Aligning Information Systems (IS) and Corporate...
Transcript of Aligning Information Systems (IS) and Corporate...
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Aligning Information Systems (IS) and Corporate Strategy
Ken Kozar/Tom MiaskiewiczLeeds School of Business
University of Colorado/Boulder
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Some Background• Systems• Information Systems• Information Technology• Operations Management
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System
• Interrelated parts that exist for a purpose– Input, Processing, Output
• All around us!– Human body– Weather– A bike
• Can have many subsystems
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System Diagram Example
• Emergency Room
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Ambulance
Police
Others
Triage
PATIENT
PATIENT
PATIENT
Supply Room
ORDERSSUPPLIES
Morgue
TERMINATED PATIENT
WELLPATIENT
Society
NOT WELL WardsTreatmentAdmissions
PATIENT PATIENT
PATIENT
Source: Athey and Zmud 1986
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Information Systems (IS)
• Information System– Group of components that produce information
for a certain purpose
• Broader than Information Technology (IT)– iPod vs iTunes Music Distribution
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HardwareSoftwareDataProceduresPeople
INPUTS OUTPUTS
Data Useful Information
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Operations Management
• Planning, coordination, controls, and resources needed to produce goods or services from resources/raw materials
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Operations Management
INPUTS OUTPUTS
Resources ProductsRaw Materials
Source: Adams 2008
Services
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IS Managers’ Issues?
• Some Lingering Topics• Why don’t they go away?• COO stands for what?• CIO stands for what?• Can IS become part of the team?• Is IS just technology?
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Some studies?
• CSC Index ’95 - #1 issue is “Aligning IS and Corporate Goals”
• Beyond Computing ’95 - #1 Issue is “Integrating IT/Corporate Strategies”
• CIO Magazine 2006 State of CIO - #1 Priority “Align IT and Business Goals”
• Best Way to Lose CIO Job?
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Ernst and Young Study• Surveyed CIOs, their bosses and peers (COO)• #1 “To-Do” for all three: Align IS and Corporate
Goals• #1 Best Way to Get CIO Fired? “Failing to
communicate with senior management.”• Others include: “Not fitting in with corporate
culture,” “Not being a team player,” Failing to deliver functionality required by the business”
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COMMUNICATE!? About What?
• About business!• About the bottom line and impacts on it• About leveraging technology to attract and
retain customers and reduce the cost of servicing them
• Not about technology per se!
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Linking Business to IS
• Business Objectives – Measured through revenues and costs
• Business Tactics – Tasks performed• Systems Objectives – IS Results• Systems Tactics – Technologic Activity
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Need:
• Business-Savvy IT Persons Partnering With
• IT-Savvy Business Persons
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Putting it All Together - Alignment
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Business Objectives
• Focus on Cost or Revenues• Based on vision and mission• Unconstrained Thinking
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Classic Costs to Reduce
• Include overtime, waste/spoilage, losing discounts, cash flow loan charges, turnover, absenteeism, fines, space charges, lawsuits, uncollected debts, rework, outsourcing, etc.
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Classic Revenues to Increase
• Include new markets, repeat customers, new products/services, product returns, inventory outages, “dunning” improperly, alliances, cross selling, quick funds recovery, etc.
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Clues to Business Objectives
• Changes in product line, product quality, product characteristics, markets, price, target customers, market position, market share, company size, ROI, dividends, leadership directions, etc.
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Business Tactics
• Means of accomplishing objectives• Performable by organizational members?• Tactics specify how IS is used• Changed tactics could mean: business
process reengineering, changed job descriptions/job entry/compensation /training/union contracts
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System Objectives
• Stated in terms of increased capabilities• Reports, screens, web sites, processing,
accessibility, communication could change• Must be clear on times, content, order,
time period, format, circulation, response time, usability
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System Tactics
• Preliminary design with no vendor, hardware specifics, or physical details
• System tactics cost money• Are combined into a system strategy or
architecture
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Gumption Traps
• Intangible Objectives – do they really exist?
• Quantification – is it measurable? • Goal setting – science or art?• Assuring all constituencies considered• Always do this?
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Why try this?
• Links IS to the Organization• Common Language• Measurable Targets – are we done?• Cost/benefit Analysis Possible• Ensures IS is useful and used• Ensures IS and users know their role• Basis for Job Redesign
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Can we do this?
• If you think you can or Think you can’t You’re Right!
-Henry Ford