Lecture 8 Notes
Transcript of Lecture 8 Notes
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IS/IT Policy and StrategyIS/IT Policy and StrategyCIS 590CIS 590
Spring 2005Spring 2005
Week 8 LectureWeek 8 Lecture
Dr. David GadishDr. David Gadish
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Week 7 Review
Management of Change (Ch-10) IT Governance (Ch-11)
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Week 8 Agenda
IT Business Communications (Ch-12) Measuring, Reporting, and Controlling (Ch-13) Questions
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Chapter 12IT Business CommunicationsManaging the Information Technology Resource
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Chapter Outline
Importance of communication in achieving alignment
Importance of understanding of business by IT Why it is necessary for business partners to
understand IT Importance of communication in developing
partnership Methods used to improve communication
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Importance of Communication
“Effective communications is the central lifeline of any organization. It is the vehicle for driving change, shaping expectations, and rallying workers around core purposes.”
-Charlene Marmer Solomon
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Kotter’s Key Elements for Communicating Simplicity Metaphor, Analogy, and Example Multiple Forums Repetition Leadership by Example Explanation of Inconsistencies Give and Take
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Financial Terms for IT Team Bearer Bonds
– Bond owners clip out coupon and present to bond issuer
Bond– Bond matures and issuer redeems face amount
Treasuries– U.S. Treasury borrows money in form of bills, notes,
bonds U.S. Savings Bonds
– Non-negotiable and purchases are limited Zero Coupon Bond
– No coupons and no interest paid
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Web Services Terms for Business SOAP
– Provides way for applications to communicate with each other
UDDI– Web-based distributed directory that enables businesses
to list themselves on Internet Web Services
– Standardized way of integrating Web-based applications Web Services Description Language
– XML-formatted language that describes Web services capabilities
XML– Specification developed by World Wide Web Consortium
to tag data
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Henderson’s Two Styles of Relationships Transactional Style
– Defined by rules, policies, and procedures
Partnership Style– Implies risk sharing, longer time frame for
exchanges, and need to establish range of mechanisms
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Six Determinants of Partnership
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The Road to Partnership
Education Joint Planning Measurement and Control Effective Use of Teams Multilevel Human Resource Strategy Technology
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Global Culture
Hidden messages in communication Written communication may be viewed
positively or negatively Written communication maintains
supporting role Written communication
– Addresses ambiguity– Prevents misunderstandings– Identifies ownership and accountability
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Addressing Communication Effectiveness Direct Communication Liaison Roles Temporary Task Forces Permanent Teams/Committees Integrating Roles Managerial Linking Roles
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Sample Approaches
Direct Communications– Reflect differences in complexity,
requirements, and importance– Determine best vehicle and audience– Consider how to provide right level of
interaction
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Sample Approaches
Liaison Roles– Surrogate facilitator in assisting business and
IT to join and work together– Get IT and business stakeholders together– Ensure each group participates for successful
development and deployment of business systems
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Sample Approaches
Temporary Task Forces– Creates central focus for each participant– Helps to avoid daily distractions– Improves communication among task members– Share common goals and objectives
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Sample Approaches
Permanent Teams or Committees– Effective means of providing stability– Steering committees provide mechanism for
making improved long-term decisions– Legitimate formal process exists– Decisions likely made in best interests of firm– Communication improved
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Sample Approaches
Integrating Roles– Similar to providing cross-training to IT and
business personnel– Experience to know what other person needs to
do– Rotate IT and business people between two
areas to broaden perspective
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Sample Approaches
Managerial Linking Roles– Used to facilitate multiple/difference priorities
and agendas– Use a matrix structure– Guidance provided by multiple supervisors– Means of communication improved– Used where IT and business are comfortable
with each other on partnership level
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Tips and Techniques
Communication is important Learn from others’ trials and tribulations Shared domain knowledge is critical Training of administration managers in IT and
their inclusion in IT projects Things do go wrong and need to get back on track Implement formal communication programs may
be necessary
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2 Types of Communication
Push communication– Occurs when information is disseminated to the
organization without being requested by receivers of information
Pull communication– Occurs when information is requested and
implies immediate availability of information
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Personal Factors
Maintain clear and honest communication Trust Reputation Integrity
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Best Methods to Improve Communications Knowledge sharing Introduce classes for IT and business staff to
attend jointly Group Decision Support System Jointly manage communication between business
and IT Use of liaison agents, task forces, cross-functional
project teams and direct communication Measurement and control
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Priority in Improving IT Communication
Focus on where improvements can be made Strategic Alignment Maturity Assessment
Model Training Continually scan new technologies and
products Build partnerships through mutual
understanding
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Chapter 13Measuring, Reporting, and Controlling
Managing the Information Technology Resource
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Chapter Outline Importance of measurement What and how to measure Quality and efficacy of measures Reporting to different audiences Controlling IT through effective SLAs Negotiating a service level agreement Making SLAs work – metrics Introducing internal SLA to firm SLA myths Who owns measurements and what/when to do them Can enterprise succeed with or without
measurements?
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Why Is There IT?
Mostly profit, some cost, 24%
Mostly cost, some profit,
41%
Pure cost center, 25%
Pure profit, 10%
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Productivity Study of IT and Business Executives
Then why don't we get
recognition for our contribution?,
97% Yes
Do productivity gains translate
into a more profitable
business?, 3% No
Source: InformationWeek research productivity study of 300 IT and business executives
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Measuring IT
IT expenditure as percent of revenue IT expenditure per employee Revenue per IT dollar Total IT expense budget vs. actual Total IT capital budget vs. actual Employees supported per IT employee
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Importance of Measurement
Business wants to know if IT is being run efficiently and effectively
Identify opportunities for improving effectiveness and efficiency
Effectiveness– Doing things right
Efficiency– Doing things the right way
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Measuring IT – Samples
Overall – qualitative measures Overall – quantitative measures Network Data center
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What and How to Measure
Need to measure– Business impact
– Customer relationships
– Internal organization impact
– Investment impact
– Value chain impact
Know how processes are changing between any measurements, and explain any changes in results
No ideal set of metrics
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10-Step Approach to Developing Measurements1. Commitment of resources, time, and cooperation
from senior business and IT management
2. Have and review formal strategic plan, mission statements, and goals
3. Committees need to be established for each of 38 IT processes
4. Each committee meets and defines goals of each IT process as first objective
5. Identify critical success factors
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10-Step Approach to Developing Measurements6. Establish guidelines to measure if, and to what
degree, critical success factors have been met7. Complete pilot should be done and members
jointly participate in the pilot8. Recommendation to install these measurements
should be raised to senior management for endorsement
9. Distribution and implementation of new measures
10. Analyze results and review with all partners
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5 Stages of Benchmarking
Planning Analysis Integration Action Maturity
Source: Robert C. Camp and http://www.apqc.org
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Benchmarks
Planning
– Identify what is to be benchmarked
– Identify comparative companies
– Determine data collection method and collect data
Analysis – Determine current
performance “gap”– Project future
performance levels
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Benchmarks
Integration– Communicate
benchmark findings and gain acceptance
– Establish functional goals
Action– Develop action plans
– Implement specific actions and monitor progress
– Recalibrate benchmarks
Maturity– Leadership position attained
and practices fully integrated into process
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Iterative Process for Benchmarking
Source: Dataquest, Gartner Group.
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Quality of Measures
Often best when forecasting trends Can lead to misleading results Gain correct insight as to what
measurement indicates Good quality may be significant indicator
of good performance
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Dimensions of Service Quality
Reliability– Consistency of performance and dependability
Responsiveness– Willingness/readiness of employees to provide service in
timely manner Competence
– Possession of required skills to perform service Access
– Approachability and ease of contact Courtesy
– Politeness, respect, consideration, friendliness
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Dimensions of Service Quality Communications
– Keeping customers informed in language they understand
Credibility– Trustworthiness, believability, honesty
Security– Freedom from danger, risk, doubt
Understanding/Knowing the Customer– Making effort to understand customer’s needs
Tangibles– Physical evidence of service
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Dimensions of Successful IT Functions Service quality System quality Information quality Use User satisfaction Individual impact Work group impact Organizational impact
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Source: Anthony, R.N. Planning and Control Systems: A Framework for Analysis, Cambridge, MA: Harvard University Press (1965).
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Variety in Reporting
Historical Data Statistical Data Assist managers in determining repairs Each has different characteristics
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Characteristics of Effective SLAs
Based on current “user” expectation Defined by location, function, and service type Uses benchmarks and baselines for measuring
performance Specifies minimums, penalties, and incentives Specifies reports and tracking tools to be
monitored Agreement not too few, not too many Gets adjusted periodically to reflect changes
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Negotiating a SLA
Get a Baseline Define Responsibility Allow for Modifications Ensure Reports Are in Terms Anyone Can
Understand Don’t Forget the End-User Experience
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Examples of Service Level Metrics
Application availability Average application response time Number of application crashes per unit
of time Average throughout Network availability and bandwidth Server availability
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Examples of Service Level Metrics
Elapse time to repair hardware failure Mean time between server failure Number of operating system failure per
unit of time Number of middleware failure per unit
of time Number of production jobs not
completed during batch night shift
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Questions Concerning Who Owns Measurement
Who should own measurement? Is measure a process that should be owned by
the people doing the measurement? Is it a corporate asset or cost? Is this question similar to who should own
payroll? Should the owners of internal processes that
are being measured simply own it? Does it make a difference?
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What to do with Measurements
Establish report card for performance Create effective and understandable
benchmarks Senior management needs to know current
status and effectiveness of IT
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Performance Measures for Efficient Order Management Short order lead times In-stock availability Order accuracy Access to order status information Response time to customer inquiries
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Performance Measures for Efficient Customer Management Lower inventory carrying cost Reduced human intervention Greater order accuracy Improved production planning/forecasting Lower order administration Lower number of complaints Improved customer decision making based on
preferences Increase number of automatic restocking customers Lower stock-out occurrences
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When Measurements Should be Done
Continuously Daily Weekly Monthly Semiannually Annually
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Can Enterprise Succeed Without Measurement? Only 42% of companies prepare business
case for CRM project Only 45% have centralized CRM
responsibility 57% can’t justify investments because they
don’t know how to measure customer profitability
Only 10% measure ROI
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How Does Enterprise Benefit from Measurement? Performance is related to effectiveness,
efficiency, and quality To understand process it must be measured
and compared Part of monitoring project performance Determine if vendors are performing to
service level agreements
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Next Week’s Agenda
IT Strategy (Ch-14) Student Presentations