Chapter

14 Enterprise and Global Management of Information Technology

Learning Objectives

• Identify each of the three components of information technology management • Use examples to illustrate how they might be implemented in a business • Explain how failures in IT management can be reduced by the involvement of business managers in IT planning and management

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Learning Objectives

• Identify several cultural, political, and geo economic challenges that confront managers in the management of global information technologies • Explain the effect on global business/IT strategy of the trend toward a transnational business strategy by international business organizations

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Learning Objectives

• Identify several considerations that affect the choice of IT applications, IT platforms, data access policies, and systems development methods by a global business enterprise • Understand the fundamental concepts of outsourcing and offshoring, as well as the primary reasons for selecting such an approach to IS/IT management

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Business and IT

• As the 21st century unfolds, many companies are transforming themselves into global powerhouses via major investments in • Global e-business • E-commerce • Other IT initiatives • There is a need for business managers and professionals to understand how to manage this vital organizational function

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Components of IT Management

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Managing Information Technology

• Managing the joint development and implementation of business and IT strategies • Use IT to support strategic business priorities • Align IT with strategic business goals • Managing the development and implementation of new business/IT applications and technologies • Information systems development • Managing the IT organization and infrastructure • Hardware, software, databases, networks, and other resources

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Comparing IT Management Approaches

• Insert Figure 14.3 here

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Managing the IT Function

• Three things happened in the past few years • The Internet boom inspired businesses to connect their networks • Companies on on their intranets essential applications without which their businesses could not function • It became apparent that maintaining PCs on a network is very, very expensive • These things created an urgent need for centralization

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Organizing IT

• Early Years • Centralization of computing with large mainframes • Next • Downsizing and moving back to decentralization • Current • Centralized control over the management of IT while serving the strategic needs of business units • Hybrid of centralized and decentralized components

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Avnet Marshall Organizational Components 14-11

Managing Application Development

• Application development management involves • Systems analysis and design • Prototyping • Applications programming • Project management • Quality assurance • System maintenance

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Managing IS Operations

• IS operations management is concerned with the use of hardware, software, network, and personnel resources in data centers • Operational activities that must be managed • Computer system operations • Network management • Production control • Production support

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System Performance Monitors

• Software packages that • Monitor the processing of computer jobs • Help develop a planned schedule of computer operations that can optimize computer system performance • Product detailed statistics that are invaluable for effective planning and control of computing capacity

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Features of System Performance Monitors

• Chargeback Systems • Allocates costs to users based on the information service rendered • Process Control Capabilities • Systems that not only monitor but automatically control computer operations at large data centers

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IT Staff Planning

• Recruiting, training and retaining qualified IS personnel • Evaluating employee job performance and rewarding outstanding performance with salary increases and promotions • • Setting salary and wage levels Designing career paths

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IT Executives

• Chief Information Officer (CIO) • Oversees all uses of information technology in many companies, and brings them into alignment with strategic business goals • Chief Technology Officer (CTO) • In charge of all information technology planning and deployment • Manages the IT platform • Second in command

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Other IT Positions

• • • • E-commerce architect Technical team leader Practice manager Systems analyst

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Technology Management

• All information technologies must be managed as a technology platform for integrating business applications • Both internally or externally focused • The Internet, intranets, electronic commerce and collaboration technologies, CRM software, enterprise resource planning, and supply chain management • Often the primary responsibility of a chief technology officer

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Managing User Services

• Business units that support and manage end user and workgroup computing • Can be done with information centers staffed with user liaison specialists or with Web-enabled intranet help desks • Key roles • Troubleshooting problems • Gathering and communicating information • Coordinating educational efforts • Helping with end user application development

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Outsourcing

• The purchase of goods or services from third-party partners that were previously provided internally

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Outsourcing’s Top Ten

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Why Outsource?

• • • • • Save money – achieve greater ROI Focus on core competencies – organizations can focus on the business that they are in Achieve flexible staffing levels Gain access to global resources Decrease time to market

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Offshoring

• Relocation of an organization’s business processes to a lower cost location • This location is typically overseas • Can be either production or service • Growth of services offshoring is linked to • Availability of large amounts of reliable and affordable communication infrastructure • Digitization of many services

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Failures in IT Management

• IT not used effectively • Computerizing traditional business processes instead of developing innovative e-business processes • IT not used efficiently • Poor response times • Frequent downtimes • Poorly managed application development

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Management Involvement & Governance

• Managerial and end user involvement • Key ingredient to high-quality information system performance • Involve business managers in IT management • Governance structures, such as steering committees

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Sr. Management’s Involvement in IT

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The International Dimension

• Companies around the world are developing new models to operate competitively in a digital economy • These models are structured, yet agile, global, yet local • They concentrate on maximizing the risk adjusted return from both knowledge and technology assets

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Global IT Management Dimensions

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Global IT Management Challenges

• Political challenges • Many countries regulate or prohibit the transfer of data across their national boundaries • Others severely restrict, tax, or prohibit imports of hardware and software • Some have local content laws that specify the portion of the value of a product that must be added in that country if it is to be sold there • Others require a business to spend part of the revenue they earn in a country in that nation’s economy

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Global IT Management Challenges

• Geoeconomic challenges • Physical distances are still a major problem • It may take too long to fly in specialists • It is difficult to communicate in real time across 24 time zones • Many countries do not have good telephone and telecommunications services • It may be hard to find skilled local workers • There can be great differences in the cost of living and labor costs between countries

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Global IT Management Challenges

• Cultural challenges • Languages • Cultural interests • Religions • Customs • Political philosophies • Global IT managers need cultural training before they are sent on assignment • Different work styles and business relationships

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Transnational Strategies

• Companies are moving toward a transnational strategy • Business depends heavily on information systems and Internet technologies to help integrate global business activities • Requires an integrated and cooperative worldwide IT platform

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Transnational Business/IT Strategies

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Global Business Drivers

• Business requirements caused by the nature of the industry and its competitive or environmental forces • Examples of global drivers: • Customers • Products • Operations • Resources • Collaboration

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Global IT Platforms

• Hardware Difficulties • High prices • High tariffs • Import restrictions • Long lead times for government approvals • Lack of local service or spare parts • Lack of documentation tailored to local conditions

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Global IT Platforms

• Software Difficulties • Packages developed in Europe may be incompatible with American or Asian versions • The software publisher may refuse to supply markets that disregard software licensing and copyright agreements

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International Data Communications Issues 14-38

The Internet as a Global IT Platform

• The Internet • An interconnected matrix that reaches tens of millions of users in over 100 countries • Business environment is free of traditional boundaries and limits • Without incurring massive cost outlays for telecommunications, companies can • Expand markets • Reduce communications and distribution costs • Improve profit margins

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Key Questions for Global Websites

• Will you have to develop a new navigational logic to accommodate cultural preferences?

• What content will you translate, and what content will you create from scratch to address regional competitors or products that differ from those in the U.S.?

• Should your multilingual effort be an adjunct to your main site, or will you make it a separate site, perhaps with a country-specific domain?

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Key Questions for Global Websites

• What kinds of traditional and new media advertising will you have to do in each country to draw traffic to your site?

• Will your site get so many hits that you’ll need to set up a server in a local country?

• What are the legal ramifications of having your website targeted at a particular country, such as laws on competitive behavior, treatment of children, or privacy?

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Internet Users by World Region

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Global Data Access Issues

• Transborder Data Flows may be viewed as violating • A nation’s sovereignty because it avoids customs duties and regulations • Laws protecting the local IT industry from competition • Laws protecting local jobs • Privacy legislation

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U.S.-E.U. Data Privacy Requirements

• Key data privacy provisions • Notice of purpose and use of data collected • Ability to opt out of third-party distribution of data • Access for consumers to their information • Adequate security, data integrity, and enforcement provisions

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Internet Access in Restrictive Countries

• The struggle between Internet censorship and openness at the national level revolves around • Controlling the conduits • Filtering the flows • Punishing the purveyors • Most of the world has decided that restricting Internet access is not a viable policy • Restricting access also hurts a country’s opportunities for economic growth and prosperity

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Global Government Internet Restrictions

• High Government Access Fees • Kazakhstan, Kyrgyzstan • Government Monitored Access • China, Iran, Saudi Arabia, Azerbaijan, Ubekistan • Government Filtered Access • Belarus, Cuba, Iraq, Tunisia, Sierra Leone, Tajikistan, Turkmenistan, Vietnam • No Public Access Allowed • Burma, Libya, North Korea

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Global Systems Development

• Key development issues • Conflicts over local versus global system requirements • Trying to agree on common system features • Disturbances caused by systems implementation and maintenance activities • Global standardization of data definitions

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Systems Development Strategies

• Key strategies for global systems development • Transform an application used by the home office or a subsidiary into a global application • Set up a multinational development team • Parallel development • Centers of excellence • Offshore development

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Internet-Enabled IT Development

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