Strategic Management of IS/IT: Organization and Resources Chapter 8 Strategic Management of IS/IT: Organization and Resources

Agenda Requirements of strategic management Roles of the IT function IS/IT organization approaches Choice of IS/IT organization IS/IT organization strategies

Requirements of Strategic Management IS/IT strategies, policies and plans reflects business objectives and strategies Identify and explore potential business advantages from IS/IT Ensure IS/IT strategies are viable in terms of business risks Establish resources and priorities Match IS/IT management and corporate culture Monitor business critical IS/IT activities Balance between centralization and decentralization

Roles of the IT Function – I by Zmud User services Delivery services Systems development Support center Information center Architecture management Planning Technology diffusion Data management

Roles of the IT Function – II by Zmud Technology development Research & development General Administration Quality assurance

IS/IT Organization Approaches Total centralized (monopolistic) Total decentralized to business functions Geographically placed data centers and resources Business unit control Users Activity Type of resource – network, computers, software, data, etc.

Choice of IS/IT Organization Stage of application portfolio maturity Geography of the enterprise Synergy benefits of business services, products, & information Business diversity & rate of change Competitive pressures Economics of resource, obtaining and deploying skills Enterprise structure & management culture

IS/IT organization strategies IT (centralized) or user departments (decentralized) Mix Chief information officer or steering committee

IT or User Departments – I by McFarlan and KcKenney IT department Integration Database Feasibility and cost/benefit analysis Litter innovation IS organization based on technical specialist not user need High maintenance (80%) No senior management Use frustration with secret growth of user computing

IT or User Departments – II by McFarlan and KcKenney Short term problem solving Incompatible databases & systems Lack of quality control Hidden maintenance overhead Duplication problems Little cost/benefit analysis Lack of skill technical staff

Mix by La Belle and Nyce Business unit responsibility Central IT group Application architecture, development, and operation Central IT group Telecommunication Hardware & software architecture Information architecture Risk management and security Shared services and utilities Human resources

Chief Information Officer or Steering Committee - I Chief information officer (CIO) Setting IS/IT policy & strategy Goal oriented with business, IS/IT, & communication competency

Chief Information Officer or Steering Committee - II Executive steering group IT planning group Service management group Technical management group Business IS planning group Application management group

Executive Steering Group Functions Aligning business & IS/IT strategies Establishing IS/IT priority & IS/IT resources Ensuring strategic applications achieve their objectives Establishing organizational responsibilities and relationships

IT Planning Group Functions Interpreting IT trends and development for organizational business Allocating resources according priority Monitoring IS/IT performance Managing IT, specialists, & technical risks

Service Management Group Functions Meeting business needs with the optimum means Monitoring performance against budget/service level Controlling quality Satisfying evolving demand

Technology Management Group Functions Assessing technology against known and potential needs Planning and managing infrastructure Resolving technical issues/problems Support service group

Business IS Planning Group Functions Identifying business needs Interpreting CSFs Assessing opportunities, threats, & IS implications Prioritizing, planning, & coordinating IS and expenditure Ensuring the delivery of benefits

Application Management Group Functions Identifying special needs, changes, benefits, resources, and costs of applications for investment & priority evaluation Managing developments & usage of IS

Points to Remember Requirements of strategic management Roles of the IT function IS/IT organization approaches Choice of IS/IT organization IS/IT organization strategies

Questions What is a good IT strategic management for an e-business of the banking industry in terms of the organizational structure? What is a good IT strategic management for an e-business of the California State University system in terms of the organizational structure?