1. Organizational Structures that Support Strategic Initiatives
Chapter 5
Organizational Structures that Support Strategic Initiatives

2. Learning Outcomes
5.1 Compare the responsibilities of a chief information officer (CIO), chief technology officer (CTO), chief privacy officer (CPO), chief security officer (CSO), and chief knowledge office (CKO)
5.2 Explain the gap between IT people and business people and the primary reason this gap exists
5.3 Define the relationship between information security and ethics

3. Organizational Structures
Organizational employees must work closely together to develop strategic initiatives that create competitive advantages
Ethics and security are two fundamental building blocks that organizations must base their businesses upon

4. IT Roles and Responsibilities
Information technology is a relatively new functional area, having only been around formally for around 40 years
Recent IT-related strategic positions:
Chief Information Officer (CIO)
Chief Technology Officer (CTO)
Chief Security Officer (CSO)
Chief Privacy Officer (CPO)
Chief Knowledge Office (CKO)

5. IT Roles and Responsibilities
Chief Information Officer (CIO) – oversees all uses of IT and ensures the strategic alignment of IT with business goals and objectives
Broad CIO functions include:
Manager – ensuring the delivery of all IT projects, on time and within budget
Leader – ensuring the strategic vision of IT is in line with the strategic vision of the organization
Communicator – building and maintaining strong executive relationships

6. IT Roles and Responsibilities
Average CIO compensation by industry

7. IT Roles and Responsibilities
What concerns CIOs the most

8. IT Roles and Responsibilities
Chief Technology Officer (CTO) – responsible for ensuring the throughput, speed, accuracy, availability, and reliability of IT
Chief Security Officer (CSO) – responsible for ensuring the security of IT systems
Chief Privacy Officer (CPO) – responsible for ensuring the ethical and legal use of information
Chief Knowledge Office (CKO) - responsible for collecting, maintaining, and distributing the organization’s knowledge

9. IT Roles and Responsibilities
Skills pivotal for success in executive IT roles

10. The Gap Between Business Personnel and IT Personnel
Business personnel possess expertise in functional areas such as marketing, accounting, and sales
IT personnel have the technological expertise
This typically causes a communications gap between the business personnel and IT personnel

11. Improving Communications
Business personnel must seek to increase their understanding of IT
IT personnel must seek to increase their understanding of the business
It is the responsibility of the CIO to ensure effective communication between business personnel and IT personnel

12. Organizational Fundamentals – Ethics and Security
Ethics and security are two fundamental building blocks that organizations must base their businesses on to be successful
In recent years, such events as the Enron and Martha Stewart, along with 9/11 have shed new light on the meaning of ethics and security

13. Ethics
Ethics – the principles and standards that guide our behavior toward other people
Privacy is a major ethical issue
Privacy – the right to be left alone when you want to be, to have control over your own personal possessions, and not to be observed without your consent

14. Ethics Issues affected by technology advances Intellectual property
Copyright
Fair use doctrine
Pirated software
Counterfeit software

15. Ethics One of the main ingredients in trust is privacy
Primary reasons privacy issues lost trust for e-business

16. Security
Organizational information is intellectual capital - it must be protected
Information security – the protection of information from accidental or intentional misuse by persons inside or outside an organization
E-business automatically creates tremendous information security risks for organizations

17. Security

18. Security

19. OPENING CASE STUDY QUESTIONS Apple – Merging Technology, Business, and Entertainment
Predict what might have happened to Apple if its top executives had not supported investments in IT
Explain why it would be unethical for Apple to allow its customers to download free music from iTunes
Evaluate the effects on Apple’s business if it failed to secure its customer’s information and it was accidentally posted to an anonymous Web site
Explain why Apple should have a CIO, CTO, CPO, CSO, and CKO

20. CHAPTER FIVE CASE Executive Dilemmas in the Information Age
The vast array of business initiatives from SCM to ERP make it clear the IT is a business strategy and is quickly becoming a survival issue
This case explores several examples of executive IT issues resulting from IT

21. Chapter Five Case Questions
Explain why understanding technology, especially in the areas of security and ethics, is important for a CEO. How do CEO’s actions affect the organizational culture?
Identify why executives in nontechnological industries need to worry about technology and its potential business ramifications
Describe why continuously learning about technology allows an executive to better analyze threats and opportunities
Identify three things that a CTO, CPO, or CSO could do to prevent the above issues

22. BUSINESS DRIVEN TECHNOLOGY
UNIT ONE CLOSING

23. UNIT CLOSING CASE ONE How Levi’s Got its Jeans into Wal-Mart
Explain how Levi Strauss & Co. achieved business success through the use of information, information technology, and people
Using Porter’s Five Force Model analyze Levi Strauss’s buyer power and supplier power. Which of Porter’s Five Forces did Levi Strauss address through the implementation of its updated supply chain management system?
Which of the three generic strategies is the company following?
Evaluate how Levi Strauss can gain business intelligence through the implementation of a customer relationship management system

24. UNIT CLOSING CASE ONE How Levi’s Got its Jeans into Wal-Mart
How can Levi Strauss use efficiency IT metrics and effectiveness IT metrics to improve its business?
David Bergen, Levi CIO, put together a cross-functional team of key managers from IT, finance, and sales to transform the company’s systems to meet Wal-Mart’s requirements. Analyze the relationships between these three business areas and determine why Bergen chose them to be a part of his cross-functional team
Predict what might happen to Wal-Mart’s business if it failed to secure its partner’s information and all sales information for all products was accidentally posted to an anonymous Web site

25. UNIT CLOSING CASE TWO Delta Airlines Plays Catch-Up
What business risks would Delta be taking if it decided not to catch up with industry leaders in using IT to gain a competitive advantage?
What competitive advantages can a company reap it if is the first-mover in introducing an innovative IT system? What are the pros and cons of being a fast follower?
What other industries could potentially benefit from the use of yield management systems?
Explain how American and United used customer information to gain a competitive advantage and how the competitive advantage affected their value chains

26. UNIT CLOSING CASE TWO Delta Airlines Plays Catch-Up
Select two efficiency and effectiveness metrics that Delta can implement to measure the success of its gate and boarding application
Delta’s board of directors questioned the need to spend additional funds on IT when the airline was under great pressure to reduce its costs. Determine a strategy for how the CEO, CIO, CTO, CPO, CSO, and CKO can work together to ensure IT projects are supported by both the business and IT departments
Explain how an airline can use information technology to ensure the security of its airplanes