Topic 1 -it_in_organization

MANAGEMENT INFORMATION SYSTEMS

Executive MBA PGSM

MBA program, Paris Graduate School of Management, Management Information System, Dr. Pham Van Tai

Management Information System

TOPIC 1

IT in Organization

MBA program, Paris Graduate School of Management, Management Information Systems, Dr. Pham Van Tai

Managing IT in an E-World

• Computer technology (hardware and software) forprocessing and storing information, as well ascommunications technology for transmitting information

Information Technology (IT)


Executive MBA PGSM



• IT has become more pervasive– IT does not exist only in the back-office– More and more employees are reliant upon IT for

their daily work

• Management of IT has changed– Business managers and users expect more from IT– The management of IT has become more complex



• Hard to predict trends due to rate of change inIT industry

• Consider several mis-predictions …


Executive MBA PGSM



This “telephone” has too many shortcomings to be seriously considered as a means ofcommunication. The device is inherently of no value to us.

-Western Union internal memo, 1876

I think there is a world market for maybe five computers.

There is no reason anyone would want a computer in their home.

640K ought to be enough for anybody.

Dell has a great business model, but that dog won’t scale.

MISPREDICTIONS BY IT INDUSTRY LEADERS

-Thomas Watson, chairman of IBM, 1943But what [is a microchip] good for?

-Engineer at the Advanced Computing Systems Division of IBM, 1968

-Ken Olson, president, chairman, and founder of Digital Equipment Corp., 1977

-Attributed to Bill Gates, chairman of Microsoft, 1981

-John Shoemaker, head of Sun’s server division, 2000

What would I do? I'd shut [Apple] down and give the money back to the shareholders.

--Michael Dell, chief executive officer and founder of Dell Computer, 1997



• IT investments are important strategicdecisions for many organizations

By the year 2000, more than halfof capital expenditures bybusinesses in developed

countries were for IT purchases


Executive MBA PGSM


RECENT INFORMATION TECHNOLOGYTRENDS

• Computer Hardware: Faster, Cheaper, Mobile– Computers have become smaller and faster– Hardware prices have dropped– Trend over time is for more mobile computers

Microcomputers(1970’s)

IBM PersonalComputer

(1981)

Personal DigitalAssistants [PDAs]

introduced(early 1990s)

LaptopComputers

outsell desktops(2005)

Touch screen cellphones

introduced(2007)



• Computer Software: Custom and Prewritten,Standardized and Integrated– Standardization

• Has enabled increased collaboration• Many “standards” are just de facto standards (e.g.

Microsoft Windows, Office, and Internet Explorer)


Executive MBA PGSM



• Computer Software: Custom and Prewritten,Standardized and Integrated

• Software packages with integrated modules thatpass common business transactions across groups,divisions, and national boundaries in “real time”

Enterprise Systems



• Computer Networks: High Bandwidth, Global,and Wireless

ARPANET created(late 1960s)

Introduction of theWorld Wide Web

(early 1990s)

Consumer high-speedInternet connections

widely available(early 2000s)

Number of Internetusers tops 1 billion

(2005)

Wireless Internetaccess common in

many locations(today)


Executive MBA PGSM


New Ways to Compete

• IT can shape business strategy• Ways of competing (Porter, 1980)

• Compete by being a low-cost producer of a good orserviceCost

• Compete by offering products or services customersprefer due to superiority with innovativeness, image,quality, or customer service

Differentiation

• Simultaneously focusing on low-cost and differentiationoften within a specific market nicheBoth


New Ways to Compete

• IT can decrease organizational costs– Examples:

• Automating transaction time• Shortening order cycle time• Providing operational information for decision making

• IT can enable differentiation– Examples:

• Giving sales personnel information to better serve customers• Providing just-in-time supplies for customers• Creating new information-based products• Allowing product customization by the consumer


Executive MBA PGSM


New Ways to Work

• Pros– Flexibility– Work-life balance

• Cons– Isolation– Fewer opportunities

• Individuals who use mobile technology and/ornetwork connections to work remotely from theoffice

Telecommuters


New Ways to Work

• Pros– Work may change more than when an employee of a single

organization– Organizations do not need to make long-term commitments to an

employee• Cons

– Lack of benefits– Unpredictability in scheduling and work

• Individuals who choose to contract out theirservices and are not tied to an organization

Free Agents


Executive MBA PGSM


New Ways to Work

• Pros– Workers can be located anywhere– Teams can be composed of members with specialized skills

from different business units or companies

• Cons– Coordination can be more difficult

• Geographically separated work teams whosemembers communicate through the use of IT

Virtual Teams


Managing IT in Organizations

• Information Technology departments can varygreatly across businesses depending onorganizational needs

• The organizational unit or department that hasthe primary responsibility for managing IT

Information Systems (IS) Department


Executive MBA PGSM



Factory Strategic

Support Turnaround

MODES OFDEPENDENCY ON IT

Need for New Information Technology

Need forReliableInformationTechnology

(Based on Nolan and McFarlan 2005)

Defensive Offensive



• Support Mode– Low Need for New

Information Technology– Low Need for Reliable

Information Technology– IT primarily for back-office

functions

Support


Executive MBA PGSM



• Factory Mode– Low Need for New

Information Technology– High Need for Reliable

Information Technology– Dependent on IT for business

operations, but do not investin new IT to compete in newways

Factory



• Strategic Mode– High Need for New

Information Technology– High Need for Reliable

Information Technology– Dependent on IT for

operations and on new ITinvestments to implementnew business strategies

Strategic


Executive MBA PGSM



• Turnaround Mode– High Need for New

Information Technology– Low Need for Reliable

Information Technology– Companies in the Support

quadrant may enter this modeby taking advantage of a newtechnology with the goal ofentering the Strategic mode

Turnaround



• Computer and communicationsinfrastructure that enables informationsharing over standard IT platforms

TechnologyAsset

• Established partnering relationships forjoint IT-business decision-making

RelationshipAsset

• Pool of IT people talent for needed mixof technology and business skillsHuman Asset


Executive MBA PGSM



IT Worker Myths

• IT doesn’t matter and providesno business benefits

• IT work is boring andmonotonous

• All IT jobs are beingoutsourced

• Globalization will ruin the ITfield

• U.S. IT worker demand isdeclining

IT Worker Facts

• IT is vital to businessprofitability

• Fast pace of technologicalchange keeps IT careersinteresting

• Offshoring threat overstated• Globalization of IT is an

opportunity• U.S. IT worker demand will

remain strong



• IT Leadership Roles

• A firm’s high-level general IT manager with both technology andbusiness leadership experience. Together with the organization’sexecutive management team the CIO ensures the alignment of ITresources with business goals and plans for integration of IT forstrategic advantage

Chief Information Officer (CIO)


Executive MBA PGSM


CEOCEO

Business Unit#1

Business Unit#1

Business Unit#2

Business Unit#2

Business Unit# 3

Business Unit# 3 CIOCIO

VP (IT)Individual

VP (IT)Individual

VP (IT)Retirement

Services

VP (IT)Retirement

ServicesVP (IT) GroupVP (IT) Group

CorporateApplications /Payroll / HR

CorporateApplications /Payroll / HR

EnterpriseArchitectureEnterprise

ArchitecturePlanning and

FinancePlanning and

FinanceSystems

OperationsSystems

Operations


• Typical IS Organization Chart