MANAGING OPERATIONS Andreas Rio, M.Eng.. Managing Operation The three major operational issues discussed: outsourcing information systems functions

MANAGING OPERATIONSAndreas Rio, M.Eng.

Managing Operation

The three major operational issues discussed:

outsourcing information systems functions

information security planning for business continuity

Introduction

Due to mergers, the Internet, e-commerce, and the September 11, 2001, the subject of computer operations has been receiving a lot of attention.

Systems operations are important because, if they are not professionally run (and backed up properly), a computer or network crash could shut down a company’s business for some period of time.

Introduction

The main change in operations is a shift in viewpoint.

Traditionally, managing operations has meant managing inward—managing one’s own operations staff, including those who work in the data center, data administration, network administration, and systems programming.

Today, it is just as likely to mean managing outward —managing the company’s relationships with IT external service providers(ESPs) who have taken over day-to-day operational work.

Introductions

Operations

Why Talk About Operations? Because it involves so much money, it’s

complex, and it’s important to business operations.

57% of budget is for operations 33% of budget is for new development 10% is administration and training.

Operations

Solving Operational Problems Problems:

Response time is slow, network are down, data is not available or data is wrong.

The best solution is to: continually document and measure what you

are doing, uncover the real problems, not just the

apparent ones, and then set the standards.

Operations

Operational Measures The measures are internal (what IS needs to know)

and external (what customers see). Problems reported by the external measures can generally

be explained by deviations in the internal measures. Internal measures:

computer usage as a percentage of capacity Availability of mainline system Disk storage utilized Job queue length Number of job run Age of applications Number of unsolved problems.

Those measures have impact on user satisfaction.

Operations

The Importance of Good Management IS management needs to create a corporate

culture that recognizes and values good operations.

The skills required of an operations manager are similar to those needed in a factory. Scheduling work Monitor performance Respond quickly to production breakdown.

CIOs need to be concerned about operations.

What’s new in operations?

Companies Have Cleaned Their Operational House

More Operations Managers are Managing Outward

Operations are Being Simplified Certain Operations are Being

Offloaded


Companies Have Cleaned Their Operational House

Y2K and the Internet forced companies to “clean house”in their data and network center operations.

The resulting changes have led to far better operational structures because management took the time to define the rules for operations and put better policies and procedures in place.

Had they not gone through Y2K, most companies would not be operationally prepared for the Internet.


More Operations Managers are Managing Outward–

A growing number of companies are turning to a third party to run their data centers.

Even for companies keeping their own data centers, an increasing number are taking advantage of operational services provided by third parties, especially for e-business operations.


Operations are Being Simplified– Operations are frequently simplified by

centralizing programs –via server-based computing –rather than distributing them on PCs.


Certain Operations are Being Offloaded Web “event management” means hosting

a real-time event on the Web. When successful, these “Webcasts” lead to huge spikes in Web site hits.

To avoid being swamped and having the Web site crash, companies offload the operational aspects of these events to third parties that specialize in hosting such activities.


CASE EXAMPLE: Microsoft

When Microsoft officially announced a new version of Windows, it did so not only at a major launch event in San Francisco, California, but also via a public Internet broadcast, and a private Webcast to 6,000 original equipment manufacturer (OEM) system builders in 83 countries.

That private Webcast was handled by a company that has “edge servers” in 66 countries, giving users in far-flung locations fast downloads of Web content and streaming media.

Outsourcing Information System Function

Outsourcing means turning over a firm’s computer operations, network operations, or other IT function to a provider for a specified time—generally, at least a few years.

Outsourcing descended on IS departments as a follow-on to the merger and acquisition activities in the 1980s.

Companies faced global competition, so they had to focus on their core competencies, and do some restructuring.

Outsourcing is part of the drive for focus and value, and it is not solely an IT issue.

Outsourcing Information System Function Relationships have expanded from buying

professional services, to buying products and transactions, to integrating systems, to outsourcing –the most bundled approach to contracting.

IS organization bought professional service, such as planning (or consulting), building or maintaining applications, building or maintaining networks, and training.

They bought products, that may or may not include training.

System integration is project based, while outsourcing is time based.



In this evolution: CIOs have increasingly lost control, vendors take on more risks, margins increase, and the importance of choosing the right

provider becomes more important.


IT outsourcing essentially began in 1989. Company wanted to remove the huge IT

investment and shift those fixed cost to variable cost.

Problems: “us versus them” mindset Culture clashed


Today, the field also includes transitional outsourcing (helping a

company move to a new IT platform), best of breed outsourcing (outsourcing

each IT function to a best-of-breed provider),

offshore outsourcing (to providers in India and elsewhere around the world),


shared services (consolidating back-office function into one center in-house),

business process outsourcing (outsourcing a process with a large IT underpinning), and

e-business outsourcing (outsourcing the infrastructure supporting e-business).

Outsourcing Spectrum

Case Studies

Kodak was the 1st major company to outsource its IS dept

It put in place a robust organizational structure: a management board (including senior management

from both companies and focuses on strategic issues), advisory council (handling technical and operational

issues by focusing on what Kodak wants, not how the services are delivered),

supplier and alliance management group (managing all longer-term outsourcing relationships and other contracts with large IT suppliers),

Case Studies

Kodak was the 1st major company to outsource its IS dept

It put in place a robust organizational structure: relationship (the focal point of Kodak’s relationship

with one provider), working groups (to facilitate changes in processes,

promulgate standards), achieve business recovery in case of disruption, and promote effective use of IS services, and client

surveys (conducted twice a year).

Information Security


Hackers use nine approaches to cause harm: cracking the password, tricking someone, network sniffing, misusing administrative tools, paying middlemen, denial of service attacks, Trojan horse programs, viruses, and spoofing.

Because airtight security is not possible, companies need to prioritize their risks and work on safeguarding against the greatest threats.


Cracking the password Guessing someone’s password is easier. Use software that can test out all combinations

Tricking someone Posing as a network manager, he/she ask

passwords to solve a fictitious network problem Network sniffing

Crackers launch software that monitors all traffic looking for password or other valuable information.


Misusing administrative tools Helpful tools can be turned against a network. A tool

for uncovering weak spots in a network has been used by hackers.

Paying middlemen Placing oneself between 2 communicating parties, and

denying one party access to a session. Denial of service attacks

Flooding so that the service becomes freezes. Trojan horse programs Viruses Spoofing

Crackers can gain access to a site.


Security’s Five Pillars

1. Authentication

2. Identification

3. Privacy

4. Integrity

5. Nonrepudiation


Authentication verifies the authenticity of users, Identification identifies users to grant them

appropriate access, Privacy protects information from being seen, Integrity keeps information in its original form,

and Non repudiation prevents parties from denying

actions they have taken. It can prove that someone was the actual sender and

other the receiver.


Antivirus Software

Firewalls

Physical Security

Access Control

Intrusion Detection

Encrypted Files

Encrypted Login

Reuseable Passwords

Digital IDs

PCMCIA

Biometrics

Business Continuity

Safeguarding people during a disaster Documenting business procedures Giving employees the tools and space to handle

personal issues

It is a business issue, because IT disaster recovery is just one component.

There are 2 options for disaster recovery: Using Internal Resources Using External Resources

Business Continuity

Using Internal Resources Organizations that rely on internal

resources for IT disaster recovery generally see this planning as a normal part of systems planning and development.

They use multiple data centers, distributed processing, backup telecom facilities, and local area networks to provide the backup and recovery they need.

Business Continuity

Using External Resources In many cases, a cost-versus-risk analysis

may not justify committing permanent resources to contingencies; therefore, companies use the services of a disaster recovery firm.

These firms provide integrated disaster recovery services, specialized disaster recovery services, and online and off-line data storage facilities.

Tugas Presentasi Kelompok

Case studies mengenai outsourcing bidang IT berupa contoh perusahaan yang menggunakan jasa outsourcing.

Analisis dari sisi: mengapa perusahaan tsb menggunakan jasa outsourcing, bagaimana sistem outsourcing itu diterapkan dalam perusahaan, seperti apa dampak outsourcing bagi kelangsungan bisnis perusahaan secara keseluruhan.

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MANAGING OPERATIONS Andreas Rio, M.Eng.. Managing Operation The three major operational issues discussed: outsourcing information systems functions