Presentation on theme: "Chapter 11 Information Systems Management"— Presentation transcript:
1 Chapter 11 Information Systems Management Jason C. H. Chen, Ph.D.Professor of MISSchool of Business AdministrationGonzaga UniversitySpokane, WA 99258
2 “… You’ve Got a Fox in Charge of a Hen House.” IS management is a mess.New maintenance supervisor oversees IS, but has no IS backgroundIS manager has a conflict of interestInherited some contractor developed applications.Access to servers is wide openFox Lake’s general manager needs to get actively involved in IS management
3 Chapter PreviewInformation systems are critical to organizational success, and like all critical assets, need to be responsibly managed, in organizations both large and small.In this chapter, we will survey the management of IS and IT resources. We begin by discussing the major functions and the organization of the IS department.Then we will consider each of the major functions in greater detail: planning the use of IT/IS, creating and managing the computing infrastructure, creating and managing enterprise IS, and protecting organizational information assets.
4 Chapter Preview (cont.) The pros and cons of outsourcing and describing some of its risks are presented.Finally, the chapter concludes with a discussion of the relationship of users to the IS department. In this last section, you will learn both your own and the IS department’s rights and responsibilities.The goal of the chapter is to give you an appreciation for the scale and complexity of the IS management task and to help you become an effective consumer of IS services.
5 Study QuestionsQ1 What are the functions and organization of the IS department?Q2: How do organizations plan the use of IS?Q3: What are the advantages and disadvantages of outsourcing?Q4: What are your user rights and responsibilities?Q5: 2022?
6 Types of Sourcing Sourcing Offshoring In _______ Out _______ Crowd ___________
7 Q1: What are the Functions and Organization of the IS Department? Major functions of information systems departmentPlan how to use IS to accomplish organizational goals and strategyManage outsourcing relationshipsProtect information assetsDevelop, operate, and maintain organization’s computing infrastructureDevelop, operate, and maintain enterprise applications
8 Functions and Organization of the IS Department Each organization’s IS structure varies depending on these factors:_______________________ __________________Other factorsSizeCultureCompetitive environmentIndustry
9 How is the IS Department Organized? This organizational structure chart shows the typical top-level reporting relationships. Depending on the organization, the Chief Information Officer (CIO) may report to the Chief Executive Officer (CEO), the Chief Operating Officer (COO), or the Chief Financial Officer (CFO).Fig 11-1 Typical Senior-level Reporting Relationships
10 How Is the IT Department Organized? Chief Information Officer (CIO)Principal managerReports to CEO, COO, or CFOTechnology officeHead: Chief Technology Officer (CTO)Investigates new information systems technologies for possible application at organizationOperationsManages computing infrastructure
11 How Is the IT Department Organized? DevelopmentManages process of creating new information systemsMaintains existing systemOutsourcing relationsHandles affairs with outsourced systemsData administration staff functionsEstablishes data standards and data management practices and policies
12 INFORMATION SYSTEMS (MIS/IS) Each project team should include the following three types of people:1) top/middle management2) technical professional (e.g., MIS, accounting)3) USERSORGANIZATIONSINFORMATIONSYSTEMSTECHNOLOGYMANAGEMENTDr. Chen, The Challenge of the Information Systems TechnologyTM -12
13 Q/AT/F If an organization does not develop programs in-house, then the development group of the IS department will include programmers, test engineers, and technical writers.Answer: ________FALSE
14 What IS-Related Job Positions Exist? Fig Job Positions in the Information Systems Industry
17 IT Position Requirements (Very Important to Your Future Career!) p.390 Most positions require business knowledge plus technical knowledgeMany require university degreesMost require good verbal and writing skillsThink dual majors with MIS/CIS to enhance your marketability (competitive advantage)Accounting and information systemsMarketing and information systemsManagement and information systemsOperations and information systemsHRM and information systems
18 Q2. How Do Organizations Plan the Use of IS Q2 How Do Organizations Plan the Use of IS? Major IS Planning FunctionsThe figure below shows the necessary steps an organization must take to plan how it will use IS and IT and to make sure both of them support the organization’s strategy.The CIO is responsible for most of these items. It’s a never-ending process as organizations change, grow, or merge with other companies.The steering committee, a group of senior managers from major business functions, works with the CIO to set IS priorities, make decisions about major IS projects, and serve as a communication channel between users and the IS function.Fig 11-3 Planning the Use of IS/IT
19 Explain How You Would Respond to Each Situation. Playing computer games during work hoursPlaying computer games before and after work hoursResponding to s from an ill parentWatching DVDs during lunch and breaksSending s to plan a party that mostly involves people from workSending s to plan a party that mostly involves no one from workUpdating your Facebook pageReading news on CNN.comChecking stock market over InternetTweeting friends on your computer about your softball win last night.Selling personal items on eBayPaying personal bills onlinePaying personal bills online when traveling on company businessBuying an airplane ticket for an ill parent over the InternetChanging content of a personal Web siteChanging content of a personal business Web siteBuying an airplane ticket for a personal vacation over Internet
20 Align Information Systems with Organizational Strategy As strategies change, as the organization merges with other organizations, as divisions are sold, IS must evolve along with the organization.Changing a network requires time and resources. Integrating disparate information systems applications is even slower and more expensive.Without a persuasive CIO, IS can be perceived as a drag on the organization’s opportunities.
21 Q/AWhich of the following is a function of the steering committee for an IS department?A) writing program codeB) imparting trainingC) adapting softwareD) setting IS prioritiesAnswer: ______D
22 Information System Strategy Triangle Business (Firm)StrategyWhere is the business going and why?Direction for businessNeeds and prioritiesIT impact and potentialInfrastructure and servicesSupports businessOrganizational StrategyIS/IT StrategyFail to balance these three strategiesIS fail to support business goalsIS fail to support organizational systemMisalignment between business & org. strategiesA business strategy is a well-articulated vision of where the business seeks to go and how it expects to get there; An organizational strategy is the organization’s design, as well as the choices it makes to define, set up, coordinate, and control its work processes; IS strategy is the plan the organization uses in providing information systems and services.IS strategy can itself affect and is affected by changes in a firm’s business and organizational strategies. Moreover, IS strategy always has consequences – intended or not – on business and organizational strategies.Business strategybusiness decisions; -- Objective and direction; -- Change;Organizational strategy-- A plan that answers the question: How will the company organize in order to achieve its goals and implement its business strategy?Thus, it is a plan for organizational design, and choices the firm makes that define, set up, coordinate, and control its work processes.business based; - Demand oriented; - Application focusedIS/IT strategyactivity based; -Supply oriented; -Technology focusedGain strategic advantage by using IT …It consists of four major elements: 1) Architecture/Infrastructure, 2) MIS Organization, 3) Funding and 4) Project ManagementWhat is required?How it can be delivered?1. Architecture/Infrastructure2. MIS organization3. Funding4. Project ManagementN
23 Information System Strategy Triangle A business strategy is a well-articulated vision of where the business seeks to go and how it expects to get there.An organizational strategy is the organization’s design, as well as the choices it makes to define, set up, coordinate, and control its work processes.IS/IT strategy is the plan the organization uses in providing information systems and services.
24 Communicate Issues to the Executive Group CIO provides the IS perspective during discussions of problem solutions, proposals, and new initiatives.For example, when considering a merger, it is important that a company consider integration of information systems in the merged entities. This consideration needs to be addressed during evaluation of merger opportunity.
25 Develop Priorities and Enforce Them Within the IS Department CIO must ensure that priorities consistent with overall organizational strategy are developed and communicated to IS department.Must also ensure that IS department evaluates proposals and projects for using new technology in light of those communicated priorities.
26 Sponsor the Steering Committee Steering committee is a group of senior managers from major business functions that works with the CIO to set IS priorities and decide among major IS projects and alternatives.Provides a forum where information systems personnel can discuss potential IS initiatives and directions with the user communityProvides a forum where users may express their needs, frustrations, and other issues they have with the IS department
27 Q3. Outsourcing: What and Why? Outsourcing is the process of hiring another organization to perform a service. Outsourcing is done to save costs, to gain expertise, and to free up management time.Any value chain business activity can be outsourced“Your back room is someone else’s front room.” (Peter Drucker)Drivers (at least four advantages) include:Reducing ________Transition to new _____________Focus on _______ business strategies;Provide better management and focus of IT personnel.Disadvantages are present in outsourcing and include:Losing _________________ to undue decisions, etc.costs;technologies;Drivers:1. Cost-effective access to …2. Avoidance of …, primarily an issue for SMALL and very low-technology organization3. Outsourcing during this period was important, but, in retrospect, largely peripheral to the main IT activities that took place in midsized and LARGE organization.Example:1) Kodak’s decision in 1990 to oursource its IT was the first real WAKE-UP call.2) Midsized and large organization: apply outsourcingSmall and medium-sized: ONLY with problematic, grossly mismanaged IS departments.Large Outsourcers: EDS, CSC (Computer Science Corp.), IBM (Global Services), Andersen-Consulting (Accenture), etc.Backsourcing is when a company brings back previously outsourced IS functions.corecontrol,Expensive
28 Sourcing Decision Cycle Framework Sourcing involves many decisions (Figure 11 Extra-1).The first step is the make or buy decision.If buy is selected then the company must decide where.If the company decides to go offshore it must decide if the offshore company is near or far.Periodic evaluation must take place.Continual evaluation is needed to determine if the arrangement is satisfactory or not (either for outsourcing or insourcing).28
29 Where & how the sourcing should be delivered? (overseas subsidiary)Where & how the sourcing should be delivered?(distant land)(proximate)BUYMAKENearsourcing is-- “sourcing service work to a foreign, lower-wage country that is relatively close in distance or time zone or both”-- Distance and language (and/or culture) matter.Captive center:-- An overseas subsidiary that is set up to serve the parent company.-- Alternative to offshoring or nearshoring.Backsourcing is when a company brings back previously outsourced IS functions.BacksourcingFIGURE 11 Extra 1 SOURCING DECISION CYCLE FRAMEWORK29
30 Outsourcing Information Systems Outsourcing, the process of hiring another organization to perform a service, can provide advantages like the ones shown in this figure.India is the most popular foreign outsourcer because of its large, well-educated, English-speaking population who earn 20 to 30 percent less in labor costs than their U.S. counterparts.International outsourcing is well-suited to 24/7 operations like customer support.Some say outsourcing is a threat to U.S. technology leadership.Fig 11-4 Popular Reasons for Outsourcing IS Services
31 Risk Reduction Caps financial risk Ensures certain level of quality, or avoids having substandard qualityVendor assumes responsibility for hardware, software, network protocol selection, and knowing applicable tax lawsEasier to hire another vendor than to fire and rehire internal staff.
32 International Outsourcing IndiaLarge, well-educated, English-speaking, labor cost 70-80% less than in US.China and other countries.Modern telephone technology and Internet-enabled service databasesCustomer support and other functions operational 24/7.
33 What Are the Outsourcing Alternatives? This figure shows alternatives businesses have for outsourcing some or all of their information system components.Major categories of alternatives by information systems componentsOracle, EDSAmazonSalesforce.comOracle/PeopleSoft Web storefrontOracle IaaS CloudEmployee TravelIaaS: Infrastructure-as-a-ServiceSaaS: Software-as-a-ServiceFig 11-5 IS/IT Outsourcing Alternatives
34 There are a lot of risks to outsourcing information systems as this figure describes. Fig 11-6 Outsourcing Risks
35 Q/AWhen a company outsources a system, it no longer has control over prioritizing fixes for software failures and problems.Answer: _______TRUE
36 Write shorter contracts - less than ___ years 5 When to Outsourcing?Which IS activities are strategic to our company's business?Will outsourcing save us at least ____ percent?Does our firm have access to the needed technology and expertise?If not, outsourcing may be the answer to acquiring these resources.Does outsourcing increase our firm's flexibility?15Does outsourcing increase our firm's flexibility?Outsourcing shifts capital budgets to operating expenses, which can give a firm more financial flexibility. Furthermore, outsourcing may free up personnel to work on new systems, while the outsourcer maintains the existing ones. Also, it can increase the firm's flexibility for acquiring new technologies sooner.Outsourcing is an important question facing today's IS executives. There are four activities that management should not outsource: strategy, the architecture of the system, the decisions about when to introduce IS into the organization, and management of the vendor.Write shorter contracts - less than ___ years5
37 INSOURCING What is the example(s) mentioned in the Friedman’s Video (The World is Flat)? 37
38 Crowdsourcing Definition: Taking a task traditionally performed by an employee or contractor, and outsourcing it to an undefined, generally large group of people, in the form of an open call.Used by companies to increase productivity, lower production costs, and fill skill gaps.Can be used for a variety of tasks.Companies do not have control over the people doing the work.Has cost more than traditional methods.38
39 Q4: What Are Your IS Rights and Responsibilities? Fig User Information Systems Rights and Responsibilities
40 Q4: What Are Your IS Rights and Responsibilities? (cont’d) Fig User Information Systems Rights and Responsibilities
41 Q/AWhich of the following is true about the changes and developments foreseen for 2022?A) Licensed, off-the-shelf software will become less configurable, less adaptable, and less flexible.B) Fewer applications will be developed in-house and software customization will become easier.C) Better-skilled employees will be needed to adapt software to increasingly unique organizational needs.D) Small computing devices will become more expensive and lose their popularity.Answer: ______B
42 Q5: 2022? Hardware infrastructure will migrate to cloud Licensed, off-the-shelf software more configurable, adaptable and flexible.iOS devices and other, small computing devices will become cheaper and more popular.Fewer and less-skilled employees neededLoss of control of employees’ use of IT
43 You have certain rights and responsibilities with regard to the IS department that supports you in your job. Here is a list of them.Fig 11-7 User Information Systems Rights and Responsibilities