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Managing Information TechnologyBusiness and ITBusiness/IT PlanningSection IIManaging Global ITGlobal IT ManagementGlobal Business/IT StrategiesGlobal IT PlatformsGlobal Data Access SystemsGlobal Systems Development

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Copyright 2005, McGraw-Hill/Irwin, Inc. 12-1

Real World Cases

Enterprise and Enterprise and Global Management Global Management

of Information of Information TechnologyTechnology

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Learning ObjectivesLearning Objectives1. Identify each of the three components of information

technology management and use examples to illustrate how they might be implemented in a business.

2. Explain how failures in IT management can be reduced by the involvement of business managers in IS planning and management.

3. Identify several cultural, political, and geoeconomic challenges that confront managers in the management of global information technologies.

4. Explain the effect on global business IT strategy of the trend toward a transnational business strategy by international business organizations.

5. Identify several considerations that affect the access choice of IT applications, IT platforms, data access policies, and systems development methods by a global business enterprise.

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Real World Cases

ManagingManagingInformation TechnologyInformation Technology

• Business and IT• Development of Global

Business• Need for Business Managers• Managing IS and

TechnologiesReal World Case 1- Chicago Real World Case 1- Chicago

Board of Trade: From Failure Board of Trade: From Failure to Success in Managing to Success in Managing Information Technology Information TechnologyClick to go to

Case 1

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Managing Information Managing Information TechnologyTechnology

The Major Components of IT Management

CEO & CIO CIO & CTO CIO & IT Managers

InformationTechnologyManagement

ManagingBusiness

and ITStrategy

ManagingApplication

Developmentand

Technology

ManagingThe IT

Organizationand

Infrastructure

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Comparing IT Management Approaches


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• IT Management Differs from Conventional IT Management• Hires IT Professionals Who

Can Integrate IT With Business• Organized Workgroups

Around e-Business Initiatives Focused on e-Commerce Services


Avnet Marshall: Managing ITAvnet Marshall: Managing IT

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•CEO & CIO Co-Adaptation Process• Strategy Development•Resource Management

Business/IT Planning Business/IT Planning

Key Insights Key Objectives Priorities

More Questions Feedback Feedback

Customerand Business

ValueVisioning

BusinessStrategies

and Models

Business/ITStrategies andArchitecture

BusinessApplication

Development &Deployment

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•Technology Platform•Data Resources•Applications Architecture•IT Organization

Information Technology Information Technology ArchitectureArchitecture

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Avnet Marshall: e-Business PlanningAvnet Marshall: e-Business Planning

Information Technology Information Technology ArchitectureArchitecture

Conventional IT Planning Avnet Marshall’s Business/IT Planning

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•Organizing IT•Centralization•Downsizing•Decentralization

Managing the IS FunctionManaging the IS Function

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Group Alliances Development and support

Group

Marketing and Visibility Initiatives

Planning Group

Electronic Commerce and Supply Chain Management Development and Support

Group

Enterprise Integration Development and Support

Group

Computer/Communication

Operations Management Group

CEOCIO

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• 10 Year $380 Million Outsourcing Agreement With CGI - Montreal• IT Service Support Functions for

80 U.S. Locations• 300 Employees Moved to CGI• Resulted in Leaner IT Entity with

21% Saving in IT Infrastructure Costs• FMC Also Outsources and

Realizes Substantial Savings

Fireman’s Fund and FMC Fireman’s Fund and FMC Corp: Outsourcing ITCorp: Outsourcing IT

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Managing the IS FunctionManaging the IS Function• Managing Application

Development• IS Operations Management• System Performance

Monitors• Chargeback Systems• Process Control• Human Resources

Management of IT• The CIO and Other IT

Executives

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Example Enterprise Example Enterprise Management Portal Management Portal


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Top IT Jobs: Requirements Top IT Jobs: Requirements and Compensation and Compensation


• Chief Technology OfficerChief Technology Officer• Base Salary: $100,000-$250,000• Bonus: Up to 30% of Salary• e-Commerce Architecte-Commerce Architect• Base Salary: $120,000-$200,000• Bonus: Up to 20% of Salary• Technical Team LeaderTechnical Team Leader• Base Salary: $100,000-$200,000• Bonus: Up to 20% of Salary• Practice ManagerPractice Manager• Base Salary: $80,000-$200,000• Bonus: Up to 20% of Salary

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Managing the IS FunctionManaging the IS Function•Technology Management•Chief Technology Officer (CTO)•Managing User Services•Information Center

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Failures in IT ManagementFailures in IT Management

• Installing CRM Systems Can be Perilous• Multiple Installation Tries

Often Needed• PeopleFirst Example

Experienced Difficulties• Getting Information Was

Like Playing “Whack-a-Mole”

PeopleFirst Finance: Failure of PeopleFirst Finance: Failure of a CRM Projecta CRM Project

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Management Involvement and Management Involvement and GovernanceGovernance

Failures in IT ManagementFailures in IT Management

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Managing Global ITManaging Global IT• International Dimensions of

Modern Business• Benefits and Challenges of

Offshore Systems Development

• Real World Case 2- Real World Case 2- Global Exchange Services and Global Exchange Services and

Allstate: Challenges and Allstate: Challenges and Solutions in Offshore Solutions in Offshore Systems DevelopmentSystems Development

Click to go toCase 2

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Managing Global ITManaging Global ITThe Major Dimensions of The Major Dimensions of

Global e-BusinessGlobal e-Business

GlobalIT

Management

Business/ITStrategies

BusinessApplication Portfolios

Internet-BasedTechnology Platforms

SystemsDevelopment

DataResource

Management

Cultural, Political,and Geoeconomic

Challenges

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Managing Global ITManaging Global IT

• Typical Kind of Global Challenge• Need to Understand the

Workings of Each Local IT Group• Focus on Leveraging Their

Cultures and Talents• Peers Often Put Together to

Experience Synergy

Cendant Corp.: Global IT Cendant Corp.: Global IT ManagementManagement

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Managing Global ITManaging Global IT• Political Challenges•Geoeconomic Challenges•Cultural Challenges•Global Competition for

IT Talent•Global Business/IT

Strategies•Global Business/IT

Applications

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Alternative Global StrategiesManaging Global ITManaging Global IT

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Managing Global ITManaging Global ITAlternative Implementations

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Managing Global ITManaging Global ITGlobal Business Drivers

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• $17 Billion Manufacturing and Services Company• Problems Are Addressed by

Backup Teams Worldwide• Speed is of the Essence – Local

Support Means Faster Access• TRW Developed Centers of

Excellence to Address Problems• Pooling Resources to Solve

Global IT Issues is an Advantage

TRW Inc.: Global Business/IT TRW Inc.: Global Business/IT ChallengesChallenges

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Managing Global ITManaging Global ITGlobal IT PlatformsGlobal IT Platforms

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• $100 Million Global IT Firm• Rolling Out Global Software

System with a Single Interface through 2004• Single System Customized

for Each Country’s Needs• Flexcube Software

Automates Much Balancing Activities

Citibank: Consolidating Global Citibank: Consolidating Global IT PlatformsIT Platforms

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Managing Global ITManaging Global ITThe Internet as a Global IT The Internet as a Global IT

PlatformPlatform

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Managing Global ITManaging Global ITGlobal Data Access IssuesGlobal Data Access IssuesTransborder Data Flows (TDF)

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Managing Global ITManaging Global ITConsumer Privacy AgreementsConsumer Privacy Agreements

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Managing Global ITManaging Global ITCouncil of Europe: Global Council of Europe: Global

Cybercrime TreatyCybercrime Treaty• Fear That Cybercrime Treaty

Will Affect Business Liability and Security• Anxiety Over Duplication of

Other Agreements• Primary Objective Was to

Break Bottlenecks in Cyberinvestigations• Differences of Opinion are Real

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Managing Global ITManaging Global ITInternet Access IssuesInternet Access Issues

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Managing Global ITManaging Global ITGlobal Systems DevelopmentGlobal Systems Development

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Managing Global ITManaging Global ITSystems Development StrategiesSystems Development StrategiesDHL Worldwide: Global System DHL Worldwide: Global System

DevelopmentDevelopment• Development Centers Located

Worldwide to Service 24 Hour Workday• Working With Outsourcing

Sites at Lower Costs• Transparency of International

Boundaries a Real Fact for DHL After 15 Years of Work

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SummarySummary•Failures in IT Management•Managing Information Technology•Managing Global IT•Global Business and IT Strategies and Issues

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KEY TERMSKEY TERMSApplication Development

ManagementCentralization or

Decentralization of ITChargeback SystemsChief Information OfficerChief Technology OfficerCultural, Political, and

Geoeconomic ChallengesData CenterDownsizingFailures in IT management Global Business DriversGlobal information

Technology Management a. Business/IT Applicationsb. Business/IT Strategiesc. Data Access Issuesd. IT Platformse. Systems Development Issues

Human Resource Management of IT

Internet Access IssuesInternet as a Global IT

PlatformManagement Involvement in

ITManaging Information

TechnologiesManaging the IS FunctionOperations ManagementOutsourcing IS OperationsSystems Performance MonitorTechnology ManagementTransborder Data FlowsTransnational StrategyUser Services

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Real World Cases

Real World Case 1 Chicago Board of Trade: From Failure to Success in Managing Information Technology


Real World Case 2 Global Exchange Services and Allstate: Challenges and Solutions in Offshore Systems Development


Optional Case StudiesOptional Case Studies

Real World Case 3 Bio-ERA and Burlington Northern Santa Fe: The Business Case for Global Collaborative Software DevelopmentReal World Case 4 Avon Products and Guardian Life Insurance: Successful Management of IT Projects



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1- What were several major 1- What were several major reasons the IT organization reasons the IT organization had failed at the Chicago had failed at the Chicago Board of Trade? Explain the Board of Trade? Explain the impact of each on CBOT. impact of each on CBOT.

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Chicago Board of Trade:Chicago Board of Trade:From Failure to Success in From Failure to Success in

Managing Information TechnologyManaging Information Technology

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• Lack of Leadership• Infrastructure-Ancient,

Unreliable and Undocumented•Most Key Processes Routed to

Old, Midrange Tandem Computers– Environment Very Complex– New Process Took More Than

90 Steps

Discussion Points Would Include: Discussion Points Would Include:



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• Project/Budget Controls Were Lacking• Quality Control Was

Substandard• IT Full of Silos and Fiefdoms, No

Economies of Scale• IT Hadn’t Completed a Single

Project in Four Years• Technology Doesn't Provide

Return for Investing Money In It




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2- What were several key 2- What were several key management changes and management changes and initiatives that Bill Farrow initiatives that Bill Farrow implemented to make IT implemented to make IT successful at CBOT? Explain successful at CBOT? Explain the impact of each on CBOT. the impact of each on CBOT.



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•New Senior Vice President of Technology Solutions• Inventory of IT Taken by–Documenting Systems–Technical Architecture

•Vendor Relationships, Service-Level Agreements, and Evaluated Security Systems•Built New Relationships, Used

Brainstorming




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•Replaced Ancient Tandem Systems–With Sun Unix Servers–And Oracle Databases

• Improved Quality Assurance•Established a Project

Management Office•Brought ROI to Project Agendas•Replaced IT Personnel with

Professionals




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3- Does the experience of 3- Does the experience of CBOT prove that “IT is a CBOT prove that “IT is a business function that needs business function that needs to be managed like any other to be managed like any other business function?” Why or business function?” Why or why not? why not?



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•Recognition of Business Skills from This Course/Work Experience•What Business Skills would Fit this Organization in This Industry?




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•Recognition of Business Skills from This Course/Work Experience•What Business Skills would Fit this Organization in This Industry?•Develop Pros/Cons about Applying Business Skills to IT




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1- What are the business 1- What are the business benefits and limitations of benefits and limitations of sending software development sending software development offshore? Use the companies offshore? Use the companies in this case as examples. in this case as examples.

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Global Exchange ServicesGlobal Exchange Servicesand Allstate: Challenges and and Allstate: Challenges and

Solutions in Offshore Systems Solutions in Offshore Systems DevelopmentDevelopment

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• GXS Estimates Savings of $16 million Over 3 years• Potential to Lose Control Over– Foreign Technology Workers– Quality of IT Projects Thousands

of Miles Away• Using “Offshore-Insourcing”

Model• Allstate Using Centers Overseas




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2- What is the business value 2- What is the business value and limitations of the and limitations of the insourcing model of offshore insourcing model of offshore software development? Use software development? Use GSX and Allstate as GSX and Allstate as examples. examples.



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•Foreign Workers Receive Same Training•Use the Same Software Development Tools•Adhere to the Same Business Processes•Employee Cost Savings•Retain Critical Business Knowledge/Intellectual Capital




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•Inform U.S.-Based Workers of Critical Plans for IT Projects •Economics of Local Environment are–Sustainable, and That There’s Talent

•Quality Workforce and Those Things Won't Change




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3- Should U.S companies send 3- Should U.S companies send their software development their software development and other IT functions and other IT functions offshore? Why or why not? offshore? Why or why not?



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•Cost Savings•Quality Assurance•Stability of Foreign Economy•Retain Critical Business Knowledge and Intellectual Capital

Pros & Cons For Going Offshore:Pros & Cons For Going Offshore:



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•Cost Savings•Quality Assurance•Stability of Foreign Economy•Retain Critical Business Knowledge and Intellectual Capital•Employee Relations

Pros & Cons For Going Offshore:Pros & Cons For Going Offshore:



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1- How is the open source 1- How is the open source model affecting the model affecting the development of application development of application software for business? software for business?

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Bio-ERA and BurlingtonBio-ERA and BurlingtonNorthern Santa Fe: The BusinessNorthern Santa Fe: The Business

Case for Global CollaborativeCase for Global CollaborativeSoftware DevelopmentSoftware Development

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• Permits Radically Different Way to Build Software

• Foreshadows Future of Distributed Global Collaborative Model of Software Development

• Bio-ERA and Burlington Northern Santa Fe Avoided Tasks of Software Development

• Companies Concentrate Their Core Business by– Forming Just-in-Time Teams

• Used Outsourced Talent for Software Development




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2- What are the business 2- What are the business benefits of the global or benefits of the global or collaborative approach to collaborative approach to software development? Use software development? Use the companies in this case as the companies in this case as examples. examples.



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•Companies Outsource Software Development and Run their Core Business•Company uses Global-Collaborative Approach for Software Development “Fast and Cheap”




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3- What are several potential 3- What are several potential challenges or limitations that challenges or limitations that might arise when using a might arise when using a global collaborative approach global collaborative approach to software development? to software development? How can companies address How can companies address such challenges? such challenges?



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• IT Manager Must Understand Software Development• IT Manager Must have Experience

Managing a Distributed Team and a Platform • Companies Must Ensure U.S.-

based Talent for Any Ad-hoc Jobs




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• IT Manager Must Understand Software Development• IT Manager Must have Experience

Managing a Distributed Team and a Platform • Companies Must Ensure U.S.-based

Talent for Any Ad-hoc Jobs• Company Must Create “Executive

Dashboard” to Monitor Software Development




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1- What are several possible 1- What are several possible solutions to the failures in IT solutions to the failures in IT project management at many project management at many companies described at the companies described at the start of this case? Defend start of this case? Defend your proposals. your proposals.

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Avon Products and Avon Products and Guardian Life Insurance: Guardian Life Insurance:

Successful Management of IT Successful Management of IT ProjectsProjects

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• Good Business-Case Methodology Leads to Good Project Management• Use All Analytical/Financial ROI

Tools Against Each IT Projects• Use of “Governance” (Hard-

Dollar/Metrics-Oriented Processes) for Incorporating “Soft” Costs and Benefits into Decisions




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2- What are several key ways 2- What are several key ways that Avon and Guardian that Avon and Guardian assure that their IT projects assure that their IT projects are completed successfully are completed successfully and support the goals of the and support the goals of the business? business?



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• Avon Uses Analytical/Financial ROI Tools Against IT Projects• Avon Uses an Investment-

Tracking Database• Guardian Uses “Governance”• Guardian Incorporates “Soft”

Costs and Benefits• Guardian Monitors IT Projects




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3- If you were the manager of a 3- If you were the manager of a business unit at Avon or business unit at Avon or Guardian, what are several Guardian, what are several other things you would like to other things you would like to see their IT group do to see their IT group do to assure the success of an IT assure the success of an IT project for your business project for your business unit? Defend your unit? Defend your suggestions. suggestions.



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Include Concepts Drawn From the Text and From Other Business Courses. Draw upon Other Classes and Perhaps From Work Experiences to Integrate Learning Experiences Through This Case.




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