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Experiencing M I S

Ninth Edition

Chapter 11

Information Systems Management

Slides in this presentation contain hyperlinks. JAWS users should be able to get a list of links by using INSERT+F7

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“Outsourcing the Development of a Strategic Application Seems Risky.”

Team discuss outsourcing A R E S development to India.
Raj’s friend in India (Sandeep) is a developer.
Successfully developed

app for him.

Risks: What if he doesn’t finish? Takes code? Loses interest?
Will cost 4 to 6 times as much to develop in U.S.
Bite the bullet and hire own programmers.

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Study Questions

11-1 What are the functions and organization of the I S department?

11-2 How do organizations plan the use of I S?

11-3 What are the advantages and disadvantages of outsourcing?

11-4 What are your user rights and responsibilities?

Information systems are critical to organizational success and need to be managed responsibly. The chapter surveys the management of IS and IT resources. It first discusses the major functions and the organization of the IS department. Then, it discusses planning the use of IT/IS.
Outsourcing is the process of hiring outside vendors to provide business services and related products. For our purposes, outsourcing refers to hiring outside vendors to provide information systems, products, and applications. The pros and cons, and risks of outsourcing discussed.
The chapter next discusses the relationship between users to the IS department, such as user and IS department’s rights and responsibilities.
The chapter concludes with a discussion of possible challenges that we will face in 2027, such as mobile devices at work.

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The Major Functions of the I S Department

11-1 What are the functions and organization of the I S department?

Plan use of I S to accomplish organizational goals and strategy.
Manage outsourcing relationships.
Protect information assets.
Develop, operate, maintain computing infrastructure.
Develop, operate, maintain applications.

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How is the I S Department Organized?

11-1 What are the functions and organization of the I S department?

Figure 11-1 Typical Senior-Level Reporting Relationships

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What I S-Related Job Positions Exist? (1 of 3)

11-1 What are the functions and organization of the I S department?

Figure 11-2 Job Positions in the Information Systems Industry (continues on next two slides)

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What I S-Related Job Positions Exist? (2 of 3)

11-1 What are the functions and organization of the I S department?

Figure 11-2 Job Positions in the Information Systems Industry (con’t.)

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What I S-Related Job Positions Exist? (3 of 3)

11-1 What are the functions and organization of the I S department?

Figure 11-2 Job Positions in the Information Systems Industry (con’t.)

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Salaries for Information Systems Jobs

11-1 What are the functions and organization of the I S department?

Figure 11-3 Salaries for Information Systems Jobs

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Planning the Use of I S/I T

11-2 How do organizations plan the use of I S?

Figure 11-4 Planning the Use of I S/I T

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What is Outsourcing?

11-3 What are the advantages and disadvantages of outsourcing?

Process of hiring another organization to perform services.

Save costs, gain expertise.
Save direct/indirect management time and attention.

Any value chain business activity can be outsourced.
“Your back room is someone else’s front room.” (Drucker)

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Popular Reasons for Outsourcing I S Services

11-3 What are the advantages and disadvantages of outsourcing?

Figure 11-5 Popular Reasons for Outsourcing I S Services

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Top-10 Highest-Paid Tech Skills

11-3 What are the advantages and disadvantages of outsourcing?

Figure 11-6 Top-10 Tech Skills

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Poor Data Management at Facebook

So What?

Over 2 billion active users
Open model that allowed integration of a variety of other platforms and services

Users could log into 3rd party sites with Facebook login

Open model enabled 3rd party to siphon off 80 million Facebook users’ data

Data management practices damaged reputation

Questions

1. To what extent are social media platforms an important part of your daily interactions? Do you use a certain social media platform because your family or friends use it? Why do you think this is the case?

2. Are you one of the 87 million Facebook users who had their data shared with Cambridge Analytica? If so, did this situation bother you? Why or why not?

3. During Mark Zuckerberg’s hearings on Capitol Hill, it became clear that many politicians have minimal knowledge about how Facebook operates as a business. How does this present challenges for the creation of regulations that may be put in place to ensure that Facebook and other tech companies properly manage user data?

4. Why would Facebook offer a pay option? Would it be worth it to you to pay a monthly fee to access Facebook and know that your personal data would be protected? Why or why not?

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Risk Reduction

11-3 What are the advantages and disadvantages of outsourcing?

Caps financial risk.
Ensures quality or avoids substandard quality.
Less likely to pick wrong hardware, software, network protocol, or implementing tax law changes incorrectly.
Vendor’s responsible for managing risks.

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International Outsourcing

11-3 What are the advantages and disadvantages of outsourcing?

India

Large, well-educated, English-speaking; labor cost is 20-30% of the U.S. labor cost

China and other countries, too.
Modern telephone technology and Internet-enabled service databases.
Customer support and other functions operational 24/7.

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I S/I T Outsourcing Alternatives

11-3 What are the advantages and disadvantages of outsourcing?

Figure 11-7 I S/I T Outsourcing Alternatives

Categories of alternatives according to information systems components and outsourcing of hardware to the cloud.

Electronic Data Systems (EDS) successful for more than 30 years as outsource vendor of hardware infrastructure.
Software as a service (SaaS) an outsourcing alternative that provides hosted applications and data storage. Salesforce.com is a typical example of a SaaS provider.
Outsource an entire system: Oracle provides entire payroll function as an outsourced service. Client company only provides employee and work information, while payroll outsource vendor does the rest.
Web storefront is a form of application outsourcing. Amazon.com provides a Web storefront for product vendors and distributors who choose not to develop their own Web presence.
Some organizations choose to outsource an entire business function. Many companies outsource to travel agencies the function of arranging for employee travel. Some outsource vendors operate offices within other company’s facilities.

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What are the Risks of Outsourcing?

11-3 What are the advantages and disadvantages of outsourcing?

Figure 11-8 Outsourcing Risks

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Benefits Outweighed by Long-Term Costs

11-3 What are the advantages and disadvantages of outsourcing?

Dangers

Unit fixed cost contract prevents economies of scale.
Vendor de facto sole source.
Changing pricing strategy.
No easy exit (tightly integrated vendor).
Difficult to know if vendor well managed.

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Your I S Rights and Responsibilities

11-4 What are your user rights and responsibilities?

Figure 11-9 User Information Systems Rights and Responsibilities

If you process huge files for data-mining applications, you have a right to the huge disks and fast processor that you need. However, if you merely receive email and access corporate Web portal, then your right is for more modest requirements.
Reliable means you can process without problems.
Organization should protect your computer and files, and you should not normally need to think about security.
Participate in requirements meetings for new applications you will use and for major changes to applications currently used.
Receive prompt attention to your problems, concerns, and complaints about information services. Right to have means to report problems, and to know your problem has been received and registered with IS department. Right to have your problem resolved, consistent with established priorities.
Training convenient to you, easy to understand, and enables you to use systems to perform your job.

Your responsibilities toward IS department and organization.

Do not expect hand-holding for basic operations. Nor expect to receive repetitive training and support for same issue.
Responsible for protecting your password(s), computer, your organization’s networks and databases.
Unauthorized modifications could interfere with automated maintenance programs for upgrading your computer and cause problems the IS department will have to fix.
Responsibility to treat information systems professionals professionally. One form of professional behavior is to learn basic computer skills to avoid reporting trivial problems.

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How Does the Knowledge in This Chapter Help You? (1 of 2)

Know primary responsibilities of I S department and can understand why department may implement standards and policies it does
Know planning functions of I S and how they relate to rest of organization
Know reasons for outsourcing I S services, most common and popular outsource alternatives, and outsourcing risks
Know how to be a better consumer of I S department services

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How Does the Knowledge in This Chapter Help You? (2 of 2)

Know kinds of work that must be done and the advantages, disadvantages, and choices for outsourcing work
Know the advantages and disadvantages of outsourcing software development
Knowing your rights and responsibilities will enable you to be a more effective business professional by setting reasonable expectations as to what you can expect from the I S department
Knowing what the IS department expects of you

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Training Your Replacement (1 of 2)

Ethics Guide

Scott must cut his team of software developers by 75 percent.
They are going to be replaced with new outsourced employees—working on the other side of the planet.
Employees who are being released will train the new outsourced employees.
Training the replacements will be a condition of departing employees’ severance package.

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Training Your Replacement (2 of 2)

Ethics Guide

How is it fair to ask someone to train the person taking his or her job?
Scott wondered how long it would be before he was training his own replacement.
Do you think that forcing an employee to train his or her replacement is ethical according to the categorical imperative? The utilitarian perspective?

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Data Governance Officer

Career Guide

Susan M. Jones at Utah State University

Q. What attracted you to this field?

A. “Honestly, what isn’t attractive about this field? The information

technology (IT) field is exciting, innovative, and

dynamic. IT connects every division in an organization...”

Q. What advice would you give to someone who is considering working in your field?

A. “Data governance requires the coordination of many roles

and organizational areas. Therefore, my advice is to take

time to analyze the big picture and make connections,

whether working for yourself or for a large company…”

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Active Review

11-1 What are the functions and organization of the I S department?

11-2 How do organizations plan the use of I S?

11-3 What are the advantages and disadvantages of outsourcing?

11-4 What are your user rights and responsibilities?

How does the knowledge in this chapter help you?

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Automating Labor (1 of 3)

Case Study 11

McDonald’s former C E O Ed Rensi stated that a single $35,000 robotic worker would cost less and be more productive than a $15-an-hour human worker.

The hamburger-making robot can make 400 burgers per hour, every hour, without a break.
It can completely replace three human fast-food workers.

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Automating Labor (2 of 3)

Case Study 11

In 2016, Foxconn (supplier to Apple) replaced 60,000 factory workers with robots.
Airbus is going to use H R P-2 and H R P-4 humanoid robots to assemble its airplanes.
Amazon.com is using 200,000 Kiva robots at its fulfillment centers to help process customer orders.

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Automated Versus Human Labor

Case Study 11

Figure 11.10 Automated Versus Human Labor

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Automating Labor (3 of 3)

Case Study 11

By 2030, nearly 800 million workers may be taken out of the current worldwide labor force.

Robots will have I Qs higher than 90 percent of the U.S. population.

They will likely take jobs that involve routine physical and mental tasks.
How might the automation of labor provide a competitive advantage for forward-looking companies?

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Copyright