Lecture 15

Chapter 8

Organizing and Leading the IT Function

2

Announcements

• Business Plan due Thursday– Length estimate ~10 pages

• Final Exam format: vote on Thursday– Open vs. closed book

3

Leadership: Next Three Weeks

• Organizing and Leading the IT function (today)

• Managing IT outsourcing

• IT portfolio management

4

Organizing and Leading IT

• Introducing new technologies

• Maintaining old technologies

• Balancing maintenance with innovation

• Defining roles

5

Organizational Issues

• Tension between innovation and control– Depends on firm willingness to take risks

• Is IT supposed to create or reduce risks?

• Tension between IT staff and business users– Users want short term fulfillment– IT want standardization, mastery of technology

• Balance is easy to get wrong

• See table 8.1

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Table 8.1 Dominance

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Four examples in text

• From centralized, IT-driven innovation to decentralized, user-driven innovation

• User-driven innovation over IT department protests

• From decentralized, user-driven innovation to centralized It management

• From decentralized, user-driven Innovation to unexpected centralized innovation

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Drivers toward user Dominance

• Pent-up user demand

• Need for staff flexibility

• Growth in IT services industry

• Users’ desire to control own destiny

• Fit with organization

9

Drivers toward centralized IT structure

• Staff professionalism

• Standard setting and ensuring system maintainability

• Envisioning possibilities and determining feasibility

• Corporate Data Management

• Cost estimation and analysis

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Coordination and Location of IT policy: IT Responsibilities

1. Develop and manage long-term architectural plan2. Develop process to establish, maintain and evolve company

standards in– Telecommunication protocols and platforms– Client devices and client software configurations– Server devices, middleware and database management systems– Programming and configuration languages– Documentation procedures and formats– Data definitions, especially for widely used data elements– Storage redundancy, backup and disaster recovery procedures– Information security policy and incident response procedures

3. Establish procedures that consider outsourcing options when new IT projects are proposed

– Ensure outsourced projects meet company standards

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Coordination and Location of IT policy: IT Responsibilities

4. Maintain inventory of installed and planned systems and services

– Evaluate value of these ongoing5. Identify career paths for IT staff

– Horizontal/vertical6. Establish internal marketing efforts

– Users understand challenges and costs, updates7. Incorporate RFP process for new hardware/software8. Identify and maintain relationships with preferred

vendors9. Establish education programs for business users10. Set up process for ongoing review of legacy systems

to determine upgrades, redesigns

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Coordination and Location of IT Policy:User Responsibilities

1. Seek to understand scope of all “IT activities supporting business users• Charge-back system, IT pressures, activity based overhead allocation

2. Develop realistic estimates of the amount of user personnel investment required for new projects both during development/deployment and in ongoing operation and use

3. Ensure comprehensive user input for all IT projects that support vital aspects of the unit’s operations.

4. Ensure nature of staffing interfaces is consistent with a new technology’s strategic relevance to a business unit.

• How strategic project is should correspond to staffing5. Periodically audit system reliability standards, communications services

performance and security procedures6. Participate in developing and maintaining IT plans that set new

technology priorities, schedule the transfer of IT among groups, and evaluate projects in light of overall company strategy

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Coordination and Location of IT Policy:Management/Policy Responsibilities

1. Ensure an appropriate balance between It and business users

2. Maintain comprehensive corporate IT strategy3. Manage inventory of hardware and software systems and

services• Corporate relationships with vendors

4. Establish standards for acquisition, development and IT systems operation.

5. Facilitate transfer of technology from one unit to another• Look for synergies and overlaps

6. Actively encourage technical experimentation.7. Develop appropriate planning and control system to link IT to

company goals• Monitor planning, system appraisal, charge-back, project management

14

IT Leadership and Management of Budgets

• Budgets are extremely important control mechanism!

• Budget to IT team directly or through business units?

• Often a mix of both

• Example: phase-out of technology

15

Questions, Break, Presentations

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Stages Theory of IT Adoption and Organizational Learning

• Framework for understanding IT assimilation in business organizations

• Proposed in 1973 by Richard Nolan, professor at Harvard

• Modified over time

• Based on idea of an S-shaped learning curve

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Four stages of organizational learning

• Initiation

• Contagion

• Control

• Integration

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Multiple growth processes

• Applications Portfolio

• Resources

• Management

• User Awareness

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Three eras in Organizational Learning

• New technologies have led to different eras in technology adoption

• Data processing era

• Micro era (from late 1970s)

• Network era (from early 1990s)

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Different key players and leaders in each era

• IBM leader in data processing era

• Stayed leader into micro era by introducing IBM personal computer

• Apple Macintosh computer had more sophisticated operating system, making user interface easier

• Competition drove innovation

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Discontinuous technology advances

• Other industries– Turbojet in airplanes– Radial tires adopted by Michelin

• Technology– Shift from mainframe to microcomputers– Shift to networked infrastructure

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Four areas of impact

• Automating Transaction Processing

• Informating Middle of Organization

• Imbedding IT in products and services

• Internal and external networking