IS577
IS Strategy and Policy
Olayele Adelakun (Ph.D)
Asso. Professor CTI
Office: Room 735 CTI 7th Floor
Phone: 312-362-8231
Fax: 312-362-6116
Email : [email protected]
Web: http://facweb.cs.depaul.edu/yele
Agenda
 Course Overview
 Expectation
 IS Challenges in the organization
 Themes
Course Overview
Objective
Course Materials
Grading
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.
Course Material
 HBR cases to be posted on COL
Grading
Class Participation
10%
Assignment 1
20%
Assignment 2
20%
Assignment 3
20%
Group project
20%
Group Assignment 1
 Up to 5 students per group.
 Conduct a research on the role of CIO in organizations
 What it is today and
 What will it be in the year 2010.
 Will CIO be obsolete
 Deliverables
 Presentation due class 8
 Written analysis 5 pages max.
 Recommendations
 Conclusion
 Resources
 http://searchcio.techtarget.com/originalContent/0,289142,sid19_gci96
3716,00.html
 http://www.cio.com/
 OR
Group Assignment 2
 Conducting an Industry Analysis
 See examples
 Deliverables
 Presentation due class 9
 Written analysis 5 pages max.
 Recommendations
 Conclusion
Question
Agenda
 Course Overview
 Expectation?
 IS Challenges in the organization
 Themes
Expectations?
Agenda
 Course Overview
 Expectation?
 Challenges of Managing in a Network
Economy
 Themes
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
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.
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 decisionmaking 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.)
Information Technology
Challenges
The Rapid Evolution of IS/IT
 Hardware constrains
 Software constrains
 Knowledge constrains
 Problem of the 50
 IT directors’ constrains.
Information Technology Challenges
 Integrating Changing Technology Platforms
Administrative
Framework
Primary
Target
Era I
Regulated
Monopoly
Organization
Era II
Free
Market
Era III
Collaborative
Justification/
Purpose
Application
Challenges
Productivity/
Efficiency
?
?
Individual
Individual/Group
Efficiency
?
?
Enterprise and
Industry Integration
Value
Creation
?
?
Agenda
 Expectations?
 Course Overview
 IS Challenges in the organization
 Themes
Theme
Market structure and Industry Dynamics
Evolving Business Models
IT Impact
Prioritizing IT Investments
Assimilation and Organizational Learning
Buy vs. Build decisions
Partnership among key Constituencies as IT
evolves
 Protecting IT Assets and Managing Risks
 Pervasive computing: Opportunists and Risk







Market structure and Industry
Dynamics
 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
Market structure and Industry
Dynamics
 The old 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
Evolving business Models
 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.
IT Impact
 The goal for technology use
influences Its development, operating
and management
 Impact on core operations
 Impact on core strategy
 Impact
 Support, Factory, Turnaround, Strategic
Categories of Strategic Relevance and Impact
A contingency appropriate to IT management.
High
Factory
Strategic Impact of
existing IT system
IT are important but they
are not fundamental to the
firms ability to compete.
Support
Strategic Impact of IT
on operations and future
strategy is low.
Low
Low
Strategic
Totally depending on it
Turnaround
Not absolutely depending on
totally uninterrupted,
fast response-time.
High
Strategic Impact of IT applications under development
Categories of Strategic Relevance and Impact
A contingency appropriate to IT management.
High
Strategic
Factory
IT Impact on
core operations
Goal: Improve performance of
core processes
Leadership: Business unit
executives
Goal: Transform the
organization or industry
Leadership: Senior executives or
board
Support
Goal: Improve local performance
Leadership: Local level
oversight
Low
Low
Turnaround
Goal: Identify and launch new
Ventures
Leadership: Venture incubation
unit
High
IT Impact on core strategy
Prioritizing IT Investment
 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
Prioritizing IT Investment:
Aggregate Project Plan
R&D
Projects
Extensive
Process
change
Minor
Process
change
Extensive
Process
change
Breakthrough
projects
Platform Projects
Minor
Process
change
Derivative
projects
Assimilation and Organizational
Learning
 Successful implementation of new
technology often requires that users
learn new ways of doing things.
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.
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
Buy Vs. Make
 If I can buy a word-processing package
why can’t 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?
Make or buy decision
Decision Criteria
Business strategy
Core competence
Information/ process
security and
confidentiality
Availability of suitable
partners
Availability of packaged
software or solutions
Cost/benefit analysis
Time frame for
implementation
Evolution and
complexity of the
technology
Ease of implementation
Pressure to “Make/Own”
IT application or infrastructure
provides proprietary
competitive advantage
Pressure to “Buy”
IT application or infrastructure
supports strategy or operations,
but is not considered strategic in
its own right
Partnership among key
Constituencies as IT evolves
 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
Protecting IT Assets and Managing
Risks
 Reliable, secure IT infrastructure
 Integrating IT into core business
processes introduces a host of new
and challenging issues
 IT vs. electricity
Pervasive Computing:
Opportunities and Risks
 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.
Hardware
constraints
Software
constraints
Hardware
constraints
Management
Information
Systems
User related
constraints
Organization
environment
constraints
 2000 and beyond
 PDA, cell phones, internet, etc.
Data
processing
?
Strategic
Information
Systems
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 firm’s 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?
Discussion
 Do the perspective and skill of the IT team, IT users, and general
management team fit the firm’s 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?
Agenda
 Expectations?
 Course Overview
 IS Challenges in the organization
 Themes