Enterprise and Global Management of Information Technology: Mcgraw-Hill/Irwin

1
Chapter
12
Enterprise and Global

Management of
Information Technology
McGraw-Hill/Irwin
Copyright 2004, The McGraw-Hill Companies, Inc. All rights
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.
McGraw-Hill/Irwin
Learning Objectives (continued)
Identify
each of the three components of

information technology management and use
examples to show how 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.
McGraw-Hill/Irwin
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.
McGraw-Hill/Irwin
Identify
considerations that affect the choice

of IT applications, IT platforms, data access
policies, and systems development methods by
a global business enterprise.
McGraw-Hill/Irwin
Section I
Managing Information Technology
McGraw-Hill/Irwin
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.
McGraw-Hill/Irwin
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
McGraw-Hill/Irwin
The Impact of IT on Organizations

Key
dimensions of the networked enterprise

Organizational structure
Leadership and governance
People and culture
Coherence
Knowledge
Alliances
McGraw-Hill/Irwin
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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
McGraw-Hill/Irwin
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Managing Information Technology (continued)
Three
major components (continued)

Managing the IT processes, professionals, &
subunits with the IT organization & IS
function
McGraw-Hill/Irwin
12
Managing the IS Function

Organizing
IT
Centralization
Decentralization
Latest trend, hybrid
McGraw-Hill/Irwin
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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
McGraw-Hill/Irwin
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Managing
IS Operations
Managing the use of hardware, software,
network, and personnel resources in data
centers/computer centers within an
organization
McGraw-Hill/Irwin
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Managing
IS operations (continued)
Operational activities requiring
management
Computer systems operations
Network management
Production control
Production support
McGraw-Hill/Irwin
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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
McGraw-Hill/Irwin
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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
McGraw-Hill/Irwin
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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
McGraw-Hill/Irwin
19
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
McGraw-Hill/Irwin
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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
McGraw-Hill/Irwin
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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
McGraw-Hill/Irwin
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.
McGraw-Hill/Irwin
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Failures in IT Management (continued)
Helps
avoid IS performance problems
Helps
improve the strategic business value of
IT
McGraw-Hill/Irwin
24
Section II
Managing Global IT
McGraw-Hill/Irwin
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The International Dimension

A vital
part of managing an e-business

enterprise in the internetworked global
economies and markets of today.
McGraw-Hill/Irwin
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Global IT Management
McGraw-Hill/Irwin
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Cultural, Political, and Geoeconomic Challenges

Cultural
challenges
Differences in languages
Cultural interests
Religions
Customs
Social attitudes
Political philosophies
McGraw-Hill/Irwin
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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
McGraw-Hill/Irwin
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
McGraw-Hill/Irwin
30
Global e-Business Strategies

Moving
away from
Autonomous foreign subsidiaries
Autonomous foreign subsidiaries, dependent
on headquarters for new processes,
products, and ideas
Close management of worldwide operations
by headquarters
McGraw-Hill/Irwin
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
McGraw-Hill/Irwin
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
McGraw-Hill/Irwin
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
McGraw-Hill/Irwin
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
McGraw-Hill/Irwin
35
Global Data Access Issues

Transborder
data flows (TDF)

Data flow across international borders over
telecommunications networks of global
information systems
McGraw-Hill/Irwin
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
McGraw-Hill/Irwin
37
Global Data Access Issues (continued)
Internet
Access Issues
High government access fees
Government monitored access
Government filtered access
No public access allowed
McGraw-Hill/Irwin
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
McGraw-Hill/Irwin
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
McGraw-Hill/Irwin
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
McGraw-Hill/Irwin
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?
McGraw-Hill/Irwin
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?
McGraw-Hill/Irwin
43
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?
McGraw-Hill/Irwin
44
How
might cultural, political, or geoeconomic

challenges affect a global companys 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?
McGraw-Hill/Irwin
45
How
might the Internet, intranets, and

extranets affect the business drivers or
requirements responsible for a companys use
of global IT, as shown in the chapter?
McGraw-Hill/Irwin
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?
McGraw-Hill/Irwin
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?
McGraw-Hill/Irwin
48
Should
business managers be responsible for

justifying the ROI of IT investments that will
benefit their business units?
McGraw-Hill/Irwin
49
Who
should be involved in evaluating the ROI

of the IT investment proposals of a companys
business units?
Why?
McGraw-Hill/Irwin
50
Real World Case 2 Agilent Technologies & Citibank

The
Challenges of Consolidating Global IT
Do
you agree with Agilents global IT

consolidation goals and process?
McGraw-Hill/Irwin
51
Why
did Agilents global IT consolidation get

such a strong negative response from many
business and IT stakeholders?
Could
this reaction have been avoided?
McGraw-Hill/Irwin
52
What
are the business benefits of Citibanks

global IT consolidation project?
How
can a single global system still be

customized for each country?
McGraw-Hill/Irwin
53
What
challenges might arise in managing the

global IT function at Agilent Technologies
from this point on?
How
would you meet such challenges?
McGraw-Hill/Irwin
54
Real World Case 3 Cisco Systems

Failure
in Supply Chain Management
What
caused Ciscos $2.2 billion loss in

unneeded inventory?
Could
this situation have been avoided?
McGraw-Hill/Irwin
55
How
is eHub supposed to avoid such losses in

the future?
What
problems might arise with this new

system?
McGraw-Hill/Irwin
56
What
can be done in the supply chain

management process of any company to avoid
situations like Ciscos?
McGraw-Hill/Irwin
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?
McGraw-Hill/Irwin
58
What
are the business benefits of Merrill

Lynchs new global order processing system?
What
implementation challenges are

involved?
McGraw-Hill/Irwin
59
Does
the merger of Merrills global services

division and its IT division make good business
sense?
McGraw-Hill/Irwin
60
Real World Case 5 Firemans Fund, Allmerica Financial, &

FMC
The
Business Case for IT Outsourcing
What
is the business value to Firemans Fund

and Allmerica of outsourcing their computer
operations?
What
are some potential limitations of such

outsourcing arrangements?
McGraw-Hill/Irwin
61
What
is FMCs 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?
McGraw-Hill/Irwin
62
What
are the benefits and potential limitations

of offshore and near-shore IT outsourcing
arrangements?
McGraw-Hill/Irwin

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1

Enterprise and Global

Copyright 2004, The McGraw-Hill Companies, Inc. All rights

ways that information technology has

the seven major dimensions of a

Copyright 2004, The McGraw-Hill Companies, Inc. All rights

Learning Objectives (continued)

each of the three components of

how failures in IT management can be

Copyright 2004, The McGraw-Hill Companies, Inc. All rights

Learning Objectives (continued)

cultural, political, and geoeconomic

the effect on global e-business strategy

Copyright 2004, The McGraw-Hill Companies, Inc. All rights

Learning Objectives (continued)

considerations that affect the choice

Copyright 2004, The McGraw-Hill Companies, Inc. All rights

Managing Information Technology

Copyright 2004, The McGraw-Hill Companies, Inc. All rights

Copyright 2004, The McGraw-Hill Companies, Inc. All rights

The Impact of IT on Managers

force for precipitating or enabling

innovative changes in managerial

Copyright 2004, The McGraw-Hill Companies, Inc. All rights

The Impact of IT on Organizations

dimensions of the networked enterprise

Copyright 2004, The McGraw-Hill Companies, Inc. All rights

Managing Information Technology

Copyright 2004, The McGraw-Hill Companies, Inc. All rights

Managing Information Technology (continued)

major components (continued)

Copyright 2004, The McGraw-Hill Companies, Inc. All rights

Managing the IS Function

Copyright 2004, The McGraw-Hill Companies, Inc. All rights

Managing the IS Function (continued)

Copyright 2004, The McGraw-Hill Companies, Inc. All rights

Managing the IS Function (continued)

Copyright 2004, The McGraw-Hill Companies, Inc. All rights

Managing the IS Function (continued)

Copyright 2004, The McGraw-Hill Companies, Inc. All rights

Managing the IS Function (continued)

Copyright 2004, The McGraw-Hill Companies, Inc. All rights

Managing the IS Function (continued)

Copyright 2004, The McGraw-Hill Companies, Inc. All rights

Managing the IS Function (continued)

CIO and Other IT Executives

Copyright 2004, The McGraw-Hill Companies, Inc. All rights

Managing the IS Function (continued)

Copyright 2004, The McGraw-Hill Companies, Inc. All rights

Managing the IS Function (continued)

Copyright 2004, The McGraw-Hill Companies, Inc. All rights

is not being used effectively by companies

is not being used efficiently by IS that

Copyright 2004, The McGraw-Hill Companies, Inc. All rights

Failures in IT Management (continued)

Involvement and Governance

Copyright 2004, The McGraw-Hill Companies, Inc. All rights

Failures in IT Management (continued)

avoid IS performance problems

improve the strategic business value of

Copyright 2004, The McGraw-Hill Companies, Inc. All rights

Copyright 2004, The McGraw-Hill Companies, Inc. All rights

The International Dimension