Organizing and Leading the Information Technology Function

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Organizing and Leading the Information Technology
Function
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Topics

• Organizing Issues in IT Development
• Pressures Toward User Dominance
• Pressure Toward IT Control
• Coordination and Location of IT Policy

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Organizing Issues in IT Development

• Two sets of tensions
• Balance between innovation and control
• Emphasis on aggressive innovation depends on
• Potential impact of IT on the firm
• General corporate willingness to take risk
• IT seen as strategic
• IT seen as helpful
• Balance between user dominance and IT dept
  dominance

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Implication of Excess IT Dominance

• Too much emphasis on DB and system maintenance
• All new systems must fit data structures of
  existing systems
• All service requests require system study with
  benefit identification
• IT designs/constructs everything
• Internal construction costs always projected to
  be less than using outside resources

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Implication of Excess IT Dominance

• IT Specializing in technical frontiers
• 80 spent on maintenance, 20 on new
• IT thinks it is in control of it all
• Portfolio of development opportunities firmly
  under IT control
• No strong user groups exist

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Implication of Excess User Dominance

• Too much emphasis on problem focus
• IT feels out of control
• Explosive growth in number of new systems/staff
• Multiple suppliers provide services
• Frequent switching between suppliers
• Lack of standardization and control over data and
  systems
• Hard evidence of benefits nonexistent
• User building networks to own unique needs
• Duplication of efforts
• Redundancy

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Case 1

• Short term user need situation, strategically
  important
• Centrally managed, successful IT dept.
• Moved to decentralization
• CAD project
• Backed by users, engineers, and management, not
  by IT
• Was reasonably successful

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Case 2

• IT control to achieve cost reduction
• Substantial investment in desktop systems
• IT encourages end-user departments to start
  using the system.
• No real plan in place
• Users experiment, some departments find uses,
  others do not
• Benefits still outweigh costs

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Case 3

• Step-by-Step Innovation
• Step 1 POS terminals in 50 stores
• Step 2 Integration with HQ systems
• May have saved costs if total integration had
  been planned from the start. However, incremental
  justification was easier.

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Case 4

• User innovation as a source of productivity
• A word processing system and an email system
  installed by a major bank
• Feature creep occurred when loan officers working
  with consultants had extra features allowing them
  access to analytical tools to be added.
• Initial justification did not include new use
• Additional costs occurred, raised concerns
• In the end, a study indicated that the additional
  costs were well justified

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Implications

• Impossible to foresee the full range of
  consequences of introducing IT systems
• Neither IT nor users have outstanding records in
  anticipating how new technologies will affect
  organizations
• Role for general management to mediate

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Pressures Toward User Dominance

• Pent-up user demand
• Growing user frustration and desire to take
  matters into their own hands
• Difficult to staff IT departments
• Staff flexibility and growth
• Users figuring out how to get the process sped up

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Pressures Toward User Dominance

• Staff professional growth
• Decentralizing IT staff puts them closer to users
• Rotating IT staff into non-IT positions
• Competitive and service growth in the IT market
• Growing number of resources for stand-alone S/W
  packages in a variety of areas that previously
  required custom development.

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Pressures Toward User Dominance

• User Control
• Development
• Users can exercise direct control over systems
  development priorities
• Bringing in outside resources and circumventing
  the corporate priority setting process
• Maintenance
• Users exercise control over maintenance
  priorities, again with outside resources, or
  using their own staffs. User departments without
  long term experience often underestimate
  maintenance needs and costs.

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Pressures Toward User Dominance

• Fit with organization
• Move to decentralized IT fits better with modern
  organizations
• User learning
• Systems develop by centralized IT dept. often
  have greater resistance to acceptance and use.

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Pressure Toward IT Control

• Staff Professionalism
• A large centralized IT staff enhances an
  organizations ability to recruit and retain
  specialized IT personnel.
• Easier to modernize a central unit
• Easier to enforce standards
• Feasibility Concerns
• User-driven feasibility studies not considered as
  accurate
• Less experienced

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Pressure Toward IT Control

• Corporate Databases
• Timing
• Abstraction of data
• Fit with Corporate Structure and Strategy
• Cost Analysis

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Coordination and Location of IT Policy

• IT Responsibilities
• Maintain long-term architectural plans
• Establish cost comparison / justification
  procedures
• Maintain IT inventory
• Establish / Maintain standards
• Provide IT career paths
• Establish internal IT marketing
• Establish H/W S/W acquisition process
• Identify and maintain preferred supplier
  relationships
• Establish educational programs
• Set up ongoing system reviews

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Coordination and Location of IT Policy

• User Responsibilities
• Understand scope of IT activities supporting the
  user
• Realistically appraise the amount of user
  personnel investment required for new projects
  (both development and operation)
• Insure comprehensive user input for all IT
  projects that will support vital aspects of the
  units oeprations
• Ensure that the IT / Group interface is
  maintained appropriately
• Periodically audit system adequacy
• Participate in development and maintenance of an
  overall IT plan.

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Coordination and Location of IT Policy

• General Management Support and Policy Overview
• Ensure appropriate balance between IT and user
  inputs
• Ensure that a comprehensive corporate OIT
  strategy is developed
• Manage the inventory of H/W and S/W resources
• Facilitate
• The creation and evolution of standards
• Transfer of technology between units
• Encourage experimentation
• Responsibility for appropriate planning and
  control system io link IT to the companys goals