BADM 7050 Study Guide 2

● Be able to use the risk management decision tree. If you are given a series of characteristics of a project, be able to identify: (a) the project management approach and (b) the implication for your management style and the budget and deadlines. (Question will be like: hey you work for a company and leadership is onboard but your employees aren't onboard, but you can handle the scope and urgency. What kind of project approach should you use? Then a second question will ask: hey given these set of facts how should you manage the project? So need to be able to do plus minus plus → Guided Evolution: means you need to have a fixed project approach and participative style.)

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Offshoring

when the IS organization uses contractor services, or even its own hybrid captive center in a distant land/overseas

MECHANISMS

■ *Policies: useful for defining the process of making a decision under certain situations, but when environment is complex, policies may be too rigid ■ Review Board: committee that is formally designated to approve, monitor, and review specific topics ■ IT steering committee: also called an IT governance council. Such a committee is composed of key stakeholders or experts who provide guidance on important IT issues.

Punctuated Equilibrium Innovation

■ Assumes long periods of incremental change, interrupted by brief periods of radical change. ■ You have a big change and then a little bit of nothing and then another big change.

Analyzer

■ Attempts to maintain a stable, limited line of products or services -Moves out quickly to more promising new developments in the industry ■ Seldom a major competitor in areas compatible with its stable product-market base ■ Is frequently "second in" with a more cost-efficient product or service ■ Example: Google let Yahoo rush in and define the search market, then came in and achieved market dominance with a better product

Reactor

■ Does not appear to have a consistent product-market orientation ■ Not as aggressive in maintaining established products and markets as some of its competitors ■ Not willing to take as many risks as other competitors ■ Responds in those areas where it is forced to by environmental pressures ■ Ex: barnes and noble reacted to Amazon by changing design, cafes like starbucks

Continuous Change Innovation

■ Frequent, relentless and endemic to the firm (company always changing) ■ Where you make part of the change part of the company, so you are always making little changes over time.

Defender

■ Locates and maintains a secure niche in a relatively stable product or service area ■ Offers limited range of products or services ■ Protects domain by offering higher quality, superior service and lower prices ■ Not usually at the forefront of developments in the industry ● Tends to ignore industry changes that have no direct influence on current areas of operations ● Concentrates on doing the best job possible in a limited area ■ Example- bowtie store walk in and they'll remember your name and size

Prospector

■ Operates within a broad product-market domain that undergoes periodic redefinition ■ Values "first in" new-product and market areas -Even if efforts are not highly profitable ■ Organization responds rapidly to early signals concerning areas of productivity -Responses often leads to a new round of competitive actions ■ Organization may not maintain market strength in all areas it enters ■ Tries to get defender to change ■ Ex: Amazon-first ones in defined voice activated technology

Disruptive Innovation

■ Targets noncustomers and delivers a product or service that differs from the current product portfolio. It must create and capture new value. Customer Acquisition

Dynamic capabilities

■ The ability to reconfigure your resources (IT is a Dynamic Capability) ■ An ability to integrate, build, and reconfigure internal and external competences to address rapidly changing environments (Emphasis: an organization's ability to achieve new and innovative forms of competitive advantage) ■ Dynamic capabilities can only be built if the firm embraces innovation and builds innovation capacity into the enterprise

Expectation Management

■ The process of gathering, incorporating, and measuring stakeholder expectations for IT (clarifying what technology can and cannot do) ■ Being able to understand the expectations that IT can play. ■ Do IT execs know... ● What keeps top mgt up at night? ● Key political challenges? ● New Business unit opportunities? ■ Do BU leaders know.... ● The complexity of IT? ● Which systems are strategic? ● What IT is doing to enable new initiatives? ● How to make informed IT decisions? ■ IT must interact within the roles and styles and give BU leaders: ● Knowledge ● Skill sets ● Incentives ● Metrics ● Relationships ● ^^^ that weren't possible without IT

● Be able to identify the steps of the innovation process (know these in order* Question on the test will be what is the 1st, 2nd, 3rd, or 4th step.)

○ 1. Idea Stage - generate idea and objectives ○ 2. Proof of Concept Stage - assign teams and perform controlled tests/experiments ○ 3. Trial/Pilot Stage - expose idea to market in a limited and measurable way; measure results ○ 4. Transition Stage - idea enters full system development life cycle

What legitimized outsourcing?

○ 1989 - Key date - Kodak legitimizes outsourcing with selective outsourcing

What is a project?

○ A project is a temporary endeavor undertaken to create a unique product, service or result. Temporary means that every project has a definite beginning and a definite end. Transform resources into profits ■ Purpose: to reach a specific goal or accomplish a task ■ Trigger to change: project goal is reached or task is completed ■ Quality control: informal ■ Product or service: unique ■ Duration: temporary ○ Projects have project stakeholders which are the individuals and organizations that either are involved in the project or whose interests may be affected as a result of the project ○ Planned and managed by scope, time, and cost of project (project triangle)

What considerations do you make when you are examining the internal business environment? Whether exploration strategy diversification strategy last slide ???

○ After examining the corporate strategy, look at the other business units ■ Identify the critical success factors (CSF) for each business unit ■ Allocate resources based upon the position of the business unit in the value chain ■ The IT function must support corporate and business unit strategy ● Diversification mode ○ Internal growth v. acquisition ● Diversification breadth ○ Related v. unrelated markets ● Exploitation strategy Consolidation v. Partnerships

Know the five assumptions of inertia

○ Any change process involves not only learning something new, but also unlearning something that is already present and possibly well integrated in the personality and social relationships of the individual ○ No change will occur unless there is motivation to change and if such motivation to change is not present, the induction of that motivation is often the most difficult part of the change process ○ Organization-wide changes occur only through individual changes in key members of the organization, hence, organizational change is always mediated through individual change ○ Most change initiatives evoke strong emotions, and change targets often have to deal with considerable fear and uncertainty during the change process ○ Change is a multi-stage cycle and all stages must be negotiated somehow or other before a stable change can be said to have taken place

What should a manager create to justify an IT investment? And what should be included in this?

○ Business Case ■ Should include Total Cost of Ownership (TCO) - Costing method that looks beyond initial capital investments to include costs associated with technical support, administration, training, and system retirement and so on

If you want to boost investments in your infrastructure, the focus of your firm is what?

○ Business Effectiveness (Level 2 in Business Maturity Model) ■ Weill's study found that the average firm allocates 46% total IT investment each year to infrastructure, but this differs depending on the industry in which the firm serves and the primary focus of IT for the firm. ■ Firms that hold an agile focus would be more likely to invest in a higher percent of its IT portfolio in infrastructure (51% on average). This investment would likely be used to more quickly and nimbly create solutions needed by the business.

If you want to boost investments in your transaction systems, the focus of your firm is what?

○ Business Efficiency (Level 1 in Business Maturity Model) streamline or cut costs on the way business is done ■ Weill's study found that the average firm allocates only 25% of its total IT investment in transactional systems, but this depends on the industry the firm serves and their primary focus of IT ■ Cost focused firms would seek an IT portfolio that helps lower costs as a primary business objective, which means the business uses applications to automate processes and typically lower operational costs. Weill's study suggests that on average 27% of IT investments are made in transactional investments in this case.

What is the difference between centralized and decentralized governance?

○ Centralized: bring together all staff, hardware, software, data, and processing into a single location. ■ Advantages- common data, one voice for negotiating supplier contracts, faster decision making, less people, access to large capacity, economies of scale and shared cost structure ■ Disadvantages: technology may not meet local needs, slow support for strategic initiatives, lack of business unit control, schism between business and IT org., lack of business unit control of overhead ○ Decentralized: scatter these components across different locations to address local business needs. ■ Advantages- technology customized to local business needs, close partnership between IT and business units, greater flexibility, business unit control of overhead costs, ■ Disadvantages- difficulty in maintaining global standards, higher infrastructure costs, difficulty in negotiating preferential supplier agreements, loss of control

What method of IT funding is the most equitable?

○ Chargeback systems - IT costs recovered by charging individuals, departments, or business units based on actual usage and cost ■ Seen as more equitable bc costs are distributed based on usage or consumption of resources, ensuring that the largest portion of the costs are paid for by the group or individuals who consume it the most.

According to the book, why is outsourcing an option?

○ Cloud computing has made outsourcing more available and accepted ○ a firm can concentrate on its core competencies. ○ Reduce costs

What qualities should a project contain to reduce risk?

○ Complexity (more complex = riskier) ■ Leverage technical skills of team: helpful to have project manager and/or team members who have experience from similar projects and can translate those experience to the current project ■ Relying on consultants and vendors: previous experience can be better found from outside parties rather than attempting to develop in-house skill ■ Integrating within the organization: emphasize communication among team members so everyone is on the same page and are aware of project requirements and milestones ○ Clarity (low clarity = high risk) ■ Managing Project Stakeholders: project managers must balance the goals of various stakeholders to achieve desired outcomes. They have to specifically manage stakeholders to ensure that support is gained among all parties interested in the project. Failure to do so can be costly later on in the project ■ Sustaining commitment to projects: gain and sustain commitment from project stakeholders by assessing 5 primary determinants of project commitment

How do innovation and creativity differ?

○ Creativity - Creation of a novel and useful idea. (The Idea) ○ Innovation - Management practice whereby you take creativity and turn it into something tangible. (The Process of taking that idea and bringing it into the company.) ■ The multi-stage process whereby organizations transform [creative] ideas into new/improved products, service or processes, in order to advance, compete and differentiate themselves successfully in their marketplace

State the formula for leading change

○ D*M*P > Cost of Change D = dissatisfaction with the status quo; M = a new model for the organization; P = the process for change

Name the two rights defined by governance

○ Decision rights and input rights

What are the five learning principles for enterprises?

1. Lifelong learning of employees a. Forms the Spiritual foundation for the learning organization 2. Surface mental models of employees and test for relevancy a. Deeply ingrained assumptions, generalizations, and images that influence how people see the world and what actions they take 3. Clearly defined shared vision a. Organization's view of its purpose, its calling b. Provides the common identity by which its employees and others view it 4. Team "dialogue" a. "Dialogue": Where people essentially think together, occur when people explore their own and others' ideas, in order to arrive at the best solution b. "Discussions": occur when people try to convince others of their point of view c. Few teams dialog; most discuss, so they do not learn. 5. Systems thinking a. To understand systems, people need to understand the underlying patterns

business monarchy

A group of individuals, or business executives... Includes committees comprised of senior business executives (may include CIO) Excludes IT executive acting independently

Feudal

Business unit leaders, key process owners or their delegates

Federal

C-level executives and at least one other business group (CxO and BU leaders)- IT executives may be an additional participant. Equivalent to a country and its states working together.

What type of organization management does IT use to control most of its infrastructure in one location?

Centralized IS organization - does not refer to IT architectures but to decision‐making frameworks

Anarchy

Each individual user

What is a balanced approach to managing a company's IT organization?

Federalism - Structure between Centralized and Decentralized (p208)

What type of organizational management should a company use if it is attempting to obtain the advantages derived from both centralized and decentralized organizational paradigms?

Federalism- a structuring approach that distributes power, hardware, software, data, and personnel between a central IS group and IS in business units.

IT investment and prioritization

How much to invest and where to invest in IT assets--- anticipating new technologies

Business Application Needs

How to acquire, implement, and maintain IT (in and outsource)--- deveoping and maintaining information systems

IT infrastructure strategies

How to build IT assets-- managing internet and network services, data, human resources, mobile computing

IT Principles

How to determine IT assets that are needed- participating in setting strategic direction

IT architecture

How to structure IT assets- establishing architecture and standards

IT Duopoly

IT executives and one other group (CxO or BU leaders)

Sustaining Innovation

Improves a product or service for existing customers. Customer retention

IT Monarchy

Individuals or groups of IT executives

In the 1960's, what technology dictated a centralized approach to governance?

Mainframes- because the mainframe resided in one physical location and represented a considerable investment. Centralized decision making, purchasing, maintenance, and staff kept these early computing behemoths running.

In the case of low urgency, a change agent should close the __________ gap

Opportunity

In the case of high urgency, a change agent should close the _________ gap

Performance

In the 1980's, what technology allowed companies to shift to a decentralized governance?

Personal Computer (PC)

What was the original reason why firms outsourced IT?

Reducing costs was the primary motivation for outsourcing

What type of outsourcing does Kodak represent (according to the book)

Selective outsourcing

What are the common types of IT monitoring tools?

The balanced scorecard and IT dashboards

If you are trying to lower your costs, what type of technology are you going to invest in?

Transactional systems - they automate/streamline processes and lower operational costs

The ultimate goal for a successful IT department

alignment

Firms leading on profit __________ their IT decisions

centralize

Firms leading on growth _________ their IT decisions

decentralize

be able to use the competitive advantage chart to identify whether a resource or capability is a competitive disadvantage, competitive parity, a temporary competitive advantage, or a sustainable competitive advantage (chart with diamonds) (Question: If you have a resource that is common and valuable what is that an example of?) Use diamonds to figure this out

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Farshoring

offshoring that involves service work to a foreign, lower wage country that is relatively far away in distance or time zone or both (DISTANCE DOESN'T MATTER)

● Know the difference between market leading and non-market leading firms Market leading firms realize the strategic importance of IT and seek to make IT a strategic partner.

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matching question

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Archetype

pattern resulting from allocation of decision rights

business continuity plan

preparations to counter physical or electronic attacks, hacking attempts, weather disasters, and other events that could cripple the enterprise

Insourcing

providing IS services or developing them in the company's own in-house IS organization and/or in its local cloud

Be able to suggest a Web 2.0 tool given its' use (to do this, look at the definitions of each of the Web 2.0 tools in the lecture and see how a company would use them)(Question: Your company wants to do something around project management for example, What kind of tools would you suggest they use as web 2.0? )

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People _______change

resist

The new strategy making mode is sense and respond

sense; respond

Be able to identify a type of user given their characteristic (five categories) (Question will ask: You know somebody that acts this way_____. What kind of user are they?)

○ Eager Beavers: The Innovators and Pioneers ■ Everything about technology is wonderful ● Most = in software and hardware companies where their enthusiasm (vision) might be an asset ● Some = part of 'Advanced Technology Group' ■ Approach = Support them with some funding and learn from them ● 'Bleeding edge' companies may need to support with big money ○ Early Adopters: The First Consumers ■ "Disciples" not too far behind the innovators ■ Often have lots of discretionary income and think the corporation does too ■ Enterprises could miss a market by ignoring these people ■ Approach = Need to be managed ■ They need IS's help and encouragement but should not be allowed to overwhelm ■ Watch money closely ● Make sure they invest their own money in experiments ○ Early Majority: The First Big wave ■ Willing to use technology but need some help to make it happen ■ Not self-sufficient pioneers or risk takers ■ Tend to be in relatively important positions ■ Make or break introduction to new technology ■ Approach = Need to understand how they view the company, customers and competition; then help them choose a strategy to expand their familiarity with, say, the wireless Internet ■ IS management must become adept at creating options that can be tested for acceptance or rejection ○ Late Majority: The Technology Skeptics ■ Not afraid of technology, but they do have serious concerns about risks and costs ■ Concerned about wasting time and $ ■ Approach = IS management needs to be prepared to address risks and costs as they are to address technology opportunities ■ Need to show an appreciation of 'bottom-line' ($) concerns and answer security questions at a level that late majority people can appreciate ○ Technically Averse: "Not On My Time You Don't" ■ Resist technology ■ In many cases, their concerns about loss of privacy, security, control, and possible exposure to competition override any perceived benefits of the technology ● Some = industry 'trend' / trait ○ Sunk costs etc. ■ Approach = IS first needs to understand their concerns ■ They (may) have justifiable business fears that need to be identified and addressed before any thought of using a new technology for business purposes can be entertained

What are the benefits of federalism?

○ Economies of scale ○ Control of standards ○ Critical mass of skills ○ Users controls IT priorities ○ Business units have ownership ○ Responsive to business unit's needs

Why do firms outsource IT activities

○ From the book: ■ lower costs due to economies of scale ■ ability to handle processing peaks ■ the client company's need to consolidate data centers ■ Concentrate on core competencies ■ the outsourcing provider's larger pool of resources than the client company's allows the provider leeway in assigning available capacity to its clients on demand. ■ an outsourcing provider may help a client company to consolidate data centers following a merger or acquisition or when the internal group cannot overcome the inertia of its top management ○ From the lecture: ■ Reduced IT costs ■ Improved technology and services ■ Business focus ■ Downsizing and rightsizing ■ Access to knowledge ■ Reduced capital expenditure ■ Vendor value proposition

What are the risks of outsourcing

○ From the book: ■ requires that a client company surrender some control over critical aspects of the enterprise ■ outsourcing client companies may not adequately anticipate new technological capabilities when negotiating outsourcing contracts-result in a loss in IS flexibility. ■ by surrendering IS functions, a client company risks the potential loss of competitive advantage ■ contract terms may leave client companies highly dependent on their outsourcing provider with little recourse in terms of terminating troublesome provider relationships. (That is, the clients may be locked into an arrangement that they no longer want. It may be too expensive to switch to another outsourcing provider should the contract sour) ■ it might be harder to protect its competitive secrets when a company employs an outsourcing provider ■ the outsourcing provider's culture or operations may be incompatible with that of the client company, making the delivery of the contracted service or system difficult ■ although many companies turn to outsourcing because of perceived cost savings, these savings may never be realized ○ From the lecture: ■ Possibility of weak management ■ Inexperienced staff ■ Business uncertainty ■ Outdated technology skills ■ Endemic uncertainty ■ Hidden costs ■ Lack of organizational learning ■ Loss of innovative capacity ■ Dangers of an external triangle ■ Technological indivisibility ■ Fuzzy focus

Enterprise Level 3

○ IT as Business Partner ■ Proactive ■ Outside‐in ■ Relationship centric ■ Focused on business growth ■ Framed on a context of business value

Enterprise Level 1

○ IT as Order Taker ■ Reactive ■ Inside‐out ■ Technology centric ■ Framed in a context of cost

Enterprise Level 2

○ IT as Solutions Provider ■ Active ■ Process centric ■ Focused on solutions ■ Framed in a context of projects

What mechanisms are used to create and ensure good IT governance?

○ IT governance has two major components: (1) assignment of decision‐making authority and responsibility and (2) decision‐making mechanisms (e.g., steering committees, review boards, policies).

In the early days of IT, who would the CIO report to? And why? And who does the CIO report to now? And why?

○ In the early days, the CIO reported to the CFO ■ The role was predominantly responsible for controlling IT costs ○ Now, CIO reports to the CEO or the Board of Directors due to the role being an official "C-Suite" level position ■ Involved with operational and strategic tasks related to IT ■ Responsible for all IT responsibilities throughout the organization

What does it mean if someone wants a system cheaply, quickly, and with a large scope?

○ It is usually not possible to complete a project cheaply, quickly, and with a large scope. To do so usually means introducing errors and completion at a quality level that is too low for acceptance testing. The reasoning is that many cutting‐edge technologies can be acquired, but they are often proprietary and unique, requiring steep fees or specialized "rock star" developers to adapt or install them.

What is the driver for insourcing?

○ Managers are concerned that if they outsource a core competency, they risk losing control over it or losing contact with providers who can help them remain innovative in relation to that competency? ○ Higher control of core competencies and remaining innovative, reducing the risk of losing competitive edge ○ Having an IS service or product that requires considerable security, confidentiality, or adequate resources in‐house

What are the three strategies for successful IT experimentation?

○ Motivate- Establish rewards for strategic IT experimentation ○ Support- create infrastructure to support experimentation ○ Direct- manage innovation strategically

What role does IT play in innovation?

○ Operates at a product, process, and strategic level ○ IT can be the product [product level] ○ IT can facilitate the creation [process level] ○ IT can change the market [strategic level]

Why are outsourcing decisions difficult and expensive to reverse?

○ Outsourcing requires the enterprise to reacquire the necessary infrastructure and staff. Unless experienced IT staff from elsewhere in the firm can contribute, outsourcing major IT functions means losing staff to either the outsourcing provider or other companies

Know the different distribution approaches for software

○ Parallel: Use both new and old systems for a time, then begin only using new system (conservative) ○ Direct Cutover: One system suddenly replaces the old one (risky) ○ Pilot Testing: System tested in one business unit, then expanded throughout the business ○ Phased: System slowly brought online throughout business units

What are the elements of the vendor value proposition? (elements of formula)

○ Personnel Development + ○ Methodology Development + ○ Customer Relationship Management + ○ Complementarities in Core Competencies = ○ Productivity Gains Available to Client

What is the impact of process centering?

○ Process Centering: Turns people into professionals rather than workers ■ If you define a professional as someone who is responsible for achieving results rather than performing a task ■ The professional is responsible to customers, solving their problems by producing results ■ Implication for IT: ● IT in charge of process centering and BPR ● Puts IT in center of organization design

A series of the revolutions have contrasts. Be able to identify the contrasts (e.g. communities rather than groups, Process centering not functioning centering, etc) (Question will say: which of the following is not a contrast that we talked about in lecture)

○ Processes rather than Functions ○ Communities rather than Groups ○ Virtual rather than Physical ○ Self-Organizing rather than Designed ○ Adaptable rather than Stable ○ Distributed rather than Centralized

What does PMO stand for?

○ Project Management Office- a department responsible for boosting efficiency, gathering expertise, and improving project delivery. A Project Management Office operates at the project level and often is tasked with accomplishing goals defined in various organizational programs.

What are the four essential elements of any project?

○ Project management: includes the project sponsor who initiates the project and a project manager who makes sure that the entire project is executed appropriately and coordinated properly. ■ The project sponsor liaises between the project team and the other stakeholders. The sponsor is the project champion and works with the project manager in providing the leadership to accomplish project objectives. Secures financial resources for the project ○ Project team: consists of those people who work together to complete the project. Teamwork begins by clearly defining the team's objectives and each member's role in achieving these objectives. Teams need to have norms about conduct, shared rewards, a shared understanding of roles, and team spirit. ○ Project plan: takes into account the project's scope, time, and cost. Using the project plan, the time and resources (e.g., financial and human) needed to complete the work based on the project's scope are identified, and tasks are assigned to team members. ■ Based on estimates, usually cost and schedule (often drafted from past similar project plans or guessing) ○ Common project vocab: To avoid misunderstandings, project team members need to commit to a consistent meaning for terms used on their project, and then record and explain them in its own common project vocabulary. The common project vocabulary includes many terms and meanings that are unfamiliar to the general manager and the team's other business members.

What helps to increase project success?

○ Project success has been linked to digital convergence, which involves collapsing the gap between the IS and business units. Business projects increasingly rely on IS to attain their objectives, especially with the increased focus of business over the Internet. To succeed, a general manager must be both a project manager, a risk manager, and a team player with IS managers. ○ is often the ability to adapt existing business processes and systems to produce innovative ideas faster than the competition. ○ Typical adaptation projects include the following: ■ Promoting digital convergence ■ Rightsizing the organization ■ Re‐engineering business processes ■ Adopting more comprehensive, integrative processes ■ Incorporating new information technologies

● What is the difference between ROI, IRR, NPV, EVA, and payback (in terms of their objective)

○ ROI (return on investment) - Excess of return over the investment ■ ROI = (revenue - investment)/investment ■ Tells you if you will gain from the investment of interest ■ Use when detailed analysis is not required, such as when a project is short lived and its costs and benefits are clear. ○ IRR (internal rate of return) - represents the rate that is earned on an investment. The rate is compared to a target that is determined by corporate policy ○ NPV (net present value) - accounts for the time value of money. NPV discounts the cash flows from future periods as being worth less than immediate cash flows. ■ if you calculate a negative NPV, you probably shouldn't take on the investment ■ When the project lasts long enough that the time value of money becomes a factor, NPV and EVA are better approaches ○ EVA (economic value added) - determines the amount of benefit of an investment that exceeds the costs of the capital used for the initial investment. ■ It is sometimes implemented firmwide as net operating profit after taxes (capital x cost of capital) ■ particularly appropriate for capital‐intensive projects. ○ Payback period - computes how long a firm estimates it must wait until all costs are finally recouped. ■ Use when detailed analysis is not required, such as when a project is short lived and its costs and benefits are clear.

How does IT impact the cost structure of an organization?

○ Reduces transaction costs (costs of buying/selling in a market): IT could change hierarchy of decision making by lowering cost of information acquisition and distribution ○ Reduces Agency costs (costs of having an agency make decisions for a cost): IT makes it cheaper and easier to make a decision

What are indications that a project is successful?

○ Resource constraints: Does the project meet the established time and budget criteria? Most projects set some measure of short‐term success along this dimension that is easy to measure. ○ Impact on customers: How much benefit does the customer receive from this project? ○ Business success: How high are the profits and how long do they last? Did the project meet its return on investment goals? ○ Prepare the future: Has the project altered the organization's infrastructure so that its future business success and positive customer impact are likely?

Understand the risks and benefits of outsourcing

○ Risks ■ Possibility of weak management ■ Inexperienced staff ■ Business uncertainty ■ Outdated technology skills ■ Endemic uncertainty ■ Hidden costs ■ Lack of organizational learning ■ Loss of innovative capacity ■ Dangers of an external triangle ■ Technological indivisibility ■ Fuzzy focus

Know the difference between SaaS, PaaS, and IaaS

○ SaaS: Software as a Service ■ Provides software application functionality through a web browser ■ Most widely known and used form of cloud computing ■ Both platform and infrastructure are managed by cloud provider, so if the operating system or underlying service isn't configured correctly, data at the higher application layer may be at risk ○ PaaS : Platform as a Service ■ Provides services using virtualized servers on which clients can run existing applications or develop new ones without having to worry about maintaining the operating systems, server hardware, load balancing, or computing capacity; the cloud provider manages the hardware and underlying operating system, which limits its enterprise risk management capabilities ○ IaaS: Infrastructure as a Service ■ Provides infrastructure through grids or clusters or virtualized servers, networks, storage, and systems software designed to augment or replace the functions of an entire data center ■ Customer may have full control of actual server configuration allowing more risk mgt control over the data and environment ■ Fastest growing segment in public cloud services market

What are the three sides of the project triangle? And what is at the center?

○ Scope ○ Time- refers to the time required to complete the project ○ Cost- encompasses all the resources required to carry out the project ○ Quality is at the center

How do you divide scope in a project?

○ Scope may be subdivided into that of the product (the detailed description of the system's quality, features, and functions) and of the project itself (the work required to deliver a product or service with the intended product scope).

Know Nolan's stage process (Question will be like: Your company views IT this way______What stage are you in according to Nolan?)

○ Stage 1: initiation ■ Initial introduction of computers to the organization. Batch processing to automate clerical operations to achieve cost reduction, operational systems focus, lack of management interest, and centralized development ○ Stage 2: Contagion (expansion) ■ Centralized rapid growth as users demand more applications based on high expectations of benefits, move to online systems, trying to satisfy user demands. Little control if any. IT expenses increase rapidly. ○ Stage 3: Control ■ In response to management concern about cost vs. benefits, systems projects are expected to show a return, plans are produced, and methodologies/standards enforced. Planning controls are introduced. ○ Stage 4: Integration: ■ Considerable expenditure on integrating (via telecommunications and databases) existing systems. User accountability for systems established and IT provides a service to users. At this time, there is a transition to supporting knowledge workers and from data processing ○ Stage 5: Data administration ■ Information requirements rather than processing drive the applications portfolio and information is shared within the organization. Database capability is exploited as users understand the value of the information and are willing to share it ○ Stage 6: Maturity ■ The planning and development of IT in the organization is closely coordinated with the business development. Corporate wide systems are in place. The IT department and the users share accountability regarding resources. IT is a strategic partner.

What is the traditional approach to strategy making for IT? And what assumptions does this make? (Know the three steps and the assumptions)

○ Steps in traditional strategy-making: ■ Business executives created a strategic business plan ● Where the business wanted to go ■ IS executives created an IS strategic plan ● How IT would support the business plan ■ IT implementation plan created ● Describe exactly how the IS strategic plan would be implemented ○ Assumptions: ■ The future can be predicted ■ Time is available to do all three steps ■ IS supports and follows the business ■ Top management knows best (broadest view of firm) ■ Company = like an 'Army'

Name the three types of alignment

○ Strategic ○ Structural ○ Social

What activities will IT organizations outsource?

○ Strategic networks ○ Platforms ○ Business ecosystems

Understand the relationship between the four roles of IT (i.e. strategic, turnaround, factory, and support) and the presumption of whether or not they should outsource IT. (Question on test will be like: If your company views IT strategically, What's the presumption on outsourcing? Yes or no? So going to have to be able to identify the relationship between the presumption of outsourcing and the role of IT.)

○ Strategic: High IT impact on strategy, high impact on operations - Mixed outsourcing perspective ○ Turnaround: High IT impact on strategy, low impact on operations - Mixed outsourcing perspective ○ Factory: Low IT impact on strategy, High impact on operations - Yes, outsource unless company is huge and well managed ○ Support: Low IT impact on strategy, low impact on operations - Yes, outsource

Know Tichy's levers of managerial change (Question will be like: if you were to do this_____ what lever are you using?)

○ Technical levers- Examples include the design and structure of the company and the processes in the organization ○ Political levers- power and resources ○ Cultural levers- norms, values, and assumptions in an org.

Know McFarland's strategic grid (Question will be like: Your company doesn't currently use IT critically, but will use IT critically in the future, what is the role of IT in that company? So be able to use McFarland's grid to identify the role of IT.)

○ The first question is, what is the current state of IT inside the company? Is her company viewing IT as a critical asset or a non-critical asset. The second question we need to ask is as we look ahead to the future, are we going to view this as a critical asset or a non-critical asset?

What is agile software development? And SDLC? And what are the differences?

○ The general manager needs to understand the issues specific to the IT aspects of projects to select the right management tools for the particular challenges presented in such projects. ○ Agile: It is an iterative, incremental approach that allows development teams to respond to the unpredictability of building and implementing software. Its four core values and 12 principles are laid out in the Agile Manifesto. ■ agile methodologies tend to be people‐ rather than process‐oriented. They adapt to changing requirements by iteratively developing systems in small stages and then testing the new code extensively. ■ Agile methodologies are also characterized by more interactions with customers and frequent redesign to accommodate modifications emerging from the changing user requirements. ■ Ex: Scrum, Extreme Programming (XP), Kanban, Crystal, Lean, Feature‐Driven Development, and Dynamic System Development Method (DSDM). ○ SDLC: often called the Waterfall Method, is the set of activities used to create an IS, a process in which the phases of the project are well documented, milestones are clearly identified, and all individuals involved in the project fully understand what exactly the project consists of and when deliverables are to be made. The SDLC typically refers to the process of designing and delivering the entire system. ■ On the one hand, it is the general project plan of all the activities that must take place for the entire system to be put into operation, including the analysis and feasibility study, development or acquisition of components, implementation activities, maintenance activities, and retirement activities. In the context of an information system, however, the term SDLC can refer to a highly structured, disciplined, and formal process for design and development of system software. ■ an overview of a more traditional tool for developing IS or for implementing software developed by an outsourcing provider or software developer: the Systems Development Life Cycle ○ Difference: The SDLC approach is a process‐oriented approach that is much more structured than other development approaches, what else?

Why does a project manager break up a project? And how?

○ To organize the work of a project team, the project manager may break a project into subprojects. He or she then organizes these subprojects around distinct activities, such as quality control testing. This organization method allows the project manager to contract certain kinds of work externally to limit costs or other drains on crucial project resources.

Understand the options of outsourcing from the lecture (selective, total, transitional, offshore, and domestic)

○ Total ■ Outsource all IT ■ Advantages: Consistency & stability with the same vendor for many activities. Lower transaction Costs ■ Disadvantages: Vulnerable to vendor manipulation of pricing and maintenance costs. Vulnerable to loss of vendor support ○ Transitional ■ Outsource legacy systems while working on new systems ■ Advantages: Outsource legacy systems makes staff free to focus on new systems. Legacy systems are mature and customers and vendors understand requirements and can write a sound contract. ■ Disadvantages: Vulnerable to vendor manipulation of pricing and maintenance costs. Vulnerable to loss of vendor support if the new system is delayed. ○ Selective ■ Outsource only some aspect of IT ■ Advantages: Select best-of-breed for an activity. Create a competitive environment. Flexible; adapt to change. Capitalize on organizational learning. Less risky than total outsourcing. ■ Disadvantages: Multiple vendors to manage. Higher transaction costs associated with multiple evaluations and contract negotiations ○ Offshore ■ Outsourcing in another country ■ Utilizing an organization external to a firm that performs some or all of the programming in a country other than the one where the product will be sold or consumed ○ Domestic ■ Outsourcing domestically ■ Utilizing an organization external to a firm that performs some or all of the programming in a country where the product will be sold or consumed

What are the four asset classes of IT investments?

○ Transactional systems: Streamline or cut costs on the way business is done (equivalent to Level 1 in the Business Maturity Model) ○ Infrastructure systems: Provide the base foundation of shared IT services used for multiple applications such as servers, networks, tablets, or smartphones (equivalent to Level 2 in the Business Maturity Model) ○ Informational systems: Provide information used to control, manage, communicate, analyze, or collaborate (equivalent to Level 2 in the Business Maturity Model) ○ Strategic systems: Gain competitive advantage in the marketplace (equivalent to Level 3 in the Business Maturity Model)

Name the five elements for a successful outsourcing arrangement (lecture 5)

○ Trust ○ Business understanding ○ Benefit/Risk share ○ Conflict avoidance ○ Commitment

What type of flexibility is needed to maintain balance in a project with a fixed budget and a well-defined scope?

○ Typically, only two elements within the project triangle (scope, cost, time) can be optimized, and the third must be adjusted to maintain balance. ○ In this case, if cost and scope are well defined and optimized, time must be adjusted accordingly ????

Understand the pitfalls associated with users when implementing IT

○ User behavior is not deterministic ■ Making generalities about people such as: there's a generational effect with how people view technology. This is a pitfall because it could be that you as a project manager, as you're introducing technology, look at maybe the executives or the older generation and assume that they're going to be the sources of resistance. You cannot assume this to be true. There's also a school of thought that men simply like technology better than women. ○ The social nature of the organization is crucial ■ People may say technology is bad whether or not it actually is ○ Power and politics play a role in implementation ○ Users want the innovation to liberate them and set them free from the constraints of their job ○ Upper management support is crucial ■ If top management is not on board to the introduction of IT, it is difficult to envision a scenario where the introduction of IT will be successful.

What are the inputs to Web 2.0 technologies? Know inputs (Question: Which of these is an example of an input to a web 2.0 technology?)

○ User generated content ■ Text ■ Images ■ Video ■ Interactive media ■ Virtual architecture ○ Opinions ■ Links ■ Clicks ■ Tagging ■ Ratings ■ Social connections ○ Applications ■ Web applications ■ Widgets

Name the three characteristics of a resource or capability that determine whether it is a sustainable competitive advantage

○ Valuable ○ Rare ○ Inimitable

Backsourcing

○ business practice in which a company takes back in-house assets, activities, and skills that are part of its information systems operations and were previously outsourced to one or more outside IS providers

Cloud computing

○ dynamic provisioning of third-party-provided IT services over the Internet using the concept of shared services ■ Providers can make any amount of resources available to clients ■ Can involve just one server or multiple data centers' worth of servers, networking devices, systems mgt, security, storage, and other infrastructure available to clients ■ Clients can buy the exact amount of storage, computing power, security or other IT functions that they need, when they need it, and pay only for what they use. ■ Cost saving by sharing provider's resources with other clients ■ 24/7 access using mult. Mobile devices, high availability for large backup data storage, and ease of use

Balanced scorecard

○ focuses attention on the organization's value drivers ■ Companies use scorecard to assess the full impact of their corporate strategies on their customers and workforce as well as their financial performance ■ Provide summary information gathered over a period of time

Hybrid Captive

○ performs the more expensive, higher-profile, or mission-critical work for the parent company and outsources the more commoditized work that is more cheaply provided by an offshore provider

Outsourcing

○ purchasing a good or service that was previously provided internally or that could be provided internally but is now provided by outside providers

Business case

○ structure document that lays out all the relevant information needed to make a go/no-go decision for IT investments ■ Should include: ● Primary elements ○ Executive summary ○ Overview and intro ○ Assumptions and rationale ○ Project summary ○ Financial discussion and analysis ○ Benefits and business impact ■ Financial ■ Quantifiable ■ Measurable ■ Observable ○ Schedule and milestones ○ Risk and contingency analysis ○ Conclusion and recommendations ○ Appendices

IT dashboards

○ summarizes key metrics for senior managers in a manner that provides quick identification of the status of the organization ■ provides a snapshot of metrics at any given point in time

Why are companies reluctant to embrace cloud computing?

○ technical lock in ○ long‐term business commitments ○ lost IT capabilities, which ultimately could lead to overdependence on the outsourcing provider ○ Concern over security, specifically with external threats from remote hackers and security breaches as the data travels to and from the cloud ○ data privacy ○ the ability to tailor service‐level requirements, such as uptime, response time, availability, performance, and network latency, to the specific needs of a client is far less than with insourcing or many other outsourcing options. ○ For multinationals, a related challenge is data sovereignty, which means that data are subject to the laws of the country in which they are located

Why is valuing an IT investment difficult?

○ the systems are complex, and calculating the costs is an art, not a science ○ because many IT investments are for infrastructure, calculating a payback period may be more complex than other types of capital investments ○ many times the payback cannot be calculated because the investment is a necessity rather than a choice without any tangible payback ■ For example, upgrading to a newer version of an app and/or smartphone operating system may be required because the older version simply is not supported. In the end, the investment would likely add no incremental value.

Nearshoring

○ use of providers in foreign, lower-wage countries that are relatively close in distance or time zones to the client company (DISTANCE DOES MATTER) ■ Close in one or more dimensions: geographical, temporal, cultural, linguistic, economic, political, or historical linkage ■ Goal: lowered risk of facing challenges in terms of communication, control, supervision, coordination, and social bonding

Where is there value in an enterprise?

● Its in Strategy and customers ○ 1. Core (strategy) & Periphery Services (customer-facing employees making decisions and taking actions) ■ Value moves to the ends ● Value is in the core (leadership and strategy handled by top management) and the periphery (customer-facing employees making decisions and taking actions) ■ For IT, this means putting technologies that provide distinct capabilities for interacting with customers and for aggregating relevant information for strategy decisions ○ 2. In common infrastructure ■ Firms are increasingly sharing infrastructure by using common providers through outsourcing ■ Allows for infrastructure to be operated as a utility ■ As utility, pay what you use (like chargeback systems) ■ Dynamic combinations of infrastructure when needed ■ Provides economies of scale through networking with other firms ■ Reduces cost to individual firms ○ 3. Modularization & Orchestration ■ Selective outsourcing and the network based economy showed is the modularization of the firm ■ The true value for organizations then is the ability to put these modules back together ■ IT leverages the inter-connection of the modules with providers to source services