Lecture 5 - Information Systems Management
Lecture 5 - Information Systems Management ACC1006
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This 4 page Class Notes was uploaded by Wai Chuan on Sunday August 16, 2015. The Class Notes belongs to ACC1006 at National University of Singapore taught by in Summer 2015. Since its upload, it has received 77 views. For similar materials see Accounting Information Systems in Accounting at National University of Singapore.
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Date Created: 08/16/15
Chapter 7 Information Systems Management Lecture 5 71 Functions of the IS de artment Depending on the organization CIO may report to CEO COO or CFO VP Man ufia ctu ring Technology An effective CIO should be able to go for lowcost highvalue technology structure Technology dept 0 Headed by the Chief Technology Officer CTO 0 Investigates new information systems technologies and determines how the organization might benefit from them Technology scanning Operations dept 0 Manages the computing infrastructure monitors system users and responds to their problems 0 Includes system and network administrators Development dept 0 Manages the process of creating new information systems while maintaining existing information systems 0 Includes analysts who work with users operations and vendors to acquire and install licensed software 0 May include programmers test engineers and technical writers Outsourcing relations dept if an organization uses outsourcing vendors 0 Negotiates outsourcing agreements with other companies to provide equipment applications and other services Data admin deptSome companies only 0 Responsible for protecting data and information assets by establishing data standards and data management practices and policies 72 IS Planning Functions Align IS with organisational strategy Maintain alignment as organisation changes Communicate ISIT issues to executive group Developenforce IS priorities within IS department Sponsor steering committee 0 A group of senior managers from major business functions works with the CIO to set IS priorities make decisions about major IS projects and serve as a communication channel between users and the IS function 73 Managing computing infrastructure Align infrastructure design with organizational structure 0 The IS infrastructure must mirror the organization s structure 0 Organization is highly controlled and centralized IS infrastructure centralized 0 Organization is decentralized with autonomous operating units IS infrastructure should support that 0 The figures below show the discord between one type of organizational structure and another type of IS infrastructure D gsgpgakafne mm A Centralized Database for Order Management V 39 Locatedin Denver Centralized Database for Consolidation Salt Lake Salt Lake I Sglt Lake at v Denver Qty pant Clty plant 1 55 Denver Plant with CEO amp HQ Phoenix Plant Phoenix Plant Plants acquired by acquisition 39 Existing IS legacy from past 39 Separate order entry production and billing Highly distributed organization Above figures show the IS configuration of a printing company that has grown by acquisition i Systems as there were ii Problematic Centralized System small but significant differences across the various locations iii Decentralized ordermanagement system 0 Create operate and maintain computing infrastructure 0 For endusers networks data centers data warehouses and data marts 0 Establish technology and product standards 0 Ensure endusers do not deviate from them 0 IS configurations must support the type of work users do Set standards and ensure compliance with data usage and privacy Standards are important 0 Track problems and monitor resolutions 0 Assign a tracking number to the problem enter it into the queue according to its priority and monitor the problem until it s resolved 0 CIOs and managers should also monitor problem resolution 0 Establish data recovery plan 0 Make mission critical data available or easily retrievable 0 Must identify critical systems and databases email system important 0 Protect your data 0 If a critical system fails how long could you do without it before it would negatively affect your business The answers will have a major impact on 0 how you will protect your systems 0 how much you will spend to gain that protection 0 If your business cannot afford to be offline for more than a few hours you might think about moving your systems to a hosted data center 0 Depending on requirements either choose a fully managed system or possibly an ASP application service provider model 74 Outsourcing 0 Defined Hiring another organization to perform a service 0 Advantage Management 0 Obtain expertise 0 Outsource expertise that company doesn t have specialist knowledge in 0 Avoid management problems 0 Company doesn t know how to find and hire the right specialists 0 Free management time to focus on core competencies 0 BUT Hard to identify core competencies 0 What is corenoncore changes rapidly due to competitive environment or macroenviroment 0 BUT Hard to identify the part that IT plays in supporting those competencies 0 ITis so intertwined with the processes of most businesses that it cannot be easily segmented 0 Cannot outsource management responsibility and accountability of IT activities 0 Simplify management of IT BUT may not be realistic 0 Must actively manage the outsourcing relationship eg adding additional staff with skills in managing outsourcing relationships 0 quotOutsourcing does not mean abdicating I 0 BUT Outsourcing for complex innovative systems or to implement new technology can be risky 0 Because very hard to define requirements 0 Safer to outsource the more routine IT functions eg telecoms PC maintenance so that the remaining ITstaff can focus on more complex tasks 0 Advantage Cost reduction 0 Gain EOS True benefit of outsourcing 0 Vendor can do the same outsourced function eg payroll for 100 firms Cheaper than if each firm does the function itself 0 BUT as many technology functions become increasingly commoditized EOS through outsourcing may not be significantly larger than could be achieved by any mediumlarge client organisations 0 More predictable costs 0 BUT may not be a benefit Contracts with fixed costs are initially favorable to the client but technology becomes cheaper and better so the fixed fees the client pays may no longer be a good deal 0 BUT Cost reduction is not guaranteed 0 quotHidden costs eg negotiating the contract and ongoing management of the relationship May cancel out benefit 0 Cost reduction is biggest in first year of the contract much less in ensuing years 0 Obtain part time services in small amounts instead of full time network administrator 0 Advantage Risk reduction 0 Cap on financial exposurerisk 0 Improve quality of work as vendor is expected to provide a certain quality of service 0 Reduce implementation risk choosing wrong hardwaresoftware etc 0 Improve reliability and stability of systems 0 Through best practices and vendor s greater access to technology to handle fluctuations in capacity requirements 0 Reliability and stability are relatively well understood and not highly specific to one particular organization as they are a function of network systems and infrastructure Good candidates for outsourcing 0 To reduce cost an organization should 0 Only outsource activities that 0 Well understood 0 Accurate baseline measurements can be obtained for them 0 Choose vendor carefully Spend time and money Hire outside help if necessary Interview the vendor s clients to verify if vendor will follow up on promises 0 Prepare detailed and thorough contracts with specific clauses to allow for changes in technology and business conditions and for reversing the contract upon termination 0 International outsourcing 0 India Most popular foreign outsourcer because large welleducated Englishspeaking population earn 20 to 30 percent less in labor costs than US counterparts 0 Wellsuited to 247 operations like customer support 0 Comments on outsourcing 0 Transaction cost theory 0 If service being outsourced is highly complex and integrated with the organization Higher costs and Higher uncertainty 0 But vendor wants profit also so aggressive approach to cutting cost can backfire