Who Delivers IT Value?
IT Value is a function
of people, process,
and technology.
IT Value is also a
function of
organizational value.
Peopl
e
Process
Technology
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The Importance of IT
•New technologies coevolve
with new
business strategies and
changes to the business
environment.
• IT and business
strategies must be
complimentary.
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The
BASIC
Game
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Porter’s Competitive Forces Model
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Dimensions of IT Strategy
•Business Improvement –
•Business Enabling –
• Business Opportunities –
•Opportunity Leverage –
•Infrastructure –
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What do we know about the Business-IT
relationship in organizations ?
• It is a multifaceted interaction of people and
processes.
• It is complex. Different expectations and
accountabilities may lead to lack of trust.
• It tends to cluster into patterns of belief (e.g., ‘IT
is a ‘necessary evil’; ‘IT is a support but not a
partner’; ‘business and IT are partners’).
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Professional versus Professionalism
Profession – characterized by a systematic
body of theory, recognized professional authority,
community sanctions, a regulative code of ethics;
and a culture of norms, values, and symbols.
(Greenwood, 1965, Caplow, 1966)
Professionalism – refers to a person’s attitude
to, behavior on, and capabilities in the job.
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Information Management Drivers
Compliance
Operational effectiveness and
efficiency
Strategy
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Framework for Information Management
Stage 1: Develop an IM policy.
Stage 2: Articulate operational components.
Stage 3: Establish Information Stewardship.
Stage 4: Build Information standards
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Information Management (IM) Issues
- Culture and Behavior
- Information Risk Management
- Information Value
- Privacy
- Knowledge Management
- The Knowledge-Doing Gap
Knowledge Management
Knowledge is the Capability to
take effective Action
•Knowledge Management is
managing the Capability to take
effective Action
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Overview of the Elements of IM
Operations
① Strategy
② People
③ Processes
④ Technology and Architecture
⑤ Culture and Behaviors
⑥ Governance
Organization IT Budget
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• Planning and controlling (comparing the actual
with budgeted)
• Budgets formalize managers’ expectations about
revenue, prices, growth, customer satisfaction
and costs.
•Even small businesses and non-profit entities can
benefit making budgets.
Effective IT Budget Factors - Fiscal Discipline
- Strategy Implementation
- We will discuss these in turn
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The IT Budget and Planning Process
Figure 7.1
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Factors that Affect IT Spending Levels
Number of competitors
Uncertainty
Diversification of products and services
Affordability
Growth
Previous year’s spending
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Outsourcing Strategies - Outsourcing for operation efficiency
- Outsourcing for tactical support
- Outsourcing for strategic impact
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Outsourcing Critical Success Factors (CSF)
Use selective sourcing.
Have joint Business-IT sponsorship.
Ensure a thorough comparison with internal operations.
Develop a detailed contract.
Limit the length of the contract.
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What is Application Portfolio Management (APM)?
APM is the ongoing management process
of categorization, assessment, and
rationalization of the IT application
portfolio.
APM allows organizations to identify which
applications to maintain, invest in, replace,
or retire (i.e., avoid maintaining
applications quagmire).
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Issues with Applications Quagmire
A significant amount of IT spending is used
in these applications.
Line-of-business managers are reluctant to
change these applications to avoid the
agony of change.
They restrict the enterprise vision of IT.
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The Solution: A Portfolio Perspective
Application portfolio – identifying the
value of existing applications against
corporate profitability, stability, usability,
and technical obsolescence.
Project portfolio – identifying the value
of future spending on applications,
attempting to balance IT cost-reduction
efforts and investments to develop new IT
capabilities.
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