IS577 IS Strategy and Policy Olayele Adelakun (Ph.D) Asso. Professor CTI Office: Room 735 CTI 7th Floor Phone: Fax: Web:

Agenda  Course Overview  Expectation  IS Challenges in the organization  Themes

Course Overview  Objective  Course Materials  Grading

Course Objectives  A better understanding of the variety of issues facing the various stakeholders involved in IS deployment in organizations.  A better understanding of the importance of harnessing the power of new technologies to enable them to make better decisions and more effectively manage the firms in which they work.  A better understanding of the importance of linking business strategy with IT strategy.

Course Material  HBR cases to be posted on COL

Grading Class Participation10% Assignment 120% Assignment 220% Assignment 320% Group project20%

Group Assignment 1  Up to 5 students per group.group  Conduct a research on the role of CIO in organizations What it is today and What will it be in the year Will CIO be obsolete  Deliverables Presentation due class 8 Written analysis 5 pages max.  Recommendations  Conclusion  Resources ,00.html ,00.html  OR

Group Assignment 2  Conducting an Industry Analysis Conducting an Industry Analysis See examples  Deliverables Presentation due class 9 Written analysis 5 pages max.  Recommendations  Conclusion

Question

Agenda Course Overview  Expectation?  IS Challenges in the organization  Themes

Expectations?

Agenda Course Overview Expectation?  Challenges of Managing in a Network Economy  Themes

Information Technology Management Challenges  IT or ICT has always been a source of opportunity and uncertainty, advantage and risk.  Business executives view Province of technocrats, something with little relevance to real-world business problems.  Technology executives View Thinks business executives are shortsighted, lacking the vision to exploit all that IT has to offer

Information Technology Management Challenges  Technology has become embedded in the way we define and execute strategy, the way we organizes and lead businesses, and the way we define a unique value proposition.  IT is no longer a tool for back office activities but a strategic part of most businesses.  Distance and time have become much less significant determinants of market and organization structures and processes.

Information Technology Challenges  The Rapid Evolution of IS/IT Changing both business and IT management  IT influence in large organization is pervasive, affecting the smallest department and decision- making processes to an extent not visualized few years ago  New internal organizational structures are being defined and responsibility are being reallocated in the value chain  New Industry players are emerging (ASP, mobile commerce, etc.)

Information Technology Challenges  The Rapid Evolution of IS/IT Hardware constrains Software constrains Knowledge constrains Problem of the 50 IT directors’ constrains.

Information Technology Challenges Regulated Monopoly Organization Productivity/ Efficiency Free Market Individual Individual/Group Efficiency Collaborative Enterprise and Industry Integration Value Creation Era I Era II Era III Administrative Framework Primary Target Justification/ Purpose ? ? ? ApplicationChallenges ? ? ?  Integrating Changing Technology Platforms

Agenda Expectations? Course Overview IS Challenges in the organization  Themes

Theme  Market structure and Industry Dynamics  Evolving Business Models  IT Impact  Prioritizing IT Investments  Assimilation and Organizational Learning  Buy vs. Build decisions  Partnership among key Constituencies as IT evolves  Protecting IT Assets and Managing Risks  Pervasive computing: Opportunists and Risk

Market structure and Industry Dynamics  The old industry value chain 21 st century technologies are radically changing the way we work, play, interact, learn and build business. While this technologies have dramatically expanded the opportunities that can be pursed, the fundamental economic theories that define how market, industries, and organizations are built continue to guide executive decision making and actions

Market structure and Industry Dynamics  The old industry value chain Sequential Functionally organized and transitional in nature Vertical organization structures within organization boundaries  The new industry value chain Process based Integrating the enterprise activities Boundaries are becoming fluid Partnership and the rise of virtually integrated industry

Evolving business Models  The emerging networked business models that are revolutionizing business and society are different from the Industrial business models that defined how companies conduct business throughout most of the 1990s.

IT Impact  The goal for technology use influences Its development, operating and management Impact on core operations Impact on core strategy  Impact Support, Factory, Turnaround, Strategic

Categories of Strategic Relevance and Impact Factory Support Strategic Turnaround Strategic Impact of existing IT system Low High A contingency appropriate to IT management. Strategic Impact of IT applications under development Totally depending on it Not absolutely depending on totally uninterrupted, fast response-time. IT are important but they are not fundamental to the firms ability to compete. Strategic Impact of IT on operations and future strategy is low.

Categories of Strategic Relevance and Impact Factory Support Strategic Turnaround IT Impact on core operations Low High A contingency appropriate to IT management. IT Impact on core strategy Goal: Transform the organization or industry Leadership: Senior executives or board Goal: Identify and launch new Ventures Leadership: Venture incubation unit Goal: Improve performance of core processes Leadership: Business unit executives Goal: Improve local performance Leadership: Local level oversight

Prioritizing IT Investment  Is IT as a budgeted expense to be justified on a project-by-project basis?  Is IT an investment that must deliver benefits today and in the future. Inside the organization Outside the organization

Prioritizing IT Investment: Aggregate Project Plan Minor Process change Extensive Process change Minor Process change Extensive Process change R & D Projects Breakthrough projects Platform Projects Derivative projects

Assimilation and Organizational Learning  Successful implementation of new technology often requires that users learn new ways of doing things.

Assimilating Emerging Technologies  Phase I: Technology Identification and Investment Identifying of technology of potential opportunity to the company and funding a pilot project.  Top down vs. bottom up ISP.  IS Planning: Impact / Align to align MIS objectives with the organizational goals, The other approach is to impact the organizational strategy. That is searching for strategic applications with a high impact and the ability to create an advantage over competitors.  Phase II: Technological Learning and Adaptation The objective here is to encourage user-oriented experimentation with the newly identified technology.  Through a series of user defined pilot project  To create awareness of the new technology  The length of phase II depends on type of technology, the characteristics of users, the nature of users’ tasks, and the organizational context.

 Phase III: Rationalization/Management Control At this stage it is reasonably well understood by IT personnel and users The basic challenge is to develop appropriate systems and control to ensure that the technologies are utilized efficiently as the diffuse throughout the organization Ensure that application are developed economically and can be maintained over a long period of time Failure to maintain these standards can be extraordinarily expensive  Phase IV: Maturity/Widespread Technology Transfer Required skill are developed, users are aware of IT benefits and management control are in place. Careful vigilance is required to ensure that out-of-date technologies and applications are not extended beyond their useful life Assimilating Emerging Technologies

Buy Vs. Make  If I can buy a word-processing package why can’t I buy an order fulfillment package Do I need to keep all these IT assets on my book? Or Can I outsource my data centers, helpdesk, PC support etc. Can I replace my off-the-shelf applications with subscriptions to IT services run by network and hosting services and ASPs?

Make or buy decision Business strategyIT application or infrastructure provides proprietary competitive advantage IT application or infrastructure supports strategy or operations, but is not considered strategic in its own right Core competence Information/ process security and confidentiality Availability of suitable partners Availability of packaged software or solutions Cost/benefit analysis Time frame for implementation Evolution and complexity of the technology Ease of implementation Decision Criteria Pressure to “Make/Own” Pressure to “Buy”

Partnership among key Constituencies as IT evolves  Much of the complexity of managing IT arises from the conflicting pressures of dealing with four different vitally concerned stakeholder groups: Business executives IT executives IT users IT Vendors, Partners and competitors

Protecting IT Assets and Managing Risks  Reliable, secure IT infrastructure  Integrating IT into core business processes introduces a host of new and challenging issues  IT vs. electricity

Pervasive Computing: Opportunities and Risks  Hardware costs and limitation of capacity and reliability. Limited IT personnel Mainframe computer, data processing center.  Mid Early 1980 Difficulty in delivering reliable system on time and within budget, productivity of system developers, tools limitation. Introduction of PCs  Early 1990 Communication networks Powerful desktops, Laptops, internet etc.  2000 and beyond PDA, cell phones, internet, etc. Hardware constraints Software constraints Hardware constraints User related constraints Organization environment constraints Data processing Management Information Systems Strategic Information Systems ?

Discussion  How important is IT to the success of your industry / organization Is the firm being affected competitively either by failing to implement required IT applications or by faulty implementation of strategic application If the firm missing opportunities that, if properly executed, would give it a competitive edge or, more pessimistically, enable it to survive.  Is the firm targeting its IT application development efforts effectively? Targeting the right systems and spending appropriate amount of dollar  Is the IT asset of a firm being managed efficiently?  Is the firm’s IT activity sufficiently insulated against the risks of a major operational disaster?  Are IT and business leaders capable of dealing with the IT-related management challenges?  Are IT resources appropriately placed in the firm?

Discussion  Do the perspective and skill of the IT team, IT users, and general management team fit the firm’s changing strategy and organization and the IT application, operating environment, and management processes?  Is the firm organized to identify, evaluate, and assimilate new information technologies on a timely basis?  Are the strategic planning, the management control and the project management systems defined and appropriately implemented and managed?  Are the security, priority-setting, and control systems for IT operations appropriate for the role IT plays in the firm?  Are appropriate organizational structures and coordinating mechanisms in place to ensure IT is appropriately aligned to the needs of the firm?

Agenda Expectations? Course Overview IS Challenges in the organization Themes