Transcript 05 - Managing Operations.ppt

MANAGING OPERATIONS
Andreas Rio, M.Eng.
Managing Operation
The three major operational issues discussed:
 outsourcing information systems functions
 information security
 planning for business continuity
Introduction
Due to mergers, the Internet, e-commerce, and the
September 11, 2001, the subject of computer
operations has been receiving a lot of attention.
 Systems operations are important because, if they
are not professionally run (and backed up
properly), a computer or network crash could shut
down a company’s business for some period of
time.

Introduction
The main change in operations is a shift in viewpoint.
 Traditionally, managing operations has meant
managing inward—managing one’s own operations
staff, including those who work in the data center,
data administration, network administration, and
systems programming.
 Today, it is just as likely to mean managing outward
—managing the company’s relationships with IT
external service providers(ESPs) who have taken over
day-to-day operational work.
Introductions
Operations
Why Talk About Operations?
 Because it involves so much money, it’s complex, and
it’s important to business operations.
 57% of budget is for operations
 33% of budget is for new development
 10% is administration and training.
Operations
Solving Operational Problems
 Problems:
 Response
time is slow, network are down, data is not
available or data is wrong.

The best solution is to:
 continually
document and measure what you are doing,
 uncover the real problems, not just the apparent ones,
and then
 set the standards.
Operations
Operational Measures
 The measures are internal (what IS needs to know) and external (what
customers see).
 Problems reported by the external measures can generally be explained
by deviations in the internal measures.
 Internal measures:








computer usage as a percentage of capacity
Availability of mainline system
Disk storage utilized
Job queue length
Number of job run
Age of applications
Number of unsolved problems.
Those measures have impact on user satisfaction.
Operations
The Importance of Good Management
 IS management needs to create a corporate culture
that recognizes and values good operations.
 The skills required of an operations manager are
similar to those needed in a factory.
 Scheduling
work
 Monitor performance
 Respond quickly to production breakdown.

CIOs need to be concerned about operations.
What’s new in operations?




Companies Have Cleaned Their Operational
House
More Operations Managers are Managing
Outward
Operations are Being Simplified
Certain Operations are Being Offloaded
What’s new in operations?
Companies Have Cleaned Their Operational House
 Y2K and the Internet forced companies to “clean
house”in their data and network center operations.
 The resulting changes have led to far better
operational structures because management took
the time to define the rules for operations and put
better policies and procedures in place.
 Had they not gone through Y2K, most companies
would not be operationally prepared for the
Internet.
What’s new in operations?
More Operations Managers are Managing
Outward–
 A growing number of companies are turning to a
third party to run their data centers.
 Even for companies keeping their own data centers,
an increasing number are taking advantage of
operational services provided by third parties,
especially for e-business operations.
What’s new in operations?
Operations are Being Simplified–
 Operations are frequently simplified by centralizing
programs –via server-based computing –rather than
distributing them on PCs.
What’s new in operations?
Certain Operations are Being Offloaded
 Web “event management” means hosting a realtime event on the Web. When successful, these
“Webcasts” lead to huge spikes in Web site hits.
 To avoid being swamped and having the Web site
crash, companies offload the operational aspects of
these events to third parties that specialize in
hosting such activities.
What’s new in operations?
CASE EXAMPLE: Microsoft


When Microsoft officially announced a new version of
Windows, it did so not only at a major launch event in
San Francisco, California, but also via a public Internet
broadcast, and a private Webcast to 6,000 original
equipment manufacturer (OEM) system builders in 83
countries.
That private Webcast was handled by a company that
has “edge servers” in 66 countries, giving users in farflung locations fast downloads of Web content and
streaming media.
Outsourcing Information System Function




Outsourcing means turning over a firm’s computer
operations, network operations, or other IT function to a
provider for a specified time—generally, at least a few
years.
Outsourcing descended on IS departments as a followon to the merger and acquisition activities in the 1980s.
Companies faced global competition, so they had to
focus on their core competencies, and do some
restructuring.
Outsourcing is part of the drive for focus and value,
and it is not solely an IT issue.
Outsourcing Information System Function




Relationships have expanded from buying professional
services, to buying products and transactions, to
integrating systems, to outsourcing –the most bundled
approach to contracting.
IS organization bought professional service, such as
planning (or consulting), building or maintaining
applications, building or maintaining networks, and
training.
They bought products, that may or may not include
training.
System integration is project based, while outsourcing is
time based.
Outsourcing Information System Function
Outsourcing Information System Function
In this evolution:
 CIOs have increasingly lost control,
 vendors take on more risks,
 margins increase, and
 the importance of choosing the right provider
becomes more important.
Outsourcing Information System Function
IT outsourcing essentially began in 1989.
 Company wanted to remove the huge IT investment
and shift those fixed cost to variable cost.
 Problems:
 “us
versus them” mindset
 Culture clashed
Outsourcing Information System Function
Today, the field also includes
 transitional outsourcing (helping a company move to
a new IT platform),
 best of breed outsourcing (outsourcing each IT
function to a best-of-breed provider),
 offshore outsourcing (to providers in India and
elsewhere around the world),
Outsourcing Information System Function



shared services (consolidating back-office function
into one center in-house),
business process outsourcing (outsourcing a process
with a large IT underpinning), and
e-business outsourcing (outsourcing the infrastructure
supporting e-business).
Outsourcing Spectrum
Case Studies
Kodak was the 1st major company to outsource its IS dept
 It put in place a robust organizational structure:



a management board (including senior management from both
companies and focuses on strategic issues),
advisory council (handling technical and operational issues by
focusing on what Kodak wants, not how the services are
delivered),
supplier and alliance management group (managing all longerterm outsourcing relationships and other contracts with large IT
suppliers),
Case Studies
Kodak was the 1st major company to outsource its IS dept
 It put in place a robust organizational structure:
relationship (the focal point of Kodak’s relationship with one
provider),
 working groups (to facilitate changes in processes,
promulgate standards),
 achieve business recovery in case of disruption, and
 promote effective use of IS services, and client surveys
(conducted twice a year).

Information Security
Viruses
Insider Abuse
Laptop Theft
System Penetration
Denial of Service
Unauthorized Access
Theft of Proprietary Info
Financial Fraud
Telecom Fraud
Sabotage
Telecom Eavesdropping
Active Wiretapping
Information Security


Hackers use nine approaches to cause harm: cracking the
password, tricking someone, network sniffing, misusing
administrative tools, paying middlemen, denial of service
attacks, Trojan horse programs, viruses, and spoofing.
Because airtight security is not possible, companies need to
prioritize their risks and work on safeguarding against the
greatest threats.
Information Security

Cracking the password



Tricking someone


Guessing someone’s password is easier.
Use software that can test out all combinations
Posing as a network manager, he/she ask passwords to solve a
fictitious network problem
Network sniffing

Crackers launch software that monitors all traffic looking for
password or other valuable information.
Information Security

Misusing administrative tools


Paying middlemen




Placing oneself between 2 communicating parties, and denying one party
access to a session.
Denial of service attacks


Helpful tools can be turned against a network. A tool for uncovering weak
spots in a network has been used by hackers.
Flooding so that the service becomes freezes.
Trojan horse programs
Viruses
Spoofing

Crackers can gain access to a site.
Information Security
Security’s Five Pillars
1.
2.
3.
4.
5.
Authentication
Identification
Privacy
Integrity
Nonrepudiation
Information Security





Authentication verifies the authenticity of users,
Identification identifies users to grant them appropriate access,
Privacy protects information from being seen,
Integrity keeps information in its original form, and
Non repudiation prevents parties from denying actions they
have taken.

It can prove that someone was the actual sender and other the
receiver.
Information Security
Antivirus Software
Firewalls
Physical Security
Access Control
Intrusion Detection
Encrypted Files
Encrypted Login
Reuseable Passwords
Digital IDs
PCMCIA
Biometrics
Business Continuity

Safeguarding people during a disaster

Documenting business procedures

Giving employees the tools and space to handle personal issues


It is a business issue, because IT disaster recovery is just one component.
There are 2 options for disaster recovery:
 Using Internal Resources
 Using External Resources
Business Continuity
Using Internal Resources
 Organizations that rely on internal resources for IT
disaster recovery generally see this planning as a
normal part of systems planning and development.
 They use multiple data centers, distributed
processing, backup telecom facilities, and local area
networks to provide the backup and recovery they
need.
Business Continuity
Using External Resources
 In many cases, a cost-versus-risk analysis may not
justify committing permanent resources to
contingencies; therefore, companies use the services
of a disaster recovery firm.
 These firms provide integrated disaster recovery
services, specialized disaster recovery services, and
online and off-line data storage facilities.
Tugas Presentasi Kelompok


Case studies mengenai outsourcing bidang IT
berupa contoh perusahaan yang menggunakan
jasa outsourcing.
Analisis dari sisi: mengapa perusahaan tsb
menggunakan jasa outsourcing, bagaimana sistem
outsourcing itu diterapkan dalam perusahaan,
seperti apa dampak outsourcing bagi
kelangsungan bisnis perusahaan secara
keseluruhan.