Computer Organization CT213 – Computing Systems Organization.
MEIE881 The Management Information Systems Organization
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Transcript of MEIE881 The Management Information Systems Organization
MIS Organization
Define CKO, CTO, CIO, CPO, IT GovernanceDiscuss the functions typically performed in the IS organizationDiscuss the advantages, disadvantages and characteristics of centralized, decentralized and federal organizational structuresDiscuss and apply Weill‟s framework for IT Governance
Title Responsibility
Chief technology officer (CTO) Track emerging technologies
Advise on technology adoption
Design and manage IT architecture to insure consistency and compliance
Chief knowledge officer (CKO) Create knowledge management infrastructure
Build a knowledge culture
Make corporate knowledge pay off
Chief telecommunications officer (CTO)
Manage phones, networks, and other communications technology across entire enterprise
Chief network officer Build/maintain internal and external networks
Chief resource officer Manage outsourcing relationships
Chief information security officer Insures information management practices are consistent with security requirements
Chief privacy officer Responsible for processes and practices that insure privacy concerns of customers, employees and vendors are met
Figure 9.1 The CIO’s lieutenants
Chief
Information
Officer
Chief
Knowledge
Officer
Chief
Technology
Officer
Chief
Network
Officer
IS Managers
Name
Title
Systems
Developers/
Developers
Business
Analysts
Database
Administrators
Support
Personnel/
Operations
Other
Figure 9.3 Sample IS organization chart
What IS Does Not Do
Does not perform core business functions such as:Selling
Manufacturing
Accounting
Does not set business strategy.General managers must not delegate critical
technology decisions.
Centralization: Advantages
& Disadvantages
PROS
Global standards
Common data
“One voice” with suppliers
Economies of scale
Access to large capacity
Better recruitment of IT personnel
CONS
Technology may not meet local needs
Lack of business unit control
„Us‟ vs. „They‟
Slow support for strategic initiatives
Decentralization: Advantages
& Disadvantages
ADVANTAGES
Better meet local needs
Closer partnership between IT and business units
Greater flexibility
Better match with decentralized enterprise structure
Better unit control over overhead costs
DISADVANTAGES
Difficulty in maintaining global standards & consistent data
Higher infrastructure costs
Loss of control
Duplication of staff & data
Harder to negotiate preferential supplier agreements
Federalism
Structuring approach
Distributes power, hardware, software, data and personnel between a central IS group and IS in business units
IT Governance – Weill (2004)
Definition – specifying the framework for decision rights and accountabilities to encourage desirable behavior in the use of IT
Broad-based input rights
Mostly Federal (followed by IT Duopoly)
High IT governance performers could describe IT governance
(but not low IT governance performers)
IT duopolies for IT principles and investments
IT Governance Archetypes
CxO Level Execs
Corp IT and/or BU IT
BU Leaders or Process Owners
Business Monarchy
IT Monarchy
Feudal
Federal
IT Duopoly
Anarchy
Top Three Overall
Governance Performers
IT Principles
IT Architecture
IT Infrastruc-ture
Business Application Needs
IT investment & Priorit.
Bus Monarchy
IT Monarchy
Feudal
Federal
Duopoly
Anarchy
IT Governance CSFs
1. Transparency2. Actively designed3. Infrequently redesigned4. Education about IT governance5. Simplicity (few performance goals)6. An exception handling process (for new
opportunities)7. Governance designed at multiple
organizational levels8. Aligned incentives
Information Security
Decision
Recommended
Archetype
Rationale
Information Security
Strategy
Business monarchy Business leaders have the knowledge of the company‟s
strategies, upon which security strategy should be based. No
detailed technical knowledge is required
Information Security
Policies
IT duopoly Technical and security implications of behaviors and processes
need to be analyzed and tradeoffs between security and
productivity need to be made. Need to know the particularities of
company‟s IT infrastructure.
Information Security
Infrastructure
IT monarchy In depth technical knowledge and expertise is needed.
Information Security
Education/Training/
Awareness
IT duopoly Business buy-in and understanding are needed; Technical
expertise and knowledge of critical security issues is needed in
building programs.
Information Security
Investments
IT duopoly Requires financial (quantitative) and qualitative evaluation of
business impacts of security investments. Business case has to
be presented for rivaling projects.
Matching Information Security
Decisions and Archetypes
Outsourcing
Discuss the reasons for outsourcing
Discuss disadvantages of outsourcing
Discuss conditions when outsourcing is appropriate
Define backsourcing and describe the reasons for backsoucing
Discuss structuring and managing the outsourcing arrangement
Describe open sourcing and strategies for its use
Offshore sourcing
Define offshore sourcing, captive center, nearshoring
Discuss reasons for and challenges of offshore sourcing
Describe steps clients take in finding a provider
Describe steps providers take in acquiring clients
Make
or Buy
Is This
Working
Insourcing
Outsourcing
Offshoring
Backsourcing
Sourcing Decisions
Nearshoring
Outsourcing
The purchase of a good or service from another company
Farm out data center operations (facilities management)
Farm out tasks and services
Farm out systems development
May transfer IS function to vendor
Saving $$$: Provider
Advantages
Tighter overhead cost control
More aggressive use of low-cost labor pools
More effective bulk purchases and leasing arrangements
Better management of excess hardware capacity
Better control over software licenses
Hustle (Staying alive)
Creative and more realistic structuring of leases
Leaner management structure because of increased competence and critical mass volumes of work
Outsourcing
Disadvantages
Reliance on vendor/partner
Loss of control
Considerations about security/confidentiality
Evaporization of cost savings
Loss of competitive advantage
Slight of hand with employees
Outsourcing strategies
DECISIONCRITERIA
“MAKE”PRESSURE
“BUY”PRESSURE
CoreCompetency
Often core* Oftensupport*
Security/Confidentiality
Veryconfidential
Not highlyconfidential
SoftwareAvailability
Uniqueapplication
Softwareavailable forcommonproblem
Outsourcing strategies
DECISION CRITERIA
“MAKE” STRATEGY
“BUY” STRATEGY
Partners No reliable, competent, motivated, or financially stable partners available
Suitable partners available
Time Frame Time available for application development
Available time too limited
IT Professionals
Available in- house
Not available in-house
Backsourcing
Bringing an outsourcing arrangement back in house
Reasons
Economic
Strategic
Relationship
Power
Structuring the Alliance
Flexible contract ( a lot can happen over 10 years)Shorten length
Termination clause
Detailed performance standardsService levels (terminal response times)
Baseline period measurement
Growth rates
Service volume fluctuations
Resolution of performance disputes
Structuring the Alliance
Partial vs. complete outsourcing
Multiple vendors
Cost savings
Multiple evaluations
Outside consultants
Structuring the Alliance
Supplier stability and quality
Conflict of interests
Management fit
Conversion problems
Managing the Alliance
Strong CIO function
Partnership/contract management
Architecture planning
Emerging technologies
Continuous learning
Service Oriented Architecture
Managing the Alliance
Performance measurements – continuous
Low-structured tasks more difficult to outsource
Low-structured task provide higher margins for provider
Customer-outsourcer interface
Specified account manager in provider company
Offshore sourcing
Captive center – offshore center owned by the client company
Offshore sourcing (offshoring) – sourcing to a company outside the home country
Nearshoring – sourcing service work to a foreign, lowewr-wage country that is relatively close in distance or time zone (or both).
Most common offshore sourcing IT activities
Maintenance
Testing
Coding
Make
or Buy
Is This
Working
Insourcing
Outsourcing
Offshoring
Backsourcing
Where do Captive Centers Fit?
Captive Centers
Hybrid CaptivePerforms core business processes for parent
company
Outsources noncore work
Shared CaptivePerforms work for parent company and
external customers
Divested Captive
Terminated Captive
Estimates on Market SizesCarmel & Tjia, 2006
2003 2008 (est)
Global Market of IT Services
$536 billion at 6.2%
N/A
Global Market of IT-enabled Services
$405 billion at 8% $680 billion
Indian R&D sourcing
$1.3 billion $9.1 billion
Global [offshore] sourcing of software & services
$10 billion; total savings from offshoring by US corps -$6.7 billion
$21 billion; total savings from offshoring by US corps -$31 billion
Demand for offshore work
Most aggressive offshore consumers are in US; Within Europe, UK is most active
Most active industries: financial services (banks, investment firms, insurance cos) and technology firms (software, hardware & telecommunications)
Motivation: cost savings, flexibility, accessing talent, follow-the-sun
100 nations are now exporting software services and products
http://www.youtube.com/watch?v=LnhTQFHkgmw
Wages for Software
Professionals Carmel & Tija 2005
USA $63,000 Mexico $7,000
Canada $57,000 India $5,000
UK $45,000-$99,000
Russia $5,500-$7,500
Japan $44,000 Indonesia $5,000
Singapore $43,000 Ukraine $5,000
Israel $39,500 Poland $4,800
Ireland $23,000 Pakistan $3,600
Brazil $20,000 China $3,000
South Africa $18,000 Vietnam $1,400
Extra offshore costs (%)
Carmel & Tija 2005
Meta Grp CIO
Search & Contract 1-2 0.02 - 2
Process changes 1-10 1-10
Efficiency/lost productivity 0-20 3-27
Governance 5-7 6-10
Communication/cultural 3-8
Travel 2-3
Turnover – offshore site 1-2
Restructuring/transitioning 5-8
Total Extra Costs 12-52% 15-57%
Offshore challenges
Communication breakdown
Coordination breakdown
Control breakdown
Cohesion barriers
Culture clash
Offshoring from client
Perspective
Laying the foundation
Identifying providers
Assessing and selecting the provider
Laying the foundation
Assess your offshoring readiness (project management maturity, risk assessment, organizational flexibility, offshore experience)
Set up powerful launch team
Hire external expert
Create a strategy and a plan
Select right project
Identifying the providers
Locate providers
Select country (language, general software skills, government, travel time)
Develop criteria for provider selection
Write RFI/RFP
Assessing and selecting the
provider
Due diligence
Check references
Set up local meetings to discuss their abilities and your criteria
Pay attention to soft elements (i.e., trust, feeling comfortable
Offshore visit
Make recommendation and contract negotiations
Marketing offshore services:
Provider Perspective
Fierce competition: 4000 companies in low cost countries
Quality of service can‟t be judged until after the service is consumed
Many IT services companies founded by technical professionals – not marketeers
Characteristics: Successful IT
Services Exporters International Trade Center
A truly international outlook (and desire) for exporting
A long-term commitment to exporting
May take 2-3 years to generate business
Thorough research into new markets and development of export plans
An international reputation for quality.
First Steps
Create realistic business planTypes of offshore services required by market
Assess competitors and their place in market
Best ways to enter target market
Seek business intelligence
Define target marketsMarket size
Linkages (linguistic, historic, geographic, diaspora)
Set up local base (sales office; representative)
Conduct SWOT analysis
Local Marketing Activities
Generate client leads
“numbers game”
Trade fairs
Marketing material
Seminars
Public relations
Business Discussions with
Clients
Know client typesKnow offshoring champions in firm
Start with low-risk projects
Cultivate long-term relationships
Know clients‟ cultures
Build trust
Create country branding (with trade associations and government offices)
Offshoring Issues
Onshore Outsourcing
IS Outsourcing Bad for the US?
Open Sourcing
The process of building and improving “free” software by an Internet community
Release early and often
Delegate as much as possible
Archive and manage the versions
Be as open as possible
Free Software
The freedom to run the program for any purpose.
The freedom to study how the program works, and adapt it to your needs. Access to the source code is a precondition for this.
The freedom to distribute copies so that you can help your neighbor.
The freedom to improve and release your improvements to the public, so that the whole community benefits. Access to source code is a precondition for this GNU Project- Free Software Foundation, “The Free
Software Definition,” http://www.gnu.org/philosophy/free-sw.html, Downloaded 4/3/02.