Enterprise and Global
Management of Information
Technology
Chapter 12
Copyright © 2010 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin
Learning Objectives
Identify the three components of
information technology management
–
Use examples to illustrate how they might
be implemented in a business
Explain how failures in IT management can
be reduced by the involvement of business
managers in IT planning and management
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Learning Objectives
Identify several cultural, political, and
geo-economic challenges that confront managers
in the management of global information
technologies
Explain how the trend toward a transnational
business strategy by international business
organizations affects global business/IT
strategy
Learning Objectives
Identify several considerations that affect the
choice of IT applications, IT platforms, data
access policies, and systems development
methods by a global business enterprise
Understand the fundamental concepts of
outsourcing and offshoring, as well as the
primary reasons for selecting such an
approach to IS/IT management
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Business and IT
Global e-business
E-commerce
As the 21st century unfolds, many companies are
transforming themselves into global powerhouses via
major investments in…
Other IT initiatives
Business managers and professionals must know how
to manage this vital organizational function
Components of IT Management
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The Business/IT Planning Process
The Business/IT Planning Process
Major components of business/IT planning
Strategic development
Resource management
Technology architecture
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Information Technology Architecture
The IT architecture is
a conceptual design
that includes these
major components
Technology platform
Data resources
Application architecture
IT organization
Managing the IT Function
Companies have essential applications on their
intranets, without which they cannot function
It became apparent that maintaining PCs
on a network is very, very expensive
The Internet boom inspired businesses
to connect their networks
Three things recently happenedCreated an urgent need for centralization
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Current
Centralized control over the mgmt of IT
Avnet Marshall Organizational Components
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Managing Application Development
Systems
Managing IS Operations
IS operations management
–
Concerned with the use of hardware, software,
network, and personnel resources in data
centers
Operational activities that must be managed
–
Computer system operations
–
Network management
–
Production control
–
Production support
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System Performance Monitors
Software packages that…
Features of System Performance Monitors
Chargeback
Systems
Allocates costs to
users based on
the information
operations at large
data centers
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IT Staff Planning
Evaluating employees
and rewarding good job
performance with salary
increases, promotions
Designing
career paths
Setting salary
and wage levels
Recruiting, training,
and retaining
Oversees all uses of IT
Aligns IT with strategic
business goals
Second in command
Manages the IT platform
In charge of all IT
planning/deployment
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Other IT Positions
Systems
analyst
E-commerce
architect
Chief
Security Officer
Technical
team leader
Technology Management
All IT technologies must be used as a
technology platform for integrating business
applications
–
Both internally or externally focused
–
Includes Internet, intranets, electronic
commerce, collaboration technologies, CRM
software, enterprise resource planning, and
supply chain management
Often the primary responsibility of a chief
technology officer
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Managing User Services
Business units that support and manage
end-user and workgroup computing
–
Can be done with information centers
staffed with user liaison specialists or with
Web-enabled intranet help desks
Key roles
–
Troubleshooting problems
–
Gathering and communicating information
–
Coordinating educational efforts
–
Helping with end-user application development
Outsourcing
The purchase of goods or services
from third-party partners
that were previously provided internally
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Why Companies Outsource
Offshoring
This location is typically overseas
Can be either production or service
Relocation of an organization’s business processes
to a lower-cost location
Digitization of many services
Availability of large amounts of reliable and affordable communication infrastructure
Growth of services offshoring linked to…
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Failures in IT Management
IT not used effectively
Computerizing traditional business processes instead of developing innovative e-business processes
IT not used
efficiently Poorly managed application development
Poor response times
Frequent downtime
Management Involvement & Governance
Managerial and end user involvement
–
Key ingredient to high-quality information
system performance
–
Optimizes business value of IT
Governance structures
–
Steering committees, executive councils
–
Encourages active participation in planning
and controlling business uses of IT
–
Helps avoid post-development problems
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Sr. Management’s Involvement in IT
IT Governance Approaches
Control Objectives for Information and
Technology (COBIT)
–
Framework for IT management
–
Set of generally accepted measures,
indicators, processes, and best practices
Covers four domains
–
Planning and organization
–
Acquisition and implementation
–
Delivery and support
–
Monitoring
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COBIT in Action
The International Dimension
Companies around the world are developing new models to operate competitively in a digital economy
These models are structured, yet agile,
global, yet local
Concentrates on maximizing risk-adjusted return from both knowledge
and technology assets
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Case 2: Reinsurance Group of America, Fronterrra
Consistency across the different business functions,
countries, languages, and processes in worldwide
implementations is one of the most important challenges
faced by global organizations today
Reinsurance Group of America had to develop a single
system to manage reinsurance business processes for
numerous offices around the world
–
Staffs spoke different languages, in different time
zones, and some were set in their way of managing
the business
Developing this system resulted in ROI of 15%, which
was better than expected
Case Study Questions
What is the business value of these global
system developments for the companies
mentioned in the case?
–
How did they achieve these benefits?
–
What were the major obstacles they had to
overcome?
What are the advantages and disadvantages
of a full-blown versus a phased approach for
system implementations in general, and
global ones in particular?
–
How do you decide which road to take?
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Case Study Questions
How important is that all units in global
organization speak the same business
language, and use the same functions
and business processes?
–
How do you balance the competing
needs for flexibility and consistency
across operations?
Global IT Management Dimensions
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Global IT Management Challenges
Political Challenges
Many countries regulate or prohibit the transfer of data across their national boundaries
Others severely restrict, tax, or prohibit imports of hardware and software
Some have local content laws that specify the portion of the value of a product that must be added in that country
if it is to be sold there
Others require a business to spend part of the revenue they earn in a country in that nation’s economy
Global IT Management Challenges
Geo-economic Challenges
Physical distances still a major problem
Takes too long to fly in specialists
Hard to communicate in real time across time zones
Poor telephone and telecommunications services
May be hard to find skilled local workers
Differences in the cost of living and labor costs
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Global IT Management Challenges
Cultural Challenges
Language and cultural interests
Religions and customs
Political philosophies
Cultural training needed before assignments
Work styles and business relationships
Transnational Strategies
Business depends heavily on information systems and Internet technologies to help
integrate global business activities
This requires an integrated and cooperative worldwide IT platform
Companies are moving toward
a transnational strategy
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Transnational Business/IT Strategies
Global Business Drivers
Business requirements caused by the nature
of the industry and its competitive or
environmental forces
Examples of global drivers
–
Customers
–
Products
–
Operations
–
Resources
–
Collaboration
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Global IT Platforms
Hardware Difficulties
Import
restrictions
High prices
High tariffs
Lack of
Global IT Platforms
Software Difficulties
Software publisher may
refuse to supply markets
that disregard software
licensing and copyright
agreements
Packages developed in
Europe may be
incompatible with
American or Asian
versions
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International Data Communications Issues
The Internet as a Global IT Platform
An interconnected matrix that reaches tens of millions of users in over 100 countries
Business environment free of traditional boundaries and limits
The Internet
Expand markets
Reduce communications and distribution costs Without incurring massive cost outlays for
telecommunications, companies can…
Improve profit margins
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Key Questions for Global Websites
Will you have to develop a new navigational
logic to accommodate cultural preferences?
What content will you translate, and what
content will you create from scratch to address
regional competitors or products that differ
from those in the U.S.?
Should your multilingual effort be an adjunct
to your main site, or will you make it a separate
site, perhaps with a country-specific domain?
Key Questions for Global Websites
What kinds of traditional and new media
advertising will you have to do in each country to
draw traffic to your site?
Will your site get so many hits that you’ll need to
set up a server in a local country?
What are the legal ramifications of having your
website targeted at a particular country, such as
laws on competitive behavior, treatment of
children, or privacy?
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Internet Users by World Region
Global Data Access Issues
Transborder Data Flows may be seen as violating
A nation’s sovereignty because it avoids customs duties and regulations
Laws protecting the local IT industry from competition
Laws protecting local jobs
Privacy legislation
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U.S.-E.U. Data Privacy Requirements
Key Data Privacy Provisions
Notice of purpose and use of data collected
Ability to opt out of third-party distribution of data
Access for consumers to their information
Adequate security, data integrity, and enforcement provisions
Internet Access in Restrictive Countries
The struggle between Internet censorship
and openness at the national level relates to
–
Controlling the conduits
–
Filtering the flows
–
Punishing the purveyors
Most of the world has decided that restricting
Internet access is not a viable policy
– Restricting access also hurts a country’s
opportunities for economic growth and
prosperity
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Global Government Internet Restrictions
High Government Access Fees
–
Kazakhstan, Kyrgyzstan
Government Monitored Access
–
China, Iran, Saudi Arabia, Azerbaijan,
Uzbekistan
Government Filtered Access
–
Belarus, Cuba, Iraq, Tunisia, Sierra Leone,
Tajikistan, Turkmenistan, Vietnam
No Public Access Allowed
–
Burma, Libya, North Korea
Global Systems Development
Key Development Issues
Local versus global system requirements
Getting agreement on system features
Global standardization of data definitions
Disturbances caused by systems
implementation and maintenance activities
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