1. Enterprise and Global Management of Information Technology
MODUL 8
Enterprise and Global Management of Information Technology
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2.
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
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3.
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
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4.
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
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5.
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
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6. Case 1: Toyota, Procter & Gamble, Hess Corp…
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
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7.
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?
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8.
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?
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9.
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?
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10. Components of IT Management
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
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11. The Business/IT Planning Process
The Business/IT Planning Process
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12. The Business/IT Planning Process
The Business/IT Planning Process
Major components of business/IT planning
Strategic development
Resource management
Technology architecture
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13. Information Technology Architecture
Information Technology Architecture
The IT architecture is a conceptual design that includes these major components
Technology platform
Data resources
Application architecture
IT organization
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14. Managing the IT Function
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
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15. Organizing IT Early Years
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
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16. Avnet Marshall Organizational Components
Avnet Marshall Organizational Components
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17. Managing Application Development
Managing Application Development
Systems analysis & design
System maintenance
Prototyping
Application development involves…
Applications programming
Quality assurance
Project management
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18. Managing IS Operations
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
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19. System Performance Monitors
System Performance Monitors
Software packages that…
Optimize computer system performance
Monitor computer job processing
Facilitate capacity planning and control
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20. Features of System Performance Monitors
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
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21.
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
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22. IT Executives Oversees all uses of IT Chief Information Officer (CIO)
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
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23. Chief Security Officer
Other IT Positions
E-commerce architect
Technical team leader
Systems analyst
Chief Security Officer
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24. Technology Management
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
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25. Managing User Services
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
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26.
Outsourcing
The purchase of goods or services from third-party partners that were previously provided internally
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27. Why Companies Outsource
Why Companies Outsource
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28. Growth of services offshoring linked to…
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
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29. Failures in IT Management
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
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30. Management Involvement & Governance
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
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31. Management’s Involvement in IT
Management’s Involvement in IT
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32. IT Governance Approaches
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
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33.
COBIT in Action
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34. The International Dimension
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
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35. Case 2: Reinsurance Group of America, Fronterra
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
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36.
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?
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37.
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?
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38. Global IT Management Dimensions
Global IT Management Dimensions
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39. Global IT Management Challenges
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
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40. Global IT Management Challenges
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
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41. Global IT Management Challenges
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
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42. Transnational Strategies
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
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43. Transnational Business/IT Strategies
Transnational Business/IT Strategies
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44. Global Business Drivers
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
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45. Hardware Difficulties
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
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46. Software Difficulties
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
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47. International Data Communications Issues
International Data Communications Issues
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48. The Internet as a Global IT Platform
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
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49. Key Questions for Global Websites
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?
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50. Key Questions for Global Websites
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?
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51. Global Data Access Issues
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
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52. U.S.-E.U. Data Privacy Requirements
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
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53. Internet Access in Restrictive Countries
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
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54. Global Government Internet Restrictions
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
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55. Global Systems Development
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
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56. Global Systems Development
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
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57. Internet-Enabled IT Development
Internet-Enabled IT Development
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58.
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
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59. Case 4: IBM Corporation To cut costs, IBM is also offshoring
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
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60.
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?
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61.
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?
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