R. Ching, Ph.D. MIS Area California State University, Sacramento 1 Week 5 Monday, February 20...
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R. Ching, Ph.D. • MIS Area • California State University, Sacramento 1
Week 5Week 5Monday, February 20Monday, February 20
• Networked OrganizationsNetworked Organizations• IT Infrastructure and OperationsIT Infrastructure and Operations
• Strategic AlignmentStrategic Alignment• IT AdoptionIT Adoption
R. Ching, Ph.D. • MIS Area • California State University, Sacramento 2
Leveraging IT Leveraging IT
BusinessBusiness ITIT
StrategyStrategy StrategyStrategy
CapabilitiesCapabilities CapabilitiesCapabilities
AlignmentAlignment
AlignmentAlignmentIT infrastructureIT infrastructure
Process ReengineeringProcess Reengineering(Control, enhancing, leveraging)(Control, enhancing, leveraging)
Business networksBusiness networks(Competitive Advantage)(Competitive Advantage)
ValueValue
VisionVision
R. Ching, Ph.D. • MIS Area • California State University, Sacramento 3
Management Challenge IssuesManagement Challenge Issues
• IT infrastructure as a strategic resourceIT infrastructure as a strategic resource– Types of infrastructuresTypes of infrastructures
• Independent - without regard to strategiesIndependent - without regard to strategies• Reactive - development in reaction to a Reactive - development in reaction to a
particular thrustparticular thrust• Interdependent - coalignment with the strategic Interdependent - coalignment with the strategic
contextcontext– Modifications to the IT infrastructure signal Modifications to the IT infrastructure signal
implications for possible changes and implications for possible changes and improvements in strategy, while improvements in strategy, while modifications to strategic thrusts trigger modifications to strategic thrusts trigger appropriate changes in the IT infrastructureappropriate changes in the IT infrastructure
R. Ching, Ph.D. • MIS Area • California State University, Sacramento 4
Move to Networked OrganizationsMove to Networked Organizations
IT-Enabled NetworksIT-Enabled NetworksIT-Enabled NetworksIT-Enabled Networks
Need to Effectively Manage Need to Effectively Manage Organizational InterdependenceOrganizational Interdependence
Need to Effectively Manage Need to Effectively Manage Organizational InterdependenceOrganizational Interdependence
Need to Increase Organizational Need to Increase Organizational PerformancePerformance
Need to Increase Organizational Need to Increase Organizational PerformancePerformance
Competitive Business Competitive Business EnvironmentEnvironment
Competitive Business Competitive Business EnvironmentEnvironment
R. Ching, Ph.D. • MIS Area • California State University, Sacramento 5
Move to Networked OrganizationsMove to Networked Organizations
IT-Enabled NetworksIT-Enabled Networks
Need to Effectively Manage Organizational Interdependence
Need to Effectively Manage Organizational Interdependence
Need to Increase Organizational Performance
Need to Increase Organizational Performance
Competitive Business Competitive Business EnvironmentEnvironment
Competitive Business Competitive Business EnvironmentEnvironment
• Global marketplaceGlobal marketplace• New and powerful New and powerful
strategies of strategies of globalizationglobalization
• Advances and Advances and diffusion of IT into diffusion of IT into businessesbusinesses
R. Ching, Ph.D. • MIS Area • California State University, Sacramento 6
Move to Networked OrganizationsMove to Networked Organizations
IT-Enabled NetworksIT-Enabled Networks
Need to Effectively Manage Organizational Interdependence
Need to Effectively Manage Organizational Interdependence
Need to Increase Organizational Need to Increase Organizational PerformancePerformance
Need to Increase Organizational Need to Increase Organizational PerformancePerformance
Competitive Business Environment
Competitive Business Environment
• Compressed time to Compressed time to marketmarket
• Organizational Organizational service to the service to the customercustomer
• Product and process Product and process qualityquality
• Managing risk: Managing risk: obsolesce, obsolesce, inadequacy, inadequacy, misunderstandingmisunderstanding
• Managing costsManaging costs• Partnerships with Partnerships with
other organizationsother organizations
R. Ching, Ph.D. • MIS Area • California State University, Sacramento 7
Move to Networked OrganizationsMove to Networked Organizations
IT-Enabled NetworksIT-Enabled Networks
Need to Effectively Manage Need to Effectively Manage Organizational InterdependenceOrganizational Interdependence
Need to Effectively Manage Need to Effectively Manage Organizational InterdependenceOrganizational Interdependence
Need to Increase Organizational Performance
Need to Increase Organizational Performance
Competitive Business Environment
Competitive Business Environment
• Improve Improve coordination and coordination and cooperationcooperation
• Shared decision Shared decision makingmaking
• Moving from Moving from silossilos to to enterpriseenterprise
R. Ching, Ph.D. • MIS Area • California State University, Sacramento 8
Move to Networked OrganizationsMove to Networked Organizations
IT-Enabled NetworksIT-Enabled NetworksIT-Enabled NetworksIT-Enabled Networks
Need to Effectively Manage Organizational Interdependence
Need to Effectively Manage Organizational Interdependence
Need to Increase Organizational Performance
Need to Increase Organizational Performance
Competitive Business Environment
Competitive Business Environment
• Integration to Integration to coordinate across coordinate across functional functional boundaries, yet boundaries, yet along organizational along organizational structurestructure
• Management’s Management’s reach to all levels of reach to all levels of the organizationthe organization
• Exchange of Exchange of informationinformation
R. Ching, Ph.D. • MIS Area • California State University, Sacramento 9
Leveraging IT Leveraging IT
BusinessBusiness ITIT
StrategyStrategy StrategyStrategy
CapabilitiesCapabilities CapabilitiesCapabilities
AlignmentAlignment
AlignmentAlignmentIT infrastructureIT infrastructure
Process ReengineeringProcess Reengineering(Control, enhancing, leveraging)(Control, enhancing, leveraging)
Business networksBusiness networks(Competitive Advantage)(Competitive Advantage)
ValueValue
VisionVision
R. Ching, Ph.D. • MIS Area • California State University, Sacramento 10
Business Opportunities and Market Business Opportunities and Market PotentialsPotentials
• By 2008, half of the US population (approx. 250 By 2008, half of the US population (approx. 250 million) will purchase its goods and services online million) will purchase its goods and services online through the Internet (vs. 30 percent in 2004)through the Internet (vs. 30 percent in 2004)
• Estimated spending per buyer will average $780 Estimated spending per buyer will average $780 (vs. $585 in 2004)(vs. $585 in 2004)
• Translates to $117 billion in retail salesTranslates to $117 billion in retail sales• B2C e-business poses several new challengesB2C e-business poses several new challenges
– Trend toward selling micro-segmented, tailored Trend toward selling micro-segmented, tailored products and servicesproducts and services
– Requires businesses to establish and build closer Requires businesses to establish and build closer learning relationships with their customers learning relationships with their customers
R. Ching, Ph.D. • MIS Area • California State University, Sacramento 11
InvestmentsInvestments
For example…For example…• Worldwide investments in CRM technology Worldwide investments in CRM technology
(software and technology services) in 2002 (software and technology services) in 2002 estimated at USD$2.3 billion estimated at USD$2.3 billion – Investments were predicted to quadruple to Investments were predicted to quadruple to
$10.8 billion in 2004$10.8 billion in 2004
R. Ching, Ph.D. • MIS Area • California State University, Sacramento 12
Emerging IT Strategic RoleEmerging IT Strategic Role
IT offers the capability to redefine the boundaries of IT offers the capability to redefine the boundaries of markets and structural characteristics, alter the markets and structural characteristics, alter the fundamental rules and basis of competition, define fundamental rules and basis of competition, define business scope, and provide a new set of business scope, and provide a new set of competitive weapons.competitive weapons.
N. Venkatraman, 1991N. Venkatraman, 1991(from Corporations of the 1990s)(from Corporations of the 1990s)
R. Ching, Ph.D. • MIS Area • California State University, Sacramento 13
New technologies open new opportunitiesNew technologies open new opportunities
How does a business benefit from new technologies?How does a business benefit from new technologies?
R. Ching, Ph.D. • MIS Area • California State University, Sacramento 14
StrategyStrategyStrategyStrategy ManagementManagementProcessesProcesses
ManagementManagementProcessesProcesses
StructureStructureStructureStructure
IndividualsIndividualsand Rolesand Roles
IndividualsIndividualsand Rolesand Roles
TechnologyTechnologyTechnologyTechnology
MIT90 FrameworkMIT90 FrameworkFive Inter-Related ComponentsFive Inter-Related Components
Dynamic Equilibrium: Any change to a component requires an Dynamic Equilibrium: Any change to a component requires an adjustment to the othersadjustment to the others
Organization and coordinationOrganization and coordination
Information Information TechnologyTechnology
Vision and Vision and directiondirection
Human resourcesHuman resources
Planning and controlPlanning and control
R. Ching, Ph.D. • MIS Area • California State University, Sacramento 15
Architecture vs. InfrastructureArchitecture vs. Infrastructure
• Architecture – a blueprint that shows Architecture – a blueprint that shows interrelationships of the components of a system interrelationships of the components of a system – Emphasis on the Emphasis on the whatswhats– Based on the business modelBased on the business model
• IT Infrastructure – implementation of the IT Infrastructure – implementation of the architecturearchitecturePurpose: Purpose: To deliver the right information to the To deliver the right information to the right people at the right timeright people at the right time
R. Ching, Ph.D. • MIS Area • California State University, Sacramento 16
ArchitectureArchitecture
• Defines guidelines and standardsDefines guidelines and standards• Service Oriented Architecture (SOA)Service Oriented Architecture (SOA)
– Emphases on accessibility of others systems to data Emphases on accessibility of others systems to data and functions, and reusability of programming codeand functions, and reusability of programming code
– Supports the organization's agilitySupports the organization's agility• Four attributes: Four attributes: Distributed vs. CentralizedDistributed vs. Centralized
– Location of processingLocation of processing– Connectivity among processorsConnectivity among processors– Location of data repository (data storage)Location of data repository (data storage)– Systemwide rules (information security, Systemwide rules (information security,
accessibility, etc.)accessibility, etc.)
R. Ching, Ph.D. • MIS Area • California State University, Sacramento 17
IT ArchitectureIT ArchitectureAnother ViewAnother View
• “…“…defines the technical computing, information defines the technical computing, information management, and communications platform. …management, and communications platform. …provides an overall picture of the range of provides an overall picture of the range of technical options available to a firm, and as such, technical options available to a firm, and as such, it also implies the range of business options.”it also implies the range of business options.”
EnablesEnablesOpportunitiesOpportunities
Con
trol
Con
trol VisionVision
Coordination Coordination (information flow (information flow
and linkages)and linkages)
What design gives the organization the best use of its information?What design gives the organization the best use of its information?What technology configurations will best support the business?What technology configurations will best support the business?
R. Ching, Ph.D. • MIS Area • California State University, Sacramento 18
InfrastructureInfrastructureDelivering the right information to the right people at the right timeDelivering the right information to the right people at the right time
• Delivering IT resources to support users Delivering IT resources to support users throughout the organizationthroughout the organization
• Four layer infrastructure (Four layer infrastructure (Weill and BroadbentWeill and Broadbent))– IT componentsIT components– Human IT infrastructureHuman IT infrastructure– Shared IT services – services that users can Shared IT services – services that users can
draw upon and share to conduct businessdraw upon and share to conduct business– Shared and standard IT applications – stable Shared and standard IT applications – stable
applications that change less frequently applications that change less frequently
R. Ching, Ph.D. • MIS Area • California State University, Sacramento 19
IT InfrastructureIT Infrastructure
• Three categories:Three categories:– Network – technologies that permit exchange Network – technologies that permit exchange
of information between processing units and of information between processing units and organizationsorganizations
– Processing systems – encompass hardware and Processing systems – encompass hardware and software that provide an organization’s ability software that provide an organization’s ability to handle business transactionsto handle business transactions
– Facilities – physical systems that house and Facilities – physical systems that house and protecting computing and network devicesprotecting computing and network devices
R. Ching, Ph.D. • MIS Area • California State University, Sacramento 20
IT Infrastructure: NetworkIT Infrastructure: Network
• Management issues:Management issues:– Selecting technologies and standardsSelecting technologies and standards– Selecting partners and managing their Selecting partners and managing their
relationshipsrelationships– Assuring reliabilityAssuring reliability– Maintaining securityMaintaining security
R. Ching, Ph.D. • MIS Area • California State University, Sacramento 21
IT Infrastructure: NetworkIT Infrastructure: Network
• Technological Elements:Technological Elements:– Local area networks (LANs)Local area networks (LANs)– Hubs, switches, wireless access points and Hubs, switches, wireless access points and
network adaptersnetwork adapters– Wide area networks (WANs)Wide area networks (WANs)– RoutersRouters– Firewalls and other security systems and Firewalls and other security systems and
devicesdevices– Caching, content acceleration and other Caching, content acceleration and other
specialized network devicesspecialized network devices
R. Ching, Ph.D. • MIS Area • California State University, Sacramento 22
IT Infrastructure: Processing SystemsIT Infrastructure: Processing Systems
• Management issues:Management issues:– Deciding what to keep in-house vs. out-sourcedDeciding what to keep in-house vs. out-sourced– Deploying, growing an modifyingDeploying, growing an modifying– Enterprise system vs. best of breed hybridEnterprise system vs. best of breed hybrid– Managing incidentsManaging incidents– Recovering from disastersRecovering from disasters
R. Ching, Ph.D. • MIS Area • California State University, Sacramento 23
IT Infrastructure: Processing SystemsIT Infrastructure: Processing Systems
• Technological elements:Technological elements:– Client devices and systemsClient devices and systems– Server devices and systemsServer devices and systems– Mainframe devices and systemsMainframe devices and systems– MiddlewareMiddleware– Infrastructure management systemsInfrastructure management systems– Business applicationsBusiness applications
R. Ching, Ph.D. • MIS Area • California State University, Sacramento 24
IT Infrastructure: FacilitiesIT Infrastructure: Facilities
• Management issues:Management issues:– Governance: Internal vs. external managementGovernance: Internal vs. external management– Aligning the facilities and business modelsAligning the facilities and business models– Assuring reliabilityAssuring reliability– Maintaining securityMaintaining security
R. Ching, Ph.D. • MIS Area • California State University, Sacramento 25
IT Infrastructure: FacilitiesIT Infrastructure: Facilities
• Technological elements:Technological elements:– Building and physical spacesBuilding and physical spaces– Network conduits and connectionsNetwork conduits and connections– PowerPower– Environmental controlsEnvironmental controls– SecuritySecurity
R. Ching, Ph.D. • MIS Area • California State University, Sacramento 26
Potential Benefits of a Real-time Potential Benefits of a Real-time InfrastructureInfrastructure
• Better data, better decisions – synchronizing data Better data, better decisions – synchronizing data to ensure their quality and reliabilityto ensure their quality and reliability– Consistency throughout the enterpriseConsistency throughout the enterprise
• Improved process visibility – open standards, Improved process visibility – open standards, open interconnectivity between business partnersopen interconnectivity between business partners
• Improved process efficiency – enhanced process Improved process efficiency – enhanced process visibility and quicker response to changes in the visibility and quicker response to changes in the environmentenvironment
• Sense and respond – sensing actual events (e.g., Sense and respond – sensing actual events (e.g., customer demand) vs. forecasting outcomescustomer demand) vs. forecasting outcomes
R. Ching, Ph.D. • MIS Area • California State University, Sacramento 27
Infrastructure: Another ViewInfrastructure: Another View
• IT infrastructure as a strategic resourceIT infrastructure as a strategic resource– Types of infrastructuresTypes of infrastructures
• Independent - without regard to strategiesIndependent - without regard to strategies• Reactive - development in reaction to a Reactive - development in reaction to a
particular thrustparticular thrust• Interdependent - coalignment with the strategic Interdependent - coalignment with the strategic
contextcontext– Modifications to the IT infrastructure signal Modifications to the IT infrastructure signal
implications for possible changes and implications for possible changes and improvements in strategy, while improvements in strategy, while modifications to strategic thrusts trigger modifications to strategic thrusts trigger appropriate changes in the IT infrastructureappropriate changes in the IT infrastructure
R. Ching, Ph.D. • MIS Area • California State University, Sacramento 28
Five Levels of IT-Induced Five Levels of IT-Induced ReconfigurationsReconfigurations
Business ProcessBusiness ProcessRedesignRedesign
Business ProcessBusiness ProcessRedesignRedesign
Business NetworkBusiness NetworkRedesignRedesign
Business NetworkBusiness NetworkRedesignRedesign
Business ScopeBusiness ScopeRedefinitionRedefinition
Business ScopeBusiness ScopeRedefinitionRedefinition
EvolutionaryEvolutionary
RadicalRadical
Internal IntegrationInternal IntegrationInternal IntegrationInternal Integration
Local exploitationLocal exploitationLocal exploitationLocal exploitation
Greater degree of business transformationGreater degree of business transformationGreater range of potential benefitsGreater range of potential benefits
Maximum exploitation of available IT capabilities Maximum exploitation of available IT capabilities Alignment between technology and the organizationAlignment between technology and the organization
R. Ching, Ph.D. • MIS Area • California State University, Sacramento 29
1. Local Exploitation1. Local Exploitation
• Exploitation of IT Exploitation of IT withinwithin a business function a business function– Development of applications that improve task Development of applications that improve task
efficiency efficiency – Target functional-specific goals without Target functional-specific goals without
influencing related areas of operationsinfluencing related areas of operations
R. Ching, Ph.D. • MIS Area • California State University, Sacramento 30
Local ExploitationLocal Exploitation Managerial implications Managerial implications
• Identification of high-leverage activitiesIdentification of high-leverage activities– Effective systems must be within the context of Effective systems must be within the context of
competitive and organizational conditions, and competitive and organizational conditions, and strategic thrusts strategic thrusts
• Rejection of generic strategic information Rejection of generic strategic information systemssystems– Specifically designed systems that provide Specifically designed systems that provide
maximal benefitsmaximal benefits• Recognition of the scope of transformationRecognition of the scope of transformation
– Other areas of operation should be aware of Other areas of operation should be aware of the localized system benefitsthe localized system benefits
R. Ching, Ph.D. • MIS Area • California State University, Sacramento 31
Enablers and InhibitorsEnablers and Inhibitors
EnablersEnablers
TechnologicalTechnological•Favorable cost-Favorable cost-performance trendsperformance trends•Vendor push - Vendor push - system solutionssystem solutionsOrganizationalOrganizational•Localized impactLocalized impact•Ease of assessing Ease of assessing efficiency benefitsefficiency benefits•Minimal Minimal disturbance to disturbance to operationsoperations
IT-Induced IT-Induced ReconfigurationReconfiguration
InhibitorsInhibitors
TechnologicalTechnological•ObsolescenceObsolescence•Further reduction Further reduction in cost-in cost-performanceperformanceOrganizationalOrganizational•Lack of strategic Lack of strategic visionvision•Unwillingness to Unwillingness to recognize the recognize the strategic role of IT strategic role of IT and ISand IS
Local Local ExploitationExploitation
R. Ching, Ph.D. • MIS Area • California State University, Sacramento 32
2. Internal Integration2. Internal Integration
The deployment of a common IT platform serves to The deployment of a common IT platform serves to integrate the organization’s business processes, integrate the organization’s business processes,
potentially enhancing efficiency and effectivenesspotentially enhancing efficiency and effectiveness• IT capabilities are exploited in all the possible IT capabilities are exploited in all the possible
activities within the business processactivities within the business process– Technical integrationTechnical integration
• Integrating systems and applications using a Integrating systems and applications using a common IT platform common IT platform
– Organizational integrationOrganizational integration• Integration of roles and responsibilities that Integration of roles and responsibilities that
exploits the technical integration capabilitiesexploits the technical integration capabilities
R. Ching, Ph.D. • MIS Area • California State University, Sacramento 33
Internal IntegrationInternal IntegrationBenefitsBenefits
• EfficiencyEfficiency– Compression of time and distance leading to Compression of time and distance leading to
cost savingscost savings• EffectivenessEffectiveness
– Opportunities to develop new competitive Opportunities to develop new competitive weapons or value-added servicesweapons or value-added services
R. Ching, Ph.D. • MIS Area • California State University, Sacramento 34
Internal IntegrationInternal Integration Managerial Implications Managerial Implications
• Articulation of the logic and rationale for internal Articulation of the logic and rationale for internal integrationintegration– Serves as the basis for developing detailed Serves as the basis for developing detailed
technological and organizational decisions to technological and organizational decisions to achieve integrationachieve integration
• Recognition of the dynamics of integrationRecognition of the dynamics of integration– Constant review and reassessment of the Constant review and reassessment of the
business integration requirements through the business integration requirements through the IT platform are necessary as business IT platform are necessary as business conditions and technological developments conditions and technological developments evolve over timeevolve over time
R. Ching, Ph.D. • MIS Area • California State University, Sacramento 35
Enablers and InhibitorsEnablers and Inhibitors
EnablersEnablers
TechnologicalTechnological•Increasing Increasing connectivity connectivity •Favorable cost-Favorable cost-performance trendsperformance trends•Vendor push-Vendor push-system solutionssystem solutionsOrganizationalOrganizational•Strategic vision for Strategic vision for integrationintegration•Centrality of IT to Centrality of IT to the strategic the strategic contextcontext
IT-Induced IT-Induced ReconfigurationReconfiguration
InhibitorsInhibitors
TechnologicalTechnological•UncertaintyUncertainty•Integration costsIntegration costsOrganizationalOrganizational•Lack of strategic Lack of strategic visionvision•Organizational Organizational inertia and inertia and resistance to resistance to changechange•Centralization-Centralization-decentralization decentralization conflictconflict
Internal Internal IntegrationIntegration
IdiosyncraticIdiosyncratic
R. Ching, Ph.D. • MIS Area • California State University, Sacramento 36
3. Business Process Redesign3. Business Process Redesign
Revolutionary changes in the design of Revolutionary changes in the design of organizational processes are necessary to best organizational processes are necessary to best exploit the emerging technological capabilitiesexploit the emerging technological capabilities
• Reconfiguration of the business using IT as a Reconfiguration of the business using IT as a central levercentral lever– Business processes are redesigned to Business processes are redesigned to
maximally exploit the available IT capabilitiesmaximally exploit the available IT capabilities• Redesign of relevant processes Redesign of relevant processes
– Respecification of organizational roles, Respecification of organizational roles, reporting relationships, and managerial reporting relationships, and managerial responsibilitiesresponsibilities
R. Ching, Ph.D. • MIS Area • California State University, Sacramento 37
Business Process RedesignBusiness Process RedesignManagerial ImplicationsManagerial Implications
• Recognition of the nature and impact of business Recognition of the nature and impact of business process redesignprocess redesign– Recognizing and understanding the scope and Recognizing and understanding the scope and
impact of potential IT-enabled process redesignimpact of potential IT-enabled process redesign• The role of strategy in business process redesignThe role of strategy in business process redesign
– Balance between technological and Balance between technological and organizational capabilitiesorganizational capabilities
– Dependent on the goals and strategies of the Dependent on the goals and strategies of the organizationorganization
R. Ching, Ph.D. • MIS Area • California State University, Sacramento 38
Enablers and InhibitorsEnablers and Inhibitors
EnablersEnablers
TechnologicalTechnological•Favorable cost-Favorable cost-performance trendsperformance trendsOrganizationalOrganizational•Awareness of the Awareness of the power of ITpower of IT•Willingness to Willingness to make quantum make quantum changeschangesMarketplaceMarketplace•Competitive Competitive pressurepressure
IT-Induced IT-Induced ReconfigurationReconfiguration
InhibitorsInhibitors
TechnologicalTechnological•UncertaintyUncertainty•Redesign costsRedesign costsOrganizationalOrganizational•Lack of strategic Lack of strategic visionvision•Organizational Organizational inertia and inertia and resistance to resistance to changechange•Cost of Cost of transforming the transforming the organizationorganization
Business Business Process Process
RedesignRedesign
R. Ching, Ph.D. • MIS Area • California State University, Sacramento 39
4. Business Network Redesign4. Business Network RedesignElectronic IntegrationElectronic Integration
Redesigning the nature of exchange among multiple Redesigning the nature of exchange among multiple participants in a business network through participants in a business network through electronic electronic
integrationintegration• Reconfiguration of the scope and tasks of the Reconfiguration of the scope and tasks of the
business network involved in the creation and business network involved in the creation and delivery of products and servicesdelivery of products and services– Includes business tasks within and outside the Includes business tasks within and outside the
organizationorganization– Electronic integration Electronic integration across key partners across key partners
becomes the dominant strategybecomes the dominant strategy• Business issues involving the relative Business issues involving the relative
authority and responsibilities of the authority and responsibilities of the participantsparticipants
R. Ching, Ph.D. • MIS Area • California State University, Sacramento 40
Strategic OptionsStrategic Options
• Strategies for business governanceStrategies for business governance– Relationships with key participants Relationships with key participants
• Loose vs. tightLoose vs. tight• Depends on the partnership and what is Depends on the partnership and what is
expected from itexpected from it• Strategies for IT governanceStrategies for IT governance
– Govern IT network across all participantsGovern IT network across all participants• Common vs. unique roleCommon vs. unique role
R. Ching, Ph.D. • MIS Area • California State University, Sacramento 41
Strategic OptionsStrategic OptionsB
usi
nes
s g
ove
rnan
ceB
usi
nes
s g
ove
rnan
ce
IT governanceIT governanceCommonCommon UniqueUnique
TightTight
LooseLoose
Collaborative Collaborative advantageadvantage
Collaborative Collaborative advantageadvantage
Electronic Electronic infrastructureinfrastructure
Electronic Electronic infrastructureinfrastructure
Business network Business network redesignredesign
Business network Business network redesignredesign
Competitive Competitive advantageadvantage
Competitive Competitive advantageadvantage
No strategic advantageNo strategic advantage Short-term advantageShort-term advantage
Improved efficiencyImproved efficiency Electronic integrationElectronic integration
R. Ching, Ph.D. • MIS Area • California State University, Sacramento 42
Electronic IntegrationElectronic Integration
A quasi-firm or a quasi-market mechanism that is A quasi-firm or a quasi-market mechanism that is fundamentally designed and operated through fundamentally designed and operated through
the capabilities offered by ITthe capabilities offered by IT• Emerging rolesEmerging roles
– Transactions - Transactions - supports the exchange of datasupports the exchange of data– Inventory - Inventory - provides a means for determining provides a means for determining
status and triggering events (movement of status and triggering events (movement of goods)goods)
– Process - Process - manages and coordinates processes manages and coordinates processes over all partiesover all parties
– Expertise - Expertise - provides intellectual supportprovides intellectual support
R. Ching, Ph.D. • MIS Area • California State University, Sacramento 43
Business Network RedesignBusiness Network RedesignBenefitsBenefits
• Operational efficiencyOperational efficiency– Savings in operating costs and timeSavings in operating costs and time
• Market positioningMarket positioning– Benefits gained by occupying certain positions Benefits gained by occupying certain positions
in the marketplacein the marketplace• Partnership conditionsPartnership conditions
– Scope of the business network in terms of the Scope of the business network in terms of the characteristics of the partnerscharacteristics of the partners
• Strategic capabilitiesStrategic capabilities– Extent to which innovative mechanisms can be Extent to which innovative mechanisms can be
deployed in each roledeployed in each role
R. Ching, Ph.D. • MIS Area • California State University, Sacramento 44
Business Network RedesignBusiness Network Redesign Managerial implications Managerial implications
• Conceptualizing strategies for electronic Conceptualizing strategies for electronic integration in terms of the intersection of three integration in terms of the intersection of three key decisionskey decisions– Business governance decisionsBusiness governance decisions– IT governance decisionsIT governance decisions– Scope of integrationScope of integration
• Conceptualizing organizational boundary in Conceptualizing organizational boundary in virtual termsvirtual terms
R. Ching, Ph.D. • MIS Area • California State University, Sacramento 45
Enablers and InhibitorsEnablers and Inhibitors
EnablersEnablers
•Ability to specify Ability to specify and/or create and/or create standards for standards for integrationintegration
•Identification of Identification of the value-added the value-added serviceservice
•Recognition of Recognition of mutual benefitsmutual benefits
IT-Induced IT-Induced ReconfigurationReconfiguration
InhibitorsInhibitors
•Lack of standardsLack of standards
•Lack of vision and Lack of vision and understandingunderstanding
•Lack of Lack of commitment to commitment to integrationintegration
•Possible erosion Possible erosion of market positionsof market positions
Business Business Network Network RedesignRedesign
R. Ching, Ph.D. • MIS Area • California State University, Sacramento 46
5. Business Scope Redefined5. Business Scope Redefined
• Explicate the logic underlying the portfolio of Explicate the logic underlying the portfolio of businessesbusinesses
• Identify differential strategic thrustsIdentify differential strategic thrusts• Develop criteria for allocation of scarce resources Develop criteria for allocation of scarce resources
among the businessesamong the businesses• Redefinition issuesRedefinition issues
– Enlarging the business mission and scopeEnlarging the business mission and scope– Shifting the business scope Shifting the business scope
R. Ching, Ph.D. • MIS Area • California State University, Sacramento 47
Business Scope RedefinedBusiness Scope Redefined
• Enlarging the business scopeEnlarging the business scope– Selling information as a new productSelling information as a new product– Offering value-added services related to the Offering value-added services related to the
original businessoriginal business• Shifting the business scopeShifting the business scope
– Redirecting core scope due to advances in Redirecting core scope due to advances in technologytechnology
R. Ching, Ph.D. • MIS Area • California State University, Sacramento 48
Management Challenge IssuesManagement Challenge Issues
• IT infrastructure as a strategic resourceIT infrastructure as a strategic resource– Types of infrastructuresTypes of infrastructures
• Independent - Independent - without regard to strategieswithout regard to strategies• Reactive - Reactive - development in reaction to a particular development in reaction to a particular
thrustthrust• Interdependent - Interdependent - coalignment with the strategic coalignment with the strategic
contextcontext– Modifications to the IT infrastructure signal Modifications to the IT infrastructure signal
implications for possible changes and implications for possible changes and improvements in strategy, while modifications improvements in strategy, while modifications to strategic thrusts trigger appropriate to strategic thrusts trigger appropriate changes in the IT infrastructurechanges in the IT infrastructure
R. Ching, Ph.D. • MIS Area • California State University, Sacramento 49
Adoption ITAdoption ITAssimilating Emerging TechnologiesAssimilating Emerging Technologies
• Technology identification and investmentTechnology identification and investment– High impact, high profileHigh impact, high profile
• Technological learning and adaptation (Technological learning and adaptation (light fireslight fires))– Introducing IT to end-user computingIntroducing IT to end-user computing– InnovationInnovation
• Realization management control (formalization)Realization management control (formalization)– Controls for the effective use and diffusion of ITControls for the effective use and diffusion of IT
• Maturity/widespread technology transferMaturity/widespread technology transfer– Sustained application and introduction of ITSustained application and introduction of IT
R. Ching, Ph.D. • MIS Area • California State University, Sacramento 50
Assimilating Emerging TechnologiesAssimilating Emerging Technologies
Phase 4 - AcceptancePhase 4 - AcceptancePhase 4 - AcceptancePhase 4 - Acceptance
Phase 3 - PolicyPhase 3 - PolicyPhase 3 - PolicyPhase 3 - Policy
Phase 2 - DiffusionPhase 2 - DiffusionPhase 2 - DiffusionPhase 2 - Diffusion
Phase 1 - InfusionPhase 1 - InfusionPhase 1 - InfusionPhase 1 - Infusion • Introduction of new ITIntroduction of new IT
• Expansion throughout Expansion throughout the organizationthe organization
• Setting policy of IT’s use Setting policy of IT’s use (application)(application)
• Maturation and further Maturation and further assimilationassimilation
R. Ching, Ph.D. • MIS Area • California State University, Sacramento 51
Assimilating Emerging TechnologiesAssimilating Emerging Technologies
Phase 4 - AcceptancePhase 4 - Acceptance
Phase 3 - PolicyPhase 3 - Policy
Phase 2 - DiffusionPhase 2 - Diffusion
Phase 1 - InfusionPhase 1 - InfusionPhase 1 - InfusionPhase 1 - Infusion Technology identificationTechnology identification• Decision to invest in new Decision to invest in new
ITIT• Complementary project Complementary project
implementations with implementations with high investment and high investment and benefits uncertainty benefits uncertainty
R. Ching, Ph.D. • MIS Area • California State University, Sacramento 52
Assimilating Emerging TechnologiesAssimilating Emerging Technologies
Phase 4 - AcceptancePhase 4 - Acceptance
Phase 3 - PolicyPhase 3 - Policy
Phase 2 - DiffusionPhase 2 - DiffusionPhase 2 - DiffusionPhase 2 - Diffusion
Phase 1 - InfusionPhase 1 - Infusion
Technological learning and Technological learning and adaptationadaptation
• Apply new technology to Apply new technology to new tasksnew tasks
R. Ching, Ph.D. • MIS Area • California State University, Sacramento 53
Assimilating Emerging TechnologiesAssimilating Emerging Technologies
Phase 4 - AcceptancePhase 4 - Acceptance
Phase 3 - PolicyPhase 3 - PolicyPhase 3 - PolicyPhase 3 - Policy
Phase 2 - DiffusionPhase 2 - Diffusion
Phase 1 - InfusionPhase 1 - Infusion
Rationalization/Rationalization/Management ControlManagement Control
• Control for guiding the Control for guiding the design and design and implementation of implementation of systems (i.e., systems (i.e., institutionalizing)institutionalizing)
R. Ching, Ph.D. • MIS Area • California State University, Sacramento 54
Assimilating Emerging TechnologiesAssimilating Emerging Technologies
Phase 4 - AcceptancePhase 4 - AcceptancePhase 4 - AcceptancePhase 4 - Acceptance
Phase 3 - PolicyPhase 3 - Policy
Phase 2 - DiffusionPhase 2 - Diffusion
Phase 1 - InfusionPhase 1 - Infusion
Maturity/Widespread Maturity/Widespread Technology TransferTechnology Transfer
• Technology embraced Technology embraced throughout the throughout the organizationorganization
• New technologies New technologies emergeemerge