1. Chapter 11 Information Systems Management
Jason C. H. Chen, Ph.D.
Professor of MIS
School of Business Administration
Gonzaga University
Spokane, WA 99258

2. “… You’ve Got a Fox in Charge of a Hen House.”
IS management is a mess.
New maintenance supervisor oversees IS, but has no IS background
IS manager has a conflict of interest
Inherited some contractor developed applications.
Access to servers is wide open
Fox Lake’s general manager needs to get actively involved in IS management

3. Chapter Preview
Information systems are critical to organizational success, and like all critical assets, need to be responsibly managed, in organizations both large and small.
In this chapter, we will survey the management of IS and IT resources. We begin by discussing the major functions and the organization of the IS department.
Then we will consider each of the major functions in greater detail: planning the use of IT/IS, creating and managing the computing infrastructure, creating and managing enterprise IS, and protecting organizational information assets.

4. Chapter Preview (cont.)
The pros and cons of outsourcing and describing some of its risks are presented.
Finally, the chapter concludes with a discussion of the relationship of users to the IS department. In this last section, you will learn both your own and the IS department’s rights and responsibilities.
The goal of the chapter is to give you an appreciation for the scale and complexity of the IS management task and to help you become an effective consumer of IS services.

5. Study Questions
Q1 What are the functions and organization of the IS department?
Q2: How do organizations plan the use of IS?
Q3: What are the advantages and disadvantages of outsourcing?
Q4: What are your user rights and responsibilities?
Q5: 2022?

6. Types of Sourcing Sourcing Offshoring In _______ Out _______ Crowd
___________

7. Q1: What are the Functions and Organization of the IS Department?
Major functions of information systems department
Plan how to use IS to accomplish organizational goals and strategy
Manage outsourcing relationships
Protect information assets
Develop, operate, and maintain organization’s computing infrastructure
Develop, operate, and maintain enterprise applications

8. Functions and Organization of the IS Department
Each organization’s IS structure varies depending on these factors:
______
_______
__________ __________
________
Other factors
Size
Culture
Competitive environment
Industry

9. How is the IS Department Organized?
This organizational structure chart shows the typical top-level reporting relationships. Depending on the organization, the Chief Information Officer (CIO) may report to the Chief Executive Officer (CEO), the Chief Operating Officer (COO), or the Chief Financial Officer (CFO).
Fig 11-1 Typical Senior-level Reporting Relationships

10. How Is the IT Department Organized?
Chief Information Officer (CIO)
Principal manager
Reports to CEO, COO, or CFO
Technology office
Head: Chief Technology Officer (CTO)
Investigates new information systems technologies for possible application at organization
Operations
Manages computing infrastructure

11. How Is the IT Department Organized?
Development
Manages process of creating new information systems
Maintains existing system
Outsourcing relations
Handles affairs with outsourced systems
Data administration staff functions
Establishes data standards and data management practices and policies

12. INFORMATION SYSTEMS (MIS/IS)
Each project team should include the following three types of people:
1) top/middle management
2) technical professional (e.g., MIS, accounting)
3) USERS
ORGANIZATIONS
INFORMATION
SYSTEMS
TECHNOLOGY
MANAGEMENT
Dr. Chen, The Challenge of the Information Systems Technology
TM -12

13. Q/A
T/F If an organization does not develop programs in-house, then the development group of the IS department will include programmers, test engineers, and technical writers.
Answer: ________
FALSE

14. What IS-Related Job Positions Exist?
Fig Job Positions in the Information Systems Industry

15. What IS-Related Job Positions Exist? (cont’d)

16. What IS-Related Job Positions Exist? (cont’d)

17. IT Position Requirements (Very Important to Your Future Career!) p.390
Most positions require business knowledge plus technical knowledge
Many require university degrees
Most require good verbal and writing skills
Think dual majors with MIS/CIS to enhance your marketability (competitive advantage)
Accounting and information systems
Marketing and information systems
Management and information systems
Operations and information systems
HRM and information systems

18. Q2. How Do Organizations Plan the Use of IS
Q2 How Do Organizations Plan the Use of IS? Major IS Planning Functions
The figure below shows the necessary steps an organization must take to plan how it will use IS and IT and to make sure both of them support the organization’s strategy.
The CIO is responsible for most of these items. It’s a never-ending process as organizations change, grow, or merge with other companies.
The steering committee, a group of senior managers from major business functions, works with the CIO to set IS priorities, make decisions about major IS projects, and serve as a communication channel between users and the IS function.
Fig 11-3 Planning the Use of IS/IT

19. Explain How You Would Respond to Each Situation.
Playing computer games during work hours
Playing computer games before and after work hours
Responding to s from an ill parent
Watching DVDs during lunch and breaks
Sending s to plan a party that mostly involves people from work
Sending s to plan a party that mostly involves no one from work
Updating your Facebook page
Reading news on CNN.com
Checking stock market over Internet
Tweeting friends on your computer about your softball win last night.
Selling personal items on eBay
Paying personal bills online
Paying personal bills online when traveling on company business
Buying an airplane ticket for an ill parent over the Internet
Changing content of a personal Web site
Changing content of a personal business Web site
Buying an airplane ticket for a personal vacation over Internet

20. Align Information Systems with Organizational Strategy
As strategies change, as the organization merges with other organizations, as divisions are sold, IS must evolve along with the organization.
Changing a network requires time and resources. Integrating disparate information systems applications is even slower and more expensive.
Without a persuasive CIO, IS can be perceived as a drag on the organization’s opportunities.

21. Q/A
Which of the following is a function of the steering committee for an IS department?
A) writing program code
B) imparting training
C) adapting software
D) setting IS priorities
Answer: ______ D

22. Information System Strategy Triangle
Business (Firm)
Strategy
Where is the business going and why?
Direction for business
Needs and priorities
IT impact and potential
Infrastructure and services
Supports business
Organizational Strategy
IS/IT Strategy
Fail to balance these three strategies
IS fail to support business goals
IS fail to support organizational system
Misalignment between business & org. strategies
A business strategy is a well-articulated vision of where the business seeks to go and how it expects to get there; An organizational strategy is the organization’s design, as well as the choices it makes to define, set up, coordinate, and control its work processes; IS strategy is the plan the organization uses in providing information systems and services.
IS strategy can itself affect and is affected by changes in a firm’s business and organizational strategies. Moreover, IS strategy always has consequences – intended or not – on business and organizational strategies.
Business strategy
business decisions; -- Objective and direction; -- Change;
Organizational strategy
-- A plan that answers the question: How will the company organize in order to achieve its goals and implement its business strategy?
Thus, it is a plan for organizational design, and choices the firm makes that define, set up, coordinate, and control its work processes.
business based; - Demand oriented; - Application focused
IS/IT strategy
activity based; -Supply oriented; -Technology focused
Gain strategic advantage by using IT …
It consists of four major elements: 1) Architecture/Infrastructure, 2) MIS Organization, 3) Funding and 4) Project Management
What is required?
How it can be delivered?
1. Architecture/Infrastructure
2. MIS organization
3. Funding
4. Project Management N

23. Information System Strategy Triangle
A business strategy is a well-articulated vision of where the business seeks to go and how it expects to get there.
An organizational strategy is the organization’s design, as well as the choices it makes to define, set up, coordinate, and control its work processes.
IS/IT strategy is the plan the organization uses in providing information systems and services.

24. Communicate Issues to the Executive Group
CIO provides the IS perspective during discussions of problem solutions, proposals, and new initiatives.
For example, when considering a merger, it is important that a company consider integration of information systems in the merged entities. This consideration needs to be addressed during evaluation of merger opportunity.

25. Develop Priorities and Enforce Them Within the IS Department
CIO must ensure that priorities consistent with overall organizational strategy are developed and communicated to IS department.
Must also ensure that IS department evaluates proposals and projects for using new technology in light of those communicated priorities.

26. Sponsor the Steering Committee
Steering committee is a group of senior managers from major business functions that works with the CIO to set IS priorities and decide among major IS projects and alternatives.
Provides a forum where information systems personnel can discuss potential IS initiatives and directions with the user community
Provides a forum where users may express their needs, frustrations, and other issues they have with the IS department

27. Q3. Outsourcing: What and Why?
Outsourcing is the process of hiring another organization to perform a service. Outsourcing is done to save costs, to gain expertise, and to free up management time.
Any value chain business activity can be outsourced
“Your back room is someone else’s front room.” (Peter Drucker)
Drivers (at least four advantages) include:
Reducing ________
Transition to new _____________
Focus on _______ business strategies;
Provide better management and focus of IT personnel.
Disadvantages are present in outsourcing and include:
Losing ________
_________ to undue decisions, etc.
costs;
technologies;
Drivers:
1. Cost-effective access to …
2. Avoidance of …, primarily an issue for SMALL and very low-technology organization
3. Outsourcing during this period was important, but, in retrospect, largely peripheral to the main IT activities that took place in midsized and LARGE organization.
Example:
1) Kodak’s decision in 1990 to oursource its IT was the first real WAKE-UP call.
2) Midsized and large organization: apply outsourcing
Small and medium-sized: ONLY with problematic, grossly mismanaged IS departments.
Large Outsourcers: EDS, CSC (Computer Science Corp.), IBM (Global Services), Andersen-Consulting (Accenture), etc.
Backsourcing is when a company brings back previously outsourced IS functions.
core
control,
Expensive

28. Sourcing Decision Cycle Framework
Sourcing involves many decisions (Figure 11 Extra-1).
The first step is the make or buy decision.
If buy is selected then the company must decide where.
If the company decides to go offshore it must decide if the offshore company is near or far.
Periodic evaluation must take place.
Continual evaluation is needed to determine if the arrangement is satisfactory or not (either for outsourcing or insourcing). 28

29. Where & how the sourcing should be delivered?
(overseas subsidiary)
Where & how the sourcing should be delivered?
(distant land)
(proximate)
BUY
MAKE
Nearsourcing is
-- “sourcing service work to a foreign, lower-wage country that is relatively close in distance or time zone or both”
-- Distance and language (and/or culture) matter.
Captive center:
-- An overseas subsidiary that is set up to serve the parent company.
-- Alternative to offshoring or nearshoring.
Backsourcing is when a company brings back previously outsourced IS functions.
Backsourcing
FIGURE 11 Extra 1 SOURCING DECISION CYCLE FRAMEWORK 29

30. Outsourcing Information Systems
Outsourcing, the process of hiring another organization to perform a service, can provide advantages like the ones shown in this figure.
India is the most popular foreign outsourcer because of its large, well-educated, English-speaking population who earn 20 to 30 percent less in labor costs than their U.S. counterparts.
International outsourcing is well-suited to 24/7 operations like customer support.
Some say outsourcing is a threat to U.S. technology leadership.
Fig 11-4 Popular Reasons for Outsourcing IS Services

31. Risk Reduction Caps financial risk
Ensures certain level of quality, or avoids having substandard quality
Vendor assumes responsibility for hardware, software, network protocol selection, and knowing applicable tax laws
Easier to hire another vendor than to fire and rehire internal staff.

32. International Outsourcing
India
Large, well-educated, English-speaking, labor cost 70-80% less than in US.
China and other countries.
Modern telephone technology and Internet-enabled service databases
Customer support and other functions operational 24/7.

33. What Are the Outsourcing Alternatives?
This figure shows alternatives businesses have for outsourcing some or all of their information system components.
Major categories of alternatives by information systems components
Oracle, EDS
Amazon
Salesforce.com
Oracle/PeopleSoft Web storefront
Oracle IaaS Cloud
Employee Travel
IaaS: Infrastructure-as-a-Service
SaaS: Software-as-a-Service
Fig 11-5 IS/IT Outsourcing Alternatives

34. There are a lot of risks to outsourcing information systems as this figure describes.
Fig 11-6 Outsourcing Risks

35. Q/A
When a company outsources a system, it no longer has control over prioritizing fixes for software failures and problems.
Answer: _______
TRUE

36. Write shorter contracts - less than ___ years 5
When to Outsourcing?
Which IS activities are strategic to our company's business?
Will outsourcing save us at least ____ percent?
Does our firm have access to the needed technology and expertise?
If not, outsourcing may be the answer to acquiring these resources.
Does outsourcing increase our firm's flexibility? 15
Does outsourcing increase our firm's flexibility?
Outsourcing shifts capital budgets to operating expenses, which can give a firm more financial flexibility. Furthermore, outsourcing may free up personnel to work on new systems, while the outsourcer maintains the existing ones. Also, it can increase the firm's flexibility for acquiring new technologies sooner.
Outsourcing is an important question facing today's IS executives. There are four activities that management should not outsource: strategy, the architecture of the system, the decisions about when to introduce IS into the organization, and management of the vendor.
Write shorter contracts - less than ___ years 5

37. INSOURCING What is the example(s) mentioned in the Friedman’s Video (The World is Flat)?37

38. Crowdsourcing Definition:
Taking a task traditionally performed by an employee or contractor, and outsourcing it to an undefined, generally large group of people, in the form of an open call.
Used by companies to increase productivity, lower production costs, and fill skill gaps.
Can be used for a variety of tasks.
Companies do not have control over the people doing the work.
Has cost more than traditional methods. 38

39. Q4: What Are Your IS Rights and Responsibilities?
Fig User Information Systems Rights and Responsibilities

40. Q4: What Are Your IS Rights and Responsibilities? (cont’d)
Fig User Information Systems Rights and Responsibilities

41. Q/A
Which of the following is true about the changes and developments foreseen for 2022?
A) Licensed, off-the-shelf software will become less configurable, less adaptable, and less flexible.
B) Fewer applications will be developed in-house and software customization will become easier.
C) Better-skilled employees will be needed to adapt software to increasingly unique organizational needs.
D) Small computing devices will become more expensive and lose their popularity.
Answer: ______ B

42. Q5: 2022? Hardware infrastructure will migrate to cloud
Licensed, off-the-shelf software more configurable, adaptable and flexible.
iOS devices and other, small computing devices will become cheaper and more popular.
Fewer and less-skilled employees needed
Loss of control of employees’ use of IT

43. You have certain rights and responsibilities with regard to the IS department that supports you in your job. Here is a list of them.
Fig 11-7 User Information Systems Rights and Responsibilities

44. End of chapter 11