Chapter 8: Strategic Management of IS/IT

Chapter 8

Strategic Management of IS/IT: Organization and Resources

Agenda

• Requirements of strategic management

• Roles of the IT function

• IS/IT organization approaches

• Choice of IS/IT organization

• IS/IT organization strategies

Requirements of Strategic Management

• IS/IT strategies, policies and plans reflects business objectives and strategies

• Identify and explore potential business advantages from IS/IT

• Ensure IS/IT strategies are viable in terms of business risks

• Establish resources and priorities• Match IS/IT management and corporate culture• Monitor business critical IS/IT activities• Balance between centralization and decentralization

Roles of the IT Function – Iby Zmud

• User services– Delivery services

– Systems development

– Support center

– Information center

• Architecture management– Planning

– Technology diffusion

– Data management

Roles of the IT Function – IIby Zmud

• Technology development– Research & development

• General– Administration– Quality assurance

IS/IT Organization Approaches

• Total centralized (monopolistic)• Total decentralized to business functions• Geographically placed data centers and resources• Business unit control• Users• Activity• Type of resource – network, computers, software,

data, etc.

Choice of IS/IT Organization

• Stage of application portfolio maturity• Geography of the enterprise• Synergy benefits of business services, products, &

information• Business diversity & rate of change• Competitive pressures• Economics of resource, obtaining and deploying

skills• Enterprise structure & management culture

IS/IT organization strategies

• IT (centralized) or user departments (decentralized)

• Mix

• Chief information officer or steering committee

IT or User Departments – Iby McFarlan and KcKenney

• IT department– Integration– Database– Feasibility and cost/benefit analysis– Litter innovation– IS organization based on technical specialist not user

need– High maintenance (80%)– No senior management– Use frustration with secret growth of user computing

IT or User Departments – IIby McFarlan and KcKenney

• User department– Short term problem solving– Incompatible databases & systems– Lack of quality control– Hidden maintenance overhead– Duplication problems– Little cost/benefit analysis– Lack of skill technical staff

Mix by La Belle and Nyce

• Business unit responsibility– Application architecture, development, and operation

• Central IT group– Telecommunication

– Hardware & software architecture

– Information architecture

– Risk management and security

– Shared services and utilities

– Human resources

Chief Information Officer or Steering Committee - I

• Chief information officer (CIO)– Setting IS/IT policy & strategy– Goal oriented with business, IS/IT, &

communication competency

Chief Information Officer or Steering Committee - II

• Steering committee– Executive steering group– IT planning group

• Service management group

• Technical management group

– Business IS planning group• Application management group

Executive Steering Group Functions

• Aligning business & IS/IT strategies

• Establishing IS/IT priority & IS/IT resources

• Ensuring strategic applications achieve their objectives

• Establishing organizational responsibilities and relationships

IT Planning Group Functions

• Interpreting IT trends and development for organizational business

• Allocating resources according priority

• Monitoring IS/IT performance

• Managing IT, specialists, & technical risks

Service Management Group Functions

• Meeting business needs with the optimum means

• Monitoring performance against budget/service level

• Controlling quality

• Satisfying evolving demand

Technology Management Group Functions

• Assessing technology against known and potential needs

• Planning and managing infrastructure

• Resolving technical issues/problems

• Support service group

Business IS Planning Group Functions

• Identifying business needs

• Interpreting CSFs

• Assessing opportunities, threats, & IS implications

• Prioritizing, planning, & coordinating IS and expenditure

• Ensuring the delivery of benefits

Application Management Group Functions

• Identifying special needs, changes, benefits, resources, and costs of applications for investment & priority evaluation

• Managing developments & usage of IS

Points to Remember

• Requirements of strategic management

• Roles of the IT function

• IS/IT organization approaches

• Choice of IS/IT organization

• IS/IT organization strategies

Questions

• What is a good IT strategic management for an e-business of the banking industry in terms of the organizational structure?

• What is a good IT strategic management for an e-business of the California State University system in terms of the organizational structure?