Introduction Lecture Notes

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MIS 6413Management Information Systems
Introduction Challenges of Managing in a
Networked World Dr. Richard Segall Office BU
216 Phone [phone] Fax [phone] Email
rsegall_at_astate.edu Web http//clt.astate.edu/rseg
all
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Some of the Course Objectives

• A better understanding of the variety of issues
  facing the various stakeholders involved in IS
  deployment in organizations.
• A better understanding of the importance of
  harnessing the power of new technologies to
  enable them to make better decisions and more
  effectively manage the firms in which they work.
• A better understanding of the importance of
  linking business strategy with IT strategy.

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Course Material

• Applegate, L.M., Austin, R.D., and McFarlan, F.W.
  (2007) Corporate Information Systems Management
  Text and Cases. 7th Edition, IrwinMcGrawHill.

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Introduction of Applegate p. 1-3

• The Challenges of Managing in a Network Economy

• IT is a source of opportunity and advantage but
  also uncertainty risk
• Chasm between viewpoints
• Business executives View IT with apprehension
• Technical executives Business leaders lack
  vision
• What is undeniable is the rapidity of change
• In system architecture and interfaces
• In business
• In work and the workforce

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The Embedding of IT

• IT now embedded in
• Definition and execution of strategy
• Organization and leadership of businesses
• Definitions of unique value propositions
• Every business definition is morphing before our
  eyes
• Markets
• Industries
• Strategies
• Firm designs
• Information is now a major economic good

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Riding the IT Rollercoaster

• Mid 1990s
• World Wide Web demonstrated IT potential
• Structural and technical hurdles remained in
  using IT
• Late 1990s
• Capital markets caught the fever
• VCs eager to spend on IT, regardless of long-term
  path to profitability
• 21st Century
• Speculative bubble burst
• Downward spiral until 2003

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What Now?

• What we know
• World is forever changed IT will never return to
  the basement
• Technology as core enabler, primary business
  channel
• Global village is here to stay
• Rigid organization boundaries have fallen
• What we need to do
• Engage in sense-making of the transformation
• Mine the last decade of business experimentation
• Synthesize in order to choose a path forward

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Let the Storytelling Begin

• This book examines stories of executives who
  ventured forth into uncharted waters
• Through the lens of the decades of research and
  experience of the authors
• Through rich dialogue during class discussion of
  chapters, cases, and articles

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Key Themes

• Continuous pace of technology evolution requires
  that we confront new choices for designing and
  building industries, markets, organizations
• Business models that dominated the Industrial
  Economy are evolving
• Types of opportunities pursued and technology
  employed strongly influence approach to
  developing, operating, managing IT
• As IT infrastructure becomes more standardized,
  modular, scaleable, there is a shift in IT
  investment priorities and decisions

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Key Themes (cont.)

• The time required for successful organization
  learning and assimilation of rapidly changing
  technologies limits practical speed of change
• External industry, internal organizational, and
  technological changes are increasing pressure on
  organizations to buy rather than to make IT
  applications and services
• Ability to exploit technology requires high
  levels of engagement and cooperation among four
  key constituencies business executives, IT
  executives, users, technology providers/partners

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Key Themes (cont.)

• Ability to ensure high levels of security,
  privacy, reliability, and availability is a core
  capability that determines organizations
  ultimate success and survival
• Over the last decade, there has been a
  fundamental shift in IT that has dramatically
  impacted the way
• People access and use technology
• Organizations exploit technology
• Technology is developed and managed

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Agenda

• Introduction Challenges of Managing in a
  Networked World
• Reference Applegate, pp.1-20.
• (1.) IS Challenges in the organization
• (2.) Themes

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(1.) Information Technology Management Challenges

• IT or ICT has always been a source of opportunity
  and uncertainty, advantage and risk.
• Business executives view
• Province of technocrats,
• something with little relevance to real-world
  business problems.
• Technology executives View
• Thinks business executives are shortsighted,
  lacking the vision to exploit all that IT has to
  offer

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Opposing views of IT function

• Business Executives view of IT
• Apprehensive
• Technocracy
• New feature focus
• Little relevance to real world

• IT executives view of Business
• Short-sighted
• Lacking in vision
• Unwilling to exploit IT

Increasingly complex IT, rapidly changing economy
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(1.) Information Technology Management Challenges

• Technology has become embedded in
• the way we define and execute strategy,
• the way we organizes and lead businesses, and
• the way we define a unique value proposition.
• IT is no longer a tool for back office activities
  but a strategic part of most businesses.
• Distance and time have become much less
  significant determinants of market and
  organization structures and processes.

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2 basic questions

• In a networked economy
• How to plan and prioritise IT investments?
• How to manage IT operations?

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Why is planning important?

• IT tends to evolve, not follow a plan
• Difficult to align IT to corporate goals
• Perception of poor value from IT
• IT considered too operational
• IT can constrain as well as enable
• IT considered a major driver of cost

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(1.) Information Technology Challenges

• The Rapid Evolution of IS/IT
• Changing both business and IT management
• IT influence in large organization is pervasive,
  affecting the smallest department and
  decision-making processes to an extent not
  visualized few years ago
• New internal organizational structures are being
  defined and responsibility are being reallocated
  in the value chain
• New Industry players are emerging (ASP, mobile
  commerce, etc.)

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(1.) Information Technology Challenges

• The Rapid Evolution of IS/IT
• Hardware constrains
• Software constrains
• Knowledge constrains
• Problem of the 50s
• IT directors constrains.

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Information Technology Challenges

• Integrating Changing Technology Platforms

Administrative Framework
Primary Target
Justification/ Purpose
Application
Challenges
Regulated Monopoly
Productivity/ Efficiency
Organization
Era I
?
?
Free Market
Individual/Group Efficiency
Era II
?
?
Individual
Enterprise and Industry Integration
Value Creation
Collaborative
Era III
?
?
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Agenda

• IS Challenges in the organization
• Themes

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Themes (pp.4-17 of previous 6th edition used last
semester!)

• 1. Market structure and Industry Dynamics
• 2. Evolving Business Models
• 3. IT Impact
• 4. Prioritizing IT Investments
• 5. Assimilation and Organizational Learning
• 6. Buy vs. Build decisions
• 7. Partnership among key Constituencies as IT
  evolves
• 8. Protecting IT Assets and Managing Risks
• 9. Pervasive computing Opportunists and Risk
• ALL PAGE NUMBERS ON FOLLOWING SLIDES REFER TO
  PREVIOUS 6th EDITION USED LAST SEMESTER!

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Theme 1 Market structure and Industry Dynamics
(p.4-6)

• The old industry value chain
• 21st century technologies are radically changing
  the way we work, play, interact, learn and build
  business.
• While this technologies have dramatically
  expanded the opportunities that can be pursed,
  the fundamental economic theories that define how
  market, industries, and organizations are built
  continue to guide executive decision making and
  actions

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Theme 1 Market structure and Industry Dynamics
(p.4-6)

• The new industry value chain
• Sequential
• Functionally organized and transitional in nature
• Vertical organization structures within
  organization boundaries
• The new industry value chain
• Process based
• Integrating the enterprise activities
• Boundaries are becoming fluid
• Partnership and the rise of virtually integrated
  industry

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Theme 2 Evolving Business Models (p.6)

• The emerging networked business models that are
  revolutionizing business and society are
  different from the Industrial business models
  that defined how companies conduct business
  throughout most of the 1990s.

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Theme 3 IT Impact (p.7-8)

• The goal for technology use influences Its
  development, operating and management
• Impact on core operations
• Impact on core strategy
• Impact
• Support, Factory, Turnaround, Strategic

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Categories of Strategic Relevance and Impact
A contingency appropriate to IT management.
High
Factory
Strategic
Totally depending on it
IT are important but they are not fundamental to
the firms ability to compete.
Strategic Impact of existing IT system
Support
Turnaround
Strategic Impact of IT on operations and
future strategy is low.
Not absolutely depending on totally
uninterrupted, fast response-time.
Low
Low
High
Strategic Impact of IT applications under
development
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The Impact of IT Figure I.4 on page
8Categories of Strategic Relevance and Impact
A contingency appropriate to IT management.
Factory
Strategic
High
Goal Improve performance of core
processes Leadership Business unit
executives Project MangementProcess
reengineering
Goal Transform the organization or
industry Leadership Senior executives or
board Project Mgt Change Management
IT Impact on core operations
Support
Turnaround
Goal Identify and launch new Ventures Leadershi
p Venture incubation unit Proj Mgt New venture
development
Goal Improve local performance Leadership Local
level oversight Project ManagementGrassroots
Experimentation
Low
Low
High
IT Impact on core strategy
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Theme 4Prioritizing IT Investment (p.8-11)

• Is IT as a budgeted expense to be justified on a
  project-by-project basis?
• Is IT an investment that must deliver benefits
  today and in the future.
• Inside the organization
• Outside the organization

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Prioritizing IT Investment Aggregate Project Plan
Minor Process change
Extensive Process change
R D Projects
Breakthrough projects
Extensive Process change
Platform Projects
Derivative projects
Minor Process change
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Theme 5Assimilation and Organizational Learning
(p.11-13)

• Successful implementation of new technology often
  requires that users learn new ways of doing
  things.

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Assimilating Emerging Technologies

• Phase I Technology Identification and Investment
• Identifying of technology of potential
  opportunity to the company and funding a pilot
  project.
• Top down vs. bottom up ISP.
• IS Planning Impact / Align
• to align MIS objectives with the organizational
  goals,
• The other approach is to impact the
  organizational strategy. That is searching for
  strategic applications with a high impact and the
  ability to create an advantage over competitors.
• Phase II Technological Learning and Adaptation
• The objective here is to encourage user-oriented
  experimentation with the newly identified
  technology.
• Through a series of user defined pilot project
• To create awareness of the new technology
• The length of phase II depends on type of
  technology, the characteristics of users, the
  nature of users tasks, and the organizational
  context.

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Assimilating Emerging Technologies

• Phase III Rationalization/Management Control
• At this stage it is reasonably well understood by
  IT personnel and users
• The basic challenge is to develop appropriate
  systems and control to ensure that the
  technologies are utilized efficiently as the
  diffuse throughout the organization
• Ensure that application are developed
  economically and can be maintained over a long
  period of time
• Failure to maintain these standards can be
  extraordinarily expensive
• Phase IV Maturity/Widespread Technology Transfer
• Required skill are developed, users are aware of
  IT benefits and management control are in place.
• Careful vigilance is required to ensure that
  out-of-date technologies and applications are not
  extended beyond their useful life

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Theme 6Buy Vs. Make (p.13-14)

• If I can buy a word-processing package why cant
  I buy an order fulfillment package
• Do I need to keep all these IT assets on my book?
  Or
• Can I outsource my data centers, helpdesk, PC
  support etc.
• Can I replace my off-the-shelf applications with
  subscriptions to IT services run by network and
  hosting services and ASPs?

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Theme 6 Make or buy decision-Table I.2 on page 15
Decision Criteria Pressure to Make/Own
Pressure to Buy
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Theme 7 Partnership among Key Constituencies as
IT Evolves (p.14-16)

• Much of the complexity of managing IT arises from
  the conflicting pressures of dealing with four
  different vitally concerned stakeholder groups
• Business executives
• IT executives
• IT users
• IT Vendors, Partners and competitors

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Theme 8 Protecting IT Assets and Managing Risks
(p.16-17)

• Reliable, secure IT infrastructure
• Integrating IT into core business processes
  introduces a host of new and challenging issues
• IT vs. electricity

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Theme 9 Pervasive Computing Opportunities and
Risks (p.17)

• 1950 - 1960
• Hardware costs and limitation of capacity and
  reliability. Limited IT personnel
• Mainframe computer, data processing center.
• Mid 1960 - Early 1980
• Difficulty in delivering reliable system on time
  and within budget, productivity of system
  developers, tools limitation.
• Introduction of PCs
• 1980- Early 1990
• Communication networks
• Powerful desktops, Laptops, internet etc.
• 2000 and beyond
• PDA, cell phones, internet, etc.

Hardware constraints
Data processing
Software constraints
Management Information Systems
Hardware constraints
User related constraints
Organization environment constraints
Strategic Information Systems
?
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Discussion

• How important is IT to the success of your
  industry / organization
• Is the firm being affected competitively either
  by failing to implement required IT applications
  or by faulty implementation of strategic
  application
• If the firm missing opportunities that, if
  properly executed, would give it a competitive
  edge or, more pessimistically, enable it to
  survive.
• Is the firm targeting its IT application
  development efforts effectively?
• Targeting the right systems and spending
  appropriate amount of dollar
• Is the IT asset of a firm being managed
  efficiently?
• Is the firms IT activity sufficiently insulated
  against the risks of a major operational
  disaster?
• Are IT and business leaders capable of dealing
  with the IT-related management challenges?
• Are IT resources appropriately placed in the firm?

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Discussion

• Do the perspective and skill of the IT team, IT
  users, and general management team fit the firms
  changing strategy and organization and the IT
  application, operating environment, and
  management processes?
• Is the firm organized to identify, evaluate, and
  assimilate new information technologies on a
  timely basis?
• Are the strategic planning, the management
  control and the project management systems
  defined and appropriately implemented and
  managed?
• Are the security, priority-setting, and control
  systems for IT operations appropriate for the
  role IT plays in the firm?
• Are appropriate organizational structures and
  coordinating mechanisms in place to ensure IT is
  appropriately aligned to the needs of the firm?

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Agenda

• IS Challenges in the organization
• Themes

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