ManagingManagingth Th T f ITthe Three Types of IT

Allen LinDepartment of Information Management, NCU at Taiwan

Three tasks for managing the three types of IT

IT selection If the IT capabilities organization d i1 desire1

IT adoption The creation of complements2

TechnologiesIT exploitation

gCapabilitiescomplements

Stay aligned3

2

p

1 2 3

IT IT IT

1 2 3

selection adoption exploitation

F ti ITFunction IT(FIT)

Network IT(NIT)( )

Enterprise IT(EIT)

3(EIT)

1 2 3

IT IT IT

1 2 3

selection adoption exploitation

F ti ITFunction IT(FIT) ●

Network IT(NIT)

●( )

Enterprise IT(EIT)

●

4(EIT)

Problems in IT selectionProblems in IT selection

• Many companies buying IT don’t make any sense.y

• Because ofE dl l

Between 1999 and 2001 American– Endless supply

– Outside-in approach

2001, American companies spent $130 billion on IT$130 billion on ITthey never used

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We should use an inside-outapproach to think in IT selection

• What do we need IT to do for us?– Do our company’s engineers need to increase p y g

their experimentation capacity? (FIT)Do our sales and marketing departments– Do our sales and marketing departments need to collaborate more often? (NIT)

– Do we need to standardize fulfillment processes throughout the world ? (EIT)

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More questions to think

I it i t t t h i l fin IT selection

• Is it more important to have a single source of employee data or to get weekly reports from the sales force about client contacts?the sales force about client contacts?

• Would the R&D department be better off if it could conduct more simulations or if it had ancould conduct more simulations or if it had an online space for brainstorming?

• Would it be more valuable to enhance the• Would it be more valuable to enhance the enterprise system by adding a layer of analysis software or by extending it to suppliers through asoftware or by extending it to suppliers through a private data exchange ?

7Inside-out approach, focus the need of organization

Case of IT selection CiscoCase of IT selection - Cisco

• How Cisco used the inside-out approach to refocus the IT selection process– Cisco realized that there were drawbacks in its IT

decision-making process as it was trying to recover in l t 2001 f f ll ilate 2001 from a fall in revenues.

– CIO of Cisco found that Cisco had nine order status tools Each of them used data from differenttools. Each of them used data from different sources, which used different definitions for key terms.

– As a result, the systems couldn’t give the company a clear picture of its orders.

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p

Case of IT selection Cisco (cont )Case of IT selection – Cisco (cont.)

Th i il bl i th l– There were similar problems in the sales organization.B t d hi ll li d th t Ci– Boston and his colleagues realized that Cisco needed to improve its standardization and monitoring capabilities so they selected anmonitoring capabilities, so they selected an upgraded ERP system and a customer databasedatabase.

– Since Cisco couldn’t gain the capabilities it wanted without those technologies howeverwanted without those technologies, however, it chose to invest in them.

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1 2 3

IT IT IT

1 2 3

selection adoption exploitation

F ti ITFunction IT(FIT) ●

Network IT(NIT)

●( )

Enterprise IT(EIT)

●

10(EIT)

IT adoptionIT adoption

• Because:– Putting the technologies company have g g p y

invested in to productive use was a hard work.

• So:At thi t ’ i ibilit i– At this stage, managers’ main responsibility is to help create the complements that will

i i IT’ lmaximize IT’s value.

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IT adoption for FITIT adoption for FIT

• FIT doesn’t bring its complements with it, so managers must find ways of , g yidentifying them.

BMW’s chief designer, Chris Bangle, g , g ,want employee use computer-aided

styling software. But, employee don’t want to use. Then chief designer pressured (complements) them, at

last they do it12

last they do it.

IT adoption for NITIT adoption for NIT

• Voluntary rather than mandatory, they make users feel more, rather than less, in , ,control of their work. Their adoption isn’t difficultdifficult.

• However, new technologies, such as groupware, wikis, and blogs, still have to intervene (complements).( p )

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EIT hard to adoptEIT hard to adopt

Alth h• Although– The benefit look great to people at the top.

• But – Employees usually dislike EIT technologiesEmployees usually dislike EIT technologies.

• BecauseEIT d fi f ti b i– EIT define new cross-function business processes.I th l ith t– Impose the processes on employees without allowing employees to modify them.

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Method to cope with the hard adoption of EIT

• Executives must intervene forcefully(complements) throughout EIT adoption ( p ) g pefforts.

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Method to cope with the hard adoption of EIT (cont.)

• The most important participants in this task are not IT specialists or consultants pbut business leaders from the areas affected by the new technologyaffected by the new technology.

Cisco set up a business process operating committee

CVS EIT project leader process operating committee

that consisted of six senior executives and the CIO, they

t bli h d th l t

had the authority to deploy the new processd it iti f established the complements

that the technology needed even though there was

despite opposition from the chain’s pharmacists.

16resistance within the

organization.

1 2 3

IT IT IT

1 2 3

selection adoption exploitation

F ti ITFunction IT(FIT) ●

Network IT(NIT)

●( )

Enterprise IT(EIT)

●

17(EIT)

IT exploitationIT exploitation

• Extract the maximum benefit from technologies once they are in place.g y p

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IT exploitation for FITIT exploitation for FIT

• Companies can best exploit FIT by fine-tuning organizational complements.g g p

• (1995) American’s C iliCup sailing competition, used

i l tisimulation software to help h d i bthem design boat

keels.19

IT exploitation for NITIT exploitation for NIT

• Employees exploit older NITs: e-mail and instant messaging.g g

• Business leaders exploit newer NITs: blogs and wikisblogs and wikis.

• They can help sustain and increase the use of complements to make the technology continually more effective.technology continually more effective.

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Example for NIT exploitationExample for NIT exploitation

• Dresdner Kleinwort company, p y,Darren Leonard recalls how he got his colleagues to use g gthe company’s wiki.– agenda for an upcomingagenda for an upcoming

meeting– post questions, edit them, and

accelerate wiki usepost questions, edit them, and

discuss– assignment

wiki use

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assignment

IT exploitation for EITIT exploitation for EIT

• EIT’s exploitation is often easier than its adoption.p

• Since the work of imposing new processes is done by this stage the manager’s taskis done by this stage, the manager s task is to leverage already standardized data

fand work flows.

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EIT sometimes requires adding FIT to help get better

Food services giant Syscoimplemented an ERP system and

data warehouse across its 80 regional business.

Sysco invested in businessSysco invested in business intelligence software, which sits

on top of the ERP systemon top of the ERP system, extracts data from it, and

facilitates its analysis23

facilitates its analysis.

ConclusionConclusion

• For a resource to have an impact on company’s competitive position, it must be p y p p ,valuable, rare, inimitable, and non-substitutablesubstitutable.

• What about IT ?• All three IT categories fail to meet these

criteria.criteria.

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Conclusion (cont )Conclusion (cont.)

• However, software itself might not be any of those things, a successfully g , yimplemented system isn’t easy to replicate.

• Because of the managerial challenges• Because of the managerial challenges inherent in its implementation, IT meets

fall four criteria when a company succeeds in applying a technology and, pp y g gyconsequently, gains valuable capabilities.

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ThanksThanksThanksThanksf tt tif tt tifor your attention..for your attention..

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