IS 483 Information Systems Management

IS 483Information Systems Management James Nowotarski 10 April 2003

Today’s Objectives • Understand advantages and disadvantages of centralized vs. decentralized organizations • Understand Flamholtz Leadership Effectiveness Framework • Understand key issues in IT human resource management • Understand detailed requirements for Assignments 1-2

Today’s agenda Topic Duration • Recap and update session 1 20 minutes • Quiz 25 minutes • Centralized vs. Decentralized Org’s 35 minutes *** Break 15 minutes • Flamholtz Framework 30 minutes • Assignments 1-2 10 minutes • IT HR Management 60 minutes

Expanding Impact of IT High Business Capability and Performance Impact Transforming Businesses and Industries X X X ReengineeringProcesses X Automating Tasks Time Low IT Capability Growth and Convergence Computing Era: Mainframe Decentralized Distributed Internet Mobile

IT/IS Governance Models • Functions • Organized around similar resources performing similar activities . . . Marketing Finance HR Legal Operations

IT/IS Governance Models Plan and Manage the Enterprise Develop Products and Services Generate Demand Fulfill Demand • Processes • Organized around outputs • “A specific ordering of work activities across time and place with a beginning, an end, and clearly identified inputs and outputs” -- Tom Davenport • Not concerned with the way resources physically structured

IT/IS Governance Models IT functional alignment is organizing IT personnel by primary tasks Director - IS/IT Manager, Systems Development Manager, Application Maintenance Manager, Computer Operations • Pros • Deep skills • Stability • Easier to enforce standards • Cons • High coordination and communication costs

IT/IS Governance Models IT product-line/project organization has personnel devoted to particular user groups or product types Director - IS/IT Manager, Systems Development & Maintenance Manager, Computer Operations Manufacturing Systems Financial Systems Customer Fulfillment Systems

IT/IS Governance Models Pros and Cons of Product-Line/Project Governance Model • Pros • Potentially more responsive • Deep user involvement • IT resources build business skill depth • Cons • Less stable • May sacrifice some technical depth

IT/IS Governance Models A matrix approach organizes personnel by functional and project approach simultaneously Group VP, Finance Group VP, Customer Fulfillment Group VP, Manufacturing Application Dev/Maint Computer Operations Application Dev/Maint Computer Operations Application Dev/Maint Computer Operations Manager, Systems Development & Maintenance Manager, Computer Operations

IT/IS Governance Models Pros and Cons of Matrix Governance Model • Pros • Highly flexible and adaptable • Cross-fertilization of skills • Cons • “Multiple masters” problem • Political difficulties • Communication overhead • Management by consensus

IT/IS Governance Models Reducing the risks of the matrix approach • Clarify roles and matrix principles and methods • Clarify cross-divisional priorities and implement a streamlined forum for resolving conflicts • Clarify cross-divisional working agreements • Address the cultural transitions involved in moving to a matrix form • Create mindset that internal customers are customers

Centralized vs. Decentralized organizational models • General models for organizing IT personnel • Centralized model • Decentralized model • Hybrid or Federal model • Model chosen should fit the organization: • Its organization structure • Its management style • Its geographical distribution • Its channel of communications • Its culture

Centralized vs. Decentralized organizational models The centralized model supports globalization and efficiency Cons Pros Economies of scale Shared standards & infrastructure Critical mass of skills Unresponsive No BU ownership Doesn’t meet every BU’s needs Lacks business depth Purely centralized

Centralized vs. Decentralized organizational models The decentralized model supports flat organizations with responsibility on the “edges” Pros Cons Speed Access to BU content experts Responsive to BU’s needs Redundant functions/costs Proliferation of data, platforms Variable quality Lack of synergy and integration Purely decentralized

Centralized vs. Decentralized organizational models The Federal model results in the optimal balance between centralized and decentralized Federal model Shared vision & leadership Consistent quality Economies of scale Shared standards & infrastructure Critical mass of skills Speed Access to BU content experts Responsive to BU’s needs Redundant functions/costs Proliferation of assets, delivery vehicles, rollouts Variable quality Lack of synergy and integration Unresponsive No BU ownership Doesn’t meet every BU’s needs Lacks content depth Synergy & Integration Mutual trust & commitment Purely decentralized Purely centralized Source: MIT

IT/IS Organizational Models • $4B revenue company • 400 person IT shop, $70M Director - CIO Director, IS Planning Director, Software Engineering Manager, Production • Enterprise Arch • Security • S/W Evaluation • Developers • Development tools • Operations • Help desk • Application support Director, Business Technology Manager, Administration Director, Technical Services • Business analysts • Program managers • Data warehouse • IT HR • IT Finance • Network • PC technicians

IT/IS Organizational Models • $2B IT shop Geography CIO Asia Pac IO Europe IO NA IO LAAM IO eC IO Global Processes & Systems Technology Administrative Applications Solutions Delivery Dev Product IO Human Resources Services Delivery Produce Product IO Purchasing Technology Management Customer Experience IO Finance/ Contract Mgt Business Services IO Legal

CEO IT Organization Design Activity Assignment Shown above is the organization chart for XOX Health Care. The IT function currently reports to the VP-Finance. You have been asked to show where IT should fit in the overall XOX organization. You are also to show how the following IT functions would be organized within the IT organization. Application development Disaster recovery Application maintenance Architecture planning Help desk Vendor management Workstation technical support Advanced technology research & development Data communications network admin Computer operations Voice communications network admin eCommerce initiatives Security Performance Training Risk management Database administration Quality assurance VP Marketing VP Finance COO VP HR VP Legal Situation XOX Health Care is a 10-year old health care provider to small and medium sized businesses. It is growing extremely rapidly: 20022003 Sales $1.7B $3.0B Customers 60K 140K Employees 4000 5000 IT employees 400 500

Survey Results

Flamholtz Leadership Effectiveness Framework • What is it? • How can it be used? Dr. Eric Flamholtz

Management vs. Leadership Management - The art and science of getting things done through other people’s efforts -- Wilbur Cross, Dictionary of Business Terms, 1999 • Leadership - process whereby an individual influences the behavior of people in a way that increases the probability that they will achieve organizational goals • -- E.G. Flamholtz, 1986

Factors Affecting Optimal Leadership Style Optimal leadership style depends on degree of job autonomy and task programmability Potential for Job Autonomy Low High High Directive Interactive Task Programmability Interactive Nondirective Low

Flamholtz Leadership Framework • What are the two types of leadership? • What are the three leadership style categories? • What are the two situational factors that account for 80-90% of the influence on leadership effectiveness in a given situation? • What are the 5 leadership tasks? • What are the two key foci of leadership tasks that should be balanced in effective leaders?

Situational Factors Work Style Effectiveness People Task Flamholtz Leadership Effectiveness Framework Situation determines the style that will most likely be effective

Small group exercise • Take an IT job: • compare/contrast on basis of autonomy and programmability • describe appropriate style and most likely mix of tasks

Assignment #1 • Summary: Use the Flamholtz framework to analyze a personally familiar manager or project leader in an IS organization • - Can look outside IS • - If no work experience, use Sturdivant case • Individual project • Due Thursday, April 17 • Details posted on web site

Assignment #2 • Summary: Produce a summary of 1-2 readings that explain in greater detail one of the 10 topics covered in this course. • - Need to sign-up for a topic • Individual project • Due date depends on topic: • Topics 1-3: May 1, 2003 (Haerr, Nayak) • Topics 4-5: May 8, 2003 (Agarwal, Franchi-Conroy, Tatar) • Topics 6-7: May 15, 2003 (Condon, Engstler, Ho, Khan, Siralitas) • Topics 8-10: May 22, 2003 (Benson, Condon, Engstler, Nayak, Opoku, Rose, Siralitas, Tatar, Wang, Xu)

IT Human Resource Management Components • Hiring • Turnover and Retention • Career Development/Career Path • Training • Compensation • Performance Appraisal

Hiring • Some things change: • Sources • Process • Some things stay the same: • Importance of networking

Retention • Kraft Foods -- Keys to Retention • Relationships (#1 key), part of a community of mutually supportive achievers • Opportunities for skill development (technical, business, leadership) • Try new and challenging things • Valued contribution • Know where you’re going

Retention • “I have learned that a key to retention is providing employees with a line of sight for their career growth” • -- Director of IS, Xerox

Retention Why do people leave? • doesn’t feel right • don’t feel valued • don’t get support needed • no opportunity for advancement • compensation

Retention With raises and bonuses less prevalent, non-compensation-based factors, such as extra vacation time and greater choice of work assignments, play a key role in employee satisfaction

Retention: Counterpoint The top method of employee retention: cold cash. According to the [Meta Group] guide, 54% of respondents offer IT employees an annual year-end bonus, while 44% use sign-on bonuses to attract higher-level IT employees. -- Meta Group, April 2003

Career Development What is the most critical factor in career development?

Training • The “Tarzan” analogy • Virtualization • People must be proactive

Training • “e-learning, e-education, or distance-learning, whatever you want to call it, will someday be the most far-reaching and revolutionary development of the Internet for the world’s population” - Tom Halligan, editor, Internet World, September 2002

Compensation • Forms? • Initial vs. Ongoing • Knowledge is power

Compensation • All is not grim in IT • In fact, Meta says, despite sallow budgets, IT compensation not only will rise, but in some cases it will rise at the expense of non-IT employees. • Three-quarters of survey respondents say their companies will grant higher pay hikes to IT personnel than to other employees, up from two-thirds in 2002. According to Meta, this percentage is zeroing in on the historic high of 2000, when 80% of respondents reported paying higher salaries to IT employees. Meta partially attributes this compensation imbalance to the overall need to retain key IT staff. • -- Meta Group, April 2003

Performance Appraisal • Formal vs. Informal • Grade Inflation • Coaching vs. Determination of raise/promotion

IT Human Resource Management Components • Hiring • Turnover and Retention • Career Development/Career Path • Training • Compensation • Performance Appraisal Which components are most important during periods of low unemployment and staff shortages? During periods of high unemployment and staff surpluses?

IT Human Resource Management Components What are overlaps/interconnects with tasks specified in Flamholtz framework? • IT HRM Components • Hiring • Turnover and Retention • Career Development/Path • Training • Compensation • Performance Appraisal • Tasks from Flamholtz • Work: • Goal emphasis • Work facilitation • People: • Interaction facilitation • Supportive behavior • Personnel development

Topics for April 17 • Distributed architectures and infrastructures • Assignment 1 due • See web site for readings • Quiz on IT HRM and distributed architecture (topics 2-3)

IS 483 Information Systems Management