Enterprise and Global Management of Information Technology wan@unisza.edu.my MODUL 8 Enterprise and Global Management of Information Technology TKF 2263 Aplikasi Komputer II

wan@unisza.edu.my Learning Objectives Identify the three components of information technology management Use examples to illustrate how they might be implemented in a business Explain how failures in IT management can be reduced by the involvement of business managers in IT planning and management TKF 2263 Aplikasi Komputer II

wan@unisza.edu.my Learning Objectives Identify several cultural, political, and geo-economic challenges that confront managers in the management of global information technologies Explain how the trend toward a transnational business strategy by international business organizations affects global business/IT strategy TKF 2263 Aplikasi Komputer II

wan@unisza.edu.my Learning Objectives Identify several considerations that affect the choice of IT applications, IT platforms, data access policies, and systems development methods by a global business enterprise Understand the fundamental concepts of outsourcing and offshoring, as well as the primary reasons for selecting such an approach to IS/IT management TKF 2263 Aplikasi Komputer II

wan@unisza.edu.my Business and IT As the 21st century unfolds, many companies are transforming themselves into global businesses via major investments in… Global e-business E-commerce Other IT initiatives Business managers and professionals must know how to manage this vital organizational function TKF 2263 Aplikasi Komputer II

Case 1: Toyota, Procter & Gamble, Hess Corp… wan@unisza.edu.my Case 1: Toyota, Procter & Gamble, Hess Corp… The role of a CIO has become very strategic Tomorrow’s CIOs will be even more involved in strategic thinking and influential Skills needed to be a CIO have changed from being a technologist to business strategist Developing and mentoring successors is a key responsibility of IT leaders in an environment that includes the changing role of the CIO and a shortage of qualified managers TKF 2263 Aplikasi Komputer II

wan@unisza.edu.my Case Study Questions Several comments in the case note that CIOs are in a unique position for companywide leadership, extending beyond their primary technological concerns Why do you think this is the case? How are CIOs different in this regard from other chief officers, for example, in finance, HR, or marketing? TKF 2263 Aplikasi Komputer II

wan@unisza.edu.my Case Study Questions After reading the case, what do you think are the most important competencies for the successful CIO of tomorrow? How do you rate yourself in those? Had you considered the importance of these skills and abilities before? TKF 2263 Aplikasi Komputer II

wan@unisza.edu.my Case Study Questions How can CIOs prepare their successors for an uncertain future that will most likely require skills different from those possessed by successful CIOs today? Which key competencies are enduring, and which are a function of the current technological environment? How can CIOs prepare for the latter? TKF 2263 Aplikasi Komputer II

Components of IT Management wan@unisza.edu.my Components of IT Management Managing the joint development and implementation of business and IT strategies Use IT to support strategic business priorities Align IT with strategic business goals Managing the development and implementation of new business/IT applications and technologies Information systems development Managing the IT organization and infrastructure Hardware, software, databases, networks, and other resources TKF 2263 Aplikasi Komputer II

The Business/IT Planning Process wan@unisza.edu.my The Business/IT Planning Process TKF 2263 Aplikasi Komputer II

The Business/IT Planning Process wan@unisza.edu.my The Business/IT Planning Process Major components of business/IT planning Strategic development Resource management Technology architecture TKF 2263 Aplikasi Komputer II

Information Technology Architecture wan@unisza.edu.my Information Technology Architecture The IT architecture is a conceptual design that includes these major components Technology platform Data resources Application architecture IT organization TKF 2263 Aplikasi Komputer II

Managing the IT Function wan@unisza.edu.my Managing the IT Function Three things recently happened The Internet boom inspired businesses to connect their networks Companies have essential applications on their intranets, without which they cannot function It became apparent that maintaining PCs on a network is very, very expensive Created an urgent need for centralization TKF 2263 Aplikasi Komputer II

Organizing IT Early Years wan@unisza.edu.my Organizing IT Early Years Centralization of computing with large mainframes Next Downsizing and moving back to decentralization Current Centralized control over the mgmt of IT Serving the strategic needs of business units Hybrid of centralized and decentralized components TKF 2263 Aplikasi Komputer II

Avnet Marshall Organizational Components wan@unisza.edu.my Avnet Marshall Organizational Components TKF 2263 Aplikasi Komputer II

Managing Application Development wan@unisza.edu.my Managing Application Development Systems analysis & design System maintenance Prototyping Application development involves… Applications programming Quality assurance Project management TKF 2263 Aplikasi Komputer II

Managing IS Operations wan@unisza.edu.my Managing IS Operations IS operations management Concerned with the use of hardware, software, network, and personnel resources in data centers Operational activities that must be managed Computer system operations Network management Production control Production support TKF 2263 Aplikasi Komputer II

System Performance Monitors wan@unisza.edu.my System Performance Monitors Software packages that… Optimize computer system performance Monitor computer job processing Facilitate capacity planning and control TKF 2263 Aplikasi Komputer II

Features of System Performance Monitors wan@unisza.edu.my Features of System Performance Monitors Chargeback Systems Allocates costs to users based on the information service rendered Process Control Capabilities Systems that monitor and automatically control computer operations at large data centers TKF 2263 Aplikasi Komputer II

wan@unisza.edu.my IT Staff Planning Recruiting, training, and retaining qualified IS personnel Evaluating employees and rewarding good job performance with salary increases, promotions Setting salary and wage levels Designing career paths TKF 2263 Aplikasi Komputer II

IT Executives Oversees all uses of IT Chief Information Officer (CIO) wan@unisza.edu.my IT Executives Chief Information Officer (CIO) Oversees all uses of IT Aligns IT with strategic business goals In charge of all IT planning/deployment Chief Technology Officer (CTO) Manages the IT platform Second in command TKF 2263 Aplikasi Komputer II

Chief Security Officer wan@unisza.edu.my Other IT Positions E-commerce architect Technical team leader Systems analyst Chief Security Officer TKF 2263 Aplikasi Komputer II

Technology Management wan@unisza.edu.my Technology Management All IT technologies must be used as a technology platform for integrating business applications Both internally or externally focused Includes Internet, intranets, electronic commerce, collaboration technologies, CRM software, enterprise resource planning, and supply chain management Often the primary responsibility of a chief technology officer TKF 2263 Aplikasi Komputer II

Managing User Services wan@unisza.edu.my Managing User Services Business units that support and manage end-user and workgroup computing Can be done with information centers staffed with user liaison specialists or with Web-enabled intranet help desks Key roles Troubleshooting problems Gathering and communicating information Coordinating educational efforts Helping with end-user application development TKF 2263 Aplikasi Komputer II

wan@unisza.edu.my Outsourcing The purchase of goods or services from third-party partners that were previously provided internally TKF 2263 Aplikasi Komputer II

Why Companies Outsource wan@unisza.edu.my Why Companies Outsource TKF 2263 Aplikasi Komputer II

Growth of services offshoring linked to… wan@unisza.edu.my Offshoring Relocation of an organization’s business processes to a lower-cost location This location is typically overseas Can be either production or service Growth of services offshoring linked to… Digitization of many services Availability of large amounts of reliable and affordable communication infrastructure TKF 2263 Aplikasi Komputer II

Failures in IT Management wan@unisza.edu.my Failures in IT Management IT not used effectively Computerizing traditional business processes instead of developing innovative e-business processes Poor response times Frequent downtime IT not used efficiently Poorly managed application development TKF 2263 Aplikasi Komputer II

Management Involvement & Governance wan@unisza.edu.my Management Involvement & Governance Managerial and end user involvement Key ingredient to high-quality information system performance Optimizes business value of IT Governance structures Steering committees, executive councils Encourages active participation in planning and controlling business uses of IT Helps avoid post-development problems TKF 2263 Aplikasi Komputer II

Management’s Involvement in IT wan@unisza.edu.my Management’s Involvement in IT TKF 2263 Aplikasi Komputer II

IT Governance Approaches wan@unisza.edu.my IT Governance Approaches Control Objectives for Information and Technology (COBIT) Framework for IT management Set of generally accepted measures, indicators, processes, and best practices Covers four domains Planning and organization Acquisition and implementation Delivery and support Monitoring TKF 2263 Aplikasi Komputer II

wan@unisza.edu.my COBIT in Action TKF 2263 Aplikasi Komputer II

The International Dimension wan@unisza.edu.my The International Dimension Companies around the world are developing new models to operate competitively in a digital economy These models are structured, yet agile, global, yet local Concentrates on maximizing risk-adjusted return from both knowledge and technology assets TKF 2263 Aplikasi Komputer II

Case 2: Reinsurance Group of America, Fronterra wan@unisza.edu.my Case 2: Reinsurance Group of America, Fronterra Consistency across the different business functions, countries, languages, and processes in worldwide implementations is one of the most important challenges faced by global organizations today Reinsurance Group of America had to develop a single system to manage reinsurance business processes for numerous offices around the world Staffs spoke different languages, in different time zones, and some were set in their way of managing the business Developing this system resulted in ROI of 15%, which was better than expected TKF 2263 Aplikasi Komputer II

wan@unisza.edu.my Case Study Questions What is the business value of these global system developments for the companies mentioned in the case? How did they achieve these benefits? What were the major obstacles they had to overcome? What are the advantages and disadvantages of a full-blown versus a phased approach for system implementations in general, and global ones in particular? How do you decide which road to take? TKF 2263 Aplikasi Komputer II

wan@unisza.edu.my Case Study Questions How important is that all units in global organization speak the same business language, and use the same functions and business processes? How do you balance the competing needs for flexibility and consistency across operations? TKF 2263 Aplikasi Komputer II

Global IT Management Dimensions wan@unisza.edu.my Global IT Management Dimensions TKF 2263 Aplikasi Komputer II

Global IT Management Challenges wan@unisza.edu.my Global IT Management Challenges Political Challenges Many countries regulate or prohibit the transfer of data across their national boundaries Others severely restrict, tax, or prohibit imports of hardware and software Some have local content laws that specify the portion of the value of a product that must be added in that country if it is to be sold there Others require a business to spend part of the revenue they earn in a country in that nation’s economy TKF 2263 Aplikasi Komputer II

Global IT Management Challenges wan@unisza.edu.my Global IT Management Challenges Geo-economic Challenges Physical distances still a major problem Takes too long to fly in specialists Hard to communicate in real time across time zones Poor telephone and telecommunications services May be hard to find skilled local workers Differences in the cost of living and labor costs TKF 2263 Aplikasi Komputer II

Global IT Management Challenges wan@unisza.edu.my Global IT Management Challenges Cultural Challenges Language and cultural interests Religions and customs Political philosophies Cultural training needed before assignments Work styles and business relationships TKF 2263 Aplikasi Komputer II

Transnational Strategies wan@unisza.edu.my Transnational Strategies Companies are moving toward a transnational strategy Business depends heavily on information systems and Internet technologies to help integrate global business activities This requires an integrated and cooperative worldwide IT platform TKF 2263 Aplikasi Komputer II

Transnational Business/IT Strategies wan@unisza.edu.my Transnational Business/IT Strategies TKF 2263 Aplikasi Komputer II

Global Business Drivers wan@unisza.edu.my Global Business Drivers Business requirements caused by the nature of the industry and its competitive or environmental forces Examples of global drivers Customers Products Operations Resources Collaboration TKF 2263 Aplikasi Komputer II

Hardware Difficulties wan@unisza.edu.my Global IT Platforms Hardware Difficulties High prices High tariffs Import restrictions Long lead times for government approvals No local service or spare parts Lack of “localized” documentation TKF 2263 Aplikasi Komputer II

Software Difficulties wan@unisza.edu.my Global IT Platforms Software Difficulties Packages developed in Europe may be incompatible with American or Asian versions Software publisher may refuse to supply markets that disregard software licensing and copyright agreements TKF 2263 Aplikasi Komputer II

International Data Communications Issues wan@unisza.edu.my International Data Communications Issues TKF 2263 Aplikasi Komputer II

The Internet as a Global IT Platform wan@unisza.edu.my The Internet as a Global IT Platform The Internet An interconnected matrix that reaches tens of millions of users in over 100 countries Business environment free of traditional boundaries and limits Without incurring massive cost outlays for telecommunications, companies can… Expand markets Reduce communications and distribution costs Improve profit margins TKF 2263 Aplikasi Komputer II

Key Questions for Global Websites wan@unisza.edu.my Key Questions for Global Websites Will you have to develop a new navigational logic to accommodate cultural preferences? What content will you translate, and what content will you create from scratch to address regional competitors or products that differ from those in the U.S.? Should your multilingual effort be an adjunct to your main site, or will you make it a separate site, perhaps with a country-specific domain? TKF 2263 Aplikasi Komputer II

Key Questions for Global Websites wan@unisza.edu.my Key Questions for Global Websites What kinds of traditional and new media advertising will you have to do in each country to draw traffic to your site? Will your site get so many hits that you’ll need to set up a server in a local country? What are the legal ramifications of having your website targeted at a particular country, such as laws on competitive behavior, treatment of children, or privacy? TKF 2263 Aplikasi Komputer II

Global Data Access Issues wan@unisza.edu.my Global Data Access Issues Transborder Data Flows may be seen as violating A nation’s sovereignty because it avoids customs duties and regulations Laws protecting the local IT industry from competition Laws protecting local jobs Privacy legislation TKF 2263 Aplikasi Komputer II

U.S.-E.U. Data Privacy Requirements wan@unisza.edu.my U.S.-E.U. Data Privacy Requirements Key Data Privacy Provisions Notice of purpose and use of data collected Ability to opt out of third-party distribution of data Access for consumers to their information Adequate security, data integrity, and enforcement provisions TKF 2263 Aplikasi Komputer II

Internet Access in Restrictive Countries wan@unisza.edu.my Internet Access in Restrictive Countries The struggle between Internet censorship and openness at the national level relates to Controlling the conduits Filtering the flows Punishing the purveyors Most of the world has decided that restricting Internet access is not a viable policy Restricting access also hurts a country’s opportunities for economic growth and prosperity TKF 2263 Aplikasi Komputer II

Global Government Internet Restrictions wan@unisza.edu.my Global Government Internet Restrictions High Government Access Fees Kazakhstan, Kyrgyzstan Government Monitored Access China, Iran, Saudi Arabia, Azerbaijan, Uzbekistan Government Filtered Access Belarus, Cuba, Iraq, Tunisia, Sierra Leone, Tajikistan, Turkmenistan, Vietnam No Public Access Allowed Burma, Libya, North Korea TKF 2263 Aplikasi Komputer II

Global Systems Development wan@unisza.edu.my Global Systems Development Key Development Issues Local versus global system requirements Getting agreement on system features Global standardization of data definitions Disturbances caused by systems implementation and maintenance activities TKF 2263 Aplikasi Komputer II

Global Systems Development wan@unisza.edu.my Global Systems Development Key development strategies Transform an application used by the home office or a subsidiary into a global application Set up a multinational development team Parallel development Centers of excellence Offshore development TKF 2263 Aplikasi Komputer II

Internet-Enabled IT Development wan@unisza.edu.my Internet-Enabled IT Development TKF 2263 Aplikasi Komputer II

wan@unisza.edu.my Case 3: IBM Corporation Only services can provide growth on the scale that IBM needs to make shareholders happy To combat cheaper offshore companies, IBM is giving away technology In theory, giving away software, patents, and ideas will Help the entire industry grow faster Open new frontiers Create opportunities for IBM to sell high-value products and services TKF 2263 Aplikasi Komputer II

Case 4: IBM Corporation To cut costs, IBM is also offshoring wan@unisza.edu.my Case 4: IBM Corporation To cut costs, IBM is also offshoring India accounts for the largest number of IBMers outside the United States By the end of next year, IBM Services head count in India will top 52,000 More than one-fourth of all services personnel About one-sixth of IBMers worldwide TKF 2263 Aplikasi Komputer II

wan@unisza.edu.my Case Study Questions Do you agree with IBM’s employment response to competition from software development contractors in India like Wipro that are expanding into IT consulting services? Will IBM’s plan to give away some of its IT assets and intellectual property and increase support of opensource software products be a successful growth strategy in the “brutally competitive marketplace” in which it operates? TKF 2263 Aplikasi Komputer II

wan@unisza.edu.my Case Study Questions Do you agree with IBM researchers’ assumption that IT will remain “hard to use, expensive, and labor-intensive, with customers continuing to need help solving business problems” for along time to come? Should IBM bet its business on that assumption? TKF 2263 Aplikasi Komputer II