1. Enterprise and Global Management of Information Technology
Chapter 14
Enterprise and Global Management of Information Technology
McGraw-Hill/Irwin
Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.

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

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

4. To become global powerhouses, companies invest in
Business and IT
To become global powerhouses, companies invest in
Global e-business
E-commerce
Other IT initiatives
Business managers and professionals need to understand to manage this vital organizational function
As the 21st century unfolds, many companies are transforming themselves into global powerhouses via major investments in
Global e-business
E-commerce
Other IT initiatives
There is a need for business managers and professionals to understand how to manage this vital organizational function

5. RWC 1: Reinventing IT at BP
CEO called BP
“Serious underperformer”
“Promised a lot but not delivered very much”
CIO called for serious reductions
$3 Billion budget
2,000 vendors
4,200 IT employees
Replaced 80% of top IT leadership
Moved from centralized to embed IT
Rebid supplier contracts
Vendors had to re-earn business

6. Components of IT Management
Managing the joint development and implementation of business and IT strategies
Use IT to support strategic business priorities
Align IT with strategic business goals
Managing the development and implementation of new business/IT applications and technologies
Information systems development
Managing the IT organization and infrastructure
Hardware, software, databases, networks, and other resources

7. Three things happened in the past few years
Business/IT Planning
Three things happened in the past few years
Businesses connected networks
Intranets provide essential applications
Maintaining PCs on a network is expensive
Urgent need for centralization

8. Three things happened in the past few years
Business/IT Planning
Three things happened in the past few years
Businesses connected networks
Intranets provide essential applications
Maintaining PCs on a network is expensive
Urgent need for centralization

9. Three things happened in the past few years
Business/IT Planning
Three things happened in the past few years
Businesses connected networks
Intranets provide essential applications
Maintaining PCs on a network is expensive
Urgent need for centralization

10. Avnet Marshall Organizational Components

11. Organizing IT Early Years Next Current Early Years Next Current
Centralization of computing with large mainframes
Next
Downsizing and moving back to decentralization
Proliferation of mid-range and mini-computers
Current
Hybrid of centralized and decentralized components
IS Subsidiaries
Outsourcing
Systems integrators
Application service providers
Early Years
Centralization of computing with large mainframes
Next
Downsizing and moving back to decentralization
Proliferation of mid-range and mini-computers
Current
Centralized control over the management of IT while serving the strategic needs of business units
Hybrid of centralized and decentralized components

12. Managing Application Development
Systems analysis and design
Prototyping
Applications programming
Project management
Quality assurance
System maintenance

13. Managing IS Operations
Data Centers
Hardware, software, network, personnel
Computer system operations
Network management, production control and support
System monitors
Chargeback systems
IS operations management is concerned with the use of hardware, software, network, and personnel resources in data centers
Operational activities that must be managed: Computer system operations, Network management. Production control, Production support
System Monitors
Monitor the processing of computer jobs
Help develop a planned schedule of computer operations that can optimize computer system performance
Product detailed statistics that are invaluable for effective planning and control of computing capacity
Chargeback systems
Allocates costs to users based on the information service rendered
Process Control Capabilities
Systems that not only monitor but automatically control computer operations at large data centers

14. Recruiting, training and retaining Evaluating employee job performance
IT Staff Planning
Recruiting, training and retaining
Evaluating employee job performance
Rewarding outstanding performance
Setting salary and wage levels
Designing career paths
Chief Information Officer (CIO)
Chief Technology Officer (CTO)
E-commerce architect
Technical team leader
Practice manager
Systems analyst
Recruiting, training and retaining qualified IS personnel
Evaluating employee job performance
Rewarding outstanding performance with salary increases and promotions
Setting salary and wage levels
Designing career paths for IT Executives
Chief Information Officer (CIO)
Oversees all uses of information technology
Brings them into alignment with strategic business goals
Chief Technology Officer (CTO)
In charge of all information technology planning and deployment
Manages the IT platform
Second in command
E-commerce architect
Technical team leader
Practice manager
Systems analyst

15. Technology Management
Platform for integrating business applications
Both internally or externally focused
Technologies
Internet, intranets, e-commerce and collaboration, CRM, ERP, and SCM software
Responsibility of Chief Technology Officer
Platform for integrating business applications
Both internally or externally focused
Technologies
Internet, intranets, electronic commerce and collaboration, CRM software, enterprise resource planning, and supply chain management
Responsibility of Chief Technology Officer

16. Managing User Services
Support end user and workgroup computing
Key roles
Troubleshooting problems
Gathering and communicating information
Coordinating educational efforts
Helping with end user application development
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
Key roles
Troubleshooting problems
Gathering and communicating information
Coordinating educational efforts
Helping with end user application development

17. Growth of services offshoring is linked to
Outsourcing’s Top Ten
Outsourcing = The purchase of goods or services from third-party partners that were previously provided internally
Why Outsource?
Save money – achieve greater ROI
Focus on core competencies – organizations 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
Location is typically overseas
Can be either production or service
Growth of services offshoring is linked to
Availability of large amounts of reliable and affordable communication infrastructure
Digitization of many services
Countries
India, the Philippines, Ireland, and Eastern European countries
Troubling trend
Search for talent difficult
Jobs plentiful
Qualified labor pool declining in US
Importing talent

18. Failures in IT Management
IT not used effectively
Computerizing traditional business processes
Need to develop innovative e-business processes
IT not used efficiently
Poor response times
Frequent downtimes
Poorly managed application development

19. Sr. Management’s Involvement in IT
Managerial and end user involvement
Key ingredient to high-quality information system performance
Involve business managers in IT management
Governance structures, such as steering committees

20. COBIT and Business Objectives

21. The International Dimension
New global models
Structured, yet agile
Global, yet local
Maximizing the risk-adjusted return
Companies around the world are developing new models to operate competitively in a digital economy
Structured, yet agile
Global, yet local
Concentrate on maximizing the risk-adjusted return from both knowledge and technology assets

22. Global Teams – Best Practices
Obtain local HR expertise
Create job grade consistency across regions
Manage dispersed staff as portfolio teams
Make the work meaningful
Clearly defining the roles of remote groups
Bring remote staff to headquarters
Foster communication across regional boundaries
Obtain local HR expertise
Different strategies for hiring, firing, and training
Create job grade consistency across regions
Provide basis for comparing and managing roles and people across locations
Manage dispersed staff as portfolio teams
Set objectives and distribute work regardless of residency
Make the work meaningful
Avoid sending mundane work to the same location
Clearly defining the roles of remote groups
Knowing roles in the larger picture creates a sense of identity and purpose
Bring remote staff to headquarters
Represents an endorsement and source of pride
Foster communication across regional boundaries
Videoconferencing and in-person meetings to showcase the local units

23. RWC 2: IT Leaders Face New Challenges
Emerging markets
Demand attention, creativity
Require different, simpler business models
Country specific challenges
South America – Mom and Pop shops
Africa – limited broadband access
Brazil – high tariffs
Dubai and Abu Dubai – cheaper to import
Provide testing ground for new technologies or processes
Emerging markets
Demand attention, creativity
Require different, simpler business models
Country specific challenges
South America – Mom and Pop shops
Africa – limited broadband access
Use satellite connection
Slower response rates
Brazil – high tariffs
Cheaper to buy locally
Dubai and Abu Dubai
Cheaper to import
Provide testing ground for new technologies or processes

24. Global IT Management Dimensions
Political challenges
Many countries regulate or prohibit the transfer of data across their national boundaries
Others severely restrict, tax, or prohibit imports of hardware and software
Some have 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
Others require a business to spend part of the revenue they earn in a country in that nation’s economy
Geoeconomic challenges
Physical distances are still a major problem
It may take too long to fly in specialists
It is difficult to communicate in real time across 24 time zones
Many countries do not have good telephone and telecommunications services
It may be hard to find skilled local workers
There can be great differences in the cost of living and labor costs between countries
Cultural challenges
Languages
Cultural interests
Religions
Customs
Political philosophies
Global IT managers need cultural training before they are sent on assignment
Different work styles and business relationships

25. Transnational Business/IT Strategies
Companies are moving toward a transnational strategy
Business depends heavily on information systems and Internet technologies to help integrate global business activities
Requires an integrated and cooperative worldwide IT platform

26. Global Business Drivers
Competitive or environmental forces drive business requirements
Examples of global drivers:
Customers
Products
Operations
Resources
Collaboration
• Global Customers.
Customers are people who may travel anywhere or companies with global operations. Global IT can help provide fast, convenient service.
• Global Products.
Products are the same throughout the world or are assembled by subsidiaries throughout the world. Global IT can help manage worldwide marketing and quality control.
• Global Operations.
Parts of a production or assembly process are assigned to subsidiaries based on changing economic or other conditions. Only global IT can support such geographic flexibility.
• Global Resources.
The use and cost of common equipment, facilities, and people are shared by subsidiaries of a global company. Global IT can keep track of such shared resources.
• Global Collaboration.
The knowledge and expertise of colleagues in a global company can be quickly accessed, shared, and organized to support individual or group efforts. Only global IT can support such enterprise collaboration.

27. Hardware Difficulties
Global IT Platforms
Hardware Difficulties
High prices
High tariffs
Import restrictions
Long lead times for government approvals
Lack of local service or spare parts
Lack of documentation tailored to local conditions
Software Difficulties
Incompatibility of software
Europe vs Asia vs US
Publisher reluctance
May refuse to supply markets that disregard software licensing and copyright agreements
Hardware Difficulties
High prices
High tariffs
Import restrictions
Long lead times for government approvals
Lack of local service or spare parts
Lack of documentation tailored to local conditions
Software Difficulties
Packages developed in Europe may be incompatible with American or Asian versions
The software publisher may refuse to supply markets that disregard software licensing and copyright agreements

28. International Data Communications Issues

29. The Internet as a Global IT Platform
An interconnected matrix that reaches tens of millions of users in over 100 countries
Business environment is free of traditional boundaries and limits
Without incurring massive cost outlays for telecommunications, companies can
Expand markets
Reduce communications and distribution costs
Improve profit margins

30. Establishing Global Websites
Will you have to develop a new navigational logic to accommodate cultural preferences?
What content will you translate, and what content will you create from scratch to address regional competitors or products that differ from those in the U.S.?
Should your multilingual effort be an adjunct to your main site, or will you make it a separate site, perhaps with a country-specific domain?
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?
14-30

31. Internet Users by World Region

32. Global Data Access Issues
Transborder Data Flows may be viewed as violating
National sovereignty
Laws protecting local IT from competition
Laws protecting local jobs
Privacy legislation
Transborder Data Flows may be viewed as violating
A nation’s sovereignty because it avoids customs duties and regulations
Laws protecting the local IT industry from competition
Laws protecting local jobs
Privacy legislation

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

34. Internet Access in Restrictive Countries
Revolves around
Controlling the conduits
Filtering the flows
Punishing the purveyors
For most of the world restriction is not viable
Hurts opportunities for growth and prosperity
The struggle between Internet censorship and openness at the national level revolves around
Controlling the conduits
Filtering the flows
Punishing the purveyors
Most of the world has decided that restricting Internet access is not a viable policy
Restricting access also hurts a country’s opportunities for economic growth and prosperity

35. Global Government Internet Restrictions
High Government Access Fees
Kazakhstan, Kyrgyzstan
Government Monitored Access
China, Iran, Saudi Arabia, Azerbaijan, Ubekistan
Government Filtered Access
Belarus, Cuba, Iraq, Tunisia, Sierra Leone, Tajikistan, Turkmenistan, Vietnam
No Public Access Allowed
Burma, Libya, North Korea

36. Global Systems Development
Key development issues
Conflicts over local vs global system requirements
Agreement on common system features
Disturbances caused by systems implementation and maintenance activities
Global standardization of data definitions
Key development issues
Conflicts over local versus global system requirements
Trying to agree on common system features
Disturbances caused by systems implementation and maintenance activities
Global standardization of data definitions

37. Systems Development Strategies
Key strategies for global systems development
Transform an application used by the home office or a subsidiary into a global application
Set up a multinational development team
Parallel development
Centers of excellence
Offshore development

38. Internet-Enabled IT Development

39. RWC 3: Retiring CIOs and Succession
CIO role increasingly strategic and influential
CIO skills shifting
Shortage of qualified managers
Developing and mentoring successors
Key responsibility
Today, the role of a CIO has become very strategic. Tomorrow’s CIOs will be even more involved in strategic thinking and influential in an organization.
The skills needed to be a CIO has changed as their role has shifted from being a technologist to business strategist.
Developing and mentoring their successors is one of the key responsibilities of IT leaders in an environment that includes the changing role of the CIO and a shortage of qualified managers.

40. RWC 4: Unified Global Operations
Important challenge
Consistency in worldwide implementations
Reinsurance Group of America developed a single system to manage
Different languages
Different time zones
Different business methods
Return on investment - 15%
Better than expected
Consistency across the different business functions, countries, languages and processes involved in worldwide implementations is one of the most important challenges faced by global organizations today.
Reinsurance Group of America faced with a challenge in developing a single system that manages reinsurance business processes for numerous offices around the world—offices whose staffs speak different languages, are in different time zones, and just might be stuck in their ways as to how they manage their business.
The result of developing this system resulted in a return on investment of 15% which was better than expected.