McGraw-Hill/Irwin ©2008,The McGraw-Hill Companies, All Rights Reserved Chapter 12 Enterprise and Global Management of Information Technology

12- 2 Learning Objectives 1.Identify each of the three components of information technology management, and use examples to illustrate how they might be implemented in a business. 2.Explain how failures in IT management can be reduced by the involvement of business managers in IT planning and management. 3.Identify several cultural, political, and geoeconomic challenges that confront managers in the management of global information technologies.

12- 3 Learning Objectives 4.Explain the effect on global business/IT strategy of the trend toward a transnational business strategy by international business organizations. 5.Identify several considerations that affect the choice of IT applications, IT platforms, data access policies, and systems development methods by a global business enterprise. 6.Understand the fundamental concepts of outsourcing and offshoring as well as the primary reasons for selecting such an approach to IS/IT management.

12- 4 Managing Information Technology Managing the joint development and implementation of business and IT strategies –Use IT to support the strategic business priorities –Align IT with strategic business goals Managing the development and implementation of new business/IT applications and technologies –Managing information systems development Managing the IT organization and IT infrastructure –Hardware, software, database, networks and other resources

12- 5 Components of Business/IT Planning Strategy Development –Developing business strategies that support a company’s business vision Resource Management –Developing strategic plans for managing or outsourcing a company’s IT resources Technology Architecture –Making strategic IT choices that reflect an information technology architecture designed to support a company’s business/IT initiatives

12- 6 Information Technology Architecture Technology Platform –Networks, computer systems, system software and integrated enterprise application software Data Resources –Operational and specialized databases –Store and provide data and information for business processes and decision support

12- 7 Organizing IT Early years: centralization of computing with large mainframes Next: downsizing trend with a move back to decentralization Current: centralized control over the management of IT while serving strategic needs of business units –Hybrid of both centralized and decentralized components

12- 8 IS Operations Management Use of hardware, software, network, and personnel resources in the corporate or business unit data centers of an organization Includes computer systems operations, network management, production control and production support Data centers are the computer centers of an organization

12- 9 System Performance Monitors Software packages that –Monitor the processing of computer jobs, –Help develop a planned schedule of computer operations that can optimize computer system performance, and –Produce detailed statistics that are invaluable for effective planning and control of computing capacity

Features of Systems Performance Monitors Chargeback Systems –Allocate costs to users based on the information services rendered Process Control Capabilities –Systems that not only monitor but automatically control computer operations at large data centers

IT Staff Planning Recruiting, training and retaining qualified IS personnel Evaluate employee job performances and reward outstanding performances with salary increases and promotions Set salary and wage levels and design career paths so individuals can move to new jobs through promotion and transfer as they gain in seniority and expertise

IT Executives Chief Information Officer (CIO) –Oversees all uses of information technology in many companies, and brings them into alignment with strategic business goals Chief Technology Officer (CTO) –In charge of technology management: all information technology planning and deployment –Managing the IT platform –Second in command

Managing User Services Business units that support and manage end user and workgroup computing Can be done with information centers staffed with user liaison specialists Or with Web-enabled intranet help desks

Outsourcing The purchase of goods or services from third- party partners that were previously provided internally

Outsourcing’s Top Ten

Why outsource? Save money – achieve greater ROI Focus on core competencies – organization can focus on the business that they are in Achieve flexible staffing levels Gain access to global resources Decrease time to market

Offshoring Relocation of an organization’s business processes To a lower-cost location, usually overseas

IT Management Failures IT not used effectively –Computerize traditional business processes –Instead of developing innovative e-business processes IT not used efficiently –Poor response times and frequent downtimes –Poorly managed application development projects

Management Involvement and Governance Managerial and end user involvement –Key ingredient to high-quality information systems performance Involve managers in the management of IT –Governance structures such as steering committees

Senior management’s involvement in business/IT decisions

Global IT Management Develop appropriate business and IT strategies for the global marketplace Develop the portfolio of business applications needed to support business/IT strategies Determine the technology platform needed Determine the systems development projects that will produce the required global information systems

Global IT Management Dimensions

Political Challenges Rules regulating or prohibiting transfer of data across national boundaries Severely restricted, taxed, or prohibited imports of hardware and software Local content laws that specify the portion of the value of a product that must be added in that country if it is to be sold there Reciprocal trade agreements that require a business to spend part of the revenue they earn in a country in that nation’s economy

Geoeconomic Challenges Sheer physical distances Difficult to get good-quality telephone and telecommunications services Differences in the cost of living and labor costs

Cultural Differences Languages Cultural Interests Religions Customs Social Attitudes Political Philosophies

Transnational Strategies Business depends heavily on its information systems and Internet technologies to help integrate global business activities Develop an integrated and cooperative worldwide IT platform

Global Business Drivers Business requirements caused by the nature of the industry and its competitive or environmental forces Examples of drivers: –Global Customers –Global Products –Global Operations –Global Resources –Global Collaboration

International Data Communications Top 10 Issues

Internet as a Global IT Platform Technology platform free of many traditional international boundaries and limits Expand markets, reduce communications and distribution costs, and improve profit margins without massive cost outlays for telecommunications

Key Questions for Global Websites What kinds of traditional and new media advertising will you have to do in each country to draw traffic to your site? Will your site get so many hits that you’ll need to set up a server in a local country? What are the legal ramifications of having your website targeted at a particular country, such as laws on competitive behavior, treatment of children, or privacy?

Internet Users by World Region

U.S.-E.U Data Privacy Requirements Notice of purpose and use of data collected Ability to opt out of third-party distribution of data Access for consumers to their information Adequate security, data integrity and enforcement provisions

Internet Access Issues in Most Restrictive Countries High Government Access Fees Government Monitored Access Government Filtered Access No Public Access Allowed

Global Systems Development Conflicts over local versus global system requirements Difficulties in agreeing on common system features Disturbances caused by systems implementation and maintenance activities Global standardization of data definitions

Systems Development Strategies Parallel Development – parts of the system are assigned to different subsidiaries and the home office to develop at the same times based on the expertise and experience at each site Centers of Excellence – an entire system may be assigned for development to a particular subsidiary based on their expertise in the business or technical dimensions needed for successful development Offshore Development – outsource the development work to a global development company