Ism Chapter 6

MIS
M AN AG IN G I NFORM AT I ON S YSTEMS IN B USINESS ,

G OVERNMENT AND S OCIETY
Rahul De
Copyright © 2018 by Wiley India Pvt. Ltd., 4436/7, Ansari Road, Daryaganj, New Delhi-110002
L EARNING O BJECTIVES
• Learn about challenges of managing the IT function
• The role of the CIO
• Vendor Management
• Understand IT Governance
MIS : Managing Information Systems in Business, Government and Society by Rahul De

2 Copyright © 2018 by Wiley India Pvt. Ltd., 4436/7, Ansari Road, Daryaganj, New Delhi-110002
M INDMAP O F C HAPTER TOPICS

C HALLENGES OF M ANAGING THE IT FUNCTION
The modern IT Environment is dynamic and changing, with technology leading

changes in both the competitive space and in the internal functions of the organisation.
Introduction of IT in the organisation, has -
First-order impacts felt immediately, leading to

Increased speed, accuracy and efficiency [ IRCTC, SAP Implementation,,..]
Second-order impacts arise by rendering manual processes redundant leading to

medium term impact like,
Restructuring of the organisation including re-assignment and retraining of

employees affecting the firm's competitive position [IT in Banks, Airports,]
Third-order impacts are felt over time, leading to industry restructuring

 [ eBusiness in Auto Industry, 3PL, Self-service in Service Industry,..]

CHALLENGES OF MANAGING THE IT FUNCTION: MODERN IT ENVIRONMENT

CHALLENGES OF MANAGING THE IT FUNCTION : CENTRALISED VS DECENTRALISED
Centralization – Where an organisation's IT infrastructure is located and managed from
a central point. All functions and applications are accessed by departments and units
from this centre, making standardisation key
Decentralization – Where an organisation's IT infrastructure is distributed across

departments and functional units. Each unit manages IT on its own, hence is flexible
and supports innovation, allowing multiplicity of standards or no standards at all
IT infrastructure has to support the organisational culture
Trade-offs :
Speed of decision making (Technology, Vendor,..)
Enforcing of Standards and Security norms
Best-of-Breed technology (leading to plethora of technologies)
Local Vendors v/s National or Global vendors
Innovation within IT and with Business !
Job-satisfaction of IT Staff
C ENTRALISATION VERSUS D ECENRALISATION
Companies may be very Local or very Global in terms of their Operations and
Markets. Does it have any implications on centralization or otherwise ?

C ENTRALISED VS D ECENTRALISED : S TANDARDISATION
• A Standard is an externally defined set of parameters that specify hardware and
software in an organisation
• Data standardisation ?? makes sharing easy, though it implies lock-in to specific

software, which in turn makes switching costs, in moving to other standards, very high
• Standardisation, when driven from the centre, excludes employees from the decision-
making process
Can IT Systems make a Decentralized organization work in a centralized way ??

And Vice-versa also ??

C HALLENGES OF M ANAGING THE IT FUNCTION : IT S ECURITY
Security is one of the most difficult challenges of managing modern IT infrastructure,
consuming up to 50% of the total IT budget ??
• External Threats – Malware – Viruses and worms; human threat; phishing

• Internal Threats
• Managing Security – Authentication and monitoring; issues of breach of privacy;
the need to have a security level not too high that it slows down the organisation;
but not too low as to make the organisation vulnerable to threats

T HE R OLE OF THE CIO
The Chief Information Officer (CIO) participates in high-level decision making about the
management of the organisation's IT infrastructure and is responsible for -
Emerging Role of Expectations from CIO of a Modern
• Information Systems (IS) Plan
Organization :
 Business Partner and Value Creator
• Vendor Coordination  Digital Champion and Mentor
 Board Member
• Technology Updates / Refresh  IT Roadmap Leading to Business Roadmap
• ROI of Technology – specifies the increase in revenues or other benefits realised

from an investment - the CIO computes it for the organisation's IT investments
Tangible v/s Intangible Returns or Benefits ! How to measure ??

• Improved Market perception, employee and customer satisfaction ??
• How much is IT’s Share ??
Business Value of IT !
• What will be the IMPACT on Business IF IT IS SUDDENLY REMOVED ??
• Is every Application is of Equal Value ?

CHALLENGES OF MANAGING THE IT FUNCTION: TECHNOLOGY SELECTION
Technology most appropriate for the organisation is decided based on -
Cost – the price at which the technology can be acquired
Scalability – can it scale to meet the growth needs?
Interoperability – ease of use with existing technology
Security – is it secure w.r.t the organisation's activities
Maturity – how mature is it? Is it well- tested? What's the associated risk?
Upgrades – How will it mature further and how will it integrate with existing
technologies?
How will you Rank above criteria for a company which is (a) Old and had some
Legacy technology in place (b) Start-up

T ECHNOLOGY SELECTION CRITERIA

V ENDOR M ANAGEMENT
Vendors are critical to organizations who manage their own IT
• Vendor Selection Vendor for what ?

- Suppliers – H/W, S/W
• Initial Screening
- Service Providers :
• Capability presentations - Application Development
- Package Installation
• Site visits
- Infrastructure Maintenance
• Technical and commercial bids - Application Maintenance
- Keeping the Lights On
- Help-Desk
- Bug-fixing
- Enhancements
- Upgrades

V ENDOR M ANAGEMENT
• Vendor Contracts and Service levels
• Service Level Agreements Single Vendor or Consortium ?

• Service Guarantees ( SBI Case study in the book )
• Ongoing Relationship Management

• Point of Contact
• Reporting
• Vendor Retention and Termination
• Assessment on adequacy of services

IT G OVERNANCE
IT Governance – a high-level specification of who makes IT decisions in an

organisation
• IT principles- High-level ideas about the Role of IT
 Objectives aligned with Strategy
 Demand-Supply Principles
• IT Architecture
 Blueprint of hardware, software and networks
 Open Source or Proprietary or Mixed
• IT Services – Common Functions require throughout the organisation
 Help Desk, Email Services, Security, etc
• Business application
 ERP, SCM, CRM, HRMS
• IT Budgets – Money allocated for spending on IT16
 Discretionary and Non-Discretionary Spends !

IT G OVERNANCE : A RCHETYPES
• IT governance archetypes refer to the models used for decision making, involving
different individuals and groups, to address IT Governance -
• Business Monarchy – All decision-making powers are held by business heads of the
organisation; the CIO may be included
• IT Monarchy – the head of IT solely makes decisions with other senior people from
the IT function

• Feudal – Decisions are taken by the Unit or Divisional Heads
• Federal – Decisions made jointly by business heads and unit heads; may or may not
include IT Heads
• IT Duopoly – Decisions jointly taken by IT Heads and Business Unit Heads
• Anarchy -Need-based decisions taken by users at the lower level; no higher

oversight or control
Which Archetype is Better and in what situations ?

Centralized v/s Decentralized ?
In-house v/s Outsourced ?
On-premise v/s On-Cloud ?



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MIS

M AN AG IN G I NFORM AT I ON S YSTEMS IN B USINESS ,

• The role of the CIO

MIS : Managing Information Systems in Business, Government and Society by Rahul De

MIS : Managing Information Systems in Business, Government and Society by Rahul De

The modern IT Environment is dynamic and changing, with technology leading

First-order impacts felt immediately, leading to

Second-order impacts arise by rendering manual processes redundant leading to

Restructuring of the organisation including re-assignment and retraining of

Third-order impacts are felt over time, leading to industry restructuring

MIS : Managing Information Systems in Business, Government and Society by Rahul De

MIS : Managing Information Systems in Business, Government and Society by Rahul De

Decentralization – Where an organisation's IT infrastructure is distributed across

IT infrastructure has to support the organisational culture

MIS : Managing Information Systems in Business, Government and Society by Rahul De

• Data standardisation ?? makes sharing easy, though it implies lock-in to specific

Can IT Systems make a Decentralized organization work in a centralized way ??

MIS : Managing Information Systems in Business, Government and Society by Rahul De

• External Threats – Malware – Viruses and worms; human threat; phishing

MIS : Managing Information Systems in Business, Government and Society by Rahul De

• ROI of Technology – specifies the increase in revenues or other benefits realised

Tangible v/s Intangible Returns or Benefits ! How to measure ??

MIS : Managing Information Systems in Business, Government and Society by Rahul De

Cost – the price at which the technology can be acquired

Scalability – can it scale to meet the growth needs?

Interoperability – ease of use with existing technology

Security – is it secure w.r.t the organisation's activities

MIS : Managing Information Systems in Business, Government and Society by Rahul De

MIS : Managing Information Systems in Business, Government and Society by Rahul De

Vendors are critical to organizations who manage their own IT

• Vendor Selection Vendor for what ?

MIS : Managing Information Systems in Business, Government and Society by Rahul De

• Vendor Contracts and Service levels

• Service Level Agreements Single Vendor or Consortium ?

• Ongoing Relationship Management

• Vendor Retention and Termination

• Assessment on adequacy of services

MIS : Managing Information Systems in Business, Government and Society by Rahul De

IT Governance – a high-level specification of who makes IT decisions in an

MIS : Managing Information Systems in Business, Government and Society by Rahul De

MIS : Managing Information Systems in Business, Government and Society by Rahul De

• Feudal – Decisions are taken by the Unit or Divisional Heads

• IT Duopoly – Decisions jointly taken by IT Heads and Business Unit Heads

• Anarchy -Need-based decisions taken by users at the lower level; no higher

Which Archetype is Better and in what situations ?

MIS : Managing Information Systems in Business, Government and Society by Rahul De

MIS : Managing Information Systems in Business, Government and Society by Rahul De

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