Dr. Chen, Management Information Systems Chapter 11 Information Systems Management Jason C. H. Chen,...

Dr. Chen, Management Information Systems

Chapter 11Information Systems

Management

Jason C. H. Chen, Ph.D.Professor of MIS

School of Business AdministrationGonzaga UniversitySpokane, WA 99258

[email protected]

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“… You’ve Got a Fox in Charge of a Hen House.”

1.IS management is a mess.

2.New maintenance supervisor oversees IS, but has no IS background

3.IS manager has a conflict of interest

4. Inherited some contractor developed applications.

5.Access to servers is wide open

6.Fox Lake’s general manager needs to get actively involved in IS management

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Dr. Chen, Management Information Systems 3

• 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.

Chapter Preview


Chapter Preview (cont.)

• 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.


Study Questions

• Q1 What are the functions and organization of the IS department?

• Q2: How do organizations plan the use of IS?• Q3: What are the advantages and disadvantages

of outsourcing? • Q4: What are your user rights and

responsibilities?• Q5: 2022?

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Types of Sourcing

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Sourcing_______

_______

_______

___________

In

Out

Crowd

Offshoring


Q1: What are the Functions and Organization of the IS Department?

• Major functions of information systems department Plan how to use IS to accomplish

organizational goals and strategy Manage outsourcing relationships Protect information assets Develop, operate, and maintain organization’s

computing infrastructure Develop, operate, and maintain enterprise

applications7


Functions and Organization of the IS Department

• Each organization’s IS structure varies depending on these factors: ______ _______ __________ __________ ________ Other factors

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SizeCulture

Competitive environmentIndustry


How is the IS Department Organized?

9Fig 11-1 Typical Senior-level Reporting Relationships

This organizational structure chart shows the typical top-level reporting relationships. Depending on the organization, the Chief Information Officer (CIO) may report to the Chief Executive Officer (CEO), the Chief Operating Officer (COO), or the Chief Financial Officer (CFO).


How Is the IT Department Organized?

• 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


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


INFORMATION SYSTEMS (MIS/IS)

ORGANIZATIONS TECHNOLOGY

MANAGEMENT

INFORMATION

SYSTEMS

Dr. Chen, The Challenge of the Information Systems Technology TM -12

Each project team should include the following three types of people:

1) top/middle management 2) technical professional (e.g., MIS, accounting)3) USERS


Q/A

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T/F If an organization does not develop programs in-house, then the development group of the IS department will include programmers, test engineers, and technical writers.Answer: ________FALSE


What IS-Related Job Positions Exist?

14Fig 11-2 Job Positions in the Information Systems Industry


What IS-Related Job Positions Exist? (cont’d)

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What IS-Related Job Positions Exist? (cont’d)

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IT Position Requirements (Very Important to Your Future Career!) p.390

• 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 Operations and information systems HRM and information systems


Q2 How Do Organizations Plan the Use of IS?Major IS Planning Functions

18Fig 11-3 Planning the Use of IS/IT

• The figure below shows the necessary steps an organization must take to plan how it will use IS and IT and to make sure both of them support the organization’s strategy.

• The CIO is responsible for most of these items. It’s a never-ending process as organizations change, grow, or merge with other companies.

• The steering committee, a group of senior managers from major business functions, works with the CIO to set IS priorities, make decisions about major IS projects, and serve as a communication channel between users and the IS function.


Explain How You Would Respond to Each Situation.

10. Tweeting friends on your computer about your softball win last night.

11. Selling personal items on eBay12. Paying personal bills online13. Paying personal bills online when

traveling on company business14. Buying an airplane ticket for an ill

parent over the Internet15. Changing content of a personal Web

site16. Changing content of a personal

business Web site17. Buying an airplane ticket for a personal

vacation over Internet

1. Playing computer games during work hours

2. Playing computer games before and after work hours

3. Responding to emails from an ill parent

4. Watching DVDs during lunch and breaks

5. Sending emails to plan a party that mostly involves people from work

6. Sending emails to plan a party that mostly involves no one from work

7. Updating your Facebook page

8. Reading news on CNN.com

9. Checking stock market over Internet

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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.


Q/A

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Which of the following is a function of the steering committee for an IS department?A) writing program codeB) imparting trainingC) adapting softwareD) setting IS prioritiesAnswer: ______ D


Information System Strategy Triangle

Business (Firm)Strategy

Organizational Strategy IS/IT Strategy

Where is the business going and why?

What is required? How it can be delivered?

N

Directi

on for b

usiness

Needs and priorities

Infrastructure and services

Supports busin

ess

IT impact and potential

Strategy Triangle

1. Architecture/Infrastructure2. MIS organization 3. Funding4. Project Management 22


Information System Strategy Triangle

• A business strategy is a well-articulated vision of where the business seeks to go and how it expects to get there.

• An organizational strategy is the organization’s design, as well as the choices it makes to define, set up, coordinate, and control its work processes.

• IS/IT strategy is the plan the organization uses in providing information systems and services.

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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.


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.


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


Q3. Outsourcing: What and Why?

• 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.

• Any value chain business activity can be outsourced• “Your back room is someone else’s front room.” (Peter

Drucker)• Drivers (at least four advantages) include:

Reducing ________Transition to new _____________Focus on _______ business strategies;Provide better management and focus of IT personnel.

• Disadvantages are present in outsourcing and include:Losing _________________ to undue decisions, etc.

control,

Expensive

costs;technologies;

core


Sourcing Decision Cycle Framework

• Sourcing involves many decisions (Figure 11 Extra-1).

• The first step is the make or buy decision.• If buy is selected then the company must decide

where.• If the company decides to go offshore it must decide

if the offshore company is near or far.• Periodic evaluation must take place.• Continual evaluation is needed to determine if the

arrangement is satisfactory or not (either for outsourcing or insourcing).


Make or Buy?

In or Out of Country?

Where?

Status Quo or Change?

INSOURCING

INSHORING

OUTSOURCING

CAPTIVE CENTER

FARSHORING

NEARSHORING

OFFSHORING

FIGURE 11 Extra 1 SOURCING DECISION CYCLE FRAMEWORK

(overseas subsidiary)

(distant land)

(proximate)

Where & how the sourcing should be delivered?

Backsourcing

BUY

MAKE


Outsourcing Information Systems

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• Outsourcing, the process of hiring another organization to perform a service, can provide advantages like the ones shown in this figure.

• India is the most popular foreign outsourcer because of its large, well-educated, English-speaking population who earn 20 to 30 percent less in labor costs than their U.S. counterparts.

Fig 11-4 Popular Reasons for Outsourcing IS Services

International outsourcing is well-suited to 24/7 operations like customer support.

Some say outsourcing is a threat to U.S. technology leadership.


Risk Reduction

• Caps financial risk• Ensures certain level of quality, or avoids having

substandard quality• Vendor assumes responsibility for hardware,

software, network protocol selection, and knowing applicable tax laws

• Easier to hire another vendor than to fire and rehire internal staff.

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International Outsourcing

• India Large, well-educated, English-speaking, labor cost

70-80% less than in US.

• China and other countries.• Modern telephone technology and Internet-

enabled service databases• Customer support and other functions

operational 24/7.

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What Are the Outsourcing Alternatives?

Major categories of alternatives by information systems components

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Fig 11-5 IS/IT Outsourcing Alternatives

This figure shows alternatives businesses have for outsourcing some or all of their information system components.

IaaS: Infrastructure-as-a-ServiceSaaS: Software-as-a-Service

Oracle/PeopleSoft Web storefront

Oracle, EDS

Amazon

Salesforce.com

Employee Travel

Dr. Chen, Management Information Systems 34Fig 11-6 Outsourcing Risks

There are a lot of risks to outsourcing information systems as this figure describes.


Q/A

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When a company outsources a system, it no longer has control over prioritizing fixes for software failures and problems.Answer: _______TRUE


When to Outsourcing?

• Which IS activities are strategic to our company's business?

• Will outsourcing save us at least ____ percent? • Does our firm have access to the needed

technology and expertise? If not, outsourcing may be the answer to acquiring

these resources.• Does outsourcing increase our firm's flexibility?

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Write shorter contracts - less than ___ years5


INSOURCING

What is the example(s) mentioned in the Friedman’s Video (The World is Flat)?


Crowdsourcing• Definition:

– Taking a task traditionally performed by an employee or contractor, and outsourcing it to an undefined, generally large group of people, in the form of an open call.

• Used by companies to increase productivity, lower production costs, and fill skill gaps.

• Can be used for a variety of tasks.• Companies do not have control over the people doing

the work.• Has cost more than traditional methods.


Q4: What Are Your IS Rights and Responsibilities?

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Fig 11-15 User Information Systems Rights and Responsibilities


Q4: What Are Your IS Rights and Responsibilities? (cont’d)

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Q/A

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Which of the following is true about the changes and developments foreseen for 2022?A) Licensed, off-the-shelf software will become less configurable, less adaptable, and less flexible.B) Fewer applications will be developed in-house and software customization will become easier.C) Better-skilled employees will be needed to adapt software to increasingly unique organizational needs.D) Small computing devices will become more expensive and lose their popularity.Answer: ______ B


Q5: 2022?

• Hardware infrastructure will migrate to cloud• Licensed, off-the-shelf software more

configurable, adaptable and flexible. • iOS devices and other, small computing devices

will become cheaper and more popular.• Fewer and less-skilled employees needed • Loss of control of employees’ use of IT

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• You have certain rights and responsibilities with regard to the IS department that supports you in your job. Here is a list of them.



• End of chapter 11

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Dr. Chen, Management Information Systems Chapter 11 Information Systems Management Jason C. H. Chen,...

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