SECTION I: Managing Information Resources and Technologies Introduction:
There is a real need for business end users to understand and know how to plan and manage information systems and technology in an organization. Information technology capability enables managers to manage organizational interdependence to meet business needs. Information technology such as telecommunications, networks, powerful personal computers and information resources are now more readily available to more managers than ever before.
Analysing CheckFree We can learn a lot about the total cost of ownership considerations and technology architecture choices facing many businesses today.
Take a few minutes to read it, and we will discuss it (See CheckFree in section XI).
13-1 Managers and Information Technology: [Figure 13.2] Information technology presents managers with a major managerial challenge. The competitive pressures of the business and technology environment of the late 1990s are forcing major firms to rethink their use and management of information technology. Many business executives now see information technology as an enabling technology for managing thecross-functional and interorganizational processes that business units must have to successfully confront the competitive measures they face.
A variety of forces that seem to be causing a significant change in the structure and distribution of managers in organizations in which information technology plays a major role include:
1. Organizations are become more knowledge-based, “composed largely of specialists who direct and discipline their own performance through organized feedback from colleagues, customers, and headquarters”.
2. The Internet, intranets, and extranets and more cost-effective hardware and software are enabling individuals, teams, workgroups, business units, and organizations to be “wired together” in close business relationships that can provide the communication and coordination needed in today’s competitive global marketplace.
Decision support capability provided by information systems technology is changing the focus of managerial decision making.
Managing the information systems resources of a business is no longer the sole province of information system specialists. Instead, informationresource management has become a
major responsibility of all managers.
Poor IS Performance:
The information systems function has performance problems in many organizations. For example, information technology is not being used effectively, efficiently, or economically by many organizations. Information technology is not being used:
Effectively - if it is used primarily to computerize traditional business processes, instead of using it for decision support and innovative processes and products to gain competitive advantages.
Efficiently - by information services groups that provide poor response times, frequent downtime, incompatible systems, unintegrated data, and applications development backlogs.
Economically - if information technology costs rise faster than other costs, even though the cost of processing each unit of data has decreased due to dramatic price reductions and improvements in hardware and software technology.
Management Involvement and Governance: [Figure 13.4] The experiences of successful organizations reveal that the basic ingredient of high quality information systems performance is extensive and meaningful involvement of managers and end users in governance of the IS function.
Proper involvement of managers in the management of IT requires the development of governance structures that encourage the active participation of managerial end users in planning and controlling the business uses of IT. By being involved in IT decisions that affect their business units, managers avoid IS performance problems. Without this high degree of involvement, managers will not be able to improve the business value of information technology. Several major levels of management involve and governance of information technology include:
Executive Information Technology Committee
- Committee of top executives who do strategic information system planning and coordinate the development of major information systems projects.
IT Steering Committee
- Committee of business unit managers, operating managers, and management personnel from the information services department who oversee the progress of systems development projects
End User Management
- Direct end user management of information technology in business units and work groups, including participation in developing key information systems.
13-2 Organizations and Information Technology: [Figure 13.5] To better understand the organizational impact of information technology, it is useful to view an organization as a sociotechnical system.
The sociotechnical systems concept emphasizes that to improve an organization's performance, managers must:
1. Change one or more of these components
2. Take into account the relationships among these interdependent components.
The basic components of a sociotechnical system include:
People: - Managers are individuals with a variety of preferences for information and diverse capabilities for effectively using information provided to them. Information systems must produce information products tailored to meet managers’ individual needs.
Task: - Tasks in many organizations have become quite complex and inefficient over time. Information technology can play a major role in fighting organizational complexity by supporting the reengineering of business processes.
Technology: - Technology of computer-based information systems continues to grow more sophisticated and complex. However, this technology should not dictate the information needs of end users in the performance of their organizational tasks. It should accommodate the management culture and structure of each organization.
Culture: - Organizations and their subunits have a culture which is shared by managers and other employees. They have a unique set of organizational values and styles which can range from informal too very formal. The designs of information systems and information products must accommodate such differences.
Structure: - Organizations structure their management, employees, and job tasks into a variety of organizational subunits. The IS function must no longer assume a hierarchical, centralized, organizational structure which it supports by centralizing processing power, databases, and systems development at the corporate headquarters level. This type of structure emphasizes gathering data into centralized databases and producing reports to meet the information needs of functional executives.
Instead, IT must be able to support more decentralized, collaborative types of organizational
structure, which needs more interconnected intranets or client/server networks, distributed databases, downsized computers, and systems development resources distributed to business unit and work group levels. Thus, information technology must emphasize quick and easy communication and collaboration among individuals, business units, and other organization workgroups, using electronics instead of paper.
13-3 Information Resource Management: [Figure 13.7] Information resource management has become a popular way to emphasize a major change in the management and mission of the information systems function in many organizations. In many organizations, IRM may be viewed as having five major dimensions:
- information technology must be managed to contribute to a firm=s strategic objectives and competitive advantages, not just for operational efficiency or decision making.
- information technology and information systems can be managed by functional organizational structures and managerial techniques commonly used throughout other business units.
- data and information, hardware and software, telecommunications networks, and IS personnel are vital organizational resources that must be managed like other business assets.
- all technologies that process, store, and communicate data and information throughout the enterprise should be managed as integrated systems of organizational resources.
- managing the use of information technology and information system resources in business units or workgroups is a key responsibility of their managers, no matter what their function or level in the organization.
13-4 Strategic Management: The IS function must manage information technology so that it makes major contributions to the profitability and strategic objectives of the firm. Thus, the information systems’ function must change from an information services utility focussed only on serving a firm’s transaction processing or decision support needs. Instead it must become a producer or packager of
information products or an enabler of organizational structures and business processes that can give a firm a comparative advantage over its competitors.
The Chief Information Officer: Many companies have created a senior management position, the chief information officer(CIO), to oversee the use of IT. The CIO has three main responsibilities:
1. Oversee the support services of traditional computer services, telecommunications, office automation systems, and other IS technology support services.
2. Concentrates on long-term planning and strategy. CIO does not direct day-to-day information service activities.
3. Works with other top executives to develop strategic information systems that help make the firm more competitive in the marketplace.
The instructor should point out to students that many organizations have filled the CIO position with executives from outside the IS field to emphasize the strategic business role of information technology.
13-5 Operational Management:
The IRM concept stresses that managerial functions and techniques and organizational structures common to most businesses can be used to manage information technology. Business and IS managers can use managerial techniques (such as planning models, financial budgets, and project management), and a mix of functional and process-based work groups and business units, just as they do in other major areas of business.
The information systems’ function is treated like other functions and expected to use the managerial techniques employed by other business units to manage its resources and activities.
Information services departments perform several basic functions and activities. These can be grouped into three basic IS functions:
1. Systems development
3. Technical services
Centralization versus Decentralization:
Modern computer-based information systems can support either the centralization or decentralization of information systems operations and decision-making within computer-using organizations.
Centralized computer facilities:
1. Can connect all parts of an organization by telecommunications networks to allow top management to centralize decision making formerly done by lower levels of management.
2. Can promote centralization of operations, which reduces the number of branch offices, manufacturing plants, warehouses, and other work sites needed by the firm.
Decentralized computer facilities:
1. Distributed networks of computers at multiple work sites can allow top management to delegate more decision making to middle managers.
2. Management can decentralize operations by increasing the number of branch offices while still having access to the information and communications capabilities they need to control the overall direction of the organization.
Information technology can encourage either the centralization or decentralization of information systems, business operations, and management.
A firm’s organizational structure and information systems architecture are influenced by:
1. The philosophy of top management
2. The culture of the organization
3. The need to reengineer its operations
4. The use of aggressive or conservative competitive strategies
Companies continue to use a variety of organizational arrangements for the delivery of information services. Some of the changing trends include:
1. In the early years of computing, when computers could barely handle a single department’s workload, decentralization was the only option.
2. The development of large mainframe computers, telecommunications, and terminals caused a centralization of computer hardware, software, databases, and IS specialists at the corporate level of organizations.
3. The development of minicomputers and microcomputers accelerated a downsizing trend back toward decentralization. Distributed client/server networks at the corporate, department, workgroup, and team levels came into being. This prompted a shift of databases and information specialists to some departments, and the creation of information centres to support end user computing.
4. Lately, the trend has been to establish tighter control over the information resources of an organization, while still serving the strategic needs of its business units. This has resulted in a centralizing trend at some organizations, and the development of hybrid structures with both centralized and decentralized components at others.
5. Some organizations have spun off there is functions into IS subsidiaries that offer information processing services to extended organizations as well as to their parent company.
6. Some organizations have resorted to outsourcing, that is, turned over all or part of there is operations to outside contractors known as system integrators or facilities management companies.
Managing Systems Development: Systems development management means managing activities such as systems analysis and design, prototyping, applications programming, project management, quality assurance, and system maintenance for all major business/IT development projects. Planning, organizing, and controlling the systems development function of an information services department is a major managerial responsibility. It requires managing the activities of teams of systems analysts, programmers, and end users working on a variety of information systems development projects. In addition, some systems development groups have established development centres, staffed with consultants to the professional programmers and systems analysts in their organizations.
Managing IS Operations:
IS operations management is concerned with the use of hardware, software, network, and personnel resources in the corporate or business unit data centres (computer centres) of an organization. Operational activities that must be managed include data entry, equipment operations, production control, and production support.
Many operations management activities are being automated by the use of software packages for computer system performance management. These system performance monitors
1. Monitor the process of computer jobs
2. Helps develop a planned schedule of computer operations that can optimize computer system performance
3. Produce detailed statistics that are invaluable for effective planning and control of computer capacity.
4. Supply information needed by chargeback systems, that allocate costs to users based on the information services rendered.
5. Process control capabilities which monitor and control computer operations at large data centres.
13-6 Resource Management Data and information, hardware and software, telecommunications networks, and IS personnel are valuable resources that should be managed for the benefit of the entire organization.
Human Resource Management of IT The success or failure of an information services organization rests heavily on the quality of its people. Managing information services functions involves the management of managerial, technical, and clerical personnel. One of the most important jobs of information service managers is to recruit qualified personnel and to develop, organize, and direct the capabilities of existing personnel. For example:
1. Employees must be continually trained to keep up with the latest developments in a fast-moving and highly technical field.
2. Employee job performance must be continually evaluated and outstanding performances rewarded with salary increases or promotions.
3. Salary and wage levels must be set, and career paths must be designed so individuals can move to new jobs through promotion and transfer as they gain in seniority and expertise.
Careers in Information Systems: Computers and their use in information systems have created interesting, highly-paid, and challenging career opportunities for millions of men and women. Employment opportunities in the field of computers and information technology are excellent, as organizations continue to expand their use of information technology.
13-7 Technology Management All technologies that process, store, and deliver data and information throughout the enterprise must be managed as integrated systems of organizational resources. Such technologies include the Internet, intranets, and electronic commerce and collaboration systems, as well as traditional computer-based information processing. These "islands of technology" are bridged by IRM and become a primary responsibility of the CIO, since he is in charge of all information technology services.
The rapid growth of the Internet, intranets, extranets, and client/server networks has made network management a major technology management function. This function is responsible for managing a company’s Internet access, intranets and extranets, and the wide area networks and interconnected local area networks of client/server computing. These networks require:
1. The major commitment of hardware and software resources.
2. The creation of managerial and staff positions to manager their use.
Network management is responsible for overseeing the quality of all the telecommunications services that most businesses rely on today.
1. Are usually responsible for evaluating and recommending the acquisition of Internet service providers, Internet and intranet servers and web browser suites, and communications hardware and software for workgroup and corporate client/server networks.
2. Work with business unit manager to improve the design, operational quality, and security of t he organization’s telecommunications networks and servers.
3. Monitor and evaluate Internet, intranet, and other network usage, telecommunications processors, network control software, and other network hardware and software resources to ensure a proper level of service to the users of a network.
Advanced Technology Management:
Developments in information systems technology have had, and will continue to have, a major impact on the operations, costs, management work environment, and competitive position of many organizations. Therefore, many firms established separate groups (advanced technology groups - ATGs) to identify, introduce, and monitor the assimilation of new information systems technologies into their organizations, especially those with a high payoff potential. These organizational units are called technology management, emerging technologies, or advanced technology groups.
13-8 Distributed Management Responsibility for managing information technology is increasingly being distributed to the managers of an organization at all levels and in all functions. Information resource management is not just the responsibility of an organization's CIO. If you’re a manager, IRM is one of your responsibilities, whether you are a manager of a company, a department, a workgroup, or a functional area. This is especially true as the Internet, intranets, and client/server networks drive the responsibility for managing information systems out to all of an organization’s functional and workgroup managers.
Managerial End User Computing: The number of end users in organizations who use computers to help them do their jobs has outstripped the capacity of many information services departments. As a result, teams and workgroups of end users must use PC workstations, software packages, and the Internet, intranets, and other networks to develop and apply information technology to their work activities. Organizations have responded by:
1. Creating end user services, or client services, function to support and manage end users.
2. Establish an information centres group staffed with user liaison specialists, or “help desks,” with end user “hot-lines”.
3. Distributed end user support specialities to departments and other work groups.
4. Establish and enforce policies concerning the acquisition of hardware and software by end users. This ensures their compatibility with existing hardware and software systems, and network connectivity standards. Policies ensure that proper controls are enforced to correct performance and safeguard the integrity of corporate and departmental networks and databases.
Managing Internet Access: Managing Internet access within organizations is a major new management responsibility. Providing Internet access to employees raises several challenging managerial issues. Examples include:
1. Heavy Internet use by employees can overrun the capacity of client/server networks. Many networks were not designed to handle the large network loads generated by World Wide Web multimedia traffic and other Internet uses.
2. Questions concerning legitimate work time use of the Internet by employees, and liability for the contents of employee E-mail on the Net.
SECTION II: Global Information Technology Management 13-9 The International Dimension: International dimensions are becoming more and more important in managing a business in the global economies and markets of today. Properly designed and managed information systems using appropriate information technologies are a key ingredient in international business, providing vital information resources needed to support business activities in global markets.
13-10 Global IT Management: [Figure 13.21] The major dimensions of the job of managing global information technology include:
1. Business IT Strategies
2. Application Portfolios
3. Technology Platforms
4. Data Management
5. Systems Development
Stress to the students that “all” global IT activities must be adjusted to take into account the cultural, political, and geoeconomic challenges that exist in the international business community. Developing appropriate business and IT strategies for the global marketplace should be the first step in global IT management. Once that is done, end user and IS managers can move on to
Developing the portfolio of applications needed to support business/IT strategies;
The hardware, software, and telecommunications technology platforms to support those applications
The systems development projects that will produce the global information systems required.
13-11 Cultural, Political, and Geoeconomic Challenges: Global IT management does not exist in a vacuum. Global IT management must focus on developing global business IT strategies and managing global application portfolios, technologies, platforms, databases, and systems development projects. Managers must also take into account the cultural, political, and geographic differences that exist when doing business internationally.
Political Challenge: - Political challenges facing global business and IT managers include:
1. Many countries have rules regulating or prohibiting transfer of data across their national boundaries (transborder data flows), especially information such as personnel records.
2. Restrict, tax, or prohibit imports of hardware and software.
3. Local content laws that specify the portion of the value of a product that must be added in that country if it is to be sold there.
4. Reciprocal trade agreements that require a business to spend part of the revenue they earn in the country in that nation=s economy.
Geoeconomic Challenges:Geoeconomic challenges in global business and IT refer to the effects of geography on the economic realities of international business activities. These challenges include:
1. Physical distances involved are still a major problem
2. Worlds’ 24 time zones contribute to communications problems
3. Lack of telecommunication capabilities in some countries
4. Lack of specialized job skills in some countries, or enticing specialists from other countries to live and work there
5. Cost of living and labour costs in various countries.
Cultural Challenges: - Cultural challenges facing global business and IT managers include:
1. Differences in languages, cultural interests, religions, customs, social attitudes, and political philosophies.
2. Differences in work styles and business relationships.
13-12 The Global Company: A global company is one which balances its strategies and activities to ensure that it is serving customers in each locality with sensitivity and excellence, while still implementing a whole-world strategy that serves its global customers with excellence.
13-13 Global Business and IT Strategies: Many firms are moving toward transnational strategies in which they integrate their global business activities through close cooperation and interdependence between their international subsidiaries and their corporate headquarters.
Businesses are moving away from:
1. Multinational strategies where foreign subsidiaries operate autonomously
2. International strategies in which foreign subsidiaries are autonomous but are dependent on headquarters for new processes, products, and ideas.
3. Global strategies, where a company’s worldwide operations are closely managed by corporate headquarters.
In a transnational approach, a business depends heavily on its information systems and appropriate information technologies to help it integrate its global business activities. A transnational business tries to develop an integrated and cooperative worldwide hardware, software, and telecommunications architecture for its IT platform.
13-14 Global Business and IT Applications [Figure 13.26] The applications of information technology developed by global companies depend on their business and IT strategies and their expertise and experience in IT. However, their IT applications also depend on a variety of global business drivers, that is, business requirements (business drivers) caused by the nature of the industry and its competitive or environmental forces. Examples include airlines and hotel chains with global customers, that is, customers who travel widely or have global operations. Such companies well need global IT capabilities for online transaction processing so they can provide fast, convenient customer service to their customers or face losing them to their competitors. The economies of scale provided by global business operations are another business driver that requires the support of global IT applications.
Business drivers for global IT applications include:
1. Global Customers
2. Global Products
3. Global Operations
4. Global Resources
5. Global Collaboration
13-15 Global IT Platforms: The choice of technology platforms (also called the technology infrastructure) is another major dimension of global IT management. Technology platforms required to support a global business operation must consider:
Hardware choices are difficult in some countries because of:
Establishing global computing facilities is a problem because:
1. Requirements to establish additional data centres in subsidiaries in other countries.
2. Data centres must meet local and regional computing needs
3. Global computing requires satellite links.
4. Support required from headquarters for hardware, software, maintenance, and security.
The Internet as a Global IT Platform: Decisions about telecommunications networks are vital to establishing a technology platform for any company and present major challenges in global IT management. Obviously, global networks like the Internet that cross many international boundaries can make such issues even more challenging and strategic.
The Internet and the World Wide Web have become vital components in international business and commerce. Within a few years, the Internet, with its interconnected networks of thousands of networks of computers and databases has established itself as a technology platform free of many traditional international boundaries and limits. By connecting their businesses to this online global infrastructure, companies can:
1. Expand their markets
2. Reduce communications and distribution costs
3. Improve their profit margins without massive cost outlays for new telecommunications facilities.
13-16 Global Data Issues: Global data issues have been a subject of political controversy and technology barriers in global business operations for many years. Important global data issues involve:
1. Transborder data flows (TDF), in which business data flows across international borders over the telecommunications networks of global information systems.
2. Many countries view transborder data flows as violating their national sovereignty because TDF avoids custom duties and regulations for the import and export of goods and services.
3. Other countries may view TDF as a violation of privacy legislation when data about individuals is moved out of a country without stringent privacy safeguards.
4. Others view TDF as violating local laws made to protect local IT industry from competition, or labour regulations for protecting local jobs.
5. Other important data issues are concerned with global data management and standardization of data. Common data definitions are necessary for sharing data among the parts of an international business. Differences in language, culture, and technology platforms can make global data standardization quite difficult.
13-17 Global Systems Development: Reaching agreement on systems requirements is always difficult, but becomes many times more difficult when the users and developers are in different countries. Some of these issues involve:
1. Conflicts over local versus global system requirements, and difficulties in agreeing on common features such as multilingual user interfaces and flexible design standards.
2. Agreements on global systems must take place in an environment that promotes involvement and “ownership” of a system by local end users.
3. Disturbances can arise from systems implementation and maintenance activities.
4. Trade-offs must be made between developing one system that can run on multiple computer and operating platforms, by letting each local site customize the software for its own platform.
Systems Development Strategies: Strategies to solve some of the problems of global systems development include:
1. Transforming an application used by the home office into a global application.
2. Setting up a multinational development team with key people from several subsidiaries to ensure that the system design meets the needs of the local sites as well as corporate headquarters.
3. Parallel development. Parts of a system are assigned to different subsidiaries and the home office to develop at the same time, based n the expertise and experiences at each site.
4. Centres of excellence. An entire system may be assigned for development to a particular subsidiary based on their expertise in the business or technical dimensions needed for successful development.
13-18 You and Global IT Management: As a managerial end user you may be required to assist in implementing a global IT strategy. Some of the steps you might consider:
1. Discover if your company has a global business strategy and a strategy for how IT can support global business operations.
2. Assist in developing IT applications to support your global business activities.
3. Be sensitive to global cultural, political, and geoeconomic realities.
VI. KEY TERMS AND CONCEPTS - DEFINED
Centralization or Modern computer-based information systems can support
Decentralization: either the centralization or decentralization of information systems operations and decision-making within computer-using organizations.
Centralization or IS resources can be distributed throughout an
Decentralization: IS organization or consolidated in corporate data centres.
Centralization or Information systems can help management centralize
Decentralization: operations or IS can help in decentralizing operations.
Operations & Management Chargeback Systems Methods of allocating costs to end user departments based on the information services rendered and information system resources utilized.
Chief Information Officer A senior management position that oversees all information technology for a firm, concentrating on long-range information system planning and strategy.
Cultural, Political, and Differences in customs, governmental, regulations,
Geoeconomic Challenges and the cost of living in different countries.
Data Centre An organizational unit which uses centralized computing resources to perform information processing activities for an organization. Also known as a computer centre.
Development Centre Systems development consultant groups formed to serve as consultants to the professional programmers and systems analysts of an organization to improve their application development efforts.
Downsizing Many organizations are downsizing from the use of large computer systems to networks of small computers.
End User Services Consulting and training services provided to end users in an organization.
Global Business Drivers These include global customers, products, operations, resources, and collaboration.
Global Company A global company is one which balances its strategies and activities to ensure that it is serving customers in each locality with sensitivity and excellence, while still implementing a whole-world strategy that serves its global customers with excellence.
Global Information Technology The use of computer-based information systems and telecommunications networks using a variety of information technologies to support global business operations and management.
Global IT Management Dimensions of global IT management include:
1) Business IT Strategies, 2) Application Portfolios, 3) Technology Platforms, 4) Data Management, and
5) Systems Development
Global IT Management: IT applications may depend on business
Applications requirements (business drivers) caused by the nature of the industry and its competitive environmental forces. Business drivers for global IT applications include: 1) Global Customers, 2) Global Products, 3) Global Operations, 4) Global Resources, and 5) Global Collaboration.
Global IT Management: Many firms are moving toward transnational
Business/IT Strategies business strategies in which they integrate their global business activities through close cooperation and interdependence between their international subsidiaries and their corporate headquarters.
Global IT Management: Global IT and end user managers must deal with
Data Issues restrictions on the availability of hardware and software, restrictions on transborder data flows (TDF) and movement of personal data and difficulties with developing common data definitions and system requirements.
Global IT Management: The choice of technology platforms (also called the
IT Platforms technology infrastructure) is a major dimension of global IT management. Technology platforms required to support a global business operation must consider include: 1) Hardware choices, 2) Software choices,
3) Telecommunications networks, and 4) Computing facilities
Global IT Management: Database management methods have to be developed and
Systems Development systems development projects have to be managed in order to produce the global information systems that are required to compete successfully in the global marketplace.
Human Resource Management Reaching agreement on systems requirements is always
of Information Technology difficult, but becomes many times more difficult when the users and developers are in different countries. Strategies must be developed in order to solve some of the problems of global systems development.
Impact of IT Managers now have a lot of information, information processing power, and responsibility for information systems.
Impact of IT: Managers now have a lot of information,
On Management information processing power, and responsibility for information systems.
Impact of IT: Information technology affects the people, tasks,
On Organizations technology, culture, and structure of organizations which affects how it will organize and use information technology.
Information Centre A support facility for the end users of an organization. It allows users to learn to develop their own application programs and to accomplish their own information processing tasks. End users are provided with hardware support, software support, and people support (trained as consultants).
IRM A management concept that views data, information, and computer resources (computer hardware, software, and personnel) as valuable organizational resources that should be efficiently, economically, and effectively managed for the benefit of the entire organization.
Five Dimensions of IRM The five dimensions of IRM include: 1) Strategic management, 2) Resource management, 3) Functional management, 4) Technology management, 5) Distributed management.
Information Services Functions Includes systems development, operations, and technical services.
Information Systems Performance Managers must ensure that IT is being effectively, efficiently, and economically in their organizations
Management Involvement The experiences of successful organizations reveal that the basic ingredient of high quality information systems performance is extensive and meaningful management involvement.
Operations Management Includes the management of activities such as data entry, equipment operations, production control, and production support.
Organizations as To better understand the organizational impact of
Sociotechnical Systems information technology, it is useful to view an organization as a sociotechnical system in which people, tasks, technology, culture, and structure are the basic components. To improve an organization’s performance, managers must (1) change one or more of these components and (2) take into account the relationships among these interdependent components.
Outsourcing IS Operations Turning over all or part of an organization’s information systems operation to outside contractors, known as systems integrators or facilities management companies.
Systems Performance Monitor A software package that automates many of the operations management activities.
Systems Development Managing systems development requires the planning,
Management organizing, and controlling of systems analysis, programming, and end user activities related to various IS development projects, and thus requires a project management effort.
Technology Management The establishment of organizational groups to identify, introduce, and monitor the assimilation of new information system technologies into organizations.
Telecommunications Network The management of development, administration, and
Management maintenance of telecommunications networks and their hardware and software.
Transborder Data Flows The flow of business data over telecommunications networks across international borders.
Transnational Strategy A management approach in which an organization integrates its global business activities through close cooperation and interdependence among its headquarters operations and international subsidiaries, and its use of appropriate global information technologies.
VII. REVIEW QUIZ - Match one of the key terms and concepts
1. [14a] Impact of IT on Management 18. [22 ] Outsourcing IS Operations
2. [14b] Impact of IT on Organizations 19. [26 ] Telecom. Network Management
3. [ 1a ] Centralization/Decentralization IS 20. [23 ] System Performance Monitor
4. [ 1b ] Operations and Management 21. [ 2 ] Chargeback Systems
5. [ 16 ] IRM 22. [13 ] HRM of IT
6. [16a] Five Dimensions of IRM 23. [ 7 ] Downsizing
1. What has been the impact of information technology on the work relationships, activities, and resources of managers?
Information technology is a major force for organizational and managerial change. Due to telecommunications networks and personal computers, computing power and information resources are now more readily available to more managers than ever before. Managing the information systems resources of a business is no longer the sole province of information systems specialists. Instead, information resource management has become a major responsibility of managers.
2. What can end user managers do about performance problems in the use of information technology and the development and operation of information systems in a business?
Extensive and meaningful management involvement in information systems is important. Management can get involved through executive information services committees, management steering committees, and through end user management of IT.
3. Refer to the Real World Case on The Home Depot in the chapter. Why has the hybrid centralized/decentralized IS management model become “the emerging best practices model for international companies with distributed units”?
The hybrid centralized/decentralized IS management model has become Athe emerging best practices model for international companies with distributed units, as it combines aspects and benefits of both centralized and decentralized systems. Centralized in that there is corporate control over the systems, and decentralized in that it still allows for managers to exercise some flexibility in their own business units.
4. How is information technology affecting the structure and work roles of modern organization? For example, will middle management wither away? Will companies consist primarily of self-directed project teams of knowledge workers? Explain your answer.
Computer-based information systems can encourage either centralization or decentralization. The philosophy of top management, the culture of the organization, the need to reengineer its operations, and its use of aggressive or conservative competitive strategies all play major roles with IT in shaping the firm’s organizational structure.
5. Should the IS function in a business be centralized or decentralized? What recent developments support your answer?
The development of minicomputers and microcomputers accelerated a trend back toward decentralization. Distributed processing networks and the creation of information centres to support end user computing came about. Lately, the trend has been to establish tighter control over the information resources of an organization, which has resulted in a re-centralizing trend at some organizations, and the development of hybrid structures at others. Some organizations have spun off there is functions into IS subsidiaries, and some organizations have resorted to outsourcing, i.e. have turned over there is operations to outside system integrators.
6. Refer to the Real World Case on 3M, Whirlpool, and Groupe Schneider in the chapter. Why has Steve Little found that “the biggest issues are cultural and political barriers” in global IT management? What can be done to settle such issues?
Steve Little is part of a global company. Certainly issues like cultural and political barriers are some of the biggest barriers to overcome. To settle such issues, consideration must be made to allow each unit to work as autonomous units, while at the same time ensuring that they adhering to established global standards.
7. How will the Internet, intranets, and extranets change how companies do global IT management, as illustrated in Figure 13.21? Give several examples.
Students’ answers will vary.
8. How might cultural, political, or geoeconomic challenges affect a global company’s use of the Internet? Give several examples.
Students’ answers will vary.
9. Will the increasing use of the Internet by firms with global business operations change their move toward a transnational business strategy? Explain.
There appears to be no doubt that the increasing use of the Internet by firms with global operations will result in changing their move toward a transnational business strategy. As firms increasingly extend their product offerings into the global marketplace in order to compete, they will have little choice but to develop a transnational business strategy in order to survive.
10. How might the Internet, intranets, and extranets affect the business drivers or requirements responsible for a company’s use of global IT, as shown in Figure 13.26? Give several examples to illustrate your answer.
Business drivers include global customers, products, operations, resources, and collaboration. IT applications may depend on such drivers. For example, airlines and hotel chains with global customers need global IT capabilities for online transaction processing. Other examples include companies who have products that are available worldwide, and that requires telecommunication capabilities to coordinate global marketing campaigns.