ITD2031- Managing the Information Technology

1. Chapter1: Introduction Presented by Dr.Mohamed Sammouda ITD2031- Managing the Information Technology

2. Chapter Outline • Evolution of role of IT • Role of IT management versus other business functions • View of IT by IT executives • How to better manage IT resources • Key issues in the management of IT • Importance of successfully managing IT

3. Primary Purpose • IT is important and necessary for a successful organization • Successful management of IT is necessary for competitive advantage

4. What the CIO does Two interrelated elements • Alignment with business strategy • Core IT capabilities Increasingly IT is integrated in the organization - the issue of alignment of business strategy and IT/IS is seen as imperative, but difficult (Chan) The CIO is recognized as a senior manager and board member.

5. Old focus of IT management • Getting the HW & SW working • Getting specific functions done cheaper/faster through automation • Staying out of the limelight – only notice IT when it doesn’t work.

6. New focus of CIO • Supporting strategy • Driving strategy • Developing strategy – two way process with CEO, CFO etc Obviously the old focus of IT function still has to get done, but it is now seen within the overall context of alignment.

7. Feeny & Willcocks (1998): Nine Core IT Capabilities BUSINESS and I.T. VISION Note: Project Management is assumed to be an organization-wide capability. Business Systems Thinking Contract Facilitation Relationship Building Leadership Informed Buying Vendor Development Architecture Planning Making Technology Work Contract Monitoring DESIGN of I.T. ARCHITECTURE DELIVERY of I.T. SERVICES

8. Top 5 IT management concerns • IT and business alignment • IT strategic planning • Security and privacy • Attracting and retraining IT professionals • Measuring the value of IT

9. Understanding alignment • “Strategic alignment means the fit between the priorities and activities of the IS function and the business unit. The goal of strategic alignment is for the IS priorities, capabilities, decisions and actions to support those of the entire business’”. • Others go further, that mature strategic alignment means a two way relationship between IS and organizational strategy

10. Source:Lee and Bai (2003).

11. Strategic Alignment Maturity Levels

12. Understanding strategy (1) According to Porter, strategy is “the creation of a unique and valuable position, involving a different set of activities… different from rivals” (1996:68). It is all about achieving sustained competitive advantage

13. Understanding strategy (2) McFarlan, McKenney and Pyburn (1983) identify three fundamental strategies for competitive advantage: low cost, product differentiation and niche market. Luftman (2004) defines IT strategy as a set of decisions made by IT and functional senior management thateither enables or drives business strategy.

14. 3 Strategies for Competitive Advantage • Cost leadership • Competing with lower costs • Product differentiation • Competing with value • Product focus • Competing by restricting one’s market

15. IT Management Categories • Strategic • Pertinent to long-term attainment of goals and business as a whole • Tactical • Needed to achieve strategic plans and goals to produce changes for success • Operational • Process and actions that must be performed on a day-to-day basis to maintain performance level

16. Financial Human Resource Relationship Management Legal Governance Marketing Negotiating Leadership Additional Skills of IT Managers

17. John Rockart “The limited number of areas in which results, if they are satisfactory, will ensure successful competitive performance for the organization. They are the few key areas where things must go right for the business to flourish. If results in these areas are not adequate, the organization’s efforts for the period will be less than desired.”

20. Historical View of IT • Initially for government/military use • Businesses used for financial automation • Data Processing was key function • Computers were costly and large in size • Not widely used

21. Historical View • Cost decreased • Size decreased • Use of personal computers increased • Business staff and IT staff began to interact • Technology issues increased • Networks, E-mail, and Internet became necessity

22. Role of IT • No longer just serves a business • Integral in business strategy • Impacts every area of business • Complexity increases • How does IT function vs. the entire organization • Responsible for the integration of information

23. Role of IT Today

24. Enabler of E-Business • All aspects of IT are more externally visible • IT Serve as mediator among various functions • Disintermediation • Reintermediation • Hypermediation • Infomediation

25. Disintermediation • Eliminates the middleman • Electronic stock trading • Forces focus on service differentiation

26. Reintermediation • Use of Internet to reassemble buyers and sellers in new ways • Allows negotiation of prices, warranties, quality, shipping • Example includes merging of banking, insurance, and other financial services

27. Hypermediation • Interactions found via Internet transactions • Complete, invisible supply chain to customers

28. Infomediation • Allows technology users to manage large amounts of information • Search engines and portals provide for narrowing searches • IT helps business sift through information for insight and clarity

29. Change Agent • Dynamic Stability • IT supports business in dynamic changes with no change to business processes • Can enable/inhibit incremental and radical changes • Innovation may depend on IT

30. Enabler of Globalization • Expands business presence beyond borders • IT maintenance of Infrastructure and Technologies

31. IT/Business Gap • IT/Business alignment critical • Alignment • Application of IT in an appropriate and timely manner, in harmony with business goals, strategies, and needs • Enabler • Inhibitor

32. Communications Maturity Competency/Value Measure-ment Maturity Governance Maturity Partnership Maturity Scope and Architecture Maturity Skills Maturity Luftman’s 6 Components