Manageable Trends in IT

1
Manageable Trends in IT

• IS 577
• Chapter 2
• DePaul University - CTI
• John Fisher

2
Class Outline

• Questions from last class?
• Case Study this week Two Airlines
• In the News Enron
• Major points from the chapter
• Break
• In the News

3
Framework for Analysis

• Definition of Terms
• Information Technology
• Information System
• Strategic Goals
• Chief Information Officer
• Strategic Information System

4
Business/Technology Time Line
1950s - 1970s
1980s
1990s
2000s
Information Age Value Added Sales Automation Data
Warehouse
Knowledge Banks Data Retailing Interactive
Feedback Intelligent Agents
Automation Cost Efficiencies Back Room Statistics
Data Processing Cost Efficiencies Front
Office Reporting
Components
Server PC Mainframe Internet
Ubiquitous PC Remote Internet Server/Mainframe
Mainframe Midrange
Mainframe Midrange PC
Platform
Reporting
Discovery/Analysis
Action
Operations
Focus
Operations Business Technology Specialists Needed
Operations Business Analysis
Operations Business Processes Some Technology
Specialists
Operations Back Office Analysis
Staffing Needs
Business Information Drivers
Consolidated Invoice
Information Needs Business Drivers
Automated Invoice
Customer View
5
Historical Summary

• The original idea of IT was efficiency of the
  back office
• This moved into the front office in the late 80s
• Most systems in use today were developed as part
  of a Business Unit Strategy, rather than an
  Enterprise Strategy
• Silo mentality in business created silo mentality
  in systems development
• In the late 80s, people started thinking about
  the Enterprise, but didnt really do much about it

6
Historical Summary

• In the 90s companies are actually starting to do
  something about it.
• Systems are no longer viewed as primarily
  efficient, but are Strategic Weapons for the new
  enterprise
• The Business Unit Silos did not optimize
  shareholder value
• They can help break down the silos and create
  END-TO-END CUSTOMER VALUE
• Information AND Technology are now critical to
  the business
• Information and Technology are separate things,
  its not just IT anymore
• Rise of CIO, CTO, CKO and Knowledge Management
  systems show the impact of Information
• Many companies have discovered that they are in
  the INFORMATION business rather than their old
  idea of business (reference the railroads who
  thought they were in the RAILROAD business rather
  than the TRANSPORTATION business)

7
Manageable Trends in IT

• Strategic Impact
• Integrating changing technology platforms
• Assimilating emerging technologies
• Sourcing policies for the IT value chain
• Applications Development Process
• Partnership of three constituencies

8
Strategic Impact

• Targeting IT-Based Investment

High
Manufacturing gap versus industry leader
Low
High
Low
Marketing gap versus industry leader
9
Strategic Impact

• Categories of Strategic Relevance and Impact

High
Factory
Strategic
Strategic impact of existing IT systems
Turnaround
Support
Low
High
Low
Strategic impact of IT applications under
development
10
Integrating Changing Technology Platforms
Administrative Framework
Justification/ Purpose
Primary Target
Regulated Monopoly
Organization
Productivity/ Efficiency
Era I (1950s - 1970s)
Free Market
Individual
Individual/Group Effectiveness
Era II (1970s - 1980s)
Collaborative
Enterprise and Industry Integration
Value Creation
Era III (1980s - 1990s)
11
Assimilating Emerging Technologies

• Phase 1
• Technology Identification and Investment
• Paste 2
• Technological Learning and Adaptation
• Phase 3
• Rationalization/Management Control
• Phase 4
• Maturity/Widespread Technology Transfer

12
Sourcing Policies for the IT Value Chain

• What is outsourcing?
• What drives the trend?
• Increasing demand for IT services
• Rising costs
• Limited personnel
• Standardized software packages
• Industry databases

13
Sourcing Policies for the IT Value Chain

• Why would a company or CIO outsource?
• Inability to hire staff to meet internal demand
• Hesitancy to make long term commitment
• Risk aversion
• What do you need to add if you outsource?
• Joint project management procedures
• Inter-organization audit processes
• Provisions for divorce or death
• Management controls

14
Sourcing Policies for the IT Value Chain

• Other items to consider
• How does outsourcing fit with strategic
  applications?
• Its important to maintain control of strategic
  systems
• Want to maintain confidentiality/proprietary
  information
• What about ASP?
• New concept - consequence of ERP applications

15
Applications Development Process

• Traditional SDLC
• Design
• Definition of the system functions-technologies
• Construct
• Code and test the system (or buy)
• Implement
• Train users, redesign processes, reorganize
• Operate
• Day-to-day running of the IT-enabled process
• Maintain
• Upgrade technology and adapt system to changing
  requirements
• Other options
• Iterative development
• Prototyping - Protocycling - Etc.
• Internet development process

16
Partnership of Three Constituencies

• IT Management
• Customer Management
• General Management
• Other factors
• Alignment of IT with business strategy
• Let the business leaders lead in IT innovation

17
Class Summary

• Framework for analysis
• Historical Time Line
• Manageable IT Trends
• Strategic Impact
• Changing Technology Platforms
• Emerging Technology Assimilation
• Sourcing Policies
• Application Design Process
• Partnership - Alignment

18
Case Study Two Airlines

• What assumptions did Professor McPherson make
  regarding information technology support at the
  London-based airlines? Do you believe they are
  realistic assumptions for the technology
  environment of the mid 1990s?
• What factors do you think lead to the difference
  between Professor McPhersons expectations and
  the reality of the situation? What alternative
  approaches could have been taken to resolve the
  situation?
• What were the differences between the
  Atlanta-based and the London airlines approach?
  In approaching the problem, did the Atlanta-based
  airline have any special advantages?
• What advice would you give the London-based
  airlines management?