Managing IT in an Organization

Information System (IS) Department:

The organizational unit or department that has the primary responsibility
for managing IT

• Information Systems departments can vary greatly across

businesses, depending on the organization’s dependency on IT
for:

• Reliable and secure business operations and

• Competitive advantage based on new technologies

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Information Technology Organizations

• On an organizational chart, IT is generally classed as a department like

marketing or manufacturing

• Operationally, IT operates as a business within a business, supporting

all other units in different ways
Managing IT in an Organization

Example: IS Organization Chart

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How Organizations Use Information
• Organizational Resources
 Human resources - skills, knowledge, capacity and disposition of
all persons employed in the organization

 Financial resources - cash, financial capital of an organization used

to fund both current and long-term activities.

 Tangible resources - includes raw materials, parts, production

offices and all kinds of equipment.
 Information resources - include all kinds of useful information and
data needed for the effective decision making also knowledge and
key competences of the employees

• The task of managers is to use these resources in an optimal way to

fulfill an organization’s mission, that is resource management
Managing IT in Organizations

Technology • Computer and communications infrastructure that

enables information sharing over standard IT platforms
Asset

Relationship • Established partnering relationships for joint IT-

Asset business decision-making

Human • Pool of IT people talent for needed mix of

Asset technology and business skills

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 Managing IT in Organizations

IT Workers Myths IT Workers Facts

• IT doesn’t matter and provides • IT is vital to business

no business benefits profitability
• IT work is boring and • Fast pace of technological
monotonous change keeps IT careers
• All IT jobs are being outsourced interesting
• Globalization will ruin the IT • Offshoring threat overstated
field • Globalization of IT is an
• U.S. IT worker demand is opportunity
declining • U.S. IT worker demand will
remain strong

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 IT Leadership Roles
• Many organizations today have created an officer-level position for
the senior IT executive in the organization: the chief information
officer (CIO)..
• Senior IT leaders may report directly to a president or CEO or may
report to another officer in the company—such as a chief financial
officer (CFO) or chief operating officer (COO).

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 IT Leadership Roles, cont.
 CIOs and other senior IT leaders come from a variety of
backgrounds. Some managers are chosen to lead the IT organization
because of their in-depth technical knowledge, but others may be
chosen because of their abilities to work well with senior business
leaders, not because of their technical know-how.

 Other important new roles for IT managers have also emerged. For
example, some companies have created a chief security officer
(CSO) position to plan for and monitor compliance with new
federal laws and reporting requirements and to ensure that
appropriate investments are made in technologies and procedures to
manage IT security risks
Factors affecting the structure of managers in
IT enabled organizations
1. Organizations are becoming more knowledge-based, “composed largely
of specialists who direct and discipline their own performance through
organized feedback from colleagues, customers, and headquarters.
2. The Internet, intranets, and extranets and more cost-effective hardware
and software are enabling individuals, teams, workgroups, business
units, and organizations to be “wired together” in close business
relationships that can provide the communication and coordination
needed in today’s competitive global marketplace.
3. Decision support capability provided by information systems
technology is changing the focus of managerial decision making.
4. Managing the information systems resources of a business is no longer
the sole province of information system specialists. Instead,
information resource management has become a major responsibility
of all managers
Poor IS Performance
The information systems function has performance problems in many
organizations. For example, information technology is not being used effectively,
efficiently, or economically by many organizations.
• Effectively
if it is used primarily to computerize traditional business processes, instead of
using it for decision support and innovative processes and products to gain
competitive advantages.
• Efficiently
by information services groups that provide poor response times, frequent
downtime, incompatible systems, unintegrated data, and applications development
backlogs.
• Economically
if information technology costs rise faster than other costs, even though the cost of
processing each unit of data has decreased due to dramatic price reductions and
improvements in hardware and software technology
Major levels of management involve and
governance of IT
 Executive Information Technology Committee
Committee of top executives who do strategic information system planning
and coordinate the development of major information systems projects.

 IT Steering Committee
Committee of business unit managers, operating managers, and
management personnel from the information services department who
oversee the progress of systems development projects.

 End User Management

Direct end user management of information technology in business units
and work groups, including participation in developing key information
systems.
Figure IT 7eU The Business Performance
Management Cycle and IT Model
 Information and People

 In the information-intensive environment, the creative

combination of people and information can be a powerful force in
achieving superior performance

 Skilled people coupled with advanced information technology has

revolutionized commerce and altered the concept of management
Management Tasks

 Line Responsibilities – directly related to

accomplishing the responsibilities of the
organization

 Staff Responsibilities - support line functions in

accomplishing their primary mission

 Senior IT managers have a hybrid role,

blending both staff and line missions
Managing Information Technology

 IT describes an organization’s computing and

communications infrastructure
 IT management includes the tasks of:
 managing the infrastructure,
 standards, and operations;
 making technology-related investments;
 recommending appropriate corporate policy
Types of Information Systems

1.Transaction Processing Systems

2.Management Information Systems
3.Decision Support Systems
4.Office Automation Systems
5.Expert Systems
Internet-Based Business Systems

• Prior to 1990, IT systems focused on

supporting the value chains within an
organization

• With widespread Internet technology, value

chain management could extend outside an
organization becoming much more complex
and responsive
 Enterprise Resource Planning

• With digital value chain data, organizations

 Improve responsiveness to customer needs

 Accomplish just-in-time inventory management
 Increase operational efficiency
 Decrease internal costs
 Increase service and product quality
 IT Management Challenges

• Organizations have high expectations for the benefit

they will derive from technology and software
purchases
• Technology brings structural changes to the
organization
• Unmanaged expectations and ongoing change test
the personnel management skills of IT managers
• IT managers must be technological leaders and
superb generalists
 Controls and Environmental Factors

• Knowledge based organizations must have rigorous

control mechanisms in place

• Loss of control in highly automated operations can

give rise to rapid error propagation

• Intra and extranets linking different organizations

make effective control even more challenging
 Competitive Considerations

• Firms expect Information Technology managers to

deliver the tools necessary to capture and maintain
competitive advantage
• IT organizations are directly on their firm’s critical
path to success
• Ineffective IT management can hinder the
performance of the entire organization
 People and Organizations

 Information Technology change organizations

 These changes are perceived by many as a threat to

power, position, or influence

 IT managers must develop good people management

skills and be familiar to these issues
 Maturation of IT Management

 IT has moved over the past 4 decades from

supporting accounting to enabling fully integrated
data based management systems

 Managers have grown from technical experts to

sophisticated experts
 Managing Mature IT Organizations

 Paul Strassman has written extensively about mature

models of IT management, which includes:
 Governance
 Business Plan Alignment
 Process Improvement
 Resource Optimization
 Operating Excellence
 Information Technology Assimilation

 Over the past several decades, IT has spread from

isolated, single-dimensioned functions to
sophisticated, multi-faceted and integrated systems

 Changes have occurred in application development,

transitioning from largely in-house creations to more
off the shelf products
 Critical Success Factors

 Concept developed by John Rockart to help

executives define their information needs
 Two types: monitoring type and building type
 Defined four areas where executives need to search
for critical success factors
1. The industry their firm operates in
2. The company itself
3. The environment
4. Time-dependent organizational areas
Critical Success Factors for IT Managers

 Managers need to answer two questions:

1. What conditions are necessary for IT manager’s
success today?
2. What tasks must be carried out very well in order
for managers to succeed?
 The answers to these questions can be grouped into
four classes
 Critical Areas for IT Managers

1.Business Management Issues

2.Strategic and Competitive Issues
3.Planning and Implementation Concerns
4.Operational Items
 Business Management Issues

1. Obtain agreement with the firm’s executives on how

IT will be managed within the firm
2. Operate the IT function within the parent
organization’s cultural norms
3. Attract and retain highly skilled people
4. Practice good people-management skills
5. Use IT to improve productivity and financial returns
 Strategic and Competitive Issues

 Develop IT strategies supporting the firm’s strategic

goals and objectives
 Provide leadership in technology applications to
attain competitive advantage for the firm
 Educate the management team about the
opportunities and challenges involved in technology
introduction
Planning and Implementation Concerns

 Develop plans supporting the firm’s goals and

objectives
 Provide effective communication channels so that
plans and variances are widely understood
 Establish partnerships with client IT organizations
during planning and implementation
Operational Items

• Provide customer service with high reliability and

availability
• Deliver service of all kinds on schedule and within
planned costs
• Respond to unusual customer demands and to
emergencies
• Maintain management processes that align
operational expectations with IT capabilities
Expectations

 IT managers should supply their firm’s executives

with their technical and business input so that
executives can anticipate and prepare for future
structural changes well in advance

 They must keep the firm’s financial and strategic

goals firmly in mind and champion a realistic,
practical, and innovative view of the future
Expectations

 Superior managers understand the importance of

expectations and manage them effectively by being
proactive

 Unskilled managers over promise and raise

expectations that they are ultimately unable to fulfill