1. Information Systems Management David Kroenke
Using MIS 3e Chapter 11
Information Systems Management
David Kroenke

2. Chapter Preview
Information systems are critical to organizational success, and like all critical assets, need to be responsibly managed, in organizations both large and small.
In this chapter, we will survey the management of IS and IT resources. We begin by discussing the major functions and the organization of the IS department.
Then we will consider each of the major functions in greater detail: planning the use of IT/IS, creating and managing the computing infrastructure, creating and managing enterprise IS, and protecting organizational information assets.

3. Chapter Preview
The pros and cons of outsourcing and describing some of its risks are presented.
Finally, the chapter concludes with a discussion of the relationship of users to the IS department. In this last section, you will learn both your own and the IS department’s rights and responsibilities.
The goal of the chapter is to give you an appreciation for the scale and complexity of the IS management task and to help you become an effective consumer of IS services.

4. Study Questions
Q1 What are the functions and organization of the IS department?
Q2 How do organizations plan the use of IS?
Q3 What tasks are necessary for managing computing infrastructure?
Q4 What tasks are necessary for managing enterprise applications?
Q5 What are the advantages and disadvantages of outsourcing?
Q6 What are your user rights and responsibilities?
Q7 2020?

5. Functions and Organization of the IS Department
(Tutorial video)
Major functions of information systems department
Plan the use of IT to accomplish organizational goals and strategy
Develop, operate, and maintain the organization’s computing infrastructure
Develop, operate, and maintain enterprise applications
Protect information assets
Manage outsourcing relationships

6. How is the IS Department Organized?

7. How Is the IT Department Organized? (see video)
Chief Information Officer (CIO)
Principal manager
Reports to CEO, COO, or CFO
Technology office
Head: Chief Technology Officer (CTO)
Investigates new information systems technologies for possible application at organization
Operations
Manages computing infrastructure

8. How Is the IT Department Organized?
Development
Manages process of creating new information systems
Maintains existing system
Outsourcing relations
Handles affairs with outsourced systems
Data administration staff functions
Establishes data standards and data management practices and policies

9. What IS-Related Job Positions Exist?

10. IT Position Requirements
Most positions require business knowledge plus technical knowledge
Many require university degrees
Most require good verbal and writing skills
Think dual majors with MIS/CIS to enhance your marketability (competitive advantage)
Accounting and information systems
Marketing and information systems
Management and information systems
HRM and information systems

11. Study Questions Q2 How do organizations plan the use of IS?
Q1 What are the functions and organization of the IS department?
Q2 How do organizations plan the use of IS?
Q3 What tasks are necessary for managing computing infrastructure?
Q4 What tasks are necessary for managing enterprise applications?
Q5 What are the advantages and disadvantages of outsourcing?
Q6 What are your user rights and responsibilities?
Q7 2020?

12. Major IS Planning Functions

13. Align Information Systems with Organizational Strategy
As strategies change, as the organization merges with other organizations, as divisions are sold, IS must evolve along with the organization.
Changing a network requires time and resources. Integrating disparate information systems applications is even slower and more expensive.
Without a persuasive CIO, IS can be perceived as a drag on the organization’s opportunities.

14. Communicate Issues to the Executive Group
CIO provides the IS perspective during discussions of problem solutions, proposals, and new initiatives.
For example, when considering a merger, it is important that a company consider integration of information systems in the merged entities. This consideration needs to be addressed during evaluation of merger opportunity.

15. Develop Priorities and Enforce Them Within the IS Department
CIO must ensure that priorities consistent with overall organizational strategy are developed and communicated to IS department.
Must also ensure that IS department evaluates proposals and projects for using new technology in light of those communicated priorities.

16. Sponsor the Steering Committee
Steering committee is a group of senior managers from major business functions that works with the CIO to set IS priorities and decide among major IS projects and alternatives.
Provides a forum where information systems personnel can discuss potential IS initiatives and directions with the user community
Provides a forum where users may express their needs, frustrations, and other issues they have with the IS department

17. Study Questions
Q1 What are the functions and organization of the IS department?
Q2 How do organizations plan the use of IS?
Q3 What tasks are necessary for managing computing infrastructure?
Q4 What tasks are necessary for managing enterprise applications?
Q5 What are the advantages and disadvantages of outsourcing?
Q6 What are your user rights and responsibilities?
Q7 2020?

18. Tasks Are Necessary for Managing Computing Infrastructure
Distributed check printing company that grew through a process of acquisition. Company expanded to new geographic locations by acquiring printers in different cities. As each entity was acquired, company kept it as an independent operating center. Plant managers accountable for performance of their own facilities, and had considerable operational independence.

19. Centralized Order-management System for All Plants
With centralized system, plant managers were unable to implement their own production-scheduling processes for small, but significant, differences in ways each plant prioritized and processed its orders. Dissatisfaction with the centralized system was rampant.

20. Centralized Order-management System for All Plants
More successful than centralized system because it was consistent with organization’s underlying management style and philosophy.
IS department was buried deep in accounting department where it had little visibility to rest of the company.
Company raised IS in management hierarchy and instituted a steering committee.

21. Create, Operate, and Maintain Computing Infrastructure
Three more, huge tasks in managing computing infrastructure are to:
Create and maintain infrastructure for end-user computing,
Create, operate, and maintain networks,
Create, operate, and maintain data centers, data warehouses, and data marts.

22. Establish Technology and Product Standards
IS department cannot afford to allow every computer user to have own personal configuration. Doing so would create difficulties for upgrading computers and programs, and might result in some users’ computers being incompatible with others.
Users’ computing needs vary according to the work they do. Most IS departments have three or four different standard configurations.
Most basic configuration might have just and a Web browser. Another might have Microsoft Office programs as well; a third might have an extended version of Office, , and some analysis software; a fourth configuration might be created for software development personnel.

23. Track Problems and Monitor Resolutions
System must exist to record user problems and monitor their resolution
When a user reports a problem, IS department assigns a tracking number, and problem enters a queue for service. Normally, problems are prioritized on basis of how critical they are to user’s work.
CIO and manager of computer operations group monitor the queue, the average length of time an item remains in the queue, the number of nonresolutions, and so forth.

24. Manage Computing Infrastructure Staff

25. Study Questions
Q1 What are the functions and organization of the IS department?
Q2 How do organizations plan the use of IS?
Q3 What tasks are necessary for managing computing infrastructure?
Q4 What tasks are necessary for managing enterprise applications?
Q5 What are the advantages and disadvantages of outsourcing?
Q6 What are your user rights and responsibilities?
Q7 2020?

26. Tasks Necessary for Managing Enterprise Applications
Definition of what constitutes an enterprise application varies among organizations. In some organizations, IS department manages every application, including individual and workgroup applications.
In others, individuals and workgroups manage their own applications, with support from the IS department in which enterprise applications refers to some functional applications, and all cross-functional applications including CRM, ERP, and SOA-based interorganizational systems.

27. Develop New Applications
Major application management functions

28. Maintain (Legacy) Systems
Maintenance means either to fix the system to do what it was supposed to do in the first place or to adapt the system to changed requirements.
Legacy information system is one that has outdated technologies and techniques but is still used, despite its age.
Legacy system maintenance entails adapting those systems to new tax laws, accounting procedures, or other requirements that must be implemented for legacy system to be relevant and useful.
The goal is to keep them working until they are replaced.
In larger organizations each major enterprise application has its own problem-tracking and resolution system.

29. Integrate Enterprise Applications
Enterprise Application Integration (EAI)
Includes intermediary layers of software, and possibly intermediary databases, to enable integration of disparate systems.
Requires knowledge of many different systems, including firm’s legacy systems, such work is usually done in-house rather than outsourcing it.

30. Manage Development Staff

31. Four primary responsibilities of data administration
Administer Data
Four primary responsibilities of data administration

32. Example of Data Dictionary Entries

33. Examples of Broad Data Policies
“We will not share identifying customer data with another organization.”
“We will not share non-identifying customer data with another organization without the approval of the legal department.”
“Employee data are never to be released to anyone other than the employee without the approval of the human resources department.”
Narrower data policies pertain to particular data items. An example is: “We will maintain data about past employees for at least seven years after their last day of work.”

34. Study Questions
Q1 What are the functions and organization of the IS department?
Q2 How do organizations plan the use of IS?
Q3 What tasks are necessary for managing computing infrastructure?
Q4 What tasks are necessary for managing enterprise applications?
Q5 What are the advantages and disadvantages of outsourcing?
Q6 What are your user rights and responsibilities?
Q7 2020?

35. What Are the Advantages and Disadvantages of Outsourcing?
(Tutorial video)
Outsourcing is the process of hiring another organization to perform a service. Outsourcing is done to save costs, to gain expertise, and to free up management time.
“Your back room is someone else’s front room.” (Peter Drucker)

36. Outsourcing Information Systems

37. What Are the Outsourcing Alternatives?
Major categories of alternatives by information systems components

38. What Are the Risks of Outsourcing?

39. Study Questions Q6 What are your user rights and responsibilities?
Q1 What are the functions and organization of the IS department?
Q2 How do organizations plan the use of IS?
Q3 What tasks are necessary for managing computing infrastructure?
Q4 What tasks are necessary for managing enterprise applications?
Q5 What are the advantages and disadvantages of outsourcing?
Q6 What are your user rights and responsibilities?
Q7 2020?

40. What Are Your User Rights and Responsibilities?
(Tutorial video)

41. Study Questions
Q1 What are the functions and organization of the IS department?
Q2 How do organizations plan the use of IS?
Q3 What tasks are necessary for managing computing infrastructure?
Q4 What tasks are necessary for managing enterprise applications?
Q5 What are the advantages and disadvantages of outsourcing?
Q6 What are your user rights and responsibilities?
Q7 2020?

42. 2020?
Two computing movements are likely to increase in size and importance in next ten years: cloud computing and green computing.
Cloud computing
A form of hardware/software outsourcing in which organizations offer flexible plans for customers to lease hardware and software facilities.
Amount of resource leased can increase and decrease dramatically, and customers pay only for resources used.
Major companies that offer cloud computing products include Amazon.com, Oracle, and Microsoft.
Pearson Education is a primary candidate to use cloud computing for hosting its online student products.

43. Virtualization
Process by which multiple operating systems share the same computer hardware, usually a server
With virtualization, one server can support two instances of Windows Server, one instance of Linux, and three instances of Windows 7, for example.
Virtual computer
Each OS appears to have full and exclusive control over the server computer.

44. Green Computing
Green computing is environmentally conscious computing consisting of three major components: power management, virtualization, and e-waste management.
Computers and related equipment use electricity and generate heat, which requires air conditioning, using more electricity and water. Hence computers place a burden on electrical resources and environment.
Green computing movement encourages virtualization to dramatically reduce server idle time.

45. Green Computing
E-Trash are computers and related devices no longer in use.
Computers, monitors, printers, and other computing devices contain lead, mercury, cobalt, and other toxic substances.
Green computer movement seeks to reduce the creation of such materials by changing the design of computers and related products to remove or limit them.
Also concerned with recycling of these substances as well as with proper disposal.
Green computing is new, but is likely to become a considerable movement by 2020.

46. Ethics Guide: Using the Corporate Computer
Suppose you are a manager at a company with the stated policy:
“Computers, , and the Internet are to be used primarily for official company business. Small amounts of personal can be exchanged with friends and family, and occasional usage of the Internet is permitted, but such usage should be limited and never interfere with your work.”
You find out that one of your employees has been engaged in the activities listed on the following slide.

47. What would you do? How would you handle the situation?
Playing computer games during work hours
Playing computer games before and after work hours
Responding to s from an ill parent
Watching DVDs during lunch and breaks
Sending s to plan a party that mostly involves people from work
Sending s to plan a party that mostly involves no one from work
Searching the Web for a new car
Reading the news on CNN.com
Checking the stock market over the Internet
Bidding on items for personal use on eBay
Selling personal items on eBay
Paying personal bills online
Paying personal bills online when traveling on company business
Buying an airplane ticket for an ill parent over the Internet
Changing the content of a personal Web site
Changing the content of a personal business Web site
Buying an airplane ticket for a personal vacation over the Internet

48. Guide: Is Outsourcing Fool’s Gold?
Outsourcing computer infrastructure is trading one set of problems for another
Outsourcing IT middle management
Outsource vendor hires your first-line IT staff
No way to know if vendor’s middle managers are any better
Vendor’s bureaucratic problems: forms, procedures, committees, report, management tools, and so on
You become a clone of vendor’s other clients

49. Guide: Is Outsourcing Fool’s Gold?
Hard to bring outsourced operations back in-house
Can’t hire vendor’s employees
Your employees lack critical knowledge
Vendor’s are not committed to your bottom line
Moral:
You can’t get away from IS problems by hiring someone else to manage your IS for you.

50. Guide: What If You Just Don’t Know?
Not all problems can be solved by quantitative analysis.
Some problems have no agreed-upon method for solving.
Paper analysis often misses tangibles and intangibles.
Hiring independent consultant avoids issue.
No time to find answers.
No money to conduct in-depth study.
Study may cloud issues more.
Sometimes, it’s just not possible to find the answer.

51. Active Review
Q1 What are the functions and organization of the IS department?
Q2 How do organizations plan the use of IS?
Q3 What tasks are necessary for managing computing infrastructure?
Q4 What tasks are necessary for managing enterprise applications?
Q5 What are the advantages and disadvantages of outsourcing?
Q6 What are your user rights and responsibilities?
Q7 2020?

52. Case Study 11: Marriott International, Inc.
Operates and franchises hotels and lodging facilities throughout the world
2007 revenue was just over $12.9 billion
Marriott groups its business into segments according to lodging facility.
Major business segments are full-service lodging
Select-service lodging
Extended-stay lodging
Timeshare properties

53. Case Study 11: Marriott International, Inc.
Three top corporate priorities are:
Profitability
Preference
Growth
Revenue management, which adjusts prices in accordance with demand.

54. Case Study 11: Marriott International, Inc.
Marriott developed two different revenue management systems, one for premium hotels and a second for its lower-priced properties.
Both developed using pre–Internet technology
Systems upgrades required installing updates locally which were expensive and problematic.
Two systems required two separate interfaces for entering prices into centralized reservation system.

55. Case Study 11: Marriott International, Inc.
In the late-1990s, Marriott embarked on a project to create a single revenue-management system to be used by all of its properties.
The new system, called One Yield, was custom developed in-house, using a process similar to the SDLC.
IT professionals understood importance of user involvement, and formed a joint IT–business user team that developed business case for new system and jointly managed its development.
Team provided constant communication to system’s future users, and used prototypes to identify problem areas early.
Training is a continuing activity for all Marriott employees, and training facilities were integrated into new system.

56. Case Study 11: Marriott International, Inc.
One Yield recommends prices for each room, given the day, date, current reservation levels, and history. Each hotel property has a revenue manager who can override these recommendations.
Either way, prices are communicated directly to the centralized reservation system.
One Yield uses Web-based technology so that when the company makes upgrades to its system, it makes them only at Web servers, not at individual hotels.
This strategy saves considerable maintenance cost, time, and frustration.

57. Case Study 11: Marriott International, Inc.
One Yield computes the theoretical maximum revenue for each property and compares actual results to that maximum.
Using One Yield, the company has increased the ratio of actual to theoretical revenue from 83 to 91 percent. That increase of 8 percentage points has translated into a substantial increase in revenues.

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