Slide 1 of 24 Week 1: Lecture Structure Title: Managing IT –Business importance of IT –Role of...

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Week 1: Lecture Structure

• Title: Managing IT

– Business importance of IT

– Role of CIO

– Review the IS Pyramid

– Top Business IT Issues

– Discuss the IT Infrastructure

– Case Study

– Recommended Readings

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Traditional View of IS

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Importance of IT

• IT important and necessary component of a successful organisation

• Successful management of the IT resource is a prerequisite for the success of IT as a source of competitive advantage(CA) for an organisation

• It can provide and sustain CA when used as integral part of the business strategy

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Recap - Porter’s CA Strategies

• Cost Leadership– Competing with lower costs

• Product differentiation– Competing with value

• Product focus– Competing by restricting one’s market

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The Role of IT

• IT as an enabler of eBusiness– Serve as a link among functions, customers,

suppliers, other businesses– Successes and failures more visible

• IT as a change agent– Use of IT to respond quickly to change without

altering business processes

• IT as an enabler of Globalisation– Expanding presence outside country boundaries

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Information Architecture

& IT Infrastructure

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A CIO Performance Plan

• Participate in development of corporate strategies• Foster business – IT relationship and confidence• Demonstrate business value of IT• Maintaining technology competency • Attract, retain and develop talented people• Meet project commitments• Practice sound financial principles• Faciliate change• Build a governance framework• Continuous improvement of IT processes• Manage external contractors, vendors and partners

* CIO – Chief Information Officer

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CIO Attributes

• Analyst background and orientation• Promotes IT as agent of business

transformation• Contributes beyond IT function• Accurate perception of CEO views on

business and IT• Integrates IT with business planning• Profile stresses consultative leadership and

creativity

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Role of the CIO

• Management of IT Processes– Strategic (long term)– Tactical (short term)– Operational (day to day)

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Information Systems PyramidInformation Systems Pyramid

STRATEGIC LEVEL STRATEGIC LEVEL

EIS SystemEIS System SENIOR SENIOR MANAGERSMANAGERS

TACTICAL LEVEL TACTICAL LEVEL

MIS, DSS SystemMIS, DSS System MIDDLE MIDDLE MANAGERSMANAGERS

OPERATIONAL OPERATIONAL

OPERATIONAL LEVEL OPERATIONAL LEVEL MANAGERSMANAGERS

TPS SystemTPS System

KNOWLEDGE LEVEL KNOWLEDGE LEVEL

KWS SystemKWS System KNOWLEDGE & KNOWLEDGE & WORKERS WORKERS

SALES & MANUFACTURING FINANCE ACCOUNTING HUMANSALES & MANUFACTURING FINANCE ACCOUNTING HUMAN RESOURCESRESOURCESMARKETINGMARKETING

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Examples of IS

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Business ActivitiesLevel Bank Airline Hotel Hospital

Strategic Surveys Acquisitions New Branches

New Aircraft New Destinations

New Facilities Extension

Research Facilities

Tactical New Services, Mortgages Credit Cards

Leasing Fare Reductions

Special Promotions Week End Rate

New Procedures Special Equipment

Performance ROI Branch Activity

Seat Occupancy Aircraft Flying Time

Room Occupancy Costing

Length of Stay, Reaction to Drugs Treatment

Operational Planning

Cash Flow Loan Planning

Maintenance Staff Rota Flight schedule

Staff Rota Decorating Menu Planning

Operating Theatre Scheduling Bed Allocation

Keeping Track Bank Statements Overdrafts

Freight in Transit Passenger lists

Hotel Register

Drugs Administered Patient Billing

Recording Basic Transactions

Deposits Withdrawals

Seat Bookings

Room Bookings Arrivals Departures

Admissions Check-Outs

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INTERRELATIONSHIPS AMONG SYSTEMS

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Strategic Processes

• Create competitive advantage

• Deliver cost efficiencies

• Improve business processes

• Examples– Business Strategy Planning– Architecture planning– IT Strategic planning and control

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Tactical Processes

• Immediate or short term impact• May respond to a competitor threat• Intermediate improvements to existing

operations• Majority of staff involved in these IT

processes• Tends to receive largest budget• Examples:

– Application, data, network, systems, project , security, capacity, skills and budget planning

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Operational Processes

• Cover many day-to-day functions – E.g. production, scheduling, maintenance,

resource control and admin services

• Sometimes the most critical as failure visible to external clients/customers, partners and end users

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Which Processes are Most Important

• All IT processes are important.

• Each process will contribute to the effective management and performance of IT.

• Examples– Application development is most visible to developing competitive

and strategic advantage.

– Security and recovery planning have gained greater stature because of the new threats to the stability of the systems

– Vendor management has also increased in importance, as many firms are outsourcing more of their activities

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Top Business IT Issues (CSC, 2001)

(1) Optimizing enterprise-wide IS services

(2) Aligning IS and Corporate goals (joint)

(3) Protecting and securing information systems (joint)

(4) Organising & utilising data

(5) Optimizing organisational effectiveness

(6) Connecting to Customers, suppliers and/or partners electronically

(7) Instituting cross-functional IS

(8) Implementing business transformation initiatives

(9) Updating obsolete systems

(10) Integrating systems with the internet

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Top Business IT Issues (CSC, 2001) contin…

(11) Improving the system development process(12) Educating management in IT(13) Developing an eBusiness Strategy(14) Capitalizing on advances in IT(15) Cutting IS costs(16) Using IT for competitive breakthroughs(17) Managing knowledge assets(18) Creating an Information Architecture(19) Restructuring the IS function(20) Improving the IS human resource(21) Managing complex organisational change(22) Designing the Mobile workplace

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Issue 1 - OPTIMIZING ENTERPRISE-WIDE IS SERVICES

Enterprise Systems (ERP)

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Issue 6 – Connecting to customers, suppliers and/or partners electronically

Customer Relationship Management (CRM)

Irish Case Studies

BanksHotels

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The Order Fulfillment Process

Issue 7 - Instituting cross-function IS

Integrating Functions and Business Processes

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Managing IS

• The process of managing IT in organisations is becoming increasingly complex as it becomes more important. Three major trends that impact IT management:

– Governance of IT, that is , deciding who makes which IT decisions, is shifting from being handled exclusively by IS executives to being a collaborative effort between IS and the business

– The role of IS is shifting from application delivery to system integration and infrastructure development

– Outsourcing is becoming a way of life for many IS organisations, to the extent that a major responsibility of IS is developing and managing relationships with external service providers (ESPs).

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The Organisational Environment

• How IT is used depends on the environment surrounding the organisation that uses it. Two aspects of the organisational environment include:– The external forces that are causing executives to

re-examine how their firms compete

– Internal structural forces that affect how organisation’s operate or are managed

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