Chapter 11

Information Systems Management

Q1: What are the responsibilities of the IS department?

Q2: How is the IS department organized?

Q3: What are the advantages and disadvantages of outsourcing?

Q4: How do organizations plan the use of IS?

Q5: What are your user rights and responsibilities?

How does the knowledge in this chapter help you?

Study Questions

Q2:  How Is the IS Department Organized?

(video)

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Q3: What Are the Advantages and Disadvantages of Outsourcing?

• Process of hiring another organization to perform services

• Any value chain business activity can be outsourced

• “Your back room is someone else’s front room.” (Peter Drucker)

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Popular Reasons for Outsourcing IS Services

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Risk Reduction

• Caps financial risk

• Ensures level of quality or avoids having substandard quality

• Less likely to pick wrong hardware, wrong software, wrong network protocol, or implementing tax law changes incorrectly

• Risk management vendor’s responsibility

• Easier to hire another vendor than fire and rehire internal staff

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International Outsourcing

• IndiaLarge, well-educated, English-speaking,

labor cost 70-80% less than in US

• China and other countries

• Modern telephone technology and Internet-enabled service databases

• Customer support and other functions operational 24/7 (i.e., Amazon’s cs centers)

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What Are Outsourcing Alternatives?

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Risks of Outsourcing

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Benefits Outweighed by Long-Term Costs

• Unit fixed cost contract may prevent benefits of economies of scale

• Vendor de facto sole source

• Changing pricing strategy

• No easy exit

• Difficult to know if vendor well managed

Cost-benefit analysisEstimate dollar costs

Value tangible costs and tangible benefits

Software license (tangible cost)Reduce customer support cost 10% (tangible benefit)Value intangible costs and intangible benefitsValue of email system (intangible benefit)

Customer dissatisfaction (intangible cost)

Q5: How Do Organizations Decide How Much to Spend on IS?

• Costs as Spending in (Mostly can be tangible in quantitative data)―Hardware―Telecommunications―Software―Services―Personnel―Time―Disruption of normal operation (opportunity

cost)

The Common Costs and Benefits of Information System Project

 

―Increased productivity (by…)―Lower operational costs―Reduced workforce―Lower computer expenses―Lower outside vendor costs―Lower clerical and professional costs―Reduced rate of growth in expenses―Reduced facility costs

Tangible Benefits (Cost Savings) (Tangible data can be in currency, in

percentage, or simply by how much or how many times)

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Intangible Benefits(Mostly show in descriptive data)

• Improved asset utilization

• Improved resource control

• Improved organizational planning

• Increased organizational flexibility

• More timely information

• More information• Increased

organizational earning

• Legal requirements attained

• Enhanced employee goodwill

• Increased job satisfaction

• Improved decision making

• Improved operations• Higher client

satisfaction• Better corporate image• Faster business

expansion

Q6: What Are Your IS Rights and Responsibilities? (video)

Q6: What Are Your IS Rights and Responsibilities? (cont’d)

Jeff needs this knowledge to understand how he should be managing IS and IT resources at Fox Lake.He could have prevented problem you will learn about in Chapter 12.

You can use knowledge to be a more informed consumer of IS department services.

Help your organization better manage and plan its information systems and IT Infrastructure.

Work better with IS department on innovative project you envision that have an IS component.

How Does the Knowledge in This Chapter Help Fox Lake and You?

Suppose you are a manager at a company with the stated policy. “Computers, email, and the Internet are to be used primarily for official company business. Small amounts of personal email can be exchanged with friends and family, and occasional usage of the Internet is permitted, but such usage should be limited and never interfere with your work.”

You learn one of your employees has been engaged in the activities listed on following slide.

Ethics Guide: Using the Corporate Computer

10.Tweeting friends on your computer about your softball win last night.

11.Selling personal items on eBay

12.Paying personal bills online13.Paying personal bills online

when traveling on company business

14.Buying an airplane ticket for an ill parent over the Internet

15.Changing content of a personal website

16.Changing content of a personal business website

17.Buying an airplane ticket for a personal vacation over Internet

Ethics Guide: Using the Corporate Computer (cont’d)1. Playing computer games

during work hours2. Playing computer games

before and after work hours3. Responding to emails from

an ill parent4. Watching DVDs during lunch

and breaks5. Sending emails to plan a

party that mostly involves people from work

6. Sending emails to plan a party that involves hardly anyone from work

7. Updating your Facebook page

8. Reading news on CNN.com9. Checking stock market over

Internet

1. Explain how you would respond to each situation.