JAI SHIV

Information Technology in Management

Topic : IT Issues in Management

In Favor of :
Mrs. Monika Dubey & M.B.A. II Sem.

With Regards by :
AAkAsh Pareek Omi Pal

INFORMATION TECHNOLOGY MANAGEMENT SYSTEM ISSUES

Eight key issues:
1. 2. 3. 4. 5. 6. 7. 8. Agreeing upon the role of the IS organization Selecting effective IS leadership Creating an active partnership with business managers Determining an outsourcing strategy Designing an equitable financing system Deploying global information systems Designing an appropriate IS organization and governance system Ensuring regular performance measurement

INFORMATION TECHNOLOGY MANAGEMENT SYSTEM ISSUES

1. Agreeing Upon the Role of the IS Organization

IS organization:
Role is continually changing

Needs a mission statement

Must be future-oriented while fulfilling todays requirements

Must be aligned closely with business activities

INFORMATION TECHNOLOGY MANAGEMENT SYSTEM ISSUES

1. Agreeing Upon the Role of the IS Organization

IS organization is expected to:

Demonstrate business understanding and maintain close communication with business managers Respond quickly to changing business needs Help reengineer business processes to be more customer responsive Ensure business can participate in e-commerce Keep final customer in mind Build systems that provide direct customer benefit Help business managers make better decisions with information Use IT for competitive advantage Help business integrate IT

INFORMATION TECHNOLOGY MANAGEMENT SYSTEM ISSUES

1. Agreeing Upon the Role of the IS Organization

IS organization is also expected to:

Be steward of organizations IT resources Deploy IT resources throughout the organization Facilitate productive use of resources Lead development of information vision and IT architecture Communicate vision and architecture Maintain managerial control over important information resources Administer corporate data Make current and new IT available at lowest possible cost Help business managers know and use technology Develop partnership with business managers to exploit technology

INFORMATION TECHNOLOGY MANAGEMENT SYSTEM ISSUES

2. Selecting Effective IS Leadership

Chief Information Officer (CIO):

A member of executive management team Needs mix of business and technical knowledge Guides and unifies entire organizations IT resources Masters understanding of business, products, vendors, sales channels, customers, and competition Recognize IT advantages and where to apply Hires good people and delegates Works with executive management team to achieve competitive advantage

INFORMATION TECHNOLOGY MANAGEMENT SYSTEM ISSUES

2. Selecting Effective IS Leadership

Senior IS Management Issues:

Improving data and IT planning, especially linking IS to the business Gaining business value through IT Facilitating organizational learning about and through IT Refining the IS units role and position Guiding systems development by business managers Managing organizational data as an asset Measuring IS effectiveness Integrating information technologies Developing systems personnel

INFORMATION TECHNOLOGY MANAGEMENT SYSTEM ISSUES

3. Creating an Active Partnership with Business Managers Partnership a critical strategy based on sustaining a long-term relationship between IS and business management

INFORMATION TECHNOLOGY MANAGEMENT SYSTEM ISSUES

3. Creating an Active Partnership with Business Managers

IS steering committee or advisory board used to:

Ensure frequent interaction Set priorities Check progress Allocate scarce resources Communicate concerns Provide education Develop shared responsibility

INFORMATION TECHNOLOGY MANAGEMENT SYSTEM ISSUES

4. Determining an Outsourcing Strategy Outsourcing hired outside services to perform some of a companys IS operations Application service providers (ASPs) provide total systems to organizations, ranging from competitive intelligence systems to broad ERP applications

INFORMATION TECHNOLOGY MANAGEMENT SYSTEM ISSUES

Outsourcing:
Allows an organization to pay only for what it uses Trend might relate to the position of the CIO Popular, largely due to:

Fast pace of technological change Dissatisfaction and costs related to past in-house services

Must be both a remedy for service failures or costs and a strategic choice Should not be used for strategic information systems with security or privacy issues

INFORMATION TECHNOLOGY MANAGEMENT SYSTEM ISSUES

Key factors in selecting an outsourcing vendor:
Vendor reputation Quality of service Flexible pricing

INFORMATION TECHNOLOGY MANAGEMENT SYSTEM ISSUES

5. Designing an Equitable Financing System Typical measures used to track IT costs:

Total IT budget as percentage of total organization revenues or income Total IT budget as percentage of total organization budget IS personnel costs as percentage of total organization professional personnel salaries and wages Ratio of hardware and software costs to IS personnel costs Costs for IT hardware and software per managerial or knowledge worker

INFORMATION TECHNOLOGY MANAGEMENT SYSTEM ISSUES

5. Designing an Equitable Financing System

Why is it hard to measure IT costs?

Some IT costs are hidden No relationship to benefits included in these measures Benefits may happen after development costs occur

INFORMATION TECHNOLOGY MANAGEMENT SYSTEM ISSUES

Measuring Benefits No simple way to measure value added benefits of IT Can track IS performance measures over time

INFORMATION TECHNOLOGY MANAGEMENT SYSTEM ISSUES

Controlling IS Costs

Use IS organizations budget Divide costs:

Personnel Equipment and software Outside services Overhead

INFORMATION TECHNOLOGY MANAGEMENT SYSTEM ISSUES

Chargeback Systems
IS chargeback process places control of IS spending with business managers, and is used to better understand true costs

INFORMATION TECHNOLOGY MANAGEMENT SYSTEM ISSUES

5. Designing an Equitable Financing System

Why use a chargeback system?

Assign costs to those who consume Control wasteful use of IT resources Overcome belief that IT costs unnecessarily high Provide incentives using subsidy Change IS to be more business driven Encourage managers to be knowledgeable consumers

INFORMATION TECHNOLOGY MANAGEMENT SYSTEM ISSUES

5. Designing an Equitable Financing System

Successful chargeback systems must be:

Understandable Timely Controllable Accountable Clearly linked to benefits Consistent with IS and organizational goals

INFORMATION TECHNOLOGY MANAGEMENT SYSTEM ISSUES

6. Deploying Global Information Systems

Region and country issues influencing global IT management:

1. 2. 3. 4. Country telecommunications infrastructures Legal and security considerations Language and culture Time zone differences

INFORMATION TECHNOLOGY MANAGEMENT SYSTEM ISSUES

6. Deploying Global Information Systems

Key trends of global outsourcing:

Offshore development centers permanent offshore presence Near-shore sourcing outsourcing to countries close to home and overlapping time zones Multisourcing relying on multiple service providers in a number of companies, based on price and skills

INFORMATION TECHNOLOGY MANAGEMENT SYSTEM ISSUES

6. Deploying Global Information Systems

Global team manager traits:

Multiculturalist E-facilitator Recognition promoter Internationalist Traveler

INFORMATION TECHNOLOGY MANAGEMENT SYSTEM ISSUES

7. Designing an Appropriate IS Organization and Governance System

Classic IS Organization Structure

INFORMATION TECHNOLOGY MANAGEMENT SYSTEM ISSUES

7. Designing an Appropriate IS Organization and Governance System

Types of IS Organizational Design:

Centralized IS applications and resources housed, managed, and controlled centrally Decentralized business units have complete control of their own IS resources Federal attempt to achieve benefits of both centralized and decentralized Customized mixed design in large enterprises where each division determines best design for that division

Centralized Decentralized Federal Customized

Common Designs for the IS Organization

INFORMATION TECHNOLOGY MANAGEMENT SYSTEM ISSUES

7. Designing an Appropriate IS Organization and Governance System

Organization design depends on:

How rest of business is organized Type of customer markets, products, and geographical spread Role of IT within the organization Reporting level of most senior IS leader Types of technologies managed by IS organization

Four Types of IS Governance Mechanisms

INFORMATION TECHNOLOGY MANAGEMENT SYSTEM ISSUES

8. Ensuring Regular Performance Measurement

Necessary for internal customers to regularly evaluate IS organization Need to show if promised cost savings are realized Required:

Agreement on measurable criteria Metrics to judge work quality

INFORMATION TECHNOLOGY MANAGEMENT SYSTEM ISSUES

8. Ensuring Regular Performance Measurement IS Evaluation Criteria

Meeting business objectives Responding rapidly and economically to new needs Expanding business or services Developing an architecture and plan Operating reliable and efficient technology resources Focusing on the customer Providing quality IS staff Reducing size of backlog Satisfying users Adopting new technologies
IS Evaluation Criteria

INFORMATION TECHNOLOGY MANAGEMENT SYSTEM ISSUES

8. Ensuring Regular Performance Measurement

Other measures to evaluate IS performance:

Service level agreements with internal business units can be used to evaluate IS performance Annual surveys for each major system User satisfaction surveys

Greatly Thanks For The Cooperation