Dinesh Mirchandani University of Missouri – St. Louis Information Technology: Strategic Decision Making For Managers Henry C. Lucas Jr. John Wiley & Sons, Inc Dinesh Mirchandani University of Missouri – St. Louis Copyright 2004 John Wiley & Sons, Inc.

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Management Control of Information Technology Chapter 11 Management Control of Information Technology Copyright 2004 John Wiley & Sons, Inc.

Copyright 2004 John Wiley & Sons, Inc. Control Systems The components of control systems are Standards for performance Sensory determination of actual conditions Comparison of standard with actual conditions Compensatory action if the deviation is too great Copyright 2004 John Wiley & Sons, Inc.

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Control in the Organization Controls can be created through Structure of the organization Decentralized or centralized Rewards Management committee Budget Direct supervision Procedures Routine audits help establish control Copyright 2004 John Wiley & Sons, Inc.

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Copyright 2004 John Wiley & Sons, Inc. Failure of Control Control breakdown Worldcom Qwest Global Crossing Reward systems for senior managers may have caused these control failures Stock options IS can strengthen routine control systems though they can tend to be complex Copyright 2004 John Wiley & Sons, Inc.

Control of Systems Development It is difficult to predict development time and development cost for new systems Package implementation can reduce this uncertainty Projects slip for a number of reasons Lack of user input Too few resource Too few individuals working on the project Lack of top management support Poor project management Copyright 2004 John Wiley & Sons, Inc.

Copyright 2004 John Wiley & Sons, Inc. Control of Operations The Foreign Corrupt Practices Act requires publicly held companies to devise and maintain a system of internal accounting controls pertaining to the Execution of transactions Recording of transactions Records of assets Managerial sign-off on financial statements (Sarbanes-Oxley Act) Copyright 2004 John Wiley & Sons, Inc.

Vulnerability of Systems to Transaction Processing Errors Errors and intrusion of the operating system for clients and servers Application programs errors Database security Network operating system reliability and security Adequate control of manual procedures Organizational control Network connectivity Misuse by external users Copyright 2004 John Wiley & Sons, Inc.

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Control and Electronic Commerce Security of transmitted credit card information Encryption of data Secure electronic transmission Secure payment schemes Copyright 2004 John Wiley & Sons, Inc.

Copyright 2004 John Wiley & Sons, Inc. Security Firewalls Corporate firewalls Host based firewalls Monitoring programs Virus checking Monitoring firms Can examine connectivity logs to determine hostile threats to the organization Copyright 2004 John Wiley & Sons, Inc.

Auditing Information Systems Auditors examine Databases Transactions Processing logic Controls of critical information systems Copyright 2004 John Wiley & Sons, Inc.

Copyright 2004 John Wiley & Sons, Inc. Management Issues Backup Security Budget Project management Data control Copyright 2004 John Wiley & Sons, Inc.

Copyright 2004 John Wiley & Sons, Inc. Summary Management control of IT deals with planning organizing and monitoring information processing Management issues for controlling IT include backup, security, keeping within the budget, and project management Managers need to be concerned about malicious programs that can damage computers, networks and the organization Copyright 2004 John Wiley & Sons, Inc.