1. Chapter 8 Understanding the MIS Organization
Managing and Using Information Systems: A Strategic Approach, 2nd ed.
by Keri Pearlson and Carol Saunders
Copyright © 2003 John Wiley & Sons, Inc.

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3. INTRODUCTION
This chapter focuses on the typical activities of an IS organization that facilitates interaction with management information systems (MIS) professionals
This chapter also examines the roles and tasks of the IS organization.
In addition, it addresses recent issues about organizing and controlling information resources—in particular, outsourcing, structuring, and globalization.

4. UNDERSTANDING THE MIS ORGANIZATION

5. The MIS Organization (an Analogy)
Consider an analogy of a ship in a regatta to help explain the purpose of an IS organization and how it functions.
For both the IS organization and the ship, the key is to perform more capably than any competitors.
This means employing the right resources to propel the enterprise through the rough waters of business.

6. Chief Information Officer (CIO)
Gartner group definition of the CIO’s role:
“To provide technology vision and leadership for developing and implementing IT initiatives that create and maintain leadership for the enterprise in a constantly changing and intensely competitive marketplace.”

7. The CIO’s Responsibilities
Championing the organization
Architecture management
Business strategy consultant
Business technology planning
Applications development
IT infrastructure management
Sourcing
Partnership developer
Technology transfer agent
Customer satisfaction management
Training
Business Discontinuity/Disaster Recovery Planning

8. Nine Essential CIO Skills:
Strong business orientation
Ability to realize benefits & manage costs and risks associated with IT
Ability to bridge gaps between available technologies and business needs
Familiarity with client’s needs
Strong organizational skills
Ability to conceive and build multiple IT projects
Ability to articulate and advocate for a mgmt IT vision
Ability to mesh with existing mgmt structure
Strategic enterprise vision extending beyond IT

9. Related Job Titles CKO: Chief Knowledge Officer
CTO: Chief Technology Officer
CTO: Chief Telecommunications Officer
CNO: Chief Network Officer
CRO: Chief Resource Officer
Divisional CIOs/Corporate CIO

10. Figure 8.1 The CIO’s lieutenants
Title
Responsibility
Chief technology officer (CTO)
Track emerging technologies
Advise on technology adoption
Design and manage IT architecture to insure consistency and compliance
Chief knowledge officer (CKO)
Create knowledge management infrastructure
Build a knowledge culture
Make corporate knowledge pay off
Chief telecommunications officer (CTO)
Manage phones, networks, and other communications technology across entire enterprise
Chief network officer
Build/maintain internal and external networks
Chief resource officer
Manage outsourcing relationships
Chief information security officer
Insures information management practices are consistent with security requirements
Chief privacy officer
Responsible for processes and practices that insure privacy concerns of customers, employees and vendors are met
Figure 8.1 The CIO’s lieutenants

11. Other Information Systems Organizational Roles
IS Managers
Systems Developers
Business Analysts
Database Administrators
Operations Personnel
Support Personnel
Developers
Webmaster, Web Designer, Web Developer, etc.

12. Figure 8.2 IS organization roles
Job Title
Job Description
IS Manager
Implements strategy; leads systems implementation projects
Understands both business and technology
System Developer
Writes new software applications; Upgrades and maintains existing systems
Programming abilities, cross-technology knowledge, etc
Business Analyst
Translates business requirements into implementable IT solutions
Understands core business requirements
Database Administrator
Implements and maintains the software/hardware
Knowledge of database management systems, etc
Operations Personnel
Implements/maintains software and hardware needed
Support Personnel
Run, monitor and maintain the production applications
Monitor and maintain hardware and software
Developer
Help desk, project management and desktop services, etc
Skills vary depending upon role
Webmaster
Responsible for all web activities
Knowledge of web trends
Web Designer
Designs interface for web pages
Knowledge of interface design

13. Figure 8.3 Sample IS Organizational Chart
CIO
CTO
CKO
CNO GM
IS Managers
System
Devs.
Bus.
Analysts DB
Admins.
Other
Support
Personnel

14. INFORMATION SYSTEMS ORGANIZATION PROCESSES

15. IS Organization Processes
Systems Development
Systems Maintenance
Data Center Operations
Information Management and Database Administration
Internet Services and Web-based Systems Development
Networking Services
New Technology Introduction
Resource Management
General Support

16. Insert Figure 8.4 Here

17. WHAT TO EXPECT FROM INFORMATION SYSTEMS

18. What to Expect from IS Anticipating New technologies
Strategic Direction
Process Innovation
Internal Partnerships
Supplier Management
Architecture and Standards
Human Resource Management

19. ANTICIPATING NEW TECHNOLOGIES

20. Anticipating New Technologies…
Business and IS staff must work closely to evaluate which technologies can best advance the business strategy.
It is the job of the IS department to scout new technology trends and help the business integrate them into planning and operations in terms of the following 

21. Steps in Anticipating New Technologies:
Strategic Direction
Process Innovation
Supplier Management
Architecture and Standards
Business Continuity Planning
Human Resource Management
Most IS activities fall within the above categories, however, business managers can also anticipate the user management activities shown in the next slide

23. WHAT THE INFORMATION SYSTEMS ORGANIZATION DOES NOT DO

24. What IS doesn’t do…
There is still a need for management to partner with IS to make sure business goals and needs are met.
General managers generally set the business strategy, not IS professionals.

25. ORGANIZING AND CONTROLLING IS PROCESSES

26. Outsourcing
Since the 1970s, IT managers have turned to outsourcing as an important weapon in the battle to control costs.
Outsourcing means the purchase of a good or service that was previously provided internally – with IT outsourcing an outside vendor provides IT services traditionally provided by the internal MIS department.
Over the years, however, motives for outsourcing have changed.

27. Factors driving outsourcing
Cost savings
Qualified IT staff are difficult to find and retain
By bringing in outside expertise, management needs to focus less on IS operations and more on the information itself.
Outsourcers are specialists, should understand how to manage IS staff more effectively.
Outsourcers may have larger IS resources that provide greater capacity on demand.
Outsourcing can help a company overcome inertia to consolidate data centers that could not be consolidated by an internal group, or following a merger or acquisition.

28. Figure 8.6 Drivers and disadvantages of outsourcing
Offer cost savings
Ease transition to new technologies
Offer better strategic focus
Provide better management of IS staff
Handle peaks
Consolidate data centers
Infuse cash
Abdication of control
High switching costs
Lack of tech. innovation
Loss of strategic advantage
Reliance on outsourcer
Problems with security/confidentiality
Evaporization of cost savings

29. 8.7

30. Outsourcing Models
Classic Model: Mainframe computer maintenance and monitoring, as they were not often considered core competencies
Application Service Provider (ASP) Model - a company that “rents” the use of an application to the customer
Full Outsourcing Models – only really feasible if IT is not seen as a strategic advantage that it needs to cultivate internally
Selective Outsourcing Models - allows a “best-of-breed” approach and can include website hosting, business process application development, help desk support, networking and communications and data center operations

31. Avoiding Outsourcing Pitfalls
Don’t focus solely on price
Use life-cycle service contracts that occur in stages
Establish short-term supplier contracts
Use multiple, best of breed suppliers
Develop skills in contract management
Thoroughly evaluate outsourcers capabilities
Choose an outsourcer whose capabilities complement yours.
Base choice on a cultural fit as well as expertise
Determine if outsourcing relationship produces a net benefit for your company

32. Centralized vs. Decentralized Organizational Structures
Centralized: reduces duplication since resources under one control and, often, in one location.
Decentralized: creates flexibility because resources not in the same location or control
“Federalism” combines centralization with decentralization.
For example:
Bethlehem Steel allows major business units (plants) to decentralize and operate independently while
Levi-Strauss centralized to minimize the duplication of resources and save on costs.

34. The 5 Eras of Information Usage
In the 1960s, mainframes dictated a centralized approach to IS
The 1970s remained centralized due in part to the constraints of mainframe computing, although the mini-computer began to create a rationale to decentralize
The 1980s saw the advent of the PC, which allowed for decentralization
The Web, with its ubiquitous presence and fast network speeds, shifted some businesses back to a more centralized approach
Now, the increasingly global nature of many businesses makes complete centralization impossible

35. Federalism
Most companies would like to achieve the advantages derived from both centralized and decentralized organizational paradigms.
This leads to federalism – a structuring approach which distributes, power, hardware, software, data and personnel between a central IS group and IS in business units.

36. Insert Figure 8.11 Here

37. Centralized vs. Decentralized Approaches
Bethlehem Steel has taken a decentralized approach, which mirrors their decentralized business strategy as its managers believed that computing power and decision-making should be located within local business units
Levi Strauss adopted a centralized strategy as it wanted to gain better control over strategic IT resources, minimize duplication across its business, and maximize sharing of scarce resources

38. MANAGING GLOBAL CONSIDERATIONS

39. How does the management of IT differ when the scope is global, rather than local?
Large global MIS organizations face many of the same organizational issues as any other global department.
For IS, a number of issues arise that put the business at risk beyond the typical global considerations. Table 8.12 summarizes how a global IT perspective affects six information management issues.

40. Figure 8.12 Global Considerations for the MIS Organization
Issue
Global IT Perspective
Example
Political Stability
How risky is investment in a country with an unstable government ?
India, a country that faces conflict with Pakistan
Transparency
Domestically, an IT network can be end-to-end with little effort compared to global networks
SAP-R3 can be used to support production processes but only if installed
Business Continuity Planning
When crossing borders, it is important to make sure that contingency plans are in place
Concern when crossing boarders is will data center be available when/if needed
Cultural Differences
IT systems must not offend or insult those of a different culture
Using images or artifacts may be insulting to another culture
Sourcing
Some technologies cannot be exported or imported into specific countries
Exporting it to some countries, especially those who are not political allies is not possible
Data Flow across Borders
Data, especially private or personal data, is not allowed to cross some borders.
For example: Brazil

41. FOOD FOR THOUGHT: GOING OFFSHORE FOR IS DEVELOPMENT

42. Going Offshore for IS Development
Countries such as India, the Philippines, etc, offer “offshoring”, an alternative to in-house systems development
Many Indian enterprises, for example, are well known for their use of the Capability Maturity Model (CMM) Level 5 software development processes, making them extremely reliable, and ultimately desirable as vendors
The types of tasks that are outsourced are usually those that can be well-specified
It raises the issue of what to send offshore, and what to keep within your enterprise MIS organization.

43. END OF CHAPTER 8