IT Architectural Alternatives by MikeJenny


									IT Architectural Alternatives
                   Information systems Environment

                                           Structure and Controls
               Architecture and   Business information and Policies and Planning and Development
                  standards        communication models procedures control system Methodologies

                                              User Interfaces
                        Graphical desktop metaphor                     I/O devices
                 Reporting   Information    Groupware    Personal      Expert system      CAD
                   Tools      analysis                  productivity   development tool   CASE

                   Information management               Communication management
                   Computers,printers, …                           Network, routers, …
                   Operating system                                Network management system
                   DBMS                                            Gateways
                   Document management                             E-mail and file transfer servers
         Components of an ICT-architecture

                   Value – Creating Business Opportunities
         Commerce                      Content                     Community

                        Value Enabling ICT Infrastructure
E                             Solutions and services
U   • ERP (e.g. SAP, PeopleSoft)                    • Internet service providers
R   • Supply chain management                       • System Integration services
T                                                   • Outsourcing and hosting
                    Software productivity and development tools
A                   • Packages (WP, Spreadsheets,e-mail, …
D                   • Programming languages( C++, visual basic, JAVA, Cobol, …)
C             Computing                             Communications
N   •   Hardware (computers, printers, …)   •   Hardware (networks, routers, …)
T   •   Operating systems                   •   Network operating systems
O   •   BDMS’s                              •   Gateways
L   •   Document management systems         •   E-mail and File transfer services
      Value creation in a networked environment
              Benefits from Investments

Category I: Platform improvements (NC)
Organizational benefits            Market/Industry benefits
 Improve ability to share            Improve ability to share
  information, communicate,            information, communicate,
  coordinate, and control              coordinate, and control
  activities inside the                activities with customers,
  organization                         suppliers, and business

Category II: Options Value (Internet-based)
Organizational benefits            Market/Industry benefits
 Increase functionality,             Increase functionality,
  flexibility, and “useful life”       flexibility, and “useful life”
  of the internal ICT-                 of the industry ICT-
  infrastructure                       infrastructure
         Sample metrics
   Lower operating and maintenance cost
      Consolidate data centers
      Streamline and simplify networks (single protocol)
      Decrease headcount for IT-professionals
   Improve application development process
      Redude cost of IT-development projects
      Decrease time needed to deploy IT-enabled business solutions
   Increase useful life of platform
      Decrease upgrade cost for new technologies (thin client)
      Enable flexibility (Lego approach)
   Increase range of options for new business solutions
      Increase number of value-creating business solutions (more vendors)
      Enable new business building opportunities
       Value creation in a networked environment
               Benefits from investments

Category III: Commerce
Organizational benefits               Market/Industry benefits
   Improve core operating               Improve existing supply/ dis-
    activities inside the firm            tribution channels that link firm
    (procurement, sales, …)               to customers, suppliers and
                                          partners or create new ones
Category VI: Content
Organizational benefits               Market/Industry benefits
   Improve decision making and           Exploit economic value of
    enhance organizational learning        information by adding value
                                           to products and services

Category VI: Content
Organizational benefits               Market/Industry benefits
   Enhance collaboration of              Establish position at center of
    individuals and teams                  electronic market
       Sample metrics

   Savings
     Reduce paper and communication cost
     Reduce headcount
     Reduce transaction and communication cost
     Reduce inventory cost
   Speed
     Reduce cycle time
     Decrease waste
     Rdeuce process errors
   Increase satisfaction and retention
     Customers, suppliers, partners, employees
The learning environment
 Assimilating Emerging
     Phases in assimilating
     emerging technologies

1. Technology identification and investment

2. Technological learning and adaptation

3. Rationalization and management control

4. Maturity / widespread technology transfer
        Four Phase ICT Assimilation
      Phase 1
decision to invest
+ project initiation     Success
      Lack of
      Attention            Phase 2
      And              technology
                       learning             Success
  stagnation           and adaptation
  block A                  narrowly           Phase 3
                           focused and
                           not marketed   rationalization and
                                          control                Success
                       block B                too efficiency
                                                                    Phase 4
                                          block C
       Phase 1: Technology Identification
Initiated by decision to invest in ICT
      • one or more complementary project developments
      • lack of precision in cost estimation and ultimate stream of benefits
      • each step characterized by much uncertainty
reasons for failure
      • vendor failure
      • discovery that technology is inappropriate to the firm
      • poor user involvement
      • lack of management attention
      • bad choice
fault only discovered after 1 or 2 years
result: not clear technical disaster , but unwillingness to invest more
        perceived as adding more work to the organization
        significant cost overruns
    Phase 2: Technology Learning and Adaptation

   involves learning to adapt new technology to particular
    tasks beyond those identified in the initial proposal

   often quite different benefits than those anticipated

   projects still highly uncertain in their cost and benefits

   typical example are knowledge systems or CAD/CAM
       insufficient understanding of possibilities leads to stagnation
        and competitive disadvantages

   management in adaptive manner permits management to
    capture , develop, and refine new understanding of IT
    Phase 3: Rationalization/Management Control

   Change in organization’s approach to the technology
       continued evolution to ones originally not considered
       development of precise controls for guiding the design and
        implementation of IT systems
       various aspects of project life cycle are analyzed
       role of IT staff and users becoming clearer
       results becoming more predictable

   failure if excessive controls are developed
       controls can be so onerous that profitable expansion of the
        use of IT is inhibited and prevents logical growth (p379)
       Phase 4:Maturity/Widespread Technology

   Program of technical diffusion
        expand experience gained in one operating division

   A firm is confronted over time with a series of waves of

   assimilation of several technologies in different phases

    To enable and encourage unprogrammed or inno-
    vative activity , it is recommended that organiza-
    tions make special and separate provisions for it.
            Special units for innovative purposes
         Emerging Technology Group
   Often initially in IT at level of operations and applications
   Difference between leading and lagging companies is the
    early creation of the ET group
   Sometimes put outside IT , to help ensure that it is not
    swamped by the IT control philosophy

     Characteristics of effective management of ET groups by phase
    Management        Innovative-phase          Control-phase
       issue            effectiveness             efficiency
Organization         Organic (ET)          Mechanistic (trad IT)
Management control Loose , informal        Tight
Leadership           Participating         Directive (telling,delegating)
         Innovative Phase
   atmosphere in ET group : exploratory, experimental
   organizational structure and management controls must
    be loose and informal
   cost accounting and reporting : flexible
   no requirements for cost-benefit analysis
   leadership : participating
   temporary relaxation of performance standards
   ET independent unit due to growth in information centers
   ET responsible for intra-organizational technology
       Merging the Islands of IT

Three Islands
        • Office support
        • data processing
        • telecommunications
   Integration required for several reasons
    1. all three areas require
        •   large capital investment
        •   large protracted projects with complex implementation
        •   extensive user training
        •   more and more supplied by one single vendor
    2. key sectors of all three islands physically linked in a network
    3. dominant suppliers market products as base for co-ordinated
       automation of three islands
         Reasons for merging

   decisions in each island involve large budgets and
    complex technical and cost evaluations , whereby
    similar staff backgrounds are needed to do the analysis

   great similarities exist in type of management skills and
    staff needed to do the implementation

   most applications require integrated technological
    networks to handle computing , telecommunications
    and office support
             IT Resource Management
Pressure                Centralized         Decentralized               Distributed

Management         Hierarchical            Entrepreneurial          Information age
control            Standardization         user responsiveness      learning
                   Reliability, security   local reliability        efficiency, effectivity

Technology         use of resources        efficient use of low     global reliability
                   specialized             scale                    mix of specialized
                   equipment, skills       low cost equipment       and off-the-shelf
                   common data             local data
Data                                                                information sharing
                   security control        fit with field needs     high capacity
                   data standards          data locally relevant    networks
                   specialized staff       generalized expertise    mix of professional
                   turnover disruption     interfunctional career   resources
                   career paths

                   low technical skills    technical                 high level of
End users
                   no IT motivation        sophisticated            commitment and
                                           IT motivated             literacy
    Conclusions on Architectural Alternatives

   Merge technologies and distribute hardware and data must be
    managed carefully in combination
   periodic re-examination is needed
     establish a permanent corporate policy group
     uniformity in management practice should not be pushed too far
     respect differences in international activities
     address the issues in a broad strategic fashion
           •   corporate organization structure
           •   current operating administrative processes
           •   corporate strategy and direction
           •   availability of human resources
     ensure adequate innovation-phase investment in experiments
           • ensure proven expertise is distributed
     ensure balance between long-term and short-term needs

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