1
Chapter
12
Enterprise and Global
Management of
Information Technology
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Learning Objectives
Identify
ways that information technology has
affected the job of managers.
Identify
the seven major dimensions of a
networked organization and explain how they
can affect the success of a business.
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Learning Objectives (continued)
Identify
each of the three components of
information technology management and use
examples to show how they might be
implemented in a business.
Explain
how failures in IT management can be
reduced by the involvement of business
managers in IS planning and management.
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Learning Objectives (continued)
Identify
cultural, political, and geoeconomic
challenges that confront managers in the
management of global information
technologies.
Explain
the effect on global e-business strategy
of the trend toward a transnational business
strategy by international business
organizations.
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Learning Objectives (continued)
Identify
considerations that affect the choice of
IT applications, IT platforms, data access
policies, and systems development methods by
a global business enterprise.
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Section I
Managing Information Technology
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Business and IT
As
companies are transformed into global ebusinesses and players in global e-commerce, it
is vital for business managers and
professionals to understand how to manage
this vital function.
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The Impact of IT on Managers
A major
force for precipitating or enabling
organizational and managerial change
Enables
innovative changes in managerial
decision making, organizational structures,
and managerial work activities
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The Impact of IT on Organizations
Key
dimensions of the networked enterprise
Organizational structure
Leadership and governance
People and culture
Coherence
Knowledge
Alliances
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Managing Information Technology
Three
major components
Managing the joint development and
implementation of e-business and IT
strategies
Managing the development of e-business
applications and the research &
implementation of new IT
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Managing Information Technology (continued)
Three
major components (continued)
Managing the IT processes, professionals, &
subunits with the IT organization & IS
function
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Managing the IS Function
Organizing
IT
Centralization
Decentralization
Latest trend, hybrid
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Managing the IS Function (continued)
Managing Application
Development
Involves managing activities such as
systems analysis and design
prototyping
applications programming
project management
quality assurance
systems maintenance
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Managing the IS Function (continued)
Managing
IS Operations
Managing the use of hardware, software,
network, and personnel resources in data
centers/computer centers within an
organization
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Managing the IS Function (continued)
Managing
IS operations (continued)
Operational activities requiring
management
Computer systems operations
Network management
Production control
Production support
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Managing the IS Function (continued)
Managing
IS Operations (continued)
System Performance Monitors
Monitor processing of computer jobs
Helps develop a planned schedule
Produce detailed stats for planning and
control of computing capacity
Chargeback systems
Process control
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Managing the IS Function (continued)
Human
Resource Management of IT
Recruit qualified personnel
Develop, organize, and direct the capabilities
of existing personnel
Train employees
Design career paths and set salary and wage
levels
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Managing the IS Function (continued)
The
CIO and Other IT Executives
Chief Information Officer (CIO)
Oversees all use of IT in many companies.
Brings the IT function into alignment with
strategic business goals
Concentrates on business/IT planning and
strategy
Helps develop strategic uses of IT in ebusiness and e-commerce
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Managing the IS Function (continued)
Technology
Management
All IT must be managed as a technology
platform for integrated e-business and ecommerce systems
May assign a Chief Technology Officer
(CTO)
In charge of all IT planning and
deployment
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Managing the IS Function (continued)
Managing
User Services
Functions to support and manage end user
and workgroup computing
Provides both opportunities and problems
for business unit managers
Help desks
Establish and enforce policies
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Failures in IT Management
IT
is not being used effectively by companies
that use IT primarily to computerize
traditional business processes, instead of using
it for innovative e-business processes
IT
is not being used efficiently by IS that
provide poor response times and frequent
down times or when application development
projects are not managed properly
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Failures in IT Management (continued)
Management
Involvement and Governance
Senior management needs to be involved in
critical business/IT decisions to optimize the
business value and performance of the IT
function.
Requires development of governance
structures that encourage active
participation in planning and controlling
the business uses of IT.
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Failures in IT Management (continued)
Helps
avoid IS performance problems
Helps
improve the strategic business value of
IT
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Section II
Managing Global IT
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The International Dimension
A vital
part of managing an e-business
enterprise in the internetworked global
economies and markets of today.
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Global IT Management
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Cultural, Political, and Geoeconomic Challenges
Cultural
challenges
Differences in languages
Cultural interests
Religions
Customs
Social attitudes
Political philosophies
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Cultural, Political, and Geoeconomic Challenges (continued)
Political
challenges
Rules regulating or prohibiting transfer of
data across their national boundaries
Severe restrictions, taxes, or prohibitions
against imports of hardware and software
Local content laws
Reciprocal trade agreements
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Cultural, Political, and Geoeconomic Challenges (continued)
Geoeconomic
Challenges
The effects of geography on the economic
realities of international business activities
Distance
Real-time communication
Lack of good-quality telephone and
telecommunications service
Lack of job skills
Cost of living and labor costs
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Global e-Business Strategies
Moving
away from
Autonomous foreign subsidiaries
Autonomous foreign subsidiaries, dependent
on headquarters for new processes,
products, and ideas
Close management of worldwide operations
by headquarters
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Global e-Business Strategies (continued)
Moving
toward
Reliance on information systems and
Internet technologies to help integrate global
business activities
An integrated, cooperative worldwide
hardware, software, and Internet-based
architecture for IT platforms
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Global e-Business Applications
IT
applications depend on a variety of global
business drivers, caused by the nature of the
industry and its competitive or environmental
forces
Global customers
Global products
Global operations
Global resources
Global collaboration
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Global IT Platforms
The
technology infrastructure
Technically complex
Major political and cultural implications
Challenges
Managing international data
communications networks
Network management issues
Regulatory issues
Technology issues
Country-oriented issues
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Global IT Platforms (continued)
The
Internet as a Global IT Platform
Companies can
Expand markets
Reduce communications and distribution
costs
Improve their profit margins
Low cost interactive channel for
communications and data exchange
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Global Data Access Issues
Transborder
data flows (TDF)
Data flow across international borders over
telecommunications networks of global
information systems
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Global Data Access Issues (continued)
Many
countries view TDF as violating
their national sovereignty
Others, as violating their laws to protect
the local IT industry or to protect local
jobs
May view TDF as a violation of their
privacy legislation
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Global Data Access Issues (continued)
Internet Access
Issues
High government access fees
Government monitored access
Government filtered access
No public access allowed
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Global Systems Development
Challenges
Conflicts
over local versus global system
requirements
Difficulties agreeing on common system
features
Disturbances caused by systems
implementation and maintenance activities
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Global Systems Development (continued)
Challenges
(continued)
Trade-offs between developing one system
that can run on multiple computer and
operating system platforms, or letting each
local site customize the software for its own
platform
Global standardization of data definitions
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Global Systems Development (continued)
Systems
Development Strategies
Transforming an application used by the
home office into a global application
Setting up a multinational development team
to ensure the system design meets the needs
of local sites as well as headquarters
Parallel development
Centers of excellence
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Discussion Questions
What
has been the impact of e-business
technologies on the work relationships,
activities, and resources of managers?
What
can business unit managers do about
performance problems in the use of
information technology and the development
and operation of information systems in their
business units?
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Discussion Questions (continued)
How
are Internet technologies affecting the
structure and work roles of modern
organizations?
Will middle management wither away?
 Will companies consist primarily of selfdirected project teams of knowledge
workers?
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Discussion Questions (continued)
Should
the IS function in a business be
centralized or decentralized? What recent
developments support your answer?
How
will the Internet, intranets, and extranets
affect each of the components of global
information technology management?
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Discussion Questions (continued)
How
might cultural, political, or geoeconomic
challenges affect a global company’s use of the
Internet?
Will
the increasing use of the Internet by firms
with global e-business operations change their
move toward a transnational business
strategy?
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Discussion Questions (continued)
How
might the Internet, intranets, and
extranets affect the business drivers or
requirements responsible for a company’s use
of global IT, as shown in the chapter?
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Real World Case 1 – USG Corp.
Evaluating
the ROI of IT Investments
Why
do many companies fail to evaluate the
return on investment of their IT projects?
Is
this good business practice?
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Real World Case 1 (continued)
What
are some of the ROI measurement and
incentive practices of the companies in this
case that might help other companies evaluate
the ROI of their IT investments?
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Real World Case 1 (continued)
Should
business managers be responsible for
justifying the ROI of IT investments that will
benefit their business units?
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Real World Case 1 (continued)
Who
should be involved in evaluating the ROI
of the IT investment proposals of a company’s
business units?
Why?
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Real World Case 2 – Agilent Technologies & Citibank
The
Challenges of Consolidating Global IT
Do
you agree with Agilent’s global IT
consolidation goals and process?
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Real World Case 2 (continued)
Why
did Agilent’s global IT consolidation get
such a strong negative response from many
business and IT stakeholders?
Could
this reaction have been avoided?
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Real World Case 2 (continued)
What
are the business benefits of Citibank’s
global IT consolidation project?
How
can a single global system still be
customized for each country?
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Real World Case 2 (continued)
What
challenges might arise in managing the
global IT function at Agilent Technologies
from this point on?
How
would you meet such challenges?
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Real World Case 3 – Cisco Systems
Failure
in Supply Chain Management
What
caused Cisco’s $2.2 billion loss in
unneeded inventory?
Could
this situation have been avoided?
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Real World Case 3 (continued)
How
is eHub supposed to avoid such losses in
the future?
What
problems might arise with this new
system?
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Real World Case 3 (continued)
What
can be done in the supply chain
management process of any company to avoid
situations like Cisco’s?
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Real World Case 4 – Merrill Lynch & Co.
The
Business Case for Global IT Consolidation
Why
has there been a trend toward
centralizing systems among financial services
firms?
What
are the potential benefits and limitations
of this trend?
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Real World Case 4 (continued)
What
are the business benefits of Merrill
Lynch’s new global order processing system?
What
implementation challenges are involved?
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Real World Case 4 (continued)
Does
the merger of Merrill’s global services
division and its IT division make good business
sense?
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Real World Case 5 – Fireman’s Fund, Allmerica Financial, &
FMC
The
Business Case for IT Outsourcing
What
is the business value to Fireman’s Fund
and Allmerica of outsourcing their computer
operations?
What
are some potential limitations of such
outsourcing arrangements?
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Real World Case 5 (continued)
What
is FMC’s motivation for its IT
outsourcing?
What
is the role of an IT organization at
companies like those in this case, if much of
their IT operations are outsourced?
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Real World Case 5 (continued)
What
are the benefits and potential limitations
of offshore and near-shore IT outsourcing
arrangements?
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