Sesi07 Strategic Management of IS and IT v2
Strategic Management of IS/IT
Organization and Resources
Chapter 8
Zainal A.Hasibuan
[email protected]
Context of This Session
External Business Environment
Internal Business Environment
Internal IS/IT environment
Current Applications Portfolio
Strategic IS/IT
Planning Process
External IS/IT Environment
Planning Approaches, Tools and Techniques
We are here …
IS/IT Management Strategy
Business IS Strategies
Applications Portfolio
IT Strategy
Model & Matrices
Strategic Planning Vs. Strategic Management
• Fokus pada pembuatan • Fokus kepada hasil dari
keputusan tentang
penerapan strategi
strategi yang op>mal
• Suatu proses aksi
• Suatu proses anali>k
• Fokusnya diperluas
sehingga mencakup
• Fokus kepada variabel‐
variabel bisnis, ekonomi
juga variabel‐variabel
dan teknologi
psikologi, sosiologi dan
poli>k
The Impact of IS/IT Strategy Failure
1.
2.
3.
The systems that are developed and implemented do
not meet overall business needs;
Resources are misused;
Strategy formula>on is essen>ally a retrofiJng
process, producing enormous rework.
The causes of IS/IT Strategy Failure
1. Lack of alignment between the business and IS
strategies;
2. Uncoordinated management of IS demand and IT
supply;
3. Over‐centraliza>on or decentraliza>on of responsibility
Aspects of IS/IT Management
Managing the information and data resource of the
organization to ensure that its business value is fully
exploited and protected
Managing applications as investments, development
projects and operational systems from the
establishment of requirements to successful long
-term use in the business
Managing information technology: introduction,
development, utilization, replacement
Organizational management of IS/IT: related to
resources, activities, administration.
IS/IT Organiza>on Strategies
• WriQen‐formal: the approach is very structured and
procedural
– Applied to key opera>onal and support
• Personal‐formal: the approach is par>ally structured which
relies on individuals reaching agreement within a formally
cons>tuted group process
• Personal‐informal: no formal planning rela>onship exists
between IS, senior and line managers
The Roles of IT Division
• User services: delivery services, systems
development, support center, informa>on center
• Architecture management: planning, technology
diffusion, data management
• Technology development: research and development
• General: administra>on, quality assurance
Impera>ves for the Management of IS/IT
1. Achieve two‐way alignment between the business and IS/IT
strategy;
2. Develop effec>ve rela>onships with line management;
3. Deliver and implement new systems;
4. Build and manage IT infrastructure;
5. Re‐skill the IS func>on with new competencies and
knowledge;
6. Manage vendor partnerships;
7. Redesign and manage the federal IS organiza>on
Four Components Reflects The Strategic Role For IT
• The cost centre has an opera>onal focus that minimizes risks
with an emphasis on opera>onal efficiency. Cost‐centre
ac>vi>es are good candidates for outsourcing.
• The service centre, although s>ll minimizing risk, aims to
create an IT‐enabled business capability to support current
strategies.
• The investment centre has a long‐term focus and aims to
create new IT‐based business capabili>es. It seeks to
maximize business opportunity from IT resources.
• The profit centre is designed to deliver IT services to the
external marketplace for incremental revenue and for
gaining valuable experience in becoming a world‐class IS
func>on.
Five Key Competencies
• IT leadership, which includes IT envisioning, fusing IT
strategy with business strategy, and managing IS resources.
• Architecture development, which is concerned with
developing a blueprint for the overall IT technical design.
• Business enhancement, which includes business process
analysis and design, project management and managing
rela>onships with users.
• Technology advancement, which is applica>on design and
development.
• Vendor management, which includes managing and
developing rela>onships with vendors and suppliers,
nego>a>ng and monitoring contracts and purchasing.
Loca>on of IS/IT Decision Making
• Content—the decision areas that are being managed. Included here
are decision areas about the whole realm of IS demand and IT
supply—areas
• Authority—the individuals or groups that have the power actually
to make decisions in the various areas
• Responsibili6es—the individuals or bodies responsible for day‐to‐
day execu>on in decision areas.
• Coordina6on—essen>ally, the mechanisms and processes for
ensuring coherence across all decision areas.
• Policies—statements of principles or ac>ons defining acceptable
behaviour.
• Control—outlining the approaches to policing decisions, ensuring
conformance across the organiza>on
Four Distinct Contract Types Or Sourcing Strategy
Four Dis>nct Contract Types Or Sourcing Strategy
• Contract out strategy—with this strategy the vendor is responsible
for delivering the results of IT ac>vity.
• Buy‐in strategy—this strategy sees the organiza>on buying in
resources from the external market, ocen to meet a temporary
requirement.
• Preferred contractor strategy—with this approach, organiza>ons
contract long term with a vendor to reduce risk, with the vendor
responsible for the management and delivery of an IT ac>vity or
service.
• Preferred supplier strategy—this strategy takes the buy‐in approach
further, with an organiza>on seeking to develop a long‐term close
rela>onship with a vendor in order to access its resources for on
going IT ac>vi>es.
Five Roles Cri>cal to Success
•
•
•
•
•
Leadership;
Visionary;
Rela>onship builder;
Poli>cian;
Deliverer.
Establishing IS/IT CommiQees
• Ensuring top management involvement in IS planning;
• Ensuring the fit between IS and business strategy;
• Improving communica>on with top and middle
management;
• Changing user aJtudes to IT.
The Execu>ve Steering Group
• This group is as cri>cal to the whole structure as the
keystone to an arch.
• Its membership should reflect the dominant coali>on,
which implies they are:
– Able to recognize the poten>al of IS/IT in terms of the business
strategy;
– Keen to exploit IS/IT as a business weapon;
– Able to influence the management of systems in the area of the
business they represent;
– Have the confidence of the execu>ve to whom they report
1. Strategy: the ability to iden>fy and evaluate the implica>ons of IT‐
2.
3.
4.
5.
6.
based opportuni>es as an integral part of business strategy
formula>on and define the role of IS/IT in the organiza>on.
Define the IS contribu6on: the ability to translate the business
strategy into processes, informa>on and systems investments and
change plans that match the business priori>es (i.E. The IS strategy).
Define the IT capability: the ability to translate the business strategy
into long‐term informa>on architectures, technology infrastructure
and resourcing plans that enable the implementa>on of the strategy
(i.E. The IT strategy).
Exploita6on: the ability to maximize the benefits realized from the
implementa>on of IS/IT investments through effec>ve use of
informa>on, applica>ons and it services.
Deliver solu6ons: the ability to deploy resources to develop,
implement and operate IS/IT business solu>ons that exploit the
capabili>es of the technology.
Supply: the ability to create and maintain an appropriate and
adaptable informa>on, technology and applica>on supply chain and
resource capacity.
Four Solu>ons To The Development Of The
Requisite (Essen>al) Skills
1. Training new recruits from school or university, which is
expensive. Also, people early in their careers are more likely
to move on within three to five years.
2. Recrui>ng experienced staff from other organiza>ons, which
can be risky.
3. Training exis>ng non‐IS people, especially in applica>on skills
in user areas, which may require the development of new job
roles.
4. Using external resources, either on a short‐term basis to
overcome peak loads, etc. Or longer term to provide the
organiza>on with par>cular skills.
Posi>oning IS/IT Resources in the Organiza>on
• Decentralize resources: IS/IT resources under the
control of the business units
• Disperse resources:resources are dispersed into
func>ons within the unit
• Convert IT to a profit center: this is really a service
bureau mentality
• Set up a separate business en>ty: transforms profit
center into a business in its own right.
The Culture Gap
• Lack of shared values
• No agreed strategy
• Failed projects and systems
End of Presenta>on
Organization and Resources
Chapter 8
Zainal A.Hasibuan
[email protected]
Context of This Session
External Business Environment
Internal Business Environment
Internal IS/IT environment
Current Applications Portfolio
Strategic IS/IT
Planning Process
External IS/IT Environment
Planning Approaches, Tools and Techniques
We are here …
IS/IT Management Strategy
Business IS Strategies
Applications Portfolio
IT Strategy
Model & Matrices
Strategic Planning Vs. Strategic Management
• Fokus pada pembuatan • Fokus kepada hasil dari
keputusan tentang
penerapan strategi
strategi yang op>mal
• Suatu proses aksi
• Suatu proses anali>k
• Fokusnya diperluas
sehingga mencakup
• Fokus kepada variabel‐
variabel bisnis, ekonomi
juga variabel‐variabel
dan teknologi
psikologi, sosiologi dan
poli>k
The Impact of IS/IT Strategy Failure
1.
2.
3.
The systems that are developed and implemented do
not meet overall business needs;
Resources are misused;
Strategy formula>on is essen>ally a retrofiJng
process, producing enormous rework.
The causes of IS/IT Strategy Failure
1. Lack of alignment between the business and IS
strategies;
2. Uncoordinated management of IS demand and IT
supply;
3. Over‐centraliza>on or decentraliza>on of responsibility
Aspects of IS/IT Management
Managing the information and data resource of the
organization to ensure that its business value is fully
exploited and protected
Managing applications as investments, development
projects and operational systems from the
establishment of requirements to successful long
-term use in the business
Managing information technology: introduction,
development, utilization, replacement
Organizational management of IS/IT: related to
resources, activities, administration.
IS/IT Organiza>on Strategies
• WriQen‐formal: the approach is very structured and
procedural
– Applied to key opera>onal and support
• Personal‐formal: the approach is par>ally structured which
relies on individuals reaching agreement within a formally
cons>tuted group process
• Personal‐informal: no formal planning rela>onship exists
between IS, senior and line managers
The Roles of IT Division
• User services: delivery services, systems
development, support center, informa>on center
• Architecture management: planning, technology
diffusion, data management
• Technology development: research and development
• General: administra>on, quality assurance
Impera>ves for the Management of IS/IT
1. Achieve two‐way alignment between the business and IS/IT
strategy;
2. Develop effec>ve rela>onships with line management;
3. Deliver and implement new systems;
4. Build and manage IT infrastructure;
5. Re‐skill the IS func>on with new competencies and
knowledge;
6. Manage vendor partnerships;
7. Redesign and manage the federal IS organiza>on
Four Components Reflects The Strategic Role For IT
• The cost centre has an opera>onal focus that minimizes risks
with an emphasis on opera>onal efficiency. Cost‐centre
ac>vi>es are good candidates for outsourcing.
• The service centre, although s>ll minimizing risk, aims to
create an IT‐enabled business capability to support current
strategies.
• The investment centre has a long‐term focus and aims to
create new IT‐based business capabili>es. It seeks to
maximize business opportunity from IT resources.
• The profit centre is designed to deliver IT services to the
external marketplace for incremental revenue and for
gaining valuable experience in becoming a world‐class IS
func>on.
Five Key Competencies
• IT leadership, which includes IT envisioning, fusing IT
strategy with business strategy, and managing IS resources.
• Architecture development, which is concerned with
developing a blueprint for the overall IT technical design.
• Business enhancement, which includes business process
analysis and design, project management and managing
rela>onships with users.
• Technology advancement, which is applica>on design and
development.
• Vendor management, which includes managing and
developing rela>onships with vendors and suppliers,
nego>a>ng and monitoring contracts and purchasing.
Loca>on of IS/IT Decision Making
• Content—the decision areas that are being managed. Included here
are decision areas about the whole realm of IS demand and IT
supply—areas
• Authority—the individuals or groups that have the power actually
to make decisions in the various areas
• Responsibili6es—the individuals or bodies responsible for day‐to‐
day execu>on in decision areas.
• Coordina6on—essen>ally, the mechanisms and processes for
ensuring coherence across all decision areas.
• Policies—statements of principles or ac>ons defining acceptable
behaviour.
• Control—outlining the approaches to policing decisions, ensuring
conformance across the organiza>on
Four Distinct Contract Types Or Sourcing Strategy
Four Dis>nct Contract Types Or Sourcing Strategy
• Contract out strategy—with this strategy the vendor is responsible
for delivering the results of IT ac>vity.
• Buy‐in strategy—this strategy sees the organiza>on buying in
resources from the external market, ocen to meet a temporary
requirement.
• Preferred contractor strategy—with this approach, organiza>ons
contract long term with a vendor to reduce risk, with the vendor
responsible for the management and delivery of an IT ac>vity or
service.
• Preferred supplier strategy—this strategy takes the buy‐in approach
further, with an organiza>on seeking to develop a long‐term close
rela>onship with a vendor in order to access its resources for on
going IT ac>vi>es.
Five Roles Cri>cal to Success
•
•
•
•
•
Leadership;
Visionary;
Rela>onship builder;
Poli>cian;
Deliverer.
Establishing IS/IT CommiQees
• Ensuring top management involvement in IS planning;
• Ensuring the fit between IS and business strategy;
• Improving communica>on with top and middle
management;
• Changing user aJtudes to IT.
The Execu>ve Steering Group
• This group is as cri>cal to the whole structure as the
keystone to an arch.
• Its membership should reflect the dominant coali>on,
which implies they are:
– Able to recognize the poten>al of IS/IT in terms of the business
strategy;
– Keen to exploit IS/IT as a business weapon;
– Able to influence the management of systems in the area of the
business they represent;
– Have the confidence of the execu>ve to whom they report
1. Strategy: the ability to iden>fy and evaluate the implica>ons of IT‐
2.
3.
4.
5.
6.
based opportuni>es as an integral part of business strategy
formula>on and define the role of IS/IT in the organiza>on.
Define the IS contribu6on: the ability to translate the business
strategy into processes, informa>on and systems investments and
change plans that match the business priori>es (i.E. The IS strategy).
Define the IT capability: the ability to translate the business strategy
into long‐term informa>on architectures, technology infrastructure
and resourcing plans that enable the implementa>on of the strategy
(i.E. The IT strategy).
Exploita6on: the ability to maximize the benefits realized from the
implementa>on of IS/IT investments through effec>ve use of
informa>on, applica>ons and it services.
Deliver solu6ons: the ability to deploy resources to develop,
implement and operate IS/IT business solu>ons that exploit the
capabili>es of the technology.
Supply: the ability to create and maintain an appropriate and
adaptable informa>on, technology and applica>on supply chain and
resource capacity.
Four Solu>ons To The Development Of The
Requisite (Essen>al) Skills
1. Training new recruits from school or university, which is
expensive. Also, people early in their careers are more likely
to move on within three to five years.
2. Recrui>ng experienced staff from other organiza>ons, which
can be risky.
3. Training exis>ng non‐IS people, especially in applica>on skills
in user areas, which may require the development of new job
roles.
4. Using external resources, either on a short‐term basis to
overcome peak loads, etc. Or longer term to provide the
organiza>on with par>cular skills.
Posi>oning IS/IT Resources in the Organiza>on
• Decentralize resources: IS/IT resources under the
control of the business units
• Disperse resources:resources are dispersed into
func>ons within the unit
• Convert IT to a profit center: this is really a service
bureau mentality
• Set up a separate business en>ty: transforms profit
center into a business in its own right.
The Culture Gap
• Lack of shared values
• No agreed strategy
• Failed projects and systems
End of Presenta>on