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Information Systems

ManagementDavid Kroenke

Using MIS 3e

Chapter 11

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Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall 11-2

Information systems are critical to organizationalsuccess, and like all critical assets, need to beresponsibly managed, in organizations both large andsmall.

In this chapter, we will survey the management of ISand IT resources. We begin by discussing the majorfunctions and the organization of the IS department.

Then we will consider each of the major functions in

greater detail: planning the use of IT/IS, creating andmanaging the computing infrastructure, creating andmanaging enterprise IS, and protecting organizationalinformation assets.

Chapter Preview

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Chapter Preview

The pros and cons of outsourcing and describingsome of its risks are presented.

Finally, the chapter concludes with a discussion ofthe relationship of users to the IS department. In this

last section, you will learn both your own and the ISdepartments rights and responsibilities.

The goal of the chapter is to give you anappreciation for the scale and complexity of the IS

management task and to help you become aneffective consumer of IS services.

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Study Questions

Q1 What are the functions and organization of

the IS department?

Q2 How do organizations plan the use of IS?

Q3 What tasks are necessary for managing computing

infrastructure?Q4 What tasks are necessary for managing enterprise

applications?

Q5 What are the advantages and disadvantages ofoutsourcing?

Q6 What are your user rights and responsibilities?

Q7 2020?

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Functions and Organization of the

IS Department (Tutorial video)

Major functions of information systems department Plan the use of IT to accomplish organizationalgoals and strategy

Develop, operate, and maintain the organizationscomputing infrastructure Develop, operate, and maintain enterpriseapplications

Protect information assets Manage outsourcing relationships
http://media.pearsoncmg.com/ph/bp/bp_akamai/kroenke/videos.php?title=Chapter%2011-%20What%20are%20the%20functions%20of%20the%20IS%20department?&clip=pandc/kroenke/Ch_11_1.flvhttp://media.pearsoncmg.com/ph/bp/bp_akamai/kroenke/videos.php?title=Chapter%2011-%20What%20are%20the%20functions%20of%20the%20IS%20department?&clip=pandc/kroenke/Ch_11_1.flv

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How is the IS Department

Organized?

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How Is the IT Department

Organized? (see video)

Chief Information Officer (CIO) Principal manager Reports to CEO, COO, or CFO

Technology office Head: Chief Technology Officer (CTO) Investigates new information systems

technologies for possible application atorganization

Operations

Manages computing infrastructure

11-7
http://media.pearsoncmg.com/ph/bp/bp_akamai/mymislab/DMK2_11-1.htmlhttp://media.pearsoncmg.com/ph/bp/bp_akamai/mymislab/DMK2_11-1.html

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How Is the IT Department

Organized?

Development Manages process of creating new

information systems Maintains existing system

Outsourcing relations Handles affairs with outsourced systems

Data administration staff functions Establishes data standards and data

management practices and policies

11-8

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What IS-Related Job Positions

Exist?

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IT Position Requirements

Most positions require business knowledgeplus technical knowledge

Many require university degrees

Most require good verbal and writing skills Think dual majors with MIS/CIS to enhance

your marketability (competitive advantage) Accounting and information systems Marketing and information systems Management and information systems HRM and information systems

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Study Questions

Q1 What are the functions and organization of the ISdepartment?



infrastructure?Q4 What tasks are necessary for managing enterprise

applications?



Q7 2020?

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Major IS Planning Functions

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Align Information Systems with

Organizational Strategy

As strategies change, as the organization mergeswith other organizations, as divisions are sold, ISmust evolve along with the organization.

Changing a network requires time and resources.

Integrating disparate information systemsapplications is even slower and more expensive.

Without a persuasive CIO, IS can be perceived as adrag on the organizations opportunities.

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Communicate Issues to the

Executive Group

CIO provides the IS perspective duringdiscussions of problem solutions, proposals,and new initiatives.

For example, when considering a merger, itis important that a company considerintegration of information systems in themerged entities. This consideration needs to

be addressed during evaluation of mergeropportunity.

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Develop Priorities and Enforce

Them Within the IS Department

CIO must ensure that priorities consistentwith overall organizational strategy aredeveloped and communicated to IS

department. Must also ensure that IS department

evaluates proposals and projects for usingnew technology in light of those

communicated priorities.

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Sponsor the Steering Committee

Steering committee is a group of senior managersfrom major business functions that works with theCIO to set IS priorities and decide among major ISprojects and alternatives.

Provides a forum where information systemspersonnel can discuss potential IS initiatives anddirections with the user community

Provides a forum where users may express their

needs, frustrations, and other issues they have withthe IS department

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Study Questions



Q3 What tasks are necessary for managing

computing infrastructure?Q4 What tasks are necessary for managing enterprise

applications?



Q7 2020?

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Tasks Are Necessary for Managing

Computing Infrastructure

Distributed check printingcompany that grew through aprocess of acquisition.Company expanded to newgeographic locations byacquiring printers in differentcities. As each entity wasacquired, company kept it asan independent operatingcenter. Plant managers

accountable for performanceof their own facilities, and hadconsiderable operationalindependence.

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Centralized Order-management

System for All Plants

With centralized system, plantmanagers were unable toimplement their own production-

scheduling processes for small,but significant, differences in wayseach plant prioritized andprocessed its orders.Dissatisfaction with the centralizedsystem was rampant.

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Centralized Order-management

System for All Plants

More successful than centralizedsystem because it was consistentwith organizations underlying

management style and philosophy.

IS department was buried deep inaccounting department where it hadlittle visibility to rest of the company.

Company raised IS in management

hierarchy and instituted a steeringcommittee.

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Create, Operate, and Maintain

Computing Infrastructure

Three more, huge tasks in managingcomputing infrastructure are to:

1.Create and maintain infrastructure for end-

user computing,2.Create, operate, and maintain networks,

3.Create, operate, and maintain data centers,data warehouses, and data marts.

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Establish Technology and

Product Standards

IS department cannot afford to allow every computer user tohave own personal configuration. Doing so would createdifficulties for upgrading computers and programs, and mightresult in some users computers being incompatible withothers.

Users computing needs vary according to the work they do.Most IS departments have three or four different standardconfigurations.

Most basic configuration might have just email and a Webbrowser. Another might have Microsoft Office programs as

well; a third might have an extended version of Office,email, and some analysis software; a fourth configurationmight be created for software development personnel.

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Track Problems and Monitor

Resolutions

System must exist to record user problems andmonitor their resolution

When a user reports a problem, IS departmentassigns a tracking number, and problem enters a

queue for service. Normally, problems are prioritizedon basis of how critical they are to users work.

CIO and manager of computer operations groupmonitor the queue, the average length of time an

item remains in the queue, the number ofnonresolutions, and so forth.

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Manage Computing Infrastructure

Staff

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Study Questions




infrastructure?Q4 What tasks are necessary for managing

enterprise applications?



Q7 2020?

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Tasks Necessary for Managing

Enterprise Applications

Definition of what constitutes an enterpriseapplication varies among organizations. In someorganizations, IS department manages everyapplication, including individual and workgroup

applications. In others, individuals and workgroups manage their

own applications, with support from the ISdepartment in which enterprise applications refers to

some functional applications, and all cross-functional applications including CRM, ERP, andSOA-based interorganizational systems.

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Develop New Applications

Major application management functions

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Maintain (Legacy) Systems

Maintenance means either to fix the system to do what it wassupposed to do in the first place or to adapt the system tochanged requirements.

Legacy information system is one that has outdatedtechnologies and techniques but is still used, despite its age.

Legacy system maintenance entails adapting those systemsto new tax laws, accounting procedures, or other requirementsthat must be implemented for legacy system to be relevant anduseful.

The goal is to keep them working until they are replaced.

In larger organizations each major enterprise application hasits own problem-tracking and resolution system.
http://financecareers.about.com/od/informationtechnology/a/legacysystems.htmhttp://financecareers.about.com/od/informationtechnology/a/legacysystems.htm

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Integrate Enterprise Applications

Enterprise Application Integration (EAI)

Includes intermediary layers of software,and possibly intermediary databases, to

enable integration of disparate systems. Requires knowledge of many different

systems, including firms legacy systems,

such work is usually done in-house rather

than outsourcing it.
http://en.wikipedia.org/wiki/Enterprise_application_integrationhttp://en.wikipedia.org/wiki/Enterprise_application_integration

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Manage Development Staff

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Administer Data

Four primary responsibilities of data administration

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Example of Data Dictionary Entries

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Examples of Broad Data Policies

We will not share identifying customer data with anotherorganization.

We will not share non-identifying customer data with anotherorganization without the approval of the legal department.

Employee data are never to be released to anyone other than

the employee without the approval of the human resourcesdepartment.

Narrower data policies pertain to particular data items. Anexample is: We will maintain data about past employees for at

least seven years after their last day of work.

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Study Questions




infrastructure?Q4 What tasks are necessary for managing enterpriseapplications?

Q5 What are the advantages and disadvantages

of outsourcing?


Q7 2020?

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What Are the Advantages and

Disadvantages of Outsourcing?

(Tutorial video)

Outsourcing is the process of hiring anotherorganization to perform a service. Outsourcing is

done to save costs, to gain expertise, and to free upmanagement time.

Your back room is someone elses front room.

(Peter Drucker)
http://media.pearsoncmg.com/ph/bp/bp_akamai/kroenke/videos.php?title=Chapter%20Extension%2020-%20What%20are%20the%20advantages%20and%20disadvantages%20of%20outsourcing?&clip=pandc/kroenke/Ch_CE20.flvhttp://media.pearsoncmg.com/ph/bp/bp_akamai/kroenke/videos.php?title=Chapter%20Extension%2020-%20What%20are%20the%20advantages%20and%20disadvantages%20of%20outsourcing?&clip=pandc/kroenke/Ch_CE20.flv

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Outsourcing Information Systems

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What Are the Outsourcing

Alternatives?

Major categories of alternatives by information systems components

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What Are the Risks of

Outsourcing?

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Study Questions



Q3 What tasks are necessary for managing computinginfrastructure?

Q4 What tasks are necessary for managing enterpriseapplications?


Q6 What are your user rights andresponsibilities?

Q7 2020?

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What Are Your User Rights and

Responsibilities?

(Tutorial video)
http://media.pearsoncmg.com/ph/bp/bp_akamai/kroenke/videos.php?title=Chapter%2011-%20What%20are%20your%20user%20rights%20and%20responsibilities?&clip=pandc/kroenke/Ch_11_2.flvhttp://media.pearsoncmg.com/ph/bp/bp_akamai/kroenke/videos.php?title=Chapter%2011-%20What%20are%20your%20user%20rights%20and%20responsibilities?&clip=pandc/kroenke/Ch_11_2.flv

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Study Questions






Q6 What are your user rights and responsibilities?Q7 2020?

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2020?

Two computing movements are likely to increase in size andimportance in next ten years: cloud computingand greencomputing.

Cloud computing

A form of hardware/software outsourcing in which organizations

offer flexible plans for customers to lease hardware and softwarefacilities.

Amount of resource leased can increase and decreasedramatically, and customers pay only for resources used.

Major companies that offer cloud computing products include

Amazon.com, Oracle, and Microsoft. Pearson Education is a primary candidate to use cloud computing

for hosting its online student products.
http://www.infoworld.com/d/cloud-computing/what-cloud-computing-really-means-031http://www.infoworld.com/d/cloud-computing/what-cloud-computing-really-means-031http://thefutureofthings.com/articles/1003/green-computing.htmlhttp://thefutureofthings.com/articles/1003/green-computing.htmlhttp://thefutureofthings.com/articles/1003/green-computing.htmlhttp://thefutureofthings.com/articles/1003/green-computing.htmlhttp://www.infoworld.com/d/cloud-computing/what-cloud-computing-really-means-031http://www.infoworld.com/d/cloud-computing/what-cloud-computing-really-means-031

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Virtualization

Process by which multiple operating systems sharethe same computer hardware, usually a server

With virtualization, one server can support two

instances of Windows Server, one instance of Linux,and three instances of Windows 7, for example.

Virtual computer

Each OS appears to have full and exclusivecontrol over the server computer.
http://thefutureofthings.com/search.php?searchTerm=Virtual+computerhttp://thefutureofthings.com/search.php?searchTerm=Virtual+computer

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Green Computing

Green computing is environmentally consciouscomputing consisting of three major components:power management, virtualization, and e-wastemanagement.

Computers and related equipment use electricity andgenerate heat, which requires air conditioning, usingmore electricity and water. Hence computers place aburden on electrical resources and environment.

Green computing movement encouragesvirtualization to dramatically reduce server idle time.

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Green Computing

E-Trash are computers and related devices no longer in use. Computers, monitors, printers, and other computing

devices contain lead, mercury, cobalt, and other toxicsubstances.

Green computer movement seeks to reduce the creation of

such materials by changing the design of computers andrelated products to remove or limit them.

Also concerned with recycling of these substances as wellas with proper disposal.

Green computing is new, but is likely to become aconsiderable movement by 2020.
http://www.boston.com/business/technology/articles/2004/12/06/coping_with_e_trash_pileup/?rss_id=Boston%20Globe%20--%20Business%20Newshttp://www.boston.com/business/technology/articles/2004/12/06/coping_with_e_trash_pileup/?rss_id=Boston%20Globe%20--%20Business%20Newshttp://www.boston.com/business/technology/articles/2004/12/06/coping_with_e_trash_pileup/?rss_id=Boston%20Globe%20--%20Business%20Newshttp://www.boston.com/business/technology/articles/2004/12/06/coping_with_e_trash_pileup/?rss_id=Boston%20Globe%20--%20Business%20News

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Ethics Guide: Using the

Corporate Computer

Suppose you are a manager at a company with thestated policy: Computers, email, and the Internet are to be used

primarily for official company business. Small amounts of

personal email can be exchanged with friends and family,

and occasional usage of the Internet is permitted, but such

usage should be limited and never interfere with your

work.

You find out that one of your employees has beenengaged in the activities listed on the following slide.

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What would you do? How would

you handle the situation?

1. Playing computer games duringwork hours

2. Playing computer games beforeand after work hours

3. Responding to emails from an illparent

4. Watching DVDs during lunchand breaks

5. Sending emails to plan a partythat mostly involves people fromwork

6. Sending emails to plan a partythat mostly involves no one fromwork

7. Searching the Web for a new car

8. Reading the news on CNN.com

9. Checking the stock market over theInternet

10. Bidding on items for personal use oneBay

11. Selling personal items on eBay

12. Paying personal bills online

13. Paying personal bills online whentraveling on company business

14. Buying an airplane ticket for an illparent over the Internet

15. Changing the content of a personalWeb site

16. Changing the content of a personal

business Web site17. Buying an airplane ticket for a

personal vacation over the Internet

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Guide: Is Outsourcing Fools

Gold?

Outsourcing computer infrastructure is trading oneset of problems for another

Outsourcing IT middle management Outsource vendor hires your first-line IT staff

No way to know if vendors middle managers are any better

Vendors bureaucratic problems: forms, procedures,

committees, report, management tools, and so on

You become a clone of vendors other clients

CE20-

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Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall11-49

Guide: Is Outsourcing Fools

Gold?

Hard to bring outsourced operations back in-house Cant hire vendors employees

Your employees lack critical knowledge

Vendors are not committed to your bottom line

Moral:

You cant get away from IS problems by

hiring someone else to manage your IS foryou.

CE20-

G id Wh If Y J D

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Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall11-50

Guide: What If You Just Dont

Know?

Not all problems can be solved by quantitativeanalysis.

Some problems have no agreed-upon method forsolving.

Paper analysis often misses tangibles andintangibles.

Hiring independent consultant avoids issue.

No time to find answers.

No money to conduct in-depth study.

Study may cloud issues more.

Sometimes, its just not possible to find the answer.

CE21-

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Active Review






Q6 What are your user rights and responsibilities?Q7 2020?

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C St d 11 M i tt

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Case Study 11: Marriott

International, Inc.

Operates and franchises hotels and lodging facilitiesthroughout the world

2007 revenue was just over $12.9 billion

Marriott groups its business into segments

according to lodging facility. Major business segments are full-service lodging

Select-service lodging

Extended-stay lodging

Timeshare properties

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International, Inc.

Three top corporate priorities are:

1. Profitability

2. Preference

3. Growth Revenue management, which adjusts

prices in accordance with demand.

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International, Inc.

Marriott developed two different revenuemanagement systems, one for premium hotels anda second for its lower-priced properties.

Both developed using preInternet technology

Systems upgrades required installing updateslocally which were expensive and problematic.

Two systems required two separate interfaces forentering prices into centralized reservation system.

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International, Inc.

In the late-1990s, Marriott embarked on a project to create asingle revenue-management system to be used by all of itsproperties.

The new system, called One Yield, was custom developed in-house, using a process similar to the SDLC.

IT professionals understood importance of user involvement,and formed a joint ITbusiness user team that developedbusiness case for new system and jointly managed itsdevelopment.

Team provided constant communication to systems future

users, and used prototypes to identify problem areas early. Training is a continuing activity for all Marriott employees, and

training facilities were integrated into new system.

C St d 11 M i tt
http://www.cio.com/article/119209/The_Price_Is_Always_Righthttp://www.cio.com/article/119209/The_Price_Is_Always_Right

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International, Inc.

One Yield recommends prices for each room, giventhe day, date, current reservation levels, and history.Each hotel property has a revenue manager whocan override these recommendations.

Either way, prices are communicated directly to thecentralized reservation system.

One Yield uses Web-based technology so that whenthe company makes upgrades to its system, it makesthem only at Web servers, not at individual hotels.

This strategy saves considerable maintenance cost,time, and frustration.

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International, Inc.

One Yield computes the theoretical maximumrevenue for each property and compares actualresults to that maximum.

Using One Yield, the company has increased theratio of actual to theoretical revenue from 83 to 91percent. That increase of 8 percentage points hastranslated into a substantial increase in revenues.

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All rights reserved. No part of this publication may be reproduced, stored in aretrieval system, or transmitted, in any form or by any means, electronic,

mechanical, photocopying, recording, or otherwise, without the prior writtenpermission of the publisher. Printed in the United States of America.

Copyright 2011 Pearson Education, Inc.Publishing as Prentice Hall

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