1. Organizing and Leading the ICT-function

3. Responsibilities Project management Management of the IT-department
Direction Committee
Steering Committee
Project Group
Working Groups
Management of the IT-department
Centralized organization
Decentralization

4. The Direction Committee
The responsibility of the management :
The strategic plan
Set up a steering committee
Provide facilities

5. The Steering committee
- group of representative top level managers
- meet a few times a year
Responsibilities of the steering committee:
Define Basic Options
programming environment
tools
hardware
Priorities
Budget
Formal acceptance

6. Project group Responsibilities : daily system follow-up
Created by the steering committee for the lifetime of the project
Middle-managers and IT-people meeting frequently
Directed by a Project Leader
Responsibilities :
daily system follow-up
budget follow-up
create ad-hoc working groups if needed
report to steering committee
Project meeting reports are crucial

7. Working groups Ad-hoc working groups Permanent working groups
created to solve a specific problem or to make a specific report
disappear after completion of the job
Permanent working groups
cooperate in all projects
very specialized ( security, ergonomic, ... )

8. Central IT - department
IT-MGR
Finances
secretariat
Function
Analysis
Technical
units
Operations
Quality
assurance
department Software devel Operators
department DBA job-preparation .
telecom librarian
department-n operating system Production ctrl.
Security
Help desk
Training

9. Implications of too much Dominance
IT Dominance
Too much emphasis on DB and system maintenance
New systems must fit old data structures
Service requests require system study and benefit analysis
Standardization dominates
IT designs/constructs everything
Little user control on development
IT specializing in technical aspects, not in user business
IT spends 80% on maintenance
IT thinks they control everything
Users express unhappiness
General management not involved but concerned
Development portfolio under IT control
User Dominance
Too much focus on problem
IT feels out of control
Explosive growth of numbers of systems and related staff
Multiple, often changing suppliers
Lack of standardization and control over data and systems
Hard evidence of benefits nonexistent
Soft evidence not organized
Technical advise of IT not sought or considered irrelevant
Buying services from outside
Networks not designed for corporate needs
Little technology transfer
Growth in duplication of technical staff
Rising communication cost because of duplication
Duplication of effort and input

10. Pressure towards user dominance
Pent-up user demand
large backlog (3-5 years) due to sustained maintenance
first created by conversion to data - program separation
staffing problems due to high turnover
user-developed systems speed up the process of obtaining the needed service
decentralized IT helps educate users, reduces communication problems
rotation between IT and non-IT jobs possible
decentralization facilitates user interface with network
Competitive and service growth in IT market
specific applications marketed to end-user managers
stand-alone local hardware platforms seem attractive to users
seen as operationally simple ( no airco , one operator,...)
no cumbersome project proposal to be written and defended
projects developed under user control

11. Pressure towards user dominance
User control
regaining control over operations is very important for users
development
control over system development priorities
own staff or self selected software houses
mistakes made by local group are more easily accepted
successes are topics of conversation
maintenance
users get control over maintenance priorities
assumption is that maintenance will not be a problem
operations
not dependent on corporate computer scheduling
Fit with organization
Benefits can lead to less data hygiene and less regard for control

12. Pressures toward IT control
Staff professionalism
specialized personnel supporting small divisions
graying of IT , reason for outsourcing : easier with central IT
developing and enforcing standards of IT management
documentation, project management skills
decentralization may drop professionalism
Feasibility study concerns
users can hardly estimate growing processing requirements
user feasibility study focus on first application
more susceptible to acquire products from unstable vendors
not enough concern to export developments to other depts
Financial organization
three users involved in development of decentralized software left company
no documentation
source files lost
Company had spend $8M in PC’s , $15M in development for those PC’s

13. Pressures toward IT control
Corporate Database System
ability to manage and control data flows
data integrity and consistency
abstraction of data
ensure appropriate security
Fit with corporate structure and strategy
centralized IT development’s role clearest in organizations with a centralized planning and operational control
decentralized structure increases cost of central IT
centralized development groups have an explicit marketing activity ( especially for multinationals )
Cost analysis
takes into account the interest of the whole company
software costs 75-85% of total cost for a customized system
decentralization avoids un-understandable bills but saving are false

14. Coordination and location of IT policy IT responsibilities
procedures for comparison of own development and outsourcing
develop standards for project control and documentation
define a process for forcing adherence to these standards
inventory of installed or planned information services
develop standards that establish:
mandatory communication standards
standard programming environments for used platforms
corporate data dictionary
auditing procedures for locally developed systems
identify and provide IT development staff career paths
establish marketing efforts for IT support
prepare checklist with questions concerning HW/SW acquisition
identify and maintain relationships with preferred system suppliers
Education programs for potential users
establish ongoing review of systems to avoid obsolete systems
Checklist - does proposed system meets corporate communication standards ?
- for office support: has upward growth been addressed ?
- is the programming environment appropriate ?
For systems embedded in the daily operations
Problem can be different for DSS

15. Coordination and location of IT policy User responsibilities
To assist in orderly implementation of new IT services, and understand their use, cost and impact
understand the scope of all supporting IT activities, including charge-out
realistically appraise personnel investment for development and operation
ensure comprehensive user input for for all IT projects
nature of service, process of introduction, training
create realistic IT-user interface , consistent with strategic relevance
periodical audit of the adequacy of:
system reliability standards
performance of communication services
security procedures
participate in the development and maintenance of an IT plan

16. Coordination and location of IT policy General management support
Because of the need to link IT to business separation of:
IT operations ( e.g. reporting to head of administration )
IT planning (e.g. IT policy group reporting to head of research)
ensure balance between IT and user inputs via eventual personnel and organizational transfers and via a steering committee
develop comprehensive corporate IT strategy
manage inventory of hardware and software resources , including standard policy with vendors
facilitate development and evolution of standards for operations and development , and make sure that they are applied
facilitate transfer of technology between units
encourage technical experimentation
develop an appropriate planning and control system to link IT firmly to the company goals

17. ICT Management Process

19. Results control architecture 1. Unallocated cost center
stimulates user requests and experimentation
easy for IT to sell services
risk of irresponsible user requests for services
no competitive pressure on IT
keep free of charge but inform users about cost
unallocated cost center
stimulates user requests and experimentation good in phase 1, 2

20. Results control architecture 2. Allocated cost center and charge-out
Stimulates honestety in user requests in later phases
Allocation problems
charges compared with outside offerings : misleading
nothing achieved by 100% charge-out ( create barrier)
unpredictable , unstable charges for users ( machine load )
very complex systems
Desirable characteristics
understood by users ( better on output than on real usage)
perceived as fair
IT maintenance and development charges
estimate costs by IT department
procedure for reestimating
time and material basis
Stimulates honestety in user requests in later phases
Allocation problems
charges compared with outside offerings : misleading
deliberate low entry price
charges on different basis ( maintenance)
nothing achieved by 100% charge-out ( create barrier)
unpredictable , unstable charges for users ( machine load )
very complex systems
- should system be designed to encourage users?
- designed to encourage IT to focus on efficiency?
- favor internal or external IT resources?
- coherent with general control architecture
development charges
- standard charge for input screen
- modem charges
- report and paper (independent from system complexity)
- less than 40 hours directly charged

21. Results control architecture 3. Profit Center
Puts inside service at same footing of an outside one
Pressure on IT for cost efficiency
IT must market itself
Excess capacity encourages sales of services to outside companies
those sales are unprofitable
exited by hard outside dollars
because of shared files, user have not always the option of going outside ( not subject to normal market forces)
leads to higher users costs because of profit figure

22. Results control architecture 4. Transfer Pricing
IT operations priced in end-user transaction terms
IT development and maintenance as fixed-price contract
Cost-based price
lowest cost from user’s perspective
complex , difficult to understand charges
Market-based price
difficult to find comparable products
Dual Transfer Price allows IT and user to be motivated
users are charged items at direct or full cost
IT is allocated revenue based on standard cost of services. IT revenues via selling more services or better cost efficiencies
difference posted to an overhead expense account
Negotiated price difficult in IT because of non-equal partners
IT operations priced in end-user transaction terms
x$ per invoice
Y$ per paycheck

23. Financial reporting process Budget process
must involve senior mgt , IT mgt , user groups
output includes:
establish planned service levels
cost of central operations
amount of internal development and maintenance support
external services
derived from review of :
existing services
approved application development portfolio
user desire for new services
need for appropriate control on purchased IT services
dialog helps generate a user understanding of IT goals

24. Non-financial reporting process
preparation of six-month surveys
identify problems
provide a benchmark to measure progress
to show concern of IT for about user perception of service
Staff reports
turnover trends
sensitivity of leadership
salary levels
workplace climate
Other reports
trends in network uptime
ability to meet schedules on batch jobs
average response times