Chapter 2

Manageable Trends

Six Trends IT influences different industries, and the firms within them, in

different ways Telecommunications, computing, and software technologies are

evolving rapidly and will continue to evolve The time required for successful organizational learning about It

limits the practical speed of change External industry, internal organizational, and technological changes

are pressuring firms to “buy” rather than “make” IT software and services

While all elements of the IT system life cycle remain, new technologies both enable and require dramatically different approaches to execution

Managing the long-term evolution of the partnership between general management, IT management, and User management is crucial for capturing the value of new IT-enabled business opportunities

Challenges in Managing IT Young Technology Technological Growth

Leaps in Cost PerformanceQuick transition from market leader to obsolescence

End-User Coordination Interdisciplinary focus of MIS vs CSSpecialized vocabulary

SpecializationOutsourcing

Shift in Application Focus

Theme 1: Strategic Impact IT affects different industries at different rates

IT changes the roles of players in the “value chain”Can also eliminate roles of players

Changes products and product mixCars contain huge computing powerChanges customer perceptions of goods/services

Affects the basis of competition

Airlines gain or lose competitive advantage Defense industries CAD/CAM, robots, etc.

Not much marketing

RetailingPoint of sale, bar coding, Customer clubs, just in time ordering, internet catalogsPressure travels throughout the supply chain

Can serve as a weeding processPeople’s Express, Frontier Airlines, Encyclopedia

Britanica

Theme 1: Strategic Impact

Categories of Relevance and ImpactStrategic - IT crucial for future competitive success

Banks, insurance companies, retail chains

Turnaround - firm not totally dependant on IT for survival Manufacturing - factories, marketing and accounting

Factory - IT enables critical, time-dependant operations Short interruptions in service can be disastrous Often outsource

Support - IT helps, but not critical

Theme 1: Strategic Impact

IT applications which were non-existent in 1992 were sate of the art in 1995, routine by 1997, and are now obsoleteLife of a machine is now expected to be 3 years

Era I - 1950s to 1970s Era II 1970s to 1980s Era III 1990s

Theme 2: Integrating Changing Technology Platforms

Requires user involvementMay result is user replacementRequires new methodsMust overcome old patterns of performance

Four phases of innovation and diffusion

Theme 3: Assimilating Emerging Technologies

Phase 1: Technology Identification and InvestmentFind or fund new technologyGain top level management support

Phase 2: Technology Learning and AdaptationEncourage user-oriented experimentationMay provide new perspectives

Theme 3: Assimilating Emerging Technologies

Theme 3: Assimilating Emerging Technologies

Rationalization/Management ControlUsing mature technologySetting up control procedures

Maturity/Widespread Technology TransferMust maintaining user enthusiasmMust maintain legacy systems

Push towards outsourcingLimited staffRising Development costsAvailability of off-the-shelf solutionsExperience with standardized packagesBuy vs. Make decision

Difficult to maintain culture and loyaltyVendor durabilityChurn

Theme 4: Sourcing Policies for the IT Value Chain

Traditional method was the Systems Development Life Cycle:Design, Construct, Implement, Operate,

MaintainUsed for Large-scale projects

Small Team projectsDatabaseCaseObject Oriented

Theme 5:Applications Development Process

Three different stakeholdersIT managementUser ManagementGeneral Management

IT ManagementIT department formed and continues through

internal and external pressure

User ManagementHave business and technology concerns

General Management

Theme 6:Partnership of Three Constituencies

The IT Environment

Era I

Era II

Era III

Primary target

Justification/Purpose

Organizational

Individual

Enterprise & IndustryIntegration

Productivity/Efficiency

Individual / GroupEffectiveness

Value Creation