Chapter 14 – Enterprise and Global Management of Information Technology
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14 Enterprise and Global Management of Information
Technology
CHAPTER OVERVIEW
Chapter 14: Enterprise and Global Management of Information Technology discusses the major challenges
that information technology presents to business managers, the components of information systems management,
and the managerial implications of the use of information technology in global business.
LEARNING OBJECTIVES
1. Identify each of the three components of IT management and use examples to illustrate how they might be
implemented in a business.
2. Explain how failures in IT management can be reduced by the involvement of business managers in IT planning
and management.
6. Understand the fundamental concepts of outsourcing and offshoring, as well as the primary reasons for selecting
such an approach to IS/IT management.
SUMMARY
• Managing Information Technology. This can be viewed as managing three major components: (1) the joint
development and implementation of e-business and IT strategies, (2) the development of e-business applications and
• Failures in IT Management. Information systems are not being used effectively or efficiently by many
• Managing Global IT. The international dimensions of managing global information technologies include dealing
with cultural, political, and geoeconomic challenges posed by various countries; developing appropriate business
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are required to compete successfully in the global marketplace.
• Global Business and IT Strategies and Issues. Many businesses are becoming global companies and moving
toward transnational business strategies in which they integrate the global business activities of their subsidiaries
KEY TERMS AND CONCEPTS
1. Application Development Management ():
Application development management involves managing activities such as systems analysis and design,
2. Business/IT planning process ():
3. Centralization or Decentralization of IT ():
This represents the choice between management from a single location and group of decision makers verses
distributed management with autonomous decision making authority.
4. Chargeback Systems ():
5. Chief Information Officer ():
6. Chief Technology Officer ():
The CTO is in charge of all information technology infrastructure, planning, and deployment.
7. Data Center ():
A pool of co-located computing resources. Also known as a computer center.
8. Downsizing ():
9. Global Business Drivers ():
Global business drivers serve as motivators for change and include customers, products, operations, resources,
and collaboration.
10. Global Information Technology Management ():
Chapter 14 – Enterprise and Global Management of Information Technology
development of e-business applications, and (3) managing IT processes, professionals, and subunits within a
11. IS operations management ():
12. IT architecture ():
The IT architecture created by the strategic business/IT planning process is a conceptual design, or blueprint,
that includes the platform, data, application architecture, and the IT organization itself.
13. IT staff planning ():
IT staff planning , consists of recruiting, training, and retaining qualified IS personnel.
14. Management Involvement ():
15. Managing Information Technology ():
16. Offshoring ():
Offshoring involves moving an organization’s divisional activities, such as call center, software development,
or data processing to a location in a foreign country to reduce costs.
17. Outsourcing ():
18. System Performance Monitor ():
19. Technology Management ():
20. Transborder Data Flows (TDF) ():
TDF comprises the flow of business data over telecommunications networks across international borders.
These data flows create legal, privacy, and national security issues. Transnational strategies must take these
issues into consideration.
1
Blackberry’s current problems in India, Indonesia, the UAE and others serve as excellent examples of current
issues.
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21. Transnational Strategy ():
Transnational strategy is a management approach in which an organization integrates its global business
22. User Services ():
Users services provides support, consulting, and training activities for end users and workgroup computing.
ANSWERS TO REVIEW QUIZ
Q.
A.
Key Term
Q.
A.
1
Business/IT planning process
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2
IS operations management
14
3
Managing information technology
15
4
IT architecture
16
5
Centralization or decentralization of IT
17
6
Application development management
18
7
User services
19
8
IT staff planning
20
9
Data center
21
10
Technology management
22
11
Offshoring
23
12
Chief information officer (CIO)
24
ANSWERS TO DISCUSSION QUESTIONS
1. What has been the impact of information technologies on the work relationships, activities, and resources
of managers?
Work relationships
With information at their fingertips, managers can manage more people spread over a wider area. Because of
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Resources
Managers need:
• Mobile devices
2. What can business unit managers do about performance problems in the use of information technology
and the development and operation of information systems in their business units?
Managers
Today many managers have significantly more background in the use of information systems and technology in
3. Refer to the Real World Challenge in the introduction to this chapter. Does the fact that State Street
Corporation is in the financial services industry have anything to do with their decision to take IT
infrastructure global? Is this the way all large companies will be going in the future, and State Street is
just going there sooner than most?
Yes, as a financial organization operating globally, State Street did make its decision to operate with a global
infrastructure as part of the effort to make State Street IT and IT services available and operational on a 27/7/365
Chapter 14 – Enterprise and Global Management of Information Technology
4. How are Internet technologies affecting the structure and work roles of modern organizations? For
example, will middle management wither away? Will companies consist primarily of virtual (location
independent) project teams of knowledge workers? Explain your answers.
Middle Management
• Middle management will continue to flatten with mangers managing more employees
5. Should an organization centralize or decentralize its strategic IS decision-making function? Use the
Internet to find recent developments to support your answer.
Centralized
Organizations that require consistency across business units, product lines, and geographical areas will find
6. Refer to the Real World Solution in the chapter. Does the new approach taken by State Street
Corporation to their IT infrastructure leave them more vulnerable to disasters (natural or otherwise) or
equipment failure? What should they be doing about it?
The global infrastructure created by State Street will certainly leave them more vulnerable in a particular part of the
globe as a disaster (natural , equipment failure, or any type of disaster) happens there, but it will only affect the
operations served by that part of the infrastructure. Other parts of the globe not affected by the disaster will not be
affected if they are not served by that particular part of the infrastructure.
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7. How might cultural, political, or geoeconomic challenges affect a global company’s use of the Internet?
Give several examples.
Cultural challenges
Cultural challenges include differences in languages, cultural interests, religions, customs, social attitudes, and
political philosophies, differences in work styles and business relationships. A common complaint made
against outsourced call centers often revolves around the caller’s inability to understand the operator’s accent.
8. What effect does the Internet have on the transnational business strategy of a global business? Explain.
The Internet decreases international communications costs, and this will help promote the execution and
management of transnational business strategies, planning, and business operations.
9. How might the Internet, intranets, and extranets affect the business drivers or requirements responsible
for a company’s use of global IT, as shown in Figure 14.13 ? Give several examples to illustrate your
answer.
Internet technologies will enable more efficient centralization of computing resources (cloud computing, etc.)
10. Should Google continue to do business in China – or in any country – that requires them to filter/censor
their search results? Explain.
Yes
• China is a big market
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ANSWERS TO ANALYSIS EXERCISES
1. Top-Rated Websites for Executives
a. Evaluate the CEO Express Web site as a source of useful links to business and technology news, analysis,
and research sources for business executives and professionals.
The portal serves as a good resource for links to on-line resources for professionals. Since it is already oriented
toward professionals, it is immediately useful even without customization.
What advantages does CEO Express provide?
Google News is open to all news sources. Users have to create their own filters for specific topics. Google’s IG
c. Select the featured article from the “Editor’s Corner.” What was the source? Summarize the article. Was
it useful to you?
The featured article changes periodically, so the answers will vary. Students should become accustomed to
reading and evaluating articles written for business professionals.
2. Information & Communications for Development
a. What is the World Bank ( www.worldbank.org ) doing to address third-world computer literacy needs?
The World Bank is sponsoring research and developmental programs oriented around building up infrastructure,
b. What is MIT ( www.mit.edu ) doing to help increase global computer literacy?
MIT is attempting to develop affordable, practical, computing technology for school children living in
3. Overseas Assignments
Note: Many students have no international travel experience, so they may find this exercise especially
interesting. Those who have lived or traveled overseas may have useful contributions to make to a classroom
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a. What do you need to bring with you to keep your laptop computer charged?
Depending on the country, visitors may need a plug adaptor or possibly a transformer. Many laptops are
b. What do you need to bring with you to connect your laptop’s modem to the local telephone network?
Depending on the country, visitors may require only a plug adaptor. However, not all countries use analog
c. What will you use in place of your handy cell phone?
d. Use a collaboration-enabled system such as Blackboard™, Dreamweaver™, or MS Expression Web™ to
merge, organize, and publish your results with the rest of your class to create an on-line resource.
This exercise will give students experience using web-based collaborative tools and allow them to form a virtual
project team. Students may find the compiled results useful in the future.
4. Knowledge Work on the Move
a. Digitize: Convert data or information into a digital form.
Lowest value. Data entry clerk. Call center operator (for taking telephone orders).
b. Distribute: Process information in one direction or another based on strict rules and nondigital inputs (if
the inputs were digital, a computer could probably do the job).
c. Analyze: Process information based on human expertise.
Medium value. Level 2 & 3 customer support. Troubleshooter. Programmer. Analyst.
d. Create: Create new information or products based on human expertise.
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5. Global Training
Accommodating Global Diversity
a) Demonstration video illustrating the software’s usefulness
Pros
• Helps partners visualize the software’s utility
b) Online, interactive training
Pros
• Partners can complete the training at their own convenience
c) Training classes conducted at ICF’s main training facility
Pros
• Partners can interact with the trainers and ask questions
d) Training classes conducted locally
Pros
• Local classes can more easily account for local differences
e) Software demonstration kiosks set up in the vicinity of regional partner meetings
Pros
• Least disruptive to the partners
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f) Training personal “coaches” or mentors in each office who are available to the office’s partners in
addition to their regular duties
Pros
• Distracts the mentor from his or her primary responsibilities
ANSWERS TO REAL WORLD CHALLENGE/SOLUTION
Real World Challenge
1. What are the advantages and disadvantages of local versus global management of information technology
infrastructure? What should be the criteria for making a choice between those two alternatives (or any
hybrid approach)?
Advantages to global management
• less expensive
2. From a practical perspective, what does moving from local to global management of IT entail? What are
the many things that managers at State Street should worry about as they undergo that transition?
Considerations
• legal requirements and restrictions
• business disruption
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3. The case discusses a number of issues associated with the ways in which development and provisioning of
IT differ when done locally compared with when operations become integrated. Does State Street’s
approach to global IT infrastructure solve any of these issues? How? Which ones remain unaddressed?
Issues
• globally integrated systems don’t support batch processing
o deployed virtual servers
Real World Solution
1. What are some of the different project management practices that should be implemented when working
on IT projects spanning different languages, time zones, cultures, and so forth? How would those
practices be different from the ones you would use for local projects?
Management practices for international projects
• involve all stakeholders, especially local stakeholders
2. What would be the next step or steps for State Street Corporation, now that their global approach to IT
infrastructure has been put into place and is working as expected? Where should they go next?
Next steps
• replace “standardized desktops” with platform independent “virtual desktop” technology
ANSWERS TO REAL WORLD CASES
RWC 1: Reinventing IT at BP
Case Study Questions
1. The case mentions the dependence of BP’s IT organization on external contractors. Why would this be an
issue? When is it a good idea for IT departments to hire contractors, and when is it not? Discuss some
scenarios.
Outside contractors
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2. The culture of the IT organization is mentioned as an important issue. How do you think it changed
throughout the period covered here? What did it look like when Deasy came on board? What does it look
like now?
Change
• Deasy wiped out most of IT leadership
• IT leaders became loyal to Deasy
• All of IT feared for their jobs
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3. How did BP get to the situation mentioned at the beginning of the transformation process? Does it appear
to be the result of a conscious decision? Use examples from the case to illustrate your answer.
Cause
Transformation isn‘t linear. It’s easy to become complacent, but numerous factors continually erode an efficient
Conscious choice?
This process isn’t the result of conscious choice. It is the result of top management complacency, natural
competitive forces, and a culture of risk-avoidance.
Real World Activities
1. Go online and research the performance of BP since the time chronicled in the case. Did the
transformation process pay out in the end? What was the role of IT in the outcome, if any? Prepare a
report and compare BP’s performance with that of their competitors.
2. Go back and reread the last two paragraphs in the case. What do you think Deasy means when he
discusses the nonlinear and iterative nature of the process? What does he mean by “temptation”? Break
into small groups with your classmates to discuss these questions.
RWC 2: Cadbury, Forrester Research, A.T. Kearney, and Others
Case Study Questions
1. What are the challenges faced by the CIOs mentioned in the case? Group them into categories and use
examples from the case to define each.
Note: the categories listed here are subjective. Students will likely develop their own.
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Technical
• Bob Hass noted infrastructure limitations
Economic/Regulatory
• Bob Hass noted restricted budgets
2. The case mentions that the traditional approach toward emerging countries had been to develop
technology in the corporate offices and then hand them down to satellite operations. How has that
changed, as discussed in the case?
3. “IT is one of the most globally integrated corporate functions.” How is IT different from other business
areas when it comes to global integration? Why do you think this is the case?
IT provides instant communication and transfer of (digital) products and services over a network within and
Real World Activities
1. Go online and search for other examples of large multinational organizations facing similar challenges.
Summarize your findings and compare them to the ones chronicled in the case. Can you find any new
ones not mentioned here?
Multinationals in emerging markets
2. Do you think some form of international experience is key to your long-term career success? Have you
ever considered taking a position abroad? Why or why not? Break into small groups with your classmates to
discuss the advantages and disadvantages of moving abroad to gain these experiences.
Advantages
• Good experience/exposure
• Opportunity to make personal contacts
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Disadvantages
• Could be “forgotten” by headquarters
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American citizens must pay federal taxes regardless of where or how they earn their income.