Managing information systems 7th edition brow ch013

Software applications specific to a business unit or function Fig 13.1: Shared versus “Local” IS Resources • Another type of Federal IS governance design: - Centralized for “Shared” reso

Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall

EVOLVING IS LEADERSHIP ROLE

• Executive IS leadership role has evolved over time due to:

– Rapid technological change – Opportunities for strategic IT applications and business intelligence – Increase in IT-savvy business managers

– Ubiquitous IT usage

TOP IS EXECUTIVE ISSUES IN 2010

1 Business productivity and cost reduction

2 Business agility and speed-to-market

3 IT and business alignment

4 IT reliability and efficiency

5 Business process re-engineering

Source: Survey of Society of Information Management members in mid-2010

Luftman and Ben-Zvi, MISQ Executive, Dec 2010

IS ORGANIZATION RESPONSIBILITIES AND GOVERNANCE

- Locus of decision-making and accountability for:

1) computer and network operations 2) application software (development of new applications and maintenance of existing applications)

TWO PRIMARY IS RESPONSIBILITIES

Computer & Network Operations

Planning, purchasing, installing, operating, and maintaining/upgrading:

Application Software Development &

Maintenance

- Acquiring (custom-developing, purchasing or “renting”)

- Implementing

- Maintaining/upgrading

Application software for:

- the entire enterprise

- business units/departments

- smaller work groups

- individuals

IS GOVERNANCE ALTERNATIVES

Fig 13.2

Software applications specific

to a business unit or function

Fig 13.1: Shared versus “Local” IS Resources

• Another type of Federal IS governance design:

- Centralized for “Shared” resources (services & applications)

- Decentralized for “Local” IS resources

SHARED SERVICES IN A MULTINATIONAL FIRM

Shared Services Organization for Asia Pacific region at British America Tobacco

Source: Brown and Vessey, 2003

MANAGING IT SERVICE DELIVERY

Technology Tradeoff Decisions

- Network Response Time

- Security, Privacy and Network Access

EXAMPLE: BECOMING GREEN WITH BUSINESS INTELLIGIENCE

United Parcel Service

• Business intelligence helped identify ways for UPS to reduce idling times

of its delivery trucks, saving fuel and reducing pollution

- Creates fuel-efficient routes for its package delivery vehicles

- Cuts fuel consumption by monitoring and reducing idling time of

trucks at their delivery destinations

• Move from a scheduled maintenance program to a condition-based

maintenance program for its trucks

- Fewer truck breakdowns and fewer replacement parts required for the vehicles, which eliminates waste

CHARGEBACK SYSTEMS

• Chargeback systems place control of IS spending with business

managers and enables them to better understand their true IT costs

• Examples of IT resources that can be part of chargeback costs:

- IS personnel (time spent and rate for specific skills)

- Computer usage (or computer cycles used)

- Disk file space (data storage costs based on type of storage unit)

- Number of transactions processed

- Amount of computer main memory used (per unit of time)

- Number of users of an application

CHARGEBACK SYSTEMS

Potential Benefits

Fig 13.4

- Costs related to benefits

- Consistent with goals

Fig 13.5

SERVICE LEVEL AGREEMENTS (SLAs)

Service Level Agreements (SLAs)

Defines the client expectation for a specific type of IT service as well as procedures to follow when these expectations are not met.

• Should include:

- A simple definition of the service to be provided (e.g., help desk support)

- The name(s) and contact information of IS personnel to contact for this service

- A table listing the services to be provided and their costs (e.g., how quickly different types of problems will be responded to, and the costs associated with providing this type of service level)

- Escalation procedures (e.g., who to contact if the agreed upon service response is not being provided)

- A sign-off page for the appropriate business client and the IS liaison preparing the SLA document

IT SERVICE MANAGEMENT with ITIL

• Information Technology Infrastructure Library (ITIL)

- Processes that focus on the business aspect of IT service delivery - created by the British Office of Government Commerce

- Describes how various IT processes should be performed to ensure

outcomes such as:

- Adequate computer capacity exists for new IT applications or other IT infrastructure changes

- Tracking of a computer incident from the time it first appears until a system change is made to permanently fix the problem

- Formal change management process are followed for changes to any component of an IT system

ITIL Official Site

IT SERVICE DELIVERY:

SUPPORTING COMPUTER USERS

• IT support for employees using computer tools, including

those developing software applications with these tools

• Key principle:

- Unique aspects of the organization, as well as the different support needs of work units and computer users, need to be taken into account when designing strategies and tactics for user support

• Common in 1980s when PCs were first introduced into corporations:

IT leaders did not attempt to support or control their introduction.

• Today: approach may be used with new personal technologies

Acceleration

• Low levels of formal controls and significant investments in resources

to support users, to promote growth in tool usage

• The goal is to encourage users to acquire and learn about computer tools, including developing their own applications, before introducing heavy control policies

STRATEGIES FOR SUPPORTING USER COMPTING

Containment

• Risk adverse approach with high levels of formal controls and

procedures, including strict policies for tool security

• Appropriate for highly regulated environments to be sure policies

and procedures are formulated and enforced

Controlled Growth

• Combines high levels of formal controls and procedures with

significant investments in resources

• Considered to be the ideal, mature approach: organizations initially

begin with a different strategy and then migrate to controlled growth

SERVICE LEVEL AGREEMENTS FOR DESKTOP SUPPORT

• Speed in responding to user requests is a key performance metric

• Different support levels based on the problem type are established in consultation with business unit managers

• Different types of problems will have different maximum time periods in which they should be solved

COMMON SUPPORT SERVICES

Fig 13.9

COMMON POLICIES AND PROCEDURES

• Establishing technology “standards” is typically an IS department responsibility, but some organizations have committees with business unit representatives to establish policies

• Organizations communicate the policies and procedures to new employees via orientation programs

• Control Policies have to be modified in response to new technologies, ways of working, new laws and new external threats

Fig 13.10 Common Policies and Procedures

SUPPORTING TELECOMMUTERS

• Telecommuters spend at least a part of their regular business

hours using IT to perform their jobs outside of a company’s physical facilities, using a mobile office, an office in their personal home, or a temporary office at a shared work center away from the company’s main office.

• Potential benefits from implementing Telecommuting include:

- Increased workday flexibility and improved work-life balance for the telecommuter

- Easier accommodation of communications across time zones for the organization

- Integration of new technologies with legacy systems can be

difficult and time-consuming

- The trend is to replace custom-developed applications with purchased software packages for common business applications: the maintenance burden is moved to the vendor, which is expected to regularly develop revised versions of the software

IT APPLICATIONS PORTFOLIO APPROACH

• IT Applications Portfolio

– Software portfolio needs to be managed as an asset

– For installed software, a company must know:

- What software it owns

METRICS FOR IT APPLICATIONS

– Performance metrics for projects to develop new applications:

- High Quality

- On-time Delivery

- Within budget

– IS processes to manage and deliver IT applications

• Example: CMM (or CMMI)

- Five levels of process maturity that can be measured

- For outsourcing vendors, the certified CMM level of a vendor is often used

in client firm evaluations of potential vendors

FIVE LEVELS OF CAPABILITY MATURITY FOR SOFTWARE DEVELOPMENT (CMM)

Fig 13.11

PROJECT MANAGEMENT OFFICE (PMO)

– Management structure to oversee projects and improve

MANAGING IT HUMAN RESOURCES

– Highest percentage of a typical IS budget is for IS personnel

– Five categories of IS personnel skills:

CATEGORIES OF IT HUMAN RESOURCE SKILLS

Fig 13.12

CATEGORIES OF IT HUMAN RESOURCE SKILLS

Fig 13.12 continued

MANAGING IT HUMAN RESOURCES

– Attracting, recruiting, and retaining qualified staff is a key

responsibility for IS managers in collaboration with an organization’s HR staff

– Some common practices that managers use to retain valued

IS personnel include:

- Changing the work environment to be more employee-friendly

- Increasing career development opportunities

- Providing community-building initiatives

- Establishing monetary or other employee incentives

COMMON PRACTICES FOR RETAINING IT WORKERS

Fig 13.13

INTERNAL AND EXTERNAL IT STAFFING

• Insourcing and Outsourcing of IT skills

Large firms in developed countries (e.g., U.S., Western Europe) today

outsource some IS activities to countries with lower labor costs

- What skills are most likely to be outsourced?

- What skills are most likely to be retained in-house?

Fig 13.14

MANAGING THE BUSINESS/IT RELATIONSHIP

- Business managers must work with IS managers to realize investments in IT resources

- A formal statement of the IS organization’s role may be helpful in strengthening a strained or failed IT-Business relationship

- A strong relationship is characterized as a partnership

Business/IT Relationship

Partnering relationships between business and IT managers, including joint decision-making

MANAGING THE BUSINESS/IT RELATIONSHIP

• Horizontal (lateral) mechanisms can be used to help build and

foster the business/IT partnership

EXAMPLES OF HORIZONTAL MECHANISMS

Formal Groups

• Common example: IS Steering Committee with responsibilities to:

- Approve requests for new technology investments

- Set priorities for application development and implementation

- Monitor progress of IT projects against timelines and budgets

- Share responsibility and ownership for achieving business value

from IT investments

Formal Roles

• Some organizations have managers in integrator roles to help achieve a

strong Business/IT relationship

• An Account Manager is an integrator role that manages the relationship

between the IS organization and a particular business unit

MEASURING OVERALL IS PERFORMANCE

IS MANAGEMENT IN GLOBAL ORGANIZATIONS

• Many large corporations operate globally

• Key management issue is extent to which IT is standardized

• Key region and country factors that impact global IT management:

- Country Telecommunications Infrastructure

- Legal and Security Considerations

- Language and Culture

- Time Zone Differences

MANAGING IT OUTSOURCING

• Potential Outsourcing Benefits

- Reduced costs

- Obtaining expertise from large service provider

- Ability to expand geographically

- Flexibility to expand or reduce IT resources

- Access to new technology

MANAGING IT OUTSOURCING

• Common Characteristics of IT Service Outsourcing

- Cost savings from leveraging different labor markets

- Long-term contracts, which are common for outsourcing computer & communications, can be very complex and require

months of preparation prior to vendor selection and contract negotiation

- Outsourced IT services typically difficult to bring back in-house

Near-shore: Offshore outsourcing to a geographic location that is

close to the “shores” of the client (which can take advantage of overlapping time zones)

Best-shore: This term refers to the fact that there are multiple options

for firms with multiple geographic sites, as they may have options to choose among their own global locations and select the “best shore” for

a particular IT activity based on labor markets (costs and expertise), time zones (overlapping versus those that take advantage of different time zones), etc

MANAGING OFFSHORE IT OUTSOURCING

• Some key issues to consider for sourcing alternatives:

- Support of business units that will be affected

- Impact due to differences in business practices and norms

of personnel with different national backgrounds

- Need for training programs due to national, cultural,

language, and location differences

- Need for face-to-face communications and/or

appropriateness of available collaboration tools for a specific IT activity