Managing in the Information Age

1
Chapter 1

• Managing in the Information Age

2
Introduction

• The information revolution has been underway for
  close to five decades
• Important information, broadly disseminated,
  radically alters the balance of power among
  individuals, institutions, and governments
• To succeed in this rapidly changing environment,
  managers must remain fluent in new practices and
  techniques

3
How Organizations Use Information

• Organizational Resources
• Money
• Skilled Employees
• Information
• Physical Property
• Time
• The task of managers is to use these resources in
  an optimal way to fulfill an organizations
  mission, that is, resource management

4
Information and People

• In the information-intensive environment, the
  creative combination of people and information
  can be a powerful force in achieving superior
  performance
• Skilled people coupled with advanced information
  technology has revolutionized commerce and
  altered the concept of management

5
IT Impacts on Business

• Advanced technology redistributes knowledge among
  all employees and undermines traditional
  authority that is based on privileged access to
  information
• Rapid, constant, and deep access to institutional
  knowledge will radically transform organizations,
  collapsing levels of management, and flattening
  organizational hierarchy

6
Information Technology Organizations

• On an organizational chart, IT is generally
  classed as a department like marketing or
  manufacturing
• Operationally, IT operates as a business within a
  business, supporting all other units in different
  ways

7
Functions and IT Support

• Product Development
• Manufacturing
• Distribution
• Sales
• Service
• Finance and Accounting
• Administration

• Design Automation
• Materials Logistics
• Warehouse Automation
• Order Entry, Sales Analysis
• Parts Logistics
• Ledger, Planning, AP, AR
• Office Systems, Personnel Records

8
Management Tasks

• Line Responsibilities directly related to
  accomplishing the responsibilities of the
  organization
• Staff Responsibilities - support line functions
  in accomplishing their primary mission
• Senior IT managers have a hybrid role, blending
  both staff and line missions

9
Managing Information Technology

• IT describes an organizations computing and
  communications infrastructure
• IT management includes the tasks of managing the
  infrastructure, standards, and operations making
  technology-related investments and recommending
  appropriate corporate policy

10
Evolution of IT Management

• 1950s to 1960s automation of routine business
  data handling
• 1970s connection of terminals to mainframes
  shifted focus from providing data to creating
  knowledge (Decision Support Systems)

11
Evolution of IT Management

• 1980s Widespread telecommunications and data
  networking moved computing from the mainframe to
  the desktop
• 1990s Internet technologies and applications
  extended the boundaries of the enterprise. New
  business models took hold with e-business and ASPs

12
Types of Information Systems

• Transaction Processing Systems
• Management Information Systems
• Decision Support Systems
• Office Automation Systems
• Expert Systems

13
Internet-Based Business Systems

• Prior to 1990, IT systems focused on supporting
  the value chains within an organization
• With widespread Internet technology, value chain
  management could extend outside an organization
  becoming much more complex and responsive

14
Enterprise Resource Planning

• With digital value chain data, organizations
• Improve responsiveness to customer needs
• Accomplish just-in-time inventory management
• Increase operational efficiency
• Decrease internal costs
• Increase service and product quality

15
IT Management Challenges

• Organizations have high expectations for the
  benefit they will derive from technology and
  software purchases
• Technology brings structural changes to the
  organization
• Unmanaged expectations and ongoing change test
  the personnel management skills of IT managers
• IT managers must be technological leaders and
  superb generalists

16
Controls and Environmental Factors

• Knowledge based organizations must have rigorous
  control mechanisms in place
• Loss of control in highly automated operations
  can give rise to rapid error propagation
• Intra and extranets linking different
  organizations make effective control even more
  challenging

17
Competitive Considerations

• Firms expect Information Technology managers to
  deliver the tools necessary to capture and
  maintain competitive advantage
• IT organizations are directly on their firms
  critical path to success
• Ineffective IT management can hinder the
  performance of the entire organization

18
People and Organizations

• Information Technology changes organizations
• These changes are perceived by many as a threat
  to power, position, or influence
• IT managers must develop good people management
  skills and be attuned to these issues

19
IT Management Issues

• Even though Information Technology is evolving at
  a phenomenal pace, critical issues facing IT
  managers have remained largely unchanged for
  years
• Aligning IT and corporate goals
• Re-engineering business processes
• Defining ITs role and contribution
• Developing an information architecture

20
IT Management Issues

• Three newer issues have arisen as IT has entered
  the Internet age
• Using IT to improve productivity, quality, and
  effectiveness
• Creating or maintaining competitive advantage
  through IT
• Redesigning business processes to better support
  corporate strategy

21
Maturation of IT Management

• IT has moved over the past 4 decades from
  supporting accounting to enabling fully
  integrated data based management systems
• Managers have grown from technical experts to
  sophisticated generalists

22
Managing Mature IT Organizations

• Paul Strassmann has written extensively about
  mature models of IT management. Their elements
  include
• Governance
• Business Plan Alignment
• Process Improvement
• Resource Optimization
• Operating Excellence

23
Information Technology Assimilation

• Over the past several decades, IT has spread from
  isolated, single-dimensioned functions to
  sophisticated, multi-faceted and integrated
  systems
• Shifts have occurred in application development,
  transitioning from largely in-house creations to
  more off the shelf products

24
Critical Success Factors

• Concept developed by John Rockart to help
  executives define their information needs
• Two types monitoring type and building type
• Defined four areas where executives need to
  search for critical success factors
• The industry their firm operates in
• The company itself
• The environment
• Time-dependent organizational areas

25
Critical Success Factors for IT Managers

• Managers need to answer two questions
• What conditions are necessary for IT managers
  success today?
• What tasks must be carried out very well in order
  for managers to succeed?
• The answers to these questions can be grouped
  into four classes

26
Critical Areas for IT Managers

• Business Management Issues
• Strategic and Competitive Issues
• Planning and Implementation Concerns
• Operational Items

27
Business Management Issues

• Obtain agreement with the firms executives on
  how IT will be managed within the firm
• Operate the IT function within the parent
  organizations cultural norms
• Attract and retain highly skilled people
• Practice good people-management skills
• Use IT to improve productivity and financial
  returns

28
Strategic and Competitive Issues

• Develop IT strategies supporting the firms
  strategic goals and objectives
• Provide leadership in technology applications to
  attain competitive advantage for the firm
• Educate the management team about the
  opportunities and challenges involved in
  technology introduction
• Ensure realism in long term expectations

29
Planning and Implementation Concerns

• Develop plans supporting the firms goals and
  objectives
• Provide effective communication channels so that
  plans and variances are widely understood
• Establish partnerships with client IT
  organizations during planning and implementation
• Maintain realism within the organization
  regarding intermediate-term expectations

30
Operational Items

• Provide customer service with high reliability
  and availability
• Deliver service of all kinds on schedule and
  within planned costs
• Respond to unusual customer demands and to
  emergencies
• Maintain management processes that align
  operational expectations with IT capabilities

31
Expectations

• IT managers should supply their firms executives
  with their technical and business input so that
  executives can anticipate and prepare for future
  structural changes well in advance
• They must keep the firms financial and strategic
  goals firmly in mind and champion a realistic,
  practical, and innovative view of the future

32
Expectations

• Expectations held by the firms senior executives
  constitute a yardstick by which its IT managers
  will ultimately be measured
• Superior managers understand the importance of
  expectations and manage them effectively by being
  proactive
• Unskilled managers over promise and raise
  expectations that they are ultimately unable to
  fulfill

33
A Model for Studying IT Management

• The study of information technology management
  concentrates on
• Accomplishing business results
• Attaining efficiency and effectiveness
• Achieving and maintaining competitiveness
• Each of these elements is essential to the firms
  success

34
(No Transcript)
35
Summary

• IT is a powerful force in todays global society
• These technologies are enabling important
  transformations that profoundly affect people,
  organizations, industries, and nations