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!