Chapter 15:
Managing the
Information Systems
Function
Critical Areas of the IT
Management System
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An Agreed-Upon Role for the IS
Organization
IS Leadership -- the CIO
Active Role for User-Managers
Strategic and Economic
Rationale for Outsourcing
An Equitable Financing System
Critical Areas of the IT
Management System
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IS Staff/User Development
Global Information Systems
Development
Appropriate IS Organization
Design
Regular Performance
Measurement
A Change Management System
1. Role of the IS
Organization
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The role of the IS organization
is to be the steward of the
information and IT resources of
the organization, much as the
finance organization is the
steward for financial resources
1. Role of the IS
Organization
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Deploy IT resources, and
facilitate the productive use of
these resources
Develop IT vision/architecture
Maintain control over info.
resources, including data
Develop partnership with usermanagers to exploit IT
2. Chief Information
Officer (CIO)
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The most senior organizational
officer who is responsible for
only information technology
The CIO leads all usage of IT
from a general business
perspective, but may or may not
have operating responsibility for
the IS organization
2. Role of the CIO
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Manages the organization’s
information and IT resources
Part of senior executive group
Staff rather than line (usually)
Responsible for developing an IT
architecture that fits the
organization’s objectives,
management style, and culture
3. User-Manager Role
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Senior IS managers must work
in partnership with non-IS
senior managers to ensure the
productive use of IT
This partnership is often
accomplished through an IS
Policy Committee, or an IS
Steering Committee
4. Outsourcing

The elimination
of part of the
internal IS
organization (or
not adding
people) by hiring
an outside
organization to
perform these
functions
4. Outsourcing:
Primary Drivers
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Cost reduction
(due to economies of scale)
Avoid investments to handle peak loads
Focus on what’s “core”
(stick-to-the-knitting)
Difficult to keep pace with
technology changes, demands for
new IT skill sets
Facilitate acquisitions / divestitures
4. Outsourcing
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Must be viewed as both a
remedy for service failures or
cost issues AND as a strategic
choice
Must be done selectively
Don’t outsource elements of IT
that have STRATEGIC value to
the firm!
5. Financing IT
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Must measure and manage IT
costs - including comparison
with other firms/industries
Must measure benefits, but the
problem of intangible benefits
looms large
User-managers, not IS, must
justify IT investments!
5. Financing IT

Chargeback
systems
sometimes used
to hold IS and
line
organizations
accountable for
the impact of
systems on the
organization
6. IS Staff/User
Development
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“An effective IT management
system will allocate significant
resources to the continuing
development of both IS
personnel and users.”
TRAINING is critical!
6. IS Staff/User
Development
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Selected IS Management
Positions: CIO, IS Director,
Information Center Manager,
Systems Development Manager,
IS Planning Manager, Data
Center Manager, Programming
Manager, Telecommunications
Manager, Database
Administrator, etc.
7. Problems Associated
with Global IT
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Language, currency
Culture
National infrastructure
Availability of IT staff
Transborder data flows
Trade unions
IT costs and availability
7. Global IS Strategies
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IMPERIALISTIC strategy tightly controls international
operations, making them
extensions of headquarters -IS
management centralized,
common architecture for IT, one
or a few data centers, IT
planning/funding centralized,
hierarchical IS organization
7. Global Business
Strategies (cont.)
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MULTIDOMESTIC strategy highly decentralized with only
necessary financial ties
between subsidiaries and
headquarters - really a
federation of separate
companies - IS management
and operations are largely
localized
7. Global Business
Strategies (cont.)
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GLOBAL strategy - both high
degree of integration and high
degree of local control teamwork is key - IS integrates
a few key technologies and
resources as part of the
architecture, but rest is left to
local control - IS organization is
usually a matrix structure
7. Planning for Global
Systems (Roche, 1992)
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Use technology to cement
strategic alliances (EDI, databases)
Develop international systems
development skills
(have a global view)
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Build for the future
(common telecommunications, consistent
hardware/software platforms, global data
definitions)
7. Planning for Global
Systems (continued)
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Tear down the “national” model
(hardware/software standards,
international workflow automation)
Eliminate duplicate facilities
and staffs
Take advantage of improving
international
telecommunications
7. Planning for Global
Systems (continued)
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Standardize
data structures
and definitions
Globalize human
resources in IS
(worldwide promotions
and relocations,
multinational project
team selection)
8. IS Organization
Design
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Classic IS organization - often
reports to VP-Administration,
VP-Finance, or Comptroller highly centralized, task oriented
- focus on efficiency
Functional area IS organization - reports as above - separate
development groups for each
functional area
8. IS Organization
Design
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Service-oriented IS organization
- often reports to Executive VP,
Senior VP - focus on service,
including data administration,
telecommunications,
information center, R & D
8. IS Organization
Design
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Distributed IS organization often reports to Exec VP, Sr VP,
or CEO - central IS has planning
and coordination
responsibilities
Federal IS organization - IS staff
still distributed, but has
centralized data centers
8. Factors Favoring
Centralization of IS
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Specialization of personnel is
possible
Avoid duplication of dev. efforts
Maintain a critical mass of
specialists
Provide an organization-wide,
long-range focus
Standardization
8. Factors Favoring
Decentralization of IS
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Hardware economics
Responsiveness to local needs
Reduced communication costs
Allow local units to have control
over their own destiny
Corp. decentralization policy
Maintain a bottom-line
perspective
8. Other Issues in
Decentralization
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To where? Region, division,
product line, location,
department, individual user,
outside vendor
In what sense? Geographical,
management, resource
allocation
8. Core Roles of
Central IS
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IT vision and architecture
IT strategic planning
Research & development
Backbone/wide area networks
Develop corporate-wide
applications
Corporate data center
9. Regular Performance
Measurement
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Regular evaluation of IS
organization by its internal
customers, based on agreedupon and measurable criteria
Might be done through Service
Level Agreements
More likely through user
satisfaction surveys
10. A Change
Management System
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IT initiates massive change in
an organization, so an effective
IT management system must
include a change management
system
Understanding change is
important!
10. Lewin/Schein
Change Model
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UNFREEZING
- Establish a felt need
- Create a safe atmosphere
MOVING
- Provide necessary information
- Assimilate knowledge and
develop skills
REFREEZING
10. Rogers’ Stages of
the Adoption Process
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Awareness
Interest
Evaluation
Trial
Adoption
10. Ease of Adoption
Characteristics (Rogers)
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Relative
advantage
Compatibility
Complexity
Divisibility
Communicability
10. Diffusion of an
Innovation (Rogers)
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Diffusion over time follows a
bell-shaped curve
First 2.5% of adopters are the
innovators - risk-takers, but not
opinion leaders
Next 13.5% are the early
adopters - they are the opinion
leaders, and thus are crucial!