Information Technology for Management Chapter 12
- 1. Information Technology for Management IT Strategy, Sourcing, and Vendor Relationships -Chapter 12-
- 2. Hello! We are Group: 1Abdullahi , 2Yahye, 3Yusuf 4Mohamed, 5Abdikadir, 6Abdiwahid,7Mohamed Abdi. 2
- 3. 3 Objectives IT Strategy and the Strategic Planning Process IT Governance Aligning IT with Business Strategy IT Operating Plans and Sourcing Strategies IT Vendor Relationships
- 4. 1. IT Strategy and the Strategic Planning Process 1Abdullahi
- 5. “IT vision without a strategy remains an illusion. " Lee Bolman. 5
- 6. IT Strategy and the Strategic Planning Process ● Can an effective business strategy exist today without IT? Could nonprofits or government ● agencies fulfill their missions without a technology strategy? Of course not. ● That’s why IT strategy begins and ends with the business—and must be an integral part ● of the business strategy 6
- 7. Two of the biggest risks and concerns of top management are ● (1) failing to align IT to real business needs and, as a result ● (2) failing to deliver value to the business. Since ● IT has a dramatic effect on business performance and competitiveness, the failure to ● manage IT effectively seriously impacts the business. 7
- 8. The four main points of IT strategic plans ● 1. Improve management’s understanding of IT opportunities and limitations ● 2. Assess current performance ● 3. Identify capacity and human resource requirements ● 4. Clarify the level of investment required 8
- 9. BUSINESS AND IT STRATEGIES DEFINED 9
- 11. Tools and Methodologies of IT Strategic Planning. ● Business Service Management. ● Business Systems Planning Model ● Balanced Scorecard 11
- 12. A major aspect of IT planning ● is properly allocating IT resources to the right set of projects. Organizations simply cannot afford to develop or purchase each application or undertake each application enhancement that business units and end users might like. The IT steering committee has an important responsibility in deciding how IT resources will be allocated. 12
- 14. Resource Allocation. ● Resource allocation consists of developing the plans for hardware, software, data communications and networks, facilities, personnel, and financial resources needed to execute the master development plan 14
- 15. The purpose of IT governance ● is the creation of a management framework that maximizes the value that an organization derives from IT in support of its strategic objectives. ● In short, IT governance is about doing things right the first time around. IT governance is part of a wider corporate governance activity, but has its own specific focus. 15
- 16. The benefits of effective IT governance ● reduced costs and damages caused by IT failures. ● more trust ● Teamwork, and confidence 16
- 17. IT GOVERNANCE AND PERFORMANCE ● IT governance is concerned with insuring that IT investments deliver full value. As ● such, IT performance management—being able to predict and anticipate failures before it’s too late—is a big part of IT governance. IT performance management 17
- 18. ● functions include the following: verifies that strategic IT objectives are being achieved; reviews IT performance, and assesses the contribution of IT to the business. ● For example, IT performance management assesses outcomes to answer the question: Did the IT investment deliver the promised business value? In order for IT to deliver full value, three objectives must be met (the first objective you’re already familiar with). 18
- 20. Three objectives of IT Governance ● 1. IT has to be fully aligned to business strategies and direction. ● 2. Key risks have to be identified and controlled. ● 3. Compliance with laws, industry rules, and regulatory agencies must be demonstrated. 20
- 21. Individuals Concerned with IT Governance ● Top-level business leaders, who are the Board, executives, managers, and especially heads of finance, operations, and IT ● Public relations and investor relations managers ● Internal and external auditors and regulators ● Middle-level business and IT management ● Supply chain and business partners ● Customers and shareholders 21
- 22. WHAT IT GOVERNANCE COVERS ● Supports the strategy ● Delivers value ● Risk management ● Resource management ● IT Performance management ● Strategic planning 22
- 23. Skill Set of the CIO (Chief Information Officer ● Political savvy ● Influence, leadership, and power ● Relationship management ● Resourcefulness. 23
- 24. Aligning IT with Business Strategy 4Abdikadir
- 25. Aligning IT with Business Strategy ● Alignment is a complex management activity, and its complexity increases as the pace of global competition and technological change increases. 25
- 26. business alignment can be improved by focusing on the following activities: ● 1. Understanding IT and corporate planning. ● 2. CIO is a member of senior management. ● 3. Shared culture and good communication. ● 4. Commitment to IT planning by senior management. ● 5. Multi-level links 26
- 27. STRATEGIC ROLE OF IT ● Companies must determine the use, value, and impact of IT to identify opportunities that create value and supports the strategic vision. This requires that the CIO, and other senior IT staff, closely interact with the CEO and the senior management in functional areas or business units. And the CIO must be in a position to influence how IT can assume a strategic role in the firm. 27
- 29. COMPETITIVE ADVANTAGE THROUGH IT ● Competitive advantage is gained by a company by providing real or perceived value to customers. To determine how IT can provide a competitive advantage, the firm must know its products and services, 29
- 30. Six characteristics of resources give firms the potential to create a competitive advantage: ● 1. Value ● 2. Rarity. ● 3. Appropriability ● 4. Imitability ● 5. Mobility ● 6. Substitutability 30
- 31. BUSINESS IMPROVEMENT OPPORTUNITY MATRIX 31
- 32. IT Operating Plans and Sourcing Strategies 6Mohamed Muse
- 33. IT Operating Plans and Sourcing Strategies ● The core competencies of many organizations—the things they do best and that represent their competitive strengths— are in retailing, services, manufacturing, o some other function. IT is an enabler, and it is complex and constantly changing. IT is difficult to manage, even for organizations with above-average IT management skills.Therefore, many organizations have implemented outsourcing as an IT strategy. 33
- 34. FACTORS DRIVING GROWTH IN SOURCING AS AN IT STRATEGY The major reasons why organizations are increasingly sourcing are: • To focus on core competency, as you read in the AstraZeneca opening case. • It’s a cheaper and/or faster way to gain or enhance IT capabilities. • To cut operational costs. • Offshoring has become a more accepted IT strategy. • Cloud computing and SaaS have proven to be effective IT strategies. 34
- 35. Benefits of Sourcing ● Financial benefits ● Technical benefits ● Management benefits ● Human resources benefits ● Quality benefits 35
- 37. RISK CONCERNS AND HIDDEN COSTS ● Shirking ● Poaching ● Opportunistic repricing 37
- 38. IT Vendor Relationships ● The starting point in building a positive and strong vendor relationship is vendor selection. If a company makes a bad selection, most likely the vendor-provided system software, app, or implementation will fail, and the vendor won’t be able to resolve the problems fast enough, if at all. 38
- 39. How to Select Vendor? ● 1. Experience with very similar systems of similar size, scope, and requirements ● Financial and qualified personnel stability. 39
- 40. OUTSOURCING LIFE-CYCLE ● 1. Strategy ● 2. Reassessment ● 3. Selection ● 4. Negotiation ● 5. Implementation ● 6. Oversight Management ● 7. Build Completion ● 8. Change ● 9. Exit 40
- 41. 41 Thanks for your Reading! 1)Eng. Abdullahi Mohamed Ahmed 2)Eng. Yahye Abdirahman Ahmed 3)Eng. Yusuf Mahad Abdullahi 4)Eng. Mohamed Muse Ali 5)Eng. Abdulkadir Mukhtar 6)Eng. Abdiwahid Hamud 7)Eng. Mohamed Abdulkadir Osman We are Senior students at SIMAD UNIVERSITY | Faculty of Computing , Department of Information Technology (IT). Feel free to contact us : abdullahi37448.student@simad.edu.so Yahye8625@gmail.com
- 42. End!!