1. Managing the Information Technology Resource Jerry N. Luftman
Chapter 1 Introduction
Managing the Information Technology Resource
Jerry N. Luftman
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2. Chapter Outline Evolution of role of IT
Role of IT management versus other business functions
View of IT by IT executives
How to better manage IT resources
Key issues in the management of IT
Importance of successfully managing IT
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3. Primary Purpose
IT is important and necessary for a successful organization
Successful management of IT is necessary for competitive advantage
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4. 3 Strategies for Competitive Advantage
Cost leadership
Competing with lower costs
Product differentiation
Competing with value
Product focus
Competing by restricting one’s market
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5. IT Management Categories
Strategic
Pertinent to long-term attainment of goals and business as a whole
Tactical
Needed to achieve strategic plans and goals to produce changes for success
Operational
Process and actions that must be performed on a day-to-day basis to maintain performance level
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6. Additional Skills of IT Managers
Financial
Human Resource
Relationship Management
Legal
Governance
Marketing
Negotiating
Leadership
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7. John Rockart
“The limited number of areas in which results, if they are satisfactory, will ensure successful competitive performance for the organization. They are the few key areas where things must go right for the business to flourish. If results in these areas are not adequate, the organization’s efforts for the period will be less than desired.”
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8. 3 Primary Computing Eras
Mainframe Computer Era
PC Computing Era
Pervasive Computing
Pervasive means universial
Pervasive computing is an emerging trend associated with embedding microprocessors in day-to-day objects, allowing them to communicate information. It is also known as ubiquitous computing. The terms ubiquitous and pervasive signify "existing everywhere."
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9. © 2004 Managing the Information Technology Resource, Jerry N. Luftman
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10. © 2004 Managing the Information Technology Resource, Jerry N. Luftman
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11. Historical View of IT Initially for government/military use
Businesses used for financial automation
Data Processing was key function
Computers were costly and large in size
Not widely used
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12. Historical View Cost decreased Size decreased
Use of personal computers increased
Business staff and IT staff began to interact
Technology issues increased
Networks, , and Internet became necessity
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13. Role of IT No longer just serves a business
Integral in business strategy
Impacts every area of business
Complexity increases
How does IT function vs. the entire organization
Responsible for the integration of information
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14. Role of IT Today
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15. Enabler of E-Business All aspects of IT are more externally visible
Serve as mediator among various functions
Disintermediation
Reintermediation
Hypermediation
Infomediation
Mediator : go in between
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16. Disintermediation Eliminates the middleman Electronic stock trading
Forces focus on service differentiation
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17. Reintermediation
Use of Internet to reassemble buyers and sellers in new ways
Allows negotiation of prices, warranties, quality, shipping
Example includes merging of banking, insurance, and other financial services
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18. Hypermediation Interactions found via Internet transactions
Complete, seamless, invisible supply chain to customers
Leverages external partners
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19. Infomediation
Allows technology users to manage large amounts of information
Search engines and portals provide for narrowing searches
Data mining technology is critical
IT helps business sift through information for insight and clarity
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20. Change Agent Dynamic Stability
IT supports business in dynamic changes with no change to business processes
Can enable/inhibit incremental and radical changes
Innovation may depend on IT
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21. Enabler of Globalization
Expands business presence beyond borders
IT maintenance of Infrastructure and Technologies
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22. IT/Business Gap IT/Business alignment critical Alignment Enabler
Application of IT in an appropriate and timely manner, in harmony with business goals, strategies, and needs
Enabler
Inhibitor
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23. © 2004 Managing the Information Technology Resource, Jerry N. Luftman
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24. CSC Survey Top Rankings
Information Systems alignment with Corporate Goals ranked 1st or 2nd 9 of 11 years!
Organizing & utilizing data
Connecting to customers, suppliers, and/or partners electronically
Optimizing organizational effectiveness
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25. IT vs. Other Functions Encompasses entire enterprise
Affects all business functions
Extends beyond business boundaries
Affects every level of management
Impact affects entire value chain, including suppliers and customers
Creates synergy between departments
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26. Porter’s Generic Value Chain
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27. Value of IT IT usage has increased three-fold since 1978
Substantial capital expenditures
Cost of doing business
Productivity measurement
Alignment with strategic business goals
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28. Luftman’s 6 Components Communications Maturity
Competency/ Value Measure-ment Maturity
Governance Maturity
Partnership Maturity
Scope and Architecture Maturity
Skills Maturity
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