1. Copyright © 2014 Pearson Canada Inc. 11-1 Copyright © 2014 Pearson Canada Inc. Chapter 11 Structure, Governance, and Ethics Part 3: IS and Competitive Advantage

2. Copyright © 2014 Pearson Canada Inc. 11-2 Running Case When Akbar started his company, there were very few competitors in his industry Now, he has to think how to respond to these new competitive challenges Akbar could respond to competition by becoming the low-cost solution for his clients or by differentiating the services that his company supplies Starting his business, he was responding to opportunities, now he has to chase them

3. Copyright © 2014 Pearson Canada Inc. 11-3 Study Questions 1. How is the IT department organized? 2. What jobs exist in IT services? 3. What is information technology architecture? 4. What is alignment, why is it important and why is it difficult? 5. What is information systems governance? 6. What is an information systems audit? 7. What is information systems ethics? 8. What is green IT and why should I care about it?

4. Copyright © 2014 Pearson Canada Inc. 11-4 How is the IT Department Organized? Most organizations rely on information technology (IT) services All these services - email systems, accounting applications, desktop computers, and mobile devices - used in an organization require some form of technical support The department of people who support this is often referred to as “IT Services” or “Information Systems Services”

5. Copyright © 2014 Pearson Canada Inc. 11-5 Typical Top-level Reporting Relationships

6. Copyright © 2014 Pearson Canada Inc. 11-6 What About the Web? The Web has had a significant impact on the organization of IT departments Traditionally, IT department was responsible for designing and maintain a website This task now belongs to marketing department to keep up with branding and control of content while IT provides technical support for the website Creating well-designed company web pages requires knowledge of branding and marketing

7. Copyright © 2014 Pearson Canada Inc. 11-7 What Jobs exists in IT Services? IT industries have a wide range of interesting and well-paying jobs Some think that the industry consists only of programmers and computer technicians who have great technical skills The reality is that most jobs that are in the highest demand in the IT industry require a mix of interpersonal and technical skills The industry needs people who can bridge the knowledge gap between computer technicians and business system users

8. Copyright © 2014 Pearson Canada Inc. 11-8 Job Positions in the Information Systems Industry

9. Copyright © 2014 Pearson Canada Inc. 11-9 What Jobs exists in IT Services? For most technical positions, knowledge of business specialty increases marketability High-paying jobs require communication, leadership, and business skills For students, a dual major can be an excellent choice to open up opportunities

10. Copyright © 2014 Pearson Canada Inc. 11-10 What is Information Technology Architecture? IT architecture is the basic framework for all the computers, systems, and information management that support organizational services Enterprise architect creates a blueprint of an organization’s information systems and the management of these systems organizational objectives, business processes, databases, information flows, operating systems, applications and software, and supporting technology

11. Copyright © 2014 Pearson Canada Inc. 11-11 Organizational Strategy and Information Systems

12. Copyright © 2014 Pearson Canada Inc. 11-12 What is Alignment, Why is it Important, and Why is it Difficult? Process of matching organizational objectives with IT architecture Ongoing -- fitting IT architecture to business objectives is continuous challenge Measured as the degree to which the IT department’s missions, objectives, and plans overlapped with the overall business missions, objectives, and plans Communication between business and IT executives is the most important indicator of alignment

13. Copyright © 2014 Pearson Canada Inc. 11-13 What is Information Systems Governance? Goal of IS governance is to improve the benefits of an organization’s IT investment over time Reporting structures Review processes Improve quality Reduce service costs and delivery time Reduce IT risks Better support business processes

14. Copyright © 2014 Pearson Canada Inc. 11-14 Creating Benefits from IT Governance

15. Copyright © 2014 Pearson Canada Inc. 11-15 What is an Information Systems Audit? Examination and verification of a company’s information resources that are used to collect, store, process, and retrieve information – including organization’s IS policies and procedures Many firms offer IS audit services Control Objectives for Information and Related Technology (COBIT) is a framework of best practices designed for IT management

16. Copyright © 2014 Pearson Canada Inc. 11-16 Why Should You Care about IS Governance? Increased need to report and disclose IS operational information will require employees at all levels of an organization to become more familiar with the issues facing information technology management Senior business managers are required to make assertions about the controls on IS that will expose them to both financial and criminal penalties

17. Copyright © 2014 Pearson Canada Inc. 11-17 What is Information Systems Ethics? Information systems ethics is about people involved with the system, not hardware or software IS ethics is about understanding our own behaviour—the way we think and act in situations where our choices affect others Ethical principles United Nations Declaration of Human Rights Canada’s Charter of Rights and Freedoms Association of Computing Machinery’s code of ethics

18. Copyright © 2014 Pearson Canada Inc. 11-18 MIS in Use Sarbanes-Oxley: Boon or Bane? Goal to strengthen and upgrade financial reporting, and thus maintain and improve trust in public companies’ financial reports Large companies expect to divert more than 15 percent of their IS budgets to Sarbanes- Oxley compliance Sarbanes-Oxley Act will provide full employment for internal and IT auditors

19. Copyright © 2014 Pearson Canada Inc. 11-19 MIS in Use Questions 1. In your opinion, will millions, perhaps billions of dollars be wasted in unnecessary compliance with Sarbanes-Oxley and the Budget Measures Act? 2. In the long run, will these acts hamper North American corporations that must compete internationally against corporations that are not burdened by them? Will they ultimately work to reduce investor choices? 3. Given the requirements of the Sarbanes-Oxley Act, do you believe that a privately owned company like DSI would have incentives to choose to become a public company?

20. Copyright © 2014 Pearson Canada Inc. 11-20 What Is Green IT and Why Should I care? Green IT, or green computing - using IT resources to better support the triple bottom line for organizations The triple bottom line - a concept that expands the notion of traditional financial reports, which are based solely on financial performance, to take into account ecological and social performance Primary goals to improve energy efficiency, promote recyclability, and reduce the use of materials that are hazardous to the environment

21. Copyright © 2014 Pearson Canada Inc. 11-21 What Is Green IT and Why Should I care?, continued Green IT considers the effects of choices on people and the environment ENERGY STAR program - is an international government/industry partnership to produce equipment that meets high-energy efficiency specifications or promotes the use of such equipment E-cycling or the recycling of electronic computing devices

22. Copyright © 2014 Pearson Canada Inc. 11-22 What do YOU think? The Ethics of Misdirected Information Situation A: Buying a condo, a competitive bidding, and overhearing a conversation Situation B: Receiving information in an email Situation C: Selling Computer software and receiving internal mail on price negotiation Situation D: Receiving sensitive email from a friend Situation E: A network administrator receiving confidential email

23. Copyright © 2014 Pearson Canada Inc. 11-23 What do YOU think? 1. Answer the questions in situations A and B. Do your answers differ? Does the medium by which the information is obtained make a difference? Is it easier to avoid reading an email than it is to avoid hearing a conversation? If so, does that difference matter? 2. Answer the questions in situations B and C. Do your answers differ? In situation B, the information is for your personal gain; in C, the information is for both your personal and your organization’s gain. Does this difference matter? How do you respond when asked if you have read the email? 3. Answer the questions in situations C and D. Do your answers differ? Would you lie in one case and not in the other? Why or why not?

24. Copyright © 2014 Pearson Canada Inc. 11-24 What do YOU think? 4 Answer the question in situation E. What is the essential difference between situations A through D and situation E? Suppose you had to justify your behaviour in situation E. How would you argue? Do you believe your own argument? 5 In situations A through D, if you access the information, you have done nothing illegal. You were the passive recipient. Even in situation E, although you undoubtedly violated your company’s employment policies, you most likely did not break the law. So for this discussion, assume that all these actions are legal. a. What is the difference between legal and ethical? Look up both terms in a dictionary, and explain how they differ.

25. Copyright © 2014 Pearson Canada Inc. 11-25 What do YOU think? b. Make the argument that business is inherently competitive, and that if something is legal, then it is acceptable to do it if it helps to further your goals. c. Make the argument that it is never appropriate to do something unethical. 6Summarize your beliefs about proper conduct when you receive misdirected information.