CH2 PPT Outline - 1 The Top IS Job Chapter 2 Information Systems Management in Practice 8th Edition 2 Todays Lecture lIntroduction lWhere is the IS

CH2 PPT Outline - 1 The Top IS Job Chapter 2 Information...

This preview shows page 1 out of 13 pages.

Unformatted text preview: 10/5/15 1 The Top IS Job Chapter 2 Information Systems Management in Practice 8th Edition 2 Today’s Lecture l Introduction l Where is the IS organization headed? l The escalating benefits of information technology l Traditional functions are being “nibbled away” l New roles are emerging l Toward “IS Lite” 3 Today’s Lecture cont’d l The CIO’s responsibilities l CIO’s roles in 3 eras l Leading § Creating a vision by understanding the business l Governing § Establishing an IS Governance Structure l Investing § Shaping the IT portfolio l Managing § Establishing credibility and fostering change 4 Today’s Lecture cont’d l The Office of the CIO l Whither CIOs l Conclusion l Questions and Exercises l References 5 Introduction l Growing demand for IT managers in the U.S. and worldwide. l Management of IT in past 50 years has drastically changed. l Basic functioning → cost reduction → decision support → inter-organizational supply-chain and “business eco-system” l Onus on top executives to provide IT vision and leadership. 6 Where is the IS organization headed? 7 Escalating Benefits of IT 1 l Questions and Exercises l References 5 Introduction l Growing demand for IT managers in the U.S. and worldwide. l Management of IT in past 50 years has drastically changed. l Basic functioning → cost reduction → decision support → inter-organizational supply-chain and “business eco-system” l Onus on top executives to provide IT vision and leadership. 6 Where is the IS organization headed? 7 Escalating Benefits of IT l Changing technology and evolving IS role since 1950s. (a parallel process) l “Waves of Innovation”: l Wave 1: Reducing costs l Wave 2: Leveraging investments (continuous improvement) l Wave 3: Enhancing products and services l Wave 4: Enhancing executive decision-making l Wave 5: Reaching the consumer l Wave 6 (new): Leveraging partnerships through supply chain management or other forms of collaboration 8 Escalating Benefits of IT (cont’d) 9 10/5/15 The SABRE System (American Airlines) l Case example of “Waves of Innovation” l Evolution: Handwritten reservation system (1950s) to Webbased system (2000s). l Waves 1 and 2 (1960s) l SABRE (CRS) built to reduce costs of making airline seat reservations. l ROI on staff expenditure. l Wave 3 (1970s) l System enhanced to span organizational boundary for travel agents (provide direct access to CRS) 10 The SABRE System (American Airlines) cont’d l Wave 4 (late 1980s) l Revenue Management System (provide decision support to managers) under SABRE Airline Solutions (new division). l Wave 5 (1990s) l System extended to provide direct Web access to customers (CRS, flight information, movie etc.) l Wave 6 (2000s) l Sabre (small letters) spun off from AMR in 2000, leveraged partnerships and technology. 2 travel agents 10 (provide direct access to CRS) The SABRE System (American Airlines) cont’d l Wave 4 (late 1980s) l Revenue Management System (provide decision support to managers) under SABRE Airline Solutions (new division). l Wave 5 (1990s) l System extended to provide direct Web access to customers (CRS, flight information, movie etc.) l Wave 6 (2000s) l Sabre (small letters) spun off from AMR in 2000, leveraged partnerships and technology. 11 The SABRE System (American Airlines) cont’d l Throughout waves of innovation, strong IS involvement was crucial. l Evolving with changes in technology l From money-making to extending organizational boundaries to spinning off. l So what is the function of the IS organization? 12 Traditional Functions are Being Nibbled Away l Traditional set of responsibilities for IS l Managing operations of data centers, local and remote systems and networks l Managing corporate data and legacy systems l Performing system analysis and design and constructing new systems l Planning and integration of systems l Identifying opportunities for new systems 13 Traditional Functions are Being Nibbled Away cont’d l Trends that are moving traditional roles out of IS: l Distributed Systems l Migration of software applications to user areas l Ever more knowledgable users l Better application packages l Systems development to integration l Outsourcing l Based on fiscal and managerial considerations 14 Traditional Functions are Being Nibbled Away cont’d 15 New Roles are Emerging l IS involves a cluster of functions: l Run operations l Develop systems l Develop architecture l Identify business requirements 10/5/15 3 l Better application packages l Systems development to integration l Outsourcing l Based on fiscal and managerial considerations 14 Traditional Functions are Being Nibbled Away cont’d 15 New Roles are Emerging l IS involves a cluster of functions: l Run operations l Develop systems l Develop architecture l Identify business requirements l Create IT-enabled innovations 16 New Roles are Emerging cont’d l Different set of skills and management strategy needed for each function: l Maximize efficiencies of IT operations l Better allocation of IT personnel time l Prioritize resources to demonstrate usefulness of new software projects l IT-enabled business innovations 17 New Roles are Emerging cont’d 18 Toward IS Lite l IS started “centralized” and then evolved into “federal” model. l Some things (e.g standards, operations) centralized l Others (e.g. applications development) dispersed to best meet local needs. l Solution: shift attention from roles to processes l IS Lite: managing three overall processes l Driving innovation (dispersed) l Managing change (dispersed) l Supporting infrastructure (centralized) 19 Toward IS Lite 20 LifeScan l Case example: The “Federal” Model l Johnson and Johnson subsidiary l New CIO with business-IS alignment agenda l 3-stage framework that is focused on execution and performance measurement (value, on time, budget) 21 LifeScan cont’d l Strong project management, not allowing scope creep (business value, on time, within budget) l Emphasis on staff with leadership and brokering skills 10/5/15 4 20 LifeScan l Case example: The “Federal” Model l Johnson and Johnson subsidiary l New CIO with business-IS alignment agenda l 3-stage framework that is focused on execution and performance measurement (value, on time, budget) 21 LifeScan cont’d l Strong project management, not allowing scope creep (business value, on time, within budget) l Emphasis on staff with leadership and brokering skills l Outsourcing (Tata, J&J outsourcing agreements) l Adopt J&J quality-driven culture into IS processes and working closely with business units for alignment every step of the way. l Centralization of policies, procedures etc. l All IS projects business led and locally owned by business units. 22 The CIO’s Responsibilities l Evolution of CIO’s job emphasis over last 20 years l Almost like a “bell curve” l 80s: Chief architect (strategic use of IT) l 90s: addressing business issues (more than technology manager) l Late 90s to early 2000s (forefront role) l Mid 2000s onwards: slide back toward back seat--more responsibilities, lots of justification and less $ 23 CIO Roles in Three Eras 24 CIO Roles in Three Eras l The Mainframe Era l Predominated 1960s – early ’80s l Role of DP / IS manager = operational manager of a specialist function l Distributed Era l In the ’80s as PCs become commonplace l LANs and WANs linking computers l Took on 4 more roles: l Organizational designer l Technology advisor l Technology architect l Informed buyer 25 CIO Roles in Three Eras l The Web Era l Started in the mid-1990s for some 10/5/15 5 l Distributed Era l In the ’80s as PCs become commonplace l LANs and WANs linking computers l Took on 4 more roles: l Organizational designer l Technology advisor l Technology architect l Informed buyer 25 CIO Roles in Three Eras l The Web Era l Started in the mid-1990s for some l Arose from the emergence of the Internet (especially WWW) as a business tool l Era is still in “infancy” but add to the CIOs job, the role of business visionary l Relationship between CEO and CIO vary along a wide spectrum. 26 CIO Roles Today l Leading l Creating vision by understanding the business l Governing l Establishing an IS governance structure l Investing l Shaping the IT portfolio l Managing l Establishing credibility, managing IT functions, and fostering change 27 Leading: Creating vision by understanding the business l Understanding the business l Encourage project teams to study the marketplace l Concentrate on lines of business l Sponsor weekly briefings l Attend industry meetings with line executives l Read industry publications l Hold informal listening sessions l Partner with a line executive 28 Leading: Creating vision by understanding the business 29 Leading: Creating vision by understanding the business l Creating a vision of the future and selling it l CIO must be proactive and not simply reactive l A leader not a follower l What is a vision? l Statement of perceived future l Why develop a vision? 10/5/15 6 l Read industry publications l Hold informal listening sessions l Partner with a line executive 28 Leading: Creating vision by understanding the business 29 Leading: Creating vision by understanding the business l Creating a vision of the future and selling it l CIO must be proactive and not simply reactive l A leader not a follower l What is a vision? l Statement of perceived future l Why develop a vision? l A vision of a desirable future can provide stability when it sets a direction for an organization l Selling the vision 30 British Petroleum (BP) l Case example of creating a vision of the future and selling it l 150 business units in 100 countries l Each with own balance sheet and performance criteria l Need to reconcile business unit independence with overarching HQ strategy (“speed matters”) l Strong core values and operational excellence l How can IT be a value-add? 31 British Petroleum (BP) l John Leggate’s “Digital Business” vision. l Technology provider to strategy-creation role l Strategy, architecture, differentiated services based on business streams (processes) l Living on the Web l Socializing technical directions (adoption) l Going forward: Foster learning and focus on explanation (assimilation) 32 Leading: Creating vision by understanding the business l Creating a vision of the future and selling it (cont’d) l Encouraging champions of IT projects l “Boundary-spanner-in-practice” l Typically someone with authority l Need information l Need resources l Need support 33 Aetna Life and Casualty l Case example of creating a vision of the future and selling it l Vision: “breakthrough technologies” l Sought out business champions 10/5/15 7 l Creating a vision of the future and selling it (cont’d) l Encouraging champions of IT projects l “Boundary-spanner-in-practice” l Typically someone with authority l Need information l Need resources l Need support 33 Aetna Life and Casualty l Case example of creating a vision of the future and selling it l Vision: “breakthrough technologies” l Sought out business champions l Pilot studies l Feedback for new technologies experimentation l Steering Committees l Challenges l Adoption (attention and use) l Value (beyond piecemeal payoffs) 34 Governing: Establishing an IS governance structure l Definition: IS Governance l “The assignment of decision rights and the accountability framework to encourage behavior in the use of IT.” (Weill & Woodham, 2002) l Governance versus management l Governance is about deciding who makes decisions. l Management is about making decisions once decision rights have been assigned. 35 Governing: Establishing an IS governance structure l Importance of corporate IT governance l Large and diverse IT assets l Striking a balance between global and local needs l IT portfolio (in sync with business needs) l Assigning decision rights l Governance style l Definition: who has a decision right and input right. l Six governance styles 36 Governing: Establishing an IS governance structure 37 Duke Energy International l Case example of IS governance l Diverse portfolio of natural gas and electric supply, delivery and trading businesses. l CIO: “When am I free to decide on my own versus when should I involve others?” l I involve others if the consequences of my actions will come to bear on those others. 10/5/15 8 l Definition: who has a decision right and input right. l Six governance styles 36 Governing: Establishing an IS governance structure 37 Duke Energy International l Case example of IS governance l Diverse portfolio of natural gas and electric supply, delivery and trading businesses. l CIO: “When am I free to decide on my own versus when should I involve others?” l I involve others if the consequences of my actions will come to bear on those others. l I do not involve others if the consequences of my actions will come to bear just on me. l I inform others when the consequences of my actions will be of benefit to others. 38 Investing: Shaping the IT Portfolio l Diminishing marginal increase today but still preposterous amount of IT investments. l Two perspectives in IT investment: l Strategic view l What to invest in? l Tactical view l How to make investment decisions? 39 Investing: Shaping the IT Portfolio l A Strategic view of making IT investments l McKinsey Global Institute study of “new economy” l IT, competition, innovation and productivity in virtuous circle l Targeting IT investments l Prioritizing on “levers that matter” = greatest productivity l Timing of IT investments l Based on company needs and goals 40 Investing: Shaping the IT Portfolio cont’d 41 Investing: Shaping the IT Portfolio l Sequencing of IT investments l Wal-mart versus Kmart case example l Complementing IT investments l “The whole is not the sum of its parts” (synergy) l Complementarities between management practices, business processes and technology 42 Wal-mart versus Kmart l Case example: Sequencing and timing IT investments l Wal-mart 10/5/15 9 41 Investing: Shaping the IT Portfolio l Sequencing of IT investments l Wal-mart versus Kmart case example l Complementing IT investments l “The whole is not the sum of its parts” (synergy) l Complementarities between management practices, business processes and technology 42 Wal-mart versus Kmart l Case example: Sequencing and timing IT investments l Wal-mart l Step 1: installed systems to automate the flow of products in its internal supply chain l Step 2: turned outward to suppliers, coordinating its own operations with theirs l Step 3: turned to customers to better plan its merchandising mix and replenishment l Step 4: data warehouse 43 Wal-mart versus Kmart l Kmart l Mistake: used IT to target its marketing promotions versus investing in supply chain l Result: increase in demand from successful promotions could not be met due to problems getting the products into stores in a timely fashion. l Result: lost sales and revenues 44 Investing: Shaping the IT Porfolio cont’d l A tactical view of making IT investments l Portfolio (holistic) approach to deciding on how to make IT investment decisions. l Numerous approaches to prioritizing l Business Scorecards l 80-20 Principle l Cost-Benefit analysis (CBA) l Net Present Value (NPV) 45 AXA Financial l Case example of tactical view of making IT investments l French global financial services organization with 140,000 employees and managing $795 billion in assets. l New governance methodology (beyond IT) l Economics-informed investments (precludes emotional attachment or other non-financial factors) l Modeled after fund management l Governance committee involve all C-level executives 10/5/15 10 l Net Present Value (NPV) 45 AXA Financial l Case example of tactical view of making IT investments l French global financial services organization with 140,000 employees and managing $795 billion in assets. l New governance methodology (beyond IT) l Economics-informed investments (precludes emotional attachment or other non-financial factors) l Modeled after fund management l Governance committee involve all C-level executives 46 Investing: Shaping the IT Portfolio cont’d l Benefits from Discussions l Categorizing projects for comparisons l Address project risks l Prioritize quarterly and apportion your budget accordingly l Consistency (team decision-making) 47 Managing: Establishing Credibility and Fostering Change l CIOs must first establish credibility in IS before change can come about. l Establishing Credibility l Focus first and foremost on the “today” even before talking about the “tomorrow” l Deliver value-added, quality services l First impression matters 48 Managing: Establishing Credibility and Fostering Change l Fostering Change l Technical aspects only half the battle l Emphasis on change management l Changing the way people work, bringing it to the next level l Disruptive to current work practices § Leads to resistance l Methodologies to implement IT-enabled change 49 Managing: Establishing Credibility and Fostering Change l Working across organizational lines l CIOs now find that systems they implement affect people outside their firm boundaries l Arms-length to more cordial relationship with partners (suppliers and customers) l Change need buy-in from these external stakeholders 50 REXAM l Case example of working across organizational lines l One of the world’s top 5 consumer packaging companies and the world’s top drink can maker 10/5/15 11 49 Managing: Establishing Credibility and Fostering Change l Working across organizational lines l CIOs now find that systems they implement affect people outside their firm boundaries l Arms-length to more cordial relationship with partners (suppliers and customers) l Change need buy-in from these external stakeholders 50 REXAM l Case example of working across organizational lines l One of the world’s top 5 consumer packaging companies and the world’s top drink can maker l Rethinking interactions with customers (B2B) l Leverage Internet to deliver “exceptional service” l “Knock their socks off” l Result: cash flow improvements, barriers to switching, profit increase 51 REXAM cont’d l CIO’s role l External and business-oriented § Convincing existing customers and business development l Steering Committee’s role l Firm-wide commitment from C-level executives for expanded e-business initiatives envisioned by CIO. l Online catalogue 52 The Office of the CIO l Chief Information Officer (CIO) l Top management, customers, suppliers l Chief Technology Officer (CTO) l IT planning, architecture, new technologies l Chief Operations Officer (COO) l Daily IS operations l Chief Project Officer (CPO) l Projects management 53 Conclusion: Recap l Why does the IS organization exist? l Constant factor in parallel process of technological changes and IS evolution l What is the role of the IS organization? l Changing across the timeline toward IS Lite l CIO’s job l How does the IS organization perform its job l Strategies 10/5/15 54 12 53 Conclusion: Recap l Why does the IS organization exist? l Constant factor in parallel process of technological changes and IS evolution l What is the role of the IS organization? l Changing across the timeline toward IS Lite l CIO’s job l How does the IS organization perform its job l Strategies 10/5/15 54 13 ...
View Full Document

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern

Ask Expert Tutors You can ask 0 bonus questions You can ask 0 questions (0 expire soon) You can ask 0 questions (will expire )
Answers in as fast as 15 minutes