Strategic Management of ISIT: Organization and Resources

1
Chapter 8

• Strategic Management of IS/IT Organization and
  Resources

2
Agenda

• Requirements of strategic management
• Roles of the IT function
• IS/IT organization approaches
• Choice of IS/IT organization
• IS/IT organization strategies

3
Requirements of Strategic Management

• IS/IT strategies, policies and plans reflects
  business objectives and strategies
• Identify and explore potential business
  advantages from IS/IT
• Ensure IS/IT strategies are viable in terms of
  business risks
• Establish resources and priorities
• Match IS/IT management and corporate culture
• Monitor business critical IS/IT activities
• Balance between centralization and
  decentralization

4
Roles of the IT Function Iby Zmud

• User services
• Delivery services
• Systems development
• Support center
• Information center
• Architecture management
• Planning
• Technology diffusion
• Data management

5
Roles of the IT Function IIby Zmud

• Technology development
• Research development
• General
• Administration
• Quality assurance

6
IS/IT Organization Approaches

• Total centralized (monopolistic)
• Total decentralized to business functions
• Geographically placed data centers and resources
• Business unit control
• Users
• Activity
• Type of resource network, computers, software,
  data, etc.

7
Choice of IS/IT Organization

• Stage of application portfolio maturity
• Geography of the enterprise
• Synergy benefits of business services, products,
  information
• Business diversity rate of change
• Competitive pressures
• Economics of resource, obtaining and deploying
  skills
• Enterprise structure management culture

8
IS/IT organization strategies

• IT (centralized) or user departments
  (decentralized)
• Mix
• Chief information officer or steering committee

9
IT or User Departments Iby McFarlan and
KcKenney

• IT department
• Integration
• Database
• Feasibility and cost/benefit analysis
• Litter innovation
• IS organization based on technical specialist not
  user need
• High maintenance (80)
• No senior management
• Use frustration with secret growth of user
  computing

10
IT or User Departments IIby McFarlan and
KcKenney

• User department
• Short term problem solving
• Incompatible databases systems
• Lack of quality control
• Hidden maintenance overhead
• Duplication problems
• Little cost/benefit analysis
• Lack of skill technical staff

11
Mix by La Belle and Nyce

• Business unit responsibility
• Application architecture, development, and
  operation
• Central IT group
• Telecommunication
• Hardware software architecture
• Information architecture
• Risk management and security
• Shared services and utilities
• Human resources

12
Chief Information Officer or Steering Committee -
I

• Chief information officer (CIO)
• Setting IS/IT policy strategy
• Goal oriented with business, IS/IT,
  communication competency

13
Chief Information Officer or Steering Committee -
II

• Steering committee
• Executive steering group
• IT planning group
• Service management group
• Technical management group
• Business IS planning group
• Application management group

14
Executive Steering Group Functions

• Aligning business IS/IT strategies
• Establishing IS/IT priority IS/IT resources
• Ensuring strategic applications achieve their
  objectives
• Establishing organizational responsibilities and
  relationships

15
IT Planning Group Functions

• Interpreting IT trends and development for
  organizational business
• Allocating resources according priority
• Monitoring IS/IT performance
• Managing IT, specialists, technical risks

16
Service Management Group Functions

• Meeting business needs with the optimum means
• Monitoring performance against budget/service
  level
• Controlling quality
• Satisfying evolving demand

17
Technology Management Group Functions

• Assessing technology against known and potential
  needs
• Planning and managing infrastructure
• Resolving technical issues/problems
• Support service group

18
Business IS Planning Group Functions

• Identifying business needs
• Interpreting CSFs
• Assessing opportunities, threats, IS
  implications
• Prioritizing, planning, coordinating IS and
  expenditure
• Ensuring the delivery of benefits

19
Application Management Group Functions

• Identifying special needs, changes, benefits,
  resources, and costs of applications for
  investment priority evaluation
• Managing developments usage of IS

20
Points to Remember

• Requirements of strategic management
• Roles of the IT function
• IS/IT organization approaches
• Choice of IS/IT organization
• IS/IT organization strategies

21
Questions

• What is a good IT strategic management for an
  e-business of the banking industry in terms of
  the organizational structure?
• What is a good IT strategic management for an
  e-business of the California State University
  system in terms of the organizational structure?