213

11 Information Management *
Information, information systems and information and commu-
nication systems (ICT or IT) of an enterprise must be designed
and developed in a professional way due to their increased eco-
nomic and social relevance for companies. In this context, in-
formation technology can be viewed as a neutral factor that will
only become an asset and increase the effectiveness and efficien-
cy of an enterprise if it is implemented successfully based on a
suitable management and information management strategy.
The following section will introduce information management,
its tasks and its objectives. First of all, we will give examples for
factors that influence information management.
 »Introduction to Information Management«, S. 213
This will be followed by a short analysis of its relevance and a
definition of its terminology.
 »Relevance and Key Terminology«, S. 215
Information management can be implemented in different ways
in a company.
 »Different Types of Information Management Structures«,
S. 221
The CIO, i.e. the chief information officer can have different pro-
files:
 »The CIO as Innovation Leader«, S. 224
The following section describes tasks and objectives of informa-
tion management.
 »Tasks and Objectives of Information Management«, S. 226
One currently relevant topic is outsourcing in its different varia-
tions.
 »Outsourcing«, S. 232

11.1 Introduction to Information

Management *
A number of important developments such as globalizati-
on, changes in buyer market structures and shorter pro-
duct life cycles have increased the relevance of proactive
information management for companies.

Information management has undergone a number of important Developments

development phases that are partially connected to the following in Information
Management
factors that also tend to cross-influence each other (see GaBe03;
PRW03).
214 11 Information Management *

Globalization Trends
Global trading has increased continuously and continues to
grow. Decreasing transport and communication costs give ac-
cess to markets that were previously inaccessible or expensive
to reach. This means that new buyer and new supply markets are
available to companies, which offers new options for specializa-
tion and redistribution of work across different manufacturing
plants. Globalization also means new competitors are entering
the market, which increases competition, in particular the com-
petition in ICT based business models. IT infrastructure is invol-
ved in this development in two ways. First, IT support itself can
be provided externally and can be run globally, and second, IT
must provide the platform and infrastructure for an internatio-
nally active organization, i.e., by providing integrated informati-
on exchange and communication systems, which must conform
to the highest standards of data protection and data security.

Example One example for the globalization trend is software develop-

ment in countries with highly qualified employees and low to-
tal production costs. India in particular has acquired a leading
position in this sector and is one of the popular outsourcing
options for companies. This increases the competition for Ger-
man or European software development companies, but also
offers the clients of software development companies the op-
portunity to have more efficient software solutions.

Shift from Seller to Buyer Markets

In the context of the growing relevance of the internet, mass
markets in particular experience a shift from seller to buyer mar-
kets. This has its origin in the increased power status of those
demanding a product or service in a market with multiple sup-
plier options. More and more suppliers of products and services
are accessible via the internet and the availability of product
and supplier information across different mobile devices chan-
ges the information asymmetry structure in favor of the poten-
tial buyers. One good example of this increased buyer power are
the barcode scanners, which are available on many mobile pho-
ne platforms and allow for an instant price comparison and show
alternative suppliers of the desired product or service. Such de-
velopments force providers to have a more customer-focused
strategy and to reassess their business targets in terms of cost,
quality, delivery time and flexibility. Companies will have to fo-
cus more on their electronic business strategy (or develop one,
if it does not exist).
Shortening of Product Life-Cycles and Product Develop-
ment Time
 11.2 Relevance and Key Terminology * 215
In a number of sectors, a reduction in product life-cycles and
in product development time (time is here seen as one of the
success factors) can be observed. This is particularly true in the
area of ICT, where developments tend to be extremely rapid. IT
has long since played a role in driving economic developments.
But the new direction that can be observed in the most recent
development is due to the fact that IT now no longer represents
a technological limitation of what a company or organization can
achieve. IT is now the driving force for further developments
and for changes in company goals and business models. This is
why the selection, implementation and coordination of new IT-
structures has become such a crucial and challenging task for
businesses.
Shift in Social Values
The shift in social values, characterized by more self-fulfillment
and more self-development of employees in their career must be
taken into consideration by HR departments. Young employees
who bring their own experience of web use to the company of-
fer great potential to businesses, and they tend to question old
structures and business processes in ICT. If companies prohibit
the use of employees’ regular communication channels, such as
instant messaging systems, and deny them their own informati-
on management strategy, this will lead to frustration and burn-
out, and reduce their performance potential.
Against this background, the IT support for business activities Dynamics of
has its own dynamics, full of potential business revenue, ma- Change
nagement efficiency savings, and great challenges. Engaging in
an information management strategy is a proactive attitude to-
wards these challenges and this is why information management
will continue to increase in relevance.

11.2 Relevance and Key Terminology *

Information management includes all management tasks
of an organization that are based on computer-supported
ICT systems. The term was coined in the 1970s in the con-
text of the Paperwork Reduction Act. The term can be fur-
ther defined by looking at its two components information
and management.

The term information management was coined in the 1970s by Development

the US federal administration and later used by US businesses. of the
Terminology
One of the important factors for the creation of this term was
the work by the Commission on Federal Paperwork, to improve
the processing of data and written information. This led to the
passing of the Paperwork Reduction Act in 1980, which was the
216 11 Information Management *

first instance of an information resource management initiative.

The activities of the Commission on Federal Paperwork indicated
that leadership and a management strategy towards the valuable
resource information were needed.
Information In addition to a model that focuses on resources, which is also
Management called Information Resource Management (IRM) and which analy-
Models
zes the collection, processing and usage of information, there is
an employee-focused model and a management-focused model.
The personnel focused model (PIM) looks at the support of em-
ployees with regard to usage, storage and presentation of infor-
mation. As both these models are logical, but do not include all
relevant factors and are not flexible enough overall, the follo-
wing section concentrates on a management focused model as
used by (Heinrich, 2014), which focuses on the management of
ICT systems.

Definition Information management refers to [...] all management tasks

of an organization or business unit that are connected to their
computer-supported ICT. The computer-supported ICT is as-
sessed with regard to the possible technological support it
can provide to management and to employees charged with
management tasks and then shaped in such a way to optimal-
ly facilitate its use (see GaBe03, p. 27).

A key aspect of the term information management is the fact

 that it refers to the computer-supported ICT of an enterprise,
 that it only looks at management tasks related to ICT use.
Information In contrast to information management, information business al-
Management as so looks at non-computer-supported ICT systems of a company.
part of the
From a functional point of view, information management there-
Information
Business Field fore is a subset of information business, as shown in the Abb.
11.2-1.
Question Discuss the current business situation and explain why informa-
tion management is particularly relevant today.
Answer Global trading has increased continuously and continues to
grow. Decreasing transport and communication costs give ac-
cess to markets that were previously inaccessible or expensive
to reach. This means that new buyer and new supply markets are
available to companies, which offer new options for specializa-
tion and redistribution of work across different manufacturing
plants.
In the context of the growing relevance of the internet, mass
markets in particular experience a shift from seller to buyer mar-
kets. This has its origin in the increased power status of those
demanding a product or service in a market with multiple sup-
 11.2 Relevance and Key Terminology * 217

Abb. 11.2-1: Information Management as a Subfield of Information Business.

plier options.
More and more suppliers of products and services are accessi-
ble via the internet and the availability of product and supplier
information across different mobile devices changes the infor-
mation asymmetry structure in favor of the potential buyers.
In a number of sectors, a reduction in product life-cycles and
in product development time (time is here seen as one of the
success factors) can be observed. This is particularly true in the
area of ICT where developments tend to be extremely rapid. IT
has long since played a role in driving economic developments.
But the new direction that can be observed in the most recent
development is due to the fact that IT now no longer represents
a technological limitation of what a company or organization can
achieve. IT is now the driving force for further developments and
changes in company goals and business models. This is why the
selection, implementation and coordination of new IT-structures
has become such a crucial and challenging task for businesses.
The shift in social values, characterized by more self-fulfillment
and more self-development of employees in their career must be
taken into consideration by HR departments. Young employees,
who bring their own experience of web use to the company, offer
great potential value to businesses, and they tend to question
old structures and business processes in ICT.
Information management includes all management tasks of an
organization that are based on computer-supported ICT sys-
tems. The computer-supported ICT is assessed with regard to
the possible technological support it can provide to management
218 11 Information Management *

and to employees charged with management tasks and then sha-

ped in such a way to optimally facilitate its use.
The key focus of the term information management is on com-
puter-supported ICT and on managerial and strategic tasks with
regard to ICT.
Information A more nuanced definition of information management can be
and derived by looking at its two components information and mana-
Management
gement separately. In IT, the term management and administrati-
on are often used interchangeably. But in the context of business
studies, management represents the leadership of an enterprise
and is further sub-divided into the institutional and the functio-
nal point of view.
Semiotics The component information can be differentiated from know-
ledge and data using the three levels of semiotics. Semiotics is a
general theory for language and other sign systems that distin-
guishes three levels, syntax (grammatical accuracy), semantics
(accuracy of content) and pragmatics (usefulness i.e., fit for pur-
pose). The levels of semiotics are also a key aspect of business
informatics. Observing syntax rules is fundamental for program-
ming and IT deals with semantic challenges in the context of op-
timizing search engines to accurately understand the content of
a query in order to minimize the number of non-relevant results.
Data, Knowledge consists of perceptions, experiences and factual
Information knowledge about the reality of human life and includes facts,
and Knowledge
phenomena, people, norms, values and actions (see Kluw90).
Knowledge is composed of several related pieces of informati-
on that are systematically assessed.
From a syntactic point of view, all machine-readable characters
are data. Data volume continues to grow due to the seismic ad-
vances in IT technology. Data is a subset of knowledge that is
always physically bound to a storage medium, but not bound by
any content limitations.
Information is processed data and can be present in different
syntactic forms, such as texts, pictures or audio files. In contrast
to data, information always has an interpretable meaning and
also has a usefulness on a pragmatic level, it serves a purpose. In
a business context, the purpose of information lies in preparing
and supporting actions and decisions.
The Abb. 11.2-2 shows the difference between knowledge, da-
ta and information using the levels of semiotics. The overlap
between data and information indicates that data, i.e., machine-
readable data can also have a fixed purpose.
Economic In recent years, business studies have looked at the economic
Qualities of qualities of information and information-based goods and ser-
Information
 11.2 Relevance and Key Terminology * 219

Abb. 11.2-2: Knowledge, Data and Information.

vices. One prominent book about the changing status of infor-

mation in our society and the resulting risks and opportunities
was Shapiro & Varian’s 1999 publication Information Rules. Even
though the authors used a much broader definition of informa-
tion here, referring to any aspect of digitized knowledge, they
successfully drew out the particular economic qualities of in-
formation and information-based goods and services. With re-
ference to other sources (PRW03 pp. 60, Krcm10 p. 20), we can
summarize that
 information is a scarce commodity and not freely available;
 non-material in nature, which is why usage does not depre-
ciate its value;
 easy to copy and its reproduction is very low-cost;
 easy to alter and adapt;
 can be transported at the speed of light;
 problematic with regard to pricing and valuation (e.g. with
regard to establishing copyright and sole right of use);
 transmitted in encoded form, which means that standards for
data exchange have to be agreed.
The term management is used very differently across various The Term
sources, and its usage is discipline dependent. In computer Management
science, the terms management and administration tend to be
used interchangeably, especially in the context of database ad-
ministration or systems management. Thus, from a computer
science point of view, information management would simply
220 11 Information Management *

be information administration, a view that does not take into

account the strategic and managerial aspect that is emphasized
by business studies. From the point of view of business studies,
management stands for leadership, thus it represents a goal-ori-
ented strategy for shaping an enterprise or organization. This
strategic point of view can be further subdivided into an insti-
tutional and a functional perspective (see Stae99 and GaBe03, p.
40).
Institutional According to the institutional point of view, management com-
Perspective prises all employees of a company who take on leadership roles,
as well as the tasks and roles of these employees (managerial
roles approach).
Functional From the functional point of view (managerial functions ap-
Perspective proach) the focus is on the roles and processes of the company
and management includes all measures that are designed to in-
fluence running the enterprise strategically. These measures can
be objective-related (management in its traditional meaning) or
person-related (human resources management strategies). Based
on this functional point of view, management activities can be
divided into phases which together form the management cycle
(see Abb. 11.2-3).

Abb. 11.2-3: The Management Cycle.

Planning as the first phase of the management cycle includes

defining objectives. Together with the resulting decision making
processes, planning is the key aspect of managerial roles, which
is why these tend to be described as planning and decision ma-
king processes. The controlling and organization phase is follo-
wed by the monitoring phase, which itself is the start of a new
management cycle and also influences the current management
and navigation activities.
 11.3 Different Types of Information Management Structures * 221
The term management as described from a functional manage-
ment perspective thus represents the focus of information ma-
nagement on strategic tasks.

11.3 Different Types of Information

Management Structures *
Because of the diversity of IT structures and IT tasks in
different companies, a definition of how IT should be in-
tegrated into the organizational structure that is valid for
all of these is not possible. But there are several typical in-
formation management structures for IT departments that
have become established in different companies.

The IT department can have very different names, in some com- Organizational
panies, it is called IT unit, data processing unit, ICT department Structure
or even information management department. Because of the di-
versity of tasks these departments have to fulfill in different
enterprises, a general description of the typical organizational
structure of IT departments is not possible. But as indicated in
the Abb. 11.3-1, several different types of information manage-
ment structures (IT1, IT2, IT3) that have become established in
companies can be distinguished (Krcm10, p. 301; HeSt09, pp.
129).

Abb. 11.3-1: Different Alternatives for Integrating Information Management

into an Organization.

In the early stages of computer-supported ICT alternative IT1, Specialist

i.e. the IT department as part of a specialist unit (particularly Department
in Financial Controlling) was the most common organizational
structure for information management. This mostly meant that
the IT department was occupied with large volumes of data pro-
cessing and had a formal role. At this stage, the IT department
222 11 Information Management *

tended to be at a great hierarchical distance to the top mana-

gement structures of a company in line with its low perceived
status.
Advisory With the increased relevance and possible uses of IT, more and
Department or more tasks outside the IT department were supported by IT ap-
Main
plications. The exponential and unstructured expansion of the
Department
IT department and the increasing number of applications sup-
ported by it made a coordinated management as well as a coor-
dinated integration of IT measures even more important, which
is why more central departments were created that either wor-
ked as support and advisory departments (as a support depart-
ment without a managerial role) or departments that were part of
the top management (IT2) or as another main department (IT3).
The portfolio of IT departments further expanded when even un-
structured tasks and strategic tasks were able to be supported by
IT and the possible areas of IT use branched out into planning
and controlling tasks.
Steering Due to these developments, the focus has shifted from the pro-
Committee gramming and the technological side towards the organizational
and human-resources-related aspect, which also meant that pro-
ject management and coordination measures, such as steering
committees, have become more relevant (IT4).
Cross- The fifth and most recent phase is characterized by the need
departmental for a holistic view of the role of information management and
Function
its tasks. In order to fulfill this cross- departmental function,
the information role is then carried out jointly by a central IT
department and by IT sections within all departments of the en-
terprise (IT5). This tendency towards dispersal of IT tasks within
an enterprise also means that the responsibility of IT use rests
more with the users themselves, supported by their IT staff.
Centralized v. In the context of the organizational structure, it is important to
Decentralized be aware of the repercussions the different structural alternati-
Approaches
ves have for business processes in the enterprise. The two main
alternatives are centralized vs. decentralized structures, which
is why we will look at some advantages and disadvantages for
both options.
Centralized  Avoids redundancies by creating a coordinated superstruc-
Structure ture.
(examples)
 Allows for better standardization and monitoring.
 Pooled expert knowledge allows for better use of resources.
 Pooled purchase and processing of information is a challenge
and a potential benefit at the same time.
 The complexity and wide variety of IT tasks they have to deal
with can lead to an overstraining of central resources.
 Lack of flexibility.
 11.3 Different Types of Information Management Structures * 223
 High flexibility in decentralized IT departments means the Decentralized
ability to act quickly. Structure
(examples)
 The solutions and activities will be tailored to the specific
needs of the department they are designed for, which will
lead to high satisfaction and adoption rate.
 Quicker and easier access to information within own depart-
ment, but harder to take other external concerns into consi-
deration.
 Central departments require the non-centralized depart-
ments to pass on information to them in a systematic and
consistent manner.
 A greater diversity can either lead to best practice gaining
the upper hand or it can lead to problems with integrating
partial solutions into the whole system.
 Redundant resources in the different organizational units, as
each unit will need their own hardware and software specia-
lists.
Discuss advantages and disadvantages of centralized and decen- Question
tralized IT from the point of view of information management
and list the different IT organization structure options.
In the context of the organizational structure, it is important to Answer
be aware of the repercussions the different structural alternati-
ves have for business processes in the enterprise. The two main
alternatives are centralized vs. decentralized structures, which
is why we will look at some advantages and disadvantages for
both options.
Advantages of Centralized IT Structure
1. Avoids redundancies by creating a coordinated superstruc-
ture.
2. Allows for better standardization and monitoring.
3. Pooled expert knowledge allows for better use of resources.
Advantages of Decentralized IT Structure
1. High flexibility in decentralized IT departments means the
ability to act quickly.
2. The solutions and activities will be tailored to the specific
needs of the department they are designed for which will lead to
high satisfaction and adoption rate.
3. Quicker and easier access to information within own depart-
ment, but harder to take other external concerns into considera-
tion.
Disadvantages of Centralized IT Structure
224 11 Information Management *

1.Pooled purchase and processing of information is a challenge

and a potential benefit at the same time.
2.The complexity and wide variety of IT tasks they have to deal
with can lead to an overstraining of central resources.
3. Lack of flexibility
Disadvantages of Decentralized IT Structure
1. Central departments require the non-centralized departments
to pass on information to them in a systematic and consistent
manner.
2. A greater diversity can either lead to best practice gaining the
upper hand, but it can also lead to problems with integrating
partial solutions into the whole system.
Redundant resources in the different organizational units, as
each unit will need their own hardware and software specialists.

11.4 The CIO as Innovation Leader *

The term CIO (chief information officer) is a term refer-
ring to the leading IT strategist that is not yet precisely
defined. The chief IT officers are faced with many chal-
lenges from different departments for which they will ha-
ve to take on different roles. This is a very important, very
interesting, and very complex position.

Role and Tasks The chief IT strategist of an enterprise must be able to deal with
of the CIO several complex issues and take on different key functions due
to the fact that the relevance of ICT continues to grow and due
to the fact that the speed of development innovations continues
to increase. The term CIO (chief information officer), which ori-
ginated in the US, is becoming more and more common in non-
English speaking countries. While this term is well-established,
this does not mean that different writers agree on the meaning
of the term or the key characteristics of a CIO. But there are so-
me typical functions of IT managers, from which some key skills
and abilities can be extrapolated.
Roles of the According to marketing specialist Henry Mintzberg (1990) all ma-
CIO as IT nagers (including CIO as chief IT manager) fulfill three functions
Manager
in their everyday life (see also Mint90, AdDr09, pp. 968).
1 The CIO as interface for employee relations: The CIO re-
presents IT both within the company and to the outside and
is a central node in various networks. As the CIO is the head
of IT towards all IT employees, one central responsibility is
to ensure a streamlined use of IT across all company depart-
ments. The CIO is the figurehead of the IT department and
 11.4 The CIO as Innovation Leader * 225
is therefore particularly responsible for its look, its attitude
and its working environment.
2 The CIO as disseminator of information: Especially in the
context of IT, the director of the department has to be able
to filter, assess, store and disseminate information. The CIO
has to fulfill this role at the level of the department, at the
level of the company and outside the company. In view of
this central position, any statement or information received
from the CIO will have a particularly strong effect.
3 The CIO as decision maker: Whether it is innovations, pro-
blems, or emergency situations, the CIO needs to make de-
cisions. While the role of problem solver is more response-
oriented, the role of the CIO with regard to innovations is
that of a catalyst for new approaches and new solutions. One
very important area of decision making is resource alloca-
tion, which entails allocating workforce, hardware and soft-
ware, as well as time and budget resources in the best way
possible. Attempting to take decisions from which the whole
company benefits also means that the CIO will have to act as
a negotiator for the IT department, e.g. in budget negotiati-
ons.
In addition to these general managerial roles, the CIO also has Specific
functions that are specific to his field of IT (see PMK04, pp. 183). Functions of
CIOs
The CIO must be a visionary, guided by clear ideas for the future Visionary
IT infrastructure and must be able to realize this vision while
considering alternative scenarios.
The CIO must be able to translate visions and goals into strate- Strategist
gies that will create an operational framework designed to achie-
ve these goals. As the impact of IT on company processes and
policies continues to increase and as IT has an impact on ma-
ny infrastructural decisions, the CIO becomes part of the group
involved in organizational development.
In order to be able to assess the effect, the risks and the oppor- IT Expert
tunities of new technologies or rather of the application of new
technologies prior to their implementation, and in order to main-
tain communications with IT employees, the CIO has to be an IT
expert. However, there is some controversy as to what amount
and what type of specialized knowledge is needed for an IT lea-
der. A study entitled "The State of the CIO" found that CIOs be-
lieved their key competences were the ability
1 to think and plan strategically (60 %)
2 to coordinate and influence processes (35 %) and
3 to shape processes and to manage change (33 %).
IT expertise only came in at rank 4 (32 %) (see CIO10).
226 11 Information Management *

11.5 Tasks and Objectives of

Information Management *
The objectives of information management follow the ob-
jectives of the company and can be subdivided into output
objectives, formal objectives and other objectives.

Objective Output objectives are concerned with the performance of the

categories company, i.e. the quantity and type of units that are produced.
Formal objectives represent the rational strategic decisions
the company takes in order to ensure its survival. These ob-
jectives are concerned with factors such as liquidity, turnover
and profitability. In IT as well as in other parts of the enterprise,
other objectives are also relevant, such as sustainability (e.g.
Green IT) and social objectives (e.g. healthy work environment
for employees, by creating ergonomic work stations for IT staff).
Business studies normally further distinguish between strate-
gic and operational objectives, where strategic objectives are
concerned with the position of the enterprise within the market
and with regard to the competition. These objectives are high-
ly complex and of an abstract and analytical nature. In contrast,
the operational objectives look at the specific environment and
are concerned with realizing the strategic objectives in a set si-
tuation (see Abb. 11.5-1).

Abb. 11.5-1: Strategic and Operational Objectives, Output Objectives, Formal

Objective and Other Objectives.

Precise Formally, objectives must always be precisely defined and this

Definition of definition must include the content, the instruction wording of
Objectives
the objective and its duration. First, the precise issue of an ob-
jective is defined, e.g., optimization of business processes. Then
 11.5 Tasks and Objectives of Information Management * 227
the objective content defines the state that is to be achieved, i.e.
faster order processing. Finally, the precise instruction of the
objective is drafted, which can be an optimization, a satisfaction
or a fixation. In this context, optimization is understood as try-
ing to obtain the best possible result, while satisfaction means
attaining a specific target. A fixation is understood as achieving
a precisely defined goal within a set time-frame. The objective
duration describes the time-frame in which the objective is to be
attained.

A precisely defined objective might be: Within a time-frame of Example

12 months the delay from order receipt to delivery of goods
requested is to be reduced to 3 days.

The complex and varied objectives of a company and the relati- Objective
onships between them form a complex system of objectives and system,
Hierarchy of
a hierarchy of company objectives. These relationships can be
Objectives,
complementarities, indifferences or conflicts between objecti- Relations
ves. In order to resolve conflicts between objectives, these need between
to be weighted or ranked. Objectives

The Abb. 11.5-1 shows examples for the different objective cate-
gories.
In order to work towards long term objectives, strategies must
be defined, but these strategies will not be studied in detail in
this short overview. The strategies as well as the associated ob-
jectives are the basis of information management, which can de-
scribed systematically as shown in Abb. 11.5-2, by defining its
different dimensions.
Similarly to the different phases of the management cycle, dif- Planning Tasks,
ferent planning, decision making, controlling and monitoring Decision
Making,
tasks can be distinguished in information management.
Controlling and
Monitoring
If a company plans to create a more flexible offer proposal Example
Tasks in
system (planning) and for this reason needs to give access to Information
the central sales and distribution database for sales person- Management
nel (decision), then the technical and structural requirements
for this access and for this change in offer proposal system
have to be created. Additionally, the use of the external ac-
cess has to be implemented and monitored (control). Another
important task of information management is to assess the
attainment of objectives – in this example an increased custo-
mer satisfaction – and also to make a cost-benefit analysis for
the measure (monitoring).

As computer-supported information systems are socio-technolo- Interdependen-

gical systems, the tasks of information management can further cies between
different Tasks
in Information
Management
228 11 Information Management *

Abb. 11.5-2: Tasks of Information Management.

be subdivided into technological, problem-related and person-

related tasks. This is an approach based on a system-theoretic
view that is designed to describe and analyze the interdepen-
dencies between different factors of computer supported ICT
systems (see GaBe03, pp. 84 ).

Example Thus an upgrade of word processing software that is needed

for technical reasons also requires training workshops for the
staff working with this new software. In some cases, this up-
grade might then also have an increased efficiency potential,
by allowing users to share documentation etc.

Operational As was the case for the objectives, the tasks of information ma-
and Strategic nagement can be subdivided into strategic and operational tasks.
Tasks of
While it is very reasonable to make this theoretical distinction
Information
Management between strategic and operational tasks, it is not as easy to se-
parate these in practice. Indicators for strategic tasks are a high
competitive relevance and a high level of abstraction and com-
plexity. Strategic tasks normally influence the external situation
 11.5 Tasks and Objectives of Information Management * 229
of the company and they tend to be planning and managing ac-
tivities with a high level of freedom in execution. The outcomes
of strategic tasks tend to be long-term in nature.
The Abb. 11.5-3 shows an example of a strategic task.

Abb. 11.5-3: Example for a Strategic Task in Information Management.

In contrast to strategic tasks, operational tasks tend to have low

competitive relevance, tend to be low in complexity and to be
fixed on only one aspect of the company. They also tend to have
a more short-term perspective and to focus more on the compa-
ny-internal activities. These tasks are designed to shape compa-
ny processes while taking into account any future impacts and
changes. An example for an operational task would be the crea-
tion of a company-internal user helpline as part of the software
upgrade mentioned above.
While the systematic approaches cited above help to get an over- Content Areas
view of the diverse tasks and objectives of information manage- of Information
Management
ment, they remain fairly abstract in nature. To fill them with
content, the tasks can be classified into the following content
areas:
 Modeling in Information Logistics: Design of a conceptual ba-
sis for the infrastructure of all information systems, in parti-
cular with regard to decision making processes, information
objects and information flow
 IT Strategy: Design of a strategy for the long-term IT infra-
structure, which allows for business and IT alignment (i.e.,
compatibility between IT strategy and business strategy) and
230 11 Information Management *

provides a framework with regulations for the company IT

policy (IT governance).
 Operational IT Management: Controlling and monitoring the
day-to-day IT usage, e.g. with regard to number of employees
and HR management of employees.
Best Practice In the context of realizing IT management solutions in a busi-
Frameworks ness, best practice frameworks such as COBIT and ITIL play an
important role. These frameworks close the gap between the aca-
demic analysis of IT management solutions and their practical
implementation.
COBIT The COBIT framework («Control Objectives for Information and
related Technology«) has been designed by the Systems Audit
and Control Association« (ISACA), which is an association of IT
security, risk management and governance experts. This frame-
work is designed to support the compliant and high performan-
ce implementation of IT management solutions in companies of
any size in order to promote high-value IT usage.
The current best practice standard COBIT 5 has been designed
with reference to other key frameworks, including ITIL (IT In-
frastructure Library). One key component of this framework is
the Process Reference Model, which includes best practices for
37 processes which can occur in the context of IT activities in
companies. TheAbb. 11.5-4 gives an overview of the process re-
ference model.
Each process is described in detail in the COBIT framework, de-
tailing its objectives, roles and functions, practices, labeling etc.
The COBIT website provides more detailed information on this
framework.
Question Describe the components of a precise objective definition and
differentiate between output objectives, formal objectives and
other objectives and give examples from the field of information
management.
Answer From a formal point of view, objectives must always be preci-
sely defined and this definition must include the content, the
instruction wording of the objective and its duration. At first,
the precise issue of an objective is defined, e.g., optimization of
business processes. Based on this overview, the content of the
objective defines the state that is to be achieved, i.e. faster order
processing. After this, the precise instruction of the objective is
drafted, which can be an optimization, a satisfaction or a fixati-
on.
In this context, optimization is understood as trying to obtain
the best possible result, while satisfaction means attaining a spe-
cific target. A fixation is understood as achieving a precisely de-
 11.5 Tasks and Objectives of Information Management * 231

Abb. 11.5-4: The COBIT Process Reference Model [Isac17].

fined goal within a set time-frame. The objective duration des-

cribes the time-frame in which the objective is to be attained. A
precisely defined objective might be:
Within a time-frame of 12 months the delay from order receipt
to delivery of goods requested is to be reduced to 3 days.
The complex and varied objectives of a company and the rela-
tionships between them form a complex system of objectives
and a hierarchy of company objectives. These relationships can
be complementarities, indifferences or conflicts between objec-
tives.
The objectives of information management follow the objectives
of the company and can be subdivided into output objectives,
formal objectives and other objectives. Output objectives are
concerned with the performance of the company, i.e. the quanti-
ty and type of units that are produced
Formal objectives represent the rational strategic decisions the
company takes in order to ensure its survival. These objectives
are concerned with factors such as liquidity, turnover and pro-
fitability. In IT as well as in other parts of the enterprise, other
objectives are also relevant, such as sustainability (e.g. Green
232 11 Information Management *

IT) and social objectives (e.g. healthy work environment for

employees, by creating ergonomic work stations for IT staff).
Question Differentiate between strategic and operational tasks.
Answer As was the case for the objectives, the tasks of information ma-
nagement can be subdivided into strategic and operational tasks.
While it is very reasonable to make this theoretical distinction
between strategic and operational tasks, it is not as easy to se-
parate these in practice. Indicators for strategic tasks are a high
competitive relevance and a high level of abstraction and com-
plexity. Strategic tasks normally undertake to actively influence
the external situation of the company and they tend to be plan-
ning and managing activities with a high level of freedom in exe-
cution.
In contrast to strategic tasks, operational tasks tend to have low
competitive relevance, tend to be low in complexity and to be
fixed on only one aspect of the company. They also tend to have
a more short-term perspective and to focus more on the compa-
ny-internal situation. These tasks are designed to shape compa-
ny processes while taking into account any future impacts and
changes. An example for an operational task would be the crea-
tion of a company-internal user helpline as part of a software
upgrade.

11.6 Outsourcing *
One central area of decision making in IT is the decision
whether IT support and IT infrastructure is to be provi-
ded in-house or externally. The term outsourcing refers to
the use of external resources, in particular in the context
of IT. Depending on the aspect that is the focus, strate-
gic information management distinguishes between out-
sourcing IT support and outsourcing implementation of
IT structures as well as between use on the infrastructu-
ral level, the everyday application or the use for business
processes. A particularly relevant new development is the
use of cloud computing as external IT resource.

Relevance of Outsourcing and Definition of the Term Outsour-

cing
The term Outsourcing is composed of the three components re-
source, outside and using. The term refers to the use of external
resources, in particular in the context of IT. All companies, and
in particular those facing increased competitive pressure, need
a clear strategy as to which parts of first and secondary value
adding activities should be performed in-house, due to their par-
 11.6 Outsourcing * 233
ticular relevance for overcoming competition, and which activi-
ties can be outsourced to specialists inside or outside the coun-
try in order to increase efficiency and minimize costs. From the
point of view of strategic information management, this questi-
on has to be viewed at different levels and in different contexts,
as outsourcing can be conceived either at the level of IT use (user
perspective) and at the level of providing IT services (provider
perspective). Furthermore, outsourcing can happen either on the
infrastructure level (infrastructure outsourcing), at the applica-
tion level (application outsourcing) or at the level of business
processes (business process outsourcing).

Infrastructure Outsourcing: Type of IT outsourcing where Definition

the maintenance and running of the whole IT infrastructure
or parts of the IT infrastructure, as well as relevant support
services, are run by an external IT provider, fully responsible
for this IT infrastructure (see BITK09b).

Application Outsourcing: Type of IT outsourcin, where the Definition

responsibility for the availability of the application rests so-
lely with the IT provider. The provider offers all services nee-
ded, based on a clearly defined SLA (Service Level Agreement),
e.g. implementation, running of the application updating, sup-
port and migration (see BITK09b).

BusinessProcessOutsourcing An external provider runs one Definition

business process for the company, including all relevant sup-
port IT infrastructure (BITK09b).

While infrastructure outsourcing and application outsourcing ha- Use and

ve become widespread in today’s business climate of exponential Proliferation
performance growth of IT and against the background of conti-
nued standardization and its low competitive impact, business
process outsourcing tends to be viewed more critically as the
differentiation between business processes that are part of the
competitive advantage and those that are not. However, all three
types of outsourcing are very common in business IT usage.
Another common differentiation between the different variati- The Geographic
ons of outsourcing structures is based on the geographic locati- Location of the
Outsourcing
on of the outsourcing partner, who can either be close by or in a
Partner as
different location inside or outside the country of the company. Differentiating
The Abb. 11.6-1 shows the possible outsourcing combinations Feature
and the respective terms. If services are outsourced to a compa-
ny in the same country that is connected to the company, this
is called in-house outsourcing. Outsourcing to a separate com-
pany in the same country is called on-shoring.Outsourcing to a
234 11 Information Management *

company that is connected to your company, but is situated in

another country, is called captive off-shoring. If the company is
not connected to your company, it is simply called off-shoring.
In the case of off-shoring, a differentiation based on geographi-
cal distance can be made between near-shoring (from the point
of view of Germany this would mean Eastern Europe) or far-sho-
ring (from Germany, this could be India).

Abb. 11.6-1: Provider-based Variations of Outsourcing [based on [BDH15, p.

171]].

Abb. 11.6-2 lists the most commonly named arguments for out-
sourcing.
The challenges and risks related to outsourcing are summarized
in the Abb. 11.6-3. Surveys show that cost-related issues seem
to be the main reasons cited.
Advantages The reasons cited for and against outsourcing already show the
and many facets and the complexities of the outsourcing decision.
Disadvantages
These different issues represent a classic make-or-buy decision,
of Outsourcing
as a Type of for which a catalog of decision making criteria have been esta-
Make-or-Buy blished based on a large number of long academic and empirical
Decision studies conducted. (see EnRe93, pp. 263 and GGW09):
Competence:
The competence criterion looks at the fundamental question
whether the company has the competence and the relevant
knowledge in-house or if there is a deficit which needs to be
filled by another party. Based on this assessment an analysis of
possible partners and suppliers who can provide the required
competences will be conducted and it will be assessed, whether
these can provide the required services and whether using ex-
ternal partners will be more efficient or of a higher quality than
running these services in-house.
Quality:
 11.6 Outsourcing * 235

Abb. 11.6-2: Reasons for Outsourcing [Krcm15, p. 430 f.].

With regard to quality, the relevance of these services to the

overall services provided by the company must be assessed,
and the potential risk to quality standards by using external par-
ties must be analyzed. The company must assess if the potential
suppliers will attain the required quality standard and how the
coordination of services can be managed in such a way that the
overall service package is not reduced in quality from the point
of view of the client. Ideally, the quality of the services provided
should be increased in the eyes of the client by adding exter-
nal partners to the company. This can be made more visible by
public marketing efforts, such as co-branding.
Efficiency:
The company must analyze whether restructuring the service
provision in such a way that the individual partners who make
a small contribution to the value addition of the company can
increase the overall efficiency. Careful coordination of the ser-
vice providers must then be put into place. From a cost analy-
sis point of view, the decision between make-or-buy alternatives
must calculate per-unit cost of making or buying a product or
236 11 Information Management *

Abb. 11.6-3: Risks and Challenges of IT-Outsourcing [Krcm15, pp. 431 f.].

service and calculate the cost of the coordination effort, i.e. the
resulting transaction cost per unit (see PiNe02, pp. 556).
Control:
From the point of view of control, it must be assessed if the
required level of control over the overall services provided can
be exercised by the company despite outsourcing some of the
services. The increased possibilities for integrated planning and
controlling multi-contributor services via digitalization and net-
working in the new Net Economy can tilt the balance towards out-
sourcing, i.e. towards buy in this make-or-buy decision. Planning
and coordinating services across one value chain that spans dif-
ferent companies requires compatible inter-organizational ma-
nagement structures amongst other key requirements. Different
planning, monitoring and control processes as well as very dif-
ferent company cultures can cause tensions, which in turn may
cause frictions and losses across the value chain.
Competitive:
 11.6 Outsourcing * 237
This criterion indicates that the outsourcing decision must al-
so correspond to the value addition levels and the service rea-
lization practiced by the competition. In some cases, new busi-
ness models will allow for a complete restructuring of traditional
business infrastructures. The comparison to competitors’ busi-
ness structures can indicate where the competition expects to
realize business advantages through outsourcing (see EnRe93,
p. 274). Thus benchmarking becomes an important tool in weig-
hing the company’s own decisions against the competition. De-
pending on the overall company goals, the company can either
opt to follow a similar path to its competitors or it can delibera-
tely opt to differentiate itself from the competition by choosing
a different service structure.
Availability:
First of all, the company must assess if there are service provi-
ders offering the required service contribution. Due to the trend
towards digitization and interconnection of the supply market,
availability of services tends to be a given, as long as the service
contributions required fulfill some key requirements. Currently
there is a trend towards more transparency via more readily ac-
cessible and extensive information on the supply partners. This
also leads to more potential supply partners for make-or-buy de-
cisions in IT. Geographical distance becomes less relevant in the
context of digitized logistics services.
Flexibility:
For a company, the implications of providing a service in-house
or supplying it through external partners will be assessed with
regard to the flexibility and adaptability it offers to the com-
pany management. This entails looking at possible dependen-
cies on partners or on specific technology as well as at different
cost structures of buying services rather than providing them in-
house. The decision to outsource services rather than providing
them in-house tends to reduce fixed costs and to increase the va-
riable costs of a company (unless these costs have been fixed in
the context of a cost-fixed supply contract, in which case the ex-
ternal supply also creates fixed costs rather than variable costs).
The decision to provide services in-house (make) or the decisi-
on to bind the external partners more closely to the company
can cause a reduction in flexibility of the company’s future ma-
nagement decisions. If the in-house IT provision or the external
partners’ IT services turn out to be no longer competitive, due
to new product or process developments, this can then paralyze
the company’s whole value chain with regard to its adaptation to
new business requirements.
Strategic Relevance:
238 11 Information Management *

What are the strategic implications of outsourcing service con-

tributions and what are the potential disadvantages, i.e. loss of
competences or ceding competences towards potential competi-
tors?
Current State- In summary, it can be stated that outsourcing is a highly rele-
of-the-Art and vanttopic in information managementwhich requires companies
Future
to reassess the competitive relevance of their IT infrastructure
Development
as a whole or of its separate components. It is becoming easier
to outsource specific IT components, i.e., to outsource primary
or secondary value adding activities to external IT partners. The
reason for this increased feasibility lies in the increased trans-
parency of the supplier market and the technical development
in digitization allowing for cross-company value chain manage-
ment using digital networks. Significant parts of the IT structure
must now be viewed as market visible input structures, where
individual company internal solutions tend to be a competitive
disadvantage for the companies. It is the task of the company’s
information management to determine which part of the compa-
ny’s IT services are considered as strategic advantage and com-
petitive edge and must therefore be kept in-house to secure the
company’s market share. It is essential to weigh all criteria for or
against outsourcing carefully and not to focus too much on cost.
Question What is outsourcing and what are its potential risks and advan-
tages?
Answer The term outsourcing is composed of the subcomponents, re-
source, outside and using and refers to the use of external ser-
vice providers, in particular in the context of IT services. All
companies, and in particular those exposed to global competi-
tion and global cost pressure, need clear strategies for deciding
which of their primary or secondary value adding activities must
be provided in-house, due to their high competitive relevance,
and which activities should be outsourced, in order to increa-
se efficiency, or in order to access expert technological compe-
tence by employing IT experts inside or outside the company’s
home country. Strategic information management must assess
the different outsourcing options in the light of different crite-
ria and different factors, as IT outsourcing must be viewed both,
from the point of view of the IT user (user perspective) and from
the point of view of the IT service provider (provider perspecti-
ve). Furthermore, the analysis must also decide on the level of
outsourcing, on the infrastructure level (infrastructure outsour-
cing), on the application level (application outsourcing) and/or
on the business process level (business process outsourcing).
Question Differentiate between captive off-shoring and on-shoring.
Answer One criterion for differentiating between different types of out-
 11.6 Outsourcing * 239
sourcing is based on the geographical location of the outsour-
cing partner, who can either be a subsidiary or a separate compa-
ny and who can either be located in the same country or abroad.
If services are outsourced inside the same country, this is called
on-shoring. If services are outsourced abroad, but to a company
that is a subsidiary of the mother company, this is called captive
off-shoring.
Which types of outsourcing can be distinguished based on the Question
level of outsourcing?
The term outsourcing is composed of the subcomponents, re- Answer
source, outside and using and refers to the use of external service
providers. All companies, in particular those exposed to global
competition and global cost pressure, need clear strategies for
deciding which of their primary or secondary value adding acti-
vities must be provided in-house, due to their high competitive
relevance, and which activities should be outsourced, in order
to increase efficiency, or in order to access expert technological
competence by employing IT experts inside or outside the com-
pany’s home country. Strategic information management must
assess the different outsourcing options in the light of different
criteria and different factors, as IT outsourcing must be view-
ed both from the point of view of the IT user (user perspective)
and from the point of view of the IT service provider (provider
perspective. Furthermore, the analysis must also decide on the
level of outsourcing, on the infrastructure level (infrastructure
outsourcing), on the application level (application outsourcing)
and/or on the business process level (business process outsour-
cing).
Infrastructure Outsourcing
Type of IT outsourcing where the maintenance and running of
the whole IT infrastructure or parts of the IT infrastructure as
well as relevant support services are run by an external IT pro-
vider fully responsible for this IT infrastructure.
Application Outsourcing
Type of IT outsourcing where the responsibility for the availa-
bility of the application rests solely with the IT provider. The
provider offers all services needed, based on a clearly defined
SLA (Service Level Agreement), e.g. implementation, running of
the application updating, support and migration.
Business Process Outsourcing
An external provider runs one entire business process for the
company including all relevant support IT infrastructure.
240 11 Information Management *

11.7 Review Questions *

Questions and corresponding answers are to be found
in <BUCH>chapter</BUCH><WEB>knowledge modu-
le</WEB>»Review Questions«, S. 267.<br/><br/>
Discuss the current business situation and explain why in-
formation management is particularly relevant today.
Discuss advantages and disadvantages of centralized and
decentralized IT from the point of view of information ma-
nagement and list the different IT organization structure
options.
How can IT be integrated in an organization?
Which specific functions does a CIO have as IT manager?
Describe the components of a precise objective definition
and differentiate between output objectives, formal objec-
tives and other objectives
Differentiate between strategic and operational tasks.
What is COBIT?
What is outsourcing?
Differentiate between captive off-shoring and on-shoring.
Which types of outsourcing can be distinguished based on
the level of outsourcing?
In-depth exercise
Social media pose a significant challenge for companies in multi-
ple ways, though there is enormous potential. On the one hand,
discussions, reviews and recommendations make companies a
part or object of social media. Changing media consumption and
corresponding employee expectations on the other hand must be
faced by companies to tap the full potential.
Subtask 1:
First, get an idea which changes are existing. In order to
do so, please watch the video «Socialnomics 2017« htt-
ps://goo.gl/IVJfDYand access all free data on organizational so-
cial media use on Statista: https://goo.gl/2kgp3A.
Subtask 2:
There are numerous interesting examples showing effective ap-
proaches of social media usage (e.g. for viral marketing cam-
paigns) but also portraying cases of considerable image loss due
to failed or overly passive customer communications via social
media. Learn more about prominent achievements and failures
on https://goo.gl/lZGrVuand onhttps://goo.gl/18uPdg.
Subtask 3:
 11.7 Review Questions * 241
Social Media guidelines are an essential part for companies when
using social media. You can find some of these directives in a
guide by Bundesverband Digitale Wirtschaft (BVDW). Please find
examples for social media guidelines and give some hints how
to improve these, by taking the BVDW guide into account.
Examples of real-life social media guidelines: htt-
ps://goo.gl/WirJ1n