MIS 475 : Chapter 7 Business of IT
MIS 475 : Chapter 7 Business of IT MIS 475
Popular in Managing and Using Information System
verified elite notetaker
Popular in Department
This 8 page Class Notes was uploaded by Winn on Saturday March 5, 2016. The Class Notes belongs to MIS 475 at Marshall University taught by in Spring 2016. Since its upload, it has received 9 views.
Reviews for MIS 475 : Chapter 7 Business of IT
Report this Material
What is Karma?
Karma is the currency of StudySoup.
You can buy or earn more Karma at anytime and redeem it for class notes, study guides, flashcards, and more!
Date Created: 03/05/16
Chapter 7 : The Business of IT Explaining Important Most Important Learning Objectives : 1) Exploring the business of It and the customers it serves 2) Discussion about what the IT organization does and does not do and how the leadership within the IT organization ensures that the IT organization’s activities are conducted efficiently 3) Business processes within the IT department such as building a business case, IT portfolio management, and valuing and monitoring IT investments. Scenario : Here is the video about Avon Products Incorporation : Expanding the Legacy Brand https://www.youtube.com/watch?v=YL7AD05QAbg ( Avon Product ‘s INC ) 1) Organizing to respond to business demand : a maturity model Business-IT-Maturity Model framework : is a useful tool for understanding the differences in capabilities Explaining : its simplest form (see graphic above) the model represents both business demand maturity (highlighted in red to the left of the learning curve) and IT supply maturity (highlighted in blue to the right of the curve. These never move completely in tandem – sometimes demand is slightly ahead of supply, other times it is slightly behind. If demand and supply get too far out of whack, there’s usually a change of CIO (or a turnover of the IT organization to an outsourcer!) Level 1 : where the business demand for IT is primarily all about cost savings and foundation systems. Level 2 : where the focus might be on creating effective business processes Level 3 : the business leaders think about IT’s role in rapid reconfiguration of the business. 2) What a manager can expect from the IT organization : _ Expect some level of support in 14 core activities : a) Developing and maintaining information systems b) Managing supplier relationships c) Managing data, information and knowledge d) Managing Internet and network services e) Managing human resources f) Operating the data center g) Providing general support h) Planning for business discontinuities i) Innovating current processes j) Establishing architecture platforms and standards k) Promoting enterprise security l) Anticipating new technologies m)Participating in setting and implementing strategic goals n) Intergrating social IT . Level 1 : the IT organization is focused on the basic services needed Level 2 : the IT organization adopts a process view to provide services Level 3 : innovation is the key focus 3) What the IT organization does not do : 1- The IT organization does not typically design business processes 2- Does not set business strategy 3- IT must be part of the business strategy discussions. 4) Chief Information officer : Business technology strategist or the strategic business leader who uses technology as the core tool in creating competitive advantage and aligning business and IT strategies. 5) Building a business case : Benefits fall into one of these categories : 1- Observable 2- Measurable 3- Quantifiable 4- Financial Cost are described in terms of six categories : purchases, implementation technical consultants, development, infrastructure, business change and training costs. Here is the risk management model : 6) IT portfolio management : refers to “evaluating new and existing applications collectively on an ongoing basis to determine which applications provide value to the business in order to support decisions to replace retire, or further invest in applications across the enterprise Four asset classes of IT investments : 1- Transactional Systems – systems that streamline or cut costs on the way business is done 2- Infrastructure Systems – the base foundation of shared IT services used for multiple applications such as servers, networks, databases or laptops. 3- Informational systems – provide information used to control manage , communicate , analyze or collaborate 4- Strategic systems – systems used to gain competitive advantage in the marketplace 7) Funding it resources : a) Chargeback : With a chargeback funding method, IT costs are recovered by charging individuals, departments, or business units based on actual usage and cost. b) Allocation : With allocation funding method recovers costs based on something other than usage, such as revenues , login accounts, or number of employees Two major complaints are made about allocation systems : 1- The free-rider problems 2- Deciding the basis for allocating the costs is an issue c) Corporate budget : With the corporate budget funding method : the costs fall to the corporate bottom line, rather than levying charges on specific users or business units. 8) How much does it cost : 1- Activity-Based Costing : calculates costs by couting the actual activities that go into making a specific product or delivering a specific service. 2- Total cost of ownership : calculate a more accurate cost that includes all associated costs. 3- TCO component breakdown: Soft costs : such as technical support, administration and training, are easier to estimate than they may first appear. Managers want to analyze the costs of informal support for two reasons : a) The costs – both in salary and in opportunity – of a nonsupport employee providing informal support may prove significantly higher than analogous costs for a formal support employee. b) The quantity of informal support activity in an organization provides an indirect measure of the efficiency of its IT support organization 4- TCO as a management tool
Are you sure you want to buy this material for
You're already Subscribed!
Looks like you've already subscribed to StudySoup, you won't need to purchase another subscription to get this material. To access this material simply click 'View Full Document'