MIS09/12/97Ch 18: Turban, McLean, Wetherbe09/12/97 1 Information Systems in the Organization Basic IT Organizational Structure.

MIS09/12/97Ch 18: Turban, McLean, Wetherbe 09/12/97 1

Information Systems in the Organization

Basic IT Organizational Structure


Infrastructure Management

People• Organization• Motivation

Technology• Hardware • Software

System Administration• Acquiring Resources• Maintaining Existing

Resources• IT Security


Emerging IssuesSteve Andriole, If I Only Knew 7 Things, Datamation, July

8,2004

Regulatory Trends: Internet taxation, privacy, intellectual property.

Interoperability: Web services, interoperability.

Supply Chain: Wal-mart end to end, Dell no inventory, dynamic pricing, RFID

Architecture: Thin client/fat client, super servers, distributed processing, standards


Emerging Issues (cont.)Steve Andriole, If I Only Knew 7 Things, Datamation, July

8,2004

Sourcing: Outsourcing, IT “utilities”, partnering

Infrastructure: Will the Internet survive, security, viruses, spam, etc.

Emerging Technologies: Wireless, AI, RFID, etc.


People


It is Not All About Technology

Traditional IT Centralized control Resource restrictions Formal methodologies

and discipline Careful planning Administrative support

New IT Distributed control Resource expansion Few methodologies

and unrestricted access

Rapid development Strategic impact


Requirements for Successful IT

Well understood vision Single team approach Business financial justifications Internal marketing Reengineering skills Political awareness and support


Roles

Steering Committee CIO Manager Project Manager Analyst Programmer Systems Programmer User


Organization

Centralized:Single IT

structureConsolidation of

functionsCareer paths for IS

professionalsInformation controlEconomies of

scale

DecentralizedIT organizations

in divisionsCloseness to local

problemsResponsiveness

to operational requirements

User ownership of costs and problems

DistributedIT units with joint

reporting

Separation of IS and user functions

Identification of corporate data and functions

User ownership of user applications


Typical IS Organization

CIO

Development Operations

Data Administration

Network Architecture

Steering Committee


Relationship with Users

Formal - user agreements and contracts

Utility - IS supplies standard information resources

Vendor - IS promotes solutions in competition with outside competitors

Partner - IS and users share common goals and rewards


Consultants/Contractors

Access to new ideas and standards Access to additional resources Change agent who can own

responsibility Managing the relationship


Ongoing Operations

Operations management• Job scheduling• Error management• Security management• Help desk

Change Control• Planned• Emergency

Access and permissions• Supported• Permitted• Prohibited


CIO, July 15, 1998


Critical Questions for IT

How does IT influence the customer experience?

Does IT enable or retard growth? Does IT favorably affect productivity?Does IT advance organizational innovation and learning?How well is IS run?


IT Goals

Early Cost Savings and Control

Mid Alignment with Organization Goals

Current Integration Into the Business



Three Rules to Remember

Don't commit to any technology until after it has crossed the chasm.

Use normal rules of engagement when dealing with enabling technology kings and princes and application companies of any size.

Wherever there is an enabling-technology gorilla, get on that bandwagon and no other.


Developing Architecture

Objectives: Define business functions Business: Analyze service level

expectations IT: Determine requirements Technology: Specifications and design Detailed Requirements: Product selection System: Install new system components


Business ObjectivesObjectives

Increase Revenue

Reduce Cost

Identify those business functions that will use the infrastructure and how IT will promote their business objectives. In business terms. Technical excellence is not enough!


Business ExpectationsBusiness Expectations Suggested measures

At the highest level, an IT organization should be tracking a number of key ratios and indicators.

[These should be reported on in terms of current value, trends, and rate of change]


Service Level Objectives

Network availability 99.8%

Mean time to hardware failure 1 mo

Mean time to software failure 1 month

Mean time to respond 10 min

Performance 95% < 2 sec

Mean throughput 64 Kbps

Typically service levels are negotiated with users or management and carefully tracked.


Total Cost of Ownership


TCO

A standardized environment costs less to install and maintain than a heterogeneous one.

Electronic software distribution ensures consistent software installation and eliminates the

need to physically install software on each computer. Use remote systems management tools to move

software and data to and from laptops,as well as to store backup images of users' hard disks.

Use automated technical support tools to reduce support personnel staff.


TCO

Consider replacing personal computers with "thin clients" such as network computers.

Client/server technology offers another take on TCO, without the need to invest in network computers.

Use automated network management and monitoring systems to reduce the infrastructure costs of WANs.


ITIT Requirements

Standards Logical Topology

Centralization, distribution, separation and duplication of the appropriate components

Management StrategyPrimary and secondary control points, definition

of responsibilities Security Policies and Strategies


Network Architecture:Universal Goals

Interoperability: work with other users Scalability: ability to expand Flexibility: ability to add or move users Security: keep outsiders out Central Control: manage from one

place


Detailed RequirementsDetailed Requirements

LAN technologies and boundaries Internetworking technologies WAN access strategies Server operating systems and

middleware Product restrictions and capabilities


SystemSystem Acquisition and Installation

Acquisition StrategyMake or buy

InstallationDirect, phased, pilot, parallel

Training and EvaluationCentralized or distributed

Mandatory or voluntary



Incremental vs Radical Change: TQM vs Reengineering

Incremental:

Focus on processes to eliminate, rather than correct problems.

Radical:

Focus on inputs and outputs to completely revise the methods


TQM

Total Quality Management• Goals• Measures• Root Causes

Total quality management is a cultural change designed to take advantage of the desire of individual workers to do a better job.


TQMW. Edwards Deming & Joseph

Juran

A philosophy, not a business practice

Incremental Process Change Control what you measure Empower employees Prevent rather than correct defects


Reengineering

The fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical contemporary measures of performance such as cost, quality, service and speed.• Customers: knowledgable and demanding• Competition: continuously increasing• Change: constant


Reengineering

RedesignFind new ways to accomplish business goals

RetoolCreate the (IT) systems needed to support

the new design Reorchestrate

Bring about the organizational changes needed to support the new system.


Principles of Business Process Reengineering

• Combines jobs• Empowers employees• Natural and parallel pocess steps• Multiple versions of processes• Work done where most appropriate• Minimal controls, checks and non-value added

work• Reduce extermal contacts and increase alliances• Single point of customer contact• Hybrid centralized/decentralized organization


Increment vs Radical

Radical Incremental

Change Abrupt, volatile Gradual, constant

Effects Immediate Long term, subtle

Involvement Few champions Culture

Investment High initial, lessongoing

Low initial, highongoing

Orientation Technology People

Focus Profits Processes


Issues

• Nurturing creativity and employee participation

• Planning strategic information systems• BPR is major surgery that fails up to 75-

80% of the time• IT changes the ethical environment


Organization

MIS09/12/97Ch 18: Turban, McLean, Wetherbe09/12/97 1 Information Systems in the Organization Basic IT Organizational Structure.

Documents

user slide

support slide

security slide

organizational structure

strategic impact slide

distributed control

formal user agreements

standard information