Chapter 17 Introduction Final Considerations

1. Chapter 17 IntroductionFinal Considerations

2. Overview • Organizational Response to Business Drivers • Business Success Factors • Reasons Companies Fail When Trying to Use Information Systems to Compete • Information System Goals

3. Organizational Response to Business Drivers IS Significance High Medium Low • New Markets, Opportunities and Competitors • Time, Flexibility and Responsiveness as • Competitive Factors • Product Customization • Process Reengineering, Redefining and TQM • Employee Empowerment and • Cross-functional Teams • Organization Downsizing, Outsourcing • Business Partnering and Alliances Figure 17-1

4. Business Success Factors I/S Role Important Necessary Marginal • Business Leadership • Fitting Pieces into the Big Picture • Organizational Responsiveness and • Resilience • Realizing that Solving Customer • Problems Requires a Team Approach • A Strong Company Culture • Ability and Willingness to Innovate, • Change and Take Risks • Accomplishing All of These Factors • While Maintaining Necessary Balance • Good Communication Throughout the • the Entire Organization Figure 17-2

5. Why Aren’t All Companies Successful in Using IS to Compete? 1. Business Reasons 2. Information Technology Reasons

6. Business Related • Lack of Senior management sponsorship or support • Poor employee acceptance or use • General resistance to change within the organization • Poor alignment of IS with the business strategy • Impatience for results • Vision and direction of the business is not clear • Poor business strategy • Poor timing

7. IT Reasons • Inadequate staffing and/or funding. • Project size was extremely large. • Poor project structure. • Organization lacked experience with IT (user and/or IS organization) • Poor systems performance.

8. Information Systems Goal • To help achieve organizational goals and • objectives. • By providing necessary information. • By providing a communication network. • By accommodating change within the • organization. • By approaching this with a general manager’s • perspective.

9. Conclusions • Understanding the business is no longer a single dimension. • Reasons for using information system must parallel with business needs.

10. Chapter 17 Final Considerations

11. I regard information technology as a precocious teenager: full of energy, irreverent, unpredictable, a source of both joy and heartache--and frequently in need of close supervision. Kent "Oz" Nelson Chairman and CEO United Parcel Service

12. Three Definite Conclusions 1. The way to gain acceptance of information systems by senior management is to focus on using it to gain a competitive advantage. 2. The way to capitalize on this opportunity is thorough a marketing approach. 3. The way to sell anything over time is by emphasizing value.

13. There Has Never Been a Better Time 1. For candor relative to key business and IT issues. 2. For real world success stories versus theory. 3. For business and IS leadership versus techniques and methodologies.

14. Company Mentality Most people buy the premise that managing information and information systems is a key, fundamental aspect of running the business. An issue can be selling the best specific approach.

15. The Sell Cycle • Identify Prospects • Gain Interest • Develop Need • Quantify the Need • Build the Sale • Market the Solution • Gain Commitment

16. Marketing/Sales Process Research / Planning / Enabling Campaigns Program Programs Programs Targeted Opportunities Create/ Capture Demand Define/ Agree on Solution Maintain Customer Gain Commitment Implement Customer Satisfaction and Revenue Delivery Vehicles Products and Services

17. An IS Marketing Therefore List Do an analysis of the major focus and priorities of the CEO. Determine the 3 - 5 things that your customers spend 75% of their time doing. Read the annual report and look for the presence or absence of information systems endorsements. Take a hard look at the marketing job being done by the IS organization. Build a personal network for competitive information sources.

18. IS Competitive Marketing Ten Commandments 1. Solving customer problems has always been a logical and successful marketing strategy. 2. During adverse times, your customers really need you. 3. Eighty percent of winning is showing up! 4. Go to your customers with questions, not answers.

19. 5. Remember that quality products and services are the foundation of competitive success that also includes leadership of skilled employees using advanced methods. 6. A winning approach should provide long term advantages, include benefits for the organization as a whole and not distort the logical balance among major business functions. 7. Successful systems are built on harmony in the work place, discipline in the work place and automation that is consistent with the first two factors. 8. Redefine your business, products or services and business processes based on how this redefines value to customer.

20. 9. The company reward system should endorse and reinforce the major factors cited above. 10. Watch the arrogance and stay current.

21. Organizational Response to Business Drivers IS Significance High Medium Low • New Markets, Opportunities and Competitors • Time, Flexibility and Responsiveness as • Competitive Factors • Product Customization • Process Reengineering, Redefining and TQM • Employee Empowerment and • Cross-functional Teams • Organization Downsizing, Outsourcing • Business Partnering and Alliances Figure 17-1

22. Business Success Factors I/S Role Important Necessary Marginal • Business Leadership • Fitting Pieces into the Big Picture • Organizational Responsiveness and • Resilience • Realizing that Solving Customer • Problems Requires a Team Approach • A Strong Company Culture • Ability and Willingness to Innovate, • Change and Take Risks • Accomplishing All of These Factors • While Maintaining Necessary Balance • Good Communication Throughout the • the Entire Organization Figure 17-2

23. Why Aren’t All Companies Successful in Using IS to Compete? 1. Business Reasons 2. Information Technology Reasons

24. Business Reasons • A lack of senior management sponsorship. • Poor employee acceptance or use. • General resistance to change within the organization. • Poor alignment of Information Systems with business strategies.

25. Business Reasons • Impatient for results--management and employees. • Vision and direction of the business was not clear. • Poor business strategies. • Good vision, strategy and implementation • but bad timing results in no value to the • customer.

26. IT Reasons • Inadequate staffing and/or funding. • Project size was extremely large. • Poor project structure. • Organization lacked experience with IT (user and/or IS organization) • Poor systems performance.

27. 2002 Best Practices Study • The effectiveness (quality and value) and efficiency • (cost and productivity) of the information technology • function across five performance dimensions: • Strategic alignment with the business. • Ability to partner with internal and external customers. • Use of technology. • Organization. • Processes.

28. Study Done By Hackett Benchmarking (www.answerthink.com/hackett) is considered the world's foremost best practices benchmarking firm. With offices in Atlanta, Georgia; Hudson, Ohio; and Frankfurt, Germany, Hackett maintains ongoing benchmark studies in finance, human resources, information technology, procurement, customer contact centers and related areas.

29. Study Conclusions 1. Given that technology now permeates every aspect of business operations, management of the corporate IT infrastructure has evolved into a CEO-level issue. 2. While it is understandable that in today's economy companies want to cut or at least slow the rise of IT costs, it is alarming that most companies persist in viewing IT as a subsidiary support function, rather than a key competitive lever.

30. Study Conclusions 3. Principal improvement strategies utilized by the best- managed companies include simplifying and automating processes from end-to-end and leveraging the maximum business value from technology investments and Web infrastructures.

31. Significant Findings • An 85% increase since 1998 in the number of CIOs who • report directly to the CEO indicates that the linkage between • technology and business is growing tighter. • 2. With a tight link between the overall business strategy and • the company-wide IT strategy, world-class IT organizations • actually spend 17% less per end-user than their average • counterparts ($12,236 versus $10,111) while delivering • projects to business specification 23% more often.

32. Significant Findings 3. While outsourcing has been embraced by companies as a way to keep IT costs in check, for most it has proved to be a break-even proposition, at best. 4. In highly standardized companies, process costs are virtually the same, regardless of whether functions are largely outsourced or completely in-house. 5. For companies with a very low level of standardization, outsourcing sharply increases process costs. 6. Application development costs at companies with low standardization levels rise by 300% when outsourced.

33. Significant Findings 7. Outsourcing adds value only when part of an overall IT strategy aimed at leveraging maximum efficiency and effectiveness from people, processes and technology. 8. Greater centralized control of IT operations delivers significant savings in operational support without necessarily sacrificing performance. 9. World-class companies with centralized IT organizations have 24% lower operations costs while enjoying 21% fewer help-desk calls than their decentralized counterparts.

34. Additional Findings 1. A comparison of staff at average and world-class IT organizations indicates that 163% more professionals and 108% more managers in the latter group have advanced business degrees. 2. Companies are increasingly relying on IT for advice on improving the business with technology, which requires that IT staff add an understanding of business issues to its traditional core competencies.

35. Additional Findings • The consistent use of IT standards enables top-performing • companies to not only trim IT development costs by 41% • (from $661 to $391 annually per end-user), but also reduces • end-user support and training operations costs by 17% (from • $968 to $801 annually per end-user). • 4. As companies adopt new technologies, integrate • acquisitions and operate in a more real-time global • environment, the case for standardization becomes even • stronger.

36. Additional Findings 5. While 100% of organizations with world-class IT process performance have disaster-recovery plans in place, only 77% of average companies maintain such a plan, suggesting the presence of a penny-wise, pound-foolish approach to risk management in the latter group.

37. Some Appropriate Questions 1. Do you really believe that information systems can make your organization more competitive? 2. Is this a technical or an internal marketing challenge? 3. What is the current credibility of the IS organization? 4. What are the basic prerequisites for an organization to use IS to compete?

38. 5. How do you align information systems with the goals and objectives of the business? 6. What is the scope of competitively focused systems? 7. How important is determining the value of IS within an organization? 8. What are the organizational and personnel implications of using IS to compete? 9. Does the use of IS to compete ever get easy? More Questions!

39. Manufacturing System Guidelines 1. Never implement a new system without first simplifying the process. 2. Stay around to help the user articulate your solution to their problem. 3. Automate where appropriate but only if you have senior management commitment. 4. Implement through user ownership of the system.

40. So where are we? In a period of unprecedented opportunity driven by business and technological change made difficult by: • Competition • Complexity • The Pace of the Change

41. Getting A Job Student Services and Job Fairs (Westech) Specific Company Web Pages Job Search Web Pages Personal Networking With People You Know

42. Graduation A very good time to kick tires and test the job market.

43. What are your financial expectations! Don’t give a specific number. Always give a range. “I just want to be sure that I am being treated fairly.”

44. Why him/her and not me! You can go crazy trying to second guess the entire interview and hiring process. Don’t even try but do try to be philosophical about the entire process. If it is meant to be, it will happen. If not, there are other good opportunities.

45. If philosophical about a job • You will do better in the interview process. • You will appear more in control of your efforts to • make sure you find the best fit for yourself. • You will be more inclined to ask tough questions.

46. Company Assessment • Longer term potential of the company. • Your opinion of the people you interviewed with. • The initial job assignment. • The offer. Valued experience for the next two years and the marketability of that experience.

47. Tough Questions • What role does information systems play within the company? • How important is the role of information systems? • How successful have you been in retaining quality information systems personnel in the recent job market? • Has job burn-out been a problem within the IS organization? • What factors play a key role in getting promoted or rewarded within the information systems organization? • Has anyone from Information Systems ever moved into higher level management within the company?

48. Why do they call it Commencement? • 90 day sponge strategy. • Continue to develop your big picture mentality. • Pick two areas of expertise. • Everyone should have a pitch. • Improve oral communications skills like • Ollie Wight did.

49. Commencement!? • Really understand the desired mode of • operation versus the specific tasks of a job. • Develop a personal network. • Develop a reading material profile.

50. What about an MBA? If you are not happy with your current job and more importantly your career path, then a full time MBA program is an excellent fork in the road. It allows you to repot yourself and build a whole new set of personal networking contacts. Realize that Stanford, UC Berkeley and UCLA are three of the five toughest MBA programs in the world to gain acceptance. If you are happy with what and how you are doing, then wait for two years and consider an evening MBA program like 80% of those in those doing this.