Zainal A. Hasibuan, Ph.D
zhasibua@cs.ui.ac.id
Context of This Session
External Business Environment
Internal Business Environment
Internal IS/IT environment Current Applications Portfolio
External IS/IT Environment
Planning Approaches, Tools and Techniques Strategic IS/IT
Planning Process
IS/IT Management Strategy Business IS Strategies IT Strategy
Applications Portfolio Model & Matrices
We are here …
Session Objec,ves
•
To define the IT capability
•
To iden,fy IT services and IT solu,ons
•
To understand the management role in IT
supply
•
To understand the IT investment versus the
visible return
•
To consider aspects in managing infrastructure
IT Service Strategies: Change of IS Func,on
•
From a produc,on mode to a service mode
•
Produc,on (or construc,on) implied designing and
developing applica,on soDware and delivering
opera,onal systems
– Combina,ons of hardware and soDware to the business users.
Driving Forces for Change
•
Many business deliver their services or
products via IS/IT or service centers
–
IT services for internal and external users
–
Totally dependent on IS/IT
–
Affect the business performance
•
More of IT services have been outsourced
–
Defining service level agreement
–
Integral part of IS management
Factors Influence the Type Of IT Services
•
Type of IT services depend on: the nature of IS/IT ac,vi,es
(see table 8.4), how the users u,lize the service
•
Different users have different expecta,on.
– User expect high quality of services (availability, respond ,me, problem resolu,on, etc)
•
Uncertainty of user request: services are produced and
consumed simultaneously based on a user request to be
served.
•
Percep,ons of the service received—the ‘service experience’.
•
The degree of user understanding on the process of services
IT Services Classifica,on
•
Based on supply and delivery of IT
components
–
HW, SW, Applica,on
–
IT‐based ac,vi,es
•
Based on technical similari,es of ac,vi,es
–
Technology delivery
–
Maintenance services
–
Applica,on development services
Dimensions of IT Service from Customer View
•
The nature and extent of user–provider contact
involved
Classifica,on IT Service
•
Service Factory: rela,vely low user contact and a low degree of
customiza,on (back office services: security, network adm, SW
upgrade, etc)
•
Job Shop: low user contact, but high customiza,on, where much of
the work is again done in the back office, but in response to
par,cular, and possibly one‐off, user needs (back office, SW
development, vendor assessment, etc)
•
Mass Service: considerable user contact and interac,on, but low
customiza,on (help desk, training, etc).
•
Professional Services: while these are highly customized and involve
IS/IT Service Quality
• Research has been done to develop approaches to defining service quality and measuring both the technical and ‘emo,onal’ (i.e. how the user experiences the service) quality.
• Issues to consider before asking users:
– Availability
– The importance of services
– Responsiveness
• Determine the context within which the user is judging performance
The Basic Model For Assessment
The causes of the gaps (1–5) are as follows:
1. Not understanding what users expect or value due to:
– A lack of user needs analysis;
– Ineffec,ve communica,on by either or both par,es;
– Excessive bureaucracy in the IS func,on.
2. Sefng the wrong IT Service Standards due to:
– Lack of commitment to IT services by IS management;
– Percep,ons of infeasibility in mee,ng user demands;
– Inadequate task defini,on and standardiza,on or inadequate resourcing to standards set;
3. Underperformance of the service due to:
– Role ambiguity, including the user’s role in service delivery;
– Lack of resource availability;
– Lack of actual or perceived controls;
– Lack of teamwork and inappropriate resource use, or inappropriate use of the service.
4. Poor communica,on of what the service is and can deliver due to:
– A propensity to over promise and/or overreact to ‘complaints’;
– Inconsistent communica,on across the user communi,es;
5. Expecta8on versus percep8on gap due to:
– Not understanding user requirements and reasons for them;
– Users not understanding the service process and the implica,ons of their demands;
Applica,on Development and Provisioning
Strategies
• Providing new applica,ons more quickly in response to changing business demands;
• More cost‐effec,ve produc,on or acquisi,on of more types of applica,on and reduce ongoing maintenance costs;
• Increasing the quality and reliability of the soDware as it becomes integral to the business processes;
• Developing more customer‐focused applica,ons that can be used easily by untrained people;
• Devising more flexible or adaptable applica,ons than can be enhanced or modified quickly at low incremental cost;
• Providing efficient, seamless integra,on of business ac,vi,es across different applica,ons from the desktop;
Key Opera,onal Applica,ons
•
Key opera,onal systems need to be efficient and robust, to
deliver cost‐effec,ve and problem‐free use over an extended
period.
Case Of ‘Enterprise Systems’
• Replacement of exis,ng systems to sa,sfy the Y2K requirements, more cost‐effec,vely than amending all the exis,ng applica,ons;
• Replacement of non‐integrated legacy systems by integrated
applica,ons and data bases to reduce long‐term costs and provide higher quality systems that incorporate industry ‘best prac,ce’;
• Provision of applica,on architectures and business processes, to enable quick and effec,ve moves into electronic commerce and internal adop,on of e‐business prac,ces;
• In mul,na,onal or global organiza,ons, the need to expand the business by rapid replica,on of exis,ng business models, to use resources and knowledge flexibly across products, services and
A ‘Shakedown’ Phase Normally
•
How to op,mize performance through further
changes to business prac,ces and soDware
reconfigura,on;
Strategies for Managing The IT
Infrastructure
• Physical infrastructure, which consists of a range of network, hardware and base soDware products and services, deployed to enable
applica,ons and the general purpose use of technology to func,on successfully.
• Architectures, which describe the physical infrastructure and show the current and, where possible, future configura,ons.
• Policies and standards, which cover technology aspects to determine how the infrastructure, its acquisi,on, deployment and support are managed.
Problems of IT Infrastructure Management
•
It must be developed as a base for future, uncertain use
of applica,ons rather than merely matching current
business func,onality
Result From Failure To Invest In Its Development
•
Linking technology investments to business needs.
•
Iden,fying technical opportuni,es
•
IT investments by others
•
Technical implica,ons and ‘hype’
•
Business and technical awareness
Dimensions of IT Infrastructure
• Reach—the extent to which the infrastructure must enable
connec,ons across systems and plalorms among internal and external users;
Infrastructure Investments
•
Infrastructure contributes to the delivery of business benefits
in a number of different ways, and the jus,fica,on of
expenditure, either for procurement of capital items or
Five Headings As Depicted
•
Applica,on‐specific
•
To reduce costs of running and suppor,ng exis,ng
applica,ons, by using more cost‐effec,ve technology
•
To enable growth in the volume of business transac,ons
•
Changes in working prac,ces
The Main Factors Affec,ng The Technology Strategy
•
Degree of intercompany trading;
•
Similarity of products and business processes;
•
Coherence of markets served, channels of distribu,on used
and main suppliers;
•
Similarity in scale of opera,on;
•
Industry maturity and compe,,ve situa,on of units;
•
Geography, especially in interna,onal companies;
•
How corporate management exercises its control over the
units’ business strategies and ac,vi,es;
IS/IT Supply‐driven Factors
•
The economics of processing and procurement;
•
Availability of skills and human resources;
•
Availability of technologies and vendor services in different
countries and areas;
The Risk Factors
• Trea,ng IT as an undifferen,ated commodity to be outsourced
• Incomplete contrac,ng
• Lack of ac,ve management of the supplier on (a) contract and (b) rela,onship dimensions.
• Power asymmetries developing in favour of the vendor.
• Inexperienced staff.
• Outsourcing for short‐term financial restructuring or cash injec,on rather than to leverage IT assets for business advantage.
• Hidden costs.
• Managing mul,ple vendors.
• Loss of innova,ve capacity.
Strategic Intents Driving Outsourcing
•
IS improvement—‘Do IS bener’;
•
Business impact—‘use IT to achieve bener business results’;
The Business Opera,ons Dimensions
•
Cri:cal differen:ators. IT ac,vi,es that are not only cri,cal to
business opera,ons but also help to dis,nguish the business
from its compe,tors.
•
Cri:cal commodi:es. IT ac,vi,es that are cri,cal to business
opera,ons, but fail to dis,nguish the business from
compe,tors (key opera,onal applica,on areas).
•
Useful commodi:es
.
The myriad, mainly support, IT ac,vi,es
The Different Contractual Issues
•
Length of contract.
•
Service defini,on
•
Service‐level requirements specifica,ons
•
Service‐level measurement and verifica,on
•
Incen,ves for service‐level anainment
Post‐Contract Management
•
Collect fines for non‐compliance
. Some companies see a
vendor performance shorlall as an opportunity to extract
non‐monetary payback, extrac,ng some free service on the
side in lieu of penalty charges.
•
Don’t be afraid to confront the vendor
. Many companies fight
hard to win penalty provisions from vendors only to find
The Primary Categories of Services ASPs
•
Applica:ons provisioning.
•
Infrastructure opera:ons.
•
Network connec:vity.
The Future Benefits of The ASP Model
•
Reducing ‘costs of ownership’.
•
Providing more predictable costs with less financial risk.
•
Flexibility to exit or radically change opera,ng scale.
•
Quicker deployment of new applica,ons and IT capabili,es.
Summary
1. The theme of the technology strategy should always reflect how it can be deployed to add value to the business.
2. The organiza,on must be aware of how technology is being
deployed and for what purpose by others in the industry, and even in other industries.
3. It is in the technology that an organiza,on is vulnerable to undue outside pressure from IT suppliers, whose interests will not always coincide with those of the business.
