Chapter 12 Enterprise and Global Management of Information
Chapter 12 Enterprise and Global Management of Information Technology Mc. Graw-Hill/Irwin Copyright © 2004, The Mc. Graw-Hill Companies, Inc. All rights reserved.
2 Learning Objectives ¦Identify ways that information technology has affected the job of managers. ¦Identify the seven major dimensions of a networked organization and explain how they can affect the success of a business. Mc. Graw-Hill/Irwin Copyright © 2004, The Mc. Graw-Hill Companies, Inc. All rights reserved.
3 Learning Objectives (continued) ¦Identify each of the three components of information technology management and use examples to show they might be implemented in a business. ¦Explain how failures in IT management can be reduced by the involvement of business managers in IS planning and management. Mc. Graw-Hill/Irwin Copyright © 2004, The Mc. Graw-Hill Companies, Inc. All rights reserved.
4 Learning Objectives (continued) ¦Identify cultural, political, and geoeconomic challenges that confront managers in the management of global information technologies. ¦Explain the effect on global e-business strategy of the trend toward a transnational business strategy by international business organizations. Mc. Graw-Hill/Irwin Copyright © 2004, The Mc. Graw-Hill Companies, Inc. All rights reserved.
5 Learning Objectives (continued) ¦Identify considerations that affect the choice of IT applications, IT platforms, data access policies, and systems development methods by a global business enterprise. Mc. Graw-Hill/Irwin Copyright © 2004, The Mc. Graw-Hill Companies, Inc. All rights reserved.
6 Section I Managing Information Technology Mc. Graw-Hill/Irwin Copyright © 2004, The Mc. Graw-Hill Companies, Inc. All rights reserved.
7 Business and IT ¦As companies are transformed into global ebusinesses and players in global e-commerce, it is vital for business managers and professionals to understand how to manage this vital function. Mc. Graw-Hill/Irwin Copyright © 2004, The Mc. Graw-Hill Companies, Inc. All rights reserved.
8 The Impact of IT on Managers ¦A major force for precipitating or enabling organizational and managerial change ¦Enables innovative changes in managerial decision making, organizational structures, and managerial work activities Mc. Graw-Hill/Irwin Copyright © 2004, The Mc. Graw-Hill Companies, Inc. All rights reserved.
9 The Impact of IT on Organizations ¦Key dimensions of the networked enterprise ¦Organizational structure ¦Leadership and governance ¦People and culture ¦Coherence ¦Knowledge ¦Alliances Mc. Graw-Hill/Irwin Copyright © 2004, The Mc. Graw-Hill Companies, Inc. All rights reserved.
10 Managing Information Technology ¦Three major components ¦Managing the joint development and implementation of e-business and IT strategies ¦Managing the development of e-business applications and the research & implementation of new IT Mc. Graw-Hill/Irwin Copyright © 2004, The Mc. Graw-Hill Companies, Inc. All rights reserved.
11 Managing Information Technology (continued) ¦Three major components (continued) ¦Managing the IT processes, professionals, & subunits with the IT organization & IS function Mc. Graw-Hill/Irwin Copyright © 2004, The Mc. Graw-Hill Companies, Inc. All rights reserved.
12 Managing the IS Function ¦Organizing IT ¦Centralization ¦Decentralization ¦Latest trend, hybrid Mc. Graw-Hill/Irwin Copyright © 2004, The Mc. Graw-Hill Companies, Inc. All rights reserved.
13 Managing the IS Function (continued) ¦Managing Application Development ¦Involves managing activities such as ¦systems analysis and design ¦prototyping ¦applications programming ¦project management ¦quality assurance ¦systems maintenance Mc. Graw-Hill/Irwin Copyright © 2004, The Mc. Graw-Hill Companies, Inc. All rights reserved.
14 Managing the IS Function (continued) ¦Managing IS Operations ¦Managing the use of hardware, software, network, and personnel resources in data centers/computer centers within an organization Mc. Graw-Hill/Irwin Copyright © 2004, The Mc. Graw-Hill Companies, Inc. All rights reserved.
15 Managing the IS Function (continued) ¦Managing IS operations (continued) ¦Operational activities requiring management ¦Computer systems operations ¦Network management ¦Production control ¦Production support Mc. Graw-Hill/Irwin Copyright © 2004, The Mc. Graw-Hill Companies, Inc. All rights reserved.
16 Managing the IS Function (continued) ¦Managing IS Operations (continued) ¦System Performance Monitors ¦Monitor processing of computer jobs ¦Helps develop a planned schedule ¦Produce detailed stats for planning and control of computing capacity ¦Chargeback systems ¦Process control Mc. Graw-Hill/Irwin Copyright © 2004, The Mc. Graw-Hill Companies, Inc. All rights reserved.
17 Managing the IS Function (continued) ¦Human Resource Management of IT ¦Recruit qualified personnel ¦Develop, organize, and direct the capabilities of existing personnel ¦Train employees ¦Design career paths and set salary and wage levels Mc. Graw-Hill/Irwin Copyright © 2004, The Mc. Graw-Hill Companies, Inc. All rights reserved.
18 Managing the IS Function (continued) ¦The CIO and Other IT Executives ¦Chief Information Officer (CIO) ¦Oversees all use of IT in many companies. ¦Brings the IT function into alignment with strategic business goals ¦Concentrates on business/IT planning and strategy ¦Helps develop strategic uses of IT in ebusiness and e-commerce Mc. Graw-Hill/Irwin Copyright © 2004, The Mc. Graw-Hill Companies, Inc. All rights reserved.
19 Managing the IS Function (continued) ¦Technology Management ¦All IT must be managed as a technology platform for integrated e-business and ecommerce systems ¦May assign a Chief Technology Officer (CTO) ¦In charge of all IT planning and deployment Mc. Graw-Hill/Irwin Copyright © 2004, The Mc. Graw-Hill Companies, Inc. All rights reserved.
20 Managing the IS Function (continued) ¦Managing User Services ¦Functions to support and manage end user and workgroup computing ¦Provides both opportunities and problems for business unit managers ¦Help desks ¦Establish and enforce policies Mc. Graw-Hill/Irwin Copyright © 2004, The Mc. Graw-Hill Companies, Inc. All rights reserved.
21 Failures in IT Management ¦IT is not being used effectively by companies that use IT primarily to computerize traditional business processes, instead of using it for innovative e-business processes ¦IT is not being used efficiently by IS that provide poor response times and frequent down times or when application development projects are not managed properly Mc. Graw-Hill/Irwin Copyright © 2004, The Mc. Graw-Hill Companies, Inc. All rights reserved.
22 Failures in IT Management (continued) ¦Management Involvement and Governance ¦Senior management needs to be involved in critical business/IT decisions to optimize the business value and performance of the IT function. ¦Requires development of governance structures that encourage active participation in planning and controlling the business uses of IT. Mc. Graw-Hill/Irwin Copyright © 2004, The Mc. Graw-Hill Companies, Inc. All rights reserved.
23 Failures in IT Management (continued) ¦Helps avoid IS performance problems ¦Helps improve the strategic business value of IT Mc. Graw-Hill/Irwin Copyright © 2004, The Mc. Graw-Hill Companies, Inc. All rights reserved.
24 Section II Managing Global IT Mc. Graw-Hill/Irwin Copyright © 2004, The Mc. Graw-Hill Companies, Inc. All rights reserved.
25 The International Dimension ¦A vital part of managing an e-business enterprise in the internetworked global economies and markets of today. Mc. Graw-Hill/Irwin Copyright © 2004, The Mc. Graw-Hill Companies, Inc. All rights reserved.
26 Global IT Management Mc. Graw-Hill/Irwin Copyright © 2004, The Mc. Graw-Hill Companies, Inc. All rights reserved.
27 Cultural, Political, and Geoeconomic Challenges ¦Cultural challenges ¦Differences in languages ¦Cultural interests ¦Religions ¦Customs ¦Social attitudes ¦Political philosophies Mc. Graw-Hill/Irwin Copyright © 2004, The Mc. Graw-Hill Companies, Inc. All rights reserved.
28 Cultural, Political, and Geoeconomic Challenges (continued) ¦Political challenges ¦Rules regulating or prohibiting transfer of data across their national boundaries ¦Severe restrictions, taxes, or prohibitions against imports of hardware and software ¦Local content laws ¦Reciprocal trade agreements Mc. Graw-Hill/Irwin Copyright © 2004, The Mc. Graw-Hill Companies, Inc. All rights reserved.
29 Cultural, Political, and Geoeconomic Challenges (continued) ¦Geoeconomic Challenges ¦The effects of geography on the economic realities of international business activities ¦Distance ¦Real-time communication ¦Lack of good-quality telephone and telecommunications service ¦Lack of job skills ¦Cost of living and labor costs Mc. Graw-Hill/Irwin Copyright © 2004, The Mc. Graw-Hill Companies, Inc. All rights reserved.
30 Global e-Business Strategies ¦Moving away from ¦Autonomous foreign subsidiaries, dependent on headquarters for new processes, products, and ideas ¦Close management of worldwide operations by headquarters Mc. Graw-Hill/Irwin Copyright © 2004, The Mc. Graw-Hill Companies, Inc. All rights reserved.
31 Global e-Business Strategies (continued) ¦Moving toward ¦Reliance on information systems and Internet technologies to help integrate global business activities ¦An integrated, cooperative worldwide hardware, software, and Internet-based architecture for IT platforms Mc. Graw-Hill/Irwin Copyright © 2004, The Mc. Graw-Hill Companies, Inc. All rights reserved.
32 Global e-Business Applications ¦IT applications depend on a variety of global business drivers, caused by the nature of the industry and its competitive or environmental forces ¦Global customers ¦Global products ¦Global operations ¦Global resources ¦Global collaboration Mc. Graw-Hill/Irwin Copyright © 2004, The Mc. Graw-Hill Companies, Inc. All rights reserved.
33 Global IT Platforms ¦The technology infrastructure ¦Technically complex ¦Major political and cultural implications ¦Challenges ¦Managing international data communications networks ¦Network management issues ¦Regulatory issues ¦Technology issues ¦Country-oriented issues Mc. Graw-Hill/Irwin Copyright © 2004, The Mc. Graw-Hill Companies, Inc. All rights reserved.
34 Global IT Platforms (continued) ¦The Internet as a Global IT Platform ¦Companies can ¦Expand markets ¦Reduce communications and distribution costs ¦Improve their profit margins ¦Low cost interactive channel for communications and data exchange Mc. Graw-Hill/Irwin Copyright © 2004, The Mc. Graw-Hill Companies, Inc. All rights reserved.
35 Global Data Access Issues ¦Transborder data flows (TDF) ¦Data flow across international borders over telecommunications networks of global information systems Mc. Graw-Hill/Irwin Copyright © 2004, The Mc. Graw-Hill Companies, Inc. All rights reserved.
36 Global Data Access Issues (continued) ¦Many countries view TDF as violating their national sovereignty ¦Others, as violating their laws to protect the local IT industry or to protect local jobs ¦May view TDF as a violation of their privacy legislation Mc. Graw-Hill/Irwin Copyright © 2004, The Mc. Graw-Hill Companies, Inc. All rights reserved.
37 Global Data Access Issues (continued) ¦Internet Access Issues ¦High government access fees ¦Government monitored access ¦Government filtered access ¦No public access allowed Mc. Graw-Hill/Irwin Copyright © 2004, The Mc. Graw-Hill Companies, Inc. All rights reserved.
38 Global Systems Development ¦Challenges ¦Conflicts over local versus global system requirements ¦Difficulties agreeing on common system features ¦Disturbances caused by systems implementation and maintenance activities Mc. Graw-Hill/Irwin Copyright © 2004, The Mc. Graw-Hill Companies, Inc. All rights reserved.
39 Global Systems Development (continued) ¦Challenges (continued) ¦Trade-offs between developing one system that can run on multiple computer and operating system platforms, or letting each local site customize the software for its own platform ¦Global standardization of data definitions Mc. Graw-Hill/Irwin Copyright © 2004, The Mc. Graw-Hill Companies, Inc. All rights reserved.
40 Global Systems Development (continued) ¦Systems Development Strategies ¦Transforming an application used by the home office into a global application ¦Setting up a multinational development team to ensure the system design meets the needs of local sites as well as headquarters ¦Parallel development ¦Centers of excellence Mc. Graw-Hill/Irwin Copyright © 2004, The Mc. Graw-Hill Companies, Inc. All rights reserved.
41 Discussion Questions ¦What has been the impact of e-business technologies on the work relationships, activities, and resources of managers? ¦What can business unit managers do about performance problems in the use of information technology and the development and operation of information systems in their business units? Mc. Graw-Hill/Irwin Copyright © 2004, The Mc. Graw-Hill Companies, Inc. All rights reserved.
42 Discussion Questions (continued) ¦How are Internet technologies affecting the structure and work roles of modern organizations? ¦Will middle management wither away? ¦ Will companies consist primarily of selfdirected project teams of knowledge workers? Mc. Graw-Hill/Irwin Copyright © 2004, The Mc. Graw-Hill Companies, Inc. All rights reserved.
43 Discussion Questions (continued) ¦Should the IS function in a business be centralized or decentralized? What recent developments support your answer? ¦How will the Internet, intranets, and extranets affect each of the components of global information technology management? Mc. Graw-Hill/Irwin Copyright © 2004, The Mc. Graw-Hill Companies, Inc. All rights reserved.
44 Discussion Questions (continued) ¦How might cultural, political, or geoeconomic challenges affect a global company’s use of the Internet? ¦Will the increasing use of the Internet by firms with global e-business operations change their move toward a transnational business strategy? Mc. Graw-Hill/Irwin Copyright © 2004, The Mc. Graw-Hill Companies, Inc. All rights reserved.
45 Discussion Questions (continued) ¦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 the chapter? Mc. Graw-Hill/Irwin Copyright © 2004, The Mc. Graw-Hill Companies, Inc. All rights reserved.
46 Real World Case 1 – USG Corp. ¦Evaluating the ROI of IT Investments ¦Why do many companies fail to evaluate the return on investment of their IT projects? ¦Is this good business practice? Mc. Graw-Hill/Irwin Copyright © 2004, The Mc. Graw-Hill Companies, Inc. All rights reserved.
47 Real World Case 1 (continued) ¦What are some of the ROI measurement and incentive practices of the companies in this case that might help other companies evaluate the ROI of their IT investments? Mc. Graw-Hill/Irwin Copyright © 2004, The Mc. Graw-Hill Companies, Inc. All rights reserved.
48 Real World Case 1 (continued) ¦Should business managers be responsible for justifying the ROI of IT investments that will benefit their business units? Mc. Graw-Hill/Irwin Copyright © 2004, The Mc. Graw-Hill Companies, Inc. All rights reserved.
49 Real World Case 1 (continued) ¦Who should be involved in evaluating the ROI of the IT investment proposals of a company’s business units? ¦Why? Mc. Graw-Hill/Irwin Copyright © 2004, The Mc. Graw-Hill Companies, Inc. All rights reserved.
50 Real World Case 2 – Agilent Technologies & Citibank ¦The Challenges of Consolidating Global IT ¦Do you agree with Agilent’s global IT consolidation goals and process? Mc. Graw-Hill/Irwin Copyright © 2004, The Mc. Graw-Hill Companies, Inc. All rights reserved.
51 Real World Case 2 (continued) ¦Why did Agilent’s global IT consolidation get such a strong negative response from many business and IT stakeholders? ¦Could this reaction have been avoided? Mc. Graw-Hill/Irwin Copyright © 2004, The Mc. Graw-Hill Companies, Inc. All rights reserved.
52 Real World Case 2 (continued) ¦What are the business benefits of Citibank’s global IT consolidation project? ¦How can a single global system still be customized for each country? Mc. Graw-Hill/Irwin Copyright © 2004, The Mc. Graw-Hill Companies, Inc. All rights reserved.
53 Real World Case 2 (continued) ¦What challenges might arise in managing the global IT function at Agilent Technologies from this point on? ¦How would you meet such challenges? Mc. Graw-Hill/Irwin Copyright © 2004, The Mc. Graw-Hill Companies, Inc. All rights reserved.
54 Real World Case 3 – Cisco Systems ¦Failure in Supply Chain Management ¦What caused Cisco’s $2. 2 billion loss in unneeded inventory? ¦Could this situation have been avoided? Mc. Graw-Hill/Irwin Copyright © 2004, The Mc. Graw-Hill Companies, Inc. All rights reserved.
55 Real World Case 3 (continued) ¦How is e. Hub supposed to avoid such losses in the future? ¦What problems might arise with this new system? Mc. Graw-Hill/Irwin Copyright © 2004, The Mc. Graw-Hill Companies, Inc. All rights reserved.
56 Real World Case 3 (continued) ¦What can be done in the supply chain management process of any company to avoid situations like Cisco’s? Mc. Graw-Hill/Irwin Copyright © 2004, The Mc. Graw-Hill Companies, Inc. All rights reserved.
57 Real World Case 4 – Merrill Lynch & Co. ¦The Business Case for Global IT Consolidation ¦Why has there been a trend toward centralizing systems among financial services firms? ¦What are the potential benefits and limitations of this trend? Mc. Graw-Hill/Irwin Copyright © 2004, The Mc. Graw-Hill Companies, Inc. All rights reserved.
58 Real World Case 4 (continued) ¦What are the business benefits of Merrill Lynch’s new global order processing system? ¦What implementation challenges are involved? Mc. Graw-Hill/Irwin Copyright © 2004, The Mc. Graw-Hill Companies, Inc. All rights reserved.
59 Real World Case 4 (continued) ¦Does the merger of Merrill’s global services division and its IT division make good business sense? Mc. Graw-Hill/Irwin Copyright © 2004, The Mc. Graw-Hill Companies, Inc. All rights reserved.
60 Real World Case 5 – Fireman’s Fund, Allmerica Financial, & FMC ¦The Business Case for IT Outsourcing ¦What is the business value to Fireman’s Fund and Allmerica of outsourcing their computer operations? ¦What are some potential limitations of such outsourcing arrangements? Mc. Graw-Hill/Irwin Copyright © 2004, The Mc. Graw-Hill Companies, Inc. All rights reserved.
61 Real World Case 5 (continued) ¦What is FMC’s motivation for its IT outsourcing? ¦What is the role of an IT organization at companies like those in this case, if much of their IT operations are outsourced? Mc. Graw-Hill/Irwin Copyright © 2004, The Mc. Graw-Hill Companies, Inc. All rights reserved.
62 Real World Case 5 (continued) ¦What are the benefits and potential limitations of offshore and near-shore IT outsourcing arrangements? Mc. Graw-Hill/Irwin Copyright © 2004, The Mc. Graw-Hill Companies, Inc. All rights reserved.
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