chapter 1 managing in the information age. introduction the information revolution has been...
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Chapter 1Chapter 1
Managing in the Information AgeManaging in the Information Age
IntroductionIntroduction
The information revolution has been underway for close to five decades
Important information, broadly disseminated, radically alters the balance of power among individuals, institutions, and governments
To succeed in this rapidly changing environment, managers must remain fluent in new practices and techniques
The information revolution has been underway for close to five decades
Important information, broadly disseminated, radically alters the balance of power among individuals, institutions, and governments
To succeed in this rapidly changing environment, managers must remain fluent in new practices and techniques
How Organizations Use Information
How Organizations Use Information
Organizational Resources Money Skilled Employees Information Physical Property Time
The task of managers is to use these resources in an optimal way to fulfill an organization’s mission, that is, resource management
Organizational Resources Money Skilled Employees Information Physical Property Time
The task of managers is to use these resources in an optimal way to fulfill an organization’s mission, that is, resource management
Information and PeopleInformation 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
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
IT Impacts on BusinessIT Impacts on Business
Advanced technology redistributes knowledge among all employees and undermines traditional authority that is based on privileged access to information
Rapid, constant, and deep access to institutional knowledge will radically transform organizations, collapsing levels of management, and flattening organizational hierarchy
Advanced technology redistributes knowledge among all employees and undermines traditional authority that is based on privileged access to information
Rapid, constant, and deep access to institutional knowledge will radically transform organizations, collapsing levels of management, and flattening organizational hierarchy
Information Technology Organizations
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
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
Functions and IT SupportFunctions and IT SupportProduct DevelopmentManufacturingDistributionSalesServiceFinance and AccountingAdministration
Product DevelopmentManufacturingDistributionSalesServiceFinance and AccountingAdministration
Design AutomationMaterials LogisticsWarehouse AutomationOrder Entry, Sales
AnalysisParts LogisticsLedger, Planning, AP, AROffice Systems,
Personnel Records
Design AutomationMaterials LogisticsWarehouse AutomationOrder Entry, Sales
AnalysisParts LogisticsLedger, Planning, AP, AROffice Systems,
Personnel Records
Management TasksManagement 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
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
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; and recommending appropriate corporate policy
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; and recommending appropriate corporate policy
Evolution of IT Management
Evolution of IT Management
1950s to 1960s – automation of routine business data handling
1970s – connection of terminals to mainframes shifted focus from providing data to creating knowledge (Decision Support Systems)
1950s to 1960s – automation of routine business data handling
1970s – connection of terminals to mainframes shifted focus from providing data to creating knowledge (Decision Support Systems)
Evolution of IT Management
Evolution of IT Management
1980s – Widespread telecommunications and data networking moved computing from the mainframe to the desktop
1990s – Internet technologies and applications extended the boundaries of the enterprise. New business models took hold with e-business and ASPs
1980s – Widespread telecommunications and data networking moved computing from the mainframe to the desktop
1990s – Internet technologies and applications extended the boundaries of the enterprise. New business models took hold with e-business and ASPs
Types of Information Systems
Types of Information Systems
Transaction Processing Systems Management Information Systems Decision Support Systems Office Automation Systems Expert Systems
Transaction Processing Systems Management Information Systems Decision Support Systems Office Automation Systems Expert Systems
Internet-Based Business 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
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
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
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
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
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
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
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
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
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 OrganizationsPeople and Organizations
Information Technology changes 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 attuned to these issues
Information Technology changes 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 attuned to these issues
IT Management IssuesIT Management Issues
Even though Information Technology is evolving at a phenomenal pace, critical issues facing IT managers have remained largely unchanged for years Aligning IT and corporate goals Re-engineering business processes Defining IT’s role and contribution Developing an information architecture
Even though Information Technology is evolving at a phenomenal pace, critical issues facing IT managers have remained largely unchanged for years Aligning IT and corporate goals Re-engineering business processes Defining IT’s role and contribution Developing an information architecture
IT Management IssuesIT Management Issues
Three newer issues have arisen as IT has entered the Internet age: Using IT to improve productivity,
quality, and effectiveness Creating or maintaining competitive
advantage through IT Redesigning business processes to
better support corporate strategy
Three newer issues have arisen as IT has entered the Internet age: Using IT to improve productivity,
quality, and effectiveness Creating or maintaining competitive
advantage through IT Redesigning business processes to
better support corporate strategy
Maturation of IT Management
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 generalists
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 generalists
Managing Mature IT Organizations
Managing Mature IT Organizations
Paul Strassmann has written extensively about mature models of IT management. Their elements include: Governance Business Plan Alignment Process Improvement Resource Optimization Operating Excellence
Paul Strassmann has written extensively about mature models of IT management. Their elements include: Governance Business Plan Alignment Process Improvement Resource Optimization Operating Excellence
Information Technology Assimilation
Information Technology Assimilation
Over the past several decades, IT has spread from isolated, single-dimensioned functions to sophisticated, multi-faceted and integrated systems
Shifts have occurred in application development, transitioning from largely in-house creations to more off the shelf products
Over the past several decades, IT has spread from isolated, single-dimensioned functions to sophisticated, multi-faceted and integrated systems
Shifts have occurred in application development, transitioning from largely in-house creations to more off the shelf products
Critical Success FactorsCritical 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 The industry their firm operates in The company itself The environment Time-dependent organizational areas
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 The industry their firm operates in The company itself The environment Time-dependent organizational areas
Critical Success Factors for IT Managers
Critical Success Factors for IT Managers
Managers need to answer two questions: What conditions are necessary for IT
manager’s success today? 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
Managers need to answer two questions: What conditions are necessary for IT
manager’s success today? 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
Critical Areas for IT Managers
1. Business Management Issues2. Strategic and Competitive Issues3. Planning and Implementation
Concerns4. Operational Items
1. Business Management Issues2. Strategic and Competitive Issues3. Planning and Implementation
Concerns4. Operational Items
Business Management Issues
Business Management Issues
Obtain agreement with the firm’s executives on how IT will be managed within the firm
Operate the IT function within the parent organization’s cultural norms
Attract and retain highly skilled people Practice good people-management skills Use IT to improve productivity and
financial returns
Obtain agreement with the firm’s executives on how IT will be managed within the firm
Operate the IT function within the parent organization’s cultural norms
Attract and retain highly skilled people Practice good people-management skills Use IT to improve productivity and
financial returns
Strategic and Competitive Issues
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
Ensure realism in long term expectations
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
Ensure realism in long term expectations
Planning and Implementation Concerns
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
Maintain realism within the organization regarding intermediate-term expectations
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
Maintain realism within the organization regarding intermediate-term expectations
Operational ItemsOperational 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
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
ExpectationsExpectations
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
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
ExpectationsExpectations
Expectations held by the firm’s senior executives constitute a yardstick by which its IT managers will ultimately be measured
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
Expectations held by the firm’s senior executives constitute a yardstick by which its IT managers will ultimately be measured
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
A Model for Studying IT Management
A Model for Studying IT Management
The study of information technology management concentrates on: Accomplishing business results Attaining efficiency and effectiveness Achieving and maintaining
competitiveness Each of these elements is essential
to the firm’s success
The study of information technology management concentrates on: Accomplishing business results Attaining efficiency and effectiveness Achieving and maintaining
competitiveness Each of these elements is essential
to the firm’s success
SummarySummary
IT is a powerful force in today’s global society
These technologies are enabling important transformations that profoundly affect people, organizations, industries, and nations
IT is a powerful force in today’s global society
These technologies are enabling important transformations that profoundly affect people, organizations, industries, and nations