards user dominance Pent-up user demand

large backlog (3-5 years) due to sustained maintenancefirst created by conversion to data - program separationstaffing problems due to high turnoveruser-developed systems speed up the process of obtaining the needed

servicedecentralized IT helps educate users, reduces communication problemsrotation between IT and non-IT jobs possibledecentralization facilitates user interface with network

Competitive and service growth in IT market specific applications marketed to end-user managersstand-alone local hardware platforms seem attractive to usersseen as operationally simple ( no airco , one operator,...)no cumbersome project proposal to be written and defendedprojects developed under user control

Pressure towards user dominance User control

regaining control over operations is very important for users development

• control over system development priorities

• own staff or self selected software houses

• mistakes made by local group are more easily accepted

• successes are topics of conversation maintenance

• users get control over maintenance priorities

• assumption is that maintenance will not be a problem operations

• not dependent on corporate computer scheduling Fit with organization

Benefits can lead to less data hygiene and less regard for control

Pressures toward IT control

Staff professionalism• specialized personnel supporting small divisions• graying of IT , reason for outsourcing : easier with central IT• developing and enforcing standards of IT management • documentation, project management skills• decentralization may drop professionalism

Feasibility study concerns• users can hardly estimate growing processing requirements• user feasibility study focus on first application• more susceptible to acquire products from unstable vendors• not enough concern to export developments to other depts

Pressures toward IT control

Corporate Database System• ability to manage and control data flows• data integrity and consistency• abstraction of data• ensure appropriate security

Fit with corporate structure and strategy• centralized IT development’s role clearest in organizations with a

centralized planning and operational control• decentralized structure increases cost of central IT• centralized development groups have an explicit marketing activity

( especially for multinationals ) Cost analysis

• takes into account the interest of the whole company• software costs 75-85% of total cost for a customized system• decentralization avoids un-understandable bills but saving are false

Coordination and location of IT policy

IT responsibilities

procedures for comparison of own development and outsourcing • develop standards for project control and documentation• define a process for forcing adherence to these standards

inventory of installed or planned information servicesdevelop standards that establish:

• mandatory communication standards• standard programming environments for used platforms• corporate data dictionary• auditing procedures for locally developed systems

identify and provide IT development staff career pathsestablish marketing efforts for IT supportprepare checklist with questions concerning HW/SW acquisitionidentify and maintain relationships with preferred system suppliersEducation programs for potential usersestablish ongoing review of systems to avoid obsolete systems

Coordination and location of IT policy

User responsibilities

To assist in orderly implementation of new IT services, and understand their use, cost and impact

understand the scope of all supporting IT activities, including charge-out

realistically appraise personnel investment for development and operation

ensure comprehensive user input for for all IT projects

• nature of service, process of introduction, training create realistic IT-user interface , consistent with strategic relevance

periodical audit of the adequacy of:

• system reliability standards

• performance of communication services

• security procedures

participate in the development and maintenance of an IT plan

Coordination and location of IT policy

General management support

Because of the need to link IT to business separation of:IT operations ( e.g. reporting to head of administration ) IT planning (e.g. IT policy group reporting to head of research)• ensure balance between IT and user inputs via eventual personnel and

organizational transfers and via a steering committee

• develop comprehensive corporate IT strategy

• manage inventory of hardware and software resources , including standard policy with vendors

• facilitate development and evolution of standards for operations and development , and make sure that they are applied

• facilitate transfer of technology between units

• encourage technical experimentation

• develop an appropriate planning and control system to link IT firmly to the company goals

ICT Management Process

Results control architecture 1. Unallocated cost center

stimulates user requests and experimentation

easy for IT to sell services

risk of irresponsible user requests for services

no competitive pressure on IT

keep free of charge but inform users about cost

Results control architecture2. Allocated cost center and charge-out

Stimulates honestety in user requests in later phases Allocation problems

charges compared with outside offerings : misleading nothing achieved by 100% charge-out ( create barrier) unpredictable , unstable charges for users ( machine load ) very complex systems

Desirable characteristics understood by users ( better on output than on real usage) perceived as fair

IT maintenance and development charges estimate costs by IT department procedure for reestimating time and material basis

Results control architecture3. Profit Center

Puts inside service at same footing of an outside one

Pressure on IT for cost efficiency IT must market itself Excess capacity encourages sales of services to outside

companies those sales are unprofitable exited by hard outside dollars

because of shared files, user have not always the option of going outside ( not subject to normal market forces)

leads to higher users costs because of profit figure

Results control architecture4. Transfer Pricing

IT operations priced in end-user transaction terms IT development and maintenance as fixed-price contract

Cost-based price lowest cost from user’s perspective complex , difficult to understand charges

Market-based price difficult to find comparable products

Dual Transfer Price allows IT and user to be motivated users are charged items at direct or full cost IT is allocated revenue based on standard cost of services. IT

revenues via selling more services or better cost efficiencies difference posted to an overhead expense account

Negotiated price difficult in IT because of non-equal partners

Financial reporting process

Budget process

must involve senior mgt , IT mgt , user groups output includes:

establish planned service levels cost of central operations amount of internal development and maintenance support external services

derived from review of : existing services approved application development portfolio user desire for new services

need for appropriate control on purchased IT services dialog helps generate a user understanding of IT goals

Non-financial reporting process

preparation of six-month surveys identify problems provide a benchmark to measure progress to show concern of IT for about user perception of service

Staff reports turnover trends sensitivity of leadership salary levels workplace climate

Other reports trends in network uptime ability to meet schedules on batch jobs average response times