Strategic Management of IS/IT Organization and Resources Chapter 8 Zainal A.Hasibuan [email protected]
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Strategic Management of IS/IT
Organization and Resources Chapter 8
Zainal A.Hasibuan [email protected]
Context of This Session External Business Environment
Internal Business Environment
Internal IS/IT environment
Current Applications Portfolio
External IS/IT Environment
Planning Approaches, Tools and Techniques
Strategic IS/IT Planning Process
IS/IT Management Strategy Business IS Strategies IT Strategy
Applications Portfolio Model & Matrices
We are here …
Strategic Planning Vs. Strategic Management
• Fokus pada pembuatan keputusan tentang strategi yang op>mal
• Suatu proses anali>k • Fokus kepada variabel‐variabel bisnis, ekonomi dan teknologi
• Fokus kepada hasil dari penerapan strategi
• Suatu proses aksi • Fokusnya diperluas sehingga mencakup juga variabel‐variabel psikologi, sosiologi dan poli>k
The Impact of IS/IT Strategy Failure
1. The systems that are developed and implemented do not meet overall business needs;
2. Resources are misused;
3. Strategy formula>on is essen>ally a retrofiJng process, producing enormous rework.
The causes of IS/IT Strategy Failure
1. Lack of alignment between the business and IS strategies;
2. Uncoordinated management of IS demand and IT supply;
3. Over‐centraliza>on or decentraliza>on of responsibility
Aspects of IS/IT Management Managing the information and data resource of the
organization to ensure that its business value is fully exploited and protected
Managing applications as investments, development projects and operational systems from the establishment of requirements to successful long-term use in the business
Managing information technology: introduction, development, utilization, replacement
Organizational management of IS/IT: related to resources, activities, administration.
IS/IT Organiza>on Strategies
• WriQen‐formal: the approach is very structured and procedural – Applied to key opera>onal and support
• Personal‐formal: the approach is par>ally structured which relies on individuals reaching agreement within a formally cons>tuted group process
• Personal‐informal: no formal planning rela>onship exists between IS, senior and line managers
The Roles of IT Division
• User services: delivery services, systems development, support center, informa>on center
• Architecture management: planning, technology diffusion, data management
• Technology development: research and development • General: administra>on, quality assurance
Impera>ves for the Management of IS/IT
1. Achieve two‐way alignment between the business and IS/IT strategy;
2. Develop effec>ve rela>onships with line management; 3. Deliver and implement new systems; 4. Build and manage IT infrastructure; 5. Re‐skill the IS func>on with new competencies and
knowledge; 6. Manage vendor partnerships; 7. Redesign and manage the federal IS organiza>on
Four Components Reflects The Strategic Role For IT
• The cost centre has an opera>onal focus that minimizes risks with an emphasis on opera>onal efficiency. Cost‐centre ac>vi>es are good candidates for outsourcing.
• The service centre, although s>ll minimizing risk, aims to create an IT‐enabled business capability to support current strategies.
• The investment centre has a long‐term focus and aims to create new IT‐based business capabili>es. It seeks to maximize business opportunity from IT resources.
• The profit centre is designed to deliver IT services to the external marketplace for incremental revenue and for gaining valuable experience in becoming a world‐class IS func>on.
Five Key Competencies • IT leadership, which includes IT envisioning, fusing IT
strategy with business strategy, and managing IS resources. • Architecture development, which is concerned with
developing a blueprint for the overall IT technical design. • Business enhancement, which includes business process
analysis and design, project management and managing rela>onships with users.
• Technology advancement, which is applica>on design and development.
• Vendor management, which includes managing and developing rela>onships with vendors and suppliers, nego>a>ng and monitoring contracts and purchasing.
Loca>on of IS/IT Decision Making • Content—the decision areas that are being managed. Included here
are decision areas about the whole realm of IS demand and IT supply—areas
• Authority—the individuals or groups that have the power actually to make decisions in the various areas
• Responsibili6es—the individuals or bodies responsible for day‐to‐day execu>on in decision areas.
• Coordina6on—essen>ally, the mechanisms and processes for ensuring coherence across all decision areas.
• Policies—statements of principles or ac>ons defining acceptable behaviour.
• Control—outlining the approaches to policing decisions, ensuring conformance across the organiza>on
Four Distinct Contract Types Or Sourcing Strategy
Four Dis>nct Contract Types Or Sourcing Strategy
• Contract out strategy—with this strategy the vendor is responsible for delivering the results of IT ac>vity.
• Buy‐in strategy—this strategy sees the organiza>on buying in resources from the external market, ocen to meet a temporary requirement.
• Preferred contractor strategy—with this approach, organiza>ons contract long term with a vendor to reduce risk, with the vendor responsible for the management and delivery of an IT ac>vity or service.
• Preferred supplier strategy—this strategy takes the buy‐in approach further, with an organiza>on seeking to develop a long‐term close rela>onship with a vendor in order to access its resources for on going IT ac>vi>es.
Five Roles Cri>cal to Success
• Leadership; • Visionary; • Rela>onship builder; • Poli>cian; • Deliverer.
Establishing IS/IT CommiQees
• Ensuring top management involvement in IS planning; • Ensuring the fit between IS and business strategy; • Improving communica>on with top and middle
management; • Changing user aJtudes to IT.
The Execu>ve Steering Group
• This group is as cri>cal to the whole structure as the keystone to an arch.
• Its membership should reflect the dominant coali>on, which implies they are: – Able to recognize the poten>al of IS/IT in terms of the business
strategy;
– Keen to exploit IS/IT as a business weapon; – Able to influence the management of systems in the area of the
business they represent;
– Have the confidence of the execu>ve to whom they report
1. Strategy: the ability to iden>fy and evaluate the implica>ons of IT‐based opportuni>es as an integral part of business strategy formula>on and define the role of IS/IT in the organiza>on.
2. Define the IS contribu6on: the ability to translate the business strategy into processes, informa>on and systems investments and change plans that match the business priori>es (i.E. The IS strategy).
3. Define the IT capability: the ability to translate the business strategy into long‐term informa>on architectures, technology infrastructure and resourcing plans that enable the implementa>on of the strategy (i.E. The IT strategy).
4. Exploita6on: the ability to maximize the benefits realized from the implementa>on of IS/IT investments through effec>ve use of informa>on, applica>ons and it services.
5. Deliver solu6ons: the ability to deploy resources to develop, implement and operate IS/IT business solu>ons that exploit the capabili>es of the technology.
6. Supply: the ability to create and maintain an appropriate and adaptable informa>on, technology and applica>on supply chain and resource capacity.
Four Solu>ons To The Development Of The Requisite (Essen>al) Skills
1. Training new recruits from school or university, which is expensive. Also, people early in their careers are more likely to move on within three to five years.
2. Recrui>ng experienced staff from other organiza>ons, which can be risky.
3. Training exis>ng non‐IS people, especially in applica>on skills in user areas, which may require the development of new job roles.
4. Using external resources, either on a short‐term basis to overcome peak loads, etc. Or longer term to provide the organiza>on with par>cular skills.
Posi>oning IS/IT Resources in the Organiza>on
• Decentralize resources: IS/IT resources under the control of the business units
• Disperse resources:resources are dispersed into func>ons within the unit
• Convert IT to a profit center: this is really a service bureau mentality
• Set up a separate business en>ty: transforms profit center into a business in its own right.
The Culture Gap
• Lack of shared values • No agreed strategy • Failed projects and systems
End of Presenta>on
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