Chapter 12

Enterprise and Global

Management of Information
Technology

McGraw-Hill/Irwin Copyright © 2010 by the McGraw-Hill Companies, Inc. All rights reserved.
 Business and IT

As the 21st century unfolds, many companies are

transforming themselves into global powerhouses
via major investments in…

Global e-business

E-commerce

Other IT initiatives

Business managers and professionals must know

how to manage this vital organizational function

12-2
Components of IT Management

12-3
The Business/IT Planning Process

12-4
 The Business/IT Planning Process

Major components of business/IT planning

Strategic Technology
development architecture
Resource
management

12-5
Information Technology Architecture

The IT Technology platform

architecture is
a conceptual Data resources
design that
includes these Application architecture
major
components IT organization

12-6
 Managing the IT Function

Three things recently happened

The Internet boom inspired businesses

to connect their networks

Companies have essential applications on their

intranets, without which they cannot function

It became apparent that maintaining PCs

on a network is very, very expensive

Created an urgent need for centralization

12-7
 Organizing IT

Early Years Next Current

Centralization Downsizing and Centralized

of computing moving back to control over the
with large decentralization mgmt of IT
mainframes Serving the
strategic needs
of business
units
Hybrid of
centralized and
decentralized
components

12-8
Avnet Marshall Organizational Components

12-9
Managing Application Development

Systems
analysis
& design
System Prototyping
maintenance
Application
development
involves…
Quality Applications
assurance programming
Project
management

12-10
 Managing IS Operations

 IS operations management
– Concerned with the use of hardware, software,
network, and personnel resources in data
centers
 Operational activities that must be managed
– Computer system operations
– Network management
– Production control
– Production support

12-11
 System Performance Monitors

Software packages that…

Optimize
computer system
performance
Monitor Facilitate
computer job capacity planning
processing and control

12-12
Features of System Performance Monitors

Chargeback
Chargeback Process
Process Control
Control
Systems
Systems Capabilities
Capabilities
Allocates
Allocates costs
costs to
to Systems
Systems that
that
users
users based
based on
on monitor
monitor and
and
the
the information
information automatically
automatically
service
service rendered
rendered control
control computer
computer
operations
operations at
at large
large
data
data centers
centers

12-13
 IT Staff Planning

Evaluating
Evaluating employees
employees
Recruiting,
Recruiting, training,
training, and
and rewarding
rewarding good
good job
job
and
and retaining
retaining performance
performance with
with salary
salary
qualified
qualified IS
IS personnel
personnel increases,
increases, promotions
promotions

Setting
Setting salary
salary Designing
Designing
and
and wage
wage levels
levels career
career paths
paths

12-14
 IT Executives

Oversees all uses of IT

Chief Information
Officer (CIO) Aligns IT with strategic
business goals

In charge of all IT
planning/deployment
Chief Technology Manages the IT platform
Officer (CTO)
Second in command

12-15
 Other IT Positions

E-commerce Technical
architect team leader

Systems Chief
analyst Security Officer

12-16
 Technology Management

 All IT technologies must be used as a

technology platform for integrating business
applications
– Both internally or externally focused
– Includes Internet, intranets, electronic
commerce, collaboration technologies, CRM
software, enterprise resource planning, and
supply chain management
 Often the primary responsibility of a chief
technology officer
12-17
 Managing User Services

 Business units that support and manage

end-user and workgroup computing
– Can be done with information centers
staffed with user liaison specialists or with
Web-enabled intranet help desks
 Key roles
– Troubleshooting problems
– Gathering and communicating information
– Coordinating educational efforts
– Helping with end-user application development
12-18
 Outsourcing

The purchase of goods or services

from third-party partners
that were previously provided internally
12-19
Why Companies Outsource

12-20
 Offshoring

Relocation of an organization’s business processes

to a lower-cost location
This location is typically overseas

Can be either production or service

Growth of services offshoring linked to…

Digitization of many services

Availability of large amounts of reliable and

affordable communication infrastructure

12-21
 Failures in IT Management

IT not used Computerizing traditional business

effectively processes instead of developing
innovative e-business processes

Poor response times

Frequent downtime
IT not used
efficiently Poorly managed application
development

12-22
 Management Involvement & Governance

 Managerial and end user involvement

– Key ingredient to high-quality information
system performance
– Optimizes business value of IT

 Governance structures
– Steering committees, executive councils
– Encourages active participation in planning
and controlling business uses of IT
– Helps avoid post-development problems

12-23
Sr. Management’s Involvement in IT

12-24
 IT Governance Approaches

 Control Objectives for Information and

Technology (COBIT)
– Framework for IT management
– Set of generally accepted measures,
indicators, processes, and best practices
 Covers four domains
– Planning and organization
– Acquisition and implementation
– Delivery and support
– Monitoring
12-25
COBIT in Action

12-26
 The International Dimension

Companies around the world are developing new

models to operate competitively in a digital economy

Concentrates on
These models are
maximizing risk-adjusted
structured, yet agile,
return from both knowledge
global, yet local
and technology assets

12-27
Global IT Management Dimensions

12-28
 Global IT Management Challenges

Political
PoliticalChallenges
Challenges

Many countries regulate or prohibit the

transfer of data across their national boundaries

Others severely restrict, tax, or prohibit

imports of hardware and software

Some have local content laws that specify the portion of

the value of a product that must be added in that country
if it is to be sold there

Others require a business to spend part of the revenue

they earn in a country in that nation’s economy

12-29
Global IT Management Challenges

Geo-economic Challenges

Physical distances still a major problem

Takes too long to fly in specialists

Hard to communicate in real time across time zones

Poor telephone and telecommunications services

May be hard to find skilled local workers

Differences in the cost of living and labor costs

12-30
Global IT Management Challenges

Cultural Challenges

Language and cultural interests

Religions and customs

Political philosophies

Cultural training needed before assignments

Work styles and business relationships

12-31
 Transnational Strategies

Companies are moving toward

a transnational strategy

Business depends heavily on information

systems and Internet technologies to help
integrate global business activities

This requires an integrated and

cooperative worldwide IT platform

12-32
Transnational Business/IT Strategies

12-33
 Global Business Drivers

 Business requirements caused by the nature

of the industry and its competitive or
environmental forces

 Examples of global drivers

– Customers
– Products
– Operations
– Resources
– Collaboration

12-34
 Global IT Platforms

Hardware Difficulties

Import
Import
High
Highprices
prices High
Hightariffs
tariffs restrictions
restrictions

Long
Longlead
lead No
Nolocal
local Lack
Lackofof
times
timesfor
for service
serviceor
or “localized”
“localized”
government
government spare
spareparts
parts documentation
documentation
approvals
approvals

12-35
 Global IT Platforms

Software Difficulties

Packages
Packagesdeveloped
developedinin Software
Softwarepublisher
publishermay
may
Europe
Europemay
maybebe refuse
refusetotosupply
supplymarkets
markets
incompatible
incompatiblewith
with that
thatdisregard
disregardsoftware
software
American
AmericanororAsian
Asian licensing
licensingand
andcopyright
copyright
versions
versions agreements
agreements

12-36
International Data Communications Issues

12-37
The Internet as a Global IT Platform

The Internet
An interconnected matrix that reaches tens
of millions of users in over 100 countries
Business environment free of
traditional boundaries and limits

Without incurring massive cost outlays for

telecommunications, companies can…
Expand markets

Reduce communications and distribution costs

Improve profit margins

12-38
 Key Questions for Global Websites

 Will you have to develop a new navigational

logic to accommodate cultural preferences?

 What content will you translate, and what

content will you create from scratch to address
regional competitors or products that differ
from those in the U.S.?

 Should your multilingual effort be an adjunct

to your main site, or will you make it a separate
site, perhaps with a country-specific domain?

12-39
 Key Questions for Global Websites

 What kinds of traditional and new media

advertising will you have to do in each country to
draw traffic to your site?

 Will your site get so many hits that you’ll need to

set up a server in a local country?

 What are the legal ramifications of having your

website targeted at a particular country, such as
laws on competitive behavior, treatment of
children, or privacy?

12-40
Internet Users by World Region

12-41
 Global Data Access Issues

Transborder Data Flows may be seen as violating

A nation’s sovereignty because it avoids

customs duties and regulations
Laws protecting the local
IT industry from competition
Laws protecting local jobs

Privacy legislation

12-42
U.S.-E.U. Data Privacy Requirements

Key Data Privacy Provisions

Noticeof
Notice ofpurpose
purposeand
and Abilityto
Ability toopt
optout
outof
ofthird-
third-
useof
use ofdata
datacollected
collected partydistribution
party distributionof
ofdata
data

Adequatesecurity,
Adequate security,data
data
Accessfor
Access forconsumers
consumers
integrity,and
integrity, and
totheir
to theirinformation
information
enforcementprovisions
enforcement provisions

12-43
 Internet Access in Restrictive Countries

 The struggle between Internet censorship

and openness at the national level relates to
– Controlling the conduits
– Filtering the flows
– Punishing the purveyors

 Most of the world has decided that restricting

Internet access is not a viable policy
– Restricting access also hurts a country’s
opportunities for economic growth and
prosperity
12-44
 Global Government Internet Restrictions

 High Government Access Fees

– Kazakhstan, Kyrgyzstan
 Government Monitored Access
– China, Iran, Saudi Arabia, Azerbaijan,
Uzbekistan
 Government Filtered Access
– Belarus, Cuba, Iraq, Tunisia, Sierra Leone,
Tajikistan, Turkmenistan, Vietnam
 No Public Access Allowed
– Burma, Libya, North Korea
12-45
 Global Systems Development

Key Development Issues

Local versus global system requirements

Getting agreement on system features

Global standardization of data definitions

Disturbances caused by systems
implementation and maintenance activities

12-46
 Global Systems Development

 Key development strategies

– Transform an application used by the home
office or a subsidiary into a global application
– Set up a multinational development team
– Parallel development
– Centers of excellence
– Offshore development

12-47
Internet-Enabled IT Development

12-48