1. Enterprise and Global Management of Information Technology
Chapter 12
Enterprise and Global Management of Information Technology

2. Learning Objectives
Identify ways that information technology has affected the job of managers.
Identify the seven major dimensions of a networked organization and explain how they can affect the success of a business.

3. Learning Objectives (continued)
Identify each of the three components of information technology management and use examples to show how they might be implemented in a business.
Explain how failures in IT management can be reduced by the involvement of business managers in IS planning and management.

4. Learning Objectives (continued)
Identify cultural, political, and geoeconomic challenges that confront managers in the management of global information technologies.
Explain the effect on global e-business strategy of the trend toward a transnational business strategy by international business organizations.

5. Learning Objectives (continued)
Identify considerations that affect the choice of IT applications, IT platforms, data access policies, and systems development methods by a global business enterprise.

6. Managing Information Technology
Section I
Managing Information Technology

7. Business and IT
As companies are transformed into global e-businesses and players in global e-commerce, it is vital for business managers and professionals to understand how to manage this vital function.

8. The Impact of IT on Managers
A major force for precipitating or enabling organizational and managerial change
Enables innovative changes in managerial decision making, organizational structures, and managerial work activities

9. The Impact of IT on Organizations
Key dimensions of the networked enterprise
Organizational structure
Leadership and governance
People and culture
Coherence
Knowledge
Alliances

10. Managing Information Technology
Three major components
Managing the joint development and implementation of e-business and IT strategies
Managing the development of e-business applications and the research & implementation of new IT

11. Managing Information Technology (continued)
Three major components (continued)
Managing the IT processes, professionals, & subunits with the IT organization & IS function

12. Managing the IS Function
Organizing IT
Centralization
Decentralization
Latest trend, hybrid

13. Managing the IS Function (continued)
Managing Application Development
Involves managing activities such as
systems analysis and design
prototyping
applications programming
project management
quality assurance
systems maintenance

14. Managing the IS Function (continued)
Managing IS Operations
Managing the use of hardware, software, network, and personnel resources in data centers/computer centers within an organization

15. Managing the IS Function (continued)
Managing IS operations (continued)
Operational activities requiring management
Computer systems operations
Network management
Production control
Production support

16. Managing the IS Function (continued)
Managing IS Operations (continued)
System Performance Monitors
Monitor processing of computer jobs
Helps develop a planned schedule
Produce detailed stats for planning and control of computing capacity
Chargeback systems
Process control

17. Managing the IS Function (continued)
Human Resource Management of IT
Recruit qualified personnel
Develop, organize, and direct the capabilities of existing personnel
Train employees
Design career paths and set salary and wage levels

18. Managing the IS Function (continued)
The CIO and Other IT Executives
Chief Information Officer (CIO)
Oversees all use of IT in many companies.
Brings the IT function into alignment with strategic business goals
Concentrates on business/IT planning and strategy
Helps develop strategic uses of IT in e-business and e-commerce

19. Managing the IS Function (continued)
Technology Management
All IT must be managed as a technology platform for integrated e-business and e-commerce systems
May assign a Chief Technology Officer (CTO)
In charge of all IT planning and deployment

20. Managing the IS Function (continued)
Managing User Services
Functions to support and manage end user and workgroup computing
Provides both opportunities and problems for business unit managers
Help desks
Establish and enforce policies

21. Failures in IT Management
IT is not being used effectively by companies that use IT primarily to computerize traditional business processes, instead of using it for innovative e-business processes
IT is not being used efficiently by IS that provide poor response times and frequent down times or when application development projects are not managed properly

22. Failures in IT Management (continued)
Management Involvement and Governance
Senior management needs to be involved in critical business/IT decisions to optimize the business value and performance of the IT function.
Requires development of governance structures that encourage active participation in planning and controlling the business uses of IT.

23. Failures in IT Management (continued)
Helps avoid IS performance problems
Helps improve the strategic business value of IT

24. Section II
Managing Global IT

25. The International Dimension
A vital part of managing an e-business enterprise in the internetworked global economies and markets of today.

26. Global IT Management

27. Cultural, Political, and Geoeconomic Challenges
Cultural challenges
Differences in languages
Cultural interests
Religions
Customs
Social attitudes
Political philosophies

28. Cultural, Political, and Geoeconomic Challenges (continued)
Political challenges
Rules regulating or prohibiting transfer of data across their national boundaries
Severe restrictions, taxes, or prohibitions against imports of hardware and software
Local content laws
Reciprocal trade agreements

29. Cultural, Political, and Geoeconomic Challenges (continued)
The effects of geography on the economic realities of international business activities
Distance
Real-time communication
Lack of good-quality telephone and telecommunications service
Lack of job skills
Cost of living and labor costs

30. Global e-Business Strategies
Moving away from
Autonomous foreign subsidiaries
Autonomous foreign subsidiaries, dependent on headquarters for new processes, products, and ideas
Close management of worldwide operations by headquarters

31. Global e-Business Strategies (continued)
Moving toward
Reliance on information systems and Internet technologies to help integrate global business activities
An integrated, cooperative worldwide hardware, software, and Internet-based architecture for IT platforms

32. Global e-Business Applications
IT applications depend on a variety of global business drivers, caused by the nature of the industry and its competitive or environmental forces
Global customers
Global products
Global operations
Global resources
Global collaboration

33. Global IT Platforms The technology infrastructure Technically complex
Major political and cultural implications
Challenges
Managing international data communications networks
Network management issues
Regulatory issues
Technology issues
Country-oriented issues

34. Global IT Platforms (continued)
The Internet as a Global IT Platform
Companies can
Expand markets
Reduce communications and distribution costs
Improve their profit margins
Low cost interactive channel for communications and data exchange

35. Global Data Access Issues
Transborder data flows (TDF)
Data flow across international borders over telecommunications networks of global information systems

36. Global Data Access Issues (continued)
Many countries view TDF as violating their national sovereignty
Others, as violating their laws to protect the local IT industry or to protect local jobs
May view TDF as a violation of their privacy legislation

37. Global Data Access Issues (continued)
Internet Access Issues
High government access fees
Government monitored access
Government filtered access
No public access allowed

38. Global Systems Development
Challenges
Conflicts over local versus global system requirements
Difficulties agreeing on common system features
Disturbances caused by systems implementation and maintenance activities

39. Global Systems Development (continued)
Challenges (continued)
Trade-offs between developing one system that can run on multiple computer and operating system platforms, or letting each local site customize the software for its own platform
Global standardization of data definitions

40. Global Systems Development (continued)
Systems Development Strategies
Transforming an application used by the home office into a global application
Setting up a multinational development team to ensure the system design meets the needs of local sites as well as headquarters
Parallel development
Centers of excellence

41. Discussion Questions
What has been the impact of e-business technologies on the work relationships, activities, and resources of managers?
What can business unit managers do about performance problems in the use of information technology and the development and operation of information systems in their business units?

42. Discussion Questions (continued)
How are Internet technologies affecting the structure and work roles of modern organizations?
Will middle management wither away?
Will companies consist primarily of self-directed project teams of knowledge workers?

43. Discussion Questions (continued)
Should the IS function in a business be centralized or decentralized? What recent developments support your answer?
How will the Internet, intranets, and extranets affect each of the components of global information technology management?

44. Discussion Questions (continued)
How might cultural, political, or geoeconomic challenges affect a global company’s use of the Internet?
Will the increasing use of the Internet by firms with global e-business operations change their move toward a transnational business strategy?

45. Discussion Questions (continued)
How might the Internet, intranets, and extranets affect the business drivers or requirements responsible for a company’s use of global IT, as shown in the chapter?

46. Real World Case 1 – USG Corp.
Evaluating the ROI of IT Investments
Why do many companies fail to evaluate the return on investment of their IT projects?
Is this good business practice?

47. Real World Case 1 (continued)
What are some of the ROI measurement and incentive practices of the companies in this case that might help other companies evaluate the ROI of their IT investments?

48. Real World Case 1 (continued)
Should business managers be responsible for justifying the ROI of IT investments that will benefit their business units?

49. Real World Case 1 (continued)
Who should be involved in evaluating the ROI of the IT investment proposals of a company’s business units?
Why?

50. Real World Case 2 – Agilent Technologies & Citibank
The Challenges of Consolidating Global IT
Do you agree with Agilent’s global IT consolidation goals and process?

51. Real World Case 2 (continued)
Why did Agilent’s global IT consolidation get such a strong negative response from many business and IT stakeholders?
Could this reaction have been avoided?

52. Real World Case 2 (continued)
What are the business benefits of Citibank’s global IT consolidation project?
How can a single global system still be customized for each country?

53. Real World Case 2 (continued)
What challenges might arise in managing the global IT function at Agilent Technologies from this point on?
How would you meet such challenges?

54. Real World Case 3 – Cisco Systems
Failure in Supply Chain Management
What caused Cisco’s $2.2 billion loss in unneeded inventory?
Could this situation have been avoided?

55. Real World Case 3 (continued)
How is eHub supposed to avoid such losses in the future?
What problems might arise with this new system?

56. Real World Case 3 (continued)
What can be done in the supply chain management process of any company to avoid situations like Cisco’s?

57. Real World Case 4 – Merrill Lynch & Co.
The Business Case for Global IT Consolidation
Why has there been a trend toward centralizing systems among financial services firms?
What are the potential benefits and limitations of this trend?

58. Real World Case 4 (continued)
What are the business benefits of Merrill Lynch’s new global order processing system?
What implementation challenges are involved?

59. Real World Case 4 (continued)
Does the merger of Merrill’s global services division and its IT division make good business sense?

60. Real World Case 5 – Fireman’s Fund, Allmerica Financial, & FMC
The Business Case for IT Outsourcing
What is the business value to Fireman’s Fund and Allmerica of outsourcing their computer operations?
What are some potential limitations of such outsourcing arrangements?

61. Real World Case 5 (continued)
What is FMC’s motivation for its IT outsourcing?
What is the role of an IT organization at companies like those in this case, if much of their IT operations are outsourced?

62. Real World Case 5 (continued)
What are the benefits and potential limitations of offshore and near-shore IT outsourcing arrangements?