American College of Technology

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Management Information Systems

Course: MBA531
Credit Value: 2 Credit Hours
Prerequisite Course(s): RDBMS
Instructors : Dr. Fikre Y. Wondimu

Information System Management - Lecture 7

Information Technology Management

Previous Discussions

 Information System Resources

o Hardware
o Software
o People

 Types of Systems
o TPS
o DSS
o EIS
o Business Information Systems
 Cross-Function E-Business: ERP, CRM & SCM
 Information Technology Management

Content

Information Technology Challenges in Business:

 Information Technology Governance

 IT Governance Frameworks
➢ ITIL
➢ COBIT
➢ ISO
 Information Technology Management

Content

Information Technology Challenges in Business:

 Information Technology Governance

 IT Governance Frameworks
➢ ITIL
➢ COBIT
➢ ISO
 Information Technology Management

Definitions of IS, IT and MIS

 Information Systems (IS) is an umbrella term for the
systems, people and processes designed to create, store,
manipulate, distribute and disseminate information. The field
of information systems bridges business and computer
science..
 Information Technology (IT) falls under the IS umbrella but
deals with the technology involved in the systems
themselves. Information technology can be defined as the
study, design, implementation, support or management of
computer-based information systems.
Management information system(MIS): A specific form of IT
that managers utilize to generate the specific, detailed
information they need to perform their roles effectively
Information Technology Challenges in Business

Information Technology Management

Information Technology Management

IT Governance Definition

IT governance is defined as “specifying the decision rights

and accountability framework to encourage desirable
behavior in the use of IT”

IT governance and corporate governance are interrelated;

IT governance is an integral part of corporate governance.
For this reason, many issues and concepts discussed in
corporate governance are also involved in IT governance
 Information Technology Management

Management and Control

 Controlling is the process whereby managers regulate how

efficiently and effectively an organization is performing the
activities necessary to achieve organizational goals.
 Managers achieve control over organizational activities by
taking four steps:
 Establish measurable standards of performance or goals.

 They measure actual performance.

 Compare actual performance against established goals.

 Evaluate the result and take corrective action if necessary.

 Information Technology Management

Innovation for IT

 Innovation refers to new products, new processes, new

managerial approaches, and combinations of the above.
 An important aspect of innovation is “Adoption and
implementation of IT.”
 Information Technology Management

Variables Related to Innovation

 Resource availability and allocation

 Ability to understand competitors’ innovative strategies
 The business’ technological environment
 Structure and cultural context
 Strategic management capacity in dealing with entrepreneurial
behavior

Burgelman & Maidique 1988

 Information Technology Management

Framework for Reviewing Technology Innovation

 Discovery of a new idea or product

 Emergence of the proposed idea or design concept
 Verification of the theory or design
 Demonstration of a prototype
 Trail and evaluation
 Commercial introduction or initial operation of the
innovation
 Innovation adoption
 Innovation proliferation
 Information Technology Management

Measuring IT Governance Performance

 Measuring IT performance is a key concern as it

demonstrates the effectiveness and added business
value of IT.
 Commonly seen as the IT “Black Hole” – costs
continually rise without clear evidence of value
derived from the IT function.
 Traditional performance measurement methods
require monetary values which are hard to apply to
IT systems.
 Information Technology Management

Facts about IT Management

 Effective use of IT provides a competitive edge.

 IT is a means, not an end.
 People are the most important resources.
 Most projects fail due to poor management.
 Information Technology Management

Success Factors of Technology Management

 Business focus
 Adaptability
 Organizational cohesion
 Entrepreneurial culture
 A sense of integrity
 Hands-on top management

(Maidique & Hayes in Burgelman & Maidique 1988)

 Information Technology Management

IT and Market

 Balancing between technology push and market pull

 Proactive approach for technical development
 Feasibility of an innovation: technologically and commercially
 Consistent of an innovation with corporate objectives and
goals
 Information Technology Management

Managing Technology (Mgr. perspective)

Advanced technology can create an abrupt change in

businesses.
New technology requires (Beatty 1992)
❑ A skilled champion
❑ A plan for systems integration
❑ Organizational integration
 Information Technology Management

Ensuring Value and Effectiveness

 IT issues are the least understood, despite increasing

reliance placed on IT.
 Initiate IT governance structures with the right level
of executive involvement.
 Board of Director’s require essential IT related skills
 Information Technology Management

Barriers to Success

 Failure of a champion
 Lack of systems integration
 Incompatible systems
 Lack of a cross-functional team
 Information Technology Management

IT Management Challenges

 Effective Communication With Employees.

 Pressure To Perform as a Manager.
 Administer policies fairly and consistently.
 Managing Time.
 Manage Performance.
 Setting Clear Goals And Expectations.
 Getting the team to be productive.
 Encouraging Productivity.
 Hiring and Firing Employee.
 Not Asking For Help.
 Information Technology Management

Lessons Learned

 Technology will be useful only when it is used.

 More emphasis needs to be placed on adoption, adaptation,
and exploitation of technology
 Protecting existing technology rather than promptly
embracing new technology becomes a “dead end” strategy
(Ali & Zahra 1994). E.g., IBM vs. HP.
 Customer involvement leads to success.
 Managers today must understand
❑ Impact of IT on the strategic and organizational changes
❑ New role of IT in integrating different business functions
in systems design
 Information Technology Management

Summary

 Technology management is critical for not only creating but

also sustaining a competitive advantage of an organization.
 Technology consideration must be an integral part of a firm’s
business strategy.
 Change in technology without change in the way it is used can
lead to failure.
 Technology and human resources must be working in an
integral manner to ensure success.
 Leaders must have a strong knowledge and capability in
managing both technology and people.
Information Technology Management

IT Governance
Information Technology Management

What is IT Governance

Structure to help align IT strategy with business strategy

According to ITGI, there are 5 areas of focus:
o Strategic alignment
o Value delivery
o Resource management
o Risk management
o Performance measures
 Information Technology Management

What is IT Governance

IT Governance can be expressed as a framework for decision

rights and accountability to encourage desirable behaviour in
the use of IT[2].
 Responsibility of executives and the Board of Directors or
Management Team,.
 Consists of the leadership, organizational structures and processes
that ensure the enterprise’s IT Governance and sustainability and
extension of the organization’s strategies and objectives.
The overall objective of IT Governance is to understand the issues and the
strategic importance of IT, so that the enterprise can sustain its operations
and implement the strategies required to extend its activities into the future.

[2]. ICT Governance based on COBIT 4.1 - A Management Guide, A Publication of itSMF International
 Information Technology Management

Why is IT Governance Important

 Compliance with regulations

 Competitive advantage
 Support of enterprise goals
 Growth and innovation
 Increase in intangible assets
 Reduction of risk
 Information Technology Management

Who is Involved in IT Governance

 Executives
 Board of Directors
 Team leaders
 Managers
 Stakeholders
 Information Technology Management

IT Governance
 IT governance provides the framework to ensure that IT
investments and processes can support the organization’s
overall business needs.
 IT Governance is the responsibility of Executive Management
and the board of directors (BOD) and IT Executive, a strong
representation of the “tone from the top”.
 Without effective IT Governance, risk exists that existing IT
assets and capabilities may not meet the organization’s
strategic, operational, or financial objectives, or that
additional IT investments will not achieve their intended
incremental benefits to the organization.
 COBIT emphasize the importance of IT Governance.
COBIT stands for Control Objectives for Information and Related Technology.
 Information Technology Management

Goal of IT Governance
 ICT Value Delivery: focus on optimizing cost and the value of ICT
 Risk Management: focus on safeguarding ICT assets, disaster recovery and
continuity of operations

Means to Achieve ICT Governance Goals:

 ICT Strategic Alignment: focus on aligning ICT with the business and collaborative
solutions
 Performance Measurement: focus on tracking project delivery and monitoring
delivery of ICT services.
ICT Value and
Alignment

Performance
Accountability ICT Governance
Measurement

Risk
Management
 Information Technology Management

IT Governance Benefits
The implementation of IT Governance is designed to deliver real
benefits:

 Better IT to business alignment built on a business focus

 Improved maintenance and operations planning
 Management view of what IT does and increased visibility of IT spending
 Clear ownership and responsibilities, based on process orientation
 General acceptability with third parties and regulators
 Shared understanding amongst all stakeholders on a common language
 Fulfilment of the governance requirements for the IT control environment
 A comprehensive IT Governance model for managing all IT resources
 Information Technology Management

Elements of Good IT Governance

Leadership - Ethics and a culture committed to good Governance, implementation,
evaluation and improvement governance structure and processes
Stakeholders Relationship - Understanding the various roles, accountabilities and
needs of each stakeholder group contributes to strong relationships
Risk Management - means to understand and address risks in order to better achieve its
objectives
Internal compliance and accountability – ensure that internal controls and
accountabilities are clearly defined and consistent with the organization's objectives.

Planning and performance monitoring - review and foster better planning and
performance monitoring will be more effective and relevant.

External compliance and accountability - External scrutiny is meeting these

accountabilities is one of the measures of success for Government Organizations.

Information and decision support - ensuring that the right information gets to the
appropriate people in a timely manner.

Review and evaluation of governance arrangements - Ongoing review,

evaluation and adjustments of governance arrangements
Information Technology Management

Elements of Critical Success Factors

 Senior Management Commitment

 Clear Purpose
 Management of Business Change
 Minimize complexity
 Focus, execute and enforce
 Phased approach works best
 Develop realistic KPI’s & Metrics
 Information Technology Management

IT Governance Framework

Provide
Decision

Set Objectives IT Activities

✓ IT is aligned with the business
✓ IT enables the business and
maximizes benefits
✓ It resources are used
responsibly
✓ IT related risks managed
appropriately
✓ Increase automation
(make the business
effective)
Compare ✓ Decrease cost (make
enterprise efficient
✓ Manage risks (security
reliability and compliance0

Measure
Performance
 Information Technology Management

Industry Proven Best Practice Frameworks

ITIL (Information Technology Infrastructure Library)

COBIT (Control Objectives for Info. and related Tech.)
CMM (Capacity Maturity Model)
MOF (Microsoft’s Operations Framework) and others.
ISO Model
 Information Technology Management
ITIL
1 Framework Office of Government Commerce
Developer (OGC) - UK
2 Latest Maturity ITIL Version 3
Level
(Version)
3 Framework ITIL is a set of concepts and
Description techniques for managing information
technology (IT) infrastructure,
development, and operations. ITIL is
the most widely accepted approach to
IT service management in the world.
ITIL provides a cohesive set of best
practice, drawn from the public and
private sectors internationally. A whole
ITIL philosophy has evolved from the
guidance contained within the ITIL
books and the ITIL professional
qualification scheme.
4 Framework The purpose of ITIL is to provide
Purpose advice on best practices in IT service
management. It includes options that
may be adopted and adapted by
organizations according to business
need, local circumstances and the
maturity of the service provider.
COBIT
Information Systems Audit and
Control Association (ISACA),
COBIT Version 4
(Version 5 expected to be released
in 2012)
COBIT is an IT governance
framework and supporting toolset
that allows managers to bridge the
gap between control requirements,
technical issues and business risks.
COBIT enables clear policy
development and good practice for
IT control throughout organizations.
COBIT emphasizes regulatory
compliance, helps organizations to
increase the value attained from IT,
enables alignment and simplifies
implementation of the COBIT
framework.
The purpose of COBIT is to provide
management and business process
owners with an information
technology (IcT) governance model
that helps in delivering value from IT
and understanding and managing
the risks associated with IT.
MOF
Microsoft
MOF Version 4
(MOF is a delivery of a
collection of best practices,
principles, and models,
which provide guidance for
achieving high availability,
reliability, and security on
mission-critical product
system built on Microsoft’s
products and technologies.
The purpose of MOF is to
provide guidance to IT
organizations to help them
create, operate, and support
IT services while ensuring
that the investment in IT
delivers expected business
value at an acceptable level
of risk.
 Information Technology Management

Descriptions ITIL COBIT MOF

5 Similarities in core IT
Service Processes:
6 Framework Strength
• Service Desk
• Incident Management
• Problem Management
• Configuration Management
• Change Management
• Release Management
• Service Level Management
• Financial Management
• Capacity Management
• Availability Management
IT service management and
service delivery processes in a
lifecycle approach.
• Assist and Advice
customers
• Manage Problems and
Incidents
• Manage the Configuration
• Mange Changes
• Defines and Mange
Service Level
• Identify and Allocate Costs
• Manage Performance
Capacity
• Ensure Continuous
Process
IT Governance, management
guidelines, control objectives,
audit guidelines.
• Service Management
• Project Planning
• Governance, Risk and
Compliance
• Change and Configuration
Management
• Service monitory and
control
• Customer Service
• Problem Management
• Operations Health
• Service Level
Management
Support of IT infrastructure
service management of
Microsoft’s technologies.

7 Closeness to the Very close: strong on IT process
Assignment : support and management but
Objective: less on IT governance and
measurement controls
Close: Strong on IT
Governance and Control but
less on IT service process
management
Less Close: Strong on
Microsoft technology
management, operation and
improvement but less on IT
service management in
general.
 ITIL

The Information Technology Infrastructure Library

(ITIL) is a set of guidance developed by the United
Kingdom’s Office Of Government Commerce (OGC)
ITIL does not doc how to do things, But tells you what
can and should be done.
It shares with us what other people found to be the best way
to approach IT as a service provider.

 Service Strategy
 Service Design
 Service Transition
 Service Operation
 ITIL

Service Strategy Service Design Service Transition Service Operation Service Improvement
Process Relationships – 29 Total
 Life of ITIL

Design
Design the
Strategy Service

Transition
Business need Requirements
Build Procure
identified Specification
Continual Service Improvement

Test

Operation
Optimise Operate Deploy

Retire
 IT Governance Framework for Ethiopia
ICT Governance Framework for Ethiopian Government Organization

(2) Head of (3) Gov. Organization

Government Management Team
- Adopt Policies,
(1) MCIT Indirect Organization Compare Guidelines, Standards
- Make Policy Decisions - Set Strategies
- Define Control Objectives - Analyze Risks
- Set tactical directions - Redirect decision
- Policies
- Directives
- Regulations

Direct
- Standards Application Management
- Frameworks
- Strategies ICT Infrastructure and
- Guidelines (4) Head ICT Service Management
Organization - Service Strategy
Report

- Translate policies in to Manage - Services Design

guideline and procedures - Service Transition
- Define Control Activities - Service Operation
- Continuous improvement

Measure
(6) Evaluation &
(7) Feedback Evaluate Performance
Measurement
 Implementation of IT Governance

Government Organization Enlightened Organization:

(Minister, Agency Director,
Managing Director, etc..)  EAL – CIO
 Ethiotelecom - CIO
Director of Audit  CBE – VP
Services
 ERCA - Director

Director of Director of One

Director of ICT
Finance & of Core Others
Others Services
Administration Processes

Head of Head of Head of

Others
Operations Applications Technologies
 Organization Needs
Strategy Architecture Portfolio
EA, EGIF

Demand
Bus. Req.
Strategy & Financial
Analysis Design. SLM
Design Availability
Capacity
Development
Continuity
Service

TIME
Test Configuration
Stabilization

Deploy Assets
ICT Governance

Release
Release
Change
Operate
Continual Service Improvement

Problem
Project Management (PMBOK, PRINCE2, etc.)

Request
Service

Incident
Operations

Events
IT Development vs IT Service Management

ICT Services
 Information Technology Management

COBIT IT GOVERNANCE FRAMEWORK

Business Objectives Criteria
• Effectiveness
• Efficiency
• Confidentiality
IT Resources • Integrity
• Availability
• Data • Compliance
• Application systems • Reliability
• Technology
Monitor and • Facilities
• People
Evaluate
Plan and
Organise

Deliver and
Support
Acquire and
Implement

7 IT Governance Institute. All rights reserved. www.itgi.org 42

Information Technology Management

COBIT Technology Management

 Information Technology Management

ITIL vs COBIT

ITIL was designed as a service management framework to help

you understand how you support processes, & how you deliver
services
COBIT was designed as an IT governance model, particularly and
initially with audit in mind to give you control objectives and
control practices on how that process should behave
Information Technology Management

ISO Model
Information Technology Management

CMM Model
 Information Technology Management

CMM Model
Best Practice - Capability Maturity Model (CMM)
CMM describes five evolutionary stages (ranging from 1.0 to 5.0 maturity scales) in which an
organization manages its ICT processes.
Objective: Assess the current situation of an ICT Organization with respect to its ICTSM process
capability maturity and also provide path for future improvement.

Level 45 – Optimized Stage

Level 4 – Proactive Stage

ls
ve
Le

Level 3 – Managed Stage

ity
ur
at
M

Level 2 – Reactive Stage

Level 1 – Initial Stage

ICT- Infrastructure and Service Management Capability Maturity Model

 Information Technology Management

CMM Model

Earned Maturity Maturity

ICT Organizations Points Level Stage
Ethiopian Air Lines 4.4 Level 4 Proactive
ethio telecom 4.2 Level 4 Proactive
Ethiopian Commodity Exchange 4.2 Level 4 Proactive
Commercial Bank of Ethiopia 3.7 Level 3 Managed
Ethiopian Revenue and Customs Authority 3.4 Level 3 Managed
Ministry of Communication and IT Technology 3.2 Level 3 Managed
Ethiopian Shipping Lines 2.4 Level 2 Reactive
Ethiopian Roads Authority 2.2 Level 2 Reactive
Ministry of Finance and Economic Development 2.2 Level 2 Reactive
Ad-Hoc Government Organizations 1.0 Level 1 Initial
 Information Technology Management

Case Analysis Questions

Page 331 – Real World Case 3

Cisco Systems, Black & Decker, and O’Reilly Auto Parts:
Adapting Supply Chains to Tough Times
Answer the questions on page 332
 Information Technology Management

Midterm Exam
 Submission Date: February 20, 2021
 Answer each question on a separate page (typed)
Questions:
1. What are the main challenges associated with implementing a
fully fledged ERP, CRM and SCM systems.
2. In managing Information Technology Resources what are the
main challenges facing IT mangers and what are success
factors that managers should embrace to meet organizational
goal.
 End of Lecture 7

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