1. The Challenge of Information Systems Technology 1
Introduction to IT Management 1
Concepts of IP Management 3
Challenges in Managing IT Assimilation 4
A Young Technology 4
Technological Growth 5
IT End-User Coordination 5
Specialization 6
Questions from Senior Management 7
Preface 7
Shift in Focus 7
Issues in Information Technology 10
The IT Environment 10
IT Architecture and Organization 12
Management Processes 13
Project Management 14
IT Strategy 15
The IT Business 15
Conclusion 16
Case 1-1: Verifone: The Transaction Automation Company 17
Case 1-2: A Tale of Two Airlines in the Information Age: Or Why the Spirit of King George III Is Alive and Well! 42
2. Manageable Trends 45
Underlying Themes 45
Theme 1:Strategic Impact 46
A Contingency Approach to IT Management 50
Theme 2:Integrating Changing Technology Platforms 56
Theme 3:Assimilating Emerging Technologies 57
Phase 2. Technological Learning and Adaptation 58
Phase 1. Technology Identification and Investment 58
Phase 3. Rationalization/Management Control 59
Phase 4. Maturity/Widespread Technology Transfer 59
Theme 4: Sourcing Policies for the IT Value Chain 60
Theme 5: Applications Development Process 62
Design 64
Construction 64
Implementation 65
Maintenance 66
Operation 66
Theme 6:Partnership of Three Constituencies 68
IT Management 68
User Management 68
General Management 69
Summary 69
Case 2-1:KPMG Peat Marwick:The Shadow Partner 72
3.Effects of IT on Competition 83
Analyzing Impact 84
Forces That Shape Strategy 85
Search for Opportunity 88
Analyzing the Value Chain for IT Opportunities 93
Inbound Logistics 93
Operations and Product Definition 95
Outbound Logistics 95
Marketing and Sales 96
After-Sales Service 97
Corporate Infrastructure 97
Technology Development 98
Human Resources 98
Procurement 99
The Risks of Information Systems Sucess 99
Problems and Evaluations 99
Assessing Competitor Risk 101
The Challenge 105
A New Point of View Is Required 105
Planning Issues 106
Confidentiality and Competition 107
Evaluating Expenditures 107
The IT-Management Partnership 108
Opening Questions 108
A Final Thought 109
Case 3-1:Canadian Airlines(A):Reservations About Its Future(A) 109
Case 3-2:Burlington Northern:The Ares Decision(A) 122
Case 3-3:Burlington Northern:The Ares Decision(B) 146
4. Electronic Commerce:From Interorganizational Systems to the Interner 154
IOS Evolution at American Hospital Supply(AHSC) 156
The Evolution of Interorganizational Systems 156
IOS Evolution at American Airlines 159
Patterns of Interaction among IOS Participants 162
Levels of IOS Control 163
From Proprietary IOS to Ubiquitous Platforms for Electronic Commerce 165
Making Sense of Market Relationships 170
IOS and Producer Relationships 172
IOS and the Changing Buyer-Seller Relationship 176
Managing the Evolution of Technology 180
Maintaining a Secure Environment for Doing Business 181
Developing and Maintaining Information Partnerships 184
The Allegis Example 184
Benefits of Information Partnering 185
Types of Information Partnership 186
Summary 189
Case 4-1:Singapore Tradenet:A Tale of One City 190
Case 4-2:Singapore Leadership:A Tale of One City 206
Case 4-3:Hong Kong Tradelink:News from the Second City 208
Case 4-4:Open Market,Inc. 216
Case 4-5:Proeter Gamble:Improving Consumer Value through Process Design 240
5. Information,Organization, and Control 258
The Organization Design Challenge of the 1990s 258
From Control to Learning 262
From Autonomy to Collaboration 266
Information, Organization, and Control in a Retail Bank 271
Information, Organization, and Control in the Supermarket 272
Communicating Organizational Priorities 273
Targeted Opportunities 273
Meaningful Budgets 274
Effective Incentive Systems 275
Solutions for Production 276
Facts to Make the Sale 277
Adaptation to Change 277
Summary 278
Case 5-1:Mrs.Fields, Inc.(1977-1987) 279
Case 5-2:Frito-Lay,Inc.:A Strategic Transition(1980-1986) 292
Case 5-3:Frito-Lay,Inc.:A Strategic Transition Abridged(1987-1992) 321
6. IT Architecture:Evolution and Alternatives 350
The Evolution of IT Architecture 353
Era 1--The Mainframe(1950s to 1970s) 355
Era 2--The Microcomputer(Late 1970s and 1980s) 359
Era 3--Distributed Information Systems(Late 1980s to Present) 360
Era 4--Ubiquitous 363
Value Creation in a Distributed IT Environment 364
IT Architecture Implementation Issues in the 1990s 371
Merging the Islands of Automation 371
Managing Global Telecommunications 374
Managing the IT Legacy 375
Assimilating Emerging Information Technologies 376
Summary 380
Case 6-1:H.E.Butt Grocery Company:A Leader in ECR Implementation(Abridged) 381
Case 6-2:American Airines:The InterAACT Project(A) 398
Case 6-3:Air Products and Chemicals,Inc.:MIS Reorganization (A) and Project ICON(A)Abridged 414
7. Organizing and Leading the Information Technology Function 433
Organization Issues in IT Development 433
Some Examples 435
Pent-Up User Demand 437
Implications 437
Pressures toward User Dominance 437
Competitive and Service Growth in the IT Market 438
User Control 439
Fit with the Organization 439
User Learning 440
Summary 440
Pressures toward IT Control 440
Staff Professionalism 440
Feasibility Study Concerns 442
Corporate Database System 443
Fit with the Corporate Structure and Strategy 444
Cost Analysis 444
Summary 445
Coordination and Location of IT Policy 445
IT Responsibilities 446
User Responsibilities 447
General Management Support and Policy Overview 448
Summary 449
Case 7-1:Air Products and Chemicals,Inc.:Project ICON(D) 451
8. Information Technology Operations 461
Changing Operations Environment 462
A Focused Service Organization Alternative-An Example 463
Alternative Organizations 464
Developing an Operations Strategy 465
Technology Planning 466
Measuring and Managing Capacity 472
Managing the IT Operations Workforce 474
Selection Factors for Operations Manager and Staff 476
Human Issues in Managing the Workforce 477
Production Planning and Control 478
Setting Goals 478
Establishing Priorities 478
Strategic Impact of IT OPerations 479
Implementing Production Control and Measurement 480
Security 481
Privacy 482
The Roots of the Privacy Issue 483
The Implications 484
Summary 487
Case 8-1:Aerospace Technology Manufacturing,Inc.:Industry,Company,and I/S Transitions 488
9. Information Technology Management Processes 507
Management Control 507
IT Evolution and Management Control 509
Software Issues 509
Operations Issues 509
Corporate Control Process 511
Strategic Impact of IT on the Corporation 512
Looking Ahead:Other Aspects of Control 513
Results Control Architecture 514
Unallocated Cost Center 514
Allocated Cost Center and Charge-Out 515
Profit Center 520
Financial Reporting Process 521
Nonfinancial Reporting Process 523
IT Audit Function 524
Planning--A Contingent Focus 525
Summary 525
Pressures toward IT Planning 526
External (Corporate) Pressures 526
Internal (IT Process) Pressures 528
Limitations on IT Planning Results 530
Planning as a Resource Drain 530
Strategic Impact of IT Activities 531
Mismatches:Using the Strategic Grid 531
Fit to Corporate Culture 531
Corporate Environmental Factors That Influence Planning 535
Summary 537
Case 9-1:Toyworld:Information Technology Planning 539
10. Managing the Information Technology Resource through Strategic Partnerships 553
Why Outsourcing Alliances Are So Difficult 554
Outsourcing in Retrospect 555
Outsourcing in the 1990s 556
What Drives Outsourcing? 557
Position on the Strategic Grid 562
When to Outsource IT 562
Development Portfolio 563
Organizational Learning 565
A Firm s Position in the Market 566
Current IT Organization 566
Structuring the Alliance 566
Contract Flexibility 567
Standards and Control 567
Areas to Outsource 568
Supplier Stability and Quality 569
Cost Savings 569
Management Fit 570
Conversion Problems 570
Managing the Alliance 571
The CIO Function 571
Performance Measurements 572
Mix and Coordination of Tasks 572
Customer-Outsourcer Interface 573
Case 10-1:Xerox:Outsourcing Global Information Technology Resources 574
Case 10-2:General Dynamics and Computer Sciences Corporation:Outsourcing the IS Function(A+B,Abridged) 600
11. A Portfolio Approach to Information Technology Development 624
Project Risk 625
Elements of Project Implementation Risk 625
Project Categories and Degree of Risk 627
Assessing Risk of Individual Projects 628
Portfolio Risk 631
Summary 631
Project Management:A Contingency Approach 632
Management Tools 632
Influences on Tool Selection 633
Relative Contribution of Management Tools 638
Summary 638
Case 11-1:Profiling at National Mutual(A) 640
Case 11-2:Profiling at National Mutual(B) 658
Case 11-3:Chemical Bank:Technology Support for Cooperative Work 661
12 Transnational IT Issues 684
Information Technology Impact on Transnational Firms 686
Geographic Transfer of Work 686
Global Service Levels 687
Global Networking and Expertise Sharing 687
Time-Based Competition 688
Cost Reduction 688
Country Diversity 689
Sociopolitical 689
Language 689
Local Constraints 689
Currency Issues 690
Autonomy 690
Economics 690
National Infrastructure 691
Summary 691
National IT Environment Issues 691
Availability of IT Professional Staff 691
Central Telecommunications 692
National IT Strategy 692
General Level of IT Sophistication 693
Size of Local Market 693
Data Export Control 693
corporate Factors Affecting IT Requirements 694
Technological Awareness 694
Summary 694
Nature of the Firm s Business 695
Strategic Impact of IT 696
Corporate Organization 696
Company Technical and Control Characteristics 697
Other Considerations 698
Transnational IT Policy Issues 698
Guidance on Architecture 698
Central Approval of Software Standards and Feasibility Studies 699
Central Hardware/Software Concurrence or Approval 699
Central Software Development 700
IT Communications 701
Staff Rotation 702
Consulting Services 703
Central IT Processing Support 703
Technology Appraisal Program--An Example 704
Summary 705
Case 12-1:Colliers International Property Consultants 706
Case 12-2:Azucar,S.A.:(1973-1977) 722
13. The IT Business 738
“The IT Business”Analogy 738
The IT Marketing Mix 740
The Products 740
The IT Consumer 742
Costs 744
Channels of Distribution 746
Promotion 748
Competition 748
Price 749
The Role of the Board of Directors 751
The Role of the IT Chief Executive Officer 752
Summary 753
Case 13-1:Avalon Information Services,Inc. 754
Case 13-2:Agrico,Inc:A Software Dilemma 768
Annotated Bibliography 778
Index 783