Transcript PPTX)

IT GOVERNANCE
GSI 615
Carmen R. Cintrón Ferrer © 2014-15
IT Governance
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Why?, What?, How?
Employee engagement – Who’s Sinking Your Boat?
 Applicable
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lessons:
Governance
IT Governance
Ethics & Social Responsibility
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3
Management Skills & Tools
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Strategic Management
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Strategy is:
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A means for giving a sense of purpose and direction to the
organization (Neil Ritson, 2013)
A future plan or action at a high level of abstraction
The planning of movements of troops into favorable positions. (The
Art of War, Sun Tzu)
The mediating force or “match” between the organization and the
environment (Hofer and Schendel, 1979)
Determination of the basic long-term goals and objectives of an
enterprise, and the adoption of courses of action and the allocation
of resources necessary for carrying these goals. (Chandler, 1962)
Obtaining a competitive position or series of competitive positions
that lead to superior sustainable financial performance. (Michael
Porter,1991)
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Strategic Management
Schools of Strategy
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Planning School (Andrews & Ansoff, 1965-1971)
Fit the organization with the environment
 Detailed and inflexible planning
 Integrates Product Life Cycle based upon past trends, forecasts and
stable (mature) industries
Positional School (Porter, 1980 & Boston Consulting Group)
 Five forces model, internal value chain and generic strategies (Porter)
 BCG Matrix: Cash Cows, Stars, Dogs and Problem Child
Resource Based School (Grant & Barney, 1991-1998)
 Centered upon internal market
 Incorporates the “Core Competence Approach” (Prahalad & Hamel)
 Inside – Out Approach (based on resources, capabilities and
competencies)
 Ignores external environment and does not consider culture
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Strategic Management
Levels of Strategy
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Corporate (Mission derived):
What business we are in/want to be /should be in
 Future vision and structure
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Business Strategy (Strategic Business Units-SBU):
Which products/services should be developed/offered
 Which markets
 Which customer’s needs
 Cost leadership (price) versus differentiation (quality)
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Functional level Strategy (Departmental Level):
How the functions support corporate business strategies
 At this level are plans instead of strategies
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Strategic Management Process
Hierarchical view
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Mission
Vision
Goals
Objectives
Strategies
Tactics
Actions, policies and rules
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Strategic Management Process
Linear Process View
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Strategy
Resource
Allocation
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Objective
Achieved
Strategic Management Process
Types of Strategy
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Planned/intended
Planned
 Unrealized
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Deliberate
Realized
 Imposed
Deliberate
Emergent
 Emergent
 Opportunistic
Imposed
Opportunistic
Realized
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Strategic Management Process
Macro Environment
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PEST Factors:
 Political
 Economic
 Social
 Technological
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Extended PEST:
 PESTEL
– Adds Environmental / Legal
 STEEPV – Adds Values (Ethics)
 SPENT – Adds Natural Environment
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Why Strategic Management?
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Achieve Goals (Video)
 https://www.youtube.com/watch?v=8cCiqbSJ9fg
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https://www.youtube.com/watch?v=o0U0gwvnhek&list=P
LGRwBJuam6M36Cw8TQJBON2jG9KYEz58Q&index=4\
Be more productive: Science of Productivity
Beat Procrastination :
https://www.youtube.com/watch?v=VA8D1cGW5Qk
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Strategic Management Tools
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Used to ease the processes for Strategic Management:
 SWOT Analysis
 SMART Goals
 Balanced Score Card
 Six Sigma
Choose some or use all
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SWOT Analysis
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Defined initially by Albert S. Humphrey (60’s) at Stanford University
Strategy formulation tool
Internal-External Matrix:
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Recommendations:
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Strengths -Weaknesses
Opportunities – Threats
Use only precise, verifiable statements
Prioritize factors, consider the most significant ones only
Follow on options generated through all stages in the strategy
formulation process
Apply SWOT at the right level, usually at product/service line rather
than at company level
Consider TOWS Matrix (Emphasis is placed upon external factors)
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SWOT Analysis (internal)
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Strengths:
What advantages does your organization have?
 What do you do better than anyone else?
 What do people in your market see as your strengths?
 What is your organization's unique position?
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Weaknesses:
Where can the organization improve?
 What should it avoid?
 What are competitors in your market likely to see as
weaknesses, and/or your weaknesses?
 What factors contribute to losing its market position or
niche?
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SWOT Analysis (External)
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Opportunities:
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What strengths could become good opportunities?
Which weaknesses, if eliminated could become opportunities?
What interesting trends are you aware of?
Can changes in technology (IT innovation) become an opportunity?
Are applicable changes in government policy an opportunity?
Can the organization benefit from changes in social patterns, population
profiles or lifestyle changes?
Threats:
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What obstacles does the organization face?
What are competitors doing?
Is changing technology threatening your position?
Do you have bad debt or cash-flow problems?
Could any of your weaknesses seriously threaten your business?
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SMART Goals
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SMART criteria are commonly attributed to Peter Drucker's management by
objectives concept
George T. Doran, in Management Review (Nov, 1981) published a paper
called There's a S.M.A.R.T. way to write management's goals and objectives
where defines the concept.
SMART Acronym means: (See UVA, Writing S.M.A.R.T. Goals)
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Specific
Measurable
Achievable
Results Focused
Time Bound
Recommendations:
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Choose relevant business goals
Set actionable business goals
Fix the bar at the right height for the goal to be challenging and doable
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Balanced Score Card
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Strategy Performance Management Tool used to keep
track of execution activities by staff and monitor its
consequences.
Mixes Financial and non-financial measures to track
progress (Schneiderman, 1987) later modified by
Kaplan and Norton (1992-96)
Steps proposed:
Translate the Vision into operational goals
 Communicate the Vision and link it to Performance
 Adopt Business Plan and set indexes (measures and targets)
 Adjust Strategy according to Feedback and learning
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Thus, it is known as a Strategy Map
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Six Sigma
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Techniques and tools for process improvement developed by
Motorola in 1986 and made famous by Jack Welch when
integrated into GE’s 1995 successful business strategy
Uses statistical and other methods to:
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improve the quality of process outputs
identifying and removing the causes of defects (errors)
minimizing variability in manufacturing and business processes
A Six Sigma project:
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Follows a defined sequence of steps
Has quantified value targets , for example: reduce process cycle time,
reduce pollution, reduce costs, increase customer satisfaction, increase
profits.
Shares core principles of Total Quality Management (TQM) as
described by Peter Drucker and Tom Peters.
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Strategic Management
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What is Strategic Management (Video)
Strategic Management Process (Video)
 SWOT
Analysis (Video)
 SMART Goals (Video)
 Balanced ScoreCard (Video) – (Harvard Business Review)
 What is Six Sigma (Video)
 Introduction to Six Sigma (Video)
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Strategic Planning of Information Resources (SPIR)
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Strategic Planning of Information Resources
(SPIR) (Based on paper by McLeod, n.d.)
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Emergence of strategic value of information resources (IR)
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Creation of the Chief Information Officer position (CIO)
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Acknowledge that strategic decisions involve IR
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Insertion of the CIO in Strategic Planning Process
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Strategic Planning Premises
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See the organization as a system (Systems Approach)
 Receives resources from the environment
 Transforms those resources
 Directs the transformed resources back to the environment
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Organization as a transformation system of physical and conceptual resources (IR)
(HW, SW, NW, Data/Info, HR)
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Plan for the Information and Personnel flow and contribution in the transformation
process (SPIR)
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Strategic Planning of Information Resources
(SPIR) (Based on paper by McLeod, n.d.)
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SPIR Process:
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Coordination of functional plans by IS (CIO)?
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Insert into Strategic Plan with Marketing, Financial, Transformation,
Human and Information
Determine levels of support from each functional area
Develop functional Strategic Plans Aligned for the organization
Strategic Planning Group – IT Steering Committee
Advantage of the approach – ample participation and buy-in
Centralized Control
Priorities collectively negotiated
Key to success – integration of HR
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Strategic Planning of Information Resources
(SPIR) (Based on paper by Pollalis and Macris, 2008)
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Is the process of deciding how to accomplish an organization’s IS
objectives and align them with the organization’s overall
strategic goals
Centers on IT support of Business Strategies (How to achieve a
particular set of strategic goals)
Requires active participation of managers-users from key
functional areas in a cooperative and collaborative nature
Integrates:
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SWOT & SMART tools in the development of alternative actions and plans;
Evaluates each alternative to determine the best choice (Systems Approach);
Adopts evaluation and control mechanisms to measure effective/efficient
accomplishment of strategic goals; and., (SDLC)
Promotes necessary changes in the SPIR to fine-tune the alignment
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Strategic Planning of Information Resources
(SPIR) (Based on paper by Pollalis and Macris, 2008)
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SPIR Purposes:
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Take full advantage of the existing and potential capabilities of IT
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Facilitate the strategic transformation of an organization due to the IT-based
changes and technologies
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Reshape its traditional views on business competition by creating a more ‘open’
environment
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Utilize IT developments to allow unlimited access to everyone involved
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Convert the tacit knowledge contained in various business processes into explicit
knowledge through externalization
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Develop users-managers’ knowledge and produce new knowledge
(Business Intelligence - BI)
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Strategic Planning of Information Resources
(SPIR Model Process) (Based on paper by Pollalis and Macris, 2008)
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Assessment of Current Position:
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Internal Resources Analysis (S-W)
Environmental Scanning (O-T)
Strategic Alternatives (Tools): Cost benefit, market share,
opportunity cost and improvement analysis
Implementation issues
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Where are we Now?
What factors are key?
Which resources are needed?
Who and How satisfied are our customers?
Failure in concepts and/or implementation
Poor assumptions and/or Data analysis
Detachment of Plans
IT Architecture and an IT Investment Portfolio
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Strategic Planning of Information Resources
(SPIR Model Issues) (Based on paper by Pollalis and Macris, 2008)
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Establish a responsive IT Infrastructure with centralized and
distributed assets under a viable and effective IS
organizational structure
Align IT and Business Strategy
Demonstrate IT Value
Integrate new, existing and emerging technologies into business
Allocate the needed mix of IT skills
Reduce/manage the life cycle cost of ownership (TCO) of IR
Integrate internal and external sources of information
Rely upon IT (technologies/strategies) for Business Architecting
(BA) and/or Business Reengineering
Ethical deployment and use of information technologies
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SPIR Exercise
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Work in teams and structure an IT Steering Committee for each
team
Use the systems approach to analyze the scenario (Refer to
McLeod’s paper)
Apply a SWOT analysis and define SMART Goals (Refer to
Pollanis and Macris paper)
Develop a SPIR for the scenario that:
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Includes an aligned IT and Business Strategy
Demonstrates IT Value
Integrates new, existing and emerging technologies
Allocates the needed mix of IT skills and resources
Does your solution follow an ethical and socially responsible
use of technology?
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