TECHNOLOGY RISK TECHNOLOGY Definition it is a component

TECHNOLOGY RISK.

TECHNOLOGY Definition it is a component of capital goods (one of the factors of production) used by businesses to produce commodities consumed by society.

TECHNOLOGY RISK Definition defined as events that would lead to insufficient, inappropriate or mismanagement of investment in technology, in terms of manufacturing processes, product design and/or information management.

SCOPE OF TECHNOLOGY RISK Lack of investment in technology and the resultant erosion of ability to compete. Inadequate technology governance and in particular IT governance. Inadequate management of outsourcing. 01 04 02 05 03 06 Lack of alignment of IT to the business objectives. Inadequate protection against viruses, hacking and loss of confidentiality of information. Inadequate flexibility of production to be able to economically produce small production runs.

BENEFITS OF TECHNOLOGY RISK MANAGEMENT Improves the quality of information for decision making. Sets out the risks to investment in technology and promotes a proactive approach to managing technology projects. Maps the threats to existing business practices from emerging business-tocustomer relationships.

BENEFITS OF TECHNOLOGY RISK MANAGEMENT Draws attention to exposure to the loss of market share arising from a competitor’s improvement in product design. Forces a continuous review of developments in technology within manufacturing processes (technology advances can improve productivity). Provides insights into the disbenefits of not aligning technology to strategy and business operations.

IMPLEMENTATION OF TECHNOLOGY RISK MANAGEMENT STEP 3 STEP 1 Managing investment in technology to secure the business objectives and optimise investment benefits. Understanding the risks of outsourcing and to manage them. STEP 4 Monitoring competitors to avoid being “outmaneuvered” by the introduction of new technologies that shift industrial boundaries. STEP 2 Ensuring the right information reaches the right people at the right time through a combination of management information systems, intranets and email. STEP 5 Embracing new developments in e-commerce. Implementing information security.

PRIMARY TECHNOLOGY TYPES.

INFORMATION TECHNOLOGY SOFTWARE APPLICATIONS MANAGEMENT INFORMATION SYSTEMS INTRANETS TELEMATICS INFORMATION ASSETS

COMMUNICATION TECHNOLOGY BROADBAND VIDEO CONFERENCING E-COMMERCE E-MAIL

COMMUNICATION TECHNOLOGY COMPUTER AIDED DESIGN (CAD) COMPUTER INTEGRATED MANUFACTURE (CIM) COMPUTER AIDED MANUFACTURE (CAM) MANUFACTURING RESOURCE PLANNING (MRP) OPERATIONS RESEARCH (“OR”) FLEXIBLE MANUFACTURING SYSTEMS (FMS) MECHATRONICS

RESPONDING TO TECHNOLOGY RISK IT Governance Ø According to Thomas (2005) the idea of IT governance has come about as a way of imposing order on chaos. Ø “structure of relationships and processes to direct and control the enterprise in order to achieve the enterprise’s goals by adding value while balancing risk versus return over IT and its processes” Investment Ø The investment process decision-making

3. Defining and classifying proposed project(s) 1. Determine the investment funds available 2. Identify profitable project opportunities 4. Evaluate proposed project(s)

A key evaluation method is return on investment (ROI). An ROI calculation in an IT context provides a business with an estimate of the percentage return that it will make over a specified period, as the result of investing in a new computer system. The ROI is typically calculated as: % ROI = benefits/costs × 100 To be meaningful the return must be stated as occurring within a particular timeframe/payback period. The opportunity cost must also be considered. This is the financial gain that would have been made if the sum of money assigned to the IT project were invested elsewhere, such as in a bank. For reliance to be placed on the ROI calculation the two key components, current costs and anticipated cost, must be fully calculated, capturing all of the contributory costs.

An example of an ROI estimate for a replacement system, looking at a three-year period, is as follows: % ROI = benefits/costs × 100 % ROI = (current annual costs)∗ 3 − ((new estimated annual costs∗ 3 + risk) + (implementation costs + risk)) (current annual cost)∗ 3 × 100

5. Approve project(s) 6. Monitor and control project(s)

PROJECTS “There is abundant evidence that IT projects have a poor track record in delivery against their objectives. The delivery objectives, as with projects across other industries, are typically time, cost and quality (including functionality) (Jordan and Silcock 2005). ”

END!!! GWENDOLYN CHAN VINCENT CAMPOS KATE DURANO KRISHA JUSTALERO DENISE DALE LAZARTE ROVI RAY PATINO ALYSSA TORRALBA

QUIZ TIME!!! (Reward: 10 pesos load each question )

_______ defined as events that would lead to insufficient, inappropriate or mismanagement of investment in technology, in terms of manufacturing processes, product design and/or information management.

___ is an uncertain event that may have a positive or negative impact on the business/project/undertaking

Explain at least 2 scopes of Technology Risk

Give 1 benefit of Technology Risk Management and explain

How to calculate ROI?

Give at least 3 primary Technology Types.