MIS CH11 - How is the IS Department Organized

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Typical Senior-Level Reporting Relationships

• Chief Executive Officer (CEO) / Chief Operating Officer (COO)

  • 1.) HR

    • A.) Chief Marketing Officer (CMO)

    • B.) VIP Sales

    • C.) VP Manufacturing

  • 2.) Legal (other staff functions)

    • A.) Chief Financial Officer (CFO)

    • B.) VP Engineering

    • C.) Chief Security Officer (CSO)

      • 01.) Data Administration

        • 00A. Technology (CTO)

        • 00B. Operations

        • 00C. Development

        • 00D. Outsourcing Relations

        • 00E. Chief Information Security Officer (CISO)

Chief Information Officer (CIO)

The title of the principal manager of the IS department

IS Technology

office that investigates new IS systems technologies and determines how the organization can benefit them

IS Operations

manages the computing infrastructure, including individual computers, in-house server farms, networks, and communications media.

• Includes system and network administrators

IS Development

This group manages the process of creating new IS as well as maintaining existing ones

Outsourcing Relations

This group exists in organizations that have negotiated outsourcing agreements with other companies to provide equipment, applications, or other services.

Data Administration

The purpose of this group is to protect data and information assets by establishing data standards and data management practices and policies.

Chief Security Officer (CSO)

manages security for all of the organization’s assets: Physical plant and equipment, employees, intellectual property, and digital.

• Reports directly to the CEO

Chief Information Security Officer (CISO)

manages security for the organization’s information systems and information

Major IS Planning Functions

• Aligns information systems with organizational strategy; maintain alignment as organization changes

• Communicate IS/IT issues to executive group

• Develop/enforce IS priorities within the IS department

• Sponsor steering committee.

Align Information Systems with Organizational Strategy

• The CIO and the IS department must constantly be vigilant to align IS with it

• Maintaining alignment between IS direction and organizational strategy is a continuing process

  • IS must evolve along with the organization as strategies change, as the organization merges with other organizations, as divisions are sold.

Communicate IS Issues to the Executive Group

• CIO is the representative for IS and IT issues within the executive staff

• CIO provides the IS perspective during discussions of problem solutions, proposals, and new initiatives

Sponsor the Steering Committee

• In the steering committee, information systems personnel can discuss potential IS initiatives and directions with the user community.

• The steering committee provides a forum for users to express their needs, frustrations, and other issues they have with the IS department

• Typically, the IS department sets up the steering committee’s schedule and agenda and conducts the meetings

Steering committee

a group of senior managers from the major business functions that works with the CIO to set the IS priorities and decide among major IS projects and alternatives.

Outsourcing  

 The process of hiring another organization to perform a service. 

• Done to save costs, to gain expertise, and to free management time.

Develop Priorities and Enforce Them Within the IS Department

• The CIO must ensure that priorities consistent with the overall organizational strategy are developed and then communicated to the IS department.

• The CIO must establish and communicate priorities and enforce them

• No organization can afford to implement every good idea.

  • The objective of everyone in the IS department must be to develop the most appropriate systems possible, given constraints on time and money.

Popular Reasons for Outsourcing IS Services

• Management advantages 

  • Obtain expertise

  • Avoid management problems

  • Free management time

• Cost reduction

  • Obtain part-time services

  • Gain economies of scale

• Risk reduction

  • Cap financial exposure

  • Improve quality

  • Reduce implementation risk

Management Advantages

• Outsourcing can be an easy and quick way to gain additional expertise

  • ex. iMed Analytics wants to develop custom IoT medical device apps and a new real-time machine learning system, but no one on the staff knows the particulars of coding these types of apps.

• Organizations developing innovative products may not have the necessary in-house technical expertise to produce them. Outsourcing and strategic partnerships enable organizations to make products they wouldn’t have otherwise been able to make internally.

• Avoids management problems

  • ex. iMed Analytics, building a large development and test team may be more than the company needs and require management skills that neither Emily nor Jose has. Outsourcing the development function saves them from needing this expertise.

• Some companies choose to outsource to save management time and attention. 

  • Emily at iMed has the skills to manage a new software development project, but she may choose not to invest time.

Cost Reduction

• With outsourcing, organizations can obtain part-time services

• Gains economies of scale (lowering the costs that vendors must charge)

Risk Reduction

• Outsourcing can cap financial risk.

• Typical outsourcing contracts include the outsource vendor agreeing to a fixed price for contracts and services

• Can delay paying the bulk of the fee until the work is completed and the software (or other component) is working.

• First case, reduces risk by capping the total due; in the second, it ensures that little money need be spent until the job is done.

• Can help to ensure a certain level of quality or avoid the risk of having substandard quality.

  • No Guarantee that outsourcing will provide a certain level of quality or quality better than could be achieved in-house

  • but if a minimum level of quality is not provided, it is easier to hire another vendor than it is to fore and rehire internal staff

• Reduces implementation risk

  • Hiring an outside cloud vendor reduces the risk of picking the wrong brand of hardware, virtualization software, or implementing tax law changes incorrectly

    • outsourcing gathers all of these risks into the risk of choosing the right vendor

    • once the company has chosen the vendor, further risk management is up to that vendor

International Outsourcing

• Many firms headquartered in the United States have chosen to outsource overseas.

• Particularly advantageous for customer support and other functions that must be operational 24/7

What Are the Outsourcing Alternatives?

• IaaS cloud hosting

• Licensed software/ Outsourced development

• PaaS

• SaaS

• System

• Business function

What Are the Risks of Outsourcing?

• Loss of control

• Benefits outweighed by long-term costs

• No easy exit

Loss of Control

• Vendor in driver’s seat

• Technology direction

• Potential loss of intellectual capital

• Product fixes, enhancements in wrong priority

• Vendor management, direction, or identify changes

• CIO superfluous

Benefits outweighed by long-term costs

• High unit cost, forever

• Paying for someone else’s mismanagement

• In time, outsource vendor is de facto sole source

• May not get what you pay for but don’t know it

• Outsource vendor may change its pricing stratey over time

• Fixed costs indeeds cap exposure and removes the benefits of economies of scale

No easy exit

• Critical knowledge is in the minds of vendors, not employees

• Expensive and risky to change vendors

Your User Rights

• Computer hardware and programs that allow you to perform your job proficiently

• Reliable network and Internet connections

• A secure computing environment

• Protection from viruses, worms, and other threats

• Contribute to requirements for new system features and functions

• Reliable systems development and maintenance

• Prompt attention to problems, concerns, and complaints

• Properly prioritized problem fixes and resolutions

• Effective training

Your User Responsibilities

• Learn basic computer skills

• Learn standard techniques and procedures for the applications you use

• Follow security and backup procedures

• Protect your password(s)

• Use computers and mobile devices according to your employer’s computer-use policy

• Make no unauthorized programs

• Apply software patches and fixes when directed to do so

• When asked, devote the time required to respond carefully and completely to requests for requirements for new system features and functions

• Avoid reporting trivial problems