aligning information systems (is) and corporate...
TRANSCRIPT
Aligning Information Systems (IS) and Corporate Strategy
Ken Kozar/Tom MiaskiewiczLeeds School of Business
University of Colorado/Boulder
Some Background• Systems• Information Systems• Information Technology• Operations Management
System
• Interrelated parts that exist for a purpose– Input, Processing, Output
• All around us!– Human body– Weather– A bike
• Can have many subsystems
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System Diagram Example
• Emergency Room
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Ambulance
Police
Others
Triage
PATIENT
PATIENT
PATIENT
Supply Room
ORDERSSUPPLIES
Morgue
TERMINATED PATIENT
WELLPATIENT
Society
NOT WELL WardsTreatmentAdmissions
PATIENT PATIENT
PATIENT
Source: Athey and Zmud 1986
Information Systems (IS)
• Information System– Group of components that produce information
for a certain purpose
• Broader than Information Technology (IT)– iPod vs iTunes Music Distribution
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HardwareSoftwareDataProceduresPeople
INPUTS OUTPUTS
Data Useful Information
Operations Management
• Planning, coordination, controls, and resources needed to produce goods or services from resources/raw materials
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Operations Management
INPUTS OUTPUTS
Resources ProductsRaw Materials
Source: Adams 2008
Services
IS Managers’ Issues?
• Some Lingering Topics• Why don’t they go away?• COO stands for what?• CIO stands for what?• Can IS become part of the team?• Is IS just technology?
Some studies?
• CSC Index ’95 - #1 issue is “Aligning IS and Corporate Goals”
• Beyond Computing ’95 - #1 Issue is “Integrating IT/Corporate Strategies”
• CIO Magazine 2006 State of CIO - #1 Priority “Align IT and Business Goals”
• Best Way to Lose CIO Job?
Ernst and Young Study• Surveyed CIOs, their bosses and peers (COO)• #1 “To-Do” for all three: Align IS and Corporate
Goals• #1 Best Way to Get CIO Fired? “Failing to
communicate with senior management.”• Others include: “Not fitting in with corporate
culture,” “Not being a team player,” Failing to deliver functionality required by the business”
COMMUNICATE!? About What?
• About business!• About the bottom line and impacts on it• About leveraging technology to attract and
retain customers and reduce the cost of servicing them
• Not about technology per se!
Linking Business to IS
• Business Objectives – Measured through revenues and costs
• Business Tactics – Tasks performed• Systems Objectives – IS Results• Systems Tactics – Technologic Activity
Need:
• Business-Savvy IT Persons Partnering With
• IT-Savvy Business Persons
Putting it All Together - Alignment
Business Objectives
• Focus on Cost or Revenues• Based on vision and mission• Unconstrained Thinking
Classic Costs to Reduce
• Include overtime, waste/spoilage, losing discounts, cash flow loan charges, turnover, absenteeism, fines, space charges, lawsuits, uncollected debts, rework, outsourcing, etc.
Classic Revenues to Increase
• Include new markets, repeat customers, new products/services, product returns, inventory outages, “dunning” improperly, alliances, cross selling, quick funds recovery, etc.
Clues to Business Objectives
• Changes in product line, product quality, product characteristics, markets, price, target customers, market position, market share, company size, ROI, dividends, leadership directions, etc.
Business Tactics
• Means of accomplishing objectives• Performable by organizational members?• Tactics specify how IS is used• Changed tactics could mean: business
process reengineering, changed job descriptions/job entry/compensation /training/union contracts
System Objectives
• Stated in terms of increased capabilities• Reports, screens, web sites, processing,
accessibility, communication could change• Must be clear on times, content, order,
time period, format, circulation, response time, usability
System Tactics
• Preliminary design with no vendor, hardware specifics, or physical details
• System tactics cost money• Are combined into a system strategy or
architecture
Gumption Traps
• Intangible Objectives – do they really exist?
• Quantification – is it measurable? • Goal setting – science or art?• Assuring all constituencies considered• Always do this?
Why try this?
• Links IS to the Organization• Common Language• Measurable Targets – are we done?• Cost/benefit Analysis Possible• Ensures IS is useful and used• Ensures IS and users know their role• Basis for Job Redesign
Can we do this?
• If you think you can or Think you can’t You’re Right!
-Henry Ford