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Chapter 1Chapter 1IntroductionIntroduction
Managing the Information Managing the Information Technology ResourceTechnology Resource
Paula GouldingPaula Goulding
Chapter OutlineChapter Outline
Evolution of role of ITEvolution of role of IT Role of IT management versus other Role of IT management versus other
business functionsbusiness functions View of IT by IT executivesView of IT by IT executives How to better manage IT resourcesHow to better manage IT resources Key issues in the management of ITKey issues in the management of IT Importance of successfully managing ITImportance of successfully managing IT
Primary PurposePrimary Purpose
IT is important and necessary for a IT is important and necessary for a successful organizationsuccessful organization
Successful management of IT is necessary Successful management of IT is necessary for competitive advantagefor competitive advantage
3 Strategies for Competitive 3 Strategies for Competitive AdvantageAdvantage
Cost leadershipCost leadership– Competing with lower costsCompeting with lower costs
Product differentiationProduct differentiation– Competing with valueCompeting with value
Product focusProduct focus– Competing by restricting one’s marketCompeting by restricting one’s market
IT Management CategoriesIT Management Categories StrategicStrategic
– Pertinent to long-term attainment of goals and Pertinent to long-term attainment of goals and business as a wholebusiness as a whole
TacticalTactical– Needed to achieve strategic plans and goals to Needed to achieve strategic plans and goals to
produce changes for successproduce changes for success OperationalOperational
– Process and actions that must be performed on Process and actions that must be performed on a day-to-day basis to maintain performance levela day-to-day basis to maintain performance level
Additional Skills of IT ManagersAdditional Skills of IT Managers
FinancialFinancial Human ResourceHuman Resource Relationship Relationship
ManagementManagement LegalLegal
GovernanceGovernance MarketingMarketing NegotiatingNegotiating LeadershipLeadership
John RockartJohn Rockart“The limited number of areas in which results, if they are satisfactory, will ensure successful competitive performance for the organization. They are the few key areas where things must go right for the business to flourish. If results in these areas are not adequate, the organization’s efforts for the period will be less than desired.”
3 Primary Computing Eras3 Primary Computing Eras
1.1. Mainframe Mainframe Computer EraComputer Era
2.2. PC Computing EraPC Computing Era
3.3. Pervasive Pervasive ComputingComputing
Historical View of ITHistorical View of IT
Initially for government/military useInitially for government/military use Businesses used for financial automation Businesses used for financial automation Data Processing was key functionData Processing was key function Computers were costly and large in sizeComputers were costly and large in size Not widely usedNot widely used
Historical ViewHistorical View Cost decreasedCost decreased Size decreasedSize decreased Use of personal computers increasedUse of personal computers increased Business staff and IT staff began to Business staff and IT staff began to
interactinteract Technology issues increasedTechnology issues increased Networks, E-mail, and Internet became Networks, E-mail, and Internet became
necessitynecessity
Role of ITRole of IT
No longer just serves a businessNo longer just serves a business Integral in business strategyIntegral in business strategy Impacts every area of businessImpacts every area of business Complexity increasesComplexity increases How does IT function vs. the entire How does IT function vs. the entire
organizationorganization Responsible for the integration of Responsible for the integration of
informationinformation
Enabler of E-BusinessEnabler of E-Business
All aspects of IT are more externally visibleAll aspects of IT are more externally visible Serve as mediator among various functionsServe as mediator among various functions
– DisintermediationDisintermediation– ReintermediationReintermediation– HypermediationHypermediation– InfomediationInfomediation
DisintermediationDisintermediation
Eliminates the middlemanEliminates the middleman Electronic stock tradingElectronic stock trading Forces focus on service differentiationForces focus on service differentiation
ReintermediationReintermediation
Use of Internet to reassemble buyers and Use of Internet to reassemble buyers and sellers in new wayssellers in new ways
Allows negotiation of prices, warranties, Allows negotiation of prices, warranties, quality, shippingquality, shipping
Example includes merging of banking, Example includes merging of banking, insurance, and other financial servicesinsurance, and other financial services
HypermediationHypermediation
Interactions found via Internet transactionsInteractions found via Internet transactions Complete, seamless, invisible supply chain Complete, seamless, invisible supply chain
to customersto customers Leverages external partnersLeverages external partners
InfomediationInfomediation
Allows technology users to manage large Allows technology users to manage large amounts of informationamounts of information
Search engines and portals provide for Search engines and portals provide for narrowing searchesnarrowing searches
Data mining technology is criticalData mining technology is critical IT helps business sift through information for IT helps business sift through information for
insight and clarityinsight and clarity
Change AgentChange Agent
Dynamic StabilityDynamic Stability– IT supports business in dynamic changes with IT supports business in dynamic changes with
no change to business processesno change to business processes
Can enable/inhibit incremental and radical Can enable/inhibit incremental and radical changeschanges
Innovation may depend on ITInnovation may depend on IT
Enabler of GlobalizationEnabler of Globalization
Expands business Expands business presence beyond presence beyond bordersborders
IT maintenance of IT maintenance of Infrastructure and Infrastructure and TechnologiesTechnologies
IT/Business GapIT/Business Gap
IT/Business alignment criticalIT/Business alignment critical AlignmentAlignment
– Application of IT in an appropriate and timely Application of IT in an appropriate and timely manner, in harmony with business goals, manner, in harmony with business goals, strategies, and needsstrategies, and needs
EnablerEnabler InhibitorInhibitor
CSC Survey Top RankingsCSC Survey Top Rankings
Information Systems alignment with Information Systems alignment with Corporate Goals ranked 1Corporate Goals ranked 1stst or 2 or 2ndnd 9 of 11 9 of 11 years!years!
Organizing & utilizing dataOrganizing & utilizing data Connecting to customers, suppliers, and/or Connecting to customers, suppliers, and/or
partners electronicallypartners electronically Optimizing organizational effectivenessOptimizing organizational effectiveness
IT vs. Other FunctionsIT vs. Other Functions
Encompasses entire enterpriseEncompasses entire enterprise Affects all business functionsAffects all business functions Extends beyond business boundariesExtends beyond business boundaries Affects every level of managementAffects every level of management Impact affects entire value chain, including Impact affects entire value chain, including
suppliers and customerssuppliers and customers Creates synergy between departmentsCreates synergy between departments
Value of ITValue of IT
IT usage has increased three-fold since IT usage has increased three-fold since 19781978
Substantial capital expendituresSubstantial capital expenditures Cost of doing businessCost of doing business Productivity measurementProductivity measurement Alignment with strategic business goalsAlignment with strategic business goals
Luftman’s 6 ComponentsLuftman’s 6 Components
Communications Communications MaturityMaturity
Competency/Competency/Value Measure-Value Measure-ment Maturityment Maturity
Governance Governance MaturityMaturity
Partnership Partnership MaturityMaturity
Scope and Scope and Architecture Architecture MaturityMaturity
Skills MaturitySkills Maturity