Strategic Management of IS/IT

1. Strategic Management of IS/IT Organization and Resources Chapter 8

2. Context of This Session External Business Environment Internal Business Environment Internal IS/IT environment Current Applications Portfolio Strategic IS/IT Planning Process External IS/IT Environment Planning Approaches, Tools and Techniques We are here … IS/IT Management Strategy Business IS Strategies IT Strategy Applications Portfolio Model & Matrices

3. Strategic Management: Assumption & Definition (Igor Ansoff , 87) • Asumsi: • Contingency: tidak ada satu solusi tunggal yang berlaku universal, maka setiap organisasi akan mempunyai solusi yang spesifik, khusus, dan berbeda dengan organisasi lainnya. • Environmental Dependence:solusi yang dihadapi setiap institusi tergantung kepada lingkungan dimana institusi tersebut berada. • Requisite Variety: untuk memperoleh suatu keberhasilan yang optimal, maka diperlukan suatu strategy yang agresif yang dapat mengatasi turbulensi lingkungannya. • Strategy-Capability-Performance: kinerja institusi akan optimal apabila Strategynya sesuai dengan lingkungan. • Multi-component Capability: tidak ada satu komponen tunggal yang paling berpengaruh, baik manajer, struktur, budaya, dan system dalam institusi. Semuanya akan menentukaan sukses tidaknya sebuah institusi. • Strategic Management terdiri dari langkah-langkah pemilihan dan penentuan strategi, pembangunan kapabilitas institusi, implementasi strategi dan kapabilitas institusi tersebut.

4. Aspect of IS/IT Management • Managing the information and data resource of the organization to ensure that its business value is fully exploited and protected • Managing applications as investments, development projects and operational systems from the establishment of requirements to successful long-term use in the business • Managing information technology: introduction, development, utilization, replacement • Organizational management of IS/IT: related to resources, activities, administration.

5. Fokus pada pembuatan keputusan tentang strategi yang optimal Suatu proses analitik Fokus kepada variabel-variabel bisnis, ekonomi dan teknologi Fokus kepada hasil dari penerapan strategi Suatu proses aksi Fokusnya diperluas sehingga mencakup juga variabel-variabel psikologi, sosiologi dan politik Strategic Planning Vs. Strategic Management

8. The Impact of IS/IT Strategy Failure • The systems that are developed and implemented do not meet overall business needs; • Resources are misused; • Strategy formulation is essentially a retrofitting process, producing enormous rework.

9. Any or all three can occur. The cause can usually be attributed to three main reasons: • Lack of alignment between the business and IS strategies; • Uncoordinated management of IS demand and IT supply; • Over-centralization or decentralization of responsibility

11. Organization Strategies • Written-formal: the approach is very structured and procedural • Applied to key operational and support • Personal-formal: the approach is partially structured which relies on individuals reaching agreement within a formally constituted group process • Personal-informal: no formal planning relationship exists between IS, senior and line managers

14. The Roles of IT Division • User services: delivery services, systems development, support center, information center • Architecture management: planning, technology diffusion, data management • Technology development: research and development • General: administration, quality assurance

15. Imperatives for the Management of IS/IT • Achieve two-way alignment between the business and IS/IT strategy; • Develop effective relationships with line management; • Deliver and implement new systems; • Build and manage IT infrastructure; • Re-skill the IS function with new competencies and knowledge; • Manage vendor partnerships; • Redesign and manage the federal IS organization

18. Four Components Reflects The Strategic Role For IT • The cost centre has an operational focus that minimizes risks with an emphasis on operational efficiency. Cost-centre activities are good candidates for outsourcing. • The service centre, although still minimizing risk, aims to create an IT-enabled business capability to support current strategies. • The investment centre has a long-term focus and aims to create new IT-based business capabilities. It seeks to maximize business opportunity from IT resources. • The profit centre is designed to deliver IT services to the external marketplace for incremental revenue and for gaining valuable experience in becoming a world-class IS function.

19. Five Key Competencies • IT leadership, which includes IT envisioning, fusing IT strategy with business strategy, and managing IS resources. • Architecture development, which is concerned with developing a blueprint for the overall IT technical design. • Business enhancement, which includes business process analysis and design, project management and managing relationships with users. • Technology advancement, which is application design and development. • Vendor management, which includes managing and developing relationships with vendors and suppliers, negotiating and monitoring contracts and purchasing.

21. Location of IS/IT Decision Making • Content—the decision areas that are being managed. Included here are decision areas about the whole realm of IS demand and IT supply—areas • Authority—the individuals or groups that have the power actually to make decisions in the various areas • Responsibilities—the individuals or bodies responsible for day-to-day execution in decision areas. • Coordination—essentially, the mechanisms and processes for ensuring coherence across all decision areas. • Policies—statements of principles or actions defining acceptable behaviour. • Control—outlining the approaches to policing decisions, ensuring conformance across the organization

23. Four Distinct Contract Types Or Sourcing Strategy

24. Four Distinct Contract Types Or Sourcing Strategy • Contract out strategy—with this strategy the vendor is responsible for delivering the results of IT activity. • Buy-in strategy—this strategy sees the organization buying in resources from the external market, often to meet a temporary requirement. • Preferred contractor strategy—with this approach, organizations contract long term with a vendor to reduce risk, with the vendor responsible for the management and delivery of an IT activity or service. • Preferred supplier strategy—this strategy takes the buy-in approach further, with an organization seeking to develop a long-term close relationship with a vendor in order to access its resources for on going IT activities.

26. Five Roles Critical to Success • Leadership; • Visionary; • Relationship builder; • Politician; • Deliverer.

29. Establishing IS/IT Committees • Ensuring top management involvement in IS planning; • Ensuring the fit between IS and business strategy; • Improving communication with top and middle management; • Changing user attitudes to IT.

33. The Executive Steering Group • This group is as critical to the whole structure as the keystone to an arch. • Its membership should reflect the dominant coalition, which implies they are: • Able to recognize the potential of IS/IT in terms of the business strategy; • Keen to exploit IS/IT as a business weapon; • Able to influence the management of systems in the area of the business they represent; • Have the confidence of the executive to whom they report

37. Strategy: the ability to identify and evaluate the implications of IT-based opportunities as an integral part of business strategy formulation and define the role of IS/IT in the organization. • Define the IS contribution: the ability to translate the business strategy into processes, information and systems investments and change plans that match the business priorities (i.E. The IS strategy). • Define the IT capability: the ability to translate the business strategy into long-term information architectures, technology infrastructure and resourcing plans that enable the implementation of the strategy (i.E. The IT strategy). • Exploitation: the ability to maximize the benefits realized from the implementation of IS/IT investments through effective use of information, applications and it services. • Deliver solutions: the ability to deploy resources to develop, implement and operate IS/IT business solutions that exploit the capabilities of the technology. • Supply: the ability to create and maintain an appropriate and adaptable information, technology and application supply chain and resource capacity.

42. Four Solutions To The Development Of The Requisite Skills • Training new recruits from school or university, which is expensive. Also, people early in their careers are more likely to move on within three to five years. • Recruiting experienced staff from other organizations, which can be risky. • Training existing non-IS people, especially in application skills in user areas, which may require the development of new job roles. • Using external resources, either on a short-term basis to overcome peak loads, etc. Or longer term to provide the organization with particular skills.

43. Positioning IS/IT Resources in the Organization • Decentralize resources: IS/IT resources under the control of the business units • Disperse resources:resources are dispersed into functions within the unit • Convert IT to a profit center: this is really a service bureau mentality • Set up a separate business entity: transforms profit center into a business in its own right.

44. The Culture Gap • Lack of shared values • No agreed strategy • Failed projects and systems

46. End of Presentation