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Chapter 15:Managing the Information
Systems Function
Critical Areas of the IT Management System
An Agreed-Upon Role for the IS Organization
IS Leadership -- the CIO Active Role for User-Managers Strategic and Economic Rationale
for Outsourcing An Equitable Financing System
Critical Areas of the IT Management System
IS Staff/User Development Global Information Systems
Development Appropriate IS Organization Design Regular Performance Measurement A Change Management System
1. Role of the IS Organization
The role of the IS organization is to be the steward of the information and IT resources of the organization, much as the finance organization is the steward for financial resources
1. Role of the IS Organization
Deploy IT resources, and facilitate the productive use of these resources
Develop IT vision/architecture Maintain control over info.
resources, including data Develop partnership with user-
managers to exploit IT
2. Chief Information Officer (CIO)
The most senior organizational officer who is responsible for only information technology
The CIO leads all usage of IT from a general business perspective, but may or may not have operating responsibility for the IS organization
2. Role of the CIO
Manages the organization’s information and IT resources
Part of senior executive group Staff rather than line (usually) Responsible for developing an IT
architecture that fits the organization’s objectives, management style, and culture
3. User-Manager Role
Senior IS managers must work in partnership with non-IS senior managers to ensure the productive use of IT
This partnership is often accomplished through an IS Policy Committee, or an IS Steering Committee
4. Outsourcing
The elimination of part of the internal IS organization (or not adding people) by hiring an outside organization to perform these functions
4. Outsourcing: Primary Drivers
Cost reduction (due to economies of scale)
Avoid investments to handle peak loads Focus on what’s “core” (stick-to-
the-knitting) Difficult to keep pace with technology
changes, demands for new IT skill sets Facilitate acquisitions / divestitures
4. Outsourcing
Must be viewed as both a remedy for service failures or cost issues AND as a strategic choice
Must be done selectively Don’t outsource elements of IT
that have STRATEGIC value to the firm!
5. Financing IT
Must measure and manage IT costs - including comparison with other firms/industries
Must measure benefits, but the problem of intangible benefits looms large
User-managers, not IS, must justify IT investments!
5. Financing IT
Chargeback systems sometimes used to hold IS and line organizations accountable for the impact of systems on the organization
6. IS Staff/User Development
“An effective IT management system will allocate significant resources to the continuing development of both IS personnel and users.”
TRAINING is critical!
6. IS Staff/User Development
Selected IS Management Positions: CIO, IS Director, Information Center Manager, Systems Development Manager, IS Planning Manager, Data Center Manager, Programming Manager, Telecommunications Manager, Database Administrator, etc.
7. Problems Associated with Global IT
Language, currency Culture National infrastructure Availability of IT staff Transborder data flows Trade unions IT costs and availability
7. Global IS Strategies
IMPERIALISTIC strategy - tightly controls international operations, making them extensions of headquarters -IS management centralized, common architecture for IT, one or a few data centers, IT planning/funding centralized, hierarchical IS organization
7. Global Business Strategies (cont.)
MULTIDOMESTIC strategy - highly decentralized with only necessary financial ties between subsidiaries and headquarters - really a federation of separate companies - IS management and operations are largely localized
7. Global Business Strategies (cont.)
GLOBAL strategy - both high degree of integration and high degree of local control - teamwork is key - IS integrates a few key technologies and resources as part of the architecture, but rest is left to local control - IS organization is usually a matrix structure
7. Planning for Global Systems (Roche, 1992)
Use technology to cement strategic alliances (EDI, databases)
Develop international systems development skills (have a global view)
Build for the future (common telecommunications, consistent hardware/software platforms, global data definitions)
7. Planning for Global Systems (continued)
Tear down the “national” model (hardware/software standards, international workflow automation)
Eliminate duplicate facilities and staffs
Take advantage of improving international telecommunications
7. Planning for Global Systems (continued)
Standardize data structures and definitions
Globalize human resources in IS (worldwide promotions and relocations, multinational project team selection)
8. IS Organization Design
Classic IS organization - often reports to VP-Administration, VP-Finance, or Comptroller - highly centralized, task oriented - focus on efficiency
Functional area IS organization -- reports as above - separate development groups for each functional area
8. IS Organization Design
Service-oriented IS organization - often reports to Executive VP, Senior VP - focus on service, including data administration, telecommunications, information center, R & D
8. IS Organization Design
Distributed IS organization - often reports to Exec VP, Sr VP, or CEO - central IS has planning and coordination responsibilities
Federal IS organization - IS staff still distributed, but has centralized data centers
8. Factors Favoring Centralization of IS
Specialization of personnel is possible
Avoid duplication of dev. efforts Maintain a critical mass of
specialists Provide an organization-wide, long-
range focus Standardization
8. Factors Favoring Decentralization of IS
Hardware economics Responsiveness to local needs Reduced communication costs Allow local units to have control
over their own destiny Corp. decentralization policy Maintain a bottom-line perspective
8. Other Issues in Decentralization
To where? Region, division, product line, location, department, individual user, outside vendor
In what sense? Geographical, management, resource allocation
8. Core Roles of Central IS
IT vision and architecture IT strategic planning Research & development Backbone/wide area networks Develop corporate-wide
applications Corporate data center
9. Regular Performance Measurement
Regular evaluation of IS organization by its internal customers, based on agreed-upon and measurable criteria
Might be done through Service Level Agreements
More likely through user satisfaction surveys
10. A Change Management System
IT initiates massive change in an organization, so an effective IT management system must include a change management system
Understanding change is important!
10. Lewin/Schein Change Model
UNFREEZING - Establish a felt need - Create a safe atmosphere
MOVING - Provide necessary information - Assimilate knowledge and develop skills
REFREEZING
10. Rogers’ Stages of the Adoption Process
Awareness Interest Evaluation Trial Adoption
10. Ease of Adoption Characteristics (Rogers)
Relative advantage
Compatibility Complexity Divisibility Communicability
10. Diffusion of an Innovation (Rogers)
Diffusion over time follows a bell-shaped curve
First 2.5% of adopters are the innovators - risk-takers, but not opinion leaders
Next 13.5% are the early adopters - they are the opinion leaders, and thus are crucial!
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