Chapter 13

Managing IT: Enterprise and Global Management

V. LECTURE NOTES
SECTION I: Managing Information Resources and Technologies
Introduction:
There is a real need for business end users to understand and know how to plan and manage
information systems and technology in an organization. Information technology capability enables
managers to manage organizational interdependence to meet business needs. Information
technology such as telecommunications, networks, powerful personal computers and information
resources are now more readily available to more managers than ever before.
Analysing CheckFree
We can learn a lot about the total cost of ownership considerations and technology architecture
choices facing many businesses today.
Take a few minutes to read it, and we will discuss it (See CheckFree in section XI).
13-1 Managers and Information Technology: [Figure 13.2]
Information technology presents managers with a major managerial challenge. The competitive
pressures of the business and technology environment of the late 1990s are forcing major firms to
rethink their use and management of information technology. Many business executives now see
information technology as an enabling technology for managing the cross-functional and
interorganizational processes that business units must have to successfully confront the
competitive measures they face.
A variety of forces that seem to be causing a significant change in the structure and distribution of
managers in organizations in which information technology plays a major role include:
1. Organizations are become more knowledge-based, composed largely of specialists who direct
and discipline their own performance through organized feedback from colleagues, customers,
and headquarters.
2. The Internet, intranets, and extranets and more cost-effective hardware and software are
enabling individuals, teams, workgroups, business units, and organizations to be wired
together in close business relationships that can provide the communication and coordination
needed in todays competitive global marketplace.
3. Decision support capability provided by information systems technology is changing the focus
of managerial decision making.
4. Managing the information systems resources of a business is no longer the sole province of
information system specialists. Instead, information resource management has become a

major responsibility of all managers.

Poor IS Performance:
The information systems function has performance problems in many organizations. For example,
information technology is not being used effectively, efficiently, or economically by many
organizations. Information technology is not being used:

Effectively - if it is used primarily to computerize traditional business processes, instead of

using it for decision support and innovative processes and products to gain competitive
advantages.

Efficiently - by information services groups that provide poor response times, frequent
downtime, incompatible systems, unintegrated data, and applications development backlogs.

Economically - if information technology costs rise faster than other costs, even though the
cost of processing each unit of data has decreased due to dramatic price reductions and
improvements in hardware and software technology.

Management Involvement and Governance: [Figure 13.4]

The experiences of successful organizations reveal that the basic ingredient of high quality
information systems performance is extensive and meaningful involvement of managers and end
users in governance of the IS function.
Proper involvement of managers in the management of IT requires the development of
governance structures that encourage the active participation of managerial end users in planning
and controlling the business uses of IT. By being involved in IT decisions that affect their business
units, managers avoid IS performance problems. Without this high degree of involvement,
managers will not be able to improve the business value of information technology. Several major
levels of management involve and governance of information technology include:

Executive Information Technology Committee

- Committee of top executives who do strategic information system planning and coordinate
the development of major information systems projects.

IT Steering Committee
- Committee of business unit managers, operating managers, and management personnel from
the information services department who oversee the progress of systems development
projects

End User Management

- Direct end user management of information technology in business units and work groups,
including participation in developing key information systems.
13-2 Organizations and Information Technology: [Figure 13.5]
To better understand the organizational impact of information technology, it is useful to view an
organization as a sociotechnical system.
The sociotechnical systems concept emphasizes that to improve an organization's performance,
managers must:
1. Change one or more of these components
2. Take into account the relationships among these interdependent components.
The basic components of a sociotechnical system include:

People: - Managers are individuals with a variety of preferences for information and diverse
capabilities for effectively using information provided to them. Information systems must
produce information products tailored to meet managers individual needs.

Task: - Tasks in many organizations have become quite complex and inefficient over time.
Information technology can play a major role in fighting organizational complexity by
supporting the reengineering of business processes.

Technology: - Technology of computer-based information systems continues to grow more

sophisticated and complex. However, this technology should not dictate the information
needs of end users in the performance of their organizational tasks. It should accommodate
the management culture and structure of each organization.

Culture: - Organizations and their subunits have a culture which is shared by managers and
other employees. They have a unique set of organizational values and styles which can range
from informal too very formal. The designs of information systems and information products
must accommodate such differences.

Structure: - Organizations structure their management, employees, and job tasks into a
variety of organizational subunits. The IS function must no longer assume a hierarchical,
centralized, organizational structure which it supports by centralizing processing power,
databases, and systems development at the corporate headquarters level. This type of
structure emphasizes gathering data into centralized databases and producing reports to meet
the information needs of functional executives.
Instead, IT must be able to support more decentralized, collaborative types of organizational
structure, which needs more interconnected intranets or client/server networks, distributed
databases, downsized computers, and systems development resources distributed to business
unit and work group levels. Thus, information technology must emphasize quick and easy

communication and collaboration among individuals, business units, and other organization
workgroups, using electronics instead of paper.
13-3 Information Resource Management: [Figure 13.7]
Information resource management has become a popular way to emphasize a major change in
the management and mission of the information systems function in many organizations. In many
organizations, IRM may be viewed as having five major dimensions:

Strategic Management
- information technology must be managed to contribute to a firm=s strategic objectives and
competitive advantages, not just for operational efficiency or decision making.

Operational Management
- information technology and information systems can be managed by functional organizational
structures and managerial techniques commonly used throughout other business units.

Resource Management
- data and information, hardware and software, telecommunications networks, and IS
personnel are vital organizational resources that must be managed like other business assets.

Technology Management
- all technologies that process, store, and communicate data and information throughout the
enterprise should be managed as integrated systems of organizational resources.

Distributed Management
- managing the use of information technology and information system resources in business
units or workgroups is a key responsibility of their managers, no matter what their function or
level in the organization.

13-4 Strategic Management:

The IS function must manage information technology so that it makes major contributions to the
profitability and strategic objectives of the firm. Thus, the information systems function must
change from an information services utility focussed only on serving a firms transaction
processing or decision support needs. Instead it must become a producer or packager of
information products or an enabler of organizational structures and business processes that can
give a firm a comparative advantage over its competitors.
The Chief Information Officer:
Many companies have created a senior management position, the chief information officer
(CIO), to oversee the use of IT. The CIO has three main responsibilities:

1. Oversee the support services of traditional computer services, telecommunications, office

automation systems, and other IS technology support services.
2. Concentrates on long-term planning and strategy. CIO does not direct day-to-day information
service activities.
3. Works with other top executives to develop strategic information systems that help make the
firm more competitive in the marketplace.
The instructor should point out to students that many organizations have filled the CIO position
with executives from outside the IS field to emphasize the strategic business role of information
technology.
13-5 Operational Management:
The IRM concept stresses that managerial functions and techniques and organizational structures
common to most businesses can be used to manage information technology. Business and IS
managers can use managerial techniques (such as planning models, financial budgets, and project
management), and a mix of functional and process-based work groups and business units, just as
they do in other major areas of business.
The information systems function is treated like other functions and expected to use the
managerial techniques employed by other business units to manage its resources and activities.
Information services departments perform several basic functions and activities. These can be
grouped into three basic IS functions:
1. Systems development
2. Operations
3. Technical services
Centralization versus Decentralization:
Modern computer-based information systems can support either the centralization or
decentralization of information systems operations and decision-making within computer-using
organizations.

Centralized computer facilities:

1. Can connect all parts of an organization by telecommunications networks to allow top
management to centralize decision making formerly done by lower levels of management.
2. Can promote centralization of operations, which reduces the number of branch offices,
manufacturing plants, warehouses, and other work sites needed by the firm.
Decentralized computer facilities:
1. Distributed networks of computers at multiple work sites can allow top management to
delegate more decision making to middle managers.
2. Management can decentralize operations by increasing the number of branch offices while still

having access to the information and communications capabilities they need to control the
overall direction of the organization.
Information technology can encourage either the centralization or decentralization of information
systems, business operations, and management.
A firms organizational structure and information systems architecture are influenced by:
1. The philosophy of top management
2. The culture of the organization
3. The need to reengineer its operations
4. The use of aggressive or conservative competitive strategies
Changing Trends:
Companies continue to use a variety of organizational arrangements for the delivery of
information services. Some of the changing trends include:
1. In the early years of computing, when computers could barely handle a single departments
workload, decentralization was the only option.
2. The development of large mainframe computers, telecommunications, and terminals caused a
centralization of computer hardware, software, databases, and IS specialists at the corporate
level of organizations.
3. The development of minicomputers and microcomputers accelerated a downsizing trend back
toward decentralization. Distributed client/server networks at the corporate, department,
workgroup, and team levels came into being. This prompted a shift of databases and
information specialists to some departments, and the creation of information centres to
support end user computing.
4. Lately, the trend has been to establish tighter control over the information resources of an
organization, while still serving the strategic needs of its business units. This has resulted in a
centralizing trend at some organizations, and the development of hybrid structures with both
centralized and decentralized components at others.
5. Some organizations have spun off there is functions into IS subsidiaries that offer information
processing services to extended organizations as well as to their parent company.

6. Some organizations have resorted to outsourcing, that is, turned over all or part of there is
operations to outside contractors known as system integrators or facilities management
companies.
Managing Systems Development:
Systems development management means managing activities such as systems analysis and
design, prototyping, applications programming, project management, quality assurance, and
system maintenance for all major business/IT development projects. Planning, organizing, and
controlling the systems development function of an information services department is a major
managerial responsibility. It requires managing the activities of teams of systems analysts,
programmers, and end users working on a variety of information systems development projects.
In addition, some systems development groups have established development centres, staffed

with consultants to the professional programmers and systems analysts in their organizations.
Managing IS Operations:
IS operations management is concerned with the use of hardware, software, network, and
personnel resources in the corporate or business unit data centres (computer centres) of an
organization. Operational activities that must be managed include data entry, equipment
operations, production control, and production support.
Many operations management activities are being automated by the use of software packages for
computer system performance management. These system performance monitors
1. Monitor the process of computer jobs
2. Helps develop a planned schedule of computer operations that can optimize computer system
performance
3. Produce detailed statistics that are invaluable for effective planning and control of computer
capacity.
4. Supply information needed by chargeback systems, that allocate costs to users based on the
information services rendered.
5. Process control capabilities which monitor and control computer operations at large data
centres.
13-6 Resource Management
Data and information, hardware and software, telecommunications networks, and IS personnel
are valuable resources that should be managed for the benefit of the entire organization.

Human Resource Management of IT

The success or failure of an information services organization rests heavily on the quality of its
people. Managing information services functions involves the management of managerial,
technical, and clerical personnel. One of the most important jobs of information service managers
is to recruit qualified personnel and to develop, organize, and direct the capabilities of existing
personnel. For example:
1. Employees must be continually trained to keep up with the latest developments in a fastmoving and highly technical field.
2. Employee job performance must be continually evaluated and outstanding performances
rewarded with salary increases or promotions.
3. Salary and wage levels must be set, and career paths must be designed so individuals can move
to new jobs through promotion and transfer as they gain in seniority and expertise.
Careers in Information Systems:

Computers and their use in information systems have created interesting, highly-paid, and
challenging career opportunities for millions of men and women. Employment opportunities in
the field of computers and information technology are excellent, as organizations continue to
expand their use of information technology.
13-7 Technology Management
All technologies that process, store, and deliver data and information throughout the enterprise
must be managed as integrated systems of organizational resources. Such technologies include
the Internet, intranets, and electronic commerce and collaboration systems, as well as traditional
computer-based information processing. These "islands of technology" are bridged by IRM and
become a primary responsibility of the CIO, since he is in charge of all information technology
services.
Network Management:
The rapid growth of the Internet, intranets, extranets, and client/server networks has made
network management a major technology management function. This function is responsible for
managing a companys Internet access, intranets and extranets, and the wide area networks and
interconnected local area networks of client/server computing. These networks require:
1. The major commitment of hardware and software resources.
2. The creation of managerial and staff positions to manager their use.
Network management is responsible for overseeing the quality of all the telecommunications
services that most businesses rely on today.

Network managers:
1. Are usually responsible for evaluating and recommending the acquisition of Internet service
providers, Internet and intranet servers and web browser suites, and communications hardware
and software for workgroup and corporate client/server networks.
2. Work with business unit manager to improve the design, operational quality, and security of t
he organizations telecommunications networks and servers.
3. Monitor and evaluate Internet, intranet, and other network usage, telecommunications
processors, network control software, and other network hardware and software resources to
ensure a proper level of service to the users of a network.
Advanced Technology Management:
Developments in information systems technology have had, and will continue to have, a major
impact on the operations, costs, management work environment, and competitive position of
many organizations. Therefore, many firms established separate groups (advanced technology
groups - ATGs) to identify, introduce, and monitor the assimilation of new information systems
technologies into their organizations, especially those with a high payoff potential. These
organizational units are called technology management, emerging technologies, or advanced
technology groups.

13-8 Distributed Management

Responsibility for managing information technology is increasingly being distributed to the
managers of an organization at all levels and in all functions. Information resource management is
not just the responsibility of an organization's CIO. If youre a manager, IRM is one of your
responsibilities, whether you are a manager of a company, a department, a workgroup, or a
functional area. This is especially true as the Internet, intranets, and client/server networks drive
the responsibility for managing information systems out to all of an organizations functional and
workgroup managers.
Managerial End User Computing:
The number of end users in organizations who use computers to help them do their jobs has
outstripped the capacity of many information services departments. As a result, teams and
workgroups of end users must use PC workstations, software packages, and the Internet,
intranets, and other networks to develop and apply information technology to their work
activities. Organizations have responded by:
1. Creating end user services, or client services, function to support and manage end users.
2. Establish an information centres group staffed with user liaison specialists, or help desks,
with end user hot-lines.
3. Distributed end user support specialities to departments and other work groups.

4. Establish and enforce policies concerning the acquisition of hardware and software by end
users. This ensures their compatibility with existing hardware and software systems, and
network connectivity standards. Policies ensure that proper controls are enforced to correct
performance and safeguard the integrity of corporate and departmental networks and
databases.
Managing Internet Access:
Managing Internet access within organizations is a major new management responsibility.
Providing Internet access to employees raises several challenging managerial issues. Examples
include:
1. Heavy Internet use by employees can overrun the capacity of client/server networks. Many
networks were not designed to handle the large network loads generated by World Wide Web
multimedia traffic and other Internet uses.
2. Questions concerning legitimate work time use of the Internet by employees, and liability for
the contents of employee E-mail on the Net.
SECTION II: Global Information Technology Management
13-9 The International Dimension:

International dimensions are becoming more and more important in managing a business in the
global economies and markets of today. Properly designed and managed information systems
using appropriate information technologies are a key ingredient in international business,
providing vital information resources needed to support business activities in global markets.
13-10Global IT Management: [Figure 13.21]
The major dimensions of the job of managing global information technology include:
1. Business IT Strategies
2. Application Portfolios
3. Technology Platforms
4. Data Management
5. Systems Development
Stress to the students that all global IT activities must be adjusted to take into account the
cultural, political, and geoeconomic challenges that exist in the international business community.
Developing appropriate business and IT strategies for the global marketplace should be the first
step in global IT management. Once that is done, end user and IS managers can move on to

Developing the portfolio of applications needed to support business/IT strategies;

The hardware, software, and telecommunications technology platforms to support those
applications
The data management methods to provide necessary databases
The systems development projects that will produce the global information systems required.

13-11Cultural, Political, and Geoeconomic Challenges:

Global IT management does not exist in a vacuum. Global IT management must focus on
developing global business IT strategies and managing global application portfolios, technologies,
platforms, databases, and systems development projects. Managers must also take into account
the cultural, political, and geographic differences that exist when doing business internationally.
Political Challenge: - Political challenges facing global business and IT managers include:
1. Many countries have rules regulating or prohibiting transfer of data across their national
boundaries (transborder data flows), especially information such as personnel records.
2. Restrict, tax, or prohibit imports of hardware and software.
3. 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.
4. Reciprocal trade agreements that require a business to spend part of the revenue they earn in
the country in that nation=s economy.

Geoeconomic Challenges: Geoeconomic challenges in global business and IT refer to the

effects of geography on the economic realities of international business activities. These
challenges include:

1.
2.
3.
4.

Physical distances involved are still a major problem

Worlds 24 time zones contribute to communications problems
Lack of telecommunication capabilities in some countries
Lack of specialized job skills in some countries, or enticing specialists from other countries to
live and work there
5. Cost of living and labour costs in various countries.
Cultural Challenges: - Cultural challenges facing global business and IT managers include:
1. Differences in languages, cultural interests, religions, customs, social attitudes, and political
philosophies.
2. Differences in work styles and business relationships.

13-12The Global Company:

A global company is one which balances its strategies and activities to ensure that it is serving
customers in each locality with sensitivity and excellence, while still implementing a whole-world
strategy that serves its global customers with excellence.
13-13Global Business and IT Strategies:
Many firms are moving toward transnational strategies in which they integrate their global
business activities through close cooperation and interdependence between their international
subsidiaries and their corporate headquarters.
Businesses are moving away from:
1. Multinational strategies where foreign subsidiaries operate autonomously
2. International strategies in which foreign subsidiaries are autonomous but are dependent on
headquarters for new processes, products, and ideas.
3. Global strategies, where a companys worldwide operations are closely managed by corporate
headquarters.
In a transnational approach, a business depends heavily on its information systems and appropriate
information technologies to help it integrate its global business activities. A transnational business
tries to develop an integrated and cooperative worldwide hardware, software, and
telecommunications architecture for its IT platform.
13-14Global Business and IT Applications [Figure 13.26]
The applications of information technology developed by global companies depend on their
business and IT strategies and their expertise and experience in IT. However, their IT applications
also depend on a variety of global business drivers, that is, business requirements (business

drivers) caused by the nature of the industry and its competitive or environmental forces.
Examples include airlines and hotel chains with global customers, that is, customers who travel
widely or have global operations. Such companies well need global IT capabilities for online
transaction processing so they can provide fast, convenient customer service to their customers or
face losing them to their competitors. The economies of scale provided by global business
operations are another business driver that requires the support of global IT applications.
Business drivers for global IT applications include:
1. Global Customers
2. Global Products

3. Global Operations
4. Global Resources
5. Global Collaboration
13-15Global IT Platforms:
The choice of technology platforms (also called the technology infrastructure) is another major
dimension of global IT management. Technology platforms required to support a global business
operation must consider:

Hardware Choices:
Hardware choices are difficult in some countries because of:
1. High prices
2. High tariffs
3. Import restrictions
4. Long lead times for government approvals
5. Lack of local service or spare parts
6. Lack of documentation tailored to local conditions.

Software Choices:
Software choices are difficult in some countries because of:
1. Packages developed in one country may not be compatible with another countrys version
2. Well-known packages may be unavailable because there is no local distributor
3. Software publishers may refuse to supply markets that disregard software
licensing/copyright.

Establishing Computing Facilities internationally:

Establishing global computing facilities is a problem because:
1. Requirements to establish additional data centres in subsidiaries in other countries.
2. Data centres must meet local and regional computing needs
3. Global computing requires satellite links.
4. Support required from headquarters for hardware, software, maintenance, and security.

The Internet as a Global IT Platform:

Decisions about telecommunications networks are vital to establishing a technology platform for
any company and present major challenges in global IT management. Obviously, global networks
like the Internet that cross many international boundaries can make such issues even more
challenging and strategic.

The Internet and the World Wide Web have become vital components in international business and
commerce. Within a few years, the Internet, with its interconnected networks of thousands of
networks of computers and databases has established itself as a technology platform free of many
traditional international boundaries and limits. By connecting their businesses to this online global
infrastructure, companies can:
1. Expand their markets
2. Reduce communications and distribution costs
3. Improve their profit margins without massive cost outlays for new telecommunications
facilities.
13-16Global Data Issues:
Global data issues have been a subject of political controversy and technology barriers in global
business operations for many years. Important global data issues involve:
1. Transborder data flows (TDF), in which business data flows across international borders over
the telecommunications networks of global information systems.
2. Many countries view transborder data flows as violating their national sovereignty because
TDF avoids custom duties and regulations for the import and export of goods and services.
3. Other countries may view TDF as a violation of privacy legislation when data about individuals
is moved out of a country without stringent privacy safeguards.
4. Others view TDF as violating local laws made to protect local IT industry from competition, or
labour regulations for protecting local jobs.
5. Other important data issues are concerned with global data management and standardization of
data. Common data definitions are necessary for sharing data among the parts of an
international business. Differences in language, culture, and technology platforms can make
global data standardization quite difficult.
13-17Global Systems Development:
Reaching agreement on systems requirements is always difficult, but becomes many times more
difficult when the users and developers are in different countries. Some of these issues involve:
1. Conflicts over local versus global system requirements, and difficulties in agreeing on common
features such as multilingual user interfaces and flexible design standards.
2. Agreements on global systems must take place in an environment that promotes involvement
and ownership of a system by local end users.
3. Disturbances can arise from systems implementation and maintenance activities.

4. Trade-offs must be made between developing one system that can run on multiple computer
and operating platforms, by letting each local site customize the software for its own platform.

Systems Development Strategies:

Strategies to solve some of the problems of global systems development include:
1. Transforming an application used by the home office into a global application.
2. Setting up a multinational development team with key people from several subsidiaries to
ensure that the system design meets the needs of the local sites as well as corporate
headquarters.
3. Parallel development. Parts of a system are assigned to different subsidiaries and the home
office to develop at the same time, based n the expertise and experiences at each site.
4. Centres of excellence. An entire system may be assigned for development to a particular
subsidiary based on their expertise in the business or technical dimensions needed for
successful development.
13-18You and Global IT Management:
As a managerial end user you may be required to assist in implementing a global IT strategy.
Some of the steps you might consider:
1. Discover if your company has a global business strategy and a strategy for how IT can support
global business operations.
2. Assist in developing IT applications to support your global business activities.
3. Be sensitive to global cultural, political, and geoeconomic realities.
VI. KEY TERMS AND CONCEPTS - DEFINED
Centralization or
Decentralization:
Centralization or
Decentralization: IS

Modern computer-based information systems can support

either the centralization or
decentralization of information systems operations and
decision-making within computer-using organizations.
IS resources can be distributed throughout an
organization or consolidated in corporate data centres.

Centralization or
Decentralization:
Operations & Management

Information systems can help management centralize

operations or IS can help in decentralizing operations.

Chargeback Systems

Methods of allocating costs to end user

departments based on the information services rendered
and information system resources utilized.

Chief Information Officer

A senior management position that oversees all

information technology for a firm, concentrating on longrange information system planning and strategy.

Cultural, Political, and

Geoeconomic Challenges

Differences in customs, governmental, regulations,

and the cost of living in different countries.

Data Centre

An organizational unit which uses

centralized computing resources to perform information
processing activities for an organization. Also known as a
computer centre.

Development Centre

Systems development consultant groups

formed to serve as consultants to the professional
programmers and systems analysts of an organization to
improve their application development efforts.

Downsizing

Many organizations are

downsizing from the use of large computer systems to
networks of small computers.

End User Services

Consulting and training services

provided to end users in an organization.

Global Business Drivers

These include global customers, products,

operations, resources, and collaboration.

Global Company

A global company is one which balances

its strategies and activities to ensure that it is serving
customers in each locality with sensitivity and excellence,
while still implementing a whole-world strategy that serves
its global customers with excellence.
The use of computer-based information systems and
telecommunications networks using a variety of
information technologies to support global business
operations and management.

Global Information Technology

Global IT Management

Dimensions of global IT management include:

1) Business IT Strategies, 2) Application Portfolios,
3) Technology Platforms, 4) Data Management, and
5) Systems Development

Global IT Management:
Applications

IT applications may depend on business

requirements (business drivers)
caused by the nature of the industry and its competitive
environmental forces. Business drivers for global IT
applications include: 1) Global Customers, 2) Global
Products, 3) Global Operations, 4) Global Resources, and
5) Global Collaboration.

Global IT Management:
Business/IT Strategies

Many firms are moving toward transnational

business strategies in which they integrate
their global business activities through close cooperation
and interdependence between their international
subsidiaries and their corporate headquarters.

Global IT Management:
Data Issues

Global IT and end user managers must deal with

restrictions on the availability of
hardware and software, restrictions on transborder data
flows (TDF) and movement of personal data and
difficulties with developing common data definitions and
system requirements.

Global IT Management:
IT Platforms

The choice of technology platforms (also called the

technology infrastructure) is a
major dimension of global IT management. Technology
platforms required to support a global business operation
must consider include: 1) Hardware choices, 2) Software
choices,
3) Telecommunications networks, and 4) Computing
facilities

Global IT Management:
Systems Development

Database management methods have to be developed and

systems development projects have to be
managed in order to produce the global information
systems that are required to compete successfully in the
global marketplace.

Human Resource Management

of Information Technology

Reaching agreement on systems requirements is always

difficult, but becomes many times more difficult
when the users and developers are in different countries.
Strategies must be developed in order to solve some of the
problems of global systems development.

Impact of IT

Managers now have a lot of

information, information processing power, and
responsibility for information systems.

Impact of IT:
On Management

Managers now have a lot of information,

information processing power, and
responsibility for information systems.

Impact of IT:
On Organizations

Information technology affects the people, tasks,

technology, culture, and structure of
organizations which affects how it will organize and use
information technology.

Information Centre

A support facility for the end users of an

organization. It allows users to learn to develop their own
application programs and to accomplish their own
information processing tasks. End users are provided with
hardware support, software support, and people support
(trained as consultants).

IRM

A management concept
that views data, information, and computer resources
(computer hardware, software, and personnel) as valuable
organizational resources that should be efficiently,
economically, and effectively managed for the benefit of
the entire organization.

Five Dimensions of IRM

The five dimensions of IRM include: 1)

Strategic management, 2) Resource management, 3)
Functional management, 4) Technology management, 5)
Distributed management.

Information Services Functions

Includes systems development, operations, and

technical services.

Information Systems Performance

Managers must ensure that IT is being effectively,

efficiently, and economically in their organizations

Management Involvement

The experiences of successful organizations

reveal that the basic ingredient of high quality information
systems performance is extensive and meaningful
management involvement.

Operations Management

Includes the management of activities such as

data entry, equipment operations, production control, and
production support.

Organizations as

To better understand the organizational impact of

Sociotechnical Systems

information technology, it is useful to view an

organization as a sociotechnical system in which people,
tasks, technology, culture, and structure are the basic
components. To improve an organizations performance,
managers must (1) change one or more of these
components and (2) take into account the relationships
among these interdependent components.

Outsourcing IS Operations

Turning over all or part of an organizations

information systems operation to outside contractors,
known as systems integrators or facilities management
companies.

Systems Performance Monitor

A software package that automates many of the

operations management activities.

Systems Development
Management

Managing systems development requires the planning,

organizing, and controlling of
systems analysis, programming, and end user activities
related to various IS development projects, and thus
requires a project management effort.

Technology Management

The establishment of organizational groups to

identify, introduce, and monitor the assimilation of new
information system technologies into organizations.

Telecommunications Network
Management

The management of development, administration, and

maintenance of
telecommunications networks and their hardware and
software.

Transborder Data Flows

The flow of business data over

telecommunications networks across international borders.

Transnational Strategy

A management approach in which an

organization integrates its global business activities
through close cooperation and interdependence among its
headquarters operations and international subsidiaries, and
its use of appropriate global information technologies.

VII. REVIEW QUIZ - Match one of the key terms and concepts

1. [14a] Impact of IT on Management

2. [14b] Impact of IT on Organizations
3. [ 1a ] Centralization/Decentralization IS
4. [ 1b ] Operations and Management
5. [ 16 ] IRM
6. [16a] Five Dimensions of IRM
7. [18 ] Information Systems Performance
8. [19 ] Management Involvement
9. [ 8 ] End User Services
10. [17 ] Information Services Functions
11. [ 3 ]
12. [24 ]
13. [20 ]
14. [ 5 ]
15. [ 6 ]
16. [15 ]
17. [25 ]

Chief Information Officer

Systems Development Management
Operations Management
Data Centre
Development Centre
Information Centre
Technology Management

18. [22 ] Outsourcing IS Operations

19. [26 ] Telecom. Network Management
20. [23 ] System Performance Monitor
21. [ 2 ] Chargeback Systems
22. [13 ] HRM of IT
23. [ 7 ] Downsizing
24. [10 ] Global Company
25. [11 ] Global Information Technology
26. [28 ] Transnational Strategy
27. [ 4 ] Cultural, Political,
&Geoeconomic
28. [ 9 ] Global Business Drivers
29. [12a] Global IT - Applications
30. [12b] Global IT - Business/IT Strategies
31. [12c] Global IT - Data Issues
32 [12d] Global IT - IT Platforms
33. [12e] Global IT - Systems Development
34. [27 ] Transborder Data Flows

VIII. ANSWERS TO DISCUSSION QUESTIONS

1. What has been the impact of information technology on the work relationships, activities, and
resources of managers?
Information technology is a major force for organizational and managerial change. Due to
telecommunications networks and personal computers, computing power and information
resources are now more readily available to more managers than ever before. Managing the
information systems resources of a business is no longer the sole province of information
systems specialists. Instead, information resource management has become a major
responsibility of managers.
2. What can end user managers do about performance problems in the use of information
technology and the development and operation of information systems in a business?
Extensive and meaningful management involvement in information systems is important.
Management can get involved through executive information services committees,
management steering committees, and through end user management of IT.

3. Refer to the Real World Case on The Home Depot in the chapter. Why has the hybrid
centralized/decentralized IS management model become the emerging best practices model
for international companies with distributed units?

The hybrid centralized/decentralized IS management model has become Athe emerging best
practices model for international companies with distributed units, as it combines aspects and
benefits of both centralized and decentralized systems. Centralized in that there is corporate
control over the systems, and decentralized in that it still allows for managers to exercise some
flexibility in their own business units.
4. How is information technology affecting the structure and work roles of modern organization?
For example, will middle management wither away? Will companies consist primarily of selfdirected project teams of knowledge workers? Explain your answer.
Computer-based information systems can encourage either centralization or decentralization.
The philosophy of top management, the culture of the organization, the need to reengineer its
operations, and its use of aggressive or conservative competitive strategies all play major roles
with IT in shaping the firms organizational structure.
5. Should the IS function in a business be centralized or decentralized? What recent
developments support your answer?
The development of minicomputers and microcomputers accelerated a trend back toward
decentralization. Distributed processing networks and the creation of information centres to
support end user computing came about. Lately, the trend has been to establish tighter control
over the information resources of an organization, which has resulted in a re-centralizing trend
at some organizations, and the development of hybrid structures at others. Some organizations
have spun off there is functions into IS subsidiaries, and some organizations have resorted to
outsourcing, i.e. have turned over there is operations to outside system integrators.
6. Refer to the Real World Case on 3M, Whirlpool, and Groupe Schneider in the chapter. Why
has Steve Little found that the biggest issues are cultural and political barriers in global IT
management? What can be done to settle such issues?
Steve Little is part of a global company. Certainly issues like cultural and political barriers are
some of the biggest barriers to overcome. To settle such issues, consideration must be made to
allow each unit to work as autonomous units, while at the same time ensuring that they
adhering to established global standards.
7. How will the Internet, intranets, and extranets change how companies do global IT
management, as illustrated in Figure 13.21? Give several examples.
Students answers will vary.
8. How might cultural, political, or geoeconomic challenges affect a global companys use of the
Internet? Give several examples.
Students answers will vary.
9. Will the increasing use of the Internet by firms with global business operations change their
move toward a transnational business strategy? Explain.

There appears to be no doubt that the increasing use of the Internet by firms with global
operations will result in changing their move toward a transnational business strategy. As firms
increasingly extend their product offerings into the global marketplace in order to compete,
they will have little choice but to develop a transnational business strategy in order to survive.
10. How might the Internet, intranets, and extranets affect the business drivers or requirements
responsible for a companys use of global IT, as shown in Figure 13.26? Give several examples
to illustrate your answer.
Business drivers include global customers, products, operations, resources, and collaboration.
IT applications may depend on such drivers. For example, airlines and hotel chains with global
customers need global IT capabilities for online transaction processing. Other examples
include companies who have products that are available worldwide, and that requires
telecommunication capabilities to coordinate global marketing campaigns.